Agenda packet, first session — Menifee City Council, April 2, 2025 (part 7 of 9)

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of CFD No. 2025-4 in accordance with the Rate and Method of Apportionment (the “RMA”) as described in Exhibit C to the Resolution of Intention, which is included as an appendix to the attached Public Hearing Report.

The Resolution of Intention called for a public hearing to be held on April 2, 2025, for the City Council to formally consider the approval of the formation of CFD No. 2025-4 and the approval of the levy of the special taxes within CFD No. 2025-4. Notice of the public hearing was published in the Press-Enterprise and mailed to the Developer in accordance with the Mello-Roos Act.

In connection with the public hearing, Spicer Consulting Group has prepared a Public Hearing Report that describes and analyzes the facilities to be financed by the CFD and the estimated costs of such facilities. Following the close of the public hearing, the City Council will be asked to adopt the Resolution of Formation and the Resolution Determining the Necessity to Incur Debt which, together, approve the formation of the CFD and the levy of the special taxes within the CFD in accordance with the RMA and determines the necessity for the CFD to issue bonds in an amount not to exceed $11,000,000. Such Resolutions call for an election to submit to the qualified voters in the CFD ballot measures on the approval of the special taxes, the issuance of the bonds and an appropriations limit for the CFD.

In addition, the Resolution of Formation, approves the execution and delivery of the following agreements in the forms presented to the City Council: (i) the Acquisition, Construction and Funding Agreement with the Developer (the “Funding Agreement”); and (ii) the Joint Community Facilities Agreement with the Developer and Eastern Municipal Water District (“Water District JCFA”). The Funding Agreement sets forth the terms, among others, pursuant to which the CFD will finance improvements to be constructed by the Developer. In accordance with the Mello- Roos Act, the approval and execution of the Water District JCFA allows for the CFD to finance improvements to be owned and operated by Eastern Municipal Water District that benefit the development within the CFD.

On file with the City Clerk is a Certificate of the Registrar of Voters of Riverside County certifying that there are no registered voters residing within the boundaries of the CFD. Accordingly, under the Mello-Roos Act, only landowners in the CFD are eligible to vote at the election with each owner having one vote for each acre (or portion thereof) that they own within the CFD. The landowner in the CFD has executed a consent and waiver of certain election procedures for the election within the CFD, including certain timing requirements with respect to the election in accordance with the Mello-Roos Act. Accordingly, if the City Council approves the Resolution of Formation and the Resolution Determining the Necessity to Incur Debt, the City Clerk will conduct the election. The City Clerk will announce the elections results and the City Council will be asked to adopt the Resolution Certifying the Election Results. Based on certification that two- thirds of the votes cast are in favor of the propositions voted upon, the Resolution Certifying the Election Results directs the City Clerk to record a notice of special tax lien on the property within the CFD. The City Council will then be asked to introduce an ordinance authorizing the levy of the special tax within the CFD in accordance with the RMA.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 2

Menifee Mayor and City Council
April 2, 2025
Page
819 of 1198

City of Menifee Staff Report
Proposed Formation of CFD 2025-4, Heritage Village
April 2, 2025

Page 3 of 3 ends

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STRATEGIC PLAN OBJECTIVE
Regular City Business

FISCAL IMPACT
The CFD will be required to annually levy special taxes on all the taxable property within the CFD in order to pay for the costs of facilities, debt service on bonds and administration of the CFD.

Any bonds issued by the CFD are not obligations of the City and will be secured solely by the special taxes levied in the CFD. The Developer has made a deposit to pay for the costs of forming the CFD. The Funding Agreement includes a provision for reimbursement of most of these costs to the Developer if and when bonds are issued for the CFD.

ATTACHMENTS

1. Resolution of Formation CFD 2025-4

2. Resolution Of Necessity to Incur Debt CFD 2025-4

3. Resolution Certifying Election Results CFD 2025-4

4. Public Hearing Report – CFD 2025-4

5. Ordinance CFD 2025-4

6. Acquisition, Construction and Funding Agreement CFD 2025-4

7. Joint Community Facilities Agreement (EMWD) CFD 2025-4

8. Registrar of Voters Certificate CFD 2025-4
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 3

Menifee Mayor and City Council
April 2, 2025
Page
820 of 1198

4928-9460-3546v4/200299-0027
RESOLUTION NO. 25-__

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE
ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2025-4 OF THE

CITY OF MENIFEE (HERITAGE VILLAGE), AUTHORIZING THE LEVY OF A

SPECIAL TAX THEREIN, CALLING AN ELECTION AND APPROVING AND

AUTHORIZING CERTAIN ACTIONS RELATED THERETO
WHEREAS, the City Council (the “City Council”) of the City of Menifee (the “City”) has heretofore adopted Resolution No. 25-1539 stating its intention to form Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee (“Community Facilities District No. 2025-4” or the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”); and
WHEREAS, a copy of Resolution No. 25-1539 setting forth a description of the proposed boundaries of Community Facilities District No. 2025-4, the facilities and incidental expenses to be financed by the District and the rate and method of apportionment of the special tax proposed to be levied within the District is on file with the City Clerk; and WHEREAS, notice was published and mailed to all landowners of the land proposed to be included within the District as required by law relative to the intention of this City Council to form proposed Community Facilities District No. 2025-4 and to levy a special tax (the “Special Tax”) and to incur bonded indebtedness in the maximum principal amount of $11,000,000 therein to finance the facilities and incidental expenses described in Resolution No. 25-1539; and
WHEREAS, on April 2, 2025, this City Council conducted a noticed public hearing as required by law relative to the proposed formation of Community Facilities District No. 2025-4, the levy of the Special Tax therein and the issuance of bonded indebtedness by the District; and WHEREAS, at the April 2, 2025, public hearing there was filed with this City Council a report containing a description of the facilities necessary to meet the needs of the District and an estimate of the cost of such facilities as required by Section 53321.5 of the Act (the “Engineer’s Report”); and
WHEREAS, at the April 2, 2025, public hearing all persons desiring to be heard on all matters pertaining to the formation of Community Facilities District No. 2025-4, the levy of the Special Tax and the issuance of bonded indebtedness were heard and full and fair hearings were held; and
WHEREAS, following the public hearing, this City Council has determined to authorize the formation of the District to finance the types of facilities (the “Facilities”) and the incidental expenses (the “Incidental Expenses”) set forth in Exhibit A hereto, which are described in more detail in the Engineer’s Report; and
WHEREAS, at the public hearing evidence was presented to this City Council on the matters before it, and the proposed Special Tax to be levied within the District was not precluded by a majority protest of the type described in Section 53324 of the Act, and this City Council at the conclusion of the hearing was fully advised as to all matters relating to the Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 4

Menifee Mayor and City Council
April 2, 2025
Page
821 of 1198

Resolution Establishing CFD No. 2025-4 (Heritage Village) 2 4928-9460-3546v4/200299-0027
formation of the District, the levy of the Special Tax and the issuance of bonded indebtedness therein; and
WHEREAS, this City Council has determined, based on a Certificate of Registrar of Voters of the County of Riverside on file in the office of the City Clerk, that no registered voters have been residing in the proposed boundaries of Community Facilities District No. 2025-4 for each of the 90 days prior to April 2, 2025, and that the qualified electors in Community Facilities District No. 2025-4 are the landowners within the District; and WHEREAS, on the basis of all of the foregoing, this City Council has determined to proceed with the establishment of Community Facilities District No. 2025-4 and to call an election therein to authorize (i) the levy of the Special Tax pursuant to the rate and method of apportionment of the special tax, as set forth in Exhibit C to Resolution No. 25-1539 (the “Rate and Method”), (ii) the issuance of bonds to finance the Facilities and Incidental Expenses, and (iii) the establishment of an appropriations limit for Community Facilities District No. 2025-4; and WHEREAS, in order to facilitate the funding of the Facilities, the legislative body of the District desires to enter into an Acquisition, Construction and Funding Agreement (the “Agreement”) with Lennar Homes of California, LLC, a California limited liability company (the “Developer”), and the form of the Agreement is on file with the City Clerk; and WHEREAS, in connection with the proposed formation of the District, the City proposes to enter into a Joint Community Facilities Agreement with Eastern Municipal Water District (the “Water District”) and the Developer, relating to certain facilities proposed to be financed by the District and owned and operated by the Water District (the “JCFA”), and the form of the JCFA is on file with the City Clerk.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee does hereby determine and order as follows:

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

Section 2.A community facilities district to be designated “Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee” is hereby established pursuant to the Act. The City Council hereby finds and determines that all prior proceedings taken with respect to the establishment of the District were valid and in conformity with the requirements of law, including the Act. This finding is made in accordance with the provisions of Section 53325.1(b) of the Act.

Section 3.The boundaries of Community Facilities District No. 2025-4 are established as shown on the map designated “Community Facilities District No. 2025-4 (Heritage Village) 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. 95 Page No. 49 on February 26, 2025 as Instrument No. 2025-0057069.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 5

Menifee Mayor and City Council
April 2, 2025
Page
822 of 1198

Resolution Establishing CFD No. 2025-4 (Heritage Village) 3 4928-9460-3546v4/200299-0027
Section 4.The types of Facilities and Incidental Expenses authorized to be provided for Community Facilities District No. 2025-4 are those set forth in Exhibit A attached hereto. The estimated cost of the Facilities and Incidental Expenses to be financed is set forth in the Engineer’s Report, which estimates may change as the Facilities are designed and bid for construction and acquisition, as applicable.

The City is authorized by the Act to contribute revenue to, or to construct or acquire the Facilities, all in accordance with the Act. The City Council finds and determines that the proposed Facilities are necessary to meet the increased demand that will be placed upon local agencies and public infrastructure as a result of new development within the District and that the Facilities to be financed, including those to be financed pursuant to the JCFA to be entered into with the Water District, benefit residents of the City and the future residents of the District.

Section 5.Except where funds are otherwise available, it is the intention of this City Council, subject to the approval of the eligible voters of the District, to levy annually a Special Tax at the rates set forth in the Rate and Method on all non-exempt property within the District sufficient to pay for (i) the Facilities, (ii) the principal and interest and other periodic costs on the bonds proposed to be issued to finance the Facilities and Incidental Expenses, including the establishment and replenishment of reserve funds, any remarketing, credit enhancement and liquidity facility fees and other expenses of the type permitted by Section 53345.3 of the Act; and (iii) the Incidental Expenses. The District expects to incur, and in certain cases has already incurred, Incidental Expenses in connection with the creation of the District, the issuance of bonds, the levying and collecting of the Special Tax, the completion and inspection of the Facilities and the annual administration of the bonds and the District. The Rate and Method is described in detail in Exhibit C to Resolution No. 25-1539 and incorporated herein by this reference, and the City Council hereby finds that the Rate and Method contains sufficient detail to allow each landowner within the District to estimate the maximum amount that may be levied against each parcel. As described in greater detail in the Engineer’s Report, which is incorporated by reference herein, the Special Tax is based on the expected demand that each parcel of real property within Community Facilities District No. 2025-4 will place on the Facilities and on the benefit that each parcel will derive from the right to access the Facilities and, accordingly, is hereby determined to be reasonable. The Special Tax shall be levied on each assessor’s parcel in accordance with the Rate and Method provided, however, that the Special Tax shall not be levied after Fiscal Year 2070-71. The Special Tax is apportioned to each parcel on the foregoing bases pursuant to Section 53325.3 of the Act and such Special Tax is not on or based upon the ownership of real property or the assessed value of real property.

If Special Taxes of the District are levied against any parcel used for private residential purposes, (i) the maximum Special Tax rate shall be specified as a dollar amount that shall be calculated and established not later than the date on which the parcel is first subject to the Special Tax because of its use for private residential purposes and shall not be increased over time except as authorized under the Rate and Method, (ii) the Special Tax shall not be levied after Fiscal Year 2070-71, and (iii) under no circumstances will the Special Tax levied Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 6

Menifee Mayor and City Council
April 2, 2025
Page
823 of 1198

Resolution Establishing CFD No. 2025-4 (Heritage Village) 4 4928-9460-3546v4/200299-0027
against any such parcel used for private residential uses be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the District by more than ten percent above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults.

The City Manager of the City of Menifee, or his or her designee, will be responsible for preparing annually, or authorizing a designee to prepare, a current roll of special tax levy obligations by assessor’s parcel number and will be responsible for estimating future special tax levies pursuant to Section 53340.2 of the Act.

Section 6.In the event that a portion of the property within Community Facilities District No. 2025-4 shall become for any reason exempt, wholly or partially, from the levy of the Special Tax specified in the Rate and Method, or in the event of delinquencies in the payment of Special Taxes levied, the City Council shall, on behalf of Community Facilities District No. 2025-4, increase the levy to the extent necessary and permitted by law and these proceedings upon the remaining property within Community Facilities District No. 2025-4 that is not exempt or delinquent in order to yield the required debt service payments on any outstanding bonds of the District, or to prevent the District from defaulting on any of its other obligations or liabilities; provided, however, under no circumstances will the Special Tax levied against any parcel used for private residential uses be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the District by more than ten percent above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. The amount of the Special Tax will be set in accordance with the Rate and Method. The obligation to pay Special Taxes may be prepaid only as set forth in Section G of the Rate and Method.

Section 7.Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the Streets and Highways Code, a continuing lien to secure each levy of the Special Tax shall attach to all non-exempt real property in the District and this lien shall continue in force and effect until the Special Tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the Special Tax by the District ceases.

Section 8.Consistent with Section 53325.6 of the Act, the City Council finds and determines that the land within Community Facilities District 2025-4, if any, devoted primarily to agricultural, timber or livestock uses and being used for the commercial production of agricultural, timber or livestock products is contiguous to other land within Community Facilities District 2025-4 and will be benefited by the Facilities proposed to be provided within Community Facilities District No. 2025-4.

Section 9.It is hereby further determined that there is no ad valorem property tax currently being levied on property within proposed Community Facilities District No. 2025- 4 for the exclusive purpose of paying the principal of or interest on bonds or other indebtedness incurred to finance the construction of capital facilities that provide the same services to the territory of Community Facilities District No. 2025-4 as are proposed to be provided by the Facilities to be financed by Community Facilities District No. 2025-4.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 7

Menifee Mayor and City Council
April 2, 2025
Page
824 of 1198

Resolution Establishing CFD No. 2025-4 (Heritage Village) 5 4928-9460-3546v4/200299-0027
Section 10.Written protests against the establishment of the District have not been filed by one-half or more of the registered voters within the boundaries of the District or by the property owners of one-half (1/2) or more of the area of land within the District. The City Council hereby finds that the proposed Special Tax has not been precluded by a majority protest pursuant to Section 53324 of the Act.

Section 11.An election is hereby called for Community Facilities District No. 2025-4 on the propositions of levying the Special Tax on the property within Community Facilities District No. 2025-4 and establishing an appropriations limit for the District pursuant to Section 53325.7 of the Act and shall be consolidated with the election on the proposition of incurring bonded indebtedness, pursuant to Sections 53351 and 53353.5 of the Act. The language of the propositions to be placed on the ballot is attached hereto as Exhibit B.

Section 12.The date of the election for Community Facilities District No. 2025-4 on the propositions of incurring the bonded indebtedness, authorizing the levy of the Special Tax and establishing an appropriations limit for the District shall be April 2, 2025, or such later date as is consented to by the City Clerk or Deputy City Clerk (referred to herein as the “City Clerk”) of the City of Menifee; provided that, if the election is to take place sooner than 90 days after April 2, 2025, then the unanimous written consent of each qualified elector within the District to such election date must be obtained. The polls shall be open for said election immediately following the close of the public hearing on April 2, 2025. The election shall be conducted by the City Clerk. Except as otherwise provided by the Act, the election shall be conducted in accordance with the provisions of law regulating elections of the City of Menifee insofar as such provisions are determined by the City Clerk to be applicable. The City Clerk is authorized to conduct the election following the adoption of this resolution, and all ballots shall be received by, and the City Clerk shall close the election by, 11:00 p.m. on the election day; provided the election shall be closed at such earlier time as all qualified electors have voted as provided in Section 53326(d) of the Act.

Pursuant to Section 53326 of the Act, the ballots for the special election shall be distributed in person, or by mail with return postage prepaid, to the qualified electors within Community Facilities District No. 2025-4. The City Clerk has secured a certificate from the Registrar of Voters of the County of Riverside certifying that there were no registered voters within the District as of February 19, 2025. Accordingly, since there were fewer than 12 registered voters within the District for each of the 90 days preceding April 2, 2025, the qualified electors shall be the landowners within the District and each landowner, or the authorized representative thereof, shall have one vote for each acre or portion thereof that such landowner owns within Community Facilities District No. 2025-4, as provided in Section 53326 of the Act. The landowner within the District has executed and delivered a waiver of certain election law requirements and consenting to the holding of the election on April 2, 2025, which waiver is on file with the City Clerk.

Section 13.The preparation of the Engineer’s Report is hereby ratified. The Engineer’s Report, as submitted, is hereby approved and was made a part of the record of the public hearing regarding the formation of Community Facilities District No. 2025-4. The Engineer’s Report is ordered to be kept on file with the transcript of these proceedings and open for public inspection.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 8

Menifee Mayor and City Council
April 2, 2025
Page
825 of 1198

Resolution Establishing CFD No. 2025-4 (Heritage Village) 6 4928-9460-3546v4/200299-0027
Section 14.The District may accept advances of funds or work-in-kind from any source, including, but not limited to, private persons or private entities, for any authorized purpose, including, but not limited to, paying any cost incurred in creating Community Facilities District No. 2025-4. The District may enter into an agreement with the person or entity advancing the funds or work-in-kind, to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the City Council, with or without interest.

Section 15.The form of the Agreement on file with the City Clerk is approved as to form, and each of the City Manager, Chief Financial Officer, and their written designees, is authorized to execute the Agreement in substantially the form on file with the City Clerk, together with such changes as are approved by the officer executing the same, with the approval of such changes to be conclusively evidenced by the execution and delivery thereof.

Section 16.The form of the JCFA on file with the City Clerk is approved as to form, and each of the City Manager, Chief Financial Officer, and their written designees, is authorized to execute the JCFA in substantially the form on file with the City Clerk, together with such changes as are approved by the officer executing the same, with the approval of such changes to be conclusively evidenced by the execution and delivery thereof.

Section 17.This Resolution shall be effective upon its adoption.

PASSED, APPROVED AND ADOPTED this the 2nd day of April, 2025. ___________________________
Ricky Estrada, Mayor
Attest:
___________________________
Stephanie Roseen, City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 9

Menifee Mayor and City Council
April 2, 2025
Page
826 of 1198

A-1
4928-9460-3546v4/200299-0027

EXHIBIT A
Types of Facilities
to Be Financed by Community
Facilities District No. 2025-4 (Heritage Village) of the City of Menifee The proposed types of public facilities and expenses to be financed by the District include:

The construction, purchase, modification, expansion, rehabilitation and/or improvement of (i) drainage, library, park, street, roadway, traffic signal and streetlights, administration and general government facilities, fire and public safety facilities, landscaping and trail improvements, and other public facilities of the City, including the foregoing public facilities that are included in the City’s fee programs with respect to such facilities and authorized to be financed under the Mello-Roos Community Facilities Act of 1982, as amended (the “City Facilities”); (ii) water and sewer facilities including the acquisition of capacity in the sewer system and/or water system of Eastern Municipal Water District that are included in Eastern Municipal Water District’s water and sewer capacity and connection fee programs (the “Water District Facilities”); and (iii) dry utilities (the “Utilities” and together, with the City Facilities and the Water District Facilities, the “Facilities”) all appurtenances and appurtenant work in connection with the foregoing Facilities, including the cost of engineering, planning, designing, materials testing, coordination, construction staking, construction management and supervision for such Facilities, and to finance the incidental expenses to be incurred, including:
a. The cost of engineering, planning and designing the Facilities; b. All costs, including costs of the property owner petitioning to form the District, associated with the creation of the District, the issuance of the bonds, the determination of the amount of special taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the District; and
c. Any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities.

Capitalized terms used and not defined herein shall have the meaning set forth in the Rate and Method of Apportionment of Special Taxes for the District.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 10

Menifee Mayor and City Council
April 2, 2025
Page
827 of 1198

B-1
4928-9460-3546v4/200299-0027

EXHIBIT B

BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE)

OF THE CITY OF MENIFEE

SPECIAL TAX AND SPECIAL BOND ELECTION
PROPOSITION A: Shall Community Facilities District
No. 2025-4 (Heritage Village) of the City of Menifee (the “District”) incur an indebtedness and issue bonds in the maximum principal amount of $11,000,000, with interest
at a rate or rates not to exceed the maximum interest
rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 25-
1539 of the City Council of the City of Menifee?
PROPOSITION B: Shall a special tax with a rate and
method of apportionment as provided in Resolution No.
25-1539 of the City Council of the City of Menifee be
levied to pay for the Facilities, Incidental Expenses and other purposes described in Resolution No. 25-1539,
including the payment of the principal of and interest on bonds issued to finance the Facilities and Incidental
Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION C: For each year commencing with
Fiscal Year 2025-26, shall the appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, for the District be an amount equal to $5,000,000?
YES______
NO_______
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 11

Menifee Mayor and City Council
April 2, 2025
Page
828 of 1198

4926-0290-2810v4/200299-0027
RESOLUTION NO. _____

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE) OF THE CITY OF MENIFEE DETERMINING THE NECESSITY

TO INCUR BONDED INDEBTEDNESS IN AN AMOUNT NOT TO EXCEED $11,000,000 WITHIN COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE

VILLAGE) OF THE CITY OF MENIFEE AND CALLING AN ELECTION THEREIN WHEREAS, on February 19, 2025, the City Council of the City of Menifee (the “City Council”) adopted Resolution No. 25-1539 stating its intention to form Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee (“Community Facilities District No. 2025-4” or the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”); and WHEREAS, on February 19, 2025, the City Council also adopted Resolution No. 25-1540 stating its intention to incur bonded indebtedness in the aggregate principal amount of $11,000,000 within proposed Community Facilities District No. 2025-4 to finance (1) the purchase, construction, modification, expansion, improvement or rehabilitation of public facilities identified in Exhibit B to Resolution No. 25-1539, and (2) the incidental expenses to be incurred in financing such public facilities and forming and administering the District, as identified in Exhibit B to Resolution No. 25-1539; and WHEREAS, notice was published as required by law relative to the intention of the City Council to form proposed Community Facilities District No. 2025-4 and to incur bonded indebtedness in the amount of $11,000,000 within the boundaries of proposed Community Facilities District No. 2025-4; and
WHEREAS, on April 2, 2025, this City Council conducted a noticed public hearing to determine whether it should proceed with the formation of Community Facilities District No. 2025-4, issue bonds to pay for the facilities and incidental expenses described in Resolution No. 25-1539 and authorize the rate and method of apportionment of a special tax to be levied within Community Facilities District No. 2025-4 for the purposes described in Resolution No. 25-1539; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of Community Facilities District No. 2025-4, the levy of a special tax and the issuance of bonds to pay for the cost of the proposed facilities and incidental expenses were heard and a full and fair hearing was held; and
WHEREAS, the City Council subsequent to such hearing adopted Resolution No. 25-___ establishing Community Facilities District No. 2025-4 (the “Resolution of Formation”) and authorizing the financing of the public facilities (the “Facilities”) and the incidental expenses (the “Incidental Expenses”) described in Exhibit A thereto; and
WHEREAS, the City Council desires to make the necessary findings to incur bonded indebtedness within the District, to declare the purpose for said debt, and to authorize the submittal of a proposition to issue bonded indebtedness to the voters of the District, being the landowners within the proposed District, all as authorized and required by law.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee does hereby find and determine as follows:

Section 1.It is necessary to incur bonded indebtedness in one or more series in the maximum aggregate principal amount of $11,000,000 within Community Facilities District No. 2025-4.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 12

Menifee Mayor and City Council
April 2, 2025
Page
829 of 1198

Resolution Determining Necessity to Incur Debt for CFD No. 2025-4 (Heritage Village) 2 4926-0290-2810v4/200299-0027
Section 2.The indebtedness is to be incurred for the purpose of financing the costs of purchasing, constructing, modifying, expanding, improving, or rehabilitating the Facilities and financing the Incidental Expenses, as described in the Resolution of Formation, and carrying out the powers and purposes of Community Facilities District No. 2025-4, including, but not limited to, financing the costs of selling the bonds, establishing and replenishing bond reserve funds and paying remarketing, credit enhancement and liquidity facility fees and other expenses of the type authorized by Section 53345.3 of the Act.

Section 3.The whole of the property within Community Facilities District No. 2025-4, other than property exempted from the special tax pursuant to the provisions of the rate and method of apportionment attached to Resolution No. 25-1539 as Exhibit C, shall pay for the bonded indebtedness pursuant to the levy of the special tax authorized by the Resolution of Formation.

Section 4.The maximum term of the bonds to be issued 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.

Section 5.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.

Section 6.The bonds may bear a variable or fixed interest rate, provided that such variable rate or fixed rate shall not exceed the maximum rate permitted by Section 53531 of the Government Code, or any other applicable provision of law limiting the maximum interest rate on the bonds.

Section 7.Pursuant to Section 53351 of the Act, a special election is hereby called for Community Facilities District No. 2025-4 on the proposition of incurring the bonded indebtedness.

The proposition relative to incurring bonded indebtedness in the maximum aggregate principal amount of $11,000,000 shall be in the form of Proposition A set forth in Exhibit A hereto. In accordance with Sections 53351(h) and 53353.5 of the Act, the election shall be consolidated with the special election called on the proposition of levying a special tax within the District as described in the Resolution of Formation, which proposition shall be in the form of Proposition B set forth in Exhibit A, and on the proposition of establishing an appropriations limit for the District, which proposition shall be in the form of Proposition C set forth in Exhibit A.

Section 8.The date of the special election for Community Facilities District No. 2025-4 on the propositions of incurring the bonded indebtedness, authorizing the levy of the special tax and setting an appropriations limit shall be April 2, 2025, or such later date as is consented to by the City Clerk, or a Deputy City Clerk of the City (referred to herein as the “City Clerk”); provided that, if the election is to take place sooner than 90 days after April 2, 2025, then the unanimous written consent of each qualified elector within the District to such election date must be obtained. The polls shall be open for said election immediately following the public hearing on April 2, 2025. The election shall be conducted by the City Clerk. Except as otherwise provided by the Act, the election shall be conducted in accordance with the provisions of law regulating elections of the City of Menifee insofar as such provisions are determined by the City Clerk to be applicable.

The City Clerk is authorized to conduct the election following the adoption of the Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 13

Menifee Mayor and City Council
April 2, 2025
Page
830 of 1198

Resolution Determining Necessity to Incur Debt for CFD No. 2025-4 (Heritage Village) 3 4926-0290-2810v4/200299-0027
Resolution of Formation, and this resolution and all ballots shall be received by and the City Clerk shall close the election by 11:00 p.m. on the election day; provided the election shall be closed at such earlier time as all qualified electors have voted as provided in Section 53326(d) of the Act. Pursuant to Section 53326 of the Act, the ballots for the special election shall be distributed in person, or by mail with return postage prepaid, to the qualified electors within Community Facilities District No. 2025-4. The City Clerk has secured a certificate of the Registrar of Voters of the County of Riverside certifying that there were no registered voters within the District as of February 19, 2025.

Accordingly, since there were fewer than 12 registered voters within the District for each of the 90 days preceding April 2, 2025, the qualified electors shall be the landowners within the District and each landowner, or the authorized representative thereof, shall have one vote for each acre or portion thereof that such landowner owns within Community Facilities District No. 2025-4, as provided in Section 53326 of the Act. The landowner within the District has executed and delivered a waiver of certain election law requirements and consenting to the holding of the election on April 2, 2025, which waiver is on file with the City Clerk.

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

Menifee Mayor and City Council
April 2, 2025
Page
831 of 1198

A-1
4926-0290-2810v4/200299-0027

EXHIBIT A

BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE)

OF THE CITY OF MENIFEE

Menifee Mayor and City Council
April 2, 2025
Page
832 of 1198

4913-4218-7034v4/200299-0027
RESOLUTION NO. 25-___

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

ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE) OF THE CITY OF

MENIFEE CERTIFYING ELECTION RESULTS
WHEREAS, the City Council of the City of Menifee called and duly held an election on April 2, 2025, within the boundaries of Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee (“Community Facilities District No. 2025-4” or the “District”) pursuant to Resolution Nos. 25-___ and 25-___ for the purpose of presenting to the qualified electors within the District Propositions A, B and C, attached hereto as Exhibit A; and
WHEREAS, there has been presented to this City Council a certificate of the City Clerk or Deputy City Clerk (referred to herein as the “City Clerk”) canvassing the results of the election, a copy of which is attached hereto as Exhibit B;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee does hereby determine and order as follows:

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

Section 2.Propositions A, B and C presented to the qualified electors of the District on April 2, 2025, were approved by more than two-thirds of the votes cast at said election and Propositions A, 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 the District 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 one or more series in the maximum aggregate principal amount of $11,000,000 specified in Proposition A.

Section 3.The City Clerk is hereby directed to record in the Assessor-County Clerk-Recorder’s office of the County of Riverside within fifteen days of the date hereof a notice of special tax lien with respect to the District that Bond Counsel to the District shall prepare in the form required by Streets and Highways Code Section 3114.5.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 16

Menifee Mayor and City Council
April 2, 2025
Page
833 of 1198

Resolution Certifying Election Results for CFD No. 2025-4 (Heritage Village) 2 4913-4218-7034v4/200299-0027
Section 4.This Resolution shall be effective upon its adoption.

Menifee Mayor and City Council
April 2, 2025
Page
834 of 1198

4913-4218-7034v4/200299-0027

EXHIBIT A

BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE)

OF THE CITY OF MENIFEE

Menifee Mayor and City Council
April 2, 2025
Page
835 of 1198

4913-4218-7034v4/200299-0027

EXHIBIT B

CERTIFICATE OF CITY CLERK

AS TO THE RESULTS OF THE CANVASS OF THE ELECTION RETURNS I, Stephanie Roseen, City Clerk of the City of Menifee, do hereby certify that I have examined the returns of the Special Tax and Bond Election for Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee (the “City”). The election was held in the City Council Chambers, 29844 Haun Road, Menifee, California, on April 2, 2025. I caused to be delivered ballots to each qualified elector. __ (__) ballots were returned.

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

PROPOSITION A PROPOSITION B PROPOSITION C
YES: YES: YES:

NO: NO: NO:

TOTAL: TOTAL: TOTAL:

Dated this 2nd day of April, 2025.
/s/ Stephanie Roseen
Stephanie Roseen, City Clerk
City of Menifee
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 19

Menifee Mayor and City Council
April 2, 2025
Page
836 of 1198

Public Hearing Report
Community Facilities District No. 2025-4
(Heritage Village)
April 2, 2025
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 20

Menifee Mayor and City Council
April 2, 2025
Page
837 of 1198

Table of Contents
Sections
1 2
3 4
5 6
Introduction 1
2 3
4 5
6 Description of Facilities
Cost Estimate
Proposed Development
Rate and Method of Apportionment
Certifications
Tables P
3-1
5-1
Cost Estimate
Assigned Special Tax for Developed Property
3 5
Appendices
A
B
C
Rate and Method of Apportionment
Proposed Boundary Map
Resolution of Intention
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 21

Menifee Mayor and City Council
April 2, 2025
Page
838 of 1198

1 Introduction Page | 1
Background
On February 19, 2025, the City Council (the “City Council”) of the City of Menifee (the “City”), adopted a Resolution of Intention to form Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee (“CFD No. 2025-4” or “District”), Resolution No. 25-1539, pursuant to the provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, (“Act”).

CFD No. 2025-4 is currently composed of approximately 7.5 gross acres within Tract Map 38346 including 162 proposed townhomes. The property is located on the northwest corner of Menifee Road and Rouse Road.

For a map showing the boundaries of CFD No. 2025-4 please see Appendix B.

Purpose of Public Hearing Report
WHEREAS, this Community Facilities District Report (“Report”) is being provided to the City Council and generally contains the following:

1. A brief description of CFD No. 2025-4;

2. A brief description of the Facilities required at the time of formation to meet the needs of CFD No. 2025-4.

3. A brief description of the Boundaries of CFD No. 2025-4; and

4. An estimate of the cost of financing the bonds used to pay for the Facilities, including all costs associated with formation of the District, issuance of bonds, determination of the amount of any special taxes, collection of any special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the City with respect to the District, and any other incidental expenses to be paid through the proposed financing.

For particulars, reference is made to the Resolution of Intention as previously approved and adopted and is included in Appendix C.

City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 22

Menifee Mayor and City Council
April 2, 2025
Page
839 of 1198

2 Description of Facilities Page | 2
NOW, THEREFORE, the undersigned, authorized representative of Spicer Consulting Group, LLC, the appointed responsible officer, or person directed to prepare this Report, does hereby submit the following data:

Description of the Facilities
A Community Facilities District may pay for facilities that may include all amounts necessary to eliminate any fixed special assessment liens or to pay, repay, or defease any obligation to pay for any indebtedness secured by any tax, fee, charge, or assessment levied, provide for the purchase, construction, expansion, or rehabilitation for any real or other tangible property with an estimated useful life of five (5) years or longer, which is necessary to meet increased demands placed upon local agencies as a result of development and/or rehabilitation occurring within the District.

The types of facilities that are proposed by CFD No. 2025-4 and financed with the proceeds of special taxes and bonds issued by CFD No. 2025-4 consist of the construction, purchase, modification, expansion, rehabilitation and/or improvement of (i) drainage, library, park, street, roadway, traffic signal and streetlights, administration and general government facilities, fire and public safety facilities, landscaping and trail improvements, and other public facilities of the City, including the foregoing public facilities that are included in the City’s fee programs with respect to such facilities and authorized to be financed under the Mello-Roos Community Facilities Act of 1982, as amended (the “City Facilities”); (ii) water and sewer facilities including the acquisition of capacity in the sewer system and/or water system of Eastern Municipal Water District that are included in Eastern Municipal Water District’s water and sewer capacity and connection fee programs (the “Water District Facilities”); and (iii) dry utilities (the “Utilities” and together, with the City Facilities and the Water District Facilities, the “Facilities”) all appurtenances and appurtenant work in connection with the foregoing Facilities, including the cost of engineering, planning, designing, materials testing, coordination, construction staking, construction management and supervision for such Facilities.

Incidental Expenses
The Incidental Expenses to be paid from bond proceeds and/or special taxes include:
a)
b)
The cost of engineering, planning and designing the Facilities; and All costs, including costs of the property owner petitioning to form the District, associated with the creation of the District, the issuance of the bonds, the determination of the amount of special taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the District; and c) Any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities.

Capitalized terms used and not defined herein shall have the meaning set forth in the Rate and Method of Apportionment of Special Taxes for the District.

All costs associated with the creation of CFD No. 2025-4, the issuance of bonds, the determination of the amount of special taxes to be levied, costs incurred in order to carry out the authorized purposes of CFD No. 2025-4, including legal fees, fees of consultants, engineering, planning, designing and the annual costs to administer CFD No. 2025-4 and any obligations.

The description of the eligible public facilities, services and incidental expenses above are preliminary and general in nature.

The final plans and specifications approved by the applicable public agency may show substitutes or modifications in order to accomplish the work or serve the new development and any such substitution or modification shall not constitute a change or modification in the proceedings relating to CFD No. 2025-4.

City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 23

Menifee Mayor and City Council
April 2, 2025
Page
840 of 1198

3 Cost Estimate Page | 3
Below is the estimated cost of facilities to be provided to the District. a) The cost estimate of facilities, including incidental expenses, to be financed through the issuance of CFD No. 2025- 4 Bonds is estimated to be $8,690,000 based upon current dollars (Fiscal Year 2025-26). b) For further particulars please reference Table 3-1 below and incorporated herein by reference. c) Pursuant to Section 53340 of the Act, the proceeds of any special tax levied and collected by CFD No. 2025-4 may be used only to pay for the cost of providing public facilities, services, and incidental expenses. As defined by the Act, incidental expenses include, but are not limited to, the annual costs associated with determination of the amount of special taxes, collection of special taxes, payment of special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the District. The incidental expenses associated with the annual administration of CFD No. 2025-4 are estimated to be $30,000 in the initial Fiscal Year. However, it is anticipated that the incidental expenses will vary due to inflation and other factors that may not be foreseen today, and the actual incidental expenses may exceed these amounts accordingly.

Table 3-1
Cost Estimate
City Fees
Law Enforcement
Total Bond Allocation(1)
$128,313$128,313
$89,677Fire Facilities
Circulation
General Govt
Parks and Recreation
Quimby
$89,677
$635,362
$163,050
$238,903
$984,150
$447,891
$2,687,346
$635,362
$163,050
$238,903
$984,150
$447,891
$2,687,346
City Facilities
Total City Fees
City Facilities Total
Total
Bond Allocation(1)
$1,112,325
$750,999
Menifee Road Utility Undergrounding
Rouse Road Utility Undergrounding
Menifee/Rouse Road Traffic Signal
Design, Planning, Engineering (15%)
Total City Facilities
$1,112,325
$750,999
$150,000
$22,500
$150,000
$22,500
$2,035,824$2,035,824
Eastern Municipal Water District Fees
Sewer Financial Participation Charge
Sewer Treatment Plant Capacity Charge
Water Financial Participation Charge
Water Supply Development Fee
1" Meter Drop-In Fee
Bond Allocation(1)
$563,112
$1,067,418
$964,715
$65,286
$563,112
$1,067,418
$964,715
$65,286
$63,504 $63,504
1/5" Irrigation Meter Capacity Fee
1/5" Irrigation Meter Installation Fee
Water Frontage Fees
$67,320
$1,322
$39,904
$66,772
$0
$0
Total Eastern Municipal Water District Fees $2,832,581 $2,790,807 Total Eligible Fees/Improvements
Incidental Financing Costs
Total Funded by Bond Proceeds
$7,555,751 $7,513,977
$1,176,023
$8,690,000
Total Fees/Improvements to be Funded by Developer $41,774 (1) Amounts are allocated based upon estimated bond sizing and may change based upon market conditions at the time of bond issuance. Allocation of bond proceeds between facility types to be determined at the time of bond issuance.

City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 24

Menifee Mayor and City Council
April 2, 2025
Page
841 of 1198

4 Proposed Development Page | 4
The CFD No. 2025-4 includes approximately 7.5 gross acres located on the northwest corner of Menifee Road and Rouse Road in the City. The property within CFD No. 2025-4 is expected to be developed with 162 single-family residential townhomes. As of Fiscal Year 2025-26 the proposed CFD No. 2025-4 includes the following Assessor's Parcel Numbers: Assessor’s
Parcel Number
331-250-028
331-250-029
331-250-030
A map showing the boundaries of CFD No. 2025-4 is included in Appendix B.

City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 25

Menifee Mayor and City Council
April 2, 2025
Page
842 of 1198

5 Rate and Method of Apportionment Page | 5
The Rate and Method of Apportionment allows each property owner within CFD No. 2025-4 to estimate the annual Special Tax amount that would be required for payment. The Rate and Method of Apportionment of the Special Tax established pursuant to these proceedings, is attached hereto as Appendix A (the “Rate and Method”). The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties, the same procedure, sale and lien priority in the case of delinquency; provided, however, that the CFD Administrator may directly bill the Special Taxes, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of CFD No. 2025-4, and provided further that CFD No. 2025-4 may covenant to foreclose and may actually foreclose on parcels having delinquent Special Taxes as permitted by the Act.

All of the property located within CFD No. 2025-4, unless exempted by law or by the Rate and Method proposed for CFD No. 2025-4, shall be taxed for the purpose of providing necessary facilities to serve the District. The Boundary Map for CFD No. 2025-4 is attached hereto as Appendix B. Pursuant to Section 53325.3 of the Act, the tax imposed “is a Special Tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property.” The Special Tax may be based on the benefit received by property, the cost of making facilities or authorized services available or other reasonable basis as determined by the City, although the Special Tax may not be apportioned on an ad valorem basis pursuant to Article XIIIA of the California Constitution. A property owner within the District may choose to prepay in whole or in part the Special Tax. The available method for so doing is described in Section G of the Rate and Method (“Prepayment of Special Tax”).

For each year that any Bonds are outstanding the Special Tax shall be levied on all parcels subject to the Special Tax. If any delinquent Special Taxes remain uncollected prior to or after all Bonds are retired, the Special Tax may be levied to the extent necessary to reimburse CFD No. 2025-4 for uncollected Special Taxes associated with the levy of such Special Taxes, but the Special Tax shall not be levied after 2070-71 Fiscal Year.

Table 5-1
Assigned Special Tax for Developed Property
Fiscal Year 2025-26
Assigned Special
Taxable
Unit
Tax Per Taxable
UnitLand Use Category Building Square Footage
Less than 1,000 sq. ft
1,000 sq. ft to 1,250 sq. ft
Greater than 1,250 sq. ft
N/A

1. Single Family Residential Property

2. Single Family Residential Property

3. Single Family Residential Property
RU
RU
RU
Acre
Acre
$2,949.00
$3,220.00
$3,284.00
$83,630.00
$83,630.00

4. Multifamily Property

5. Non-Residential Property N/A
Escalation of Special Taxes
On each July 1, commencing on July 1, 2026, the Assigned Special Tax shall increase by two percent (2.0%), of the amount in effect in the prior Fiscal Year.

For particulars as to the Rate and Method for CFD No. 2025-4, see the attached and incorporated in Appendix A.

City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 26

Menifee Mayor and City Council
April 2, 2025
Page
843 of 1198

6 Certifications Page | 6
Based on the information provided herein, it is my opinion that the described services herein are those that are necessary to meet increased demands placed upon the City of Menifee as a result of development occurring within the CFD No. 2025- 4 and benefits the lands within said CFD No. 2025-4. Further, it is my opinion that the special tax rates and method of apportionment, as set forth herein, are fair and equitable, uniformly applied and not discriminating or arbitrary.

Date: April 2, 2025 SPICER CONSULTING GROUP, LLC
__________________________

SHANE SPICER

SPECIAL TAX CONSULTANT FOR

CITY OF MENIFEE

RIVERSIDE COUNTY

STATE OF CALIFORNIA
City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 27

Menifee Mayor and City Council
April 2, 2025
Page
844 of 1198

Appendix A:

Rate and Method of Apportionment
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 28

Menifee Mayor and City Council
April 2, 2025
Page
845 of 1198

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2025‐4 (HERITAGE VILLAGE)

OF THE CITY OF MENIFEE
A Special Tax (all capitalized terms not otherwise defined herein are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of the City of Menifee Community Facilities District No. 2025‐4 (Heritage Village) ("CFD No. 2025‐4”). 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. 2025‐4, by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel 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 map or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560. "Act" means the Mello‐Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2025‐2: 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. 2025‐4 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2025‐4 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2025‐4 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. 2025‐4 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. 2025‐4 for any other administrative purposes of CFD No. 2025‐4, 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, City of Menifee
Community Facilities District No. 2025‐4 (Heritage Village) Page 1 Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 29

Menifee Mayor and City Council
April 2, 2025
Page
846 of 1198

(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.
"Assessor’s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.
"Assessor’s Parcel Number" means that number assigned to an Assessor’s Parcel by the County for purposes of identification.
"Assigned Special Tax" means the Special Tax of that name described in Section D below. "Backup Special Tax" means the Special Tax of that name described in Section D below. "Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, certificates of participation, long‐term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long‐term contracts, or any refunding thereof, to which the Special Tax of CFD No. 2025‐4 have been pledged. "Boundary Map" means a recorded map of the CFD which indicates the boundaries of the CFD. "Building Permit" means the first legal document issued by the City giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include expired or cancelled building permits, or any subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator, provided that following such determination the Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses. "Building Square Footage" or "BSF" means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, as determined by reference to the Building Permit for such Assessor’s Parcel.
"Calendar Year" means the period commencing January 1 of any year and ending the following December

31. "CFD” or “CFD No. 2025‐4” means Community Facilities District No. 2025‐4 (Heritage Village) established by the City under the Act.
“CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement, and providing for the levy and collection of the Special Taxes. “City” means the City of Menifee, State of California.
"City Council" means the City Council of the City of Menifee, acting as the legislative body of CFD No. 2025‐4.

City of Menifee
Community Facilities District No. 2025‐4 (Heritage Village) Page 2 Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 30

Menifee Mayor and City Council
April 2, 2025
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“Condominium Plan" means a condominium plan purusant to California Civil Code, Section 6624. "County" means the County of Riverside, State of California. "Developed Property" means all Assessor’s Parcels that: (i) are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, (ii) have an Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) for which a Building Permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied. "Exempt Property" means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a Condominium Plan pursuant to California Civil Code Section 6624 that creates individual lots for which Building Permits may be issued without further subdivision. "Fiscal Year" means the period commencing on July 1st of any year and ending the following June 30th. “Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.
“Land Use Category” means any of the categories listed in Table 1 of Section D. "Maximum Special Tax" means for each Assessor’s Parcel, the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2025‐4 on such Assessor’s Parcel. “Multifamily Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing a building or buildings comprised of attached Residential Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the CFD Administrator.
"Non‐Residential Property" means all Assessor's Parcels of Developed Property for which a Building Permit(s) was issued for a non‐residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non‐Residential Property.
"Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2. "Prepayment Amount" means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.
“Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax City of Menifee
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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. 2025‐4.
"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.
“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. 2025‐4 pursuant to the Act to fund the Special Tax Requirement. "Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to replenish any reserve funds established in association with the Bonds (provided that the same amount was not previously levied), (v) an amount up to any anticipated shortfall due to Special Tax delinquencies and (vi) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2025‐4 or the payment of debt service on Bonds anticipated to be issued, provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps Two or Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture.
"Taxable Property" means all Assessor’s Parcels within CFD No. 2025‐4, 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.

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B. SPECIAL TAX
Commencing Fiscal Year 2025‐2026 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 2025‐2026, each Assessor’s Parcel within CFD No. 2025‐4 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property.

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

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

D. MAXIMUM SPECIAL TAX

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

The Maximum Special Tax for each Assessor’s Parcel of Multifamily Property and Non‐Residential Property shall be the applicable Assigned Special Tax described in Table 1 of Section D. a. Assigned Special Tax
Each Fiscal Year, each Assessor’s Parcel of Single Family Residential Property, Multifamily Property or Non‐Residential Property shall be subject to an Assigned Special Tax. The Assigned Special Tax for Fiscal Year 2025‐2026 applicable to an Assessor's Parcel of Developed Property shall be determined pursuant to Table 1 below.

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TABLE 1

ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2025‐2026
Assigned
Special Tax Per
Taxable Unit
$2,949.00
Taxable
Unit
RU
RU
RU
Acre
Acre
Land Use Category

1. Single Family Residential Property

2. Single Family Residential Property

3. Single Family Residential Property

4. Multifamily Property
Building Square Footage
Less than 1,000 sq. ft
1,000 sq. ft to 1,250 sq. ft
Greater than 1,250 sq. ft
N/A
$3,220.00
$3,284.00
$83,630.00
$83,630.005. Non‐Residential Property N/A
On each July 1, commencing July 1, 2026, the Assigned Special Tax rate for Developed Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. b. Multiple Land Use Categories
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for each Taxable Unit for all Land Use Categories located on the Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be final. c. Backup Special Tax
The Backup Special Tax for an Assessor’s Parcel within a Final Map classified as Single Family Residential Property shall be $3,536 per Residential Unit.

Notwithstanding the foregoing, if all or any portion of the applicable Final Maps and/or condominium plan contained within the boundaries of CFD No. 2025‐4 is subsequently changed or modified, then the Backup Special Tax for Single Family Residential Property or Approved Property in such Final Map or condominium plan area that is changed or modified shall be recalculated as follows:

1. Determine the total Backup Special Taxes anticipated to apply to the changed or modified Final Map or condominium plan area prior to the change or modification.

2. The result of paragraph 1 above shall be divided by the total number of Residential Units constructed and/or anticipated to be constructed within such changed or modified Final Map or condominium plan area, as reasonably determined by the CFD Administrator.

The result of paragraph 2 is the Backup Special Tax per Residential Unit which shall be applicable to Assessor’s Parcels of Single Family Residential Property or Approved Property in such changed or modified Final Map or condominium plan area contained within the boundaries of CFD No. 2025‐4.

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

On each July 1, commencing July 1, 2026, the Backup Special Tax rate shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

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

The Maximum Special Tax for each Assessor’s Parcel of Approved Property not expected to be classified as Single Family Residential Property shall be $83,630 per Acre.

On each July 1, commencing July 1, 2026, the Maximum Special Tax rate for Approved Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

3. Undeveloped Property and Provisional Undeveloped Property The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property and Provisional Undeveloped Property shall be $83,630 per Acre.

On each July 1, commencing July 1, 2026, 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 2025‐2026 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property in accordance with the following steps:

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

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

Step Three:

Step Four:

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

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

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

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

F. EXEMPTIONS
The City shall classify as Exempt Property, in the following order of priority, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses, (vi) Assessor’s Parcels which are classified as Non‐Residential Property or (vii) Assessor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 6.85 Acres.

Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 6.85 Acres. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 6.85 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to Step Five in Section E.

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Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News‐Record Building Cost Index for the City of Los Angeles. “Future Facilities Costs” means the CFD Facilities minus (i) amounts deposited in the Construction Fund, (ii) amounts deposited in any escrow accounts funded by the Outstanding Bonds and anticipated to fund public facilities costs, and (iii) public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment, but in no event shall such amount be less than zero. “Outstanding Bonds” means all previously issued Bonds issued and secured by the levy of Special Tax which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Tax.

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

Within 15 days of receipt of such non‐refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel. Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be redeemed with the proceeds of such prepaid Special Taxes.

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

Bond Redemption Amount
plus
plus
plus
plus
less
Redemption Premium
Future Facilities Amount
Defeasance Amount
Administrative Fees and Expenses
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 City of Menifee
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though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, or Provisional Undeveloped Property, compute the Maximum Special Tax for the Assessor’s Parcel.

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

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

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

6. 7.

Determine the Future Facilities Costs.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Special Tax obligation, (ii) the percentage of the Special Tax obligation such owner wishes to prepay, and (iii) the company or agency that will be acting as the escrow agent, if any. Within 5 days of receipt of such notice, the CFD Administrator shall notify such property owner of the amount of the non‐refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Partial Prepayment Amount. Within 15 business days of receipt of such non‐refundable deposit, the CFD Administrator shall notify such owner of the amount of the Partial Prepayment Amount for the Assessor’s Parcel. A Partial Prepayment Amount must be made not less than 60 days prior to the redemption date for the Outstanding Bonds to be redeemed with the proceeds of the Partial Prepayment Amount.

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

H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax pursuant to Section E. The Special Tax shall cease not later than the 2070‐2071 Fiscal Year, however, Special Taxes will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2025‐4 Bonds have been paid; (ii) all authorized facilities of CFD No. 2025‐4 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. 2025‐4 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. 2025‐4 may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.

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

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

City of Menifee
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Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 40

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Appendix B:

Proposed Boundary Map
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 41

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Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 42

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Appendix C:

Resolution of Intention
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 43

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Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 44

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Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 45

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Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 46

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Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 47

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Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 48

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EXHIBIT A

BOUNDARY MAP
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4934-3873-2045v4/200299-0027
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 49

Menifee Mayor and City Council
April 2, 2025
Page
866 of 1198

EXHIBIT B
Types of Facilities
to Be Financed by Community
Facilities District No. 2025-4 (Heritage Village) of the City of Menifee The proposed types of public facilities and expenses to be financed by the District include:

Capitalized terms used and not defined herein shall have the meaning set forth in the Rate and Method of Apportionment of Special Taxes for the District.

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Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 50

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April 2, 2025
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EXHIBIT C

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2025-4, HERITAGE VILLAGE,

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. 2025-4, by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel 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 map or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2025-2: 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. 2025-4 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2025-4 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2025-4 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. 2025-4 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. 2025-4 for any other administrative purposes of CFD No. 2025-4, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Approved Property" means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, (ii) that have an assigned Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) that have not been C-1
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issued a building permit on or before May 1 st 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.
"Assessor’s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.
"Assessor’s Parcel Number" means that number assigned to an Assessor’s Parcel by the County for purposes of identification.
"Assigned Special Tax" means the Special Tax of that name described in Section D below. "Backup Special Tax" means the Special Tax of that name described in Section D below. "Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, to which the Special Tax of CFD No. 2025-4 have been pledged. "Boundary Map" means a recorded map of the CFD that indicates the boundaries of the CFD. "Building Permit" means the first legal document issued by the City giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include expired or cancelled building permits, or any subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator, provided that following such determination the Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property will be at least

1.1 times annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses.
"Building Square Footage" or "BSF" means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, as determined by reference to the Building Permit for such Assessor’s Parcel.
"Calendar Year" means the period commencing January 1 of any year and ending the following December 31.
"CFD” or “CFD No. 2025-4” means Community Facilities District No. 2025-4, Heritage Village, established by the City under the Act.
“CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement, and providing for the levy and collection of the Special Taxes. “City” means the City of Menifee, State of California.
"City Council" means the City Council of the City of Menifee, acting as the legislative body of CFD No. 2025-4.
“Condominium Plan" means a condominium plan pursuant to California Civil Code, Section 6624. "County" means the County of Riverside, State of California.

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"Developed Property" means all Assessor’s Parcels that: (i) are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, (ii) have an Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) for which a Building Permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied. "Exempt Property" means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a Condominium Plan pursuant to California Civil Code Section 6624 that creates individual lots for which Building Permits may be issued without further subdivision. "Fiscal Year" means the period commencing on July 1 st of any year and ending the following June 30th.
“Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.
“Land Use Category” means any of the categories listed in Table 1 of Section D. "Maximum Special Tax" means for each Assessor’s Parcel, the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2025-4 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 composed of attached Residential Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the CFD Administrator. "Non-Residential Property" means all Assessor's Parcels of Developed Property for which a Building Permit(s) was issued for a non-residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non-Residential Property.
"Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2. "Prepayment Amount" means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.
“Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property or Provisional Undeveloped Property, as applicable. "Provisional Undeveloped Property" means all Assessor’s Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be classified as Exempt Property because to do so would be reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section F.

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April 2, 2025
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"Rate and Method of Apportionment" means this Rate and Method of Apportionment of Special Tax for CFD No. 2025-4.
"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. “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. 2025-4 pursuant to the Act to fund the Special Tax Requirement. "Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to replenish any reserve funds established in association with the Bonds (provided that the same amount was not previously levied), (v) an amount up to any anticipated shortfall due to Special Tax delinquencies and (vi) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2025-4 or the payment of debt service on Bonds anticipated to be issued, provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps Two or Three of Section E, less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture.
"Taxable Property" means all Assessor’s Parcels within CFD No. 2025-4 that 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 that are not Developed Property, Approved Property, or Provisional Undeveloped Property.

B. SPECIAL TAX
Commencing Fiscal Year 2025-2026 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 2025-2026, each Assessor’s Parcel within CFD No. 2025- 4 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property.

Assessor’s Parcels of Developed Property shall further be classified as Residential Property or Non- Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as a Single-Family Residential Property or Multifamily Property. Each Assessor’s Parcel of Single-Family C-4
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April 2, 2025
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Residential Property shall be further assigned to a Land Use Category based on its Building Square Footage.

D. MAXIMUM SPECIAL TAX

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

The Maximum Special Tax for each Assessor’s Parcel of Multifamily Property and Non-Residential Property shall be the applicable Assigned Special Tax described in Table 1 of Section D. a. Assigned Special Tax
Each Fiscal Year, each Assessor’s Parcel of Single-Family Residential Property, Multifamily Property or Non-Residential Property shall be subject to an Assigned Special Tax. The Assigned Special Tax for Fiscal Year 2025-2026 applicable to an Assessor's Parcel of Developed Property shall be determined pursuant to Table 1 below.

TABLE 1

ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2025-2026
Assigned
Special Tax
Taxable
Unit
RU
RU
RU
Acre
Acre
Building Square
Footage
Less than 1,000 sq. ft
1,000 sq. ft to 1,250 sq. ft
Greater than 1,250 sq. ft
N/A
Per Taxable
UnitLand Use Category

1. Single-Family Residential Property

2. Single-Family Residential Property

3. Single-Family Residential Property

4. Multifamily Property
$2,949.00
$3,220.00
$3,284.00
$83,630.00
$83,630.005. Non-Residential Property N/A
On each July 1, commencing July 1, 2026, the Assigned Special Tax rate for Developed Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

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b. Multiple Land Use Categories
In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for each Taxable Unit for all Land Use Categories located on the Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be final. c. Backup Special Tax
The Backup Special Tax for an Assessor’s Parcel within a Final Map classified as Single-Family Residential Property shall be $3,536 per Residential Unit.

Notwithstanding the foregoing, if all or any portion of the applicable Final Maps and/or condominium plan contained within the boundaries of CFD No. 2025-4 is subsequently changed or modified, then the Backup Special Tax for Single-Family Residential Property or Approved Property in such Final Map or condominium plan area that is changed or modified shall be recalculated as follows:

1. Determine the total Backup Special Taxes anticipated to apply to the changed or modified Final Map or condominium plan area prior to the change or modification.

The result of paragraph 2 is the Backup Special Tax per Residential Unit that shall be applicable to Assessor’s Parcels of Single-Family Residential Property or Approved Property in such changed or modified Final Map or condominium plan area contained within the boundaries of CFD No. 2025-4.

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

On each July 1, commencing July 1, 2026, the Backup Special Tax rate shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

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

The Maximum Special Tax for each Assessor’s Parcel of Approved Property not expected to be classified as Single-Family Residential Property shall be $83,630 per Acre.

On each July 1, commencing July 1, 2026, 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.

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E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2025-2026 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property in accordance with the following steps:

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

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

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

F. EXEMPTIONS
The City shall classify as Exempt Property, in the following order of priority, (i) Assessor’s Parcels that 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 that 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 that 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 that are privately owned and are encumbered by or restricted solely for public uses, (vi) Assessor’s Parcels that are classified as Non-Residential Property or (vii) C-7
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Assessor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 6.85 Acres.

Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 6.85 Acres. Assessor's Parcels that cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 6.85 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to Step Five in Section E.

G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
“CFD Facilities” means $9,000,000 expressed in 2025 dollars, which shall increase by the Construction Inflation Index on July 1, 2026, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the facilities under the authorized bonding program for CFD No. 2025-4, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to finance additional facilities to be supported by Special Tax levied under this Rate and Method of Apportionment.
“Construction Fund” means an account specifically identified in the Indenture or functionally equivalent to hold funds that are available for expenditure to acquire or construct facilities eligible to be financed by CFD No. 2025-4.
“Construction Inflation Index” means the greater of (i) 2% and (ii) the annual percentage change in the Engineering News-Record Building Cost Index for the city of Los Angeles, measured as of the Calendar Year that ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles. “Future Facilities Costs” means the CFD Facilities minus (i) amounts deposited in the Construction Fund, (ii) amounts deposited in any escrow accounts funded by the Outstanding Bonds and anticipated to fund public facilities costs, and (iii) public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment, but in no event shall such amount be less than zero.
“Outstanding Bonds” means all previously issued Bonds issued and secured by the levy of Special Tax that will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Tax.

1. Prepayment in Full
The Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor’s Parcels of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has been issued, (iii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has not been issued and (iv) Assessor’s Parcels of Provisional Undeveloped Property. The Special Tax obligation applicable to an Assessor’s Parcel may be fully prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel intending to prepay the Special Tax obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non-refundable deposit C-8
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determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel. Within 15 days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel.

Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be redeemed with the proceeds of such prepaid Special Taxes.

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

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 that has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, or Provisional Undeveloped Property, compute the Maximum Special Tax for the Assessor’s Parcel.

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”).

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

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

The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD.

The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds.

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

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

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

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

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

H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax pursuant to Section E. The Special Tax shall cease not later than the 2070-2071 Fiscal Year, however, Special Taxes will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2025-4 Bonds have been paid; (ii) all authorized facilities of CFD No. 2025-4 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. 2025-4 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. 2025-4 may collect Special Taxes at a different time C-11
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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.

During pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination.

If the CFD Administrator agrees with the appellant, the CFD Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant’s Assessor’s Parcel(s). No refunds of previously paid Special Taxes shall be made unless approved by the CFD Administrator.

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Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 62

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April 2, 2025
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Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 63

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April 2, 2025
Page
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Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 64

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April 2, 2025
Page
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ORDINANCE NO. 2025-___

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

ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE) OF THE CITY OF

MENIFEE AUTHORIZING THE LEVY OF SPECIAL TAXES
WHEREAS, on February 19, 2025, the City Council (the “City Council”) of the City of Menifee (the “City”) adopted Resolution No. 25-1539 declaring its intention to form Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee (the “District”) 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. 25-1540 declaring its intention to incur bonded indebtedness for the District; and WHEREAS, on April 2, 2025, 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 proposed levy of a special tax therein to finance certain public facilities described in Resolution No. 25-1539 and to secure the payment of any bonded indebtedness of the District, and the proposed issuance of bonded indebtedness in the maximum aggregate principal amount of $11,000,000, as described in Resolution No. 25-1540; and
WHEREAS, at the April 2, 2025, public hearing, all persons desiring to be heard on all matters pertaining to the formation of the District and the proposed levy of the special tax to finance the facilities described in Resolution No. 25-1539 and to secure the payment of up to $11,000,000 of bonded indebtedness of the District as described in Resolution No. 25-1540 (the “Bonds”) were heard and a full and fair hearing was held; and
WHEREAS, on April 2, 2025, the City Council adopted Resolution Nos. 25-___ and 25-___ which formed the District and called a special election within the District on April 2, 2025, on three propositions relating to the levy of a special tax within the District, the issuance of the Bonds and the establishment of an appropriations limit within the District; and WHEREAS, on April 2, 2025, a special election was held within the District at which the qualified electors approved by more than a two-thirds vote Propositions A, B and C authorizing the levy of a special tax within the District for the purposes described in Resolution No. 25-___, the issuance of the Bonds as described in Resolution No. 25-___ and establishing an appropriations limit for the District.

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 the District pursuant to Sections 53328 and 53340 of the Act at the rates and in accordance with the rate and method of apportionment set forth in Exhibit C to Resolution No. 25-1539, which is incorporated by reference herein (the “Rate and Method”). The special taxes are hereby levied commencing in the fiscal year specified in the Rate and Method and in each fiscal year thereafter until payment in full of the Bonds (including any bonds issued to refund the Bonds), payment of all costs of the public facilities authorized to be financed by the District, and payment of all costs of administering the District.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 65

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April 2, 2025
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Ordinance Levying Special Taxes for CFD No. 2025-4
Ordinance No. 2025-___
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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 the District, in the manner and as provided in the Rate and Method. The special tax rate levied on a parcel pursuant to the Rate and Method shall not exceed the maximum rate set forth in the 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, 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 in each fiscal year, and with respect to the special tax, until the Bonds are paid in full, the facilities 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, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act and Section F of the Rate and Method. No other properties or entities are exempt from the special tax unless the properties or entities are expressly exempted in Resolution No. 25-___ or in a resolution of consideration to levy a new special tax or special taxes or to alter the rate or method of apportionment or an existing special tax as provided in Section 53334 of the Act.

Section 5.All of the collections of the special tax shall be used as provided for in the Act, the Rate and Method and Resolution No. 25-___.

Section 6.The special tax 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 (including any bonds issued to refund the 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 the Bonds (including any bonds issued to refund the Bonds), order that the same be collected by an action brought in the superior court to foreclose the lien of such special tax, as authorized by the Act.

Section 8.The Mayor of the City shall sign this Ordinance and the City Clerk or Deputy 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.

Item Title: 11.4
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Ordinance Levying Special Taxes for CFD No. 2025-4
Ordinance No. 2025-___
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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.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 12.This Ordinance shall take effect thirty days after its final passage.

This Ordinance was introduced and read on the 2nd day of April, 2025 and APPROVED AND ADOPTED this ___ day of ____________, 2025.
___________________________
Ricky Estrada, Mayor
Attest:
___________________________
Stephanie Roseen, City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 67

Menifee Mayor and City Council
April 2, 2025
Page
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COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE)

OF THE CITY OF MENIFEE

ACQUISITION, CONSTRUCTION AND FUNDING AGREEMENT
THIS ACQUISITION, CONSTRUCTION AND FUNDING AGREEMENT (the “Agreement”) is made and entered into by and between CITY OF MENIFEE (the “City”), acting for and on behalf of itself and COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE) OF THE CITY OF MENIFEE (the “Community Facilities District” or “CFD”) and LENNAR HOMES OF CALIFORNIA, LLC, a California limited liability company (the “Developer”), each individually a “Party” and collectively the “Parties.” WHEREAS, Developer has requested that the City consider the formation of the CFD pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), and undertake proceedings for the authorization of special taxes and issuance of bonded indebtedness for the payment of the construction and/or acquisition of certain improvements to be owned, operated or maintained by the City and Eastern Municipal Water District (the “Water District”), as well as dry utility improvements required for development (the “Utility Improvements”) and incidental expenses in accordance with the Act; and WHEREAS, in order to proceed in a timely way with development of the property within the CFD which is described in the attached Exhibit “A” (the “Developer Property”), Developer desires to fund through the Community Facilities District (i) the City’s acquisition or construction of certain improvements that are to be owned, operated and maintained by the City or are otherwise required to be constructed by the City (i.e., the Utility Improvements) (“City Improvements”), as more particularly set forth and described in the Description of Cost Estimates attached hereto as Exhibit “B,” (ii) improvements included in the City’s fee programs (the “City Fee Facility Improvements”), as more particularly set forth and described in Exhibit “B,” and (iii) the improvements of the Water District described in Exhibit “C” hereto (the “Miscellaneous Improvements” and together with the City Improvements and the City Fee Facilities Improvements, collectively the “Improvements”); and
WHEREAS, the Developer entered into an Option Agreement (the “Option Agreement”) with Millrose Properties California, LLC, a California limited liability company (the “Land Bank”).

Under the Option Agreement, the Developer has the option to acquire various lots of the Developer Property according to a takedown schedule; and
WHEREAS, the City is authorized by the Act to form the CFD and to issue bonds secured by Special Taxes (as defined in Section 2.2) of the CFD (the “Bonds”) to fund the Improvements; and
WHEREAS, the City Council has adopted the City’s policies and procedures concerning the use of special district financing programs to finance the Improvements (the “Policy”); and WHEREAS, the purpose of this Agreement is to constitute a formal understanding between Developer and the City (pursuant to the requirements of Government Code Section 53313.51 and other provisions of the Act and the Policy) concerning financial and other obligations and responsibilities related to the formation of the Community Facilities District and the Improvements to Item Title: 11.4
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be financed by the Community Facilities District, when and if formed, to the extent funds are available, and to set forth the conditions upon which (1) the Community Facilities District will reimburse Developer or its designee for the cost of the City Improvements constructed by or on behalf of the Developer and (2) the Community Facilities District will fund the City Fee Facility Improvements thereby satisfying corresponding City fees; and (3) the Community Facilities District will also fund the Miscellaneous Improvements described in Exhibit “C.” NOW, THEREFORE, it is mutually agreed between the respective Parties as follows:

1. Feasibility Study. The City has retained, at the Developer’s expense, the necessary consultants to analyze the proposed formation of the CFD to finance the Improvements, including a special tax consultant, bond counsel, and other consultants deemed necessary by the City. The Developer has advanced to the City a sum of money for such costs. From time to time, Developer will make additional advances, within 10 business days following receipt from the City of a request for an additional advance, to cover the costs of the formation proceedings and any change proceedings under the Act requested by the Developer. The City will provide to Developer on request a summary of how the advances have been spent and the unexpended balance remaining. The amounts advanced by the Developer and, to the extent determined reasonable and appropriate by the City, expenses incurred by the Developer for engineering consultant costs in connection with the formation proceedings, any change proceedings and the issuance of Bonds, will be reimbursable to the Developer, without interest, from the Bonds. In the event that Bonds are not issued to provide a source of reimbursement to Developer, the City shall not have any liability to Developer to reimburse it for any of the amounts previously advanced by Developer and expended by the City.

Prior to the issuance of the Bonds, the City will request a final advance for any unpaid expenses incurred during preparatory technical, financial and legal work; and following payment of such expenses, the City shall promptly release the balance, if any, of the advance to the Developer.

Should the City’s expenses exceed the remaining balance, the City will bill the Developer for the difference, which the Developer agrees to pay within 10 days following receipt of such billing, subject to the conditions of paragraph one of this section.

2. Sale of Bonds.

2.1 City Policies. The City Council has adopted the Policy, setting forth the City’s policies and procedures concerning the use of special district financing programs to finance the Improvements. Pursuant to the Policy, the total annual amount of the special taxes to be collected with respect to a parcel within the CFD and all other taxes and assessments which will be collected with respect to such parcel from the secured tax roll must not exceed two percent (2%) of the Fair Market Value (as defined in the Policy) of such parcel at the time of CFD formation.

The Parties hereby agree that, unless waived by the City, at the time of issuance of the Bonds the ratio of the value of all parcels of property within the CFD to the amount of outstanding community facilities district or assessment district bonds attributable to such parcels (the “Value-to-Lien Ratio”) may not be less than four-to-one (4:1). Unless waived by the City, the Fair Market Value of the property within the CFD for purposes of determining the foregoing ratio will be determined based on the appraised value of the property based on the appraisal made by an appraiser selected by the City with a valuation date within three (3) months of the issuance of the Bonds, or, with respect to developed projects (as determined in the sole discretion of the City) or issuance of refunding bonds, the assessed value of the property, or some combination thereof. Subject to Item Title: 11.4
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satisfaction of the Policy and the requirements of this Agreement, the City shall use reasonable efforts to issue and sell the Bonds in one or more series in an amount sufficient to fund the Improvements in accordance with the schedule for development of the Developer Property. The ultimate decision as to issuance and sizing lies in the sole legislative discretion of the City.

2.2 Security for Payment of Special Taxes.
(a) Concurrently with the issuance and sale of each series of the Bonds, the owner of any land within the CFD which the City has determined, in its sole discretion, to use in the sizing of such series of Bonds (the “Sizing Property”), together with any Sizing Property owned by any affiliate (collectively, an “Account Party”), for which the Maximum Special Taxes for the then-current fiscal year (as defined in the Rate and Method of Apportionment of Special Tax for the CFD (“Rate and Method”) and such Special Tax referred to herein as the “Special Tax” or “Special Taxes”), are equal to or exceed 20% of the aggregate Maximum Special Taxes authorized to be levied on the Sizing Property in such fiscal year, shall deliver to the City either (i) a renewable irrevocable instrument of credit from a financial institution (rated “A” or better, or otherwise approved by the City) and approved by the City, or (ii) cash in-lieu thereof (a “Security”). The Security shall be in an amount calculated by multiplying the Special Tax Requirement (as defined in the Rate and Method) for the then current and following fiscal year, by the percentage of the Maximum Special Taxes for the current fiscal year allocable to the Developer Property owned by the Account Party (or owned by the Land Bank during the term of the Option Agreement if the Account Party is the Developer) (the “Stated Amount). The Security shall be maintained by the Account Party in each fiscal year until terminated in accordance with Section 2.2(c) below. While the Security is still required the Stated Amount of such Security shall be reduced as set forth in a Certificate of Reduction or Termination (as defined in Section 2.2(c) below).

The Security shall name the Fiscal Agent as a beneficiary and shall provide that the Fiscal Agent may draw an amount equal to any delinquencies in payment of semiannual installments of the Special Taxes levied on property owned by the Account Party (or owned by the Land Bank during the term of the Option Agreement if the Account Party is the Developer). The total amount to be drawn under the Security shall not exceed an amount equal to the Special Taxes owed by the Account Party that is delinquent at the time the draw is made. The amount drawn on the Security shall be applied in the same manner and for the same purposes as the delinquent Special Taxes would have been applied; provided, however the payment of a draw under the Security will not be deemed to cure the delinquency in payment of the Special Taxes.

If, subsequent to a draw on the Security and prior to the satisfaction of any reimbursements due to the institution providing the Security (the “Security Provider”) pursuant to this Agreement, the City receives payment of all or a portion of the delinquent Special Taxes or the proceeds of a sale of delinquent real property pursuant to foreclosure proceedings (“Delinquency Proceeds”) for a parcel for which the Security has been drawn, the Security Provider (or its designee, which may be the Developer) shall be reimbursed for such draws to the extent of Delinquency Proceeds net of the City’s costs of collection. The Security Provider is intended by the Parties to be a third party beneficiary of this Section 2.2.
(b) The Security shall be renewed, or a substitute Security reasonably satisfactory to the City (a “Substitute Security”) provided, not less than thirty (30) calendar days prior to the expiration of the Security or Substitute Security then in effect. If the Account Party Item Title: 11.4
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provides a Substitute Security to the City, then the Fiscal Agent shall return any existing Security on the effective date of the Substitute Security to the Security Provider.

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

At such time as the Security is renewed, or a Substitute Security is accepted by the Fiscal Agent, or the requirement for the Security has been terminated pursuant to this section, the City or its designee, shall release all amounts in the Security account to the Security Provider (or its designee, which may be the Developer) within ten (10) calendar days from the date of renewal or acceptance.
(c) Following the sale or transfer by the Account Party of any property to a person other than the Account Party, or upon the prepayment of the Special Tax obligation for a parcel owned by the Account Party (or owned by the Land Bank during the term of the Option Agreement if the Account Party is the Developer), the Account Party shall notify the Community Facilities District of such event, in writing, and, if requested by the Account Party, the Stated Amount of the Security shall be reduced and be recalculated in accordance with this Section 2.2; provided, however, that any costs associated with the recalculation and reduction shall be borne by the Account Party. Subject to Section 2.2(d) below, the Stated Amount may be reduced to an amount determined by the method of calculation set forth in Section 2.2(a) hereof. The Security shall be terminated upon the earlier of (i) when the Sizing Property owned by, or under option to, the Account Party is responsible for less than 20% of the Maximum Special Taxes applicable to all of the Sizing Property or (ii) when the Account Party has paid (or cause to be paid) all Special Taxes owed by the Account Party in the current fiscal year and the Sizing Property owned by, or under option to, the Account Party is expected to be responsible for less than 20% of the Maximum Special Taxes in the next fiscal year.

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

The Account Party shall notify the City of any events that will result in a reduction of the Stated Amount of the Security and shall provide the City with verification of said events. The Account Party may provide the Fiscal Agent with a Substitute Security in the reduced Item Title: 11.4
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amount, and the Fiscal Agent shall release and return to the Security Provider the Security then in effect. The Parties expressly acknowledge that the Account Party’s failure to so notify the City or to reduce the Security at the times prescribed herein shall in no way effect or invalidate sale or transfer of property, or recordation of maps on property.
(d) If any Sizing Property is sold or transferred by an Account Party with the result that the Sizing Property owned by the transferee together with any of its affiliates (“Transferee”) is responsible for 20% or more of the aggregate Maximum Special Taxes of all Sizing Property, a Security on the same terms specified in Section 2.2(a) above will be furnished by Transferee with respect to all Sizing Property owned by such Transferee. Any applicable purchase and sale agreement and/or escrow instructions shall notify the Transferee of this Security requirement and obligate the Transferee to provide such Security, if applicable. The Security of the Account Party will not be reduced to reflect the sale or transfer of such Sizing Property until a Security is furnished by the Transferee and accepted by the Fiscal Agent. The issuing financial institution and the form and terms of said Security will be subject to reasonable prior approval by the City. All terms provided in this Section 2.2 are applicable to the Transferee by replacing the term “Account Party” at each place where it occurs in each section with the term “Transferee.” Each provider of a Security for a Transferee shall be an express third party beneficiary of the provisions of this Section 2.2.

Notwithstanding the foregoing, the Developer shall not be considered a Transferee upon the sale of property to the Developer pursuant to the Option Agreement if the Developer is the Account Party for the property owned by the Land Bank.

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

2.3 Major Landowner Initial and Continuing Disclosure. An owner of land which is responsible for twenty percent (20%) or more of the Special Tax levy applicable to the Sizing Property in the fiscal year in which the Bonds are issued or in the fiscal year following the fiscal year in which the Bonds are issued (a “Major Landowner”) will be required to provide all information regarding the development of its property, including the financing plan for such development, which is necessary to ensure that the official statement for such Bonds complies with the requirements of Rule 15c2-12 and Rule 10b-5 of the Securities and Exchange Commission (the “Rule”) and all other applicable federal and state securities laws. Additionally, Developer acknowledges that, if it is a Major Landowner at the time of issuance of the Bonds, it will be necessary that Developer enter into a continuing disclosure agreement to provide such continuing disclosure pertaining to the development of the land owned by Developer to assist in the marketing of the Bonds. During the term of the Option Agreement, the Developer may enter into a continuing disclosure agreement to provide information on the property owned by, or under option to, the Developer, and, in such case, the Land Bank will not be required to enter into any continuing disclosure agreement pursuant to this Section 2.3.

2.4 Bond Issuance Parameters. The terms and conditions upon which each series of the Bonds shall be issued and sold, the method of sale of the Bonds and the pricing of the Bonds shall be determined solely by the City in its legislative discretion in conformance with the Act, the Policy, and this Agreement. Each series of Bonds shall be issued with a term not to exceed 35 years from the date of issuance of the Bonds. The proceeds of the Bonds shall be used in the following priority to (1) fund a reserve fund for the payment of principal and interest with respect to the Bonds in an amount equal to the least of (i) ten percent (10%) of the total bond issue, (ii) maximum annual debt service on Bonds, or (iii) 125% of average annual debt service; (2) fund capitalized interest Item Title: 11.4
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through the interest payment date on the Bonds for which Special Taxes are not available for payment of debt service on the Bonds or such longer period as requested by the Developer and approved by the City, subject to the Act; (3) reimburse the Developer or its designee pursuant to Section 1 hereof for CFD formation costs advanced by the Developer which have not already been reimbursed to the Developer from collected Special Tax; (4) pay for costs of issuance of the Bonds including, without limitation, underwriter’s discount, bond counsel and disclosure counsel fees, appraisal and special tax consultant fees, printing, fiscal agent fees, and reasonable Developer legal and financial consultant costs; (5) pay for the costs of forming the Community Facilities District; and (6) pay for the actual costs of the Improvements. The Community Facilities District shall maintain records relating to the disbursements of proceeds of the sale of the Bonds. The Indenture or Resolution or Fiscal Agent Agreement (hereinafter “Indenture”) for the Bonds shall establish an acquisition and construction fund or improvement fund (herein, the “Improvement Fund”) to be held by the fiscal agent (“Fiscal Agent”) into which shall be deposited initially the proceeds of the Bonds net of the amount of proceeds required to fund items (1) through (5) in the second preceding sentence. The Indenture shall also establish separate accounts of the Improvement Fund designated the “City Improvements Account,” “City Fee Facility Improvements Account,” and any Miscellaneous Improvement Account(s) for the Miscellaneous Improvements described in Exhibit “C,” into which shall be deposited such portions of the Improvement Fund as agreed by the Parties and directed by the City in writing at or subsequent to the closing of the sale of the Bonds consistent with the following priorities:
(a) An amount sufficient to fund the reasonable, current estimated cost of the City Fee Facility Improvements anticipated to be funded out of the Bonds being issued shall be deposited in the City Fee Facility Improvements Account (any Special Taxes collected by the CFD remaining after the payment of administrative expenses of the CFD and the reimbursement of the Developer for CFD formation costs pursuant to Section 1 hereof shall be deposited into the City Fee Facility Improvements Account at the time of Bond issuance, unless otherwise directed in writing by the Developer);
(b) If applicable, an amount to be agreed upon between Developer and the CFD prior to the issuance of Bonds sufficient to fund the reasonable, current estimated costs of the City Improvements (including the Utility Improvements) shall be deposited, or later transferred, to the City Improvements Account; and
(c) If applicable, an amount to be agreed upon between Developer and the CFD prior to the issuance of Bonds sufficient to fund the reasonable, current estimated cost of the Miscellaneous Improvements described in Exhibit “C” hereto, anticipated to be funded out of the Bonds being issued shall be deposited, or later transferred, to the applicable Miscellaneous Improvement Account(s).

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

Item Title: 11.4
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3. Allocation of Special Taxes. Prior to the issuance of Bonds, the City Council of the City, acting as the legislative body of the Community Facilities District, may levy Special Taxes on all parcels classified as Developed Property pursuant to the Rate and Method. Such Special Taxes collected by the City shall first be applied to fund annual administrative expenses of the Community Facilities District and then to fund Improvements in the same manner as the proceeds of Bonds as set forth herein. Upon sale and delivery of the Bonds, the City shall annually levy the Special Tax as provided for in documents pursuant to which the Bonds were issued. Following the issuance of the last series of Bonds, the City shall have no obligation to levy Special Taxes to reimburse the Developer for the costs of any Improvements not paid for from Bond proceeds.

4. Notice of Special Tax. Developer shall provide written notice to all potential initial purchasers of lots advising of the special tax obligation applicable to the Developer Property in the form required by Section 53341.5 of the Government Code. Neither the Developer nor the Land Bank shall be required to provide notice under this section in connection with the ownership and takedown of property pursuant to the Option Agreement.

5. Design Plans and Specifications. The requirements of this Section shall not apply to any City Improvement that was complete (as determined by the City Council) prior to the adoption by the City Council of the resolution forming the CFD, but they shall apply to all other City Improvements for which the Acquisition Price is paid. All plans, specifications and bid documents for the City Improvements (“Plans”) constructed or to be constructed by the Developer shall be prepared by the Developer at the Developer’s initial expense, subject to approval by the applicable public agency. Costs for preparation of the Plans will be eligible for reimbursement, conditioned upon the final approval of the applicable public agency and the availability of funds. Reimbursement of costs for plan revisions will be considered on a case by case basis. All facilities which were not complete prior to the formation of the District, as determined by the City, shall be bid in accordance with “public works” requirements of Section 7 to be eligible for reimbursement.

6. Construction of Improvements. The requirements of this Section shall not apply to any City Improvement that was complete (as determined by the City Council) prior to the adoption by the City Council of the resolution forming the CFD, but they shall apply to all other City Improvements for which the Acquisition Price is paid.

6.1 Acquisition of City Improvements. Upon the approval of Plans for a City Improvement, the Developer will provide for construction of such City Improvement in accordance with Sections 6.2 and 7 of this Agreement. Sections 6.2 and 7 specify the requirements for construction of the City Improvements that the City believes are necessary to ensure that such City Improvements are constructed as if they had been constructed under the direction and supervision, or under the authority of the City.

6.2 Acquisition. With respect to City Improvements, a qualified engineering firm (the “Field Engineer”) shall be employed by the Developer to provide all field engineering surveys determined to be necessary by the City’s inspection personnel. Field Engineer shall promptly furnish to City a complete set of grade sheets listing all locations, offsets, etc., in accordance with good engineering practices, and attendant data and reports resulting from Field Engineer’s engineering surveys and/or proposed facility design changes. City shall have the right, but not the obligation, to review, evaluate and analyze whether such results comply with applicable specifications.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 74

Menifee Mayor and City Council
April 2, 2025
Page
891 of 1198

8 4897-8262-8122v4/200299-0027
As necessary as determined by City, a full-time soil-testing firm, approved by City, shall be employed by the Developer to conduct soil compaction testing and certification. The Developer shall promptly furnish results of all such compaction testing to the City for its review, evaluation and decision as to compliance with applicable specifications. In the event the compaction is not in compliance with applicable specifications, the Developer shall be fully liable and responsible for the costs of achieving compliance. A final report certifying all required compaction in accordance with the specifications shall be a condition of final approval of facilities.

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

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

Should the Developer notify the City that the Developer is unable to complete such City Improvement, the City shall have the right but not the obligation to require the Developer to make an irrevocable offer of dedication to the City of the land owned by the Developer for the City Improvement identified in the notice and to assume responsibility for the work to be performed thereunder. In the event the City elects to assume the responsibility for any work on a previously awarded contract as described in the preceding sentence, the following will occur: (i) the Developer will make an irrevocable offer of dedication to the City of the land owned by the Developer for such City Improvement identified in the notice; (ii) to the extent permitted by law and the applicable contract, the Developer will assign all of the contracts for the work performed to date on the City Improvement identified in the notice to the City, if requested to do so by the City Manager; the City will use its best efforts to complete the City Improvement within a reasonable time frame; and upon completion of the City Improvement, to the extent there are Special Taxes or proceeds of the Bonds available following payment to the City for the costs of completing such City Improvement, the Developer will be reimbursed for the lesser of the cost or value of the previously unreimbursed satisfactory work performed or paid for by the Developer. The cost of such work will be determined by taking the unreimbursed amounts expended by the Developer under the contract(s) taken over by the City and deducting any incremental cost incurred by the City to complete the work under the contracts in question. Incremental cost shall be costs in excess of the sum of the original contract cost plus change orders approved by the City.

7. Public Works Requirements.

7.1 City Requirements. In order that the City Improvements for which the Acquisition Price is paid may be properly and readily acquired by the City, the Developer shall comply with all of the requirements in this Section 7.1 with respect to any such City Improvements to be acquired with funds in the City Improvements Account and the Developer shall provide such proof to the City as the City may reasonably require and at such intervals and in such form as the City may reasonably require, that the requirements under this Section 7.1 have been satisfied as to all such City Improvements. Notwithstanding the foregoing, City Improvements shall only be eligible for financing by the CFD if the City determines that the conditions under Section 53313.5 have been satisfied with respect to such City Improvements.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 75

Menifee Mayor and City Council
April 2, 2025
Page
892 of 1198

9 4897-8262-8122v4/200299-0027
(a) The Developer shall prepare a bid package for review, comment and approval by the City Manager or his or her designee (the “City Representative”) for any City Improvements bid after the effective date of this Agreement. (b) For any City Improvements bid after the effective date of this Agreement, the Developer shall, after obtaining sealed bids for the construction of the City Improvements in conformance with the procedures and requirements of the City, submit to the City written evidence of such competitive bidding procedure, including evidence of the means by which bids were solicited, a listing of all responsive bids and their amounts, and the name or names of the contractor or contractors to whom the Developer proposes to award the contracts for such construction, which shall be the lowest responsible bidder. (c) For any City Improvements bid after the effective date of this Agreement, the following provisions apply: the City Representative shall attend the bid opening for such City Improvements. If unable to attend the bid opening, the City Representative shall approve or disapprove of a contractor or contractors, in writing, within five (5) business days after receipt from the Developer of the name or names of such contractor or contractors recommended by the Developer. If the City Representative disapproves of any such contractor, the Developer shall select the next lowest responsible bidder from the competitive bids received who is acceptable to the City Representative.
(d) The specifications and bid and contract documents shall require all such contractors to pay prevailing wages and to otherwise comply with applicable provisions of the Labor Code, the Government Code and the Public Contract Code relating to public works projects and as required by the procedures and standards of the City with respect to the construction of its public works projects.
(e) The Developer shall submit faithful performance and payment bonds in form and substance reasonably acceptable to the City with respect to the City Improvements. (f) The Developer and its contractor and subcontractors shall be required to provide proof of insurance coverage throughout the term of the construction of the City Improvements, which they will construct in conformance with the City’s standard procedures and requirements. The City’s insurance requirements are set out in Section 21 herein. (g) The Developer and all such contractors shall comply with such other requirements relating to the construction of the City Improvements which the City may impose by written notification delivered to the Developer and each such contractor at the time either prior to the receipt of bids by the Developer for the construction of such City Improvements or, to the extent required as a result of changes in applicable laws, during the progress of construction thereof; provided that such other requirements shall only be imposed to the extent the City reasonably determines they are required in order to comply with applicable law. In accordance with Section 7, the Developer shall be deemed the awarding body and shall be solely responsible for compliance and enforcement of the provisions of the Labor Code, Government Code, and Public Contract Code. (h) A “Change Order” is an order from the Developer to a contractor authorizing a change in the work to be performed and a “Significant Change Order” is an order from the Developer to a contractor authorizing a change in the work to be performed where such Change Order is larger than 10% of the contract amount for such City Improvement. After the effective date Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 76

Menifee Mayor and City Council
April 2, 2025
Page
893 of 1198

10 4897-8262-8122v4/200299-0027
of this Agreement, the Developer shall receive comments from the City Representative prior to the Developer’s approval of any Significant Change Order. The City Representative shall comment on or deny the Significant Change Order request within ten (10) calendar days of receipt of all necessary information. The City’s comments to a Significant Change Order shall not be unreasonably delayed, conditioned or withheld. After the effective date of this Agreement, field verification that the work was performed in accordance with a Change Order or a Significant Change Order shall be required, which verification shall be demonstrated by the signature of a City Representative on the Change Order or Significant Change Order. The Developer shall not be entitled to be compensated for costs associated with a Change Order or a Significant Change Order that has not been approved or if the work has not been verified, as applicable, by the City Representative in accordance with this Section 7(h).

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

8. Inspection; Completion of Construction. The requirements of this Section 8 shall not apply to any City Improvement that was complete as determined by the City Council prior to the adoption by the City Council of the resolution forming the CFD, but they shall apply to all other City Improvements for which the Acquisition Price is paid.

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

Within three (3) business days of receipt of written notification from City inspectors that a City Improvement has been completed in accordance with the Plans, the City Representative shall notify the Developer in writing that such City Improvement has been satisfactorily completed. Upon receiving such notification, the Developer shall file a Notice of Completion with the County of Riverside Recorders Office, pursuant to the provisions of Section 3093 of the Civil Code. The Developer shall furnish to the City a duplicate copy of each such Notice of Completion showing thereon the date of filing with the County of Riverside (the “County”). City will in turn file a notice with the County for acceptance.

9. Liens. With respect to any City Improvement that was complete (as determined by the City Council) prior to the adoption by the City Council of the resolution forming the CFD, prior to any payment by the CFD to the Developer for such City Improvement, the Developer shall provide to the City such evidence or proof as the City shall require that all persons, firms and corporations supplying work, labor, materials, supplies and equipment for the construction of the City Improvements have been paid, and that no claims of liens have been recorded by or on behalf of any such person, firm or corporation. With respect to City Improvements, upon the earlier of (i) receipt of all applicable lien releases, or (ii) expiration of the time for the recording of claim of liens as prescribed by Sections 3115 and 3116 of the Civil Code the Developer shall provide to the City such evidence or proof as the City shall require that all persons, firms and corporations supplying work, Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 77

Menifee Mayor and City Council
April 2, 2025
Page
894 of 1198

11 4897-8262-8122v4/200299-0027
labor, materials, supplies and equipment for the construction of the City Improvements have been paid, and that no claims of liens have been recorded by or on behalf of any such person, firm or corporation.

10. Acquisition; Acquisition Price; Source of Funds. The acquisition price of a City Improvement that was complete (as determined by the City Council) prior to the adoption by the City Council of the resolution forming the CFD shall be its fair market value, as determined by the City Manager or his or her designee, as of the date of acquisition. The City shall consider input and data provided by the Developer prior to determining the final fair market value. The Actual Cost (as defined below) of the City Improvement shall be presumed to be its fair market value unless there is reasonable evidence that a lower amount is the fair market value.

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

Provided the Developer has complied with the requirements of this Agreement, the City agrees to pay the acquisition price of a completed City Improvement to the Developer or its designee within thirty (30) days after the Developer’s satisfaction of the preconditions to such payment stated herein, but only to the extent there are sufficient funds available in the City Improvements Account.

Except in the case of a City Improvement described in the first paragraph of this Section, the acquisition price to be paid from Bond proceeds for the acquisition of a City Improvement by the City shall be the least of (1) the value of the City Improvement; or (2) the total of the Actual Costs of the City Improvement (“Acquisition Price”). The Actual Cost of the City Improvement shall be presumed to be its Acquisition Price unless there is reasonable evidence that a lower amount is the actual value.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 78

Menifee Mayor and City Council
April 2, 2025
Page
895 of 1198

12 4897-8262-8122v4/200299-0027
As a condition to the payment of the Acquisition Price, the ownership of the completed City Improvement shall be transferred to the City by grant deed, bill of sale or such other documentation as such public agency may require free and clear of all taxes, liens, encumbrances, and assessments, but subject to any exceptions determined by the City to not interfere with the actual or intended use of the land or interest therein (including the lien of a community facilities district so long as the subject property is exempt from taxation or is otherwise not taxable by such community facilities district). Upon the transfer of ownership of City Improvements or any portion thereof to the City, the City shall be responsible for the maintenance of such City Improvements or the portion transferred.

Notwithstanding the foregoing, the Acquisition Price of a City Improvement may be paid prior to transfer of ownership and acceptance of the City Improvement if it is substantially completed at the time of payment. The City Improvement shall be considered “substantially complete” when it has been reasonably determined by the City to be usable, subject to final completion of such items as the final lift or any other items not essential to the primary use or operation of the City Improvement.

For purposes of determining the Acquisition Price to be paid by the Community Facilities District for the acquisition of the City Improvements by the City (other than City Improvements described in the first paragraph of this Section), the value of such City Improvements shall include the construction costs specified in the City-approved contracts (subject to the next sentence), Change Orders, and City-approved Significant Change Orders conforming to Section 6, as hereinbefore specified. City approval is a condition prior to initiation of contract work for City Improvements bid after the effective date of this Agreement. However, if the City reasonably determines that the additional Actual Costs are excessive and that the value of the City Improvements is less than the total amount of such Actual Costs and such construction costs, the price to be paid for the acquisition of the City Improvements shall be the value thereof as determined by the Engineer, subject, however, to the Developer’s right to appeal to the City Council.

Upon completion of the construction of a City Improvement, the Developer shall deliver or cause to be delivered to the City a Disbursement Request Form in substantially the form of Exhibit “D,” attached hereto, copies of the contract(s) with the contractor(s) who have constructed the City Improvement and other relevant documentation with regard to the payments made to such contractor(s) and each of them for the construction of the City Improvement, documentation evidencing payment of prevailing wages, and shall also provide to the City invoices and purchase orders with respect to all equipment, materials and labor purchased for the construction of the City Improvements. The City shall require the Engineer to complete its determination of the value of the City Improvements as promptly as is reasonably possible.

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

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 79

Menifee Mayor and City Council
April 2, 2025
Page
896 of 1198

13 4897-8262-8122v4/200299-0027
In addition to the foregoing, the City shall have the right to withhold payment for acquisition of a City Improvement, if:
(a) the Developer or any of its affiliates is delinquent in the payment of any Special Taxes levied by the Community Facilities District on properties then owned by the Developer or any of its affiliates within the CFD, or
(b) the Developer is not then in substantial compliance with a condition or obligation imposed upon the Developer Property by the City, including but not limited to, payment of all applicable fees, dedication of all applicable rights-of-way or other property and construction requirements.

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

11. Easements and/or Fee Title Ownership Deeds. Without limiting the Developer’s rights to reimbursement for such grants pursuant to Section 10 above, the Developer shall, at the time the City acquires the City Improvements as provided in Section 10 hereof, grant or cause to be granted to the City, by appropriate instruments prescribed by the City, all easements across private property and/or fee title ownership deeds which may be reasonably necessary for the proper operation and maintenance of such City Improvements, or any part thereof, but only to the extent located within the Developer Property.

12. Permits. The Developer shall be responsible for obtaining all necessary construction permits from the City and/or the County (as appropriate) covering construction and installation of the City Improvement.

13. Maintenance. Prior to the transfer of ownership of a City Improvement by the Developer to the City, as provided in Section 10 hereof, the Developer shall be responsible for the maintenance thereof and shall require its contractor(s) to repair all facilities damaged by any party other than the City, prior to acceptance by the City and/or make corrections determined to be necessary by the City’s inspection personnel. The City shall not be permitted to place any City Improvement in service prior to acceptance of the same, unless the Developer otherwise consents in writing.

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

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 80

Menifee Mayor and City Council
April 2, 2025
Page
897 of 1198

14 4897-8262-8122v4/200299-0027

15. Ownership of Improvements. Notwithstanding the fact that some or all of the City Improvements may be constructed in dedicated street rights-of-way or on property which has been or will be dedicated to the City, each City Improvement shall be and remain the property of the Developer until acquired by the City as provided in this Agreement. The foregoing shall not apply to the Utility Improvements.

16. Materials and Workmanship Warranty. The requirements of this Section shall not apply to any City Improvement that was complete (as determined by the City Council) prior to the adoption by the City Council of the resolution forming the CFD, but they shall apply to all other City Improvements.

Upon the completion of the acquisition of a City Improvement by the City, the performance bond related to such individual City Improvement provided by the Developer pursuant to Section 7.1(e) hereof, shall be reduced by 90%, and the remaining 10% shall serve as a maintenance bond to guarantee that such City Improvement will be free from defects due to faulty workmanship or materials for a period of one year.

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

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

18. Miscellaneous Improvements. Improvements unrelated to the City Improvements and the City Fee Facility Improvements are described in Exhibit “C” attached hereto. The amounts deposited in the applicable Miscellaneous Improvements Account(s), if any, will be disbursed for the acquisition or construction of Miscellaneous Improvements in accordance with the provisions in the applicable Joint Community Facilities Agreement. Any amounts in the applicable Miscellaneous Improvements Account(s) shall be disbursed at the written direction of the City upon Developer’s submittal of a payment request which will be based upon applicable entity’s payment request form as provided for in the applicable Joint Community Facilities Agreement. Upon receipt of such payment request, the City shall submit a written requisition for payment of the requested amount to the Fiscal Agent for the Bonds, who shall directly pay the amount requested to the applicable entity.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 81

Menifee Mayor and City Council
April 2, 2025
Page
898 of 1198

15 4897-8262-8122v4/200299-0027

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

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

21. Insurance Requirements. For City Improvements bid after the effective date of this Agreement for which the Acquisition Price is paid, the Developer shall not commence work on such City Improvement under this Agreement prior to obtaining insurance with a company or companies acceptable to the City, nor shall the Developer allow any contractor or subcontractor to commence work on their respective contracts until all insurance required by this Agreement have been obtained.

The required insurance, endorsements and policy limits shall be as follows:

A. GENERAL LIABILITY
Developer shall obtain and maintain Commercial General Liability Insurance covering all operations by or on behalf of Contractor or their subcontractors providing insurance for bodily injury liability and property damage liability for the limits of liability indicated below and including coverage for:
•Premises and Operations
•Products and Completed Operations
•Contractual Liability
•Explosion, collapse and Underground Hazards, including subsidence and any other form of earth movement (if applicable)
•Personal Injury Liability
•Independent Contractors
NOTE: Claims-made or Modified Occurrence Policy are NOT ACCEPTABLE.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 82

Menifee Mayor and City Council
April 2, 2025
Page
899 of 1198

16 4897-8262-8122v4/200299-0027

1. LIMITS—Limits of liability shall be no less than:
a. Each Occurrence $2,000,000
b. Personal & Advertising Injury $2,000,000
c. Products/Completed Operations Aggregate $4,000,000
d. General Aggregate $4,000,000

2. ENDORSEMENTS—Endorsements MUST be attached to certificate and added to your policy:
a. Additional Insured endorsement naming City as additional insureds. b. Primary and non-contributory wording endorsement stating that the Contractor’s insurance is primary and any insurance maintained by the additional insureds is non-contributory.
c. A Waiver of Subrogation or Waiver of Transfer of Rights of Recovery Against Others To Us shall be issued in favor of those additional insureds named in A.2.a. above.

B. WORKERS COMPENSATION
Workers’ Compensation insurance shall be provided with statutory limits as required by applicable state law of regulation. If the Contractor is self-insured, it must provide proof of that fact.

1. LIMITS—Employer’s Liability Limits shall be no less than:
a. Each Accident for Bodily Injury by Accident $1,000,000 b. Each Employee for Bodily Injury by Disease $1,000,000 c. Policy Limit for Bodily Injury by Disease $1,000,000

2. ENDORSEMENTS—Endorsements MUST be attached to certificate and added to your policy:
a. WAIVER OF SUBROGATION—A Waiver of Subrogation or Waiver of Transfer of Rights of Recovery Against Others to Us shall be issued in favor of those additional insureds named in A.2.a. above.

C. AUTOMOBILE
Automobile Liability insurance shall include coverage for all owned (if any), hired and non-owned automobiles.

1. LIMITS—Limits of Liability shall be no less than:
a. Combined Single Limit $1,000,000
or
b. Bodily Injury Each Person Limit $1,000,000
c. Bodily Injury Per Occurrence Limit $1,000,000
d. Property Damage Per Occurrence Limit $1,000,000

2. ENDORSEMENTS—Endorsements MUST be attached to certificate and added to your policy:

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 83

Menifee Mayor and City Council
April 2, 2025
Page
900 of 1198

17 4897-8262-8122v4/200299-0027
a. Additional Insureds as provided in ISO form CA 00 01 or its equivalent naming those additional insureds named in A.2.a. above. b. Primary and non-contributory wording endorsement stating that the contractor’s insurance is primary and any insurance maintained by the additional insureds is non-contributory.
c. Waiver of Subrogation as provided in ISO form CA 00 01 or its equivalent in favor of those additional insureds named in A.2.a. above.

22. Conflict With Other Agreements. Except as specifically provided herein, nothing contained herein shall be construed as releasing Developer from any condition of development or requirement imposed by any other agreement with City. In the event of a conflicting provision, such other agreement shall prevail unless such conflicting provision is specifically waived or modified in writing by City.

23. Notices. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to either Party shall be deemed to have been received when personally delivered or seventy-two (72) hours following deposit of the same in any United States Post Office in California, registered or certified, postage prepaid. Any notice to the Community Facilities District or the City shall be addressed to City of Menifee, 29844 Haun Road, Menifee, CA 92586, Attention:

Chief Financial Officer. Any notice to Developer shall be addressed to Lennar Homes of California, LLC, 4140 Temescal Canyon Rd., Suite 410, Corona, CA 92883, Attention: Bryce Fleming.

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

24. No Gift or Waiver.

24.1 No Gift or Waiver for City Improvements. The Developer and the City acknowledge that:
(a) The Developer or its predecessor may have constructed or may be constructing City Improvements before funds that will be used to acquire them are available with the expectation that the Developer will be reimbursed for such City Improvements to the extent and in the manner set forth in this Agreement.

The City may inspect City Improvements and process Disbursement Request Forms even if funds from the proceeds of Bonds available at the time of such inspection and processing do not exist or are not then sufficient to satisfy the Disbursement Request in full. (b) The Developer may convey City Improvements to the City and the City may accept such City Improvements even if funds from the proceeds of Bonds available at the time of such conveyance and acceptance do not exist or are not then sufficient to satisfy the Disbursement Request in full.

If the City accepts City Improvements before a Disbursement Request is paid in full, the unpaid balance of the Disbursement Request will be paid from time to time, in any number of installments and irrespective of the length of time payment is deferred, as funds from the proceeds of Bonds become available.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 84

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April 2, 2025
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(c) The Developer’s conveyance or dedication of City Improvements to the City before the availability of funds from the proceeds of Bonds to acquire the City Improvements is not and shall not be deemed, a gift or a waiver of the Developer’s right to payment of the purchase price of such City Improvements pursuant to this Agreement.

24.2 No Gift or Waiver for City Fees. The Developer and the City acknowledge that:
(a) Prior to the availability of funds from the proceeds of Bonds, the Developer or its predecessor may have been or may be required to deposit funds to assure payment of applicable City Fees of the City.

The Developer or its predecessor has deposited or will be depositing such funds with the expectation that the Developer will be reimbursed for these Deposits to the extent and in the manner set forth in this Agreement.
(b) The reimbursement of such Deposits pursuant to Section 17 of this Agreement may occur from time to time, in any number of installments and irrespective of the length of time payment is deferred, as funds become available.

The Developer’s deposit of such funds to the City before the availability of funds to reimburse the Developer is not, and shall not be deemed, a gift or a waiver of the Developer’s right to reimbursement of such Deposits pursuant to this Agreement.

25. General Provisions.

25.1 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the City and the Developer and their respective heirs, executors, legal representatives, successors, and authorized assigns.

25.2 Amendment. This Agreement may be amended at any time but only in writing signed by each Party hereto.

25.3 Entire Agreement. This Agreement, and the agreements referenced herein, contains the entire understanding and agreement between the Parties with respect to the matters provided for herein and supersedes all prior agreements and negotiations between the Parties with respect to the subject matter of this Agreement. There are no oral or written representations, understanding, undertakings or agreements which are not contained or expressly referred to herein, and any such representations, understandings or agreements are superseded by this Agreement.

Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by the other Parties hereto, or the failure by a Party to exercise its rights upon the default of another Party, shall not constitute a waiver of such Party’s right to insist and demand strict compliance by such other Parties with the terms of this Agreement thereafter. This Agreement shall be binding upon, and enforceable by and against the Community Facilities District upon the establishment of the Community Facilities District.

25.4 Exhibits. All exhibits attached hereto are incorporated into this Agreement by reference.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 85

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April 2, 2025
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25.5 Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible.

25.6 Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by the other Parties hereto, or the failure by a Party to exercise its rights upon the default of another Party, shall not constitute a waiver of such Party’s right to insist and demand strict compliance by such other Parties with the terms of this Agreement thereafter.

25.7 No Third Party Beneficiaries. Except as provided explicitly in this Agreement, no person or entity shall be deemed to be a third party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to confer upon any person or entity, other than the City, the Community Facilities District, the Developer, and the Security Provider (and their respective successors and assigns), any rights, remedies, obligations or liabilities under or by reason of this Agreement.

25.8 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute but one instrument.

25.9 Assignment. Developer may assign all or any of its rights pursuant to this Agreement to a purchaser of all or any portion of the Developer Property. Such a purchaser and assignee shall, as a condition to taking an assignment of such rights, enter into an assignment and assumption agreement with the City and Developer, in a form reasonably acceptable to Developer and the City, whereby such rights assigned are specified and such purchaser agrees, except as may be otherwise specifically provided therein, to assume the obligations of Developer pursuant to this Agreement and to be bound thereby. A company that acquires all of the assets of the Developer, including ownership of the Developer itself, shall be deemed a successor and shall not require an assignment or assumption agreement to be bound by, and enjoy the benefits of, this Agreement.

25.10 Governing Law. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California.

25.11 Construction of Agreement. This Agreement has been reviewed by legal counsel for both the City and Developer and shall be deemed for all purposes to have been jointly drafted by the City and Developer. No presumption or rule that ambiguities shall be construed against the drafting Party shall apply to the interpretation or enforcement of this Agreement.

25.12 Termination. The provisions of this Agreement related to the acquisition and financing of the Improvements shall terminate and be of no further force or effect if the first series of Bonds for the CFD are not sold within ten years from the date of this Agreement unless extended by agreement of all the Parties. If the City is unable to sell the first series of Bonds for the CFD after diligent, commercially reasonable efforts to do so, this Agreement shall terminate and be of no further force and effect; provided, however, in such event, any collected Special Taxes remaining after the payment of administrative expenses of the CFD and reimbursement to the Developer of CFD formation costs shall be used to pay for Improvements in accordance with this Agreement and Developer shall receive a credit against City Fees otherwise payable to City in the amount so used to pay for City Fee Facility Improvements.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 86

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April 2, 2025
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25.13 Attorneys’ Fees. In the event of any action or proceeding, including an arbitration or a reference pursuant to Section 638 et seq., of the Code of Civil Procedure brought by any Party against any other under this Agreement, the prevailing Party shall be entitled to recover its actual attorneys’ fees and all fees, costs and expenses incurred for prosecution, defense, consultation, or advice in such action or proceeding. In addition to the foregoing, the prevailing Party shall be entitled to its actual attorneys’ fees and all fees, costs and expenses incurred in any post-judgment proceedings to collect or enforce the judgment. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement.

25.14 Venue and Forum. Any action at law or in equity arising under this Agreement brought by any Party hereto for the purpose of enforcing, construing or determining the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the County of Riverside, State of California, and the Parties waive all provisions of law providing for the filing removal or change of venue to any other Court.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 87

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April 2, 2025
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year written below.

DATED: April 2, 2025
CITY OF MENIFEE, a political subdivision
of the State of California
By:

Armando G. Villa, City Manager
ATTEST:

By:

Stephanie Roseen, City Clerk
APPROVED AS TO FORM:

CITY ATTORNEY FOR THE CITY OF

MENIFEE
By:

Jeffrey T. Melching, City Attorney

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

Name:

Title:

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 88

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April 2, 2025
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LIST OF EXHIBITS

EXHIBIT A - DESCRIPTION OF DEVELOPER PROPERTY

EXHIBIT B - DESCRIPTION OF COST ESTIMATES

EXHIBIT C - MISCELLANEOUS IMPROVEMENTS

EXHIBIT D - DISBURSEMENT REQUEST FORM
Item Title: 11.4
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April 2, 2025
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EXHIBIT A

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

County of Riverside Assessor Parcel Nos:
331-250-028
331-250-029
331-250-030
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 90

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April 2, 2025
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EXHIBIT B
DESCRIPTION OF COST ESTIMATES OF THE IMPROVEMENTS (1)
I. CITY FEE FACILITY IMPROVEMENTS.

Estimated Cost of the City Fee Facility Improvements
Description Estimated Cost
Law Enforcement $128,313
Fire Facilities 89,677
Circulation 635,362
General Government 163,050
Parks & Recreation 238,903
Quimby Fees 492,075
City Projects 349,476
Total City Fee Facility Improvements $2,096,857
II. CITY IMPROVEMENTS.

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

Description Estimated Cost
Menifee/Rouse Road Traffic Signal $129,619
Menifee & Rouse Street, Street Light, & Median 1,474,232 Menifee Road - Overhead Utility Undergrounding (Rule 20) 1,279,174 Rouse Road - Overhead Utility Undergrounding (Rule 20) 863,649 Dry Utilities (5% Limitation) 445,500
Total City Improvements $4,192,174
(1) Amounts are estimates and subject to change. The Acquisition Price will be funded with Bond proceeds.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 91

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April 2, 2025
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EXHIBIT C

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

Description Estimated Cost
Sewer Financial Participation Charge $ $563,112
Sewer Treatment Plant Capacity Charge 1,067,418
Water Financial Participation Charge 964,715
Water Supply Development Fee 65,286
1" Meter Drop-In Fee 63,504
1/5" Irrigation Meter Capacity Fee 67,320
1/5" Irrigation Meter Installation Fee 1,322
Water Frontage Fees 39,904
Total Estimated Water District Facilities Fees $2,832,581 Those facilities constructed by or on behalf of the Developer and needed by the Water District in order to provide services to the Developer Property and also include any of the following:

Estimated Cost of the Water District Improvements
Description Estimated Cost
$
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 92

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April 2, 2025
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EXHIBIT D
CFD NO. 2025-4 (HERITAGE VILLAGE) OF THE CITY OF MENIFEE

DISBURSEMENT REQUEST FORM

1. Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee (the “CFD”) is hereby requested to pay from the ________________________ Account, or any applicable account or sub-account thereof, established by the CFD in connection with its 20__ Special Tax Bonds (the “Bonds”) to City of Menifee (the “City”) as payee, the sum set forth below:
$_____________________ (the Requested Amount”)

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

Or, City Improvements as supported by attached documentation.

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

4. The City, as payee, is hereby directing payment of the Requested Amount be payable to Lennar Homes of California, LLC, a California limited liability company (the “Developer”), pursuant to the wiring instructions attached hereto.

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

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

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 93

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April 2, 2025
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Dated: DEVELOPER:

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

Name:

Title:

Dated: CITY OF MENIFEE
By:

Its:
[ATTACH WIRING INSTRUCTIONS]
Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 94

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April 2, 2025
Page
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JOINT COMMUNITY FACILITIES AGREEMENT
relating to
Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee by and among
City of Menifee, Eastern Municipal Water District and
Lennar Homes of California, LLC
THIS JOINT COMMUNITY FACILITIES AGREEMENT (the “Agreement”) is entered into effective as of the 2nd day of April, 2025, by and among CITY OF MENIFEE, a California general law city (the “City”), EASTERN MUNICIPAL WATER DISTRICT, a public agency organized and existing pursuant to Division 20 of the California Water Code (“EMWD”), and LENNAR HOMES OF CALIFORNIA, LLC, a California limited liability company (“Developer”), and relates to the formation by the City of a community facilities district known as “Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee” (the “CFD”) for the purpose of financing certain facilities to be owned, operated or maintained by the City or EMWD from proceeds of bonds issued by the CFD and the proceeds of special taxes levied by the CFD.

R E C I T A L S:

A. The property (“Property”) depicted in Exhibit “A” hereto, which is located in the City, County of Riverside, State of California, constitutes the land within the boundaries of the CFD.

B. Developer has the rights to develop the Property included in the CFD. Developer intends to develop the Property for residential purposes. The Property is described in Exhibit “B” hereto.

C. The Developer entered into an Option Agreement (the “Option Agreement”) with Millrose Properties California, LLC, a California limited partnership (the “Millrose Land Bank”).

Under the Option Agreement, the Developer has the option to acquire various lots of the Property according to a takedown schedule; and
D. The City received a petition in accordance with the Act (defined below) to form the CFD for the purpose of financing, among other things, certain public facilities to be constructed and owned and operated by EMWD (the “EMWD Facilities”) in lieu of the payment of EMWD Fees (defined herein) and certain water and sewer facilities to be acquired by EMWD (the “Acquisition Facilities”).

E. In conjunction with the issuance of permits for the construction of homes on the Property and/or receipt of water meters for such homes, the Developer, or its successors or assigns, may elect to advance EMWD Facilities costs in lieu of payment of EMWD Fees (the “Advances”) before Bond Proceeds (defined herein) are available in sufficient amounts to pay for EMWD Facilities.

In such case, the Developer shall be entitled to (i) reimbursement of such Advances limited to Bond Proceeds available to EMWD, if any (the Advances being considered an interest free loan by the Developer with no repayment obligation except to the extent there are Bond Proceeds received by or made available to EMWD as described herein, all as further described in Section 5(a) below), and Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 95

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(ii) credit against EMWD Fees which would otherwise be due to EMWD equal to the amount of Bond Proceeds disbursed to EMWD or at the direction of EMWD for EMWD Facilities, all as further described herein.

F. The City will have sole discretion and responsibility for the formation and administration of the CFD.

G. The City is authorized by Section 53313.5 of the Act to assist in the financing of the acquisition and/or construction of the EMWD Facilities and/or the Acquisition Facilities. This Agreement constitutes a joint community facilities agreement, within the meaning of Section 53316.2 of the Act, by and among EMWD, the Developer and the City, pursuant to which the CFD, when and if formed, will be authorized to finance the acquisition and/or construction of all or a portion of the EMWD Facilities and/or the Acquisition Facilities. As authorized by Section 53316.6 of the Act, responsibility for constructing, providing for and operating the EMWD Facilities and/or the Acquisition Facilities is delegated to EMWD.

H. The Parties (defined below) hereto find and determine that the residents residing within the boundaries of EMWD, the City and the CFD will be benefited by the construction and/or acquisition of the EMWD Facilities and/or the Acquisition Facilities and that this Agreement is beneficial to the interests of such residents.

AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Parties hereto agree as follows:

1. Recitals. Each of the above recitals is incorporated herein and is true and correct.

2. Definitions. Unless the context clearly otherwise requires, the terms defined in this Section shall, for all purposes of this Agreement, have the meanings herein specified. (a) “Acquisition Facility(ies)” means the sewer and water facilities described as such in Exhibit “C” hereto.
(b) “Act” means the Mello-Roos Community Facilities Act of 1982, Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code.
(c) “Advance” or “Advances” means an amount advanced by Developer to EMWD for EMWD Facilities in lieu of payment of EMWD Fees prior to the availability of sufficient Bond Proceeds. Advances shall be deemed payment of EMWD Fees to the extent sufficient Bond Proceeds are not received by or made available to EMWD. (d) “Bond Proceeds” or “Proceeds of the Bonds” shall mean those net funds generated by the sale of the Bonds and investment earnings thereon, net of costs of issuance, reserve fund, capitalized interest and administrative expenses, and may include net funds generated by the levy of Special Taxes and investment earnings thereon.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 96

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April 2, 2025
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(e) “Bond Resolution” means that Resolution, Resolution Supplement, Fiscal Agent Agreement, Indenture of Trust or other equivalent document(s) providing for the issuance of the Bonds.
(f) “Bonds” shall mean those bonds, or other securities, issued by, or on behalf of the CFD, in one or more series, as authorized by the qualified electors within the CFD. (g) “Disbursement Request” means a request for payment relating to EMWD Facilities in the form attached hereto as Exhibit “D.”
(h) “EMWD Engineer Representative” means an EMWD engineer duly authorized to act on behalf of EMWD or his or her designee.
(i) “EMWD Fees” means water supply development fees, water backup fees, sewer backup fees, sewer treatment capacity charges and all components thereof imposed by EMWD upon the Property to finance EMWD Facilities.
(j) “EMWD Facilities” means those sewer and water facilities listed on Exhibit “C” hereto, which are necessary for the provision of water and sewer services to the Property and paid for with Bond Proceeds in lieu of the payment of EMWD Fees. (k) “Other Facilities Account of the Improvement Fund” means the fund, account or subaccount of the CFD (regardless of its designation within the Bond Resolution) into which a portion of the Bond Proceeds may be deposited in accordance with the Bond Resolution to finance EMWD Facilities and/or the Acquisition Facilities and which may have subaccounts. (l) “Party” or “Parties” shall mean any one or all of the parties to this Agreement. (m) “Payment Request” means a request for payment relating to Acquisition Facilities in the form attached hereto as Exhibit “E”.
(n) “Rate and Method” means the Rate and Method of Apportionment of the Special Tax authorizing the levy and collection of Special Taxes pursuant to proceedings undertaken for the formation of the CFD pursuant to the Act.
(o) “Special Taxes” means the special taxes authorized to be levied and collected within the CFD pursuant to the Rate and Method.
(p) “State” means the State of California.

3. Formation of the CFD. The City has undertaken to analyze the appropriateness of forming the CFD to finance the EMWD Facilities, Acquisition Facilities, and other facilities. The City has and will retain, at the expense of the Developer, the necessary consultants to analyze the formation of the CFD.

4. Sale of Bonds and Use of Bond Proceeds. In the event that the CFD is formed and Bonds are issued, the City and the Developer shall determine the amount of Bond Proceeds to be deposited in the Other Facilities Account of the Improvement Fund and each subaccount thereof. As Bond Proceeds are transferred to EMWD and reserved to fund EMWD Facilities, as described in Section 5 below, the Developer shall receive a credit in the amount transferred against the payment of Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 97

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EMWD Fees with respect to the Property. Nothing herein shall supersede the obligation of an owner of the Property to make an Advance or pay EMWD Fees to EMWD when due. The purpose of this Agreement is to provide a mechanism by which the CFD may issue the Bonds and levy Special Taxes to provide a source of funds to finance EMWD Facilities and Acquisition Facilities in lieu of the payment of EMWD Fees and provision of Acquisition Facilities. In the event that Bond Proceeds, including investment earnings thereon, are not available or sufficient to satisfy the obligation, then the Developer shall remain obligated to make an Advance for which it will receive no reimbursement (except to the extent Bond Proceeds later become available to EMWD), or pay EMWD Fees to EMWD as a condition of receiving water and sewer service to the Property.

The Bonds shall be issued only if, in its sole discretion, the City Council determines that all requirements of State and federal law and all City policies have been satisfied or have been waived by the City. Nothing in this Agreement shall confer upon EMWD or any owner of the Property, including Developer, a right to compel the issuance of the Bonds or the disbursement of Bond Proceeds to fund EMWD Facilities and/or Acquisition Facilities except in accordance with the terms of this Agreement.

If and when the CFD determines to issue Bonds, the CFD shall take such actions necessary in its reasonable discretion to ensure the total effective tax rate within the CFD does not exceed two percent (2%) at the time of Bond sale. The total effective tax rate shall be based on a method of determination of property values reasonably acceptable to the City. CFD shall not include EMWD’s name on the property owners’ special tax bills within the CFD.

By entering into this Agreement and requisitioning Bond Proceeds as described herein, EMWD is not passing upon, determining or assuming the tax-exempt status of the Bonds for federal or California state income tax purposes.

5. Disbursements for EMWD Facilities.
(a) Upon the funding of the Other Facilities Account of the Improvement Fund with funds reserved to fund EMWD Facilities, the Developer shall notify EMWD of the amount of Bond Proceeds reserved to fund EMWD Facilities and the Developer and EMWD may execute and submit a Disbursement Request for payment to the City or the CFD requesting disbursement of an amount equal to all or a portion of Advances from the Other Facilities Account of the Improvement Fund to the extent that Bond Proceeds are available in the Other Facilities Account of the Improvement Fund for such purpose. Upon EMWD’s receipt of funds pursuant to such Disbursement Request, the Developer shall receive reimbursement of the Advances from EMWD. To facilitate EMWD’s bookkeeping, EMWD may direct in a Disbursement Request, that all or a portion of a payment be made directly from the Other Facilities Account to the Developer as reimbursement for Advances made by the Developer. In the event of a reimbursement to the Developer pursuant to the preceding sentence, EMWD shall account for an equivalent amount of Advances previously received from the Developer in accordance with Section 5(c) below.

To the extent that EMWD expends all or a portion of an Advance pending the deposit of Bond Proceeds in the Other Facilities Account of the Improvement Fund, for purposes of Treasury Regulations regarding investment and expenditure of Bond Proceeds and State law provisions regarding financing of public capital facilities, the Advance shall be a considered an interest free loan by the Developer, which EMWD only agrees to repay to the extent of the deposit, if any, of Bond Proceeds in the Other Facilities Account of the Improvement Fund and EMWD’s written direction as described below to pay all or a portion of such deposit to the Developer as repayment of an Advance.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 98

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April 2, 2025
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(b) From time to time following the funding of the Other Facilities Account of the Improvement Fund, the Developer may notify EMWD in writing and the Developer and EMWD may jointly request a disbursement from the Other Facilities Account of the Improvement Fund to fund EMWD Facilities by executing and submitting a Disbursement Request. Upon receipt of such Disbursement Request completed in accordance with the terms of this Agreement, the CFD shall wire transfer or otherwise pay to EMWD (or upon EMWD’s written direction pay to the Developer or an EMWD contractor) such requested funds to the extent that Bond Proceeds are available in the Other Facilities Account of the Improvement Fund for such purpose. Upon such notice and EMWD’s receipt of such disbursement (or upon payment to the Developer or an EMWD contractor in accordance with directions from EMWD relating to EMWD Facilities), the Developer shall be deemed to have satisfied the applicable EMWD Fees with respect to the number of dwelling units or lots for which the EMWD Fees would otherwise have been required in an amount equal to such disbursement. (c) EMWD agrees that prior to submitting a Disbursement Request requesting payment from the CFD it shall review and approve all costs included in its request and will have already paid or incurred such costs of EMWD Facilities from its own funds (which may include Advances from the Developer) subsequent to the date of this Agreement, or will disburse such amounts to pay the costs of EMWD Facilities following receipt of funds from the CFD. In the event that EMWD does not disburse any Bond Proceeds (or equivalent amount of Advances repaid pursuant to the second to the last sentence of the first paragraph of Section 5(a) above) received by it to third parties within five banking days of receipt, it will trace and report to the CFD all earnings, if any, earned by EMWD, from the date of receipt of such Bond Proceeds by EMWD (or the date of disbursement pursuant to the second to the last sentence of the first paragraph of Section 5(a) above) to the date of expenditure by EMWD for capital costs of the EMWD Facilities. Such report shall be delivered at least semiannually until all Bond Proceeds are expended by EMWD. EMWD agrees that in processing the above disbursements it will comply with all legal requirements for the expenditure of Bond Proceeds under the Internal Revenue Code of 1986 and any amendments thereto. As a condition to receiving any Bond Proceeds, EMWD agrees that it shall provide to the CFD, a certificate to the effect that EMWD confirms the representations contained in Section 5 hereof, EMWD agrees to comply with the provisions of the tax certificate delivered by the CFD in connection with the Bonds, and such other matters as the CFD may reasonably request upon which the CFD and its bond counsel may rely in connection with the issuance of such Bonds and their conclusion that interest on such Bonds is not included in gross income for federal income tax purposes. (d) EMWD agrees to maintain adequate internal controls over its payment function and to maintain accounting records in accordance with generally accepted accounting procedures.

EMWD will, upon request, provide the City and/or the Developer with access to EMWD’s records related to the EMWD Facilities and expenditure of Advances and will provide to the City its annual financial report certified by an independent certified public accountant for purposes of assisting the City in calculating the arbitrage rebate obligation of the CFD, if any. (e) The City or the CFD agrees to maintain full and accurate records of all amounts, and investment earnings, if any, expended from the Other Facilities Account of the Improvement Fund and expenditure of Advances. The City or the CFD will, upon request, provide EMWD and/or Developer with access to the City’s or the CFD’s records related to the Other Facilities Account of the Improvement Fund.
(f) The City acknowledges that it is in receipt of and has reviewed the EMWD Comprehensive Debt Policy (“Debt Policy”). At the time of formation of the CFD, the City and the Item Title: 11.4
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CFD are in conformance with Section 3.1 of the Debt Policy and it is expected that the City and CFD will remain in conformance with Section 3.1 at the time of any Bond sale. However, City and EMWD acknowledge that the City has the ultimate responsibility for issuance of the Bonds, the administration of the CFD, and the tax-exempt status of any Bonds issued by the CFD. Accordingly, the City Council shall have ultimate responsibility for making all decisions with respect to the issuance of any CFD Bonds and the levy of CFD Special Taxes.

6. Ownership of EMWD Facilities and Acquisition Facilities. The EMWD Facilities and Acquisition Facilities shall be and remain the property of EMWD.

7. Acquisition Facilities. The requirements of this Section 7 shall apply to any Acquisition Facility for which a Payment Request is submitted to EMWD pursuant to this Section 7. (a) Design Plans and Specifications. All plans, specifications and bid documents for the Acquisition Facility (“Plans”) constructed or to be constructed by the Developer shall be prepared by the Developer at the Developer’s initial expense, subject to approval by EMWD. Costs for preparation of the Plans shall be included in the acquisition price. Reimbursement of costs for plan revisions will be considered on a case by case basis. The Developer shall not award bids for construction, or commence or cause commencement of construction, of the Acquisition Facility until the Plans and bidding documents have been approved by EMWD. The bid opening for the Acquisition Facility shall be coordinated with and take place at EMWD’s offices, with EMWD personnel in attendance.
(b) Construction of Acquisition Facilities. A qualified engineering firm (the “Field Engineer”) shall be employed by the Developer to provide all field engineering surveys determined to be necessary by the EMWD’s inspection personnel. Field Engineer shall promptly furnish to EMWD a complete set of grade sheets listing all locations, offsets, etc., in accordance with good engineering practices, and attendant data and reports resulting from Field Engineer’s engineering surveys and/or proposed facility design changes. EMWD shall have the right, but not the obligation, to review, evaluate and analyze whether such results comply with applicable specifications.

A full-time soil testing firm, approved by EMWD, shall be employed by the Developer to conduct soil compaction testing and certification. The Developer shall promptly furnish results of all such compaction testing to EMWD for its review, evaluation and decision as to compliance with applicable specifications. In the event the compaction is not in compliance with applicable specifications, the Developer shall be fully liable and responsible for the costs of achieving compliance.

A final report certifying all required compaction in accordance with the specifications shall be a condition of final acceptance of the Acquisition Facility.

The costs of all surveying, testing and reports associated with the Acquisition Facility furnished and constructed by the Developer’s contractor(s) shall be included in the acquisition price.

EMWD shall not be responsible for conducting any environmental, archaeological, biological, or cultural studies or any mitigation requirements that may be requested by appropriate Federal, State, and/or local agencies with respect to the Acquisition Facility. Any such work shall be paid for and conducted by the Developer and included in the acquisition price of the Acquisition Facility.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 100

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(c) EMWD Public Works Requirements. In order that the Acquisition Facility may be properly and readily acquired by EMWD, the Developer shall comply with all of the following requirements with respect to the Acquisition Facility, and the Developer shall provide such proof to the EMWD as EMWD may reasonably require and at such intervals and in such form as EMWD may reasonably require, that the following requirements have been satisfied as to the Acquisition Facility:
(i) The Developer shall prepare a bid package for review, comment and approval by the General Manager of EMWD or his designee (the “EMWD Representative”). (ii) The Developer shall, after obtaining at least three sealed bids for the construction of the Acquisition Facility in conformance with the procedures and requirements of EMWD, submit to EMWD written evidence of such competitive bidding procedure, including evidence of the means by which bids were solicited, a listing of all responsive bids and their amounts, and the name or names of the contractor or contractors to whom the Developer proposes to award the contracts for such construction, which shall be the lowest responsible bidder. (iii) The EMWD Representative shall attend the bid opening. If unable to attend the bid opening, the EMWD Representative shall approve or disapprove of a contractor or contractors, in writing, within five (5) business days after receipt from the Developer of the name or names of such contractor or contractors recommended by the Developer. If the EMWD Representative disapproves of any such contractor; the Developer shall select the next lowest responsible bidder from the competitive bids received who is acceptable to the EMWD Representative. (iv) The specifications and bid and contract documents shall require all such contractors to pay prevailing wages and to otherwise comply with applicable provisions of the Labor Code, the Government Code and the Public Contract Code relating to public works projects and as required by the procedures and standards of EMWD with respect to the construction of its public works projects.
(v) The Developer shall submit faithful performance and payment bonds conforming in all respects to the requirements set forth in EMWD’s “Standard Water and/or Sewer Facilities and Service Agreement.” The following documents shall be submitted to EMWD along with the performance and payment bonds:
(1) The original, or a certified copy, of the unrevoked appointment, power of attorney, bylaws, or other instrument entitling or authorizing the person who executed the bond to do so;
(2) A certified copy of the certificate of authority of the insurer issued by the State of California’s Insurance Commissioner; and (3) Copies of the insurer’s most recent annual and quarterly statements filed with the Department of Insurance.
(vi) The Developer and its contractor and subcontractors shall be required to provide proof of insurance coverage throughout the term of the construction of the Acquisition Facility, which they will construct in conformance with EMWD’s standard procedures and requirements. EMWD’s insurance requirements are set out in Section 7(n) herein.

Item Title: 11.4
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(vii) The Developer and all such contractors shall comply with such other requirements relating to the construction of the Acquisition Facility which EMWD may impose by written notification delivered to the Developer and each such contractor at the time either prior to the receipt of bids by the Developer for the construction of such Acquisition Facility or, to the extent required as a result of changes in applicable laws, during the progress of construction thereof. In accordance with Section 7(f), the Developer shall be deemed the awarding body and shall be solely responsible for compliance and enforcement of the provisions of the Labor Code, Government Code, and Public Contract Code.
(viii) A “Change Order” is an order from the Developer to a contractor authorizing a change in the work to be performed. The Developer shall receive comments from the EMWD Representative prior to the Developer’s approval of any Change Order. The EMWD Representative shall comment on or deny the Change Order request within five (5) business days of receipt of all necessary information. EMWD’s comments to a Change Order shall not be unreasonably delayed, conditioned or withheld. The Developer shall not be entitled to include in the acquisition price costs associated with a Change Order that have not been approved by the EMWD Representative. (d) Inspection; Completion of Construction. EMWD shall have primary responsibility for inspecting the Acquisition Facility to assure that the work is being accomplished in accordance with the Plans. Such inspection does not include inspection for compliance with safety requirements by the Developer’s contractor(s). EMWD’s personnel shall be granted access to each construction site at all reasonable times for the purpose of accomplishing such inspection. Upon satisfaction of EMWD’s inspectors, the Developer shall notify EMWD in writing that an Acquisition Facility has been completed in accordance with the Plans.

Within three (3) business days of receipt of written notification from EMWD inspectors that an Acquisition Facility has been completed in accordance with the Plans, the EMWD Representative shall notify the Developer in writing that such Acquisition Facility has been satisfactorily completed. Upon receiving such notification, the Developer shall file a Notice of Completion with the County of Riverside Recorder’s Office, pursuant to the provisions of Section 3093 of the Civil Code. The Developer shall furnish to EMWD a duplicate copy of each such Notice of Completion showing thereon the date of filing with the County of Riverside (the “County”). EMWD will in turn file a notice with the County for acceptance. (e) Liens. With respect to the Acquisition Facility, upon the earlier of (i) receipt of all applicable lien releases, or (ii) expiration of the time for the recording of claim of liens as prescribed by Sections 3115 and 3116 of the Civil Code, the Developer shall provide to EMWD such evidence or proof as EMWD shall require that all persons, firms and corporations supplying work, labor, materials, supplies and equipment for the construction of the Acquisition Facility have been paid, and that no claims of liens have been recorded by or on behalf of any such person, firm or corporation. (f) Acquisition; Acquisition Price; Source of Funds. The costs eligible to be included in the acquisition price of the Acquisition Facility (the “Actual Costs”) shall include:
(i) The actual hard costs for the construction of such Acquisition Facility as established by EMWD-approved construction contracts and approved Change Orders, including costs of payment, performance and maintenance bonds and insurance costs, pursuant to this Agreement;
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(ii) The design and engineering costs of such Acquisition Facility including, without limitation, the costs incurred in preparing the Plans. Costs for plan revisions will be considered on a case by case basis;
(iii) The costs of environmental evaluations and public agency permits and approvals attributable to the Acquisition Facility;
(iv) Costs incurred by the Developer for construction management and supervision of such Acquisition Facility, not to exceed five percent (5%) of the actual construction cost, subject to prior approval by EMWD of any construction management or supervision contract with respect to the Acquisition Facility;
(v) Professional costs associated with the Acquisition Facility such as engineering, inspection, construction staking, materials, testing and similar professional services; and (vi) Costs approved by EMWD of acquiring from an unrelated third party any real property or interests therein required for the Acquisition Facility including, without limitation, temporary construction easements, temporary by-pass road and maintenance easements.

Provided the Developer has complied with the requirements of this Agreement, EMWD agrees to execute and submit to the City a Payment Request for payment of the acquisition price of the completed Acquisition Facility to the Developer or its designee within thirty (30) days after the Developer’s satisfaction of the preconditions to such payment stated herein.

As a condition to EMWD’s execution of the Payment Request for the acquisition price, the property ownership of the completed Acquisition Facility shall be transferred to EMWD by grant deed, bill of sale or such other documentation as EMWD may require free and clear of all taxes, liens, encumbrances, and assessments, but subject to any exceptions determined by EMWD to not interfere with the actual or intended use of the land or interest therein (including the lien of a community facilities district so long as the subject property is exempt from taxation or is otherwise not taxable by such community facilities district). Upon the transfer of property ownership of the Acquisition Facility or any portion thereof to EMWD, EMWD shall be responsible for the maintenance of such Acquisition Facility or the portion transferred. Notwithstanding the foregoing, the acquisition price of an Acquisition Facility may be paid prior to transfer of property ownership and acceptance of the Acquisition Facility if it is substantially completed at the time of payment. The Acquisition Facility shall be considered “substantially complete” when it has been reasonably determined by EMWD to be usable, subject to final completion of such items as the final lift or any other items not essential to the primary use or operation of the Acquisition Facility.

For purposes of determining the acquisition price to be paid by the CFD for the acquisition of each Acquisition Facility by EMWD, the value of such Acquisition Facility shall include the construction costs specified in EMWD-approved contracts and EMWD-approved change orders conforming to this Section 7, as hereinbefore specified. EMWD approval is a condition prior to initiation of contract work. However, if EMWD reasonably determines that the additional Actual Costs are excessive and that the value of the Acquisition Facility is less than the total amount of such Actual Costs and such construction costs, the price to be paid for the acquisition of the Acquisition Facility shall be the value thereof as determined by the EMWD Engineer Representative, subject, however, to the Developer’s right to appeal to EMWD’s Board of Directors.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 103

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Upon completion of the construction of an Acquisition Facility, the Developer shall deliver or cause to be delivered to EMWD a Payment Request in substantially the form of Exhibit “E,” attached hereto, copies of the contract(s) with the contractor(s) who have constructed the Acquisition Facility and other relevant documentation with regard to the payments made to such contractor(s) and each of them for the construction of the Acquisition Facility, documentation evidencing payment of prevailing wages, and shall also provide to EMWD invoices and purchase orders with respect to all equipment, materials and labor purchased for the construction of the Acquisition Facility. EMWD shall require the EMWD Engineer Representative to complete its determination of the acquisition price of the Acquisition Facility as promptly as is reasonably possible.

Notwithstanding the preceding provisions of this Section, the source of funds for the acquisition of the Acquisition Facility or any portion thereof shall be funds on deposit in the Other Facilities Account of the Improvement Fund. If no such funds are available, EMWD shall not be required to acquire the Acquisition Facility from the Developer. In such event, the Developer shall complete the design and construction and offer to EMWD property ownership of such portions of the Acquisition Facility as are required to be constructed by the Developer as a condition to recordation of subdivision maps for the Property, but need not construct any portion of the Acquisition Facility which it is not so required to construct. Reimbursement for these facilities would be made pursuant to the “Standard Water and/or Sewer Facilities and Service Agreement(s)” by and between EMWD and the Developer.
(g) Easements and/or Fee Title Property Ownership Deeds. The Developer shall, at the time EMWD acquires the Acquisition Facility as provided in Section 7(f) hereof, grant or cause to be granted to EMWD, by appropriate instruments prescribed by EMWD, all easements across private property and/or fee title property ownership deeds which may be reasonably necessary for the proper operation and maintenance of such Acquisition Facility, or any part thereof. (h) Permits. The Developer shall be responsible for obtaining all necessary construction permits from the City covering construction and installation of the Acquisition Facility.

EMWD will request the City to issue an “operate and maintain permit” to EMWD, which will become effective upon the completion of the Acquisition Facility and acceptance of property ownership therewith by EMWD.
(i) Maintenance. Prior to the transfer of property ownership of an Acquisition Facility by the Developer to EMWD, as provided in Section 7(f) hereof, the Developer shall be responsible for the maintenance thereof and shall require its contractor(s) to repair all facilities damaged by any party, prior to acceptance by EMWD and/or make corrections determined to be necessary by EMWD’s inspection personnel.
(j) Inspection of Records. EMWD shall have the right to review all books and records of the Developer pertaining to the costs and expenses incurred by the Developer for the design and construction of the Acquisition Facility during normal business hours by making arrangements with the Developer. The Developer shall have the right to review all books and records of EMWD pertaining to costs and expenses incurred by EMWD for services of the EMWD Engineer Representative by making arrangements with EMWD.
(k) Property Ownership of Improvements. Notwithstanding the fact that some or all of the Acquisition Facility may be constructed in dedicated street rights-of-way or on property Item Title: 11.4
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which has been or will be dedicated to EMWD, each Acquisition Facility shall be and remain the property of the Developer until acquired by EMWD as provided in this Agreement. (l) Materials and Workmanship Warranty. Upon the completion of the acquisition of an Acquisition Facility by EMWD, the performance bond related to such individual Acquisition Facility provided by the Developer pursuant to Section 7(c)(v) hereof, shall be reduced by 90%, and the remaining 10% shall serve as a maintenance bond to guarantee that such Acquisition Facility will be free from defects due to faulty workmanship or materials for a period of one year. Release of performance and payment bonds is addressed in the Standard Water and/or Sewer Facilities and Service Agreement, by and between EMWD and the Developer. (m) Independent Contractor. In performing this Agreement with respect to the Acquisition Facilities, the Developer is an independent contractor and not the agent of EMWD. EMWD shall not have any responsibility for payment to any contractor, subcontractor or supplier of the Developer. It is not intended by the Parties that this Agreement create a partnership or joint venture among them and this Agreement shall not otherwise be construed. (n) Insurance Requirements. Neither the Developer nor its contractor shall commence work on an Acquisition Facility under this Agreement prior to obtaining all insurance required hereunder with a company or companies acceptable to EMWD, nor shall the Developer’s contractor allow any subcontractor to commence work on its subcontract until all insurance required of the subcontractor has been obtained.

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

Both the Developer and its contractor shall conform in every respect to the requirements set forth in the Standard Water and/or Sewer Facilities and Service Agreement, by and between EMWD and the Developer.

8. Indemnification.
(a) Indemnification by the City. The City shall assume the defense of, indemnify and save harmless, EMWD, its officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, any act or omission of the City with respect to this Agreement and the issuance of the Bonds; provided, however, that the City shall not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their officers, agents or employees. (b) Indemnification by Developer. Developer shall assume the defense of, indemnify and save harmless, the City, the CFD and EMWD, their respective officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, any act or omission of Developer with respect to this Agreement; provided, however, that Developer shall not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their officers, agents or employees.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 105

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(c) Indemnification by EMWD. EMWD shall assume the defense of, indemnify and save harmless, the City, the CFD and their respective officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, any act or omission of EMWD with respect to this Agreement, and the design, engineering and construction of the EMWD Facilities and the Acquisition Facilities constructed by EMWD; provided, however, that EMWD shall not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their officers, agents or employees.

9. Allocation of Special Taxes. The entire amount of any Special Taxes levied by the CFD to repay Bonds, or to fund other obligations, shall be allocated to the CFD.

10. Amendment and Assignment. This Agreement may be amended at any time but only in writing signed by each Party hereto. This Agreement may be assigned, in whole or in part, by the Developer to the purchaser of any parcel of land within the Property, provided, however, such assignment shall not be effective unless and until EMWD and the City have been notified, in writing, of such assignment and the assignment specifies whether the Developer or such assignee is authorized to execute disbursement requests.

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

12. Notices. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to either Party shall be deemed to have been received when personally delivered or seventy-two hours following deposit of the same in any United States Post Office in California, registered or certified, postage prepaid, addressed as follows:

City: City of Menifee
29844 Haun Road
Menifee, CA 92586
Attention: Chief Financial Officer
EMWD: Eastern Municipal Water District
P.O. Box 8300
2270 Trumble Road
Perris, CA 92572-8300
Attention: Special Funding Division
Email: [email protected]
Developer: Lennar Homes of California, LLC
4140 Temescal Canyon Rd., Suite 410
Corona, CA 92883
Attention: Geoff Smith
Each Party may change its address for delivery of notice by delivering written notice of such change of address to the other Parties hereto. Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by Item Title: 11.4
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electronic communication, whether by telex, telegram or telecopier upon the sender’s receipt of written acknowledgement from the addressee, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section.

13. Exhibits. All exhibits attached hereto are incorporated into this Agreement by reference.

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

15. Interpretation in the event of Ambiguities or Disputes. The Parties acknowledge and agree that each has been given the opportunity to review this Agreement with legal counsel independently, and/or has the requisite experience and sophistication to understand, interpret, and agree to the particular language of the provisions hereof. In the event of an ambiguity in or dispute regarding the interpretation of same, the interpretation of this Agreement shall not be resolved by any rule of interpretation providing for interpretation against the Party who causes the uncertainty to exist or against the drafter.

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

17. Governing Law. This Agreement and any dispute arising hereunder shall be governed by interpreted in accordance with the laws of the State of California.

18. Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by any other Party hereto, or the failure by a Party to exercise its rights upon the default of any other Party, shall not constitute a waiver of such Party’s right to insist and demand strict compliance by such other Party with the terms of this Agreement thereafter.

19. No Third Party Beneficiaries. No person or entity other than the CFD, when and if formed, shall be deemed to be a third party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to confer upon any person or entity, other than EMWD, the City, the CFD and Developer (and their respective successors and assigns, exclusive of individual homebuyers), any rights, remedies, obligations or liabilities under or by reason of this Agreement.

20. Singular and Plural; Gender. As used herein, the singular of any word includes the plural, and terms in the masculine gender shall include the feminine.

21. Termination. If the City determines and notifies the other Parties in writing that the CFD is unable to complete the sale of the Bonds, any obligation of the Parties, if any, to finance all or any EMWD Facilities with Bond Proceeds pursuant to this Agreement shall automatically terminate and be of no further force or effect.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 107

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22. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute but one instrument. [REMAINDER OF PAGE LEFT BLANK]
Item Title: 11.4
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year written above.

CITY OF MENIFEE
City Manager
ATTEST:

By:

A. Kay Vinson, Acting City Clerk
APPROVED AS TO FORM:

CITY ATTORNEY OF THE CITY OF MENIFEE
By:

Jeffrey T. Melching, City Attorney
[SIGNATURES CONTINUED ON NEXT PAGE.]
Item Title: 11.4
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EASTERN MUNICIPAL WATER DISTRICT
By:

Joe Mouawad, P.E., General Manager
ATTEST:

By:

Sheila Zelaya, Board Secretary

DEVELOPER

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

Its:

Item Title: 11.4
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EXHIBIT “A”
COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE)

OF THE CITY OF MENIFEE

DEPICTION OF PROPERTY
Item Title: 11.4
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Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 112

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EXHIBIT “B”
COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE)

OF THE CITY OF MENIFEE

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

LOTS 1 THROUGH 80, INCLUSIVE, LOTS E THROUGH L, INCLUSIVE, AND COMMON AREA LOTS 81 AND 82, OF TRACT NO. 36803, AS SHOWN ON A SUBDIVISION MAP ("MAP") FILED IN BOOK 489, PAGES 16 TO 23, INCLUSIVE, OF MAPS, IN THE OFFICE OF

THE RIVERSIDE COUNTY RECORDER
Item Title: 11.4
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EXHIBIT “C”
COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE)

OF THE CITY OF MENIFEE

FACILITIES DESCRIPTION

1. EMWD Facilities. The type of EMWD Facilities eligible to be financed by the CFD under the Act are as follows:

Those water and sewer facilities included in EMWD’s water and sewer capacity and connection fee programs used to finance expansion projects, exclusive of in-tract facilities contributed by Developer. EMWD Facilities include, but are not limited to the following: water and sewer transmission pipelines, sewer treatment plants, disposal ponds, pumping plants, lift stations and water reservoirs, including all costs of site acquisition, planning, design, engineering, legal services, materials testing, coordination, surveying, construction staking, construction, inspection and any and all appurtenant facilities and appurtenant work relating to the foregoing.

2. Acquisition Facilities. The types of Acquisition Facilities eligible to be financed by the CFD under the Act shall consist of sewer and water transmission lines, sewer and water pump stations and water reservoirs, including all costs of site acquisition, planning, design, engineering, legal services, materials testing, coordination, surveying, construction staking, construction inspection and any and all appurtenant facilities to the foregoing required to serve the Property. The facilities listed above are representative of the types of facilities eligible to be financed by the CFD as Acquisition Facilities. Detailed scope and limits of specific projects will be determined by EMWD as appropriate, consistent with the standards of the EMWD.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 114

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EXHIBIT “D”
COMMUNITY FACILITIES DISTRICT NO. (2025-4 HERITAGE VILLAGE)

OF THE CITY OF MENIFEE

DISBURSEMENT REQUEST FORM
(EMWD Facilities)

1. City of Menifee Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee (“CFD”) is hereby requested to pay from the CFD bond proceeds (“Bond Proceeds”) to Eastern Municipal Water District (“EMWD”), as Payee, or to EMWD’s designee, the sum set forth in 3 below.

2. The undersigned certifies that the amount requested for EMWD Facilities is due and payable, has not formed the basis of prior request or payment, and is being made with respect to the connection of the property described below to the EMWD system.

3. Amount requested: $________________
For Tract/Lot Nos: _________________

4. The amount set forth in 3 above is authorized and payable pursuant to the terms of the Joint Community Facilities Agreement, by and among the City of Menifee, EMWD and Lennar Homes of California, LLC, dated April 2, 2025 (the “Agreement”). Capitalized terms not defined herein shall have the meaning set forth in the Agreement. EMWD shall spend the Bond Proceeds allocated hereby in accordance with the requirements set forth in Section 5 of the Agreement.

5. By entering into the Agreement and requisitioning Bond Proceeds as described herein, EMWD is not passing upon, determining or assuming the tax-exempt status of the Bonds for federal or California state income tax purposes.

DEVELOPER

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

EASTERN MUNICIPAL WATER DISTRICT
By:

Name:

Title:

Date:
cc: EMWD Special Funding District
Item Title: 11.4
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EXHIBIT “E”

CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2025-4 (HERITAGE VILLAGE)

PAYMENT REQUEST FORM
CITY OF MENIFEE CFD NO. 2025-4 (HERITAGE VILLAGE) – OTHER FACILITIES

ACCOUNT

OF THE IMPROVEMENT FUND
City of Menifee (“City”), Eastern Municipal Water District (“EMWD”) and _______________ (“Developer”) are parties to the Joint Community Facilities Agreement, dated as of __________ (the “EMWD JCFA”). Capitalized undefined terms used herein shall have the meanings ascribed thereto in the EMWD JCFA. Pursuant to the EMWD JCFA, Developer hereby requests approval of the acquisition price of the Acquisition Facility(ies) described in Attachment A attached hereto. In connection with this Payment Request, Developer hereby represents and warrants to the EMWD as follows:
(a) The person executing this Payment Request is qualified to execute this Payment Request on behalf of Developer and knowledgeable as to the matters set forth herein. (b) The Acquisition Facility(ies) have been constructed in accordance with the Plans therefor, and in accordance with all applicable EMWD standards and the requirements of the EMWD JCFA.
(c) The true and correct Actual Cost of the Acquisition Facility(ies) is set forth in Attachment A.
(d) Developer has submitted or submits herewith to EMWD the contracts, invoices, receipts, worksheets and other evidence of Actual Costs which are in sufficient detail to allow the EMWD Representative to verify the Actual Cost of the Acquisition Facility(ies) for which payment is requested.
(e) There are no liens, rights to lien or attachment upon, or claims affecting the right to receive the payment requested herein which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or mechanics’ liens accruing by operation of law. Copies of lien releases for all work for which payment is requested hereunder are attached hereto.

Developer hereby declares under penalty of perjury that the above representations and warranties are true and correct.

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 116

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April 2, 2025
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Developer hereby requests that the acquisition price be paid to the person or persons, in the amount set forth in Attachment B hereto.

DEVELOPER

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

Its:

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 117

Menifee Mayor and City Council
April 2, 2025
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CONFIRMATION AND APPROVAL BY EMWD
EMWD has (a) confirmed that the Acquisition Facility(ies) described in Attachment A is complete and was constructed in accordance with the Plans therefor, and (b) reviewed, verified and approved the acquisition price of such Acquisition Facility(ies). Such Acquisition Facility(ies) is/are complete and the acquisition price therefor eligible for payment is $________. The amount to be paid and the payee(s) are described in Attachment B.

Date: AUTHORIZED REPRESENTATIVE OF EMWD
By:

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 118

Menifee Mayor and City Council
April 2, 2025
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4923-3249-5138v2/200299-0027

ATTACHMENT A
Acquisition Facility Actual Cost Acquisition Price*
Total Acquisition Price to be Paid:

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 119

Menifee Mayor and City Council
April 2, 2025
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4923-3249-5138v2/200299-0027

ATTACHMENT B

ACQUISITION PRICE PAYMENT INSTRUCTIONS
[Include name and address of payee and wire transfer instructions] Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 120

Menifee Mayor and City Council
April 2, 2025
Page
937 of 1198

Item Title: 11.4
Proposed Formation of Community Facilities District No. 2025-4, Heritage Village Item Page Number: 121

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April 2, 2025
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938 of 1198

CITY OF MENIFEE
SUBJECT: Ordinance Introduction and Annexation No. 27,
Encanto/McCall Gas Station, into Community Facilities
District 2017-1, Maintenance Services
MEETING DATE: April 2, 2025
TO: Mayor and City Council
PREPARED BY: Kristen Jensen, Financial Analyst
REVIEWED BY: Nick Fidler, Public Works Director
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------

RECOMMENDED ACTION

1. Adopt a resolution calling an election to annex territory, including Parcel Nos. 333-040-045 and 333-040-046, located on the northwest corner of the intersection of Encanto Drive and McCall Boulevard, into City of Menifee Community Facilities District (CFD) No. 2017-1 (Maintenance Services) and to levy a special tax on that land; and

2. Hold a special landowner election and canvass the election; and

3. Adopt a resolution declaring results of special landowner election; and

4. Introduce an ordinance, amending the Ordinance No. 2017-231 and levying and apportioning the special tax in CFD 2017-1.

DISCUSSION
On February 19, 2025, the City Council adopted Resolution No. 25-1542, declaring its intent to annex territory to CFD No. 2017-1 and commence the annexation proceedings for the territory to be annexed, also known as Annexation No. 27. The next steps in the annexation proceedings are to hold a public hearing on April 2, 2025, to conduct an election for the landowners and to declare the results of that election.

The area within Annexation No. 27 is included in Parcel Nos. 333-040-045 and 333-040-046 and is approximately 2.10 gross acres of vacant property within the City. The property is located on the northwest corner of the intersection of Encanto Drive and McCall Boulevard, as shown in the attached Project Location Map. The proposed maintenance services include items such as landscaping, lighting, street maintenance, drainage, and graffiti abatement.

Item Title: 11.5
Ordinance

Introduction

and

Annexation

No.

27,

Encanto/McCall

Gas

Station,

into

Community

Facilities

District

2017-1,
Maintenance Services
Item Page Number: 1

Menifee Mayor and City Council
April 2, 2025
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939 of 1198

City of Menifee Staff Report
CFD 2017-1 Annex No. 27, Encanto/McCall Gas Station
April 2, 2025

Page 2 of 3 ends

Menifee City CouncilApril 2, 2025

Menifee City Council
April 2, 2025