3 2
5 5
A 10% warranty security 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 on the following page.
TABLE 1 - ORIGINAL POSTED STREETS, DRAINAGE, WATER AND SEWER SECURITY Improvement Security No.
Performance /
Material
Faithful
Performance
Material and
Labor
Streets/Drainage 800047307 $ 1,385,000 $ 692,500
Water System 800047307 $ 160,500 $ 80,250
Recycled Water System 800047307 $ 39,000 $ 19,500
Sewer System 800047307 $ 167,000 $83,500
Total $ 1,751,500 $ 875,750
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 the approved Fiscal Year 2025/2026 operating budgets in Community Facilities District 2015-2 Zone 35.
ATTACHMENTS
1. Project Map
2. Agreement
3. Bond
4. Notice of Completion
Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 2
Menifee Mayor and City Council
May 6, 2026
Page
225 of 714
PARCEL MAP 37624-1
McCall Boulevard
Menifee Road
Junipero Road
Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 3
Menifee Mayor and City Council
May 6, 2026
Page
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DocuSign Envelope ID: 3FEBDD7D-F4B7-40EF-86B2-03B398FDDBA9 Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 4
Menifee Mayor and City Council
May 6, 2026
Page
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DocuSign Envelope ID: 3FEBDD7D-F4B7-40EF-86B2-03B398FDDBA9 Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 5
Menifee Mayor and City Council
May 6, 2026
Page
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DocuSign Envelope ID: 3FEBDD7D-F4B7-40EF-86B2-03B398FDDBA9 Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 6
Menifee Mayor and City Council
May 6, 2026
Page
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DocuSign Envelope ID: 3FEBDD7D-F4B7-40EF-86B2-03B398FDDBA9 Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 7
Menifee Mayor and City Council
May 6, 2026
Page
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DocuSign Envelope ID: 3FEBDD7D-F4B7-40EF-86B2-03B398FDDBA9 5/27/2020
Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 8
Menifee Mayor and City Council
May 6, 2026
Page
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DocuSign Envelope ID: 3FEBDD7D-F4B7-40EF-86B2-03B398FDDBA9 Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 9
Menifee Mayor and City Council
May 6, 2026
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Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 10
Menifee Mayor and City Council
May 6, 2026
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Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 11
Menifee Mayor and City Council
May 6, 2026
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Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 12
Menifee Mayor and City Council
May 6, 2026
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Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 13
Menifee Mayor and City Council
May 6, 2026
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Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 14
Menifee Mayor and City Council
May 6, 2026
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Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 15
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 16
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 17
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.9
Public Improvement Acceptance and 90% Release of Security for Parcel Map 37624-1, McCall Square, by Heritage Square Menifee, LLC Item Page Number: 18
Menifee Mayor and City Council
May 6, 2026
Page
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CITY OF MENIFEE
SUBJECT: Notice of Completion and Acceptance for the Beth Drive Street improvements Project
MEETING DATE: May 6, 2026
TO: Mayor and City Council
PREPARED BY: Diego Guillen, Senior Engineer
REVIEWED BY: Nick Fidler, Public Works Director
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------
RECOMMENDED ACTION
1. Accept the improvements for the Beth Drive Street Improvements Project, Capital Improvement Project (CIP) No. 22-28; and
2. Authorize the City Clerk to file a Notice of Completion with the Riverside County Recorder’s Office.
DISCUSSION
The Beth Drive Street Improvements – Murrieta Road to Melvin Street Project, CIP Project No. 22-28 (Project), rehabilitated the section of Beth Drive within the Project limits by removing the existing damaged asphalt concrete (AC) dike and adjacent AC pavement and installed approximately 1,200 linear feet of concrete curb and gutter. These improvements provide for effective surface flow of storm water, allowing Beth Drive to sustain heavy rain events and preventing deterioration of the roadway's condition. The Project supports the City’s Connectivity and Mobility Strategic Plan Objective of enhancing accessibility and linking the community with sustainable infrastructure to meet the City’s needs.
On September 3, 2025, the City Council approved a construction contract (Contract) with NPG, Inc. (Contractor) in the amount of $208,977. One contract change order (CCO) was approved by City Council on February 6, 2026, for a total of $48,447, which increased the total not-to-exceed Contract amount to $257,424, as shown in Table 1 on the following page. Overall Project budget in the amount of $305,200 was originally established and the Project was completed under budget, for a final construction cost totaling $259,224, which includes CCO No. 1 and ancillary costs such as materials testing and labor compliance services.
Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 1
Menifee Mayor and City Council
May 6, 2026
Page
242 of 714
City of Menifee Staff Report
CIP 22-28 Beth Drive Improvements NOC
May 6, 2026
3 2
5 6
TABLE 1 – CONTRACT ACTIVITY SUMMARY
Contract Activity Approval Date Summary of Changes Amount Original Contract September 3, 2025 Original construction services $208,977 CCO No. 1 February 4, 2026 Additional labor and materials for cross slope correction
$48,447
TOTAL $257,424
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
Connectivity and Mobility
FISCAL IMPACT
There is no fiscal impact associated with the acceptance of the improvements related to the Project. All costs to complete the Project were supported within previously approved CIP budgets.
ATTACHMENTS
1. Project Location Map
2. Notice of Completion
3. Closeout Documents
Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 2
Menifee Mayor and City Council
May 6, 2026
Page
243 of 714
Beth
Ave
Melvin St
Beth Dr
Thistletown Ct
Murrieta Rd
Rolling Hills Dr
LAKE ELSINORE
Murrieta Rd
CIP Project 22-28
Project Site
Menifee Roads
0 0.03 0.06
Miles
Path: C:\Users\awilliams\AppData\Local\Temp\ArcGISProTemp96516\62cd099b-67be-4dc6-89cf-87f278c0dec6\Untitled.aprx Date: 8/5/2025 ¹
Beth Drive Street Improvements (CIP 22-28)
Project Location Map
Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 3
Menifee Mayor and City Council
May 6, 2026
Page
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4 8
8 3
3 Recording Requested By:
CITY OF MENIFEE
After Recording Mail To:
CITY CLERK
CITY OF MENIFEE
29844 HAUN ROAD
MENIFEE, CA 92586
Record without fee subject to Govt. Code 6103
NOTICE OF COMPLETION
(Public Works – Civil Code Sec. 9204)
BETH DRIVE STREET IMPROVEMENTS PROJECT, CIP 22-28
Notice is hereby given that work of improvements on the project herein described was accepted as completed on May 6, 2026. The project consisted of the removal of 1,200 linear feet of AC curb, and replacing with concrete curb, gutter and construction of a valley gutter. This project is located west of the 215 freeway and north of Scott Road.
The major crossroads are Craig Avenue. & Murrieta Road. This portion of the project is along Beth Drive, from Melvin Street to Murrieta Road. The project was completed in the city right-of-way in the City of Menifee, County of Riverside, State of California.
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 for such work of construction is:
NPG, INC.
1354 JET WAY
PERRIS, CA 92571
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 Completion, 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 penalty of perjury under the laws of the state of California; that I make this verification on _________________, 20___ for and on behalf of the City.
_____________________________
Stephanie Roseen, City Clerk
_____________________________
Nick Fidler, Public Works Director
Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 4
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 5
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 6
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 7
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 8
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 9
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 10
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 11
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 12
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 13
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 10.10
Notice of Completion and Acceptance for the Beth Drive Street improvements Project
Item Page Number: 14
Menifee Mayor and City Council
May 6, 2026
Page
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CITY OF MENIFEE
SUBJECT: Notice of Completion and Acceptance for the Kay Ceniceros Senior Center Roof Rehabilitation Project
MEETING DATE: May 6, 2026
TO: Mayor and City Council
PREPARED BY: Nancy Rodriguez, Management Analyst II
REVIEWED BY: Mariana Mitchell, Community Services Director APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------
RECOMMENDED ACTION
1. Accept the improvements for the Kay Ceniceros Senior Center Roof Rehabilitation Project Capital Improvement Project (CIP No. 26-07), located at 29995 Evans Road; and
2. Authorize the City Clerk’s office to file the Notice of Completion with the Riverside County Recorder’s office.
DISCUSSION
The Kay Ceniceros Senior Center campus (KC Senior Center) is used to provide services to all City residents and nonresidents. Services provided at the KC Senior Center include but are not limited to free senior lunches and activities, youth and adult classes, event rentals and staff workstations. As part of the FY 2025/26 CIP Budget, Council approved the rehabilitation of the center’s roof due to the age of the facility and the increase in damage and water leaks.
On February 20, 2026, the City executed an agreement with KRGS Roofing, Inc. for the rehabilitation of the Kay Ceniceros Senior Center Roof for a total not-to-exceed $30,500. The work consisted of roof preparation and cleaning, the reinforcement of roof penetrations as needed, and the application of a commercial grade Silicone Roof Coating to a 7,500 square foot roof space. The contract also detailed the requirement of a silicone coating that includes a 20- year protection and NDL warranty. One change order was necessary for this project totaling $2,500. The final construction cost for the project was $33,000.
Filing a Notice of Completion (NOC) protects the City from future claims against the project by providing proper notification to each contractor, subcontractor, and material supplier that the project has been completed. The payment bond (Labor and Materials Bond) and performance Item Title: 10.11
Notice of Completion and Acceptance for the Kay Ceniceros Senior Center Roof Rehabilitation Project
Item Page Number: 1
Menifee Mayor and City Council
May 6, 2026
Page
256 of 714
City of Menifee Staff Report
CIP No. 26-07, Notice of Completion
April 1, 2026
3 2
0 4
bond will be released 30 days following the date of the NOC recordation, provided no stop notices are filed preventing said releases.
STRATEGIC PLAN OBJECTIVE
Safe and Vibrant Community
FISCAL IMPACT
There is no fiscal impact associated with the acceptance of the improvements related to the Project. All costs to complete the Project were supported within previously approved CIP budgets.
ATTACHMENTS
1. Notice of Completion
Item Title: 10.11
Notice of Completion and Acceptance for the Kay Ceniceros Senior Center Roof Rehabilitation Project
Item Page Number: 2
Menifee Mayor and City Council
May 6, 2026
Page
257 of 714
Recording Requested By:
CITY OF MENIFEE
After Recording Mail To:
CITY CLERK
CITY OF MENIFEE
29844 HAUN ROAD
MENIFEE, CA 92586
Record without fee subject to Govt. Code 6103
NOTICE OF COMPLETION
(Public Works – Civil Code Sec. 9204)
KRGS Roofing, Inc., CIP No. 26-07
Notice is hereby given that:
Work of improvements on the project herein described were accepted as complete on April 7, 2026. The project consisted of the application of a commercial grade Silicone Roof Coating to a 7,500 square foot roof space. The project was completed at the Kay Ceniceros Senior Center located at 29995 Evans Road, in the City of Menifee, County of Riverside, State of California.
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:
KAY CENICEROS SENIOR CENTER
29995 EVANS ROAD,
MENIFEE, CA 92586
4. The name of the contractor for such work of construction is:
KRGS Roofing, Inc.
660 Weng Star Street
Beaumont, CA 92223
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 Completion, 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 penalty of perjury under the laws of the state of California; that I make this verification on _________________, 20___ for and on behalf of the City.
_____________________________
Stephanie Roseen, City Clerk
Item Title: 10.11
Notice of Completion and Acceptance for the Kay Ceniceros Senior Center Roof Rehabilitation Project
Item Page Number: 3
Menifee Mayor and City Council
May 6, 2026
Page
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CITY OF MENIFEE
SUBJECT: Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
MEETING DATE: May 6, 2026
TO: Mayor and City Council
PREPARED BY: Edna Lebron, Senior Management Analyst
REVIEWED BY: Orlando Hernadez, Community Development Director APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------
RECOMMENDED ACTION
1. Adopt a resolution approving the City’s Community Development Block Grant (CDBG) Program Year 2026/2027 Annual Action Plan; and
2.Authorize the City Manager or his designee to execute all necessary grant-related documents to receive CDBG funds.
DISCUSSION
The City of Menifee elected to become a CDBG entitlement jurisdiction beginning July 1, 2012.
This entitlement status enables the City to receive funds directly from the Federal Department of Housing and Urban Development (HUD) for distribution and expenditure within the City and allows the City Council to have greater control of the use of the funds and ensure greater accountability to Menifee residents. Program Year (PY) 2026/2027 will be the 15 th year the City of Menifee participates in the CDBG Program as an entitlement community.
As a recipient of annual CDBG grant funds, the City assists with the enhancement and support of low to moderate-income populations within the City of Menifee through the delivery of various programs and activities. Each year, the City must prepare and submit to HUD an Annual Action Plan, which identifies all the programs/activities to be completed in the upcoming program year, which runs from July 1 st to June 30 th. The Annual Action Plan is formally approved by the City Council at a Public Hearing. The Annual Action Plan generally includes the following main categories of activities/programs:
•Planning/Administration (20% Cap)
•Fair Housing Services (Mandatory for Participation)
•Public Services (15% Cap)
•Housing (Senior Minor Home Rehabilitation Grant Program) •Public Facilities/Infrastructure Projects
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 1
Menifee Mayor and City Council
May 6, 2026
Page
259 of 714
City of Menifee Staff Report
CDBG PY 2026/2027 Annual Action Plan
May 6, 2026
3 2
6 5
On December 19, 2025, the City posted a Notice of Funding Availability (NOFA) and released the Public Services Application Booklet. Applications for Public Service funds requests were due on February 19, 2026. On March 23, 2026, the Menifee Citizen Advisory Committee (MCAC) reviewed the funding proposals received and formulated their Public Services program funding recommendations for City Council consideration. The minimum grant amount for any Public Services established by the CDBG Administrator is set at $10,000. MCAC determines funding levels for Public Services based on the five criteria listed below, each weighted at 10 points:
1) Need – Level of need within the City.
2) Benefit – Percentage of Low- and Moderate-Income (LMI) persons served. 3) Readiness – Program is ready for immediate implementation, with systems and staff in place, and able to be completed by June 30, 2027.
4) Applicant Capacity/Past Performance – Experience with CDBG and other grants, ability to manage documentation, reporting, and reimbursements, and overall financial stability. 5) Alignment with City Objectives – Degree of alignment with City priorities as identified in the Community Needs Assessment and Consolidated Plan.
The MCAC’s Public Services program recommendations are summarized in Table 1 and are included within the proposed 2026/2027 Annual Action Plan. 2026/2027 Annual Action Plan
HUD released its allocation on April 3, 2026, awarding the City $670,960 - an increase of $40,053 from the current year.
TABLE 1 - PY 2026/2027 CDBG PUBLIC SERVICES
Organizations Requested MCAC Recommended
1.Boys & Girls Club of Inland Valley $10,000 $10,000
2.Family Service Association (FSA) $20,000 $15,644
3.Habitat for Humanity Inland Valley $25,000 $10,000
4.Hospice of the Valleys $10,000 $10,000
5.Menifee Valley Community Cupboard $20,000 $20,000
6.SAFE Family Justice Centers $11,000 $10,000
7.Thrifting 4 Gifting (Formally Assistance League) $15,000 $15,000
8.Voices for Children $10,000 $10,000
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 2
Menifee Mayor and City Council
May 6, 2026
Page
260 of 714
City of Menifee Staff Report
CDBG PY 2026/2027 Annual Action Plan
May 6, 2026
3 2
6 5
Table 2 summarizes the funding plan included within the proposed 2026/2027 Annual Action Plan.
TABLE 2 – PY 2026/2027 CDBG BREAKDOWN
Description Amount
Planning & Administration (20% Maximum Cap) $134,192.00 Administration 110,192.00
Fair Housing Services 24,000.00
Minor Home Rehabilitation Grant Program (MHRGP) $436,124.00 *Activity Delivery Cost (ADC) 40,000.00
**Minor Homer Rehabilitation Grant Program (MHRGP) 396,124.00 Public Services (15% Maximum Cap) $ 100,644.00
Boys and Girls Club of Menifee Valley 10,000.00
Family Service Association (FSA) 15,644.00
Habitat for Humanity Inland Valley 10,000.00 Hospice of the Valleys 10,000.00
Menifee Valley Community Cupboard 20,000.00
SAFE Family Justice Centers 10,000.00
Thrifting 4 Gifting 15,000.00
Voices for Children 10,000.00
Grant Total $670,960.00
*The ADC contributes to funding the salary of the part-time management aide who supports the administration of the MHRGP, thereby reducing the burden on the general fund. **Staff recommends increasing funding for the MHRGP, as demand for the program remains exceptionally high despite the waiting list being closed. Additional funding would allow the program to serve 16 more residents, raising total annual participation to 26, compared to the typical 10 residents served each year.
STRATEGIC PLAN OBJECTIVE
Thriving Economy
FISCAL IMPACT
The fiscal impact for the acceptance of the grant is $670,960 in both revenue and expenditures, an increase of $110,960 from the adopted budget of $560,000, to be recognized in Mid-Cycle FY 2026/2027. There is no match required by the City through the CDBG program.
The revised FY 2026/2027 budget for CDBG will be presented with the City Budget and will generally be as follows, based on a draft allocation of $670,960 as shown on Table 3 on the following page.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 3
Menifee Mayor and City Council
May 6, 2026
Page
261 of 714
City of Menifee Staff Report
CDBG PY 2026/2027 Annual Action Plan
May 6, 2026
3 2
6 5
TABLE 3 - BUDGET ACCOUNTS
Account Account # Adopted
Budget
Revised
Budget
Federal Grant
Revenue
2481-441000 $560,000.00 $670,960.00
Revenue Total $560,000.00 $670,960.00
Administration 2481-CDD-CDBG-413-Various 84,096.00 104,252.00 Legal Advertising 2481-CDD-CDBG-413-651400 3,000.00 3,000.00 Membership & Dues 2481-CDD-CDBG-413-652200 940.00 940.00 Professional Services 2481-CDD-CDBG-413-652800 56,365.00 2,000.00 Minor Home Repair 2481-CDD-CDBG-413-658014 306,112.00 436,124.00 Fair Housing Services 2481-CDD-CDBG-413-658043 23,000.00 24,000.00 Public Services 2481-CDD-CDBG-413-658044 84,487.00 100,644.00 Expense Total $560,000.00 $670,960.00
ATTACHMENTS
1. Annual Action Plan
2. Resolution
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 4
Menifee Mayor and City Council
May 6, 2026
Page
262 of 714
City of Menifee
Community Development Block Grant (CDBG)
Program
Annual Action Plan
Program Year 15: 2026/2027
Community Development
29844 Haun Road
Menifee, CA 92586
May 6, 2026
City Council Resolution No. 26-
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 5
Menifee Mayor and City Council
May 6, 2026
Page
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Table of Contents
AP-05 Executive Summary - 24 CFR 91.200(c), 91.220(b) ......................................................................... 3 PR-05 Lead & Responsible Agencies 24 CFR 91.200(b).............................................................................. 7 AP-10 Consultation - 91.100, 91.200(b), 91.215(l) .................................................................................... 8 AP-12 Citizen Participation ...................................................................................................................... 23 AP-15 Expected Resources - 91.220(c)(1,2)………………………………………………………………………………………..29 AP-20 Annual Goals and Objectives ........................................................................................................ 32 AP-35 Projects – 91.220(d) ...................................................................................................................... 34 AP-38 Project Summary .......................................................................................................................... 35 AP-50 Geographic Distribution – 91.220(f) ............................................................................................. 40 AP-55 Affordable Housing – 91.220(g) .................................................................................................... 41 AP-60 Public Housing – 91.220(h) ................................................................................................................. 43 AP-65 Homeless and Other Special Needs Activities – 91.220(i) ............................................................. 44 AP-75 Barriers to affordable housing – 91.220(j) .................................................................................... 47 AP-85 Other Actions – 91.220(k) ............................................................................................................. 48 AP-90 Program Specific Requirements – 91.220(l)(1,2,4) ....................................................................... 51 Alternate/Local Data Sources …………………………………………………………………………………………… Appendix A Citizen Participation and Consultation………………………………………………………………………………… Appendix B Resolution and City of Menifee Map of Eligible CDBG Areas…………………………………..…………. Appendix C
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
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Executive Summary
AP-05 Executive Summary - 24 CFR 91.200(c), 91.220(b)
1. Introduction
On May 4, 2022, the Menifee City Council adopted its Five-Year 2022-2027 Consolidated Plan, which described the City’s housing and community development needs, strategies, and activities to address those needs over a five-year period using entitlement grant funds provided by the U.S.
Department of Housing and Urban Development (HUD). The 2026/2027 Action Plan for the period starting on July 1, 2026, and ending on June 30, 2027, represents the fifth year in that five- year plan. The grant program is consistent with HUD’s national strategy to provide decent housing opportunities, a suitable living environment, and economic opportunities, particularly for low- and moderate-income persons.
Community Development Block Grant (CDBG)
The Housing and Community Development Act of 1974 created the CDBG Program. The primary objective of the CDBG Program is the development of viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for persons of low-and moderate-income. The CDBG regulations require that each activity meet one of the following national objectives:
• Benefit low- and moderate-income persons;
• Aid in the prevention or elimination of slums and blight; or • Meet other community development needs having a particular urgency.
Each year, the City certifies with the submission of its Annual Action Plan that it has given maximum feasible priority to activities that meet the first and second objectives above.
Additionally, the City certifies that no less than 70 percent of the CDBG funds received over a three-year certification period will be designed to benefit low- and moderate-income persons.
2026/2027 Program Year Funding
The City will receive $670,960 in Community Development Block Grant funds in the Fiscal Year 2026/2027.
Staff recommend that the Activity Delivery Cost for the Minor Home Repair Grant Program (MHRGP) be $40,000. Staff has increased the MHRGP funds over previous program years due to the high demand for the program. Many homeowners have felt the effects of the economy and can no longer stretch their budgets to include home repairs; therefore, this program remains very Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
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popular. The $40,000 in ADC would help offset the cost of the part -time management aide and senior management analyst who administers the program.
The following summarizes the funding plan included within the proposed 202 6/2027 Annual Action Plan:
2026/2027 CDBG Program
Public Service Activities
Capital Improvement Activities
Minor Home Repair Grant Program (MHRGP) 396,124 60,000
$410,090
*Activity Delivery Cost for MHRGP 40,000 Total $436,124
Program Administration
City of Menifee Administration 110,192 Comprehensive Fair Housing Program 24,000 Total $134,192
Grand Total $670,960
If additional funds become available during the program year from savings of completed projects or dropped projects, the City will increase the funding of the Minor Home Repairs Program as outlined in the 2026/2027 Annual Action Plan. No substantial amendments will be required for such an action.
2. Summary of the objectives and outcomes identified in the Plan Needs Assessment Overview
HUD’s Community Planning and Development (CPD) Outcome Performance Measurement Framework classifies objectives into three categories: decent housing, a suitable living environment, and economic opportunity. Based on the Needs Assessment and Market Analysis , the Strategic Plan within the Consolidated Plan Identifies six high priority needs to be addressed through the implementation of activities aligned with the six Strategic goals.
Boys & Girls Club of Menifee Valley 10,000
Family Service Association (FSA) 15,644
Habitat for Humanity 10,000
Hospice of the Valley 10,000
0 Menifee Valley Community Cupboard 20,000
SAFE Family Justice Centers
10,000
Thrifting 4 Gifting
Voices for Children
Vo
Voi
15,000
10,000
Voices for Children 10,000 $100 644
Item Title: 11.1
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The high-priority needs for Menifee are:
• Homelessness Prevention Services
• Improve Neighborhoods, Public Facilities, and Infrastructure • Economic Development
• Broadband Needs
• Provide Public Services for low-income residents
• Affordable Housing Prevention
Table 1 - Strategic Plan Summary
Goal
Name
Category Need(s)
Addressed
5-year Goal
Outcome
Indicator
2026/2027
Outcome
Indicator
1. Homelessness
Prevention
Services
Homeless
Prevent and
eliminate
homelessness
6,750 persons 1,920 persons
2. Improve
Neighborhoods,
Public Facilities,
and
Infrastructure
Improvements
Non-Housing
Community
Development
Neighborhood and
Infrastructure
Improvement
4,500 persons 0 persons
3. Economic
Development
Non-Housing
Community
Development
Micro Enterprise
Program
Job Creation
TBD TBD
4. Broadband Non-Housing
Community
Development
Broadband Needs TBD TBD
5. Services for low- and
moderate-income
residents
Public
Services
Provide Public
Services for low-
income residents
2,305 persons 873 persons
6. Affordable Housing
Preservation
Affordable
Housing
Preserved the supply
of affordable
housing
50 owner-occupied
units
26 owner-
occupied units
1. Evaluation of past performance
Comprehensively, the City has been able to meet most of the quantitative goals in the last five- Item Title: 11.1
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year cycle including:
• Senior Assistance (62+ years or older) in the forms of:
o 37 senior homes assisted via the city’s Senior Minor Repair program o 187 seniors assisted via Habitat for Humanity
o 749 meals provided
o 207seniors provided comprehensive hospice service
• 7,821 low-to-moderate income persons provided with emergency food distribution • 671 low-to-moderate income persons provided domestic violence services • 2751 low-to-moderate income persons provided fair housing and/or tenant services • 1185 persons benefitting from two community infrastructure projects o Sidewalk improvements (ADA ramps)
o Street improvements (resurfacing)
• 391 people experiencing homelessness were provided with homeless outreach and services
• 853 youths from low-to-moderate-income communities were provided services such as school clothing or after-school programs.
Projects underway for completion in the coming months include:
• Additional minor home repair projects under the MHRGP Program
2. Summary of citizen participation process and consultation process
The City adopted a new Citizen Participation Plan on May 3, 2017, that reflects regulatory changes and process improvements. In accordance with the City’s adopted Citizen Participation Plan, the City facilitated citizen participation through surveys, workshops, community meetings, and public hearings. Efforts were made to encourage participation by low- and moderate-income persons in areas where HUD funds are proposed to be used and by residents of predominantly low- and moderate-income neighborhoods. The City also made efforts to encourage the participation of minorities and non-English speaking persons, as well as persons with disabilities. The consultation process included representatives of the CoC, PHA, and other specified groups who completed surveys, provided local data, and assisted the City to ensure practical coordination of strategies to maximize impact and to avoid duplication of effort.
3. Summary of public comments
Item Title: 11.1
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In the development of the Action Plan, the City solicited applications from City Departments for housing and community development projects, the local fair housing agency, and the public services agencies. The draft Action Plan was available for public review and comment from April 3, 2026, to May 4, 2026. The City Council will convene a public hearing on May 6, 2026, to receive comments on the Action Plan.
4. Summary of comments or views not accepted and the reasons for not accepting them
TBD
5. Summary
Each year, the City of Menifee is required to prepare an Action Plan specifying how resources will be allocated to address the priorities established in the Consolidated Plan. The 2026/2027 Action Plan addresses four of the Strategic Plan Goals from the 2022-2027 Consolidated Plan by allocating $670,960 of CDBG funds to projects and activities to be implemented from July 1, 2026, to June 30, 2027.
PR-05 Lead & Responsible Agencies 24 CFR 91.200(b)
1. Describe agency/entity responsible for preparing the Consolidated Plan and those responsible for administration of each grant program and funding source The following is the agency responsible for preparing the Consolidated Plan and responsible for the administration of CDBG program.
Table 2 – Responsible Agencies
Agency Role Name Department/Agency
CDBG Administrator City of Menifee Community Development
Narrative
The Community Development Department of the City of Menifee is the lead department responsible for the administration of the CDBG program. The Community Development Department contracted the services of Michael Baker International to assist the City in the preparation of the 2022-2027 Consolidated Plan.
In the development of this Consolidated Plan, the city implemented a comprehensive citizen participation and consultation process and conducted a needs assessment and market analysis to identify levels of relative need regarding affordable housing, homeles sness, special needs, and community development. This information was gathered through consultation with public officials and local agencies, public outreach and community meetings, review of demographic and economic data, and housing market analysis.
In the implementation of the 2022-2027 Consolidated Plan and each of the five Annual Action Plans, Item Title: 11.1
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the Community Development Department shall be responsible for all grant planning, management, and monitoring duties necessary to comply with HUD regulations and City policy.
Consolidated Plan Public Contact Information
Edna I. Lebrón
Sr. Management Analyst
City of Menifee
29844 Haun Road
Menifee, CA 92586
(951) 723-3713
[email protected]
AP-10 Consultation - 91.100, 91.200(b), 91.215(l)
1. Introduction
In preparing the Consolidated Plan and the Assessment of Fair Housing, the City of Menifee consulted with representatives from multiple agencies, groups, and organizations involved in the development of affordable housing, creation of job opportunities for low- and moderate-income residents, and the provision of services to children, seniors, persons with special needs, persons with HIV/AIDS and their families, and homeless persons. To facilitate this consultation, the City solicited feedback through the following methods:
• Online Survey
• Individual stakeholder consultations
• Community meetings
• Public hearings
• Receipt of written comments
To gather the greatest depth of information, the City consulted with a wide variety of agencies, groups, and organizations concerning the housing, community, and economic development needs of the community. The primary agencies, groups, or organizations consulted can be found on the following pages. A comprehensive list of stakeholders is provided in Appendix B. The input received from these consultation partners helped establish the objectives and goals described in the Strategic Plan. Specific comments received from these organizations are included in Appendix B.
Provide a concise summary of the jurisdiction’s activities to enhance coordination between public and assisted housing providers and private and governmental health, mental health and service agencies (91.215(I)).
The City recognizes the importance of coordination and alignment among various service Item Title: 11.1
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providers to maximize the effectiveness of the CDBG program. As a result, during the development of the Consolidated Plan, the City consulted closely with organizations that provide assisted housing, health services, and other community-focused programs. Outreach efforts included surveys with specific questions associated with coordination, invitations to community meetings, workshops, and in-person interviews.
The City further recognized the importance of continued coordination and alignment during the preparation of the 2026/2027 Action Plan with these organizations and agencies. The City continues strengthening relationships and alignment among these organizations in the implementation of the NOFA process for CDBG funds and through technical assistance provided to sub-recipients of CDBG funds each year. The City monitors its affordable housing units every year to ensure compliance with State and Federal requirements, supports the County’s Section 8 program, and participates in the County’s Mortgage Credit Certification (MCC) program.
Describe coordination with the Continuum of Care and efforts to address the needs of homeless persons (particularly chronically homeless individuals and families, families with children, veterans, and unaccompanied youth) and persons at risk of homelessness The Continuum of Care of Riverside County (CoC) guides the development of homeless strategies and the implementation of programs to end homelessness throughout the region. The CoC is comprised of a network of public, private, faith-based, for-profit, and nonprofit service providers who utilize several federal, state, and local resources in providing services for homeless persons.
The County and its cities, including the City of Menifee, also provide resources for services that assist the homeless and those at risk of becoming homeless. The nonprofit and faith-based community plays a key role in the current CoC system. Hundreds of agencies throughout the County provide programs ranging from feeding the homeless on the street to creating permanent supportive housing opportunities. These services are available to homeless families with children as well as single men and women. The nonprofit and faith-based community also serves special needs populations, such as victims of domestic violence, veterans, persons with disabilities, and unaccompanied youth.
During the Five-Year Consolidated Planning process, the City provided a detailed questionnaire to the CoC to identify the CoC’s perceived needs in the County and its objectives to address the needs of different homeless populations, specifically chronically homeless families and individuals, families with children, veterans, unaccompanied youth and persons at risk of homelessness. Following the delivery and response to this questionnaire, the City followed up with the CoC to clarify existing needs and objectives and understand opportunities for collaboration and coordination during the five-year planning process.
Describe consultation with the Continuum(s) of Care that serves the jurisdiction's area in determining how to allocate ESG funds, develop performance standards and evaluate Item Title: 11.1
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outcomes, and develop funding, policies and procedures for the administration of HMIS In the development of the 2022 -2027 Consolidated Plan, the City of Menifee consulted forty - three housing, social services, and other entities involved in housing, community, and economic development in Menifee and throughout the region to obtain valuable information on priority needs in the City and how CDBG funds and other resources should be invested to provide decent affordable housing, a suitable living environment , and economic opportunities primarily for its low- and moderate-income residents. The CoC was consulted directly by telephone and email to discuss performance standards, outcomes, and policies and procedures for HMIS. The City was referred to the Ten-Year Plan to End Homelessness, the Point-in-Time homeless count, and other publicly available reports. The City does not receive any ESG funds.
Below (section 2) includes a representative listing of the entities consulted as part of the consultation process.
2. Describe Agencies, groups, organizations and others who participated in the process and describe the jurisdictions consultations with housing, social service agencies and other entities
Table 3 – Agencies, groups, organizations who participated
1 Agency/Group/Organization Fair Housing Council of Riverside County, Inc.
Agency/Group/Organization Type Service-Fair Housing
What section of the Plan was addressed by
Consultation?
Housing Needs Assessment
Other-Public Services
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
identifying fair housing needs within the City and
developing the market analysis and strategies.
2 Agency/Group/Organization YES place
Agency/Group/Organization Type Economic Development
What section of the Plan was addressed by
Consultation?
Housing Needs Assessment
Economic Development
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
housing needs and economic development
needs within the City and development market
analysis and strategies.
3 Agency/Group/Organization California Apartment Association Inland Empire Agency/Group/Organization Type Housing/Rental Property
Item Title: 11.1
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What section of the Plan was addressed by
Consultation?
Housing Needs Assessment
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
housing needs and economic development
needs within the City and development market
analysis and strategies.
4 Agency/Group/Organization Building Industry Association Agency/Group/Organization Type Housing Developer
What section of the Plan was addressed by
Consultation?
Housing Needs Assessment
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
housing needs within the City and
development market analysis and strategies.
5 Agency/Group/Organization Quail Valley Environmental Coalition Agency/Group/Organization Type Environmental
What section of the Plan was addressed by
Consultation?
Other - Environmental
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
environmental impact within the City and
development market analysis and strategies.
6 Agency/Group/Organization Riverside County Continuum of Care Agency/Group/Organization Type Services-homeless
What section of the Plan was addressed by
Consultation?
Homeless Needs - Chronically homeless
Homeless Needs – Families with children
Homelessness Needs – Veterans
Homelessness Needs - Unaccompanied
Youth How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
identifying needs of the homeless and
developing strategies to address those needs.
7 Agency/Group/Organization Assistance League of Temecula Valley Agency/Group/Organization Type Youth Services
Item Title: 11.1
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What section of the Plan was addressed by
Consultation?
Services – Youth Services
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
needs of at-risk you in the City and developing
strategies to address those needs.
8 Agency/Group/Organization Housing Authority of the County of Riverside Agency/Group/Organization Type Housing
PHA
What section of the Plan was addressed by
Consultation?
Housing Needs Assessment
Public Housing Needs
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
housing needs within the City and developing
the market analysis and strategies.
9 Agency/Group/Organization Habitat for Humanity Inland Valley Agency/Group/Organization Type Housing
Services - Housing
What section of the Plan was addressed by
Consultation?
Housing Needs Assessment
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
understanding the housing needs of City
residents.
10 Agency/Group/Organization Hospice of the Valleys
Agency/Group/Organization Type Services – Terminally ill What section of the Plan was addressed by
Consultation?
Services-Persons with Disabilities
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
understanding services for seniors and those
with disabilities needs for the City of Menifee
and developing the market analysis and
strategies.
11 Agency/Group/Organization Family Service Association Agency/Group/Organization Type Services – Youth
What section of the Plan was addressed by
Consultation?
Other – Public Services
Item Title: 11.1
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How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
needs of children living in the target areas within
the City and developing the market analysis and
strategies.
12 Agency/Group/Organization Rotary Club of Menifee Valley Agency/Group/Organization Type Business and Civic Leaders What section of the Plan was addressed by
Consultation?
Economic Development
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
economic development needs within the City
and developing the market analysis and
strategies.
13 Agency/Group/Organization Riverside County Veterans Services Agency/Group/Organization Type Veteran Services
What section of the Plan was addressed by
Consultation?
Services – Veterans
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
homeless and housing needs within the city and
developing the market analysis and strategies.
14 Agency/Group/Organization Senior Advisory Committee
Agency/Group/Organization Type Government – local
What section of the Plan was addressed by
Consultation?
Services – senior
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and Community Outreach Meeting.
Information was used in identifying senior
services and senior housing needs within the
city and developing the market analysis and
strategies.
15 Agency/Group/Organization Foothill AIDS
Agency/Group/Organization Type Housing and services for those with AIDS What section of the Plan was addressed by
Consultation?
Housing Needs Assessment
Services – AIDS
Item Title: 11.1
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How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
homeless and housing needs within the city
and developing the market analysis and
strategies.
16 Agency/Group/Organization Lake Menifee Women’s Club
Agency/Group/Organization Type Business and Civic Leaders What section of the Plan was addressed by
Consultation?
Other - Education
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
educational needs of persons living in the
target areas within the city and developing
the market analysis and strategies
17 Agency/Group/Organization County of Riverside Economic Development Agency
Agency/Group/Organization Type Other – Local government committee What section of the Plan was addressed by
Consultation?
Economic Development
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
understanding economic needs for the City of
Menifee and developing the market analysis
and strategies.
18 Agency/Group/Organization Southern California Association of Governments Agency/Group/Organization Type Other-Intergovernmental cooperation What section of the Plan was addressed by
Consultation?
Housing needs (regional)
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
housing needs regionally and in the city and
developing the market analysis and strategies.
19 Agency/Group/Organization STAT Horse Sanctuary
Agency/Group/Organization Type Other - Public Services
What section of the Plan was addressed by
Consultation?
Other – Recreation
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
identifying recreational needs of children living in
the target areas within the City and developing
the market analysis and strategies.
20 Agency/Group/Organization Menifee Valley Chamber of Commerce Item Title: 11.1
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Agency/Group/Organization Type Other – Economic Development What section of the Plan was addressed by
Consultation?
Other – Economic Development
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
economic development needs within the City
and developing the market analysis and
strategies.
21 Agency/Group/Organization EQUU8 Horsemanship and Therapeutic Riding Agency/Group/Organization Type Other - Public Services
What section of the Plan was addressed by
Consultation?
Non-Homeless Special Needs
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
recreational needs of persons with disabilities
living in the target areas within the City and
developing the market analysis and strategies.
22 Agency/Group/Organization Eastern Municipal Water District Agency/Group/Organization Type Regional Government
What section of the Plan was addressed by
Consultation?
Infrastructure Needs
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
infrastructure and public facility needs within
the City and developing the market analysis
and strategies.
23 Agency/Group/Organization Riverside County Coalition for Alternatives to Domestic Violence
Agency/Group/Organization Type Homelessness Needs-Families with Children What section of the Plan was addressed by
Consultation?
Homelessness Needs-Families with Children
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
needs of victims of domestic violence and
developing strategies to address those needs.
24 Agency/Group/Organization Social Work Action Group
Agency/Group/Organization Type Services – Homeless
What section of the Plan was addressed by
Consultation?
Homelessness Needs
Item Title: 11.1
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Item Page Number: 19
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How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
homeless needs and services for the City of
Menifee and developing strategies to
address those needs.
25 Agency/Group/Organization SAFE Family Justice Centers Agency/Group/Organization Type Services-Victims of Domestic Violence What section of the Plan was addressed by
Consultation?
Homelessness Needs-Families with Children
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
needs of victims of domestic violence and
developing strategies to address those needs.
26 Agency/Group/Organization Western Riverside Council of Governments and Southern California Association of Governments
Agency/Group/Organization Type Regional organization
Planning organization
What section of the Plan was addressed by
Consultation?
Market Analysis
Other-regional planning
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
identifying needs in the region and developing
strategies to address those needs.
27 Agency/Group/Organization Community Cupboard of Menifee Valley Agency/Group/Organization Type Services-homeless
What section of the Plan was addressed by
Consultation?
Homeless Needs-Chronically homeless
Homeless Needs –Families with children
Homelessness Needs – Veterans
Homelessness Needs – Unaccompanied
Homelessness Needs-Unaccompanied Youth
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
identifying homeless needs of persons living the
City and developing the market analysis and
strategies to address those needs.
28 Agency/Group/Organization Inland Empire Small Business Development Center Agency/Group/Organization Type Services – job creation and training What section of the Plan was addressed by
Consultation?
Other – economic development, job training
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 20
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May 6, 2026
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How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
economic development and job training and
needs for the City of Menifee. Then for the
development of the market analysis and
strategies to address those needs.
29 Agency/Group/Organization City of Menifee Community Services Agency/Group/Organization Type Government – Local
What section of the Plan was addressed by
Consultation?
Services – local community needs
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
community services needed for the City of
Menifee and the development of the
marketing analysis and strategies to address
those needs.
30 Agency/Group/Organization Community Access Center
Agency/Group/Organization Type Services – Persons with Disabilities What section of the Plan was addressed by
Consultation?
Other - Public Service
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
recreational needs of persons with disabilities
living in the target areas within the City and
developing the market analysis and strategies.
31 Agency/Group/Organization City of Menifee IT Department Agency/Group/Organization Type Other government-Local
What section of the Plan was addressed by
Consultation?
Broadband needs
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
identifying broadband needs for the at risk
communities in the City of Menifee.
32 Agency/Group/Organization Boys and Girls Club of Menifee Valley Agency/Group/Organization Type Services-Children
What section of the Plan was addressed by
Consultation?
Other-Recreational Needs
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
identifying recreational needs of children
living in the target areas within the City and
developing the market analysis and strategies.
33 Agency/Group/Organization Menifee Police Department
Agency/Group/Organization Type Government – local law enforcement Item Title: 11.1
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Item Page Number: 21
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What section of the Plan was addressed by
Consultation?
Services – safety and community needs
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
safety and community needs of persons living in
the target areas within the City and developing
the market analysis and strategies.
34 Agency/Group/Organization Riverside Housing Development Corporation Agency/Group/Organization Type Affordable Housing
What section of the Plan was addressed by
Consultation?
Affordable Housing
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
affordable housing needs.
35 Agency/Group/Organization U.S. Vets Initiative
Agency/Group/Organization Type Services – Veteran housing, counseling, services What section of the Plan was addressed by
Consultation?
Housing Needs Assessment
Services - Veterans
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
affordable housing and veteran needs for the
City of Menifee and developing the marketing
analysis and strategies.
36 Agency/Group/Organization VA Loma Linda Healthcare System Agency/Group/Organization Type Hospital – Veterans
What section of the Plan was addressed by
Consultation?
Services – Veterans
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
veteran healthcare and needs regionally and
developing the marketing analysis and strategies.
37 Agency/Group/Organization Veterans of Foreign War
Agency/Group/Organization Type Services-Health
Publicly Funded Institution/System of Care
What section of the Plan was addressed by
Consultation?
Homelessness Needs-Veterans
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and Interview. Information was used in
identifying needs of veterans within the City
and developing the market analysis and
strategies.
38 Agency/Group/Organization County of Riverside University Health System Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 22
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Agency/Group/Organization Type Services – behavioral health/health What section of the Plan was addressed by
Consultation?
Other – Mental Health Services
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
behavioral health and services regionally and
developing the market analysis and strategies.
39 Agency/Group/Organization Inland Regional Center
Agency/Group/Organization Type Services-Persons with Disabilities Regional organization
\ What section of the Plan was addressed by
Consultation?
Housing Needs Assessment
Non-Homeless Special Needs
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
homeless and housing needs within the city
and developing the market analysis and
strategies
40 Agency/Group/Organization State Council on Developmental Disabilities Agency/Group/Organization Type Services-Persons with Disabilities Other Government-State
What section of the Plan was addressed by
Consultation?
Housing Needs Assessment
Non-Homeless Special Needs
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
needs of the special needs population and
developing the programs and strategies.
41 Agency/Group/Organization Riverside County Economic Development Agency Agency/Group/Organization Type Other government-County
What section of the Plan was addressed
by Consultation? Other-Intergovernmental cooperation
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey. Information was used in identifying
needs of the business community within the City
and developing the market analysis and
strategies.
42 Agency/Group/Organization City of Menifee City Council Agency/Group/Organization Type Other government-Local
What section of the Plan was addressed
by Consultation?
Economic Development, housing needs,
infrastructure needs.
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
identifying economic development, housing,
and infrastructure needs within the City.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 23
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43 Agency/Group/Organization City of Menifee City Manager’s Office Agency/Group/Organization Type Other government-Local
What section of the Plan was addressed
by Consultation?
Economic Development, housing needs,
infrastructure needs.
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Survey and interview. Information was used in
identifying economic development, housing,
and infrastructure needs within the City.
Item Title: 11.1
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Item Page Number: 24
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Identify any Agency Types not consulted and provide rationale for not consulting
The City maintains a list of agencies, organizations, and other stakeholders that have expressed an interest in the City’s CDBG program and invited representatives from each entity to participate at multiple points in the planning process. All agencies were strongly encouraged to attend meetings and participate in surveys.
Any agency or organization that was not consulted and would like to be included in the City’s list of stakeholders, is encouraged to contact Edna I. Lebrón in the Community Development at (951) 723-3713.
Other local/regional/state/federal planning efforts considered when preparing the Plan
Table 4 – Other local/regional/federal planning efforts
Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the
goals of each plan?
Office of Homeless Services (OHS) Housing & Workforce Solutions (HWS) of Riverside County
Strategic Plan Goals are
consistent with Ten Year
Strategy to End Homelessness
2021-2029 Housing Element City of Menifee Strategic Plan Goals are consistent with Housing
Element policies and goals
Describe cooperation and coordination with other public entities, including the State and any adjacent units of general local government, in the implementation of the Consolidated Plan (91.215(l))
In the development of the 2022-2027 Consolidated Plan and the 2026/2027 Action Plan, the City afforded the following public entities with the opportunity to provide input on the Consolidated Plan. The City welcomes their input concerning the future implementation of projects to address the Strategic Plan goals identified in section SP-45 of the Consolidated Plan:
• Assistance League of Temecula Valley – Now know as “Thrifty 4 Gifting” • Boys and Girls Club of Menifee Valley
• Building Industry Association
• California Apartment Association Inland Empire
• City of Menifee City Council
• City of Menifee City Manager
• City of Menifee Community Services
• City of Menifee IT Department
• Community Access Center
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 25
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• Community Cupboard of Menifee Valley
• County of Riverside Economic Development Agency
• County of Riverside University Health System
• Eastern Municipal Water District
• EQQU8 Horsemanship and Therapeutic Riding
• Fair Housing Council of Riverside County, Inc.
• Family Service Association
• Foothill AIDS
• Habitat for Humanity Inland Valley
• Hospice of the Valleys
• Housing Authority of the County of Riverside
• Inland Empire Small Business Development Center
• Inland Regional Center
• Lake Menifee Women’s Club
• Menifee Police Department
• Menifee Valley Chamber of Commerce
• Quail Valley Environmental Coalition
• Riverside County Coalition for Alternatives to Domestic Violence • Riverside County Continuum of Care
• Riverside County Economic Development Agency
• Riverside County Veterans Services
• Riverside Housing Development Corporation
• Rotary Club of Menifee Valley
• SAFE Alternatives for Everyone
• Senior Advisory Committee
• Social Work Action Group
• Southern California Association of Governments
• STAT Horse Sanctuary
• State Council on Developmental Disabilities
• U.S. Vets Initiative
• VA Loma Linda Healthcare System
• Veterans of Foreign War
• Western Riverside Council of Governments and Southern California Association of Governments
• YESplace
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 26
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AP-12 Citizen Participation
1. Summary of citizen participation process/Efforts made to broaden citizen participation Summarize citizen participation process and how it impacted goal-setting
On January 4, 2017, the City adopted a Citizen Participation Plan (CPP) to describe how the City intends to involve its citizens in the development of the Consolidated Plan. On May 3, 2017, the Citizen Participation Plan was amended for appropriate and adequate citizen participation. On June 17, 2020, the CPP was revised for COVID-19.
The City established and followed the citizen participation process for the development of this five- year Consolidated Plan that included broad participation from the community. To assist in the identification of priority needs in the City, the Community Needs Assessment and Fair Housing Survey was prepared in English and Spanish and distributed to residents of the City to solicit input in the prioritization of needs related to community services, community facilities, infrastructure, neighborhood services, special needs services, businesses and jobs, and housing. The surveys were available online. The City received a total of 538 responses to the survey.
A community meeting was conducted on October 14, 2021. A community workshop was conducted on January 27, 2022, with prospective nonprofits intending to submit grant applications for CDBG funds and to obtain input on community needs. The Menifee Citizens Advisory Committee conducted a community meeting on March 8, 2022, to discuss the Consolidated Plan process.
Two public hearings were held at different stages in the development of the Consolidated Plan. The first public hearing was held on April 6, 2022. The second hearing was conducted on May 4, 2022, to receive comments on the draft 2022-2027 Consolidated Plan and the 2022/2023 Annual Action Plan. The Plans were adopted on May 4, 2022.
On March 23, 2026, the Menifee Citizens Advisory Committee (MCAC) conducted a meeting to consider the CDBG funding recommendations for the Fiscal Year 2026/2027. The MCAC performs in an advisory capacity to City staff and the City Council concerning the CDBG programs and activities. Eight non-profits attended and spoke about their proposed project. After receiving all testimony, the MCAC made its funding recommendation.
On April 3, 2026, the City published a notice in English and Spanish in the Press Enterprise, as well as posted on the city website; city hall, community services, police department, city libraries and Marion Ashley community center bulletin boards providing the public a 30‐day notice to review and comment on the draft 2026/2027 Action Plan. On May 6, 2026, the City Council will consider public testimony regarding the draft 2026/2027 Action Plan and authorize staff to submit it to the U.S. Department of Housing and Urban Development for program funding.
At each step in the process, the City was careful to ensure that low- and moderate-income residents, members of minority groups, agencies involved in the provision of services to these populations, and others who are directly impacted by the programs and activities supported by the Consolidated Plan programs had the opportunity to be actively involved. To promote greater Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 27
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public accessibility to program documents, the Citizen Participation Plan, Consolidated Plan, Action Plans, CAPERs, and the Analysis of Impediments to Fair Housing Choice are posted on the city’s website.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 28
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Table 5 – Citizen Participation Outreach
Sort
Order
Mode of
Outreach
Target of
Outreach
Summary of response / attendance Summary of
comments received
Summary of
comments not
accepted and reasons
URL
(If applicable)
1 Internet
Outreach
Non-targeted/
broad community
Public Notice on City Website - 30-
day Public Review and Comment
Period for Public Hearing on
September 17, 2025, regarding
2024/2025 CAPER
No written
comments,
telephone calls, or
email inquiries were
received from
interested parties.
N/A www.cityofme
nifee.us
2 Newspaper Ads Minorities
Persons with
Disabilities
Non-English
Speaking - Specify
other language:
Spanish
Non-targeted/
broad community
Public Notice Published in the Press
Enterprise in English and Spanish -
30-day Public Review and Comment
Period for Public Hearing on
September 17, 2025, regarding
2024/2025 CAPER
No written
comments were
received
N/A
Item Title: 11.1
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May 6, 2026
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Sort
Order
Mode of
Outreach
Target of
Outreach
Summary of response/attendance Summary of
comments received
Summary of
comments not
accepted and reasons
URL
(If applicable)
3 Flyers -
Community
Bulletin Boards
Minorities
Persons with
Disabilities
Non-English
Speaking - Specify
other language:
Spanish
Non-targeted/
broad community
Public Notice posted at City Hall,
Police Department, Libraries, and
Community Centers located within
the City – 30-day Public Review and
Comment Period for Public Hearing
on September 17, 2025, regarding
2024/2025 CAPER
No written
comments were
received
N/A
4 Internet
Outreach
Non-targeted/
broad community
Public Notice on City Website -
NOFA 2026/2027
No written
comments,
telephone calls, or
email inquiries were
received from
interested parties.
N/A www.cityofme
nifee.us
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan Item Page Number: 30
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May 6, 2026
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Sort
Order
Mode of
Outreach
Target of
Outreach
Summary of response / attendance Summary of
comments received
Summary of
comments not
accepted and reasons
URL
(If applicable)
5 Newspaper Ads Minorities
Persons with
Disabilities
Non-English
Speaking - Specify
other language:
Spanish
Non-targeted/
broad community
Public Notice Published in the Press
Enterprise in English and Spanish -
NOFA 2026/2027
No written
comments were
received
N/A
6 Flyers –
Community
Bulletin Boards
Minorities
Persons with
Disabilities
Non-English
Speaking - Specify
other language:
Spanish
Non-targeted/
broad community
Public Notice posted at City Hall,
Police Department, Libraries, and
Community Centers located within
the City – NOFA 2026/2027
No written
comments were
received
N/A
Item Title: 11.1
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May 6, 2026
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7 Internet
Outreach
Non-targeted/
broad community
Public Notice on City Website 30-
day Public Review and Comment
Period for Public Hearing on May 6,
2026 for PY2026/2027
TBD N/A www.cityofme
nifee.us
8 Newspaper Ads Minorities
Persons with
Disabilities
Non-English
Speaking - Specify
other language:
Spanish
Non-targeted/
broad community
Public Notice Published in the Press
Enterprise in English and Spanish -
30-day Public Review and
Comment Period for Public Hearing
on May 6, 2026 for PY2026/2027
TBD N/A
9 Flyers –
Community
Bulletin Boards
Minorities
Persons with
Disabilities
Non-English
Speaking - Specify
other language:
Spanish
Non-targeted/
broad community
Public Notice posted at City Hall,
Police Department, Libraries, and
Community Centers located within
the City in English and Spanish 30-
day Public Review and Comment
Period for Public Hearing on May
6, 2025 for PY2026/2027
TBD N/A
Item Title: 11.1
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AP-15 Expected Resources – 91.220(c)(1,2)
Introduction
The strategic plan goals included in the Consolidated Plan were based on resources that are reasonably anticipated to be available to the City from federal, state, local , and private sources from July 1, 2022, through June 30, 2027. The actual resources available to support activities during the implementation of this Consolidated Plan may vary significantly due to factors outside of the City’s control. For example, HUD formula grant allocations are subject to change each year based on a number of factors such as the amount of the national appropriation, changes in ACS population data applied to the CPD grant formulas, statutory changes to the CPD grant formulas, the addition or removal of entitlements receiving a particular CPD grant and the availability of reallocated funds.
Additionally, state, local, and private resources will vary significantly depending on economic conditions.
For Program Year 2026/2027, the City will receive $670,960 in CDBG funds from HUD.
Should additional CDBG funding become available during the program year through cost savings, an increase in allocation, or dropped activities, the City will use CDBG funds to expand the scope of the Minor Home Repair program. No substantial amendments will be required for such an action.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 33
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Table 6 - Expected Resources – Priority Table
Program Source
of
Funds
Uses of Funds Expected Amount Available Year 1 Expected Amount
Available
Reminder
of ConPlan
$
Narrative
Description Annual
Allocation:
$
Program
Income:
$
Prior Year
Resources:
$
Total:
$
CDBG Public-
federal
Admin and
Planning
Housing Public
Improvements
Public Services
$670,960
$0
$0
$670,960
$0
Based on
level
funding in
subsequent
years
Explain how federal funds will leverage those additional resources (private, state and local funds), including a description of how matching requirements will be satisfied To address housing and community development needs in Menifee, the City will leverage its CDBG entitlement grant with a variety of funding resources in order to maximize the effectiveness of available funds. Local governments had relied on redevelopment agencies to be the primary non-federal source of leveraged funds. With the elimination of this tool, the City’s ability to leverage federal funds has been substantially reduced. The City and its development partners will continue to seek new opportunities to leverage federal funds, such as the Low-Income Tax Credit program and U.S. Department of Housing and Urban Development Section 202 and 811 for the Elderly Program.
Federal Resources
• Office of Homeless Services (OHS) Program
• HUD Veterans Affairs supportive Housing (HUD-VASH)
• Supportive Housing for the Elderly (Section 202)
• Supportive Housing for Persons with Disabilities (Section 811) • Housing Opportunities for Persons with AIDS (HOPWA)
• YouthBuild
• Federal Low-Income Housing Tax Credit Program
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 34
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State Resources
• State Low-Income Housing Tax Credit Program
• Building Equity and Growth in Neighborhoods Program (BEGIN) • CalHome Program
• Multifamily Housing Program (MHP)
• Housing Related Parks Grant
• CalHFA Single and Multi-Family Program
• Mental Health Service Act (MHSA) Funding
Local Resources
• Riverside County CoC
• Housing Authority of Riverside County (HARIVCO)
• Southern California Home Financing Authority (SCHFA)
• City of Menifee General Fund
• City of Menifee Capital Improvement Program
Private Resources
• Federal Home Loan Bank Affordable Housing Program (AHP) • Community Reinvestment Act Programs
• United Way Funding
• Private Contributions
If appropriate, describe publicly owned land or property located within the jurisdiction that may be used to address the needs identified in the Consolidated Plan
On February 1, 2012, the elimination of local Redevelopment Agencies by the State of California resulted in the loss of a crucial resource for the development and preservation of affordable housing. This negatively affected affordable housing and residential investment.
While there are mechanisms whereby certain affordable housing assets tied to the former Redevelopment Agencies may be utilized today, the available resources for affordable housing are scarce.
Discussion
Assuming continued level funding of the CDBG program, the City expects to spend approximately $2.5 million in CDBG funds between July 2022 and June 2027. It is anticipated that approximately $500,000 will be spent on housing rehabilitation, $1,0250,000 will be spent on public facilities and infrastructure projects, and $375,000 will be spent on public service.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 35
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AP-20 Annual Goals and Objectives
Sort
Order
Goal Name Start Year End Year Category Geographic
Area
Needs
Addressed
Funding Goal Outcome Indicator
1 Homelessness
Prevention
Services
2026 2027 Homeless Citywide Prevent and
eliminate
homelessness
CDBG:
$20,000
Public service activities other than
Low/Moderate Income Housing
Benefit: 1,920 Persons Assisted
2 Public
Facilities and
Infrastructure
Improvements
2026 2027 Non-Housing
Community
Development
CDBG
Target Areas
Neighborhood
and
Infrastructure
Improvement
CDBG:
$0
Public Facility or Infrastructure
Activities other than
Low/Moderate Income Housing
3 Affordable
Housing
2026 2027 Affordable
Housing
Citywide Preserve the
supply of
affordable
housing
CDBG:
$396,124
CDBG:
$40,000
(Activity
Delivery
Costs)
Homeowner Housing
Rehabilitation: 26 Household
Housing Units
4 Economic
Development
2026 2027 Non-Housing
Community
Development
Citywide Micro
Enterprise
Program Job
Creation
CDBG: TBD
5 Services for
low-and
moderate-
income
residents
2026 2027 Public
Services
Citywide Provide public
services for
low-income
residents
CDBG:
$80,644
Public service activities other than
Low/Moderate Income Housing
Benefit: 873 Persons Assisted
6 Fair Housing 2026 202 Affordable
Housing
Citywide Ensure equal
access to
housing
opportunities
CDBG:
$24,000
Other: 650 Other
Table 7 – Goals Summary
Item Title: 11.1
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Goal Descriptions
1 Goal Name Homelessness Prevention Services
Goal
Description
Support a continuum of services in Riverside County to prevent and eliminate homelessness, including, but not limited to, homelessness prevention programs, emergency shelter programs, and transitional housing.
2 Goal Name Infrastructure and Public Facilities Improvements Goal
Description
Improve City of Menifee public facilities and infrastructure to benefit residents in low- and moderate-income target areas or those presumed under HUD regulations to be low- and moderate-income, such as the elderly and disabled adults.
3 Goal Name Affordable Housing Preservation
Goal
Description
Preservation of the quality of existing affordable housing stock occupied by low- and moderate-income households.
4 Goal Name Economic Development
Goal
Description
Development of a Micro Enterprise Program that will provide small business development training, start-up loans, and support to income-qualified clients who would like to start their own small business.
5 Goal Name Services for low- and moderate-income residents Goal
Description
Provide lower-income persons with appropriate health, fitness, recreational, educational, and other services to support the emotional and developmental well-being of low- and moderate-income families 6 Goal Name
Fair
Housing
Services
Fair Housing Services
Goal
Description
Affirmatively further fair housing choice through the provision of fair housing education, counseling, anti-discrimination, and landlord-tenant mediation services.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 37
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AP-35 Projects – 91.220(d)
Introduction
To address the high-priority needs identified in the Strategic Plan to the 2022-2027 Consolidated Plan, the City of Menifee will invest CDBG funds in projects that preserve affordable housing, provide fair housing services, provide services to low- and moderate-income residents, provide services to residents with special needs, prevent homelessness and improve public facilities and infrastructure. Together, these projects will address the housing and community development needs of Menifee residents, particularly those residing in the low- and moderate-income CDBG Target Areas.
# Project Name
1 Homelessness Prevention Services
2 Public Facilities and Infrastructure Improvements
3 Economic Development
4 Broadband
5 Services for Low- and Moderate-Income Residents
6 Affordable Housing Development
7 Fair Housing Services
Table 8 – Project Information
Describe the reasons for allocation priorities and any obstacles to addressing underserved needs
Based on the Strategic Plan, the City is allocating 100 percent of its non-administrative CDBG investments for the program year 2026/2027 to projects and activities that benefit low- and moderate-income people. Due to the nature of the projects and activities to be undertaken, investments in projects concerning Public Facilities and Infrastructure Improvements are limited to the CDBG Target Areas, while other projects and activities benefit low- and moderate-income limited clientele.
The primary obstacles to meeting the underserved needs of low- and moderate-income people include lack of funding from federal, state, and other local sources, the high cost of housing that is not affordable to low-income people, and the lack of availability of home improvement financing in the private lending industry. To address these obstacles, the City is investing CDBG funds through the 2026/2027 Action Plan in projects that provide grants to low- and moderate- income homeowners for home improvements, projects that provide public services to low- and moderate-income people, and projects that prevent homelessness.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 38
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AP-38 Project Summary
Table 9 – Project Summary Information
1 Project Name Homelessness Prevention Services
Target Area Citywide
Goals Supported Homelessness Prevention Services
Needs Addressed Prevent and eliminate homelessness
Funding CDBG: $20,000
Description Support a continuum of services in Riverside County to prevent and eliminate homelessness, including, but not
limited to, homelessness prevention programs,
emergency shelter programs, and transitional housing.
Target Date 6/30/2027
Estimate the number and
type of families that will
benefit from the proposed
activities
Approximately 1,920 people will benefit from the
proposed activities.
Location Description Citywide
Planned Activities Menifee Valley Community Cupboard: Emergency Food Distribution Program (1,920 people) CDBG: $20,000.
2 Project Name Public Facilities and Infrastructure Improvements Target Area None Currently
Goals Supported Public Facilities and Infrastructure Improvements Needs Addressed Neighborhood and Infrastructure Improvement Funding CDBG: $0
Description N/A
Target Date N/A
Item Title: 11.1
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Estimate the number and
type of families that will
benefit from the proposed
activities
N/A
Location Description N/A
Planned Activities N/A
3 Project Name Micro-Enterprise Program
Target Area Citywide
Goals Supported Promote Economic Development
Needs Addressed Promote Economic Development
Funding CDBG: TBD
Description Development of a Micro-Enterprise Program that will provide small business development training, start-up loans, and support to income-qualified clients who would like to start their own small business.
Target Date TBD
Estimate the number and
type of families that will
benefit from the proposed
activities
TBD
Location Description Citywide – Available to all potential business owners Planned Activities TBD
4 Project Name Broadband
Target Area Citywide
Goals Supported Broadband Needs
Needs Addressed Broadband Needs
Funding CDBG: TBD
Item Title: 11.1
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Description The City of Menifee is proposing in launching a Smart City Initiative Program to create and map out areas to
lay out fiber throughout the City.
Target Date TBD
Estimate the number and
type of families that will
benefit from the proposed
activities
TBD
Location Description Citywide
Planned Activities Create and map out areas to lay out fiber throughout the City.
5 Project Name Services for Low- and Moderate-Income Residents Target Area Citywide
Goals Supported Services for low- and moderate-income residents Needs Addressed Provide public services for low-income residents Funding CDBG: $80,644
Description Provide low- and moderate-income families and individuals with appropriate health, fitness,
recreational, educational, and other services.
Target Date 6/30/2027
Estimate the number and
type of families that will
benefit from the proposed
activities
Approximately 873 people will benefit from the
proposed activities.
Location Description Citywide
Item Title: 11.1
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Planned Activities Boys and Girls Club of Inland Valley: Before and After School Program (72 children) CDBG: $10,000
Family Service Association (FSA): Nutritional Meals
(400 seniors) CDBG: $15,644
Habitat for Humanity Inland Valley: Brush with
Kindness (56 seniors) CDBG: $10,000
Hospice of the Valley: Senior Assistance Program (55
seniors) CDBG: $10,000
SAFE Family Justice Centers: Menifee SAFE & Healthy
Families (165 people) CDBG: $10,000
Thrifting 4 Gifting: School Zone (100 children) CDBG:
$15,000
Voices for Children: Court Appointed Advocate (25
children) CDBG: $10,000
6 Project Name Affordable Housing Preservation
Target Area Citywide
Goals Supported Affordable Housing Preservation
Needs Addressed Preserve the supply of affordable housing Funding CDBG: $436,124
Description Preservation of the quality of existing affordable housing stock occupied by low- and moderate-income households through the implementation of the Minor Home Rehabilitation Grant
Program.
Target Date 6/30/2027
Estimate the number and
type of families that will
benefit from the proposed
activities
Approximately 26 low- and moderate-income families will benefit from the proposed activities.
Location Description Citywide
Planned Activities City of Menifee Community Development: Minor Home Rehabilitation Grant (MHRG) Program (26 households) CDBG:
$396,124 MHRG Program, Activity Delivery Costs $40,000
7 Project Name Fair Housing Services
Target Area Citywide
Item Title: 11.1
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Goals Supported Fair Housing Services
Needs Addressed Ensure equal access to housing opportunities Funding CDBG: $24,000
Description Affirmatively further fair housing choice through the provision of fair housing education, counseling, anti-discrimination, and landlord-tenant mediation services.
Target Date 6/30/2027
Estimate the number and
type of families that will
benefit from the proposed
activities
Approximately 650 people will benefit from the proposed activity.
Location Description Citywide
Planned Activities Fair Housing Council of Riverside County: Comprehensive Fair Housing Services (650 people) CDBG: $24,000.
8 Project Name CDBG Program Administration
Target Area Citywide
Goals Supported All
Needs Addressed All
Funding CDBG: $110,192
Description This project provides for the administration of the CDBG programs.
Target Date 6/30/2027
Estimate the number and
type of families that will
benefit from the proposed
activities
Not applicable.
Location Description Not applicable.
Planned Activities City of Menifee: CDBG Administration $110,192 Describe the reasons for allocation priorities and any obstacles to addressing underserved needs:
Based on the Strategic Plan, the City is allocating 100 percent of its non -administrative CDBG investments for program year 2026/2027 to projects and activities that benefit low- and moderate- income people. Due to the nature of the projects and activities to be undertaken, investments in projects concerning Public Facilities and Infrastructure Improvements are limited to the CDBG Target Areas, while other projects and activities benefit low- and moderate-income limited clientele.
Item Title: 11.1
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Item Page Number: 43
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The primary obstacles to meeting the underserved needs of low - and moderate -income people include a lack of funding from federal, state, and other local sources, the high cost of housing that is not affordable to low-income people, and the lack of availability of home improvement financing in the private lending industry. To address these obstacles, the City is investing CDBG funds through the 2026/2027 Action Plan in projects that provide grants to low - and moderate-income homeowners for home improvements, projects that provide public services to low - and moderate- income people, and projects that prevent homelessness.
AP-50 Geographic Distribution – 91.220(f)
Description of the geographic areas of the entitlement (including areas of low-income and minority concentration) where assistance will be directed The CDBG Target Areas are comprised of three low- and moderate-income areas: Sun City, Quail Valley, and Romoland within the City of Menifee. These areas were developed as three distinct residential communities before the 1960s.
In Sun City, housing rehabilitation is needed. Since the area is limited to seniors, owner- occupied housing turnover is frequent, and housing has been inconsistently maintained. Many of the apartment complexes are older and may require rehabilitation.
Quail Valley is one of the oldest neighborhoods in Menifee. It is comprised of old houses on very small lots with community water but no community sewer system.
Romoland is also one of the oldest neighborhoods in Menifee. It is comprised of many substandard housing and mobile homes with an old community water system, no drainage systems, and an inadequate community sewer system.
During the period of the 2022-2027 Consolidated Plan, the City will continue to invest in the preservation of existing housing in both areas and the rehabilitation of existing infrastructure and public facilities to ensure that neighborhoods in the CDBG Target Area are improved.
Table 10 - Geographic Distribution
Target Area Percentage of Funds
CDBG Target Area 50%
Citywide 50%
Rationale for the priorities for allocating investments geographically For the 2026/2027 program year, the City will invest $670,960 of CDBG funds that will directly benefit low- and moderate-income people throughout the City. Due to the nature of the projects Item Title: 11.1
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and activities to be undertaken, investments in projects and activities such as Public Facilities and Infrastructure are limited to the CDBG Target Areas, while other projects and activities benefit low- and moderate-income limited clientele and are available citywide.
Discussion
Based on the Strategic Plan, the City is allocating 100 percent of its non-administrative CDBG investments for program year 2026/2027 to projects and activities that benefit low- and moderate-income people.
AP-55 Affordable Housing – 91.220(g)
One high-priority affordable housing need has been identified in the 2022-2027 Consolidated Plan, and one Strategic Plan goal h a s b e e n established to provide the framework necessary to invest CDBG funds to address the affordable housing needs of the City.
Expand the Supply of Affordable Housing
As the City's housing stock ages, a growing percentage of housing units may need rehabilitation to allow them to remain safe and habitable. The situation is of particular concern for low- and moderate-income homeowners, especially the elderly, who are generally not in a financial position to properly maintain their homes.
The age and condition of Menifee’s housing stock are important indicators of potential rehabilitation needs. Commonly, housing over 30 years of age needs some form of major rehabilitation, such as roof replacement, foundation work, and plumbing systems.
Housing over 15 years of age will generally exhibit deficiencies in terms of paint, weatherization, heating/air- conditioning systems, water heaters, and finish plumbing fixtures.
According to CHAS data showing the year that housing units were built categorized by owner and renter tenure:
• 4,436 or 22 percent of the 20,518 owner-occupied housing units in Menifee were built 40 or more years ago (built before 1980).
• 7,214 or 35 percent of the 20,518 owner-occupied housing units in Menifee were built between 25-40 years ago (built between 1980 and 1999). • 1,671 or 27 percent of the 6,300 renter-occupied housing units in Menifee were built 40 or more years ago (built before 1980).
• 2,328 or 35 percent of the 6,300 renter-occupied housing units in Menifee were built between 25-40 years ago (built between 1980 and 1999).
Item Title: 11.1
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Preservation of the physical and functional integrity of existing housing units occupied by low- and moderate-income households is a cost-effective way to invest limited resources to retain existing housing units that are already affordable to low- and moderate-income households in the community. Addressing substandard housing conditions through housing preservation activities ensures that all economic segments of the community have the means to ensure that their property meets local standards and that all Menifee residents have the opportunity to live in decent housing.
One Year Goals for the Number of Households to be Supported Homeless 0
Non-Homeless 26
Special-Needs 0
Total 26
Table 11 - One Year Goals for Affordable Housing by Support Requirement One Year Goals for the Number of Households Supported Through Rental Assistance 0
The Production of New Units 0
Rehab of Existing Units 26
Acquisition of Existing Units 0
Total 26
Table 12 - One Year Goals for Affordable Housing by Support Type Discussion
The Strategic Plan identifies a high-priority need to expand the supply of affordable housing and a high-priority need to preserve the supply of affordable housing. During the 2026/2027 program year, the City of Menifee will invest CDBG funds in the preservation of affordable housing units. Specifically, CDBG funds will be used to support affordable housing preservation projects, including the Minor Home Rehabilitation Grant Program.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
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AP-60 Public Housing – 91.220(h)
Introduction
There are no public housing developments in Menifee. All public housing programs consist of housing choice and project-based vouchers administered by the Housing Authority of the County of Riverside (HACR).
Actions planned during the next year to address the needs to public housing There are no public housing developments or units planned for the City of Menifee in the next year. HACR will continue to actively support and assist Menifee residents with Housing Choice Vouchers.
Actions to encourage public housing residents to become more involved in management and participate in homeownership
HACR maintains active resident councils at all public housing developments and includes resident members on its Board of Directors. HACR constantly seeks feedback from residents on improvements and planning documents to ensure activities are meeting the needs of residents.
HACR maintains a homeownership program for current public housing tenants through its Homeownership Program. HACR also links its Homeownership Program with its Family Self- Sufficiency Program to help households save money for a down payment through an escrow account.
If the PHA is designated as troubled, describe the manner in which financial assistance will be provided or other assistance
Not applicable. HACR is designated as a High Performing PHA.
Discussion
According to the Housing Authority, there are 153 individuals/families receiving Tenant-based Section 8 vouchers and 0 Project-based Section 8 vouchers in Menifee.
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Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
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AP-65 Homeless and Other Special Needs Activities – 91.220(i) Introduction
The City will invest CDBG funds during the 2026/2027 program year to address high-priority needs identified in the 2022-2027 Consolidated Plan, including preventing homelessness and providing public services to special needs populations, including victims of domestic violence and persons with disabilities.
Homelessness Prevention Services
According to Riverside County's most recent data available from the Point-in-Time Homeless Count (PIT Count) held on January 2 2, 202 5, on any given night in Riverside County, approximately 3,990 people are homeless, which is a 7% increase from 2023. Riverside County did not hold a count in 2026.
To address the incidents of homelessness in Menifee and to prevent extremely low-income Menifee families from becoming homeless, the City places a high priority on programs that work to prevent homelessness or rapidly connect homeless individuals with housing and supportive services. To address this need, the City will support a continuum of services in Riverside County to prevent and eliminate homelessness, including, but not limited to, homelessness prevention programs, emergency shelter programs, and transitional housing.
Using CDBG funds, the City will invest in homelessness prevention services by funding a food bank, the Menifee Valley Community Cupboard.
Describe the jurisdictions one-year goals and actions for reducing and ending homelessness including reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs
To reach out to unsheltered homeless persons and assess their individual needs for the purpose of connecting them with available emergency shelter and transitional housing resources, the Menifee Police Department created the Homeless Liaison Officer (HLO) in April 2022. The HLO and Riverside University Health System-Behavioral Health (RUSH-BH) are trained in working with homeless-related problems and are knowledgeable about local and regional resources.
They provide referrals to local service providers to address the homeless person’s needs. Prior to July 1, 2020, when the City of Menifee Police Department was incorporated, the City had a contract with the Riverside County Sheriff's Department.
The City of Menifee supports the efforts of the Riverside County Continuum of Care (CoC) and Item Title: 11.1
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its member organizations that address homelessness. As described earlier, the City supports local nonprofit agencies that provide emergency rental assistance and housing counseling to low- and moderate-income residents to prevent homelessness.
The emphasis of the City’s CDBG program will be to prevent homelessness by funding the Menifee Valley Community Cupboard, a local food bank.
Addressing the emergency shelter and transitional housing needs of homeless persons The City of Menifee supports the efforts of the Riverside County Continuum of Care (CoC) and its member organizations that address homelessness. As described earlier, the City supports local nonprofit agencies that provide emergency rental assistance and housing counseling to low- and moderate-income residents to prevent homelessness.
Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again
During the 2026/2027 program year, the City's Homeless Liaison Officer (HLO) and the Riverside University Health System-Behavior Health (RUHS-BH) will connect chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth with available resources through the Riverside County CoC, which is comprised of a network of public, private, faith-based, for-profit, and nonprofit service providers who utilize several federal, state and local resources to provide services for homeless people. The goal is to help unsheltered homeless people make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units.
The nonprofit and faith-based community plays a key role in the current CoC system. Hundreds of agencies throughout the County provide programs ranging from feeding the homeless on the street to creating permanent supportive housing opportunities. These services are available to homeless families with children and single men and women. The nonprofit and faith-based community also serves special needs populations, such as victims of domestic violence, veterans, the disabled, and youth.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
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Helping low-income individuals and families avoid becoming homeless, especially extremely low-income individuals and families and those who are: being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); or, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs
The Riverside County CoC Ten-Year Plan to End Homelessness included a goal to establish county- wide protocols and procedures to prevent people from being discharged from public and private institutions of care into homelessness that will help decrease the number of persons being discharged into homelessness by at least 10 percent annually. The CoC is seeking to improve coordination among publicly and privately funded institutions of care and local service agencies in the County of Riverside in order to decrease the number of persons being discharged into homelessness annually.
Discussion
With limited CDBG resources available, the City is investing CDBG public service funds through the CDBG public service grants. Additionally, The City is investing general funds through the Police Department budget to provide for one Homeless Liaison Officer (HLO), one Community Behavioral Assessment Team (CBAT) Officer, and two Problem Oriented Policing (POP) Program Officers that will connect unsheltered homeless individuals and families with emergency shelter, transitional housing, and permanent housing opportunities, as well as other services to address special needs such as drug and alcohol rehabilitation and mental health services.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 50
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AP-75 Barriers to affordable housing – 91.220(j)
Introduction:
A barrier to affordable housing is a public policy or nongovernmental condition that constrains the development or rehabilitation of affordable housing, such as land use controls, property taxes, state prevailing wage requirements, environmental protection, cost of land, and availability of monetary resources. Barriers to affordable housing are distinguished from impediments to fair housing choice in the sense that barriers are lawful, and impediments to fair housing choice are usually unlawful.
Based on information gathered during community meetings, the Consolidated Plan Needs Assessment Survey, the 2021-2029 Housing Element, and market analysis, the primary barriers to affordable housing in Menifee are housing affordability and the lack of monetary resources necessary to develop and sustain affordable housing. The two barriers are related in the sense that demand for affordable housing exceeds the supply, and insufficient resources are available to increase the supply of affordable housing to meet demand.
Actions it planned to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment
In the development of the 2021-2029 Housing Element, the City evaluated significant public policies affecting affordable housing development, such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, and growth limitations. Constraints included development costs, access to financing, and fees and assessments. Based on this evaluation, the City determined that it has taken all necessary steps to ameliorate the negative effects of public policies that may have been a barrier to affordable housing. Moreover, the City is actively engaged with affordable housing developers concerning the siting of affordable housing and ensuring that the entitlement process runs smoothly from inception to completion.
Discussion:
Since the redevelopment tool no longer exists, resources are scarce. The City will continue to provide incentives to attract private and other available public resources to facilitate affordable housing development. The City will rely on and support projects that utilize multi-family revenue bonds, as with the Encanto Apartments, low-income tax credits as with the Vineyard Apartments, and Section 515, as with the Haller Hillside project, to meet these needs. This strategy will increase the supply of affordable housing and preserve existing affordable housing in the City.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
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AP-85 Other Actions – 91.220(k)
Introduction:
In the implementation of the 2026/2027 Annual Action Plan, the City will invest CDBG resources to address obstacles in meeting underserved needs, foster and maintain affordable housing, reduce lead-based paint hazards, reduce the number of poverty-level families, develop institutional structure, and enhance coordination between public and private housing and social service agencies.
Actions planned to address obstacles to meeting underserved needs The primary obstacles to meeting the underserved needs of low- and moderate-income people include a lack of funding from federal, state, and other local sources, the high cost of housing that is not affordable to low-income people, and the lack of availability of home improvement financing in the private lending industry. To address these obstacles, the City is investing CDBG funds through the 2026/2027 Action Plan in projects that provide grants to low- and moderate- income homeowners for home improvements, projects that provide public services to low- and moderate-income seniors, veterans, and people and those with special needs, and projects that prevent homelessness. To address underserved needs, the City is allocating 100 percent of its non-administrative CDBG investments for the program year 2026/2027 to projects and activities that benefit low- and moderate-income people.
Actions planned to foster and maintain affordable housing In the implementation of the 2026/2027 Annual Action Plan, the City will invest CDBG funds to preserve and maintain affordable housing through the City’s Minor Home Rehabilitation Grant Program, which will provide minor rehabilitation for approximately twenty owner- occupied single-family or manufactured housing units.
Actions planned to reduce lead-based paint hazards
The Residential Lead-Based Paint Hazard Reduction Act of 1992 (Title X) emphasizes the prevention of childhood lead poisoning through housing-based approaches. Because nearly all of the City’s housing stock was built after 1978, it is rare for the City to encounter lead-based paint hazards as part of its housing rehabilitation program. Should a hazard exist, the City will require lead-based paint testing and risk assessments for each property assisted that was built before January 1, 1978, and safe work practices or abatement into the scope of work as required to reduce lead-based paint hazards in accordance with 24 CFR Part 35.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
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Actions planned to reduce the number of poverty-level families The implementation of CDBG meeting the goals established in the 2022-2027 Consolidated Plan - Strategic Plan and this Annual Action Plan will help to reduce the number of poverty-level families by:
• Supporting activities that expand the supply of housing that is affordable to low- and moderate-income households;
• Supporting activities that preserve the supply of decent housing that is affordable to low- and moderate-income households;
• Supporting a continuum of housing and public service programs to prevent and eliminate homelessness;
• Supporting housing preservation programs that assure low- i n c o m e households have a safe, decent, and appropriate place to live;
• Supporting public services for low- and moderate-income residents, including seniors, veterans, those with special needs, and those at-risk of homelessness offered by nonprofit organizations receiving CDBG public services grants; and In addition to these local efforts, mainstream state and federal resources also contribute to reducing the number of individuals and families in poverty. Federal programs such as the Earned Income Tax Credit and Head Start provide pathways out of poverty for families who are ready to pursue employment and educational opportunities. Additionally, in California, the primary programs that assist families in poverty are CalWORKS, CalFresh (formerly food stamps), and Medi-Cal. Together, these programs provide individuals and families with employment assistance, subsidies for food, medical care, childcare, and cash payments to meet basic needs such as housing, nutrition, and transportation. Other services are available to assist persons suffering from substance abuse, domestic violence, and mental illness.
Actions planned to develop institutional structure
The institutional delivery system in Menifee is high functioning and collaborative—particularly the relationship between local government and the nonprofit sector comprised of a network of capable nonprofit organizations that are delivering a full range of services to residents. Strong City departments anchor the administration of HUD grant programs and the housing, community, and economic development activities that are implemented by the City support and enhance this existing institutional structure.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
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Actions planned to enhance coordination between public and private housing and social service agencies
To enhance coordination between public and private housing and social service agencies, the City will continue consulting with and inviting the participation of a wide variety of agencies and organizations involved in the delivery of housing and supportive services to low- and moderate- income residents in Menifee, particularly in the CDBG Target Areas.
Discussion:
In the implementation of the 2026/2027 Annual Action Plan, the City will invest CDBG resources to address obstacles to meeting underserved needs, foster and maintain affordable housing, reduce lead-based paint hazards, reduce the number of poverty-level families, develop institutional structure, and enhance coordination between public and private housing and social service agencies.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
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AP-90 Program Specific Requirements – 91.220(l)(1,2,4)
Introduction:
As a Community Development Block Grant (CDBG) entitlement grantee, the City of Menifee prepares the Consolidated Plan for submission to the U.S. Department of Housing and Urban Development (HUD), Office of Community Planning and Development (CPD), whose goal are to develop viable communities by promoting integrated approaches that provide decent housing, a suitable living environment and expand economic opportunities for low- and moderate - income persons. This planning document and application for funding is an analysis of projected housing and community development needs in the City of Menifee, a plan for addressing these needs, and a guide for evaluating accomplishments in the five fiscal years from July 1, 2022, through June 30, 2027.
Community Development Block Grant Program (CDBG)
Reference 24 CFR 91.220(l)(1)
Projects planned with all CDBG funds expected to be available during the year are identified in the Projects Table. The following identifies program income that is available for use and is included in projects to be carried out.
1. The total amount of program income that will have been received before the start of the next program year and that has not yet been reprogrammed $0
2. The amount of proceeds from section 108 loan guarantees that will be used during the year to address the priority needs and specific objectives identified in the grantee's Strategic Plan
$0
3. The amount of surplus funds from urban renewal settlements $0
4. The amount of any grant funds returned to the line of credit for which the planned use has not been included in a prior statement or plan. $0
5. The amount of income from float-funded activities $0 Total Program Income $0
Other CDBG Requirements
1. The amount of urgent need activities 0
2. The estimated percentage of CDBG funds that will be used for activities that benefit persons of low and moderate income. Overall Benefit - A consecutive period of one (1), two (2) or three (3) years may be used to determine that a minimum overall benefit of 70% of CDBG funds is used to benefit persons of low and moderate income.
Specify the years covered that include this Annual Action Plan. 100.00% Item Title: 11.1
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Discussion:
In the implementation of programs and activities under the 2026/2027 Annual Action Plan, the City of Menifee will follow all HUD regulations and overall low- and moderate-income benefits for the CDBG program.
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Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
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Consolidated Plan and Action Plan Appendices
Alternate/Local Data Sources …………………………………………………………………………………………… Appendix A Citizen Participation and Consultation…………………………………………………………………..…………. Appendix B Resolution and City of Menifee Map of Eligible CDBG Areas…………………………………………..…Appendix C Item Title: 11.1
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Appendix A
Alternate / Local Data Sources
1 Data Source Name
Riverside County 2025 Homeless Count Report; None 2026
List the name of the organization or individual who originated the data set.
Continuum of Care and Riverside County Department of Housing and Workforce Solution (HWS) Provide a brief summary of the data set.
There are 3,990 adults and children who are homeless during the point-in-time in the County of Riverside according to the Riverside County 2025 Homeless Count and Subpopulation Survey. This represents a 7% increase when compared to the number of homeless people who were counted in 2023. Of the 3,990 people, 1,978 were unsheltered and 2,012 were sheltered.
What was the purpose for developing this data set?
To meet HUD requirements.
Provide the year (and optionally month, or month and day) for when the data was collected.
The homeless count was conducted on the streets during the hours of 5 a.m. and 9 a.m. on January 22, 2025. The count was also conducted on the same day in shelters and transitional housing programs throughout the county.
Briefly describe the methodology for the data collection.
Data collection was obtained using HUD-required methods for the conduct of a PIT Count.
Describe the total population from which the sample was taken.
Per HUD’s instructions, a person was considered homeless, and thus counted, only when he/she fell within the HUD-based definition by residing in places not meant for human habitation, such as cars, parks, sidewalks, and abandoned buildings; in an emergency shelter; and In transitional housing for homeless persons.
Describe the demographics of the respondents or characteristics of the unit of measure, and the number of respondents or units surveyed.
See screen NA-40.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 58
Menifee Mayor and City Council
May 6, 2026
Page
316 of 714
55 2026/2027 Annual Action Plan
2 Data Source Name
2025 CoC Homeless Point-in-Time Count and Survey
List the name of the organization or individual who originated the data set.
Continuum of Care and Riverside County Department of Housing and Workforce Solution (HWS) Provide a brief summary of the data set.
Provides the inventory of emergency, transitional and permanent supportive housing beds.
What was the purpose for developing this data set?
To meet HUD requirements.
How comprehensive is the coverage of this administrative data? Is data collection concentrated in one geographic area or among a certain population?
Prepared in accordance with HUD requirements.
What time period (provide the year, and optionally month, or month and day) is covered by this data set?
January 22, 2025
What is the status of the data set (complete, in progress, or planned)? Complete.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 59
Menifee Mayor and City Council
May 6, 2026
Page
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56 2026/2027 Annual Action Plan
Appendix B
Citizen Participation and Consultation
Stakeholder Consultation List
Agency Type
Arts Council Menifee Education
Assistance League of Temecula Valley Youth
Boys and Girls Club of Menifee Valley Youth Services
Building Industry Association Housing
California Apartment Association Inland Empire Rental Property City of Menifee Various Departments
Community Access Center Disabled
County of Riverside Department of Social Services Social Services County of Riverside Economic Development Agency Local Government County of Riverside Health Department Health Services
County of Riverside University Health System – Behavioral Health, Homeless Housing Opportunities,
Partnerships & Education Program
Mental Health
Eastern Municipal Water District City Water and Sewer Service Economic Development Coalition Economic Development
EQQU8 Horsemanship and Therapeutic Riding Disabilities
Fair Housing Council of Riverside County, Inc. Fair Housing Family Services Association Social Services
Foothill AIDS AIDS
Habitat for Humanity Inland Valley Affordable Housing
Hope through Education Education
Hospice of the Valleys Healthcare
Housing Authority of the County of Riverside Public Housing Authority Inland Empire Small Business Development Center Job Creation and Training Inland Regional Center Developmental disabilities
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 60
Menifee Mayor and City Council
May 6, 2026
Page
318 of 714
57 2026/2027 Annual Action Plan
Stakeholder Consultation List
Agency Type
Lake Menifee Women’s Club Community Group
Menifee Crime Watch Crime Prevention
Menifee Sun City Concern Inc. Seniors
Menifee Community Cupboard Foodbank
Menifee Valley Chamber of Commerce Business community
Menifee Valley Historical Association Historical Preservation Path of Life Ministries Homeless provider
Quail Valley Environmental Coalition Environmental
Rotary Club of Menifee Valley Service Group
Riverside County Coalition for Alternatives to Domestic Violence
Domestic Violence
Riverside City and County Continuum of Care Homeless provider Riverside County Veterans Services Veterans
Riverside Housing Development Corporation Affordable Housing SAFE Family Justice Centers Victims of Domestic Violence Senior Advisory Committee Seniors
STAT Horse Sanctuary Recreation
Social Work Action Group Homeless
Southern California Association of Governments Regional government Southwest Riverside County Association of Realtors Housing Southwest Riverside Homeless Alliance Homeless services State Council on Developmental Disabilities Developmental Disabilities State of California Department of Housing and Community Development
State Government
U.S. Vets Initiative Veterans
VA Loma Linda Healthcare System Hospital – Veterans
Valley-Wide Recreation and Park District Recreation
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 61
Menifee Mayor and City Council
May 6, 2026
Page
319 of 714
58 2026/2027 Annual Action Plan
Stakeholder Consultation List
Agency Type
Veterans of Foreign War Veterans
Western Riverside Council of Governments Regional Government YESplace Economic Development
Note: For some of the above agencies, there are multiple stakeholders, but the agency is listed once.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 62
Menifee Mayor and City Council
May 6, 2026
Page
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59 2026/2027 Annual Action Plan
Public Hearing Notices
Summary of Public Comments at
Public Hearings and Community Meetings
Public Hearing/Notice (CAPER)
Wednesday, September 17, 2025
No Comments.
Public Notice (NOFA)
Friday, December 19, 2025
No Comments.
Community Workshop for NOFA
Monday, March 23, 2026
No Comments.
Public Hearing/Notice (2026/2027 AAP)
Wednesday, May 6, 2026
TBD
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 63
Menifee Mayor and City Council
May 6, 2026
Page
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1 RESOLUTION NO. 26-____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA, APPROVING THE 2026/2027 ANNUAL ACTION PLAN FOR COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDING.
WHEREAS, the City of Menifee has participated directly within the F ederal Department of Housing and Urban Development (HUD) as an entitlement jurisdiction for Community Development Block Grant (CDBG) funds commencing with July 1, 2012; and
WHEREAS, the City has prepared all documents, notices, and forms required by HUD for participation in the CDBG Program by entitlement jurisdiction; and WHEREAS, the City’s 2022-2027 Consolidated Plan contains a housing and community development needs assessment, a survey of available resources, and a five-year strategy that specifies achievable housing and community development goals and programs and WHEREAS, the 2026/2027 Annual Action Plan establishes a one -year program in compliance with HUD funding allocations and requirements; and
WHEREAS, the City has given notice of the required public hearing for consideration of approval of the 2026/2027 Annual Action Plan; and
WHEREAS, the City has held a public hearing to hear public testimony of all interested parties regarding the 2026/2027 Annual Action; and
WHEREAS, all of the prerequisites with respect to the approval of this Resolution have been met NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee, California hereby to determine and order as follows:
Section 1. Subsequent to the hearing and consideration of all testimony, the City Council hereby adopts the Community Development Block Grant Program (CDBG) 2026/2027 Annual Action Plan..
Section 2. The City Manager, or designee, is hereby authorized and directed to take any actions and execute any documents as are necessary and appropriate to effectuate the intent of this Resolution, including, but not limited to, serving as the Certifying Officer fo r all environmental review procedures associated with the various CDBG projects, and Certifying Officer for the purpose of signing correspondence, agreements , and other required documents. .
Section 3. This Resolution shall take effect upon the date of its adoption.
PASSED, APPROVED, AND ADOPTED this 6th day of May 2026
___________________________
Bob Karwin, Mayor Pro Tem
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 64
Menifee Mayor and City Council
May 6, 2026
Page
322 of 714
CDBG 26/27 Annual Action Plan Reso
2 Attest:
___________________________
Stephanie Roseen, City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 65
Menifee Mayor and City Council
May 6, 2026
Page
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P
ath: E:\Project_Specific_Maps\Planning\CensusTracts2020\CensusTracts2020.aprx Date: 10/14/2024 City of Menifee Census Block Groups 2026
County of Riverside, California State Parks, Esri, TomTom, Garmin, Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 66
Menifee Mayor and City Council
May 6, 2026
Page
324 of 714
1 RESOLUTION NO. 26-____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA, APPROVING THE 2026/2027 ANNUAL ACTION PLAN FOR COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) FUNDING
WHEREAS, the City of Menifee has participated directly within the Federal Department of Housing and Urban Development (HUD) as an entitlement jurisdiction for Community Development Block Grant (CDBG) funds commencing with July 1, 2012; and
WHEREAS, the City has prepared all documents, notices, and forms required by HUD for participation in the CDBG Program by entitlement jurisdiction; and WHEREAS, the City’s 2022-2027 Consolidated Plan contains a housing and community development needs assessment, a survey of available resources, and a five-year strategy that specifies achievable housing and community development goals and programs; and WHEREAS, the 2026/2027 Annual Action Plan establishes a one-year program in compliance with HUD funding allocations and requirements; and
WHEREAS, the City has given notice of the required public hearing for consideration of approval of the 2026/2027 Annual Action Plan; and
WHEREAS, the City has held a public hearing to hear public testimony of all interested parties regarding the 2026/2027 Annual Action; and
WHEREAS, all of the prerequisites with respect to the approval of this Resolution have been met.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee, California hereby to determine and order as follows:
Section 1.Subsequent to the hearing and consideration of all testimony, the City Council hereby adopts the Community Development Block Grant Program (CDBG) 2026/2027 Annual Action Plan.
Section 2.The City Manager, or designee, is hereby authorized and directed to take any actions and execute any documents as are necessary and appropriate to effectuate the intent of this Resolution, including, but not limited to, serving as the Certifying Officer for all environmental review procedures associated with the various CDBG projects, and Certifying Officer for the purpose of signing correspondence, agreements, and other required documents.
Section 3.This resolution shall take effect upon the date of its adoption.
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 67
Menifee Mayor and City Council
May 6, 2026
Page
325 of 714
CDBG 26/27 Annual Action Plan Reso
2 5
2 0
9 8
PASSED, APPROVED, AND ADOPTED this 6th day of May 2026
___________________________
Ricky Estrada, Mayor
Attest:
___________________________
Stephanie Roseen, City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 11.1
Community Development Block Grant for Program Year 2026/2027 Annual Action Plan
Item Page Number: 68
Menifee Mayor and City Council
May 6, 2026
Page
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CITY OF MENIFEE
SUBJECT: Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
MEETING DATE: May 6, 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 Improvement Area 1 of Community Facilities District 2022-3, Legado, located south of Rouse Road and west of Antelope 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 previously completed the necessary proceedings to establish Community Facilities District No. 2022-3 of the City of Menifee, Legado, (District). As part of the proceedings, the City Council declared the necessity to issue bonds on behalf of the District for Improvement Area 1 therein (Improvement Area 1 or the Improvement Area) 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).
On September 21, 2022, the City Council adopted the Resolution of Formation, which established the District and designated Improvement Area 1 therein, authorized the levy of a special tax (Special Tax), determined the necessity to incur bonded indebtedness in an amount not to exceed $40 million within Improvement Area 1, 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 Improvement Area 1 in which the property owner approved the proposition authorizing the issuance of bonds in an amount not to exceed $40 million.
The Improvement Area is generally located east of Interstate 215 along the south side of Rouse Road, north of McCall Boulevard at Sherman Road in the northern portion of the City. The property Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 1
Menifee Mayor and City Council
May 6, 2026
Page
327 of 714
City of Menifee Staff Report
Issuance of Special Tax Bonds for Improvement Area 1 of CFD 2022-3, Legado May 6, 2026
3 3
0 0
in the Improvement Area is being developed by Lennar Homes of California, LLC (Lennar) as a community named “Legado.”
The Improvement Area includes approximately 149 gross acres planned for 491 single-family detached homes. As of March 3, 2026, the date of value of the Appraisal, Lennar had completed and conveyed 127 homes within the Improvement Area to individual homeowners, and as of such date, Lennar owned eight completed model homes and 66 homes under construction. The remaining 290 lots were owned by KL LB Buy 1 LLC (the “Lennar Landbank”), which is serving as Lennar’s landbank for the development of the Improvement Area.
Annual debt service on the proposed Special Tax Bonds, Series 2026A (2026 Bonds) will be sized based on 267 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 anticipated that parity bonds will be issued in 2027.
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, including a second amendment to the Acquisition, Construction and Funding Agreement (Acquisition Agreement) and a first amendment to Joint Community Facilities Agreement (JCFA) with Eastern Municipal Water District. The amendments are for the purpose of providing for the fact that the District now includes three improvement areas (instead of two) as a result of certain change proceedings undertaken in July 2025.
Based on current market conditions, the 2026 Bonds are estimated to have a par amount of approximately $15,445,000 with a final maturity of September 1, 2056, representing a 30-year financing term. Proceeds from the 2026 Bonds, estimated at more than $13.5 million, will 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 on or around May 14, 2026.
As required under Section 5852.1 of the California Government Code (Code), good faith estimates have been provided by the Municipal Advisor. Based on the anticipated par amount and current market conditions, the true interest cost is estimated to be 5.33% and finance charges are expected to amount to roughly $458,000.
The property owners are expected to pay Special Taxes of approximately $3,034.50 to $5,210.16 per parcel in Fiscal Year 2026-27, depending on the size of the home. Such Special Taxes will increase 2.0% annually.
Given the level of development noted above and pursuant to the City’s policy requiring additional security if any one party is responsible for more than 20% of annual debt service, Lennar will provide a Letter of Credit that may be drawn upon by the District to cover payment of special taxes levied on property owned by Lennar Homes/the Lennar Landbank. The initial term of the Letter of Credit is one year, with renewals until certain development and conveyance thresholds are met.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 2
Menifee Mayor and City Council
May 6, 2026
Page
328 of 714
City of Menifee Staff Report
Issuance of Special Tax Bonds for Improvement Area 1 of CFD 2022-3, Legado May 6, 2026
3 3
0 0
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
Joint Community Facilities Agreement Amendment
Acquisition Construction and Funding Agreement Amendment 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 with the financing team to finalize the aforementioned documents. The pricing of the bonds is targeted for the middle of this month, with bond closing anticipated approximately two weeks later.
This item was presented to the Finance Committee at its March 16 meeting. A motion was made and approved to bring the item forward for City Council consideration.
STRATEGIC PLAN OBJECTIVE
Regular City Business
FISCAL IMPACT
The 2026 Bonds will be paid from Special Taxes levied in the Improvement Area. There is no fiscal impact to the City’s General Fund. The City will, however, be required to provide administration for the Improvement Area, which will be funded as part of the annual Special Tax levy.
The property owners are expected to pay Special Taxes of approximately $3,034.50 to $5,210.16 per parcel in Fiscal Year 2026-27, depending on the size of the home. Such Special Taxes will increase by 2.0% per year.
ATTACHMENTS
1. CFD 2022-3 IA 1 Project Map
2. CFD 2022-3 IA 1 Good Faith Estimates
3. CFD 2022-3 IA 1 Resolution
4. CFD 2022-3 IA 1 Preliminary Official Statement
5. CFD 2022-3 IA 1 Bond Indenture
6. CFD 2022-3 IA 1 Continuing Disclosure Certificate
7. CFD 2022-3 IA 1 Bond Purchase Agreement
8. CFD 2022-3 IA 1 Appraisal Report
9. CFD 2022-3 IA 1 Joint Community Facilities Agreement Amendment
10. CFD 2022-3 IA 1 Joint Community Facilities Agreement (Original)
11. CFD 2022-3 IA 1 Acquisition Agreement Second Amendment
12. CFD 2022-3 IA 1 Acquisition Agreement (Original and First Amendment) Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 3
Menifee Mayor and City Council
May 6, 2026
Page
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Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado Item Page Number: 4
Menifee Mayor and City Council
May 6, 2026
Page
330 of 714
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the District by Urban Futures, Inc., the District’s Municipal Advisor (the “Municipal Advisor”) in consultation with Stifel, Nicolaus & Company, Incorporated , the Underwriter for the Bonds.
Principal Amount. The Municipal Advisor has informed the City that, based on the City’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $ 15,445,000 (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 5.33%.
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 $458,063.
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 $13,524,768.
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 $33,313,164.
The foregoing estimates constitute good faith estimates only. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the Estimated Principal Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 5
Menifee Mayor and City Council
May 6, 2026
Page
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Amount, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City’s financing plan, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of Bonds sold will be determined by the City based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 6
Menifee Mayor and City Council
May 6, 2026
Page
332 of 714
4907-2764-5583v5/200299-0031
RESOLUTION NO. 26-___
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO) OF THE CITY OF MENIFEE AUTHORIZING THE ISSUANCE OF ITS IMPROVEMENT AREA NO. 1 SPECIAL TAX BONDS, SERIES 2026A IN A PRINCIPAL AMOUNT NOT TO EXCEED SIXTEEN MILLION DOLLARS ($16,000,000)
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. 2022-3 (Legado) of the City of Menifee (the “District”) and declared the necessity to issue bonds on behalf of the District for Improvement Area No. 1 therein (“Improvement Area No. 1”) pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the “Act”); and WHEREAS, pursuant to Resolution Nos. 22-1222 and 22-1223 adopted by the legislative body of the District on September 21, 2022, certain bond propositions were submitted to the qualified electors within Improvement Area No. 1 and were approved by more than two-thirds of the votes cast at the election held on September 21, 2022; and
WHEREAS, subsequent to the formation of the District, the District received petitions signed by certain property owners within the District, requesting that the District, among other matters (i) approve a new rate and method of apportionment for Improvement Area No. 1 and (ii) amend the list of facilities authorized to be financed by the District with respect to Improvement Area No. 1 (collectively, the “Change Proceedings”); and
WHEREAS, on July 16, 2025, following the close of a noticed public hearing, the Council adopted Resolution No. 25-1613, which called a special election on July 16, 2025, within Improvement Area No. 1 on the approval of the Change Proceedings; and WHEREAS, on July 16, 2025, a special election was held within Improvement Area No. 1 at which the qualified electors approved by more than a two-thirds vote, the Change Proceedings; and WHEREAS, the legislative body of the District desires to issue a first series of bonds for Improvement Area No. 1 of the District at this time under the Act to finance certain public facilities which the District is authorized to finance (the “Facilities”); and WHEREAS, the District desires to finance certain Facilities through the issuance of bonds in an aggregate principal amount not to exceed $16,000,000 designated as the “Community Facilities District No. 2022-3 (Legado) of the City of Menifee Improvement Area No. 1 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 Improvement Area No. 1, the value of the real property in Improvement Area No. 1 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 Improvement Area No. 1 as calculated in the manner set forth in Section 53345.8(a) of the Act; and
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 7
Menifee Mayor and City Council
May 6, 2026
Page
333 of 714
Resolution Authorizing the Issuance of Improvement Area No. 1 Special Tax Bonds for CFD No. 2022-3 (Legado) 2 5
2 1
2 3
WHEREAS, the City Council has determined in accordance with Section 53360.4 of the Act that a negotiated sale of the Bonds to Stifel, Nicolaus & Company, Incorporated (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 City Council desires to approve a second amendment to the Acquisition, Construction and Funding Agreement with BLC Fleming, LLC (the “Second Amendment to Acquisition Agreement”) and a first amendment to Joint Community Facilities Agreement with Eastern Municipal Water District and BLC Fleming, LLC (the “First Amendment to JCFA”) to reflect that Improvement Area No. 3 was created within the District as part of the Change Proceedings, and the forms of such amendments are presented at this meeting; and
WHEREAS, the District has determined to adopt the City’s Debt Management Policy as the debt management policy of the District; and
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Menifee hereby finds, determines and orders as follows:
Section 1. Each of the above recitals is true and correct.
Section 2. The issuance of the Bonds is hereby authorized in an aggregate principal amount not to exceed $16,000,000 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, the Chief Financial Officer (or any acting or interim of such position), 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 Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 8
Menifee Mayor and City Council
May 6, 2026
Page
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Resolution Authorizing the Issuance of Improvement Area No. 1 Special Tax Bonds for CFD No. 2022-3 (Legado) 3 5
2 1
2 3
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 1.25% 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.
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. The forms of the Second Amendment to the Acquisition Agreement and the First Amendment to the JCFA presented at this meeting are hereby approved and each of the Authorized Officers is hereby authorized and directed to execute the Second Amendment to the Acquisition Agreement and the First Amendment to the JCFA in the forms 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 agreements.
Section 9. 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 Improvement Area No. 1 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 Improvement Area No. 1, all Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 9
Menifee Mayor and City Council
May 6, 2026
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Resolution Authorizing the Issuance of Improvement Area No. 1 Special Tax Bonds for CFD No. 2022-3 (Legado) 4 5
2 1
2 3
as calculated in the manner provided in Section 53345.8(a) of the Act.
Section 10. 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 11. 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 and Improvement Area No. 1 that 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 12. 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 Code Section 8855.
Section 13. 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 14. This resolution shall be effective upon its adoption.
PASSED, APPROVED AND ADOPTED this the 6th day of May, 2026. ___________________________
Ricky Estrada, Mayor
Attest:
___________________________
Stephanie Roseen, City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 10
Menifee Mayor and City Council
May 6, 2026
Page
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Stradling Yocca Carlson & Rauth
Draft of 4/6/2026
PRELIMINARY OFFICIAL STATEMENT DATED MAY __, 2026
NEW ISSUE – BOOK ENTRY ONLY NO RATING
In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California ( “Bond Counsel”), under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds is ex cluded 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 “TAX MATTERS” with respect to tax consequences relating to the Bonds, including with respect to the alternative minimum tax imposed on certain large corporations. $15,510,000*
COMMUNITY FACILITIES DISTRICT NO. 2022-3
(LEGADO) OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 1
SPECIAL TAX BONDS, SERIES 2026A
Dated: Delivery Date Due: September 1, as shown on inside cover page The Community Facilities District No. 2022-3 (Legado) of the City of Menifee Improvement Area No. 1 Special Tax Bonds, Series 2026A (the “Bonds”) are being issued by the Community Facilities District No. 2022 -3 (Legado) of the City of Menifee (the “District”) to: (i) finance certain public improvements needed with respect to the development of property located within the District, including public improvements to be owned by the City of Menifee (the “City”) and water and sewer facilities to be owned and operated by the Eastern Municipal Water District , (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 Improvement Area No. 1 of the District (“Improvement Area No. 1 ”) 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 th e City and the qualified electors within Improvement Area No. 1. 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 interest on the Bonds will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants, who will remit such payments to the Beneficial Owners of the Bonds.
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY OF RIVERSIDE, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE NET TAXES, NO OTHER REVENUES OR TAXES ARE PLEDGED T O THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL
OBLIGATIONS OF THE CITY OR GENERAL OBLIGATIONS OF THE DISTRICT BUT ARE LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM NET TAXES AND OTHER AMOUNTS HELD UNDER THE INDENTURE AS MORE FULLY DESCRIBED HEREIN.
The Bonds are subject to optional redemption, special mandatory redemption and mandatory sinking fund redemption prior to mat urity as set forth herein. See the caption “THE BONDS — Redemption.”
Investment in the Bonds involves risks that are not appropriate for certain investors. Certain events could affect the 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 Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the City and the District by Rutan & Tucker, LLP, Irvine, California, City Attorney, and for the District by Stradling Yocca Carlson & Rauth LLP, Disclosure Counsel, for the Underwriter
* Preliminary, subject to change
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 11
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May 6, 2026
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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 May __, 2026.
[INSERT STIFEL LOGO]
Dated: May __, 2026
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 12
Menifee Mayor and City Council
May 6, 2026
Page
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$15,510,000*
COMMUNITY FACILITIES DISTRICT NO. 2022-3
(LEGADO) OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 1
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: _____ CUSIP No.† ______________
* Preliminary, subject to change
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S&P Global Market Intelligence. 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 substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the District, the City, the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 13
Menifee Mayor and City Council
May 6, 2026
Page
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CITY OF MENIFEE
COUNTY OF RIVERSIDE, CALIFORNIA
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
Travis Hickey, Chief Financial Officer
CITY ATTORNEY
Rutan & Tucker, LLP
Irvine, California
BOND AND DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth LLP
Newport Beach, California
MUNICIPAL ADVISOR
Urban Futures, Inc.
Walnut Creek, California
SPECIAL TAX CONSULTANT
Spicer Consulting Group, LLC
Murrieta, California
APPRAISER
Kitty Siino & Associates, Inc.
Tustin, California
TRUSTEE
Wilmington Trust, National Association
Costa Mesa, California
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 14
Menifee Mayor and City Council
May 6, 2026
Page
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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.
The Underwriter has provided the following sentence for inclusion in this Official Statement:
The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in t he affairs of the City, the District or any other parties described herein since the date hereof. All summaries of the Indenture or other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the City for further information in connection therewith.
THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
Certain statements included or incorporated by reference in this Official Statement constitute “ forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statemen ts are generally identifiable by the terminology used such as a “ plan,” “expect,” “estimate,” “project,” “budget,” or similar words. Such forward-looking statements include, but are not limited to certain statements contained in the information under the captions “THE DISTRICT AND IMPROVEMENT AREA NO. 1” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH
FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS
DESCRIBED TO BE MATERIALLY DI FFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD -LOOKING STATEMENTS. THE
DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD- LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT. IN EVALUATING SUCH STATEMENTS,
POTENTIAL INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS WHICH COULD
CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.
The City maintains a website. However, the information presented on such website is not part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 15
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May 6, 2026
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i
TABLE OF CONTENTS
Page
INTRODUCTION ................................................................................................................................................ 1 The District and Improvement Area No. 1 ....................................................................................................... 1 Sources of Payment for the Bonds .................................................................................................................... 3 Appraisal Report ............................................................................................................................................... 4 Description of the Bonds .................................................................................................................................. 4 Tax Exemption.................................................................................................................................................. 4 Professionals Involved in the Offering ............................................................................................................. 5 Continuing Disclosure ...................................................................................................................................... 5 Parity Bonds ..................................................................................................................................................... 5 Bond Owners’ Risks ......................................................................................................................................... 6 Other Information ............................................................................................................................................. 6 FINANCING PLAN ............................................................................................................................................. 6 Estimated Sources and Uses of Funds .............................................................................................................. 6 THE BONDS ........................................................................................................................................................ 6 General Provisions ............................................................................................................................................ 6 Debt Service Schedule ...................................................................................................................................... 8 Redemption ....................................................................................................................................................... 8 Registration, Transfer and Exchange .............................................................................................................. 12 SOURCES OF PAYMENT FOR THE BONDS ................................................................................................ 12 Limited Obligations ........................................................................................................................................ 12 Special Taxes .................................................................................................................................................. 13 Reserve Account of the Special Tax Fund ...................................................................................................... 19 No Teeter Plan ................................................................................................................................................ 19 Parity Bonds ................................................................................................................................................... 20 Lennar Letter of Credit ................................................................................................................................... 20 THE DISTRICT AND IMPROVEMENT AREA NO. 1 ................................................................................... 21 General Description of the District and Improvement Area No. 1 ................................................................. 21 Authorized Uses of Bond Proceeds ................................................................................................................ 21 Appraisal Report ............................................................................................................................................. 22 Estimated Appraised Value-to-Lien Ratios .................................................................................................... 23 Direct and Overlapping Debt .......................................................................................................................... 26 Delinquency History ....................................................................................................................................... 30 PROPERTY OWNERSHIP AND THE DEVELOPMENT ............................................................................... 30 General ............................................................................................................................................................ 30 Planned Development Within Improvement Area No. 1 ................................................................................ 31 Lennar ............................................................................................................................................................. 35 SPECIAL RISK FACTORS ............................................................................................................................... 36 Risks of Real Estate Secured Investments Generally ..................................................................................... 36 Insufficiency of Special Tax Revenues........................................................................................................... 37 Increasing Mortgage Interest Rates ................................................................................................................ 38 Impact of Economic Conditions on the Development in Improvement Area No. 1 ....................................... 38 Concentration of Ownership ........................................................................................................................... 38 Property Insurance .......................................................................................................................................... 39 Property Values .............................................................................................................................................. 39 Natural Disasters ............................................................................................................................................. 40 Hazardous Substances .................................................................................................................................... 40 Enforcement Delays – Bankruptcy ................................................................................................................. 41 Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 16
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ii
Special Tax Delinquencies.............................................................................................................................. 41 FDIC/Federal Government Interests in Parcels .............................................................................................. 41 Direct and Overlapping Indebtedness ............................................................................................................. 42 Payment of Special Taxes is not a Personal Obligation of the Property Owners ........................................... 43 No Acceleration Provision .............................................................................................................................. 43 Limited Obligations ........................................................................................................................................ 43 Ballot Initiatives.............................................................................................................................................. 44 Proposition 218 ............................................................................................................................................... 44 Litigation with Respect to Community Facilities Districts ............................................................................. 45 Loss of Tax Exemption ................................................................................................................................... 46 No Ratings – Limited Secondary Market ....................................................................................................... 46 Limitations on Remedies ................................................................................................................................ 46 Potential Early Redemption of Bonds from Prepayments or Community Facilities District Bond Proceeds ................................................................................................................................................... 46 Cybersecurity .................................................................................................................................................. 47 CONTINUING DISCLOSURE .......................................................................................................................... 47 District Continuing Disclosure ....................................................................................................................... 47 Developer Continuing Disclosure ................................................................................................................... 47 TAX MATTERS................................................................................................................................................. 48 LEGAL OPINION .............................................................................................................................................. 49 ABSENCE OF LITIGATION ............................................................................................................................ 49 NO RATING ...................................................................................................................................................... 50 UNDERWRITING ............................................................................................................................................. 50 FINANCIAL INTERESTS ................................................................................................................................. 50 MUNICIPAL ADVISOR ................................................................................................................................... 51 MISCELLANEOUS ........................................................................................................................................... 51
APPENDIX A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX ......................... A-1 APPENDIX B CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION ............................ B-1 APPENDIX C FORM OF OPINION OF BOND COUNSEL ................................................................ C-1 APPENDIX D APPRAISAL REPORT .................................................................................................. D-1 APPENDIX E SUMMARY OF THE INDENTURE ............................................................................. E-1 APPENDIX F FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE .......................F-1 APPENDIX G FORM OF DEVELOPER CONTINUING DISCLOSURE CERTIFICATE ................. G-1 APPENDIX H BOOK-ENTRY ONLY SYSTEM .................................................................................. H-1 Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 17
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May 6, 2026
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[INSERT VICINITY MAP]
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 18
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May 6, 2026
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[INSERT AERIAL PHOTOGRAPH]
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 19
Menifee Mayor and City Council
May 6, 2026
Page
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1 $15,510,000*
COMMUNITY FACILITIES DISTRICT NO. 2022-3
(LEGADO) OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 1
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. 2022 -3 (Legado) of the City of Menifee (the “District”) of its Improvement Area No. 1 Special Tax Bonds, Series 2026A in the aggregate principal amount of $15,510,000* (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”) and water and sewer facilities to be owned and operated by the Eastern Municipal Water District, (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 May 6, 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) levied on parcels within Improvement Area No. 1 of the District (“Improvement Area No. 1” ) and all moneys in the Special Tax Fund (other than the Adm inistrative 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 and Improvement Area No. 1
General. The City is located in the south western portion of the County of Riverside (the “ County”), California (the “ State”). The District consists of Improvement Area No. 1, Improvement Area No. 2 and Improvement Area No. 3. The District is generally bordered by the I-215 to the west, Rouse Road to the north, Antelope Road to the east and Chambers Avenue to the south. At buildout, the District is expected to include approximately 1,022 residential units. Approximately 20.1 acres adjacent to the western boundary of the District is planned for commercial use.
Improvement Area No. 1 is generally located east of I-215 along the south side of Rouse Road, north of McCall Boulevard at Sherman Road in the northern portion of the City of Menifee. The property in Improvement Area No. 1 is being developed by Lennar Homes of California, LLC, a California limited liability company (“Lennar”) as a community named “Legado.”
Improvement Area No. 1 includes approximately 149 gross acres planned for 491 single family detached homes. As of March 3, 2026, Lennar had completed and conveyed 127 homes within Improvement Area No. 1 to individual homeowners. As of such date, Lennar owned eight completed model homes and 66 homes under construction. The remaining 290 lots were owned by KL LB Buy 1 LLC (t he “Lennar Landbank”), which is serving as Lennar’s landbank for the development of Improvement Area No. 1. Lennar has the option – but not
* Preliminary, subject to change
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 20
Menifee Mayor and City Council
May 6, 2026
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2 the obligation – to acquire lots pursuant to a phased takedown schedule pursuant to an agreement with the Lennar Landbank, as described herein.
Other than the neighborhood parks described below, the major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within Improvement Area No. 1 has been completed. Lennar expects to complete the rema ining in-tract infrastructure within Improvement Area No. 1, which consists of landscaping, finishing of certain interior streets, and wet and dry utilities as construction of the related homes occurs.
Pursuant to the development agreement between the City and Lennar (as amended, the “ Development Agreement”) relating to the Legado project, the number of occupancy permits authorized to be issued for Legado is limited to 200 in the westside tract prior to the Westside Park being completed and 95 occupancy permits in the eastside tract prior to Eastside Park being completed. Westside Park is currently estimated to be completed in the fall of 2026 and Eastside Park by December 31, 2026. As of March 3, 2026, individuals own 127 homes in the west side tracts and no homes in the east side tracts within Improvement Area No. 1. Lennar currently does not expect the timing of completion of the parks to cause any delays in the issuance of occupancy permits in Improvement Area No. 1.
See the captions “ THE DISTRICT AND IMPROVEMENT AREA NO. 1 ” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT” for further information with respect to the District, Lennar and the development within Improvement Area No. 1.
Formation Proceedings. The District was formed, and Improvement Area No. 1 and Improvement Area No. 2 were designated therein on September 21, 2022 pursuant to the Act. The Act was enacted to provide an alternative method of financing certain public capital facilities and services, especially in developing areas of the State. Any local agency (as defined in the Act) may establish a community facili ties district to provide for and finance the cost of eligible public facilities and services. Generally, the legislative body of the local agency which forms a community facilities district acts on behalf of such district as its legislative body. Subject to approval by two-thirds of the votes cast at an election and compliance with the other provisions of the Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness.
Pursuant to the Act, on August 3, 2022 the City Council adopted Resolution No. 22-1187 (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 Improvement Area No. 1.
Subsequent to a noticed public hearing on September 21, 2022, the City Council adopted Resolution Nos. 22-1222 and 22-1223 (collectively the “ Resolution of Formation”). The Resolution of Formation, with respect to Improvement Area No. 1: (i) established the District and designated Improvement Area No. 1 therein; (ii) authorized the levy of a special tax (the “Special Tax”) within Improvement Area No. 1; (iii) determined the necessity to incur bonded indebtedness in an amount not to exceed $40,000,000 within Improvement Area No. 1; and (iv) called an election within Improvement Area No. 1 on the proposition of incurring bonded indebtedness, levying the Special Tax and setting an appropriations limit.
On September 21, 2022, an election was held within Improvement Area No. 1 in which the property owner within Improvement Area No. 1 approved the proposition authorizing the issuance of bonds in an amount not to exceed $40,000,000. A Notice of Special Tax Lien for the Improvement Area No. 1 was recorded in the office of the County Recorder on September 30, 2022, as Document No. 2022-0413061.
Subsequent to the formation of the District and Improvement Area No. 1 as described above, pursuant to a petitions signed by the property owner Improvement Area No. 1, on June 4, 2025, the City Council, acting as the legislative body of the District, adopt ed Resolution No. 25- 1583 declaring its intention to consider (i) amending the rate and method of apportionment of special tax for Improvement Area No. 1 approved at the Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
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3 September 21, 2022 special election; and (ii) amending the list of facilities authorized to be funded by the District for Improvement Area No. 1 (collectively, the “Change Proceedings”).
Subsequent to a noticed public hearing on July 16, 2025, the City Council, acting as the legislative body of the District, adopted Resolution No. 25- 1613 approving an amended rate and method of apportionment of special tax for the District (the “Rate and Method”) and called an election within the District on the proposition of levying the special taxes in accordance with the Rate and Method and the other matters included within the Change Proceedings, which was approved by the property owner within Improvem ent Area No. 1. A copy of the Rate and Method is attached hereto as Appendix A. An Amended Notice of Special Tax Lien for the District was recorded in the office of the County Recorder on July 30, 2025, as Document No. 2025-0232198. On August 6, 2025, the City Council adopted Ordinance No. 2025-418 (the “Ordinance”) which authorizes the levy of a special tax pursuant to the Rate and Method approved at the July 16, 2025 election.
In addition to the Change Proceedings described above, pursuant to a petition by the property owners, the City Council, acting as the legislative body of the District, also undertook change proceedings to designate Improvement Area No. 3 of the District from a portion of the property in Improvement Area No. 2. Any special taxes levied within Improvement Area No. 2 and Improvement Area No. 3 of the District are not pledged to, and are not available to pay, debt service on the Bonds.
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 Improvement Area No. 1. See the caption “ SOURCES OF PAYMENT FOR THE BONDS — Special Taxes” and Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX. ” See the caption “THE DISTRICT AND IMPROVEMENT AREA NO. 1.”
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.”
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) c ommence judicial foreclosure proceedings against parcels owned by a single taxpayer whose properties in the aggregate have 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 (iii ) 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 (iv) 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 Improvement Area No. 1 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 Improvement Area No. 1. See the caption “SPECIAL RISK FACTORS —Property Values.” Item Title: 12.1
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4 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”) of certain land and existing improvements within Improvement Area No. 1 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 Improvement Area No. 1 subject to the levy of Special Taxes, assuming that development of the property as currently planned will consist of 491 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 Improvement Area No. 1 subject to the Special Tax was $134,237,747 as of March 3, 2026 (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 Report. See “ THE DISTRICT AND IMPROVEMENT AREA NO. 1 — Appraisal Report” and “— Estimated Appraised Value- to-Lien Ratios.” There is no assurance that property within Improvement Area No. 1 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 AND IMPROVEMENT AREA NO. 1 ,” “SPECIAL RISK FACTORS — Property Values ” herein and Appendix D.
Description of the Bonds
The Bonds will be issued and delivered as fully registered Bonds, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to actual purchasers of the Bonds (the “ Beneficial Owners”) in the denominations of $5,000 or any integral multiple thereof, under the book- entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery of the Bonds. In the event that the book-entry only system described herein is no longer used with respect to the Bonds, the Bonds will be registered and transferred in accordance wit h 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 Item Title: 12.1
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5 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.”
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. Stifel, Nicolaus & Company, Incorporated, (the “Underwriter”) is the Underwriter of the Bonds.
Certain proceedings in connection with the issuance and delivery of the Bonds are subject to the approval of Stradling Yocca Carlson & Rauth LLP , Newport Beach, California, Bond Counsel and Disclosure Counsel to the District in connection with the issuance of the Bonds. Certain legal matters will be passed o n 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”) 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”).
The Underwriter does not consider Lennar or the Lennar Landbank to be “ obligated persons” with respect to the Bonds for purposes of Rule 15c2-12. Notwithstanding the foregoing, to assist in the marketing of the Bonds, Lennar will agree to provide, or cause to be provided to EMMA, certain updates with respect to the development within Improvement Area No. 1 and notices of certain enumerated events. See Appendix G for a description of the specific nature of the semiannual reports and enumerated event notices to be filed by Lennar.
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.” 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 Improvement Area No. 1, which could a dversely affect the willingness of the landowners to pay the Special Taxes when due. See the captions “THE DISTRICT AND IMPROVEMENT AREA NO. 1 — Direct and Overlapping Debt” and “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.”
Item Title: 12.1
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6 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.
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, 925 86, 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
Less Net Original Issue Discount
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”), and will mature in the amounts and on the dates set forth on the inside cover page of this Official Statement. Interest will be calculated on the basis of a 360-day year comprised of twelve 30-day months. The Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof.
Item Title: 12.1
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7 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 whe ther such day is a Business Day (each, a “Record Date”) but prior to the immediately succeeding Interest Payment Date, in which event interest will be payable from the Interest Payment Date immediately succeeding the date of authentication; or (iii) the date of authentication is prior to the close of business on the first Record Date occurring after the issuance of such Bond, in which event interest will be payable from the dated date of such Bond, as applicable; provided, however, that if at the time of authentication of such Bond, interest is in default, interest on such Bond will be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment on such Bond, interest on such Bond will be payable from its dated date.
Interest on any Bond will be paid to the person whose name appears as its owner in the registration books held by the Trustee on the close of business on the Record Date. Principal of, premium, if any, due upon redemption is payable upon presentation and surrender of the Bonds at the principal corporate trust office of the Trustee in Costa Mesa, California.
The Bonds will be issued as fully registered bonds and will be registered in the name of Cede & Co., as nominee of DTC. DTC will act as securities depository of the Bonds. Ownership interests in the Bonds may be purchased in book-entry form only in denominations 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
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
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8 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
Redemption
Optional Redemption. The Bonds may be redeemed at the option of the District from any source of funds (other than prepayments of the Special Tax by property owners) on any Interest Payment Date on or after September 1, 2032, in whole or in part, from such maturities as are selected by the District and by lot within a maturity, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the date of redemption:
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9 Redemption Date Redemption Price
September 1, 2032 and March 1, 2033 103%
September 1, 2033 and March 1, 2034 102
September 1, 2034 and March 1, 2035 101
September 1, 2035 and any Interest Payment Date thereafter 100
In the event that the District elects to redeem Bonds as provided above, the District will give written notice to the Trustee of its election to so redeem, the redemption date and the principal amount of the Bonds of each maturity to be redeemed. The notice to the Trustee will be given at least 30 but no more than 60 days prior to the redemption date, or by such later date as is acceptable to the Trustee.
Mandatory Sinking Fund Redemption. The 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, 2026, and will be redeemed by the Trustee, from any amounts paid by the District to the Trustee and designated by the District as a prepayment of Special Taxes for one or more parcels in Improvement Area No. 1 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:
Item Title: 12.1
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10 Redemption Date Redemption Price
Interest Payment Dates through and including March 1, 2033__ 103% September 1, 2033 and March 1, 2034 102
September 1, 2034 and March 1, 2035 101
September 1, 2035 and any Interest Payment Date thereafter 100
Prepayments and amounts released from the Reserve Account in connection with Prepayments will be allocated to the payment at maturity and redemption of Bonds and any Parity Bonds as nearly as practicable on a proportionate basis based on the outstanding pr incipal amount of the Bonds and any Parity Bonds and such amounts shall be applied to redeem Bonds and Parity Bonds as nearly as practicable on a pro rata basis among maturities in increments of $5,000; provided, however, that, for Prepayments of less than $50,000, the District may specify in a Certificate of an Authorized Representative that Prepayments be applied to one or more maturities of the Bonds or Parity Bonds so long as there is delivered to the Trustee a Certificate of the Independent Financial Consultant that, following such application of the Prepayments, the maximum Special Taxes that may be levied in each Fiscal Year on Taxable Property is not less than 110% of Annual Debt Service in the Bond Year that begins in such Fiscal Year.
See the caption “ SPECIAL RISK FACTORS — Potential Early Redemption of Bonds from Prepayments or Community Facilities District Bond Proceeds” for a discussion of the potential for a lower than expected yield on the Bonds as a result of a special mandatory redemption from prepayment of Special Taxes or proceeds of bonds of other community facilities districts.
Notice of Redemption. So long as the Bonds are held in book-entry form, notice of redemption will be sent by the Trustee to DTC and not to the Beneficial Owners of the Bonds under the DTC book- entry only system. Neither the District nor the Trustee is responsible for notifying the Beneficial Owners, who are to be notified in accordance with the procedures in effect for the DTC bo ok-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 originally issued; (vii) state the rate of interest borne by each Bond being redeemed; and (viii) state any other descriptive information needed to identify accurately the Bonds being 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 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 tha t he or she failed to receive notice of such redemption.
Item Title: 12.1
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11 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, if 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 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.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 30
Menifee Mayor and City Council
May 6, 2026
Page
356 of 714
12 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
LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM THE NET TAXES AND OTHER AMOUNTS PLEDGED UNDER THE INDENTURE AS MORE FULLY DESCRIBED HEREIN.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 31
Menifee Mayor and City Council
May 6, 2026
Page
357 of 714
13 Special Taxes
Authorization and Pledge . In accordance with the provisions of the Act, the City established the District and designated Improvement Area No. 1 therein on September 21, 2022 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 September 21, 2022, the qualified elector within Improvement Area No. 1 authorized the District to incur indebtedness in an amount not to exceed $ 40,000,000 for Improvement Area No. 1. In connection with the Change Proceedings, on July 16, 2025, the qualified elector within Improvement Area No. 1 voted to approve the Rate and Method which authorized the Special Tax to be levied to repay indebtedness of the District for Improvement Area No. 1, 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.” None of the special taxes levied within the Improvement Area No. 2 and Improvement Area No. 3 are pledged to, or available to pay, debt service on the Bonds.
Rate and Method of Apportionment of Special Tax. The Rate and Method applicable to Improvement Area No. 1 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 Improvement Area No. 1 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 i ssued 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
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 32
Menifee Mayor and City Council
May 6, 2026
Page
358 of 714
14 funds from an escrow account, (iv) any amount equal to establish or replenish any reserve funds established in association with the Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax delinquencies , (vi) for debt service on the Bonds anticipated to be issued, (vii) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by the District, provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps Two or Three of Section E of the Rate and Method attached as Appendix A and, less (viii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture.
The Special Tax Requirement for Improvement Area No. 1 is to be satisfied first by levying the Special Tax Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax. If additional moneys are needed to satisfy the Special Tax Requirement, the Special Tax will be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel. If additional moneys are still need ed to satisfy the Special Tax Requirement, the Special Tax will be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel. If additional moneys are needed to satisfy the Special Tax Requirement, the Special Tax on each Assessor’s Parcel of Developed Property 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 ea ch such Assessor’s Parcel. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor’s Parcel of Residential Property as a result of a delinquency in the payment of the Special Tax applicable to any other Assessor’ s Parcel be increased by more than 10% above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default The Rate and Method establishes three Tax Zones within Improvement Area No. 1. For Fiscal Year 2026-27, the Assigned Special Tax for Developed Property within Improvement Area No. 1 that is classified as Single Family Residential Property will range from $3,034.50 per taxable unit with a Building Square Footage of less than 1,600 square feet to $3,226.26 per taxable unit with a Building Square Footage of greater than 2,000 square feet in Tax Zone 1, from $3,079.38 per taxable unit with a Building Square Footage of less than 1,900 square feet to $3,526.14 per taxable unit with a Building Square Footage of greater than 2,500 square feet in Tax Zone 2 and from $ 3,079.38 per taxable unit with a Building Square Footage of less than 1,900 square feet to $5,210.16 per taxable unit with a Building Square Footage of greater than 3,500 square feet in Tax Zone 3. 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 expected to be classified as Single Family Residential Property will be $3,271.74 per unit for Tax Zone 1, $3,516.57 per unit for Tax Zone 2, and $4,170.81 per unit for Tax Zone 3.
Table 1 below sets forth the Assigned Special Tax for Developed Property, the Maximum Special Tax for Approved Property, the estimated Fiscal Year 2026-27 Special Tax levy and the percent of such levy based on land use type.
Annual Debt Service on the Bonds has been sized based on the Special Tax revenues to be received in each Fiscal Year from the 267 of the 491 parcels with building permits issued as of March 3, 2026, assuming that the Special Taxes are levied at 100% of the Assigned Special Tax on such property. Assuming no delinquencies, the Special Tax levy on these 267 parcels will generate in each Fiscal Year not less than the Administrative Expenses Cap plus 110% of debt service payable with respect to the Bonds in the calendar year that begins in that Fiscal Year, assuming that Special Taxes are levied and collected on such Developed Property pursuant to the Rate and Method. Special Taxes may be levied on the remaining 224 parcels to pay debt service Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 33
Menifee Mayor and City Council
May 6, 2026
Page
359 of 714
15 on the Bonds, if needed. The District is expected to issue Parity Bonds to finance additional Project Costs in 2027, and any Special Taxes will be available to pay debt service on both the Bonds and Parity Bonds.
The District does not expect to levy Special Taxes 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.
TABLE 1
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
IMPROVEMENT AREA NO. 1
ASSIGNED SPECIAL TAX RATES FOR FISCAL YEAR 2026-27
Tax Zone/
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
Tax Zone 1
1 Residential Property < 1,600 sq ft $3,034.50 $3,034.50 100.0% 19 $57,655.50 6.2% 2 Residential Property 1,600 - 1,800 sq ft 3,043.68 3,043.68 100.0 18 54,786.24 5.9 3 Residential Property 1,801 - 2,000 sq ft 3,130.38 3,130.38 100.0 18 56,346.84 6.1 4 Residential Property > 2,000 sq ft 3,226.26 3,226.26 100.0 18 58,072.68 6.2 5 Approved Property N/A 3,271.74 0.00 0.0 86 0.00 0.0
Tax Zone 2
1 Residential Property < 1,900 sq ft $3,079.38 $3,079.38 100.0% 6 $18,476.28 2.0% 2 Residential Property 1,900 - 2,100 sq ft 3,265.02 3,265.02 100.0 35 114,275.70 12.3 3 Residential Property 2,101 - 2,300 sq ft 3,329.28 3,329.28 100.0 26 86,561.28 9.3 4 Residential Property 2,301 - 2,500 sq ft 3,464.94 3,464.94 100.0 14 48,509.16 5.2 5 Residential Property > 2,500 sq ft 3,526.14 3,526.14 100.0 19 66,996.66 7.2 6 Approved Property N/A 3,516.57 0.00 0.0 74 0.00 0.0
Tax Zone 3
1 Residential Property < 1,900 sq ft $3,079.38 $3,079.38 100.0% 10 $30,793.80 3.3% 2 Residential Property 1,900 - 2,100 sq ft 3,265.02 3,265.02 100.0 15 48,975.30 5.3 3 Residential Property 2,101 - 2,300 sq ft 3,411.90 3,411.90 100.0 8 27,295.20 2.9 4 Residential Property 2,301 - 2,500 sq ft 3,634.26 3,634.26 100.0 1 3,634.26 0.4 5 Residential Property 2,501 - 2,700 sq ft 3,856.62 3,856.62 100.0 14 53,992.68 5.8 6 Residential Property 2,701 - 2,900 sq ft 3,985.14 3,985.14 100.0 16 63,762.24 6.9 7 Residential Property 2,901 - 3,100 sq ft 4,089.18 4,089.18 100.0 14 57,248.52 6.2 8 Residential Property 3,101 - 3,300 sq ft 4,462.50 0.00 0.0 0 0.00 0.0 9 Residential Property 3,301 - 3,500 sq ft 4,835.82 0.00 0.0 0 0.00 0.0 10 Residential Property > 3,500 sq ft 5,210.16 5,210.16 100.0 16 83,362.56 9.0 11 Approved Property N/A 4,170.81 0.00 0.0 64 0.00 0.0 Total 491 $930,744.90 100.0%
(1) Maximum rate per unit for Approved Property based on the final tract maps. (2) Includes estimated Administrative Expenses of $30,600.
Source: Spicer Consulting Group, LLC.
Backup Special Tax Rates . The Backup Special Tax for an Assessor’s Parcel within a Final Map classified or 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 r esidential 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 $24,938 per Acre for Tax Zone 1, $23,901 per Acre for Tax Zone 2, and $22,810 per Acre for Tax Zone 3 for Fiscal Year 2026-27. In the event any superseding Final Map is recorded as a Final Map within the boundaries of Improvement Area No. 1, the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be $24,938 per Acre for Tax Zone 1, $ 23,901 per Acre for Tax Zone 2, and $22,810 per Acre for Tax Zone 3 for Fiscal Year 2026-27. The Backup Special Tax Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 34
Menifee Mayor and City Council
May 6, 2026
Page
360 of 714
16 shall not apply to M ultifamily 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 Public Property or Provisional Undeveloped Property that are not Exempt Property pursuant to Section F of the Rate and Method attached as Appendix A. In addition, the Maximum Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property or Undevel oped 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.”
Estimated Debt Service Coverage. Annual Debt Service on the Bonds has been sized based on the Special Tax revenues to be received in each Fiscal Year from the 267 parcels with building permits issued as of March 3, 2026, assuming that the Special Taxes are levied at 100% of the Assigned Special Tax on such property.
In connection with the issuance of the Bonds, the Special Tax Consultant will certify that the Maximum Special Tax that may be levied in each Fiscal Year on the 267 Assessor’s Parcels with building permits issued as of March 3, 2026 will be at least equal to the sum of: (i) 110% of Annual Debt Service on the Bonds; plus (ii) the Administrative Expenses Cap. Actual collections of the Special Tax will depend on the amount of Special Tax delinquencies.
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 a ssessor’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 Improvement Area No. 1 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 Improvement Area No. 1.
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.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 35
Menifee Mayor and City Council
May 6, 2026
Page
361 of 714
17 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 Improvement Area No. 1, 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 Improvement Area No. 1 to an amount which is less than the Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such proposed reduction; and (ii) the District is not delinquent in the payment of the principal of or interest on the Bonds or any Parity Bonds.
Third, the District will covenant in the Indenture that, in the event that any initiative is adopted by the qualified electors within Improvement Area No. 1 which purports to reduce the maximum Special Tax below the levels specified in the preceding paragraph or to limit the power of the District to levy the Special Taxes for the purposes set forth in the Indenture, it will commence and pursue legal action in order to preserve its ability to comply with such covenants. The District can provide no assurance that any such legal action will be successful. See the caption “SPECIAL RISK FACTORS — Proposition 218.” Fourth, the District will covenant in the Indenture that it will not adopt any policy pursuant to the Act permitting the tender of Bonds or Parity Bonds in full payment or partial payment of any Special Taxes unless the District has first received a certificate from an Independent Financial Consultant that the acceptance of such a tender will not result in the District having insufficient Net Taxes to pay the principal of and interest on the Bonds and Parity Bonds when due.
See Appendix E under the caption “COVENANTS AND WARRANTY.” Although the Special Taxes constitute liens on taxed parcels within Improvement Area No. 1, they do not constitute a personal indebtedness of the owners of property within Improvement Area No. 1. Moreover, other liens for taxes and assessments already exist on the property located within Improvement Area No. 1 and others could come into existence in the future in certain situations without the consent or knowledge of the City or the landowners in Improvement Area No. 1. See the captions “ THE DISTRICT AND IMPROVEMENT AREA NO. 1 — 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 descr ibed under the caption “SPECIAL RISK FACTORS.”
Proceeds of Foreclosure Sales . The net proceeds received following a judicial foreclosure sale of property within Improvement Area No. 1 resulting from a property owner’s failure to pay the Special Taxes when due are included within the Net Taxes pledged to the payment of principal of and interest on the Bonds and any Parity Bonds under the Indenture.
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 parcels o wned by a single taxpayer whose properties in the aggregate have 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 (i 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 (iv) diligently pursue such Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 36
Menifee Mayor and City Council
May 6, 2026
Page
362 of 714
18 foreclosure proceedings until the delinquent Special Taxes are paid; provided that, notwithstanding the foregoing, the District may elect to defer foreclosure proceedings on any parcel so long as the amount in the Reserve Account is at least equal to the Reserve Requirement.
The District will covenant in the Indenture that it will deposit the net proceeds of any foreclosure in the Special Tax Fund and will apply such proceeds remaining after the payment of Administrative Expenses to make current payments of principal and interest on the Bonds and any Parity Bonds, to bring the amount on deposit in the Reserve Account up to the Reserve Requirement and to pay any delinquent installments of principal or interest due on the Bonds and any Parity Bonds. See APPENDIX E — “SUMMARY OF THE INDENTURE — COVENANTS AND WARRANTY — Covenants” herein.
If foreclosure is necessary and other funds (including amounts in the Reserve Account) have been exhausted, debt service payments on the Bonds could be delayed unless the foreclosure proceedings produce sufficient net foreclosure sale proceeds. Judicial foreclosure actions are subject to the normal delays associated with court cases and may be further slowed by bankruptcy actions, involvement by agencies of the federal government and other factors beyond the control of the City and the District. See the caption “SPECIAL RISK FACTORS — Enforcement Delays – Bankruptcy.” Moreover, no assurances can be given that the real property subject to foreclosure and sale at a judicial foreclosure sale will be sold or, if sold, that the net proceeds of such sale will be sufficient to pay any delinquent Special Tax installment. See the caption “ SPECIAL RISK FACTORS — Property Values. ” Although the Act authorizes the District to cause such an action to be commenced and diligently pursued to completion, the Act does not impose on the District or the City any obligation to purchase or acquire any lot or parcel of property sold at a foreclosure sale if there is no other purchaser at such sale. The Act provides that, in the case of a delinquency, the Special Tax will have the same lien priority as is provided for ad valorem taxes.
Collection of Special Taxes and Flow of Funds. The Special Taxes will be levied and collected by the Treasurer-Tax Collector of the County in the same manner and at the same time as ad valorem property taxes, although it is possible that the District could elect to provide handbills to property owners within Improvement Area No. 1 . 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 to the principal payment due on the Bonds and any Parity Bonds maturing on such September 1 and any principal payment due on a previous September 1 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds and any Parity Bonds as the same become due at maturity.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 37
Menifee Mayor and City Council
May 6, 2026
Page
363 of 714
19 Fourth: To the Redemption Account, the amount needed to make the balance in the Redemption Account one Business Day prior to each September 1 on which a Sinking Fund Payment is due equal to the Sinking Fund Payment due on any Outstanding Bonds and Parity Bonds on such September 1; provided, however, that, if amounts in the Special Tax Fund are inadequate to make the foregoing transfers, then any deficiency will be made up by an immediate transfer from the Reserve Account, if funded, pursuant to the Indentur e; and thereafter, to pay the principal and premium, if any, due in connection with an optional redemption of Bonds or Parity Bonds.
Fifth: To the Reserve Account of the Special Tax Fund to the extent necessary to replenish the Reserve Account to the Reserve Requirement.
Sixth: To the Administrative Expense Account of the Special Tax Fund the amount of any Administrative Expenses for the current Bond Year in excess of the Administrative Expenses Cap as directed by the City.
Seventh: To the Rebate Fund established by the Indenture to the extent directed by the City pursuant to the Indenture.
Eighth: To the Surplus Fund established by the Indenture such remaining amounts in the Special Tax Fund after making the foregoing transfers on September 1.
Reserve Account of the Special Tax Fund
In order to secure further the payment of principal of and interest on the Bonds, the District is required, upon delivery of the Bonds, to deposit in the Reserve Account and thereafter to maintain in the Reserve Account an amount equal to the Reserve Requi rement. The term “Reserve Requirement” is defined in the Indenture to mean, that amount as of any date of calculation, equal to the lesser of: (i) 10% of the initial principal amount of the Bonds and Parity Bonds, if any; (ii) Maximum Annual Debt Service on the then Outstanding Bonds and Parity Bonds, if any; (iii) 125% of average Annual Debt Service on the then 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 on the amount of property taxes levied rather than the amount actually collected, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code, the District is not included in the County Teeter Plan. Consequently, the District may not draw on the Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 38
Menifee Mayor and City Council
May 6, 2026
Page
364 of 714
20 County Tax Loss Reserve Fund in the event of delinquencies in Special Tax payments within Improvement Area No. 1.
Parity Bonds
The Indenture provides that, upon satisfaction of certain conditions, the District may issue Parity Bonds payable from the Net Taxes and other amounts deposited in the Special Tax Fund (other than in the Administrative Expenses Account therein) and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds theretofore issued; provided, however, Parity Bonds may only be issued: (i) for the purpose of refunding all or a portion of the Bonds or any Parity Bonds then Outstanding, or (ii) for other purposes of the District in a principal amount not to exceed $24,490,000
*. Among other conditions, in order to issue Parity Bonds for other than refunding purposes, the District shall have received a Certificate of the Special Tax Administrator certifying that (i) the maximum 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 four (4) times the sum of Direct Debt for District Property plus Overlapping Debt allocable to all property in Improvement Area No. 1 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.
Among other conditions, in order to issue Parity Bonds to refund all or a portion of the Bonds or any Parity Bonds, the District shall have received a Certificate of the Special Tax Administrator certifying that in each Bond Year the Annual Debt Service on the Bonds and Parity Bonds to remain Outstanding following the issuance of the Parity Bonds proposed to be issued is less than the Annual Debt Service on the Bonds and Parity Bonds Outstanding prior to the issuance of such Parity Bonds . See Appendix E un der the caption “DEFEASANCE AND PARITY BONDS.”
The District currently expects to issue Parity Bonds to finance additional Project Costs in 2027.
Lennar Letter of Credit
Lennar has provided an irrevocable letter of credit (the “Letter of Credit”) to secure payment of Special Taxes levied on the property in the District owned by it, which identifies the Trustee as beneficiary. The amount available to be drawn under the Letter of Credit (the “Stated Amount”) calculated by multiplying the Special Tax Requirement (as defined in the Rate and Method) for Fiscal Years 2026-27 and 2027-28, by the percentage of the Maximum Special Taxes for the current fiscal year allocable to the property owned by Lennar and the Lennar Landbank as of March 3, 2026 that is used to size the Bonds (i.e. 140 lots). The initial Stated Amount of the Letter of Credit shall be $887,000. The initial term of the Letter of Credit is one year from its date of issuance, and Lennar will maintain and cause the issuing bank to annually renew the Letter of Credit each year prior to the expiration date until the property then owned by Lennar and the Lennar Landbank is responsible for less than twenty percent (20%) of the Maximum Special Tax levy in Improvement Area No. 1. Notwithstanding the foregoing, the District may elect to waive the requirement for Lennar to maintain the Letter of Credit or may release the Letter of Credit at any time without the consent of the Owners or Beneficial Owners of the Bonds .
The Letter of Credit is not pledged to the repayment of debt service on the Bonds.
* Preliminary, subject to change.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 39
Menifee Mayor and City Council
May 6, 2026
Page
365 of 714
21 THE DISTRICT AND IMPROVEMENT AREA NO. 1
General Description of the District and Improvement Area No. 1 Improvement Area No. 1 is generally located east of I-215 along the south side of Rouse Road, north of McCall Boulevard at Sherman Road in the northern portion of the City of Menifee. The property in Improvement Area No. 1 is being developed by Lennar as a community named “Legado.
Improvement Area No. 1 includes approximately 149 gross acres planned for 491 single family detached homes. As of March 3, 2026, Lennar had completed and conveyed 127 homes within Improvement Area No. 1 to individual homeowners. As of such date, Lennar owned eight completed model homes and 66 homes under construction. The remaining 290 lots were owned by the Lennar Landbank , which is serving as Lennar’s landbank for the development of Improvement Area No. 1. Lennar has the option – but not the obligation – to acquire lots pursuant to a phased takedown schedule pursuant to an agreement with the Lennar Landbank, as described herein.
Other than the neighborhood parks described below, the major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within Improvement Area No. 1 has been completed. Lennar expects to complete the rema ining in-tract infrastructure within Improvement Area No. 1, which consists of landscaping, finishing of certain interior streets, and wet and dry utilities as construction of the related homes occurs.
Pursuant to the Development Agreement between the City and Lennar relating to the Legado project, the number of occupancy permits authorized to be issued for Legado is limited to 200 in the westside tract prior to the Westside Park being completed and 95 occupancy permits in the eastside tract prior to Eastside Park being completed. Westside Park is currently estimated to be completed in the fall of 2026 and Eastside Park by December 31, 2026. As of March 3, 2026, individuals own 127 homes in the west side tracts and no homes in the east side tracts within Improvement Area No. 1. Lennar currently does not expect the timing of completion of the parks to cause any delays in the issuance of occupancy permits in Improvement Area No. 1.
Water and sewer service to the property within Improvement Area No. 1 is currently supplied by the Eastern Municipal Water District. Electricity is currently supplied by Southern California Edison and gas by Southern California Gas Company. Public education instruction is provided by the Menifee Union School District and Perris Union High School District.
The property within Improvement Area No. 1 is not located in an Alquist-Priolo Earthquake Study Zone and is not located within one-half mile of an active earthquake fault. Additionally, the District is not located in a flood plain area. Small portions of the District are located in an area that the Department of Forestry and Fire Protection of the State of California (“CalFire”) has designated as a very high fire hazard severity zone or a high fire hazard severity zone (based on Fire Hazard Severity Zone (FHSZ) maps that CalFire released in 2025). The property in Improvement Area No. 1 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 Improvement Area No. 1 and an aerial photograph thereof appear following the Table of Contents.
Authorized Uses of Bond Proceeds
Proceeds of the Bonds are authorized to be used to pay for the costs of construction of City facilities, including certain storm drain and street improvements and the costs of certain water and sewer system improvements to be owned and operated by the Eastern Municipal Water District (collectively, the “Facilities”).
See the caption “FINANCING PLAN.”
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 40
Menifee Mayor and City Council
May 6, 2026
Page
366 of 714
22 Appraisal Report
The estimated assessed value of the property within Improvement Area No. 1, as shown on the County’s assessment roll for Fiscal Year 2025-26 is approximately $ 17,481,888, 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 Improvement Area No. 1, 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 Improvement Area No. 1 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 Improvement Area No. 1 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 Improvement Area No. 1 provided to the Appraiser by Lennar 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.
In addition, the Appraisal Report includes an extraordinary assumption that the two parks, Westside Park and Eastside Park along with the recreation center are completed in a timely manner and do not slow or thwart development, sale or closing of any homes within Improvement Area No. 1.
Subject to the assumptions and limiting conditions set forth in the Appraisal Report, the Appraiser concluded that, as of March 3, 2026, the market value of the Taxable Property within Improvement Area No. 1 was $ 134,237,747. In valuing the property within Improvement Area No. 1, the Appraiser used a sales comparison approach for the property to be developed and, with respect to the Lennar -owned models and production units more than 95% complete, a discounted cash flow analysis was applied. The discounted cash flow analysis accounts for remaining development costs, marketing and carrying costs and a discount rate through the estimated absorption period for such models and production units.
With respect to the individually owned homes, the Appraiser used a concluded base value for each plan and a mass appraisal technique was applied. In determining the concluded base value, new home sales in the area were reviewed and were compared with sales of the subject completed homes using standard methodology and statistical testing. In addition, resales, if any, were taken into consideration.
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 Improvement Area No. 1 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 t he landowner. See “SPECIAL RISK FACTORS — Property Values,” Appendix D — “APPRAISAL REPORT”.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 41
Menifee Mayor and City Council
May 6, 2026
Page
367 of 714
23 Estimated Appraised Value-to-Lien Ratios
The aggregate appraised value of property within Improvement Area No. 1 is $134,237,747. Dividing the aggregate estimate of value by the principal amount of the Bonds and currently outstanding overlapping general obligation and land-secured debt results in a value to lien ratio of 8.09-to-1* for Improvement Area No.
1. Other overlapping public agencies have authorized but unissued land- secured bonded indebtedness within Improvement Area No. 1. See Table 4 below and “SPECIAL RISK FACTORS — Direct and Overlapping Indebtedness.”
The assessed value of the property within Improvement Area No. 1 is $17,481,888 for Fiscal Year 2025- 26, 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.
Dividing the assessed value by the principal amount of the Bonds results in an estimated assessed value-to-lien ratio of 1.13-to-1* for Improvement Area No. 1.
Based on ownership status as of March 3, 2026, and assuming no further development activity, individual homeowners and Lennar, and the Lennar Landbank are expected to be responsible for approximately
47.43%, 27.56% and 25.02%, respectively, of the estimated Fiscal Year 2026-27 Special Tax levy.
Table 2 below sets forth the appraised value-to-lien ratio of the Taxable Property within Improvement Area No. 1 based on the appraised values set forth in the Appraisal Report, the principal amount of the Bonds and currently outstanding overlapping bonded indebtedness. Table 3 below sets forth the estimated appraised value-to-lien ratios for Developed Property within Improvement Area No. 1 by various ranges based upon the principal amount of the Bonds and currently outstanding overlapping bonded indebtedness.
Annual Debt Service on the Bonds has been sized based on the Special Tax revenues to be received in each Fiscal Year from the 267 parcels with building permits issued as of March 3, 2026, assuming that the Special Taxes are levied at 100% of the Assigned Special Tax on such property. The District does not expect to levy Special Taxes on Approved Property in Fiscal Year 2026-27.
[Remainder of Page Intentionally Left Blank]
* Preliminary, subject to change.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 42
Menifee Mayor and City Council
May 6, 2026
Page
368 of 714
24 TABLE 2
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
IMPROVEMENT AREA NO. 1
ESTIMATED VALUE-TO-LIEN RATIOS
FISCAL YEAR 2026-27 ESTIMATED LEVY ON TAXABLE PROPERTY
Property Owner(1)
No. of
Parcels
Appraised
Property
Value(2)
% of
Appraised
Value
Fiscal Year
2026-27
Maximum
Tax
Fiscal Year
2026-27
Percentage
of Maximum
Tax
Estimated
Fiscal Year
2026-27
Special Tax
Levy(3)
% of
Estimated
Fiscal Year
2026-27
Special tax
Levy
CFD 2022-3
Improvement
Area No. 1
Bonds(4)*
All other
Overlapping
Debt
Issued(5)
Appraised
Value-to-
Lien Ratio*
Developed Property
Individually Owned 127 $ 68,723,148 51.20% $ 481,944 26.66% $441,410 47.43% $ 7,355,690 $ 512,986 8.73:1 Lennar Owned(6) 74 19,748,119 14.71 273,773 15.14 256,472 27.56 4,273,866 298,060 4.32:1 Lennar Landbank Owned 66 10,415,820 7.76 243,644 13.48 232,863 25.02 $3,880,445 $270,622 2.51:1 Total Developed 267 $ 98,887,087 73.67% $ 999,361 55.28% $930,745 100.00% $15,510,000 $ 1,081,668 5.96:1
Approved Property
Lennar Landbank Owned (6) 224 $ 35,350,660 26.33% $ 808,527 44.72% $ 0 0.00% $ 0 $ 0 N/A Total Approved 224 $ 35,350,660 26.33% $ 808,527 44.72% $ 0 0.00% $ 0 $ 0 N/A
Total 491 $ 134,237,747 100.00% $1,807,889 100.00% $930,745 100.00% $ 15,510,000 $ 1,081,668 8.09:1
* Preliminary, subject to change.
(1) Property ownership status as of March 3, 2026.
(2) Based on the appraised value set forth in the Appraisal Report as of the March 3, 2026, the Date of Value. (3) Based on 100% of the Assigned Special Tax rate on Developed Property. Estimated Fiscal Year 2026-27 Special Tax Levy based upon development status as of March 3, 2026, and an Administrative Expense Cap for Fiscal Year 2026-27 of $30,600. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Rate and Method of Apportionment of Special Tax.” The District does not expect to levy the Special Tax on Approved Property in Fiscal Year 2026-27. (4) Allocated based on estimated Fiscal Year 2026-27 Special Tax levy. (5) Includes overlapping debt set forth in Table 4 below. (6) Lennar and the Lennar Landbank have entered into an agreement for Lennar to takedown lots within Improvement Area No. 1 in phases. See “ PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.
.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado Item Page Number: 43
Menifee Mayor and City Council
May 6, 2026
Page
369 of 714
25 TABLE 3
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
IMPROVEMENT AREA NO. 1
FISCAL YEAR 2026-27 PROJECTED VALUE-TO-LIEN STRATA FOR DEVELOPED PROPERTY AS OF MARCH 5, 2026* Value-to-Lien Category
No. of
Parcels of
Developed
Property
Percent of
Developed
Property
Appraised
Value(1)
Percent of
Appraised
Value
Estimated Fiscal
Year 2026-27
Levy
Percent
Share of
Estimated
Fiscal Year
2026-27
Special Tax
Levy
CFD 2022-3
Improvement
Area No. 1
Bonds(2)
Percent
Share of
CFD 2022-3
Improvement
Area No. 1
Bonds
All Other
Overlapping
Debt(3)
No. of
Parcels of
Taxable
Property
Less than 2.00:1(3) 6 2.25% $ 946,893 0.96% $ 31,261 3.36% $ 520,953 3.36% $ 36,330 1.70:1 Between 2.01:1 to 4.00:1 96 35.96 15,150,284 15.32 321,148 34.50 5,351,634 34.50 373,223 2.65:1 Between 4.01:1 to 6.00:1 31 11.61 11,342,057 11.47 113,102 12.15 1,884,735 12.15 131,441 5.63:1 Between 6.01:1 to 8.00:1 7 2.62 $2,724,705 2.76 23,824 2.56 397,007 2.56 27,687 6.42:1 Greater than 8.00:1(3) 127 47.57 68,723,148 69.50 441,410 47.43 7,355,690 47.43 512,986 8.73:1 Totals 267 100.00% $98,887,087 100.00% $ 930,745 100.00% $ 15,510,000 100.00% $ 1,081,668 5.96:1
* Preliminary, subject to change.
(1) Based on the appraised value set forth in the Appraisal Report as of March 3, 2026, the Date of Value. (2) Allocated based on the estimated Fiscal Year 2026-27 Special Tax levy and reflects 267 building permits issued as of March 3, 2026 and an Administrative Expenses Cap for Fiscal Year 2026-27 of $30,600.
(3) Includes overlapping debt set forth in Table 4 below. (4) The minimum value to lien in the less than 2.00:1 category is 1.70:1*. The maximum value to lien in the greater than 8.00:1 category is 9.11:1*.
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC. .
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado Item Page Number: 44
Menifee Mayor and City Council
May 6, 2026
Page
370 of 714
26 Direct and Overlapping Debt
Improvement Area No. 1 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 inde btedness payable from taxes and assessments that may be levied upon the property within Improvement Area No. 1 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 Improvement Area No. 1; and such districts or the agencies that formed them could issue more bonds and levy additional special taxes or assessments.
[Remainder of Page Intentionally Left Blank]
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 45
Menifee Mayor and City Council
May 6, 2026
Page
371 of 714
27 TABLE 4
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
IMPROVEMENT AREA NO. 1
DIRECT AND OVERLAPPING DEBT
AS OF MARCH 5, 2026
I. Appraisal Value(1) $ 134,237,747
II. Land Secured Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable
Parcels in
CFD No.
2022-3 IA 1(2)
Amount
Applicable
City of Menifee CFD No. 2022-3 IA 1, Series 2026A CFD $ 15,510,000 $ 15,510,000 100.000% 491 $ 15,510,000* Menifee Union School District CFD 2022-1 CFD 0 0 100.000 491 0 Perris Union High School District CFD 92-1 CFD 36,315,000 27,910,000 2.606 491 727,362 Total Land Secured Bonded Debt $ 16,237,362*
Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable
Parcels in
CFD No.
2022-3 IA 1(2)
Amount
Applicable
City of Menifee CFD No. 2022-3 IA 1, Series 2026(3) CFD $ 40,000,000 $ 24,490,000 100.000% 491 $ 24,490,000* Menifee Union School District CFD 2022-1 CFD 7,205,000 7,205,000 100.000 491 7,205,000 Perris Union High School District CFD 92-1 CFD 40,000,000 3,685,000 2.606 491 96,035 Total Unissued Land Secured Indebtedness $ 31,791,035*
TOTAL OUTSTANDING AND UNISSUED LAND SECURED INDEBTEDNESS $ 48,028,397
III. General Obligation Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable
Parcels in
CFD No.
2022-3 IA 1(2)
Amount
Applicable
Metropolitan Water Debt Service GO $850,000,000 $ 17,155,000 0.013% 491 $ 2,306 Mt. San Jacinto Jr. College Debt Service GO 295,000,000 233,100,000 0.012 491 27,996 Menifee Union High School Debt Service GO 180,955,495 179,566,292 0.093 491 167,449 Perris Union High School Debt Service GO 363,415,283 276,899,802 0.057 491 156,555 Total Outstanding General Obligation Bonded Debt $ 354,306
Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable
Parcels in
CFD No.
2022-3 IA 1(2)
Amount
Applicable
Metropolitan Water Debt Service GO $850,000,000 $ 0 0.013% 491 $ 0 Mt. San Jacinto Jr. College Debt Service GO 295,000,000 0 0.012 491 0 Menifee Union High School Debt Service GO 180,960,000 4,506 0.093 491 4 Perris Union High School Debt Service GO 363,420,000 4,717 0.057 491 3 Total Unissued General Obligation Indebtedness $ 7
TOTAL OUTSTANDING AND UNISSUED GENERAL OBLIGATION INDEBTEDNESS $ 354,313
TOTAL OF ALL OUTSTANDING DIRECT AND OVERLAPPING BONDED DEBT $ 16,591,668* TOTAL OF ALL OUTSTANDING DIRECT AND UNISSUED DIRECT OVERLAPPING INDEBTEDNESS $ 48,382,710*
IV. Ratios to Appraisal Value
Outstanding Land Secured Bonded Debt ............... 8.27:1* Total Outstanding Bonded Debt ............................. 8.09:1*
* Preliminary, subject to change.
(1) Based on the Appraisal Report as of March 3, 2026, Date of Value. (2) All parcels have subdivided into 491 individual parcels. Based on development status as of March 3, 2026, 267 parcels will be classified as Developed Property under the Rate and Method in Fiscal Year 2026-27. (3) The District currently expects to issue Parity Bonds in 2027.
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.
Table 5 below describes the estimated Fiscal Year 2025-26 effective tax burden for the property in Improvement Area No. 1 based on the average prices of closed homes provided by Lennar, the Fiscal Year 2025- 26 Special Tax levy and Fiscal Year 2025-26 levies for all other overlapping taxing jurisdictions. Based on the foregoing and the Administrative Expenses Cap of $30,600 (which amount shall escalate at 2% per Fiscal Year), Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 46
Menifee Mayor and City Council
May 6, 2026
Page
372 of 714
28 in Fiscal Year 2025-26, the projected effective tax rates to be levied on Developed Property in Improvement Area No. 1 ranges from approximately 1.92% to 1.98%.
[Remainder of Page Intentionally Left Blank]
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 47
Menifee Mayor and City Council
May 6, 2026
Page
373 of 714
29 TABLE 5
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
IMPROVEMENT AREA NO. 1
ESTIMATED FISCAL YEAR 2025-26 TAX OBLIGATION(1)
Neighborhood Sonrisa Tesoro Armonia Belleza
Tax Zone Zone 1 Zone 3 Zone 2 Zone 3
CFD Tax Category Less than 1,600 to 1,801 to Greater than Less than 1,901 to 1,901 to 2,101 to 1,901 to 2,101 to 2,301 to Greater than 2,501 to 2,701 to 2,901 to Greater than 1,600 SF 1,800 SF 2,000 SF 2,000 SF 1,900 SF 2,100 SF 2,100 SF 2,300 SF 2,100 SF 2,300 SF 2,500 SF 2,500 SF 2,700 SF 2,900 SF 3,100 SF 3,500 SF Plan 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Home Size SqFt 1,539 1,696 1,862 2,069 1,539 1,936 2,084 2,231 1,936 2,200 2,468 2,589 2,662 2,760 3,010 4,184
Average Home Value (2) $ 566,360 $ 579,189 $ 600,387 $ 612,039 $ 580,740 $ 630,322 $ 646,433 $ 647,149 $ 620,813 $ 648,863 $ 672,443 $ 678,951 $ 703,260 $ 707,849 $ 748,674 $ 881,963
Ad Valorem Property Taxes:
General Purpose $ 5,664 $5,792 $ 6,004 $ 6,120 $ 5,807 $ 6,303 $ 6,464 $ 6,471 $ 6,208 $ 6,489 $ 6,724 $ 6,790 $ 7,033 $ 7,078 $ 7,487 $ 8,820 Metro Water West (0.00700%) 40 41 42 43 41 44 45 45 43 45 47 48 49 50 52 62 Mt. San Jacinto Jr College (0.00254%) 14 15 15 16 15 16 16 16 16 16 17 17 18 18 19 22 Menifee Union High School (0.07500%) 425 434 450 459 436 473 485 485 466 487 504 509 527 531 562 661 Perris Union High School (0.04712%) 267 273 283 288 274 297 305 305 293 306 317 320 331 334 353 416 Total General Property Taxes $ 6,409 $ 6,554 $ 6,794 $ 6,926 $ 6,572 $ 7,133 $ 7,315 $ 7,324 $ 7,025 $ 7,343 $ 7,610 $ 7,683 $ 7,959 $ 8,010 $ 8,472 $ 9,981
Assessment, Special Taxes & Parcel Charges:
Flood Control Stormwater / Cleanwater / Santa Ana $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 MWD Standby East charge 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 EMWD Infrastructure Availability Charge 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 Perris Union High School District CFD 92-1 343 343 343 343 343 343 343 343 343 343 343 343 343 343 343 343 Menifee Union School District CFD 2022-1 347 383 420 467 347 437 437 503 437 496 557 584 601 623 679 944 City of Menifee CFD 2017-1, Zone 12 Maint Services 1,076 1,076 1,076 1,076 1,076 1,076 1,076 1,076 1,076 1,076 1,076 1,076 1,076 1,076 1,076 1,076 City of Menifee CFD 2022-3 IA 1 (Legado)(3) 2,975 2,984 3,069 3,163 3,019 3,201 3,201 3,345 3,201 3,264 3,397 3,457 3,781 3,907 4,009 5,108 Total Assessments & Special Taxes $ 4,763 $ 4,807 $ 4,930 $ 5,071 $ 4,807 $ 5,079 $ 5,079 $ 5,289 $ 5,079 $ 5,201 $ 5,395 $ 5,482 $ 5,822 $ 5,970 $ 6,129 $ 7,493
Projected Total Property Tax $ 11,172 $ 11,362 $ 11,724 $ 11,997 $ 11,379 $ 12,212 $ 12,394 $ 12,613 $ 12,104 $ 12,544 $ 13,004 $ 13,165 $ 13,781 $ 13,981 $ 14,601 $ 17,474 Projected Effective Tax Rate 1.97% 1.96% 1.95% 1.96% 1.96% 1.94% 1.92% 1.95% 1.95% 1.93% 1.93% 1.94% 1.96% 1.98% 1.95% 1.98%
(1) Average Fiscal Year 2025 -26 tax rates based upon Fiscal Year 2025 -26 Overlapping Taxes and Assessment Rates reflects the based on the projected assessed value reflecting the average home purchase price as provided by Developer.
(2) Reflects the Average Home Price for closed homes as of March 3, 2026, as provided by the Developer. (3) Reflects the District’s Estimated Fiscal Year 2025-26 Special Tax levy for Developed Property (at the Assigned Special Tax rates) and includes priority Administrative Expenses in the amount of $30,000.
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado Item Page Number: 48
Menifee Mayor and City Council
May 6, 2026
Page
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30 Delinquency History
Table 6 summarizes the Special Tax delinquencies for property within the boundaries of Improvement Area No. 1 for the first installment of Fiscal Year 2025-26, which was the first year of the Special Tax levy .
Future delinquencies could increase as a result of factors such as changes in the local or national economy, increases in the mortgage rates and/or increases in the unemployment rate in the area. See “ SPECIAL RISK FACTORS — Special Tax Delinquencies.”
TABLE 6
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
IMPROVEMENT AREA NO. 1
SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES FISCAL YEAR 2025-26
Delinquencies as of February 25, 2026
Fiscal
Year
Amount
Levied
Parcels
Levied
Parcels
Delinquent
Amount
Delinquent
Percent
Delinquent
2025-26(1) $354,099 102 0 $0 0.00%
(1) Includes first installment for Fiscal Year 2025-26 as of February 25, 2026.
Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.
PROPERTY OWNERSHIP AND THE DEVELOPMENT
The information about the property in Improvement Area No. 1 under this caption has been provided by representatives of Lennar and has not been independently confirmed or verified by the Underwriter, the City or the District. The Underwriter, the City, an d the District make no representation as to the accuracy or adequacy of the information contained in this caption. There may be material adverse changes in this information after the date of this Official Statement. Neither the Bonds nor the Net Taxes se curing the Bonds and any Parity Bonds are personal obligations of Lennar or any affiliate thereof, the Lennar Landbank, 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 Lennar or any affiliate thereof, the Lennar Landbank, or any property owner or any affiliate thereof. See the caption “SPECIAL RISK FACTORS.”
Notwithstanding the belief of Lennar that it will have sufficient funds to complete its planned development in Improvement Area No. 1, no assurance can be given that amounts necessary to fund the remaining planned development by Lennar in Improvement Area No. 1 will be available when needed. None of Lennar, the Lennar Landbank, or any other entity or person, is under any legal obligation of any kind to expend funds for the development of the property as planned by Lennar in Improvement Area No. 1. Any contributions by Lennar or any other entity or person to fund the costs of its development are entirely voluntary. If and to the extent the aforementioned sources are inadequate to pay the costs to complete the planned development by Lennar within Improvement Area No. 1, the remaining portions of such development may not be completed.
Lennar 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
Improvement Area No. 1 is generally located east of I-215 along the south side of Rouse Road, north of McCall Boulevard at Sherman Road in the northern portion of the City of Menifee. The property in Improvement Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 49
Menifee Mayor and City Council
May 6, 2026
Page
375 of 714
31 Area No. 1 is being developed by Lennar Homes of California, LLC, a California limited liability company (previously defined as “Lennar”) as a community named “Legado.” Improvement Area No. 1 includes approximately 149 gross acres planned for 491 single family detached homes. As of March 3, 2026, Lennar had completed and conveyed 127 homes within Improvement Area No. 1 to individual homeowners. As of such date, Lennar owned eight completed model homes and 66 homes under construction. The remaining 290 lots were owned by the Lennar Landbank , which is serving as Lennar’s landbank for the development of Improvement Area No. 1. Lennar has the option – but not the obligation – to acquire lots pursuant to a phased takedown schedule pursuant to an agreement with the Lennar Landbank, as described herein.
Final tract maps have been recorded for all 491 planned homes within Improvement Area No. 1. As of March 3, 2026, all lots in Improvement Area No. 1 owned by Lennar and the Lennar Landbank were in a finished condition.
Other than the neighborhood parks described below, the major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within Improvement Area No. 1 has been completed. Lennar expects to complete the rema ining in-tract infrastructure within Improvement Area No. 1, which consists of landscaping, finishing of certain interior streets, and wet and dry utilities as construction of the related homes occurs.
Pursuant to the Development Agreement between the City and Lennar, the number of occupancy permits authorized to be issued for Legado is limited to 200 in the westside tract prior to the Westside Park being completed and 95 occupancy permits in the eastside tract prior to Eastside Park being completed. Westside Park is currently estimated to be completed in the fall of 2026 and Eastside Park by December 31, 2026. As of March 3, 2026, individuals own 127 homes in the west side tracts and no homes in the east side tracts within Improvement Area No. 1. Lennar currently does not expect the timing of completion of the parks to cause any delays in the issuance of occupancy permits in Improvement Area No. 1.
Planned Development Within Improvement Area No. 1
The property within Improvement Area No. 1 is planned for 491 residential units within four product lines/neighborhoods – Sonrisa at Legado, Tesoro at Legado, Armonia at Legado and Belleza at Legado. The following tables summarize the status of development within the four neighborhoods planned within Improvement Area No. 1 as of March 3, 2026.
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
IMPROVEMENT AREA NO. 1
SONRISA AT LEGADO
(As of March 3, 2026)
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
March 3, 2026
Completed
Homes/Homes
Under
Construction(1)
Finished
Lots
Base Home
Prices(2)
1 42 1,539 9 8 25 $542,220
2 35 1,696 10 6 19 546,470
3 41 1,862 10 7 24 566,720
4 44 2,069 9 8 27 576,970
162 38 29 95
(1) Includes three model homes, 4 completed production homes, and 22 homes under construction.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 50
Menifee Mayor and City Council
May 6, 2026
Page
376 of 714
32 (2) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions. Base sales prices are subject to change.
Source: Lennar.
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
IMPROVEMENT AREA NO. 1
TESORO AT LEGADO
(As of March 3, 2026)
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
March 3, 2026
Completed
Homes/Homes
Under
Construction(1)
Finished
Lots
Base Home
Prices(2)
1 18 1,539 8 6 4 $541,295
2 22 1,936 7 6 9 580,335
3 28 2,084 6 7 15 590,585
4 31 2,231 7 9 15 613,420
99 28 28 43
(1) Includes one model home, 5 completed production homes, and 22 homes under construction. (2) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions. Base sales prices are subject to change.
Source: Lennar.
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
IMPROVEMENT AREA NO. 1
ARMONIA AT LEGADO
(As of March 3, 2026)
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
March 3, 2026
Completed
Homes/Homes
Under
Construction(1)
Finished
Lots
Base Home
Prices(2)
1 32 1,936 9 7 16 $579,470
2 28 2,200 7 6 15 597,970
3 29 2,468 8 5 16 629,700
4 30 2,589 8 9 13 637,450
119 32 27 60
(1) Includes two model homes, 12 completed production homes, and 13 homes under construction. (2) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions. Base sales prices are subject to change.
Source: Lennar.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 51
Menifee Mayor and City Council
May 6, 2026
Page
377 of 714
33 COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
IMPROVEMENT AREA NO. 1
BELLEZA AT LEGADO
(As of March 3, 2026)
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
March 3, 2026
Completed
Homes/Homes
Under
Construction(1)
Finished
Lots
Base Home
Prices(2)
1 24 2,662 8 6 10 $663,112
2 28 2,760 8 8 12 675,065
3 28 3,010 6 8 14 695,795
4 31 4,184 7 9 15 830,005
111 29 31 51
(1) Includes two model homes, 9 completed production homes, and 20 homes under construction. (2) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions. Base sales prices are subject to change.
Source: Lennar.
No assurance can be given that home construction and sales will be carried out on the schedule and according to the plans outlined herein, or that the home construction and sale plans or base prices set forth above will not change after the date of this Official Statement. Additionally, homes sold may not result in closed escrows as sales contracts are subject to cancellation. In changing market conditions, builders will often revise the product lines and prices and the rate of sales can fluctuate. Lennar continuously evaluates its product lines and prices in light of the then current market conditions. See “SPECIAL RISK FACTORS ” herein for a discussion of risk factors.
Landbank Arrangement. Lennar is acquiring the property within Improvement Area No. 1 in phased takedowns from the Lennar Landbank under an Option Agreement dated March 27, 2024 (the “ Option Agreement”) pursuant to which Lennar has the option, but not the obligation, to purchase lots from the Lennar Landbank. Lennar originally purchased all of the property in Improvement Area No. 1, and subsequently conveyed such property to the Lennar Landbank.
In addition to the Option Agreement, Lennar Communities, Inc. (the “ Contractor”), Lennar and the Lennar Landbank entered into a Construction Agreement dated March 27, 2024 (the “Construction Agreement”) granting Contractor the right to enter upon the land in Improvement Area No. 1, for the purpose of, among other things, constructing model homes and related subdivision improvements thereon before Lennar acquires the land subject to the Option Agreement from the Lennar Landbank. Pursuant to the Option Agreement, Lennar has the right to enter upon the land subject to the Option Agreement for the purpose of constructing production homes thereon before Lennar acquires the subject land.
Under the terms of the Option Agreement, the Lennar Landbank granted Lennar the exclusive right and option to purchase all 491 residential lots within Improvement Area No. 1 in consideration for (a) the covenants of Lennar to timely pay monthly option payments; and (b) upon exercise of the option, the payment of the purchase price for each set of lots acquired.
As of the date of this Official Statement, Lennar is in good standing under both the Option Agreement and the Construction Agreement. As of March 3, 2026, Lennar has acquired a total of 201 residential lots under the Option Agreement. The remaining 290 residential lots are scheduled to be acquired by Lennar pursuant to the takedown schedule, typically on the fifth (5 th) business day of each month through March
2028, subject to extension rights as provided in the Option Agreement and further subject to Lennar’s right to acquire more lots than scheduled and at earlier times so long as the lots identified in the takedown schedule Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 52
Menifee Mayor and City Council
May 6, 2026
Page
378 of 714
34 are acquired by the applicable takedown date and Lennar complies with the terms under the Option Agreement for such accelerated closings. The failure to timely acquire lots could result in a termination of the Option Agreement which could result in Lennar no longer having a right to purchase any of the remaining lots under the Option Agreement. No assurance can be given that the acquisition of the remaining residential lots Lennar plans to acquire under the Option Agreement will occur as expected.
As of March 3, 2026, Lennar has acquired the following number of lots from the Lennar Landbank:
Acquisition Date
Total Lot
Takedown Per
Acquisition Date Status
March 5, 2025 8 Complete
April 5, 2025 8 Complete
April 7, 2025 27 Complete
May 5, 2025 8 Complete
May 7, 2025 19 Complete
June 6, 2025 8 Complete
July 8, 2025 32 Complete
September 5, 2025 14 Complete
October 5, 2025 8 Complete
November 7, 2025 8 Complete
December 7, 2025 25 Complete
January 15, 2026 16 Complete
February 10, 2026 20 Complete
March 7, 2026 8 Remaining
March 10, 2026 17 Remaining
April 10, 2026 16 Remaining
May 10, 2026 27 Remaining
June 10, 2026 10 Remaining
July 10, 2026 24 Remaining
August 10, 2026 8 Remaining
September 10, 2026 15 Remaining
October 10, 2026 8 Remaining
November 10, 2026 33 Remaining
December 10, 2026 7 Remaining
January 10, 2027 16 Remaining
February 10, 2027 9 Remaining
March 10, 2027 17 Remaining
April 5, 2027 11 Remaining
April 10, 2027 18 Remaining
May 10, 2027 8 Remaining
July 10, 2027 8 Remaining
September 10, 2027 8 Remaining
November 10, 2027 8 Remaining
January 10, 2028 8 Remaining
March 10, 2028 6 Remaining
Total 491
Source: Lennar.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 53
Menifee Mayor and City Council
May 6, 2026
Page
379 of 714
35 During the term of the Option Agreement and the Construction Agreement, Lennar is obligated to pay all taxes (including the Special Taxes) on the property subject to the Option Agreement in Improvement Area No. 1.
Lennar
General. Lennar is based in Irvine, California, and has been in the business of developing residential real estate communities in California since 1996. Lennar is wholly -owned by U.S. Home, LLC, a Delaware limited liability company (“U.S. Home”). U.S. Home is wholly-owned by Lennar Corporation, which is based in Miami, Florida ( “Lennar Corporation”). Founded in 1954, Lennar Corporation completed its initial public offering in 1971 and listed its common stock on the New York Stock Exchange in 1972. Lennar Corporation’s Class A and Class B common stock are listed on the New York Stock Exchange under the symbols “LEN” and “LEN.B.” respectively. Lennar Corporation is one of the largest homebuilders in the United States based on home sales revenues and net earnings, and operates under a number of brand names, including Lennar and U.S.
Home. Lennar Corporation primarily develops residential communities both within the Lennar Corporation family of builders and through consolidated and unconsolidated partnerships in which Len nar Corporation maintains an interest.
Lennar Corporation is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and, in accordance therewith, files reports, proxy statements, and other information, including financial statements, with the Securities an d Exchange Commission (the “ SEC”). Such filings, particularly Lennar Corporation’s annual report on Form 10- K and its most recent quarterly report on Form 10- Q, may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fif th Street, N.W., Washington, D.C. 20549 at prescribed rates. Such filings can also be accessed over the internet at the SEC’s website at www.sec.gov.
Copies of Lennar Corporation’s Annual Report on Form 10- K and related financial statements are available from Lennar Corporation’s website at www.lennar.com. The foregoing website addresses and references to filings with the SEC are given for reference and convenience only, and the information on such websites and on file with the SEC does not form a part of this Official Statement and is not incorporated by reference herein. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on such websites. Lennar is 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, Lennar has financed its land acquisition and various site development costs related to its property in Improvement Area No. 1 through internally generated funds. As of March 15, 2026, Lennar has expended approximately $___._ million on land acqui sition and development and homebuilding costs in Improvement Area No. 1. Lennar expects to incur approximately $__._ million on remaining land development, homebuilding, marketing, and sales costs for its project in Improvement Area No. 1. Lennar is using home sales revenues and internal funding to complete its development within Improvement Area No. 1, and believes that it will have sufficient funds available to complete its planned development as described in this Official Statement.
Although Lennar expects to have sufficient funds available to complete its development in Improvement Area No. 1 as described in this Official Statement, there can be no assurance that amounts necessary to finance the development costs will be available from Lennar, or any other source when needed. Neither Lennar nor any of its subsidiaries or related entities are under any legal obligation of any kind to expend funds for the development of and construction of homes on its property in Improvement Area No. 1. Any contributions by Lennar to fund the costs of such development are entirely voluntary.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 54
Menifee Mayor and City Council
May 6, 2026
Page
380 of 714
36 If and to the extent that internal funding, including but not limited to home sales revenues, are inadequate to pay the costs to complete the planned development by Lennar within Improvement Area No. 1 and other financing is not put into place, there coul d be a shortfall in the funds required to complete the planned development by Lennar in Improvement Area No. 1.
Except the completion of the neighborhood parks 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, a representative of Lennar represented in a certificate delivered to the Underwriter that he 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 Improvement Area No. 1 as described in the Official Statement.
Although the information in this Official Statement reflects the current development expectations of Lennar, 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 thi s Official Statement. Lennar reserves the right to change its development at any time without notice. Additionally, homes under contract to be sold may not result in closed escrows as sales contracts are subject to cancellation. See “ SPECIAL RISK FACTORS – Concentration of Property Ownership.”
Lennar Land Bank . The Lennar Landbank is an affiliate of, and managed by, Kennedy Lewis Investment Management. ( “Kennedy Lewis”). Kennedy Lewis is a credit focused alternative asset manager founded in 2017 and headquartered in New York, with associated offices in Miami, Phoenix and Geneva, Switzerland. Kennedy Lewis manages approximately $16 billion across a broad range of credit and real estate strategies. Kennedy Lewis is not an affiliated entity of Lennar.
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 Improvement Area No. 1 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 Improvement Area No. 1. 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 Improvement Area No. 1, 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 result in uninsured losses; (iv) adverse changes in local market conditions; and (v) increased delinquencies due to rising mortgage costs and other factors.
No assurance can be given that the property owners within Improvement Area No. 1 will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See the caption “ — Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 55
Menifee Mayor and City Council
May 6, 2026
Page
381 of 714
37 Enforcement Delays — Bankruptcy” for a discussion of certain limitations on the District’s ability to pursue judicial proceedings with respect to delinquent parcels.
Insufficiency of Special Tax Revenues
As discussed below, the Special Taxes may not produce revenues sufficient to pay the debt service on the Bonds due to nonpayment of the amounts levied.
In order to pay debt service on the Bonds, it is generally necessary that the Special Taxes be paid in a timely manner. Should the Special Taxes not be paid on time, the District has established a Reserve Account under the Indenture to be maintained in an amount equal to the Reserve Requirement to pay debt service on the Bonds to the extent other funds are not available. See “ SOURCES OF PAYMENT FOR THE BONDS — Reserve Account of the Special Tax Fund.” The District will covenant in the Indenture to maintain in the Reserve Account an amount equal to the Reserve Requirement, subject, however, to the availability of Net Taxes in amounts sufficient to do so and to the limitation that the District may not levy the Special Tax in any Fiscal Year at a rate in excess of the maximum amounts permitted unde r the Rate and Method. See Appendix A and Appendix E hereto. As a result, if a significant number of Special Tax delinquencies occurs within Improvement Area No. 1, 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 Improvement Area No. 1 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 additi on, 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 t hat 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 Improvement Area No. 1 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 Improvement Area No. 1. This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon their willingness and/or ability to pay the Special Tax. Moreover, if a substantial portion of additional land within Improvement Area No. 1 became exempt from the Special Tax because of public ownership, or otherwise, the Maximum Special Tax which could be levied upon the remaining acreage might not be sufficient to pay principal of and interest on the 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 Improvement Area No. 1, subject to limitations described above under the caption “THE DISTRICT AND IMPROVEMENT AREA NO. 1 — Rate and Method of Apportionment,” to provide an amount required to pay interest on and principal of the Bonds, and the amount, Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 56
Menifee Mayor and City Council
May 6, 2026
Page
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38 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 Improvement Area No. 1 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.)
Increasing Mortgage Interest Rates
Increases in mortgage interest rates could have a negative impact on the estimated absorption rates of the planned for-sale residential units in Improvement Area No. 1 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 m aking 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 Improvement Area No. 1 as described herein.
Impact of Economic Conditions on the Development in Improvement Area No. 1 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 Improvement Area No. 1 can complete the remaining infrastructure and future homes, and demand by, and the ability of individuals to purchase homes within Improvement Area No. 1. 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 Improvement Area No. 1 and the real estate market in general cannot be predicted.
Concentration of Ownership
Based on development and ownership status as of March 3, 2026 (and assuming none of the homes in escrow close to individual homeowners), individual homeowners, Lennar and the Lennar Landbank are expected Item Title: 12.1
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39 to be responsible for approximately 47.3%, 27.6% and 25%, respectively, of the estimated Fiscal Year 2026-27 Special Tax levy. During the term of the Option Agreement and the Construction Agreement, Lennar is obligated to pay the Special Taxes on the property subject to the Option Agreement in Improvement Area No. 1.
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 Improvement Area No. 1 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 pay such Special Taxes even if financially able to do so. Due to the concentration of ownership of the property within Improvement Area No. 1, a failure by Lennar 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 Insurance
In recent years, homeowners in many areas in the State have experienced significant increases in premiums for property and homeowners’ insurance policies as well as difficulty in obtaining such insurance from commercial insurance companies. The increases have been driven by, among other factors, the risk of wildfire damage to property in the State. Such increases in the overall cost of homeownership could have a material adverse effect on the rate of absorption of the remaining units in Improvement Area N o 1 and on a homeowner’s willingness and/or ability to pay the Special Taxes.
In addition, no assurances can be made that adequate homeowners’ insurance coverage will be available in the future from reputable insurance companies, with premiums comparable to historical rates, or at all. The inability to obtain adequate insurance co verage could impact the ability of the homeowners in Improvement Area No 1 to reconstruct their homes in the event of damage.
Property Values
The value of the property within Improvement Area No. 1 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 AND IMPROVEMENT AREA NO. 1 — 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 Improvement Area No. 1 was approximately $ 134,237,747. See “THE DISTRICT AND IMPROVEMENT AREA NO. 1 — Appraisal.” 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 Improvement Area No. 1 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 Improvement Area No. 1, 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-1 for a description of other assumptions made by the Appraiser and for the definitions and limiting conditions used by the Appraiser. Any Item Title: 12.1
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40 event which causes one of the Appraiser’s assumptions to be untrue could result in a reduction of the value of the taxable land and improvements within Improvement Area No. 1 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
Improvement Area No. 1, like all California communities, may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. Southern California is a seismically active area. Seismic activity represents a potential risk for damage to buildings, roads, bridges and property within Improvement Area No. 1.
In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event. The property within Improvement Area No. 1 is not located in an Alquist-Priolo Earthquake Study Zone and is not located within one-half mile of an active earthquake fault. Additionally, Improvement Area No. 1 is in Flood Hazard Zone X, which is an area of 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.
Portions of the District are located in an area which CalFire has designated as a very high fire hazard severity zone, high fire hazard severity zone and moderate fire hazard severity zone while the major portion of the site is not located within a designated fire zone. There is a risk of property within Improvement Area No. 1 being destroyed by wildfires and no assurance can be given as to the severity or frequency of wildfires within the vicinity of Improvement Area No. 1. Additionally, property located adjacent to burn areas can be subject to mudslides and flooding, which can cause significant damage and destruction to property.
In the event of a severe earthquake, fire, flood or other natural disaster, there may be significant damage to both property and infrastructure in Improvement Area No. 1. 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 Improvement Area No. 1 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 parcels within Improvement Area No. 1 be affected by a hazardous substance, is to reduce the marketability and value by the costs of remedying the condition.
Item Title: 12.1
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41 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 Improvement Area No. 1. 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 Improvement Area No. 1 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 hazardou s substance but from the method of handling such substance. All of these possibilities could have the effect of reducing the value of the applicable property.
Enforcement Delays – Bankruptcy
In the event of a delinquency in the payment of the Special Taxes, the District is required to commence enforcement proceedings under the circumstances described under the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.” However, prosecution of such proceedings could be delayed due to crowded local court calendars or by bankruptcy, insolvency and other laws generally affecting creditors’ rights (such as the Soldiers’ and Sailors’ Relief Act of 1940) and by the law s of the State relating to judicial and non-judicial foreclosure. Although bankruptcy proceedings would not cause the liens of the Special Taxes to become extinguished, bankruptcy of a person or entity with an interest in the applicable property could result in a delay in the enforcement proceedings because federal bankruptcy laws provide for an automatic stay of foreclosure and tax sale proceedings. Any such delay could increase the likelihood of delay or default in payment of the principal of and interest on the applicable Bonds. The various legal opinions to be delivered in connection with the issuance of the Bonds, including Bond Counsel’s approving legal opinion, are qualified as to the enforceability of the Bonds and the Indenture by reference to ba nkruptcy, reorganization, moratorium, insolvency and other laws affecting the rights of creditors generally or against public entities such as the District.
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 Improvement Area No. 1 on the regular ad valorem property tax bills sent to owners 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 D istrict’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 Item Title: 12.1
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42 (the “Policy Statement”) provides that taxes other than ad valorem taxes which are secured by a valid lien in effect before the FDIC acquired an interest in a property will be paid unless the FDIC determines that abandonment of its interests is appropriate. The Policy Statement provides that the FDIC generally will not pay installments of non-ad valorem taxes which are levied after the time the FDIC acquires its fee interest, nor will the FDIC recognize the validity of any lien to secure payment except in certain cases where the Resolution Trust Corporation had an intere st in property on or prior to December 31, 1995. Moreover, the Policy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, the FDIC will not permit its lien to be foreclosed out by a taxing authority without its specific consent, nor will the FDIC pay or recognize liens for any penalties, fines or similar claims imposed for the nonpayment of taxes.
The FDIC has taken a position similar to that expressed in the Policy Statement in legal proceedings brought against Orange County in United States Bankruptcy Court and in Federal District Court. The Bankruptcy Court issued a ruling in favor of the FDIC on certain of such claims. Orange County appealed that ruling, and the FDIC cross-appealed. On August 28, 2001, the Ninth Circuit Court of Appeals issued a ruling favorable to the FDIC except with respect to the payment of pre -receivership liens based upo n delinquent property tax.
The District is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency with respect to parcels in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed out at a judicial foreclosure sale would prevent or delay the foreclosure sale.
In the case of Fannie Mae and Freddie Mac, in the event a parcel of taxable property is owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, or a private deed of trust secured by a parcel of taxable property is owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, the ability to foreclose on the parcel or to collect delinquent Special Taxes may be limited. Federal courts have held that, based on the supremacy clause of the United States Constitution “this Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shal l 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 Improvement Area No. 1 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 Improvement Area No. 1 to pay the applicable Special Taxes could be affected by the existence of other taxes and assessments imposed upon taxable parcels. See “ THE Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
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43 DISTRICT AND IMPROVEMENT AREA NO. 1 — Direct and Overlapping Debt” herein. The City and other public agencies whose boundaries overlap those of Improvement Area No. 1 could impose additional taxes or assessment liens on the property within Improvement Area No. 1 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 Improvement Area No. 1 through the levy of such additional taxes may be on a parity with the lien of the Special Taxes applicable to the property within Improvement Area No. 1.
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 Indenture provides that, upon satisfaction of certain conditions, the District may issue Parity Bonds payable from the Net Taxes and other amounts deposited in the Special Tax Fund (other than in the Administrative Expenses Account therein) and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds theretofore issued; provided, however, Parity Bonds may only be issued: (i) for the purpose of refunding all or a portion of the Bonds or any Parity Bonds then Outstanding, or (ii) for other purposes of the District in a principal amount not to exceed $24,490,000*. See the caption “SOURCES OF PAYMENTS FOR THE BONDS – Parity Bonds.” Payment of Special Taxes is not a Personal Obligation of the Property Owners An owner of a taxable parcel is not personally obligated to pay Special Taxes. Rather, Special Taxes are an obligation 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
* Preliminary, subject to change.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
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44 obligations by the District is limited to judicial foreclosure in the Superior Court of California, County of Riverside. There is no assurance that any current or subsequent owner of a parcel subject to a Special Tax lien will be able to pay the amounts due or that such owner will choose to pay such amounts even though financially able to do so.
Failure by owners of the parcels to pay Special Tax installments when due, delay in foreclosure proceedings, or the inability of the District to sell parcels that have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of Special Taxes levied against such parcels may result in the inability of the District to make full or timely payments of debt service on the Bonds, which may in turn result in the depletion of the Reserve Account. See the caption “— Enforcement Delays — Bankruptcy.” Ballot Initiatives
Articles XIII A, XIII B, XIII C, and XIII D of the California Constitution were adopted pursuant to measures qualified for the ballot pursuant to the State’s constitutional initiative process. From time to time, other initiative measures could be adopted by California voters. The adoption of any such initiative might place limitations on the ability of the State, the City, or other local agencies to increase revenues or to increase appropriations.
Proposition 218
An initiative measure entitled “The Right to Vote on Taxes Act” (“Proposition 218”) was approved by the voters at the November 5, 1996 statewide general election. Among other things, Proposition 218 added a new Article XIII C to the California Constitution which states that “. . . the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.” The Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the rate and method of apportionment of an existing special tax. However, the Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislative body determines that the reduction or termination of the special tax would not interfere with the timely retirement of that debt. While the application of Proposition 218 in this context has not yet been interpreted by the courts and the matter is not completely free from doubt, it is not likely that Proposition 218 has conferred on the voters the power to effect a repeal or reduction of the Special Tax if the result thereof would be to impair the security of the 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 Improvement Area No. 1, 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 Improvement Area No. 1 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.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
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45 Litigation with Respect to Community Facilities Districts Shapiro. The California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in City of San Diego v. Melvin Shapiro (2014) 228 Cal.App.4th 756 (the “ San Diego Decision ”). The case involved a Convention Center Facilities District (the “ CCFD”) established by the City of San Diego ( “San Diego”). The CCFD is a financing district much like a community facilities district established under the provisions of the Act. The CCFD is comprised of all of the real property in San Diego. However, the special tax to be levied within the CCFD was to be levied only on hotel properties located within the CCFD.
The election authorizing the special tax was limited to owners of hotel properties and lessees of real property owned by a governmental entity on which a hotel is located. Thus, the election was not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was modeled after Section 53326(c) of the Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed district whose property would be subject to the special tax. The Court held that the CCFD special tax election was invalid under the California Constitution because Article XIIIA, Section 4 thereof and Article XIIIC, Section 2 thereof require that the electors in such an election be the registered voters within the district.
Horizon. The Sacramento County Superior Court issued a ruling in Horizon Capital Investments, LLC v. City of Sacramento et al. (Case No. 34-2017-80002661), which was a case involving an election to approve the levy of a special tax within a community facilities district (“CFD”) formed under the Act.
In 2017, the City of Sacramento initiated proceedings to form a CFD to finance certain costs to operate and maintain a streetcar line. As permitted by the Act, the proposed district included non-contiguous parcels of non-residential property. Because there were fewer than 12 registered voters residing within the territory of the proposed CFD, the City Council submitted the special tax proposed to be levied within the proposed CFD to the owners of land within the proposed CFD, as required by the Act. The proposed special tax received the requisite two-thirds vote in the landowner election.
Petitioners Horizon Capital Investments, LLC et al. filed a writ of mandate and complaint for reverse validation and declaratory relief. Petitioners argued, and the superior court agreed in its final ruling, that under section 4(a) of article XIII A of the California Constitution (which provides that “ Cities, Counties and special districts, by a two -thirds vote of the qualified electors of such district [sic], may impose special taxes on such district…”) the phrase “qualified electors” means the registered voters of the entire City of Sacramento and not just the owners of the property within the boundaries of the proposed CFD. Citing the San Diego Decision, the tentative ruling states that the phrase “qualified electors of the district” refers to the registered voters of the entity imposing the special tax, which in this case was the City of Sacramento. Because the vote within the proposed CFD was by landowners only and not by all registered voters in the City of Sacramento, the final r uling states that the special tax is invalid.
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 Improvement Area No. 1 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 Improvement Area No. 1. 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 Item Title: 12.1
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46 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 Improvement Area No. 1 approved the Special Tax on July 16, 2025. 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.
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 Improvement Area No. 1 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 Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
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47 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 the otherwise expected yield on such Bonds. See the capt ion “THE BONDS — Redemption — Special Mandatory Redemption from Special Tax Prepayments.”
Cybersecurity
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. The City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the efforts of the City to manage cyber threats and attacks will b e successful in all cases, or that any such attack will not materially impact the operations or finances of the City, or the administration of the 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 Trustee. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the levy and collection of Special Taxes or the payment of debt service on the Bonds.
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 D istrict 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 Lennar 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 Improvement Area No. 1, Lennar 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 Lennar will con tain updates regarding the development within Improvement Area No. 1 as outlined in Section 4 of the Developer Continuing Disclosure Certificate attached hereto as APPENDIX G. In addition to its semiannual reports, Lennar will agree to provide notices of certain events set forth in the Developer Continuing Disclosure Certificate. Lennar’s obligations under the Developer Continuing Disclosure Certificate will terminate as set forth in Section 7 of the Developer Continuing Disclosure Certificate,
Lennar has advised the District that, except as described in this paragraph, based on a review of prior continuing disclosure obligations in California, Lennar is not aware of any material failures by it or any entity Item Title: 12.1
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48 under managerial control of Lennar to comply in all material respects with previous continuing disclosure undertakings in a written certificate or agreement executed by it or any entity under the managerial control of Lennar to provide periodic continuing disclosure reports or notices of material events respecting securities offerings in California within the past five years. However, (i) in connection with the $16,780,000 California Municipal Finance Authority Special Tax Revenue Bonds BOLD Program Series 2020B, Lennar inadvertently failed to file the initial semi-annual report by the due date of May 1, 2021, but filed a curative report on May 21, 2021; and (ii) in connection with the $5,795,000 City of Rancho Cordova Grantline 208 Community Facilities District No. 2018-1 Special Tax Bonds, Series 2021B, Lennar inadvertently failed to file the initial annual report by the due date of April 1, 2022, but filed a curative report on September 21, 2022.
TAX MATTERS
In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming 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, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), generally certain corporations with more than $1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed 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.
The excess of the stated redemption price at maturity of a Bond over 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) 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 the Bond Owner will increase the Bond 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 and others and is subject to the condition that the District complies 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 will covenant to comply with all such requirements.
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, whic h 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. 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 similar Bonds). No assurance can be given that in the course of an audit, Item Title: 12.1
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49 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 on the Bonds or their market value.
SUBSEQUENT TO THE ISSUANCE OF THE BONDS THERE MIGHT BE FEDERAL, STATE, OR
LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY CHANGES TO OR
INTERPRETATIONS OF FEDERAL, STATE, OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE,
OR LOCAL TAX TREATMENT OF THE BONDS INCLUDING THE IMPOSITION OF ADDITIONAL
FEDERAL INCOME OR STATE TAXES BEING IMPOSED ON OWNERS OF TAX-EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE BONDS. THESE CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE BONDS. NO ASSURANCE CAN BE GIVEN THAT
SUBSEQUENT TO THE ISSUANCE OF THE BONDS STATUTORY CHANGES WILL NOT BE
INTRODUCED OR ENACTED OR JUDICIAL OR REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE BONDS,
ALL POTENTIAL PURCHASE RS SHOULD CONSULT THEIR TAX ADVISORS REGARDING
POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE BONDS.
Bond Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The authorizing resolutions 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 has rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes provided that the District continues to comply with certain requirements of the Code, the ownership of the Bonds and the accrual or receipt of interest 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 purc hasers should consult their tax advisors with respect to collateral tax consequences relating to the Bonds.
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 Trustee 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 Item Title: 12.1
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50 or enjoin the collection of the Special Taxes, or in any way contest or affect the validity of the Bonds, the Indenture, the Special Taxes, or the transactions described herein.
NO RATING
The District has not made, and does not contemplate making, an application to any rating organization for the assignment of a rating on the Bonds.
UNDERWRITING
The Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (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 _______, less net original issue discount 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.
The Underwriter and its affiliates comprise a full- service financial institution engaged in activities which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedgi ng, market making, brokerage and other financial and non- financial activities and services. The Underwriter and its affiliates may have provided, and may in the future provide, a variety of these services to the City and to persons and entities with relat ionships with the City, for which they received or will receive customary fees and expenses.
In the ordinary course of these business activities, the Underwriter and its affiliates may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the City (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the City.
The Underwriter and its affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire such assets, securities and instruments. Such investment and securities activities may involve securities and instruments of the City.
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.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
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51 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. 2022-3
(LEGADO) OF THE CITY OF MENIFEE
By:
Armando G. Villa
City Manager of the City of Menifee
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
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A-1
APPENDIX A
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
A Special Tax (all capitalized terms are defined in Section A, “Definitions” or Section G or “ Prepayment of Special Tax ”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of CFD No. 2022- 3 IA 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, acting in its capacity as the legislative body of CFD No. 2022- 3 IA 1, by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel as a Single Family Residential Property with a stand-alone Residential Unit.
“Acre or Acreage” means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Map, parcel map, condominium plan, or other recorded County parcel m ap or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560.
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
“Administrative Expenses” means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2022- 3 IA 1: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2022-3 IA 1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2022-3 IA 1 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2022-3 IA 1 and any major property owner associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2022-3 IA 1 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2022- 3 IA 1 for any other administrative purposes of CFD No. 2022- 3 IA 1, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
“Amended and Restated Rate and Method of Apportionment” means this Amended and Restated Rate and Method of Apportionment of Special Taxes.
“Approved Property” means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1
st preceding the Fiscal Year in which the Special Tax is being levied, (ii) and has 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.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 71
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May 6, 2026
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A-2
“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.
“Boundary Map” means a recorded map or maps (as amended), of the CFD which indicates the boundaries of the CFD.
“Building Permit” means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include any subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator as necessary to fairly allocate Special Tax to the Assessor’s Parcel, provided that following such determination the Maximum Special Tax that may be levied in each Fiscal Year on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding CFD No. 2022-3 IA 1 Bonds plus the estimated annual Administrative Expenses for such Fiscal Year.
“Building Square Footage” 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. 2022- 3” means Community Facilities District No. 2022 -3 (Legado) established by the City under the Act.
“CFD No. 2022-3 IA 1 ” means Improvement Area No. 1 of CFD No. 2022- 3 as identified on the Boundary Map for CFD No. 2022-3.
“CFD No. 2022-3 IA 1 Bonds ” means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long- term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or indi viduals, or long- term contracts, or any refunding thereof, to which Special Tax of CFD No. 2022-3 IA 1 have been pledged.
“City” means the City of Menifee, State of California.
“City Council” means the City Council of the City of Menifee, acting as the Legislative Body of CFD No. 2022-3 IA 1.
“Condominium Plan” means a condominium plan as set forth in the California Civil Code, Section 4285.
“County” means the County of Riverside, State of California.
Item Title: 12.1
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A-3
“Developed Property” means all Assessor’s Parcels: (i) that are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have an Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) for which a Building Permit fo r new construction was issued on or before May 1 st preceding the Fiscal Year in which the Special Tax is being levied.
“Exempt Property” means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.
“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a Condominium Plan pursuant to California Civil Code Section 4285 that creates individual lots for which Building Permits may be issued without further subdivision.
“Fiscal Year” means the period commencing on July 1st of any year and ending the following June 30th.
“Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which CFD No. 2022-3 IA 1 Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.
“Land Use Category” means any of the categories listed in Tables 1, 2, and 3 of Section D.
“Maximum Special Tax ” means for each Assessor’s Parcel, the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2022- 3 IA 1 in any Fiscal Year on such Assessor’s Parcel.
“Multifamily Property” means all Assessor’s Parcels of Residential 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 or will be issued for a non-residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non-Residential Property.
“Partial Prepayment Amount” means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2.
“Prepayment Amount ” means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.
“Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property, or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property, or Provisional Undeveloped Property, as applicable.
“Provisional Undeveloped Property” means all Assessor’s Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be classified as Exempt Property because to do so would be reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Sections F.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 73
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May 6, 2026
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A-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 Amended and Restated Rate and Method of Apportionment.
“Single Family Residential Property ” means all Assessor’s Parcels of Residential Property other than Multifamily Property.
“Special Tax” means any of the special taxes authorized to be levied within CFD No. 2022-3 IA 1 pursuant to the Act to fund the Special Tax Requirement.
“Special Tax Requirement “ means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding CFD No. 2022-3 IA 1 Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to replenish any reserve funds established in association with the CFD No. 2022-3 IA 1 Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax delinquencies, ( vi) for debt service on CFD No. 2022-3 IA 1 Bonds anticipated to be issued, and (vii) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2022- 3 IA 1, provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps Two or Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the CFD No. 2022-3 IA 1 Bonds pursuant to the Indenture.
“Tax Zone(s)” means the geographical area(s) within CFD No. 2022-3 IA 1 identified as Tax Zone 1, Tax Zone 2, or Tax Zone 3 as shown on the Boundary Map.
“Tax Zone 1” means all property located within CFD No. 2022-3 IA 1 identified on the Boundary Map as Tax Zone 1.
“Tax Zone 2” means all property located within CFD No. 2022-3 IA 1 identified on the Boundary Map as Tax Zone 2.
“Tax Zone 3” means all property located within CFD No. 2022-3 IA 1 identified on the Boundary Map as Tax Zone 3.
“Taxable Property” means all Assessor’s Parcels within CFD No. 2022-3 IA 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 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. 2022-3 IA 1 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 74
Menifee Mayor and City Council
May 6, 2026
Page
400 of 714
A-5
Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property. In addition, each Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property shall be further classified as being within Tax Zone 1, Tax Zone 2, or Tax Zone 3.
Assessor’s Parcels of Developed Property shall further be classified as Residential Property or Non-Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as Single Family Residential Property or Multifamily Property. Each Assessor’s Parcel of Single Family Residential Property shall be further categorized into Land Use Categories based on its Building Square Footage and assigned to its appropriate Assigned Special Tax rate.
In the event that an Assessor’s Parcel for which one or more Building Permits have been issued and the County has not yet assigned final Assessor’s Parcel Number(s) to the Residential Unit(s) (in accordance with the Final Map or Condominium Plan) on such Assessor’s Parcel, the amount of the Special Tax levy on such Assessor’s Parcel for each Fiscal Year shall be determined as follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax levy for such Assessor’s Parcel, based on the classification of such Assessor’s Parcel as Undeveloped Property; (2) the amount of the Special Tax levy for the Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Assigned Special Tax rates for Developed Property and shall be taxed as Developed Property in accordance with Step 1 of Section E below; and (3) the amount of the Special Tax levy on the Acreage of Taxable Property in such Assessor’s Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax rate levied on all other Undeveloped Property multiplied by the total of the amount determined in clause (1), less the amount determined in clause (2).
D. MAXIMUM SPECIAL TAX
1. Developed Property
The Maximum Special Tax for each Assessor’s Parcel of Single Family Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax or (ii) the Backup Special Tax.
The Maximum Special Tax for each Assessor’s Parcel of Non -Residential or Multifamily Property shall be the applicable Assigned Special Tax described in Table 1, Table 2, and Table 3 of Section D.
a. Assigned Special Tax
Each Fiscal Year, each Assessor’s Parcel of Single Family Residential Property, Multifamily Property or Non-Residential shall be subject to an Assigned Special Tax. The Assigned Special Tax applicable to an Assessor's Parcel of Developed Property shall be determined pursuant to Table 1, Table 2, and Table 3 below.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 75
Menifee Mayor and City Council
May 6, 2026
Page
401 of 714
A-6
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 1
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 1,600 sq. ft $2,975
2. Single Family Residential Property RU 1,600 sq. ft to 1,800 sq. ft $2,984
3. Single Family Residential Property RU 1,801 sq. ft to 2,000 sq. ft $3,069
4. Single Family Residential Property RU Greater than 2,000 sq. ft $3,163
5. Multifamily Property Acre N/A $24,449
6. Non-Residential Property Acre N/A $24,449
On each July 1, commencing July 1, 2026, the Assigned Special Tax rate for Developed Property shown in Table 1 shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
TABLE 2
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 2
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 1,900 sq. ft $3,019
2. Single Family Residential Property RU 1,900 sq. ft to 2,100 sq. ft $3,201
3. Single Family Residential Property RU 2,101 sq. ft to 2,300 sq. ft $3,264
4. Single Family Residential Property RU 2,301 sq. ft to 2,500 sq. ft $3,397
5. Single Family Residential Property RU Greater than 2,500 sq. ft $3,457
6. Multifamily Property Acre N/A $23,433
7. Non-Residential Property Acre N/A $23,433
On each July 1, commencing July 1, 2026, the Assigned Special Tax rate for Developed Property shown in Table 2 shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 76
Menifee Mayor and City Council
May 6, 2026
Page
402 of 714
A-7
TABLE 3
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 3
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 1,900 sq. ft $3,019
2. Single Family Residential Property RU 1,900 sq. ft to 2,100 sq. ft $3,201
3. Single Family Residential Property RU 2,101 sq. ft to 2,300 sq. ft $3,345
4. Single Family Residential Property RU 2,301 sq. ft to 2,500 sq. ft $3,563
5. Single Family Residential Property RU 2,501 sq. ft to 2,700 sq. ft $3,781
6. Single Family Residential Property RU 2,701 sq. ft to 2,900 sq. ft $3,907
7. Single Family Residential Property RU 2,901 sq. ft to 3,100 sq. ft $4,009
8. Single Family Residential Property RU 3,101 sq. ft to 3,300 sq. ft $4,375
9. Single Family Residential Property RU 3,301 sq. ft to 3,500 sq. ft $4,741
10. Single Family Residential Property RU Greater than 3,500 sq. ft $5,108
11. Multifamily Property Acre N/A $22,363
12. Non-Residential Property Acre N/A $22,363
On each July 1, commencing July 1, 2026, the Assigned Special Tax rate for Developed Property shown in Table 3 shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
b. Multiple Land Use Categories
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for all Land Use Categories located on the Assessor ’s Parcel. The CFD Administrator’s allocation to each type of property shall be final.
c. Backup Special Tax
When a Final Map is recorded, the CFD Administrator shall determine which Tax Zone the Final Map area lies within and the Backup Special Tax for an Assessor’s Parcel within the Final Map classified or to be classified as Single Family Property shall be calculated according to the following formula.
B = (U x A) / L
The terms above have the following meanings:
B = Backup Special Tax per Assessor’s Parcel within the Final Map
U = Maximum Special Tax per Acre of Undeveloped Property per Section D.3 below
A = Acreage of Single Family Residential Property expected to exist in such Final Map at the time of calculation, as determined by the CFD Administrator
L = Number of Residential Units expected to exist in such Final Map at the time of calculation, as determined by the CFD 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 determined by Table 4 below:
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 77
Menifee Mayor and City Council
May 6, 2026
Page
403 of 714
A-8
TABLE 4
MAXIMUM SPECIAL TAX PER ACRE
FISCAL YEAR 2025-2026
Tax Zone
Maximum Special
Tax per Acre
1 $24,449
2 $23,433
3 $22,363
In the event any superseding Final Map is recorded as a Final Map within the Boundaries of CFD No. 2022- 3 IA 1, the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be on the rate per Acre shown in Table 4 above. The Backup Specia l Tax shall not apply to Multifamily Residential Property, or Non-Residential Property.
On each July 1, commencing July 1, 2026, the Backup Special Tax rate shown in Table 4 shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
2. Approved Property
The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Single Family Property shall be the Backup Special Tax computed pursuant to Section D.1.c above.
The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Multifamily Property or Non -Residential Property shall be $24,449 per Acre for Tax Zone 1, $23,433 per Acre for Tax Zone 2, and $22,363 per Acre for Tax Zone 3.
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 that is not Exempt Property pursuant to the provisions of Section F
The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property and Provisional Undeveloped Property that is not Exempt Property shall be equal to the product of $24,449 per Acre for Tax Zone 1, $23,433 per Acre for Tax Zone 2, and $22,363 per A cre for Tax Zone 3 multiplied by the Acreage of such Assessor’s Parcel.
On each July 1, commencing July 1, 2026, the Maximum Special Tax rate for Undeveloped 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 rate to satisfy the Special Tax Requirement.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 78
Menifee Mayor and City Council
May 6, 2026
Page
404 of 714
A-9
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 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 s hall be increased Proportionately from the Assigned Special Tax up to 100% of the Backup Special Tax as needed to satisfy the Special Tax Requirement.
Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the first four steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property up to 100% of 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 City shall classify as Exempt Property, in the following order of priority, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the total Acreage of all Taxable Property to less than the amounts shown in Table 5 below.
TABLE 5
MINIMUM TAXABLE ACRES
Tax Zone Acres
1 19.82
2 24.32
3 27.44
Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the total Acreage of all Taxable Property to less than the Acres shown in Table 5 per Tax Zone. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than the Acres shown in Table 5 per Tax Zone will be classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to Step Five in Section E.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 79
Menifee Mayor and City Council
May 6, 2026
Page
405 of 714
A-10
G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
“CFD Public Facilities” means $31,000,000 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 public facilities under the authorized bonding program for CFD No. 2022-3 IA 1, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more CFD No. 2022-3 IA 1 Bonds to be supported by Special Tax levied under this Amended and Restated Rate and Method of Apportionment.
“Construction Fund” means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are currently available for expenditure to acquire or construct public facilities eligible to be financed by CFD No. 2022-3 IA 1.
“Construction Inflation Index” means the annual percentage change in the Engineering News-Record Building Cost Index for the City of Los Angeles, measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles.
“Future Facilities Costs” means the CFD Public Facilities minus (i) public facility costs previously funded from the Construction Fund, (ii) public facility costs available to be funded through existing construction or escrow accounts funded by the Outstanding Bonds, and minus (ii i) public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment, provided such amount shall not 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 CFD No. 2022-3 IA 1 Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Tax.
1. Prepayment in Full
The Maximum Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor’s Parcels of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has been issued, (iii) Approved 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 pursuant to Section F. The Maximum Special Tax obligation applicable to an Asses sor’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 Asse ssor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel intending to prepay the Maximum Special Tax obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel.
Within 15 days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel. Prepayment must be made not less than 60 days prior to the redemption date for any CFD No. 2022-3 IA 1 Bonds to be redeemed with the proceeds of such prepaid Special Taxes.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 80
Menifee Mayor and City Council
May 6, 2026
Page
406 of 714
A-11
The Prepayment Amount (defined below) shall be calculated as follows (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 f or 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, any Provisional Undeveloped Property to be prepaid, compute the Maximum Special Tax for the Assessor’s Parcel.
3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total amount of Special Taxes that could be levied at the Maximum Special Tax at build out of all Assessor’s Parcels of Taxable Property based on the applicable Maximum Special Tax for Assessor’s Parcels of Developed Property not including any Assessor’s Parcels for which the Special Tax obligation has been previously prepaid.
4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the “Bond Redemption Amount”).
5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”).
6. Determine the Future Facilities Costs.
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor’s Parcel (the “Future Facilities Amount”), but in no event less than zero.
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 CFD No. 2022- 3 IA 1 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.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 81
Menifee Mayor and City Council
May 6, 2026
Page
407 of 714
A-12
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, including the cost of computation of the Prepayment Amount, the cost to invest the Prepayment Amount, the cost of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Maximum Special Tax obligation for the Assessor’s Parcel and the redemption of Outstanding Bonds (the “Administrative Fees and Expenses”).
13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new re serve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no e vent shall such amount be less than zero.
14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and Expenses, less the Reserve Fund Credit.
15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by CFD No. 2022-3 IA 1.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Outstanding Bonds. In such event, the increment above $5,000 or an integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next redemption from other Special Tax prepayments of Outstanding Bonds or to make debt service payments.
As a result of the payment of the current Fiscal Year’s Special Tax levy as determined pursuant to paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year’s Special Tax levy for the Assessor’s Parcel from the County tax roll. With respect to any Assessor’s Parcel for which the Maximum Special Tax obligation is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Maximum Special Tax obligation and the release of the Special Tax lien for the Assessor’s Parcel, and the obligation to pay the Special Tax for such Assessor’s Parcel shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Special Tax that may be levied each Fiscal Year on all Assessor’s Parcels of Taxable Property after the proposed prepayment will be at least 1.1 times annual debt service for such Fiscal Year on the Outstanding Bonds that will remain outstanding after the prepayment plus the estimated annual Administrative Expenses.
Tenders of Outstanding Bonds in prepayment of the Maximum Special Tax obligation may be accepted upon the terms and conditions established by the City Council pursuant to the Act. However, the use of Outstanding Bond tenders shall only be allowed on a cas e-by-case basis as specifically approved by the City Council.
2. Prepayment in Part
The Maximum Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property or Undeveloped Property may be partially prepaid. For purposes of determining the partial prepayment amount, the provisions of Section G.1 shall be modified as provided by the following formula:
PP = ((P
E – A) x F) + A
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 82
Menifee Mayor and City Council
May 6, 2026
Page
408 of 714
A-13
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 Maximum Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1 The owner of an Assessor’s Parcel who desires to partially prepay the Maximum Special Tax obligation for the Assessor’s Parcel shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Maximum Special Tax obligation, (ii) the percentage of the Maximum Special Tax obligation such owner wishes to prepay, and (iii) the company or agency that will be acting as the escrow agent, if any. Within 5 days of receipt of such notice, the CFD Administrator shall notify such property owner of the amount of the non- refundable deposit determined to cover the cost to be incurred by the CFD in calculating the amount of a partial prepayment. Within 15 business days of receipt of such non- refundable deposit, the CFD Administrator shall notify such owner of the amount of the Partial Prepayment Amount for the Assessor’s Parcel. A Partial Prepayment Amount must be made not 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 Maximum Special Tax obligation is partially prepaid, the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in Paragraph 15 of Section G.1, and (ii) indicate in the records of the CFD that there has been a Partial Prepayment for the Assessor’s Parcel and that a portion of the Maximum Special Tax obligation equal to the remaining percentage (1.00 - F) of the Maximum Special Tax obligation will continue to be levied on the Assessor’s Parcel pursuant to Section E.
H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any CFD No. 2022-3 IA 1 Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2069-2070 Fiscal Year, however, Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2022- 3 IA 1 Bonds have been paid; (ii) all authorized facilities of CFD No. 2022 -3 IA 1 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Tax remain uncollected and (iv) all other obligations of CFD No. 2022-3 IA 1 have been satisfied.
I. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2022-3 IA 1 may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.
J. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written appeal of the Special Taxes on his/her Assessor’s Parcel(s) with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant’s Assessor’s Parcel(s). No refunds of previously paid Special Taxes shall be made.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 83
Menifee Mayor and City Council
May 6, 2026
Page
409 of 714
A-14
The CFD Administrator shall interpret this Amended and Restated Rate and Method of Apportionment and make determinations relative to the annual levy and administration of the Special Taxes and any taxpayer who appeals, as herein specified.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
Item Page Number: 84
Menifee Mayor and City Council
May 6, 2026
Page
410 of 714
B-1
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 de scribed 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.
Item Title: 12.1
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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 addition to varied manufacturing employment, the MSA has large and growing commercial and service sector employment, as reflected in the table below.
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The following table represents the Annual Average Labor Force and Industry Employment for the period from 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.
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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 20 20 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.”
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.”
Item Title: 12.1
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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
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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. 2022-3 (Legado)
Menifee, California
Re: $___________ Community Facilities District No. 2022-3 (Legado) of the City of Menifee Improvement Area No. 1 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. 2022-3 (Legado) of the City of Menifee (the “District”) and the authorization and issuance of the District’s Improvement Area No. 1 Special Tax Bonds, Series 2026A in the aggregate principal amount of $______ (the “Bonds”) and such other information and documents as we consider necessar y 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 May 6, 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.
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(3) Under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals; however, it should be noted that, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed on such corporations.
(4) Interest (and original issue discount) on the Bonds is exempt from State of California personal income tax.
(5) The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity are to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Bond Owner will increase the Bond Owner’s basis in the applicable Bond.
(6) The amount by which a Bond Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Bond premium which must be amortized under Section 171 of the Code; such amortizable Bond premium reduces the Bond Owner’s basis in the applicable Bond (and the amount of tax- exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in a Bond Owner realizing a taxable gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Owner.
The opinions expressed in paragraphs (3) and (5) above as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Bonds is subject to the condition that the District and the City comply with all requirements of the Code, that must be satisfied subsequent to the issuance of the Bonds to assure that such interest (and original issue discount) will not become includable in gross income for federal income tax purposes. Failure to comply wit h 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
The following is a summary of certain provisions of the Indenture which are not described elsewhere.
This summary does not purport to be comprehensive and reference should be made to the Indenture for a full and complete statement of the provisions thereof.
[TO COME]
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APPENDIX F
FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE
THIS CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate ”) dated as of May 1, 2026 is executed and delivered by Community Facilities District No. 2022- 3 (Legado) of the City of Menifee (the “District”) in connection with the issuance and delivery by the District of its $______ Improvement Area No. 1 Special Tax Bonds, Series 2026A (the “Bonds”). The Bonds are being issued pursuant to a Resolution of Issuance adopted on May 6, 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, 202 (the “Indenture”), by and between the District and Wilmington Trust, National Association, as trustee. The District covenants as follows:
Section 1. Purpose of the Disclosure Certificate . This Disclosure Certificate is being executed and delivered by the District for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule.
Section 2. Definitions. In addition to the definitions set forth in the Indenture and the Rate and Method of Apportionment, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the District pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income purposes.
“City” shall mean the City of Menifee, County of Riverside, California. “Disclosure Representative” shall mean the Chief Financial Officer of the City, or his or her designee, or such other officer or employee as the District shall designate in writing to the Dissemination Agent from time to time.
“Dissemination Agent” shall mean, initially, Spicer Consulting Group, LLC, or any successor Dissemination Agent designated in writing by the District and which has filed with the then current Dissemination Agent a written acceptance of such designation. “District” shall mean Community Facilities District No. 2022-3 (Legado) 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 Commiss ion in the future system of the MSRB.
“Financial Obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. “Improvement Area” means Improvement Area No. 1 of the District.
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“Listed Events” shall mean any of the events listed in Section 5 of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Com mission, 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 Stifel, Nicolaus & Company, Incorporated. “Rate and Method of Apportionment ” shall mean that certain Rate and Method of Apportionment of Special Tax for the Improvement Area 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 and designated the Improvement Area therein. “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 Dissemination Agent is other than the District, then not later than 15 business days prior to the date referred to in the prior sentence hereof, the District shall provide the Annual Report (in a form suitable for filing with EMMA) to the Dissemination Agent. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the District, if any exist, may be submitted separately from and later than the balance of the Annual Report if they are not available by the date required above for the filing of the Annual Report. (b) In the event that the Dissemination Agent is an entity other than the District, then the provisions of this Section 3(b) shall apply. Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report, the District shall provide the Annual 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 contac t 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.
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(c) If the Dissemination Agent is other than the District and if the Dissemination Agent is unable to verify that an Annual Report has been provided to EMMA by the date required in subsection (a), the Dissemination Agent shall send, in a timely manner, a notice to EMMA of the failure to file the Annual Report in the form required by EMMA. If the District acts as its own Dissemination Agent, it shall file a notice with EMMA no later than the date specified in subsection (a) for filing an Annual Report if the District fails to file the Annual Report by that date.
(d) If the Dissemination Agent is other than the District, the Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the name and address of the repository if other than the MSRB through EMMA; and (ii) promptly after receipt of the Annual Report, file a report with the District certifying that the Annual Report has been provided to EMMA and the date it was provided. (e) Notwithstanding any other provision of this Disclosure Certificate, all filings shall be made in accordance with the MSRB’s EMMA system or in another manner approved under the Rule.
Section 4. Content of Annual Reports. The District’s Annual Report shall contain or include by reference the following:
(a) Financial Statements. The audited financial statements of the District for the prior fiscal year, if any have been prepared and which, if prepared, shall be prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the District’s audited financial statements, if any are prepared, are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Financial and Operating Data. The Annual Report shall contain or incorporate by reference the following information:
(i) the principal amount of the Bonds outstanding as of the September 2 preceding the filing of the Annual Report;
(ii) the balance in each fund under the Indenture as of the September 2 preceding the filing of the Annual Report;
(iii) the aggregate assessed valuation of the Taxable Property within the Improvement Area;
(iv) any changes to the Rate and Method of Apportionment of Special Tax 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 Improvement Area 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 Improvement Area No. 1 based on the assessed value and the Special Tax levy for the then current fiscal year, which update may be provided in a form similar to Table 2 in the Official Statement; provided that such update need not include overlapping special tax, assessment or general obligation indebtedness; and Item Title: 12.1
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(vii) the status of any foreclosure actions being pursued by the District with respect to delinquent Special Taxes within the Improvement Area.
(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 Ex change 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.
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(b) Additionally, the District shall give or cause the Dissemination Agent to give notice to EMMA in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events with respect to the Bonds, if material:
1. mergers, consolidations, acquisitions, the sale of all or substantially all of the assets of the obligated persons or their termination;
2. appointment of a successor or additional fiscal agent or the change of the name of a fiscal agent;
3. nonpayment related defaults;
4. modifications to the rights of Bondholders;
5. bond calls;
6. release, substitution or sale of property securing repayment of the Bonds; and
7. incurrence of a Financial Obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders. (c) In the event that the District’s fiscal year changes, the District shall report or shall instruct the Dissemination Agent to report such change in the same manner and to the same parties as Listed Events would be reported pursuant to this Section.
(d) The District hereby agrees that the undertaking set forth in this Disclosure Certificate is the responsibility of the District, and the Dissemination Agent, if other than the District, shall not be responsible for determining whether the District’s instructions to the Dissemination Agent under this Section comply with the requirements of the Rule.
Section 6. Termination of Reporting Obligation. The obligations of the District and the Dissemination Agent under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the District shall give notice of such termination in the same manner as for a Listed Event under Section
5. Section 7. Dissemination Agent. The District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor 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 Item Title: 12.1
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complied with the requirements of the Rule as of the date of this Disclosure Certificate, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, and (3) the amendment or waiver either (i) is approved by the Owners of the Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Owners or (ii) does not, in the determination of the District, materially impair the interests of the Owners or Beneficial Owners of the Bonds.
(b) To the extent any amendment to this Disclosure Certificate results in a change in the type of financial information or operating data provided pursuant to this Disclosure Certificate, the first Annual Report provided thereafter shall include a narrative explanation of the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
(c) If an amendment is made to the basis on which financial statements are prepared, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a quantitative and, to the extent reasonably feasible, qualitative discussion of the differences in the accounting principles and the 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.
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Section 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Certificate may be given as follows:
District: Community Facilities District No. 2022-3 (Legado) City of Menifee
29844 Haun Road
Menifee, CA 92586
Attn: Chief Financial Officer
Underwriter: Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, CA 90067
Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notice or communications should be sent.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the District, the Trustee, the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.
Section 14. Merger. Any person succeeding to all or substantially all of the Dissemination Agent’s business shall be the successor Dissemination Agent without the filing of any paper or any further act.
This Disclosure Certificate is executed as of the date and year first set forth above.
COMMUNITY FACILITIES DISTRICT NO. 2022-3
(LEGADO) OF THE CITY OF MENIFEE
By:
Travis Hickey
Disclosure Representative
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APPENDIX G
DEVELOPER CONTINUING DISCLOSURE CERTIFICATE
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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 corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.
DTC holds and provides asset servicing for over 3.5 million issues of U .S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants ( “Direct Participants”) deposit with DTC. DTC also facilitates the post- trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book- entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( “Indirect Participants ”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
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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 receipt of funds and corresponding detail information from the District or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name, ” and will be the responsibility of such Participant and not of DTC, the Trustee, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
A Bond Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Trustee. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a book- entry credit of tendered Bonds to the Trustee’s DTC account.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the District or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered.
The District may decide to discontinue use of the system of book- entry only transfers through DTC (or a successor securities depository). In that event, bonds will be printed and delivered to DTC.
THE TRUSTEE, AS LONG AS A BOOK- ENTRY ONLY SYSTEM IS USED FOR THE BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY FAILURE
OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY ANY
BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE
VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.
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4937-3233-3711v5/200299-0031
BOND INDENTURE
Between
COMMUNITY FACILITIES DISTRICT NO. 2022-3
(LEGADO) OF THE CITY OF MENIFEE
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
Relating to
$_________
COMMUNITY FACILITIES DISTRICT NO. 2022-3
(LEGADO) OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 1
SPECIAL TAX BONDS, SERIES 2026A
Dated as of May 1, 2026
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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 ..................................................................................................... 15 Section 2.13. Representation Letter .................................................................................................. 16 Section 2.14. Transfers Outside Book-Entry System ....................................................................... 16 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 ........................................ 18 Section 3.4. Interest Account and Principal Account of the Special Tax Fund .............................. 19 Section 3.5. Redemption Account of the Special Tax Fund ........................................................... 19 Section 3.6. Reserve Account of the Special Tax Fund .................................................................. 20 Section 3.7. Rebate Fund ................................................................................................................ 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 ............................................................ 33 Section 4.5. Effect of Notice and Availability of Redemption Money ........................................... 33
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 .................................. 38 Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or Parity Bonds .......................................................................................................................... 39
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 ..................................................................................................... 41 Section 7.5. Merger or Consolidation ............................................................................................. 45
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default ........................................................................................................ 45 Section 8.2. Remedies of Owners ................................................................................................... 45 Section 8.3. Application of Revenues and Other Funds After Default ........................................... 46 Section 8.4. Power of Trustee to Control Proceedings ................................................................... 47 Section 8.5. Appointment of Receivers .......................................................................................... 47 Section 8.6. Non-Waiver ................................................................................................................. 47 Section 8.7. Limitations on Rights and Remedies of Owners ........................................................ 47 Section 8.8. Termination of Proceedings ........................................................................................ 48 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 ................................................................................................................ 50
ARTICLE X
MISCELLANEOUS
Section 10.1. Cancellation of Bonds and Parity Bonds .................................................................... 52 Section 10.2. Execution of Documents and Proof of Ownership ..................................................... 52 Section 10.3. Unclaimed Moneys ..................................................................................................... 52 Section 10.4. Provisions Constitute Contract; Governing Law; Venue ............................................ 53 Section 10.5. Future Contracts .......................................................................................................... 53 Section 10.6. Further Assurances ...................................................................................................... 53 Section 10.7. Entire Agreement; Severability ................................................................................... 53 Section 10.8. Notices ........................................................................................................................ 54
Signatures ................................................................................................................................... S-1
EXHIBIT A FORM OF SPECIAL TAX BOND .......................................................................... A-1 EXHIBIT B REQUISITION FOR DISBURSEMENT OF PROJECT COSTS ........................... B-1
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BOND INDENTURE
THIS BOND INDENTURE dated as of May 1, 2026, by and between COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO) 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. 2022-3 (Legado) of the City of Menifee Improvement Area No. 1 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 . 22-1222 and 22-1223 adopted by the City Council on September 21, 2022 and a special election held on September 21, 2022, authorizing the levy of a special tax and the issuance of bonds, the District is authorized to issue bonds in one or more series pursuant to the Act, in an aggregate principal amount not to exceed $40,000,000 for Improvement Area No. 1 of the District (“Improvement Area No. 1”).
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. 2022-3 (Legado) of the City of Menifee Improvement Area No. 1 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.
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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 $ 30,600, which amount shall escalate at 2.00% per Fiscal Year, commencing July 1, 2027.
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.
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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
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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, the Chief Financial Officer or City Clerk of the City, or any other officer or employee authorized by the City Council of the City or by an Authorized Representative of the District to undertake the action referenced in this Indenture as required to be undertaken by an Authorized Representative of the District.
Bond Counsel. The term “Bond Counsel” means Stradling Yocca Carlson & Rauth LLP , or another attorney at law or a firm of attorneys selected by the District of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia.
Bond Register. The term “Bond Register” means the books 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 Improvement Area No. 1 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
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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 Improvement Area No. 1 of the District.
Item Title: 12.1
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
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District. The term “District” means Community Facilities District No. 202 2-3 (Legado) of the City of Menifee established pursuant to the Act and Resolution No. 22-1222 adopted by the City Council of the City on September 21, 2022.
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 next following June 30.
Gross Taxes. The term “Gross Taxes” means the amount of all Special Taxes received by the District for Improvement Area No. 1 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.
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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. 2025-418 adopted by the City Council on August 6, 2025 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 on behalf of Improvement Area No. 1, 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 Improvement Area No. 1 of 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 Improvement Area No. 1 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
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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 Improvement Area No. 1 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 Item Title: 12.1
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“AA” or higher by S&P, delivered to the Trustee for the purpose of providing all or a portion of the Reserve Requirement for Bonds and Parity Bonds.
Reserve Requirement. The term “Reserve Requirement” means that amount as of any date of calculation equal to the lesser of: (i) 10% of the initial principal amount of the Bonds and Parity Bonds, if any; (ii) Maximum Annual Debt Service on the then Outstanding Bonds and Parity Bonds, if any; (iii) 125% of average Annual Debt Service on the then Outstanding Bonds and Parity Bonds , if any; provided, however, that the Reserve Requirement shall not exceed $_________ except in connection with the issuance of Parity Bonds.
Resolution of Formation. The term “Resolution of Formation” means Resolution Nos. 22- 1222 and 25-1613 adopted by the City Council on September 21, 2022, and July 16, 2025, respectively, pursuant to which the City Council established the District, designated Improvement Area No. 1 therein and undertook certain change proceedings for Improvement Area No. 1.
RMA. The term “RMA” means the Rate and Method of Apportionment of Special Tax for Improvement Area No. 1 approved by the qualified electors of Improvement Area No. 1 at the July 16, 2025 election.
Sinking Fund Payment. The term “Sinking Fund Payment” means the annual payment to be deposited in the Redemption Account to redeem a portion of the Term Bonds in accordance with the schedules set forth in Section 4.1(b) hereof and any annual sinking fund payment schedule to retire any Parity Bonds which are designated as Term Bonds.
Six-Month Period. The term “Six -Month Period” means the period of time beginning on the Delivery Date of each issue of Bonds or Parity Bonds, as applicable, and ending six consecutive months thereafter, and each six-month period thereafter until the latest maturity date of the Bonds and the Parity Bonds (and any obligations that refund an issue of the Bonds or Parity Bonds).
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 Improvement Area No. 1 in accordance with the Ordinance, the Resolution of Formation, the Act and the voter approval obtained at the July 16, 2025 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
Issuance of Special Tax Bonds for Improvement Area 1 of Community Facilities District 2022-3, Legado
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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, 20__, September 1, 20__, September 1, 20__, September 1, 20__ and September 1 , 20__ and any term maturities of an issue of Parity Bonds as specified in a Supplemental Indenture.
Trustee. The term “Trustee” means Wilmington Trust , National Association, a national banking association duly organized and existing under the laws of the United States, at its principal corporate trust office in Costa Mesa, California, and its successors or assigns, or any other bank or trust company 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 Improvement Area No. 1 of 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, (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); and/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
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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 Pro ject, paying Costs of Issuance and funding the Reserve Account; provided that the aggregate principal amount of the Bonds and any Parity Bonds shall not exceed the total indebtedness presently authorized or subsequently authoriz ed by the qualified electors within Improvement Area No. 1 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
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(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.
Section 2.4. Description of Bonds; Interest Rates . The Bonds and any Parity Bonds shall be issued in fully registered form in denominations of $5,000 or any integral multiple thereof.
The Bonds and any Parity Bonds of each issue shall be numbered as desired by the Trustee.
The Bonds shall be designated “ Community Facilities District No. 2022-3 (Legado) of the City of Menifee Improvement Area No. 1 Special Tax Bonds, Series 2026A .” The Bonds shall be dated as of their Delivery Date and shall mature and be payable on September 1 in the years and in the aggregate principal amounts and shall be subject to and shall bear interest at the rates set forth in the table below payable on September 1, 2026 and each Interest Payment Date thereafter:
Maturity Date
September 1
Principal
Amount
Interest
Rate
* $ %
*Term Bond
Interest shall be payable on each Bond and Parity Bond from the date established in accordance with Section 2.5 below on each Interest Payment Date thereafter until the principal sum of such Bond or Parity Bond has been paid; provided, however, that if at the maturity date of any Bond or Parity Bond (or if the same is redeemable and shall be duly called for redemption, then at Item Title: 12.1
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the date fixed for redemption) funds are available for the payment or redemption thereof in full, in accordance with the terms of this Indenture, such Bonds and Parity Bonds shall then cease to bear interest. Interest due on the Bonds and Parity Bonds shall be calculated on the basis of a 360- day year comprised of twelve 30-day months.
Section 2.5. Place and Form of Payment. The Bonds and Parity Bonds shall be payable both as to principal and interest, and as to any premiums upon the redemption thereof, in lawful money of the United States of America. The principal of the Bonds and Parity Bonds and any premiums due upon the redemption thereof shall be payable upon presentation and surrender thereof at the Principal Office of the Trustee, or at the designated office of any successor Trustee. If the Nominee of the Bonds or Parity Bonds is registered to Cede & Co., payment of principal and any premiums shall be made without presentment. Interest on any Bond or Parity Bond shall be payable from the Interest Payment Date next preceding the date of authentication of such Bond or Parity Bond, unless: (i) such date of authentication is an Interest Payment Date, in which event interest shall be payable from such date of authentication; (ii) the date of authentication is after a Record Date but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication; or (iii) the date of authentication is prior to the close of business on the first Record Date occurring after the issuance of such Bond or Parity Bond, in which event interest shall be payable from the dated date of such Bond or Parity Bond, as applicable; provided, however, that if at the time of authentication of such Bond or Parity Bond, interest is in default, interest on such Bond or Parity Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment on such Bond or Parity Bond, interest on such Bond or Parity Bond shall be payable from its dated date. Interest on any Bond or Parity Bond shall be paid to the person whose name shall appear in the Bond Register as the Owner of such Bond or Parity Bond as of the close of business on the Record Date. Such interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, to such Owner at his or her address as it appears on the Bond Register. In addition, upon a request in writing received by the Trustee on or before the applicable Record Date from an Owner of $1,000,000 or more in principal amount of the Bonds or of any issue of Parity Bonds, payment shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account within the United States of America designated by such Owner.
Section 2.6. Form of Bonds and Parity Bonds . The definitive Bonds may be printed from steel engraved or lithographic plates or may be typewritten. The Bonds and the certificate of authentication shall be substantially in the form attached hereto as Exhibit A, which form is hereby approved and adopted as the form of such Bonds and of the certificate of authentication. Each issue of Parity Bonds and the certificate of authentication therefor shall be in the form provided in the Supplemental Indenture for such issue of Parity Bonds.
Until definitive Bonds or Parity Bonds, as applicable, shall be prepared, the District may cause to be executed and delivered in lieu of such definitive Bonds or Parity Bonds temporary bonds in typed, printed, lithographed or engraved form and in fully registered form, subject to the same provisions, limitations and conditions as are applicable in the case of definitive Bonds or Parity Bonds, except that they may be in any denominations authorized by the District. Until exchanged for definitive Bonds or Pa rity Bonds, as applicable, any temporary bond shall be entitled and subject to the same benefits and provisions of this Indenture as definitive Bonds and Parity Bonds. If the District issues temporary Bonds or Parity Bonds, it shall execute and furnish definitive Bonds or Parity Bonds, as applicable, without unnecessary delay and thereupon any temporary Bond or Parity Item Title: 12.1
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Bond may be surrendered to the Trustee at its office, without expense to the Owner, in exchange for a definitive Bond or Parity Bond of the same issue, maturity, interest rate and principal amount in any authorized denomination. All temporary Bonds or Parity Bonds so surrendered shall be cancelled by the Trustee and shall not be reissued.
Section 2.7. Execution and Authentication. The Bonds and Parity Bonds shall be signed on behalf of the District by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Clerk of the City, or any duly appointed Deputy Clerk, in their capacity as officers of the District, and the seal of the City or the District (or a facsimile thereof) may be impressed, imprinted, engraved or otherwise reproduced thereon, and attested by the signature of the City Clerk of the City. In case any one or more of the officers who shall have signed or sealed any of the Bonds or Parity Bonds shall cease to be such officer before the Bonds or Parity Bonds so signed and sealed have been authenticated and delivered by the Trustee (including new Bonds or Parity Bonds delivered pursuant to the provisions hereof with reference to the transfer and exchange of Bonds or Parity Bonds or lost, stolen, destroyed or mutilated Bonds or Parity Bonds), such Bonds and Parity Bonds shall nevertheless be valid and may be authenticated and delivered as herein provided, and may be issued as if the person who signed or sealed such Bonds or Parity Bonds had not ceased to hold such office.
Only the Bonds as shall bear thereon such certificate of authentication in the form set forth in Exhibit A attached hereto shall be entitled to any right or benefit under this Indenture, and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Trustee.
Section 2.8. Bond Register . The Trustee will keep or cause to be kept, at its office, sufficient books for the registration and transfer of the Bonds and any Parity Bonds which shall upon reasonable prior notice be open to inspection by the District during all regular business hours, and, subject to the limitations set forth in Section 2.9 below, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be transferred on said Bond Register, Bonds and any Parity Bonds as herein provided.
The District and the Trustee may treat the Owner of any Bond or Parity Bond whose name appears on the Bond Register as the absolute Owner of that Bond or Parity Bond for any and all purposes and the District and the Trustee shall not be affected by any notice to the contrary. The District and the Trustee may rely on the address of the Owner as it appears in the Bond Register for any and all purposes. It shall be the duty of the Owner to give written notice to the Trustee of any change in the Owner’s address so that the Bond Register may be revised accordingly.
Section 2.9. Registration of Exchange or Transfer . Subject to the limitations set forth in the following paragraph, the registration of any Bond or Parity Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond or Parity Bond for cancellation at the office of the Trustee, accompanied by delivery of written instrument of transfer in a form acceptable to the Trustee and duly executed by the Owner or his or her duly authorized attorney.
Bonds or Parity Bonds may be exchanged at the office of the Trustee for a like aggregate principal amount of Bonds or Parity Bonds for other authorized denominations of the same maturity and issue. The Trustee shall not collect from the Owner any charge for any new Bond or Parity Bond Item Title: 12.1
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issued upon any exchange or transfer, but shall require the Owner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. Whenever any Bonds or Parity Bonds shall be surrendered for registration of transfer or exchange, the District shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds or a new Parity Bond or Parity Bonds, as applicable, of the same issue and maturity, for a like aggregate principal amount; provided that the Trustee shall not be required to register transfers or make exchanges of: (i) Bonds or Parity Bonds for a period of 15 days next preceding any selection of the Bonds or Parity Bonds to be redeemed; or (ii) any Bonds or Parity Bonds chosen for redemption.
Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds . If any Bond or Parity Bond shall become mutilated, the District shall execute, and the Trustee shall authenticate and deliver, a new Bond or Parity Bond of like tenor, date, issue and maturity in exchange and substitution for the Bond or Parity Bond so mutilated, but only upon surrender to the Trustee of the Bond or Parity Bond so mutilated. Every mutilated Bond or Parity Bond so surrendered to the Trustee shall be cancelled by the Trustee pursuant to Section 10.1 hereof. If any Bond or Parity Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is satisfactory to the Trustee and, if any indemnity satisfactory to the Trustee shall be given, the District shall execute and the Trustee shall authenticate and deliver a new Bond or Parity Bond, as applicable, of like tenor, maturity and issue, numbered and dated as the Trustee shall determine in lieu of and in substitution for the Bond or Parity Bond so lost, destroyed or stolen. Any Bond or Parity Bond issued in lieu of any Bond or Parity Bond alleged to be mutilated, lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other Bonds and Parity Bonds issued hereunder. The Trustee shall not treat both the original Bond or Parity Bond and any replacement Bond or Parity Bond as being Outstanding for the purpose of determining the principal amount of Bonds or Parity Bonds which may be executed, authenticated and delivered hereunder or for the purpose of determining any percentage of Bonds or Parity Bonds Outstanding hereunder, but both the original and replacement Bond or Parity Bond shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of delivering a new Bond or Parity Bond which has been mutilated, lost, destroyed or stolen, and which has matured, the Trustee may make payment with respect to such Bonds or Parity Bonds.
Section 2.11. Validity of Bonds and Parity Bonds . The validity of the authorization and issuance of the Bonds and any Parity Bonds shall not be affected in any way by any defect in any proceedings taken by the District for the financing of the Project, or by the invalidity, in whole or in part, of any contracts made by the District in connection therewith, and shall not be dependent upon the completion of the financing of the Project or upon the performance by any Person of his obligation with respect to the Project, and the recital contained in the Bonds or any Parity Bonds that the same are issued pursuant to the Act and other applicable laws of the State shall be conclusive evidence of their validity and of the regularity of their issuance.
Section 2.12. Book-Entry System. The Bonds shall be initially delivered in the form of a separate single fully registered Bond (which may be typewritten) for each maturity of the Bonds.
Upon initial delivery, the ownership of each such Bond shall be registered in the registration books kept by the Trustee in the name of the Nominee as nominee of the Depository. Except as provided in Section 2.14 hereof, all of the Outstanding Bonds shall be registered in the registration books kept by the Trustee in the name of the No minee. At the election of the District, any Parity Bonds may also be issued as book- entry bonds registered in the name of the Nominee as provided herein, in which Item Title: 12.1
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case the references in Sections 2.12 through 2.15 to “Bonds” shall be applicable to such Parity Bonds.
With respect to Bonds registered in the registration books kept by the Trustee in the name of the Nominee, the District and the Trustee shall have no responsibility or obligation to any such Participant or to any Person on behalf of which such a Participant holds an interest in the Bonds.
Without limiting the immediately preceding sentence, the District and the Trustee shall have no responsibility or obligation with respect to: (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds; (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the registration books kept by the Trustee, of any notice with respect to the Bonds, including any notice of redemption; (iii) the selection by the Depository and its Participants of the beneficial interests in the Bonds to be redeemed in the event that the Bonds are redeemed in part; or (iv) the payment to any Participant or any other Person, other than an Owner as shown in the registration books kept by the Trustee, of any amount with respect to principal of, premium, if any, or interest due with respect to the Bonds. The District and the Trustee may treat and consider the Person in whose name each Bond is registered in the registration books kept by the Trustee as the holder and absolute owner of such Bond for the purpose of payment of the principal of, premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest due on the Bonds only to or upon the order of the respective Owner, as shown in the registration books kept by the Trustee, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to satisfy and discharge fully the District’s obligations with respect to payment of the principal, premium, if any, and interest due on the Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the registration books kept by the Trustee, shall receive a Bond evidencing the obligation of the District to make payments of principal, premium, if any, and interest pursuant to this Indenture. Upon delivery by the Depository to the Trustee and the District of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such new nominee of the Depository.
Section 2.13. Representation Letter. In order to qualify the Bonds and any Parity Bonds which the District elects to register in the name of the Nominee for the Depository’s book- entry system, an Authorized Representative of the District is hereby authorized to execute from time to time and deliver to such Depository the Representation Letter. The execution and delivery of the Representation Letter shall not in any way limit the provisions of Section 2.12 or in any other way impose upon the District or the Trustee any obligation whatsoever with respect to persons having interests in the Bonds other than the Owners, as shown on the registration books kept by the Trustee.
The District agrees to take all action necessary to continuously comply with all representations made by it in the Representation Letter. In addition to the execution and delivery of the Representation Letter, the Authorized Representatives of the District are hereby authorized to take any other actions, not inconsistent with this Indenture, to qualify the Bonds for the Depository’s book-entry program.
Section 2.14. Transfers Outside Book-Entry System. In the event that: (i) the Depository determines not to continue to act as securities depository for the Bonds; or (ii) the District determines that the Depository shall no longer so act, then the District will discontinue the book -entry system with the Depository. If the District fails to identify another qualified securities depository to replace the Depository then the Bonds so designated shall no longer be restricted to being registered in the Item Title: 12.1
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registration books kept by the Trustee in the name of the Nominee, but shall be registered in whatever name or names Persons transferring or exchanging Bonds shall designate, in accordance with the provisions of Section 2.9 hereof.
Section 2.15. Payments to the Nominee . Notwithstanding any other provisions of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal, premium, if any, and interest due with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository.
Section 2.16. Initial Depository and Nominee. The initial Depository under this Indenture shall be The Depository Trust Company, New York, New York. The initial Nominee shall be Cede & Co., as Nominee of The Depository Trust Company, New York, New York.
ARTICLE III
CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds. (a) There are hereby created and established and shall be maintained by the Trustee the following funds and accounts:
(1) The Community Facilities District No. 2022-3 (Legado) of the City of Menifee Improvement Area No. 1 Special Tax Fund (the “Special Tax Fund”) (in which there shall be established and created an Interest Account, a Principal Account, a Redemption Account, a Reserve Account, and an Administrative Expense Account). (2) The Community Facilities District No. 2022-3 (Legado) of the City of Menifee Improvement Area No. 1 Rebate Fund (the “Rebate Fund”) (in which there shall be established a Rebate Account and an Alternate Penalty Account). (3) The Community Facilities District No. 2022-3 (Legado) of the City of Menifee Improvement Area No. 1 Acquisition and Construction Fund (the “Acquisition and Construction Fund”) (in which there shall be established a City Facilities Account, a Water Facilities Account, and a Costs of Issuance Account).
(4) The Community Facilities District No. 2022-3 (Legado) of the City of Menifee Improvement Area No. 1 Surplus Fund (the “Surplus Fund”).
The amounts on deposit in the foregoing funds, accounts and subaccounts shall be held by the Trustee. The Trustee shall invest and disburse the amounts in such funds, accounts and subaccounts in accordance with the provisions of this Article III and shall disburse investment earnings thereon in accordance with the provisions of Section 3.10 hereof.
In connection with the issuance of any Parity Bonds as described in Section 9.2, the Trustee, at the direction of an Authorized Representative of the District, may create new funds, accounts or subaccounts, or may create additional accounts and subaccounts within any of the foregoing funds and accounts for the purpose of separately accounting for the proceeds of the Bonds and any Parity Bonds.
Item Title: 12.1
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(b) The proceeds of the sale of the Bonds shall be received by the Trustee on behalf of the District and deposited and transferred as follows:
(1) $______ shall be transferred to the Costs of Issuance Account of the Acquisition and Construction Fund to pay the Costs of Issuance of the Bonds; (2) $______ shall be transferred to the Reserve Account of the Special Tax Fund to fund the Reserve Requirement; and
(3) $______ shall be transferred to the Ac quisition and Construction Fund of which $______ shall be deposited in the City Facilities Account and $______ shall be deposited in the Water Facilities Account.
Section 3.2. Deposits to and Disbursements from Special Tax Fund. (a) Except for Prepayments, which shall be deposited to the Redemption Account of the Special Tax Fund, the Trustee shall, on each date on which the Special Taxes are received from the District, deposit the Special Taxes in the Special Tax Fund to be held in trust for the Owners. The Trustee shall transfer the Special Taxes on deposit in the Special Tax Fund on the dates and in the amounts set forth in the following Sections, in the following order of priority, to:
(1) the Administrative Expense Account of the Special Tax Fund up to the Administrative Expenses Cap;
(2) the Interest Account of the Special Tax Fund;
(3) the Principal Account of the Special Tax Fund;
(4) the Redemption Account of the Special Tax Fund;
(5) the Reserve Account of the Special Tax Fund;
(6) the Administrative Expense Account of the Special Tax Fund to the extent that Administrative Expenses exceed or are expected to exceed the Administrative Expense Cap; (7) the Rebate Fund; and
(8) the Surplus Fund.
(b) At maturity of all of the Bonds and Parity Bonds and, after all principal and interest then due on the Bonds and Parity Bonds then Outstanding have been paid or provided for and any amounts owed to the Trustee have been paid in full, moneys in the Special Tax Fund and any accounts therein may be used by the District for any lawful purpose.
Section 3.3. Administrative Expense Account of the Special Tax Fund . The Trustee shall transfer from the Special Tax Fund and deposit in the Administrative Expense Account of the Special Tax Fund from time to time amounts necessary to make timely payment of Administrative Expenses as set forth in a Certificate of an Authorized Representative of the District; provided, however, that, except as set forth in the following sentence, the total amount transferred with respect to a Bond Year shall not exceed the Administrative Expenses Cap until such time as there has been Item Title: 12.1
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deposited to the Interest Account and the Principal Account an amount, together with any amounts already on deposit therein, that is sufficient to pay the interest and principal on all Bonds and Parity Bonds due in such Bond Year and to restore the Reserve Account to the Reserve Requirement.
Notwithstanding the foregoing, amounts in excess of the Administrative Expenses Cap may be transferred to the Administrative Expense Account to the extent necessary to collect delinquent Special Taxes. Moneys in the Administrative Expense Account of the Special Tax Fund may be invested in any Authorized Investments as directed in writing by an Authorized Representative of the District and shall be disbursed as directed in a Certificate of an Authorized Representative.
Section 3.4. Interest Account and Principal Account of the Special Tax Fund. The principal of and interest due on the Bonds and any Parity Bonds until maturity, other than principal due upon redemption, shall be paid by the Trustee from the Principal Account and the Interest Account of the Special Tax Fund, respectively.
For the purpose of assuring that the payment of principal of and interest on the Bonds and any Parity Bonds will be made when due, after making the transfer required by Section 3.3, at least one Business Day prior to each March 1 and September 1, the Trustee shall make the following transfers from the Special Tax Fund first to the Interest Account and then to the Principal Account; provided, however, that to the extent that deposits have been made in the Interest Account or the Principal Account from the proceeds of the sale of an issue of the Bonds or any Parity Bonds, or otherwise, the transfer from the Special Tax Fund need not be made; and provided, further, that, if amounts in the Special Tax Fund (exclusive of the Reserve Account and the Administrative Expense Account) are inadequate to make the foregoing transfers, then any deficiency shall be made up by transfers from the Reserve Account:
(a) To the Interest Account, an amount such that the balance in the Interest Account one Business Day prior to each Interest Payment Date shall be equal to the installment of interest due on the Bonds and any Parity Bonds on said Interest Payment Date and any installment of interest due on a previous Interest Payment Date which remains unpaid. Moneys in the Interest Account shall be used for the payment of interest on the Bonds and any Parity Bonds as the same become due. (b) To the Principal Account, an amount such that the balance in the Principal Account one Business Day prior to September 1 of each year, commencing September 1, 2026, shall equal the principal payment due on the Bonds and any Parity Bonds maturing on such September 1 and any principal payment due on a previous September 1 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds and any Parity Bonds as the same become due at maturity.
Section 3.5. Redemption Account of the Special Tax Fund. (a) With respect to each September 1 on which a Sinking Fund Payment is due, after the deposits have been made to the Administrative Expense Account, the Interest Account and the Principal Account of the Special Tax Fund as required by Sections 3.3 and 3.4 hereof, the Trustee shall next transfer into the Redemption Account of the Special Tax Fund from the Special Tax Fund the amount needed to make the balance in the Redemption Account one Business Day prior to each September 1 on which a Sinking Fund Payment is due equal to the Sinking Fund Payment due on any Outstanding Bonds and Parity Bonds on such September 1; provided, however, that, if amounts in the Special Tax Fund are inadequate to make the foregoing transfers, then any deficiency shall be made up by an immediate transfer from the Reserve Account, if funded, pursuant to Section 3.6 Item Title: 12.1
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below. Moneys so deposited in the Redemption Account shall be used and applied by the Trustee to call and redeem Term Bonds in accordance with the Sinking Fund Payment schedules set forth in Section 4.1(b) hereof, and to redeem Parity Bonds in accordance with any Sinking Fund Payment schedule in the Supplemental Indenture for such Parity Bonds. (b) After making the deposits to the Administrative Expense Account, the Interest Account and the Principal Account of the Special Tax Fund pursuant to Sections 3.3 and 3.4 above and to the Redemption Account for Sinking Fund Payments then due pursuant to subparagraph (a) of this Section, and in accordance with the District’s election to call Bonds for optional redemption as set forth in Section 4.1(a) hereof, or to call Parity Bonds for optional redemption as set forth in any Supplemental Indenture for Parity Bonds, the Trustee shall transfer from the Special Tax Fund and deposit in the Redemption Account moneys available for the purpose and sufficient to pay the principal and the premiums, if any, payable on the Bonds or Parity Bonds called for optional redemption; provided, however, that amounts in the Special Tax Fund (other than the Administrative Expense Account therein) may be applied to optionally redeem Bonds and Parity Bonds only if immediately following such redemption the amount in the Reserve Account will equal the Reserve Requirement.
(c) Prepayments deposited to the Redemption Account shall be applied on the redemption date established pursuant to Section 4.1(c) hereof to the payment of the principal of, premium, if any, and interest on the Bonds and Parity Bonds to be redeemed with such Prepayments. (d) Moneys set aside in the Redemption Account shall be used solely for the purpose of redeeming Bonds and Parity Bonds and shall be applied on or after the redemption date to the payment of principal of and premium, if any, on the Bonds or Parity Bonds to be redeemed upon presentation and surrender of such Bonds or Parity Bonds, and, in the case of an optional redemption or a special mandatory redemption from Prepayments, to pay the interest thereon; provided, however, that in lieu or partially in lieu of such call and redemption, moneys deposited in the Redemption Account may be used to purchase Outstanding Bonds or Parity Bonds in the manner hereinafter provided. Purchases of Outstanding Bonds or Parity Bonds may be made by the District at public or private sale as and when and at such prices as the District may in its discretion determine but only at prices (including brokerage or other expenses) not more than par plus accrued interest, plus, in the case of moneys set aside for an optional redemption or a special mandatory redemption, the premium applicable at the next following call date according to the premium schedule established pursuant to Section 4.1(a) or 4.1(c) hereof, as applicable, or in the case of Parity Bonds the premium established in any Supplemental Indenture. Any accrued interest payable upon the purchase of Bonds or Parity Bonds may be paid from the amount reserved in the Interest Account of the Special Tax Fund for the payment of interest on the next following Interest Payment Date.
Section 3.6. Reserve Account of the Special Tax Fund. There shall be maintained in the Reserve Account of the Special Tax Fund an amount equal to the Reserve Requirement. The Reserve Requirement may be satisfied in whole or in part by cash, a Reserve Policy, or a combination thereof. The amounts in the Reserve Account shall be applied as follows:
(a) Moneys in the Reserve Account shall be used solely for the purpose of paying the principal of, including Sinking Fund Payments, and interest on the Bonds and any Parity Bonds when due in the event that the moneys in the Interest Account and the Principal Account of the Special Tax Fund are insufficient therefor or moneys in the Redemption Account of the Special Tax Fund are insufficient to make a Sinking Fund Payment when due and for the purpose of making any required Item Title: 12.1