Agenda packet — Fontana City Council, October 22, 2024 (part 2 of 3)

234
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Unaudited
Fund Balance
July 1, 2024
Revenues Transfers In Expenditures Transfers Out Available Net Project
Carryover
Net
Proposed
Adjustments
Estimated
Fund Balance
June 30, 2025
Other Funds - Unreserved Fund Balances
Budget
Fiscal Year 2024/2025
Special Revenue Funds:
362 CDBG 827,546$ 2,125,000$ -$ (2,443,170)$ (91,800)$ 417,576$ 439,055$ 350,347$ 1,206,978$ 363 Home Program 84,045 810,000 0 (826,340) 0 67,705 133,193 86,340 287,238 365 Down Pymt Assistance Prgm 11,653 0 0 0 0 11,653 0 11,653 385 After School Program (175,160) 4,407,400 0 (3,859,940) (372,300) 0 0 0 386 ASES ELO-P Grant (1,022,574) 14,880,870 0 (13,062,850) (372,300) 423,146 0 (423,146) 0 387 ASES ELO-P TK Grant 0 432,680 0 0 0 432,680 0 (432,680) 0 395 LMD #1 City Wide 1,224,616 914,510 0 (1,827,810) (244,440) 66,876 0 (14,513) 52,363 396 LMD #2 Village of Heritage 920,371 2,584,930 1,591,590 (3,676,730) (499,720) 920,441 0 (829,112) 91,329 397 LMD #3 Empire Center 262,112 62,170 0 (72,860) (12,830) 238,592 0 (3,411) 235,181 398 LMD #3 Hunter's Ridge 2,249,388 797,960 107,140 (1,209,810) (161,950) 1,782,728 0 (41,633) 1,741,095 399 LLMD #3 Hunter's Ridge 73,640 35,140 0 (34,620) (7,000) 67,160 0 67,160 401 CFD #1 Southridge Village 4,001,099 5,803,020 0 ( 5,317,490) (2,587,170) 1,899,459 (432,759) (388,983) 1,077,717 403 CFD #6-3A Bellgrove II 460,008 229,460 0 (
176,490) (55,650) 457,328 0 457,328
404 CFD #6-2 N Morningside 333,339 91,180 0 (101,310) (15,280) 307,929 0 307,929 405 CFD #6-1 Stratham 544,254 184,300 0 (146,060) (124,270) 458,224 0 458,224 406 CFD #6 The Landings 2,989,328 413,330 105,430 (719,760) (88,650) 2,699,678 0 (27,312) 2,672,366 407 CFD #7 Country Club Estates 292,837 112,150 13,100 (173,170) (33,310) 211,607 0 (8,268) 203,339 408 CFD #8 Presley 623,588 72,590 106,600 (406,560) (57,150) 339,068 0 (56,048) 283,020 409 CFD #9M Morningside 68,419 208,980 0 (176,630) (123,490) (22,721) 0 22,721 0 410 CFD #10M Jurupa Industrial 268,193 37,610 0 (67,690) (9,390) 228,723 0 (1,048) 227,675 412 CFD #12 Sierra Lakes 1,489,820 912,800 218,480 (1,284,630) (199,480) 1,136,990 0 (127,148) 1,009,842 413 CFD #13M Summit Heights 510,025 625,300 105,980 (937,720) (125,690) 177,895 0 (36,789) 141,106 414 CFD #14M Sycamore Hills 157,435 486,150 0 (329,860) (234,320) 79,405 0 (13,270) 66,135 415 CFD #15M Silver Ridge 206,374 293,510 0 ( 166,810) (220,880) 112,194 0 112,194 416 CFD #16M Ventana Pointe 90,212 43,030 0 (39,650) (36,730) 56,862 0 (828) 56,034 418 C
FD #18M Badiola Homes 45,953 6,810 0 (2,950) (7,080) 42,733 0 42,733 420 CFD #20M 80,118 33,600 0 (32,240) (23,400) 58,078 0 58,078 421 CFD #21M 236,687 39,660 0 (25,770) (25,630) 224,947 0 224,947 423 CFD #23M 31,709 7,460 0 (2,950) (13,410) 22,809 0 22,809 424 CFD#24M 185,098 44,570 0 (20,650) (31,180) 177,838 0 177,838 425 CFD #25M 285,187 81,480 0 (56,370) (58,080) 252,217 0 (1,290) 250,927 427 CFD #27M (21,400) 100,600 0 (70,330) (30,690) (21,820) 0 21,820 0 428 CFD #28M 488,473 144,540 0 (94,180) (112,090) 426,743 0 426,743 429 CFD #29M 12,677 26,400 0 (26,610) (13,400) (933) 0 933 0

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235
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Unaudited
Fund Balance
July 1, 2024
Revenues Transfers In Expenditures Transfers Out Available Net Project
Carryover
Net
Proposed
Adjustments
Estimated
Fund Balance
June 30, 2025
Other Funds - Unreserved Fund Balances
Budget
Fiscal Year 2024/2025
Special Revenue Funds:
430 CFD #30M 750,979$ 234,170$ -$ (131,140)$ (156,360)$ 697,649$ -$ (2,892)$ 694,757$ 431 CFD #31 Citrus Heights North 795,920 480,630 0 (275,060) (187,300) 814,190 0 (8,997) 805,193 432 CFD #32M 101,395 17,800 0 (3,490) (17,400) 98,305 0 98,305 433 CFD #33M Empire Lighting 190,181 41,220 0 (43,340) (6,140) 181,921 0 (951) 180,970 434 CFD #34 Empire Detention Basin 266,278 21,140 0 (12,070) (4,580) 270,768 0 (2,084) 268,684 435 CFD #35M 1,166,843 533,930 0 (762,490) (166,170) 772,113 0 (40,492) 731,621 436 CFD #36M 40,360 22,010 0 (28,790) (18,190) 15,390 0 15,390 437 CFD #37 Montelago 213,071 87,000 0 (198,210) (45,010) 56,851 0 (1,847) 55,004 438 CFD #38M 857,466 176,810 0 (80,390) (114,980) 838,906 0 838,906 439 CFD #39M 40,086 21,360 0 (32,820) (15,310) 13,316 0 13,316 440 CFD #40M 73,334 10,530 0 (980) (7,530) 75,354 0 75,354 441 CFD #41M 118,604 15,070 0 (12,320) (7,480) 113,874 0 113, 874 442 CFD #42M 259,129 43,710 0 (102,500) (4,350) 195,989 0 ( 3,180) 192,809
444 CFD #44M 29,230 8,910 0 (7,750) (5,570) 24,820 0 24,820 445 CFD #45M 342,654 99,960 0 (86,230) (52,740) 303,644 0 (1,208) 302,436 446 CFD #46M 307,270 48,440 0 (37,540) (21,000) 297,170 0 297,170 447 CFD #47M 6,289 11,460 0 (15,790) (990) 969 0 969
448 CFD #48M 418,912 74,400 0 (59,490) (26,050) 407,772 0 (1,534) 406,238 449 CFD #49M 30,662 12,750 0 (13,830) (4,150) 25,432 0 25,432 450 CFD #50M 79,652 35,520 0 (29,740) (27,850) 57,582 0 57,582 451 CFD #51M 98,605 65,810 0 (82,880) (35,630) 45,905 0 45,905 453 CFD #53M 78,860 8,820 0 (4,710) (4,850) 78,120 0 78,120 454 CFD #54M 46,563 24,960 0 (36,760) (13,060) 21,703 0 21,703 455 CFD #55M 57,658 7,110 0 (5,670) (2,930) 56,168 0 56,168 456 CFD #56M 120,454 26,040 0 (440) (25,270) 120,784 0 120, 784 457 CFD #57M 60,898 14,960 0 (17,160) (5,750) 52,948 0 52, 948
458 CFD #58M 16,826 4,410 0 (550) (120) 20,566 0 20,566 459 CFD #59M 10,571 2,400 0 (2,280) (40) 10,651 0 10,651 460 CFD #60M 81,490 12,560 0 (10,210) (5,290) 78,550 0 78,550 461 CFD #61M 377,816 54,870 0 (28,100) (28,100) 376,486 0 376,486 462 CFD #62M 48,757 5,580 0 (2,170) (160) 52,007 0 52,007 463 CFD #63M 567,185 54,780 0 (30,210) (1,590) 590,165 0 590,165 464 CFD #64M 77,132 4,920 0 0 0 82,052 0 82,052
465 CFD #65M 195,127 19,900 0 (12,700) (10,270) 192,057 0 192,057

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236
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Unaudited
Fund Balance
July 1, 2024
Revenues Transfers In Expenditures Transfers Out Available Net Project
Carryover
Net
Proposed
Adjustments
Estimated
Fund Balance
June 30, 2025
Other Funds - Unreserved Fund Balances
Budget
Fiscal Year 2024/2025
Special Revenue Funds:
467 CFD #67M 189,130$ 42,180$ -$ (23,280)$ (23,820)$ 184,210$ -$ -$ 184,210$ 468 CFD #68M 141,856 24,610 0 (17,030) (12,090) 137,346 0 137,346 469 CFD #69M 632,521 164,440 0 (89,660) (98,670) 608,631 0 608,631 470 CFD #70M Avellino 218,535 78,080 0 (52,980) (37,730) 205,905 0 (2,683) 203,222 471 CFD #71M Sierra Crest 384,788 117,110 0 (115,440) (44,370) 342,088 0 (2,860) 339,228 472 CFD #72M 29,048 10,740 0 (8,950) (5,910) 24,928 0 24,928 473 CFD #73M 278,481 65,720 0 (31,320) (36,140) 276,741 0 (1,111) 275,630 474 CFD #74M 495,200 84,850 0 (40,640) (900) 538,510 0 (687) 537,823 475 CFD #75M 55,513 14,360 0 (7,970) (8,260) 53,643 0 53,643 476 CFD #76M 80,477 33,540 0 (45,750) (14,730) 53,537 0 53,537 477 CFD #77M 48,770 12,900 0 (8,480) (6,270) 46,920 0 46,920 478 CFD #78M 249,266 69,880 0 (33,230) (53,170) 232,746 0 232,746 479 C FD #79M 179,975 21,500 0 (340) (20) 201,115 0 201, 115 480 CFD #80M 452,297 212,440 0 (129,060) (120,090) 415,587 0 (62,000) 353,587 481 CFD #81M 90,918 109,200 0 (98,750) (53,920) 47,448 0 47,448 482 CFD #82M 172,687 28,650 0 0 0 201,337 0 201,337
483 CFD #83M 193,717 61,970 0 (37,380) (29,650) 188,657 0 (1,172) 187,485 484 CFD #84M 41,191 19,500 0 (9,950) (9,490) 41,251 0 41,251 485 CFD #85 THE MEADOWS 916,175 419,280 0 (321,960) (124,380) 889,115 0 (11,496) 877,619 486 CFD #86 ETIWANDA RIDGE 182,076 63,750 0 (58,040) (31,650) 156,136 0 (1,417) 154,719 487 CFD #87 El Paseo 210,892 73,560 0 (27,890) (59,090) 197,472 0 197,472 488 CFD #88 SIERRA CREST II 280,617 113,670 0 (60,670) (39,260) 294,357 0 (2,300) 292,057 489 CFD #89 BELROSE 229,894 61,100 0 (28,740) (28,990) 233,264 0 (1,005) 232,259 490 CFD #90 SUMMIT @ ROSENA PH i 1,342,361 353,040 0 (277,030) (114,190) 1,304,181 0 (10,512) 1,293,669 491 CFD #91M 30,076 6, 080 0 0 0 36,156 0 36,156
492 CFD #92M 78,207 16,720 0 (11,020) (
5,140) 78,767 0 78,767
493 CFD #93M 52,410 11,250 0 (11,090) (4,100) 48,470 0 48,470 494 CFD #94M 9,062 2,100 0 0 (1,620) 9,542 0 9,542
495 CFD #95 SUMMIT @ ROSENA PH II 485,784 162,700 0 (211,950) (27,760) 408,774 0 (4,840) 403,934 496 CFD #96M Tr. 19957 42,112 11,110 0 (5,800) 0 47,422 0 47,422 497 CFD #97M 22,873 5,200 0 0 (3,520) 24,553 0 24,553
498 CFD #98M 22,068 6,030 0 0 0 28,098 0 28,098

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237
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Unaudited
Fund Balance
July 1, 2024
Revenues Transfers In Expenditures Transfers Out Available Net Project
Carryover
Net
Proposed
Adjustments
Estimated
Fund Balance
June 30, 2025
Other Funds - Unreserved Fund Balances
Budget
Fiscal Year 2024/2025
Special Revenue Funds:
500 CFD #100M 190,365$ 83,190$ -$ (29,070)$ (160)$ 244,325$ -$ -$ 244,325$ 501 CFD #101M 29,094 8,110 0 0 0 37,204 0 37,204
502 CFD #102M 18,702 5,010 0 0 (1,620) 22,092 0 22,092
503 CFD #103M Estrada 12,427 4,500 0 0 (1,350) 15,577 0 15,577 504 CFD #104M 38,413 13,780 0 (5,820) 0 46,373 0 46,373 505 CFD #105M 95,803 46,180 0 (21,720) (26,260) 94,003 0 94,003 506 CFD #106M 207,392 92,090 0 (22,910) (36,000) 240,572 0 (463) 240,109 507 CFD #107M 46,118 15,670 0 (7,430) (28,910) 25,448 0 25,448 509 CFD #109M 395,959 45,610 0 (199,900) (128,760) 112,909 0 112,909 510 CFD #510M 12,702 17,420 0 0 (4,870) 25,252 0 25,252 511 CFD #111M 38,308 72,470 0 (10,210) (53,500) 47,068 0 47,068 512 CFD #112M 36,832 343,280 0 (205,550) (137,730) 36,832 0 (4,629) 32,203 Total Special Revenue Funds 116,199,038$ 102,098,360$ 2,248,320$ (99,960,780)$ (10,883,630)$ 109,701,308$ (28,830,322)$ (6,693,521)$ 74,177,465$ Debt Service Funds:
580 G
eneral Debt Service 14,462$ 1,125,300$ 2,869,050$ (3,994,350)$ -$ 14,462$ -$ -$ 14,462$ Total Debt Service Funds 14,462$ 1,125,300$ 2,869,050$ (3,994,350)$ -$ 14,462$ -$ -$ 14,462$ Capital Project Funds:
601 Capital Reinvestment 38,373,191$ 5,133,000$ 4,300,000$ (4,433,290)$ -$ 43,372,901$ (38,841,086)$ (30,853)$ 4,500,962$ 602 Capital Improvements 9,346,201 0 0 0 0 9,346,201 (2,199,007) (4,504,134) 2,643,060 603 Future Capital Projects 9,371,170 0 0 0 (151,420) 9,219,750 (344,883) 8,874,867 620 San Sevaine Flood Control 2,585,210 805,800 0 (7,020) (8,320) 3,375,670 0 3,375,670 621 Upper Etiwanda Flood Control 47,568 0 0 0 0 47,568 0 47,568 622 Storm Drain 22,669,116 3,555,000 0 (717,740) (98,460) 25,407,916 (10,653,183) (1,020,481) 13,734,252 623 Sewer Expansion 36,610,457 2,500,000 0 (2,074,990) (19,280) 37,016,187 (665,621) (170,010) 36,180,556 630 Circulation Mitigation 49,973,819 4,651,000 0 (12,980) ( 73,880) 54,537,959 (14,545,967) 44,474 40,036,466 631 Fire Assessment 740,916 260,000 0 0 (281,570) 719,346 (423,922) 295,424 632 General Government 13,479,585 430,000 0 0 0 13,909,585 (12,017,764) (51,124) 1,840,697 633 Landscape Medians 2,537,135 650,000 0 (50,000) (
11,720) 3,125,415 (2,297,393) 828,022
634 Library Capital Improvement 1,363,390 200,000 0 0 (6,440) 1,556,950 (99,472) 1,457,478 635 Parks Development 16,304,630 2,100,000 0 (324,970) (123,970) 17,955,690 (8,471,697) (223,860) 9,260,133 636 Police Capital Facilities 4,159,194 400,000 0 (198,500) (38,880) 4,321,814 (222,656) (80,258) 4,018,900 637 Underground Utilities 846,644 0 0 0 0 846,644 0 846,644

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238
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Unaudited
Fund Balance
July 1, 2024
Revenues Transfers In Expenditures Transfers Out Available Net Project
Carryover
Net
Proposed
Adjustments
Estimated
Fund Balance
June 30, 2025
Other Funds - Unreserved Fund Balances
Budget
Fiscal Year 2024/2025
Capital Project Funds:
657 CFD #31 Citrus Heights North 3,032,010$ -$ -$ -$ -$ 3,032,010$ -$ 3,032,010$ 658 CFD #31 7,491 0 0 0 0 7,491 0 7,491
659 CFD #70 Avellino 1,197 0 0 0 0 1,197 0 1,197
660 CFD #71 Sierra Crest 2,686 0 0 0 0 2,686 0 2,686
661 CFD #80 Bella Strada 11,501 0 0 0 0 11,501 0 11,501 663 CFD #74B Citrus/Summit 184,859 0 0 0 0 184,859 0 184,859 664 CFD #86 Etiwanda Ridge 975,717 0 0 0 0 975,717 0 975,717 665 CFD #85 The Meadows 5,904 0 0 0 0 5,904 0 5,904
666 CFD #88 Sierra Crest II 98,635 0 0 0 0 98,635 0 98,635 667 CFD #89 Belrose 91,566 0 0 0 0 91,566 0 91,566
668 CFD #90 Summit @ Rosena Ph I 10,600,446 0 0 0 0 10,600,446 0 10,600,446 669 CFD #95 Summit @ Rosena II 5,938,090 0 0 0 0 5,938,090 0 5,938,090 670 CFD #87 El Paseo 972,593 0 0 0 0 972,593 0 972, 593 671 CFD #106 Mountain View 100,406 0 0 0 0 100,
406 0 100,406
672 CFD #99 The Retreat 3,358,852 0 0 0 0 3,358,852 0 3,358,852 673 CFD #100 Victoria 3,863,529 0 0 0 0 3,863,529 0 3,863,529 674 CFD #111 Monterado 7,186,664 0 0 0 0 7,186,664 0 7,186,664 Total Capital Project Funds 244,840,372$ 20,684,800$ 4,300,000$ (7,819,490)$ (813,940)$ 261,191,742$ (90,782,650)$ (6,036,246)$ 164,372,846$ Enterprise Funds:
701 Sewer Maintenance & Operations 12,186,528$ 31,165,000$ -$ (26,756,430)$ (2,266,640)$ 14,328,458$ -$ (1,389,371)$ 12,939,087$ 702 Sewer Capital Projects 2,710,123 300,000 0 (121,960) (155,350) 2,732,813 (294,000) 2,438,813 703 Sewer Replacement 8,359,926 1,000,000 146,210 (2,135,680) (107,170) 7,263,286 (6,393,415) (76,712) 793,159 710 Water Utility 773,059 0 0 0 0 773,059 0 773,059
720 Stage Red 222,648 0 0 0 0 222,648 0 (200,200) 22,448 Total Enterprise Funds 24,252,284$ 32,465,000$ 146,210$ (29,014,070)$ (2,529,160)$ 25,320,264$ (6,687,415)$ (1,666,283)$ 16,966,566$ Internal Service Fund:
751 FLEET OPERATIONS 18,994,713$ 8,457,590$ 2,500,000$ (10,679,360)$ -$ 19,272,943$ -$ (3,365,183)$ 15,907,760$ Total Internal Service Funds 18,994,713$ 8,457,590$ 2,500,000$ (10,679,360)$ -$ 19,272,943$ -$ (3,365,183)$ 15,907,760$ 419,342,074$ 180,660,140$ 33,
938,620$ (183,895,530)$ (14,226,730)$ 435,818,574$ (130,184,395)$ (17,922,288)$ 287,711,891$ TOTAL ALL FUNDS

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239
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Fund
Organization
Project #
Dept
Organization/Project
Description
Object Object Description Appropriations Revenues
Transfers
In
Transfers
Out
FB Impact Reason
101 General Fund 2,360,714 211,280 98,818 536,182 (2,586,798) Revenue Adjustments
10140368 PD Narcotics Unit 6483 Reimb Exp - Personnel 43,480 43,480 Increase revenues DEA task force reimbursement 10140380 PD I.C.A.C. 6483 Reimb Exp - Personnel (20,700) (20,700) Decrease revenues for unavailable grant funds Offsetting Adjustments
10110500 CA Economic Development 6455 Ticket Sales 6,000 6,000 } 10110500 CA Economic Development 8011 Advertising 6,000 (6,000) } 10132010 BS CASP Operating 6450 Miscellaneous Income 7,500 7,500 } 10132010 BS CASP Operating 8018 Conference & Meetings 7,500 (7,500) } 10140100 PD Administrative Services 6480 Miscellaneous Reimb 175,000 175,000 } 10140100 PD Administrative Services 8133 Security Services 175,000 (175,000) } New Requests (One-Time)
10110500 CA Economic Development 8011 Advertising 10,500 (10,500) Increase appropriations for business summit expenses 10115000 HR HR Administration 7111 Part-Time Employees 21,500 (21,500) Increase appropriations for HR intern 10128000 FN Management Services 8790 Operating Transfer Out 536,182 (536,182) Xfer to Facilities Maintenance Fund #103 for FY24-25 Expenditures 10137202 PW&E Parks 8010 Departmental Expense 21,700 (21,700) Increase appropriations for Bill Martin Park Scoreboard replacement 10137505 PW&E Traffic/Streets 8130 Other Professional Svcs 72,000 (72,000) Increase appropriations for Sierra & Summit traffic calming bollards Sierra & Summit
10140231 PD Patrol Units 6900 Operating Transfers In 98,818 98,818 Xfer in from Fund #110 for salary savings in FY23-24 10140493 PD Property 8014 Computer Hardwar <$5000 6,400 (6,400) Increase appropriations for digital evidence storage increase New Requests (Recurring)
10124000 CS Community Services-Admin 8210 Vehicle Maintenance (33,480) 33,480 Move appropriations to Fund #386 for after school program vehicles maintenance reimbursement
10128200 FN Accounting 8130 Other Professional Svcs 43,000 (43,000) Increase appropriations for Eide Bailly auditing services CC Approved 6/25/25, File #21-3088
10140100 PD Administrative Services 8133 Security Services 20,000 (20,000) Increase appropriations for additional security at City Council meetings 10140377 PD Investigations 8130 Other Professional Svcs 10,000 (10,000) Increase appropriations for Transunion online investigative tool Carryovers
10128100 FN Mgmt Services Admin 7111 Part-Time Employees 25,000 (25,000) C/O FY23/24 Intern pilot program funding Various CA Various Various Operating Accounts 3,825 (3,825) Carryover purchase orders from FY23/24 Various HR Various Various Operating Accounts 26,500 (26,500) Carryover purchase orders from FY23/24 Various IT Various Various Operating Accounts 83,904 (83,904) Carryover purchase orders from FY23/24 Various DS Various Various Operating Accounts 454,465 (454,465) Carryover purchase orders from FY23/24 Various BS Various Various Operating Accounts 61,087 (61,087) Carryover purchase orders from FY23/24 Various PL Various Various Operating Accounts 58,571 (58,571) Carryover purchase orders from FY23/24 Various PW&E Various Various Operating Accounts 1,108,005 (1,108,005) Carryover purchase orders from FY23/24 Various PD Various Various Operating Accounts 179,237 (179,237) Carryover purchase orders from FY23/24 General Fund - Recommended Adjustments
Fiscal Year 2024/2025
Increase revenues and appropriations for Business Summit sponsorships and ticket sales
Remainder of FY23-24 Omnitrans security agreement CC Approved 2/27/24, File #21-2835
Increase revenues and appropriations for accessibility training and CASP exam fees

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240
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Fund
Organization
Project #
Dept
Organization/Project
Description
Object Object Description Appropriations Revenues
Transfers
In
Transfers
Out
FB Impact Reason
102 City Technology 335,602 - - - (335,602) 10226101 IT Information Systems 8053 Cloud/Hosted 4,725 (4,725) Contract award for D&B Hoovers package 02621003-102-B IT Hardware Replacement Program 8130 Other Professional Svcs 120,000 (120,000) Increase appropriations for security cameras at South Fontana Sports Park
Various IT Various Var Various 210,877 (210,877) Carryover purchase orders from FY23/24 103 Facility Maintenance 123,389 - 536,182 - 412,793 10337317 PW&E Facilities Maintenance 6900 Operating Transfers In 536,182 536,182 Xfer from GF #101 for FY24-25 Expenditures 10337317 PW&E Facilities Maintenance 8130 Other Professional Svcs 123,389 (123,389) Carryover purchase orders from FY23/24 104 Office of Emergency Svcs 86,631 - - - (86,631) 10430209 DS Treasury ERA2 8010 Departmental Expense 86,631 (86,631) Increase exp budget to match grant award 110 GF Operating Projects 56,697 3,900 - 98,818 (151,615) 04010004-110-A PD Enterprise Fleet Management Various Operating Accounts 76,700 (76,700) Increase appropriations for vehicle lease term and maintenance
11040200 PD Field Services Admin 8790 Operating Transfer Out 98,818 (98,818) } 0402000#-110-A PD 2020 COPS Grant - Officer #1-4 Various Personnel Accounts (98,818) 98,818 } 0402000#-110-A PD 2020 COPS Grant - Officer #1-4 8220 Risk Liability 2,240 (2,240) } Move risk liability from Fund #321 for PD Officers 04032033-110-A PD Bike Patrol-CDBG Public Safety Various Personnel Accounts 67,675 (67,675) } 04032033-110-A PD Bike Patrol-CDBG Public Safety 8220 Risk Liability 5,000 (5,000) } 40200007-110-A PD Metal Recycling Program 6450 Miscellaneous Income 3,900 3,900 } 40200007-110-A PD Metal Recycling Program 8013 Equip (Non-Comp) <$5000 3,900 (3,900) } 221 Federal Seizure Treasury 75,000 - - - (75,000) 22140383 PD Fed Asset Sez Treasury Various Operating Accounts 75,000 (75,000) } Increase appropriations for equipment, training, and investigation services
223 Federal Asset Seizure 3,233,300 - - - (3,233,300) 22340368 PD NARC - Federal Seizure 8317 Maintenance Equipment 100,000 (100,000) Increase appropriations for vehicle x-ray machine 22340373 PD Federal Seizures 8317 Maintenance Equipment 385,000 (385,000) Increase appropriations for drones project 22340373 PD Federal Seizures Various Operating Accounts 185,000 (185,000) Increase appropriations for equipment, supplies, and service usage fees
22340373 PD Federal Seizures 8130 Other Professional Svcs 650,000 (650,000) Increase appropriations for automated license reader 22340373 PD Federal Seizures Various Operating Accounts 1,701,450 (1,701,450) Increase appropriations for airship equipment purchase CC Approved 7/23/24, File #21-3153
22340373 PD Federal Seizures Various Operating Accounts 211,850 (211,850) Carryover purchase orders from FY23/24 224 State Asset Seizure 10,000 - - - (10,000) 22440372 PD Asset Seizure 8010 Departmental Expense 10,000 (10,000) Carryover purchase orders from FY23/24 225 PD Traffic Safety 166,002 - - - (166,002) 22540362 PD PD Traffic Safety 8032 Outsourced Svcs (HW/SW) 166,002 (166,002) Carryover purchase orders from FY23/24 241 Air Quality Mgmt Dist (10,200) - - - 10,200 37603115-241-I PW&E Sawtooth/Concrete 8331 Construction Contingency (10,200) 10,200 Project close out for Sawtooth Concrete project 245 Measure I 2010-2040 Reimb (94,053) (95,139) - - (1,086) 37603378-245-A PW&E Sierra: Summit to I-15 ROW 5348 Measure I 2010-2040 (95,139) (95,139) } 37603378-245-A PW&E Sierra: Summit to I-15 ROW Various Operating Accounts (94,053) 94,053 } Project close out for Sierra: Summit to I-15 ROW
Other Funds - Recommended Adjustments
Fiscal Year 2024/2025
Increase revenues and appropriations for metal recycling received
Increase appropriations to cover reduction in Fund #362 Decrease available personnel budget remaining from FY23- 24 and transfer back to General Fund #101

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241
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Fund
Organization
Project #
Dept
Organization/Project
Description
Object Object Description Appropriations Revenues
Transfers
In
Transfers
Out
FB Impact Reason
Other Funds - Recommended Adjustments
Fiscal Year 2024/2025
246 Measure I 2010-2040 Local 344,993 - - - (344,993) 24637699 PW&E Capital Projects 8329 Other Construction (10,050) 10,050 } 24637699 PW&E Capital Projects 8399 Project Personnel Offset (10) 10 } 37500049-246-A PW&E Heritage RRFBs 8220 Risk Liability (1,060) 1,060 } 37600029-246-D PW&E Date Elementary School SRTS (ATP) 8220 Risk Liability 1,060 (1,060) } 37600029-246-D PW&E Date Elementary School SRTS (ATP) 8399 Project Personnel Offset (1,060) 1,060 } Various PW&E Various Var Various 356,113 (356,113) Carryover purchase orders from FY23/24 281 Gas Tax (State) 164,671 - - - (164,671) 28137699 PW&E Capital Projects 8399 Project Personnel Offset 10 (10) Increase appropriations for project personnel offset Various PW&E Various Var Various 164,661 (164,661) Carryover purchase orders from FY23/24 282 Solid Waste Mitigation 256,085 - - - (256,085) 28237699 PW&E Capital Projects 8399 Project Personnel Offset (20) 20 Decrease appropriations for project personnel offset Various PW&E Various Var Various 256,105 (256,105) Carryover purchase orders from FY23/24 283 Road Maintenance & Rehab - - - - - 37600077-283-A PW&E Pavement Rehab - Sierra & Marygold 8330 Construction Contracts 2,845,430 (2,845,430) 37600055-283-A PW&E Southridge Pave Rehab -Jur: Hem-Sie 8329 Other Construction (1,500,000) 1,500,000 37600066-283-A PW&E Village of Herit. Pave Rehab-South 8329 Other Construction (1,345,430) 1,345,430 301 Grants 3,924,470 3,865,895 - - (58,575) 30130120 DS EC-Bev Cont Recycle-E 5330 Bev Container Recycling 3,750 3,750 } 30130120 DS EC-Bev Cont Recycle-E 8010 Departmental Expense 3,750 (3,750) } 30130121 DS EC-Bev Cont Recycle-O 5330 Bev Container Recycling (590) (590) } 30130121 DS EC-Bev Cont Recycle-O 8010 Departmental Expense (590) 590 } 30130122 DS EC-SB1383 OWR1 Grant 8010 Departmental Expense 2,609 (2,609) } 30130122 DS EC-SB1383 OWR1 Grant 8011 Advertising 19,000 (19,000) } 30130130 DS EC-Oil Pymt Program-E 5329 Oil Recycling Revenue 29,016 29,016 } 30130130 DS EC-Oil Pymt Program-E 8010 Departmental Expense 29,016 (29,016) } 30130131 DS EC-Oil Pymt Program-O 5329 Oil Recycling Revenue (25,000) (25,000) } 30130131 DS EC-Oil Pymt Program-O 8010 Departmental Expense (25,000) 25,000 } 30200021-301-B DS Homekey 2 5328 CDBG Grant Reimbursement (69,000) (69,000) } 30200021-301-B DS Homekey 2 8130 Other Professional Svcs (69,000) 69,000 } 37500001-301-A PW&E SMART Grant 5311 Federal Grant Funds 2,000,000 2,000,000 } 37500001-301-A PW&E SMART Grant Various Operating Accounts 2,000,000 (2,000,000) } 37603345-301-C PW&E San Sevaine PH I 5390 Misc Grant Reimb 1,500,000 1,500,000 } 37603345-301-C PW&E San Sevaine PH I 8330 Construction Contracts 1,500,000 (1,500,000) } 40100003-301-A PD ABC Grant - 2024 5325 Police OTS Reimb (1,895) (1,895) } 40100003-301-A PD ABC Grant - 2024 Various Operating Accounts (1,896) 1,896 } 40100004-301-A PD ABC Grant - 2025 5325 Police OTS Reimb 23,601 23,601 } 40100004-301-A PD ABC Grant - 2025 Various Operating Accounts 23,601 (23,601) } 40200003-301-A PD 2021 Homeland Security Grant 5349 Homeland Security Grant (6,059) (6,059) } 40200003-301-A PD 2021 Homeland Security Grant Various Operating Accounts (6,059) 6,059 } 40200008-301-A PD STEP Grant 2025-PT25162 5325 Police OTS Reimb 365,000 365,000 } 40200008-301-A PD STEP Grant 2025-PT25162 Various Operating Accounts 365,000 (365,000) } 40300010-301-A PD 2023 HSGP Grant 5349 Homeland Security Grant 47,072 47,072 } 40300010-301-A PD 2023 HSGP Grant Various Operating Accounts 47,072 (47,072) } Various DS Various Var Various 36,967 (36,967) } Carryover purchase orders from FY23/24 Decrease appropriations to correct Supplemental offset
amount
Move risk liability and decrease offset amount
Move funds to Sierra and Marygold Pavement Rehab project Adjust budget for even year beverage recycling grant award amount
Adjust budget for odd year beverage recycling grant award amount
C/O FY23-24 QWR1 grant budget
Adjust budget for OPP14 oil payment grant award amount
Adjust budget for OPP15 oil payment grant award amount
Adjust Budget to match HCD Allocation
SMART Grant Allocation CC Approved 6/25/2024, File #21- 3093
SBCTA CRP Grant Allocation CC Approved 7/23/24, File #21- 3133
Close 2024 ABC Grant CC Approved 9/26/24, File #21-2467 2025 ABC Grant CC Approved 9/10/24, File #21-3217
Project close out for 2021 HSGP
2025 OTS grant CC Approved 10/8/24, File 21-3317
2023 HSGP grant CC Approved 10/8/24, File #21-3319

Page 25 of 30 ends

242
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Fund
Organization
Project #
Dept
Organization/Project
Description
Object Object Description Appropriations Revenues
Transfers
In
Transfers
Out
FB Impact Reason
Other Funds - Recommended Adjustments
Fiscal Year 2024/2025
302 ARPA - City 232,363 - - - (232,363) 30228000 FN ARPA 2021 8110 Legal Services 199,959 (199,959) } 30237000 PW&E Storm Drain Admin-Eng 8130 Other Professional Svcs 2,913 (2,913) } 26101022-302-A IT Permit System Various Operating Accounts (193,364) 193,364 } 26101023-302-A IT Sales Force 311 System Various Operating Accounts (697,554) 697,554 } 37600041-302-A PW&E Homelessness Prevent Res & Care Ctr Various Operating Accounts (2,139,202) 2,139,202 } 30228000 FN ARPA 2021 7901 Intrafund Transfer-Salaries 3,030,119 (3,030,119) } 37200006-302-D PW&E Jack Bulik Park Improvement 8329 Other Construction 116,452 (116,452) } 37600059-302-D PW&E Fiber to City Facilities 8329 Other Construction (116,452) 116,452 } 37200007-302-D PW&E Veterans Park Improvement 8329 Other Construction 109,490 (109,490) } 37600059-302-D PW&E Fiber to City Facilities 8329 Other Construction (109,490) 109,490 } Various PW&E Various Var Various 29,492 (29,492) Carryover purchase orders from FY23/24 321 Fed Law Enf Block Grant (2,240) - - - 2,240 32140299 PD Field Services Project 8220 Risk Liability (2,240) 2,240 Move risk liability to Fund #110 for PD Officers 322 State COPS AB 3229 70,208 - - - (70,208) 32240233 PD Air Support 8130 Other Professional Svcs 70,208 (70,208) Carryover purchase orders from FY23/24 362 CDBG (402,708) (52,361) - - 350,347 04032033-362-A PD Bike Patrol-CDBG Public Safety 5328 CDBG Grant Reimbursement 4,885 4,885 } 04032033-362-A PD Bike Patrol-CDBG Public Safety Various Personnel Accounts (67,675) 67,675 } 04032033-362-A PD Bike Patrol-CDBG Public Safety 8220 Risk Liability (5,000) 5,000 } 30200002-362-F DS CDBG Acq/Rehab/Rental 5328 CDBG Grant Reimbursement 42,837 42,837 } 30200002-362-F DS CDBG Acq/Rehab/Rental 8310 Land 42,837 (42,837) } 30200003-362-A DS CDBG Project TBD 5328 CDBG Grant Reimbursement 43,146 43,146 } 30200003-362-A DS CDBG Project TBD 8329 Other Construction 43,146 (43,146) } 30200011-362-A DS CDBG Housing Admin 5328 CDBG Grant Reimbursement (31,417) (31,417) } 30200011-362-A DS CDBG Housing Admin 8010 Departmental Expense (8,967) 8,967 } 30200004-362-E DS Housing Rehab Loan Program 5328 CDBG Grant Reimbursement (111,070) (111,070) } 30200004-362-E DS Housing Rehab Loan Program Various Operating Accounts (126,552) 126,552 } 30200010-362-A DS CDBG-CV Administration 8130 Other Professional Svcs (8,190) 8,190 } Decrease CDBG-CV Amin Budget to match HUD allocation 30200011-362-A DS CDBG Housing Admin 5328 CDBG Grant Reimbursement 13,180 13,180 } 30200011-362-A DS CDBG Housing Admin 8130 Other Professional Svcs (252,090) 252,090 } 30200012-362-A DS Emergency Solutions Grant 5328 CDBG Grant Reimbursement (1,070) (1,070) } 30200012-362-A DS Emergency Solutions Grant Various Operating Accounts (17,804) 17,804 } 30200014-362-A DS ESG-CV1 8130 Other Professional Svcs (1,643) 1,643 Project close out for ESG-CV1 30200015-362-A DS ESG-CV2 5328 CDBG Grant Reimbursement (6,123) (6,123) Project close out for ESG-CV2 30200016-362-A DS CDBG CSD Program 5328 CDBG Grant Reimbursement (6,729) (6,729) } 30200016-362-A DS CDBG CSD Program 8028 City Programs (770) 770 } 363 HOME (221,546) (135,206) - - 86,340 03020004-363-A DS HOME-ARP TBD 8310 Land (39,270) 39,270 Adjust Housing Rehab Loan Program to match FY24/25 HUD allocation
30200006-363-A DS Home Project TBD 5328 CDBG Grant Reimbursement (121,685) (121,685) } 30200006-363-A DS Home Project TBD 8130 Other Professional Svcs (121,685) 121,685 } 30200017-363-A DS Home Program 5328 CDBG Grant Reimbursement (13,521) (13,521) } 30200017-363-A DS Home Program 8130 Other Professional Svcs (60,591) 60,591 } Move appropriations from Fiber to Jack Bulik park CC
Approved 7/23/24, File #21-3144
C/O unused FY23/24 org funding to be spent in FY24/25
Adjust ARPA budget based on the 9/30/24 Expenditure Plan Update
Move appropriations from Fiber to Veteran's park CC
Approved 7/23/24, File #21-3144
Adjust Bike Patrol-CDBG Public Safety to match FY24/25
HUD allocation
Adjust CDBG Acs/Rehab/Rental budget to match FY24/25
HUD allocation
Move CBDG Housing Admin revenue to CDBG Project TBD
based on Program Income spent
Decrease CBDG CSD Program budget to match FY24/25
HUD allocation
Decrease Emergency Solutions Grant budget to match
FY24/25 HUD allocation
Adjust CBDG Housing Admin budget to match FY24/25 HUD
allocation
Project close out for HRP 2018-19
Adjust Home Program TBD to match FY24/25 HUD allocation Adjust Home Program to match FY24/25 HUD allocation

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243
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Fund
Organization
Project #
Dept
Organization/Project
Description
Object Object Description Appropriations Revenues
Transfers
In
Transfers
Out
FB Impact Reason
Other Funds - Recommended Adjustments
Fiscal Year 2024/2025
386 ASES ELO-P Grant 456,626 33,480 - - (423,146) 38624101 CS ASES ELO-P Admin 5335 Fontana USD 33,480 33,480 } 38624101 CS ASES ELO-P Admin 8210 Vehicle Maintenance 33,480 (33,480) } Various CS Various Var Various 423,146 (423,146) Carryover purchase orders from FY23/24 387 ASES ELO-P TK Grant - (432,680) - - (432,680) 38724200 CS ASES ELO-P TK Admin 5335 Fontana USD (432,680) (432,680) Decrease revenues to zero out unrealized funding 395 LMD #1 City Wide 14,513 - - - (14,513) Various PW&E Various Var Various 14,513 (14,513) Carryover purchase orders from FY23/24 396 LMD #2 Vlg of Heritage 829,112 - - - (829,112) Various PW&E Various Var Various 829,112 (829,112) Carryover purchase orders from FY23/24 397 LMD #3-1 Empire Center 3,411 - - - (3,411) Various PW&E Various Var Various 3,411 (3,411) Carryover purchase orders from FY23/24 398 LMD #3 Hunter's Ridge 41,633 - - - (41,633) Various PW&E Various Var Various 41,633 (41,633) Carryover purchase orders from FY23/24 401 CFD #1 Southridge Village 388,983 - - - (388,983) 40137202 PW&E Parks 8130 Other Professional Svcs 150,000 (150,000) Increase appropriations for backstop footings at Veteran's Park
Various PW&E Various Var Various 238,983 (238,983) Carryover purchase orders from FY23/24 406 CFD #6 The Landings 27,312 - - - (27,312) Various PW&E Various Var Various 27,312 (27,312) Carryover purchase orders from FY23/24 407 CFD #7 Country Club Est 8,268 - - - (8,268) Various PW&E Various Var Various 8,268 (8,268) Carryover purchase orders from FY23/24 408 CFD #8 Presley 56,048 - - - (56,048) Various PW&E Various Var Various 56,048 (56,048) Carryover purchase orders from FY23/24 409 CFD #9M Morningside - 22,721 - - 22,721 40937209 PW&E Landscape Maintenance 6450 Miscellaneous Income 22,721 22,721 Increase revenues to correct CFD expenditures 410 CFD #10M Jurupa Ind 1,048 - - - (1,048) Various PW&E Various Var Various 1,048 (1,048) Carryover purchase orders from FY23/24 412 CFD #12 Sierra Lakes 127,148 - - - (127,148) 41237202 PW&E Parks 8130 Other Professional Svcs 54,000 (54,000) C/O FY23/24 repave parking lot at Ralph. M Lewis Park Various PW&E Various Var Various 73,148 (73,148) Carryover purchase orders from FY23/24 413 CFD #13M Summit Heights 36,789 - - - (36,789) Various PW&E Various Var Various 36,789 (36,789) Carryover purchase orders from FY23/24 414 CFD #14M Sycamore Hills 13,270 - - - (13,270) Various PW&E Various Var Various 13,270 (13,270) Carryover purchase orders from FY23/24 416 CFD #16M Ventana Pointe 828 - - - (828) Various PW&E Various Var Various 828 (828) Carryover purchase orders from FY23/24 Increase revenues and appropriations for after school
program vehicles

Page 27 of 30 ends

244
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Fund
Organization
Project #
Dept
Organization/Project
Description
Object Object Description Appropriations Revenues
Transfers
In
Transfers
Out
FB Impact Reason
Other Funds - Recommended Adjustments
Fiscal Year 2024/2025
425 CFD #25M 1,290 - - - (1,290) Various PW&E Various Var Various 1,290 (1,290) Carryover purchase orders from FY23/24 427 CFD #27M - 21,820 - - 21,820 42737209 PW&E Landscape Maintenance 6450 Miscellaneous Income 21,820 21,820 Increase revenues to correct CFD expenditures 429 CFD #29M 500 1,433 - - 933 42937209 PW&E Landscape Maintenance 6450 Miscellaneous Income 1,433 1,433 Increase revenues to correct CFD expenditures Various PW&E Various Var Various 500 (500) Carryover purchase orders from FY23/24 430 CFD #30M 2,892 - - - (2,892) Various PW&E Various Var Various 2,892 (2,892) Carryover purchase orders from FY23/24 431 CFD #31 Citrus Heights No 8,997 - - - (8,997) Various PW&E Various Var Various 8,997 (8,997) Carryover purchase orders from FY23/24 433 CFD #33M Empire Lighting 951 - - - (951) Various PW&E Various Var Various 951 (951) Carryover purchase orders from FY23/24 434 CFD #34 Empire Det Basin 2,084 - - - (2,084) Various PW&E Various Var Various 2,084 (2,084) Carryover purchase orders from FY23/24 435 CFD #35M 40,492 - - - (40,492) Various PW&E Various Var Various 40,492 (40,492) Carryover purchase orders from FY23/24 437 CFD #37 Montelago 1,847 - - - (1,847) Various PW&E Various Var Various 1,847 (1,847) Carryover purchase orders from FY23/24 442 CFD #42M 3,180 - - - (3,180) Various PW&E Various Var Various 3,180 (3,180) Carryover purchase orders from FY23/24 445 CFD #45M 1,208 - - - (1,208) Various PW&E Various Var Various 1,208 (1,208) Carryover purchase orders from FY23/24 448 CFD #48M 1,534 - - - (1,534) Various PW&E Various Var Various 1,534 (1,534) Carryover purchase orders from FY23/24 470 CFD #70 Avellino 2,683 - - - (2,683) Various PW&E Various Var Various 2,683 (2,683) Carryover purchase orders from FY23/24 471 CFD #71 Sierra Crest 2,860 - - - (2,860) Various PW&E Various Var Various 2,860 (2,860) Carryover purchase orders from FY23/24 473 CFD #73M 1,111 - - - (1,111) Various PW&E Various Var Various 1,111 (1,111) Carryover purchase orders from FY23/24 474 CFD #74M 687 - - - (687) Various PW&E Various Var Various 687 (687) Carryover purchase orders from FY23/24 480 CFD #80 Bella Strada 62,000 - - - (62,000) 48037209 PW&E Landscape Maintenance 8130 Other Professional Svcs 62,000 (62,000) Increase appropriations for plant replacement

Page 28 of 30 ends

245
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Fund
Organization
Project #
Dept
Organization/Project
Description
Object Object Description Appropriations Revenues
Transfers
In
Transfers
Out
FB Impact Reason
Other Funds - Recommended Adjustments
Fiscal Year 2024/2025
483 CFD #83M 1,172 - - - (1,172) Various PW&E Various Var Various 1,172 (1,172) Carryover purchase orders from FY23/24 485 CFD #85 The Meadows 11,496 - - - (11,496) Various PW&E Various Var Various 11,496 (11,496) Carryover purchase orders from FY23/24 486 CFD #86 Etiwanda Ridge 1,417 - - - (1,417) Various PW&E Various Var Various 1,417 (1,417) Carryover purchase orders from FY23/24 488 CFD #88 Sierra Crest II 2,300 - - - (2,300) Various PW&E Various Var Various 2,300 (2,300) Carryover purchase orders from FY23/24 489 CFD #89 Belrose 1,005 - - - (1,005) Various PW&E Various Var Various 1,005 (1,005) Carryover purchase orders from FY23/24 490 CFD #90 Summit at Rosena 10,512 - - - (10,512) Various PW&E Various Var Various 10,512 (10,512) Carryover purchase orders from FY23/24 495 CFD #95 Summit at Rosena II 4,840 - - - (4,840) Various PW&E Various Var Various 4,840 (4,840) Carryover purchase orders from FY23/24 506 CFD #106 Mountainview 463 - - - (463) Various PW&E Various Var Various 463 (463) Carryover purchase orders from FY23/24 512 CFD #512 The Gardens Phase I 4,629 - - - (4,629) Various PW&E Various Var Various 4,629 (4,629) Carryover purchase orders from FY23/24 601 Capital Reinvestment 747,187 716,334 - - (30,853) 60110500 CA Econ Development Project 6332 Misc Rents/Leases 116,334 116,334 } 60110500 CA Econ Development Project Various Operating Accounts 116,334 (116,334) } 37600077-601-A PW&E Pavement Rehab - Sierra & Marygold 8329 Other Construction 50,000 (50,000) } 37600077-601-A PW&E Pavement Rehab - Sierra & Marygold 8112 Engineering Services 50,000 (50,000) } 37600077-601-A PW&E Pavement Rehab - Sierra & Marygold 8113 Design/Architect Service 100,000 (100,000) } 37600077-601-A PW&E Pavement Rehab - Sierra & Marygold 8330 Construction Contracts 1,000,000 (1,000,000) } 37600056-601-A PW&E Village of Heritage Pavement Rehab 8329 Other Construction (500,000) 500,000 } 37600061-601-A PW&E Southridge Pavement Rehab (Grid 53) 8329 Other Construction (500,000) 500,000 } 37600066-601-A PW&E Village of Herit. Pave Rehab-South 8329 Other Construction (200,000) 200,000 } 60137699 PW&E Capital Projects 8399 Project Personnel Offset (20) 20 Decrease appropriations for project personnel offset 37600041-601-A PW&E Homelessness Prevent Res & Care Ctr 5317 County - Special Proj 600,000 600,000 } 37600041-601-A PW&E Homelessness Prevent Res & Care Ctr 8130 Other Professional Svcs 600,000 (600,000) } 37603115-601-I PW&E Sawtooth/Concrete Various Operating Accounts (29,010) 29,010 Project close out for Sawtooth Concrete project Various CA Various Var Various 36,500 (36,500) Carryover purchase orders from FY23/24 Various PW&E Various Var Various 23,383 (23,383) Carryover purchase orders from FY23/24 602 Capital Improvement 4,504,134 - - - (4,504,134) 60230000 DS Special Projects 8310 Land 4,499,134 (4,499,134) C/O FY23-24 QWR1 grant budget Downtown Property
Acquisition Funds CC Approved 7/9/24, File #21-3126 & #21- 3127
Various DS Various Var Various 5,000 (5,000) Carryover purchase orders from FY23/24 County Contribution to the Homelessness Center CC
Approved 9/10/24, File #21-3251
Move funds and increase appropriations to Sierra and
Marygold Pavement Rehab project
Increase revenue and appropriations income to new lease agreements

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246
First Quarter Budget Status Report - 2024/2025 City of Fontana October 22, 2024
Fund
Organization
Project #
Dept
Organization/Project
Description
Object Object Description Appropriations Revenues
Transfers
In
Transfers
Out
FB Impact Reason
Other Funds - Recommended Adjustments
Fiscal Year 2024/2025
622 Storm Drain 1,020,481 - - - ( 1,020,481)
62237699 PW&E Capital Projects 8329 Other Construction 5,200 ( 5,200) F Y24-25 Supplemental offset correction 62237699 PW&E Capital Projects 8399 Project Personnel Offset 10 (10) Increase appropriations for project personnel offset 37600063-622-A PW&E Courtplace 8331 Construction Contingency 1,000,000 (1,000,000) Increase appropriations for Courtplace additional Contingency CC Approved 7/23/24, File #21-3124
Various PW&E Various Var Various 15,271 (15,271) Carryover purchase orders from FY23/24 623 Sewer Expansion 170,010 - - - (170,010) 62337699 PW&E Capital Projects 8399 Project Personnel Offset 10 ( 10) I ncrease appropriations for project personnel offset 37600063-623-A PW&E Courtplace 8331 Construction Contingency 170,000 (170,000) Increase appropriations for Courtplace additional Contingency CC Approved 7/23/24, File #21-3124
630 Circulation Mitigation (44,474) - - - 44,474 37600054-630-A PW&E Santa Ana & Juniper Ave TS 8399 Project Personnel Offset (30) 30 } 37603339-630-A PW&E Alder-Locust-Ramona SRTS 8399 Project Personnel Offset 20 (20) } 37603378-630-A PW&E Sierra: Summit to I-15 ROW Various Operating Accounts (44,464) 44,464 Project close out for Sierra: Summit to I-15 ROW 632 General Government 51,124 - - - (51,124) Various DS Various Var Various 51,124 ( 51,124) C arryover purchase orders from FY23/24 635 Parks Development 223,860 - - - (223,860) Various PW&E Various Var Various 223,860 ( 223,860) C arryover purchase orders from FY23/24 636 Police Capital Facilities 80,258 - - - (80,258) Various PD Various Var Various 80,258 ( 80,258) C arryover purchase orders from FY23/24 701 Sewer Maint & Operations 1,389,371 - - - (1,389,371) Various PW&E Various Var Various 1,389,371 ( 1,389,371) C arryover purchase orders from FY23/24 703 Sewer Replacement 76,712 - - - (76,712) Various PW&E Various Var Various 76,712 ( 76,712) C arryover purchase orders from FY23/24 720 Stage Red 250,200 50,000 - - (200,200) 72030100 DS Stage Red Admin 6425 Donations 50,000 50, 000 C /O FY23-24 Stage Red event donations 72030104 DS Pending 8130 Other Professional Svcs 250,200 (250,200) C/O FY23-24 Stage Red ASM Global operating agreement 751 Fleet Operations 3,365,183 - - - (3,365,183) Various PW&E Various Var Various 3,365,183 ( 3,365,183) C arryover purchase orders from FY23/24 Adjust appropriations for project personnel offset

Page 30 of 30 ends

247
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-3358 Agenda Date: 10/22/2024
Agenda #: B. Category: New Business
FROM:

Finance
SUBJECT:

Issuance of Special Tax Bonds for CFD #112 (The Gardens Phase One) RECOMMENDATION:

Adopt Resolution No. 2024-120, of the City Council of the City of Fontana authorizing the issuance of City of Fontana Community Facilities District No. 112 (The Gardens Phase One) Special Tax Bonds, Series 2024, in an aggregate principal amount of not to exceed $32,000,000, authorizing the execution and delivery of an Indenture, a Bond Purchase Agreement and a Continuing Disclosure Agreement, authorizing the distribution of an Official Statement in connection therewith and authorizing the execution of necessary documents and certificates and related actions.

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

DISCUSSION:

On April 25, 2023, the City Council authorized the formation of Community Facilities District No. 112 (The Gardens Phase One) and conducted a special election to levy taxes within the District. This project consists of 526 residential lots located west side of Sierra Avenue north of Casa Grande 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 $29.4 million in bond proceeds resulting from the issuance of the bonds to be made available for the approved infrastructure projects which also includes $357,314 in community benefit fees to fund a defined community benefit project. Costs of issuance will be paid from gross bond proceeds. Debt service payments will be made from special City of Fontana Printed on 10/16/2024Page 1 of 2
powered by Legistar™
248
File #: 21-3358 Agenda Date: 10/22/2024
Agenda #: B. Category: New Business
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 10/16/2024Page 2 of 2
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RESOLUTION NO. _______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

FONTANA AUTHORIZING THE ISSUANCE OF CITY OF
FONTANA COMMUNITY FACILITIES DISTRICT NO. 112
(THE GARDENS PHASE ONE ) SPECIAL TAX BONDS,
SERIES 2024, IN AN AGGREGATE PRINCIPAL AMOUNT
OF NOT TO EXCEED $32,000,000, 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 THER EWITH 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. 112 (The Gardens Phase One ) (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 Community Facilities District No. 112 (The Gardens Phase One) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”), in the aggregate principal amount of not to exceed $32,000,000;
WHEREAS, in order to provide for the authentication and delivery o f 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 Dis trict proposes to enter into an Indenture with U.S.

Bank Trust Company, National Association, as trustee (the “Trustee”) (such Indenture, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Indenture”); WHEREAS, Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), has presented the Community Facilities District with a proposal, in the form of a Bond Purchase Agreement, to purchase the Series 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 Facilitie s District, as 250

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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 this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Preliminary Official Statement”);
WHEREAS, there have been prepared and submitted to this meeting forms of:
(a) the Indenture;
(b) the Purchase Agreement;
(c) the Continuing Disclosure Agreement; and
(d) the Preliminary Official Statement;
WHEREAS, Kitty Siino & Associates, Inc. has prepared and provided to the Community Facilities District an appraisal report, dated September 30, 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 receive d 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 Underwr iter, and such estimates are disclosed and set forth in Exhibit A attached hereto;
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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 desirable 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 $32,000,000, 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 call and redemption, shall be issued in the form and shall be as otherwise provided in the Indenture, as the same shall be completed as provided in this Resolution.

Section 3. The Indenture, in substantially the form submitte d 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 th e Community Facilities District, to execute and deliver the Indenture in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Indenture by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not authorize an aggregate principal amount of Series 2024 Bonds in excess of $32,000,000, 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 1.50% of the aggregate principal amount of the Series 2024 Bonds. The City Council hereby finds and determines that the sale of the Series 252

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

Section 6. The Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof as though s et 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 “O fficial 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 suc h 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 A ppraisal 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 the Act, hereby finds and determines that the value of the real property that would be subject to the Special Tax to pay debt service on the Series 2024 Bonds will be at least three times the principal amount of the Series 2024 Bonds to be sold and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within the Community Facilities District or a special assessment levied on property within the Community Facilities District.

Section 9. The City Council hereby waives the provisions of the City of Fontana Community Facilities and Assessmen t 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 permitted under the California Uniform Electronic Transactions Act and digital signatures as may b e 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 the officers , employees and agents of the City are, and each of them is, hereby authorized and directed, for and in the name of the Community Facilities District to take all actions and do any and all things and to execute and deliver any and all agreements, documents, certificates or inst ruments 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 this Resolution not inconsistent with the provisions hereof.

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

PASSED AND ADOPTED the 22nd day of October, 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 $ 30,760,000 (the “Estimated Principal Amount”), which does not include approximately $1,241,000 of net premium estimated to be gen erated 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 $32,001,000 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 4.73%.

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 charge 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 $634,000.

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 charge 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 $29,372,000.

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 prevailin g at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the Community Facilities District will make to pay debt service on the Series 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 $59,442,000, 255

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which 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 Principa l 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. 256

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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 October 22, 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. 112
(THE GARDENS PHASE ONE)

and

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,

AS TRUSTEE

Dated as of _________ 1, 2024

Relating to
City of Fontana
Community Facilities District No. 112
(The Gardens Phase One)
Special Tax Bonds

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ARTICLE I DEFINITIONS; EQUAL SECURITY ...................................................................... 3 Section 1.01. Definitions.................................................................................................... 3 Section 1.02. Rules of Construction ................................................................................ 11 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 ....................................................................................... 28 259

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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........................................................................................... 36 Section 6.13. Annual Reports to the California Debt and Investment Advisory Commission ......................................................................................................... 36 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 ................................................................................... 40 260

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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 .................................................................... 54 261

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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-1 262

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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. 112 (THE GARDENS PHASE ONE), 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. 112 (The Gardens Phase One ) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”), in the aggregate principal amount of not to exceed $_________; WHEREAS, the Community Facilities District desires to provide for the issuance of additional bonds (the “Additional Bonds”) for refunding purposes payable from the Special 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 the reon, 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 t he Community Facilities District, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special, limited obligations of the Community Facilities District, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Indenture has been in all respects duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of, premium, if any, and the interest on all Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the 263

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Bonds by the owners th ereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Community Facilities District does hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows:
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ARTICLE I

DEFINITIONS; EQUAL SECURITY
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of any certificate, opinion or other document herein 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 April 1, 2023 , by and among the Community Facilities District, the Cit y and the Developer, as originally executed and as it may be amended from time to time in accordance with the terms thereof.
“Acquisition Facilities” has the meaning ascribed to such term 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 directly 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 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 this Indenture, the costs incurred by the Community Facilities District in complyin g 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 tha t, 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 265

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under common control with or by such Person or any Affiliate of such Person. For the purpose of 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 thro ugh 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 sinking 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 multiple thereof, and (b) with respect to each Series of Additional Bonds, the authorized denominations for such Series of Additional Bonds specified in the Supplemental Indenture pursuant to which such Additional Bonds are issued. “Authorized Representative” means (a) 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, and (b) with respect to the Water District, the General Manager of the Water District, and any other Person designated as an Author ized Representative of the Water District in a Written Certificate of the Water 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 Owners” means those Persons for which the Participants have caused the Depository to hold Book-Entry Bonds.
“Bond Counse l” 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, 2025. “Bonds” means the City of Fontana Community Facilities District No. 112 (The Gardens Phase One) 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.
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“Business Day” means a day 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 O ffice of the Trustee is located, are required or authorized by law (including executive order) to close, or (c) a day on which the New York Stock Exchange is closed. “Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to a Series of Book-Entry Bonds.
“City” means the City of Fontana, a general law city organized and existing under the laws of the State, and its successors.
“City Council” means the City Council of the City.
“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 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 Account.
“Community Facilities District” means City of Fontana Community Facilities District No. 112 (The Gardens Phase One ), 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. “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, sup plemented or otherwise modified from time to time in accordance with the terms thereof. “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 direc tly 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, ex ecution and 267

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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.
“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, an d its successors as securities depository for any Series of Book-Entry Bonds, including any such successor appointed pursuant to Section 2.07. “Developer” means North Fontana Investment Company, LLC, a limited liability company organized and existing under the laws of the State of Delaware, and any successor thereto.
“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 a ny other 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 268

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originally executed and as it may be amended , supplemented or otherwise modified from time to time by any Supplemental Indenture.
“Independent Consultant” means any consultant or firm of such consultants selected by the Community Facilities District and who, or each of whom (a) is generally recognized to be qualified in the financial consulting field, (b) is in fact independent and not under the control of the Community Facilities District , the City, the Developer or a ny Affiliate thereof , (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 reta ined 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 Sep tember 1 of each year, commencing [March] 1, 2025.
“Letter of Representations” means the Letter of Representations from the Community Facilities District to the Depository, in which the Community Facilities District makes certain representations with respect to issues of its securities for deposit by the Depository. “Maximum Annual Debt Service” means the largest Annual Debt Service for any Bond Year, including the Bond Year in which the calculation is made. “Moody’s” means Moody’s Investors Service, Inc., a corporation duly organized and existing under the laws of the State of Delaware, and its successors and assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Community Facilities District. “Net Special Tax Revenues” means Special Tax Revenues, less amounts required to pay Administrative Expenses.
“Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.07.
“Office of the Trustee” means the principal corporate trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the Community Facilities District by the Trustee in writing; provided, however, that with respect to presentation of Bonds for payment or for registration of transfer and exchange, such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted, which other office or agency shall be specified to the Community Facilities District by the Trustee in writing.
“Ordinance” means any ordinance adopted by the City Council levying the Special Tax. 269

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“Original Purchaser” means the original purchaser of the Series 2024 Bonds from the Community Facilities District.
“Outstanding” means, when used as of any particular time with reference to Bonds, subject to the provisions of Section 11.07, all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation, (b) Bonds with respect to which all liability of the Community Facilities District shall have been discharged in accordance with Section 10.01, and (c) Bonds in lieu of which other Bonds shall have been authenticated and delivered by the Trustee, or that have been paid without surrender thereof, pursuant to Section 2.08. “Owner” means, with respect to a Bond, the Person in whose name such Bond is registered on the Registration Books.
“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 Continuing Disclosure Agreement.
“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, includin g 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.
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“Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.05. “Reserve Fund” means the Fund by that name established and 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 is sue,” 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. 2023-028, adopted by the City Council on April 25, 2023 , 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 S tandard 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 of 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. 112 (The Gardens Phase One) 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.
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“Supplemental Indenture” means any supplemental indenture modifying or amending this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Tax Certificate” means the Tax Certificate 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). “Water District” means the West Valley Water District , a municipal water district organized and existing under the laws of the State of California. “Water District Account” means the Account by that name within the Improvement Fund established and maintained by the Trustee pursuant to Section 3.04. “Water District Acquisition Agreement” means the Acquisition and Funding Agreement, entered into as of May 4, 2023, by and between the Water District and the Developer, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Water District Facilities” means water distribution , treatment and storage facilities, together with appurtenances and appurtenant work, that are to be owned and operated by the Water District.
“Water District Joint Community Facilities Agr eement” means the Joint Community Facilities Agreement, dated as of June 1, 2023, by and among the City, the Community Facilities District and the Water District, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof. “Written Certificate” and “Written Request” (a) 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 of the Community Facilities District, and (b) of the Water District mean, respectively, a written certificate or written request signed in the name of the Water District by an Authorized Representative of the Water District. 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.
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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 c onstrued to include correlative words of the masculine, feminine or neuter gender, as appropriate.
(c) References herein to a document shall include all amendments, supplements or other modifications to such document, and any replacements, substitutions or novation of, that document.
(d) Any term defined herein by reference to another document shall continue to have the meaning ascribed thereto whether or not such other document remains in effect. (e) The use herein of the words “including” and “includes,” and words of similar import, shall be deemed to be followed by the phrase “without limitation.” (f) Headings of Articles and Sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.
(g) All references herein to designated “Articles,” “Sections,” “Exhibits,” “subsections,” “paragraphs,” “clauses,” and other subdivisions are to the designated Artic les, Sections, Exhibits, subsections, paragraphs, clauses, and other subdivisions of this Indenture. (h) The words “hereof” (except when preceded by a specific Section or Article reference) “herein,” “hereby,” “hereunder,” “hereinabove,” “hereinafter,” and other equivalent words and phrases used herein refer to this Indenture and not solely to the particular portion hereof in which any such word is used.
(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 the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Community Facilities District shall be for the equal and proportionate benefit, protection and security of all Owners of the Bonds without distinction, 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. 273

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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. 112 (The Gardens Phase One) Special Tax Bonds,” each Series thereof to bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Bonds. (b) The Bonds shall be special , limited obligations of the Community Facilities District, payable, as provided herein, solely from Net Special Tax Revenues and the other assets pledged therefor hereunder. Neither the faith and credit nor the taxing power of the Community Facilities District (except to the limited extent set forth herein), th e 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. 112 (The Gardens Phase One ) Special Tax Bonds, Series 2024.” 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 275

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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 th e 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 th is 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 Serie s of Bonds, the Community Facilities District may provide that such Series of Bonds shall initially be issued as Book-Entry Bonds, and in such event, the Bonds of such Series for each maturity date shall be in the form of a separate single fully registered Bond (which may be typewritten). Upon initial issuance, the ownership of each such Bond of such Series shall be registered in the Registration Books in the name of the Nominee, as nominee of the Depository. The Series 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 Facilities District and the Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of which such a Participant holds an interest in such Book -Entry Bonds. Without limiting the 276

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immediately preceding sentence, the Community Facilities District and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in Book -Entry Bonds, (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any notice with respect to Book -Entry Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in Book-Entry Bonds of a maturity to be redeemed in the event such Book -Entry Bonds are redeemed in part, (iv) the payment to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any amount with respect to principal of, or premium, if any, or interest on Book -Entry Bonds, or (v) any consent given or other action taken by the Depository as Owner. (c) The Community Facilities District and the Trustee may treat and consider the Person in whose name each Book-Entry Bond is registered in the Registration Books as the absolute Owner of such Book -Entry Bond for the purpose of payment of principal of, and premium, if any, and interest on such Bond, for the purpose of selecting any Bonds, or portions thereof, to be redeemed, for the purpose of giving notices of redemption and other matters with respect to such Book -Entry Bond, for the purpose of registering transfers with respect to such Book-Entry Bond, for the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever, and the Community Facilities District and the Trustee shall not be affected by any notice to the contrary.
(d) In the event of a redemption of all or a portion of a Book -Entry Bond, the Depository, in its discretion (i) may request the Trustee to authenticate and deliver a new 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 interest on the Book-Entry Bonds only to or “upon the order of” (as that term is used in the Uniform Commercial Code as adopted in the State) the respective Owner, as shown in the Registration Books, or such Owner’s respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the obligations with respect to payment of principal of, and premium, if any, and interest on the Book -Entry Bonds to the extent of the sum or sums so paid.

No Person other than an Owner, as shown in the Registration Books, shall receive an authenticated Book-Entry Bond. Upon delivery by the Depository to the Owners, the Community Facilities District and the Trustee of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such nominee of the Depository. (f) In order to qualify the Book-Entry Bonds for the Depository’s book-entry system, the Community Facilities District shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Community Fa cilities 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 277

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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 abl e 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 det ermines to replace the Depository with another qualified securities depository, the Community Facilities District shall prepare or direct the preparation of a new single, separate, fully registered Bond of the appropriate Series for each maturity date of such Book-Entry Bonds, registered in the name of such successor or substitute qualified securities depository or its nominee. If the Community Facilities District fails to identify another qualified securities depository to replace the Depository, then the Book-Entry Bonds shall no longer be restricted to being registered in the Registration Books in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such Bonds shall designate, in accordance with the provisions of Sections 2.06, 2.08 and 2.09. Whenever the Depository requests the Community Facilities District to do so, the Community Facilities District shall cooperate with the Depository in taking appropriate action after reasonable notice (i) to make available one or more separate certificates evidencing the Book -Entry Bonds to any Participant having Book -Entry Bonds credited to its account with the Depository, and (ii) to arrange for another securities depository to maintain custody of certificates evidencing the Book-Entry Bonds. (h) Notwithstanding any other provision of this Indenture to the contrary, if the Depository is the sole Owner of the Bonds of a Series, so long as any Book -Entry Bond of such Series is registered in the name of the Nominee, all payments of principal of, and premium, if any, and interest on such Book-Entry Bond and all notices with respect to such Book-Entry Bond shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository.
(i) In connection with any notice or other communication to be provided to Owners pursuant to this Indenture by the Community Facilities District or the Trustee, with respect to any consent or other action to be taken by Owners of Book -Entry Bonds, the Trustee shall establish a record date for such consent or other action and give the Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible.

Section 2.08. Bonds Mutilated, Lost, Destroyed or St olen. 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 Communit y 278

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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, destr oyed 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 th e 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 f ully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Community Facilities District and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Community Facilities District issues temporary Bonds of a Series it shall execute and deliver definitive Bonds of such Series as promptly thereafter as practicable, and thereupon the temporary Bonds of such Series may be surrendered, for cancellation, at the Office of the Trustee and the Trustee shall authenticate and deliver, in exchange for such temporary Bonds, an equal aggregate principal amount of definitive Bonds of such Series and maturities in Authorized Denominations. Until so exchanged, the temporary Bonds of such Series shall be entitled to the same benefits under this Indenture as definitive Bonds of such Series authenticated and delivered hereunder.
279

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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;
(iv) the Trustee shall deposit the amount of $__________ in the Community Benefit Account;
(v) the Trustee shall deposit the amount of $__________ in the Construction Account; and
(vi) the Trustee shall deposit the amount of $__________ in the Water District 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 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 p ursuant 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 280

19 4139-9292-1682.3

be deposited therein under the Supplemental Indenture pursuant to which such Ad ditional 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 t o whom payment is to be made, (ii) the amount to be paid and instructions for such payment , (iii) the purpose for which such costs were 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 statement or invoice for each amount requested thereunder. On the last Business Day that is no later than six months after the Closing Date, the Trustee shall transfer any amount remaining in the Costs of Issuance Fund to the Construction Account and, upon making such transfer, the Costs of Issuance Fund shall be closed. (c) If the Costs of Issuance Fund has been closed in accord ance 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 (i) a separate Account designated the “Acquisition Account,” (ii) a separate Account designated the “Community Benefit Account,” (iii) a separate Account designated the “Construction Account,” and (iv) a separate Account designated the “ Water District Account .” On the Closing Date, the Trustee shall deposit in the Acquisition Account , the Community Benefit Account, the Construction Account and the Water District Account the respective amounts required to be deposited therein pursuant to Section 3.02.
(b) 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 such costs were 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 Account, and (vi) whether or not such costs of the Acquisition Facilities are to be paid pursuant to a Payment Request submitted in accordance with the Acquisition Agreement, in each case together with a statement or invoice for each amount requested thereunder. If costs of the Acquisition Facilities are to be paid pursuant to a Payment Request submitted in accordance with the Acquisition Agreement, a duplicate original of the signed and approved Payment Request relating to such costs of the Acquisition Facilities, toge ther 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) that such 281

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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 Account, as directed in a Written Certificate of the Community Facilities District submitted to the Trustee. (c) The moneys in the Community Benefit 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 such costs were incurred, (iv) that the Construction Facilities, the costs of which are to be paid, constitute Community Benefit Facilities and such payment is for costs of the Community Benefit Facilities and is a proper cha rge against the Community Benefit Account, and (v) that payment of such costs has not been the subject of a prior disbursement from the Community Benefit Account, the Construction Account or the Acquisition Account, in each case together with a statement or invoice for each amount requested thereunder.

Additionally, upon submission of a Written Request of the Community Facilities District stating (i) that a portion of the amount on deposit in the Community Benefit Account is to be transferred to the Construction Account, and (ii) the amount to be so transferred, the Trustee shall transfer such amount from the Community Benefit Account to the Construction Account.

Upon the submission of a Written Certificate of the Community Facilities District sta ting (i) that the portion of the Community Benefit Facilities to be financed from the Community Benefit 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 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 transfer all of the amount remaining in the Community Benefit Account (less any such retention) to the Construction Account.
(d) The moneys in the Construction Account shall be used and withdrawn by the Trustee from time to time to pay the costs of the Construction Facilities upon submission of a Written Request of the Community Facilities District stating (i) the Person to whom payment is to be made, (ii) the amount to be paid and instructions for such payment, (iii) the purpose for which such costs were incurred, (iv) that such payment is for costs of the Construction Facilities and is a proper charge against the Construction Accou nt, and (v) that payment of such costs has not been the subject of a prior disbursement from the Construction Account, the Community Benefit Account or the Acquisition Account, in each case together with a statement or invoice for each amount requested thereunder.

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 F acilities 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 th erefor, the Trustee shall (A) if the amount remaining in the Construction Account (less any such retention) is equal to or greater than $25,000, transfer the portion of such amount 282

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equal to the largest integral multiple of $5,000 that is not greater than s uch amount to the Redemption Fund, to be applied to the redemption of Bonds, and (B) after making the transfer, if any, required to be made pursuant to the preceding clause (A), transfer all of the amount remaining in the Construction Account (less any suc h retention) to the Bond Fund, to be applied to the payment of interest on the Bonds.
(e) The moneys in the Water District Account shall be used and withdrawn by the Trustee from time to time to pay the costs of the Water District Facilities upon submission of a Written Request of the Water 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 such costs were incurred, (iv) that such payment is for costs of the Wa ter District Facilities and is a proper charge against the Water District Account, (v) that payment of such costs has not been the subject of a prior disbursement from the Water District Account, (vi) that each portion of the Water District Facilities for which payment of such costs is requested was constructed under the direction and supervision, or under the authority of, the Water District or was constructed as if it had been constructed under the direction and supervision, or under the authority of, the Water District, and (vii) that each portion of the Water District Facilities for which payment of such costs is requested (A) has been [if applicable: constructed, acquired or installed by the Water District] [if applicable:
constructed, acquired or installed for the Water District pursuant to an agreement for such construction, acquisition or installation between the Water District and a Person other than the Developer], or (B) is being acquired and purchased in accordance with the provisions of the Act and the Water District Acquisition Agreement.

Upon the submission of a Written Certificate of the Water District stating that the portion of the Water District Facilities to be financed from the Water District Account has been completed and that all costs of such Water District Facilities have been paid, the Trustee shall transfer all of the amount remaining in the Water District Account to the Construction Account or, if the Construction Account has been closed, 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 a ll other Bonds theretofore issued hereunder, but only subject to the following conditions, which are hereby made conditions precedent to the issuance of such Additional Bonds:
(a) upon the issuance of such Additional Bonds, no Event of Default shall have occurred and be continuing hereunder;
(b) the issuance of such Additional Bonds shall have been authorized under and pursuant to this Indenture and the Act and shall have been provided for by a Supplemental Indenture, which shall specify the following:
(i) the purposes for which the proceeds of such Additional Bonds are to be applied, which purposes may only include one or more of (A) providing funds to refund any Bonds previously issued hereunder, (B) providing funds to pay Costs of Issuance incurred in connection with the issuance of such Additional 283

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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 sinking fund redemption is to be made shall be a September 1 and, provided, further, that serial maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds , or any combination thereof, shall be established to provide for the redemption or payment of such Additional Bonds on or before their respective maturity dates;
(v) the 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 tha t 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 I ssuance of Additional Bonds . At any time after the sale of any Additional Bonds in accordance with the Act, such Additional Bonds shall be executed 284

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by the Community Facilities District for issuance hereunder and shall be delivered to the Trustee and thereupon shall be authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following:
(a) a certified copy of the Supplemental Indenture authorizing the issuance of such Additional Bonds;
(b) a Written Request of the Community Facilities District as to the delivery of such Additional Bonds;
(c) a Written Certificate of the Community Facilities District stating that the conditions precedent to the issuance of such Additional Bonds specified in Section 3.05 have been satisfied;
(d) an opinion of Bond Counsel substantially to the effect that (i) this Indenture, as modified and amended by all Supplemental Indentures theretofore, or thereupon being, entered into has been duly authorized, executed and delivered by, and constitutes the valid and binding obligation of, the Community Facilities District, (ii) such Additional Bonds constitute valid and binding special , limited obligations of the Community Facilities District, and (iii) the issuance of such Additional Bonds, in and of itself, will not adversely affect the exclusion of interest on the Bonds Outstanding prior to the issuance of such Additional Bonds from gross income for federal income tax purposes; (e) the proceeds of the sale of such Additional Bonds; and (f) such further documents or mon ey 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. 285

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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 Denomination s, on any date on or after September 1, 20__, from any source of available funds, at the following respective Redemption Prices (expressed as percentages of the principal amount of the Series 2024 Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

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 rede emed), 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

286

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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 d esignated 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)

287

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Section 4.02. Notice of Redemption . The Trustee on behalf and at the expense of the Community Facilities District shall mail (by first -class mail ) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books 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 Pric e 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 maile d, 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 redempti on 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 redempt ion 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 288

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Request of the Community Facilities District, (b) with respect to any redemption pursuant to Section 4.01(b) and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable, and (c) with respect to any other redemption of Additional Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity in any manner that the Trustee in its sole discretion shall deem appropriate. For purposes of such selection, all 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 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 T rustee 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. 289

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ARTICLE V

SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01. Pledge. Subject only to the provisions of this Indenture permitting the application thereof for the purposes a nd on the terms and conditions set forth herein, in order to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of this Indenture and the Act, the Community Facilities District hereby pledges to the Owners, and grants thereto a lien on and a security interest in, all of the Net Special Tax Revenues and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund. Said pledge shall constitute a first lien on and security interest in such assets, which shall immediately attach to such assets and be effective, binding and enforceable against the Community Facilities District, its successors, purchasers of any of such assets, creditors and all others asserting ri ghts 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, but 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 Facilit ies 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 requ ested transfer to the Administrative Expense Fund, the Trustee shall withdraw from the Special Tax Fund Net Special Tax Revenues in an amount sufficient to enable the Trustee to make the following transfers in the following order of priority:
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(i) Interest Account. To the Interest Account, the amount, if any, necessary to cause the amount on deposit in the Interest Account to be equal to the interest due on the Bonds on such Interest Payment Date;
(ii) Principal Account. To the Principal Account, the amount, if any, necessary to cause the amount on deposit in the Principal Account to be equal to the principal, if any, due on the Bonds on such Interest Payment Date, including principal due and payable by reason of mandatory sinking fund redemption of such Bonds; and (iii) Reserve Fund. To the Reserve Fund, the amount, if any, necessary to cause the amount on deposit in the Reserve Fund to be equal to the Reserve Requirement.

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

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

5.02, amounts in the Interest Account are insufficient to pay the interest on the Bonds due and payable on such Interest Payment Date, the Trustee shall withdraw from the Reserve Fund, to the extent of any funds therein, the amount o f 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 291

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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 the amount on deposit in the Reserve Fund shall, on the date on which amounts to redeem such Bonds are deposited in the Redemption Fund or otherwise deposited with the Trustee pursuant to Section 10.02, be transferred by the Trustee from the Reserve Fund to the Redemption Fund or to such deposit held by the Trustee and shall be applied to the redemption of said Bonds; provided, however, that such amount shall be so transferred only if and to the extent that the amount remaining on deposit in the Reserve Fund will be at least equal to the Reserve Requirement (excludi ng 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 pr ior 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 nex t 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 portion 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 292

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Improvement Fund (or Accounts therein) pursuant to Section 3.04, (iv) amounts required to 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 Additional 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 b e deposited therein pursuant to the Tax Certificate, as specified in a Written Request of the Community Facilities District. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement, for payment to the United States of America. Notwithstanding defeasance of the Bonds pursuant to Article X or anything to the contrary contained herein, all amounts required to be deposited into or on deposit in the Rebate Fund shall be go verned 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 Comm unity Facilities District, and shall have no liability or responsibility to enforce compliance by the Community Facilities District with the terms of the Tax Certificate. The Trustee may conclusively rely upon the Community Facilities District’s determinations, calculations and certifications required by the Tax Certificate. The Trustee shall have no responsibility to independently make any calculation or determination or to review the Community Facilities District’s calculations.
(b) Any funds remaining in the Rebate Fund after payment in full of all of the Bonds and after payment of any amounts described in this Section, shall, upon receipt by the Trustee of a Written Request of the Community Facilities District, be withdrawn by the Trustee and remitted to the Community Facilities District.

Section 5.07. Administrative Expense Fund . (a) The Trustee shall establish and maintain 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 upon submis sion 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 such costs were 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. 293

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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 Permitted 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 Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in this Indenture; provided, however, that Permitted Investments in which moneys in the Reserve Fund are so invested shall mature no late r 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 a ny 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 transferred 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 the Community Facilities District is submitted to the Trustee pursuant to subsection (b) of Sec tion 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 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 utilize computerized securities pricing services that may be available to it, including those available through its regular accounting system. Any Permitted Investment that is a registrable security shall be registered in the name of the Trustee.
(d) The Trustee may act as principal or agent in the making or disposing of any investment. Upon the Written Request of the Community Facilities District, the Trustee shall sell or present for redemption any Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the 294

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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 made 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 capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or dealing as a principal for its own account.
(e) The Community Facilities District acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Community Facilities District the right to receive brokerage confirmations of security transactions as they occur, the Community Facilities District specifically waives receipt of such confirmations to the extent permitted by law. The Trustee shall furnish the Community Facilities District periodic cash transaction statements, which shall include detail for all investment transactions made by the Trustee hereunder.
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ARTICLE VI

COVENANTS
Section 6.01. Collection of Special Tax Revenues . (a) The Community Facilities District shall comply with all requirements of the Act so as to assure the timely collection of Special Tax Revenues, including the enforcement of delinquent Special 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 296

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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 the payment of four installments of the Special Tax levied on such parcel , 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 Bonds or the time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in c ase 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 t he 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 o ther encumbrance upon the assets pledged under this Indenture, except as permitted hereby. The Community Facilities District shall at all times, to the extent permitted by law, defend, preserve and protect said pledge of such assets, and the lien thereon a nd security interest therein created hereby, against all claims and demands of all Persons whomsoever.

Section 6.07. Tax Covenants. (a) The Community Facilities District shall not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of interest on the Series 2024 Bonds under Section 103 of the Code. Without limiting the generality of the foregoing, the Community Facilities District shall comply with the requirem ents of the Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive payment in full or defeasance of the Series 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 tak e 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 wi thin the Community Facilities District to satisfy Special Tax obligations by the tender of Bonds unless the Community Facilities District shall have first obtained a report of an Independent Consultant certifying that doing so would not result in the Community Facilities District having insufficient Special Tax Revenues to pay the principal of and interest on all Outstanding Bonds when due.

Section 6.09. Reduction in Special 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 Facilitie s District shall, to the extent permitted by law, commence and pursue reasonable legal actions to prevent the modification of the Rate and Method in a manner that would adversely affect the security for the Bonds.

Section 6.10. Continuing Disclosure. Each of the Community Facilities District and the Trustee shall comply with and carry out all of the provisions of the 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 Continuing Disclosure Agreement shall not be considered an Event of Default; provided, however, that the Trustee may (and, at the written direction of any Participating Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Series 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 compe l 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.

Section 6.12. State Reporting. If at any time principal or interest due on any scheduled payment date for the Bonds is not paid, or if funds are withdrawn from the Reserve Fund to pay principal of or interest on the Bonds, the Trustee shall notify the Community Facilities District in writing of such failure or withdrawal, and the Community Facilities Dist rict 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 298

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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 Commis sion the information required to be provided thereto pursuant to Section 53359.5(b) of the Act. Such information shall be made available to any Owner upon written request to the Community Facilities District accompanied by a fee determined by the Community Facilities District to pay the costs of the Community Facilities District in connection therewith. The Community Facilities District shall in no event be liable to any Owner or any other person or entity in connection with any error in any such information.

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

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

Section 7.02. Foreclosure. If an Event of Default shall o ccur 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 t o 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; 300

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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 ju risdiction, 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 matu ring on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Persons entitled thereto, without any discrimination or preference; and
Second: to the payment to the Persons entitled thereto of all installments of principal of the Bonds then due, whether at maturity or by call for redemption, with interest on the overdue principal at the rate borne by the respective Bonds on the date of maturity or redemption, and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the Persons entitled thereto, without any discrimination or preference; (c) any remaining funds shall be tran sferred 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 301

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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 wr iting executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder; provided, however, that such direction shall no t 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 am ount of the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name, (c) such Owner or said Owners shall have tendered to the Truste e indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, and (d) the Trustee shall have refused or omitted to comply with such request for a period of 60 days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

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

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

Section 7.10. Termination of Proceedings. In case any proceedings taken by the Trustee or any one or more Owners on account of any Event of Default shall have been discontinued or 302

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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 Trustee and the Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the 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 th e 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, during 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 Resi gnation; Successors. (a) The Trustee initially a party hereto and any successor thereto shall at all times be a trust company, national banking association or bank having trust powers in good standing in or incorporated under the laws of the United States or any state thereof, having (or if such trust company, national banking association or bank is a member of a bank holding company system, its parent bank holding company shall have) a combined capital and surplus of at least $250,000,000, and subject to supervision or examination by a federal or state agency . If such trust company, national banking association or bank publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining agency above referred to, then for the purp ose 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 Outstan ding (or their attorneys duly authorized in writing), or (ii) the Trustee shall cease to be eligible in accordance with subsection (a) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the Trustee. (c) The Trustee may at any time resign by giving written notice of such resignation by first-class mail, postage prepaid, to the Community Facilities District, and to the Owners at the respective addresses shown on the Registration Books. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of subsection (a) of this Section, the Trustee shall resign immediately in the manner and with the effect specified in this Section. (d) Upon removal or resignation of the Trustee, the Community Facilities District shall promptly appoint a successor Trustee by an instrument in writing. Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by t he successor Trustee; provided, however, that any successor Trustee shall be 304

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qualified as provided in subsection (a) of this Section. If no qualified successor Trustee shall have been appointed and have accepted appointment within 45 days following notice of removal or notice of resignation as aforesaid, the removed or resigning Trustee or any Owner (on behalf of such Owner and all other Owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may t hereupon, after such notice, if any, as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Community Facilities Distri ct and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the Community Facilities District or the request of the successor Trustee, such predecessor Trustee shall execute and deliver a ny and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon acceptance of appointment by a successo r Trustee as provided in this subsection, the successor Trustee shall, within 15 days after such acceptance, mail, by first -class mail postage prepaid, a notice of the succession of such Trustee to the trusts hereunder to the Owners at the addresses shown on the Registration Books. (e) Any trust company, national banking association or bank into which the Trustee may be merged or converted or with which it may be consolidated or any trust company, national banking association or bank resulting from any merger, conversion or consolidation to which it shall be a party or any trust company, national banking association or bank to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such trust company, national ba nking 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 Trust ee. (a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Community Facilities District, and the Trustee shall not assume responsibility for the correctness of the same or incur any responsibility i n 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 ap plication 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. 305

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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 negligen t in ascertaining the pertinent facts.
(g) The immunities and protections extended to the Trustee also extend to its directors, officers, employees and agents.
(h) Before taking action under Article VII, under this Article or upon the direction of the Owners, the Trustee may require indemnity reasonably satisfactory to the Trustee be furnished to it to protect it against all fees and expenses, including those of its attorneys and advisors, and protect it against all liability it may incur.
(i) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. (j) The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners, whether or not such commit tee 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 o r 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 deem reasonable.
(c) The Trustee may consult with counsel, who may be counsel to the Community Facilities District, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.

Section 8.05. Accounting Records and Financial Statements . The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with prudent corporate trust industry standards, in which accurate entries shall be made of all transactions made by it relating to the proceeds of the Bonds, the Special Tax Revenues received by it and all Funds and Accounts established by it pursuant to this Indenture. Such books of record and account shall be available for inspection by the Community Facilities District during regular business hours and upon reasonable notice and under reasonable circumstances as agreed to by the Trustee. The Trustee shall deliver t o 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 reaso nable notice to the inspection of the Community Facilities District, the Owners and their agents and representatives duly authorized in writing.

Section 8.07. Compensation and Indemnification . The Community Facilities District shall pay to the Trustee from time to time from Special Tax Revenues all reasonable compensation pursuant to a pre -approved fee letter for all services rendered under this Indenture, and also all reasonable expenses, charges, legal and consulting fees pursuant to a pre -approved fee letter and other disbursements pursuant to a pre -approved fee letter and those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Indenture. 307

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The Community Facilities District shall, to the extent permitt ed 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 federal 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 308

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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 Commercial 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 Fund 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 immu nities, 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 eli gible in accordance with the provisions 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 elig ible in accordance with the provisions 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 such 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 Interme diary, pursuant to which such successor 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 hereunder 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. 309

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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, exclusive of Bonds disqualified as provided in Section 11.07. No such modification or amendment shall (i) extend the fixed maturity of any Bond, reduce the amount of principal thereof or the rate of interest thereon, extend the time of payment thereof or alter the redemption provisions thereof, without the prior written consent of the Owner of each Bond so affected, (ii) permit any pledge of, or the creation of any lien on, security interest in or charge or other encumbrance upon the assets pledged under this Indenture prior to or on a parity with the pled ge 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 ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in this Indenture, provided that such modification or amendment does not materially adversely affect the rights or interests of the Owners hereunder; (iii) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Article III; (iv) to permit the qualification of this Indenture under the Trust Indenture Ac t 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 310

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(vi) in any other respect whatsoever as th e 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 Dis trict 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 und er this Indenture of the Community Facilities District, the Trustee and the Owners shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

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

Section 9.04. Amendment of Particular Bonds. The provisions of this Article shall not prevent any Owner from accepting any amendment , supplement or other modification as to any particular Bond owned by it, provided that due notation thereof is made on such Bond. 311

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ARTICLE X

DEFEASANCE
Section 10.01. Discharge of Indenture . (a) If the Community Facilities District shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, then the Owners shall cease to be entitled to the pledge of the Net Special Tax Revenues and the other assets pledged therefor hereunder , and all agreements, covenants and other obligations of the Community Facilities District hereunder shal l thereupon cease, terminate and become void and this Indenture shall be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Community Facilities District all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the Community Facilities District all money or securities held by it pursuant hereto that are not required for the payment of the principal of and interest and premium, if any, on the Bonds.
(b) Subject to the provisions of subsection (a) of this Section, if the Community Facilities District shall pay or cause to be paid to the Owner of an Outstanding Bond the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, such Owner shall cease to be entitled to the pledge of the Net Special Tax Revenues and the other assets pledged therefor hereunder and all agreements, covenants and other obligations of the Community Facil ities 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 cance llation 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 ho ld 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 b e deemed to have been paid within the meaning and with the effect provided in Section 10.01. Any Outstanding Bond shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in Section 10.01 if (i) in case such Bond is to be redeemed on any date prior to its maturity date, the Community Facilities District shall have given to the Trustee in form satisfactory to it irrevocable instructions to mail, on a date in accordance with th e 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 312

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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 beco me 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 Veri fication Report with respect to such deemed payment, addressed to the Community Facilities District and the Trustee, in form and in substance acceptable to the Community Facilities District, (ii) a copy of the escrow agreement entered into in connection with the deposit pursuant to clause (ii)(B) of subsection (a) of this Section resulting in such deemed payment, which escrow agreement shall be in form and in substance acceptable to the Community Facilities District and which escrow agreement shall provide that no substitution of Defeasance Securities shall be permitted except with other Defeasance Securities and upon delivery of a new Verification Report, and no reinvestment of Defeasance Securities shall be permitted except as contemplated by the original Verification Report or upon delivery of a new Verification Report, and (iii) a copy of an opinion of Bond Counsel, dated the date of such deemed payment and addressed to the Community Facilities District and the Trustee, in form and in substance acceptable to the Community Facilities District, to the effect that such Bond has been paid within the meaning and with the effect expressed in this Indenture, all agreements, covenants and other obligations of the Community Facilities District hereunder have ceased, terminated and become void and the Indenture has been 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. 313

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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. 112 (The Gardens Phase One)
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 shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by 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 District or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained required hereby to be performed by or on behalf of the Community Facilities District or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

Section 11.03. Limitation of Rights. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any Person other than the Trustee, the Community Facilities District and the Owners any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision therein or herein contained, 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. 314

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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 Invalid 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 t he 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 concurrent instruments of substantially similar tenor and shall be signed or executed by such Owners in person or by an agent or agents duly appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and the Community Facilities District if made in the manner provided in this Section. (b) The fact and date of the executi on by any Person of any such request, consent or other instrument or writing may be proved by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the Pe rson signing such request, consent or other instrument acknowledged to such notary public or such officer the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer.
(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 concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds that are known by the Trustee to be owned or held by or for the account of the Community Facilities District, or by any other obligor on the Bonds, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Community Facilities District or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpo se of any such determination ; 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 315

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

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

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

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

Section 11.12. Conflict with Act. In the event of any conflict between any provision of this Indenture and any provision of the Act, the provision of the Act shall prevail over the provision of this Indenture.

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 th is 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. 112 (THE GARDENS PHASE ONE)

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 maturing not more than 360 calendar days after the date of purchase (ratings on holding companies are not considered as the rating of the bank);
(5) Commercial paper which is rated at the time of purchase in the single highest classification, “P -1” by Moody’s and “A -1+” by S&P and which matures not more than 270 calendar days after the date of purchase;
(6) Investments in a money market fund rated “AAAm” or “AAAm -G” or better by S&P, including a fund for which the Trustee, its parent holding company, if any, or any affiliates or subsidiaries of the Trustee provide investment advisory or other management services; (7) Pre-refunded Municipal Obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and
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(a) which are rated, based on an irrevocable escrow account or fund (the “escrow”), in the highest rating category of Moody’s or S&P or any successors thereto; or (b) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the speci fied 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 sta tes with a rating of “A2/A” or higher by both Moody’s and S&P;
(9) Investment agreements with a domestic or foreign bank or corporation (other than a life or property casualty insurance company) the long -term debt of which, or, in the case of a guaranteed corporation the long -term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least “Aa3” by Moody’s and “AA-” by S&P; provided, that, by the terms of the investment agreement:
(a) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days’ prior notice; (b) the investment agreement shall state that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors; (c) the Trustee or the Community Facilities District receive the opinion of domestic counsel that such investment agreement is legal, valid and binding and enforceable against the provid er in accordance with its terms and of foreign counsel (if applicable);
(d) the investment agreement shall provide that if during its term (i) the provider’s rating by either Moody’s or S&P falls below “Aa3” or “AA-,” respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (A) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider’s books) to the Trustee or a holder of the collateral, collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to Moody’s and S&P to maintain an “A” rating in an “A” rated structured financing (with a market value approach); or (B) repay the principal of and accrued but unpaid interest, on the investment, and (ii) the provider’s 320

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rating by either Moody’s or S&P is withdrawn or suspended or falls bel ow “A3” or “A-,” respectively, the provider must, at the direction of the Community Facilities District or the Trustee, within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Trustee; (e) the investment agreement shall state, and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the holder of collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the holder of collateral is in possession); and
(f) the investment agreement must provide that if during its term (i) the provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the Community Facilities District or the Trustee, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Trustee, and (ii) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt , etc., the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Trustee.

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EXHIBIT B

FORM OF SERIES 2024 BOND

No. ___ $____________

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112
(THE GARDENS PHASE ONE)
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. 112 (The Gardens Phase One ) (the “Community Facilities District”), for value received, hereby promises to pay, solely from the sources hereinafter described, to the Registered Owner identified above or registered assigns (the “Registered Owner”), on the Maturity Date identified above or on any earlier redemption date, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Interest Rate identified above in like lawful money from the date hereof payable semiannually on March 1 and September 1 in each year, commencing [March] 1, 2025 (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 Comm unity 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. 112 (The Gardens Phase One ) 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 “Trus tee”), 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 la ws of the State of California.

Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Indenture. 322

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Interest on the Series 2024 Bonds shall be payable from the Interest Payment Date next preceding the date of authentication th ereof 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 Record 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 s hall 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 an y 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 na me 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. 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, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, in order to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of the Indenture and the Act, the Community Facilities District pledges to the Owners, and grants thereto a lien on and a security interest in, all of the Net Special Tax Revenues and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund. Said pledge constitutes a first lien on and security interest in such assets, which shall immediately attach to such assets and be effective, binding and enforceable against the Community Facilities District, its successors, purchasers of any of such assets, creditors and all others asserting rights therein, to the extent set forth in, and in accordance with, the Indenture, irrespective of whether those parties have notice of the pledge of, lien on and security interest in such assets and without the need for any physical delivery, recordation, filing or further act.

The Series 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). 323

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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 delivery 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 Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.

The Indenture and the rights and obligations of the Community Facilities District, the 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 t he 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. 112 (THE

GARDENS PHASE ONE)

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 Bo nd 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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CONTINUING DISCLOSURE AGREEMENT

by and among

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112
(THE GARDENS PHASE ONE)

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. 112
(The Gardens Phase One)
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. 112 (THE GARDENS PHASE ONE ), a community facilities district organized and existing under the laws of the State of California (the “Community Facilities District”), U.S. BANK TRUST COMPANY, NATIONAL ASSOCIA TION, 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. 112 (The Gardens Phase One) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”), in the aggregate principal amount of $_________, pursuant 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 th e 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 Community Facilities District pursuant to, and as described in, Sections 2 and 3 hereof. “Annual Report Date” means the date in each year that is the first day of the month following the eighth month after the end of the Community Facilities District’s fiscal year, which date, as of the date of this Disclosure Agreement, is March 1. “Community Facilities District” means City of Fontana Community Facilities District No. 112 (The Gardens Phase One ), 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. 329

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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 into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation of the Community Facilities District, or (c) a guarantee of (i) a debt obligation of the Community Facilities District, or (ii) a derivative instrument described in clause (b), above; provided, however, that the term “Financial Obligation” shall not include “municipal securities” (as such term is defined in the Securities Exchange Act of 1934, as amended) as to which a “final official statement” (as such term is defined in the Rule) has been provided to the MSRB consistent with the Rule.
“Indenture” means the Indenture, dated as of _________ 1, 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 subsection (a) or subsection (b) of Section 4 hereof.
“MSRB” means the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule.

Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electroni c 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, commencing with the report for the 2023-24 Fiscal Year. The Annual Report may include by reference other information as provi ded in Section 3 hereof; provided, however, that the audited financial statements of the Community Facilities District, if any, may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Community Facilities District’s fiscal year changes, it shall, or it shall instruct the Dissemination Agent to, give notice of such change in a filing with the MSRB.
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(b) Not later than 15 business days prior to the date specified in subsection (a) of this Section for the providing of the Annual Report to the MSRB, the Community Facilities District shall provide the Annual Report to the Dissemination Agent. If by such date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the Community Facilities District to determine if the Community Facilities District is in compliance with the first sentence of this subsection (b).
(c) If the Dissemination Agent has not received a copy of the Annual Report from the Community Facilities District by the date specified in subsection (a) of this Section, the Dissemination Agent shall, in a timely manner, send a notice to the MSRB in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) provide each Annual Report received by it to the MSRB, as provided herein; and
(ii) file a report with the Co mmunity Facilities District and the Trustee certifying that such Annual Report has been provided pursuant to this Disclosure Agreement and stating the date it was provided to the MSRB.

Section 3. Content of Annual Reports . The Community Facilities District’s Annual Report shall contain or incorporate by reference the following:
(a) The Community Facilities District’s audited financial statements, if any, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Community Facilities District’s audited financial statements, if any, are not available by the time the Annual Report is required to be filed pursuant to subsection (a) of Section 2 hereof, the Annual Report shall contain unaudited financial statements, in a format similar to that used for the Community Facilities District’s audited financial statements, and the audited financial statements, if any, shall be filed in the same manner as the Annual Report when they become available.
(b) The following information:
(i) The principal amount of Series 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 o r 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 Communi ty Facilities District, and (B) all other 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 asse ssment 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 n ext 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;
(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; and
(xii) A description of the number of building permits issued for initial construction of units on property within the Community Facilities District during 332

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the one-year period ending on the December 31 next preceding the Annual Report Date.

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 t he public on the MSRB’s website . The 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 opinions or issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB).
(vi) Tender offers.
(vii) Defeasances.
(viii) Rating changes.
(ix) Bankruptcy, insolvency, receivership or similar event of the Community Facilities District.
(x) Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a Financial Obligation, any of which reflect financial difficulties.

For purposes of the event identified in paragraph (ix) of this subsection , the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Community Facilities District in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Community Facilities District, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement 333

6 4135-9046-5106.2

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 S ection, 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:
(i) Unless described in paragraph (v) of subsection (a) of this Section, material notices or determinations by the Internal Revenue Service with respec t 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 secu ring 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 termination of a definitive agreement relating to any such actions, other than pursuant to its terms.
(vii) Appointment of a successor or additional Trustee or the change of name of a Trustee.
(viii) Incurrence of a Financial Obligation, or agreement to covenants, events of default, remedies, priority rights or other similar terms of a Financial Obligation, any of which affect holders of the Series 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 subsection (a) of this Section, or determines that knowledge of a Listed Event described in subsection (b) of this Section would be material under applicable Federal securities law, the Community Facilities District shall, or shall cause the Dissemination Agent to, 334

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file a notice of the occurrence of such Listed Event with the MSRB, within ten business days of such occurrence.
(f) Notwithstanding the foregoing, notice of Listed Events described in paragraph (iii) of subsection ( b) of this Section need not be given any earlier than the notice (if any) of the underlying event is given to holders of affected Series 2024 Bonds pursuant to the Indenture.

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 such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resig n 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 Facilities District, so long as such amendment does not adversely affect the rights or materially increase the obligati ons of the Trustee or the Dissemination Agent), and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of subsection (a) of Section 2 hereof, Section 3 hereof or subsection (a) or (b) of Section 4 hereof, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Series 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 nationally recognized bond counsel, materially impair the interests of Owners or Beneficial Owners of the Series 2024 Bonds.
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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 addition, if the amendment relates to the accounting principles to be followed in preparing financial statements (i) notice of such change shall be given in a filing with the MSRB, and (ii) the Annual Report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

Section 9. Additional Information . Nothing in this Disclosure Agreement shall be deemed to prevent the Community Faciliti es 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 b y this Disclosure Agreement, the Community Facilities District shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event or any other event required to be reported.

Section 10. Default. In the event of a failure of the Community Facilities District, the Trustee or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Trustee may (and, at the written direction of any Participating Underwriter or the Owners of at least 25% of the aggregate principal amount of Outstanding Series 2024 Bonds, shall, upon receipt of indemnification reasonably satisfactory to the Trustee), or any Owner or Beneficial Owner of the Series 2024 Bonds may, t ake 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 Di sclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Indenture. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee thereunder. Neither the Truste e 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 336

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(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.

The Dissemination Agent has no power to enforce performance on the part of the Community Facilities District. The Dissemination Agent shall not be responsible for the content of any notice or report prepared by the Community Facilities District pursuant to this Disclosure Agreement.

Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Community Facilities District, the Trustee, the Dissemination Agent, the Participating Underwriter and the Owners and Beneficial Owners from time to time of the Series 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 Di sclosure Agreement as of the date first above written.

CITY OF FONTANA

COMMUNITY FACILITIES DISTRICT
NO. 112 (THE GARDENS PHASE ONE)

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

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A-1
4135-9046-5106.2

EXHIBIT A

NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Fontana Community Facilities District No. 112 (The Gardens Phase One)
Name of Issue: City of Fontana Community Facilities District No. 112 (The Gardens Phase One) Special Tax Bonds, Series 2024
Date of Issuance: _________, 2024

NOTICE IS HEREBY GIVEN that City of Fontana Community Facilities District No. 112 (The Gardens Phase One) (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.
112 (The Gardens Phase One)

cc: City of Fontana
Community Facilities District
No. 112 (The Gardens Phase One)
339
Anzel Galvan LLP Draft of 9-27-2024

BOND PURCHASE AGREEMENT

$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) SPECIAL TAX BONDS, SERIES 2024

[Pricing Date]

City of Fontana Community Facilities
District No. 112 (The Gardens Phase One)
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 Agreement (this “ Agreement”) with City of Fontana Community Facilities District No. 112 (The Gardens Phase One ) (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 t he meanings given them in the Indenture described below.

1. Upon the terms and conditions and in reliance upon the respective representations, warranties and covenants herein, the Underwriter hereby agrees to purchase from the Issuer, and the Issuer hereb y agrees to sell to the Underwriter, all (but not less than all) of the above -captioned bonds (the “ Bonds”) at a purchase price (the “ Purchase Price ”) of $________ (equal to the par amount of the Bonds ($ [PAR].00), plus original issue premium of $________, 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 [October 22], 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. 1913 adopted by the City Council on June 13, 2023 (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. 2023-016 (the “Resolution of Intention to Form the District ”), (ii) Resolution No. 2023-017 (the “Resolution of Intention to Incur Bonded Indebtedness ”), (iii) Resolution No. 2023-028 (the “ Resolution of Formation”), (iv) Resolution No. 2023-029 (“Resolution Declaring Necessity to Incur Bonded 340
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Indebtedness”), (v) Resolution No. 2023-030 (the “ Resolution Calling Election ”), and (vi) Resolution No. 2023-031 (the “ Resolution Declaring Election R esults”; 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 November 1, 2024, by and between the Issuer and U.S. Bank Trust Company, National Association, as trustee (the “ Trustee”). The proceeds of the sale of the Bonds will be used by the Issuer to (i) provide financing for certain public facilities and costs related to development within the District, (ii) fund a reserve fund with respect to the Bonds, and (i ii) pay the costs of issuing the Bonds. Proceeds of the Bonds will be applied in accordance with the Indenture.

The Issuer acknowl edges and agrees that: (i) the primary role of the Underwriter is to purchase securities for resale to investors in an arms -length commercial transaction between the Issuer and the Underwriter and that the Underwriter has financial and other interests that differ from those of the Issuer, and in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not acting as the ag ent 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 serv ices 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 p rovided 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 appl icable, to the extent it has deemed appropriate in connection with the transaction contemplated herein. The Issuer acknowledges that it has previously provided the Underwriter with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the MSRB.

2. The Bonds will mature on the dates and in the principal amounts and will bear interest at the rates (and have the redemption terms) as set forth in Exhibit A hereto. The Underwriter agrees to make a bona fide public offering of all of the Bonds at the off ering 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 co pies 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. 341
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In connection with issuance of the Bonds, and in order to assist the Underwriter in complying with R ule 15c2 -12, the Issuer will execute a Continuing Disclosure Agreement, dated as of November 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 author ity to adopt the Resolutions and Ordinance, and the Issuer has the full legal right, power and authority (i) to enter into this Agreement, the Indenture, and the District Continuing Disclosure Agreement (collectively, the “ Issuer Documents”), (ii) to issue, sell and deliver the Bonds to the Underwriter as provided herein, and (iii) to carry out and consummate all other transactions on its part contemplated by the Final Official Statement and each of the Issuer Documents, and the Issuer and the City Council have complied with all provisions of applicable law, including the Act, in all matters relating to such transactions.

(c) The Issuer has duly authorized (i) the execution and delivery by the Issuer of the Bonds and the execution, delivery and due performa nce 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 a s may be required on the part of the Issuer to carry out, give effect to and consummate the transactions on its part contemplated by such instruments. All consents or approvals necessary to be obtained by the Issuer in connection with the foregoing have b een received, and the consents or approvals so received are still in full force and effect.

(d) The Resolutions and Ordinance have been duly adopted by the City Council and are in full force and effect; and the Issuer Documents, when executed and delivered by the Issuer and the other party thereto, will constitute a legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with their terms, except as enforceability thereof may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally.

(e) When delivered to the Underwriter, the Bonds will have been duly authorized by the City Council and duly executed, issued and delivered by the Issuer and will constitute legal, valid and binding special o bligations 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 be nefit 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 information relating to The Depository Trust Company (“DTC”) and its book-entry system) contained in the Preliminary Official Statement is, and as of the Closing Date such information in the Final Official Statement will be true and correct in all material respects, and the Prel iminary 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 the caption “INTROD UCTION – 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 paragraphs of the ca ption “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 th e Issuer or the City as a result of which the Final Official Statement as then amended or supplemented might include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Issuer shall promptly notify the Underwriter in writing of such event. Any information supplied by the Issuer for inclusion in any amendments or supplements to the Final Official Statement will not co ntain any untrue or misleading statement of a material fact relating to the Issuer or the City or omit to state any material fact relating to the Issuer or the City necessary to make the statements therein, in the light of the circumstances under which the y were made, not misleading. As used herein, the term “End of the Underwriting Period” means the later of such time as: (i) the Bonds are delivered to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the End of the Underwriting Period shall be deemed to be the Closing Date (as described in Section 6 below). Any notice delivered pursuant to this provision shall be written notice delivered to the District at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the “End of the Underwriting Period.”

(h) Neither the adoption of the Resolutions and Or dinance, the execution and delivery of the Issuer Documents, nor the consummation of the transactions on the part of the Issuer contemplated herein or therein or the compliance by the Issuer with the provisions hereof or thereof will conflict with, or cons titute 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 343
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provision of the Sta te Constitution or (iii) any existing law, rule, regulation, ordinance, judgment, order or decree to which the Issuer or the City (or the members of the City Council or any of its officers in their respective capacities as such) is subject, that would have a material adverse effect on the ability of the Issuer to perform its obligations under the Issuer Documents.

(i) The Issuer has never been in default at any time, as to principal of or interest on any obligation which it has issued, including those whic h 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 Issuer to the Underwriter as to the truth of the statements therein contained.

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

(m) The Bonds will be paid from Net Special Tax Revenues (as defined in the Indenture) received by the Issuer and amounts held in certain funds and accounts established and pledged under the Indenture.

(n) The Special Tax may lawfully be levied in accordance with the rate and method of apportionment of the Special Tax relating to the District (the “ Rate and Method”), the Resolutions and Ordinance as described in the Preliminary Official Statement and the Final Official Statement, and, when le vied, will be secured by a lien on the property on which they are levied. 344
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(o) The Indenture creates a valid pledge of, and first lien upon the Net Special Tax Revenues deposited thereunder, and the amounts held in certain funds and accounts established and pledged under the Indenture, subject in all cases to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein.

(p) Except as disclosed in the Final Official Statement, in the last five years, neither the City, nor the District, nor any other entity for which the City Council is the legislative body, has failed to comply with any undertaking under Rule 15c2-12 in any material respect.

5. The Issuer covenants with the Underwriter that the Issuer will cooperate with the Underwriter (at the cost of the Underwriter), in qualifying the Bonds for offer and sale under the securities or Blue Sky laws of such jurisdictions of the United States as the Underwriter may reasonably request; pr ovided, 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 complianc e 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 delive r or cause to be delivered to the Underwriter the Bonds in definitive form duly executed and authenticated by the Trustee together with the other documents mentioned in Section 8 hereof; and the Underwriter will accept such delivery and pay the Purchase Pr ice of the Bonds by delivering to the Trustee for the account of the Issuer a check payable in federal funds or making a wire transfer in federal funds payable to the order of the Trustee.

The activities relating to the final execution and delivery of the Bonds and the Indenture and the payment therefor and the delivery of the certificates, opinions and other instruments as described in Section 8 of this Agreement shall occur at the offices of Orrick, Herrington & Sutcliffe, Los Angeles, California, as bon d counsel to the Issuer (“ Bond Counsel”). The payment for the Bonds and simultaneous delivery of the Bonds to the Underwriter is herein referred to as the “ Closing.” The Bonds will be delivered as fully registered Bonds initially in denominations of $5,0 00 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 com mittee 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 im posing federal income taxation upon revenues or other income of the general character to be derived by the Issuer or by any similar body under the Indenture or upon interest received on obligations of the general character of the Bonds, or of causing inter est on obligations of the general character of the Bonds, to be includable in gross 345
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income for purposes of federal income taxation, and such legislation, 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 Inde nture 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 U nited States shall have been rendered, the effect of which is that the Bonds, including any underlying obligations, or the Indenture, as the case may be, is not exempt from the registration, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or

(d) a stop order, ruling, regulation , 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 issuance, offering or sale of the Bonds, including any und erlying obligations, or the execution and delivery of the Indenture as contemplated hereby or by the Final Official Statement, is or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or

(e) any event shall have occurred or any information shall have become known to the Underwr iter which causes the Underwriter to reasonably believe that the Final Official Statement as then amended or supplemented includes an untrue 346
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statement of a material fact, or omits to state any material fact necessary to make the statements therein, in ligh t 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 hostil ities 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, th e 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 o f trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction, the effect of which on the financial markets of the United States is such as, in the reasonable judgment of t he 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 affec ts 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 States, 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, legislati ve body, regulatory body or other authority materially adversely affecting the tax status of the Issuer, its property, income or securities (or interest thereon), the validity or enforceability of the Special Tax or the ability of the Issuer to issue the B onds and levy the Special 347
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Tax as contemplated by the Indenture, the Rate and Method, the Resolution of Formation, the Ordinance and the Final Official Statement; or

(m) the entry of any order by a court of competent jurisdiction which enjoins or restrains the Issuer from issuing permits, licenses or entitlements within the District or which order, in the reasonable judgment of the Underwriter, otherwise materially and adversely affects development of the real property located in the District.

8. The oblig ation of the Underwriter to purchase the Bonds is subject (a) to the performance by the Issuer of its obligations to be performed by it hereunder at and prior to the Closing, (b) to the accuracy as of the date hereof and as of the time of the Closing of th e representations and warranties of the Issuer herein, and (c) to the following conditions, including the delivery by the Issuer of such documents as are enumerated herein in form and substance satisfactory to the Underwriter:

(a) At the time of Closing, (i) the Final Official Statement and the Issuer Documents shall be in full force and effect and shall not have been amended, modified or supplemented except as may have been agreed to by the Underwriter, and (ii) the Issuer shall have duly adopted and there shall be in full force and effect such resolutions and ordinances (including, but not limited to, the Resolutions and Ordinance) as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated hereby.

(b) Receipt of the Bonds, executed by the Issuer and authenticated by the Trustee, at or prior to the Closing. The terms of the Bonds, when delivered, shall in all instances be as described in Final Official Statement.

(c) At or prior to the Closing, the Underwriter shall receive the following documents in such number of counterparts as shall be mutually agreeable to the Underwriter and the Issuer:

(i) A final approving opinion of Bond Counsel dated the Closing Date in the form attached 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
BONDS” (except information in t he sections entitled “ – Special Tax” and “ – Rate and Method of Apportionment” as to which no 348
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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 o ther documents, insofar as such statements expressly summarize certain provisions of the Indenture and Bond Counsel’s final opinion are accurate in all material respects;

(B) this Agreement and the District Continuing Disclosure Agreement have been duly executed and delivered by, and constitute valid and binding obligations of, the Issuer, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting enforcement of creditors’ rights in general and to the application of equitable principles if equitable remedies are sought; and

(C) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended.

(iii) An opinion of Stradling Yocca Carlson & Rauth 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 t he 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 State ment 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 St atement 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 o mits 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 property records of the County of San Bernardino of the Notice of Special Tax Lien, in the form required by the Act.

(viii) A certificate of David Taussig and Associates, Inc. doing business as DTA, Newport Beach, Calif ornia (“ Special Tax Consultant ”), in form and substance as set forth in Exhibit B hereto, dated as of the Closing Date.

(ix) A certificate of the Issuer, in form and substance as set forth in Exhibit C hereto, dated as of the Closing Date.

(x) Evidence that Federal Form 8038 has been executed by the Issuer and will be filed with the Internal Revenue Service.

(xi) Executed copies of the Issuer Documents.

(xii) A non-arbitrage certificate executed by the Issuer in form and substance satisfactory to Bond Counsel.

(xiii) An opinion, dated the Closing Date and addressed to the Underwriter, of the City Attorney, as counsel to the Issuer, to the effect that:

(A) the Issuer is duly organized and validly existing as a community facilities district under and by virtue of the Constitution and laws of the State (including the Act);

(B) the City Council of the City, acting as legislative body of the Issuer, has the full legal right, power and authority to adopt the Resolutions and Ordinance;

(C) the Resolutions and Ordinance were duly adopted at meetings of the City Council, acting as legislative body of the Issuer which were called and held under law and with all public notice required by law and at which a quorum was present and acting throughout, and t he 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 c ourt, regulatory agency, public board or body is pending with respect to which the Issuer has been served with process or threatened, in any way affecting the existence of the City, the Issuer or the titles of the Issuer’s officials to their 350
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respective of fices, or seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds or the application of the proceeds thereof in accordance with the Indenture, or the collection or application of the Special Tax to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Issuer Documents or any action of the Issuer contemplated by any of said documents, or in any way contesting the completeness or accuracy of the Preliminary O fficial Statement or of the Final Official Statement or the powers of the Issuer or its authority with respect to the Bonds, the Issuer Documents or any action on the part of the Issuer contemplated by any of said documents, wherein an unfavorable decision , ruling, or finding could materially adversely affect the validity or enforceability of the Bonds or the Issuer Documents;

(E) the execution and delivery of the Bonds and the Issuer Documents, and compliance with the provisions of each, will not conflict with or constitute a breach of or default under any loan agreement, note, ordinance, resolution, indenture, contract, agreement or other instrument of which the Issuer is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the ability of the Issuer to perform its obligations under the Bonds or the Issuer Documents; and

(F) all approvals, consents, authorization, elections and orders of or filings or registrations with any governmental authority, boa rd, 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 bee n 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 certificate of CSG Advisors, Inc., the City’s municipal advisor (the “Municipal Advisor ”), in the form and substance attached hereto as Exhibit F.

(xvii) (i) A Letter of Representations from Lennar Homes of California, LLC, a California limited liability company (the “ Developer”) addressed to the District and the Underwriter in connection with the printing of the Preliminary Official Statement dated the date of the Preliminary Official 351
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Statement, in the form attached hereto as Exhibit G-1, and (ii) a Letter of Representations from AG EHC II (LEN) CA2, L.P., a Delaware limited partnership (the “ Land Bank ”) addressed to the District and the Underwriter in connection with the printing of the Preliminary Official Statement dated the date of the Preliminary Official Statement, in the form attached hereto as Exhibit G-2.

(xviii) A Closing Certificate from the Developer, dated the Closing Date, in the form attached hereto as Exhibit H-1, and a Closing Certificate from the Land Bank, in the form of attached hereto as Exhibit H-2.

(xix) [The Continuing Disclosure Certificate dated the Closing Date (the “Developer Continuing Disclosure Certificate”), executed and delivered by the Developer, substantially in the form attached as A ppendix H to the Official Statement.]

(xx) (i) An opinion of counsel to the Developer, addressed to the Underwriter and the District, dated the date of the Closing, to the effect that the Developer Continuing Disclosure Certificate has been duly authorize d, executed and delivered by the Developer , and otherwise in form and substance acceptable to the Underwriter and Bond Counsel , and (ii) 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;

(xxi) A certificate dated the Closing Date from Kitt y 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 awar e of any event or act which occurred since the Date of Value which, in its opinion, would materially and adversely affect the conclusions as to the market value of the appraised property in the Community Facilities District ; (iv) the Appraiser consents to the reproduction of the Appraisal Report as an appendix to the Preliminary Official Statement and the final Official Statement, each with respect to the Bonds, and to the references to the Appraiser and the Appraisal Report made in the Preliminary Official Statement and the Official Statement ; (v) the Appraisal Report complies with the Appraisal Standards for Land -Secured Financings issued by the California Debt and Investment Advisory Commission dated July, 2004 ; (vi) a true and correct copy of the Apprais al 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 u ntrue statement of a material fact or omits to state a 352
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material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;

(xxii) A certificate dated the Closing Date from Empire Econo mics, Inc. addressed to the District and the Underwriter to the effect that the statements in the Preliminary Official Statement and the Official Statement provided by Empire Economics, Inc. and all information supplied by it for use in the Preliminary Off icial Statement and the Official Statement were as of their respective dates and are as of the Closing Date true and correct, and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the stateme nts therein, in light of the circumstances under which they were made, not misleading;

(xxiii) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter, Disclosure Counsel or Bond Counsel may reasonably request to evidence compliance by the Issuer with legal requirements, the truth and accuracy, as of the time of Closing, of the respective representations of the Issuer herein contained and the due performance or satisfaction by the Issuer at or prior to such time of all agreements then to be performed and all conditions then to be satisfied.

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

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

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

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

The Underwriter shall pay the California Debt Investment and Advisory Commissi on fee, all advertising expenses in connection with the public offering of the Bonds, and all other expenses incurred by it in connection with its public offering and distribution of the Bonds, including fees and expenses of its counsel, meals, transportation, and lodging (but not entertainment expenses), and fees 353
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and disbursements in connection with the qualification of the Bonds for sale under the securities or “Blue Sky” laws of the various jurisdictions and the preparation of “Blue Sky” memoranda.

12. Any notice or other communication to be given to the Issuer under this Agreement may be given by delivering the same in writing at its address set forth above, and any notice or other communication to be given to the Underwriter under this Agreement may be given by delivering the same in writing to the following: Stifel, Nicolaus & Company, Incorporated, 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 Bonds, shall acquire or have any right hereunder or by virtue hereof. This Agreement supersedes and repla ces all prior negotiations, agreements and understanding among the parties hereto in relation to the sale of the Bonds by the Issuer.

14. Establishment of Issue Price.

(a) The Underwriter agrees to assist the Issuer in establishing the issue price of the Bonds and shall execute and deliver to the Issuer at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit I, with such modifications a s 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 t o be taken by Issuer under this section to establish the issue price of the Bonds may be taken on behalf of the District by the Municipal Advisor and any notice or report to be provided to the District may be provided to the District’s Municipal Advisor. (b) Except as otherwise set forth in Exhibit A attached hereto, the Issuer will treat the first price at which 10% of each maturity of the Bonds (the “ 10% test”). 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 th e 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Issuer the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the public , provided that the Underwriter’s reporting obligation after the date of the Closing ma y be at reasonable periodic intervals or otherwise upon request of the Issuer or Bond Counsel. For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. For clarity, and notwithstanding any other condition to Closing set forth in this Agreement, the sale of 10% of each maturity of the Bonds to the public prior to the Closing Date shall not be a condition to Closing. (c) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Agreement at the offering price or prices (the “ initial offering price ”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, exce pt 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 whi ch the Issuer and the Underwriter agree that the restrictions set forth in the 354
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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 mat urity (the “ hold-the-offering- price rule”). So long as the hold -the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter will advise the Issuer promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. (d) The Underwriter confirms that:
(i) any selling group agreement and any third -party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each 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 advised by the dealer or broker -dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(ii) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third -party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker -dealer that is a party to such third-party distribution agreement to (A) report the prices at which it s ells 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 355
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Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that the reporting obligation after the date of the Closing may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold -the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (e) The Issuer acknowledges that, in making the representation s set forth in this subsection, the Underwriter wi ll 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 t he Bonds, including, but not limited to, its agreement to comply with the hold -the-offering-price rule, if applicable to the Bonds , as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker -dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not li mited 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 pricing wires. The Issuer further acknowledges that the Underwriter shall not be lia ble for the failure of any dealer who is a member of a selling group, or of any broker -dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold -the-offering- price rule if applicable to the Bonds.
(f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.

Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party, (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public),
(iii) a purchaser of any of the Bonds is a “ related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, a s applicable, if one 356
-18-
entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and

(iv) “sale date” means the date of execution of this Agreement by all parties.

15. This Agreement shall become effective and binding 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 provi sion 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 counterpar ts, all of which taken together will constitute one agreement, 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 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 its 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]
357

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. 112
(THE GARDENS PHASE ONE)

By:

Authorized Officer

Time of Execution: _____ a.m./p.m. California Time
358
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.

359
A-2

REDEMPTION TERMS

Optional Redemption. The Bonds maturing on and after September 1, 20__ shall be subject to optional redemption, in whole, or in part in Authorized Denominations, on any date on or after September 1, 20__, from any source of available funds, at the following respective Redemption Prices (expressed as percentages of the princip al 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 pr incipal 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, 360
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)

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 Sept ember 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)
361
B-1

EXHIBIT B

$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) 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 M ethod of Apportionment of Special Tax (the “Rate and Method ”) set forth in Appendix A to the Preliminary Official Statement dated [POS Date] (the “Preliminary Official Statement ”) and the Official Statement dated [Pricing Date] (the “ Official Statement ”) relating to the above -referenced bonds (the “ Bonds”) being issued by City of Fontana Community Facilities District No. 112 (The Gardens Phase One ) (the “ Issuer”). Based upon the Special Tax Consultant’s review of the Preliminary Official Statement, the Of ficial Statement and such other documents as it deems relevant in the circumstances, the Special Tax Consultant hereby certifies that the Special Tax, if collected in the maximum amounts permitted under the Rate and Method, would generate at least 110% of the gross annual debt service on the Bonds plus estimated Administrative Expenses, provided that the annual debt service figures on the attached debt service schedule, which were relied upon by Special Tax Consultant, are substantially true and correct.

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

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

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

By:

362

C-1

EXHIBIT C

$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) 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. 112 (The Gardens Phase One ) (the “ Issuer”), a community faci lities district duly organized and existing under the laws of the State of California (the “State”) and that as such, I am authorized to execute this Certificate on behalf of the Issuer in connection with the issuance of the above-referenced bonds (the “Bonds”).

I hereby further certify on behalf of the Issuer that:

(A) to my best knowledge, after reasonable inquiry, no litigation is pending with respect to which the Issuer has been served with process or threatened (1) to restrain or enjoin the issuance of any of the Bonds or the collection of Net Special Tax Revenues pledged under the Indenture; (2) in any way contesting or affecting the authority for the issuance of the Bonds or the validity or enforceability of the Bonds or the Issuer Documents; or (3 ) in any way contesting the existence or powers of the Issuer;

(B) the representations and warranties made by the Issuer in the Bond Purchase Agreement dated [Pricing Date] , between the Issuer and Stifel, Nicolaus & Company, Incorporated (the “ Agreement”) are true and correct in all material respects on the Closing Date, with the same effect as if made on the Closing Date;

(C) no event affecting the Issuer has occurred since the date of the Final Official Statement that, as of the Closing Date, would cau se any statement or information contained in the Final Official Statement under the caption “ABSENCE OF LITIGATION” to be incorrect or incomplete in any material respect or would cause the information contained under such caption in the Final Official Stat ement to contain an untrue statement of a material fact or omit to state a material fact necessary in order to make such statements therein, in the light of the circumstances under which they were made, not misleading;

(D) as of the date hereof, the Issuer Documents are in full force and effect in accordance with their terms and have not been amended, modified or supplemented except in such case as may have been agreed to by the Underwriter; and

363

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(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 WHERE OF, the undersigned has executed this certificate as of the date herein below set forth.

Dated: [Closing Date]

CITY OF FONTANA COMMUNITY
FACILITIES DISTRICT NO. 112
(THE GARDENS PHASE ONE)

By:

Name:

Title:

364

D-1

EXHIBIT D

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) 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. 112 (The Gardens Phase One ) (the “ Issuer”), a community facilities district duly organized and existing under the laws of the State of California (the “State”) and that as such, I am authorized to execute this Certificate on behalf of the Issuer in connection with the issuance of the above-referenced bonds (the “Bonds”).

I further hereby certify on behalf of the Issuer as follows:

(1) This Certificate is delivered in connection with the offering and sale of the Bonds in order to enable the underwriter of the Bonds to comply with Rule 15c2 -12 of the Securities Exchange Commission (“ Rule 15c2-12”).

(2) In connection with the offering and sale of the Bonds, there has been prepared a Preliminary Official Statement, setting forth information concerning the Bonds, the City and the Issuer (the “ Preliminary Official Statement”).

(3) As used herein, “Permitted Omissions” shall mean the offering price(s), interest rate(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all with respect to the Bonds.

(4) The Preliminary Official Statement is, exce pt for the Permitted 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. 112 (THE

GARDENS PHASE ONE)

By:

Name:

Title:

365

E-1

EXHIBIT E

$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) 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 November 1 , 2024 (the “ Indenture”), between City of Fontana Community Facilities District No. 112 (The Gardens Phase One ) (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 cer tify the following facts on behalf of the Trustee:

(1) The Trustee is duly organized and existing as a national banking association under the laws of the United States of America, having the full power and authority to enter into and perform its duties un der 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 authori zed 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 threaten ed against the Trustee which in the reasonable judgment of the Trustee would affect the existence of the Trustee or in any way contesting or affecting the validity or enforceability of the Indenture or the District Continuing Disclosure Agreement or contesting the powers of the Trustee or its authority to enter into and perform its obligation under the Indenture or the District Continuing Disclosure Agreement.

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

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

NATIONAL ASSOCIATION,
as Trustee

By
Authorized Officer
366

F-1

EXHIBIT F

$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) 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. 112 (The Gardens Phase One) (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

367

G-1

EXHIBIT G-1

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) SPECIAL TAX BONDS, SERIES 2024

LETTER OF REPRESENTATIONS OF

LENNAR HOMES OF CALIFORNIA, LLC

[POS Date]

City of Fontana Community Facilities
District No. 112 (The Gardens Phase One)
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. 112 (The Gardens Phase One ) 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 of Lennar Homes of California, LLC (the “Letter of Representations”) is delivered pursuant to and in satisfaction of Section 8(c)(xvii) of the Bond Purchase Agreement.

Capitalized terms used herein and not otherw ise defined have the meanings ascribed to them in the Bond Purchase Agreement.

The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representati ve of Lennar Homes of California, LLC, a California limited liability company (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 standin g under the laws of the State of California and has all requisite right, power and authority (i) to execute and deliver this Letter of Representations, and (ii) to develop its property in the City of Fontana Community Facilities District No. 112 (The Garde ns Phase One ) (the “ Community Facilities District”) as described in the Preliminary Official Statement.

2. As set forth in the Preliminary Official Statement, title to a certain portion of the property within the Community Facilities District is held in the name of the Developer or is owned by, and is under option to the Developer to acquire from, AG EHC II (LEN) CA2, L.P., a Delaware limited partnership (the “Land Bank ”) (all such property is referred to herein as 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 with respect to the Land Bank , 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, 368

G-2

except such subcontracts, consultant agreements and similar agreements for land development activities associated with the Developer’s development plan as are entered into in the ordinary course of business.

3. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, 1 is pending against any current Relevant Entity2 (with proper service of process to such Relevant Entity having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against the Developer, or any such Relevant Entity (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 estab lished 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, [(d) to materially adversely affect the ability of the Developer to perform its obligations under the Developer Continuing Disclosure Certificate (as defined below) ], or ( e) 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 Officia l Statement, to the Actual Knowledge of the Undersigned, the information contained therein solely with respect to the Developer, its Relevant Entities, 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 Relevant Entities (including, if material to the Developer’s development plan or the Developer’s financing plan, loans of such Relevant E ntities) [and the Developer’s compliance with its continuing disclosure undertakings] as set forth under the sections

1 “Actual Knowledge of the Undersigned ” means the actual (as opposed to constructive) knowledge that the individual signing on behalf of the Developer currently has as of the date of this Letter of Representations or has obtained through (i) interviews with such current officers and responsible employees of the Developer and its Relevant En tities as the undersigned has determined are reasonably likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Letter of Representations, and/or (ii) review of documents that were reasonably available to the undersigned and which the undersigned has reasonably deemed necessary for the undersigned to obtain knowledge of the matters set forth in this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Developer’s current business and operations. Individuals who are no longer employees of the Developer and its Relevant Entities have not been contacted.

2 “Relevant Entity” means, with respect to the Developer, any other Person (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Developer, and (ii) for whom information, including financial information or operating data, concerning such Person is material to potential investors in their evaluation of the Community Facilities District and investment decision regarding the Bonds (i.e., information relevant to (a) the Developer’s development plans with respect to the Property and ability to pay its Special 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 af fect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay its Special Tax on t he Property (to the extent the responsibility of the Developer). “ Person” means an individual, a corporation, a partnershi p, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or politic al 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. The Land Bank is not a Relevant Entity of the Developer

369

G-3

of the Preliminary Official Statement captioned “INTRODUCTION – The District” (the first three paragraphs only), “THE COMMUNITY FACILITIES DISTRICT – General Information Regarding the District” (the second through sixth paragraph thereof only) , “PROPERTY OWNERSHIP AND THE DEVELOPMENT” [and “CONTINUING DISCLOSURE – The Developer”] (but in all cases under all captions excluding therefrom (i) information regarding the Appraisal Report (as defined herein), market value ratios and annual special tax ratios, and (ii) information which is identified as having been provided by a source ot her 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 Relevant Entities, that are secured by an interest in the Property. Neither the Developer nor, to the Actual Knowledge of the Undersigned, any of its Relevant Entities 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 whic h default is reasonably likely to materially and adversely affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special 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, other than as disclosed in the Preliminary Official Statement, the Developer is not aware that any of the Property has a current liability with respect to the presence of a substance presently classified as hazardous under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 or applicable California law or is adversely affected by the presence of endangered or threatened species or habitat for endangered or threatened species.

7. The Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Developer and its Relevant Entities which it controls will not bring any action, suit, proceeding, inqu iry 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 Commun ity Facilities District levying Special Tax within the Community Facilities District, to invalidate the Community Facilities District or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 3 115.5 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 A pportionment 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, a Relevant Entity, the City and/or the Community Facilities District or to which the Developer or a Relevant Entity is a party or beneficiary.

8. The Developer consents to the issuance of the Bonds. The Developer acknowledges and agrees that the proceeds of the Bonds will be used as described in the Preliminary Official Statement.
370

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

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

13. To the Actual Knowledge of the Undersigned, Relevant Entities of the Developer are able to pay their bills as they become due and no legal p roceedings are pending against any Relevant Entity of the Developer (with proper service of process having been accomplished) or to the Actual Knowledge of the Undersigned, threatened in writing in which the Relevant Entities of the Developer may be adjudicated as bankrupt or discharged from any or all of their debts or obligations, or granted an extension of time to pay their debt or obligations, or be allowed to reorganize or readjust their debts or obligations, or be subject to control or supervision of the Federal Deposit Insurance Corporation which is reasonably likely to have a materially adverse impact on the ability of the Developer to develop the Property as described in the Preliminary Official Statement, [to perform its obligations under the Developer Continuing Disclosure Certificate,] 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.

14. The Developer has been developing or has been involved in the development of numerous projects over an extended period of time. It is likely that the Developer and its Relevant Entities have been delinquent at one time or another in the payment of ad valorem property t axes, special assessments or special taxes. However, to the Actual Knowledge of the Undersigned, during the last five years, neither the Developer nor any current Relevant Entity has, during the period of its ownership, been delinquent to any material exte nt in the payment of any ad valorem property tax, special assessment or special tax on property included within the boundaries of a community facilities district or an assessment district in California that (a) caused a draw on a reserve fund 371

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relating to s uch assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the delinquent Developer or such Relevant Entity in a court of law.

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

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

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

18. An appraisal of the taxable properties within the Community Facilities District, dated [September 20], 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 [August 25] , 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 yellow or circled in Exhibit A attached hereto, was true and correct in all material respects as of the Date of Value.

19. Solely as to the limited information described in the sections of the Preliminary Official Statement indicated in Paragraph 4 herein (and subject to the limitations and exclusions set forth in Paragraph 4), the Developer agrees to indemnify and hold ha rmless, 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, o r 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 e xpense 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 372

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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 th e statements made by the Developer contained therein, in light of the circumstances under which they were made not misleading. This indemnity provision shall not be construed as a limitation on any other liability which the Developer may otherwise have to any Indemnified Party, provided that in no event shall the Developer be obligated for double indemnification, or for the negligence or willful misconduct of an Indemnified Party.

If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Indemnified Party in respect of which indemnification may be sought pursuant to the above paragraph, such Indemnified Party shall promptly notify the Developer in writing; provided that the failure to notify the Developer shall not relieve it from any liability that it may have hereunder except to the extent that it has been materially prejudiced by such failure; and provided, further, that the failure to notify the Developer shall not r elieve 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 counse l related to such proceeding, as incurred. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Developer an d the Indemnified Party shall have mutually agreed to the contrary; (ii) the Developer has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Party; (iii) the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Developer such that a material conflict of interest exists for such counsel; or (iv) the named parties in any such proceeding (including any impleaded parties) include the Developer and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. It is understood and agreed that the Developer shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Parties, and that all such fees and expenses, to t he extent reasonable, shall be paid or reimbursed as they are incurred.

Any such separate firm shall be designated in writing by such Indemnified Parties. The Developer shall not be liable for any settlement of any proceeding effected without its written c onsent, 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 abo ve. 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 Dev eloper. 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 b y such Indemnified Party, unless such settlement (x) includes an unconditional release of such Indemnified Party, in form and substance reasonably satisfactory to such Indemnified Party, from all liability on claims that are the subject matter of such proc eeding, and (y) does not 373

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include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party.

20. If between the date hereof and the Closing Date any event relating to or affecting the Developer, its Relevant Entities, 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 Relevant Entiti es (including, if material to the Developer’s development plan or the Developer’s financing plan, loans of such Relevant Entities) shall occur of which the undersigned has actual knowledge which would cause the information under the sections of the Prelimi nary Official Statement indicated in Paragraph 4 hereof (and subject to the limitations and exclusions contained in Paragraph 4 hereof), to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Developer shall notify the City, the Community Facilities District and the Underwriter and if in the opinion of counsel to the City or the Underwriter such event req uires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Developer shall reasonably cooperate with the City and the Community Facilities District in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance satisfactory to counsel to the City, the Community Facilities District and to the Underwriter.

21. The Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached as Exhibit H-1 to the Bond Purchase Agreement. If any event related to or affecting the Developer, its Relevant Entities, or the ownership, development, or sale of the Property occurs, as a result of which it is necessary to modify the Closing Certificate, the Developer agrees to deliver a new Closing Certificate revised to reflect such event.

22. On behalf of the Developer, I have reviewed the contents of this Letter of Representations and have discussed with counsel to the Developer the meaning of the contents of this Letter of Representations. The Developer acknowledges and understands that a variety of state and federal securities laws, including, but not limited to the Securities Act of 1933, as amended, and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, as amended, may apply to the Developer and that under some circumstances, certification as to the matters set forth in this Letter of Representations, without additional disclosures or other action, may not fully discharge all duties and obligations of the Developer under such securities laws.

[Remainder of Page Intentionally Left Blank; Signature on Following Page]

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

LENNAR HOMES OF CALIFORNIA, LLC,
a California limited liability company

By:

[SIGNATURE PAGE TO LETTER OF REPRESENTATIONS OF
LENNAR HOMES OF CALIFORNIA, LLC]
375

G-1-9

EXHIBIT A
TO

LETTER OF REPRESENTATIONS OF

LENNAR HOMES OF CALIFORNIA, LLC

DEVELOPER PROVIDED INFORMATION IN APPRAISAL REPORT

See attached.

376

G-2-1
EXHIBIT G-2

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) SPECIAL TAX BONDS, SERIES 2024

LETTER OF REPRESENTATIONS OF
AG EHC II (LEN) CA2, L.P.

[POS Date]

City of Fontana Community Facilities
District No. 112 (The Gardens Phase One)
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. 112 (The Gardens Phase One ) 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 of AG EHC II (LEN) CA2, L.P. (the “ Letter of Representations ”) is delivered pursuant to and in satisfaction of Section 8(c)(xvii) of the Bond Purchase Agreement.

Capitalized terms used herein and not otherwise defined have the meanings ascr ibed to them in the Bond Purchase Agreement.

The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of AG EHC II (LEN) CA2, L.P., a Delaware limited partnership (the “Land Bank”), and the undersigned, on behalf of the Land Bank, further certifies as follows:

1. The Land Bank is a corporation duly formed, validly existing and in good standing under the laws of the State of California and has all requisite right, power and authority (i) to execute and deliver this Letter of Representations, and (ii) to develop its property in t he City of Fontana Community Facilities District No. 112 (The Gardens Phase One ) (the “ Community Facilities District”) as described in the Preliminary Official Statement.

2. As set forth in the Preliminary Official Statement, title to a certain portion of th e property within the Community Facilities District is held in the name of the Land Bank (the “Property”). The undersigned, on behalf of the Land Bank, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement with respect to the Land Bank, the Land Bank is the party responsible for the development of the property. 377

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3. As of the date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned,1 the information contained therein solely with respect to the Land Bank, the ownership, development, and sale of the Property , and the contractual arrangements relating thereto in the section of the Preliminary Official Statement captioned “PROPERTY OWNERSHIP AND THE DEVELOPMENT – Option Agreement and Construction Agreement ” 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.

4. If between the date hereof and the Closing Date any event relating to or affecting the Land Bank or the Property shall occur of which the undersigned has actual knowledge which would cause the information under the sections of the Preliminary Official Statement indicated in Paragraph 3 hereof to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstance s under which they were made, not misleading, the Land Bank shall notify the City, the Community Facilities District and the Underwriter and if in the opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Land Bank 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.

5. The Land Bank agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially th e form attached as Exhibit H-2 to the Bond Purchase Agreement. If any event related to or affecting the Land Bank, the ownership, development, and sale of the Property , or the contractual arrangements relating to the Property, as a result of which it is ne cessary to modify the Closing Certificate, the Land Bank agrees to deliver a new Closing Certificate revised to reflect such event.

6. On behalf of the Land Bank , I have reviewed the contents of this Letter of Representations and have discussed with counsel to the Land Bank the meaning of the contents of this Letter of Representations. The Land Bank 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 Land Bank and that under some circumstances, certification as to the matters set forth in this Letter of Representations, without additional disclosures or other actio n, may not fully discharge all duties and obligations of the Land Bank under such securities laws.

[Remainder of Page Intentionally Left Blank; Signature on Following Page]

1 “Actual Knowledge of the Undersigned ” means the actual (as opposed to constructive) knowledge that the individual signing on behalf of the Land Bank currently has as of the date of this Letter of Representations or has obtained through (i) interviews with such current officers and responsible employees of the Land Bank 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 under signed to obtain knowledge of the matters set forth in this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the or dinary course of the Land Bank ’s current business and operations. Individuals who are no longer employees of the Land Bank have not been contacted.

378

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

AG EHC II (LEN) CA2, L.P.,
a Delaware limited partnership

By:

[SIGNATURE PAGE TO LETTER OF REPRESENTATIONS OF
AG EHC II (LEN) CA2, L.P.]
379

H-1-1
EXHIBIT H-1
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) SPECIAL TAX BONDS, SERIES 2024

CLOSING CERTIFICATE OF
LENNAR HOMES OF CALIFORNIA, INC.

[Closing Date]
City of Fontana Community Facilities
District No. 112 (The Gardens Phase One)
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 of Lennar Homes of California, LLC (the “Closing Certificate”) is delivered pursuant to Section 8(c)(xviii) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Letter of Representations of Lennar Homes of California, LLC , dated [POS Date] (the “ Letter of Representations ”), delivered by Lennar Homes of California, LLC, a California limited liability company (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 Relevant Entities , the proposed development of the Property, ownership of the Property, the Developer’s development plan, t he Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the 380

H-1-2
Developer or any Relevant Entities (including, if material to the Developer’s development plan or the Developer’s financing plan, loans of its Relevant Entities), which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make such statements and information contained in the Official Statement not misleading in any material respect.

3. For the period through 25 days after the “ End of the Underwriting Period ” as defined in the Bond Purchase Agreement (provided the Developer may assume the End of the Underwriting Period is the Closing Date (as defined in the Bond Purchase Agreement), unless it receives written notice from the Underwriter that the End of the Underwriting Period is later than the Closing Date), if any event relating to or affecting the Developer, its Relevant Entities, 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 Relevant Entities (including, if material to the Developer’s development plan or the Developer’s financing plan, loans of its Relevant Entities ) shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City or the Community Facilities District, to amend or supplement the Official Statement in order to make the information under the sections of the Official Statement indicated in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations) not misleading in the light of the circumstances under which they were made, the Developer shall reasonably cooperate with the City, the Community Facilities District and the Underwriter in the preparation and publication of a supplement or amendment to the information under the sections of the Official Statement indicated in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations) , in form and substance satisfactory to the Underwriter and counsel to the City and the Community Facilities District which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a m aterial fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

4. [The Developer has duly authorized the execution and delivery of the Developer Continuing Disclosure Certificat e and is duly authorized to perform the obligation on its part to be performed thereunder, and the Developer Continuing Disclosure Certificate constitutes the legal, valid and binding obligation of the Developer, enforceable against it in accordance with i ts terms, subject to bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent conveyance and other similar laws affecting the rights of creditors and certain equitable, legal or statutory principles affecting enforcement of contractual r ights generally, regardless of whether such enforcement is considered in a proceeding of law or equity.]

[Remainder of Page Intentionally Left Blank; Signature Page Follows] 381

H-1-3

The undersigned has executed this Closing Certificate solely in his or her cap acity 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.

LENNAR HOMES OF CALIFORNIA, LLC,
a California limited liability company

By:

[SIGNATURE PAGE TO CLOSING CERTIFICATE OF
LENNAR HOMES OF CALIFORNIA, LLC]

382

H-2-1
EXHIBIT H-2
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) SPECIAL TAX BONDS, SERIES 2024

CLOSING CERTIFICATE OF
AG EHC II (LEN) CA2, L.P.

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 of AG EHC II (LEN) CA2, L.P. (the “Closing Certificate”) is delivered pursuant to Section 8(c)(xviii) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Letter of Representations of AG EHC II (LEN) CA2, L.P. , dated [POS Date] (the “Letter of Representations”), delivered by AG EHC II (LEN) CA2, L.P., a Delaware limited partnership (the “Land Bank”).

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

1. The Land Bank 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 Land Bank, the ownership, development, and sale of the Property, or the contractual arrangements relating to the Property, 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. 383

H-2-2

3. For the period through 25 days after the “ End of t he Underwriting Period ” as defined in the Bond Purchase Agreement (provided the Land Bank 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 rel ating to or affecting the Land Bank, the ownership, development, or sale of the Property, or the contractual arrangements relating to the Property, shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City o r 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 3 of the Letter of Representations not misleading in the light of the ci rcumstances under which they were made, the Land Bank 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 3 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 th at 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] 384

H-2-3

The undersigned has executed this Closing Certificate solely in his or her capacity as an authorized officer or representative of the Land Bank 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 Land Bank AG EHC II (LEN) CA2, L.P.,
a Delaware limited partnership

By:

[SIGNATURE PAGE TO CLOSING CERTIFICATE OF
AG EHC II (LEN) CA2, L.P.]

385

I-1

EXHIBIT I

FORM OF ISSUE PRICE CERTIFICATION
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) 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 between Stifel, as the Underwriter (as defined below) , 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 price 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 selling 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 Matu rities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date (which Sale Date is [Pricing Date]), or (ii) the date on which Stifel has sold at least 10% of 386

I-2
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 Di strict No. 112 (The Highlands Phase One).
(e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.

The term “related party” for purposes of this certificate generally mean s 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 directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a 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]
387

I-3

SCHEDULE A

SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING PRICES

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

388

I-A

SCHEDULE B

PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)

389
Stradling Yocca Carlson & Rauth
Draft dated October 7, 2024
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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.
$30,760,000

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) 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. 112 (The Gardens Phase One) Special Tax Bonds, Series 2024 (the “Bonds” ) are being issued and delivered by the City of Fontana Community Fac ilities District No. 112 (The Gardens Phase One) (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, Na tional Association, as Trustee. The Bonds are special, limited obligations of the District and are payable solely from Net Special Tax Revenues (as defined herein), and the other assets pledged therefor under the Indenture, all as further described herein. 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, 2025. 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. Se e “THE BONDS — General Provisions” and Appendix 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 ADDITIONA L 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 s et forth herein, in evaluating the investment quality of the Bonds.

This cover page contains certain information for general reference only. It is not a summary of this issue. Investors are 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 C ounsel, 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. 390

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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. _____†

C Priced to the optional redemption date of September 1, 20__ at _____. † 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 Global Services. This data is not intended to c reate 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 person has been authorized by the City, the District, the Trustee or the Underwriter to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authoriz ed 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 circumsta nces, 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 b y 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 a re not limited to certain statements contained in the information under the captions “THE COMMUNITY FACILITIES DISTRICT” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
The achievement of certain results or other expectations contained in such forward -looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as set forth in the District’s Continuing Disclosure Agreement, a form of which is attached hereto as Appendix G, neither the District nor the City plans to issue any updates or revisions to the forward-looking statements set forth in this Official Statement. See “CONTINUING DISCLOSURE.” A wide variety of other information, including financial information, concerning the City, is available from publications and websites of the City and others. No such information is a part of or incorporated into this Official Statement.

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

OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE

OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWIS E 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. 393

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 ................................................................................................................................ 4 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 ......................................................................................................................................... 21 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 ....................................................................................................................... 26 Property Values ............................................................................................................................................ 28 Value-to-Lien Ratios .................................................................................................................................... 29 Delinquency History .................................................................................................................................... 36 PROPERTY OWNERSHIP AND THE DEVELOPMENT ............................................................................... 36 Lennar Homes .............................................................................................................................................. 37 Development Plan ........................................................................................................................................ 37 Option Agreement ........................................................................................................................................ 41 Financing Plan ............................................................................................................................................. 41 SPECIAL RISK FACTORS ............................................................................................................................... 42 Risks of Real Estate Secured Investments Generally – Declines in Value .................................................. 43 Levy of the Special Tax ............................................................................................................................... 43 Collection of the Special Tax ....................................................................................................................... 44 Failure to Develop Properties ...................................................................................................................... 44 Concentration of Property Ownership ......................................................................................................... 45 Exempt Properties ........................................................................................................................................ 46 Constitutional Limitations on Taxation and Appropriations ........................................................................ 47 Ballot Initiatives ........................................................................................................................................... 50 Maximum Special Tax ................................................................................................................................. 50 Payment of the Special Tax is Not a Personal Obligation of the Owners .................................................... 51 Disclosures to Future Purchasers ................................................................................................................. 51 Parity Taxes and Special Assessments ......................................................................................................... 51 394

TABLE OF CONTENTS
(continued)
Page

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Depletion of Reserve Fund .......................................................................................................................... 51 Bankruptcy and Legal Delays ...................................................................................................................... 52 FDIC/Federal Government Interests In Properties ....................................................................................... 52 Geologic, Topographic and Climatic Conditions ......................................................................................... 53 Hazardous Substances .................................................................................................................................. 54 No Acceleration Provision ........................................................................................................................... 55 Bonds Are Limited Obligations ................................................................................................................... 55 Loss of Tax Exemption ................................................................................................................................ 55 Potential Early Redemption of Bonds from Special Tax Prepayments ........................................................ 55 Cybersecurity ............................................................................................................................................... 55 Impact of Economic Conditions on the Development in the District .......................................................... 56 CONTINUING DISCLOSURE .......................................................................................................................... 56 TAX MATTERS................................................................................................................................................. 57 ABSENCE OF LITIGATION ............................................................................................................................ 59 ABSENCE OF RATINGS .................................................................................................................................. 59 CERTAIN LEGAL MATTERS ......................................................................................................................... 59 UNDERWRITING ............................................................................................................................................. 60 FINANCIAL INTERESTS ................................................................................................................................. 60 MUNICIPAL ADVISOR ................................................................................................................................... 60 ADDITIONAL INFORMATION ....................................................................................................................... 60

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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[INSERT AREA MAP]

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$30,760,000

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) 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 Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Bonds to potential investors is made only by means of the entire Official Statement.

The purpose of this Official Statement, which includes the cover page, the table of contents and the attached appendices, is to provide certain information concerning the issuance of the City of Fontana Community Facilities District No. 112 (The Gardens Phase One) Special Tax Bonds, Series 2024 (the “Bonds”) by the City of Fontana Community Facilities District No. 112 (The Gardens Phase One) (the “District”), in the aggregate principal amount set forth on the front cover page. The pr oceeds 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 qu alified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described herein. A full review should be made of the entire Official Statement.

The sale and delivery of the Bonds to potential investors is made only by means of the entire Official Statement.

All capitalized terms used in this Official Statement and not defined shall have the meaning set forth in Appendix F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE ⎯ Definitions” herein.

The District
The District includes approximately 69.9 gross acres and is located in the northwestern portion of the City of Fontana (the “City”), approximately one mile east of Interstate 15 and along both sides of Cassava Drive, south of Duncan Canyon R oad and north of Casa Grande Avenue . T he property within the District is being developed by Lennar Homes of California, LLC, a California limited liability company (“Lennar Homes” or the “Developer”), into phase one of a residential community known as The Gardens, which is within the master - planned residential community known as The Arboretum. Phase one of The Gardens is expected to consist of 526 residential units across six neighborhoods known as “Dayflower,” “Blue Sage,” “Acacia,” “Silverberry,” “Wildrose,” and “Azalea.” The Gardens Phase One is encompassed by a portion of Tract Map 20362 and Tract Maps 20363 and 20364 along with subsequent condominium maps on Lot 5 and 6 of Tract 20362, all of which subdivide the property into 526 separate parcels.

 Preliminary, subject to change.
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Lennar Homes has acquired 496 of the 526 lots of the property within the District in phased takedowns from AG EHC II (LEN) CA 2, L.P., a Delaware limited partnership (the “Land Bank”) pursuant to the Option Agreement (as defined under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT —Option Agreement”), and has an option (but not an obligation) to acquire the remaining 30 lots from the Land Bank pursuant to the Option Agreement. The purchase price for the property within the District was $91,935,447 and the Land Bank took title to the property in December 2021. As of August 25, 2024, Lennar Homes had acquired 496 lots from the Land Bank within the District, with an additional 22 lots scheduled to be acquired October 14, 2024 and the final eight lots scheduled to be acquired December 14, 2024. There is no guarantee that Lennar Homes will acquire the remaining lots as planned. During the term of the Option Agreement, Lennar Homes is contractually obligated to pay the Special Tax levied on the property subject to such agreement. However, in the event the Option Agreement is terminated prior to Lennar Homes having acquired all of the lots thereunder, the Special Tax would continue to be levied on the property in the District owned by the Land Bank and Lennar Homes’ contractual obligation to pay the Special Taxes would terminate . See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
As of August 25, 2024, 366 residential units had been completed and conveyed to individual homeowners, Lennar Homes owned 14 completed model units (none of which were in escrow), 41 homes over 95% complete (39 of which were in escrow), 69 residential units under construction and less than 95% complete (42 of which were in escrow), and six finished lots (none of which were in escrow), and the Land Bank owned 13 homes under construction (none of which were in escrow) and 17 finished lots (none of which were in escrow). As of October 1, 2024, within the District, 396 residential units had been completed and conveyed to individual homeowners, and Lennar Homes owned 13 completed model units (two of which were in escrow), 81 residential units under construction (74 of which were in escrow), and six finished lots (none of which were in escrow), and the Land Bank owned 28 homes under construction (10 of which were in escrow) and 2 finished lots (none of which were in escrow). Sales contracts are subject to cancellation and, therefore, homes currently in escrow may not result in closed escrows with the prospective homebuyers. As of October 1, 2024, a total of 518 building permits were obtained within the District. Accordingly, if no additional building permits are obtained, 518 parcels will be classified as Developed Property and eight p arcels will be classified as Undeveloped Property for 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 which forms a community facilities district acts on behalf of such district as its legislative body. Subject to approval by two-thirds of the votes cast at an election and compliance with the other provisions of the Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness.

Pursuant to the Act, the City Council adopted the necessary resolutions stating its intent to establish the District, to authorize the levy of special taxes on taxable property within the boundaries of the District, and to have the District incur bonded indebtedness for the purpose of financing authorized facilities (the “Facilities”).

Following public hearings conducted pursuant to the provisions of the Act, the City Council adopted resolutions establishing the District and calling 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 April 25, 2023, at an election held pursuant to the Act, the then landowners who comprised the qualified voters of the District, Lennar Homes and the Land Bank, authorized the District to incur bonded indebtedness in the aggregate principal amount of not to exceed $36,000,000 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 “Rate and Method”).
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The Rate a nd Method provides for a Facilities Special Tax (as defined in the Rate and Method) (the “Facilities Special Tax”) to be levied for the Special Tax Requirement for Facilities (as defined in the Rate and Method) and a Services Special Tax (as defined in the Rate and Method) (the “Services Special Tax”) to be levied for services described in the Rate and Method. As used in this Official Statement, the terms “Special Tax” or “Special Taxes” refer only to the Facilities Special Tax and does not include the Services Special Tax.

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

Security and Sources of Payment for the Bonds
Under the Indenture, the District has pledged to repay the Bonds and any additional bonds issued under the Indenture (the “Additional Bonds”) from Net Special Tax Revenues and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund. Proceeds of any Additional Bonds may only be applied to refund the Bonds or any Additional Bonds previously issued under the Indenture. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — No Additional Bonds Except for Refunding Bonds.” The Indenture defines “Net Special Tax Revenues” to mean Special Tax Revenues less amounts required to 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, i ncluding 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 a n 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.

Net Special Tax Revenues are the primary security for the repayment of the Bonds and any Additional Bonds. In the event that Net Special Tax Revenues are not paid when due, the only sources of funds available to pay the debt service on the Bonds and any Additional Bonds will be the amounts held 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 ADDI TIONAL 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. 400

4 4862-7187-7865v3/022777-0044
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.

Principal of, premium, if any, and interest on the Bonds is payable by the Trustee to DTC. Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants. In the event that the book-entry only system is no longer used with respect to the Bonds, the Beneficial Owners will become the registered owners of the Bonds and will be paid principal and interest by the Trustee, all as described herein. See Appendix 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 [September 20, 2024], with a date of value as of August 25, 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 August 25, 2024 th e minimum market value of the Taxable Property within the District was not less than $291,905,099 (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 November 28, 2022 (the “Original Price Point Study”). The Special Tax rates set forth in the 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 with in the District, dated August 16, 2024 (the “Updated Price Point Study”). Pursuant to Section C of the 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 401

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Appendix C to this Official Statement. Based on the conclusions of the Updated Price Point Study, the Facilities Special Tax, the Services Special Tax and all direct and overlapping property taxes, special assessments and other special taxes, the City does not expect to amend the Assigned Facilities Special Tax because effective tax rates are not projected to exceed 1.95% for any parcel. See “THE COMMUNITY FACILITIES DISTRICT — Direct and Overlapping Debt — Table 3” — Projected Total Effective Tax Rates for I ndividually Owned Residential Property.” See also “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — Rate and Method of Apportionment.”
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 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.

For information concerning respects in which certain of the above -mentioned professionals, advisors, counsel and agents may have a financia l 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 covenants 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 Disclosure 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—Community Facilities District” 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 set forth herein, in evaluating an investment in the Bonds.

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

Brief descriptions of the Bonds and the Indenture are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references h erein to the Indenture, the Bonds and the constitution and laws of the State as well as the proceedings of the City Council, 402

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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 Agreement 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.

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
Total

(1) Consists of $__________ to be deposited into the Acquisition Account , $__________ to be deposited into the Community Benefit Account, $__________ to be deposited into the Construction Account and $__________ to be deposited into the Water District Account.
(2) Equal to the initial Reserve Requirement.

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. Interest 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 “In terest 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 Interest 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 f irst 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 Payment Date will, if and to the extent that amounts subsequently become available therefor, be payable on a payment date established by the Trustee 403

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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.

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 distribution 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 “SPECI AL 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 thereto 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 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, 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 ac crued 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

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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 Sep tember 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 respe ctive 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

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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 a ggregate 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 m ultiples 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 matu rity 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 redeemed 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 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 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 407

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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.

Effect of Notice of Redemption. 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, is held by the Tru stee 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 from Net Special Tax Revenues. The Indenture defin es “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 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 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 incurr ed 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 o f 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 2025-26 Special Tax levy, based on the development status within the District as of August 25, 2024, 509 parcels of Taxable Property within the District will be classified as Developed Property and 17 parcels of Taxable Property within the District will be classified as Undeveloped Property. As of October 1, 2024, Lennar Homes has obtained an additional nine building permits, and therefore, an additional nine parcels of Taxable Property within the District will be classified as Developed Property for the Fiscal Year 2025 -26 Special Tax levy, assuming no further development within the District . 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 ap plication 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 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, L IMITED OBLIGATIONS OF THE 409

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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 March 14, 20 23 stating its intention to establish the District and to levy a special tax within the District. In accordance with the provisions of the Act, the City Council established the District on April 25, 2023 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 April 25, 2023, the then landowners of the property within the District, Lennar Homes and the Land Bank, authorized the Dis trict to incur indebtedness in an amount not to exceed $36,000,000 and approved the Rate and Method. The Rate and Method is set forth in Appendix A hereto.

Pursuant to Section C of the Rate and Method, prior to the issuance of the Bonds, if necessary, 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 one or more land use classes of residential property in the Dis trict to not exceed 1.95% of the Minimum Sale 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, the Facilities Special Tax, the Services Special Tax and all direct and overlapping property taxes, special assessments and other special taxes, the City does not expect to amend the Assigned Facilities Special Tax. See “ — Rate and Method of Apportionment” below. See also “THE COMMUNITY FACILITIES DISTRICT — Direct and Overlapping Debt — Table 3 — Projected Total Effective Tax Rates for Individually Owned Residential Property.”
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 District, are at lea st 110% of debt service on the Bonds in each Bond Year net of estimated Administrative Expenses of $ 40,000 escalating 2% each fiscal year beginning July 1, 2025. The Special Tax levied in any fiscal year may not exceed the maximum rates authorized pursuan t 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.” 410

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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 August 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 prepared, 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 m aximum 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 may 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 $40,000 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 Sp ecial Tax . The District is legally authorized 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 “Special 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 s hould 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, 2023 and on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Facilities Special Taxes 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, 411

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(a) for which the Final Residenti al Subdivision was recorded prior to the Fiscal 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 subject 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. “One Story Residential Property” means an Assessor’s Parcel of Residential Property containing a one- story residential dwelling unit 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. “Planning Area” means an area designated with the letters “P.A.” as shown on Exhibit B to the Rate and Method.
“Residential Floor Area” means all of the square footage of living area within the 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 Parcels 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 an d 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 enhanc ement 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 construction 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 412

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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 Property 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 Method attached hereto as Appendix A.
“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.
“Two Story Residential Property” means an Assessor’s Parcel of Residential Property containing a two- story residential dwelling unit 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. “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 the applicable Acreage Limit of Public Property and/or Property Owner Association Property established for each Planning Area. Tax -exempt status will be assigned by the CFD Administrator in chronological order in which property within a Planning Area 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. The Acreage Limit for Planning Area 5 is 2.04 Acres, the Acreage Limit for Planning Area 6 is 1.07 Acres, the Acreage Limit for Planning Area 7 is 4.92 Acres and the Acreage Limit for Planning Ares 8, 9 and 10 is 13.74 Acres.

Notwithstanding the above, an Assessor’s Parcel within a Planning Area 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 within such Planning Area to exceed the applicable 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 not levy a Services Special Ta x 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 Assessor’s Parcel were not class ified 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 413

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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 Cali fornia 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 S pecial 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 15, as identified in Table 1 in Section C of the Rate and Method based on the Planning Area, Description and the Residential Floor Area associated with each such residential dwelling unit. The Assigned Facilities Special Tax applicable to an Assessor’s Parcel in Planning Areas 7, 8, 9 and 10 classified as One Story Residential Property ranges from $4,613 per residential dwelling unit with a Residential Floor Area of less than 2,000 square feet to $4,829 per unit with a Residential Floor Area of 2,000 square feet or greater. The Assigned Facilities Special Tax applicable to an Assessor’s Parcel in Planning Areas 7, 8, 9 and 10 classified as Two Story Residential Property ranges from $3,947 per unit with a Residential Floor Area of less than 2,200 square feet to $5,626 per unit with a Residential Floor Area of 3,400 square feet or greater. The Assigned Facilities Special Tax applicable to an Assessor’s Parcel in Planning Areas 5 and 6 classified as Residential Property ranges from $2,583 per unit with a Residential Floor Area of less than 1,300 square feet to $3,845 per unit with a Residential Floor Area of 1,900 square feet or greater. The Assigned Facilities Sp ecial Tax applicable to an Assessor’s Parcel classified as Non -Residential Property within a Planning Area is equal to $55,240 per Acre within Planning Area 5, $50,260 per Acre within Planning Area 6, $63,050 per Acre within Planning Area 7 and $40,030 per Acre within Planning Areas 8, 9 and 10.

Backup Facilities Special Tax. The Backup Facilities Special Tax for an Assessor’s Parcel of Developed Property upon adoption of the Rate and Method is equal to $64,990 per Acre within Planning Area 5, $59,120 per Acre within Planning Area 6, $70,050 per Acre within Planning Area 7 and $44,480 per Acre within Planning Areas 8, 9 and 10.

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 Assessor’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 F acilities Special Tax for each Assessor’s Parcel of Undeveloped Property, Taxable Public Property and Taxable Property Owner Association Property within a Planning Area is equal to $64,990 per Acre 414

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within Planning Area 5, $59,120 per Acre within Planning Area 6, $70,050 per Acre within Planning Area 7 and $44,480 per Acre within Planning Areas 8, 9 and 10. The Maximum Facilities Special Tax rates for Undeveloped Property, Taxable Public Property and Taxable Property Owner Association Property are not subje ct to escalation.

Method of Apportionment of Special Tax . Commencing with Fiscal Year 2023 -24, and for each following Fiscal Year, the CFD Administrator will determine the Special Tax Requirement for Facilities and, subject to the Maximum Facilities Speci al Tax rates described above, will 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 Maximum Facilities Special Tax for Undeveloped Property;
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 Special 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 exce pt 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 Facilities 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 delinque nt 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 415

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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 2023-24.

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 t he Bonds in each Bond Year plus estimated Administrative Expenses of $40,000 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 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 August 1, 2024, building permits had been issued for 509 residential parcels within the District. Accordingly, assuming no additional building permits are obtained prior to May 1, 2025, 509 parcels will be classified as Developed Property and 17 parcels will be classified as Undeveloped Property for the Fiscal Year 2025 -26 Special Tax levy. Since August 1, 2024, and as of October 1, 2024, Lennar Homes has obtained an additional nine building permits. 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 nece ssary 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 curren t maximum rates and method of collection of the Special Tax are not altered in a manner 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 manner 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 leg al 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 416

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obligation debt 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 exis tence in the future in certain situations without the consent or knowledge of the City 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 e stablish 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 Fund; 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 Indenture shall be identified to the Trustee as such by the District and shall be deposited in the Redemption Fund. See “ — 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 FACTORS — 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 a uthorized by the Owners of not less than 75% by value of the Bonds and any Additional Bonds Outstanding.
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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 Interest 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 sp ecified in the Indenture. See Appendix F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
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 separate 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 proportio nate 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 418

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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 the 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 Reserve 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 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 and any Additional Bonds to be so redeemed 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.

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 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 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 w riting 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 Independent 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 pay able 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 fi nancing of public improvements to meet the needs of new development related 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 419

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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.

The District includes approximately 69.9 gross acres and is located in the northwestern portion of the City, approximately one mile east of Interstate 15 and along both sides of Cassava Drive, south of Duncan Canyon Road and north of Casa Grande Avenue. The property within the District is being developed into phase one of a re sidential community known as The Gardens, which is within the master -planned residential community known as The Arboretum, by Lennar Homes. Phase one of The Gardens is expected to consist of 526 single -family homes across six neighborhoods known as “Dayfl ower,” “Blue Sage,” “Acacia,” “Silverberry,” “Wildrose,” and “Azalea.” The Gardens Phase One is encompassed by a portion of Tract Map 20362 and Tract Maps 20363 and 20364 along with subsequent condominium maps on Lot 5 and 6 of Tract 20362, all of which s ubdivide the property into 526 separate parcels (each of which is a separate Assessor’s Parcel subject to the levy of the Special Tax pursuant to the Rate and Method).

Lennar Homes has acquired 496 of the 526 lots of the property within the District in phased takedowns from AG EHC II (LEN) CA 2, L.P., a Delaware limited partnership (the “Land Bank”) pursuant to the Option Agreement (as defined under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT —Option Agreement”), and has an option (but not an obligat ion) to acquire the remaining 30 lots from the Land Bank pursuant to the Option Agreement. The purchase price for the property within the District was $91,935,447 and the Land Bank took title to the property in December 2021. As of August 25, 2024, Lennar Homes had acquired 496 lots from the Land Bank within the District, with an additional 22 lots scheduled to be acquired October 14, 2024 and the final eight lots scheduled to be acquired December 14, 2024. There is no guarantee that Lennar Homes will acquire the remaining lots as planned. During the term of the Option Agreement, Lennar Homes is contractually obligated to pay the Special Tax levied on the property subject to such agreement. However, in the event the Option Agreement is terminated prior to Lennar Homes having acquired all of the lots thereunder, the Special Tax would continue to be levied on the property in the District owned by the Land Bank and Lennar Homes’ contractual obligation to pay the Special Taxes would terminate . See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
As of August 25, 2024, 366 residential units had been completed and conveyed to individual homeowners, Lennar Homes owned 14 completed model units (none of which were in escrow), 41 homes over 95% complete (39 of which were in escrow), 69 residential units under construction and less than 95% complete (42 of which were in escrow), and six finished lots (none of which were in escrow), and the Land Bank owned 13 homes under construction (none of which were in escrow) and 1 7 finished lots (none of which were in escrow). As of October 1, 2024, within the District, 396 residential units had been completed and conveyed to individual homeowners, and Lennar Homes owned 13 completed model units (two of which were in escrow), 81 residential units under construction (74 of which were in escrow), and six finished lots (none of which were in escrow), and the Land Bank owned 28 homes under construction (10 of which were in escrow) and 2 finished lots (none of which were in escrow). Sales contracts are subject to cancellation and, therefore, homes currently in escrow may not result in closed escrows with the prospective homebuyers. As of October 1, 2024, a total of 518 building permits were obtained within the District. Accordingly, if no additional building permits are obtained, 518 parcels will be classified as Developed Property and eight parcels will be classified as Undeveloped Property for the Fiscal Year 2025-26 Special Tax levy. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
Tract Maps 20362, 20363 and 20364 are permitted to be developed into 358 single-family detached lots and two condominium lots along with site plans for the two condominium lots which show 168 units for a total of 526 residential units. Per the City of Fontana General Plan and the City’s Zoning Map, the property within the District is shown as within The Arboretum Specific Plan. Per The Arboretum Specific Plan, the property within the District is shown as RMF (Residential Multi-Family), with varying densities ranging from 3 to 16.1 dwelling units per acre. The subject has an overall density of 6.31 dwelling units per acre for Tract Maps 20363 and 20364 (Acacia, Silverberry, Wildrose, and Azalea) and an overall density of 12.75 units per acre for the two 420

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condominium lots (Dayflower and Blue Sage). Such densities are within the allowed densities per the Arboretum Specific Plan.

The Arboretum Specific Plan was approved in October 2009 and amended in June 2021. The Arboretum Specific Plan covers 525.7 gross acres allowing for 3,532 residential units. The Arboretum development is divided into four distinct villages which include The Meadows, The Gardens, The Resort and the Arboretum.

The Meadows is developed and sold out except for a 24-acre school site at the southwest corner of the planning area. The Gardens Phase One is the development within the District, and The Gardens Phase Two is currently under development with two tracts under construction by Richmond American and mass grading and underground utilities underway on the remainder of The Gardens Phase Two. The Resort is located north of The Gardens and has not yet begun development. The Arboretum is expected to contain a 10.7 -acre park that will provide the heart of the overall Arboretum community and has not yet begun development.

Water service to the property within the District will be supplied by West Valley Water District and sewer service to the property within the Distric t will be supplied by the City. 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 Distric t 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 Cucamon ga (thrust fault), the San Jacinto (strike -slip fault), and the San Andreas (strike -slip) fault. The Cucamonga 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, the 277-acre Karen Fire in July 2020 and the Sierra Fire that burned in June 2024. Per the City’s General Plan and Zoning Map, the District is within a fire overlay zone, which, per the State of California’s Fire Hazard Map , is within a Local Responsibility Area with the recommendation for the site to be in a very high fire severity zone. There can be no assurances that wildfires will not occur within the District and if such wildfires do occur within the District there can be no assurance that residential property within the District will not be damaged or destroyed.

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 perce nt annual chance floodplain), and flood insurance will not be required.

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. Mo re detailed information about the property therein is contained in Appendix B — “APPRAISAL REPORT,” and information about the ownership of such property 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.
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TABLE 1

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE)

SPECIAL TAX AND DEVELOPMENT SUMMARY
Rate and Method Land Use Classes
Number of
Permitted
Units/Acres
as of 5/1/24(1)
Number of
Additional
Permitted
Units/Acres
as of 8/1/24(2)
Remaining
Number of
Units/Acres(3)
Assigned
Facilities
Special Tax
Assigned
Facilities
Special Taxes
at Build-Out
Developed Property Description / Planning Area
Two Story Residential Property (3,400 sq. ft. or greater) Planning Areas
7, 8, 9 & 10
0 0 0 $5,626 $ 0
Two Story Residential Property (3,200 to less than 3,400 sq. ft.) 45 0 1 5,417 249,182 Two Story Residential Property (3,000 to less than 3,200 sq. ft.) 34 0 0 5,208 177,072 Two Story Residential Property (2,800 to less than 3,000 sq. ft.) 65 3 0 5,007 340,476 Two Story Residential Property (2,600 to less than 2,800 sq. ft.) 34 1 0 4,883 170,905 Two Story Residential Property (2,400 to less than 2,600 sq. ft.) 54 6 2 4,381 271,622 Two Story Residential Property (2,200 to less than 2,400 sq. ft.) 57 5 10 4,164 299,808 Two Story Residential Property (less than 2,200 sq. ft.) 0 0 0 3,947 0 One Story Residential Property (2,000 sq. ft. or greater) 16 0 2 4,829 86,922 One Story Residential Property (less than 2,000 sq. ft.) 23 0 0 4,613 106,099 Residential Property (1,900 sq. ft. or greater)
Planning Areas
5 & 6
14 4 2 3,845 76,900
Residential Property (1,700 to less than 1,900 sq. ft.) 41 12 0 3,414 180,942 Residential Property (1,500 to less than 1,700 sq. ft.) 92 3 0 2,953 280,535 Residential Property (1,300 to less than 1,500 sq. ft.) 0 0 0 2,768 0 Residential Property (less than 1,300 sq. ft.) 0 0 0 2,583 0 TOTAL NA 475 34 17 NA $ 2,240,463
SUBTOTAL $2,035,079 $132,217 $73,167 NA NA

(1) Represents the classification of 475 parcels of Taxable Property as Developed Property for Fiscal Year 2024-2025, comprised of approximately 39.0 acres, based upon the building permits that have been obtained for such properties as of May 1, 2024. Furthermore, includes $6,655 in Facilities Special Taxes resulting from revised building permit issuances that shifted 10 parcels of Taxable Property from a Two Story to One Story Land Use Class designation. These revise d Land Use Class designations will not be factored into the Fiscal Year 2024-2025 Facilities Special Tax levy, but will be factored in the Facilities Special Tax levy commencing with Fiscal Year 2025-2026. (2) Represents the projected Developed Property classification of 34 parcels of Taxable Prop erty, comprised of approximately 1.7 acres that will be classified as Undeveloped Property for Fiscal Year 2024-2025, based upon the building permits that have been obtained for such properties between May 1, 2024 and August 1, 2024. (3) Represents the pro jected Developed Property classification of 17 parcels of Taxable Property, comprised of approximately 1.3 acres that will be classified as Undeveloped Property for Fiscal Year 2024-2025, assuming such properties are constructed at the home sizes identified in the development plan submitted by Lennar Homes.

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. 112 (THE GARDENS PHASE ONE)

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
Fontana Unified School District G.O. Bonds 0.66814% $280,752,610 $ 1,875,830 Chaffey Community College District G.O. Bonds 0.10852 278,160,000 301,860 San Bernardino Valley Municipal Water District G. O. Bonds(3) 0.35050 35,000 130 Estimated Share of Overlapping Debt Allocable to District $ 2,177,820 Plus: The Bonds 30,760,000*
Estimated Share of Direct and Overlapping Debt Allocable to District $32,937,820*

* 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 overlapping tax and assessment d ebt as of August 1, 2024. Excludes 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.
(3) Based on the Long Term General Obligation Bond Outstanding Debt allocable to the San Bernardino Valley Municipal Water District, as provided by the Department of Water Resources.

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

As shown in Table 3, the projected total effective tax rate for residential units within the District ranges from approximately 1.885% to approximately 1.914% of the average minimum market value for units that have closed to individual homeowners based on the Appraisal. 423

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TABLE 3

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE)

PROJECTED TOTAL EFFECTIVE TAX RATES

INDIVIDUALLY OWNED RESIDENTIAL PROPERTY
Communities within Community Facilities District No. 112

DESCRIPTION DAYFLOWER BLUE SAGE ACACIA SILVERBERRY WILDROSE AZALEA Product Type TRIPLEX CONDOS DETACHED DETACHED DETACHED DETACHED Number of Anticipated Units 69 99 109 97 88 64
Number of Units Sold(1) 50 67 60 71 66 52
Average Unit Size(1) 1,606 1,778 2,350 2,688 2,736 2,963 Average Minimum Market Value(1) $475,935 $556,585 $625,686 $719,338 $724,856 $765,569 Less: Homeowner Exemption ($7,000) ($7,000) ($7,000) ($7,000) ($7,000) ($7,000) Equals: Assumed Taxable Value(2) $468,935 $549,585 $618,686 $712,338 $717,856 $758,569 AD VALOREM PROPERTY TAXES(3)
Property
Tax Rate
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Base Property Tax 1.0000% $4,689 $5,496 $6,187 $7,123 $7,179 $7,586 Fontana Unified School District G.O. Bonds 0.0354 166 195 219 252 254 269 Chaffey Community College District G.O. Bonds 0.0100 47 55 62 71 72 76 San Bernardino Valley Municipal Water District 0.1200 563 660 742 855 861 910 Subtotal Ad Valorem Property Tax Rate/Taxes 1.1654 $5,465 $6,406 $7,210 $8,301 $8,366 $8,841 PARCEL CHARGES, ASSESSMENTS AND SPECIAL TAXES(4)
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Fontana Vector Control Charge $6 $6 $6 $6 $6 $6
City of Fontana Sewer User Fee(5) NA NA NA NA NA NA
Fontana CFD No. 112 Services Special Tax(6) 550 550 576 576 576 576 Fontana CFD No. 112 Facilities Special Tax(7) 2,953 3,414 4,164 4,883 4,883 5,007 Subtotal Parcel Charges, Assessments and Special Taxes $3,509 $3,970 $4,746 $5,465 $5,465 $5,589 PROJECTED TOTAL PROPERTY TAXES $8,974 $10,376 $11,956 $13,766 $13,831 $14,430 PROJECTED EFFECTIVE TAX RATE (% OF MARKET VALUE) 1.886% 1.864% 1.911% 1.914% 1.908% 1.885%

(1) Number of units sold, average unit size, and average minimum market value for units that have closed to individual homeowners based on the Appraisal with a date of value as of August 25, 2024. (2) Assumed Taxable Value and ad valorem taxes incorporate owner-occupied assessed value exemption of $7,000. (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 with 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 applicable Assigned Services Special Tax. (7) Based on the levy of the applicable Assigned Facilities Special Tax.

Source: David Taussig and Associates, Inc. dba DTA, Kitty Siino & Associates, Inc., City of Fontana, County of San Bernardino. .
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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 Appraise r, 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 or 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 Commiss ion. A copy of the Appraisal is included as Appendix B to this Official Statement.

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 August 25, 2024, 366 residential units had been completed and conveyed to individual homeowners, Lennar Homes owned 14 completed model units (none of which were in escrow), 41 homes over 95% complete (39 of which were in escrow), 69 residential units under construction and less than 95% complete (42 of which were in escrow), and six finished lots (none of which were in escrow), and the Land Bank owned 13 homes under construction (none of which were in escrow) and 17 finished lots (none of which were in escrow).

Subject to the contingencies, ass umptions and limiting conditions set forth in the Appraisal, the Appraiser concluded that, as of August 15, 2024, the minimum market value of the Taxable Property within the District was not less than $291,905,099, consisting of $237,352,185 for the 366 co mpleted units conveyed to individual homeowners, $46,873,063 for the 55 completed or under construction homes and 75 finished lots owned by Lennar Homes and $7,679,851 for the 30 finished lots owned by the Land Bank. See Appendix B — “APPRAISAL REPORT.”
While fire breaks and fire roads have been incorporated into the development, recently insurance companies have been leaving California high fire zones. It is the Appraiser’s understanding fire insurance is currently available on the subject homes. Due to the current insurance atmosphere in California, it is an extraordinary assumption that fire insurance will continue to be available in the District. Reference is made to Appendix B for a complete list and full discussion of the applicable contingencies, other 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 is subject to certain assumptions and limiting conditions and contains, among other such assumptions and limiting conditions, the following statements:

This report might not include full discussions of the data, reasoning and analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Some supporting documentation concerning the data, reasoning and analyses may be retained in the appraiser’s files. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraiser is not responsible for unauthorized use of this report.
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Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event, only with proper qualification and only in its entirety. Permission is given for this appraisal to be published as a part of the Official Statement or similar document for the Fontana CFD No. 112 special tax bonds.

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 the 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 the relative burden imposed on each parcel by the applicable Special Tax. As indicated above, the minimum market value of the property within the District is not less than $291,905,099. The ratio of that value to the $30,760,000 total principal amount of the Bonds is approximately 9.49*-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 Ov erlapping Debt.” Taking the $30,760,000* principal amount of the Bonds and $2,177,820 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 $32,937,820 * is approximately 8.86 *-to-1. Table 4A sets forth the minimum market value -to-lien ratios of all the taxable property within the District by development status as of August 1, 2024 based on the projected Fiscal Year 2025-26 Special Tax levy. Table 4B sets forth the minimum market value-to-lien ratios of all the taxable property within the District based on a projected Fiscal Year 2025- 26 Special Tax levy assuming that building permits are issued for all 526 parcels wi thin the District prior to May 1, 2025. 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 5A 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 2025-26 Special Tax levy based on development status as of August 1, 2024.

The following Table 5B 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 a projected Fiscal Year 2025 -26 Special Tax levy assuming that building permits are issued for all 526 parcels within the District prior to May 1, 2025.

Additionally, the following Table 6A 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 2025-26 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 2025-26 Special Tax levy if a building permit for such property was obtained by May 1, 2025.

Based on the development status within the District as of August 1, 2024, building permits had been issued for 509 residential parcels of Taxable Property within the District; accordingly, 509 residential parcels within the District will be classified as Developed Property and 17 residential parcels within the District will be

 Preliminary, subject to change.
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classified as Undeveloped Property for purposes of the projected Fiscal Year 2025 -26 Special Tax levy, assuming no further development within the District between August 1, 2024 and May 1, 2025.

Table 6B 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 2025-26 Special Tax levy) and the ratio of the appraised value to its share of the Bonds assuming that building permits are issued for all 526 parcels within the District prior to May 1, 2025.

TABLE 4A

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE)

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

ALLOCATED BY PROPERTY OWNER/DEVELOPMENT STATUS
(PROJECTED FISCAL YEAR 2025-2026 SPECIAL TAX LEVY
ASSUMING DEVELOPMENT STATUS AS OF AUGUST 1, 2024)
Property Owner /
Development Status(1)
Number of
Taxable
Parcels
Projected
Fiscal Year
2025-2026
Facilities
Special Tax(2)
Percent of
Projected
Fiscal Year
2025-2026
Facilities
Special Tax
Pro Rata Share
of Bonds(3)*
Minimum
Market Value(1)
Estimated
Minimum
Market
Value-to-
Lien
Ratios(4)*
Lennar Homes of California, LLC
Model Homes 14 $ 55,422 2.72% $ 837,602 $ 7,059,523 8.43 95%+ Completed Homes 41 181,104 8.90 2,737,067 20,928,911 7.65 Homes Under Construction 69 252,725 12.42 3,819,496 17,070,659 4.47 Finished Lots / Developed Property(5) 0 0 0.00 0 0 NA
Finished Lots / Undeveloped Property(5) 6 0 0.00 0 1,813,970 NA Subtotal 130 $ 489,251 24.04% $ 7,394,165 $ 46,873,063 6.34 AG EHC II (LEN) CA2, L.P.

Homes Under Construction 13 $ 54,904 2.70% $ 829,782 $ 3,550,269 4.28 Finished Lots / Developed Property(5) 6 19,613 0.96 296,417 1,393,970 4.70 Finished Lots / Undeveloped Property(5) 11 0 0.00 0 2,735,612 NA Subtotal 30 $ 74,517 3.66% $ 1,126,199 $ 7,679,851 6.82 Individual Homeowners 366 $ 1,471,532 72.30% $ 22,239,636 $ 237,352,185 10.67 TOTAL 526 $ 2,035,300 100.00% $ 30,760,000 $ 291,905,099 9.49

* Preliminary, subject to change.
(1) Based on the Appraisal with a date of value as of August 25, 2024. (2) Based on the levy to fund Administrative Expenses and debt service on the Bonds, the building permits obtained as of August 1, 2024, and assumes no further development.
(3) There are currently no overlapping assessment districts and/or other community facilities districts encumbering the District with outstanding debt (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 2025-2026 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. For Lennar Homes, all six parcels identified in the Appraisal as finish ed lots have not obtained building permits prior to August 1, 2024 and such lots will be classified as Undeveloped Property for the Fiscal Year 2025-2026 Special Tax levy assuming no further development. For the Land Bank, six parcels identified in the Appraisal as finished lots have obtained building permits prior to August 1, 2024 and such lots will be classified as Developed Property for Fiscal Year 2025-2026, 11 parcels identified in the Appraisal as finished lots have not obtained building permits prior to August 1, 2024 and such lots will be classified as Undeveloped Property for the Fiscal Year 2025-2026 Special Tax levy assuming no further development.

Source: David Taussig and Associates, Inc. dba DTA.
427

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TABLE 4B

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE)

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

ALLOCATED BY PROPERTY OWNER/DEVELOPMENT STATUS
(PROJECTED FISCAL YEAR 2025-2026 SPECIAL TAX LEVY

ASSUMING FULL DEVELOPMENT)
Property Owner /
Development Status(1)
Number of
Taxable
Parcels
Projected
Fiscal Year
2025-2026
Facilities
Special Tax(2)
Percent of
Projected
Fiscal Year
2025-2026
Facilities
Special Tax
Pro Rata Share
of Bonds(3)*
Minimum
Market Value(1)
Estimated
Minimum
Market
Value-to-
Lien
Ratios(4)*
Lennar Homes of California, LLC
Model Homes 14 $ 53,612 2.63% $ 810,248 $ 7,059,523 8.71 95%+ Completed Homes 41 175,189 8.61 2,647,683 20,928,911 7.90 Homes Under Construction 69 244,472 12.01 3,694,762 17,070,659 4.62 Finished Lots / Developed Property(5) 6 25,043 1.23 378,476 1,813,970 4.79 Finished Lots / Undeveloped Property(5) 0 0 0.00 0 0 NA Subtotal 130 $ 498,316 24.48% $ 7,531,169 $ 46,873,063 6.22 AG EHC II (LEN) CA2, L.P.

Homes Under Construction 13 $ 53,111 2.61% $ 802,684 $ 3,550,269 4.42 Finished Lots / Developed Property(5) 17 60,397 2.97 912,793 4,129,582 4.52 Finished Lots / Undeveloped Property(5) 0 0 0.00 0 0 NA Subtotal 30 $ 113,508 5.58% $ 1,715,477 $ 7,679,851 4.48 Individual Homeowners 366 $ 1,423,476 69.94% $ 21,513,354 $ 237,352,185 11.03 TOTAL 526 $ 2,035,300 100.00% $ 30,760,000 $ 291,905,099 9.49

* Preliminary, subject to change.
(1) Based on the Appraisal with a date of value as of August 25, 2024. (2) Based on the levy to fund Administrative Expenses and debt service on the Bonds, and assumes full development. (3) There are currently no overlapping assessment districts and/or other community facilities districts encumbering the District with outstanding debt (excluding debt secu red 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 2025-2026 Facilities Special Tax.
(4) Calculated by dividing the Minimum Market Value column by the Pro Rata Share of Bonds column. (5) Assuming the remaining 17 unpermitted properties as of August 1, 2024 (six parcels owned by Lennar Homes and 11 parcels owned by the Land Bank are constructed at the home sizes identified in the development plan submitted by Lennar Homes.

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

428

4862-7187-7865v3/022777-0044
TABLE 5A

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE)

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

ALLOCATED BY LAND USE CLASSES
(PROJECTED FISCAL YEAR 2025-2026 SPECIAL TAX LEVY
ASSUMING DEVELOPMENT STATUS AS OF AUGUST 1, 2024)
Rate and Method Land Use Classes
Number of
Units/Acres(1)
Fiscal Year
2025-2026
Assigned /
Maximum
Facilities
Special Tax(2)
Projected
Fiscal Year
2025-2026
Facilities
Special Tax(3)
Pro Rata
Share of
Bonds(4)*
Minimum
Market Value(5)
Estimated
Minimum
Market
Value-to-
Lien
Ratios(6)*
Developed Property Description / Planning Area
Two Story Residential Property (3,400 sq. ft. or greater) Planning Areas
7, 8, 9 & 10
0 $ 0 $ 0 $ 0 $ 0 NA
Two Story Residential Property (3,200 to less than 3,400 sq. ft.) 45 243,765 228,919 3,459,708 33,749,605 9.76 Two Story Residential Property (3,000 to less than 3,200 sq. ft.) 34 177,072 166,288 2,513,148 23,326,484 9.28 Two Story Residential Property (2,800 to less than 3,000 sq. ft.) 68 340,476 319,740 4,832,308 44,438,507 9.20 Two Story Residential Property (2,600 to less than 2,800 sq. ft.) 35 170,905 160,496 2,425,621 22,764,668 9.39 Two Story Residential Property (2,400 to less than 2,600 sq. ft.) 60 262,860 246,851 3,730,719 33,430,460 8.96 Two Story Residential Property (2,200 to less than 2,400 sq. ft.) 62 258,168 242,445 3,664,127 31,085,619 8.48 Two Story Residential Property (less than 2,200 sq. ft.) 0 0 0 0 0 NA One Story Residential Property (2,000 sq. ft. or greater) 16 77,264 72,558 1,096,592 11,340,800 10.34 One Story Residential Property (less than 2,000 sq. ft.) 23 106,099 99,637 1,505,842 13,702,941 9.10 Residential Property (1,900 sq. ft. or greater)
Planning Areas
5 & 6
18 69,210 64,995 982,284 8,004,631 8.15
Residential Property (1,700 to less than 1,900 sq. ft.) 53 180,942 169,922 2,568,074 24,672,856 9.61 Residential Property (1,500 to less than 1,700 sq. ft.) 95 280,535 263,449 3,981,577 40,838,946 10.26 Residential Property (1,300 to less than 1,500 sq. ft.) 0 0 0 0 0 NA Residential Property (less than 1,300 sq. ft.) 0 0 0 0 0 NA Subtotal NA 509 $ 2,167,296 $ 2,035,300 $ 30,760,000 $ 287,355,517 9.34 Undeveloped Property 1.3 $ 78,013 $ 0 $ 0 $ 4,549,582 NA TOTAL NA NA $ 2,245,309 $ 2,035,300 $ 30,760,000 $ 291,905,099 9.49

* Preliminary, subject to change.
(1) Based on the building permits obtained as of August 1, 2024, and assumes no further development. 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 anticipated Assigned Facilities Special Tax revenues generated by residential dwelling units for which building permits have been obtained as of August 1, 2024, and the Maximum Facilities Special Tax revenues generated by 17 parcels of Taxable Property, comprised of approximately 1.3 acres that will b e classified as Undeveloped Property for Fiscal Year 2025-2026, for which building permits have not been obtained as of August 1, 2024, and assumes no further development. (3) Based on the levy to fund Administrative Expenses and debt service on the Bonds, the building permits obtained as of August 1, 2024, and assumes no further development. (4) There are currently no overlapping assessment districts and/or other community facilities districts encumbering the District with outstanding debt (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 2025-2026 Facilities Special Tax. (5) Based on the Appraisal with a date of value as of August 25, 2024. (6) Calculated by dividing the Minimum Market Value column by the Pro Rata Share of Bonds column. 429

4862-7187-7865v3/022777-0044
Source: David Taussig and Associates, Inc. dba DTA.
430

4862-7187-7865v3/022777-0044
TABLE 5B

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE)

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

ALLOCATED BY LAND USE CLASSES
(PROJECTED FISCAL YEAR 2025-2026 SPECIAL TAX LEVY

ASSUMING FULL DEVELOPMENT)
Rate and Method Land Use Classes
Number of
Units/Acres(1)
Fiscal Year
2025-2026
Assigned
Facilities
Special Tax(2)
Projected
Fiscal Year
2025-2026
Facilities
Special Tax(3)
Pro Rata
Share of
Bonds(4)*
Minimum
Market Value(5)
Estimated
Minimum
Market
Value-to-
Lien
Ratios(6)*
Developed Property Description / Planning Area
Two Story Residential Property (3,400 sq. ft. or greater) Planning Areas
7, 8, 9 & 10
0 $ 0 $ 0 $ 0 $ 0 NA
Two Story Residential Property (3,200 to less than 3,400 sq. ft.) 46 249,182 226,364 3,421,096 34,101,934 9.97 Two Story Residential Property (3,000 to less than 3,200 sq. ft.) 34 177,072 160,857 2,431,075 23,326,484 9.60 Two Story Residential Property (2,800 to less than 3,000 sq. ft.) 68 340,476 309,298 4,674,499 44,438,507 9.51 Two Story Residential Property (2,600 to less than 2,800 sq. ft.) 35 170,905 155,255 2,346,407 22,764,668 9.70 Two Story Residential Property (2,400 to less than 2,600 sq. ft.) 62 271,622 246,749 3,729,181 33,935,116 9.10 Two Story Residential Property (2,200 to less than 2,400 sq. ft.) 72 299,808 272,354 4,116,155 33,608,902 8.17 Two Story Residential Property (less than 2,200 sq. ft.) 0 0 0 0 0 NA One Story Residential Property (2,000 sq. ft. or greater) 18 86,922 78,963 1,193,379 12,045,457 10.09 One Story Residential Property (less than 2,000 sq. ft.) 23 106,099 96,383 1,456,665 13,702,941 9.41 Residential Property (1,900 sq. ft. or greater)
Planning Areas
5 & 6
20 76,900 69,858 1,055,784 8,469,288 8.02
Residential Property (1,700 to less than 1,900 sq. ft.) 53 180,942 164,373 2,484,208 24,672,856 9.93 Residential Property (1,500 to less than 1,700 sq. ft.) 95 280,535 254,846 3,851,551 40,838,946 10.60 Residential Property (1,300 to less than 1,500 sq. ft.) 0 0 0 0 0 NA Residential Property (less than 1,300 sq. ft.) 0 0 0 0 0 NA Subtotal NA 526 $ 2,240,463 $ 2,035,300 $ 30,760,000 $ 291,905,099 9.49 Undeveloped Property 0 $ 0 $ 0 $ 0 $ 0 NA
TOTAL NA NA $ 2,240,463 $ 2,035,300 $ 30,760,000 $ 291,905,099 9.49

* Preliminary, subject to change.
(1) Represents the projected Developed Property classifications at full development, assuming the remaining 17 unpermitted properties as of August 1, 2024 are constructed at the home sizes identified in the development plan submitted by Lennar Homes.
(2) Represents the Assigned Facilities Special Tax revenues generated at full development, assuming the remaining 17 unpermitted properties as of August 1, 202 4 are constructed at the home sizes identified in the development plan submitted by Lennar Homes. (3) Based on the levy to fund Administrative Expenses and debt service on the Bonds, and assumes full development. (4) There are currently no overlapping assessment districts and/or other community facilities districts encumbering the District with outstanding debt (excluding debt secured by any tax or assessment established and levied on an individual Assessor’s Parcel pursuant to a contractual agreement or ot her voluntary consent by the owner thereof). The Bonds are allocated based on a proportionate share of the Projected Fiscal Year 2025-2026 Facilities Special Tax. (5) Based on the Appraisal with a date of value as of August 25, 2024. (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.
431

35 4862-7187-7865v3/022777-0044
TABLE 6A

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE)

ESTIMATED MINIMUM MARKET VALUE-TO-LIEN STRATIFICATION

BASED ON BONDS ONLY
(PROJECTED FISCAL YEAR 2025-2026 SPECIAL TAX LEVY
ASSUMING DEVELOPMENT STATUS AS OF AUGUST 1, 2024)
Estimated Minimum
Market Value-to-Lien
Ratio Category
Number of
Parcels
Subject to
Facilities
Special
Tax(1)
Projected
Fiscal Year
2025-2026
Facilities
Special Tax(2)
Percent of
Projected
Fiscal Year
2025-2026
Facilities
Special Tax
Pro Rata Share
of Bonds(3)*
Minimum
Market Value(4)
Estimated
Minimum
Market Value-
to-Lien
Ratios(5)*

11.00:1 and above 108 $ 339,224 16.67% $ 5,126,780 $ 59,942,050 11.69

9.00:1 to 10.99:1 262 1,144,267 56.22 17,293,587 179,092,673 10.36

7.00:1 to 8.99:1 51 224,567 11.03 3,393,939 26,305,896 7.75

5.00:1 to 6.99:1 5 13,866 0.68 209,557 1,161,642 5.54

3.00:1 to 4.99:1 83 313,376 15.40 4,736,137 20,853,256 4.40 Less than 3.00:1 0 0 0.00 0 0 NA
TOTAL 509 $ 2,035,300 100.00% $30,760,000 $287,355,517 9.34

* Preliminary, subject to change.
(1) The Facilities Special Tax revenues generated by 509 parcels of Taxable Property that have obtained building permits as of Au gust 1, 2024 are sufficient to fund Administrative Expenses and debt service on the Bonds. Therefore, assuming no further development, Facilities Special Taxes are not anticipated to be levied against the remaining seventeen (17) parcels of Taxable Property that had not obtained building permits as of August 1, 2024.
(2) Based on the levy to fund A dministrative Expenses and debt service on the Bonds, the building permits obtained as of August 1, 2024, and assumes no further development.
(3) There are currently no overlapping assessment districts and/or other community facilities districts encumbering the District with outstanding debt (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 2025-2026 Facilities Special Tax.
(4) Based on the Appraisal with a date of value as of August 25, 2024. (5) Calculated by dividing the Minimum Market Value column by the Pro Rata Share of Bonds column.

Fontana City CouncilOctober 22, 2024

Fontana City Council
October 22, 2024