Agenda packet — Menifee City Council, August 21, 2024 (part 3 of 4)

Section 4. Content of Annual Reports. The District’s Annual Report shall contain or include by reference the following:
(a) Financial Statements. The audited financial statements of the District for the prior fiscal year, if any have been prepared and which, if prepared, shall be prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the District’s audited financial statements, if any are prepared, are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Financial and Operating Data. The Annual Report shall contain or incorporate by reference the following information:
(i) the principal amount of the Bonds outstanding as of the September 2 preceding the filing of the Annual Report;
(ii) the balance in each fund under the Indenture as of the September 2 preceding the filing of the Annual Report;
(iii) the aggregate assessed valuation of the Taxable Property within the District; Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 114
Menifee Mayor and City Council August 21, 2024 Page 872 of 1068 4 (iv) any changes to the Rate and Method of Apportionment of Special Tax for the District approved or submitted to the qualified electors for approval prior to the filing of the Annual Report;
(v) a table setting forth the annual Special Tax delinquency rate within the District at June 30 of each fiscal year for which a delinquency exists, listing for each fiscal year, the total Special Tax levy, the amount delinquent and the percent delinquent; (vi) an update of the value-to-lien of the property within the District based on the assessed value and the Special Tax levy for the then current fiscal year, which update may be provided in a form similar to Table 2 in the Official Statement; provided that such update need not include overlapping special tax, assessment or general obligation indebtedness; and (vii) the status of any foreclosure actions being pursued by the District with respect to delinquent Special Taxes within the District.
(c) Any or all of the items listed in (a) or (b) above may be included by specific reference to other documents, including official statements of debt issues of the District or related public entities, which have been submitted to EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB through EMMA.

The District shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the District shall give, or cause the Dissemination Agent to give, notice to EMMA in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events with respect to the Bonds:

1. principal and interest payment delinquencies;

2. unscheduled draws on debt service reserves reflecting financial difficulties;

3. unscheduled draws on credit enhancements reflecting financial difficulties;

4. substitution of credit or liquidity providers, or their failure to perform;

5. adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds;

6. defeasances;

7. tender offers;

8. ratings changes; and

9. bankruptcy, insolvency, receivership or similar proceedings.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 115
Menifee Mayor and City Council August 21, 2024 Page 873 of 1068 5 Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S.

Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.

10. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties.
(b) Additionally, the District shall give or cause the Dissemination Agent to give notice to EMMA in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events with respect to the Bonds, if material:

1. mergers, consolidations, acquisitions, the sale of all or substantially all of the assets of the obligated persons or their termination;

2. appointment of a successor or additional fiscal agent or the change of the name of a fiscal agent;

3. nonpayment related defaults;

4. modifications to the rights of Bondholders;

5. bond calls;

6. release, substitution or sale of property securing repayment of the Bonds; and

7. incurrence of a Financial Obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders.
(c) In the event that the District’s fiscal year changes, the District shall report or shall instruct the Dissemination Agent to report such change in the same manner and to the same parties as Listed Events would be reported pursuant to this Section. (d) The District hereby agrees that the undertaking set forth in this Disclosure Certificate is the responsibility of the District, and the Dissemination Agent, if other than the District, shall not be responsible for determining whether the District’s instructions to the Dissemination Agent under this Section comply with the requirements of the Rule.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 116
Menifee Mayor and City Council August 21, 2024 Page 874 of 1068 6 Section 6. Termination of Reporting Obligation. The obligations of the District and the Dissemination Agent under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the District shall give notice of such termination in the same manner as for a Listed Event under Section 5.

Section 7. Dissemination Agent. The District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent, if other than the District, shall not be responsible in any manner for the content of any notice or report prepared by the District pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be Spicer Consulting Group, LLC. The Dissemination Agent may resign by providing (i) thirty (30) days written notice to the District and the Trustee and (ii) upon appointment of a new Dissemination Agent hereunder.

Section 8. Amendment; Waiver.
(a) This Disclosure Certificate may be amended, by written agreement of the parties, without the consent of the Owners, and any provision of this Disclosure Certificate may be waived, if all of the following conditions are satisfied: (1) such amendment or waiver is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law, or a change in the identity, nature or status of the District or the type of business conducted thereby, (2) the undertakings in this Disclosure Certificate as so amended or waived would, in the opinion of a nationally recognized bond counsel, have complied with the requirements of the Rule as of the date of this Disclosure Certificate, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, and (3) the amendment or waiver either (i) is approved by the Owners of the Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Owners or (ii) does not, in the determination of the District, materially impair the interests of the Owners or Beneficial Owners of the Bonds. (b) To the extent any amendment to this Disclosure Certificate results in a change in the type of financial information or operating data provided pursuant to this Disclosure Certificate, the first Annual Report provided thereafter shall include a narrative explanation of the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
(c) If an amendment is made to the basis on which financial statements are prepared, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a quantitative and, to the extent reasonably feasible, qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information.

Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the District from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the District chooses to include any information in any Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 117
Menifee Mayor and City Council August 21, 2024 Page 875 of 1068 7 Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the District shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 10. Default. In the event of a failure of the District or the Dissemination Agent to comply with any provision of this Disclosure Certificate, any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District and/or the Dissemination Agent to comply with their respective obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the District or the Dissemination Agent to comply with this Disclosure Certificate shall be an action to compel performance.

Section 11. Duties, Immunities and Liabilities of Dissemination Agent. Where an entity other than the District is acting as the Dissemination Agent, the Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the District agrees to indemnify and save the Dissemination Agent and its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of their powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. Any Dissemination Agent shall be paid (i) compensation by the District for its services provided hereunder in accordance with a schedule of fees to be mutually agreed to; and (ii) all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the District pursuant to this Disclosure Certificate. The obligations of the District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. No person shall have any right to commence any action against the Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Certificate. The Dissemination Agent shall not be liable under any circumstances for monetary damages to any person for any breach under this Disclosure Certificate.

Section 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Certificate may be given as follows:

District: Community Facilities District No. 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.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 118
Menifee Mayor and City Council August 21, 2024 Page 876 of 1068 8 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: 119
Menifee Mayor and City Council August 21, 2024 Page 877 of 1068 1 $________
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

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

BOND PURCHASE AGREEMENT
_________, 2024
City of Menifee
Community Facilities District No. 2022-1
(Quartz Ranch)
29844 Haun Road
Menifee, California 92586
Ladies and Gentlemen:

Stifel, Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (this “Purchase Agreement”) with Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee (the “Community Facilities District”), which upon acceptance will be binding upon the Underwriter and the Community Facilities District. The agreement of the Underwriter to purchase the Bonds (as hereinafter defined) is contingent upon the Community Facilities District satisfying all of the obligations imposed upon them under this Purchase Agreement. This offer is made subject to the Community Facilities District’s acceptance by the execution of this Purchase Agreement and its delivery to the Underwriter at or before 11:59 P.M., local time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Community Facilities District at any time prior to the acceptance hereof by the Community Facilities District. All capitalized terms used herein, which are not otherwise defined, shall have the meaning provided for such terms in the Bond Indenture, dated as of 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 Community Facilities District and Wilmington Trust, National Association, as trustee (the “Trustee”).

1. Purchase, Sale and Delivery of the Bonds.

Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein: (i) the Underwriter hereby agrees to purchase from the Community Facilities District and the Community Facilities District hereby agrees to sell to the Underwriter all (but not less than all) of the $______ aggregate principal amount of the Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee Special Tax Bonds, Series 2024A (the “Bonds”), dated the Closing Date (as hereinafter defined), bearing interest at the rates and maturing on the dates and in the principal amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be $_______ (being 100% of the aggregate principal amount thereof, plus an original issue premium of $_______ and less an Underwriter’s discount of $_______).

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 120
Menifee Mayor and City Council August 21, 2024 Page 878 of 1068 2 The Underwriter agrees to make a bona fide public offering of all of the Bonds initially at the public offering prices (or yields) set forth in Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds subject to Section 2 hereof, provided that the Underwriter shall not change the interest rates set forth in Exhibit A. The Bonds may be offered and sold to certain dealers at prices lower than such initial offering prices.

The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from the Net Taxes as provided in the Indenture, the Preliminary Official Statement (as hereinafter defined), and the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Community Facilities District Act”). The issuance of the Bonds has been duly authorized by the City Council of the City of Menifee (the “City”), as the legislative body for the Community Facilities District, pursuant to a resolution (the “Community Facilities District Resolution of Issuance”) adopted on ________, 2024.

The proceeds of the Bonds will be used to: (i) finance certain public improvements needed with respect to the development of property located within the Community Facilities District, including public improvements to be owned by the City, 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 fund securing the Bonds; and (iii) pay costs of issuance for the Bonds.

The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from special taxes as provided in the Indenture (the “Special Taxes”). The Bonds are secured under the Indenture by a pledge of and lien upon Net Taxes on a parity with the Community Facilities District’s Special Tax Bonds, Series 2023A, which are currently outstanding in the aggregate principal amount of $11,475,000 (the “2023 Bonds”).

A. The Community Facilities District hereby acknowledges that the Underwriter is entering into this Purchase Agreement in reliance on the representations, warranties and agreements made by the Community Facilities District herein, and the Community Facilities District shall take all action necessary to enforce its rights hereunder for the benefit of the Underwriter and shall immediately notify the Underwriter if it becomes aware that any representation, warranty or agreement made by the Community Facilities District herein is incorrect in any material respect.

The Community Facilities District acknowledges and agrees that (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm’s-length commercial transaction between the Community Facilities District and the Underwriter, (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and not as the agent or fiduciary of the Community Facilities District, (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the Community Facilities District with respect to (a) the offering of the Bonds or the process leading thereto (whether or not the Underwriter, or any affiliate of the Underwriter, has advised or is currently advising the Community Facilities District on other matters) or (b) any other obligations to the Community Facilities District with respect to the offering contemplated hereby, except the obligations expressly set forth in this Purchase Agreement or otherwise imposed by law, (iv) the Underwriter has financial interests that differ from those of the Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 121
Menifee Mayor and City Council August 21, 2024 Page 879 of 1068 3 Community Facilities District and (v) the Community Facilities District has consulted with their own legal, financial and other advisors to the extent they have deemed appropriate in connection with this transaction. The Community Facilities District acknowledges that it has previously provided the Underwriter with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the Municipal Securities Rulemaking Board (“MSRB”). The Community Facilities District acknowledges and represents that it has engaged Urban Futures, Inc. as its municipal advisor (the “Municipal Advisor”) (as defined in Securities and Exchange Commission Rule 15Ba1) and will rely solely on the financial advice of Urban Futures, Inc. with respect to the Bonds.

B. Pursuant to the authorization of the Community Facilities District, the Underwriter has distributed copies of the Preliminary Official Statement dated [POS Date], relating to the Bonds, which, together with the cover page, inside cover page and appendices thereto is herein called the “Preliminary Official Statement.” By its acceptance of this Purchase Agreement, the Community Facilities District hereby ratifies the use by the Underwriter of the Preliminary Official Statement, and the Community Facilities District agrees to execute a final official statement relating to the Bonds (including any supplements and/or amendments thereto, the “Official Statement”) which will consist of the Preliminary Official Statement with such changes as may be made thereto, with the approval of Stradling Yocca Carlson & Rauth LLP, Bond Counsel (“Bond Counsel”), Stradling Yocca Carlson & Rauth LLP, Disclosure Counsel (“Disclosure Counsel”), and the Underwriter, and to provide copies thereof to the Underwriter as set forth herein. The Community Facilities District hereby authorizes and requires the Underwriter to use and promptly distribute, in connection with the offer and sale of the Bonds, the Preliminary Official Statement, the Official Statement and any supplement or amendment thereto. The Community Facilities District further authorizes the Underwriter to use and distribute, in connection with the offer and sale of the Bonds, the Indenture, the Continuing Disclosure Certificate executed by the Community Facilities District in connection with the Bonds (the “Continuing Disclosure Certificate”), this Purchase Agreement and all information contained herein, and all other documents, certificates and statements furnished by or on behalf of the Community Facilities District to the Underwriter in connection with the transactions contemplated by this Purchase Agreement.

C. To assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the “Rule”), the Community Facilities District will undertake pursuant to the Continuing Disclosure Certificate, in the form attached to the Official Statement as Appendix F, to provide annual reports and notices of certain enumerated events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement.

D. Except as the Underwriter and the Community Facilities District may otherwise agree, the Community Facilities District will deliver to the Underwriter, at the offices of Bond Counsel in Newport Beach, California, or at such other location as may be mutually agreed upon by the Underwriter and the Community Facilities District, the documents hereinafter mentioned; and the Community Facilities District will deliver to the Underwriter through the facilities of The Depository Trust Company (“DTC”), the Bonds, in definitive form (all Bonds bearing CUSIP numbers), duly executed by the Community Facilities District and authenticated by the Trustee in the manner provided for in the Indenture and the Community Facilities District Act at 8:00 a.m. California time, on [Closing Date] (the “Closing Date”), and the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in paragraph (A) of this Section by wire transfer, payable in federal or other immediately available funds (such delivery and payment Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 122
Menifee Mayor and City Council August 21, 2024 Page 880 of 1068 4 being herein referred to as the “Closing”). The Bonds shall be in fully registered book-entry form (which may be typewritten) and shall be registered in the name of Cede & Co., as nominee of DTC.

2. Establishment of Issue Price.

A. The Underwriter agrees to assist the Community Facilities District in establishing the issue price of the Bonds and shall execute and deliver to the Community Facilities District at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit C, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Community Facilities District and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds.

B. Except as otherwise set forth in Exhibit A attached hereto, the Community Facilities District will treat the first price at which 10% of each maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Community Facilities District the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Community Facilities District the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the public.

C. The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto. Exhibit A also sets forth, as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the Underwriter represents that (i) the 10% test has been satisfied (assuming orders are confirmed by the close of the business day immediately following the date of this Purchase Agreement) and (ii) the 10% test has not been satisfied and for which the Community Facilities District and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Community Facilities District to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-theoffering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:

1. the close of the fifth (5th) business day after the sale date; or

2. the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter shall promptly advise the Community Facilities District when it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 123
Menifee Mayor and City Council August 21, 2024 Page 881 of 1068 5 D. The Underwriter confirms that:
(i) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(A)(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter,
(B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(ii) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.

E. The Community Facilities District acknowledges that, in making the representation set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-theoffering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 124
Menifee Mayor and City Council August 21, 2024 Page 882 of 1068 6 F. The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.

Further, for purposes of this section:

1. “public” means any person other than an underwriter or a related party;

2. “underwriter” means (A) any person that agrees pursuant to a written contract with the Community Facilities District (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public);

3. a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and

4. “sale date” means the date of execution of this Purchase Agreement by all parties.

3. Representations, Warranties and Covenants of the Community Facilities District.

The Community Facilities District represents, warrants and covenants to the Underwriter on behalf of itself and the City that:

A. The City is duly organized and validly existing as a general law city under the Constitution and laws of the State of California and has duly authorized the formation of the Community Facilities District pursuant to resolutions duly adopted by the City Council (the “Community Facilities District Formation Resolution” and, together with the Community Facilities District Resolution of Issuance, the “Community Facilities District Resolutions”) and the Community Facilities District Act. The City Council, as the legislative body of the City and the Community Facilities District, has duly adopted the Community Facilities District Formation Resolution, and has caused to be recorded in the real property records of the County of Riverside, notice of special tax lien, and any required amendments thereof (collectively, the “Notice of Special Tax Lien”) (the Community Facilities District Formation Resolution and Notice of Special Tax Lien being collectively referred to herein as the “Formation Documents”), and has duly adopted the Community Facilities District Resolution of Issuance. Each of its Formation Documents remains in full force and effect as of the date hereof and has not been amended. The Community Facilities District is duly organized and validly existing as a Community Facilities District under the laws of the State of California. The Community Facilities District has, and at the Closing Date will have, as the case may be, full legal right, power and authority: (i) to execute, deliver and perform its Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 125
Menifee Mayor and City Council August 21, 2024 Page 883 of 1068 7 obligations under this Purchase Agreement, the Continuing Disclosure Certificate and the Indenture, and to carry out all transactions contemplated by each of such agreements; (ii) to issue, sell and deliver the Bonds as provided herein; and (iii) to carry out, give effect to and consummate the transactions contemplated by the Formation Documents, the Indenture, the Bonds, the Continuing Disclosure Certificate, this Purchase Agreement and the Official Statement.

This Purchase Agreement, the Indenture, the Bonds and the Continuing Disclosure Certificate are collectively referred to herein as the “Community Facilities District Documents.” B. The Community Facilities District and the City, as applicable, have each complied, and will at the Closing Date be in compliance in all material respects, with the Formation Documents and the Community Facilities District Documents, and any immaterial noncompliance by the Community Facilities District and the City, if any, will not impair the ability of the Community Facilities District and the City, as applicable, to carry out, give effect to or consummate the transactions contemplated by the foregoing. From and after the date of issuance of the Bonds, the Community Facilities District will continue to comply with the covenants of the Community Facilities District contained in the Community Facilities District Documents.

C. The information in the Preliminary Official Statement and in the Official Statement relating to the Community Facilities District and the Bonds (other than information under the captions “PROPERTY OWNERSHIP AND THE DEVELOPMENT,” and “UNDERWRITING,” Appendices D and H, information provided by Lennar Homes of California, LLC (the “Developer”), the Appraiser and the Special Tax Consultant (as such terms are defined herein) and statements pertaining to the book entry system, as to which no view is expressed), is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and, upon delivery and up to and including 25 days after the End of the Underwriting Period (as defined in paragraph (D) below), the Official Statement will be amended and supplemented so as to contain no misstatement of any material fact or omission of any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading.

D. Up to and including 25 days after the End of the Underwriting Period (as defined below), the Community Facilities District will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The Community Facilities District will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise materially affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. As used herein, the term “End of the Underwriting Period” means the later of such time as: (i) the Bonds are delivered to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the End of the Underwriting Period shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the Community Facilities District at or prior to the Closing Date and shall specify a date (other than the Closing Date) to be deemed the “End of the Underwriting Period.” E. Except as described in the Preliminary Official Statement and Official Statement, the Community Facilities District is not, in any respect material to the transactions Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 126
Menifee Mayor and City Council August 21, 2024 Page 884 of 1068 8 referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, and the performance of its obligations under the Community Facilities District Documents and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed by the Community Facilities District pursuant to this Purchase Agreement, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance by the Community Facilities District of its obligations under the Community Facilities District Documents or the performance of the conditions precedent to be performed by the Community Facilities District pursuant to this Purchase Agreement.

F. Except as may be required under the “blue sky” or other securities laws of any jurisdiction, all approvals, consents, authorizations, elections and orders of, or filings or registrations with, any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the Community Facilities District of its obligations under the Community Facilities District Documents, and the performance of the conditions precedent to be performed by the Community Facilities District pursuant to this Purchase Agreement, have been or will be obtained at the Closing Date and are or will be in full force and effect at the Closing Date.

G. The Community Facilities District Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement.

H. The Bonds are payable from the Special Tax of the Community Facilities District, as set forth in the Indenture, the levy of which has been duly and validly authorized pursuant to the Community Facilities District Act and the Community Facilities District will covenant in the Indenture to levy the Special Taxes within the Community Facilities District in an amount which, together with other available funds, is required for the payment of the principal of, and interest on, the Bonds when due and payable, all as provided in the Indenture.

I. The Indenture creates a valid pledge of, first lien upon and security interest in, the Net Taxes, and in the moneys in the Special Tax Fund (other than the Administrative Expense Account) established pursuant to the Indenture, on the terms and conditions set forth in the Indenture.

J. Except as disclosed in the Preliminary Official Statement, there are, to the best of the Community Facilities District’s knowledge, no entities with outstanding assessment liens against any of the properties within the Community Facilities District or which are senior to or on a parity with the Special Taxes of the Community Facilities District referred to in paragraph (I) hereof.

K. The Preliminary Official Statement was deemed final by a duly authorized officer of the Community Facilities District prior to its delivery to the Underwriter, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of the Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 127
Menifee Mayor and City Council August 21, 2024 Page 885 of 1068 9 Rule. The Community Facilities District hereby covenants and agrees that, within seven (7) business days from the date hereof, or upon reasonable written notice from the Underwriter within sufficient time to accompany any confirmation requesting payment from any customers of the Underwriter, the Community Facilities District shall cause a final electronic form of the Official Statement to be delivered to the Underwriter in sufficient quantity to comply with paragraph (b)(4) of the Rule and Rules G-12, G-15, G-32 and G-36 of the Municipal Securities Rulemaking Board.

L. At the time of acceptance hereof there is and as of the Closing there will be no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body (collectively and individually, an “Action”) pending (notice of which has been served on the Community Facilities District) or to the best knowledge of the Community Facilities District or the City threatened, in which any such Action: (i) in any way questions the existence of the Community Facilities District or the titles of the officers of the Community Facilities District to their respective offices; (ii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of the Bonds or the payment or collection of Special Taxes or any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contests or affects the validity of the Community Facilities District Documents or the consummation of the transactions on the part of the Community Facilities District contemplated thereby; (iii) contests the exemption of interest on the Bonds from federal or State income taxation or contests the powers of the Community Facilities District which may result in any material adverse change relating to the financial condition of the Community Facilities District; or (iv) contests the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserts that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and as of the time of acceptance hereof there is and, as of the Closing Date, there will be no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence.

M. Any certificate signed on behalf of the Community Facilities District by any officer or employee of the Community Facilities District authorized to do so shall be deemed a representation and warranty by the Community Facilities District to the Underwriter on behalf of itself and the Community Facilities District as to the statements made therein.

N. At or prior to the Closing the Community Facilities District will have duly authorized, executed and delivered the Continuing Disclosure Certificate in substantially the form attached as Appendix F to the Official Statement. The Community Facilities District has not been subject to any previous undertakings with regard to the Rule to provide annual reports or notices of enumerated events in the last five years.

O. The Community Facilities District will apply the proceeds of the Bonds in accordance with the Indenture and as described in the Official Statement.

P. Until such time as moneys have been set aside in an amount sufficient to pay all then outstanding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon and premium, if any, to maturity or to the date of redemption if redeemed prior to maturity, the Community Facilities District will faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Indenture.

Item Title: 12.1
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Menifee Mayor and City Council August 21, 2024 Page 886 of 1068 10 Q. Between the date of this Purchase Agreement and the date of Closing, the Community Facilities District will not offer or issue any bonds, notes or other obligations for borrowed money not previously disclosed to the Underwriter.

The Community Facilities District hereby approves the preparation and distribution of the Official Statement, consisting of the Preliminary Official Statement with such changes as are noted thereon and as may be made thereto, with the approval of Bond Counsel, Disclosure Counsel and the Underwriter, from time to time prior to the Closing Date.

The execution and delivery of this Purchase Agreement by the Community Facilities District shall constitute a representation by the Community Facilities District to the Underwriter that the representations and warranties contained in this Section 3 with respect to the Community Facilities District are true as of the date hereof.

4. Conditions to the Obligations of the Underwriter. The obligation of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the Community Facilities District contained herein, to the accuracy in all material respects of the statements of the officers and other officials of the Community Facilities District made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the Community Facilities District of its obligations to be performed hereunder at or prior to the Closing Date, and in reliance upon the representations and covenants of the Developer contained in the certificates delivered as of the Closing Date, and to the following additional conditions:

A. At the Closing Date, the Community Facilities District Resolutions and the Community Facilities District Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the Bonds, and with the transactions contemplated thereby, and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel, shall be necessary and appropriate.

B. At the Closing Date, except as described in the Official Statement, the City shall not be, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, and the performance of the conditions precedent to be performed hereunder will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance of the conditions precedent to be performed by the City hereunder.

C. At the Closing Date, except as described in the Official Statement, the Community Facilities District shall not be, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 129
Menifee Mayor and City Council August 21, 2024 Page 887 of 1068 11 regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, and the performance by the Community Facilities District of its obligations under the Bonds, the Community Facilities District Resolutions, the Indenture, and any other instruments contemplated by any of such documents, and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed hereunder, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance by the Community Facilities District of its obligations under the Indenture, the Bonds or the performance of the conditions precedent to be performed by the Community Facilities District hereunder.

D. The information contained in the Official Statement is, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant hereto, will be true and correct in all material respects and does not, as of the Closing Date or as of the date of any supplement or amendment thereto, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

E. Between the date hereof and the Closing Date, the market price or marketability, at the initial offering prices set forth on the inside cover page of the Official Statement, of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds, shall not have been materially adversely affected, in the judgment of the Underwriter (evidenced by a written notice to the Community Facilities District terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following:

1. Legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration, or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department of the United States of America or the Internal Revenue Service, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon such interest as would be received by any owners of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; or

2. Legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 130
Menifee Mayor and City Council August 21, 2024 Page 888 of 1068 12 Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the federal securities laws as amended and then in effect; or

3. A general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction; or

4. The introduction, proposal or enactment of any amendment to the Federal or California Constitution or any action by any Federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the Community Facilities District, its property, income, securities (or interest thereon), the validity or enforceability of Special Taxes, or the ability of the Community Facilities District to issue the Bonds as contemplated by the Indenture and the Official Statement; or

5. Any event occurring, or information becoming known which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement or in the Official Statement, or has the effect that the Preliminary Official Statement or the Official Statement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; or

6. Any national securities exchange, the Comptroller of the Currency, or any other governmental authority, shall impose as to the Bonds, or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; or

7. There shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (2) any other calamity or crisis in the financial markets of the United States or elsewhere or the escalation of such calamity or crisis; or

8. Except as disclosed in or contemplated by the Official Statement, any material adverse change in the affairs of the City or Community Facilities District shall have occurred; or

9. Any event or circumstance shall exist that either makes untrue or incorrect in any material respect any statement or information in the Official Statement (other than any statement provided by the Underwriter) or is not reflected in the Official Statement but should be reflected therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and, in either such event, the Community Facilities District refuses to permit the Official Statement to be supplemented to supply such statement or information, or the effect of the Official Statement as so supplemented is to materially adversely affect the market price Item Title: 12.1
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Menifee Mayor and City Council August 21, 2024 Page 889 of 1068 13 or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; or

10. A general banking moratorium shall have been declared by federal or State authorities having jurisdiction and be in force; or

11. A material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; or

12. Any new restriction on transactions in securities materially affecting the market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a charge to the net capital requirements of, underwriters shall have been established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or

13. A decision by a court of the United States shall be rendered, or a stop order, release, regulation or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made, to the effect that the issuance, offering or sale of the Bonds, including the underlying obligations as contemplated by this Purchase Agreement or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended and the Trust Indenture Act of 1939, as amended; or

14. Any proceeding shall have been commenced or be threatened in writing by the Securities and Exchange Commission against the City or the Community Facilities District; or

15. The commencement of any Action.

F. At or prior to the Closing Date, the Underwriter shall have received a counterpart original or certified copy of the following documents, in each case satisfactory in form and substance to the Underwriter:

1. The Official Statement, executed on behalf of the Community Facilities District by an authorized officer;

2. The Indenture, duly executed and delivered by the Community Facilities District and the Trustee;

3. The Community Facilities District Resolution, the Community Facilities District Documents and the Formation Documents, together with a certificate dated as of the Closing Date of the City Clerk to the effect that the Community Facilities District Resolutions are true, correct and complete copies of the ones duly adopted by the City Council;

4. The Continuing Disclosure Certificate executed and delivered by an authorized officer the Community Facilities District;

5. An unqualified approving opinion for the Bonds, dated the Closing Date and addressed to the Community Facilities District, of Bond Counsel, to the effect that the Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 132
Menifee Mayor and City Council August 21, 2024 Page 890 of 1068 14 Bonds are the valid, legal and binding obligations of the Community Facilities District and that the interest thereon is excluded from gross income for federal income tax purposes and exempt from personal income taxes of the State of California, in substantially the form included as Appendix C to the Official Statement, together with a letter of Bond Counsel, dated the Closing Date and addressed to the Underwriter, to the effect that such opinion addressed to the Community Facilities District may be relied upon by the Underwriter to the same extent as if such opinion was addressed to it;

6. A supplemental opinion or opinions, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, to the effect that:
(i) this Purchase Agreement and the Continuing Disclosure Certificate have been duly authorized, executed and delivered by the Community Facilities District and, assuming due authorization, execution and delivery by the other parties thereto, as applicable, constitutes the legal, valid and binding obligations of the Community Facilities District and are enforceable in accordance with their terms, except to the extent that enforceability may be limited by moratorium, bankruptcy, reorganization, insolvency or other similar laws affecting creditors’ rights generally or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases and by limitations on legal remedies against public agencies in the State;
(ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended;
(iii) the information contained in the Official Statement on the cover and under the captions “THE 2024 BONDS” (other than the caption “Debt Service Schedule”), “SOURCES OF PAYMENT FOR THE BONDS,” “TAX MATTERS” and “LEGAL OPINION” and in Appendices C and E to the Official Statement, are accurate insofar as such statements purport to summarize certain provisions of the Bonds, the Indenture, Bond Counsel’s final approving opinion, and the Community Facilities District Act.

7. The letter of Disclosure Counsel, dated the Closing Date and addressed to the Community Facilities District and to the Underwriter, to the effect that, without having undertaken to determine independently the accuracy or completeness of the statements contained in the Official Statement, but on the basis of their participation in conferences with representatives of the Community Facilities District, the Special Tax Consultant and others, and their examination of certain documents, nothing has come to their attention which has led them to believe that the Preliminary Official Statement as of its date and the Official Statement as of its date and as of the Closing Date contained or contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial statements or other financial, statistical or engineering data or forecasts, numbers, charts, estimates, projections, assumptions, or expressions of opinion, any information about valuation, appraisals, absorption, archeological or environmental matters, or any information with respect to the City or about DTC or the book-entry-only system);

8. A certificate dated the Closing Date and signed by an authorized representative of the Community Facilities District or an authorized designee, on behalf of the Community Facilities District to the effect that: (i) the representations and warranties made by the Item Title: 12.1
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Menifee Mayor and City Council August 21, 2024 Page 891 of 1068 15 Community Facilities District contained herein are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) to the best knowledge of such officer, no event has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (iii) the Community Facilities District has complied with all the agreements and satisfied all the conditions on its part to be satisfied under this Purchase Agreement, the Community Facilities District Resolutions, and the Community Facilities District Documents at or prior to the Closing Date;

9. An opinion of the City Attorney dated the date of Closing and addressed to the Underwriter and the City, to the effect that:
(i) The City is a municipal corporation and general law city, duly organized and existing under the Constitution and laws of the State of California; (ii) The Community Facilities District Resolutions have been duly adopted at meetings of the City Council, which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Community Facilities District Resolutions are in full force and effect and have not been modified, amended, rescinded or repealed since the respective dates of their adoption; (iii) The Community Facilities District Documents and the Official Statement have been duly authorized, executed and delivered by the City and the Community Facilities District Documents constitute the legal, valid and binding obligations of the Community Facilities District enforceable against the Community Facilities District in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights, to the application of equitable principles where equitable remedies are sought and to the exercise of judicial discretion in appropriate cases; (iv) Except as may be stated in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the City or the Community Facilities District) or, to such counsel’s knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City, or the titles of its members and officers to their respective offices; or (b) affect the validity of the Community Facilities District Documents or restrain or enjoin the repayment of the Bonds or in any way contest or affect the validity of the Community Facilities District Documents or contest the authority of the Community Facilities District to enter into or perform its obligations under any of the Community Facilities District Documents, questions the right of the Community Facilities District to use Special Taxes levied within the Community Facilities District for the repayment of the Bonds or affects in any manner the right or ability of the Community Facilities District to collect the Special Taxes or pledge the Net Taxes levied within the Community Facilities District for the repayment of the Bonds;

10. A certificate dated the Closing Date from Kitty Siino & Associates, Inc. (the “Appraiser”) to the effect that: (i) the statements in the Official Statement provided by the Appraiser and all information supplied by it for use in the Official Statement were as of the date of the Official Statement and are as of the Closing Date true and correct, and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements Item Title: 12.1
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Menifee Mayor and City Council August 21, 2024 Page 892 of 1068 16 therein, in light of the circumstances under which they were made, not misleading and (ii) no events or occurrences have been ascertained by the Appraiser or have come to the Appraiser’s attention since June 17, 2024, that would materially change the opinion set forth in the Appraisal;

11. A certificate dated the Closing Date from Spicer Consulting Group, LLC to the effect that: (i) the Special Tax if collected in the maximum amounts permitted pursuant to the Rate and Method of Apportionment of Special Taxes of the Community Facilities District as of the Closing Date would generate at least 110% of the annual debt service payable with respect to the Bonds and 2023 Bonds plus the Administrative Expenses Cap in each year, based on such assumptions and qualifications as shall be acceptable to the Underwriter; and (ii) the statements in the Official Statement provided by Spicer Consulting Group, LLC concerning Special Taxes in the Community Facilities District and all information supplied by it for use in the Official Statement were as of the date of the Official Statement and are as of the Closing Date true and correct, and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;

12. Certified copies of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee, which resolution authorizes the execution of the Indenture and the authentication of the Bonds;

13. A certificate of the Trustee, dated the Closing Date, to the effect that:
(i) the Trustee is authorized to carry out corporate trust powers, and has full power and authority to perform its duties under the Indenture; (ii) the Trustee is duly authorized to execute and deliver the Indenture, to accept the obligations created by the Indenture and to authenticate the Bonds pursuant to the terms of the Indenture; (iii) no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the authentication of the Bonds or the consummation by the Trustee of the other transactions contemplated to be performed by the Trustee in connection with the authentication of the Bonds and the acceptance and performance of the obligations created by the Indenture; and (iv) to the best of its knowledge, compliance with the terms of the Indenture will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which the Trustee is a party or by which it is bound, or any law or any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Trustee or any of its activities or properties;

14. An opinion of counsel to the Trustee dated the Closing Date, addressed to the Underwriter, and the Community Facilities District to the effect that the Trustee is a national banking association duly organized and validly existing under the laws of the United States having full power and being qualified to enter into, accept and agree to the provisions of the Indenture, and that such document has been duly authorized, executed and delivered by the Trustee, and, assuming due execution and delivery by the other parties thereto, constitutes the legal, valid and binding obligation of the Trustee, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by the application of equitable principles if equitable remedies are sought;
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 135
Menifee Mayor and City Council August 21, 2024 Page 893 of 1068 17 15. A certificate of the Community Facilities District dated the Closing Date, in a form acceptable to Bond Counsel and the Underwriter, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended;

16. A negative assurance letter of counsel to the Developer, dated the date of the Closing, addressed to the Underwriter and the Community Facilities District, in form and substance acceptable to the Underwriter and Bond Counsel;

17. A Letter of Representations from the Developer, dated the date of the Preliminary Official Statement, substantially in the form attached hereto as Exhibit B;

18. A Closing Certificate of the Developer, dated the date of the Closing, substantially in the form attached hereto as Exhibit A to the Letter of Representations from the Developer or as such Closing Certificate may be modified with the approval of the Underwriter and Disclosure Counsel;

19. The Continuing Disclosure Certificate executed and delivered by the Developer in substantially the form attached as Appendix G to the Official Statement;

20. An opinion of Kutak Rock LLP, counsel to the Underwriter (“Underwriter’s Counsel”), dated the date of Closing and addressed to the Underwriter in form and substance acceptable to the Underwriter; and

21. A parity certificate executed by the Community Facilities District relating to the issuance of the Bonds as additional parity bonds as required by the Indenture.

22. Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the material representations and warranties of the Community Facilities District contained herein, and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Community Facilities District at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the Community Facilities District in connection with the transactions contemplated hereby and by the Indenture and the Official Statement.

If the Community Facilities District shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Community Facilities District nor the Underwriter shall be under any further obligation hereunder, except that the respective obligations of the Underwriter and the Community Facilities District set forth in Section 5 hereof shall continue in full force and effect.

5. Expenses. Whether or not the transactions contemplated by this Purchase Agreement are consummated, the Underwriter shall be under no obligation to pay, and the Community Facilities District shall pay only from the proceeds of the Bonds, or any other legally available funds of the City, or the Community Facilities District, but only as the Community Facilities District and such other party providing such services may agree, all expenses and costs of the Community Facilities District incident to the performance of its obligations in connection with the authorization, execution, Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 136
Menifee Mayor and City Council August 21, 2024 Page 894 of 1068 18 sale and delivery of the Bonds to the Underwriter, including, without limitation, printing costs, rating agency fees and charges, initial fees of the Trustee, including fees and disbursements of its counsel, if any, fees and disbursements of Bond Counsel, Disclosure Counsel and other professional advisors employed by the City, costs of preparation, printing, signing, transportation, delivery and safekeeping of the Bonds and for expenses (included in the expense component of the Underwriter’s discount) incurred by the Underwriter on behalf of the City’s employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, lodging, and entertainment of those employees. The Underwriter shall pay all out-of-pocket expenses of the Underwriter, including, without limitation, advertising expenses, the California Debt and Investment Advisory Commission fee, CUSIP Services Bureau charges, regulatory fees imposed on new securities issuers and any and all other expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds, including fees and disbursements of Underwriter’s Counsel. Any meals in connection with or adjacent to meetings, rating agency presentations, pricing activities or other transaction-related activities shall be considered an expense of the transaction and included in the expense component of the Underwriter’s discount.

6. Notices. Any notice of other communication to be given to the Community Facilities District or the City under this Purchase Agreement may be given by delivering the same in writing to the City of Menifee, 29844 Haun Road, Menifee, California 92586, Attention: City Manager; any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, 2121 Avenue of the Stars, Suite 2150, Los Angeles, California 90067, Attention: Public Finance Department.

7. Parties In Interest. This Purchase Agreement is made solely for the benefit of the Community Facilities District and Underwriter (including any successors or assignees of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof.

8. Survival of Representations and Warranties. The representations and warranties of the Community Facilities District under this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the Community Facilities District and regardless of delivery of and payment for the Bonds.

9. Execution in Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

10. No Prior Agreements. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understanding among the parties hereto in relation to the sale of the Bonds by the Community Facilities District.

11. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 137
Menifee Mayor and City Council August 21, 2024 Page 895 of 1068 S-1

12. Effective Date. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the Community Facilities District and shall be valid and enforceable as of the time of such acceptance.

Very truly yours,

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Its: Authorized Officer
The foregoing is hereby agreed to and accepted as of the date first above written:

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

CITY OF MENIFEE
By:

Authorized Officer
Time of Execution: _____________ p.m. California time
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 138
Menifee Mayor and City Council August 21, 2024 Page 896 of 1068 A-1

EXHIBIT A
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

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

MATURITY SCHEDULE
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not
Satisfied
Subject to
Hold-TheOfferingPrice Rule
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
20__(T)
20__(T)
20__(T)
20__(T)
_________________
(T) Term Bond.
(C) Priced to optional call at [par] on September 1, 20__. * At the time of execution of this Purchase Agreement and assuming orders are confirmed by the close of the business day immediately following the date of this Purchase Agreement.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 139
Menifee Mayor and City Council August 21, 2024 Page 897 of 1068 B-1

EXHIBIT B
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

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

LETTER OF REPRESENTATIONS OF LENNAR HOMES OF CALIFORNIA, LLC [POS Date]
Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee
29844 Haun Road
Menifee, California 92586
Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, California 90067
Ladies and Gentlemen:

The undersigned certifies and represents that he or she is duly authorized on behalf of Lennar Homes of California, LLC, a California limited liability company (the “Developer”), to execute and deliver this Letter of Representations of Lennar Homes of California, LLC (this “Letter of Representations”) in connection with the issuance, sale and delivery by Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee (the “Community Facilities District”) of the Bonds captioned above (the “Bonds”).

Capitalized terms used but not defined in this Letter of Representations have the same meanings as are set forth in the Bond Purchase Agreement with respect to the Bonds between Stifel, Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”), and the Community Facilities District (the “Bond Purchase Agreement”).

This Letter of Representations is delivered pursuant to and in satisfaction of Section 4(F)(17) of the Bond Purchase Agreement.

As used in this Letter of Representations, the phrase “Actual Knowledge of the Undersigned” means, as of the date of this Letter of Representations, the actual (as opposed to constructive) knowledge that the undersigned currently has or has obtained through (i) interviews with such current officers and responsible employees of the Developer as the undersigned has reasonably determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Letter of Representations, and/or (ii) review of documents reasonably available to the undersigned and which the undersigned reasonably deemed necessary for the undersigned to obtain knowledge of the matters set forth in this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Developer’s Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 140
Menifee Mayor and City Council August 21, 2024 Page 898 of 1068 B-2
current business and operations. The undersigned has not contacted individuals who are no longer employed by the Developer or its Affiliates. The Developer further notes that Lennar Corporation, a Delaware corporation (“Lennar Corporation”), completed a merger with CalAtlantic Group, Inc., a Delaware corporation (now CalAtlantic Group, LLC, herein “CalAtlantic”) in February, 2018, pursuant to which CalAtlantic merged with and into a subsidiary of Lennar Corporation, with the subsidiary of Lennar Corporation being the surviving entity. Separate and apart from Lennar Corporation’s due diligence efforts for purposes of completing the acquisition of CalAtlantic, for purposes of this Letter of Representations, individuals who were employees and officers of CalAtlantic and its subsidiaries prior to the merger have not been consulted or contacted and documents entered into by CalAtlantic and its subsidiaries or related to their properties and projects have not been reviewed.

As used in this Letter of Representations, the term “Affiliate” of the Developer means any other Person (i) who presently directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Developer, and (ii) for whom information, including financial information or operating data concerning such Person is material to potential investors in their evaluation of the Community Facilities District and investment decision regarding the Bonds (i.e., information regarding such Person’s assets or funds that would materially affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay its Special Tax (as defined herein) on the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency). “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization, or a government or political subdivision thereof. For purposes hereof, the term “control” (including the terms “controlling,” “controlled by,” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. For purposes of this Letter of Representations, CalAtlantic, and its direct and indirect subsidiaries, shall not be considered an “Affiliate” of the Developer.

As used in this Letter of Representations, the term “Property” means the property currently owned by the Developer within the Community Facilities District, as further described in the Preliminary Official Statement.

The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of the Developer, and the undersigned, on behalf of the Developer, further certifies as follows:

1. The Developer is duly organized and validly existing under the laws of the State of California and in good standing under the laws of the State of California, and has all requisite limited liability company right, power and authority: (i) to execute and deliver this Letter of Representations; (ii) to execute and deliver the Developer Continuing Disclosure Certificate to be executed by the Developer (the “Continuing Disclosure Certificate”); and (iii) to undertake all of the transactions on its part described in the Preliminary Official Statement.

2. As set forth in the Preliminary Official Statement, title to a certain portion of the property within Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee (the “Community Facilities District”) is held in the name of the Developer (herein, the “Property”). The undersigned, on behalf of the Developer, makes the representations herein with Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 141
Menifee Mayor and City Council August 21, 2024 Page 899 of 1068 B-3
respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Developer is and the Developer’s current expectations are that the Developer shall remain the party responsible for the development of the Property. The Developer has not entered into an agreement for development or management of the Property by any other entity, except such subcontracts, consultant agreements, and similar agreements for land development activities associated with the Developer’s development plan as are entered into in the ordinary course of business.

3. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry, or investigation at law or in equity, before or by any court, regulatory agency, or public board, or body is pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, is pending against any current Affiliate (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against the Developer or any such Affiliate (a) to restrain or enjoin the collection of Special Taxes or other sums pledged or to be pledged to pay the principal of and interest on the Bonds (e.g., a reserve account established under the Indenture), (b) to restrain or enjoin the development of the Property as described in the Preliminary Official Statement, (c) in any way contesting or affecting the validity of the Special Taxes, or (d) which, if successful, is reasonably likely to materially and adversely affect the Developer’s ability to complete the development and sale of the Property as described in the Preliminary Official Statement or to pay the Special Taxes levied against the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency or which challenges or questions the validity or enforceability of the Bonds or the Continuing Disclosure Certificate to be executed by the Developer in connection with the issuance of the Bonds.

4. As of the date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information contained therein solely with respect to the Developer, its Affiliates, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) as set forth under the sections of the Preliminary Official Statement captioned “PROPERTY OWNERSHIP AND THE DEVELOPMENT” and “CONTINUING DISCLOSURE – Developer Continuing Disclosure” (excluding therefrom in all cases information regarding the Appraisal Report (as defined herein), market value ratios and annual special tax ratios, and information which is identified as having been provided by a source other than the Developer), is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

5. Except as described in the Preliminary Official Statement, there are no material loans outstanding and unpaid and no material lines of credit of the Developer or its Affiliates, that are secured by an interest in the Property. Neither the Developer nor, to the Actual Knowledge of the Undersigned, any of its Affiliates is currently in material default on any loans, lines of credit, or other obligation to repay borrowed money related to the development of the Property or any other project which default is reasonably likely to materially and adversely affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Taxes levied against the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 142
Menifee Mayor and City Council August 21, 2024 Page 900 of 1068 B-4

6. To the Actual Knowledge of the Undersigned, the Developer is not aware that any of the Property has a current liability with respect to the presence of a substance presently classified as hazardous under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 or applicable California law or is adversely affected by the presence of endangered or threatened species or habitat for endangered or threatened species.

7. The Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Developer and its Affiliates which it controls will not bring any action, suit, proceeding, inquiry, or investigation at law or in equity, before any court, regulatory agency, public board, or body, that in any way seeks to challenge or overturn the formation of the Community Facilities District, to challenge the adoption of the ordinance of the Community Facilities District levying Special Taxes within the Community Facilities District, to invalidate the Community Facilities District or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent the Developer and its Affiliates in any way from bringing any other action, proceeding, inquiry, or investigation at law or in equity, before any court, regulatory agency, public board, or body including, without limitation, (a) an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the Rate and Method of Apportionment of Special Taxes pursuant to which Special Taxes are levied, (b) an action or suit with respect to the application or use of the Special Taxes levied and collected, or (c) an action or suit to enforce the obligations of the City and/or the Community Facilities District under the Community Facilities District Resolution of Issuance, the Indenture, the Continuing Disclosure Certificate or any other agreements among the Developer or its Affiliates, the City and/or the Community Facilities District or to which the Developer or its Affiliates is a party or beneficiary.

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

9. The Developer intends to comply with the provision of the Mello-Roos Community Facilities District Act of 1982, as amended relating to the Notice of Special Tax described in Government Code Section 53341.5 in connection with the sale of the Property, or portions thereof.

10. To the Actual Knowledge of the Undersigned, the Developer is able to pay its bills as they become due and no legal proceedings are pending against the Developer (with proper service of process having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened in writing in which the Developer may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.

11. To the Actual Knowledge of the Undersigned, Affiliates of the Developer are able to pay their bills as they become due and no legal proceedings are pending against any Affiliate of the Developer (with proper service of process having been accomplished) or to the Actual Knowledge of the Undersigned, threatened in writing in which the Affiliates of the Developer may be adjudicated as bankrupt or discharged from any or all of their debts or obligations, or Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 143
Menifee Mayor and City Council August 21, 2024 Page 901 of 1068 B-5
granted an extension of time to pay their debt or obligations, or be allowed to reorganize or readjust their debts or obligations, or be subject to control or supervision of the Federal Deposit Insurance Corporation, which is reasonably likely to materially and adversely affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Taxes levied against the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency.

12. The Developer has been developing or has been involved in the development of numerous projects over an extended period of time. It is likely that the Developer has been delinquent at one time or another in the payment of ad valorem property taxes, special taxes, or special assessments. However, to the Actual Knowledge of the Undersigned, during the last five years, neither the Developer nor any current Affiliate has, during the period of its ownership, been delinquent to any material extent in the payment of any ad valorem property tax, special assessment, or special tax on property in California owned by the Developer or any such Affiliate (during the period of their ownership) included within the boundaries of a community facilities district or an assessment district in California that (a) caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the delinquent Developer or Affiliate by a court filing.

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

14. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities by and among the Developer, its Affiliates, or any contractors working on the development of the Property which is reasonably likely to materially and adversely affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Taxes levied against the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency.

15. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real property, including, but not limited to, the risks described in the Preliminary Official Statement under the section entitled “SPECIAL RISK FACTORS,” to the Actual Knowledge of the Undersigned, the Developer presently anticipates that it will have sufficient funds to complete the development of the Property as described in the Preliminary Official Statement and to pay the Special Taxes levied against the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency and does not anticipate that the City or the Community Facilities District will be required to resort to a draw on the Reserve Account of the Special Tax Fund for payment of principal of or interest on the Bonds due to the Developer’s nonpayment of Special Taxes. However, neither the Developer nor any of its Affiliates are obligated to pay the Special Taxes or to make any additional capital contribution or loan to the Developer at any time, and the Developer reserves the right to change its respective development plan and financing plan for the Property at any time without notice, and there is no recourse against the Developer for the failure to pay the Special Taxes other than the filing of a foreclosure action.

16. An appraisal of the taxable properties within the Community Facilities District, dated _______, 2024 (the “Appraisal Report”), with a date of value of June 17, 2024 (the “Date of Value”), was prepared by Kitty Siino & Associates, Inc. (the “Appraiser”). The Appraisal Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 144
Menifee Mayor and City Council August 21, 2024 Page 902 of 1068 B-6
Report estimates the market value of the appraised taxable properties within the Community Facilities District as of the Date of Value. To Actual Knowledge of the Undersigned, all information submitted by, or on behalf of and authorized by, the Developer to the Appraiser and contained in the sections of the Appraisal Report highlighted in yellow or circled in Exhibit B attached hereto, was true and correct in all material respects as of the Date of Value.

17. If between the date hereof and the Closing Date any event relating to or affecting the Developer, its Affiliates, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) shall occur of which the Developer has actual knowledge which would cause the information under the sections of the Preliminary Official Statement indicated in paragraph 4 hereof (and subject to the limitations and exclusions contained in paragraph 4 hereof), to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Developer shall notify the City, the Community Facilities District and the Underwriter, and if in the opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the information described in the section of the Preliminary Official Statement referenced in paragraph 4 hereof (and subject to the limitations and exclusions contained in paragraph 4 hereof), the Developer shall reasonably cooperate with the City and the Community Facilities District in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance satisfactory to counsel to the City, the Community Facilities District and to the Underwriter.

18. The Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached as Exhibit A.

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

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 145
Menifee Mayor and City Council August 21, 2024 Page 903 of 1068 B-7

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

Name:

Title:

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 146
Menifee Mayor and City Council August 21, 2024 Page 904 of 1068 B-8

EXHIBIT A
$_______
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

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

CLOSING CERTIFICATE OF LENNAR HOMES OF CALIFORNIA, LLC
[Closing Date]
Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee
29844 Haun Road
Menifee, California 92586
Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, California 90067
Ladies and Gentlemen:

Reference is made to the above-captioned bonds (the “Bonds”) and to the Bond Purchase Agreement, dated [BPA Date] (the “Bond Purchase Agreement”), entered into in connection therewith. This Closing Certificate of Lennar Homes of California, LLC (the “Closing Certificate”) is delivered pursuant to and in satisfaction of Section 4(F)(18) of the Bond Purchase Agreement.

Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Letter of Representations of Lennar Homes of California, LLC (the “Letter of Representations”), dated [POS Date], delivered by Lennar Homes of California, LLC, a California limited liability company (the “Developer”).

1. The Developer has received the final Official Statement relating to the Bonds, dated [BPA Date] (the “Official Statement”). To the Actual Knowledge of the Undersigned, each statement, representation and warranty made in the Letter of Representations is true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof, except that all references therein to the Preliminary Official Statement shall be deemed to be references to the final Official Statement.

2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement affecting the statements and information described in paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in paragraph Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 147
Menifee Mayor and City Council August 21, 2024 Page 905 of 1068 B-9
4 of the Letter of Representations) relating to the Developer, its Affiliates, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates), which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make such statements and information contained in the Official Statement not misleading in any material respect.

3. For the period through 25 days after the “end of the underwriting period” as defined in the Bond Purchase Agreement to mean the Closing Date unless the Underwriter gives notice to the contrary, if any event relating to or affecting the Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City or the Community Facilities District, to amend or supplement the Official Statement in order to make the information under the sections of the Official Statement indicated in paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in paragraph 4 of the Letter of Representations) not misleading in the light of the circumstances under which they were made, the Developer shall reasonably cooperate with the City, the Community Facilities District and the Underwriter in the preparation and publication of a supplement or amendment to the information described in the section of the Official Statement referenced in paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in paragraph 4 of the Letter of Representations), in form and substance satisfactory to the Underwriter and counsel to the City and the Community Facilities District which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

4. The Developer has duly executed and delivered the Continuing Disclosure Certificate.

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

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

Name:

Title:

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 148
Menifee Mayor and City Council August 21, 2024 Page 906 of 1068 B-10

EXHIBIT B
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

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

DEVELOPER PROVIDED INFORMATION IN APPRAISAL REPORT
See attached.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 149
Menifee Mayor and City Council August 21, 2024 Page 907 of 1068 C-1

EXHIBIT C
$_________
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (QUARTZ RANCH)

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

FORM OF ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (“Stifel”) hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”).

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

2. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Issuer means the Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee.
(c) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(d) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.

The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (e) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.

The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Stradling Yocca Carlson & Rauth LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 150
Menifee Mayor and City Council August 21, 2024 Page 908 of 1068 C-2
8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Name:

By:

Name:

Dated: [Closing Date]
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 151
Menifee Mayor and City Council August 21, 2024 Page 909 of 1068 C-3

SCHEDULE A

SALE PRICES OF THE GENERAL RULE MATURITIES
(To be attached)
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 152
Menifee Mayor and City Council August 21, 2024 Page 910 of 1068

APPRAISAL REPORT
COMMUNITY FACILITIES DISTRICT NO. 2022-1

OF THE CITY OF MENIFEE
(Quartz Ranch by Lennar)
2024 Series Bonds
City of Menifee, Riverside County, California
(Appraiser’s File No. 2024-1295)
Prepared For
City of Menifee
29844 Haun Road
Menifee, California 92586
Prepared By
Kitty Siino & Associates, Inc.
115 East Second Street, Suite 100
Tustin, California 92780
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 153
Menifee Mayor and City Council August 21, 2024 Page 911 of 1068 KITTY SIINO & ASSOCIATES, INC.

REAL ESTATE APPRAISERS & CONSULTANTS
July 15, 2024
Travis Hickey, Chief Financial Officer
City of Menifee
29844 Haun Road
Menifee, California 92586
Reference: Appraisal Report – City of Menifee
Community Facilities District No. 2022-1 (Quartz Ranch) Quartz Ranch by Lennar (2024 Bond Financing)
Menifee, California
Dear Mr. Hickey:

At the request and authorization of the City of Menifee, we have completed an Appraisal Report for Community Facilities District No. 2022-1 (Quartz Ranch) of the City of Menifee (“Menifee CFD No. 2022-1”) for the 2024 series bonds. Menifee CFD No. 2022-1 consists of a new home community known as Quartz Ranch by Lennar Homes of California, LLC (“Lennar”). We completed an appraisal of Menifee CFD No. 2022-1 in 2023 for the first bond sale. It is our understanding this is the final issuance of bonds for the subject property. Quartz Ranch includes a total of 379 proposed single-family detached homes within three neighborhoods known as: Meadow Walk at Quartz Ranch (“Meadow Walk”), Ridgeline at Quartz Ranch (“Ridgeline”), and Canyon View at Quartz Ranch (“Canyon View”). Meadow Walk includes 158 proposed homes, with five plans ranging in size from 1,823 to 2,590 square feet, and has closed 88 completed homes to individuals, with an additional 25 homes in escrow. Ridgeline includes 96 proposed homes, with four plans ranging in size from 1,950 to 2,767 square feet, and has closed out all 96 completed homes to individuals (including three models). Canyon View includes 125 proposed homes, features the largest homes with four plans ranging in size from 2,649 to 4,134 square feet, and has closed 94 completed homes to individuals, with an additional 23 homes in escrow. The remainder of the lots are owned by Lennar and range from models to production homes over 95 percent to production homes under construction and finished and partially finished lots.

The valuation method used in this report is the Sales Comparison Approach along with a mass appraisal technique as defined within this report. The fee simple estate of the subject property has been valued subject to the Menifee CFD No. 2022-1 special tax lien.

This report is written with the hypothetical condition that the subject property is enhanced by the improvements and/or fee credits to be funded by bonds issued by City of Menifee CFD No. 2022-1. As a result of our investigation, the concluded market value for the subject property is:

Quartz Ranch
Lennar Ownership (77 lots & 24 houses) $ 26,348,322
Individual Owners (278 houses) 164,598,620
Total Aggregate Value Menifee CFD No. 2022-1 $ 190,946,942 115 East Second Street, Suite 100, Tustin, California 92780 (714) 544-9978 - Phone, (714) 544-9985 – Fax, E-Mail: [email protected] Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 154
Menifee Mayor and City Council August 21, 2024 Page 912 of 1068 Travis Hickey

CITY OF MENIFEE
July 15, 2024

Page 2 ends

The above values are stated subject to the Assumptions and Limiting Conditions of this report, the Appraiser’s Certification and as of June 17, 2024.

Some supporting documentation concerning the data, reasoning and analyses may be retained in the appraiser’s files. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. This Appraisal Report is intended to comply with both the Uniform Standards of Professional Appraisal Practice (“USPAP” January 2022) and with the Appraisal Standards of the California Debt and Investment Advisory Commission (“CDIAC”). The appraiser is not responsible for unauthorized use of this report. The appraised value contained within this report is being estimated with the hypothetical condition of the special tax lien of the 2024 series of Menifee CFD No. 2022-1 bonds.

This letter of transmittal is part of the attached report, which sets forth the data and analyses upon which our opinion of value is, in part, predicated.

Respectfully submitted,
KITTY SIINO & ASSOCIATES, INC.

Kitty S. Siino, MAI
California State Certified General
Real Estate Appraiser (AG004793)
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 155
Menifee Mayor and City Council August 21, 2024 Page 913 of 1068

TABLE OF CONTENTS
Assumptions and Limiting Conditions............................................................................... i Hypothetical Condition ....................................................................................................iii Extraordinary Assumption ...............................................................................................iii Aerial Photo of Menifee CFD No. 2022-1 ........................................................................ iv Purpose of the Appraisal................................................................................................ 1 The Subject Property...................................................................................................... 1 Intended Use of the Report ............................................................................................ 2 Definitions ...................................................................................................................... 3 Property Rights Appraised ............................................................................................. 5 Effective Date of Value................................................................................................... 5 Date of Report................................................................................................................ 5 Scope of Appraisal ........................................................................................................ 5 Regional Area Map.......................................................................................................... 8 County of Riverside Area Description............................................................................. 9 Menifee Area Map......................................................................................................... 17 City of Menifee Description ........................................................................................... 18 Immediate Surroundings ............................................................................................... 21 Community Facilities District No. 2022-1 ....................................................................... 22 Subject Property Descriptions ....................................................................................... 24 Riverside County Housing Market................................................................................. 32 Highest and Best Use Analysis ..................................................................................... 42 Valuation Analyses and Conclusions ............................................................................ 47 Appraisal Report Summary ........................................................................................... 71 Appraiser’s Certification ............................................................................................... 72

ADDENDA
CFD No. 2022-1 Boundary Map
Tract Map Nos. 28786, 28791, 28792, 28793, and 28794
Discounted Cash Flow Analysis
Residential Land Sales Map and Summary Chart
Improved Residential Sales Map and Summary Chart
Appraiser’s Qualifications
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 156
Menifee Mayor and City Council August 21, 2024 Page 914 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page i

ASSUMPTIONS AND LIMITING CONDITIONS

1. This report might not include full discussions of the data, reasoning and analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Some supporting documentation concerning the data, reasoning and analyses may be retained in the appraiser’s files. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraiser is not responsible for unauthorized use of this report.

2. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated in this report.

3. The property is appraised subject to the special tax lien of both series of bonds for City of Menifee CFD No. 2022-1.

4. Responsible ownership and competent property management are assumed unless otherwise stated in this report.

5. The information furnished by others is believed to be reliable, however, no warranty is given for its accuracy.

6. All engineering is assumed to be correct. Any plot plans and illustrative material used in this report are included only to assist the reader in visualizing the property and may not be to scale.

7. It is assumed that there are no hidden or unapparent conditions of the property, subsoil or structures that would render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them.

8. It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and laws unless otherwise stated in this report.

9. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless nonconformity has been stated, defined and considered in this appraisal report.

10. It is assumed that all required licenses, certificates of occupancy or other legislative or administrative authority from any local, state or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based.

11. Any sketch included in this report may show approximate dimensions and is included only to assist the reader in visualizing the properties. Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee regarding accuracy is expressed or implied unless otherwise stated in this report. No survey has been made for the purpose of this report.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 157
Menifee Mayor and City Council August 21, 2024 Page 915 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page ii

12. It is assumed that the utilization of the land and improvements are within the boundaries or property lines of the property described and that there is no encroachment or trespass unless otherwise stated in this report.

13. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any comment by the appraiser that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert relating to asbestos, urea-formaldehyde foam insulation or other potentially hazardous materials that may affect the value of the property. The appraiser’s value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions or for any expertise or engineering knowledge required to discover them. The appraiser’s descriptions and resulting comments are the result of the routine observations made during the appraisal process.

14. Proposed improvements, if any, are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications.

15. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings, if any, must not be used in conjunction with any other appraisal and are invalid if so used.

16. The Americans with Disabilities Act (“ADA”) became effective on January 26, 1992.

The appraiser has made no specific compliance survey and analysis of the property to determine whether they conform to the various detailed requirements of the ADA, nor is the appraiser a qualified expert regarding the requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the ADA. If so, this fact could have a negative effect upon the value of the property. Since the appraiser has no direct evidence relating to this issue, a possible noncompliance with requirements of the ADA in estimating the value has not been considered.

17. It is assumed there are no environmental concerns that would slow or thwart development of the subject property and that the soils are adequate to support the highest and best use conclusion.

18. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event, only with proper qualification and only in its entirety. Permission is given for this appraisal to be published as a part of the Official Statement or similar document in association with the Menifee CFD No. 2022-1 Special Tax Bonds.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 158
Menifee Mayor and City Council August 21, 2024 Page 916 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page iii

HYPOTHETICAL CONDITION

1. It is assumed that all improvements and/or benefits to the subject property, which are to be funded by the 2024 series of the Menifee CFD No. 2022-1 Special Tax Bond proceeds, are completed and in place or have accrued to the property.

EXTRAORDINARY ASSUMPTION

1. It is an extraordinary assumption that the reported sales and remaining land development costs as received from the builder are true and accurate. We have reviewed both the sales and cost information and they appear reasonable. We have reviewed sample sales against public records in order to verify the sample sales, however we have not reviewed each sale against public record. Additionally, we are not experts in cost estimating and if the cost estimates change, it may change the value conclusions.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 159
Menifee Mayor and City Council August 21, 2024 Page 917 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page iv
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 160
Menifee Mayor and City Council August 21, 2024 Page 918 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 1

PURPOSE OF THE APPRAISAL
The purpose of this appraisal report is to estimate the value of the fee simple interest of the subject property, subject to the special tax lien of both series of the City of Menifee CFD No. 2022-1 Special Tax Bonds.

THE SUBJECT PROPERTY
The subject property is located south of La Piedra Road on both the east and west sides of Evans Road in Menifee. It is encompassed by Menifee CFD No. 2022-1 and is proposed for 379 single-family detached homes spread over five tract maps (Tract Map Nos. 28786, 28791, 28792, 28793, and 28794) being built out as Quartz Ranch by Lennar. The 379 lots encompass three product lines: Meadow View at Quartz Ranch, Ridgeline at Quartz Ranch, and Canyon View at Quartz Ranch. As of the date of value of this report, Quartz Ranch (including all three product lines) has a total of 278 completed homes closed to individuals, five model homes (in addition to three that have already closed to individual owners), 19 production homes over 95 percent complete (all in escrow), 51 houses under construction (29 in escrow and due to close upon completion), and 26 additional finished and/or partially finished lots (none in escrow). The status and ownership of the lots are detailed on the following page:

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 161
Menifee Mayor and City Council August 21, 2024 Page 919 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 2

INTENDED USE OF THE REPORT
It is the appraiser’s understanding that the client, the City of Menifee, will utilize this report in disclosure documents associated with selling the 2024 bonds for Menifee CFD No. 2022-1 and that this report is to be included in the Official Statement or similar document to be distributed in connection with the offering of the bonds. It is the appraiser’s understanding that there are no other intended uses of this report.

Description No. Lots Owner Condition/Status
Meadow Walk at Quartz Ranch (Lots 36-44 of Tract 28786; Lots 3-73 of Tract 28792; Lot 79 of Tract 28792; Lots 1-77 of Tract 28793)
Lots 21-36, 53-54, 79 of Tract 28792;
Lots 1-51, 60-77 of Tract 28793
88 Individuals Completed Homes
Lots 38-40 of Tract 28786 3 Lennar Model Homes (0 in
escrow)
Lots 52-59 of Tract 28793 8 Lennar Over 95% Complete (8 in escrow)
Lots 3-20, 37-45, 65-73 of Tract 28792 36 Lennar Under Construction (17 in escrow)
Lots 36-37, 41-44 of Tract 28786; Lots
46-52, 55-64 of Tract 28792
23 Lennar Finished Lots (0 in escrow)
Meadow Walk Subtotal 158
Ridgeline at Quartz Ranch (Lots 47-49 of Tract 28786; Lots 1-80 of Tract 28791; Lots 1- 2, 74-78, 80-85 of Tract 28792)
Lots 47-49 of Tract 28786; Lots 1-80 of
Tract 28791; Lots 1-2, 74-78, 80-85 of
Tract 28792
96 Individuals Completed Homes
Ridgeline Subtotal 96
Canyon View at Quartz Ranch (Lots 1-35, 45-46, 50-72 of Tract 28786; Lots 1-65 of Tract 28794)
Lots 1-24, 57-72 of Tract 28786; Lots
1-35, 47-65 of Tract 28794
94 Individuals Completed Homes
Lots 45-46 of Tract 28786 2 Lennar Model Homes (0 in
escrow)
Lots 36-46 of Tract 28794 11 Lennar Over 95% Complete (11 in escrow)
Lots 25-35, 53-56 of Tract 28786 15 Lennar Under Construction (12 in escrow)
Lots 50-52 of Tract 28786 3 Lennar Finished Lots (0 in escrow) Canyon View Subtotal 125
Menifee CFD No. 2022-1 Total 379
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 162
Menifee Mayor and City Council August 21, 2024 Page 920 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 3

DEFINITIONS
Market Value
The term “Market Value” as used in this report is defined as:
"The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1. buyer and seller are typically motivated;

2. both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest;

3. a reasonable time is allowed for exposure in the open market;

4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.”
1 Inherent in the Market Value definition is exposure time or the time the property would have had to have been exposed on the open market prior to the appraisal in order to sell at the concluded values. In the case at hand and considering current market conditions the exposure time for the builder-owned lots and houses or for an individually owned home is under one year.

Minimum Market Value
The term “Minimum Market Value” as used in this report is defined as:
“The base market value of a home. That is, most buyers purchase some upgrades, options and/or lot premiums when purchasing a new home. The sales price for the new home typically includes the base price for the plan, plus any upgrades, options or lot premiums, less concessions, if any, which were given or paid for by the builder. The concluded minimum market value is for the base value of the plan only, not taking into consideration any upgrades, options or premiums; however, does take into consideration concessions given by the builder.”
1 The Appraisal of Real Estate, 13th Edition
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 163
Menifee Mayor and City Council August 21, 2024 Page 921 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 4
Mass Appraisal
The term “Mass Appraisal” as used in this report is defined as:
“The process of valuing a universe of properties as of a given date using standard methodology employing common data and allowing for statistical testing”2
In the case at hand, the statistical testing included reviewing all original builder sales, reviewing the Multiple Listing Service for re-sales and current escrows (if any) and determining the actual range of sales and escrow prices for each plan type which is utilized in the valuation process.

Hypothetical Condition
The term “Hypothetical Condition” is defined by USPAP as:
“That which is contrary to what exists but is supposed for the purpose of the analysis”
The Hypothetical Condition within this report is that subject property is enhanced by the improvements and/or fee credits to be funded by bonds issued by both series of bonds for Menifee CFD No. 2022-1.

Extraordinary Assumption
The term “extraordinary assumption” is defined by USPAP as:
“An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusion” The extraordinary assumption in this report is that the reported sales information and remaining land development cost information, as received from the builder, are true and accurate. We have reviewed the sales information and verified samples against public record information; however, all sales have not been verified through public record. In addition, we have reviewed the costs and they appear reasonable; however, we are not experts in the field of cost estimating. It should be noted that these costs were relied upon in the valuation of the subject properties and if the actual costs differ, it could alter the value conclusions.
2 USPAP 2020-2021 Edition
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 164
Menifee Mayor and City Council August 21, 2024 Page 922 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 5

PROPERTY RIGHTS APPRAISED
The property rights being appraised are of a fee simple interest, subject to easements of record and both series of Menifee CFD No. 2022-1 bonds. The definition of “fee simple estate” is defined by USPAP as:
“absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.”

EFFECTIVE DATE OF VALUE
The subject property is valued as of June 17, 2024.

DATE OF REPORT
The date of this report is July 15, 2024.

SCOPE OF APPRAISAL
As previously stated, the purpose of this appraisal is to report the appraiser’s best estimate of the market value for the subject properties. This appraisal will be presented in the following format:
• County of Riverside Description
• City of Menifee Description
• Immediate Surroundings
• Brief Description of City of Menifee CFD No. 2022-1
• Subject Property Description
• Riverside County Housing Market Discussion
• Highest and Best Use Analysis
• Valuation Procedures, Analyses and Conclusions
• Appraisal Report Summary
The subject property consists of 379 proposed single-family houses within three neighborhoods. There are 278 homes completed and closed to individuals, five models, 19 homes over 95 percent complete (all in escrow), 51 homes under construction (29 in escrow), and 26 additional finished/partially finished lots (none in escrow). In valuing the subject property, the value estimates will be based upon the highest and best use Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 165
Menifee Mayor and City Council August 21, 2024 Page 923 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 6
conclusion using the Sales Comparison Approach. The Sales Comparison Approach to value is defined as:
“…a set of procedures in which a value indication is derived by comparing the property being appraised to similar properties that have been sold recently, then applying appropriate units of comparison and making adjustments to the sale prices of the comparables based on the elements of comparison. The sales comparison approach may be used to value improved properties, vacant land, or land being considered as though vacant; it is the most common and preferred method of land valuation when an adequate supply of comparable sales is available.”3

In the Sales Comparison Approach, market value is estimated by comparing properties similar to the subject property that have recently been sold, are listed for sale or are under contract. Neither a cost or income approach was utilized as they were not considered necessary to arrive at credible results.

The due diligence of this appraisal assignment included the following:

1. Compiled demographic information and related that data to the subject properties to perform a feasibility/demand analysis.

2. Gathered and analyzed information on the subject marketplace, reviewed several real estate brokerage publications on historical and projected growth in the subject market and researched the micro and macroeconomics within Riverside County and the Menifee area.

3. Inspected the subject property between May 15, 2024 and June 17, 2024.

4. Had the property flown for an aerial photograph on June 2, 2024.

5. Interviewed representatives from the builders to obtain available information on the subject property.

6. Reviewed Preliminary Title Reports on the subject property.

7. Reviewed a Soils Report on the property.

8. Reviewed the City of Menifee General Plan Land Use Map, Zoning Map, Specific Plan, tentative map/site plan and recorded Tract Maps regarding entitlements and allowances on the subject site.
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9. Searched the area for relevant comparable new home residential projects, including sales prices and concessions and interviewed representatives from each comparable neighborhood.

10.Reviewed sales brochures and sales information on each of the subject neighborhoods.

11.Reviewed actual builder sales information on all closed homes and current escrows for each neighborhood.

12.Reviewed Multiple Listing Service (“MLS”) information on re-sales and current listings of existing homes within City of Menifee CFD No. 2022-1.

13.Inspected the subject property for any for-sale or property listing signs that may not be listed on the MLS yet.

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REGIONAL AREA MAP
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COUNTY OF RIVERSIDE AREA DESCRIPTION
Location
The subject property is located in the southwest portion of Riverside County (the “County”) west of I-215 and south of Newport Road in the City of Menifee (“City”). The County encompasses approximately 7,300 square miles, and includes large expanses of undeveloped deserts, valleys, canyons, and mountains. The County is a major beneficiary of outward urban pressure from Orange and Los Angeles Counties as well as growth from San Diego County to the south. Although located at the periphery of most urban activity in Southern California, Riverside County, particularly the western area, has been a major growth area and is perceived by most observers as an area expected to continue to grow. Riverside and San Bernardino Counties are considered distinct from Los Angeles and Orange Counties and belong to the same Metropolitan Statistical Area (“MSA”). This area, consisting of San Bernardino and Riverside Counties, is commonly referred to as the Inland Empire.

Transportation
The subject property is situated east of I-15, west of I-215, south of Newport Road and north of Scott Road, on the south side of La Piedra Road at Evans Road in Menifee. I-15 travels in a northerly/southerly direction and provides access to Barstow and Nevada to the north and San Diego to the south. Highway 74 is approximately seven miles northwest of the subject and provides access to the west into Orange County on what is also known as Ortega Highway and access to the east into the City of Hemet. Interstate 215 is approximately 1.5 miles east, travels in a northerly/southerly direction within the County, branching off from I-15 and heading generally north where it parallels I-15 to the east and merges back into I-15 approximately 40 miles northwest of the subject in San Bernardino County. In addition, the 60 Freeway runs in an east-west direction approximately 18 miles north of the subject providing access into Los Angeles County to the west and merges with Interstate 10 to the east which provides access across California and into Arizona.

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The County is served by Amtrak and Metrolink as well as several rail freight lines. The Ontario International Airport provides regional air service and is located approximately 35 miles northwest of the subject property while the Orange County Airport is located approximately 38 miles west and the San Diego International Airport is located about 64 miles south. In addition, the County has extensive trucking corridors along the previously referred to interstates, highways, and state freeways.

Population
The County has experienced population growth for several decades and is anticipated to continue to do so in the foreseeable future. Per the California Department of Finance, the January 1, 2024, County population was 2.442 million, representing a one-year increase of 0.6 percent. This compares to an average annual growth rate over the past thirteen years of about 0.8 percent, and an average annual growth rate of approximately 2.5 percent for the previous eighteen-year period. It should be noted however, California’s overall population increased for the first time in 2024 by 0.2 percent following three years of decreasing population statewide. Current State projections for Riverside County suggest the population is anticipated to reach approximately 2.525 million by 2030, indicating an average annual increase of approximately 0.6 percent over the next six years. The current growth of 0.6 percent is lower than the previous twelve-year annual average of about 0.8 percent likely due to the COVID pandemic disruption, and significantly lower than the previous 18-year average (2.5 percent) likely due to the Great Recession. Future growth is predicted assuming a more stable market than was seen prior to the Great Recession.

Economy
The U.S. economy in the past few years has experienced challenging times due to reactions from the COVID disruption. These economic challenges include significant inflation, increasing interest rates, banks’ instability and reaching an agreement on the debt ceiling. During COVID, the Federal, State, County and City Governments (“Governments”) originally shut down non-essential businesses and areas where social gatherings occur in order to slow the spread of the virus. This created a strain on small and large businesses alike. Restaurants and hotels were hit hard, and travel reduced Item Title: 12.1
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drastically as citizens were urged to stay home. Layoffs occurred with reports of 40 million people filing for unemployment in the first few months of the pandemic. The Governments attempted to curtail the job losses and hardships with the approval of over $5.6 trillion in COVID relief to our nation. In addition, the Federal Reserve Board (“Board”) reduced interest rates and started quantitative easing by buying bonds. This legislation helped shore up the U.S. economy; however, due to the significant amount of new money introduced into the economy, inflation began occurring at a rate not seen for 40 years. As of May 2024, the national inflation rate was at 3.3 percent; up from a low of 2.97 in July 2023, and down from the peak in June 2022 of 9.1 percent. 2021 had an annual inflation rate of 4.7 percent as inflation began after COVID. This compares to a 1.24 annual percent rate for 2020 and an average of 1.74 percent annual rate for the previous ten years. Whether it is a result of the world turmoil, supply chain issues due to COVID or from the additional money entering the economy, inflation has been hitting Americans hard.

In an effort to curb inflation, the Federal Reserve Board (“Board”) began raising interest rates. Between March 2022 and August 2023, there were eleven interest rate increases rising the Federal Funds Rate (“FFR”) from 0.25 – 0.50 percent to 5.25 – 5.50 percent.

The Board has not increased rates since August 2023 due to the decrease in inflation coupled with other signs in the economy. While the eleven increases appeared to help slow inflation, the quick, significant increases strained bank balance sheets. Three major banks failed in early 2023 with the government taking unprecedented action to help shore them up. At the most recent Board meeting in June 2024, they continued to pause the increases for the sixth meeting in a row and stated the economic outlook is uncertain and the Board remains highly attentive to inflation risks. In addition to causing bank instability, the FFR increases over the past couple years increased a typical 30-year fixed mortgage rate from 2.98 percent as of November 10, 2021, to the high of 7.79 percent as of October 2023; however, the rate has dropped to 6.95 percent as of June 13, 2024 (per Federal Reserve Economic Data-St. Louis). This steep increase between March 2022 and August 2023 significantly affected the real estate market.

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The COVID disruption to the economy also caused extreme volatility in the stock market with the Dow Jones Industrial Average (“DJIA”) dropping from 29,398 in February 2020 to 19,174 in March 2020, a drop of 37 percent. The Government interventions resulted in a bounce back in the DJIA to 27,111 by June 2020 with the stock market then climbing up to a peak of 36,799 in January 2022. In February 2022, Russia began invading Ukraine which caused volatility in world economics followed by U.S. inflation, interest rate increases and instability in the U.S. due to the debt ceiling being reached. In addition, in Israel declared war on Hamas on October 7, 2023, which added to the strain. All of these factors caused a drop in the DJIA of over ten percent from January 2022 to the low on October 27, 2023 (32,418); however, the Federal Reserve Board’s pausing of the interest rate increases coupled with strong economic news, brought the stock market to a new all-time high of 40,003 (May 17, 2024) with the current average at 38,835 (as of June 18, 2024). It appears the recent Board’s decision not to increase rates further and their suggestion that a decrease may occur within this calendar year has been well received by investors. Current concerns on the U.S. economy include the nation’s debt limit which can only be increased through government approvals. The current partisanship in our government caused a stand-off in increasing the debit limit which has been in danger of being reached numerous times with several temporary deals being reached, however, no permanent agreements at this time.

The significant increase in mortgage rates over the past two years is just one part of the puzzle affecting the impact of new housing on the broader economy. Additional risks include homebuilders trying to find balanced inventory levels, supply chain issues, both wage and price increases, and persistent inflation. Over the past 25 years, the Inland Empire economy has had significant cycles with home prices almost doubling from 1995 to 2005, then falling by over 50 percent during the Great Recession, taking prices back to 2002 levels. Home values appeared to hit bottom in 2009 then remained essentially flat for two to three years with the majority of the Inland Empire housing market seeing an improvement beginning in mid-2012. Contrary to homebuilder’s original thoughts of a slowdown due to the pandemic, new home buyers stepped up in the spring of 2020 and new home sales were significantly higher during the second half of 2020 versus the previous year and continued extremely strong throughout 2021. This exceptional activity Item Title: 12.1
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in new home sales was the one bright spot in the COVID disruption and is thought to be due to several factors, including: a tight supply of resale homes; historically low interest rates; millennials finally buying homes; and the work from home factor which began during the pandemic and allowed residents to live in more suburban areas without long commutes. As rates began increasing in early 2022, there was a significant slowdown in sales within the Inland Empire. The high mortgage rates have significantly slowed existing homeowners from moving. The limited availability of existing homes on the market has resulted in new homes capturing a much larger share of the total home sales.

While most jobs have come back, job losses were significant during the COVID recession as the Nation’s unemployment rate went from 3.5 percent in February 2020 to 14.4 percent in April 2020, with the April 2024 National unemployment rate at 3.5 percent (Employment Development Department, not seasonally adjusted). The unemployment rate for the MSA was estimated at 4.8 percent (as of April 2024 per the Employment Development Department). This reflects a decrease from the peak during the Great Recession of 15.1 percent in 2010 and a decrease from the peak during COVID of 14.9 percent. As of April 2024, Riverside County’s unemployment rate was 4.9 and San Bernardino County had a 4.8 percent unemployment rate. The current unemployment rate for the MSA of 4.8 percent is the same as the California rate at 4.8 percent and higher than the April 2024 National rate of 3.5 percent. Below is a table comparing Riverside County’s unemployment rate to the unemployment rates of the surrounding counties as of April 2024.

Jurisdiction As of Unemployment Rate*
Los Angeles County April-2024 4.5%
Riverside County April-2024 4.9%
San Bernardino County April-2024 4.8%
Orange County April-2024 3.7%
San Diego County April-2024 4.1%
Source: State of California E.D.D.; *Not Seasonally Adjusted The latest UCLA Anderson Forecast (“Forecast”) was issued March 13, 2024, and stated the possibility of a recession has faded due to expansionary fiscal policy, new national industrial policy, and the fact that consumers are still spending despite the perception of economic uncertainty. GDP growth in the fourth quarter of 2023 came in at a higher-thanItem Title: 12.1 Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 173
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expected 3.2 percent annual rate of growth that was mostly due to strong consumer spending but also to inventory replacement after the holidays. The Forecast is now for the first quarter 2024 growth to be 2.2 percent. They believe the impact of higher interest rates will restrain growth in 2024. Inflation is still higher than the target 2.0 percent primarily because of residential rents, automobile repair and new health insurance premiums. The upside of the Forecast is productivity growth thanks to new technology that drives higher wages and higher GDP. The Forecast mentions that risks to their current forecast include a possible shutdown of government, geopolitical events and the possibility of a different national economic policy in 2025 due to the election.

The UCLA Forecast for California is typically more positive than the overall Nation due to job growth in California; however, this Forecast suggests a slower-growing California economy with the growth not much faster than the U.S. They believe that the unemployment rate for the first quarter of 2024 will average 4.7 percent (currently 5.3 percent) with the 2024 yearly average of 4.6 percent, then 3.8 percent in 2025 and 3.9 percent in 2026. The housing market in California is still misbehaving as higher interest rates should send prices lower; however, the median price of an existing single-family home sold in the state has climbed significantly since December 2022 by 9.3 percent in San Diego; 9.0 percent in Los Angeles and 3.9 percent in San Francisco. With existing home sales numbers at depression levels, builders are responding with new developments with the Forecast stating that 32 percent of all developers interviewed in Northern California and 55 percent in Southern California are planning to begin one or more new multi-family projects in 2024. The Forecast is estimating 123,000 net new units to be permitted in California in 2024 and grow to 159,500 by the end of 2026.

One bright spot in the current economy is sales of new homes. While existing homeowners are reluctant to put their houses on the market due to their under-four percent mortgages, new home sales continue. Even with rates in the seven percent range, new homes are still selling. This is partially due to the extremely limited availability of existing homes on the market, coupled with homebuilders offering to buy-down interest rates to help new home buyers. While new homes historically captured 10 – 13 percent of total home sales; over the past year new homes are capturing around 25 percent of Item Title: 12.1
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total home sales. This rush to new home purchases has put pressure on pricing, even while interest rates have soared. During the Great Recession median housing prices (existing) in Riverside County dropped from a high of $431,713 in June 2006 to a low of $171,480 in April 2009. Median prices surpassed the pre-recession high in April 2020 ($435,000), hit a peak in May 2022 of $650,000 and decreased until this month with the current April 2024 median home price in Riverside County again at the peak of $650,000 (all statistics per the California Association of Realtors). It should be noted that the median home price in Riverside County is up 5.7 percent year over year. This will be discussed further in the Riverside County Housing Market section later within this report.

As a final indicator of overall economic activity for the region, we have reviewed the rise and fall of TEUs (Twenty-foot Equivalent Units – i.e., containers) being processed in the local ports. This is especially important for the Inland communities, as it represents much of the growth in development of West Coast distribution centers and warehouses in the Inland Empire linked to supply-chain nodes in the Pacific Rim. The chart below shows TEU activity at the Port of Long Beach. Generally, there had been increases since 2009 with the exception of a slight dip in 2016 and again in 2019 which ended with a 5.6 percent downturn. The 2022 calendar year saw a decrease of 2.6 percent from the previous year; however, 2023 saw the largest percentage decrease of 12.2 percent year over year (8,018,668 versus 9,133,657 total TEUs). It should be noted that consumer demand cooled in mid-2022 leaving fewer TEUs needed. For the calendar year 2024, thus far TEUs are up over 16 percent.

Government
A Board of Supervisors oversees the County as the governing body of the County, certain County special districts, and the County Housing Authority. The Supervisors enact ordinances and resolutions, adopt the annual budget, approve contracts, and appropriate

4.0 6.0

8.0 10.0
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 TEU's (millions)
Year
Port of Long Beach TEUs
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funds, determine land use zoning for unincorporated areas, and appoint certain County officers and members of various boards and commissions. The Board of Supervisors is elected from five different districts within the County.

Education
Menifee Union School District (K thru 8th) and the Perris Union High School District serve the subject area. The Menifee Union School District operates 11 elementary schools and four middle schools, one K-8 school (Harvest Hill STEAM Academy), two alternative schools and one preschool. Perris Union High School District covers a larger area than Menifee Union and operates five high schools, four alternative high schools and one alternative middle school to serve the greater Perris area including Menifee. Higher education is available within an hour’s drive at the University of California campuses at Riverside and Irvine or California State University campuses in San Bernardino, San Marcos, Fullerton, and Pomona along with several additional private colleges. The closest community college is Mt. San Jacinto College.

Conclusion
Population in the County has increased over the past 20 years with predictions for continued population growth. The Nation’s economy has been slowing after the Board increased the FFR over five percent to fight historical inflation which began during COVID.

One bright spot during COVID was housing; the region’s relative affordability and low interest rates, coupled with the rising prices in the coastal market and the demand for housing, set up a new housing boom. This was followed by a significant drop in existing home sales due to existing homeowners being unwilling to give up their low-rate mortgages, which turned out to be a boon for new homes. Current concerns for the Inland Empire economy include stubborn inflation, the high prices of homes, higher interest rates, supply chain issues, possible government shutdowns along with the Russian/Ukraine and Israel/Palestine conflicts, which are all creating volatility in both local and global financial markets. In conclusion, the County is expected to continue to grow in population due to its Southern California location, the availability of land, and the relatively lower land and housing prices in comparison to adjacent Orange, Los Angeles, and San Diego Counties.

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MENIFEE AREA MAP
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CITY OF MENIFEE DESCRIPTION
The subject property is located near the center of the City, which is located in the southwestern portion of the County. Menifee became a city in October 2008 after voting to incorporate. Menifee was the 26th city within the County of Riverside and is located along both sides of I-215 between Murrieta and Perris. The City includes the diverse lifestyle communities of Menifee, Sun City, Quail Valley, and portions of Romoland. The City is bordered by unincorporated lands and the City of Murrieta to the south, the cities of Lake Elsinore and Canyon Lake to the west, the City of Perris, area of Winchester and unincorporated lands to the north and unincorporated lands (portion known as the French Valley) to the east.

In the 1960s, early development of the Menifee Valley began when the concept of an active retirement community was envisioned for Sun City. Since that time the Menifee Valley has grown substantially. At incorporation in 2008, the City of Menifee had a total population of 60,000 residents. The Menifee Valley includes some portions of Romoland that are not included within the city limits. Although this area currently serves as a bedroom community for the workforces of North San Diego County, Temecula, Riverside, Corona and Orange County, economic development groups are in the process of recruiting future quality employers to relocate in the Menifee Valley. There have been several new commercial developments on the I-215 corridor south of McCall Boulevard including major shopping centers at the Newport Road off ramp, the Menifee Town Center west of the off ramp and an additional shopping center at Clinton Keith Road. Per the City of Menifee Economic Development website, there are six commercial projects under active construction and an additional 18 commercial projects either under review or in the plan review process (City of Menifee CIP/Land Development Dashboard, June 11, 2024).

Between 1990 and 2003, there was an extraordinary growth rate of 48 percent in the community of Menifee. The population is estimated at 111,560 as of January 2024 per the Department of Finance (most recent available), representing a growth of 2.0 percent year-over-year. This compares to the Riverside County past year’s growth of 0.6 percent from January 2023 to January 2024. The City’s higher growth rate than the County is due to the wide expanses of land available for development within the City, and because of Item Title: 12.1
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the planned communities such as Cimarron Ridge, Shadow Mountain, Quartz Ranch (subject), Country View, Mountain’s Edge, Sumac Ridge and Rockport Ranch and the future development known as Legado (near I-215 and McCall), as well as single new home tracts.

In the past 15 years Menifee has had exceptional growth in the commercial and retail sector. Prior to the Great Recession several shopping centers were either constructed or planned. Included are the Town Center Marketplace, which is anchored by Aldi Market, PetSmart, and several national restaurants (located at the southwest corner of Haun and Newport Roads), and the popular Menifee Countryside Marketplace, which is anchored by Target, Lowe’s, Kohls, Ulta, TJ Maxx, Best Buy and Home Goods along with numerous restaurants (located at the southeast corner of Haun and Newport Roads). The Town Center Specific Plan (“TCSP”) includes 170 acres of mixed use with a proposed City Hall, a Fairfield Inn & Suites by Marriott on Town Center Drive, along with several completed new home neighborhoods including: Camden Place by Taylor Morrison; The Townes; Union Place and The Village by Lennar; and Artesa, a large upscale apartment project.

Prior to the COVID pandemic shutdowns, the Krikorian theaters were under construction within TCSP along with a Krikorian retail center planned adjacent to the theaters, however, the shutdown of the economy stopped construction. The theater has been caught in litigation for three years with contractor lawsuits. The City has recently adopted a resolution declaring the Krikorian theater a public nuisance with orders to tear down what is left of the theatre construction. Aside from the Krikorian theater, other new commercial development has proceeded with both Center Pointe (retail northwest of the theaters) and Menifee Plaza (retail northeast of theaters), which front Newport Road, opening. Along the north side of Newport at Haun Road is a newer commercial area that houses the Menifee Union School District’s administration building, the existing City Hall, a Post Office, and several national chain restaurants.

The Menifee community also benefits from its proximity to Diamond Valley Lake, which was dedicated on March 18, 2000, and initially filled by the end of 2002. Diamond Valley Lake is located approximately five miles east of the City and is a 13,000-acre site with a 4,500-acre reservoir for boating and fishing. There is no swimming, water skiing or Item Title: 12.1
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personal watercraft allowed in Diamond Valley Lake. The reservoir contains 800,000 acre-feet (260 billion gallons) of water and is owned by the Metropolitan Water District.

Access to Diamond Valley Lake is via Newport Road, which becomes Dominigoni Parkway east of I-215, and State Route 79, which was completed in 2008.

Land prices in the Menifee area have been historically lower than prices in the Murrieta and Temecula areas. As housing prices increased in the early 2000s, the price difference narrowed between Menifee and Murrieta/Temecula, however, there is still a variance.

The price difference appears to be due to the Murrieta/Temecula area being along the I15 corridor, which commands a premium due to easier commuting to adjacent counties.

Menifee is located along the I-215 corridor, which creates a slightly longer commute to employment centers.

As discussed under the economy section under County of Riverside Area Description, new home sales had prospered during the COVID pandemic and Menifee is no exception.

Per the June 9, 2024, Ryness Report (a new home sales tracking and research company), there are 49 new home projects currently selling in the South Riverside submarket with 18 of the 49 new home projects located in Menifee. The average year-to-date sales rate per project for the week ending June 9, 2024, in the South Riverside submarket was 4.6 homes per month which is stronger than the average 2023 sales rate per project was 3.8 sales per month.

In summary, the future growth of Menifee should continue. There are a significant number of new residential projects in Menifee, both currently selling and planned in the area.

Housing is less expensive than the Murrieta/Temecula neighboring communities, which is attractive to homebuyers as price points are important in today’s Inland Empire housing market. The South Riverside submarket which houses the subject property is experiencing a higher-than-average sales rate. Diamond Valley Lake is another asset to the Menifee Valley area. The lower land prices and the availability of land for development combine to make Menifee an excellent candidate for future growth.

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IMMEDIATE SURROUNDINGS
The subject site is located north of Holland Road, south of La Piedra Road along both sides of Evans Road in the central portion of the City, west of I-215 and south of Newport Road. The project has access both from I-215 and from I-15 via Canyon Hills Road which turns into Holland Road (via I-15) and Newport Road (via I-215). The area is generally made up of existing homes to the north and east and more rural existing homes along with vacant lands to the south and west. North of the subject across La Piedra Road is Evans Ranch Elementary School along with the Menifee Preschool. Menifee Town Center, a mixed-use master planned community is located about one mile northeast of the subject. The subject property was generally level at surrounding street grade it was purchased in a raw condition by Lennar in September of 2020.

Shopping is available to the community at Menifee Countryside Marketplace at the southwest intersection of Newport Road and I-215. Countryside Marketplace is anchored by a Target, Home Depot, and a Kohls. There is an Aldi supermarket across from the Countryside Marketplace along with a Stater Brothers Market at Murrieta Road and Newport Road. Just north of Newport across from Menifee Town Center on Haun Road is commercial center which houses the existing City Hall for Menifee. In addition, there are several medical office buildings in this center. Approximately ten miles south is Promenade Temecula, a major shopping mall anchored by Macy’s and JC Penney, located off the I-15 near the intersection of I-215 and Winchester Road (State Route 79).

In addition to shopping and entertainment, the community is about 3.5 miles away from Loma Linda University Medical Center.

The subject property is located within the Menifee Union School District (K-8th) and the Perris Union High School District (9th -12th). The community is served by Paloma Valley High School, less than one mile southeast of the subject; Menifee Valley Middle School located a little over one mile southwest of the subject; and, Evans Ranch Elementary School within walking distance from the subject (adjacent to the subject at the northwest corner of Evans Road and La Piedra Road).

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CITY OF MENIFEE CFD NO. 2022-1
Menifee CFD No. 2022-1 was formed per the Resolution of Intention of the City Council of the City of Menifee dated April 6, 2022. Per the City of Menifee CFD No. 2022-1 CFD Report, the CFD is comprised of approximately 80 taxable acres within Tract Maps 28786, Tract 28791, Tract 29792, Tract 29793, and Tract 28794 which in total encompasses 379 single family detached lots proposed for 379 single-family homes. The overall boundary map is shown below with a larger version of the overall map along with the additional Sheets 2, 3 and 4 located in the Addenda.

Per the CFD Report prepared by Spicer Consulting Group and dated May 18, 2022, the types of facilities that are proposed by Menifee CFD No. 2022-1 consist of the construction, purchase, modification, expansion, rehabilitation and/or improvement of (i) drainage, library, park, landscaping, roadway, traffic, administration and general government facilities, animal shelter facilities, fire and safety, law enforcement and other public facilities of the City, including the foregoing public facilities which are included in the City’s fee programs with respect to such facilities and authorized to be financed under the Mello-Roos Community Facilities Act of 1982, as amended (the “City Facilities”); (ii) water and sewer facilities including the acquisition of capacity in the sewer system and/or water system of the Eastern Municipal Water District which are included in EMWD’s water and sewer capacity and connection fee programs (the “Water District Facilities”) and (iii) interim and permanent school facilities of the Menifee Union School District, including Item Title: 12.1
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classrooms, multi-purpose facilities, administration and auxiliary space at school facilities, athletic fields, playgrounds and recreational facilities and improvements thereto, landscaping, access roadways, drainage, sidewalks and gutters and utility lines, furniture, equipment and technology, including technology upgrades and mobile devices and infrastructure therefore, with a useful life of at least five (5) years at such school facilities (the “School Facilities”) (the City Facilities, the Water Facilities, and the School Facilities shall be referred to as the “Facilities”), and all appurtenances and appurtenant work in connection with the foregoing Facilities, including the cost of engineering, planning, designing, materials testing, coordination, construction staking, construction management and supervision for such Facilities. In addition, incidental expenses include the cost of engineering, planning and designing the Facilities; and all costs including costs of the property owner petitioning to form the District, associated with the creation of the District, the issuance of the bonds, the determination of the amount of special taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the District and any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities.

According to the CFD Report, the Cost Estimate of the eligible facilities are $3,441,017 for City Fees, $5,654,550 for City Facilities, $6,398,657 for Eastern Municipal Water District and $3,279,405 for Menifee Union School District for a total eligible Fees/Improvements estimated at $18,773,629 along with incidental Financing Costs estimated at $2,951,371 for a total estimated Bond Proceeds of $21,725,000. Per the CFD Report, the Assigned Special Tax per developed unit ranges from $2,781 to $3,882 depending on the square footage of the home. The first series of bonds for Menifee CFD 2022- 1 (Series 2023-A) were sold in the amount of $11,525,000 in July 2023. It is the appraiser’s understanding that this is the second and final bond issuance for City of Menifee CFD No. 2022-1. Per the latest sources and uses of funds for the 2024 series of bonds dated June 18, 2024, they are projecting a bond par amount of $9,465,000 along with a premium of $202,260 which includes $8,452,798 of project fund deposits, a debt service reserve fund of $848,825 and costs of issuance and underwriter’s discount of $365,637 (all estimated amounts subject to change). A larger copy of the City of Menifee CFD No. 2022-1 boundary map is located in the Addenda for your review.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 183
Menifee Mayor and City Council August 21, 2024 Page 941 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 24

SUBJECT PROPERTY DESCRIPTION
The subject property consists of 379 proposed single-family homes within the community known as Quartz Ranch being developed by Lennar. The 379 lots are divided among three single-family detached neighborhoods within the Quartz Ranch community:

Meadow Walk, Ridgeline and Canyon View.

Location: South side of La Piedra Road along both sides of Evans Road, Menifee, California
Legal Description: Lots 1-72 of Tract No. 28786; Lots 1-80 of Tract No. 28791; Lots 1- 85 of Tract No. 28792; Lots 1-77 of Tract No. 28793; Lots 1-65 of Tract 28794, all located in City of Menifee, County of Riverside, California.

Owner of Record: Individual owners as to: Lots 1-24, 47-49 and 57-72 of Tract 28786; Lots 1-80 of Tract 28791; Lots 1-2, 21-36, 53-54 and 74-85 of Tract 28792; Lots 1-51 and 60-77 of Tract 28793; and Lots 1-35 and 47- 65 of Tract 28974. Lennar Homes of California, LLC as to: Lots 25- 46, 50-56 of Tract 28786; Lots 3-20, 37-52 and 55-73 of Tract 28792; Lots 52-59 of Tract 28793; and Lots 36-46 of Tract 28794.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 184
Menifee Mayor and City Council August 21, 2024 Page 942 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 25
Three-Year
Sales History: Lennar purchased the 379 lots from Pinehurst LLC in September 2020 for $21,500,000 per public record documents. The property closed in an unimproved condition, with recorded tract maps. Of the 379 proposed homes, 278 homes have closed to individual homebuyers with closing dates between October 18, 2022 and June 14, 2024. As of June 17, 2024, an additional 48 proposed homes are in escrow and due to close upon completion.

Assessor’s Parcel
Numbers: The subject 379 lots encompass Assessor’s Parcel Numbers 360- 890-016 through -034; 360-891-001 through-005; 360-900-001 through -017; 360-901-001 through -020; 360-902-001 through -011; 360-910-001 through -016; 360-911-001 through -013; 360-920-001 through -029; 360-921-001 through -006; 360-922-001; 360-930-001 through -017; 360-931-001 through -038; 360-932-001 through -025; 360-940-001 through -017; 360-941-001 through -006; 360-942-001 through -019; 360-943-001 through -004; 360-950-001 through -017; 360-951-001 through -016; 360-952-001 through -008; 360-953-001 through -012; 360-960-001 through -012; 360-961-001 through -008, -010 through -045; 360-962-001 through -005; and 360-963-001 through -002.

Property Taxes: We have reviewed the Riverside County Tax Collector’s 2023 tax bill for APN 360-902-003, a sample lot within Quartz Ranch. The 2024 tax bill is not available on the County web site at this time. Per the tax collector the total 2023 property tax invoice is $11,828.88 based on an assessed value of $630,741. The general-purpose taxes are $6,307.40; the miscellaneous charges (includes Perris Union HS, Mt.

San Jacinto Jr. College, MWD East, EMWD IMP U-35 and 36, and MWD East 1301999) total $1,111.74; the Special Assessment charges (including the subject CFD 2022-1 Quartz Ranch) total $4,409.74. This calculates to a total tax rate of 1.88 percent. The overall property taxes are anticipated to be in the 1.8 – 2.0 percent range once all of the Menifee 2022-1 bonds are sold. This amount is typical for new homes in the subject market area.

Flood Zone: Per the County of Riverside a flood plain review is not required.

Size and Shape: The neighborhood is irregular in shape and includes 118.882 gross acres and 89.361 net acres per recorded Tract Map Nos. 28786, 28791, 28792, 28793, and 28794. The difference between the gross and net acreage includes internal streets, several linear open space/landscaping lots, surrounding streets and setback areas, and a 5.52-acre park (known as Lot 66) located in Tract 28794, which is not included within the CFD boundary lines.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 185
Menifee Mayor and City Council August 21, 2024 Page 943 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 26
Zoning: Per the City of Menifee Land Use Map, the subject site is shown as the Newport Estates Specific Plan. The Newport Estates Specific Plan was adopted by the Riverside County Board of Supervisors in July of 2001. Per Specific Plan No. 140-W, Amendment No. 2/Substantial Conformance No. 1, the subject lands are a portion of Planning Areas 3 and 4. Planning Areas 3 and 4 are designated for Medium Density Residential with minimum lot sizes of 7,200 square feet with Planning Area 3 allowed for up to 3.3 dwelling units per acre and Planning Area 4 allowed up to 3.9 dwelling units per acre.

Planning Areas 3 and 4 are approved for up to 379 dwelling units per the Specific Plan.

Entitlements: The subject property is covered by Tract Map Nos. 28786, 28791, 28792, 28793, and a portion of 28794. All five tract maps were recorded on November 15, 2018. Three of the 379 lots have a slightly smaller size of just under 7,000 square feet; however, the average lot size within Quartz Ranch is over 9,000 square feet. The maps are detailed in the table below:

Tract No. Gross Ac. Net Ac. No. Lots Density
28786 24.134 18.800 72 3.83
28791 22.425 15.836 80 5.05
28792 23.723 17.207 85 4.94
28793 20.730 16.243 77 4.74
28794 27.870 21.275 65 3.05
Totals 118.882 89.361 379
*The net acreage of Tract No. 28794 also includes a 5.52-acre community park which is not included in the CFD boundary lines.

The 379 total lots over the 118.882 gross acres equates to a density of 3.2 dwelling units per acre which is within the allowed density per the Specific Plan. It should be noted that Tract 28786 and 28794 with the lowest density house the model complex and Canyon View which are the largest sized homes. Copies of the above tract maps are located within the Addenda of this report.

Topography: The original topography was generally level at street grade of surrounding streets (La Piedra and Holland Roads). The terrain is hilly to the southeast of the subject, but the subject land themselves appear to have been generally level. After grading, the lots are at street level of both the surrounding and internal streets. The lands have been graded and developed into single-family detached lots.

Drainage is within an engineered street drainage system with three detention/water quality basins onsite, one adjoining the park site.

Soils Condition: We have reviewed an Update Geotechnical Evaluation for Proposed Residential Development of Pacific Mayfield Project (covering Tract Map Nos. 28786, 28791, 28792, 28793, and 28794) prepared by Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 186
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GeoTek, Inc. and dated February 29, 2016. The report concludes that the proposed development is feasible from a geotechnical standpoint, assuming all recommendations presented in the report are adhered to during construction. It is an assumption of this report that the soils are adequate to support the highest and best use conclusion and that all recommendations made within the soil’s reports were adhered to during construction. This is supported by existing development on the subject lands.

Seismic
Conditions: Per the County of Riverside, the subject is not located in a Fault Zone or in a Liquefaction Area.

Fire Hazard Map: Per the County of Riverside, the subject Is not located in a Fire Hazard Zone.

Environmental
Concerns: We have not received an environmental report to review. The builder and/or their representatives have stated (and this appraisal assumes) that there are no environmental issues that would slow or thwart development of the site. This is supported by existing development on the subject lands which were overseen by City inspectors.

Easements/
Encumbrances: We have reviewed five Preliminary Title Reports on the subject Tract Map Nos. 28786, 28791, 28792, 28793, and 28794 all prepared by Lennar Title. The Reports are dated and numbered as followed: Tract No. 28786 (Canyon View) covered by Order No. 192002-001185 and dated February 23, 2023; Tract No. 28791 (Ridgeline) covered by Order No. 192002-001186 and dated March 7, 2023; Tract No. 28792 (Ridgeline/Meadow Walk) covered by Order No. 192002- 001187 and dated March 7, 2023; Tract No. 28793 (Meadow Walk) covered by Order No. 192002-001188 and dated March 7, 2023; and Tract No. 28794 (Canyon View) covered by Order No. 192002- 001189 and dated February 23, 2023. We have reviewed the title reports and they appear typical for subject-type lands. As a sample we are providing the exceptions from Order No. 192002-001185 dated February 23, 2023, which covers the builder-owned lots within Tract 28786. All five title reports are similar. The exceptions within the sample report are as follows:

Item Nos. 1-2 pertains to property taxes and assessments on the property. Item No. 3 states the property is within EMWD CFD No. 2002-07 which was recorded in 2003 and amended in 2014. Item No. 4 refers to CFD No. U-1 for water and sewer facilities which was recorded in 1990. Item No. 5 states the site is within CFD No. 94-1 for Menifee Union School District which was recorded in 1994. Item No. 6 states the property is within CFD No. 2015-2 (City of Menifee) for maintenance services. Item Nos. 7 and 8 refer to the subject CFD No. 2022-1 recorded on the property in 2022. Item Nos. 9, 12, 14, Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 187
Menifee Mayor and City Council August 21, 2024 Page 945 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 28
20, 21, 22, 23, 24, 25, and 29-39 refer to easements for public utilities, cable, open space, public streets and solar. Item Nos. 10 and 11 refer to a memorandum of understanding between MUSD and a previous landowner (Pinehurst LLC). Item No. 13 refers to a notice of conditional cancellation of special taxes between Perris Union High School District and the Menifee Union School District.

Item No. 15 refers to rights of access to surrounding streets. Item No. 16 is regarding the School Facilities Funding and Mitigation Agreement recorded in 2019. Item No. 17 pertains to water rights.

Item Nos. 18 and 19 refer to water service and a notification of lowpressure water. Item No. 26 refers to CC & Rs recorded on the property in 2022. Item No. 27 pertains to the notice of builder’s election of handling construction claims. Item No. 28 refers to the solar notice CC & Rs. Item No. 40 states no known matters were deleted from the report which would affect the property.

It is an assumption in this appraisal report that the subject lands are free and clear of any liens and/or encumbrances except for Menifee CFD No. 2022-1 and the aforementioned assessments and CFDs.

The appraiser is not a title expert, and it is recommended that any concerns relating to title should be addressed to the appropriate experts.

It is an assumption in this report that the subject property is free and clear of any liens and/or encumbrances with the exception of Menifee CFD No. 2022-1 and the other aforementioned special assessments.

Utilities: All normal utilities serve the subject site by the following companies:
• Electrical: Southern California Edison Company
• Natural Gas: The Gas Company
• Sewer/Water: Eastern Municipal Water District
• Schools: Menifee Union School District /
Perris Union High School District
Streets/Access: Access to the subject is via I-215 to Newport Road, west about 1.4 miles to Evans Road and south 0.5 mile past La Piedra Road and into the Quartz Ranch community.

I-215 is a major Southern California Freeway beginning at the I-15 in Murrieta in Southern Riverside County and providing access north through Riverside and into San Bernardino where it combines with I15 once again.

Newport Road is a major commercial arterial through the City of Menifee with on/off ramps to I-215. West of the Freeway at the City limits Newport Road becomes Railroad Canyon Road providing access into the Cities of Canyon Lake and Lake Elsinore. East of the Freeway Newport Road becomes Domenigoni Parkway and Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 188
Menifee Mayor and City Council August 21, 2024 Page 946 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 29
provides access into the area of Hemet and to Diamond Valley Lake, a large reservoir in Riverside County.

Evans Road is a small north/south access road through central Menifee that starts north of the subject at Newport Road, and runs approximately two miles, terminating south of the subject at Garbani Road.

La Piedra Road is a small east/west access road through central Menifee that starts west of the subject at Murrieta Road, and runs approximately 1.75 miles, terminating east of the subject at Haun Road, near the Menifee Countryside Marketplace.

Internal streets within Quartz Ranch include: Cherry Birch Avenue, Cherry Plum Circle, Painted Daisy Circle, Silver Birch Drive, Canary Palm Circle, Yellow Poplar Circle, Coral Berry Drive, Sycamore Pines Circle, Mountain Ash Circle, Oak Summit Drive, Penny Hedge Drive, Cotch Pine Circle, White Pines Drive, Rodin Circle, Ash Summit Circle, Butte Vista Drive, Noble Fir Drive, Valley Heights Drive, Mesa Vista Drive, Evergreen Crest Circle, Rancho Serena, Douglas Crest Circle, and Evans Road. The models are located at the northwestern corner of the subject on Cherry Plum Circle, near the La Piedra Road entrance via Cherry Birch Avenue.

Current Condition: The subject property has been developed into 379 single-family detached lots. The lots have been graded with streets completed and utilities stubbed to each lot. Two-hundred and seventy-eight of the completed homes have closed to individuals. In addition, there are five completed model homes, an additional 19 production homes are over 95 percent complete, 51 homes under construction (under 95 percent complete) and 26 finished and/or partially finished lots.

Condition of
Approval: It is the appraiser’s understanding that all conditions of approval have been completed and there are no hindrances to stop from the builders from obtaining the 379 certificates of occupancy within the subject property.

Remaining
Costs: The majority of the subject lots are in a physically finished lot condition with estimated remaining hard costs for land development including design planning and engineering, Development Impact Fees, Grading, Wet Utilities, Street Final Cap, Dry Utilities and Parks, Landscaping, Common Area and Walls to be $4,495,296. This does not include any CFD funded fees as we are assuming the 2023 bonds have been funded and accrued to the property. The remaining costs for the subject property of $4,495,296 are associated with all of the builder-owned property or 101 lots (24 homes over 95 percent complete, 51 lots with homes under construction and 26 remaining lots) suggesting an average amount of $44,507.88 per lot in Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 189
Menifee Mayor and City Council August 21, 2024 Page 947 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 30
remaining hard costs for each of the builder-owned parcels. These costs will be taken into consideration in the valuation section later within this report.

HOA Amounts: There is a Homeowner’s Association at Quartz Ranch which maintains the community lighting and landscaping. The HOA monthly assessment will be $27/month per home at build-out within Quartz Ranch (regardless of which neighborhood within the community). Per Lennar’s community website, the current HOA assessment is estimated at $72/month.

Improvement
Description: Quartz Ranch by Lennar includes three neighborhoods known as Meadow Walk, Ridgeline, and Canyon View. Meadow Walk includes five floorplans, featuring one and two-stories, ranging in size from 1,823 to 2,590 square feet. Ridgeline has four floorplans, all single story and ranging in size from 1,950 to 2,767 square feet. Canyon View features the largest homes with four floorplans ranging in size from 2,649 to 4,134 square feet with one- and two-story plans. Within both Ridgeline and Canyon View there is a NextGen home with separate living quarters including a kitchenette, bedroom, bathroom and living space with a separate entrance for multi-generational living. All floorplans across the three neighborhoods offer attached two or three-car garages, concrete tile roofs, roll-up insulated garage doors, gourmet kitchens with granite or slab quartz countertops, interior laundry rooms and primary suites with dual sinks and walk-in closets. Interiors include raised panel interior doors, bullnose corners, tile floors at entry and Shaw vinyl flooring at kitchen, dining, laundry, and bathrooms. Homes include a Honeywell smart thermostat, kitchen islands open to great rooms, stainless steel GE appliances, tankless water heater, LED lighting and drought tolerant front yard landscaping with irrigation system.

Two-hundred and seventy-eight of the 379 proposed homes have closed to individual homebuyers with closing dates between October 18, 2022 and June 14, 2024. Actual sales prices (including premium, upgrades, options, and incentives) within Quartz Ranch ranged from $459,428 to $853,485. There are an additional 48 homes in escrow which are due to close upon completion. Base pricing at project opening in May 2022 ranged from $557,990 to $788,990 with current (or last in terms of Ridgeline) base pricing ranging from $570,990 to $910,760. It should be noted that Lennar is offering concessions, the most popular being an interest rate buydown. Concessions within Quartz Ranch have ranged from $0 to upwards of $100,000 with the average concession per home equating to just over $42,000. The majority of plans have seen a base pricing increase 3.2 to 17.7, while one plan (the largest plan at Ridgeline) has seen a 1.9 percent decrease in base pricing since grand opening. It should be noted that Ridgeline has closed out with the final sale occurring in April 2024 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 190
Menifee Mayor and City Council August 21, 2024 Page 948 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 31
(final model home). The reported base prices for Ridgeline reflect the final base pricing for that community.

Our search of the MLS revealed two closed resales and no current resale listings within Quartz Ranch. Our physical search noted all homes appeared to be in excellent condition. The plans are detailed below.
*One of each of these plans is a model home. NG stands for NextGen, representing a floorplan that features a first-floor suite with separate entrance, kitchenette and living area. There are an additional 51 homes under construction, and 26 additional finished lots that are all owned by Lennar (not shown on the above table).

Quartz Ranch by Lennar
Plan Bd/Ba
Floors/
Parking Sq. Ft.

Ind.

Owned
Bldr.

Owned
Meadow Walk
1 3 / 2.5 2 / 2 1,823 17 2
2 3 / 2 1 / 2 1,950 16 3*
3 4 / 3 2 / 2 2,203 19 2*
4 4 / 3 2 / 2 2,419 18 3*
5 4 / 3 2 / 2 2,590 18 1
Subtotal Meadow Walk: 88 11
Ridgeline
1 3 / 2 1 / 2 1,950 26 0
2 3 / 2 1 / 3 2,287 22 0
3 (NG) 4 / 3 1 / 3 2,434 23 0
4 4 / 3.5 1 / 2 2,767 25 0
Subtotal Ridgeline: 96 0
Canyon View
1 4 / 3.5 2 / 3 2,649 23 3
2 4 / 3.5 1 / 2 2,767 23 3
3 4 / 2.5 2 / 2 2,809 26 3*
4 (NG) 6 / 4.5 2 / 3 4,134 22 4*
Subtotal Canyon View: 94 13
Total Quartz Ranch 278 24
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 191
Menifee Mayor and City Council August 21, 2024 Page 949 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 32

RIVERSIDE COUNTY HOUSING MARKET
In analyzing the County’s housing market, population growth and economic conditions need to first be considered.

Population
The County population grew 0.6 percent between January 2023 and January 2024 (per the Department of Finance). This compares to an average annual growth rate over the past ten years of about 0.8 percent, and an average annual growth rate of approximately

2.5 percent for the previous eighteen-year period. Predictions are for the County to grow at an average annual rate of 0.6 percent over the next six years. This equates to an increase of approximately 15,000 residents per year, suggesting the need for about 5,500 homes per year within the County. Due to the impact of COVID, new home sales in most cities in the County in 2020 through 2022 were higher than the coastal communities due to affordability, the work from home factor, and the fact that millennials are finally entering the housing market.

Economic Conditions
Over the past twenty-five years the Inland Empire has seen various cycles in the housing market. The Great Recession impacted the Inland Empire significantly and resulted in a longer recovery period than that of other Southern California regions. The rise and then fall of housing prices in the Inland Empire between 2004 and 2009 were considerably steeper than almost anywhere in the State. Unfortunately, this meant that the people who bought near the peak of the market likely faced significant negative equity. After essentially remaining flat for a few years, housing prices began to increase in late 2012 through January 2020. Once the COVID pandemic hit in March 2020, the economy entered what is now known as the COVID disruption. The housing market slowed down significantly early on, but by May 2020, new homes were going under contract and selling at well above average absorption rates from May 2020 through Spring of 2022 in the region. Beginning in mid-2022, the new home market saw a slowdown in absorption rates due to the increasing interest rates, the high prices of homes, and the high rate of inflation which was shaking consumer confidence.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 192
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Economic growth in the Inland Empire was strong generally between 2015 (after the Great Recession), and until the economic shutdown due to COVID. The second half of 2020 and all of 2021 saw economic growth, however the first two quarters of 2022 saw GDP shrinking. The most recent unemployment rate for the County is 4.9 percent (per the April 2024 EDD report). The end of 2022 saw lower unemployment rates than the County’s pre-COVID unemployment rate in February 2020 of 4.0 percent, however 2023 saw unemployment rising from 3.6 to a high of 5.5 percent. Thus far in 2024, unemployment has decreased about one-half percent. While unemployment rates are still near historical lows, the inflation factor has significantly affected the economy.

The housing market played a large role in the past two recessions. In the Great Recession, due to increased interest rates and rising home prices between June 2004 and mid-2006, the market reaction was to create non-conventional financing alternatives, such as sub-prime and non-conventional mortgages, to artificially maintain the boom housing market of 2004 and 2005. By 2007, the housing market saw a shake-up because of the problems in the sub-prime and non-conventional mortgage markets, which played a role in the 2008 upheaval of Wall Street and contributed significantly to the U.S. economic downturn of the Great Recession. Due to stricter income verification on new loans and the lack of available credit, coupled with job losses and declining home prices, sales of new homes slowed for the next few years and essentially remained flat until mid2012 when home prices began a steady climb.

During the COVID disruption, new home sales were one of the brightest spots in both the local and national economies. While new home sales slowed in March and April 2020 due to the onset of the COVID pandemic, both sales and prices increased significantly due to strong demand from May 2020 throughout COVID until spring 2022 when interest rate increases began affecting the home-buying market. The rising interest rates alone did not seem to slow sales in Spring 2022. However, a combination of increasing home prices and falling consumer confidence, added to the significant interest rate increases, slowed new home sales significantly beginning in mid-2022. Due to the significantly higher mortgage interest rates, existing homeowners are not moving which has stifled the existing home market, making the new home market the only option for some. In January Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 193
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2022 mortgage rates were 3.22 percent (for a typical 30-year fixed conventional mortgage) while as of June 18, 2024, the rate for the same loan is 6.95 percent. On a $600,000 mortgage, the monthly payment for this loan has increased from $2,594 to $3,949 or over 52 percent.

Per the Zonda National Economic and Housing Market Update in March 2024, the rate of growth of new home sales is off from COVID highs but up from 2022 sales numbers, suggesting a healthy market. Per their survey of over 300 new-home builders nationally, the builders are stating sales are continuing but report they had to adjust pricing and incentives to “find the market.” In the January 2023 survey, 50 percent of builders surveyed were lowering their prices and the remaining 50 percent stated their pricing was flat. In March 2024, the survey resulted in 50 percent of the builders stating their pricing was increasing a little, 46 percent of builders stating their pricing was flat and 4 percent dropping prices. This is a very different dynamic than in January 2023 which was partly due to builder’s readjusting concessions (interest rate buy-downs), and partly due to the market accepting the mortgage rate increases. In today’s market, over 60 percent of newhome builders in the U.S. are offering either full-term or temporary interest rate buy-downs (John Burns Research and Consulting) which is helping to sustain new home sales. Per Zonda, in March 2024, 80 percent of new home builders in the Inland Empire are offering incentives.

The larger public homebuilders began offering significant interest rate buy-downs in early 2023 in order to keep absorption rates steady, which reportedly cost between $30,000 and $100,000 in incentives. The builders are attempting to find the “sweet spot” in incentives. In their September 2023 survey of 300 builders nationwide, Zonda asked builders to check all that they were offering and found 70 percent of builders surveyed were offering rate buydowns, 60 percent were offering funds towards closing costs, 33 percent were offering flex dollars, 22 percent were offering lower home prices and 20 percent were offering funds toward options and upgrades. The question is, how long can builders continue to offer these significant incentives. As rates go higher, the extent that builders can buy-down the mortgage rates goes down. In the April 2024 Zonda survey, Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 194
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61 percent of builders surveyed stated demand was higher than or on-track with expectations, however 39 percent stated demand was slower than anticipated.

Home loan mortgage rates have been and are still playing a huge part in the housing market. The Board held mortgage rates at all-time lows after the Great Recession and again after the COVID Recession in an attempt to assist the housing market’s recovery.

Low rates helped home sales during this time. However, first-time buyers are now having a hard time entering the housing market due to rising prices and rising interest rates.

Mortgage applications had been spiking in late 2020 and 2021 due to the low rates and the fear rates were going to start ticking up, which began happening in March 2022. The Board has increased the rate eleven times between March 2022 and August 2023, which increased the FFR from 0-0.25 percent to 5.25-5.50 percent. At the latest Board meeting in June 2024, they paused the FFR increases for the sixth time and suggested a possible decrease later in the year. The financial markets had been anticipating a possible March 2024 decrease which caused volatility in the financial markets. The FFR increases are supposed to help slow the high inflation rate in the Nation, which appears to be occurring as the latest reports are showing inflation in April 2024 at 3.4 percent, significantly down from a high of 9.1 percent in June 2022 however higher than recent readings.

While new home builders slowed production as sales slowed in 2022, the spring of 2023 brought optimism to builders once again. Sales were up month over month as buyers adjusted to higher mortgage rates and the existing home inventory is at all-time lows.

Existing homeowners that are locked into an under-four percent mortgage are not moving up due to the current seven percent rates. This is creating a supply issue for existing homes. New home sales are benefiting from this supply issue as in some cases, the only option for homebuyers are new homes. Per Zonda, historically, new homes captured 10 to 13 percent of all home sales; however, due to the limited supply of existing homes currently on the market, new homes are capturing closer to 25 percent of all home sales in the Inland Empire.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 195
Menifee Mayor and City Council August 21, 2024 Page 953 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 36
Residential Land Development
While there had been little land development going on in most of the Inland Empire during the Great Recession years 2008-2011, the second half of 2012 saw a resurgence in the more coveted areas of the Inland Empire. The increase in housing prices since 2012 combined with the limited availability of supply made land development feasible once again for homebuilders. It is thought that the increase in regulations, which has significantly increased the timeline for processing entitlements, has limited the master developers’ further entitlement of developable land in California. While prior to the recession it was not unusual to see numerous large master-planned communities selling lots to various builders, there are few currently available in the subject area with the new Legado the only master plan currently available to sell to various builders in the area. The majority of land sales over the past few years include single tracts of land with maps ready to record or a public builder purchasing a larger piece of land but develops the land for its own use such as Quartz Ranch by Lennar (subject property).

Land sales in the Inland Empire slowly grew from 2012 up to a peak in 2017, with 2018 and 2019 showing lower land transactions. Once home sales exploded in May 2020, land sales followed with a significant number of residential land sales to builders in the Inland Empire during the second half of 2020 and throughout 2021. In late 2021 and early 2022, prior to the FFR increases, builders were paying significantly more for residential land that was ready to develop as demand was up and supply was shrinking. The beginning of 2022 continued with residential land sales going under contract until May, when new home sales began to fall sharply. According to Zonda’s survey of builders regarding residential land purchases, as of January 2023 only 2 percent of builders surveyed were “full steam ahead,” and almost 40 percent were pausing transactions or bidding lower on land transactions. As of March 2024, these percentages had changed drastically with 49 percent stating they are going “full steam ahead” and 46 percent moving “cautiously forward.” The increase in optimism from new home builders outlook is partially due to the extreme slowdown of existing home inventory which is fueling new home sales. Per Zonda in the first quarter 2024 there were about 11,478 vacant developed lots in the Inland Empire, which is down 23 percent from the previous year.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 196
Menifee Mayor and City Council August 21, 2024 Page 954 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 37
New Home Sales and Pricing
We have researched new single-family homes within the subject’s market in order to reflect residential trends. It should be noted these sales numbers and prices pertain to new home sales while later in this section we discuss existing home sales. In reviewing new home sales in the Inland Empire market area, per the June 9, 2024, Ryness Report, the year-to-date average sales rate (4.20 sales per month) is about three percent higher than the same time period of the previous year (4.07 sales per month). Surprisingly, even with the increases in pricing and mortgage rates, sales of new homes are occurring at a very good pace; however, this is partially due to the extremely limited supply of existing homes which is creating more demand for new homes. New home sales rates started to level off in late Spring 2022, likely due to the increase in mortgage interest rates; however, with the limited existing homes on the market, new homes are enjoying a boost. One negative is that as interest rates rise, purchasing power becomes lower and therefore fewer people purchase new homes and amenities. Along with home sales comes a demand for appliances, furniture, building materials and services such as insurance, mortgage services, inspections, interior designers, and landscapers, all contributing to the area economy.

When comparing the June 9, 2024, Inland Empire Ryness Report to one year prior, there are 16 fewer projects (251 in June 2023 and 235 in June 2024) and sales are about three percent higher year-to-date than the previous year at 4.2 sales per month. Looking back, in 2023 the average sales rate per project in the Inland Empire was 3.6 sales per month with 2022 at 3.2 sales per month, 2021 at 4.5 homes per month, 2020 at 4.3 homes per month while in 2019, prior to COVID, the average sales rate was 3.3 homes per month per project. Per Zonda’s May 2024 Market Report on the Inland Empire, the 12-month annualized average new home sales rate is outpacing both that of California and of the U.S.

New single-family home pricing (combines both attached and detached) in the Inland Empire has also seen changes. The median new home price in the Inland Empire changed from the peak value of $437,200 in the third quarter of 2006 to $268,155 in early 2009 (during the Great Recession, a decrease of 39 percent) while the current Inland Empire median new home price is $598,490 which is down from a record high of $650,000 in May 2022 per the California Association of Realtors’ latest market report. The current Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 197
Menifee Mayor and City Council August 21, 2024 Page 955 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 38
median price reflects an increase of over 100 percent from the bottom of the cycle and an increase of almost 37 percent over its peak during the Great Recession, however a decrease from the 2022 peak of almost eight percent. In reality, this decrease is actually larger as builders are buying down interest rates which costs the builder, at times, up to $100,000, however, the amount is not reflected in the recorded sales price. New home sales prices fluctuate based on the land value and competition more than on the cost of building the home. While finishes and sizes of homes can change, the basic costs on a per square foot basis typically do not fluctuate as much as land values; however, there have been inflationary increases in construction costs adding to this increase.

Construction materials have increased an estimated 40 percent since 2019.

Within our search for the most comparable actively selling new home communities, we searched the subject’s city of Menifee, which has a multitude of actively selling new homes communities. Because the City currently holds so many new communities, we focused on those with the most similar product and that were nearest in proximity to the subject. Our search for similar new home projects to the subject area resulted in 14 new home projects (including the subject’s three product lines) with base pricing ranging from $546,990 to $910,760, with the majority of base pricing in the $590,000 to $750,000 range. The subject’s most recent base pricing falls within the comparables price range, with the majority of the floorplans falling in the low to mid-range and the largest floorplan making up the top end of the range.

Existing Homes Sales and Pricing
While the previous section looked at new home sales and pricing, this section refers to existing homes in the Inland Empire. According to the California Association of Realtors’ most recent sales data, within overall Southern California, the median price paid for an existing single-family home in May 2024 ($880,000) reflects an increase of ten percent from the previous year ($800,000 in May 2023) and the same as the previous month.

Existing home sales in Southern California overall were down one percent year-over-year as of May 2024, however up 8.9 percent from the previous month. The overall Southern California numbers compare to Riverside County with $650,000 as the median price paid for an existing home in the County in May 2024, the same as the previous month and up

3.3 percent from one year ago. Sales of existing homes in the County were up 4.4 percent Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 198
Menifee Mayor and City Council August 21, 2024 Page 956 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 39
month-over-month and down 7.7 percent year-over-year due to limited inventory, higher mortgage rates, and high home prices. Sales slowed significantly for existing homes in 2022 and 2023 reflecting homeowners not ready to sell due to the changing market. Thus far in 2024 existing home sales have risen, however are still below historical averages.

Historically, the new home market captures 10-13 percent of the overall home sales; however, in the past year, new home sales are capturing about 25 percent of total home sales. Below is a table showing the sales and prices for the Southern California area by County per the California Association of Realtors.

Southern California Existing Home Sales
County May 2024 Apr. 2024 May 2023
Price MTM
% Change
Price YTY
% Change
Sales YTY
% Change
Los Angeles $811,610 $825,970 $744,770 (1.7%) 9.0% (2.6%) Orange $1,422,500 $1,440,000 $1,256,500 (1.2%) 13.2% 12.2% Riverside $650,000 $650,000 $629,000 0.0% 3.3% (7.7%)
San Bernardino $488,900 $516,080 $455,000 (5.3% 7.5% (2.2%) San Diego $1,025,000 $1,047,500 $935,000 (2.1%) 9.6% 0.7% Ventura $925,000 $940,000 $925,500 (1.6%) (0.1%) (2.1%) Southern Calif. $880,000 $880,000 $800,000 0.0% 10.0% (1.0%) Source: California Association of Realtors
It is interesting to note that all Southern California Counties have had prices either stay the same or decrease since last month. This may be signaling that pricing has hit the peak at this time. Based on May 2024 median existing homes prices, in comparison to the majority of the surrounding counties, Riverside County has a definite price advantage.

The “Riverside County Advantage” (price difference between Riverside and surrounding counties) is $161,610 as compared to Los Angeles County, $275,000 as compared to Ventura County, $375,000 as compared to San Diego County and $772,500 as compared to Orange County. That is, in May 2024, the median priced home in Riverside County was $772,500 less (or over 50 percent less) than the median priced home in Orange County ($1,422,500). However, San Bernardino County has a $161,100 price advantage over Riverside County. Typically, as the price advantage widens, homebuyers are more open to commuting to further out areas. With the work-from-home concept, the suburban areas have seen more growth which put pressure on home prices in the Inland Empire.

It’s worth noting that the majority of Southern California counties showed median price decreases from the previous month suggesting that pricing may have peaked.

In a separate attempt to capture the neighborhood specific price changes, the resale activity of existing homes in the subject area (per Redfin.com’s Housing Market Trends) Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 199
Menifee Mayor and City Council August 21, 2024 Page 957 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 40
has been reviewed. The number of sales and sale prices of existing homes within market areas in the immediate area of the subject are shown in the table below.

ZIP Code/Community
Name
Border
To
Subject
Sales of
Homes
May
2024
Sales %
Change
from
May 2023
May 2024
Price
Median
Price %
Change
from May
2023
May
2024
PSF
Median
92584 (Subject ZIP) Subject 189 (14.1%) $622,000 5.4% $281 92586 (Sun City) North 135 7.1% $408,000 11.3% $290
92587 (Canyon Lake) Northwest 70 2.9% $650,000 1.1% $344 92532 (Lake Elsinore) West 92 21.0% $625,500 7.8% $272
92596 (Winchester) East 224 55.0% $623,750 3.9% $277
92563 (Murrieta Hot Springs) Southeast 191 (11.6%) $695,000 8.2% $290 92595 (Wildomar) Southwest 89 27.1% $655,000 7.4% $285
92562 (Murrieta/La Cresta) South 210 1.4% $652,000 1.2% $331 Source: Redfin.com Housing Market Trends May 2024
The median price of a detached resale home in the subject’s market area is $622,000, which is mid-way in the range of average resale detached home prices in the subject’s surrounding area. The above price fluctuations from year to year relate to the California Association of Realtors overall Riverside County detached home resale price increase of

3.3 percent year-over-year and 7.7 percent sales decrease from May 2023 to May 2024.

Quartz Ranch Sales, Pricing and Competition
Quartz Ranch opened for sale in June 2022 with opening base pricing ranging from $557,990 to $788,990. The current (or final) base pricing at Quartz Ranch ranges from $570,990 to $910,760, with all but one floorplan showing a base price increase since grand opening. Within Meadow Walk and Canyon View, base pricing has increased from

3.4 to 17.7 percent, or $19,500 to $121,770. Base pricing at Ridgeline increased from 3.2 to 8.5 percent ($20,000 to $54,000) on three floorplans and decreased 1.9 percent ($11,000) on its smallest floorplan. The largest floorplan of all three commuunities (Plan 4 at Canyon View) has seen the most significant dollar increase with a $121,770 base price increase since grand opening. It is important to note that the vast majority of the homes within Quartz Ranch are closing with significant incentives, which are common in today’s marketplace. Actual closed prices, including options, upgrades, and premiums, along with taking all concessions into consideration, have ranged from $459,428 to $853,485. Within the subject, Lennar has closed 278 homes to individuals between October 18, 2022, and June 17, 2024, with an additional 48 homes in escrow which are due to close upon completion. While the community grand opened in June 2022, the first Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 200
Menifee Mayor and City Council August 21, 2024 Page 958 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 41
contract was written in May 2022 with the most recent sale in June 2024. The total of 326 sales equates to an average overall absorption rate of 13.6 homes per month. When looking at each product line individually, the absorption is: 4.7 homes per month for Meadow Walk; 4.8 homes per month for Ridgeline (which sold out in February 2024); and

4.9 homes per month for Canyon View. These are considered to be excellent absorption rates for the subject marketplace, all slightly higher than the Inland Empire’s overall average sales rate (4.2 sales per month). According to the Ryness Report dated June 9, 2024, there are currently 49 new home projects in the South Riverside submarket which includes the communities of Winchester, Menifee, Wildomar, Lake Elsinore and the French Valley. The 49 projects include 18 projects within Menifee. The average absorption rate within the 49 South Riverside communities’ year to date per the June 9, 2024 Ryness Report is 4.6 sales per month. The subject sales rates in the 4.7 to 4.9 sales per month range compares favorably to the overall average in the area.

Summary
Riverside County has seen a substantial increase in pricing since 2012 with most areas, including the subject, showing astronomical increases from Mid-2020 through early 2022.

While existing home sales were originally down when COVID began in spring/early summer 2020, new home sales subsequently shot up due to the existing home market supply being constrained and interest rates hitting all-time lows. The latest statistics suggest a possible slowdown in sales as interest rates have risen substantially; however, buyers appear to be resilient to the increases. The subject market area saw an increase in pricing consistent with most of Southern California over the past few years. While sales slowed and prices softened in late 2022 and early 2023, the past year there has been price increases as builders offered incentives. Builders’ optimism appears to have returned with the majority of builders generally believing prices will increase slightly in 2024 or remain flat. Despite uncertainty hitting the market due to interest rates and inflation, most observers agree that the Inland Empire housing market is healthy and population growth is still estimated to occur in the area. It is believed that as the population continues to increase, housing growth will also continue, despite a possible economic slowdown.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 201
Menifee Mayor and City Council August 21, 2024 Page 959 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 42

HIGHEST AND BEST USE ANALYSIS
The highest and best use is a basic concept in real estate valuation due to the fact that it represents the underlying premise (i.e., land use) upon which the estimate of value is based. In this report, the highest and best use is defined as:
"the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value”4F
4 Proper application of this analysis requires the subject properties to first be considered “As If Vacant” in order to identify the “ideal” improvements in terms of use, size and timing of development. The existing improvements (if any) are then compared to the “ideal” improvements to determine if the use should be continued, altered or demolished preparatory to redevelopment of the site with a more productive or ideal use. “As If Vacant”
In the following analysis, we have considered the sites probable uses, or those uses which are physically possible; the legality of use, or those uses which are allowed by zoning or deed restrictions; the financially feasible uses, or those uses which generate a positive return on investment; and the maximally productive uses, or those probable permissible uses which combine to give the owner of the land the highest net return on value in the foreseeable future.

Physically Possible Uses
The subject property consists of 118.882 gross acres in an irregular shaped parcel on the south side of La Piedra Road at Evans Road in Menifee. The site has good access from I-215 via Newport Road. The site was generally level at street grade of both La Piedra and Evans Roads, which are both paved. The site has been graded and developed into 379 generally level, mostly finished lots with internal streets nearing completion with utilities being stubbed to each lot. The property is surrounded by existing homes, rural housing, and vacant lands. Evans Ranch Elementary School and Menifee Preschool are located north of the subject across La Piedra Road. We have reviewed a geotechnical 4 The Appraisal of Real Estate, 11th Edition
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 202
Menifee Mayor and City Council August 21, 2024 Page 960 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 43
report which concluded development of the site for residential use was feasible from a geotechnical standpoint if all recommendations were adhered to. We have not received any environmental reports for our review. It is an assumption of this report that the soils are adequate to support the highest and best use conclusion and that there are no environmental issues which would slow or thwart development of the site. This is evidenced by City approvals along with City inspectors on site during construction. There is a 5.52-acre park in the northern portion of the community which is not included in the subject boundary lines. An engineered drainage system appears to have been designed to alleviate any potential flooding problems and to control project water runoff. All standard utilities serve the subject property. The site has good access via I-215 to Newport Road, west to Evans Road and south to the subject property or via I-15 to Railroad Canyon Road (turns into Newport Road) and east to Evans Road, south to the subject. There is currently neighborhood shopping and major shopping centers within two miles of the subject site.

Based on the physical analysis, the size, access, and topography make the subject property physically suited for numerous types of development; however, the grading and development that has occurred on the site along with the surrounding uses, suggests single-family residential use.

Legality of Use
The subject property is located within the City of Menifee, the entity responsible for land use and zoning regulation. Per the City’s Land Use Map, the subject site is designated as part of the Newport Estates Specific Plan. Per the Newport Estates Specific Plan, the subject lands are a portion of Planning Areas 3 and 4, which are designated as Medium Density Residential with minimum 7,200 square foot lots. Recorded Tract Map Nos. 28786, 28791, 28792, 28793, and 28794 subdivide the subject 118.872 gross acres into 379 single-family lots with a minimum lot size of 7,200 square feet. This equates to a density of 3.188 dwelling units per acre. The approved mapping is also consistent with the current Specific Plan entitlements on the property. There is a limitation on the number of building permits which can be issued prior to the builder turning over the neighborhood park to the City. It is an extraordinary assumption of this report that this limitation does not slow or thwart construction or sales of the homes as discussed under the property Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 203
Menifee Mayor and City Council August 21, 2024 Page 961 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 44
description section. Based on the legality of use analysis, the type of development for which the subject properties can be utilized is narrowed to residential use. This is consistent with the findings of the physically possible uses.

Feasibility of Development
The third and fourth considerations in the highest and best use analysis are economic in nature, i.e., the use that can be expected to be most profitable. As discussed under the Riverside County Housing Market section earlier within this report, the market had shown strong increases in both sales and pricing since COVID until late 2022 when high home prices and increasing interest rates began to slow sales. Overall home sales have slowed down significantly, partially due to existing homeowners not moving due to the higher interest rates, which is stifling the existing home market, at times leaving new homes the only option for homebuyers.

Within Menifee CFD No. 2022-1, out of 379 proposed houses, there have been 326 home sales to date including 278 home closings. All structures appear to be in excellent condition with no physical depreciation apparent. Within the new home market in Menifee, we found 11 additional projects to be comparable to the subject properties. Homebuilding had not been able to keep up with the demand during COVID with low interest rates, millennials joining the home buying market and the work from home factor all adding to the demand. As interest rates increased, the market softened, however the limited supply of existing homes on the market has increased the capture of new homes in the overall real estate market. The Menifee housing market is priced slightly higher when compared to the nearby cities of Sun City and Lake Elsinore, however lower than Murrieta and Temecula (adjoining north San Diego County). Population growth is still occurring in the area and will continue to create the need for housing. Our search of the Menifee area for comparable land sales resulted in seven land sales plus two active escrows within Menifee area marketplace in the past 12 months, including neighboring Winchester, Murrieta, and Temecula.

Based on the above analysis, the highest and best use for the subject property appears to be for single-family detached residential development at the right price points.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 204
Menifee Mayor and City Council August 21, 2024 Page 962 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 45
Maximum Productivity
Based on the market activity of residential lands in the immediate area, we have concluded there is a need/demand for residential lands.

Highest and Best Use Conclusion – “As If Vacant”
The final determinant of highest and best use, as vacant, is the interaction of the previously discussed factors (i.e., physical, legal, financial feasibility and maximum productivity considerations). Based upon the foregoing analysis, it is our opinion that the highest and best use for the subject property “As if Vacant” is for residential development.

Highest and Best Use – “As Improved”
The subject property consists of the community known as Quartz Ranch which has three neighborhoods known as Meadow Walk, Ridgeline, and Canyon View, all being built, marketed, and sold by Lennar. Quartz Ranch opened for sale in June 2022 and has sold 326 homes resulting in a total combined sales rate over the three projects of 13.6 sales per month. When reviewing each neighborhood, Meadow Walk has sold 113 homes suggesting an average sales rate of 4.7 homes per month. Ridgeline has sold all 96 homes, selling the last one in February of this year for an average sales rate of 4.8 sales per month. Canyon View has sold 117 homes to date suggesting an average sales rate of 4.9 homes per month. There are 49 actively marketing new home communities in the subject’s South Riverside submarket (18 of those within Menifee) that have a year-to-date average absorption rate of 4.6 sales per month (according to the Ryness Report dated June 9, 2024). All three projects have higher than average sales rates than the overall market area. When comparing the subject project’s sales rates of 4.7, 4.8 and 4.9 home sales per month to the overall Inland Empire, the average sales rate is 4.2 sales per month, lower than all three of the subject projects. It appears all three neighborhoods have been well received and are selling at or near the correct price points for the area.

Our search within the subject area found 11 additional projects considered to be comparable with similar sized homes in the Menifee area. The sales rates within the comparable projects range from 2.5 to 5.2 sales per month.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 205
Menifee Mayor and City Council August 21, 2024 Page 963 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 46
Base pricing within the three neighborhoods within Quartz Ranch have had price adjustments since opening, with all but one floorplan showing significant price increases.

Within Meadow Walk (the smallest homes and generally least expensive homes), prices have increased 3.6 to 5.4 percent, or $19,500 to $30,290 per plan. At Ridgeline (midrange sizes), the smallest plan actually decreased 1.9 percent ($11,000) in base price since opening, but the three larger plans have increased between 3.2 to 8.5 percent, or $20,000 to $54,000 per plan. Within Canyon View (generally larger and more expensive homes), all four plans have increased in base pricing since opening, from 10.7 to 17.7 percent, or $68,825 to $121,770. While base pricing has generally seen significant increases since opening base pricing, the seller is offering incentives which typically includes a buy-down of the interest rate that ranges from $0 to $118,266 within Quartz Ranch with the average incentive just over $43,000 per home. This is typical for public builders in the Inland Empire as they attempt to keep their absorption rates up as the interest rates have increased.

The sales rate within the subject and the competitive projects in the immediate area suggest there is demand for new homes in the current market at the right price points.

All of the homes are of good design and appear to be of good quality workmanship. In addition there are a significant number of homes in escrow. Based on Quartz Ranch’s sales rates, it is our conclusion that the highest and best use for the subject property is for the continued use, as improved.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 206
Menifee Mayor and City Council August 21, 2024 Page 964 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 47

VALUATION ANALYSIS AND CONCLUSIONS
The Sales Comparison Approach will be used to value the subject property. This approach compares similar properties that have recently sold or are in escrow. In determining the value for the property, a unit of comparison needs to be addressed. For single-family detached lots, the lots are typically sold on a finished lot basis. That is, the sales price is determined by a finished lot value and then the remaining costs to develop the property to a finished lot condition are considered in the sales price. Therefore, in determining a current market value for the residential lands, the current condition of the lots will be considered. In the case of the existing home valuations, a single home sale is the unit of comparison. In determining the value for each existing house, a base value will be concluded for each plan which will be considered a minimum market value as most buyers typically purchase some premiums, upgrades or options which increase the price of the home.

The valuation will be presented as follows. First, a discussion of the single-family detached lot market data will be given. Each of the comparable market data (on a finished lot basis) will be detailed along with a comparison discussion of their relationship to the subject property. The remaining construction costs and development fees for the subject site will be taken into consideration. This analysis will be followed by a finished lot value conclusion for the subject property. Houses which are under construction (under 95 percent complete) will be valued on the basis of a finished lot rather than attribute value to a partially complete improvement. In the case of the completed (over 95 percent complete) builder-owned models and production units, the homes will be valued using the Sales Comparison Approach to value to conclude on a retail base value for each plan, followed by a Discounted Cash Flow (“DCF”) Analysis due to the “bulk” or single ownership. The DCF will consider the fair market value of the completed homes (utilizing the Sales Comparison Approach), any remaining land development costs and fees, the marketing and carrying costs associated with selling off the homes, a profit due to the developer of the homes, and a discount rate reflecting both the risk associated with selling off the homes along with the time value of money during the estimated absorption period.

In the case of the individually owned homes, a concluded base value will be used for each Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 207
Menifee Mayor and City Council August 21, 2024 Page 965 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 48
plan and a mass appraisal technique will be addressed. In determining the concluded base value, new home sales in the area will be reviewed and compared with sales of the subject completed homes using standard methodology and statistical testing. In addition, resales, if any, will be taken into consideration. All of the value conclusions will take into consideration improvements funded by the Menifee CFD No. 2022-1 Special Tax Bonds and their lien. A summary of the final value conclusions will be reported at the end of this valuation section.

Market Data Discussion – Detached Residential Lots
Quartz Ranch consists of 278 individually owned homes, five model homes, 19 production homes over 95 complete (all in escrow), 51 homes under construction (under 95 percent complete, 29 in escrow) and 26 remaining lots which are either in a finished condition or in a nearly finished condition. Three lots have a minimum square footage of 6,970 square feet while the rest are 7,200 square foot minimum lot size with the average lot size within the Quartz Ranch over 9,000 square feet. The homes under construction (under 95 percent complete) will be valued on the basis of a finished lot rather than attribute value to a partially completed improvement, therefore, we will value 77 lots (26 lots plus 51 lots with homes under construction that are under 95 percent complete). We have searched the area and found the nine land transactions summarized in the Addenda. A discussion of each in relation to the subject site is below.

Land Sale No. 1 refers to the most recent closed residential land transaction in the area.

Meritage Homes purchased the SEC of Grand Avenue and Leon Road in Winchester in April 2024 for $10,293,500 or $45,953 per lot based on an estimated finished lot price of $205,000. The lands are located about 5.5 miles northeast of the subject in the unincorporated area of Winchester and were unimproved at time of sale with final engineering in process. The 224 lots range in size from a 4,000 square foot minimum to 5,000 square foot minimum to 10,000 square foot minimum. The reported price is a blended price for all three lot sizes. In comparison to the subject property the majority of these lots are considered inferior in size and the location is considered to be inferior. The subject lots are located in the City of Menifee while this location in Winchester is further out for commuters and is in a less developed area.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 208
Menifee Mayor and City Council August 21, 2024 Page 966 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 49
Land Sale No. 2 is located about four miles north of the subject at the southeast corner of Rouse Road and Encanto Drive just east of I-215 in Menifee. The site is also known as Phase 1 of Legado, a large master planned community which has been in the planning stages for over ten years. Lennar purchased the 491 lots with minimum 5,000 square feet and minimum 7,000 square feet in March 2024 for $22,500,000 or for around $45,825 per lot based on a blended finished lot in the $240,000 range. This site had been graded at time of sale and had an approved final map. In comparison to the subject property, the lot size is slightly smaller, and this location is considered to be slightly inferior as it is a bit further out for commuters. In addition, the number of lots in this transaction (491) is considered a bulk sale as builders typically purchase between 150 and 250 lots in a transaction which makes it inferior to the subject also.

Land Sale No. 3 refers to the purchase of 197 single-family detached lots with a minimum lot size of 6,000 square feet located about 3.5 miles east of the subject site along the south side of Domenigoni Parkway at Lindenberger Road in Menifee. Pulte purchased the site from Diamond Brothers Five in January 2024 for $8,500,000 or $43,147 per lot based on an estimated finished lot price of $240,000. The site closed with a recorded final map in an unimproved condition. Pulte is nearing sell-out of their successful Banner Park community which is located just north of this site. In comparison to the subject property, this site is considered to be slightly inferior in location (further out for commuters) and inferior in condition as the subject lots are physically finished. While the costs of development are considered in the comparison, the risk of development is not.

Land Sale No. 4 is the closest comparable to the subject as it is located about one mile northeast of the subject in Menifee at the southwest corner of Bradley Road and Boynton Lane. Richmond American purchased the 198 lots in December 2023 for $22,077,500 or $111,502 per lot based on an estimated finished lot price of $225,000. The lots have a 3,000 square foot minimum, which is substantially smaller than the subject’s average 9,000 square foot lots. This is an infill site within Menifee which was purchased in an unimproved condition, however surrounding streets are in place making finishing costs lower than typical. In comparison to the subject property this site is considered to be significantly inferior due to lot size.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 209
Menifee Mayor and City Council August 21, 2024 Page 967 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 50
Land Sale No. 5 refers to the sale of a property located in Temecula about 10 miles south of the subject known as Prado at Date Street and Temecula Center Drive. Meritage Homes purchased the site which is mapped for 237 small lots (minimum 3,000 square feet) in August 2023 for $37,000,000 or $156,118 per lot based on an estimated finished lot price of $255,000. This is located within Planning Area 12 of the successful Harveston Specific Plan which was formerly designated as service commercial however amended in 2020 to have a residential overlay on the site. In addition, an approved final map was processed on the site for 237 lots with a minimum lot size of 3,000 square feet. The site had been mass graded in 2003 (at time of the original approvals for the Specific Plan). In comparison to the subject site this transaction is considered to be significantly inferior in lot size, however slightly superior in location (Temecula versus Menifee). Per Redfin Market Trends, the May 2024, median home price in Temecula was $725,000 or 25 percent higher than the median home price in Menifee of $581,394.

Land Sale No. 6 pertains to the D.R. Horton purchase of a parcel located on the south side of the I-15 in Wildomar at Palomar Street and Starbuck Circle about 6.5 miles southwest of the subject property. The site is zoned R-1 for single-family residential with a minimum lot size of 7,200 square feet. D.R. Horton purchased the site in June 2023 for $7,000,000 or $55,555 per lot based on an estimated finished lot price of $265,000. The development costs are higher due to the offsite improvements which are needed and the fact that the site is unimproved. There is an approved final map for the 126 lots on the site. In comparison to the subject property this location is considered to be similar (Wildomar versus Menifee). This sale is considered to be inferior due to the unimproved nature of the site versus the subject’s graded and finished or nearly finished condition.

While costs are taken into account in our analysis, the risk associated with the development is not.

Land Sale No. 7 pertains to the KB Home purchase of 176 lots known as the Enclave in Menifee, west of Murrieta Road and south of McCall Boulevard. This site is hilly and unimproved with a recorded final map for lots with a minimum lot size of 10,000 square feet. KB Home purchased the site in May 2023 for $8,000,000 or $45,455 per lot based on a finished lot amount estimated at $290,000 at time of purchase. A significant amount Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 210
Menifee Mayor and City Council August 21, 2024 Page 968 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 51
of grading will be needed to improve this site. In comparison to the subject property this site is considered to be inferior in condition, however there is view potential for some of the lots. This location is slightly inferior when compared to the subject’s site in Menifee in a more developed area.

Land Sale No. 8 refers to the current escrow of a generally level large lot located at the northwest corner of Briggs Road and Holland Road in Menifee, about 3.5 miles east of the subject site. The property is an in-fill parcel in what is considered a good location, across from an existing elementary school and a block from a regional park. The parcel has an approved final map and is anticipated to close in an unimproved condition. There are existing newer homes to the west and south, and an older mobile home park to the north. North of the mobile home park is Rockport Ranch, a successful new community by Lennar that is currently selling. A public builder is in escrow to purchase the site based on a reported $253,000 finished lot value. The finished lot value takes into consideration a CFD similar to the subject property. The actual sales amount and buyer has been retained in our files for confidentiality purposes. In comparison to the subject property this is considered to be similar in location however slightly superior in date of sale as this transaction is not yet closed. The transaction was negotiated over a year ago. It is anticipated to close in July 2024, however there are no guarantees.

Land Sale No. 9 pertains to a current escrow of Canterwood, Phase II at the southeast corner of Holland and Leon Roads in Winchester, about 4.5 miles east of the subject. A public builder is in escrow to purchase the 146 lots with a minimum lot size of 5,000 square feet with an estimated closing date in late June 2024. The builder and actual sale amount have been retained in our files for confidentiality purposes. The property is in escrow based on a $227,500 finished lot. The first phase of Canterwood sold in April of 2022 to DR Horton with 4,700-square-foot lots based on a finished lot price of $175,000.

The finished lot takes into consideration a CFD similar to the subject. The first phase was sold under the normal market value due to significant offsite work which was needed due to this being an undeveloped area surrounded by vacant parcels. DR Horton is advertising their Willowpoint and Juniper at Canterwood neighborhoods coming soon but no pricing is yet available. In comparison to the subject property, this location is slightly more remote Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 211
Menifee Mayor and City Council August 21, 2024 Page 969 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 52
which is considered inferior. When comparing the current escrow, it is considered superior to the subject as it is not yet a closed sale.

The chart below summarizes the considerations used in adjusting the market data to the subject lot.

Data
No. Location
Date of
Sale Lot Size FinishedLot Price Comparison to Subject
1 Winchester 4 / 24
4,000,
5,000,
10,000
$205,000 Inferior – Condition & Location
2 Menifee 3 / 24 5,000 –
7,000 $240,000 Inferior – Condition, Lot Size & Location 3 Menifee 1 / 24 6,000 $240,000 Inferior – Lot Size & Location 4 Menifee 12 / 23 3,000 $225,000 Inferior – Condition & Lot Size 5 Temecula 8 / 23 3,000 $255,000 Superior – Location
Inferior – Lot Size
6 Wildomar 6 / 23 7,200 $265,000 Inferior – Condition
7 Menifee 5 / 23 10,000 $290,000
Superior – Lot Size and View
Potential
Inferior – Condition
8 Menifee Esc. 6,000 $253,000 Superior – Not Closed Sale Inferior Condition & Lot Size
9 Menifee Esc. 5,000 $227,500
Superior – Not Closed Sale
Inferior – Condition, Location &
Lot Size
The market data has an overall finished lot range from $205,000 to $290,000. Data No. 1, at the lowest end of the range is located in Winchester, further out for commuters which makes it inferior. Data No. 7 at the high end of the range refers to slightly larger lots, many which will have view potential. The remaining market data ranges from $225,000 to $265,000 on a finished basis. The subject lots are all in a physically finished condition.

The above market data is considered to be good and includes two current escrows, showing current activity in the subject marketplace.

We have concluded that the subject lots have a current market value of $250,000 for the average 9,000 square foot lots. As discussed under the Property Description Section, there are remaining costs associated with developing the subject property into true Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 212
Menifee Mayor and City Council August 21, 2024 Page 970 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 53
finished lots. These costs are estimated at $44,507.88 per lot. The value conclusion for the final lot within Quartz Ranch is calculated below:
77 Lots x $250,000 $ 19,250,000
Less: Remaining Costs ($44,507.88 x 77) ( 3,427,107)
Current Value for Remaining Lots $ 15,822,893
Retail House Valuations
Due to the single ownership of multiple houses by Lennar including model homes and production homes over 95 percent complete, a Discounted Cash Flow (“DCF”) analysis is needed in order to arrive at a bulk value for the homes. First, a retail value for each plan will be concluded followed by a DCF for the builder-owned lots, which will consider the absorption time to sell off the houses, the costs associated with selling off the homes and any remaining costs owed by the builder. The resulting revenue will be discounted using an appropriate rate to determine the builder-owned bulk value. The DCF analyses will be followed by a reporting of the concluded values for the individually owned homes using the concluded base retail value for each plan with a separate check of the analysis utilizing a mass appraisal technique based on actual sales prices of the homes and considering any re-sale market data.

Quartz Ranch consists of 278 individually owned homes, five model homes (none in escrow), 19 homes over 95 percent complete (all in escrow), 51 houses under construction (29 in escrow), and 26 additional finished/partially finished lots (none in escrow). The homes under construction and the lots have been valued above. The 24 builder-owned homes over 95 percent complete (including five model homes) are being addressed in this section with a separate valuation for each plan.

Below is a summary of the floor plans within Meadow Walk, Ridgeline and Canyon View in Quartz Ranch. A listing of the improved residential comparable properties is located in the Addenda of this report. All of the improved residential properties are located within Menifee. Our search of the subject property and the local Multiple Listing Service (MLS) has resulted in two closed resales and no current resale listings within Quartz Ranch.

The plans are detailed below.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 213
Menifee Mayor and City Council August 21, 2024 Page 971 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 54
Quartz Ranch by Lennar
Plan Bd/Ba
Floors/
Parking Sq. Ft.

Ind.

Owned
Bldr.

Owned
Meadow Walk
1 3 / 2.5 2 / 2 1,823 17 2
2 3 / 2 1 / 2 1,950 16 3*
3 4 / 3 2 / 2 2,203 19 2*
4 4 / 3 2 / 2 2,419 18 3*
5 4 / 3 2 / 2 2,590 18 1
Subtotal Meadow Walk: 88 11
Ridgeline
1 3 / 2 1 / 2 1,950 26 0
2 3 / 2 1 / 3 2,287 22 0
3 (NG) 4 / 3 1 / 3 2,434 23 0
4 4 / 3.5 1 / 2 2,767 25 0
Subtotal Ridgeline: 96 0
Canyon View
1 4 / 3.5 2 / 3 2,649 23 3
2 4 / 3.5 1 / 2 2,767 23 3
3 4 / 2.5 2 / 2 2,809 26 3*
4 (NG) 6 / 4.5 2 / 3 4,134 22 4*
Subtotal Canyon View: 94 13
Total Quartz Ranch 278 24
*One of each of these plans is a model home. NG stands for NextGen, representing a floorplan that features a first-floor suite with separate entrance, kitchenette and living area. There are an additional 51 homes under construction, and 26 additional finished lots that are all owned by Lennar (not shown on the above table).

The most appropriate new home comparable data for Meadow Walk Plan 1 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 1 3 / 2.5 2 / 2 1,823 --
1 2 3 / 2 1 / 2 1,950 $303.33
1 3 4 / 3 2 / 2 2,203 $278.84
7 1 3 / 2 1 / 2 1,959 $284.32
8 3 4 / 2 1 / 2 1,846 $309.31
8 4 4 / 3 2 / 2 1,977 $295.90
9 1 3 / 2.5 2 / 2 1,843 $297.09
11 S2 4 / 3 2 / 2 2,320 $263.36
13 1 3 / 2 1 / 2 1,764 $314.20
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 214
Menifee Mayor and City Council August 21, 2024 Page 972 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 55
price range from $263.36 to $314.20 per square foot. Meadow Walk Plan 1 is the smallest two-story home in the area, thus we have included some single story homes in our analysis.

Plan 1 has a current base asking price of $322.70 per square foot. There have been 17 closings of Meadow Walk Plan 1 with sales prices ranging from $252.02 to $329.54 per square foot. There are currently five escrows of Meadow Walk Plan 1, with a price range of $289.05 to $321.22 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Meadow Walk Plan 1, the concessions range from $3,519 to $65,894 or from $1.93 to $36.15 per square foot. All of the homes appear to be in excellent condition with no depreciation visible.

It has been concluded that Meadow Walk Plan 1 has a base current market value of $280.00 per square foot. This calculates as follows:
1,823 sf x $280.00 = $510,440
The most appropriate new home comparable data for Meadow Walk Plan 2 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 2 3 / 2 1 / 2 1,950 --
1 1 3 / 2.5 2 / 2 1,823 $322.70
6 1 4 / 2 1 / 2 1,959 $283.30
7 1 3 / 2 1 / 2 1,959 $284.32
8 3 4 / 2 1 / 2 1,846 $309.31
8 4 4 / 3 2 / 2 1,977 $295.90
11 S1 4 / 2.5 1 / 2 1,910 $310.99
12 1 3 / 2 1 / 2 1,939 $321.68
13 1 3 / 2 1 / 2 1,764 $314.20
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $283.30 to $322.70 per square foot. Meadow Walk Plan 2 has a current base asking price of $303.33 per square foot. Meadow Walk Plan 2 is the same floorplan Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 215
Menifee Mayor and City Council August 21, 2024 Page 973 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 56
as Ridgeline Plan 1 (seen above as Data #2, Model #1). There have been 16 closings of Meadow Walk Plan 2 with sales prices ranging from $241.33 to $301.12 per square foot.

There are currently seven escrows of Meadow Walk Plan 2, with a price range of $281.19 to $302.43 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Meadow Walk Plan 2, the concessions range from $5,033 to $68,134 or from $2.58 to $34.94 per square foot. All of the homes appear to be in excellent condition with no depreciation visible.

It has been concluded that Meadow Walk Plan 2 has a base current market value of $275.00 per square foot. This calculates as follows:
1,950 sf x $275.00 = $536,250
The most appropriate new home comparable data for Meadow Walk Plan 3 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 3 4 / 3 2 / 2 2,203 --
1 1 3 / 2.5 2 / 2 1,823 $322.70
1 4 4 / 3 2 / 2 2,419 $259.62
4 1 3 / 2 1 / 2 2,270 $331.56
6 2 5 / 2.5 2 / 2 2,397 $246.14
8 5 4 / 3 2 / 2 2,219 $269.94
9 3 4 / 3 2 / 2 2,203 $251.16
10 1 4 / 2 1 / 2 2,336 $248.25
11 S2 4 / 3 2 / 2 2,320 $263.36
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $246.14 to $331.56 per square foot. Meadow Walk Plan 3 has a current base asking price of $278.84 per square foot. There have been 19 closings of Meadow Walk Plan 3 with sales prices ranging from $215.34 to $272.68 per square foot. There are currently three escrows of Meadow Walk Plan 3, with a price range of $263.47 to $279.07 per square foot. It should be noted that the reported sales prices include upgrades, Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 216
Menifee Mayor and City Council August 21, 2024 Page 974 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 57
premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Meadow Walk Plan 3, the concessions range from $0 to $85,130 or from $0 to $38.64 per square foot. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Meadow Walk Plan 3 has a base current market value of $255.00 per square foot. This calculates as follows:
2,203 sf x $255.00 = $561,765
The most appropriate new home comparable data for Meadow Walk Plan 4 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 4 4 / 3 2 / 2 2,419 --
1 3 4 / 3 2 / 2 2,203 $278.84
1 5 4 / 3 2 / 2 2,590 $244.85
6 2 5 / 2.5 2 / 2 2,397 $246.14
8 6 4 / 3 2 / 2 2,454 $252.24
10 1 4 / 2 1 / 2 2,336 $248.25
10 2 4 / 3 2 / 2 2,590 $230.05
11 S2 4 / 3 2 / 2 2,320 $263.36
11 S3 4 / 3 2 / 2 2,541 $245.97
13 2 4 / 3 2 / 2 2,443 $260.30
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $230.05 to $278.84 per square foot. Meadow Walk Plan 4 has a current base asking price of $259.62 per square foot. There have been 18 closings of Meadow Walk Plan 4 with sales prices ranging from $207.22 to $248.72 per square foot. There are currently four escrows of Meadow Walk Plan 4, with a price range of $238.00 to $258.98 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Meadow Walk Plan 4, Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 217
Menifee Mayor and City Council August 21, 2024 Page 975 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 58
the concessions range from $0 to $64,455 or from $0 to $26.65 per square foot. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Meadow Walk Plan 4 has a base current market value of $235.00 per square foot. This calculates as follows:
2,419 sf x $235.00 = $568,465
The most appropriate new home comparable data for Meadow Walk Plan 5 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 5 4 / 3 2 / 2 2,590 --
1 4 4 / 3 2 / 2 2,419 $259.62
3 1 4 / 3.5 2 / 3 2,649 $261.54
6 3 5 / 3 2 / 2 2,824 $219.19
8 6 4 / 3 2 / 2 2,454 $252.24
10 2 4 / 3 2 / 2 2,590 $230.05
11 S3 4 / 3 2 / 2 2,541 $245.97
11 S4 4 / 3 2 / 2 2,771 $230.24
12 2 5 / 3.5 1 / 2 2,752 $235.61
13 3 4 / 3 2 / 2 2,612 $246.59
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $219.19 to $261.54 per square foot. Meadow Walk Plan 5 has a current base asking price of $244.85 per square foot. There have been 18 closings of Meadow Walk Plan 5 with sales prices ranging from $180.91 to $234.47 per square foot. There are currently six escrows of Meadow Walk Plan 5, with a price range of $233.52 to $246.20 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Meadow Walk Plan 5, the concessions range from $0 to $90,413 or from $0 to $34.91 per square foot. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Meadow Walk Plan 5 has a base current market value of $225.00 per square foot. This Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 218
Menifee Mayor and City Council August 21, 2024 Page 976 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 59
calculates as follows:
2,590 sf x $225.00 = $582,750
The most appropriate new home comparable data for Ridgeline Plan 1 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 1 3 / 2 1 / 2 1,950 --
1 1 3 / 2.5 2 / 2 1,823 $322.70
1 2 3 / 2 1 / 2 1,950 $303.33
6 1 4 / 2 1 / 2 1,959 $283.30
7 1 3 / 2 1 / 2 1,959 $284.32
8 3 4 / 2 1 / 2 1,846 $309.31
9 2 3 / 2 1 / 2 1,950 $288.39
11 S1 4 / 2.5 1 / 2 1,910 $310.99
12 1 3 / 2 1 / 2 1,939 $321.68
13 1 3 / 2 1 / 2 1,764 $314.20
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $283.30 to $322.70 per square foot. Prior to selling out, Ridgeline Plan 1 had a final base asking price of $292.82 per square foot. Ridgeline Plan 1 is the same floorplan as Meadow Walk Plan 2 (seen above as Data #1, Model #2). There have been 26 closings of Ridgeline Plan 1 with sales prices ranging from $240.09 to $298.10 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Ridgeline Plan 1, the concessions range from $2,500 to $83,255 or from $1.28 to $42.69 per square foot. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Ridgeline Plan 1 has a base current market value of $275.00 per square foot. This calculates as follows:
1,950 sf x $275.00 = $536,250
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 219
Menifee Mayor and City Council August 21, 2024 Page 977 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 60
The most appropriate new home comparable data for Ridgeline Plan 2 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 2 3 / 2 1 / 2 2,287 --
1 2 3 / 2 1 / 2 1,950 $303.33
1 3 4 / 3 2 / 2 2,203 $278.84
1 4 4 / 3 2 / 2 2,419 $259.62
3 2 4 / 3.5 1 / 2 2,767 $269.61
4 1 3 / 2 1 / 2 2,270 $331.56
6 1 4 / 2 1 / 2 1,959 $283.30
8 5 4 / 3 2 / 2 2,219 $269.94
10 1 4 / 2 1 / 2 2,336 $248.25
11 S2 4 / 3 2 / 2 2,320 $263.36
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $248.25 to $331.56 per square foot. Prior to selling out, Ridgeline Plan 2 had a final base asking price of $278.09 per square foot There have been 22 closings of Ridgeline Plan 2 with sales prices ranging from $217.31 to $286.29 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Ridgeline Plan 2 the concessions range from $4,763 to $65,306 or from $2.08 to $28.56 per square foot. All of the homes appear to be in excellent condition with no depreciation visible. Our review of the local MLS has revealed there were two resales of Ridgeline Plan 2 homes, both resold in February 2024 after less than one month on the market. The first (APN 360-930-010) originally sold for $587,000 in November 2022 and resold for $669,000 or $292.52 per square foot suggesting significant appreciation. The second (APN 360-942-018) originally sold in May 2023 for $606,000 and resold in February 2024 for $656,000 or $286.84 per square foot, again suggesting appreciation. It has been concluded that Ridgeline Plan 2 has a base current market value of $250.00 per square foot. This calculates as follows:
2,287 sf x $250.00 = $571,750
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 220
Menifee Mayor and City Council August 21, 2024 Page 978 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 61
The most appropriate new home comparable data for Ridgeline Plan 3 (NG) are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 3 (NG) 4 / 3 1 / 3 2,434 --
1 4 4 / 3 2 / 2 2,419 $259.62
1 5 4 / 3 2 / 2 2,590 $244.85
3 4 (NG) 6 / 4.5 2 / 3 4,134 $220.31
5 1 4 / 3 1 / 3 2,550 $270.19
5 4 (NG) 6 / 4.5 2 / 3 3,994 $195.04
6 2 5 / 2.5 2 / 2 2,397 $246.14
10 1 4 / 2 1 / 2 2,336 $248.25
10 2 4 / 3 2 / 2 2,590 $230.05
11 S2 4 / 3 2 / 2 2,320 $263.36
11 S3 4 / 3 2 / 2 2,541 $245.97
12 2 5 / 3.5 1 / 2 2,752 $235.61
12 4 (NG) 5 / 3.5 2 / 3 3,146 $231.03
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $195.04 to $270.19 per square foot. It is important to note that Ridgeline Plan 3 is a NextGen (“NG”) floorplan, meaning it is designed for multi-generational living and features a first-floor suite with separate entrance, living room, laundry, and kitchenette.

While NG plans have gained popularity, it is very rare to have a single-story home with NG floorplan, and Ridgeline Plan 3 is the only single-story NG home in the Menifee marketplace.

Prior to selling out, Ridgeline Plan 3 (NG) had a final base asking price of $283.48 per square foot. There have been 23 closings of Ridgeline Plan 3 (NG) with sales prices ranging from $223.22 to $295.54 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Ridgeline Plan 3 the concessions range from $0 to $93,240 or from $0 to $38.31 per square foot. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Ridgeline Plan 3 (NG) has a base current market value of $240.00 per square foot. This calculates as follows:

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 221
Menifee Mayor and City Council August 21, 2024 Page 979 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 62
2,434 sf x $240.00 = $584,160
The most appropriate new home comparable data for Ridgeline Plan 4 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 4 4 / 3.5 1 / 2 2,767 --
2 3 (NG) 4 / 3 1 / 3 2,434 $283.48
3 1 4 / 3.5 2 / 3 2,649 $261.54
3 2 4 / 3.5 1 / 2 2,767 $269.61
3 3 4 / 2.5 2 / 2 2,809 $254.05
4 2 3 / 2.5 1 / 2 2,610 $315.99
4 3 3 / 2.5 1 / 3 2,780 $293.16
5 1 4 / 3 1 / 3 2,550 $270.19
6 3 5 / 3 2 / 2 2,824 $219.19
12 2 5 / 3.5 1 / 2 2,752 $235.61
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $219.19 to $315.99 per square foot. Prior to selling out, Ridgeline Plan 4 had a final base asking price of $250.09 per square foot. Ridgeline Plan 4 is the same floorplan as Canyon View Plan 2 (seen above as Data No. 3, Model No. 2). There have been 25 closings of Ridgeline Plan 4 with sales prices ranging from $190.46 to $268.77 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Ridgeline Plan 4 the concessions range from $0 to $88,101 or from $0 to $31.84 per square foot. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Ridgeline Plan 4 has a base current market value of $220.00 per square foot. This calculates as follows:
2,767 sf x $220.00 = $608,740
The most appropriate new home comparable data for Canyon View Plan 1 are shown below.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 222
Menifee Mayor and City Council August 21, 2024 Page 980 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 63
Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 1 4 / 3.5 2 / 3 2,649 --
1 4 4 / 3 2 / 2 2,419 $259.62
1 5 4 / 3 2 / 2 2,590 $244.85
5 1 4 / 3 1 / 3 2,550 $270.19
8 6 4 / 3 2 / 2 2,454 $252.24
10 2 4 / 3 2 / 2 2,590 $230.05
11 S3 4 / 3 2 / 2 2,541 $245.97
11 S4 4 / 3 2 / 2 2,771 $230.24
12 3 4 / 2.5 2 / 2 2,835 $243.98
13 3 4 / 3 2 / 2 2,612 $246.59
14 1 3 / 2.5 2 / 2.5 2,780 $270.63
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $230.05 to $270.63 per square foot. Canyon View Plan 1 has a current base asking price of $261.54 per square foot. There have been 23 closings of Canyon View Plan 1 with sales prices ranging from $199.56 to $235.39 per square foot. There are currently six escrows of Canyon View Plan 1, with a price range of $235.62 to $257.54 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Canyon View Plan 1 the concessions range from $12,462 to $101,081 or from $4.70 to $38.16 per square foot. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Canyon View Plan 1 has a base current market value of $230.00 per square foot. This calculates as follows:
2,649 sf x $230.00 = $609,270
The most appropriate new home comparable data for Canyon View Plan 2 are shown below.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 223
Menifee Mayor and City Council August 21, 2024 Page 981 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 64
Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 2 4 / 3.5 1 / 2 2,767 --
2 3 (NG) 4 / 3 1 / 3 2,434 $283.48
2 4 4 / 3.5 1 / 2 2,767 $250.09
3 1 4 / 3.5 2 / 3 2,649 $261.54
3 3 4 / 2.5 2 / 2 2,809 $254.05
4 2 3 / 2.5 1 / 2 2,610 $315.99
4 3 3 / 2.5 1 / 3 2,780 $293.16
5 1 4 / 3 1 / 3 2,550 $270.19
6 3 5 / 3 2 / 2 2,824 $219.19
12 2 5 / 3.5 1 / 2 2,752 $235.61
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $219.19 to $315.99 per square foot. Canyon View Plan 2 has a current base asking price of $269.61 per square foot. Canyon View Plan 2 is actually the same floorplan as Ridgeline Plan 4 (seen above as Data #2, Model #4). There have been 23 closings of Canyon View Plan 2 with sales prices ranging from $198.33 to $241.43 per square foot. There are currently six escrows of Canyon View Plan 2, with a price range of $234.02 to $254.32 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Canyon View Plan 2 the concessions range from $0 to $90,664 or from $0 to $32.77 per square foot. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Canyon View Plan 2 has a base current market value of $225.00 per square foot. This calculates as follows:
2,767 sf x $225.00 = $622,575
The most appropriate new home comparable data for Canyon View Plan 3 are shown below.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 224
Menifee Mayor and City Council August 21, 2024 Page 982 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 65
Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 3 4 / 2.5 2 / 2 2,809 --
1 5 4 / 3 2 / 2 2,590 $244.85
3 1 4 / 3.5 2 / 3 2,649 $261.54
6 3 5 / 3 2 / 2 2,824 $219.19
10 3 3 / 3.5 2 / 2 3,092 $221.24
11 S4 4 / 3 2 / 2 2,771 $230.24
11 S5 5 / 3 2 / 2 2,948 $220.15
12 3 4 / 2.5 2 / 2 2,835 $243.98
14 1 3 / 2.5 2 / 2.5 2,780 $270.63
14 2 3 / 2.5 2 / 3 2,910 $264.14
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $219.19 to $270.63 per square foot. Canyon View Plan 3 has a current base asking price of $254.05 per square foot. There have been 26 closings of Canyon View Plan 3 with sales prices ranging from $186.33 to $234.06 per square foot. There are currently three escrows of Canyon View Plan 3, with a price range of $232.18 to $250.78 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Canyon View Plan 3 the concessions range from $20,400 to $95,593 or from $7.26 to $34.03 per square foot. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Canyon View Plan 3 has a base current market value of $220.00 per square foot. This calculates as follows:
2,809 sf x $220.00 = $617,980
The most appropriate new home comparable data for Canyon View Plan 4 (NG) are shown below.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 225
Menifee Mayor and City Council August 21, 2024 Page 983 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 66
Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 4 (NG) 6 / 4.5 2 / 3 4,134 --
2 3 (NG) 4 / 3 1 / 3 2,434 $283.48
3 3 4 / 2.5 2 / 2 2,809 $254.05
5 2 5 / 4 2 / 3 3,520 $209.66
5 3 6 / 4 2 / 3 3,699 $203.57
5 4 (NG) 6 / 4.5 2 / 3 3,994 $195.04
7 3 4 / 2.5 2 / 3 3,410 $193.55
9 4 (NG) 7 / 4.5 2 / 2 4,134 $186.44
10 4 (NG) 7 / 4.5 2 / 2 4,134 $185.16
12 5 (NG) 7 / 4.5 2 / 3 4,134 $208.60
14 5 4 / 3.5 2 / 3 3,510 $201.14
All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $185.16 to $254.05 per square. It is important to note that Canyon View Plan 4 is a NextGen (“NG”) floorplan, meaning it is designed for multi-generational living and features a first-floor suite with separate entrance, living room, laundry, and kitchenette.

Canyon View Plan 4 (NG) has a current base asking price of $220.31 per square foot. There have been 22 closings of Canyon View Plan 4 (NG) with sales prices ranging from $161.87 to $206.46 per square foot. There are currently eight escrows of Canyon View Plan 4 (NG), with a price range of $196.42 to $228.09 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan considering concessions. The builder is currently giving concessions which may include an interest rate buy-down. For Canyon View Plan 4 the concessions range from $0 to $118,266 or from $0 to $28.61 per square foot. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Canyon View Plan 4 (NG) has a base current market value of $180.00 per square foot. This calculates as follows:
4,134 sf x $180.00 = $744,120
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 226
Menifee Mayor and City Council August 21, 2024 Page 984 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 67
Builder-Owned Retail Value
Within Quartz Ranch there are 24 builder-owned homes over 95 percent complete which includes five model homes. Per interviews with builders, upgrades, and landscape/hardscape of up to $100,000 are installed in the model homes, however, the builders generally consider this a marketing cost and do not anticipate recovering this investment on a dollar-for-dollar basis. Based on actual sales information of the subject model homes and the current real estate market, a consideration of a $40,000 premium has been included with each of the model homes. As concluded above, the retail base value conclusions for the builder-owned homes are calculated as follows:

Meadow Walk:

Plan 1 (2 x $510,440) $ 1,020,880
Plan 2 (3 x $536,250) 1,608,750
Plan 3 (2 x $561,765) 1,123,530
Plan 4 (3 x $568,465) 1,705,395
Plan 5 (1 x $582,750) 582,750
Ridgeline:

Plan 1 (0 x $536,250) $ 0
Plan 2 (0 x $571,750) 0
Plan 3-NG (0 x $584,160) 0
Plan 4 (0 x $608,740) 0
Canyon View:

Plan 1 (3 x $609,270) $ 1,827,810
Plan 2 (3 x $622,575) 1,867,725
Plan 3 (3 x $617,980) 1,853,940
Plan 4 (NG) (4 x $744,120) 2,976,480
Model Upgrades (5 x $40,000) 200,000
Retail Value $14,767,260
Absorption Period
In order to arrive at an absorption period for the 24 builder-owned homes, the absorption rate for the subject neighborhoods along with the surrounding developments has been reviewed. Quartz Ranch grand opened in June 2022 and there have been 326 sales since, suggesting an average absorption of 13.6 homes per month between the three neighborhoods. The sales rates per community are 4.7 within Meadow Walk, 4.8 within Ridgeline, and 4.9 within Canyon View. Each of these rates are considered to be good.

Nineteen of the 24 builder-owned homes are in escrow (all but the models) with closings scheduled as the homes are finalized. Taking into consideration the product and concluded sales prices along with the current escrows and current market conditions, it is the Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 227
Menifee Mayor and City Council August 21, 2024 Page 985 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 68
appraiser’s opinion that the 24 builder-owned homes will be absorbed within a four-month period at the concluded values.

Remaining Costs
As discussed under the property description section above, there is $44,507.88 per lot remaining for land development costs and fees associated with the builder-owned property. For the 24 builder-owned homes, this equates to $1,068,189 ($44,507.88 x 24) in remaining costs. For analysis purposes this will be spread evenly over the four-month absorption period.

Expenses
In determining an expense rate, several builders in the subject area have been interviewed as to their expenses on selling existing inventory. Expenses include marketing and general administrative costs. These costs typically range from six to ten percent depending on varying factors such as absorption period, intensity of marketing, etc. Due to possible buydowns of interest and help with closing costs in the current market, an eight percent marketing cost is estimated along with two percent for general and administrative costs for a total of ten percent in expenses for this analysis.

Profit
Several interviews with merchant builders in the area were conducted in order to determine an appropriate profit percentage for the subject properties. In the early 2000s, developers typically attempted to achieve a 10 to 12 percent profit based on gross sales proceeds. During the Great Recession, this range was lowered considerably to six to 10 percent with some builders drastically lowering their profit potential in order to maintain their work force. The subject has experienced an exception sales rate. A ten percent profit is considered appropriate in the analysis for this project.

Discount Rate
In selecting a discount rate, the following was completed:

1. Interviews with merchant builders in the Menifee area

2. Review of current market conditions including current market rates as well as yields reflected in other markets (i.e., municipal bonds, corporate bonds, etc.)

3. The quality, construction, historical sales, and product on the subject property Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 228
Menifee Mayor and City Council August 21, 2024 Page 986 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 69
The homes within Quartz Ranch grand opened in June 2022 with the product being well received in the marketplace. Based on the sales rate within the subject project, the competition, the product and location, a ten percent discount rate is considered appropriate for this analysis.

Discounted Cash Flow Summary
The discounted revenue (see DCF Analyses in addenda) for the builder-owned homes is $10,525,429.

Builder Ownership Valuation
The builder-owned homes within Quartz Ranch consists of five models along with 19 production homes over 95 percent complete, 51 homes under construction (valued based on a finished lot) and 26 additional finished lots owned by Lennar. The final valuation of the Lennar owned property is:
77 Lots $ 15,822,893
24 Houses 10,525,429
Total Lennar Ownership $ 26,348,322
Individual Owned Homes Valuation Conclusion
There are 278 individually owned homes within Quartz Ranch. Based on the concluded value for each plan, the individually owned homes are valued as:

Meadow Walk:

Plan 1 (17 x $510,440) $ 8,677,480
Plan 2 (16 x $536,250) 8,580,000
Plan 3 (19 x $561,765) 10,673,535
Plan 4 (18 x $568,465) 10,232,370
Plan 5 (18 x $582,750) 10,489,500
Ridgeline:

Plan 1 (26 x $536,250) $13,942,500
Plan 2 (22 x $571,750) 12,578,500
Plan 3-NG (23 x $584,160) 13,435,680
Plan 4 (25 x $608,740) 15,218,500
Canyon View:

Plan 1 (23 x $609,270) $14,013,210
Plan 2 (23 x $622,575) 14,319,225
Plan 3 (26 x $617,980) 16,067,480
Plan 4 (NG) (22 x $744,120) 16,370,640
Total Individual Owned $164,598,620
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 229
Menifee Mayor and City Council August 21, 2024 Page 987 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 70
In an additional review, we have reviewed the original builder sales prices for the homes within the Quartz Ranch neighborhood. Closings for the 278 homes occurred between October 18, 2022, and June 17, 2024. The reported closing prices by the builder for the individually owned homes total $161,452,870. The builder’s reported prices include premiums, upgrades and purchased options as well as took into consideration the concessions given by the builder. Twelve of the thirteen plans have had base price increases since the project opened, ranging from 3.2 to 17.7 percent. Within Meadow Walk this equated to base price increases from $19,500 to $30,290 per plan, at Ridgeline this equated to $20,000 to $54,000 per plan and within Canyon View (the larger and more expensive homes) the increases ranged from $68,825 to $121,770 per plan. Within Ridgline the smallest plan’s base price decreased 1.9 percent or $11,000 which what appears to be finding the correct price points for the smaller sized home. The difference between the concluded value of $164,598,620 and the reported sales prices of $161,452,870 is 1.9 percent which equates to an average of $11,315 per home for the 278 closed homes. With base prices generally increasing between $19,500 to $121,770 depending on the plan, the concluded values appear reasonable. The increases which have occurred have offset the options, upgrades and premiums which have been purchased by the homeowners. The above valuation is for the minimum market value as it takes into consideration the base plan price only and does not consider any options, premiums or upgrades which were purchased by the buyers. It is our conclusion that the original builder’s sales prices further substantiate the concluded minimum market value for the individually owned homes.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 230
Menifee Mayor and City Council August 21, 2024 Page 988 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 71

APPRAISAL REPORT SUMMARY
The appraisal assignment was to value the subject property which is within the boundaries of Menifee CFD No. 2022-1. The property is being developed into the community of Quartz Ranch with three neighborhoods known as Meadow Walk, Ridgeline, and Canyon, all by Lennar. Quartz Ranch has been well received in the marketplace and with all three neighborhoods actively selling at absorption rates in line with the marketplace.

Quartz Ranch includes a total of 379 single-family proposed homes with 278 closed to individuals and an additional 48 in escrow. We have reviewed the builder sales and reviewed the area’s Multiple Listing Service. Our search resulted in two closed resale homes and no current listings of a resale home within the subject property. All homes appear to be in excellent condition with no depreciation apparent. The 278 home closings occurred between October 18, 2022, and June 14, 2024. There are five models and 19 production homes over 95 percent complete (all 19 production homes in escrow), with an additional 51 homes under construction (under 95 percent complete with 29 in escrow) and 26 finished lots.

The subject property was valued using the Sales Comparison Approach to value and a mass appraisal technique. A minimum value was determined for the existing homes by concluding at a base value for each plan. The valuation considered the improvements/benefits to be funded by both the Menifee CFD No. 2022-1 bond series proceeds, along with the Menifee CFD No. 2022-1 special tax lien. As a result of our investigation, the concluded market value for the subject property is:

Quartz Ranch
Lennar Ownership (77 lots & 24 houses) $ 26,348,322
Individual Owners (278 houses) 164,598,620
Total Aggregate Value Menifee CFD No. 2022-1 $ 190,946,942 The above values are stated subject to the Assumptions and Limiting Conditions of this report, the Appraiser’s Certification and as of June 17, 2024.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 231
Menifee Mayor and City Council August 21, 2024 Page 989 of 1068 _________________________________________________________________________________________________________ Menifee CFD No. 2022-1 (Quartz Ranch) - 2024 Series Bonds Kitty Siino & Associates, Inc. Page 72
APPRAISER’S CERTIFICATION
The appraiser certifies that to the best of his knowledge and belief:

1. The statements of fact contained in this report are true and correct.

2. The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased, professional analyses, opinions, and conclusions.

3. The appraiser has no present or prospective interest in the property that is the subject of this report, and no personal interest or bias with respect to the parties involved.

4. The appraiser’s compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result or the occurrence of a subsequent event.

5. This appraisal was not based on a requested minimum valuation, a specific valuation or the approval of a loan.

6. The analyses, opinions and conclusions were developed, and this report was prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

7. Kitty Siino has made a personal inspection of the property that is the subject of this report.

8. Kitty Siino has performed appraisal services on the subject property in the past three years. An appraisal was completed in 2023 for the Menifee CFD 2022-1 first series of bonds.

9. No other appraisers have provided significant professional assistance to the persons signing this report.

10. The reported analyses, opinions and conclusions were developed, and this report was prepared, in conformity with the requirements of the Appraisal Institute’s Code of Professional Ethics and Standards of Professional Appraisal Practice, which include the Uniform Standards of Professional Appraisal Practice.

11. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

12. As of the date of this report, Kitty Siino has completed the requirements of the continuing education program of the Appraisal Institute.

Kitty S. Siino, MAI
State Certified General
Real Estate Appraiser (AG004793)
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 232
Menifee Mayor and City Council August 21, 2024 Page 990 of 1068

ADDENDA
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 233
Menifee Mayor and City Council August 21, 2024 Page 991 of 1068 CITY OF MENIFEE CFD NO. 2022-1

BOUNDARY MAP
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 234
Menifee Mayor and City Council August 21, 2024 Page 992 of 1068 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 235
Menifee Mayor and City Council August 21, 2024 Page 993 of 1068 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 236
Menifee Mayor and City Council August 21, 2024 Page 994 of 1068 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 237
Menifee Mayor and City Council August 21, 2024 Page 995 of 1068 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 238
Menifee Mayor and City Council August 21, 2024 Page 996 of 1068 TRACT MAP NOS. 28786, 28791, 28792,
28793, and 28794
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 239
Menifee Mayor and City Council August 21, 2024 Page 997 of 1068 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 240
Menifee Mayor and City Council August 21, 2024 Page 998 of 1068 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 241
Menifee Mayor and City Council August 21, 2024 Page 999 of 1068 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 242
Menifee Mayor and City Council August 21, 2024 Page 1000 of 1068 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 243
Menifee Mayor and City Council August 21, 2024 Page 1001 of 1068 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 244
Menifee Mayor and City Council August 21, 2024 Page 1002 of 1068

DISCOUNTED CASH FLOW ANALYSIS
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 245
Menifee Mayor and City Council August 21, 2024 Page 1003 of 1068 Quartz Ranch - Lennar Owned Houses DCF Analysis
MONTH Months MONTH 1 MONTH 2 MONTH 3 MONTH 4 TOTAL
4 INCOME:

Retail Sales 14,767,260 $3,691,815 $3,691,815 $3,691,815 $3,691,815 $14,767,260 TOTAL INCOME $3,691,815 $3,691,815 $3,691,815 $3,691,815 $14,767,260 EXPENSES:

Remaining Costs ($267,047) ($267,047) ($267,047) ($267,048) ($1,068,189) Marketing & Carrying Expenses 10% ($369,182) ($369,182) ($369,182) ($369,182) ($1,476,726) Profit 10% ($369,182) ($369,182) ($369,182) ($369,182) ($1,476,726) TOTAL EXPENSES ($1,005,410) ($1,005,410) ($1,005,410) ($1,005,411) ($4,021,641) NET CASH FLOW $2,686,405 $2,686,405 $2,686,405 $2,686,404 $10,745,619 Discount Factor 10% 0.9917 0.9835 0.9754 0.9673
DISCOUNTED CASH FLOW $2,664,203 $2,642,185 $2,620,349 $2,598,692 $10,525,429 CUMULATIVE DISCOUNTED $2,664,203 $5,306,388 $7,926,737 $10,525,429 $10,525,429

CASH FLOW
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 246
Menifee Mayor and City Council August 21, 2024 Page 1004 of 1068

RESIDENTIAL LAND SALES MAP
& SUMMARY CHART
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 247
Menifee Mayor and City Council August 21, 2024 Page 1005 of 1068

RESIDENTIAL LAND SALES MAP
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 248
Menifee Mayor and City Council August 21, 2024 Page 1006 of 1068

FINISHED LOT LAND SALES SUMMARY CHART
Data
No. Location / APN / Buyer / Seller Sales # Lots Lot Size Sales Price / Est.

Finished Comments Date Price per
Lot
Lot Price
1 Stone Creek / SEC Grand Avenue and
Leon Road, Winchester / 462-020-039 /
Meritage / Lansing
April 2024 224
4,000,
5,000, &
10,000
$10,293,500
/
$45,953
$205,000
Closed with final engineering
in process in an unimproved
condition.
2 Legado Phase 1 / SEC Rouse Road
and Encanto Dr/I-215, Menifee / 333-
020-020 / Lennar / IHP
March
2024 491 5,000-
7,000
$22,500,000
/
$45,825
$240,000
Closed with an approved
final map in a rough graded
condition.
3 Diamond Brothers South / SE side of
Domenigoni Pkwy, N of Lindenberger
Rd, Menifee / 340-603-040 / Pulte /
Diamond Brothers Five
January
2024 197 6,000 $8,500,000 /
$43,147 $240,000
Closed with a recorded final
map in an unimproved
condition.
4 Riverwalk Village / SWC Bradley Road
and Boynton Lane, Menifee / 338-150-
046 & 031 / Richmond American / Cal
West Homes
December
2023 198 3,000 $22,077,500
/ $111,502 $225,000
Purchased with final map
approval in unimproved
condition. In-fill parcel in
Menifee.
5 Prado, Date Street and Temecula
Center Drive, Temecula / 916-400-070 /
Meritage Homes / AHV Homes
August
2023 237 3,000 $37,000,000
/ $156,118 $255,000
Closed with an approved
Final Map in an unimproved
condition.
6 Murrieta Creek Estates, Palomar Street
and Starbuck Circle, Murrieta / 380-210-
004 / D.R. Horton / JPR Homes
June
2023 126 7,200 $7,000,000 /
$55,555 $265,000
Closed with an approved
Final Map in an unimproved
condition.
7 Enclave / West of Murrieta Road, South
of McCall Blvd, Menifee / 339-531-007 /
KB Home / Gordon Youde
May 2023 176 10,000 $8,000,000 /
$45,455 $290,000
Closed with a recorded final
map in an unimproved
condition.
8 Nautical Cove, NWC Briggs Road and
Holland Road, Menifee / 364-200-009 /
KB Home / Ambient (Escrow)
Escrow 233 6,000 Confidential $253,000
Closing with an approved
Final Map in an unimproved
condition. Three phase take
down- Phase 1 scheduled to
close 7/15/24.
9 Canterwood Phase 2/3, NWC of Leon
Road and Craig Ave., Menifee / 466-
310-026 / KB Home / Ambient (Escrow)
Escrow 146 5,000 Confidential $227,500
Closing with an approved
Final Map in an unimproved
condition. Phase 2 scheduled
to close 6/20/24 and Phase 3
scheduled to close 2/20/25.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 249
Menifee Mayor and City Council August 21, 2024 Page 1007 of 1068

IMPROVED RESIDENTIAL SALES MAP
& SUMMARY CHART
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 250
Menifee Mayor and City Council August 21, 2024 Page 1008 of 1068

IMPROVED RESIDENTIAL SALES MAP
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 251
Menifee Mayor and City Council August 21, 2024 Page 1009 of 1068

IMPROVED RESIDENTIAL SALES SUMMARY CHART
Data
No.

Project Name
Location/Developer Plan Room Count
Floors/
Parking
Size
(SF)
Lot Size or
Density /
Absorption
Base Sales
Price Price/SF
1 Meadow Walk at Quartz Ranch,
Evans and Cherry Birch Avenue,
Menifee / Lennar
1 3 / 2.5 2 / 2 1,823 $588,280 $322.70
2 3 / 2 1 / 2 1,950 7,200 sf lots $591,490 $303.33
3 4 / 3 2 / 2 2,203 4.7 sales/mo $614,275 $278.84
4 4 / 3 2 / 2 2,419 $628,020 $259.62
5 4 / 3 2 / 2 2,590 $634,150 $244.85
2 Ridgeline at Quartz Ranch, Evans
and Cherry Birch Avenue,
Menifee / Lennar
1 3 / 2 1 / 2 1,950 $570,990 $292.82
2 3 / 2 1 / 2 2,287 7,200 sf lots $635,990 $278.09
3 (NG) 4 / 3 1 / 3 2,434 4.8 sales/mo $689,990 $283.48
4 4 / 3.5 1 / 2 2,767 (SOLD OUT) $691,990 $250.09
3 Canyon View at Quartz Ranch,
Evans and Cherry Birch Avenue,
Menifee / Lennar
1 4 / 3.5 2 / 3 2,649 $692,815 $261.54
2 4 / 3.5 1 / 2 2,767 7,200 sf lots $746,000 $269.61
3 4 / 2.5 2 / 2 2,809 4.9 sales/mo $713,640 $254.05
4 (NG) 6 / 4.5 2 / 3 4,134 $910,760 $220.31
4 Noble at Audie Murphy Ranch /
Goetz Road and Audie Murphy
Road, Menifee / Richmond
American Homes
1 3 / 2 1 / 2 2,270 $752,646 $331.56
2 3 / 2.5 1 / 2 2,610 7,500 sf lots $824,738 $315.99
3 3 / 2.5 1 / 3 2,780 3.4 sales/mo $814,990 $293.16
4 3 / 2.5 1 / 3 3,130 $741,990 $237.06
5 Meadows at Cimarron Ridge,
Goetz Road and Heard Court,
Menifee / Pulte
1 4 / 3 1 / 3 2,550 $688,990 $270.19
2 5 / 4 2 / 3 3,520 6,000 sf lots $737,990 $209.66
3 6 / 4 2 / 3 3,699 3.0 sales/mo $752,990 $203.57
4 (NG) 6 / 4.5 2 / 3 3,994 $778,990 $195.04
6 Pathway at Cimarron Ridge,
Goetz Road and Heard Court,
Menifee / Pulte
1 4 / 2 1 / 2 1,959 6,000 sf lots $554,990 $283.30
2 5 / 2.5 2 / 2 2,397 3.2 sales/mo $589,990 $246.14
3 5 / 3 2 / 2 2,824 $618,990 $219.19
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 252
Menifee Mayor and City Council August 21, 2024 Page 1010 of 1068 7 Greenway at Cimarron Ridge,
Goetz Road and Heard Court,
Menifee / Pulte
1 3 / 2 1 / 2 1,959 6,000 sf lots $556,990 $284.32
2 3 / 2.5 2 / 2 3,125 2.5 sales/mo $644,990 $206.40
3 4 / 2.5 2 / 3 3,410 $659,990 $193.55
8 Oak Shade at Shadow Mountain /
SW of Palomar Road and Rouse
Road, Menifee / KB Home
1 3 / 2 1 / 2 1,472 $546,990 $371.60
2 3 / 2 1 / 2 1,620 $556,990 $343.82
3 4 / 2 1 / 2 1,846 7,200 sf lots $570,990 $309.31
4 4 / 3 2 / 2 1,977 5.2 sales/mo $584,990 $295.90
5 4 / 3 2 / 2 2,219 $598,990 $269.94
6 4 / 3 2 / 2 2,454 $618,990 $252.24
9 Copper Hill at Mountains Edge,
Briggs Road and Hillridge Street,
Menifee / Lennar
1 3 / 2.5 2 / 2 1,843 $547,540 $297.09
2 3 / 2 1 / 2 1,950 7,000 sf lots $562,360 $288.39
3 4 / 3 2 / 2 2,203 5.0 sales/mo $553,315 $251.16
4 (NG) 7 / 4.5 2 / 2 4,134 $770,740 $186.44
10 Hidden Terrace at Mountains
Edge, Briggs Road and Hillridge
Street, Menifee / Lennar
1 4 / 2 1 / 2 2,336 $579,915 $248.25
2 4 / 3 2 / 2 2,590 7,000 sf lots $595,820 $230.05
3 3 / 3.5 2 / 2 3,092 4.5 sales/mo $684,065 $221.24
4 (NG) 7 / 4.5 2 / 2 4,134 $765,450 $185.16
11 Sage at Sumac Ridge / NE of
Scott Road and Menifee Road,
Menifee / Meritage Homes
S1 4 / 2.5 1 / 2 1,910 $594,000 $310.99
S2 4 / 3 2 / 2 2,320 5,000 sf lots $611,000 $263.36
S3 4 / 3 2 / 2 2,541 4.4 sales/mo $625,000 $245.97
S4 4 / 3 2 / 2 2,771 $638,000 $230.24
S5 5 / 3 2 / 2 2,948 $649,000 $220.15
12 South Shore at Rockport Ranch /
SWC of Old Newport Road and
Briggs Road, Menifee / Lennar
1 3 / 2 1 / 2 1,939 $623,730 $321.68
2 5 / 3.5 1 / 2 2,752 6,000 sf lots $648,405 $235.61
3 4 / 2.5 2 / 2 2,835 4.2 sales/mo $691,685 $243.98
4 (NG) 5 / 3.5 2 / 3 3,146 $726,830 $231.03
5 (NG) 7 / 4.5 2 / 3 4,134 $862,370 $208.60
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 253
Menifee Mayor and City Council August 21, 2024 Page 1011 of 1068 13 North Shore at Rockport Ranch /
SWC of Old Newport Road and
Briggs Road, Menifee / Lennar
1 3 / 2 1 / 2 1,764 5,000 sf lots $554,245 $314.20
2 4 / 3 2 / 2 2,443 4.3 sales/mo $635,915 $260.30
3 4 / 3 2 / 2 2,612 $644,085 $246.59
14 Legacy at Braverde / Wickerd
Road and El Centro Lane,
Menifee / Richmond American
1 3 / 2.5 2 / 2.5 2,780 $752,344 $270.63
2 3 / 2.5 2 / 3 2,910 7,200 sf lots $768,652 $264.14
3 3 / 2.5 2 / 3+ 3,020 3.1 sales/mo $797,390 $264.04
4 4 / 2.5 2 / 2 3,040 $741,572 $243.94
5 4 / 3.5 2 / 3 3,510 $705,990 $201.14
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 254
Menifee Mayor and City Council August 21, 2024 Page 1012 of 1068 APPRAISER’S QUALIFICATIONS
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 255
Menifee Mayor and City Council August 21, 2024 Page 1013 of 1068 QUALIFICATIONS OF KITTY S. SIINO, MAI
Education
Bachelor of Arts in Business Administration, Financial Investments, California State University, Long Beach, California (1980)
Post-Graduate Study, Real Estate Development, University of California, Irvine, California Appraisal Institute Classes: Uniform Standards of Professional Appraisal Practice, A & B; Appraisal Principles; Appraisal Procedures; Basic Income Capitalization; Advanced Income Capitalization; Narrative Report Writing; Advanced Applications, Case Studies.

Successfully completed all classes in addition to successfully completing the writing of a Demonstration Report and taking the Comprehensive Exam. Became a Member of the Appraisal Institute in December 1996. Have completed over 100 hours of continuing education through the Appraisal Institute every five years.

Employment
1988 - Present:

Self-Employed Real Estate Appraiser. Duties include the appraisal of various types of properties such as commercial, retail, industrial and vacant land. More complex assignments include easements, right-of-ways and special assessment districts. From 1996 to present, specialized in special assessment districts and community facilities districts appraisals for public entities, including Jurupa Community Services District, Corona Norco Unified School District, City of Corona, City of Chula Vista, City of San Marcos, and City of Moreno Valley.
1986-1988:

Project Manager of Development for Ferguson Partners, Irvine, California. Duties included land acquisitions; review of fee appraisals and valuations; analysis of proposed development; planning and design; and management of development, construction and lease-up. The types of properties developed were commercial and industrial. Duties ranged from raw, vacant site development through property management of recently developed projects.
1981 - 1986
Manager of Finance, Construction for Community Development Division, The Irvine Company, Irvine, California. Duties included originating and managing a newly formed division of finance to bridge between the accounting functions and project management functions. Worked with analysis and budgets for Community Development Division. Coordinated with cities in forming new Assessment Districts and Community Facilities Districts to finance major infrastructure improvements.

Types of properties were apartments and single-family residential lots on a for sale basis to apartment and homebuilders.
1980 - 1981
Investment Counselor, Newport Equity Funds, Newport Beach, California. Duties included obtaining private financing for residential properties, working with appraisals of properties and analyzing the investments.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 256
Menifee Mayor and City Council August 21, 2024 Page 1014 of 1068 Licenses
Real Estate Sales Person, State of California, 1980
Certified General Appraiser, State of California (#AG004793) Organizations
MAI #11145 - The Appraisal Institute
Public Financing
CASTOFF Meetings, 2006, 2007, 2008, 2009, 2010, 2011, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2022 and 2024
Speaker, Mello-Roos & Special Assessment Financing, UCLA Extension Public Policy Program, February 2009 and March 2011
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2022-1, Quartz Ranch Item Page Number: 257
Menifee Mayor and City Council August 21, 2024 Page 1015 of 1068

CITY OF MENIFEE
SUBJECT: Veterans and Military Families Advisory Committee Formation MEETING DATE: August 21, 2024
TO: Mayor and City Council
PREPARED BY: Mariana Mitchell, Community Services Manager REVIEWED BY: Jonathan Nicks, Deputy City Manager
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------

RECOMMENDED ACTION

1. Adopt a resolution establishing the formation of the Veterans and Military Families Advisory Committee.

DISCUSSION
On October 19, 2022 the City Council requested the opportunity to discuss the potential formation of a Veterans Advisory Committee. In the past, the Community Services Department hosted informal meetings for local veteran groups and service organizations to share resources.

However, during the many closures related to the COVID pandemic, this group moved toward email as the primary form of communication. Interactions have slowed and most groups have either integrated into the regular community partners meeting hosted by the Community Services Department or have become involved in specific veteran event committees.

This item was brought forward for discussion at three subsequent meetings and at the April 17, 2024 City Council meeting staff were directed to move forward with establishing an advisory committee that focuses on creating an inclusive network of support for active service members, veterans, and their families.

The Veterans and Military Families Advisory Committee (VMFA Committee) would serve as an advisory body to City Council and would focus on creating opportunities for veterans and military families to provide input on community projects, programs, and events while encouraging community engagement.

The proposed VMFA Committee would be comprised of five members, all appointed at-large and would not be restricted to living within the appointing Councilmember’s district. Additionally, the appointee need not be a veteran or active service member to participate.

Item Title: 12.2
Veterans and Military Families Advisory Committee Formation Item Page Number: 1
Menifee Mayor and City Council August 21, 2024 Page 1016 of 1068 City of Menifee Staff Report
VMFA Committee
August 21, 2024

Page 2 of 2 ends

Menifee City CouncilAugust 21, 2024

Menifee City Council
August 21, 2024