Agenda packet, regular meeting, first session — Menifee City Council, January 18, 2023 (part 5 of 7)

General Plan Amendment No. PLN21-0404
January 18, 2023
4 6
0 8
9 Section 1: The amendment is consistent with the intent of the vision, goals and policies of the General Plan as a whole.

The general plan and zoning for the project site is Economic Development Corridor. The proposed modifications to: 1) amend the General Plan Land Use Map for 533.9 acres of land (28 parcels) from EDC-SG to EDC-CC land use designation in the southern portion of Menifee; 2) amend Exhibit LU-3 (Land Use Designations) of the general plan; 3) amend Exhibit LU-4 (Land Use Buildout Summary) of the general plan; 4) amend the Land Use Background Document and Definitions; and 5) amend the Economic Development Corridor subareas that will provide consistency with previous changes in the Economic Development Corridor subareas. As proposed, the project will remain consistent with the General Plan by being strategic with development in certain parts of the City.

Section 2:The amendment prescribes reasonable controls and standards for affected land uses to ensure compatibility and integrity of those uses with other established uses.

The proposed amendments as outline in Finding 1, prescribe reasonable controls and standards to ensure compatibility with other established uses in the area. The expansion of the Community Core District will eliminate certain uses that may create certain environmental impacts and will be compatible with the existing commercial uses established north of the project site. Additionally, the amendment to the Land Use Business Park designation will ensure that there is more compatibility between the uses allowed in the Business Park and adjacent zoning districts.

Section 3:The amendment provides for the protection of the health, safety, and/or general welfare of the community.

The amendments as outline in Finding 1, will not result in conditions detrimental to the public health, safety, or general welfare as currently proposed. The land use change and general plan text amendment does not involve physical construction; however, it does restrict certain land uses in order to maintain a commercial/office corridor aligned with the City’s vision for the EDC corridor. Additionally, the removal of warehousing/distribution as a permitted use in the Business Park designation will further protect residential land uses adjacent to Business Park. Future development under the proposed land uses will be required to meet City zoning and design standards which further ensure compatibility with other established uses.

Therefore, the modification would not create conditions materially detrimental to the public health, safety, and general welfare or injurious to or incompatible with other properties or land uses in the impacted vicinity.

Section 4: CEQA Compliance. The City is the lead agency under the California Environmental Quality Act (CEQA). The City certified the General Plan EIR (State Clearinghouse No. 2012071033) by Resolution No. 13-347 on December 18, 2013 and certified the Housing Element Update EIR by Resolution No. 21-1111 on December 15, 2021, in compliance with CEQA. Following review of the proposed project, the City as the Lead Agency, determined it is subject to CEQA Guidelines and regulations. The City has prepared an Addendum to the General Plan EIR and Housing Element Update EIR to Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 242
Menifee Mayor and City Council
January 18, 2023
Page
687 of 1063

Page 3 of 3 ends

General Plan Amendment No. PLN21-0404
January 18, 2023
4 6
0 8
9 analyze the potential impacts associated with the proposed project (GPA and COZ) and satisfy the requirements of CEQA Guidelines Section 15164, Addendum to an EIR or Negative Declaration.

Section 5: Approval of the GPA. The City Council finds that the facts present within the public record and within this Resolution provide the basis to approve GPA No. PLN21- 0404 amending the General Plan Land Use Map as shown in the attached Exhibit “A” provided in this resolution.

Section 6: The documents and materials that constitute the record of proceedings on which this Resolution has been based are located at the Community Development Department – Planning Division, 29844 Haun Road, Menifee, CA 92586. This information is provided in compliance with Public Resources Code section 21081.6.

PASSED, APPROVED AND ADOPTED this 18th day of January 2023. ___________________________
Bill Zimmerman, Mayor
Attest:
___________________________
A Kay Vinson, Acting City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 243
Menifee Mayor and City Council
January 18, 2023
Page
688 of 1063

CITY OF MENIFEE LAND USE DESIGNATIONS PAGE 1 OF 4
Land Use Designations

RESIDENTIAL
Category Details
Rural Mountainous (RM)
1 du per 10 acres
(10 acre min)
Rural Residential (RR5)
1 du per 5 acres
(5 acre min)
Rural Residential (RR2)
2 acre min
Rural Residential (RR1)
1 acre min
Rural Residential (RR 1/2)
½ acre min

2.1 - 5 du/ac Residential
(2.1-5R)

5.1 - 8 du/ac Residential
(5.1-8R)
Exhibit LU-3
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 244
Menifee Mayor and City Council
January 18, 2023
Page
689 of 1063

CITY OF MENIFEE LAND USE DESIGNATIONS PAGE 2 OF 4

8.1 – 14 du/ac Residential
(8.1-14R)

14.1- 20 du/ac Residential
(14.1-20R)

20.1-24 du/ac Residential
(201.-24R)

COMMERCIAL, OFFICE, AND INDUSTRIAL
Category Details
Commercial Retail (CR)

0.20 - 0.35 FAR

Commercial Office (CO)

0.25 - 1.0 FAR

Business Park (BP)
Maximum 0.60 FAR

Heavy Industrial (HI)
Maximum 0.50 FAR
OTHER
Category Details
Specific Plan (SP)
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 245
Menifee Mayor and City Council
January 18, 2023
Page
690 of 1063

CITY OF MENIFEE LAND USE DESIGNATIONS PAGE 3 OF 4
Economic Development
Corridor (EDC)
Max. 24 du/ac and 1.0 FAR

Agriculture (AG)
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 246
Menifee Mayor and City Council
January 18, 2023
Page
691 of 1063

CITY OF MENIFEE LAND USE DESIGNATIONS PAGE 4 OF 4

OPEN SPACE
Category Details
Conservation (OS-C)
N/A
Recreation (OS-R)
N/A
Water (OS-W)
N/A

INSTITUTIONAL
Category Details
Public/Quasi-Public Facilites
(PF)
≤ 0.50 FAR

Public Utility Corridor (PUC)

Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 247
Menifee Mayor and City Council
January 18, 2023
Page
692 of 1063

Exhibit LU-4
Land Use Buildout Summary

NOTES

1. Acres are given as adjusted gross acreages, which do not include the right-of-way for major roadways (Collector Roads and above), flood control facilities, or railroads.

2. Density/Intensity includes both residential density, expressed as dwelling units per acre, and non-residential intensity, expressed as floor area ratio (FAR), which is the amount of building square feet in relation to the size of the lot. Historically, citywide build-out levels do not achieve the maximum allowable density/intensity on every parcel and are, on average, lower than allowed by the General Plan. Accordingly, the build-out estimates in this General Plan do not assume build-out at the maximum density or intensity and instead are adjusted downward to account for variations in build-out intensity.

3. Estimates of population by residential designation are based on person-per-house- hold (PPH) factors identified by the 2020 Census and 2018 American Community Survey and vary by residential land use designation. City of Menifee’s average PPH is 3.09.

4. A 6.5% vacancy rate was assumed for population based on 2021 City of Menifee vacancy rate figures identified by the California Department of Finance.

5. Assumptions for the mix of land uses in the Economic Development Corridor (EDC) that will be analyzed in the Environmental Impact Analysis are listed in the table below.

6. The total number of units and square footage of retail and non-retail uses for Specific Plans were taken directly from the approved land use plans associated with each Specific Plan document. If the figures were unavailable, standard density and intensity assumptions were applied.

7. Of the 7,689 total acres located in Specific Plan areas, approximately 1,782 acres ( 23% of the Specific Plan acreage) are dedicated to open space uses. These acres are in addition to the open space acreages identified in the land use designations.

8. “Total Acres” does not represent a sum of the “Acres” column. Less than a 3% error in acres is assumed as Specific Plans (SP) may count total acres in both the SP and residential LU total due to the age of the Specific Plan and tracking of zone and GP changes.

9. The EDC allows a maximum residential density of 24 du/acre. Average density was calculated with an average density of 18 units/acre.

Economic Development Corridor Assumptions
Land Uses Average Density (du/ac) or
Intensity (FAR) Acres Assumed

RESIDENTIAL
EDC-NG 29
EDC-MB 47
EDC-NR 26
EDC-CC 124 177
EDC-SG 83 30
Residential Subtotal 309

NON-RESIDENTIAL
Commercial Retail 0.23 FAR 426 538
Commercial Office 0.35 FAR 266 467
Business Park 0.38 FAR 611 298
Industrial 0.40 FAR 534
Nonresidential Subtotal 1,837
TOTAL ACRES 2,146

Land Use Category

Acres 1
Assumed Density
(du/ac) 2,3
Intensity
(FAR) 2,3

Units

Population3,4
Square Feet
(Retail)
Square Feet
(Non-Retail)

Total Square Feet

RESIDENTIAL
Rural Mountainous (RM) 1,306 0.10 130 375
Rural Residential 5 ac min (RR5) 910 0.20 182 526
Rural Residential 2 ac min (RR2) 1,843 0.50 922 2,664 Rural Residential 1 ac min (RR1) 2,695 1.0 2,695 7,786 Rural Residential 1/2 ac min (RR1/2) 805 2.0 1,610 4,651

2.1-5 du/ac Residential (2.1-5R) 6,317 4.0 25,268 73,003

5.1-8 du/ac Residential (5.1-8R) 649 6.0 3,894 11,250

8.1-14 du/ac Residential (8.1-14R) 127 10.0 1,270 3,669

14.1-20 du/ac Residential (14.1-20R) 0 18.0 0 0

20.1-24 du/ac Residential (20.1-24R) 353 22.0 7,766 22,437 Subtotal 15,137 43,737 126,363

NON-RESIDENTIAL
Commercial Retail (CR) 224 0.23 2,238,441 2,238,441 Commercial Office (CO) 10 0.35 150,369 150,369
Heavy Industrial (HI) 28 0.40 494,803 494,803
Business Park (BP) 356 0.38 5,893,156 5,893,156
Subtotal 618 2,238,441 6,538,328 8,776,769

ECONOMIC DEVELOPMENT CORRIDOR
Economic Development Corridor (EDC) 9 2,146 5.1-18.0 5 0.23-0.38 5,562 16,069 3,774,167 5,390,114 25,020,987 21,357,032
28,795,154
26,747,147
Subtotal 2,146 5,562 16,069 3,774,167 5,390,114 25,020,987 21,357,032
28,795,154
26,747,147
SPECIFIC PLAN 6
Audie Murphy 1,113 2,191 6,330
Cal Neva 239 1,160 3,351 269,488 156,411 425,899
Cantalena 158 935 2,701
Canyon Cove 130 198 572
Canyon Heights 248 397 1,146
Cimarron Ridge 240 756 2,184
Countryside 96 155 447 721,079 721,079
Legado 326 1,061 3,065 71,176 160,300 231,476
Menifee Commercial Specific Plan 29 0 0 240,980 240,980 Menifee East 344 1,154 3,065 129,204 129,204
Menifee North 629 1,506 4,351 1,303,298 5,085,490 6,388,788 Menifee Valley Ranch 1,548 4,407 12,732 0 0
Menifee Village 1,977 5,374 15,526 919,897 919,897 Newport Estates 264 878 2,536 130,000 130,000
Newport Hub 47 273,918 338,209 612,127
Plaza del Sol 23 226,496 226,496
Rockport Ranch 80 305 881
Town Center 169 1,052 3,039 493,194 65,340 558,534
Subtotal 7,689 7 21,529 62,200 4,778,731 5,805,749 10,584,480 OTHER
Agriculture (AG) 0
Conservation (OS-C) 55
Recreation (OS-R) 725
Water (OS-W) 69
Public/Quasi-Public Facilities (PF) 484
Public Utilities Corridor (PUC) 132
Railroad (Rail) 25
Right-of-Way (ROW) 3,720
Subtotal 5,210
TOTAL 29,8138 70,828 204,632 10,791,339 37,365,064 48,156,403 Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation
Item Page Number: 248
Menifee Mayor and City Council
January 18, 2023
Page
693 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 1 OF 13 Land use Background
Document & Definitions

RELATIONSHIP TO OTHER PLANS AND PROGRAMS

MUNICIPAL CODE AND ZONING ORDINANCE

SPECIFIC PLANS
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 249
Menifee Mayor and City Council
January 18, 2023
Page
694 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 2 OF 13 • Audie Murphy Ranch
• Cal Neva
• Cantalena
• Canyon Cove
• Canyon Heights
• Cimarron Ridge
• Countryside
• Legado
• Menifee Commercial (Walmart)
• Menifee East
• Menifee North*
• Menifee Valley Ranch
• Menifee Village
• Newport Estates
• Newport Hub
• Plaza de Sol
• Rockport Ranch
• Town Center

DEVELOPMENT AGREEMENTS
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 250
Menifee Mayor and City Council
January 18, 2023
Page
695 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 3 OF 13

REGIONAL PLANNING EFFORTS
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 251
Menifee Mayor and City Council
January 18, 2023
Page
696 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 4 OF 13

ECONOMIC DEVELOPMENT CORRIDOR

IMPLEMENTATION OF EDCS

ECONOMIC DEVELOPMENT CORRIDOR SUBAREAS
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 252
Menifee Mayor and City Council
January 18, 2023
Page
697 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 5 OF 13

LAND USE PLAN BUILDOUT ASSUMPTIONS
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 253
Menifee Mayor and City Council
January 18, 2023
Page
698 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 6 OF 13

BACKGROUND AND BASELINE ASSUMPTIONS
RESIDENTIAL ASSUMPTIONS: POPULATION AND DWELLING UNITS
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 254
Menifee Mayor and City Council
January 18, 2023
Page
699 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 7 OF 13 Occupied Dwelling Units:

Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 255
Menifee Mayor and City Council
January 18, 2023
Page
700 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 8 OF 13

NONRESIDENTIAL ASSUMPTIONS
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 256
Menifee Mayor and City Council
January 18, 2023
Page
701 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 9 OF 13

Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 257
Menifee Mayor and City Council
January 18, 2023
Page
702 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 10 OF 13

ECONOMIC DEVELOPMENT CORRIDOR ASSUMPTIONS
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 258
Menifee Mayor and City Council
January 18, 2023
Page
703 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 11 OF 13 *The EDC allows a maximum Residential density of 24 du/acre.

SPECIFIC PLAN ASSUMPTIONS

EMPLOYMENT ASSUMPTIONS
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 259
Menifee Mayor and City Council
January 18, 2023
Page
704 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 12 OF 13

UTILITIES INFRASTRUCTURE

NATURAL GAS SERVICE

SOLID WASTE DISPOSAL SERVICE
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 260
Menifee Mayor and City Council
January 18, 2023
Page
705 of 1063

LAND USE BACKGROUND DOCUMENT & DEFINITIONS PAGE 13 OF 13

TELECOMMUNICATIONS AND INTERNET SERVICE
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 261
Menifee Mayor and City Council
January 18, 2023
Page
706 of 1063

Exhibit LU-b2a: Economic Development Corridor Subareas

·|þ}
74 NORTHERN GATEWAY

MCCALL BOULEVARD

NEWPORT ROAD

COMMUNITY CORE

§¦¨
215

Preferred Mix of Land Uses in EDC The intent of the Economic Development Corridor (EDC) designation is to identify areas where a mixture of residential, commercial, office, industrial, entertainment, educational, and/or recreational uses, or other uses is planned. Both horizontal and vertical mixed uses are permitted. In general, areas designated as EDC are envisioned to develop primarily as nonresidential uses with residential uses playing a supporting role.

In addition to identifying a citywide preferred land use mix for all property designated as EDC (see left), the General Plan will also identify a preferred mix of uses desired for each of the City’s five EDC subareas (see above). Each subarea has a unique identity and plays a specific role in the City of Menifee. The General Plan will use these subareas to focus policy direction in the Land Use and Community Design elements.

§¨¦
215
Residential Varies, depending
on EDC Designation
Commercial Retail 15% 25%
Commercial Office 10% 20%
Business Park 60% 40%

Southern Gateway
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 262
Menifee Mayor and City Council
January 18, 2023
Page
707 of 1063

Exhibit LU-b2e: EDC Community Core ( 356 889 acres)
Preferred Mix of Land Uses
These images illustrate the types of uses envisioned for this EDC area and do not represent specific architecture or amenities, which will be determined as part of final project approval.

Residential 20%
Commercial Retail 30%
Commercial Office 40%
Business Park 10%

Development in the community core is
anticipated to be a relatively balanced mix of
residential, commercial retail, commercial
office, and business park uses. Development
that supports and complements existing specific
plans and the City’s future Town Center is
especially encouraged. Special attention
should be paid to increased walkability and
connections to San Jacinto College and future
transit nodes. A range of single-family attached
and detached housing is appropriate, so long
as it supports an active city center and helps to
create a sense of place.

COMMUNITY CORE
§¦¨
215

Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 263
Menifee Mayor and City Council
January 18, 2023
Page
708 of 1063

Exhibit LU-b2f: EDC: Southern Gateway (832 299 acres)
Preferred Mix of Land Uses
These images illustrate the types of uses envisioned for this EDC area and do not represent specific architecture or amenities, which will be determined as part of final project approval.

Residential 10%
Commercial Retail 10%
Commercial Office 10%
Business Park 70%

Envisioned as business park (predominantly
light industrial and office uses) and limited
support commercial uses. The EDC area east
of the I-215 and north of Scott Road is
envisioned to be a mix of commercial uses
near the interchange and transitioning to office
and residential extending north toward Mount
San Jacinto College. On the west side of I-215,
north of Scott Road, the EDC area provides an
opportunity for commercial, office uses, and
limited residential, with a high level of freeway
accessibility as a transitional area to the Town
Center located to the north.

Avoid p lacement of residential units directly
adjacent to the freeway.

Southern Gateway
Southern Gateway
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 264
Menifee Mayor and City Council
January 18, 2023
Page
709 of 1063

Updated General Plan Map
Scott Rd.

Garbani Rd.

EDC-CC
EDC-CC
EDC-CC
EDC-CC
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 265
Menifee Mayor and City Council
January 18, 2023
Page
710 of 1063

ORDINANCE NO. 23-____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MENIFEE APPROVING CHANGE OF ZONE NO. PLN21-0405, WHICH
CHANGES: 1) THE ZONING CLASSIFICATION OF 28 PROPERTIES
CONSISTING OF 533.9 ACRES ON PROPERTY FROM ECONOMIC

DEVELOPMENT CORRIDOR SOUTHERN GATEWAY (EDC-SG) TO

ECONOMIC DEVELOPMENT CORRIDOR COMMUNITY CORE (EDC-
CC); 2) UPDATE THE DEFINITION OF THE BUSINESS PARK LAND USE DESIGNATION; AND 3) CHANGE THE PERMITTED USE TABLE

FOR BUSINESS PARK ZONING DISTRICT
WHEREAS, on December 10, 2021, the City of Menifee created an application for Change of Zone (COZ) No. PLN 21-0405 to: 1) change the zoning map on 533.9 acres to be consistent with the new General Plan Land Use; 2) update the definition of the Business Park (BP) land use designation; and 3) change the Permitted Use Table for the Business Park zoning district. The definition of the BP land use designation would be revised to remove warehouse/distribution uses as permitted uses within BP-designated land in Menifee; and,
WHEREAS, the application for the General Plan Amendment is being processed concurrently with application for a General Plan Amendment No. PLN 21-0404 located on properties south of Garbani Road, north of Scott Road, east of Sherman Road, and west of Palomar Road; and
WHEREAS, on November 9, 2022, the Planning Commission held a duly noticed public hearing on the modification, considered all public testimony as well as all materials in the staff report and accompanying documents for COZ No. PLN21-0405, which hearing was publicly noticed by a publication in the newspaper of general circulation, an agenda posting, and notice to property owners within 300 feet of the modification’s boundaries, and to persons requesting public notice; and WHEREAS, at the November 9, 2022, Planning Commission public hearing, based upon the materials in the staff report and accompanying documents, public comment, and Planning Commission discussion, the City of Menifee Planning Commission recommended that the City Council approve COZ No. PLN21-0405; and, WHEREAS, on January 18, 2023, the City Council held a duly noticed public hearing on the Project, considered all public testimony as well as all materials in the staff report and accompanying documents for the Project, including the consideration of the Addendum, which hearing was publicly noticed by The Press Enterprise, a newspaper of general circulation, an agenda posting, notices placed on the Project site, and notice to property owners within 300 feet of the Project boundaries, and to persons requesting public notice; and
NOW, THEREFORE, the City Council of the City of Menifee does ordain as follows:

Section 1: The proposed COZ is consistent with the intent of the goals and policies of the General Plan
The general plan and zoning for the project site is Economic Development Corridor. The proposed modifications to: 1) amend the General Plan Land Use Map for 533.9 acres of land (28 parcels) from EDC-SG to EDC-CC land use designation in the southern portion Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 266
Menifee Mayor and City Council
January 18, 2023
Page
711 of 1063

Page 2 of 3 ends

Change of Zone No. PLN21-0405
of Menifee; 2) amend Exhibit LU-3 (Land Use Designations) of the general plan; 3) amend Exhibit LU-4 (Land Use Buildout Summary) of the general plan; 4) amend the Land Use Background Document and Definitions; and 5) amend the Economic Development Corridor subareas that will provide consistency with previous changes in the Economic Development Corridor subareas. As proposed, the project will remain consistent with the General Plan by being strategic with development in certain parts of the City.

Section 2:The proposed COZ prescribes reasonable controls and standards to ensure compatibility with other established uses.

Section 3: The proposed COZ provides reasonable property development rights while protecting environmentally sensitive land uses and species.

Although the expansion to the Community Core District will restrict certain uses, the reasonable property development rights of landowners will not be significantly impacted.

The proposed changes seek to preserve the character of the corridor while creating a framework for thoughtful and compatible growth.

Section 4: The proposed COZ ensures protection of the general health, safety and welfare of the community.

Therefore, the modification would not create conditions materially detrimental to the public health, safety and general welfare or injurious to or incompatible with other properties or land uses in the impacted vicinity.

Section 5: CEQA Compliance. The City is the lead agency under the California Environmental Quality Act (CEQA). The City certified the General Plan EIR (State Clearinghouse No. 2012071033) by Resolution No. 13-347 on December 18, 2013, and certified the Housing Element Update EIR by Resolution No. 21-1111 on December 15, 2021, in compliance with CEQA. Following review of the proposed project, the City as the Lead Agency, determined it is subject to CEQA Guidelines and regulations. The City has prepared an Addendum to the General Plan EIR and Housing Element Update EIR to analyze the potential impacts associated with the proposed project (GPA and COZ) Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 267
Menifee Mayor and City Council
January 18, 2023
Page
712 of 1063

Page 3 of 3 ends

Change of Zone No. PLN21-0405
and satisfy the requirements of CEQA Guidelines Section 15164, Addendum to an EIR or Negative Declaration.

Section 6: Approval of the COZ. The City Council hereby approves COZ No. PLN21- 0405 to: 1) change 28 parcels from EDC-SG to EDC-CC; 2) update the definition of the Business Park (BP) land use designation; and 3) change the permitted use table for the Business Park zoning district as shown in Exhibit “A” of this resolution.

Section 7: Effective Date. The Ordinance shall take effect and be in full force and operation thirty (30) days after its second reading and adoption.

Section 8: Severability. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivision, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.

Section 9: Notice of Adoption. The City Clerk is authorized and directed to cause this Ordinance to be published within fifteen (15) days after its passage in a newspaper of general circulation and circulated within the City in accordance with Government Code Section 36933(a) or, cause this Ordinance to be published in the manner required by law using the alternative summary and posting procedure authorized under Government Code Section 36933(c).

This Ordinance was introduced and read on the 18 th day of JANUARY, 2023 and PASSED, APPROVED AND ADOPTED this ___ day of ___________, 2023. ___________________________
Bill Zimmerman, Mayor
Attest:
___________________________
A. Kay Vinson, Acting City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 268
Menifee Mayor and City Council
January 18, 2023
Page
713 of 1063

Exhibit B
Chapter 9.135 Commercial and Industrial Zones

9.135.020 Description and Intent of Zone
The following descriptions of each commercial and industrial zoning district identify the general characteristic uses, intensity of uses, and type of development intended for that district:

A.Commercial Retail (CR). Allows neighborhood, local, and regional serving retail and service uses. Hotels are also permitted in this designation. The permissible development density is between the minimum and maximum floor area ratio (FAR) of 0.20 – 0.35.

B.Commercial Office (CO). Allows a variety of office-related uses, including financial, legal, insurance and other office services; corporate offices; supporting hotel and ancillary retail uses are also permitted. The permissible development density is between the minimum and maximum floor area ratio (FAR) of 0.25 – 1.00.

C.Business Park (BP). Allows industrial and related uses including warehousing/distribution, assembly and light manufacturing, repair facilities, and business parks, including corporate offices. Employee-intensive uses, including research and development, technology centers, "clean" industry, and supporting hotel and ancillary retail uses are also permitted. The permissible development density is between the minimum and maximum floor area ratio (FAR) of 0.25 – 0.60.

D.Heavy Industry (HI). Allows more intense industrial activities, such as manufacturing uses, that can generate significant impacts such as excessive noise, dust, and other nuisances. The permissible development density is between the minimum and maximum floor area ratio (FAR) of 0.15 – 0.50.

9.135.030 Allowed Uses and Approval Requirements

A.Allowed Use Table. Table 9.135.030-1 identifies allowed uses and corresponding approval requirements for the commercial and industrial zones subject to compliance with all other provisions of this Title. Descriptions/definitions of many of the land uses can be found in Article 6 of this title (Definitions). The list of land uses on Table 9.135.030 shall be permitted in one or more of commercial and industrial zones as indicated in the columns corresponding to each zone.

B.Approval Requirements. Where indicated with a letter “P” the use shall be a permitted use. A letter “C” indicates the use shall be conditionally permitted subject to the approval of a conditional use permit. Where indicated with a “--,” the use is prohibited within the zone. The Additional Requirements column in the table identifies additional use regulations for specific uses and/or the specific chapter or section where additional regulations for that use type are located within this title, where applicable. Uses for which additional requirements are listed shall be allowed only upon satisfaction of the specified additional requirements. Under no circumstances shall Table

9.135.030-1 authorize a use without satisfaction of such specified additional requirements C.Unlisted Uses. Uses not specifically listed in this table shall be considered not permitted in all of the listed zones. The Community Development Director may make a determination pursuant to Chapter 9.95 (Similar Use Determination) that new uses not listed here that have substantially Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 269
Menifee Mayor and City Council
January 18, 2023
Page
714 of 1063

similar characteristics to specific listed permitted uses may be considered permitted as the similar use by right, or conditionally as appropriate.

Table 9.135.030-1 Commercial and Industrial Zones - Allowed Uses and Approval Requirements Allowed Use Additional
Requirements
Adult businesses -- -- -- -- See Ordinance XX
Airport -- -- -- C
Ambulance services C C P P
Amusement arcade P -- C --
Amusement park, (including multiple
activities such as simulated flying,
racing, mini-golf, etc.)
Indoor
Outdoor
P
C
P
C
Animals, Small (e.g. hamsters, rabbits,
chinchillas, and similar sized animals)
Non-Commercial
Commercial
P
--
P
--
P
--
P
--
Chapter 9.235 (Animal
Keeping)
Animal hospitals and veterinary services
(with outdoor facilities)
P
C
--
P
C
C
--
Animal Rescue -- -- C C Chapter 9.235 (Animal
Keeping)
Antique shops, pawn shops, thrift stores P -- C -- Outside collection bins prohibited
Art gallery, library, reading room,
museum. P P -- --
Art supply shops and studios. P P P --
Auction Houses P -- P --
Auditoriums, event centers and
assembly areas, including live
entertainment:

Indoor
Outdoor
P
C
C
--
P
C
--
--
Bakery goods distributors. P -- P P
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 270
Menifee Mayor and City Council
January 18, 2023
Page
715 of 1063

Table 9.135.030-1 Commercial and Industrial Zones - Allowed Uses and Approval Requirements Allowed Use Additional
Requirements
Bakery shops, Coffeehouse, Cybercafé,
Delicatessens, Ice cream shops P P P --
Banks and financial institutions. P P P --
Banquet facilities. C -- C --
Batting cages – indoor
Outdoor
P
C -- C
C --
Billiard and pool halls, Bowling alleys P -- P -- Chapter 9.250 (Alcohol Sales)
Breweries, distilleries, and wine making
facilities with on-site tasting room and
sales for off-site consumption
C -- P -- Chapter 9.250 (Alcohol
Sales)
Business services P P P --
Car washes P -- C
Caretaker residence or on-site operator
residence, only as accessory to primary
use

C C C C
Catering services P -- P --
Cemeteries and mausoleums -- -- C C
Clinics, including but not limited to
medical and urgent care C C C --
Collection Containers -- -- -- --
Commercial television and radio
broadcast structures -- -- -- P
Concrete batch plants and asphalt plants -- -- -- C
Congregate care facility -- C C --
Chapter 9.270
(Community Care
Facilities)
Contractor, landscape and building
materials storage yard -- -- C C
Convenience stores, not including the
sale of motor vehicle fuel P -- P --
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 271
Menifee Mayor and City Council
January 18, 2023
Page
716 of 1063

Table 9.135.030-1 Commercial and Industrial Zones - Allowed Uses and Approval Requirements Allowed Use Additional
Requirements
Dance Halls, night clubs, discos,
cabarets, cocktail lounges, lodges and
incidental dancing areas, and similar
facilities where dancing is the principal
use
C -- C -- Chapter 9.250 (Alcohol
Sales)
Day Care Center P C C --
Chapter 9.270
(Community Care
Facilities)
Department stores P -- P --
Drug Store P P -- --
Dry cleaning and laundromats (except
uniform supply and industrial
launderers);

P C C --
Educational Institution C C C C
Emergency shelters -- -- -- P In locations specified in the Housing Element
Equipment sales and rental, Large
(including large vehicles, trucks with
beds over 18 feet in length, eighteen
plus (18+) wheelers, and construction
equipment)
-- -- -- C
Equipment sales and rental, Small
(including rototillers, power mowers,
sanders, power saws, cement and
plaster mixers not exceeding 20 cubic
feet in capacity and other similar
equipment)

P -- C C
Fast food/quick service, with drive-
through C C C --
Fast food/quick service, without drive-
through P P P --
Feed and grain sales C -- -- P
Fertilizer production and processing
(organic or inorganic) -- -- -- C
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 272
Menifee Mayor and City Council
January 18, 2023
Page
717 of 1063

Table 9.135.030-1 Commercial and Industrial Zones - Allowed Uses and Approval Requirements Allowed Use Additional
Requirements
Funeral parlor, mortuary with
crematorium -- C C --
Funeral parlor, mortuary without
crematorium P C C --
Gas station with/without convenience
store, with or without alcoholic
beverage sales, and with or without car
wash

C -- C C
General retail P -- -- --
General warehousing, distribution
centers, and storage (except noxious,
explosives, or dangerous materials)
-- -- P P
Golf Course -- -- -- --
Golf driving range (not in association
with full scale course) C -- C --
Governmental facility P P P P
Grocery Store P -- -- -- Chapter 9.250 (Alcohol
Sales)
Hardware and Building Supplies
without outdoor sales/storage
with outdoor sales/storage
P
C
--
--
P
C
P
C
Health, fitness, dance, martial arts
studio
<5,000 sq.ft.
>5,000 sq.ft
P
C
C
C
P
C
--
Heliports -- -- C C
Hospital C C -- --
Hotels and resort hotels P C C --
Kennel or cattery -- -- C C Chapter 9.235 (Animal
Keeping)
---
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 273
Menifee Mayor and City Council
January 18, 2023
Page
718 of 1063

Table 9.135.030-1 Commercial and Industrial Zones - Allowed Uses and Approval Requirements Allowed Use Additional
Requirements
Laboratories, research and development P P P --
Live/work units C C C --
Lumber yard -- -- -- C
Manufacturing, Handcraft P P P P
Manufacturing, Light-Intensity -- C P P
Manufacturing, Medium-Intensity -- C C P
Manufacturing, Heavy-Intensity -- -- -- P
Marijuana dispensaries, mobile
marijuana dispensaries, marijuana
cultivation, and marijuana processing
-- -- -- --
Massage Establishment C C -- --
Material storage yard -- -- C P
Membership clubs, organizations, and
lounges C C C --
Mobile home sales and storage, trailer
sales and rental house trailers C -- C C
Motels C -- -- --
Motocross Facilities, Bicycle (BMX)
course -- -- -- --
Motor vehicle body, paint and
upholstery shops C -- C P
Chapter 9.240 (Motor
Vehicle and Related
Uses)
Motor vehicle parts and supply stores P -- C --
Motor vehicle repair/services (e.g. tune-
ups, emission tests, brakes, tires,
batteries, electrical)

P -- C P
Chapter 9.240 (Motor
Vehicle and Related
Uses)
Motor vehicle repairs/services - major
(e.g., engine and transmission
repair/rebuild, etc.)
-- -- C P
Chapter 9.240 (Motor
Vehicle and Related
Uses)
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 274
Menifee Mayor and City Council
January 18, 2023
Page
719 of 1063

Table 9.135.030-1 Commercial and Industrial Zones - Allowed Uses and Approval Requirements Allowed Use Additional
Requirements
Motor vehicle sales and rental (including
outdoor display area and repairs
associated with sales)

C -- C --
Chapter 9.240 (Motor
Vehicle and Related
Uses)
Motor vehicle wholesale, with no
outdoor display P P P P
Motor vehicle impound, wrecking and
junk yards -- -- -- C
Chapter 9.240 (Motor
Vehicle and Related
Uses)
Motor vehicle, trailer or boat storage -- -- C (indoor
only) C
Chapter 9.240 (Motor
Vehicle and Related
Uses)
Nurseries and garden supply, indoor and
outdoor (retail sales only) P -- -- P
Does not include
cultivation of
marijuana/cannabis.

Offices, professional and medical P P P --
Parking lots and parking structures P P P P
Personal and Professional Services P -- P --
Public utility substations and storage
buildings -- -- -- P
Radio and television broadcasting and
recording studios P -- P --
Recreational vehicle, trailer and mobile
home sales and rental. C -- C C
Chapter 9.240 (Motor
Vehicle and Related
Uses)
Recycling collection facilities C -- C C Chapter 9.280
(Recycling Facilities)
Recycling processing facilities -- -- C C Chapter 9.280 (Recycling Facilities)
Religious institutions P P P P
Restaurant P P P P Chapter 9.250 (Alcohol
sales)
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 275
Menifee Mayor and City Council
January 18, 2023
Page
720 of 1063

Table 9.135.030-1 Commercial and Industrial Zones - Allowed Uses and Approval Requirements Allowed Use Additional
Requirements
Residential care facility -- C -- --
Chapter 9.270
(Community Care
Facilities)
Restaurants with breweries, distilleries
and/or wine making facilities with sales
for on-site and off-site consumption
C C C C Chapter 9.250 (Alcohol
sales)
Self-Storage, public storage facilities C -- C P
Shooting range; Indoor -- -- C --
Shooting range; Outdoor -- -- -- --
Simulated shooting games, Indoor (laser
tag, etc.) C -- C --
Simulated shooting games, Outdoor
(paintball, etc.) -- -- -- --
Solid Waste Disposal -- -- -- C
Specialized Retail P -- P --
Sports and recreational facilities (not
including motor driven vehicles and
riding academies, but including archery
ranges, athletic playgrounds, athletic
fields, sports arenas, skating rinks, skate
parks stadiums, and commercial
swimming pools)
Indoor
Outdoor
P
C
--
--
C
C
--
--
Studios for professional work in or
teaching of any form of fine arts P C P --
Swap Meets (Indoor only) C -- -- C All activities must be conducted indoors.

Tattoo Establishments C C C -- Chapter 9.265 (Tattoo
Establishments)
Theater C -- C --
Tourist information centers P P P --
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 276
Menifee Mayor and City Council
January 18, 2023
Page
721 of 1063

Table 9.135.030-1 Commercial and Industrial Zones - Allowed Uses and Approval Requirements Allowed Use Additional
Requirements
Towing services (with tow truck parking
- no auto storage) -- -- P P
Towing services (with tow truck parking
and auto storage) -- -- -- C
Chapter 9.240 (Motor
Vehicle and Related
Uses)
Transportation Stations (bus, railroad
and taxi) P P P P
Trucking and freighting operations -- -- -- C
Uniform supplier and industrial
launderers -- -- C P
Utility offices, uses, and structures P P P P
Vehicle storage and impoundment
within an enclosed building -- -- P P
Vocational/trade school; C -- P C
Warehouse/club store, Standalone
facility 50,000 sq. ft. or larger C -- C --
Wholesale businesses with samples on
the premises but not including storage P -- P --
Wholesale stores and distributors -- -- C --
Wireless Communication Facilities C C C C
Chapter 9.290
(Wireless
Communications
Facilities)
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 277
Menifee Mayor and City Council
January 18, 2023
Page
722 of 1063

Table 9.140.030-1 Economic Development Corridors Zones Allowed Uses and Approval Requirements Allowed Use Additional
Requirements
Dry cleaning and laundromat (except uniform
supply and industrial launderers); -- C P P C
Educational Institution C C C C C
Emergency shelters 1 P P P P P
As mandated by
State law and
City Housing
Element. See
footnote1
below.

Equipment (new) sales, Large (including large
vehicles, trucks with beds over 18 feet in
length, eighteen plus (18+) wheelers, and
construction equipment)

P -- -- -- C
May not be
located within
1,000 feet of
the freeway
right-of-way.

Equipment (new) sales Small (including
rototillers, power mowers, sanders, power
saws, cement and plaster mixers not
exceeding 20 cubic feet in capacity and other
similar equipment)

P C C C C
May not be
located within
1,000 feet of
the freeway
right-of-way.

Fast food/quick service, with drive-through; C C C C C
Fast food/quick service, without drive-
through P P P P P
Feed and grain sales C -- -- P C
Fertilizer production and processing organic
or inorganic -- -- -- -- --
Gas station with or without a convenience
store, with or without alcoholic beverage
sales, and with or without car wash

C C C C C
Chapter 9.250
(Alcohol Sales).

In SG-May not
be located
south of Scott
Road.

General Retail P P P P P
Golf Course -- C C C --
Golf driving range (not in association with full
scale course) C C C C C
Governmental facility P P P P P
Grocery Store, Drug Store P P P P P Chapter 9.250
(Alcohol Sales)
Guns and ammunition store C -- --
C
C C
Hardware or Building Supplies Sales
without outdoor sales/storage
with outdoor sales/storage
P
C
P
C
P
C
P
C
P
C
Health, fitness, dance, martial arts studio
<5,000 sq.ft.
>5,000 sq.ft
P
C
P
C
P
C
P
C
P
C
Heliports C C C C C
Hospital C C C C C
Hotels and resort hotels P P P P P
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 278
Menifee Mayor and City Council
January 18, 2023
Page
723 of 1063

Table 9.140.030-1 Economic Development Corridors Zones Allowed Uses and Approval Requirements Allowed Use Additional
Requirements
Kennel or cattery C C C C C
Chapter 9.235
(Animal
Keeping)
Live/work units (2) C C C C C
Manufacturing, Handcraft P C C P C P
Manufacturing, Light-Intensity P C C P C P
Manufacturing, Medium-Intensity P -- -- -- P
Manufacturing, Heavy-Intensity C -- -- -- --
Marijuana dispensaries, mobile marijuana
dispensaries, marijuana cultivation, and
marijuana processing
-- -- -- -- --
Massage Establishment P C C C C
Meat packaging plants, poultry and egg
processing, processing and rendering of fats
and oils
-- -- -- -- --
Membership clubs, organizations, and
lounges C C C C C
Mobile home sales and storage, trailer sales
and rental house trailers C -- -- -- --
Motocross Facilities, Bicycle (BMX) course C -- -- -- -- Motor vehicle body, paint and upholstery
shops P C -- C C
Chapter 9.240
(Motor Vehicle
and Related
Uses)
Motor vehicle repair/services (e.g. tune-ups,
emission tests, brakes, tires, batteries,
electrical

P P C P P
Chapter 9.240
(Motor Vehicle
and Related
Uses)
Motor vehicle repairs - major (e.g., engine
and transmission repair/rebuild, etc.) C C -- C C
Chapter 9.240
(Motor Vehicle
and Related
Uses)
Motor vehicle sales and rental (including
outdoor display area and repairs associated
with sales):

Automobiles Sales
Automobile Rental
Boats and RVs Sales and Rental
C
C
C
C
C
C
C*
C
C
C
C
C
C
C
C
Chapter 9.240
(Motor Vehicle
and Related
Uses).
*P - Permitted
in the EDC-CC
Auto Overlay
Motor vehicle wholesale, with no outdoor
display C -- -- -- --
Motor vehicle wrecking and junk yards -- -- -- -- --
Chapter 9.240
(Motor Vehicle
and Related
Uses)
Motor vehicle, trailer or boat storage –
Indoor
Outdoor
--
--
--
--
--
--
--
--
--
--
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 279
Menifee Mayor and City Council
January 18, 2023
Page
724 of 1063

Updated Zoning Map
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 280
Menifee Mayor and City Council
January 18, 2023
Page
725 of 1063

NOTICE OF PUBLIC HEARING
TIME OF HEARING: 6:00 p.m. or as soon as possible thereafter.

DATE OF HEARING: January 18, 2023
PLACE OF HEARING:MENIFEE CITY COUNCIL CHAMBERS
28944 HAUN ROAD
MENIFEE, CA 92586
A PUBLIC HEARING has been scheduled, pursuant to the City of Menifee Municipal Code, before the CITY OF MENIFEE CITY COUNCIL to consider the project shown below:

Project Title: General Plan Amendment (GPA) PLN21-0404 and Change of Zone (COZ) PLN21- 0405
Project Location: The GPA and COZ are proposed for properties south of Garbani Road, north of Scott Road, east of Sherman Road, and west of Palomar Road.

City Council Action: The City Council will hold a public hearing to receive public testimony on the following:

1. General Plan Amendment No. 21-0404 is to expand the existing Economic Development Corridor - Community Core (EDC-CC) in the southern portion of Menifee from Garbani Road to Scott Road and update the definition of the Business Park (BP) land use designation.

2. Zone Change No. 21-0405 would do the following: 1) change the zoning to be consistent with the proposed GPA from Economic Development Corridor – Southern Gateway (EDC-SG) to EDC-CC for the subject parcels; 2) amend the Business Park land use definition (Section 9.135.020 – Description and Intent of Zone); and, 3) amend Table 9.135.030-1 of the development code by prohibiting general warehousing/distribution centers from the Business Park zone.

Environmental Information: An Addendum to the 2013 Menifee General Plan and the 2021-2029 Housing Element Update Environmental Impact Reports has been prepared for this proposed project. This Addendum determined that there are no new additional impacts beyond what was anticipated in the Menifee General Plan and the 2021-2029 Housing Element Update Environmental Impact Reports.

Any person wishing to comment on the proposed project may do so in writing between the date of this notice and the public hearing; or may appear and be heard at the time and place noted above.

All comments must be received prior to the time of public hearing. All such comments will be submitted to the City Council, and the City Council will consider such comments, in addition to any oral testimony, before making a decision on the proposed project.

If this project is challenged in court, the issues may be limited to those raised at the public hearing, described in this notice, or in written correspondence delivered to the City Council at, or prior to, the public hearing. Be advised that as a result of public hearings and comment, the City Council may amend, in whole or in part, the proposed project. Accordingly, the designations, development standards, design, improvements, or any properties or lands within the boundaries of the proposed project, may be changed in a way other than specifically proposed.

For further information regarding this project, please contact Orlando Hernandez, at (951) 723-3737 or e-mail [email protected], or go to the City of Menifee’s agenda web page at http://www.cityofmenifee.us. The case file for the proposed project may be viewed Monday through Friday, from 8:00 A.M. to 5:00 P.M. at the Community Development Department office, located at 29844 Haun Road, Menifee, CA 92586.

Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 281
Menifee Mayor and City Council
January 18, 2023
Page
726 of 1063

Please send all written correspondence to:

CITY OF MENIFEE COMMUNITY DEVELOPMENT DEPARTMENT
Attn: Orlando Hernandez, Planning Manager 28944 Haun Road Menifee, CA 92586
Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 282
Menifee Mayor and City Council
January 18, 2023
Page
727 of 1063

Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 283
Menifee Mayor and City Council
January 18, 2023
Page
728 of 1063

Item Title: 11.2
General Plan Amendment and Change of Zone to Expand the Economic Development Corridor – Community Core (EDC-CC) to Scott Road and Update the Business Park Land Use Designation Item Page Number: 284
Menifee Mayor and City Council
January 18, 2023
Page
729 of 1063

CITY OF MENIFEE
SUBJECT: Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds
MEETING DATE: January 18, 2023
TO: Mayor and City Council
PREPARED BY: Margarita Cornejo, Deputy Finance Director REVIEWED BY: Regina Funderburk, Chief Financial Officer APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------

RECOMMENDED ACTION

1. Adopt a Resolution authorizing the issuance of special tax bonds and bond documents in connection with Community Facilities District (CFD) No. 2020-1 (McCall Mesa) located in the northeastern portion of the City, on the southwest corner of Menifee Road and Rouse Road; and

2. Authorize the City Manager to appropriate funds for debt service and related expenditures and revenues within the McCall Mesa custodial fund.

DISCUSSION
Background
The City Council has previously completed the necessary proceedings to establish Community Facilities District No. 2020-1 of the City of Menifee (McCall Mesa) (“District”). As part of those proceedings, the City Council declared the necessity to issue bonds on behalf of the District pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (Act).

Pursuant to the Act, on May 20, 2020, the City Council adopted Resolution No. 20-891 ( “Resolution of Intention”), stating its intention to form the District and to authorize the levy of a special tax (“Special Tax”) on the taxable property within the District, and Resolution No. 20-892, stating its intention to incur bonded indebtedness in an aggregate principal amount not-to-exceed $18,000,000 for the purpose of financing the purchase, construction, expansion and/or rehabilitation of certain public facilities to serve the area within the District.

On August 5, 2020, the City Council adopted Resolution Nos. 20-941 and 20-942 (collectively the Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 1
Menifee Mayor and City Council
January 18, 2023
Page
730 of 1063

CFD 2020-1, McCall mesa, Issuance of Special Tax Bonds
January 18, 2023

Page 2 of 5 ends

1 3
5 1
“Resolution of Formation”). The Resolution of Formation establishing the District, authorized the levy of Special Tax within District, determined the necessity to incur bonded indebtedness in an amount not-to-exceed $18,000,000 within the District, and called an election within the District on the proposition of incurring bonded indebtedness, levying the Special Tax and setting an appropriations limit.

On August 5, 2020, an election was held within the District in which the property owners within approved the proposition authorizing the issuance of bonds in an amount not-to-exceed $18,000,000. A Notice of Special Tax Lien for the District was recorded in the office of the County Recorder on August 31, 2020.

On August 19, 2020, the City Council adopted Ordinance No. 2020-311 which authorizes the levy of the Special Tax pursuant to the Rate and Method of Apportionment approved at the August 5, 2020, election.

In January 2022, the District issued its $11,330,000 Special Tax Bonds, Series 2022A (“2022A Bonds”) to finance certain public facilities which the District was authorized to finance. The proposed Special Tax Bonds Series 2023A (“2023A Bonds”) will be issued on parity with the 2022A Bonds to finance the costs of additional public improvements in the District.

The District contains approximately 86-gross acres and approximately 59-net taxable acres and is located in the northeastern portion of the City, on the southwest corner of Menifee Road and Rouse Road. The developer of the property within the District is Lennar Homes of California, LLC, (“Lennar”). The Project within the District is being marketed by Lennar Homes as “Remington Place.”
The property within the District is planned for 258 residential units within two neighborhoods known as Trailhead and Westward. As of November 10, 2022, Lennar had completed and conveyed 236 homes to individual homeowners, and as of such date, Lennar owned five model homes and 17 homes in various stages of construction. All remaining homes owned by Lennar Homes were in escrow as of November 10, 2022. Between November 10, and December 13, 2022, an additional 17 homes were conveyed to individual homeowners, bringing the total of individually owned homes to 253. Lennar currently expects to complete and convey all homes planned within the District to individual homeowners by the end of February 2023.

Annual debt service on the proposed 2023A Bonds will be sized based on the expected Special Tax revenues to be received from 258 homes classified as Developed Property for Fiscal Year (FY) 2023/2024. The development and ownership status of the planned homes within the District as of November 10, 2022, is shown in the table below.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 2
Menifee Mayor and City Council
January 18, 2023
Page
731 of 1063

CFD 2020-1, McCall mesa, Issuance of Special Tax Bonds
January 18, 2023

Page 3 of 5 ends

1 3
5 1
Ownership and Development Summary (November 10, 2022)*
Parcels In Escrow
Individually Owned
Completed 236 --
Developer Owned
Completed -- --
Model 5 5
Under Construction 17 17
Developer-Owned Subtotal 22 22
TOTAL 258 22
*Between November 10 and December 13, 2022, an additional 17 homes closed to individual homeowners, bringing the total of individually owned homes to 253.

The resolution before the City Council authorizes the issuance of the 2023A Bonds and the execution and delivery of certain documents in connection therewith as further described in the following paragraphs.

The proposed 2023A Bonds are estimated to have a par amount of approximately $3.43 million with a final maturity of September 1, 2053 (30-year financing term). Proceeds from the 2023A Bonds will primarily finance public improvements benefitting the development within the District.

The proposed 2023A Bonds will be issued on parity with the 2022A Bonds, which have a final maturity of September 1, 2051. As approved by the Finance Committee, the 2023A Bonds are being issued with a 30-year term in order to maximize bond proceeds for District improvements.

Following the issuance of the 2023A Bonds, the District may only issue additional parity bonds for refinancing existing bonds. The final par amount and interest rate structure will be determined when the 2023A Bonds are priced and sold, which is expected to be in late January 2023. The bond closing is expected to occur approximately two weeks after the pricing of the 2023A Bonds.

The table below highlights financing statistics based on current market conditions.

Table 2
Summary of Financing Statistics*
2023A Bonds
Par Amount $3,430,000
True Interest Cost 5.38%
Estimated Cost to Homeowners
FY 2023-24 Assessment** $2,552 to $3,870
*Preliminary; Subject to Change; Based on Current Market Conditions **Annual Assigned Special Tax will increase at approximately 2% per year.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 3
Menifee Mayor and City Council
January 18, 2023
Page
732 of 1063

CFD 2020-1, McCall mesa, Issuance of Special Tax Bonds
January 18, 2023

Page 4 of 5 ends

1 3
5 1
As required under Section 5852.1 of the California Government Code, the good faith estimates as provided by the Municipal Advisor and Underwriter are provided as an attachment to this staff report and summarized as follows:

1. As illustrated above, the true interest cost of the 2023A Bonds is estimated at 5.38%, calculated as provided in Section 5852.1(a)(1)(A) of the Code.

2. The finance charge of the 2023A Bonds, including underwriter’s discount and all other fees and charges paid to third parties, is estimated at $258,600.

3. Proceeds of the 2023A Bonds received by the District for the sale of the 2023A Bonds, less the finance charges set forth in (2) above and the reserve fund funded with proceeds of the 2023A Bonds, is equal to $ 2,892,200 which will be available to finance the project.

4. The total payment amount calculated as provided in Section 5852.1(a)(1)(D) of the Code is estimated at $7,726,488.

Documents to be Approved
Approval of the Resolution, authorizing and directing execution of certain bond documents, authorizing and directing the sale of the proposed 2023A Bonds and authorizing and directing certain actions with respect thereto will authorize the execution of the following documents attached to this staff report:
✓Preliminary Official Statement
✓First Supplement to Bond Indenture
✓Continuing Disclosure Certificate
✓Bond Purchase Agreement
Bond Counsel and the City Attorney have reviewed the attached legal and financing documents on behalf of the City and the District. If this resolution is approved, City staff will continue to work with the financing team to finalize all the aforementioned documents. As previously mentioned, the pricing date would be targeted for late January 2023, with bond closing anticipated in February 2023.

STRATEGIC PLAN OBJECTIVE
Responsive and Transparent Community Government

FISCAL IMPACT
The 2023A Bonds are paid from special taxes levied in the District. There is no fiscal impact to the City’s g eneral f und. The City will, however, be required to provide administration for the District, which will be funded as part of the annual special tax levy.

By action of this staff report the City Manager will be authorized to appropriate funds for debt service and related expenditures and revenues within the McCall Mesa custodial fund.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 4
Menifee Mayor and City Council
January 18, 2023
Page
733 of 1063

CFD 2020-1, McCall mesa, Issuance of Special Tax Bonds
January 18, 2023

Page 5 of 5 ends

1 3
5 1
The property owners are expected to pay special taxes of approximately $2,552 to $3,870 per parcel in FY 2023/2024, depending on the size of the home. Such Special Taxes will increase at 2.0% per year.

ATTACHMENTS

1. Project Map

2. Good Faith Estimates

3. Resolution

4. Preliminary Official Statement

5. First Supplement to the Bond Indenture

6. Continuing Disclosure Certificate

7. Bond Purchase Agreement

8. Appraisal Report
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 5
Menifee Mayor and City Council
January 18, 2023
Page
734 of 1063

MCCALL BLVD

JUNIPERO RD

MENIFEE RD

MATTHEWS RD
PALOM
AR RD

ROUSE RD
0 750 1,500375
Feet
CFD Boundary

LOCATION MAP
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)

CITY OF MENIFEE
¹
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 6
Menifee Mayor and City Council
January 18, 2023
Page
735 of 1063

EXHIBIT A

GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by Urban Futures, Inc. as municipal advisor to the City (the “Municipal Advisor”), each with respect to the Bonds.

Principal Amount. The Municipal Advisor has informed the City that, based on the City’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $3,430,000 (the “Estimated Principal Amount”).

True Interest Cost of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 5.38%.

Finance Charge of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $258,600.

Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserve fund funded with proceeds of the Bonds, is $2,892,200.

Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $7,726,468.

The foregoing estimates constitute good faith estimates only. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the Estimated Principal Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 7
Menifee Mayor and City Council
January 18, 2023
Page
736 of 1063

Amount, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City’s financing plan, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of Bonds sold will be determined by the City based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 8
Menifee Mayor and City Council
January 18, 2023
Page
737 of 1063

4869-4673-1071v4/200299-0014
RESOLUTION NO. 23-___

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

MENIFEE, ACTING AS THE LEGISLATIVE BODY OF
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL

MESA) OF THE CITY OF MENIFEE AUTHORIZING THE
ISSUANCE OF ITS SPECIAL TAX BONDS, SERIES 2023A IN A

PRINCIPAL AMOUNT NOT TO EXCEED FOUR MILLION
DOLLARS ($4,000,000), AND APPROVING CERTAIN

DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN

CONNECTION THEREWITH
WHEREAS, the City Council (the “City Council”) of the City of Menifee (the “City”), has heretofore undertaken proceedings to establish Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee (the “District”) and declared the necessity to issue bonds on behalf of the District pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (Act); and
WHEREAS, pursuant to Resolution Nos. 20-941 and 20-942 adopted by the legislative body of the District on August 5, 2020, certain bond propositions were submitted to the qualified electors within the District, and were approved by more than two-thirds of the votes cast at the election held on August 5, 2020; and
WHEREAS, the District has previously issued its $11,330,000 Special Tax Bonds, Series 2022A (the “2022 Bonds”) to finance certain public facilities which the District was authorized to finance (the “Facilities”); and
WHEREAS, the 2022 Bonds were issued pursuant to a Bond Indenture dated as of January 1, 2022 (the “2022 Indenture”), by and between the District and Wilmington Trust, National Association as trustee (the “Trustee”); and
WHEREAS, the legislative body of the District now desires to finance certain additional Facilities through the issuance of bonds in an aggregate principal amount not to exceed $4,000,000 designated as the “Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee Special Tax Bonds, Series 2023A” (the “2023 Bonds”); and WHEREAS, in order to effect the issuance of the 2023 Bonds, the District desires to enter into various agreements and approve certain documents in substantially the forms presented herein; and
WHEREAS, based on the appraisal of real property prepared by Kitty Siino & Associates, Inc. (the “Appraisal”) of property within the District, the value of the real property in the District subject to the special tax to pay debt service on the 2023 Bonds is more than three times the sum of the principal amount of the 2023 Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District (including the 2022 Bonds), all as calculated in the manner set forth in Section 53345.8(a) of the Act; and Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 9
Menifee Mayor and City Council
January 18, 2023
Page
738 of 1063

Resolution Authorizing Issuance of CFD 2020-1 Special Tax Bonds 4869-4673-1071v4/200299-0014
WHEREAS, the City Council has determined in accordance with Section 53360.4 of the Act that a negotiated sale of the 2023 Bonds to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) in accordance with the terms of the Bond Purchase Agreement for the 2023 Bonds to be entered into by the District and the Underwriter (the “Bond Purchase Agreement”) approved as to form by this City Council herein will result in a lower overall cost to the District than a public sale; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee, California, acting as the legislative body of Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee:

Section 1.Each of the above recitals is true and correct.

Section 2.The issuance of the 2023 Bonds is hereby authorized in an aggregate principal amount not to exceed $4,000,000, with the exact principal amount to be determined by the official signing the Bond Purchase Agreement in accordance with Section 5 below. The City Council hereby determines that it is prudent in the management of the District’s fiscal affairs to issue the 2023 Bonds. The 2023 Bonds shall mature on the dates and pay interest at the rates set forth in the Bond Purchase Agreement to be executed on behalf of the District in accordance with Section 5 hereof. All other provisions of the 2023 Bonds shall be governed by the terms and conditions of the 2022 Indenture, as supplemented and amended by the First Supplement to Bond Indenture (the “First Supplement” and together with the 2022 Indenture, the “Indenture”), which First Supplement is hereby approved in substantially the form on file with the City Clerk, with such additions thereto and changes therein (including, but not limited to, changes in the amount to be maintained in the Reserve Account (as defined in the Indenture)) as the officer or officers executing the same deem necessary to enhance the security for the 2023 Bonds, to cure any ambiguity or defect therein, to insert the offering price(s), interest rate(s), selling compensation, principal amount per maturity, redemption dates and prices and such other related terms and provisions as limited by Section 5 hereof or to conform any provisions therein to the Bond Purchase Agreement or the Official Statement delivered to the Underwriter of the 2023 Bonds. Approval of such changes shall be conclusively evidenced by the execution and delivery of the Indenture by one of the following: the Mayor, the City Manager, the Assistant City Manager, the Chief Financial Officer or their written designees (each, an “Authorized Officer” and collectively, the “Authorized Officers”), each of whom is authorized to execute the Indenture. Capitalized terms used in this Resolution which are not defined herein have the meanings ascribed to them in the Indenture.

Section 3.The 2023 Bonds shall be executed on behalf of the District by the manual or facsimile signature of the Mayor of the City or his or her written designee and be attested by the manual or facsimile signature of the City Clerk. Wilmington Trust, National Association is hereby appointed to act as trustee, registrar and transfer agent for the 2023 Bonds.

Section 4.The covenants set forth in the Indenture are hereby approved, shall be deemed to be covenants of the City Council and shall be complied with by the District and its officers. The Indenture shall constitute a contract between the District and the Owners of the 2023 Bonds.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 10
Menifee Mayor and City Council
January 18, 2023
Page
739 of 1063

Resolution Authorizing Issuance of CFD 2020-1 Special Tax Bonds 4869-4673-1071v4/200299-0014
Section 5.The form of the Bond Purchase Agreement presented at this meeting is hereby approved and each of the Authorized Officers is hereby authorized to execute the Bond Purchase Agreement, with such additions thereto and changes therein relating to dates and numbers as are necessary to conform the Bond Purchase Agreement to the dates, amounts and interest rates applicable to the 2023 Bonds as of the sale date. Approval of such additions and changes shall be conclusively evidenced by the execution and delivery of the Bond Purchase Agreement by one or more of such Authorized Officers; provided, however, that the Bond Purchase Agreement shall be signed only if the Underwriter’s discount does not exceed 1.75% of the principal amount of the 2023 Bonds and only if the true interest cost on the 2023 Bonds does not exceed 6.00%. Each of the Authorized Officers is authorized to determine the day on which the 2023 Bonds are to be priced in order to attempt to produce the lowest borrowing cost for the District and may reject any terms presented by the Underwriter if determined not to be in the best interest of the District.

Section 6.The form of the Continuing Disclosure Certificate presented at this meeting is hereby approved and each of the Authorized Officers is hereby authorized and directed to execute the Continuing Disclosure Certificate in the form hereby approved, with such additions therein and changes thereto as the officer or officers executing the same deem necessary to cure any defect or ambiguity therein, with such approval to be conclusively evidenced by the execution and delivery of such certificate.

Section 7.The form of the Preliminary Official Statement presented at this meeting is hereby approved and the Underwriter is hereby authorized to distribute the Preliminary Official Statement to prospective purchasers of the 2023 Bonds in the form hereby approved, together with such additions thereto and changes therein as are determined necessary by the Authorized Officers to make such Preliminary Official Statement final as of its date for purposes of Rule 15c2-12 of the Securities and Exchange Commission. Each of the Authorized Officers is hereby authorized to execute a final Official Statement in the form of the Preliminary Official Statement, together with such changes as are determined necessary by the Authorized Officers, to make such Official Statement complete and accurate as of its date. The Underwriter is further authorized to distribute the final Official Statement for the 2023 Bonds and any supplement thereto to the purchasers of the 2023 Bonds upon the execution of the final Official Statement as described above.

Section 8.In accordance with the requirements of Section 53345.8 of the Act, based on the Appraisal, the legislative body of the District hereby determines that the value of the real property in the District subject to the special tax to pay debt service on the 2023 Bonds is more than three times the principal amount of the 2023 Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District (including the 2022 Bonds), all as calculated in the manner provided in Section 53345.8(a) of the Act.

Section 9.Each Authorized Officer is authorized to provide for all services necessary to effect the issuance of the 2023 Bonds. Such services shall include, but not be limited to, printing the 2023 Bonds, obtaining legal services, trustee and paying Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 11
Menifee Mayor and City Council
January 18, 2023
Page
740 of 1063

Resolution Authorizing Issuance of CFD 2020-1 Special Tax Bonds 4869-4673-1071v4/200299-0014
agent services, and any other services deemed appropriate as set forth in a certificate of such Authorized Officer. Each Authorized Officer is authorized to pay for the cost of such services, together with other costs of issuance, from 2023 Bond proceeds deposited pursuant to the First Supplement.

Section 10.The Authorized Officers, the City Clerk and the other officers and staff of the City and the District responsible for the fiscal affairs of the District are hereby authorized and directed to take any actions and execute and deliver any and all documents as are necessary to accomplish the issuance, sale and delivery of the 2023 Bonds in accordance with the provisions of this Resolution and the fulfillment of the purposes of the 2023 Bonds as described in the Indenture, including, in the discretion of any of the Authorized Officers, providing certificates to the Underwriter as to the accuracy of any information relating to the District which is included within the Official Statement. Any document authorized herein to be signed by the City Clerk may be signed by a duly appointed deputy clerk.

Section 11.The City Council acknowledges that the good faith estimates required by Section 5852.1 of the California Government Code are disclosed in the staff report and are available to the public at the meeting at which this Resolution is approved.

Section 12.This Resolution shall be effective upon its adoption.

PASSED, APPROVED AND ADOPTED this 18th day of January, 2023. ___________________________
Bill Zimmerman, Mayor
Attest:
___________________________
Kay Vinson, Acting City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 12
Menifee Mayor and City Council
January 18, 2023
Page
741 of 1063

Stradling Yocca Carlson & Rauth
Draft of 12/19/22
4878-9308-7290v8/200299-0014
PRELIMINARY OFFICIAL STATEMENT DATED JANUARY __, 2023
NEW ISSUE—BOOK-ENTRY ONLY NO RATING
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the 2023 Bonds described herein is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the 2023 Bonds is exempt from State of California personal income tax. See the caption “TAX MATTERS” with respect to tax consequences relating to the 2023 Bonds, including with respect to the alternative minimum tax imposed on certain large corporations for tax years beginning after December 31, 2022. $3,430,000*
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2023A
Dated: Delivery Date Due: September 1, as shown on inside cover page The Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee Special Tax Bonds, Series 2023A (the “2023 Bonds”) are being issued by Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee (the “District”) to: (i) finance certain public improvements needed with respect to the development of property located within the District, including public improvements to be owned by the City of Menifee (the “City”), and school facilities to be owned and operated by Romoland School District; (ii) fund a deposit to the reserve fund securing the 2023 Bonds and the 2022 Bonds (defined below); and (iii) pay costs of issuance for the 2023 Bonds. The 2023 Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Act”), and pursuant to that certain Bond Indenture, dated as of January 1, 2022, as supplemented by that certain First Supplement to Bond Indenture, dated as of February 1, 2023, (together, the “Indenture”) each by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”).

The 2023 Bonds are payable from Net Taxes (as defined herein) derived from a certain annual Special Tax (as defined herein) to be levied on taxable parcels within the District and from certain other funds pledged under the Indenture, all as further described herein. The 2023 Bonds are secured under the Indenture by a pledge of and lien upon Net Taxes on a parity with the District’s Special Tax Bonds, Series 2022A, which are currently outstanding in the aggregate principal amount of $11,275,000 (the “2022 Bonds”). The Special Tax is to be levied according to the rate and method of apportionment approved by the City Council of the City and the qualified electors within the District. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes” and Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” The 2023 Bonds will be issued in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Individual purchases of the 2023 Bonds may be made in principal amounts of $5,000 and integral multiples thereof and will be in book-entry form only. Purchasers of the 2023 Bonds will not receive certificates representing their beneficial ownership of the 2023 Bonds but will receive credit balances on the books of their respective nominees. The 2023 Bonds will not be transferable or exchangeable except for transfer to another nominee of DTC or as otherwise described herein. Interest on the 2023 Bonds will be payable on each March 1 and September 1, commencing September 1, 2023. Principal of and interest on the 2023 Bonds will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants, who will remit such payments to the Beneficial Owners of the 2023 Bonds.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY OF RIVERSIDE, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE 2023 BONDS. EXCEPT FOR THE NET TAXES, NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE 2023 BONDS. THE 2023 BONDS ARE NOT GENERAL OR

SPECIAL OBLIGATIONS OF THE CITY OR GENERAL OBLIGATIONS OF THE DISTRICT BUT ARE LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM NET TAXES AND OTHER AMOUNTS HELD UNDER THE INDENTURE AS MORE FULLY DESCRIBED HEREIN.

The 2023 Bonds are subject to optional redemption, special mandatory redemption and mandatory sinking fund redemption prior to maturity as set forth herein. See the caption “THE BONDS — Redemption.” Investment in the 2023 Bonds involves risks that are not appropriate for certain investors. Certain events could affect the ability of the District to pay the principal of and interest on the 2023 Bonds when due. See the caption “SPECIAL RISK FACTORS” for a discussion of certain risk factors that should be considered, in addition to the other matters set forth herein, in evaluating the investment quality of the 2023 Bonds.

THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR GENERAL REFERENCE ONLY. IT IS NOT INTENDED TO BE A SUMMARY OF THE SECURITY OR TERMS OF THIS ISSUE. INVESTORS ARE ADVISED TO READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.

MATURITY SCHEDULE
(See Inside Cover Page)
The 2023 Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the City and the District by Rutan & Tucker, LLP, Irvine, California, City Attorney, and for the District by Stradling Yocca Carlson & Rauth, a * Preliminary, subject to change.

This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 13
Menifee Mayor and City Council
January 18, 2023
Page
742 of 1063

4878-9308-7290v8/200299-0014
Professional Corporation, Disclosure Counsel, for the Underwriter by Kutak Rock LLP, Irvine, California, and for the Trustee by its counsel. It is anticipated that the Bonds in book-entry form will be available for delivery on or about February __, 2023. [STIFEL LOGO]
Dated: January __, 2023
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 14
Menifee Mayor and City Council
January 18, 2023
Page
743 of 1063

4878-9308-7290v8/200299-0014
$3,430,000*
COMMUNITY FACILITIES DISTRICT NO. 2020-1 OF THE

CITY OF MENIFEE (MCCALL MESA)
SPECIAL TAX BONDS, SERIES 2023A

MATURITY SCHEDULE
BASE CUSIP®† 58680W
$__________ Serial Bonds
Maturity Date
(September 1)
Principal
Amount Interest Rate Yield Price CUSIP No.†
$ % %
$__________ ______% Term Bonds due September 1, 20__ Yield_____% Price: ______ CUSIP No.† ___ * Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S&P Global Market Intelligence. Copyright(c) 2023 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the District, the City, the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 15
Menifee Mayor and City Council
January 18, 2023
Page
744 of 1063

4878-9308-7290v8/200299-0014

CITY OF MENIFEE

COUNTY OF RIVERSIDE, CALIFORNIA

CITY COUNCIL
Bill Zimmerman, Mayor
Bob Karwin, District 1
Ricky Estrada, District 2
Lesa Sobek, District 3
Dean Deines, District 4

CITY ADMINISTRATORS
Armando G. Villa, City Manager
Rochelle Clayton, Assistant City Manager

CITY ATTORNEY
Rutan & Tucker, LLP
Irvine, California

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

MUNICIPAL ADVISOR
Urban Futures, Inc.

Orange, California

SPECIAL TAX CONSULTANT
Spicer Consulting Group, LLC
Temecula, California

APPRAISER
Kitty Siino & Associates, Inc.

Tustin, California

TRUSTEE
Wilmington Trust, National Association
Costa Mesa, California
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 16
Menifee Mayor and City Council
January 18, 2023
Page
745 of 1063

4878-9308-7290v8/200299-0014
Except where otherwise indicated, all information contained in this Official Statement has been provided by the City and the District. No dealer, broker, salesperson or other person has been authorized by the City, the District, the Trustee or the Underwriter to give any information or to make any representations in connection with the offer or sale of the 2023 Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authorized by the City, the District, the Trustee or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the 2023 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers or Owners of the 2023 Bonds.

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

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

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

The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City, the District or any other parties described herein since the date hereof. All summaries of the Indenture or other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the City for further information in connection therewith.

IN CONNECTION WITH THE OFFERING OF THE 2023 BONDS, THE UNDERWRITER MAY

OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH 2023 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE 2023 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE 2023 BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as a “plan,” “expect,” “estimate,” “project,” “budget,” or similar words. Such forward-looking statements include, but are not limited to certain statements contained in the information under the captions “THE DISTRICT” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH

FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND

OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS

DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE

DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT. IN EVALUATING SUCH STATEMENTS,

POTENTIAL INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS WHICH COULD

CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

The City maintains a website. However, the information presented on such website is not part of this Official Statement and should not be relied upon in making an investment decision with respect to the 2023 Bonds.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 17
Menifee Mayor and City Council
January 18, 2023
Page
746 of 1063

i
4878-9308-7290v8/200299-0014

TABLE OF CONTENTS
Page
INTRODUCTION .................................................................................................................................................1 The District ........................................................................................................................................................1 Sources of Payment for the Bonds.....................................................................................................................3 Appraisal Report ................................................................................................................................................3 Description of the 2023 Bonds ..........................................................................................................................4 Tax Exemption...................................................................................................................................................4 Professionals Involved in the Offering ..............................................................................................................4 Continuing Disclosure .......................................................................................................................................5 Parity Bonds.......................................................................................................................................................5 Bond Owners’ Risks ..........................................................................................................................................5 Other Information ..............................................................................................................................................5 FINANCING PLAN ..............................................................................................................................................6 Estimated Sources and Uses of Funds ...............................................................................................................6 THE 2023 BONDS ................................................................................................................................................6 General Provisions.............................................................................................................................................6 Debt Service Schedule .......................................................................................................................................7 Redemption........................................................................................................................................................8 Registration, Transfer and Exchange...............................................................................................................11 SOURCES OF PAYMENT FOR THE BONDS .................................................................................................12 Limited Obligations .........................................................................................................................................12 Special Taxes ...................................................................................................................................................12 Reserve Account of the Special Tax Fund.......................................................................................................18 No Teeter Plan .................................................................................................................................................18 Parity Bonds for Refunding Purposes Only.....................................................................................................19 THE DISTRICT...................................................................................................................................................19 General Description of the District..................................................................................................................19 Authorized Uses of Bond Proceeds .................................................................................................................20 Appraisal Report ..............................................................................................................................................20 Estimated Appraised Value-to-Lien Ratios .....................................................................................................20 Direct and Overlapping Debt...........................................................................................................................24 Delinquency History ........................................................................................................................................27 PROPERTY OWNERSHIP AND THE DEVELOPMENT................................................................................27 General.............................................................................................................................................................27 Planned Development Within the District .......................................................................................................27 Lennar Homes..................................................................................................................................................28 SPECIAL RISK FACTORS ................................................................................................................................29 Risks of Real Estate Secured Investments Generally ......................................................................................29 Insufficiency of Special Tax Revenues............................................................................................................30 Property Values................................................................................................................................................31 Natural Disasters..............................................................................................................................................32 Hazardous Substances......................................................................................................................................32 Enforcement Delays – Bankruptcy ..................................................................................................................33 Special Tax Delinquencies...............................................................................................................................33 FDIC/Federal Government Interests in Parcels ...............................................................................................33 Direct and Overlapping Indebtedness..............................................................................................................34 Payment of Special Taxes is not a Personal Obligation of the Property Owners............................................35 No Acceleration Provision...............................................................................................................................35 Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 18
Menifee Mayor and City Council
January 18, 2023
Page
747 of 1063

ii
4878-9308-7290v8/200299-0014
Limited Obligations .........................................................................................................................................35 Ballot Initiatives...............................................................................................................................................36 Proposition 218 ................................................................................................................................................36 Litigation with Respect to Community Facilities Districts .............................................................................36 Loss of Tax Exemption....................................................................................................................................38 No Ratings – Limited Secondary Market ........................................................................................................38 Limitations on Remedies .................................................................................................................................38 Potential Early Redemption of 2023 Bonds from Prepayments or Community Facilities District Bond Proceeds ....................................................................................................................................................38 Cybersecurity ...................................................................................................................................................38 CONTINUING DISCLOSURE...........................................................................................................................39 TAX EXEMPTION .............................................................................................................................................39 LEGAL OPINION ...............................................................................................................................................41 ABSENCE OF LITIGATION .............................................................................................................................41 NO RATING........................................................................................................................................................41 UNDERWRITING ..............................................................................................................................................41 FINANCIAL INTERESTS..................................................................................................................................42 MUNICIPAL ADVISOR.....................................................................................................................................42 MISCELLANEOUS ............................................................................................................................................42 APPENDIX A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX..........................A-1 APPENDIX B CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION.............................B-1 APPENDIX C FORM OF OPINION OF BOND COUNSEL.................................................................C-1 APPENDIX D APPRAISAL REPORT ...................................................................................................D-1 APPENDIX E SUMMARY OF THE INDENTURE ..............................................................................E-1 APPENDIX F FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE .......................F-1 APPENDIX G BOOK-ENTRY ONLY SYSTEM ..................................................................................H-1 Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 19
Menifee Mayor and City Council
January 18, 2023
Page
748 of 1063

4878-9308-7290v8/200299-0014
[INSERT VICINITY MAP]
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 20
Menifee Mayor and City Council
January 18, 2023
Page
749 of 1063

4878-9308-7290v8/200299-0014
[INSERT AERIAL PHOTOGRAPH]
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 21
Menifee Mayor and City Council
January 18, 2023
Page
750 of 1063

1 4878-9308-7290v8/200299-0014
$3,430,000
COMMUNITY FACILITIES DISTRICT NO. 2020-1 OF THE

CITY OF MENIFEE (MCCALL MESA)
SPECIAL TAX BONDS, SERIES 2023A

INTRODUCTION
The purpose of this Official Statement, which includes the cover page, the table of contents and the attached appendices (collectively, the “Official Statement”), is to provide certain information concerning the issuance by Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee (the “District”) of its Special Tax Bonds, Series 2023A in the aggregate principal amount of $3,430,000* (the “2023 Bonds”). The proceeds of the 2023 Bonds will be used to: (i) finance certain public improvements needed with respect to the development of property located within the District, including public improvements to be owned by the City of Menifee (the “City”), and school facilities to be owned and operated by Romoland School District; (ii) fund a deposit to the reserve fund securing the 2023 Bonds and the 2022 Bonds (defined below); and (iii) pay costs of issuance for the 2023 Bonds.

The 2023 Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Act”), a resolution adopted on January __, 2023, by the City Council of the City, acting as the legislative body of the District, and a Bond Indenture, dated as of January 1, 2022, as supplemented by that certain First Supplement to Bond Indenture dated as of February 1, 2023 (together, the “Indenture”), each by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”). The 2023 Bonds are secured under the Indenture by a pledge of and lien upon Net Taxes (as such term is defined herein) and all moneys in the Special Tax Fund (other than the Administrative Expense Account therein) as described in the Indenture. The 2023 Bonds are secured under the Indenture by a pledge of and lien upon Net Taxes and all moneys in the Special Tax Fund (other than the Administrative Expense Account therein) on a parity with the District’s Special Tax Bonds, Series 2022A, which are currently outstanding in the aggregate principal amount of $11,275,000 (the “2022 Bonds”). The 2023 Bonds and the 2022 Bonds are referred to collectively herein as the “Bonds.” Under the terms of the Indenture, under certain conditions the District may issue additional bonds (“Parity Bonds”) secured by the Net Taxes on a parity with the Bonds for purposes of refunding all or a portion of the Bonds or any Parity Bonds issued in the future. See “SOURCES OF PAYMENT FOR THE BONDS — Additional Bonds for Refunding Purposes Only.”
This Introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described herein. A full review should be made of the entire Official Statement.

The sale and delivery of 2023 Bonds to potential investors is made only by means of the entire Official Statement.

All capitalized terms used in this Official Statement and not defined have the meanings set forth in Appendix E.

The District
General. The City is located in the western portion of the County of Riverside (the “County”), California (the “State”). The District contains approximately 86 gross acres and approximately 59 net taxable acres, and is located in the northeastern portion of the City, on the southwest corner of Menifee Road and Rouse Road. The developer of the property within the District is Lennar Homes of California, LLC, a California limited liability company (“Lennar Homes”). The project within the District is being marketed by Lennar Homes as “Remington Place.”
Preliminary, subject to change.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 22
Menifee Mayor and City Council
January 18, 2023
Page
751 of 1063

2 4878-9308-7290v8/200299-0014
The property within the District is planned for 258 residential units within two product lines – Westward (132 homes) and Trailhead (126 homes). Lennar Homes has obtained building permits for all 258 planned homes within the District. As of November 10, 2022, Lennar Homes had completed and conveyed 236 homes within the District to individual homeowners. As of such date Lennar Homes owned five model homes and seventeen homes under construction (16 of which were over 95 percent complete). All remaining homes owned by Lennar Homes were in escrow as of November 10, 2022. Lennar Homes currently expects to complete and convey all homes planned within the District to individual homeowners by the end of February 2023.

The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District has been completed. Other than landscaping and final capping of certain streets associated with the remaining homes to be completed, all in-tract infrastructure in the District is complete.

Lennar Homes has completed a neighborhood park (the “Park”) of approximately 5 acres in the District, which includes pickle-ball and basketball courts, play equipment and shade structures. In addition, Lennar Homes has completed open space and trails in the District which are connected to the Park. Such open space improvements include drainage basins which serve as part of the storm drainage system for the development.

See the captions “THE DISTRICT” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT” for further information with respect to the District, Lennar Homes and development within the District.

Formation Proceedings. The District was formed on August 5, 2020 pursuant to the Act. The Act was enacted to provide an alternative method of financing certain public capital facilities and services, especially in developing areas of the State. Any local agency (as defined in the Act) may establish a community facilities district to provide for and finance the cost of eligible public facilities and services. Generally, the legislative body of the local agency which forms a community facilities district acts on behalf of such district as its legislative body. Subject to approval by two-thirds of the votes cast at an election and compliance with the other provisions of the Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness.

Pursuant to the Act, on May 20, 2020 the City Council adopted Resolution No. 20-891 (the “Resolution of Intention”), stating its intention to form the District and to authorize the levy of a special tax on the taxable property within the District, and Resolution No. 20-892, stating its intention to incur bonded indebtedness in an aggregate principal amount not to exceed $18,000,000 for the purpose of financing the purchase, construction, expansion or rehabilitation of certain public facilities to serve the area within the District.

Subsequent to a noticed public hearing on August 5, 2020, the City Council adopted Resolution Nos. 20- 941 and 20-942 (collectively the “Resolution of Formation”). The Resolution of Formation: (i) established the District; (ii) authorized the levy of a special tax (the “Special Tax”) within the District; (iii) determined the necessity to incur bonded indebtedness in an amount not to exceed $18,000,000 within the District; and (iv) called an election within the District on the proposition of incurring bonded indebtedness, levying the Special Tax and setting an appropriations limit.

On August 5, 2020, an election was held within the District in which the property owner within the District approved the proposition authorizing the issuance of bonds in an amount not to exceed $18,000,000. A Notice of Special Tax Lien for the District was recorded in the office of the County Recorder on August 31, 2020, as Document No. 2020-0405011. On August 19, 2020, the City Council adopted Ordinance No. 2020- 311 (the “Ordinance”) which authorizes the levy of a special tax pursuant to the Rate and Method of Apportionment approved at the August 5, 2020 election (the “Rate and Method”), a copy of which is attached hereto as Appendix A.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 23
Menifee Mayor and City Council
January 18, 2023
Page
752 of 1063

3 4878-9308-7290v8/200299-0014
Sources of Payment for the Bonds
Special Taxes. As used in this Official Statement, the term “Special Tax” means the annual Special Tax which has been authorized pursuant to the Act and the Rate and Method to be levied upon taxable property within the District. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes” and Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” See the caption “THE DISTRICT.”
Under the Indenture, the District has pledged to repay the Bonds and any Parity Bonds from the Special Tax revenues remaining after the payment of certain annual Administrative Expenses of the District (the “Net Taxes”) and from other amounts in the Special Tax Fund (other than the Administrative Expense Account therein) established under the Indenture. The Special Taxes are the primary source of security for the repayment of the Bonds and any Parity Bonds. In the event that the Special Taxes are not paid when due, the only sources of funds available to pay the debt service on the Bonds and any Parity Bonds are amounts held by the Trustee in the Special Tax Fund, including amounts held in the Reserve Account therein, to the limited extent described in the Indenture. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Reserve Account of the Special Tax Fund.”
Foreclosure Proceeds. The District has covenanted in the Indenture for the benefit of the owners of the Bonds and Parity Bonds that it will: (i) commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in excess of $5,000 by the October 1 following the close of each Fiscal Year in which such Special Taxes were due; and (ii) commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the October 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied; and (iii) diligently pursue such foreclosure proceedings until the delinquent Special Taxes are paid; provided that, notwithstanding the foregoing, the District may elect to defer foreclosure proceedings on any parcel so long as the amount in the Reserve Account is at least equal to the Reserve Requirement. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.” There is no assurance that the property within the District can be sold for the appraised or assessed values described herein, or for a price sufficient to pay the principal of and interest on the Bonds in the event of a default in payment of Special Taxes by the current or future landowners within the District. See the caption “SPECIAL RISK FACTORS —Property Values.”

EXCEPT FOR THE NET TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE 2023 BONDS. THE 2023 BONDS ARE NOT GENERAL OR SPECIAL OBLIGATIONS OF

THE CITY OR GENERAL OBLIGATIONS OF THE DISTRICT, BUT ARE LIMITED OBLIGATIONS

OF THE DISTRICT PAYABLE SOLELY FROM NET TAXES AND AMOUNTS HELD UNDER THE INDENTURE, AS MORE FULLY DESCRIBED HEREIN.

Appraisal Report
Kitty Siino & Associates, Inc. (the “Appraiser”) has conducted an Appraisal dated [November 17, 2022] (the “Appraisal Report”) of certain land and existing improvements within the District to provide an estimate of the market value of the fee simple interest of such land and improvements. The Appraisal Report provides an estimate of the approximate market value of the property in the District subject to the levy of Special Taxes, assuming that development of the property as currently planned will consist of 258 residential units. Based on the contingencies, assumptions and limiting conditions in the Appraisal Report, the Appraiser concluded that the minimum market value of all of the parcels within the District subject to the Special Tax was $138,733,314 as of November 10, 2022 (the “Date of Value”).

The Appraisal Report is based upon a variety of assumptions and limiting conditions that are described in Appendix D. The District makes no representation as to the accuracy of the Appraisal Report. See “THE DISTRICT — Appraisal Report” and “— Estimated Appraised Value-to-Lien Ratios.” There is no assurance that property within the District can be sold for the prices set forth in the Appraisal Report or that any parcel can Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 24
Menifee Mayor and City Council
January 18, 2023
Page
753 of 1063

4 4878-9308-7290v8/200299-0014
be sold for a price sufficient to pay the Special Tax for that parcel in the event of a default in payment of Special Taxes by a property owner. See “THE DISTRICT,” “SPECIAL RISK FACTORS — Property Values” herein and Appendix D.

Description of the 2023 Bonds
The 2023 Bonds will be issued and delivered as fully registered bonds, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to actual purchasers of the 2023 Bonds (the “Beneficial Owners”) in the denominations of $5,000 or any integral multiple thereof, under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery of the 2023 Bonds. In the event that the book-entry only system described herein is no longer used with respect to the 2023 Bonds, the 2023 Bonds will be registered and transferred in accordance with the Indenture.

See Appendix G — “BOOK-ENTRY ONLY SYSTEM.”
Principal of, premium, if any, and interest on the 2023 Bonds is payable by the Trustee to DTC.

Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants. See Appendix G — “BOOK-ENTRY ONLY SYSTEM.”
The 2023 Bonds are subject to optional redemption, special mandatory redemption and mandatory sinking fund redemption prior to maturity as described herein. See the caption “THE 2023 BONDS — Redemption.” For a more complete description of the 2023 Bonds and the basic documentation pursuant to which they are being sold and delivered, see the caption “THE 2023 BONDS” and Appendix E — “SUMMARY OF THE INDENTURE.”
Tax Exemption
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California (“Bond Counsel”), under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the 2023 Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the 2023 Bonds is exempt from State of California personal income tax. See the caption “TAX MATTERS” with respect to tax consequences relating to the 2023 Bonds, including with respect to the alternative minimum tax imposed on certain large corporations for tax years beginning after December 31, 2022.

Set forth in Appendix C is the form of opinion of Bond Counsel expected to be delivered in connection with the issuance of the 2023 Bonds. For a more complete discussion of such opinion and certain tax consequences incident to the ownership of the 2023 Bonds, see the caption “TAX EXEMPTION.” Professionals Involved in the Offering
Wilmington Trust, National Association, Costa Mesa, California, will act as Trustee under the Indenture. Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) is the Underwriter of the 2023 Bonds.

Certain proceedings in connection with the issuance and delivery of the 2023 Bonds are subject to the approval of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel and Disclosure Counsel to the District in connection with the issuance of the 2023 Bonds. Certain legal matters will be passed on for the City and the District by Rutan & Tucker, LLP, Irvine, California, City Attorney, for the Underwriter by Kutak Rock LLP, Irvine, California, and for the Trustee by its counsel. Other professional services have been performed by Spicer Consulting Group, LLC, Temecula, California, as Special Tax Consultant (the “Special Tax Consultant”) and by Kitty Siino & Associates, Tustin, California, as Appraiser.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 25
Menifee Mayor and City Council
January 18, 2023
Page
754 of 1063

5 4878-9308-7290v8/200299-0014
For information concerning circumstances in which certain of the above-mentioned professionals, advisors, counsel and consultants may have a financial or other interest in the offering of the 2023 Bonds, see the caption “FINANCIAL INTERESTS.”
Continuing Disclosure
Pursuant to a Continuing Disclosure Certificate to be executed by the District (the “District Continuing Disclosure Certificate”), the District will agree to provide, or cause to be provided, to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system (“EMMA”), maintained on the Internet at http://emma.msrb.org, certain annual financial information and operating data and notices of certain enumerated events. These covenants are being made in order to assist the Underwriter in complying with subsection (b)(5) of Rule 15c2-12 adopted by the Securities and Exchange Commission (“Rule 15c2-12”).

See “CONTINUING DISCLOSURE,” Appendix F — “FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE.”
Parity Bonds
Under the Indenture, the District may issue Parity Bonds secured by the Net Taxes on a parity with the Bonds but only to refund all or a portion of the Bonds or Parity Bonds. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Parity Bonds.” Other taxes and/or special assessments with liens equal in priority to the continuing lien of the Special Taxes may also be levied in the future on the property within the District, which could adversely affect the willingness of the landowners to pay the Special Taxes when due. See the captions “THE DISTRICT — Direct and Overlapping Debt” and “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.”
Bond Owners’ Risks
Certain events could affect the ability of the District to pay the principal of and interest on the 2023 Bonds when due. See the caption “SPECIAL RISK FACTORS” for a discussion of certain factors which should be considered, in addition to other matters set forth herein, in evaluating an investment in the 2023 Bonds. The purchase of the 2023 Bonds involves risks, and the 2023 Bonds may not be appropriate investments for some types of investors.

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

Brief descriptions of the 2023 Bonds and the Indenture are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Indenture, the 2023 Bonds and the Constitution and laws of the State, as well as the proceedings of the City Council, acting as the legislative body of the District, are qualified in their entirety by references to such documents, laws and proceedings, and with respect to the 2023 Bonds, by reference to the Indenture. Capitalized terms not otherwise defined in this Official Statement have the meanings set forth in Appendix E.

Copies of the Indenture and other documents and information are available for inspection and copies may be obtained from the City, 29844 Haun Road, Menifee, California, 92586, Attention: Assistant City Manager.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 26
Menifee Mayor and City Council
January 18, 2023
Page
755 of 1063

6 4878-9308-7290v8/200299-0014

FINANCING PLAN
Estimated Sources and Uses of Funds
The following table sets forth the expected sources and uses of 2023 Bond proceeds.

Sources of Funds
Principal Amount of 2023 Bonds $
Plus/Less Net Original Issue Premium/Discount
Total Sources $
Uses of Funds:

Acquisition and Construction Fund $
Costs of Issuance(1)
Reserve Account of the Special Tax Fund(2)
Total Uses $
(1) To pay costs of issuance of the 2023 Bonds, including legal fees, underwriter’s discount, printing costs, Appraiser, Special Tax Consultant and Trustee fees.
(2) Such amount, together with $________ on deposit in the Reserve Account has been calculated to equal the Reserve Requirement as of the date of issuance of the 2023 Bonds.

THE 2023 BONDS
General Provisions
The 2023 Bonds will be dated their date of delivery and will bear interest at the rates per annum set forth on the inside cover page hereof, payable semiannually on each March 1 and September 1, commencing September 1, 2023 (each, an “Interest Payment Date”), and will mature in the amounts and on the dates set forth on the inside cover page of this Official Statement. Interest will be calculated on the basis of a 360-day year comprised of twelve 30-day months. The 2023 Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof.

Interest on any 2023 Bond will be payable from the Interest Payment Date next preceding the date of authentication of such 2023 Bond, unless: (i) such date of authentication is an Interest Payment Date, in which event interest will be payable from such date of authentication; (ii) the date of authentication is after the fifteenth day of the month preceding an Interest Payment Date, regardless of whether such day is a Business Day (each, a “Record Date”) but prior to the immediately succeeding Interest Payment Date, in which event interest will be payable from the Interest Payment Date immediately succeeding the date of authentication; or (iii) the date of authentication is prior to the close of business on the first Record Date occurring after the issuance of such 2023 Bond, in which event interest will be payable from the dated date of such 2023 Bond, as applicable; provided, however, that if at the time of authentication of such 2023 Bond, interest is in default, interest on such 2023 Bond will be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment on such 2023 Bond, interest on such 2023 Bond will be payable from its dated date.

Interest on any 2023 Bond will be paid to the person whose name appears as its owner in the registration books held by the Trustee on the close of business on the Record Date. Principal of, premium, if any, due upon redemption is payable upon presentation and surrender of the 2023 Bonds at the principal corporate trust office of the Trustee in Costa Mesa, California.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 27
Menifee Mayor and City Council
January 18, 2023
Page
756 of 1063

7 4878-9308-7290v8/200299-0014
The 2023 Bonds will be issued as fully registered bonds and will be registered in the name of Cede & Co., as nominee of DTC. DTC will act as securities depository of the 2023 Bonds. Ownership interests in the 2023 Bonds may be purchased in book-entry form only in denominations of $5,000 and any integral multiple thereof. So long as DTC is the securities depository all payments of principal and interest on the 2023 Bonds will be made to DTC and will be paid to the Beneficial Owners in accordance with DTC’s procedures and the procedures of DTC’s Participants. See APPENDIX G — “BOOK-ENTRY-ONLY SYSTEM.” In the event the 2023 Bonds are not held in book-entry form, interest will be paid by check of the Trustee mailed by first class mail, postage prepaid, to the Bondowner at its address on the registration books kept by the Trustee. Pursuant to a written request prior to the Record Date of a Bondowner of at least $1,000,000 in aggregate principal amount of 2023 Bonds or of any issue of Parity Bonds, payment will be made by wire transfer in immediately available funds to a designated account in the United States.

Debt Service Schedule
The following table presents the annual debt service on the Bonds (including sinking fund redemptions), assuming that there are no optional or special mandatory redemptions. See the caption “—Redemption” below.

Year Ending
September 1
2022 Bonds
Debt Service
2023 Bonds
Principal
2023 Bonds
Interest
Total 2023 Bonds
Debt Service
Total Aggregate
Debt Service
2023 $509,400.00 $ $ $
2024 521,200.00
2025 532,400.00
2026 543,000.00
2027 553,000.00
2028 562,400.00
2029 576,200.00
2030 589,200.00
2031 596,400.00
2032 613,000.00
2033 623,600.00
2034 633,400.00
2035 647,400.00
2036 660,400.00
2037 672,400.00
2038 688,400.00
2039 702,000.00
2040 714,850.00
2041 731,950.00
2042 743,150.00
2043 758,600.00
2044 773,000.00
2045 791,000.00
2046 807,400.00
2047 822,200.00
2048 840,400.00
2049 856,800.00
2050 871,400.00
2051 889,200.00
2052 --
2053 --
Total $19,823,750.00 $
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 28
Menifee Mayor and City Council
January 18, 2023
Page
757 of 1063

8 4878-9308-7290v8/200299-0014
Redemption
Optional Redemption. The 2023 Bonds may be redeemed at the option of the District from any source of funds on any Interest Payment Date on or after September 1, 20__, in whole or in part, from such maturities as are selected by the District and by lot within a maturity, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the date of redemption:

Redemption Date Redemption Price
September 1, 20__ and March 1, 20__ 103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100 In the event that the District elects to redeem 2023 Bonds as provided above, the District will give written notice to the Trustee of its election to so redeem, the redemption date and the principal amount of the 2023 Bonds of each maturity to be redeemed. The notice to the Trustee will be given at least 30 but no more than 60 days prior to the redemption date, or by such later date as is acceptable to the Trustee.

Mandatory Sinking Fund Redemption. The 2023 Bonds maturing on September 1, 20__ (the “20__ Term Bonds”) will be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption will be selected by the Trustee by lot and will be redeemed at a redemption price for each redeemed 20__ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:

Term Bonds Maturing September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$
*
* Maturity.

The 2023 Bonds maturing on September 1, 20__ (the “20__ Term Bonds”) will be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption will be selected by the Trustee by lot and will be redeemed at a redemption price for each redeemed 20__ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 29
Menifee Mayor and City Council
January 18, 2023
Page
758 of 1063

9 4878-9308-7290v8/200299-0014
Term Bonds Maturing September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$
*
* Maturity.

If the District purchases Term Bonds during the Fiscal Year immediately preceding one of the sinking fund redemption dates specified above, the District will notify the Trustee at least 45 days prior to the redemption date as to the principal amount purchased, and the amount purchased will be credited at the time of purchase to the next Sinking Fund Payment for the Term Bond so purchased, to the extent of the full principal amount of the purchase. All Term Bonds purchased will be cancelled pursuant to the Indenture.

In the event of a partial optional redemption or special mandatory redemption of the Term Bonds, each of the remaining Sinking Fund Payments for such Term Bonds will be reduced, as nearly as practicable, on a pro rata basis.

Special Mandatory Redemption from Special Tax Prepayments. The 2023 Bonds are subject to special mandatory redemption as a whole or in part on a pro rata basis among maturities and by lot within a maturity, on any Interest Payment Date on or after March 1, 20__, and will be redeemed by the Trustee, from any amounts paid by the District to the Trustee and designated by the District as a prepayment of Special Taxes for one or more parcels in the District made in accordance with the Rate and Method (the “Prepayments”) deposited to the Redemption Account pursuant to the Indenture, plus amounts transferred from the Reserve Account pursuant to the Indenture, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

Redemption Date Redemption Price
Any Interest Payment Date from March 1, 20__ through March 1, 20__ 103% September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100 Prepayments and amounts released from the Reserve Account in connection with Prepayments will be allocated to the payment at maturity and redemption of Bonds and any Parity Bonds as nearly as practicable on a proportionate basis based on the outstanding principal amount of the Bonds and any Parity Bonds and such amounts shall be applied to redeem Bonds and Parity Bonds as nearly as practicable on a pro rata basis among maturities in increments of $5,000; provided, however, that, for Prepayments of less than $50,000, the District may specify in a Certificate of an Authorized Representative that Prepayments be applied to one or more maturities of the Bonds or Parity Bonds so long as there is delivered to the Trustee a Certificate of the Independent Financial Consultant that, following such application of the Prepayments, the maximum Special Taxes that may be levied in each Fiscal Year on Taxable Property is not less than 110% of Annual Debt Service in the Bond Year that begins in such Fiscal Year.

See the caption “SPECIAL RISK FACTORS — Potential Early Redemption of 2023 Bonds from Prepayments or Community Facilities District Bond Proceeds” for a discussion of the potential for a lower than expected yield on the 2023 Bonds as a result of a special mandatory redemption from prepayment of Special Taxes or proceeds of bonds of other community facilities districts.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 30
Menifee Mayor and City Council
January 18, 2023
Page
759 of 1063

10 4878-9308-7290v8/200299-0014
Notice of Redemption. So long as the 2023 Bonds are held in book-entry form, notice of redemption will be sent by the Trustee to DTC and not to the Beneficial Owners of the 2023 Bonds under the DTC book- entry only system. Neither the District nor the Trustee is responsible for notifying the Beneficial Owners, who are to be notified in accordance with the procedures in effect for the DTC book-entry system. See Appendix G — “BOOK-ENTRY ONLY SYSTEM.”
The Trustee will give notice, in the name of the District, of the redemption of 2023 Bonds. Such notice of redemption will: (i) specify the CUSIP numbers (if any), the 2023 Bond numbers and the maturity date or dates of the 2023 Bonds selected for redemption, except that where all of the 2023 Bonds are subject to redemption, or all of the 2023 Bonds of one maturity are to be redeemed, the 2023 Bond numbers of such issue need not be specified; (ii) state the date fixed for redemption and surrender of the 2023 Bonds to be redeemed; (iii) state the redemption price; (iv) state the place or places where the 2023 Bonds are to be redeemed; (v) in the case of 2023 Bonds to be redeemed only in part, state the portion of such 2023 Bond which is to be redeemed; (vi) state the date of issue of the 2023 Bonds as originally issued; (vii) state the rate of interest borne by each 2023 Bond being redeemed; and (viii) state any other descriptive information needed to identify accurately the 2023 Bonds being redeemed as specified by the Trustee. Such notice will further state that on the date fixed for redemption, there will become due and payable on each 2023 Bond, or portion thereof called for redemption, the principal thereof, together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon will cease to accrue and be payable. At least 30 days but no more than 45 days prior to the redemption date, the Trustee will mail a copy of such notice of redemption, by first class mail, postage prepaid, to the respective Owners thereof at their addresses appearing on the Bond Register, and to the original purchaser of any 2023 Bonds; provided, however, so long as the 2023 Bonds are registered in the name of the Nominee, such notice shall be given in such manner as complies with the requirements of the Depository.

The actual receipt by the Owner of any 2023 Bond of notice of such redemption is not a condition precedent to redemption, and neither the failure to receive nor any defect in such notice will affect the validity of the proceedings for the redemption of such 2023 Bonds, or the cessation of interest on the redemption date. A certificate by the Trustee that notice of such redemption has been given as provided in the Indenture will be conclusive as against all parties and the Owner is not entitled to show that he or she failed to receive notice of such redemption.

In addition to the foregoing notice, further notice will be given by the Trustee as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice will in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed.

Each further notice of redemption will be sent not later than the date that notice of redemption is given to the Owners pursuant to the Indenture by first class mail or facsimile to the Depository and to any other registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the 2023 Bonds as determined by the Trustee and to one or more of the national information services that the Trustee determines are in the business of disseminating notice of redemption of obligations such as the 2023 Bonds.

Upon the payment of the redemption price of any 2023 Bonds being redeemed, each check or other transfer of funds issued for such purpose will to the extent practicable bear the CUSIP number identifying, by issue and maturity, the 2023 Bonds being redeemed with the proceeds of such check or other transfer.

With respect to any notice of optional redemption of 2023 Bonds, such notice may state that such redemption is conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on such 2023 Bonds to be redeemed and that, if the District determines that such moneys will not be so received on or prior to the redemption date, said notice shall be of no force and effect and the Trustee shall not be required to redeem such 2023 Bonds. If any condition stated in the redemption notice for an optional redemption shall not have been satisfied on or prior to the redemption date: (i) the redemption notice shall be of no force and effect, (ii) the District shall not be required to redeem such 2023 Bonds, (iii) the redemption shall not be made, and (iv) the Trustee shall within a reasonable Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 31
Menifee Mayor and City Council
January 18, 2023
Page
760 of 1063

11 4878-9308-7290v8/200299-0014
time thereafter give notice to the persons in the manner in which the conditional redemption notice was given that such condition or conditions were not met and that the redemption was canceled.

Selection of 2023 Bonds for Redemption. If less than all of the 2023 Bonds Outstanding are to be redeemed, the portion of any 2023 Bond of a denomination of more than $5,000 to be redeemed will be in the principal amount of $5,000 or an integral multiple thereof. In selecting portions of such 2023 Bonds for redemption, the Trustee will treat such 2023 Bonds, as applicable, as representing that number of 2023 Bonds of $5,000 denominations which is obtained by dividing the principal amount of such 2023 Bonds to be redeemed in part by $5,000. The procedure for the selection of Parity Bonds for redemption may be modified as set forth in the Supplemental Indenture for such Parity Bonds. The Trustee will promptly notify the District in writing of the 2023 Bonds, or portions thereof, selected for redemption.

Partial Redemption of 2023 Bonds. Upon surrender of any 2023 Bond to be redeemed in part only, the District will execute and the Trustee will authenticate and deliver to the Owner, at the expense of the District, a new 2023 Bond or 2023 Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the 2023 Bonds surrendered, with the same interest rate and the same maturity.

Effect of Notice and Availability of Redemption Money. Notice of redemption having been duly given, as provided in the Indenture, and the amount necessary for the redemption having been made available for that purpose and being available therefor on the date fixed for such redemption: (i) the 2023 Bonds, or portions thereof, designated for redemption will, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in the Indenture, anything in the Indenture or in the 2023 Bonds to the contrary notwithstanding; (ii) upon presentation and surrender thereof at the office of the Trustee, the redemption price of such 2023 Bonds will be paid to the Owners thereof; (iii) as of the redemption date the 2023 Bonds, or portions thereof so designated for redemption will be deemed to be no longer Outstanding and such 2023 Bonds, or portions thereof, will cease to bear further interest; and (iv) as of the date fixed for redemption no Owner of any of the 2023 Bonds, or portions thereof so designated for redemption will be entitled to any of the benefits of the Indenture, or to any other rights, except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available.

Registration, Transfer and Exchange
Registration. The Trustee will keep sufficient books for the registration and transfer of the 2023 Bonds.

The ownership of the 2023 Bonds will be established by the Bond registration books held by the Trustee.

Transfer or Exchange. Subject to the limitations set forth in the following paragraph, the registration of any 2023 Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such 2023 Bond for cancellation at the office of the Trustee, accompanied by delivery of written instrument of transfer in a form acceptable to the Trustee and duly executed by the Owner or his or her duly authorized attorney. 2023 Bonds may be exchanged at the office of the Trustee for a like aggregate principal amount of 2023 Bonds for other authorized denominations of the same maturity and issue. The Trustee may not collect from the Owner any charge for any new 2023 Bond issued upon any exchange or transfer, but will require the Owner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. Whenever any 2023 Bonds are surrendered for registration of transfer or exchange, the District will execute and the Trustee will authenticate and deliver a new 2023 Bond or 2023 Bonds, as applicable, of the same issue and maturity, for a like aggregate principal amount; provided that the Trustee is not required to register transfers or make exchanges of: (i) 2023 Bonds for a period of 15 days next preceding any selection of the 2023 Bonds to be redeemed; or (ii) any 2023 Bonds chosen for redemption.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 32
Menifee Mayor and City Council
January 18, 2023
Page
761 of 1063

12 4878-9308-7290v8/200299-0014

SOURCES OF PAYMENT FOR THE BONDS
Limited Obligations
The 2023 Bonds are special, limited obligations of the District payable only from amounts pledged under the Indenture and from no other sources. The 2023 Bonds are secured under the Indenture by a pledge of and lien upon Net Taxes and all moneys in the Special Tax Fund (other than the Administrative Expense Account therein) on a parity with the 2022 Bonds.

The Special Taxes are the primary source of security for the repayment of the Bonds. Under the Indenture, the District has pledged to repay the Bonds from the Net Taxes (which are Special Tax revenues remaining after the payment of the annual Administrative Expenses in an amount not to exceed the Administrative Expenses Cap (as defined in the Indenture)) and from amounts held in the Special Tax Fund (other than amounts held in the Administrative Expense Account therein). Special Tax revenues include the proceeds of the annual Special Tax levy received by the District, including any scheduled payments and Prepayments thereof, and the net proceeds of the redemption of delinquent Special Taxes or sale of property sold as a result of foreclosure of the lien of delinquent Special Taxes to the amount of said lien, and penalties and interest thereon; provided that any delinquent Special Tax sold to an independent third-party or to the City for 100% of the delinquent amount will no longer be pledged under the Indenture to the payment of the Bonds or Parity Bonds.

In the event that the Special Tax revenues are not received when due, the only sources of funds available to pay the debt service on the Bonds are amounts held by the Trustee in the Special Tax Fund (other than the Administrative Expense Account therein), including amounts held in the Reserve Account therein, for the exclusive benefit of the Owners of the Bonds.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY,

THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE NET TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL OBLIGATIONS OF THE CITY BUT ARE

LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM THE NET TAXES AND OTHER AMOUNTS PLEDGED UNDER THE INDENTURE AS MORE FULLY DESCRIBED HEREIN.

Special Taxes
Authorization and Pledge. In accordance with the provisions of the Act, the City established the District on August 5, 2020 for the purpose of financing of various public improvements required in connection with the proposed development within the District. At a special election held on August 5, 2020, the qualified elector within the District authorized the District to incur indebtedness in an amount not to exceed $18,000,000 for the District and the levy of the Special Taxes on property within the District to repay such bonds and to finance the Facilities (as defined below). The qualified elector within the District also voted to approve the Rate and Method which authorized the Special Tax to be levied to repay indebtedness of the District, including the Bonds.

The Bonds will be repaid only from annual Net Taxes derived from the levy and collection of Special Taxes pursuant to the Rate and Method. The Rate and Method permits the prepayment of Special Taxes for an Assessor’s Parcel, and any such Prepayments will be applied to redeem Bonds and Parity Bonds, if any. The Net Taxes collected from the annual Special Tax levy and the proceeds of any Prepayment have been pledged under the Indenture to the repayment of the Bonds and Parity Bonds.

The Special Taxes levied in any Fiscal Year may not exceed the maximum rates authorized pursuant to the Rate and Method. See “— Rate and Method of Apportionment of Special Tax” and Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” There is no assurance that the Net Taxes will, Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 33
Menifee Mayor and City Council
January 18, 2023
Page
762 of 1063

13 4878-9308-7290v8/200299-0014
in all circumstances, be adequate to pay the principal of and interest on the Bonds when due. See the caption “SPECIAL RISK FACTORS — Insufficiency of Special Tax Revenues.” Rate and Method of Apportionment of Special Tax. The Rate and Method applicable to the District is contained in Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” The meaning of the defined terms used in this section are as set forth in Appendix A.

In general, the Rate and Method imposes a different Maximum Special Tax on Taxable Property within the District depending upon whether such Taxable Property is classified as: (i) “Developed Property” (in general, Taxable Property not classified as Approved Property, Undeveloped Property, Provisional Undeveloped Property that are not Exempt Property pursuant to the provisions of the Rate and Method and which is included in a Final Map recorded prior to the January 1 preceding the Fiscal Year in which the Special Tax is being levied and a building permit for new construction has been issued before May 1 preceding such Fiscal Year), (ii) “Approved Property” (in general, parcels of Taxable Property included in a Final Map recorded prior to the January 1 preceding the Fiscal Year in which the Special Tax is being levied, that have an assigned Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, but for which no building permit was issued before May 1 preceding such Fiscal Year), (iii) “Undeveloped Property” (in general, Taxable Property that is not “Developed Property,” “Approved Property” or “Provisional Undeveloped Property”) or (iv) “Provisional Undeveloped Property” (in general, Taxable Property that would otherwise be classified as Exempt Property but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in the Rate and Method). Different Maximum Special Taxes are also applicable to Developed Property depending upon: (a) its status as either “Residential Property” or “Non-Residential Property,” (b) in the case of Residential Property, its status as “Single Family Residential Property” or “Multifamily Property” or (c) in the case of Single Family Residential Property, the Building Square Footage of the structure.

Pursuant to the Rate and Method the District is required to determine the “Special Tax Requirement” for each Fiscal Year. The Special Tax Requirement for the District is the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds and Parity Bonds due in the calendar year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount equal to establish or replenish any reserve funds established in association with the Bonds and Parity Bonds, (v) an amount to cure any delinquencies in the amount of principal or interest on the Bonds that occurred in a previous Fiscal Year, (vi) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by the District or the payment of debt service on Bonds or Parity Bonds anticipated to be issued, provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Approved Property or Undeveloped Property, and, less (vii) any amounts available to pay debt service or other periodic costs on the Bonds and Parity Bonds pursuant to the Indenture.

The Special Tax Requirement for the District is to be satisfied first by levying the Special Tax Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax. If additional moneys are needed to satisfy the Special Tax Requirement, the Special Tax will be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel. If additional moneys are still needed to satisfy the Special Tax Requirement, the Special Tax will be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel. If additional moneys are needed to satisfy the Special Tax Requirement, the Special Tax on each Assessor’s Parcel of Developed Property for which the Maximum Special Tax is the Backup Special Tax will be increased Proportionately from the Assigned Special Tax up to 100% of the Backup Special Tax. Finally, if additional moneys are needed to satisfy the Special Tax Requirement, the Special Tax will be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor’s Parcel of Residential Property as a result of a delinquency in the payment of the Special Tax Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 34
Menifee Mayor and City Council
January 18, 2023
Page
763 of 1063

14 4878-9308-7290v8/200299-0014
applicable to any other Assessor’s Parcel be increased by more than 10% above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default.

For Fiscal Year 2023-24, the Assigned Special Tax for Developed Property within the District that is classified as Single Family Residential Property will range from $2,552.21 per taxable unit with a Building Square Footage of less than 1,800 square feet to $3,870.23 per taxable unit with a Building Square Footage of greater than 3,601 square feet. On each July 1 the Assigned Special Tax rates for Developed Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

Table 1 below sets forth the Assigned Special Tax for Developed Property, the projected Fiscal Year 2023-24 Special Tax levy and the percent of such levy based on land use type.

Based on development status as of November 10, 2022, all 258 parcels planned for residential development within the District will be classified as Developed Property for the Fiscal Year 2023-24 Special Tax levy. Annual Debt Service on the 2023 Bonds has been sized based on the expected Special Tax revenues to be received in each Fiscal Year from the 258 parcels classified as Developed Property based on development status as of November 10, 2022, assuming that the Special Taxes are levied at 100% of the Assigned Special Tax. Assuming no delinquencies, the Special Tax levy on 258 parcels of Developed Property within the District will generate in each Fiscal Year not less than the Administrative Expenses Cap plus 110% of debt service payable with respect to the Bonds in the calendar year that begins in that Fiscal Year, assuming that Special Taxes are levied and collected on such Developed Property pursuant to the Rate and Method.

TABLE 1

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)
ASSIGNED SPECIAL TAX RATES FOR FISCAL YEAR 2023-24
Land Use Type
Residential
Floor Area
(sq. ft.)
Maximum/
Assigned
Special Tax
Rates
Fiscal Year
2023-24(1)
Special Tax
Levy Rates
Fiscal Year
2023-24
Percent of
Maximum/
Assigned
Rate
No. of
Units
Aggregate
Estimated
Special Tax
Revenues
Fiscal Year
2023-24(2)
Percent
of Total
Residential Property < 1,800 $2,552.21 $2,552.21 100.0% 29 $ 74,014.09 9.2% Residential Property 1,800 - 2,100 2,706.08 2,706.08 100.0 38 102,831.04 12.8 Residential Property 2,101 - 2,400 2,840.85 2,840.85 100.0 30 85,225.50 10.6 Residential Property 2,401 - 2,700 3,039.30 3,039.30 100.0 38 115,493.40 14.4 Residential Property 2,701 - 3,000 3,184.69 3,184.69 100.0 49 156,049.81 19.5 Residential Property 3,001 - 3,300 3,279.13 0.00 0.0 0 0.00 0.0 Residential Property 3,301 - 3,600 3,373.58 3,373.58 100.0 37 124,822.46 15.6 Residential Property <3,601 3,870.23 3,870.23 100.0 37 143,198.51 17.9 Multifamily Property N/A 19,040.19 0.00 0.0 0 0.00 0.0
Non-Residential Property N/A 19,040.19 0.00 0.0 0 0.00 0.0 Total 258 $ 801,634.81 100.0%
(1) Reflects the Assigned Special Tax rate for Developed Property and the Maximum Special Tax for Multifamily Property and Non- Residential Property.
(2) Includes the Fiscal Year 2023-24 Administrative Expenses Cap of $31,836.24. The Administrative Expenses Cap escalates at 2% per Fiscal Year.

Source: Spicer Consulting Group, LLC.

Backup Special Tax Rates. The Backup Special Tax for an Assessor’s Parcel within a Final Map classified or to be classified as Single Family Property is calculated by multiplying the Maximum Special Tax per acre of Undeveloped Property by the acreage of Single Family Residential Property expected to exist in such Final Map at the time of calculation and dividing such product by the number of residential units expected to exist in such Final Map at the time of calculation.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 35
Menifee Mayor and City Council
January 18, 2023
Page
764 of 1063

15 4878-9308-7290v8/200299-0014
In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all Assessor’s Parcels within such changed or modified area shall be $19,040.19 per acre for Fiscal Year 2023-24.

Notwithstanding the foregoing, the Backup Special Tax for an Assessor’s Parcel of Developed Property for which a certificate of occupancy has been granted may not be revised. In the event any superseding Final Map is recorded as a Final Map within the boundaries of the District, the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be $19,040.19 per acre for Fiscal Year 2023-24. The Backup Special Tax shall not apply to Multifamily Residential Property or Non-Residential Property. On each July 1 the Backup Special Tax rate will increase by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

Prepayment of Special Taxes. The Maximum Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor’s Parcels of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a building permit has been issued, (iii) Approved Property or Undeveloped Property for which a building permit has not been issued, and (iv) Assessor’s Parcels of Provisional Undeveloped Property that are not Exempt Property. In addition, the Maximum Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property may be partially prepaid. The Prepayment amount is calculated based on the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount, Administrative Fees and Expenses and less a credit for the resulting reduction in the Reserve Requirement for the Bonds (if any), all as specified in Section G of the Rate and Method attached as Appendix A. Prepayments of Special Taxes will be applied to effect an extraordinary redemption of Bonds and Parity Bonds. See “THE 2023 BONDS — Redemption — Special Mandatory Redemption from Special Tax Prepayments.” Estimated Debt Service Coverage. In connection with the issuance of the 2023 Bonds, the Special Tax Consultant will certify that the Maximum Special Tax that may be levied in each Fiscal Year on Assessor’s Parcels which are Developed Property as of November 10, 2022 (258 parcels) within the District classified as Taxable Property will be at least equal to the sum of: (i) 110% of Maximum Annual Debt Service on the Bonds; plus (ii) the Administrative Expenses Cap. Actual collections of the Special Tax will depend on the amount of Special Tax delinquencies.

Limitation on Special Tax Levy and Potential Impact on Coverage. Pursuant to Section 53321(d) of the Government Code, the special tax levied against any assessor’s parcel for which an occupancy permit for private residential use has been issued will not be increased as a consequence of delinquency or default by the owner of any other assessor’s parcel within the District by more than 10% above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. As a result, it is possible that the District may not be able to increase the tax levy to the Assigned Special Tax in all years.

Levy, Collection and Application of Special Taxes. The Special Taxes are levied and collected by the Treasurer-Tax Collector of the County in the same manner and at the same time as ad valorem property taxes, although it is possible that the District could elect to provide handbills to property owners within the District.

The District has covenanted in the Indenture that each year it will levy Special Taxes up to the maximum rates permitted under the Rate and Method in an amount sufficient, together with other amounts on deposit in the Special Tax Fund, to pay the principal of and interest on any Outstanding Bonds and Parity Bonds, to replenish the Reserve Account to the Reserve Requirement and to pay Administrative Expenses.

The District will make certain covenants in the Indenture which are intended to ensure that the current maximum Special Tax rates and method of collection of the Special Taxes are not altered in a manner that would impair the District’s ability to collect sufficient Special Taxes to pay debt service on the Bonds, Parity Bonds and Administrative Expenses when due.

First, the District has covenanted in the Indenture that it will take no actions that would discontinue or cause the discontinuance of the Special Tax levy or the District’s authority to levy the Special Tax for so long as the Bonds and any Parity Bonds are Outstanding.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 36
Menifee Mayor and City Council
January 18, 2023
Page
765 of 1063

16 4878-9308-7290v8/200299-0014
Second, the District has covenanted in the Indenture, to the maximum extent that the law permits it to do so, not to initiate proceedings to reduce the maximum Special Tax rates for the District, unless, in connection therewith, the District receives a certificate from one or more Independent Financial Consultants which, when taken together, certify that: (i) such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the District to an amount which is less than the Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such proposed reduction; and (ii) the District is not delinquent in the payment of the principal of or interest on the Bonds or any Parity Bonds.

Third, the District has covenanted in the Indenture that, in the event that any initiative is adopted by the qualified electors within the District which purports to reduce the maximum Special Tax below the levels specified in the preceding paragraph or to limit the power of the District to levy the Special Taxes for the purposes set forth in the Indenture, it will commence and pursue legal action in order to preserve its ability to comply with such covenants. The District can provide no assurance that any such legal action will be successful. See the caption “SPECIAL RISK FACTORS — Proposition 218.”
Fourth, the District has covenanted in the Indenture that it will not adopt any policy pursuant to the Act permitting the tender of Bonds or Parity Bonds in full payment or partial payment of any Special Taxes unless the District has first received a certificate from an Independent Financial Consultant that the acceptance of such a tender will not result in the District having insufficient Net Taxes to pay the principal of and interest on the Bonds and Parity Bonds when due.

See Appendix E under the caption “COVENANTS AND WARRANTY.” Although the Special Taxes constitute liens on taxed parcels within the District, they do not constitute a personal indebtedness of the owners of property within the District. Moreover, other liens for taxes and assessments already exist on the property located within the District and others could come into existence in the future in certain situations without the consent or knowledge of the City or the landowners in the District. See the captions “THE DISTRICT — Direct and Overlapping Debt” and “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.” There is no assurance that property owners will be financially able to pay the annual Special Taxes or that they will pay such taxes even if financially able to do so, all as more fully described under the caption “SPECIAL RISK FACTORS.”
Proceeds of Foreclosure Sales. The net proceeds received following a judicial foreclosure sale of property within the District resulting from a property owner’s failure to pay the Special Taxes when due are included within the Net Taxes pledged to the payment of principal of and interest on the Bonds and any Parity Bonds under the Indenture.

Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of any Special Tax or receipt by the District of Special Taxes in an amount which is less than the Special Taxes levied, the City Council, as the legislative body of the District, may order that Special Taxes be collected by a Superior Court action to foreclose the lien within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at a judicial foreclosure sale. Under the Act, the commencement of judicial foreclosure following the nonpayment of a Special Tax is not mandatory. However, the District has covenanted in the Indenture for the benefit of the owners of the Bonds and any Parity Bonds that it will: (i) commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in excess of $5,000 by the October 1 following the close of each Fiscal Year in which such Special Taxes were due; and (ii) commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the October 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied; and (iii) diligently pursue such foreclosure proceedings until the delinquent Special Taxes are paid; provided that, notwithstanding the foregoing, the District may elect to defer foreclosure proceedings on any parcel so long as the amount in the Reserve Account is at least equal to the Reserve Requirement.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 37
Menifee Mayor and City Council
January 18, 2023
Page
766 of 1063

17 4878-9308-7290v8/200299-0014
The District has covenanted in the Indenture that it will deposit the net proceeds of any foreclosure in the Special Tax Fund and will apply such proceeds remaining after the payment of Administrative Expenses to make current payments of principal and interest on the Bonds and any Parity Bonds, to bring the amount on deposit in the Reserve Account up to the Reserve Requirement and to pay any delinquent installments of principal or interest due on the Bonds and any Parity Bonds. See APPENDIX E — “SUMMARY OF THE INDENTURE — COVENANTS AND WARRANTY — Covenants” herein.

If foreclosure is necessary and other funds (including amounts in the Reserve Account) have been exhausted, debt service payments on the Bonds could be delayed unless the foreclosure proceedings produce sufficient net foreclosure sale proceeds. Judicial foreclosure actions are subject to the normal delays associated with court cases and may be further slowed by bankruptcy actions, involvement by agencies of the federal government and other factors beyond the control of the City and the District. See the caption “SPECIAL RISK FACTORS — Enforcement Delays – Bankruptcy.” Moreover, no assurances can be given that the real property subject to foreclosure and sale at a judicial foreclosure sale will be sold or, if sold, that the net proceeds of such sale will be sufficient to pay any delinquent Special Tax installment. See the caption “SPECIAL RISK FACTORS — Property Values.” Although the Act authorizes the District to cause such an action to be commenced and diligently pursued to completion, the Act does not impose on the District or the City any obligation to purchase or acquire any lot or parcel of property sold at a foreclosure sale if there is no other purchaser at such sale. The Act provides that, in the case of a delinquency, the Special Tax will have the same lien priority as is provided for ad valorem taxes.

Collection of Special Taxes and Flow of Funds. The Special Taxes will be levied and collected by the Treasurer-Tax Collector of the County in the same manner and at the same time as ad valorem property taxes, although it is possible that the District could elect to provide handbills to property owners within the District.

When the County apportions Special Taxes to the District, the District will transmit the Special Taxes to the Trustee for deposit in the Special Tax Fund established by the Indenture.

Except for Prepayments, which will be deposited to the Redemption Account of the Special Tax Fund, the Trustee will, on each date on which the Special Taxes are received from the District, deposit the Special Taxes in the Special Tax Fund to be held in trust for the Owners. The Trustee will transfer the Special Taxes on deposit in the Special Tax Fund on the dates, in the amounts and in the following order of priority, to:

First: To the Administrative Expense Account in an amount up to the Administrative Expenses Cap.

Second: To the Interest Account, an amount such that the balance in the Interest Account one Business Day prior to each Interest Payment Date is equal to the installment of interest due on the Bonds and any Parity Bonds on said Interest Payment Date and any installment of interest due on a previous Interest Payment Date which remains unpaid. Moneys in the Interest Account will be used for the payment of interest on the Bonds and any Parity Bonds as the same become due.

Third: To the Principal Account, an amount such that the balance in the Principal Account one Business Day prior to September 1 of each year, is equal the principal payment due on the Bonds and any Parity Bonds maturing on such September 1 and any principal payment due on a previous September 1 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds and any Parity Bonds as the same become due at maturity.

Fourth: To the Redemption Account, the amount needed to make the balance in the Redemption Account one Business Day prior to each September 1 on which a Sinking Fund Payment is due equal to the Sinking Fund Payment due on any Outstanding Bonds and Parity Bonds on such September 1; provided, however, that, if amounts in the Special Tax Fund are Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 38
Menifee Mayor and City Council
January 18, 2023
Page
767 of 1063

18 4878-9308-7290v8/200299-0014
inadequate to make the foregoing transfers, then any deficiency will be made up by an immediate transfer from the Reserve Account, if funded, pursuant to the Indenture; and thereafter, to pay the principal and premium, if any, due in connection with an optional redemption of Bonds or Parity Bonds.

Fifth: To the Reserve Account of the Special Tax Fund to the extent necessary to replenish the Reserve Account to the Reserve Requirement.

Sixth: To the Administrative Expense Account of the Special Tax Fund the amount of any Administrative Expenses for the current Bond Year in excess of the Administrative Expenses Cap as directed by the City.

Seventh: To the Rebate Fund established by the Indenture to the extent directed by the City pursuant to the Indenture.

Eighth: To the Surplus Fund established by the Indenture such remaining amounts in the Special Tax Fund after making the foregoing transfers on September 1.

Reserve Account of the Special Tax Fund
In order to secure further the payment of principal of and interest on the Bonds, the District is required, to maintain in the Reserve Account an amount equal to the Reserve Requirement. The term “Reserve Requirement” is defined in the Indenture to mean, that amount as of any date of calculation, equal to the lesser of: (i) 10% of the initial principal amount of the Bonds and Parity Bonds, if any; (ii) Maximum Annual Debt Service on the then Outstanding Bonds and Parity Bonds, if any; (iii) 125% of average Annual Debt Service on the then Outstanding Bonds and Parity Bonds, if any; provided, however, that the Reserve Requirement shall not exceed $____________ except in connection with the issuance of Parity Bonds. There is currently $_________ on deposit in the Reserve Fund. Upon the issuance of the 2023 Bonds, the Reserve Requirement will be $_________. On the date of issuance of the 2023 Bonds, the District will deposit $__________ from proceeds of the 2023 Bonds into the Reserve Account to increase the amount therein to the Reserve Requirement.

The Reserve Requirement may be satisfied in whole or in part by cash, a Reserve Policy (as defined in the Indenture), or a combination thereof.

Subject to the limits on the maximum annual Special Tax levy set forth in the Rate and Method and in the Indenture, the District has covenanted in the Indenture to levy Special Taxes in an amount sufficient, in light of the other intended uses of the Special Tax proceeds, to maintain the balance in the Reserve Account at the Reserve Requirement. Amounts in the Reserve Account are to be applied: (i) to pay debt service on the Bonds, or any Parity Bonds, including Sinking Fund Payments, to the extent that other monies are not available therefor; (ii) to redeem Bonds or Parity Bonds in the event of prepayment of Special Taxes, to optionally redeem Bonds or Parity Bonds or in connection with a partial defeasance of Bonds or Parity Bonds, in accordance with the Indenture; and (iii) to pay any rebate requirements. See Appendix E under the caption “CREATION OF FUNDS AND APPLICATION OF PROCEEDS — Reserve Account of the Special Tax Fund.” No Teeter Plan
Although the Riverside County Board of Supervisors has adopted the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”) which allows each entity levying secured property taxes in the County to draw on the amount of property taxes levied rather than the amount actually collected, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code, the District is not included in the County Teeter Plan. Consequently, the District may not draw on the County Tax Loss Reserve Fund in the event of delinquencies in Special Tax payments within the District.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 39
Menifee Mayor and City Council
January 18, 2023
Page
768 of 1063

19 4878-9308-7290v8/200299-0014
Parity Bonds for Refunding Purposes Only
The Indenture provides that, upon satisfaction of certain conditions, the District may issue Parity Bonds payable from the Net Taxes and other amounts deposited in the Special Tax Fund (other than in the Administrative Expenses Account therein) and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds theretofore issued; provided, however, Parity Bonds may only be issued for the purpose of refunding all or a portion of the Bonds or any Parity Bonds then Outstanding. Among other conditions, in order to issue Parity Bonds to refund all or a portion of the Bonds or any Parity Bonds, the District shall have received a Certificate of the Special Tax Administrator certifying that in each Bond Year the Annual Debt Service on the Bonds and Parity Bonds to remain Outstanding following the issuance of the Parity Bonds proposed to be issued is less than the Annual Debt Service on the Bonds and Parity Bonds Outstanding prior to the issuance of such Parity Bonds. See Appendix E under the caption “DEFEASANCE AND PARITY BONDS.”

THE DISTRICT
General Description of the District
The District contains approximately 86 gross acres and approximately 59 net taxable acres, and is located in the northeastern portion of the City, on the southwest corner of Menifee Road and Rouse Road. The property within the District is being developed by Lennar Homes. The project within the District is being marketed by Lennar Homes as “Remington Place.”
The property within the District is planned for 258 residential units within two product lines – Westward (132 homes) and Trailhead (126 homes). As of November 10, 2022, Lennar Homes had completed and conveyed 236 homes within the District to individual homeowners. As of such date Lennar Homes owned five model homes and seventeen homes under construction (16 of which were over 95 percent complete). All remaining homes owned by Lennar Homes were in escrow as of November 10, 2022. Lennar Homes currently expects to complete and convey all homes planned within the District to individual homeowners by the end of February 2023.

Lennar Homes has completed the Park of approximately 5 acres in the District, which includes pickle- ball and basketball courts, play equipment and shade structures. In addition, Lennar Homes has completed open space and trails in the District which are connected to the Park. Such open space improvements include drainage basins which serve as part of the storm drainage system for the development.

Water and sewer service to the property within the District is currently supplied by the Eastern Municipal Water District. Electricity is currently supplied by Southern California Edison and gas by Southern California Gas Company. Public education instruction is provided by Romoland School District and Perris Union High School District.

The property within the District is not located in an Alquist-Priolo Earthquake Study Zone and is not located within one-half mile of an active earthquake fault. Additionally, the District is not located in a flood plain area or in an area which the Department of Forestry and Fire Protection of the State of California has designated as a high fire hazard severity zone. Notwithstanding the foregoing, the property in the District may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. See “SPECIAL RISK FACTORS — Natural Disasters.”
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 40
Menifee Mayor and City Council
January 18, 2023
Page
769 of 1063

20 4878-9308-7290v8/200299-0014
A map showing the location of the District and an aerial photograph thereof appear following the Table of Contents.

Authorized Uses of Bond Proceeds
Proceeds of the Bonds are authorized to be used to pay for the costs of construction of City facilities, including certain storm drain and street improvements, and the costs of school facilities to be owned and operated by the Romoland School District. See the caption “FINANCING PLAN.” Appraisal Report
The estimated assessed value of the property within the District, as shown on the County’s assessment roll for Fiscal Year 2022-23 is approximately $45,716,797, which as a result of timing of the County’s determination of the assessed values for Fiscal Year 2022-23, does not reflect the substantial development activity that has taken place since such value was determined.

A property’s assessed value is not necessarily indicative of its market value. In order to provide information with respect to the value of the taxable property within the District, the City engaged the Appraiser to prepare the Appraisal Report. The Appraiser has an “MAI” designation from the Appraisal Institute and has prepared numerous appraisals for the sale of land-secured municipal bonds. The Appraiser was selected by the City and has no material relationships with the City or the owners of the land within the District other than the relationship represented by the engagement to prepare the Appraisal Report. The City instructed the Appraiser to prepare its analysis and report in conformity with City-approved guidelines and the Appraisal Standards for Land Secured Financings published in 1994 and revised in 2004 by the California Debt and Investment Advisory Commission. A copy of the Appraisal Report is included as Appendix D — “APPRAISAL REPORT” to this Official Statement.

The purpose of the Appraisal Report was to estimate the market value of the property within the District subject to the lien of the Special Taxes. The estimate of market value takes into consideration and assumes the improvements to be funded with the proceeds of the Bonds have been installed and that the remaining costs to develop the project within the District provided to the Appraiser by Lennar Homes are correct. As a result, the value conclusions are based upon a hypothetical condition that all improvements and benefits to the District, which are to be funded with the proceeds of the 2023 Bonds, are completed and in place or have accrued to the property.

Subject to the assumptions and limiting conditions set forth in the Appraisal Report, the Appraiser concluded that, as of November 10, 2022, the market value of the Taxable Property within the District was $138,733,314. In valuing the property within the District, the Appraiser used a sales comparison approach for the property to be developed and, with respect to the Lennar Homes-owned models and production units more than 95% complete, a discounted cash flow analysis was applied. The discounted cash flow analysis accounts for remaining development costs, marketing and carrying costs and a discount rate through the estimated absorption period for such models and production units.

The Appraisal Report is based upon a variety of assumptions and limiting conditions that are described in Appendix D. The City, the Underwriter and the District make no representation as to the accuracy of the Appraisal Report. There is no assurance that the property within the District can be sold for the prices set forth in the Appraisal Report or that any parcel can be sold for a price sufficient to pay the Special Tax for that parcel in the event of a default in payment of Special Taxes by the landowner. See “SPECIAL RISK FACTORS — Property Values,” Appendix D — “APPRAISAL REPORT.”
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 41
Menifee Mayor and City Council
January 18, 2023
Page
770 of 1063

21 4878-9308-7290v8/200299-0014
Estimated Appraised Value-to-Lien Ratios
The aggregate appraised value of property within the District is $138,733,314. Dividing the aggregate estimate of value by the principal amount of the Bonds results in a value to lien ratio of 9.43-to-1* for the District.

See “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.” The assessed value of the property within the District is $45,716,797 for Fiscal Year 2023-24, which as a result of timing of the County’s determination of the assessed values for Fiscal Year 2023-24, does not reflect the substantial development activity that has taken place since such value was determined. Dividing the assessed value by the outstanding principal amount of the Bonds debt results in an estimated assessed value-to-lien ratio of 3.11-to-1 * for the District.

Based on ownership status as of November 10, 2022 and assuming no additional transfer of property, individual homeowners and Lennar Homes are expected to be responsible for approximately 90.80% and 9.20%, respectively, of the projected Fiscal Year 2023-24 Special Tax levy.

Table 2 below sets forth the appraised value-to-lien ratio of the Taxable Property within the District based on the appraised values set forth in the Appraisal Report, the principal amount of the Bonds and outstanding overlapping indebtedness. Table 3 below sets forth the estimated appraised value-to-lien ratios for Taxable Property within the District by various ranges based upon the principal amount of the Bonds and outstanding overlapping indebtedness.

Annual Debt Service on the 2023 Bonds has been sized based on the expected Special Tax revenues to be received in each Fiscal Year from the 258 parcels classified as Developed Property, assuming that the Special Taxes are levied at 100% of the Assigned Special Tax.
* Preliminary, subject to change.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 42
Menifee Mayor and City Council
January 18, 2023
Page
771 of 1063

22 4878-9308-7290v8/200299-0014
TABLE 2

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)

ESTIMATED VALUE-TO-LIEN RATIOS

ALLOCATED BY PROPERTY OWNER
Property Owner(1)
No. of
Parcels
Appraised
Property
Value(2)
Percent of
Appraised
Value
Maximum
Special
Tax(3)
Percentage
of Maximum
Special Tax
Estimated
Fiscal Year
2023-24
Special Tax
Levy(4)*
Percent of
Estimated
Fiscal Year
2023-24
Special Tax
Levy*
CFD 2020-1
2023 Bonds(5)*
All Other
Overlapping
Debt Issued(6)
Appraised
Value-to-
Lien Ratio*
Developed Property
Individually Owned 236 $ 129,532,068 93.37% $ 827,437 91.30% $ 727,856 90.80% $ 3,114,320 $ 10,842,391 9.28:1 Lennar Homes Owned 22 9,201,246 6.63 78,888 8.70 73,778 9.20 315,680 1,099,028 6.50:1 Total of Developed Property 258 $ 138,733,314 100.00% $ 906,325 100.00% $ 801,634 100.00% $ 3,430,000 $ 11,941,419 9.03:1 * Preliminary, subject to change.
(1) Property ownership status as of November 10, 2022.
(2) Based on the appraised value set forth in the Appraisal Report as of the November 10, 2022, Date of Value. (3) Based on the greater of the Assigned Special Tax or Backup Special Tax rate on parcels of Developed Property. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Rate and Method of Apportionment of Special Tax.”
(4) Estimated Fiscal Year 2023-24 Special Tax Levy based upon development status as of November 10, 2022 and an Administrative Expense Cap for Fiscal Year 2023-24 of $31,836.24. The Special Tax levy shown is equal to 100% of the Assigned Special Tax rates on Developed Property. (5) Allocated based on estimated Fiscal Year 2023-24 Special Tax levy. (6) Includes $11,275,000 outstanding principal amount of the 2022 Bonds and outstanding overlapping indebtedness. See Table 4 below.

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 43
Menifee Mayor and City Council
January 18, 2023
Page
772 of 1063

23 4878-9308-7290v8/200299-0014
TABLE 3

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)
VALUE-TO-LIEN STRATIFICATION*
Value-to-Lien Category
No. of
Parcels of
Developed
Property
Percent of
Developed
Property
Appraised
Value(1)
Percent of
Appraised
Value
CFD 2020-1
Estimated
Fiscal Year
2023-24
Special Tax
Levy
Percent
Share of
Estimated
Fiscal
Year
2023-24
Special
Tax Levy
CFD 2020-1
2023 Bonds(2)
Percent
Share of
CFD 2020-1
2023 Bonds
All Other
Overlapping
Debt(3)
Less than 3.00:1 0 0.00% $ 0 0.00% $ 0 0.00% $ 0 0.00% $ 0 Between 3.00:1 to 6.00:1(4) 8 3.10 3,200,112 2.31 29,798 3.72 127,497 3.72 443,876 Between 6.01:1 to 9.00:1 77 29.84 42,510,984 30.64 260,385 32.48 1,114,122 32.48 3,878,774 Greater than 9.00:1(4) 173 67.05 93,022,218 67.05 511,453 63.80 2,188,381 63.80 7,618,768 Total 258 100.00% $ 138,733,314 100.00% $ 801,636 100.00% $ 3,430,000 100.00% $ 11,941,418 * Preliminary, subject to change.
(1) Based on the appraised value set forth in the Appraisal Report as of the November 10, 2022, Date of Value. (2) Allocated based on the estimated Fiscal Year 2023-24 Special Tax levy and reflects 258 building permits issued as of November 10, 2022 and an Administrative Expense Cap for Fiscal Year 2023- 24 of $31,836.24.
(3) Includes $11,275,000 outstanding principal amount of the 2022 Bonds and outstanding overlapping indebtedness. See Table 4 below. (4) The minimum value to lien in the 3.00:1 to 6.00:1 category is 3.85:1*. The maximum value to lien in the Greater than 9.01:1 category is 10.16:1*.

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 44
Menifee Mayor and City Council
January 18, 2023
Page
773 of 1063

24 4878-9308-7290v8/200299-0014
Direct and Overlapping Debt
The District is included within the boundaries of overlapping local agencies providing governmental services. Some of these local agencies have outstanding bonds, and/or the authority to issue bonds, payable from taxes or assessments. The existing and authorized indebtedness payable from taxes and assessments that may be levied upon the property within the District is shown in Table 4 below. In addition to current debt, new community facilities districts and/or special assessment districts could be formed in the future encompassing all or a portion of the property within the District; and such districts or the agencies that formed them could issue more bonds and levy additional special taxes or assessments.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 45
Menifee Mayor and City Council
January 18, 2023
Page
774 of 1063

25 4878-9308-7290v8/200299-0014
TABLE 4

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)

DIRECT AND OVERLAPPING DEBT
AS OF NOVEMBER 10, 2022
I. Appraised Value(1) $ 138,733,314
II. Land Secured Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable
Parcels in
CFD No.
2020-1(3)
Amount
Applicable
CITY OF MENIFEE CFD NO. 2020-1, SERIES 2022A CFD $ 11,275,000 $ 11,275,000 100.000% 258 $ 11,275,000 CITY OF MENIFEE CFD NO. 2020-1, SERIES 2023A CFD 3,430,000 3,430,000 100.000 258 3,430,000* TOTAL LAND SECURED BONDED DEBT(2) $ 14,705,000*
Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable
Parcels in
CFD No.
2020-1(3)
Amount
Applicable
CITY OF MENIFEE CFD NO. 2020-1(2) CFD $ 18,000,000 $ 0 100.000% 258 $ 0 TOTAL UNISSUED LAND SECURED INDEBTEDNESS $ 0
TOTAL OUTSTANDING AND UNISSUED LAND SECURED INDEBTEDNESS $ 14,705,000 III. General Obligation Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable
Parcels in
CFD No.
2020-1(3)
Amount
Applicable
METROPOLITAN WATER DEBT SERVICE GO $ 850,000,000 $ 50,105,000 0.045% 258 $ 22,395 MT. SAN JACINTO JR. COLLEGE DEBT SERVICE GO 190,000,000 157,750,000 0.040 258 62,351 PERRIS UNION HIGH SCHOOL DEBT SERVICE GO 347,415,402 299,532,812 0.194 258 581,673 TOTAL OUTSTANDING GENERAL OBLIGATION BONDED DEBT(2) $ 666,419 Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable
Parcels in
CFD No.
2020-1(3)
Amount
Applicable
METROPOLITAN WATER DEBT SERVICE GO $ 850,000,000 $ 0 0.045% 258 $ 0 MT. SAN JACINTO JR. COLLEGE DEBT SERVICE GO 295,000,000 105,000,000 0.040 258 41,501 PERRIS UNION HIGH SCHOOL DEBT SERVICE GO 347,420,000 4,598 0.194 258 9 TOTAL UNISSUED GENERAL OBLIGATION INDEBTEDNESS $ 41,510 TOTAL OUTSTANDING AND UNISSUED GENERAL OBLIGATION INDEBTEDNESS $ 707,930 TOTAL OF ALL OUTSTANDING DIRECT AND OVERLAPPING BONDED DEBT $ 15,371,419 * TOTAL OF ALL OUTSTANDING DIRECT AND UNISSUED DIRECT OVERLAPPING INDEBTEDNESS $ 15,412,930 * IV. Ratios to Appraisal Value
Outstanding Land Secured Bonded Debt 9.43:1*
Total Outstanding Bonded Debt 9.03:1*
* Preliminary, subject to change.
(1) Based on the appraised value set forth in the Appraisal Report as of the November 10, 2022, Date of Value. (2) Parity Bonds may only be issued for refunding purposes. (3) All parcels have subdivided into 258 individual parcels. As of November 10, 2022, all 258 parcels are Developed Property per the Rate and Method for Fiscal Year 2023-24.

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

Table 5 below describes the estimated Fiscal Year 2023-24 effective tax burden for Lennar Homes’ development in the District based on the average appraised value of homes within each Land Use Category (as defined in the Rate and Method) as of the Date of Value, the estimated Fiscal Year 2023-24 Special Tax levy and Fiscal Year 2022-23 actual levies for all other overlapping taxing jurisdictions. Based on the foregoing, the projected debt service on the 2023 Bonds and the Administrative Expenses Cap of $46,512 (which amount shall escalate at 2% per Fiscal Year), in Fiscal Year 2023-24, the projected effective tax rates to be levied on Developed Property in the District ranges from approximately 1.87% to 1.96%.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 46
Menifee Mayor and City Council
January 18, 2023
Page
775 of 1063

26 4878-9308-7290v8/200299-0014
TABLE 5

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)
ESTIMATED FISCAL YEAR 2023-24 TAX OBLIGATION

FOR A SAMPLE OF DEVELOPED PROPERTY
TR 31098
Trailhead Westward
Lennar Homes
Plan Type 1 2 3 4 5 1 2 3 4
CFD Tax Category Less than
1,800 S.F.
1,800 to
2,100 S.F.
2,101 to
2,400 S.F.
2,701 to
3,000 S.F.
1,800 to
2,100 S.F.
2,401 to
2,700 S.F.
3,301 to
3,600 S.F.

Greater than
3,601 S.F.
2,701 to
3,000 S.F.

Home Size 1,769 1,912 2,131 2,767 2,051 2,590 3,423 4,134 2,767 Appraisal Value(1) $ 468,785 $ 497,120 $ 522,095 $ 581,070 $ 527,107 $ 505,050 $ 588,756 $ 661,440 $ 581,070 Ad Valorem Property Taxes:

General Purpose $ 4,688 $ 4,971 $ 5,221 $ 5,811 $ 5,271 $ 5,051 $ 5,888 $ 6,614 $ 5,811 Metro Water West (0.00350%) 16 17 18 20 18 18 21 23 20
Mt. San Jacinto Jr College (0.01320%) 62 66 69 77 70 67 78 87 77 Perris Union High School District (0.088590%) 415 440 463 515 467 447 522 586 515 Total General Property Taxes $ 5,181 $ 5,494 $ 5,771 $ 6,423 $ 5,826 $ 5,583 $ 6,509 $ 7,310 $ 6,423 Assessment, Special Taxes & Parcel Charges:

Flood Control Stormwater / Cleanwater / Santa Ana $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 Valleywide Regional Facilities LMD 88-1 6 6 6 6 6 6 6 6 6 Valleywide LMD Menifee North Park 236 236 236 236 236 236 236 236 236 MWD Standby East charge 7 7 7 7 7 7 7 7 7
EMWD Infrastructure Availability Charge 11 11 11 11 11 11 11 11 11 City of Menifee CFD 2017-1, Zone 4 Maintenance Services 992 992 992 992 992 992 992 992 992 City of Menifee CFD 2020-1 (McCall Mesa)(2) 2,551 2,706 2,841 3,185 2,706 3,039 3,374 3,870 3,185 Total Assessments & Special Taxes $ 3,807 $ 3,962 $ 4,097 $ 4,441 $ 3,962 $ 4,295 $ 4,630 $ 5,126 $ 4,441 Projected Total Property Tax $ 8,988 $ 9,456 $ 9,867 $ 10,862 $ 9,787 $ 9,877 $ 11,136 $ 12,436 $ 10,862 Projected Effective Tax Rate 1.92% 1.90% 1.89% 1.87% 1.86% 1.96% 1.89% 1.88% 1.87% (1) Based on the average appraised value for homes in each Land Use Class (as defined in the Rate and Method) set forth in the Appraisal Report as of the Date of Value. (2) Reflects the estimated Fiscal Year 2023-24 Special Tax levy for Developed Property.

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 47
Menifee Mayor and City Council
January 18, 2023
Page
776 of 1063

27 4878-9308-7290v8/200299-0014
Delinquency History
In Fiscal Year 2021-22, which was the first fiscal year in which Special Taxes were levied, the District levied Special Taxes on 127 parcels of Developed Property in the amount of $376,868.58. As of December 1, 2022, one parcel was delinquent in the payment of the Special Tax for Fiscal Year 2021-22 in the amount of $1,530.51.

PROPERTY OWNERSHIP AND THE DEVELOPMENT
The information about the property in the District contained in this Official Statement has been provided by representatives of Lennar Homes and has not been independently confirmed or verified by the Underwriter, the City or the District. The Underwriter, the City, and the District make no representation as to the accuracy or adequacy of the information contained in this caption. There may be material adverse changes in this information after the date of this Official Statement. Neither the Bonds nor the Net Taxes securing the Bonds and any Parity Bonds are personal obligations of Lennar Homes or any affiliate thereof or any other property owner and, in the event that any property owner defaults in the payment of its Special Taxes, the District may proceed with judicial foreclosure but has no direct recourse to the assets of any property owner or any affiliate thereof. See the caption “SPECIAL RISK FACTORS.”
Notwithstanding the belief of Lennar Homes that it will have sufficient funds to complete its planned development in the District, no assurance can be given that amounts necessary to fund the remaining planned development by Lennar Homes in the District will be available when needed. None of Lennar Homes, or any other entity or person, is under any legal obligation of any kind to expend funds for the development of the property as planned by Lennar Homes in the District. Any contributions by Lennar Homes or any other entity or person to fund the costs of its development are entirely voluntary. If and to the extent the aforementioned sources are inadequate to pay the costs to complete the planned development by Lennar Homes within the District, the remaining portions of such development may not be completed. Lennar Homes has no legal obligation to Bondholders to make any such funds available for construction or development, or the payment of ad valorem property taxes or the Special Taxes. See the caption “SPECIAL RISK FACTORS.” General
The District contains approximately 86 gross acres and approximately 59 net taxable acres, and is located in the northeastern portion of the City, on the southwest corner of Menifee Road and Rouse Road. The project within the District is being marketed by Lennar Homes as “Remington Place.” The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District has been completed. Other than landscaping and final capping of certain streets associated with the remaining homes to be completed, all in-tract infrastructure in the District is complete.

Planned Development Within the District
The property within the District is planned for 258 residential units within two product lines – Westward (132 homes) and Trailhead (126 homes). As of November 10, 2022, Lennar Homes had completed and conveyed 236 homes within the District to individual homeowners. As of such date Lennar Homes owned five model homes and seventeen homes under construction (16 of which were over 95 percent complete). All remaining homes owned by Lennar Homes were in escrow as of November 10, 2022. Lennar Homes currently expects to Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 48
Menifee Mayor and City Council
January 18, 2023
Page
777 of 1063

28 4878-9308-7290v8/200299-0014
complete and convey all homes planned within the District to individual homeowners by the end of February 2023.

As of November 10, 2022, within the Westward product line, Lennar Homes had completed and conveyed 115 of the 132 planned homes to individual homeowners. As of such date, Lennar Homes owned two model homes and 15 homes under construction, all of which were over 95 percent complete and in escrow.

Home sizes within the Westward product line range from approximately 2,590 to 4,134 square feet. Actual sales prices for the closed homes have ranged from approximately $493,000 to $856,415. The contract prices for the homes in escrow range from $502,540 to $743,135.

As of November 10, 2022, within the Trailhead product line, Lennar Homes had completed and conveyed 121 of the 126 planned homes to individual homeowners. As of such date, Lennar Homes owned three model homes and two homes under construction (one of which was over 95 percent complete), all of which were in escrow. Home sizes within the Trailhead product line range from approximately 1,769 to 2,767 square feet. Actual sales prices for the closed homes have ranged from approximately $433,400 to $649,030. The contract prices for the homes in escrow range from $512,605 to $647,560.

No assurance can be given that home construction and sales will be carried out on the schedule and according to the plans outlined herein, or that the home construction and sale plans or prices set forth above will not change after the date of this Official Statement. Additionally, homes sold may not result in closed escrows as sales contracts are subject to cancellation. In changing market conditions, builders will often revise the product lines and prices and the rate of sales can fluctuate. Lennar Homes continuously evaluates its product lines and prices in light of the then current market conditions. See “SPECIAL RISK FACTORS” herein for a discussion of risk factors.

Lennar Homes
General. As previously defined in this Official Statement, "Lennar Homes" is Lennar Homes of California, LLC, a California limited liability company, which is based in Irvine, California and has been in the business of developing residential real estate communities in California since 1996. Lennar Homes is wholly- owned by U.S. Home, LLC, a Delaware limited liability company (“U.S. Home”). U.S. Home is wholly-owned by Lennar Corporation, which is based in Miami, Florida (“Lennar Corporation”). Founded in 1954, Lennar Corporation completed its initial public offering in 1971 and listed its common stock on the New York Stock Exchange in 1972. Lennar Corporation’s Class A and Class B common stock are listed on the New York Stock Exchange under the symbols “LEN” and “LEN.B.” respectively. Lennar Corporation is one of the largest homebuilders in the United States based on home sales revenues and net earnings, and operates under a number of brand names, including Lennar Homes and U.S. Home. Lennar Corporation primarily develops residential communities both within the Lennar Corporation family of builders and through consolidated and unconsolidated partnerships in which Lennar Corporation maintains an interest.

Lennar Corporation is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and, in accordance therewith, files reports, proxy statements, and other information, including financial statements, with the Securities and Exchange Commission (the “SEC”). Such filings, particularly Lennar Corporation’s annual report on Form 10-K and its most recent quarterly report on Form 10-Q, may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such filings can also be accessed over the internet at the SEC’s website at www.sec.gov. This internet address is included for reference only and the information on the internet site is not a part of this Official Statement and is not incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on the internet site.

Copies of Lennar Corporation’s annual report and related financial statements are available from Lennar Corporation’s website at www.Lennar.com. This internet address is included for reference only and the Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 49
Menifee Mayor and City Council
January 18, 2023
Page
778 of 1063

29 4878-9308-7290v8/200299-0014
information on the internet site is not a part of this Official Statement and is not incorporated by reference into this Official Statement.

Financing Plan. To date, Lennar Homes has financed its land acquisition and various site development costs related to its property in the District through internally generated funds. Development within the District is substantially complete. As of November 10, 2022, Lennar Homes expected to incur approximately $1.4 million on remaining homebuilding and closeout costs for its project in the District. Lennar Homes expects to use home sales revenues and internal funding to complete its development within the District, and believes that it will have sufficient funds available to complete its planned development as described in this Official Statement.

Although Lennar Homes expects to have sufficient funds available to complete its development in the District as described in this Official Statement, there can be no assurance that amounts necessary to finance the development costs will be available from Lennar Homes, Lennar Corporation or any other source when needed.

Neither Lennar Corporation, nor any of its subsidiaries or related entities are under any legal obligation of any kind to expend funds for the development of and construction of homes on its property in the District. Any contributions by Lennar Homes or Lennar Corporation to fund the costs of such development are entirely voluntary.

Except as described in this Official Statement and except for those remaining consents, permits, authorizations, certifications and approvals of governmental entities required in the ordinary course of development, Lennar Homes has no actual knowledge of any impediment to construction which could be reasonably expected to have a material adverse effect on its ability to complete the planned development of its property within the District as described in the Official Statement. Although the information in this Official Statement reflects the current development expectations of Lennar Homes, no assurance can be given that home construction and sales will be carried out on the schedule and according to the plans described herein, or that the home construction and sale plans or base prices set forth herein will not change after the date of this Official Statement. Lennar Homes reserves the right to change its development at any time without notice. Additionally, homes under contract to be sold may not result in closed escrows as sales contracts are subject to cancellation.

SPECIAL RISK FACTORS
The 2023 Bonds have not been rated by any rating agency, and the purchase of the 2023 Bonds involves significant risks that are not appropriate for certain investors. The following is a discussion of certain risk factors which should be considered, in addition to other matters set forth herein, in evaluating the investment quality of the 2023 Bonds. This discussion does not purport to be comprehensive or definitive and does not purport to be a complete statement of all factors which may be considered as risks in evaluating the credit quality of the 2023 Bonds. The occurrence of one or more of the events discussed herein could adversely affect the ability or willingness of property owners in the District to pay their Special Taxes when due. Such failures to pay Special Taxes could result in the inability of the District to make full and punctual payments of debt service on the 2023 Bonds. In addition, the occurrence of one or more of the events discussed herein could adversely affect the value of the property in the District. See “— Property Values” below.

Risks of Real Estate Secured Investments Generally
The 2023 Bond Owners will be subject to the risks generally incident to an investment secured by real estate, including, without limitation: (i) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of the District, the supply of or demand for competitive properties in such area, and the market value of residential property or buildings and/or sites in the event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, governmental rules (including, without limitation, zoning laws and laws relating to endangered species and hazardous materials) and fiscal policies; (iii) natural disasters (including, without limitation, earthquakes, wildfires and floods), which may result in uninsured losses; (iv) adverse changes in local market conditions; and (v) increased delinquencies due to rising mortgage costs and other factors.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 50
Menifee Mayor and City Council
January 18, 2023
Page
779 of 1063

30 4878-9308-7290v8/200299-0014
No assurance can be given that the property owners within the District will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See the caption “— Enforcement Delays — Bankruptcy” for a discussion of certain limitations on the District’s ability to pursue judicial proceedings with respect to delinquent parcels.

Insufficiency of Special Tax Revenues
As discussed below, the Special Taxes may not produce revenues sufficient to pay the debt service on the 2023 Bonds due to nonpayment of the amounts levied.

In order to pay debt service on the 2023 Bonds, it is generally necessary that the Special Taxes be paid in a timely manner. Should the Special Taxes not be paid on time, the District has established a Reserve Account under the Indenture to be maintained in an amount equal to the Reserve Requirement to pay debt service on the Bonds to the extent other funds are not available. See “SOURCES OF PAYMENT FOR THE BONDS — Reserve Account of the Special Tax Fund.” The District has covenanted in the Indenture to maintain in the Reserve Account an amount equal to the Reserve Requirement, subject, however, to the availability of Net Taxes in amounts sufficient to do so and to the limitation that the District may not levy the Special Tax in any Fiscal Year at a rate in excess of the maximum amounts permitted under the Rate and Method. See Appendix A and Appendix E hereto. As a result, if a significant number of Special Tax delinquencies occurs within the District, the District could be unable to replenish the Reserve Account to the Reserve Requirement due to the limitations on the amount of the Special Tax that may be levied. If such defaults were to continue in successive years, the Reserve Account could be depleted and a default on the 2023 Bonds could occur.

The Act provides that, if any property within the District not otherwise exempt from the Special Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax will continue to be levied on and enforceable against the public entity that acquired the property. In addition, the Act provides that, if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment and be paid from the eminent domain award. The constitutionality and operation of these provisions of the Act have not been tested in the courts, but it is doubtful that they would be upheld as to, for example, property owned by the federal government. If for any reason property within the District becomes exempt from taxation by reason of ownership by a non-taxable entity such as the federal government or another public agency, subject to the limitation of the Maximum Special Tax, the Special Tax will be reallocated to the remaining taxable parcels within the District. This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon their willingness and/or ability to pay the Special Tax. Moreover, if a substantial portion of additional land within the District became exempt from the Special Tax because of public ownership, or otherwise, the Maximum Special Tax which could be levied upon the remaining acreage might not be sufficient to pay principal of and interest on the 2023 Bonds when due and a default will occur with respect to the payment of such principal and interest.

The District has covenanted in the Indenture that, under certain circumstances, it will institute foreclosure proceedings to sell any property with delinquent Special Taxes in order to obtain funds to pay debt service on the Bonds. If foreclosure proceedings were ever instituted, any mortgage or deed of trust holder could, but would not be required to, advance the amount of the delinquent Special Tax to protect its security interest. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales” for provisions which apply in the event of such foreclosure and which the District is required to follow in the event of delinquencies in the payment of the Special Tax.

In the event that sales or foreclosures of property are necessary, there could be a delay in payments to Owners of the 2023 Bonds (if the Reserve Account has been depleted) pending such sales or the prosecution of such foreclosure proceedings and receipt by the City on behalf of the District of the proceeds of sale. The District may adjust the future Special Tax levied on taxable parcels in the District, subject to limitations described above under the caption “THE DISTRICT — Rate and Method of Apportionment,” to provide an amount required to Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 51
Menifee Mayor and City Council
January 18, 2023
Page
780 of 1063

31 4878-9308-7290v8/200299-0014
pay interest on and principal of the Bonds, and the amount, if any, necessary to replenish the Reserve Account to an amount equal to the Reserve Requirement, and to pay all current expenses. There is, however, no assurance that the total amount of the Special Tax that could be levied and collected against taxable parcels in the District will be at all times sufficient to pay the amounts required to be paid by the Indenture, even if the Special Tax is levied at the Maximum Special Tax rates. See “— Enforcement Delays — Bankruptcy.” No assurance can be given that the real property subject to sale or foreclosure will be sold, or if sold, that the proceeds of sale will be sufficient to pay any delinquent installments of the Special Tax. The Act does not require the City to purchase or otherwise acquire any lot or parcel of property to be sold at foreclosure if there is no other purchaser at such sale. The Act and the Indenture do specify that the Special Tax will have the same lien priority as for ad valorem property taxes in the case of delinquency. Section 53356.6 of the Act requires that property sold pursuant to foreclosure under the Act be sold for not less than the amount of judgment in the foreclosure action, plus post judgment interest and authorized costs, unless the consent of the owners of 75% of the Outstanding Bonds and any Parity Bonds is obtained.

Prior to July 1, 1983, the right of redemption from foreclosure sales was limited to a period of one year from the date of sale. Under legislation effective July 1, 1983, the statutory right of redemption from such foreclosure sales has been repealed. However, a period of 20 days must elapse after the date on which the notice of levy of the interest in real property was served on the judgment debtor before the sale of such lot or parcel can be made. Furthermore, if the purchaser at the sale is the judgment creditor (e.g., the District), an action may be commenced by the delinquent property owner within 90 days after the date of sale to set aside such sale. The constitutionality of the aforementioned legislation, which repeals the one year redemption period, has not been tested and there can be no assurance that, if tested, such legislation will be upheld. (Section 701.680 of the Code of Civil Procedure of the State.)
Property Values
The value of the property within the District is a critical factor in determining the investment quality of the 2023 Bonds. If a property owner is delinquent in the payment of Special Taxes, the District’s only remedy is to commence foreclosure proceedings against the delinquent parcel in an attempt to obtain funds to pay the Special Taxes. Reductions in property values due to a downturn in the economy, physical events such as earthquakes, fires or floods, stricter land use regulations, delays in development or other events will adversely impact the security underlying the Special Taxes. See “THE DISTRICT — Appraisal Report” and Appendix D — “APPRAISAL REPORT.”
The Appraiser has estimated, on the basis of certain assumptions and limiting conditions contained in the Appraisal Report, that as of the Date of Value, the market value of the land and improvements within the District was approximately $138,733,314. See “THE DISTRICT — Appraisal Report.” The Appraisal Report indicates the Appraiser’s opinion as to the market value of the properties referred to therein as of the date and under the conditions specified therein. The Appraiser’s opinion reflects conditions prevailing in the applicable market as of the Date of Value. The Appraiser’s opinion does not predict the future value of the subject property, and there can be no assurance that market conditions will not change adversely in the future.

Prospective purchasers of the 2023 Bonds should not assume that the taxable land within the District could be sold for the appraised amount or for the assessed values at a foreclosure sale for delinquent Special Taxes. In arriving at the estimate of market value of the property in the District, the Appraiser assumes that any sale will be unaffected by undue stimulus and will occur following a reasonable marketing period, which is not always present in a foreclosure sale. See Appendix D for a description of other assumptions made by the Appraiser and for the definitions and limiting conditions used by the Appraiser. Any event which causes one of the Appraiser’s assumptions to be untrue could result in a reduction of the value of the taxable land and improvements within the District from the market value estimated by the Appraiser.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 52
Menifee Mayor and City Council
January 18, 2023
Page
781 of 1063

32 4878-9308-7290v8/200299-0014
No assurance can be given that any bid will be received for a parcel with delinquent Special Taxes offered for sale at foreclosure or, if a bid is received, that such bid will be sufficient to pay all delinquent Special Taxes. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.”
Natural Disasters
The District, like all California communities, may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. Southern California is a seismically active area. Seismic activity represents a potential risk for damage to buildings, roads, bridges and property within the District. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event. The property within the District is not located in an Alquist-Priolo Earthquake Study Zone and is not located within one-half mile of an active earthquake fault. Additionally, the District is not located in a flood plain area.

In recent years, wildfires have caused extensive damage throughout the State, including within the County. Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes. In some instances entire neighborhoods have been destroyed. Several fires in recent years damaged or destroyed property in areas that were not previously considered to be at risk from such events.

The District is not located in an area which the Department of Forestry and Fire Protection of the State of California has designated as a high fire hazard severity zone. However, there is a risk of residential property within the District being destroyed by wildfires and no assurance can be given as to the severity or frequency of wildfires within the vicinity of the District. Additionally, property located adjacent to burn areas can be subject to mudslides and flooding, which can cause significant damage and destruction to property.

In the event of a severe earthquake, fire, flood or other natural disaster, there may be significant damage to both property and infrastructure in the District. As a result, a substantial portion of the property owners may be unable or unwilling to pay the Special Taxes when due. In addition, the value of land in the District could be diminished in the aftermath of such a natural disaster, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Special Taxes.

Hazardous Substances
While government taxes, assessments and charges are a common claim against the value of a parcel, other less common claims may also be relevant. One of the most serious in terms of the potential reduction in the value of a parcel is a claim with regard to a hazardous substance. In general, the owners and operators of a parcel may be required by law to remedy conditions relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Super Fund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar in effect. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of a parcel whether or not the owner (or operator) had anything to do with creating or handling the hazardous substance.

The effect, therefore, should any of the parcels within the District be affected by a hazardous substance, is to reduce the marketability and value by the costs of remedying the condition.

The District is not aware of the presence of any federally or state classified hazardous substances in violation of any environmental laws, located on the property within the District. However, it is possible that such materials do currently exist and that the District is not aware of them.

It is possible that property in the District may be liable for hazardous substances in the future as a result of the existence, currently, of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or the existence, currently, on the property of a substance not presently classified as hazardous but which may in the future be so classified. Additionally, such liabilities may Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 53
Menifee Mayor and City Council
January 18, 2023
Page
782 of 1063

33 4878-9308-7290v8/200299-0014
arise not simply from the existence of a hazardous substance but from the method of handling such substance.

All of these possibilities could have the effect of reducing the value of the applicable property.

Enforcement Delays – Bankruptcy
In the event of a delinquency in the payment of the Special Taxes, the District is required to commence enforcement proceedings under the circumstances described under the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.” However, prosecution of such proceedings could be delayed due to crowded local court calendars or by bankruptcy, insolvency and other laws generally affecting creditors’ rights (such as the Soldiers’ and Sailors’ Relief Act of 1940) and by the laws of the State relating to judicial and non-judicial foreclosure. Although bankruptcy proceedings would not cause the liens of the Special Taxes to become extinguished, bankruptcy of a person or entity with an interest in the applicable property could result in a delay in the enforcement proceedings because federal bankruptcy laws provide for an automatic stay of foreclosure and tax sale proceedings. Any such delay could increase the likelihood of delay or default in payment of the principal of and interest on the applicable 2023 Bonds. The various legal opinions to be delivered in connection with the issuance of the 2023 Bonds, including Bond Counsel’s approving legal opinion, are qualified as to the enforceability of the 2023 Bonds and the Indenture by reference to bankruptcy, reorganization, moratorium, insolvency and other laws affecting the rights of creditors generally or against public entities such as the District.

Special Tax Delinquencies
Under provisions of the Act, the Special Taxes, from which funds necessary for the payment of principal of, and interest on, the Bonds are derived, will be billed to the properties within the District on the regular ad valorem property tax bills sent to owners of such properties by the County Tax Collector. The Act currently provides that such Special Tax installments are due and payable, and bear the same penalties and interest for non-payment, as do ad valorem property tax installments.

See APPENDIX E — “SUMMARY OF THE INDENTURE — COVENANTS AND WARRANTY — Covenants” for a discussion of the provisions which apply, and procedures which the District is obligated to follow under the Indenture, in the event of delinquencies in the payment of Special Taxes. See “— FDIC/Federal Government Interests in Parcels” for a discussion of the policy of the Federal Deposit Insurance Corporation regarding the payment of special taxes and assessment and limitations on the District’s ability to foreclose on the lien of the Special Taxes in certain circumstances.

FDIC/Federal Government Interests in Parcels
The ability of the District to collect interest and penalties specified by the Act and to foreclose the lien of delinquent Special Taxes may be limited in certain respects with regard to parcels in which the Federal Deposit Insurance Corporation (the “FDIC”), or other federal government entities such as Fannie Mae or Freddie Mac, has or obtains an interest.

In the case of the FDIC, in the event that any financial institution making a loan which is secured by parcels is taken over by the FDIC and the applicable Special Tax is not paid, the remedies available to the District may be constrained. The FDIC’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”) provides that taxes other than ad valorem taxes which are secured by a valid lien in effect before the FDIC acquired an interest in a property will be paid unless the FDIC determines that abandonment of its interests is appropriate. The Policy Statement provides that the FDIC generally will not pay installments of non-ad valorem taxes which are levied after the time the FDIC acquires its fee interest, nor will the FDIC recognize the validity of any lien to secure payment except in certain cases where the Resolution Trust Corporation had an interest in property on or prior to December 31, 1995. Moreover, the Policy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, the FDIC will not permit its lien Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 54
Menifee Mayor and City Council
January 18, 2023
Page
783 of 1063

34 4878-9308-7290v8/200299-0014
to be foreclosed out by a taxing authority without its specific consent, nor will the FDIC pay or recognize liens for any penalties, fines or similar claims imposed for the nonpayment of taxes.

The FDIC has taken a position similar to that expressed in the Policy Statement in legal proceedings brought against Orange County in United States Bankruptcy Court and in Federal District Court. The Bankruptcy Court issued a ruling in favor of the FDIC on certain of such claims. Orange County appealed that ruling, and the FDIC cross-appealed. On August 28, 2001, the Ninth Circuit Court of Appeals issued a ruling favorable to the FDIC except with respect to the payment of pre-receivership liens based upon delinquent property tax.

The District is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency with respect to parcels in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed out at a judicial foreclosure sale would prevent or delay the foreclosure sale.

In the case of Fannie Mae and Freddie Mac, in the event a parcel of taxable property is owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, or a private deed of trust secured by a parcel of taxable property is owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, the ability to foreclose on the parcel or to collect delinquent Special Taxes may be limited. Federal courts have held that, based on the supremacy clause of the United States Constitution “this Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, anything in the Constitution or Laws of any State to the contrary notwithstanding.” In the absence of Congressional intent to the contrary, a state or local agency cannot foreclose to collect delinquent taxes or assessments if foreclosure would impair the federal government interest. This means that, unless Congress has otherwise provided, if a federal government entity owns a parcel of taxable property but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.

Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the District wishes to foreclose on the parcel as a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government’s mortgage interest. For a discussion of risks associated with taxable parcels within the District becoming owned by the federal government, federal government entities or federal government sponsored entities, see “—Insufficiency of Special Tax Revenues.”
The District’s remedies may also be limited in the case of delinquent Special Taxes with respect to parcels in which other federal agencies (such as the Internal Revenue Service and the Drug Enforcement Administration) have or obtain an interest.

Direct and Overlapping Indebtedness
The ability of an owner of property within the District to pay the applicable Special Taxes could be affected by the existence of other taxes and assessments imposed upon taxable parcels. See “THE DISTRICT — Direct and Overlapping Debt” herein. The City and other public agencies whose boundaries overlap those of the District could impose additional taxes or assessment liens on the property within the District in order to finance public improvements or services to be located or provided inside of or outside of such area. The lien created on the property within the District through the levy of such additional taxes may be on a parity with the lien of the Special Taxes applicable to the property within the District.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 55
Menifee Mayor and City Council
January 18, 2023
Page
784 of 1063

35 4878-9308-7290v8/200299-0014
The imposition of additional liens on a parity with the Special Taxes may reduce the ability or willingness of property owners to pay the Special Taxes and increase the possibility that foreclosure proceeds will not be adequate to pay delinquent Special Taxes.

Payment of Special Taxes is not a Personal Obligation of the Property Owners An owner of a taxable parcel is not personally obligated to pay Special Taxes. Rather, Special Taxes are an obligation which is secured only by a lien against the taxable parcel. If the value of a taxable parcel is not sufficient, taking into account other liens imposed by public agencies, to secure fully Special Taxes, the District has no recourse against the property owner.

No Acceleration Provision
The 2023 Bonds do not contain a provision allowing for the acceleration of the 2023 Bonds in the event of a payment default or other default under the terms of the 2023 Bonds or the Indenture.

Limited Obligations
The Bonds and interest thereon are not payable from the general funds of the City. Except with respect to the Net Taxes, neither the credit nor the taxing power of the District or the City is pledged for the payment of the Bonds or the interest thereon, and, except as provided in the Indenture, no Owner of the Bonds may compel the exercise of any taxing power by the District or the City or force the forfeiture of any City or District property.

The principal of, premium, if any, and interest on the Bonds are not a debt of the City or a legal or equitable pledge, charge, lien or encumbrance upon any of the City’s or the District’s property or upon any of the City’s or the District’s income, receipts or revenues, except the Net Taxes and other amounts pledged under the Indenture.

The District’s legal obligations with respect to any delinquent Special Taxes are limited to: (i) payments from the Reserve Account to the extent of funds on deposit therein; and (ii) the institution of judicial foreclosure proceedings under certain circumstances with respect to any parcels for which Special Taxes are delinquent. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.” The Bonds cannot be accelerated in the event of any default.

The obligation to pay Special Taxes does not constitute a personal obligation of the current or subsequent owners of the respective parcels which are subject to such liens. See the caption “— Payment of the Special Tax is Not a Personal Obligation of the Property Owners.” Enforcement of Special Tax payment obligations by the District is limited to judicial foreclosure in the Superior Court of California, County of Riverside. There is no assurance that any current or subsequent owner of a parcel subject to a Special Tax lien will be able to pay the amounts due or that such owner will choose to pay such amounts even though financially able to do so.

Failure by owners of the parcels to pay Special Tax installments when due, delay in foreclosure proceedings, or the inability of the District to sell parcels that have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of Special Taxes levied against such parcels may result in the inability of the District to make full or timely payments of debt service on the Bonds, which may in turn result in the depletion of the Reserve Account. See the caption “— Enforcement Delays — Bankruptcy.” Ballot Initiatives
Articles XIII A, XIII B, XIII C, and XIII D of the California Constitution were adopted pursuant to measures qualified for the ballot pursuant to the State’s constitutional initiative process. From time to time, other initiative measures could be adopted by California voters. The adoption of any such initiative might place Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 56
Menifee Mayor and City Council
January 18, 2023
Page
785 of 1063

36 4878-9308-7290v8/200299-0014
limitations on the ability of the State, the City, or other local agencies to increase revenues or to increase appropriations.

Proposition 218
An initiative measure entitled “The Right to Vote on Taxes Act” (“Proposition 218”) was approved by the voters at the November 5, 1996 statewide general election. Among other things, Proposition 218 added a new Article XIII C to the California Constitution which states that “. . . the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.” The Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the rate and method of apportionment of an existing special tax. However, the Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislative body determines that the reduction or termination of the special tax would not interfere with the timely retirement of that debt. While the application of Proposition 218 in this context has not yet been interpreted by the courts and the matter is not completely free from doubt, it is not likely that Proposition 218 has conferred on the voters the power to effect a repeal or reduction of the Special Tax if the result thereof would be to impair the security of the 2023 Bonds.

It may be possible, however, for voters or the City Council, acting as the legislative body of the District, to reduce the Special Taxes in a manner which does not interfere with the timely repayment of the Bonds, but which does reduce the maximum amount of Special Taxes that may be levied in any year below the existing levels. Therefore, no assurance can be given with respect to the future levy of Special Taxes in amounts greater than the amount necessary for the timely retirement of the Bonds. Nevertheless, to the maximum extent that the law permits it to do so, the District has covenanted that it will not initiate proceedings under the Act to reduce the maximum Special Tax rates for the District, unless, in connection therewith, the District receives a certificate from one or more Independent Financial Consultants which, when taken together, certify that: (i) such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the District to an amount which is less than the Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such proposed reduction; and (ii) the District is not delinquent in the payment of the principal of or interest on the Bonds or any Parity Bonds. The District has also covenanted that, in the event an initiative is adopted which purports to reduce or otherwise alter the Rate and Method, it will commence and pursue legal action in order to preserve its ability to comply with the foregoing covenant. However, no assurance can be given as to the enforceability of the foregoing covenants.

Litigation with Respect to Community Facilities Districts Shapiro. The California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in City of San Diego v. Melvin Shapiro (2014) 228 Cal.App.4th 756 (the “San Diego Decision”). The case involved a Convention Center Facilities District (the “CCFD”) established by the City of San Diego (“San Diego”). The CCFD is a financing district much like a community facilities district established under the provisions of the Act. The CCFD is comprised of all of the real property in San Diego. However, the special tax to be levied within the CCFD was to be levied only on hotel properties located within the CCFD.

The election authorizing the special tax was limited to owners of hotel properties and lessees of real property owned by a governmental entity on which a hotel is located. Thus, the election was not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was modeled after Section 53326(c) of the Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed district whose property would be subject to the special tax. The Court held that the CCFD special tax election was invalid under the California Constitution because Article XIIIA, Section 4 thereof and Article XIIIC, Section 2 thereof require that the electors in such an election be the registered voters within the district.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 57
Menifee Mayor and City Council
January 18, 2023
Page
786 of 1063

37 4878-9308-7290v8/200299-0014
Horizon. The Sacramento County Superior Court had issued a tentative ruling in Horizon Capital Investments, LLC v. City of Sacramento et al. (Case No. 34-2017-80002661). That ruling subsequently became the court’s final order. As described below, this case involved an election to approve the levy of a special tax within a community facilities district (“CFD”) formed under the Act.

In 2017, the City of Sacramento initiated proceedings to form a CFD to finance certain costs to operate and maintain a streetcar line. As permitted by the Act, the proposed district included non-contiguous parcels of non-residential property. Because there were fewer than 12 registered voters residing within the territory of the proposed CFD, the City Council submitted the special tax proposed to be levied within the proposed CFD to the owners of land within the proposed CFD, as required by the Act. The proposed special tax received the requisite two-thirds vote in the landowner election.

Petitioners Horizon Capital Investments, LLC et al. filed a writ of mandate and complaint for reverse validation and declaratory relief. Petitioners argued, and the superior court agreed in its final ruling, that under section 4(a) of article XIII A of the California Constitution (which provides that “Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district [sic], may impose special taxes on such district…”) the phrase “qualified electors” means the registered voters of the entire City of Sacramento and not just the owners of the property within the boundaries of the proposed CFD. Citing the San Diego Decision, the tentative ruling states that the phrase “qualified electors of the district” refers to the registered voters of the entity imposing the special tax, which in this case was the City of Sacramento. Because the vote within the proposed CFD was by landowners only and not by all registered voters in the City of Sacramento, the final ruling states that the special tax is invalid.

The superior court’s final ruling is not binding upon other courts within the State and does not directly apply to the District, the Special Taxes, or the Bonds. The City of Sacramento did not appeal the superior court’s ruling.

The Special Tax Election in the District. With respect to the San Diego Decision, the facts of such case show that there were thousands of registered voters within the CCFD (viz., all of the registered voters in San Diego). The elections held in the District had less than 12 registered voters at the time of the election to authorize the Special Taxes. In the San Diego Decision, the court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the court’s holding in the San Diego Decision does not apply to the Special Tax election in the District. Moreover, Section 53341 of the Act provides that any “action or proceeding to attack, review, set aside, void or annul the levy of a special tax…shall be commenced within 30 days after the special tax is approved by the voters.” Similarly, Section 53359 of the Act provides that any action to determine the validity of bonds issued pursuant to the Act be brought within 30 days of the voters approving the issuance of such bonds. The petitioners in Horizon filed the writ of mandate within 30 days of the landowner election.

Voters in the District approved Special Tax on August 5, 2020. Based on Sections 53341 and 53359 of the Act and analysis of existing laws, regulations, rulings and court decisions, the District believes that no successful challenge to the Special Tax being levied in accordance with the Rate and Method may now be brought. In connection with the issuance of the 2023 Bonds, Bond Counsel expects to deliver its opinion in the proposed form attached hereto as Appendix C.

Loss of Tax Exemption
As discussed under the heading “TAX MATTERS,” interest on the 2023 Bonds could cease to be excluded from gross income for purposes of federal income taxation, retroactive to the date the 2023 Bonds were issued, as a result of future acts or omissions of the District or the City. In addition, it is possible that future changes in applicable federal tax laws could cause interest on the 2023 Bonds to be included in gross income for federal income taxation or could otherwise reduce the equivalent taxable yield of such interest and thereby reduce the value of the 2023 Bonds.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 58
Menifee Mayor and City Council
January 18, 2023
Page
787 of 1063

38 4878-9308-7290v8/200299-0014
No Ratings – Limited Secondary Market
The District has not applied to have the 2023 Bonds rated by any nationally recognized bond rating company, and it does not expect to do so in the future.

There can be no guarantee that there will be a secondary market for the 2023 Bonds or, if a secondary market exists, that such 2023 Bonds can be sold for any particular price. Although the District has committed to provide certain financial and operating information, there can be no assurance that such information will be available to 2023 Bond owners on a timely basis. The failure to provide the required annual financial information does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions, lack of current information, the absence of a credit rating for the 2023 Bonds or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.

Limitations on Remedies
Remedies available to the Owners of the 2023 Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Bonds or to preserve the tax-exempt status of interest on the 2023 Bonds.

Bond Counsel has limited its opinion as to the enforceability of the 2023 Bonds and of the Indenture to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or other similar laws affecting generally the enforcement of creditor’s rights, by equitable principles and by the exercise of judicial discretion and by limitations on remedies against public agencies in the State of California. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the Owners.

Potential Early Redemption of 2023 Bonds from Prepayments or Community Facilities District Bond Proceeds
Property owners within the District are permitted to prepay their Special Taxes at any time. Such prepayments could also be made from the proceeds of bonds issued by or on behalf of an overlapping community facilities district. Such prepayments will result in a redemption of the 2023 Bonds on the Interest Payment Date for which timely notice may be given under the Indenture following the receipt of the prepayment. The resulting redemption of 2023 Bonds that were purchased at a price greater than par could reduce the otherwise expected yield on such Bonds. See the caption “THE 2023 BONDS — Redemption — Special Mandatory Redemption from Special Tax Prepayments.”
Cybersecurity
The City, like many other public and private entities, rely on computer and other digital networks and systems to conduct their operations. The City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the efforts of the City to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City, or the administration of the 2023 Bonds. The City is also reliant on other entities and service providers in connection with the administration of the 2023 Bonds, including without limitation, the County tax collector for the levy and collection of Special Taxes and the Trustee. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the levy and collection of Special Taxes or the payment of debt service on the 2023 Bonds.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 59
Menifee Mayor and City Council
January 18, 2023
Page
788 of 1063

39 4878-9308-7290v8/200299-0014

CONTINUING DISCLOSURE
Pursuant to a Continuing Disclosure Certificate, dated as of February 1, 2023 (the “Disclosure Certificate”), to be executed and delivered by the District at the time of issuance of the 2023 Bonds, the District will covenant for the benefit of the holders and Beneficial Owners of the 2023 Bonds to provide certain financial information and operating data relating to the District by March 1 following the end of the District’s Fiscal Year (currently its Fiscal Year ends on June 30) (the “Annual Report”), commencing with the Annual Report for the Fiscal Year ending June 30, 2022, and to provide notices of the occurrence of certain enumerated events. The initial Annual Report to be filed by March 1, 2023, shall consist of this Official Statement and audited financial statements of the District, if any. The Annual Report and the notices of enumerated events will be filed by the District with EMMA. The specific nature of the information to be contained in the Annual Report and the notice of enumerated events is set forth in Appendix F — “FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Underwriter in complying with subsection (b)(5) of Rule 15c2-12.

The District has not had any continuing disclosure undertakings outstanding during the previous five- year period. The City has retained Spicer Consulting Group, LLC to serve as Dissemination Agent for the continuing disclosure undertaking related to the 2023 Bonds, and has adopted policies and procedures with respect to its continuing disclosure practices.

TAX EXEMPTION
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest on the 2023 Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. However, it should be noted that for tax years beginning after December 31, 2022, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), generally certain corporations with more than $1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) with respect to the 2023 Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed by Section 55 of the Code on such corporations. In the further opinion of Bond Counsel, interest on the 2023 Bonds is exempt from State of California personal income tax.

The excess of the stated redemption price at maturity of a 2023 Bond over the issue price of a 2023 Bond (the first price at which a substantial amount of the 2023 Bonds of a maturity is to be sold to the public) constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Beneficial Owner before receipt of cash attributable to such excludable income.

The amount of original issue discount deemed received by the Beneficial Owner will increase the Beneficial Owner’s basis in the applicable 2023 Bond.

Bond Counsel’s opinion as to the exclusion from gross income of interest (and original issue discount) on the 2023 Bonds is based upon certain representations of fact and certifications made by the District, the City and others and is subject to the condition that the District, the City and others making such representations comply with all requirements of the Code that must be satisfied subsequent to the issuance of the 2023 Bonds to assure that interest (and original issue discount) on the 2023 Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause the interest (and original issue discount) on the 2023 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the 2023 Bonds. The District and the City will covenant to comply with all such requirements.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 60
Menifee Mayor and City Council
January 18, 2023
Page
789 of 1063

40 4878-9308-7290v8/200299-0014
The amount by which a Beneficial Owner’s original basis for determining loss on sale or exchange in the applicable 2023 Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable 2023 Bond premium, which must be amortized under Section 171 of the Code; such amortizable Bond premium reduces the Beneficial Owner’s basis in the applicable 2023 Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of 2023 Bond premium may result in a Beneficial Owner realizing a taxable gain when a 2023 Bond is sold by the Beneficial Owner for an amount equal to or less (under certain circumstances) than the original cost of the 2023 Bond to the Beneficial Owner. Purchasers of the 2023 Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable 2023 Bond premium.

The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing of tax- exempt bond issues, including both random and targeted audits. It is possible that the 2023 Bonds will be selected for audit by the IRS. It is also possible that the market value of the 2023 Bonds might be affected as a result of such an audit of the 2023 Bonds (or by an audit of other similar bonds). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation thereof) subsequent to the issuance of the 2023 Bonds to the extent that it adversely affects the exclusion from gross income of interest (and original issue discount) on the 2023 Bonds or their market value.

SUBSEQUENT TO THE ISSUANCE OF THE 2023 BONDS THERE MIGHT BE FEDERAL,

STATE, OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY CHANGES TO OR

INTERPRETATIONS OF FEDERAL, STATE, OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE, OR LOCAL TAX TREATMENT OF THE 2023 BONDS INCLUDING THE IMPOSITION OF ADDITIONAL

FEDERAL INCOME OR STATE TAXES BEING IMPOSED ON OWNERS OF TAX-EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE 2023 BONDS. THESE CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE 2023 BONDS. NO ASSURANCE CAN BE GIVEN THAT SUBSEQUENT TO THE ISSUANCE OF THE 2023 BONDS STATUTORY CHANGES WILL

NOT BE INTRODUCED OR ENACTED OR JUDICIAL OR REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE 2023 BONDS, ALL POTENTIAL PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS

REGARDING POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE 2023 BONDS.

Bond Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the 2023 Bonds. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture and the Tax Certificate relating to the 2023 Bonds permit certain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the effect on the exclusion from gross income of interest (and original issue discount) on the 2023 Bonds for federal income tax purposes with respect to any 2023 Bond if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca Carlson & Rauth, a Professional Corporation.

Although Bond Counsel will render an opinion that interest (and original issue discount) on the 2023 Bonds is excluded from gross income for federal income tax purposes provided that the District and the City continue to comply with certain requirements of the Code, the ownership of the 2023 Bonds and the accrual or receipt of interest (and original issue discount) with respect to the 2023 Bonds may otherwise affect the tax liability of certain persons. Bond Counsel expresses no opinion regarding any such tax consequences.

Accordingly, before purchasing any of the 2023 Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the 2023 Bonds.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 61
Menifee Mayor and City Council
January 18, 2023
Page
790 of 1063

41 4878-9308-7290v8/200299-0014
Should interest on the 2023 Bonds (including any original issue discount) become includable in gross income for federal income tax purposes, the 2023 Bonds are not subject to early redemption and will remain outstanding until maturity or until redeemed in accordance with the Indenture.

A copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix C.

LEGAL OPINION
The legal opinion of Bond Counsel approving the validity of the 2023 Bonds, in substantially the form set forth as Appendix C hereto, will be made available to purchasers of the 2023 Bonds at the time of original delivery of the 2023 Bonds. Certain legal matters will be passed upon for the City and the District by Rutan & Tucker, LLP, Irvine, California, City Attorney, and for the District by Stradling Yocca Carlson & Rauth, a Professional Corporation, Disclosure Counsel, for the Underwriter by Kutak Rock LLP, Irvine, California, and for the Trustee by its counsel. Bond Counsel undertakes no responsibility to the purchasers of the 2023 Bonds for the accuracy, completeness or fairness of this Official Statement.

ABSENCE OF LITIGATION
In connection with the issuance of the 2023 Bonds, the City Attorney will deliver an opinion to the effect that, to their actual knowledge, after due inquiry and investigation, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body, pending or threatened, or any unfavorable decision, ruling or finding, against or affecting the District, which would adversely impact the District’s ability to complete the transactions described in, or contemplated by, the Indenture or this Official Statement, restrain or enjoin the collection of the Special Taxes, or in any way contest or affect the validity of the 2023 Bonds, the Indenture, the Special Taxes, or the transactions described herein.

NO RATING
The District has not made, and does not contemplate making, an application to any rating organization for the assignment of a rating on the 2023 Bonds.

UNDERWRITING
The 2023 Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”).

The Underwriter has agreed to purchase the 2023 Bonds at a price of $_________ (being the $___________ aggregate principal amount of the 2023 Bonds, less an Underwriter’s discount of $__________, [plus/less] net original issue [premium/discount] of $__________). The Bond Purchase Agreement relating to the 2023 Bonds provides that the Underwriter will purchase all of the 2023 Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the Bond Purchase Agreement, the approval of certain legal matters by counsel and certain other conditions. The Underwriter’s compensation is contingent upon the successful issuance of the 2023 Bonds.

Under certain circumstances, the Underwriter may offer and sell the 2023 Bonds to certain dealers and others at prices lower or yields higher than those stated on the page immediately following the cover page of this Official Statement. The offering prices may be changed from time to time by the Underwriter.

FINANCIAL INTERESTS
The fees being paid to the Underwriter and its counsel, Bond Counsel, Disclosure Counsel and the Trustee are contingent upon the issuance and delivery of the 2023 Bonds. From time to time, Stradling Yocca Carlson & Rauth, a Professional Corporation, represents the Underwriter on matters unrelated to the 2023 Bonds.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 62
Menifee Mayor and City Council
January 18, 2023
Page
791 of 1063

42 4878-9308-7290v8/200299-0014

MUNICIPAL ADVISOR
The District has retained Urban Futures, Inc., Orange, California, as Municipal Advisor for the sale of the 2023 Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

Urban Futures, Inc., is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities.

MISCELLANEOUS
So far as any statements made in this Official Statement involve matters of opinion, assumptions, projections, anticipated events or estimates, whether or not expressly stated, they are set forth as such and not as presentations of fact, and actual results may differ substantially from those set forth therein. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the Owners of the 2023 Bonds.

The summaries of certain provisions of the 2023 Bonds, statutes and other documents or agreements referred to in this Official Statement do not purport to be complete, and reference is made to each of them for a complete statement of their provisions. Copies are available for review by making requests to the City.

The execution and delivery of this Official Statement by the City Manager of the City has been duly authorized by the City Council of the City acting in its capacity as the legislative body of the District.

COMMUNITY FACILITIES DISTRICT NO. 2020-1
(MCCALL MESA) OF THE CITY OF MENIFEE
By:

Armando G. Villa
City Manager of the City of Menifee
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 63
Menifee Mayor and City Council
January 18, 2023
Page
792 of 1063

A-1
4878-9308-7290v8/200299-0014

APPENDIX A

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
COMMUNITY FACILITIES DISTRICT NO. 2020-1
(MCCALL MESA) OF THE CITY OF MENIFEE
A Special Tax (all capitalized terms not otherwise defined herein are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of the City of Menifee Community Facilities District No. 2020-1 (McCall Mesa) (“CFD No. 2020- 1”). The amount of Special Tax to be levied in each Fiscal Year on an Assessor’s Parcel shall be determined by the City Council of the City of Menifee, acting in its capacity as the legislative body of CFD No. 2020-1, by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded parcel map or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560.
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California. “Administrative Expenses” means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2020-1: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2020-1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2020-1 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2020-1 and any major property owner associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2020-1 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2020-1 for any other administrative purposes of CFD No. 2020-1, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
“Approved Property” means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, (ii) that have an assigned Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) that have not been issued a building permit on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 64
Menifee Mayor and City Council
January 18, 2023
Page
793 of 1063

A-2
4878-9308-7290v8/200299-0014
“Assessor’s Parcel” means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.
“Assessor’s Parcel Map” means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.
“Assessor’s Parcel Number” means that number assigned to an Assessor’s Parcel by the County for purposes of identification.
“Assigned Special Tax” means the Special Tax of that name described in Section D below. “Backup Special Tax” means the Special Tax of that name described in Section D below. “Bonds” means any obligation to repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, to which Special Tax of CFD No. 2020-1 have been pledged.
“Boundary Map” means a recorded map of the CFD which indicates the boundaries of the CFD. “Building Permit” means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include expired or cancelled building permits, or any subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator, provided that following such determination the Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses.
“Building Square Footage” or “BSF” means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, as determined by reference to the Building Permit for such Assessor’s Parcel.
“Calendar Year” means the period commencing January 1 of any year and ending the following December 31. “CFD Administrator” means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement, and providing for the levy and collection of the Special Taxes. “CFD” or “CFD No. 2020-1” means Community Facilities District No. 2020-1 (McCall Mesa) established by the City under the Act.
“City” means the City of Menifee, State of California.
“City Council” means the City Council of the City of Menifee, acting as the legislative body of CFD No. 2020-1.
“Condominium Plan” means a condominium plan pursuant to California Civil Code, Section 4200 et seq. “County” means the County of Riverside, State of California. “Developed Property” means all Assessor’s Parcels that: (i) are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) a Building Permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 65
Menifee Mayor and City Council
January 18, 2023
Page
794 of 1063

A-3
4878-9308-7290v8/200299-0014
“Exempt Property” means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.
“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a Condominium Plan that creates individual lots for which Building Permits may be issued without further subdivision.
“Fiscal Year” means the period commencing on July 1st of any year and ending the following June 30th. “Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.
“Land Use Category” means any of the categories listed in Table 1 of Section D. “Maximum Special Tax” means for each Assessor’s Parcel, the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2020-1 on such Assessor’s Parcel. “Multifamily Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing a building or buildings comprised of attached Residential Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the CFD Administrator.
“Non-Residential Property” means all Assessor’s Parcels of Developed Property for which a Building Permit(s) was issued for a non-residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non-Residential Property.
“Partial Prepayment Amount” means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2.
“Prepayment Amount” means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.
“Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Special Tax is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property or Provisional Undeveloped Property, as applicable. “Provisional Undeveloped Property” means all Assessor’s Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be classified as Exempt Property because to do so would be reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section F.
“Residential Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one or more Residential Units. “Residential Unit” or “RU” means a residential unit that is used or intended to be used as a domicile by one or more persons, as determined by the CFD Administrator.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 66
Menifee Mayor and City Council
January 18, 2023
Page
795 of 1063

A-4
4878-9308-7290v8/200299-0014
“Single Family Residential Property” means all Assessor’s Parcels of Residential Property other than Multifamily Property.
“Special Tax” or “Special Taxes” means any of the special taxes authorized to be levied within CFD No. 2020-1 pursuant to the Act to fund the Special Tax Requirement. “Special Tax Requirement “ means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to replenish any reserve funds established under the Indenture in association with the Bonds to the extent that replenishment has not been included in the computation of the Special Tax Requirement in a previous Fiscal Year, (v) to cure any delinquencies in the amount of principal or interest on the Bonds that occurred in a previous Fiscal Year, and (vi) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2020-1 or the payment of debt services on Bonds anticipated to be issued, provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps Two or Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture. “Taxable Property” means all Assessor’s Parcels within CFD No. 2020-1, which are not Exempt Property. “Taxable Unit” means either a Residential Unit or an Acre. “Trustee” means the trustee, fiscal agent, or paying agent under the Indenture. “Undeveloped Property” means all Assessor’s Parcels of Taxable Property which are not Developed Property, Approved Property, or Provisional Undeveloped Property.

B. SPECIAL TAX
Commencing Fiscal Year 2020-2021 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property, up to the applicable Maximum Special Tax, to fund the Special Tax Requirement.

C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fiscal Year 2020-2021, each Assessor’s Parcel within CFD No. 2020-1 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property.

Assessor’s Parcels of Developed Property shall further be classified as Residential Property or Non-Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as a Single Family Residential Property or Multifamily Property. Each Assessor’s Parcel of Single Family Residential Property shall be further assigned to a Land Use Category based on its Building Square Footage.

In the event that there are parent Assessor’s Parcel(s) for which one or more Building Permits have been issued and the County has not yet assigned final Assessor’s Parcel Number(s) to the lots on which the Residential Unit(s) have been or will be built (in accordance with the Final Map or Condominium Plan) on such parent Assessor’s Parcel for a Fiscal Year, the amount of the Special Tax on such parent Assessor’s Parcel for such Fiscal Year shall be determined as follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax levy for such Assessor’s Parcel, based on the classification of such Assessor’s Parcel as Undeveloped Property; (2) the amount of the Special Tax for the Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Developed Property Special Tax rates and such amounts shall be levied as Developed Property in accordance with Step 1 and, if applicable, Step Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 67
Menifee Mayor and City Council
January 18, 2023
Page
796 of 1063

A-5
4878-9308-7290v8/200299-0014
4 of Section E below; and (3) the amount of the Special Tax levy on the Taxable Property in such Assessor’s Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax rate levied on Undeveloped Property pursuant to Step 3 of Section E below, multiplied by the total of the amount determined in clause (1), less (B) the amount determined in clause (2).

D. MAXIMUM SPECIAL TAX

1. Developed Property
The Maximum Special Tax for each Assessor’s Parcel of Single Family Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax for such Assessor’s Parcel or (ii) the Backup Special Tax.

The Maximum Special Tax for each Assessor’s Parcel of Multifamily Property and Non-Residential Property shall be the applicable Assigned Special Tax described in Table 1 of Section D. a. Assigned Special Tax
Each Fiscal Year, each Assessor’s Parcel of Single Family Residential Property, Multifamily Property or Non-Residential Property shall be subject to an Assigned Special Tax. The Assigned Special Tax for Fiscal Year 2020-2021 applicable to an Assessor’s Parcel of Developed Property shall be determined pursuant to Table 1 below.

TABLE 1

ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2020-2021
Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 1,800 sq. ft $2,405.00

2. Single Family Residential Property RU 1,800 sq. ft to 2,100 sq. ft $2,550.00

3. Single Family Residential Property RU 2,101 sq. ft to 2,400 sq. ft $2,677.00

4. Single Family Residential Property RU 2,401 sq. ft to 2,700 sq. ft $2,864.00

5. Single Family Residential Property RU 2,701 sq. ft to 3,000 sq. ft $3,001.00

6. Single Family Residential Property RU 3,001 sq. ft to 3,300 sq. ft $3,090.00

7. Single Family Residential Property RU 3,301 sq. ft to 3,600 sq. ft $3,179.00

8. Single Family Residential Property RU Greater than 3,600 sq. ft $3,647.00

9. Multifamily Property Acre N/A $17,942.00

10. Non-Residential Property Acre N/A $17,942.00
On each July 1, commencing July 1, 2021, the Assigned Special Tax rate for Developed Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
b. Multiple Land Use Categories
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for each Taxable Unit for all Land Use Categories located on the Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be final.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 68
Menifee Mayor and City Council
January 18, 2023
Page
797 of 1063

A-6
4878-9308-7290v8/200299-0014
c. Backup Special Tax
The Backup Special Tax for an Assessor’s Parcel within a Final Map classified as Single Family Residential Property shall calculated according to the following formula.

B = (U x A) / L
The terms above have the following meanings:

B = Backup Special Tax per Assessor’s Parcel classified or to be classified as Single Family Residential Property within the Final Map.

U = Maximum Special Tax per Acre of Undeveloped Property per Section D.3 below.

A = Acreage of Single Family Residential Property expected to exist in such Final Map at the time of calculation, as determined by the Administrator L = Number of Assessor’s Parcels of Single Family Residential Property expected to exist after build out in such Final Map at the time of calculation, as determined by the Administrator.

In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all Assessor’s Parcels within such changed or modified area shall be $17,942 per Acre.

Notwithstanding the foregoing, the Backup Special Tax for an Assessor’s Parcel of Developed Property for which a certificate of occupancy has been granted may not be revised.

In the event any superseding Final Map is recorded as a Final Map within the boundaries of the CFD, the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be $17,942 per Acre. The Backup Special Tax shall not apply to Multifamily Residential Property or Non- Residential Property.

On each July 1, commencing July 1, 2021, the Backup Special Tax rate shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

2. Approved Property
The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Single Family Residential Property shall be the Backup Special Tax computed pursuant to Section D.1.c above.

The Maximum Special Tax for each Assessor’s Parcel of Approved Property not expected to be classified as Single Family Residential Property shall be $17,942 per Acre.

On each July 1, commencing July 1, 2021, the Maximum Special Tax rate for Approved Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

3. Undeveloped Property and Provisional Undeveloped Property The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property and Provisional Undeveloped Property shall be $17,942 per Acre.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 69
Menifee Mayor and City Council
January 18, 2023
Page
798 of 1063

A-7
4878-9308-7290v8/200299-0014
On each July 1, commencing July 1, 2021, the Maximum Special Tax rate for Undeveloped Property and Provisional Undeveloped Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2021-22 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property in accordance with the following steps:

Step One: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax rates in Table 1 to satisfy the Special Tax Requirement.

Step Two: If additional moneys are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.

Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.

Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax levy on each Assessor’s Parcel of Developed Property for which the Maximum Special Tax is the Backup Special Tax shall be increased in equal percentages from the Assigned Special Tax up to 100% of the Backup Special Tax as needed to satisfy the Special Tax Requirement.

Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the first four steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.

Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal Year against any Assessor’s Parcel of Residential Property as a result of a delinquency in the payment of the Special Tax applicable to any other Assessor’s Parcel be increased by more than ten percent (10%) above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default.

F. EXEMPTIONS
The City shall classify as Exempt Property, in the chronological order in which the property becomes exempt, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners’ association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 42.08 Acres.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 70
Menifee Mayor and City Council
January 18, 2023
Page
799 of 1063

A-8
4878-9308-7290v8/200299-0014
Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 42.08 Acres. Assessor’s Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 42.08 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to Step Five in Section E.

G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
“CFD Facilities” means $13,000,000 expressed in 2020 dollars, which shall increase by the Construction Inflation Index on July 1, 2021, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the facilities under the authorized bonding program for CFD No. 2020-1, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Tax levied under this Rate and Method of Apportionment. “Construction Fund” means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are available for expenditure to acquire or construct facilities eligible to be financed by CFD No. 2020-1.
“Construction Inflation Index” means the greater of (i) 2% and (ii) the annual percentage change in the Engineering News-Record Building Cost Index for the city of Los Angeles, measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News- Record Building Cost Index for the city of Los Angeles. “Future Facilities Costs” means the CFD Facilities minus facility costs available to be funded, or that were funded, through existing construction or escrow accounts funded by the Outstanding Bonds or Special Taxes, and minus facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment.
“Outstanding Bonds” means all previously issued Bonds issued and secured by the levy of Special Tax which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Tax.

1. Prepayment in Full
The Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor’s Parcels of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has been issued, (iii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has not been issued and (iv) Assessor’s Parcels of Provisional Undeveloped Property. The Special Tax obligation applicable to an Assessor’s Parcel may be fully prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel intending to prepay the Special Tax obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel. Within 15 days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel. Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be redeemed with the proceeds of such prepaid Special Taxes.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 71
Menifee Mayor and City Council
January 18, 2023
Page
800 of 1063

A-9
4878-9308-7290v8/200299-0014
The Prepayment Amount shall be calculated as follows (some capitalized terms are defined below):

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax for the Assessor’s Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, or Provisional Undeveloped Property, compute the Maximum Special Tax for the Assessor’s Parcel.

3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total amount of Maximum Special Taxes that could be levied assuming build out of all Assessor’s Parcels of Taxable Property based on the applicable Maximum Special Tax for Assessor’s Parcels of Developed Property not including any Assessor’s Parcels for which the Special Tax obligation has been previously prepaid.

4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the “Bond Redemption Amount”).

5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”).

6. Determine the Future Facilities Costs.

7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor’s Parcel (the “Future Facilities Amount”).

8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax prepayments.

9. Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid.

10. Determine the amount the CFD Administrator reasonably expects to derive from the investment of the Bond Redemption Amount and the Redemption Premium from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the Prepayment Amount.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 72
Menifee Mayor and City Council
January 18, 2023
Page
801 of 1063

A-10
4878-9308-7290v8/200299-0014

11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”).

12. Verify the administrative fees and expenses of the CFD, the cost to invest the Prepayment Amount, the cost of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Special Tax obligation for the Assessor’s Parcel and the redemption of Outstanding Bonds (the “Administrative Fees and Expenses”).

13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero.

14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and Expenses, less the Reserve Fund Credit.

15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD.

The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such event, the increment above $5,000 or an integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next redemption from other Special Tax prepayments of Outstanding Bonds or to make debt service payments.

As a result of the payment of the current Fiscal Year’s Special Tax levy as determined pursuant to paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year’s Special Tax levy for the Assessor’s Parcel from the County tax roll. With respect to any Assessor’s Parcel for which the Special Tax obligation is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Tax obligation and the release of the Special Tax lien for the Assessor’s Parcel, and the obligation to pay the Special Tax for such Assessor’s Parcel shall cease.

Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property after the proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds that will remain outstanding after the prepayment plus the estimated annual Administrative Expenses.

Tenders of Bonds in prepayment of the Special Tax obligation may be accepted upon the terms and conditions established by the City Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the City Council.

2. Prepayment in Part
The Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property, or Provisional Undeveloped Property may be partially prepaid. For purposes of determining the Partial Prepayment Amount, the provisions of Section G.1 shall be modified as provided by the following formula:

PP = ((PE – A) x F) + A
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 73
Menifee Mayor and City Council
January 18, 2023
Page
802 of 1063

A-11
4878-9308-7290v8/200299-0014
These terms have the following meaning:

PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1 F = the percent by which the owner of the Assessor’s Parcel(s) is partially prepaying the Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1 The owner of an Assessor’s Parcel who desires to partially prepay the Special Tax obligation for the Assessor’s Parcel shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Special Tax obligation, (ii) the percentage of the Special Tax obligation such owner wishes to prepay, and (iii) the company or agency that will be acting as the escrow agent, if any. Within 5 days of receipt of such notice, the CFD Administrator shall notify such property owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Partial Prepayment Amount. Within 15 business days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the amount of the Partial Prepayment Amount for the Assessor’s Parcel. A Partial Prepayment Amount must be made not less than 60 days prior to the redemption date for the Outstanding Bonds to be redeemed with the proceeds of the Partial Prepayment Amount.

With respect to any Assessor’s Parcel for which the Special Tax obligation is partially prepaid, the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in Paragraph 15 of Section G.1, and (ii) indicate in the records of the CFD that there has been a partial prepayment for the Assessor’s Parcel and that a portion of the Special Tax obligation equal to the remaining percentage (1.00 - F) of the applicable Special Tax will continue to be levied on the Assessor’s Parcel pursuant to Section E.

H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax pursuant to Section E. The Special Tax shall cease not later than the 2064-2065 Fiscal Year, however, Special Taxes will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2020-1 Bonds have been paid; (ii) all authorized facilities of CFD No. 2020-1 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Taxes remain uncollected and (iv) all other obligations of CFD No. 2020-1 have been satisfied.

I. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2020-1 may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.

J. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written appeal of the Special Taxes levied on his/her Assessor’s Parcel(s) with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant’s Assessor’s Parcel(s). No refunds of previously paid Special Taxes shall be made unless approved by the CFD Administrator.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 74
Menifee Mayor and City Council
January 18, 2023
Page
803 of 1063

A-12
4878-9308-7290v8/200299-0014
The CFD Administrator shall interpret this Rate and Method of Apportionment and make determinations relative to the annual levy and administration of the Special Taxes and any taxpayer who appeals, as herein specified.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 75
Menifee Mayor and City Council
January 18, 2023
Page
804 of 1063

B-1
4878-9308-7290v8/200299-0014

APPENDIX B

CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION
The following information relating to the City of Menifee (the “City”) and the County of Riverside, California (the “County”), California (the “State”) is supplied solely for purposes of information. Neither the City nor the County is obligated in any manner to pay principal of or interest on the 2023 Bonds or to cure any delinquency or default on the 2023 Bonds. The 2023 Bonds are payable solely from the sources described in the Official Statement.

General
The City of Menifee is located approximately 80 miles southeast of Los Angeles in the southwestern portion of Riverside County. The City incorporated on October 1, 2008 as a general law City. The City has slightly more than 103,000 residents and covers an area of over 46 square miles.

Population
The following table offers population figures for the City, the County and the State for 2017 through 2021.

Area 2017 2018 2019 2020 2021
City of Menifee 90,157 92,110 94,710 97,094 103,617
County of Riverside 2,374,555 2,397,662 2,419,057 2,440,719 2,424,587 State of California 39,352,398 39,519,535 39,605,361 39,648,938 39,303,157 Source: California State Department of Finance, Demographic Research Unit. 2010 Census Benchmark.

Building Activity
The following tables provide summaries of the building permit valuations and the number of new dwelling units authorized in the City and County from 2017 through 2021.

BUILDING PERMIT VALUATIONS
City of Menifee
2017-2021
(Dollars in Thousands)
2017 2018 2019 2020 2021
Valuation ($000):

Residential $ 220,269 $ 296,414 $343,285 $448,581 $391,923 Non-residential 17,705 38,992 1,150 94,195 39,831
Total* $ 237,974 $ 335,406 $344,435 $542,776 $431,754
Residential Units:

Single family 714 967 922 1,457 1,256
Multiple family 0 0 330 0 0
Total 714 967 1,252 1,457 1,256
* Totals may not add to sums because of rounding.

Source: Construction Industry Research Board.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 76
Menifee Mayor and City Council
January 18, 2023
Page
805 of 1063

B-2
4878-9308-7290v8/200299-0014

BUILDING PERMIT VALUATIONS
County of Riverside
2017-2021
(Dollars in Thousands)
2017 2018 2019 2020 2021
Residential $1,903,417 $2,558,081 $2,275,405 $3,071,183 $2,262,642 Non-residential 1,433,691 1,959,680 1,285,856 1,153,778 1,543,998 Total* $3,337,108 $4,517,761 $3,561,261 $4,224,961 3,806,640 Residential Units:

Single family 6,265 7,540 6,563 8,443 7,360
Multiple family 1,070 1,628 1,798 723 1,126
Total 7,335 9,168 8,361 9,166 8,486
* Totals may not add to sums because of rounding.

Source: Construction Industry Research Board.

Employment
The following tables show the largest employers located in the City and County as of June 30, 2021.

LARGEST EMPLOYERS
City of Menifee
(as of June 30, 2021)
Rank Name of Business Employees Type of Business

1. Menifee Union School District 1,665 School District

2. Mt. San Jacinto College District 1,100 School District

3. Romoland Elementary School District 595 School District

4. Target Corporation 380 Retail Stores

5. Menifee Valley Medical Center 365 Medical Center

6. Stater Brothers 290 Grocery Stores

7. City of Menifee 231 City Government

8. Southern California Edison 220 Community Services

9. Texas Roadhouse 200 Restaurant

10. United Parcel Services (UPS) 175 Package Delivery Company Source: City of Menifee Comprehensive Annual Financial Report for the year ending June 30, 2021.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 77
Menifee Mayor and City Council
January 18, 2023
Page
806 of 1063

B-3
4878-9308-7290v8/200299-0014

LARGEST EMPLOYERS
County of Riverside
(as of June 30, 2021)
Rank Name of Business Employees Type of Business

1. County of Riverside 22,952 County Government

2. Amazon 10,500 Online Retail

3. March Air Reserve Base 9,600 Military Reserve Base

4. University of California, Riverside 8,909 University

5. Stater Brothers Markets 8,304 Supermarkets

6. Moreno Valley Unified School District 6,250 School District

7. Kaiser Permanente Riverside Medical Center 5,780 Medical Center

8. Corona-Norco Unified School District 5,478 School District

9. Hemet Unified School District 4,460 School District

10. Ross Dress for Less 4,313 Retail Stores
Source: County of Riverside Comprehensive Annual Financial Report for the year ending June 30, 2021.

Employment and Industry
Employment data by industry is not separately reported on an annual basis for the City but is compiled for the Riverside-San Bernardino-Ontario Metropolitan Statistical Area (the “MSA”), which includes all of Riverside and San Bernardino Counties. In addition to varied manufacturing employment, the MSA has large and growing commercial and service sector employment, as reflected in the table below.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 78
Menifee Mayor and City Council
January 18, 2023
Page
807 of 1063

B-4
4878-9308-7290v8/200299-0014
The following table represents the Annual Average Labor Force and Industry Employment for the period from 2017 through 2021.

RIVERSIDE-SAN BERNARDINO-ONTARIO MSA

INDUSTRY EMPLOYMENT & LABOR FORCE - BY ANNUAL AVERAGE
2017 2018 2019 2020 2021
Civilian Labor Force 2,012,900 2,045,000 2,074,500 2,088,600 2,118,200 Civilian Employment 1,909,500 1,956,800 1,989,700 1,880,500 1,961,800 Civilian Unemployment 103,400 88,200 84,800 208,100 156,400 Civilian Unemployment Rate 5.1% 4.3% 4.1% 10.0% 7.4%
Total Farm 14,500 14,500 15,400 14,100 13,900
Total Nonfarm 1,453,300 1,506,600 1,552,800 1,495,200 1,569,100 Total Private 1,202,300 1,249,400 1,291,600 1,247,200 1,325,400 Goods Producing 196,400 206,100 208,900 201,300 205,400 Mining and Logging 1,000 1,200 1,200 1,300 1,400
Construction 97,400 105,200 107,200 104,900 109,200
Manufacturing 98,000 99,800 100,600 95,100 94,800
Service Providing 1,256,900 1,300,500 1,343,800 1,293,900 1,363,700 Trade, Transportation and Utilities 363,900 379,400 395,100 406,900 443,100 Wholesale Trade 63,100 66,100 67,700 65,600 67,000
Retail Trade 180,900 181,200 180,700 168,800 177,600
Transportation, Warehousing and Utilities 119,900 132,100 146,600 172,500 198,600 Information 11,600 11,400 11,500 9,400 9,600
Financial Activities 44,700 44,600 45,000 44,100 44,900 Professional and Business Services 147,300 152,000 158,700 154,000 167,300 Educational and Health Services 226,700 239,500 250,300 248,700 253,300 Leisure and Hospitality 166,300 170,600 175,900 141,300 158,900 Other Services 45,400 45,800 46,200 40,200 43,000
Government 251,000 257,200 261,200 248,000 243,600 Total, All Industries 1,467,800 1,521,100 1,568,100 1,509,300 1,583,000 Note: Does not include proprietors, self-employed, unpaid volunteers or family workers, domestic workers in households and persons involved in labor-management trade disputes. Employment reported by place of work. Items may not add to total due to independent rounding. The “Total, All Industries” data is not directly comparable to the employment data found in this Appendix B.

Source: State of California, Employment Development Department, March 2021 Benchmark.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 79
Menifee Mayor and City Council
January 18, 2023
Page
808 of 1063

B-5
4878-9308-7290v8/200299-0014
The following table summarizes the labor force, employment and unemployment figures for the period from 2017 through 2021 for the City, the County, the State and the nation as a whole.

CITY OF MENIFEE,

COUNTY OF RIVERSIDE,

STATE OF CALIFORNIA AND UNITED STATES
Average Annual Civilian Labor Force, Employment and Unemployment Year and Area Labor Force Employment(1) Unemployment(2) Unemployment
Rate (%)(3)
2017
City of Menifee 38,000 36,100 1,900 5.0%
County of Riverside 1,072,200 1,015,800 56,300 5.3
State of California 19,173,800 18,246,800 927,000 4.8
United States 160,320,000 153,337,000 6,982,000 4.4
2018
City of Menifee 39,100 37,400 1,700 4.3%
County of Riverside 1,091,400 1,042,700 48,700 4.5
State of California 19,263,900 18,442,400 821,500 4.3
United States 162,075,000 155,761,000 6,314,000 3.9
2019
City of Menifee 39,600 38,000 1,600 4.0%
County of Riverside 1,104,000 1,057,900 46,100 4.2
State of California 19,353,700 18,550,500 803,200 4.2
United States 163,539,000 157,538,000 6,001,000 3.7
2020
City of Menifee 40,400 36,400 4,100 10.1%
County of Riverside 1,107,700 997,700 110,000 9.9
State of California 18,821,200 16,913,100 1,908,100 10.1 United States 160,472,000 147,795,000 12,947,000 8.1
2021
City of Menifee 42,200 39,000 3,200 7.5%
County of Riverside 1,129,600 1,046,700 82,800 7.4
State of California 18,923,200 17,541,900 1,381,200 7.3 United States 162,294,000 155,975,000 6,319,000 3.9
Note: Data is not seasonally adjusted.
(1) Annual averages, unless otherwise specified.
(2) Includes persons involved in labor-management trade disputes. (3) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures in this table.

Source: U.S. Department of Labor – Bureau of Labor Statistics, California Employment Development Department. 2021 Benchmark.

Personal Income
Personal Income is the income that is received by all persons from all sources. It is calculated as the sum of wage and salary disbursements, supplements to wages and salaries, proprietors’ income with inventory valuation and capital consumption adjustments, rental income of persons with capital consumption adjustment, Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 80
Menifee Mayor and City Council
January 18, 2023
Page
809 of 1063

B-6
4878-9308-7290v8/200299-0014
personal dividend income, personal interest income, and personal current transfer receipts, less contributions for government social insurance.

The personal income of an area is the income that is received by, or on behalf of, all the individuals who live in the area; therefore, the estimates of personal income are presented by the place of residence of the income recipients.

Total personal income in Riverside County increased by 71% between 2008 and 2020. The following tables summarize personal income for Riverside County for 2008 through 2020.

PERSONAL INCOME
Riverside County
2008-2020
(Dollars in Thousands)
Year Riverside County
Annual
Percent Change
2008 $66,862,826 --%
2009 65,663,326 (1.7)
2010 68,084,905 3.6
2011 72,170,010 6.0
2012 74,093,810 2.7
2013 76,470,084 3.2
2014 80,268,670 5.0
2015 85,386,347 6.4
2016 89,644,299 5.0
2017 93,156,635 3.9
2018 97,619,217 4.8
2019 102,037,774 4.5
2020 114,090,413 11.8
Source: U.S. Department of Commerce, Bureau of Economic Analysis.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 81
Menifee Mayor and City Council
January 18, 2023
Page
810 of 1063

B-7
4878-9308-7290v8/200299-0014
The following table summarizes per capita personal income for Riverside County, California and the United States for 2008-2020. This measure of income is calculated as the personal income of the residents of the area divided by the resident population of the area.

PER CAPITA PERSONAL INCOME
Riverside County, State of California and the United States 2008-2020
Year Riverside County California United States
2008 $31,624 $43,890 $40,904
2009 30,448 42,044 39,284
2010 30,699 43,636 40,547
2011 32,200 46,175 42,739
2012 32,748 48,813 44,605
2013 33,462 49,303 44,860
2014 34,875 52,363 47,071
2015 36,745 55,833 49,019
2016 38,114 58,048 50,015
2017 39,148 60,549 52,118
2018 40,587 63,720 54,606
2019 42,418 66,619 56,490
2020 45,834 70,192 59,510
Source: U.S. Department of Commerce, Bureau of Economic Analysis.

Taxable Sales
The table below presents taxable sales for the years 2016 through 2021 for the City.

TAXABLE SALES
City of Menifee
2016-2021
(Dollars in Thousands)
Year Permits Taxable Transactions
2016 1,342 628,923
2017 1,426 683,385
2018 1,484 742,128
2019 1,568 776,545
2020 1,726 752,610
2021 1,756 974,142
Source: Taxable Sales in California, California Department of Tax and Fee Administration for 2016-2021.

The table below presents taxable sales for the years 2016 through 2021 for the County.

TAXABLE SALES
County of Riverside
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 82
Menifee Mayor and City Council
January 18, 2023
Page
811 of 1063

B-8
4878-9308-7290v8/200299-0014
2016-2021
(Dollars in Thousands)
Year Permits Taxable Transactions
2016 57,742 34,483,693
2017 58,969 36,407,460
2018 61,433 38,919,498
2019 64,063 40,626,998
2020 69,284 42,313,474
2021 64,335 55,535,196
Source: Taxable Sales in California, California Department of Tax and Fee Administration for 2016-2021.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 83
Menifee Mayor and City Council
January 18, 2023
Page
812 of 1063

C-1
4878-9308-7290v8/200299-0014

APPENDIX C

FORM OF OPINION OF BOND COUNSEL
Upon issuance of the Bonds, Stradling Yocca Carlson & Rauth, a Professional Corporation, Bond Counsel, proposes to render its final approving opinion in substantially the following form:
[Closing Date]
City of Menifee
Community Facilities District No. 2020-1 (McCall Mesa)
Menifee, California
Re:$__________ Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee Special Tax Bonds, Series 2023A
Ladies and Gentlemen:

We have examined the Constitution and the laws of the State of California, a certified record of the proceedings of the City of Menifee (the “City”) taken in connection with the formation of Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee (the “District”) and the authorization and issuance of the District’s Special Tax Bonds, Series 2023A in the aggregate principal amount of $_______ (the “Bonds”) and such other information and documents as we consider necessary to render this opinion. In rendering this opinion, we have relied upon certain representations of fact and certifications made by the District, the City, the initial purchasers of the Bonds and others. We have not undertaken to verify through independent investigation the accuracy of the representations and certifications relied upon by us.

The Bonds have been issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (comprising Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California), a resolution adopted by the City Council of the City, acting in its capacity as the legislative body of the District (the “City Council”) on January __, 2023 (the “Resolution”), and a Bond Indenture dated as of January 1, 2022, as supplemented by that certain First Supplement to Bond Indenture, dated as of February 1, 2023 (collectively, the “Indenture”), each by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”). All capitalized terms not defined herein shall have the meaning set forth in the Indenture.

Based upon our examination of the foregoing, and in reliance thereon and on all matters of fact as we deem relevant under the circumstances, and upon consideration of applicable laws, we are of the opinion that:
(1) The Bonds have been duly and validly authorized by the District and are legal, valid and binding limited obligations of the District, enforceable in accordance with their terms and the terms of the Indenture.

The Bonds are limited obligations of the District but are not a debt of the City, the State of California or any other political subdivision thereof within the meaning of any constitutional or statutory limitation, and, except for the Net Taxes, neither the faith and credit nor the taxing power of the City, the State of California, or any of its political subdivisions is pledged for the payment thereof. (2) The First Supplement to Bond Indenture has been duly executed and delivered by the District.

The Indenture creates a valid pledge of, and the Bonds are secured by, the Net Taxes and the amounts on deposit in certain funds and accounts established under the Indenture, as and to the extent provided in the Indenture.

The Indenture is enforceable in accordance with its terms; provided, however, we express no opinion as to the enforceability of the covenant of the District contained in the Indenture to levy Special Taxes for the payment Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 84
Menifee Mayor and City Council
January 18, 2023
Page
813 of 1063

C-2
4878-9308-7290v8/200299-0014
of Administrative Expenses or as to indemnification, penalty, contribution, choice of law, choice of forum or waiver provisions contained therein.
(3) Under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals; however, for tax years beginning after December 31, 2022, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed on such corporations. (4) Interest on the Bonds is exempt from State of California personal income tax. (5) The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity are to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to an Owner before receipt of cash attributable to such excludable income.

The amount of original issue discount deemed received by an Owner will increase the Owner’s basis in the applicable Bond.
(6) The amount by which an Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Bond premium which must be amortized under Section 171 of the Code; such amortizable Bond premium reduces the Bond Owner’s basis in the applicable Bond (and the amount of tax- exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in an Owner realizing a taxable gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Owner.

The opinions expressed in paragraphs (3) and (5) above as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Bonds is subject to the condition that the District and the City comply with all requirements of the Code, that must be satisfied subsequent to the issuance of the Bonds to assure that such interest (and original issue discount) will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The District and the City have covenanted to comply with all such requirements. Except as set forth in paragraphs (3), (4), (5) and (6) above, we express no opinion as to any tax consequences related to the Bonds.

Certain agreements, requirements and procedures contained or referred to in the Indenture, the Tax Certificate executed by the District and the City and other documents related to the Bonds may be changed and certain actions may be taken or omitted, under the circumstances and subject to the terms and conditions set forth in such documents. We express no opinion as to the effect on the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on any Bond if any such change occurs or action is taken or omitted upon advice or approval of bond counsel other than Stradling Yocca Carlson & Rauth, a Professional Corporation.

Our opinion is limited to matters governed by the laws of the State of California and federal law. We assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction. We call attention to the fact that the rights and obligations under the Bonds, the Indenture and the Tax Certificate may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, by the application of equitable principles and the exercise of Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 85
Menifee Mayor and City Council
January 18, 2023
Page
814 of 1063

C-3
4878-9308-7290v8/200299-0014
judicial discretion in appropriate cases and by the limitations on legal remedies against public agencies in the State of California.

We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds and expressly disclaim any duty to advise the Owners of the Bonds with respect to matters contained in the Official Statement or other offering material.

The opinions expressed herein are based upon an analysis of existing statutes, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether such actions or events are taken (or not taken) or do occur (or do not occur).

Respectfully submitted,
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 86
Menifee Mayor and City Council
January 18, 2023
Page
815 of 1063

D-1
4878-9308-7290v8/200299-0014

APPENDIX D

APPRAISAL REPORT
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 87
Menifee Mayor and City Council
January 18, 2023
Page
816 of 1063

E-1
4878-9308-7290v8/200299-0014

APPENDIX E

SUMMARY OF THE INDENTURE
The following is a summary of certain provisions of the Indenture which are not described elsewhere.

This summary does not purport to be comprehensive and reference should be made to the Indenture for a full and complete statement of the provisions thereof.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 88
Menifee Mayor and City Council
January 18, 2023
Page
817 of 1063

F-1
4878-9308-7290v8/200299-0014

APPENDIX F

FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 89
Menifee Mayor and City Council
January 18, 2023
Page
818 of 1063

G-1
4878-9308-7290v8/200299-0014

APPENDIX G

BOOK-ENTRY ONLY SYSTEM
The information in this Appendix concerning DTC and DTC’s book-entry only system has been obtained from sources that the District and the Underwriter believe to be reliable, but neither the District nor the Underwriter takes any responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the 2023 Bonds, payment of principal, premium, if any, accreted value and interest on the 2023 Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the 2023 Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.

The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the 2023 Bonds. The 2023 Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered bond will be issued for each annual maturity of the 2023 Bonds, each in the aggregate principal amount of such annual maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.

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

Purchases of 2023 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2023 Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2023 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the 2023 Bonds, except in the event that use of the book-entry system for the 2023 Bonds is discontinued.

To facilitate subsequent transfers, all 2023 Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of 2023 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2023 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 90
Menifee Mayor and City Council
January 18, 2023
Page
819 of 1063

G-2
4878-9308-7290v8/200299-0014
accounts such 2023 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Beneficial Owners of 2023 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2023 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of 2023 Bonds may wish to ascertain that the nominee holding the 2023 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the 2023 Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 2023 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts 2023 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments on the 2023 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the District or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

A Bond Owner shall give notice to elect to have its 2023 Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect delivery of such 2023 Bonds by causing the Direct Participant to transfer the Participant’s interest in the 2023 Bonds, on DTC’s records, to the Trustee. The requirement for physical delivery of 2023 Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the 2023 Bonds are transferred by Direct Participants on DTC’s records and followed by a book- entry credit of tendered 2023 Bonds to the Trustee’s DTC account.

DTC may discontinue providing its services as depository with respect to the 2023 Bonds at any time by giving reasonable notice to the District or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered.

The District may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, 2023 Bonds will be printed and delivered to DTC.

THE TRUSTEE, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE 2023 BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY

FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY

ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE 2023 BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 91
Menifee Mayor and City Council
January 18, 2023
Page
820 of 1063

Stradling Yocca Carlson & Rauth
Draft of 12/19/22
4859-2515-5903v5/200299-0014

FIRST SUPPLEMENT TO BOND INDENTURE
Between
COMMUNITY FACILITIES DISTRICT NO. 2020-1
(MCCALL MESA) OF THE CITY OF MENIFEE
and

WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
Relating to
$__________
COMMUNITY FACILITIES DISTRICT NO. 2020-1
(MCCALL MESA) OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2023A
Dated as of February 1, 2023
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 92
Menifee Mayor and City Council
January 18, 2023
Page
821 of 1063

4859-2515-5903v5/200299-0014

FIRST SUPPLEMENT TO BOND INDENTURE
THIS FIRST SUPPLEMENT TO BOND INDENTURE dated as of February 1, 2023 (the “First Supplement”), governs the terms of Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee Special Tax Bonds, Series 2023A, which are being issued as Parity Bonds in accordance with the Bond Indenture (the “Original Bond Indenture”) dated as of January 1, 2022, by and between Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee (the “District”) and Wilmington Trust, National Association (the “Trustee”), as trustee. The Original Bond Indenture and this First Supplement are hereinafter collectively referred to as the “Indenture.” RECITALS :

A. The City Council of the City of Menifee, located in the County of Riverside, California (the “City Council”), has undertaken proceedings and declared the necessity to issue bonds on behalf of the District pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California (the “Act”).

B. Based upon Resolution Nos. 20-941 and 20-942 adopted by the City Council on August 5, 2020 and an election held on August 5, 2020, authorizing the levy of a special tax and the issuance of bonds, the District is authorized to issue bonds in one or more series pursuant to the Act, in an aggregate principal amount not to exceed $18,000,000.

C. The District previously issued its Special Tax Bonds, Series 2022A in the aggregate principal amount of $11,330,000 to finance certain Project Costs (as defined in the Original Bond Indenture) pursuant to the Original Bond Indenture; and D. The legislative body of the District intends to finance additional Project Costs through the issuance of bonds in an aggregate principal amount of $________ designated as the “Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee Special Tax Bonds, Series 2023A” (the “2023 Bonds”); and
E. Pursuant to Section 6.1(b), (c) and (f) of the Original Bond Indenture, the District desires to amend the Original Bond Indenture as set forth herein in connection with the issuance of the 2023 Bonds and the District has determined that such amendments are not materially adverse to the Owners; and
F. The District has determined all requirements of the Act for the issuance of the 2023 Bonds as Parity Bonds under the terms of the Original Bond Indenture have been satisfied; NOW, THEREFORE, in order to establish the terms and conditions upon and subject to which the 2023 Bonds are to be issued, and in consideration of the premises and of the mutual covenants contained herein and of the purchase and acceptance of the 2023 Bonds by the Owners thereof, and for other valuable consideration, the receipt of which is hereby acknowledged, the District does hereby covenant and agree, for the benefit of the Owners of the 2023 Bonds, as follows:

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 93
Menifee Mayor and City Council
January 18, 2023
Page
822 of 1063

2 4859-2515-5903v5/200299-0014

ARTICLE I

DEFINITIONS
Section 1.1.Definitions. All capitalized terms not otherwise defined herein shall have the meaning set forth in the Original Bond Indenture provided that the following definitions are added and, where applicable, shall supersede any different definition of the same capitalized term provided in the Original Bond Indenture:

Interest Payment Date. The term “Interest Payment Date” means, with respect to the 2023 Bonds, September 1, 2023 and each March 1 and September 1 thereafter; provided, however, that, if any such day is not a Business Day, interest up to the Interest Payment Date will be paid on the Business Day next succeeding such date.

Term Bonds. The term “Term Bonds” means, with respect to the 2023 Bonds, the 2023 Bonds maturing on September 1, 20__ and September 1, 20__. 2023 Bonds. The term “2023 Bonds” means the District’s Special Tax Bonds, Series 2023A issued on __________, 2023 in the aggregate principal amount of $__________.

ARTICLE II

GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1.Amount, Issuance, Purpose and Nature of 2023 Bonds. Under and pursuant to the Act and the Original Bond Indenture, as supplemented by this First Supplement, the 2023 Bonds in the aggregate principal amount of $________ shall be issued as Parity Bonds governed by the terms of the Original Bond Indenture, as supplemented by this First Supplement, for the purpose of financing additional Project Costs benefitting the District, funding a deposit to the Reserve Account and paying Costs of Issuance of the 2023 Bonds.

Section 2.2.Description of Bonds; Interest Rates. The 2023 Bonds shall be designated “Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee Special Tax Bonds, Series 2023A.” The 2023 Bonds shall be dated as of their Delivery Date and shall mature and be payable on September 1 in the years and in the aggregate principal amounts and shall be subject to and shall bear interest at the rates set forth in the table below payable on September 1, 2023 and each Interest Payment Date thereafter:

Maturity Date
(September 1) Principal Amount Interest Rate
$ %
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 94
Menifee Mayor and City Council
January 18, 2023
Page
823 of 1063

3 4859-2515-5903v5/200299-0014
Section 2.3.Form of 2023 Bonds. The definitive 2023 Bonds may be printed from steel engraved or lithographic plates or may be typewritten. The 2023 Bonds and the certificate of authentication shall be substantially in the form attached hereto as Exhibit A, which form is hereby approved and adopted as the form of such 2023 Bonds and of the certificate of authentication.

Only the 2023 Bonds as shall bear thereon such certificate of authentication in the form set forth in Exhibit A attached hereto shall be entitled to any right or benefit under the Indenture, and no 2023 Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Trustee.

Section 2.4.Book-Entry System. The 2023 Bonds shall be initially delivered in the form of a separate single fully registered 2023 Bond (which may be typewritten) for each maturity of the 2023 Bonds. Upon initial delivery, the ownership of each such 2023 Bond shall be registered in the registration books kept by the Trustee in the name of the Nominee as nominee of the Depository.

Except as provided in Section 2.14 of the Original Bond Indenture, all of the Outstanding 2023 Bonds shall be registered in the registration books kept by the Trustee in the name of the Nominee.

Section 2.5.Conditions to Issuance of 2023 Bonds. The 2023 Bonds shall not be issued unless and until the conditions for the issuance of the 2023 Bonds as Parity Bonds pursuant to 9.2 of the Original Bond Indenture shall have been satisfied or will be satisfied upon the issuance of the 2023 Bonds.

ARTICLE III
APPLICATION OF PROCEEDS OF 2023 BONDS
Section 3.1.Application of Proceeds.
(a)The proceeds of the sale of the Bonds shall be received by the Trustee on behalf of the District and deposited and transferred as follows:
(1) $___________ shall be transferred to the Costs of Issuance Account of the Acquisition and Construction Fund to pay the Costs of Issuance of the Bonds; (2) $_________ shall be transferred to the Reserve Account of the Special Tax Fund to increase the amount therein to the Reserve Requirement as of the Delivery Date of the 2023 Bonds;
(3) $___________ shall be transferred to the Acquisition and Construction Fund of which $_________ shall be deposited in the City Facilities Account, $_________ shall be deposited in the Water Facilities Account and $________ shall be deposited in the School Facilities Account.

The Trustee may, in its discretion, establish temporary funds or accounts in its books and records to facilitate such transfers.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 95
Menifee Mayor and City Council
January 18, 2023
Page
824 of 1063

4 4859-2515-5903v5/200299-0014

ARTICLE IV
REDEMPTION OF 2023 BONDS
Section 4.1.Redemption of 2023 Bonds.
(a)Optional Redemption. The 2023 Bonds may be redeemed at the option of the District from any source of funds on any Interest Payment Date on or after September 1, 20___, in whole or in part, from such maturities as are selected by the District and by lot within a maturity, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the date of redemption:

Redemption Date Redemption Price
103%
102
101
100
In the event that the District elects to redeem 2023 Bonds as provided above, the District shall give written notice to the Trustee of its election to so redeem, the redemption date and the principal amount of the 2023 Bonds of each maturity to be redeemed. The notice to the Trustee shall be given at least 30 but no more than 60 days prior to the redemption date, or by such later date as is acceptable to the Trustee.
(b)Mandatory Sinking Fund Redemption. The 2023 Bonds maturing on September 1, 20__ (the “20__ Term Bonds”) shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Original Bond Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed 20__Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows Term Bonds Maturing September 1, 20__
Redemption Dates
(September 1)
Redemption
Amount
20 $______
20 20
20 20
20 20*
_____________
* Maturity.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 96
Menifee Mayor and City Council
January 18, 2023
Page
825 of 1063

5 4859-2515-5903v5/200299-0014
The 2023 Bonds maturing on September 1, 20__ (the “20__ Term Bonds”) shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Original Bond Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed 20__Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows
Term Bonds Maturing September 1, 20__
Redemption Dates
(September 1)
Redemption
Amount
20 $______
20 20
20 20
20 20*
_____________
* Maturity.

If the District purchases Term Bonds during the Fiscal Year immediately preceding one of the sinking fund redemption dates specified above, the District shall notify the Trustee at least 45 days prior to the redemption date as to the principal amount purchased, and the amount purchased shall be credited at the time of purchase to the next Sinking Fund Payment for the Term Bond so purchased, to the extent of the full principal amount of the purchase. All 2023 Bonds purchased pursuant to this subsection shall be cancelled pursuant to Section 10.1 of the Original Bond Indenture.

In the event of a partial optional redemption or special mandatory redemption of the Term Bonds, each of the remaining Sinking Fund Payments for such Term Bonds shall be reduced, as nearly as practicable, on a pro rata basis.
(c)Special Mandatory Redemption. The 2023 Bonds are subject to special mandatory redemption as a whole or in part on a pro rata basis among maturities and by lot within a maturity, on any Interest Payment Date on or after September 1, 2023 and shall be redeemed by the Trustee, from Prepayments deposited to the Redemption Account pursuant to Section 3.2 of the Original Bond Indenture, plus amounts transferred from the Reserve Account pursuant to Section 3.6(c) of the Original Bond Indenture, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

Redemption Date Redemption Price
Any Interest Payment Date through March 1, 20__ %
September 1, 20__ and March 1, 20__
September 1, 20__ and March 1, 20__
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 97
Menifee Mayor and City Council
January 18, 2023
Page
826 of 1063

6 4859-2515-5903v5/200299-0014
September 1, 20__ and any Interest Payment Date thereafter

ARTICLE V

AMENDMENTS
Section 5.1.Amendment to Section 9.2 of the Original Bond Indenture. The first paragraph of Section 9.2 of the Original Bond Indenture is hereby amended and restated to state as follows:
“The District may at any time after the issuance and delivery of the Bonds hereunder issue Parity Bonds payable from the Net Taxes and other amounts deposited in the Special Tax Fund (other than in the Administrative Expense Account therein) and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds theretofore issued hereunder or under any Supplemental Indenture; provided, however, Parity Bonds may only be issued for the purpose of refunding all or a portion of the Bonds or any Parity Bonds then Outstanding. Parity Bonds may be issued subject to the following additional specific conditions, which are hereby made conditions precedent to the issuance of any such Parity Bonds:” Subparagraph (6) of Section 9.2(c) of the Original Bond Indenture is hereby deleted in its entirety and Subparagraph (7) of Section 9.2(c) of the Original Bond Indenture is hereby renumbered as Subparagraph (6).

ARTICLE VI

MISCELLANEOUS
Section 6.1.Provisions of Original Bond Indenture in Effect. Except as expressly modified herein, all of the provisions of the Original Bond Indenture shall remain in full force and effect.

Section 6.2.Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this First Supplement shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this First Supplement. The District hereby declares that it would have entered into this First Supplement and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the 2023 Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this First Supplement may be held illegal, invalid or unenforceable.

Section 6.3.Execution in Counterparts. This First Supplement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 6.4.Governing Law. This First Supplement shall be construed and governed in accordance with the laws of the State of California applicable to contracts made and performed in such state.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 98
Menifee Mayor and City Council
January 18, 2023
Page
827 of 1063

S-1
4859-2515-5903v5/200299-0014
IN WITNESS WHEREOF, COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA) OF THE CITY OF MENIFEE has caused this First Supplement to Bond Indenture to be signed by an Authorized Representative of the District and Wilmington Trust, National Association in token of its acceptance of the trust created hereunder, has caused this First Supplement to Bond Indenture to be signed in its corporate name by its officers identified below, all as of the day and year first above written.

COMMUNITY FACILITIES DISTRICT NO. 2020-1
(MCCALL MESA) OF THE CITY OF MENIFEE
By:

Mayor of the City of Menifee, acting as the
legislative body of Community Facilities
District No. 2020-1 (McCall Mesa) of the City
of Menifee
ATTEST:

City Clerk of the City of Menifee, acting
as the legislative body of Community
Facilities District No. 2020-1 (McCall
Mesa) of the City of Menifee

WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee
By:

Authorized Signatory
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 99
Menifee Mayor and City Council
January 18, 2023
Page
828 of 1063

A-1
4859-2515-5903v5/200299-0014

EXHIBIT A

FORM OF SPECIAL TAX BOND

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE DISTRICT OR TRUSTEE FOR

REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO

SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY

TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

R-____ $___________

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

COUNTY OF RIVERSIDE
COMMUNITY FACILITIES DISTRICT NO. 2020-1
(MCCALL MESA) OF THE CITY OF MENIFEE
SPECIAL TAX BOND, SERIES 2023A
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
_____% September 1, 20__ ______, 2023 ___
REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: __________________ DOLLARS
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA) OF THE CITY OF MENIFEE (the “District”) which was formed by the City of Menifee (the “City”) and is situated in the County of Riverside, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from certain amounts held under the Indenture (as hereinafter defined), to the Owner named above, or registered assigns, on the Maturity Date set forth above, unless redeemed prior thereto as hereinafter provided, the Principal Amount set forth above, and to pay interest on such Principal Amount from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication hereof, unless: (i) the date of authentication is an Interest Payment Date, in which event interest shall be payable from such date of authentication; (ii) the date of authentication is after a Record Date (as hereinafter defined) but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication; or (iii) the date of authentication is prior to the close of Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 100
Menifee Mayor and City Council
January 18, 2023
Page
829 of 1063

A-2
4859-2515-5903v5/200299-0014
business on the first Record Date, in which event interest shall be payable from the Dated Date set forth above. Notwithstanding the foregoing, if at the time of authentication of this Bond interest is in default, interest on this Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment, interest on this Bond shall be payable from the Dated Date set forth above.

Interest will be paid semiannually on September 1, 2023 and each March 1 and September 1 thereafter (each an “Interest Payment Date”), at the Interest Rate set forth above, until the Principal Amount hereof is paid or made available for payment.

The principal of and premium, if any, on this Bond are payable to the Owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the Principal Office of the Trustee (as such term is defined in the Indenture), initially Wilmington Trust, National Association, (the “Trustee”). Interest on this Bond shall be paid by check of the Trustee mailed, by first class mail, postage prepaid, or in certain circumstances described in the Indenture by wire transfer to an account within the United States of America, to the Owner hereof as of the close of business on the fifteenth day of the month preceding the month in which the Interest Payment Date occurs (the “Record Date”) at such Owner’s address as it appears on the registration books maintained by the Trustee.

This Bond is one of a duly authorized issue of “Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee Special Tax Bonds, Series 2023A” (the “Bonds”) issued in the aggregate principal amount of $___________ pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Section 53311 et seq. of the California Government Code (the “Act”) for the purpose of financing public improvements, funding a deposit to the reserve account and paying certain costs related to the issuance of the Bonds. The issuance of the Bonds and the terms and conditions thereof are provided for by a resolution adopted by the City Council of the City, acting in its capacity as the legislative body of the District (the “Legislative Body”), on ________, 2023, and a Bond Indenture dated as of January 1, 2022 (the “Original Bond Indenture”), as supplemented and amended by the First Supplement to Bond Indenture, dated as of February 1, 2023 (the “First Supplement” and together with the Original Bond Indenture, the “Indenture”), each by and between the District and the Trustee, and this reference incorporates the Indenture herein, and by acceptance hereof the Owner of this Bond assents to said terms and conditions. The Indenture is adopted under and this Bond is issued under, and both are to be construed in accordance with, the laws of the State of California.

Pursuant to the Act and the Indenture, the principal of, premium, if any, and interest on this Bond are payable on a parity with the District’s Special Tax Bonds, Series 2022A, solely from the portion of the annual special taxes authorized under the Act to be levied and collected within the District (the “Special Taxes”) and certain other amounts pledged to the repayment of the Bonds as set forth in the Indenture. Any amounts for the payment hereof shall be limited to the Net Taxes pledged and collected or foreclosure proceeds received following a default in payment of the Special Taxes and other amounts deposited to the Special Tax Fund (other than the Administrative Expense Account therein) established under the Indenture, except to the extent that other provision for payment has been made by the Legislative Body, as may be permitted by law. The District has covenanted for the benefit of the owners of the Bonds that under certain circumstances described in the Indenture it will commence and diligently pursue to completion appropriate foreclosure proceedings in the event of delinquencies of Special Tax installments levied for payment of principal and interest on the Bonds.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 101
Menifee Mayor and City Council
January 18, 2023
Page
830 of 1063

A-3
4859-2515-5903v5/200299-0014
The Bonds may be redeemed at the option of the District from any source of funds on any Interest Payment Date on or after September 1, 20___, in whole or in part, from such maturities as are selected by the District and by lot within a maturity, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the date of redemption:

Redemption Date Redemption Price
103%
102
101
100
The Bonds maturing on September 1, 20__ (the “20__ Term Bonds”) shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Original Bond Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed 20__Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:

Term Bonds Maturing September 1, 20__
Redemption Dates
(September 1)
Redemption
Amount
20 $______
20 20
20 20
20 20
_____________
* Maturity.

The Bonds maturing on September 1, 20__ (the “20__ Term Bonds”) shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Original Bond Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed 20__Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 102
Menifee Mayor and City Council
January 18, 2023
Page
831 of 1063

A-4
4859-2515-5903v5/200299-0014
Term Bonds Maturing September 1, 20__
Redemption Dates
(September 1)
Redemption
Amount
20 $______
20 20
20 20
20 20
The Bonds are subject to special mandatory redemption as a whole or in part on a pro rata basis among maturities and by lot within a maturity, on any Interest Payment Date on or after September 1, 2023 and shall be redeemed by the Trustee, from Prepayments deposited to the Redemption Account pursuant to the Indenture, plus amounts transferred from the Reserve Account pursuant to the Indenture, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

Redemption Date Redemption Price
Any Interest Payment Date through March 1, 20__ 103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100 Notice of redemption with respect to the Bonds to be redeemed shall be mailed to the registered owners thereof not less than 30 nor more than 45 days prior to the redemption date by first class mail, postage prepaid, to the addresses set forth in the registration books; provided, however, so long as the Bonds are registered in the name of the Nominee, such notice shall be given in such manner as complies with the requirements of the Depository. Neither a failure of the Owner hereof to receive such notice nor any defect therein will affect the validity of the proceedings for redemption. All Bonds or portions thereof so called for redemption will cease to accrue interest on the specified redemption date, provided that funds for the redemption are on deposit with the Trustee on the redemption date. Thereafter, the registered owners of such Bonds shall have no rights except to receive payment of the redemption price upon the surrender of the Bonds.

This Bond shall be registered in the name of the Owner hereof, as to both principal and interest, and the District and the Trustee may treat the Owner hereof as the absolute owner for all purposes and shall not be affected by any notice to the contrary.

The Bonds are issuable only in fully registered form in the denomination of $5,000 or any integral multiple thereof and may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same issue and maturity, all as more fully set forth in the Indenture. This Bond is transferable by the Owner hereof, in person or by his attorney duly authorized in writing, at the Principal Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond of authorized denomination or Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 103
Menifee Mayor and City Council
January 18, 2023
Page
832 of 1063

A-5
4859-2515-5903v5/200299-0014
denominations for the same aggregate principal amount of the same issue and maturity will be issued to the transferee in exchange therefor.

The Trustee shall not be required to register transfers or make exchanges of: (i) any Bonds for a period of 15 days next preceding any selection of the Bonds to be redeemed; or (ii) any Bonds chosen for redemption.

The rights and obligations of the District and of the registered owners of the Bonds may be amended at any time, and in certain cases without notice to or the consent of the registered owners, to the extent and upon the terms provided in the Indenture.

THE BONDS DO NOT CONSTITUTE GENERAL OBLIGATIONS OF THE CITY OR OF THE DISTRICT. NEITHER THE CITY NOR THE DISTRICT IS OBLIGATED TO LEVY OR

PLEDGE, OR HAS LEVIED OR PLEDGED, GENERAL OR SPECIAL TAXES, OTHER THAN THE SPECIAL TAXES REFERENCED HEREIN. THE BONDS ARE LIMITED OBLIGATIONS

OF THE DISTRICT PAYABLE FROM THE PORTION OF THE SPECIAL TAXES AND OTHER

AMOUNTS PLEDGED UNDER THE INDENTURE BUT ARE NOT A DEBT OF THE CITY,

THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION OR RESTRICTION.

This Bond shall not become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Trustee.

IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the District, does not exceed any debt limit prescribed by the laws or Constitution of the State of California.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 104
Menifee Mayor and City Council
January 18, 2023
Page
833 of 1063

A-6
4859-2515-5903v5/200299-0014
IN WITNESS WHEREOF, Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee has caused this Bond to be dated the Dated Date, to be signed on behalf of the District by the Mayor of the City by his facsimile signature and attested by the facsimile signature of the City Clerk of the City.

Mayor of the City of Menifee, acting as the legislative body of Community Facilities District No. 2020-1
(McCall Mesa) of the City of Menifee
ATTEST:

City Clerk of the City of Menifee, acting as
the legislative body of Community Facilities
District No. 2020-1 (McCall Mesa) of the City
of Menifee
[FORM OF TRUSTEE’S CERTIFICATE
OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the within-defined Indenture.

Dated: _______, 2023 WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee
By:

Authorized Signatory
[FORM OF LEGAL OPINION]
The following is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth, a Professional Corporation, in connection with the issuance of, and dated as of the date of the original delivery of, the Bonds. A signed copy is on file in my office.

City Clerk of the City
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 105
Menifee Mayor and City Council
January 18, 2023
Page
834 of 1063

A-7
4859-2515-5903v5/200299-0014
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto whose tax identification number is ,
the within-mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s) attorney to transfer the same on the books of the Trustee with full power of substitution in the premises.

Dated:

Signature guaranteed:

NOTE: Signature(s) must be guaranteed by an
eligible guarantor institution.

NOTE: The signatures(s) on this Assignment
must correspond with the name(s) as written on
the face of the within Bond in every particular
without alteration or enlargement or any change
whatsoever.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 106
Menifee Mayor and City Council
January 18, 2023
Page
835 of 1063

Stradling Yocca Carlson & Rauth
Draft of 12/19/22
1 4877-5187-3338v5/200299-0014

DISTRICT CONTINUING DISCLOSURE CERTIFICATE
THIS CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) dated as of February 1, 2023 is executed and delivered by Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee (the “District”) in connection with the issuance and delivery by the District of its $__________ Special Tax Bonds, Series 2023A (the “Bonds”). The Bonds are being issued pursuant to a Resolution of Issuance adopted on January __, 2023, by the City Council of the City of Menifee, acting as the legislative body of the District, and the Bond Indenture, dated as of January 1, 2022, as supplemented and amended by the First Supplement to Bond Indenture, dated as of February 1, 2023 (together, the “Indenture”), by and between the District and Wilmington Trust, National Association, as trustee. The District covenants as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the District for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule.

Section 2. Definitions. In addition to the definitions set forth in the Indenture and the Rate and Method of Apportionment, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the District pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income purposes.
“City” shall mean the City of Menifee, County of Riverside, California. “Disclosure Representative” shall mean the Assistant City Manager of the City, or his or her designee, or such other officer or employee as the District shall designate in writing to the Dissemination Agent from time to time.
“Dissemination Agent” shall mean, initially, Spicer Consulting Group, LLC, or any successor Dissemination Agent designated in writing by the District and which has filed with the then current Dissemination Agent a written acceptance of such designation. “District” shall mean Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee.
“EMMA” shall mean the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board, which can be found at www.emma.msrb.org, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission in the future system of the MSRB.
“Financial Obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 107
Menifee Mayor and City Council
January 18, 2023
Page
836 of 1063

2 4877-5187-3338v5/200299-0014
obligation; or (iii) guarantee of (i) or (ii). The term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.
“Listed Events” shall mean any of the events listed in Section 5 of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org. “Official Statement” shall mean that certain Official Statement for the Bonds dated January __, 2023.
“Owners” shall mean the registered owners of the Bonds as set forth in the registration books maintained by the Trustee.
“Participating Underwriter” shall mean Stifel, Nicolaus & Company, Incorporated. “Rate and Method of Apportionment” shall mean that certain Rate and Method of Apportionment of Special Tax approved pursuant to the Resolution of Formation. “Resolution of Formation” shall mean the resolutions adopted by the City Council pursuant to which the City Council formed the District.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “State” shall mean the State of California.
“Trustee” shall mean Wilmington Trust, National Association or such other entity appointed by the District pursuant to the Indenture to act as the trustee under the Indenture.

Section 3. Provision of Annual Reports.
(a) Not later than March 1 of each year commencing March 1, [2023], the District shall, or shall cause the Dissemination Agent to provide to EMMA an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. If the Dissemination Agent is other than the District, then not later than 15 business days prior to the date referred to in the prior sentence hereof, the District shall provide the Annual Report (in a form suitable for filing with EMMA) to the Dissemination Agent. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the District, if any exist, may be submitted separately from and later than the balance of the Annual Report if they are not available by the date required above for the filing of the Annual Report. (b) In the event that the Dissemination Agent is an entity other than the District, then the provisions of this Section 3(b) shall apply. Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report, the District shall provide the Annual Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 108
Menifee Mayor and City Council
January 18, 2023
Page
837 of 1063

3 4877-5187-3338v5/200299-0014
Report to the Dissemination Agent. If by fifteen (15) Business Days prior to the due date for an Annual Report the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the District to determine if the District will be filing the Annual Report in compliance with subsection (a). The District shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the District and shall have no duty or obligation to review such Annual Report.
(c) If the Dissemination Agent is other than the District and if the Dissemination Agent is unable to verify that an Annual Report has been provided to EMMA by the date required in subsection (a), the Dissemination Agent shall send, in a timely manner, a notice to EMMA of the failure to file the Annual Report in the form required by EMMA. If the District acts as its own Dissemination Agent, it shall file a notice with EMMA no later than the date specified in subsection (a) for filing an Annual Report if the District fails to file the Annual Report by that date. (d) If the Dissemination Agent is other than the District, the Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the name and address of the repository if other than the MSRB through EMMA; and (ii) promptly after receipt of the Annual Report, file a report with the District certifying that the Annual Report has been provided to EMMA and the date it was provided. (e) Notwithstanding any other provision of this Disclosure Certificate, all filings shall be made in accordance with the MSRB’s EMMA system or in another manner approved under the Rule.

Section 4. Content of Annual Reports. The District’s Annual Report shall contain or include by reference the following:
(a) Financial Statements. The audited financial statements of the District for the prior fiscal year, if any have been prepared and which, if prepared, shall be prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the District’s audited financial statements, if any are prepared, are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Financial and Operating Data. The Annual Report shall contain or incorporate by reference the following information:
(i) the principal amount of the Bonds outstanding as of the September 2 preceding the filing of the Annual Report;
(ii) the balance in each fund under the Indenture as of the September 2 preceding the filing of the Annual Report;
(iii) the aggregate assessed valuation of the Taxable Property within the District; Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 109
Menifee Mayor and City Council
January 18, 2023
Page
838 of 1063

4 4877-5187-3338v5/200299-0014
(iv) any changes to the Rate and Method of Apportionment of Special Tax for the District approved or submitted to the qualified electors for approval prior to the filing of the Annual Report;
(v) a table setting forth the annual Special Tax delinquency rate within the District at June 30 of each fiscal year for which a delinquency exists, listing for each fiscal year, the total Special Tax levy, the amount delinquent and the percent delinquent; (vi) an update of the value-to-lien of the property within the District based on the assessed value and the Special Tax levy for the then current fiscal year, which update may be provided in a form similar to Table 2 in the Official Statement; provided that such update need not include overlapping special tax, assessment or general obligation indebtedness; and (vii) the status of any foreclosure actions being pursued by the District with respect to delinquent Special Taxes within the District. (c) Any or all of the items listed in (a) or (b) above may be included by specific reference to other documents, including official statements of debt issues of the District or related public entities, which have been submitted to EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB through EMMA. The District shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the District shall give, or cause the Dissemination Agent to give, notice to EMMA in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events with respect to the Bonds:

1. principal and interest payment delinquencies;

2. unscheduled draws on debt service reserves reflecting financial difficulties;

3. unscheduled draws on credit enhancements reflecting financial difficulties;

4. substitution of credit or liquidity providers, or their failure to perform;

5. adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds;

6. defeasances;

7. tender offers;

8. ratings changes; and

9. bankruptcy, insolvency, receivership or similar proceedings.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 110
Menifee Mayor and City Council
January 18, 2023
Page
839 of 1063

5 4877-5187-3338v5/200299-0014
Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S.

Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.

10. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties.
(b) Additionally, the District shall give or cause the Dissemination Agent to give notice to EMMA in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events with respect to the Bonds, if material:

1. mergers, consolidations, acquisitions, the sale of all or substantially all of the assets of the obligated persons or their termination;

2. appointment of a successor or additional fiscal agent or the change of the name of a fiscal agent;

3. nonpayment related defaults;

4. modifications to the rights of Bondholders;

5. bond calls;

6. release, substitution or sale of property securing repayment of the Bonds; and

7. incurrence of a Financial Obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders.
(c) In the event that the District’s fiscal year changes, the District shall report or shall instruct the Dissemination Agent to report such change in the same manner and to the same parties as Listed Events would be reported pursuant to this Section. (d) The District hereby agrees that the undertaking set forth in this Disclosure Certificate is the responsibility of the District, and the Dissemination Agent, if other than the District, shall not be responsible for determining whether the District’s instructions to the Dissemination Agent under this Section comply with the requirements of the Rule.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 111
Menifee Mayor and City Council
January 18, 2023
Page
840 of 1063

6 4877-5187-3338v5/200299-0014
Section 6. Termination of Reporting Obligation. The obligations of the District and the Dissemination Agent under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the District shall give notice of such termination in the same manner as for a Listed Event under Section 5.

Section 7. Dissemination Agent. The District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent, if other than the District, shall not be responsible in any manner for the content of any notice or report prepared by the District pursuant to this Disclosure Certificate.

The initial Dissemination Agent shall be Spicer Consulting Group, LLC. The Dissemination Agent may resign by providing (i) thirty (30) days written notice to the District and the Trustee and (ii) upon appointment of a new Dissemination Agent hereunder.

Section 8. Amendment; Waiver.
(a) This Disclosure Certificate may be amended, by written agreement of the parties, without the consent of the Owners, and any provision of this Disclosure Certificate may be waived, if all of the following conditions are satisfied: (1) such amendment or waiver is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law, or a change in the identity, nature or status of the District or the type of business conducted thereby, (2) the undertakings in this Disclosure Certificate as so amended or waived would, in the opinion of a nationally recognized bond counsel, have complied with the requirements of the Rule as of the date of this Disclosure Certificate, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, and (3) the amendment or waiver either (i) is approved by the Owners of the Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Owners or (ii) does not, in the determination of the District, materially impair the interests of the Owners or Beneficial Owners of the Bonds.
(b) To the extent any amendment to this Disclosure Certificate results in a change in the type of financial information or operating data provided pursuant to this Disclosure Certificate, the first Annual Report provided thereafter shall include a narrative explanation of the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
(c) If an amendment is made to the basis on which financial statements are prepared, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a quantitative and, to the extent reasonably feasible, qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information.

Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the District from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 112
Menifee Mayor and City Council
January 18, 2023
Page
841 of 1063

7 4877-5187-3338v5/200299-0014
addition to that which is required by this Disclosure Certificate. If the District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the District shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 10. Default. In the event of a failure of the District or the Dissemination Agent to comply with any provision of this Disclosure Certificate, any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District and/or the Dissemination Agent to comply with their respective obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the District or the Dissemination Agent to comply with this Disclosure Certificate shall be an action to compel performance.

Section 11. Duties, Immunities and Liabilities of Dissemination Agent. Where an entity other than the District is acting as the Dissemination Agent, the Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the District agrees to indemnify and save the Dissemination Agent and its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of their powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. Any Dissemination Agent shall be paid (i) compensation by the District for its services provided hereunder in accordance with a schedule of fees to be mutually agreed to; and (ii) all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the District pursuant to this Disclosure Certificate. The obligations of the District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. No person shall have any right to commence any action against the Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Certificate. The Dissemination Agent shall not be liable under any circumstances for monetary damages to any person for any breach under this Disclosure Certificate.

Section 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Certificate may be given as follows:

District: Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee
City of Menifee
29844 Haun Road
Menifee, CA 92586
Attn: Assistant City Manager
Underwriter: Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, CA 90067
Attn: Public Finance Department
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 113
Menifee Mayor and City Council
January 18, 2023
Page
842 of 1063

8 4877-5187-3338v5/200299-0014
Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notice or communications should be sent.

Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the District, the Trustee, the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Section 14. Merger. Any person succeeding to all or substantially all of the Dissemination Agent’s business shall be the successor Dissemination Agent without the filing of any paper or any further act.

This Disclosure Certificate is executed as of the date and year first set forth above.

COMMUNITY FACILITIES DISTRICT NO. 2020-1
(MCCALL MESA) OF THE CITY OF MENIFEE
By:

Rochelle Clayton
Disclosure Representative
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 114
Menifee Mayor and City Council
January 18, 2023
Page
843 of 1063

1 $_________
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2023A

BOND PURCHASE AGREEMENT
_________, 2023
City of Menifee
Community Facilities District No. 2020-1
(McCall Mesa)
29844 Haun Road
Menifee, California 92586
Ladies and Gentlemen:

Stifel, Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (this “Purchase Agreement”) with Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee (the “Community Facilities District”), which upon acceptance will be binding upon the Underwriter and the Community Facilities District. The agreement of the Underwriter to purchase the Bonds (as hereinafter defined) is contingent upon the Community Facilities District satisfying all of the obligations imposed upon them under this Purchase Agreement. This offer is made subject to the Community Facilities District’s acceptance by the execution of this Purchase Agreement and its delivery to the Underwriter at or before 11:59 P.M., local time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Community Facilities District at any time prior to the acceptance hereof by the Community Facilities District. All capitalized terms used herein, which are not otherwise defined, shall have the meaning provided for such terms in the Bond Indenture, dated as of January 1, 2022, as supplemented by that certain First Supplement to Bond Indenture, dated as of _______ 1, 2023, (together, the “Indenture”) each by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”).

1. Purchase, Sale and Delivery of the Bonds.

Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein: (i) the Underwriter hereby agrees to purchase from the Community Facilities District and the Community Facilities District hereby agrees to sell to the Underwriter all (but not less than all) of the $_______ aggregate principal amount of the Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee Special Tax Bonds, Series 2023A (the “Bonds”), dated the Closing Date (as hereinafter defined), bearing interest at the rates and maturing on the dates and in the principal amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be $_______ (being 100% of the aggregate principal amount thereof, plus a net original issue premium of $_______ and less an Underwriter’s discount of $_______).

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 115
Menifee Mayor and City Council
January 18, 2023
Page
844 of 1063

2 The Underwriter agrees to make a bona fide public offering of all of the Bonds initially at the public offering prices (or yields) set forth in Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds subject to Section 2 hereof, provided that the Underwriter shall not change the interest rates set forth in Exhibit A. The Bonds may be offered and sold to certain dealers at prices lower than such initial offering prices.

The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from the Net Taxes as provided in the Indenture, the Preliminary Official Statement (as hereinafter defined), and the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Community Facilities District Act”). The issuance of the Bonds has been duly authorized by the City Council of the City of Menifee (the “City”), as the legislative body for the Community Facilities District, pursuant to a resolution (the “Community Facilities District Resolution of Issuance”) adopted on ________, 2023.

The proceeds of the Bonds will be used to (i) finance certain public improvements needed with respect to the development of property located within the Community Facilities District, including public improvements to be owned by the City, and school facilities to be owned and operated by Romoland School District; (ii) fund a deposit to the reserve fund securing the Bonds and the 2022 Bonds (defined below); and (iii) pay costs of issuance for the Bonds.

The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from special taxes as provided in the Indenture (the “Special Taxes”) on a parity with the Community Facilities District’s Special Tax Bonds, Series 2022A, which are currently outstanding in the aggregate principal amount of $11,275,000 (the “2022 Bonds”).

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

The Community Facilities District acknowledges and agrees that (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm’s-length commercial transaction between the Community Facilities District and the Underwriter, (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and not as the agent or fiduciary of the Community Facilities District, (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the Community Facilities District with respect to (a) the offering of the Bonds or the process leading thereto (whether or not the Underwriter, or any affiliate of the Underwriter, has advised or is currently advising the Community Facilities District on other matters) or (b) any other obligations to the Community Facilities District with respect to the offering contemplated hereby, except the obligations expressly set forth in this Purchase Agreement or otherwise imposed by law, (iv) the Underwriter has financial interests that differ from those of the Community Facilities District and (v) the Community Facilities District has consulted with their own Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 116
Menifee Mayor and City Council
January 18, 2023
Page
845 of 1063

3 legal, financial and other advisors to the extent they have deemed appropriate in connection with this transaction. The Community Facilities District acknowledges that it has previously provided the Underwriter with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the Municipal Securities Rulemaking Board (“MSRB”). The Community Facilities District acknowledges and represents that it has engaged Urban Futures Incorporated as its municipal advisor (the “Municipal Advisor”) (as defined in Securities and Exchange Commission Rule 15Ba1) and will rely solely on the financial advice of Urban Futures Incorporated with respect to the Bonds.

B. Pursuant to the authorization of the Community Facilities District, the Underwriter has distributed copies of the Preliminary Official Statement dated ______, 2023, relating to the Bonds, which, together with the cover page, inside cover page and appendices thereto is herein called the “Preliminary Official Statement.” By its acceptance of this Purchase Agreement, the Community Facilities District hereby ratifies the use by the Underwriter of the Preliminary Official Statement, and the Community Facilities District agrees to execute a final official statement relating to the Bonds (including any supplements and/or amendments thereto, the “Official Statement”) which will consist of the Preliminary Official Statement with such changes as may be made thereto, with the approval of Stradling Yocca Carlson & Rauth, a Professional Corporation, Bond Counsel (“Bond Counsel”), Stradling Yocca Carlson & Rauth, a Professional Corporation, Disclosure Counsel (“Disclosure Counsel”), and the Underwriter, and to provide copies thereof to the Underwriter as set forth herein. The Community Facilities District hereby authorizes and requires the Underwriter to use and promptly distribute, in connection with the offer and sale of the Bonds, the Preliminary Official Statement, the Official Statement and any supplement or amendment thereto.

The Community Facilities District further authorizes the Underwriter to use and distribute, in connection with the offer and sale of the Bonds, the Indenture, the Continuing Disclosure Certificate executed by the Community Facilities District in connection with the Bonds (the “Continuing Disclosure Certificate”), this Purchase Agreement and all information contained herein, and all other documents, certificates and statements furnished by or on behalf of the Community Facilities District to the Underwriter in connection with the transactions contemplated by this Purchase Agreement.

C. To assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the “Rule”), the Community Facilities District will undertake pursuant to the Continuing Disclosure Certificate, in the form attached to the Official Statement as Appendix F, to provide annual reports and notices of certain enumerated events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement.

D. Except as the Underwriter and the Community Facilities District may otherwise agree, the Community Facilities District will deliver to the Underwriter, at the offices of Bond Counsel in Newport Beach, California, or at such other location as may be mutually agreed upon by the Underwriter and the Community Facilities District, the documents hereinafter mentioned; and the Community Facilities District will deliver to the Underwriter through the facilities of The Depository Trust Company (“DTC”), the Bonds, in definitive form (all Bonds bearing CUSIP numbers), duly executed by the Community Facilities District and authenticated by the Trustee in the manner provided for in the Indenture and the Community Facilities District Act at 8:00 a.m. California time, on _______, 2023 (the “Closing Date”), and the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in paragraph (A) of this Section by wire transfer, payable in federal or other immediately available funds (such delivery and payment Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 117
Menifee Mayor and City Council
January 18, 2023
Page
846 of 1063

4 being herein referred to as the “Closing”). The Bonds shall be in fully registered book-entry form (which may be typewritten) and shall be registered in the name of Cede & Co., as nominee of DTC.

2. Establishment of Issue Price.

A. The Underwriter agrees to assist the Community Facilities District in establishing the issue price of the Bonds and shall execute and deliver to the Community Facilities District at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit C, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Community Facilities District and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds.

B. Except as otherwise set forth in Exhibit A attached hereto, the Community Facilities District will treat the first price at which 10% of each maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Community Facilities District the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Community Facilities District the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the public.

C. The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also sets forth, as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the Underwriter represents that (i) the 10% test has been satisfied (assuming orders are confirmed by the close of the business day immediately following the date of this Purchase Agreement) and (ii) the 10% test has not been satisfied and for which the Community Facilities District and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Community Facilities District to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:

1. the close of the fifth (5th) business day after the sale date; or

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

The Underwriter shall promptly advise the Community Facilities District when it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 118
Menifee Mayor and City Council
January 18, 2023
Page
847 of 1063

5 D. The Underwriter confirms that:
(i) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(A)(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter,
(B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(ii) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.

E. The Community Facilities District acknowledges that, in making the representation set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the- offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 119
Menifee Mayor and City Council
January 18, 2023
Page
848 of 1063

6 F. The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.

Further, for purposes of this section:

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

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

3. a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and

4. “sale date” means the date of execution of this Purchase Agreement by all parties.

3. Representations, Warranties and Covenants of the Community Facilities District.

The Community Facilities District represents, warrants and covenants to the Underwriter on behalf of itself and the City that:

A. The City is duly organized and validly existing as a general law city under the Constitution and laws of the State of California and has duly authorized the formation of the Community Facilities District pursuant to resolutions duly adopted by the City Council (the “Community Facilities District Formation Resolution” and, together with the Community Facilities District Resolution of Issuance, the “Community Facilities District Resolutions”) and the Community Facilities District Act. The City Council, as the legislative body of the City and the Community Facilities District, has duly adopted the Community Facilities District Formation Resolution, and has caused to be recorded in the real property records of the County of Riverside, notice of special tax lien, and any required amendments thereof (collectively, the “Notice of Special Tax Lien”) (the Community Facilities District Formation Resolution and Notice of Special Tax Lien being collectively referred to herein as the “Formation Documents”), and has duly adopted the Community Facilities District Resolution of Issuance. Each of its Formation Documents remains in full force and effect as of the date hereof and has not been amended. The Community Facilities District is duly organized and validly existing as a Community Facilities District under the laws of the State of California. The Community Facilities District has, and at the Closing Date will have, as the case may be, full legal right, power and authority: (i) to execute, deliver and perform its Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 120
Menifee Mayor and City Council
January 18, 2023
Page
849 of 1063

7 obligations under this Purchase Agreement, the Continuing Disclosure Certificate and the Indenture, and to carry out all transactions contemplated by each of such agreements; (ii) to issue, sell and deliver the Bonds as provided herein; and (iii) to carry out, give effect to and consummate the transactions contemplated by the Formation Documents, the Indenture, the Bonds, the Continuing Disclosure Certificate, this Purchase Agreement and the Official Statement.

This Purchase Agreement, the Indenture, the Bonds and the Continuing Disclosure Certificate are collectively referred to herein as the “Community Facilities District Documents.” B. The Community Facilities District and the City, as applicable, have each complied, and will at the Closing Date be in compliance in all material respects, with the Formation Documents and the Community Facilities District Documents, and any immaterial noncompliance by the Community Facilities District and the City, if any, will not impair the ability of the Community Facilities District and the City, as applicable, to carry out, give effect to or consummate the transactions contemplated by the foregoing. From and after the date of issuance of the Bonds, the Community Facilities District will continue to comply with the covenants of the Community Facilities District contained in the Community Facilities District Documents.

C. The information in the Preliminary Official Statement and in the Official Statement relating to the Community Facilities District and the Bonds (other than information under the captions “PROPERTY OWNERSHIP AND THE DEVELOPMENT,” and “UNDERWRITING,” Appendices D and G, information provided by Lennar Homes of California, LLC (the “Developer”), the Appraiser and the Special Tax Consultant (as such terms are defined herein) and statements pertaining to the book entry system, as to which no view is expressed), is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and, upon delivery and up to and including 25 days after the End of the Underwriting Period (as defined in paragraph (D) below), the Official Statement will be amended and supplemented so as to contain no misstatement of any material fact or omission of any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading.

D. Up to and including 25 days after the End of the Underwriting Period (as defined below), the Community Facilities District will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The Community Facilities District will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise materially affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. As used herein, the term “End of the Underwriting Period” means the later of such time as: (i) the Bonds are delivered to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the End of the Underwriting Period shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the Community Facilities District at or prior to the Closing Date and shall specify a date (other than the Closing Date) to be deemed the “End of the Underwriting Period.” E. Except as described in the Preliminary Official Statement and Official Statement, the Community Facilities District is not, in any respect material to the transactions Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 121
Menifee Mayor and City Council
January 18, 2023
Page
850 of 1063

8 referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, and the performance of its obligations under the Community Facilities District Documents and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed by the Community Facilities District pursuant to this Purchase Agreement, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance by the Community Facilities District of its obligations under the Community Facilities District Documents or the performance of the conditions precedent to be performed by the Community Facilities District pursuant to this Purchase Agreement.

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

G. The Community Facilities District Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement.

H. The Bonds are payable from the Special Tax of the Community Facilities District, as set forth in the Indenture, the levy of which has been duly and validly authorized pursuant to the Community Facilities District Act and the Community Facilities District will covenant in the Indenture to levy the Special Taxes within the Community Facilities District in an amount which, together with other available funds, is required for the payment of the principal of, and interest on, the Bonds when due and payable, all as provided in the Indenture.

I. The Indenture creates a valid pledge of, first lien upon and security interest in, the Net Taxes, and in the moneys in the Special Tax Fund (other than the Administrative Expense Account) established pursuant to the Indenture, on the terms and conditions set forth in the Indenture.

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

K. The Preliminary Official Statement was deemed final by a duly authorized officer of the Community Facilities District prior to its delivery to the Underwriter, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of the Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 122
Menifee Mayor and City Council
January 18, 2023
Page
851 of 1063

9 Rule. The Community Facilities District hereby covenants and agrees that, within seven (7) business days from the date hereof, or upon reasonable written notice from the Underwriter within sufficient time to accompany any confirmation requesting payment from any customers of the Underwriter, the Community Facilities District shall cause a final printed form of the Official Statement to be delivered to the Underwriter in sufficient quantity to comply with paragraph (b)(4) of the Rule and Rules G-12, G-15, G-32 and G-36 of the Municipal Securities Rulemaking Board.

L. At the time of acceptance hereof there is and as of the Closing there will be no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body (collectively and individually, an “Action”) pending (notice of which has been served on the Community Facilities District) or to the best knowledge of the Community Facilities District or the City threatened, in which any such Action: (i) in any way questions the existence of the Community Facilities District or the titles of the officers of the Community Facilities District to their respective offices; (ii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of the Bonds or the payment or collection of Special Taxes or any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contests or affects the validity of the Community Facilities District Documents or the consummation of the transactions on the part of the Community Facilities District contemplated thereby; (iii) contests the exemption of interest on the Bonds from federal or State income taxation or contests the powers of the Community Facilities District which may result in any material adverse change relating to the financial condition of the Community Facilities District; or (iv) contests the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserts that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and as of the time of acceptance hereof there is and, as of the Closing Date, there will be no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence.

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

N. At or prior to the Closing the Community Facilities District will have duly authorized, executed and delivered the Continuing Disclosure Certificate in substantially the form attached as Appendix F to the Official Statement. Based upon a review of its previous undertakings, and except as disclosed in the Preliminary Official Statement, the Community Facilities District has not failed to comply in all respects with any previous undertakings with regard to the Rule to provide annual reports or notices of enumerated events in the last five years.

O. The Community Facilities District will apply the proceeds of the Bonds in accordance with the Indenture and as described in the Official Statement.

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

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 123
Menifee Mayor and City Council
January 18, 2023
Page
852 of 1063

10 Q. Between the date of this Purchase Agreement and the date of Closing, the Community Facilities District will not offer or issue any bonds, notes or other obligations for borrowed money not previously disclosed to the Underwriter.

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

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

4. Conditions to the Obligations of the Underwriter. The obligation of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the Community Facilities District contained herein, to the accuracy in all material respects of the statements of the officers and other officials of the Community Facilities District made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the Community Facilities District of its obligations to be performed hereunder at or prior to the Closing Date, and in reliance upon the representations and covenants of the Developer contained in the certificates delivered as of the Closing Date, and to the following additional conditions:

A. At the Closing Date, the Community Facilities District Resolutions and the Community Facilities District Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the Bonds, and with the transactions contemplated thereby, and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel, shall be necessary and appropriate.

B. At the Closing Date, except as described in the Official Statement, the City shall not be, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, and the performance of the conditions precedent to be performed hereunder will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance of the conditions precedent to be performed by the City hereunder.

C. At the Closing Date, except as described in the Official Statement, the Community Facilities District shall not be, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 124
Menifee Mayor and City Council
January 18, 2023
Page
853 of 1063

11 regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, and the performance by the Community Facilities District of its obligations under the Bonds, the Community Facilities District Resolutions, the Indenture, and any other instruments contemplated by any of such documents, and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed hereunder, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance by the Community Facilities District of its obligations under the Indenture, the Bonds or the performance of the conditions precedent to be performed by the Community Facilities District hereunder.

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

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

1. Legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration, or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department of the United States of America or the Internal Revenue Service, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon such interest as would be received by any owners of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; or

2. Legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 125
Menifee Mayor and City Council
January 18, 2023
Page
854 of 1063

12 Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the federal securities laws as amended and then in effect; or

3. A general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction; or

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

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

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

7. There shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (2) any other calamity or crisis in the financial markets of the United States or elsewhere or the escalation of such calamity or crisis; or

8. Except as disclosed in or contemplated by the Official Statement, any material adverse change in the affairs of the City or Community Facilities District shall have occurred; or

9. Any event or circumstance shall exist that either makes untrue or incorrect in any material respect any statement or information in the Official Statement (other than any statement provided by the Underwriter) or is not reflected in the Official Statement but should be reflected therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and, in either such event, the Community Facilities District refuses to permit the Official Statement to be supplemented to supply such statement or information, or the effect of the Official Statement as so supplemented is to materially adversely affect the market price Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 126
Menifee Mayor and City Council
January 18, 2023
Page
855 of 1063

13 or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; or

10. A general banking moratorium shall have been declared by federal or State authorities having jurisdiction and be in force; or

11. A material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; or

12. Any new restriction on transactions in securities materially affecting the market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a charge to the net capital requirements of, underwriters shall have been established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or

13. A decision by a court of the United States shall be rendered, or a stop order, release, regulation or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made, to the effect that the issuance, offering or sale of the Bonds, including the underlying obligations as contemplated by this Purchase Agreement or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended and the Trust Indenture Act of 1939, as amended; or

14. Any proceeding shall have been commenced or be threatened in writing by the Securities and Exchange Commission against the City or the Community Facilities District; or

15. The commencement of any Action.

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

1. The Official Statement, executed on behalf of the Community Facilities District by an authorized officer;

2. The Indenture, duly executed and delivered by the Community Facilities District and the Trustee;

3. The Community Facilities District Resolution, the Community Facilities District Documents and the Formation Documents, together with a certificate dated as of the Closing Date of the City Clerk to the effect that the Community Facilities District Resolutions are true, correct and complete copies of the ones duly adopted by the City Council;

4. The Continuing Disclosure Certificate executed and delivered by an authorized officer the Community Facilities District;

5. An unqualified approving opinion for the Bonds, dated the Closing Date and addressed to the Community Facilities District, of Bond Counsel, to the effect that the Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 127
Menifee Mayor and City Council
January 18, 2023
Page
856 of 1063

14 Bonds are the valid, legal and binding obligations of the Community Facilities District and that the interest thereon is excluded from gross income for federal income tax purposes and exempt from personal income taxes of the State of California, in substantially the form included as Appendix C to the Official Statement, together with a letter of Bond Counsel, dated the Closing Date and addressed to the Underwriter, to the effect that such opinion addressed to the Community Facilities District may be relied upon by the Underwriter to the same extent as if such opinion was addressed to it;

6. A supplemental opinion or opinions, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, to the effect that:
(i) this Purchase Agreement and the Continuing Disclosure Certificate have been duly authorized, executed and delivered by the Community Facilities District and, assuming due authorization, execution and delivery by the other parties thereto, as applicable, constitutes the legal, valid and binding obligations of the Community Facilities District and are enforceable in accordance with their terms, except to the extent that enforceability may be limited by moratorium, bankruptcy, reorganization, insolvency or other similar laws affecting creditors’ rights generally or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases and by limitations on legal remedies against public agencies in the State;
(ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended;
(iii) the information contained in the Official Statement on the cover and under the captions “THE 2023 BONDS” (other than the caption “Debt Service Schedule”), “SOURCES OF PAYMENT FOR THE BONDS,” “TAX EXEMPTION” and “LEGAL OPINION” and in Appendices C and E to the Official Statement, are accurate insofar as such statements purport to summarize certain provisions of the Bonds, the Indenture, Bond Counsel’s final approving opinion, and the Community Facilities District Act.

7. The letter of Disclosure Counsel, dated the Closing Date and addressed to the Community Facilities District and to the Underwriter, to the effect that, without having undertaken to determine independently the accuracy or completeness of the statements contained in the Official Statement, but on the basis of their participation in conferences with representatives of the Community Facilities District, the Special Tax Consultant and others, and their examination of certain documents, nothing has come to their attention which has led them to believe that the Preliminary Official Statement as of its date and the Official Statement as of its date and as of the Closing Date contained or contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial statements or other financial, statistical or engineering data or forecasts, numbers, charts, estimates, projections, assumptions, or expressions of opinion, any information about valuation, appraisals, absorption, archeological or environmental matters, or any information with respect to the City or about DTC or the book-entry-only system);

8. A certificate dated the Closing Date and signed by an authorized representative of the Community Facilities District or an authorized designee, on behalf of the Community Facilities District to the effect that: (i) the representations and warranties made by the Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 128
Menifee Mayor and City Council
January 18, 2023
Page
857 of 1063

15 Community Facilities District contained herein are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) to the best knowledge of such officer, no event has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (iii) the Community Facilities District has complied with all the agreements and satisfied all the conditions on its part to be satisfied under this Purchase Agreement, the Community Facilities District Resolutions, and the Community Facilities District Documents at or prior to the Closing Date;

9. An opinion of the City Attorney dated the date of Closing and addressed to the Underwriter and the City, to the effect that:
(i) The City is a municipal corporation and general law city, duly organized and existing under the Constitution and laws of the State of California; (ii) The Community Facilities District Resolutions have been duly adopted at meetings of the City Council, which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Community Facilities District Resolutions are in full force and effect and have not been modified, amended, rescinded or repealed since the respective dates of their adoption; (iii) The Community Facilities District Documents and the Official Statement have been duly authorized, executed and delivered by the City and the Community Facilities District Documents constitute the legal, valid and binding obligations of the Community Facilities District enforceable against the Community Facilities District in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights, to the application of equitable principles where equitable remedies are sought and to the exercise of judicial discretion in appropriate cases; (iv) Except as may be stated in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the City or the Community Facilities District) or, to such counsel’s knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City, or the titles of its members and officers to their respective offices; or (b) affect the validity of the Community Facilities District Documents or restrain or enjoin the repayment of the Bonds or in any way contest or affect the validity of the Community Facilities District Documents or contest the authority of the Community Facilities District to enter into or perform its obligations under any of the Community Facilities District Documents, questions the right of the Community Facilities District to use Special Taxes levied within the Community Facilities District for the repayment of the Bonds or affects in any manner the right or ability of the Community Facilities District to collect the Special Taxes or pledge the Net Taxes levied within the Community Facilities District for the repayment of the Bonds;

10. A certificate dated the Closing Date from Kitty Siino & Associates, Inc. (the “Appraiser”) to the effect that: (i) the statements in the Official Statement provided by the Appraiser and all information supplied by it for use in the Official Statement were as of the date of the Official Statement and are as of the Closing Date true and correct, and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 129
Menifee Mayor and City Council
January 18, 2023
Page
858 of 1063

16 therein, in light of the circumstances under which they were made, not misleading and (ii) no events or occurrences have been ascertained by the Appraiser or have come to the Appraiser’s attention since November 10, 2022 that would materially change the opinion set forth in the Appraisal;

11. A certificate dated the Closing Date from Spicer Consulting Group, LLC to the effect that: (i) the Special Tax if collected in the maximum amounts permitted pursuant to the Rate and Method of Apportionment of Special Taxes of the Community Facilities District as of the Closing Date would generate at least 110% of the annual debt service payable with respect to the Bonds and 2022 Bonds plus the Administrative Expenses Cap in each year, based on such assumptions and qualifications as shall be acceptable to the Underwriter; and (ii) the statements in the Official Statement provided by Spicer Consulting Group, LLC concerning Special Taxes in the Community Facilities District and all information supplied by it for use in the Official Statement were as of the date of the Official Statement and are as of the Closing Date true and correct, and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;

12. Certified copies of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee, which resolution authorizes the execution of the Indenture and the authentication of the Bonds;

13. A certificate of the Trustee, dated the Closing Date, to the effect that:
(i) the Trustee is authorized to carry out corporate trust powers, and has full power and authority to perform its duties under the Indenture; (ii) the Trustee is duly authorized to execute and deliver the Indenture, to accept the obligations created by the Indenture and to authenticate the Bonds pursuant to the terms of the Indenture; (iii) no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the authentication of the Bonds or the consummation by the Trustee of the other transactions contemplated to be performed by the Trustee in connection with the authentication of the Bonds and the acceptance and performance of the obligations created by the Indenture; and (iv) to the best of its knowledge, compliance with the terms of the Indenture will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which the Trustee is a party or by which it is bound, or any law or any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Trustee or any of its activities or properties;

14. An opinion of counsel to the Trustee dated the Closing Date, addressed to the Underwriter, and the Community Facilities District to the effect that the Trustee is a national banking association duly organized and validly existing under the laws of the United States having full power and being qualified to enter into, accept and agree to the provisions of the Indenture, and that such documents has been duly authorized, executed and delivered by the Trustee, and, assuming due execution and delivery by the other parties thereto, constitutes the legal, valid and binding obligation of the Trustee, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by the application of equitable principles if equitable remedies are sought;
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 130
Menifee Mayor and City Council
January 18, 2023
Page
859 of 1063

17 15. A certificate of the Community Facilities District dated the Closing Date, in a form acceptable to Bond Counsel and the Underwriter, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended;

16. The certificates and opinions required pursuant to Section 9.2 of the Indenture for the issuance of the Bonds as Parity Bonds pursuant to the Indenture;

17. An opinion of counsel to the Developer, dated the date of the Closing, addressed to the Underwriter and the Community Facilities District, in form and substance acceptable to the Underwriter and Bond Counsel;

18. A Letter of Representations from the Developer, dated the date of the Preliminary Official Statement, substantially in the form attached hereto as Exhibit B;

19. A Closing Certificate of the Developer, dated the date of the Closing, substantially in the form attached hereto as Exhibit A to the Letter of Representations from the Developer or as such Closing Certificate may be modified with the approval of the Underwriter and Disclosure Counsel;

20. An opinion of Kutak Rock LLP, counsel to the Underwriter (“Underwriter’s Counsel”), dated the date of Closing and addressed to the Underwriter in form and substance acceptable to the Underwriter; and

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

If the Community Facilities District shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Community Facilities District nor the Underwriter shall be under any further obligation hereunder, except that the respective obligations of the Underwriter and the Community Facilities District set forth in Section 5 hereof shall continue in full force and effect.

5. Expenses. Whether or not the transactions contemplated by this Purchase Agreement are consummated, the Underwriter shall be under no obligation to pay, and the Community Facilities District shall pay only from the proceeds of the Bonds, or any other legally available funds of the City, or the Community Facilities District, but only as the Community Facilities District and such other party providing such services may agree, all expenses and costs of the Community Facilities District incident to the performance of its obligations in connection with the authorization, execution, sale and delivery of the Bonds to the Underwriter, including, without limitation, printing costs, rating agency fees and charges, initial fees of the Trustee, including fees and disbursements of its counsel, if any, fees and disbursements of Bond Counsel, Disclosure Counsel and other professional advisors Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 131
Menifee Mayor and City Council
January 18, 2023
Page
860 of 1063

18 employed by the City, costs of preparation, printing, signing, transportation, delivery and safekeeping of the Bonds and for expenses (included in the expense component of the Underwriter’s discount) incurred by the Underwriter on behalf of the City’s employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, lodging, and entertainment of those employees. The Underwriter shall pay all out-of-pocket expenses of the Underwriter, including, without limitation, advertising expenses, the California Debt and Investment Advisory Commission fee, CUSIP Services Bureau charges, regulatory fees imposed on new securities issuers and any and all other expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds, including fees and disbursements of Underwriter’s Counsel. Any meals in connection with or adjacent to meetings, rating agency presentations, pricing activities or other transaction-related activities shall be considered an expense of the transaction and included in the expense component of the Underwriter’s discount.

6. Notices. Any notice of other communication to be given to the Community Facilities District or the City under this Purchase Agreement may be given by delivering the same in writing to the City of Menifee, 29844 Haun Road, Menifee, California 92586, Attention: City Manager; any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, 2121 Avenue of the Stars, Suite 2150, Los Angeles, California 90067, Attention: Public Finance Department.

7. Parties In Interest. This Purchase Agreement is made solely for the benefit of the Community Facilities District and Underwriter (including any successors or assignees of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof.

8. Survival of Representations and Warranties. The representations and warranties of the Community Facilities District under this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the Community Facilities District and regardless of delivery of and payment for the Bonds.

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

10. No Prior Agreements. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understanding among the parties hereto in relation to the sale of the Bonds by the Community Facilities District.

11. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 132
Menifee Mayor and City Council
January 18, 2023
Page
861 of 1063

S-1

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

Very truly yours,

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Its: Authorized Officer
The foregoing is hereby agreed to and accepted as of the date first above written:

COMMUNITY FACILITIES DISTRICT
NO. 2020-1 (MCCALL MESA) OF THE

CITY OF MENIFEE
By:

Authorized Officer
Time of Execution: _____________ p.m. California time
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 133
Menifee Mayor and City Council
January 18, 2023
Page
862 of 1063

A-1

EXHIBIT A
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2023A

MATURITY SCHEDULE
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not
Satisfied
Subject to
Hold-The-
Offering-
Price Rule
(marked if
used)
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
20__(T)
20__(T)
20__(T)
_________________
(T) Term Bond.
(C) Priced to optional call at [par] on September 1, 20__. * At the time of execution of this Purchase Agreement and assuming orders are confirmed by the close of the business day immediately following the date of this Purchase Agreement.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 134
Menifee Mayor and City Council
January 18, 2023
Page
863 of 1063

B-1

EXHIBIT B
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2023A

LETTER OF REPRESENTATIONS OF LENNAR HOMES OF CALIFORNIA, LLC ________, 2023
City of Menifee
Community Facilities District No. 2020-1
29844 Haun Road
Menifee, California 92586
Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, California 90067
Ladies and Gentlemen:

Reference is made to Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee Special Tax Bonds, Series 2023A (the “Bonds”) and to the Bond Purchase Agreement to be entered into in connection therewith (the “Bond Purchase Agreement”). This Letter of Representations of Lennar Homes of California, LLC (the “Letter of Representations”) is delivered pursuant to and in satisfaction of Section 4(F)(18) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement.

The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of Lennar Homes of California, LLC, a California limited liability company (the “Developer”), and the undersigned, on behalf of the Developer, further certifies as follows:

1. The Developer is duly organized and validly existing under the laws of the State of California and in good standing under the laws of the State of California, and has all requisite corporate right, power and authority: (i) to execute and deliver this Letter of Representations; and (ii) to undertake all of the transactions on its part described in the Preliminary Official Statement..

2. As set forth in the Preliminary Official Statement, title to a certain portion of the property within Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee (the “Community Facilities District”) is held in the name of the Developer (herein, the “Property”). The undersigned, on behalf of the Developer, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Developer is and the Developer’s current expectations are that the Developer shall remain the party responsible for the development of the Property. The Developer has not entered into an Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 135
Menifee Mayor and City Council
January 18, 2023
Page
864 of 1063

B-2
agreement for development or management of the Property by any other entity, except such subcontracts, consultant agreements and similar agreements for land development activities associated with the Developer’s development plan as are entered into in the ordinary course of business.

3. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, or public board or body is pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, is pending against any current Affiliate (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against the Developer or any such Affiliate (a) to restrain or enjoin the collection of Special Taxes or other sums pledged or to be pledged to pay the principal of and interest on the Bonds (e.g., the Reserve Account of the Special Tax Fund established under the Indenture), (b) to restrain or enjoin the development of the Property as described in the Preliminary Official Statement, (c) in any way contesting or affecting the validity of the Special Taxes, or (d) which, if successful, is reasonably likely to materially and adversely affect the Developer’s ability to complete the development and sale of the Property as described in the Preliminary Official Statement or to pay the Special Taxes levied against the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency.

4. As of the date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information contained therein solely with respect to the Developer, its Affiliates, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) as set forth under the section of the Preliminary Official Statement captioned “PROPERTY OWNERSHIP AND THE DEVELOPMENT” (excluding therefrom in all cases information regarding the Appraisal Report (as defined herein), market value ratios and annual special tax ratios, and information which is identified as having been provided by a source other than the Developer), is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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

6. To the Actual Knowledge of the Undersigned, the Developer is not aware that any of the Property has a current liability with respect to the presence of a substance presently classified as hazardous under the federal Comprehensive Environmental Response, Compensation and Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 136
Menifee Mayor and City Council
January 18, 2023
Page
865 of 1063

B-3
Liability Act of 1980 or applicable California law or is adversely affected by the presence of endangered or threatened species or habitat for endangered or threatened species.

7. The Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Developer and its Affiliates which it controls will not bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body, that in any way seeks to challenge or overturn the formation of the Community Facilities District, to challenge the adoption of the ordinance of the Community Facilities District levying Special Taxes within the Community Facilities District, to invalidate the Community Facilities District or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent the Developer and its Affiliates in any way from bringing any other action, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body including, without limitation, (a) an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the Rate and Method of Apportionment of Special Taxes pursuant to which Special Taxes are levied, (b) an action or suit with respect to the application or use of the Special Taxes levied and collected or (c) an action or suit to enforce the obligations of the City and/or the Community Facilities District under the Community Facilities District Resolutions, the Indenture, or any other agreements among the Developer or its Affiliates, the City and/or the Community Facilities District or to which the Developer or its Affiliates is a party or beneficiary.

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

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

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

11. To the Actual Knowledge of the Undersigned, Affiliates of the Developer are able to pay their bills as they become due and no legal proceedings are pending against any Affiliate of the Developer (with proper service of process having been accomplished) or to the Actual Knowledge of the Undersigned, threatened in writing in which the Affiliates of the Developer may be adjudicated as bankrupt or discharged from any or all of their debts or obligations, or granted an extension of time to pay their debt or obligations, or be allowed to reorganize or readjust their debts or obligations, or be subject to control or supervision of the Federal Deposit Insurance Corporation, which is reasonably likely to materially and adversely affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 137
Menifee Mayor and City Council
January 18, 2023
Page
866 of 1063

B-4
to pay the Special Taxes levied against the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency.

12. The Developer has been developing or has been involved in the development of numerous projects over an extended period of time. It is likely that the Developer has been delinquent at one time or another in the payment of ad valorem property taxes, special taxes or special assessments. However, to the Actual Knowledge of the Undersigned, during the last five years, neither the Developer nor any current Affiliate has, during the period of its ownership, been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property in California owned by the Developer or any such Affiliate (during the period of their ownership) included within the boundaries of a community facilities district or an assessment district in California that (a) caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the delinquent Developer or Affiliate by a court filing.

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

14. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities by and among the Developer, its Affiliates or any contractors working on the development of the Property which is reasonably likely to materially and adversely affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Taxes levied against the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency.

15. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real property, including, but not limited to, the risks described in the Preliminary Official Statement under the section entitled “SPECIAL RISK FACTORS,” the Developer presently anticipates that it will have sufficient funds to complete the development of the Property as described in the Preliminary Official Statement and to pay the Special Taxes levied against the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency and does not anticipate that the City or the Community Facilities District will be required to resort to a draw on the Reserve Account of the Special Tax Fund for payment of principal of or interest on the Bonds due to the Developer’s nonpayment of Special Taxes. However, neither the Developer nor any of its Affiliates are obligated to pay the Special Taxes or to make any additional capital contribution or loan to the Developer at any time, and the Developer reserves the right to change its respective development plan and financing plan for the Property at any time without notice, and there is no recourse against the Developer for the failure to pay the Special Taxes other than the filing of a foreclosure action.

16. An appraisal of the taxable properties within the Community Facilities District, dated [November 17, 2022] (the “Appraisal Report”), with a date of value of November 10, 2022 (the “Date of Value”), was prepared by Kitty Siino & Associates, Inc. (the “Appraiser”). The Appraisal Report estimates the market value of the appraised taxable properties within the Community Facilities District as of the Date of Value. To Actual Knowledge of the Undersigned, all information submitted by, or on behalf of and authorized by, the Developer to the Appraiser and contained in the sections of the Appraisal Report highlighted in yellow or circled in Exhibit B attached hereto, was true and correct in all material respects as of the Date of Value.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 138
Menifee Mayor and City Council
January 18, 2023
Page
867 of 1063

B-5

17. If between the date hereof and the Closing Date any event relating to or affecting the Developer, its Affiliates, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) shall occur of which the Developer has actual knowledge which would cause the information under the sections of the Preliminary Official Statement indicated in paragraph 4 hereof (and subject to the limitations and exclusions contained in paragraph 4 hereof), to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Developer shall notify the City, the Community Facilities District and the Underwriter and if in the opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the information described in the section of the Preliminary Official Statement referenced in paragraph 4 hereof (and subject to the limitations and exclusions contained in paragraph 4 hereof), the Developer shall reasonably cooperate with the City and the Community Facilities District in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance satisfactory to counsel to the City, the Community Facilities District and to the Underwriter.

18. The Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached as Exhibit A.

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

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

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

Name:

Title:

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 139
Menifee Mayor and City Council
January 18, 2023
Page
868 of 1063

B-6
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 140
Menifee Mayor and City Council
January 18, 2023
Page
869 of 1063

B-7

EXHIBIT A
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2023A

CLOSING CERTIFICATE OF LENNAR HOMES OF CALIFORNIA, LLC
[Closing Date]
City of Menifee
Community Facilities District No. 2020-1
29844 Haun Road
Menifee, California 92586
Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, California 90067
Ladies and Gentlemen:

Reference is made to the above-captioned bonds (the “Bonds”) and to the Bond Purchase Agreement, dated [BPA Date] (the “Bond Purchase Agreement”), entered into in connection therewith. This Closing Certificate of Lennar Homes of California, LLC (the “Closing Certificate”) is delivered pursuant to the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Letter of Representations (the “Letter of Representations”), dated [POS Date], delivered by Lennar Homes of California, LLC, a California limited liability company (the “Developer”).

The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of the Developer, and the undersigned, on behalf of the Developer, further certifies as follows:

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

2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement affecting the statements and information described in paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in paragraph 4 of the Letter of Representations) relating to the Developer, its Affiliates, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 141
Menifee Mayor and City Council
January 18, 2023
Page
870 of 1063

B-8
Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates), which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make such statements and information contained in the Official Statement not misleading in any material respect.

3. For the period through 25 days after the “end of the underwriting period” as defined in the Bond Purchase Agreement to mean the Closing Date unless the Underwriter gives notice to the contrary, if any event relating to or affecting the Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City or the Community Facilities District, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it was delivered to a purchaser, the Developer shall reasonably cooperate with the City, the Community Facilities District and the Underwriter in the preparation and publication of a supplement or amendment to the information described in the section of the Official Statement referenced in paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in paragraph 4 of the Letter of Representations), in form and substance satisfactory to the Underwriter and counsel to the City and the Community Facilities District which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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

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

Name:

Title:

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 142
Menifee Mayor and City Council
January 18, 2023
Page
871 of 1063

B-9

EXHIBIT B
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2023A

DEVELOPER PROVIDED INFORMATION IN APPRAISAL REPORT
See attached.

Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 143
Menifee Mayor and City Council
January 18, 2023
Page
872 of 1063

C-1

EXHIBIT C
$________
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2023A

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

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

2.Defined Terms.
(a)General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b)Issuer means the Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee.
(c)Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(d)Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.

The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (e)Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.

The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Stradling Yocca Carlson & Rauth, a Professional Corporation in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 144
Menifee Mayor and City Council
January 18, 2023
Page
873 of 1063

C-2
Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Name:

By:

Name:

Dated: [Closing Date]
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 145
Menifee Mayor and City Council
January 18, 2023
Page
874 of 1063

C-3

SCHEDULE A

SALE PRICES OF THE GENERAL RULE MATURITIES
(To be attached)
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 146
Menifee Mayor and City Council
January 18, 2023
Page
875 of 1063

APPRAISAL REPORT

COMMUNITY FACILITIES DISTRICT NO. 2020-1

OF THE CITY OF MENIFEE

MCCALL MESA
(Remington Place by Lennar)

City of Menifee, Riverside County, California
(Appraiser’s File No. 2022-1270)

Prepared For
City of Menifee
29844 Haun Road
Menifee, California 92586

Prepared By
Kitty Siino & Associates, Inc.
115 East Second Street, Suite 100
Tustin, California 92780
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 147
Menifee Mayor and City Council
January 18, 2023
Page
876 of 1063

KITTY SIINO & ASSOCIATES, INC.

REAL ESTATE APPRAISERS & CONSULTANTS

December 19, 2022

Regina Funderbunk, Chief Financial Officer
City of Menifee
29844 Haun Road
Menifee, California 92586

Reference: Appraisal Report – City of Menifee
Community Facilities District No. 2020-1 (McCall Mesa)
Remington Place by Lennar (2023 Bond Financing)
Menifee, California

Dear Ms. Funderbunk:

At the request and authorization of the City of Menifee, we have completed an Appraisal Report for Community Facilities District No. 2020-1 (McCall Mesa) of the City of Menifee (“Menifee CFD No. 20 20-1”). Our offices completed an appraisal of Menifee CFD No. 2020-1 in 2021 for the first bond financing. A second appraisal is needed in order to ascertain the value of the property for a second bo nd financing. Menifee CFD No. 2020- 1 consists of a new home community known as Remington Place by Lennar Homes of California, LLC (“Lennar”). Remington Place has a total of 258 proposed single-family detached homes within two neighborhoods known as Trailhead at Remington Place (“Trailhead”) and Westward at Remington Place (“Westward”). Trailhead includes 126 proposed homes and has five plans ranging in size from 1,769 to 2,767 square feet, while Westward includes 132 proposed homes and has four plans ranging in size from 2,590 to 4,134 square feet. Both Trailhead and Westward are sold out but have not yet closed out. Trailhead has closed 121 completed homes to individuals and Westward has closed 115 completed homes. The remainder of the lots are owned by Lennar; however, all are in escrow and range from models to production homes over 95 percent complete along with the final home under construction.

The valuation method used in this report is the Sales Comparison Approach along with a mass appraisal technique as defined within this report. The fee simple estate of the subject property has been valued subject to the Menifee CFD No. 2020-1 special tax lien.

This report is written with the hypothetical condition that the subject property is enhanced by the improvements and/or fee credits to be funded by bonds issued by City of Menifee CFD No. 2020- 1. As a result of our investigation, the concluded market value for the subject property is:

Remington Place
Lennar Ownership (1 lot & 21 houses) $ 9,201,246
Individual Owners (236 houses) 129,532,068
Total Aggregate Value Menifee CFD No. 2020-1 $138,733,314

115 East Second Street, Suite 100, Tustin, California 92780 (714) 544-9978 - Phone, (714) 544-9985 – Fax, E-Mail: [email protected] Ms. Rochelle Clayton
Item Title: 12.1
Community Facilities District 2020-1, McCall Mesa, Issuance of Special Tax Bonds Item Page Number: 148
Menifee Mayor and City Council
January 18, 2023
Page
877 of 1063

CITY OF MENIFEE
December 19, 2022

Page 2 ends

Menifee City CouncilJanuary 18, 2023

Menifee City Council
January 18, 2023