Agenda packet — Menifee City Council, November 6, 2024 (part 6 of 8)

occur later, on separate dates. The boundary of Improvement Area No. 1 is entirely within the Phase 1 property. However, the currently existing Improvement Area No. 2 includes property in both Phase 2 and Phase 3.

Since Phases 2 and 3 are under contract to be acquired at different times, the Developer has requested that the boundary of Improvement Area No. 2 be amended to create a new Improvement Area No. 3 (“Improvement Area No. 3”) therein. The new Improvement Area No. 2 boundary would consist of the Phase 2 property within Improvement Area No. 2, and the Improvement Area No. 3 boundary would consist of the Phase 3 property within the existing Improvement Area No. 2. No new property would be added to the CFD and all conditions of approval remain the same.

The proposed change proceedings are being undertaken to clearly delineate the phases within each improvement area as the project develops and as CFD bonds are issued. It is also possible that Phase 2 and/or Phase 3 could ultimately be acquired by a homebuilder other than Lennar. If that were to occur, having a separate improvement area for each builder would keep the CFD bond issuance and reimbursement process more orderly and would avoid the potential for different parties requesting the same CFD funds for their respective development costs.

In connection with the proposed change proceedings, the existing rate and method of apportionment of special taxes for Improvement Area No. 2 would be amended and restated to reduce the minimum taxable acreage (as property is being removed therefrom) and the tax rates for approved property and undeveloped property would be adjusted accordingly. A new rate and method of apportionment of special taxes for Improvement Area No. 3 would need to be approved, which would have the same tax rates for developed property as Improvement Area Nos. 1 and 2.

Improvement Area No. 2 currently is authorized to issue up to $45 million in bonds. It is proposed that the maximum authorized bonded indebtedness for Improvement Area No. 2 be reduced to $17 million and that the CFD be authorized to incur bonded indebtedness for Improvement Area No. 3 in a principal amount not to exceed $28 million.

On October 2, 2024, the City Council adopted a resolution to initiate the process for the change proceedings (the “Resolution of Consideration”). The Resolution of Consideration called for a public hearing to be held at this City Council meeting. Following the close of the public hearing, the City Council will be asked to adopt the resolution (the “Approving Resolution”) approving the change proceedings. Such resolution calls for an election to submit to the qualified voters in Improvement Area No. 2 the measure on the approval of the levy of special taxes in Improvement Area No. 2 in accordance with the Amended and Restated Rate and Method of Apportionment for Improvement Area No. 2. The Approving Resolution also calls for an election to submit to the qualified voters in Improvement Area No. 3, the measures on the levy of special taxes in Improvement Area No. 3 in accordance with the Rate and Method of Apportionment for Improvement Area No. 3 and the issuance of bonds for Improvement Area No. 3 in an amount not to exceed $28 million.

On file with the City Clerk are Certificates of the Registrar of Voters of Riverside County, attached for reference, certifying that there are no registered voters residing within the boundaries of Improvement Area No. 2 and Improvement Area No. 3. Accordingly, under the Mello-Roos Act, only landowners in Improvement Area No. 2 and Improvement Area No. 3 are eligible to vote at Item Title: 11.2
Ordinance

Introduction

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Facilities District No. 2022-3, Legado
Item Page Number: 2

Menifee Mayor and City Council
November 6, 2024
Page
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City of Menifee Staff Report
Community Facilities District No. 2022-3 (Legado)
November 6, 2024

Page 3 of 3 ends

the respective election with each owner having one vote for each acre (or portion thereof) that they own within Improvement Area No. 2 and Improvement Area No. 3, as applicable. The Developer and Lennar, as the owners of the property in Improvement Area No. 2 and Improvement Area No. 3, as applicable, would be landowner voters in the elections.

If the City Council approves the resolution calling the elections, the City Clerk would conduct the elections. The City Clerk would announce the elections results, and the City Council would be asked to adopt the resolution certifying the elections results. Based upon certification that two thirds of the votes cast are in favor of each proposition voted upon, the resolution certifying the election results directs the City Clerk to record an amended notice of special tax lien on the property within Improvement Area No. 2, a notice of cessation of special taxes on the portion of the property in Improvement Area No. 2 that is included in Improvement Area No. 3 and a notice of special tax lien on the property in Improvement Area No. 3. The City Council would then be asked to introduce the Ordinance authorizing the levy of the special tax within Improvement Area No. 2 and Improvement Area No. 3.

STRATEGIC PLAN OBJECTIVE
Regular City Business

FISCAL IMPACT
The Developer made a deposit to pay for the costs of the change proceedings that may be reimbursed to the Developer in accordance with the reimbursement agreement previously entered into with the Developer. There is no impact to the General Fund and no additional budget appropriation is required.

ATTACHMENTS

1. Resolution Approving Change Proceedings

2. Resolution Certifying Election Results

3. Ordinance Levying Special Taxes

4. Certificates of Registrar of Voters
Item Title: 11.2
Ordinance

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Facilities District No. 2022-3, Legado
Item Page Number: 3

Menifee Mayor and City Council
November 6, 2024
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RESOLUTION NO. 24-____

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)

OF THE CITY OF MENIFEE, AMENDING THE BOUNDARY MAP OF THE DISTRICT,

AMENDING THE RATE AND METHOD OF APPORTIONMENT FOR IMPROVEMENT AREA NO. 2, DECREASING THE MAXIMUM AUTHORIZED BONDED
INDEBTEDNESS FOR IMPROVEMENT AREA NO. 2, DESIGNATING IMPROVEMENT AREA NO. 3 OF THE DISTRICT AND DECLARING THE NECESSITY TO INCUR BONDED INDEBTEDNESS WITHIN IMPROVEMENT AREA NO. 3
WHEREAS, after a public hearing, on September 21, 2022, the City Council (the “City Council”) of the City of Menifee (the “City”) adopted Resolution Nos. 22-1222 (the “Resolution of Formation”) and 22-1223 (the “Resolution to Incur Bonded Indebtedness”) which formed Community Facilities District No. 2022-3 (Legado) of the City of Menifee (the “District” or “Community Facilities District No. 2022-3”), designated two improvement areas therein (“Improvement Area No. 1” and “Improvement Area No 2”) and called a special election on September 21, 2022, within each improvement area on three propositions relating to the levying of a special tax, the incurring of bonded indebtedness and the establishment of an appropriations limit for the District, which were approved by a more than two-thirds vote of the qualified electors within each improvement area on September 21, 2022; and WHEREAS, subsequent to formation, the District received a petition signed by BLC Fleming LLC, a Delaware limited liability company (the “Owner”), which currently owns more than 25% of the taxable land within Improvement Area No. 2, to initiate certain changes to (i) amend the boundary map of the District to exclude certain property from Improvement Area No. 2; (ii) amend and restate the original rate and method of apportionment of special tax for Improvement Area No. 2 (the “Original Improvement Area No. 2 Rate and Method”) in the form attached as Exhibit A (the “Amended Improvement Area No. 2 Rate and Method”) to Resolution No. 24-1500 (the “Resolution of Consideration”); (iii) designate Improvement Area No. 3 of the District within the property that is being excluded from Improvement Area No. 2 in connection with these proceedings, (iv) authorize the levy of a special tax within Improvement Area No. 3 in accordance with the rate and method of apportionment for Improvement Area No. 3 attached to the Resolution of Consideration as Exhibit C (the “Improvement Area No. 3 Rate and Method”); and (v) authorize the issuance of bonds of the District for Improvement Area No. 3 in a maximum principal amount not to exceed $28,000,000 (collectively, the “Change Proceedings”); and WHEREAS, on October 2, 2024, the City Council, acting as the legislative body of Community Facilities District No. 2022-3, approved the Resolution of Consideration, stating its intention to consider the approval of the Change Proceedings; and
WHEREAS, on November 6, 2024, this City Council conducted a noticed public hearing to determine whether it should proceed with the approval of the Change Proceedings; and WHEREAS, at the November 6, 2024, public hearing all persons desiring to be heard on all matters pertaining to the approval of the Change Proceedings were heard and a full and fair hearing was held; and
WHEREAS, the City Council determines herein that there have been fewer than twelve registered voters residing in Improvement Area No. 2 and Improvement Area No. 3 for the period of 90 days prior to November 6, 2024, and that the qualified electors within Improvement Area No. 2 and Improvement Area No. 3 are the landowners therein; and
Item Title: 11.2
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Community
Facilities District No. 2022-3, Legado
Item Page Number: 4

Menifee Mayor and City Council
November 6, 2024
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Resolution Approving Change Proceedings for CFD No. 2022-3 (Legado) 2 4
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WHEREAS, on the basis of all of the foregoing, the City Council has determined at this time to proceed with the approval of the Change Proceedings.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MENIFEE, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO) OF THE CITY OF MENIFEE, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

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

Section 2.The amended boundary map of the District as shown on the map designated “Proposed Amended Boundary Map Community Facilities District No. 2022-3 (Legado) City of Menifee, County of Riverside, State of California,” which map is on file in the office of the City Clerk and was recorded pursuant to Sections 3111 and 3113 of the Streets and Highways Code in the County Book of Maps of Assessment and Community Facilities Districts in the Assessor-County Clerk-Recorder’s office of the County of Riverside in Book No. 94 Page Nos. 36-38 on October 15, 2024, as Instrument No. 2024-0309563.

Section 3.The City Council hereby adopts the Amended Improvement Area No. 2 Rate and Method attached as Exhibit A to the Resolution of Consideration as the rate and method for Improvement Area No. 2. Except where funds are otherwise available, it is the intention of the City Council, subject to the approval of the eligible voters within Improvement Area No. 2, to levy the proposed special taxes at the rates set forth in Exhibit A to the Resolution of Consideration on all non-exempt property within Improvement Area No. 2 sufficient to pay for (i) the Facilities (as defined in the Resolution of Formation), (ii) the principal and interest and other periodic costs on the bonds proposed to be issued by the District for Improvement Area No. 2 to finance the Facilities and other expenses, including the establishment and replenishment of reserve funds, any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments that serve as the basis of a reserve fund in lieu of cash), administrative expenses and other expenses of the type permitted by Section 53345.3 of the Act; and (iii) the Incidental Expenses (as defined in the Resolution of Formation). The Amended Improvement Area No. 2 Rate and Method is described in detail in Exhibit A to the Resolution of Consideration, which is incorporated herein by this reference, and the City Council hereby finds Exhibit A to the Resolution of Consideration contains sufficient detail to allow each landowner within Improvement Area No. 2 to estimate the maximum amount of Special Taxes that may be levied against each parcel. The special tax in Improvement Area No. 2 shall be not be levied later than Fiscal Year 2064-2065.

The City Council hereby adopts the Improvement Area No. 3 Rate and Method attached as Exhibit C to the Resolution of Consideration as the rate and method for Improvement Area No. 3. Except where funds are otherwise available, it is the intention of the City Council, subject to the approval of the eligible voters within Improvement Area No. 3, to levy the proposed special taxes at the rates set forth in Exhibit C to the Resolution of Consideration on all non-exempt property within Improvement Area No. 3 sufficient to pay for (i) the Facilities (as defined in the Resolution of Formation), (ii) the principal and interest and other periodic costs on the bonds proposed to be issued by the District for Improvement Area No. 3 to finance the Facilities and other expenses, including the establishment and replenishment of reserve funds, any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments that serve as the basis of a reserve fund in lieu of cash), administrative expenses and other expenses of the type permitted by Section 53345.3 of the Act; and (iii) the Incidental Expenses (as defined in Item Title: 11.2
Ordinance

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Item Page Number: 5

Menifee Mayor and City Council
November 6, 2024
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Resolution Approving Change Proceedings for CFD No. 2022-3 (Legado) 3 4
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the Resolution of Formation). The Improvement Area No. 3 Rate and Method is described in detail in Exhibit C to the Resolution of Consideration, which is incorporated herein by this reference, and the City Council hereby finds Exhibit C to the Resolution of Consideration contains sufficient detail to allow each landowner within Improvement Area No. 3 to estimate the maximum amount of Special Taxes that may be levied against each parcel. The special tax in Improvement Area No. 3 shall be not be levied later than Fiscal Year 2064-2065.

Section 4.It is necessary to incur bonded indebtedness of the District in a maximum aggregate principal amount not to exceed $28,000,000 for Improvement Area No. 3. The indebtedness is to be incurred for the purpose of financing the costs of the Facilities and Incidental Expenses, and carrying out the powers and purposes of the District, including, but not limited to, financing the costs of selling the bonds, establishing and replenishing reserve funds, any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments that serve as the basis of a reserve fund in lieu of cash), administrative expenses and other expenses of the type permitted by Section 53345.3 of the Act.

The whole of the property within Improvement Area No. 3, other than property exempted from the special tax pursuant to the provisions of the Improvement Area No. 3 Rate and Method, shall pay for the bonded indebtedness of the District for Improvement Area No. 3 pursuant to the levy of the related special tax. The maximum term of any series of the bonds to be issued for Improvement Area No. 3 shall in no event exceed thirty-five (35) years from the date of issuance of the bonds, or such longer term as is then permitted by law.

The bonds shall bear interest at the rate or rates not to exceed the maximum interest rate permitted by law, payable annually or semiannually, or in part annually and in part semiannually, except the first interest payment may be for a period of less than six months, with the actual rate or rates and times of payment to be determined at the time or times of sale thereof.

The bonds may bear a variable or fixed interest rate, provided that such variable rate or the fixed rate shall not exceed the maximum rate permitted by Section 53531 of the Act, or any other applicable provision of law limiting the maximum interest rate on the bonds.

Section 5. At the time the District was formed, the maximum principal amount of bonded indebtedness that may be incurred by the District within Improvement Area No. 2 that was authorized was $45,000,000. The City Council, acting as the legislative body of the District, hereby determines that upon the authorization of the special taxes and bonded indebtedness for Improvement Area No. 3, it shall not incur bonded indebtedness within Improvement Area No. 2 in a principal amount in excess of $17,000,000.

Section 6.Written protests against the approval of the Amended Improvement Area No. 2 Rate and Method and the Improvement Area No. 3 Rate and Method and the Facilities and Incidental Expenses authorized to be financed by the District have not been filed by one- half or more of the registered voters within the boundaries of Improvement Area No. 2 or Improvement Area No. 3. The City Council hereby finds that the approval of the Amended Improvement Area No. 2 Rate and Method and the Improvement Area No. 3 Rate and Method and the Facilities and Incidental Expenses authorized to be financed by the District have not been precluded by a majority protest pursuant to Section 53337 of the Act.

Section 7.An election is hereby called within the amended boundaries of Improvement Area No. 2 on the proposition of approving the Amended Improvement Area No. 2 Rate and Method Item Title: 11.2
Ordinance

Introduction

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Facilities District No. 2022-3, Legado
Item Page Number: 6

Menifee Mayor and City Council
November 6, 2024
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Resolution Approving Change Proceedings for CFD No. 2022-3 (Legado) 4 4
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and the Facilities and Incidental Expenses authorized to be financed by the District. The proposition to be placed on the ballot for Improvement Area No. 2 is attached hereto as Exhibit A. Following certification of landowner votes in favor of the adoption of the Amended Improvement Area No. 2 Rate and Method and the Facilities and Incidental Expenses authorized to be financed by the District, the District shall record an amended notice of special tax lien for Improvement Area No. 2 and a notice of cessation of the special tax of Improvement Area No. 2 with respect to the property that is removed therefrom.

An election is hereby called within the boundaries of Improvement Area No. 3 on the proposition of approving the Improvement Area No. 3 Rate and Method and the Facilities and Incidental Expenses authorized to be financed by the District and the incurring of bonded indebtedness of the District for Improvement Area No. 3. The propositions to be placed on the ballot for Improvement Area No. 3 is attached hereto as Exhibit B. Following certification of landowner votes in favor of the adoption of the Improvement Area No. 3 Rate and Method and the Facilities and Incidental Expenses authorized to be financed by the District and the incurring of bonded indebtedness for Improvement Area No. 3, the District shall record a notice of special tax lien for Improvement Area No. 3.

Section 8.The date of the foregoing elections for Improvement Area No. 2 and Improvement Area No. 3 shall be November 6, 2024, or such later date as is consented to by the City Clerk and the landowners within Improvement Area No. 2 and Improvement Area No. 3. The City Clerk shall conduct the election. Except as otherwise provided by the Act, the elections shall be conducted by personally delivered or mailed ballots and, except as otherwise provided by the Act, the elections shall be conducted in accordance with the provisions of law regulating elections of the City insofar as such provisions are determined by the City Clerk to be applicable.

Section 9.It is hereby found that there are no registered voters within the territory of Improvement Area No. 2, and, pursuant to Section 53326 of the Act, each landowner who is the owner of record on the date hereof, or the authorized representative thereof, shall have one vote for each acre or portion thereof that he or she owns within Improvement Area No. 2.

It is hereby found that there are no registered voters within the territory of Improvement Area No. 3, and, pursuant to Section 53326 of the Act, each landowner who is the owner of record on the date hereof, or the authorized representative thereof, shall have one vote for each acre or portion thereof that he or she owns within Improvement Area No. 3.

Section 10.This Resolution shall be effective upon its adoption. {{SIGNATURES ON NEXT PAGE}}
Item Title: 11.2
Ordinance

Introduction

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Community
Facilities District No. 2022-3, Legado
Item Page Number: 7

Menifee Mayor and City Council
November 6, 2024
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Resolution Approving Change Proceedings for CFD No. 2022-3 (Legado) 5 4
9 3
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PASSED, APPROVED AND ADOPTED this the 6th day of November, 2024. __________________________
Bill Zimmerman, Mayor
Attest:
___________________________
Stephanie Roseen, Acting City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.2
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Facilities District No. 2022-3, Legado
Item Page Number: 8

Menifee Mayor and City Council
November 6, 2024
Page
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EXHIBIT A

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2022-3 OF THE

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

SPECIAL ELECTION
November 6, 2024
This ballot represents ___ votes.

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

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

PROPOSITION A: Shall a special tax with an Amended Improvement Area No. 2 Rate and Method of Apportionment as provided in Exhibit A to Resolution No. 24-__ of the City Council of the City of Menifee for Improvement Area No. 2 of Community Facilities District No. 2022-3 (Legado) of the City of Menifee (the “District”) be levied to pay for the Facilities, Incidental Expenses and other purposes described in Resolution No. 22-1222, including the payment of the principal of and interest on bonds issued to finance the Facilities and Incidental Expenses for the District?
YES 
NO 
Item Title: 11.2
Ordinance

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Facilities District No. 2022-3, Legado
Item Page Number: 9

Menifee Mayor and City Council
November 6, 2024
Page
1083 of 1464

EXHIBIT B

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2022-3 OF THE

CITY OF MENIFEE (LEGADO)
(IMPROVEMENT AREA NO. 3)

SPECIAL ELECTION
November 6, 2024
This ballot represents ___ votes.

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

PROPOSITION B: Shall a special tax with a Improvement Area No. 3 Rate and Method of Apportionment as provided in Exhibit C to Resolution No. 24-__ of the City Council of the City of Menifee for Improvement Area No. 3 of Community Facilities District No. 2022-3 (Legado) of the City of Menifee (the “District”) be levied to pay for the Facilities, Incidental Expenses and other purposes described in Resolution No. 22-1222, including the payment of the principal of and interest on bonds issued to finance the Facilities and Incidental Expenses for the District?
YES 
NO 
PROPOSITION C: Shall the District incur an indebtedness and issue bonds in the maximum principal amount of $28,000,000 for Improvement Area No. 3 therein with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 22- 1222 of the City Council of the City of Menifee?
YES 
NO 
Item Title: 11.2
Ordinance

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Item Page Number: 10

Menifee Mayor and City Council
November 6, 2024
Page
1084 of 1464

RESOLUTION NO. 24-____

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE,

ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF CITY OF MENIFEE COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO), CERTIFYING THE RESULTS OF THE NOVEMBER 6, 2024 SPECIAL

ELECTION
WHEREAS, the City Council of City of Menifee (the “City Council”), acting as the legislative body of Community Facilities District No. 2022-3 (Legado) of the City of Menifee (the “District”) called and duly held an election on November 6, 2024 within the boundaries of Improvement Area No. 2 (“Improvement Area No. 2”) and Improvement Area No. 3 (“Improvement Area No. 3”) of the District pursuant to Resolution No. 24-_____ for the purpose of presenting to the qualified electors within Improvement Area No. 2 the proposition attached hereto as Exhibit A and to qualified electors within Improvement Area No. 3 the propositions attached hereto as Exhibit B; and
WHEREAS, there has been presented to the City Council a certificate of the City Clerk canvassing the results of the election, a copy of which is attached hereto as Exhibit C.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MENIFEE, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO) OF

THE CITY OF MENIFEE, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

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

Section 2. Proposition A presented to the qualified electors of Improvement Area No. 2 on November 6, 2024 was approved by more than two-thirds of the votes cast at the election held for Improvement Area No. 2, and Proposition A has carried. The City Council is hereby authorized to levy on the land within Improvement Area No. 2 the special tax described in Proposition A for the purposes described therein and to take the necessary steps to levy the special tax authorized by Proposition A.

Section 3. Propositions B and C presented to the qualified electors of Improvement Area No. 3 on November 6, 2024 were approved by more than two-thirds of the votes cast at said election and Propositions B and C each has carried. The City Council, acting as the legislative body of the District, is hereby authorized to levy on the land within Improvement Area No. 3 the special tax described in Proposition B for the purposes described therein and to take the necessary steps to levy the special tax authorized by Proposition B and to issue bonds in an amount not to exceed $28,000,000 specified in Proposition C.

Section 4. The City Clerk is hereby directed to record in the Office of the County Recorder within fifteen days of the date hereof an amended and restated notice of special tax lien for Improvement Area No. 2 and a notice of special tax lien for Improvement Area No. 3 which Bond Counsel to the District shall prepare in the form required by Streets and Highways Code Section 3114.5. In addition, the City Clerk is Item Title: 11.2
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Introduction

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Facilities District No. 2022-3, Legado
Item Page Number: 11

Menifee Mayor and City Council
November 6, 2024
Page
1085 of 1464

2 4
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7 1
hereby directed to record in the Office of the County Recorder a notice of cessation of special tax of Improvement Area No. 2 with respect to the property that is removed therefrom in connection with the proceedings described herein.

PASSED, APPROVED AND ADOPTED this the 6th day of November, 2024. __________________________
Bill Zimmerman, Mayor
Attest:
___________________________
Stephanie Roseen, Acting City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.2
Ordinance

Introduction

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First

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Proceedings

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Improvement

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Nos.

2 and

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Community
Facilities District No. 2022-3, Legado
Item Page Number: 12

Menifee Mayor and City Council
November 6, 2024
Page
1086 of 1464

EXHIBIT A

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2022-3 OF THE

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

SPECIAL ELECTION
November 6, 2024
This ballot represents ___ votes.

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

Introduction

and

First

Reading

for

Change

Proceedings

for

Improvement

Area

Nos.

2 and

3 of

Community
Facilities District No. 2022-3, Legado
Item Page Number: 13

Menifee Mayor and City Council
November 6, 2024
Page
1087 of 1464

EXHIBIT B

SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2022-3 OF THE

CITY OF MENIFEE (LEGADO)
(IMPROVEMENT AREA NO. 3)

SPECIAL ELECTION
November 6, 2024
This ballot represents ___ votes.

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

Introduction

and

First

Reading

for

Change

Proceedings

for

Improvement

Area

Nos.

2 and

3 of

Community
Facilities District No. 2022-3, Legado
Item Page Number: 14

Menifee Mayor and City Council
November 6, 2024
Page
1088 of 1464

EXHIBIT C

CERTIFICATE OF CITY CLERK

AS TO THE RESULTS OF THE CANVASS OF THE ELECTION RETURNS I, Stephanie Roseen, Acting City Clerk of the City of Menifee, do hereby certify that I have examined the returns of the Special Elections for Improvement Area No. 2 and Improvement Area No. 3 of Community Facilities District No. 2022-3 (Legado) of the City of Menifee. The elections were held in the City Council Chambers, 29844 Haun Road, Menifee, California, on November 6, 2024. I caused to be delivered ballots to each qualified elector. ____ (__) ballots were returned.

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

PROPOSITION A
YES:

NO:

TOTAL:

I further certify that the results of said election and the number of votes cast for and against Propositions B and C for Improvement Area No. 3 are as follows:

PROPOSITION B PROPOSITION C
YES: YES:

NO: NO:

TOTAL: TOTAL:

Dated this 6th day of November, 2024.

Stephanie Roseen, Acting City Clerk
City of Menifee
Item Title: 11.2
Ordinance

Introduction

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First

Reading

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Change

Proceedings

for

Improvement

Area

Nos.

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3 of

Community
Facilities District No. 2022-3, Legado
Item Page Number: 15

Menifee Mayor and City Council
November 6, 2024
Page
1089 of 1464

4895-0436-2220v3/200299-0011
ORDINANCE NO. 2024-___

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA

ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO) OF THE CITY OF MENIFEE

AUTHORIZING THE LEVY OF SPECIAL TAXES WITHIN IMPROVEMENT AREA NO. 2 AND IMPROVEMENT AREA NO. 3
WHEREAS, on August 3, 2022, the City Council (the “City Council”) of the City of Menifee (the “City”) adopted Resolution No. 22-1187 declaring its intention to form Community Facilities District No. 2022-3 (Legado) of the City of Menifee (the “District”) and Improvement Area No. 1 (“Improvement Area No. 1”) and Improvement Area No. 2 (“Improvement Area No. 2”) therein pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, comprising Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”), and its Resolution No. 22- 1188 declaring its intention to incur bonded indebtedness for each of Improvement Area No. 1 and Improvement Area No. 2; and
WHEREAS, on September 21, 2022, after providing all notice required by the Act, the City Council conducted a noticed public hearing required by the Act relative to the proposed formation of the District, the designation of Improvement Area No. 1 and Improvement Area No. 2, the proposed levy of a special tax therein to finance certain public facilities described in Resolution No. 22-1187 and to secure the payment of any bonded indebtedness of the District for Improvement Area No. 1 and Improvement Area No. 2, and the proposed issuance of up to $40,000,000 of bonded indebtedness for Improvement Area No. 1 and up to $45,000,000 of bonded indebtedness for Improvement Area No. 2, as described in Resolution No. 22-1188; and
WHEREAS, at the September 21, 2022, public hearing, all persons desiring to be heard on all matters pertaining to the formation of the District, the designation of the Improvement Areas and the proposed levy of the special tax to finance the facilities described in Resolution No. 22-1187 and to secure the payment of up to $40,000,000 of bonded indebtedness for Improvement Area No. 1 and of up to $45,000,000 of bonded indebtedness for Improvement Area No. 2 as described in Resolution No. 22-1188 were heard and a full and fair hearing was held; and WHEREAS, on September 21, 2022, the City Council adopted Resolution Nos. 22-1222 and 22- 1223, which formed the District, designated Improvement Area No. 1 and Improvement Area No. 2 and called a special election within each of Improvement Area No. 1 and Improvement Area No. 2 on September 21, 2022, in each case on three propositions relating to the levy of a special tax within each Improvement Area, the issuance of the Bonds by the District for each Improvement Area and the establishment of an appropriations limit within the District; and WHEREAS, on September 21, 2022, a special election was held within Improvement Area No. 1 at which the qualified electors therein approved by more than a two-thirds vote Propositions A, B and C set forth in Attachment B to Resolution No. 22-1222 authorizing the levy of a special tax within Improvement Area No. 1 for the purposes described in Resolution No. 22-1222, the issuance of the bonds for Improvement Area No. 1 as described in Resolution No. 22-1222 and establishing an appropriations limit for the District; and
WHEREAS, on September 21, 2022, a special election was held within Improvement Area No. 2 at which the qualified electors therein approved by more than a two-thirds vote Propositions D, E and F set forth in Attachment C to Resolution No. 22-1222 authorizing the levy of a special tax within Improvement Area No. 2 for the purposes described in Resolution No. 22-1222, the issuance of the Bonds for Improvement Area No. 2 as described in Resolution No. 22-1222 and establishing an appropriations limit for the District; and
Item Title: 11.2
Ordinance

Introduction

and

First

Reading

for

Change

Proceedings

for

Improvement

Area

Nos.

2 and

3 of

Community
Facilities District No. 2022-3, Legado
Item Page Number: 16

Menifee Mayor and City Council
November 6, 2024
Page
1090 of 1464

Ordinance Levying Special Taxes for Improvement Area Nos. 2 and 3 of CFD No. 2022-3 Ordinance No. 24-___
2 4895-0436-2220v3/200299-0011
WHEREAS, pursuant to certain change proceedings and an election held within Improvement Area No. 2 on November 6, 2024, certain property was removed from Improvement Area No. 2 and an amended and restated rate and method of apportionment was approved for Improvement Area No. 2 as attached to Resolution No. 24-_____ adopted by the City Council on November 6, 2024 (the “Amended Improvement Area No. 2 Rate and Method”); and
WHEREAS, pursuant to certain change proceedings certain property previously included within Improvement Area No. 2 was removed from Improvement Area No. 2 and such property has been designated as Improvement Area No. 3 (“Improvement Area No. 3” and together with Improvement Area No. 1 and Improvement Area No. 2 (as modified), the “Improvement Areas”); and WHEREAS, pursuant to an election held within Improvement Area No. 3 on November 6, 2024, a rate and method of apportionment was approved for Improvement Area No. 3 as attached to Resolution No. 24-_____ adopted by the City Council on November 6, 2024 (the “Improvement Area No. 3 Rate and Method”) and the issuance of bonds for Improvement Area No. 3 (together with bonds of Improvement Area No. 1 and Improvement Area No. 2, the “Bonds”) in a principal amount up to $28,000,000 was authorized; and
WHEREAS, in connection with the change proceedings described above, the City Council determined that the District shall not issue bonds for Improvement Area No. 2 in a principal amount exceeding $17,000,000.

NOW, THEREFORE, the City Council of the City of Menifee, California does ordain as follows:

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

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

By the passage of this Ordinance, the City Council authorizes and levies special taxes within Improvement Area No. 3 pursuant to Sections 53328 and 53340 of the Act at the rates and in accordance with Improvement Area No. 3 Rate and Method, which is incorporated by reference herein.

The special taxes are hereby levied commencing in the fiscal year specified in the Improvement Area No. 3 Rate and Method and in each fiscal year thereafter until payment in full of the Bonds issued by the District for Improvement Area No. 3 (including any bonds issued to refund the Bonds), payment of all costs of the public facilities authorized to be financed by the District for Improvement Area No. 3, and payment of all costs of administering the District allocable to Improvement Area No. 3.

Section 3.Each of the Mayor, the City Manager, the Chief Financial Officer, or their written designees (each, an “Authorized Officer”), acting alone, is hereby authorized and directed each fiscal year to determine the specific special tax rates and amounts to be levied in such fiscal year on each parcel of real property within Improvement Area No. 2 and Improvement Area No. 3, in the manner and as provided in the Amended Improvement Area No. 2 Rate and Method and the Improvement Area No. 3 Rate and Method, respectively. The special tax rate levied on a parcel pursuant to the Amended Improvement Area No. 2 Rate and Method and the Improvement Area No. 3 Rate and Method shall not exceed the maximum rate set forth in the Amended Improvement Area No. 2 Rate and Method and the Item Title: 11.2
Ordinance

Introduction

and

First

Reading

for

Change

Proceedings

for

Improvement

Area

Nos.

2 and

3 of

Community
Facilities District No. 2022-3, Legado
Item Page Number: 17

Menifee Mayor and City Council
November 6, 2024
Page
1091 of 1464

Ordinance Levying Special Taxes for Improvement Area Nos. 2 and 3 of CFD No. 2022-3 Ordinance No. 24-___
3 4895-0436-2220v3/200299-0011
Improvement Area No. 3 Rate and Method for such parcel, but the special tax may be levied at a lower rate. Each Authorized Officer is hereby authorized and directed to provide all necessary information to the Treasurer-Tax Collector of the County of Riverside and to otherwise take all actions necessary in order to effect proper billing and collection of the special tax within Improvement Area No. 2 and Improvement Area No. 3, so that the special tax shall be levied and collected in sufficient amounts and at times necessary to satisfy the financial obligations of the District for Improvement Area No. 2 and Improvement Area No. 3 in each fiscal year, and with respect to Special Tax, until the Bonds issued by the District for Improvement Area No. 2 and Improvement Area No. 3, as applicable, are paid in full, the facilities financed for Improvement Area No. 2 and Improvement Area No. 3, as applicable, have been paid for, and provision has been made for payment of all of the administrative costs of the District.

Section 4.Properties or entities of the state, federal or other local governments shall be exempt from the special tax for Improvement Area No. 2, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act and Section F of the Amended Improvement Area No. 2 Rate and Method. No other properties or entities within Improvement Area No. 2 are exempt from the special tax unless the properties or entities are expressly exempted in Resolution Nos. 22-1222 and 24-____ or in a resolution of consideration to levy a new special tax or special taxes or to alter the Amended Improvement Area No. 2 Rate and Method or an existing special tax as provided in Section 53334 of the Act.

Properties or entities of the state, federal or other local governments shall be exempt from the special tax for Improvement Area No. 3, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act and Section F of the Improvement Area No. 3 Rate and Method. No other properties or entities within Improvement Area No. 3 are exempt from the special tax unless the properties or entities are expressly exempted in Resolution Nos. 22-1222 and 24-____ or in a resolution of consideration to levy a new special tax or special taxes or to alter the Improvement Area No. 3 Rate and Method or an existing special tax as provided in Section 53334 of the Act.

Section 5.All of the collections of the special tax within Improvement Area No. 2 shall be used as provided for in the Act, the Amended Improvement Area No. 2 Rate and Method and Resolution Nos. 22-1222 and 24-____.

All of the collections of the special tax within Improvement Area No. 3 shall be used as provided for in the Act, the Improvement Area No. 3 Rate and Method and Resolution Nos. 22-1222 and 24- ____.

Section 6.The special tax within Improvement Area No. 2 and Improvement Area No. 3 shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem taxes (which such procedures include the exercise of all rights and remedies permitted by law to make corrections, including, but not limited to, the issuance of amended or supplemental tax bills), as such procedure may be modified by law or by this City Council from time to time.

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

Item Title: 11.2
Ordinance

Introduction

and

First

Reading

for

Change

Proceedings

for

Improvement

Area

Nos.

2 and

3 of

Community
Facilities District No. 2022-3, Legado
Item Page Number: 18

Menifee Mayor and City Council
November 6, 2024
Page
1092 of 1464

Ordinance Levying Special Taxes for Improvement Area Nos. 2 and 3 of CFD No. 2022-3 Ordinance No. 24-___
4 4895-0436-2220v3/200299-0011
As a cumulative remedy, if any amount levied as a special tax for payment of the interest or principal of the Bonds issued by the District for Improvement Area No. 3 (including any bonds issued to refund such Bonds), together with any penalties and other charges accruing under this Ordinance, are not paid when due, the City Council may, not later than four years after the due date of the last installment of principal on such Bonds (including any bonds issued to refund such Bonds), order that the same be collected by an action brought in the superior court to foreclose the lien of such special tax within Improvement Area No. 3, as authorized by the Act.

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

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

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

Section 11.This Ordinance supersedes Ordinance No 2022-353 adopted on October 5, 2022, with respect to Improvement Area No. 2. All other provisions on Ordinance No 2022-353 remain in full force and effect.

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

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

This Ordinance was introduced and read on the 6th day of November, 2024 and APPROVED AND ADOPTED this ___ day of ____________, 2024.
___________________________
Bill Zimmerman, Mayor
Attest:
___________________________
Stephanie Roseen, Acting City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.2
Ordinance

Introduction

and

First

Reading

for

Change

Proceedings

for

Improvement

Area

Nos.

2 and

3 of

Community
Facilities District No. 2022-3, Legado
Item Page Number: 19

Menifee Mayor and City Council
November 6, 2024
Page
1093 of 1464

Item Title: 11.2
Ordinance

Introduction

and

First

Reading

for

Change

Proceedings

for

Improvement

Area

Nos.

2 and

3 of

Community
Facilities District No. 2022-3, Legado
Item Page Number: 20

Menifee Mayor and City Council
November 6, 2024
Page
1094 of 1464

Item Title: 11.2
Ordinance

Introduction

and

First

Reading

for

Change

Proceedings

for

Improvement

Area

Nos.

2 and

3 of

Community
Facilities District No. 2022-3, Legado
Item Page Number: 21

Menifee Mayor and City Council
November 6, 2024
Page
1095 of 1464

CITY OF MENIFEE
SUBJECT: Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch
MEETING DATE: November 6, 2024
TO: Mayor and City Council
PREPARED BY: Lauri Lockwood, Financial Analyst
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------

RECOMMENDED ACTION

1. Adopt a resolution authorizing the issuance of special tax bonds and the execution and delivery of bond documents in connection with Community Facilities District 2023-1, Rockport Ranch, at the southwest corner of Old Newport Road and Briggs Road; and

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

DISCUSSION
Background
The City Council previously completed the necessary proceedings to establish Community Facilities District No. 2023-1, Rockport Ranch, of the City of Menifee (the “District”). As part of those proceedings, the City Council declared the necessity to issue bonds on behalf of the District pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the “Act”).

On June 7, 2023, the City Council adopted the Resolution of Formation, which established the District, authorized the levy of a special tax (the “Special Tax”) within the District, determined the necessity to incur bonded indebtedness in an amount not to exceed $23 million, and called an election on the proposition of incurring bonded indebtedness, levying the Special Tax and setting an appropriations limit. On the same date, an election was held within the District in which the property owner within the District approved the proposition authorizing the issuance of bonds.

The District contains approximately 39.6 taxable acres and is located at the southwest corner of Old Newport Road and Briggs Road within the City. The developer of the property within the Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 1

Menifee Mayor and City Council
November 6, 2024
Page
1096 of 1464

CFD 2023-1, Rockport Ranch, Issuance of Special Tax Bonds November 6, 2024

Page 2 of 3 ends

2 4
1 8
District is Lennar Homes of California, LLC, a California limited liability company (“Lennar”). The project within the District is planned for 305 single-family detached homes and is being marketed by Lennar as “Rockport Ranch.”
As of August 30, 2024, the date of value of the Appraisal, Lennar had completed and conveyed 160 homes within the District to individual homeowners, and as of such date, Lennar owned nine model homes, 81 homes in various stages of construction, and 32 near-finished lots. In addition, as of such date, a land banking entity for Lennar Homes owned 23 lots which were under contract to be acquired by Lennar Homes. Development has progressed since August 30. As of October 1, 2024, Lennar Homes acquired 1 additional lot from the land bank and closed an additional 9 homes to homeowners in the District (for a total of 169 closings to homeowners). Lennar currently expects to complete and convey all homes planned within the District to individual homeowners by September 2025.

Annual debt service on the proposed Special Tax Bonds, Series 2024A (the “2024A Bonds”) will be sized based on the expected Special Tax revenues to be received from all 305 parcels to be developed in the District.

The resolution before the City Council authorizes the issuance of the 2024A Bonds and the execution and delivery of certain documents in connection therewith as further described in the following paragraphs.

Based on current market conditions, the 2024A Bonds are estimated to have a par amount of approximately $17.275 million with a final maturity of September 1, 2055. Proceeds from the 2024A Bonds will primarily finance public improvements benefitting the development within the District. The final par amount and interest rate structure will be determined when the 2024A Bonds are priced and sold, which is expected to occur in November 2024. Following the issuance of the 2024A Bonds, no additional parity bonds will be permitted except for refunding bonds.

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

The property owners are expected to pay Special Taxes of approximately $2,700 to $4,960 per parcel in Fiscal Year 2025/2026, depending on the size of the home. Such Special Taxes will increase 2.0% annually.

Given the level of development noted above and pursuant to the City policy, Lennar Homes will provide a Letter of Credit that may be drawn upon by the District to cover payment of special taxes levied on property owned by Lennar Homes and the land bank. The initial term of the Letter of Credit is one year and will be renewed each year until certain development and conveyance thresholds are met.

As part of the eligible facilities and expenses to be reimbursed with CFD proceeds is a one-time $3.9 million mitigation fee paid by the developer because of project density changes from the original project plans. Since it is included within the CFD eligible reimbursable expenses, the mitigation fee proceeds must be used towards the construction, purchase, modification, expansion Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 2

Menifee Mayor and City Council
November 6, 2024
Page
1097 of 1464

CFD 2023-1, Rockport Ranch, Issuance of Special Tax Bonds November 6, 2024

Page 3 of 3 ends

2 4
1 8
or rehabilitation of public facilities. The mitigation fee is separate from the CFD bond premium.

Documents to be Approved
Approval of the attached Resolution authorizes the sale of the proposed 2024A Bonds and the execution of the following documents attached to this staff report:
✓Preliminary Official Statement
✓Bond Indenture
✓Continuing Disclosure Certificate
✓Bond Purchase Agreement
Bond Counsel and the City Attorney have reviewed the attached legal and financing documents on behalf of the City and the District. If this resolution is approved, City staff will continue to work with the financing team to finalize all the aforementioned documents. The pricing date is targeted for November 2024, with bond closing anticipated in December 2024.

STRATEGIC PLAN OBJECTIVE
Responsive and Transparent Community Government

FISCAL IMPACT
The 2024A bonds are paid from Special Taxes levied in the District. The property owners are expected to pay Special Taxes of approximately $2,700 to $4,960 per parcel in Fiscal Year 2025/2026, depending on the size of the home. Such Special Taxes will increase at 2.0% per year. There is no fiscal impact to the City’s General Fund.

ATTACHMENTS

1. Project Map

2. Good Faith Estimates

3. Resolution of Issuance

4. Preliminary Official Statement

5. Bond Indenture

6. Continuing Disclosure Certificate

7. Bond Purchase Agreement

8. Appraisal Report
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 3

Menifee Mayor and City Council
November 6, 2024
Page
1098 of 1464

OLD NEWPORT RD

BRIGGS RD

DOMENIGONI PKWY

LA PIEDRA
0 800 1,600400
Feet
CFD Boundary

LOCATION MAP
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT)

CITY OF MENIFEE
¹
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 4

Menifee Mayor and City Council
November 6, 2024
Page
1099 of 1464

CFD 2023-1

MENIFEE

WILDOMAR
PERRIS

MURRIETA

CANYON LAKE
·|}þ79
§¨¦215
§¨¦15

REGIONAL MAP
COMMUNITY FACILITIES DISTRICT NO. 2023-1
(ROCKPORT)
¹
0 1.5 30.75
Miles
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 5

Menifee Mayor and City Council
November 6, 2024
Page
1100 of 1464

GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the District by Urban Futures, Inc., the District’s Municipal Advisor (the “Municipal Advisor”) in consultation with Raymond James & Associates, Inc., the Underwriter for the Bonds.

Principal Amount. The Municipal Advisor has informed the City that, based on the City’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $17,275,000 (the “Estimated Principal Amount”).

True Interest Cost of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 4.69%.

Finance Charge of the Bonds. The Municipal Advisor has informed the City that, assuming the Estimated Principal Amount of the Bonds is sold and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $442,750.

Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserve fund funded with proceeds of the Bonds, is $16,132,835.

Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $36,838,465.

The foregoing estimates constitute good faith estimates only. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the Estimated Principal Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 6

Menifee Mayor and City Council
November 6, 2024
Page
1101 of 1464

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 7

Menifee Mayor and City Council
November 6, 2024
Page
1102 of 1464

RESOLUTION NO. 24-___

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA,

ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH) OF THE CITY OF MENIFEE AUTHORIZING THE ISSUANCE OF ITS SPECIAL TAX BONDS, SERIES 2024 IN A PRINCIPAL AMOUNT NOT TO EXCEED TWENTY MILLION DOLLARS ($20,000,000) AND APPROVING

CERTAIN DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN CONNECTION

THEREWITH
WHEREAS, the City Council (the “City Council”) of the City of Menifee (the “City”), has heretofore undertaken proceedings to establish Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee (the “District”) and declared the necessity to issue bonds on behalf of the District pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (Act); and WHEREAS, pursuant to Resolution Nos. 23-1327 and 23-1328 adopted by the legislative body of the District on June 7, 2023, certain bond propositions were submitted to the qualified electors within the District, and were approved by more than two-thirds of the votes cast at the election held on June 7, 2023; and
WHEREAS, the legislative body of the District desires to issue a first series of bonds for the District at this time under the Act to finance certain public facilities which the District is authorized to finance (the “Facilities”); and
WHEREAS, the District desires to finance certain Facilities through the issuance of bonds in an aggregate principal amount not to exceed $20,000,000 designated as the “Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee Special Tax Bonds, Series 2024” (the “Bonds”); and WHEREAS, in order to effect the issuance of the Bonds, the District desires to enter into various agreements and approve certain documents in substantially the forms presented herein; and WHEREAS, based on the appraisal of real property prepared by Integra Realty Resources (the “Appraisal”) of property within the District, the value of the real property in the District subject to the special tax to pay debt service on the Bonds is more than three times the sum of the principal amount of the Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District as calculated in the manner set forth in Section 53345.8(a) of the Act; and
WHEREAS, the City Council has determined in accordance with Section 53360.4 of the Act that a negotiated sale of the Bonds to Raymond James & Associates, Inc. (the “Underwriter”) in accordance with the terms of the Bond Purchase Agreement for the Bonds to be entered into by the District and the Underwriter (the “Bond Purchase Agreement”) approved as to form by this City Council herein will result in a lower overall cost to the District than a public sale; and WHEREAS, the District has determined to adopt the City’s Debt Issuance and Management Policy as the debt management policy of the District.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee, California, acting as the legislative body of Community Facilities District No. 2023-1, Rockport Ranch, of the City of Menifee, hereby resolves, determines and orders as follows:

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 8

Menifee Mayor and City Council
November 6, 2024
Page
1103 of 1464

Resolution Authorizing Issuance of Special Tax Bonds CFD No. 2023-1 (Rockport Ranch) 2 Section 2. The issuance of the Bonds is hereby authorized in an aggregate principal amount not to exceed $20,000,000, with the exact principal amount to be determined by the official signing the Bond Purchase Agreement in accordance with Section 5 below. The City Council hereby determines that it is prudent in the management of the District’s fiscal affairs to issue the Bonds. The Bonds shall mature on the dates and pay interest at the rates set forth in the Bond Purchase Agreement to be executed on behalf of the District in accordance with Section 5 hereof. All other provisions of the Bonds shall be governed by the terms and conditions of the Bond Indenture (the “Indenture”), which Indenture is hereby approved in substantially the form on file with the City Clerk, with such additions thereto and changes therein (including, but not limited to, changes in the amount to be maintained in the Reserve Account (as defined in the Indenture)) as the officer or officers executing the same deem necessary to enhance the security for the Bonds, to cure any ambiguity or defect therein, to insert the offering price(s), interest rate(s), selling compensation, principal amount per maturity, redemption dates and prices and such other related terms and provisions as limited by Section 5 hereof or to conform any provisions therein to the Bond Purchase Agreement or the Official Statement delivered to the Underwriter of the Bonds. Approval of such changes shall be conclusively evidenced by the execution and delivery of the Indenture by one of the following: the Mayor, the City Manager, Chief Financial Officer (or any acting or interim of such positions) or their written designees (each, an “Authorized Officer” and collectively, the “Authorized Officers”), each of whom is authorized to execute the Indenture. Capitalized terms used in this Resolution which are not defined herein have the meanings ascribed to them in the Indenture.

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

Section 4. The covenants set forth in the Indenture to be executed in accordance with Section 2 above are hereby approved, shall be deemed to be covenants of the City Council and shall be complied with by the District and its officers. The Indenture shall constitute a contract between the District and the Owners of the Bonds.

Section 5. The form of the Bond Purchase Agreement presented at this meeting is hereby approved and each of the Authorized Officers is hereby authorized to execute the Bond Purchase Agreement, with such additions thereto and changes therein relating to dates and numbers as are necessary to conform the Bond Purchase Agreement to the dates, amounts and interest rates applicable to the Bonds as of the sale date. Approval of such additions and changes shall be conclusively evidenced by the execution and delivery of the Bond Purchase Agreement by one or more of such Authorized Officers; provided, however, that the Bond Purchase Agreement shall be signed only if the Underwriter’s discount does not exceed 1% of the principal amount of the Bonds and only if the true interest cost on the Bonds does not exceed 5.50%. Each of the Authorized Officers is authorized to determine the day on which the Bonds are to be priced in order to attempt to produce the lowest borrowing cost for the District and may reject any terms presented by the Underwriter if determined not to be in the best interest of the District.

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 9

Menifee Mayor and City Council
November 6, 2024
Page
1104 of 1464

Resolution Authorizing Issuance of Special Tax Bonds CFD No. 2023-1 (Rockport Ranch) 3 Section 7. The form of the Preliminary Official Statement presented at this meeting is hereby approved and the Underwriter is hereby authorized to distribute the Preliminary Official Statement to prospective purchasers of the Bonds in the form hereby approved, together with such additions thereto and changes therein as are determined necessary by the Authorized Officers to make such Preliminary Official Statement final as of its date for purposes of Rule 15c2-12 of the Securities and Exchange Commission. Each of the Authorized Officers is hereby authorized to execute a final Official Statement in the form of the Preliminary Official Statement, together with such changes as are determined necessary by the Authorized Officers, to make such Official Statement complete and accurate as of its date. The Underwriter is further authorized to distribute the final Official Statement for the Bonds and any supplement thereto to the purchasers of the Bonds upon the execution of the final Official Statement as described above.

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

Section 9. Each Authorized Officer is authorized to provide for all services necessary to effect the issuance of the Bonds. Such services shall include, but not be limited to, printing the Bonds, obtaining legal services, trustee and paying agent services, and any other services deemed appropriate as set forth in a certificate of such Authorized Officer. Each Authorized Officer is authorized to pay for the cost of such services, together with other costs of issuance, from Bond proceeds deposited pursuant to the Indenture.

Section 10. The Authorized Officers, the City Clerk and the other officers and staff of the City and the District responsible for the fiscal affairs of the District are hereby authorized and directed to take any actions and execute and deliver any and all documents as are necessary to accomplish the issuance, sale and delivery of the Bonds in accordance with the provisions of this Resolution and the fulfillment of the purposes of the Bonds as described in the Indenture, including, but not limited to, the execution and delivery of a letter of credit or cash depository agreement with respect to the special taxes to be levied on property owned by the developer within the District, and providing certificates to the Underwriter as to the accuracy of any information relating to the District which is included within the Official Statement. Any document authorized herein to be signed by the City Clerk may be signed by a duly appointed deputy clerk.

Section 11. The District hereby adopts the City’s Debt Issuance and Management Policy, as amended, supplemented and restated from time to time, as the debt management policy of the District pursuant to California Government Code Section 8855.

Section 12. The City Council acknowledges that the good faith estimates required by Section 5852.1 of the California Government Code are disclosed in the staff report and are available to the public at the meeting at which this Resolution is approved.

Section 13.This Resolution shall be effective upon its adoption.

PASSED, APPROVED AND ADOPTED this the 6th day of November, 2024. {{Signatures on next page}}
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 10

Menifee Mayor and City Council
November 6, 2024
Page
1105 of 1464

Resolution Authorizing Issuance of Special Tax Bonds CFD No. 2023-1 (Rockport Ranch) 4 ___________________________
Bill Zimmerman, Mayor
Attest:
___________________________
Stephanie Roseen, Acting City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 11

Menifee Mayor and City Council
November 6, 2024
Page
1106 of 1464

Stradling Yocca Carlson & Rauth
Draft of 10/08/24
4886-4848-0999v4/200299-0015
PRELIMINARY OFFICIAL STATEMENT DATED ______, 2024
NEW ISSUE—BOOK-ENTRY ONLY NO RATING
In the opinion of Stradling Yocca Carlson & Rauth LLP, Bond Counsel, under existing statutes, regulations, rulings and judici al decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds described herein is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on indi viduals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax. See the caption “TAX MATTERS” with respect to tax consequences relating to the Bonds, including with respect to the alternative minimum tax imposed on certain large corporations. $17,275,000*
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2024
Dated: Delivery Date Due: September 1, as shown on inside cover page The Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee Special Tax Bonds, Series 2024 (the “Bonds”) are being issued by the Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee (the “District”) to: (i) finance certain public improvements needed with respect to the development of property located within the District, including public improvements to be owned by the City of Menifee (the “City”) and water and sewer facilities to be owned and operated b y the Eastern Municipal Water District; (ii) fund a reserve account for the Bonds; (iii) fund capitalized interest on a portion of the Bonds through September 1, 2025 and (iv) pay costs of issuance for the Bonds. The Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Act”), and pursuant to that certain Bond Indenture, dated as of December 1, 2024 (the “Indenture”), by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”).

The Bonds are payable from Net Taxes (as defined herein) derived from a certain annual Special Tax (as defined herein) to be levied on taxable parcels within the District and from certain other funds pledged under the Indenture, all as further described herein. The Special Tax is to be levied according to the rate and method of apportionment approved by the City Council of the City and the qualified electors within the District. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes” and Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” The Bonds will be issued in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Individual purchases of the Bonds may be made in principal amounts of $5,000 and integral multiples thereof and will be in book -entry form only. Purchasers of the Bonds will not receive certificates representing their beneficial ownership of the Bonds but will receive credit balances on the books of their respective nominees . The Bonds will not be transferable or exchangeable except for transfer to another nominee of DTC or as otherwise described herein. Interest on the Bonds will be payable on each March 1 and September 1, commencing March 1, 2025. Principal of and interest on the Bonds will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants, who will remit such payments to the Beneficial Owners of the Bonds.

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

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

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

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

MATURITY SCHEDULE
(See Inside Cover Page)

The Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Str adling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the City and the District by Rutan & Tucker, LLP, Irvine, California, City Attorney, and for the District by Stradling Yocca Carlson & Rauth LLP, Disclosure Counsel, for the Underwriter by Kutak Rock LLP, Irvine, California, and for the Trustee by its counsel. It is anticipated that the Bonds in book-entry form will be available for delivery on or about December __, 2024.
[RAYMOND JAMES]
Dated: ______, 2024

* Preliminary, subject to change.

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 12

Menifee Mayor and City Council
November 6, 2024
Page
1107 of 1464

4886-4848-0999v4/200299-0015
$17,275,000*
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2024

MATURITY SCHEDULE
BASE CUSIP†:_____
Maturity Date
(September 1)
Principal
Amount Interest Rate Yield Price CUSIP No.†
$ % %

$_____ ____% Term Bonds due September 1, 20__ Yield: ____% Price: ____ CUSIP No.† ___ $_____ ____% Term Bonds due September 1, 20__ Yield: ____% Price: ____CC CUSIP No.† ___

* Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright(c) 2024 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a subst itute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the City, the District nor the Underwriter is responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable Bonds or as included herein. The CUSIP number for a specific maturit y is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 13

Menifee Mayor and City Council
November 6, 2024
Page
1108 of 1464

4886-4848-0999v4/200299-0015

CITY OF MENIFEE

COUNTY OF RIVERSIDE, CALIFORNIA

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

CITY ADMINISTRATORS
Armando G. Villa, City Manager
Travis Hickey, Chief Financial Officer

CITY ATTORNEY
Rutan & Tucker, LLP
Irvine, California

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

MUNICIPAL ADVISOR
Urban Futures, Inc.

Walnut Creek, California

SPECIAL TAX CONSULTANT
Spicer Consulting Group, LLC
Murrieta, California

APPRAISER
Integra Realty Resources
Los Angeles, California

TRUSTEE
Wilmington Trust, National Association
Costa Mesa, California
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 14

Menifee Mayor and City Council
November 6, 2024
Page
1109 of 1464

4886-4848-0999v4/200299-0015
Except where otherwise indicated, all information contained in this Official Statement has been provided by the City and the District. No dealer, broker, salesperson or other person has been authorized by the City, the District, the Trustee or the Underwriter to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authoriz ed by the City, the District, the Trustee or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by a person in a ny jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers or Owners of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. This Official Statement, including any supplement or amendment to this Official Statement, is intended to be deposited with the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board, which can be found at www.emma.msrb.org.

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

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

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

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

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

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH

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

OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS

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

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

POTENTIAL INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS WHICH COULD

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

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 15

Menifee Mayor and City Council
November 6, 2024
Page
1110 of 1464

i
4886-4848-0999v4/200299-0015

TABLE OF CONTENTS
Page
INTRODUCTION ................................................................................................................................................ 1 The District ....................................................................................................................................................... 1 Sources of Payment for the Bonds .................................................................................................................... 2 Appraisal Report ............................................................................................................................................... 3 Description of the Bonds .................................................................................................................................. 4 Tax Exemption.................................................................................................................................................. 4 Professionals Involved in the Offering ............................................................................................................. 5 Continuing Disclosure ...................................................................................................................................... 5 Parity Bonds for Refunding Purposes Only ...................................................................................................... 5 Bond Owners’ Risks ......................................................................................................................................... 6 Other Information ............................................................................................................................................. 6 FINANCING PLAN ............................................................................................................................................. 6 Estimated Sources and Uses of Funds .............................................................................................................. 6 THE BONDS ........................................................................................................................................................ 6 General Provisions ............................................................................................................................................ 6 Debt Service Schedule ...................................................................................................................................... 8 Redemption ....................................................................................................................................................... 8 Registration, Transfer and Exchange .............................................................................................................. 12 SOURCES OF PAYMENT FOR THE BONDS ................................................................................................ 12 Limited Obligations ........................................................................................................................................ 12 Special Taxes .................................................................................................................................................. 13 Reserve Account of the Special Tax Fund ...................................................................................................... 19 No Teeter Plan ................................................................................................................................................ 20 Parity Bonds for Refunding Purposes Only .................................................................................................... 20 Lennar Homes Letter of Credit ....................................................................................................................... 20 THE DISTRICT .................................................................................................................................................. 20 General Description of the District ................................................................................................................. 20 Authorized Uses of Bond Proceeds ................................................................................................................ 21 Property Vales and the Appraisal Report ........................................................................................................ 21 Estimated Value-to-Lien Ratios ...................................................................................................................... 22 Direct and Overlapping Debt .......................................................................................................................... 28 Delinquency History ....................................................................................................................................... 31 PROPERTY OWNERSHIP AND THE DEVELOPMENT ............................................................................... 31 General ............................................................................................................................................................ 31 Planned Development Within the District ...................................................................................................... 31 Lennar Homes ................................................................................................................................................. 33 The Land Bank ............................................................................................................................................... 35 SPECIAL RISK FACTORS ............................................................................................................................... 35 Risks of Real Estate Secured Investments Generally ..................................................................................... 35 Insufficiency of Special Tax Revenues........................................................................................................... 36 Impact of Economic Conditions on the Development in the District ............................................................. 37 Concentration of Ownership ........................................................................................................................... 37 Property Values .............................................................................................................................................. 38 Natural Disasters ............................................................................................................................................. 38 Hazardous Substances .................................................................................................................................... 39 Enforcement Delays – Bankruptcy ................................................................................................................. 39 Special Tax Delinquencies.............................................................................................................................. 40 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 16

Menifee Mayor and City Council
November 6, 2024
Page
1111 of 1464

ii
4886-4848-0999v4/200299-0015
FDIC/Federal Government Interests in Parcels .............................................................................................. 40 Direct and Overlapping Indebtedness ............................................................................................................. 41 Payment of Special Taxes is not a Personal Obligation of the Property Owners ........................................... 41 No Acceleration Provision .............................................................................................................................. 41 Limited Obligations ........................................................................................................................................ 41 Ballot Initiatives.............................................................................................................................................. 42 Proposition 218 ............................................................................................................................................... 42 Litigation with Respect to Community Facilities Districts ............................................................................. 43 Loss of Tax Exemption ................................................................................................................................... 44 No Ratings – Limited Secondary Market ....................................................................................................... 44 Limitations on Remedies ................................................................................................................................ 44 Potential Early Redemption of Bonds from Prepayments or Community Facilities District Bond Proceeds ................................................................................................................................................... 45 Cybersecurity .................................................................................................................................................. 45 CONTINUING DISCLOSURE .......................................................................................................................... 45 District Continuing Disclosure ....................................................................................................................... 45 Developer Continuing Disclosure ................................................................................................................... 46 TAX MATTERS................................................................................................................................................. 46 LEGAL OPINION .............................................................................................................................................. 48 ABSENCE OF LITIGATION ............................................................................................................................ 48 NO RATING ...................................................................................................................................................... 48 UNDERWRITING ............................................................................................................................................. 48 FINANCIAL INTERESTS ................................................................................................................................. 48 MUNICIPAL ADVISOR ................................................................................................................................... 49 MISCELLANEOUS ........................................................................................................................................... 49

APPENDIX A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX ......................... A-1 APPENDIX B CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION ............................ B-1 APPENDIX C FORM OF OPINION OF BOND COUNSEL ................................................................ C-1 APPENDIX D APPRAISAL REPORT .................................................................................................. D-1 APPENDIX E SUMMARY OF THE INDENTURE ............................................................................. E-1 APPENDIX F FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE .......................F-1 APPENDIX G FORM OF LENNAR CONTINUING DISCLOSURE CERTIFICATE ........................ G-1 APPENDIX H BOOK-ENTRY ONLY SYSTEM .................................................................................. H-1 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 17

Menifee Mayor and City Council
November 6, 2024
Page
1112 of 1464

4886-4848-0999v4/200299-0015
[INSERT VICINITY MAP]

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 18

Menifee Mayor and City Council
November 6, 2024
Page
1113 of 1464

4886-4848-0999v4/200299-0015
[INSERT AERIAL PHOTOGRAPH]

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 19

Menifee Mayor and City Council
November 6, 2024
Page
1114 of 1464

1 4886-4848-0999v4/200299-0015
$17,275,000*
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH)

OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2024

INTRODUCTION
The purpose of this Official Statement, which includes the cover page, the table of contents and the attached appendices (collectively, the “Official Statement”), is to provide certain information concerning the issuance by Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee (the “District”) of its Special Tax Bonds, Series 202 4 in the aggregate principal amount of $ 17,275,000* (the “Bonds”). The proceeds of the Bonds will be used to: (i) finance certain public improvements nee ded with respect to the development of property located within the District, including public improvements to be owned by the City of Menifee (the “City”) and water and sewer facilities to be owned and operated by the Eastern Municipal Water District; (ii) fund a reserve account for the Bonds; (iii) fund capitalized interest on a portion of the Bonds through September 1, 2025 and (iv) pay costs of issuance for the Bonds.

The Bonds are authorized to be issued pursuant to the Mello -Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Act”), a resolution adopted on November 6, 2024, by the City Council of the City, acting as the legislative body of the District, and a Bond Indenture, dated as of December 1, 2024 (the “Indenture”), by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”). The Bonds are secured under the Indenture by a pledge of and lien upon Net Taxes (as such term is defined herein) and all moneys in the Special Tax Fund (other than the Administrative Expense Account therein) as described in the Indenture.

This Introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described herein. A full review should be made of the entire Official Statement.

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

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

The District
General. The City is located in the western portion of the County of Riverside (the “County”), California (the “State”). The District contains approximately 39.6 taxable acres, and is located at the southwest corner of Old Newport Road and Briggs Road within the City. The property within the District is being developed by Lennar Homes of California, LLC, a California limited liability company (“Lennar Homes”), in a project marketed by Lennar Homes as “Rockport Ranch.”
The property within the District is planned for 3 05 single-family detached homes. As of August 30, 2024 (the Date of Value of the Appraisal) , Lennar Homes had completed and conveyed 160 homes within the District to individual homeowners. As of such date, Lennar Homes owned nine model homes, 81 homes under construction, and 32 near -finished lots. In addition, as of such date, a land banking entity for Lennar Homes owned 23 lots that were under option to be acquired by Lennar Homes. As of October 1, 2024, Lennar Homes acquired one additional lot from the land bank and closed an additional nine homes to homeowners in the District (for a total of 169 closings to homeowners). Lennar Homes is currently under option to acquire the remaining lots owned by the land bank by the end of 2024. Lennar Homes expects to complete and convey all remaining homes in the District to individual homeowners by September 2025.

* Preliminary, subject to change.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 20

Menifee Mayor and City Council
November 6, 2024
Page
1115 of 1464

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The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District has been completed. Lennar Homes expects to complete the remaining in-tract infrastructure within the District, which consists primarily of landscaping, certain interior streets, walls, and wet and dry utilities as construction of the related homes occurs. Lennar Homes has completed amenities within the Rockport Ranch project that include a man-made lake [(which also serves as a drainage facility)], a swimming pool and related facilities, picnic and barbeque areas, neighborhood parks and trails. See the captions “THE DISTRICT” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT ” for further information with respect to the District, Lennar Homes and development within the District.

Formation Proceedings. The District was formed on June 7, 2023, pursuant to the Act. The Act was enacted to provide an alternative method of financing certain public capital facilities and services, especially in developing areas of the State. Any local agency (as defined in the Act) may establish a community facili ties district to provide for and finance the cost of eligible public facilities and services. Generally, the legislative body of the local agency that forms a community facilities district acts on behalf of such district as its legislative body. Subject to approval by two-thirds of the votes cast at an election and compliance with the other provisions of the Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness.

Pursuant to the Act, on May 3, 2023, the City Council adopted Resolution No. 23-1315 (the “Resolution of Intention”), stating its intention to form the District and to authorize the levy of a special tax on the taxable property within the District, and Resolution No. 23-1316, stating its intention to incur bonded indebtedness in an aggregate principal amount not to exceed $23,000,000 for the purpose of financing the purchase, construction, expansion or rehabilitation of certain public facilities to serve the area within the District.

Subsequent to a noticed public hearing on June 7, 2023, the City Council adopted Resolution Nos. 23- 1327 and 23-1328 (collectively the “Resolution of Formation”). The Resolution of Formation: (i) established the District; (ii) authorized the levy of a special tax (the “Special Tax”) within the District; (iii) determined the necessity to incur bonded indebtedness in an amount not to exceed $ 23,000,000 within the District; and (iv) called an election within the District on the proposition of incurring bonde d indebtedness, levying the Special Tax and setting an appropriations limit.

On June 7, 2023, an election was held within the District in which the property owner within the District approved the proposition authorizing the issuance of bonds in an amount not to exceed $23,000,000. A Notice of Special Tax Lien for the District was recorded in the office of the County Recorder on June 15, 2023 , as Document No. 2023-0172646. On June 21, 2023, the City Council adopted Ordinance No. 2023-373 (the “Ordinance”) which authorizes the levy of a special tax pursuant to the Rate and Method of Apportionment approved at the June 7, 2023 , election (the “Rate and Method ”), a copy of which is attached hereto as Appendix A.

Sources of Payment for the Bonds
Special Taxes. As used in this Official Statement, the term “Special Tax” means the annual Special Tax that has been authorized pursuant to the Act and the Rate and Method to be levied upon taxable property within the District. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes” and Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” See the caption “THE DISTRICT.”
Under the Indenture, the District has pledged to repay the Bonds and any Parity Bonds (as defined herein) (which may only be issued for refunding purposes) from the Special Tax revenues remaining after the payment of certain annual Administrative Expenses of the District (the “Net Taxes”) and from other amounts in the Special Tax Fund (other than the Administrative Expense Account therein) established under the Indenture.

The Special Taxes are the primary source of security for the repayment of the Bonds and any Parity Bonds. In the event that the Special Taxes are not paid when due, the only sources of funds available to pay the debt service Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 21

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on the Bonds and any Parity Bonds are amounts held by the Trustee in the Special Tax Fund, including amounts held in the Reserve Account therein, to the limited extent described in the Indenture. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Reserve Account of the Special Tax Fund.” Based on building permits issued through and including May 1, 2024, 181 parcels within the District are classified as Developed Property and 124 parcels are classified as Approved Property for the Fiscal Year 2024-25 Special Tax levy. Annual Debt Service on the Bonds in Fiscal Year 2024 -25 has been structured so that Special Taxes levied on the 181 parcels with building permits issued as of May 1, 2024 , and classified as Developed Property in Fiscal Year 2024-25, at the Assigned Special Tax rates, assuming no delinquencies, plus the amount of capitalized interest funded, will generate not less than 110% of debt service payable with respect to the Bonds for the Bond Year ending September 1, 2025. The District did not levy Special Taxes on Approved Property in Fiscal Year 2024-25.

As of August 30, 2024, Lennar Homes has obtained building permits for 278 of the 305 planned homes within the District. Annual Debt Service for the Bonds in Fiscal Year 2025-26 and in each Fiscal Year thereafter has been structured based on the expected Special Tax revenues to be received in each Fiscal Year from all 305 parcels to be classified as Developed Property, assuming that the Special Taxes are levied at 100% of the Assigned Special Tax. Assuming no delinquencies, the Special Tax levy on 305 parcels of Developed Property within the District will generate in each Fiscal Year not less than the Administrative Expenses Cap plus 110% of debt service payable with respect to the Bonds in that calendar year that begins in that Fiscal Year. Actual collections of the Special Tax will depend on the amount of Special Tax delinquencies. Both the Special Tax levy and the Administrative Expenses Cap escalate at 2% each Fiscal Year. Lennar Homes expects to obtain all remaining building permits for the planned homes within the District prior to May 1, 2025.

Foreclosure Proceeds. The District will covenant in the Indenture for the benefit of the owners of the Bonds and Parity Bonds that it will: (i) commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in excess of $5,000 by the October 1 following the close of each Fiscal Year in which such Special Taxes were due; and (ii) commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the October 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied; and (iii) diligently pursue such foreclosure proceedings until the delinquent Special Taxes are paid; provided that, notwithstanding the foregoing, the District may elect to defer foreclosure proceedings on any parcel so long as the amount in the Reserve Account is at least equal to the Reserve Requirement. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.” There is no assurance that the property within the District can be sold for the appraised or assessed values described herein, or for a price sufficient to pay the principal of and interest on the Bonds in the event of a default in payment of Special Taxes by the current or future landowners within the District. See the caption “SPECIAL RISK FACTORS —Property Values.”

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

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

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

Appraisal Report
Integra Realty Resources (the “Appraiser”) has conducted an appraisal (the “Appraisal Report”) with a date of value of August 30, 2024 (the “Date of Value”), of a portion of the Taxable Property within the District to provide an estimate of the market value of such Taxable Property. The Appraisal Report provides an estimate of the approximate market value of such Taxable Property in the District in its current condition, assuming that development of the property as currently planned will consist of 305 single-family detached residential units.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 22

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To arrive at the estimated value of the Taxable Property within the District, the Appraiser applied the following methodology: (i) for 51 completed single family homes with improvement value as shown on the County Assessor’s as of January 1, 2023 (consisti ng of 48 homes owned by individual homeowners and three model homes owned by Lennar Homes), the Appraiser used the Fiscal Year 2023 -24 assessed values assigned by the County (totaling $28,930,504); and (ii) for the property relating to the remaining 254 completed and planned homes in the District , the Appraiser appraised such property using the methodology as described under “THE DISTRICT — Appraisal Report.” The property described in part (ii) of the foregoing sentence is referred to in this Official Statement as the “Appraised Property.” Based on the assumptions and limiting conditions in the Appraisal Report, the Appraiser concluded that the minimum market value of the Appraised Property was $87,998,000 as of the Date of Value. The total estimated value of the property based on the foregoing assessed and appraised values is $116,928,504.

The Appraisal Report is based upon a variety of assumptions and limiting conditions that are described in Appendix D. The District makes no representation as to the accuracy of the Appraisal. See “THE DISTRICT — Appraisal Report” and “— Estimated Value-to-Lien Ratios.” There is no assurance that property within the District can be sold for the prices set forth in the Appraisal Report or that any parcel can be sold for a price sufficient to pay the Special Tax for that parcel in the event of a default in payment of Special Taxes by a property owner. See “THE DISTRICT,” “SPECIAL RISK FACTORS — Property Values” herein and Appendix D.

Description of the Bonds
The Bonds will be issued and delivered as fully registered Bonds, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to actual purchasers of the Bonds (the “Beneficial Owners”) in the denominations of $5,000 or any integral multiple thereof, under the book -entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery of the Bonds. In the event that the book-entry only system described herein is no longer used with respect to the Bonds, the Bonds will be registered and transferred in accordance with the Indenture. See Appendix H — “BOOK-ENTRY ONLY SYSTEM.”
Principal of, premium, if any, and interest on the Bonds is payable by the Trustee to DTC. Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of D TC Participants. See Appendix H — “BOOK-ENTRY ONLY SYSTEM.”
The Bonds are subject to optional redemption, special mandatory redemption and mandatory sinking fund redemption prior to maturity as described herein. See the caption “THE BONDS — Redemption.” For a more complete description of the Bonds and the basic documentation pursuant to which they are being sold and delivered, see the caption “THE BONDS” and Appendix E — “SUMMARY OF THE INDENTURE.” Tax Exemption
In the opinion of Stradling Yocca Carlson & Rauth LLP, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds described herein is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax. See the caption “TAX MATTERS” with respect to tax consequences relating to the Bonds, including with respect to the alternative minimum tax imposed on certain large corporations.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 23

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Set forth in Appendix C is the form of opinion of Bond Counsel expected to be delivered in connection with the issuance of the Bonds. For a more complete discussion of such opinion and certain tax consequences incident to the ownership of the Bonds, see the caption “TAX MATTERS.” Professionals Involved in the Offering
Wilmington Trust, National Association, Costa Mesa, California, will act as Trustee under the Indenture. Raymond James & Associates, Inc. (the “Underwriter”) is the Underwriter of the Bonds. Certain proceedings in connection with the issuance and delivery of the Bonds are subject to the approval of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel and Disclosure Counsel to the District in connection with the issuance of the Bonds. Certain legal matters will be passed on for the City and the District by Rutan & Tucker, LLP, Irvine, California, City Attorney, for the Underwriter by Kutak Rock LLP, Irvine, California, and for the Trustee by its counsel. Other professional services have been performed by Spicer Consulting Group, LLC, Murrieta, California, as Special Tax Consultant (the “Special Tax Consultant”), Urban Futures, Inc., Walnut Creek, California, as Municipal Advisor, and by Integra Realty Resources, Los Angeles, California, as Appraiser.

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

The Underwriter does not consider Lennar Homes to be an “obligated person” with respect to the Bonds for purposes of Rule 15c2-12. Notwithstanding the foregoing, to assist in the marketing of the Bonds, Lennar Homes will agree to provide, or cause to be provided to EMMA, certain updates with respect to the development within the District and notices of certain enumerated events. See Appendix G for a description of the specific nature of the semiannual reports and enumerated event notices to be filed by Lennar Homes.

See “CONTINUING DISCLOSURE, ” Appendix F — “FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE” and Appendix G — “FORM OF LENNAR CONTINUING DISCLOSURE CERTIFICATE.”
Parity Bonds for Refunding Purposes Only
Under the Indenture, the District may issue Parity Bonds secured by the Net Taxes on a parity with the Bonds but only to refund all or a portion of the Bonds or Parity Bonds. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Parity Bonds for Refunding Purposes Only. ” Other taxes and/or special assessments with liens equal in priority to the continuing lien of the Special Taxes may also be levied in the future on the property within the District, which could adversely affect the willingness of the landowners to pay the Special Taxes when due. See the captions “THE DISTRICT — Direct and Overlapping Debt ” and “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.

Other taxes and/or special assessments with liens equal in priority to the continuing lien of the Special Taxes may also be levied in the future on the property within the District, which could adversely affect the Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 24

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willingness of the landowners to pay the Special Taxes when due. See the captions “THE DISTRICT — Direct and Overlapping Debt” and “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.” Bond Owners’ Risks
Certain events could affect the ability of the District to pay the principal of and interest on the Bonds when due. See the caption “SPECIAL RISK FACTORS ” for a discussion of certain factors that should be considered, in addition to other matters set forth herein, in evaluating an investment in the Bonds. The purchase of the Bonds involves risks, and the Bonds may not be appropriate investments for some types of investors.

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

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

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

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

Sources of Funds
Principal Amount of Bonds $
Plus Original Issue Premium
Total Sources $

Uses of Funds:

Acquisition and Construction Fund $
Interest Account(1)
Costs of Issuance(2)
Reserve Account of the Special Tax Fund
Total Uses $

(1) Reflects capitalized interest on a portion of the Bonds through September 1, 2025. (2) To pay costs of issuance of the Bonds, including legal fees, underwriter’s discount, printing costs, Appraiser, Special Tax Consultant, Municipal Advisor and Trustee fees.

THE BONDS
General Provisions
The Bonds will be dated their date of delivery and will bear interest at the rates per annum set forth on the inside cover page hereof, payable semiannually on each March 1 and September 1, commencing March 1, Item Title: 12.1
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2025 (each, an “Interest Payment Date”), and will mature in the amounts and on the dates set forth on the inside cover page of this Official Statement. Interest will be calculated on the basis of a 360 -day year comprised of twelve 30-day months. The Bonds will be issued in fully registered f orm in denominations of $5,000 or any integral multiple thereof.

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

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

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

[Remainder of Page Intentionally Left Blank]

Item Title: 12.1
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Debt Service Schedule
The following table presents the annual debt service on the Bonds (including sinking fund redemptions), assuming that there are no optional or special mandatory redemptions. See the caption “—Redemption” below.

Interest on a portion of the Bonds through September 1, 2025, will be paid from capitalized interest.

Year Ending
September 1 Principal Interest Total Debt Service
2025 $ $ $
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
2055
Total $ $ $
Redemption
Optional Redemption. The Bonds may be redeemed at the option of the District from any source of funds on any Interest Payment Date on or after September 1, 20__, in whole or in part, from such maturities as are selected by the District and by lot within a maturity, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the date of redemption:

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Redemption Date Redemption Price
103%
102
101
100

In the event that the District elects to redeem Bonds as provided above, the District shall give written notice to the Trustee of its election to so redeem, the redemption date and the principal amount of the Bonds of each maturity to be redeemed. The notice to the Trustee shall be given at least 45 but no more than 60 calendar days prior to the redemption date, or by such later date as is acceptable to the Trustee.

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

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

* Maturity.

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

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

* Maturity.

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

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

Special Mandatory Redemption from Special Tax Prepayments . The Bonds are subject to special mandatory redemption as a whole or in part on a pro rata basis among maturities and by lot within a maturity, on any Interest Payment Date on or after March 1, 2025, and will be redeemed by the Trustee, from any amounts paid by the District to the Trustee and designated by the District as a prepayment of Special Taxes for one or more parcels in the District made in accordance with the Rate and Method (the “Prepayments”) deposited to the Redemption Account pursuant to the Indenture, plus amounts transferred from the Reserve Account pursuant to the Indenture, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

Redemption Date Redemption Price
Any Interest Payment Date from March 1, 2025 through March 1, 20__ 103% September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100

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

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

Notice of Redemption. So long as the Bonds are held in book-entry form, notice of redemption will be sent by the Trustee to DTC and not to the Beneficial Owners of the Bonds under the DTC book -entry only system. Neither the District nor the Trustee is responsible for notifyi ng the Beneficial Owners, who are to be notified in accordance with the procedures in effect for the DTC book -entry system. See Appendix H — “BOOK-ENTRY ONLY SYSTEM.”
The Trustee will give notice, in the name of the District, of the redemption of Bonds. Such notice of redemption will: (i) specify the CUSIP numbers (if any), the bond numbers and the maturity date or dates of the Bonds selected for redemption, except that where all of the Bonds are subject to redemption, or all of the Bonds of one maturity are to be redeemed, the bond numbers of such issue need not be specified; (ii) state the date fixed for redemption and surrender of the Bonds to be redeemed; (iii) state the redemption price; (iv) state the place or places where the Bonds are to be redeemed; (v) in the case of Bonds to be redeemed only in part, state the Item Title: 12.1
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portion of such Bond that is to be redeemed; (vi) state the date of issue of the Bonds as originally issued; (vii) state the rate of interest borne by each Bond being redeemed; and (viii) state any other descriptive information needed to identify accurately the Bonds being redeeme d as specified by the Trustee. Such notice will further state that on the date fixed for redemption, there will become due and payable on each Bond, or portion thereof called for redemption, the principal thereof, together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon will cease to accrue and be payable. At least 30 days but no more than 45 days prior to the redemption date, the Trustee will mail a copy of such notice of redemption, by first class mail, postage prepaid, to the respective Owners thereof at their addresses appearing on the Bond Register, and to the original purchaser of any Bonds; provided, however, so long as the Bonds are registered in the name of the Nominee, such notice shall be given in such manner as complies with the requirements of the Depository. The actual receipt by the Owner of any Bond of notice of such redemption is not a condition precedent to redemption, and neither the failure to re ceive nor any defect in such notice will affect the validity of the proceedings for the redemption of such Bonds, or the cessation of interest on the redemption date. A certificate by the Trustee that notice of such redemption has been given as provided i n the Indenture will be conclusive as against all parties and the Owner is not entitled to show that he or she failed to receive notice of such redemption.

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

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

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

With respect to any notice of optional redemption of Bonds, such notice may state that such redemption is conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, i f any, and interest on such Bonds to be redeemed and that, if the District determines that such moneys will not be so received on or prior to the redemption date, said notice shall be of no force and effect and the Trustee shall not be required to redeem such Bonds. If any condition stated in the redemption notice for an optional redemption shall not have been satisfied on or prior to the redemption date:
(i) the redemption notice shall be of no force and effect, (ii) the District shall not be required to redeem such Bonds, (iii) the redemption shall not be made, and (iv) the Trustee shall within a reasonable time thereafter give notice to the persons in the manner in which the conditional redemption notice was given that such condition or conditions were not met and that the redemption was canceled.

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

Item Title: 12.1
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November 6, 2024
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Partial Redemption of Bonds. Upon surrender of any Bond to be redeemed in part only, the District will execute and the Trustee will authenticate and deliver to the Owner, at the expense of the District, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered, with the same interest rate and the same maturity.

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

Registration, Transfer and Exchange
Registration. The Trustee will keep sufficient books for the registration and transfer of the Bonds. The ownership of the Bonds will be established by the Bond registration books held by the Trustee.

Transfer or Exchange. Subject to the limitations set forth in the following paragraph, the registration of any Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authoriz ed attorney, upon surrender of such Bond for cancellation at the office of the Trustee, accompanied by delivery of written instrument of transfer in a form acceptable to the Trustee and duly executed by the Owner or his or her duly authorized attorney.

Bonds may be exchanged at the office of the Trustee for a like aggregate principal amount of Bonds for other authorized denominations of the same maturity and issue. The Trustee may not collect from the Owner any charge for any new Bond issued upon any exchange or transfer, but will require the Owner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. Whenever any Bonds are surrendered for registration of transfer or exchange, the District will execute and the Trustee will authenticate and deliver a new Bond or Bonds, as applicable, of the same issue and maturity, for a like aggregate principal amount; provided that the Trustee is not required to register transfers or make exchanges of: (i) Bonds for a period of 15 days next preceding any selection of the Bonds to be redeemed; or (ii) any Bonds chosen for redemption.

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

The Special Taxes are the primary source of security for the repayment of the Bonds. Under the Indenture, the District has pledged to repay the Bonds from the Net Taxes (which are Special Tax revenues remaining after the payment of the annual Administrati ve Expenses in an amount not to exceed the Administrative Expenses Cap (as defined in the Indenture)) and from amounts held in the Special Tax Fund (other than amounts held in the Administrative Expense Account therein). Special Tax revenues include the proceeds of the annual Special Tax levy received by the District, including any scheduled payments and Prepayments thereof, and the net proceeds of the redemption of delinquent Special Taxes or sale of property sold Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 31

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November 6, 2024
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as a result of foreclosure of the lien of delinquent Special Taxes to the amount of said lien, and penalties and interest thereon; provided that any delinquent Special Tax sold to an independent third -party or to the City for 100% of the delinquent amount will no longer be pledged under the Indenture to the payment of the Bonds or Parity Bonds.

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

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

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

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

Special Taxes
Authorization and Pledge . In accordance with the provisions of the Act, the City established the District on June 7, 2023, for the purpose of financing various public improvements required in connection with the proposed development within the District. At a special election held on June 7, 2023, the qualified elector within the District authorized the District to incur indebtedness in an amount not to exceed $23,000,000 for the District and the levy of the Special Taxes on property within the District to repay such bonds and to finance the Facilities (as defined below). The qualified elector within the District also voted to approve the Rate and Method that authorized the Special Tax to be levied to repay indebtedness of the District, including the Bonds.

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

The Special Taxes levied in any Fiscal Year may not exceed the maximum rates authorized pursuant to the Rate and Method. See “— Rate and Method of Apportionment of Special Tax” and Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” There is no assurance that the Net Taxes will, in all circumstances, be adequate to pay the principal of and interest on the Bonds when due. See the caption “SPECIAL RISK FACTORS — Insufficiency of Special Tax Revenues.” Rate and Method of Apportionment of Special Tax. The Rate and Method applicable to the District is contained in Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX. ” The meaning of the defined terms used in this section are as set forth in Appendix A.

In general, the Rate and Method imposes a different Maximum Special Tax on Taxable Property within the District depending upon whether such Taxable Property is classified as: (i) ”Developed Property ” (in general, Taxable Property not classified as Approved Property, Undeveloped Property, Provisional Undeveloped Property that are not Exempt Property pursuant to the provisions of the Rate and Method and which is included in a Final Map recorded prior to the January 1 preceding the Fiscal Year in which the Special Tax is being levied and a building permit for new construction has been issued before May 1 preceding such Fiscal Year), (ii) ”Approved Property” (in general, parcels of Taxable Property included in a Final Map recorded prior to the January 1 preceding the Fiscal Year in which the Special Tax is being levied, that have an assigned Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, but for which no building permit was issued before May 1 preceding such Fiscal Year), (iii) ”Undeveloped Item Title: 12.1
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Property” (in general, Taxable Property that is not “Developed Property,” “Approved Property” or “Provisional Undeveloped Property”) or (iv) ”Provisional Undeveloped Property” (in general, Taxable Property that would otherwise be classified as Exempt Property but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in the Rate and Method). Different Maximum Special Taxes are also applicable to Developed Property depending upon: (a) its status as either “Residential Property” or “Non-Residential Property,” (b) in the case of Residential Property, its status as “Single Family Residential Property ” or “Multifamily Property” or (c) in the case of Single Family Residential Property, the Building Square Footage of the structure.

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

The Special Tax Requirement for the District is to be satisfied first by levying the Special Tax Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax. If additional moneys are needed to satis fy the Special Tax Requirement, the Special Tax will be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel. If additional moneys are still needed to sati sfy the Special Tax Requirement, the Special Tax will be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel. If additional moneys are needed to satisfy the Special Tax Requirement, the Special Tax on each Assessor’s Parcel of Developed Property for which the Maximum Special Tax is the Backup Special Tax will be increased Proportionately from the Assigned Special Tax up to 100% of the Backup Special Tax. Finally, if additional moneys are needed to satisfy the Special Tax Requirement, the Special Tax will be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel.

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

Each Assessor’s Parcel within CFD No. 2023 -1 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or P rovisional Undeveloped Property. In addition, each Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property shall be further classified as being within Tax Zone 1 or Tax Zone 2, in accordance with the Rate and Method.

For Fiscal Year 2025-26, the Assigned Special Tax for Developed Property within the District ’s Tax Zone 1 that is classified as Single Family Residential Property will range from $2,699.84 per taxable unit with a Building Square Footage of less than 1,900 square feet to $ 2,863.18 per taxable unit with a Building Square Footage of greater than 2,200 square feet. For Fiscal Year 2025-26, the Assigned Special Tax for Developed Property within the District’s Tax Zone 2 that is classified as Single Family Residential Property will range from $2,853.82 per taxable unit with a Building Square Footage of less than 1,900 square feet to $4,959.59 per taxable Item Title: 12.1
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unit with a Building Square Footage of greater than 3,900 square feet. On each July 1 the Assigned Special Tax rates for Developed Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Single Family Residential Property shall be the Backup Special Tax computed pursuant to the Rate and Method. For Fiscal Year 2025-26, the Maximum Special Tax on Approved Property expected to be classified as Single Family Residential Property is $37,001.83 and $26,634.24 per acre for Tax Zones 1 and 2, respectively.

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

Table 1 below sets forth the Assigned Special Tax for Developed Property and the Maximum Special Tax for Approved Property for Fiscal Year 2025-26.

TABLE 1

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH) ASSIGNED SPECIAL TAX RATES FOR FISCAL YEAR 2025-26
Tax Zone/
Land Use
Category Land Use Type
Residential Floor
Area (sq. ft.)
Maximum/
Assigned
Special Tax
Rates
Fiscal Year
2025-26(1)
Tax Zone 1
1 Residential Property <1,900 sq ft $2,699.84
2 Residential Property 1,900 - 2,050 sq ft 2,773.71
3 Residential Property 2,050 - 2,200 sq ft 2,818.44
4 Residential Property >2,200 sq ft 2,863.18
5 Approved Property N/A 3,048.80
Tax Zone 2
1 Residential Property <1,900 sq ft $2,853.82
2 Residential Property 1,900 - 2,100 sq ft 3,037.97
3 Residential Property 2,101 - 2,300 sq ft 3,129.52
4 Residential Property 2,301 - 2,500 sq ft 3,220.04
5 Residential Property 2,501 - 2,700 sq ft 3,325.12
6 Residential Property 2,701 - 2,900 sq ft 3,540.48
7 Residential Property 2,901 - 3,100 sq ft 3,702.78
8 Residential Property 3,101 - 3,300 sq ft 3,864.05
9 Residential Property 3,301 - 3,500 sq ft 4,137.67
10 Residential Property 3,501 - 3,700 sq ft 4,412.34
11 Residential Property 3,701 - 3,900 sq ft 4,685.96
12 Residential Property > 3,900 sq ft 4,959.59
13 Approved Property N/A 3,574.07
Total

(1) Reflects the Assigned Special Tax rate for Developed Property and the Maximum Special Tax for Approved Property, Multifamily Property and Non-Residential Property. The Assigned Special Tax rates and Maximum Special Tax rates escalate at 2% per Fiscal Year.

Source: Spicer Consulting Group, LLC.

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

In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all Assessor’s Parcels within such changed or modified area shall be $ 37,001.83 per acre within Tax Zone 1 and Item Title: 12.1
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$26,634.24 per acre within Tax Zone 2 for Fiscal Year 2025-26. In the event any superseding Final Map is recorded as a Final Map within the boundaries of the District, the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be $37,001.83 per acre within Tax Zone 1 and $26,634.24 per acre within Tax Zone 2 for Fiscal Year 2025-26. The Backup Special Tax shall not apply to Multifamily Residential Property or Non- Residential Property. On each July 1 the Backup Special Tax rate will increase by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

Prepayment of Special Taxes. The Maximum Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor’s Parcels of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a building permit has been issued, (iii) Approved Property or Undeveloped Property for which a building permit has not been issued, and (iv) Assessor’s Parcels of Provisional Undeveloped Property that are not Exempt Property. In addition, the Maximum Special Tax obligation applicable to an Assessor’s Parcel may be fully prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied subject to certain limitations and as specified in Section G of the Rate and Method attached as Appendix A. The Prepayment amount is calculated based on the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount, Administrative Fees and Expenses and less a credit for the resulting reduction in the Reserve Requirement for the Bonds (if any), all as specified in Section G of the Rate and Method attached as Appendix A. Prepayments of Special Taxes will be applied to effect an extraordinary redemption of Bonds and Parity Bonds. See “THE BONDS — Redemption — Special Mandatory Redemption from Special Tax Prepayments.”
Estimated Debt Service Coverage . Based on building permits issued through and including May 1, 2024, 181 parcels within the District are classified as Developed Property and 124 parcels are classified as Approved Property for the Fiscal Year 2024-25 Special Tax levy. Annual Debt Service on the Bonds in Fiscal Year 2024-25 has been structured so that Special Taxes levied on the 181 parcels with building permits issued as of May 1, 2024 , and classified as Developed Property in Fiscal Year 2024 -25, at the Assigned Special Tax rates, assuming no delinquencies, plus the amount of capitalized interest funded, will generate not less than 110% of debt service payable with respect to the Bonds for the Bond Year ending September 1, 2025. The District did not levy Special Taxes on Approved Property in Fiscal Year 2024-25.

As of August 30, 2024, Lennar Homes has obtained building permits 278 of the 305 planned homes within the District. Annual Debt Service for the Bonds in Fiscal Year 2025-26 and in each Fiscal Year thereafter has been structured based on the expected Special Tax revenues to be received in each Fiscal Year from all 305 parcels to be classified as Developed Property, assuming that the Special Taxes are levied at 100% of the Assigned Special Tax. Assuming no delinquencies, the Special Tax levy on 305 parcels of Developed Property within the District will generate in each Fiscal Year not less than the Administrative Expenses Cap plus 110% of debt service payable with respect to the Bonds in that calendar year that begins in that Fiscal Year. Actual collections of the Special Tax will depend on the amount of Special Tax delinquencies. Both the Special Tax levy and the Administrative Expenses Cap escalate at 2% each Fiscal Year. Lennar Homes expects to obtain all remaining building permits for the planned homes within the District prior to May 1, 2025.

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

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

Item Title: 12.1
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The District will covenant in the Indenture that each year it will levy Special Taxes up to the maximum rates permitted under the Rate and Method in an amount sufficient, together with other amounts on deposit in the Special Tax Fund, to pay the principal of and interest on any Outstanding Bonds and Parity Bonds, to replenish the Reserve Account to the Reserve Requirement and to pay Administrative Expenses.

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

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

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

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

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

Item Title: 12.1
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Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of any Special Tax or receipt by the District of Special Taxes in an amount that is less than the Special Taxes levied, the City Council, as the legislative body of the District, may order that Special Taxes be collected by a Superior Court action to foreclose the lien within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at a judicial foreclosure sale. Under the Act , the commencement of judicial foreclosure following the nonpayment of a Special Tax is not mandatory. However, the District will covenant in the Indenture for the benefit of the owners of the Bonds and any Parity Bonds that it will: (i) commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in excess of $5,000 by the October 1 following the close of each Fiscal Year in which such Special Taxes were due; and (ii) commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the October 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied; and (iii) diligently pursue such foreclosure proceedings until the delinquent Special Taxes are paid; provided that, notwithstanding the foregoing, the District may elect to defer foreclosure proceedings on any parcel so long as the amount in the Reserve Account is at least equal to the Reserve Requirement.

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

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

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

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

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

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

Second: To the Interest Account, an amount such that the balance in the Interest Account one Business Day prior to each Interest Payment Date is equal to the installment of interest due on the Bonds and any Parity Bonds on said Interest Payment Date and an y installment of Item Title: 12.1
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interest due on a previous Interest Payment Date that remains unpaid. Moneys in the Interest Account will be used for the payment of interest on the Bonds and any Parity Bonds as the same become due.

Third: To the Principal Account, an amount such that the balance in the Principal Account one Business Day prior to September 1 of each year, commencing September 1, 2025, is equal the principal payment due on the Bonds and any Parity Bonds maturing on such September 1 and any principal payment due on a previous September 1 that remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds and any Parity Bonds as the same become due at maturity.

Fourth: To the Redemption Account, the amount needed to make the balance in the Redemption Account one Business Day prior to each September 1 on which a Sinking Fund Payment is due equal to the Sinking Fund Payment due on any Outstanding Bonds and Parity Bonds on such September 1; provided, however, that, if amounts in the Special Tax Fund are inadequate to make the foregoing transfers, then any deficiency will be made up by an immediate transfer from the Reserve Account, if funded, pursuant to the Indentur e; and thereafter, to pay the principal and premium, if any, due in connection with an optional redemption of Bonds or Parity Bonds.

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

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

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

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

Reserve Account of the Special Tax Fund
In order to secure further the payment of principal of and interest on the Bonds, the District is required, upon delivery of the Bonds, to deposit in the Reserve Account and thereafter to maintain in the Reserve Account an amount equal to the Reserve Requi rement. The term “Reserve Requirement” is defined in the Indenture to mean, that amount as of any date of calculation, equal to the lesser of: (i) 10% of the initial principal amount of the Bonds and Parity Bonds, if any; (ii) Maximum Annual Debt Service on the then Outstanding Bonds and Parity Bonds, if any; (iii) 125% of average Annual Debt Service on the then Outstandi ng Bonds and Parity Bonds, if any; provided, however, that the Reserve Requirement shall not exceed $_____ except in connection with the issuance of Parity Bonds . The Reserve Requirement may be satisfied in whole or in part by cash, a Reserve Policy (as defined in the Indenture), or a combination thereof . On the date of issuance of the Bonds, the District will deposit $ ______ from proceeds of the Bonds into the Reserve Account to satisfy the Reserve Requirement.

Subject to the limits on the maximum annual Special Tax levy set forth in the Rate and Method and in the Indenture, the District will covenant in the Indenture to levy Special Taxes in an amount sufficient, in light of the other intended uses of the Specia l Tax proceeds, to maintain the balance in the Reserve Account at the Reserve Requirement. Amounts in the Reserve Account are to be applied: (i) to pay debt service on the Bonds, or any Parity Bonds, including Sinking Fund Payments, to the extent that other monies are not available therefor; (ii) to redeem Bonds or Parity Bonds in the event of prepayment of Special Taxes, to optionally redeem Bonds Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 38

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or Parity Bonds or in connection with a partial defeasance of Bonds or Parity Bonds, in accordance with the Indenture; and (iii) to pay any rebate requirements. See Appendix E under the caption “CREATION OF FUNDS AND APPLICATION OF PROCEEDS — Reserve Account of the Special Tax Fund.” No Teeter Plan
Although the Riverside County Board of Supervisors has adopted the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”) which allows each entity levying secured property taxes in the County to draw on the amount of property taxes levied rather than the amount actually collected, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code, the District is not included in the County Teeter Plan. Consequently, the District may no t draw on the County Tax Loss Reserve Fund in the event of delinquencies in Special Tax payments within the District.

Parity Bonds for Refunding Purposes Only
The District may at any time after the issuance and delivery of the Bonds issue Parity Bonds payable from the Net Taxes and other amounts deposited in the Special Tax Fund (other than in the Administrative Expense Account therein) and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds theretofore issued; provided, however, Parity Bonds may only be issued for the purpose of refunding all or a portion of the Bonds or any Parity Bonds then Outstanding. See Appendix E under the caption “DEFEASANCE AND PARITY BONDS.” Lennar Homes Letter of Credit
Lennar Homes has provided an irrevocable letter of credit (the “Letter of Credit”) to secure payment of Special Taxes levied on the property in the District owned by it, which identifies the Trustee as beneficiary. The amount available to be drawn under the Letter of Credit (the “Stated Amount”) is equal to the estimated Special Tax levy attributable to the parcels owned by , or under option to be acquired by, Lennar Homes as of October 1, 2024 (i.e. 114 parcels owned by Lennar Homes and 22 parcels owned b y the AG1 Land Bank of the 305 parcels in the District), in Fiscal Years 2024-25 and 2025-26. The initial Stated Amount of the Letter of Credit shall be $647,626. The initial term of the Letter of Credit expires on November __, 2025. However, the Letter of Credit shall be considered automatically extended without amendment for additional periods of one (1) year from the present or any future expiration date unless the Letter of Credit bank notifies the beneficiary in writing at least sixty (60) days prior to any such expiration date that the Letter of Credit will not be extended. If not so extended, Lennar Homes will seek a replacement letter of credit or otherwise satisfy the credit enhancement requirements required by Lennar Homes’ agreement with the City. The obligation of Lennar Homes to maintain the Letter of Credit or provide similar credit enhancement will end when the property then owned by Lennar Homes is responsible for less than twenty percent (20%) of the Maximum Special Tax levy in the District in the succeeding Fiscal Year (and Lennar Homes has paid the Special Taxes on its property and the property owned by the AG1 Land Bank, if any, in the current Fiscal Year). Notwithstanding the foregoing, the District may elect to waive the requirement for Lennar Homes to maintain the Letter of Credit or may release the Letter of Credit at any time without the consent of the Owners or Beneficial Owners of the Bonds. The Letter of Credit is not pledged to the repayment of debt service on the Bonds.

THE DISTRICT
General Description of the District
The District contains approximately 39.6 taxable acres, and is located at the southwest corner of Old Newport Road and Briggs Road within the City. The property within the District is being developed by Lennar Homes in a project marketed by Lennar Homes as “Rockport Ranch.” Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 39

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The property within the District is planned for 305 single -family detached homes. As of August 30, 2024, Lennar Homes had completed and conveyed 160 homes within the District to individual homeowners. As of such date, Lennar Homes owned nine model homes, 81 homes under construction, and 32 near-finished lots.

In addition, as of such date, a land banking entity for Lennar Homes owned 23 lots that were under option to be acquired by Lennar Homes. As of October 1, 2024, Lennar Homes acquired one additional lot from the land bank and closed an additional nine homes to homeowners in the District (for a total of 169 closings to homeowners). Lennar Homes is currently under option to acquire the remaining lots owned by the land bank by the end of 2024. Lennar Homes expects to complete and convey all remaining homes in the District to individual homeowners by September 2025.

The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District has been completed. Lennar Homes expects to complete the remaining in-tract infrastructure within the District, which consists primarily of landscaping, certain interior streets, walls, and wet and dry utilities as construction of the related homes occurs. Lennar Homes has completed amenities within the Rockport Ranch project, which include a man-made lake (which also serves as a drainage facility), a swimming pool and related facilities, picnic and barbeque areas, neighborhood parks and trails.

Water and sewer service to the property within the District is currently supplied by Eastern Municipal Water District. Electricity is currently supplied by Southern California Edison and gas by The Gas Company.

Public education instruction is provided by Menifee Union School District and Perris Union High School District.

The property within the District is not located in an Alquist -Priolo Earthquake Study Zone and is not located within one-half mile of an active earthquake fault. Additionally, the District is not located in a flood plain area or in an area that the Department of Forestry and Fire Protection of the State of California has designated as a high fire hazard severity zone. Notwithstanding the foregoing, the property in the District may be subject to unpredictable seismic activity, fires, flood, or o ther natural d isasters. See “SPECIAL RISK FACTORS — Natural Disasters.”
A map showing the location of the District and an aerial photograph thereof appear following the Table of Contents.

Authorized Uses of Bond Proceeds
Proceeds of the Bonds are authorized to be used to pay for the costs of construction of City facilities, including certain storm drain and street improvements and the costs of certain water and sewer system improvements to be owned and operated by Eastern Municipal Water District. See the caption “FINANCING PLAN.”
Property Vales and the Appraisal Report
Assessed Value. The assessed value of the property within the District represents the secured assessed valuation established by the County Assessor. Assessed values do not necessarily represent market values.

Article XIIIA of the California Constitution (Proposition 13) defines “full cash value ” to mean “the County assessor’s valuation of real property as shown on the 1975/76 roll under ‘full cash value’, or, thereafter, the appraised value of real property when purchased or newly constructed or when a c hange in ownership has occurred after the 1975 assessment, ” subject to exemptions in certain circumstances of property transfer or reconstruction. The “full cash value” is subject to annual adjustment to reflect increases, not to exceed 2% for any year, or decreases in the consumer price index or comparable local data, or to reflect reductions in property value caused by damage, destruction or other factors. Because of the general limitation to 2% per year in increases in full cash value of properties which remain in the same ownership, the County tax roll does not reflect values uniformly proportional to actual market values. There can be no assurance that the assessed valuations of the properties within the District accurately reflect their respective market values, and the future fair market Item Title: 12.1
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values of those properties may be lower than their current assessed valuations. The Fiscal Year 2023-24 assessed value of the property in the District is $61,802,584, which as a result of timing of the County’s determination of the assessed values for Fiscal Year 2023-24, does not reflect the substantial development activity that has taken place since such value was determined.

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

A copy of the Appraisal Report is included as Appen dix D — “APPRAISAL REPORT ” to this Official Statement.

The purpose of the Appraisal Report was to estimate the market value of the property within the District subject to the lien of the Special Taxes. With respect to 51 completed single-family homes for which the County had assigned improvement value as shown on the County Assessor’s as of January 1, 2023 (consisting of 48 homes owned by individual homeowners and three model homes owned by Lennar Homes), the Appraiser used the Fiscal Year 2023 -24 assessed values assigned by the County (totaling $28,930 ,504). In valuing the Appraised Property relating to the remaining 254 completed and planned homes in the District , the Appraiser used a sales comparison approach for the completed single -family homes and a land residual analysis for the remaining property to derive a value indication for the finalized lots within each tract adjusted by any costs to complete such lots.

Subject to the assumptions and limiting conditions set forth in the Appraisal Report, the Appraiser concluded that, as of the Date of Value (August 30, 2024), the estimated market value of the property within the District subject to the lien of the Special Taxes was $116,928,504, consisting of $28,930,504 of the 51 homes with improvement value shown on the Fiscal Year 2023 -24 County Assessor’s roll, and $ 87,998,000 of the appraised value of the Appraised Property relating to the remaining 254 homes.

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

The Appraisal Report is based upon a variety of assumptions and limiting conditions that are described in Appendix D. The City, the Underwriter and the District make no representation as to the accuracy of the Appraisal Report. There is no assurance that the property within the District can be sold for the prices set forth in the Appraisal Report or that any parcel can be sold for a price sufficient to pay the Special Tax for that parcel in the event of a default in payment of Special Taxes by the landown er. See “SPECIAL RISK FACTORS — Property Values” and Appendix D — “APPRAISAL REPORT.”
Estimated Value-to-Lien Ratios
The aggregate estimated value of property within the District , based on the methodology described above under “— Property Values and the Appraisal Report,” is $116,928,504. Dividing the aggregate estimate of value by the principal amount of the Bonds results in a value to lien ratio of 6.75-to-1* for the District.

* Preliminary, subject to change.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 41

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November 6, 2024
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Including overlapping indebtedness, the estimated value to lien ratio based on the appraised value is 6.08-to-1*.

See Table 4 below and “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.” Based on ownership status as of August 30, 2024, and assuming no further development activity and transfer of ownership, individual homeowners would be responsible for approximately 51.62%, Lennar Homes for approximately 37.54% and Lennar Homes’ land banking entity for approximately 5.85% of the projected Fiscal Year 202 5-26 Special Tax levy. Pursuant to the contractual arrangement between Lennar Homes and such land banking entity, Lennar Homes has agreed to pay the Special Taxes on the property that is su bject to the land banking arrangement so long as such arrangement is in effect. Lennar Homes expects to acquire the remaining lots subject to such arrangement by the end of 2024.

Table 2A below sets forth the estimated value-to-lien ratio of the Taxable Property within the District based on building permits issued and ownership status as of August 30, 2024, the aggregate estimated values set forth in the Appraisal Report, the principal amount of the Bonds and overlapping debt. Table 2B below sets forth the estimated value-to-lien ratio of the Taxable Property within the District based on ownership status as of August 30, 2024, the aggregate estimated values set forth in the Appraisal Report, the principal amount of the Bonds and overlapping debt and the assumption that building permits for all 305 lots within the District will be issued by May 1, 2025. Lennar Homes currently expects to obtain building permits for all 305 lots in the District by May 1, 2025, however no assurances can be made that such building permits will be issued.

Table 3A below sets forth the estimated value-to-lien ratios for Taxable Property within the District by various ranges based upon the principal amount of the Bonds and overlapping debt based on building permits issued as of August 30, 2024. Table 3B below sets forth the estimated value-to-lien ratios for Taxable Property within the District by various ranges based upon the principal amount of the Bonds and overlapping debt and the assumption that building permits for all 305 lots within the District will be issued by May 1, 2025.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 42

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November 6, 2024
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TABLE 2A

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH)

ESTIMATED VALUE-TO-LIEN RATIOS
(Based on development status as of August 30, 2024)
Property Owner(1)
No. of
Parcels
Appraised/Assessed
Property Value (2)
% of
Appraised
Value
Fiscal Year
2025-26
Maximum
Tax(3)
Fiscal Year
2025-26
Percentage of
Maximum Tax
Estimated
Fiscal Year
2025-26
Levy(4)
% of
Estimated
Fiscal Year
2025-26
Levy
CFD 2023-1
2024
Bonds(5)*
All Other
Overlapping
Debt Issued(6)
Appraised
Value-to-
Lien Ratio*
Developed Property(7)
Individual Homeowners 160 $ 86,981,205 74.60% $ 603,932 52.05% $ 523,269 56.61% $ 9,779,277 $ 1,072,239 8.02:1 AG EHC II (LEN) CA 1, L.P.(8) 16 2,754,303 2.36 57,563 4.96 52,437 5.67 979,989 107,450 2.53:1 Lennar Homes(2) 102 22,414,758 19.22 394,579 34.01 341,403 36.93 6,380,417 699,574 3.17:1 Total Developed 278 $ 112,150,266 96.19% $ 1,056,074 91.02% $ 917,109 99.22% $ 17,139,683 $ 1,879,263 5.90:1

Approved Property(7)
AG EHC II (LEN) CA 1, L.P.(8) 7 $ 1,036,048 0.89% $ 23,326 2.01% $ 1,622 0.18% $ 30,307 $ 3,323 30.81:1 Lennar Homes 20 3,408,190 2.92 80,820 6.97 5,619 0.61 105,009 11,514 29.25:1 Total Approved 27 $ 4,444,238 3.81% $ 104,146 8.98% $ 7,241 0.78% $ 135,317 $ 14,837 29.60:1

Total 305 $ 116,594,504 100.00% $ 1,160,221 100.00% $ 924,350 100.00% $ 17,275,000 $ 1,894,100 6.08:1

* Preliminary, subject to change.
(1) Property ownership status as of August 30, 2024. As of October 1, 2024, Lennar Homes acquired an additional lot owned by the land bank and had conveyed nine additional homes to individual homeowners.
(2) Based on the aggregate assessed/appraised value set forth in the Appraisal Report as of the August 30, 2024, the Date of Value. (3) Based on Backup Special Tax rate on Developed Property and the Maximum Special Tax rate on Approved Property. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Rate and Method of Apportionment of Special Tax.” (4) Estimated Fiscal Year 2025-26 Special Tax Levy based upon development status as of August 30, 2024, and an Administrative Expenses Cap for Fiscal Year 2025-26 of $30,600. The levy on Developed Property shown is equal to 100% of the Assigned Special Tax rates. (5) Allocated based on estimated Fiscal Year 2025-26 Special Tax levy. (6) Includes overlapping debt set forth in Table 4 below. (7) Based on the number of building permits issued as of August 30, 2024. (8) Entity is the land bank for Lennar Homes’ project in the District. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 43

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November 6, 2024
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TABLE 2B

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH)

ESTIMATED VALUE-TO-LIEN RATIOS
(Assumes all building permits issued prior to May 1, 2025)

Property Owner(1)
No. of
Parcels
Appraised/Assessed
Property Value (2)
% of
Appraised
Value
Fiscal Year
2025-26
Maximum
Tax(3)
Fiscal Year
2025-26
Percentage
of
Maximum
Tax
Estimated
Fiscal Year
2025-26
Levy(4)
% of
Estimated
Fiscal Year
2025-26
Levy
CFD 2023-1
2024
Bonds(5)*
All Other
Overlapping
Debt Issued(6)
Appraised
Value-to-
Lien Ratio*
Developed Property(7)
Individual Homeowners 160 $ 86,981,205 74.60% $ 603,932 51.85% $ 477,108 51.62% $ 8,916,583 $ 977,650 8.79:1 AG EHC II (LEN) CA 1, L.P.(8) 23 3,790,351 3.25 81,808 7.02 68,598 7.42 1,282,006 140,564 2.66:1 Lennar Homes 122 25,822,948 22.15 479,074 41.13 378,644 40.96 7,076,411 775,886 3.29:1 Total Developed 305 $ 116,594,504 100.00% $ 1,164,813 100.00% $ 924,350 100.00% $ 17,275,000 $ 1,894,100 6.08:1

* Preliminary, subject to change.
(1) Property ownership status as of August 30, 2024. As of October 1, 2024, Lennar Homes acquired an additional lot owned by the land bank and had conveyed nine additional homes to individual homeowners.
(2) Based on the aggregate assessed/appraised value set forth in the Appraisal Report as of the August 30, 2024, the Date of Value. (3) Based on Backup Special Tax rate on Developed Property. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Rate and Method of Apportionment of Special Tax.” (4) Based on the assumption that all th e building permits for all 305 homes in the District will be issued by May 1, 2025 and an Administrative Expenses Cap for Fiscal Year 2025 -26 of $30,600. The levy on Developed Property shown is equal to approximately 91.2% of the Assigned Special Tax rates. (5) Allocated based on estimated Fiscal Year 2025-26 Special Tax levy. (6) Includes overlapping debt set forth in Table 4 below. (7) Assumes that building permits for all 305 homes in the District will be issued by May 1, 2025. For the number of building p ermits issued as of August 30, 2024, see Table 2A above .

Lennar Homes currently expects to obtain all remaining buildings permits for its planned homes in the District by May 1, 2025. (8) Entity is the land bank for Lennar Homes project in the District. As of October 1, 2024, Lennar Homes acquired an additional lot owned by the land bank. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 44

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November 6, 2024
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TABLE 3A

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH) VALUE-TO-LIEN STRATIFICATION *
(Based on development status as of August 30, 2024)

Value-to-Lien Category
No. of
Parcels
% of
Developed
Property
Appraised
Value(1)
% of
Appraised
Value
CFD 2023-1
Estimated
Fiscal Year
2025-26
Levy
Percent
Share of
Estimated
Fiscal Year
2025-26
Levy
CFD 2023-1
2024 Bonds(2)
Percent Share
of 2024 Bonds
All Other
Overlapping
Debt
Less than 3.00:1(3) 95 31.15% $ 17,849,584 15.31% $ 323,874 35.04% $ 6,052,827 35.04% $ 663,656 Between 3.01:1 to 6.00:1 24 7.87 8,070,178 6.92 88,686 9.59 1,657,431 9.59 181,727 Between 6.01:1 to 9.00:1 142 46.56 77,310,400 66.31 457,805 49.53 8,555,832 49.53 938,096 Between 9.01:1 to 12.00:1 17 5.57 8,920,104 7.65 46,744 5.06 873,592 5.06 95,784 Greater than 12.00:1(3) 27 8.85 4,444,238 3.81 7,241 0.78 135,317 0.78 14,837 Totals 305 100.00% $ 116,594,504 100.00% $ 924,350 100.00% $ 17,275,000 100.00% $ 1,894,100

* Preliminary, subject to change.
(1) Based on the aggregate assessed/appraised value set forth in the Appraisal Report as of the August 30, 2024, the Date of Value. (2) Allocated based on the estimated Fiscal Year 2025-26 Special Tax levy based on development status as of August 30, 2024. (3) The minimum value to lien in the less than 3.00:1 category is 1.71:1*. The maximum value-to-lien in the greater than 12.00:1 category is 31.17:1*.

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 45

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November 6, 2024
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TABLE 3B

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH) VALUE-TO-LIEN STRATIFICATION *
(Assumes all building permits issued prior to May 1, 2025)

Value-to-Lien Category
No. of
Parcels
% of
Developed
Property
Appraised
Value(1)
% of
Appraised
Value
CFD 2023-1
Estimated
Fiscal Year
2025-26
Levy
Percent
Share of
Estimated
Fiscal Year
2025-26
Levy
CFD 2023-1
2024 Bonds(2)
Percent Share
of 2024 Bonds
All Other
Overlapping
Debt
Less than 3.00:1(3) 53 17.38% $ 9,346,429 8.02% $ 186,948 20.22% $ 3,493,840 20.22% $ 383,079 Between 3.01:1 to 6.00:1 93 30.49 21,017,571 18.03 277,362 30.01 5,183,567 30.01 568,347 Between 6.01:1 to 9.00:1 67 21.97 37,279,357 31.97 216,438 23.42 4,044,968 23.42 443,506 Greater than 9.00:1(3) 92 30.16 48,951,147 41.98 243,602 26.35 4,552,625 26.35 499,168 Totals 305 100.00% $ 116,594,504 100.00% $ 924,350 100.00% $ 17,275,000 100.00% $ 1,894,100

* Preliminary, subject to change.
(1) Based on the aggregate assessed/appraised value set forth in the Appraisal Report as of the August 30, 2024, the Date of Value. (2) Allocated based on the estimated Fiscal Year 2025-26 Special Tax levy assuming that building permits for all 305 homes in the District will be issued by May 1, 2025. For the number of building permits issued as of August 30, 2024, see Table 2A above. Lennar Homes currently expects to obtain all remaining buildings permits for its planned homes in the District by May 1, 2025.
(3) The minimum value to lien in the less than 3.00:1 category is 1.87:1*. The maximum value-to-lien in the greater than 9.00:1 category is 10.32:1*.

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 46

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

[Remainder of Page Intentionally Left Blank]

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 47

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November 6, 2024
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TABLE 4

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH)

DIRECT AND OVERLAPPING DEBT
AS OF AUGUST 30, 2024
I. Appraisal Value (1) $ 116,594,504

II. Land Secured Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable
Parcels in
CFD No.
2023-1 (4)
Amount
Applicable
City of Menifee CFD No. 2023-1, Series 2024 CFD $17,275,000* $17,275,000* 100.000% 305 $ 17,275,000* Perris Union High School District, 2015 Revenue Bonds CFD 36,315,000 30,100,000 1.619 305 487,260 Total Land Secured Bonded Debt $ 17,762,260*
Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable
Parcels in
CFD No.
2023-1 (4)
Amount
Applicable
City of Menifee CFD No. 2023-1, Series 2024(2) CFD $23,000,000 $5,725,000 100.000% 305 $ 5,725,000 Perris Union High School District, 2015 Revenue Bonds CFD 40,000,000 3,685,000 1.619 305 59,653 Total Unissued Land Secured Indebtedness $ 5,784,653*

TOTAL OUTSTANDING AND UNISSUED LAND SECURED INDEBTEDNESS $ 23,546,913*

III. General Obligation Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable
Parcels in
CFD No.
2023-1 (4)
Amount
Applicable
Metropolitan Water Debt Service GO $850,000,000 $ 19,215,000 0.055% 305 $ 10,567 Mt. San Jacinto Jr. College Debt Service GO 295,000,000 242,210,000 0.049 305 118,668 Menifee Union School Debt Service GO 180,955,495 152,811,292 0.380 305 581,435 Perris Union High School Debt Service GO 363,415,283 292,042,190 0.238 305 696,170 Total Outstanding General Obligation Bonded Debt $ 1,406,840 Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable
Parcels in
CFD No.
2023-1 (4)
Amount
Applicable
Metropolitan Water Debt Service GO $850,000,000 $ 0 0.055% 305 $ 0 Mt. San Jacinto Jr. College Debt Service GO 295,000,000 0 0.049 305 0 Menifee Union High School Debt Service GO 180,960,000 4,506 0.380 305 17 Perris Union High School Debt Service GO 363,420,000 4,717 0.238 305 11 Total Unissued General Obligation Indebtedness $ 28

TOTAL OUTSTANDING AND UNISSUED GENERAL OBLIGATION INDEBTEDNESS $ 1,406,868

TOTAL OF ALL OUTSTANDING DIRECT AND OVERLAPPING BONDED DEBT $ 19,169,100* TOTAL OF ALL OUTSTANDING DIRECT AND UNISSUED DIRECT OVERLAPPING INDEBTEDNESS $ 24,953,781*

IV. Ratios to Appraisal Value
Outstanding Land Secured Bonded Debt 6.56:1*
Total Outstanding Bonded Debt 6.08:1*

* Preliminary, subject to change.
(1) Based on the Appraisal Report as of August 30, 2024, Date of Value. (2) Parity Bonds may be issued for refunding purposes only.

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 48

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November 6, 2024
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Table 5 below describes the estimated Fiscal Year 2024-25 effective tax burden for the development in the District based on the average assessed value of homes with improvement value, the Fiscal Year 202 4-25 Special Tax levy and Fiscal Year 2024-25 actual levies for all other overlapping taxing jurisdictions.

TABLE 5

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH) ESTIMATED FISCAL YEAR 2023-24 TAX OBLIGATION
Average Home Value(1) $ 567,265

Ad Valorem Property Taxes:

General Purpose $ 5,673
Metro Water West (0.00700%) 40
Mt. San Jacinto Jr College (0.00268%) 15
Menifee Union School (0.0508%) 288
Perris Union High School (0.06850%) 389
Total General Property Taxes $ 6,404

Assessment, Special Taxes & Parcel Charges:

Flood Control Stormwater / Clean water / Santa Ana $ 4 MWD Standby East charge 7
EMWD Infrastructure Availability Charge 26
Perris Union High School District CFD 92-1 337
City of Menifee CFD 2017-1, Zone 18 Maintenance Services 556 City of Menifee CFD 2023-1 (Rockport Ranch)(2) 3,219
Total Assessments & Special Taxes $ 4,148

Projected Total Property Tax $ 10,552
Projected Effective Tax Rate 1.86%

(1) Based on the average assessed value of homes with improvement value. (2) Reflects the average Fiscal Year 2024-25 Special Tax levy on Developed Property at the Assigned Special Tax rate.

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 49

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November 6, 2024
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Delinquency History
Unpaid amounts of the Special Taxes for the first and second installments become delinquent after December 10 and April 10 of each Fiscal Year, respectively. Fiscal Year 2023-24 was the first fiscal year for which Special Taxes were levied. There were no delinquencies for the Fiscal Year 2023-24 Special Tax levy.

PROPERTY OWNERSHIP AND THE DEVELOPMENT
The information about the property in the District contained in this Official Statement has been provided by representatives of Lennar Homes . None of the Underwriter, the City or the District has independently confirmed the information in this section of the Official Statement . The Underwriter, the City, and the District make no representation as to the accuracy or adequacy of the information contained in this caption. There may be material adverse changes in this information after the date of this Official Statement. Neither the Bonds nor the Net Taxes securing the Bonds and any Parity Bonds are personal obligations of Lennar Homes , the AG1 Land Bank, or any affiliate thereof or any other property owner and, in the event that any property owner defaults in the payment of its Special Taxes, the District may proceed with judicial foreclosure but has no direct recourse to the assets of any property owner or any affiliate thereof. See the caption “SPECIAL RISK FACTORS.” Notwithstanding the belief of Lennar Homes that it will have sufficient funds to complete its planned development in the District, no assurance can be given that amounts necessary to fund the remaining planned development by Lennar Homes in the District will be available when needed. None of Lennar Homes, or any other entity or person, is under any legal obligation of any kind to expend funds for the development of the property as planned by Lennar Homes in the District. Any contributions by Lennar Homes or any other entity or person to fund the costs of its development are entirely voluntary. If and to the extent the aforementioned sources are inadequate to pay the costs to complete the planned development by Lennar Homes within the District, the remaining portions of such development may not be completed. Lennar Homes has no legal obligation to Bondholders to make any such funds available for construction or development, or the payment of ad valorem property taxes or the Special Taxes. See the caption “SPECIAL RISK FACTORS.” General
The District contains approximately 39.6 taxable acres, and is located at the southwest corner of Old Newport Road and Briggs Road within the City. The property within the District is being developed by Lennar Homes in a project marketed by Lennar Homes as “Rockport Ranch.” The property within the District is planned for 305 single -family detached homes divided across the North, South, and West Shore communities at Rockport Ranch.

The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District has been completed. Lennar Homes expects to complete the remaining in-tract infrastructure within the District, which consists primarily of landscaping, certain interior streets, walls, and wet and dry utilities as construction of the related homes occurs. Lennar Homes has completed amenities within the Rockport Ranch project that include a man-made lake (which also serves as a drainage facility), a swimming pool and related facilities, picnic and barbeque areas, neighborhood parks and trails.

Planned Development Within the District
The property within the District is planned for 305 residential units within three product lines – North Shore (109 homes), South Shore (100 homes) and West Shore (96 homes).

As of August 30, 2024 (the date of value of the Appraisal Report), Lennar Homes had completed and conveyed 160 homes within the District to individual homeowners, and owned nine model homes, 81 homes Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 50

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under construction, and 32 near-finished lots. In addition, as of such date, the AG1 Land Bank owned 23 lots that were under option to be acquired by Lennar Homes.

Since the date of value of the appraisal, Lennar Homes acquired one additional lot from the AG1 Land Bank and has closed nine additional homes to homebuyers. The following tables summarize the status of development within the three product lines planned within the District as of October 1, 2024.

COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH)

NORTH SHORE
(As of October 1, 2024)
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
October 1,
2024
Completed
Homes/Homes
Under
Construction(1) Finished Lots
Base Home
Prices(2)
1 21 1,772 16 4 1 $563,210
2 45 2,443 24 16 5 $654,199
3 43 2,623 20 17 6 $643,370
__109 __60 37__ __12

(1) Includes 2 model homes, 0 completed production homes, and 35 production homes under construction , of which 16 were under contract to be sold as of October 1, 2024.
(2) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions. Base sales prices are subject to change.

Source: Lennar Homes.

COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH)

SOUTH SHORE
(As of October 1, 2024)
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
October 1,
2024
Completed
Homes/Homes
Under
Construction(1) Finished Lots
Base Home
Prices(2)
1 15 1,950 10 4 1 $624,385
2 12 2,760 5 6 1 $729,590
3 18 2,846 11 6 1 $744,590
4 25 3,157 14 7 4 $782,005
5 30 4,131 13 11 6 $914,915
100 53 34 13

(1) Includes 4 model homes, 0 completed production homes, and 30 production homes under construction , of which 18 were under contract to be sold as of October 1, 2024.
(2) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions. Base sales prices are subject to change.

Source: Lennar Homes.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 51

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November 6, 2024
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COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH)

WEST SHORE
(As of October 1, 2024)
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
October 1,
2024
Completed
Homes/Homes
Under
Construction(1) Finished Lots
Base Home
Prices(2)
1 24 1,860 14 10 0 $563,970
2 24 1,987 14 10 0 $590,935
3 24 2,207 14 10 0 $607,325
4 24 2,228 14 10 0 $623,290
96 56 40 0

(1) Includes 3 model homes, 0 completed production homes, and 37 production homes under construction, of which 19 were in contract to be sold as of October 1, 2024.
(2) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions. Base sales prices are subject to change.

Source: Lennar Homes.

The tables above assume that Lennar Homes will acquire the remaining 22 lots owned by the AG1 Land Bank. Lennar Homes is under option to acquire such lots by the end of 2024. However, Lennar Homes has the option but not the obligation to acquire the remaining 22 lots in the District from the AG1 Land Bank, so there can be no guarantee that Lennar Homes will acquire these lots.

Lennar Homes expects to complete and convey all remaining homes in the District to individual homeowners by September 2025.

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

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

Lennar Corporation is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and, in accordance therewith, files reports, proxy statements, and other information, including financial statements, with the Securities an d Exchange Commission (the “SEC”). Such filings, particularly Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 52

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November 6, 2024
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Lennar Corporation’s annual report on Form 10 -K and its most recent quarterly report on Form 10 Q, may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such filings can also be accessed over the internet at the SEC’s website at www.sec.gov.

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

Financing Plan. To date, Lennar Homes has financed its land acquisition and various site development costs related to its property in the District through internally generated funds. As of October 1, 2024, Lennar Homes has expended approximately $143 million on land acquisition and development and homebuilding costs in the District. Lennar Homes expects to incur approximately $ 38 million on remaining land acquisition land development, homebuilding, marketing, and sales costs for its project in the District. Lennar Homes expects to use home sales revenues and internal funding to complete its development within the District, and believes that it will have sufficient funds available to complete its planned development as described in this Official Statement.

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

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

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

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

See “SPECIAL RISK FACTORS – Concentration of Property Ownership.” Copies of Lennar Corporation’s Annual Report and related financial statements, prepared in accordance with generally accepted accounting standards, are available from Lennar Corporation’s website at www.lennar.com.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 53

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November 6, 2024
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The Land Bank
In December 2021, Lennar Homes sold all of the property (to be developed as 305 lots) located in the District (the “District Lots”) to AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership (the “AG1 Land Bank”) in order to create a land banking structure.

To facilitate the land banking structure for the District Lots, Lennar Homes and the AG1 Land Bank entered into that certain Option Agreement, dated December 28 , 2021 (the “Lennar Option Agreement”) , whereby Lennar Homes had the option, but not the obligation, to purchase all 305 District Lots from the AG1 Land Bank pursuant to a takedown schedule agreed upon between Lennar Homes and the AG1 Land Bank. The takedown of lots commenced in December 2022 and continued periodically thereafter, with the most rece nt takedown occurring on September 16, 2024.

As of October 1, 2024, Lennar Homes has taken down 283 of the 305 lots from the AG1 Land Bank, and there are two further takedowns scheduled as follows:

October 14, 2024: 15 lots
December 14, 2024: 7 lots
Lennar Homes has the option but not the obligation to acquire the remaining 22 lots in the District from the AG1 Land Bank, so there can be no guarantee that Lennar Homes will acquire these lots.

During the term of the Lennar Option Agreement, Lennar Homes is responsible for paying all taxes (including Special Taxes) on the property owned by the AG1 Land Bank.

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

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

No assurance can be given that the property owners within the District will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See the caption “— Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 54

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Enforcement Delays — Bankruptcy” for a discussion of certain limitations on the District’s ability to pursue judicial proceedings with respect to delinquent parcels.

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

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

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

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

In the event that sales or foreclosures of property are necessary, there could be a delay in payments to Owners of the Bonds (if the Reserve Account has been depleted) pending such sales or the prosecution of such foreclosure proceedings and receipt by the City on behalf of the District of the proceeds of sale. The District may adjust the future Special Tax levied on taxable parcels in the District, subject to limitations described above under the caption “THE DISTRICT — Rate and Method of Apportionment,” to provide an amount required to pay interest on and principal of the Bonds, and the amount, if any, necessary to replenish the Reserve Account to an amount equal to the Reserve Requirement, and to pay all current expenses. There is, however, no assurance Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 55

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

Prior to July 1, 1983, the right of redemption from foreclosure sales was limited to a period of one year from the date of sale. Under legislation effective July 1, 1983, the statutory right of redemption from such foreclosure sales has been repealed. However, a period of 20 days must elapse after the date on which the notice of levy of the interest in real property was served on the judgment debtor before the sale of such lot or parcel can be made. Furthermore, if the purchaser at the sale is the judgment creditor (e.g., the District), an action may be commenced by the delinquent property owner within 90 days after the date of sale to set aside such sale. The constitutionality of the aforementioned legislation, which repeals the one-year redemption period, has not been tested and there can be no assurance that, if tested, such legislation will be upheld. (Section 701.680 of the Code of Civil Procedure of the State.)
Impact of Economic Conditions on the Development in the District Certain events and factors that negatively affect the regional, State and national economies could have an adverse effect on the pace at which the current or any future developers in the District can complete the remaining infrastructure and future homes, and demand by, and the ability of individuals to purchase homes within the District. Such events and factors could include rising inflation and interest rates, persistent supply chain issues and global market instability caused by geopolitical events. Any adverse impact of the foregoing and other economic factors on the projects in the District and the real estate market in general cannot be predicted.

Concentration of Ownership
Based on ownership status as of August 30, 2024 , and assuming no further development activity and transfer of ownership, individual homeowners would be responsible for approximately 51.62%, Lennar Homes for approximately 37.54% and Lennar Homes’ land banking entity for approximately 5.85% of the projected Fiscal Year 2025 -26 Special Tax levy . Pursuant to the contractual arrangement between Lennar Homes and such land banking entity, Lennar Homes has agreed to pay the Special Taxes on the property that is su bject to the land banking arrangement so long as such arrangement is in effect.

The timely payment of principal of and interest on the Bonds depends upon the willingness and ability of the current and future property owners in the District to pay the Special Taxes prior to delinquency. General and local economic conditions and governmental requirements or restrictions may affect the willingness of the current property owners, or any successor property owners, to pay the Special Taxes, and there is no assurance that the current property owners, or any successor property owners, will pa y such Special Taxes even if financially able to do so. Due to the concentration of ownership of the property within the District, a failure by Lennar Homes or any successor property owner thereto to pay the Special Taxes may result in a default in the payment of debt service on the Bonds. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” See “SOURCES OF PAYMENT FOR THE BONDS — Lennar Homes Letter of Credit ” for a description of the letter of credit provided by Lennar Homes to secure the payment of Special Taxes levied on Item Title: 12.1
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the property in the District owned by Lennar Homes and the AG1 Land Bank during the term of the Lennar Option Agreement.

Property Values
The value of the property within the District is a critical factor in determining the investment quality of the Bonds. If a property owner is delinquent in the payment of Special Taxes, the District’s only remedy is to commence foreclosure proceedings against the delinquent parcel in an attempt to obtain funds to pay the Special Taxes. Reductions in property values due to a downturn in the economy, physical events such as earthquakes, fires or floods, stricter land use regulations, delays in development o r other events will adversely impact the security underlying the Special Taxes. See “THE DISTRICT — Appraisal Report ” and Appendix D — “APPRAISAL REPORT.”
The Appraiser has estimated, on the basis of certain assumptions and limiting conditions contained in the Appraisal Report, that as of the Date of Value, the market value of the land and improvements within the District was approximately $116,928,504. See “THE DISTRICT — Appraisal Report” The Appraisal Report indicates the Appraiser’s opinion as to the market value of the properties referred to therein as of the date and under the conditions specified therein. The Appraiser’s opinion reflects conditions prevailing in the applicable market as of the Date of Value. The Appraiser’s opinion does not predict the future value of the subject property, and there can be no assurance that market conditions will not change adversely in the future.

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

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

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

The District is not located in an area that the Department of Forestry and Fire Protection of the State of California has designated as a high fire hazard severity zone. However, there is a risk of residential property within the District being destroyed by wildfires and no assurance can be given as to the severity or frequency of Item Title: 12.1
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wildfires within the vicinity of the District. Additionally, property located adjacent to burn areas can be subject to mudslides and flooding, which can cause significant damage and destruction to property.

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

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

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

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

It is possible that property in the District may be liable for hazardous substances in the future as a result of the existence, currently, of a substance presently classified as hazardous but that has not been released or the release of which is not presently threatened, or the existence, currently, on the property of a substance not presently classified as hazardous but that may in the future be so classified. Additionally, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling such substance.

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

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

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

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

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

In the case of the FDIC, in the event that any financial institution making a loan that is secured by parcels is taken over by the FDIC and the applicable Special Tax is not paid, the remedies available to the District may be constrained. The FDIC’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”) provides that taxes other than ad valorem taxes that are secured by a valid lien in effect before the FDIC acquired an interest in a property will be paid unless the FDIC determines that abandonment of its interests is appropriate. The Policy Statement provides that the FDIC generally will not pay installments of non-ad valorem taxes that are levied after the time the FDIC acquires its fee interest, nor will the FDIC recognize the validity of any lien to secure payment except in certain cases where the Resolution Trust Corporation had an interest in property on or prior to December 31, 1995. Moreover, the Policy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, the FDIC will not permit its lien to be foreclosed out by a taxing authority without its specific consent, nor will the FDIC pay or recognize liens for any penalties, fines or similar claims imposed for the nonpayment of taxes.

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

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

In the case of Fannie Mae and Freddie Mac, in the event a parcel of taxable property is owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, or a private deed of trust secured by a parcel of taxable property is owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, the ability to foreclose on the parcel or to collect delinquent Special Taxes may be limited. Federal courts have held that, based on the supremacy clause of the United States Constitution “this Constitution, and the Laws of the United States which shall be made in Item Title: 12.1
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Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, anything in the Constitution or Laws of any State to the contrary notwithstanding.” In the absence of Congressional intent to the contrary, a state or local agency cannot foreclose to collect delinquent taxes or assessments if foreclosure would impair the federal government interest. This means that, unless C ongress has otherwise provided, if a federal government entity owns a parcel of taxable property but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parce l to collect the delinquent taxes and assessments.

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

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

The imposition of additional liens on a parity with the Special Taxes may reduce the ability or willingness of property owners to pay the Special Taxes and increase the possibility that foreclosure proceeds will not be adequate to pay delinquent Special Ta xes. The District will covenant in the Indenture not to issue Parity Bonds other than for refunding all of a portion of the Bonds or Parity Bonds.

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

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

Limited Obligations
The Bonds and interest thereon are not payable from the general funds of the City. Except with respect to the Net Taxes, neither the credit nor the taxing power of the District or the City is pledged for the payment of the Bonds or the interest thereon, and, except as provided in the Indenture, no Owner of the Bonds may compel Item Title: 12.1
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the exercise of any taxing power by the District or the City or force the forfeiture of any City or District property.

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

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

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

Failure by owners of the parcels to pay Special Tax installments when due, delay in foreclosure proceedings, or the inability of the District to sell parcels that have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of Special Taxes levied against such parcels may result in the inability of the District to make full or timely payments of debt service on the Bonds, which may in turn result in the depletion of the Reserve Account. See the caption “— Enforcement Delays — Bankruptcy.” Ballot Initiatives
Articles XIII A, XIII B, XIII C, and XIII D of the California Constitution were adopted pursuant to measures qualified for the ballot pursuant to the State’s constitutional initiative process. From time to time, other initiative measures could be adopted by California voters. The adoption of any such initiative might place limitations on the ability of the State, the City, or other local agencies to increase revenues or to increase appropriations.

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

It may be possible, however, for voters or the City Council, acting as the legislative body of the District, to reduce the Special Taxes in a manner that does not interfere with the timely repayment of the Bonds, but that does reduce the maximum amount of Special Taxes that may be levied in any year below the existing levels.

Therefore, no assurance can be given with respect to the future levy of Special Taxes in amounts greater than Item Title: 12.1
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the amount necessary for the timely retirement of the Bonds. Nevertheless, to the maximum extent that the law permits it to do so, the District will covenant that it will not initiate proceedings under the Act to reduce the maximum Special Tax rates for t he District, unless, in connection therewith, the District receives a certificate from one or more Independent Financial Consultants that, when taken together, certify that: (i) such changes do not reduce the maximum Special Taxes that may be levied in eac h year on property within the District to an amount that is less than the Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such proposed reduction; and (ii) the District is not deli nquent in the payment of the principal of or interest on the Bonds or any Parity Bonds. The District also will covenant that, in the event an initiative is adopted which purports to reduce or otherwise alter the Rate and Method, it will commence and pursue legal action in order to preserve its ability to comply with the foregoing covenant. However, no assurance can be given as to the enforceability of the foregoing covenants.

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

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

Horizon. The Sacramento County Superior Court issued a ruling in Horizon Capital Investments, LLC v. City of Sacramento et al. (Case No. 34-2017-80002661), which was a case involving an election to approve the levy of a special tax within a community facilities district (“CFD”) formed under the Act.

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

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

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

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

Voters in the District approved Special Tax on June 7, 2023. Based on Sections 53341 and 53359 of the Act and analysis of existing laws, regulations, rulings and court decisions, the District believes that no successful challenge to the Special Tax being levied in accordance with the Rate and Method m ay now be brought. In connection with the issuance of the Bonds, Bond Counsel expects to deliver its opinion in the proposed form attached hereto as Appendix C.

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

No Ratings – Limited Secondary Market
The District has not applied to have the Bonds rated by any nationally recognized bond rating company, and it does not expect to do so in the future.

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

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

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

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

CONTINUING DISCLOSURE
District Continuing Disclosure
Pursuant to a Continuing Disclosure Certificate, dated as of December 1, 2024 (the “Disclosure Certificate”), to be executed and delivered by the District at the time of issuance of the Bonds, the District will covenant for the benefit of the holders and Beneficial Owners of the Bonds to provide certain financial information and operating data relating to the District by March 1 following the end of the District’s Fiscal Year (currently its Fiscal Year ends on June 30) (the “Annual Report”), commencing with the Annual Report for the Fiscal Year ending June 30, 2024, and to provide notices of the occurrence of certain enumerated events. The Annual Report and the notices of enumerated events will be filed by the District with EMMA. The specific nature of the information to be contained in the Annual Report and the notice of enumerated events is set forth in Appendix F — “FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Underwriter in complying with subsection (b)(5) of Rule 15c2-12.

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

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Developer Continuing Disclosure
The Underwriter does not consider Lennar Homes to be an “obligated person” with respect to the Bonds for purposes of the Rule. Notwithstanding the foregoing, to provide updated information with respect to the development Lennar Homes and the property it owns or has under option with the AG1 Land Bank within the District, Lennar Homes will execute a continuing disclosure certificate (the “Lennar Continuing Disclosure Certificate”) pursuant to which it will covenant to provide semiannual reports until satisfaction of certain conditions set forth in the Lennar Continuing Disclosure Certificate. The semiannual reports to be provided by Lennar Homes will contain updates regarding the development within the District as outlined in Section 4 of the Lennar Continuing Disclosure Certificate attached hereto as APPENDIX G. In addition to its semiannual reports, Lennar Homes will agree to provide notices of certain events , including certain events relating to the Land Bank, set forth in the Lennar Continuing Disclosure Certificate.

Lennar Homes’ obligations under the Lennar Continuing Disclosure Certificate will terminate upon the earliest to occur of: (a) the legal defeasance, prior redemption or payment in full of all the Bonds; or (b) at such time as Lennar Homes has conveyed 244 residential units in the District to individual homeowners.

To the actual knowledge of Lennar Homes, other than as disclosed in this Official Statement, in the last five years, Lennar Homes has not failed to comply in any material respects with its previous continuing disclosure undertakings, specifically regarding its requirement to provide developer periodic reports or to provide notice of occurrence of enumerated events. However, (i) in connection with the $16,780,000 California Municipal Finance Authority Special Tax Revenue Bonds BOLD Program Series 2020B, Len nar Homes inadvertently failed to file the initial semi -annual report by the due date of May 1, 2021, but filed a curative report on May 21, 2021; and (ii) in connection with the $5,795,000 City of Rancho Cordova Grantline 208 Community Facilities District No. 2018-1 Special Tax Bonds, Series 2021B, Lennar Homes inadvertently failed to file the initial annual report by the due date of April 1, 2022, but filed a curative report on September 21, 2022.

TAX MATTERS
In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California (“Bond Counsel”), under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of calculating the federal alternative minimum tax i mposed on individuals.

However, it should be noted that, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), generally certain corporations with more than $1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed b y Section 55 of the Code on such corporations.

In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax.

In the opinion of Bond Counsel, the difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity of such Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Beneficial Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Beneficial Owner will increase the Beneficial Owner’s basis in the applicable Bond.

Bond Counsel’s opinion as to the exclusion from gross income of interest (and original issue discount) on the Bonds is based upon certain representations of fact and certifications made by the District, the City and others and is subject to the condition that the District, the City and others making such representations comply Item Title: 12.1
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with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds to assure that interest (and original issue discount) on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause the interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The District and the City will covenant to comply with all such requirements.

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

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

SUBSEQUENT TO THE ISSUANCE OF THE BONDS THERE MIGHT BE FEDERAL, STATE, OR

LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY CHANGES TO OR

INTERPRETATIONS OF FEDERAL, STATE, OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE,

OR LOCAL TAX TREATMENT OF THE BONDS INCLUDING THE IMPOSITION OF ADDITIONAL

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

SUBSEQUENT TO THE ISSUANCE OF THE BONDS STATUTORY CHANGES WILL NOT BE

INTRODUCED OR ENACTED OR JUDICIAL OR REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE BONDS,

ALL POTENTIAL PURCHASE RS SHOULD CONSULT THEIR TAX ADVISORS REGARDING

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

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

Although Bond Counsel will render an opinion that interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes provided that the District and the City continue to comply with certain requirements of the Code, the ownership of the Bonds and the accrual or receipt of interest (and original issue discount) with respect to the Bonds may otherwise affect the tax liability of certain persons.

Bond Counsel expresses no opinion regarding any such tax consequences. Accordingly, before purchasing any Item Title: 12.1
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of the Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the Bonds.

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

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

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

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

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

UNDERWRITING
The Bonds are being purchased by Raymond James & Associates, Inc. (the “Underwriter”). The Underwriter has agreed to purchase the Bonds at a price of $_____ (being the $__________ aggregate principal amount of the Bonds, less an Underwriter’s discount of $_____, plus original issue premium of $______). The Bond Purchase Agreement relating to the Bonds provides that the Underwriter will purchase all of the Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the Bond Purchase Agreement, the approval of certain legal matters by counsel and certain other conditions.

The Underwriter’s compensation is contingent upon the successful issuance of the Bonds.

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

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

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

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

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

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

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

COMMUNITY FACILITIES DISTRICT NO. 2023-1
(ROCKPORT RANCH) OF THE CITY OF MENIFEE
By:

Armando G. Villa
City Manager of the City of Menifee
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APPENDIX A

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
A Special Tax (all capitalized terms are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee (“CFD No. 2023-1”). The amount of Special Tax to be levied in each Fiscal Year on an Assessor’s Parcel shall be determined by the City Council of the City of Menifee, acting in its capacity as the legislative body of CFD No. 2023 -1, by applying the appropriate Special Ta x for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS

The terms hereinafter set forth have the following meanings:

“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel with Single Family Residential Property that has a stand-alone Residential Unit.

“Acre” or “Acreage” means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded County parcel m ap or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560.

“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.

“Administrative Expenses” means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2023 -1: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2023-1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2023-1 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2023- 1 and any major property owner associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2023 -1 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2023 -1 for any other administrative purposes of CFD No. 2023-1, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.

“Approved Property” means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, (ii) that have an assigned Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) that have not been issued a building permit on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied.

“Assessor’s Parcel” means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.

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“Assessor’s Parcel Map” means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.

“Assessor’s Parcel Number” means that number assigned to an Assessor’s Parcel by the County for purposes of identification.

“Assigned Special Tax” means the Special Tax of that name described in Section D below.

“Backup Special Tax” means the Special Tax of that name described in Section D below.

“Boundary Map” means a recorded map of the CFD which indicates the boundaries of the CFD.

“Building Permit” means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include any subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator as necessary to fairly allocate Special Tax to the Assessor’s Parcel, provided that following such determination the Maximum Special Tax that may be levied in each Fiscal Year on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding CFD No. 2023-1 Bonds plus the estimated annual Administrative Expenses for such Fiscal Year.

“Building Square Footage” or “BSF” means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, as determined by reference to the Building Permit for such Assessor’s Parcel.

“Calendar Year” means the period commencing January 1 of any year and ending the following December 31.

“CFD” or “CFD No. 2023-1” means Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee established by the City under the Act.

“CFD Administrator” means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement, and providing for the levy and collection of the Special Taxes.

“CFD No. 2023-1 Bonds” means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long -term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or indi viduals, or long-term contracts, or any refunding thereof, to which Special Tax of CFD No. 2023-1 have been pledged.

“City” means the City of Menifee.

“City Council” means the City Council of the City of Menifee, acting as the Legislative Body of CFD No. 2023-1.

“Condominium Plan” means a condominium plan as set forth in California Civil Code, Section 4285.

“County” means the County of Riverside.

“Developed Property” means all Assessor’s Parcels: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, (ii) that have an Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) for which a Building Permit for new construction was issued on or before May 1 st preceding the Fiscal Year in which the Special Tax is being levied.

“Exempt Property” means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.

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“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a Condominium Plan pursuant to California Civil Code Section 4285 that creates individual lots for which Building Permits may be issued without further subdivision.

“Fiscal Year” means the period commencing on July 1st of any year and ending the following June 30th.

“Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which CFD No. 2023-1 Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.

“Land Use Category” means any of the categories listed in Table 1 and Table 2 of Section D.

“Maximum Special Tax ” means for each Assessor’s Parcel, the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2023-1 in any Fiscal Year on such Assessor’s Parcel.

“Multifamily Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing a building or buildings comprised of attached Residential Units available for rental by the general public, not for sale to an en d user, and under common management, as determined by the CFD Administrator.

“Non-Residential Property” or “NR” means all Assessor's Parcels for which a building permit(s) was issued or will be issued for a non-residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non-Residential Property.

“Partial Prepayment Amount” means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2.

“Prepayment Amount ” means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.

“Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property, or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property, or Provisional Undeveloped Property, as applicable.

“Provisional Undeveloped Property” means all Assessor’s Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be classified as Exempt Property because to do so would be reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section F.

“Rate and Method of Apportionment ” means this Rate and Method of Apportionment of Special Tax for CFD No. 2023-1.

“Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more Residential Units.

“Residential Unit” or “RU” means a residential unit that is used or intended to be used as a domicile by one or more persons, as determined by the CFD Administrator. An Accessory Dwelling Unit that shares an Assessor’s Parcel with a Single Family Residential Property shall not be considered a Residential Unit for purposes of this Rate and Method of Apportionment.

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“Single Family Residential Property ” means all Assessor’s Parcels of Residential Property other than Multifamily Property.

“Special Tax” or “Special Taxes” means any of the special taxes authorized to be levied within CFD No. 2023- 1 pursuant to the Act to fund the Special Tax Requirement.

“Special Tax Requirement” means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding CFD No. 2023-1 Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to replenish any reserve funds established in association with the CFD No. 2023 -1 Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax delinquencies, (vi) for debt service on CFD No. 2023-1 Bonds anticipated to be issued, and (vii) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2023 -1, provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps Two or Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the CFD No. 2023-1 Bonds pursuant to the Indenture.

“Tax Zone(s)” means the geographical area(s) within CFD No. 2023-1 identified as Tax Zone 1 or Tax Zone 2 as shown on the Boundary Map.

“Tax Zone 1” means all property located within CFD No. 2023-1 and on the Boundary Map as Tax Zone 1.

“Tax Zone 2” means all property located within CFD No. 2023-1 and on the Boundary Map as Tax Zone 2.

“Taxable Property” means all Assessor’s Parcels within CFD No. 2023-1 which are not Exempt Property.

“Taxable Unit” means either a Residential Unit or an Acre.

“Trustee” means the trustee, fiscal agent, or paying agent under the Indenture.

“Undeveloped Property” means all Assessor’s Parcels of Taxable Property which are not Developed Property, Approved Property, or Provisional Undeveloped Property.

B. SPECIAL TAX

Commencing Fiscal Year 2023-2024 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property, up to the applicable Maximum Special Tax, to fund the Special Tax Requirement.

C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX

Each Fiscal Year, beginning with Fiscal Year 2023-2024, each Assessor’s Parcel within CFD No. 2023-1 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Develop ed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property. In addition, each Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property shall be further classified as being within Tax Zone 1 or Tax Zone 2.

Assessor’s Parcels of Developed Property shall further be classified as Residential Property or Non-Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as Single Family Residential Property or Multifamily Property. Each Assessor’s Parcel of Single Family Residential Property shall be further categorized into Land Use Categories based on its Building Square Footage and assigned to its appropriate Assigned Special Tax rate.

In the event that an Assessor’s Parcel for which one or more Building Permits have been issued and the County has not yet assigned final Assessor’s Parcel Number(s) to the Residential Unit(s) (in accordance with the Final Item Title: 12.1
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Map or Condominium Plan) on such Assessor’s Parcel, the amount of the Special Tax levy on such Assessor’s Parcel for each Fiscal Year shall be determined as follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax levy for such Assessor’s Parcel, based on the classification of such Assessor’s Parcel as Undeveloped Property; (2) the amount of the Special Tax levy for the Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Assigned Special Tax rates for Developed Property and shall be taxed as Developed Property in accordance with Step 1 of Section E below; and (3) the amount of the Special Tax levy on the Acreage of Taxable Property in such Assessor’s Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax rate levied on all other Undeveloped Property multiplied by the total of the amount determined in clause (1), less the amount determined in clause (2).

D. MAXIMUM SPECIAL TAX

1. Developed Property

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

The Maximum Special Tax for each Assessor’s Parcel of Non -Residential or Multifamily Residential Property shall be the applicable Assigned Special Tax described in Table 1 or Table 2 of Section D.

a. Assigned Special Tax

Each Fiscal Year, each Assessor’s Parcel of Single Family Residential Property, Multifamily Property or Non-Residential shall be subject to an Assigned Special Tax. The Assigned Special Tax applicable to an Assessor's Parcel of Developed Property shall be determined pursuant to Table 1 or Table 2 below.

TABLE 1

ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 1
(FISCAL YEAR 2023-2024)

Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 1,900 sq. ft $2,595.00

2. Single Family Residential Property RU 1,900 sq. ft to 2,050 sq. ft $2,666.00

3. Single Family Residential Property RU 2,051 sq. ft to 2,200 sq. ft $2,709.00

4. Single Family Residential Property RU Greater than 2,200 sq. ft $2,752.00

5. Multifamily Property Acre N/A $35,565.00

6. Non-Residential Property Acre N/A $35,565.00

On each July 1, commencing July 1, 2024, the Assigned Special Tax rate for Developed Property in Tax Zone 1 shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

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TABLE 2

ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 2
(FISCAL YEAR 2023-2024)

Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 1,900 sq. ft $2,743.00

2. Single Family Residential Property RU 1,900 sq. ft to 2,100 sq. ft $2,920.00

3. Single Family Residential Property RU 2,101 sq. ft to 2,300 sq. ft $3,008.00

4. Single Family Residential Property RU 2,301 sq. ft to 2,500 sq. ft $3,095.00

5. Single Family Residential Property RU 2,501 sq. ft to 2,700 sq. ft $3,196.00

6. Single Family Residential Property RU 2,701 sq. ft to 2,900 sq. ft $3,403.00

7. Single Family Residential Property RU 2,901 sq. ft to 3,100 sq. ft $3,559.00

8. Single Family Residential Property RU 3,101 sq. ft to 3,300 sq. ft $3,714.00

9. Single Family Residential Property RU 3,301 sq. ft to 3,500 sq. ft $3,977.00

10. Single Family Residential Property RU 3,501 sq. ft to 3,700 sq. ft $4,241.00

11. Single Family Residential Property RU 3,701 sq. ft to 3,900 sq. ft $4,504.00

12. Single Family Residential Property RU Greater than 3,900 sq. ft $4,767.00

13. Multifamily Property Acre N/A $25,600.00

14. Non-Residential Property Acre N/A $25,600.00

On each July 1, commencing July 1, 2024, the Assigned Special Tax rate for Developed Property in Tax Zone 2 shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

b. Multiple Land Use Categories

In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for all Land Use Categories located on the Assessor’s Parcel. The C FD Administrator’s allocation to each type of property shall be final.

c. Backup Special Tax
When a Final Map is recorded, the Administrator shall determine which Tax Zone the Final Map area lies within and the Backup Special Tax for an Assessor’s Parcel within the Final Map classified or to be classified as Single Family Property shall calculated according to the following formula.

B = (U x A) / L

The terms above have the following meanings:

B = Backup Special Tax per Assessor’s Parcel within the Final Map

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

A = Acreage of Single Family Residential Property expected to exist in such Final Map at the time of calculation, as determined by the Administrator

L = Number of Residential Units expected to exist in such Final Map at the time of calculation, as determined by the Administrator.

Item Title: 12.1
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In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all Assessor’s Parcels within such changed or modified area shall be determined by Table 3 below:

TABLE 3

MAXIMUM SPECIAL TAX PER ACRE
(FISCAL YEAR 2023-2024)

Tax Zone
Maximum Special
Tax per Acre
1 $35,565
2 $25,600

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

On each July 1, commencing July 1, 2024, the Backup Special Tax rate shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

2. Approved Property

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

The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Multifamily Residential Property or Non-Residential Property shall be $35,565 per Acre for Tax Zone 1 and $25,600 per Acre for Tax Zone 2.

On each July 1, commencing July 1, 2024, the Maximum Special Tax rate for Approved Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

3. Undeveloped Property and Provisional Undeveloped Property that is not Exempt Property pursuant to the provisions of Section F

The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property and Provisional Undeveloped Property that is not Exempt Property shall be equal to the product of $35,565 per Acre for Tax Zone 1 and $25,600 per Acre for Tax Zone 2, in each case m ultiplied by the Acreage of such Assessor’s Parcel.

On each July 1, commencing July 1, 2024, the Maximum Special Tax rate for Undeveloped Property and Provisional Undeveloped Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX

Commencing Fiscal Year 2023-2024 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property in accordance with the following steps:

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

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

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

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

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

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

F. EXEMPTIONS

The City shall classify as Exempt Property, in the following order of priority, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the total Acreage of all Taxable Property to less than the amounts shown in Table 4 below.

TABLE 4

MINIMUM TAXABLE ACRES

Tax Zone Acres
1 7.26
2 28.52

Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the total Acreage of all Taxable Property to less than the Acres shown in Table 4 per Tax Zone. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than the Acres shown in Table 4 per Tax Zone will be classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to Step Five in Section E.

G. PREPAYMENT OF SPECIAL TAX
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The following additional definitions apply to this Section G:
“CFD Public Facilities” means $19,500,000 expressed in 2023 dollars, which shall increase by the Construction Inflation Index on July 1, 2024, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2023 - 1, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more CFD No. 2023-1 Bonds to be supported by Special Tax levied under this Rate and Method of Apportionment.

“Construction Fund” means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are currently available for expenditure to acquire or construct public facilities eligible to be financed by CFD No. 2023-1.

“Construction Inflation Index” means the annual percentage change in the Engineering News-Record Building Cost Index for the City of Los Angeles, measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles.

“Future Facilities Costs ” means the CFD Public Facilities minus (i) public facility costs previously funded from the Construction Fund, (ii) public facility costs available to be funded through existing construction or escrow accounts funded by the Outstanding Bonds, and minus (ii i) public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment.

“Outstanding Bonds” means all previously issued CFD No. 2023 -1 Bonds issued and secured by the levy of Special Tax which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding CFD No. 2023-1 Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Tax.

1. Prepayment in Full
The Maximum Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor’s Parcels of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has been issued, (iii) Approved P roperty or Undeveloped Property for which a Building Permit has not been issued and (iv) Assessor’s Parcels of Public Property or Property Owner’s Association Property, or Provisional Undeveloped Property that are not Exempt Property pursuant to Section F. The Maximum Special Tax obligation applicable to an Assessor’s Parcel may be fully prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment.

An owner of an Assessor’s Parcel intending to prepay the Maximum Special Tax obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non -refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel. Within 15 days of receipt of such non -refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel. Prepayment must be made not less than 60 days prior to the redemption date for any Outstanding Bonds to be redeemed with the proceeds of such prepaid Special Taxes.

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

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Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount

The Prepayment Amount shall be determined as of the proposed prepayment date as follows:

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

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

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

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

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

6. Determine the Future Facilities Costs.

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

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

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

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

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

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

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

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

15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by CFD No. 2023-1.

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

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

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

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

2. Prepayment in Part

The Maximum Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property or Undeveloped Property may be partially prepaid. For purposes of determining the partial prepayment amount, the provisions of Section G.1 shall be modified as provided by the following formula:

PP = ((PE – A) x F) + A
These terms have the following meaning:

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

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

H. TERMINATION OF SPECIAL TAX

For each Fiscal Year that any CFD No. 2023 -1 Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2065-2066 Fiscal Year, however, Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2023 -1 Bonds have been paid; (ii) all authorized facilities of CFD No. 2023-1 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Taxes remain uncollected and (iv) all other obligations of CFD No. 2023-1 have been satisfied.

I. MANNER OF COLLECTION

The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2023 -1 may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.

J. APPEALS OF SPECIAL TAXES

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

The CFD Administrator shall interpret this Rate and Method of Apportionment and make determinations relative to the annual levy and administration of the Special Taxes and any taxpayer who appeals, as herein specified.

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APPENDIX B

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

General
The City of Menifee is located approximately 80 miles southeast of Los Angeles in the southwestern portion of Riverside County. The City was incorporated on October 1, 2008, as a general law City. As of January 1, 2023, the City has slightly more than 110,000 residents and covers an area of over 46 square miles.

Population
The following table offers population figures for the City, the County and the State for 2019 through 2023.

Area 2019 2020 2021 2022 2023
City of Menifee 94,710 102,466 104,323 107,411 110,034
County of Riverside 2,419,057 2,418,185 2,418,727 2,430,976 2,439,234 State of California 39,605,361 39,538,223 39,286,510 39,078,674 39,940,231

Source: California State Department of Finance, Demographic Research Unit. 2010 Census Benchmark for 2019 and 2020 Census Benchmark for 2020 through 2023.

Building Activity
The following tables provide summaries of the building permit valuations and the number of new dwelling units authorized in the City and County from 2018 through 2022.

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

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

Single family 967 922 1,457 1,256 796
Multiple family 0 330 0 0 0
Total 967 1,252 1,457 1,256 796

* Totals may not add to sums because of rounding.

Source: Construction Industry Research Board.

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

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

* Totals may not add to sums because of rounding.

Source: Construction Industry Research Board.

Employment
The following tables show the largest employers located in the City and County as of June 30, 2023.

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

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

2. Menifee Union School District 1,467 School District

3. Romoland Elementary School District 602 School District

4. Stater Brothers 348 Supermarkets

5. City of Menifee 333 City Government

6. Menifee Global Medical Center 327 Medical Center

7. Target Corporation 312 Retail Stores

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

9. Southern California Edison 187 Community Services

10. Texas Roadhouse 173 Casual Dining

Source: City of Menifee Comprehensive Annual Financial Report for the year ending June 30, 2023.

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

1. County of Riverside 25,366 County Government

2. Amazon 14,317 Online Retailer

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

4. Nestle UA 8,874 Food and Beverage Company

5. University of California, Riverside 8,623 University

6. State of California 8,383 State Government

7. Wal-Mart 7,494 Supermarket

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

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

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

Source: County of Riverside Comprehensive Annual Financial Report for the year ending June 30, 2023.

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

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The following table represents the Annual Average Labor Force and Industry Employment for the period from 2019 through 2023.

RIVERSIDE-SAN BERNARDINO-ONTARIO MSA

INDUSTRY EMPLOYMENT & LABOR FORCE - BY ANNUAL AVERAGE
2019 2020 2021 2022 2023
Civilian Labor Force 2,071,600 2,091,700 2,120,600 2,148,700 2,171,500 Civilian Employment 1,987,500 1,885,400 1,964,300 2,058,400 2,068,800 Civilian Unemployment 84,000 206,200 156,300 90,200 102,700 Civilian Unemployment Rate 4.1% 9.9% 7.4% 4.2% 4.7%

Total Farm 15,400 14,100 13,700 13,800 13,100
Total Nonfarm 1,552,700 1,495,800 1,575,100 1,659,800 1,679,800 Total Private 1,291,500 1,247,800 1,333,100 1,409,800 1,418,900 Goods Producing 209,700 202,200 207,700 216,300 216,100 Mining and Logging 1,200 1,300 1,400 1,500 1,500
Construction 107,200 104,900 110,100 114,700 115,700
Manufacturing 101,300 96,000 96,100 100,000 98,900
Service Providing 1,343,000 1,293,700 1,367,400 1,443,500 1,463,700 Trade, Transportation and Utilities 395,100 406,900 443,200 464,900 456,500 Wholesale Trade 67,700 65,600 67,400 69,500 68,700
Retail Trade 180,700 168,800 177,000 181,000 182,700
Transportation, Warehousing and Utilities 146,600 172,500 198,800 214,400 205,100 Information 14,100 12,400 12,500 13,000 13,300
Financial Activities 45,000 44,100 45,200 46,000 44,900 Professional and Business Services 155,300 152,100 166,600 173,900 164,800 Educational and Health Services 250,300 248,800 254,300 267,500 287,500 Leisure and Hospitality 175,900 141,300 160,200 180,900 186,500 Other Services 46,200 40,200 43,600 47,400 49,300
Government 261,200 248,000 242,000 250,000 260,900 Total, All Industries 1,568,100 1,509,900 1,588,800 1,673,500 1,692,900

Note: Does not include proprietors, self-employed, unpaid volunteers or family workers, domestic workers in households and persons involved in labor -management trade disputes. Employment reported by place of work. Items may not add to total due to independent rounding. The “Total, All Industries” data is not directly comparable to the employment data found in this Appendix B.

Source: State of California, Employment Development Department, March 2022 Benchmark.

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The following table summarizes the labor force, employment and unemployment figures for the period from 2018 through 2022 for the City, the County, the State and the nation as a whole.

CITY OF MENIFEE,

COUNTY OF RIVERSIDE,

STATE OF CALIFORNIA AND UNITED STATES
Average Annual Civilian Labor Force, Employment and Unemployment Year and Area Labor Force Employment(1) Unemployment(2) Unemployment
Rate (%)(3)
2018
City of Menifee 39,100 37,400 1,700 4.3%
County of Riverside 1,091,400 1,042,700 48,700 4.5
State of California 19,263,900 18,442,400 821,500 4.3
United States 162,075,000 155,761,000 6,314,000 3.9

2019
City of Menifee 39,600 38,000 1,600 4.0%
County of Riverside 1,104,000 1,057,900 46,100 4.2
State of California 19,353,700 18,550,500 803,200 4.2
United States 163,539,000 157,538,000 6,001,000 3.7

2020
City of Menifee 41,800 37,600 4,200 10.1%
County of Riverside 1,121,100 1,008,000 113,000 10.1
State of California 18,971,600 17,047,600 1,924,000 10.1 United States 160,757,000 149,961,000 10,795,000 6.7

2021
City of Menifee 42,300 39,100 3,200 7.5%
County of Riverside 1,133,000 1,050,000 83,000 7.3
State of California 18,973,400 17,586,300 1,387,100 7.3 United States 162,410,000 156,081,000 6,329,000 3.9

2022
City of Menifee 43,000 41,200 1,800 4.2%
County of Riverside 1,152,100 1,104,100 48,000 4.1
State of California 19,252,000 18,440,900 811,000 4.2
United States 164,966,000 159,244,000 5,722,000 3.5

Note: Data is not seasonally adjusted.
(1) Annual averages, unless otherwise specified.
(2) Includes persons involved in labor-management trade disputes. (3) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures in this table.

Source: U.S. Department of Labor – Bureau of Labor Statistics, California Employment Development Department. 2022 Benchmark.

Personal Income
Personal Income is the income that is received by all persons from all sources. It is calculated as the sum of wage and salary disbursements, supplements to wages and salaries, proprietors’ income with inventory valuation and capital consumption adjustments, rental income of persons with capital consumption adjustment, personal dividend income, personal interest income, and personal current transfer receipts, less contributions for government social insurance.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 85

Menifee Mayor and City Council
November 6, 2024
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The personal income of an area is the income that is received by, or on behalf of, all the individuals who live in the area; therefore, the estimates of personal income are presented by the place of residence of the income recipients.

Total personal income in the County increased by 31.14% between 2018 and 2022. The following tables summarize personal income for the County for 2018 through 2022.

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

Source: U.S. Department of Commerce, Bureau of Economic Analysis.

The following table summarizes per capita personal income for the County, California and the United States for 2018-2022. This measure of income is calculated as the personal income of the residents of the area divided by the resident population of the area.

PER CAPITA PERSONAL INCOME
Riverside County, State of California and the United States 2018-2022
Year Riverside County California United States
2018 $40,582 $60,984 $53,309
2019 43,073 64,174 55,547
2020 48,265 70,061 59,151
2021 51,468 76,991 64,427
2022 51,415 77,036 65,473

Source: U.S. Department of Commerce, Bureau of Economic Analysis..

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 86

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November 6, 2024
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Taxable Sales
The table below presents taxable sales for the years 2018 through 2022 for the City.

TAXABLE SALES
City of Menifee
2018-2022
(Dollars in Thousands)
Year Permits Taxable Transactions
2018 1,484 $742,128
2019 1,568 776,545
2020 1,726 752,610
2021 1,756 974,142
2022 1,915 1,071,002

Source: Taxable Sales in California, California Department of Tax and Fee Administration for 2018-2022.

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

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

Source: Taxable Sales in California, California Department of Tax and Fee Administration for 2018-2022.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 87

Menifee Mayor and City Council
November 6, 2024
Page
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APPENDIX C

FORM OF OPINION OF BOND COUNSEL
Upon issuance of the Bonds, Stradling Yocca Carlson & Rauth LLP, Bond Counsel, proposes to render its final approving opinion in substantially the following form:
[Closing Date]
City of Menifee
Community Facilities District No. 2023-1 (Rockport Ranch) Menifee, California
Re: $__________ Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee Special Tax Bonds, Series 2024
Ladies and Gentlemen:

We have examined the Constitution and the laws of the State of California, a certified record of the proceedings of the City of Menifee (the “City”) taken in connection with the formation of Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee (the “District”) and the authorization and issuance of the District’s Special Tax Bonds, Series 202 4 in the aggregate principal amount of $ __________ (the “Bonds”) and such other information and documents as we consider necessary to render this opinion. In rendering this opinion, we have relied upon certain representations of fact and certifications made by the District, the City, the initial purchasers of the Bonds and others. We have not undertaken to verify through independent investigation the accuracy of the representations and certifications relied upon by us.

The Bonds have been issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (comprising Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California), a resolution adopted by the City Council of th e City, acting in its capacity as the legislative body of the District (the “City Council”) on November 6, 2024 (the “Resolution”), and a Bond Indenture (the “Indenture”) dated as of December 1, 2024, by and between the District and Wilmington Trust, Natio nal Association, as trustee (the “Trustee”). All capitalized terms not defined herein shall have the meaning set forth in the Indenture.

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

The Bonds are limited obligations of the D istrict but are not a debt of the City, the State of California or any other political subdivision thereof within the meaning of any constitutional or statutory limitation, and, except for the Net Taxes, neither the faith and credit nor the taxing power of the City, the State of California, or any of its political subdivisions is pledged for the payment thereof. (2) The Indenture has been duly executed and delivered by the District. The Indenture creates a valid pledge of, and the Bonds are secured by, the Net Taxes and the amounts on deposit in certain funds and accounts established under the Indenture, as and t o the extent provided in the Indenture. The Indenture is enforceable in accordance with its terms; provided, however, we express no opinion as to the enforceability of the covenant of the District contained in the Indenture to levy Special Taxes for the payment of Administrative Expenses or as to indemnification, penalty, contribution, choice of law, choice of forum or waiver provisions contained therein.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 88

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(3) Under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals; however, it should be noted that, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed on such corporations.
(4) Interest (and original issue discount) on the Bonds is exempt from State of California personal income tax.
(5) The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity are to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Bond Owner will increase the Bond Owner’s basis in the applicable Bond.
(6) The amount by which a Bond Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Bond premium which must be amortized under Section 171 of the Code; such amortizable Bond premium reduces the Bond Owner’s basis in the applicable Bond (and the amount of tax - exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in a Bond Owner realizing a taxable gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Owner.

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

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

Our opinion is limited to matters governed by the laws of the State of California and federal law. We assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction. We call attention to the fact that the r ights and obligations under the Bonds, the Indenture and the Tax Certificate may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, by the application of equitable principles and the exercise of judicial discretion in appropriate cases and by the limitations on legal remedies against public agencies in the State of California.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 89

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November 6, 2024
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We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds and expressly disclaim any duty to advise the Owners of the Bonds with respect to matters contained in the Official Statement or other offering material.

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

Respectfully submitted,

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 90

Menifee Mayor and City Council
November 6, 2024
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APPENDIX D

APPRAISAL REPORT

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 91

Menifee Mayor and City Council
November 6, 2024
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APPENDIX E

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

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

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 92

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November 6, 2024
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APPENDIX F

FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 93

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November 6, 2024
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APPENDIX G

FORM OF LENNAR CONTINUING DISCLOSURE CERTIFICATE

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 94

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November 6, 2024
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APPENDIX H

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

The Depository Trust Company ( “DTC”), New York, NY, will act as securities depository for the Bonds.

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

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

DTC holds and provides asset servicing for over 3.5 million issues of U .S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants ( “Direct Participants”) deposit with DTC. DTC also facilitates the post trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates.

Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( “Indirect Participants”). DTC has a Standard & Poor’s rating of “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

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

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bond s with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 95

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November 6, 2024
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Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

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

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

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

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

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

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

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

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

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

BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE

VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 96

Menifee Mayor and City Council
November 6, 2024
Page
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Stradling Yocca Carlson & Rauth
Draft of 10/08/2024
4885-4283-6967/200299-0015

BOND INDENTURE
Between
COMMUNITY FACILITIES DISTRICT NO. 2023-1
(ROCKPORT RANCH) OF THE CITY OF MENIFEE
and

WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
Relating to
$______
COMMUNITY FACILITIES DISTRICT NO. 2023-1
(ROCKPORT RANCH) OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2024
Dated as of December 1, 2024
Item Title: 12.1
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November 6, 2024
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Table of Contents
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ARTICLE I

DEFINITIONS
Section 1.1. Definitions ..................................................................................................................... 1

ARTICLE II

GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds and Parity Bonds........................... 10 Section 2.2. Type and Nature of Bonds and Parity Bonds .............................................................. 10 Section 2.3. Equality of Bonds and Parity Bonds and Pledge of Net Taxes ................................... 11 Section 2.4. Description of Bonds; Interest Rates ........................................................................... 11 Section 2.5. Place and Form of Payment......................................................................................... 12 Section 2.6. Form of Bonds and Parity Bonds ................................................................................ 13 Section 2.7. Execution and Authentication ..................................................................................... 13 Section 2.8. Bond Register .............................................................................................................. 13 Section 2.9. Registration of Exchange or Transfer.......................................................................... 14 Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds ..................................... 14 Section 2.11. Validity of Bonds and Parity Bonds ............................................................................ 15 Section 2.12. Book-Entry System...................................................................................................... 15 Section 2.13. Representation Letter................................................................................................... 16 Section 2.14. Transfers Outside Book-Entry System ........................................................................ 16 Section 2.15. Payments to the Nominee ............................................................................................ 16 Section 2.16. Initial Depository and Nominee .................................................................................. 16

ARTICLE III

CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds................................................................ 16 Section 3.2. Deposits to and Disbursements from Special Tax Fund.............................................. 17 Section 3.3. Administrative Expense Account of the Special Tax Fund......................................... 18 Section 3.4. Interest Account and Principal Account of the Special Tax Fund .............................. 18 Section 3.5. Redemption Account of the Special Tax Fund............................................................ 19 Section 3.6. Reserve Account of the Special Tax Fund .................................................................. 20 Section 3.7. Rebate Fund................................................................................................................. 21 Section 3.8. Surplus Fund................................................................................................................ 24 Section 3.9. Acquisition and Construction Fund............................................................................. 24 Section 3.10. Investments.................................................................................................................. 25

ARTICLE IV

REDEMPTION OF BONDS AND PARITY BONDS
Section 4.1. Redemption of Bonds .................................................................................................. 27 Item Title: 12.1
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Table of Contents
(continued)
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Section 4.2. Selection of Bonds and Parity Bonds for Redemption ................................................ 30 Section 4.3. Notice of Redemption.................................................................................................. 30 Section 4.4. Partial Redemption of Bonds or Parity Bonds............................................................. 32 Section 4.5. Effect of Notice and Availability of Redemption Money ........................................... 32

ARTICLE V

COVENANTS AND WARRANTY
Section 5.1. Warranty ...................................................................................................................... 32 Section 5.2. Covenants .................................................................................................................... 32

ARTICLE VI

AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Owner Consent ........................... 36 Section 6.2. Supplemental Indentures or Orders Requiring Owner Consent .................................. 37 Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or Parity Bonds ...........................................................................................................................38

ARTICLE VII

TRUSTEE
Section 7.1. Trustee ......................................................................................................................... 38 Section 7.2. Removal of Trustee ..................................................................................................... 39 Section 7.3. Resignation of Trustee................................................................................................. 39 Section 7.4. Liability of Trustee ...................................................................................................... 39 Section 7.5. Merger or Consolidation.............................................................................................. 43

ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default ......................................................................................................... 44 Section 8.2. Remedies of Owners.................................................................................................... 44 Section 8.3. Application of Revenues and Other Funds After Default ........................................... 45 Section 8.4. Power of Trustee to Control Proceedings.................................................................... 45 Section 8.5. Appointment of Receivers ........................................................................................... 46 Section 8.6. Non-Waiver ................................................................................................................. 46 Section 8.7. Limitations on Rights and Remedies of Owners ......................................................... 46 Section 8.8. Termination of Proceedings......................................................................................... 47 Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 99

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November 6, 2024
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Table of Contents
(continued)
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ARTICLE IX

DEFEASANCE AND PARITY BONDS
Section 9.1. Defeasance................................................................................................................... 47 Section 9.2. Conditions for the Issuance of Parity Bonds and Other Additional Indebtedness ................................................................................................................48

ARTICLE X

MISCELLANEOUS
Section 10.1. Cancellation of Bonds and Parity Bonds..................................................................... 50 Section 10.2. Execution of Documents and Proof of Ownership...................................................... 50 Section 10.3. Unclaimed Moneys...................................................................................................... 51 Section 10.4. Provisions Constitute Contract; Governing Law; Venue ............................................ 51 Section 10.5. Future Contracts .......................................................................................................... 52 Section 10.6. Further Assurances ...................................................................................................... 52 Section 10.7. Entire Agreement; Severability ................................................................................... 52 Section 10.8. Notices ......................................................................................................................... 52 Signatures ....................................................................................................................................S-1 EXHIBIT A FORM OF SPECIAL TAX BOND...........................................................................A-1 EXHIBIT B REQUISITION FOR DISBURSEMENT OF PROJECT COSTS ............................B-1 Item Title: 12.1
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November 6, 2024
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4885-4283-6967/200299-0015

BOND INDENTURE
THIS BOND INDENTURE dated as of December 1, 2024, by and between COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH) OF THE CITY OF MENIFEE (the “District”) and WILMINGTON TRUST, NATIONAL ASSOCIATION, as trustee (the “Trustee”), governs the terms of the Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee Special Tax Bonds, Series 2024 and any Parity Bonds issued in accordance herewith from time to time.

RECITALS :

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

B. Based upon Resolution Nos. 23-1327 and 23-1328 adopted by the City Council on June 7, 2023 and an election held on June 7, 2023, authorizing the levy of a special tax and the issuance of bonds, the District is authorized to issue bonds in one or more series pursuant to the Act, in an aggregate principal amount not to exceed $23,000,000.

C. The District intends to finance various Project Costs (as defined herein) through the issuance of bonds in an aggregate principal amount of $______ designated as the “Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee Special Tax Bonds, Series 2024” (the “Bonds”); and
D. The District has determined that all requirements of the Act for the issuance of the Bonds have been satisfied.

NOW, THEREFORE, in order to establish the terms and conditions upon and subject to which the Bonds are to be issued, and in consideration of the premises and of the mutual covenants contained herein and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable consideration, the receipt of which is hereby acknowledged, the District does hereby covenant and agree, for the benefit of the Owners of the Bonds and any Parity Bonds (as defined herein) which may be issued hereunder from time to time, as follows:

ARTICLE I

DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings:

Account. The term “Account” means any account created pursuant to this Indenture.

Act. The term “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Section 53311 et seq. of the California Government Code.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 101

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Acquisition and Construction Fund. The term “Acquisition and Construction Fund” means the fund by that name established pursuant to Section 3.1 hereof.

Administrative Expense Account. The term “Administrative Expense Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.

Administrative Expenses. The term “Administrative Expenses” means the administrative costs with respect to the calculation and collection of the Special Taxes, including all attorneys’ fees and other costs related thereto, the fees and expenses of the Trustee, any fees and related costs for credit enhancement for the Bonds or any Parity Bonds that are not otherwise paid as Costs of Issuance, any costs related to the District’s compliance with state and federal laws requiring continuing disclosure of information concerning the Bonds and the District, and any other costs otherwise incurred by City staff on behalf of the District in order to carry out the purposes of the District as set forth in the Resolution of Formation and any obligation of the District hereunder.

Administrative Expenses Cap. The term “Administrative Expenses Cap” means $30,000, which amount shall escalate at 2.00% per Fiscal Year, commencing July 1, 2025.

Alternate Penalty Account. The term “Alternate Penalty Account” means the account by that name created and established in the Rebate Fund pursuant to Section 3.1 hereof.

Annual Debt Service. The term “Annual Debt Service” means the principal amount of any Outstanding Bonds or Parity Bonds payable in a Bond Year either at maturity or pursuant to a Sinking Fund Payment and any interest payable on any Outstanding Bonds or Parity Bonds in such Bond Year, if the Bonds and any Parity Bonds are retired as scheduled.

Authorized Investments. The term “Authorized Investments” means any of the following, which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein:
(1) For all purposes, including defeasance investments in refunding escrow accounts:
(a) cash; or
(b) obligations of, or obligations guaranteed as to principal and interest by, the U.S. or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the U.S., including U.S. treasury obligations, all direct or fully guaranteed obligations, Farmers Home Administration, General Services Administration, guaranteed Title XI financing, Government National Mortgage Association (GNMA) and State and Local Government Series; or (c) obligations of government-sponsored agencies that are not backed by the full faith and credit of the U.S. Government: Federal Home Loan Mortgage Corporation (FHLMC) debt obligations, Farm Credit System (formerly: Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives), Federal Home Loan Banks (FHL Banks), Federal National Mortgage Association (FNMA) debt obligations, Financing Corp. (FICO) debt obligations, Resolution Funding Corp. (REFCORP) debt obligations and U.S. Agency for International Development (U.S.A.I.D.) guaranteed notes.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 102

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(2) For all purposes other than defeasance investments in refunding escrow accounts:
(a) obligations of any of the following federal agencies, which obligations represent the full faith and credit of the United States of America: Export-Import Bank, Rural Economic Community Development Administration, U.S. Maritime Administration, Small Business Administration, U.S. Department of Housing & Urban Development (PHAs), Federal Housing Administration and Federal Financing Bank;
(b) direct obligations of any of the following federal agencies, which obligations are not fully guaranteed by the full faith and credit of the United States of America: senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC), obligations of the Resolution Funding Corporation (REFCORP) and senior debt obligations of the Federal Home Loan Bank System; (c) U.S. dollar denominated deposit accounts, federal funds and bankers’ acceptances with domestic commercial banks (including those of the Trustee and its affiliates) which have a rating on their short-term certificates of deposit on the date of purchase of “A-1” or “A-1+” by S&P and “P-1” by Moody’s and maturing no more than 360 days after the date of purchase (ratings on holding companies are not considered as the rating of the bank); (d) commercial paper which is rated at the time of purchase in the single highest classification “A-1+” by S&P and “P-1” by Moody’s and which matures not more than 270 days after the date of purchase;
(e) investments in a money market fund rated “AAm,” “AAm-G” or better by S&P, including funds for which the Trustee or its affiliates provide investment advisory or other management services;
(f) pre-refunded municipal obligations defined as follows: any bonds or other obligations of any state of the United States of America, or any agency, instrumentality or local governmental unit of any such state, which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice, and
(i) which are rated, based on irrevocable escrow account or fund (the “escrow”), in the highest rating category of S&P and Moody’s or any successors thereto; or (ii) (1) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (1)(b) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate; and (2) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate;
(g) municipal obligations rated “Aaa/AAA” or general obligations of states with a rating of at least “Aa2/AA” or higher by both Moody’s and S&P; Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 103

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(h) Investment Agreements (supported by appropriate opinions of counsel); and (i) the Local Agency Investment Fund of the State, created pursuant to Section 16429.1 of the California Government Code, to the extent the Trustee is authorized to register such investment in its name.

The value of the above investments shall be determined as follows:
(a) for the purpose of determining the amount in any fund, all Authorized Investments credited to such fund shall be valued at market value. The Trustee shall determine the market value based on accepted industry standards, including the Trustee’s internal systems, and from accepted industry providers. Accepted industry providers shall include, but are not limited to, pricing services provided by Financial Times Interactive Data Corporation, Bank of America Merrill Lynch or Salomon Smith Barney. Notwithstanding anything to the contrary herein, in making any valuation of investments hereunder, the Trustee may utilize computerized securities pricing services that may be available to it, including those available through its regular accounting system, and rely thereon; (b) as to certificates of deposit and bankers acceptances: the face amount thereof, plus accrued interest thereon; and
(c) as to any investment not specified above: the value thereof established by prior agreement between the City and the Trustee.

Authorized Representative of the District. The term “Authorized Representative of the District” means the Mayor, City Manager, Assistant City Manager, Chief Financial Officer or City Clerk of the City, or any other officer or employee authorized by the City Council of the City or by an Authorized Representative of the District to undertake the action referenced in this Indenture as required to be undertaken by an Authorized Representative of the District.

Bond Counsel. The term “Bond Counsel” means Stradling Yocca Carlson & Rauth LLP, or another attorney at law or a firm of attorneys selected by the District of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia.

Bond Register. The term “Bond Register” means the books that the Trustee shall keep or cause to be kept on which the registration and transfer of the Bonds and any Parity Bonds shall be recorded.

Bonds. The term “Bonds” means the District’s Special Tax Bonds, Series 2024 issued on _____, 2024, in the aggregate principal amount of $______.

Bond Year. The term “Bond Year” means the 12-month period commencing on September 2 of each year and ending on September 1 of the following year, except that the first Bond Year for the Bonds or an issue of Parity Bonds shall begin on the Delivery Date and end on the first September 1 that is not more than 12 months after the Delivery Date.

Business Day. The term “Business Day” means a day that is not a Saturday or Sunday or a day of the year on which banks or trust companies in New York, New York; Los Angeles, California; or the city where the corporate trust office of the Trustee is located, are not required or authorized by law, regulation or executive order, to close or to remain closed.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 104

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Certificate of an Authorized Representative. The term “Certificate of an Authorized Representative” means a written certificate or warrant request executed by an Authorized Representative of the District.

City. The term “City” means the City of Menifee, County of Riverside, State of California.

City Council. The term “City Council” means the City Council of the City.

City Facilities Account. The term “City Facilities Account” means the account by that name created and established in the Acquisition and Construction Fund pursuant to Section 3.1 hereof.

Code. The term “Code” means the Internal Revenue Code of 1986, as amended, and any Regulations, rulings, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it.

Continuing Disclosure Certificate. The term “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate dated as of December 1, 2024, as originally executed by the District and as it may be from time to time amended or supplemented in accordance with its terms.

Costs of Issuance. The term “Costs of Issuance” means the costs and expenses incurred in connection with the formation of the District and the issuance and sale of the Bonds or any Parity Bonds, including the acceptance and initial annual fees and expenses of the Trustee and its counsel, legal fees and expenses, costs of printing the Bonds and Parity Bonds and the preliminary and final official statements for the Bonds and Parity Bonds, fees of financial consultants, costs of the appraisal and all other related fees and expenses, including reimbursement to property owners within the District for design, engineering and legal costs, as set forth in a Certificate of an Authorized Representative of the District.

Costs of Issuance Account. The term “Costs of Issuance Account” means the account by that name created and established in the Acquisition and Construction Fund pursuant to Section 3.1 hereof.

Delivery Date. The term “Delivery Date” means, with respect to the Bonds and each issue of Parity Bonds, the date on which the bonds of such issue were issued and delivered to the initial purchasers thereof.

Depository. The term “Depository” means The Depository Trust Company, New York, New York, and its successors and assigns as securities depository for the Bonds, or any other securities depository acting as Depository under Article II hereof.

District. The term “District” means Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee established pursuant to the Act and Resolution No. 23-1327 adopted by the City Council of the City on June 7, 2023.

Event of Default. The term “Event of Default” means an event described in Section 8.1 hereof.

Fiscal Year. The term “Fiscal Year” means the period beginning on July 1 of each year and ending on the following June 30.

Gross Taxes. The term “Gross Taxes” means the amount of all Special Taxes received by the District together with the proceeds collected from the sale of property pursuant to foreclosure for the Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 105

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delinquency of such Special Taxes remaining after the payment of all costs related to such foreclosure actions.

Indenture. The term “Indenture” means this Bond Indenture, together with any Supplemental Indenture approved pursuant to Article VI hereof.

Independent Financial Consultant. The term “Independent Financial Consultant” means a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field, appointed and paid by the District, who, or each of whom: (1) is in fact independent and not under the domination of the District or the City; (2) does not have any substantial interest, direct or indirect, in the District or the City; and (3) is not connected with the District or the City as a member, officer or employee of the District or the City, but who may be regularly retained to make annual or other reports to the District or the City.

Interest Account. The term “Interest Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.

Interest Payment Date. The term “Interest Payment Date” means March 1, 2025, and each March 1 and September 1 thereafter; provided, however, that, if any such day is not a Business Day, interest up to the Interest Payment Date will be paid on the Business Day next succeeding such date.

Investment Agreement. The term “Investment Agreement” means one or more agreements for the investment of funds of the District complying with the criteria therefor as set forth in subsection (2)(h) of the definition of Authorized Investments herein.

Maximum Annual Debt Service. The term “Maximum Annual Debt Service” means the maximum sum obtained for any Bond Year prior to the final maturity of the Bonds and any Parity Bonds by adding the following for each Bond Year: (1) the principal amount of all Outstanding Bonds and Parity Bonds payable in such Bond Year either at maturity or pursuant to a Sinking Fund Payment; and (2) the interest payable on the aggregate principal amount of all Bonds and Parity Bonds Outstanding in such Bond Year if the Bonds and Parity Bonds are retired as scheduled.

Moody’s. The term “Moody’s” means Moody’s Investors Service, Inc., its successors and assigns.

Net Taxes. The term “Net Taxes” means Gross Taxes minus amounts set aside to pay Administrative Expenses.

Nominee. The term “Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.16 hereof.

Ordinance. The term “Ordinance” means Ordinance No. 2023-373 adopted by the City Council on June 21, 2023, providing for the levying of the Special Tax.

Outstanding. The terms “Outstanding” or “Outstanding Bonds and Parity Bonds” means all Bonds and Parity Bonds theretofore issued by the District, except: (i) Bonds and Parity Bonds theretofore cancelled or surrendered for cancellation in accordance with Section 10.1 hereof; (ii) Bonds and Parity Bonds for payment or redemption of which monies shall have been theretofore deposited in trust (whether upon or prior to the maturity or the redemption date of such Bonds or Parity Bonds), provided that, if such Bonds or Parity Bonds are to be redeemed prior to the maturity thereof, notice Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 106

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of such redemption shall have been given as provided in this Indenture or any applicable Supplemental Indenture for Parity Bonds; and (iii) Bonds and Parity Bonds that have been surrendered to the Trustee for transfer or exchange pursuant to Section 2.9 hereof or for which a replacement has been issued pursuant to Section 2.10 hereof.

Owner. The term “Owner” means the person or persons in whose name or names any Bond or Parity Bond is registered.

Parity Bonds. The term “Parity Bonds” means all bonds, notes or other similar evidences of indebtedness hereafter issued, payable out of the Net Taxes and which, as provided in this Indenture or any Supplemental Indenture, rank on a parity with the Bonds.

Participants. The term “Participants” means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Bonds or Parity Bonds as securities depository.

Person. The term “Person” means natural persons, firms, corporations, partnerships, associations, trusts, public bodies and other entities.

Prepayments. The term “Prepayments” means any amounts paid by the District to the Trustee and designated by the District as a prepayment of Special Taxes for one or more parcels in the District made in accordance with the RMA.

Principal Account. The term “Principal Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.

Principal Office of the Trustee. The term “Principal Office of the Trustee” means the office of the Trustee located in Costa Mesa, California, or such other office or offices as the Trustee may designate from time to time, or the office of any successor Trustee where it principally conducts its business of serving as trustee under indentures pursuant to which municipal or governmental obligations are issued.

Project. The term “Project” means those public facilities described in the Resolution of Formation that are to be acquired or constructed within and outside of the District, including all engineering, planning and design services and other incidental expenses related to such facilities and other facilities, if any, authorized by the qualified electors within the District from time to time.

Project Costs. The term “Project Costs” means the amounts necessary to finance the Project, to create and replenish any necessary reserve funds, to pay the initial and annual costs associated with the Bonds or any Parity Bonds, including, but not limited to, remarketing, credit enhancement, Trustee and other fees and expenses relating to the issuance of the Bonds or any Parity Bonds and the formation of the District, and to pay any other “incidental expenses” of the District, as such term is defined in the Act.

Rating Agency. The term “Rating Agency” means Moody’s or S&P, or both, as the context requires.

Rebate Account. The term “Rebate Account” means the account by that name created and established in the Rebate Fund pursuant to Section 3.1 hereof.

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Rebate Fund. The term “Rebate Fund” means the fund by that name established pursuant to Section 3.1 hereof in which there are established the Accounts described in Section 3.1 hereof.

Rebate Regulations. The term “Rebate Regulations” means any final, temporary or proposed Regulations promulgated under Section 148(f) of the Code.

Record Date. The term “Record Date” means the fifteenth day of the month preceding an Interest Payment Date, regardless of whether such day is a Business Day.

Redemption Account. The term “Redemption Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.

Regulations. The term “Regulations” means the regulations adopted or proposed by the Department of Treasury from time to time with respect to obligations issued pursuant to Section 103 of the Code.

Representation Letter. The term “Representation Letter” means the Blanket Letter of Representations from the District to the Depository as described in Section 2.13 hereof.

Reserve Account. The term “Reserve Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof. “Reserve Policy” means a letter of credit, insurance policy, surety bond or other such funding instrument issued by a municipal bond insurance company rated least “Aa2” or higher by Moody’s or “AA” or higher by S&P, delivered to the Trustee for the purpose of providing all or a portion of the Reserve Requirement for Bonds and Parity Bonds.

Reserve Requirement. The term “Reserve Requirement” means that amount as of any date of calculation equal to the lesser of: (i) 10% of the initial principal amount of the Bonds and Parity Bonds, if any; (ii) Maximum Annual Debt Service on the then Outstanding Bonds and Parity Bonds, if any; (iii) 125% of average Annual Debt Service on the then Outstanding Bonds and Parity Bonds, if any; provided, however, that the Reserve Requirement shall not exceed $______ except in connection with the issuance of Parity Bonds.

Resolution of Formation. The term “Resolution of Formation” means Resolution No. 23-1327 adopted by the City Council on June 7, 2023, pursuant to which the City Council established the District.

RMA. The term “RMA” means the Rate and Method of Apportionment of Special Tax for the District approved by the qualified electors of the District at the June 7, 2023, election.

Sinking Fund Payment. The term “Sinking Fund Payment” means the annual payment to be deposited in the Redemption Account to redeem a portion of the Term Bonds in accordance with the schedules set forth in Section 4.1(b) hereof and any annual sinking fund payment schedule to retire any Parity Bonds which are designated as Term Bonds.

Six-Month Period. The term “Six-Month Period” means the period of time beginning on the Delivery Date of each issue of Bonds or Parity Bonds, as applicable, and ending six consecutive months thereafter, and each six-month period thereafter until the latest maturity date of the Bonds and the Parity Bonds (and any obligations that refund an issue of the Bonds or Parity Bonds).

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 108

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Special Tax Administrator. The term “Special Tax Administrator” means the individual or entity appointed by the City to administer the calculation and collection of the Special Taxes.

Special Tax Fund. The term “Special Tax Fund” means the fund by that name created and established pursuant to Section 3.1 hereof.

Special Taxes. The term “Special Taxes” means the taxes authorized to be levied by the District on property within the District in accordance with the Ordinance, the Resolution of Formation, the Act and the voter approval obtained at the June 7, 2023, election in the District, including any scheduled payments and any Prepayments thereof, the net proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien and penalties and interest thereon; provided that any delinquent Special Tax sold to an independent third- party or to the City for 100% of the delinquent amount shall no longer be pledged hereunder to the payment of the Bonds or Parity Bonds.

S&P. The term “S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, its successors and assigns.

Subaccount. The term “Subaccount” means any subaccount created pursuant to this Indenture.

Supplemental Indenture. The term “Supplemental Indenture” means any supplemental indenture amending or supplementing this Indenture.

Surplus Fund. The term “Surplus Fund” means the fund by that name created and established pursuant to Section 3.1 hereof.

Tax Certificate. The term “Tax Certificate” means the certificate by that name to be executed by the District on a Delivery Date to establish certain facts and expectations and that contains certain covenants relevant to compliance with the Code.

Tax-Exempt. The term “Tax-Exempt” means, with reference to an Authorized Investment, an Authorized Investment the interest earnings on which are excludable from gross income for federal income tax purposes pursuant to Section 103(a) of the Code, other than one described in Section 57(a)(5)(C) of the Code.

Taxable Property. The term “Taxable Property” has the meaning ascribed to it in the RMA.

Term Bonds. The term “Term Bonds” means the Bonds maturing on September 1, 20__, September 1, 20__, September 1, 20__ and September 1, 20__ and any term maturities of an issue of Parity Bonds as specified in a Supplemental Indenture.

Trustee. The term “Trustee” means Wilmington Trust, National Association, a national banking association duly organized and existing under the laws of the United States, at its principal corporate trust office in Costa Mesa, California, and its successors or assigns, or any other bank or trust company that may at any time be substituted in its place as provided in Sections 7.2 or 7.3, and any successor thereto.

Underwriter. The term “Underwriter” means, with respect to the Bonds, Raymond James & Associates, Inc., and with respect to each issue of Parity Bonds, the institution or institutions, if any, with whom the District enters into a purchase contract for the sale of such issue.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 109

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Water Facilities Account. The term “Water Facilities Account” means the account by that name created and established in the Acquisition and Construction Fund pursuant to Section 3.1 hereof.

ARTICLE II

GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds and Parity Bonds. Under and pursuant to the Act, the Bonds in the aggregate principal amount of $______, together with any Parity Bonds authorized by the City Council in accordance with Section 9.2 hereof, shall be issued for the purposes of financing and/or refinancing the Project, paying Costs of Issuance, funding the Reserve Account and funding capitalized interest; provided that the aggregate principal amount of the Bonds and any Parity Bonds shall not exceed the total indebtedness presently authorized or subsequently authorized by the qualified electors within the District in accordance with the Act. The Bonds and any Parity Bonds shall be and are limited obligations of the District and shall be payable as to the principal thereof and interest thereon and any premiums upon the redemption thereof solely from the Net Taxes and the other amounts in the Special Tax Fund (other than amounts in the Administrative Expense Account of the Special Tax Fund).

Section 2.2. Type and Nature of Bonds and Parity Bonds. Neither the faith and credit nor the taxing power of the City, the State of California, or any political subdivision thereof other than the District is pledged to the payment of the Bonds or any Parity Bonds. Except for the Net Taxes, no other taxes are pledged to the payment of the Bonds or any Parity Bonds. The Bonds and any Parity Bonds are not general or special obligations of the City nor general obligations of the District, but are limited obligations of the District payable solely from certain amounts deposited by the District in the Special Tax Fund (exclusive of the Administrative Expense Account), as more fully described herein.

The District’s limited obligation to pay the principal of, premium, if any, and interest on the Bonds and any Parity Bonds from amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) is absolute and unconditional, free of deductions and without any abatement, offset, recoupment, diminution or set-off whatsoever. No Owner of the Bonds or any Parity Bonds may compel the exercise of the taxing power by the District (except as pertains to the Special Taxes) or the City or the forfeiture of any of their property. The principal of and interest on the Bonds and any Parity Bonds and premiums upon the redemption thereof, if any, are not a debt of the City, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction. The Bonds and any Parity Bonds are not a legal or equitable pledge, charge, lien, or encumbrance upon any of the District’s property, or upon any of its income, receipts or revenues, except the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) which are, under the terms of this Indenture and the Act, set aside for the payment of the Bonds, any Parity Bonds and interest thereon, and neither the members of the legislative body of the District nor the members of the City Council nor any persons executing the Bonds or any Parity Bonds are liable personally on the Bonds or any Parity Bonds, by reason of their issuance.

Notwithstanding anything to the contrary contained in this Indenture, the District shall not be required to advance any money derived from any source of income other than the Net Taxes for the payment of the interest on or the principal of the Bonds or any Parity Bonds, or for the performance of any covenants contained herein. The District may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 110

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Section 2.3. Equality of Bonds and Parity Bonds and Pledge of Net Taxes. Pursuant to the Act and this Indenture, the Bonds and any Parity Bonds shall be equally payable from and secured by a first pledge of and lien on the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account), without priority for number, date of the Bonds or Parity Bonds, date of sale, date of execution, or date of delivery, and the payment of the interest on and principal of the Bonds and any Parity Bonds and any premiums upon the redemption thereof, shall be exclusively paid from the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) that are hereby set aside for the payment of the Bonds and any Parity Bonds; provided that any delinquent Special Tax sold to an independent third-party or to the City for 100% of the delinquent amount shall no longer be pledged hereunder to the payment of the Bonds or Parity Bonds. Amounts in the Special Tax Fund (other than the Administrative Expense Account therein) shall constitute a trust fund held for the benefit of the Owners to be applied to the payment of the interest on and principal of the Bonds and any Parity Bonds and, so long as any of the Bonds and any Parity Bonds or interest thereon remain Outstanding, shall not be used for any other purpose, except as permitted by this Indenture or any Supplemental Indenture. Notwithstanding any provision contained in this Indenture to the contrary, Net Taxes deposited in the Rebate Fund and the Surplus Fund shall no longer be considered to be pledged to the Bonds or any Parity Bonds, and none of the Rebate Fund, the Surplus Fund, the Acquisition and Construction Fund or the Administrative Expense Account of the Special Tax Fund shall be construed as a trust fund held for the benefit of the Owners.

Nothing in this Indenture or any Supplemental Indenture shall preclude: (i) subject to the limitations contained hereunder, the redemption prior to maturity of any Bonds or Parity Bonds subject to call and redemption and payment of said Bonds or Parity Bonds from proceeds of refunding bonds issued under the Act as the same now exists or as hereafter amended, or under any other law of the State of California; or (ii) the issuance, subject to the limitations contained herein, of Parity Bonds that shall be payable from Net Taxes.

Section 2.4. Description of Bonds; Interest Rates. The Bonds and any Parity Bonds shall be issued in fully registered form in denominations of $5,000 or any integral multiple thereof. The Bonds and any Parity Bonds of each issue shall be numbered as desired by the Trustee.

The Bonds shall be designated “Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee Special Tax Bonds, Series 2024.” The Bonds shall be dated as of their Delivery Date and shall mature and be payable on September 1 in the years and in the aggregate principal amounts and shall be subject to and shall bear interest at the rates set forth in the table below payable on March 1, 2025, and each Interest Payment Date thereafter:

Maturity Date
September 1
Principal
Amount
Interest
Rate
$ %
Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 111

Menifee Mayor and City Council
November 6, 2024
Page
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*
*
*
*
*Term Bond
Interest shall be payable on each Bond and Parity Bond from the date established in accordance with Section 2.5 below on each Interest Payment Date thereafter until the principal sum of such Bond or Parity Bond has been paid; provided, however, that if at the maturity date of any Bond or Parity Bond (or if the same is redeemable and shall be duly called for redemption, then at the date fixed for redemption) funds are available for the payment or redemption thereof in full, in accordance with the terms of this Indenture, such Bonds and Parity Bonds shall then cease to bear interest. Interest due on the Bonds and Parity Bonds shall be calculated on the basis of a 360-day year comprised of twelve 30-day months.

Section 2.5. Place and Form of Payment. The Bonds and Parity Bonds shall be payable both as to principal and interest, and as to any premiums upon the redemption thereof, in lawful money of the United States of America. The principal of the Bonds and Parity Bonds and any premiums due upon the redemption thereof shall be payable upon presentation and surrender thereof at the Principal Office of the Trustee, or at the designated office of any successor Trustee. If the Nominee of the Bonds or Parity Bonds is registered to Cede & Co., payment of principal and any premiums shall be made without presentment. Interest on any Bond or Parity Bond shall be payable from the Interest Payment Date next preceding the date of authentication of such Bond or Parity Bond, unless: (i) such date of authentication is an Interest Payment Date, in which event interest shall be payable from such date of authentication; (ii) the date of authentication is after a Record Date but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication; or (iii) the date of authentication is prior to the close of business on the first Record Date occurring after the issuance of such Bond or Parity Bond, in which event interest shall be payable from the dated date of such Bond or Parity Bond, as applicable; provided, however, that if at the time of authentication of such Bond or Parity Bond, interest is in default, interest on such Bond or Parity Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment on such Bond or Parity Bond, interest on such Bond or Parity Bond shall be payable from its dated date. Interest on any Bond or Parity Bond shall be paid to the person whose name shall appear in the Bond Register as the Owner of such Bond or Parity Bond as of the close of business on the Record Date. Such interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, to such Owner at his or her address as it appears on the Bond Register. In addition, upon a request in writing received by the Trustee on or before the applicable Record Date from an Owner of $1,000,000 or more in principal amount of the Bonds or of any issue of Parity Bonds, payment shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account within the United States of America designated by such Owner.

Section 2.6. Form of Bonds and Parity Bonds. The definitive Bonds may be printed from steel engraved or lithographic plates or may be typewritten. The Bonds and the certificate of authentication shall be substantially in the form attached hereto as Exhibit A, which form is hereby approved and adopted as the form of such Bonds and of the certificate of authentication. Each issue of Parity Bonds and the certificate of authentication therefor shall be in the form provided in the Supplemental Indenture for such issue of Parity Bonds.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 112

Menifee Mayor and City Council
November 6, 2024
Page
1207 of 1464

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Until definitive Bonds or Parity Bonds, as applicable, shall be prepared, the District may cause to be executed and delivered in lieu of such definitive Bonds or Parity Bonds temporary bonds in typed, printed, lithographed or engraved form and in fully registered form, subject to the same provisions, limitations and conditions as are applicable in the case of definitive Bonds or Parity Bonds, except that they may be in any denominations authorized by the District. Until exchanged for definitive Bonds or Parity Bonds, as applicable, any temporary bond shall be entitled and subject to the same benefits and provisions of this Indenture as definitive Bonds and Parity Bonds. If the District issues temporary Bonds or Parity Bonds, it shall execute and furnish definitive Bonds or Parity Bonds, as applicable, without unnecessary delay and thereupon any temporary Bond or Parity Bond may be surrendered to the Trustee at its office, without expense to the Owner, in exchange for a definitive Bond or Parity Bond of the same issue, maturity, interest rate and principal amount in any authorized denomination.

All temporary Bonds or Parity Bonds so surrendered shall be cancelled by the Trustee and shall not be reissued.

Section 2.7. Execution and Authentication. The Bonds and Parity Bonds shall be signed on behalf of the District by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Clerk of the City, or any duly appointed Deputy Clerk, in their capacity as officers of the District, and the seal of the City or the District (or a facsimile thereof) may be impressed, imprinted, engraved or otherwise reproduced thereon, and attested by the signature of the City Clerk of the City. In case any one or more of the officers who shall have signed or sealed any of the Bonds or Parity Bonds shall cease to be such officer before the Bonds or Parity Bonds so signed and sealed have been authenticated and delivered by the Trustee (including new Bonds or Parity Bonds delivered pursuant to the provisions hereof with reference to the transfer and exchange of Bonds or Parity Bonds or lost, stolen, destroyed or mutilated Bonds or Parity Bonds), such Bonds and Parity Bonds shall nevertheless be valid and may be authenticated and delivered as herein provided, and may be issued as if the person who signed or sealed such Bonds or Parity Bonds had not ceased to hold such office.

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

Section 2.8. Bond Register. The Trustee will keep or cause to be kept, at its office, sufficient books for the registration and transfer of the Bonds and any Parity Bonds which shall upon reasonable prior notice be open to inspection by the District during all regular business hours, and, subject to the limitations set forth in Section 2.9 below, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be transferred on said Bond Register, Bonds and any Parity Bonds as herein provided.

The District and the Trustee may treat the Owner of any Bond or Parity Bond whose name appears on the Bond Register as the absolute Owner of that Bond or Parity Bond for any and all purposes and the District and the Trustee shall not be affected by any notice to the contrary. The District and the Trustee may rely on the address of the Owner as it appears in the Bond Register for any and all purposes. It shall be the duty of the Owner to give written notice to the Trustee of any change in the Owner’s address so that the Bond Register may be revised accordingly.

Section 2.9. Registration of Exchange or Transfer. Subject to the limitations set forth in the following paragraph, the registration of any Bond or Parity Bond may, in accordance with its terms, Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 113

Menifee Mayor and City Council
November 6, 2024
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be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond or Parity Bond for cancellation at the office of the Trustee, accompanied by delivery of written instrument of transfer in a form acceptable to the Trustee and duly executed by the Owner or his or her duly authorized attorney.

Bonds or Parity Bonds may be exchanged at the office of the Trustee for a like aggregate principal amount of Bonds or Parity Bonds for other authorized denominations of the same maturity and issue. The Trustee shall not collect from the Owner any charge for any new Bond or Parity Bond issued upon any exchange or transfer, but shall require the Owner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. Whenever any Bonds or Parity Bonds shall be surrendered for registration of transfer or exchange, the District shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds or a new Parity Bond or Parity Bonds, as applicable, of the same issue and maturity, for a like aggregate principal amount; provided that the Trustee shall not be required to register transfers or make exchanges of: (i) Bonds or Parity Bonds for a period of 15 days next preceding any selection of the Bonds or Parity Bonds to be redeemed; or (ii) any Bonds or Parity Bonds chosen for redemption.

Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds. If any Bond or Parity Bond shall become mutilated, the District shall execute, and the Trustee shall authenticate and deliver, a new Bond or Parity Bond of like tenor, date, issue and maturity in exchange and substitution for the Bond or Parity Bond so mutilated, but only upon surrender to the Trustee of the Bond or Parity Bond so mutilated. Every mutilated Bond or Parity Bond so surrendered to the Trustee shall be cancelled by the Trustee pursuant to Section 10.1 hereof. If any Bond or Parity Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is satisfactory to the Trustee and, if any indemnity satisfactory to the Trustee shall be given, the District shall execute and the Trustee shall authenticate and deliver a new Bond or Parity Bond, as applicable, of like tenor, maturity and issue, numbered and dated as the Trustee shall determine in lieu of and in substitution for the Bond or Parity Bond so lost, destroyed or stolen. Any Bond or Parity Bond issued in lieu of any Bond or Parity Bond alleged to be mutilated, lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other Bonds and Parity Bonds issued hereunder. The Trustee shall not treat both the original Bond or Parity Bond and any replacement Bond or Parity Bond as being Outstanding for the purpose of determining the principal amount of Bonds or Parity Bonds that may be executed, authenticated and delivered hereunder or for the purpose of determining any percentage of Bonds or Parity Bonds Outstanding hereunder, but both the original and replacement Bond or Parity Bond shall be treated as one and the same.

Notwithstanding any other provision of this Section, in lieu of delivering a new Bond or Parity Bond that has been mutilated, lost, destroyed or stolen, and that has matured, the Trustee may make payment with respect to such Bonds or Parity Bonds.

Section 2.11. Validity of Bonds and Parity Bonds. The validity of the authorization and issuance of the Bonds and any Parity Bonds shall not be affected in any way by any defect in any proceedings taken by the District for the financing of the Project, or by the invalidity, in whole or in part, of any contracts made by the District in connection therewith, and shall not be dependent upon the completion of the financing of the Project or upon the performance by any Person of his obligation with respect to the Project, and the recital contained in the Bonds or any Parity Bonds that the same are issued pursuant to the Act and other applicable laws of the State shall be conclusive evidence of their validity and of the regularity of their issuance.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 114

Menifee Mayor and City Council
November 6, 2024
Page
1209 of 1464

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Section 2.12. Book-Entry System. The Bonds shall be initially delivered in the form of a separate single fully registered Bond (which may be typewritten) for each maturity of the Bonds. Upon initial delivery, the ownership of each such Bond shall be registered in the registration books kept by the Trustee in the name of the Nominee as nominee of the Depository. Except as provided in Section 2.14 hereof, all of the Outstanding Bonds shall be registered in the registration books kept by the Trustee in the name of the Nominee. At the election of the District, any Parity Bonds may also be issued as book-entry bonds registered in the name of the Nominee as provided herein, in which case the references in Sections 2.12 through 2.15 to “Bonds” shall be applicable to such Parity Bonds.

With respect to Bonds registered in the registration books kept by the Trustee in the name of the Nominee, the District and the Trustee shall have no responsibility or obligation to any such Participant or to any Person on behalf of which such a Participant holds an interest in the Bonds.

Without limiting the immediately preceding sentence, the District and the Trustee shall have no responsibility or obligation with respect to: (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds; (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the registration books kept by the Trustee, of any notice with respect to the Bonds, including any notice of redemption; (iii) the selection by the Depository and its Participants of the beneficial interests in the Bonds to be redeemed in the event that the Bonds are redeemed in part; or (iv) the payment to any Participant or any other Person, other than an Owner as shown in the registration books kept by the Trustee, of any amount with respect to principal of, premium, if any, or interest due with respect to the Bonds. The District and the Trustee may treat and consider the Person in whose name each Bond is registered in the registration books kept by the Trustee as the holder and absolute owner of such Bond for the purpose of payment of the principal of, premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest due on the Bonds only to or upon the order of the respective Owner, as shown in the registration books kept by the Trustee, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to satisfy and discharge fully the District’s obligations with respect to payment of the principal, premium, if any, and interest due on the Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the registration books kept by the Trustee, shall receive a Bond evidencing the obligation of the District to make payments of principal, premium, if any, and interest pursuant to this Indenture. Upon delivery by the Depository to the Trustee and the District of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such new nominee of the Depository.

Section 2.13. Representation Letter. In order to qualify the Bonds and any Parity Bonds that the District elects to register in the name of the Nominee for the Depository’s book-entry system, an Authorized Representative of the District is hereby authorized to execute from time to time and deliver to such Depository the Representation Letter. The execution and delivery of the Representation Letter shall not in any way limit the provisions of Section 2.12 or in any other way impose upon the District or the Trustee any obligation whatsoever with respect to persons having interests in the Bonds other than the Owners, as shown on the registration books kept by the Trustee. The District agrees to take all action necessary to continuously comply with all representations made by it in the Representation Letter. In addition to the execution and delivery of the Representation Letter, the Authorized Representatives of the District are hereby authorized to take any other actions, not inconsistent with this Indenture, to qualify the Bonds for the Depository’s book-entry program.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 115

Menifee Mayor and City Council
November 6, 2024
Page
1210 of 1464

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Section 2.14. Transfers Outside Book-Entry System. In the event that: (i) the Depository determines not to continue to act as securities depository for the Bonds; or (ii) the District determines that the Depository shall no longer so act, then the District will discontinue the book-entry system with the Depository. If the District fails to identify another qualified securities depository to replace the Depository then the Bonds so designated shall no longer be restricted to being registered in the registration books kept by the Trustee in the name of the Nominee, but shall be registered in whatever name or names Persons transferring or exchanging Bonds shall designate, in accordance with the provisions of Section 2.9 hereof.

Section 2.15. Payments to the Nominee. Notwithstanding any other provisions of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal, premium, if any, and interest due with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository.

Section 2.16. Initial Depository and Nominee. The initial Depository under this Indenture shall be The Depository Trust Company, New York, New York. The initial Nominee shall be Cede & Co., as Nominee of The Depository Trust Company, New York, New York.

ARTICLE III

CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds. (a) There are hereby created and established and shall be maintained by the Trustee the following funds and accounts:
(1) The Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee Special Tax Fund (the “Special Tax Fund”) (in which there shall be established and created an Interest Account, a Principal Account, a Redemption Account, a Reserve Account, and an Administrative Expense Account).
(2) The Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee Rebate Fund (the “Rebate Fund”) (in which there shall be established a Rebate Account and an Alternate Penalty Account).
(3) The Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee Acquisition and Construction Fund (the “Acquisition and Construction Fund”) (in which there shall be established a City Facilities Account, a Water Facilities Account and a Costs of Issuance Account).
(4) The Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee Surplus Fund (the “Surplus Fund”).

The amounts on deposit in the foregoing funds, accounts and subaccounts shall be held by the Trustee. The Trustee shall invest and disburse the amounts in such funds, accounts and subaccounts in accordance with the provisions of this Article III and shall disburse investment earnings thereon in accordance with the provisions of Section 3.10 hereof.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 116

Menifee Mayor and City Council
November 6, 2024
Page
1211 of 1464

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In connection with the issuance of any Parity Bonds as described in Section 9.2, the Trustee, at the direction of an Authorized Representative of the District, may create new funds, accounts or subaccounts, or may create additional accounts and subaccounts within any of the foregoing funds and accounts for the purpose of separately accounting for the proceeds of the Bonds and any Parity Bonds. (b) The proceeds of the sale of the Bonds shall be received by the Trustee on behalf of the District and deposited and transferred as follows:
(1) $______ shall be transferred to the Costs of Issuance Account of the Acquisition and Construction Fund to pay the Costs of Issuance of the Bonds; (2) $______ shall be transferred to the Reserve Account of the Special Tax Fund to fund the Reserve Requirement;
(3) $______ shall be transferred to the Interest Account to pay the interest on the Bonds due through September 1, 2025; and
(4) $______ shall be transferred to the Acquisition and Construction Fund of which $_____ shall be deposited in the City Facilities Account, $_____ shall be deposited in the Water Facilities Account and $______ shall be deposited in the School Facilities Account.

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

Section 3.2. Deposits to and Disbursements from Special Tax Fund. (a) Except for Prepayments, which shall be deposited to the Redemption Account of the Special Tax Fund, the Trustee shall, on each date on which the Special Taxes are received from the District, deposit the Special Taxes in the Special Tax Fund to be held in trust for the Owners. The Trustee shall transfer the Special Taxes on deposit in the Special Tax Fund on the dates and in the amounts set forth in the following Sections, in the following order of priority, to:
(1) the Administrative Expense Account of the Special Tax Fund up to the Administrative Expenses Cap;
(2) the Interest Account of the Special Tax Fund;
(3) the Principal Account of the Special Tax Fund;
(4) the Redemption Account of the Special Tax Fund;
(5) the Reserve Account of the Special Tax Fund;
(6) the Administrative Expense Account of the Special Tax Fund to the extent that Administrative Expenses exceed or are expected to exceed the Administrative Expense Cap; (7) the Rebate Fund; and
(8) the Surplus Fund.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 117

Menifee Mayor and City Council
November 6, 2024
Page
1212 of 1464

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(b) At maturity of all of the Bonds and Parity Bonds and, after all principal and interest then due on the Bonds and Parity Bonds then Outstanding have been paid or provided for and any amounts owed to the Trustee have been paid in full, moneys in the Special Tax Fund and any accounts therein may be used by the District for any lawful purpose.

Section 3.3. Administrative Expense Account of the Special Tax Fund. The Trustee shall transfer from the Special Tax Fund and deposit in the Administrative Expense Account of the Special Tax Fund from time to time amounts necessary to make timely payment of Administrative Expenses as set forth in a Certificate of an Authorized Representative of the District; provided, however, that, except as set forth in the following sentence, the total amount transferred with respect to a Bond Year shall not exceed the Administrative Expenses Cap until such time as there has been deposited to the Interest Account and the Principal Account an amount, together with any amounts already on deposit therein, that is sufficient to pay the interest and principal on all Bonds and Parity Bonds due in such Bond Year and to restore the Reserve Account to the Reserve Requirement.

Notwithstanding the foregoing, amounts in excess of the Administrative Expenses Cap may be transferred to the Administrative Expense Account to the extent necessary to collect delinquent Special Taxes. Moneys in the Administrative Expense Account of the Special Tax Fund may be invested in any Authorized Investments as directed in writing by an Authorized Representative of the District and shall be disbursed as directed in a Certificate of an Authorized Representative.

Section 3.4. Interest Account and Principal Account of the Special Tax Fund. The principal of and interest due on the Bonds and any Parity Bonds until maturity, other than principal due upon redemption, shall be paid by the Trustee from the Principal Account and the Interest Account of the Special Tax Fund, respectively.

For the purpose of assuring that the payment of principal of and interest on the Bonds and any Parity Bonds will be made when due, after making the transfer required by Section 3.3, at least one Business Day prior to each March 1 and September 1, the Trustee shall make the following transfers from the Special Tax Fund first to the Interest Account and then to the Principal Account; provided, however, that to the extent that deposits have been made in the Interest Account or the Principal Account from the proceeds of the sale of an issue of the Bonds or any Parity Bonds, or otherwise, the transfer from the Special Tax Fund need not be made; and provided, further, that, if amounts in the Special Tax Fund (exclusive of the Reserve Account and the Administrative Expense Account) are inadequate to make the foregoing transfers, then any deficiency shall be made up by transfers from the Reserve Account:
(a) To the Interest Account, an amount such that the balance in the Interest Account one Business Day prior to each Interest Payment Date shall be equal to the installment of interest due on the Bonds and any Parity Bonds on said Interest Payment Date and any installment of interest due on a previous Interest Payment Date that remains unpaid. Moneys in the Interest Account shall be used for the payment of interest on the Bonds and any Parity Bonds as the same become due. (b) To the Principal Account, an amount such that the balance in the Principal Account one Business Day prior to September 1 of each year, commencing September 1, 2026, shall equal the principal payment due on the Bonds and any Parity Bonds maturing on such September 1 and any principal payment due on a previous September 1 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds and any Parity Bonds as the same become due at maturity.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 118

Menifee Mayor and City Council
November 6, 2024
Page
1213 of 1464

19 4885-4283-6967/200299-0015
Section 3.5. Redemption Account of the Special Tax Fund. (a) With respect to each September 1 on which a Sinking Fund Payment is due, after the deposits have been made to the Administrative Expense Account, the Interest Account and the Principal Account of the Special Tax Fund as required by Sections 3.3 and 3.4 hereof, the Trustee shall next transfer into the Redemption Account of the Special Tax Fund from the Special Tax Fund the amount needed to make the balance in the Redemption Account one Business Day prior to each September 1 on which a Sinking Fund Payment is due equal to the Sinking Fund Payment due on any Outstanding Bonds and Parity Bonds on such September 1; provided, however, that, if amounts in the Special Tax Fund are inadequate to make the foregoing transfers, then any deficiency shall be made up by an immediate transfer from the Reserve Account, if funded, pursuant to Section 3.6 below.

Moneys so deposited in the Redemption Account shall be used and applied by the Trustee to call and redeem Term Bonds in accordance with the Sinking Fund Payment schedules set forth in Section 4.1(b) hereof, and to redeem Parity Bonds in accordance with any Sinking Fund Payment schedule in the Supplemental Indenture for such Parity Bonds.
(b) After making the deposits to the Administrative Expense Account, the Interest Account and the Principal Account of the Special Tax Fund pursuant to Sections 3.3 and 3.4 above and to the Redemption Account for Sinking Fund Payments then due pursuant to subparagraph (a) of this Section, and in accordance with the District’s election to call Bonds for optional redemption as set forth in Section 4.1(a) hereof, or to call Parity Bonds for optional redemption as set forth in any Supplemental Indenture for Parity Bonds, the Trustee shall transfer from the Special Tax Fund and deposit in the Redemption Account moneys available for the purpose and sufficient to pay the principal and the premiums, if any, payable on the Bonds or Parity Bonds called for optional redemption; provided, however, that amounts in the Special Tax Fund (other than the Administrative Expense Account therein) may be applied to optionally redeem Bonds and Parity Bonds only if immediately following such redemption the amount in the Reserve Account will equal the Reserve Requirement. (c) Prepayments deposited to the Redemption Account shall be applied on the redemption date established pursuant to Section 4.1(c) hereof to the payment of the principal of, premium, if any, and interest on the Bonds and Parity Bonds to be redeemed with such Prepayments. (d) Moneys set aside in the Redemption Account shall be used solely for the purpose of redeeming Bonds and Parity Bonds and shall be applied on or after the redemption date to the payment of principal of and premium, if any, on the Bonds or Parity Bonds to be redeemed upon presentation and surrender of such Bonds or Parity Bonds, and, in the case of an optional redemption or a special mandatory redemption from Prepayments, to pay the interest thereon; provided, however, that in lieu or partially in lieu of such call and redemption, moneys deposited in the Redemption Account may be used to purchase Outstanding Bonds or Parity Bonds in the manner hereinafter provided. Purchases of Outstanding Bonds or Parity Bonds may be made by the District at public or private sale as and when and at such prices as the District may in its discretion determine but only at prices (including brokerage or other expenses) not more than par plus accrued interest, plus, in the case of moneys set aside for an optional redemption or a special mandatory redemption, the premium applicable at the next following call date according to the premium schedule established pursuant to Section 4.1(a) or

4.1(c) hereof, as applicable, or in the case of Parity Bonds the premium established in any Supplemental Indenture. Any accrued interest payable upon the purchase of Bonds or Parity Bonds may be paid from the amount reserved in the Interest Account of the Special Tax Fund for the payment of interest on the next following Interest Payment Date.

Item Title: 12.1
Issuance of Special Tax Bonds for Community Facilities District 2023-1, Rockport Ranch Item Page Number: 119

Menifee Mayor and City Council
November 6, 2024
Page
1214 of 1464

20 4885-4283-6967/200299-0015
Section 3.6. Reserve Account of the Special Tax Fund. There shall be maintained in the Reserve Account of the Special Tax Fund an amount equal to the Reserve Requirement. The Reserve Requirement may be satisfied in whole or in part by cash, a Reserve Policy, or a combination thereof.

The amounts in the Reserve Account shall be applied as follows:
(a) Moneys in the Reserve Account shall be used solely for the purpose of paying the principal of, including Sinking Fund Payments, and interest on the Bonds and any Parity Bonds when due in the event that the moneys in the Interest Account and the Principal Account of the Special Tax Fund are insufficient therefor or moneys in the Redemption Account of the Special Tax Fund are insufficient to make a Sinking Fund Payment when due and for the purpose of making any required transfer to the Rebate Fund pursuant to Section 3.7 hereof upon written direction from the District. If the amounts in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund are insufficient to pay the principal of, including Sinking Fund Payments, or interest on any Parity Bonds when due, or amounts in the Special Tax Fund are insufficient to make transfers to the Rebate Fund when required, the Trustee shall withdraw from the Reserve Account, first from the cash on deposit therein, and second from a draw on the Reserve Policy, if any, for deposit in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund or the Rebate Fund, as applicable, moneys necessary for such purposes. (b) Whenever moneys are withdrawn from the Reserve Account, after making the required transfers referred to in Sections 3.3, 3.4 and 3.5 above, the Trustee shall transfer to the Reserve Account from available moneys in the Special Tax Fund, or from any other legally available funds that the District elects to apply to such purpose, the amount needed to restore the amount of such Reserve Account to the Reserve Requirement by first, repaying any amounts due under the Reserve Policy, and second to fund the Reserve Account to the Reserve Requirement. Moneys in the Special Tax Fund shall be deemed available for transfer to the Reserve Account only if the Trustee determines that such amounts will not be needed to make the deposits required to be made to the Administrative Expense Account, the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund on or before the next September 1. If amounts in the Special Tax Fund together with any other amounts transferred to replenish the Reserve Account are inadequate to restore the Reserve Account to the Reserve Requirement, including any amounts necessary to pay costs related to the Reserve Policy, if any, then the District shall include the amount necessary to restore the Reserve Account to the Reserve Requirement, in the next annual Special Tax levy to the extent of the maximum permitted Special Tax rates.
(c) In connection with a redemption of Bonds pursuant to Section 4.1(a) or 4.1(c) or Parity Bonds in accordance with any Supplemental Indenture, or a partial defeasance of Bonds or Parity Bonds in accordance with Section 9.1 hereof, amounts in the Reserve Account may be applied to such redemption or partial defeasance so long as the amount on deposit in the Reserve Account following such redemption or partial defeasance equals the Reserve Requirement. The District shall set forth in a Certificate of an Authorized Representative the amount in the Reserve Account to be transferred to the Redemption Account on a redemption date or to be transferred pursuant to the Indenture to partially defease Bonds or Parity Bonds, and the Trustee shall make such transfer on the applicable redemption or defeasance date, subject to the limitation in the preceding sentence. (d) To the extent that the Reserve Account is at the Reserve Requirement as of the first day of the final Bond Year for the Bonds or an issue of Parity Bonds, amounts in the Reserve Account may be applied to pay the principal of and interest due on the Bonds and Parity Bonds, as applicable, in the final Bond Year for such issue. Moneys in the Reserve Account in excess of the Reserve Item Title: 12.1
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Requirement not transferred in accordance with the preceding provisions of this Section shall be withdrawn from the Reserve Account on the Business Day before each March 1 and September 1 and shall be transferred to the Acquisition and Construction Fund or an Account therein, as directed by an Authorized Representative of the District, until all amounts have been disbursed from the Acquisition and Construction Fund (or such fund is closed) and thereafter to the Interest Account of the Special Tax Fund.

Section 3.7. Rebate Fund.
(a) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder designated as the Rebate Fund and shall establish a separate Rebate Account and Alternate Penalty Account therein. All money at any time deposited in the Rebate Account or the Alternate Penalty Account of the Rebate Fund shall be held by the Trustee in trust, for payment to the United States Treasury. A separate subaccount of the Rebate Account and the Alternate Penalty Account shall be established for the Bonds and each issue of Parity Bonds the interest on which is excluded from gross income for federal income tax purposes. All amounts on deposit in the Rebate Fund with respect to the Bonds or an issue of Parity Bonds shall be governed by this Section 3.7 and the Tax Certificate for such issue, unless the District obtains an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest payments on the Bonds and Parity Bonds will not be adversely affected if such requirements are not satisfied. (1) Rebate Account. The following requirements shall be satisfied with respect to each subaccount of the Rebate Account:
(i) Annual Computation. Within 55 days of the end of each Bond Year, the District shall calculate or cause to be calculated the amount of rebatable arbitrage for the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Rebate Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage described in the Tax Certificate for each issue (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and (C) of the Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the “1½% Penalty”) has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Rebate Regulations (the “Rebatable Arbitrage”). The District shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section.
(ii) Annual Transfer. Within 55 days of the end of each Bond Year for which Rebatable Arbitrage must be calculated as required by the Tax Certificate for each issue, upon the written direction of an Authorized Representative of the District, an amount shall be deposited to each subaccount of the Rebate Account by the Trustee from any funds so designated by the District if and to the extent required, so that the balance in the Rebate Account shall equal the amount of Rebatable Arbitrage so calculated by or on behalf of the District in accordance with clause (i) of this subsection (a)(1) with respect to the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable. In the event that immediately following any transfer required by the previous sentence, or the date on which the District determines that no transfer is required for such Bond Year, the amount then on deposit to the credit of the applicable subaccount of the Rebate Account exceeds the amount required to be on deposit therein, upon written instructions from an Authorized Representative of the District, the Trustee shall withdraw the excess from the appropriate subaccount of the Rebate Account and then credit the excess to the Special Tax Fund.

Item Title: 12.1
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(iii) Payment to the Treasury. The Trustee shall pay, as directed in writing by an Authorized Representative of the District, to the United States Treasury, out of amounts in each subaccount of the Rebate Account:
(X) not later than 60 days after the end of: (A) the fifth Bond Year for the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable; and (B) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year for the Bonds and each issue of Parity Bonds, as applicable; and
(Y) not later than 60 days after the payment or redemption of all of the Bonds or an issue of Parity Bonds, as applicable, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code.

In the event that, prior to the time of any payment required to be made from the Rebate Account, the amount in the Rebate Account is not sufficient to make such payment when such payment is due, the District shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a)(1) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T, or shall be made in such other manner as provided under the Code.
(2) Alternate Penalty Account.
(i) Six-Month Computation. If the 1½% Penalty has been elected for the Bonds or an issue of Parity Bonds, within 85 days of each particular Six-Month Period, the District shall determine or cause to be determined whether the 1½% Penalty is payable (and the amount of such penalty) as of the close of the applicable Six-Month Period. The District shall obtain expert advice in making such determinations.
(ii) Six-Month Transfer. Within 85 days of the close of each Six-Month Period, the Trustee, at the written direction of an Authorized Representative of the District, shall deposit an amount in the appropriate subaccounts of the Alternate Penalty Account from any source of funds held by the Trustee pursuant to this Indenture and designated by the District in such written directions or provided to it by the District, if and to the extent required, so that the balance in each subaccount of the Alternate Penalty Account equals the amount of 1½% Penalty due and payable to the United States Treasury determined as provided in subsection (a)(2)(i) above. In the event that immediately following any transfer provided for in the previous sentence, or the date on which the District determines that no transfer is required for such Bond Year, the amount then on deposit in a subaccount of the Alternate Penalty Account exceeds the amount required to be on deposit therein to make the payments required by subsection (iii) below, the Trustee, at the written direction of an Authorized Representative of the District, may withdraw the excess from the applicable subaccount of the Alternate Penalty Account and credit the excess to the Special Tax Fund. (iii) Payment to the Treasury. The Trustee shall pay, as directed in writing by an Authorized Representative of the District, to the United States Treasury, out of amounts in a subaccount of the Alternate Penalty Account, not later than 90 days after the close of each Six-Month Item Title: 12.1
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Period the 1½% Penalty, if applicable and payable, computed with respect to the Bonds and any issue of Parity Bonds in accordance with Section 148(f)(4) of the Code. In the event that, prior to the time of any payment required to be made from a subaccount of the Alternate Penalty Account, the amount in such subaccount is not sufficient to make such payment when such payment is due, the District shall calculate the amount of such deficiency and direct the Trustee, in writing, to deposit an amount equal to such deficiency into such subaccount of the Alternate Penalty Account from any funds held by the Trustee pursuant to this Indenture and designated by the District in such written directions prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a)(2) shall be made to the Internal Revenue Service, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T or shall be made in such other manner as provided under the Code.
(b) Disposition of Unexpended Funds. Any funds remaining in the Accounts of the Rebate Fund with respect to the Bonds or an issue of Parity Bonds after redemption and payment of such issue and after making the payments described in subsections (a)(1)(iii) or (a)(2)(iii) (whichever is applicable), may be withdrawn by the Trustee at the written direction of the District and utilized in any manner by the District.
(c) Survival of Defeasance and Final Payment. Notwithstanding anything in this Section or this Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance and final payment of the Bonds and any Parity Bonds with respect to which an Account has been created in the Rebate Fund.
(d) Amendment Without Consent of Owners. This Section 3.7 may be deleted or amended in any manner without the consent of the Owners, provided that prior to such event there is delivered to the District an opinion of Bond Counsel to the effect that such deletion or amendment will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds and any issue of Parity Bonds issued on a tax-exempt basis. (e) Trustee. The Trustee shall have no responsibility to monitor or calculate any amounts payable to the U.S. Treasury pursuant to this Section and shall be deemed constructively to have complied with its obligations hereunder if it follows the written instructions of the District given pursuant to this Section.

Section 3.8. Surplus Fund. After making the transfers required by Sections 3.3, 3.4, 3.5,

3.6 and 3.7 hereof, as soon as practicable after each September 1, the Trustee shall transfer all remaining amounts in the Special Tax Fund to the Surplus Fund, unless on or prior to such date, it has received a Certificate of an Authorized Representative directing that certain amounts be retained in the Special Tax Fund because the District has included such amounts as being available in the Special Tax Fund in calculating the amount of the levy of Special Taxes for such Fiscal Year pursuant to Section 5.2(b) hereof. Moneys deposited in the Surplus Fund will be transferred by the Trustee at the direction of an Authorized Representative of the District: (i) to the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund to pay the principal of, including Sinking Fund Payments, premium, if any, and interest on the Bonds and any Parity Bonds when due in the event that moneys in the Special Tax Fund and the Reserve Account of the Special Tax Fund are insufficient therefor; (ii) to the Reserve Account in order to replenish the Reserve Account to the Reserve Requirement; (iii) to the Administrative Expense Account of the Special Tax Fund to pay Administrative Expenses to the extent that the amounts on deposit in the Administrative Expense Account of the Special Tax Fund are insufficient to pay Administrative Expenses; (iv) to the Item Title: 12.1
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Acquisition and Construction Fund to pay Project Costs; or (v) after all Project Costs have been paid, to the District, for any other lawful purpose of the District.

The amounts in the Surplus Fund are not pledged to the repayment of the Bonds or the Parity Bonds and may be used by the District for any lawful purpose. In the event that the District reasonably expects to use any portion of the moneys in the Surplus Fund to pay debt service on any Outstanding Bonds or Parity Bonds, the District shall notify the Trustee in a Certificate of an Authorized Representative and the Trustee shall segregate such amount into a separate subaccount and the moneys on deposit in such subaccount of the Surplus Fund shall be invested at the written direction of the District in Authorized Investments the interest on which is excludable from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals under the Code) or in Authorized Investments at a yield not in excess of the yield on the issue of Bonds or Parity Bonds to which such amounts are to be applied, unless, in the opinion of Bond Counsel, investment at a higher yield will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or any Parity Bonds that were issued on a tax-exempt basis for federal income tax purposes. Such amounts shall be disbursed as directed by an Authorized Representative of the District.

Section 3.9. Acquisition and Construction Fund.
(a) The moneys in the Costs of Issuance Account shall be disbursed by the Trustee pursuant to a Certificate of an Authorized Representative of the District, and any balance remaining therein after 180 days shall be transferred by the Trustee to an Account within the Acquisition and Construction Fund as directed in writing by an Authorized Representative of the District. Following such transfer to the Acquisition and Construction Fund, the Costs of Issuance Account shall be closed. (b) The moneys in the Acquisition and Construction Fund and the Accounts therein (other than the Costs of Issuance Account) shall be applied exclusively to pay the Project Costs. Amounts for Project Costs shall be disbursed by the Trustee from the Acquisition and Construction Fund or the Accounts therein (other than the Costs of Issuance Account), as specified in a Request for Disbursement of Project Costs, substantially in the form of Exhibit B-1 attached hereto. A properly executed Request for Disbursement of Project Costs must be submitted in connection with each requested disbursement and the Trustee may rely thereon without investigating the accuracy thereof.

Amounts in an Account of the Acquisition and Construction Fund may be transferred to another Account or Accounts therein pursuant to a Certificate of an Authorized Representative of the District. (c) Upon receipt of a Certificate of an Authorized Representative of the District stating that all or a specified portion of the amount remaining in the Acquisition and Construction Fund or the Accounts therein (other than the Costs of Issuance Account) is no longer needed to pay Project Costs, the Trustee shall: (i) transfer all or such specified portion, as applicable, of the moneys remaining on deposit in the Acquisition and Construction Fund or the Accounts therein (other than the Costs of Issuance Account) to the Interest Account, the Principal Account or Redemption Account of the Special Tax Fund, to the Costs of Issuance Account or to the Surplus Fund, as directed in such certificate, provided that in connection with any direction to transfer amounts to the Surplus Fund there shall have been delivered to the Trustee with such certificate an opinion of Bond Counsel to the effect that such transfer to the Surplus Fund will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or any Parity Bonds that were issued on a tax-exempt basis for federal income tax purposes; and (ii) thereafter, close the Acquisition and Construction Fund.

Item Title: 12.1
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Section 3.10. Investments. Moneys held in any of the Funds, Accounts and Subaccounts under this Indenture shall be invested at the written direction of the District upon at least two (2) Business Days’ notice in accordance with the limitations set forth below only in Authorized Investments that shall be deemed at all times to be a part of such Funds, Accounts and Subaccounts.

Any loss resulting from such Authorized Investments shall be credited or charged to the Fund, Account or Subaccount from which such investment was made, and any investment earnings on a Fund, Account or Subaccount shall be applied as follows: (i) investment earnings on all amounts deposited in the Acquisition and Construction Fund (including the Accounts therein), the Special Tax Fund, the Surplus Fund and the Rebate Fund and each Account therein (other than the Reserve Account of the Special Tax Fund) shall be deposited in those respective Funds, Accounts and Subaccounts; and (ii) investment earnings on all amounts deposited in the Reserve Account shall be deposited therein to be applied as set forth in Section 3.6. Moneys in the Funds, Accounts and Subaccounts held under this Indenture may be invested by the Trustee as directed in writing by the District, from time to time, in Authorized Investments subject to the following restrictions (provided that the Trustee is not required to verify compliance with such restrictions and may rely on the District’s written instructions as evidence of such compliance):
(a) Moneys in the Acquisition and Construction Fund and the Accounts therein shall be invested in Authorized Investments that will by their terms mature, or in the case of an Investment Agreement are available without penalty, as close as practicable to the date the District estimates the moneys represented by the particular investment will be needed for withdrawal from the Acquisition and Construction Fund or the Accounts therein. Notwithstanding anything herein to the contrary, amounts in the Acquisition and Construction Fund or the Accounts therein three years after the Delivery Date for the Bonds and the proceeds of each issue of Parity Bonds issued on a tax-exempt basis which are remaining on deposit in the Acquisition and Construction Fund on the date which is three years following the date of issuance of such issue of Parity Bonds shall be invested by the District only in Authorized Investments the interest on which is excluded from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals under the Code) or in Authorized Investments at a yield not in excess of the yield on the issue of Bonds or Parity Bonds from which such proceeds were derived, unless in the opinion of Bond Counsel such restriction is not necessary to prevent interest on the Bonds or any Parity Bonds which were issued on a tax-exempt basis for federal income tax purposes from being included in gross income for federal income tax purposes. (b) Moneys in the Interest Account, the Principal Account, and the Redemption Account of the Special Tax Fund shall be invested only in Authorized Investments that will by their terms mature, or in the case of an Investment Agreement are available for withdrawal without penalty, on such dates so as to ensure the payment of principal of, premium, if any, and interest on the Bonds and any Parity Bonds as the same become due.
(c) Moneys in the Reserve Account of the Special Tax Fund may be invested only in Authorized Investments (other than the Authorized Investment described in clause (2)(i) of the definition thereof) which, taken together, have a weighted average maturity not in excess of five years; provided that such amounts may be invested in an Investment Agreement to the later of the final maturity of the Bonds or any Parity Bonds so long as such amounts may be withdrawn at any time, without penalty, for application in accordance with Section 3.6 hereof; and provided that no such Authorized Investment of amounts in the Reserve Account allocable to the Bonds or an issue of Parity Bonds shall mature later than the respective final maturity date of the Bonds or the issue of Parity Bonds, as applicable.

Item Title: 12.1
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(d) Moneys in the Rebate Fund shall be invested only in Authorized Investments of the type described in clause (1) of the definition thereof that by their terms will mature, as nearly as practicable, on the dates such amounts are needed to be paid to the United States Government pursuant to Section 3.7 hereof or in Authorized Investments of the type described in clause (2)(e) of the definition thereof.
(e) In the absence of written investment directions from the District, the Trustee shall invest solely in Authorized Investments specified in clause (2)(e) of the definition thereof. If no such written investment direction from the District is received, the funds shall be uninvested.

The Trustee shall sell, or present for redemption, any Authorized Investment whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer to such funds and accounts or from such funds and accounts. Notwithstanding anything in this Indenture to the contrary, the Trustee shall not be responsible for any loss from investments, sales or transfers undertaken in accordance with the provisions of this Indenture. Any Authorized Investments that are registrable securities shall be registered in the name of the Trustee.

The Trustee may act as principal or agent in the making or disposing of any investment and shall be entitled to its customary fee for making such investment. The Trustee may sell at the best market price obtainable, or present for redemption, any Authorized Investment so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Authorized Investment is credited, and, subject to the provisions of Section 7.4, the Trustee shall not be liable or responsible for any loss resulting from such investment. For investment purposes, the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately. The Trustee is hereby authorized, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or which any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or dealing as principal for its own account. The parties acknowledge that the Trustee is not providing investment supervision, recommendations, or advice.

The District acknowledges that, to the extent that regulations of the Comptroller of the Currency or other applicable regulatory entity grant the District the right to receive brokerage confirmations of security transactions as they occur, the District specifically waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the District periodic cash transaction statements that include detail for all investment transactions made by the Trustee hereunder.

ARTICLE IV

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

Item Title: 12.1
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Redemption Date Redemption Price
September 1, 20__ and March 1, 20__ [103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100] In the event that the District elects to redeem Bonds as provided above, the District shall give written notice to the Trustee of its election to so redeem, the redemption date and the principal amount of the Bonds of each maturity to be redeemed. The notice to the Trustee shall be given at least 45 but no more than 60 calendar days prior to the redemption date, or by such later date as is acceptable to the Trustee.
(b) Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, 20__ (the “20__ Term Bonds”) shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established hereunder, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed 20__ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:

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

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

Item Title: 12.1
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Term Bonds Maturing September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$
*
_____________
* Maturity.

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

Item Title: 12.1
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Term Bonds Maturing September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$
*
_____________
* Maturity.

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

In the event of a partial optional redemption or special mandatory redemption of the Term Bonds, each of the remaining Sinking Fund Payments for such Term Bonds shall be reduced, as nearly as practicable, on a pro rata basis.
(c) Special Mandatory Redemption. The Bonds are subject to special mandatory redemption as a whole or in part on a pro rata basis among maturities and by lot within a maturity, on any Interest Payment Date on or after March 1, 2025, and shall be redeemed by the Trustee, from Prepayments deposited to the Redemption Account pursuant to Section 3.2, plus amounts transferred from the Reserve Account pursuant to Section 3.6(c), at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

Redemption Date Redemption Price
Any Interest Payment Date from September 1, 20__ through March 1, 20__
[103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100] Prepayments and amounts released from the Reserve Account in connection with Prepayments will be allocated to the payment at maturity and redemption of Bonds and any Parity Bonds as nearly as practicable on a proportionate basis based on the outstanding principal amount of the Bonds and any Parity Bonds and such amounts shall be applied to redeem Bonds and Parity Bonds as nearly as practicable on a pro rata basis among maturities in increments of $5,000; provided, however, that, for Prepayments of less than $50,000, the District may specify in a Certificate of an Authorized Representative that Prepayments be applied to one or more maturities of the Bonds or Parity Bonds so long as there is delivered to the Trustee a Certificate of the Independent Financial Consultant that, following such application of the Prepayments, the maximum Special Taxes that may be levied in each Item Title: 12.1
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Fiscal Year on Taxable Property is not less than 110% of Annual Debt Service in the Bond Year that begins in such Fiscal Year.
(d) The redemption provisions for Parity Bonds shall be set forth in a Supplemental Indenture.

Section 4.2. Selection of Bonds and Parity Bonds for Redemption. If less than all of the Bonds or Parity Bonds Outstanding are to be redeemed, the portion of any Bond or Parity Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or an integral multiple thereof. In selecting portions of such Bonds or Parity Bonds for redemption, the Trustee shall treat such Bonds or Parity Bonds, as applicable, as representing that number of Bonds or Parity Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bonds or Parity Bonds to be redeemed in part by $5,000. The procedure for the selection of Parity Bonds for redemption may be modified as set forth in the Supplemental Indenture for such Parity Bonds. The Trustee shall promptly notify the District in writing of the Bonds or Parity Bonds, or portions thereof, selected for redemption.

Section 4.3. Notice of Redemption. When Bonds or Parity Bonds are due for redemption under Section 4.1 above or under another redemption provision set forth in a Supplemental Indenture relating to any Parity Bonds, the Trustee shall give notice, in the name of the District, of the redemption of such Bonds or Parity Bonds. Such notice of redemption shall: (i) specify the CUSIP numbers (if any), the bond numbers and the maturity date or dates of the Bonds or Parity Bonds selected for redemption, except that where all of the Bonds or all of an issue of Parity Bonds are subject to redemption, or all of the Bonds or Parity Bonds of one maturity are to be redeemed, the bond numbers of such issue need not be specified; (ii) state the date fixed for redemption and surrender of the Bonds or Parity Bonds to be redeemed; (iii) state the redemption price; (iv) state the place or places where the Bonds or Parity Bonds are to be redeemed; (v) in the case of Bonds or Parity Bonds to be redeemed only in part, state the portion of such Bond or Parity Bond which is to be redeemed; (vi) state the date of issue of the Bonds or Parity Bonds as originally issued; (vii) state the rate of interest borne by each Bond or Parity Bond being redeemed; and (viii) state any other descriptive information needed to identify accurately the Bonds or Parity Bonds being redeemed as shall be specified by the Trustee.

Such notice shall further state that on the date fixed for redemption, there shall become due and payable on each Bond, Parity Bond or portion thereof called for redemption, the principal thereof, together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon shall cease to accrue and be payable. At least 30 days but no more than 45 days prior to the redemption date, the Trustee shall mail a copy of such notice of redemption, by first class mail, postage prepaid, to the respective Owners thereof at their addresses appearing on the Bond Register, and to the original purchaser of any Bonds or Parity Bonds; provided, however, so long as the Bonds and Parity Bonds are registered in the name of the Nominee, such notice shall be given in such manner as complies with the requirements of the Depository. The actual receipt by the Owner of any Bond or Parity Bond of notice of such redemption shall not be a condition precedent to redemption, and neither the failure to receive nor any defect in such notice shall affect the validity of the proceedings for the redemption of such Bonds or Parity Bonds, or the cessation of interest on the redemption date. A certificate by the Trustee that notice of such redemption has been given as herein provided shall be conclusive as against all parties and the Owner shall not be entitled to show that he or she failed to receive notice of such redemption.

In addition to the foregoing notice, further notice shall be given by the Trustee as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall Item Title: 12.1
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in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed.

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

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

With respect to any notice of optional redemption of Bonds or Parity Bonds, such notice may state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on such Bonds or Parity Bonds to be redeemed and that, if the District determines that such moneys will not be so received on or prior to the redemption date, said notice shall be of no force and effect and the Trustee shall not be required to redeem such Bonds or Parity Bonds. If any condition stated in the redemption notice for an optional redemption shall not have been satisfied on or prior to the redemption date: (i) the redemption notice shall be of no force and effect, (ii) the District shall not be required to redeem such Bonds or Parity Bonds, (iii) the redemption shall not be made, and (iv) the Trustee shall within a reasonable time thereafter give notice to the persons in the manner in which the conditional redemption notice was given that such condition or conditions were not met and that the redemption was canceled.

Section 4.4. Partial Redemption of Bonds or Parity Bonds. Upon surrender of any Bond or Parity Bond to be redeemed in part only, the District shall execute and the Trustee shall authenticate and deliver to the Owner, at the expense of the District, a new Bond or Bonds or a new Parity Bond or Parity Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered, with the same interest rate and the same maturity or, in the case of surrender of a Parity Bond, a new Parity Bond or Parity Bonds subject to the foregoing limitations.

Section 4.5. Effect of Notice and Availability of Redemption Money. Notice of redemption having been duly given, as provided in Section 4.3 hereof, and the amount necessary for the redemption having been made available for that purpose and being available therefor on the date fixed for such redemption:
(a) the Bonds and Parity Bonds, or portions thereof, designated for redemption shall, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in this Indenture or in any Supplemental Indenture with respect to any Parity Bonds, anything in this Indenture or in the Bonds or the Parity Bonds to the contrary notwithstanding; (b) upon presentation and surrender thereof at the office of the Trustee (except as provided in Section 4.1(b)), the redemption price of such Bonds and Parity Bonds shall be paid to the Owners thereof;
Item Title: 12.1
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(c) as of the redemption date the Bonds or the Parity Bonds, or portions thereof so designated for redemption shall be deemed to be no longer Outstanding and such Bonds or Parity Bonds, or portions thereof, shall cease to bear further interest; and (d) as of the date fixed for redemption no Owner of any of the Bonds, Parity Bonds or portions thereof so designated for redemption shall be entitled to any of the benefits of this Indenture or any Supplemental Indenture, or to any other rights, except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available.

ARTICLE V

COVENANTS AND WARRANTY
Section 5.1. Warranty. The District shall preserve and protect the security pledged hereunder to the Bonds and any Parity Bonds against all claims and demands of all persons.

Section 5.2. Covenants. So long as any of the Bonds or Parity Bonds issued hereunder are Outstanding and unpaid, the District makes the following covenants with the Owners under the provisions of the Act and this Indenture (to be performed by the District or its proper officers, agents or employees), which covenants are necessary and desirable to secure the Bonds and Parity Bonds and tend to make them more marketable; provided, however, that said covenants do not require the District to expend any funds or moneys other than the Special Taxes and other amounts deposited to the Special Tax Fund:
(a) Punctual Payment; Against Encumbrances. The District covenants that it will receive all Special Taxes in trust for the Owners and will deposit all Special Taxes with the Trustee immediately upon their apportionment to the District, and the District shall have no beneficial right or interest in the amounts so deposited except as provided by this Indenture. All such Special Taxes shall be disbursed, allocated and applied solely to the uses and purposes set forth herein, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the District.

The District covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every Bond and Parity Bond issued hereunder, together with the premium, if any, thereon on the date, at the place and in the manner set forth in the Bonds and the Parity Bonds and in accordance with this Indenture to the extent that Net Taxes and other amounts pledged hereunder are available therefor, and that the payments into the Funds and Accounts created hereunder will be made, all in strict conformity with the terms of the Bonds, any Parity Bonds, and this Indenture, and that it will faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Supplemental Indentures and of the Bonds and any Parity Bonds issued hereunder.

The District will not mortgage or otherwise encumber, pledge or place any charge upon any of the Net Taxes except as provided in this Indenture, and will not issue any obligation or security having a lien or charge upon the Net Taxes superior to or on a parity with the Bonds, other than Parity Bonds.

Nothing herein shall prevent the District from issuing or incurring indebtedness that is payable from a pledge of Net Taxes that is subordinate in all respects to the pledge of Net Taxes to repay the Bonds and the Parity Bonds, subject to compliance with the District’s bonded indebtedness limit.

Item Title: 12.1
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(b) Levy of Special Tax. Beginning in Fiscal Year 2025-26 and so long as any Bonds or Parity Bonds issued under this Indenture are Outstanding, the District covenants to levy the Special Tax in an amount sufficient, together with other amounts on deposit in the Special Tax Fund, to pay:
(1) the principal of and interest on the Bonds and any Parity Bonds when due; (2) the Administrative Expenses; and (3) any amounts required to replenish the Reserve Account of the Special Tax Fund to the Reserve Requirement, including any amounts to pay costs related to the Reserve Policy, if any.

The District further covenants that it will take no actions that would discontinue or cause the discontinuance of the Special Tax levy or the District’s authority to levy the Special Tax for so long as the Bonds and any Parity Bonds are Outstanding.
(c) Commence Foreclosure Proceedings. The District covenants for the benefit of the Owners of the Bonds and any Parity Bonds that it will: (i) commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in excess of $5,000 by the October 1 following the close of each Fiscal Year in which such Special Taxes were due; and (ii) commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the October 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied; and (iii) diligently pursue such foreclosure proceedings until the delinquent Special Taxes are paid; provided that, notwithstanding the foregoing, the District may elect to defer foreclosure proceedings on any parcel so long as the amount in the Reserve Account is at least equal to the Reserve Requirement. The District may, but shall not be obligated to, advance funds from any source of legally available funds in order to maintain the Reserve Account. The District may treat any delinquent Special Tax sold to an independent third-party or to the City for at least 100% of the delinquent amount as having been paid. Proceeds of any such sale up to 100% of the delinquent amount will be deposited in the Special Tax Fund.

The District covenants that it will deposit the net proceeds of any foreclosure in the Special Tax Fund and will apply such proceeds remaining after the payment of Administrative Expenses to make current payments of principal and interest on the Bonds and any Parity Bonds, to bring the amount on deposit in the Reserve Account up to the Reserve Requirement and to pay any delinquent installments of principal or interest due on the Bonds and any Parity Bonds. (d) Payment of Claims. The District will pay and discharge any and all lawful claims for labor, materials or supplies that, if unpaid, might become a lien or charge upon the Net Taxes or other funds in the Special Tax Fund (other than the Administrative Expense Account therein), or that might impair the security of the Bonds or any Parity Bonds then Outstanding; provided, however, that nothing herein contained shall require the District to make any such payments so long as the District in good faith shall contest the validity of any such claims.
(e) Books and Accounts. The District will keep proper books of records and accounts, separate from all other records and accounts of the District, in which complete and correct entries shall be made of all transactions relating to the Project, the levy of the Special Tax and the deposits to the Special Tax Fund. Such books of records and accounts shall at all times during business hours be subject to the inspection of the Trustee or of the Owners or the Owners of any issue of Parity Bonds then Outstanding or their representatives authorized in writing. (f) Federal Tax Covenants. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds and any Parity Bonds issued on a tax-exempt basis for federal income tax purposes will not be adversely affected for federal income tax purposes, the District covenants to comply with all applicable Item Title: 12.1
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requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows:
(1) Private Activity. The District will take no action or refrain from taking any action or make any use of the proceeds of the Bonds or any Parity Bonds or of any other monies or property that would cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be “private activity bonds” within the meaning of Section 141 of the Code. (2) Arbitrage. The District will make no use of the proceeds of the Bonds or any Parity Bonds or of any other amounts or property, regardless of the source, or take any action or refrain from taking any action which will cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be “arbitrage bonds” within the meaning of Section 148 of the Code. (3) Federal Guaranty. The District will make no use of the proceeds of the Bonds or any Parity Bonds or take or omit to take any action that would cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be “federally guaranteed” within the meaning of Section 149(b) of the Code.
(4) Information Reporting. The District will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code. (5) Hedge Bonds. The District will make no use of the proceeds of the Bonds or any Parity Bonds or any other amounts or property, regardless of the source, or take any action or refrain from taking any action that would cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the District takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds and any applicable Parity Bonds. (6) Miscellaneous. The District will take no action or refrain from taking any action inconsistent with its expectations stated in the Tax Certificate executed on the Delivery Date by the District in connection with the Bonds and any issue of Parity Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein. (7) Other Tax-Exempt Issues. The District will not use proceeds of other tax-exempt securities to redeem any Bonds or Parity Bonds without first obtaining the written opinion of Bond Counsel that doing so will not impair the exclusion from gross income for federal income tax purposes of interest on the Bonds and any Parity Bonds issued on a tax-exempt basis. (8) Subsequent Opinions. If the District obtains a subsequent opinion of Bond Counsel other than Stradling Yocca Carlson & Rauth LLP, where such opinion is required in connection with a change or amendment to this Indenture or the procedures set forth in the Tax Certificate, it will obtain an opinion substantially to the effect originally delivered by Stradling Yocca Carlson & Rauth LLP, that interest on the Bonds is excluded from gross income for federal income tax purposes.
(g) Reduction of Maximum Special Taxes. The District hereby finds and determines that, historically, delinquencies in the payment of special taxes authorized pursuant to the Act in community facilities districts in Southern California have from time to time been at levels requiring the levy of Item Title: 12.1
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special taxes at the maximum authorized rates in order to make timely payment of principal of and interest on the outstanding indebtedness of such community facilities districts. For this reason, the District hereby determines that a reduction in the maximum Special Tax rates authorized to be levied on parcels in the District below the levels provided in this Section 5.2(g) would interfere with the timely retirement of the Bonds and Parity Bonds. The District determines it to be necessary in order to preserve the security for the Bonds and Parity Bonds to covenant, and, to the maximum extent that the law permits it to do so, the District hereby does covenant, that it shall not initiate proceedings to reduce the maximum Special Tax rates for the District, unless, in connection therewith, the District receives a certificate from one or more Independent Financial Consultants that, when taken together, certify that: (i) such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the District to an amount that is less than the Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such proposed reduction; and (ii) the District is not delinquent in the payment of the principal of or interest on the Bonds or any Parity Bonds. (h) Covenants to Defend. The District covenants that, in the event that any initiative is adopted by the qualified electors in the District that purports to reduce the maximum Special Tax below the levels specified in Section 5.2(g) above or to limit the power of the District to levy the Special Taxes for the purposes set forth in Section 5.2(b) above, it will commence and pursue legal action in order to preserve its ability to comply with such covenants. (i) Limitation on Right to Tender Bonds. The District hereby covenants that it will not adopt any policy pursuant to Section 53344.1 of the Act permitting the tender of Bonds or Parity Bonds in full payment or partial payment of any Special Taxes unless the District shall have first received a certificate from an Independent Financial Consultant that the acceptance of such a tender will not result in the District having insufficient Net Taxes to pay the principal of and interest on the Bonds and Parity Bonds when due.
(j) Continuing Disclosure. The District covenants to comply with the terms of the Continuing Disclosure Certificate and with the terms of any agreement executed by the District with respect to any Parity Bonds to assist the Underwriter in complying with Rule 15c2-12 adopted by the Securities and Exchange Commission; provided, however, that a failure to comply shall not be considered an event of default hereunder and the Owners shall be limited to enforcing the terms thereof in accordance with the terms of the Continuing Disclosure Certificate. (k) Further Assurances. The District shall make, execute and deliver any and all such further agreements, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the Bonds and any Parity Bonds of the rights and benefits provided in this Indenture.

Item Title: 12.1
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ARTICLE VI

AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Owner Consent. The District may from time to time, and at any time, without notice to or consent of any of the Owners, adopt Supplemental Indentures for any of the following purposes:
(a) to cure any ambiguity, to correct or supplement any provisions herein that may be inconsistent with any other provision herein, or to make any other provision with respect to matters or questions arising under this Indenture or in any additional resolution or order, provided that such action is not materially adverse to the interests of the Owners; (b) to add to the covenants and agreements of and the limitations and the restrictions upon the District contained in this Indenture other covenants, agreements, limitations and restrictions to be observed by the District that are not contrary to or inconsistent with this Indenture as theretofore in effect or that further secure Bond or Parity Bond payments; (c) to provide for the issuance of any Parity Bonds, and to provide the terms and conditions under which such Parity Bonds may be issued, subject to and in accordance with the provisions of this Indenture;
(d) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, or to comply with the Code or regulations issued thereunder, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and that shall not materially adversely affect the interests of the Owners of the Bonds or any Parity Bonds then Outstanding;
(e) to modify, alter or amend the RMA in any manner, so long as the Trustee receives a certificate of an Independent Financial Consultant stating that: (i) such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the District to an amount which is less than the Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such amendment; and (ii) based on the current development plan for parcels within the District, do not reduce the maximum Special Taxes that could be levied upon Taxable Property within the District to an amount that is less than the Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such amendment;
(f) to modify, alter, amend or supplement this Indenture in any other respect that is not materially adverse to the Owners; or
(g) to modify, alter, amend or supplement this Indenture in any other respect, as may be required to fund all or a portion of the Reserve Requirement with a Reserve Policy.

Section 6.2. Supplemental Indentures or Orders Requiring Owner Consent. Exclusive of the Supplemental Indentures described in Section 6.1, the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding shall have the right to consent Item Title: 12.1
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to and approve the adoption by the District of such Supplemental Indentures as shall be deemed necessary or desirable by the District for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Indenture; provided, however, that nothing herein shall permit, or be construed as permitting: (a) an extension of the maturity date of the principal, or the payment date of interest on, any Bond or Parity Bond; (b) a reduction in the principal amount of, or redemption premium on, any Bond or Parity Bond or the rate of interest thereon; (c) a preference or priority of any Bond or Parity Bond over any other Bond or Parity Bond; or (d) a reduction in the aggregate principal amount of the Bonds and Parity Bonds the Owners of which are required to consent to such Supplemental Indenture, without the consent of the Owners of all Bonds and Parity Bonds then Outstanding.

If at any time the District shall desire to adopt a Supplemental Indenture, which pursuant to the terms of this Section shall require the consent of the Owners, the District shall so notify the Trustee and shall deliver to the Trustee a copy of the proposed Supplemental Indenture. The Trustee shall, at the expense of the District, cause notice of the proposed Supplemental Indenture to be mailed, by first class mail, postage prepaid, to all Owners at their addresses as they appear in the Bond Register. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that a copy thereof is on file at the office of the Trustee for inspection by all Owners. The failure of any Owners to receive such notice shall not affect the validity of such Supplemental Indenture when consented to and approved by the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding as required by this Section. Whenever at any time within one year after the date of the first mailing of such notice, the Trustee shall receive an instrument or instruments purporting to be executed by the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding, which instrument or instruments shall refer to the proposed Supplemental Indenture described in such notice, and shall specifically consent to and approve the adoption thereof by the District substantially in the form of the copy referred to in such notice as on file with the Trustee, such proposed Supplemental Indenture, when duly adopted by the District, shall thereafter become a part of the proceedings for the issuance of the Bonds and any Parity Bonds. In determining whether the Owners of a majority of the aggregate principal amount of the Bonds and Parity Bonds have consented to the adoption of any Supplemental Indenture, Bonds or Parity Bonds that are owned by the District or by any person directly or indirectly controlling or controlled by or under the direct or indirect common control with the District, shall be disregarded and shall be treated as though they were not Outstanding for the purpose of any such determination.

Upon the adoption of any Supplemental Indenture and the receipt of consent to any such Supplemental Indenture from the Owners of not less than a majority in aggregate principal amount of the Outstanding Bonds and Parity Bonds in instances where such consent is required pursuant to the provisions of this Section, this Indenture shall be, and shall be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the District and all Owners of Outstanding Bonds and Parity Bonds shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments.

Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or Parity Bonds. After the effective date of any action taken as hereinabove provided, the District may determine that the Bonds or any Parity Bonds may bear a notation, by endorsement in form approved by the District, as to such action, and in that case upon demand of the Owner of any Outstanding Bond or Parity Bond at such effective date and presentation of such Owner’s Bond or Parity Bond for the purpose at the office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation as to such action shall be made on such Bonds or Parity Bonds. If Item Title: 12.1
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the District shall so determine, new Bonds or Parity Bonds so modified as, in the opinion of the District, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Outstanding Bond or Parity Bond at such effective date such new Bonds or Parity Bonds shall be exchanged at the office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, without cost to each Owner of Outstanding Bonds or Parity Bonds, upon surrender of such Outstanding Bonds or Parity Bonds.

The Trustee shall have the right to require such opinions of counsel as it deems necessary concerning: (i) the lack of material adverse effect of the amendment on Owners; and (ii) the fact that the amendment will not affect the tax status of interest with respect to the Bonds.

ARTICLE VII

TRUSTEE
Section 7.1. Trustee. Wilmington Trust, National Association shall be the Trustee for the Bonds and any Parity Bonds unless and until another Trustee is appointed by the District hereunder.

The Trustee represents that it has (or is a member of a bank holding company system whose bank holding company has) a combined capital (exclusive of borrowed capital) and surplus of at least $100,000,000. The District may, at any time, appoint a successor Trustee satisfying the requirements of Section 7.2 below for the purpose of receiving all money that the District is required to deposit with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture.

The Trustee is hereby authorized to and shall mail by first class mail, postage prepaid, or wire transfer in accordance with Section 2.5 above, interest payments to the Owners, to select Bonds and Parity Bonds for redemption, and to maintain the Bond Register. The Trustee is hereby authorized to pay the principal of and premium, if any, on the Bonds and Parity Bonds when the same are duly presented to it for payment at maturity or on call and redemption, to provide for the registration of transfer and exchange of Bonds and Parity Bonds presented to it for such purposes, to provide for the cancellation of Bonds and Parity Bonds all as provided in this Indenture, and to provide for the authentication of Bonds and Parity Bonds, and shall perform all other duties assigned to or imposed on it as provided in this Indenture. The Trustee shall keep accurate records of all funds administered by it and all Bonds and Parity Bonds paid, discharged and cancelled by it.

The Trustee is hereby authorized to pay and redeem the Bonds and Parity Bonds when duly presented for payment at maturity, or on redemption prior to maturity. The Trustee shall cancel all Bonds and Parity Bonds upon payment thereof in accordance with the provisions of Section 10.1 hereof.

The District shall from time to time, subject to any agreement between the District and the Trustee then in force, timely pay to the Trustee following demand therefor compensation for its services, reimburse the Trustee for all its advances and expenditures, including, but not limited to, advances to and fees, costs and expenses of independent accountants or counsel employed by it in the exercise and performance of its powers and duties hereunder, and indemnify and save the Trustee, its officers, directors, employees and agents, harmless against costs, claims, expenses and liabilities, including, without limitation, fees, costs and expenses of its attorneys (not arising from its own gross negligence or willful misconduct) that it may incur in the exercise and performance of its powers and duties hereunder. The foregoing obligation of the District to indemnify the Trustee shall survive the removal or resignation of the Trustee or the discharge of the Bonds and Parity Bonds.

Item Title: 12.1
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Section 7.2. Removal of Trustee. The District may at any time at its sole discretion, upon 30 days’ notice, remove the Trustee initially appointed, and any successor thereto, by delivering to the Trustee a written notice of its decision to remove the Trustee and may appoint a successor or successors thereto; provided that any such successor shall be a bank or trust company having (or whose parent bank holding company has) a combined capital (exclusive of borrowed capital) and surplus of at least $100,000,000, and subject to supervision or examination by federal or state authority. Any removal shall become effective only upon acceptance of appointment by the successor Trustee. If any bank or trust company appointed as a successor publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Any removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee and notice of the successor Trustee’s identity and address being sent by the successor Trustee to the Owners.

Section 7.3. Resignation of Trustee. The Trustee may at any time resign and be discharged from its duties and obligations hereunder by giving written notice to the District. Upon receiving such notice of resignation, the District shall promptly appoint a successor Trustee satisfying the criteria in Section 7.2 above by an instrument in writing. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed by the District within thirty (30) days of giving such notice or removal or resignation, then the Trustee, or any Owner may petition, at the sole expense of the District, a court of competent jurisdiction for the appointment of a successor Trustee and other appropriate relief, and such court may thereupon, after such notice (if any) as it may deem proper, appoint a successor Trustee under this Indenture.

Section 7.4. Liability of Trustee. The recitals of fact and all promises, covenants and agreements contained herein and in the Bonds and any Parity Bonds shall be taken as statements, promises, covenants and agreements of the District, and the Trustee assumes no responsibility or liability for the correctness of the same and makes no representations whatsoever as to the validity or sufficiency of this Indenture, the Bonds or any Parity Bonds, and shall incur no responsibility or liability in respect thereof, other than in connection with its express duties or obligations specifically set forth herein, in the Bonds and any Parity Bonds, or in the certificate of authentication assigned to or imposed upon the Trustee. The Trustee shall not have nor be under any responsibility or duty with respect to the issuance of the Bonds or any Parity Bonds for value. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own gross negligence or willful misconduct. The Trustee shall not be liable for any action taken or omitted by it or any of its officers, employees or agents in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. The Trustee shall not be liable for any actions taken or omitted to be taken, or any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was grossly negligent in ascertaining the pertinent facts.

The Trustee shall be entitled to request and receive written instructions from the District and/or Owners and shall have no responsibility or liability for any losses or damages of any nature that may arise from any action taken or not taken by the Trustee in accordance with the written direction of any such party. The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the written direction of the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds at the time Outstanding relating to the time, method and place Item Title: 12.1
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of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture.

The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of an Owner and/or the District, pursuant to the provisions of this Indenture, unless such party shall have offered to the Trustee security or indemnity (satisfactory to the Trustee in its sole and absolute discretion) against the costs, expenses and liabilities that may be incurred by it in compliance with such request or direction.

Neither the Trustee nor any of its directors, officers, employees, agents or affiliates shall be responsible for nor have any duty to monitor the performance or any action of the District or any of its directors, members, officers, agents, affiliates or employees, nor shall it have any liability in connection with the malfeasance or nonfeasance by such party. The Trustee may assume performance by all such persons of their respective obligations. The Trustee shall have no enforcement or notification obligations relating to breaches of representations or warranties of any other person. The Trustee shall be conclusively protected in acting upon any notice, resolution, request, consent, order, judgement, decree, certificate, report, Bond, Parity Bond or other paper or document signed or presented by the proper party or parties as provided hereunder, not only as to due execution, validity and effectiveness, but also as to the truth and accuracy of any information contained therein. The Trustee may, at the expense of the District, request, rely on and act in accordance with an officer’s certificates and/or opinions of counsel, and shall incur no liability and shall be fully protected in acting or refraining from acting in accordance with such officer’s certificates and opinions of counsel.

The Trustee shall not be bound to recognize any person as the Owner of a Bond or Parity Bond unless and until such Bond or Parity Bond is submitted for inspection, if required, and his title thereto is satisfactorily established to the Trustee, if disputed.

Whenever in the administration of its express obligations under this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, the Trustee may, at the expense of the District, request, rely on and act in accordance with an officer’s certificates and/or opinions of counsel (unless other evidence in respect thereof be herein specifically prescribed), and shall incur no liability and shall be fully protected in acting or refraining from acting in accordance with such officer’s certificates and opinions of counsel, but in its discretion the Trustee may but shall not be obligated to accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. It is understood and agreed that no such act shall broaden or imply the Trustee’s acceptance of a broadening of the scope of the Trustee’s duties and obligations hereunder unless the Trustee shall provide written acceptance thereof.

The Trustee shall have no duty or obligation whatsoever to enforce the collection of Special Taxes or other funds to be deposited with it hereunder, or as to the correctness of any amounts received, but its liability shall be limited to the proper accounting for such funds as it actually receives. No provision in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of its rights or powers.

The Trustee shall not be deemed to have knowledge of any default or event of default under this Indenture until an officer at the Trustee’s corporate trust office responsible for the administration of its duties hereunder shall have actual knowledge thereof or the Trustee shall have received written notice thereof at its corporate trust office.

Item Title: 12.1
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The Trustee shall have no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds and any Parity Bonds.

Before taking any action under Article VIII hereof the Trustee may require that indemnity and security satisfactory to the Trustee in its sole and exclusive discretion be furnished to it for and from any expenses and liabilities and to protect it against any liability it may incur hereunder.

The immunities extended to the Trustee also extend to its directors, officers, employees and agents (including its counsel).

The Trustee shall not be liable for any action taken or not taken by it in accordance with the direction of the Owners of 25% (or other percentage provided for herein) in aggregate principal amount of Bonds and Parity Bonds Outstanding relating to the exercise of any right, power or remedy available to the Trustee. In the event of conflicting instructions hereunder, the Trustee shall have the right to decide the appropriate course of action and will be protected in so doing.

The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty or in any way expand or impliedly expand the scope of the Trustee’s duties hereunder, and, with respect to such permissive rights, the Trustee shall not be answerable for other than its gross negligence or willful misconduct.

The Trustee may execute any of the trusts or powers hereof and perform any of its duties through attorneys, agents and receivers and shall not be answerable for the conduct of the same if appointed by it with reasonable care. The Trustee shall be entitled to rely on and shall not be liable for any action taken or omitted to be taken by the Trustee in accordance with the advice of counsel or other professionals retained or consulted by the Trustee.

The Trustee may become the Owner or pledgee of the Bonds and Parity Bonds with the same rights it would have if it were not Trustee.

The Trustee shall perform such duties and only such duties as are specifically set forth in this Indenture and no implied duties or obligations shall be read into this Indenture against the Trustee.

These duties shall be deemed purely ministerial in nature, and the Trustee shall not be liable except for the performance of such duties.

If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person.

The District shall, to the extent permitted by law, indemnify and save the Trustee and its officers, directors, agents, and employees harmless from and against (whether or not litigated) all claims, losses, costs, expenses, liability and damages, including legal fees and expenses, arising out of:
(i) the use, maintenance, condition or management of, or from any work or thing done on, the Project; (ii) any breach or default on the part of the District in the performance of any of its obligations under this Indenture and any other agreement made and entered into for purposes of the Bonds and Parity Bonds; (iii) any act of the City, the District or of any of its agents, contractors, servants, employees or licensees with respect to the Project; (iv) any act of any assignee of, or purchaser from, the City, the District or of any of its or their agents, contractors, servants, employees or licensees with respect to the Item Title: 12.1
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Project; (v) the construction or acquisition of the Project or the expenditure of Project Costs; (vi) the exercise and performance by the Trustee of its powers and duties hereunder or any related document; (vii) the sale of the Bonds and Parity Bonds and the carrying out of any of the transactions contemplated by the Bonds and Parity Bonds or this Indenture; or (viii) any untrue statement or alleged untrue statement of any material fact or omission or alleged omission to state a material fact necessary to make the statements made in light of the circumstances in which they were made, not misleading in any official statement or other disclosure document utilized in connection with the sale or marketing of the Bonds and Parity Bonds. The indemnification set forth in this Section shall extend to the Trustee’s officers, agents, employees, successors and assigns. No indemnification will be made under this Section or elsewhere in this Indenture or other agreements for willful misconduct or negligence by the Trustee, its officers, agents, employees, successors or assigns. The District’s obligations hereunder shall remain valid and binding notwithstanding maturity and payment of the Bonds and Parity Bonds, or the resignation or removal of the Trustee.

In accepting the trust hereby created, the Trustee acts solely as Trustee for the Owners and not in its individual capacity, and all persons, including, without limitation, the Owners, the District and the City, having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment, except as otherwise provided herein. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds and any Parity Bonds.

THE TRUSTEE MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS

OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS

FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY THE DISTRICT OF THE PROJECT, OR ANY PORTION THEREOF. In no event shall the Trustee be liable for incidental, indirect, punitive, special or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit), in connection with or arising out of the Project or this Indenture for the existence, furnishing, functioning or use and possession of the Project, irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care. Force majeure shall include, but not limited to, any act or provision of any present or future law or regulation or governmental authority; acts of God; earthquakes; fires; floods; wars; terrorism; civil or military disturbances; sabotage; epidemics; quarantine restrictions; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority or governmental actions; or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility, or other similar occurrences.

The Trustee shall be entitled to request and receive written instructions from the District or other parties and shall have no responsibility or liability for any losses or damages of any nature that may arise from any action taken or not taken by the Trustee in accordance with the written direction of the District or such other parties. The Trustee shall have the right to accept and act upon directions given pursuant to this Indenture and delivered using electronic notice; provided, however, that the District shall provide to the Trustee an incumbency certificate listing each Authorized Representative of the District with the authority to provide such directions and containing specimen signatures of such Item Title: 12.1
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authorized officers, which incumbency certificate shall be amended whenever a person is to be added or deleted from the listing. If the District elects to give the Trustee directions using electronic notice and the Trustee in its discretion elects to act upon such directions, the Trustee’s understanding of such directions shall be deemed controlling. The District understands and agrees that the Trustee cannot determine the identity of the actual sender of such directions and that the Trustee shall conclusively presume that directions that purport to have been sent by an authorized officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Representative of the District.

The District shall be responsible for ensuring that only an Authorized Representative of the District shall transmit such directions to the Trustee and that each Authorized Representative of the District treat applicable user and authorization codes, passwords and/or authentication keys with extreme care.

The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such directions, notwithstanding such directions conflict or are inconsistent with a subsequent written direction. The District agrees (i) to assume all risks arising out of the use of electronic notice to submit directions to the Trustee, including, without limitation, the risk of the Trustee acting on unauthorized directions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting directions to the Trustee and that there may be more secure methods of transmitting directions than the method(s) selected by the District; and (iii) that the security procedures (if any) to be followed in connection with its transmission of directions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances.

Section 7.5. Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the Trustee without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.

ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default. Any one or more of the following events shall constitute an “Event of Default”:
(a) default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond or Parity Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) default in the due and punctual payment of the interest on any Bond or Parity Bond when and as the same shall become due and payable; or
(c) except as described in subsections (a) or (b), default by the District in the observance of any of the agreements, conditions or covenants on its part contained in this Indenture, the Bonds or any Parity Bonds, which default continues for a period of 30 days after the District has been given notice in writing of such default by the Trustee or the Owners of twenty-five percent (25%) in aggregate principal amount of the Outstanding Bonds and Parity Bonds.

Item Title: 12.1
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The Trustee agrees to give notice to the Owners as soon as practicable upon the occurrence of an Event of Default under subsections (a) or (b) above and within 30 days of the Trustee’s actual knowledge of an Event of Default under subsection (c) above.

Section 8.2. Remedies of Owners. Upon the occurrence of an Event of Default, any Owner may pursue any available remedy at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Bonds and Parity Bonds, and to enforce any rights of the Trustee under or with respect to this Indenture, including:
(a) by mandamus or other suit or proceeding at law or in equity to enforce his rights against the District and any of the members, officers and employees of the District, and to compel the District or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in this Indenture; (b) by suit in equity to enjoin any actions or things that are unlawful or violate the rights of the Owners; or
(c) by a suit in equity to require the District and its members, officers and employees to account as the trustee of an express trust.

If an Event of Default shall have occurred and be continuing and if requested and directed so to do by the Owners of at least twenty-five percent (25%) in aggregate principal amount of Outstanding Bonds and Parity Bonds and if indemnified to its satisfaction, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article VIII, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Owners of the Bonds and Parity Bonds.

No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law.

Section 8.3. Application of Revenues and Other Funds After Default. All amounts received by the Trustee pursuant to any right given or action taken by the Owners under the provisions of this Indenture relating to the Bonds and Parity Bonds shall be applied by the Trustee in the following order upon presentation of the several Bonds and Parity Bonds:

First, to the payment of the costs, fees and expenses of the Trustee in declaring such Event of Default and in performing its duties and obligations hereunder, including reasonable compensation to its agents, attorneys and counsel;
Second, to the payment of the fees, costs and expenses of the Owners in declaring such Event of Default and in carrying out the provisions of this Article VIII, including reasonable compensation to its agents, attorneys and counsel, and to the payment of all other outstanding fees and expenses of the Trustee; and
Third, to the payment of the whole amount of interest on and principal of the Bonds and Parity Bonds then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds and Parity Item Title: 12.1
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Bonds; provided, however, that in the event that such amounts shall be insufficient to pay the full amount of such interest and principal, then such amounts shall be applied in the following order of priority:
(a) first to the payment of all installments of interest on the Bonds and Parity Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing; (b) second, to the payment of all installments of principal, including Sinking Fund Payments, of the Bonds and Parity Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing; and
(c) third, to the payment of interest on overdue installments of principal and interest on the Bonds and Parity Bonds on a pro rata basis based on the total amount then due and owing.

Section 8.4. Power of Trustee to Control Proceedings. In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its obligations hereunder, whether upon its own discretion or upon the request of the Owners of twenty-five percent (25%) in aggregate principal amount of the Bonds and Parity Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds and Parity Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majority in aggregate principal amount of the Outstanding Bonds and Parity Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other such litigation. Any suit, action or proceeding which any Owner of Bonds or Parity Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of Bonds and Parity Bonds similarly situated and the Trustee is hereby appointed (and the successive respective Owners of the Bonds and Parity Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney in fact of the respective Owners of the Bonds and Parity Bonds for the purposes of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Bonds and Parity Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact.

Section 8.5. Appointment of Receivers. Upon the occurrence of an Event of Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights and of the Owners of the Bonds and Parity Bonds under this Indenture, the Trustee shall be entitled, as a matter of right to which the District expressly agrees, to the appointment of a receiver or receivers of the Net Taxes and other amounts pledged hereunder, pending such proceedings, with such powers as the court making such appointment shall confer.

Section 8.6. Non-Waiver. Nothing in this Article VIII or in any other provision of this Indenture, or in the Bonds or the Parity Bonds, shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the interest on and principal of the Bonds and Parity Bonds to the respective Owners of the Bonds and Parity Bonds at the respective dates of maturity, as herein provided, or to pay the Trustee its fees and expenses as provided in Section 8.3 hereof, out of the Net Taxes and other moneys herein pledged for such payment.

Item Title: 12.1
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A waiver of any default or breach of duty or contract by the Trustee or any Owners shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission of the Trustee or any Owner of any of the Bonds or Parity Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy conferred upon the Trustee or the Owners by the Act or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Owners, as the case may be.

Section 8.7. Limitations on Rights and Remedies of Owners. No Owner of any Bond or Parity Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless: (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of all the Bonds and Parity Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity and security reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity and security shall have been made to, the Trustee.

Such notification, request, tender of indemnity and security and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds and Parity Bonds of any remedy hereunder; it being understood and intended that no one or more Owners of Bonds and Parity Bonds shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds and Parity Bonds.

The right of any Owner of any Bond and Parity Bond to receive payment of the principal of and interest and premium (if any) on such Bond and Parity Bond as herein provided or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture.

Section 8.8. Termination of Proceedings. In case any Owner shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case, the District, the Trustee and the Owners shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this Indenture, and all rights, remedies and powers of the Owners shall continue as if no such proceedings had been taken.

Item Title: 12.1
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ARTICLE IX

DEFEASANCE AND PARITY BONDS
Section 9.1. Defeasance. If the District shall pay or cause to be paid, or there shall otherwise be paid, to the Owner of an Outstanding Bond or Parity Bond the interest due thereon and the principal thereof, at the times and in the manner stipulated in this Indenture or any Supplemental Indenture, then the Owner of such Bond or Parity Bond shall cease to be entitled to the pledge of Net Taxes, and, other than as set forth below, all covenants, agreements and other obligations of the District to the Owner of such Bond or Parity Bond under this Indenture and any Supplemental Indenture relating to such Parity Bond shall thereupon cease, terminate and become void and be discharged and satisfied. In the event of a defeasance of all Outstanding Bonds and Parity Bonds pursuant to this Section, the Trustee shall execute and deliver to the District all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the District’s general fund all money or securities held by it pursuant to this Indenture which are not required for the payment of the principal of, premium, if any, and interest due on such Bonds and Parity Bonds.

Any Outstanding Bond or Parity Bond shall be deemed to have been paid within the meaning expressed in the first paragraph of this Section if such Bond or Parity Bond is paid in any one or more of the following ways:
(a) by paying or causing to be paid the principal of, premium, if any, and interest on such Bond or Parity Bond, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money that, together with the amounts then on deposit in the Special Tax Fund (exclusive of the Administrative Expense Account) and available for such purpose, is fully sufficient to pay the principal of, premium, if any, and interest on such Bond or Parity Bond, as and when the same shall become due and payable; or (c) by depositing with the Trustee or another escrow bank appointed by the District, in trust, federal securities described in subparagraph (1) of the definition of Authorized Investments, in which the District may lawfully invest its money, in such amount as will be sufficient, together with the interest to accrue thereon and moneys then on deposit in the Special Tax Fund (exclusive of the Administrative Expense Account) and available for such purpose, together with the interest to accrue thereon, to pay and discharge the principal of, premium, if any, and interest on such Bond or Parity Bond, as and when the same shall become due and payable.

If paid as provided above, then, at the election of the District, and notwithstanding that any Outstanding Bonds and Parity Bonds shall not have been surrendered for payment, all obligations of the District under this Indenture and any Supplemental Indenture with respect to such Bond or Parity Bond shall cease and terminate, except for the obligation of the Trustee to pay or cause to be paid to the Owners of any such Bond or Parity Bond not so surrendered and paid all sums due thereon, and except for the covenants of the District contained in Section 5.2(f) or any covenants in a Supplemental Indenture relating to compliance with the Code. Notice of such election shall be filed with the Trustee not less than ten days prior to the proposed defeasance date, or such shorter period of time as may be acceptable to the Trustee. In connection with a defeasance under (c) above, there shall be provided to the District a verification report from an independent nationally recognized certified public accountant stating its opinion as to the sufficiency of the moneys or securities deposited with the Trustee or the escrow bank to pay and discharge the principal of, premium, if any, and interest on all Outstanding Item Title: 12.1
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Bonds and Parity Bonds to be defeased in accordance with this Section, as and when the same shall become due and payable, and an opinion of Bond Counsel (which may rely upon the opinion of the certified public accountant) to the effect that the Bonds or Parity Bonds being defeased have been legally defeased in accordance with this Indenture and any applicable Supplemental Indenture.

Upon a defeasance, the Trustee, upon request of the District, shall release the rights of the Owners of such Bonds and Parity Bonds which have been defeased under this Indenture and any Supplemental Indenture and execute and deliver to the District all such instruments as may be desirable to evidence such release, discharge and satisfaction. In the case of a defeasance hereunder of all Outstanding Bonds and Parity Bonds, the Trustee shall pay over or deliver to the District any funds held by the Trustee at the time of a defeasance, which are not required for the purpose of paying and discharging the principal of or interest on the Bonds and Parity Bonds when due. The Trustee shall, at the written direction of the District, mail, first class, postage prepaid, a notice to the Owners whose Bonds or Parity Bonds have been defeased, in the form directed by the District, stating that the defeasance has occurred.

Section 9.2. Conditions for the Issuance of Parity Bonds and Other Additional Indebtedness. The District may at any time after the issuance and delivery of the Bonds hereunder issue Parity Bonds payable from the Net Taxes and other amounts deposited in the Special Tax Fund (other than in the Administrative Expense Account therein) and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds theretofore issued hereunder or under any Supplemental Indenture; provided, however, Parity Bonds may only be issued for the purpose of refunding all or a portion of the Bonds or Parity Bonds then Outstanding subject to the following specific conditions, which are hereby made conditions precedent to the issuance of any such Parity Bonds:
(a) The District shall be in compliance with all covenants set forth in this Indenture and any Supplemental Indenture then in effect and a certificate of the District to that effect shall have been filed with the Trustee; provided, however, that Parity Bonds may be issued notwithstanding that the District is not in compliance with all such covenants so long as immediately following the issuance of such Parity Bonds the District will be in compliance with all such covenants. (b) The issuance of such Parity Bonds shall have been duly authorized pursuant to the Act and all applicable laws, and the issuance of such Parity Bonds shall have been provided for by a Supplemental Indenture duly authorized, executed and delivered by the District that shall specify the following:
(1) the purpose for which such Parity Bonds are to be issued and the fund or funds into which the proceeds thereof are to be deposited;
(2) the authorized principal amount of such Parity Bonds; (3) the date and the maturity date or dates of such Parity Bonds; provided that:
(i) each maturity date shall fall on a September 1; (ii) all such Parity Bonds of like maturity shall be identical in all respects, except as to number; (iii) fixed serial maturities or Sinking Fund Payments, or any combination thereof, shall be established to provide for the retirement of all such Parity Bonds on or before their respective maturity dates; and (iv) the maturity of such Parity Bonds to be issued shall not exceed the maturity of the Bonds and any Parity Bonds being refunded; Item Title: 12.1
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(4) the description of the Parity Bonds, the place of payment thereof and the procedure for execution and authentication;
(5) the denominations and method of numbering of such Parity Bonds; (6) the amount and due date of each mandatory Sinking Fund Payment, if any, for such Parity Bonds;
(7) the amount, if any, to be deposited from the proceeds of such Parity Bonds in the Reserve Account of the Special Tax Fund to increase the amount therein to the Reserve Requirement;
(8) the form of such Parity Bonds; and
(9) such other provisions as are necessary or appropriate and not inconsistent with this Indenture.
(c) The District shall have received the following documents or money or securities, all of such documents dated or certified, as the case may be, as of the date of delivery of such Parity Bonds by the Trustee (unless the Trustee shall be directed by the District to accept any of such documents bearing a prior date):
(1) a certified resolution of the City Council, acting as the legislative body of the District, authorizing the issuance of such Parity Bonds; (2) a written request of the District as to the delivery of such Parity Bonds; (3) an opinion of Bond Counsel and/or general counsel to the District substantially to the effect that: (i) the District has the right and power under the Act to execute and deliver the Supplemental Indenture relating to such Parity Bonds, and such Supplemental Indenture has been duly and lawfully executed by the District, and this Indenture and such Supplemental Indenture are in full force and effect and are valid and binding upon the District and enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights); (ii) this Indenture creates the valid pledge that it purports to create of the Net Taxes and other amounts as provided in this Indenture, subject to the application thereof to the purposes and on the conditions permitted by this Indenture; and (iii) such Parity Bonds are valid and binding limited obligations of the District, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights) and the terms of this Indenture and the Supplemental Indenture executed and delivered in connection with such Parity Bonds and are entitled to the benefits of this Indenture and such Supplemental Indenture, and such Parity Bonds have been duly and validly authorized and issued in accordance with the Act (or other applicable laws) and this Indenture and such Supplemental Indenture;
(4) a certificate of the District containing such statements as may be reasonably necessary to show compliance with the requirements of this Indenture; (5) a certificate of an Independent Financial Consultant certifying that in each Bond Year the Annual Debt Service on the Bonds and Parity Bonds to remain Outstanding following Item Title: 12.1
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the issuance of the Parity Bonds proposed to be issued is less than the Annual Debt Service on the Bonds and Parity Bonds Outstanding prior to the issuance of such Parity Bonds; and (6) such further documents, money and securities as are required by the provisions of this Indenture and the Supplemental Indenture providing for the issuance of such Parity Bonds.

ARTICLE X

MISCELLANEOUS
Section 10.1. Cancellation of Bonds and Parity Bonds. All Bonds and Parity Bonds surrendered to the Trustee for payment upon maturity or for redemption shall be upon payment therefor, and any Bond or Parity Bond purchased by the District as authorized herein and delivered to the Trustee for such purpose shall be cancelled forthwith and shall not be reissued. The Trustee shall destroy such Bonds and Parity Bonds, as provided by law, and, upon request of the District, furnish to the District a certificate of such destruction.

Section 10.2. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Indenture to be signed or executed by Owners may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Owners in person or by their attorneys appointed by an instrument in writing for that purpose, or by the bank, trust company or other depository for such Bonds. Proof of the execution of any such instrument, or of any instrument appointing any such attorney, and of the ownership of Bonds or Parity Bonds shall be sufficient for the purposes of this Indenture (except as otherwise herein provided), if made in the following manner:
(a) The fact and date of the execution by any Owner or his or her attorney of any such instrument, and of any instrument appointing any such attorney, may be proved by a signature guarantee of any bank or trust company located within the United States of America. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such signature guarantee shall also constitute sufficient proof of his authority.
(b) As to any Bond or Parity Bond, the person in whose name the same shall be registered in the Bond Register shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any such Bond or Parity Bond, and the interest thereon, shall be made only to or upon the order of the registered Owner thereof or his or her legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond or Parity Bond and the interest thereon to the extent of the sum or sums to be paid.

Neither the District nor the Trustee shall be affected by any notice to the contrary.

Nothing contained in this Indenture shall be construed as limiting the Trustee or the District to such proof, it being intended that the Trustee or the District may accept any other evidence of the matters herein stated that the Trustee or the District may deem sufficient. Any request or consent of the Owner of any Bond or Parity Bond shall bind every future Owner of the same Bond or Parity Bond in respect of anything done or suffered to be done by the Trustee or the District in pursuance of such request or consent.

Item Title: 12.1
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Section 10.3. Unclaimed Moneys. Anything in this Indenture to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Outstanding Bonds and Parity Bonds that remain unclaimed for two years after the date when such Outstanding Bonds or Parity Bonds have become due and payable, if such money was held by the Trustee at such date, or for two years after the date of deposit of such money if deposited with the Trustee after the date when such Outstanding Bonds or Parity Bonds become due and payable, shall be repaid by the Trustee to the District, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the District for the payment of such Outstanding Bonds or Parity Bonds; provided, however, that, before being required to make any such payment to the District, the Trustee, at the expense of the District, shall cause to be mailed by first-class mail, postage prepaid, to the registered Owners of such Outstanding Bonds or Parity Bonds at their addresses as they appear on the registration books of the Trustee a notice that said money remains unclaimed and that, after a date named in said notice that shall not be less than 30 days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the District.

Section 10.4. Provisions Constitute Contract; Governing Law; Venue. The provisions of this Indenture shall constitute a contract between the District and the Owners and the provisions hereof shall be governed by and construed in accordance with the laws of the State of California. The parties hereby (i) irrevocably submit to the exclusive jurisdiction of any federal or state court sitting in the State of California, (ii) waive any objection to laying of venue in any such action or proceeding in such courts, and (iii) waive any objection that such courts are in inconvenient forum or do not have jurisdiction over any party.

In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and, should said suit, action or proceeding be abandoned, or be determined adversely to the Owners or the Trustee, then the District, the Trustee and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken.

After the issuance and delivery of the Bonds, this Indenture shall be irrepealable, but shall be subject to modifications to the extent and in the manner provided in this Indenture, but to no greater extent and in no other manner.

Section 10.5. Future Contracts. Nothing herein contained shall be deemed to restrict or prohibit the District from making contracts or creating bonded or other indebtedness payable from a pledge of the Net Taxes that is subordinate to the pledge hereunder, or which is payable from the general fund of the District or from taxes or any source other than the Net Taxes and other amounts pledged hereunder.

Section 10.6. Further Assurances. The District will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the Owners of the Bonds or any Parity Bonds the rights and benefits provided in this Indenture.

Section 10.7. Entire Agreement; Severability. This Indenture and the exhibits hereto set forth the entire agreement and understanding of the parties related to this transaction and supersedes all prior agreements and understandings, oral or written. If any covenant, agreement or provision, or Item Title: 12.1
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any portion thereof, contained in this Indenture, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Indenture and the application of any such covenant, agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable and shall not be affected thereby, and this Indenture, the Bonds and any Parity Bonds issued pursuant hereto shall remain valid and the Owners shall retain all valid rights and benefits accorded to them under the laws of the State of California.

Section 10.8. Notices. Any notices required to be given to the District with respect to the Bonds or this Indenture shall be mailed, first class, postage prepaid, or personally delivered to the City Manager of the City of Menifee, 29844 Haun Road, Menifee, California 92586, all notices to the Trustee in its capacity as Trustee shall be mailed, first class, postage prepaid, or personally delivered to the Trustee, Wilmington Trust, National Association, 650 Town Center Drive, Suite 800, Costa Mesa, California 92626.

Item Title: 12.1
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IN WITNESS WHEREOF, COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH) OF THE CITY OF MENIFEE has caused this Indenture to be signed by an Authorized Representative of the District and Wilmington Trust, National Association in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by its officers identified below, all as of the day and year first above written.

COMMUNITY FACILITIES DISTRICT NO. 2023-1
(ROCKPORT RANCH) OF THE CITY OF MENIFEE
By:

Mayor of the City of Menifee, acting as the
legislative body of Community Facilities District
No. 2023-1 (Rockport Ranch) of the City of
Menifee
ATTEST:

Acting City Clerk of the City of Menifee,
acting as the legislative body of
Community Facilities District No. 2023-1
(Rockport Ranch) of the City of Menifee

WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee
By:

Authorized Signatory
Item Title: 12.1
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EXHIBIT A

FORM OF SPECIAL TAX BOND

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

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

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

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

R-____ $___________

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

COUNTY OF RIVERSIDE
COMMUNITY FACILITIES DISTRICT NO. 2023-1
(ROCKPORT RANCH) OF THE CITY OF MENIFEE
SPECIAL TAX BOND, SERIES 2024
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
___% September 1, 20__ ______, 2024 _______
REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: __________________ DOLLARS
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ROCKPORT RANCH) OF THE CITY OF MENIFEE (the “District”) which was formed by the City of Menifee (the “City”) and is situated in the County of Riverside, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from certain amounts held under the Indenture (as hereinafter defined), to the Owner named above, or registered assigns, on the Maturity Date set forth above, unless redeemed prior thereto as hereinafter provided, the Principal Amount set forth above, and to pay interest on such Principal Amount from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication hereof, unless: (i) the date of authentication is an Interest Payment Date, in which event interest shall be payable from such date of authentication; (ii) the date of authentication is after a Record Date (as hereinafter defined) but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication; or (iii) the date of authentication is prior to the close of business on the first Record Date, in which event interest shall be payable from the Dated Date set forth above.

Item Title: 12.1
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Notwithstanding the foregoing, if at the time of authentication of this Bond interest is in default, interest on this Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment, interest on this Bond shall be payable from the Dated Date set forth above. Interest will be paid semiannually on March 1, 2025 and each March 1 and September 1 thereafter (each an “Interest Payment Date”), at the Interest Rate set forth above, until the Principal Amount hereof is paid or made available for payment.

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

This Bond is one of a duly authorized issue of “Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee Special Tax Bonds, Series 2024” (the “Bonds”) issued in the aggregate principal amount of $______ pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Section 53311 et seq. of the California Government Code (the “Act”) for the purpose of financing public improvements, funding a reserve account, funding capitalized interest on the Bonds and paying certain costs related to the issuance of the Bonds. The issuance of the Bonds and the terms and conditions thereof are provided for by a resolution adopted by the City Council of the City, acting in its capacity as the legislative body of the District (the “Legislative Body”), on November 6, 2024, and a Bond Indenture executed in connection therewith dated as of December 1, 2024 (the “Indenture”), by and between the District and the Trustee, and this reference incorporates the Indenture herein, and by acceptance hereof the Owner of this Bond assents to said terms and conditions. The Indenture is adopted under and this Bond is issued under, and both are to be construed in accordance with, the laws of the State of California.

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

The Bonds may be redeemed at the option of the District from any source of funds on any Interest Payment Date on or after September 1, 20__, in whole or in part, from such maturities as are selected by the District and by lot within a maturity, at the following redemption prices, expressed as Item Title: 12.1
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a percentage of the principal amount to be redeemed, together with accrued interest to the date of redemption:

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

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

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

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

Item Title: 12.1
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The Bonds maturing on September 1, 20__ (the “20__ Term Bonds”) shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed 20__ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:

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

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

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

The Bonds are subject to special mandatory redemption as a whole, or in part on a pro rata basis among maturities and by lot within a maturity, on any Interest Payment Date on or after March 1, 2025, and shall be redeemed by the Trustee, from Prepayments deposited to the Redemption Account plus amounts transferred from the Reserve Account in connection with such transfers, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

Item Title: 12.1
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Redemption Date Redemption Price
Any Interest Payment Date from September 1, 20__ through March 1, 20__ [103% September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100] Notice of redemption with respect to the Bonds to be redeemed shall be mailed to the registered owners thereof not less than 30 nor more than 45 days prior to the redemption date by first class mail, postage prepaid, to the addresses set forth in the registration books; provided, however, so long as the Bonds are registered in the name of the Nominee, such notice shall be given in such manner as complies with the requirements of the Depository. Neither a failure of the Owner hereof to receive such notice nor any defect therein will affect the validity of the proceedings for redemption. All Bonds or portions thereof so called for redemption will cease to accrue interest on the specified redemption date, provided that funds for the redemption are on deposit with the Trustee on the redemption date. Thereafter, the registered owners of such Bonds shall have no rights except to receive payment of the redemption price upon the surrender of the Bonds.

Menifee City CouncilNovember 6, 2024

Menifee City Council
November 6, 2024