Agenda packet — Menifee City Council, August 21, 2024 (part 2 of 4)

TABLE 1 – OFFSITE PUBLIC IMPROVEMENTS
Improvement Security No. Faithful Performance Labor & Materials Streets and Drainage 108032442 $ 1,108,500 $ 554,250
Water System 107997971 $ 58,000 $ 29,000
Recycled Water System 107997971 $ 263,000 $ 131,500
Sewer System 107997971 $ 20,000 $ 10,000
Landscaping 108076561 $ 48,500 $ 24,250
Total $ 1,498,000 $ 749,000
TABLE 2 – ONSITE PUBLIC IMPROVEMENTS
Improvement Security No. Faithful Performance Labor & Materials Water System 107997972 $ 507,500 $ 253,750
Sewer System 107997972 $ 529,500 $ 264,750
Total $ 1,037,000 $ 518,500
TABLE 3 - POSTED SECURITY MONUMENT IMPROVEMENTS
Improvement Security No. Monument Bond
Survey Monuments 107997970 $ 6,480
Total $ 6,480
The total securities required for all improvements have been provided by the Developer in the total amount of $2,541,480.

STRATEGIC PLAN OBJECTIVE
Safe and Vibrant Community

FISCAL IMPACT
There is no fiscal impact associated with the recommended action. The Developer has paid all necessary fees associated with review of TM 38219. Upon completion of the improvements, and subsequent acceptance by the City, ongoing maintenance costs for the improvements would be supported through future fiscal year budgets in maintenance Community Facilities District 2017- 1, Annexation 21.

ATTACHMENTS

1. Project Map

2. Final Map

3. Agreement

4. Bond – Offsite Streets

5. Bond – Offsite Water, Recycled Water, Sewer

6. Bond – Offsite Landscaping

7. Bond – Onsite Water, Sewer

8. Bond – Monuments
Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 241 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 242 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 243 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 244 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 245 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 246 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 247 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 248 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 249 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 250 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 251 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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Menifee Mayor and City Council August 21, 2024 Page 312 of 1068 Item Title: 10.13
Final Map, Agreement, and Bonds for Tract Map 38219, River Walk Village, by Richmond American Homes of Maryland, Inc.

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CITY OF MENIFEE
SUBJECT: Villagio Villas Apartment Project
MEETING DATE: August 21, 2024
TO: Mayor and City Council
PREPARED BY: Russell Brown, Senior Planner
REVIEWED BY: Cheryl Kitzerow, Community Development Director APPROVED BY: Armando G. Villa, City Manager
APPLICANT: Ali Fartash, Villagio Villas
-------------------------------------------------------------------------------------------------------------------------------

RECOMMENDED ACTION

1. Adopt a resolution adopting a Mitigated Negative Declaration (State Clearinghouse No. 2024050900) for the Villagio Villas Apartments Project located south of McCall Boulevard and east of Interstate 215 at the southern terminus of Encanto Drive, and direct staff to file a Notice of Determination; and

2. Adopt a resolution approving General Plan Amendment No. PLN21-0377; and

3. Adopt a resolution approving Plot Plan No. PLN21-0375; and

4. Introduce an ordinance approving Zone Change No. PLN21-0376.

DISCUSSION
On June 26, 2024, the Planning Commission held a public hearing and voted unanimously to recommend approval of the Villagio Villas apartment expansion project (Project), along with the Mitigated Negative Declaration (MND) to the City Council. The Project consisted of the following entitlement applications:

General Plan Amendment (GPA) No. PLN21-0377 is required as the proposed Project site was previously part of the freeway right-of-way (owned by Caltrans) and had no General Plan Land Use designation. The proposed General Plan Land Use density is 20.1-24 dwelling units per acre (du/ac) which is consistent with nearby land uses.

Zone Change (ZC) No. PLN21-0376 is required as the proposed Project site was previously part of the freeway right-of-way and had no Zoning designation. The proposed Zoning designation of High Density Residential (HDR) which is consistent with surrounding parcels.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 1
Menifee Mayor and City Council August 21, 2024 Page 314 of 1068 City of Menifee Staff Report
Villagio Villas GPA, ZC, PP
August 21, 2024

Page 2 of 10 ends

Plot Plan (PP) No. PLN21-0375 proposes two new two-story apartment buildings totaling 22,588 square feet at an existing apartment complex (“Villagio Villas”). The Project site is approximately

0.82 acres and total site area is approximately 6.99 acres when including the existing apartment site. Each building includes 12 units (24 total) bringing the total number of units within the Villagio Villas apartment complex to 120 units (96 existing). 25 percent of the proposed units (six units) will be set aside as low income and will be counted towards the City’s Regional Housing Needs Allocation (RHNA) numbers. The Project includes a 600 square-foot maintenance building and approximately 21,000 square feet of new landscape area.

Location
The site is located south of McCall Boulevard and east of Interstate 215 at the southern terminus of Encanto Drive (APN: 336-030-016).

Project Location
General Plan
The Project site was previously owned by Caltrans until 2017 when it was purchased by the Project applicant with the intention of developing the site. The parcel does not currently have a Land Use designation and therefore, before the site can be developed, a GPA must be approved.

The Project proposes a Land Use designation of 20.1-24 du/ac. The existing apartment complex to the north and east has the same Land Use designation of 20.1-24 du/ac, as do the parcels along the west side of I-215. The property to the south of the Project site has a designation of 8.1- 14 du/ac. The existing apartment complex has a density of 15.56 du/ac; with the inclusion of the proposed Project site, the overall density of the apartment complex will increase to 17.17 du/ac and will be brought closer to conformance to the density range required by the General Plan.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 2
Menifee Mayor and City Council August 21, 2024 Page 315 of 1068 City of Menifee Staff Report
Villagio Villas GPA, ZC, PP
August 21, 2024

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Existing Land Use Proposed Land Use

Zoning
As mentioned above, the Project site was previously owned by Caltrans and therefore was a part of the freeway right-of-way and did not have a zoning classification. The Project proposes to establish the zoning classification of HDR which is consistent with nearby properties. The existing apartment complex to the north and east has the same zoning designation of HDR as do parcels along the west side of I-215. The property to the south of the Project site has the designation of Medium Density Residential (MDR). The intent of the HDR Zone is for multifamily dwellings, including apartments and condominiums with a density range of 20 – 24 du/ac. Before the site can be developed, a Zone Change must be approved.

The proposed multifamily use is allowed within the HDR Zone with the approval of a plot plan.

The Project meets all applicable development standards such as, building setbacks, lot coverage, landscaping requirements, and design criteria established in the Zoning Code.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 3
Menifee Mayor and City Council August 21, 2024 Page 316 of 1068 City of Menifee Staff Report
Villagio Villas GPA, ZC, PP
August 21, 2024

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Existing Zoning Proposed Zoning

Background
The existing apartment complex was approved by the County of Riverside in the late 1980’s and was constructed in the early 1990’s. The existing apartment complex consists of nine apartment buildings (total 96 units) and a leasing office and recreation center. The Project applicant and current property owner purchased the existing apartment complex in 2013. In 2017, the applicant purchased the vacant 0.82-acre site from Caltrans with the intention of expanding the existing apartment complex by two buildings or 24 units (as currently proposed).

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 4
Menifee Mayor and City Council August 21, 2024 Page 317 of 1068 City of Menifee Staff Report
Villagio Villas GPA, ZC, PP
August 21, 2024

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Existing Site Plan
Proposed Project
As discussed above, the Project includes a PP application to construct two new two-story apartment buildings, each approximately 11,294 square feet (totaling 22,588 square feet) at the southern terminus of Encanto Drive. Each building proposes 12 units (24 total) bringing the total number of units within the Villagio Villas apartment complex from 96 to 120 total dwelling units.

To consider allowing the proposed land use designation, staff requested 25 percent of the proposed units (or six units) to be set aside as low income to help the City towards our RHNA housing production.

In addition to the residential units, the applicant is proposing a 600 square-foot maintenance building south of the newly proposed buildings.

Access to the existing apartment complex is via two driveways along Encanto Drive. Access to the new residential buildings as well as the maintenance building will be through the existing apartment complex and new drive aisle. The Project includes a Condition of Approval to consolidate all parcels of land associated with the existing/proposed project through a parcel merger application through the Engineering Department.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 5
Menifee Mayor and City Council August 21, 2024 Page 318 of 1068 City of Menifee Staff Report
Villagio Villas GPA, ZC, PP
August 21, 2024

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Site Plan

Parking
The applicant will be removing some existing landscaping and parking spaces/carports along the western boundary to accommodate the proposed Project, which includes a new drive aisle and landscape buffer between the proposed buildings and I-215. The Project proposes demolishing 27 existing parking spaces, while constructing 11 new parking spaces. Based on the total number of residential units (120 units), a minimum of 215 parking spaces are required for the complex.

The Project proposes 235 total parking stalls, which includes a mix of garage parking, carport parking and uncovered surface parking evenly distributed throughout the existing/proposed Project site. Each unit will have at least one covered parking space as required by the City of Menifee Municipal Code (MMC). The Project includes a minimum of 12 guest parking spaces, seven ADA compliant parking spaces and five employee parking spaces. Bicycle racks are distributed throughout the apartment complex (minimum of 13) as required by the MMC.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 6
Menifee Mayor and City Council August 21, 2024 Page 319 of 1068 City of Menifee Staff Report
Villagio Villas GPA, ZC, PP
August 21, 2024

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Landscaping
The Project includes approximately 21,063 square feet of irrigated landscaped area which exceeds the minimum amount required for the Project. The buildings are setback a minimum of 20 feet from the western property line and will contain a landscape buffer consisting of planters and shade trees used to reduce glare, screen the building mass, and limit noise caused by vehicular traffic of the nearby freeway. The Project includes several 24-inch box trees (such as Brisbane Box and Crape Myrtle species, etc.) that are commonly used throughout the City as they tend to thrive in this climate.

The Project will demolish and relocate an existing trash enclosure near the north side of the Project. A combination of vines and flowering shrubs will soften the visual appearance of the proposed masonry trash enclosure.

Landscape Plan
Floor Plan
Each proposed two-story building will be comprised of four one-bedroom units and eight twobedroom units for a total of 12 units per building (24 total). The square footages of the units range from approximately 600 square feet (1-bedroom) to 1,100 square feet (2-bedroom). Each unit will have exclusive patio space, meeting the minimum required area of 100 square feet per unit.

Architecture
The Project was reviewed for compliance with the Development Code and City-wide Design Guidelines. The proposed Project is consistent with these guidelines and compatible with the architecture of the existing apartment complex as well as other nearby apartment complexes. The proposed elevations contain elements of Tuscan and Italianate architecture that utilize tower elements on the corners, clay tile roofing, decorative cornices, arched doorways/windows, stone veneer, window planters, decorative shutters, smooth stucco exterior finish and other detailed treatments consistent with the architectural theme. The roof lines are broken up to reduce the overall mass of the building and the four-sided tower elements provide additional depth and relief.

The maximum building height is approximately 31’4” to the tallest point of the tower element.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 7
Menifee Mayor and City Council August 21, 2024 Page 320 of 1068 City of Menifee Staff Report
Villagio Villas GPA, ZC, PP
August 21, 2024

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Western Elevation (facing freeway)
Eastern Elevation
(Inset)
Northern Elevation Southern Elevation

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 8
Menifee Mayor and City Council August 21, 2024 Page 321 of 1068 City of Menifee Staff Report
Villagio Villas GPA, ZC, PP
August 21, 2024

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Maintenance Building

Environmental Determination
The City of Menifee Community Development Department has determined the Project will not have a significant effect on the environment and has recommended adoption of the Initial Study Mitigated Negative Declaration (IS/MND). According to the General Plan, the City shall require applicants/developers for all residential projects within 500-feet of I-215 to submit a Health Risk Assessment (HRA) to determine the possible impact of toxic air contaminants against the Project.

The HRA determined that with the inclusion of a mitigation measure for high-efficiency MERV 13 filters, the impact would be considered less than significant The IS/MND, as well as all its technical appendices, can be accessed for review on the City website: https://www.cityofmenifee.us/325/Environmental-Notices-Documents.

Findings
Findings for the ISMND, GPA, ZC and PP are included in the attached Resolutions and Ordinance.

Public Notice
A public hearing notice for the proposed Project was published in The Press Enterprise on August 11, 2024 for the August 21, 2024 City Council hearing. All relevant public agencies, including all interested parties, were notified of the public hearing as were all property owners within a 400- foot radius of the project site. On-site posting was also provided.

STRATEGIC PLAN OBJECTIVE
Thriving Economy

FISCAL IMPACT
There is no fiscal impact for this item.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 9
Menifee Mayor and City Council August 21, 2024 Page 322 of 1068 City of Menifee Staff Report
Villagio Villas GPA, ZC, PP
August 21, 2024

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ATTACHMENTS

1. Project Exhibits

2. Resolution - MND

3. Exhibit A - MND

4. Resolution – GPA

5. Exhibit A – GPA

6. Resolution - PP

7. Exhibit A – Conditions of Approval

8. Ordinance - ZC

9. Exhibit A – ZC

10. Public Hearing Notice
Item Title: 11.1 Villagio Villas Apartment Project
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Menifee Mayor and City Council August 21, 2024 Page 355 of 1068 1 RESOLUTION NO. 24-_____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE,

CALIFORNIA ADOPTING A MITIGATED NEGATIVE DECLARATION

FOR VILLAGIO VILLAS CONSISTING OF GENERAL PLAN
AMENDMENT NO. PLN21-0377, ZONE CHANGE NO. PLN21-0376
AND PLOT PLAN NO. PLN21-0375 LOCATED SOUTH OF MCCALL

PLN21-0375 to construct two new two-story apartment buildings as part of an existing apartment complex, known as Villagio Villas; and
WHEREAS, collectively, all the applications are referred to as the “Project” or “Villagio Villas”; and
WHEREAS, between May 20, 2024 and June 18, 2024, the 30-day public review period for the Draft Initial Study/Mitigated Negative Declaration (IS/MND) took effect, which was publicly noticed by a publication in a newspaper of general circulation, notice to owners within 400 feet of the Project site boundaries, related agencies and government agencies; and
WHEREAS, on June 26, 2024, the Planning Commission conducted a duly noticed public hearing and voted 5-0 recommending approval to the City Council of GPA No. PLN21-0377, ZC No. PLN21-0376 and PP No. PLN21-0375; and WHEREAS, on August 21, 2024, the City Council held a public hearing on the Project, considered all public testimony as well as all materials in the staff report and accompanying documents for the adoption of the IS/MND for the Project, which hearing was publicly noticed by a publication in The Press Enterprise, a newspaper of general circulation, an agenda posting, notice to property owners within 400 feet of the Project boundaries, on-site posting at the Project site, and to persons requesting public notice; and
WHEREAS, the City has complied with the California Environmental Quality Act (CEQA) and the IS/MND is an accurate and objective statement that fully complies with CEQA, the CEQA Guidelines and represents the independent judgment of the City; and WHEREAS, no evidence of new significant impacts, as defined by CEQA Guidelines Section 15088.5, have been received by the City after circulation of the draft IS/MND which would require re-circulation.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee makes the following Findings:

Section 1: The City Council finds on the basis of the evidence presented and the whole record before it, including the IS/MND, which is attached hereto as Exhibit “A”, and any comments received, that there is no substantial evidence that the Project will have a significant effect on the environment.

Section 2: The City Council further finds that the adoption of the MND reflects the Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 43
Menifee Mayor and City Council August 21, 2024 Page 356 of 1068 Villagio Villas IS/MND
August 21, 2024
2 City Council’s independent judgment and analysis.

Section 3: The MND, all documents referenced in the MND, and the record of proceedings on which the City Council’s decision is based are located at City of Menifee City Hall at 29844 Haun Road, Menifee, CA 92586 and the custodian of record of proceedings is the City of Menifee City Clerk.

Section 4: The City of Menifee City Council adopts a MND for the Project including, the IS and technical appendices.

PASSED, APPROVED AND ADOPTED this the 21st day of August 2024. _________________________
Bill Zimmerman, Mayor
Attest:
___________________________
Stephanie Roseen, Acting City Clerk
Approved as to form:
______________________________
Jeffrey T. Melching, City Attorney
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Menifee Mayor and City Council August 21, 2024 Page 638 of 1068 RESOLUTION NO. 24-_____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA APPROVING GENERAL PLAN AMENDMENT NO. PLN21-
0377 FOR VILLAGIO VILLAS LOCATED SOUTH OF MCCALL

BOULEVARD AT THE SOUTHERN TERMINUS OF ENCANTO DRIVE
WHEREAS, on November 29, 2021, the applicant, Villagio Villas, filed a formal application with the City of Menifee for the approval of a General Plan Amendment (GPA) No. PLN21-0377, Zone Change (ZC) No. PLN21-0376 and a Plot Plan (PP) No. PLN21- 0375 to construct two new two-story apartment buildings as part of an existing apartment complex, known as Villagio Villas; and
WHEREAS, the application for the GPA No. PLN21-0377 is being processed concurrently with ZC No. PLN21-0376 and PPP No. PLN21-0375, collectively, all the applications are referred to as the “Project” or “Villagio Villas”; and WHEREAS, pursuant to the California Environmental Quality Act (CEQA), a Mitigated Negative Declaration (MND) and Mitigation Monitoring and Reporting Program (MMRP) were completed for the Project and concluded that no significant impacts would be caused by the Project, therefore, the MND and MMRP have been recommended for adoption; and WHEREAS, the proposed Project site was previously part of the freeway right-of-way and had no General Plan Land Use or Zoning designations. The proposed General Plan Land Use density is 20.1-24 dwelling units per acre (du/ac) with a Zoning designation of High Density Residential (HDR); and
WHEREAS, GPA No. PLN21-0377 and ZC No. PLN21-0376 exhibits have been prepared and attached hereto as Exhibit “A” of the resolution; and WHEREAS, on June 26, 2024, the Planning Commission conducted a duly noticed public hearing and voted 5-0 recommending approval to the City Council of GPA No. PLN21- 0377, ZC No. PLN21-0376 and PP No. PLN21-0375; and
WHEREAS, on August 21, 2024, 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, which hearing was publicly noticed by a publication in The Press Enterprise, a newspaper of general circulation, an agenda posting, notices placed on the Project site, and notice to property owners within 400 feet of the Project boundaries as well as to persons requesting public notice.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee makes the following Findings:

Section 1: The City of Menifee’s City Council hereby makes the following findings for GPA No. PLN21-0377 in accordance with Title 9, Article 2, Chapter 9.50.070 “Findings for Approval”:

Finding 1 - The amendment is consistent with the intent of the vision, goals and policies of the General Plan as a whole.

The GPA is required to develop the site as the proposed project site was previously owned by Caltrans and had no Zoning or General Plan Land Use designations. The proposed General Plan Land Use density is 20.1-24 du/ac Item Title: 11.1 Villagio Villas Apartment Project
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Menifee Mayor and City Council August 21, 2024 Page 639 of 1068 Villagio Villas GPA
August 21, 2024
with a Zoning designation of HDR both of which are consistent with nearby land uses. The existing apartment complex to the north and east of the Project site has a Land Use designation of 20.1-24 Residential du/ac. The Project proposes the same designation category of 20.1-24 du/ac. The existing apartment complex has a density of 15.56 du/ac; with the inclusion of the proposed Project site, the overall density of the apartment complex will increase to 17.17 du/ac and will be brought closer to conformance to the density range.

In addition, the Project is consistent with the following City of Menifee General Plan Policies:
• Policy HE-1.2 Specific Plans. Support residential growth and infill in specific areas and along corridors where comprehensive neighborhood planning is completed, and adequate infrastructure is planned.

The Project site is surrounded by existing multifamily developments. The Project includes infill development of a vacant site where existing infrastructure is in place.
• Policy HE-3.6 Fair Housing. Support and implement housing law in all aspects of the building, financing, sale, rental, or occupancy of housing based on protected status in accordance with state and federal law.

The Project includes six affordable income qualified units. Approval of the Project will help the City in meeting required state mandates on affordable housing.
• Policy LU-1.1 Concentrate growth in strategic locations to help preserve rural areas, create place and identity, provide infrastructure efficiently, and foster the use of transit options.

The proposed Project is located within an area that is intended for residential uses, with existing multifamily developments to the north, south, east, and west. The Project is consistent with this policy as it leads to the concentration of growth in strategic locations and preserves rural areas within the City and provides infill development.
• Policy LU-1.5: Support development and land use patterns, where appropriate, that reduce reliance on the automobile and capitalize on multimodal transportation opportunities.

The Project proposes new residential units in a developed area that allows for ease of access to commercial uses to the north. Pedestrians are encouraged to use the existing sidewalks and bike lanes along Encanto Drive and McCall Boulevard.
• Policy LU-3.4 Require that approval of new development be contingent upon the project’s ability to secure appropriate infrastructure services.

Item Title: 11.1 Villagio Villas Apartment Project
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• Policy CD-3.19 Design walls and fences that are well integrated in style with adjacent structures and terrain and utilize landscaping and vegetation materials to soften their appearance.

The Project includes landscaping, as well as street trees, which will soften the appearance of the perimeter and site interior walls. A 20-foot building/landscape setback along the western side of the Project is being proposed as well. The walls that will be visible to the public will be constructed of decorative masonry block and pilasters which will be well integrated with the adjacent sites to the north and east which also contain decorative masonry block walls.
• Policy CD-3.12: Utilize differing but complementary forms of architectural styles and designs that incorporate representative characteristics of a given area.

The Project was reviewed for compliance with the Development Code and City-wide Design Guidelines. The proposed Project is consistent with these guidelines and compatible with the architecture of the existing apartment complex as well as other nearby apartment complexes.
• Policy CD-3.14 Provide variations in color, texture, materials, articulation, and architectural treatments. Avoid long expanses of blank, monotonous walls or fences.

The proposed elevations contain elements of Tuscan and Italianate architecture that utilizes tower elements on the corners, clay tile roofing, decorative cornices, arched doorways/windows, stone veneer, window planters, decorative shutters, smooth stucco exterior finish and other detailed treatments consistent with the architectural theme. The roof lines are broken up to reduce the overall mass of the building and the four-sided tower elements provide additional depth and relief.

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

As further described in the Findings below, the existing apartment complex was approved by the County of Riverside in the late 1980’s and was constructed in the early 1990’s and was consistent with the rules and regulations in place at the time of approval. The proposed Project has been designed to be consistent with surrounding properties and ultimately the General Plan and therefore, reasonable controls and standards have been established.

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

The Project will not result in conditions detrimental to public health, safety, or general welfare as designed and conditioned. The associated entitlements have been reviewed and conditioned by the City of Menifee Community Development and Engineering Departments, Office of the Fire Marshal and Item Title: 11.1 Villagio Villas Apartment Project
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numerous outside agencies to ensure that it will not create conditions materially detrimental to the surrounding uses.

In addition, environmental impacts resulting from the implementation of the proposed Project have been analyzed in the MND and no significant impacts (with mitigation measures incorporated) are expected as a result of the Project. The proposed entitlements are not anticipated to 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 Project vicinity.

Section 2: CEQA Compliance. The City Council hereby resolves that the MND has been completed for the Project in accordance with CEQA, State and local CEQA guidelines and pursuant to a separate Resolution, finds that the facts presented within the public record provide the basis to adopt the MND, which has been completed for the Project.

NOW THEREFORE, the City Council of the City of Menifee hereby resolves the following:

1. That the City Council determine that the “Findings” set out above are true and correct.

2. That the City Council determine that the MND has been completed for the Project in accordance with the CEQA, State and local CEQA guidelines.

3. That the City Council, pursuant to a separate Resolution, finds that the facts presented within the public record provide the basis to certify the MND for Villagio Villas which has been completed for the Project.

4. That the City Council finds that the facts presented within the public record and within the Resolution provide the basis to approve GPA No. PLN21-0377, ZC No. PLN21- 0376 and PP No. PLN21-0375 and that the Council approve said entitlements.

5. 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 the 21st day of August 2024. _________________________
Bill Zimmerman, Mayor
Attest:
______________________________
Stephanie Roseen, Acting City Clerk
Approved as to form:
______________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.1 Villagio Villas Apartment Project
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Menifee Mayor and City Council August 21, 2024 Page 644 of 1068 RESOLUTION NO. 24-_____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA APPROVING PLOT PLAN NO. PLN21-0375 FOR

VILLAGIO VILLAS LOCATED SOUTH OF MCCALL BOULEVARD AT

THE SOUTHERN TERMINUS OF ENCANTO DRIVE
WHEREAS, on November 29, 2021, the applicant, Villagio Villas, filed a formal application with the City of Menifee for the approval of a General Plan Amendment (GPA) No. PLN21-0377, Zone Change (ZC) No. PLN21-0376 and a Plot Plan (PP) No. PLN21-0375 to construct two new two-story apartment buildings as part of an existing apartment complex, known as Villagio Villas; and
WHEREAS, the application for the PP No. PLN21-0375 is being processed concurrently with GPA No. PLN21-0377 and ZC No. PLN21-0376, collectively, all the applications are referred to as the “Project” or “Villagio Villas”; and WHEREAS, pursuant to the California Environmental Quality Act (CEQA), a Mitigated Negative Declaration (MND) and Mitigation Monitoring and Reporting Program (MMRP) were completed for the Project and concluded that no significant impacts would be caused by the Project, therefore, the MND and MMRP have been recommended for adoption; and WHEREAS, the proposed Project site was previously part of the freeway right-of-way and had no General Plan Land Use or Zoning designations. The proposed General Plan Land Use density is 20.1-24 dwelling units per acre (du/ac) with a Zoning designation of High Density Residential (HDR); and
WHEREAS, Conditions of Approval for PP No. PLN21-0375 have been prepared and attached hereto as Exhibit “B” of the Resolution; and
WHEREAS, on June 26, 2024, the Planning Commission conducted a duly noticed public hearing and voted 5-0 recommending approval to the City Council of GPA No. PLN21- 0377, ZC No. PLN21-0376 and PP No. PLN21-0375; and
WHEREAS, on August 21, 2024, 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, which hearing was publicly noticed by a publication in The Press Enterprise, a newspaper of general circulation, an agenda posting, notices placed on the Project site, and notice to property owners within 400 feet of the Project boundaries as well as to persons requesting public notice.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee makes the following Findings:

Section 1: The City of Menifee’s City Council hereby makes the following findings for PP No. PLN21-0375 in accordance with Title 9, Article 2, Chapter 9.80.070 “Findings for Approval for Plot Plans” of the City of Menifee Comprehensive Development Code:

Finding 1 - The proposed design and location of the Plot Plan is consistent with the adopted General Plan and any applicable specific plan.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 332
Menifee Mayor and City Council August 21, 2024 Page 645 of 1068 Villagio Villas PP
August 21, 2024
With the approval of the GPA and ZC as discussed above, the Project will be consistent with the General Plan and Development Code. The GPA/ZC are required to develop the site as the proposed Project location was previously owned by Caltrans and had no Zoning or General Plan Land Use designations. The proposed General Plan Land Use density is 20.1-24 du/ac with a Zoning designation of HDR both of which are consistent with nearby land uses. The existing apartment complex to the north and east of the Project site has a Land Use designation of 20.1-24 Residential du/ac. The Project proposes the same designation category of 20.1-24 du/ac. The existing apartment complex has a density of 15.56 du/ac; with the inclusion of the proposed Project site, the overall density of the apartment complex will increase to 17.17 du/ac and will be brought closer to conformance to the density range.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 333
Menifee Mayor and City Council August 21, 2024 Page 646 of 1068 Villagio Villas PP
August 21, 2024
• Policy LU-3.4 Require that approval of new development be contingent upon the project’s ability to secure appropriate infrastructure services.

The Project includes Conditions of Approval which require appropriate infrastructure. In addition, the Project has been reviewed and conditioned for consistency with the requirements for domestic water, fire protection, sewage disposal, fencing, and electrical communication facilities.
• Policy CD-3.19 Design walls and fences that are well integrated in style with adjacent structures and terrain and utilize landscaping and vegetation materials to soften their appearance.

The Project was reviewed for compliance with the development code and City-wide Design Guidelines. The proposed Project is consistent with these guidelines and compatible with the architecture of the existing apartment complex as well as other nearby apartment complexes.
• Policy CD-3.14 Provide variations in color, texture, materials, articulation, and architectural treatments. Avoid long expanses of blank, monotonous walls or fences.

Finding 2 - The proposed project meets all applicable standards for development and provisions of this title.

Per section 9.80.020 “Applicability” of the Development Code, new construction of a residential project that includes six or more units requires the approval of a plot plan application. The plot plan is for the site and architectural review, to allow for the construction of the two buildings. The Project was reviewed and found to be consistent with the HDR chapter of the Development Code as well as the citywide design guidelines. The Project meets the Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 334
Menifee Mayor and City Council August 21, 2024 Page 647 of 1068 Villagio Villas PP
August 21, 2024
minimum development requirements including but not limited to, setbacks, parking, building coverage, and minimum landscaping and open space.

Finding 3 - The establishment, maintenance, or operation of the proposed project will not be detrimental to the health, safety, or general welfare of persons residing or working in the neighborhood of such use or to the general welfare of the City.

To ensure that the Project would not affect the general health, safety and/or welfare of the community, a MND was prepared to analyze potential impacts to the surrounding persons residing or working in the community. The MND examined all phases of the Project including planning, construction and operation and determined that potential impacts would all be less than significant with the necessary mitigation incorporated.

In addition, the Project incorporates quality architecture and landscaping which will enhance the surrounding area. The Project has been reviewed by a variety of Departments to ensure compliance with applicable regulations, including, but not limited to City of Menifee Community Development, Engineering and Public Works, Office of the Fire Marshal, Riverside County Environmental Health, Eastern Municipal Water District, and Riverside County Flood Control District. These Departments have provided conditions of approval as appropriate to ensure compliance with applicable regulations.

Section 4: CEQA Compliance. The City Council hereby resolves that the MND has been completed for the Project in accordance with CEQA, State and local CEQA guidelines and pursuant to a separate Resolution, finds that the facts presented within the public record provide the basis to adopt the MND, which has been completed for the Project.

NOW THEREFORE, the City Council of the City of Menifee hereby resolves the following:

1. That the City Council determine that the “Findings” set out above are true and correct.

2. That the City Council determine that the MND has been completed for the Project in accordance with the CEQA, State and local CEQA guidelines.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 335
Menifee Mayor and City Council August 21, 2024 Page 648 of 1068 Villagio Villas PP
August 21, 2024
PASSED, APPROVED AND ADOPTED this the 21st day of August 2024. _________________________
Bill Zimmerman, Mayor
Attest:
______________________________
Stephanie Roseen, Acting City Clerk
Approved as to form:
______________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.1 Villagio Villas Apartment Project
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Menifee Mayor and City Council August 21, 2024 Page 705 of 1068 ORDINANCE NO. 24-_____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA APPROVING ZONE CHANGE NO. PLN21-0376 FOR

VILLAGIO VILLAS LOCATED SOUTH OF MCCALL BOULEVARD AT

THE SOUTHERN TERMINUS OF ENCANTO DRIVE
WHEREAS, on November 29, 2021, the applicant, Villagio Villas, filed a formal application with the City of Menifee for the approval of a General Plan Amendment (GPA) No. PLN21-0377, Zone Change (ZC) No. PLN21-0376 and a Plot Plan (PP) No. PLN21- 0375 to construct two new two-story apartment buildings as part of an existing apartment complex, known as Villagio Villas; and
WHEREAS, the application for the Zone Change (ZC) No. PLN21-0376 is being processed concurrently with General Plan Amendment (GPA) No. PLN21-0377 and Plot Plan (PP) No. PLN21-0375, collectively, all the applications are referred to as the “Project” or “Villagio Villas”; and
WHEREAS, pursuant to the California Environmental Quality Act (CEQA), a Mitigated Negative Declaration (MND) and Mitigation Monitoring and Reporting Program (MMRP) were completed for the Project and concluded that no significant impacts would be caused by the Project, therefore, the MND and MMRP have been recommended for adoption; and WHEREAS, the proposed Project site was previously part of the freeway right-of-way and had no General Plan Land Use or Zoning designations. The proposed General Plan Land Use density is 20.1-24 dwelling units per acre (du/ac) with a Zoning designation of High Density Residential (HDR); and
WHEREAS, an exhibit for ZC No. PLN21-0376 has been prepared and attached hereto as Exhibit “A” of the Ordinance; and
WHEREAS, on June 26, 2024, the Planning Commission conducted a duly noticed public hearing and voted 5-0 recommending approval to the City Council of ZC No. PLN21- 0376, as well as GPA No. PLN21-0377 and PP No. PLN21-0375; and WHEREAS, on August 21, 2024, 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, which hearing was publicly noticed by a publication in The Press Enterprise, a newspaper of general circulation, an agenda posting, notices placed on the Project site, and notice to property owners within 400 feet of the Project boundaries as well as to persons requesting public notice.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee makes the following Findings:

Section 1: The City of Menifee City Council hereby makes the following findings for ZC No. PLN21-0376 in accordance with Title 9, Article 2, Chapter 9.115.070 – Findings for Approval:

Finding 1 - The proposed zone or amendments to this Title is consistent with the intent of the goals and policies of the General Plan.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 393
Menifee Mayor and City Council August 21, 2024 Page 706 of 1068 Villagio Villas Ordinance for ZC
August 21, 2024
The parcel does not currently have a zoning designation as it was previously owned by Caltrans and therefore, before the site can be developed a zoning code amendment must be approved to establish a zone. The Project site was previously owned by Caltrans until 2017 when it was purchased by the Project applicant with the intention of developing the site. The existing apartment complex to the north and east of the Project site has a zoning classification of HDR. The intent of the HDR Zone is for multifamily dwellings, including apartments and condominiums with a density range of 20 – 24 du/ac. Before the site can be developed, a ZC must be approved; the Project proposes to establish the zoning classification of HDR which is consistent with nearby properties.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 394
Menifee Mayor and City Council August 21, 2024 Page 707 of 1068 Villagio Villas Ordinance for ZC
August 21, 2024
The Project includes Conditions of Approval which require appropriate infrastructure. In addition, the Project has been reviewed and conditioned for consistency with the requirements for domestic water, fire protection, sewage disposal, fencing, and electrical communication facilities. • Policy CD-3.19 Design walls and fences that are well integrated in style with adjacent structures and terrain and utilize landscaping and vegetation materials to soften their appearance.

Finding 2 - The proposed zone or amendments to this Title prescribes reasonable controls and standards to ensure compatibility with other established uses.

The existing apartment complex was approved by the County of Riverside in the late 1980’s and was constructed in the early 1990’s and was consistent with the rules and regulations in place at the time of approval.

The Project as proposed is consistent with the HDR Zoning classification. The Project has been designed to include reasonable controls and standards such as development regulations, including, parcel size, building coverage, setbacks, site landscaping, to ensure compatibility with existing/proposed surrounding uses. The Project is consistent with all established controls and Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 395
Menifee Mayor and City Council August 21, 2024 Page 708 of 1068 Villagio Villas Ordinance for ZC
August 21, 2024
standards outlined in the HDR section of the City of Menifee Municipal Code (MMC) and is compatible with adjacent land uses and development standards.

Finding 3 - The proposed zone or amendments to this Title provides reasonable property development rights while protecting environmentally sensitive land uses and species.

The Project proposes two new two-story apartment buildings totaling 22,588 square feet at an existing apartment complex. Each building proposes 12 units (24 total) bringing the total number of units within the Villagio Villas apartment complex to 120 units (96 existing). The property development rights of the subject parcel is compatible and consistent with surrounding developments and will be consistent with the MMC and General Plan.

A MND was prepared for the Project and analyzed several areas of environmental importance as identified and required by CEQA. Furthermore, biological reports were conducted to determine sensitive plant and animal species onsite and applicable mitigation measures included in the MND were included for their protection. The MND also includes additional reports to determine consistency with the Western Riverside County Multiple Species Habitat Conservation Plan (WR-MSHCP) such as riparian/riverine areas, vernal pools, narrow endemic plant species, burrowing owl, and fairy shrimp.

Review and mitigation coordination occurred with the applicable state and federal wildlife agencies. Therefore, the Project provides reasonable property development rights while protecting environmentally sensitive land uses and species.

Finding 4 - The proposed zone or amendments to this Title ensures protection of the general health, safety and welfare of the community.

The Project will not result in conditions detrimental to public health, safety, or general welfare as designed and conditioned. The associated entitlements have been reviewed and conditioned by the City of Menifee Community Development and Engineering Departments, Office of the Fire Marshal and numerous outside agencies to ensure that it will not create conditions materially detrimental to the surrounding uses.

The proposed entitlements are not anticipated to 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 Project vicinity.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 396
Menifee Mayor and City Council August 21, 2024 Page 709 of 1068 Villagio Villas Ordinance for ZC
August 21, 2024
Section 3: Effective Date. The Ordinance shall take effect 30 days after its second reading and adoption.

Section 4: 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 5: Notice of Adoption. The City Clerk is authorized and directed to cause this Ordinance to be published within 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 for first reading on August 21, 2024 and PASSED, APPROVED AND ADOPTED this 4th day of September 2024.
_________________________
Bill Zimmerman, Mayor
Attest:
______________________________
Stephanie Roseen, Acting City Clerk
Approved as to form:
______________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 397
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Item Page Number: 399
Menifee Mayor and City Council August 21, 2024 Page 712 of 1068

NOTICE OF PUBLIC HEARING
AND

INTENT TO ADOPT A MITIGATED NEGATIVE DECLARATION
TIME OF HEARING: 6:00 p.m. or as soon as possible thereafter.

DATE OF HEARING: August 21, 2024
PLACE OF HEARING: MENIFEE CITY COUNCIL CHAMBERS
29844 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 NO. PLN21-
0376, CHANGE OF ZONE No. PLN21-0377
and PLOT PLAN No. PLN21-0375 for
Villagio Villas Apartment Building Addition
Project Location:

The site is located south of McCall Boulevard
and east of Interstate 215 at the southern
terminus of Encanto Drive (APN: 336-030-
016).

Existing General Plan Land Use / Zoning:

None (ROW)
Proposed General Plan Land Use:

20.1 – 24 du/ac Residential
Proposed Zoning:

High Density Residential (HDR)
The City Council will consider approving
the following project at a public hearing:

General Plan Amendment (GPA) No. PLN21-0377 and Zone Change (ZC) No. PLN21-0376 is required as the proposed Project site was previously part of the freeway right-of-way (owned by Caltrans) and had no Zoning or General Plan Land Use designations. The proposed General Plan Land Use density is 20.1-24 dwelling units per acre (du/ac) with a Zoning designation of High Density Residential (HDR) both of which are consistent with nearby land uses.

Plot Plan (PP) No. PLN21-0375 proposes two new two-story apartment buildings totaling 22,588 square feet at an existing apartment complex (“Villagio Villas”) located at the terminus of Encanto Drive. The Project site is approximately 0.82 acres and total site area is approximately 6.99 acres when including the existing apartment site. Each building includes 12 units (24 total) bringing the total number of units within the Villagio Villas apartment complex to 120 units (96 existing). 25 percent of the proposed units (six units) will be set aside as low income and will be counted towards the City’s Regional Housing Needs Allocation (RHNA) numbers. The Project includes a 600 square-foot maintenance building and approximately 21,000 square feet of newly landscaped area.

Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 400
Menifee Mayor and City Council August 21, 2024 Page 713 of 1068 Environmental Information:

The City of Menifee Community Development Department has determined that the above project will not have a significant effect on the environment and has recommended adoption of a Mitigated Negative Declaration (MND).

The Menifee City Council will consider the proposed project and the proposed MND at the public hearing. In addition, the project site is not included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 (California Department of Toxic Substances Control list of various hazardous sites).

The IS/MND was circulated for public review pursuant to State law. The public review period for the MND was between May 20, 2024 – June 18, 2024. The IS/MND can be found at the following web address:
http://www.cityofmenifee.us/325/Environmental-Notices-Documents.

Any person wishing to comment on the proposed project may do so in writing between the date of this notice and the public hearing 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 or 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 Russell Brown, at (951) 723-3745 or e-mail [email protected], or go to the City of Menifee’s agenda web page at http://www.cityofmenifee.us. To view the case file for the proposed project contact the Community Development Department office at (951) 672- 6777 Monday through Friday, from 8:00 A.M. to 5:00 P.M. Please send all written correspondence to:

CITY OF MENIFEE COMMUNITY DEVELOPMENT DEPARTMENT
Attn: Russell Brown, Senior Planner
29844 Haun Road
Menifee, CA 92586
Item Title: 11.1 Villagio Villas Apartment Project
Item Page Number: 401
Menifee Mayor and City Council August 21, 2024 Page 714 of 1068

CITY OF MENIFEE
SUBJECT: Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community
Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC
MEETING DATE: August 21, 2024
TO: Mayor and City Council
PREPARED BY: Lauri Lockwood, Financial Analyst
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------

RECOMMENDED ACTION

1. Adopt a resolution amending the rate and method of apportionment of special taxes for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge, located southwest of McLaughlin Road and Byers Road, and calling an election; and

2. Adopt a resolution certifying election results for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge; and

3. Introduce an ordinance authorizing the levy of special taxes within Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge.

DISCUSSION
Pulte Home Company, LLC, a Michigan limited liability company (the “Developer”), is proposing to develop a residential community of 756 homes on approximately 209 gross acres within the City. The property is located southwest of McLaughlin Road and Byers Road. In 2023, pursuant to a request by the Developer, the City formed Community Facilities District (“CFD No. 2023-2”) and two improvement areas therein (“Improvement Area No. 1” and “Improvement Area No. 2”) over such property in accordance with the Mello-Roos Community Facilities Act of 1982, as amended, to finance the costs of certain public improvements through the levy of a special tax and the issuance of bonds in an amount not-to-exceed $10 million for Improvement Area No. 1 and $15 million for Improvement Area No. 2 (for a total of $25 million).

Due to the removal of a Romoland School District community facilities district lien from the property in Improvement Area No. 2, the Developer has requested that the City undertake change Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 1
Menifee Mayor and City Council August 21, 2024 Page 715 of 1068 City of Menifee Staff Report
Proposed Change Proceedings for IA No. 2 of CFD No. 2023-2 (Cimarron Ridge) August 21, 2024

Page 2 of 3 ends

proceedings pursuant to the Act to amend the rate and method of apportionment of special taxes for Improvement Area No. 2.

On July 17, 2024, the City Council adopted a resolution to initiate the process to amend the rate and method of apportionment of special taxes for Improvement Area No. 2 (the “Resolution of Consideration”). The Resolution of Consideration called for a public hearing to be held at this City Council meeting. Following the close of the public hearing, the City Council will be asked to adopt the resolution (the “Approving Resolution”) approving the amended and restated rate and method of apportionment of special taxes for Improvement Area No. 2 (the “Amended RMA”). Such resolution calls for an election to submit to the qualified voters in Improvement Area No. 2 the measure on the approval of the levy of special taxes in Improvement Area No. 2 in accordance with the Amended RMA.

In addition, the Approving Resolution approves the execution and delivery of the following agreements in the forms presented to the City Council: (i) a First Amendment to the Acquisition, Construction and Funding Agreement with the Developer (the “Amended Funding Agreement”); and (ii) the Joint Community Facilities Agreement with the Developer, Romoland School District and Perris Union High School District (the “Joint Community Facilities Agreement”). The Amended Funding Agreement updates the types and costs of the facilities eligible to be financed by CFD No. 2023-2. In accordance with the Mello-Roos Act, the approval and execution of the Joint Community Facilities Agreement allows for CFD No. 2023-2 to finance improvements to be owned and operated by Romoland School District and Perris Union High School District, which benefit the development within CFD No. 2023-2.

On file with the City Clerk is a Certificate of the Registrar of Voters of Riverside County, attached for reference, certifying there are no registered voters residing within the boundaries of Improvement Area No. 2. Accordingly, under the Mello-Roos Act, only landowners in Improvement Area No. 2 are eligible to vote at the election, with each owner having one vote for each acre (or portion thereof) that they own within Improvement Area No. 2. The Developer, as the owner of all the property in Improvement Area No. 2, will be the sole landowner voter in the election.

If the City Council approves the resolution approving the Amended RMA and calling the election, the City Clerk will conduct the election. The City Clerk will announce the election results and the City Council will be asked to adopt the resolution certifying the election results. Based on the certification that two-thirds of the votes cast are in favor of the proposition voted upon, the resolution certifying the election results directs the City Clerk to record an amended notice of special tax lien on the property within Improvement Area No. 2. The City Council will then be asked to introduce the ordinance authorizing the levy of the special tax within Improvement Area No. 2 in accordance with the Amended RMA.

STRATEGIC PLAN OBJECTIVE
Regular City Business
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 2
Menifee Mayor and City Council August 21, 2024 Page 716 of 1068 City of Menifee Staff Report
Proposed Change Proceedings for IA No. 2 of CFD No. 2023-2 (Cimarron Ridge) August 21, 2024

Page 3 of 3 ends

FISCAL IMPACT
The Developer made a deposit to pay for the costs of the change proceedings, which may be reimbursed to the Developer in accordance with the reimbursement agreement previously entered into with the Developer. There is no fiscal impact to the General Fund regarding changes to any rates within CFD No. 2023-2.

ATTACHMENTS

1. Resolution Approving Amended RMA

2. Resolution Certifying Election Results

3. Ordinance Levying Special Taxes

4. Certificate of Registrar of Voters

5. Amended Funding Agreement

6. Joint Community Facilities Agreement
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 3
Menifee Mayor and City Council August 21, 2024 Page 717 of 1068 RESOLUTION NO. ________

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2023-2 (CIMARRON RIDGE) OF THE CITY OF MENIFEE, AMENDING THE RATE AND

METHOD OF APPORTIONMENT OF SPECIAL TAX FOR THE DISTRICT WHEREAS, after a public hearing, on April 19, 2023, the City Council (the “City Council”) of the City of Menifee (the “City”) adopted Resolution Nos. 23-1310 (the “Resolution of Formation”) and 23- 1311 (the “Resolution to Incur Bonded Indebtedness”) which formed Community Facilities District No. 2023-2 (Cimarron Ridge) of the City of Menifee (the “District” or “Community Facilities District No. 2023- 2”), designated two improvement areas therein (“Improvement Area No. 1” and “Improvement Area No 2”) and called a special election on April 19, 2023 within each improvement area on three propositions relating to the levying of a special tax, the incurring of bonded indebtedness and the establishment of an appropriations limit for the District, which were approved by more than two-thirds vote by the qualified electors within each improvement area on April 19, 2023; and WHEREAS, subsequent to formation, the District received a petition signed by Pulte Home Company, LLC, a Michigan limited liability company (the “Owner”), which currently owns all of the taxable land within Improvement Area No. 2, to initiate certain changes to amend and restate the original rate and method of apportionment of special tax for Improvement Area No. 2 in the form attached as Exhibit A (the “Amended Improvement Area No. 2 Rate and Method”) to Resolution No. 24- 1460 (the “Resolution of Consideration”); and
WHEREAS, on July 17, 2024, the City Council, acting as the legislative body of Community Facilities District No. 2023-2, approved the Resolution of Consideration, stating its intention to consider the approval of the Amended Improvement Area No. 2 Rate and Method; and WHEREAS, on August 21, 2024, this City Council conducted a noticed public hearing to determine whether it should proceed with the approval of the Amended Improvement Area No. 2 Rate and Method; and
WHEREAS, at the August 21, 2024, public hearing all persons desiring to be heard on all matters pertaining to the approval of the Amended Improvement Area No. 2 Rate and Method were heard and a full and fair hearing was held; and
WHEREAS, the City Council determines herein that there have been fewer than twelve registered voters residing in Improvement Area No. 2 for the period of 90 days prior to August 21, 2024, and that the qualified electors within Improvement Area No. 2 are the landowners within Improvement Area No. 2; and
WHEREAS, on the basis of all of the foregoing, the City Council has determined at this time to proceed with the approval of the Amended Improvement Area No. 2 Rate and Method; and WHEREAS, in connection with the change proceedings described herein, the City and the Owner desire to amend the Acquisition, Construction and Funding Agreement (the “Acquisition Agreement”) dated April 19, 2023, relating to the District to revise the facilities and improvements to be financed by the District set forth therein, and the form of the First Amendment to Acquisition, Construction and Funding Agreement (the “First Amendment”) is on file with the City Clerk; and WHEREAS, in connection with the change proceedings described herein, the City proposes to enter into a Joint Community Facilities Agreement (the “JCFA”) with Romoland School District, Perris Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 4
Menifee Mayor and City Council August 21, 2024 Page 718 of 1068 Resolution Approving Change Proceedings for CFD No. 2023-2 (Cimarron Ridge) 2 Union High School District and the Owner, relating to certain facilities proposed to be financed by the District and owned and operated by Romoland School District and Perris Union High School District, and the form of the JCFA is on file with the City Clerk; 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. 2023-2, Cimarron Ridge, of the City of Menifee, does hereby resolve, determine and order as follows Section 1. Each of the above recitals is true and correct.

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

The Amended Improvement Area No. 2 Rate and Method is described in detail in Exhibit A to the Resolution of Consideration, which is incorporated herein by this reference, and the City Council hereby finds Exhibit A to the Resolution of Consideration contains sufficient detail to allow each landowner within the District to estimate the maximum amount of Special Taxes that may be levied against each parcel. The special tax shall not be levied later than Fiscal Year 2069-2070.

Section 3. Written protests against the approval of the Amended Improvement Area No. 2 Rate and Method and the Facilities and Incidental Expenses authorized to be financed by the District have not been filed by one-half or more of the registered voters within the boundaries of Improvement Area No. 2. The City Council hereby finds that the approval of the Amended Improvement Area No. 2 Rate and Method and the Facilities and Incidental Expenses authorized to be financed by the District have not been precluded by a majority protest pursuant to Section 53337 of the Act.

Section 4. An election is hereby called within the boundaries of Improvement Area No. 2 on the proposition of approving the Amended Improvement Area No. 2 Rate and Method and the Facilities and Incidental Expenses authorized to be financed by the District. The proposition to be placed on the ballot for the District is attached hereto as Exhibit A.

Following certification of landowner votes in favor of the adoption of the Amended Improvement Area No. 2 Rate and Method and the Facilities and Incidental Expenses authorized to be financed by the District, the District shall record an amended notice of special tax lien for Improvement Area No. 2.

Section 5. The date of the foregoing election for the District shall be August 21, 2024, or such later date as is consented to by the City Clerk and the landowners within the District. The City Clerk shall conduct the election. Except as otherwise provided by the Act, the election shall be conducted by personally delivered or mailed ballots and, except as otherwise provided by the Act, the election shall be conducted in accordance with the provisions of Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 5
Menifee Mayor and City Council August 21, 2024 Page 719 of 1068 Resolution Approving Change Proceedings for CFD No. 2023-2 (Cimarron Ridge) 3 law regulating elections of the City insofar as such provisions are determined by the City Clerk to be applicable.

Section 6. It is hereby found that there are no registered voters within the territory of Improvement Area No. 2, and, pursuant to Section 53326 of the Act, each landowner who is the owner of record on the date hereof, or the authorized representative thereof, shall have one vote for each acre or portion thereof that he or she owns within Improvement Area No. 2.

Section 7. The form of the First Amendment on file with the City Clerk is approved as to form, and each of the City Manager, the Chief Financial Officer, and their written designees, is authorized to execute the First Amendment in substantially the form on file with the City Clerk, together with such changes as are approved by the officer executing the same, with the approval of such changes to be conclusively evidenced by the execution and delivery thereof.

Section 8. The form of the JCFA on file with the City Clerk is approved as to form, and each of the City Manager, the Chief Financial Officer, and their written designees, is authorized to execute the JCFA in substantially the form on file with the City Clerk, together with such changes as are approved by the officer executing the same, with the approval of such changes to be conclusively evidenced by the execution and delivery thereof.

Section 9. This Resolution shall be effective upon its adoption.

PASSED, APPROVED AND ADOPTED this the 21st day of August, 2024. __________________________
Bill Zimmerman, Mayor
Attest:
___________________________
Stephanie Roseen, Acting City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 6
Menifee Mayor and City Council August 21, 2024 Page 720 of 1068

EXHIBIT A

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2023-2 OF THE

CITY OF MENIFEE (CIMARRON RIDGE)
(IMPROVEMENT AREA NO. 2)

SPECIAL ELECTION
August 21, 2024
This ballot represents ___ votes.

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

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

PROPOSITION A: Shall a special tax with an Amended
Improvement Area No. 2 Rate and Method of Apportionment as provided in Exhibit A to Resolution No. 24-1460 of the City Council of the City of Menifee for Community Facilities District No. 2023-2 (Cimarron Ridge) of the City of Menifee (the “District”) be levied to pay for the Facilities, Incidental Expenses and other purposes described in Resolution No. 23-1310, including the payment of the principal of and interest on bonds issued to finance the Facilities and Incidental Expenses for the District?
YES 
NO 
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 7
Menifee Mayor and City Council August 21, 2024 Page 721 of 1068 RESOLUTION NO.24-___

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, ACTING IN ITS

CAPACITY AS THE LEGISLATIVE BODY OF CITY OF MENIFEE COMMUNITY FACILITIES DISTRICT NO. 2023-2 (CIMARRON RIDGE), CERTIFYING THE RESULTS OF THE AUGUST 21, 2024, SPECIAL ELECTION
WHEREAS, the City Council of City of Menifee (the “City Council”), acting as the legislative body of Community Facilities District No. 2023-2 (Cimarron Ridge) of the City of Menifee (the “District”) called and duly held an election on August 21, 2024, within the boundaries of Improvement Area No. 2 of the District (“Improvement Area No. 2”) pursuant to Resolution No. _____ for the purpose of presenting to the qualified electors within Improvement Area No. 2 the proposition attached hereto as Exhibit A; and
WHEREAS, there has been presented to the City Council a certificate of the City Clerk canvassing the results of the election, a copy of which is attached hereto as Exhibit B; 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. 2023-2, Cimarron Ridge, of the city of Menifee, does hereby resolve, determine and order as follows:

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

Section 1. Proposition A presented to the qualified electors of Improvement Area No. 2 on August 21, 2024, was approved by more than two-thirds of the votes cast at the election held for Improvement Area No. 2, and Proposition A has carried. The City Council is hereby authorized to levy on the land within Improvement Area No. 2 the special tax described in Proposition A for the purposes described therein and to take the necessary steps to levy the special tax authorized by Proposition A.

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

EXHIBIT A

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2023-2 OF THE

CITY OF MENIFEE (CIMARRON RIDGE)
(IMPROVEMENT AREA NO. 2)

SPECIAL ELECTION
August 21, 2024
This ballot represents ___ votes.

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

PROPOSITION A: Shall a special tax with an Amended
Improvement Area No. 2 Rate and Method of Apportionment as provided in Exhibit A to Resolution No. 24-1460 of the City Council of the City of Menifee for Community Facilities District No. 2023-2 (Cimarron Ridge) of the City of Menifee (the “District”) be levied to pay for the Facilities, Incidental Expenses and other purposes described in Resolution No. 23-1310, including the payment of the principal of and interest on bonds issued to finance the Facilities and Incidental Expenses for the District?
YES 
NO 
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 10
Menifee Mayor and City Council August 21, 2024 Page 724 of 1068

EXHIBIT B

CERTIFICATE OF CITY CLERK

AS TO THE RESULTS OF THE CANVASS OF THE ELECTION RETURNS I, Stephanie Roseen, Acting City Clerk of the City of Menifee, do hereby certify that I have examined the returns of the Special Election for Improvement Area No. 2 of Community Facilities District No. 2023-2 (Cimarron Ridge) of the City of Menifee. The election was held in the City Council Chambers, 29844 Haun Road, Menifee, California, on August 21, 2024. I caused to be delivered ballots to each qualified elector. ____ (__) ballots were returned.

I further certify that the results of said election and the number of votes cast for and against Proposition A are as follows:

PROPOSITION A
YES:

NO:

TOTAL:

Dated this 21st day of August, 2024.

Stephanie Roseen, Acting City Clerk
City of Menifee
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 11
Menifee Mayor and City Council August 21, 2024 Page 725 of 1068 4876-1831-9570v4/200299-0021
ORDINANCE NO. 2024-___

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MENIFEE,

CALIFORNIA ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2023-2 (CIMARRON RIDGE) OF

THE CITY OF MENIFEE AUTHORIZING THE LEVY OF SPECIAL TAXES WITHIN IMPROVEMENT AREA NO. 2 IN ACCORDANCE WITH THE

AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT
WHEREAS, on March 15, 2023, the City Council (the “City Council”) of the City of Menifee (the “City”) adopted Resolution No. 23-1296 declaring its intention to form Community Facilities District No. 2023-2 (Cimarron Ridge) of the City of Menifee (the “District”) and Improvement Area No. 1 (“Improvement Area No. 1”) and Improvement Area No. 2 (“Improvement Area No. 2” and together with Improvement Area No. 1, the “Improvement Areas” and each an “Improvement Area”) therein 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 (the “Act”), and its Resolution No. 23-1297 declaring its intention to incur bonded indebtedness for each of Improvement Area No. 1 and Improvement Area No. 2; and
WHEREAS, on April 19, 2023, after providing all notice required by the Act, the City Council conducted a noticed public hearing required by the Act relative to the proposed formation of the District, the designation of the Improvement Areas, the proposed levy of a special tax therein to finance certain public facilities described in Resolution No. 23-1296 and to secure the payment of any bonded indebtedness of the District for the Improvement Areas, and the proposed issuance of up to $10,000,000 of bonded indebtedness for Improvement Area No. 1 and up to $15,000,000 of bonded indebtedness for Improvement Area No. 2, as described in Resolution No. 23-1297; and
WHEREAS, at the April 19, 2023, public hearing, all persons desiring to be heard on all matters pertaining to the formation of the District, the designation of the Improvement Areas and the proposed levy of the special tax to finance the facilities described in Resolution No. 23-1296 and to secure the payment of up to $10,000,000 of bonded indebtedness for Improvement Area No. 1 and of up to $15,000,000 of bonded indebtedness for Improvement Area No. 2 as described in Resolution No. 23-1297 (together, the “Bonds”) were heard and a full and fair hearing was held; and
WHEREAS, on April 19, 2023, the City Council adopted Resolution Nos. 23-1310 and 23-1311 which formed the District, designated the Improvement Areas and called a special election within each of Improvement Area No. 1 and Improvement Area No. 2 on April 19, 2023, in each case on three propositions relating to the levy of a special tax within each Improvement Area, the issuance of the Bonds by the District for each Improvement Area and the establishment of an appropriations limit within the District; and WHEREAS, on April 19, 2023, a special election was held within Improvement Area No. 1 at which the qualified electors therein approved by more than a two-thirds vote Propositions A, B and C set forth in Attachment B to Resolution No. 23-1310 authorizing the levy of a special tax within Improvement Area No. 1 for the purposes described in Resolution No. 23-1310, the issuance of the Bonds for Improvement Area No. 1 as described in Resolution No. 23-1310 and establishing an appropriations limit for the District; and Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 12
Menifee Mayor and City Council August 21, 2024 Page 726 of 1068 Ordinance Levying Special Taxes for Improvement Area No. 2 of CFD No. 2023-2 Ordinance No. 24-___
2 4876-1831-9570v4/200299-0021
WHEREAS, on April 19, 2023, a special election was held within Improvement Area No. 2 at which the qualified electors therein approved by more than a two-thirds vote Propositions D, E and F set forth in Attachment C to Resolution No. 23-1310 authorizing the levy of a special tax within Improvement Area No. 2 for the purposes described in Resolution No. 23-1310, the issuance of the Bonds for Improvement Area No. 2 as described in Resolution No. 23-1310 and establishing an appropriations limit for the District; and WHEREAS, pursuant to certain change proceedings and an election held within Improvement Area No. 2 on August 21, 2024, an amended and restated rate and method of apportionment was approved for Improvement Area No. 2 as attached to Resolution No. 24- 1460 adopted by the City Council on July 17, 2024 (the “Amended Improvement Area No. 2 Rate and Method”);
NOW, THEREFORE, the City Council of the City of Menifee, California does ordain as follows:

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

Section 2. By the passage of this Ordinance, the City Council authorizes and levies special taxes within Improvement Area No. 2 pursuant to Sections 53328 and 53340 of the Act at the rates and in accordance with Amended Improvement Area No. 2 Rate and Method, which is incorporated by reference herein. The special taxes are hereby levied commencing in the fiscal year specified in the Amended Improvement Area No. 2 Rate and Method and in each fiscal year thereafter until payment in full of the Bonds issued by the District for Improvement Area No. 2 (including any bonds issued to refund the Bonds), payment of all costs of the public facilities authorized to be financed by the District for Improvement Area No. 2, and payment of all costs of administering the District allocable to Improvement Area No. 2.

Section 3. Each of the Mayor, the City Manager, the Chief Financial Officer, or their written designees (each, an “Authorized Officer”), acting alone, is hereby authorized and directed each fiscal year to determine the specific special tax rates and amounts to be levied in such fiscal year on each parcel of real property within Improvement Area No. 2, in the manner and as provided in the Amended Improvement Area No. 2 Rate and Method. The special tax rate levied on a parcel pursuant to the Amended Improvement Area No. 2 Rate and Method shall not exceed the maximum rate set forth in the Amended Improvement Area No. 2 Rate and Method for such parcel, but the special tax may be levied at a lower rate. Each Authorized Officer is hereby authorized and directed to provide all necessary information to the TreasurerTax Collector of the County of Riverside and to otherwise take all actions necessary in order to effect proper billing and collection of the special tax within Improvement Area No. 2, so that the special tax shall be levied and collected in sufficient amounts and at times necessary to satisfy the financial obligations of the District for Improvement Area No. 2 in each fiscal year, and with respect to Special Tax, until the Bonds issued by the District for Improvement Area No. 2 are paid in full, the facilities financed for Improvement Area No. 2 have been paid for, and provision has been made for payment of all of the administrative costs of the District.

Section 4. Properties or entities of the state, federal or other local governments shall be exempt from the special tax for Improvement Area No. 2, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act and Section F of the Improvement Area No. 2 Rate and Method. No other properties or entities within Improvement Area No. 2 are exempt from the special tax unless the properties or entities are expressly exempted in Resolution Nos. 23-1310 and 24-____ or in a resolution of consideration to levy a new special tax or special taxes or to Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 13
Menifee Mayor and City Council August 21, 2024 Page 727 of 1068 Ordinance Levying Special Taxes for Improvement Area No. 2 of CFD No. 2023-2 Ordinance No. 24-___
3 4876-1831-9570v4/200299-0021
alter the Amended Improvement Area No. 2 Rate and Method or an existing special tax as provided in Section 53334 of the Act.

Section 5. All of the collections of the special tax within Improvement Area No. 2 shall be used as provided for in the Act, the Amended Improvement Area No. 2 Rate and Method and Resolution Nos. 23-1310 and 24-____.

Section 6. The special tax within Improvement Area No. 2 shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem taxes (which such procedures include the exercise of all rights and remedies permitted by law to make corrections, including, but not limited to, the issuance of amended or supplemental tax bills), as such procedure may be modified by law or by this City Council from time to time.

Section 7. As a cumulative remedy, if any amount levied as a special tax for payment of the interest or principal of the Bonds issued by the District for Improvement Area No. 2 (including any bonds issued to refund such Bonds), together with any penalties and other charges accruing under this Ordinance, are not paid when due, the City Council may, not later than four years after the due date of the last installment of principal on such Bonds (including any bonds issued to refund such Bonds), order that the same be collected by an action brought in the superior court to foreclose the lien of such special tax within Improvement Area No. 2, as authorized by the Act.

Section 8. The Mayor of the City shall sign this Ordinance and the City Clerk or any Acting City Clerk (referred to herein as the “City Clerk”) shall attest to the Mayor’s signature and then cause the same to be published within fifteen (15) days after its passage at least once in The Press Enterprise, a newspaper of general circulation published and circulated in the City of Menifee.

Section 9. The specific authorization for adoption of this Ordinance is pursuant to the provisions of Section 53340 of the Act.

Section 10. The City Clerk is hereby authorized to transmit a certified copy of this ordinance to the Treasurer-Tax Collector of the County of Riverside, and to perform all other acts that are required by the Act, this Ordinance or by law in order to accomplish the purpose of this Ordinance.

Section 11. This Ordinance supersedes Ordinance No 23-372 adopted on May 3, 2023, with respect to Improvement Area No. 2. All other provisions on Ordinance No. 23-372 remain in full force and effect.

Section 12. A full reading of this Ordinance is dispensed with prior to its final passage, a written or printed copy having been available to the City Council and the public a day prior to its final passage.

Section 13. This Ordinance shall take effect thirty days after its final passage.

OF THE CITY OF MENIFEE

FIRST AMENDMENT TO

ACQUISITION, CONSTRUCTION AND FUNDING AGREEMENT

THIS FIRST AMENDMENT TO ACQUISITION, CONSTRUCTION AND FUNDING AGREEMENT (the “First Amendment”) is made and entered into by and between CITY OF MENIFEE (the “City”), acting for and on behalf of itself and COMMUNITY FACILITIES DISTRICT NO. 2023-2 (CIMARRON RIDGE) OF THE CITY OF MENIFEE (the “Community Facilities District” or “CFD”) and PULTE HOME COMPANY, LLC, a Michigan limited liability company (the “Developer”) (each individually a “Party” and collectively the “Parties”) and amends that certain Acquisition, Construction and Funding Agreement entered into as of April 19, 2023, (the “Original Agreement” and together with this First Amendment, the “Agreement”), by and among the Parties.

Capitalized terms used and not defined herein have the meanings ascribed thereto in the Original Agreement.

WHEREAS, the Parties entered into the Original Agreement to provide for, among other matters, the financial and other obligations and responsibilities related to the formation of the Community Facilities District and the Improvements to be financed by the Community Facilities District; and
WHEREAS, Section 25 of the Original Agreement provides that the Parties may amend the Original Agreement in writing signed by each Party thereto; and WHEREAS, the Parties desire to amend Exhibit “B” and Exhibit “C” of the Original Agreement as described herein; and
NOW, THEREFORE, it is mutually agreed between the respective Parties as follows:

1. Amendment to Exhibit “B” and Exhibit “C”. Exhibit B and Exhibit C is hereby amended and restated to be in the form in the attached First Amended Exhibit B and First Amended Exhibit C.

2. General Provisions.
(a) Incorporation into Original Agreement. Except as expressly amended hereby, all provisions of the Original Agreement remain in full force and effect, and this First Amendment is incorporated as a part of the Original Agreement to comprise the Agreement in effect as of the date hereof.
(b) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute but one instrument.

DATED: August 21, 2024
CITY OF MENIFEE, a political subdivision of
the State of California
By:

Armando G. Villa, City Manager
ATTEST:

By:

Stephanie Roseen, Acting City Clerk
APPROVED AS TO FORM:

CITY ATTORNEY FOR THE CITY OF

MENIFEE
By:

Jeffrey T. Melching, City Attorney

PULTE HOME COMPANY, LLC,
A Michigan limited liability company
By:

Name:

Title:

FIRST AMENDED EXHIBIT B
DESCRIPTION OF COST ESTIMATES OF THE IMPROVEMENTS1
I. CITY FEE FACILITY IMPROVEMENTS.

Estimated Cost of the City Fee Facility Improvements
Description Estimated Cost (2)
Law Enforcement 765,072
Fire Facilities 535,248
Circulation 3,332,364
Storm Drainage (Area F_A) 125,714
General Government 972,972
Public Use Facilities 9,678
Parks & Recreation 0
Quimby Fees 174,000
Total City Fees Facility Improvements $5,915,048
II. CITY IMPROVEMENTS.

Those facilities constructed by or on behalf of the Developer and needed by City in order to provide services to the Developer Property, including the following:

Estimated Cost of the City Improvements (3)
Description Estimated Cost
City Traffic Signals $1,292,870
Street Improvements (4) 5,332,721
Park Improvements 2,434,493
Design, Planning, & Engineering 364,739
Total City Improvements $9,424,823
(1) Amounts are estimates and subject to change.
(2) Amounts are estimates and subject to change and incorporate estimated DIF credits for street, traffic signal, and park improvements. The actual amount of DIF fees paid are eligible to be funded by the CFD. Further, any capital improvement fee imposed by the City’s capital improvement program not listed above is eligible to be financed by the CFD without an amendment to this Exhibit B, including any fair share or in-lieu fees. (3) The description of the City Improvements are preliminary and general and may be subject to change through supplement to this Exhibit B approved by the Developer and City Manager. The City Improvements may be funded with the proceeds of Special Taxes and Bonds of either or both Improvement Areas regardless of their location.
(4) Represents estimated costs for public street improvements to be dedicated to the City, including, but not limited to Byers Road, McLaughlin Road, Valley Blvd, Goetz Road, and other public and in-tract street improvements.

FIRST AMENDED EXHIBIT C

DESCRIPTION OF THE MISCELLANEOUS IMPROVEMENTS
Water District facilities included in the Water District’s capacity and connection fee programs used to finance expansion projects, exclusive of in-tract facilities constructed by a property owner, but including and not limited to the following:

Description Estimated Cost
Sewer Financial Participation Charge $2,563,596
Sewer Treatment Plant Capacity Charge 4,859,568
Water Financial Participation Charge 5,469,660
Water Supply Development Fee 296,352
1” Meter Drop-In Fees 285,012
Landscape Meter Connection Fees 199,962
Less: Estimated EMWD CFD Funding (11,396,492)
Total Estimated Water District Facilities Fees $2,277,658 Those facilities constructed by or on behalf of the Developer and needed by the Water District in order to provide services to the Developer Property and also include any of the following:

Estimated Cost of the Water District Improvements
Description Estimated Cost
Water Tank Improvements $3,208,704
Design, Planning, & Engineering (15%) 481,306
Total EMWD Improvements $3,690,010
The Romoland School District, Menifee Union School District, and Perris School District improvements to be financed include the following amounts:

Estimated Cost of the School Facilities
Description Estimated Cost
Perris Union High School District Fees $1,049,881
Menifee Union School District Fees 1,155,966
Romoland School District Fees 2,112,378
Total School District Fees $4,318,225
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 20
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RECORDING REQUESTED BY AND
WHEN RECORDED, RETURN TO:

Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attn: Bradley R. Neal, Esq.
_________________________________________________________________________________ This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103.

COMMUNITY FACILITIES DISTRICT NO. 2023-2 (CIMARRON RIDGE)

OF THE CITY OF MENIFEE
(IMPROVEMENT AREA NO. 2)

JOINT COMMUNITY FACILITIES AND

SCHOOL FACILITIES MITIGATION AGREEMENT

THIS JOINT COMMUNITY FACILITIES AND SCHOOL FACILITIES MITIGATION AGREEMENT (IMPROVEMENT AREA NO. 2) (“Agreement”) is made and entered into as of the _____ day of __________, 2024, by and among the CITY OF MENIFEE, a general law city (the “City”), the ROMOLAND SCHOOL DISTRICT, a California public school district organized and operating pursuant to the applicable provisions of the California Education Code and the California Constitution (the “Romoland School District”), PERRIS UNION HIGH SCHOOL DISTRICT, a California public high school district organized and operating pursuant to the applicable provisions of the California Education Code and the California Constitution (“PUHSD” and together with Romoland School District, “School District”) and PULTE HOME COMPANY, a Michigan limited liability company (the “Property Owner,” and, together with the School District and City, the “Parties”).

R E C I T A L S:

A. The Property Owner acquired certain undeveloped property described in Exhibit A and which is depicted on Exhibit B hereto which is within the boundaries of the City and School District (the “Property”); and
B. The Property Owner proposes to construct approximately 332 residential units on all or a portion of the Property (the “Project”); and
C. School District and Property Owner agree that the development of the Project will generate additional students in grades kindergarten through eighth (“Project Students”) who cannot be housed in the existing school facilities of the School District; and D. The development of the Property will require the payment to School District of all or a part of School Fees (defined below) required to finance School Facilities (defined herein). In lieu of the School Fees, the Mitigation Amount (as defined below) is expected to be paid to School District, in whole or in part, from Bond Proceeds (defined below) of the hereinafter described CFD (defined Item Title: 11.2
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below). The City Facilities (as defined herein) and School Facilities are sometimes collectively referred to herein as the “Facilities.”
E. Pursuant to Property Owner’s request, the City Council of the City, has formed, or is in the process of forming, the hereinafter described Community Facilities District No. 2023-2 (Cimarron Ridge) of the City of Menifee (the “CFD”) pursuant to the Act to finance all or a portion of the Facilities. The City will have responsibility for the formation and administration of the CFD.

F. The City is authorized by Section 53313.5 of the Act to finance, by means of the CFD, the School Facilities. This Agreement constitutes a “joint community facilities agreement” (“JCFA”) within the meaning of Section 53316.2 of the Act by and among the City, School District, PUHSD, and Property Owner, pursuant to which the CFD will be authorized to finance the School Facilities. Pursuant to Section 53316.2(b) of the Act, a JCFA may be approved by two or more public agencies prior to the adoption of a resolution authorizing the issuance of bonds. As provided by Section 53316.6 of the Act, responsibility for constructing, maintaining and operating the City Facilities is the City’s to the extent set forth herein and responsibility for constructing, providing and operating the School Facilities is delegated to School District.

G. The provision of the City Facilities and School Facilities is necessitated by the development of the Property, and the Parties hereto find and determine that the residents of the City, Romoland School District, PUHSD, and CFD will be benefited by the financing of the City Facilities and School Facilities, and that this Agreement is beneficial to the interests of such residents.

H. The Property is included within the boundaries of Community Facility District No. 2018-1 (Cimarron Ridge) of the Romoland School District” (“CFD No. 2018-1”).

I. In exchange for the formation of the CFD and this Agreement, the School District shall terminate and cancel CFD No. 2018-1 upon both (i) the execution and delivery of this Agreement, and (ii) 30 days following the adoption of the resolution of the City Council certifying the affirmative vote approving the CFD and proof of the recorded Notice of Special Tax Lien with respect to the CFD.

J. A portion of the Property is also subject to that certain Agreement for Annexation to CFD No. 91-1 of the Romoland School District by and among Perris Union High School District, CFD No. 91-1 of the School District (“CFD No. 91-1”) and Coscan Menifee, Inc. (the “CFD 91-1 Agreement”). The portion of the Property subject to the CFD 91-1 Agreement is described in Exhibit C hereto (the “CFD 91-1 Property”).

K. School District and Property Owner have determined that funding from the State for School Facilities to serve Project Students may be inadequate to meet the needs of School District.

L. School District and Property Owner acknowledge and agree that while funding the School Facilities is the primary obligation of the State, the adequacy of State funding is unpredictable so that the parties may not be able to rely solely upon State funding to finance the School Facilities as such facilities are needed to serve the Project Students.

M. School District and Property Owner agree that, given the uncertainties of State funding, it is in their mutual best interest to enter into this Agreement for the purpose of financing School Facilities necessary to serve the Project Students.

ARTICLE I

GENERAL PROVISIONS
Section 1.1 Recitals. The foregoing recitals are true and correct.

Section 1.2 Definitions.
“Act” means the Mello-Roos Community Facilities Act of 1982, Government Code Section 53311, et seq., as amended from time to time.
“Age Qualified Unit” means a Unit which qualifies as senior citizen housing, residential care facilities for the elderly, or multilevel facilities for the elderly which would be subject to the limitations on school fees set forth in Government Section 65995.1; provided that such Units qualify as a “senior citizen housing development” pursuant to California Civil Code Sections 51.2 and 51.3. “Alternative Level 3 Fee” means the school fee authorized to be levied by School District pursuant to Government Code Section 65995.7.
“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 the number assigned to an Assessor’s Parcel by the County for the purpose of identification.
“Bond Proceeds” means those net funds generated by the sale of the Bonds. “Bond Resolution” means that Resolution, Resolution Supplement, Fiscal Agent Agreement, Indenture of Trust or other equivalent document(s) providing for the issuance of the Bonds. “Bonds” means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, or any refunding thereof incurred by the CFD and repayable out of Special Taxes of the CFD.
“Building Square Feet/Footage” or “BSF” means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space in a Unit, as determined by reference to the building permit(s) application for such Assessor’s Parcel. “Certificate of Compliance” means (i) a certificate issued by the School District pursuant to Education Code Section 17620(b) acknowledging that the recipient thereof has complied with all requirements of the School District for the payment of statutory school fees/alternative school facility Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 23
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fees/mitigation payment or (ii) a certificate issued by the School District acknowledging that adequate provisions have been made for school facilities. “City Facilities” means certain City facilities including, but not limited to fire and safety facilities, street, storm drainage, general government and public use facilities, master planning facilities, park facilities, traffic signals, and utility undergrounding necessary to serve the Property. “CFD” means Community Facilities District No. 2023-2 (Cimarron Ridge) of the City of Menifee.
“CFD No. 91-1” means Community Facilities District No. 91-1 of the School District. “CFD 91-1 Agreement” means that certain Agreement for Annexation to CFD No. 91-1 of the Romoland School District entered into by and among the School District, PUHSD, CFD No. 91-1 and Coscan Perris, Inc.
“CFD 91-1 Property” means the portion of the Property subject to the CFD 91-1 Agreement, which portion is described in Exhibit C hereto.
“CFD 91-1 Prepayment” means a total prepayment of CFD 91-1 Special Taxes or, for an Age Qualified Unit, the Mitigation Amount.
“CFD 91-1 RMA” means the Rate and Method of Apportionment of Special Tax for CFD No. 91-1.
“CFD 91-1 Special Taxes” means the special taxes authorized to be levied within the CFD 91-1 Property pursuant to the CFD 91-1 RMA.
“CFD No. 2018-1” means Community Facilities District No. 2018-1 (Cimarron Ridge) of the Romoland School District.
“COC Credit Amount” means the amount deposited in the School Fees Fund not previously allocated to the mitigation of Units.
“COC Deposits” are defined in Section 2.2.
“County” means the County of Riverside.
“Disbursement Request” means a request for payment relating to School Facilities in the form attached hereto as Exhibit “E.”
“Fiscal Year” means the period commencing July 1st and ending the following June 30th. “Improvement Area No. 2” means Improvement Area No. 2 of Community Facilities District No. 2023-2 (Cimarron Ridge) of the City of Menifee.
“Level 1 Fee” means the school fee authorized to be levied by School District pursuant to Government Code Section 65995.

Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 24
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“Level 2 Fee” means the school fee authorized to be levied by School District pursuant to Government Code Section 65995.5.
“Lot” means a separate assessor’s parcel for which CFD 91-1 Special Taxes may be prepaid in accordance with the CFD 91-1 RMA.
“Mitigation Amount” means, for each Unit which is not an Age Qualified Unit, on the date of calculation, the greater of (i) $10,500, (ii) (a) 150% of the Level 1 Fee or Level 2 Fee then in effect if the Unit is less than 3,000 BSF, (b) 145% of the Level 1 Fee or Level 2 Fee then in effect if the Unit is 3,000 BSF to 3,500 BSF, and (c) 140% of the Level 1 Fee or Level 2 Fee then in effect if the Unit is greater than 3,500 BSF, or (iii) the Alternative Level 3 Fee, if any, then in effect and applicable to Units at the time of the request for Certificates of Compliance for such Units. The Mitigation Amount for Units shall be calculated at the time of the request for Certificates of Compliance for such Units except that the Mitigation Amount funded by the COC Credit Amount shall be calculated as of the date of the sale of the applicable series of Bonds. For each Age Qualified Unit, Mitigation Amount means $4,000 escalating 4% each July 1 beginning July 1, 2026. “Property” means the real property described in Exhibit A and depicted in Exhibit B attached hereto, which is within Improvement Area No. 2.
“PUHSD” means Perris Union High School District.
“RMA” means the Rate and Method of Apportionment of the CFD attached to the resolution of intention to form the CFD.
“School Facilities” means the school facilities of the type described in Exhibit D to be owned and operated by the Romoland School District or PUHSD.
“School Fees Fund” means the fund(s), account(s) or sub-account(s) of the CFD (regardless of its designation within the Bond Resolution) into which a portion of the Bond Proceeds may be deposited in accordance with the Bond Resolution to finance the School Facilities. “School Fees” means those school mitigation fees pursuant to Education Code Section 17620 and Government Code Sections 65995, 65995.5 and 65995.7 required to finance School Facilities. “Special Taxes” means any of the CFD’s special taxes authorized to be levied on the Property pursuant to the Act.
“State” means the State of California.
“Unit” means each separate single family detached dwelling unit within the Property which comprises an independent facility capable of conveyance separate from adjacent residential dwelling units.

ARTICLE II

FORMATION OF THE CFD AND ISSUANCE OF BONDS
Section 2.1 Formation of the CFD. The City, pursuant to the written request of the Property Owner, initiated proceedings pursuant to the Act for the formation of the CFD, the Item Title: 11.2
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authorization of the Special Taxes within the CFD and the authorization of Bonds on behalf of the CFD, with the qualified electors approving the levy of the Special Taxes and the sale of the Bonds.

Section 2.2 Mitigation Amounts Deposits.
(a) Certificates of Compliance Prior to the Issuance of Bonds. The issuance of Certificates of Compliance for the CFD 91-1 Property shall be governed by Section 2.2(c) below and not this Section 2.2(a) or Section 2.2(b). For all other Property within the CFD (other than the CFD 91-1 Property), in order for Property Owner to receive Certificates of Compliance for Units within the Project prior to the issuance of each applicable series of Bonds, Property Owner shall make a cash deposit with the School District (the “COC Deposit”) equal to the Mitigation Amount in effect at that time for all Units for which Certificates of Compliance are being requested and for which the Mitigation Amount has not been previously satisfied through a Bond issuance.

The School District may use any of such COC Deposits to finance School Facilities and upon issuance of a series of Bonds, shall refund Property Owner or a party designated by Property Owner the amount of COC Deposits previously deposited with School District pursuant to this Section 2.2(a) in the amount of Bond Proceeds made available to the School District. (b) Certificates of Compliance Following Bond Issuance. After being notified of the availability of Bond Proceeds in the School Fees Fund in accordance with Section 2.6(a) hereof, the Romoland School District shall issue Certificates of Compliance for Units at the request of the Property Owner without payment to the extent the COC Credit Amount is available therefor, with the Mitigation Amount of each such Unit being deducted from the COC Credit Amount. Thereafter, for any remaining Units, the Property Owner shall pay the School District the Mitigation Amount for the requested Certificates of Compliance.
(c) Prepayment of CFD No. 91-1 Special Taxes. Upon request for a Certificate of Compliance, for a Unit that is not an Age Qualified Unit, within the CFD 91-1 Property prior to issuance of the Bonds, or following Bond issuance to the extent the COC Credit Amount is not available, Property Owner shall (i) prepay 28% of the CFD 91-1 Special Taxes applicable to such Lot (the “CFD 91-1 Prepayment”) and (ii) make a COC Deposit equal to the Mitigation Amount due pursuant to this Mitigation Agreement for the requested Certificate of Compliance. Upon request for a Certificate of Compliance for an Age Qualified Unit with the CFD 91-1 Property, Property Owner shall make a COC Deposit equal to the Mitigation Amount for the requested Certificate of Compliance representing the CFD 91-1 Prepayment. The School District shall subsequently record a Notice of Cessation and Extinguishment of Lien of CFD 91-1 with respect to such Lot within fifteen (15) business days of each such CFD 91-1 Prepayment. The CFD 91-1 Prepayment shall be disbursed to PUHSD pursuant to the CFD 91-1 Agreement, with the remaining amount with respect to an Age Qualified Unit being retained by the Romoland School District as the Mitigation Amount for such Lot (which shall be, along with the CFD 91-1 Prepayment, a “COC Deposit” under this Agreement).

After being notified of the availability of Bond Proceeds in the School Fees Fund in accordance with Section 2.6(a) hereof, the Romoland School District and PUHSD shall issue Certificates of Compliance for Units at the request of the Property Owner without payment to the extent the COC Credit Amount is available therefor, with the Mitigation Amount and the CFD 91-1 Prepayment of each such Unit being deducted from the COC Credit Amount. Thereafter, for any remaining Units, the Property Owner shall pay the School District the Mitigation Amount and CFD Item Title: 11.2
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91-1 Prepayment (as applicable) for the requested Certificates of Compliance. Romoland School District shall disburse to PUHSD the CFD 91-1 Prepayment amount from Bond Proceeds in accordance with the CFD 91-1 Agreement. Upon receipt of the CFD 91-1 Prepayment from Bond Proceeds or a COC Deposit in the event Bond Proceeds are not sufficient therefor, the Romoland School District shall record a Notice of Cessation and Extinguishment of Lien within fifteen (15) business days of each such CFD 91-1 Prepayment.

Section 2.3 Issuance and Sale of Bonds. The City Council of the City, acting as the legislative body of the CFD, may, in its sole discretion, in accordance with its adopted policies, adopt the Bond Resolution and issue the Bonds. Prior to the City Council of the City adopting the Bond Resolution, Property Owner shall notify School District of: (i) the estimated issuance date for the Bonds and (ii) the estimated amount of proceeds to be deposited in the School Fees Fund.

Section 2.4 Bond Proceeds. In the event that the CFD is formed and Bonds are issued, the City, or the CFD (as may be applicable), and Property Owner shall determine the amount of Bond Proceeds to be deposited into the School Fees Fund or any applicable accounts or subaccounts thereof. The City shall prioritize funding School Facilities equal to the entire Mitigation Amount for the Project ahead of City Facilities. As Bond Proceeds are transferred to the School District, Property Owner shall receive a credit in the amount transferred against the payment of the Mitigation Amounts in accordance with Section 2.2 hereof. The purpose of this Agreement is to provide a mechanism by which the CFD may levy Special Taxes and issue Bonds to provide a source of funds to finance School Facilities in lieu of the payment of the Mitigation Amounts. In the event that Bond Proceeds, including investment earnings thereon, are not available or sufficient to satisfy the obligation for the Mitigation Amounts for all Units in Improvement Area No. 2 of the CFD, then Property Owner shall remain obligated to make Deposits or pay the Mitigation Amounts to the School District as provided in Section 2.5 below.

Section 2.5 Disbursements for School Facilities.
(a) Bond Proceeds of the CFD designated for the funding of School Facilities shall be held by the CFD in the School Fees Fund which shall be invested by the City and earn and accumulate its own interest. In the event that the CFD has deposited Bond Proceeds to the School Fees Fund, the City shall notify the School District and the Property Owner, in writing, as to the amount of Bond Proceeds so deposited and the yield on the Bonds. All interest earnings on amounts in the School Fees Fund shall remain in the School Fees Fund and will be available for disbursement for the funding of School Facilities as described below. (b) The City shall make disbursements from the School Fees Fund in accordance with the terms of this Agreement and neither the City nor the CFD shall be responsible to the School District for costs incurred by the School District as a result of withheld or delayed payments. (c) The School District agrees that it will request a disbursement of Bond Proceeds only for costs related to the School Facilities that are eligible for financing under the Act.

The School District agrees that prior to requesting payment from the CFD it shall review and approve all costs included in its request and will have already paid such costs of School Facilities from its own funds or will disburse such amounts to pay the costs of the School Facilities within five banking days of receipt of funds from the CFD. In the event that the School District does not disburse any Bond Proceeds received for disbursement to third parties within five banking days of receipt, it will trace and remit to the CFD from which such Bond Proceeds were received all earnings, if any, earned Item Title: 11.2
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by the School District in excess of the yield on the Bonds, from the date of receipt of such Bond Proceeds by the School District to the date of expenditure by the School District of such Bond Proceeds for capital costs of the School Facilities. Such remittance, if any, shall occur on the earlier of the date of expenditure of such Bond Proceeds or each anniversary date of the transfer of such Bond Proceeds from the CFD to the School District. The School District agrees that in processing the above disbursements it will comply with all legal requirements for the expenditure of Bond Proceeds under the Act and the Internal Revenue Code of 1986 and any amendments thereto. As a condition to receiving any proceeds of the Bonds, the School District agrees that it shall provide to the CFD, a certificate confirming the representations contained in this Section 2.5 and such other matters as the CFD may reasonably request upon which the CFD and its bond counsel may rely in connection with the issuance of such Bonds and their conclusion that interest on such Bonds is not included in gross income for federal income tax purposes.
(d) The School District agrees to maintain adequate internal controls over its payment function and to maintain accounting records in accordance with generally accepted accounting procedures. The School District will, upon request, provide to the CFD and the City its annual financial report certified by an independent certified public accountant and any other documents deemed necessary by the CFD and the City for purposes of calculating the CFD’s arbitrage rebate obligations. The CFD and the City shall have the right to conduct their own audit of the School District’s records related to the expenditure of the Bond Proceeds disbursed to the School District at reasonable times during normal business hours. (e) From time to time, the School District or Property Owner may submit a Disbursement Request along with adequate supporting documentation to the CFD, for the exact amount of Bond Proceeds to be disbursed to the School District. Upon receipt of an approved Disbursement Request completed in accordance with the terms of this Agreement, the City shall wire transfer (or otherwise pay) such portion of requested funds as are then available for release in the School Fees Fund pursuant to the documents pursuant to which the Bonds are issued to the School District’s bank account, as directed by the School District. (f) If three (3) years following the issuance of the Bonds, 85% or more of the amount deposited into the School Fees Fund from proceeds of such Bonds have not been expended for federal tax law purposes, the CFD may in its sole discretion transfer such funds to such other account in the sole discretion of the CFD to be used to pay for the costs of eligible public facilities or to the redemption fund to redeem Bonds; provided, however that such funds may be retained in the School Fees Fund beyond such three-year period upon the written request of the School District, and delivery by the School District of an opinion of bond counsel that such extension will not affect the exclusion from gross income of interest on such Bonds issued on a tax-exempt basis. City shall provide the School District with written notice at least six months prior to making any transfer pursuant to this Section 2.5(f).

Section 2.6 Responsibility for Mitigation Amounts.
(a) The Parties hereto acknowledge and agree that the final responsibility for the payment of the Mitigation Amounts and CFD 91-1 Prepayment not funded with Bond Proceeds lies with Property Owner.
(b) If the amounts derived from Bond Proceeds for School Facilities deposited in the School Fees Fund, including investment earnings thereon, if any, are not sufficient to fund the Item Title: 11.2
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total cost of the Mitigation Amounts, the Parties hereto agree that all responsibility and liability for the amount of such shortfall shall be and remain with Property Owner, and shall not lie with the CFD, the School District, or the City.
(c) The School District agrees to utilize or apply funds provided to it by the CFD, in accordance with the Act, the Local Agency Special Tax and Bond Accountability Act (described in Section 4.1 hereof), the requirements of federal tax law compliance with which is necessary in order for interest on the Bonds to be excluded from the gross income of the recipients for federal income tax purposes and other applicable law, and as set forth herein. (d) The School District shall indemnify, defend, and hold harmless, the City, CFD and Property Owner, their respective officers, employees and agents, and each and every one of them from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of or resulting from the violation by the School District of any of the terms of this Agreement of the design, engineering, and construction of the School Facilities and any other facilities constructed with the proceeds of the Mitigation Amounts.

Section 2.7 Mitigation of School Fee Obligations of Development of the Property.

Property Owner and the School District agree that payment of the Mitigation Amount to the School District with respect to any Unit for which a Certificate of Compliance is requested within the Property, whether with CFD Bond Proceeds or otherwise, shall constitute full mitigation of the obligations due the School District in connection with the issuance of a Certificate of Compliance with respect to such Unit.

The School District shall have no obligation, responsibility, or authority with respect to the issuance and sale of the Bonds, the Bond Proceeds available to finance the construction of School Facilities, the payment of the principal and interest on the Bonds, or for the levy of the Special Taxes to provide for the payment of principal and interest thereon. The City shall have the sole authority and responsibility for all such matters.

The Parties hereto specifically agree that, except as otherwise provided for in Section 2.4, the liabilities of the CFD, including liabilities, if any, of the CFD pursuant to the documents providing for the issuance of Bonds, including the Bond Resolution, shall not be or become liabilities of the School District.

Section 2.8 Waiver of State and Local Funding Credits and Right to Protest. In consideration of the School District’s agreement with respect to the Property to accept the Mitigation Amounts as full mitigation of the impact of the students generated by the development of the Property upon the School Facilities, and provided the School District does not breach such agreement, Property Owner agrees to waive all past, present and future credit against, or fair share reduction in, Mitigation Amounts based upon State matching funding provided to the School District or the proceeds from a District-wide special tax or general obligation bond authorization, or School Facilities Improvement District (“SFID”) bond authorization for school facilities. In addition, Property Owner knowingly waives its right of protest as may be afforded by Government Code Section 66020 or any other provision of law, so long as the School District is not in breach of this Agreement.

Section 2.9 Property Owner Advance. Property Owner has deposited with the School District the amount of $36,000 to be used to advance fund the School District’s costs in entering into Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 29
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and administering the terms of this Agreement. Such advance by Property Owner may be reimbursed, subject to the approval of the City, from the proceeds of the sale of the Bonds, but under no circumstances shall the School District be obligated to pay Property Owner from any other source of funds. Should this Agreement not be approved for any reason, any remaining balance of the amounts advanced by Property Owner pursuant to this Section shall be refunded to Property Owner within ten (10) business days after the School District is notified that this Agreement will not be approved.

Section 2.10 Administration of the CFD. The City shall have the power and duty to provide for the administration of the CFD, subject to the terms hereof and the Bond Resolution, including employing and compensating all consultants and providing for the various other administration duties set forth in this Agreement. It is understood and agreed by Parties hereto that the School District was not or will not be considered a participant in the proceedings relative to formation of the CFD or the issuance of the Bonds, other than as set forth in this Agreement.

ARTICLE III

TERM AND TERMINATION
Section 3.1 Effective Date. This Agreement shall become effective and of full force and effect as of the date (“Effective Date”) it is approved and executed by the Board of Trustees of the School District, by Property Owner and the City Council of the City, to be confirmed by the execution hereof by the authorized representatives of the Parties hereto.

Section 3.2 Termination. If no building permits have been issued within the Project on or before July 1, 2029, then this Agreement and the obligations of the parties hereto shall terminate and shall no longer be in force and effect; provided that Section 4.2 shall survive such termination.

ARTICLE IV

ADDITIONAL GENERAL PROVISIONS
Section 4.1 Recordkeeping; Inspection of Records. The School District hereby agrees to keep and maintain full and accurate records of all amounts, if any, paid to the School District for Mitigation Amounts and investment earnings thereon and the City or the CFD, or the Fiscal Agent on their behalf, hereby agrees to keep and maintain full and accurate records of all amounts, and investment earnings, if any, disbursed to the School District from the School Fees Fund. Each Party further agrees to make such records available to any other Party hereto, including Property Owner, during normal business hours upon reasonable prior notice. All such records shall be kept and maintained by the appropriate Party as provided by applicable law and their respective policies. The School District and Property Owner agree that they will cooperate with the CFD and the City in providing documentation, reports or other data reasonably required and requested by the City or the CFD in meeting the reporting requirements of the CFD under Sections 50075.1, 50075.3, and 50075.5 and Article 1.5 (commencing with Section 53410) of Chapter 3 of Part 1 of Division 2 of Title 5 of, the Government Code (collectively, the “Local Agency Special Tax and Bond Accountability Act”). The School District’s reporting obligations pursuant to this Section shall be limited to providing reports or other data detailing the following: (A) the amount of CFD funds received by the School District to fund School Facilities, (B) the amount of such CFD funds deposited in separate funds or accounts of the School District reflecting Mitigation Amounts and the number of dwelling units for which such Mitigation Amounts apply, and (C) School Facilities that have been acquired or constructed, in whole or in part, with CFD funds. The School District’s Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 30
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reporting obligation shall terminate when all CFD funds have been disbursed from the School Fees Fund, or from any account or subaccount thereof that has been allocated Bond Proceeds to finance Mitigation Amounts, and the School District has provided to the City a report for the last disbursement received by the School District. If no CFD funds have been received by the School District or used to finance School Facilities since the previous report, no report shall be required and the City may rely upon the previous reports.

Section 4.2 Indemnification.
(a) The City agrees to indemnify, defend and hold harmless the School District, and its officers, employees and agents, and each and every one of them, from and against any and all claims, losses, expenses, suits, actions, decrees, judgments, awards, attorneys’ fees and court costs which the School District, or its officers, employees and agents, or any combination thereof, may suffer or which may be sought against or recovered or obtained from the School District, or its respective officers, employees or agents, or any combination thereof, as a result of or by reason of or arising out of or in consequence of the acquisition, construction, installation, operation, maintenance or utilization of the City Facilities, the issuance of the Bonds and/or the formation or administration of the CFD. If the City fails to do so, the School District shall have the right, but not the obligation, to defend the same and charge all of the direct and incidental costs of such defense, including any attorneys’ fees or court costs, to and recover the same from the City.

No indemnification is required to be paid by the City for any claim, loss or expense arising from the willful misconduct or negligence of the School District, or its officers, employees or agents. (b) Property Owner agrees to indemnify, defend and hold harmless the City, the CFD and the School District, and their respective officers, employees and agents, and each and every one of them, from and against any and all claims, losses, expenses, suits, actions, decrees, judgments, awards, attorneys’ fees and court costs which the City, the CFD or the School District, or their respective officers, employees and agents, or any combination thereof, may suffer or which may be sought against or recovered or obtained from the City, the CFD or the School District, or their respective officers, employees or agents, or any combination thereof, as a result of or by reason of or arising out of or in consequence of any act or omission of Property Owner with respect to this Agreement, the formation of the CFD or the use of the Bond Proceeds. If Property Owner fails to do so, the City, the CFD and the School District shall have the right, but not the obligation, to defend the same and charge all of the direct and incidental costs of such defense, including any attorneys’ fees or court costs, to and recover the same from Property Owner.

No indemnification is required to be paid by Property Owner for any claim, loss or expense arising from the willful misconduct or negligence of the City (if indemnification is sought by the City), the CFD (if indemnification is sought by the CFD) or the School District (if indemnification is sought by the School District), or their respective officers, employees or agents (if indemnification is sought thereby).

Section 4.3 Partial Invalidity. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible.

Section 4.4 Successors and Assigns. Property Owner may assign its rights pursuant to this Agreement to a purchaser of the Property, or any portion thereof, and such purchaser and Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 31
Menifee Mayor and City Council August 21, 2024 Page 745 of 1068 #219249 v2 9034.97 12
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assignee shall assume the obligations of Property Owner pursuant to this Agreement and to be bound thereby. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties hereto.

Section 4.5 Notice. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to any Party or other person shall be deemed to have been received when personally delivered or upon deposit of the same in the United States Post Office registered or certified, postage prepaid, addressed as follows:

City: City of Menifee
________________
________________
Attention: ________________
School District: Romoland School District
25900 Leon Road
Homeland, California 92548
Attention: Superintendent
Perris Union High School District
155 E. 4th Street
Perris, California 92570
Attention: Superintendent
With a copy to: Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Bradley R. Neal, Esq.

Property Owner: Pulte Home Company, LLC
27401 Los Altos, Suite 400
Mission Viejo, CA 92691
Attention: Darren Warren
Section 4.6 Each Party can change its address for delivery of notice by delivering written notice of such change or address to the other Parties within ten (10) calendar days prior to such change.

Section 4.7 Captions. The captions to Sections used herein are for convenience purposes only and are not part of this Agreement.

Section 4.8 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California applicable to contracts made and performed in said State.

Section 4.9 Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the matters provided for herein and supersedes all prior agreements and negotiations between the Parties with respect to the subject matter of this Agreement.

Section 4.11 Waiver. The failure of any Party hereto to insist on compliance within any of the terms, covenants or conditions of this Agreement by any other Party hereto, shall not be deemed a waiver of such terms, covenants or conditions of this Agreement by such other Party, nor shall any waiver constitute a relinquishment of any other right or power for all or any other times.

Section 4.12 Cooperation and Execution of Documents. The Parties hereto agree to complete and execute any further or additional documents which may be necessary to complete or further the terms of this Agreement.

Section 4.13 Attorneys’ Fees. In the event of the bringing of any action or suit by any Party against any other Party arising out of this Agreement, the Party in whose favor final judgment shall be entered shall be entitled to recover from the losing Party all costs and expenses of suit, including reasonable attorneys’ fees.

Section 4.14 Exhibits. The following exhibits attached hereto are incorporated into this Agreement by reference.

Exhibit Description
“A” Property Description
“B” Map of Property
“C” CFD 91-1 Property
“D” Description of School Facilities
“E” Disbursement Request Form
Section 4.15 Signatories. The signatories hereto represent that they have been appropriately authorized to enter into this Agreement on behalf of the Party for whom they sign.

Section 4.16 Execution in Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. [Signatures on following page]
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 33
Menifee Mayor and City Council August 21, 2024 Page 747 of 1068 #219249 v2 9034.97 S-1
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IN WITNESS WHEREOF, the Parties hereto have executed this Joint Community Facilities and School Facilities Mitigation Agreement as of the day and year written above.

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

City Manager
ATTEST:

By:

City Clerk
(SIGNATURE PAGES CONTINUE ON NEXT PAGE)
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 34
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ROMOLAND SCHOOL DISTRICT
By:

Superintendent
ATTEST:

Clerk of the Board of Trustees

PERRIS UNION HIGH SCHOOL DISTRICT
By:

Superintendent
ATTEST:

Clerk of the Board of Trustees
(SIGNATURE PAGES CONTINUE ON NEXT PAGE)
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 35
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PROPERTY OWNER:

PULTE HOME COMPANY, LLC
a Michigan limited liability company
By:

STATE OF CALIFORNIA )
) ss.

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

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 37
Menifee Mayor and City Council August 21, 2024 Page 751 of 1068 #219249 v2 9034.97
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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
) ss.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 38
Menifee Mayor and City Council August 21, 2024 Page 752 of 1068 #219249 v2 9034.97
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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
) ss.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY
Real property in the City of Menifee, County of Riverside, State of California, included within the following assessor parcels (“APN”):
330-220-004
330-220-005
330-220-007
330-220-008
330-220-010
330-220-011
330-220-012
330-220-013
330-230-003
330-230-010
330-230-013
330-230-015
330-230-029
330-230-032
330-230-034
330-230-035
330-230-036
330-230-037
330-230-038
330-230-039
330-230-040
330-230-041
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 40
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EXHIBIT B

MAP OF PROPERTY
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 41
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EXHIBIT C
CFD NO. 91-1 PROPERTY
The CFD 91-1 Property includes the real property in the City of Menifee, County of Riverside, State of California, with the following assessor parcels (“APN”):
330-220-004
330-220-005
330-220-007
330-220-008
330-220-010
330-220-011
330-220-012
330-220-013
330-230-003
330-230-015
330-230-029
330-230-036
330-230-037
330-230-038
330-230-039
Item Title: 11.2
Ordinance Introduction and First Reading for Change Proceedings for Improvement Area No. 2 of Community Facilities District No. 2023-2, Cimarron Ridge by Pulte Home Company, LLC Item Page Number: 42
Menifee Mayor and City Council August 21, 2024 Page 756 of 1068 #219249 v2 9034.97 D-1
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EXHIBIT D

DESCRIPTION OF THE SCHOOL FACILITIES
K-5 School Facilities
K-5 school sites and facilities with a useful life of at least five (5) years, including classrooms, ancillary facilities, and on-site office space at such K-5 school facilities; additionally, furniture, equipment and technology with a useful life of at least five (5) years at such K-5 School Facilities.

Middle School Facilities
Middle school sites and facilities with a useful life of at least five (5) years, including classrooms, ancillary facilities, and on-site office space at such middle school facilities; additionally, furniture, equipment and technology with a useful life of at least five (5) years at such Middle School Facilities.

High School Facilities
High school sites, high school facilities, including classrooms, on-site office space at a school, central support and administrative facilities, interim housing, furniture, equipment, technology, busses, and transportation facilities needed by Perris Union High School District in order to serve the student population to be generated as a result of development of the property within CFD No. 2023-2, and also includes costs associated with the maintenance and operation of school facilities in accordance with the Act.

Other School Facilities
Central support and administrative facilities, interim housing and transportation facilities with a useful life of at least five (5) years; additionally, furniture, equipment and technology with a useful life of at least five (5) years.

EXHIBIT E

FORM OF DISBURSEMENT REQUEST
Community Facilities District No. 2023-2 of the City of Menifee (Cimarron Ridge) (“CFD No. 2023-2”) is hereby requested to pay from the School Fees Fund, or any applicable account or subaccount thereof, established by CFD No. 2023-2 in connection with its Special Tax Bonds (the “Bonds”) to Romoland School District (“Romoland”), as payee, the sum set forth below:
$__________ (the “Requested Amount”)

2. The Requested Amount is due and payable, has not formed the basis of any prior request or disbursement and is being made with respect to the obligation of the Property to pay Mitigation Amounts to Romoland.

3. The Requested Amount is authorized and payable pursuant to the terms of that certain Joint Community Facilities and School Mitigation Agreement, dated as of __________, 2024, by and among the City of Menifee, Romoland, Perris Union High School District, and Pulte Home Company, LLC, a Michigan limited liability company (the “JCFA”).

4. Capitalized undefined terms used herein shall have the meanings ascribed to them in the JCFA.

Date: PULTE HOME COMPANY, LLC, a Michigan
limited liability company
By:

Its: Authorized Signatory
Date: ROMOLAND SCHOOL DISTRICT
By:

Its:

CITY OF MENIFEE
SUBJECT: Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch
MEETING DATE: August 21, 2024
TO: Mayor and City Council
PREPARED BY: Lauri Lockwood, Financial Analyst
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------

RECOMMENDED ACTION

1. Adopt a resolution authorizing the issuance of special tax bonds and the execution and delivery of bond documents in connection with Community Facilities District 2022-1, Quartz Ranch, located south of La Piedra Road, on both the east and west sides of Evans Road.

2. Authorize the Finance Department to establish the necessary revenue and expenditure budgets and corresponding appropriations for the bond issuance.

DISCUSSION
The City Council previously completed the necessary proceedings to establish Community Facilities District No. 2022-1, Quartz Ranch, of the City of Menifee (the “District”) and the incurrence of bonded indebtedness by the District in a principal amount not-to-exceed $27 million to finance public facilities.

In July 2023, the District issued its first series of bonds in the principal amount of $11,525,000 (the “2023A Bonds”) to finance certain public facilities. The proposed Special Tax Bonds, Series 2024A (the “2024A Bonds”) would be issued to finance the costs of additional public improvements benefitting the District. The 2024A Bonds would be payable from the Special Taxes of the District on parity with the 2023A Bonds.

The District contains approximately 80 taxable acres and is located south of La Piedra Road, on both the east and west sides of Evans Road in the City. The developer of the property is Lennar Homes of California, LLC, a California limited liability company (“Lennar”). The project is planned for 379 single-family detached homes and is being marketed by Lennar as “Quartz Ranch.” Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 1
Menifee Mayor and City Council August 21, 2024 Page 759 of 1068 City of Menifee Staff Report
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch August 21, 2024

Page 2 of 3 ends

Development in the District has progressed since the issuance of the District’s 2023A Bonds. As of June 17, 2024, Lennar had completed and conveyed 278 homes within the District to individual homeowners, and as of such date, Lennar owned five model homes, 70 homes in various stages of construction (48 of which were in escrow), and 26 finished lots (none of which were in escrow).

Lennar currently expects to complete and convey all homes planned within the District to individual homeowners by the end of 2025.

Annual debt service on the proposed 2024A Bonds would be sized based on the expected Special Tax revenues to be received from all 379 parcels to be developed in the District. The development and ownership status of the planned homes within the District as of June 17, 2024, is shown in the table below.

Ownership and Development Summary (June 17, 2024)
Parcels In Escrow
Individually Owned
Completed 278 --
Developer Owned
Model Homes 5 --
Under Construction 70 48
Finished Lots

Subtotal
26 101
--
48 TOTAL 379 48
The property owners are expected to pay Special Taxes of approximately $2,893 to $4,039 per parcel in Fiscal Year 2024/2025, depending on the size of the home. Those Special Taxes would increase at 2.0% per year.

Based on current market conditions, the 2024A Bonds are estimated to have a par amount of approximately $9.465 million with a final maturity of September 1, 2054 (30-year financing term).

Proceeds from the 2024A Bonds would primarily finance public improvements benefiting the development within the District. The final par amount and interest rate structure would be determined when the 2024A Bonds are priced and sold, which is currently expected to occur in late August/early September. Following the issuance of the 2024A Bonds, the lien would be closed, and no additional parity bonds would be permitted except for refunding bonds.

As required under Section 5852.1 of the California Government Code (the “Code”), good faith estimates as provided by the Municipal Advisor and Underwriter are provided as an attachment to this staff report.

The resolution before the City Council authorizes the issuance of the 2024A Bonds and the execution and delivery of the following documents attached to this staff report:
• Preliminary Official Statement
• First Supplement to the Bond Indenture
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 2
Menifee Mayor and City Council August 21, 2024 Page 760 of 1068 City of Menifee Staff Report
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch August 21, 2024

Page 3 of 3 ends

• 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 would continue to work with the financing team to finalize the aforementioned documents. The pricing date is targeted for late this month, with bond closing anticipated in September 2024.

STRATEGIC PLAN OBJECTIVE
Regular City Business

FISCAL IMPACT
The 2024A Bonds are paid from Special Taxes levied in the District. The property owners are expected to pay Special Taxes of approximately $2,893 to $4,039 per parcel in Fiscal Year 2024/2025, depending on the size of the home. Such Special Taxes would increase 2.0% per year. There is no fiscal impact to the City’s General Fund.

ATTACHMENTS

1. Project Map CFD 2022-1

2. Good Faith Estimates CFD 2022-1

3. Resolution of Issuance CFD 2022-1

4. Preliminary Official Statement CFD 2022-1

5. First Supplement to the Bond Indenture CFD 2022-1

6. Continuing Disclosure Certificate CFD 2022-1

7. Bond Purchase Agreement CFD 2022-1

8. Appraisal Report
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 3
Menifee Mayor and City Council August 21, 2024 Page 761 of 1068 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 4
Menifee Mayor and City Council August 21, 2024 Page 762 of 1068

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 District by Urban Futures, Inc., the District’s Municipal Advisor (the “Municipal Advisor”) in consultation with Stifel, Nicolaus & Company, Incorporated, the Underwriter for 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 $9,465,000 (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 4.92%.

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 $318,313.

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 $8,557,585.

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 $20,351,040.

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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 5
Menifee Mayor and City Council August 21, 2024 Page 763 of 1068 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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 6
Menifee Mayor and City Council August 21, 2024 Page 764 of 1068 4861-0683-6943v3/200299-0022
RESOLUTION NO. 24-___

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE,

ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 2022-1 (QUARTZ RANCH) OF THE CITY OF MENIFEE

AUTHORIZING THE ISSUANCE OF ITS SPECIAL TAX BONDS,
SERIES 2024A IN A PRINCIPAL AMOUNT NOT TO EXCEED TEN
MILLION FIVE HUNDRED THOUSAND DOLLARS ($10,500,000), 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. 2022-1 (Quartz Ranch) 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 (the “Act”); and
WHEREAS, pursuant to Resolution Nos. 22-1150 and 22-1151 adopted by the legislative body of the District on May 18, 2022, 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 May 18, 2022; and
WHEREAS, the District has previously issued its $11,525,000 Special Tax Bonds, Series 2023A (the “2023 Bonds”) to finance certain public facilities that the District was authorized to finance (the “Facilities”); and
WHEREAS, the 2023 Bonds were issued pursuant to a Bond Indenture dated as of July 1, 2023 (the “2023 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 $10,500,000 designated as the “Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee Special Tax Bonds, Series 2024A” (the “2024 Bonds”); and
WHEREAS, in order to effect the issuance of the 2024 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 2024 Bonds is more than three times the sum of the principal amount of the 2024 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 2023 Bonds), all as calculated in the manner set forth in Section 53345.8(a) of the Act; and
WHEREAS, the City Council has determined in accordance with Section 53360.4 of the Act that a negotiated sale of the 2024 Bonds to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) in accordance with the terms of the Bond Purchase Agreement for the 2024 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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 7
Menifee Mayor and City Council August 21, 2024 Page 765 of 1068 Resolution Authorizing Issuance of CFD 2022-1 Special Tax Bonds 4861-0683-6943v3/200299-0022
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. 2022-1 (Quartz Ranch) of the City of Menifee, California, hereby finds, determines and orders as follows:

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

Section 2. The issuance of the 2024 Bonds is hereby authorized in an aggregate principal amount not to exceed $10,500,000, 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 2024 Bonds. The 2024 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 2024 Bonds shall be governed by the terms and conditions of the 2023 Indenture, as supplemented and amended by the First Supplement to Bond Indenture (the “First Supplement” and together with the 2023 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 2024 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 2024 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 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 that are not defined herein have the meanings ascribed to them in the Indenture.

Section 3. The 2024 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 2024 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 2024 Bonds.

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 2024 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 1.10% of the principal amount of the 2024 Bonds and only if the true interest cost on the 2024 Bonds does not exceed 5.75%. Each of the Authorized Officers is authorized to determine the day on which the 2024 Bonds Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 8
Menifee Mayor and City Council August 21, 2024 Page 766 of 1068 Resolution Authorizing Issuance of CFD 2022-1 Special Tax Bonds 4861-0683-6943v3/200299-0022
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 2024 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 2024 Bonds and any supplement thereto to the purchasers of the 2024 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 2024 Bonds is more than three times the principal amount of the 2024 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 2023 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 2024 Bonds. Such services shall include, but not be limited to, printing the 2024 Bonds, obtaining legal services, trustee and paying 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 2024 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 2024 Bonds in accordance with the provisions of this Resolution and the fulfillment of the purposes of the 2024 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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 9
Menifee Mayor and City Council August 21, 2024 Page 767 of 1068 Resolution Authorizing Issuance of CFD 2022-1 Special Tax Bonds 4861-0683-6943v3/200299-0022
Section 12. This Resolution shall be effective upon its adoption.

PASSED, APPROVED AND ADOPTED this 21st day of August, 2024. ___________________________
Bill Zimmerman, Mayor
Attest:
___________________________
Stephanie Roseen, Acting City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 10
Menifee Mayor and City Council August 21, 2024 Page 768 of 1068 Stradling Yocca Carlson & Rauth
Draft of 7/22/24
4864-5136-1231v3/200299-0022
PRELIMINARY OFFICIAL STATEMENT DATED AUGUST __, 2024
NEW ISSUE—BOOK-ENTRY ONLY NO RATING
In the opinion of Stradling Yocca Carlson & Rauth LLP, 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 (and original issue discount) on the 2024 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 2024 Bonds is exempt from State of California personal income tax. See “TAX MATTERS” with respect to tax consequences relating to the 2024 Bonds, including with respect to the alternative minimum tax imposed on certain large corporations. $9,465,000*
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2024A
Dated: Delivery Date Due: September 1, as shown on inside cover page The Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee Special Tax Bonds, Series 2024A (the “2024 Bonds”) are being issued by Community Facilities District No. 2022-1 (Quartz Ranch) 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”), water and sewer facilities to be owned and operated by the Eastern Municipal Water District and school facilities to be owned and operated by the Menifee Union School District; (ii) fund a deposit to the Reserve Account (as defined herein); and (iii) pay costs of issuance for the 2024 Bonds. The 2024 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 July 1, 2023, as supplemented by that certain First Supplement to Bond Indenture, dated as of September 1, 2024, (together, the “Indenture”) each by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”).

The 2024 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 2024 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 2023A, which are currently outstanding in the aggregate principal amount of $11,475,000 (the “2023 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 2024 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 2024 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 2024 Bonds will not receive certificates representing their beneficial ownership of the 2024 Bonds but will receive credit balances on the books of their respective nominees. The 2024 Bonds will not be transferable or exchangeable except for transfer to another nominee of DTC or as otherwise described herein. Interest on the 2024 Bonds will be payable on each March 1 and September 1, commencing March 1, 2025.

Principal of and interest on the 2024 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 2024 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 2024 BONDS. EXCEPT FOR THE NET TAXES, NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE 2024 BONDS. THE 2024 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 2024 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 2024 BONDS — Redemption.” Investment in the 2024 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 2024 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 2024 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 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 LLP, 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 LLP, 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 September __, 2024.
*
Preliminary, subject to change.

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 11
Menifee Mayor and City Council August 21, 2024 Page 769 of 1068 4864-5136-1231v3/200299-0022
[STIFEL LOGO]
Dated: _______, 2024
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 12
Menifee Mayor and City Council August 21, 2024 Page 770 of 1068 4864-5136-1231v3/200299-0022
$9,465,000*
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2024A

MATURITY SCHEDULE
BASE CUSIP†: 58680W
Maturity Date
(September 1)
Principal
Amount Interest Rate Yield Price CUSIP No.†
$______ ___% Term Bonds due September 1, 20__ Yield: ___% Price: ____ CUSIP No.† __ $______ ___% Term Bonds due September 1, 20__ Yield: ___% Price: ____ CUSIP No.† __ $______ ___% Term Bonds due September 1, 20__ Yield: ___% Price: ____ CUSIP No.† __ *
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 FactSet Research Systems Inc. Copyright(c) 2024 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 City, the District nor the Underwriter is responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable 2024 Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the 2024 Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the 2024 Bonds.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 13
Menifee Mayor and City Council August 21, 2024 Page 771 of 1068 4864-5136-1231v3/200299-0022

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
Travis Hickey, Chief Financial Officer

CITY ATTORNEY
Rutan & Tucker, LLP
Irvine, California

BOND AND DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth LLP
Newport Beach, California

MUNICIPAL ADVISOR
Urban Futures, Inc.

Walnut Creek, California

SPECIAL TAX CONSULTANT
Spicer Consulting Group, LLC
Murrieta, California

APPRAISER
Kitty Siino & Associates, Inc.

Tustin, California

TRUSTEE
Wilmington Trust, National Association
Costa Mesa, California
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 14
Menifee Mayor and City Council August 21, 2024 Page 772 of 1068 4864-5136-1231v3/200299-0022
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 2024 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 2024 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 2024 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.

THE 2024 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE 2024 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 2024 Bonds .

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 15
Menifee Mayor and City Council August 21, 2024 Page 773 of 1068 i
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TABLE OF CONTENTS
Page
INTRODUCTION .................................................................................................................................................1 The District ........................................................................................................................................................1 Sources of Payment for the Bonds.....................................................................................................................2 Appraisal Report ................................................................................................................................................3 Description of the 2024 Bonds ..........................................................................................................................3 Tax Exemption...................................................................................................................................................4 Professionals Involved in the Offering ..............................................................................................................4 Continuing Disclosure .......................................................................................................................................4 Parity Bonds for Refunding Purposes Only.......................................................................................................5 Bond Owners’ Risks ..........................................................................................................................................5 Other Information ..............................................................................................................................................5 FINANCING PLAN ..............................................................................................................................................6 Estimated Sources and Uses of Funds ...............................................................................................................6 THE 2024 BONDS ................................................................................................................................................6 General Provisions.............................................................................................................................................6 Debt Service Schedule .......................................................................................................................................8 Redemption........................................................................................................................................................8 Registration, Transfer and Exchange...............................................................................................................12 SOURCES OF PAYMENT FOR THE BONDS .................................................................................................13 Limited Obligations .........................................................................................................................................13 Special Taxes ...................................................................................................................................................13 Reserve Account of the Special Tax Fund.......................................................................................................20 No Teeter Plan .................................................................................................................................................21 Parity Bonds.....................................................................................................................................................21 THE DISTRICT...................................................................................................................................................21 General Description of the District..................................................................................................................21 Authorized Uses of Bond Proceeds .................................................................................................................22 Appraisal Report ..............................................................................................................................................22 Estimated Appraised Value-to-Lien Ratios .....................................................................................................23 Direct and Overlapping Debt...........................................................................................................................26 Delinquency History ........................................................................................................................................29 PROPERTY OWNERSHIP AND THE DEVELOPMENT................................................................................29 Planned Development Within the District .......................................................................................................29 Lennar Homes..................................................................................................................................................30 SPECIAL RISK FACTORS ................................................................................................................................31 Risks of Real Estate Secured Investments Generally ......................................................................................31 Insufficiency of Special Tax Revenues............................................................................................................32 Impact of Economic Conditions on the Development in the District..............................................................33 Increasing Mortgage Interest Rates .................................................................................................................33 Property Values................................................................................................................................................34 Natural Disasters..............................................................................................................................................34 Hazardous Substances......................................................................................................................................35 Enforcement Delays – Bankruptcy ..................................................................................................................35 Special Tax Delinquencies...............................................................................................................................35 FDIC/Federal Government Interests in Parcels ...............................................................................................36 Direct and Overlapping Indebtedness..............................................................................................................37 Payment of Special Taxes is not a Personal Obligation of the Property Owners............................................37 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 16
Menifee Mayor and City Council August 21, 2024 Page 774 of 1068 ii
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No Acceleration Provision...............................................................................................................................37 Limited Obligations .........................................................................................................................................37 Ballot Initiatives...............................................................................................................................................38 Proposition 218 ................................................................................................................................................38 Litigation with Respect to Community Facilities Districts .............................................................................39 Loss of Tax Exemption....................................................................................................................................40 No Ratings – Limited Secondary Market ........................................................................................................40 Limitations on Remedies .................................................................................................................................40 Potential Early Redemption of 2024 Bonds from Prepayments or Community Facilities District Bond Proceeds ....................................................................................................................................................41 Cybersecurity ...................................................................................................................................................41 CONTINUING DISCLOSURE...........................................................................................................................41 TAX MATTERS..................................................................................................................................................41 LEGAL OPINION ...............................................................................................................................................43 ABSENCE OF LITIGATION .............................................................................................................................43 NO RATING........................................................................................................................................................43 UNDERWRITING ..............................................................................................................................................44 FINANCIAL INTERESTS..................................................................................................................................44 MUNICIPAL ADVISOR.....................................................................................................................................44 MISCELLANEOUS ............................................................................................................................................44 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 FORM OF DEVELOPER CONTINUING DISCLOSURE CERTIFICATE .................G-1 APPENDIX H BOOK-ENTRY ONLY SYSTEM ..................................................................................H-1 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 17
Menifee Mayor and City Council August 21, 2024 Page 775 of 1068 4864-5136-1231v3/200299-0022
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Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 18
Menifee Mayor and City Council August 21, 2024 Page 776 of 1068 4864-5136-1231v3/200299-0022
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Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 19
Menifee Mayor and City Council August 21, 2024 Page 777 of 1068 1 4864-5136-1231v3/200299-0022
$9,465,000*
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2024A

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. 2022-1 (Quartz Ranch) of the City of Menifee (the “District”) of its Special Tax Bonds, Series 2024A in the aggregate principal amount of $9,465,000* (the “2024 Bonds”). The proceeds of the 2024 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”), water and sewer facilities to be owned and operated by the Eastern Municipal Water District and school facilities to be owned and operated by the Menifee Union School District; (ii) fund a deposit to the Reserve Account (as defined herein); and (iii) pay costs of issuance for the 2024 Bonds.

The 2024 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 August 21, 2024, by the City Council of the City, acting as the legislative body of the District, and a Bond Indenture, dated as of July 1, 2023, as supplemented by that certain First Supplement to Bond Indenture dated as of September 1, 2024 (together, the “Indenture”), each by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”). The 2024 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, on a parity with the District’s Special Tax Bonds, Series 2023A, which are currently outstanding in the aggregate principal amount of $11,475,000 (the “2023 Bonds”). The 2023 Bonds and the 2024 Bonds are referred to collectively herein as the “Bonds.”
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 2024 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 80 taxable acres, and is located south of La Piedra Road, on both the east and west sides of Evans Road in the City. The property within the District is being developed by Lennar Homes of California, LLC, a California limited liability company (“Lennar Homes”) in a project marketed by Lennar Homes as “Quartz Ranch.”
The property within the District is planned for 379 single-family detached homes. As of June 17, 2024, Lennar Homes had completed and conveyed 278 homes within the District to individual homeowners. As of such date, Lennar Homes owned five model homes, 70 homes under construction (48 of which were in escrow), and 26 finished lots (none of which were in escrow). Lennar Homes currently expects to complete and convey all homes planned within the District to individual homeowners by the end of 2025. *
Preliminary, subject to change.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 20
Menifee Mayor and City Council August 21, 2024 Page 778 of 1068 2 4864-5136-1231v3/200299-0022
The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District has been completed. Lennar Homes expects to complete the remaining in-tract infrastructure within the District, which consists of landscaping, certain interior streets, and wet and dry utilities as construction of the related homes occurs.

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 May 18, 2022, 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 April 6, 2022, the City Council adopted Resolution No. 22-1133 (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. 22-1134, stating its intention to incur bonded indebtedness in an aggregate principal amount not to exceed $27,000,000 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 May 18, 2022, the City Council adopted Resolution Nos. 22- 1150 and 22-1151 (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 $27,000,000 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 May 18, 2022, 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 $27,000,000. A Notice of Special Tax Lien for the District was recorded in the office of the County Recorder on May 26, 2022, as Document No. 2022-0243290. On June 1, 2022, the City Council adopted Ordinance No. 2022-341 (the “Ordinance”) which authorizes the levy of a special tax pursuant to the Rate and Method of Apportionment approved at the May 18, 2022, election (the “Rate and Method”), a copy of which is attached hereto as Appendix A.

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 (as defined herein) 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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 21
Menifee Mayor and City Council August 21, 2024 Page 779 of 1068 3 4864-5136-1231v3/200299-0022
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 will covenant 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 2024 BONDS. THE 2024 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 (the “Appraisal Report”) with a date of value of June 17, 2024 (the “Date of Value”), 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 379 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 $190,946,942 as of 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. 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 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 2024 Bonds
The 2024 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 2024 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 2024 Bonds. In the event that the book-entry only system described herein is no longer used with respect to the 2024 Bonds, the 2024 Bonds will be registered and transferred in accordance with the Indenture.

See Appendix H — “BOOK-ENTRY ONLY SYSTEM.”
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 22
Menifee Mayor and City Council August 21, 2024 Page 780 of 1068 4 4864-5136-1231v3/200299-0022
Principal of, premium, if any, and interest on the 2024 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 H — “BOOK-ENTRY ONLY SYSTEM.”
The 2024 Bonds are subject to optional redemption, special mandatory redemption and mandatory sinking fund redemption prior to maturity as described herein. See the caption “THE 2024 BONDS — Redemption.” For a more complete description of the 2024 Bonds and the basic documentation pursuant to which they are being sold and delivered, see the caption “THE 2024 BONDS” and Appendix E — “SUMMARY OF THE INDENTURE.”
Tax Exemption
In the opinion of Stradling Yocca Carlson & Rauth LLP, 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 2024 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 2024 Bonds is exempt from State of California personal income tax. See the caption “TAX MATTERS” with respect to tax consequences relating to the 2024 Bonds, including with respect to the alternative minimum tax imposed on certain large corporations.

Set forth in Appendix C is the form of opinion of Bond Counsel expected to be delivered in connection with the issuance of the 2024 Bonds. For a more complete discussion of such opinion and certain tax consequences incident to the ownership of the 2024 Bonds, see the caption “TAX MATTERS.” 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 Bonds.

Certain proceedings in connection with the issuance and delivery of the Bonds are subject to the approval of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel and Disclosure Counsel to the District in connection with the issuance of the 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, Murrieta, California, as Special Tax Consultant (the “Special Tax Consultant”), Urban Futures, Inc., Walnut Creek, California, as Municipal Advisor, and by Kitty Siino & Associates, Tustin, California, as Appraiser.

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 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”).

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 23
Menifee Mayor and City Council August 21, 2024 Page 781 of 1068 5 4864-5136-1231v3/200299-0022
See “CONTINUING DISCLOSURE,” Appendix F — “FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE.”
Parity Bonds for Refunding Purposes Only
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 for Refunding Purposes Only.” 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 2024 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 2024 Bonds. The purchase of the 2024 Bonds involves risks, and the 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 2024 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 2024 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 2024 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: Chief Financial Officer.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 24
Menifee Mayor and City Council August 21, 2024 Page 782 of 1068 6 4864-5136-1231v3/200299-0022

FINANCING PLAN
Estimated Sources and Uses of Funds
The following table sets forth the expected sources and uses of 2024 Bond proceeds.

Sources of Funds
Principal Amount of Bonds $
Plus Original Issue Premium
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 2024 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 2024 Bonds.

THE 2024 BONDS
General Provisions
The 2024 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 March 1, 2025 (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 2024 Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof.

Interest on any 2024 Bond will be payable from the Interest Payment Date next preceding the date of authentication of such 2024 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 2024 Bond, in which event interest will be payable from the dated date of such 2024 Bond, as applicable; provided, however, that if at the time of authentication of such 2024 Bond, interest is in default, interest on such 2024 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 2024 Bond, interest on such 2024 Bond will be payable from its dated date.

Interest on any 2024 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 2024 Bonds at the principal corporate trust office of the Trustee in Costa Mesa, California.

The 2024 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 2024 Bonds. Ownership interests in the 2024 Bonds may be purchased in book-entry form only in denominations of $5,000 and any integral multiple Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 25
Menifee Mayor and City Council August 21, 2024 Page 783 of 1068 7 4864-5136-1231v3/200299-0022
thereof. So long as DTC is the securities depository all payments of principal and interest on the 2024 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 2024 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 2024 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. [Remainder of Page Intentionally Left Blank]
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 26
Menifee Mayor and City Council August 21, 2024 Page 784 of 1068 8 4864-5136-1231v3/200299-0022
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
2023 Bonds
Debt Service
2024 Bonds
Principal
2024 Bonds
Interest
Total 2024
Bonds Debt
Service
Total Aggregate
Debt Service
2025 $605,250.00
2026 618,750.00
2027 631,500.00
2028 643,500.00
2029 654,750.00
2030 670,250.00
2031 684,750.00
2032 698,250.00
2033 710,750.00
2034 727,250.00
2035 737,500.00
2036 756,750.00
2037 769,500.00
2038 786,000.00
2039 801,000.00
2040 819,500.00
2041 831,250.00
2042 851,500.00
2043 864,750.00
2044 886,250.00
2045 900,500.00
2046 922,750.00
2047 937,500.00
2048 960,000.00
2049 974,750.00
2050 997,000.00
2051 1,016,250.00
2052 1,037,500.00
2053 1,060,500.00
2054 --
Total $23,555,750.00
Redemption
Optional Redemption. The 2024 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:

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 27
Menifee Mayor and City Council August 21, 2024 Page 785 of 1068 9 4864-5136-1231v3/200299-0022
Redemption Date Redemption Price
103%
102
101
100
In the event that the District elects to redeem 2024 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 2024 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 2024 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 2024 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
$
*
The 2024 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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 28
Menifee Mayor and City Council August 21, 2024 Page 786 of 1068 10 4864-5136-1231v3/200299-0022
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.

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 2024 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, 2025, 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
103%
102
101
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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 29
Menifee Mayor and City Council August 21, 2024 Page 787 of 1068 11 4864-5136-1231v3/200299-0022
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 2024 Bonds from Prepayments or Community Facilities District Bond Proceeds” for a discussion of the potential for a lower than expected yield on the 2024 Bonds as a result of a special mandatory redemption from prepayment of Special Taxes or proceeds of bonds of other community facilities districts.

Notice of Redemption. So long as the 2024 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 2024 Bonds under the DTC bookentry 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 2024 Bonds. Such notice of redemption will: (i) specify the CUSIP numbers (if any), the 2024 Bond numbers and the maturity date or dates of the 2024 Bonds selected for redemption, except that where all of the 2024 Bonds are subject to redemption, or all of the 2024 Bonds of one maturity are to be redeemed, the 2024 Bond numbers of such issue need not be specified; (ii) state the date fixed for redemption and surrender of the 2024 Bonds to be redeemed; (iii) state the redemption price; (iv) state the place or places where the 2024 Bonds are to be redeemed; (v) in the case of 2024 Bonds to be redeemed only in part, state the portion of such 2024 Bond which is to be redeemed; (vi) state the date of issue of the 2024 Bonds as originally issued; (vii) state the rate of interest borne by each 2024 Bond being redeemed; and (viii) state any other descriptive information needed to identify accurately the 2024 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 2024 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 2024 Bonds; provided, however, so long as the 2024 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 2024 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 2024 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 2024 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 2024 Bonds.

Upon the payment of the redemption price of any 2024 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 2024 Bonds being redeemed with the proceeds of such check or other transfer.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 30
Menifee Mayor and City Council August 21, 2024 Page 788 of 1068 12 4864-5136-1231v3/200299-0022
With respect to any notice of optional redemption of 2024 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 2024 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 2024 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 2024 Bonds, (iii) the redemption shall not be made, and (iv) the Trustee shall within a reasonable 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 2024 Bonds for Redemption. If less than all of the 2024 Bonds Outstanding are to be redeemed, the portion of any 2024 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 2024 Bonds for redemption, the Trustee will treat such 2024 Bonds, as applicable, as representing that number of 2024 Bonds of $5,000 denominations which is obtained by dividing the principal amount of such 2024 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 2024 Bonds, or portions thereof, selected for redemption.

Partial Redemption of 2024 Bonds. Upon surrender of any 2024 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 2024 Bond or 2024 Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the 2024 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 2024 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 2024 Bonds to the contrary notwithstanding; (ii) upon presentation and surrender thereof at the office of the Trustee, the redemption price of such 2024 Bonds will be paid to the Owners thereof; (iii) as of the redemption date the 2024 Bonds, or portions thereof so designated for redemption will be deemed to be no longer Outstanding and such 2024 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 2024 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 2024 Bonds.

The ownership of the 2024 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 2024 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 2024 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. 2024 Bonds may be exchanged at the office of the Trustee for a like aggregate principal amount of 2024 Bonds for other authorized denominations of the same maturity and issue. The Trustee may not collect from the Owner any charge for any new 2024 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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 31
Menifee Mayor and City Council August 21, 2024 Page 789 of 1068 13 4864-5136-1231v3/200299-0022
to such exchange or transfer. Whenever any 2024 Bonds are surrendered for registration of transfer or exchange, the District will execute and the Trustee will authenticate and deliver a new 2024 Bond or 2024 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) 2024 Bonds for a period of 15 days next preceding any selection of the 2024 Bonds to be redeemed; or (ii) any 2024 Bonds chosen for redemption.

SOURCES OF PAYMENT FOR THE BONDS
Limited Obligations
The 2024 Bonds are special, limited obligations of the District payable only from amounts pledged under the Indenture and from no other sources. The 2024 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 2023 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

OF RIVERSIDE, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE 2024 BONDS. EXCEPT FOR THE NET TAXES, NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE 2024 BONDS. THE 2024 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.

Special Taxes
Authorization and Pledge. In accordance with the provisions of the Act, the City established the District on May 18, 2022, for the purpose of financing various public improvements required in connection with the proposed development within the District. At a special election held on May 18, 2022, the qualified elector within the District authorized the District to incur indebtedness in an amount not to exceed $27,000,000 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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 32
Menifee Mayor and City Council August 21, 2024 Page 790 of 1068 14 4864-5136-1231v3/200299-0022
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, 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 (provided that the same amount was not previously levied), (v) an amount up to any anticipated shortfall due to Special Tax delinquencies, (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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 33
Menifee Mayor and City Council August 21, 2024 Page 791 of 1068 15 4864-5136-1231v3/200299-0022
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 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.

Notwithstanding the foregoing, all Taxable Property is currently classified as either Developed Property or Approved Property and there is no Undeveloped Property within the District. There are certain parcels which are expected to remain as open space when development in the District is complete. Such parcels are Exempt Property but may be classified as Provisional Undeveloped Property in the future, if necessary, in accordance with the Rate and Method.

For Fiscal Year 2024-25, the Assigned Special Tax for Developed Property within the District that is classified as Single Family Residential Property will range from $2,893.35 per taxable unit with a Building Square Footage of less than 1,900 square feet to $4,038.83 per taxable unit with a Building Square Footage of greater than 3,900 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.

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 the Rate and Method. For Fiscal Year 2024-25, the Maximum Special Tax on Approved Property not classified as Single Family Residential Property is $15,946.21 per acre. For Fiscal Year 2024-25, the Maximum Special Tax for each Assessor’s Parcel of Provisional Undeveloped Property is $15,946.21 per acre.

Table 1 below sets forth the Assigned Special Tax for Developed Property, the Maximum Special Tax for Approved Property, the projected Fiscal Year 2024-25 Special Tax levy and the percent of such levy based on land use type.

Based on building permits issued through and including June 17, 2024, 353 parcels within the District will be classified as Developed Property and 26 parcels will be classified as Approved Property for the Fiscal Year 2024-25 Special Tax levy. Annual Debt Service on the 2024 Bonds has been sized based on the expected Special Tax revenues to be received in each Fiscal Year from all 379 parcels to be developed in the District, assuming that the Special Taxes are levied at 100% of the Assigned Special Tax. Assuming no delinquencies, the Special Tax levy on 379 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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 34
Menifee Mayor and City Council August 21, 2024 Page 792 of 1068 16 4864-5136-1231v3/200299-0022
TABLE 1

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH) ASSIGNED SPECIAL TAX RATES FOR FISCAL YEAR 2024-25
Land Use Type
Residential Floor
Area (sq. ft.)
Maximum/
Assigned Special
Tax Rates
Fiscal Year
2024-25(1)
Special Tax
Levy Rates
Fiscal Year
2024-25
Percent of
Maximum/
Assigned
Rate No. of Units
Aggregate
Estimated
Special Taxes
Fiscal Year
2024-25 (2)
Percent of
Total
Residential Property <1,900 sq ft $2,893.35 $2,893.35 100.0% 26 $ 75,227.16 6.5% Residential Property 1,900 - 2,100 sq ft 3,001.55 3,001.55 100.0 53 159,082.36 13.6 Residential Property 2,101 - 2,300 sq ft 3,041.09 3,041.09 100.0 50 152,054.46 13.0 Residential Property 2,301 - 2,500 sq ft 3,118.08 3,118.08 100.0 51 159,022.02 13.6 Residential Property 2,501 - 2,700 sq ft 3,311.59 3,311.59 100.0 56 185,449.22 15.9 Residential Property 2,701 - 2,900 sq ft 3,341.76 3,341.76 100.0 86 287,391.77 24.6 Residential Property 2,901 - 3,100 sq ft 3,429.16 0.00 0.0 0 0.00 0.0 Residential Property 3,101 - 3,300 sq ft 3,516.55 0.00 0.0 0 0.00 0.0 Residential Property 3,301 - 3,500 sq ft 3,690.30 0.00 0.0 0 0.00 0.0 Residential Property 3,501 - 3,700 sq ft 3,777.69 0.00 0.0 0 0.00 0.0 Residential Property 3,701 - 3,900 sq ft 3,864.05 0.00 0.0 0 0.00 0.0 Residential Property > 3,900 sq ft 4,038.83 4,038.83 100.0 31 125,203.82 10.7 Approved Property - TR 28786 N/A 4,037.49 1,021.71 25.3 9 9,195.35 0.8 Approved Property - TR 28792 N/A 3,161.10 799.93 25.3 17 13,598.83 1.2 Multifamily Property N/A 15,946.21 0.00 0.0 0 0.00 0.0
Non-Residential Property N/A 15,946.21 0.00 0.0 0 0.00 0.0 Total 379 $1,166,225.00 100.0%
(1) Reflects the Assigned Special Tax rate for Developed Property and the Maximum Special Tax for Approved Property, Multifamily Property and Non-Residential Property. (2) Includes the Fiscal Year 2024-25 Administrative Expenses Cap of $30,600. The Administrative Expenses Cap escalates at 2% per Fiscal Year.

Source: Spicer Consulting Group, LLC.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 35
Menifee Mayor and City Council August 21, 2024 Page 793 of 1068 17 4864-5136-1231v3/200299-0022
Backup Special Tax Rates. The Backup Special Tax for an Assessor’s Parcel within a Final Map classified as Single Family Residential Property or Approved Property expected to be classified as Single Family Residential 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.

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 $15,946.21 per acre for Fiscal Year 2024-25.

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 $15,946.21 per acre for Fiscal Year 2024-25. 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 2024 BONDS — Redemption — Special Mandatory Redemption from Special Tax Prepayments.” Estimated Debt Service Coverage. In connection with the issuance of the 2024 Bonds, the Special Tax Consultant will certify that the Maximum Special Tax that may be levied in each Fiscal Year on Assessor’s Parcels classified as Taxable Property within the District 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.

In Fiscal Year 2023-24, the District levied Special Taxes on 216 parcels of Developed Property in the amount of $686,902. Annual Debt Service on the 2023 Bonds for the Bond Year ending September 1, 2025, is $605,250.00 and the Administrative Expenses Cap for Fiscal Year 2024-25 is $30,600. The 2024 Bonds have been sized such that the Special Tax levy for Fiscal Year 2024-25 will be at least 110% of Annual Debt Service for the 2023 Bonds and the 2024 Bonds for the Bond Year ending September 1, 2025.

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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 36
Menifee Mayor and City Council August 21, 2024 Page 794 of 1068 18 4864-5136-1231v3/200299-0022
The District will covenant 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 will covenant 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.

Second, the District will covenant 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 will covenant 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 will covenant 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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 37
Menifee Mayor and City Council August 21, 2024 Page 795 of 1068 19 4864-5136-1231v3/200299-0022
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 will covenant 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.

The District will covenant 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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 38
Menifee Mayor and City Council August 21, 2024 Page 796 of 1068 20 4864-5136-1231v3/200299-0022
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, commencing September 1, 2025, 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 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. Pursuant to the Indenture, the “Reserve Requirement” is 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.

The Indenture provides that the Reserve Requirement shall not exceed $_______, which was the Reserve Requirement as of the date of issuance of the 2023 Bonds, except in connection with the issuance of Parity Bonds. The 2024 Bonds are being issued as Parity Bonds and the Reserve Requirement will be increased above $___________ in connection with the issuance of the 2024 Bonds.

There is currently $_________ on deposit in the Reserve Account. Upon the issuance of the 2024 Bonds, the Reserve Requirement will be $__________. On the date of issuance of the 2024 Bonds, the District will deposit $_________ from proceeds of the 2024 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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 39
Menifee Mayor and City Council August 21, 2024 Page 797 of 1068 21 4864-5136-1231v3/200299-0022
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.

Parity Bonds
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 80 taxable acres, and is located south of La Piedra Road, on both the east and west sides of Evans Road in the City. The property within the District is being developed by Lennar Homes in a project marketed as “Quartz Ranch.”
The property within the District is planned for 379 single-family detached homes. As of June 17, 2024, Lennar Homes had completed and conveyed 278 homes within the District to individual homeowners. As of such date, Lennar Homes owned five model homes, 70 homes under construction (48 of which were in escrow), and 26 finished lots (none of which were in escrow). Lennar Homes currently expects to complete and convey all homes planned within the District to individual homeowners by the end of 2025.

The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District has been completed. Lennar Homes expects to complete the remaining in-tract infrastructure within the District, which consists of landscaping, certain interior streets, and wet and dry utilities, as construction of the related homes occurs.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 40
Menifee Mayor and City Council August 21, 2024 Page 798 of 1068 22 4864-5136-1231v3/200299-0022
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 The Gas Company. Public education instruction is provided by Menifee Union 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.”
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, the costs of certain water and sewer system improvements to be owned and operated by the Eastern Municipal Water District and the costs of school facilities to be owned and operated by the Menifee Union 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 2023-24 is approximately $93,920,685, 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.

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 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 June 17, 2024, the market value of the Taxable Property within the District was $190,946,942. 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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 41
Menifee Mayor and City Council August 21, 2024 Page 799 of 1068 23 4864-5136-1231v3/200299-0022
for remaining development costs, marketing and carrying costs and a discount rate through the estimated absorption period for such models and production units. Lots with homes less than 95% complete were valued as finished lots.

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” and Appendix D — “APPRAISAL REPORT.”
Estimated Appraised Value-to-Lien Ratios
The aggregate appraised value of property within the District is $190,946,942. Dividing the aggregate estimate of value by the principal amount of the Bonds results in a value-to-lien ratio of 9.12-to-1* for the District. Including overlapping indebtedness, the estimated value-to-lien ratio based on the appraised value is

8.58-to-1*. See Table 4 below and “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.” The assessed value of the property within the District is $93,920,685 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 principal amount of the Bonds debt results in an estimated assessed value-to-lien ratio of 4.86-to-1* for the District.

Based on ownership status as of June 17, 2024, and assuming no further development activity and transfer of ownership, individual homeowners and Lennar Homes would be responsible for approximately

77.15% and 22.85%, respectively, of the projected Fiscal Year 2024-25 Special Tax levy.

Table 2 below sets forth the appraised value-to-lien ratio of the Taxable Property within the District based on ownership status as of June 17, 2024, the appraised values set forth in the Appraisal Report, the principal amount of the Bonds and overlapping debt. Table 3 below sets forth the estimated appraised value-tolien ratios for Taxable Property within the District by various ranges based upon the principal amount of the Bonds and overlapping debt.

Annual Debt Service on the 2024 Bonds has been sized based on the expected Special Tax revenues to be received in each Fiscal Year from all 379 parcels to be developed in the District, assuming that the Special Taxes are levied at 100% of the Assigned Special Tax. Assuming no delinquencies, the Special Tax levy on 379 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.
[Remainder of Page Intentionally Left Blank]
*
Preliminary, subject to change.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 42
Menifee Mayor and City Council August 21, 2024 Page 800 of 1068 24 4864-5136-1231v3/200299-0022
TABLE 2

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

ESTIMATED APPRAISED VALUE-TO-LIEN RATIOS
Property Owner(1)
No. of
Parcels
Appraised
Property
Value(2)
% of
Appraised
Value
Fiscal Year
24-25
Maximum
Tax
Fiscal Year
2024-25
Percentage
of Maximum
Tax
Projected
Fiscal Year
2024-25
Levy (3)
% of
Estimated
Fiscal Year
2024-25
Levy
CFD 2022-1
2024
Bonds (4)*
CFD 2022-1
2023 Bonds(4)
All other
Overlapping
Debt
Issued(5)
Appraised
Value-toLien
Ratio*
Developed Property
Developed Individually Owned 278 $ 164,598,620 86.20% $ 947,830 72.91% $ 899,698 77.15% $7,301,889 $ 8,852,528 $1,011,198 9.59:1 Developed - Lennar Homes Owned 75 21,005,527 11.00 262,166 20.17 243,732 20.90 1,978,115 2,398,190 273,938 4.52:1 Total Developed 353 $ 185,604,147 97.20% $1,209,996 93.07% $1,143,431 98.05% $9,280,004 $ 11,250,718 $1,285,136 8.51:1 Approved Property
Approved - Lennar Homes Owned 26 $ 5,342,795 2.80% $ 90,076 6.93% $ 22,794 1.95% $ 184,996 $ 224,282 $ 25,619 12.29:1 Total Approved 26 $ 5,342,795 2.80% $ 90,076 6.93% $ 22,794 1.95% $ 184,996 $ 224,282 $ 25,619 12.29:1 Total 379 $ 190,946,942 100.00% $1,300,072 100.00% $1,166,225 100.00% $9,465,000 $ 11,475,000 $1,310,755 8.58:1 * Preliminary, subject to change.
(1) Property ownership status as of June 17, 2024.
(2) Based on the appraised value set forth in the Appraisal Report as of June 17, 2024, the Date of Value. (3) Based on 100% of the Assigned Special Tax rate on Developed Property and 25.3% of the Maximum Special Tax on Approved Property. Estimated Fiscal Year 2024-25 Special Tax Levy based upon development status as of June 17, 2024, and an Administrative Expense Cap for Fiscal Year 2024-25 of $30,600. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Rate and Method of Apportionment of Special Tax.” (4) Allocated based on estimated Fiscal Year 2024-25 Special Tax levy. (5) Includes overlapping debt set forth in Table 4 below.

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 43
Menifee Mayor and City Council August 21, 2024 Page 801 of 1068 25 4864-5136-1231v3/200299-0022
TABLE 3

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH) VALUE-TO-LIEN STRATIFICATION FOR TAXABLE PROPERTY*
Value-to-Lien Category
No. of
Parcels
% of
Parcels
Appraised
Value (1)
% of
Appraised
Value
CFD 2022-1
Projected
Fiscal Year
2024-25
Levy
Percent
Share of
Projected
Fiscal Year
2024-25
Levy
CFD 2022-1
Proposed
2024 Bonds (2)
Percent
Share of
Proposed
2024 Bonds
CFD 2022-1
2023 Bonds
All Other
Overlapping
Debt(3)
Aggregate
Value-toLien
Less than 3.00:1(4) 5 1.32% $ 1,027,461 0.54% $ 20,194 1.73% $ 163,894 1.73% $ 198,699 $ 22,697 2.67:1 Between 3.00:1 to 6.00:1 46 12.14 9,452,637 4.95 143,858 12.34 1,167,543 12.34 1,415,484 161,687 3.44:1 Between 6.01:1 to 9.00:1 24 6.33 10,525,429 5.51 79,680 6.83 646,678 6.83 784,007 89,555 6.92:1 Between 9.01:1 to 12.00:1 287 75.73 166,448,049 87.17 908,894 77.93 7,376,518 77.93 8,943,005 1,021,533 9.60:1 Greater than 12.00:1(4) 17 4.49 3,493,366 1.83 13,599 1.17 110,367 1.17 133,805 15,284 13.46:1 Totals 379 100.00% $190,946,942 100.00% $1,166,225 100.00% $9,465,000 100.00% $11,475,000 $1,310,755 8.58:1 * Preliminary, subject to change.
(1) Based on the appraised value set forth in the Appraisal Report as of June 17, 2024, the Date of Value. (2) Allocated based on the estimated Fiscal Year 2024-25 Special Tax levy and reflects an Administrative Expense Cap for Fiscal Year 2024-25 of $30,600. (3) Includes overlapping debt set forth in Table 4 below. (4) The minimum value to lien in the less than 3.00:1 category is 2.67:1* . The maximum value to lien in the greater than 12.00:1 category is 13.46:1*.

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 44
Menifee Mayor and City Council August 21, 2024 Page 802 of 1068 26 4864-5136-1231v3/200299-0022
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 on such property within the District. [Remainder of Page Intentionally Left Blank]
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 45
Menifee Mayor and City Council August 21, 2024 Page 803 of 1068 27 4864-5136-1231v3/200299-0022
TABLE 4

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

DIRECT AND OVERLAPPING DEBT
AS OF JUNE 17, 2024
I. Appraisal Value (1) $190,946,942
II. Land Secured Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable
Parcels in
CFD No.
2022-1 (3)
Amount
Applicable
City of Menifee CFD No. 2022-1, Series 2024 CFD $ 9,465,000 $ 9,465,000 100.000% 379 $ 9,465,000* City of Menifee CFD No. 2022-1, Series 2023 CFD 11,525,000 11,475,000 100.000 379 11,475,000 Total Land Secured Bonded Debt $ 20,940,000*
Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable
Parcels in
CFD No.
2022-1 (3)
Amount
Applicable
City of Menifee CFD No. 2022-1(2) CFD $27,000,000 $ 6,010,000 100.000% 379 $ 6,010,000* Total Unissued Land Secured Indebtedness $ 6,010,000*
TOTAL OUTSTANDING AND UNISSUED LAND SECURED INDEBTEDNESS $ 26,950,000* III. General Obligation Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable(2)
Parcels in
CFD No.
2022-1 (3)
Amount
Applicable
Metropolitan Water Debt Service GO $850,000,000 $ 19,215,000 0.051% 379 $ 9,845 Mt. San Jacinto Jr. College Debt Service GO 295,000,000 242,210,000 0.046 379 110,563 Menifee Union School Debt Service GO 180,955,495 152,811,292 0.355 379 541,724 Perris Union High School Debt Service GO 363,415,283 292,042,190 0.222 379 648,623 Total Outstanding General Obligation Bonded Debt (2) $ 1,310,755 Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable(2)
Parcels in
CFD No.
2022-1 (3)
Amount
Applicable
Metropolitan Water Debt Service GO $850,000,000 $ 0 0.051% 379 $ 0 Mt. San Jacinto Jr. College Debt Service GO 295,000,000 0 0.046 379 0 Menifee Union High School Debt Service GO 180,960,000 4,506 0.355 379 16 Perris Union High School Debt Service GO 363,420,000 4,717 0.222 379 10 Total Unissued General Obligation Indebtedness (2) $ 26 TOTAL OUTSTANDING AND UNISSUED GENERAL OBLIGATION INDEBTEDNESS $ 1,310,781 TOTAL OF ALL OUTSTANDING DIRECT AND OVERLAPPING BONDED DEBT $ 22,250,755* TOTAL OF ALL OUTSTANDING DIRECT AND UNISSUED DIRECT OVERLAPPING INDEBTEDNESS $ 28,260,781* IV. Ratios to Appraisal Value
Outstanding Land Secured Bonded Debt .............9.12:1* Total Outstanding Bonded Debt...........................8.58:1* * Preliminary, subject to change.
(1) Based on the Appraisal Report as of June 17, 2024, Date of Value. (2) Parity Bonds may be issued for refunding purposes only. (3) All parcels have subdivided into 379 individual parcels. Based on development status as of June 17, 2024, 353 parcels will be classified as Developed Property under the Rate and Method for Fiscal Year 2024-25.

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

Table 5 below describes the estimated Fiscal Year 2024-25 effective tax burden for the 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 2024-25 Special Tax levy and Fiscal Year 2023-24 actual levies for all other overlapping taxing jurisdictions. Based on the foregoing, the projected debt service on the Bonds and the Administrative Expenses Cap of $30,600 (which amount shall escalate at 2% per Fiscal Year), in Fiscal Year 2024-25, the estimated effective tax rate on Developed Property in the District is estimated to range from approximately 1.83% to 1.90%.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 46
Menifee Mayor and City Council August 21, 2024 Page 804 of 1068 28 4864-5136-1231v3/200299-0022
TABLE 5

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH) ESTIMATED FISCAL YEAR 2024-25 TAX OBLIGATION

FOR A SAMPLE OF DEVELOPED PROPERTY
Plan Name Meadow Walk Ridgeline Canyon View
Plan Type 1 2 3 4 5 1 2 3 (NG) 4 1 2 3 4 (NG)
CFD Tax Category Less than 1,900 to 2,101 to 2,301 to 2,501 to 1,900 to 2,101 to 2,301 to 2,701 to 2,501 to 2,701 to 2,701 to Greater than 1,900 S.F. 2,100 S.F. 2,300 S.F. 2,500 S.F. 2,700 S.F. 2,100 S.F. 2,300 S.F. 2,500 S.F. 2,900 S.F. 2,700 S.F. 2,900 S.F. 2,900 S.F. 3,900 S.F.

Home Size 1,823 1,950 2,203 2,419 2,590 1,950 2,287 2,434 2,767 2,649 2,767 2,809 4,134 Appraisal Value (1) $510,440 $536,250 $561,765 $568,465 $582,750 $536,250 $571,750 $584,160 $608,740 $609,270 $622,575 $617,980 $744,120 Ad Valorem Property Taxes:

General Purpose $ 5,104 $ 5,363 $ 5,618 $ 5,685 $ 5,828 $ 5,363 $ 5,718 $ 5,842 $ 6,087 $ 6,093 $ 6,226 $ 6,180 $ 7,441 Metro Water West (0.00350%) 18 19 20 20 20 19 20 20 21 21 22 22 26 Mt. San Jacinto Jr College (0.01320%) 67 71 74 75 77 71 75 77 80 80 82 82 98 Menifee Union High School (0.06063%) 309 325 341 345 353 325 347 354 369 369 377 375 451 Perris Union High School (0.08173%) 417 438 459 465 476 438 467 477 498 498 509 505 608 EMWD Imp U-35 (0.00860%) 44 46 48 49 50 46 49 50 52 52 54 53 64 EMWD Imp U-36 (0.00860%) 44 46 48 49 50 46 49 50 52 52 54 53 64 Total General Property Taxes $ 6,004 $ 6,308 $ 6,608 $ 6,687 $ 6,855 $ 6,308 $ 6,725 $ 6,871 $ 7,160 $ 7,167 $ 7,323 $ 7,269 $ 8,753 Assessment, Special Taxes & Parcel Charges:

Flood Control Stormwater / Cleanwater / Santa Ana $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 MWD Standby East charge 7 7 7 7 7 7 7 7 7 7 7 7 7
EMWD Infrastructure Availability Charge 21 21 21 21 21 21 21 21 21 21 21 21 21 City of Menifee CFD 2015-2, Zone 29 Maintenance Services 795 795 795 795 795 795 795 795 795 795 795 795 795 City of Menifee CFD 2022-1 (Quartz Ranch)(2) 2,893 3,002 3,041 3,118 3,312 3,002 3,041 3,118 3,342 3,312 3,342 3,342 4,039 Total Assessments & Special Taxes $ 3,720 $ 3,828 $ 3,867 $ 3,944 $ 4,138 $ 3,828 $ 3,867 $ 3,944 $ 4,168 $ 4,138 $ 4,168 $ 4,168 $ 4,865 Projected Total Property Tax $ 9,724 $10,136 $10,475 $10,631 $10,993 $10,136 $10,593 $10,816 $11,328 $11,304 $11,491 $11,437 $13,618 Projected Effective Tax Rate 1.90% 1.89% 1.86% 1.87% 1.89% 1.89% 1.85% 1.85% 1.86% 1.86% 1.85% 1.85% 1.83% (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 Fiscal Year 2024-25 Special Tax levy on Developed Property at the Assigned Special Tax rates.

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 47
Menifee Mayor and City Council August 21, 2024 Page 805 of 1068 29 4864-5136-1231v3/200299-0022
Delinquency History
Unpaid amounts of the Special Taxes become delinquent after December 10 and April 10 of each Fiscal Year. Fiscal Year 2022-23, which was the first fiscal year in which Special Taxes were levied. Table 6 below summarizes the Special Tax delinquencies within the District for the Fiscal Years 2022-23 levy and 2023-24, as of June 30, 2024.

TABLE 6

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATE
Delinquencies as of June 30, 2024
Fiscal
Year
Amount
Levied
Parcels
Levied
Parcels
Delinquent
Amount
Delinquent
Percent
Delinquent
2022-23 $ 5,000 5 0 $ 0 0.00%
2023-24 686,902 216 3 5,760 0.84
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

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.” Planned Development Within the District
The District contains approximately 80 taxable acres, and is located south of La Piedra Road, on both the east and west sides of Evans Road in the City. The property within the District is being developed by Lennar Homes in a project marketed by Lennar Homes as “Quartz Ranch.” The property within the District is planned for 379 single-family detached homes. As of June 17, 2024, Lennar Homes had completed and conveyed 278 homes within the District to individual homeowners. As of such date, Lennar Homes owned five model homes, 70 homes under construction (48 of which were in escrow), and 26 finished lots (none of which were in escrow). Home sizes within the District range from approximately Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 48
Menifee Mayor and City Council August 21, 2024 Page 806 of 1068 30 4864-5136-1231v3/200299-0022
1,823 to 4,134 square feet. Actual sales prices for the closed homes have ranged from approximately $459,428 to $853,485. Current base sales prices range from approximately $592,615 to $910,760. Lennar Homes currently expects to complete and convey all homes planned within the District to individual homeowners by the end of 2025.

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 base 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” refers to Lennar Homes of California, LLC, a California limited liability company. Lennar Homes 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.

Copies of Lennar Corporation’s Annual Report and related financial statements, prepared in accordance with generally accepted accounting standards, are available from Lennar Corporation’s website at www.lennar.com.

The foregoing website addresses and references to filings with the SEC are given for reference and convenience only, and the information on such websites and on file with the SEC does not form a part of this Official Statement and is not incorporated by reference herein. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on such websites. Lennar Corporation and Lennar Homes are not obligated to advance funds for construction or development or to pay ad valorem property taxes or the Special Taxes and investors should not rely on the information and financial statements contained on such websites in evaluating whether to buy, hold or sell the Bonds.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 49
Menifee Mayor and City Council August 21, 2024 Page 807 of 1068 31 4864-5136-1231v3/200299-0022
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. As of July 1, 2024, Lennar Homes has expended approximately $175.2 million on land acquisition and development and homebuilding costs in the District. Lennar Homes expects to incur approximately $4.5 million on remaining in-tract development costs and approximately $13.5 million on remaining homebuilding, marketing, and sales 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.

If and to the extent that internal funding, including but not limited to home sales revenues, are inadequate to pay the costs to complete the planned development by Lennar Homes within the District and other financing is not put into place, there could be a shortfall in the funds required to complete the planned development by Lennar Homes in the District.

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

See “SPECIAL RISK FACTORS – Concentration of Property Ownership.”

SPECIAL RISK FACTORS
The 2024 Bonds have not been rated by any rating agency, and the purchase of the 2024 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 2024 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 2024 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 2024 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 2024 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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 50
Menifee Mayor and City Council August 21, 2024 Page 808 of 1068 32 4864-5136-1231v3/200299-0022
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.

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 2024 Bonds due to nonpayment of the amounts levied.

In order to pay debt service on the 2024 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 2024 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 2024 Bonds when due and a default would 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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 51
Menifee Mayor and City Council August 21, 2024 Page 809 of 1068 33 4864-5136-1231v3/200299-0022
In the event that sales or foreclosures of property are necessary, there could be a delay in payments to Owners of the 2024 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 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.)
Impact of Economic Conditions on the Development in the District Certain events and factors which negatively affect the regional, State and national economies could have an adverse effect on the pace at which the current or any future developers in the District can complete the remaining infrastructure and future homes, and demand by, and the ability of individuals to purchase homes within the District. Such events and factors could include rising inflation and interest rates, persistent supply chain issues and global market instability caused by geopolitical events. Any adverse impact of the foregoing and other economic factors on the projects in the District and the real estate market in general cannot be predicted.

Increasing Mortgage Interest Rates
Since approximately November 2021, interest rates for mortgage loans have increased significantly.

Increases in mortgage interest rates could have a negative impact on the estimated absorption rates of the planned for-sale residential units in the District described herein. With respect to entry-level households, increased mortgage interest rates may adversely impact the affordability of homes and may increase mortgage payment levels for owning a lower-priced home relative to renting a residence, thereby making purchasing less attractive.

With respect to move-up households, higher mortgage interest rates may impact the desire of current homeowners to move from their present home due to the fact that their present home likely has a relatively low mortgage interest rate. In addition, in such instances, a new home would likely have a higher interest rate on a new mortgage loan as well as a higher purchase price and property taxes. Such considerations may decrease the desire for move-up households to purchase a new home. The foregoing factors could reduce demand for and/or the ability to achieve the sales prices of the remaining for-sale homes within the District as described herein.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 52
Menifee Mayor and City Council August 21, 2024 Page 810 of 1068 34 4864-5136-1231v3/200299-0022
Property Values
The value of the property within the District is a critical factor in determining the investment quality of the 2024 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 $190,946,942. 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 2024 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.

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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 53
Menifee Mayor and City Council August 21, 2024 Page 811 of 1068 35 4864-5136-1231v3/200299-0022
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 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 2024 Bonds. The various legal opinions to be delivered in connection with the issuance of the 2024 Bonds, including Bond Counsel’s approving legal opinion, are qualified as to the enforceability of the 2024 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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 54
Menifee Mayor and City Council August 21, 2024 Page 812 of 1068 36 4864-5136-1231v3/200299-0022
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 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 Item Title: 12.1
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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.

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 2024 Bonds do not contain a provision allowing for the acceleration of the 2024 Bonds in the event of a payment default or other default under the terms of the 2024 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.

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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 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 2024 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 Item Title: 12.1
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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 XIII A, Section 4 thereof and Article XIIIC, Section 2 thereof require that the electors in such an election be the registered voters within the district.

Horizon. The Sacramento County Superior Court issued a ruling in Horizon Capital Investments, LLC v. City of Sacramento et al. (Case No. 34-2017-80002661), which was a case involving 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.

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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 May 18, 2022. 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 2024 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 2024 Bonds could cease to be excluded from gross income for purposes of federal income taxation, retroactive to the date the 2024 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 2024 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 2024 Bonds.

No Ratings – Limited Secondary Market
The District has not applied to have the 2024 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 2024 Bonds or, if a secondary market exists, that such 2024 Bonds can be sold for any particular price. Although the District has committed to provide certain financial and operating information on an annual basis, there can be no assurance that such information will be available to 2024 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 2024 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 2024 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 2024 Bonds.

Bond Counsel has limited its opinion as to the enforceability of the 2024 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 Item Title: 12.1
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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 2024 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 2024 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 2024 Bonds that were purchased at a price greater than par could reduce the otherwise expected yield on such Bonds. See the caption “THE 2024 BONDS — Redemption — Special Mandatory Redemption from Special Tax Prepayments.”
Cybersecurity
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its 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 2024 Bonds. The City is also reliant on other entities and service providers in connection with the administration of the 2024 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 2024 Bonds.

CONTINUING DISCLOSURE
Pursuant to a Continuing Disclosure Certificate, dated as of September 1, 2024 (the “Disclosure Certificate”), to be executed and delivered by the District at the time of issuance of the 2024 Bonds, the District will covenant for the benefit of the holders and Beneficial Owners of the 2024 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, 2024, and to provide notices of the occurrence of certain enumerated events. 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 City has retained Spicer Consulting Group, LLC to serve as Dissemination Agent for the continuing disclosure undertaking related to the 2024 Bonds, and has adopted policies and procedures with respect to its continuing disclosure practices.

TAX MATTERS
In the opinion of Stradling Yocca Carlson & Rauth LLP, 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 (and original issue discount) on the 2024 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, 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 Item Title: 12.1
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$1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) with respect to the 2024 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 (and original issue discount) on the 2024 Bonds is exempt from State of California personal income tax.

The excess of the stated redemption price at maturity of a 2024 Bond over the issue price of a 2024 Bond (the first price at which a substantial amount of the 2024 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 2024 Bond.

Bond Counsel’s opinion as to the exclusion from gross income of interest (and original issue discount) on the 2024 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 2024 Bonds to assure that interest (and original issue discount) on the 2024 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 2024 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the 2024 Bonds. The District and the City will covenant to comply with all such requirements.

The amount by which a Beneficial Owner’s original basis for determining loss on sale or exchange in the applicable 2024 Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable 2024 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 2024 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 2024 Bond premium may result in a Beneficial Owner realizing a taxable gain when a 2024 Bond is sold by the Beneficial Owner for an amount equal to or less (under certain circumstances) than the original cost of the 2024 Bond to the Beneficial Owner. Purchasers of the 2024 Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable 2024 Bond premium.

The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing of taxexempt bond issues, including both random and targeted audits. It is possible that the 2024 Bonds will be selected for audit by the IRS. It is also possible that the market value of the 2024 Bonds might be affected as a result of such an audit of the 2024 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 2024 Bonds to the extent that it adversely affects the exclusion from gross income of interest (and original issue discount) on the 2024 Bonds or their market value.

SUBSEQUENT TO THE ISSUANCE OF THE 2024 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 2024 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 2024 BONDS. THESE CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE 2024 BONDS. NO ASSURANCE CAN BE GIVEN THAT SUBSEQUENT TO THE ISSUANCE OF THE 2024 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 2024 BONDS, ALL POTENTIAL PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS Item Title: 12.1
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REGARDING POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE 2024 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 2024 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 2024 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 2024 Bonds for federal income tax purposes with respect to any 2024 Bond if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca Carlson & Rauth LLP.

Although Bond Counsel will render an opinion that interest (and original issue discount) on the 2024 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 2024 Bonds and the accrual or receipt of interest (and original issue discount) with respect to the 2024 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 2024 Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the 2024 Bonds.

Should interest on the 2024 Bonds (including any original issue discount) become includable in gross income for federal income tax purposes, the 2024 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 2024 Bonds, in substantially the form set forth as Appendix C hereto, will be made available to purchasers of the 2024 Bonds at the time of original delivery of the 2024 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 LLP, 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 2024 Bonds for the accuracy, completeness or fairness of this Official Statement.

ABSENCE OF LITIGATION
In connection with the issuance of the 2024 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 affect the validity of the 2024 Bonds or the Indenture, or contest the authority of the District to enter into or perform its obligations under the 2024 Bonds or the Indenture, or affects in any manner the right or ability of the District to collect the Special Taxes or pledge the Net Taxes levied within the District for the repayment of the 2024 Bonds.

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 2024 Bonds.

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UNDERWRITING
The 2024 Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”).

The Underwriter has agreed to purchase the 2024 Bonds at a price of $___________ (being the $________ aggregate principal amount of the 2024 Bonds, less an Underwriter’s discount of $________, plus original issue premium of $______). The Bond Purchase Agreement relating to the 2024 Bonds provides that the Underwriter will purchase all of the 2024 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 2024 Bonds.

Under certain circumstances, the Underwriter may offer and sell the 2024 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 2024 Bonds. From time to time, Stradling Yocca Carlson & Rauth LLP, represents the Underwriter on matters unrelated to the 2024 Bonds.

MUNICIPAL ADVISOR
The District has retained Urban Futures, Inc., Walnut Creek, California, as Municipal Advisor for the sale of the 2024 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 2024 Bonds.

The summaries of certain provisions of the 2024 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. 2022-1
(QUARTZ RANCH) OF THE CITY OF MENIFEE
By:

Armando G. Villa
City Manager of the City of Menifee
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 63
Menifee Mayor and City Council August 21, 2024 Page 821 of 1068 A-1
4864-5136-1231v3/200299-0022

APPENDIX A

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
COMMUNITY FACILITIES DISTRICT NO. 2022-1
(QUARTZ RANCH) 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. 2022-1 (Quartz Ranch) (“CFD No. 2022-1”). 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. 2022-1, 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:
“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel as a Single Family Residential Property with a stand-alone Residential Unit. “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. 2022-1: 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. 2022-1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2022-1 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2022-1 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. 2022-1 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. 2022-1 for any other administrative purposes of CFD No. 2022-1, 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 1st 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 1 st preceding the Fiscal Year in which the Special Tax is being levied.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 64
Menifee Mayor and City Council August 21, 2024 Page 822 of 1068 A-2
4864-5136-1231v3/200299-0022
“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 the Special Tax of CFD No. 2022-1 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 the City 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” or “CFD No. 2022-1” means Community Facilities District No. 2022-1 (Quartz Ranch) established by the City under the Act.
“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. “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. 2022-1. “Condominium Plan” means a condominium plan pursuant to California Civil Code, Section 6624. “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 1st preceding the Fiscal Year in which the Special Tax is being levied, (ii) have an 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) for which 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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 65
Menifee Mayor and City Council August 21, 2024 Page 823 of 1068 A-3
4864-5136-1231v3/200299-0022
“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 pursuant to California Civil Code Section 6624 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. 2022-1 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 Assigned 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. An Accessory Dwelling Unit that shares an Assessor’s Parcel with a Single Family Residential Property shall not be considered a Residential Unit for purposes of this RMA.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 66
Menifee Mayor and City Council August 21, 2024 Page 824 of 1068 A-4
4864-5136-1231v3/200299-0022
“RMA” means this Rate and Method of Apportionment of Special Taxes. “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. 2022-1 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 in association with the Bonds (provided that the same amount was not previously levied), (v) an amount up to any anticipated shortfall due to Special Tax delinquencies and (vi) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2022-1 or the payment of debt service 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. 2022-1, 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 2022-2023 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 2022-2023, each Assessor’s Parcel within CFD No. 2022-1 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 Assessor’s Parcel(s) for which one or more Building Permits for Residential Units have been issued and the County has not yet assigned final Assessor’s Parcel Number(s) to such Assessor’s Parcel(s) (in accordance with the Final Map or Condominium Plan), the amount of the Special Tax levy on such Assessor’s Parcel for each Fiscal Year shall be determined as follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax 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 amount shall be levied as Developed Property in accordance with Step 1 of Section E below; and (3) the amount of the Special Tax 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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 67
Menifee Mayor and City Council August 21, 2024 Page 825 of 1068 A-5
4864-5136-1231v3/200299-0022
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 2022-2023 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 2022-2023

LAND USE CATEGORY
TAXAB
LE
UNIT

BUILDING SQUARE

FOOTAGE

ASSIGNED

SPECIAL TAX
PER

TAXABLE
UNIT

1. Single Family Residential Property RU Less than 1,900 sq. ft $2,781.00

2. Single Family Residential Property RU 1,900 sq. ft to 2,100 sq. ft $2,885.00

3. Single Family Residential Property RU 2,101 sq. ft to 2,300 sq. ft $2,923.00

4. Single Family Residential Property RU 2,301 sq. ft to 2,500 sq. ft $2,997.00

5. Single Family Residential Property RU 2,501 sq. ft to 2,700 sq. ft $3,183.00

6. Single Family Residential Property RU 2,701 sq. ft to 2,900 sq. ft $3,212.00

7. Single Family Residential Property RU 2,901 sq. ft to 3,100 sq. ft $3,296.00

8. Single Family Residential Property RU 3,101 sq. ft to 3,300 sq. ft $3,380.00

9. Single Family Residential Property RU 3,301 sq. ft to 3,500 sq. ft $3,547.00

10. Single Family Residential Property RU 3,501 sq. ft to 3,700 sq. ft $3,631.00

11. Single Family Residential Property RU 3,701 sq. ft to 3,900 sq. ft $3,714.00

12. Single Family Residential Property RU Greater than 3,900 sq. ft $3,882.00

13. Multifamily Property Acre N/A $15,327.00

14. Non-Residential Property Acre N/A $15,327.00
On each July 1, commencing July 1, 2023, 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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 68
Menifee Mayor and City Council August 21, 2024 Page 826 of 1068 A-6
4864-5136-1231v3/200299-0022
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. c. Backup Special Tax
The Backup Special Tax for an Assessor’s Parcel within a Final Map classified as Single Family Residential Property or Approved Property expected to be 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 as Single Family Residential Property or Approved Property expected 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 after build out 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 $15,327 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 $15,327 per Acre. The Backup Special Tax shall not apply to Multifamily Residential Property or Non-Residential Property.

On each July 1, commencing July 1, 2023, 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 $15,327 per Acre.

On each July 1, commencing July 1, 2023, 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 $15,327 per Acre.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 69
Menifee Mayor and City Council August 21, 2024 Page 827 of 1068 A-7
4864-5136-1231v3/200299-0022
On each July 1, commencing July 1, 2023, 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 2022-2023 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 following order of priority, (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, (vi) Assessor’s Parcels which are classified as Non-Residential Property or (vii) 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

76.13 Acres.

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 76.13 Acres. Assessor's Parcels which Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 70
Menifee Mayor and City Council August 21, 2024 Page 828 of 1068 A-8
4864-5136-1231v3/200299-0022
cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 76.13 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 $22,000,000 expressed in 2022 dollars, which shall increase by the Construction Inflation Index on July 1, 2023, 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. 2022-1, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to finance additional facilities 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. 2022-1.
“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 NewsRecord Building Cost Index for the City of Los Angeles. “Future Facilities Costs” means the CFD Facilities minus (i) amounts deposited in the Construction Fund, (ii) amounts deposited in any escrow accounts funded by the Outstanding Bonds and anticipated to fund public facilities costs, and (iii) public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment, but in no event shall such amount be less than zero. “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 nonrefundable 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.

The Prepayment Amount shall be calculated as follows (some capitalized terms are defined below):

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 71
Menifee Mayor and City Council August 21, 2024 Page 829 of 1068 A-9
4864-5136-1231v3/200299-0022
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.

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 72
Menifee Mayor and City Council August 21, 2024 Page 830 of 1068 A-10
4864-5136-1231v3/200299-0022

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
These terms have the following meaning:

PP = Partial Prepayment Amount
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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. 2022-1 Bonds have been paid; (ii) all authorized facilities of CFD No. 2022-1 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. 2022-1 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. 2022-1 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.

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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 74
Menifee Mayor and City Council August 21, 2024 Page 832 of 1068 B-1
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APPENDIX B

CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING
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 Bonds or to cure any delinquency or default on the Bonds. The 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 was incorporated on October 1, 2008, as a general law City. As of January 1, 2023, the City has slightly more than 110,000 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 2019 through 2023.

Area 2019 2020 2021 2022 2023
City of Menifee 94,710 102,466 104,323 107,411 110,034
County of Riverside 2,419,057 2,418,185 2,418,727 2,430,976 2,439,234 State of California 39,605,361 39,538,223 39,286,510 39,078,674 39,940,231 Source: California State Department of Finance, Demographic Research Unit. 2010 Census Benchmark for 2019 and 2020 Census Benchmark for 2020 through 2023.

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 2018 through 2022.

BUILDING PERMIT VALUATIONS
City of Menifee
2018-2022
(Dollars in Thousands)
2018 2019 2020 2021 2022
Valuation ($000):

Residential $ 296,414 $343,285 $448,581 $391,923 $295,989 Non-residential 38,992 1,150 94,195 39,831 27,092
Total* $ 335,406 $344,435 $542,776 $431,754 $323,081
Residential Units:

Single family 967 922 1,457 1,256 796
Multiple family 0 330 0 0 0
Total 967 1,252 1,457 1,256 796
* Totals may not add to sums because of rounding.

Source: Construction Industry Research Board.

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BUILDING PERMIT VALUATIONS
County of Riverside
2018-2022
(Dollars in Thousands)
2018 2019 2020 2021 2022
Residential $2,558,081 $2,275,405 $3,071,183 $2,262,642 $2,921,113 Non-residential 1,959,680 1,285,856 1,153,778 1,543,998 1,701,618 Total* $4,517,761 $3,561,261 $4,224,961 $3,806,640 $4,622,731 Residential Units:

Single family 7,540 6,563 8,443 7,360 8,863
Multiple family 1,628 1,798 723 1,126 2,861
Total 9,168 8,361 9,166 8,486 11,724
* 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, 2023.

LARGEST EMPLOYERS
City of Menifee
(as of June 30, 2023)
Rank Name of Business Employees Type of Business

1. Mt. San Jacinto College District 1,604 School District

2. Menifee Union School District 1,467 School District

3. Romoland Elementary School District 602 School District

4. Stater Brothers 348 Supermarkets

5. City of Menifee 333 City Government

6. Menifee Global Medical Center 327 Medical Center

7. Target Corporation 312 Retail Stores

8. United Parcel Service (UPS) 227 Postal Delivery Service

9. Southern California Edison 187 Community Services

10. Texas Roadhouse 173 Casual Dining
Source: City of Menifee Comprehensive Annual Financial Report for the year ending June 30, 2023.

Item Title: 12.1
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LARGEST EMPLOYERS
County of Riverside
(as of June 30, 2023)
Rank Name of Business Employees Type of Business

1. County of Riverside 25,366 County Government

2. Amazon 14,317 Online Retailer

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

4. Nestle UA 8,874 Food and Beverage Company

5. University of California, Riverside 8,623 University

6. State of California 8,383 State Government

7. Wal-Mart 7,494 Supermarket

8. Moreno Valley Unified School District 6,020 School District

9. Kaiser Permanente Riverside Medical Center 5,817 Medical Center

10. Corona-Norco Unified School District 5,478 School District Source: County of Riverside Comprehensive Annual Financial Report for the year ending June 30, 2023.

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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 77
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The following table represents the Annual Average Labor Force and Industry Employment for the period from 2019 through 2023.

RIVERSIDE-SAN BERNARDINO-ONTARIO MSA

INDUSTRY EMPLOYMENT & LABOR FORCE - BY ANNUAL AVERAGE
2019 2020 2021 2022 2023
Civilian Labor Force 2,071,600 2,091,700 2,120,600 2,148,700 2,171,500 Civilian Employment 1,987,500 1,885,400 1,964,300 2,058,400 2,068,800 Civilian Unemployment 84,000 206,200 156,300 90,200 102,700 Civilian Unemployment Rate 4.1% 9.9% 7.4% 4.2% 4.7%
Total Farm 15,400 14,100 13,700 13,800 13,100
Total Nonfarm 1,552,700 1,495,800 1,575,100 1,659,800 1,679,800 Total Private 1,291,500 1,247,800 1,333,100 1,409,800 1,418,900 Goods Producing 209,700 202,200 207,700 216,300 216,100 Mining and Logging 1,200 1,300 1,400 1,500 1,500
Construction 107,200 104,900 110,100 114,700 115,700
Manufacturing 101,300 96,000 96,100 100,000 98,900
Service Providing 1,343,000 1,293,700 1,367,400 1,443,500 1,463,700 Trade, Transportation and Utilities 395,100 406,900 443,200 464,900 456,500 Wholesale Trade 67,700 65,600 67,400 69,500 68,700
Retail Trade 180,700 168,800 177,000 181,000 182,700
Transportation, Warehousing and Utilities 146,600 172,500 198,800 214,400 205,100 Information 14,100 12,400 12,500 13,000 13,300
Financial Activities 45,000 44,100 45,200 46,000 44,900 Professional and Business Services 155,300 152,100 166,600 173,900 164,800 Educational and Health Services 250,300 248,800 254,300 267,500 287,500 Leisure and Hospitality 175,900 141,300 160,200 180,900 186,500 Other Services 46,200 40,200 43,600 47,400 49,300
Government 261,200 248,000 242,000 250,000 260,900
Total, All Industries 1,568,100 1,509,900 1,588,800 1,673,500 1,692,900 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 2022 Benchmark.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 78
Menifee Mayor and City Council August 21, 2024 Page 836 of 1068 B-5
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The following table summarizes the labor force, employment and unemployment figures for the period from 2018 through 2022 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)
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 41,800 37,600 4,200 10.1%
County of Riverside 1,121,100 1,008,000 113,000 10.1
State of California 18,971,600 17,047,600 1,924,000 10.1 United States 160,757,000 149,961,000 10,795,000 6.7
2021
City of Menifee 42,300 39,100 3,200 7.5%
County of Riverside 1,133,000 1,050,000 83,000 7.3
State of California 18,973,400 17,586,300 1,387,100 7.3 United States 162,410,000 156,081,000 6,329,000 3.9
2022
City of Menifee 43,000 41,200 1,800 4.2%
County of Riverside 1,152,100 1,104,100 48,000 4.1
State of California 19,252,000 18,440,900 811,000 4.2
United States 164,966,000 159,244,000 5,722,000 3.5
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. 2022 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, personal dividend income, personal interest income, and personal current transfer receipts, less contributions for government social insurance.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 79
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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 the County increased by 31.14% between 2018 and 2022. The following tables summarize personal income for the County for 2018 through 2022.

PERSONAL INCOME
Riverside County
2018-2022
(Dollars in Thousands)
Year Riverside County
Annual
Percent Change
2018 $ 96,994,918 N/A
2019 103,614,307 6.8%
2020 116,939,915 12.9
2021 126,261,006 8.0
2022 127,195,983 0.7
Source: U.S. Department of Commerce, Bureau of Economic Analysis.

The following table summarizes per capita personal income for the County, California and the United States for 2018-2022. 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 2018-2022
Year Riverside County California United States
2018 $40,582 $60,984 $53,309
2019 43,073 64,174 55,547
2020 48,265 70,061 59,151
2021 51,468 76,991 64,427
2022 51,415 77,036 65,473
Source: U.S. Department of Commerce, Bureau of Economic Analysis..

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 80
Menifee Mayor and City Council August 21, 2024 Page 838 of 1068 B-7
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Taxable Sales
The table below presents taxable sales for the years 2018 through 2022 for the City.

TAXABLE SALES
City of Menifee
2018-2022
(Dollars in Thousands)
Year Permits Taxable Transactions
2018 1,484 $742,128
2019 1,568 776,545
2020 1,726 752,610
2021 1,756 974,142
2022 1,915 1,071,002
Source: Taxable Sales in California, California Department of Tax and Fee Administration for 2018-2022.

The table below presents taxable sales for the years 2018 through 2022 for the County.

TAXABLE SALES
County of Riverside
2018-2022
(Dollars in Thousands)
Year Permits Taxable Transactions
2018 61,433 $38,919,498
2019 64,063 40,626,998
2020 69,284 42,313,474
2021 64,335 55,535,196
2022 66,738 61,908,344
Source: Taxable Sales in California, California Department of Tax and Fee Administration for 2018-2022.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 81
Menifee Mayor and City Council August 21, 2024 Page 839 of 1068 C-1
4864-5136-1231v3/200299-0022

APPENDIX C

FORM OF OPINION OF BOND COUNSEL
Upon issuance of the Bonds, Stradling Yocca Carlson & Rauth LLP, Bond Counsel, proposes to render its final approving opinion in substantially the following form:
[Closing Date]
City of Menifee
Community Facilities District No. 2022-1 (Quartz Ranch) Menifee, California
Re: $___________ Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee Special Tax Bonds, Series 2024A
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. 2022-1 (Quartz Ranch) of the City of Menifee (the “District”) and the authorization and issuance of the District’s Special Tax Bonds, Series 2024A 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 August 21, 2024 (the “Resolution”), and a Bond Indenture (the “Indenture”) dated as of July 1, 2023, as amended and supplemented by that certain First Supplement to Bond Indenture, dated as of September 1, 2024 (collectively, the “Indenture”), 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 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 of Administrative Item Title: 12.1
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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, it should be noted that, 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 (and original issue discount) 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 a Bond Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Bond Owner will increase the Bond Owner’s basis in the applicable Bond.
(6) The amount by which a Bond 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 taxexempt 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 a Bond 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 LLP.

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
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Menifee Mayor and City Council August 21, 2024 Page 841 of 1068 C-3
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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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 84
Menifee Mayor and City Council August 21, 2024 Page 842 of 1068 D-1
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APPENDIX D

APPRAISAL REPORT
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 85
Menifee Mayor and City Council August 21, 2024 Page 843 of 1068 E-1
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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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 86
Menifee Mayor and City Council August 21, 2024 Page 844 of 1068 F-1
4864-5136-1231v3/200299-0022

APPENDIX F

FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE
THIS CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) dated as of September 1, 2024, is executed and delivered by Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee (the “District”) in connection with the issuance and delivery by the District of its $___________ Special Tax Bonds, Series 2024A (the “Bonds”). The Bonds are being issued pursuant to a Resolution of Issuance adopted on August 21, 2024, by the City Council of the City of Menifee, acting as the legislative body of the District, and the Bond Indenture, dated as of July 1, 2023, as amended and supplemented by that certain First Supplement to Bond Indenture, dated as of September 1, 2024 (collectively, the “Indenture”), (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 Chief Financial Officer 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. 2022-1 (Quartz Ranch) 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 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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 87
Menifee Mayor and City Council August 21, 2024 Page 845 of 1068 F-2
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“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 ______, 2024. “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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 88
Menifee Mayor and City Council August 21, 2024 Page 846 of 1068 F-3
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(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; (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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 89
Menifee Mayor and City Council August 21, 2024 Page 847 of 1068 F-4
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(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.

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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 90
Menifee Mayor and City Council August 21, 2024 Page 848 of 1068 F-5
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(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.

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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 91
Menifee Mayor and City Council August 21, 2024 Page 849 of 1068 F-6
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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 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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 92
Menifee Mayor and City Council August 21, 2024 Page 850 of 1068 F-7
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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. 2022-1 (Quartz Ranch) of the City of Menifee
City of Menifee
29844 Haun Road
Menifee, CA 92586
Attn: City Manager
Underwriter: Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, CA 90067
Attn: Public Finance Department
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. 2022-1
(QUARTZ RANCH) OF THE CITY OF MENIFEE
By:

Disclosure Representative
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 93
Menifee Mayor and City Council August 21, 2024 Page 851 of 1068 G-1
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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 Bonds, payment of principal, premium, if any, accreted value and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the 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 Bonds.

The 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 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 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 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 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 Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all 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 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 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 94
Menifee Mayor and City Council August 21, 2024 Page 852 of 1068 G-2
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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 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the 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 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 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

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

DTC may discontinue providing its services as depository with respect to the 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, bonds will be printed and delivered to DTC.

THE TRUSTEE, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE 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 BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 95
Menifee Mayor and City Council August 21, 2024 Page 853 of 1068 Stradling Yocca Carlson & Rauth
Draft of 7/22/24
4868-7937-5311/200299-0022

FIRST SUPPLEMENT TO BOND INDENTURE
Between
COMMUNITY FACILITIES DISTRICT NO. 2022-1
(QUARTZ RANCH) OF THE CITY OF MENIFEE
and

WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
Relating to
$__________
COMMUNITY FACILITIES DISTRICT NO. 2022-1
(QUARTZ RANCH) OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2024A
Dated as of September 1, 2024
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 96
Menifee Mayor and City Council August 21, 2024 Page 854 of 1068 4868-7937-5311/200299-0022

FIRST SUPPLEMENT TO BOND INDENTURE
THIS FIRST SUPPLEMENT TO BOND INDENTURE dated as of September 1, 2024 (the “First Supplement”), governs the terms of Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee Special Tax Bonds, Series 2024A, which are being issued as Parity Bonds in accordance with the Bond Indenture (the “Original Bond Indenture”) dated as of July 1, 2023, by and between Community Facilities District No. 2022-1 (Quartz Ranch) 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. 22-1150 and 22-1151 adopted by the City Council on May 18, 2022, and an election held on May 18, 2022, 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 $27,000,000.

C. The District previously issued its Special Tax Bonds, Series 2023A in the aggregate principal amount of $11,525,000 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. 2022-1 (Quartz Ranch) of the City of Menifee Special Tax Bonds, Series 2024A” (the “2024 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 2024 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 2024 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 2024 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 2024 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 2024 Bonds, as follows:

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 97
Menifee Mayor and City Council August 21, 2024 Page 855 of 1068 2 4868-7937-5311/200299-0022

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 2024 Bonds, March 1, 2025, 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 2024 Bonds, the 2024 Bonds maturing on September 1, 20__, September 1, 20__, and September 1, 20__. 2024 Bonds. The term “2024 Bonds” means the District’s Special Tax Bonds, Series 2024A issued on ________, 2024 in the aggregate principal amount of $__________.

ARTICLE II

GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of 2024 Bonds. Under and pursuant to the Act and the Original Bond Indenture, as supplemented by this First Supplement, the 2024 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 2024 Bonds.

Section 2.2. Description of Bonds; Interest Rates. The 2024 Bonds shall be designated “Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee Special Tax Bonds, Series 2024A.” The 2024 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 March 1, 2025, and each Interest Payment Date thereafter:

Maturity Date
(September 1) Principal Amount Interest Rate
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 98
Menifee Mayor and City Council August 21, 2024 Page 856 of 1068 3 4868-7937-5311/200299-0022
_________________
(T) Term Bond.

Section 2.3. Form of 2024 Bonds. The definitive 2024 Bonds may be printed from steel engraved or lithographic plates or may be typewritten. The 2024 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 2024 Bonds and of the certificate of authentication.

Only the 2024 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 2024 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 2024 Bonds shall be initially delivered in the form of a separate single fully registered 2024 Bond (which may be typewritten) for each maturity of the 2024 Bonds. Upon initial delivery, the ownership of each such 2024 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 2024 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 2024 Bonds. The 2024 Bonds shall not be issued unless and until the conditions for the issuance of the 2024 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 2024 Bonds.

ARTICLE III
APPLICATION OF PROCEEDS OF 2024 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 2024 Bonds;
(3) $_______ shall be transferred to the Acquisition and Construction Fund of which $_________ shall be deposited in the City Facilities Account and $__________ shall be deposited in the School Facilities Account.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 99
Menifee Mayor and City Council August 21, 2024 Page 857 of 1068 4 4868-7937-5311/200299-0022
The Trustee may, in its discretion, establish temporary funds or accounts in its books and records to facilitate such transfers.

ARTICLE IV
REDEMPTION OF 2024 BONDS
Section 4.1. Redemption of 2024 Bonds.
(a) Optional Redemption. The 2024 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 2024 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 2024 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 2024 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
$
*
_____________
* Maturity.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 100
Menifee Mayor and City Council August 21, 2024 Page 858 of 1068 5 4868-7937-5311/200299-0022
The 2024 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
$
*
_____________
* Maturity.

The 2024 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
$
*
_____________
* 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 2024 Bonds purchased Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 101
Menifee Mayor and City Council August 21, 2024 Page 859 of 1068 6 4868-7937-5311/200299-0022
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 2024 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, 2025, 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
103%
102
101
100

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).

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 102
Menifee Mayor and City Council August 21, 2024 Page 860 of 1068 7 4868-7937-5311/200299-0022

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 2024 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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 103
Menifee Mayor and City Council August 21, 2024 Page 861 of 1068 S-1
4868-7937-5311/200299-0022
IN WITNESS WHEREOF, COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH) 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. 2022-1
(QUARTZ RANCH) OF THE CITY OF MENIFEE
By:

Mayor of the City of Menifee, acting as the
legislative body of Community Facilities
District No. 2022-1 (Quartz Ranch) of the City
of Menifee
ATTEST:

Acting City Clerk of the City of Menifee,
acting as the legislative body of
Community Facilities District No. 2022-1
(Quartz Ranch) of the City of Menifee

WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee
By:

Authorized Signatory
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 104
Menifee Mayor and City Council August 21, 2024 Page 862 of 1068 A-1
4868-7937-5311/200299-0022

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. 2022-1
(QUARTZ RANCH) OF THE CITY OF MENIFEE
SPECIAL TAX BOND, SERIES 2024A
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
% September 1, 20__ ____, 2024 ___
REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: __________________ DOLLARS
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH) 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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 105
Menifee Mayor and City Council August 21, 2024 Page 863 of 1068 A-2
4868-7937-5311/200299-0022
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 March 1, 2025, 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. 2022-1 (Quartz Ranch) of the City of Menifee Special Tax Bonds, Series 2024A” (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 August 21, 2024, and a Bond Indenture dated as of July 1, 2023 (the “Original Bond Indenture”), as supplemented and amended by the First Supplement to Bond Indenture, dated as of September 1, 2024 (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 2023A, 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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 106
Menifee Mayor and City Council August 21, 2024 Page 864 of 1068 A-3
4868-7937-5311/200299-0022
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
*
_____________
* 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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 107
Menifee Mayor and City Council August 21, 2024 Page 865 of 1068 A-4
4868-7937-5311/200299-0022
Term Bonds Maturing September 1, 20__
Redemption Dates
(September 1)
Redemption
Amount
*
_____________
* Maturity.

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

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, 20__ 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
103%
102
101
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 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 108
Menifee Mayor and City Council August 21, 2024 Page 866 of 1068 A-5
4868-7937-5311/200299-0022
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 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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 109
Menifee Mayor and City Council August 21, 2024 Page 867 of 1068 A-6
4868-7937-5311/200299-0022
IN WITNESS WHEREOF, Community Facilities District No. 2022-1 (Quartz Ranch) 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 Acting City Clerk of the City.

Mayor of the City of Menifee, acting as the legislative body of Community Facilities District No. 2022-1
(Quartz Ranch) of the City of Menifee
ATTEST:

Acting City Clerk of the City of Menifee,
acting as the legislative body of Community
Facilities District No. 2022-1 (Quartz Ranch)
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: _________, 2024 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 LLP, 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.

Acting City Clerk of the City
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 110
Menifee Mayor and City Council August 21, 2024 Page 868 of 1068 A-7
4868-7937-5311/200299-0022
[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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 111
Menifee Mayor and City Council August 21, 2024 Page 869 of 1068 Stradling Yocca Carlson & Rauth
Draft of 7/22/24
4861-4145-3778v1/200299-0022

DISTRICT CONTINUING DISCLOSURE CERTIFICATE
THIS CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) dated as of September 1, 2024, is executed and delivered by Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee (the “District”) in connection with the issuance and delivery by the District of its $___________ Special Tax Bonds, Series 2024A (the “Bonds”). The Bonds are being issued pursuant to a Resolution of Issuance adopted on August 21, 2024, by the City Council of the City of Menifee, acting as the legislative body of the District, and the Bond Indenture, dated as of July 1, 2023, as amended and supplemented by that certain First Supplement to Bond Indenture, dated as of September 1, 2024 (collectively, the “Indenture”), (the “Indenture”), by and between the District and Wilmington Trust, National Association, as trustee. The District covenants as follows:

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 Chief Financial Officer 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. 2022-1 (Quartz Ranch) 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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 112
Menifee Mayor and City Council August 21, 2024 Page 870 of 1068 2 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 ______, 2024.
“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, 2025, 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
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 113
Menifee Mayor and City Council August 21, 2024 Page 871 of 1068 3 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.

Menifee City CouncilAugust 21, 2024

Menifee City Council
August 21, 2024