3 2
1 3
A 10% security warranty would be held for a period of one year in accordance with the City’s Municipal Code. The original posted securities for the improvements are listed in Table 1 below.
TABLE 1 – ORIGINAL POSTED SECURITY IMPROVEMENTS (IP18-058L) Improvement
Security No.
Performance/
Material
Faithful
Performance
Material and
Labor
Landscape 024252536 $ 113,000 $ 56,500 Irrigation 024252536 $ 179,500 $ 89,750 Construction 024252536 $ 328,500 $ 164,250
Contingency 024252536 $ 124,000 $ 62,000 Total $ 745,000 $ 372,500
If approved, a Notice of Completion (NOC) would be filed, which protects the City from future claims against the Project by providing proper noticing to each contractor, subcontractor, and material supplier that the Project has been completed. The payment bond would be released upon Project acceptance by the City and the performance bond would be released one year after the date of recording of the NOC. The City has not received any stop notices that would prevent said releases.
STRATEGIC PLAN OBJECTIVE
Safe and Vibrant Community
FISCAL IMPACT
There is no fiscal impact associated with the recommended action. The Developer has paid all necessary fees and deposits to cover the costs of the required inspection of the completed improvements. Ongoing maintenance costs for the improvements would be supported through approved Fiscal Year 2025/2026 operating budgets in Community Facilities District (CFD) 2015-2, Zone 20.
ATTACHMENTS
1. Project Location Map
2. Agreement
3. Bonds
4. Notice of Completion
Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 2
Menifee Mayor and City Council
April 15, 2026
Page
505 of 909
McLaughlin Road
McCall Boulevard
Rouse Road
Rouse Road
Sherman Road
Antelope Road
TM29835-2
Antelope Road
Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 3
Menifee Mayor and City Council
April 15, 2026
Page
506 of 909
AGREEMENT
FOR THE CONSTRUCTION OF CFD LANDSCAPE IMPROVEMENTS
TRACT 29835- 2, lP18- 058L
This Agreement for Construction of Road and Drainage lmprovements (" Agreement") is made and entered into by and between the City of Menifee, State of California, hereinafter called City, and KB Home Coastal. lnc. , hereinafter called Developer.
WITNESSETH:
FIRST: Developer, as part of the City' s consideration of the final map for that certain land division known as Tract 29835- 2 , hereby agrees, at Developer' s own cost and expense, to furnish all labor, equipment and materials necessary to perform and complete, within Seven Hundred and Thirtv Davs from the date this Agreement is executed, in a good and workmanlike manner, all road and drainage improvements in accordance with those Road Plans for said land division which have been approved by the City Engineer, a copy of which are on file in the office of the City of Menifee Engineering Department, and do all work incadental thereto in accordance with the standards set forth in Riverside County Ordinance No. 460 and City Standards and Specifications, as amended, or its successor, which are hereby expressly made a part of this Agreement.
At its sole discretion, City may extend the period of time for completion of the work by providing written notice to Developer of said extension. To be effective such notice must be provided by the City Engineer. Such notice may be provided as specified in Section Nineteenth or vra electronic mail to Developer at vwilliams@kbhome. com. All the above required work shall be done under the inspection of and to the satisfaction of the City Engineer and shall not be deemed complete until approved and accepted in wnting as complete by the City Engineer. Developer further agrees to maintain the above required improvements for a period of one year following acceptance by the City, and during this one year period to repair or replace, to the satisfaction of the City Engineer, any defective work or labor done or defective materials furnished. Developer further agrees that all underground improvements covered by this Agreement shall be completed prior to the paving of any roadway. The estimated cost of said work and impro vements is the sum of Seven Hundred Fortv Five Thousand and no/ 100 , Dollars, $ 745. 000. 00, (" Estimated Cost"). Prior to commencing any work, Developer shall, at its sole cost, expense, and liability, obtain all necessary permits and licenses and give all necessary and incidental notices required for the lawful construction of the work and performance of Developer' s obligations under this Agreement. Developer shall conduct the work in full compliance with the regulations, rules, and other requirements contained in any permit or license issued to Developer.
SECOND: Developer agrees to pay to City the actual cost of such inspections of the work and improvements as may be required by the City Engineer. Developer shall, at its sole cost, expense. and liability, pay all fees, charges, and taxes arising out of construction of the work performed pursuant to this Agreement, including, but not limited to fees for checking, filing, and processing of improvement plans and specifications and for inspecting the construction of said work. These fees must be paid in full prior to approval of the final map and improvement plans, unless such fees have not yet been assessed and are not yet due and payable.
The fees referred to the above are not necessarily the only City fees, charges, or other cost that have been or will be imposed on the subdivision and its development, and this Agreement shall in no way exonerate or relieve Developer from paying such other applicable fees, charges and/ or cost. Developer further agrees that, if suit is brought upon this Agreement or any bond guaranteeing the completion of the road and drainage improvements, all costs and reasonable expenses and fees incurred by City in successfully enforcing such obligations shall be paid by Developer, including reasonable attorney' s fees, and that, upon entry of judgment, all such costs, expenses and fees shall be taxed as costs and included in any judgment rendered. Developer, not the City, shall be legally responsible for making any payment and/ or taking any action required by any such Judgment.
THIRD: City shall not, nor shall any officer or employee of City, be liable or responsible for any accident, loss, injury, or damage happening or occurring to the works specified in this Agreement prior to the completion and acceptance thereof, nor shall City or any officer or employee thereof, be liable for any persons or property injured or damage by reason of the nature of the work, or by reason of the acts or omissions of Developer, its DocuSign Envelope ID: 4F57ADCE- A4B5- 4477- 83A3- 892230D1F193 Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 4
Menifee Mayor and City Council
April 15, 2026
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agents or employees, in the performance of the work, and all or said liabilities are assumed by Developer.
Developer shall defend, indemnify, and hold harmless City, its elected offrcials, officers, employees, agents, and volunteers from any and all actual or alleged claims, demands, causes of action, liability, loss, administrative action of any federal, state, or local government body or agency, arising out of or incident to any acts, omissions, negligence, or willful misconduct of Developer, its personnel, employees, agents, or contractors in connection with or arising out of construction or maintenance of the work contemplated under this Agreement, or performance of this Agreement. This indemnification includes, without limitation, the payment of all penalties, fines, judgments, awards, decrees, attorneys' fees, and related costs or expenses, and the reimbursement of City, its elected officials, officers, employees, volunteers, and/ or agents for all legal expenses, and cost incurred by each of them. This indemnification excludes only such portion of any claim, demand, cause of action, liability, loss, damage, penalty, fine, or injury, to property or persons, including wrongful death, which is caused by the negligence or willful misconduct of City as determined by a court or administration body of competent. jurisdiction. Developer' s obligation to indemnify shall survive the expiration or termination of this Agreement, and shall not be restricted to insurance proceeds, if any, received by City, its elected officials, officers, employees, agents, or volunteers.
FOURTH: The Developer hereby grants to City, or any agent or employee of City, the irrevocable permission to enter without any additional consenl upon the lands of the subject land division for the purpose of completing the improvements. This permission shall terminate in the event that Developer has completed work within the time specified or any extension thereof granted by the City. Under such circumstances, Developer shall be responsible for any and all expenses, costs, liabilities, and fees ( including attorneys' fees and litigation cost) (" Completion Costs") incurred by the City in connection with ensuring that the work contemplated by this Agreement is completed. Developer shall remrt such Completion Costs to the City no more than thirty ( 30) days of the date that the City notifies Developer of such Completions Costs. Failure to remit the Completion Costs in a timely matter shall result in the City having the right to invoke any remedy provided by law including the encumbrance of the any property owned by Developer in the amount equal to any unpard Completion Costs.
FIFTH: The Developer shall provide adequate notice and warning to the traveling public of each and every hazardous or dangerous condition caused or created by the construction of the works of improvement at all times up to the completion and formal acceptance of the works of improvement. The Developer shall protect all persons from such hazardous or dangerous conditions in compliance with State law regulations and standards for traffic regulatory control methods, including, but not limited to, stop signs, regulatory signs or signals, barriers, or detours.
SIXTH: Developer, its agents and employees, shall give written notice to the City Engineer at least forty- eight ( 48) hours before beginning any work. Developer shall provide the City Engineer or his designee reasonable access to facilities for obtaining full information with respect to the progress and manner of work and shall fully cooperate with any investigation regarding the same.
SEVENTH: lf Developer, its agents or employees, neglects, refuses, or fails to prosecute the work with such diligence as to ensure its completion within the specified time, or within such extensions of time which have been granted by City, or if Developer violates, neglects, refuses, or fails to perform satisfactorily any of the provisions of the plans and specifications, Developer shall be in default of this Agreement and notice of such default shall be served upon Developer. City shall have the power, on recommendation of the City Engineer, to terminate all rights of Developer as a result of such default, but said termination shall not affect or terminate any rights of City as against Developer or any surety then existing or which thereafter accrue because of such default. The determination by the City Engineer of the question as to whether any of the terms of the Agreement or specifications have been violated, or have not been performed satisfactorily, shall be conclusive upon the Developer and any surety, and any and all parties who may have any interest in the Agreement or any portion thereof. The foregoing provisions of this section shall be in addition to all other rights and remedies available to City under this Agreement or the law. The failure of the Developer to commence or complete construction shall not relieve the Developer or surety from completion of the improvements required by this Agreement.
DocuSign Envelope ID: 4F57ADCE- A4B5- 4477- 83A3- 892230D1F193 Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 5
Menifee Mayor and City Council
April 15, 2026
Page
508 of 909
EIGHTH: Developer agrees to file with City, prior to the date that this Agreement is executed, both a good and sufficient improvement security in an amount not less than the Estimated Costs of the work and improvements for the faithful performance of the terms and conditions of this Agreement, and good and sufficient security for payment of labor and materials in the amount prescribed by Article XVll of Riverside County Ordinance 460 as amended to secure the claims to which reference is made in Title 3 ( commencing with Section 9000) of Part 6 of Division 4 of the Civil Code of the State of California. Developer agrees to renew each and every said bond or bonds with good and sufficient sureties or increase the amount of said bonds, or both, within ten ( 10) days after being notified by the City Engineer that the sureties or amounts are insufficient. Notwithstanding any other provisions herein, if Developer fails to take such action as is necessary to comply with said notice, Developer shall be in default of this Agreement unless all required improvements are completed within ninety ( 90) days of the date on which the City Engineer notified Developer of the insufficiency of the security or the amount of the bonds or both.
NINTH: lt is further agreed by and between the parties hereto, including the surety or sureties on the bonds securing this Agreement, that, in the event it is deemed necessary to extend the time of completion of the work contemplated to be done under this Agreement, extensions of time may be granted in writing, from time to time, by City, either at its own option, or upon request of Developer, and such extensions shall in no way affect the validity of this Agreement or release the surety or sureties on such bonds. Developer further agrees to maintain the aforesaid bond or bonds in full force and effect during the terms of this Agreement, including any extensions of time as may be granted therein.
TENTH. lt is understood and agreed by the parties hereto that if any part, term or provision of this Agreement is by the courts held to be unlaMul and void, the validity of the remaining portions shall not be affected and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain that particular part, term or provision held to be invalid.
ELEVENTH. This Agreement contains the entire Agreement of the parties as to the matters set forth herein. No waiver of any term or condition of this Agreement shall be a continuing waiver thereof.
TWELFTH: ln any action or proceeding arising out of this Agreement, or the transactions contemplated hereby, the prevailing party therein shall be entitled to recover from the other party thereto the reasonable attorneys' and paralegals' fees, court costs, filing fees, publication cost and other expenses incurred by the prevarling party in connection therewith, at trial and all appellate proceedings.
THIRTEENTH: This Agreement may be amended at any time by the mutual consent of the parties by a written instrument signed by both parties.
FOURTEENTH: The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that, by so executing this Agreement, the parties hereto are formally bound to the provisions of this Agreement.
FIFTEENTH. Developer shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without prior written consent of City. Any attempt to do so shall be null and void, and any assignee, hypothecate, or transferee shall acquire no right or interest by reason of such attempted assignment, hypothecate, or transfer. Unless specifically stated to the contrary in City' s written consent, any assignment, hypothecation, or transfer shall not release or discharge Developer from any duty or responsibility under this Agreement. ln the event that City consents in writing to such an assignment, any assignee, hypothecate, or transferee shall expressly assume Developer' s obligations hereunder by a written agreement in a form, and containing such surety, as is reasonably acceptable to City. Any agreement, hypothecation, or transfer shall be to the satisfaction of the City Attorney and shall include provrsions requiring the assignee to post bonds or submit another form of financial security, satisfactory to City and approved by the City Attorney, to guarantee construction of the work covered by this Agreement. The Agreement shall survive the recordation of the Frnal Map and shall be recorded against each of the proposed lots to inform successors and assigns of the required work covered by this Agreement to be constructed and their time frame for construction. Following any permitted assignment, hypothecation, or transfer of the work covered by this DocuSign Envelope ID: 4F57ADCE- A4B5- 4477- 83A3- 892230D1F193 Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 6
Menifee Mayor and City Council
April 15, 2026
Page
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Agreement, as set forth in this Section, City shall release Developer from its obligations so assigned and shall release to Developer any bonds or other security posted to secure the work covered by this Agreement so assigned; provided, however, that City shall not release any security or undertakings given to secure the performance of any of the work covered by this Agreement not assigned, hypothecated, or transferred.
SIXTEENTH: Developer shall perform all work contemplated by this Agreement in accordance with all approved maps, conditions, plans, specifications, standard drawings, and special amendments thereto on file with the City, as well as all applicable federal, state, and local laws, ordinances, regulations, codes, slandards, and other requirements. Developer and its contractors, if any, shall perform all work required to construct all work performed pursuant to this Agreement in a skillful and workmanlike manner, and consistent with the standards general recognized as being employed by professionals in the same discipline in the State of California. Developer represents and maintains that it or its contractors shall be skilled in the professional calling necessary to perform the work. Developer warrants that all of its employees and contractors shall have sufficient skill and experience to perform the work assigned to them, and that they shall have all licenses, permits, qualifications, and approvals shall maintained throughout the term of this Agreement.
SEVENTEENTH: Thrs Agreement may be executed by the parties in counterparts, which counterparts shall be construed together and have the same effect as if all of the parties had executed the same instruments.
NINETEENTH: Any notice or notices required or permitted to be given pursuant to this Agreement shall be served on the other party by mail, postage prepaid, at the following addresses:
City Developer
City of Menifee
29844 Haun Road
lt/ enifee, CA 92586
KB Home Coastal, lnc.
36310 lnland Valley Drive
Wildomar, CA 92595
TWENry- FIRST: Each and all of the covenants and conditions shall be binding on and shall inure to the benefit of the parties, and their successors, heirs, personal representatives, or assigns.
This Section shall not be construed as an authorization for any party to assign any right or obligation.
EIGHTEENTH: This Agreement is to be governed by the laws of the State of California.
TWENTIETH: City' s failure to insist upon strict compliance with any provision of this Agreement or to exercise any right or privilege provided herein, or City' s waiver of any breach of this Agreement, shall not relieve Developer of any of its obligations under this Agreement, whether of the same or similar type. The foregoing shall be kue whether City' s actions are intentional or unintentional.
DocuSign Envelope ID: 4F57ADCE- A4B5- 4477- 83A3- 892230D1F193 Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 7
Menifee Mayor and City Council
April 15, 2026
Page
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Dated: May 26, 2021 By: B Home Coastal lnc
Scott Hansen
VP, Forward Planning
Dated , 2021 CIry OF MENIFEE
By
Yolanda Macalalad tng City Engineer
By
Bill Zimmerman, Mayor
ATTEST:
By:
Sarah Manwaring, Ci lerk Jeffery T. Melching, City Attorney
SIGNATURES OF DEVELOPER MUST BE ACKNOWLEDGED BY NOTARY
AND EXECUTED IN TRIPLICATE
lN WITNESS WHEREOF, Developer has affixed his name, address and seal.
CIry OF MENIFEE
By
APPROVEDAS TO FORM:
DocuSign Envelope ID: 4F57ADCE- A4B5- 4477- 83A3- 892230D1F193 Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 8
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April 15, 2026
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lN WITNESS WHEREOF, Developer has affixed his name, address and seal.
Daled: _, 2021 By : KB Home Coastal, lnc.
Scott Hansen
VP, Forward Planning
Dated:, 2021 CITY OF MENIFEE
By
Daniel Padilla, City Engineer
CITY OF MENIFEE
By
Armando G. Villa, City Manager
ATTEST:
By
APPROVED AS TO FORM:
By
Sarah A. Manwaring, City Clerk Jeffrey T. Melching, CityAttorney
SIGNATURES OF DEVELOPER MUST BE ACKNOWLEDGED BY NOTARY
DocuSign Envelope ID: 4F57ADCE- A4B5- 4477- 83A3- 892230D1F193 July 21
Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 9
Menifee Mayor and City Council
April 15, 2026
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CALIFORNIA ALL- PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certiflcate verifies only the identity ofthe individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of Rive rside
On before me, Shanno n Luebs , Notary Public,
personally appeared Scott Hansen, who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ a+ e subscribed to the within instrument and acknowledged to me that he/ shelthey executed the same in his/ he# their authorized capacity( ies), and that by his/ he# the+ signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SHATINON tUEES
Nolary PuU|( - Cat, tunra
Rlle6iceCounN
Comh6so, 1 I 2209' 344
liY Comm E& ires ArJg tO m2t
Shannon Luebs ( SEAL)
DocuSign Envelope ID: 4F57ADCE- A4B5- 4477- 83A3- 892230D1F193 Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 10
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April 15, 2026
Page
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Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 11
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April 15, 2026
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Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 12
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April 15, 2026
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Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 13
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April 15, 2026
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Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 14
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April 15, 2026
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Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 15
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April 15, 2026
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Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 16
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April 15, 2026
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Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 17
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April 15, 2026
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Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 18
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April 15, 2026
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Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 19
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April 15, 2026
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Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 20
Menifee Mayor and City Council
April 15, 2026
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Recording Requested By:
CITY OF MENIFEE
When Recorded Mail To:
CITY CLERK
CITY OF MENIFEE
29844 HAUN ROAD
MENIFEE, CA 92586
Record without fee subject to Govt. Code 6103
NOTICE OF COMPLETION
AND
ACCEPTANCE OF WORK
(Work Within Public Right-of-Way)
NOTICE IS GIVEN that work was completed on that certain project known as TM29835-2 Underwood Landscaping, for the undersigned agency on January 12, 2026, located along Antelope Rd between McLaughlin R d and McCall Blvd , and that said project was accepted by this agency on April 1, 2026. The undersigned agency owns the following interest in said property described above: right-of-way and public improvements within the right -of-way.
The Developer on said project was KB Home Coastal, Inc., and contract number is City of Menifee Plan No. IP18- 058L. Please refer to said contract number on all communications relating to said contract. The address of the undersigned agency is City Hall, 29844 Haun Road, Menifee, California 92586.
1. The full name of the Owner is: CITY OF MENIFEE
2. The full address of the Owner is: 29844 HAUN ROAD
MENIFEE, CA. 92586
3. The undersigned is a Corporate Officer of the Owner of the interest stated below in the property herein described:
PUBLIC STREETS IN
MENIFEE, CA 92586
4. The name of the contractor /developer for such work of construction on Tract 29835- 2 is:
KB Home Coastal, Inc.
5. The property on which said work of improvement was completed is within the City of Menifee, County of Riverside, State of California.
STATE OF CALIFORNIA)
Ss
COUNTY OF RIVERSIDE)
I, Stephanie Roseen, hereby certify that I am the City Clerk of the City of Menifee, a municipal corporation, which is the owner of the properties described within this Notice of Completi on, executed on behalf of the City; that I have read the notice and know the contents thereof and that the facts therein stated are true of my own knowledge under penalt y of perjury under the laws of the state of California; that I make this verification on _________________ for and on behalf of the City .
_____________________________
Stephanie Roseen, City Clerk
Item Title: 10.14
Notice of Completion, Acceptance and 90% Release of Securities for Tract Map 29835-2, Underwood, by KB Home Coastal, Inc.
Item Page Number: 21
Menifee Mayor and City Council
April 15, 2026
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CITY OF MENIFEE
SUBJECT: User Fee Schedule Updates
MEETING DATE: April 15, 2026
TO: Mayor and City Council
PREPARED BY: Margarita Cornejo, Director of Strategic Programs and Initiatives
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------
RECOMMENDED ACTION
1. Adopt a resolution approving the addition and modification of Community Service and other fees to the 2022 User Fee Schedule and authorizing an effective date of July 1, 2026; and
2. Authorize the City Manager to implement an annual Consumer Price Index (CPI) adjustment to any new applicable fees, based on January-to-January index (increase or decrease) not- to-exceed four percent, with the first adjustment effective July 1, 2027 and annual adjustments thereafter on July 1 each fiscal year.
DISCUSSION
On October 5, 2022 the City Council adopted the 2022 Comprehensive Cost of Services/User Fee Study and accompanying fee schedule with an effective date of January 1, 2023. The new fee schedule reflected a comprehensive review and analysis to determine the full cost of providing services accurately, fairly, and reasonably to the individuals, residents, and businesses within the community. Ultimately, the amount of revenue generated (fee amount) may not exceed the estimated reasonable cost of providing the services, and with the goal of making the city “whole” as to costs.
As the City prepares for Fiscal Year 2026/2027, several additional fees have been identified as needed to be added to the existing schedule based on services provided by the city. Updates are summarized as follows.
Community Services Fees Update
Staff has taken a comprehensive review/assessment of its existing fees, overall available programs, and facilities and is presenting an all-inclusive update of new and existing recreation fees. From previous Council action, community services fees are not subject to annual fee Item Title: 11.1
User Fee Schedule Updates
Item Page Number: 1
Menifee Mayor and City Council
April 15, 2026
Page
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City of Menifee Staff Report
User Fee Updates: Community Services & Other Fees
April 15, 2026
3 2
5 8
adjustments. With this department being primarily public facing, many of its services are heavily subsidized as the functions are in support of promoting public health. The proposed updated/new fees were presented to the Parks, Recreation, and Trails Commission (PRTC) in the fall of 2025 with a recommendation to move forward for City Council consideration. Community Services Fees updates were focused on the following four categories:
oFacility Rentals
oPicnic Shelter Rentals
oAthletic Field Rentals
oPark Rentals for Private Events
The fee analysis review included current market rates, comparisons to surrounding agencies, resident vs. non-resident rates, and staff costs to provide such services. While some of the current reduced rates have supported accessibility, they do not reflect the full costs associated with providing these services, which include staffing, maintenance, utilities, and supplies. Bringing fees closer in line with regional averages will help offset operational costs while continuing to provide affordable options for residents and community groups. Considering City Council’s previous direction and their emphasis on accessibility, staff is recommending adjustments of 20% Increase for Non-Profit Organizations, 20% Increase for Residents, and an adjustment to match the average regional rate for Non-Residents.
Additionally, staff is recommending that following fee categories, highlighted in Table 1 below, be added to the City’s fee schedule based on similar services being offered by the other agencies:
TABLE 1 - NEW RECOMMENDED FEE CATEGORIES
Recommended Fee Current Fee Average Fee at
Surrounding
Agencies
Recommended
Fee
Field Rental Fees (Tournaments)*4-hour min.
Deposit N/A $569 per field $455 per field
Non-Resident N/A $60 per hour $50 per hour
Resident N/A $58 per hour $25 per hour
Resident Non-Profit N/A $58 per hour $23 per hour
The Community Services and the Finance Departments have reviewed the proposed fees and recommend moving forward with adoption. The comparative analysis completed provides rationale and justification for the proposed adjustments and is consistent with the City’s past approach to establishing recreation fees.
Temporary Use Permit (TUP) Fee Update
Updated Minor and Major Temporary Use Permit (TUP) fees reflecting streamlined processing timeline.
Public Safety Community Facilities District (CFD) Annexation Proposed fee and corresponding deposit to process residential projects’ annexation into the City’s Public Safety CFD.
Item Title: 11.1
User Fee Schedule Updates
Item Page Number: 2
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April 15, 2026
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City of Menifee Staff Report
User Fee Updates: Community Services & Other Fees
April 15, 2026
3 2
5 8
Table 2 below identifies new fees and/or fee adjustments recommended for adoption beginning July 1, 2026.
TABLE 2 - PROPOSED NEW FEES AND/OR FEE ADJUSTMENTS (EFFECTIVE JULY 15, 2024) Fee Name Proposed Fee Amount ($) Department
Cost Recovery
Description/
Determination Description
Community Services
(New Fee & Existing
Fees Updates, 3.01 – 3.92)
Various (See attached
schedule)
Comprehensive update to
existing Community Services
Fess as well as additional fees
incorporated
Community
Services
Proposed based
on market rates
and survey with
surrounding
entities.
Comprehensive
update to Community
Services related fees,
incorporating updates
and addition of new
fees.
Temporary Use Permit
(TUP)
(Revised Fees: 8.58 - 8.61)
Major: $642
Major 501(c): $321
Minor: $208
Minor 501 (c): $104
Community
Development:
Planning
Division
Full Cost
Recovery & 50%
Cost Recovery
for 501(c) fees
Revised fees based
on updated/
streamlined City TUP
review process.
Public Safety CFD
Annexation
(New Fee: 9.129 – 9.131)
Applicable to single and multi-
family residential projects:
$2,698 (Flat Fee) + Technology
Surcharge
Deposit Amount:
1-20 Units: $6,250
> 20 Units: $12,500
Public Works/
Engineering
Full Cost
Recovery
Associated costs for
processing
annexation into
Public Safety CFD.
All proposed fees and fee adjustments are rounded to the nearest dollar.
Automatic Annual Fee Adjustments
The City’s existing User Fee schedule included authorization for the City Manager to implement an annual CPI adjustment (increase or decrease) not-to-exceed 4% and effective July 1 each fiscal year, based on January to January of the previous year, with the first adjustment effective July 1, 2024. The complete CPI for All Urban Consumers – Riverside- San Bernardino-Ontario, CA
As some of the fees are development related and pursuant to Government Code section 66017, the recommended effective date for the new and/or fee adjustment as well as implementation of the annual fee adjustment for all existing fees is July 1, 2026, to conform with the 60-day implementation period requirement. In future years the annual automatic adjustment would be effective on July 1st beginning July 1, 2027 and not applicable to Community Services fees and/or deposit fees.
Item Title: 11.1
User Fee Schedule Updates
Item Page Number: 3
Menifee Mayor and City Council
April 15, 2026
Page
527 of 909
City of Menifee Staff Report
User Fee Updates: Community Services & Other Fees
April 15, 2026
3 2
5 8
STRATEGIC PLAN OBJECTIVE
Thriving Economy
FISCAL IMPACT
Adoption of the proposed new fees and/or fee adjustments would result in higher cost recovery for services provided by the City and help reduce any General Fund subsidy. Additionally, the implementation of the annual CPI adjustment would ensure costs for delivery of services remain current and reflect any significant increases and/or decreases caused by inflation or deflation.
ATTACHMENTS
1. Resolution
2. Exhibit A: 2026 New Fees and Fee Adjustments
Item Title: 11.1
User Fee Schedule Updates
Item Page Number: 4
Menifee Mayor and City Council
April 15, 2026
Page
528 of 909
RESOLUTION NO. 26-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA,
MODIFYING FEES AND CHARGES FOR SERVICES PROVIDED BY THE CITY OF
MENIFEE
WHEREAS , the City of Menifee provides development related public services of a discretionary nature, as these services can be withheld from customers for non-payment, which are in addition to community supported public services that are paid for by City tax revenues for general social, safety or welfare reasons; and WHEREAS, the City of Menifee adopted a comprehensive fee schedule by Resolution 22-1229 on October 5, 2022, and now desires to adjust certain fees and charges based on the reasonable costs borne by the City to provide such services ; and WHEREAS, the State of California Government Code Section 66014 et.al. allows local agencies to charge fees for various activities as long as those fees do not exceed the estimated reasonable cost of providing the services for which the fee is intende d; and WHEREAS, the City Council conducted a duly noticed public hearing on April 15, 2026, where the public was allowed to comment and provide input on the proposed fees and charges for services .
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee hereby makes the following findings:
Section 1. It is hereby found and determined that the new fees and charges and/or fee adjustments set forth in Exhibit A attached hereto do not exceed the estimated reasonable costs of providing services for which the fee is charged or the estimated amount required to provide the service for which the fee or charge is levied; and Section 2. The City Council hereby approves Exhibit A - "2026 New Fees and Charges and/or Fee Adjustments” to be included and incorporated as part of the existing comprehensive fee schedule as adopted in October 2022 and updated annual for applicable automatic annual adjustments beginning July 1, 2027; and
Section 3. The adoption of this Resolution is exempt from the California Environmental Quality Act (CEQA, Public Resources Code Sections 21000 et seq.), because it approves and sets forth a procedure for determining fees for the purpose of meeting the operating expenses of City departments, as set forth in Public Resources Code Section 21080(b)(8)(A) .
Section 4. The proposed new user fees and/or fee adjustment and first annual fee adjustment will go into effect July 1, 2026; and
Item Title: 11.1
User Fee Schedule Updates
Item Page Number: 5
Menifee Mayor and City Council
April 15, 2026
Page
529 of 909
Section 5. This Resolution shall be effective upon its adoption.
PASSED, APPROVED AND ADOPTED this 15th day of April, 2026.
ATTEST: APPROVED:
Stephanie Roseen, City Clerk Bob Karwin, Mayor Pro Tem
APPROVED AS TO FORM:
Jeffrey T. Melching, City Attorney
Item Title: 11.1
User Fee Schedule Updates
Item Page Number: 6
Menifee Mayor and City Council
April 15, 2026
Page
530 of 909
CITY OF MENIFEE
EXHIBIT A: 2026 NEW USER FEES AND/OR FEE ADJUSTMENTS
Fee No. Fee Title Unit Adopted/
Current Fee
Proposed
Updated Fee
& New Fees
(+/-)
Change
%
change
Market
Rate
Cost
Recovery
Actual
Cost
Notes
Small - Up to 20 capacity
3.01 Deposit Deposit $50 $50 $0 0% $250 No increase
3.02 Non-Resident Per hour $40 $60 $20 50% $60 74% $81
3.03 Resident Per hour $20 $24 $4 20% $40 30% $81
3.04 Resident Non-Profit (Youth Sports and Others) Per hour $20 $24 $4 20% $29 30% $81
3.05 City Sponsored Per hour $0 $0 $0 0% $0 0% $81 No increase Medium - Up to 50 capacity
3.06 Deposit Deposit $100 $100 $0 0% $300 No increase
3.07 Non-Resident Per hour $50 $65 $15 30% $65 53% $121
3.08 Resident Per hour $25 $30 $5 20% $48 25% $121
3.09 Resident Non-Profit (Youth Sports and Others) Per hour $25 $30 $5 20% $33 25% $121
3.10 City Sponsored Per hour $0 $0 $0 0% $0 0% $121 No increase Large - Up to 150 capacity
3.11 Deposit Deposit $200 $200 $0 0% $325 No increase
3.12 Non-Resident Per hour $80 $149 $69 87% $149 99% $151
3.13 Resident Per hour $40 $48 $8 20% $92 32% $151
3.14 Resident Non-Profit (Youth Sports and Others) Per hour $40 $48 $8 20% $67 32% $151
3.15 City Sponsored Per hour $0 $0 $0 0% $0 0% $151 No increase Miscellaneous Facility Rental Fees
3.16 Deposit Deposit $100 $100 $0 0% $0 No increase
3.17 Kitchen Rental Per hour $100 $100 $0 0% $86 No increase
3.18 Alcohol Use Deposit Additional Deposit $200 $200 $0 0% $0 No increase
3.19 Additional City Staff as Needed Hourly Rate $74 $74 $0 0% $23 No increase
3.70 Palm Room Light Board Per Event N/A $25 NEW 100% 100% $25
3.71 Indoor Rentals Application Fee Per Application N/A $25 NEW 100% 59% $42
3.44 Park Special Events Application Fee (park
rentals and tournaments)
Per Application $50 $50 $0 100% 89% $56
Picnic Shelter - Small
3.20 Non-Resident Per hour $20 $20 $0 0% $10 No increase
3.21 Resident Per hour $10 $10 $0 0% $5 No increase
3.22 Resident Non-Profit (Youth Sports and Others) Per hour $10 $10 $0 0% $5 No increase
3.23 City Sponsored Per hour $0 $0 $0 0% $0 No increase Picnic Shelter - Large
3.24 Non-Resident Per hour $30 $30 $0 0% $15 No increase
3.25 Resident Per hour $15 $15 $0 0% $8 No increase
3.26 Resident Non-Profit (Youth Sports and Others) Per hour $15 $15 $0 0% $8 No increase
3.27 City Sponsored Per hour $0 $0 $0 0% $0 No increase
3.28 Rental with Jumper / Vendor Per rental $25 $25 $0 0% $2 No increase One-Time Rentals of Ballfield, Multi-Purpose
Field, or General Use Field
3.29 Deposit Deposit $50 $60 $10 20% $175 n/a n/a
3.30 Non-Resident, Multipurpose Field Per hour $20 $28 $8 40% $28 75% $37
3.72 Non-Resident, Baseball Diamond Per hour $20 $32 $12 61% $32 86% $37
3. COMMUNITY SERVICES
Facility Rentals
Picnic Rentals
Field Rentals
Item Title: 11.1
User Fee Schedule Updates
Item Page Number: 7
Menifee Mayor and City Council
April 15, 2026
Page
531 of 909
CITY OF MENIFEE
EXHIBIT A: 2026 NEW USER FEES AND/OR FEE ADJUSTMENTS
Fee No. Fee Title Unit Adopted/
Current Fee
Proposed
Updated Fee
& New Fees
(+/-)
Change
%
change
Market
Rate
Cost
Recovery
Actual
Cost
Notes
3.73 Non-Resident, General Use Field Per hour N/A $25 NEW 100% 79% $32
3.31 Resident, Multipurpose Field Per hour $10 $12 $2 20% $18 32% $37
3.74 Resident, Baseball Diamond Per hour $10 $12 $2 20% $21 32% $37
3.75 Resident, General Use Field Per hour N/A $10 NEW 100% 31% $32
3.32 Resident Non-Profit, Multipurpose Field (Youth
Sports and Others)
Per hour $5 $6 $1 20% $20 16% $37
3.76 Resident Non-Profit, Baseball Diamond (Youth
Sports and Others)
Per hour $5 $6 $1 20% $23 16% $37
3.77 Resident Non-Profit, General Use Field (Youth
Sports and Others)
Per hour N/A $5 NEW 100% 16% $32
3.33 City Sponsored Per hour $0 $0 $0 0% $0 0% $11 No increase Field Lights
3.34 Non-Resident Per hour $20 $25 $5 24% $25 25% $100
3.35 Resident Per hour $10 $12 $2 20% $17 12% $100
3.36 Resident Non-Profit (Youth Sports and Others) Per hour $10 $12 $2 20% $15 12% $100
3.37 City Sponsored Per hour $0 $0 $0 0% $0 0% $100 No increase
3.38 Snack Bar Deposit Deposit $50 $50 $0 0% $86 n/a n/a No increase Tournament Use of Ballfield or Multi-Purpose
Field (4-hour minimum)
3.39 Deposit per Park Deposit/Per Park $50 $455 NEW 100% $569 n/a n/a
3.40 Non-Resident Per hour/Per field $25 $60 NEW 100% $60 52% $114
3.41 Resident Per hour/Per field $13 $25 NEW 100% $58 26% $97
3.42 Resident Non-Profit (Youth Sports and Others) Per hour/Per field $13 $23 NEW 100% $58 25% $92
3.43 City Sponsored Per hour/Per field $0 $0 NEW 100% $0 0% $92 Other Field Fees
3.68 Sport Field Striping (Per Field) (Resident) $15 $18 $3 20% $110 47% $38
3.69 Sport Field Striping (Per Field) (Non-Resident) $18 $138 $120 667% $138 363% $38 One-Time Rentals of Tennis, Basketball, or
Pickleball Courts
3.78 Non-Resident, Tennis Court Per hour N/A $17 NEW 100% $18 37% $46
3.79 Non-Resident, Basketball Court Per hour N/A $17 NEW 100% $28 37% $46
3.80 Non-Resident, Pickleball Court Per hour N/A $17 NEW 100% $6 37% $46
3.81 Resident, Tennis Court Per hour N/A $9 NEW 100% $16 19% $46
3.82 Resident, Basketball Court Per hour N/A $9 NEW 100% $26 19% $46
3.83 Resident, Pickleball Court Per hour N/A $9 NEW 100% $5 19% $46
3.84 Resident Non-Profit, Tennis Court (Youth Sports
and Others)
Per hour N/A $5 NEW 100% $16 11% $46
3.85 Resident Non-Profit, Basketball Court (Youth
Sports and Others)
Per hour N/A $5 NEW 100% $26 11% $46
3.86 Resident Non-Profit, Pickleball Court (Youth Sports and Others)
Per hour N/A $5 NEW 100% $5 11% $46
Court Rentals - NEW
Item Title: 11.1
User Fee Schedule Updates
Item Page Number: 8
Menifee Mayor and City Council
April 15, 2026
Page
532 of 909
CITY OF MENIFEE
EXHIBIT A: 2026 NEW USER FEES AND/OR FEE ADJUSTMENTS
Fee No. Fee Title Unit Adopted/
Current Fee
Proposed
Updated Fee
& New Fees
(+/-)
Change
%
change
Market
Rate
Cost
Recovery
Actual
Cost
Notes
3.87 City Sponsored Use of Tennis, Basketball, or
Pickleball Courts
Per hour N/A $0 NEW 100% 0% $46
Tournament Use of Tennis, Basketball, or
Pickleball Courts (4-hour minimum)
3.88 Deposit Deposit N/A $227 NEW 100% 0%
3.89 Non-Resident Per hour/Per court N/A $119 NEW 100% 100% $119
3.90 Resident Per hour/Per court N/A $35 NEW 100% 32% $111
3.91 Resident Non-Profit (Youth Sports and Others) Per hour/Per court N/A $30 NEW 100% 28% $107
3.92 City Sponsored Per hour/Per court N/A $0 NEW 100% 0% $107
3.44 Park Special Events. This fee moved to misc
facility rental fees "Park Special Event
Application Fee
Per Permit $50 No Increase $0 0% $317 0% $56
100-249 Attendees
3.45 Deposit Deposit $50 $60 $10 20% $638
3.46 Non-Resident Per Permit $95 $95 $0 0% $44 69% $138
3.47 Resident Per Permit $48 $58 $10 20% $34 58% $100
3.48 Resident Non-Profit (Youth Sports and Others) Per Permit $48 $58 $10 20% $28 58% $100
3.49 City Sponsored Per Permit $0 $0 $0 0% $0 0% $100 No increase 250-499 Attendees
3.50 Deposit Deposit $100 $120 $20 20% $638
3.51 Non-Resident Per Permit $170 $170 $0 0% $74 95% $179
3.52 Resident Per Permit $85 $102 $17 20% $56 72% $141
3.53 Resident Non-Profit (Youth Sports and Others) Per Permit $85 $102 $17 20% $49 72% $141
3.54 City Sponsored Per Permit $0 $0 $0 0% $0 0% $141 No increase 500-999 Attendees (Central Park Only)
These fees do not include Amphitheater
3.55 Deposit Deposit $150 $180 $30 20% $858
3.56 Non-Resident Per Permit $270 $270 $0 0% $80 115% $235
3.57 Resident Per Permit $135 $162 $27 20% $54 82% $197
3.58 Resident Non-Profit (Youth Sports and Others) Per Permit $135 $162 $27 20% $54 82% $197
3.59 City Sponsored Per Permit $0 $0 $0 0% $0 0% $197 No increase 1,000+ Attendees (Central Park Only)
These fees do not include Amphitheater
3.60 Deposit Deposit $300 $360 $60 20% $1,250
3.61 Non-Resident Per Permit $350 $360 $10 3% $360 218% $165
3.62 Resident Per Permit $175 $210 $35 20% $360 93% $227
3.63 Resident Non-Profit (Youth Sports and Others) Per Permit $175 $210 $35 20% $360 93% $227
3.64 City Sponsored Per Permit $0 $0 $0 0% $0 0% $227 No increase Miscellaneous
3.65 Administrative Processing Fee - Rental
Cancellation
Per Permit $12 $12 $0 0% No increase
3.66 Residential Self-Haul Permit Application Per Permit $101 $101 $0 0% No increase
3.67 Residential Self-Haul Permit Renewal Per Permit $33 $33 $0 0% No increase Programmatic / Sport / Afterschool Fees - See Activity Guide for most up to dates rates Temporary Use Permit*
8. PLANNING
Park Rentals for Private Events (Central, Centennial, La Ladera, Audie Murphy) Item Title: 11.1
User Fee Schedule Updates
Item Page Number: 9
Menifee Mayor and City Council
April 15, 2026
Page
533 of 909
CITY OF MENIFEE
EXHIBIT A: 2026 NEW USER FEES AND/OR FEE ADJUSTMENTS
Fee No. Fee Title Unit Adopted/
Current Fee
Proposed
Updated Fee
& New Fees
(+/-)
Change
%
change
Market
Rate
Cost
Recovery
Actual
Cost
Notes
8.58 Major $2149.91 $642 -$1,508 -70% N/A 100% $642
8.59 Major (501(c)) $1074.96 $321 -$754 -70% N/A 50% $642
8.60 Minor $1215.87 $208 -$1,008 -83% N/A 100% $208
8.61 Minor (501(c)) $608 $104 -$504 -83% N/A 50% $208
Special Districts*
9.129 CFD/LMD Annexation (Public Safety) Per Application $2,698 New 100% N/A 100%
9.130 Plus initial deposit determined by staff with charges for any outside or legal costs
(1-20 Units)
Deposit N/A $6,250 New 100% N/A Deposit
9.131 Plus initial deposit determined by staff with charges for any outside or legal costs
(> 20 Units)
Deposit N/A $12,500 New 100% N/A Deposit
* Subject to Technology Surcharge Fee
9. ENGINEERING
Item Title: 11.1
User Fee Schedule Updates
Item Page Number: 10
Menifee Mayor and City Council
April 15, 2026
Page
534 of 909
CITY OF MENIFEE
SUBJECT: Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village
MEETING DATE: April 15, 2026
TO: Mayor and City Council
PREPARED BY: Lauri Lockwood, Financial Analyst
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------
RECOMMENDED ACTION
1. Adopt a resolution modifying the authorized facilities for Community Facilities District No. 2025-4, Heritage Village, located on the northwest corner of Menifee Road and Rouse Road; and
2. Adopt a resolution certifying election results for Community Facilities District No. 2025-4, Heritage Village.
DISCUSSION
Lennar Homes of California, LLC (the “Developer”), a California limited liability company, plans to develop a residential community of 162 townhomes homes on approximately 7.5 net acres within the City. The property is located on the northwest corner of Menifee Road and Rouse Road, as shown in the attached location map. Community Facilities District 2025-4 (the “CFD”) was formed in April 2025 to allow the Developer to finance the cost of certain public improvements required within the project.
The facilities the CFD was formed to finance include City fees and facilities as well as Eastern Municipal Water District’s (“EMWD”) fees and facilities. After the CFD’s formation, the Developer determined that fees charged by the City and EMWD would be lower than anticipated, enabling the CFD to also finance fees for Romoland School District (the “School District”).
Millrose Properties California, LLC, a California limited liability company who currently owns all the taxable land within the district (the “Owner”), petitioned the City to amend the list of facilities the CFD is authorized to finance to include facilities owned by the School District. The proposed new facilities list is attached. No other changes to the CFD are requested and the Rate and Method of Apportionment previously approved will not be changed.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 1
Menifee Mayor and City Council
April 15, 2026
Page
535 of 909
City of Menifee Staff Report
Proposed Change Proceedings for CFD 2025-4, Heritage Village April 15, 2026
3 2
4 8
On March 4, 2026, the City Council adopted a resolution to initiate the process to modify the authorized facilities (the “Resolution of Consideration”). The Resolution of Consideration called for a public hearing to be held at this City Council meeting. Following the close of the public hearing, the City Council will be asked to adopt the resolution (the “Approving Resolution”) approving the modified facilities list. Such resolution calls for an election to submit to the qualified voters in the District a proposition to approve the amended list of facilities authorized to be financed by the district.
On file with the City Clerk is a Certificate of the Registrar of Voters of Riverside County, attached for reference, certifying there are no registered voters residing within the boundaries of the District. Accordingly, under the Mello-Roos Act, only landowners in the District are eligible to vote at the election, with each owner having one vote for each acre (or portion thereof) that they own within the district. There are two property owners within the district – the Developer and Millrose Properties, LLC, and they will be the only voters in the election.
If the City Council approves the resolution approving the modified facilities list and calling the election, the City Clerk will conduct the election. The City Clerk will announce the election results and the City Council will be asked to adopt the resolution certifying the election results. Based on the certification that two-thirds of the votes cast are in favor of the proposition voted upon, the resolution certifying the election results directs the City Clerk to record an amended notice of special tax lien on the property within the District.
This item was presented to the Finance Committee at the January 13, 2026, meeting. A motion was made and approved by the Committee to bring the item forward for City Council approval.
STRATEGIC PLAN OBJECTIVE
Regular City Business
FISCAL IMPACT
The Developer made a deposit to pay for the costs of the change proceedings, which may be reimbursed to the Developer in accordance with the reimbursement agreement previously entered into with the Developer.
ATTACHMENTS
1. CFD 2025-4 Project Location Map
2. CFD 2025-4 Resolution Approving Change Proceedings
3. CFD 2025-4 Resolution Certifying Election Results
4. CFD 2025-4 Certificate of Registrar of Voters
5. CFD 2025-4 Revised Facilities List
6. CFD 2025-4 Joint Community Facilities Agreement – Romoland
7. CFD 2025-4 CFD Report
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 2
Menifee Mayor and City Council
April 15, 2026
Page
536 of 909
331-250-028
331-250-029
331-250-030
Rouse Rd
Steamboat Dr
Twin
Harbor
Dr
Half Moon Bay Dr
Matthews Rd
Menifee Rd
Junipero Rd
SHEET 1 OF 1 SHEET
RECORDED THIS ____ DAY OF _______________, 20____ AT
THE HOUR OF ____ O'CLOCK __M IN BOOK _____
PAGE _____ OF MAPS OF ASSESSMENT AND COMMUNITY
FACILITIES DISTRICTS IN THE OFFICE OF THE COUNTY
RECORDER, IN THE COUNTY OF RIVERSIDE, STATE OF
CALIFORNIA.
FEE: _____________ NO.: ______________________
PETER ALDANA, ASSESSOR, COUNTY CLERK, RECORDER
BY: _______________________________
DEPUTY
\_
CFD 2025-4·|}þ74
·|}þ74
§¨¦215
MENIFEE
05 0 0 1 , 0 0 0250 Feet
PROPOSED BOUNDARY MAP
COMMUNITY FACILITIES DISTRICT NO. 2025-4
(HERITAGE VILLAGE)
OF THE CITY OF MENIFEE,
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA
I HEREBY CERTIFY THAT THE WITHIN MAP SHOWING PROPOSED
BOUNDARIES OF COMMUNITY FACILITIES DISTRICT NO. 2025-4
(HERITAGE VILLAGE), OF THE CITY OF MENIFEE, COUNTY OF
RIVERSIDE, STATE OF CALIFORNIA, WAS APPROVED BY THE CITY
COUNCIL OF THE CITY OF MENIFEE AT A REGULAR MEETING
THEREOF, HELD ON ______ DAY OF _______, 20______,
BY RESOLUTION NO. _______________
___________________________________
CITY CLERK
C IT Y OF ME NI FEE
FILED IN THE OFFICE OF THE CITY CLERK, CITY OF MENIFEE, T H I S _ _ __ D A Y O F __ _ _ __ _ _ , 2 0 __ _ _. ______________________________
CITY CLERK
C I T Y O F M E N I F E E
THIS BOUNDARY MAP CORRECTLY SHOWS THE LOT OR PARCEL OF LAND INCLUDED WITHIN THE BOUNDARIES OF THE COMMUNITY FACILITIES DISTRICT.
FOR DETAILS CONCERNING THE LINES AND DIMENSIONS OF LOTS OR PARCEL REFER TO THE COUNTY ASSESSOR MAPS FOR FISCAL YEAR 2024-25. - LEGEND
CITY BOUNDARY
CFD BOUNDARY
PARCEL LINE
XXX-XXX-XXX ASSESSOR PARCEL NUMBER
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 3
Menifee Mayor and City Council
April 15, 2026
Page
537 of 909
RESOLUTION NO. 26-
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 TO PROCEED
MODIFYING THE AUTHORIZED FACILITIES FOR THE DISTRICT
WHEREAS, after a public hearing, on April 2, 2025, the City Council (the “City Council”) of the City of Menifee (the “City”) adopted Resolution Nos. 25-1559 (the “Resolution of Formation”) and 25- 1560 (the “Resolution to Incur Bonded Indebtedness”) which formed Community Facilities District No. 2025-4, Heritage Village, of the City of Menifee (the “District” or “Community Facilities District No. 2025- 4”) and called a special election on April 2, 2025, within the District on three propositions relating to the levying of a special tax, the incurring of bonded indebtedness and the establishment of an appropriations limit for the District, which were approved by more than two- thirds vote by the qualified electors within the District on April 2, 2025; and
WHEREAS, subsequent to formation, the District received a petition (the “Petition”) signed by Millrose Properties California, LLC, a California limited liability company ( the “Owner”), which currently owns all of the taxable land within the District , to initiate certain changes to amend the list of facilities authorized to be financed by the District to include certain additional facilities necessary for the development as set forth in Exhibit A to Resolution No. 26 -1684 (the “Resolution of Consideration”) , consistent with the provisions of Sections 53313.5 of the Government Code (the “Change Proceedings”); and
WHEREAS, on March 4, 2026, the City Council, acting as the legislative body of Community Facilities District No. 2025-4, approved the Resolution of Consideration, stating its intention to consider the approval of the Change Proceedings; and
WHEREAS, on April 15, 2026, this City Council conducted a noticed public hearing to determine whether it should proceed with the approval of the Change Proceedings; and WHEREAS, at the April 15, 2026, public hearing all persons desiring to be heard on all matters pertaining to the approval of the Change Proceedings were heard and a full and fair hearing was held; and
WHEREAS, the City Council determines herein that there have been fewer than twelve registered voters residing in the District for the period of 90 days prior to April 15, 2026 , and that the qualified electors within the District are the landowners therein; and WHEREAS, on the basis of all of the foregoing, the City Council has determined at this time to proceed with the approval of the Change Proceedings; and WHEREAS, the Owner has also requested the District enter into a Joint Community Facilities Agreement by and among the District, the City, the Romoland School District (the “School District”) and the Owner, which agreement is on file with the City Clerk and incorporated herein by this reference (the “Romoland Joint Community Facilities Agreement”); and
NOW, THEREFORE, BE IT RESOLVED THAT 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, does hereby determine and order as follows:
Section 1. Each of the above recitals is true and correct.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 4
Menifee Mayor and City Council
April 15, 2026
Page
538 of 909
Resolution Approving Change Proceedings for CFD No. 2025-4 (Heritage Village) 2 Section 2. The City Council hereby approves the facilities and incidental expenses set forth in Exhibit A to the Resolution of Consideration as the facilities and incidental expenses authorized to be financed by the District (the “Facilities” and the “Incidental Expenses,” respectively).
Section 3. Written protests against the approval of the Facilities and Incidental Expenses authorized to be financed by the District have not been filed by one -half or more of the landowners within the District or by one -half or more of the registered voters within the boundaries of the District. The City Council hereby finds that the approval of the Facilities and Incidental Expenses authorized to be financed by the District have not been precluded by a majority protest pursuant to Section 53337 of the Act.
Section 4. An election is hereby called within the boundaries of the District on the proposition of approving the Facilities and Incidental Expenses authorized to be financed by the District. The proposition to be placed on the ballot for the District is attached hereto as Exhibit A.
Section 5. The date of the foregoing election for the District shall be April 15, 2026, or such later date as is consented to by the City Clerk and the landowners within the District. The City Clerk shall conduct the election. Except as otherwise provided by the Act, the election shall be conducted by personally delivered or mailed ballots and, except as otherwise provided by the Act, the election shall be conducted in accordance with the provisions of law regulating elections of the City insofar as such provisions are determined by the City Clerk to be applicable.
Section 6. It is hereby found that there are no registered voters within the territory of the District, and, pursuant to Section 53326 of the Act, each landowner who is the owner of record on the date hereof, or the authorized representative thereof, shall have one vote for each acre or portion thereof that he or she owns within the District.
Section 7. Pursuant to Section 53316.2 of the Act, the City Council hereby approves the Romoland Joint Community Facilities Agreement substantially in the form on file with the City Clerk, and determines that the Romoland Joint Community Facilities Agreement will be beneficial to the residents of the territory served by the School District and included within the jurisdictional boundaries of the District. Each of the City Manager, Chief Financial Officer , and their written designees is hereby authorized and directed to execute and deliver the Romoland Joint Community Facilities Agreement in the form presented at this meeting with such changes, insertions and omissions as may be approved by the officer or officers executing such agreement, said execution being conclusive evidence of such approval.
Section 8. This Resolution shall be effective upon its adoption.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 5
Menifee Mayor and City Council
April 15, 2026
Page
539 of 909
Resolution Approving Change Proceedings for CFD No. 2025-4 (Heritage Village) 3 PASSED, APPROVED AND ADOPTED this the 15th day of April, 2026.
__________________________
Bob Karwin, Mayor Pro Tem
Attest:
___________________________
Stephanie Roseen, City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 6
Menifee Mayor and City Council
April 15, 2026
Page
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EXHIBIT A
EXHIBIT A
SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2025-4 OF THE
CITY OF MENIFEE (HERITAGE VILLAGE)
SPECIAL ELECTION
April 15, 2026
This ballot represents ___ votes.
To vote, mark the voting square after the word “YES” or after the word “NO”. All distinguishing marks are forbidden and make the ballot void.
If you wrongly mark, tear, or deface this ballot, return it to the City Clerk and obtain another.
PROPOSITION A: Shall Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee be authorized to finance the Facilities and Incidental Expenses described in Resolution No. 26- 1684?
YES
NO
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 7
Menifee Mayor and City Council
April 15, 2026
Page
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RESOLUTION NO. 26-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, ACTING IN ITS
CAPACITY AS THE LEGISLATIVE BODY OF CITY OF MENIFEE COMMUNITY FACILITIES DISTRICT NO. 2025-4, HERITAGE VILLAGE , CERTIFYING THE RESULTS OF THE APRIL 15, 2026, SPECIAL ELECTION
WHEREAS, the City Council of City of Menifee (the “City Council”) , acting as the legislative body of Community Facilities District No. 2025-4, Heritage Village, of the City of Menifee (the “District”), determined to proceed with approval of change proceedings within the District described in Resolution No. 26-1684 (the “Change Proceedings”) and called and duly held an election on April 15, 2026, within the boundaries of the District pursuant to Resolution No. 26-1684 for the purpose of presenting to the qualified electors within District the proposition attached hereto as Exhibit A; and WHEREAS, there has been presented to the City Council a certificate of the City Clerk canvassing the results of the election, a copy of which is attached hereto as Exhibit B; NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Menifee, California hereby determines and orders as follows:
Section 1. Each of the above recitals is true and correct and is adopted by the legislative body of the District.
Section 2. Proposition A presented to the qualified electors of the District on April 15, 2026, was approved by two-thirds or more of the votes cast at the election held for the District, and Proposition A has carried. The City Council hereby orders the Change Proceedings.
Section 3. The City Clerk is hereby directed to record in the Office of the County Recorder within fifteen days of the date hereof an amended and restated notice of special tax lien for the District that Bond Counsel to the District shall prepare in the form required by Streets and Highways Code Section 3114.5.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 8
Menifee Mayor and City Council
April 15, 2026
Page
542 of 909
Resolution Certifying Election Results for CFD No. 2025-4 (Heritage Village)
2 PASSED, APPROVED AND ADOPTED this the 15th day of April, 2026.
__________________________
Bob Karwin, Mayor Pro Tem
Attest:
___________________________
Stephanie Roseen, City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 9
Menifee Mayor and City Council
April 15, 2026
Page
543 of 909
EXHIBIT A
EXHIBIT A
SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2025-4 OF THE
CITY OF MENIFEE (HERITAGE VILLAGE)
SPECIAL ELECTION
April 15, 2026
This ballot represents ___ votes.
To vote, mark the voting square after the word “YES” or after the word “NO”. All distinguishing marks are forbidden and make the ballot void.
If you wrongly mark, tear, or deface this ballot, return it to the City Clerk and obtain another.
PROPOSITION A: Shall Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee be authorized to finance the Facilities and Incidental Expenses described in Resolution No. 26- 1684?
YES
NO
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 10
Menifee Mayor and City Council
April 15, 2026
Page
544 of 909
EXHIBIT B
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 Election for Community Facilities District No. 2025-4, Heritage Village, of the City of Menifee. The election was held in the City Council Chambers, 29844 Haun Road, Menifee, California, on April 15, 2026. 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 c ast for and against Proposition A are as follows:
PROPOSITION A
YES:
NO:
TOTAL:
Dated this 15th day of April, 2026.
Stephanie Roseen, City Clerk
City of Menifee
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 11
Menifee Mayor and City Council
April 15, 2026
Page
545 of 909
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 12
Menifee Mayor and City Council
April 15, 2026
Page
546 of 909
Types of Facilities To Be
Financed By Community
Facilities District No. 2025-4
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 which are included in the City’s fee programs with respect to such facilities and authorized to be financed under the Mello-Roos Community Facilities Act of 1982, as amended (the “City Facilities”); (ii) water and sewer facilities including the acquisition of capacity in the sewer system and/or water system of Eastern Municipal Water District which are included in Eastern Municipal Water District’s water and sewer capacity and connection fee programs (the “Water District Facilities”); (iii) interim and permanent school facilities of Romoland School District, including classrooms, multi-purpose facilities, administration and auxiliary space at school facilities, athletic fields, playgrounds and recreational facilities and improvements thereto, landscaping, access roadways, drainage, sidewalks and gutters and utility lines, furniture, equipment and technology, including technology upgrades and mobile devices and infrastructure therefore, with a useful life of at least five (5) years at such school facilities (the “School Facilities”); and (iv) overhead utility undergrounding and dry utilities (the “Utilities” and together, with the City Facilities, the School District 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: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 13
Menifee Mayor and City Council
April 15, 2026
Page
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4912-9038-0424/022648-0152
COMMUNITY FACILITIES DISTRICT NO. 2025-4
OF THE CITY OF MENIFEE (HERITAGE VILLAGE)
JOINT COMMUNITY FACILITIES AND
SCHOOL FACILITIES MITIGATION AGREEMENT
THIS JOINT COMMUNITY FACILITIES AND SCHOOL FACILITIES MITIGATION AGREEMENT (“Agreement”) is made and entered into as of the ________ day of ________, 2026, by and among the CITY OF MENIFEE, a general law city (the “City”), the ROMOLAND SCHOOL DISTRICT, a California public school district organized and operating pursuant to the applicable provisions of the California Education Code and the California Constit ution (the “School District”) and LENNAR HOMES OF CALIFORNIA, LLC, a California limited liability comp any (“Developer”).
R E C I T A L S:
A. Developer is the developer of certain real property (the “Property”) located within the boundaries of the City and School District, consisting of approximately 7.5 gross acres within Tract No. 38346, located at the northwest corner of Menifee Road and Rous e Road in the City (the “Property”), and as more fully described in Exhibit “A” attached hereto. Developer intends to develop the Property with approximately 162 condominium single-family units.
B. The development of the Property will require the payment to School District of all or a part of School Fees (defined below) required to finance School Facilities (defined herein). In lieu of the School Fees, the Mitigation Amount (as defined below) is expected to be paid to School District, in whole or in part, from Bond Proceeds (defined below) of the hereinafter described CFD (defined below). The City Facilities (as defined herein) and School Facilities are sometimes collectively referred to herein as the “Facilities.”
C. Pursuant to Developer’s request, the City Council of the City, has formed the hereinafter described Community Facilities District No. 2025-4 (Heritage Village ) of the City of Menifee (the “CFD”) pursuant to the Act (as defined below) to finance all or a portion of the Facilities.
The City will have responsibility for the formation and administration of the CFD.
D. The City is authorized by Section 53313.5 of the Act to finance, by means of the CFD, the School Facilities. This Agreement constitutes a “joint community facilities agreement” (“JCFA”) within the meaning of Section 53316.2 of the Act by and among the Ci ty, School District and Developer, pursuant to which the CFD will be authorized to finance the School Facilities. Pursuant to Section 53316.2(b) of the Act, a JCFA may be approved by two or more public agencies prior to the adoption of a resolution authorizing the issuance of bonds. As provided by Section 53316.6 of the Act, responsibility for constructing, maintaining and operating the City Facilities is the City’s to the extent set forth herein and responsibility for constructing, providing and operat ing the School Facilities is delegated to School District.
E. The provision of the City Facilities and School Facilities is necessitated by the development of the Property, and the Parties hereto find and determine that the residents of the City, School District and CFD will be benefited by the financing of the City Facilities and School Facilities, and that this Agreement is beneficial to the interests of such residents.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 14
Menifee Mayor and City Council
April 15, 2026
Page
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2 4912-9038-0424/022648-0152
GENERAL PROVISIONS
Section 1.1 Recitals. The above recitals are true and correct and are hereby incorporated by this reference.
Section 1.2 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) “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, commencing with California Government Code Section 53311, et seq. (b) “Agreement” means this Joint Communities Facilities and School Facilities Mitigation Agreement.
(c) “Alternative Level 3 Fee” means the school fee authorized to be levied by School District pursuant to Government Code Section 65995.7. (d) “Bond Proceeds” shall mean those net funds generated by the sale of the Bonds. (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, as authorized by the qualified electors within the CFD. (g) “Building Square Feet/Footage” or “BSF” means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space in a Unit, as determined by reference to the building permit(s) application for such Assessor’s Parcel. (h) “Calendar Year” means the period commencing January 1 of any year and ending the following December 31.
(i) “Certificates of Compliance” means those certificates issued by School District pursuant to Education Code Section 17620(b) to Developer certifying that Developer has paid the Deposit in order to obtain a building permit for a Unit. (j) “CFD” means Community Facilities District No. 2025-4 (Heritage Village) of the City of Menifee.
(k) “City Facilities” means certain City facilities including, but not limited to fire and safety facilities, street, storm drainage, general government and public use facilities, master planning facilities, park facilities, traffic signals, and utility undergrounding necessary to serve the Property.
(l) “COC Credit Amount” means the amount deposited in the School Fee Fund not previously allocated to the mitigation of Units.
(m) “Deposits” shall mean all amounts advanced to School District by Developer prior to the issuance and sale of the Bonds, as security for the future payment, with Bond Proceeds, of Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 15
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April 15, 2026
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the Mitigation Amounts due in connection with Certificates of Compliance issued by School District for Units within the CFD prior to the issuance and sale of the Bonds and the funding of the School Fee Fund.
(n) “Disbursement Request” means a request for payment relating to School Facilities in the form attached hereto as Exhibit “B.”
(o) “Fiscal Year’’ means the period commencing July 1st and ending the following June 30th.
(p) “Level 1 Fee” means the school fee authorized to be levied by School District pursuant to Government Code Section 65995.
(q) “Level 2 Fee” means the school fee authorized to be levied by School District pursuant to Government Code Section 65995.5.
(r) “Mitigation Amount or Amounts” means for each Unit, on the date of calculation, the greater of (i) 160% of the Level 1 Fee or Level 2 Fee then in effect, or (ii) the Alternative Level 3 Fee, if any, then in effect and applicable to Units at the time of the request for Certificates of Compliance for such Units. The Mitigation Amount for Units shall be calculated at the time of the request for Certificates of Compliance for such Units except that the Mitigation Amount funded by the COC Credit Amount shall be calculated as of the date of the sale of the applicable series of Bonds.
(s) “Party” or “Parties” shall mean any one or all of the parties to this Agreement and the CFD.
(t) “Property” means the real property described in Exhibit “A” attached hereto. (u) “Rate and Method” means the individual 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. (v) “School Facilities” means those K -8 school sites, preschool facilities, school facilities, including classrooms, multi-purpose facilities, administration and auxiliary space at school facilities, athletic fields, playgrounds and recreational facilities and improvements thereto, landscaping, access roadways, drainage, sidewalks and gutters and utility lines, furniture, equipment and technology, including technology upgrades and mobile devices and infrastructure therefore, with a useful life of at least five (5) years needed by School District, and also includes costs associated with the maintenance and operation of school facilities in accordance with the Act. (w) “School Fee Fund” means the fund(s), account(s) or sub-account(s) of the CFD (regardless of its designation within the Bond Resolution) into which a portion of the Bond Proceeds may be deposited in accordance with the Bond Resolution to finance the School Facilities. (x) “School Fees” means those school mitigation fees pursuant to Education Code Section 17620 and Government Code Sections 65995, 65995.5 and 65995.7 required to finance School Facilities.
(y) “State” means the State of California.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 16
Menifee Mayor and City Council
April 15, 2026
Page
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(z) “Special Taxes” means the special taxes authorized to be levied and collected pursuant to the Rate and Method.
(aa) “Unit” means each separate single-family detached dwelling unit that comprises an independent facility capable of conveyance separate from adjacent residential dwelling units.
ARTICLE II
FORMATION OF THE CFD AND ISSUANCE OF BONDS
Section 2.1 Formation of the CFD . The City, pursuant to the written request of the Developer, initiated proceedings pursuant to the Act for the formation of the CFD, the authorization of the Special Taxes within the CFD and the authorization of Bonds on behalf of the CFD, with the qualified electors approving the levy of the Special Taxes and the sale of the Bonds.
Section 2.2 Mitigation Amount Deposits. Subsequent to the execution of this Agreement and prior to School District’s receipt of Bond Proceeds, Developer may obtain Certificates of Compliance for Units within the CFD by posting Deposits equivalent to the Mitigation Amount.
Deposits posted prior to the issuance of Bonds will be held unexpended by School District and then released to Developer upon the sale of Bonds to the extent the Mitigation Amounts for such Units (based on the Mitigation Amount in effect at the time the final Certificate of Compliance was issued for each respective Unit) have been satisfied by the deposit of Bond Proceeds in the School Fee Fund.
After the issuance of the last series of Bonds (other than Bonds issued for refunding purposes only), to the extent that all Bond Proceeds deposited into the School Fee Fund are not sufficient to satisfy the Mitigation Amounts for all such Units, the portion of the Mitigation Amounts not satisfied with Bond Proceeds shall be retained from the Deposits and used by School District to construct School Facilities.
Section 2.3 Issuance and Sale of Bonds. The City Council of the City, acting as the legislative body of the CFD, may, in its sole discretion, in accordance with its adopted policies, adopt the Bond Resolution and issue the Bonds. Prior to the City Council of the City adopting the Bond Resolution, Developer shall notify School District of: (i) the estimated issuance date for the Bonds and (ii) the estimated amount of proceeds to be deposited in the School Fee Fund.
Section 2.4 Bond Proceeds. In the event that the CFD is formed and Bonds are issued, the City, or the CFD (as may be applicable), and Developer shall determine the amount of Bond Proceeds to be deposited into the School Fee Fund or any applicable accounts or subaccounts thereof. As Bond Proceeds are transferred to School District, Developer shall receive a credit in the amount transferred against the payment of the Mitigation Amounts. The purpose of this Agreement is to provide a mechanism by which the CFD may levy Special Taxes and issue Bonds to provide a source of funds to finance School Facilities in lieu of the payment of the Mitigation Amounts. In the event that Bond Proceeds, including investment earnings thereon, are not available or sufficient to satisfy the obligation for the Mitigation Amounts for all Units in the CFD, then Developer shall remain obligated to make Deposits or pay the Mitigation Amounts to School District as provided in Section 2.5 below.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 17
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April 15, 2026
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Section 2.5 Mitigation Payment Credit Account.
(a) After being notified by Developer that Bond Proceeds have been deposited into the School Fee Fund, School District will calculate the COC Credit Amount and establish a credit account (“Credit Account”) in the amount equal to the Bond Proceeds deposited in the School Fee Fund less the total of the Mitigation Amounts for all Units for which Deposits have been made based on the Mitigation Amount in effect at the time such Deposits were made. (b) Once the Credit Account has been established, Developer may obtain Certificates of Compliance for Units within the CFD by requesting that School District deduct from the Credit Account the Mitigation Amount for which the Certificate of Compliance is being sought.
In the event that there is an insufficient balance in the Credit Account to cover a request for a Certificate of Compliance, Developer may only obtain a Certificate of Compliance by paying the remaining Mitigation Amount in cash.
Section 2.6 Disbursements for School Facilities.
(a) Bond Proceeds of the CFD designated for the funding of School Facilities shall be held by the CFD in the School Fee Fund that shall be invested by the City and earn and accumulate its own interest. In the event that the CFD has deposited Bond Proceeds to the School Fee Fund, the City shall notify the School District and the Developer, in writing, as to the amount of Bond Proceeds so deposited and the yield on the Bonds. All interest earnings on amounts in the School Fee Fund shall remain in the School Fee Fund and will be available for disbursement for the funding of School Facilities as described below.
(b) The City shall make disbursements from the School Fee Fund in accordance with the terms of this Agreement and neither the City nor the CFD shall be responsible to the School District for costs incurred by the School District as a result of withheld or delayed payments. (c) The School District agrees that it will request a disbursement of Bond Proceeds only for costs related to the School Facilities that are eligible for financing under the Act. The School District agrees that prior to requesting payment from the CFD it shal l review and approve all costs included in its request and will have already paid such costs of School Facilities from its own funds or will disburse such amounts to pay the costs of the School Facilities within five banking days of receipt of funds from t he CFD. In the event that the School District does not disburse any Bond Proceeds received for disbursement to third parties within five banking days of receipt, it will trace and remit to the CFD from which such Bond Proceeds were received all earnings, if any, earned by the School District in excess of the yield on the Bonds, from the date of receipt of such Bond Proceeds by the School District to the date of expenditure by the School District of such Bond Proceeds for capital costs of the School Facilit ies. Such remittance, if any, shall occur on the earlier of the date of expenditure of such Bond Proceeds or each anniversary date of the transfer of such Bond Proceeds from the CFD to the School District. The School District agrees that in processing the above disbursements it will comply with all legal requirements for the expenditure of Bond Proceeds under the Act and the Internal Revenue Code of 1986 and any amendments thereto. As a condition to receiving any proceeds of the Bonds, the School Distric t agrees that it shall provide to the CFD, a certificate confirming the representations contained in this Section 2.6 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.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 18
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(d) The School District agrees to maintain adequate internal controls over its payment function and to maintain accounting records in accordance with generally accepted accounting procedures. The School District will, upon request, provide to the CFD and the City its annual financial report certified by an independent certified public accountant and any other documents deemed necessary by the CFD and the City for purposes of calculating the CFD’s arbitrage rebate obligations. The CFD and the City shall have t he right to conduct their own audit of the School District’s records related to the expenditure of the Bond Proceeds disbursed to the School District at reasonable times during normal business hours.
(e) From time to time, the School District or Developer may submit a Disbursement Request along with adequate supporting documentation to the CFD, for the exact amount of Bond Proceeds to be disbursed to the School District. Upon receipt of an approved Disbursement Request completed in accordance with the terms of this Agreement, the City shall wire transfer ( or otherwise pay) such portion of requested funds as are then available for release in the School Fee Fund pursuant to the documents pursuant to which the Bonds are issued to the School District’s bank account, as directed by the School District.
(f) If five (5) years following the issuance of the Bonds, 85% or more of the amount deposited into the School Fee Fund from proceeds of such Bonds have not been expended for federal tax law purposes, the CFD may in its sole discretion transfer such funds to such other account in the sole discretion of the CFD to be used to pay for the costs of eligible public facilities or to the redemption fund to redeem Bonds; provided, however that such funds may be retained in the School Fee Fund beyond such five -year period upon the written request of the School District, and delivery by the School District of an opinion of bond counsel that such extension will not affect the exclusion from gross income of interest on such Bonds issued on a tax-exempt basis. City shall provide School District with written notice at least six months prior to making any transfer pursuant to this Section
2.6(f).
Section 2.7 Responsibility for Mitigation Amounts.
(a) The Parties hereto acknowledge and agree that the final responsibility for the payment of the Mitigation Amounts not funded with Bond Proceeds lies with Developer. (b) If the amounts derived from Bond Proceeds for School Facilities deposited in the School Fee Fund, including investment earnings thereon, if any, are not sufficient to fund the total cost of the Mitigation Amounts, the Parties hereto agree that all responsibility and liability for the amount of such shortfall shall be and remain with Developer , and shall not lie with the CFD, School District, or the City.
(c) School District agrees to utilize or apply funds provided to it by the CFD, in accordance with the Act, the Local Agency Special Tax and Bond Accountability Act (described in Section 4.1 hereof), the requirements of federal tax law compliance with which is necessary in order for interest on the Bonds to be excluded from the gross income of the recipients for federal income tax purposes and other applicable law, and as set forth herein. (d) School District shall indemnify, defend, and hold harmless, the City, CFD and Developer, their respective officers, employees and agents, and each and every one of them from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of or resulting from the viol ation by School District of any of the Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 19
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terms of this Agreement of the design, engineering, and construction of the School Facilities and any other facilities constructed with the proceeds of the Mitigation Amounts.
Section 2.8 Mitigation of School Fee Obligations of Development of the Property .
Developer and School District agree that payment of the Mitigation Amount to School District with respect to any Unit for which a Certificate of Compliance is requested within the Property, whether with CFD Bond Proceeds or otherwise, shall constitute full mitigati on of the obligations due School District in connection with the issuance of a Certificate of Compliance with respect to such Unit.
School District shall have no obligation, responsibility, or authority with respect to the issuance and sale of the Bonds, the Bond Proceeds available to finance the construction of School Facilities, the payment of the principal and interest on the Bonds, or for the levy of the Special Taxes to provide for the payment of principal and interest thereon. The City shall have the sole authority and responsibility for all such matters.
The Parties hereto specifically agree that, except as otherwise provided for in Section 2.4, the liabilities of the CFD, including liabilities, if any, of the CFD pursuant to the documents providing for the issuance of Bonds, including the Bond Resolution, shall not be or become liabilities of School District.
Section 2.9 Waiver of State an d Local Funding Credits and Right to Protest . In consideration of School District’s agreement with respect to the Property to accept the Mitigation Amounts as full mitigation of the impact of the students generated by the development of the Property upon the School Facilities, and provided School Dist rict does not breach such agreement, Developer agrees to waive all past, present and future credit against, or fair share reduction in, Mitigation Amounts based upon State matching funding provided to School District or the proceeds from a District -wide special tax or general obligation bond authorization, or School Facilities Improvement District (“SFID”) bond authorization for school facilities. In addition, Developer knowingly waives its right of protest as may be afforded by Government Code Section 66020 or any other provision of law, so long as School District is not in breach of this Agreement.
Section 2.10 Developer Advance. Developer has deposited with School District the amount of $16,500 to be used to advance fund School District’s costs in entering into and administering the terms of this Agreement. Such advance by Developer may be reimbursed, subject to the approval of the City, from the proceeds of the sale of the Bonds, but under no circumstances shall School District be obligated to pay Developer from any other source of funds. Should this Agreement not be approved for any reason, any remaining balance of the amounts advanced by Developer pursuant to this Section shall be refunded to Developer within ten (10) business days after School District is notified that this Agreement will not be approved.
Section 2.11 Administration of the CFD. The City shall have the power and duty to provide for the administration of the CFD, subject to the terms hereof and the Bond Resolution, including employing and compensating all consultants and providing for the various other administration duties set for th in this Agreement. It is understood and agreed by Parties hereto that School District was not or will not be considered a participant in the proceedings relative to formation of the CFD or the issuance of the Bonds, other than as set forth in this Agreement.
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ARTICLE III
TERM AND TERMINATION
Section 3.1 Effective Date. This Agreement shall become effective and of full force and effect as of the date (“Effective Date”) it is approved and executed by the Board of Trustees of School District, by Developer and the City Council of the City, to be confirmed by the execution hereof by the authorized representatives of the Parties hereto.
ARTICLE IV
ADDITIONAL GENERAL PROVISIONS
Section 4.1 Recordkeeping; Inspection of Records. School District hereby agrees to keep and maintain full and accurate records of all amounts, if any, paid to School District for Mitigation Amounts and investment earnings thereon and the City or the CFD, or the Fiscal Agent on their behalf, hereby agrees to keep and maintain full and accurate records of all amounts, and investment earnings, if any, disbursed to School District from the School Fee Fund. Each Party further agrees to make such records available to any o ther Party hereto, including Developer, during normal business hours upon reasonable prior notice. All such records shall be kept and maintained by the appropriate Party as provided by applicable law and their respective policies. School District and Developer agree that they will cooperate with the CFD and the City in providing documentation, reports or other data reasonably required and requested by the City or the CFD in meeting the reporting requirements of the CFD under Sections 50075.1, 50075.3, and 50075.5 and Article 1.5 (commencing with Section 53410) of Chapter 3 of Part 1 of Division 2 of Title 5 of, the Government Code (collectively, the “Local Agency Special Tax and Bond Accountability Act”). School District’s reporting obligations pursuant t o this Section shall be limited to providing reports or other data detailing the following: (A) the amount of CFD funds received by School District to fund School Facilities, (B) the amount of such CFD funds deposited in separate funds or accounts of School District reflecting Mitigation Amounts and the number of dwelling units for which such Mitigation Amounts apply, and (C) School Facilities that have been acquired or constructed, in whole or in part, with CFD funds. School District’s reporting obligation shall terminate when all CFD funds have been disbursed from the School Fee Fund, or from any account or subaccount thereof that has been allocated Bond Proceeds to finance Mitigation Amounts, and School District has provided to the City a report for the last disbursement received by School District. If no CFD funds have been received by School District or used to finance School Facilities since the previous report, no report shall be required and the City may rely upon the previous reports.
Section 4.2 Indemnification.
(a) The City agrees to indemnify, defend and hold harmless School District, and its officers, employees and agents, and each and every one of them, from and against any and all claims, losses, expenses, suits, actions, decrees, judgments, awards, attorneys’ fe es and court costs that the School District, or its officers, employees and agents, or any combination thereof, may suffer or that may be sought against or recovered or obtained from School District, or its respective officers, employees or agents, or any combination thereof, as a result of or by reason of or arising out of or in consequence of the acquisition, construction, installation, operation, maintenance or utilization of the City Facilities, the issuance of the Bonds and/or the formation or administration of t he CFD. If the City fails to do so, School District shall have the right, but not the obligation, to defend the same a nd Item Title: 11.2
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charge all of the direct and incidental costs of such defense, including any attorneys’ fees or court costs, to and recover the same from the City.
No indemnification is required to be paid by the City for any claim, loss or expense arising from the willful misconduct or negligence of the School District, or its officers, employees or agents. (b) Developer agrees to indemnify, defend and hold harmless the City, the CFD and the School District, and their respective officers, employees and agents, and each and every one of them, from and against any and all claims, losses, expenses, suits actions, decrees, judgments, awards, attorneys’ fees and court costs that the City, the CFD or the School District, or their respective officers, employees and agents, or any combination thereof, may suffer or that may be sought against or recovered or obtained from the City, the CFD or the School District, or their respective officers, employees or agents, or any combination thereof, as a result of or by reason of or arising out of or in consequence of any act or omission of Developer with respect to this Agreement, the formation of the CFD or the use of the Bond funds. If Developer fails to do so, the City, the CFD and the School District shall have the right, but not the obligation, to defend the same and charge all of the direct and incidental costs of such defense, including any attorneys’ fees or court costs, to and recover the same from Developer.
No indemnification is required to be paid by Developer for any claim, loss or expense arising from the willful misconduct or negligence of the City (if indemnification is sought by the City), the CFD (if indemnification is sought by the CFD) or the School District (if indemnification is sought by the School District), or their respective officers, employees or agents (if indemnification is sought thereby).
Section 4.3 Partial Invalidity. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible.
Section 4.4 Successors and Assigns. Developer may assign its rights pursuant to this Agreement to a purchaser of the Property, or any portion thereof, and such purchaser and assignee shall assume the obligations of Developer pursuant to this Agreement and to be bound thereby. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties hereto.
Section 4.5 Notice. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to any Party or other person shall be deemed to have been received when personally delivered or upon deposit of the same in the United States Post Office reg istered or certified, postage prepaid, addressed as follows:
City: City of Menifee
29844 Haun Road
Menifee, CA 92586
Attention: Chief Financial Officer
School District: Romoland School District
25900 Leon Road
Homeland, California 92548
Attention: Superintendent
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With a copy to: Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Bradley R. Neal, Esq.
Developer: Lennar Homes of California, LLC
4140 Temescal Canyon Rd., Ste. 410
Corona, CA 92883
Attention: Geoff Smith, Vice President
Each Party can change its address for delivery of notice by delivering written notice of such change or address to the other Parties within ten (10) calendar days prior to such change.
Section 4.6 Captions. The captions to Sections used herein are for convenience purposes only and are not part of this Agreement.
Section 4.7 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of California applicable to contracts made and performed in said State.
Section 4.8 Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the matters provided for herein and supersedes all prior agreements and negotiations between the Parties with respect to the subject matter of this Agreement.
Section 4.9 Amendments. This Agreement may be amended or modified only in writing executed by the authorized representative(s) of each of the Parties hereto.
Section 4.10 Waiver. The failure of any Party hereto to insist on compliance within any of the terms, covenants or conditions of this Agreement by any other Party hereto, shall not be deemed a waiver of such terms, covenants or conditions of this Agreement by such other Party, nor shall any waiver constitute a relinquishment of any other right or power for all or any other times.
Section 4.11 Cooperation and Execution of Docu ments. The Parties hereto agree to complete and execute any further or additional documents that may be necessary to complete or further the terms of this Agreement.
Section 4.12 Attorneys’ Fees. In the event of the bringing of any action or suit by any Party against any other Party arising out of this Agreement, the Party in whose favor final judgment shall be entered shall be entitled to recover from the losing Party all costs and expenses of sui t, including reasonable attorneys’ fees.
Section 4.13 Exhibits. The following exhibits attached hereto are incorporated into this Agreement by reference.
Exhibit Description
“A” Property Description
“B” Disbursement Request Form
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Section 4.14 Signatories. The signatories hereto represent that they have been appropriately authorized to enter into this Agreement on behalf of the Party for whom they sign.
Section 4.15 Execution in Counter parts. This Agreement may be executed in counterparts, each of which shall be deemed an original. [Signatures on following page]
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IN WITNESS WHEREOF, the Parties hereto have executed this Joint Community Facilities and School Facilities Mitigation Agreement as of the day and year written above.
CITY OF MENIFEE, a political subdivision of the
State of California
By:
Armando G. Villa, City Manager
ATTEST:
By:
Stephanie Roseen, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY OF THE CITY OF MENIFEE
By:
Jeffrey T. Melching, City Attorney
(SIGNATURE PAGES CONTINUE ON NEXT PAGE)
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Developer: LENNAR HOMES OF CALIFORNIA, LLC, a
California limited liability company
By:
Its:
(SIGNATURE PAGES CONTINUE ON NEXT PAGE)
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ROMOLAND SCHOOL DISTRICT
By:
Superintendent
ATTEST:
By
Clerk of the Board of Trustees
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A-1
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EXHIBIT “A”
PROPERTY DESCRIPTION
PARCEL 1: (APN: 331-250-028 AND 331-250-030)
PARCEL "B" DESCRIBED ON EXHIBIT "A" AND SHOWN ON EXHIBIT "B" OF LOT LINE ADJUSTMENT NO. LLA 17 -002 RECORDED FEBRUARY 21, 2020, AS INSTRUMENT NO. 2020-0081364, OF OFFICIAL RECORDS, DESCRIBED AS FOLLOWS:
BEING A PORTION OF PARCEL 1 OF MERGER 18-001, A CERTIFIED COPY OF WHICH RECORDED FEBRUARY 21, 2020 AS INSTRUMENT NO. 2020-0080310 OF OFFICIAL RECORDS, TOGETHER WITH LOT 976 OF ROMOLA FARMS NO. 10, IN THE CITY OF MENIFEE, COUNTY OF RIVERSIDE, STATE OF CALIF ORNIA, AS FILED IN BOOK 15, PAGES 29 THROUGH 31, INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH THAT PORTION OF LOT "C" (ROUSE
ROAD) ADJOINING SAID LOT AS SAID ROAD WAS VA CA TED AND ABANDONED BY
RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF RIVERSIDE, A CERTIFIED COPY OF WHICH RECORDED FEBRUARY 6, 1962 AS INSTRUMENT NO. 11656 OF OFFICIAL RECORDS, IN SECTION 14, TOWNSHIP 5 SOUTH, RANGE 3 WEST, SAN BERNARDINO BASE AND MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECT OF SAID ROUSE ROAD (60 FEET WIDE PER MAP BOOK 15, PAGES 29-31) AND JUNIPERO ROAD (60 FEET WIDE PER MAP BOOK 15, PAGES 29-31);
THENCE ALONG SAID CENTERLINE OF ROUSE, NORTH 89°58'32" EAST, 660.23, SAID POINT BEING THE TRUE POINT OF BEGINNING;
THENCE NORTH 00°21'27" EAST, 330.06 FEET TO THE NORTHWEST CORNER OF LOT 976·'
THENCE ALONG THE NORTHERLY LINE OF LOT 976, NORTH 89°58'57" EAST, 630.22 FEET TO A POINT ON THE WESTERLY RIGHT-OF-WAY LINE OF MENIFEE ROAD (60 FEET WIDE PER MAP BOOK 15, PAGES 29-31);
THENCE ALONG SAID WESTERLY RIGHT -OF-WAY LINE OF MENIFEE ROAD SOUTH 00°21'27" WEST, 329.98 FEET TO A POINT ON THE CENTERLINE OF ROUSE ROAD;
THENCE ALONG THE CENTERLINE OF ROUSE ROAD, SOUTH 89°58'32" WEST, 630.22, TO THE TRUE POINT OF BEGINNING.
PARCEL 2: (331-250-029)
LOT 977, OF ROMOLA FARMS NO. 10, IN THE CITY OF MENIFEE, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS FILED IN BOOK 15, PAGES 29 THROUGH 31, INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
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EXHIBIT “B”
DISBURSEMENT REQUEST FORM
1. Community Facilities District No. 2025-4 of the City of Menifee (Heritage Village ) (“CFD No. 2025-4”) is hereby requested to pay from the School Fee Fund, or any applicable account or subaccount thereof, established by CFD No. 2025-4 in connection with its Special Tax Bonds (the “Bonds”) to Romoland School District (“Romoland”), as payee, the sum set forth below:
$__________ (the “Requested Amount”)
2. The Requested Amount is due and payable, has not formed the basis of any prior request or disbursement and is being made with respect to the obligation of the Property to pay Mitigation Amounts to MUSD.
3. The Requested Amount is authorized and payable pursuant to the terms of that certain Joint Community Facilities Agreement, dated as of __________, 2026, by and among the City of Menifee, Romoland School District, Lennar Homes of California, LLC, a California limited liability company (the “JCFA”).
4. Capitalized undefined terms used herein shall have the meanings ascribed to them in the JCFA.
Date: LENNAR HOMES OF CALIFORNIA, LLC, a
California limited liability company
By:
Its: Authorized Signatory
Date: ROMOLAND SCHOOL DISTRICT
By:
Its:
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Public Hearing Report
Community Facilities District No. 2025-4
(Heritage Village)
April 15, 2026
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Table of Contents
Sections P age ____________________________________________ 1 Introduction ______________________________________________________ 1 2 Description of Facilities ___________________________________________________ 2 3 Cost Estimate ______________________________________________________ 3 4 Proposed Development ___________________________________________________ 5 5 Rate and Method of Apportionment _________________________________________ 6 6 Certifications ______________________________________________________ 7
Tables Page
3-1 Cost Estimate ______________________________________________________ 3 5-1 Assigned Special Tax for Developed Property _________________________________ 6
Appendices P age ____________________________________________ A Rate and Method of Apportionment ____________________________________ B Proposed Boundary Map _________________________________________ C Resolution of Consideration
Item Title: 11.2
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1 Introduction Page | 1
City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
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 Fa cilities District No. 2025-4 (Heritage Village) of the City of Menifee (“CFD No. 2025-4” or “District”), Resolution No. 25-1540, 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”).
On April 2, 2025, the City Council subsequently adopted resolutions forming CFD No. 2025-4 and authorizing the levy of a special tax and the incurrence of bonded indebtedness within the District.
Subsequent to the formation of CFD No. 2025-4, the District received a petition from the property owner requesting that the City initiate change proceedings to amen d the list of authorized facilities to be financed by the Dist rict. The requested amendment is intended to better align the CFD financing plan with current development assumptions and updated cost estimates associated with the project.
On March 4, 2026, the City Council adopted a Resolution of Consideration (Resolution No. 26-1684), declaring its intention to consider modifying the authorized facilities of the District pursuant to Article 3.5 of the Act (the “Change Proceedings”).
At the time of formation, the financing plan assumed a higher level of Eastern Municipal Water District (“EMWD”) fees. Based on updated project information, including revised metering assumptions, the total EMWD fees are now lower than originally projected, resulting in available capacity within the overall CFD financing plan.
Accordingly, the change proceedings propose to reallocate a portion of the available financing capacity to fund a share of school facilities to be owned and operated by the Romoland School District (the “School District”) through the implementation of a Joint Community Facilities Agreement (“JCFA”) among the City, the District, the School District, and the property owner.
The proposed School District facilities include interim and pe rmanent school facilities such as classrooms, multi-purpose facilities, administrative and auxiliary space, athletic fields, playgrounds, and related site improvements, including associated infrastructure, equipment, and technology, all as permitted under the Act.
The inclusion of School District faciliti es does not modify the boundaries of the District, the Rate and Method of Apportionment, or the maximum special tax rates previously approved. Rather, the change proceedings are limited to expanding the categories of aut horized facilities and reallocating available fi nancing capacity to include School District facilities necessary to serve the development.
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 Cons ideration as previously approved and adopted and is included in Appendix C.
Item Title: 11.2
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2 Description of Facilities Page | 2
City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
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 which 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, and to 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 facilitie s, landscaping and trail improv ements, and other public faciliti es of the City, including the foregoing public facilities which are includ ed 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 which are included in Eastern Municipal Water District’s water and sewer capacity and connection fee programs (the “Water District Facilities”); and (iii) interim and permanent school facilities of the Romoland School District (the “School District”), including, but not limited to, classrooms, multi-purpose facilities, administrative and auxiliary space, athletic fields, playgrounds, and related recreational facilities and improvem ents, together with landscaping, access roadways, drainage, sidewalks and gutters, utility lines, furniture, equipment, and technology, including technology infrastructure and upgrades, with a useful life of five (5) years or longer (the “School Facilities”); and (iv) dry utilities (the “Utilities” and together, with the City Facilities, the Water District Facilities, and the School Facilities, and the Utilities, 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, including the cost of engineering, planning, designing, materials testing, coor dination, 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) The cost of engineering, planning and designing the Facilities; and 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.
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.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 33
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3 Cost Estimate Page | 3
City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
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 fores een today, and the actual incidental expenses may exceed these amounts accordingly.
Table 3-1
Cost Estimate
City Fees Total Bond Allocation(1)
Law Enforcement $131,220 $131,220
Fire Facilities $91,692 $91,692
Circulation $649,944 $649,944
General Govt $166,860 $166,860
Parks and Recreation $244,458 $244,458
Quimby $492,500 $492,500
City Facilities $355,335 $355,335
Total City Fees $2,132,009 $2,132,009
City Facilities Total Bond Allocation(1)
Menifee Road Utility Undergrounding $1,733,912 $1,733,912 Menifee/Rouse Road Traffic Signal $93,985 $93,985
Menifee & Rouse Road, Street, Street Light & Median $1,413,251 $1,413,251 Dry Utilities $445,500 $445,500
Total City Facilities $3,686,648 $3,686,648
Eastern Municipal Water District Fees Total Bond Allocation(1) Sewer Financial Participation Charge $356,566 $356,566 Sewer Treatment Plant Capacity Charge $675,993 $675,993 Water Financial Participation Charge $160,007 $160,007 2" Meter Drop-In Fee $2,822 $2,822
1/5" Irrigation Meter Capacity Fee $67,320 $67,320
1/5" Irrigation Meter Installation Fee $1,322 $1,322
Water Frontage Fees $39,904 $39,904
Total Eastern Municipal Water District Fees $1,303,934 $1,303,934
Romoland School District Fees Total Bond Allocation(1)
School Developer Fee $1,147,403 $434,836
Total Romoland School District Fees $1,147,403 $434,836
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 34
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3 Cost Estimate Page | 4
City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
Table 3-1
Cost Estimate (Cont’d)
Total Eligible Fees/Improvements $7,824,494 $7,557,427
Incidental Financing Costs $1,132,573
Total Funded by Bond Proceeds $8,690,000
Total Fees/Improvements to be Funded by Developer $267,067 (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.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 35
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4 Proposed Development Page | 5
City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
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 properties. As of Fiscal Year 2025-26 the proposed CFD No. 2025-4 includes the following Assessor's Parcel Number:
Assessor’s
Parcel Number
331-250-031
A map showing the boundaries of CFD No. 2025-4 is included in Appendix B.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 36
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5 Rate and Method of Apportionment Page | 6
City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
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 co st 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 Articl e 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
Land Use Category
Taxable
Unit Building Square Footage
Assigned Special
Tax Per Taxable
Unit
1. Single Family Residential Property RU Less than 1,000 sq. f t $2,949.00
2. Single Family Residential Property RU 1,000 sq. ft to 1,250 sq. f t $3,220.00
3. Single Family Residential Property RU Greater than 1,250 sq. f t $3,284.00
4. Multifamily Property Acre N/A $83,630.00
5. Non-Residential Property Acre N/A $83,630.00
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.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 37
Menifee Mayor and City Council
April 15, 2026
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6 Certifications Page | 7
City of Menifee
CFD No. 2025-4 (Heritage Village)
Public Hearing Report
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 15, 2026 SPICER CONSULTING GROUP, LLC
__________________________
SHANE SPICER
SPECIAL TAX CONSULTANT FOR
CITY OF MENIFEE
RIVERSIDE COUNTY
STATE OF CALIFORNIA
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 38
Menifee Mayor and City Council
April 15, 2026
Page
572 of 909
Appendix A:
Rate and Method of Apportionment
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 39
Menifee Mayor and City Council
April 15, 2026
Page
573 of 909
City of Menifee
Community Facilities District No. 2025‐4 (Heritage Village) Page 1
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, Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 40
Menifee Mayor and City Council
April 15, 2026
Page
574 of 909
City of Menifee
Community Facilities District No. 2025‐4 (Heritage Village) Page 2
(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.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 41
Menifee Mayor and City Council
April 15, 2026
Page
575 of 909
City of Menifee
Community Facilities District No. 2025‐4 (Heritage Village) Page 3
“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 1st preceding the Fiscal Year in which the Special Tax is being levied, (ii) have an Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) for which a Building Permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied.
"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 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 Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 42
Menifee Mayor and City Council
April 15, 2026
Page
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City of Menifee
Community Facilities District No. 2025‐4 (Heritage Village) Page 4
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.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 43
Menifee Mayor and City Council
April 15, 2026
Page
577 of 909
City of Menifee
Community Facilities District No. 2025‐4 (Heritage Village) Page 5
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.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 44
Menifee Mayor and City Council
April 15, 2026
Page
578 of 909
City of Menifee
Community Facilities District No. 2025‐4 (Heritage Village) Page 6
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2025‐2026
Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit
1. Single Family Residential Property RU Less than 1,000 sq. ft $2,949.00
2. Single Family Residential Property RU 1,000 sq. ft to 1,250 sq. ft $3,220.00
3. Single Family Residential Property RU Greater than 1,250 sq. ft $3,284.00
4. Multifamily Property Acre N/A $83,630.00
5. Non‐Residential Property Acre N/A $83,630.00
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.
Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 45
Menifee Mayor and City Council
April 15, 2026
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City of Menifee
Community Facilities District No. 2025‐4 (Heritage Village) Page 7
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: 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 Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 46
Menifee Mayor and City Council
April 15, 2026
Page
580 of 909
City of Menifee
Community Facilities District No. 2025‐4 (Heritage Village) Page 8
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.
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, which 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 which ends in the previous Fiscal Year. In the event this index ceases to be published, the Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 47
Menifee Mayor and City Council
April 15, 2026
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City of Menifee
Community Facilities District No. 2025‐4 (Heritage Village) Page 9
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 Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1. Confirm
that no Special Tax delinquencies apply to such Assessor’s Parcel.
2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax for the Assessor’s Parcel as Item Title: 11.2
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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. Determine the Future Facilities Costs.
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor’s Parcel (the “Future
Facilities Amount”).
8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax prepayments.
9. Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid.
10. Determine the amount the CFD Administrator reasonably expects to derive from the investment of the Bond Redemption Amount and the Redemption Premium from the date of prepayment until
the redemption date for the Outstanding Bonds to be redeemed with the Prepayment Amount.
11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”).
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.
Item Title: 11.2
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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:
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 Item Title: 11.2
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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.
Item Title: 11.2
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Appendix B:
Proposed Boundary Map
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Item Title: 11.2
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Appendix C:
Resolution of Consideration
Item Title: 11.2
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Item Title: 11.2
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Item Title: 11.2
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Item Title: 11.2
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Item Title: 11.2
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Item Title: 11.2
Proposed Change Proceedings for Community Facilities District No. 2025-4, Heritage Village Item Page Number: 59
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CITY OF MENIFEE
SUBJECT: Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds
MEETING DATE: April 15, 2026
TO: Mayor and City Council
PREPARED BY: Lauri Lockwood, Financial Analyst
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------
RECOMMENDED ACTION
1. Adopt a resolution authorizing the issuance of special tax bonds and the execution and delivery of bond documents in connection with Community Facilities District 2024-1, Banner Park II, located at the southwest corner of Domenigoni Parkway and Briggs Road; and
2. Authorize the Finance Department to establish the necessary revenue and expenditure budgets and corresponding appropriations for the bond issuance.
DISCUSSION
The City Council has previously completed the necessary proceedings to establish Community Facilities District 2024-1 of the City of Menifee, Banner Park II, (the “District”). As part of those proceedings, the City Council declared the necessity to issue bonds on behalf of the District pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the “Act”).
On August 7, 2024, the City Council adopted the Resolution of Formation, which established the District, authorized the levy of a special tax (the “Special Tax”), determined the necessity to incur bonded indebtedness in an amount not to exceed $15 million, and called an election on the proposition of incurring bonded indebtedness, levying the Special Tax and setting an appropriations limit. On the same date, an election was held within the District in which the property owner approved the proposition authorizing the issuance of bonds in an amount not to exceed $15 million.
The District contains approximately 81 gross acres and is located on the southwest corner of Domenigoni Parkway and Briggs Road along the eastern border of the City. The developer of the Item Title: 12.1
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property within the District is Pulte Home Company, LLC (“Pulte”). The property is located across from Pulte’s original community known as Banner Park, which is on the north side of Domenigoni Parkway, and is an extension of the existing community. The development is planned for 182 single-family detached homes.
As of February 16, 2026, the date of value of the appraisal, Pulte had completed and conveyed 84 homes within the District to individual homeowners, and as of such date, Pulte owned six model homes, 19 production homes over 95% complete, 28 homes under construction, and 45 finished lots. Pulte Homes currently expects to complete and convey all homes planned within the District to individual homeowners by the end of 2027.
Annual debt service on the proposed Special Tax Bonds, Series 2026A (the “2026 Bonds”) will be sized based on 105 parcels classified as Developed Property beginning in Fiscal Year 2026-
27. The bond documents allow for the issuance of additional bonds payable from Special Tax revenues on parity with the 2026 Bonds. It is currently anticipated that parity bonds will be issued in Fiscal Year 2026-27.
The resolution before the City Council authorizes the issuance of the 2026 Bonds and the execution and delivery of certain documents in connection therewith as further described below.
Based on current market conditions, the 2026 Bonds are estimated to have a par amount of approximately $5.75 million with a final maturity no later than September 1, 2056, representing a 30-year financing term. Proceeds from the 2026 Bonds will primarily finance public improvements benefiting the development within the District. The final par amount and interest rate structure will be determined when the 2026 Bonds are priced and sold, which is currently expected to occur in April 2026.
As required under Section 5852.1 of the California Government Code, good faith estimates as provided by the municipal advisor and underwriter are provided as an attachment to this staff report.
The property owners are expected to pay Special Taxes of approximately $3,071 to $3,848 per parcel in Fiscal Year 2026-27, depending on the size of the home. Such Special Taxes will increase at 2.0% annually.
Documents to be Approved
Approval of the attached resolution authorizes the sale of the proposed 2026 Bonds and the execution of the following documents attached to this staff report:
• Preliminary Official Statement
• Bond Indenture
• Continuing Disclosure Certificate
• Bond Purchase Agreement
Bond Counsel and the City Attorney have reviewed the attached legal and financing documents on behalf of the District and the City. If the resolution is approved, City staff will continue to work Item Title: 12.1
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with the financing team to finalize the aforementioned documents. The pricing date is targeted for late April, with bond closing anticipated approximately two weeks later.
This item was presented to the Finance Committee at the January 13, 2026, meeting. A motion was made and approved to bring the item forward for City Council consideration and approval.
STRATEGIC PLAN OBJECTIVE
Regular City Business
FISCAL IMPACT
The 2026 Bonds are paid from Special Taxes levied in the District. There is no fiscal impact to the City’s General Fund. The City will, however, be required to provide administrative oversight for the District, which will be funded as part of the annual Special Tax levy.
The property owners are expected to pay Special Taxes of approximately $3,071 to $3,848 per parcel in Fiscal Year 2026-27, depending on the size of the home. Such Special Taxes will increase at 2% per year.
ATTACHMENTS
1. CFD 2024-1 Project Map
2. CFD 2024-1 Good Faith Estimates
3. CFD 2024-1 Resolution of Issuance
4. CFD 2024-1 Preliminary Official Statement
5. CFD 2024-1 Bond Indenture
6. CFD 2024-1 Continuing Disclosure Certificate
7. CFD 2024-1 Bond Purchase Agreement
8. CFD 2024-1 Appraisal Report
Item Title: 12.1
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Item Title: 12.1
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GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the District by Urban Futures, Inc. (the “Municipal Advisor”) in consultation with Raymond James, Incorporated, the underwriter for the Bonds.
Principal Amount. The Municipal Advisor has informed the City that, based on the City’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $5,750,000 (the “Estimated Principal Amount”).
True Interest Cost of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 5.03%.
Finance Charge of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $351,250.
Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserve fund funded with proceeds of the Bonds, is $4,965,708.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $12,035,042.
The foregoing estimates constitute good faith estimates only. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the Bonds being different than the amortization Item Title: 12.1
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assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City’s financing plan, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of Bonds sold will be determined by the City based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 6
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RESOLUTION NO. 26-___
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA,
ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2024-1, BANNER PARK II , OF THE CITY OF MENIFEE AUTHORIZING THE ISSUANCE OF ITS SPECIAL TAX BONDS, SERIES 202 6A IN A PRINCIPAL AMOUNT NOT TO EXCEED SIX MILLION DOLLARS ($6,000,000) AND APPROVING
CERTAIN DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, the City Council (the “City Council”) of the City of Menifee (the “City”), has heretofore undertaken proceedings to establish Community Facilities District No. 2024 -1, Banner Park II, of the City of Menifee (the “District”) and declared the necessity to issue bonds on behalf of the District pursuant to the terms and provisions of the Mello- Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (Act); and
WHEREAS, pursuant to Resolution Nos. 24- 1470 and 24-1471 adopted by the legislative body of the District on August 7, 2024, certain bond propositions were submitted to the qualified electors within the District, and were approved by more than two- thirds of the votes cast at the election held on August 7, 2024; and
WHEREAS, the legislative body of the District desires to issue a first series of bonds for the District at this time under the Act to finance certain public facilities that the District is authorized to finance (the “Facilities”); and
WHEREAS, the District desires to finance certain Facilities through the issuance of bonds in an aggregate principal amount not to exceed $6,000,000 designated as the “ Community Facilities District No. 2024-1, Banner Park II, of the City of Menifee Special Tax Bonds, Series 2026A” (the “Bonds”); and WHEREAS, in order to effect the issuance of the Bonds, the District desires to enter into various agreements and approve certain documents in substantially the forms presented herein; and WHEREAS, based on the appraisal of real property prepared by Kitty Siino & Associates, Inc. (the “Appraisal”) of property within the District, the value of the real property in the District subject to the special tax to pay debt service on the Bonds is more than three times the sum of the principal amount of the Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District as calculated in the manner set forth in Section 53345.8(a) of the Act; and WHEREAS, the City Council has determined in accordance with Section 53360.4 of the Act that a negotiated sale of the Bonds to Raymond James & Associates, Inc. (the “Underwriter”) in accordance with the terms of the Bond Purchase Agreement for the Bonds to be entered into by the District and the Underwriter (the “Bond Purchase Agreement”) approved as to form by this City Council herein will result in a lower overall cost to the District than a public sale; and WHEREAS, the District has determined to adopt the City’s Debt Management Policy as the debt management policy of the District.
NOW, THEREFORE, BE IT RESOLVED THAT the City Council, acting as the legislative body of Community Facilities District No. 2024 -1, Banner, Park II, of the City of Menifee, does hereby determine and order as follows:
Section 1. Each of the above recitals is true and correct.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 7
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Resolution Authorizing Issuance of Special Tax Bonds CFD No. 2024-1 (Banner Park II) 2 Section 2. The issuance of the Bonds is hereby authorized in an aggregate principal amount not to exceed $6,000,000 , with the exact principal amount to be determined by the official signing the Bond Purchase Agreement in accordance with Section 5 below. The City Council hereby determines that it is prudent in the management of the District’s fiscal affairs to issue the Bonds. The Bonds shall mature on the dates and pay interest at the rates set forth in the Bond Purchase Agreement to be executed on behalf of the District in accordance with Section 5 hereof. All other provisions of the Bonds shall be governed by the terms and conditions of the Bond Indenture (the “Indenture”), which Indenture is hereby approved in substantially the form on file with the City Clerk, with such additions thereto and changes therein (including, but not limited to, changes in the amount to be maintained in the Reserve Account (as defined in the Indenture)) as the officer or officers executing the same deem necessary to enhance the security for the Bonds, to cure any ambiguity or defect therein, to insert the offering price(s), interest rate(s), selling compensation, principal amount per maturity, redemption dates and prices and such other related terms and provisions as limited by Section 5 hereof or to conform any provisions therein to the Bond Purchase Agreement or the Official Statement delivered to the Underwriter of the Bonds. Approval of such changes shall be conclusively evidenced by the execution and delivery of the Indenture by one of the following: the Mayor, the City Manager, Assistant City Manager, Chief Financial Officer (or any acting or interim of such positions) or their written designees (each, an “Authorized Officer” and collectively, the “Authorized Officers”), each of whom is authorized to execute the Indenture. Capitalized terms used in this Resolution that are not defined herein have the meanings ascribed to them in the Indenture.
Section 3. The Bonds shall be executed on behalf of the District by the manual or facsimile signature of the Mayor of the City or his or her written designee and be attested by the manual or facsimile signature of the City Clerk. Wilmington Trust, National Association is hereby appointed to act as trustee, registrar and transfer agent for the Bonds.
Section 4. The covenants set forth in the Indenture to be executed in accordance with Section 2 above are hereby approved, shall be deemed to be covenants of the City Council and shall be complied with by the District and its officers. The Indenture shall constitute a contract between the District and the Owners of the Bonds.
Section 5. The form of the Bond Purchase Agreement presented at this meeting is hereby approved and each of the Authorized Officers is hereby authorized to execute the Bond Purchase Agreement, with such additions thereto and changes therein relating to dates and numbers as are necessary to conform the Bond Purchase Agreement to the dates, amounts and interest rates applicable to the Bonds as of the sale date. Approval of such additions and changes shall be conclusively evidenced by the execution and delivery of the Bond Purchase Agreement by one or more of such Authorized Officers; provided, however, that the Bond Purchase Agreement shall be signed only if the Underwriter’s discount does not exceed 1.5% of the principal amount of the Bonds and only if the true interest cost on the Bonds does not exceed 6.00%. Each of the Authorized Officers is authorized to determine the day on which the Bonds are to be priced in order to attempt to produce the lowest borrowing cost for the District and may reject any terms presented by the Underwriter if determined not to be in the best interest of the District.
Section 6. The form of the Continuing Disclosure Certificate presented at this meeting is hereby approved and each of the Authorized Officers is hereby authorized and directed to execute the Continuing Disclosure Certificate in the form hereby approved, with such additions therein and changes thereto as the officer or officers executing the same deem necessary to cure any defect or ambiguity therein, with such approval to be conclusively evidenced by the execution and delivery of such certificate.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 8
Menifee Mayor and City Council
April 15, 2026
Page
601 of 909
Resolution Authorizing Issuance of Special Tax Bonds CFD No. 2024-1 (Banner Park II) 3 Section 7. The form of the Preliminary Official Statement presented at this meeting is hereby approved and the Underwriter is hereby authorized to distribute the Preliminary Official Statement to prospective purchasers of the Bonds in the form hereby approved, together with such additions thereto and changes therein as are determined necessary by the Authorized Officers to make such Preliminary Official Statement final as of its date for purposes of Rule 15c2-12 of the Securities and Exchange Commission. Each of the Authorized Officers is hereby authorized to execute a final Official Statement in the form of the Preliminary Official Statement, together with such changes as are determined necessary by the Authorized Officers, to make such Official Statement complete and accurate as of its date. The Underwriter is further authorized to distribute the final Official Statement for the Bonds and any supplement thereto to the purchasers of the Bonds upon the execution of the final Official Statement as described above.
Section 8. In accordance with the requirements of Section 53345.8 of the Act, based on the Appraisal, the legislative body of the District hereby determines that the value of the real property in the District subject to the special tax to pay debt service on the Bonds is more than three times the principal amount of the Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District, all as calculated in the manner provided in Section 53345.8(a) of the Act.
Section 9. Each Authorized Officer is authorized to provide for all services necessary to effect the issuance of the Bonds. Such services shall include, but not be limited to, printing the Bonds, obtaining legal services, trustee and paying agent services, and any other services deemed appropriate as set forth in a certificate of such Authorized Officer. Each Authorized Officer is authorized to pay for the cost of such services, together with other costs of issuance, from Bond proceeds deposited pursuant to the Indenture.
Section 10. The Authorized Officers, the City Clerk and the other officers and staff of the City and the District responsible for the fiscal affairs of the District are hereby authorized and directed to take any actions and execute and deliver any and all documents as are necessary to accomplish the issuance, sale and delivery of the Bonds in accordance with the provisions of this Resolution and the fulfillment of the purposes of the Bonds as described in the Indenture, including providing certificates to the Underwriter as to the accuracy of any information relating to the District which is included within the Official Statement. Any document authorized herein to be signed by the City Clerk may be signed by a duly appointed deputy clerk.
Section 11 . The District hereby adopts the City’s Debt Management Policy, as amended, supplemented and restated from time to time, as the debt management policy of the District pursuant to California Government Code Section 8855.
Section 12. The City Council acknowledges that the good faith estimates required by Section 5852.1 of the California Government Code are disclosed in the staff report and are available to the public at the meeting at which this Resolution is approved.
Section 13. This Resolution shall be effective upon its adoption.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 9
Menifee Mayor and City Council
April 15, 2026
Page
602 of 909
Resolution Authorizing Issuance of Special Tax Bonds CFD No. 2024-1 (Banner Park II) 4 PASSED, APPROVED AND ADOPTED this the 15th day of April, 2026.
___________________________
Bob Karwin, Mayor Pro Tem
Attest:
___________________________
Stephanie Roseen, City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 10
Menifee Mayor and City Council
April 15, 2026
Page
603 of 909
Stradling Yocca Carlson & Rauth
Draft of 3/30/26
4925-7189-8002v8/200299-0032
PRELIMINARY OFFICIAL STATEMENT DATED __________, 202 6
NEW ISSUE—BOOK-ENTRY ONLY NO RATING
In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California (“Bond Counsel”), under existing statutes, r egulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item o f tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax. See “TAX MATTERS” with respect to tax consequences relating to the B onds, including with respect to the alternative minimum tax imposed on certain large corporations. $5,750,000 *
COMMUNITY FACILITIES DISTRICT NO. 2024-1
(BANNER PARK II) OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2026A
Dated: Delivery Date Due: September 1, as shown on inside cover page The Community Facilities District No. 2024-1 (Banner Park II) of the City of Menifee Special Tax Bonds, Series 2026A (the “Bonds”) are being issued by Community Facilities District No. 2024-1 (Banner Park II) of the City of Menifee (the “District”) to: (i) finance certain public improvements needed with respect to the development of property located within the District, including public improvements to be owned by the City of Menifee (the “City”); (ii) fund a reserve account for the Bonds and (iii) pay costs of issuance for the Bonds. The Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Act”), and pursuant to that certain Bond Indenture, dated as of May 1, 2026 (the “Indenture”), by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”).
The Bonds are payable from Net Taxes (as defined herein) derived from a certain annual Special Tax (as defined herein) to be levied on taxable parcels within the District and from certain other funds pledged under the Indenture, all as further described herein. The Special Tax is to be levied according to the rate and method of apportionment approved by the City Council of the City and the qualified electors within the District. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes” and Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” The Bonds will be issued in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Individual purchases of the Bonds may be made in principal amounts of $5,000 and integral multiples thereof and will be in book -entry form only. Purchasers of the Bonds will not receive certificates representing their beneficial ownership of the Bonds but will receive credit balances on the books of their respective nominees . The Bonds will not be transferable or exchangeable except for transfer to another nominee of DTC or as otherwise described herein. Interest on the Bonds will be payable on each March 1 and September 1, commencing September 1, 2026. Principal of and in terest on the Bonds will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants, who will remit such payments to the Beneficial Owners of the Bonds.
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY OF RIVERSIDE, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE NET TAXES, NO OTHER REVENUES OR TAXES ARE PLEDGED T O THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL
OBLIGATIONS OF THE CITY OR GENERAL OBLIGATIONS OF THE DISTRICT BUT ARE LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM NET TAXES AND OTHER AMOUNTS HELD UNDER THE INDENTURE AS MORE FULLY DESCRIBED HEREIN.
The Bonds are subject to optional redemption, special mandatory redemption and mandatory sinking fund redemption prior to mat urity as set forth herein. See the caption “THE BONDS — Redemption.”
Investment in the Bonds involves risks that are not appropriate for certain investors. Certain events could affect the abili ty of the District to pay the principal of and interest on the Bonds when due. See the caption “SPECIAL RISK FACTORS” for a discussion of certain risk factors that should be considered, in addition to the other matters set forth herein, in evaluating the investment quality of the Bonds.
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR GENERAL REFERENCE ONLY. IT IS NOT INTENDED TO BE A SUMMARY OF THE SECURITY OR TERMS OF THIS ISSUE. INVESTORS ARE ADVISED TO READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.
MATURITY SCHEDULE
(See Inside Cover Page)
The Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Str adling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the City and the District by Rutan & Tucker, LLP, Irvine, California, City Attorney, and for the District by Stradling Yocca Carlson & Rauth LLP, Disclosure Counsel, for the Underwriter by Kutak Rock LLP, Irvine, California, and for the Trustee by its counsel. It is anticipated that the Bonds in book -entry form will be available for delivery on or about ______, 2026.
[RAYMOND JAMES LOGO]
Dated: ________, 2026
* Preliminary, subject to change
his Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to e time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there e any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 11
Menifee Mayor and City Council
April 15, 2026
Page
604 of 909
4925-7189-8002v8/200299-0032
$5,750,000 *
COMMUNITY FACILITIES DISTRICT NO. 2024-1
(BANNER PARK II) OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2026A
MATURITY SCHEDULE
BASE CUSIP†:________
Maturity Date
(September 1)
Principal
Amount Interest Rate Yield Price CUSIP No.†
$________ _.00% Term Bonds due September 1, 20__ Yield: _.__% Price: ___.____CC CUSIP No.† ___ $________ _.00% Term Bonds due September 1, 20__ Yield: _.__% Price: ___.____CC CUSIP No.† ___ $________ _.00% Term Bonds due September 1, 20__ Yield: _.__% Price: ___.____CC CUSIP No.† ___ $________ _.00% Term Bonds due September 1, 20__ Yield: _.__% Price: ___.____CC CUSIP No.† ___
* Preliminary, subject to change
C [Priced to optional call at 103% on September 1, 20__.
CC Priced to optional call at par on September 1, 20__] † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright(c) 2026 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a subst itute for the CGS database. CUSIP® numbers are provided for conveni ence of reference only. None of the City, the District nor the Underwriter is responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable Bonds or as included herein. The CUSIP numb er for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 12
Menifee Mayor and City Council
April 15, 2026
Page
605 of 909
4925-7189-8002v8/200299-0032
CITY OF MENIFEE
COUNTY OF RIVERSIDE, CALIFORNIA
CITY COUNCIL
Ricky Estrada, Mayor
Bob Karwin, Mayor Pro Tem, District 1
Ben Diederich, District 2
Dan Temple, District 3
Dean Deines, District 4
CITY ADMINISTRATORS
Armando G. Villa, City Manager
Bryan Jones, Assistant City Manager
Rebekah Kramer, Assistant City Manager
CITY ATTORNEY
Rutan & Tucker, LLP
Irvine, California
BOND AND DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth LLP
Newport Beach, California
MUNICIPAL ADVISOR
Urban Futures, Inc.
Walnut Creek, California
SPECIAL TAX CONSULTANT
Spicer Consulting Group, LLC
Murrieta, California
APPRAISER
Kitty Siino & Associates, Inc.
Tustin, California
TRUSTEE
Wilmington Trust, National Association
Costa Mesa, California
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 13
Menifee Mayor and City Council
April 15, 2026
Page
606 of 909
4925-7189-8002v8/200299-0032
Except where otherwise indicated, all information contained in this Official Statement has been provided by the City and the District. No dealer, broker, salesperson or other person has been authorized by the City, the District, the Trustee or the Underwriter to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authoriz ed by the City, the District, the Trustee or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by a person in a ny jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.
This Official Statement is not to be construed as a contract with the purchasers or Owners of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. This Official Statement, including any supplement or amendment to this Official Statement, is intended to be deposited with the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board, which can be found at www.emma.msrb.org.
The Underwriter has provided the following sentence for inclusion in this Official Statement:
The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in t he affairs of the City, the District or any other parties described herein since the date hereof. All summaries of the Indenture or other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the City for further information in connection therewith.
IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY
OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF
SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
Certain statements included or incorporated by reference in this Official Statement constitute “forward -looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as a “plan,” “expect,” “estimate,” “project,” “budget,” or similar words. Such forward-looking statements include, but are not limited to certain statements contained in the information under the captions “THE DISTRICT” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH
FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS
DESCRIBED TO BE MATERIALLY DI FFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD -LOOKING STATEMENTS. THE
DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD- LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT. IN EVALUATING SUCH STATEMENTS,
POTENTIAL INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS WHICH COULD
CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.
The City maintains a website. However, the information presented on such website is not part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 14
Menifee Mayor and City Council
April 15, 2026
Page
607 of 909
i
4925-7189-8002v8/200299-0032
TABLE OF CONTENTS
Page
INTRODUCTION ................................................................................................................................................ 1 The District ....................................................................................................................................................... 1 Sources of Payment for the Bonds .................................................................................................................... 2 Appraisal Report ............................................................................................................................................... 3 Description of the Bonds .................................................................................................................................. 3 Tax Exemption.................................................................................................................................................. 4 Professionals Involved in the Offering ............................................................................................................. 4 Continuing Disclosure ...................................................................................................................................... 4 Parity Bonds ..................................................................................................................................................... 5 Bond Owners’ Risks ......................................................................................................................................... 5 Other Information ............................................................................................................................................. 5 FINANCING PLAN ............................................................................................................................................. 6 Estimated Sources and Uses of Funds .............................................................................................................. 6 THE BONDS ........................................................................................................................................................ 6 General Provisions ............................................................................................................................................ 6 Debt Service Schedule ...................................................................................................................................... 8 Redemption ....................................................................................................................................................... 8 Registration, Transfer and Exchange .............................................................................................................. 13 SOURCES OF PAYMENT FOR THE BONDS ................................................................................................ 13 Limited Obligations ........................................................................................................................................ 13 Special Taxes .................................................................................................................................................. 14 Reserve Account of the Special Tax Fund ...................................................................................................... 20 No Teeter Plan ................................................................................................................................................ 20 Parity Bonds ................................................................................................................................................... 20 THE DISTRICT .................................................................................................................................................. 22 General Description of the District ................................................................................................................. 22 Authorized Uses of Bond Proceeds ................................................................................................................ 23 Appraisal Report ............................................................................................................................................. 23 Estimated Appraised Value-to-Lien Ratios .................................................................................................... 23 Direct and Overlapping Debt .......................................................................................................................... 27 Delinquency History ....................................................................................................................................... 31 PROPERTY OWNERSHIP AND THE DEVELOPMENT ............................................................................... 31 General ............................................................................................................................................................ 31 Planned Development Within the District ...................................................................................................... 32 Pulte ................................................................................................................................................................ 34 SPECIAL RISK FACTORS ............................................................................................................................... 35 Risks of Real Estate Secured Investments Generally ..................................................................................... 35 Insufficiency of Special Tax Revenues........................................................................................................... 36 Impact of Economic Conditions on the Development in the District ............................................................. 37 Increasing Mortgage Interest Rates ................................................................................................................ 37 Concentration of Ownership ........................................................................................................................... 38 Property Values .............................................................................................................................................. 38 Natural Disasters ............................................................................................................................................. 38 Hazardous Substances .................................................................................................................................... 39 Enforcement Delays – Bankruptcy ................................................................................................................. 39 Special Tax Delinquencies.............................................................................................................................. 40 FDIC/Federal Government Interests in Parcels .............................................................................................. 40 Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 15
Menifee Mayor and City Council
April 15, 2026
Page
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ii
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Direct and Overlapping Indebtedness ............................................................................................................. 41 Payment of Special Taxes is not a Personal Obligation of the Property Owners ........................................... 42 No Acceleration Provision .............................................................................................................................. 42 Limited Obligations ........................................................................................................................................ 42 Ballot Initiatives.............................................................................................................................................. 42 Proposition 218 ............................................................................................................................................... 43 Litigation with Respect to Community Facilities Districts ............................................................................. 43 Loss of Tax Exemption ................................................................................................................................... 44 No Ratings – Limited Secondary Market ....................................................................................................... 45 Limitations on Remedies ................................................................................................................................ 45 Potential Early Redemption of Bonds from Prepayments or Community Facilities District Bond Proceeds ................................................................................................................................................... 45 Cybersecurity .................................................................................................................................................. 45 CONTINUING DISCLOSURE .......................................................................................................................... 46 District Continuing Disclosure ....................................................................................................................... 46 Developer Continuing Disclosure ................................................................................................................... 46 TAX MATTERS................................................................................................................................................. 46 LEGAL OPINION .............................................................................................................................................. 48 ABSENCE OF LITIGATION ............................................................................................................................ 48 NO RATING ...................................................................................................................................................... 48 UNDERWRITING ............................................................................................................................................. 49 FINANCIAL INTERESTS ................................................................................................................................. 49 MUNICIPAL ADVISOR ................................................................................................................................... 49 MISCELLANEOUS ........................................................................................................................................... 49
APPENDIX A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX ......................... A-1 APPENDIX B CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION ............................ B-1 APPENDIX C FORM OF OPINION OF BOND COUNSEL ................................................................ C-1 APPENDIX D APPRAISAL REPORT .................................................................................................. D-1 APPENDIX E SUMMARY OF THE INDENTURE ............................................................................. E-1 APPENDIX F FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE .......................F-1 APPENDIX G FORM OF DEVELOPER CONTINUING DISCLOSURE CERTIFICATE ................. G-1 APPENDIX H BOOK-ENTRY ONLY SYSTEM .................................................................................. H-1 Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 16
Menifee Mayor and City Council
April 15, 2026
Page
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4925-7189-8002v8/200299-0032
[INSERT VICINITY MAP]
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 17
Menifee Mayor and City Council
April 15, 2026
Page
610 of 909
4925-7189-8002v8/200299-0032
[INSERT AERIAL PHOTOGRAPH]
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 18
Menifee Mayor and City Council
April 15, 2026
Page
611 of 909
1 4925-7189-8002v8/200299-0032
$5,750,000 *
COMMUNITY FACILITIES DISTRICT NO. 2024-1
(BANNER PARK II) OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2026A
INTRODUCTION
The purpose of this Official Statement, which includes the cover page, the table of contents and the attached appendices (collectively, the “Official Statement”), is to provide certain information concerning the issuance by Community Facilities District No. 2024-1 (Banner Park II) of the City of Menifee (the “District”) of its Special Tax Bonds, Series 2026A in the aggregate principal amount of $5,750,000 (the “Bonds”). The proceeds of the Bonds will be used to: (i) finance certain public improvements needed with respect to the development of property located within the District, including public improvements to be owned by the City of Menifee (the “City”); (ii) fund a reserve account for the Bonds and (iii) pay costs of issuance for the Bonds.
The Bonds are authorized to be issued pursuant to the Mello- Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Act”), a resolution adopted on April 15, 2026, by the City Council of the City, acting as the legislative body of the District, and a Bond Indenture, dated as of May 1, 2026 (the “Indenture”), by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”). The Bonds are secured under the Indenture by a pledge of and lien upon Net Taxes (as such term is defined herein) and all moneys in the Special Tax Fund (other than the Administrative Expense Account therein) as described in the Indenture.
This Introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described herein. A full review should be made of the entire Official Statement.
The sale and delivery of Bonds to potential investors is made only by means of the entire Official Statement.
All capitalized terms used in this Official Statement and not defined have the meanings set forth in Appendix E.
The District
General. The District contains approximately 81 gross acres, and is located on the southwest corner of Domenigoni Parkway and Briggs Road along the eastern border of the City. The property within the District is being developed by Pulte Home Company, LLC, a Michigan limited liability company (“Pulte”) in a community known as Banner Park II. The property is an extension of, and is located across from, Pulte’s original community known as Banner Park, also on Domenigoni Parkway. Pulte is currently building and selling homes within Banner Park II in three product lines: Heritage, Merit and Crest. At completion, Heritage is expected to consist of 66 homes, Merit is expected to consist of 55 homes; and Crest is expected to consist of 61 homes, for a total of 182 homes.
As of February 16, 2026, Pulte had completed and conveyed 84 homes within the District to individual homeowners. As of such date, Pulte owned six model homes (none of which were in escrow), 19 production homes over 95 percent complete (14 in escrow), 28 houses under construction (15 in escrow) and 45 additional finished lots (five in escrow) . Pulte currently expects to complete and convey all homes planned within the District to individual homeowners by the end of 2027.
The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District has been completed, including a 3.3 acre City park, which opened to the public in February 2026. Pulte expects to complete the remaining in -tract infrastructure within the District, which consists of landscaping, walls, certain interior sidewalks, and wet and dry utilities as construction of the related homes occurs, although delays could occur.
* Preliminary, subject to change
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 19
Menifee Mayor and City Council
April 15, 2026
Page
612 of 909
2 4925-7189-8002v8/200299-0032
See the captions “THE DISTRICT” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT” for further information with respect to the District, Pulte and development within the District.
Formation Proceedings. The District was formed on August 7, 2024 pursuant to the Act. The Act was enacted to provide an alternative method of financing certain public capital facilities and services, especially in developing areas of the State. Any local agency (as defined in the Act) may establish a community facilities district to provide for and finance the cost of eligible public facilities and services. Generally, the legislative body of the local agency which forms a community facilities district acts on behalf of such district as its legislative body. Subject to approval by two-thirds of the votes cast at an election and compliance with the other provisions of the Act, a legislative body of a local agency may issue bonds for a community facilitie s district and may levy and collect a special tax within such district to repay such indebtedness.
Pursuant to the Act, on June 19, 2024 the City Council adopted Resolution No. 24-1447 (the “Resolution of Intention”), stating its intention to form the District and to authorize the levy of a special tax on the taxable property within the District, and Resolution No. 24-1448, stating its intention to incur bonded indebtedness in an aggregate principal amount not to exceed $15,000,000 for the purpose of financing the purchase, construction, expansion or rehabilitation of certain public facilities to serve the area within the District.
Subsequent to a noticed public hearing on August 7, 2024, the City Council adopted Resolution Nos. 24- 1470 and 24-1471 (collectively the “Resolution of Formation”). The Resolution of Formation: (i) established the District; (ii) authorized the levy of a special tax (the “Special Tax”) within the District; (iii) determined the necessity to incur bonded indebtedness in an amount not to exceed $15,000,000 within the District; and (iv) called an election within the District on the proposition of incurring bonded indebtedness, levying the Special Tax and setting an appropriations limit.
On August 7, 2024, an election was held within the District in which the property owner within the District approved the proposition authorizing the issuance of bonds in an amount not to exceed $15,000,000. A Notice of Special Tax Lien for the District was recorded in the office of the County Recorder on August 22, 2024, as Document No. 2024-0252355. On August 21, 2024, the City Council adopted Ordinance No. 2024-399 (the “Ordinance”) which authorizes the levy of a special tax pursuant to the Rate and Method of Apportionment approved at the August 7, 2024 election (the “ Rate and Method ”), a copy of which is attached hereto as Appendix A.
Sources of Payment for the Bonds
Special Taxes. As used in this Official Statement, the term “Special Tax” means the annual Special Tax which has been authorized pursuant to the Act and the Rate and Method to be levied upon taxable property within the District. See the caption “SOURCES OF PAYMENT FO R THE BONDS — Special Taxes” and Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” See the caption “THE DISTRICT.”
Under the Indenture, the District has pledged to repay the Bonds and any Parity Bonds (as defined herein) from the Special Tax revenues remaining after the payment of certain annual Administrative Expenses of the District (the “Net Taxes”) and from other amounts in the Special Tax Fund (other than the Administrative Expense Account therein) established under the Indenture. The Special Taxes are the primary source of security for the repayment of the Bonds and any Parity Bonds. In the event that the Special Taxes are not paid when due, the only sources of funds available to pay the debt service on the Bonds and any Parity Bonds are amounts held by the Trustee in the Special Tax Fund, including amounts held in the Reserve Account therein, to the limited extent described in the Indenture. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Reserve Account of the Special Tax Fund.”
Annual Debt Service for the Bonds has been structured so that Special Taxes levied on the 151 parcels (out of 182 total parcels planned for residential development within the District) with building permits issued as Item Title: 12.1
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of February 16, 2026 which will be classified as Developed Property in Fiscal Year 2026-27, at the Assigned Special Tax rates, assuming no delinquencies, will generate in each beginning with Fiscal Year 2026-27 not less than 110% of debt service payable with respect to the Bonds in the calendar year that begins in that Fiscal Year, plus the Administrative Expenses Cap.
Foreclosure Proceeds. The District will covenant in the Indenture for the benefit of the owners of the Bonds and Parity Bonds that it will: (i) commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in excess of $5,000 by the October 1 following the close of each Fiscal Year in which such Special Taxes were due; and (ii) commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the October 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied; and (iii) diligently pursue such foreclosure proceedings until the delinquent Special Taxes are paid; provided that, notwithstanding the foregoing, the District may elect to defer foreclosure proceedings on any parcel so long as the amount in the Reserve Account is at least equal to the Reserve Requirement. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.” There is no assurance that the property within the District can be sold for the appraised or assessed values described herein, or for a price sufficient to pay the principal of and interest on the Bonds in the event of a default in payment of Special Taxes by the current or future landowners within the District. See the caption “SPECIAL RISK FACTORS —Property Values.”
EXCEPT FOR THE NET TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL OBLIGATIONS OF THE CITY
OR GENERAL OBLIGATIONS OF THE DISTRICT, BUT ARE LIMITED OBLIGATIONS OF THE
DISTRICT PAYABLE SOLELY FROM NET TAXES AND AMOUNTS HELD UNDER THE INDENTURE, AS MORE FULLY DESCRIBED HEREIN.
Appraisal Report
Kitty Siino & Associates, Inc. (the “Appraiser”) has conducted an appraisal (the “Appraisal Report”) with a date of value of February 16, 2026 (the “Date of Value”) of certain land and existing improvements within the District to provide an estimate of the market value of the fee simple interest of such land and improvements.
The Appraisal Report provides an estimate of the approximate market value of the property in the District subject to the levy of Special Taxes, assuming that development of the property as currently planned will consist of 182 residential units. Based on the contingencies, assumptions and limiting conditions in the Appraisal Report, the Appraiser concluded that the minimum market value of all of the parcels within the District subject to the Special Tax was $81,804,327 as of the Date of Value.
The Appraisal Report is based upon a variety of assumptions and limiting conditions that are described in Appendix D. The District makes no representation as to the accuracy of the Appraisal. See “THE DISTRICT — Appraisal Report” and “— Estimated Appraised Value-to-Lien Ratios.” There is no assurance that property within the District can be sold for the prices set forth in the Appraisal Report or that any parcel can be sold for a price sufficient to pay the Special Tax for that parcel in the event of a default in payment of Special Taxes by a property owner. See “THE DISTRICT,” “SPECIAL RISK FACTORS — Property Values” herein and Appendix D.
Description of the Bonds
The Bonds will be issued and delivered as fully registered Bonds, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to actual purchasers of the Bonds (the “Beneficial Owners” ) in the denominations of $5,000 or any integral multiple thereof, under the book- entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery of the Bonds. In the event that the book-entry only system described herein is no longer used with respect to the Item Title: 12.1
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Bonds, the Bonds will be registered and transferred in accordance with the Indenture. See Appendix H — “BOOK-ENTRY ONLY SYSTEM.”
Principal of, premium, if any, and interest on the Bonds is payable by the Trustee to DTC. Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of D TC Participants. See Appendix H — “BOOK-ENTRY ONLY SYSTEM.”
The Bonds are subject to optional redemption, special mandatory redemption and mandatory sinking fund redemption prior to maturity as described herein. See the caption “THE BONDS — Redemption.” For a more complete description of the Bonds and the basic documentation pursuant to which they are being sold and delivered, see the caption “THE BONDS” and Appendix E — “SUMMARY OF THE INDENTURE.” Tax Exemption
In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California (“Bond Counsel”), under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax. See the caption “TAX MATTERS” with respect to tax consequences relating to the Bonds, including with respect to the alternative minimum tax imposed on certain large corporations.
Set forth in Appendix C is the form of opinion of Bond Counsel expected to be delivered in connection with the issuance of the Bonds. For a more complete discussion of such opinion and certain tax consequences incident to the ownership of the Bonds, see the caption “TAX MATTERS.” Professionals Involved in the Offering
Wilmington Trust, National Association, Costa Mesa, California, will act as Trustee under the Indenture. Raymond James & Associates, Inc. (the “Underwriter”) is the Underwriter of the Bonds. Certain proceedings in connection with the issuance and delivery of the Bonds are subject to the approval of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel and Disclosure Counsel to the District in connection with the issuance of the Bonds. Certain legal matters will be passed on for the City and the District by Rutan & Tucker, LLP, Irvine, California, City Attorney, for the Underwriter by Kutak Rock LLP, Irvine, California, and for the Trustee by its counsel. Other professional services have been performed by Spicer Consulting Group, LLC, Murrieta, California, as Special Tax Consultant (the “Special Tax Consultant”), Urban Futures, Inc., Walnut Creek, California, as Municipal Advisor, and by Kitty Siino & Associates, Tustin, California, as Appraiser.
For information concerning circumstances in which certain of the above -mentioned professionals, advisors, counsel and consultants may have a financial or other interest in the offering of the Bonds, see the caption “FINANCIAL INTERESTS.”
Continuing Disclosure
Pursuant to a Continuing Disclosure Certificate to be executed by the District (the “District Continuing Disclosure Certificate”), the District will agree to provide, or cause to be provided, to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system (“EMMA”), maintained on the Internet at http://emma.msrb.org, certain annual financial information and operating data and notices of certain enumerated events. These covenants are being made in order to assist the Underwriter in complying with subsection (b)(5) of Rule 15c2-12 adopted by the Securities and Exchange Commission (“Rule 15c2-12”).
Item Title: 12.1
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The Underwriter does not consider Pulte to be an “obligated person” with respect to the Bonds for purposes of Rule 15c2-12. Notwithstanding the foregoing, to assist in the marketing of the Bonds, Pulte will agree to provide, or cause to be provided to EMMA, certain updates with respect to the development within the District and notices of certain enumerated events for a limited period of time. See Appendix G for a description of the specific nature of the semiannual reports and enumerated event notices to be filed by Pulte.
See “CONTINUING DISCLOSURE,” Appendix F — “FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE” and Appendix G — “FORM OF DEVELOPER CONTINUING DISCLOSURE CERTIFICATE.”
Parity Bonds
Under the Indenture, the District may issue additional indebtedness secured by the Net Taxes on a parity with the Bonds (“Parity Bonds”) to finance additional Project Costs and for refunding all or a portion of the Bonds or Parity Bonds. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Parity Bonds.” Annual Debt Service for the Bonds has been structured so that Special Taxes levied on the 151 parcels (out of 182 total parcels planned for residential development within the District) with building permits issued as of February 16, 2026 which will be clas sified as Developed Property in Fiscal Year 2026 -27, at the Assigned Special Tax rates, assuming no delinquencies, will generate in each beginning with Fiscal Year 2026-27 not less than 110% of debt service payable with respect to the Bonds in the calendar year that begins in that Fiscal Year, plus the Administrative Expenses Cap. The District currently expects that Pulte will request the issuance of Parity Bonds to finance additional Project Costs in Fiscal Year 2026- 27. If issued, the District expects s uch Parity Bonds to be sized so that Special Tax revenues, assuming a levy on all 182 parcels planned for residential development within the District at buildout, will generate in each Fiscal Year not less than 110% of debt service payable with respect to the Bonds and such Parity Bonds in the calendar year that begins in that Fiscal Year, plus the Administrative Expenses Cap.
Other taxes and/or special assessments with liens equal in priority to the continuing lien of the Special Taxes may also be levied in the future on the property within the District, which could adversely affect the willingness of the landowners to pay the Special Taxes when due. See the captions “THE DISTRICT — Direct and Overlapping Debt” and “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.” Bond Owners’ Risks
Certain events could affect the ability of the District to pay the principal of and interest on the Bonds when due. See the caption “SPECIAL RISK FACTORS” for a discussion of certain factors which should be considered, in addition to other matters set forth herein, in evaluating an investment in the Bonds. The purchase of the Bonds involves risks, and the Bonds may not be appropriate investments for some types of investors.
Other Information
This Official Statement speaks only as of its date, and the information contained herein is subject to change.
Brief descriptions of the Bonds and the Indenture are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Indenture, the Bonds and the Constitution and laws of the State, as well as the proceedings of the City Council, acting as the legislative body of the District, are qualified in their entirety by references to such documents, laws and proceedings, and with respect to the Bonds, by reference to the Indenture. Capitalized terms not otherwise defined in this Official Statement have the meanings set forth in Appendix E.
Item Title: 12.1
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Copies of the Indenture and other documents and information are available for inspection and copies may be obtained from the City, 29844 Haun Road, Menifee, California, 92586, Attention: Chief Financial Officer.
FINANCING PLAN
Estimated Sources and Uses of Funds
The following table sets forth the expected sources and uses of Bond proceeds.
Sources of Funds
Principal Amount of Bonds
Plus Original Issue Premium
Total Sources
Uses of Funds:
Acquisition and Construction Fund
Costs of Issuance(1)
Reserve Account of the Special Tax Fund
Total Uses
(1) To pay costs of issuance of the Bonds, including legal fees, underwriter’s discount, printing costs, Appraiser, Special Tax Consultant and Trustee fees.
THE BONDS
General Provisions
The Bonds will be dated their date of delivery and will bear interest at the rates per annum set forth on the inside cover page hereof, payable semiannually on each March 1 and September 1, commencing September 1, 2026 (each, an “Interest Payment Date”), a nd will mature in the amounts and on the dates set forth on the inside cover page of this Official Statement. Interest will be calculated on the basis of a 360-day year comprised of twelve 30-day months. The Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof.
Interest on any Bond will be payable from the Interest Payment Date next preceding the date of authentication of such Bond, unless: (i) such date of authentication is an Interest Payment Date, in which event interest will be payable from such date of authentication; (ii) the date of authentication is after the fifteenth day of the month preceding an Interest Payment Date, regardless of whether such day is a Business Day (each, a “Record Date”) but prior to the immediately succeeding Interest Payment Date, in which event interest will be payable from the Interest Payment Date immediately succeeding the date of authentication; or (iii) the date of authentication is prior to the close of business on the first Record Date occurring after the issuance of such Bond, in which event interest will be payable from the dated date of such Bond, as applicable; provided, however, that if at the time of authentication of such Bond, interest is in default, interest on such Bond will be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment on such Bond, interest on such Bond will be payable from its dated date.
Interest on any Bond will be paid to the person whose name appears as its owner in the registration books held by the Trustee on the close of business on the Record Date. Principal of, premium, if any, due upon redemption is payable upon presentation and surrender of the Bonds at the principal corporate trust office of the Trustee in Costa Mesa, California.
Item Title: 12.1
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The Bonds will be issued as fully registered bonds and will be registered in the name of Cede & Co., as nominee of DTC. DTC will act as securities depository of the Bonds. Ownership interests in the Bonds may be purchased in book-entry form only in denom inations of $5,000 and any integral multiple thereof. So long as DTC is the securities depository all payments of principal and interest on the Bonds will be made to DTC and will be paid to the Beneficial Owners in accordance with DTC’s procedures and the procedures of DTC’s Participants. See APPENDIX H — “BOOK-ENTRY-ONLY SYSTEM.” In the event the Bonds are not held in book- entry form, interest will be paid by check of the Trustee mailed by first class mail, postage prepaid, to the Bondowner at its address on the registration books kept by the Trustee. Pursuant to a written request prior to the Record Date of a Bondowner of at least $1,000,000 in aggregate principal amount of Bonds or of any issue of Parity Bonds, payment will be made by wire transfer in immediately available funds to a designated account in the United States. [Remainder of Page Intentionally Left Blank]
Item Title: 12.1
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Debt Service Schedule
The following table presents the annual debt service on the Bonds (including sinking fund redemptions), assuming that there are no optional or special mandatory redemptions. See the caption “—Redemption” below.
Year Ending
September 1 Principal Interest Total Debt Service
$ $ $
Total
Redemption
Optional Redemption. The Bonds may be redeemed at the option of the District from any source of funds on any Interest Payment Date on or after September 1, 20__, in whole or in part, from such maturities as are selected by the District and by lot within a maturity, at the fo llowing redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the date of redemption:
Item Title: 12.1
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Redemption Date Redemption Price
September 1, 20__ and March 1, 20__ 103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20_ 101
September 1, 20__ and any Interest Payment Date thereafter 100
In the event that the District elects to redeem Bonds as provided above, the District shall give written notice to the Trustee of its election to so redeem, the redemption date and the principal amount of the Bonds of each maturity to be redeemed. The notice to the Trustee shall be given at least 45 but no more than 60 calendar days prior to the redemption date, or by such later date as is acceptable to the Trustee.
Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, 20_ (the “20__ Term Bonds”) will be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption will be selected by the Trustee by lot and will be rede emed at a redemption price for each redeemed 20__ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:
Term Bonds Maturing September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
* Maturity.
The Bonds maturing on September 1, 20_ (the “20__ Term Bonds”) will be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption will be selected by the Trustee by lot and will be redeemed at a redemption price for each redeemed 20__ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:
Term Bonds Maturing September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
* Maturity.
Item Title: 12.1
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The Bonds maturing on September 1, 20_ (the “20__ Term Bonds”) will be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption will be selected by the Trustee by lot and will be redeemed at a redemption price for each redeemed 20__ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:
Term Bonds Maturing September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
* Maturity.
The Bonds maturing on September 1, 20_ (the “20__ Term Bonds”) will be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption will be selected by the Trustee by lot and will be redeemed at a redemption price for each redeemed 20__ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:
Term Bonds Maturing September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
* Maturity.
If the District purchases Term Bonds during the Fiscal Year immediately preceding one of the sinking fund redemption dates specified above, the District will notify the Trustee at least 45 days prior to the redemption date as to the principal amount purchased, and the amount purchased will be credited at the time of purchase to the next Sinking Fund Payment for the Term Bond so purchased, to the extent of the full principal amount of the purchase. All Term Bonds purchased will be cancelled pursuant to the Indenture.
In the event of a partial optional redemption or special mandatory redemption of the Term Bonds, each of the remaining Sinking Fund Payments for such Term Bonds will be reduced, as nearly as practicable, on a pro rata basis.
Special Mandatory Redemption from Special Tax Prepayments . The Bonds are subject to special mandatory redemption as a whole or in part on a pro rata basis among maturities and by lot within a maturity, on any Interest Payment Date on or after September 1, 20__, and will be redeemed by the Trustee, from any Item Title: 12.1
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amounts paid by the District to the Trustee and designated by the District as a prepayment of Special Taxes for one or more parcels in the District made in accordance with the Rate and Method (the “Prepayments”) deposited to the Redemption Account pursuant to the Indenture, plus amounts transferred from the Reserve Account pursuant to the Indenture, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:
Redemption Date Redemption Price
Any Interest Payment Date from September 1, 20__ through March 1, 20__ September 1, 20__ and March 1, 20__
September 1, 20__ and March 1, 20__
September 1, 20__ and any Interest Payment Date thereafter
Prepayments and amounts released from the Reserve Account in connection with Prepayments will be allocated to the payment at maturity and redemption of Bonds and any Parity Bonds as nearly as practicable on a proportionate basis based on the outstanding pr incipal amount of the Bonds and any Parity Bonds and such amounts shall be applied to redeem Bonds and Parity Bonds as nearly as practicable on a pro rata basis among maturities in increments of $5,000; provided, however, that, for Prepayments of less than $50,000, the District may specify in a Certificate of an Authorized Representative that Prepayments be applied to one or more maturities of the Bonds or Parity Bonds so long as there is delivered to the Trustee a Certificate of the Independent Financial Consultant that, following such application of the Prepayments, the maximum Special Taxes that may be levied in each Fiscal Year on Taxable Property is not less than 110% of Annual Debt Service in the Bond Year that begins in such Fiscal Year.
See the caption “SPECIAL RISK FACTORS — Potential Early Redemption of Bonds from Prepayments or Community Facilities District Bond Proceeds” for a discussion of the potential for a lower than expected yield on the Bonds as a result of a special mandatory redemption from prepayment of Special Taxes or proceeds of bonds of other community facilities districts.
Notice of Redemption. So long as the Bonds are held in book-entry form, notice of redemption will be sent by the Trustee to DTC and not to the Beneficial Owners of the Bonds under the DTC book- entry only system. Neither the District nor the Trustee is responsible for notifying the Beneficial Owners, who are to be notified in accordance with the procedures in effect for the DTC book- entry system. See Appendix H — “BOOK-ENTRY ONLY SYSTEM.”
The Trustee will give notice, in the name of the District, of the redemption of Bonds. Such notice of redemption will: (i) specify the CUSIP numbers (if any), the bond numbers and the maturity date or dates of the Bonds selected for redemption, except that where all of the Bonds are subject to redemption, or all of the Bonds of one maturity are to be redeemed, the bond numbers of such issue need not be specified; (ii) state the date fixed for redemption and surrender of the Bonds to be redeemed; (iii) state the redemption price; (iv) state the place or places where the Bonds are to be redeemed; (v) in the case of Bonds to be redeemed only in part, state the portion of such Bond which is to be redeemed; (vi) state the date of issue of the Bonds as originall y issued; (vii) state the rate of interest borne by each Bond being redeemed; and (viii) state any other descriptive information needed to identify accurately the Bonds being redeemed as specified by the Trustee. Such notice will further state that on the date fixed for redemption, there will become due and payable on each Bond, or portion thereof called for redemption, the principal thereof, together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon will cease to accrue and be payable. At least 30 days but no more than 45 days prior to the redemption date, the Trustee will mail a copy of such notice of redemption, by first class mail, postage prepaid, to the respective Owners thereof at their addresses appearing on the Bond Register, and to the original purchaser of any Bonds; provided, however, so long as the Bonds are registered in the name of the Nominee, such notice shall be given in such manner as complies with the requirements of the Depository. The actual receipt by the Owner of any Bond of notice of such redemption is not a condition precedent to redemption, and neither the failure to receive nor any defect in such notice will affect the validity of the proceedings for the redemption of such Bonds, or the cessation of interest on the Item Title: 12.1
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redemption date. A certificate by the Trustee that notice of such redemption has been given as provided in the Indenture will be conclusive as against all parties and the Owner is not entitled to show that he or she failed to receive notice of such redemption.
In addition to the foregoing notice, further notice will be given by the Trustee as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice will in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed.
Each further notice of redemption will be sent not later than the date that notice of redemption is given to the Owners pursuant to the Indenture by first class mail or facsimile to the Depository and to any other registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds as determined by the Trustee and to one or more of the national information services that the Trustee determines are in the business of disseminating notice of redemption of obligations such as the Bonds.
Upon the payment of the redemption price of any Bonds being redeemed, each check or other transfer of funds issued for such purpose will to the extent practicable bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer.
With respect to any notice of optional redemption of Bonds, such notice may state that such redemption is conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, i f any, and interest on such Bonds to be redeemed and that, if the District determines that such moneys will not be so received on or prior to the redemption date, said notice shall be of no force and effect and the Trustee shall not be required to redeem such Bonds. If any condition stated in the redemption notice for an optional redemption shall not have been satisfied on or prior to the redemption date:
(i) the redemption notice shall be of no force and effect, (ii) the District shall not be required to redeem such Bonds, (iii) the redemption shall not be made, and (iv) the Trustee shall within a reasonable time thereafter give notice to the persons in the manner in which the conditional redemption notice was given that such condition or conditions were not met and that the redemption was canceled.
Selection of Bonds for Redemption. If less than all of the Bonds Outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to be redeemed will be in the principal amount of $5,000 or an integral multiple thereof. In selecting portions of such Bonds for redemption, the Trustee will treat such Bonds, as applicable, as representing that number of Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bonds to be redeemed in part by $5,000. The procedure for the selection of Parity Bonds for redemption may be modified as set forth in the Supplemental Indenture for such Parity Bonds. The Trustee will promptly notify the District in writing of the Bonds, or portions thereof, selected for redemption.
Partial Redemption of Bonds. Upon surrender of any Bond to be redeemed in part only, the District will execute and the Trustee will authenticate and deliver to the Owner, at the expense of the District, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered, with the same interest rate and the same maturity.
Effect of Notice and Availability of Redemption Money. Notice of redemption having been duly given, as provided in the Indenture, and the amount necessary for the redemption having been made available for that purpose and being available therefor on the date fixed for such redemption: (i) the Bonds, or portions thereof, designated for redemption will, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in the Indenture, anything in the Indenture or in the B onds to the contrary notwithstanding; (ii) upon presentation and surrender thereof at the office of the Trustee, the redemption price of such Bonds will be paid to the Owners thereof; (iii) as of the redemption date the Bonds, or portions thereof so designated for redemption will be deemed to be no longer Outstanding and such Bonds, or portions thereof, will cease to bear further interest; and (iv) as of the date fixed for redemption no Owner of any of the Bonds, or Item Title: 12.1
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portions thereof so designated for redemption will be entitled to any of the benefits of the Indenture, or to any other rights, except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available.
Registration, Transfer and Exchange
Registration. The Trustee will keep sufficient books for the registration and transfer of the Bonds. The ownership of the Bonds will be established by the Bond registration books held by the Trustee.
Transfer or Exchange. Subject to the limitations set forth in the following paragraph, the registration of any Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authoriz ed attorney, upon surrender of such Bond for cancellation at the office of the Trustee, accompanied by delivery of written instrument of transfer in a form acceptable to the Trustee and duly executed by the Owner or his or her duly authorized attorney.
Bonds may be exchanged at the office of the Trustee for a like aggregate principal amount of Bonds for other authorized denominations of the same maturity and issue. The Trustee may not collect from the Owner any charge for any new Bond issued upon any exchange or transfer, but will require the Owner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. Whenever any Bonds are surrendered for registration of transfer or exchange, the District will execute and the Trustee will authenticate and deliver a new Bond or Bonds, as applicable, of the same issue and maturity, for a like aggregate principal amount; provided that the Trustee is not required to register transfers or make exchanges of: (i) Bonds for a period of 15 days next preceding any selection of the Bonds to be redeemed; or (ii) any Bonds chosen for redemption.
SOURCES OF PAYMENT FOR THE BONDS
Limited Obligations
The Bonds are special, limited obligations of the District payable only from amounts pledged under the Indenture and from no other sources.
The Special Taxes are the primary source of security for the repayment of the Bonds. Under the Indenture, the District has pledged to repay the Bonds from the Net Taxes (which are Special Tax revenues remaining after the payment of the annual Administrative Expenses in an amount not to exceed the Administrative Expenses Cap (as defined in the Indenture)) and from amounts held in the Special Tax Fund (other than amounts held in the Administrative Expense Account therein). Special Tax revenues include the proceeds of the annual Special Tax levy received by the District, including any scheduled payments and Prepayments thereof, and the net proceeds of the redemption of delinquent Special Taxes or sale of property sold as a result of foreclosure of the lien of delinquent Special Taxes to the amount of said lien, and penalties and interest thereon; provided that any delinquent Special Tax sold to an independent third- party or to the City for 100% of the delinquent amount will no longer be pledged under the Indenture to the payment of the Bonds or Parity Bonds.
In the event that the Special Tax revenues are not received when due, the only sources of funds available to pay the debt service on the Bonds are amounts held by the Trustee in the Special Tax Fund (other than the Administrative Expense Account therein), including amounts held in the Reserve Account therein, for the exclusive benefit of the Owners of the Bonds.
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY,
THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE NET TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL OBLIGATIONS OF THE CITY BUT ARE Item Title: 12.1
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LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM THE NET TAXES AND OTHER AMOUNTS PLEDGED UNDER THE INDENTURE AS MORE FULLY DESCRIBED HEREIN.
Special Taxes
Authorization and Pledge . In accordance with the provisions of the Act, the City established the District on August 7, 2024 for the purpose of financing of various public improvements required in connection with the proposed development within the District. At a special election held on August 7, 2024, the qualified elector within the District authorized the District to incur indebtedness in an amount not to exceed $15,000,000 for the District and the levy of the Special Taxes on property within the Distr ict to repay such bonds and to finance the Facilities (as defined below). The qualified elector within the District also voted to approve the Rate and Method which authorized the Special Tax to be levied to repay indebtedness of the District, including the Bonds.
The Bonds will be repaid only from annual Net Taxes derived from the levy and collection of Special Taxes pursuant to the Rate and Method. The Rate and Method permits the prepayment of Special Taxes for an Assessor’s Parcel, and any such Prepayments will be applied to redeem Bonds and Parity Bonds, if any. The Net Taxes collected from the annual Special Tax levy and the proceeds of any Prepayment have been pledged under the Indenture to the repayment of the Bonds and Parity Bonds.
The Special Taxes levied in any Fiscal Year may not exceed the maximum rates authorized pursuant to the Rate and Method. See “— Rate and Method of Apportionment of Special Tax” and Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” There is no assurance that the Net Taxes will, in all circumstances, be adequate to pay the principal of and interest on the Bonds when due. See the caption “SPECIAL RISK FACTORS — Insufficiency of Special Tax Revenues.” Rate and Method of Apportionment of Special Tax. The Rate and Method applicable to the District is contained in Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” The meaning of the defined terms used in this section are as set forth in Appendix A.
In general, the Rate and Method imposes a different Maximum Special Tax on Taxable Property within the District depending upon whether such Taxable Property is classified as: (i) “Developed Property” (in general, Taxable Property not classified as Approved Property, Undeveloped Property, Provisional Undeveloped Property that are not Exempt Property pursuant to the provisions of the Rate and Method and which is included in a Final Map recorded prior to the January 1 preceding the Fiscal Year in which the Special Tax is being levied and a building permit for new construction has been issued before May 1 preceding such Fiscal Year), (ii) ”Approved Property” (in general, parcels of Taxable Property included in a Final Map recorded prior to the January 1 preceding the Fiscal Year in which the Special Tax is being levied, that have an assigned Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, but for which no building permit was issued before May 1 preceding such Fiscal Year), (iii) “Undeveloped Property” (in general, Taxable Property that is not “Developed Property,” “Approved Property” or “Provisional Undeveloped Property”) or (iv) ”Provisional Undeveloped Property” (in general, Taxable Property that would otherwise be classified as Exempt Property but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in the Rate and Method). Different Maximum Special Taxes are also applicable to Developed Property depending upon: (a) its status as either “Residential Property” or “Non-Residential Property,” (b) in the case of Residential Property, its status as “Single Family Residential Property” or “Multifamily Property” or (c) in the case of Single Family Residential Property, the Building Square Footage of the structure.
Pursuant to the Rate and Method the District is required to determine the “Special Tax Requirement” for each Fiscal Year. The Special Tax Requirement for the District is the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds and Parity Bonds due in the calendar year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of Item Title: 12.1
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funds from an escrow account, (iv) any amount equal to establish or replenish any reserve funds established in association with the Bonds and Parity Bonds to (provided that the same amount was not previously levied) , (v) an amount up to any anticipated shortfall due to Special Tax delinquencies , (vi) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by the District or the payment of debt service on Bonds or Parity Bonds anticipated to be issued, provide d that the inclusion of such amount does not cause an increase in the levy of Special Tax on Approved Property or Undeveloped Property, and, less (vii) any amounts available to pay debt service or other periodic costs on the Bonds and Parity Bonds pursuant to the Indenture.
The Special Tax Requirement for the District is to be satisfied first by levying the Special Tax Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax. If additional moneys are needed to satis fy the Special Tax Requirement, the Special Tax will be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel. If additional moneys are still needed to sati sfy the Special Tax Requirement, the Special Tax will be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel. If additional moneys are needed to satisfy the Special Tax Requirement, the Special Tax on each Assessor’s Parcel of Developed Property for which the Maximum Special Tax is the Backup Special Tax will be increased Proportionately from the Assigned Special Tax up to 100% of the Backup Special Tax. Finally, if additional moneys are needed to satisfy the Special Tax Requirement, the Special Tax will be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor’s Parcel of Residential Property as a result of a delinquency in the payment of the Special Tax applicable to any other Assessor’s Parcel b e increased by more than 10% above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default.
Notwithstanding the foregoing, all Taxable Property is currently classified as either Developed Property or Approved Property and there is no Undeveloped Property within the District. There are certain parcels which are expected to remain as open space wh en development in the District is complete. Such parcels are Exempt Property but may be classified as Provisional Undeveloped Property in the future, if necessary, in accordance with the Rate and Method.
For Fiscal Year 2026-27, the Assigned Special Tax for Developed Property within the District that is classified as Single Family Residential Property will range from $3,071 to $3,848 per single family residence depending on the square footage of the home. On each July 1 the Assigned Special Tax rates for Developed Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Single Family Residential Property shall be the Backup Special Tax computed pursuant to the Rate and Method. For Fiscal Year 2026 -27, the Maximum Special Tax on Approved Property not classified as Single Family Residential Property is 22,043 per acre.
Table 1 below sets forth the Assigned Special Tax for Developed Property, the Maximum Special Tax for Approved Property, the projected Fiscal Year 2026-27 Special Tax levy and the percent of such levy based on land use type.
Based on building permits issued through and including February 16, 2026, 151 parcels within the District will be classified as Developed Property and 31 parcels will be classified as Approved Property for the Fiscal Year 2026-27 Special Tax levy. Annual Debt Service on the Bonds has been sized based on the expected Special Tax revenues to be received in each Fiscal Year from the 1 51 parcels to be classified as Developed Property based on building permits issued through and including February 16, 2026, assuming that the Special Taxes are levied at 100% of the Assigned Special Tax. Assuming no delinquencies, the Special Tax levy on 151 parcels of Developed Property within the District will generate in each Fiscal Year not less than the Item Title: 12.1
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Administrative Expenses Cap plus 110% of debt service payable with respect to the Bonds in the calendar year that begins in that Fiscal Year, assuming that Special Taxes are levied and collected on such Developed Property pursuant to the Rate and Method.
TABLE 1
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2024-1 (BANNER PARK II) ASSIGNED SPECIAL TAX RATES FOR FISCAL YEAR 2026-27
Land Use
Category Land Use Type
Residential Floor
Area (sq. ft.)
Maximum/
Assigned Special
Tax Rates
Fiscal Year
2026-27(1)
Special Tax
Levy Rates
Fiscal Year
2026-27
Percent of
Maximum/
Assigned
Rate
No. of
Units
Aggregate
Estimated
Special
Taxes
Fiscal Year
2026-27 (2)
Percent of
Total
1 Residential Property <2,200 sq ft $ 3,071 $ 3,071 100.0% 23 $ 70,639 13.8% 2 Residential Property 2,200 - 2,400 sq ft 3,151 3,151 100.0 34 107,147 21.0 3 Residential Property 2,401 - 2,600 sq ft 3,330 3,330 100.0 18 59,946 11.7 4 Residential Property 2,601 - 2,800 sq ft 3,346 3,346 100.0 13 43,497 8.5 5 Residential Property 2,801 - 3,000 sq ft 3,484 3,484 100.0 29 101,045 19.8 6 Residential Property 3,001 - 3,200 sq ft 3,711 3,711 100.0 16 59,378 11.6 7 Residential Property > 3,200 sq ft 3,848 3,848 100.0 18 69,272 13.6 8 Approved Property N/A 22,043 0 0.0 31 0 0.0
Total 182 $ 510,923 100.0%
(1) Maximum Rate for Land Use Type Approved Property.
(2) Includes estimated Administrative Expenses of $30,600.
Backup Special Tax Rates . The Backup Special Tax for an Assessor’s Parcel within a Final Map classified as Single Family Residential Property or Approved Property expected to be classified as Single Family Residential Property is calculated by multiplying the Maximum Special Tax per acre of Undeveloped Property by the acreage of Single Family Residential Property expected to exist in such Final Map at the time of calculation and dividing such product by the number of residential units expected to exist in such Final Map at the time of calculation.
In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all Assessor’s Parcels within such changed or modified area shall be $ 22,043 per acre for Fiscal Year 2026 -27.
Notwithstanding the foregoing, the Backup Special Tax for an Assessor’s Parcel of Developed Property for which a certificate of occupancy has been granted may not be revised. In the event any superseding Final Map is recorded as a Final Map within the boundaries of the District, the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be $22,043 per acre for Fiscal Year 2026 -27. The Backup Special Tax shall not apply to Multifamily Residential Property or Non-Residential Property. On each July 1 the Backup Special Tax rate will increase by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
Prepayment of Special Taxes. The Maximum Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor’s Parcels of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a building permit has been issued, (iii) Approved Property or Undeveloped Property for which a building permit has not been issued, and (iv) Assessor’s Parcels of Provisional Undeveloped Property that are not Exempt Property. In addition, the Maximum Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property may be partially prepaid. The Prepayment amount is calculated based on the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount, Administrative Fees and Expenses and less a credit for the resulting reduction in the Reserve Requirement for the Bonds (if any), all as specified in Section G of the Rate and Method attached as Appendix A. Prepayments of Special Taxes will be applied to effect an extraordinary redemption of Bonds and Parity Bonds. See “THE BONDS — Redemption — Special Mandatory Redemption from Special Tax Prepayments.” Item Title: 12.1
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Estimated Debt Service Coverage. Based on the number of building permits issued within the District as of February 16, 2026 (the date pursuant to the Rate and Method for determining the number of parcels of Developed Property within the District for the following Fiscal Year), 1 51 parcels within the District will be classified as Developed Property for the Fiscal Year 2026 -27 Special Tax levy. Annual Debt Service for the Bonds in each future Fiscal Year has been structured so that Special Taxes levied on such Developed Property (151 parcels) at the Assigned Special Tax rates, assuming no delinquencies, will generate in each Fiscal Year not less than 110% of debt service payable with respect to the Bonds in the calendar year that begins in that Fiscal Year, plus the Administrative Exp enses Cap. Actual collections of the Special Tax will depend on the amount of Special Tax delinquencies.
Both the Assigned Special Tax rates and the Administrative Expenses Cap escalate by 2% each Fiscal Year. Special Taxes are expected to be levied against the remaining Taxable Parcels if they become classified as Developed Property. As further development occurs within the District, the District expects to issue Parity Bonds for the purpose of financing additional facilities which will be secured by Net Taxes on a parity with the Bonds.
Limitation on Special Tax Levy and Potential Impact on Coverage. Pursuant to Section 53321(d) of the Government Code, the special tax levied against any assessor’s parcel for which an occupancy permit for private residential use has been issued will not be increased as a consequence of delinquency or default by the owner of any other assessor’s parcel within the District by more than 10% above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. As a result, it is possible that the District may not be able to increase the tax levy to the Assigned Special Tax in all years.
Levy, Collection and Application of Special Taxes. The Special Taxes are levied and collected by the Treasurer-Tax Collector of the County in the same manner and at the same time as ad valorem property taxes, although it is possible that the District could elect to provide handbills to property owners within the District.
The District will covenant in the Indenture that each year it will levy Special Taxes up to the maximum rates permitted under the Rate and Method in an amount sufficient, together with other amounts on deposit in the Special Tax Fund, to pay the principal of and interest on any Outstanding Bonds and Parity Bonds, to replenish the Reserve Account to the Reserve Requirement and to pay Administrative Expenses.
The District will make certain covenants in the Indenture which are intended to ensure that the current maximum Special Tax rates and method of collection of the Special Taxes are not altered in a manner that would impair the District’s ability to collect sufficient Special Taxes to pay debt service on the Bonds, Parity Bonds and Administrative Expenses when due.
First, the District will covenant in the Indenture that it will take no actions that would discontinue or cause the discontinuance of the Special Tax levy or the District’s authority to levy the Special Tax for so long as the Bonds and any Parity Bonds are Outstanding.
Second, the District will covenant in the Indenture, to the maximum extent that the law permits it to do so, not to initiate proceedings to reduce the maximum Special Tax rates for the District, unless, in connection therewith, the District receives a certificate from one or more Independent Financial Consultants which, when taken together, certify that: (i) such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the District to an amount which is less than t he Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such proposed reduction; and (ii) the District is not delinquent in the payment of the principal of or interest on the Bonds or any Parity Bonds.
Third, the District will covenant in the Indenture that, in the event that any initiative is adopted by the qualified electors within the District which purports to reduce the maximum Special Tax below the levels specified in the preceding paragraph or to limit the power of the District to levy the Special Taxes for the purposes Item Title: 12.1
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set forth in the Indenture, it will commence and pursue legal action in order to preserve its ability to comply with such covenants. The District can provide no assurance that any such legal action will be successful. See the caption “SPECIAL RISK FACTORS — Proposition 218.”
Fourth, the District will covenant in the Indenture that it will not adopt any policy pursuant to the Act permitting the tender of Bonds or Parity Bonds in full payment or partial payment of any Special Taxes unless the District has first received a certificate from an Independent Financial Consultant that the acceptance of such a tender will not result in the District having insufficient Net Taxes to pay the principal of and interest on the Bonds and Parity Bonds when due.
See Appendix E under the caption “COVENANTS AND WARRANTY.” Although the Special Taxes constitute liens on taxed parcels within the District, they do not constitute a personal indebtedness of the owners of property within the District. Moreover, other liens for taxes and assessments already exist on the property located within the District and others could come into existence in the future in certain situations without the consent or knowledge of the City or the landowners in the District. See the captions “THE DISTRICT — Direct and Overlapping Debt” and “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.” There is no assurance that property owners will be financially able to pay the annual Special Taxes or that they will pay such taxes even if financially able to do so, all as more fully described under the caption “SPECIAL RISK FACTORS.”
Proceeds of Foreclosure Sales . The net proceeds received following a judicial foreclosure sale of property within the District resulting from a property owner’s failure to pay the Special Taxes when due are included within the Net Taxes pledged to the payment of principal of and inte rest on the Bonds and any Parity Bonds under the Indenture.
Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of any Special Tax or receipt by the District of Special Taxes in an amount which is less than the Special Taxes levied, the City Council, as the legislative body of the District, may order that Special Taxes be collected by a Superior Court action to foreclose the lien within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at a judicial foreclosure sale. Under the Ac t, the commencement of judicial foreclosure following the nonpayment of a Special Tax is not mandatory. However, the District will covenant in the Indenture for the benefit of the owners of the Bonds and any Parity Bonds that it will: (i) commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in excess of $5,000 by the October 1 following the close of each Fiscal Year in which such Special Taxes were due; and (ii) commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the October 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied; and (iii) diligently pursue such foreclosure proceedings until the delinquent Special Taxes are paid; provided that, notwithstanding the foregoing, the District may elect to defer foreclosure proceedings on any parcel so long as the amount in the Reserve Account is at least equal to the Reserve Requirement.
The District will covenant in the Indenture that it will deposit the net proceeds of any foreclosure in the Special Tax Fund and will apply such proceeds remaining after the payment of Administrative Expenses to make current payments of principal and interest on the Bonds and any Parity Bonds, to bring the amount on deposit in the Reserve Account up to the Reserve Requirement and to pay any delinquent installments of principal or interest due on the Bonds and any Parity Bonds. See APPENDIX E — “SUMMARY OF THE INDENTURE — COVENANTS AND WARRANTY — Covenants” herein.
If foreclosure is necessary and other funds (including amounts in the Reserve Account) have been exhausted, debt service payments on the Bonds could be delayed unless the foreclosure proceedings produce sufficient net foreclosure sale proceeds. Judicial foreclosure actions are subject to the normal delays associated with court cases and may be further slowed by bankruptcy actions, involvement by agencies of the federal government and other factors beyond the control of the City and the District. See the caption “SPECIAL RISK Item Title: 12.1
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FACTORS — Enforcement Delays – Bankruptcy.” Moreover, no assurances can be given that the real property subject to foreclosure and sale at a judicial foreclosure sale will be sold or, if sold, that the net proceeds of such sale will be sufficient to pay a ny delinquent Special Tax installment. See the caption “SPECIAL RISK FACTORS — Property Values.” Although the Act authorizes the District to cause such an action to be commenced and diligently pursued to completion, the Act does not impose on the Distric t or the City any obligation to purchase or acquire any lot or parcel of property sold at a foreclosure sale if there is no other purchaser at such sale. The Act provides that, in the case of a delinquency, the Special Tax will have the same lien priority as is provided for ad valorem taxes.
Collection of Special Taxes and Flow of Funds. The Special Taxes will be levied and collected by the Treasurer-Tax Collector of the County in the same manner and at the same time as ad valorem property taxes, although it is possible that the District could elect to provide handbills to property owners within the District.
When the County apportions Special Taxes to the District, the District will transmit the Special Taxes to the Trustee for deposit in the Special Tax Fund established by the Indenture.
Except for Prepayments, which will be deposited to the Redemption Account of the Special Tax Fund, the Trustee will, on each date on which the Special Taxes are received from the District, deposit the Special Taxes in the Special Tax Fund to be held in trust for the Owners. The Trustee will transfer the Special Taxes on deposit in the Special Tax Fund on the dates, in the amounts and in the following order of priority, to:
First: To the Administrative Expense Account in an amount up to the Administrative Expenses Cap.
Second: To the Interest Account, an amount such that the balance in the Interest Account one Business Day prior to each Interest Payment Date is equal to the installment of interest due on the Bonds and any Parity Bonds on said Interest Payment Date and any insta llment of interest due on a previous Interest Payment Date which remains unpaid. Moneys in the Interest Account will be used for the payment of interest on the Bonds and any Parity Bonds as the same become due.
Third: To the Principal Account, an amount such that the balance in the Principal Account one Business Day prior to September 1 of each year, commencing September 1, 2026, is equal the principal payment due on the Bonds and any Parity Bonds maturing on such September 1 and any principal payment due on a previous September 1 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds and any Parity Bonds as the same become due at maturity.
Fourth: To the Redemption Account, the amount needed to make the balance in the Redemption Account one Business Day prior to each September 1 on which a Sinking Fund Payment is due equal to the Sinking Fund Payment due on any Outstanding Bonds and Parity Bonds on such September 1; provided, however, that, if amounts in the Special Tax Fund are inadequate to make the foregoing transfers, then any deficiency will be made up by an immediate transfer from the Reserve Account, if funded, pursuant to the Indenture; and thereafter, to pay the principal and premium, if any, due in connection with an optional redemption of Bonds or Parity Bonds.
Fifth: To the Reserve Account of the Special Tax Fund to the extent necessary to replenish the Reserve Account to the Reserve Requirement.
Sixth: To the Administrative Expense Account of the Special Tax Fund the amount of any Administrative Expenses for the current Bond Year in excess of the Administrative Expenses Cap as directed by the City.
Item Title: 12.1
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Seventh: To the Rebate Fund established by the Indenture to the extent directed by the City pursuant to the Indenture.
Eighth: To the Surplus Fund established by the Indenture such remaining amounts in the Special Tax Fund after making the foregoing transfers on September 1.
Reserve Account of the Special Tax Fund
In order to secure further the payment of principal of and interest on the Bonds, the District is required, upon delivery of the Bonds, to deposit in the Reserve Account and thereafter to maintain in the Reserve Account an amount equal to the Reserve Requi rement. The term “Reserve Requirement” is defined in the Indenture to mean, that amount as of any date of calculation, equal to the lesser of: (i) 10% of the initial principal amount of the Bonds and Parity Bonds, if any; (ii) Maximum Annual Debt Service on the then Outstanding Bonds and Parity Bonds, if any; (iii) 125% of average Annual Debt Service on the then Outstanding Bonds and Parity Bonds, if any; provided, however, that the Reserve Requirement shall not exceed $______ except in connection with the issuance of Parity Bonds . The Reserve Requirement may be satisfied in whole or in part by cash, a Reserve Policy (as defined in the Indenture), or a combination thereof . On the date of issuance of the Bonds, the District will deposit $________ from proceeds of the Bonds into the Reserve Account to satisfy the Reserve Requirement.
Subject to the limits on the maximum annual Special Tax levy set forth in the Rate and Method and in the Indenture, the District will covenant in the Indenture to levy Special Taxes in an amount sufficient, in light of the other intended uses of the Specia l Tax proceeds, to maintain the balance in the Reserve Account at the Reserve Requirement. Amounts in the Reserve Account are to be applied: (i) to pay debt service on the Bonds, or any Parity Bonds, including Sinking Fund Payments, to the extent that other monies are not available therefor; (ii) to redeem Bonds or Parity Bonds in the event of prepayment of Special Taxes, to optionally redeem Bonds or Parity Bonds or in connection with a partial defeasance of Bonds or Parity Bonds, in accordance with the Indenture; and (iii) to pay any rebate requirements. See Appendix E under the caption “CREATION OF FUNDS AND APPLICATION OF PROCEEDS — Reserve Account of the Special Tax Fund.” No Teeter Plan
Although the Riverside County Board of Supervisors has adopted the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”) which allows each entity levying secured property taxes in the County to draw o n the amount of property taxes levied rather than the amount actually collected, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code, the District is not included in the County Teeter Plan. Consequently, the District may not draw on the County Tax Loss Reserve Fund in the event of delinquencies in Special Tax payments within the District.
Parity Bonds
The District may at any time after the issuance and delivery of the Bonds issue Parity Bonds payable from the Net Taxes and other amounts deposited in the Special Tax Fund (other than in the Administrative Expense Account therein) and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds theretofore issued; provided, however, Parity Bonds may only be issued for the purpose of refunding all or a portion of the Bonds or any Parity Bonds then Outstanding, or for other purposes of the District in a principal amount not to exceed $9,250,000 *. Parity Bonds
may be issued subject to the following additional specific conditions, which are made conditions precedent to the issuance of any such Parity Bonds by the Indenture:
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 38
Menifee Mayor and City Council
April 15, 2026
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(a) The District shall be in compliance with all covenants set forth in the Indenture and any Supplemental Indenture then in effect and a certificate of the District to that effect shall have been filed with the Trustee; provided, however, that Parity Bonds may be issued notwithstanding that the District is not in compliance with all such covenants so long as immediately following the issuance of such Parity Bonds the District will be in compliance with all such covenants.
(b) The issuance of such Parity Bonds shall have been duly authorized pursuant to the Act and all applicable laws, and the issuance of such Parity Bonds shall have been provided for by a Supplemental Indenture duly authorized, executed and delivered by the District which shall specify the following: (1) the purpose for which such Parity Bonds are to be issued and the fund or funds into which the proceeds thereof are to be deposited; (2) the authorized principal amount of such Parity Bonds; (3) the date and the maturity date or dates of such Parity Bonds; provided that: (i) each maturity date shall fall on a September 1; (ii) all such Parity Bonds of like maturity shall be identical in all respects, except as to number; (iii) fixed serial maturities or Sinking Fund Payments, or any combination thereof, shall be established to provide for the retirement of all such Parity Bonds on or before their respective maturity dates; and (iv) if issued for the purpose of refunding Bonds and/or Parity Bonds, the maturity of the Parity Bonds to be issued shall not exceed the maturity of the Bonds and Parity Bonds being refunded; (4) the description of the Parity Bonds, the place of payment thereof and the procedure for execution and authentication; (5) the denominations and method of numbering of such Parity Bonds; (6) the amount and due date of each mandatory Sinking Fund Payment, if any, for such Parity Bonds; (7) the amount, if any, to be deposited from the proceeds of such Parity Bonds in the Reserve Account of the Special Tax Fund to increase the amount therein to the Reserve Requirement; (8) the form of such Parity Bonds; and (9) such other provisions as are necessary or appropriate and not inconsistent with the Indenture. (c) The District shall have received the following documents or money or securities, all of such documents dated or certified, as the case may be, as of the date of delivery of such Parity Bonds by the Trustee (unless the Trustee shall be directed by the District to accept any of such documents bearing a prior date): (1) a certified resolution of the City Council, acting as the legislative body of the District, authorizing the issuance of such Parity Bonds; (2) a written request of the District as to the delivery of such Parity Bonds; (3) an opinion of Bond Counsel and/or general counsel to the District substantially to the effect that: (i) the District has the right and power under the Act to execute and deliver the Supplemental Indenture relating to such P arity Bonds, and such Supplemental Indenture has been duly and lawfully executed by the District, and the Indenture and such Supplemental Indenture are in full force and effect and are valid and binding upon the District and enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights); (ii) the Indenture creates the valid pledge which it purports to create of the Net Taxes a nd other amounts as provided in the Indenture, subject to the application thereof to the purposes and on the conditions permitted by the Indenture; and (iii) such Parity Bonds are valid and binding limited obligations of the District, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights) and the terms of the Indenture and the Supplemental Indenture executed and delivered in connection with such Parity Bonds and are entitled to the benefits of the Indenture and such Supplemental Indenture, and such Parity Bonds have been duly and validly authorized and issued in accordance with the Act (or other applicable laws) and the Indenture and such Supplemental Indenture; and a further opinion of Bond Counsel to the effect that, assuming compliance by the District with certain tax covenants, the issuance of the Parity Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds and any Parity Bonds theretofore issued on a tax-exempt basis, or the exemption from State of California personal income taxation of interest on any Outstanding Bonds and Parity Bonds theretofore issued; (4) a certificate of the District containing such statements as may be reasonably necessary to show compliance with the requirements of the Indenture; (5) where the Parity Bonds are issued to refund the Bonds or other Parity Bonds, a certificate of an Independent Financial Consultant certifying that in each Bond Year the Annual Debt Service on the Bonds and Parity Bonds to remain Outstanding following the issuance of the Parity Bonds proposed to be issued is less than the Annual Debt Service on the Bo nds and Parity Bonds Outstanding prior to the issuance of such Parity Bonds; (6) where the Parity Bonds are being issued other than to refund the Bonds or other Parity Bonds, a Certificate of the Special Tax Administrator certifying that (i) the maximum Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 39
Menifee Mayor and City Council
April 15, 2026
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Special Taxes that may be levied in each Fiscal Year is not less than 110% of the Annual Debt Service in the Bond Year that begins in such Fiscal Year; and (ii) the Value of District Property is not less than seven (7) times the sum of Direct Debt for District Property plus Overlapping Debt allocable to all property in the District subject to the Special Tax. For purposes of the foregoing Certificate of the Special Tax Administrator, all calculations shall consider the Parity Bonds proposed to be issued to be Outstanding; and (7) such further documents, money and securities as are required by the provisions of the Indenture and the Supplemental Indenture providing for the issuance of such Parity Bonds.
The District currently expects to issue Parity Bonds to finance additional Project Costs in Fiscal Year 2026-27.
THE DISTRICT
General Description of the District
The District contains approximately 81 gross acres, and is located at the southwest corner of Domenigoni Parkway and Briggs Road along the eastern border of the City. The property within the District is being developed by Pulte in a community known as Banner Park II, which is an extension of, and is located across from, Pulte’s original community known as Banner Park, also on Domenigoni Parkway. Pulte is currently building and selling homes within Banner Park II in three product lines: Heritage, Merit and Crest. At completion, Heritage is expected to consist of 66 proposed homes, Merit is expected to consist of 55 homes and Crest is expected to consist of 61 homes, for a total of 182 proposed homes.
As of February 16, 2026, Pulte had completed and conveyed 84 homes within the District to individual homeowners. As of such date, Pulte owned six model homes (none of which were in escrow), 19 production homes over 95 percent complete (14 in escrow), 28 houses under construction (15 in escrow) and 45 additional finished lots (five in escrow) Pulte currently expects to complete and convey all homes planned within the District to individual homeowners by the end of 2027.
The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District has been completed, including a 3.3 acre City park, which opened to the public in February 2026. Pulte expects to complete the remaining in -tract infrastructure within the District, which consists of landscaping, walls, certain interior sidewalks, and wet and dry utilities as construction of the related homes occurs, although delays could occur.
Water and sewer service to the property within the District is currently supplied by the Eastern Municipal Water District. Electricity is currently supplied by Southern California Edison and gas by The Gas Company. Public education instruction is provide d by Menifee Union School District and Perris Union High School District.
The property within the District is not located in an Alquist- Priolo Earthquake Study Zone and is not located within one -half mile of an active earthquake fault. The District is not located in a Fault Zone or Liquefaction Area. Additionally, the District is located in a Very High Fire Hazard Severity Zone per the Cal Fire Hazard Severity Zone Map. As of August 18, 2014, the District is in Flood Hazard Zone X under the Federal Emergency Management Agency Flood Map Zone X (minimal flood hazard). Notwithstanding the foregoing, the property in the District may be subject to unpredictable seismic activity, fires, flood, or other natural disasters.
See “SPECIAL RISK FACTORS — Natural Disasters.”
A map showing the location of the District and an aerial photograph thereof appear following the Table of Contents.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 40
Menifee Mayor and City Council
April 15, 2026
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Authorized Uses of Bond Proceeds
Proceeds of the Bonds are authorized to be used to pay for the costs of construction of City facilities, including certain storm drain and street improvements. See the caption “FINANCING PLAN.” Appraisal Report
The estimated assessed value of the property within the District, as shown on the County’s assessment roll for Fiscal Year 202 5-26 is approximately $14,901,865, which as a result of timing of the County’s determination of the assessed values for Fiscal Year 202 5-26, does not reflect the substantial development activity that has taken place since such value was determined.
A property’s assessed value is not necessarily indicative of its market value. In order to provide information with respect to the value of the taxable property within the District, the City engaged the Appraiser to prepare the Appraisal Report. The Appraiser has an “MAI” designation from the Appraisal Institute and has prepared numerous appraisals for the sale of land-secured municipal bonds. The Appraiser was selected by the City and has no material relationships with the City or the owners of the land within the District other than the relationship represented by the engagement to prepare the Appraisal Report. The City instructed the Appraiser to prepare its analysis and report in conformity with City -approved guidelines and the Appraisal Standards for Land Secured Financings published in 1994 and revised in 2004 by the California Debt and Investment Advisory Commission. A copy of the Appraisal Report is included as Appendix D — “APPRAISAL REPORT” to this Official Statement.
The purpose of the Appraisal Report was to estimate the market value of the property within the District subject to the lien of the Special Taxes. The estimate of market value takes into consideration and assumes the improvements to be funded with the proceeds of the Bonds have been installed and that the remaining costs to develop the project within the District provided to the Appraiser by Pulte are correct. As a result, the value conclusions are based upon a hypothetical condition that all improvements and benefits to the District, which are to be funded with the proceeds of the Bonds, are completed and in place or have accrued to the property.
Subject to the assumptions and limiting conditions set forth in the Appraisal Report, the Appraiser concluded that, as of February 16, 2026, the market value of the Taxable Property within the District was $81,804,327. In valuing the property within the District, the Appraiser used a sales comparison approach for the property to be developed and, with respect to the Pulte -owned models and production units more than 95% complete, a discounted cash flow analysis was applied. The discounted cash flow analysi s accounts for remaining development costs, marketing and carrying costs and a discount rate through the estimated absorption period for such models and production units. Lots with homes less than 95% complete were valued as finished lots.
The Appraisal Report is based upon a variety of assumptions and limiting conditions that are described in Appendix D. The City, the Underwriter and the District make no representation as to the accuracy of the Appraisal Report. There is no assurance that the property within the District can be sold for the prices set forth in the Appraisal Report or that any parcel can be sold for a price sufficient to pay the Special Tax for that parcel in the event of a default in payment of Special Taxes by the landowner. See “SPECIAL RISK FACTORS — Property Values” and Appendix D — “APPRAISAL REPORT.”
Estimated Appraised Value-to-Lien Ratios
The aggregate appraised value of property within the District is $81,804,327. Dividing the aggregate estimate of value by the principal amount of the Bonds results in a value to lien ratio of 14.23-to-1 for the District.
Including overlapping indebtedness, the estimated value to lien ratio based on the appraised value is 13.49-to-1.
See Table 4 below and “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.” The assessed value of the property within the District is $14,901,865 for Fiscal Year 2025-26, which as a result of timing of Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 41
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April 15, 2026
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the County’s determination of the assessed values for Fiscal Year 2025- 26, does not reflect the substantial development activity that has taken place since such value was determined. Dividing the assessed value by the principal amount of the Bonds and all other overlapping debt issued results in an estimated assessed value -to- lien ratio of 2.46-to-1 for the District.
Based on ownership status as of February 16, 2026 and assuming no further development activity and transfer of ownership, individual homeowners and Pulte would be responsible for approximately 55.57 % and
44.43%, respectively, of the projected Fiscal Year 2026-27 Special Tax levy. [Between February 16, 2026 and _____, 2026, Pulte conveyed an additional __ homes within the District to individual homeowners, for a total of ___ homes conveyed to individual homeowners as of ______, 2026. Based on ownership status as of ______, 2026 and assuming no further development activity and transfer of ownership, individual homeowners and Pulte would be responsible for approximately ___% and ____%, respectively, of the projected Fiscal Year 2026-27 Special Tax levy.]
Table 2 below sets forth the appraised value -to-lien ratio of the Taxable Property within the District based on ownership status as of February 16, 2026, the appraised values set forth in the Appraisal Report, the principal amount of the Bonds and overlapping debt. Table 3 below sets forth the estimated appraised value-to- lien ratios for Developed Property within the District by various ranges based upon the principal amount of the Bonds and overlapping debt.
Annual Debt Service on the Bonds has been sized based on the expected Special Tax revenues to be received in each Fiscal Year from the 151 parcels to be classified as Developed Property in Fiscal Year 2026-27 (based on development status as of February 16, 2026), assuming that the Special Taxes are levied at 100% of the Assigned Special Tax rates. The District currently does not expect to levy the Special Tax on Approved Property, however, the District has the ability to do so under the Rate and Method if necessary to meet the Special Tax Requirement.
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Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 42
Menifee Mayor and City Council
April 15, 2026
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TABLE 2
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2024-1 (BANNER PARK II)
ESTIMATED VALUE-TO-LIEN RATIOS
FISCAL YEAR 2026-27 PROJECTED LEVY ON TAXABLE PROPERTY
Property Owner
No. of
Parcels
Appraised
Property Value(2)
% of
Appraised
Value
Fiscal Year
2026-27
Maximum
Special Tax
Fiscal Year
2026-27
Percentage of
Maximum Tax
Projected
Fiscal Year
2026-27
Special Tax
Levy(3)*
% of
Estimated
Fiscal Year
2026-27
Special Tax
Levy
CFD 2024-1
2026 Bonds*
All other
Overlapping
Debt Issued
Appraised
Value-to-
Lien Ratio*
Developed Property
Developed - Individually Owned 84 $ 54,675,720 66.84% $ 289,152 46.56% $ 283,898 55.57% $3,195,031 $ 173,728 16.23:1 Developed - Pulte Owned(1) 67 $20,683,179 25.28 230,474 37.11 227,025 44.43 2,554,969 138,925 7.68:1 Total Developed 151 $ 75,358,899 92.12% $ 519,626 83.67% $ 510,923 100.00% $5,750,000 $ 312,653 12.43:1
Approved Property
Approved - Pulte Owned 31 $ 6,445,428 7.88% $ 101,424 16.33% $ 0 0.00% $ 0 $ 0 N/A Total Approved 31 6,445,428 7.88 101,424 16.33 0 0.00 0 0 N/A Total 182 $ 81,804,327 100.00% $ 621,050 100.00% $ 510,923 44.43% $5,750,000 $ 312,653 13.49:1
* Preliminary, subject to change.
(1) Reflects appraised value for 6 completed model homes, 47 homes under construction and 14 finished lots for which building permits have been issued as of February 16, 2026 and will be classified as Developed Property for Fiscal Year 2026-27 under the Rate and Method. (2) Reflects the appraised value based as of February 16, 2026 the date of value of the Appraisal Report. (3) Estimated Fiscal Year 2026-27 Special Tax Levy based upon development status as of February 16, 2026 and the Fiscal Year 2026-27 Administrative Expenses Cap of $30,600.
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 43
Menifee Mayor and City Council
April 15, 2026
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TABLE 3
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2024-1 (BANNER PARK II) FISCAL YEAR 2026-27 PROJECTED VALUE-TO-LIEN STRATA FOR DEVELOPED PROPERTY* Value-to-Lien Category
No. of
Parcels of
Developed
Property
% of
Developed
Property
Appraised
Value (1)
% of
Appraised
Value
CFD 2024-1
Projected
Fiscal Year
2026-27
Special Tax
Levy
Percent Share
of Projected
Fiscal Year
2026-27
Special Tax
Levy
CFD 2024-1
2026 Bonds
Percent
Share of
CFD 2024-1
2026 Bonds
All Other
Overlapping
Debt
Aggregate
Value-to-Lien
Less than 6.00:1(2) 42 27.81% $ 8,732,515 11.59% $142,978 27.98% $ 1,609,096 27.98% $ 87,494 5.15:1 Between 6.01:1 to 9.00:1 0 0.00 0 0.00 0 0.00 0 0.00 0 N/A Between 9.01:1 to 12.00:1 17 11.26 7,915,896 10.50 57,307 11.22 644,945 11.22 35,069 11.64:1 Between 12.01:1 to 15.00:1 8 5.30 4,034,768 5.35 26,739 5.23 300,928 5.23 16,363 12.72:1 Greater than 15.00:1(2) 84 55.63 54,675,720 72.55 283,898 55.57 3,195,031 55.57 173,728 16.23:1 Totals 151 100.00% $75,358,899 100.00% $510,923 100.00% $ 5,750,000 100.00% $312,653 12.43:1
* Preliminary, subject to change.
(1) Reflects the appraised value as of February 16, 2026, the date of value of the Appraisal Report. (2) The minimum value to lien in the Less than 6.00:1 category is 4.55:1*. The maximum value to lien in the Greater than 15.00:1 category is 16.83:1*.
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 44
Menifee Mayor and City Council
April 15, 2026
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Direct and Overlapping Debt
The District is included within the boundaries of overlapping local agencies providing governmental services. Some of these local agencies have outstanding bonds, and/or the authority to issue bonds, payable from taxes or assessments. The existing and authorized indebtedness payable from taxes and assessments that may be levied upon the property within the District is shown in Table 4 below. In addition to current debt, new community facilities districts and/or special assessment districts could be formed in the future encompassing all or a portion of the property within the District; and such districts or the agencies that formed them could issue more bonds and levy additional special taxes or assessments on such property within the District.
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Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 45
Menifee Mayor and City Council
April 15, 2026
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TABLE 4
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2024-1 (BANNER PARK II)
DIRECT AND OVERLAPPING DEBT
AS OF FEBRUARY 16, 2026
I. Appraisal Value (1) $81,804,327
II. Land Secured Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding % Applicable Parcels in
CFD No.
2024-1(4)
Amount
Applicable
City of Menifee CFD No. 2024-1, Series 2026 CFD $ 5,750,000 $ 5,750,000 100.000% 183 $ 5,750,000* Total Land Secured Bonded Debt (2) $ 5,750,000*
Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued % Applicable Parcels in
CFD No.
2024-1(4)
Amount
Applicable
City of Menifee CFD No. 2024-1, Series 2026 CFD $ 15,000,000 $ 9,250,000 100.000% 183 $ 9,250,000 Total Unissued Land Secured Indebtedness (2) $ 9,250,000
TOTAL OUTSTANDING AND UNISSUED LAND SECURED INDEBTEDNESS $15,000,000*
III. General Obligation Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding % Applicable Parcels in
CFD No.
2024-1(4)
Amount
Applicable
Metropolitan Water Debt Service GO $ 850,000,000 $ 17,155,000 0.011% 183 $ 1,965 Perris Union High School Debt Service GO 363,415,283 276,899,802 0.048 183 133,451 Mt. San Jacinto Jr. College Debt Service GO 295,000,000 233,100,000 0.010 183 23,864 EMWD Improvement District U-35 GO 9,000,000 3,950,000 0.135 183 5,321 EMWD Improvement District U-36 GO 9,012,000 3,945,000 0.135 183 5,315 Menifee Union High School Debt Service GO 180,955,495 179,566,292 0.079 183 142,737 Total Outstanding General Obligation Bonded Debt (3) $ 312,653 Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued % Applicable Parcels in
CFD No.
2024-1(4)
Amount
Applicable
Metropolitan Water Debt Service GO $ 850,000,000 $ 0 0.011% 183 $ 0 Perris Union High School Debt Service GO 363,420,000 4,717 0.048 183 2 Mt. San Jacinto Jr. College Debt Service GO 295,000,000 0 0.010 183 0 EMWD Improvement District U-35 GO 46,200,000 37,200,000 0.135 183 50,116 EMWD Improvement District U-36 GO 19,700,000 10,688,000 0.135 183 14,400 Menifee Union High School Debt Service GO 180,960,000 4,506 0.079 183 4 Total Unissued General Obligation Indebtedness (3) $ 64,522
TOTAL OUTSTANDING AND UNISSUED GENERAL OBLIGATION INDEBTEDNESS $ 377,175
TOTAL OF ALL OUTSTANDING DIRECT AND OVERLAPPING BONDED DEBT $ 6,062,653* TOTAL OF ALL OUTSTANDING DIRECT AND UNISSUED DIRECT OVERLAPPING INDEBTEDNESS $15,377,175*
IV. Ratios to Appraisal Value
Outstanding Land Secured Bonded Debt ........... 14.23:1* Total Outstanding Bonded Debt ........................ 13.49:1*
* Preliminary, subject to change.
(1) Based on the Appraisal Report as of February 16, 2026 date of value. (2) Parity Bonds may be issued to finance additional public improvements and for refunding purposes. The District currently expects to issue Parity Bonds to finance additional public improvements in Fiscal Year 2026-27. (3) Calculated by dividing the appraised value by the total assessed value for Fiscal Year 2025-26. (4) All parcels have subdivided into 183 individual parcels. Based on projected development status as of February 16, 2026, 151 parcels will be classified as Developed Property under the Rate and Method for Fiscal Year 2026-27.
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 46
Menifee Mayor and City Council
April 15, 2026
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Table 5 below describes the estimated Fiscal Year 2025-26 effective tax burden for the development in the District based on the average appraised value of homes within each Land Use Category (as defined in the Rate and Method) as of the Date of Value, the estimated Fiscal Year 2025-26 Special Tax levy and Fiscal Year 2025-26 actual levies for all other overlapping taxing jurisdictions. Based on the foregoing, the projected debt service on the Bonds and the Administrative Expenses Cap of $30,000 (which amount shall escalate at 2% per Fiscal Year), in Fiscal Year 2025 -26, the estimated effective tax rate on Developed Property in the District is estimated to range from approximately 1.90% to 1.92%.
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Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 47
Menifee Mayor and City Council
April 15, 2026
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TABLE 5
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2024-1 (BANNER PARK II) FISCAL YEAR 2025-26 TAX OBLIGATION
FOR A SAMPLE OF DEVELOPED PROPERTY
Neighborhood Heritage Crest Merit
CFD Tax Category Less than
2,200 SF
2,200 to
2,400 SF
2,401 to
2,600 SF
2,801 to
3,000 SF
3,001 to
3,200 SF
Greater than
3,200 SF
2,200 to
2,400 SF
2,601 to
2,800 SF
2,801 to
3,000 SF
Plan 1 2 3 1 2 3 1 2 3
Home Size SqFt 2,191 2,311 2,462 2,845 3,047 3,237 2,391 2,654 2,824
Average Home Value (1) $613,480 $623,970 $640,120 $668,575 $694,716 $712,140 $621,660 $644,922 $655,168
Ad Valorem Property Taxes:
General Purpose $ 6,135 $ 6,240 $ 6,401 $ 6,686 $ 6,947 $ 7,121 $ 6,217 $ 6,449 $ 6,552 Metro Water West (0.00700%) 43 44 45 47 49 50 44 45 46
Mt. San Jacinto Jr College (0.00254%) 16 16 16 17 18 18 16 16 17 Menifee Union High School (0.07500%) 460 468 480 501 521 534 466 484 491 Perris Union High School (0.04712%) 289 294 302 315 327 336 293 304 309 EMWD Improvement District U-35 (0.0043%) 26 27 28 29 30 31 27 28 28 EMWD Improvement District U-36 (0.0043%) 26 27 28 29 30 31 27 28 28 Total General Property Taxes $ 6,995 $ 7,115 $ 7,299 $ 7,623 $ 7,922 $ 8,120 $ 7,089 $ 7,354 $ 7,471
Assessment, Special Taxes & Parcel Charges:
Flood Control Stormwater / Cleanwater / Santa Ana $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 MWD Standby East charge 7 7 7 7 7 7 7 7 7
EMWD Infrastructure Availability Charge 11 11 11 11 11 11 11 11 11 Valley Wide Regional Fac LMD 88-1 6 6 6 6 6 6 6 6 6
Valley Wide LMD 88-1 Parks 311 311 311 311 311 311 311 311 311 Menifee CFD 2017-1, Zone 23 1,326 1,326 1,326 1,326 1,326 1,326 1,326 1,326 1,326 Menifee CFD 2024-1 (Banner Park II)(2) 3,011 3,090 3,265 3,416 3,638 3,773 3,090 3,280 3,416 Total Assessments & Special Taxes $ 4,675 $ 4,753 $ 4,929 $ 5,080 $ 5,302 $ 5,437 $ 4,753 $ 4,944 $ 5,080
Total Property Tax $ 11,670 $ 11,868 $ 12,228 $ 12,703 $ 13,224 $ 13,557 $ 11,842 $ 12,298 $ 12,550 Effective Tax Rate(2) 1.90% 1.90% 1.91% 1.90% 1.90% 1.90% 1.90% 1.91% 1.92%
(1) Reflects the appraised value as of February 16, 2026, the date of value of the Appraisal. (2) Includes the full Assigned Tax Special Tax Rate for each category.
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 48
Menifee Mayor and City Council
April 15, 2026
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Delinquency History
Fiscal Year 2025-26 was the first year of the Special Tax levy and as a result, no delinquency history exists with respect to the Special Tax levy. In Fiscal Year 2025 -26, the District levied the Special Tax in the amount of $238,288 as show n in Table 6. The first installment of the Fiscal Year 2025-26 Special Tax levy became delinquent on December 10, 2025 and the second installment will become delinquent on April 10, 2026.
TABLE 6
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2024-1 (BANNER PARK II)
SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES Delinquencies as of February 16, 2026
Fiscal
Year
Amount
Levied
Parcels
Levied
Parcels
Delinquent
Amount
Delinquent
Percent
Delinquent
2025-26(1)(2) $238,288 72 0 $0 0.00%
(1) Fiscal Year 2025-26 was the first year levied.
(2) Includes first installment for Fiscal Year 2025-26 as of February 16, 2026.
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.
PROPERTY OWNERSHIP AND THE DEVELOPMENT
The information about the property in the District contained in this Official Statement has been provided by representatives of Pulte and has not been independently confirmed or verified by the Underwriter, the City or the District. The Underwriter, the City, and the District make no representation as to the accuracy or adequacy of the information contained in this caption. There may be material adverse changes in this information after the date of this Official Statement. Neither the Bonds nor the Net T axes securing the Bonds and any Parity Bonds are personal obligations of Pulte or any affiliate thereof or any other property owner and, in the event that any property owner defaults in the payment of its Special Taxes, the District may proceed with judicial foreclosure but has no direct recourse to the assets of any property owner or any affiliate thereof. See the caption “SPECIAL RISK FACTORS.”
Notwithstanding the belief of Pulte that it will have sufficient funds to complete its planned development in the District, no assurance can be given that amounts necessary to fund the remaining planned development by Pulte in the District will be available when needed. None of Pulte , or any other entity or person, is under any legal obligation of any kind to expend funds for the development of the property as planned by Pulte in the District. Any contributions by Pulte or any other entity or person to fund the costs of its development are entirely voluntary. If and to the extent the aforementioned sources are inadequate to pay the costs to complete the planned development by Pulte within the District, the remaining portions of such development may not be completed. Pulte has no legal obligation to Bondholders to make any such funds available for construction or development, or the payment of ad valorem property taxes or the Special Taxes. See the caption “SPECIAL RISK FACTORS.”
General
The District contains approximately 81 gross acres, and is located at the southwest corner of Domenigoni Parkway and Briggs Road along the eastern border of the City. The property within the District is being developed by Pulte Home Company, LLC, a Michigan limited liability company (“Pulte”) in a community known as Banner Park II. The property is being developed as an extension of, and is located across from, Pulte’s original community known as Banner Park, also on Domenigoni Parkway. Pulte is currently building and selling homes within Banner Park II in three product lines: Heritage, Merit and Crest. At completion, Heritage is Item Title: 12.1
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expected to consist of 66 homes, Merit is expected to consist of 55 homes and Crest is expected to consist of 61 homes, for a total of 182 proposed single family detached homes.
As of February 16, 2026, Pulte had completed and conveyed 84 homes within the District to individual homeowners. As of such date, Pulte owned six model homes (none of which were in escrow), 19 production homes over 95 percent complete (14 in escrow), 28 houses under construction (15 in escrow) and 45 additional finished lots (five in escrow) . Pulte currently expects to complete and convey all homes planned within the District to individual homeowners by the end of 2027.
The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District has been completed, including a 3.3 acre City park, which opened to the public in February 2026. Pulte expects to complete the remaining in -tract infrastructure within the District, which consists of landscaping, walls, certain interior sidewalks, and wet and dry utilities as construction of the related homes occurs, although delays could occur.
Planned Development Within the District
The property within the District is planned for 182 residential units within three product lines – Heritage (66 homes), Merit (55 homes) and Crest (61 homes). As of February 16, 2026, Pulte had completed and conveyed 84 homes within the District to individual homeowners. As of such date, Pulte owned six model homes (none of which were in escrow), 19 production homes over 95 percent complete (14 in escrow), 28 houses under construction (15 in escrow) and 45 additional finished lots (five in escrow). [Between February 16, 2026 and ___ _, 2026, Pulte conveyed an additional __ homes within the District to individual homeowners, for a total of ___ homes conveyed to individual homeowners as of ____, 2026.] Pulte currently expects to complete and convey all homes planned within the District to individual homeowners by the end of 2027.
The following tables summarize the status of development within the three product lines planned within the District.
COMMUNITY FACILITIES DISTRICT NO. 2024-1 (BANNER PARK II)
HERITAGE
(As of February 16, 2026)
Owned by Pulte
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
February 16,
2026
Completed
Homes/Homes
Under
Construction(1)
Finished
Lots(2)
Base Home
Prices(23)
1 23 2,191 13 7 3 $620,990
2 22 2,311 13 4 5 633,990
3 21 2,462 7 10 4 657,990
TOTAL: 66 33 21 12
(1) Includes two model homes , (none in escrow), 10 completed production homes ( nine in escrow), and nine homes under construction (five in escrow).
(2) Three finished lots were in escrow as of February 16, 2026. (3) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions. Base sales prices are subject to change.
Source: Pulte
Item Title: 12.1
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COMMUNITY FACILITIES DISTRICT NO. 2024-1 (BANNER PARK II) MERIT
(As of February 16, 2026)
Owned by Pulte
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
February 16,
2026
Completed
Homes/Homes
Under
Construction(1)
Finished
Lots(2)
Base Home
Prices(3)
1 18 2,391 9 5 4 $626,990
2 17 2,654 7 4 6 633,990
3 20 2,824 8 6 6 664,990
TOTAL: 55 24 15 16
(1) Includes two model homes, (none in escrow), six completed production homes (three in escrow), and seven homes under construction (three in escrow).
(2) One finished lot was in escrow as of February 16, 2026. (3) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions. Base sales prices are subject to change.
COMMUNITY FACILITIES DISTRICT NO. 2024-1 (BANNER PARK II) CREST
(As of February 16, 2026)
Owned by Pulte
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
February 16,
2026
Completed
Homes/Homes
Under
Construction(1)
Finished
Lots(2)
Base Home
Prices(3)
1 16 2,845 8 5 3 $678,990
2 22 3,047 7 7 8 704,990
3 23 3,237 12 5 6 721,990
TOTAL: 61 27 17 17
(1) Includes two model homes (none in escrow), three completed production homes ( two in escrow), and 12 homes under construction (seven in escrow).
(2) One finished lot was in escrow as of February 16, 2026. (3) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions. Base sales prices are subject to change.
Except as described in this Official Statement and except for those consents, permits, authorizations, certifications and approvals of governmental entities required in the ordinary course of development, Pulte has no actual knowledge of any impediment to construction or obtaining land use entitlements which could be reasonably expected to have a material adverse effect on its ability to complete the planned development of its property within the District as described in the Official Statement.
No assurance can be given that home construction and sales will be carried out on the schedule and according to the plans outlined herein, or that the home construction and sale plans or base prices set forth above will not change after the date of this Official Statement. Additionally, homes sold may not result in closed escrows as sales contracts are subject to cancellation. In changing market conditions, builders will often revise the product lines and prices and the rate of sales can fluctuate. Pulte continuously evaluates its product lines Item Title: 12.1
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and prices in light of the then current market conditions. See “SPECIAL RISK FACTORS” herein for a discussion of risk factors.
Pulte
As previously defined in this Official Statement, “Pulte” is Pulte Home Company, LLC, a Michigan limited liability company, an indirect wholly owned subsidiary of PulteGroup, Inc., a Michigan corporation (the “Parent Entity”). The Parent Entity is publicly-held holding company whose subsidiaries engage primarily in the homebuilding business. The company also has mortgage banking operations, conducted principally through Pulte Mortgage LLC and title operations. The Parent Entity is a Michigan corporation organized in 1956 whose common stock trades on the New York Stock Exchange under the symbol “PHM.” Pulte’s Southern California division based in Mission Viejo, California, is responsible for the development of the property in the District.
Through its brands, which include Centex, Pulte Homes, Del Webb, DiV osta Homes, and John Weiland Homes and Neighborhoods, the Parent Entity and its subsidiaries offer a wide variety of home designs with varying levels of options and amenities to the company’s major customer groups: first-time, move-up, and active adult. Over its history, the Parent Entity and its subsidiaries have delivered over 875,000 homes. During 2025, the company operated out of 1,014 active communities in 47 markets across 26 states, delivering closings totaling 29,572 homes, compared with 31,219 homes in 2024 and 28,603 homes in 2023 The Parent Entity is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and in accordance therewith is obligated to file reports, proxy statements and other information, including financial statements, with the Securities and Exchange Commission (“SEC”). Such filings, particularly the Parent Entity’s annual report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the SEC on February __, 2026, set forth certain data relative to the consolidated results of operations and financial position of the Parent Entity and its subsidiaries, including Pulte, as of such dates.
The SEC maintains an Internet web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, including the Parent Entity. The address of such Internet web site is www.sec .gov. All documents subsequently filed by the Parent Entity pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in such manner as the SEC prescribes. Copies of the Parent Entity’s Annual Report and each of its other quarterly and current reports, including any amendments, are available from the Parent Entity’s website at www.pultegroup.com.
The foregoing website addresses and references to filings with the SEC are given for reference and convenience only, and the information on such websites and on file with the SEC does not form a part of this Official Statement and is not incorporated by re ference herein. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on such websites. Pulte and the Parent Entity are not obligated to advance funds for construction or development or to pay ad valorem property taxes or the Special Taxes and investors should not rely on the information and financial statements contained on such websites in evaluating whether to buy, hold or sell the Bonds. The information contained on such websites may be incomplete or inaccurate and has not been reviewed by the City, the District or the Underwriter.
Financing Plan
To date, Pulte has financed its land acquisition and various site development costs related to its property in the District through internally generated funds. Pulte expects to use internal funding (which may include home sales revenues from its project w ithin the District) to complete its development activities within the District. However, home sales revenues from Pulte’s activities in the District are not segregated and set aside for completing the homes in the District. Notwithstanding the foregoing, Pulte believes that it will have sufficient funds to complete its construction and sale of homes in the District.
Item Title: 12.1
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Through February 28, 2026, Pulte has expended approximately $86.6 million on land acquisition costs, site development costs, homebuilding costs, permits and impact fees, and marketing and sales costs (exclusive of internal financing repayment, corporate overhead and other carry costs) related to its development in the District. Pulte expects to incur approximately $5.5 million on remaining site development costs, and approximately $17.6 million on remaining homebuilding costs, permits and impact fees, and marketing and sales costs (exclusive of internal financing repayment, corporate overhead and other carry costs) between March 1, 2026 and full build-out of the homes proposed to be constructed in the District.
Although Pulte expects to have sufficient funds available to complete its development in the District as described in this Official Statement, there can be no assurance that amounts necessary to finance the remaining development costs will be available to Pulte Pulte nor any other entity or person is under any legal obligation of any kind to expend funds for the development of and construction of homes on its property in the District. Any contributions by Pulte or the Parent Entity to fund the costs of such development are entirely voluntary.
If and to the extent that internal funding, including but not limited to home sales revenues, are inadequate to pay the costs to complete the planned development by Pulte within the District and other financing is not put into place, there could be a shor tfall in the funds required to complete the planned development by Pulte in the District.
Although the information in this Official Statement reflects the current development expectations of Pulte, no assurance can be given that home construction and sales will be carried out on the schedule and according to the plans described herein, or that the home construction and sale plans or base prices set forth herein will not change after the date of this Official Statement. Pulte reserves the right to change its development at any time without notice. Additionally, homes under contract to be sold m ay not result in closed escrows as sales contracts are subject to cancellation. See “SPECIAL RISK FACTORS – Concentration of Property Ownership.”
SPECIAL RISK FACTORS
The Bonds have not been rated by any rating agency, and the purchase of the Bonds involves significant risks that are not appropriate for certain investors. The following is a discussion of certain risk factors which should be considered, in addition to other matters set forth herein, in evaluating the investment quality of the Bonds. This discussion does not purport to be comprehensive or definitive and does not purport to be a complete statement of all factors which may be considered as risks in evaluat ing the credit quality of the Bonds. The occurrence of one or more of the events discussed herein could adversely affect the ability or willingness of property owners in the District to pay their Special Taxes when due. Such failures to pay Special Taxes could result in the inability of the District to make full and punctual payments of debt service on the Bonds. In addition, the occurrence of one or more of the events discussed herein could adversely affect the value of the property in the District. See “— Property Values” below.
Risks of Real Estate Secured Investments Generally
The Bond Owners will be subject to the risks generally incident to an investment secured by real estate, including, without limitation: (i) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of the District, the supply of or demand for competitive properties in such area, and the market value of residential property or buildings and/or sites in the event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, governmental rules (including, without limitation, zoning laws and laws relating to endangered species and hazardous materials) and fiscal policies; (iii) natural disasters (including, without limitation, earthquakes, wildfires and floods), which may resul t in uninsured losses; (iv) adverse changes in local market conditions; and (v) increased delinquencies due to rising mortgage costs and other factors.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 53
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No assurance can be given that the property owners within the District will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See the caption “ — Enforcement Delays — Bankruptcy” for a discussion of cert ain limitations on the District’s ability to pursue judicial proceedings with respect to delinquent parcels.
Insufficiency of Special Tax Revenues
As discussed below, the Special Taxes may not produce revenues sufficient to pay the debt service on the Bonds due to nonpayment of the amounts levied.
In order to pay debt service on the Bonds, it is generally necessary that the Special Taxes be paid in a timely manner. Should the Special Taxes not be paid on time, the District has established a Reserve Account under the Indenture to be maintained in an amount equal to the Reserve Requirement to pay debt service on the Bonds to the extent other funds are not available. See “SOURCES OF PAYMENT FOR THE BONDS — Reserve Account of the Special Tax Fund.” The District will covenant in the Indenture to maintain in the Reserve Account an amount equal to the Reserve Requirement, subject, however, to the availability of Net Taxes in amounts sufficient to do so and to the limitation that the District may not levy the Special Tax in any Fiscal Year at a rate in excess of the maximum amounts permitted under the Rate and Method. See Appendix A and Appendix E hereto. As a result, if a significant number of Special Tax delinquencies occurs within the District, the District could be unable to replenish the Reserve Account to the Reserve Requirement due to the limitations on the amount of the Special Tax that may be levied. If such defaults were to continue in successive years, the Reserve Account could be depleted and a default on the Bonds could occur.
The Act provides that, if any property within the District not otherwise exempt from the Special Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax will continue to be levied on and enforceable against the public entity that acquired the property. In addition, the Act provides that, if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment and be paid from the eminent domain award. The constitutionality and operation of these provisions of the Act have not been tested in the courts, but it is doubtful that they would be upheld as to, for example, property owned by the federal government. If for any reason property within the District becomes exempt from taxation by reason of ownership by a non-taxable entity such as the federal government or another public agency, subject to the limitation of the Maximum Special Tax, the Special Tax will be reallocated to the remaining taxable parcels within the District. This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon the ir willingness and/or ability to pay the Special Tax. Moreover, if a substantial portion of additional land within the District became exempt from the Special Tax because of public ownership, or otherwise, the Maximum Special Tax which could be levied upo n the remaining acreage might not be sufficient to pay principal of and interest on the Bonds when due and a default will occur with respect to the payment of such principal and interest.
The District will covenant in the Indenture that, under certain circumstances, it will institute foreclosure proceedings to sell any property with delinquent Special Taxes in order to obtain funds to pay debt service on the Bonds. If foreclosure proceedings were ever instituted, any mortgage or deed of trust holder could, but would not be required to, advance the amount of the delinquent Special Tax to protect its security interest. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales ” for provisions which apply in the event of such foreclosure and which the District is required to follow in the event of delinquencies in the payment of the Special Tax.
In the event that sales or foreclosures of property are necessary, there could be a delay in payments to Owners of the Bonds (if the Reserve Account has been depleted) pending such sales or the prosecution of such foreclosure proceedings and receipt by the City on behalf of the District of the proceeds of sale. The District may adjust the future Special Tax levied on taxable parcels in the District, subject to limitations described above under the caption “THE DISTRICT — Rate and Method of Apportionment,” to provide an amount required to Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 54
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pay interest on and principal of the Bonds, and the amount, if any, necessary to replenish the Reserve Account to an amount equal to the Reserve Requirement, and to pay all current expenses. There is, however, no assurance that the total amount of the Special Tax that could be levied and collected against taxable parcels in the District will be at all times sufficient to pay the amounts required to be paid by the Indenture, even if the Special Tax is levied at the Maximum Special Tax rates. See “— Enforcement Delays — Bankruptcy.” No assurance can be given that the real property subject to sale or foreclosure will be sold, or if sold, that the proceeds of sale will be sufficient to pay any delinquent installments of the Special Tax. The Act does not require the City to purchase or otherwise acquire any lot or parcel of property to be sold at foreclosure if there is no other purchaser at such sale. The Act and the Indenture do specify that the Special Tax will have the same lien priority as for ad valorem property taxes in the case of delinquency. Section 53356.6 of the Act requires that property sold pursuant to foreclosure under the Act be sold for not less than the amount of judgment in the foreclosure action, plus post judgment interest and authorized costs, unless the consent of the owners of 75% of the Outstanding Bonds and any Parity Bonds is obtained.
Prior to July 1, 1983, the right of redemption from foreclosure sales was limited to a period of one year from the date of sale. Under legislation effective July 1, 1983, the statutory right of redemption from such foreclosure sales has been repealed. However, a period of 20 days must elapse after the date on which the notice of levy of the interest in real property was served on the judgment debtor before the sale of such lot or parcel can be made. Furthermore, if the purchaser at the sale is the judgment creditor (e.g., the District), an action may be commenced by the delinquent property owner within 90 days after the date of sale to set aside such sale. The constitutionality of the aforementioned legislation, which repeals the one year redemption period, has not been tested and there can be no assurance that, if tested, such legislation will be upheld. (Section 701.680 of the Code of Civil Procedure of the State.)
Impact of Economic Conditions on the Development in the District Certain events and factors which negatively affect the regional, State and national economies could have an adverse effect on the pace at which the current or any future developers in the District can complete the remaining infrastructure and future homes, and demand by, and the ability of individuals to purchase homes within the District. Such events and factors could include rising inflation and interest rates, persistent supply chain issues and global market instability caused by geopolitical events. Any adverse impact of the foregoing and other economic factors on the projects in the District and the real estate market in general cannot be predicted.
Increasing Mortgage Interest Rates
Since approximately November 2021, interest rates for mortgage loans have increased significantly.
Increases in mortgage interest rates could have a negative impact on the estimated absorption rates of the planned for-sale residential units in the District described herein. With respect to entry -level households, increased mortgage interest rates may adversely impact the affordability of homes and may increase mortgage payment levels for owning a lower-priced home relative to renting a residence, thereby making purchasing less attractive.
With respect to move -up households, higher mortgage interest rates may impact the desire of current homeowners to move from their present home due to the fact that their present home likely has a relatively low mortgage interest rate. In addition, in such instances, a new home would likely have a higher interest rate on a new mortgage loan as well as a higher purchase price and property taxes. Such considerations may decrease the desire for move-up households to purchase a new home. The foregoing factors could reduce demand for and/or the ability to achieve the sales prices of the planned for-sale homes within the District as described herein.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 55
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Concentration of Ownership
Based on development and ownership status as of February 16, 2026, (and assuming no further development activity and transfer of ownership), individual homeowners and Pulte would be responsible for approximately 62.20% and 37.80%, respectively, of the projected Fiscal Year 2026-27 Special Tax levy.
The timely payment of principal of and interest on the Bonds depends upon the willingness and ability of the current and future property owners in the District to pay the Special Taxes prior to delinquency. General and local economic conditions and governmental requirements or restrictions may affect the willingness of the current property owners, or any successor property owners, to pay the Special Taxes, and there is no assurance that the current property owners, or any successor property owners, will pa y such Special Taxes even if financially able to do so. Due to the concentration of ownership of the property within the District, a failure by Pulte or any successor property owner thereto to pay the Special Taxes may result in a default in the payment of debt service on the Bonds. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” Property Values
The value of the property within the District is a critical factor in determining the investment quality of the Bonds. If a property owner is delinquent in the payment of Special Taxes, the District’s only remedy is to commence foreclosure proceedings against the delinquent parcel in an attempt to obtain funds to pay the Special Taxes. Reductions in property values due to a downturn in the economy, physical events such as earthquakes, fires or floods, stricter land use regulations, delays in development or other events will adversely impact the security underlying the Special Taxes. See “THE DISTRICT — Appraisal Report” and Appendix D — “APPRAISAL REPORT.”
The Appraiser has estimated, on the basis of certain assumptions and limiting conditions contained in the Appraisal Report, that as of the Date of Value, the market value of the land and improvements within the District was approximately $ 81,804,327. See “THE DISTRICT — Appraisal Report” The Appraisal Report indicates the Appraiser’s opinion as to the market value of the properties referred to therein as of the date and under the conditions specified therein. The Appraiser’s opinion reflects conditions prevailing in the applicable market as of the Date of Value. The Appraiser’s opinion does not predict the future value of the subject property, and there can be no assurance that market conditions will not change adversely in the future.
Prospective purchasers of the Bonds should not assume that the taxable land within the District could be sold for the appraised amount or for the assessed values at a foreclosure sale for delinquent Special Taxes. In arriving at the estimate of market value of the property in the District, the Appraiser assumes that any sale will be unaffected by undue stimulus and will occur following a reasonable marketing period, which is not always present in a foreclosure sale. See Appendix D for a description of other assumptions made by the Appraiser and for the definitions and limiting conditions used by the Appraiser. Any event which causes one of the Appraiser’s assumptions to be untrue could result in a reduction of the value of the taxable land and improvement s within the District from the market value estimated by the Appraiser.
No assurance can be given that any bid will be received for a parcel with delinquent Special Taxes offered for sale at foreclosure or, if a bid is received, that such bid will be sufficient to pay all delinquent Special Taxes. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.”
Natural Disasters
The District, like all California communities, may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. Southern California is a seismically active area. Seismic activity represents a potential risk for damage to buildi ngs, roads, bridges and property within the District. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event. The property Item Title: 12.1
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within the District is not located in an Alquist-Priolo Earthquake Study Zone and is not located within one-half mile of an active earthquake fault. Additionally, the District is located in Flood Hazard Zone X which is classified as a minimal flood hazard.
In recent years, wildfires have caused extensive damage throughout the State, including within the County. Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes. In some instances entire neighborhoods have been destroyed. Several fires in recent years damaged or destroyed property in areas that were not previously considered to be at risk from such events.
The District is located in an area which the Department of Forestry and Fire Protection of the State of California has designated as a very high fire hazard severity zone. There is a risk of residential property within the District being destroyed by wildfires and no assurance can be given as to the severity or frequency of wildfires within the vicinity of the District. Additionally, property located adjacent to burn areas c an be subject to mudslides and flooding, which can cause significant damage and destruction to property.
In the event of a severe earthquake, fire, flood or other natural disaster, there may be significant damage to both property and infrastructure in the District. As a result, a substantial portion of the property owners may be unable or unwilling to pay the Special Taxes when due. In addition, the value of land in the District could be diminished in the aftermath of such a natural disaster, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Special Taxes.
Hazardous Substances
While government taxes, assessments and charges are a common claim against the value of a parcel, other less common claims may also be relevant. One of the most serious in terms of the potential reduction in the value of a parcel is a claim with regard to a hazardous substance. In general, the owners and operators of a parcel may be required by law to remedy conditions relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and L iability Act of 1980, sometimes referred to as “CERCLA” or the “Super Fund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar in effect. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of a parcel whether or not the owner (or operator) had anything to do with creating or handling the hazardous substance.
The effect, therefore, should any of the parc els within the District be affected by a hazardous substance, is to reduce the marketability and value by the costs of remedying the condition.
The District is not aware of the presence of any federally or state classified hazardous substances in violation of any environmental laws, located on the property within the District. However, it is possible that such materials do currently exist and that the District is not aware of them.
It is possible that property in the District may be liable for hazardous substances in the future as a result of the existence, currently, of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or the existence, currently, on the property of a substance not presently classified as hazardous but which may in the future be so classified. Additionally, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling such substance.
All of these possibilities could have the effect of reducing the value of the applicable property.
Enforcement Delays – Bankruptcy
In the event of a delinquency in the payment of the Special Taxes, the District is required to commence enforcement proceedings under the circumstances described under the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.” However, prosecution of such proceedings could be delayed due to crowded local court calendars or by bankruptcy, insolvency and other laws generally affecting creditors’ rights (such as the Soldiers’ and Sailors’ Relief Act of 1940) and by the law s of the State Item Title: 12.1
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relating to judicial and non-judicial foreclosure. Although bankruptcy proceedings would not cause the liens of the Special Taxes to become extinguished, bankruptcy of a person or entity with an interest in the applicable property could result in a delay in the enforcement proceedings because federal bankruptcy laws provide for an automatic stay of foreclosure and tax sale proceedings. Any such delay could increase the likelihood of delay or default in payment of the principal of and interest on the applicable Bonds. The various legal opinions to be delivered in connection with the issuance of the Bonds, including Bond Counsel’s approving legal opinion, are qualified as to the enforceability of the Bonds and the Indenture by reference to bankruptcy, reorganization, moratorium, insolvency and other laws affecting the rights of creditors generally or against public entities such as the District.
Special Tax Delinquencies
Under provisions of the Act, the Special Taxes, from which funds necessary for the payment of principal of, and interest on, the Bonds are derived, will be billed to the properties within the District on the regular ad valorem property tax bills sent to ow ners of such properties by the County Tax Collector. The Act currently provides that such Special Tax installments are due and payable, and bear the same penalties and interest for non-payment, as do ad valorem property tax installments.
See APPENDIX E — “SUMMARY OF THE INDENTURE — COVENANTS AND WARRANTY — Covenants” for a discussion of the provisions which apply, and procedures which the District is obligated to follow under the Indenture, in the event of delinquencies in the payment of Special Taxes. See “— FDIC/Federal Government Interests in Parcels” for a discussion of the policy of the Federal Deposit Insurance Corporation regarding the payment of special taxes and assessment and limitations on the District’s ability to foreclose on the lien of the Special Taxes in certain circumstances.
FDIC/Federal Government Interests in Parcels
The ability of the District to collect interest and penalties specified by the Act and to foreclose the lien of delinquent Special Taxes may be limited in certain respects with regard to parcels in which the Federal Deposit Insurance Corporation (the “FDIC”), or other federal government entities such as Fannie Mae or Freddie Mac, has or obtains an interest.
In the case of the FDIC, in the event that any financial institution making a loan which is secured by parcels is taken over by the FDIC and the applicable Special Tax is not paid, the remedies available to the District may be constrained. The FDIC’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”) provides that taxes other than ad valorem taxes which are secured by a valid lien in effect before the FDIC acquired an interest in a property will be paid u nless the FDIC determines that abandonment of its interests is appropriate. The Policy Statement provides that the FDIC generally will not pay installments of non-ad valorem taxes which are levied after the time the FDIC acquires its fee interest, nor will the FDIC recognize the validity of any lien to secure payment except in certain cases where the Resolution Trust Corporation had an interest in property on or prior to Dece mber 31, 1995. Moreover, the Policy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, the FDIC will not permit its lien to be foreclosed out by a taxing authority without its specific consent, nor will the FDIC pay or recognize liens for any penalties, fines or similar claims imposed for the nonpayment of taxes.
The FDIC has taken a position similar to that expressed in the Policy Statement in legal proceedings brought against Orange County in United States Bankruptcy Court and in Federal District Court. The Bankruptcy Court issued a ruling in favor of the FDIC on certain of such claims. Orange County appealed that ruling, and the FDIC cross-appealed. On August 28, 2001, the Ninth Circuit Court of Appeals issued a ruling favorable to the FDIC except with respect to the payment of pre -receivership liens based upo n delinquent property tax.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 58
Menifee Mayor and City Council
April 15, 2026
Page
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The District is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency with respect to parcels in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed out at a judicial foreclosure sale would prevent or delay the foreclosure sale.
In the case of Fannie Mae and Freddie Mac, in the event a parcel of taxable property is owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, or a private deed of trust secured by a parcel of taxable property is owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, the ability to foreclose on the parcel or to collect delinquent Special Taxes may be limited. Federal courts have held that, based on the supremacy clause of the United States Constitution “this Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be th e supreme Law of the Land; and the Judges in every State shall be bound thereby, anything in the Constitution or Laws of any State to the contrary notwithstanding.” In the absence of Congressional intent to the contrary, a state or local agency cannot for eclose to collect delinquent taxes or assessments if foreclosure would impair the federal government interest. This means that, unless Congress has otherwise provided, if a federal government entity owns a parcel of taxable property but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.
Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the District wishes to foreclose on the parcel as a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government’s mortgage interest. For a discussion of risks associated with taxable parcels within the Distric t becoming owned by the federal government, federal government entities or federal government sponsored entities, see “ —Insufficiency of Special Tax Revenues.”
The District’s remedies may also be limited in the case of delinquent Special Taxes with respect to parcels in which other federal agencies (such as the Internal Revenue Service and the Drug Enforcement Administration) have or obtain an interest.
Direct and Overlapping Indebtedness
The ability of an owner of property within the District to pay the applicable Special Taxes could be affected by the existence of other taxes and assessments imposed upon taxable parcels. See “THE DISTRICT — Direct and Overlapping Debt” herein. The City and other public agencies whose boundaries overlap those of the District could impose additional taxes or assessment liens on the property within the District in order to finance public improvements or services to be located or provided inside of or outside of such area. The lien created on the property within the District through the levy of such additional taxes may be on a parity with the lien of the Special Taxes applicable to the property within the District.
The imposition of additional liens on a parity with the Special Taxes may reduce the ability or willingness of property owners to pay the Special Taxes and increase the possibility that foreclosure proceeds will not be adequate to pay delinquent Special Taxes. The District currently expects that Pulte will request the issuance of Parity Bonds to finance additional Project Costs in Fiscal Year 202 6-27. If issued, the District expects such Parity Bonds to be sized so that Special Tax revenues, assuming a levy on all 182 parcels planned for residential development within the District at buildout, will generate in each Fiscal Year not less than 110% of debt service payable with respect to the Bonds and such Parity Bonds in the calendar year that begins in that Fiscal Year, plus the Administrative Expenses Cap.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 59
Menifee Mayor and City Council
April 15, 2026
Page
652 of 909
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Payment of Special Taxes is not a Personal Obligation of the Property Owners An owner of a taxable parcel is not personally obligated to pay Special Taxes. Rather, Special Taxes are an obligation which is secured only by a lien against the taxable parcel. If the value of a taxable parcel is not sufficient, taking into account other liens imposed by public agencies, to secure fully Special Taxes, the District has no recourse against the property owner.
No Acceleration Provision
The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the terms of the Bonds or the Indenture.
Limited Obligations
The Bonds and interest thereon are not payable from the general funds of the City. Except with respect to the Net Taxes, neither the credit nor the taxing power of the District or the City is pledged for the payment of the Bonds or the interest thereon, and, except as provided in the Indenture, no Owner of the Bonds may compel the exercise of any taxing power by the District or the City or force the forfeiture of any City or District property.
The principal of, premium, if any, and interest on the Bonds a re not a debt of the City or a legal or equitable pledge, charge, lien or encumbrance upon any of the City’s or the District’s property or upon any of the City’s or the District’s income, receipts or revenues, except the Net Taxes and other amounts pledged under the Indenture.
The District’s legal obligations with respect to any delinquent Special Taxes are limited to: (i) payments from the Reserve Account to the extent of funds on deposit therein; and (ii) the institution of judicial foreclosure proceedings under certain circumstances with respect to any parcels for which Special Taxes are delinquent. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.” The Bonds cannot be accelerated in the event of any default.
The obligation to pay Special Taxes does not constitute a personal obligation of the current or subsequent owners of the respective parcels which are subject to such liens. See the caption “— Payment of the Special Tax is Not a Personal Obligation of the Property Owners.” Enforcement of Special Tax payment obligations by the District is limited to judicial foreclosure in the Superior Court of California, County of Riverside. There is no assurance that any current or subsequent owner of a parcel subject to a Special Tax lien will be able to pay the amounts due or that such owner will choose to pay such amounts even though financially able to do so.
Failure by owners of the parcels to pay Special Tax installments when due, delay in foreclosure proceedings, or the inability of the District to sell parcels that have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of Special Taxes levied against such parcels may result in the inability of the District to make full or timely payments of debt service on the Bonds, which may in turn result in the depletion of the Reserve Account. See the caption “— Enforcement Delays — Bankruptcy.” Ballot Initiatives
Articles XIII A, XIII B, XIII C, and XIII D of the California Constitution were adopted pursuant to measures qualified for the ballot pursuant to the State’s constitutional initiative process. From time to time, other initiative measures could be adopted by California voters. The adoption of any such initiative might place limitations on the ability of the State, the City, or other local agencies to increase revenues or to increase appropriations.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 60
Menifee Mayor and City Council
April 15, 2026
Page
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Proposition 218
An initiative measure entitled “The Right to Vote on Taxes Act” (“Proposition 218”) was approved by the voters at the November 5, 1996 statewide general election. Among other things, Proposition 218 added a new Article XIII C to the California Constitution which states that “. . . the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.” The Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the rate and method of apportionment of an existing special tax. However, the Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislative body determines that the reduction or termination of the special tax would not interfere with the timely retirement of that debt. While the application of Proposition 218 in this context has not yet been interpreted by the courts and the matter is not completely free from doubt, it is not likely that Proposition 218 has conferred on the voters the power to effect a repeal or reduction of the Special Tax if the result thereof would be to impair the security of the Bonds.
It may be possible, however, for voters or the City Council, acting as the legislative body of the District, to reduce the Special Taxes in a manner which does not interfere with the timely repayment of the Bonds, but which does reduce the maximum amount of Special Taxes that may be levied in any year below the existing levels. Therefore, no assurance can be given with respect to the future levy of Special Taxes in amounts greater than the amount necessary for the timely retirement of the Bonds. Nevertheless, to the maximum extent that the law permits it to do so, the District will covenant that it will not initiate proceedings under the Act to reduce the maximum Special Tax rates for the District, unless, in connection therewith, the District receives a c ertificate from one or more Independent Financial Consultants which, when taken together, certify that: (i) such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the District to an amount which is less than the Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such proposed reduction; and (ii) the District is not delinquent in the payment of the principal of or interest on the Bonds or any Parity Bonds. The District also will covenant that, in the event an initiative is adopted which purports to reduce or otherwise alter the Rate and Method, it will commence and pursue legal action in order to preserve its ability to comply with the foregoing covenant. However, no assurance can be given as to the enforceability of the foregoing covenants.
Litigation with Respect to Community Facilities Districts Shapiro. The California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in City of San Diego v. Melvin Shapiro (2014) 228 Cal.App.4th 756 (the “San Diego Decision”). The case involved a Convention Center Facilities District (the “CCFD”) established by the City of San Diego (“San Diego”). The CCFD is a financing district much like a community facilities district e stablished under the provisions of the Act. The CCFD is comprised of all of the real property in San Diego. However, the special tax to be levied within the CCFD was to be levied only on hotel properties located within the CCFD.
The election authorizing the special tax was limited to owners of hotel properties and lessees of real property owned by a governmental entity on which a hotel is located. Thus, the election was not a registered voter election. Such approach to determini ng who would constitute the qualified electors of the CCFD was modeled after Section 53326(c) of the Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed district whose property would be subject to the special tax. The Court held that the CCFD special tax election was invalid under the California Constitution because Article XIIIA, Section 4 thereof and Article XIIIC, Section 2 thereof require that the electors in such an election be the registered voters within the district.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 61
Menifee Mayor and City Council
April 15, 2026
Page
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Horizon. The Sacramento County Superior Court issued a ruling in Horizon Capital Investments, LLC v. City of Sacramento et al. (Case No. 34-2017-80002661), which was a case involving an election to approve the levy of a special tax within a community facilities district (“CFD”) formed under the Act.
In 2017, the City of Sacramento initiated proceedings to form a CFD to finance certain costs to operate and maintain a streetcar line. As permitted by the Act, the proposed district included non-contiguous parcels of non-residential property. Because there were fewer than 12 registered voters residing within the territory of the proposed CFD, the City Council submitted the special tax proposed to be levied within the proposed CFD to the owners of land within the proposed CFD, as required by the Act. The proposed special tax received the requisite two-thirds vote in the landowner election.
Petitioners Horizon Capital Investments, LLC et al. filed a writ of mandate and complaint for reverse validation and declaratory relief. Petitioners argued, and the superior court agreed in its final ruling, that under section 4(a) of article XIII A of the California Constitution (which provides that “Cities, Counties and special districts, by a two -thirds vote of the qualified electors of such district [sic], may impose special taxes on such district…”) the phrase “qualified electors” means the registered voters of the entire City of Sacramento and not just the owners of the property within the boundaries of the proposed CFD. Citing the San Diego Decision, the tentative ruling states that the phrase “qualified electors of the district” refers to the registered voters of the entity imposing the special tax, which in this case was the City of Sacramento. Because the vote within the proposed CFD was by landowners only and not by all registered voters in the City of Sacramento, the final ruling states that the special tax is invalid.
The superior court’s final ruling is not binding upon other courts within the State and does not directly apply to the District, the Special Taxes, or the Bonds. The City of Sacramento did not appeal the superior court’s ruling.
The Special Tax Election in the District. With respect to the San Diego Decision, the facts of such case show that there were thousands of registered voters within the CCFD ( viz., all of the registered voters in San Diego). The election held in the District had less than 12 registered voters at the time of the election to authorize the Special Taxes. In the San Diego Decision, the court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the court’s holding in the San Diego Decision does not apply to the Special Tax election in the District. Moreover, Section 53341 of the Act provides that any “action or proceeding to attack, review, set aside, void or annul the levy of a special tax…shall be commenced within 30 days after the special tax is approved by the voters.” Similarly, Section 53359 of the Act provides that any action to determine the validity of bonds issued pursuant to the Act be brought within 30 days of the voters approving the issuance of such bonds. The petitioners in Horizon filed the writ of mandate within 30 days of the landowner election.
Voters in the District approved Special Tax on August 7, 2024. Based on Sections 53341 and 53359 of the Act and analysis of existing laws, regulations, rulings and court decisions, the District believes that no successful challenge to the Special Tax being levied in accordance with the Rate and Method may now be brought. In connection with the issuance of the Bonds, Bond Counsel expects to deliver its opinion in the proposed form attached hereto as Appendix C.
Loss of Tax Exemption
As discussed under the heading “TAX MATTERS,” interest on the Bonds could cease to be excluded from gross income for purposes of federal income taxation, retroactive to the date the Bonds were issued, as a result of future acts or omissions of the District or the City. In addition, it is possible that future changes in applicable federal tax laws could cause interest on the Bonds to be included in gross income for federal income taxation or could otherwise reduce the equivalent taxable yield of such interest and thereby reduce the value of the Bonds.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 62
Menifee Mayor and City Council
April 15, 2026
Page
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No Ratings – Limited Secondary Market
The District has not applied to have the Bonds rated by any nationally recognized bond rating company, and it does not expect to do so in the future.
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Although the District has committed to provide certain financial and operating information on an annual basis, there can be no assurance that such information will be available to Bond owners on a timely basis. The failure to provide the required annual financial information does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions, lack of current information, the absence of a credit rating for the Bonds or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.
Limitations on Remedies
Remedies available to the Owners of the Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Bonds or to preserve the tax-exempt status of interest on the Bonds.
Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the Indenture to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or other similar laws affecting generally the enforcement of creditor’s rights, by equitable principles and by the exercise of judicial discretion and by limitations on remedies against public agencies in the State of California. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the Owners.
Potential Early Redemption of Bonds from Prepayments or Community Facilities District Bond Proceeds
Property owners within the District are permitted to prepay their Special Taxes at any time. Such prepayments could also be made from the proceeds of bonds issued by or on behalf of an overlapping community facilities district. Such prepayments will result in a redemption of the Bonds on the Interest Payment Date for which timely notice may be given under the Indenture following the receipt of the prepayment. The resulting redemption of Bonds that were purchased at a price greater than par could reduce t he otherwise expected yield on such Bonds. See the caption “THE BONDS — Redemption — Special Mandatory Redemption from Special Tax Prepayments.”
Cybersecurity
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct their operations. The City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the efforts of the City to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City, or the a dministration of the Bonds. The City is also reliant on other entities and service providers in connection with the administration of the Bonds, including without limitation, the County tax collector for the levy and collection of Special Taxes and the Tr ustee. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the levy and collection of Special Taxes or the payment of debt service on the Bonds.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 63
Menifee Mayor and City Council
April 15, 2026
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CONTINUING DISCLOSURE
District Continuing Disclosure
Pursuant to a Continuing Disclosure Certificate, dated as of May 1, 2026 (the “Disclosure Certificate”), to be executed and delivered by the District at the time of issuance of the Bonds, the District will covenant for the benefit of the holders and Beneficial Owners of the Bonds to provide certain financial information and operating data relating to the District by March 1 following the end of the District’s Fiscal Year (currently its Fiscal Year ends on June 30) (the “Annual Report”), commencing with the Annual Report for the Fiscal Year ending June 30, 2026, and to provide notices of the occurrence of certain enumerated events. The Annual Report and the notices of enumerated events will be filed by the District with EMMA. The specific nature of the information to be contained in the Annual Report and the notice of enumerated events is set forth in Appendix F — “FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Underwriter in complying with subsection (b)(5) of Rule 15c2-12.
The District has not had any continuing disclosure undertakings outstanding during the previous five - year period. The City has retained Spicer Consulting Group, LLC to serve as Dissemination Agent for the continuing disclosure undertaking related to the Bonds, and has adopted policies and procedures with respect to its continuing disclosure practices.
Developer Continuing Disclosure
The Underwriter does not consider Pulte to be an “obligated person” with respect to the Bonds for purposes of the Rule. Notwithstanding the foregoing, to provide updated information with respect to the development within the District, Pulte will execute a continuing disclosure certificate (the “Developer Continuing Disclosure Certificate”) pursuant to which it will covenant to provide semiannual reports until satisfaction of certain conditions set forth in the Developer Continuing Disclosure Certificate. The semiannual reports to be provided by Pulte will contain updates regarding the development within the District as outlined in Section 4 of the Developer Continuing Disclosure Certificate attached hereto as APPENDIX G. In addition to its semiannual reports, Pulte will agree to provide notices of certain events set forth in the Developer Continuing Disclosure Certificate.
Pulte’s obligations under the Developer Continuing Disclosure Certificate will terminate upon the earliest to occur of: (a) the legal defeasance, prior redemption or payment in full of all the Bonds; or (b) at such time as [146] or more homes within the District have been conveyed to individual homeowners.
Pulte has represented to the District and the Underwriter that, based on a review of prior continuing disclosure undertakings, except as described below, Pulte has not failed to comply in any material respect with any previous undertaking by it to provide periodic continuing disclosure reports or notices of listed events with respect to community facilities district or assessment district financings in southern California within the past five years. However, the Northern California Division of Pulte failed to file its first periodic report due December 15, 2021 with respect to the $21,920,000 City of Alameda Community Facilities District No. 13-1 (Alameda Landing Public Improvements, 2021 Special Tax Subordinate Bonds), which the Developer subsequently filed on June 15, 2022.
TAX MATTERS
In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California (“Bond Counsel”), under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals.
However, it should be noted that for tax years beginning after December 31, 2022, with respect to applicable Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 64
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April 15, 2026
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corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), generally certain corporations with more than $1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed by Section 55 of the Code on such corporations. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax.
In the opinion of Bond Counsel, the difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity of such Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Beneficial Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Beneficial Owner will increase the Beneficial Owner’s basis in the applicable Bond.
Bond Counsel’s opinion as to the exclusion from gross income of interest (and original issue discount) on the Bonds is based upon certain representations of fact and certifications made by the District, the City and others and is subject to the condition that the District, the City and others making such representations comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds to assure that interest (and original issue discount) on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause the interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The District and the City will covenant to comply with all such requirements.
The amount by which a Beneficial Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Bond premium, which must be amortized under Section 171 of the Code; such amortizable Bond premium reduces the Beneficial Owner’s basis in the applicable Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in a Beneficial Owner realizing a taxable gain when a Bond is sold by the Beneficial Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Beneficial Owner. Purchasers of the Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable Bond premium.
The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing of tax- exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of other similar bonds). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation thereof) subsequent to the issuance of the Bonds to the extent that it adversely affects the exclusion from gross income of interest (and original issue discount) on the Bonds or their market value.
SUBSEQUENT TO THE ISSUANCE OF THE BONDS THERE MIGHT BE FEDERAL, STATE, OR
LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY CHANGES TO OR
INTERPRETATIONS OF FEDERAL, STATE, OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE,
OR LOCAL TAX TREATMENT OF THE BONDS INCLUDING THE IMPOSITION OF ADDITIONAL
FEDERAL INCOME OR STATE TAXES BEING IMPOSED ON OWNERS OF TAX-EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE BONDS. THESE CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE BONDS. NO ASSURANCE CAN BE GIVEN THAT
SUBSEQUENT TO THE ISSUANCE OF THE BONDS STATUTORY CHANGES WILL NOT BE
INTRODUCED OR ENACTED OR JUDICIAL OR REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE BONDS,
ALL POTENTIAL PURCHASE RS SHOULD CONSULT THEIR TAX ADVISORS REGARDING Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 65
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April 15, 2026
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POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE BONDS.
Bond Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture and the Tax Certificate relating to the Bonds permit certain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the effect on the exclusion from gross income of interest (and original issue discount) on the Bonds for federal income tax purposes with respect to any Bond if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca Carlson & Rauth LLP.
Although Bond Counsel will render an opinion that interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes provided that the District and the City continue to comply with certain requirements of the Code, the ownership of the Bonds and the accrual or receipt of interest (and original issue discount) with respect to the Bonds may otherwise affect the tax liability of certain persons.
Bond Counsel expresses no opinion regarding any such tax consequences. Accordingly, before purchasing any of the Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the Bonds.
Should interest on the Bonds (including any original issue discount) become includable in gross income for federal income tax purposes, the Bonds are not subject to early redemption and will remain outstanding until maturity or until redeemed in accordance with the Indenture.
A copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix C.
LEGAL OPINION
The legal opinion of Bond Counsel approving the validity of the Bonds, in substantially the form set forth as Appendix C hereto, will be made available to purchasers of the Bonds at the time of original delivery of the Bonds. Certain legal matters will be passed upon for the City and the District by Rutan & Tucker, LLP, Irvine, California, City Attorney, and for the District by Stradling Yocca Carlson & Rauth LLP, Disclosure Counsel, for the Underwriter by Kutak Rock LLP, Irvine, California, and for the Tr ustee by its counsel. Bond Counsel undertakes no responsibility to the purchasers of the Bonds for the accuracy, completeness or fairness of this Official Statement.
ABSENCE OF LITIGATION
In connection with the issuance of the Bonds, the City Attorney will deliver an opinion to the effect that, to their actual knowledge, after due inquiry and investigation, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body, pending or threatened, or any unfavorable decision, ruling or finding, against or affecting the District, which would adversely impact the District’s ability to complete the transactions described in, or contemplated by, the Indenture or this Official Statement, restrain or enjoin the collection of the Special Taxes, or in any way contest or affect the validity of the Bonds, the Indenture, the Special Taxes, or the transactions described herein.
NO RATING
The District has not made, and does not contemplate making, an application to any rating organization for the assignment of a rating on the Bonds.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 66
Menifee Mayor and City Council
April 15, 2026
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UNDERWRITING
The Bonds are being purchased by Raymond James & Associates, Inc. (the “Underwriter”). The Underwriter has agreed to purchase the Bonds at a price of $________ (being the $________ aggregate principal amount of the Bonds, less an Underwriter’s discount of $________, plus original issue premium of ________).
The Bond Purchase Agreement relating to the Bonds provides that the Underwriter will purchase all of the Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the Bond Purchase Agreement, the approval of certain legal matters by counsel and certain other conditions.
The Underwriter’s compensation is contingent upon the successful issuance of the Bonds.
Under certain circumstances, the Underwriter may offer and sell the Bonds to certain dealers and others at prices lower or yields higher than those stated on the page immediately following the cover page of this Official Statement. The offering prices may be changed from time to time by the Underwriter.
FINANCIAL INTERESTS
The fees being paid to the Underwriter and its counsel, Bond Counsel, Disclosure Counsel and the Trustee are contingent upon the issuance and delivery of the Bonds. From time to time, Stradling Yocca Carlson & Rauth LLP, represents the Underwriter on matters unrelated to the Bonds.
MUNICIPAL ADVISOR
The District has retained Urban Futures, Inc., Walnut Creek, California, as Municipal Advisor for the sale of the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.
Urban Futures, Inc., is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities.
MISCELLANEOUS
So far as any statements made in this Official Statement involve matters of opinion, assumptions, projections, anticipated events or estimates, whether or not expressly stated, they are set forth as such and not as presentations of fact, and actual results may differ substantially from those set forth therein. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the Owners of the Bonds.
The summaries of certain provisions of the Bonds, statutes and other documents or agreements referred to in this Official Statement do not purport to be complete, and reference is made to each of them for a complete statement of their provisions. Copies are available for review by making requests to the City.
The execution and delivery of this Official Statement by the City Manager of the City has been duly authorized by the City Council of the City acting in its capacity as the legislative body of the District.
COMMUNITY FACILITIES DISTRICT NO. 2024 -1
(BANNER PARK II) OF THE CITY OF MENIFEE
By:
Armando G. Villa
City Manager of the City of Menifee
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 67
Menifee Mayor and City Council
April 15, 2026
Page
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APPENDIX A
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2024-1 (BANNER PARK II)
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. 2024-1 (Banner Park II) (“CFD No. 2024-1”). The amount of Special Tax to be levied in each Fiscal Year on an Assessor’s Parcel shall be determined by the City Council of the City of Menifee, acting in its capacity as the legislative body of CFD No. 2024-1, by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel 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 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. 2024- 1: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2024-1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2024-1 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2024-1 and any major property owner associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2024-1 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2024- 1 for any other administrative purposes of CFD No. 2024-1, including attorney’s fees and other costs related to commencing and pursuing to com pletion any foreclosure of delinquent Special Taxes.
“Approved Property” means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, (ii) that have an assigned Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 68
Menifee Mayor and City Council
April 15, 2026
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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 Special Tax of CFD No. 2024-1 have been pledged.
“Boundary Map” means a recorded map of the CFD which indicates the boundaries of the CFD. “Building Permit” means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “ Building Permit” may or may not include expired or cancelled building permits, or any subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator, provided that following such determination the Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses.
“Building Square Footage” or “BSF” means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, as determined by reference to the Building Permit for such Assessor’s Parcel.
“Calendar Year” means the period commencing January 1 of any year and ending the following December 31. “CFD Administrator” means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement, and providing for the levy and collection of the Special Taxes. “CFD” or “CFD No. 2024-1” means Community Facilities District No. 2024-1 (Banner Park II) established by the City under the Act.
“City” means the City of Menifee, State of California.
“City Council” means the City Council of the City of Menifee, acting as the legislative body of CFD No. 2024-1.
“Condominium Plan” means a condominium plan pursuant to California Civil Code, Section 1352. “County” means the County of Riverside, State of California.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 69
Menifee Mayor and City Council
April 15, 2026
Page
662 of 909
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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, and 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 (ii) a Building Permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied.
“Exempt Property” means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.
“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a Condominium Plan that creates individual lots for which Building Permits may be issued without further subdivision.
“Fiscal Year” means the period commencing on July 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. 2024-1 on such Assessor’s Parcel. “Multifamily Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing a building or buildings comprised of attached Residential Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the CFD Administrator.
“Non-Residential Property ” means all Assessor's Parcels of Developed Property for which a Building Permit(s) was issued for a non -residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non-Residential Property.
“Partial Prepayment Amount” means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2.
“Prepayment Amount ” means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.
“Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property or Provisional Undeveloped Property, as applicable. “Provisional Undeveloped Property” means all Assessor’s Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property be low the required minimum Acreage set forth in Section F.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 70
Menifee Mayor and City Council
April 15, 2026
Page
663 of 909
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“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 an Assessor’s Parcel classified as Single Family Res idential Property shall not be considered a Residential Unit for purposes of levying the Special Tax pursuant to Section E. “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. 2024- 1 pursuant to the Act to fund the Special Tax Requirement. “Special Tax Requirement “ means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to replenish any reserve funds established in association with the Bonds, (v) an amount up to any anticipated shortfall due to Special Tax delinquencies and (vi) for the c ollection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2024-1 or the payment of debt service on Bonds anticipated to be issued, provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps Two or Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture. “Taxable Property” means all Assessor’s Parcels within CFD No. 2024-1, which are not Exempt Property. “Taxable Unit” means either a Residential Unit or an Acre. “Trustee” means the trustee, fiscal agent, or paying agent under the Indenture. “Undeveloped Property” means all Assessor’s Parcels of Taxable Property which are not Developed Property, Approved Property, or Provisional Undeveloped Property.
B. SPECIAL TAX
Commencing Fiscal Year 2024-2025 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 2024-2025, each Assessor’s Parcel within CFD No. 2024-1 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Develop ed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property.
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 Pro perty. 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 Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 71
Menifee Mayor and City Council
April 15, 2026
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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 Developed Property classified as 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 as described below.
The Maximum Special Tax for each Assessor’s Parcel of Developed Property classified as Multifamily Property or 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 2024-2025 applicable to an Assessor's Pa rcel of Developed Property shall be determined pursuant to Table 1 below.
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2024-2025
Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit
1. Single Family Residential Property RU Less than 2,200 sq. ft $2,952.00
2. Single Family Residential Property RU 2,200 sq. ft to 2,400 sq. ft $3,029.00
3. Single Family Residential Property RU 2,401 sq. ft to 2,600 sq. ft $3,201.00
4. Single Family Residential Property RU 2,601 sq. ft to 2,800 sq. ft $3,216.00
5. Single Family Residential Property RU 2,801 sq. ft to 3,000 sq. ft $3,349.00
6. Single Family Residential Property RU 3,001 sq. ft to 3,200 sq. ft $3,567.00
7. Single Family Residential Property RU Greater than 3,200 sq. ft $3,699.00
8. Multifamily Property Acre N/A $21,187.00
9. Non-Residential Property Acre N/A $21,187.00
On each July 1, commencing July 1, 2025, the Assigned Special Tax for Developed Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 72
Menifee Mayor and City Council
April 15, 2026
Page
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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 or Approved Property expected to be classified as Single Family Residential Property shall calculated according to the following formula.
B = (U x A) / L
The terms above have the following meanings:
B = Backup Special Tax per Assessor’s Parcel classified as Single Family Residential Property or Approved Property expected to be classified as Single Family Residential Property within the Final Map.
U = Maximum Special Tax per Acre of Undeveloped Property per Section D.3 below.
A = Acreage of Single Family Residential Property expected to exist after build out in such Final Map at the time of calculation, as determined by the Administrator L = Number of Assessor’s Parcels of Single Family Residential Property expected to exist after build out in such Final Map at the time of calculation, as determined by the Administrator.
In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all Assessor’s Parcels within such changed or modified area shall be $21,187 per Acre.
Notwithstanding the foregoing, the Backup Special Tax for an Assessor’s Parcel of Developed Property for which a certificate of occupancy has been granted may not be revised.
In the event any superseding Final Map is recorded as a Final Map within the boundaries of the CFD, the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be $21,187 per Acre. The Backup Special Tax shall not apply to Multifamily Residential Property or Non-Residential Property.
On each July 1, commencing July 1, 2025, the Backup Special Tax shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
1. 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 $21,187 per Acre.
On each July 1, commencing July 1, 2025, 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.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 73
Menifee Mayor and City Council
April 15, 2026
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2. Undeveloped Property and Provisional Undeveloped Property The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property and Provisional Undeveloped Property shall be $21,187 per Acre.
On each July 1, commencing July 1, 2025, 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 2024-2025 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 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 applica ble to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.
Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax a pplicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.
Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax levy on each Assessor's Parcel of Developed Property for which the Maximum Special Tax is the Backup Special Tax shall be increased in equal percentages from the Assigned Special Tax up to 100% of the Backup Special Tax as needed to satisfy the Special Tax Requirement.
Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the first four steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.
Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal Year against any Assessor’s Parcel of Residential Property as a result of a delinquency in the payment of the Special Tax applicable to any other Assessor’s Parce l be increased by more than ten percent (10%) above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default.
F. EXEMPTIONS
The CFD Administrator 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 loca l 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 anything other than the purposes set forth in the easement, (v) Assessor’s Parcels Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 74
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April 15, 2026
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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 28.2 Acres.
Notwithstanding the above, the CFD Administrator shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 28.2 Acres. Assessor's Parcels which cannot be classified as Exemp t Property because such classification would reduce the Acreage of all Taxable Property to less than 28.2 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Taxes pursuant to Step Five in Section E.
G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
“CFD Facilities” means $10,250,000 expressed in 2024 dollars, which shall increase by the Construction Inflation Index on July 1, 2025, 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. 2024-1, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Tax levied under this Rate and Method of Apportionment. “Construction Fund” means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are available for expenditure to acquire or construct facilities eligible to be financed by CFD No. 2024-1.
“Construction Inflation Index ” means the greater of (i) 2% and (ii) the annual percentage change in the Engineering News-Record Building Cost Index for the city of Los Angeles, measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News- Record Building Cost Index for the city of Los Angeles. “Future Facilities Costs” means the CFD Facilities minus (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.
“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 ow ner 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 Item Title: 12.1
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(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 Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.
2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax for the Assessor’s Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, or Provisional Undeveloped Property, compute the Maximum Special Tax for the Assessor’s Parcel.
3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total amount of Maximum Special Taxes that could be levied assuming build out of all Assessor’s Parcels of Taxable Property based on the applicable Maximum Special Tax for Assessor’s Pa rcels of Developed Property not including any Assessor’s Parcels for which the Special Tax obligation has been previously prepaid.
4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the “Bond Redemption Amount”).
5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”).
6. Determine the Future Facilities Costs.
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor’s Parcel (the “Future Facilities Amount”).
8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax prepayments.
9. Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid.
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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 e vent shall such amount be less than zero.
14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and Expenses, less the Reserve Fund Credit.
15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by 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.
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2. Prepayment in Part
The Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property, or Provisional Undeveloped Property may be partially prepaid. For purposes of determining the Partial Prepayment Amount, the provisions of Section G.1 shall be modified as provided by the following formula:
PP = ((PE – A) x F) + A
These terms have the following meaning:
PP = Partial Prepayment Amount
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 2067-2068 Fiscal Year, however, Special Taxes wi ll 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. 2024- 1 Bonds have been paid; (ii) all authorized facilities of CFD No. 2024-1 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Taxes remain uncollected and (iv) all other obligations of CFD No. 2024-1 have been satisfied.
I. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2024- 1 may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.
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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 Assesso r’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.
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Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 79
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APPENDIX B
CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING
The following information relating to the City of Menifee (the “City”) and the County of Riverside, California (the “County”), California (the “State”) is supplied solely for purposes of information. Neither the City nor the County is obligated in any manner to pay principal of or interest on the Bonds or to cure any delinquency or default on the Bonds. The Bonds are payable solely from the sources described in the Official Statement.
General
The City of Menifee is located approximately 80 miles southeast of Los Angeles in the southwestern portion of Riverside County. The City was incorporated on October 1, 2008, as a general law City. As of January 1, 2025, the City has slightly more than 115,000 residents and covers an area of over 46 square miles.
Population
The following table offers population figures for the City, the County and the State for 2021 through 2025.
Area 2021 2022 2023 2024 2025
City of Menifee 104,361 107,512 111,221 113,837 115,316 County of Riverside 2,423,069 2,435,510 2,467,690 2,491,037 2,495,640 State of California 39,369,530 39,179,680 39,228,444 39,420,663 39,529,101
Source: California State Department of Finance, E -4 Population Estimates for Cities, Counties, and the State . 2020 Census Benchmark for 2021 through 2025.
Building Activity
The following tables provide summaries of the building permit valuations and the number of new dwelling units authorized in the City and County from 2020 through 2024.
BUILDING PERMIT VALUATIONS
City of Menifee
2020-2024
(Dollars in Thousands)
2020 2021 2022 2023 2024
Valuation ($000):
Residential $ 448,581 $391,923 $295,989 $ 525,602 $ 287,465 Non-residential 94,195 39,831 27,092 93,407 92,516 Total* $ 542,776 $431,754 $323,081 $ 619,009 $ 379,981 Residential Units:
Single family 1,457 1,256 796 1,384 630
Multiple family 0 0 0 30 229
Total 1,457 1,256 796 1,414 859
* Totals may not add to sums because of rounding.
Source: Construction Industry Research Board.
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BUILDING PERMIT VALUATIONS
County of Riverside
2020-2024
(Dollars in Thousands)
2020 2021 2022 2023 2024
Residential $3,071,183 $2,262,642 $2,921,113 $3,306,086 $2,650,676 Non-residential 1,153,778 1,543,998 1,701,618 1,676,498 1,436,924 Total* $4,224,961 $3,806,640 $4,622,731 $4,982,584 $4,087,600 Residential Units:
Single family 8,443 7,360 8,863 8,894 6,882
Multiple family 723 1,126 2,861 6,428 2,275
Total 9,166 8,486 11,724 15,322 9,157
* Totals may not add to sums because of rounding.
Source: Construction Industry Research Board.
Employment
The following tables show the largest employers located in the City and County as of June 30, 2025.
LARGEST EMPLOYERS
City of Menifee
(as of June 30, 2025)
Rank Name of Business Employees Type of Business
1. Menifee Union School District 1,620 School District
2. Mt. San Jacinto College District 1,309 School District
3. Romoland Elementary School District 746 School District
4. Target 450 Merchandise Retailer
5. Stater Brothers 348 Supermarkets
6. City of Menifee 345 City Government
7. Texas Roadhouse 188 Casual Dining
8. Southern California Edison 185 Community Services
Source: City of Menifee Comprehensive Annual Financial Report for the year ending June 30, 2025.
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LARGEST EMPLOYERS
County of Riverside
(as of June 30, 2025)
Rank Name of Business Employees Type of Business
1. County of Riverside 25,345 County Government
2. Amazon 14,317 Online Retailer
3. State of California 8,398 State Government
4. Wal-Mart 7,523 Supermarket
5. Riverside Unified School District 6,562 School District
6. Moreno Valley Unified School District 6,306 School District
7. Kaiser Permanente Riverside Medical Center 5,817 Medical Center
8. Stater Brothers Market 5,145 Supermarket
9. University of California, Riverside 5,137 University
10. Eisenhower Medical Center 4,971 Medical Center
Source: County of Riverside Comprehensive Annual Financial Report for the year ending June 30, 2025.
Employment and Industry
Employment data by industry is not separately reported on an annual basis for the City but is compiled for the Riverside -San Bernardino-Ontario Metropolitan Statistical Area (the “MSA”), which includes all of Riverside and San Bernardino counties. In addi tion to varied manufacturing employment, the MSA has large and growing commercial and service sector employment, as reflected in the table below.
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The following table represents the Annual Average Labor Force and Industry Employment for the period from 2020 through 2024.
RIVERSIDE-SAN BERNARDINO-ONTARIO MSA
INDUSTRY EMPLOYMENT & LABOR FORCE - BY ANNUAL AVERAGE
2020 2021 2022 2023 2024
Civilian Labor Force 1,100,500 1,119,000 1,140,400 1,165,500 1,181,300 Civilian Employment 988,600 1,036,100 1,091,800 1,110,100 1,118,600 Civilian Unemployment 111,900 82,900 48,700 55,400 62,700 Civilian Unemployment Rate 10.2% 7.4% 4.3% 4.8% 5.3%
Total Farm 11,800 11,400 11,300 10,800 11,600
Total Nonfarm 722,100 761,700 802,700 818,500 837,100
Goods Producing 110,100 115,000 119,300 119,200 119,600 Mining and Logging 400 400 500 400 500
Construction 66,800 70,900 73,900 73,700 74,700
Manufacturing 43,000 43,700 44,900 45,100 44,400
Service Providing 612,000 646,800 683,400 699,200 717,500 Trade, Transportation and Utilities 173,200 188,100 197,900 196,900 198,600 Wholesale Trade 24,400 25,700 27,300 27,100 26,900
Retail Trade 87,000 91,400 92,500 94,400 94,000
Transportation, Warehousing and Utilities 61,700 71,100 78,100 75,500 77,600 Information 5,300 5,300 5,500 5,700 5,700
Financial Activities 20,900 21,400 22,500 21,200 21,100 Professional and Business Services 71,500 77,200 78,600 76,300 77,000 Educational and Health Services 119,600 124,600 131,700 141,400 153,800 Leisure and Hospitality 77,600 88,600 101,100 104,700 104,000 Other Services 19,900 21,800 24,400 25,600 26,400
Government 124,000 119,800 121,700 127,600 130,900 Total, All Industries 734,000 773,200 813,900 829,300 848,700
Note: Does not include proprietors, self-employed, unpaid volunteers or family workers, domestic workers in households and persons involved in labor -management trade disputes. Employment reported by place of work. Items may not add to total due to independent rounding. The “Total, All Industries” data is not directly comparable to the employment data found in this Appendix B.
Source: State of California, Employment Development Department, March 2024 Benchmark.
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The following table summarizes the labor force, employment and unemployment figures for the period from 2020 through 2024 for the City, the County, the State and the nation as a whole.
CITY OF MENIFEE,
COUNTY OF RIVERSIDE,
STATE OF CALIFORNIA AND UNITED STATES
Average Annual Civilian Labor Force, Employment and Unemployment Year and Area Labor Force Employment(1) Unemployment(2) Unemployment
Rate (%)(3)
2020
City of Menifee 41,800 37,600 4,200 10.1%
County of Riverside 1,121,100 1,008,000 113,000 10.1
State of California 18,971,600 17,047,600 1,924,000 10.1 United States 160,757,000 149,961,000 10,795,000 6.7
2021
City of Menifee 42,300 39,100 3,200 7.5%
County of Riverside 1,133,000 1,050,000 83,000 7.3
State of California 18,973,400 17,586,300 1,387,100 7.3 United States 162,410,000 156,081,000 6,329,000 3.9
2022
City of Menifee 43,000 41,200 1,800 4.2%
County of Riverside 1,152,100 1,104,100 48,000 4.1
State of California 19,252,000 18,440,900 811,000 4.2
United States 164,966,000 159,244,000 5,722,000 3.5
2023
City of Menifee 43,200 41,100 2,200 5.0%
County of Riverside 1,157,900 1,102,300 55,600 4.8
State of California 19,308,300 18,388,300 920,000 4.8
United States 167,116,000 158,772,000 6,080,000 3.6
2024
City of Menifee N/A N/A N/A N/A
County of Riverside 1,181,300 1,118,600 62,700 5.3
State of California 19,644,100 18,600,900 1,043,100 5.3 United States 168,106,000 161,346 6,761,000 4.0
Note: Data is not seasonally adjusted.
(1) Annual averages, unless otherwise specified.
(2) Includes persons involved in labor-management trade disputes. (3) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures in this table.
Source: U.S. Department of Labor – Bureau of Labor Statistics, California Employment Development Department. March 2024 Benchmark.
Personal Income
Personal Income is the income that is received by all persons from all sources. It is calculated as the sum of wage and salary disbursements, supplements to wages and salaries, proprietors’ income with inventory valuation and capital consumption adjustments, rental income of persons with capital consumption adjustment, personal dividend income, personal interest income, and personal current transfer receipts, less contributions for government social insurance.
Item Title: 12.1
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The personal income of an area is the income that is received by, or on behalf of, all the individuals who live in the area; therefore, the estimates of personal income are presented by the place of residence of the income recipients.
Total personal income in the County increased by 23.68% between 2020 and 2024. The following tables summarize personal income for the County for 2020 through 2024.
PERSONAL INCOME
Riverside County
2020-2024
(Dollars in Thousands)
Year Riverside County
Annual
Percent Change
2020 $115,370,344 N/A
2021 126,493,256 9.64
2022 126,174,731 (0.25)
2023 133,968,557 6.18
2024 142,697,421 6.51
Source: U.S. Bureau of Economic Analysis, “CAINC1 County and MSA personal income summary: personal income, population, per capita personal income” (accessed Friday, March 2, 2026).
The following table summarizes per capita personal income for the County, California and the United States for 2020-2024. This measure of income is calculated as the personal income of the residents of the area divided by the resident population of the area.
PER CAPITA PERSONAL INCOME
Riverside County, State of California and the United States 2020-2024
Year Riverside County State of California United States 2020 47,600 70,100 59,151
2021 51,584 77,134 64,692
2022 51,449 77,196 66,298
2023 53,350 81,196 70,002
2024 56,404 86,232 73,204
Source: U.S. Bureau of Economic Analysis, “CAINC1 County and MSA personal income summary: personal income, population, per capita personal income” (accessed Friday, March 2, 2026).
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Taxable Sales
The table below presents taxable sales for the years 2020 through 2024 for the City.
TAXABLE SALES
City of Menifee
2020-2024
(Dollars in Thousands)
Year Permits Taxable Transactions
2020 1,726 $752,610
2021 1,756 974,142
2022 1,915 1,073,446
2023 2,027 1,455,766
2024 2,085 1,385,891
Source: Taxable Sales in California, California Department of Tax and Fee Administration for 2020-2024.
The table below presents taxable sales for the years 2020 through 2024 for the County.
TAXABLE SALES
County of Riverside
2020-2024
(Dollars in Thousands)
Year Permits Taxable Transactions
2020 69,284 $42,313,474
2021 64,335 55,535,196
2022 66,738 62,117,153
2023 68,670 61,331,274
2024 70,577 60,826,952
Source: Taxable Sales in California, California Department of Tax and Fee Administration for 2020-2024.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 86
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APPENDIX C
FORM OF OPINION OF BOND COUNSEL
Upon issuance of the Bonds, Stradling Yocca Carlson & Rauth LLP, Bond Counsel, proposes to render its final approving opinion in substantially the following form:
[Closing Date]
City of Menifee
Community Facilities District No. 2024-1 (Banner Park II) Menifee, California
Re: $_______ Community Facilities District No. 2024-1 (Banner Park II) of the City of Menifee Special Tax Bonds, Series 2026A
Ladies and Gentlemen:
We have examined the Constitution and the laws of the State of California, a certified record of the proceedings of the City of Menifee (the “City”) taken in connection with the formation of Community Facilities District No. 2024-1 (Banner Park II) of the City of Menifee (the “District”) and the authorization and issuance of the District’s Special Tax Bonds, Series 2026A in the aggregate principal amount of $______ (the “Bonds”) and such other information and documents as we consider necessary to render this opinion. In rendering this opinion, we have relied upon certain representations of fact and certifications made by the District, the City, the initial purchasers of the Bonds and others. We have not undertaken to verify through independent investigation the accuracy of the representations and certifications relied upon by us.
The Bonds have been issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (comprising Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California), a resolution adopted by the City Council of the City, acting in its capacity as the legislative body of the District (the “City Council”) on [April 15, 2026] (the “Resolution”), and a Bond Indenture (the “Indenture”) dated as of May 1, 2026, by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”).
All capitalized terms not defined herein shall have the meaning set forth in the Indenture.
Based upon our examination of the foregoing, and in reliance thereon and on all matters of fact as we deem relevant under the circumstances, and upon consideration of applicable laws, we are of the opinion that:
(1) The Bonds have been duly and validly authorized by the District and are legal, valid and binding limited obligations of the District, enforceable in accordance with their terms and the terms of the Indenture.
The Bonds are limited obligations of the District but are not a debt of the City, the State of California or any other political subdivision thereof within the meaning of any constitutional or statutory limitation, and, except for the Net Taxes, neither the faith and credit nor the taxing power of the City, the State of California, or any of its political subdivisions is pledged for the payment thereof. (2) The Indenture has been duly executed and delivered by the District. The Indenture creates a valid pledge of, and the Bonds are secured by, the Net Taxes and the amounts on deposit in certain funds and accounts established under the Indenture, as and to t he extent provided in the Indenture. The Indenture is enforceable in accordance with its terms; provided, however, we express no opinion as to the enforceability of the covenant of the District contained in the Indenture to levy Special Taxes for the payment of Administrative Expenses or as to indemnification, penalty, contribution, choice of law, choice of forum or waiver provisions contained therein.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 87
Menifee Mayor and City Council
April 15, 2026
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(3) Under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals; however, it should be noted that for tax years beginning after December 31, 2022, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed on such corporations. (4) Interest (and original issue discount) on the Bonds is exempt from State of California personal income tax.
(5) The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity are to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Bond Owner will increase the Bond Owner’s basis in the applicable Bond.
(6) The amount by which a Bond Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Bond premium which must be amortized under Section 171 of the Code; such amortizable Bond premium reduces the Bond Owner’s basis in the applicable Bond (and the amount of tax- exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in a Bond Owner realizing a taxable gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Owner.
The opinions expressed in paragraphs (3) and (5) above as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Bonds is subject to the condition that the District and the City comply with all requirements of the Code, that must be satisfied subsequent to the issuance of the Bonds to assure that such interest (and original issue discount) will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The District and the City have covenanted to comply with all such requirements. Except as set forth in paragraphs (3), (4), (5) and (6) above, we express no opinion as to any tax consequences related to the Bonds.
Certain agreements, requirements and procedures contained or referred to in the Indenture, the Tax Certificate executed by the District and the City and other documents related to the Bonds may be changed and certain actions may be taken or omitted, under the circumstances and subject to the terms and conditions set forth in such documents. We express no opinion as to the effect on the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on any Bond if any such change occurs or action is taken or omitted upon advice or approval of bond counsel other than Stradling Yocca Carlson & Rauth LLP.
Our opinion is limited to matters governed by the laws of the State of California and federal law. We assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction. We call attention to the fact that the r ights and obligations under the Bonds, the Indenture and the Tax Certificate may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, by the application of equitable principles and the exercise of judicial discretion in appropriate cases and by the limitations on legal remedies against public agencies in the State of California.
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We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds and expressly disclaim any duty to advise the Owners of the Bonds with respect to matters contained in the Official Statement or other offering material.
The opinions expressed herein are based upon an analysis of existing statutes, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether such actions or events are taken (or not taken) or do occur (or do not occur).
Respectfully submitted,
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APPENDIX D
APPRAISAL REPORT
Item Title: 12.1
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APPENDIX E
SUMMARY OF THE INDENTURE
[TO COME]
Item Title: 12.1
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APPENDIX F
FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE
THIS CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) dated as of _____, 2026 is executed and delivered by Community Facilities District No. 2024 -1 (Banner Park II) of the City of Menifee (the “District”) in connection with the issuance and delivery by the District of its $ ______ Special Tax Bonds, Series 2026A (the “Bonds”). The Bonds are being issued pursuant to a Resolution of Issuance adopted on [April 15, 2026], by the City Council of the City of Menifee, acting as the legislative body of the District, and the Bond Indenture, dated as of May 1, 2026 (the “Indenture”), by and between the District and Wilmington Trust, National Association, as trustee. The District covenants as follows:
Section 1. Purpose of the Disclosure Certificate . This Disclosure Certificate is being executed and delivered by the District for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule.
Section 2. Definitions. In addition to the definitions set forth in the Indenture and the Rate and Method of Apportionment, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the District pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income purposes.
“City” shall mean the City of Menifee, County of Riverside, California. “Disclosure Representative” shall mean the Assistant City Manager of the City, or his or her designee, or such other officer or employee as the District shall designate in writing to the Dissemination Agent from time to time.
“Dissemination Agent” shall mean, initially, Spicer Consulting Group, LLC, or any successor Dissemination Agent designated in writing by the District and which has filed with the then current Dissemination Agent a written acceptance of such designation. “District” shall mean Community Facilities District No. 2024-1 (Banner Park II) of the City of Menifee. “EMMA” shall mean the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board, which can be found at www.emma.msrb.org, or any other repository of disclosure information that may be designated by the Securities and Exchange C ommission in the future system of the MSRB.
“Financial Obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term Financia l Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. “Listed Events” shall mean any of the events listed in Section 5 of this Disclosure Certificate.
Item Title: 12.1
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“MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org.
“Official Statement” shall mean that certain Official Statement for the Bonds dated _____, 2026. “Owners” shall mean the registered owners of the Bonds as set forth in the registration books maintained by the Trustee.
“Participating Underwriter” shall mean Raymond James & Associates, Inc.. “Rate and Method of Apportionment” shall mean that certain Rate and Method of Apportionment of Special Tax approved pursuant to the Resolution of Formation. “Resolution of Formation” shall mean the resolutions adopted by the City Council pursuant to which the City Council formed the District.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “State” shall mean the State of California.
“Trustee” shall mean Wilmington Trust, National Association or such other entity appointed by the District pursuant to the Indenture to act as the trustee under the Indenture.
Section 3. Provision of Annual Reports.
(a) Not later than March 1 of each year commencing March 1, 2027, the District shall, or shall cause the Dissemination Agent to provide to EMMA an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. If the Dis semination Agent is other than the District, then not later than 15 business days prior to the date referred to in the prior sentence hereof, the District shall provide the Annual Report (in a form suitable for filing with EMMA) to the Dissemination Agent. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the District, if any exist, may be submitted separately from and later than the balance of the Annual Report if they are not available by the date required above for the filing of the Annual Report. (b) In the event that the Dissemination Agent is an entity other than the District, then the provisions of this Section 3(b) shall apply. Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report, the District shall provide the Annual Report to the Dissemination Agent. If by fifteen (15) Business Days prior to the due date for an Annual Report the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the District to determine if the District will be filing the Annual Report in compliance with subsection (a). The District shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the District and shall have no duty or obligation to review such Annual Report.
(c) If the Dissemination Agent is other than the District and if the Dissemination Agent is unable to verify that an Annual Report has been provided to EMMA by the date required in subsection (a), the Dissemination Agent shall send, in a timely manner, a notice to EMMA of the failure to file the Annual Report Item Title: 12.1
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in the form required by EMMA. If the District acts as its own Dissemination Agent, it shall file a notice with EMMA no later than the date specified in subsection (a) for filing an Annual Report if the District fails to file the Annual Report by that date.
(d) If the Dissemination Agent is other than the District, the Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the name and address of the repository if other than the MSRB through EMMA; and (ii) promptly after receipt of the Annual Report, file a report with the District certifying that the Annual Report has been provided to EMMA and the date it was provided. (e) Notwithstanding any other provision of this Disclosure Certificate, all filings shall be made in accordance with the MSRB’s EMMA system or in another manner approved under the Rule.
Section 4. Content of Annual Reports. The District’s Annual Report shall contain or include by reference the following:
(a) Financial Statements. The audited financial statements of the District for the prior fiscal year, if any have been prepared and which, if prepared, shall be prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the District’s audited financial statements, if any are prepared, are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Financial and Operating Data. The Annual Report shall contain or incorporate by reference the following information:
(i) the principal amount of the Bonds outstanding as of the September 2 preceding the filing of the Annual Report;
(ii) the balance in each fund under the Indenture as of the September 2 preceding the filing of the Annual Report;
(iii) the aggregate assessed valuation of the Taxable Property within the District; (iv) any changes to the Rate and Method of Apportionment of Special Tax for the District approved or submitted to the qualified electors for approval prior to the filing of the Annual Report; (v) a table setting forth the annual Special Tax delinquency rate within the District at June 30 of each fiscal year for which a delinquency exists, listing for each fiscal year, the total Special Tax levy, the amount delinquent and the percent delinquent; (vi) an update of the value-to-lien of the property within the District based on the assessed value and the Special Tax levy for the then current fiscal year, which update may be provided in a form similar to Table 2 in the Official Statement; provided that su ch update need not include overlapping special tax, assessment or general obligation indebtedness; and (vii) the status of any foreclosure actions being pursued by the District with respect to delinquent Special Taxes within the District.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 94
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(c) Any or all of the items listed in (a) or (b) above may be included by specific reference to other documents, including official statements of debt issues of the District or related public entities, which have been submitted to EMMA or the Securities and E xchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB through EMMA. The District shall clearly identify each such other document so included by reference.
Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the District shall give, or cause the Dissemination Agent to give, notice to EMMA in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events with respect to the Bonds:
1. principal and interest payment delinquencies;
2. unscheduled draws on debt service reserves reflecting financial difficulties;
3. unscheduled draws on credit enhancements reflecting financial difficulties;
4. substitution of credit or liquidity providers, or their failure to perform;
5. adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the Bonds;
6. defeasances;
7. tender offers;
8. ratings changes; and
9. bankruptcy, insolvency, receivership or similar proceedings.
Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by le aving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.
10. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties.
(b) Additionally, the District shall give or cause the Dissemination Agent to give notice to EMMA in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events with respect to the Bonds, if material:
1. mergers, consolidations, acquisitions, the sale of all or substantially all of the assets of the obligated persons or their termination;
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 95
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2. appointment of a successor or additional fiscal agent or the change of the name of a fiscal agent;
3. nonpayment related defaults;
4. modifications to the rights of Bondholders;
5. bond calls;
6. release, substitution or sale of property securing repayment of the Bonds; and
7. incurrence of a Financial Obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders. (c) In the event that the District’s fiscal year changes, the District shall report or shall instruct the Dissemination Agent to report such change in the same manner and to the same parties as Listed Events would be reported pursuant to this Section.
(d) The District hereby agrees that the undertaking set forth in this Disclosure Certificate is the responsibility of the District, and the Dissemination Agent, if other than the District, shall not be responsible for determining whether the District’s instructions to the Dissemination Agent under this Section comply with the requirements of the Rule.
Section 6. Termination of Reporting Obligation. The obligations of the District and the Dissemination Agent under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the District shall give notice of such termination in the same manner as for a Listed Event under Section
5. Section 7. Dissemination Agent. The District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemina tion Agent. The Dissemination Agent, if other than the District, shall not be responsible in any manner for the content of any notice or report prepared by the District pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be Spicer Consulting Group, LLC. The Dissemination Agent may resign by providing (i) thirty (30) days written notice to the District and the Trustee and (ii) upon appointment of a new Dissemination Agent hereunder.
Section 8. Amendment; Waiver.
(a) This Disclosure Certificate may be amended, by written agreement of the parties, without the consent of the Owners, and any provision of this Disclosure Certificate may be waived, if all of the following conditions are satisfied: (1) such amendment or wa iver is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law, or a change in the identity, nature or status of the District or the type of business conducted thereby, (2) the undertakings in this Disclosure Certificate as so amended or waived would, in the opinion of a nationally recognized bond counsel, have complied with the requirements of the Rule as of the date of this Disclosure Certificate, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, and (3) the amendment or waiver either (i) is approved by the Owners of the Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Owners or (ii) does not, in the determination of the District, materially impair the interests of the Owners or Beneficial Owners of the Bonds.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 96
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April 15, 2026
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(b) To the extent any amendment to this Disclosure Certificate results in a change in the type of financial information or operating data provided pursuant to this Disclosure Certificate, the first Annual Report provided thereafter shall include a narrative explanation of the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
(c) If an amendment is made to the basis on which financial statements are prepared, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a quantitative and, to the extent reasonably feasible, qualitative discussion of the differences in the accounting principles and the impa ct of the change in the accounting principles on the presentation of the financial information.
Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the District from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the District shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the District or the Dissemination Agent to comply with any provision of this Disclosure Certificate, any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District and/or the Dissemination Agent to comply with their respective obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the District or the Dissemination Agent to comply with this Disclosure Certificate shall be an action to compel performance.
Section 11. Duties, Immunities and Liabilities of Dissemination Agent. Where an entity other than the District is acting as the Dissemination Agent, the Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the District agrees to indemnify and save the Dissemination Agent and its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of the ir powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. Any Dissemination Agent shall be paid (i) compensation by the District for its services provided hereunder in accordance with a schedule of fees to be mutually agreed to; and (ii) all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the District pursuant to this Disclosure Certificate. The obligations of the District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. No person shall have any right to commence any action against the Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Certificate. The Dis semination Agent shall not be liable under any circumstances for monetary damages to any person for any breach under this Disclosure Certificate.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 97
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Section 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Certificate may be given as follows:
District: Community Facilities District No. 2024-1 (Banner Park II) of the City of Menifee
29844 Haun Road
Menifee, CA 92586
Attn: City Manager
Underwriter: Raymond James & Associates, Inc.
10250 Constellation Boulevard, Suite 850
Los Angeles, CA 90067
Attn: Public Finance Department
Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notice or communications should be sent.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the District, the Trustee, the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.
Section 14. Merger. Any person succeeding to all or substantially all of the Dissemination Agent’s business shall be the successor Dissemination Agent without the filing of any paper or any further act.
This Disclosure Certificate is executed as of the date and year first set forth above.
COMMUNITY FACILITIES DISTRICT NO. 2024 -1
(BANNER PARK II) OF THE CITY OF MENIFEE
By:
[Rochelle Clayton]
Disclosure Representative
Item Title: 12.1
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APPENDIX G
DEVELOPER CONTINUING DISCLOSURE CERTIFICATE
This Developer Continuing Disclosure Certificate (the “ Disclosure Certificate”), dated as of ____, 2026, is executed and delivered by Pulte Home Company, LLC, a Michigan limited liability company (the “Landowner”), in connection with the issuance by Community Facilities District No. 2024-1 (Banner Park II) of the City of Menifee (the “District”) of the $_______ Community Facilities District No. 2024-1 (Banner Park II) of the City of Menifee Special Tax Bonds, Series 2026A (the “Bonds”). The Bonds are being issued pursuant to the Bond Indenture dated as of May 1, 2026 (the “Indenture”) by and between the District and Wilmington Trust, National Association, as trustee. The Landowner covenants and agrees as follows:
SECTION 1. Purpose of the Disclosure Certificate . This Disclosure Certificate is being executed and delivered by the Landowner to assist the Underwriter in the marketing of the Bonds.
SECTION 2. Definitions. Unless defined herein, capitalized terms used herein shall have the meanings ascribed thereto in the Indenture.
“Affiliate” shall mean, with respect to the Landowner, any other Person (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Landowner, and (ii) for whom information, including financial information or operating data, concerning such Person is material to potential investors in their evaluation of the District and investment decision regarding the Bonds (i.e. information regarding such Person’s assets or funds that would materially affect the Landowner’s ability to develop the Property as described in the Official Statement or to pay its Special Taxes on the portion of the Property then owned by the Landowner (to the extent the responsibility of the Landowner) prior to delinquency). For purposes hereof, the term “control” (including the terms “controlling,” “controlled by” or “under common control with”) means the present possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Beneficial Owner” shall mean any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of the Bonds (including persons holding Bonds through nominees, depositories or other intermediaries).
“Dissemination Agent” shall mean the Landowner, or any successor Dissemination Agent designated in writing by the Landowner, and which has filed with the Landowner and the District a written acceptance of such designation, and which is experienced in providing dissemination agent services such as those required under this Disclosure Certificate.
“District” shall mean Community Facilities District No. 2024-1 (Banner Park II) of the City of Menifee. “EMMA” shall mean the Electronic Municipal Market Access system of the MSRB. “Listed Event” shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board and any successor entity as the repository for filings.
“Official Statement” shall mean the Official Statement, dated ____, 2026, relating to the Bonds. “Person” shall mean an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, an unincorporated organization or a government or political subdivision thereof.
Item Title: 12.1
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“Property” means, for each Semiannual Report, the real property within the boundaries of the District that is then-owned by the Landowner or any Affiliate.
“Repository” shall mean the MSRB or any other entity designated or authorized by the Securities and Exchange Commission as a repository of disclosure information. Unless otherwise designated by the MSRB or the Securities and Exchange Commission, filings w ith the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org. “Semiannual Report” shall mean any report to be provided by the Landowner on or prior to August 1 and February 1 of each year, commencing with the Semiannual Report due [August 1, 2026], pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “State” shall mean the State of California.
“Underwriter” shall mean the original underwriter of the Bonds, which is Raymond James & Associates, Inc..
SECTION 3. Provision of Semiannual Reports.
(a) Until the obligations under this Disclosure Certificate are terminated pursuant to Section 6, the Landowner shall, or upon receipt of the Semiannual Report the Dissemination Agent shall, not later than February 1 and August 1 of each year, commencing [August 1, 2026], provide to the Repository the Semiannual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. If, in any year, February 1 or August 1 falls on a Saturday, Sunday or a federal holiday, such deadline shall be extended to the next following day that is not a Saturday, Sunday or federal holiday. The Semiannual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate. (b) If the Landowner utilizes the Dissemination Agent to file the Semiannual Report, then not later than 15 calendar days prior to the date specified in subsection (a) for providing the Semiannual Report to the Repository, the Landowner shall provide the Semiannual Report to the Dissemination Agent (if different from the Landowner), and shall provide a written certification with (or included as a part of) each Semiannual Report furnished to the Dissemination Agent, to the effect that such Semiannual Report constitutes the Semiannual Report required to be furnished by it under this Disclosure Certificate. If the Dissemination Agent (if different from the Landowner) does not receive a Semiannual Report from the Landowner and cannot verify that a Semiannual Re port has been filed with the Repository by 15 calendar days prior to the date specified in subsection (a) for providing the Semiannual Report to the Repository, the Dissemination Agent shall send a reminder notice to the Landowner that the Semiannual Repor t has not been provided as required under Section 3(a) above. The reminder notice shall instruct the Landowner to determine whether its obligations under this Disclosure Certificate have terminated (pursuant to Section 6 below) and, if so, to provide the Dissemination Agent with a notice of such termination in the same manner as for a Listed Event (pursuant to Section 5 below). (c) If the Landowner does not provide, or cause the Dissemination Agent to provide, a Semiannual Report to the Repository on or prior to the date specified in subsection (a) for providing the Semiannual Report to the Repository, the Dissemination Agent shall send, in a timely manner, a notice to the Repository of the failure to file the Semiannual Report in the form required by the Repository. (d) The Dissemination Agent shall:
(i) determine, prior to the date for providing the Semiannual Report, the name and address of the Repository; and
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 100
Menifee Mayor and City Council
April 15, 2026
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(ii) to the extent the Semiannual Report has been furnished to it, promptly after receipt of the Semiannual Report, file a report with the Landowner (if the Dissemination Agent is other than the Landowner), certifying that the Semiannual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided to the Repository. (e) Notwithstanding any other provision of this Disclosure Certificate, any of the required filings hereunder shall be made in accordance with the MSRB’s EMMA system or in another manner approved by the MSRB or the Securities and Exchange Commission.
SECTION 4. Content of Semiannual Reports.
(a) The Landowner’s Semiannual Report shall contain or include by reference the information which is updated through a date which shall not be more than 60 days prior to the date the applicable Semiannual Report is required to be filed, relating to the following:
1. To the extent not previously disclosed in a prior Semiannual Report, a discussion of any material change in the Landowner’s sources of funds to finance its development of the Property as disclosed under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT – Financing Plan” in the Official Statement, and, if applicable, whether any material defaults exist under any loan arrangement related to such financing. As disclosed in the Official Statement, the Landowner is financing its development of the Property through internal sources.
2. A summary of development activity conducted by the Landowner or any Affiliate within the District, including the number of parcels for which sales to homebuyers have closed.
3. Any sale by the Landowner or any Affiliate of Property to another Person, other than to buyers of completed homes, including a description of the property sold (acreage, number of lots, etc.) and the identity of the Person that so purchased the property, all since the date of information set forth in the Official Statement or the most recent Semiannual Report.
4. Any major legislative, administrative and judicial challenges that the Landowner is currently involved in or has actual knowledge of, to or affecting the Landowner’s development of the Property, or the time for construction of any public or private improvements to be made to the Property by the Landowner or any Affiliate (the “Landowner Improvements”).
5. Any significant amendments to land use entitlements known to the Landowner with respect to the Property owned by the Landowner or its Affiliates.
6. Information regarding any failure by the Landowner or any of its Affiliates to pay prior to delinquency any Special Taxes levied on any Property owned by the Landowner or any Affiliates. (b) Any and all of the items listed above may be included by specific reference to other documents, including official statements of debt issues which have been submitted to the Repository or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The Landowner shall clearly identify each such other document so included by reference.
SECTION 5. Reporting of Significant Events.
(a) Until the obligations under this Disclosure Certificate are terminated pursuant to Section 6, pursuant to the provisions of this Section 5, the Landowner shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material under clauses (b) and (c) as soon as practicable after obtaining knowledge of the occurrence of any of the following events:
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 101
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April 15, 2026
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1. Failure to pay prior to delinquency any real property taxes, special taxes or assessments levied within the District on a parcel owned by the Landowner or any Affiliate, to the extent such failure is not promptly cured by the Landowner or any Affiliate upon discovery thereof;
2. Material default by the Landowner or any Affiliate on any loan with respect to the construction or permanent financing of the Landowner Improvements to which the Landowner or any Affiliate has been provided a notice of default;
3. Material default by the Landowner or any Affiliate on any loan secured by property within the District owned by the Landowner or any Affiliate to which the Landowner or any Affiliate has been provided a notice of default;
4. Material payment default by the Landowner on any loan of the Landowner (whether or not such loan is secured by property within the District) which is beyond any applicable cure period in such loan if such default could materially adversely affect the completion of the Landowner Improvements or the development of the Property (including the payment prior to delinquency of Special Taxes);
5. The filing of any proceedings with respect to the Landowner, in which the Landowner, may be adjudicated as bankrupt or discharged from any or all of its debts or obligations or granted an extension of time to pay debts or a reorganization or readjustment of debts;
6. The filing of any proceedings with respect to an Affiliate of the Landowner, in which such Affiliate of the Landowner may be adjudicated as bankrupt or discharged from any or all of its respective debts or obligations or granted an extension of time to pa y debts or a reorganization or readjustment of debts if such adjudication could materially adversely affect the completion of the Landowner Improvements or the development of the Property (including the payment prior to delinquency of Special Taxes); and
7. The filing of any lawsuit against the Landowner or any of its Affiliates (with service of process on the Landowner or its Affiliates having occurred) which, in the reasonable judgment of the Landowner, will materially adversely affect the completion of the development of the Property owned by the Landowner or its Affiliates within the District, or litigation which if decided against the Landowner, or any of its Affiliates, in the reasonable judgment of the Landowner, would materially adversely affect the financial condition of the Landowner or any Affiliate of the Landowner owning any Property within the District, or their respective ability to pay Special Taxes levied on their respective Property within the District prior to delinquency.
(b) Whenever the Landowner obtains knowledge of the occurrence of a Listed Event, the Landowner shall as soon as possible determine if such event would be material under applicable federal securities laws. The Dissemination Agent shall have no responsibility to determine the materiality of any of the Listed Events.
(c) If the Landowner determines that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Landowner shall promptly file or cause the Dissemination Agent to file a notice of such occurrence with the Repository.
SECTION 6. Termination of Reporting Obligation. The Landowner’s obligations under this Disclosure Certificate shall terminate upon the earlier to occur of the following events:
(a) the legal defeasance, prior redemption or payment in full of all of the Bonds, or Item Title: 12.1
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(b) at such time as [146] or more homes within the District have been conveyed to individual homebuyers.
If such termination occurs prior to the final maturity of the Bonds, the Landowner shall give notice of such termination in the same manner as for a Semiannual Report hereunder.
SECTION 7. Dissemination Agent. The Landowner may from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemina tion Agent. If the Dissemination Agent is not the Landowner, the Dissemination Agent shall not be responsible in any manner for the form or content of any notice or report prepared by the Landowner pursuant to this Disclosure Certificate.
The Dissemination Agent may resign by providing (i) thirty days written notice to the Landowner and the Dissemination Agent and (ii) upon appointment of a new Dissemination Agent hereunder.
SECTION 8. Amendment; Waiver . Notwithstanding any other provision of this Disclosure Certificate, the Landowner may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5, it may only be made in connection with a change in circumstances that arises from a change in legal requirements or change in law;
(b) The amendment or waiver either (i) is approved by the owners of the Bonds in the same manner as provided in the Indenture with the consent of owners of the Bonds, or (ii) does not, in the opinion of nationally recognized bond counsel addressed to the Distr ict and the Dissemination Agent (if different from the Landowner), materially impair the interests of the owners or Beneficial Owners of the Bonds; and (c) The Landowner, or the Dissemination Agent, shall have delivered copies of the amendment and any opinions delivered under (b) above to the District and the Trustee.
SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Landowner from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Semiannual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Landowner chooses to include any information in any Semiannual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Landowner shall have no obligation under this Disclosure Certificate to update such information or include it in any future Semiannual Report or notice of occurrence of a Listed Event.
The Landowner acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b- 5 promulgated under the Securities Exchange Act of 1934, may apply to the Landowner, and that under some circ umstances compliance with this Disclosure Certificate, without additional disclosures or other action, may not fully discharge all duties and obligations of the Landowner under such laws.
SECTION 10. Default. In the event of a failure of the Landowner or the Dissemination Agent to comply with any provision of this Disclosure Certificate, any Underwriter or any owner or Beneficial Owner of the Bonds may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Landowner or the Dissemination Agent to comply with its obligations under this Disclosure Certificate. The sole remedy under this Disclosure Certificate in the event of any failure of the Landowner or the Dissemination Agent to comply with this Disclosure Certificate shall be an action to compel performance.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 103
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April 15, 2026
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SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the Landowner, the Underwriter, owners of the Bonds or Beneficial Owners or any other party. The Dissemination Agent may rely and shall be protected in acting or ref raining from acting upon a direction from the Landowner or an opinion of nationally recognized bond counsel. No person shall have any right to commence any action against the Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Certificate. The Dissemination Agent may conclusively rely upon the Semiannual Report provided to it by the Landowner as constituting the Semiannual Report required of the Landowner in accordance with this Disclosure Certificate and shall have no duty or obligation to review such Semiannual Report. The Dissemination Agent shall have no duty to prepare the Semiannual Report nor shall the Dissemination Agent be responsi ble for filing any Semiannual Report not provided to it by the Landowner in a timely manner in a form suitable for filing with the Repository. Any company succeeding to all or substantially all of the Dissemination Agent’s business shall be the successor to the Dissemination Agent hereunder without the execution or filing of any paper or any further act.
SECTION 12. Landowner as Independent Contractor . In performing under this Disclosure Certificate, it is understood that the Landowner is not an agent or contractor of the District.
SECTION 13. Notices. Notices should be sent in writing by electronic, regular, or overnight mail to the following addresses. The following information may be conclusively relied upon until changed in writing.
Landowner: Pulte Group
27401 Los Altos, Suite 400
Mission Viejo, California 92691
Attention: Brian Leung
Email: [email protected]
With a copy to:
O’Neil LLP
19800 MacArthur Blvd., Suite 650
Irvine, California 92612
Attention: Sandra Galle
Email: [email protected]
District: City of Menifee
29844 Haun Road
Menifee, California 92586
Attention: [Rochelle Clayton
[email protected]]
Underwriter: Raymond James & Associates, Inc.
10250 Constellation Boulevard, Suite 850
Los Angeles, California 90067
Attn: Public Finance Department
SECTION 14. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Landowner, the City, the District, the Dissemination Agent, the Underwriter and owners of the Bonds and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.
[Remainder of Page Intentionally Left Blank]
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 104
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IN WITNESS WHEREOF, the Landowner has executed this Disclosure Certificate as of the date first above written.
PULTE HOME COMPANY LLC,
a Michigan limited liability company
By:
D. Bryce Langen,
Vice President & Treasurer
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 105
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APPENDIX H
BOOK-ENTRY ONLY SYSTEM
The information in this Appendix concerning DTC and DTC’s book-entry only system has been obtained from sources that the District and the Underwriter believe to be reliable, but neither the District nor the Underwriter takes any responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, premium, if any, accreted value and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.
The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Bonds.
The Bonds will be issued as fully- registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered bond will be issued for each annual maturity of the Bonds, each in the aggregate principal amount of such annual maturity, and will be deposited with DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corpor ation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.
DTC holds and provides asset servicing for over 3.5 million issues of U .S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates.
Direct Participants include both U.S. and non- U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirec t Participants”). DTC has a Standard & Poor’s rating of “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Item Title: 12.1
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April 15, 2026
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Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the a lternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s recei pt of funds and corresponding detail information from the District or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, or the District, subject to any statu tory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
A Bond Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Trustee. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a book- entry credit of tendered Bonds to the Trustee’s DTC account.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the District or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered.
The District may decide to discontinue use of the system of book- entry only transfers through DTC (or a successor securities depository). In that event, bonds will be printed and delivered to DTC.
THE TRUSTEE, AS LONG AS A BOOK- ENTRY ONLY SYSTEM IS USED FOR THE BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY FAILURE
OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY ANY
BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE
VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 107
Menifee Mayor and City Council
April 15, 2026
Page
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4932-7851-2527/200299-0032
BOND INDENTURE
Between
COMMUNITY FACILITIES DISTRICT NO. 2024-1
(BANNER PARK II) OF THE CITY OF MENIFEE
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
Relating to
$___________
COMMUNITY FACILITIES DISTRICT NO. 2024-1
(BANNER PARK II) OF THE CITY OF MENIFEE
SPECIAL TAX BONDS, SERIES 2026A
Dated as of May 1, 2026
Item Title: 12.1
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Table of Contents
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ARTICLE I
DEFINITIONS
Section 1.1. Definitions ..................................................................................................................... 1
ARTICLE II
GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds and Parity Bonds .......................... 11 Section 2.2. Type and Nature of Bonds and Parity Bonds .............................................................. 11 Section 2.3. Equality of Bonds and Parity Bonds and Pledge of Net Taxes ................................... 11 Section 2.4. Description of Bonds; Interest Rates .......................................................................... 12 Section 2.5. Place and Form of Payment ........................................................................................ 13 Section 2.6. Form of Bonds and Parity Bonds ................................................................................ 13 Section 2.7. Execution and Authentication ..................................................................................... 14 Section 2.8. Bond Register .............................................................................................................. 14 Section 2.9. Registration of Exchange or Transfer ......................................................................... 14 Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds ..................................... 15 Section 2.11. Validity of Bonds and Parity Bonds ........................................................................... 15 Section 2.12. Book-Entry System ..................................................................................................... 16 Section 2.13. Representation Letter .................................................................................................. 16 Section 2.14. Transfers Outside Book-Entry System ....................................................................... 17 Section 2.15. Payments to the Nominee ........................................................................................... 17 Section 2.16. Initial Depository and Nominee .................................................................................. 17
ARTICLE III
CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds ............................................................... 17 Section 3.2. Deposits to and Disbursements from Special Tax Fund ............................................. 18 Section 3.3. Administrative Expense Account of the Special Tax Fund ........................................ 19 Section 3.4. Interest Account and Principal Account of the Special Tax Fund .............................. 19 Section 3.5. Redemption Account of the Special Tax Fund ........................................................... 20 Section 3.6. Reserve Account of the Special Tax Fund .................................................................. 21 Section 3.7. Rebate Fund ................................................................................................................ 22 Section 3.8. Surplus Fund ............................................................................................................... 24 Section 3.9. Acquisition and Construction Fund ............................................................................ 25 Section 3.10. Investments ................................................................................................................. 26
ARTICLE IV
REDEMPTION OF BONDS AND PARITY BONDS
Section 4.1. Redemption of Bonds ................................................................................................. 28 Item Title: 12.1
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Section 4.2. Selection of Bonds and Parity Bonds for Redemption ............................................... 31 Section 4.3. Notice of Redemption ................................................................................................. 31 Section 4.4. Partial Redemption of Bonds or Parity Bonds ............................................................ 32 Section 4.5. Effect of Notice and Availability of Redemption Money ........................................... 32
ARTICLE V
COVENANTS AND WARRANTY
Section 5.1. Warranty ..................................................................................................................... 33 Section 5.2. Covenants .................................................................................................................... 33
ARTICLE VI
AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Owner Consent ........................... 37 Section 6.2. Supplemental Indentures or Orders Requiring Owner Consent .................................. 37 Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or Parity Bonds .......................................................................................................................... 38
ARTICLE VII
TRUSTEE
Section 7.1. Trustee ......................................................................................................................... 39 Section 7.2. Removal of Trustee ..................................................................................................... 40 Section 7.3. Resignation of Trustee ................................................................................................ 40 Section 7.4. Liability of Trustee ..................................................................................................... 40 Section 7.5. Merger or Consolidation ............................................................................................. 44
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default ........................................................................................................ 44 Section 8.2. Remedies of Owners ................................................................................................... 45 Section 8.3. Application of Revenues and Other Funds After Default ........................................... 45 Section 8.4. Power of Trustee to Control Proceedings ................................................................... 46 Section 8.5. Appointment of Receivers .......................................................................................... 46 Section 8.6. Non-Waiver ................................................................................................................. 47 Section 8.7. Limitations on Rights and Remedies of Owners ........................................................ 47 Section 8.8. Termination of Proceedings ........................................................................................ 47 Item Title: 12.1
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ARTICLE IX
DEFEASANCE AND PARITY BONDS
Section 9.1. Defeasance .................................................................................................................. 48 Section 9.2. Conditions for the Issuance of Parity Bonds and Other Additional Indebtedness ................................................................................................................ 49
ARTICLE X
MISCELLANEOUS
Section 10.1. Cancellation of Bonds and Parity Bonds .................................................................... 51 Section 10.2. Execution of Documents and Proof of Ownership ..................................................... 51 Section 10.3. Unclaimed Moneys ..................................................................................................... 52 Section 10.4. Provisions Constitute Contract; Governing Law; Venue ............................................ 52 Section 10.5. Future Contracts .......................................................................................................... 53 Section 10.6. Further Assurances ...................................................................................................... 53 Section 10.7. Entire Agreement; Severability ................................................................................... 53 Section 10.8. Notices ........................................................................................................................ 53
Signatures ................................................................................................................................... S-1
EXHIBIT A FORM OF SPECIAL TAX BOND .......................................................................... A-1 EXHIBIT B REQUISITION FOR DISBURSEMENT OF PROJECT COSTS ........................... B-1
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 111
Menifee Mayor and City Council
April 15, 2026
Page
704 of 909
4932-7851-2527/200299-0032
BOND INDENTURE
THIS BOND INDENTURE dated as of _____ 1, 2026, by and between COMMUNITY FACILITIES DISTRICT NO. 2024-1 (BANNER PARK II ) OF THE CITY OF MENIFEE (the “District”) and WILMINGTON TRUST, NATIONAL ASSOCIATION, as trustee (the “Trustee”), governs the terms of the Community Facilities District No. 2024 -1 (Banner Park II) of the City of Menifee Special Tax Bonds, Series 2026A and any Parity Bonds issued in accordance herewith from time to time.
RECITALS :
A. The City Council of the City of Menifee, located in the County of Riverside, California (the “City Council”), has undertaken proceedings and declared the necessity to issue bonds on behalf of the District pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California (the “Act”).
B. Based upon Resolution Nos. 24-1470 and 24-1471 adopted by the City Council on August 7, 2024 and an election held on August 7, 2024, authorizing the levy of a special tax and the issuance of bonds, the District is authorized to issue bonds in one or more series pursuant to the Act, in an aggregate principal amount not to exceed $15,000,000.
C. The District intends to finance various Project Costs (as defined herein) through the issuance of bonds in an aggregate principal amount of $___________ designated as the “Community Facilities District No. 2024 -1 (Banner Park II) of the City of Menifee Special Tax Bonds, Series 2026A” (the “Bonds”); and
D. The District has determined that all requirements of the Act for the issuance of the Bonds have been satisfied.
NOW, THEREFORE, in order to establish the terms and conditions upon and subject to which the Bonds are to be issued, and in consideration of the premises and of the mutual covenants contained herein and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable consideration, the receipt of which is hereby acknowledged, the District does hereby covenant and agree, for the benefit of the Owners of the Bonds and any Parity Bonds (as defined herein) which may be issued hereunder from time to time, as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings:
Account. The term “Account” means any account created pursuant to this Indenture.
Act. The term “Act” means the Mello -Roos Community Facilities Act of 1982, as amended, being Section 53311 et seq. of the California Government Code.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 112
Menifee Mayor and City Council
April 15, 2026
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Acquisition and Construction Fund. The term “Acquisition and Construction Fund” means the fund by that name established pursuant to Section 3.1 hereof.
Administrative Expense Account . The term “Administrative Expense Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.
Administrative Expenses . The term “Administrative Expenses” means the administrative costs with respect to the calculation and collection of the Special Taxes, including all attorneys’ fees and other costs related thereto, the fees and expenses of the Trustee, any fees and related costs for credit enhancement for the Bonds or any Parity Bonds which are not otherwise paid as Costs of Issuance, any costs related to the District’s compliance with state and federal laws requiring continuing disclosure of information concerning the Bonds and the District, and any other costs otherwise incurred by City staff on behalf of the District in order to carry out the purposes of the District as set forth in the Resolution of Formation and any obligation of the District hereunder.
Administrative Expenses Cap. The term “Administrative Expenses Cap” means $ 30,000, which amount shall escalate at 2.00% per Fiscal Year, commencing July 1, 20__.
Alternate Penalty Account. The term “Alternate Penalty Account” means the account by that name created and established in the Rebate Fund pursuant to Section 3.1 hereof.
Annual Debt Service . The term “Annual Debt Service” means the principal amount of any Outstanding Bonds or Parity Bonds payable in a Bond Year either at maturity or pursuant to a Sinking Fund Payment and any interest payable on any Outstanding Bonds or Parity Bonds in such Bond Year, if the Bonds and any Parity Bonds are retired as scheduled.
Authorized Investments . The term “Authorized Investments” means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein:
(1) For all purposes, including defeasance investments in refunding escrow accounts:
(a) cash; or
(b) obligations of, or obligations guaranteed as to principal and interest by, the U.S. or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the U.S., including U.S. treasury obligations, all direct or fully guaranteed obligations, Farmers Home Administration, General Services Administration, guaranteed Title XI financing, Government National Mortgage Association (GNMA) and State and Local Government Series; or (c) obligations of government-sponsored agencies that are not backed by the full faith and credit of the U.S. Government: Federal Home Loan Mortgage Corporation (FHLMC) debt obligations, Farm Credit System (formerly: Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives), Federal Home Loan Banks (FHL Banks), Federal National Mortgage Association (FNMA) debt obligations, Financing Corp. (FICO) debt obligations, Resolution Funding Corp. (REFCORP) debt obligations and U.S. Agency for International Development (U.S.A.I.D.) guaranteed notes.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 113
Menifee Mayor and City Council
April 15, 2026
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(2) For all purposes other than defeasance investments in refunding escrow accounts:
(a) obligations of any of the following federal agencies, which obligations represent the full faith and credit of the United States of America: Export -Import Bank, Rural Economic Community Development Administration, U.S. Maritime Administration, Small Business Administration, U.S. Department of Housing & Urban Development (PHAs), Federal Housing Administration and Federal Financing Bank;
(b) direct obligations of any of the following federal agencies, which obligations are not fully guaranteed by the full faith and credit of the United States of America: senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC), obligations of the Resolution Funding Corporation (REFCORP) and senior debt obligations of the Federal Home Loan Bank System; (c) U.S. dollar denominated deposit accounts, federal funds and bankers’ acceptances with domestic commercial banks (including those of the Trustee and its affiliates) which have a rating on their short term certificates of deposit on the date of purchase of “A-1” or “A-1+” by S&P and “P-1” by Moody’s and maturing no more than 360 days after the date of purchase (ratings on holding companies are not considered as the rating of the bank); (d) commercial paper which is rated at the time of purchase in the single highest classification “A -1+” by S&P and “P -1” by Moody’s and which matures not more than 270 days after the date of purchase;
(e) investments in a money market fund rated “AAm,” “AAm -G” or better by S&P, including funds for which the Trustee or its affiliates provide investment advisory or other management services;
(f) pre-refunded municipal obligations defined as follows: any bonds or other obligations of any state of the United States of America, or any agency, instrumentality or local governmental unit of any such state, which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice, and
(i) which are rated, based on irrevocable escrow account or fund (the “escrow”), in the highest rating category of S&P and Moody’s or any successors thereto; or (ii) (1) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (1)(b) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate; and (2) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate;
(g) municipal obligations rated “Aaa/AAA” or general obligations of states with a rating of at least “Aa2/AA” or higher by both Moody’s and S&P; Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 114
Menifee Mayor and City Council
April 15, 2026
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(h) Investment Agreements (supported by appropriate opinions of counsel); and (i) the Local Agency Investment Fund of the State, created pursuant to Section 16429.1 of the California Government Code, to the extent the Trustee is authorized to register such investment in its name.
The value of the above investments shall be determined as follows:
(a) for the purpose of determining the amount in any fund, all Authorized Investments credited to such fund shall be valued at market value. The Trustee shall determine the market value based on accepted industry standards, including the Trustee’s internal systems, and from accepted industry providers. Accepted industry providers shall include, but are not limited to, pricing services provided by Financial Times Interactive Data Corporation, Bank of America Merrill Lynch or Salomon Smith Barney. Notwithstanding anything to the contrary herein, in making any valuation of investments hereunder, the Trustee may utilize computerized securities pricing services that may be available to it, including those available through its regular accounting system, and rely thereon;
(b) as to certificates of deposit and bankers acceptances: the face amount thereof, plus accrued interest thereon; and
(c) as to any investment not specified above: the value thereof established by prior agreement between the City and the Trustee.
Authorized Representative of the District . The term “Authorized Representative of the District” means the Mayor, City Manager, Assistant City Manager or City Clerk of the City, or any other officer or employee authorized by the City Council of the City or by an Authorized Representative of the District to undertake the action referenced in this Indenture as required to be undertaken by an Authorized Representative of the District.
Bond Counsel. The term “Bond Counsel” means Stradling Yocca Carlson & Rauth LLP, or another attorney at law or a firm of attorneys selected by the District of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia.
Bond Register. The term “Bond Register” means the books which the Trustee shall keep or cause to be kept on which the registration and transfer of the Bonds and any Parity Bonds shall be recorded.
Bonds. The term “Bonds” means the District’s Special Tax Bonds, Series 2026A issued on ____, 2026 in the aggregate principal amount of $___________.
Bond Year. The term “Bond Year” means the twelve month period commencing on September 2 of each year and ending on September 1 of the following year, except that the first Bond Year for the Bonds or an issue of Parity Bonds shall begin on the Delivery Date and end on the first September 1 which is not more than 12 months after the Delivery Date.
Business Day. The term “Business Day” means a day which is not a Saturday or Sunday or a day of the year on which banks or trust companies in New York, New York, Los Angeles, California, Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 115
Menifee Mayor and City Council
April 15, 2026
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or the city where the corporate trust office of the Trustee is located, are not required or authorized by law, regulation or executive order, to close or to remain closed.
Certificate of an Authorized Representative . The term “Certificate of an Authorized Representative” means a written certificate or warrant request executed by an Authorized Representative of the District.
City. The term “City” means the City of Menifee, County of Riverside, State of California.
City Council. The term “City Council” means the City Council of the City.
City Facilities Account. The term “City Facilities Account” means the account by that name created and established in the Acquisition and Construction Fund pursuant to Section 3.1 hereof.
Code. The term “Code” means the Internal Revenue Code of 1986, as amended, and any Regulations, rulings, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it.
Continuing Disclosure Certificate. The term “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate dated as of May 1, 2026, as originally executed by the District and as it may be from time to time amended or supplemented in accordance with its terms.
Costs of Issuance . The term “Costs of Issuance” means the costs and expenses incurred in connection with the formation of the District and the issuance and sale of the Bonds or any Parity Bonds, including the acceptance and initial annual fees and expenses of the Trustee and its counsel, legal fees and expenses, costs of printing the Bonds and Parity Bonds and the preliminary and final official statements for the Bonds and Parity Bonds, fees of financial consultants, costs of the appraisal and all other related fees and expenses, including reimbursement to property owners within the District for design, engineering and legal costs, as set forth in a Certificate of an Authorized Representative of the District.
Costs of Issuance Account. The term “Costs of Issuance Account” means the account by that name created and established in the Acquisition and Construction Fund pursuant to Section 3.1 hereof.
Delivery Date. The term “Delivery Date” means, with respect to the Bonds and each issue of Parity Bonds, the date on which the bonds of such issue were issued and delivered to the initial purchasers thereof.
Depository. The term “Depository” means The Depository Trust Company, New York, New York, and its successors and assigns as securities depository for the Bonds, or any other securities depository acting as Depository under Article II hereof.
Direct Debt for District Property. The term “Direct Debt for District Property” means that portion of the aggregate principal amount of the Outstanding Bonds and Parity Bonds which is allocable to the property in the District.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 116
Menifee Mayor and City Council
April 15, 2026
Page
709 of 909
6 4932-7851-2527/200299-0032
District. The term “District” means Community Facilities District No. 2024-1 (Banner Park II) of the City of Menifee established pursuant to the Act and Resolution No. 24-1470 adopted by the City Council of the City on August 7, 2024.
Event of Default . The term “Event of Default” means an event described in Section 8.1 hereof.
Fiscal Year. The term “Fiscal Year” means the period beginning on July 1 of each year and ending on the following June 30.
Gross Taxes. The term “Gross Taxes” means the amount of all Special Taxes received by the District together with the proceeds collected from the sale of property pursuant to foreclosure for the delinquency of such Special Taxes remaining after the payment of all costs related to such foreclosure actions.
Indenture. The term “Indenture” means this Bond Indenture, together with any Supplemental Indenture approved pursuant to Article VI hereof.
Independent Financial Consultant . The term “Independent Financial Consultant” means a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field, appointed and paid by the District, who, or each of whom: (1) is in fact independent and not under the domination of the District or the City; (2) does not have any substantial interest, direct or indirect, in the District or the City; and (3) is not connected with the District or the City as a member, officer or employee of the District or the City, but who may be regularly retained to make annual or other reports to the District or the City.
Interest Account. The term “Interest Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.
Interest Payment Date . The term “Interest Payment Date” means September 1, 2026 and each March 1 and September 1 thereafter; provided, however, that, if any such day is not a Business Day, interest up to the Interest Payment Date will be paid on the Business Day next succeeding such date.
Investment Agreement. The term “Investment Agreement” means one or more agreements for the investment of funds of the District complying with the criteria therefor as set forth in subsection (2)(h) of the definition of Authorized Investments herein.
Maximum Annual Debt Service . The term “Maximum Annual Debt Service” means the maximum sum obtained for any Bond Year prior to the final maturity of the Bonds and any Parity Bonds by adding the following for each Bond Year: (1) the principal amount of all Outstanding Bonds and Parity Bonds payable in such Bond Year either at maturity or pursuant to a Sinking Fund Payment; and (2) the interest payable on the aggregate principal amount of all Bonds and Parity Bonds Outstanding in such Bond Year if the Bonds and Parity Bonds are retired as scheduled.
Moody’s. The term “Moody’s” means Moody’s Investors Service, Inc., its successors and assigns.
Net Taxes . The term “Net Taxes” means Gross Taxes minus amounts set aside to pay Administrative Expenses.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 117
Menifee Mayor and City Council
April 15, 2026
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7 4932-7851-2527/200299-0032
Nominee. The term “Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.16 hereof.
Ordinance. The term “Ordinance” means Ordinance No. 2024-399 adopted by the City Council on August 21, 2024 providing for the levying of the Special Tax.
Outstanding. The terms “Outstanding” or “Outstanding Bonds and Parity Bonds” means all Bonds and Parity Bonds theretofore issued by the District, except: (i) Bonds and Parity Bonds theretofore cancelled or surrendered for cancellation in accordance with Section 10.1 hereof; (ii) Bonds and Parity Bonds for payment or redemption of which monies shall have been theretofore deposited in trust (whether upon or prior to the maturity or the redemption date of such Bonds or Parity Bonds), provided that, if such Bonds or Parity Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in this Indenture or any applicable Supplemental Indenture for Parity Bonds; and (iii) Bonds and Parity Bonds which have been surrendered to the Trustee for transfer or exchange pursuant to Section 2.9 hereof or for which a replacement has been issued pursuant to Section 2.10 hereof.
Overlapping Debt. The term “Overlapping Debt” means with respect to any property within the District, the sum of (a) the aggregate amount of all unpaid assessments which are a lien on such property and which are pledged to secure the repayment of bonds, plus (b) a portion of the principal amount of any outstanding bonds of other community facilities districts which are payable at least partially from special taxes to be levied on such property (the “Other CFD Bonds”) determined by multiplying the aggregate principal amount of the Other CFD Bonds by a fraction, the numerator of which is the amount of special taxes levied for the Other CFD Bonds on such property and the denominator of which is the total amount of special taxes levied for the Other CFD Bonds on all parcels of property which are subject to the levy of such special taxes, based upon information which is available for the then current Fiscal Year.
Owner. The term “Owner” means the person or persons in whose name or names any Bond or Parity Bond is registered.
Parity Bonds. The term “Parity Bonds” means all bonds, notes or other similar evidences of indebtedness hereafter issued, payable out of the Net Taxes and which, as provided in this Indenture or any Supplemental Indenture, rank on a parity with the Bonds.
Participants. The term “Participants” means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Bonds or Parity Bonds as securities depository.
Person. The term “Person” means natural persons, firms, corporations, partnerships, associations, trusts, public bodies and other entities.
Prepayments. The term “Prepayments” means any amounts paid by the District to the Trustee and designated by the District as a prepayment of Special Taxes for one or more parcels in the District made in accordance with the RMA.
Principal Account. The term “Principal Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 118
Menifee Mayor and City Council
April 15, 2026
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711 of 909
8 4932-7851-2527/200299-0032
Principal Office of the Trustee . The term “Principal Office of the Trustee” means the office of the Trustee located in Costa Mesa, California, or such other office or offices as the Trustee may designate from time to time, or the office of any successor Trustee where it principally conducts its business of serving as trustee under indentures pursuant to which municipal or governmental obligations are issued.
Project. The term “Project” means those public facilities described in the Resolution of Formation which are to be acquired or constructed within and outside of the District, including all engineering, planning and design services and other incidental expenses related to such facilities and other facilities, if any, authorized by the qualified electors within the District from time to time.
Project Costs. The term “Project Costs” means the amounts necessary to finance the Project, to create and replenish any necessary reserve funds, to pay the initial and annual costs associated with the Bonds or any Parity Bonds, including, but not limited to, remarketing, credit enhancement, Trustee and other fees and expenses relating to the issuance of the Bonds or any Parity Bonds and the formation of the District, and to pay any other “incidental expenses” of the District, as such term is defined in the Act.
Rating Agency. The term “Rating Agency” means Moody’s or S&P, or both, as the context requires.
Rebate Account. The term “Rebate Account” means the account by that name created and established in the Rebate Fund pursuant to Section 3.1 hereof.
Rebate Fund. The term “Rebate Fund” means the fund by that name established pursuant to Section 3.1 hereof in which there are established the Accounts described in Section 3.1 hereof.
Rebate Regulations. The term “Rebate Regulations” means any final, temporary or proposed Regulations promulgated under Section 148(f) of the Code.
Record Date. The term “Record Date” means the fifteenth day of the month preceding an Interest Payment Date, regardless of whether such day is a Business Day.
Redemption Account . The term “Redemption Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.
Regulations. The term “Regulations” means the regulations adopted or proposed by the Department of Treasury from time to time with respect to obligations issued pursuant to Section 103 of the Code.
Representation Letter. The term “Representation Letter” means the Blanket Letter of Representations from the District to the Depository as described in Section 2.13 hereof.
Reserve Account. The term “Reserve Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof. “Reserve Policy” means a letter of credit, insurance policy, surety bond or other such funding instrument issued by a municipal bond insurance company rated least “Aa2” or higher by Moody’s or “AA” or higher by S&P, delivered to the Trustee for the purpose of providing all or a portion of the Reserve Requirement for Bonds and Parity Bonds.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 119
Menifee Mayor and City Council
April 15, 2026
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Reserve Requirement. The term “Reserve Requirement” means that amount as of any date of calculation equal to the lesser of: (i) 10% of the initial principal amount of the Bonds and Parity Bonds, if any; (ii) Maximum Annual Debt Service on the then Outstanding Bonds and Parity Bonds, if any; (iii) 125% of average Annual Debt Service on the then Outstanding Bonds and Parity Bonds, if any; provided, however, that the Reserve Requirement shall not exceed $1,005,199.06 except in connection with the issuance of Parity Bonds.
Resolution of Formation. The term “Resolution of Formation” means Resolution No. 24- 1470 adopted by the City Council on August 7, 2024, pursuant to which the City Council established the District.
RMA. The term “RMA” means the Rate and Method of Apportionment of Special Tax for the District approved by the qualified electors of the District at the August 7, 2024 election.
School Facilities Account. The term “School Facilities Account” means the account by that name created and established in the Acquisition and Construction Fund pursuant to Section 3.1 hereof.
Sinking Fund Payment. The term “Sinking Fund Payment” means the annual payment to be deposited in the Redemption Account to redeem a portion of the Term Bonds in accordance with the schedules set forth in Section 4.1(b) hereof and any annual sinking fund payment schedule to retire any Parity Bonds which are designated as Term Bonds.
Six-Month Period. The term “Six -Month Period” means the period of time beginning on the Delivery Date of each issue of Bonds or Parity Bonds, as applicable, and ending six consecutive months thereafter, and each six-month period thereafter until the latest maturity date of the Bonds and the Parity Bonds (and any obligations that refund an issue of the Bonds or Parity Bonds).
Special Tax Administrator . The term “Special Tax Administrator” means the individual or entity appointed by the City to administer the calculation and collection of the Special Taxes.
Special Tax Fund. The term “Special Tax Fund” means the fund by that name created and established pursuant to Section 3.1 hereof.
Special Taxes . The term “Special Taxes” means the taxes authorized to be levied by the District on property within the District in accordance with the Ordinance, the Resolution of Formation, the Act and the voter approval obtained at the August 7, 2024 election in the District, including any scheduled payments and any Prepayments thereof, the net proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien and penalties and interest thereon; provided that any delinquent Special Tax sold to an independent third-party or to the City for 100% of the delinquent amount shall no longer be pledged hereunder to the payment of the Bonds or Parity Bonds.
S&P. The term “S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, its successors and assigns.
Subaccount. The term “Subaccount” means any subaccount created pursuant to this Indenture.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 120
Menifee Mayor and City Council
April 15, 2026
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Supplemental Indenture . The term “Supplemental Indenture” means any supplemental indenture amending or supplementing this Indenture.
Surplus Fund. The term “Surplus Fund” means the fund by that name created and established pursuant to Section 3.1 hereof.
Tax Certificate. The term “Tax Certificate” means the certificate by that name to be executed by the District on a Delivery Date to establish certain facts and expectations and which contains certain covenants relevant to compliance with the Code.
Tax-Exempt. The term “Tax -Exempt” means, with reference to an Authorized Investment, an Authorized Investment the interest earnings on which are excludable from gross income for federal income tax purposes pursuant to Section 103(a) of the Code, other than one described in Section 57(a)(5)(C) of the Code.
Taxable Property. The term “Taxable Property” has the meaning ascribed to it in the RMA.
Term Bonds . The term “Term Bonds” means the Bonds maturing on September 1, 2038, September 1, 2043, September 1, 2048 and September 1, 2053 and any term maturities of an issue of Parity Bonds as specified in a Supplemental Indenture.
Trustee. The term “Trustee” means Wilmington Trust, National Association, a national banking association duly organized and existing under the laws of the United States, at its principal corporate trust office in Costa Mesa, California, and its successors or assigns, or any other bank or trust company which may at any time be substituted in its place as provided in Sections 7.2 or 7.3, and any successor thereto.
Underwriter. The term “Underwriter” means, with respect to the Bonds, Stifel, Nicolaus & Company, Incorporated, and with respect to each issue of Parity Bonds, the institution or institutions, if any, with whom the District enters into a purchase contract for the sale of such issue.
Value of District Property. The term “Value of District Property” means for all parcels of property in the District which are subject to the levy of the Special Taxes and not delinquent in the payment of any Special Taxes then due and owing, either (i) the fair market value, as of the date of the appraisal provided for below of such parcels, including with respect to such parcels the value of the then existing improvements thereon, as estimated by an appraiser, who shall be a State of California certified general real estate appraiser selected and employed by the District, in an appraisal performed within ninety (90) days preceding the date of such determination based upon a methodology of valuation consistent with the City’s policy for appraisals, provided that a mass appraisal methodology may be applied when valuing Developed Property (as defined in the RMA); or (ii) the full cash value of any or all of such parcels, including with respect to such parcels the value of the improvements thereon, as set forth on the last equalized assessment roll of the County Assessor of the County of Riverside.
Water Facilities Account . The term “Water Facilities Account” means the account by that name created and established in the Acquisition and Construction Fund pursuant to Section 3.1 hereof.
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 121
Menifee Mayor and City Council
April 15, 2026
Page
714 of 909
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ARTICLE II
GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds and Parity Bonds.
Under and pursuant to the Act, the Bonds in the aggregate principal amount of $___________ , together with any Parity Bonds authorized by the City Council in accordance with Section 9.2 hereof, shall be issued for the purposes of financing and/or refinancing the Project, paying Costs of Issuance, funding the Reserve Account and funding capitalized interest; provided that the aggregate principal amount of the Bonds and any Parity Bonds shall not exceed the total indebtedness presently authorized or subsequently authorized by the qualified electors within the District in accordance with the Act. The Bonds and any Parity Bonds shall be and are limited obligations of the District and shall be payable as to the principal thereof and interest thereon and any premiums upon the redemption thereof solely from the Net Taxes and the other amounts in the Special Tax Fund (other than amounts in the Administrative Expense Account of the Special Tax Fund).
Section 2.2. Type and Nature of Bonds and Parity Bonds . Neither the faith and credit nor the taxing power of the City, the State of California, or any political subdivision thereof other than the District is pledged to the payment of the Bonds or any Parity Bonds. Except for the Net Taxes, no other taxes are pledged to the payment of the Bonds or any Parity Bonds. The Bonds and any Parity Bonds are not general or special obligations of the City nor general obligations of the District, but are limited obligations of the District payable solely from certain amounts deposited by the District in the Special Tax Fund (exclusive of the Administrative Expense Account), as more fully described herein. The District’s limited obligation to pay the principal of, premium, if any, and interest on the Bonds and any Parity Bonds from amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) is absolute and unconditional, free of deductions and without any abatement, offset, recoupment, diminution or set -off whatsoever. No Owner of the Bonds or any Parity Bonds may compel the exercise of the taxing power by the District (except as pertains to the Special Taxes) or the City or the forfeiture of any of their property. The principal of and interest on the Bonds and any Parity Bonds and premiums upon the redemption thereof, if any, are not a debt of the City, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction. The Bonds and any Parity Bonds are not a legal or equitable pledge, charge, lien, or encumbrance upon any of the District’s property, or upon any of its income, receipts or revenues, except the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) which are, under the terms of this Indenture and the Act, set aside for the payment of the Bonds, any Parity Bonds and interest thereon, and neither the members of the legislative body of the District or the members of the City Council nor any persons executing the Bonds or any Parity Bonds are liable personally on the Bonds or any Parity Bonds, by reason of their issuance.
Notwithstanding anything to the contrary contained in this Indenture, the District shall not be required to advance any money derived from any source of income other than the Net Taxes for the payment of the interest on or the principal of the Bonds or any Parity Bonds, or for the performance of any covenants contained herein. The District may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose.
Section 2.3. Equality of Bonds and Parity Bonds and Pledge of Net Taxes . Pursuant to the Act and this Indenture, the Bonds and any Parity Bonds shall be equally payable from and secured by a first pledge of and lien on the Net Taxes and other amounts in the Special Tax Fund Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 122
Menifee Mayor and City Council
April 15, 2026
Page
715 of 909
12 4932-7851-2527/200299-0032
(exclusive of the Administrative Expense Account), without priority for number, date of the Bonds or Parity Bonds, date of sale, date of execution, or date of delivery, and the payment of the interest on and principal of the Bonds and any Parity Bonds and any premiums upon the redemption thereof, shall be exclusively paid from the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) which are hereby set aside for the payment of the Bonds and any Parity Bonds; provided that any delinquent Special Tax sold to an independent third- party or to the City for 100% of the delinquent amount shall no longer be pledged hereunder to the payment of the Bonds or Parity Bonds. Amounts in the Special Tax Fund (other than the Administrative Expense Account therein) shall constitute a trust fund held for the benefit of the Owners to be applied to the payment of the interest on and principal of the Bonds and any Parity Bonds and, so long as any of the Bonds and any Parity Bonds or interest thereon remain Outstanding, shall not be used for any other purpose, except as permitted by this Indenture or any Supplemental Indenture.
Notwithstanding any provision contained in this Indenture to the contrary, Net Taxes deposited in the Rebate Fund and the Surplus Fund shall no longer be considered to be pledged to the Bonds or any Parity Bonds, and none of the Rebate Fund, the Surplus Fund, the Acquisition and Construction Fund or the Administrative Expense Account of the Special Tax Fund shall be construed as a trust fund held for the benefit of the Owners.
Nothing in this Indenture or any Supplemental Indenture shall preclude: (i ) subject to the limitations contained hereunder, the redemption prior to maturity of any Bonds or Parity Bonds subject to call and redemption and payment of said Bonds or Parity Bonds from proceeds of refunding bonds issued under the Act as the same now exists or as hereafter amended, or under any other law of the State of California; or (ii) the issuance, subject to the limitations contained herein, of Parity Bonds which shall be payable from Net Taxes.