Agenda packet — Lake Elsinore City Council, August 26, 2025 (part 6 of 6)

REPORT TO SUCCESSOR AGENCY OF THE

REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
To:Honorable Agency Chair and Members of the Successor Agency From:Jason Simpson, Executive Director
Prepared by:Shannon Buckley, Assistant Executive Director Date:August 26, 2025
Subject:SA Warrant Report Dated July 28, 2025 to August 03, 2025 Recommendation
Receive and file.

Discussion
The Warrant Report lists all general checks issued for the Successors Agency of the Redevelopment Agency of the City of Lake Elsinore for the above-mentioned period.

Attachments
Attachment 1 – SA Warrant Summary
Attachment 2 – SA Warrant Listing
Administrative Services
JULY 28, 2025 TO AUGUST 03, 2025 CITY OF LAKE ELSINORE SA WARRANT SUMMARY FUND NO. FUND DESCRIPTION TOTAL
510 SARDA AREA I, II, & III 111,522.77 $
540 SARDA DIAMOND STADIUM 12,484.73
GRAND TOTAL 124,007.50 $
Attachment 1 1 OF 1
JULY 28, 2025 TO AUGUST 03, 2025 CITY OF LAKE ELSINORE SA WARRANT LIST WARRANT NO. VENDOR NAME AMOUNT
APA26000203 EXCEL LANDSCAPE, INC. 262.17 $
APA26000209 HDL COREN & CONE 5,632.50
APA26000211 LAKE ELSINORE STORM, LP 100,655.60
APA26000223 SOUTHERN CALIFORNIA EDISON CO. 147.23
9680 LEIBOLD, MCCLENDON & MANN, PC 4,972.50
9682 PROSTAFF, LLC 12,337.50
GRAND TOTAL 124,007.50 $
Attachment 2 1 OF 1
26)
SA Warrant Report Dated August 04, 2025 to August 10, 2025 Receive and file.

Page 1 of 1 ends

REPORT TO SUCCESSOR AGENCY OF THE

REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
To:Honorable Agency Chair and Members of the Successor Agency From:Jason Simpson, Executive Director
Prepared by:Shannon Buckley, Assistant Executive Director Date:August 26, 2025
Subject:SA Warrant Report Dated August 04, 2025 to August 10, 2025 Recommendation
Receive and file.

Discussion
The Warrant Report lists all general checks issued for the Successors Agency of the Redevelopment Agency of the City of Lake Elsinore for the above-mentioned period.

Attachments
Attachment 1 – SA Warrant Summary
Attachment 2 – SA Warrant Listing
Administrative Services
AUGUST 04, 2025 TO AUGUST 10, 2025 CITY OF LAKE ELSINORE SA WARRANT SUMMARY FUND NO. FUND DESCRIPTION TOTAL
510 SARDA AREA I, II, & III 8,490.88 $
540 SARDA DIAMOND STADIUM 199,563.10
GRAND TOTAL 208,053.98 $
Attachment 1 1 OF 1
AUGUST 04, 2025 TO AUGUST 10, 2025 CITY OF LAKE ELSINORE SA WARRANT LIST WARRANT NO. VENDOR NAME AMOUNT
APA26000251 EXCEL LANDSCAPE, INC. 2,596.00 $
APA26000260 HEMET FENCE CORP 4,500.00
APA26000268 QUINN COMPANY 1,394.88
APA26000276 UNITED CARPORTS, LLC 185,263.10
9693 AK SECURITY ALARM LLC 14,300.00
GRAND TOTAL 208,053.98 $
Attachment 2 1 OF 1
27)
Change Proceedings for Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest)

1. Conduct a public hearing;

2. Adopt

RESOLUTION

THE

CITY

COUNCIL

THE

CITY

LAKE

ELSINORE,

CALIFORNIA,

ACTING

THE

LEGISLATIVE

BODY

COMMUNITY

FACILITIES

DISTRICT

NO.

2021-1

THE

CITY

LAKE

ELSINORE

(TUSCANY

VALLEY/CREST),

APPROVING

AMENDED

AND

RESTATED

RATE

AND

METHOD
OF

APPORTIONMENT

SPECIAL

TAX

FOR

EACH

IMPROVEMENT

AREA

NO.
1 AND

IMPROVEMENT

AREA

NO.

2 OF

THE

DISTRICT

AND

INCREASING

THE

AUTHORIZED

BONDED

INDEBTEDNESS

FOR

EACH

IMPROVEMENT

AREA

NO.
1 AND

IMPROVEMENT

AREA

NO.

2 OF

THE

DISTRICT

AND

CALLING

ELECTIONS
THEREIN;

3. Adopt

RESOLUTION

THE

CITY

COUNCIL

THE

CITY

LAKE

ELSINORE,
ACTING

ITS

CAPACITY

THE

LEGISLATIVE

BODY

COMMUNITY

FACILITIES

DISTRICT

NO.

2021-1

THE

CITY

LAKE

ELSINORE

(TUSCANY

VALLEY/CREST),

CERTIFYING

THE

RESULTS

THE

AUGUST

26,

2025,

SPECIAL
ELECTIONS; and

4. Introduce

title

only

and

waive

further

reading

ORDINANCE

THE

CITY

COUNCIL

THE

CITY

LAKE

ELSINORE,

CALIFORNIA,

ACTING

THE

LEGISLATIVE

BODY

COMMUNITY

FACILITIES

DISTRICT

NO.

2021-1

THE
CITY

LAKE

ELSINORE

(TUSCANY

VALLEY/CREST)

AUTHORIZING

THE

LEVY
OF

SPECIAL

TAXES

WITHIN

IMPROVEMENT

AREA

NO.

1 AND

IMPROVEMENT
AREA NO. 2 OF THE DISTRICT.

Page 1 of 3 ends

REPORT TO CITY COUNCIL
To:Honorable Mayor and Members of the City Council
From:Jason Simpson, City Manager
Prepared by:Shannon Buckley, Assistant City Manager
Date:August 26, 2025
Subject:Change Proceedings for Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest)
Recommendation

1. Conduct a public hearing;

2. Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,

CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST),

APPROVING AN AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR EACH OF IMPROVEMENT AREA NO. 1 AND IMPROVEMENT AREA NO. 2 OF THE DISTRICT AND INCREASING THE AUTHORIZED BONDED INDEBTEDNESS FOR EACH OF IMPROVEMENT AREA NO. 1 AND IMPROVEMENT AREA NO. 2 OF THE DISTRICT AND CALLING ELECTIONS THEREIN;

3. Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,

4. Introduce by title only and waive further reading of AN ORDINANCE OF THE CITY COUNCIL

OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST) AUTHORIZING THE LEVY OF SPECIAL TAXES WITHIN IMPROVEMENT AREA NO. 1 AND IMPROVEMENT AREA NO. 2 OF THE DISTRICT.

CFD 2021-1 (Tuscany Valley/Crest)

Page 2 of 3 ends

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Background
The City of Lake Elsinore (the “City”) formed Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”) and designated two improvement areas therein (each an “Improvement Area” and together the “Improvement Areas”) according to the Mello-Roos Community Facilities District Act of 1982 (the “Mello-Roos Act”). The District is located to the south of Highway 74 at Greenwald Avenue and Little Valley Road, in the northeastern part of the City. KB HOME Cal Management Services LLC, a Delaware limited liability company, is the landowner within the District (the “Developer”). At build-out, development within Improvement Area No. 1 and Improvement Area No. 2 is expected to include 204 and 131 homes, respectively, for a total of 335 homes within the District.

Homebuilding within the District has not yet commenced. Based on updated expected product types and estimated home pricing to be developed in the District, the Developer has requested that the District undertake proceedings to amend the Rate and Method of Apportionment of Special Taxes for each Improvement Area with each Second Amended and Restated Rate and Method of Apportionment attached to the Resolution of Intention (as defined below) (each a “Second Amended RMA”).

Discussion
The current annual Special Tax rates for a single-family home within Improvement Area No. 1 range from $2,936 to $3,441. If the Second Amended RMA for Improvement Area No. 1 is approved, the annual Special Tax rates for a single-family home within Improvement Area No. 1 will range from $3,457 to $4,719.

The current annual Special Tax rates for a single-family home within Improvement Area No. 2 range from $3,036 to $3,511. If the Second Amended RMA for Improvement Area No. 2 is approved, the annual Special Tax rates for a single-family home within Improvement Area No. 2 will range from $3,619 to $4,882.

On July 22, 2025, the City Council adopted Resolution No. 2025-51 stating its intention to consider approval of each Second Amended RMA and called for a public hearing to be held on the approval of such matters. In connection with the public hearing, Spicer Consulting Group has prepared a CFD Public Hearing Report, which describes and analyzes the facilities to be financed by the CFD and the estimated costs of such facilities.

Following the close of the public hearing, the City Council will be asked to adopt a resolution approving each Second Amended RMA which approves the levy of the special taxes in each Improvement Area per the applicable Second Amended RMA and increases the authorized bonded indebtedness in Improvement Area No. 1 from $14,000,000 to $16,000,000 and in in Improvement Area No. 2 from $10,000,000 to $12,000,000. Such resolution calls for elections to submit to the qualified voters in Improvement Area No. 1 and Improvement Area No. 2 ballot measures on the approval of the special taxes in accordance with the applicable Second Amended RMA.

CFD 2021-1 (Tuscany Valley/Crest)

Page 3 of 3 ends

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On file with the City Clerk are Certificates of the Registrar of Voters of Riverside County certifying that no registered voters are residing within the boundaries of the CFD. Accordingly, under the Mello-Roos Act, only property owners owning land in each Improvement Area are eligible to vote at the election for such Improvement Area, with each owner having one vote for each acre (or portion thereof) that they own within such Improvement Area. The Developer has executed a consent and waiver of certain election procedures to the election for each Improvement Area, including certain timing requirements with respect to the elections, all under the Mello-Roos Act.

Accordingly, if the City Council approves the resolution approving each Second Amended RMA, the City Clerk will conduct the elections. The City Clerk will announce the election results, and the City Council will be asked to adopt the Resolution Certifying the Election Results. Based on certification that 2/3rds of the votes cast are in favor of the propositions voted upon in each Improvement Area, the Resolution Certifying the Election Results directs the City Clerk to record an amended and restated notice of special tax lien on the property within each Improvement Area.

The City Council will then be asked to introduce the Ordinance authorizing the levy of the special tax within each Improvement Area per the applicable Second Amended RMA.

Fiscal Impact
The Developer has made a deposit to pay for the costs of the change proceedings. The Developer will be reimbursed for such costs if and when bonds are issued for the District.

The District will annually levy special taxes on all of the taxable property within each Improvement Area of the District per the applicable Second Amended RMA in order to pay for the costs of facilities, debt service on bonds for the respective Improvement Area, and administration of the District. Any bonds issued by the District for each Improvement Area are not obligations of the City and will be secured solely by the Special Taxes levied in the applicable Improvement Area.

The Funding Agreement provides the terms under which KB HOME Cal Management Services LLC may be reimbursed for these costs if and when bonds are issued for CFD.

Attachments
Attachment 1 - Resolution Approving each Second Amended RMA Attachment 2 - Resolution Certifying the Election Results Attachment 3 - Ordinance Authorizing the Levy of Special Tax Attachment 4 - Certificates of the Registrar of Voters
Attachment 5 - Landowner Waivers for Improvement Area 1 Attachment 6 - Landowner Waivers for Improvement Area 2 Attachment 7 - Public Hearing Report
Attachment 8 – Acquisition, Construction, and Funding Agreement Attachment 9 – Joint Community Facilities Agreement (EVMWD) Attachment 10- Affidavit of Posting
Administrative Services
4885-7878-5032v4/022042-0035
RESOLUTION NO. 2025-______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,

CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY

VALLEY/CREST), APPROVING AN AMENDED AND RESTATED RATE AND

METHOD OF APPORTIONMENT OF SPECIAL TAX FOR EACH OF IMPROVEMENT AREA NO. 1 AND IMPROVEMENT AREA NO. 2 OF THE DISTRICT AND

INCREASING THE AUTHORIZED BONDED INDEBTEDNESS FOR EACH OF IMPROVEMENT AREA NO. 1 AND IMPROVEMENT AREA NO. 2 OF THE DISTRICT

AND CALLING ELECTIONS THEREIN
Whereas, on March 23, 2021, the City Council of the City of Lake Elsinore (the “City Council”) adopted Resolution No. 2021-25 stating its intention to form Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (“Community Facilities District No. 2021-1” or the “District”) and designate Improvement Area No. 1 (“Improvement Area No. 1”) and Improvement Area No. 2 (“Improvement Area No. 2” and together with Improvement Area No. 1, the “Improvement Areas”) therein pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”); and
Whereas, on March 23, 2021, the City Council also adopted Resolution No. 2021-26 stating its intention to incur bonded indebtedness within Improvement Area No. 1 in the amount not to exceed $14,000,000 and within Improvement Area No. 2 in the amount not to exceed $10,000,000 to finance the facilities and improvements identified in Resolution No. 2021-53 (collectively, the “Improvements”), and the incidental expenses to be incurred in financing the Improvements and forming and administering the District (the “Incidental Expenses”); and Whereas, a notice calling a public hearing on April 27, 2021, was published as required by law relative to the intention of the City Council to establish Community Facilities District No. 2021-1 and to incur bonded indebtedness within Community Facilities District No. 2021-1 for the Improvement Areas; and
Whereas, on April 27, 2021, the City Council conducted a noticed public hearing to determine whether it should proceed with the establishment of Community Facilities District No. 2021-1, issue bonds for the benefit of Community Facilities District No. 2021-1 to pay for the Improvements and Incidental Expenses and authorize the rate and method of apportionment of the special taxes for Improvement Area No. 1 in the form attached as Attachment C to Resolution No. 2021-25 (the “Improvement Area No. 1 Rate and Method”) and the rate and method of apportionment of the special taxes for Improvement Area No. 2 in the form attached as Attachment D to Resolution No. 2021-25 (the “Improvement Area No. 2 Rate and Method”) to be levied within Improvement Area No. 1 and Improvement Area No. 2, respectively, for the purposes described in the Resolution of Formation (defined below); and Whereas, at the April 27, 2021, public hearing all persons desiring to be heard on all matters pertaining to the establishment of Community Facilities District No. 2021-1, the levy of the special taxes in accordance with the Improvement Area No. 1 Rate and Method and the Improvement Area No. 2 Rate and Method and the issuance of bonds within Community Facilities District No. 2021-1 for Improvement Area No. 1 and Improvement Area No. 2 to pay for the cost of the 2 4885-7878-5032v4/022042-0035
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6 proposed Improvements and Incidental Expenses were heard and a full and fair hearing was held; and
Whereas, after the public hearing, on April 27, 2021, the City Council adopted Resolution Nos. 2021-53 (the “Resolution of Formation”) and 2021-54 which formed the District, designated Improvement Area No. 1 and Improvement Area No. 2 therein and called a special election on April 27, 2021, within each of Improvement Area No. 1 and Improvement Area No. 2 on propositions relating to the levying of the special taxes, the incurring of bonded indebtedness and the establishment of an appropriations limit for the District, which were approved by more than two-thirds vote by the qualified electors on April 27, 2021; and Whereas, pursuant to Resolution No. 2021-55, adopted on April 27, 2021, the City Council, acting as the legislative body of Community Facilities District No. 2021-1, declared the results of the special elections and directed the recording of notices of special tax liens within Improvement Area No. 1 and Improvement Area No. 2 of Community Facilities District No. 2021-1; and Whereas, on December 14, 2021, the City Council, acting as the legislative body of Community Facilities District No. 2021-1, adopted Resolution No. 2021-130, stating its intention to consider the approval of an Amended and Restated Rate and Method of Apportionment for each of Improvement Area No. 1 and Improvement Area No. 2 (the “Amended and Restated Rate and Methods”); and
Whereas, a notice calling a public hearing on January 25, 2022, was published as required by law relative to the intention of the City Council to consider the approval of the Amended and Restated Rate and Methods; and
Whereas, on January 25, 2022, this Council conducted a noticed public hearing to determine whether it should proceed with the approval of the Amended and Restated Rate and Methods; and
Whereas, at the January 25, 2022, public hearing all persons desiring to be heard on all matters pertaining to the approval of the Amended and Restated Rate and Methods were heard and a full and fair hearing was held; and
Whereas, after the public hearing, on January 25, 2022 the City Council adopted Resolution No. 2022-9 which approved the Amended and Restated Rate and Method and called a special election on January 25, 2022, within each of Improvement Area No. 1 and Improvement Area No. 2 on a proposition relating to the approval of the Amended and Restated Rate and Method, which was approved by more than two-thirds vote by the qualified electors on January 25, 2022; and Whereas, pursuant to Resolution No. 2022-10, adopted on January 25, 2022, the City Council, acting as the legislative body of Community Facilities District No. 2021-1, declared the results of the special elections and directed the recording of notices of special tax liens within Improvement Area No. 1 and Improvement Area No. 2 of Community Facilities District No. 2021-1; and Whereas, the District has received a petition signed by KB HOME Cal Management Services LLC, a Delaware limited liability company (the “Owner”), which owns all of the land within Community Facilities District No. 2021-1, the boundaries of which are described in the Resolution of Consideration (defined below) which petition meets the requirements of Section 53332 of the Act, requesting that the District initiate proceedings to (i) approve the new rate and method of apportionment for Improvement Area No. 1, attached to the Resolution of Consideration as 3 4885-7878-5032v4/022042-0035
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6 Attachment “B” (the “Second Amended and Restated Improvement Area No. 1 Rate and Method”) and the new rate and method of apportionment for Improvement Area No. 2, attached to the Resolution of Consideration as Attachment “C” (the “Second Amended and Restated Improvement Area No. 2 Rate and Method” and together with the Second Amended and Restated Improvement Area No. 1 Rate and Method, the “Rates and Methods”) and (ii) increase the authorized bonded indebtedness with respect to Improvement Area No. 1 from $14,000,000 to $16,000,000 and increase the authorized bonded indebtedness with respect to Improvement Area No. 2 from $10,000,000 to $12,000,000; and
Whereas, on July 22, 2025, the City Council, acting as the legislative body of Community Facilities District No. 2022-1, adopted Resolution No. 2025-51 (the “Resolution of Consideration”), stating its intention to consider the approval of the Rates and Methods; and Whereas, a notice calling a public hearing on August 26, 2025, was published as required by law relative to the intention of the City Council to consider the approval of the Rates and Methods and approval of increasing the authorized bonded indebtedness with respect to Improvement Area No. 1 and Improvement Area No. 2; and
Whereas, on August 26, 2025, this Council conducted a noticed public hearing to determine whether it should proceed with the approval of the Rates and Methods and approval of increasing the authorized bonded indebtedness with respect to Improvement Area No. 1 and Improvement Area No. 2; and
Whereas, at the August 26, 2025, public hearing all persons desiring to be heard on all matters pertaining to the approval of the Rates and Methods and approval of increasing the authorized bonded indebtedness with respect to Improvement Area No. 1 and Improvement Area No. 2 were heard and a full and fair hearing was held; and
Whereas, at the August 26, 2025 public hearing there was filed with this City Council a report containing a description of the facilities necessary to meet the needs of the District and an estimate of the cost of such facilities as required by Section 53321.5 of the Act (the “Engineer’s Report”); and
Whereas, the City Council has determined that there have been fewer than twelve registered voters residing in the District for the period of 90 days prior to August 26, 2025, and that the qualified electors in each Improvement Area are the landowners within such Improvement Area; and
Whereas, on the basis of all of the foregoing, the City Council has determined at this time to proceed with the approval of the Rates and Methods and approval of increasing the authorized bonded indebtedness with respect to Improvement Area No. 1 and Improvement Area No. 2 as described herein;

NOW, THEREFORE, THE CITY COUNCIL OF CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF

LAKE ELSINORE (TUSCANY VALLEY/CREST), DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOW:

Section 1.Each of the above recitals is true and correct. 4 4885-7878-5032v4/022042-0035
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6 Section 2. The City Council hereby adopts the Second Amended and Restated Improvement Area No. 1 Rate and Method as the rate and method for Improvement Area No. 1. Except where funds are otherwise available, it is the intention of the City Council, subject to the approval of the eligible voters within Improvement Area No. 1, to levy the proposed special taxes at the rates for Improvement Area No. 1 set forth in the Second Amended and Restated Improvement Area No. 1 Rate and Method on all non-exempt property within Improvement Area No. 1 sufficient to pay for (i) the Improvements, (ii) the principal and interest and other periodic costs on the bonds proposed to be issued by the District for Improvement Area No. 1 to finance the Improvements and Incidental Expenses, including the establishment and replenishment of reserve funds, any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments which serve as the basis of a reserve fund in lieu of cash), administrative expenses and other expenses of the type permitted by Section 53345.3 of the Act; and (iii) the Incidental Expenses.

The Second Amended and Restated Improvement Area No. 1 Rate and Method is described in detail in Attachment “B” to the Resolution of Consideration which is incorporated herein by this reference, and the City Council hereby finds that the Second Amended and Restated Improvement Area No. 1 Rate and Method contains sufficient detail to allow each landowner within Improvement Area No. 1 to estimate the maximum amount that may be levied against each parcel. The Special Tax (as defined in the Second Amended and Restated Improvement Area No. 1 Rate and Method) shall be levied on each assessor’s parcel within Improvement Area No. 1 for a period not to exceed Fiscal Year 2069-70.

The City Council hereby adopts the Second Amended and Restated Improvement Area No. 2 Rate and Method as the rate and method for Improvement Area No. 2. Except where funds are otherwise available, it is the intention of the City Council, subject to the approval of the eligible voters within Improvement Area No. 2, to levy the proposed special taxes at the rates for Improvement Area No. 2 set forth in the Second Amended and Restated Improvement Area No. 2 Rate and Method on all non-exempt property within Improvement Area No. 2 sufficient to pay for (i) the Improvements, (ii) the principal and interest and other periodic costs on the bonds proposed to be issued by the District for Improvement Area No. 2 to finance the Improvements and Incidental Expenses, including the establishment and replenishment of reserve funds, any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments which serve as the basis of a reserve fund in lieu of cash), administrative expenses and other expenses of the type permitted by Section 53345.3 of the Act; and (iii) the Incidental Expenses.

The Second Amended and Restated Improvement Area No. 2 Rate and Method is described in detail in Attachment “C” to the Resolution of Consideration which is incorporated herein by this reference, and the City Council hereby finds that the Second Amended and Restated Improvement Area No. 2 Rate and Method contains sufficient detail to allow each landowner within Improvement Area No. 2 to estimate the maximum amount that may be levied against each parcel. The Special Tax (as defined in the Second Amended and Restated Improvement Area No. 2 Rate and Method) shall be levied on each assessor’s parcel within Improvement Area No. 2 for a period not to exceed Fiscal Year 2069-70.

Section 3. The City Council hereby approves increasing the authorized indebtedness for Improvement Area No. 1 from $14,000,000 to $16,000,000.

Section 4. The City Council hereby approves increasing the authorized indebtedness for Improvement Area No. 2 from $10,000,000 to $12,000,000.

Section 5. Upon recordation of a second amended and restated notice of special tax lien pursuant to Section 3114.5 of the Streets and Highways Code for each of the Improvement Areas, a continuing lien to secure each levy of the special tax shall attach to all non-exempt real property 5 4885-7878-5032v4/022042-0035
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6 in each of such Improvement Areas and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the special tax for such Improvement Area ceases.

Section 6. The indebtedness is to be incurred for the purpose of financing the costs of purchasing, constructing, modifying, expanding, improving, or rehabilitating the Improvements, as described in Resolution No. 2021-53, financing the Incidental Expenses, and carrying out the powers and purposes of Community Facilities District No. 2021-1, including, but not limited to, financing the costs of selling the bonds, establishing and replenishing bond reserve funds and paying remarketing, credit enhancement and liquidity facility fees (including such fees for instruments which serve as the basis of a reserve fund in lieu of cash), administrative expenses and other expenses of the type authorized by Section 53345.3 of the Act.

Section 7. Written protests against the approval of the Second Amended and Restated Improvement Area No. 1 Rate and Method and the Second Amended and Restated Improvement Area No. 2 Rate and Method have not been filed by one-half or more of the registered voters within the boundaries of the District or either Improvement Area or by the property owners of one- half or more of the area of land within the boundaries of the District or either Improvement Area.

The City Council hereby finds that the approval of the Second Amended and Restated Improvement Area No. 1 Rate and Method and the Second Amended and Restated Improvement Area No. 2 Rate and Method with respect to the applicable Improvement Area has not been precluded by a majority protest pursuant to Section 53337 of the Act.

Section 8. An election is hereby called for Improvement Area No. 1 on the proposition of approving the Second Amended and Restated Improvement Area No. 1 Rate and Method and increasing the authorized bonded indebtedness with respect to Improvement Area No. 1 from $14,000,000 to $16,000,000. The proposition to be placed on the ballot for the District is attached hereto as Attachment “A.” Following certification of a landowner vote in favor of the adoption of the Second Amended and Restated Improvement Area No. 1 Rate and Method and increasing the authorized bonded indebtedness with respect to Improvement Area No. 1 from $14,000,000 to $16,000,000, the District shall record a second amended and restated notice of special tax lien Improvement Area No. 1.

An election is hereby called for Improvement Area No. 2 on the proposition of approving the Second Amended and Restated Improvement Area No. 2 Rate and Method and increasing the authorized bonded indebtedness with respect to Improvement Area No. 2 from $10,000,000 to $12,000,000. The proposition to be placed on the ballot for the District is attached hereto as Attachment “B.” Following certification of a landowner vote in favor of the adoption of the Second Amended and Restated Improvement Area No. 2 Rate and Method and increasing the authorized bonded indebtedness with respect to Improvement Area No. 2 from $10,000,000 to $12,000,000, the District shall record a second amended and restated notice of special tax lien Improvement Area No. 2.

Section 9. The date of the foregoing election for each of the Improvement Areas shall be August 26, 2025, or such later date as is consented to by the City Clerk and the landowners within the applicable Improvement Area. The City Clerk shall conduct the elections. Except as otherwise provided by the Act, the elections shall be conducted by personally delivered or mailed ballots and, except as otherwise provided by the Act, the elections shall be conducted in accordance with the provisions of law regulating elections of the City insofar as such provisions are determined by the City Clerk to be applicable.
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6 Section 10. It is hereby found that there are not more than twelve registered voters within the territory of either Improvement Area, and, pursuant to Section 53326 of the Act, each landowner who is the owner of record on the date hereof, or the authorized representative thereof, shall have one vote for each acre or portion thereof that he or she owns within the respective Improvement Area.

Section 11. The preparation of the Engineer’s Report is hereby ratified. The Engineer’s Report, as submitted, is hereby approved and was made a part of the record of the public hearing regarding the amendments to the rates and methods of apportionment of special tax for the Improvement Areas. The Engineer’s Report is ordered to be kept on file with the transcript of these proceedings and open for public inspection.

Section 12. This Resolution shall take effect immediately upon its adoption.

Section 13. The City Clerk shall certify to the adoption of this Resolution and enter it into the book of original Resolutions.

Passed and Adopted on this 26 th day of August, 2025.
_____________________________
Brian Tisdale, Mayor
Attest:
_____________________________
Candice Alvarez, MMC
City Clerk
7 4885-7878-5032v4/022042-0035
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6 STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

CITY OF LAKE ELSINORE )
I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Resolution No. 2025-______ was adopted by the City Council of the City of Lake Elsinore, California, at the Regular meeting of August 26, 2025 and that the same was adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
________________________________
Candice Alvarez, MMC
City Clerk

ATTACHMENT A
4885-7878-5032v4/022042-0035
ATTACHMENT “A”

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2021-1

OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
(IMPROVEMENT AREA NO. 1)

SPECIAL ELECTION
August 26, 2025
This ballot represents 29 votes.

To vote, write or stamp a cross (“+” or “X”) in the voting square after the word “YES” or after the word “NO”. All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.

If you wrongly mark, tear or deface this ballot, return it to the City Clerk of City of Lake Elsinore and obtain another.

PROPOSITION A: Shall a special tax with a Second Amended and Restated Rate and Method of Apportionment (the “Second Amended and Restated Rate and Method”) as provided in Attachment “B” to Resolution No. 2025-51 adopted by the City Council of the City of Lake Elsinore on July 22, 2025, acting as the legislative body of Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”), be levied to pay for the Facilities, Incidental Expenses (as defined in Resolution No. 2021-53) and other purposes described in Resolution No. 2021-53, adopted by the City Council of the City of Lake Elsinore on April 27, 2021, including the payment of the principal of and interest on bonds issued by the District for Improvement Area No. 1 of the District to finance the Improvements and Incidental Expenses?
YES____
NO_____
PROPOSITION B: Shall the maximum authorized bonded indebtedness with respect to Improvement Area No. 1 be increased from $14,000,000 to $16,000,000, with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 2021-53 adopted by the City Council of the City of Lake Elsinore on April 27, 2021?
YES____
NO_____

ATTACHMENT B
4885-7878-5032v4/022042-0035
ATTACHMENT “B”

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2021-1

OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
(IMPROVEMENT AREA NO. 2)

SPECIAL ELECTION
August 26, 2025
This ballot represents 20 votes.

If you wrongly mark, tear or deface this ballot, return it to the City Clerk of City of Lake Elsinore and obtain another.

PROPOSITION A: Shall a special tax with a Second Amended and Restated Rate and Method of Apportionment (the “Second Amended and Restated Rate and Method”) as provided in Attachment “C” to Resolution No. 2025-51 adopted by the City Council of the City of Lake Elsinore on July 22, 2025, acting as the legislative body of Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”), be levied to pay for the Facilities, Incidental Expenses (as defined in Resolution No. 2021-53) and other purposes described in Resolution No. 2021-53, adopted by the City Council of the City of Lake Elsinore on April 27, 2021, including the payment of the principal of and interest on bonds issued by the District for Improvement Area No. 2 of the District to finance the Improvements and Incidental Expenses?
YES____
NO_____
PROPOSITION B: Shall the maximum authorized bonded indebtedness with respect to Improvement Area No. 2 be increased from $10,000,000 to $12,000,000, with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 2021-53 adopted by the City Council of the City of Lake Elsinore on April 27, 2021?
YES______
NO_______
RESOLUTION NO. 2025-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,

ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST), CERTIFYING THE RESULTS OF THE AUGUST 26, 2025, SPECIAL ELECTIONS
Whereas, the City Council (the “Council”) of City of Lake Elsinore (the “City”), acting as the legislative body of Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (“CFD No. 2021-1” or the “District”) called and duly held elections on August 26, 2025, within the boundaries of Improvement Area No. 1 of the District (“Improvement Area No. 1”) and within the boundaries of Improvement Area No. 2 of the District (“Improvement Area No. 2”) pursuant to Resolution No. 2025-51 for the purpose of presenting to the qualified electors within Improvement Area No. 1, Propositions A and B attached hereto as Exhibit “A,” and within Improvement Area No. 2, Propositions A and B attached hereto as Exhibit “B”; and, Whereas, there has been presented to the Council a certificate of the City Clerk canvassing the results of the elections, a copy of which is attached hereto as Exhibit “C”;

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2021-1

OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST), DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS:

Section 1. Each of the above recitals is true and correct and is adopted by the legislative body of the District.

Section 2. Propositions A and B presented to the qualified electors of Improvement Area No. 1 on August 26, 2025, as set forth in Exhibit “A” hereto, were approved by more than two-thirds of the votes cast at said election held for Improvement Area No. 1, and Propositions A and B each have carried. The Council is hereby authorized to levy on the land within Improvement Area No. 1 the special tax described in Proposition A as set forth in Exhibit “A” hereto for the purposes described therein and to take the necessary steps to levy the special tax authorized by Proposition A as set forth in Exhibit “A” hereto and to issue bonds in an amount not to exceed $14,000,000 specified in Proposition B.

Propositions A and B presented to the qualified electors of Improvement Area No. 2 on August 26, 2025, as set forth in Exhibit “B” hereto, were approved by more than two-thirds of the votes cast at said election held for Improvement Area No. 2, and Propositions A and B each have carried. The Council is hereby authorized to levy on the land within Improvement Area No. 2 the special tax described in Proposition A as set forth in Exhibit “B” hereto for the purposes described therein and to take the necessary steps to levy the special tax authorized by Proposition A as set forth in Exhibit “B” hereto and to issue bonds in an amount not to exceed $12,000,000 specified in Proposition B.

Section 3.The City Clerk is hereby directed to record in the Office of the County Recorder within fifteen days of the date hereof a second amended and restated notice of special tax lien with respect to Improvement Area No. 1 and a second amended and restated notice of special tax lien with respect to Improvement Area No. 2. which Bond Counsel to the District shall prepare in the form required by Streets and Highways Code Section 3114.5.

CC Reso. No. 2025-

Page 2 of 5 ends

2 3
9 3
9 5
Section 4.This Resolution shall take effect immediately upon its adoption.

Section 5. The City Clerk shall certify to the adoption of this Resolution and enter it into the book of original Resolutions.

Passed and Adopted at a regular meeting of the City Council of the City of Lake Elsinore, California, this ____ day of _____________ 2025.

Brian Tisdale
Mayor
Attest:

Candice Alvarez, MMC
City Clerk

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

CITY OF LAKE ELSINORE )
I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Resolution No. 2025-____ was adopted by the City Council of the City of Lake Elsinore, California, at the Regular meeting of ___________ __, 2025 and that the same was adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Candice Alvarez, MMC
City Clerk

ATTACHMENT A
EXHIBIT “A”

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2021-1

OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
(IMPROVEMENT AREA NO. 1)

SPECIAL ELECTION
August 26, 2025
This ballot represents 29 votes.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Lake Elsinore and obtain another.

PROPOSITION A: Shall a special tax with a Second Amended and Restated Rate and Method of Apportionment (the “Second Amended and Restated Rate and Method”) as provided in Exhibit “B” to Resolution No. 2025-51 adopted by the City Council of the City of Lake Elsinore on July 22, 2025, acting as the legislative body of Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”), be levied to pay for the Facilities, Incidental Expenses (as defined in Resolution No. 2021-53) and other purposes described in Resolution No. 2021-53, adopted by the City Council of the City of Lake Elsinore on April 27, 2021, including the payment of the principal of and interest on bonds issued by the District for Improvement Area No. 1 of the District to finance the Improvements and Incidental Expenses?
YES____
NO_____
PROPOSITION B: Shall the maximum authorized bonded indebtedness with respect to Improvement Area No. 1 be increased from $14,000,000 to $16,000,000, with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 2021-53 adopted by the City Council of the City of Lake Elsinore on April 27, 2021?
YES____
NO_____

ATTACHMENT B
EXHIBIT “B”

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2021-1

OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
(IMPROVEMENT AREA NO. 2)

SPECIAL ELECTION
August 26, 2025
This ballot represents 20 votes.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Lake Elsinore and obtain another.

PROPOSITION A: Shall a special tax with a Second Amended and Restated Rate and Method of Apportionment (the “Second Amended and Restated Rate and Method”) as provided in Exhibit “C” to Resolution No. 2025-51 adopted by the City Council of the City of Lake Elsinore on July 22, 2025, acting as the legislative body of Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”), be levied to pay for the Facilities, Incidental Expenses (as defined in Resolution No. 2021-53) and other purposes described in Resolution No. 2021-53, adopted by the City Council of the City of Lake Elsinore on April 27, 2021, including the payment of the principal of and interest on bonds issued by the District for Improvement Area No. 2 of the District to finance the Improvements and Incidental Expenses?
YES____
NO_____
PROPOSITION B: Shall the maximum authorized bonded indebtedness with respect to Improvement Area No. 2 be increased from $10,000,000 to $12,000,000, with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 2021-53 adopted by the City Council of the City of Lake Elsinore on April 27, 2021?
YES______
NO_______

ATTACHMENT C
EXHIBIT “C”

CERTIFICATE OF CITY CLERK

AS TO THE RESULTS OF THE CANVASS OF THE ELECTION RETURNS I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, do hereby certify that I have examined the returns of the Special Tax Election for Improvement Area No. 1 of Community Facilities District No. 2021-1 (Tuscany Valley/Crest) of the City of Lake Elsinore (the “District”).

The election was held in the Lake Elsinore Cultural Center at 183 North Main Street, Lake Elsinore, California, on August 26, 2025. I caused to be delivered ballots to each qualified elector. ___ (_) ballots were returned.

I further certify that the results of said election and the number of votes cast for and against Proposition A for Improvement Area No. 1 are as follows:

PROPOSITION A
YES:

NO:

TOTAL:

I further certify that I have examined the returns of the Special Tax Election for Improvement Area No. 2 of the District. The election was held in the Lake Elsinore Cultural Center at 183 North Main Street, Lake Elsinore, California, on August 26, 2025. I caused to be delivered ballots to each qualified elector. ___ (_) ballots were returned.

I further certify that the results of said election and the number of votes cast for and against Proposition B for Improvement Area No. 2 are as follows:

PROPOSITION B
YES:

NO:

TOTAL:

Dated this 26th day of August, 2025.
__________________________
Candice Alvarez, MMC, City Clerk
City of Lake Elsinore
ORDINANCE NO. 2025-

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,

CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST) AUTHORIZING THE LEVY OF SPECIAL TAXES WITHIN IMPROVEMENT AREA NO. 1 AND IMPROVEMENT AREA NO. 2 OF

THE DISTRICT
Whereas, on March 23, 2021, the City Council of the City of Lake Elsinore (the “City Council”) adopted Resolution No. 2021-25 (the “Resolution of Intention”) stating its intention to form Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (“Community Facilities District No. 2021-1” or the “District”) and designate Improvement Area No. 1 (“Improvement Area No. 1”) and Improvement Area No. 2 (“Improvement Area No. 2” and together with Improvement Area No. 1, the “Improvement Areas”) therein pursuant to the Mello- Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”); and Whereas, on March 23, 2021, the City Council also adopted Resolution No. 2021-26 stating its intention to incur bonded indebtedness within Improvement Area No. 1 in the amount not to exceed $14,000,000 and within Improvement Area No. 2 in the amount not to exceed $10,000,000 to finance the facilities and improvements identified in Resolution No. 2021-53 (collectively, the “Improvements”), and the incidental expenses to be incurred in financing the Improvements and forming and administering the District (the “Incidental Expenses”); and Whereas, a notice calling a public hearing on April 27, 2021, was published as required by law relative to the intention of the City Council to establish Community Facilities District No. 2021-1 and to incur bonded indebtedness within Community Facilities District No. 2021-1 for the Improvement Areas; and
Whereas, on April 27, 2021, the City Council conducted a noticed public hearing to determine whether it should proceed with the establishment of Community Facilities District No. 2021-1, issue bonds for the benefit of Community Facilities District No. 2021-1 to pay for the Improvements and Incidental Expenses and authorize the rate and method of apportionment of the special taxes for Improvement Area No. 1 in the form attached as Attachment C to Resolution No. 2021-25 (the “Improvement Area No. 1 Rate and Method”) and the rate and method of apportionment of the special taxes for Improvement Area No. 2 in the form attached as Attachment D to Resolution No. 2021-25 (the “Improvement Area No. 2 Rate and Method”) to be levied within Improvement Area No. 1 and Improvement Area No. 2, respectively, for the purposes described in the Resolution of Formation (defined below); and Whereas, at the April 27, 2021, public hearing all persons desiring to be heard on all matters pertaining to the establishment of Community Facilities District No. 2021-1, the levy of the special taxes in accordance with the Improvement Area No. 1 Rate and Method and the Improvement Area No. 2 Rate and Method and the issuance of bonds within Community Facilities District No. 2021-1 for Improvement Area No. 1 and Improvement Area No. 2 to pay for the cost of the proposed Improvements and Incidental Expenses were heard and a full and fair hearing was held; and
Whereas, after the public hearing, on April 27, 2021, the City Council adopted Resolution Nos. 2021-53 (the “Resolution of Formation”) and 2021-54 which formed the District, designated Improvement Area No. 1 and Improvement Area No. 2 therein and called a special election on Ord. No. 2025-

Page 2 of 5 ends

April 27, 2021, within each of Improvement Area No. 1 and Improvement Area No. 2 on propositions relating to the levying of the special taxes, the incurring of bonded indebtedness and the establishment of an appropriations limit for the District, which were approved by more than two-thirds vote by the qualified electors on April 27, 2021; and Whereas, pursuant to Resolution No. 2021-55, adopted on April 27, 2021, the City Council, acting as the legislative body of Community Facilities District No. 2021-1, declared the results of the special elections and directed the recording of notices of special tax liens within Improvement Area No. 1 and Improvement Area No. 2 of Community Facilities District No. 2021- 1; and
Whereas, on December 14, 2021, the City Council, acting as the legislative body of Community Facilities District No. 2021-1, adopted Resolution No. 2021-130, stating its intention to consider the approval of Amended and Restated Rate and Method of Apportionments for each of Improvement Area No. 1 and Improvement Area No. 2 of Community Facilities District No. 2021-1 (the “Amended and Restated Rate and Methods”); and, Whereas, on January 25, 2022, this Council conducted a noticed public hearing to determine whether it should proceed with the approval of the Amended and Restated Rate and Methods; and,
Whereas, at the January 25, 2022, public hearing, all persons desiring to be heard on all matters pertaining to the approval of the Amended and Restated Rate and Methods were heard, and a full and fair hearing was held; and,
Whereas, after the public hearing, on January 25, 2022, the City Council adopted Resolution No. 2022-9 which approved the Amended and Restated Rate and Method and called a special election on January 25, 2022, within the District on a proposition relating to the approval of the Amended and Restated Rate and Methods, which was approved by more than two-thirds vote by the qualified electors on January 25, 2022; and Whereas, pursuant to Resolution No. 2022-9, adopted on January 25, 2022, the City Council, acting as the legislative body of Community Facilities District No. 2021-1, declared the results of the January 25, 2022 special election and directed the recording of notices of special tax liens within Community Facilities District No. 2021-1; and Whereas, the District received a petition signed by KB HOME Cal Management Services LLC, a Delaware limited liability company (the “Owner”), which owns all of the land within Community Facilities District No. 2021-1, the boundaries of which are described herein in the Resolution of Consideration (defined below), which petition meets the requirements of Section 53332 of the Act, requesting that the District initiate proceedings to approve a new rate and method of apportionment for Improvement Area No. 1, attached to the Resolution of Consideration (as defined below) as Attachment “B” (the “Second Amended and Restated Improvement Area No. 1 Rate and Method”) and a new rate and method of apportionment for Improvement Area No. 2, attached to the Resolution of Consideration as Attachment “C” (the “Second Amended and Restated Improvement Area No. 2 Rate and Method” and together with the Second Amended and Restated Improvement Area No. 1 Rate and Method, the “Rates and Methods” and each a “Rate and Method”); and
Whereas, on July 22, 2025, the City Council, acting as the legislative body of Community Facilities District No. 2021-1, adopted Resolution No. 2025-51 (the “Resolution of Consideration”), stating its intention to consider the approval of the Rates and Methods; and, Ord. No. 2025-

Page 3 of 5 ends

Whereas, a notice calling a public hearing on August 26, 2025, was published as required by law relative to the intention of the City Council to consider the approval of the Rates and Methods; and,
Whereas, on August 26, 2025, this Council conducted a noticed public hearing to determine whether it should proceed with the approval of the Rates and Methods; and, Whereas, at the August 26, 2025, public hearing, all persons desiring to be heard on all matters pertaining to the approval of the Rates and Methods were heard, and a full and fair hearing was held; and
Whereas, on August 26, 2025, following the close of the public hearing, the City Council adopted Resolution No. _____ (the “Change Resolution”), which called a special election on August 26, 2025 within Improvement Area No. 1 on the approval of the Second Amended and Restated Improvement Area No. 1 Rate and Method and within Improvement Area No. 2 on the approval of the Second Amended and Restated Improvement Area No. 2 Rate and Method; and Whereas, on August 26, 2025, a special election was held within Improvement Area No. 1 at which the qualified electors approved by more than a two-thirds vote, Proposition A, approving the Second Amended and Restated Improvement Area No. 1 Rate and Method for Improvement Area No. 1; and
Whereas, on August 26, 2025, a special election was held within Improvement Area No. 2 at which the qualified electors approved by more than a two-thirds vote, Proposition B, approving the Second Amended and Restated Improvement Area No. 2 Rate and Method for Improvement Area No. 2; and

NOW, THEREFORE, THE CITY COUNCIL, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST), ORDAINS AS FOLLOWS:

Section 1. The above recitals are all true and correct.

Section 2. By the passage of this Ordinance, the City Council authorizes and levies special taxes within Improvement Area No. 1 in accordance with the Second Amended and Restated Improvement Area No. 1 Rate and Method and within Improvement Area No. 2 in accordance with the Second Amended and Restated Improvement Area No. 2 Rate and Method pursuant to Sections 53328 and 53340 of the Act at the rates therein, which Rates and Methods are incorporated by reference herein.

Section 3. The City Council is hereby further authorized to determine in each subsequent fiscal year, by ordinance, or by resolution if permitted by then applicable law, on or before August 10 of each year, or such later date as is permitted by law, the specific special tax rate and amount to be levied on each parcel of land in an Improvement Area pursuant to the applicable Rate and Method. The special tax rates to be levied pursuant to each Rate and Method shall not exceed the applicable maximum rates set forth therein, but the special tax may be levied at a lower rate.

Section 4. Properties or entities of the state, federal or other local governments shall be exempt from the special tax, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act and the applicable Rate and Method. No other properties or entities are exempt from the special tax unless the properties or entities are expressly exempted in the Resolution of Ord. No. 2025-

Page 4 of 5 ends

Formation and the Change Resolution, or in a resolution of consideration to levy a new special tax or special taxes or to alter the rate or method of apportionment of an existing special tax as provided in Section 53334 of the Act.

Section 5. All of the collections of the special tax pursuant to the Rates and Methods shall be used as provided for in the Act, the Resolution of Formation and the Change Resolution.

The special tax shall be levied within an Improvement Area only so long as needed for the purposes described in the Resolution of Formation and in the Change Resolution.

Section 6. The special tax levied pursuant to the Rates and Methods shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem taxes (which such procedures include the exercise of all rights and remedies permitted by law to make corrections, including, but not limited to, the issuance of amended or supplemental tax bills), as such procedure may be modified by law or by this Council from time to time.

Section 7. As a cumulative remedy, if any amount levied as a special tax for payment of the interest or principal of the Bonds issued by the District for an Improvement Area (including any bonds issued to refund such Bonds), together with any penalties and other charges accruing under this Ordinance, are not paid when due, the City Council may, not later than four years after the due date of the last installment of principal on such Bonds (including any bonds issued to refund such Bonds), order that the same be collected by an action brought in the superior court to foreclose the lien of such special tax within the applicable Improvement Area, as authorized by the Act.

Section 8. The Mayor shall sign this Ordinance, and the City Clerk shall attest to the Mayor’s signature and then cause the same to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated in the City of Lake Elsinore.

Section 9. This Ordinance relating to the levy of the special tax within the District shall take effect 30 days following its final passage, and the specific authorization for adoption is pursuant to the provisions of Section 53340 of the Act. Upon effectiveness, this Ordinance shall supersede Ordinance No. 2021-1456 previously approved by the City with respect to the levy of special taxes of the District.

Section 10. A full reading of this Ordinance is dispensed with prior to its final passage, a written or printed copy having been available to the City Council and the public a day prior to its final passage.

Section 11. The City Clerk is hereby authorized to transmit a certified copy of this ordinance to the Riverside County Assessor and Treasurer-Tax Collector, and to perform all other acts which are required by the Act, this Ordinance, or by law in order to accomplish the purpose of this Ordinance.

Ord. No. 2025-

Page 5 of 5 ends

PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, on this ____ day of _____________ 20___.

Mayor’s Name
Mayor
Attest:

Candice Alvarez, MMC
City Clerk

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

CITY OF LAKE ELSINORE )
I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Ordinance No. 2025-_____ was introduced by the City Council of the City of Lake Elsinore, California, at the Regular meeting of __________ ___, 20___ and adopted at the Regular meeting of __________ ___, 20___ and that the same was adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Candice Alvarez, MMC
City Clerk

1 4905-4399-3402v2/022042-0035

WAIVER OF CERTAIN ELECTION PROCEDURES

WITH RESPECT TO LANDOWNER ELECTION FOR
COMMUNITY FACILITIES DISTRICT NO. 2021-1

OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 1
The undersigned, Scott Hansen, acting on behalf of KB HOME Cal Management Services LLC, a Delaware limited liability company (the “Owner”), hereby certifies to the City of Lake Elsinore (the “City”), with respect to the proposed change proceedings for Improvement Area No. 1 (the “Improvement Area”) of Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”), as follows:

1. The undersigned has been duly authorized by the Owner and possesses all authority necessary to execute this Waiver on behalf of the Owner in connection with the election to be called by the City Council of the City with respect to the District. The Owner hereby appoints Scott Hansen to act as its authorized representative to vote in the election referred to herein and certifies that his true and exact signature is set forth below:

Signature of Scott Hansen: __________________________________

2. The Owner is the present owner of 46.42 acres of land located within the boundaries of the Improvement Area. There are no registered voters residing within the territory owned by the Owner and have been none during the 90-day period preceding August 26, 2025.

3. The Owner has received notice of the August 26, 2025 public hearing to be held by the City Council of the City regarding (i) the approval of a new rate and method of apportionment for the Improvement Area and (ii) increasing the authorized bonded indebtedness with respect to Improvement Area No. 1 from $14,000,000 to $16,000,000 (the “Change Proceedings”). The Owner agrees that it received adequate notice of the August 26, 2025 hearing.

4. The Owner has received from the City and the City has made available to the Owner necessary and relevant information regarding the proposed Change Proceedings, as set forth in Resolution No. 2025-51 adopted by the City Council on July 22, 2025 (the “Resolution”).

5. The undersigned understands that if the Change Proceedings are undertaken on or after August 26, 2025, an election will be held by the District for the Improvement Area on the proposition set forth in the sample ballot attached hereto as Exhibit “A” less than 90 days after the close of the August 26, 2025 public hearing as in accordance with Section 53326 of the Government Code, without the preparation of an impartial analysis, arguments or rebuttals concerning the election as provided for by Elections Code Sections 9160 to 9167, inclusive, and 9190 and without preparation of a tax rate statement as provided in Section 9401 of the Elections Code and without further notice of such election as required pursuant to the Elections Code or the Government Code. Having been fully advised with respect to the election, in accordance with the authority contained in Government Code Sections 53326 and 53327, the Owner waives compliance with the foregoing provisions of the Elections Code and Government Code, with any time limits or other procedural requirements pertaining to the conduct of the election which are not being complied with and consents to having the election on any date on 2 4905-4399-3402v2/022042-0035
or after the close of the August 26, 2025 public hearing and consents to the closing of the election as soon as all ballots are received by the City Clerk.

6. The undersigned hereby represents that compliance with the procedural requirements for conducting the election, including the receipt of any ballot arguments and impartial analysis and the time limitations which apply in connection with scheduling, mailing and publishing notices for such an election, are unnecessary in light of the fact that the undersigned has received sufficient information regarding the imposition of the special tax and the issuance of bonded indebtedness as set forth in the Resolution to allow it to properly complete the attached ballot. The Owner further waives its right to make any protest or complaint or undertake any legal action challenging the validity of the election, the validity of any bonded indebtedness issued by the District for the Improvement Area as approved at the election, or the validity of the authorization of the special tax to finance facilities for the benefit of the District or to repay bonded indebtedness issued by the District for the Improvement Area in accordance with the rate and method of apportionment of special taxes provided in the Resolution.

Dated: August 26, 2025
KB HOME Cal Management Services LLC,
a Delaware limited liability company
By:

Name: Scott Hansen
Title: VP Forward Planning
A-1
4905-4399-3402v2/022042-0035

EXHIBIT A

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2021-1

OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
(IMPROVEMENT AREA NO. 1)

SPECIAL ELECTION
August 26, 2025
This ballot represents 29 votes.

If you wrongly mark, tear or deface this ballot, return it to the City Clerk of City of Lake Elsinore and obtain another.

PROPOSITION A: Shall a special tax with a Second Amended and Restated Rate and Method of Apportionment (the “Second Amended and Restated Rate and Method”) as provided in Attachment “B” to Resolution No. 2025-51 adopted by the City Council of the City of Lake Elsinore on July 22, 2025, acting as the legislative body of Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”), be levied to pay for the Facilities, Incidental Expenses (as defined in Resolution No. 2021-53) and other purposes described in Resolution No. 2021-53, adopted by the City Council of the City of Lake Elsinore on April 27, 2021, including the payment of the principal of and interest on bonds issued by the District for Improvement Area No. 1 of the District to finance the Improvements and Incidental Expenses? YES____
NO_____
PROPOSITION B: Shall the maximum authorized bonded indebtedness with respect to Improvement Area No. 1 be increased from $14,000,000 to $16,000,000, with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 2021-53 adopted by the City Council of the City of Lake Elsinore on April 27, 2021?
YES____
NO_____
1 4915-6753-4650v2/022042-0035

WAIVER OF CERTAIN ELECTION PROCEDURES

WITH RESPECT TO LANDOWNER ELECTION FOR
COMMUNITY FACILITIES DISTRICT NO. 2021-1

OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 2
The undersigned, Scott Hansen, acting on behalf of KB HOME Cal Management Services LLC, a Delaware limited liability company (the “Owner”), hereby certifies to the City of Lake Elsinore (the “City”), with respect to the proposed change proceedings for Improvement Area No. 2 (the “Improvement Area”) of Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”), as follows:

Signature of Scott Hansen: __________________________________

2. The Owner is the present owner of 37.53 acres of land located within the boundaries of the Improvement Area. There are no registered voters residing within the territory owned by the Owner and have been none during the 90-day period preceding August 26, 2025.

3. The Owner has received notice of the August 26, 2025 public hearing to be held by the City Council of the City regarding (i) the approval of a new rate and method of apportionment for the Improvement Area and (ii) increasing the authorized bonded indebtedness with respect to Improvement Area No. 2 from $10,000,000 to $12,000,000 (the “Change Proceedings”). The Owner agrees that it received adequate notice of the August 26, 2025 hearing.

5. The undersigned understands that if the Change Proceedings are undertaken on or after August 26, 2025, an election will be held by the District for the Improvement Area on the proposition set forth in the sample ballot attached hereto as Exhibit “A” less than 90 days after the close of the August 26, 2025 public hearing as in accordance with Section 53326 of the Government Code, without the preparation of an impartial analysis, arguments or rebuttals concerning the election as provided for by Elections Code Sections 9160 to 9167, inclusive, and 9190 and without preparation of a tax rate statement as provided in Section 9401 of the Elections Code and without further notice of such election as required pursuant to the Elections Code or the Government Code. Having been fully advised with respect to the election, in accordance with the authority contained in Government Code Sections 53326 and 53327, the Owner waives compliance with the foregoing provisions of the Elections Code and Government Code, with any time limits or other procedural requirements pertaining to the conduct of the election which are not being complied with and consents to having the election on any date on 2 4915-6753-4650v2/022042-0035
or after the close of the August 26, 2025 public hearing and consents to the closing of the election as soon as all ballots are received by the City Clerk.

Dated: August 26, 2025
KB HOME Cal Management Services LLC,
a Delaware limited liability company
By:

Name: Scott Hansen
Title: VP Forward Planning
A-1
4915-6753-4650v2/022042-0035

EXHIBIT A

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2021-1

OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
(IMPROVEMENT AREA NO. 2)

SPECIAL ELECTION
August 26, 2025
This ballot represents 20 votes.

If you wrongly mark, tear or deface this ballot, return it to the City Clerk of City of Lake Elsinore and obtain another.

PROPOSITION A: Shall a special tax with a Second Amended and Restated Rate and Method of Apportionment (the “Second Amended and Restated Rate and Method”) as provided in Attachment “C” to Resolution No. 2025-51 adopted by the City Council of the City of Lake Elsinore on July 22, 2025, acting as the legislative body of Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”), be levied to pay for the Facilities, Incidental Expenses (as defined in Resolution No. 2021-53) and other purposes described in Resolution No. 2021-53, adopted by the City Council of the City of Lake Elsinore on April 27, 2021, including the payment of the principal of and interest on bonds issued by the District for Improvement Area No. 2 of the District to finance the Improvements and Incidental Expenses? YES____
NO_____
PROPOSITION B: Shall the maximum authorized bonded indebtedness with respect to Improvement Area No. 2 be increased from $10,000,000 to $12,000,000, with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 2021-53 adopted by the City Council of the City of Lake Elsinore on April 27, 2021? YES______
NO_______

NOTICE OF PUBLIC HEARING ON CONSIDERATION TO

APPROVE A SECOND AMENDED AND RESTATED RATE

AND METHOD OF APPORTIONMENT OF SPECIAL TAX
FOR EACH OF IMPROVEMENT AREA NO. 1 AND
IMPROVEMENT AREA NO. 2 OF COMMUNITY
FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE

ELSINORE (TUSCANY VALLEY/CREST) AND INCREASE

THE AUTHORIZED BONDED INDEBTEDNESS FOR
EACH OF IMPROVEMENT AREA NO. 1 AND
IMPROVEMENT AREA NO. 2 OF THE DISTRICT
NOTICE IS HEREBY GIVEN that on July 22, 2025, the City Council (the “City Council”) of the City of Lake Elsinore (the “City”) adopted its Resolution No. 2025-51 (the “Resolution of Consideration”), declaring its intention to approve: (1) an amended and restated rate and method of apportionment of special tax for Improvement Area No. 1 (the “IA No. 1 Second Amended Rate and Method”) of Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (“CFD No. 2021-1” or the “District”); and (2) an amended and restated rate and method of apportionment of special tax for Improvement Area No. 2 (the “IA No. 2 Second Amended Rate and Method”) of the District, pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”) for the purpose of financing certain Facilities and Incidental Expenses (as such terms are defined below).

Additionally, the Resolution of Consideration proposes approving the authorized bonded indebtedness with respect to Improvement Area No. 1 from $14,000,000 to $16,000,000 and approving the authorized bonded indebtedness with respect to Improvement Area No. 2 from $10,000,000 to $12,000,000 (the “Bonded Indebtedness Increase”).

Improvement Area No. 1 and Improvement Area No. 2 of the District are referred to herein each as an “Improvement Area” and together as the “Improvement Areas.” Capitalized terms that are not otherwise defined herein shall have the respective meanings ascribed to them in the Resolution of Consideration and the exhibits thereto.

The proposed Facilities include the construction, purchase, modification, expansion, rehabilitation and/or improvement of (i) drainage, library, park, fire, roadway, traffic, administration and community center facilities, marina and animal shelter facilities, and other public facilities of the City, including the foregoing public facilities which are included in the City’s fee programs with respect to such facilities and authorized to be financed under the Mello-Roos Community Facilities Act of 1982, as amended (the “City Facilities”) and (ii) water and sewer facilities including the acquisition of capacity in the sewer system and/or water system of the Elsinore Valley Municipal Water District which are included in Elsinore Valley Municipal Water District’s water and sewer capacity and connection fee programs (the “Water District Facilities” and together, with the City Facilities, the “Facilities”), and all appurtenances and appurtenant work in connection with the foregoing Facilities, including the cost of engineering, planning, designing, materials testing, coordination, construction staking, construction management and supervision for such Facilities.

The Facilities listed herein are representative of the types of improvements authorized to be financed by CFD No. 2021-1. Detailed scope and limits of specific projects will be determined as appropriate, consistent with the standards of the City. Addition, deletion or modification of descriptions of the Facilities may be made consistent with the requirements of the City Council, CFD No. 2021-1 and the Act.
4936-8185-7082v3/022042-0035
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1 The Incidental Expenses to be paid from bond proceeds and/or special taxes include:

All costs, including (1) costs of the property owner petitioning to form the District, associated with the creation of the District, the issuance of the bonds, the determination of the amount of special taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the District; and (2) any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities.

The Resolution of Consideration specifies the IA No. 1 Second Amended Rate and Method. The Resolution of Consideration proposes a Maximum Special Tax within Improvement Area No. 1 for Developed Property, which shall be the greater of (i) the amount derived by application of the Assigned Special Tax as set forth in the IA No. 1 Second Amended Rate and Method or (ii) the amount derived by application of the Backup Special Tax. For example, the Assigned Special Tax for a Single Family Residential Property in Improvement Area No. 1 ranges from $3,457 per taxable unit with building square footage of less than 1,600 square feet to $4,719 per taxable unit with a building square footage of greater than 2,950 square feet. The Assigned Special Tax on Multifamily Residential Property and Non-Residential Property in Improvement Area No. 1 is $32,023 per acre. The Maximum Special Tax for Undeveloped Property in Improvement Area No. 1 is $32,023 per acre. The foregoing rates shall increase by 2.0% per fiscal year.

The Resolution of Consideration specifies the IA No. 2 Second Amended Rate and Method. The Resolution of Consideration proposes a Maximum Special Tax within Improvement Area No. 2 for Developed Property, which shall be the greater of (i) the amount derived by application of the Assigned Special Tax as set forth in the IA No. 2 Second Amended Rate and Method or (ii) the amount derived by application of the Backup Special Tax. For example, the Assigned Special Tax for a Single Family Residential Property in Improvement Area No. 2 ranges from $3,619 per taxable unit with building square footage of less than 1,600 square feet to $4,882 per taxable unit with a building square footage of greater than 2,950 square feet. The Assigned Special Tax on Multifamily Residential Property and Non-Residential Property in Improvement Area No. 2 is $31,715 per acre. The Maximum Special Tax for Undeveloped Property in Improvement Area No. 2 is $31,715 per acre. The foregoing rates shall increase by 2.0% per fiscal year.

To satisfy the Special Tax Requirement for an Improvement Area, CFD No. 2021-1 shall first levy the Special Tax proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax as needed. If additional moneys are needed to satisfy the Special Tax Requirement, the Special Tax shall be levied: second, proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax for Approved Property; third, proportionately on each Assessor’s Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Undeveloped Property; fourth, increased in equal percentages from the Assigned Special Tax up to the Maximum Special Tax for each Assessor’s Parcel of Developed Property for which the Maximum Special Tax is derived by the application of the Backup Special Tax; and, fifth, proportionately on each Assessor’s Parcel of Provisional Undeveloped Property that is not Exempt Property, at up to 100% of the Maximum Special Tax.

The Backup Special Tax for Improvement Area No. 1 is to be determined in accordance with the IA No. 1 Rate and Method based on the final map within Improvement Area No. 1. The Backup Special Tax for Improvement Area No. 2 is to be determined in accordance with the IA No. 2 Rate and Method based on the final map within Improvement Area No. 2. 4936-8185-7082v3/022042-0035
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1 The Resolution of Consideration proposes that for each year in which any Bonds issued by CFD No. 2021-1 for an Improvement Area are outstanding the Special Tax within such Improvement Area shall be levied on all Assessor’s Parcels subject to the Special Tax within such Improvement Area. If any delinquent Special Tax amounts remain uncollected prior to or after all Bonds issued by CFD No. 2021-1 for such Improvement Area are retired, the Special Tax within such Improvement Area may be levied to the extent necessary to reimburse CFD No. 2021-1 for uncollected Special Tax amounts associated with the levy of such Special Tax within such Improvement Area, but the Special Tax shall not be levied after 2069-70 Fiscal Year.

The foregoing is only a summary of the Resolution of Consideration which is on file with the City Clerk. The full text of the Resolution of Consideration should be referred to by any interested party for greater detail.

PUBLIC HEARING

NOTICE IS HEREBY GIVEN THAT A PUBLIC HEARING WILL BE HELD ON AUGUST 26, 2025, AT THE HOUR OF 7:00 P.M., OR AS SOON THEREAFTER AS SUCH MATTER CAN BE HEARD, AT A REGULAR MEETING OF THE CITY COUNCIL. THE CITY COUNCIL MEETING WILL BE HELD IN THE LAKE ELSINORE CULTURAL CENTER LOCATED AT 183 NORTH MAIN STREET, LAKE ELSINORE, CALIFORNIA. MEMBERS OF THE PUBLIC WHO

WISH TO PARTICIPATE IN THE PUBLIC HEARING ARE ADVISED TO REVIEW THE CITY COUNCIL’S AGENDA FOR INFORMATION WITH RESPECT TO THE METHOD OF PARTICIPATION. ALL AGENDA MATERIALS ARE AVAILABLE FOR REVIEW ON THE CITY’S WEBSITE AT LAKE-ELSINORE.ORG THE FRIDAY BEFORE THE PUBLIC HEARING.

AT THE PUBLIC HEARING, THE CITY COUNCIL WILL HEAR ALL EVIDENCE AND

TESTIMONY BY ALL INTERESTED PERSONS, PROPERTY OWNERS, VOTERS AND TAXPAYERS FOR OR AGAINST (1) THE LEVY OF SPECIAL TAXES FOR EACH IMPROVEMENT AREA IN ACCORDANCE WITH THE IA NO. 1 SECOND AMENDED RATE AND METHOD OR IA NO. 2 SECOND AMENDED RATE AND METHOD, AS APPLICABLE, (2) THE APPROVAL OF THE BONDED INDEBTEDNESS INCREASE, AND (3) ANY OTHER MATTERS AS SET FORTH IN THE RESOLUTION OF CONSIDERATION.

ALL PERSONS INTERESTED, INCLUDING PROPERTY OWNERS, TAXPAYERS AND

REGISTERED VOTERS, MAY PARTICIPATE AT THE PUBLIC HEARING AND PRESENT EVIDENCE AND TESTIMONY ORALLY OR IN WRITING FOR OR AGAINST ITEMS (1) AND (2) ABOVE. EACH INDIVIDUAL WISHING TO SPEAK WILL BE LIMITED TO A THREE MINUTE ORAL PRESENTATION. ANY PROTEST PERTAINING TO THE REGULARITY OR

SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE PROPOSED ISSUES DESCRIBED IN ITEMS (1) AND (2) ABOVE MUST BE IN WRITING AND SHALL CLEARLY

STATE THE IRREGULARITIES OR DEFECTS TO WHICH OBJECTION IS MADE, AND SHALL BE FILED WITH THE CITY CLERK ON OR BEFORE THE TIME SET FOR THE HEARING.

IF THE OWNERS OF ONE-HALF (1/2) OR MORE OF THE AREA OF LAND WITHIN IMPROVEMENT AREA NO. 1 AND NOT EXEMPT FROM THE SPECIAL TAX OF IMPROVEMENT AREA NO. 1 FILE WRITTEN PROTESTS AGAINST ANY OF ITEMS (1) AND (4) ABOVE WITH RESPECT TO IMPROVEMENT AREA NO. 1, AND PROTESTS ARE NOT

WITHDRAWN SO AS TO REDUCE THE VALUE OF THE PROTESTS TO LESS THAN A

MAJORITY, THE CITY COUNCIL SHALL ABANDON THAT PORTION OF THE PROCEEDINGS

PERTAINING TO SUCH ITEM(S) AND NO FURTHER PROCEEDINGS WITH RESPECT TO

SUCH ITEM(S) SHALL BE TAKEN FOR A PERIOD OF ONE YEAR FROM THE DATE OF THE 4936-8185-7082v3/022042-0035
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1 DETERMINATION BY THE CITY COUNCIL. THE CITY COUNCIL MAY MODIFY THE PROCEEDINGS IF SUCH MAJORITY PROTESTS ARE ONLY AGAINST A SPECIFIED ISSUE.

IF THE OWNERS OF ONE-HALF (1/2) OR MORE OF THE AREA OF LAND WITHIN IMPROVEMENT AREA NO. 2 AND NOT EXEMPT FROM THE SPECIAL TAX OF IMPROVEMENT AREA NO. 2 FILE WRITTEN PROTESTS AGAINST ANY OF ITEMS (1) AND (4) ABOVE WITH RESPECT TO IMPROVEMENT AREA NO. 2, AND PROTESTS ARE NOT

WITHDRAWN SO AS TO REDUCE THE VALUE OF THE PROTESTS TO LESS THAN A

MAJORITY, THE CITY COUNCIL SHALL ABANDON THAT PORTION OF THE PROCEEDINGS

PERTAINING TO SUCH ITEM(S) AND NO FURTHER PROCEEDINGS WITH RESPECT TO

SUCH ITEM(S) SHALL BE TAKEN FOR A PERIOD OF ONE YEAR FROM THE DATE OF THE DETERMINATION BY THE CITY COUNCIL. THE CITY COUNCIL MAY MODIFY THE PROCEEDINGS IF SUCH MAJORITY PROTESTS ARE ONLY AGAINST A SPECIFIED ISSUE.

UNDER THE ACT, THE CITY COUNCIL MAY EITHER CONCLUDE THE PUBLIC HEARING ON AUGUST 26, 2025, OR MAY CONTINUE THE PUBLIC HEARING TO A LATER

DATE IF THE COMPLEXITY OF THE PROPOSED CHANGES TO THE DISTRICT OR THE NEED FOR PUBLIC PARTICIPATION REQUIRES ADDITIONAL TIME. IF THE CITY COUNCIL

DETERMINES TO SUBMIT THE QUESTION OF LEVYING THE SPECIAL TAXES IN ACCORDANCE WITH THE IA NO. 1 RATE AND METHOD OR IA NO. 2 RATE AND METHOD,

AS APPLICABLE AND THE BONDED INDEBTEDNESS INCREASE, AN ELECTION WILL BE HELD WITHIN EACH IMPROVEMENT AREA TO APPROVE THE IA NO. 1 RATE AND METHOD OR IA NO. 2 RATE AND METHOD, AS APPLICABLE AND THE BONDED INDEBTEDNESS INCREASE. AT SUCH ELECTIONS, EACH LANDOWNER WITHIN AN IMPROVEMENT AREA

SHALL BE ENTITLED TO CAST ONE VOTE FOR EACH ACRE OR PORTION THEREOF OWNED WITHIN SUCH IMPROVEMENT AREA. FOR A PROPOSITION TO BE ADOPTED,

TWO-THIRDS OF THE VOTES CAST ON THE PROPOSITION AT THE ELECTION MUST FAVOR PASSAGE.

INQUIRIES
The full text of the Resolution of Consideration, which includes the proposed IA No. 1 Rate and Method, the proposed IA No. 2 Rate and Method, the Bonded Indebtedness Increase and the list of Facilities and Incidental Expenses to be financed may be obtained from the person specified below.

For any questions relating to the proceedings, or any particulars, please contact the following designated person:

Mr. Jason Simpson
City Manager
City of Lake Elsinore
130 South Main Street
Lake Elsinore, CA 92530
(951) 674-3124
Candice Alvarez, MMC

CITY CLERK OF THE

CITY OF LAKE ELSINORE
4812-8073-2134v2/022042-0035
COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)

ACQUISITION, CONSTRUCTION AND FUNDING AGREEMENT
THIS AGREEMENT is made and entered into by and between CITY OF LAKE ELSINORE (the “City”), acting for and on behalf of itself and COMMUNITY FACILITIES DISTRICT NO. 2021- 1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST) (the “Community Facilities District” or “CFD”) and KB HOME Cal Management Services LLC, a Delaware limited liability company (the “Developer”), each individually a “Party” and collectively the “Parties.” WHEREAS, the City has established the CFD and designated Improvement Area No. 1 and Improvement Area No. 2 therein (each an “Improvement Area” and together the “Improvement Areas”) pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), and has undertaken proceedings for the authorization of special taxes and issuance of bonded indebtedness for the payment of the construction and/or acquisition of certain public improvements to be owned, operated or maintained by the City and the Elsinore Valley Municipal Water District (the “Water District”) and incidental expenses in accordance with the Act; and
WHEREAS, in order to proceed in a timely way with development of its property within the CFD which is described in the attached Exhibit “A” (the “Developer Property”), Developer desires to fund through the Community Facilities District (i) the City’s acquisition or construction of certain public improvements that are to be owned, operated and maintained by the City (“City Improvements”), as more particularly set forth and described in the Description of Cost Estimates of the Improvements attached hereto as Exhibit “B,” (ii) improvements included in the City’s fee programs (the “City Fee Facility Improvements”), as more particularly set forth and described in Exhibit “B” and (iii) the improvements of the Water District described in Exhibit “E” hereto (the “Miscellaneous Improvements”) (collectively the “Improvements”); and WHEREAS, the City is authorized by the Act to form the CFD and to issue bonds to fund the Improvements; and
WHEREAS, the City Council has adopted the City’s policies and procedures concerning the use of special district financing programs to finance City facilities (the “Policy”); and WHEREAS, the purpose of this Agreement is to constitute a formal understanding between Developer and the City (pursuant to the requirements of Government Code Section 53313.51 and other provisions of the Act and the Policy) concerning financial and other obligations and responsibilities related to the Improvements to be financed by the Community Facilities District to the extent funds are available, and to set forth the conditions upon which (1) the Community Facilities District will reimburse Developer or its designee for the cost of the City Improvements constructed by or on behalf of the Developer and (2) the Community Facilities District will fund the City Fee Facility Improvements and the City will grant credit against applicable City fees; and (3) the Community Facilities District will also fund Miscellaneous Improvements, if any, which will be described in Exhibit “E,” if applicable. 2 4812-8073-2134v2/022042-0035
NOW, THEREFORE, it is mutually agreed between the respective Parties as follows:

SECTION 1. DEVELOPER ADVANCES
The City has retained and may retain, at the Developer’s expense, the necessary consultants to analyze the formation proceedings and any future change proceedings with respect to the CFD (the “Proceedings”), including a special tax consultant, bond counsel, appraiser and other consultants deemed necessary by the City. The Developer has advanced to the City a sum of money for such expenses, part of which may be eligible for reimbursement from the CFD. From time to time, Developer will make additional advances, within 10 days following receipt from the City of a request for an additional advance, to cover the costs of the Formation Proceedings. The City will provide to Developer on request a summary of how the advances have been spent and the unexpended balance remaining. The amounts advanced by the Developer and, to the extent determined reasonable and appropriate by the City, expenses incurred by the Developer for engineering consultant costs in connection with the Proceedings and the issuance of bonds, will be reimbursable to the Developer, without interest, from the proceeds of bonds (the “Bonds”) issued by the Community Facilities District. In the event that Bonds are not issued to provide a source of reimbursement to Developer, the City shall not have any liability to Developer to reimburse it for any of the amounts previously advanced by Developer and expended by the City.

Prior to the issuance of the Bonds, the City will request a final advance for any unpaid expenses incurred during preparatory technical, financial and legal work; and following payment of such expenses, the City shall promptly release the balance, if any, of the advance to the Developer. Should the City’s expenses exceed the remaining balance, the City will bill the Developer for the difference, which the Developer agrees to pay within 10 days following receipt of such billing, subject to the conditions of paragraph one of this section.

SECTION 2. SALE OF BONDS

2.1 City Policies. The City Council has adopted the Policy, setting forth the City’s policies and procedures concerning the use of special district financing programs to finance the Improvements. Pursuant to the Policy, the total annual amount of the special taxes to be collected with respect to a parcel within an Improvement Area and all other taxes and assessments which will be collected with respect to such parcel must not exceed two percent (2%) of the expected assessed value of such parcel within an Improvement Area upon the completion of all expected structural improvements to such parcel. Prior to or in connection with the issuance of Bonds for an Improvement Area, in the event the sum of the special taxes and assessments exceed 2% of the expected assessed value of a parcel within such Improvement Area, the City may require that the Developer or its assignees prepay a portion of the special tax obligation such that sum of the special taxes and assessments does not exceed 2% of such expected assessed value.

The Parties hereby agree that, unless waived by the City, at the time of issuance of the Bonds for an Improvement Area, the following requirements shall be met: (1) the ratio of the value of all parcels of property for which the Bonds are being issued to the amount of outstanding community facilities district or assessment district bonds attributable to such parcels (the “Value- to-Lien Ratio”) may not be less than four-to-one (4:1) and (2) at least 50% of the proposed residential units within such Improvement Area shall have been completed and conveyed to individual homeowners. The fair market value of the property within an Improvement Area for purposes of determining the foregoing ratio will be determined based on the assessed value of the property or the appraised value of the property based on the appraisal made by an appraiser selected by the City with a valuation date within three (3) months of the issuance of the Bonds. 3 4812-8073-2134v2/022042-0035
Subject to satisfaction of the Policy and the requirements of this Agreement, the City shall use its best efforts to issue and sell the Bonds in one or more series for an Improvement Area in an amount sufficient to fund the Improvements in accordance with the schedule for development of the Developer Property.

2.2 Security for Payment of Special Taxes. Concurrently with the issuance and sale of each series of the Bonds for an Improvement Area, the owner of any land within such Improvement Area, together with land owned by any affiliate (collectively, an “Account Party”), for which the Maximum Special Tax (as defined in the Rate and Method of Apportionment of Special Tax for such Improvement Area (each a “Rate and Method”), such Special Tax referred to herein as the “Special Tax” or “Special Taxes”) in the fiscal year following the fiscal year in which the Bonds are issued are equal to or exceed 20% of the total Maximum Special Tax for such fiscal year, shall deliver to the City either (i) a renewable, irrevocable instrument of credit from a financial institution (rated “A” or better) or (ii) cash in-lieu thereof (a “Security”). The Security shall be in an amount equal to two times the expected Special Tax levy on the property in the Improvement Area owned by such Account Party (the “Stated Amount”). The Security shall be maintained by the Account Party in each fiscal year until terminated in accordance with Section 2.2(c) below.

While the Security is still required, the Stated Amount of such Security shall be reduced as set forth in a “Certificate of Reduction or Termination” (as defined in Section 2.2(c) below).

The Security shall name the City, or its designee, as a beneficiary and shall provide that the City, or its designee, may draw an amount equal to any delinquencies in payment of semiannual installments of the Special Taxes levied on property owned by the Account Party in the Improvement Area. The total amount to be drawn under the Security shall not exceed an amount equal to the Special Taxes owed by the Account Party with respect to property within the Improvement Area that is delinquent at the time the draw is made. The amount drawn on the Security shall be applied in the same manner and for the same purposes as the delinquent Special Taxes would have been applied; provided, however the payment of a draw under the Security will not be deemed to cure the delinquency in payment of the Special Taxes.

If, subsequent to a draw on the Security and prior to the satisfaction of any reimbursements due to the institution providing the Security (the “Security Provider”) pursuant to this Agreement, the City receives payment of all or a portion of the delinquent Special Taxes or the proceeds of a sale of delinquent real property pursuant to foreclosure proceedings (“Delinquency Proceeds”) for a parcel for which the Security has been drawn, the Security Provider shall be reimbursed for such draws to the extent of Delinquency Proceeds net of the City’s costs of collection, provided that the Security is or has been concurrently reinstated to, or a Substitute Security (as defined below) provided for, the then applicable Stated Amount. The Security Provider is intended by the Parties to be a third party beneficiary of this Section 2.2. (a) The Security shall be renewed, or a substitute Security reasonably satisfactory to the City (a “Substitute Security”) provided, not less than thirty (30) calendar days prior to the expiration of the Security or Substitute Security then in effect. If the Account Party provides a Substitute Security to the City, then the City or its designee, shall return any existing Security on the effective date of the Substitute Security to the Security Provider.

If the Security is not renewed within thirty (30) days prior to its expiration date and the requirements for release or termination of the Security as set forth in Section 2.2(c) below have not then been met, the full amount of the Security may be drawn by the City and deposited in an account established under the Indenture (as hereinafter defined) for the applicable series of Bonds or in such account established with a financial institution selected by the City. Thereafter, 4 4812-8073-2134v2/022042-0035
amounts in such account shall be held as security, and if Special Taxes owed by the Account Party with respect to property within the Improvement Area are not paid prior to delinquency, then such amounts in such account may be applied by the City to pay the delinquent Special Taxes owed by the Account Party with respect to such property on the same terms and conditions applicable hereunder to draws on the Security.

At such time as the Security is renewed, or a Substitute Security is accepted by the City, or the requirement for the Security has been terminated pursuant to this section, the City or its designee, shall release all amounts in the Security account to the Security Provider within ten (10) calendar days from the date of renewal or acceptance.
(b) Following the sale or transfer by the Account Party of any property within the Improvement Area to a person other than the Account Party, or upon the prepayment of the Special Tax obligation for a parcel owned by the Account Party, the Account Party shall notify the Community Facilities District of such event, in writing, and, if requested by the Account Party, the Stated Amount of the Security shall be reduced and be recalculated in accordance with this Section 2.2; provided, however, that City shall be required to recalculate such amount and reduce the Security a maximum of two times each calendar year and any costs associated with the recalculation and reduction shall be borne by the Account Party. The Security shall be terminated when (i) the Maximum Special Tax levy on the land owned by the Account Party in the Improvement Area is responsible for less than 20% of the Maximum Special Tax levy in the current fiscal year and the Account Party is not delinquent in the payment of any Special Taxes, (ii) the Account Party has paid all Special Taxes in the current fiscal year and the property owned by the Account Party in the Improvement Area is expected to be responsible for less than 20% of the Maximum Special Tax levy in the next fiscal year, or (iii) the Account Party has paid all Special Taxes in the current fiscal year and in the following fiscal year, the Community Facilities District will not levy the Special Tax on property within the Improvement Area owned by the Account Party.

Reduction or termination of a Security shall occur automatically upon submission to the Security Provider by the City of a “Certificate of Reduction or Termination.” The City shall deliver to the Security Provider, such Certificate of Reduction or Termination promptly upon receiving from the Account Party a certification which shall be made under penalty of perjury and which shall indicate (i) the legal description of all land owned by the Account Party, and either (ii) a recalculation of the new Stated Amount that the Account Party proposes be applicable to the Security or (iii) if termination of the Security is requested, a statement that one of the requirements set forth in (i) through (iii) of the preceding paragraph has been satisfied.

The Account Party shall notify the City of any events that will result in a reduction of the Stated Amount of the Security and shall provide the City with verification of said events. The Account Party may provide the City with a Substitute Security in the reduced amount, and the City shall release and return to the Security Provider the Security then in effect. The Parties expressly acknowledge that the Account Party’s failure to so notify the City or to reduce the Security at the times prescribed herein shall in no way effect or invalidate sale or transfer of property, or recordation of maps on property.
(c) If property is sold or transferred by an Account Party with the result that the land owned by the transferee or any of its affiliates (“Transferee”) is responsible for twenty percent (20%) or more of the Maximum Special Tax in the current fiscal year, a Security on the same terms specified herein will be furnished by Transferee with respect to all land owned by such Transferee in the Improvement Area. Any applicable purchase and sale agreement and/or escrow 5 4812-8073-2134v2/022042-0035
instructions shall notify the Transferee of this Security requirement and obligate the Transferee to provide such Security, if applicable. The Security of the Account Party will not be reduced to reflect the sale or transfer of land until a Security is furnished by the Transferee and accepted by the City. The issuing financial institution and the form and terms of said Security will be subject to reasonable prior approval by the City. All terms provided in this Section 2.2 are applicable to the Transferee by replacing the term “Account Party” at each place where it occurs in each section with the term “Transferee.” Each provider of a Security for a Transferee shall be an express third party beneficiary of the provisions of this Section 2.2.

Any costs related to the holding or maintaining the Security, including any fees of a fiscal agent, trustee or other depository shall be borne by the Account Party.

2.3 Major Landowner Initial and Continuing Disclosure. An owner of land within an Improvement Area which is responsible for twenty percent (20%) or more of the Special Tax in the fiscal year in which the Bonds are issued or in the fiscal year following the fiscal year in which the Bonds are issued (a “Major Landowner”) will be required to provide all information regarding the development of its property, including the financing plan for such development, which is necessary to ensure that the official statement for such Bonds complies with the requirements of Rule 15c2-12 of the Securities and Exchange Commission (the “Rule”) and all other applicable federal and state securities laws. Additionally, Developer acknowledges that, if it is a Major Landowner at the time of issuance of a series of Bonds, it will be necessary that Developer enter into a continuing disclosure agreement to provide such continuing disclosure pertaining to the development of the land owned by Developer within an Improvement Area as necessary to assist the underwriter in complying with the continuing disclosure requirements of the Rule and/or to assist in the marketing of the Bonds.

2.4 Bond Issuance Parameters. The terms and conditions upon which each series of the Bonds shall be issued and sold, the method of sale of the Bonds and the pricing of the Bonds shall be determined solely by the City in its reasonable discretion in conformance with the requirements of Government Code Section 53313.5, the Act, the Policy, and this Agreement. The Bonds shall be issued with a term not to exceed 35 years. The proceeds of a series of Bonds shall be used in the following priority to (1) fund a reserve fund for the payment of principal and interest with respect to the Bonds in an amount equal to the least of (i) ten percent (10%) of the total bond issue, (ii) maximum annual debt service on Bonds, or (iii) 125% of average annual debt service; (2) fund up to eighteen (18) months of capitalized interest; (3) reimburse the Developer or its designee pursuant to Section 1 and hereof for the costs described therein which have not already been reimbursed to the Developer from collected Special Tax; (4) pay for costs of issuance of the Bonds including, without limitation, underwriter’s discount, bond counsel and disclosure counsel fees, appraisal and special tax consultant fees, printing, and fiscal agent fees; and (5) pay for the actual costs of the Improvements. The Community Facilities District shall maintain records relating to the disbursements of proceeds of the sale of the Bonds. The Indenture or Resolution (hereinafter “Indenture”) for a series of Bonds shall establish an acquisition and construction fund or improvement fund (herein, the “Improvement Fund”) into which shall be deposited initially the proceeds of the Bonds net of the amount of proceeds required to fund items (1) through (5) in the second preceding sentence. Each Indenture shall also establish separate accounts of the Improvement Fund designated the “City Improvements Account,” “City Fee Facility Improvements Account,” and any Miscellaneous Improvement Account(s) for the Miscellaneous Improvements described in Exhibit “E” if applicable, into which shall be deposited such portions of the Improvement Fund as directed by the City and in writing at or subsequent to the closing of the sale of the Bonds consistent with the following priorities:
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(a) An amount sufficient to fund the reasonable, current estimated cost of the City Fee Facility Improvements anticipated to be funded out of the Bonds being issued shall be deposited in the City Fee Facility Improvements Account (any Special Taxes levied in the CFD and collected by the CFD remaining after the payment of administrative expenses of the CFD and the reimbursement of the Developer for costs pursuant to Section 1 hereof shall be deposited into the City Fee Facility Improvements Account at the time of Bond issuance, unless otherwise directed in writing by the Developer);
(b) An amount equal to 20% of the amount funded in (a) shall be deposited in the City Fee Facility Improvements Account;
(c) If applicable, an amount to be agreed upon between Developer and the CFD prior to the issuance of a series of Bonds sufficient to fund the reasonable, current estimated costs of the City Improvements shall be deposited, or later transferred, to the City Improvements Account; and
(d) If applicable, an amount to be agreed upon between Developer and the CFD prior to the issuance of a series of Bonds sufficient to fund the reasonable, current estimated cost of any Miscellaneous Improvements, if any, described in Exhibit “E” hereto, anticipated to be funded out of the Bonds being issued shall be deposited in the applicable Miscellaneous Improvement Account(s).

Interest earned on moneys deposited in each of the City Fee Facility Improvements Account, the City Improvements Account and the Miscellaneous Improvement Account(s) shall remain in such accounts until such time as all of the Improvements have been funded.

Additionally, the Developer may direct the CFD to transfer excess moneys in any of the City Fee Facility Improvements Account, the City Improvements Account or the Miscellaneous Improvement Account(s) to another Account. The Indenture shall provide that amounts remaining in the Improvement Fund after funding all proposed Improvements or sooner, as agreed by the City and the Developer, shall be deposited in the special tax fund or bond service fund and be applied to pay debt service on the related series of Bonds and/or to call such Bonds in advance of maturity.

SECTION 3. ALLOCATION OF SPECIAL TAXES
Prior to the issuance of a series of Bonds for any Improvement Area, the City Council of the City, acting as the legislative body of the Community Facilities District, may levy Special Taxes on all parcels classified as Developed Property within such Improvement Area pursuant to the applicable Rate and Method. Such Special Taxes collected by the City shall first be applied to fund annual administrative expenses of the Community Facilities District allocated to such Improvement Area and then to fund Improvements in the same manner as the proceeds of Bonds as set forth herein. Upon sale and delivery of the Bonds for an Improvement Area, the City shall annually levy the Special Tax as provided for in documents pursuant to which the Bonds were issued. Following the issuance of the Bonds for an Improvement Area, the City shall have no obligation to levy Special Taxes with such Improvement Area to reimburse the Developer for the costs of any Improvements not paid for from Bond proceeds of such Improvement Area. The entire amount of any Special Tax levied by the Community Facilities District within an Improvement Area to repay the Bonds for such Improvement Area and recover costs and expenses allowable pursuant to Government Code Section 53313.5, shall be allocated to such Improvement Area.
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SECTION 4. NOTICE OF SPECIAL TAX
Developer, or Developer’s successors or assigns, shall provide written notice to all potential initial purchasers of lots advising of the special tax obligation applicable to the Developer Property in the form required by Section 53341.5 of the Government Code. A sample copy as prepared by Developer is attached as Exhibit “C.”
SECTION 5. DESIGN PLANS AND SPECIFICATIONS
The requirements of this Section shall not apply to any City Improvement that was complete (as determined by the City Council) prior to the adoption by the City Council of the resolution forming the CFD, but they shall apply to all other City Improvements. All plans, specifications and bid documents for the City Improvements (“Plans”) constructed or to be constructed by the Developer shall be prepared by the Developer at the Developer’s initial expense, subject to approval by the applicable public agency. Costs for preparation of the Plans will be eligible for reimbursement, conditioned upon the final approval of the applicable public agency and the availability of funds. Reimbursement of costs for plan revisions will be considered on a case by case basis. All facilities shall be bid in accordance with “public works” requirements of Section 6.4 to be eligible for reimbursement. The Developer shall not award bids for construction, or commence or cause commencement of construction, of a City Improvement until the Plans and bidding documents have been approved by the City. The bid opening for City Improvements shall be coordinated with and take place at the City’s facilities, with City personnel in attendance.

SECTION 6. CONSTRUCTION OF IMPROVEMENTS
The requirements of this Section shall not apply to any City Improvement that was complete (as determined by the City Council) prior to the adoption by the City Council of the resolution forming the CFD, but they shall apply to all other City Improvements.

6.1 Construction or Acquisition Election. Upon the approval of Plans for a City Improvement, the Developer and the City shall determine whether the Developer will provide for construction of such City Improvement in accordance with Sections 6.2, 6.4 and 7 of this Agreement (the “Acquisition Election”) or whether the City will provide for construction of such City Improvement in accordance with Section 6.3 of this Agreement (the “Construction Election”).

Sections 6.2, 6.4 and 7 specify the requirements for construction of the City Improvements pursuant to the Acquisition Election that the City believes are necessary to ensure that such City Improvements are constructed as if they had been constructed under the direction and supervision, or under the authority of the City.

6.2 Acquisition Election. If the Acquisition Election is selected with respect to City Improvements in accordance with the provisions of Section 7 hereof, a qualified engineering firm (the “Field Engineer”) shall be employed by the Developer to provide all field engineering surveys determined to be necessary by the City’s inspection personnel. Field Engineer shall promptly furnish to City a complete set of grade sheets listing all locations, offsets, etc., in accordance with good engineering practices, and attendant data and reports resulting from Field Engineer’s engineering surveys and/or proposed facility design changes. City shall have the right, but not the obligation, to review, evaluate and analyze whether such results comply with applicable specifications.
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A full-time soil-testing firm, approved by City, shall be employed by the Developer to conduct soil compaction testing and certification. The Developer shall promptly furnish results of all such compaction testing to the City for its review, evaluation and decision as to compliance with applicable specifications. In the event the compaction is not in compliance with applicable specifications, the Developer shall be fully liable and responsible for the costs of achieving compliance. A final report certifying all required compaction in accordance with the specifications shall be a condition of final acceptance of facilities.

The costs of all surveying, testing and reports associated with the City Improvements furnished and constructed by the Developer’s contractor(s) shall be eligible to be paid from funds in the City Improvements Account.

The City shall not be responsible for conducting any environmental, archaeological, biological, or cultural studies or any mitigation requirements that may be requested by appropriate Federal, State, and/or local agencies. Any such work shall be paid for and conducted by the Developer and reimbursed out of the City Improvements Account.

Notwithstanding the selection of the Acquisition Election with respect to a City Improvement, should the Developer notify the City that the Developer is unable to complete such City Improvement, the City shall have the right but not the obligation to require the Developer to make an irrevocable offer of dedication to the City of the land owned by the Developer for the City Improvement identified in the notice and to assume responsibility for the work to be performed thereunder. In the event the City elects to assume the responsibility for any work on a previously awarded contract as described in the preceding sentence, the following will occur: (i) the Developer will make an irrevocable offer of dedication to the City of the land owned by the Developer for such City Improvement identified in the notice; (ii) to the extent permitted by law and the applicable contract, the Developer will assign all of the contracts for the work performed to date on the City Improvement identified in the notice to the City, if requested to do so by the City Manager; the City will use its best efforts to complete the City Improvement within a reasonable time frame; and upon completion of the City Improvement, to the extent there are Special Taxes or proceeds of the Bonds available following payment to the City for the costs of completing such City Improvement, the Developer will be reimbursed for the lesser of the cost or value of the previously unreimbursed satisfactory work performed or paid for by the Developer.

The cost of such work will be determined by taking the unreimbursed amounts expended by the Developer under the contract(s) taken over by the City and deducting any incremental cost incurred by the City to complete the work under the contracts in question. Incremental cost shall be costs in excess of the sum of the original contract cost plus change orders approved by the City.

6.3 Construction Election. The Developer and the City shall agree on which Improvements shall be constructed by the Developer and which shall be constructed by the City.

If the Construction Election is selected, upon the award of a construction contract for a City Improvement to be constructed by the City, funds in the City Improvements Account in an amount equal to the costs of the City Improvement, shall be reserved for payments under such contract and shall not be available for the funding of other City Improvements until all payments required by such contract have been made. At the time of either or both (i) the execution of a contract for the construction of a City Improvement as to which the Construction Election has been made, and (ii) completion of construction of the City Improvement, the Developer shall be entitled to reimbursement from funds in the City Improvements Account of any actual costs of the City Improvements incurred by the Developer at that time.
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If Bonds have not been issued or insufficient funds are reserved in the Improvement Fund, the City agrees to accept advances of funds from the Developer (if the Developer agrees to make such advances in its sole discretion) upon the City’s award of a construction contract for a City Improvement to be constructed by the City in an amount equal to the difference between the amount of reserved funds and the contract amount. The amount of such advances shall be reimbursed to the Developer to the extent of funds in the City Improvements Account.

PUBLIC WORKS REQUIREMENTS

6.4 City Requirements. In order that the City Improvements as to which the Acquisition Election is made may be properly and readily acquired by the City, the Developer shall comply with all of the following requirements with respect to any such City Improvements to be acquired with funds in the City Improvements Account, and the Developer shall provide such proof to the City as the City may reasonably require and at such intervals and in such form as the City may reasonably require, that the following requirements have been satisfied as to all such City Improvements:
(a) The Developer shall prepare a bid package for review, comment and approval by the City Manager of the City or his designee (the “City Representative”). (b) The Developer shall, after obtaining at least three sealed bids for the construction of the City Improvements in conformance with the procedures and requirements of the City, submit to the City written evidence of such competitive bidding procedure, including evidence of the means by which bids were solicited, a listing of all responsive bids and their amounts, and the name or names of the contractor or contractors to whom the Developer proposes to award the contracts for such construction, which shall be the lowest responsible bidder.
(c) The City Representative shall attend the bid opening. If unable to attend the bid opening, the City Representative shall approve or disapprove of a contractor or contractors, in writing, within five (5) business days after receipt from the Developer of the name or names of such contractor or contractors recommended by the Developer. If the City Representative disapproves of any such contractor; the Developer shall select the next lowest responsible bidder from the competitive bids received who is acceptable to the City Representative.
(d) The specifications and bid and contract documents shall require all such contractors to pay prevailing wages and to otherwise comply with applicable provisions of the Labor Code, the Government Code and the Public Contract Code relating to public works projects and as required by the procedures and standards of the City with respect to the construction of its public works projects.
(e) The Developer shall submit faithful performance and payment bonds with respect to the City Improvements for which the Acquisition Election is made and the following documents shall be submitted to the City along with the performance and payment bonds:
(i)The original, or a certified copy, of the unrevoked appointment, power of attorney, bylaws, or other instrument entitling or authorizing the person who executed the bond to do so;
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(ii)A certified copy of the certificate of authority of the insurer issued by the State of California’s Insurance Commissioner; and (iii)Copies of the insurer’s most recent annual and quarterly statements filed with the Department of Insurance.
(f) The Developer and its contractor and subcontractors shall be required to provide proof of insurance coverage throughout the term of the construction of the City Improvements, which they will construct in conformance with the City’s standard procedures and requirements. The City’s insurance requirements are set out in Section 20 herein. (g) The Developer and all such contractors shall comply with such other requirements relating to the construction of the City Improvements which the City may impose by written notification delivered to the Developer and each such contractor at the time either prior to the receipt of bids by the Developer for the construction of such City Improvements or, to the extent required as a result of changes in applicable laws, during the progress of construction thereof; provided that such other requirements shall only be imposed to the extent the City reasonably determines they are required in order to comply with applicable law. In accordance with Section 7, the Developer shall be deemed the awarding body and shall be solely responsible for compliance and enforcement of the provisions of the Labor Code, Government Code, and Public Contract Code.
(h) A “Change Order” is an order from the Developer to a contractor authorizing a change in the work to be performed. The Developer shall receive comments from the City Representative prior to the Developer’s approval of any Change Order. The City Representative shall comment on or deny the Change Order request within five (5) business days of receipt of all necessary information. The City’s comments to a Change Order shall not be unreasonably delayed, conditioned or withheld. The Developer shall not be entitled to be compensated for costs associated with a “Change Order” that has not been approved by the City Representative.

Developer shall provide proof to the City, at such intervals and in such form as the City may reasonably require, that the foregoing requirements have been satisfied as to all of the City Improvements as to which the Acquisition Election has been made which are funded through Bond proceeds.

SECTION 7. INSPECTION; COMPLETION OF CONSTRUCTION
The requirements of this Section shall not apply to any City Improvement that was complete (as determined by the City Council) prior to the adoption by the City Council of the resolution forming the CFD, but they shall apply to all other City Improvements.

The City shall have primary responsibility for inspecting the City Improvements to assure that the work is being accomplished in accordance with the Plans. Such inspection does not include inspection for compliance with safety requirements by the Developer’s contractor(s). The City’s personnel shall be granted access to each construction site at all reasonable times for the purpose of accomplishing such inspection. Upon satisfaction of the City’s inspectors, the Developer shall notify the City in writing that a City Improvement has been completed in accordance with the Plans. Any actual costs reasonably incurred by the City for inspection not previously paid by the Developer shall be reimbursed from funds in the City Improvements Account.
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Within three (3) business days of receipt of written notification from City inspectors that a City Improvement has been completed in accordance with the Plans, the City Representative shall notify the Developer in writing that such City Improvement has been satisfactorily completed.

Upon receiving such notification, the Developer shall file a Notice of Completion with the County of Riverside Recorders Office, pursuant to the provisions of Section 3093 of the Civil Code. The Developer shall furnish to the City a duplicate copy of each such Notice of Completion showing thereon the date of filing with the County of Riverside (the “County”). City will in turn file a notice with the County for acceptance.

SECTION 8. LIENS
With respect to any City Improvement that was complete (as determined by the City Council) prior to the adoption by the City Council of the resolution forming the CFD, prior to any payment by the CFD to the Developer for such City Improvement, the Developer shall provide to the City such evidence or proof as the City shall require that all persons, firms and corporations supplying work, labor, materials, supplies and equipment for the construction of the City Improvements have been paid, and that no claims of liens have been recorded by or on behalf of any such person, firm or corporation. With respect to City Improvements, upon the earlier of (i) receipt of all applicable lien releases, or (ii) expiration of the time for the recording of claim of liens as prescribed by Sections 3115 and 3116 of the Civil Code, the Developer shall provide to the City such evidence or proof as the City shall require that all persons, firms and corporations supplying work, labor, materials, supplies and equipment for the construction of the City Improvements have been paid, and that no claims of liens have been recorded by or on behalf of any such person, firm or corporation.

SECTION 9. ACQUISITION; ACQUISITION PRICE; SOURCE OF FUNDS The acquisition price of a City Improvement that was complete (as determined by the City Council) prior to the adoption by the City Council of the resolution forming the CFD shall be its fair market value, as determined by the City’s City Manager or his or her designee, as of the date of acquisition. The City shall consider input and data provided by the Developer prior to determining the final fair market value.

The costs eligible to be included in the acquisition price of a City Improvement that is not described in the preceding paragraph (the “Actual Costs”) shall include:
(i) The actual hard costs for the construction of such City Improvement as established by the City-approved construction contracts and approved Change Orders, including costs of payment, performance and maintenance bonds and insurance costs, pursuant to this Agreement; (ii) The design and engineering costs of such City Improvement including, without limitation, the costs incurred in preparing the Plans. Costs for plan revisions will be considered on a case by case basis;
(iii) The costs of environmental evaluations and public agency permits and approvals attributable to the City Improvement;
(iv) Costs incurred by the Developer for construction management and supervision of such City Improvement, in an amount equal to five percent (5%) of the actual hard construction costs described in clause (i) above; 12 4812-8073-2134v2/022042-0035
(v) Professional costs associated with the City Improvement such as engineering, inspection, construction staking, materials, testing and similar professional services; and
(vi) Costs approved by the City in accordance with the Act of acquiring any real property or interests therein required for the City Improvement including, without limitation, any water tank sites, temporary construction easements, temporary by-pass road and maintenance easements.

Provided the Developer has complied with the requirements of this Agreement, the City agrees to pay the acquisition price of a completed City Improvement to the Developer or its designee within thirty (30) days after the Developer’s satisfaction of the preconditions to such payment stated herein, but only to the extent there are sufficient funds available in the City Improvements Account. Except in the case of a City Improvement described in the first paragraph of this Section, the acquisition price to be paid from Bond proceeds for the acquisition of a City Improvement by the City shall be the least of (1) the value of the City Improvement; or (2) the total of the Actual Costs of the City Improvement.

As a condition to the payment of the acquisition price, the ownership of the completed City Improvement shall be transferred to the City by grant deed, bill of sale or such other documentation as such public agency may require free and clear of all taxes, liens, encumbrances, and assessments, but subject to any exceptions determined by the City to not interfere with the actual or intended use of the land or interest therein (including the lien of a community facilities district so long as the subject property is exempt from taxation or is otherwise not taxable by such community facilities district). Upon the transfer of ownership of City Improvements or any portion thereof to the City, the City shall be responsible for the maintenance of such City Improvements or the portion transferred. Notwithstanding the foregoing, the acquisition price of a City Improvement may be paid prior to transfer of ownership and acceptance of the City Improvement if it is substantially completed at the time of payment. The City Improvement shall be considered “substantially complete” when it has been reasonably determined by the City to be usable, subject to final completion of such items as the final lift or any other items not essential to the primary use or operation of the City Improvement. If the acquisition price of a City Improvement is paid prior to transfer of ownership and acceptance based on it being “substantially complete”, Developer may, upon transfer of ownership of such City Improvement to the City, submit a second reimbursement request for any unpaid portion of the Actual Costs associated with completing such improvement. If the acquisition price of a City Improvement is paid prior to transfer of ownership and acceptance based on it being “substantially complete”, Developer may, upon transfer of ownership of such City Improvement to the City, submit a second reimbursement request for the additional Actual Costs associated with completing such improvement.

For purposes of determining the acquisition price to be paid by the Community Facilities District for the acquisition of the City Improvements by the City (other than City Improvements described in the first paragraph of this Section), the value of such City Improvements shall include the construction costs specified in the City-approved contracts and City-approved Change Orders conforming to Section 6, as hereinbefore specified. City approval is a condition prior to initiation of contract work. However, if the City reasonably determines that the additional Actual Costs are excessive and that the value of the City Improvements is less than the total amount of such Actual Costs and such construction costs, the price to be paid for the acquisition of the City Improvements shall be the value thereof as determined by the Engineer, subject, however, to the Developer’s right to appeal to the City’s City Council. 13 4812-8073-2134v2/022042-0035
Upon completion of the construction of a City Improvement, the Developer shall deliver or cause to be delivered to the City a Disbursement Request Form in substantially the form of Exhibit “D,” attached hereto, copies of the contract(s) with the contractor(s) who have constructed the City Improvement and other relevant documentation with regard to the payments made to such contractor(s) and each of them for the construction of the City Improvement, documentation evidencing payment of prevailing wages, and shall also provide to the City invoices and purchase orders with respect to all equipment, materials and labor purchased for the construction of the City Improvements. The City shall require the Engineer to complete its determination of the acquisition price of the City Improvements as promptly as is reasonably possible.

Notwithstanding the preceding provisions of this Section, the source of funds for the acquisition of the City Improvements or any portion thereof shall be funds in the City Improvements Account. If for any reason beyond the City’s control the Bonds are not sold, the City shall not be required to acquire the City Improvements from the Developer, except to the extent of funds from the collection of Special Taxes. In such event, the Developer shall complete the design and construction and offer to the City ownership of such portions of the City Improvements as are required to be constructed by the Developer as a condition to recordation of subdivision maps for the Developer Property (but only at such times as required by such condition), but need not construct any portion of the City Improvements which it is not so required to construct. Reimbursement for these facilities would be made from the collection of Special Taxes.

In addition to the foregoing, the City shall have the right to withhold payment for acquisition of a City Improvement, if:
(a) the Developer or any of its affiliates is delinquent in the payment of any Special Taxes levied by the Community Facilities District on properties then owned by the Developer or any of its affiliates within the CFD, or
(b) the Developer is not then in substantial compliance with a condition or obligation imposed upon the Developer Property by the City, including but not limited to, payment of all applicable fees, dedication of all applicable rights-of-way or other property and construction requirements.

The City shall immediately provide written notice to the Developer of the decision to withhold any such payment and shall specify the reason for such decision. If the payment is withheld as a result of the delinquency in the payment of Special Taxes, the notice shall identify the delinquent parcels and the amount of such delinquency. If the payment is withheld as a result of substantial non-compliance with a condition or obligation, the notice shall specify such condition or obligation and what action will be necessary by the Developer to substantially comply with such condition or obligation. Upon receipt of evidence reasonably satisfactory to the City that the Developer has paid the delinquent Special Taxes or complied with the subject condition or obligation, the City shall forthwith make all payments which have been withheld pursuant to the provisions of this Section.

SECTION 10. EASEMENTS AND/OR FEE TITLE OWNERSHIP DEEDS
Without limiting the Developer’s rights to reimbursement for such grants pursuant to Section 9 above, the Developer shall, at the time the City acquires the City Improvements as provided in Section 9 hereof, grant or cause to be granted to the City, by appropriate instruments 14 4812-8073-2134v2/022042-0035
prescribed by the City, all easements across private property and/or fee title ownership deeds which may be reasonably necessary for the proper operation and maintenance of such City Improvements, or any part thereof, but only to the extent located within the Developer Property.

SECTION 11. PERMITS
The Developer shall be responsible for obtaining all necessary construction permits from the City and/or the County (as appropriate) covering construction and installation of the City Improvement as to which the Acquisition Election has been made. If applicable, the City will request the County to issue an “operate and maintain permit” to the City, which will become effective upon the completion of the City Improvements and acceptance of ownership therewith by the City.

SECTION 12. MAINTENANCE
Prior to the transfer of ownership of a City Improvement by the Developer to the City, as provided in Section 9 hereof, the Developer shall be responsible for the maintenance thereof and shall require its contractor(s) to repair all facilities damaged by any party other than the City, prior to acceptance by the City and/or make corrections determined to be necessary by the City’s inspection personnel. The City shall not be permitted to place any City Improvement in service prior to acceptance of the same, unless the Developer otherwise consents in writing.

SECTION 13. INSPECTION OF RECORDS
The City shall have the right to review all books and records of the Developer pertaining to the costs and expenses incurred by the Developer for the design and construction of the City Improvements during normal business hours by making arrangements with the Developer. The Developer shall have the right to review all books and records of the City pertaining to costs and expenses incurred by the City for services of the Engineer by making arrangements with the City.

SECTION 14. OWNERSHIP OF IMPROVEMENTS
Notwithstanding the fact that some or all of the City Improvements may be constructed in dedicated street rights-of-way or on property which has been or will be dedicated to the City, each City Improvement shall be and remain the property of the Developer until acquired by the City as provided in this Agreement.

SECTION 15. MATERIALS AND WORKMANSHIP WARRANTY
The requirements of this Section shall not apply to any City Improvement that was complete (as determined by the City Council) prior to the adoption by the City Council of the resolution forming the CFD, but they shall apply to all other City Improvements.

Upon the completion of the acquisition of a City Improvement by the City, the performance bond related to such individual City Improvement provided by the Developer pursuant to Section

6.4(e) hereof, shall be reduced by 90%, and the remaining 10% shall serve as a maintenance bond to guarantee that such City Improvement will be free from defects due to faulty workmanship or materials for a period of one year.
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SECTION 16. CITY FEE FACILITY IMPROVEMENTS
The Developer may be required pursuant to the conditions of development or the fee ordinance to pay certain City fees (the “City Fees”) relating to the City Fee Facility Improvements prior to the availability of proceeds of the Bonds to pay for such City Fee Facility Improvements.

In the event such City Fees are paid prior to the availability of Bond proceeds, the amounts paid to the City shall be deemed to be deposits (each a “Deposit”) that are subject to refund by the City to the Developer in accordance with this Agreement. The City shall place each Deposit in a capital facilities account(s). If the Developer has made any Deposits to the City, then following deposit of Bond proceeds in the City Fee Facility Improvements Account, the City shall return to the Developer, from the capital account in which the Deposits were deposited the Deposits not previously returned, without interest or other earnings thereon. The City shall be so obligated to return such Deposits only to the extent that an equivalent amount of the Deposits to be returned is deposited in the City Fee Facility Improvements Account from Bond proceeds or Special Tax collections prior to the issuance of Bonds.

Bond proceeds used to finance City Improvements which relate to the City Fees shall be allocated first for return of all Deposits prior to being allocated to the payment of City Fees not previously deposited by the Developer. Any Deposits that have not been returned to the Developer at the time it is determined that there will be no further Bond proceeds available (i.e. the final series of Bonds to finance the Improvements have been issued) shall be retained by the City and may be used for the purposes for which the City Fee was required, and the unrefunded Deposits shall constitute full and final payment for such City Fees, without any increase of any kind.

SECTION 17. MISCELLANEOUS IMPROVEMENTS.

Improvements unrelated to the City Improvements and the City Fee Facility Improvements, if applicable, will be supplemented by the terms contained in an addendum which will appear as Exhibit “E” hereto. The amounts deposited in the applicable Miscellaneous Improvement Account(s), if any, will be disbursed for the acquisition or construction of Miscellaneous Improvements in accordance with the provisions in the applicable Joint Community Facilities Agreement, if any. Any amounts in the applicable Miscellaneous Improvement Account(s) shall be disbursed at the written direction of the City upon Developer’s submittal of an addendum which will appear as the applicable entity’s Disbursement Request Form provided for in the Joint Community Facilities Agreement. Upon receipt of the Disbursement Request Form, the City shall submit a written requisition for payment of the requested amount to the trustee for the Bonds, who shall directly pay the amount requested to the applicable entity.

SECTION 18. INDEPENDENT CONTRACTOR
In performing this Agreement, Developer is an independent contractor and not the agent of the City. The City shall not have any responsibility for payment to any contractor or supplier of Developer. It is not intended by the Parties that this Agreement create a partnership or joint venture among them and this Agreement shall not otherwise be construed.

SECTION 19. INDEMNIFICATION
Developer shall assume the defense of, indemnify and save harmless, the City, its officers, employees and agents, and the Community Facilities District, its officers, employees and agents, from and against all actions, damages, claims, losses or expenses of every type and description 16 4812-8073-2134v2/022042-0035
to which they may be subject or put, by reason of, or resulting from such person’s or entity’s performance of its obligations under this Agreement, the issuance of the Bonds and the construction of the City Improvements and the Miscellaneous Improvements (provided, however, that such indemnification shall not apply to any City Improvement that the City constructs itself pursuant to Section 6.3 of this Agreement), the failure of the Developer to provide notice of the Special Tax to be levied by the Community Facilities District pursuant to Section 53341.5 of the Act (but only if the Developer is required by law to provide such notice), or arising out of any alleged misstatements of fact or alleged omission of a material fact made by the Developer, its officers, directors, employees or agents to the City, the Community Facilities District, the underwriter of the Bonds and its counsel, the appraiser, the special tax consultant, the market absorption consultant or bond counsel regarding the Developer, its proposed developments, its property ownership, and any contractual arrangement it may enter into in a disclosure document describing the Community Facilities District and the risks relating to the Bonds. No provision of this Agreement shall in any way limit the extent of Developer’s responsibility for payment of damages resulting from the operations of Developer and its contractors; provided, however that Developer shall not be required to assume the defense or indemnify and save harmless any person or entity as to actions, damages, claims, losses or expenses resulting from the breach of this Agreement, the negligence or willful misconduct of such person or entity or their officers, agents, consultants or employees.

SECTION 20. INSURANCE REQUIREMENTS
Neither the Developer nor its contractor shall commence work on a City Improvement under this Agreement prior to obtaining insurance with a company or companies acceptable to the City, nor shall the Developer’s contractor allow any subcontractor to commence work on its subcontract until all insurance required of the subcontractor has been obtained.

The Developer shall, during the life of this Agreement, notify the City in writing of any incident giving rise to any potential bodily injury or property damage claim and any resultant settlements, whether in conjunction with this or any other project which may affect the limits of the required coverage, as soon as is reasonable and practical.

SECTION 21. CONFLICT WITH OTHER AGREEMENTS
Except as specifically provided herein, nothing contained herein shall be construed as releasing Developer from any condition of development or requirement imposed by any other agreement with City. In the event of a conflicting provision, such other agreement shall prevail unless such conflicting provision is specifically waived or modified in writing by City.

SECTION 22. TERMINATION
The provisions of this Agreement related to the financing of the Improvements shall terminate and be of no further force or effect on December 31, 2035. Notwithstanding the foregoing, this Agreement shall not terminate pursuant to the previous sentence if, on December 31, 2035, all of the building permits within the Community Facilities District have been pulled, construction within the Community Facilities District, as contemplated by the parties hereto, is ongoing, and the Developer has not yet received a full return of all Deposits or full reimbursement for the Miscellaneous Improvements from Special Taxes.
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SECTION 23. NOTICES
Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to either Party shall be deemed to have been received when personally delivered or seventy-two (72) hours following deposit of the same in any United States Post Office in California, registered or certified, postage prepaid. Any notice to the Community Facilities District or the City shall be addressed to City of Lake Elsinore, 130 South Main Street, Lake Elsinore, CA 92530, Attention: City Manager. Any notice to Developer shall be addressed to 36310 Inland Valley Drive, Suite 300, Wildomar, CA 92595 Attention: Scott Hansen, Vice President of Forward Planning and Development.

Each Party may change its address for delivery of notice by delivering written notice of such change of address to the other Party hereto.

SECTION 24. NO GIFT OR WAIVER.

24.1 No Gift or Waiver for City Improvements. The Developer and the City acknowledge that:
(a) The Developer or its predecessor may have constructed or may be constructing City Improvements before funds that will be used to acquire them are available with the expectation that the Developer will be reimbursed for such City Improvements to the extent and in the manner set forth in this Agreement.
(b) The City may inspect City Improvements and process Disbursement Request Forms even if funds from the proceeds of Bonds available at the time of such inspection and processing do not exist or are not then sufficient to satisfy the Disbursement Request in full. (c) The Developer may convey City Improvements to the City and the City may accept such City Improvements even if funds from the proceeds of Bonds available at the time of such conveyance and acceptance do not exist or are not then sufficient to satisfy the Disbursement Request in full.
(d) If the City accepts City Improvements before a Disbursement Request is paid in full, the unpaid balance of the Disbursement Request will be paid from time to time, in any number of installments and irrespective of the length of time payment is deferred, as funds from the proceeds of Bonds become available.
(e) The Developer’s conveyance or dedication of City Improvements to the City before the availability of funds from the proceeds of Bonds to acquire the City Improvements is not, and shall not be deemed, a gift or a waiver of the Developer’s right to payment of the purchase price of such City Improvements pursuant to this Agreement.

24.2 No Gift or Waiver for City Fees. The Developer and the City acknowledge that:
(a) Prior to the availability of funds from the proceeds of Bonds, the Developer or its predecessor may have been or may be required to deposit funds to assure payment of applicable fees of the City.
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(b) The Developer or its predecessor has deposited or will be depositing such funds with the expectation that the Developer will be reimbursed for these deposits to the extent and in the manner set forth in this Agreement.
(c) The reimbursement of such deposits pursuant to Section 16 of this Agreement may occur from time to time, in any number of installments and irrespective of the length of time payment is deferred, as funds become available. (d) The Developer’s deposit of such funds to the City before the availability of funds to reimburse the Developer is not, and shall not be deemed, a gift or a waiver of the Developer’s right to reimbursement of such deposits pursuant to this Agreement.

SECTION 25. GENERAL PROVISIONS
(a) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the City and the Developer and their respective heirs, executors, legal representatives, successors, and authorized assigns.
(b) Amendment. This Agreement may be amended at any time but only in writing signed by each Party hereto.
(c) Entire Agreement. This Agreement, and the agreements referenced herein, contains the entire understanding and agreement between the Parties with respect to the matters provided for herein and supersedes all prior agreements and negotiations between the Parties with respect to the subject matter of this Agreement. There are no oral or written representations, understanding, undertakings or agreements which are not contained or expressly referred to herein, and any such representations, understandings or agreements are superseded by this Agreement. This Agreement shall be binding upon, and enforceable by and against the Community Facilities District upon the establishment of the Community Facilities District.
(d) Exhibits. All exhibits attached hereto are incorporated into this Agreement by reference.
(e) Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible.
(f) Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by the other parties hereto, or the failure by a Party to exercise its rights upon the default of another Party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by such other Parties with the terms of this Agreement thereafter.
(g) No Third Party Beneficiaries. Except as provided explicitly in this Agreement, no person or entity shall be deemed to be a third party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to confer upon any person or entity, other than the City, the Community Facilities District, and Developer (and their respective successors and assigns), any rights, remedies, obligations or liabilities under or by reason of this Agreement. 19 4812-8073-2134v2/022042-0035
(h) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute but one instrument. (i) Assignment. Developer may assign all or any of its rights pursuant to this Agreement to a purchaser of all or any portion of the Developer Property. Such a purchaser and assignee shall, as a condition to taking an assignment of such rights, enter into an assignment and assumption agreement with the City and Developer, in a form reasonably acceptable to Developer and the City, whereby such rights assigned are specified and such purchaser agrees, except as may be otherwise specifically provided therein, to assume the obligations of Developer pursuant to this Agreement and to be bound thereby. A company that acquires all of the assets of the Developer, including ownership of the Developer itself, shall be deemed a successor and shall not require an assignment or assumption agreement to be bound by, and enjoy the benefits of, this Agreement.
(j) Governing Law. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California. (k) Construction of Agreement. This Agreement has been reviewed by legal counsel for both the City and Developer and shall be deemed for all purposes to have been jointly drafted by the City and Developer. No presumption or rule that ambiguities shall be construed against the drafting Party shall apply to the interpretation or enforcement of this Agreement. (l) Attorneys’ Fees. In the event of any action or proceeding, including an arbitration or a reference pursuant to Section 638, et seq., of the Code of Civil Procedure brought by any Party against any other under this Agreement, the prevailing Party shall be entitled to recover its actual attorneys’ fees and all fees, costs and expenses incurred for prosecution, defense, consultation, or advice in such action or proceeding. In addition to the foregoing, the prevailing Party shall be entitled to its actual attorneys’ fees and all fees, costs and expenses incurred in any post-judgment proceedings to collect or enforce the judgment. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement.
(m) Venue and Forum. Any action at law or in equity arising under this Agreement brought by any Party hereto for the purpose of enforcing, construing or determining the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the County of Riverside, State of California, and the Parties waive all provisions of law providing for the filing, removal or change of venue to any other Court. (n) Entire Agreement. Except as provided in an addendum, which if applicable, will appear as Exhibit “E” hereto, this Agreement sets forth and contains the entire understanding and agreement of the Parties. There are no oral or written representations, understandings, undertaking or agreements, which are not contained or expressly referred to herein, and any such representations, understandings or agreements are superseded by this Agreement. No evidence of any such representations, understandings or agreements shall be admissible in any proceeding of any kind or nature relating to the terms or conditions of this Agreement, its interpretation or breach.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year written below.

Dated: August __, 2025 CITY OF LAKE ELSINORE, a political subdivision of the State of California
By:

City Manager
ATTEST:

By:

Candice Alvarez, MMC, City Clerk
APPROVED AS TO FORM:

CITY ATTORNEY OF THE CITY OF LAKE ELSINORE
By:

Barbara Leibold, City Attorney
[SIGNATURES CONTINUED ON NEXT PAGE.]
S-2
4812-8073-2134v2/022042-0035
[SIGNATURE PAGE CONTINUED]
KB HOME Cal Management Services LLC,
a Delaware limited liability company
By: _________________________________
Name: Scott Hansen
Title: VP Forward Planning
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LIST OF EXHIBITS

EXHIBIT A - DESCRIPTION OF DEVELOPER PROPERTY

EXHIBIT B - DESCRIPTION OF COST ESTIMATES
EXHIBIT C - NOTICE OF SPECIAL TAX (as prepared by Developer)

EXHIBIT D - DISBURSEMENT REQUEST FORM

EXHIBIT E - ADDENDUM
A-1
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EXHIBIT A

DESCRIPTION OF DEVELOPER PROPERTY
Real property in the City of Lake Elsinore, County of Riverside, State of California, described as follows:

Assessor’s Parcel Nos:
349-240-006
349-380-024
349-380-025
349-240-043
349-240-044
349-240-045
349-240-046
349-240-047
349-240-054
349-240-055
349-240-056
349-240-034
349-240-038
349-240-072
349-240-075
B-1
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EXHIBIT B

DESCRIPTION OF COST ESTIMATES OF THE IMPROVEMENTS
The Improvements consist of the City Fee Facility Improvements and the City Improvements, as described below. Any other types of Improvements will be described in an addendum to this Agreement appearing as Exhibit “E.”
I. CITY FEE FACILITY IMPROVEMENTS.

City facilities included in the City’s development fee programs used to finance expansion projects, exclusive of in-tract facilities constructed by a property owner, but including and not limited to the following:

Estimated Cost of the City Fee Improvements
Description Estimated Cost
Traffic Improvements $ 458,615
Library Facilities 50,250
City Hall and Public Works Facilities 271,015
Community Center Facilities 182,575
Marina Facilities 260,965
Animal Shelter Facilities 116,580
Fire Facilities 251,585
Park Improvements 536,000
Drainage Fee 740,970
Total Fees $ 2,868,555
Additional City Fee Facility Improvements
(20% of above)
$ 573,711
C-1
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EXHIBIT C

NOTICE OF SPECIAL TAX
[TO COME FROM DEVELOPER]

D-1
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EXHIBIT D

CITY OF LAKE ELSINORE
CFD NO. 2021-1 (TUSCANY VALLEY/CREST)

DISBURSEMENT REQUEST FORM

1. Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “CFD”) is hereby requested to pay from the ________________________ Account, or any applicable account or sub-account thereof, established by the CFD in connection with its 20__ Special Tax Bonds (Improvement Area No. __) (the “Bonds”) to City of Lake Elsinore (the “City”) as payee, the sum set forth below:
$_____________________ (the Requested Amount”)

2. The Requested Amount represents the payment of City Fees for ___ lot(s) within the boundaries of Improvement Area No. ___ (the “Property”). (Tract No. __________, Lot Nos. ________________).

Or, City Improvements as supported by attached documentation.

3. The Requested Amount is due and payable, has not formed the basis of any prior request or disbursement.

4. The City, as payee, is hereby directing payment of the Requested Amount be payable to KB HOME Cal Management Services LLC, a Delaware limited liability (the “Developer”), pursuant to the wiring instructions attached hereto.

5. The Requested Amount is authorized and payable pursuant to the terms of the certain Acquisition, Construction and Funding Agreement (the “Agreement”) between the City of Lake Elsinore, acting for and on behalf of itself and the CFD and Developer.

6. Capitalized undefined terms used herein shall have the meaning ascribed to them in the Agreement.

D-2
4812-8073-2134v2/022042-0035
Dated: DEVELOPER:

KB HOME Cal Management Services LLC,
a Delaware limited liability company
By:

Name: Scott Hansen
Title: VP Forward Planning
Dated: CITY OF LAKE ELSINORE
By:

Its:
[ATTACH WIRING INSTRUCTIONS]
E-1
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EXHIBIT E

ADDENDUM

DESCRIPTION OF THE MISCELLANEOUS IMPROVEMENT
Estimated Cost of the Water District Improvements
Description Estimated Cost
Water Capacity Charge $ 7,429,260
EVWMD CFD 98-1 Connection Credit ($449,068)
Sewer Capacity Chagre 4,957,370
Water Capacity Charge (1.5" Irrigation) 148,006
EVWMD Facilities 11,648,659
Total $ 23,734,227
4820-1532-4902v3/022042-0035

JOINT COMMUNITY FACILITIES AGREEMENT

BY AND AMONG

CITY OF LAKE ELSINORE
AND

ELSINORE VALLEY MUNICIPAL WATER DISTRICT
AND

KB HOME CAL MANAGEMENT SERVICES LLC
(City of Lake Elsinore Community Facilities District No. 2021-1 (Tuscany Valley/Crest) THIS JOINT COMMUNITY FACILITIES AGREEMENT (“Agreement”) is dated ____, 2025, by and among the ELSINORE VALLEY MUNICIPAL WATER DISTRICT, County of Riverside, State of California, a municipal water district (“EVMWD”) organized and operating pursuant to the Municipal Water District Law of 1911 as set forth in the California Water Code, the CITY OF LAKE ELSINORE, a municipal corporation (“City”), and KB HOME Cal Management Services LLC, a Delaware limited liability company (“Property Owner”).

R E C I T A L S:

A. Property Owner is the owner of certain real property located within the boundaries of the EVMWD and the City and described in Exhibit “A” hereto (the “Property”).

B. Property Owner intends to develop the Property for residential purposes and has obtained or intends to obtain the necessary development approvals to construct approximately 335 dwelling units on the Property, as such development may be modified from time to time (the “Project”).

C. The Project will require the payment, pursuant to the rules and regulations of EVMWD, as amended from time to time (“EVMWD Rules and Regulations”), of certain EVMWD Charges (defined below). The EVMWD Charges may be paid directly to EVMWD, or paid and then reimbursed to the paying party, when Bond Proceeds (defined below) are available to fund an equal amount of such EVMWD Charges so paid.

D. The Project will also benefit, in whole or in part, from the construction of certain Acquisition Facilities (defined below and described on Exhibit “B” attached hereto). EVMWD and the Property Owner agree that any Acquisition Facilities to be constructed by Property Owner shall be eligible for acquisition by EVMWD and the costs thereof shall be eligible for reimbursement out of Bond Proceeds pursuant to this Agreement.

E. In conjunction with the recording of the final subdivision map(s) for the Project, the issuance of building permits for the construction of homes within the Project and/or receipt of water meters for such homes, it may be necessary for Property Owner, or its successors or assigns, to advance EVMWD Charges to EVMWD (the “Advances”) before any Bond Proceeds are available to pay for EVMWD Charges. In such case, Property Owner shall be entitled to (i) reimbursement of such Advances and (ii) credit for payments made to the EVMWD from Bond Proceeds for EVMWD Charges which would otherwise be due to the EVMWD in conjunction with the Project, all as further described herein.
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F. The Project will also require certain public improvements to be owned, operated or maintained by the City (the “City Improvements”) which will also be eligible for financing through the CFD (defined below).

G. Pursuant to the request of the Property Owner, the City Council of the City has formed the CFD pursuant to the Act (defined below) to provide financing of the EVMWD Charges, Acquisition Facilities and City Improvements.

H. The City and EVMWD are authorized by Section 53313.5 of the Act to pay for or finance, by means of the CFD, the EVMWD Charges, Acquisition Facilities and City Improvements. This Agreement constitutes a “joint community facilities agreement” within the meaning of Section 53316.2 of the Act by and among EVMWD, the City and Property Owner, pursuant to which the CFD is authorized to finance the City Improvements and EVMWD Charges and to finance the construction and acquisition of Acquisition Facilities. As provided by Section 53316.6 of the Act, responsibility for providing and operating the Acquisition Facilities is delegated to EVMWD to the extent set forth herein and responsibility for constructing, providing and operating the City Improvements is delegated to the City.

I. The provision of the City Improvements, Acquisition Facilities and EVMWD Charges is necessitated by the Project, and the parties hereto find and determine that the residents of the City and EVMWD will be benefited by the payment of EVMWD Charges and construction and acquisition of the Acquisition Facilities and the City Improvements and that this Agreement is beneficial to the interests of such residents.

ARTICLE I

GENERAL PROVISIONS
Section 1.1 Recitals. The above recitals are true and correct and are hereby incorporated by this reference.

Section 1.2 Definitions. Unless the context clearly otherwise requires, the terms defined in this Section shall, for all purposes of this Agreement, have the meanings herein specified.
(a) “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, commencing with California Government Code Section 53311, et seq. (b) “Acquisition Facility or Facilities” means those sewer and water facilities listed on Exhibit “B” hereto, which are eligible to be constructed by the Property Owner, acquired by EVMWD and paid for with Bond Proceeds.
(c) “Acquisition Price” means the amount to be paid out of Bond Proceeds for an Acquisition Facility.
(d) “Actual Costs” with respect to an Acquisition Facility includes: (i) the actual hard construction costs including labor, materials and equipment costs, (ii) the costs incurred in design, engineering and preparation of plans, (iii) the fees paid to consultants and government agencies in connection with and for obtaining permits, licenses or other required governmental approvals, (iv) a construction management fee of 5% of the costs described in clause (i) above, (v) professional costs such as engineering, legal, accounting, inspection construction staking, materials testing and similar professional services, (vi) costs of payment, performance of 3 4820-1532-4902v3/022042-0035
maintenance bonds, and insurance costs (including the costs of any title insurance) and (vii) the value of any real property or interests therein that (1) are required for the construction of the Acquisition Facility such as temporary construction easements, haul roads, etc. and (2) are required to be conveyed with such Acquisition Facility in an amount equal to the fair market value of such real property or interests therein.
(e) “Advances” means an amount paid by Property Owner for EVMWD Charges prior to the issuance and sale of Bonds and which are eligible for reimbursement upon availability of Bond Proceeds to fund an equal amount of such Advances. (f) “Agreement” means this Joint Communities Facilities Agreement. (g) “Bond Proceeds” or “Proceeds of the Bonds” shall mean those net funds generated by the sale of the Bonds for an Improvement Area. (h) “Bond Resolution” means that Resolution, Resolution Supplement, Fiscal Agent Agreement, Indenture of Trust or other equivalent document(s) providing for the issuance of a series of Bonds.
(i) “Bonds” shall mean those bonds, or other securities, issued by, or on behalf of the CFD, as authorized by the qualified electors within the CFD. (j) “CFD” means Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest).
(k) “Engineer” means the engineering firm or in-house personnel used by EVMWD to determine the value of an Acquisition Facility to be acquired with Bond Proceeds. (l) “EVMWD Charges” means water connection fees, sewer connection fees, annexation fees and all components thereof of the EVMWD imposed upon the Project to pay for the provision of water and sewer services to and the construction of EVMWD water and sewer facilities required to serve the Project.
(m) “EVMWD Facilities Fund” means the fund, account or sub-account of the CFD (regardless of its designation within the Bond Resolution) into which a portion of the Bond Proceeds may be deposited, in accordance with the Bond Resolution and Funding Agreement to finance the construction and acquisition of the Acquisition Facilities and to pay EVMWD Charges. (n) “EVMWD Representative” means the EVMWD Chief Engineer or his Designee.
(o) “Facilities” means the City Improvements, Acquisition Facilities and EVMWD Charges.
(p) “Field Engineer” shall have the meaning ascribed to the term in Section 3. (q) “Funding Agreement” shall mean the Acquisition, Construction and Funding Agreement between City and Property Owner relating to the CFD, as it may be amended from time to time.
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(r) “Improvement Area” shall mean an improvement area within the CFD designated in accordance with the Act.
(s) “Party” or “Parties” shall mean any one or all of the parties to this Agreement.
(t) “Plans and Specifications” shall mean the plans and specifications for the design and construction of an Acquisition Facility as approved by EVMWD, which approval shall not be unreasonably withheld.
(u) “Rate and Method” means the Rate and Method of Apportionment of the Special Tax for an Improvement Area authorizing the levy and collection of special taxes pursuant to proceedings undertaken for the formation of the CFD pursuant to the Act. (v) “State” means the State of California.
(w) “Special Taxes” means the special taxes authorized to be levied and collected pursuant to a Rate and Method.
(x) “Substantially Complete,” “Substantially Completed” or “Substantial Completion” with respect to an Acquisition Facility means that such Acquisition Facility is substantially complete in accordance with its Plans and Specifications and is available for use by the public for its intended purpose, notwithstanding any final “punch list” items still required to be completed, unless such items are required for the safe operation of such Acquisition Facility, and shall be based upon approval of EVMWD’s inspectors, which shall not be unreasonably withheld.

ARTICLE II

ISSUANCE OF BONDS
Section 2.1 Issuance and Sale of Bonds. The City Council of the City, acting as the legislative body of the CFD, may, in its sole discretion, in accordance with its adopted policies and the Funding Agreement adopt the Bond Resolution and issue the Bonds to finance the Facilities.

Section 2.2 Bond Proceeds. Upon the issuance and sale of each series of Bonds, and receipt of the Bond Proceeds, the City shall determine the amount of the Bond Proceeds allocable to finance construction and acquisition of Acquisition Facilities and to pay EVMWD Charges in accordance with the Funding Agreement, and shall deposit such amount in the EVMWD Facilities Fund.

In conjunction with the recording of the final subdivision maps for the Property, the issuance of building permits for the construction of homes within the Property and/or receipt of water meters for such homes, it may be necessary for Property Owner, or its successors of assigns, to make Advances before Bonds are issued. Upon the issuance and sale of the Bonds, Property Owner may execute and submit a payment request to the CFD requesting disbursement of an amount equal to all Advances from the EVMWD Facilities Fund. The Property Owner shall only be entitled to receive reimbursement of the Advances if Bond Proceeds equal to the amount of such Advances to be reimbursed are deposited in the EVMWD Facilities Fund.

From time to time following the issuance and sale of the Bonds, Property Owner shall authorize EVMWD in writing to request a disbursement from the EVMWD Facilities Fund to fund 5 4820-1532-4902v3/022042-0035
EVMWD Charges. Upon such notice and EVMWD’s receipt of such disbursement, Property Owner shall be deemed to have satisfied the applicable EVMWD Charges with respect to the number of dwelling units or lots for which the EVMWD Charges would otherwise have been required in an amount equal to such disbursement.

EVMWD agrees that it will request a disbursement of Bond Proceeds only for costs related to the EVMWD facilities that are eligible for financing under the Act. With respect to the Acquisition Facilities, EVMWD agrees that prior to requesting payment from the CFD it shall review and approve all costs included in its request. With respect to all EVMWD Charges, EVMWD agrees that prior to requesting payment from the CFD it shall review and approve all costs included in its request. EVMWD will submit a request for disbursement of Bond Proceeds along with adequate supporting documentation to the District which shall be in the form attached hereto as Exhibit “C.”
EVMWD agrees that in processing the above disbursements with respect to EVMWD facilities, it will comply with all legal requirements for the expenditure of Bond Proceeds under the Act and the Internal Revenue Code of 1986 and any amendments thereto. As a condition to receiving any Bond Proceeds, EVMWD agrees that it shall provide to the CFD, a certificate to the effect that EVMWD confirms the representations contained in Section 2.2 hereof, EVMWD agrees to comply with the provisions of the tax certificate delivered by the CFD in connection with the Bonds, and such other matters as the CFD may reasonably request upon which the CFD and its bond counsel may rely in connection with the issuance of such Bonds and their conclusion that interest on such Bonds is not included in gross income for federal income tax purposes.

Section 2.3 Responsibility for EVMWD Charges and Acquisition Facilities. (a) The Parties hereto acknowledge and agree that the final responsibility for the payment of the EVMWD Charges and the design, construction and dedication of Acquisition Facilities to be constructed by Property Owner lies with the Property Owner. (b) If the amounts derived from Bond Proceeds deposited in the EVMWD Facilities Fund, including investment earnings thereon, if any, are not sufficient to fund the total cost of the EVMWD Charges and Acquisition Facilities to be constructed by Property Owner, the parties hereto agree that all responsibility and liability for the amount of such shortfall shall be and remain with the Property Owner and shall not lie with the City, CFD or EVMWD. (c) In addition to financing the EVMWD Charges described above, the Parties acknowledge that EVMWD may require the Property Owner, pursuant to the EVMWD Rules and Regulations, to design, construct and dedicate to EVMWD Acquisition Facilities as a condition to providing water and sewer service to the Property. The Parties also agree and acknowledge that all responsibility and obligation for the design, construction and dedication of such Acquisition Facilities to EVMWD, in accordance with all applicable statutes and the EVMWD Rules and Regulations, shall be and remain the responsibility of the Property Owner. (d) EVMWD agrees to utilize or apply funds provided to it by the CFD, in accordance with the Act and other applicable law, and as set forth herein, for the EVMWD Charges and Acquisition Facilities to be constructed by Property Owner. (e) Property Owner shall indemnify, defend, and hold harmless, the City, CFD, and EVMWD, their respective officers, employees and agents, and each and every one of them from and against all actions, damages, claims, losses or expenses of every type and description 6 4820-1532-4902v3/022042-0035
to which they may be subjected or put, by reason of or resulting from the design, engineering, construction, and transfer of ownership of the Acquisition Facilities constructed by Property Owner.
(f) EVMWD shall indemnify, defend, and hold harmless, the City, CFD and Property Owner, their respective officers, employees and agents, and each and every one of them from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of or resulting from the design, engineering, construction, and acquisition of the Acquisition Facilities constructed by EVMWD and the facilities constructed with the proceeds of the EVMWD Charges.

Section 2.4 Responsibility for Debt Service or Special Taxes. EVMWD shall have no obligation, responsibility, or authority with respect to the issuance and sale of the Bonds, the Bond Proceeds available to finance the construction and acquisition of the Acquisition Facilities and to pay EVMWD Charges, the payment of the principal and interest on the Bonds, or for the levy of the Special Taxes to provide for the payment of principal and interest thereon. The CFD shall have the sole authority and responsibility for all such matters.

The Parties hereto specifically agree that the liabilities of the CFD, including liabilities, if any, of the CFD pursuant to the documents providing for the issuance of Bonds, including the Bond Resolution, shall not be or become liabilities of EVMWD.

Section 2.5 Administration of the CFD. The City shall have the power and duty to provide for the administration of the CFD once it is formed, subject to the terms hereof and the Funding Agreement, including employing and compensating all consultants and providing for the various other administration duties set forth in this Agreement. It is understood and agreed by Parties hereto that EVMWD will not be considered a participant in the proceedings relative to formation of the CFD or the issuance of the Bonds, other than as a Party to this Agreement.

ARTICLE III

CONSTRUCTION AND ACQUISITION OF ACQUISITION FACILITIES
Section 3.1 Construction of Acquisition Facilities by Property Owner. The following provisions of this Article III shall apply solely with respect to those Acquisition Facilities to be constructed by the Property Owner and acquired by EVMWD with Bond Proceeds:
(a) The Property Owner will complete the Plans and Specifications for such Acquisition Facilities. The Plans and Specifications shall include EVMWD’s standard specifications and shall be subject to EVMWD approval, which shall not be unreasonably withheld. EVMWD agrees to process any Plans and Specifications for approval with reasonable diligence and in a timely manner. The Property Owner may proceed with the construction of any such Acquisition Facilities in accordance with the provisions of Section 3.2 hereof. A qualified engineering firm (the “Field Engineer”) shall be employed by Property Owner to provide all field engineering surveys determined to be necessary by the EVMWD inspection personnel. Field Engineer shall promptly furnish to EVMWD a complete set of grade sheets listing all locations, offsets, etc., in accordance with good engineering practices, and attendant data and reports resulting from the Field Engineer’s engineering surveys and/or proposed facility design changes.

EVMWD shall have the right, but not the obligation, to review, evaluate and analyze whether such results comply with applicable specifications.
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(b) A full-time soils testing firm, approved by EVMWD, shall be employed by Property Owner to conduct soil compaction testing and certification. Property Owner shall promptly furnish results of all such compaction testing to the EVMWD for its review, evaluation and decision as to compliance with applicable specifications. In the event the compaction is not in accordance or compliance with applicable specifications, Property Owner shall be fully liable and responsible therefore. A final report shall be required fully certifying trench compaction efforts prior to acceptance of each of the Acquisition Facilities. (c) The cost of all surveying, compaction testing and report costs associated with such Acquisition Facilities furnished and constructed by any contractors or sub-contractors (collectively, “Contractors”) shall be included among the costs which are eligible to be paid from the EVMWD Facilities Fund.
(d) EVMWD shall not be responsible for conducting any environmental, archaeological, biological, or cultural studies or any mitigation requirements related to the Acquisition Facilities to be constructed by Property Owner that may be requested by appropriate Federal, State, and/or local agencies. Any such work shall be paid for and such work shall be conducted by, or on behalf of Property Owner and the costs of such work shall be eligible to be paid from the EVMWD Facilities Fund.

Section 3.2 Public Works Requirements. In order to insure that the Acquisition Facilities to be constructed by the Property Owner, completed after formation of the CFD and acquired with Bond Proceeds will be constructed as if they had been constructed under the direction and supervision, or under the authority of, the EVMWD, so that they may be acquired by the EVMWD pursuant to Government Code Section 53313.5, the Property Owner shall comply with all of the following requirements:
(a) The Property Owner shall obtain bids for the construction of such Acquisition Facilities in conformance with the standard procedures and requirements of the EVMWD with respect to its public works projects or in a manner which is approved by the EVMWD Representative.
(b) The contract or contracts for the construction of such Acquisition Facilities shall be awarded to the responsible bidder(s) submitting the lowest responsive bid(s) for the construction of such Acquisition Facilities.
(c) The Property Owner shall require, and the specifications and bid and contract documents shall require all such Contractors to pay prevailing wages and to otherwise comply with applicable provisions of the Labor Code, the Government Code and the Public Contract Code relating to public works projects and as required by the procedures and standards of the EVMWD with respect to the construction of its public works projects. (d) Said Contractors shall be required to furnish labor and material payment bonds and contract performance bonds in an amount equal to 100 percent of the contract price naming the Property Owner and the EVMWD as obligees and issued by insurance or surety companies approved by the EVMWD. All such bonds shall be in a form approved by the EVMWD Representative. Rather than requiring its Contractors to provide such bonds, the Property Owner may elect to provide the same for the benefit of its Contractors. 8 4820-1532-4902v3/022042-0035
(e) All such Contractors shall be required to provide proof of insurance coverage throughout the term of the construction of such Acquisition Facilities which they will construct in conformance with EVMWD’s standard procedures and requirements. (f) The Property Owner and all such Contractors shall comply with such other requirements relating to the construction of such Acquisition Facilities which the EVMWD may impose by written notification delivered to the Property Owner and each such Contractor at any time either prior to the receipt of bids by the Property Owner for the construction of such Acquisition Facilities or, to the extent required as a result of changes in applicable laws, during the progress of construction thereof. In accordance with this Section 3.2, the Property Owner shall be deemed the awarding body and shall be solely responsible for compliance and enforcement of the provisions of the Labor Code, Government Code, and Public Contract Code of the State of California.

The Property Owner shall provide proof to the EVMWD, at such intervals and in such form as the EVMWD Representative may require, that the foregoing requirements have been satisfied as to all of the Acquisition Facilities constructed by Property Owner, acquired by EVMWD and paid for with Bond Proceeds.

Section 3.3 Inspection; Completion of Construction. EVMWD shall have primary responsibility for providing inspection of the construction of the Acquisition Facilities constructed by the Property Owner to insure that the construction is accomplished in accordance with the Plans and Specifications. EVMWD’s personnel shall have access to the site of the work at all reasonable times for the purpose of accomplishing such inspection. Upon Substantial Completion of the construction of such Acquisition Facilities by Property Owner, the Property Owner shall notify the EVMWD in writing that the construction of such Acquisition Facilities has been Substantially Completed.

Upon receiving such written notification from the Property Owner, and upon receipt of written notification from its inspectors that construction of any of the Acquisition Facilities by Property Owner has been Substantially Completed, the EVMWD shall in a timely manner notify the Property Owner in writing that the construction of such Acquisition Facilities has been satisfactorily completed. Upon receiving such notification, the Property Owner shall forthwith file with the County Recorder of the County of Riverside a Notice of Completion in accordance with procedures of the County of Riverside. The Property Owner shall furnish to the EVMWD a duplicate copy of each such Notice of Completion showing thereon the date of filing with the County Recorder. Any actual costs reasonably incurred by the EVMWD in inspecting and approving the construction of any Acquisition Facilities by Property Owner not previously paid by the Property Owner shall be eligible to be reimbursed from the EVMWD Facilities Fund or paid directly by Property Owner.

Section 3.4 Liens. The Property Owner shall provide to the EVMWD such evidence or proof as the EVMWD shall require that all persons, firms and corporations supplying work, labor, materials, supplies and equipment on behalf of Property Owner for the construction of any Acquisition Facilities have been paid, and that no claims of liens have been recorded by or on behalf of any such person, firm or corporation.

Section 3.5 Acquisition, Acquisition Price; Source of Funds. Provided the Property Owner has complied with the requirements of this Agreement, EVMWD agrees to acquire the Acquisition Facilities from the Property Owner. The price to be paid by the CFD for the acquisition of such Acquisition Facilities by EVMWD (the “Acquisition Price”) shall be the lesser of (i) the 9 4820-1532-4902v3/022042-0035
value of the Acquisition Facilities or (ii) the total of the Actual Costs of the Acquisition Facilities.

The Property Owner shall transfer ownership of the Acquisition Facilities to the EVMWD by grant deed, bill of sale or such other documentation as the EVMWD may require. Upon the transfer of ownership of the Acquisition Facilities or any portion thereof from the Property Owner to EVMWD, EVMWD shall be responsible for the maintenance of the Acquisition Facilities or the portion transferred.

For purposes of determining the Acquisition Price to be paid by the CFD for the acquisition of the Acquisition Facilities by EVMWD, the value of such improvements shall be the amount determined by the Engineer, to be the value of the Acquisition Facilities based on the Actual Costs submitted by the Property Owner, as hereinbefore specified; provided, however, that if the Engineer determines that such Actual Costs, or any of them, are excessive and that the value of the Acquisition Facilities is less than the total amount of such Actual Costs, the Acquisition Price to be paid by the CFD for the acquisition of the Acquisition Facilities shall be the value thereof as determined by the Engineer.

Upon completion of the construction of any Acquisition Facilities by Property Owner, the Property Owner shall deliver to EVMWD copies of the contract(s) with the Contractor(s) who have constructed the Acquisition Facilities or other relevant documentation with regard to the payments made to such Contractor(s) and each of them for the construction of such Acquisition Facilities, and shall also provide to EVMWD copies of all invoices and purchase orders with respect to all supplies and materials purchased for the construction of such Acquisition Facilities. EVMWD shall require the Engineer to complete its determination of the value of the Acquisition Facilities as promptly as is reasonably possible.

The Acquisition Price of any Acquisition Facilities may be determined and paid out of the EVMWD Facilities Fund prior to transfer of ownership of the Acquisition Facilities to EVMWD upon a determination of Substantial Completion of such Acquisition Facility. Upon transfer of ownership of an Acquisition Facilities to EVMWD, Property Owner may submit a second reimbursement request for “punch list” items and any other eligible costs not included in the initial request.

Property Owner shall submit a payment request form to the CFD in the format and with the information required by the Funding Agreement, which must also contain therewith approval of EVMWD, which approval shall not be unreasonably withheld.

Notwithstanding the preceding provisions of this section, the sole source of funds for the acquisition by EVMWD of the Acquisition Facilities or any portion thereof shall be the Bond Proceeds made available by the CFD pursuant to Section 2.3 above. If for any reason beyond EVMWD’s control, the Bonds are not sold, EVMWD shall not be required to acquire any Acquisition Facilities from the Property Owner. In such event, the Property Owner shall complete the design and construction and offer to the EVMWD ownership of such portions of Acquisition Facilities as are required to be constructed by the Property Owner as a condition to recordation of subdivision maps for the Property or any other agreement between Property Owner and EVMWD, but need not construct any portion of the Acquisition Facilities which it is not so required to construct.

Section 3.6 Easements. The Property Owner shall, at the time EVMWD acquires the Acquisition Facilities as provided in Section 3.2 hereof, grant to EVMWD, by appropriate instruments prescribed by EVMWD, all easements on private property which may be reasonably necessary for the proper operation and maintenance of such Acquisition Facilities, or any part thereof.
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Section 3.7 Maintenance. Prior to the transfer of ownership of an Acquisition Facility by the Property Owner to the EVMWD, as provided in Section 3.5 hereof, the Property Owner shall be responsible for the maintenance thereof and shall maintain and transfer such Acquisition Facility to EVMWD in as good condition as the Acquisition Facility was in at the time the Property Owner notified the EVMWD that construction of same had been completed in accordance with the Plans and Specifications.

The Parties agree that the construction and acquisition of the Acquisition Facilities to be constructed by Property Owner is a matter between Property Owner and EVMWD only, and that the City and the CFD shall have no responsibility for on-site inspection or monitoring or for certifying that the provisions of Article III of this Agreement be satisfied.

ARTICLE IV

TERM AND TERMINATION
Section 4.1 Effective Date. This Agreement shall become effective and of full force and effect as of the date (“Effective Date”) it is approved by the Property Owner, the City Council of the City and governing board of the EVMWD, to be confirmed by the execution hereof by the authorized representatives of the Parties hereto.

Section 4.2 Termination. This Agreement shall terminate and be of no further force or effect upon the earlier of (i) ten (10) years following the issuance of building permits for all dwelling units expected to be built within the CFD, (ii) the funding of all EVMWD Facilities pursuant to this Agreement, or (iii) December 31, 2035. Notwithstanding the foregoing, this Agreement shall not terminate pursuant to (iii) of the previous sentence if, on December 31, 2035, all of the building permits within the CFD have been pulled, construction within the CFD, as contemplated by the parties hereto, is ongoing, and the Property Owner has not yet has not been fully reimbursed for Advances or has not been paid the Acquisition Price of any Acquisition Facilities pursuant to Section 3.5 above.

ARTICLE V

ADDITIONAL GENERAL PROVISIONS
Section 5.1 Recordkeeping; Inspection of Records. EVMWD hereby agrees to keep and maintain full and accurate records of all amounts, and investment earnings, if any, paid to EVMWD for the EVMWD Charges and the City hereby agrees to keep and maintain full and accurate records of all amounts, and investment earnings, if any, expended from the EVMWD Facilities Fund. Each Party further agrees to make such records available to any other Party hereto, including Property Owner, during normal business hours upon reasonable prior notice.

All such records shall be kept and maintained by the appropriate Party as provided by applicable law and their respective policies.

Section 5.2 Partial Invalidity. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible.

Section 5.3 Successors and Assigns. Property Owner may assign its rights pursuant to this Agreement to a purchaser of the Property, or any portion thereof who shall be the owner of any Acquisition Facilities as payer of any EVMWD Charges and to whom Property Owner shall assign the right to receive payment of the Acquisition Price for such Acquisition Facilities or other rights under this Agreement with respect to EVMWD Charges. Such a purchaser and assignee 11 4820-1532-4902v3/022042-0035
shall enter into an assignment agreement with the Property Owner, in a form acceptable to the EVMWD and the City, whereby such purchaser agrees, except as may be otherwise specifically provided therein, to assume the obligations of Property Owner pursuant to this Agreement and to be bound thereby. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties hereto.

Section 5.4 Notice. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to any Party or ether person shall be deemed to have been received when personally delivered or upon deposit of the same in the United States Post Office registered or Certified, postage prepaid, addressed as follows:

City: City of Lake Elsinore
130 S. Main Street
Lake Elsinore, CA 92530
Attention: City Manager
EVMWD: Elsinore Valley Municipal Water District
31315 Chaney Street
Lake Elsinore, CA 92530
Attention: General Manager
Property Owner: KB HOME Cal Management Services LLC
36310 Inland Valley Drive, Suite 300
Wildomar, CA 92595
Attention: Scott Hansen
Each Party can change its address for delivery of notice by delivering written notice of such change or address to the other parties within ten (10) calendar days prior to such change.

Section 5.5 Captions. The captions to Sections used herein are for convenience purposes only and are not part of this Agreement.

Section 5.6 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California applicable to contracts made and performed in such State.

Section 5.7 Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the matters provided for herein and supersedes all prior agreements and negotiations between the Parties with respect to the subject matter of this Agreement.

Section 5.8 Amendments. This Agreement may be amended or modified only in writing executed by the authorized representative(s) of each of the Parties hereto.

Section 5.9 Waiver. The failure of any Party hereto to insist on compliance within any of the terms, covenants or conditions of this Agreement by any other Party hereto, shall not be deemed a waiver of such terms, covenants or conditions of this Agreement by such other Party, nor shall any waiver constitute a relinquishment of any other right or power, for all or any other times.
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Section 5.10 Cooperation and Execution of Documents. The Parties hereto agree to complete and execute any further or additional documents which may be necessary to complete or further the terms of this Agreement.

Section 5.11 Attorneys’ Fees. In the event of the bringing of any action or suit by any Party against any other Party arising out of this Agreement, the Party in whose favor final judgment shall be entered shall be entitled to recover from the losing Party all costs and expenses of suit, including reasonable attorneys’ fees.

Section 5.12 Exhibits. The following exhibits attached hereto are incorporated into this Agreement by reference.

Exhibit Description
“A” Property Description
“B” Acquisition Facilities Description
“C” Disbursement Request Form
Section 5.13 Signatories. The signatories hereto represent that they have been appropriately authorized to enter into this Agreement on behalf of the party for whom they sign.

Section 5.14 Execution in Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. [Remainder of this page is blank]
S-1
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and first year written above.

CITY OF LAKE ELSINORE, a political subdivision
of the State of California
By:

City Manager
ATTEST:

By:

Candice Alvarez, MMC, City Clerk
APPROVED AS TO FORM:

CITY ATTORNEY OF THE CITY OF LAKE ELSINORE
By:

Barbara Leibold, City Attorney
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
S-2
4820-1532-4902v3/022042-0035
[SIGNATURE PAGE CONTINUED]

ELSINORE VALLEY MUNICIPAL WATER

DISTRICT
By:

Its: Greg Thomas, General Manager
ATTEST:

By:

Its: Christy Gonzalez, Board Secretary
APPROVED AS TO FORM:

By:

Its: Thomas Rice, General Counsel
S-3
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[SIGNATURE PAGE CONTINUED]
KB HOME Cal Management Services LLC,
a Delaware limited liability company
By: _________________________________
Name: Scott Hansen
Title: VP Forward Planning
A-1
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EXHIBIT A

PROPERTY DESCRIPTION
Real property in the City of Lake Elsinore, County of Riverside, State of California, described as follows:

B-1
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EXHIBIT B

ACQUISITION FACILITIES DESCRIPTION

1. SEWER LIFT STATION $__________ + contingency 10%
a. A Sewer lift station is proposed to the southern portion of the site. cost includes:
i. Lift station facility
ii. 4,380 LF On site - off site force main
iii. Jack-N- bore force main under Wasson creek.
iv. Gravity sewer line to connection-

2. OFF SITE WATER LINE $_______ + contingency 10%
a. Off - site domestic water is required to serve the project site in Greenwald Avenue
i. 4,300 LF 16” DIP water line
ii. 2,160 LF 20” DIP water line
iii. Includes valves, bends, blow offs, Tee’s, Air –Vac’s, fire hydrants, minor street work, patch paving, traffic control,

3. OFF-SITE IMPROVEMENTS $_______ + contingency 10%
a. __________
i. __________

4. OFF-SITE SEWER FORCE MAIN $_______ + contingency 10% a. __________
i. __________
Note: The description and estimated costs of the Acquisition Facilities is preliminary in nature. The final nature and location of the Acquisition Facilities will be determined upon preparation of final plans and specifications, and the Actual Costs may ultimately be higher than estimated herein.

C-1
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EXHIBIT C

DISBURSEMENT REQUEST FORM

1. Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (“CFD No. 2021-1”) is hereby requested to pay from the EVMWD Facilities Fund established by the City Council of the City of Lake Elsinore (the “City”) in connection with its CFD No. 2021-1 Series _____ Special Tax Bonds (Improvement Area __) (the “Bonds”), to the Elsinore Valley Municipal Water District (the “Water District”), as Payee, the sum set forth below in payment of project costs described below.

2. The undersigned certifies that the amount requested has been expended or encumbered for the purposes of constructing and completing [Acquisition Facilities] [facilities relating to the EVMWD Charges]. The amount requested is due and payable under, or is encumbered for the purpose of funding, a purchase order, contract or other authorization with respect to the project costs described below and has not formed the basis of a prior request or payment.

3. Description of [Acquisition Facilities] [EVMWD Charges]:

4. Amount requested: $______________.

5. The amount set forth is authorized and payable pursuant to the terms of the Joint Community Facilities Agreement among the City, KB HOME Cal Management Services LLC, a Delaware limited liability and the Elsinore Valley Municipal Water District dated as of ________, 2025 (the “Agreement”). Capitalized terms not defined herein shall have the meaning set forth in the Agreement.

6. Total payments to the Water District for the [Acquisition Facilities] [facilities relating to the EVMWD Charges] from CFD No. 2021-1, including the amounts to be paid under paragraph 4 above, will not exceed the maximum amount to be disbursed for [Acquisition Facilities] [facilities relating to the EVMWD Charges] under the Agreement.

C-2
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Executed by an authorized representative of the Elsinore Valley Municipal Water District.

By:

Name:

Title:

Date:

Request No.

CONCURRED BY:
___________
PH-CFD 2021-1 IA 1 & 2 Tuscany Valley-Crest - Page 1 of 4 See Proof on Next Page
The Press-Enterprise
3512 14 Street
Riverside, California 92501
(951) 368-9229
City of Lake Elsinore
130 South Main Street
Lake Elsinore, California 92530
Publication: The Press-Enterprise

PROOF OF PUBLICATION OF
Ad Desc: 0011750654
FILE NO. 0011750654

PROOF OF PUBLICATION
I am a citizen of the United States. I am over the age of eighteen years and not party to or interested in the above- entitled matter. I am an authorized representative of THE PRESS-ENTERPRISE, a newspaper of general circulation,
printed and published daily in the County of Riverside, and which newspaper has been adjudicated a newspaper of
general circulation by the Superior Court of the County of Riverside, State of California, under date of April 25, 1952, Case Number 54446, under date of March 29, 1957, Case
Number 65673, under date of August 25, 1995, Case Number 267864, and under date of September 16, 2013, Case Number RIC 1309013; that the notice, of which the annexed is a printed copy, has been published in said newspaper in
accordance with the instructions of the person(s) requesting publication, and not in any supplement thereof on the following dates, to wit:
08/14/2025
I certify (or declare) under the penalty of perjury that the foregoing is true and correct.

Date: August 14, 2025.

At: Riverside, California
______________________________
Signature

PH-CFD 2021-1 IA 1 & 2 Tuscany Valley-Crest - Page 2 of 4

PH-CFD 2021-1 IA 1 & 2 Tuscany Valley-Crest - Page 3 of 4

PH-CFD 2021-1 IA 1 & 2 Tuscany Valley-Crest - Page 4 of 4

28)
Request to Amend Pipe Dreamz's Development Agreement to Revise the Community Benefit Fees

1. Find

that

the

proposed

project

exempt

from

the

California

Environmental

Quality

Act
(CEQA) pursuant to CEQA Guidelines Section 15301 (Existing Facilities); and

2. Introduce

title

only

and

waive

further

reading

ORDINANCE

THE

CITY

COUNCIL

THE

CITY

LAKE

ELSINORE,

CALIFORNIA,

APPROVING

THE

DEVELOPMENT

AGREEMENT

AMENDMENT

(DA-2025-08)

FOR

PIPE
DREAMZ

LOCATED

31881

CORYDON

ROAD,

SUITE

160

AND

31875

CORYDON
ROAD, SUITE 120 (APN: 370-051-031 AND 370-051-008).

Page 1 of 3 ends

REPORT TO CITY COUNCIL
To:Honorable Mayor and Members of the City Council
From:Jason Simpson, City Manager
Prepared by:Damaris Abraham, Community Development Director Date:August 26, 2025
Subject:Request to Amend Pipe Dreamz's Development Agreement to Revise the Community Benefit Fees
Applicant:Tim Scalzo, Pipe Dreamz
Recommendation

1. Find that the proposed project is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15301 (Existing Facilities); and

2. Introduce by title only and waive further reading of AN ORDINANCE OF THE CITY COUNCIL

OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING THE DEVELOPMENT AGREEMENT AMENDMENT (DA-2025-08) FOR PIPE DREAMZ LOCATED AT 31881 CORYDON ROAD, SUITE 160 AND 31875 CORYDON ROAD, SUITE 120 (APN: 370-051- 031 AND 370-051-008).

Planning Commission Action
On July 15, 2025, the Planning Commission conducted a duly noticed Public Hearing at their regular meeting and recommended approval of the Development Agreement (DA) to the City Council with a 5-0 vote. Members of the public, including the cannabis business owner, were present at the meeting and the item did not receive any public comments.

Project Location
Pursuant to Lake Elsinore Municipal Code (LEMC) Section 17.156.040, cannabis businesses are permitted only within the M-1 (Limited Manufacturing) and M-2 (General Manufacturing) zoning districts. The subject cannabis business is located in the M-1 district at 31881 Corydon Road, Suite 160 and 31875 Corydon Road, Suite 120, which are within the East Lake District neighborhood.

PA 2020-88 (Pipe Dreamz DA Amendment)

Page 2 of 3 ends

1 9
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Background
The cannabis business, Pipe Dreamz, is requesting to amend their DA to revise the CBF and establish a separate CBF rate for retail (e.g. storefront, delivery to customers) versus non-retail (e.g. cultivation, distribution, manufacturing and testing laboratory) cannabis operations. The proposed amendment also includes revisions to the definitions and general provisions. All other terms and provisions of the previously adopted DA would remain unchanged and would still be applicable.

The requested amendments are as a result of the City Council Cannabis Subcommittee’s response to the cannabis business owners’ concerns with operating a viable and successful cannabis business in the City.

Discussion
Since adopting the Cannabis Ordinance, other surrounding cities, as well as Riverside County, have allowed cannabis uses within their jurisdiction, which has created a competitive market for the cannabis businesses in Lake Elsinore. Due to the growing competition, stringent land use regulations and permitting requirements, and costs associated with operating and managing a cannabis business – the businesses have expressed concerns with their ability to remain in operation.

The Cannabis Subcommittee reviewed these concerns and directed staff to amend the Cannabis Ordinance and DAs to alleviate these issues while still ensuring compatible land uses and protecting the general welfare and safety of the community.

The following is a summary of the proposed DA amendment:
•Revised CBF for Cannabis Retail: The CBF rate for cannabis retail would be capped at $25 per square foot. Once it reaches this level, the 4% annual increase will no longer apply.
•Revised CBF for Cannabis Non-Retail: The CBF rate for cannabis non-retail would be reduced to $5 per square foot with no 4% annual increase. •CBF Payments: Cannabis businesses would now have the option to pay their CBF payments in 12 (monthly) equal payments instead of a lump sum payment annually (that was due at the time of City business license renewal).
•Floor Area Definition: The definition of “floor area” is proposed to be revised to mean the interior gross floor area square footage of a cannabis facility. In addition, the definition would be clarified to distinguish between cannabis retail and non-retail business floor areas. This revised definition is to create a clear delineation between the types of cannabis uses within a cannabis facility for purposes of calculating a cannabis business’ revised CBF.
•Floor Plan Exhibit(s): An updated floor plan exhibit of the cannabis facility would be included to provide a clear delineation between the retail and non-retail floor areas.

The new CBF rates would become effective in 2025 and would not be retroactive.

PA 2020-88 (Pipe Dreamz DA Amendment)

Page 3 of 3 ends

1 9
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Any future changes to the cannabis facility’s floor plan layout would require an amendment to the previously approved CUP subject to the Planning Commission’s review at a separate public hearing. Any CUP amendment that would revise the DA floor plan exhibit would be formalized through an Operating Memoranda pursuant to the terms of the cannabis business’ DA.

Environmental Determination
The proposed project is exempt from the California Environmental Quality Act (Cal. Pub. Res.

Code §§21000 et seq.: “CEQA”) and the CEQA Guidelines (14 C.C.R. §§ 15000 et seq.) pursuant to Section 15301 (Class 1, Existing Facilities). Class 1 consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. The proposed project is an existing cannabis business that is operating in a fully developed site and buildings. The proposed amendment to the business’ development agreement would not result in new construction, additional square footage, or expansion of the existing uses.

Public Notice
Notice of the public hearing has been published in the Press-Enterprise newspaper and mailed to property owners within 300 feet of the subject properties. As of the writing of this report, no written comments concerning these applications have been received by staff.

Fiscal Impact
The time and costs related to the processing of this application have been covered by the application fees paid by the applicants. No General Fund budgets have been allocated or used in the processing of these applications.

Attachments
Attachment 1 – DA-2025-08 Ordinance
Exhibit A – DA Amendment Form
Attachment 2 – GIS Exhibits
Attachment 3 – Public Notice Materials

ORDINANCE No. 2025-

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,

CALIFORNIA, APPROVING THE DEVELOPMENT AGREEMENT AMENDMENT (DA-2025-08) FOR PIPE DREAMZ LOCATED AT 31881 CORYDON ROAD, SUITE 160 AND 31875 CORYDON ROAD, SUITE 120 (APN: 370-051-031 AND 370-051-008)
Whereas, Timothy Scalzo has filed an application with the City of Lake Elsinore (City) requesting approval of Development Agreement (DA) No. 2025-08 (Attachment 2) to amend the DA to revise the Community Benefit Fee (CBF) and establish a separate CBF rate for retail (e.g. storefront, delivery to customers) versus non-retail (e.g. cultivation, distribution, manufacturing and testing laboratory) cannabis operations. The proposed amendment also includes revisions to the definitions and general provisions. The project is located at 31881 Corydon Road, Suite 160 and 31875 Corydon Road, Suite 120 (APN: 370-051-031 and 370-051-008); Whereas, Section 6.0 of the Western Riverside County Multiple Species Habitat Conservation Plan (MSHCP) requires that all discretionary projects within a MSHCP Criteria Cell undergo the Lake Elsinore Acquisition Process (LEAP) and Joint Project Review (JPR) to analyze the scope of the proposed development and establish a building envelope that is consistent with the MSHCP criteria;
Whereas, Section 6.0 of the MSHCP further requires that the City adopt consistency findings demonstrating that the proposed discretionary entitlement complies with the MSHCP Criteria Cell, and the MSHCP goals and objectives;
Whereas, pursuant to Chapter 19.12 (Development Agreements) of the Lake Elsinore Municipal Code (LEMC), the Planning Commission (Commission) has been delegated with the responsibility of reviewing and making a recommendation to the City Council (Council) whether the development agreement is consistent with the City’s General Plan and whether to approve the development agreement;
Whereas, on July 15, 2025, at a duly noticed public hearing, the Commission has considered evidence presented by the Community Development Department and other interested parties with respect to this item, and adopted a resolution recommending that the Council approve Development Agreement Amendment No. 2025-08; and
Whereas, on August 26, 2025, at a duly noticed Public Hearing, the Council has considered the recommendation of the Commission as well as evidence presented by the Community Development Department and other interested parties with respect to this item.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, DOES ORDAIN AS FOLLOWS:

Section 1: That in accordance with the MSHCP, the Council makes the following findings for MSHCP consistency:

1. The Project is not subject to the City’s LEAP and the Western Riverside County Regional Conservation Authority’s (RCA) JPR processes as it is not located within a Criteria Cell.

Ord. No. 2025-____

Page 2 of 4 ends

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4 1
3 2. The Project is consistent with the Riparian/Riverine Areas, Vernal Pools Guidelines, and the Fuel Management Guidelines as the Project is wholly located within an existing building and does not include any earth disturbing activities therefore Sections 6.1.2 or

6.3.1 of the MSHCP are not applicable.

3. The Project is consistent with the Protection of Narrow Endemic Plant Species Guidelines and the Additional Survey Needs and Procedures because the project is not located within any Narrow Endemic Plant Species Survey Areas or Critical Species Survey Areas.

4. The Project is consistent with the Fuels Management Guidelines because the Project site is not within or adjacent to any MSHCP Criteria Cell or conservation areas.

5. The Project has been conditioned to pay any applicable MSHCP Local Development Mitigation fees.

Section 2: The Council hereby finds and determines that the Project is categorically exempt from California Environmental Quality Act (Cal. Publ. Res. Code §§21000 et seq. “CEQA”) and CEQA Guidelines (14. Cal. Code Regs. §§15000 et seq.), specifically pursuant to Section 15301 (Class 1 – Existing Facilities), because the proposed project is an existing cannabis business that is operating within a fully developed site and building. The proposed amendment to the business’ development agreement would not result in new construction, additional square footage, or expansion of the existing use.

Section 3: That in accordance with California Planning and Zoning Law and the Section

19.12.080.B. of the LEMC, the Council makes the following findings regarding Development Agreement Amendment No. 2025-08:

1. It is consistent with the objectives, policies, general land uses and programs specified in the General Plan and any applicable specific plan.

The proposed development agreement amendment will continue to help offset the potential costs incurred by the City associated with the establishment of a cannabis facility within an industrial district. The project site’s General Plan Land Use designation is Limited Industrial (LI). The proposed project is consistent the LI land use designation and with the objectives, policies, general land uses and programs specified in the General Plan.

2. It is compatible with the uses authorized in, and the regulations prescribed for, the land use district in which the real property is located.

The proposed development agreement amendment will continue to facilitate the establishment of the cannabis facility within an existing industrial building. The cannabis facility has been in operation which includes manufacturing and storage uses consistent with other similar businesses within the Limited Industrial (LI) General Plan Land use designation and the Limited Manufacturing (M-1) Zoning designation.

3. It is in conformity with public convenience, general welfare and good land use practices.

The existing cannabis facility has been operating in a manner that has not resulted in negative impacts to the public and its general welfare. The proposed development agreement amendment will ensure the cannabis facility continues to have beneficial impacts to the surrounding community. Furthermore, the project has been reviewed and Ord. No. 2025-____

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3 conditioned by all applicable City departments to reduce the potential for any adverse effects.

4. It will not be detrimental to the health, safety and general welfare.

The proposed development agreement amendment will not be detrimental to the health, safety, and general welfare of the community because the existing cannabis facility has been operation without negative impacts or concerns. The development agreement amendment will ensure the cannabis facility continues to operate in a safe manner.

Furthermore, the proposed project has been reviewed and conditioned by all applicable City departments to reduce the potential for any adverse effects to the health, safety, and general welfare.

5. It will not adversely affect the orderly development of property or the preservation of property values;
The cannabis facility is an existing business that has been operation without land use issues and has not caused adverse impacts for existing businesses and future developments. The proposed development agreement amendment will ensure the cannabis facility continues to operate as such.

6. It is consistent with the provisions of Government Code Sections 65864 through 65869.5.

The proposed development agreement amendment includes all mandatory provisions required by Government Code § 65865.2 and does not include any provisions that are not authorized by the Development Agreement Act.

Section 4: Approval. The City Council hereby approves the Development Agreement Amendment No. 2025-08 attached hereto as Exhibit A with such modifications as approved by the City Attorney. The Mayor and City Clerk are hereby authorized and directed to execute and attest, respectively, the Development Agreement Amendment on behalf of the City of Lake Elsinore. The City Clerk is directed to transmit the Development Agreement Amendment to the County Recorder for recordation no later than ten (10) days after the adoption of this ordinance.

Section 5: Severability. If any provision of this Ordinance or its application is held invalid by a court of competent jurisdiction, such invalidity shall not affect other provisions, sections, or applications of the Ordinance which can be given effect without the invalid provision or application, and to this end each phrase, section, sentence, or word is declared to be severable.

Section 6: Effective Date. This Ordinance shall become effective at 12:01 a.m. on the thirty-first (31st) day after the date of adoption.

Section 7: Certification. The City Clerk shall certify to the passage of this Ordinance and shall cause a synopsis of the same to be published according to law PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, on this ____ day of _____________ 20___.

Ord. No. 2025-____

Page 4 of 4 ends

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4 1
3 Brian Tisdale,
Mayor
Attest:
___________________________________
Candice Alvarez, MMC
City Clerk

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

CITY OF LAKE ELSINORE )
I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Ordinance No. 2025-_ _ was introduced by the City Council of the City of Lake Elsinore, California, at the Regular meeting of August 26, 2025, and adopted at the Regular meeting of 2025 and that the same was adopted by the following vote:

AYES
NOES:

ABSTAIN:

ABSENT:

Candice Alvarez, MMC
City Clerk

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Lake Elsinore
130 South Main Street
Lake Elsinore, CA 92530
Attn: City Clerk
(Space Above Line For Recorder’s Use Only)
(Exempt from Recording Fees Per Gov. Code § 27383)

FIRST AMENDMENT TO

DEVELOPMENT AGREEMENT

BY AND BETWEEN THE

CITY OF LAKE ELSINORE
AND
TOES IN THE WEEDZ, INC.

Approved ___________ __, 2025
Ordinance No. 2025-_____
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FIRST AMENDMENT TO

DEVELOPMENT AGREEMENT

BY AND BETWEEN THE CITY OF LAKE ELSINORE
AND TOES IN THE WEEDZ, INC.

This First Amendment to Development Agreement (“First Amendment”), dated for identification only as of _________, 2025, is made by and between the City of Lake Elsinore, a California municipal corporation (“City”), and TOES IN THE WEEDZ, INC., a California limited liability company (“Developer”). This Amendment shall take effect on the “Amendment Effective Date,” as this term is hereafter defined. City and Developer may each be referred to herein individually as a “Party” or collectively as the “Parties.”

RECITALS
A.On September 8, 2020, pursuant to Ordinance No. 2020-1436, the City approved and adopted that certain “Development Agreement by and between the City of Lake Elsinore and “TOES IN THE WEEDZ, INC.,” which Development Agreement was recorded on October 13, 2022 in the Official Records of Riverside County, California as Instrument No. 2022-0427631 (the “Development Agreement”).

B.In connection with the Developer Agreement, Developer acquired an equitable interest in that certain real property located at (i) 31875 Corydon Street, Suite 120 in the City of Lake Elsinore, County of Riverside, State of California, Assessor' s Parcel Number 370- 051- 008 (" Parcel I"), which is within a manufacturing zoning district; and (ii) 31881 Corydon Road, Suite 160 in the City of Lake Elsinore, County of Riverside, State of California, Assessor' s Parcel Number 370- 051- 031 (" Parcel 2'), which is within a manufacturing zoning district (Parcel 1 and Parcel 2 are collectively referred to as the " Site").The Site is more particularly described in the Legal Description attached hereto as Exhibit A, and the Site is attached hereto as Exhibit B.

C.The total Cannabis Retail Business Floor Area (as defined below) is [ ] sq. ft. The total Non-Retail Cannabis Business Floor Area (as defined below) is [ ] sq. ft. The Floor Plan depicting the total floor area is attached hereto as Exhibit C.

D.Developer affirms that it has an equitable interest in the Site, evidenced by way of a lease with the Property Owner of the Site, Donna Marie Ostermiller, as trustee of the Donna Marie Ostermiller Separate Property Trust, and Timothy J. Scalzo, as successor trustee of the Frederick Thomas Scalzo Separate Property Trust.

E.The Property Owner have provided notarized written consent to the terms of this Amendment and the recordation thereof, attached hereto as Exhibit D.

F.Developer uses the Site for a Cannabis Business in accordance with California Cannabis Laws and the LEMC, as each may be amended from time to time (the “Project”).

G.On June 24, 2025, the City Council approved Ordinance No. 2025-1503 amending the Lake Elsinore Municipal Code (“LEMC”) Chapter 17.156 to: (i) streamline the regulation of cannabis-related business; (ii) to limit the number of cannabis-related business in the City. -2-
H.To strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development, the California Legislature adopted Government Code section 65864 et seq. (the “Development Agreement Statute”), which authorizes the City and an individual with an interest in real property to enter into a development agreement that establishes certain development rights in real property that is subject to a development agreement application.

I.Consistent with the requirements of the Development Agreement Statute, the City adopted LEMC, Chapter 19.12 (“Development Agreement Ordinance”), authorizing the use of and establishing the procedures and requirements for the consideration of development agreements within the City along with amendments thereto. LEMC, Section 19.12.020, provides for amendments to a development agreement “is the same as the procedure for entering into an agreement in the first instance.” LEMC, Section 19.12.010 requires submittal of an application along with information and supporting data as requested by the Director of Community Development for consideration of any development agreement. Developer has satisfied this requirement.

J.On _________ __, 2025, the City of Lake Elsinore Planning Commission held a duly noticed public hearing to consider the application for this First Amendment and recommended to the City Council approval of this Amendment.

K.On ___________ __, 2025, the City Council held a duly noticed public hearing to consider this First Amendment and found and determined that this First Amendment: (a) is consistent with the objectives, policies, general land uses, and programs specified in the City’s General Plan and any applicable specific plan; (b) is compatible with the uses authorized in, and the regulations prescribed for the Site and the surrounding area and will not adversely affect the orderly development of the Site or the preservation of property values; (c) is in conformity with public convenience, general welfare, and good land use practices; (d) will have an overall positive effect on the health, safety and welfare of the residents of and visitors to the City; and (e) constitutes a lawful, present exercise of the City’s police power and authority under the Development Agreement Statute and Development Agreement Ordinance.

L.Based on the findings set forth in Recital __herein, the City Council entered into this Amendment pursuant to and in compliance with the requirements of the Development Agreement Statute and the Development Agreement Ordinance; and did, therefore, in approving this Amendment introduce for first reading Ordinance No. 2025-___ (the “Enabling Ordinance”).

On __________ __, 2025, the City Council conducted the second reading of the Enabling Ordinance, thereby approving this Amendment to become effective thirty (30) days after the adoption thereof.

NOW, THEREFORE, in consideration of the mutual terms, obligations, promises, covenants, and conditions contained herein and for other valuable consideration, the sufficiency of which is hereby acknowledged, the Parties, and each of them, agree as follows:

SECTION 1. EXHIBITS
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The Development Agreement has attached to it four exhibits designated alphabetically as Exhibit A through Exhibit D. Exhibits A through D of the Development Agreement shall remain in full force and effect except to the extent that the provisions of this Section 1 of the Second Amendment modify those Exhibits.

The following documents are referred to in this Second Amendment, attached hereto and incorporated herein by this reference:

Exhibit A Legal Description
Exhibit B Site Plan1
Exhibit C Floor Plan1
Exhibit D Property Owner’s Consent
1 The Approved Site Plan and Floor Plan exhibits are on file as a public record and available for review at the City of Lake Elsinore’s City Clerk’s Office located at 130 South Main Street, Lake Elsinore, CA 92530.

SECTION 2. REVISIONS TO DEFINITIONS
The words and phrases used in this Second Amendment as defined terms shall have the meaning set forth in Section 2 of the Development Agreement, except as added and/or modified below, which defined terms shall be applicable to both the Development Agreement and the Second Amendment.
“Amendment Effective Date” means the later of: (i) the latest date of execution shown on the signature page hereto; or (ii) the Effective Date of the Enabling Ordinance. The Amendment Effective Date does not amend the Effective Date as defined in the Development Agreement, nor does the Amendment Effective Date modify or change the “Term” or the “Term Commencement Date.”
“Cannabis Business License” or “Cannabis Business Permit” means the City license established and authorized by LEMC, Section 17.156.080, authorizing permissible Cannabis Business activity, which can only be issued upon City approval of a conditional use permit, development agreement, and Additional City Approvals for each proposed Cannabis Business activity project.
“Conditional Use Permit” means Conditional Use Permit No. 2018-05 issued by the City to Developer pertaining to Developer’s original development of the Project and any subsequent amendments thereto. In the event that an amendment to the Conditional Use Permit pertaining to the Suite G Site has not been issued to the Developer as of the Amendment Effective Date, the City hereby reserves its discretion under the police power to approve, conditionally approve, or deny the issuance of any amendment to the Conditional Use Permit. “Development Regulations” means the following regulations as they are in effect as of the Effective Date and to the extent they govern or regulate the development of the Site, but -4-
excluding any amendment or modification to the Development Regulations adopted, approved, or imposed after the Effective Date that impairs or restricts Developer’s rights set forth in this Agreement, unless such amendment or modification is expressly authorized by this Agreement or is agreed to by Developer in writing: the City’s General Plan; any existing Specific Plan that include the Site, and, to the extent not expressly superseded by this Agreement, all other land use and subdivision regulations governing the permitted uses, density and intensity of use for obtaining required City permits and approvals for development, and similar matters that may apply to development of the Project on the Site during the Term of this Agreement that are set forth in Title 16 of the LEMC (Subdivisions), Title 17 of the LEMC (Zoning), except that Chapter 17.156 of Title 17 shall be as amended by Ordinance No. 2025-___, and Title 19 of the LEMC (Development). Notwithstanding the foregoing, the term “Development Regulations,” as used herein, does not include any City ordinance, resolution, code, rule, regulation, or official policy governing any of the following: (i) the conduct of businesses, professions, and occupations; (ii) taxes and assessments; (iii) the control and abatement of nuisances; (iv) the granting of encroachment permits and the conveyance of rights and interests which provide for the use of or the entry upon public property; (v) the exercise of the power of eminent domain; or (vi) the California Building Standards Codes.
“Cannabis Retail Business Floor Area” means interior gross floor area allocated and dedicated to the retail operation of a Cannabis Retail Business and shall include but not limited to reception or entrance lobby area for customer check-in, retail product storage room(s), office(s), and other ancillary area(s) to support the retail operation (including cannabis delivery). “Cannabis Non-Retail Business Floor Area” means interior gross floor area allocated and dedicated to the cannabis non-retail operation(s) of a Cannabis Non-Retail Business, such as cultivation, distribution, manufacturing, and/or testing laboratory, and shall include but not limited to storage room(s) of finished and raw products, office(s), and other ancillary area(s) to support the non-retail operation(s).

SECTION 3. REVISIONS TO GENERAL PROVISIONS
In order to update certain renumbering of the Lake Elsinore Municipal Code, subparts e and f of Section 1.8 of the Development Agreement entitled Termination are hereby amended to read as follows.
e. abandonment of the Developer’s Conditional Use Permit pursuant to LEMC, Section 17.415.070(D), including the failure of the Developer to commence operation of the Project on the Site within the time presented following the approval of the Conditional Use Permit;
f. suspension or revocation of Developer’s Conditional Use Permit pursuant to LEMC, Section 17.415.070(G);
In order to address the potential for Developer modifications to the square footage of area allocated to the Cannabis Retail Business and/or Cannabis Non-Retail Business, Section 1.9(a) of the Development Agreement entitled Operating Memoranda; Amendment of Agreement is hereby amended to read as follows.
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a. Operating Memoranda. The provisions of this Agreement require a close degree of cooperation between the City and the Developer. The Development of the Developer Property may demonstrate that clarifications to this Agreement and the Existing Land Use Regulations are appropriate with respect to the details of performance of the City and the Developer. To the extent allowable by law, the Developer shall retain a certain degree of flexibility as provided herein with respect to all matters, items and provisions covered in general under this Agreement, except for those which relate to the (i) term; or (ii) permitted uses. When and if the Developer finds it necessary or appropriate to make changes, adjustments or clarifications to matters, items or provisions not enumerated in (i) through (ii) above, the Parties shall effectuate such changes, adjustments or clarifications through operating memoranda (the “Operating Memoranda”) approved by the Parties in writing which reference this Section 1.9(a). Operating Memoranda are not intended to constitute an amendment to this Agreement but mere ministerial clarifications; therefore public notices and hearings shall not be required. The City Manager shall be authorized, upon consultation with, and approval of, the Developer, to determine whether a requested clarification may be effectuated pursuant to this Section or whether the requested clarification is of such character to constitute an amendment to this Agreement which requires compliance with the provisions of Section 1.9(b) below. The Parties agree that proposed changes to the Cannabis Retail Business Floor Area and/or the Cannabis Non-Retail Business Floor Area may be addressed by way of an Operating Memoranda and shall generally include and be evidenced by an updated Floor Plan (Exhibit C) reflecting such changes.

SECTION 4. REVISIONS TO COMMUNITY BENEFITS FEE
Section 4.2 of the Development Agreement entitled Community Benefits Fee is hereby amended to add the following subparts c and d:
c.Community Benefits Fee Upon the Amendment Effective Date.

Notwithstanding subparts (a) and (b) above, concurrent with the Amendment Effective Date, and on each anniversary thereafter, Developer shall make payment to the City pursuant to the following fee schedule:

All Cannabis Business
activities
$[insert rate as of 6/30/25] per square foot
of area allocated to the Cannabis Retail
Business with an annual 4% increase but
in no event to exceed $25 per square foot;
and
$5 per square foot of area allocated to
Cannabis Non-Retail Business with no
annual increase as provided in subpart d.
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Developer may elect to make payments of the Community Benefit Fee due on the Amendment Effective Date and each Adjustment Date (as defined herein) in up to 12 (monthly) equal installments, the first installment to be made on the Amendment Effective Date or Adjustment Date, as applicable. Installment payment plans shall be evidenced by separate agreements of the Parties.
d.Annual Increase. In order to account for the increasing cost of providing City services, the Community Benefits Fee set forth in Section 4.2(c) for any Cannabis Retail Business shall be increased annually commencing on each anniversary of the Amendment Effective Date (each of which day shall be continued to be referred to as an “Adjustment Date”) until said fee reaches $25 per square foot of Floor Area. Each Adjustment Date shall be continued to be numbered in sequence (e.g., Third Adjustment Date, Fourth Adjustment Date, etc.).

The annual increase shall not apply to the area allocated and dedicated to any Cannabis Non-Retail Business. Each such annual increase in the Community Benefits Fee shall be determined as follows:

Article 4 of the Development Agreement is hereby amended to add the following Section

4.5:

4.5 Tax Payment and Facility Payment Offset.
a. In the event that the voters of the City of Lake Elsinore approve a Cannabis business tax or any percentage of gross receipts based fee, Developer shall pay the amount established by any such measure or initiative (“Tax Payment”) in accordance with any procedure so established by the City, provided, however, that Developer shall be entitled to an offset, dollar for dollar, of such Tax Payment against the Community Benefit Fee then owing or, alternatively, if the Community Benefit Fee then owing is insufficient to fully satisfy the offset as provided herein, such unsatisfied offset shall be a credit against the payment of any future Community Benefit Fee until such offset is fully satisfied. b. In the event that the voters of the City of Lake Elsinore or the City Council approve a fee based on the square footage of premises where permitted commercial cannabis activities, Developer shall pay the amount established thereby (“Facility Payment”) in accordance with any procedure so established by the City, provided, however, that Developer shall be entitled to an offset, dollar for dollar, of such Facility Payment against the Community Benefit Fee then owing or, alternatively, if the Community Benefit Fee then owing is insufficient to fully satisfy the offset as provided herein, such unsatisfied offset shall be a credit against the payment of any future Community Benefit Fee until such offset is fully satisfied.
c. Imposition of a Tax Payment and/or a Facility Payment obligation by the City or the voters of the City of Lake Elsinore shall not relieve Developer of its obligation to pay the Community Benefit Fee except for the offset as set forth in Sections 4.5.a, 4.5.b, 4.5.c, and 4.5.d above.
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SECTION 5. ADDITIONAL PROVISIONS

5.1 Release. In consideration for this First Amendment and the provisions as set forth herein, and subject to the City Council approving/adopting this First Amendment Developer, on behalf of itself and its respective successors, assigns, officials, directors, officers, employees, insurers, lenders, lien holders, attorneys, agents, and other representatives, do hereby release the City as any and all claims, actions and causes of action, obligations, liabilities, indebtedness, breaches of duty, claims for injunctive and other equitable relief, suits, liens, losses, costs or expenses, including attorney’s fees, of any nature whatsoever, known or unknown, fixed or contingent as of the Amendment Effective Date.

5.2 Counterparts. This First Amendment may be executed in counterparts, each of which so executed shall be deemed an original, and such counterparts together shall constitute but one First Amendment.

5.3 No Other Changes. Except as modified by this First Amendment, the terms and conditions of the Original Development Agreement, remain in full force and effect and shall be incorporated as a part of and interpreted as one integrated agreement covering the subjects included therein. If there are any conflicts between the provisions of this First Amendment and the original Development Agreement, the provisions of this First Amendment shall control.

5.4 Recordation by City Clerk. Pursuant to Government Code Section 65868.5, within ten (10) days of execution of this First Amendment by the Parties, the City Clerk shall record a copy with the Riverside County Recorder. Thereafter, pursuant to Government Code Section 65868.5, the burdens of the First Amendment shall be binding upon, and the benefits of the agreement shall inure to, all successors in interest to the Parties to the First Amendment. [SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the Parties have executed this ______________ Amendment as of the dates set forth below.
“CITY”

CITY OF LAKE ELSINORE,
a municipal corporation
Date: By:

Mayor
ATTEST:

By:

Candice Alvarez, MMC, City Clerk
APPROVED AS TO FORM:

By:

David Mann, Acting City Attorney
“DEVELOPER”
TOES IN THE WEEDZ, INC.,
a California Corporation
Date: By:

Tim Scalzo, Its: CEO

STATE OF CALIFORNIA )
) §
County of )
On , before me, a
Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct
WITNESS my hand and official seal.
________________________________
Signature of Notary
(Affix seal here)
A notary public or other officer completing this
certificate verifies only the identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.

Page 1 ends

EXHIBIT A

LEGAL DESCRIPTION
The real property referred to herein is situated in the County of Riverside, City of Lake Elsinore, State of California, and is described as follows:

Page 1 ends

EXHIBIT B

SITE PLAN
[TO BE INSERTED]

Page 1 ends

EXHIBIT C

FLOOR PLAN
[Delineated to Show Cannabis Retail Business Area versus Non-Retail Area(s)] [TO BE INSERTED]

Page 1 ends

EXHIBIT D
PROPERTY OWNER’S CONSENT
[ATTACHED]

Page 2 ends

PROPERTY OWNER’S CONSENT
__________________________, a California ________________, being the owner of the real properties described in Exhibit A to this ____________ Amendment to Development Agreement by and between the City of Lake Elsinore and ______________________, dated for identification as of ________________, 2025 (the “________ Amendment”), do hereby consent to the recordation of said ____________ Amendment in the Official Records of the County of Riverside. ____________________________,
a ___________________
Date: By:
_______________, Its: ____________
[notary required]

CORYDON ST
Maxar

NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the City Council of the City of Lake Elsinore, California, will hold a Public Hearing on August 26, 2025, at the Lake Elsinore Cultural Center, 183 North Main Street, Lake Elsinore, California, 92530, at 7:00 p.m., or as soon thereafter as the matter may be heard, to consider the following:

Planning Application No. 2020-88 (Pipe Dreamz): The proposed request is an amendment to an approved Development Agreement (DA-2025-08) for an existing cannabis business, Pipe Dreamz, located at 31881 Corydon Road, Suite 160 and 31875 Corydon Road, Suite 120. The amendment is primarily to reduce the Community Benefit Fund fees including establishing a separate fee rate for retail and non-retail cannabis uses and allowing fees to be paid in monthly payments. The amendment would not change the cannabis business approved land use(s) and licenses(s).

The proposed project is exempt from California Environmental Quality Act (CEQA), pursuant to California Environmental Quality Act (Cal. Pub. Res. Code §§21000 et seq.: CEQA) and the CEQA Guidelines (14 C.C.R. §§ 15000 et seq.) pursuant to CEQA Guidelines Section 15301 (Class 1: Existing Facilities).

PLANNING COMMISSION RECOMMENDATION: On July 15, 2025, at a duly noticed Public Hearing, the Lake Elsinore Planning Commission by a 5-0 vote recommended that the City Council approve the proposed amendment to the development agreement.

ALL INTERESTED PERSONS are invited to submit written information, express opinions or otherwise submit written evidence by email to [email protected].

If you wish to legally challenge any action taken by the City on the above matter, you may be limited to raising only those issues you or someone else at the Public Hearing described in this notice, or in written correspondence delivered to the City prior to or at the Public Hearing. If you require accommodation to participate in a Public Hearing, please contact the City Clerks office at (951) 674-3124, ext. 269. All Agenda materials are available for review on the Citys website at www.lake-elsinore.org the Friday before the Public Hearing.

FURTHER INFORMATION on this item may be obtained by contacting Carlos Serna, Associate Planner in the Planning Division at [email protected] or (951) 824-7415.

Candice Alavarez, MMC,
City Clerk

3512 14 Street
Riverside, California 92501
(951) 368-9229
[email protected]
City of Lake Elsinore
130 South Main Street
Lake Elsinore, California 92530
Account Number:

Ad Order Number:

Customer's Reference/PO Number:

Publication:
5209153
0011750914
The Press-Enterprise
08/16/2025Publication Dates:

Total Amount: $360.96
Payment Amount:

Amount Due:
$0.00
$360.96
Notice ID: VEOv4ylNcZUNOV5g9ewI
Invoice Text: NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that the City Council of the City of Lake Elsinore, California, will hold a Public Hearing on August 26, 2025, at the Lake Elsinore Cultural Center, 183 North Main Street, Lake Elsinore, California, 92530, at 7:00 p.m., or as soon thereafter as the matter may be heard, to consider the following: Planning Application No. 2020-88 (Pipe Dreamz): The proposed request is an amendment to an approved Development Agreement (DA-2025-08) for an existing cannabis business, Pipe Dreamz, located at 31881 Corydon Road, Suite 160, and 31875 Corydon Road, Suite 120. The amendment is primarily to reduce the Community Benefit Fund fees, including establishing a separate fee rate for retail and non-retail cannabis uses and allowing fees to be paid in monthly payments. The amendment would not change the cannabis business’ approved land use(s) and licenses(s). The proposed project is exempt from California Environmental Quality Act (CEQA), pursuant to California Environmental Quality Act (Cal. Pub. Res. Code §§21000 et seq.: “CEQA”) and the CEQA Guidelines (14 C.C.R. §§ 15000 et seq.) pursuant to CEQA Guidelines Section 15301 (Class 1: Existing Facilities). PLANNING COMMISSION RECOMMENDATION: On July 15, 2025, at a duly noticed Public Hearing, the Lake Elsinore Planning Commission by a 5-0 vote recommended that the City Council approve the proposed amendment to the development agreement.

ALL INTERESTED PERSONS are invited to submit written information, express opinions or otherwise submit written evidence by email to calvarez@Lake- Elsinore.org. If you wish to legally challenge any action taken by the City on the above matter, you may be limited to raising only those issues you or someone else at

The Press-Enterprise
3512 14 Street
Riverside, California 92501
(951) 368-9229
City of Lake Elsinore
130 South Main Street
Lake Elsinore, California 92530
Publication: The Press-Enterprise

PROOF OF PUBLICATION OF
Ad Desc: 0011750914
FILE NO. 0011750914

PROOF OF PUBLICATION
I am a citizen of the United States. I
am over the age of eighteen years and
not party to or interested in the above-
entitled matter. I am an authorized
representative of THE PRESS-
ENTERPRISE, a newspaper of general
circulation, printed and published daily
in the County of Riverside, and which
newspaper has been adjudicated a
newspaper of general circulation by the
Superior Court of the County of
Riverside, State of California, under
date of April 25, 1952, Case Number
54446, under date of March 29, 1957,
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267864, and under date of September
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Date: August 16, 2025.

At: Riverside, California
______________
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OWNE APN_D OWNERNAME
RADIUS 300'
1 1
370-051-008 SCALZO-OSTERMILLER LP

SCALZO-OSTERMILLER LP

PROVENTURE
370-051-031
370-051-030
370-051-029
370-031-015
370-031-016
370-031-020
370-051-007
370-051-009
370-051-012
370-051-013
370-051-019
370-051-028
370-051-027
370-051-026
370-051-003
370-051-021
370-051-022
370-051-023
370-051-024
370-051-025
370-051-015
370-051-016
370-051-017
370-051-018
370-051-020
370-051-014
370-051-010
370-051-011
2 3 31881 140 TRUST DTD 11/27/20
ALESCO DEV CO4
4 ALESCO DEV CO
4 ALESCO DEV CO
4 ALESCO DEV CO
4 ALESCO DEV CO
4 ALESCO DEV CO
4 ALESCO DEV CO
4 ALESCO DEV CO
4 ALESCO DEV CO
5 31881 120 TRUST DTD 11/27/20
PAUL D BASSETT6
7 STEWART FAMILY TRUST DTD 06/27/16
STEWART FAMILY TRUST DTD 06/27/16

MARK ABUTRAB
7 37
8 9 DANIEL J BONELLI
10 11
12 13
14 15
16 17
18 19

M&E PROP

GILBERT ANTONIO ALBA

MICHAEL T AUGUSTINE

JOSHUA GRANT

GAR & ASSOC
19AARON DAVIS
HILZ FAMILY TRUST 11/8/1994
SHAWN A VIOLA 38
4GEORGE SADLER
4HOLDINGS CLEARWETHER

BLUE LAKE INDUSTRIAL CONDO OWNERS
ASSN
12 1720
21 370-051-032
370-051-006 18REALTY AMBER
13MYERS KATHLEEN A SEPARATE PROPERTY

REVOCABLE TRUST D

CLEARY MICHAEL M & KATHLYN L REV TRUST
AJG TRUST DTD 10/17/14
AJG TRUST DTD 10/17/14

IE REAL ESTATE HOLDING

JAMES W PRUITT
422
23 24
24 25
26 27
28 29
30 31
31 31
32 32
33 39
38 40
37 36
35 34
370-051-005
370-051-004
370-051-001
370-051-002
370-031-017
370-031-018
370-031-019
370-031-021
370-031-022
370-031-008
370-031-009
370-031-010
370-031-011
370-031-012
370-031-013
370-031-014
370-030-007
370-030-012
370-030-013
370-050-023
370-060-051
370-060-032
370-060-035
14 1 154 7
4 8MAKE GOOD DECISIONS TRUST 3/8/2019
PROP LCB 16 9 6BLUE LAKE INDUSTRIAL CONDO ASSN

ANITA SUILLINS
1040 20 5COLLETT ENTERPRISES

COLLETT ENTERPRISES

MICHAEL SCHEINKER

BARRY FAMILY HOLDINGS
EVMWD
41139
3 221
36PALO VERDE LAND DEV

EAU CLAIRE APARTMENTS
TRUST DTD 04
22 1
4 23

ELSINORE VALLEY MUNICIPAL WATER DIST

SOUTHERN CALIFORNIA EDISON CO

WILDOMAR BESS BRP
4 725 2426
27 243031875 CORYDON ST STE 120
APN: 370-051-008
LEGAL DESC;UNIT E2 CM 148/177
4 31 2831 2931 3531881 CORYDON ST STE 160
APN:370-051-031
LEGAL DESC;UNIT H6 CM 148/177
32 32
33 34DATE: 6/11/2025
CONTACT: DAVID L. NOLA
PHONE : (949)903-6919
M
Map Prepared by:

L G ´
Leon Mapping & GIS Services
15031 Chatsworth St, Ste 17
Mission Hills, CA 91345
818-235-7649
[email protected] 0 50 100 200 300Feet

Page 1 of 1 ends

RADIUS 300' OWNERS LIST
31881 CORYDON ST UNIT 160 & 31875 CORYDON UNT 120 APN 370-051-031& 370-051-008 OWNERAPN OWNERNAME MAIL_ADDRESS MAIL_CITY SITE_ADDRESS
1 1
2 3
4 4
4 4
4 4
4 4
4 5
6 7
7 8
9 370-051-008 SCALZO-OSTERMILLER LP
370-051-031 SCALZO-OSTERMILLER LP
370-051-030 PROVENTURE
PO BOX 1660 SAN JUAN CAPISTRA, CA 92693 31875 CORYDON ST 120 SAN JUAN CAPISTRA, CA 92693 31881 CORYDON ST 160PO BOX 1660 25111 CEDAR RIDGE CT
3225 MCLEOD DR #777
15821 VENTURA BLVD #665
15821 VENTURA BLVD #665
15821 VENTURA BLVD #665
15821 VENTURA BLVD #665
15821 VENTURA BLVD #665
15821 VENTURA BLVD #665
15821 VENTURA BLVD #665
15821 VENTURA BLVD #665
15821 VENTURA BLVD #665
3225 MCLEOD DR #777
18491 AVENIDA DE CAMELIA
130 AVENIDA BARCELONA
130 AVENIDA BARCELONA
33549 CEDAR CREEK LN
30254 SKIPPERS WAY DR
21385 HODAN HILL CT
26222 AVENIDA BONACHON
25800 BUFFALO CIR
WILDOMAR, CA 92595
LAS VEGAS, NV 89121
ENCINO, CA 91436
31881 CORYDON ST 150
31881 CORYDON ST 140
31885 CORYDON ST 110
31885 CORYDON ST 120
31885 CORYDON ST 160
31875 CORYDON ST 110
31875 CORYDON ST 130
31875 CORYDON ST 160
31875 CORYDON ST 170
31877 CORYDON ST 150
31881 CORYDON ST 130
31881 CORYDON ST 120
31881 CORYDON ST 110
31883 CORYDON ST 130
31879 CORYDON ST 110
31879 CORYDON ST 120
31879 CORYDON ST 130
31879 CORYDON ST 140
31879 CORYDON ST 150
31877 CORYDON ST 110
31877 CORYDON ST 120
31877 CORYDON ST 130
31877 CORYDON ST 140
31877 CORYDON ST 160
31875 CORYDON ST 180
31875 CORYDON ST 140
31875 CORYDON ST 150
370-051-029 31881 140 TRUST DTD 11/27/20
370-031-015 ALESCO DEV CO
370-031-016 ALESCO DEV CO ENCINO, CA 91436
370-031-020 ALESCO DEV CO ENCINO, CA 91436
370-051-007 ALESCO DEV CO ENCINO, CA 91436
370-051-009 ALESCO DEV CO ENCINO, CA 91436
370-051-012 ALESCO DEV CO ENCINO, CA 91436
370-051-013 ALESCO DEV CO ENCINO, CA 91436
370-051-019 ALESCO DEV CO ENCINO, CA 91436
370-051-028 ALESCO DEV CO ENCINO, CA 91436
370-051-027 31881 120 TRUST DTD 11/27/20
370-051-026 PAUL D BASSETT
LAS VEGAS, NV 89121
MURRIETA, CA 92562
SAN CLEMENTE, CA 92672
SAN CLEMENTE, CA 92672
LAKE ELSINORE, CA 92532
CANYON LAKE, CA 92587
MURRIETA, CA 92562
MISSION VIEJO, CA 92691
MENIFEE, CA 92584
370-051-003 STEWART FAMILY TRUST DTD 06/27/16
370-051-021 STEWART FAMILY TRUST DTD 06/27/16
370-051-022 MARK ABUTRAB
370-051-023 DANIEL J BONELLI
10 370-051-024 M&E PROP
11 370-051-025 GILBERT ANTONIO ALBA
12 370-051-015 MICHAEL T AUGUSTINE
13 370-051-016 JOSHUA GRANT
14 370-051-017 GAR & ASSOC
25111 CEDAR RIDGE CT
1551 HACKETT AVE
WILDOMAR, CA 92595
LONG BEACH, CA 90815
MENIFEE, CA 9258415 370-051-018 AARON DAVIS 25820 BETH DR 16 370-051-020 HILZ FAMILY TRUST 11/8/1994
17 370-051-014 SHAWN A VIOLA
18 370-051-010 GEORGE SADLER
19 370-051-011 HOLDINGS CLEARWETHER
20 370-051-032 ASSN
30284 CLEAR WATER DR
31875 CORYDON ST #180
31875 CORYDON ST #140
PO BOX 1976
CANYON LAKE, CA 92587
LAKE ELSINORE, CA 92530
LAKE ELSINORE, CA 92530
FALLBROOK, CA 92088
WOODLAND HILLS, CA 91364
MENIFEE, CA 92586
21021 VENTURA BLVD #300
29826 HAUN RD #30521 370-051-006 REALTY AMBER 31883 CORYDON ST 160

MYERS KATHLEEN A SEPARATE PROPERTY
22 370-051-005 REVOCABLE TRUST D 20902 CORTNER AVE
22190 SAN JOAQUIN DR
32126 CABERNET PL
32126 CABERNET PL
32295 MISSION TRL #425
22400 SKY BREEZE CT
22461 VILLAGE WAY DR
LAKEWOOD, CA 90715
CANYON LAKE, CA 92587
WILDOMAR, CA 92595
WILDOMAR, CA 92595
LAKE ELSINORE, CA 92530
MURRIETA, CA 92562
31883 CORYDON ST 150
31883 CORYDON ST 140
31883 CORYDON ST 110
31883 CORYDON ST 120
31885 CORYDON ST 130
31885 CORYDON ST 140
31885 CORYDON ST 150
31885 CORYDON ST 170
23 370-051-004 TRUST
24 370-051-001 AJG TRUST DTD 10/17/14
24 370-051-002 AJG TRUST DTD 10/17/14
25 370-031-017 IE REAL ESTATE HOLDING
26 370-031-018 JAMES W PRUITT
27 370-031-019 3/8/2019 CANYON LAKE, CA 92587
28 370-031-021 PROP LCB 23905 CLINTON KEITH #114-369 WILDOMAR, CA 92595 29 370-031-022 BLUE LAKE INDUSTRIAL CONDO ASSN
30 370-031-008 ANITA SUILLINS
21021 VENTURA BLVD #300
32841 ALDERBROOK RD
2960 N RADIANT STAR RD
2960 N RADIANT STAR RD
2960 N RADIAN STAR RD
33109 CHEYENNE CIR
33109 CHEYENNE CIR
27680 BENIGNI AVE
WOODLAND HILLS, CA 91364
WILDOMAR, CA 92595
POST FALLS, ID 83854
POST FALLS, ID 83854
POST FALL, ID 83854
MENIFEE, CA 92584
31887 CORYDON ST 110
31887 CORYDON ST 120
31887 CORYDON ST 130
31887 CORYDON ST 140
31887 CORYDON ST 150
31887 CORYDON ST 160
31887 CORYDON ST 170
31 370-031-009 COLLETT ENTERPRISES
31 370-031-010 COLLETT ENTERPRISES
31 370-031-011 COLLETT ENTERPRISES
32 370-031-012 MICHAEL SCHEINKER
32 370-031-013 MICHAEL SCHEINKER
33 370-031-014 BARRY FAMILY HOLDINGS
39 370-030-007 EVMWD
MENIFEE, CA 92584
MENIFEE, CA 92585
P O BOX 3000 LAKE ELSINORE, CA 92531
SAN DIEGO, CA 92116
TEMECULA, CA 92592
38 370-030-012 PALO VERDE LAND DEV 4452 PARK BLVD #103
43801 CORONADO DR40 370-030-013 EAU CLAIRE APARTMENTS

CASTELLON NOEL A & RUTH S FAMILY
37 370-050-023 LIVING TRUST DTD 04
20590 CEREAL ST
25014 RIVERVIEW LN MURRIETA, CA 92562
LAKE ELSINORE, CA 92531
POMONA, CA 91768
31885 CORYDON ST
33751 MISSION TRL36 370-060-051 ELSINORE VALLEY MUNICIPAL WATER DIST P O BOX 3000 35 370-060-032 SOUTHERN CALIFORNIA EDISON CO
34 370-060-035 WILDOMAR BESS BRP

Page 1 of 1 ends

OWNERAPN OWNERNAME MAIL_ADDRESS MAIL_CITY
1 2
3 4
5 6
7 8
9 370-051-008 SCALZO-OSTERMILLER LP
370-051-030 PROVENTURE
PO BOX 1660 SAN JUAN CAPISTRA, CA 92693
WILDOMAR, CA 92595
LAS VEGAS, NV 89121
ENCINO, CA 91436
25111 CEDAR RIDGE CT
3225 MCLEOD DR #777
15821 VENTURA BLVD #665
3225 MCLEOD DR #777
18491 AVENIDA DE CAMELIA
130 AVENIDA BARCELONA
33549 CEDAR CREEK LN
30254 SKIPPERS WAY DR
21385 HODAN HILL CT
26222 AVENIDA BONACHON
25800 BUFFALO CIR
370-051-029 31881 140 TRUST DTD 11/27/20
370-031-015 ALESCO DEV CO
370-051-027 31881 120 TRUST DTD 11/27/20
370-051-026 PAUL D BASSETT
LAS VEGAS, NV 89121
MURRIETA, CA 92562
SAN CLEMENTE, CA 92672
LAKE ELSINORE, CA 92532
CANYON LAKE, CA 92587
MURRIETA, CA 92562
MISSION VIEJO, CA 92691
MENIFEE, CA 92584
370-051-003 STEWART FAMILY TRUST DTD 06/27/16
370-051-022 MARK ABUTRAB
370-051-023 DANIEL J BONELLI
10 370-051-024 M&E PROP
11 370-051-025 GILBERT ANTONIO ALBA
12 370-051-015 MICHAEL T AUGUSTINE
13 370-051-016 JOSHUA GRANT
14 370-051-017 GAR & ASSOC
25111 CEDAR RIDGE CT
1551 HACKETT AVE
WILDOMAR, CA 92595
LONG BEACH, CA 90815
MENIFEE, CA 9258415 370-051-018 AARON DAVIS 25820 BETH DR 16 370-051-020 HILZ FAMILY TRUST 11/8/1994
17 370-051-014 SHAWN A VIOLA
18 370-051-010 GEORGE SADLER
19 370-051-011 HOLDINGS CLEARWETHER
20 370-051-032 ASSN
30284 CLEAR WATER DR
31875 CORYDON ST #180
31875 CORYDON ST #140
PO BOX 1976
CANYON LAKE, CA 92587
LAKE ELSINORE, CA 92530
LAKE ELSINORE, CA 92530
FALLBROOK, CA 92088
WOODLAND HILLS, CA 91364
MENIFEE, CA 92586
21021 VENTURA BLVD #300
29826 HAUN RD #30521 370-051-006 REALTY AMBER

MYERS KATHLEEN A SEPARATE PROPERTY
22 370-051-005 REVOCABLE TRUST D 20902 CORTNER AVE
22190 SAN JOAQUIN DR
32126 CABERNET PL
LAKEWOOD, CA 90715
CANYON LAKE, CA 92587
WILDOMAR, CA 92595
LAKE ELSINORE, CA 92530
MURRIETA, CA 92562
23 370-051-004 TRUST
24 370-051-001 AJG TRUST DTD 10/17/14
25 370-031-017 IE REAL ESTATE HOLDING
26 370-031-018 JAMES W PRUITT
27 370-031-019 3/8/2019
32295 MISSION TRL #425
22400 SKY BREEZE CT
22461 VILLAGE WAY DR CANYON LAKE, CA 92587
28 370-031-021 PROP LCB 23905 CLINTON KEITH #114-369 WILDOMAR, CA 92595 29 370-031-022 BLUE LAKE INDUSTRIAL CONDO ASSN
30 370-031-008 ANITA SUILLINS
21021 VENTURA BLVD #300
32841 ALDERBROOK RD
2960 N RADIANT STAR RD
33109 CHEYENNE CIR
27680 BENIGNI AVE
WOODLAND HILLS, CA 91364
WILDOMAR, CA 92595
POST FALLS, ID 83854
MENIFEE, CA 92584
31 370-031-009 COLLETT ENTERPRISES
32 370-031-013 MICHAEL SCHEINKER
33 370-031-014 BARRY FAMILY HOLDINGS
39 370-030-007 EVMWD
MENIFEE, CA 92585
P O BOX 3000 LAKE ELSINORE, CA 92531
SAN DIEGO, CA 92116
TEMECULA, CA 92592
38 370-030-012 PALO VERDE LAND DEV 4452 PARK BLVD #103
43801 CORONADO DR40 370-030-013 EAU CLAIRE APARTMENTS

CASTELLON NOEL A & RUTH S FAMILY
37 370-050-023 LIVING TRUST DTD 04 25014 RIVERVIEW LN MURRIETA, CA 92562 LAKE ELSINORE, CA 92531
POMONA, CA 91768
36 370-060-051 ELSINORE VALLEY MUNICIPAL WATER DIST P O BOX 3000 35 370-060-032 SOUTHERN CALIFORNIA EDISON CO
34 370-060-035 WILDOMAR BESS BRP

LEON MAPPING & GIS SERVICES
S INNOVATION WAY 2ND FL
1360 POST OAK BLVD #400
15031 CHATSWORTH ST # 17
HOUSTON, TX 77056
MISSION HILLS, CA 91345
DAVID L. NOLA 2915 RED HILL AVE. UNIT C103 COSTA MESA, CA 92627 29)
First Reading of Local Responsibility Area Fire Map Ordinance Introduce by title only and waive further reading of AN ORDINANCE OF THE CITY

COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADOPTING THE FIRE

HAZARD SEVERITY ZONES AS RECOMMENDED BY THE CALIFORNIA DEPARTMENT

OF FORESTRY AND FIRE PROTECTION PURSUANT TO GOVERNMENT CODE SECTION 51178.

Page 1 of 3 ends

REPORT TO CITY COUNCIL
To:Honorable Mayor and Members of the City Council
From:Jason Simpson, City Manager
Prepared by:Traci Williams, Fire Marshal
Date:August 26, 2025
Subject:First Reading of Local Responsibility Area Fire Map Ordinance Recommendation
Introduce by title only and waive further reading of AN ORDINANCE OF THE CITY COUNCIL OF

THE CITY OF LAKE ELSINORE, CALIFORNIA, ADOPTING THE FIRE HAZARD SEVERITY

ZONES AS RECOMMENDED BY THE CALIFORNIA DEPARTMENT OF FORESTRY AND FIRE PROTECTION PURSUANT TO GOVERNMENT CODE SECTION 51178.

Background
On March 24, the California OSFM issued the 2025 Recommended Local Responsibility Area (LRA) FHSZ maps for Riverside County.

The recent updates to Fire Hazard Severity Zones (FHSZ) in California provide a more precise assessment of wildfire risks using modern climate data and advanced fire modeling. These updates impact Local Responsibility Area (LRA), influencing fire prevention measures. Including defensible space, building codes and real estate disclosures requirements.

Discussion
Fire Hazard Severity Zones (FHSZ) arose from major destructive fires across California, prompting the recognition of these areas and identify strategies to reduce wildfire risk. Government Code Sections 51178-51179 assigns responsibility to the Office of the State Fire Marshal (OSFM) to classify lands statewide into FHSZ that are Moderate, High or Very High.

These classifications are determined using factors such as vegetation or fuel loading, terrain, fire weather conditions, historical fire activity, ember production and movement and wind patterns where wind has been identified as a major cause of wildfire spread. FHSZ are based on the likelihood of a fire occurring in these areas and its expected behavior over a 30 to 50 year period under existing conditions.

Local Responsibility Area Fire Map Ordinance

Page 2 of 3 ends

In response to the San Bernardino Panorama Fire in 1980, the State implemented California Public Resource Code 4201-4204 which mandated the creation of FHSZ for the State Responsibility Area (SRA). The SRA identifies the land areas in which the state is required to suppress and prevent all unwanted fire. The first SRA map was published in 1985. FHSZ classifications in the Local Responsibility Areas (LRA) were established with Assembly Bill (AB) 337 in 1992 after the Alameda County Tunnel Fire in 1991. The LRA map identifies land areas where the local government is responsible to mitigate and prevent wildfires. In 2011, CAL FIRE completed the Very High FHSZ withing the LRA map that encompassed 38 counties and nearly 200 cities. During this time, local governments were able to adopt the LRA maps as recommended or adjust the recommendation to be more or less restrictive.

In 2021, Senate Bill (SB) 63 expanded the scope of the FHSZ classification by mandating the identification of additional zones, including Moderate and High FHSZ, to the Very High FHSZ. In 2022, AB 211, as codified in Government Code section 51179, reinforced these mandates and required local agencies to formally designate, by ordinance, all three classifications within 120 days of receiving the recommendations from the OSFM. The bill also eliminated the local government’s ability to downgrade the hazard levels recommended by the OSFM.

Previously, the FHSZ maps were adopted as part of the Fire Code (City of Lake Elsinore Municipal Code Chapter ***). However, current legislation requires a separate ordinance to adopt the updated LRA maps. Government Code Section 51178 requires local agencies to engage in a transparent and participatory process to ensure that affected communities have access to updated wildfire hazard information.

Furthermore, local agencies are now required to:

1. Within 30 days of the release of the LRA map, make the information available for public review and comment. The updated LRA map for the City of Lake Elsinore was released on March 24, 2025 and can be viewed on the City’s website: https://www.lake- elsinore.org/DocumentCenter/View/4590/FHSZ_City_LRA_11x17_LakeElsinore?bidId= as well as the OSFM website: https://osfm.fire.ca.gov/what-we-do/community-wildfire- preparedness-and-mitigation/fire-hazard-severity-zone.

2. AB 211 requires a local agency to designate, by ordinance, Moderate and High FHSZ within 120 days of the release of the LRA map and adopt the recommended map.

3. Within 30 days of local ordinance adoption, the City of Lake Elsinore is required to submit a copy of the ordinance to the Board of Forestry and Fire Protection.

It is important to note that while the public review and comment period is required by the State, the City of Lake Elsinore has no authority to modify the designations established by the OSFM.

Fiscal Impact
There is no fiscal impact associated with the recommended action.

Local Responsibility Area Fire Map Ordinance

Page 3 of 3 ends

Attachments
Attachment 1- Ordinance
Exhibit A - LRA Fire Hazard Severity Zone Map
Attachment 2 - CFC Sec 4911 Model Ordinance for FHSZ adoption Fire
ORDINANCE NO. 2025-

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,

CALIFORNIA, ADOPTING THE FIRE HAZARD SEVERITY ZONES AS

RECOMMENDED BY THE CALIFORNIA DEPARTMENT OF FORESTRY AND FIRE PROTECTION PURSUANT TO GOVERNMENT CODE SECTION 51178 Whereas, the California Department of Forestry and Fire Protection (CAL FIRE), pursuant to Government Code Section 51178, has developed updated Fire Hazard Severity Zone (FHSZ) maps for areas within Local Responsibility Areas (LRAs); and Whereas, Government Code Sections 51175 through 51189 require local jurisdictions to adopt the FHSZ maps by ordinance, and to enforce the building standards for new structures in Very High Fire Hazard Severity Zones as established in the California Building Code and California Fire Code; and
Whereas, adoption of the FHSZ map will help the City reduce the risk of wildfire through updated planning and building standards and enable better protection of life, property, and natural resources; and
Whereas, the City of Lake Elsinore desires to adopt the FHSZ map as recommended by CAL FIRE to comply with state law and to ensure the health, safety, and welfare of the community.

THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY ORDAIN AS FOLLOWS:

Section 1: The foregoing recitals are true and correct and are hereby incorporated into these findings by this reference.

Section 2: The City Council hereby finds and determines that the Ordinance is exempt from the California Environmental Quality Act (Cal. Publ. Res. Code §§21000 et seq. “CEQA”) and the State CEQA Guidelines (14. Cal. Code Regs §§15000 et seq.), specifically pursuant to Sections 15060(c)(2), 15060(c)(3), and 15061(b)(3) of the State CEQA Guidelines because it will not result in a direct or reasonably foreseeable indirect physical change in the environment, because there is no possibility that it may have a significant effect on the environment, and because it is not a “project” as that term is defined in Section 15378 of the State CEQA Guidelines.

Section 3: Designation of Fire Hazard Severity Zones
The City of Lake Elsinore hereby adopts and designates the Fire Hazard Severity Zones within the City as recommended by the California Department of Forestry and Fire Protection and presented in the map titled:
“City of Lake Elsinore Fire Hazard Severity Zones Map,” as maintained and published by the California Department of Forestry and Fire Protection.

This map is incorporated herein as “Exhibit A” and shall serve as the official FHSZ designation within the City of Lake Elsinore's Local Responsibility Area.

Ord. No. 2025-

Page 2 of 2 ends

3 8
9 6
3 Section 4: Availability of the Map
The official Fire Hazard Severity Zones map is available for public review:
•In the Office of the City Clerk, City of Lake Elsinore, located at 130 South Main Street, Lake Elsinore, CA 92530; and
•Electronically on the City’s official website at: https://www.lake-elsinore.org/ Section 5: Severability. If any provision of this Ordinance or its application is held invalid by a court of competent jurisdiction, such invalidity shall not affect other provisions, sections, or applications of the Ordinance which can be given effect without the invalid provision or application, and to this end each phrase, section, sentence, or word is declared to be severable.

Section 6: Effective Date. This Ordinance shall become effective at 12:01 a.m. on the thirty-first (31st) day after the date of adoption.

Section 7: Certification. The City Clerk shall certify to the passage of this Ordinance and shall cause a synopsis of the same to be published according to law.

Passed, Approved, and Adopted at a regular meeting of the City Council of the City of Lake Elsinore, California, on this day of 2025.

Brian Tisdale
Mayor
Attest:

Candice Alvarez, MMC
City Clerk

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

CITY OF LAKE ELSINORE )
I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Ordinance No. 2025- was introduced by the City Council of the City of Lake Elsinore, California, at its Regular meeting of 2025, and adopted at its Regular meeting of 2025, and that the same was adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Candice Alvarez, MMC
City Clerk
City and County boundaries as of 10/22/24 (CA Board of Equalization) CAL FIRE State Responsibility Areas (SRA25_1)
CAL FIRE Fire Hazard Severity Zones (FHSZSRA23_3, FHSZLRA_25_1) Data Sources:

Daniel Berlant, State Fire Marshal, CA Department of Forestry and Fire Protection Joe Tyler, Director/Fire Chief, CA Department of Forestry and Fire Protection Wade Crowfoot, Secretary for Natural Resources, CA Natural Resources Agency Gavin Newsom, Governor, State of CaliforniaThe State of California and the Department of Forestry and Fire Protection make no representations or warranties regarding the accuracy of data or maps. Neither the State nor the Department shall be liable under any circumstances for any direct, special, incidental, or consequential damages with respect to any claim by any user or third party on account of, or arising from, the use of data or maps. and other relevant factors including areas where winds
have been identified by the Office of the State Fire Marshal as a major cause of wildfire spread.
statewide criteria and based on the severity of fire hazard that is expected to prevail in those areas. Moderate, high, and very high fire hazard severity zones shall be based on fuel loading, slope, fire weather, Government Code section 51178 requires the State Fire
Marshal to identify areas in the state as moderate, high, and very high fire hazard severity zones based on consistent Waterbody
Federal Responsibility
Area (FRA)Unzoned LRA
Incorporated City
Projection: NAD 83 California Teale Albers
Scale: 1:80,000 at 11" x 17"
0 1 2 3 4 5 6Km
0 1 2 3 4Mi
Very High High Moderate
Very High High Moderate
Fire Hazard Severity Zones (FHSZ) in Local Responsibility Area (LRA), as Identified by the State Fire Marshal
Lake Elsinore
15 74

UNINCORPORATED
ORANGE CO.

UNINCORPORATED
RIVERSIDE CO.

CANYON LAKE

MENIFEE
PERRIS

WILDOMAR
R I V E R S I D E C O .

March 24, 2025
As Identified by the
State Fire Marshal
Local Responsibility Area
Fire Hazard Severity Zones
CITY OF LAKE ELSINORE – RIVERSIDE COUNTY
Fire Hazard Severity Zones in State Responsibility
Area (SRA), Effective April 1, 2024

REQUIREMENTS FOR WILDLAND-URBAN INTERFACE AREAS
2022 CALIFORNIA FIRE CODE 49-7SUPPLEMENT—BLUE
EFFECTIVE JULY 1, 2024
SECTION 4911

MODEL ORDINANCE FOR FIRE HAZARD SEVERITY ZONE ADOPTION
ORDINANCE NO.

An ordinance of the City of Lake Elsinore to designate fire hazard severity zones.

The Council of the City of Lake Elsinore ordains as follows:

The City of Lake Elsinore hereby designates the Fire Hazard Severity Zones as recommended by the California Department of Forestry and Fire Protection pursuant to Government Code Section 51178.

Or
The City of Lake Elsinore hereby designates areas not identified as Very High Fire Hazard Severity Zones by the State Fire Marshal, as Very High Fire Hazard Severity Zones following a finding supported by substantial evidence in the record that the requirements of Government Code Section 51182 are necessary for effective fire protection within the area.
(and/or)
The City of Lake Elsinore hereby designates areas not identified as Moderate and High Fire Hazard Severity Zones by the State Fire Marshal, as Moderate and High Fire Hazard Severity Zones, respectively.

The map, approved by the city (or county or district), is hereby incorporated by reference, and entitled “City of Lake Elsinore Fire Hazard Severity Zones.” Dated March 24, 2025.

The official map is also located electronically on the following website:
https://34c031f8-c9fd-4018-8c5a-4159cdff6b0d-cdn-
endpoint.azureedge.net/-/media/osfm-website/what-we-do/community- wildfire-preparedness-and-mitigation/fire-hazard-severity-zones/fire- hazard-severity-zones-map/upload-4/lake_elsinore.pdf
On the motion of Member, seconded by Member: The roll call vote:

Ayes: Noes: Abstain: Absent:

The foregoing ordinance was passed and adopted this day of , 20 Ordinance
(Name)
(City of Lake Elsinore Board of )
Attest: Approved as to form:
(Name) (Name)
Clerk City or County or District Counsel

Lake Elsinore City CouncilAugust 26, 2025

Lake Elsinore City Council
August 26, 2025