Mountain House City Council
October 14, 2026

5. The execution and delivery of the Authority Agreements and compliance with the provisions thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department, division, agency or instrumentality of either thereof, any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, trust agreement, contract, agreement or other instrument to which the Authority is a party or is otherwise subject or bound in a manner that would materially adversely affect the Authority’s performance under the Authority Agreements.

6. Based upon my examination, and without having undertaken to determine independently or assuming any responsibility for the accuracy or completeness or fairness of the statements contained in the Preliminary Official Statement and the Official Statement, as a matter of fact and not opinion, no facts have come to my attention which would cause me to believe that the Preliminary Official Statement as of its date and as of the date of the Purchase Contract and the Official Statement as of its date and as of the date hereof with respect to information about the Authority only contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

This opinion is based on such examination of the laws of the State of California as I have deemed relevant for the purposes of this opinion. I have not considered the effect, if any, of the laws of any other jurisdiction upon matters covered by this opinion. I have assumed the genuineness of all documents and signatures, presented to me. I have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in such documents. I express no opinion as to the status of the Bonds, the interest thereon or the Authority Agreements under any federal securities laws or any state securities or “Blue Sky” law or any federal, state or local tax law. Without limiting any of the foregoing, I express no opinion as to any matter other than as expressly set forth above.

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I am furnishing this opinion as General Counsel to the Authority. Except for the Authority and the District, no attorney-client relationship has existed or exists between me and the addressees hereof in connection with the Bonds or by virtue of this opinion. This opinion is rendered solely in connection with the financing described herein, and may not be relied upon by you for any other purpose. I disclaim any obligation to update this opinion. This opinion shall not extend to, and may not be used, quoted, referred to, or relied upon by any other person, firm, corporation or other entity without my prior written consent.

Respectfully submitted,
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EXHIBIT E

OPINION OF CITY ATTORNEY
______, 2026
City of Mountain House
251 E. Main Street
Mountain House, California 95391
Piper Sandler & Co.
50 California Street, Suite 3100
San Francisco, California 94111
with reference to
$__________

MOUNTAIN HOUSE FINANCING AUTHORITY

UTILITY SYSTEMS REVENUE BONDS
SUBORDINATE SERIES 2026
Ladies and Gentlemen:

In my capacity as the City Attorney of the City of Mountain House (the “City”), in connection with the issuance by the Mountain House Financing Authority (the “Authority”) of the above-referenced bonds (the “Bonds”) pursuant to a Trust Agreement of the Bonds (the “Trust Agreement”), dated as of November 1, 2026, by and between the Authority and Computershare Trust Company, N.A., as trustee, I have examined Resolution No. ______ of the City Council of the City adopted on ______, 2026 (the “City Resolution”), the Bond Purchase Contract, dated ______, 2026 (the “Purchase Contract”), by and among Piper Sandler & Co., as underwriter, the Authority and the City, the Master Contracts and the 2026 Supplemental Contracts (each as defined in the Trust Agreement), and the Continuing Disclosure Certificate of the City dated the date hereof relating to the Bonds (collectively, the “City Agreements”), as well as the Preliminary Official Statement dated ______, 2026 and the Official Statement dated ______, 2026 relating to the Bonds, and such documents as I have deemed relevant and necessary as the basis for the opinion set forth herein.

Capitalized terms that are used and not otherwise defined herein have the same meanings as assigned to them in the Purchase Contract.

Relying on my examination as described above and pertinent law and subject to the limitations and qualifications set forth hereinafter, I am of the following opinion:

1. The City is a general law city and municipal corporation organized and existing under and by virtue of the Constitution and laws of the State of California, and has all necessary power and authority to adopt the City Resolution and to enter into and perform its duties under the City Agreements.

2. The City Resolution was duly adopted at a regular meeting of the City Council of the City that was duly called and held on ______, 2026 pursuant to law, with all required public notice and at which a quorum was present and acting throughout. The City Resolution is in full force and effect and has not been amended, rescinded or repealed.

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3. The City has duly authorized, executed and delivered the City Agreements.

Assuming due authorization, execution and delivery by and enforceability against the other parties thereto, if and as necessary, the City Agreements constitute legal, valid and binding agreements of the City enforceable against the City in accordance with their terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, debt adjustment, fraudulent conveyance or transfer, moratorium, reorganization or other laws affecting the enforcement of creditors’ rights generally and equitable remedies if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and limitations on remedies against public agencies.

4. Except as disclosed in the Official Statement, there is no action, suit or proceeding before or by any court, public board or body pending (with service of process having been duly accomplished on the City) and, to the best of my knowledge, there is no action, suit or proceeding threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City or the titles of its officers to their respective offices; (b) in any way question or affect the validity or enforceability of the City Agreements or the Bonds; (c) render illegal, invalid or unenforceable the City Agreements or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds to which the City is a party; or (iv) have a material adverse effect on the financial condition of the City or the ability of the City to make payments from and pledge the Pledged Facility Component Revenues.

5. The execution and delivery of the City Agreements and compliance with the provisions thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department, division, agency or instrumentality of either thereof, any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, trust agreement, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound in a manner that would materially adversely affect the City’s performance under the City Agreements.

6. Based upon my examination, and without having undertaken to determine independently or assuming any responsibility for the accuracy or completeness or fairness of the statements contained in the Preliminary Official Statement and the Official Statement, as a matter of fact and not opinion, no facts have come to my attention which would cause me to believe that the Preliminary Official Statement as of its date and as of the date of the Purchase Contract and the Official Statement as of its date and as of the date hereof (except for: (1) the expressions of opinion, the assumptions, the projections, the financial statements, or other financial, numerical, economic, demographic statistical or engineering data, forecasts, charts and estimates contained in the Official Statement; (2) any CUSIP numbers or information relating thereto; (3) any information with respect to DTC, DTC’s book-entry system, the Insurer, the Policy or the Reserve Surety, (4) any information with respect to the Authority) contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

This opinion is based on such examination of the laws of the State of California as I have deemed relevant for the purposes of this opinion. I have not considered the effect, if any, of the laws of any other jurisdiction upon matters covered by this opinion. I have assumed the genuineness of all documents and signatures, presented to me. I have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in such documents. I express no opinion as to the status of the Bonds, the interest thereon or the City Agreements under any federal securities laws or any state securities or “Blue Sky” law or any federal, state or local tax Item 8.1
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law. Without limiting any of the foregoing, I express no opinion as to any matter other than as expressly set forth above.

I am furnishing this opinion as General Counsel to the City. Except for the City and the Authority, no attorney-client relationship has existed or exists between me and the addressees hereof in connection with the Bonds or by virtue of this opinion. This opinion is rendered solely in connection with the financing described herein, and may not be relied upon by you for any other purpose. I disclaim any obligation to update this opinion. This opinion shall not extend to, and may not be used, quoted, referred to, or relied upon by any other person, firm, corporation or other entity without my prior written consent.

Respectfully submitted,
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EXHIBIT F
$__________

MOUNTAIN HOUSE FINANCING AUTHORITY

UTILITY SYSTEMS REVENUE BONDS
SUBORDINATE SERIES 2026
UNDERWRITER’S CERTIFICATE
The undersigned, on behalf of Piper Sandler & Co. (the “Underwriter”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”).

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

2. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule I hereto as the “General Rule Maturities.”
(b) Issuer means the Mountain House Financing Authority. (c) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(d) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.

The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (e) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is ______, 2026. (f) Underwriter means: (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public; and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Underwriter’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel in connection with rendering their opinion that the interest on the Bonds is excluded from gross income Item 8.1
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for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

PIPER SANDLER & CO.

By:

Name:

Dated: ______, 2026
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Schedule I

SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING

PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
(Attached)
Item 8.1
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PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER [23], 2026 NEW ISSUE – BOOK-ENTRY ONLY RATINGS:

S&P (Insured): “___”
S&P (Underlying): “___”
In the opinion of Jones Hall LLP, as Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the 2026 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the 2026 Bonds may be subject to the corporate alternative minimum tax. In the further opinion of Bond Counsel, interest on the 2026 Bonds is exempt from California personal income taxes. See “TAX MATTERS.” $_______________*

MOUNTAIN HOUSE FINANCING AUTHORITY

UTILITY SYSTEMS REVENUE BONDS
SUBORDINATE SERIES 2026
Dated: Date of Delivery Due: December 1, as shown on inside cover Authority; Purpose. The Mountain House Financing Authority (the “Authority”) is issuing its Utility Systems Revenue Bonds Subordinate Series 2026 (the “2026 Bonds”) pursuant to the Marks Roos Local Bond Pooling Act of 1985 (commencing with Section 6584 of the California Government Code) (the “Act”), a Resolution adopted by the Board of Directors of the Authority, and a Trust Agreement, dated as of November 1, 2026 (the “Trust Agreement”), between the Authority and Computershare Trust Company, N.A., as trustee (the “Trustee”). The 2026 Bonds are being issued to (i) provide funds to repay developers for the cost of improvements to the water system, wastewater system, and storm drain system (each, a “System”) of the City of Mountain House (the “City”), (ii) fund a Reserve Fund for the 2026 Bonds with a reserve fund insurance policy, as described below, (iii) fund capitalized interest on the 2026 Bonds through December 1, 2027, and (iv) pay certain costs of issuing the 2026 Bonds.

Payments. The 2026 Bonds are dated the date of delivery and are being issued as Current Interest Bonds and Capital Appreciation Bonds (each as defined herein), or a combination thereof. The Current Interest Bonds accrue interest at the rates set forth on the inside cover page hereof, payable semiannually on each June 1 and December 1 of each year, commencing June 1, 2027. The Capital Appreciation Bonds accrete interest at the accretion rates set forth on the inside cover page hereof, compounded semiannually on June 1 and December 1 of each year, commencing June 1, 2027, until payment of the accreted value thereof at maturity or upon earlier redemption.

Book-Entry Only. The 2026 Bonds will be issued in book-entry form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). Purchasers will not receive certificates representing their interest in the 2026 Bonds. Individual purchases will be in principal amounts of $5,000 or in any integral multiples of $5,000. Payments of principal and interest 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 2026 Bonds.

Security for the 2026 Bonds. The 2026 Bonds are limited obligations of the Authority payable primarily from the Authority Revenues (described herein), consisting of payments made by the City pursuant to a Master Installment Purchase Contract for each System, as supplemented (each, as supplemented, a “Master Contract”) and described herein. Payments made to the Authority under each respective Master Contract are special limited obligations of the City, payable from and secured by, without cross-collateralization among the three agreements or Systems, a pledge of and lien on the Pledged Facility Component Revenues of such System (as defined herein) on a subordinate lien basis, all as described herein. See “SECURITY FOR THE 2026 BONDS.” Reserve Fund. Under the Trust Agreement, the Trustee will establish a Reserve Fund and within such fund a “Wastewater Reserve Account,” “Water Reserve Account” and “Storm Drain Reserve Account” (each, a “Reserve Account”) relating to obligations of each System thereunder. All money in (or available to) any Reserve Account will be used and withdrawn by the Trustee solely for the purpose of replenishing the Interest Account or the Principal Account (in such order) in the event of any deficiency at any time in any of the installment payments relating to such Reserve Account, and each Reserve Account is only available to cover a deficiency in the payments attributable to the applicable System. See “SECURITY FOR THE 2026 BONDS – Reserve Fund.”
Additional Obligations of the City. The City has obligations issued in 2019 and in 2020 payable from the Pledged Facility Component Revenues for each System on a basis that is senior to the payment of the installment payments securing the 2026 Bonds, and has subordinate obligations issued in 2020 and in 2023 payable on a parity basis to the installment payments securing the 2026 Bonds. The City may, subject to certain conditions, incur additional subordinate obligations in the future with respect to each of the Systems. See “SECURITY FOR THE 2026 BONDS – Parity Obligations and Subordinate Parity Obligations.”
Redemption. The 2026 Bonds are subject to optional and mandatory redemption prior to maturity as set forth herein. See “THE 2026 BONDS – Redemption of the 2026 Bonds” herein.

Bond Insurance and Reserve Fund Insurance. The scheduled payment of principal of and interest on the 2026 Bonds when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the 2026 Bonds by __________ (the “Insurer”). The City will determine whether to insure all, or a portion, of the 2026 Bonds at the time of pricing. The Insurer will also issue a reserve fund insurance policy for deposit into the Reserve Fund being established for the 2026 Bonds in the aggregate amount needed to fund all three reserve accounts and allocated among the three reserve accounts therein.
[INSURER LOGO]
THE 2026 BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM AND SECURED SOLELY BY THE AUTHORITY REVENUES, AND CERTAIN PROCEEDS OF THE 2026 BONDS PLEDGED THEREFOR IN THE TRUST AGREEMENT AND ARE NOT SECURED BY A

LEGAL OR EQUITABLE PLEDGE OF, OR CHARGE OR LIEN UPON ANY PROPERTY OF THE AUTHORITY, THE CITY OR THE COUNTY OF SAN JOAQUIN (THE “COUNTY”), EXCEPT THE AUTHORITY REVENUES. NEITHER THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE 2026 BONDS CONSTITUTES A DEBT, LIABILITY OR OBLIGATION OF THE CITY OR THE COUNTY.

This cover page contains information for general reference only. It is not a summary of the security or terms of this issue. Investors must read the entire Official Statement, including the section entitled “RISK FACTORS,” for a discussion of special factors which should be considered, in addition to the other matters set forth herein, in considering the investment quality of the 2026 Bonds.

The 2026 Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Jones Hall LLP, San Mateo, California, as Bond Counsel. Certain legal matters will also be passed upon for the Authority and the City by Jones Hall LLP, as Disclosure Counsel.

Certain legal matters will be passed upon for the Underwriter by Stradling, Yocca Carlson & Rauth LLP, as counsel to the Underwriter, and for the Authority and the City by Redwood Public Law as City Attorney. It is anticipated that the 2026 Bonds, in book-entry only form, will be available through the facilities of DTC on or about November ___, 2026.
[PIPER SANDLER LOGO]
Dated: __________, 2026
______________
* Preliminary, subject to change.

This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a 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 prior to registration or qualification under the securities laws of such jurisdiction.

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MATURITY SCHEDULE
$___________

MOUNTAIN HOUSE FINANCING AUTHORITY

UTILITY SYSTEMS REVENUE BONDS
SUBORDINATE SERIES 2026
(Base CUSIP†: __________)
$___________ Current Interest Bonds
Maturity Principal Interest
(December 1) Amount Rate Yield Price CUSIP†
$________ ___% Term Subordinate Bond due December 1, 20__, Yield ___%, Price %, CUSIP†_________ $___________ Denominational Amount
($___________ Maturity Value)
Capital Appreciation Bonds
Maturity
(December 1)
Denominational
Amount
Accretion
Rate
Yield to
Maturity
Maturity
Value CUSIP†
† CUSIP is a Registered Trademark of The American Bankers Association. FactSet Research Systems Inc. operates The CUSIP Service Bureau for the ABA. These data are not intended to create a database and do not serve in any way as a substitute for the CUSIP services.

Neither the Authority, the City nor the Underwriter is responsible for the selection or correctness of the CUSIP numbers set forth above.

Item 8.1
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MOUNTAIN HOUSE FINANCING AUTHORITY/

CITY OF MOUNTAIN HOUSE
(San Joaquin County, California)
Board of Directors / City Council
Andy Su, Chair
Ronna Green, Vice Chair
Matt Disko, Member
Dan Harrison, Member
Bernice King Tingle, Member
Authority / City Staff
Steven J. Pinkerton, Executive Director / City Manager
Sarah Ragsdale, Treasurer / Administrative Services Director Thomas Retchless, City Finance Director
Margaret Wimberly, Secretary / City Clerk
John Bakker of Redwood Public Law, General Counsel / City Attorney ___________________________________________________

SPECIAL SERVICES
Municipal Advisor
Kosmont Financial Services
El Segundo, California
Bond Counsel and Disclosure Counsel
Jones Hall LLP
San Mateo, California
Trustee
Computershare Trust Company, N.A.

San Francisco, California
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GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement. This Official Statement is submitted in connection with the sale of the 2026 Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not to be construed as a contract with the purchasers of the 2026 Bonds.

Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the Authority or the City, in any press release and in any oral statement made with the approval of an authorized officer of the City, the words or phrases “will likely result,” “are expected to”, “will continue”, “is anticipated”, “estimate”, “project,” “forecast”, “expect”, “intend” and similar expressions identify “forward looking statements.” Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forwardlooking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material. 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, give rise to any implication that there has been no change in the affairs of the Authority or the City since the date hereof.

Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the Authority or the City to give any information or to make any representations in connection with the offer or sale of the 2026 Bonds other than those contained herein and if given or made, such other information or representation must not be relied upon as having been authorized by the Authority, the City 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 2026 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

Involvement of Underwriter. The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, their 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 opinions herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority or the City since the date hereof. All summaries of the documents referred to in this Official Statement, 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.

Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effect transactions which stabilize or maintain the market price of the 2026 Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriter may offer and sell the 2026 Bonds to certain dealers and others at prices lower than the public offering prices set forth on the cover page hereof and said public offering prices may be changed from time to time by the Underwriter.

Website. The City maintain an Internet website; however, the information on that website is not incorporated into this Official Statement.

THE 2026 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, IN RELIANCE UPON AN EXCEPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT. THE 2026 2026 BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

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Item 8.1
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TABLE OF CONTENTS
INTRODUCTION ...............................................1 FINANCING PLAN.............................................5 Financing of Improvements............................5
Estimated Sources and Uses of Funds..........6
THE 2026 BONDS.............................................7 Description of the 2026 Bonds.......................7
Redemption of the 2026 Bonds......................8
Transfer and Exchange................................10 Book-Entry Only System..............................11
DEBT SERVICE SCHEDULE..........................12
SECURITY FOR THE 2026 BONDS ...............13
Pledge of Authority Revenues......................13
Pledged Facility Component Revenues.......13
Flow of Funds under Master Contracts;
Lockbox Agreement.................................14
Revenue Fund; Flow of Funds Under Trust
Agreement ...............................................15 Reserve Fund...............................................16 Pledged Facility Component Rate Covenant17
Operations and Maintenance Rate Covenant18
Parity Obligations and Subordinate Parity
Obligations ...............................................20 BOND INSURANCE ........................................23 THE MOUNTAIN HOUSE COMMUNITY.........24
General ........................................................24 Development Plan........................................24 Current Status of Development....................24
Historic Assessed Valuation.........................26
Infrastructure Development and Financing ..26
THE AUTHORITY............................................28 THE CITY.........................................................28 General ........................................................28 City Council..................................................29 Key City Personnel.......................................29 Rate Setting Procedures for the Systems....30
Collection Procedures..................................30

PLEDGED FACILITY COMPONENT
REVENUES .................................................32 General ........................................................32 Pledged Facility Component Charges and
Connections .............................................32 Historic PFC Revenues................................33 Historic Billings and Collections ...................34 Largest Customers.......................................35 Billable Units and Monthly Revenues...........37
Historical PFC Revenues and Debt Service
Coverage .................................................40 Projected PFC Revenues and Debt Service
Coverage .................................................40 WATER SYSTEM ............................................44 General ........................................................44 Water Supply ...............................................44 Water Purchases and Deliveries .................45
Water Quality Compliance ...........................46
Rates and Charges......................................46 Historic Operating Results ...........................49 Projected Operating Results........................50
WASTEWATER SYSTEM ...............................51
General ........................................................51 Rates and Charges......................................52 Historic Operating Results ...........................54 Projected Operating Results........................55
STORM DRAIN SYSTEM................................56
General ........................................................56 Rates and Charges......................................56 Historic Operating Results ...........................57 Projected Operating Results........................58
GENERAL FUND FINANCES OF THE CITY..59
Historic General Fund Subsidy of Systems .59
General Fund Revenue Sources .................59
General Fund Revenues and Expenses......59
RISK FACTORS ..............................................61 City Demand and Growth ............................61
Expenses .....................................................61 Risks Related to Projections........................61
Constitutional Limit on Fees and Charges...61
Limited Recourse on Default .......................62
Limitations on Remedies Available..............62
Bankruptcy of the City..................................63 No Obligation to Tax ....................................64 Seismic, Topographic and Climatic
Conditions................................................64 Proposition 218............................................66 Cyber Security .............................................67 Impact of State Budget ................................68 Risks Related to Subordinate Bonds ...........68
Loss of Tax Exemption ................................68 Rating Downgrades .....................................68 Secondary Market Risk................................68 COVID-19 Pandemic and Other Global
Events......................................................69 TAX MATTERS................................................69 NO LITIGATION ..............................................71 RATINGS.........................................................71 MUNICIPAL ADVISOR....................................72 PROFESSIONAL FEES ..................................72
LEGAL OPINION.............................................72 UNDERWRITING ............................................72 CONTINUING DISCLOSURE..........................72
ADDITIONAL INFORMATION.........................73
APPENDIX A – City Audited Financial Statements for the Fiscal Year Ended June 30, 2025 Item 8.1
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APPENDIX B – Summary of Principal Legal Documents
APPENDIX C – General Demographic Information about the Mountain House Area APPENDIX D – Proposed Form of Opinion of Bond Counsel
APPENDIX E – Form of Continuing Disclosure Certificate
APPENDIX F – DTC and the Book-Entry System
APPENDIX G – Specimen Municipal Bond Insurance Policy
APPENDIX H – Table of Accreted Values
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$___________*

MOUNTAIN HOUSE FINANCING AUTHORITY

UTILITY SYSTEMS REVENUE BONDS
SUBORDINATE SERIES 2026

INTRODUCTION
General
The Mountain House Financing Authority (the “Authority”) is issuing the abovereferenced bonds (“2026 Bonds”) pursuant to the Marks Roos Local Bond Pooling Act of 1985 (commencing with Section 6584 of the California Government Code) (the “Act”), a Resolution adopted by the City Council of the Authority on [October 14], 2026 and a Trust Agreement dated as of November 1, 2026 (the “Trust Agreement”) between the Authority and Computershare Trust Company, N.A., as trustee (the “Trustee”).

This Official Statement makes reference to documents, laws, prior bonds and other written material. Such references do not purport to be complete, comprehensive or definitive and are qualified in their entirety by reference to each such document and provision. All capitalized terms used in this Official Statement, unless noted otherwise, have the meanings set forth in the documents described herein. See “APPENDIX B – Summary of Principal Legal Documents.” Current Interest Bonds and Capital Appreciation Bonds
The 2026 Bonds are dated the date of delivery and are being issued as Current Interest Bonds and Capital Appreciation Bonds (each as defined herein), or a combination thereof. The Current Interest Bonds accrue interest at the rates set forth on the inside cover page hereof, payable semiannually on each June 1 and December 1 of each year, commencing June 1, 2027.

The Capital Appreciation Bonds accrete interest at the accretion rates set forth on the inside cover page hereof, compounded semiannually on June 1 and December 1 of each year, commencing June 1, 2027, until payment of the accreted value thereof at maturity or upon earlier redemption.

See “THE 2026 BONDS” and “APPENDIX H – Table of Accreted Values.” The Authority
The Authority was established pursuant to a Joint Exercise of Powers Agreement dated June 1, 2019, between the City of Mountain House (the “City”), as successor-in-interest to the Mountain House Community Services District (the “District”), and the California Statewide Communities Development Authority. The Authority was created for the purpose of assisting in the financing and refinancing of certain public programs and projects of the City, and for the * Preliminary; subject to change.

Item 8.1
Mountain House                                               Page 268 of 618 2 purpose of aiding in the financing and refinancing of public capital improvements as defined in the Act. The Board of Directors of the Authority are the same persons serving as the City Council of the City.

The City, Developers and the Systems
The City was incorporated by vote of its citizens at an election held on March 5, 2024, becoming the 483rd incorporated city admitted to the State of California on July 1, 2024. As part of the incorporation process, the District became a subsidiary district of the City, and the City succeeded to all of the obligations of the District under the Master Contracts (defined herein). The City is located in San Joaquin County (the “County”), and is governed by a five member city council (the “City Council”), which appoints a city manager (the “City Manager”).

The Mountain House community, as conceived by the original developer, Trimark Communities, LLC, a California limited liability company (together with its affiliates, “Trimark”), was approved for development under the County’s Mountain House Master Plan (the “Master Plan”) for the community, and three specific plans thereunder. Development within Mountain House has been ongoing since 1996 and is roughly half built out, with over 7,000 homes currently occupied and further development ongoing. Essential public services, including streets, public safety, fire and emergency services, storm drain, water and sewer, are provided by the City, as required by the Master Plan. The population of the Mountain House community was estimated by the Department of Finance at 30,687 as of January 1, 2026.

Pursuant to a series of agreements between various developers and the City (as successor-in-interest to the District), the developers and their assigns agreed to construct water, wastewater and storm drain facilities necessary to develop Mountain House and are to be reimbursed for the costs of oversizing such facilities by the City through the application of the Pledged Facility Component Revenues (defined below), either in the form of periodic payments or from the proceeds of revenue bonds issued for that purpose secured by those designated revenues. The City has been acquiring from developers (and their successors), and now owns and operates, facilities for (i) the collection, treatment and supply of water (the “Water System”) within the service area of the City, (ii) the collection and treatment of wastewater (the “Wastewater System”) within the service area of the City, and (iii) a storm drain system (the “Storm Drain System” and together, the “Systems”) within the service area of the City. Additional information on each System is included herein under the headings, “WATER SYSTEM,” “WASTEWATER SYSTEM,” and “STORM DRAIN SYSTEM.”
Purpose
The 2026 Bonds are being issued to (i) provide funds to repay developers for the cost of improvements to each System, (ii) fund a Reserve Fund for the 2026 Bonds with a reserve fund insurance policy, as described below, (iii) fund capitalized interest on the 2026 Bonds through December 1, 2027, and (iv) pay certain costs of issuing the 2026 Bonds.

Security for the 2026 Bonds
The 2026 Bonds are limited obligations of the Authority payable primarily from the “Authority Revenues,” as defined in the Trust Agreement, consisting principally of installment payments (“2026 Payments”) made by the City pursuant to the 2026 Supplements to the Master Contracts for the project being financed with the 2026 Bonds. Payments made to the Authority under the each respective Master Contract are special limited obligations of the City, payable Item 8.1
Mountain House                                               Page 269 of 618 3 pursuant to each Master Contract from and secured by, without cross-collateralization among the three agreements or Systems, a subordinate lien and pledge of the Pledged Facility Component Revenues.
“Pledged Facility Component Revenues” means, as to each System, all revenues and income derived from the Pledged Facility Component of the System. With respect to each System, the “Pledged Facility Component” means the portion of monthly rates designated as the “Pledged Facility Component” received by the City for service provided by such System, as described in the Project Acquisition Agreements (as defined herein) and the Utility Ordinance (as defined herein). Each System has a separate Pledged Facility Component and there is no crosscollateralization between the Systems. Under a Lockbox Agreement (defined herein), all income and revenues attributable to the City’s utility operations are deposited to various lockbox accounts and used only as specified in the Lockbox Agreement. See “SECURITY FOR THE 2026 BONDS – Flow of Funds under Master Contracts; Lockbox Agreement.” The 2026 Payments are payable from and secured by a subordinate lien on the Pledged Facility Component Revenues of each System pursuant to the Master Installment Contracts. The City has obligations issued in 2019 and in 2020 payable from the Pledged Facility Component Revenues for each System on a basis that is senior to the payment of the installment payments securing the 2026 Bonds. The 2026 Payments are subordinate to the aforementioned 2019 and 2020 obligations, and are payable on a parity basis to installment payments with respect to each of the Systems securing an additional series of bonds issued in 2020 and in 2023. The City has covenanted not to issue additional obligations secured on parity to the senior obligations, but the City may, subject to certain conditions, in the future incur additional subordinate obligations secured on parity to the subordinate lien securing the 2026 Payments. See “SECURITY FOR THE 2026 BONDS – Parity Obligations and Subordinate Parity Obligations.” Reserve Fund
Under the Trust Agreement, the Trustee will establish a Reserve Fund for the 2026 Bonds and within such fund a “Wastewater Reserve Account,” “Water Reserve Account” and “Storm Drain Reserve Account” (each, a “Reserve Account”) relating to obligations of each System.

All money in (or available to) any Reserve Account will be used and withdrawn by the Trustee solely for the purpose of replenishing the Interest Account or the Principal Account (in such order), in the event of any deficiency at any time in any of the 2026 Payments corresponding to such Reserve Account. Each Reserve Account shall be available only to cover a deficiency in amounts payable by the respective System. See “SECURITY FOR THE 2026 BONDS – Reserve Fund.” Bond Insurance and Reserve Fund Insurance
The scheduled payment of principal of and interest on the 2026 Bonds when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the 2026 Bonds (the “2026 Insurance Policy”) by ___________ (the “Insurer”). The City will determine whether to insure all, or a portion, of the 2026 Bonds at the time of pricing. The Insurer will also issue a reserve fund insurance policy for deposit into the Reserve Fund being established for the 2026 Bonds (the “2026 Reserve Policy”), in the aggregate amount needed to fund all three reserve accounts and allocated among the three reserve accounts therein.

Item 8.1
Mountain House                                               Page 270 of 618 4 Pledged Facility Component Rate Covenant
Pursuant to the Master Installment Contracts, the City (as successor-in-interest to the District) has covenanted to fix, prescribe and collect rates, fees and charges for the services furnished by each of the Water System, Wastewater System and Storm Drain System during each Fiscal Year, which are reasonably fair and nondiscriminatory and which are estimated to yield Pledged Facility Component Revenues for such Fiscal Year at least equal to 110% of Annual Debt Service on the Parity Obligations and Subordinate Parity Obligations (as defined herein) for such Fiscal Year allocated to each System. See “SECURITY FOR THE 2026 BONDS – Pledged Facility Component Rate Covenant.”
Operations and Maintenance Covenant
Although neither the 2026 Payments nor the 2026 Bonds are secured by or payable from the component of the City’s rate charges allocable to operations and maintenance of each System, in addition to the rate covenant with respect to Pledged Facility Component Revenues, the City has made certain covenants for each System relating to Operations and Maintenance Costs (as defined herein). See “SECURITY FOR THE 2026 BONDS – Operations and Maintenance Rate Covenant.”
Additional Senior and Parity Obligations of the City
As noted above, the City (as successor-in-interest to the District) is responsible for payment of previously issued obligations secured by the Pledged Facility Component Revenues.

In addition, the City is obligated to issue additional obligations to repay developers and their assignees for facilities owned by the City; accordingly, the City expects to, subject to certain conditions, incur additional Subordinate Parity Obligations (as defined herein), payable from the Pledged Facility Component Revenues of each System on a parity basis with the 2026 Payments, with respect to each of the Systems in the future. The City has covenanted that it will not issue Parity Obligations (as defined herein), payable from the Pledged Facility Component Revenues of each System on a senior basis to the 2026 Payments. See “SECURITY FOR THE 2026 BONDS – Parity Obligations and Subordinate Parity Obligations.” Limited Obligations
THE 2026 BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE

SOLELY FROM AND SECURED SOLELY BY THE AUTHORITY REVENUES AND CERTAIN PROCEEDS OF THE 2026 BONDS PLEDGED THEREFOR IN THE TRUST AGREEMENT AND

ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF, OR CHARGE OR LIEN UPON

ANY PROPERTY OF THE AUTHORITY, THE CITY OR THE COUNTY, EXCEPT THE AUTHORITY REVENUES. NEITHER THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THE 2026 BONDS CONSTITUTES A DEBT, LIABILITY OR OBLIGATION OF THE CITY OR THE COUNTY.

Risks of Investment
See the section of this Official Statement entitled “RISK FACTORS” for a discussion of special factors that should be considered, in addition to the other matters set forth herein, in considering the investment quality of the 2026 Bonds. In particular, no assurance can be given that the financial affairs of the City and the Systems will not be materially adversely impacted by the COVID-19 pandemic or other adverse global event. Neither the Authority, Item 8.1
Mountain House                                               Page 271 of 618 5 nor the City, nor the Underwriter can predict the future impact of COVID-19 or any other adverse global event on the Pledged Facility Component Revenues, which secure the repayment of the 2026 Bonds. See “RISK FACTORS – COVID-19 Pandemic.” Forward-Looking Statements
This Official Statement contains forward-looking statements, including (i) statements containing projections of Pledged Facility Component Revenues and other financial items, (ii) statements of future economic performance of the Water System, the Wastewater System and the Storm Drain System, and (iii) statements of the assumptions underlying or relating to statements described in (i) and (ii) above (collectively, the “Forward-Looking Statements”). All statements other than statements of historical facts included in this Official Statement, including without limitation statements under “THE CITY,” “WATER SYSTEM,” “WASTEWATER SYSTEM,” and “STORM DRAIN SYSTEM” regarding the financial position, capital resources and status of the City are Forward-Looking Statements. Although the Authority and the City believe that the expectations reflected in such Forward-Looking Statements are reasonable, no assurance can be given that such expectations will prove to be correct. Important factors which could cause actual results to differ materially from expectations of the Authority and the City (collectively, the “Cautionary Statements”) are disclosed in this Official Statement. All ForwardLooking Statements attributable to the Authority or the City are expressly qualified in their entirety by the Cautionary Statements.

Summaries Not Definitive
Definitions of certain capitalized terms herein are contained in APPENDIX B hereto, and are incorporated herein by reference. Definitions of certain terms used in this Official Statement, and the summaries of and references contained herein to the Master Contracts, the Trust Agreement, the 2026 Bonds, statutes and other documents do not purport to be comprehensive or definitive and are qualified by reference to each such document, instrument or statute.

Additional copies of this Official Statement and copies of the principal legal documents relating to the 2026 Bonds may be obtained from the City, 251 East Main Street, Mountain House, California 95391.

FINANCING PLAN
Financing of Improvements
The 2026 Bonds are being issued primarily to provide funds to repay amounts owed to developers in the City for the cost of improvements to the Water System, Wastewater System and Storm Drain System constructed by such developers and acquired by the City. The City estimates that the total costs (in current dollars) of the System facilities necessary for Mountain House at build-out of the community, together with the total costs of the System facilities completed to date are summarized under the caption “THE MOUNTAIN HOUSE COMMUNITY – Infrastructure Development and Financing” below. In general terms, these facilities include a Water Treatment Plant with UV and chloramines disinfections with a 15 million gallons per day (“mgd”) capacity and related distribution lines, a Wastewater Treatment Plant, a sequential batch reactor system, and related collection system lines, and stormwater detention ponds along with storm drain collection lines. [Review/Confirm/Update]
Item 8.1
Mountain House                                               Page 272 of 618 6 Certain costs have already been repaid to developers from the proceeds of bonds issued in 2007, 2011, 2019, 2020 and 2023, as well as “pay as you go” moneys available to the City from surplus Pledged Facility Component Revenues for each System. Certified costs not paid from proceeds of the 2026 Bonds are anticipated to be paid from future debt obligations and future Pledged Facility Component Revenues. See “WATER SYSTEM,” “WASTEWATER SYSTEM” and “STORM DRAIN SYSTEM” for a description of the facilities currently completed and improvements under construction.

Future construction to meet the utility needs of the community at buildout is described in each of the sections herein devoted specifically to each of the Water System, the Wastewater System and the Storm Drain System. Given the City’s obligation to reimburse developers for the cost of System facilities that have been built and are expected to be built in the future, additional obligations of the City payable on parity with the 2026 Payments are expected in the future. See “SECURITY FOR THE 2026 BONDS – Parity Obligations and Subordinate Parity Obligations.” Estimated Sources and Uses of Funds
The estimated sources and uses of funds relating to the 2026 Bonds are as follows:

Sources:

Principal Amount of 2026 Bonds $
Plus/Less: [Net] Original Issue Premium/Discount
TOTAL SOURCES $
Uses:

Transfer under Project Acq’n Agreements $
Capitalized Interest on 2026 Bonds(1)
Cost of Issuance(2)
TOTAL USES $
(1) Capitalized interest is being funded on the 2026 Bonds through and including December 1, 2027. (2) Costs of issuance includes legal fees, municipal advisor’s fee, printing costs, rating agency fees, bond insurance and reserve fund insurance policy premiums, Underwriter’s discount, and other expenses of issuing the 2026 Bonds.

Item 8.1
Mountain House                                               Page 273 of 618 7 THE 2026 BONDS
Description of the 2026 Bonds
The 2026 Bonds are being issued as current interest bonds (the “Current Interest Bonds”), capital appreciation bonds (the “Capital Appreciation Bonds”) or a combination thereof. The 2026 Bonds will be dated the Closing Date. The 2026 Bonds will bear or accrue interest at the rates per annum and will mature, subject to the redemption provisions set forth below, on the dates and in the principal amounts, all as set forth on the inside cover page hereof.

Current Interest Bonds. The Current Interest Bonds will be issued as fully registered bonds in the denomination of $5,000 (an “Authorized Denomination”), or any integral multiple of $5,000. Interest on the Current Interest Bonds is payable semiannually on June 1 and December 1 of each year, commencing June 1, 2027 (each, an “Interest Payment Date”) to the person whose name appears on the Current Interest Bond registration books of the Trustee as the registered owner thereof on the Record Date. If the Book-Entry System is not then in effect, such interest will be paid by check mailed by the Trustee on such Interest Payment Date, by first class mail, to such registered owner at the address which appears on such books; provided, that upon the written request of an Owner of $1,000,000 or more in aggregate principal amount of the Current Interest Bonds received by the Trustee prior to the applicable Record Date, interest shall be paid by wire transfer in immediately available funds to an account in the United States. Interest on the Current Interest Bonds shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. See “–Book-Entry Only System” below for a description of how interest and principal will be paid while the Book-Entry System is in effect.

Principal of and redemption premium, if any, on the Current Interest Bonds will be payable at the Corporate Trust Office of the Trustee in San Francisco, California. Principal of, redemption premium, if any, and interest on the Current Interest Bonds shall be paid in lawful money of the United States of America.

Capital Appreciation Bonds. The Capital Appreciation Bonds are dated the date of delivery, and accrete interest from such date. The Denominational Amount of each maturity of the Capital Appreciation Bonds shall be as shown on the inside cover page hereof. The Capital Appreciation Bonds are issued in denominations such that the Maturity Value thereof shall equal $5,000 or an integral multiple thereof, except for one maturity which may be in an odd amount.

The Capital Appreciation Bonds are payable only at maturity, in the years and amounts set forth on the inside cover page hereof, or earlier redemption.

As provided in the Trust Agreement, references therein and in this Official Statement to the payment of the principal of and interest on the 2026 Bonds includes payment of the Accreted Value and Maturity Value of the Capital Appreciation Bonds, unless otherwise required by the context or by the express provisions of such reference. Further, whenever in the Trust Agreement or in this Official Statement, any reference is made to the rights of the owners of the 2026 Bonds as measured by the principal amount of such Bonds, the principal amount of the Capital Appreciation Bonds is deemed to be the Accreted Value thereof as of the date of exercise of such rights.

Interest on the Capital Appreciation Bonds is compounded on June 1 and December 1 of each year, commencing June 1, 2027. Each Capital Appreciation Bond accretes in value daily over the term to its maturity, from its Denominational Amount on the Closing Date to its Accreted Value on its maturity date. The Accreted Value payable on any date shall be determined solely Item 8.1
Mountain House                                               Page 274 of 618 8 by reference to the Table of Accreted Values attached to such Capital Appreciation Bond. See “APPENDIX H – Table of Accreted Values.”
The interest portion of the Accreted Value of any Capital Appreciation Bond that is payable on the date of maturity, or earlier redemption, shall represent interest accreted and coming due on such date. The Accreted Value of any Capital Appreciation Bond at maturity, or earlier redemption, shall be payable by check or draft mailed by first-class mail, in lawful money of the United States of America upon presentation and surrender of such Bond at the Office of the Trustee.

As used herein and in the Trust Agreement with respect to the Capital Appreciation Bonds, the following terms have the following meanings:
“Accreted Value” means, with respect to any Capital Appreciation Bond, as of the date of calculation, the total amount of principal thereof and interest payable thereon as of any Compounding Date determined solely by reference to the table of Accreted Values set forth on such Capital Appreciation Bond. The Accreted Value of any Capital Appreciation Bond as of any date other than a Compounding Date will be, for each $5,000 principal amount of Capital Appreciation Bonds, determined by straight-line interpolation between the Accreted Value for the immediately preceding compounding date (in relation to the calculation date) and the Accreted Value for the immediately succeeding compounding date (in relation to the calculation date), assuming each year consists of twelve 30-day months.
“Accretion Rate” means the rate which, when applied to the initial Denominational Amount of any Capital Appreciation Bond and compounded semiannually on each Compounding Date, produces the Maturity Value of such Capital Appreciation Bond on the maturity date thereof. “Capital Appreciation Bonds” means bonds the interest on which is compounded semiannually on each Compounding Date and is payable in full at maturity as shown in the table of Accreted Value for the Capital Appreciation Bonds and attached to this Official Statement as APPENDIX H.
“Compounding Date” means, with respect to any Capital Appreciation Bond, each June 1 and December 1, commencing on June 1, 2027 to and including the date of maturity or redemption of such Capital Appreciation Bond.
“Denominational Amount” means, with respect to any Capital Appreciation Bond, the original amount of such Capital Appreciation Bond as of the Closing Date. “Maturity Value” means the Accreted Value of any Capital Appreciation Bond on its maturity date.

Redemption of the 2026 Bonds
Optional Redemption. The 2026 Bonds maturing on and after December 1, _____ are subject to optional redemption prior to their respective stated maturity dates, upon notice as hereinafter provided, from prepayment of 2026 Payments made by the City, as a whole or in part (from such maturity dates as are designated by the Authority to the Trustee at the direction of the City or, if the Authority fails to designate such maturity dates, in inverse order of maturity date and by lot within a maturity date) on any date on or after December 1, _____, at a redemption price Item 8.1
Mountain House                                               Page 275 of 618 9 equal to the principal amount of the 2026 Bonds called for redemption, plus accrued and unpaid interest to the redemption date, without premium.

Mandatory Sinking Fund Redemption. The Current Interest Bonds maturing on December 1, _____ and December 1, _____ (the “2026 Current Interest Term Bonds”) are subject to mandatory redemption in whole, or in part, at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on December 1 in the years as set forth in the following tables:
2026 Current Interest Term Bonds
Maturing December 1, _____
Sinking Fund
Redemption Date
(December 1) Principal Amount
2026 Current Interest Term Bonds
Maturing December 1, _____
Sinking Fund
Redemption Date
(December 1) Principal Amount
If some but not all of the 2026 Bonds that are 2026 Current Interest Term Bonds have been optionally redeemed, the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of such 2026 Current Interest Term Bonds so redeemed, to be allocated among such sinking fund payments as determined by the City, which shall notify the Trustee in writing of such determination (and provide the Trustee an updated schedule of sinking fund payments).

Notice and Effect of Redemption. Notice of redemption will be mailed by the Trustee, not less than 20 nor more than 60 days prior to the redemption date to (i) the respective Owners of the 2026 Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, (ii) the Securities Depositories and (iii) the Information Services. Notice of redemption to the Securities Depositories and the Information Services will be given by registered mail, certified mail, overnight delivery or facsimile transmission or by other acceptable means.

Each notice of redemption will state the date of such notice, the series to be redeemed, redemption price, the place of redemption (including the name and appropriate address of the Trustee), the CUSIP number (if any) of the 2026 Bonds to be redeemed, and, if less than all of the 2026 Bonds of any one maturity date are to be redeemed, the distinctive bond numbers of the 2026 Bonds of such maturity date to be redeemed and, in the case of 2026 Bonds to be redeemed in part only, the respective portions of the principal amount evidenced and represented thereby to be redeemed. Each such notice will also state that on said date there will become due and payable on each of said 2026 Bonds the redemption price thereof and in the case of a 2026 Bond Item 8.1
Mountain House                                               Page 276 of 618 10 to be redeemed in part only, the specified portion of the principal amount evidenced and represented thereby to be redeemed, together with accrued and unpaid interest evidenced and represented thereby to the redemption date, and that from and after such redemption date interest evidenced and represented thereby will cease to accrue, and will require that such 2026 Bonds be then surrendered at the address of the Trustee specified in the redemption notice. Failure to receive such notice will not invalidate any of the proceedings taken in connection with such redemption.

In the event of redemption of 2026 Bonds, the Trustee will mail a notice of redemption upon receipt of a Written Request of the Authority or written notice from the City, may give notice of optional redemption which is conditional upon the Trustee having funds available for the redemption on the date designated for such redemption and which may provide for rescission of the contemplated redemption in the event that funds do not become available.

If notice of redemption has been duly given as aforesaid and money for the payment of the redemption price of the 2026 Bonds called for redemption is held by the Trustee, then on the redemption date designated in such notice 2026 Bonds so called for redemption will become due and payable, and from and after the date so designated interest on such 2026 Bonds will cease to accrue, and the Owners of such 2026 Bonds will have no rights in respect thereof except to receive payment of the redemption price thereof.

Right to Rescind; Cancellation. The Authority shall have the right to rescind any optional redemption by written notice to the Trustee on or prior to the date fixed for redemption. Any such notice of optional redemption shall be canceled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Outstanding 2026 Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under the Trust Agreement. Neither the Authority nor the City nor the Trustee shall have any liability to the Owners or any other party related to or arising from such rescission of redemption.

The Trustee shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent.

Purchase in lieu of Redemption. In lieu of redemption of 2026 Bonds as provided above, amounts held by the Trustee for such redemption may be applied by the Trustee to the purchase of 2026 Bonds at public or private sale as and when and at such prices (including brokerage, accrued interest and other charges) at the direction of the Authority or the City received by the Trustee at least 75 days prior to the selection of the 2026 Bonds for redemption, but such purchase price must not exceed the redemption price that would be payable if such 2026 Bonds were redeemed.

Manner of Redemption. If less than all Outstanding 2026 Bonds of any particular maturity date are to be redeemed at any one time, the Trustee will select the portions of the 2026 Bonds of such maturity date to be redeemed by lot in a manner which the Trustee deems to be fair. For purposes of such selection, all 2026 Bonds will be deemed to be comprised of separate $5,000 denominations and such separate denominations will be treated as separate 2026 Bonds that may be separately redeemed.

Transfer and Exchange
Any 2026 Bond may, in accordance with its terms, be transferred in the books required to be kept under the Trust Agreement by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such 2026 Bond at the Corporate Trust Office of Item 8.1
Mountain House                                               Page 277 of 618 11 the Trustee for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee. Whenever any 2026 Bond or 2026 Bonds will be surrendered for transfer, the Trustee will execute and deliver to the transferee a new 2026 Bond or 2026 Bonds of the same maturity date evidencing and representing a like aggregate principal amount in authorized denominations. The Trustee will require the payment by the Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer as a condition precedent to the exercise of such privilege.

The Trustee may deem and treat the registered owner of any 2026 Bond as the absolute owner of such 2026 Bond for the purpose of receiving payment of the principal and interest and redemption premium, if any, evidenced and represented thereby and for all other purposes, whether such 2026 Bond will be overdue or not, and the Trustee will not be affected by any notice or knowledge to the contrary; and payment of the interest and principal and redemption premium, if any, on such 2026 Bond will be made only to such registered owner, which payments will be valid and effectual to satisfy and discharge liability on such 2026 Bond to the extent of the sum or sums so paid.

Any 2026 Bond may be exchanged at the Corporate Trust Office of the Trustee for a 2026 Bond evidencing and representing a like aggregate principal amount of 2026 Bond of the same maturity date of other authorized denominations. The Trustee will require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange as a condition precedent to the exercise of such privilege.

The Trustee will not be required to register the transfer or exchange of any 2026 Bond during the period commencing on the date 15 days preceding the selection of 2026 Bonds for redemption and ending on the date of mailing of notice of such redemption, or any 2026 Bond which has been selected for redemption in whole or in part, from and after the day of mailing of a notice of redemption of such 2026 Bonds selected for redemption in whole or in part as provided in the Trust Agreement.

Book-Entry Only System
DTC will act as securities depository for the 2026 Bonds. The 2026 Bonds will be issued as fully-registered bonds registered in the name of Cede & Co. (DTC’s partnership nominee).

One fully-registered 2026 Bond will be issued for each maturity of the 2026 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. See “APPENDIX F – DTC and the Book-Entry System.”
Neither the City nor the Trustee can and do not give any assurances that DTC, DTC Participants or others will distribute payments of principal, interest or premium (if any) with respect to the 2026 Bonds paid to DTC or its nominee as the registered owner, or will distribute any redemption notices or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. Neither the City nor the Trustee are responsible or liable for the failure of DTC or any DTC Participant to make any payment or give any notice to a Beneficial Owner with respect to the 2026 Bonds or an error or delay relating thereto.

Item 8.1
Mountain House                                               Page 278 of 618 12 DEBT SERVICE SCHEDULE
Annual debt service on the 2026 Bonds is presented below, assuming no optional redemptions. The annual debt service on the 2026 Bonds is payable from amounts due under the 2026 Supplemental Contract for each System as presented under “PLEDGED FACILITY COMPONENT REVENUES” herein, without cross-collateralization among the three Systems.

See “PLEDGED FACILITY COMPONENT REVENUES” for additional information on each System. [Note: Add table showing senior and other parity debt? And coverage?] Period Ending
Dec. 1
2026 Bonds
Principal
2026 Bonds
Interest
Total 2026 Bonds
Debt Service
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
Total
_____________
Source: Underwriter.

Item 8.1
Mountain House                                               Page 279 of 618 13 SECURITY FOR THE 2026 BONDS
Pledge of Authority Revenues
Subject only to the provisions of the Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein, all of the Authority Revenues and all amounts (excluding proceeds of the sale of the 2026 Bonds) held in any fund or account established under the Trust Agreement are pledged to secure the payment of the principal of and interest and premium (if any) on the 2026 Bonds. Said pledge constitutes a lien on and security interest in the Authority Revenues and such amounts for the 2026 Bonds and will attach, be perfected and be valid and binding from and after the Closing Date, without the need for any physical delivery thereof or further act. Notwithstanding anything in the Trust Agreement or the 2026 Bonds, the Authority is not required to advance any moneys derived from any source other than the Authority Revenues and other assets pledged under the Trust Agreement for any of the purposes in the Trust Agreement, whether for the payment of the principal of or interest on the 2026 Bonds or for any other purpose. Nevertheless, the Authority may, but is not required to, advance for any of the purposes hereof any funds of the Authority which may be made available to it for such purposes.
“Authority Revenues” means all of the 2026 Payments, and all interest, profits or other income derived from the investment of amounts in any fund or account established under the Trust Agreement. “2026 Payments” means the installment payments of interest, principal and redemption premiums, if any, payable by the City under and pursuant to the respective 2026 Supplemental Contracts from the Pledged Facility Component Revenues as a Subordinate Parity Obligation. “2026 Supplemental Contracts” means, collectively, (i) the 2026 Supplemental Installment Purchase Contract (Wastewater System), dated as of November 1, 2026, by and between the City and the Authority, (ii) the 2026 Supplemental Installment Purchase Contract (Water System), dated as of November 1, 2026, by and between the City and the Authority, and (iii) the 2026 Supplemental Installment Purchase Contract (Storm Drain System), dated as of November 1, 2026, by and between the City and the Authority. Each 2026 Supplemental Contract supplements a Master Contract between the City (as successor-in-interest to the District) and the Authority with respect to a System.

Pledged Facility Component Revenues
Pursuant to each Master Contract, the City (as successor-in-interest to the District) has irrevocably granted and pledged the Pledged Facility Component Revenues of the respective System first, to secure Parity Obligations (consisting of the 2019 Payments and 2020A Payments, described herein) and second, to secure Subordinate Parity Obligations (consisting of the 2020B Payments, 2023 Payments and 2026 Payments, described herein). “Pledged Facility Component Revenues” means, as to each System, all revenues and income derived from the Pledged Facility Component of the System. With respect to each System, the “Pledged Facility Component” means the portion of monthly rates designated as the “Pledged Facility Component” received by the City for service provided by such System, as described in the Project Acquisition Agreements and the Utility Ordinance, which are defined below.
“Project Acquisition Agreements” means, collectively (1) the Master Acquisition and Reimbursement Agreement, dated August 22, 2000, by and between the City (as successor-ininterest to the District) and Trimark Communities, (2) Project Acquisition Agreement No. PAA-I, Item 8.1
Mountain House                                               Page 280 of 618 14 dated November 30, 2001, by and between the City (as successor-in-interest to the District) and Trimark Communities, (3) Project Acquisition Agreement No. PAA-2, dated February 11, 2002, by and between the City (as successor-in-interest to the District) and Trimark Communities, and (4) Project Acquisition Agreement No. PAA-3, dated December 7, 2004, by and between the City (as successor-in-interest to the District) and Trimark Communities, (5) the Master Acquisition and Reimbursement Agreement, dated May 23, 2006, by and between the City (as successor-ininterest to the District) and PCCP Mountain House, LLC, and (6) Project Acquisition Agreement No. PAA-5, dated December 12, 2006, by and between the City (as successor-in-interest to the District) and CGKL Kamilos Development, all as amended from time to time in accordance with their respective terms, together with any other similar agreements designated by the City. [Confirm City as successor-in-interest to the District on all of these] Under the Project Acquisition Agreements, the developer parties agreed to construct, and the City agreed to acquire, utility facilities necessary for the development of the Mountain House community. Further, under the Project Acquisition Agreements, the City agreed that a portion of its monthly charges for water, wastewater and storm drain services would be designated as the Pledged Facility Component, which was intended to be used to reimburse any developer who acquired and constructed utility facilities for the Mountain House community, for such utilities acquired by the City. This reimbursement may be paid from bond proceeds generated by leveraging the Pledged Facility Component Revenues or from the Pledged Facility Component Revenues on a pay-as-you-go basis.
“Utility Ordinance” means, collectively, Ordinance No. 4182(a), adopted by the Board of Directors of the District on December 10, 2002 and subsequent ordinances or resolutions setting future Water System Pledged Facility Component rates, Wastewater System Pledged Facility Component rates or Storm Drain Facility Component rates, as applicable for each System.

Flow of Funds Under Master Contracts; Lockbox Agreement Lockbox Agreement. The City (as successor-in-interest to the District) and the Authority are party to a Lockbox Agreement, dated as of October 1, 2020 (the “Lockbox Agreement”) pursuant to which the City maintains at Computershare Trust Company, N.A. (including its affiliates and any successors, the “Depository Bank”), a deposit account, referred to as the “City of Mountain House Utility System Pledged Facility Component Lockbox Account” (the “Lockbox Account”), as well as three deposit accounts for the Systems, referred to as the “City of Mountain House Wastewater Pledged Facility Component Lockbox Account,” (the “Wastewater Lockbox Payment Account”), “City of Mountain House Water Pledged Facility Component Lockbox Account” (the “Water Lockbox Payment Account”), and the “City of Mountain House Storm Drain Pledged Facility Component Lockbox Account” (the “Storm Drain Lockbox Payment Account”) (collectively, the “Lockbox Payment Accounts”). In order to assure availability of sufficient funds in the Lockbox Account to provide for payment of the 2026 Bonds, the City (as successor-in-interest to the District) is also party to a Deposit Account and Control Agreement that allows the Authority to control availability of access to the Lockbox Account and to have the right to withdraw in accordance with the Lockbox Agreement.

The Lockbox Agreement replaces in its entirety certain similar lockbox arrangements previously established and maintained by the City with respect to prior obligations. Pursuant to the Lockbox Agreement, all income and revenues attributable to the City’s utility operations are deposited to the Lockbox Account. Each month, the City determines the amounts attributable to the operations and maintenance and Pledged Facility Components and the operations and maintenance component is released to the City.

Item 8.1
Mountain House                                               Page 281 of 618 15 Withdrawal of Funds. Consistent with each Master Contract, under the Lockbox Agreement, for each 12-month period beginning December 1 and ending November 30, the City shall, on or before the 5th day before the last Business Day in each month, beginning in December each year, deposit, or cause the Depository Bank to deposit, all Pledged Facility Component Revenues for each System into the applicable Lockbox Payment Account. Moneys in each applicable Lockbox Payment Account shall be used and released by the City for the payment of the interest and principal payments becoming due and payable under all Parity Obligations and Subordinate Parity Obligations as set forth below.
(1) for all Parity Obligations, an amount equal to the June 1 payment due during the 12-month period and the December 1 payment due immediately following the 12-month period; plus
(2) for all Subordinate Parity Obligations, an amount equal to (i) the December 1 payment becoming due immediately following the 12-month period, plus (ii) the June 1 payment becoming due immediately following the 12-month period.

On each December 1, upon retention of the amounts required above and all amounts due to make up any deficiency in the Reserve Fund and Reserve Accounts for Parity Obligations and Subordinate Parity Obligations in accordance with the provisions of the applicable Issuing Document, including all Reserve Fund Credit Facility Costs, and payment of all fees owed to the Depository Bank (on a pro rata basis in proportion to the amounts of such fees allocable to each System), any amounts remaining as of such date may be released to the City to be used for any lawful purpose.

Revenue Fund; Flow of Funds Under Trust Agreement
Under the Trust Agreement, all Authority Revenues will be promptly deposited by the Trustee upon receipt thereof in a special fund designated as the “Revenue Fund” which the Trustee will establish, maintain and hold in trust, for so long as any 2026 Bonds are Outstanding, except that all moneys received by the Trustee and required under such Trust Agreement or under the applicable Supplemental Contracts to be used for optional redemption of the 2026 Bonds will be promptly deposited in a special fund and disbursed for that purpose. All Authority Revenues deposited with the Trustee will be held, disbursed, allocated and applied by the Trustee only as provided in the Trust Agreement. Any surplus remaining in the Revenue Fund, after payment in full of (a) the principal of and interest on the 2026 Bonds or provision therefore under the Trust Agreement, (b) amounts needed to replenish any deficiency in the Reserve Fund or to reimburse a bond insurer for payment on a reserve surety, and (c) any applicable fees and expenses to the Trustee, will be withdrawn by the Trustee.

In addition, within the Revenue Fund, the Trustee will establish and hold an “Interest Account” and “Principal Account.” All money in the Revenue Fund will be set aside by the Trustee in the following respective accounts and fund in the following order of priority: First, to the Interest Account; then, to the Principal Account; and then, to the Reserve Fund.

Interest Account. On the Business Day immediately preceding each Interest Payment Date, the Trustee will set aside from the Revenue Fund and deposit in the Interest Account that amount of money which is equal to the amount of interest on the 2026 Bonds becoming due and payable on such Interest Payment Date. No deposit need be made in the Interest Account if the amount contained therein is at least equal to the Item 8.1
Mountain House                                               Page 282 of 618 16 aggregate amount of interest on the 2026 Bonds becoming due and payable on such Interest Payment Date. All money in the Interest Account will be used and withdrawn by the Trustee solely for the purpose of paying the interest as becomes due and payable (including accrued interest on any of the 2026 Bonds purchased or redeemed prior to their respective maturity dates).

Within the Interest Account the Trustee will establish a Capitalized Interest Subaccount which shall be used and withdrawn to pay interest on the 2026 Bonds through December 1, 2027.

Principal Account. On the Business Day immediately preceding each December 1 on which principal and/or Maturity Value is due on the 2026 Bonds, including via sinking fund redemption, the Trustee will set aside from the Revenue Fund and deposit in the Principal Account an amount of money equal to the principal amount and/or Maturity Value due on such December 1. No deposit need be made in the Principal Account if the amount contained therein is at least equal to the aggregate amount of the principal amount and/or Maturity Value due on such December 1. All money in the Principal Account will be used and withdrawn by the Trustee solely for the purpose of paying the principal on the 2026 Bonds as it becomes due and payable, whether at their respective maturity dates or on prior sinking fund redemption.

Reserve Fund
Under the Trust Agreement, the Trustee will establish a Reserve Fund for the 2026 Bonds and within such fund a “Wastewater Reserve Account,” “Water Reserve Account” and “Storm Drain Reserve Account” (each, a “Reserve Account”) relating to obligations of each System thereunder. All money in (or available to) any Reserve Account shall be used and withdrawn by the Trustee solely for the purpose of replenishing the Interest Account or the Principal Account (in such order) in the event of any deficiency at any time in any of the 2026 Payments of a System relating to such Reserve Account. Each Reserve Account shall be available only to cover a deficiency in the 2026 Payments attributable to the portion of such payments payable by each System.

Deposit of 2026 Reserve Policy. The Reserve Account Requirement for each Reserve Account established for the 2026 Bonds will be satisfied in the form of the issuance of the 2026 Reserve Policy by the Insurer. The Trustee shall comply with all of the terms and provisions of the 2026 Reserve Policy for the purpose of assuring that funds are available thereunder when required for the purposes of each Reserve Account established within the Reserve Fund, within the limits of the coverage amount provided by the 2026 Reserve Policy. “Reserve Account Requirement” means with respect to each Reserve Account, an amount equal to the lesser of (i) Maximum Annual Debt Service on the 2026 Payments under the applicable 2026 Supplemental Contract, (ii) 125% of Average Annual Debt Service on the 2026 Payments under the applicable 2026 Supplemental Contract, or (iii) 10% of the amount (within the meaning of Section 148 of the Code) of the 2026 Payments under the applicable 2026 Supplemental Contract. The Reserve Account Requirement will be established at the time of issuance of the 2026 Bonds, and will not be subject to increase at a later date.

As noted above, the Reserve Account Requirements will be satisfied by the issuance by the Insurer of its 2026 Reserve Policy, which 2026 Reserve Policy will be deposited into the Item 8.1
Mountain House                                               Page 283 of 618 17 Reserve Fund in the aggregate amount needed to fund all three reserve accounts and allocated among the three reserve accounts.

Use of Reserve Accounts. In the event of a withdrawal of amounts from any Reserve Account within the Reserve Fund (or draws on the 2026 Reserve Policy) to make payments to the Interest Account or the Principal Account, the Trustee shall deposit in such Reserve Account (or pay to the Insurer) moneys from the Revenue Fund necessary to restore the amount in such Reserve Account to the applicable Reserve Account Requirement (or to reimburse and pay the costs owed to the Insurer), but only from the Pledged Facility Component Revenues of the applicable System available to restore said amounts. Pledged Facility Component Revenues of a System may only be used to replenish draws on the Reserve Account of that System and not to replenish draws on the Reserve Account of any other System.

On or before the 5th day before the last Business Day of each month, the Trustee shall request money from the Depository Bank under the Lockbox Agreement, to the extent available from the remaining moneys applicable to the System with a deficiency in its Reserve Account (or with an amount owing to the Insurer), to be transferred to the Trustee for deposit in the System’s Reserve Account in an amount necessary to restore the Reserve Account to an amount equal to the Reserve Account Requirement for such System (or to reimburse and pay the costs owed to the Insurer) and otherwise replenish the Reserve Account for such System for any withdrawals (including draws upon the 2026 Reserve Policy) and necessary to restore such account to an amount equal to the amount required to be maintained therein; provided that payments to restore the Reserve Account after a withdrawal (or pay to the Insurer) may be made in monthly installments equal to 1/12 of the aggregate amount needed.

As used above, “Qualified Reserve Account Credit Instrument” means (a) the 2026 Reserve Policy and (b) any other irrevocable standby or direct-pay letter of credit, insurance policy, or surety bond issued by a commercial bank or insurance company and deposited with the Trustee, provided that all of the following requirements are met at the time of acceptance thereof by the Trustee: (i) at the time of issuance of the letter of credit, insurance policy or surety bond is rated in the top two categories (without regard to modifiers) by either S&P or Moody’s; (ii) such letter of credit, insurance policy or surety bond has a term of at least 12 months; (iii) such letter of credit, insurance policy or surety bond has a stated amount at least equal to the Reserve Account Requirement or, if such letter of credit, insurance policy or surety bond is being provided with respect to only a portion of the Reserve Account Requirement, such letter of credit, insurance policy or surety bond has a stated amount at least equal to that portion of the Reserve Account Requirement with respect to which funds are proposed to be released; and (iv) the Trustee is authorized pursuant to the terms of such letter of credit, insurance policy or surety bond to draw thereunder an amount equal to any deficiencies which may exist from time to time in the Interest Account or the Principal Account for the purpose of making payments required thereby.

Pledged Facility Component Rate Covenant
Pursuant to the Master Installment Contracts, as to each System, the City (as successorin-interest to the District) has covenanted to fix, prescribe and collect Pledged Facility Component rates during each Fiscal Year, which are reasonably fair and nondiscriminatory and which are estimated to yield Pledged Facility Component Revenues for such Fiscal Year estimated to yield Pledged Facility Component Revenues for such Fiscal Year at least equal to 110% of the Annual Debt Service on the Parity Obligations and Subordinate Parity Obligations payable by the System in such Fiscal Year.

Item 8.1
Mountain House                                               Page 284 of 618 18 The City may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the rates, fees and charges then in effect unless the Pledged Facility Component Revenues from such reduced rates, fees and charges are estimated to be sufficient to meet this requirement. The Pledged Facility Component Rates are authorized by Ordinance to increase annually by the greater of 2% or the amount of change in the Engineering News-Record Construction Cost Index.

In addition, the City will have in effect at all times rules and regulations requiring each consumer or customer located on any premises connected to each System to pay the rates, fees and charges applicable to such Service to such premises and providing for the billing thereof and for a due date and a delinquency date for each bill. The City will not permit any part of a System or any facility thereof to be used or taken advantage of free of charge by any corporation, firm or person, or by any public agency (including the United States of America, the State and any city, county, district, political subdivision, public corporation or agency of any thereof), including the City.

Operations and Maintenance Rate Covenant
Although neither the 2026 Payments nor the 2026 Bonds are secured by or payable from the component of the City’s rate charges allocable to operations and maintenance of each System, the City has agreed in each Master Contract to use its best efforts to maintain annual rates and charges allocated to Operations and Maintenance Costs at an amount which provides Gross Operating Revenues to be at least 100% of projected Operations and Maintenance Costs for each Fiscal Year.
“Operations and Maintenance Costs” is defined as costs spent or incurred for maintenance and operation of the System calculated in accordance with generally accepted accounting principles, including (among other things) the reasonable expenses of management and repair and other expenses necessary to maintain and preserve the System in good repair and working order, the cost of water purchased by the Water System (as to the Water System only), and including administrative costs of the City that are charged directly or apportioned to the System, including, but not limited to, salaries and wages of employees, payments to the Public Employees Retirement System, overhead, insurance, taxes (if any), fees of auditors, accountants, attorneys or engineers and insurance premiums, and excluding depreciation, replacement and obsolescence charges or reserves therefor, amortization of intangibles or other bookkeeping entries of a similar nature, and all capital charges.
“Gross Operating Revenues” means all income, rents, rates, fees, charges and other moneys derived from the ownership or operation of the System, including, without limiting the generality of the foregoing, (i) all income, rents, rates, fees, charges or other moneys derived by the City from the sale, furnishing and supply of the water (as to the Water System only) or other services, facilities, and commodities sold, furnished or supplied through the facilities of or in the conduct or operation of the business of the System, (ii) the proceeds of any stand-by or availability charges, development fees and connection charges collected by the City, and (iii) the earnings on and income derived from the investment of amounts described in clauses (i) and (ii) above and from City reserves; but excluding: (x) Pledged Facility Component Revenues, (y) customers’ deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the City, and (z) any proceeds of the taxes or assessments restricted by law to be used by the City to pay bonds or other obligations.

Item 8.1
Mountain House                                               Page 285 of 618 19 In 2020, the City (as successor-in-interest to the District) covenanted that it would establish a special fund designated as the Operating Reserve Fund in the amount equal to 180 days of the System’s projected Operations and Maintenance Costs for Fiscal Year 2020-21, to be held by the City as unencumbered liquid reserve moneys for Operations and Maintenance Costs and used solely for such costs. As of July 1, 2021 and July 1st of each Fiscal Year thereafter, the Operating Reserve Fund shall be adjusted and maintained in an amount at least equal to 180 days of the projected Operations and Maintenance Costs for such Fiscal Year and if falls below such level, shall be replenished within 30 days. The City is in compliance with such covenant, as shown in the following table.

City of Mountain House
Operating Reserve Covenant Compliance
Water System

1.0x Revenue/Operating Expense Coverage
Fiscal Year Ended June 30: 2024 2025
Revenues $6,294,682 $6,379,807
Operating Expenses 5,324,693 5,199,737
Coverage 1.18x 1.23x
180 Days' Cash on Hand
As of July 1: 2025 2026
Projected Operating Expenses (Budget) $6,527,433 $6,279,445 Cash on Hand 5,707,768 6,500,000
Days of Cash 319 378
Wastewater System

1.0x Revenue/Operating Expense Coverage
Fiscal Year Ended June 30: 2024 2025
Revenues $4,711,968 $4,851,610
Operating Expenses 3,152,008 2,854,330
Coverage 1.49x 1.70x
180 Days' Cash on Hand
As of July 1: 2025 2026
Projected Operating Expenses (Budget) $3,795,961 $4,181,073 Cash on Hand 3,534,796 3,500,000
Days of Cash 340 306
Stormwater System

1.0x Revenue/Operating Expense Coverage
Fiscal Year Ended June 30: 2024 2025
Revenues $1,454,973 $1,499,689
Operating Expenses 939,358 652,159
Coverage 1.55x 2.30x
180 Days' Cash on Hand
As of July 1: 2025 2026
Projected Operating Expenses (Budget) $994,560 $1,040,413 Cash on Hand 3,535,857 3,500,000
Item 8.1
Mountain House                                               Page 286 of 618 20 Days of Cash 1,298 1,228
Additionally, if it is necessary for a System to receive an advance of monies from the City’s General Fund, the City has covenanted that it will not during any Fiscal Year repay the General Fund any amount advanced which, after such payment, would result in the amount in the Operating Reserve Fund to fall below the amount required to be maintained therein as set forth in the preceding paragraph.

Parity Obligations and Subordinate Parity Obligations
Existing Senior Parity Obligations – Senior to 2026 Payments. In December 2019, the Authority issued its $25,185,000 Utility Systems Revenue Bonds Series 2019A and $8,505,000 Utility Systems Revenue Bonds Taxable Series 2019B (together, the “2019 Bonds”) to provide funds to repay developers for the cost of improvements to each of the Systems and to refund bonds issued in 2007 and 2011. The 2019 Bonds are secured by installment payments payable by the City pursuant to each Master Contract (the “2019 Payments”). In October 2020, the Authority issued its $91,325,000 Utility Systems Revenue Bonds Series 2020A (the “2020A Bonds”) to provide funds to repay developers for the cost of improvements to each of the Systems. The 2020A Bonds are secured by installment payments (the “2020A Payments”) payable by the City pursuant to each Master Contract on a parity basis with the 2019 Payments, thus the 2019 Payments and 2020A Payments are Parity Obligations for purposes of, and as defined in, the Master Contracts.

Existing Subordinate Parity Obligations – Parity to 2026 Payments. In October 2020, simultaneously with the issuance of the 2020A Bonds, the Authority issued its $37,300,000 Utility Systems Revenue Bonds Series 2020B (the “2020B Bonds”) to provide funds to repay developers for the cost of improvements to each of the Systems. The 2020B Bonds are secured by installment payments payable by the City pursuant to each Master Contract (the “2020B Payments”), on a subordinate basis with the City’s obligation to pay the 2020A Payments and the 2019 Payments. In May 2023, the Authority issued its $42,775,000 Utility Systems Revenue Bonds Series 2023 (the “2023 Bonds”) to provide funds to repay developers for the cost of improvements to each of the Systems. The 2023 Bonds are secured by installment payments payable by the City pursuant to each Master Contract (the “2023 Payments”), on a subordinate basis with the City’s obligation to pay the 2020A Payments and the 2019 Payments.

The 2020B Payments, the 2023 Payments and the 2026 Payments are Subordinate Parity Obligations for purposes of, and as defined in, the Master Contracts.

The terms “Parity Obligations” and “Subordinate Parity Obligations” are defined in the Master Contract. “Parity Obligations” are comprised of the 2019 Payments and 2020A Payments, and are payable on a basis that is senior to the 2026 Payments; the City has covenanted not to issue any additional Parity Obligations. “Subordinate Parity Obligations” are comprised of the 2020B Payments, the 2023 Payments and 2026 Payments, and are payable on a basis that is Subordinate to the Parity Obligations.

Item 8.1
Mountain House                                               Page 287 of 618 21 The following table shows the existing Parity Obligations and existing Subordinate Parity Obligations.

City of Mountain House
Parity Obligations and Subordinate Parity Obligations(1) Outstanding as of ________ 1, 2026 [Confirm/Update]
Obligation Final Maturity
Amount
Issued
Amount
Outstanding
Parity Obligations
2019 Bonds/Payments 2041 $33,690,000 $30,875,000
2020A Bonds/Payments 2055 91,325,000 91,325,000
Subordinate Parity Obligations
2020B Bonds/Payments 2043 $37,300,000 $37,120,000
2023 Bonds/Payments 2052 42,775,000 [______]
___
___________
(1) As such terms are defined in the Master Contract. “Parity Obligations” are payable on a basis that is senior to the 2026 Bonds/Payments, while “Subordinate Parity Obligations” are payable on a basis that is parity to the 2026 Bonds/Payments.

Source: City of Mountain House.

No Future Parity Obligations – Senior to 2026 Payments. The City has covenanted that it will not issue additional bonds or incur additional obligations secured by a lien on the respective Pledged Facility Component Revenues of each System on a parity basis with the 2019 Payments and 2020A Payments.

Future Subordinate Parity Obligations – Parity to 2026 Payments. The City may issue additional bonds or incur additional obligations secured by a lien on Pledged Facility Component Revenues on a subordinate basis with the 2019 Payments and 2020A Payments with respect to each of the Systems (as defined above, “Subordinate Parity Obligations”). Pursuant to terms of the Master Contracts, the City may execute or incur such Subordinate Parity Obligations provided that at the time of such execution, no Event of Default under the respective Master Contract shall have occurred and be continuing, and provided, as to each System considered independently certain conditions are met, including that there shall be on file with the City a Certificate of the City demonstrating that:
(1) For the Initial Fiscal Year, the Initial Projected Pledged Facility Component Revenues are at least equal to 110% of Annual Debt Service due in the Bond Year that begins in such Fiscal Year on the aggregate total Parity Obligations and the following Fiscal Year on the Subordinate Parity Obligations, including the additional Subordinate Parity Obligations; and (2) For each Fiscal Year following the Initial Fiscal Year, the Projected Pledged Facility Component Revenues are at least equal to 110% of Annual Debt Service due in the Bond Year that begins in the corresponding Fiscal Year on the aggregate total Parity Obligations and the following Fiscal Year on the Subordinate Parity Obligations, including the additional Subordinate Parity Obligations.

As used in the foregoing test, the following terms have the following meanings:
“Billable Units” means, for each type of Connection as set forth in the rate codes described in the Rate Ordinance, the Equivalent Dwelling Unit value assigned to such type Item 8.1
Mountain House                                               Page 288 of 618 22 of Connection multiplied by either the number of such Connections (for residential Connections) or, on a Connection-by-Connection basis, the acreage assigned to each such Connection (for non-residential Connections).
“Connections” means all of the connections to the applicable System in existence in the calendar month immediately preceding the issuance date for the additional Subordinate Parity Obligations, which shall be categorized pursuant to the rate codes described in the Rate Ordinance.
“Equivalent Dwelling Unit” means, for each type of Connection as set forth in the rate codes described in the Rate Ordinance, the “EDU Factor” assigned to each such Connection.
“Initial Fiscal Year” means the Fiscal Year during which the additional Subordinate Parity Obligations are issued.
“Initial Projected Pledged Facility Component Revenues” means the projection of Pledged Facility Component Revenues for the Initial Fiscal Year determined as follows:
(i) for each month in the Initial Fiscal Year up to and including the calendar month immediately preceding the issuance date of additional Parity Obligations or Subordinate Obligations (or such earlier month within the prior 6-month period chosen by the City), as applicable, the amount of the actual Pledged Facility Component Revenues to be billed by the City for each such month, plus (ii) for the calendar month of such issuance date (or such earlier month within the prior 6-month period chosen by the City) and each remaining month in the Initial Fiscal Year, the Total Billable Units multiplied by the then-applicable Pledged Facility Component in each such month.
“Projected Pledged Facility Component Revenues” means for each Fiscal Year commencing with the Fiscal Year following the Initial Fiscal Year, the Total Billable Units multiplied by the then-applicable Pledged Facility Component annualized for 12-months, such product shall be escalated as of the beginning of each Fiscal Year (commencing with the Fiscal Year following the Initial Fiscal Year) at the rate of 2% above the previous Fiscal Year.
“Rate Ordinance” means Ordinance No. 4079 adopted by the Board of the District, as such ordinance may be amended from time-to-time.
“Total Billable Units” means the sum of the Billable Units calculated for each type of Connection, as calculated in the calendar month of issuance of any additional Subordinate Parity Obligations (or such earlier month within the prior 6-month period chosen by the City).

Notwithstanding the foregoing, the City may execute any Subordinate Parity Obligations at any time to refund any Outstanding Subordinate Parity Obligations; provided that the issuance of such Subordinate Parity Obligations will not result in an increase in total Annual Debt Service on the Subordinate Parity Obligations.

Super-Subordinate Parity Obligations. Nothing in the Master Contracts limits the ability of the City to execute obligations payable from a lien on Pledged Facility Component Revenues that is subordinate to the lien of Pledged Facility Component Revenues for both Parity Obligations and Subordinate Parity Obligations.

Item 8.1
Mountain House                                               Page 289 of 618 23 BOND INSURANCE
[to come]
Item 8.1
Mountain House                                               Page 290 of 618 24 THE MOUNTAIN HOUSE COMMUNITY
General
The Mountain House community is located in the unincorporated area of San Joaquin County, north of Interstate 205, south of Old River, east of the Alameda County line and west of Mountain House Parkway and Wicklund Cut. Regional access to the community is from Interstate 205, along the southern boundary. Local access is via Grant Line Road and Byron Road, which traverse the community and Mountain House Parkway along the eastern boundary.

The Mountain House community, as conceived by the original developer, Trimark Communities, LLC, a California limited liability company (“Trimark”), was approved for development under the Mountain House Master Plan (the “Master Plan”) for the community, and three specific plans thereunder. The Master Plan was adopted as an amendment to the County General Plan in 1993 and further amended in 1994. The County certified a final environmental impact report (“EIR”) on the amendment to the County General Plan in 1992, a supplemental EIR in 1993 and a master EIR on the Master Plan and Specific Plan I in 1994. The Master Plan provides that essential public services, including streets, storm drain, water and sewer, are to be provided by the City (as successor-in-interest to the District).

In 1996, the County established the District. Upon formation of the District, it was contemplated the territory in Mountain House community would someday incorporate. The City was incorporated by vote of its citizens at an election held on March 5, 2024, becoming the 483rd incorporated city admitted to the State of California on July 1, 2024. See “THE CITY.” Development Plan
Mountain House is planned to include approximately 2,619 acres of residential development of varying densities, 674 acres of commercial and industrial uses, and approximately 760 acres of open space, recreation and resource conservation areas. Development within has been ongoing for approximately 20 years, with over 7,000 homes currently occupied and further development ongoing. Essential public services, including streets, public safety, fire and emergency services, storm drain, water and sewer, are provided by the City, as required by the Master Plan. When fully built out, Mountain House is intended to provide approximately 15,700 units of housing and services for approximately 50,000 people.

The community has been planned in 12 distinct neighborhoods of roughly equal size organized around 3 village centers serving clusters of four neighborhoods each, and a town center. Neighborhoods are referred to by letter (Neighborhoods A through L, inclusive.) Ten of the neighborhoods are centered around a K-8 school and neighborhood park; the remaining two neighborhoods are, or are expected to be, primarily active adult oriented. The village centers provide necessary shopping and other services for the neighborhoods and transit connections and facilities; each of the three village centers will be connected by a central north-south parkway providing access to commercial centers, parks, the town center and Old River.

Current Status of Development
Development within Mountain House has been ongoing for approximately 20 years, and the community is expected to continue developing over approximately the next 25 to 30 years. As of June 30, 2025, over 8,000 units of housing have been built in seven neighborhoods, all being billed for utility services by the City. To date, nearly all of the planned homes in Neighborhoods Item 8.1
Mountain House                                               Page 291 of 618 25 C, D, E, F, G and H have been completed. Infrastructure in Neighborhood A/B is underway and multiple merchant builders are actively constructing homes, many of which have been completed and sold to homeowners. Construction of infrastructure in Neighborhoods I, J, K and L is underway. These two neighborhoods will be a mix of family and active adult housing.

To date, eight K-8 schools, a high school and one of the planned village centers have been built. In March 2020, the City moved into its Town Hall and Library building in the town center. This building is expected to become an anchor and focal point for the Mountain House community. The first phase of the Town Center is completed with Safeway as the anchor tenant.

In addition, 525,000 square feet of industrial/commercial use was recently completed.

The following table provides a development summary for neighborhoods with homes completed or under construction by merchant builders.

Active Neighborhood Development Summary
As of June 30, 2026
Authorized Permits Units Authorized Second Units/ADUs Total Units Neighborhood Permits Issued Finished Remaining Issued Finaled Issued Finaled A/B - Costa 2,188 795 711 1,393 123 106 918 817
C - Hansen 1,280 1,145 1,139 135 183 178 1,328 1,317
D - Cordes 1,297 1,254 1,214 43 119 119 1,373 1,333
E - Bethany 1,295 1,295 1,295 0 75 71 1,370 1,366
F - Wicklund 1,704 1,021 993 683 79 71 1,100 1,064
G - Altamont 1,144 1,144 912 0 87 65 1,231 977
H - Questa 1,533 1,242 1,215 291 84 83 1,326 1,298
I 1,432 4 0 1,428 1 0 5 0
J 971 431 292 540 84 55 515 347
K 1,199 82 34 1,117 0 0 82 34
Subtotal 14,043 8,413 7,805 5,630 835 748 9,248 8,553
Future Neighborhoods
L 1,579 0 0 1,579 0 0 0 0
Town Center 456 0 0 456 0 0 0 0
Subtotal 2,035 0 0 2,035 0 0 0 0
Total 16,078 8,413 7,805 7,665 835 748 9,248 8,553
Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 292 of 618 26 The following table reflects the single-family dwelling unit construction permits issued in each of the last 10 calendar years.

Construction Permits(1)
Calendar Years 2016–2026
Calendar Year
Single-Family
Permits Finished
2016 238
2017 357
2018 610
2019 487
2020 542
2021 398
2022 90
2023 172
2024 266
2025 484
2026(2) 175
(1) Excludes permits issued for a 304-unit apartment building that began construction in 2022. (2) Through June 30, 2026.

Source: City of Mountain House.

Mountain House remains an active sales area, but the pace of sales can be volatile, as shown in 2022 and 2023. No assurance can be given the current level of building and sales activity in the area will continue in the future. See “RISK FACTORS – City Demand and Growth.” Historic Assessed Valuation
Set forth in the following table is the assessed valuation for property in the City for the past ten fiscal years. [Update ordered from Cal-Muni]
Fiscal Year Secured Unsecured Total
Annual
% Change
2016-17 $2,139,221,800 $2,885,723 $2,142,107,523 8.9%
2017-18 2,359,684,956 3,107,598 2,362,792,554 10.3
2018-19 2,760,427,065 3,409,051 2,763,836,116 17.0
2019-20 3,167,577,710 2,534,630 3,170,112,340 14.7
2020-21 3,625,595,433 3,466,798 3,629,062,241 14.5
2021-22 4,026,478,524 3,994,984 4,030,472,608 11.1
2022-23 4,564,475,477 5,028,913 4,569,504,390 13.4
2023-24
2024-25
2025-26
Source: California Municipal Statistics Inc.

Infrastructure Development and Financing
In August 2000, the Board of Directors of the District approved the execution and delivery of a “Master Acquisition and Reimbursement Agreement” (the “MARA”) with Trimark Communities, a California general partnership (an affiliate of Trimark). Pursuant to the MARA, Trimark and its successors would construct water, wastewater and storm drain facilities necessary to development of Mountain House and are to be reimbursed for the costs of oversizing such Item 8.1
Mountain House                                               Page 293 of 618 27 facilities by the City (as successor-in-interest to the District) through the application of Pledged Facility Component Revenues, representing designated revenues from operations of the City’s utility systems either in the form of periodic payments or from the proceeds of revenue bonds issued by the City for that purpose secured by those designated revenues.

The Board of Directors of the District also adopted rules for the issuance of revenue bonds to acquire the facilities from Trimark and other developers (the “Revenue Bond Rules”). The Revenue Bond Rules contemplate that the City (as successor-in-interest to the District) will evaluate its ability to issue a minimum principal amount of $10 million of revenue bonds to reimburse other developers for the facilities constructed for each System at least every 180 days and, if sufficient debt service capacity exists, to issue such revenue bonds, subject to the conditions set forth therein. Accordingly, the City may issue additional revenue bonds in the future. The City has had discussions with other developers regarding amendments to the Revenue Bond Rules to, among other things, provide additional flexibility to the City with respect to the issuance of future revenue bonds, but no changes have so far been proposed to the City Council.

The Board of Directors of the District also adopted ordinances which (i) established fees to construct, acquire and provide reimbursement for the costs of parks, public safety, library and administration facilities, (ii) established monthly service charges for water, wastewater and storm drain services, including the Pledged Facility Component Revenues, and (iii) established a transportation fee to provide funds for the construction, acquisition or reimbursement of the costs of transportation improvements within Mountain House. See “WATER SYSTEM,” “WASTEWATER SYSTEM” and “STORM DRAIN SYSTEM” for a description of rates, fees and charges for the use of the Systems levied by the City (as successor-in-interest to the District).

Based on the approved Project Acquisition Agreements, the estimated costs in current dollars of the System facilities necessary for Mountain House at build-out, facilities completed to date or currently under construction, and total liabilities outstanding are summarized below.

Expansion of the Systems is expected to occur as build out occurs, with additional connections supporting the added operations and maintenance cost in addition to providing funds for debt service. The following table shows facilities completed and related cost and repayment information as of June 30, 2026. Developers in the City are constructing additional improvements that will be transferred to the City, including phase III improvements to the wastewater treatment plant in the amount of approximately $___ million. See “WASTEWATER SYSTEM.” System
Completed
to Date
Estimated
Completion
Cost
Total
Estimated
Cost
Pledged Notes
Payable(1)
Water System $127,300,192 $51,000,000 $178,300,192 $199,777 Wastewater System 131,205,427 0 131,205,427 54,366,283
Storm Drain 30,357,128 29,000,000 59,357,128 158,359
Total $288,862,747 $80,000,000 $368,862,747 $54,724,419 ___________________
(1) It is anticipated that proceeds of the 2026 Bonds will be used to repay approximately $_________* of the Pledged Notes Payable. See “FINANCING PLAN – Estimated Sources and Uses of Funds.” * Preliminary, subject to change.

Source: City of Mountain House.

See “WATER SYSTEM,” “WASTEWATER SYSTEM” and “STORM DRAIN SYSTEM” for a description of the facilities currently completed and improvements under construction. Given the City’s obligation to reimburse other developers for the cost of System facilities that have been Item 8.1
Mountain House                                               Page 294 of 618 28 built and are expected to be built in the future, additional obligations of the City payable from the Pledged Facility Component Revenues are expected in the future. See “SECURITY FOR THE 2026 BONDS – Parity Obligations and Subordinate Parity Obligations.”

THE AUTHORITY
The Authority was established pursuant to a Joint Exercise of Powers Agreement dated as of June 1, 2019, between the City (as successor-in-interest to the District) and the California Statewide Communities Development Authority. The Authority was created for the purpose of assisting in the financing and refinancing of certain public programs and projects of the City, and for the purpose of aiding in the financing and refinancing of public capital improvements as defined in the Act. The Board of Directors of the Authority are the same persons serving as the City Council of the City.

THE CITY
General
Incorporation in 2024. The City was incorporated by vote of its citizens at an election held on March 5, 2024, becoming the 483rd incorporated city admitted to the State of California on July 1, 2024. As part of the incorporation process, the District became a subsidiary district of the City.

The City is located in San Joaquin County, north of Interstate 205, south of Old River, east of the Alameda County line and west of Mountain House Parkway directly north and northwest of the City of Tracy. Regional access to the community is from Interstate 205, along the southern boundary. Local access is via Grant Line Road and Byron Road, which traverse the community and Mountain House Parkway along the eastern boundary. The population of the City as of January 1, 2026 was 30,687.

The Mayor is directly elected and the four Council Members are elected by the voters to serve overlapping four-year terms. The City Council sets policy and exercises the legislative authority of the City. The City Is a Council-Manager form of government. The City Council appoints the City Manager. The City Manager is responsible for, among other duties providing executive oversight and management of the City departments.

The Administrative Services Department provides support services: financial services, utility billing and collections, information technology, human resources, and risk management.

The Department also offers recreation programs to the community.

The Public Works Department consists of the operations and maintenance, and asset management divisions. The operations and maintenance division manages the day-to-day functions of street and related maintenance, park and landscape maintenance, and operations of the Water System, Wastewater System and Storm Drain System. The department also oversees the City’s capital improvement/asset management function.

Item 8.1
Mountain House                                               Page 295 of 618 29 The Community Development Department consists of the engineering, development and code enforcement divisions. The department sets design, development and construction standards for streets, public utilities and facilities within the City.

Police services are provided through a contract with the County Sheriff’s Department, fire services through a contract with the French Camp McKinley Fire District and Animal Control Services are provided by the County. The County also continues to provide land use planning and building inspection services. Costs are paid through property and special taxes levied within the City. Management oversight is provided by the City Manager’s Office.

City operations are performed with 47 full-time authorized positions. The City has entered into contracts for the provision of certain of its services with the County and the French Camp McKinley Fire District, as described above. The City also uses a third-party billing contractor, Inframark, for utility billing.

Origins of the Mountain House Community. The Mountain House community, as conceived by the original developer, Trimark Communities, LLC was approved for development under the Mountain House Master Plan (the “Master Plan”) for the community, and three specific plans thereunder. The Master Plan was adopted as an amendment to the County General Plan in 1993 and further amended in 1994. The County certified a final environmental impact report (“EIR”) on the amendment to the County General Plan in 1992, a supplemental EIR in 1993 and a master EIR on the Master Plan and Specific Plan 1 in 1994. The Master Plan provided that essential public services, including streets, storm drain, water and sewer, were to be provided by MHCSD. Home development by merchant builders commenced pursuant to the Master Plan and as of the end of 2026 approximately 8,500 homes have been built in what is now the City.

City Council
The City Council is comprised of five members, each of whom serves a four-year term.

The current Board members and the dates upon which their respective terms expire are as follows:

Office Name Term Expiration Date
Mayor Andy Su Dec. 2028
Vice Mayor Ronna Green Dec. 2026
Council Member Bernice King Tingle Dec. 2026
Council Member Dan Harrison Dec. 2028
Council Member Matt Disko Dec. 2028
Key City Personnel
Steven Pinkerton, City Manager. Mr. Pinkerton was appointed to serve as General Manager of the District in June 2019 and has served as City Manager of the City since its incorporation on July 1, 2024. His experience includes 14 years as the City of Stockton’s redevelopment director, three years as the City of Manteca’s city manager and nearly three years as the city manager for the City of Davis. Prior to joining the District/City in 2019, he was the general manager of the Incline Village General Improvement City in Nevada for five years. He earned his bachelor’s degree at the University of Missouri and then gained his master’s degrees in both urban planning and economics from the University of Southern California.

Item 8.1
Mountain House                                               Page 296 of 618 30 Sarah Ragsdale, Administrative Services Director. Ms. Ragsdale has over 30 years of experience as a Certified Public Accountant (CPA). Ms. Ragsdale has a Masters Degree in Business Administration and has worked for the District/City since 2014.

Thomas Retchless, Finance Director. Mr. Retchless is a Certified Public Accountant (CPA) and Certified Management Accountant (CMA). Mr. Retchless has Master Degrees in Business Administration and Urban and Regional Planning. Mr. Retchless has worked for the District/City since 2018.

Koosun Kim, Public Works Director. Mr Kim. Has been the Public Works Director since January 2025. Mr. Kim has over 20 years of experience across public and private sectors.

Rate Setting Procedures for the Systems
Utility rates are set by the City Council for each System, and for each System consist of a “Pledged Facility Component” (which is pledged to the 2019 Payments, 2020A Payments, 2020B Payments, 2023 Payments and 2026 Payments), and a “Usage Fee” (which is used to pay for the operation and maintenance costs of the applicable System).

The initial rates were adopted pursuant to Ordinance 4182(a), which became effective December 10, 2002, and Resolutions R-02-832, R-02-833, R3-03-208, R3-03-209 and an election on May 27, 2003, compliant with Proposition 218. Only the Storm Drain System rates were subject to voter approval at the election held in accordance with Proposition 218. This ordinance and the resolutions set the initial rates which are subsequently adjusted administratively in accordance with provisions of prior legislative actions, with the Pledged Facility Component fees to be adjusted at the greater of 2% or changes in the “ENR Construction Cost Index.” The ENR Construction Cost Index is an index of the cost of common construction materials and unskilled construction labor published periodically by the Engineering News-Record, a publication of the McGraw-Hill Companies. The annual increases in the Pledged Facility Component fees are not subject to annual Proposition 218 procedures.

Effective on July 1, 2022, the operation and maintenance components of the utility rates for the Water System and Wastewater System (but not the Storm Drain System) were increased pursuant to Resolution R-2022-19 and R-2022-20. The new rates were adopted by based on a Rate Study for the Water System and Wastewater System prepared by NBS that was completed in May 2022. The District had previously subsidized the Water System and Wastewater System operations with general fund revenues; although there has been no need to do so since Fiscal Year 2016-17. The new rates adopted effective on July 1, 2022 have further allowed the District/City to meet the operation and maintenance costs of the Water System and Wastewater System without a general fund subsidy. See “WATER SYSTEM,” “WASTEWATER SYSTEM” and “STORM DRAIN SYSTEM” for additional details on the current rates, fees and charges for each System.

Collection Procedures
General. Beginning in Fiscal Year 2026-27, the Pledged Facility Component charges for most customers of the Water System, Wastewater System, and Storm Drain System are included in the property tax roll, rather than in the monthly utility bill. The tables below show the percentage of Pledged Facility Component Revenues collected on the tax roll compared to those being hand billed for Fiscal Year 2026-27:

Item 8.1
Mountain House                                               Page 297 of 618 31 Water System
Tax Roll Hand Bill
PFC Revenues $5,635,496.28 $735,372.04
% of Total 88.46% 11.54%
Wastewater System
Tax Roll Hand Bill
PFC Revenues $4,903,410.18 $120,203.27
% of Total 97.61% 2.39%
Storm Drain System
Tax Roll Hand Bill
PFC Revenues $1,539,802.02 $185,995.35
% of Total 92.06% 7.94%
Customers on Tax Roll. Most customers will be billed the Pledged Facility Component charges on the normal County property tax bill. San Joaquin County has adopted the “Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds” (the “Teeter Plan”), as provided for in Section 4701 et seq. of the California Revenue and Taxation Code. The Teeter Plan provides for the allocation and distribution of property tax levies and collections and of tax sale proceeds. Under this method, each County pays the City 100% of property tax and sewer service charges due to the City and retains any penalties or delinquencies collected to offset such gross payment. There can be no assurance that the County will not discontinue the Teeter Plan or remove the City, or the property tax payable to the City (including the Pledged Facility Component Revenues), from the Teeter Plan in the future.

Delinquent Pledged Facility Component charges, together with any penalties thereon, when recorded as provided by law, constitute a lien upon the real property served and such lien continues until the charges, and penalties thereon, are fully paid or the property sold, as provided in applicable provisions of the California Government Code. Delinquent charges, together with all penalties thereon, are collected in the same manner as the general property taxes levied for the City. Receipt of delinquencies follows the same Teeter Plan schedule as the City’s receipt of property taxes, with a majority of the funds received in January and May. Finally, parcels with delinquent Pledged Facility Component service charges may have their water service disconnected.

Customers Receiving Hand Bills. Some utility customers are exempt from payment of property taxes, such as the City, Lammersville Unified School District, and Delta College. As a result, these customers are not on the tax roll and must be hand billed, as was the prior practice for all customers. City staff calculates the charges and directly hand bills each tax-exempt agency.

Payments are deposited into the Lockbox Account held by the Depository Bank. See “SECURITY FOR THE 2026 BONDS – Flow of Funds Under Master Contracts; Lockbox Agreement.” Newly Established Accounts. Some utility accounts are established after the deadline for adding direct assessments to the tax roll has passed. Most residential connections are established by builders and occur throughout the year. When the home is sold, the buyer assumes the utility account. In these cases, the debt fee charges for the remainder of the fiscal year will be prorated and a property lien filed in that amount. The lien will either be settled during escrow or, if not satisfied, will be placed on the property as a tax lien for the following fiscal year. Alternatively, Item 8.1
Mountain House                                               Page 298 of 618 32 the builder could pay the prorated amount when the building permit is issued. This ensures that the City collects the required fees.

PLEDGED FACILITY COMPONENT REVENUES
General
The Pledged Facility Component of the utility rate charged by the City for customers of each System is pledged to the repayment of the 2026 Bonds. The Pledged Facility Component rate is increased each year at the greater of 2% or the change in the “ENR Construction Cost Index,” which is an index of the cost of common construction materials and unskilled construction labor published periodically by the Engineering News-Record, a publication of the McGraw-Hill Companies. The City also charges a “usage fee” component for customers of each System, which amount is not pledged to the repayment of the 2026 Bonds. See “WATER SYSTEM,” “WASTEWATER SYTEM” and “STORM DRAIN SYSTEM” for additional information on each System, including historical usage fee and Pledged Facility Component charge information.

Pledged Facility Component Charges and Connections
As noted above, the Pledged Facility Component rate for each System is increased each year at the greater of 2% or the change in the ENR Construction Cost Index. This has led to significant increase in the Pledged Facility Component rates since Fiscal Year 2022-23, as shown in the following table.

TABLE 1

HISTORICAL PFC RATES BY SYSTEM
Fiscal Year 2021 through 2026-27
Fiscal
Year
Water System Wastewater System Storm Drain System
PFC % Change PFC % Change PFC % Change
2022-23 $46.44 8.43% $40.13 8.43% $13.52 8.42%
2023-24 48.25 3.90 41.69 3.89 14.05 3.92
2024-25 49.50 2.59 42.77 2.59 14.41 2.56
2025-26 50.49 2.00 43.62 1.99(1) 14.70 2.01
2026-27 51.83 2.65 44.78 2.66 15.09 2.65
(1) Fiscal Year 2025-26 Wastewater % Change was less than 2% due to rounding.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 299 of 618 33 Since Fiscal Year 2015-16, the number of service connections that pay the Pledged Facility Component rate for each System has grown substantially, as shown in the following table.

TABLE 2

HISTORIC SERVICE CONNECTIONS
Fiscal Year 2015-16 through 2024-25
Fiscal
Year
Total
Service
Connections(1)
Increase
from
Prior Year
Percent
Change
2015-16 4,628 242 5.5%
2016-17 4,919 291 6.3
2017-18 5,093 174 3.5
2018-19 5,683 590 11.6
2019-20 6,188 505 8.9
2020-21 6,698 510 8.2
2021-22 7,175 477 7.1
2022-23 7,286 111 1.5
2023-24 7,417 131 1.8
2024-25 7,591 174 2.3
2025-26 8,495 904 11.9
2026-27 8,713 218 2.6
(1) Only meters are included in the total. Some multi-family complexes lack individual meters for each unit.

Source: City of Mountain House.

Historic PFC Revenues
The following table shows the Pledged Facility Component Revenues for each System since Fiscal Year 2015-16.

TABLE 3

PLEDGED FACILITY COMPONENT REVENUES BY SYSTEM
Fiscal Years 2015-16 through 2025-26(1)
Fiscal Year
Water System
PFC Revenues
Wastewater System
PFC Revenues
Storm Drain System
PFC Revenues
2015-16 $2,521,251 $1,779,951 $589,422
2016-17 2,776,942 1,972,362 718,698
2017-18 3,135,513 2,234,730 797,341
2018-19 3,585,549 2,568,168 898,716
2019-20 3,941,256 2,831,252 995,204
2020-21 4,380,558 3,149,768 1,144,514
2021-22 4,756,185 3,461,579 1,236,432
2022-23 5,024,379 3,913,735 1,361,180
2023-24 5,473,782 4,117,147 1,459,724
2024-25 5,926,614 4,587,036 1,567,196
2025-26 5,983,727 4,693,303 1,618,743
(1) Includes revenue from utilities paid during construction.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 300 of 618 34 Historic Billings and Collections
The following table shows historical billings and collections information for the Pledged Facility Component Revenues for each System for the past five fiscal years.

TABLE 4

BILLINGS AND COLLECTIONS OF

PLEDGED FACILITY COMPONENT REVENUES
Fiscal Years 2021-22 to 2025-26(1)
Water System: 2021-22 2022-23 2023-24 2024-25 2025-26
Billings $4,635,087 $5,024,379 $5,473,782 $5,926,614 $5,983,727 Collections 4,573,497 4,935,805 5,221,263 5,155,046
Collection Rate 98.67% 98.24% 95.39% 86.98%(1)
% Change, Billings 25.30 8.94 10.33 8.27 0.96
Wastewater System:

Billings $3,444,767 $3,913,735 $4,117,147 $4,587,036 $4,693,303 Collections 3,108,908 3,697,377 4,060,082 3,953,346
Collection Rate 97.80% 98.61% 98.91% 86.19%(1)
% Change, Billings 5.20 30.04 9.59 11.41 2.32
Storm Drain System:

Billings $1,086,357 $1,361,180 $1,459,724 $1,567,196 $1,618,743 Collections 1,107,398 1,321,983 1,378,689 1,384,779
Collection Rate 98.78% 97.12% 94.45% 88.36%(1)
% Change, Billings 26.50 10.62 13.27 7.36 3.29
__________
(1) Does not include revenue from utilities paid during construction.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 301 of 618 35 Largest Customers
The customers contributing to the largest amount of Pledged Facility Component Revenues for each System for Fiscal Year 2024-25 are set forth in the following tables. [Update to 25-26 once available]
TABLE 5

WATER SYSTEM LARGEST CUSTOMERS BASED ON PFC REVENUES
Fiscal Year 2024-25
Customer
PFC
Revenues % Total(1)
LAMMERSVILLE SCHOOL DISTRICT $342,244.92 6.18%
CITY OF MOUNTAIN HOUSE 270,832.56 4.87
SAN JOAQUIN DELTA COLLEGE 106,450.56 1.91
CAMBRIDGE PLACE HOA 80,294.40 1.44
AVIARA-MOUNTAIN HOUSE APMT 68,844.60 1.24
MOUNTAIN TECHNOLOGY CENTER 52,026.24 0.94
LENNAR HOMES 26,113.09 0.47
MOUNTAIN HOUSE RETAIL LLC 18,049.44 0.32
PINNACLE RIDGE LLC 5,274.72 0.09
SHEA HOMES 4,565.69 0.08
TOTALS $974,696.22 17.52%
____________
(1) Based on total Pledged Facility Component Revenues for Fiscal Year 2024-25 of $5,956,694 Source: City of Mountain House.

TABLE 6

WASTEWATER SYSTEM LARGEST CUSTOMERS BASED ON PFC REVENUES Fiscal Year 2024-25
Customer Revenues % Total(1)
AVIARA - MOUNTAIN HOUSE APMT $115,838.28 2.68%
CAMBRIDGE PLACE HOA 96,849.00 2.24
MOUNTAIN TECHNOLOGY CENTER 80,186.04 1.86
LAMMERSVILLE SCHOOL DISTRICT 77,600.28 1.80
LENNAR HOMES 31,497.34 0.73
MOUNTAIN HOUSE RETAIL LLC 29,253.00 0.68
SAN JOAQUIN DELTA COLLEGE 22,916.88 0.53
CITY OF MOUNTAIN HOUSE 14,857.32 0.34
PINNACLE RIDGE LLC 8,129.76 0.19
ONE VIRTUE LLC 6,507.84 0.15
TOTALS $483,635.74 11.20%
____________
(1) Based on total Pledged Facility Component Revenues for Fiscal Year 2024-25 of $4,687,652.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 302 of 618 36 TABLE 7

STORM DRAIN SYSTEM LARGEST CUSTOMERS BASED ON PFC REVENUES Fiscal Year 2024-25
Customer
PCF
Revenues % Total(1)
CITY OF MOUNTAIN HOUSE $105,223.08 6.97%
LAMMERSVILLE SCHOOL DISTRICT 55,082.28 3.65
MOUNTAIN TECHNOLOGY CENTER 42,877.92 2.84
CAMBRIDGE PLACE HOA 24,694.20 1.64
AVIARA-MOUNTAIN HOUSE APMT 20,568.84 1.36
SAN JOAQUIN DELTA COLLEGE 18,781.20 1.24
MOUNTAIN HOUSE RETAIL LLC 15,825.24 1.05
LENNAR HOMES 8,031.11 0.53
ONE VIRTUE LLC 3,520.68 0.23
RRMS MOUNTAIN HOUSE LLC 2,497.92 0.17
TOTALS $297,102.47 19.69%
____________
(1) Based on total Pledged Facility Component Revenues for Fiscal Year 2021-22 of $1,614,111.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 303 of 618 37 Billable Units and Monthly Revenues
The following table shows the calculation of Billable Units and monthly Pledged Facility Component Revenues for each System, based on the number of Connections for each System as of June 30, 2026.

TABLE 8

WATER SYSTEM BILLABLE UNITS
As of June 30, 2026
Land Use
No. of
Connections(1) EDU Acres(2) Billable Units Monthly PFC Revenues(3) Residential
Low Density 2,713 1.32 -- 3,581.16 185,611.52
Medium Density 4,426 1.00 -- 4,426.00 229,399.58
Medium High Density 1,058 0.53 -- 560.74 29,063.15
High Density 478 0.38 -- 181.64 9,414.40
Non-Residential
Commercial 14 3.38 24.27 82.03 4,251.75
Office Commercial 1 3.38 0.69 2.33 120.88
Freeway Service Commercial 1 3.38 1 3.38 175.19
Industrial 6 2.96 30.73 90.96 4,714.50
Schools-Elementary 8 2.97 171.83 510.34 26,450.67
Schools-High School 1 4.46 46.42 207.03 10,730.53
Community Parks 1 7.54 9.92 74.80 3,876.72
Neighborhood Parks 1 7.54 35.04 264.20 13,693.57
Major Street ROW 1 - 38.31 -- --
Landscape Buffer 1 4.22 20.83 87.90 4,555.99
Wastewater Treatment Plant 1 0.95 1.97 1.87 97.00
Water Plant 1 0.95 1.91 1.81 94.05
Transit 1 6.34 4 25.36 1,314.41
TOTAL 8,087 331.28 10,101.57 $523,563.90
___________
(1) Total number of connections does not match Table 2 totals because condominiums and apartments lack individual meters. Only metered connections are included in Table 2 totals, whereas all such units are counted in billable totals. (2) Non-Residential connections are billed based on number of acres of the parcel. (3) Monthly Pledged Facility Component Revenues calculated using Billable Units at June 30, 2026 and Fiscal Year Ending 2026 Pledged Facility Component Rate for Water System is $51.83 per month.

Source: City of Mountain House; Kosmont Financial Service Item 8.1
Mountain House                                               Page 304 of 618 38 TABLE 9

WASTEWATER SYSTEM BILLABLE UNITS
As of June 30, 2026
Land Use
No. of
Connections(1) EDU Acres(2) Billable Units Monthly PFC Revenues(3) Residential
Low Density 2,713 1.15 -- 3,119.95 139,711.36
Medium Density 4,426 1.00 -- 4,426.00 198,196.28
Medium High Density 1,058 0.74 -- 782.92 35,059.16
High Density 478 0.74 -- 353.72 15,839.58
Non-Residential
Commercial 14 6.34 24.27 153.87 6,890.38
Office Commercial 1 6.34 0.69 4.37 195.89
Freeway Service Commercial 1 6.34 1 6.34 283.91
Industrial 6 5.28 30.73 162.25 7,265.75
Schools-Elementary 8 0.74 171.83 127.15 5,693.97
Schools-High School 1 1.11 46.42 51.53 2,307.34
Community Parks 1 0.26 9.92 2.58 115.50
Neighborhood Parks 1 -- 35.04 -- --
Major Street ROW 1 -- 38.31 -- --
Landscape Buffer 1 -- 20.83 -- --
Wastewater Treatment Plant 1 0.26 1.97 0.51 22.94
Water Plant 1 0.26 1.91 0.50 22.24
Transit 1 6.34 4 25.36 1,135.62
TOTAL 8,713 386.92 9,217.05 $412,739.92
___________
(1) Total number of connections does not match Table 2 totals because condominiums and apartments lack individual meters. Only metered connections are included in Table 2 totals, whereas all such units are counted in billable totals. (2) Non-Residential connections are billed based on number of acres of the parcel. (3) Monthly Pledged Facility Component Revenues calculated using Billable Units at June 30, 2026 and Fiscal Year Ending 2026 Pledged Facility Component Rate for Wastewater System is $44.78 per month.

Source: City of Mountain House; Kosmont Financial Services.

Item 8.1
Mountain House                                               Page 305 of 618 39 TABLE 10

STORM DRAIN SYSTEM BILLABLE UNITS
As of June 30, 2026
Land Use
No. of
Connections(1) EDU Acres(2) Billable Units Monthly PFC Revenues(3) Residential
Low Density 2,713 1 n/a 2,713.00 40,939.17
Medium Density 4,426 1.00 n/a 4,426.00 66,788.34
Medium High Density 1,058 0.56 n/a 592.48 8,940.52
High Density 478 0.39 n/a 186.42 2,813.08
Non-Residential
Commercial 13 10.18 24.27 233.22 3,519.35
Office Commercial 1 8.98 0.69 6.20 93.50
Freeway Service Commercial 2 10.78 1 25.44 383.90
Industrial 5 8.38 27.73 232.38 3,506.57
Schools-Elementary 8 1.8 171.83 309.29 4,667.25
Schools-High School 1 1.8 46.42 83.56 1,260.86
Community Parks 1 2.19 9.92 21.72 327.83
Neighborhood Parks 1 1.8 35.04 63.07 951.76
Major Street ROW 1 10.78 38.31 412.98 6,231.90
Landscape Buffer 1 1.8 20.83 37.49 565.78
Wastewater Treatment Plant 1 8.38 1.97 16.51 249.11
Water Plant 1 8.38 1.91 16.01 241.53
Transit 1 10.18 4 40.72 614.46
TOTALS 8,712 383.92 9,416.49 $142,094.91
___________
(1) Total number of connections does not match Table 2 totals because condominiums and apartments lack individual meters. Only metered connections are included in Table 2 totals, whereas all such units are counted in billable totals. (2) Non-Residential connections are billed based on number of acres of the parcel. (2) Monthly Pledged Facility Component Revenues calculated using Billable Units at June 30, 2026 and Fiscal Year Ending 2026 Pledged Facility Component Rate for Storm Drain System is $15.09 per month.

Source: City of Mountain House; Kosmont Financial Services.

Item 8.1
Mountain House                                               Page 306 of 618 40 Historical PFC Revenues and Debt Service Coverage
The following tables illustrate historical Pledged Facility Component Revenue coverage on Installment Payment obligations for each System for the Fiscal Years ending June 30, 2021 through 2025. Pledged Facility Component rates increase annually at the greater of 2% annual inflation or the ENR index.

Water System Debt Service Coverage
Debt Service Coverage
Fiscal Year Ending June 30,
2021 2022 2023 2024 2025
Pledged Facility Component Revenue $4,380,558 $4,756,185 $5,024,379 $5,473,782 $5,926,614 Annual Installment Payments 2,663,342 3,686,891 3,786,369 4,666,746 4,714,584 Annual Installment Payment Coverage 1.64x 1.29x 1.33x 1.17x 1.26x Wastewater System Debt Service Coverage
Debt Service Coverage
Fiscal Year Ending June 30,
2021 2022 2023 2024 2025
Pledged Facility Component Revenue $3,149,768 $3,461,579 $3,913,735 $4,117,147 $4,587,036 Annual Installment Payments 1,978,274 2,721,257 2,755,522 3,609,589 3,635,860 Annual Installment Payment Coverage 1.59x 1.27x 1.42x 1.14x 1.26x Storm Drain System Debt Service Coverage
Debt Service Coverage
Fiscal Year Ending June 30,
2021 2022 2023 2024 2025
Pledged Facility Component Revenue $1,144,514 $1,236,432 $1,361,180 $1,459,724 $1,567,196 Annual Installment Payments 684,733 958,266 994,209 1,273,543 1,281,522 Annual Installment Payment Coverage 1.67x 1.29x 1.37x 1.15x 1.22x Projected PFC Revenues and Debt Service Coverage
The following tables illustrates approximate debt service coverage on Installment Payment obligations payable from the Pledged Facility Component Revenue for each System, with debt service and projected Pledged Facility Component Revenues allocated by System. The Pledged Facility Component Revenues shown are the amounts projected to be received in the stated Fiscal Year, and are based on the number of Billable Units for each System as of June 30, 2025 multiplied by the monthly Pledged Facility Component for Fiscal Year 2024-25 and then annualized. The Pledged Facility Component Revenues reflect an annual increase of 2% from the prior year on the Pledged Facility Component charge.

The debt service on the 2019 Bonds and 2020A Bonds (i.e., the Parity Obligations) reflects the Bond Year debt service that begins in the corresponding Fiscal Year. The debt service on the 2020B Bonds, the 2023 Bonds and the 2026 Bonds (i.e., the Subordinate Parity Obligations) reflects the Fiscal Year debt service due in the year following the corresponding Fiscal Year. The debt service coverage will likely change over time as there are Billable Units added to each System, the Pledged Facility Component charge increases by a factor greater than 2% and/or additional Subordinate Parity Obligations are issued.

Item 8.1
Mountain House                                               Page 307 of 618 41 TABLE 11
Water System Projected Debt Service Coverage
Parity Obligations and Subordinate Parity Obligations
Fiscal Years 2026-27 through 2055-56
Fiscal Year
Ended
June 30
Water System
PFC
Revenues(1)*
Water
System 2019
Debt
Service(2)
Water
System
2020A Debt
Service(2)
Water
System
2020B Debt
Service(2)
Water System 2023
Debt Service(2)
Water
System 2026
Debt
Service(2)
Debt
Service
Coverage(3)
2027 $6,282,767 $1,114,969 $1,794,400 $1,280,800 $773,506 1.27x 2028 6,534,509 1,118,186 1,794,400 1,361,300 773,506 1.29 2029 6,665,199 1,119,825 2,314,400 923,100 773,506 1.30 2030 6,798,503 1,126,575 2,308,600 1,011,300 773,506 1.30 2031 6,934,473 1,126,325 2,312,200 1,095,500 773,506 1.31 2032 7,073,163 1,134,325 2,304,800 1,185,500 773,506 1.31 2033 7,214,626 1,135,075 2,306,800 1,276,000 773,506 1.31 2034 7,358,918 1,143,825 2,297,800 1,371,700 773,506 1.32 2035 7,506,097 1,145,075 2,288,200 1,477,100 773,506 1.32 2036 7,656,219 1,147,475 2,288,000 1,572,000 773,506 1.32 2037 7,809,343 1,153,975 2,281,800 1,671,300 773,506 1.33 2038 7,965,530 1,154,425 2,284,800 1,769,700 773,506 1.33 2039 8,124,841 1,161,438 2,276,600 1,876,800 773,506 1.33 2040 8,287,337 1,162,150 2,277,600 1,982,200 773,506 1.34 2041 8,453,084 1,166,725 2,272,400 2,090,600 773,506 1.34 2042 8,622,146 -- 3,446,200 2,196,700 773,506 1.34
2043 8,794,589 -- 3,446,800 2,305,200 773,506 1.35
2044 8,970,481 -- 3,449,200 -- 2,139,734 1.61
2045 9,149,890 -- 3,453,200 -- 2,224,200 1.61
2046 9,332,888 -- 3,453,600 -- 2,307,581 1.62
2047 9,519,546 -- 3,455,400 -- 2,394,569 1.63
2048 9,709,937 -- 3,458,400 -- 2,484,750 1.63
2049 9,904,135 -- 3,462,400 -- 2,571,444 1.64
2050 10,102,218 -- 3,462,200 -- 2,664,119 1.65
2051 10,304,262 -- 3,462,800 -- 2,758,506 1.66
2052 10,510,348 -- 3,469,000 -- 2,849,288 1.66
2053 10,720,555 -- 3,470,400 -- -- 3.09
2054 10,934,966 -- 3,472,000 -- -- 3.15
2055 11,153,665 -- 3,473,600 -- -- 3.21
2056 11,376,738 -- -- -- --
(1) PFC Revenues are calculated based on number of Billable Units as defined by the Subordinate Bonds Parity Test. Pledged Revenues do not assume any increase in number of Billable Units after June 30, 2026 but grow at 2% per annum from the prior year PFC charge.
(2) Under each Master Installment Purchase Contract, debt service on Parity Obligations is required to be funded and paid before any Subordinate Parity Obligations. Therefore, the 2019 Bonds’ and 2020A Bonds’ debt service reflect the Bond Year debt service that begins in the corresponding Fiscal Year, and the 2020B Bonds’, the 2023 Bonds’ and the 2026 Bonds’ debt service shown for each Fiscal Year reflects the debt service due in the year immediately following the corresponding Fiscal Year. (3) As noted above, debt service coverage in each year is based on the PFC Revenues projected in the stated Fiscal Year divided by the sum of the debt service on Parity Obligations (i.e., 2019 Bonds and 2020A Bonds) on a Bond Year basis that begins in the corresponding Fiscal Year and the debt service due on the Subordinate Parity Obligations (i.e., 2020B Bonds, the 2023 Bonds and the 2026 Bonds) in the Fiscal Year that follows the stated Fiscal Year. As an example, the Fiscal Year Revenues for Fiscal Year 2021-22 are being divided by the debt service on Parity Obligations due in Bond Year 2022 and debt service on Subordinate Parity Obligations due in Fiscal Year 2022-23. Therefore, the Debt Service shown for Subordinate Parity Obligations in the table for Fiscal Year 2021-22 is for debt service due in Fiscal Year 2022-23.

Source: City of Mountain House; Underwriter for debt service.

Item 8.1
Mountain House                                               Page 308 of 618 42 TABLE 12
Wastewater System Projected Debt Service Coverage
Parity Obligations and Subordinate Parity Obligations
Fiscal Years 2026-27 through 2055-56
Fiscal Year
Ended
(June 30)
Wastewater
System PFC
Revenues(1)
Wastewater
System 2019
Debt
Service(2)
Wastewater
System 2020A
Debt Service(2)
Wastewater
System
2020B Debt
Service(2)
Wastewater
System
2023 Debt
Service(2)
Wastewater
System
2026 Debt
Service(2)
Debt
Service
Coverage(3)
2027 $4,952,879 $854,650 $1,390,400 $800,600 $770,363 1.30x 2028 5,153,457 851,650 1,390,400 865,000 770,363 1.33
2029 5,256,526 857,650 1,795,400 519,500 770,363 1.33
2030 5,361,657 862,150 1,794,200 579,400 770,363 1.34
2031 5,468,890 860,150 1,797,400 641,600 770,363 1.34
2032 5,578,268 866,900 1,789,800 705,900 770,363 1.35
2033 5,689,833 866,900 1,791,800 772,100 770,363 1.35
2034 5,803,630 870,400 1,788,000 844,900 770,363 1.36
2035 5,919,702 877,150 1,778,600 914,100 770,363 1.36
2036 6,038,096 881,000 1,773,800 989,500 770,363 1.37
2037 6,158,858 879,100 1,773,400 1,060,900 770,363 1.37 2038 6,282,035 881,600 1,777,200 1,133,200 770,363 1.38 2039 6,407,676 886,413 1,770,000 1,211,100 770,363 1.38 2040 6,535,829 890,250 1,767,200 1,284,400 770,363 1.39 2041 6,666,546 893,113 1,768,600 1,358,000 770,363 1.39 2042 6,799,877 -- 2,664,000 1,436,600 770,363 1.40
2043 6,935,875 -- 2,662,600 1,519,800 770,363 1.40
2044 7,074,592 -- 2,663,800 -- 2,131,694 1.48
2045 7,216,084 -- 2,667,400 -- 2,216,366 1.48
2046 7,360,406 -- 2,668,200 -- 2,299,953 1.48
2047 7,507,614 -- 2,671,200 -- 2,382,250 1.49
2048 7,657,766 -- 2,671,200 -- 2,472,844 1.49
2049 7,810,921 -- 2,673,200 -- 2,559,956 1.49
2050 7,967,140 -- 2,677,000 -- 2,653,056 1.49
2051 8,126,482 -- 2,677,400 -- 2,747,869 1.50
2052 8,289,012 -- 2,679,400 -- 2,839,075 1.50
2053 8,454,792 -- 2,682,800 -- -- 3.15
2054 8,623,888 -- 2,682,400 -- -- 3.21
2055 8,796,366 -- 2,683,200 -- -- 3.28
2056 8,972,293 -- -- -- --
(1) PFC Revenues are calculated based on number of Billable Units as defined by the Subordinate Bonds Parity Test. Pledged Revenues do not assume any increase in number of Billable Units after June 30, 2026 but grow at 2% per annum from the prior year PFC charge.
(2) Under each Master Installment Purchase Contract, debt service on Parity Obligations is required to be funded and paid before any Subordinate Parity Obligations. Therefore, the 2019 Bonds’ and 2020A Bonds’ debt service reflect the Bond Year debt service that begins in the corresponding Fiscal Year, and the 2020B Bonds’, the 2023 Bonds’ and the 2026 Bonds’ debt service shown for each Fiscal Year reflects the debt service due in the year immediately following the corresponding Fiscal Year. (3) As noted above, debt service coverage in each year is based on the PFC Revenues projected in the stated Fiscal Year divided by the sum of the debt service on Parity Obligations (i.e., 2019 Bonds and 2020A Bonds) on a Bond Year basis that begins in the corresponding Fiscal Year and the debt service due on the Subordinate Parity Obligations (i.e., 2020B Bonds, the 2023 Bonds and the 2026 Bonds) in the Fiscal Year that follows the stated Fiscal Year. As an example, the Fiscal Year Revenues for Fiscal Year 2021-22 are being divided by the debt service on Parity Obligations due in Bond Year 2022 and debt service on Subordinate Parity Obligations due in Fiscal Year 2022-23. Therefore, the Debt Service shown for Subordinate Parity Obligations in the table for Fiscal Year 2021-22 is for debt service due in Fiscal Year 2022-23.

Source: City of Mountain House; Underwriter for debt service.

Item 8.1
Mountain House                                               Page 309 of 618 43 TABLE 13
Storm Drain System Projected Debt Service Coverage
Parity Obligations and Subordinate Parity Obligations
Fiscal Years 2026-27 through 2055-56
Fiscal Year
Ended
Storm Drain
System PFC
Revenues(1)
Storm Drain
System 2019 Debt
Service(2)
Storm Drain
System 2020A
Debt Service(2)
Storm Drain System
2020B Debt
Service(2)
Storm Drain
System 2023
Debt Service(2)
Storm Drain
System
2026 Debt
Service(2)
Debt
Service
Coverage(3)
2027 $1,705,139 $271,200 $468,200 $361,900 $249,438 1.26x 2028 1,769,695 274,450 468,200 379,800 249,438 1.29
2029 1,805,089 276,700 608,200 259,500 249,438 1.30
2030 1,841,191 278,450 607,600 281,000 249,438 1.30
2031 1,878,015 274,700 611,800 301,500 249,438 1.31
2032 1,915,575 275,700 610,600 325,900 249,438 1.31
2033 1,953,887 276,200 609,200 354,000 249,438 1.31
2034 1,992,964 281,200 607,600 375,800 249,438 1.32
2035 2,032,824 280,450 605,800 401,300 249,438 1.32
2036 2,073,480 283,700 603,800 425,400 249,438 1.33
2037 2,114,950 281,650 606,600 453,000 249,438 1.33
2038 2,157,249 284,450 604,000 479,000 249,438 1.33
2039 2,200,394 286,325 601,200 508,300 249,438 1.34
2040 2,244,402 287,875 598,200 535,800 249,438 1.34
2041 2,289,290 289,100 600,000 561,500 249,438 1.35
2042 2,335,075 -- 886,400 590,300 249,438 1.35
2043 2,381,777 -- 891,000 617,100 249,438 1.36
2044 2,429,412 -- 889,600 -- 695,053 1.53
2045 2,478,001 -- 887,400 -- 720,356 1.54
2046 2,527,561 -- 889,400 -- 748,700 1.54
2047 2,578,112 -- 890,400 -- 770,084 1.55
2048 2,629,674 -- 890,400 -- 799,406 1.56
2049 2,682,268 -- 889,400 -- 830,913 1.56
2050 2,735,913 -- 892,400 -- 854,569 1.57
2051 2,790,631 -- 894,200 -- 885,675 1.57
2052 2,846,444 -- 894,800 -- 914,019 1.57
2053 2,903,373 -- 894,200 -- -- 3.25
2054 2,961,440 -- 892,400 -- -- 3.32
2055 3,020,669 -- 894,400 -- -- 3.38
2056 3,081,082 -- -- -- --
(1) PFC Revenues are calculated based on number of Billable Units as defined by the Subordinate Bonds Parity Test. Pledged Revenues do not assume any increase in number of Billable Units after June 30, 2026 but grow at 2% per annum from the prior year PFC charge. (2) Under each Master Installment Purchase Contract, debt service on Parity Obligations is required to be funded and paid before any Subordinate Parity Obligations. Therefore, the 2019 Bonds’ and 2020A Bonds’ debt service reflect the Bond Year debt service that begins in the corresponding Fiscal Year, and the 2020B Bonds’, the 2023 Bonds’ and the 2026 Bonds’ debt service shown for each Fiscal Year reflects the debt service due in the year immediately following the corresponding Fiscal Year. (3) As noted above, debt service coverage in each year is based on the PFC Revenues projected in the stated Fiscal Year divided by the sum of the debt service on Parity Obligations (i.e., 2019 Bonds and 2020A Bonds) on a Bond Year basis that begins in the corresponding Fiscal Year and the debt service due on the Subordinate Parity Obligations (i.e., 2020B Bonds, the 2023 Bonds and the 2026 Bonds) in the Fiscal Year that follows the stated Fiscal Year. As an example, the Fiscal Year Revenues for Fiscal Year 2021-22 are being divided by the debt service on Parity Obligations due in Bond Year 2022 and debt service on Subordinate Parity Obligations due in Fiscal Year 2022-23. Therefore, the Debt Service shown for Subordinate Parity Obligations in the table for Fiscal Year 2021-22 is for debt service due in Fiscal Year 2022-23.

Source: City of Mountain House; Underwriter for debt service.

Item 8.1
Mountain House                                               Page 310 of 618 44 WATER SYSTEM
General
The City’s water distribution system (the “Water System”) consists of approximately 90 miles of lines and three treated water storage tanks. One treated water storage tank is located at the City’s water treatment plant facility and the other two are located at the facility near San Joaquin Delta College South Campus at Mountain House. The Water System presently serves Neighborhoods A, B, C, D, E, F, G and H and the Delta College Campus. Portions of the Water System are sized to serve the Mountain House community at buildout. Additional lines will be constructed by the developers as additional Neighborhoods (I, J, K and L) are ready for development.

Currently the City operates a conventional surface water treatment plant with UV and chloramines disinfection with a 15 million gallon per day (mgd) capacity with approval from the State Water Resources Control Board (“SWRCB”), Division of Drinking Water (“DDW”). An additional expansion to bring total capacity to 20 mgd is expected to be completed in the near future. In addition, the West Side Booster pump station was completed in 2009. All new treatment plant facilities have extensive instrumentation and control systems and an integrated state of the art security system. The water treatment plant is currently operated under a third-party contract with Inframark.

The City does not currently use groundwater as a potable water supply sources. However, the City monitors groundwater through its operations and maintenance contractor and, when needed, through contracts with private water quality laboratories approved by the SWRCB DDW and California Department of Public Health (“CDPH”). Bacteriological and chemical tests of water samples from raw water entering the water treatment plant and from the distribution system are taken and analyzed on a frequent and routine basis in compliance with regulations of the Environmental Protection Agency and CDPH. The contract laboratories are certified by the State and have all the equipment specified by Standard Methods, the 21st edition.

At present, there are two office building accounts, one shopping center, eight elementary schools, one high school, and the Delta Community College campus accessing the Water System. All other customers are residential accounts. As the Mountain House community is developed, there will be more residential and commercial accounts. No one account now represents more than 5% of the Water System usage or Water System revenue nor is any one account expected to account for 5% or more of the Water System usage or Water System revenue through buildout of the Mountain House community.

Water Supply
BBID Supply. Water for the City has been acquired through an agreement with the ByronBethany Irrigation District (“BBID”) for an available 9,413 acre-feet (or approximately 3.067 billion gallons) of pre-1914 water rights per year. The agreement does not have an expiration date, and does not require the City to purchase any minimum amount of water. A pre-1914 appropriative right, established under then-existing legal procedure for fixing the priority of an appropriation of water, generally can be maintained only by continuous beneficial use of the water and lost only by voluntary abandonment or forfeiture by nonuse for a period of five years. The City is the only municipal water supplier that uses BBID raw water; the rest of the BBID water is used for agricultural purposes.

Item 8.1
Mountain House                                               Page 311 of 618 45 Additional water may be obtained from BBID through agreement if the need develops, although the current allocation has been projected to be adequate to meet the needs of planned development within the Mountain House Master Plan area. The raw water is provided by BBID through its pump station at the California Aqueduct near the Harvey O. Banks Pumping Plant and is delivered through a BBID owned 30-inch pipeline to the City’s water treatment plant. The pumping plant is 2.8 miles from the treatment plant and has a pumping capacity of 20 mgd.

Old River Riparian Rights. In addition to the water available by agreement with BBID, the City has a riparian right to 700 acre-feet (or approximately 228 million gallons) from the Old River. The Old River is expected to be diverted in the future to provide water for the community based on the rights of the parcels in adjacent neighborhoods to such use. The current projected demand for the riparian properties at build-out is approximately 2,445 acre-feet, which is substantially more than the 700 acre-feet of rights possessed by the City. Accordingly, these properties will also receive a portion of the BBID water supply.

Impact of Recent Droughts. California is subject to drought from time-to-time, which can have an impact on communities such as Mountain House. See “RISK FACTORS – Seismic, Topographic and Climatic Conditions.”
Water Purchases and Deliveries
The table below shows the historical purchases of raw water from BBID for calendar years 2021 through 2025.

TABLE 14

WATER SYSTEM

RAW WATER PURCHASES (IN MILLION GALLONS)
Calendar Years 2021 through 2025
Calendar
Year
Raw Water
Purchases (MG)
2021 1,687.3
2022 2,008.1
2023 1,467.8
2024 1,644.9
2025 1,653.8
Source: City of Mountain House.

The City records the volume of water delivered by the Water System. The following table summarizes metered water usage, in million gallons, for calendar years 2021 through 2025. As noted above, the City has acquired pre-1914 water rights to approximately 3.198 million gallons of water per year through its agreement with BBID.

Item 8.1
Mountain House                                               Page 312 of 618 46 TABLE 15

WATER SYSTEM

METERED WATER USAGE (IN MILLION GALLONS)
Calendar Years 2021 – 2025
Calendar
Year
City
Landscaping Residential Commercial Schools
Total Annual
Metered Usage
2021 191.70 1,066.40 22.60 152.60 1,433.30
2022 199.10 993.20 21.30 194.00 1,407.60
2023 114.80 912.80 21.50 99.60 1,148.70
2024 181.02 1,246.70 77.01 122.78 1,627.51
2025 175.65 1,161.99 119.65 120.52 1,577.82
_______________
Source: City of Mountain House.

Water Quality Compliance
The kind and degree of water treatment by the City is regulated, to a large extent, by the federal government. Clean water standards set forth in the Safe Drinking Water Act and the Environmental Protection Act continue to set standards for the operations of systems such as the Water System and to mandate its use of technology. In the event that the SWRCB or the federal government, either acting through the Environmental Protection Agency or by adoption of additional legislation, should impose stricter quality standards applicable to the Water System, its expenses could increase accordingly and rates and charges might have to be increased to offset those expenses. It is not possible to predict the direction which State and federal regulation will take with respect to water treatment.

Rates and Charges
General. In accordance with California law, the City may, from time to time, fix, alter or change charges and other fees related to the Water System. Consequently, the City periodically reviews Water System rates and charges. The most recent review of Water System rates and charges was initiated in 2021 and resulted in the adoption by the City, in a proceeding pursuant to Proposition 218, of new rates and charges effective as of July 1, 2022. Neither the City nor the Water System is subject to the jurisdiction of, or regulation by, the California Public Utilities Commission or any other regulatory body in connection with the establishment of charges and fees related to the Water System. See “RISK FACTORS – Proposition 218” herein for a discussion of the treatment of the City’s rates and charges in light of Proposition 218.

The City is authorized under Section MH 3-1302 of Chapter 3, Division 1 of Title 3 of the City of Mountain House Appendix to the Ordinance Code of San Joaquin County and City Resolution R-MMXVII-30 (the “Water System Fee Ordinance”) to charge the following fees and charges in connection with the Water System. The portion of the Water System rate identified as “Usage Fee” is allocated to operations and maintenance of the Water System and the portion of the Water System rate identified as “Pledged Facility Component Rate” is allocated to repayment of 2026 Bonds, including the 2019 Bonds and 2020 Bonds, and of developers’ advances pursuant to the MARA for the costs of installing Water System infrastructure. The Usage Fee is comprised of a per-unit charge based on water consumption and a fixed base charge.

Item 8.1
Mountain House                                               Page 313 of 618 47 Between 2009 and 2013, Usage Fees rates for the Water System were increased annually by the amount of change in the Consumer Price Index. During the period 2014 through 2016, Usage Fee rates were not increased, pending the outcome of a rate study. The City adopted new rates in a proceeding pursuant to Proposition 218, effective July 1, 2017 through July 1, 2021. In 2022, the City undertook an additional rate increase proceeding pursuant to Proposition 218, and adopted new Usage Fee rates for the Water System, effective July 1, 2022 through July 1, 2026. [City to advise if no rate study/new rate increases contemplated] The Pledged Facility Component Rates increase annually by the greater of 2% or the amount of change in the Engineering News-Record Construction Cost Index.

Collections and Delinquencies. The City bills the customers of the Water System, Wastewater System, and Storm Drain System on a single combined monthly bill. See “THE CITY – Collection Procedures; Delinquency Rate” for additional information.

Historic and Current Rates. The following table presents the current and past Water System rates since July 1, 2021 for a medium density single-family dwelling unit using 19.2 units (where one unit is 100 cubic feet or 748 gallons) of measured water. The usage rate consists of both a fixed service charge and a volumetric charge based on water usage.

TABLE 16

WATER SYSTEM

HISTORIC AND CURRENT MONTHLY RESIDENTIAL RATES
Effective July 1 of Each Year
Year Usage Fee
Pledged Facility
Component(1) Total
2021 $36.99 $42.83 $79.82
2022 38.50 46.44 84.94
2023 41.20 48.25 89.45
2024 44.09 49.50 93.59
2025 46.29 50.49 96.78
Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 314 of 618 48 The table below sets forth a comparison of an average water service monthly bill for a single-family residential unit in the City to those of surrounding communities (utilizing a hypothetical 19.2 units of water per month). The Mountain House fee is a combination of Usage Fee and Pledged Facility Component Rates. Most communities collect only a portion of their infrastructure costs through the monthly utility charge and also charge a one-time impact fee at the time the building permit is issued. The City does not use an “impact fee”, but instead collects infrastructure costs on the monthly bill through the Pledged Facility Component rates. Upon initial connection, however, the City charges builders six months’ of fees in advance. Such fees are referred to as the “Construction Water Deposit” and include prepayment for water, wastewater, and storm drain Pledged Facility Component rates and Usage Fees.

TABLE 17

WATER SYSTEM
MONTHLY RESIDENTIAL BILL COMPARISON (1)
As of August 1, 2026
Community
Monthly
Residential Bill
Mountain House $45.24
Modesto 65.66
Tracy 66.81
Manteca 79.12
Lathrop 84.30
Stockton 84.35
Dublin San Ramon Services District 138.07
Pleasanton 140.68
(1) Includes monthly meter and commodity charges.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 315 of 618 49 Historic Operating Results
The following table is a summary of historical operating results of the Water System for Fiscal Years ending June 30, 2021 through 2025. The following summary of operating results is qualified in its entirety by reference to the City’s year-end financial summaries. The Net Operating Revenues of the Water System are not pledged to the 2026 Bonds in any manner.

TABLE 18

WATER SYSTEM HISTORICAL OPERATING RESULTS
Fiscal Years Ending June 30, 2021 – 2025
Operating Revenue 2021 2022 2023 2024 2025
Charges for Service $4,237,568 $4,333,384 $4,627,880 $5,383,638 $ 5,887,951 Miscellaneous Revenue(1) 30,490 213,273 347,042 911,044 491,856 Total Operating Revenue $4,268,058 $4,546,657 $4,974,922 $6,294,682 $6,379,807 Operating Expenses(2)
General and Administration $1,764,762 $2,253,894 $2,527,226 $2,989,631 $2,635,201 Maintenance and Operations 1,576,043 1,624,702 2,055,244 2,335,062 2,564,536 Total Operating Expenses $3,340,805 $3,878,596 $4,582,470 $5,324,693 $5,199,737 Net Operating Revenues over Expenses $927,253 $668,061 $392,452 $969,989 $1,180,070 Capital Expenditures $166,980 $299,725 $464,283 $29,137 $-- Total Operating Expenses and CapEx 3,507,785 4,178,321 5,046,753 5,353,830 5,199,737 Net Operating Gain/Loss over Expenses and Capex $760,273 $368,336 $(71,831) $940,852 $1,180,070 Transfer From General Fund -- -- 71,831 -- --
Net Revenue After General Fund Contribution $760,273 $368,336 $0 $940,852 $1,180,070 _______________
(1) Includes interest earnings on fund balances.
(2) Does not include depreciation.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 316 of 618 50 Projected Operating Results
The following table sets forth projected operating results for the Water System for the Fiscal Years ending June 30, 2026 through 2030. The projections assume salary adjustments, inflation allowances, changes in personnel requirements and growth in connections based on inflation where appropriate, and growth in connections where this formula is applicable, as indicated in the table. The Net Operating Revenues of the Water System are not pledged to the 2026 Bonds in any manner.

TABLE 19

WATER SYSTEM PROJECTED OPERATING RESULTS
Fiscal Years Ending June 30, 2026 – 2030
Operating Revenue 2026 2027 2028 2029 2030
Charges for Service(1) $6,503,851 $6,959,771 $7,568,751 $8,220,758 $8,918,566 Miscellaneous Revenue(2) 50,000 50,000 50,000 50,000 50,000 Total Operating Revenue $6,553,851 $7,009,771 $7,618,751 $8,270,758 $8,968,566 Operating Expenses(3)
General and Administration $863,007 $992,866 $1,022,652 $1,053,332 $1,084,931 Maintenance and Operations 5,664,426 5,286,579 5,445,176 5,608,532 5,776,788 Total Operating Expenses $6,527,433 $6,279,445 $6,467,828 $6,661,863 $6,861,719 Net Operating Revenues over Expenses $26,418 $730,326 $1,150,923 $1,608,895 $2,106,847 Capital Expenditures $2,300,000 $1,590,000 $1,500,000 $1,500,000 $1,500,000 Total Operating Expenses and CapEx 8,827,433 7,869,445 7,967,828 8,161,863 8,361,719 Net Operating Gain over Expenses and Capex $(2,273,582) $(859,674) $(349,077) $108,895 $606,847 _______________
(1) Future charges for service reflect adopted rate increases through the fiscal year ending June 30, 2027. It also includes estimated increases in residential units.
(2) Includes interest earnings on fund balances.
(3) Does not include depreciation. Future operating expenses are projected to increase 4% annually.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 317 of 618 51 WASTEWATER SYSTEM
General
The City’s wastewater collection system (the “Wastewater System”) is a gravity system to the treatment plant, consisting of approximately 67 miles of pipelines, ranging in size from 8- inch to 24-inch diameter. The Wastewater System presently serves Neighborhoods A, B, C, D, E, F, G, and H and the Delta College Campus. Portions of the Wastewater System are sized to serve the Mountain House community at buildout. Additional lines will be constructed by the developers as additional Neighborhoods (I, J, K and L) are ready for development. At build-out, approximately 80% of the service area is expected to drain by gravity to the treatment plant through the backbone collection system. The remaining 20% will be pumped to the treatment plant through lift stations and force mains. The City contracts with Inframark LLC with respect to the operation of the wastewater treatment plant.

The wastewater treatment plant is expected to be sized at total build-out to provide 5.4 mgd Average Dry Weather Flow (“ADWF”) of treatment capacity (all future references to treatment plant capacity will be ADWF). Current treatment plant capacity is 3 mgd and an average demand of 1.0 mgd. The treatment system consists of a headworks, an anoxic reactor for flow/load equalization and carbon source for denitrification, sequencing batch reactors for biological treatment including nitrification and denitrification, cloth media filtration, and UV light disinfection. The treatment plant also includes two lined, aerated storage reservoirs for use during emergency situations and during plant maintenance. Phase III of the wastewater treatment plant will include a larger influent pumping system and effluent pumping system, a larger bar screen, and an additional batch reservoir. The design capacity of the treatment facility and all related components will be 5.4 mgd following construction of the Phase III improvements. Tertiary effluent from the treatment plant is discharged into Old River pursuant to a permit from the Regional Water Quality Control Board.

Construction of the final Phase III expansion of the wastewater treatment plant is almost complete and construction is expected to be completed in 2023. The expansion will utilize stateof-the-art technology, such as a Membrane Bioreactor (“MBR”) and increase the capacity of the treatment plant to 5.4 mgd. MBR plants utilize a membrane process like microfiltration or ultrafiltration with a biological wastewater treatment component. This process is widely used for municipal and industrial wastewater treatment. Design and construction will be funded by the developers with reimbursement from the proceeds of future Subordinate Parity Obligations issued or incurred by the City, or Pledge Facility Component Revenues of the Wastewater System available after payment of applicable payment obligations related to the Parity Obligations and Subordinate Parity Obligations. Future expansion will be undertaken as needed and the fully completed facilities, once fully completed, will provide the dry weather treatment capacity of 5.4 mgd noted above. All new treatment plant facilities will have extensive instrumentation and control systems and an integrated state of the art security system.

Treated effluent from the wastewater treatment plant is discharged to the Old River pursuant to Wastewater Discharge Requirements Order No. R5-2023-0033-01, NPDES Permit No. CA0084271, which became effective on August 1, 2023 and will expire on July 31, 2028. This order replaces prior Order No. R5-2017-0039, which expired on January 31, 2023 and was administratively continued pending reissuance of the permit. The City has never been issued a cease and desist order for its Wastewater System operations and the City is currently in compliance with its discharge permit requirements. However, the City has received certain Item 8.1
Mountain House                                               Page 318 of 618 52 notices of violation of its NPDES permit in 2018 and in 2019, resulting in fines that have been paid by the City’s outside contractor, Inframark LLC.

The City does not currently deliver recycled water due to the high salinity of the wastewater effluent treated by the wastewater treatment plant. However, the City intends to use Title 22 recycled water from the wastewater treatment plant, blended with riparian water from the Old River, to irrigate certain landscaping in the Master Plan area in the future. The timing and volume of recycled water use has not yet been determined.

Rates and Charges
General. In accordance with California law, the City may, from time to time, fix, alter or change charges and other fees related to the Wastewater System. Consequently, the City periodically reviews Wastewater System rates and charges. The most recent review of Wastewater System rates and charges was initiated in 2021 and resulted in the adoption by the City, in a proceeding pursuant to Proposition 218, of new rates and charges effective as of July 1, 2022. Neither the City nor the Wastewater System is subject to the jurisdiction of, or regulation by, the California Public Utilities Commission or any other regulatory body in connection with the establishment of charges and fees related to the Wastewater System. See “RISK FACTORS – Proposition 218” herein for a discussion of the treatment of the City’s rates and charges in light of Proposition 218.

The City is authorized under Section MH 3-1302 of Chapter 3, Division 1 of Title 3 of the City of Mountain House Appendix to the Ordinance Code of San Joaquin County and City Resolution No. MMXVII-29 (the “Wastewater System Fee Ordinance”) to charge the following fees and charges in connection with the Wastewater System. The portion of the Wastewater System rate identified as “Usage Fee” is allocated to operations and maintenance of the Wastewater System, while the portion of the Wastewater System rate identified as “Pledged Facility Component” is allocated to repayment of developers’ advances pursuant to the MARA for the costs of installing Wastewater System infrastructure.

The Usage Fee realization declined through 2009 because an increasing proportion of the Water System rate was allocated to the Pledged Facility Component through that year. Between 2009 and 2013, Usage Fees rates for the Wastewater System were increased annually by the amount of change in the Consumer Price Index. During the period 2014 through 2016, Usage Fee rates were not increased, pending the outcome of a rate study. The City adopted new rates in a proceeding pursuant to Proposition 218 effective July 1, 2017 through July 1, 2021. In 2022, the City undertook an additional rate increase proceeding pursuant to Proposition 218, and adopted new Usage Fee rates for the Water System, effective July 1, 2022 through July 1, 2026. [City to advise if no rate study/new rate increases contemplated] The Pledged Facility Component Rates increase annually by the greater of 2% or the amount of change in the Engineering News-Record Construction Cost Index.

Collections and Delinquencies. The City bills the customers of the Water System, Wastewater System, and Storm Drain System on a single combined monthly bill. See “THE CITY – Collection Procedures; Delinquency Rate” for additional information.

Item 8.1
Mountain House                                               Page 319 of 618 53 Historic and Current Rates. The following table presents the current and past Wastewater System rates since July 1, 2021 for a medium density single-family dwelling unit.

TABLE 20

WASTEWATER SYSTEM
HISTORIC AND CURRENT MONTHLY RATES(1)
Effective July 1 of Each Year
Year Usage Fee
Pledged Facility
Component(1) Total
2021 $35.45 $37.01 $72.46
2022 40.27 40.13 80.40
2023 40.27 41.69 81.96
2024 40.27 42.77 83.04
2025 40.27 43.62 83.89
Source: City of Mountain House.

The table below sets forth a comparison of an average monthly bill for wastewater services for a single-family residential unit in the City to those of surrounding communities. The Mountain House fee is a combination of Usage Fee and Pledged Facility Component Rates to fund infrastructure reimbursement to developers. Most communities collect only a portion of their infrastructure costs through the monthly utility charge and also charge a one-time impact fee at the time the building permit is issued. The City does not charge an “impact fee” or “connection fee,” but instead collects infrastructure costs on the monthly bill through the Pledged Facility Component. Upon initial connection, however, the City charges developers six months’ fees in advance. These six months’ fees are known as the “Construction Water Deposit” and include prepayment of water, wastewater and storm drain Pledged Facility Component fees and Usage Fees.

TABLE 21

WASTEWATER SYSTEM
MONTHLY RESIDENTIAL BILL COMPARISON(1)
As of August 1, 2026
Community
Monthly
Residential Bill
Mountain House $40.27
Dublin San Ramon Services District 46.59
Pleasanton 48.64
Modesto 49.57
Stockton 62.04
Tracy 63.37
Manteca 64.50
Lathrop 84.00
(1) Includes monthly meter and commodity charges
Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 320 of 618 54 Historic Operating Results
The following table is a summary of historical operating results of the Wastewater System for Fiscal Years ending June 30, 2021 through 2025. The following summary of operating results is qualified in its entirety by reference to the City’s year-end financial summaries. The Net Operating Revenues of the Wastewater System are not pledged to the 2026 Bonds in any manner.

TABLE 22

WASTEWATER SYSTEM HISTORICAL OPERATING RESULTS
Fiscal Years Ending June 30, 2021 – 2025
Operating Revenue 2021 2022 2023 2024 2025
Charges for Service $2,955,334 $3,266,149 $3,892,324 $3,838,371 $4,153,829 Miscellaneous Revenue(1) 17,644 (33,502) 34,512 873,597 697,781 Total Operating Revenue $2,972,978 $3,232,647 $3,926,836 $4,711,968 $4,851,610 Operating Expenses(2)
General and Administration $1,460,481 $1,837,438 $1,963,986 $2,262,876 $1,947,562 Maintenance and Operations 561,136 569,992 660,593 889,132 906,768 Total Operating Expenses $2,021,617 $2,407,430 $2,624,579 $3,152,008 $2,854,330 Net Operating Revenues over Expenses $951,361 $825,217 $1,302,257 $1,559,960 $1,997,280 Capital Expenditures $418,934 $97,708 $140,957 $202,717 $-- Total Operating Expenses and CapEx 2,440,551 2,505,138 2,765,536 3,354,725 2,854,330 Net Operating Gain/Loss over Expenses and CapEx $532,427 $727,509 $1,161,300 $1,357,243 $1,997,280 Transfer from General Fund -- -- -- -- --
Net Revenue After General Fund Contribution $532,427 $727,509 $1,161,300 $1,357,243 $1,997,280 _______________
(1) Includes interest earnings on fund balances.
(2) Does not include depreciation.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 321 of 618 55 Projected Operating Results
The following table sets forth projected operating results for the Wastewater System for the Fiscal Years ending June 30, 2 through 2030. The projections assume salary adjustments, inflation allowances, changes in personnel requirements and growth in connections based on inflation where appropriate, and growth in connections where this formula is applicable, as indicated in the table. The Net Operating Revenues of the Wastewater System are not pledged to the 2026 Bonds in any manner.

TABLE 23

WASTEWATER SYSTEM PROJECTED OPERATING RESULTS
Fiscal Years Ending June 30, 2026 – 2030
Operating Revenue 2026 2027 2028 2029 2030
Charges for Service(1) $4,195,367 $4,279,274 $4,439,747 $4,600,220 $4,760,692 Miscellaneous Revenue(2) 50,000 50,000 50,000 50,000 50,000 Total Operating Revenue $4,245,367 $4,329,274 $4,489,747 $4,650,220 $4,810,692 Operating Expenses(3)
General and Administration $830,596 $955,950 $984,629 $1,014,167 $1,044,592 Maintenance and Operations 2,965,365 3,225,123 3,321,877 3,421,533 3,524,179 Total Operating Expenses $3,795,961 $4,181,073 $4,306,505 $4,435,700 $4,568,771 Net Operating Revenues over Expenses $449,406 $148,201 $183,242 $214,519 $241,921 Capital Expenditures $0 $75,000 $75,000 $75,000 $75,000 Total Operating Expenses and CapEx 3,795,961 4,256,073 4,381,505 4,510,700 4,643,771 Net Operating Gain over Expenses and
Capex
$449,406 $73,201 $108,242 $139,519 $166,921
_______________
(1) Future charges for service reflect adopted rate increases through the fiscal year ending June 30, 2027. It also includes estimated increases in residential units.
(2) Includes interest earnings on fund balances.
(3) Does not include depreciation. Future operating expenses are projected to increase 4% annually.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 322 of 618 56 STORM DRAIN SYSTEM
General
The City’s storm drain system (the “Storm Drain System”) is a gravity system consisting of approximately 70 miles of lines that discharge to detention ponds. The Storm Drain System presently serves Neighborhoods A, B, C, D, E, F, G, and H, and the Delta College Campus.

Additional infrastructure will be constructed by the developers as additional Neighborhoods (I, J, K and L) are ready for development.

Stormwater detention basins serve as regulation storage of “first flush” runoff and then discharge into Mountain House Creek and eventually on to the Old River. The first of two planned detention basins (located at the junction of Byron Road and Mountain House Creek) is complete and operational. The second planned detention basin (South of Grant Line Road) is currently under construction and nearly complete. The Storm Drain System is a state-of-the-art system that includes primary filtration at street level collection sites using carbon-based filters for treatment of contaminants and debris, which then flows via gravity to the remainder of the system.

Rates and Charges
General. In accordance with California law, the City may, from time to time, fix, alter or change charges and other fees related to the Storm Drain System. Consequently, the City periodically reviews Storm Drain System rates and charges. Under the City’s current authorized rates and charges authorization, rates and charges had been adjusted administratively each year through the year ended June 30, 2014 by the City by reference to the Consumer Price Index. In the event that the City determines that the annual administrative increase would be insufficient, the City would be required to comply with the requirements of Proposition 218 for a rate increase proceeding, including an election. Neither the City nor the Storm Drain System is subject to the jurisdiction of, or regulation by, the California Public Utilities Commission or any other regulatory body in connection with the establishment of charges and fees related to the Storm Drain System.

See “RISK FACTORS – Proposition 218” herein for a discussion of the treatment of the City’s rates and charges in light of Proposition 218.

The City is authorized under Section MH 3-1302 of Chapter 3, Division 1 of Title 3 of the City of Mountain House Appendix to the Ordinance Code of San Joaquin County and Resolution R-02-833 (the “Storm Drain System Fee Ordinance”) to charge the following fees and charges in connection with the Storm Drain System. Pursuant to provisions of Proposition 218, the Storm Drain Rates were confirmed in an election held in May 2003. The portion of the Storm Drain System rate identified as “Usage Fee” is allocated to operations and maintenance of the Storm Drain System, while the portion of the Storm Drain System rate identified as “Pledged Facility Component” is allocated to repayment of developers’ advances pursuant to the MARA for the costs of installing Storm Drain System infrastructure.

Collections and Delinquencies. The City bills the customers of the Water System, Wastewater System, and Storm Drain System on a single combined monthly bill. See “THE CITY – Collection Procedures; Delinquency Rate” for additional information.

Item 8.1
Mountain House                                               Page 323 of 618 57 Historic and Current Rates. The following table presents the current and past Storm Drain System rates since July 1, 2021.

TABLE 24

STORM DRAIN SYSTEM

HISTORIC AND CURRENT MONTHLY RATES
Effective July 1 of Each Year
Year Usage Fee
Pledged Facility
Component(1) Total
2021 $7.84 $12.47 $20.31
2022 7.84 13.52 21.36
2023 7.84 14.05 21.89
2024 7.84 14.41 22.25
2025 7.84 14.70 22.54
Source: City of Mountain House.

Historic Operating Results
The following table is a summary of historical operating results of the Storm Drain System for Fiscal Years ending June 30, 2021 through 2025. The following summary of operating results is qualified in its entirety by reference to the City’s year-end financial summaries. The Net Operating Revenues of the Storm Drain System are not pledged to the 2026 Bonds in any manner.

TABLE 25

STORM DRAIN SYSTEM HISTORICAL OPERATING RESULTS
Fiscal Years Ending June 30, 2021 – 2025
Operating Revenue 2021 2022 2023 2024 2025
Charges for Service $690,849 $730,984 $735,998 $764,243 $804,218 Miscellaneous Revenue(1) 489,868 159,160 115,036 690,730 695,471 Total Operating Revenue $1,180,717 $890,144 $851,034 $1,454,973 $1,499,689 Operating Expenses(2)
General and Administration $393,383 $429,841 $463,806 $559,103 $437,690 Maintenance and Operations 159,314 201,982 234,828 380,255 214,469 Total Operating Expenses $552,697 $631,823 $698,634 $939,358 $652,159 Net Operating Revenues over Expenses $628,020 $258,321 $152,400 $515,615 $847,530 Capital Expenditures $49,702 $25,878 -- $64,645 $--
Total Operating Expenses and CapEx 602,399 657,701 698,634 1,004,003 652,159 Net Operating Gain over Expenses and Capex $578,318 $232,443 $152,400 $450,970 $847,530 Transfer From General Fund -- -- -- -- --
Net Revenue After General Fund Contribution $578,318 $232,443 $152,400 $450,970 $847,530 _______________
(1) Includes interest earnings on fund balances.
(2) Does not include depreciation.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 324 of 618 58 Projected Operating Results
The following table sets forth projected operating results for the Storm Drain System for the Fiscal Years ending June 30, 2026 through 2030. The projections assume salary adjustments, inflation allowances, changes in personnel requirements and growth in connections based on inflation where appropriate, and growth in connections where this formula is applicable, as indicated in the table. The Net Operating Revenues of the Storm Drain System are not pledged to the 2026 Bonds in any manner.

TABLE 26

STORM DRAIN SYSTEM PROJECTED OPERATING RESULTS
Fiscal Years Ending June 30, 2026 – 2030
Operating Revenue 2026 2027 2028 2029 2030
Charges for Service(1) $812,260 $828,505 $859,574 $890,643 $921,712 Miscellaneous Revenue (2) 219,884 275,000 275,000 275,000 275,000 Total Operating Revenue $1,032,144 $1,103,505 $1,134,574 $1,165,643 $1,196,712 Operating Expenses(3)
General and Administration $284,112 $334,537 $344,573 $354,910 $365,558 Maintenance and Operations 710,448 705,876 727,052 748,864 771,330 Total Operating Expenses $994,560 $1,040,413 $1,071,625 $1,103,774 $1,136,887 Net Operating Revenues over Expenses $37,584 $63,092 $62,949 $61,869 $59,824 Capital Expenditures $-- $-- $-- $-- $--
Total Operating Expenses and CapEx 994,560 1,040,413 1,071,625 1,103,774 1,136,887 Net Operating Gain over Expenses and
Capex
$37,584 $63,092 $62,949 $61,869 $59,824
_______________
(1) Future charges for service includes estimated increases in residential units. (2) Includes interest earnings on fund balances.
(3) Does not include depreciation. Future operating expenses are projected to increase 4% annually.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 325 of 618 59 GENERAL FUND FINANCES OF THE CITY
Historic General Fund Subsidy of Systems
From its formation in November 2008 through Fiscal Year 2019-20, the City used General Fund resources, as necessary, to support the operating costs of the Systems as they transitioned from start-up utilities. The necessity of such advances has declined over time. The Water Fund was advanced $2,295,186 during the year ended June 30, 2025. No advances were made to the Wastewater or Stormwater Funds during the year. The General Fund subsidies to the Systems have been characterized as advances, and are obligations of each applicable System, to be repaid to the General Fund over time. As of June 30, 2025, the amount owed by each System to the General Fund was $9,378,781 (Water System), $5,408,323 (Wastewater System), and $636,993 (Storm Drain System), respectively. As noted above, the City has undertaken certain covenants with respect to meeting the cost of operations. See “SECURITY FOR THE 2026 BONDS – Operations and Maintenance Covenants.”
General Fund Revenue Sources
The City receives revenue from multiple sources. Principal sources of tax revenue are property taxes and four special taxes levied to pay for (1) roads, (2) public safety, (3) parks and libraries, and (4) public works. Each tax is levied per one hundred square feet of living area and per one hundred square feet of parcel area. The tax rate is subject to adjustment annually. The various special taxes fund the capital and operating costs of providing roadways and other transportation infrastructure; public safety; parks, recreation, and community facilities; and public works services. The County collects the special taxes as part of the property tax collection system and the City recognizes special tax revenue when the installments are due, provided they are collected within 60 days after year-end. Charges for services principally include utility charges and charges to developers for the labor and consulting services provided by the City in support of development activities.

Property tax revenue due the City is collected under the County’s “Teeter Plan” whereby the City expects to consistently receive 100% of its annual property tax allocations. The County can elect to terminate the applicability of the Teeter Plan at any time if delinquencies reach a level unacceptable to the County (typically, if the rate of secured tax and assessment delinquency due an agency in any year exceeds 3% of the total of all taxes and assessments levied on the secured rolls for that agency). Receipts of money available to the City for investment is deposited with the County Treasurer and invested as part of the pool of County funds managed by the County Treasurer.

General Fund Revenues and Expenses
The following table shows the revenues and expenses of the General Fund since Fiscal Year 2021-22. The amount of subsidy from the General Fund to the Water System and the Wastewater System is also shown. The table only reflects General Fund revenues and expenses, excluding the four special taxes that are also levied on property in the City for other purposes and excluding the expenses paid for by such special taxes, as noted above. The General Fund of the City is not pledged to the repayment of the 2026 Bonds and no assurance can be given that the General Fund advances previously made to the Water System and Wastewater System would continue in the future if they were to be needed. The following table is provided for general reference and information only, as the 2026 Bonds are secured solely by the Pledged Facility Component Revenues of each System as described under “SECURITY FOR THE 2026 BONDS.” Item 8.1
Mountain House                                               Page 326 of 618 60 TABLE 27

GENERAL FUND REVENUES, EXPENSES AND SUBSIDIES
Fiscal Years 2021-22 – 2026-27
Audited
2021-22
Audited
2022-23
Audited
2023-24
Audited
2024-25
Estimated
2025-26
Budget
2026-27
Revenues
Taxes $6,926,727 $7,732,189 $8,753,957 $11,582,194
Licenses and Permits 6,925 8,364 7,999 9,204
Franchise Fees 1,145,319 1,106,275 1,360,135 1,506,056
Intergovernmental 35,556 -- -- 87,500
Developer and Impact Fees 518,830 438,534 494,113 1,068,250 Investment Earnings (636,566) 926,447 985,012 3,102,540 Other Revenues 11,368 15,055 26,241 166,578
Total Revenues $8,008,159 $10,226,864 $11,627,457 $17,522,322 Expenses
General Government $347,250 $141,437 $225,805 $214,829
Public Safety -- -- --
Public Ways and Facilities 3,217,123 3,752,606 4,558,752 2,580,649 Capital Outlay -- 14,895,144 99,188 --
Total Expenditures $3,564,373 $18,789,187 $4,883,745 $2,795,478 Excess Revs Over Expenses $4,443,786 $(8,562,323) $6,743,712 $14,726,844 Other Financing Sources(Uses)
Issuance of debt $-- $14,864,854 $99,188 $--
Transfers In (Out) -- -- -- (3,189,133)
Total Other Fin Sources(Uses) $-- $14,864,854 $99,188 $(3,189,133) Change in Fund Balance $4,443,786 $6,302,531 $6,842,900 $11,537,711 Fund Balance, Beg. Year(2) $38,502,535 $42,946,321 $49,248,852 $55,865,292 Fund Balance, End Year $42,946,321 $49,248,852 $56,091,752 $67,403,003 ___________________________
(1) Does not include capital component subsidies from the General Fund. (2) in Fiscal Year 2024-25, as restated due to changes within financial reporting entity.

Source: City of Mountain House.

Item 8.1
Mountain House                                               Page 327 of 618 61 RISK FACTORS
The following factors, along with other information in this Official Statement, should be considered by potential investors in evaluating the risks in the purchase of the 2026 Bonds.

City Demand and Growth
There can be no assurance that the local demand for the services provided by any System of the City will be maintained at levels described in this Official Statement, however the Pledged Facility Component rates are fixed and authorized to increase annually by the greater of 2% or the amount of change in the Engineering News-Record Construction Cost Index. Reduction in the level of demand could require an increase in volumetric rates or charges and such rate increases could increase the likelihood of nonpayment. There can be no assurance that any other entity with regulatory authority over the City will not adopt further restrictions on operation of any of the Systems.

Expenses
There can be no assurance that the City’s expenses for any of its utility systems will be consistent with the levels described in this Official Statement. Changes in technology, new regulatory requirements, increases in the cost of energy or other expenses could reduce revenues, and could require substantial increases in rates or charges in order to comply with the rate covenants. Such rate increases could increase the likelihood of nonpayment, and could also decrease demand.

Risks Related to Projections
The achievement of the projections contained in this Official Statement involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements. In particular, the projections make assumptions regarding the number of customers contributing toward Pledged Facility Component Revenues in future years. In addition, historically, the usage fees charged by the City for the Water System and Wastewater System were not sufficient to cover all of the operation and maintenance costs of the City with respect to each respective System. The City’s general fund therefore subsidized these costs of each System. However, based on audited financial results of the City since Fiscal Year 2018-19 and continuing during the projection period shown in the tables in this Official Statement, no general fund subsidy is anticipated to be required to support the operation and maintenance costs of the three Systems. Although the projections therefore assume no future general fund subsidy, no assurance can be given that the Systems will not require additional general fund subsidies in the future or that, in such event, the City will continue to subsidize each System in the future as it has done in the past.

Constitutional Limit on Fees and Charges
If a portion of the Water System, Wastewater System or Storm Drain System rates were determined by a court to exceed the reasonable costs of providing service, any fee which the City charges may be considered to be a “special tax,” which under Article XIIIA of the California Constitution must be authorized by a two-thirds vote of the affected electorate. This limitation is applicable to the City’s rates for services provided by the Systems. The reasonable cost of service provided by the Systems has been determined by the State Controller to include depreciation and Item 8.1
Mountain House                                               Page 328 of 618 62 allowance for the cost of capital improvements. In addition, the California courts have determined that fees such as connection fees (capacity charges) will not be special taxes if they approximate the reasonable cost of constructing enterprise improvements contemplated by the local agency imposing the fee. Such court determinations have been codified in the Government Code of the State of California (Section 66000 et seq.).

Under Article XIIIB of the California Constitution, state and local government entities have an annual “appropriations limit” which limits their ability to spend certain moneys called “appropriations subject to limitation,” which consists of tax revenues, certain state subventions and certain other moneys, including user charges to the extent they exceed the costs reasonably borne by the entity in providing the service for which it is levying the charge. In general terms, the “appropriations limit” is to be based on certain fiscal year 1978/79 expenditures, and is to be adjusted annually to reflect changes in the consumer price index, population and services provided by these entities. Among other provisions of Article XIIIB, if an entity’s revenues in any year exceed the amount permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years.

The City is of the opinion that the rates and use charges imposed by the City in connection with the Systems do not exceed the costs it reasonably bears in providing such services, and that the City has complied with all the requirements of Articles XIIIC and XIIID in setting the current rates and charges imposed by the City for each System. The City is unable to predict how Article XIIIC and Article XIIID will ultimately be interpreted by the courts and what, if any, further implementing legislation will be enacted, and there can be no assurance that Article XIIIC and Article XIIID will not limit the future ability of the City to impose, levy, charge and collect increased fees and charges for the Systems. See “–Proposition 218” for additional details on Article XIIIC and Article XIIID.

Limited Recourse on Default
If the City defaults on its obligation to make payments under the Master Contracts, the Authority has the right to accelerate the total unpaid principal amount of unpaid Parity Obligations and/or Subordinate Parity Obligations, as applicable. However, in the event of a default and such acceleration there can be no assurance that the City will have sufficient Pledged Facility Component Revenues to pay the accelerated payments.

Limitations on Remedies Available
The enforceability of the rights and remedies of the Owners and the obligations of the City may become subject to the following: the federal bankruptcy code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar federal or state laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect; usual equitable principles which may limit the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of California and its governmental bodies in the interest of servicing a significant and legitimate public purpose. Bankruptcy proceedings, or the exercising of powers by the federal or state government, if initiated, could subject the Owners to judicial discretion and interpretation of their rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or modification of their rights. See also “–Bankruptcy of the City” below.

Item 8.1
Mountain House                                               Page 329 of 618 63 Bankruptcy of the City
The City is authorized to file for bankruptcy under certain circumstances. Should the City file for bankruptcy, there could be adverse effects on the holders of the 2026 Bonds. In particular, the General Fund of the City has previously advanced amounts to the Systems in previous fiscal years, which would be materially adversely impacted by any City bankruptcy proceeding.

Treatment of Special Revenues. While the Pledged Facility Component Revenues pledged to the 2026 Bonds may be designated as “special revenues” under the Bankruptcy Code, no assurance can be given in this regard. If the Pledged Facility Component Revenues are held to be “special revenues” under the Bankruptcy Code, then Pledged Facility Component Revenues collected after the date of the bankruptcy filing should be subject to the lien of the Master Contracts. “Special revenues” are defined to include receipts derived from the ownership or operation of projects or systems that are primarily used to provide utility services. While Pledged Facility Component Revenues appear to satisfy this definition and thus be “special revenues,” no assurance can be given that a court would not hold that the Pledged Facility Component Revenues are not special revenues or are not subject to the lien of the Master Contracts. If the Pledged Facility Component Revenues are determined to not be “special revenues,” then the special protections of the Bankruptcy Code for “special revenues” would not apply. The Authority, as counterparty to the City under the Master Contracts, may not be able to assert a claim against any property of the City other than the Pledged Facility Component Revenues, and if these amounts are no longer subject to the lien of the Master Contracts, then there may be no amounts from which the holders of the 2026 Bonds are entitled to be paid.

The Bankruptcy Code provides that special revenues can be applied to necessary operating expenses of the project or system, before they are applied to other obligations. This rule applies regardless of the provisions of the transaction documents. Thus, the City may be able to use Pledged Facility Component Revenues to pay necessary operating expenses of the Wastewater System before the remaining Pledged Facility Component Revenues are made available to the Trustee to pay amounts owed to the holders of the 2026 Bonds. It is not clear precisely which expenses would constitute necessary operating expenses.

If the City is in bankruptcy, the parties (including the holders of the 2026 Bonds) may be prohibited from taking any action to collect any amount from the City or to enforce any obligation of the City, unless the permission of the bankruptcy court is obtained. These restrictions may also prevent the Trustee from making payments to the holders of the 2026 Bonds from funds in the Trustee’s possession. The City’s rate covenant under the Master Contracts may not be enforceable in bankruptcy by the Authority, the Trustee or the holders of the 2026 Bonds.

The provisions of the Master Contracts that provide that the commencement of a bankruptcy case by the City is an Event of Default and that certain other insolvency-related events with respect to the City are also Events of Default may be unenforceable. This may limit the ability of the Authority and Trustee to require the City to turn Pledged Facility Component Revenues over to the Trustee, and may allow the City to continue to spend Pledged Facility Component Revenues for any lawful purpose as provided in the Master Contracts free and clear of the lien of the Master Contracts, notwithstanding that the City is in bankruptcy.

Lockbox Agreement. All of the Pledged Facility Component Revenues when and as received, are to be received and held by the City in trust to secure the Parity Obligations and Subordinate Parity Obligations, and will be deposited by the City in the applicable lockbox payment account, and disbursed, allocated and applied solely to the uses and purposes set forth Item 8.1
Mountain House                                               Page 330 of 618 64 in the Master Contracts, and accounted for separately and apart from all other money, funds, accounts or other resources of the City. The Lockbox Agreement provides that the Pledged Facility Component Revenues are held by the Depository Bank as described in the Lockbox Agreement. If the City goes into bankruptcy, the City may not be required to turn over to the Authority and Trustee any Pledged Facility Component Revenues that are in its possession at the time of the bankruptcy filing and have been commingled with other moneys in each applicable revenue fund held by the City. With respect to Pledged Facility Component Revenues collected after the bankruptcy filing, if the City does not voluntarily turn over such Pledged Facility Component Revenues to the Authority and Trustee, it is not entirely clear what procedures the Authority, Trustee and the holders of the 2026 Bonds would have to follow to attempt to obtain possession of such Pledged Facility Component Revenues, how much time it would take for such procedures to be completed, or whether such procedures would ultimately be successful. Under such circumstances, there may be delays or reductions in payments on the 2026 Bonds.

Other Considerations. The City may be able to borrow additional money that is secured by a lien on any of its property (including the Pledged Facility Component Revenues), which lien could have priority over the lien of the Master Contracts, as long as the bankruptcy court determines that the rights of the Authority, Trustee and the holders of the 2026 Bonds will be adequately protected. The City may be able to cause some of the Pledged Facility Component Revenues to be released to it, free and clear of lien of the Master Contracts, as long as the bankruptcy court determines that the rights of the Authority, Trustee and the holders of the 2026 Bonds will be adequately protected.

The City may be able, without the consent and over the objection of the Authority, Trustee and the holders of the 2026 Bonds, to alter the priority, interest rate, principal amount, payment terms, collateral, maturity dates, payment sources, covenants (including tax-related covenants), and other terms or provisions of the Master Contracts and/or the 2026 Bonds, as long as the bankruptcy court determines that the alterations are fair and equitable.

There may be delays in payments on the 2026 Bonds while the court considers any of these issues. There may be other possible effects of a bankruptcy of the City that could result in delays or reductions in payments on the 2026 Bonds, or result in losses to the holders of the 2026 Bonds. Regardless of any specific adverse determinations in a City bankruptcy proceeding, the fact of a City bankruptcy proceeding could have an adverse effect on the liquidity and value of the 2026 Bonds.

No Obligation to Tax
The obligation of the Authority to pay the 2026 Bonds does not constitute an obligation of the Authority for which the Authority is obligated to levy or pledge any form of taxation or for which the Authority has levied or pledged any form of taxation, and the Authority has no authority to tax.

Similarly, the obligation of the City to pay Parity Obligations and Subordinate Parity Obligations do not constitute obligations of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.

Seismic, Topographic and Climatic Conditions
The financial stability of the City may be adversely affected by a variety of factors, particularly those which may affect infrastructure and other public improvements and private improvements and the continued habitability and enjoyment of such improvements. Such additional factors include, without limitation, geologic conditions (such as earthquakes), Item 8.1
Mountain House                                               Page 331 of 618 65 topographic conditions (such as earth movements and floods) and climatic conditions (such as droughts and tornadoes).

Flooding Risks. The City reports that only the northern portion of the City is an area which could potentially be flooded, and it is currently protected by a levee constructed to the 100- year flood level standard. From the north the land slopes upward toward the south and flooding in that area would only occur if the nearby Mountain House Creek overflowed, resulting in “sheet” flooding as water washed downhill. Mountain House Creek is designed to carry a 100-year flood without impacting anything except the Creek Park land adjacent to the channel. The City indicates that houses along the Creek Park are well above the 200-year flood level.

Seismic Risks. The area encompassed by the City, like that in much of the State, may be subject to unpredictable seismic activity. The City is located within a regional network of several active and potentially active faults. The San Andreas Fault is located in the vicinity of the City. Although the City believes that no active or inactive fault lines pass through, or near, the City, if there were to be an occurrence of severe seismic activity in the City, there could be an impact on the cost or the ability to supply and deliver water, wastewater or storm drain services until repairs could be made, possibly diminishing Pledged Facility Component revenues. Building codes require that some of these factors be taken into account, to a limited extent, in the design of improvements, including the Systems. Some of these factors may also be taken into account, to a limited extent, in the design of other infrastructure and public improvements neither designed nor subject to design approval by the City. Design criteria in any of these circumstances are established upon the basis of a variety of considerations and may change, leaving previouslydesigned improvements unaffected by more stringent subsequently established criteria. In general, design criteria reflect a balance at the time of protection and the future costs of lack of protection, based in part upon a present perception of the probability that the condition will occur and the seriousness of the condition should it occur. Conditions may occur and may result in damage to improvements of varying seriousness, such that the damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances, the actual value of public and private improvements within the City in general may well depreciate or disappear, notwithstanding the establishment of design criteria for any such condition.

In addition, if an earthquake were to damage the Sacramento-San Joaquin Rivers Delta (the “Delta”) levees protecting the islands of the Delta, the initial flooding of the Delta islands and repeated flooding with each tidal cycle could cause high salinity San Francisco Bay water to intrude into the Delta for several years, thereby degrading the quality of the City’s water supply from BBID.

Drought Risks. California is subject to drought from time-to-time, which can have an impact on communities such as Mountain House. In 2014, for example, the governor declared a State of Emergency throughout California due to severe drought conditions, and in 2015 mandated Statewide water conservation of 25%. In addition, in June 2015, the State ordered a curtailment of pumping for certain pre-1914 water rights, including BBID’s. BBID immediately challenged the State’s decision. To avoid a decline in its water supply, the City purchased supplemental raw water from the South San Joaquin Irrigation District until September 2015, when the State curtailment order was lifted. In addition, the City is actively seeking sources of emergency water supply (potentially from the South San Joaquin Irrigation District, groundwater, recycled water, and/or other sources) in the unlikely event that the pre-1914 water rights are again curtailed.

Item 8.1
Mountain House                                               Page 332 of 618 66 After a few wet years, drought again returned to Mountain House and in 2022, the San Joaquin Irrigation District transferred water to BBID (for further transfer to the City) to help the City avoid being forced to ration water for its customers. Although 2022-23 was a wet winter, no assurance can be given that drought conditions will not return, having a material adverse impact on the City and its finances.

Wildfire Risks. The Mountain House community is subject to wildfire risks that could burn down homes and critical infrastructure. Not only is Mountain House surrounded by dry wildland, but it is in one of the most wind-swept areas in the State as witnessed by the proliferation of wind mills generating electricity literally just miles away from the community. For example, in May 2018, a collection of wildfires (known collectively as the Grant Fire) burned hundreds of acres between Mountain House and the nearby community of Byron. Other wildfires may erupt without warning in the future.

Proposition 218
General. On November 5, 1996, California voters approved Proposition 218, the so-called “Right to Vote on Taxes Act.” Proposition 218 added Articles XIIIC and XIIID to the State Constitution, which affect the ability of local governments to levy and collect both existing and future taxes, assessments, and property-related fees and charges. Proposition 218, which generally became effective on November 6, 1996, limited local governments’ authority to impose or increase property-related “fee” or “charge,” which is defined as “any levy other than an ad valorem tax, a special tax or an assessment, imposed by a local government upon a parcel or upon a person as an incident of property ownership, including user fees or charges for a property related service” (and referred to in this section as a “property-related fee or charge”).

Specifically, under Article XIIID, before a municipality may impose or increase any property-related fee or charge, the entity must give written notice to the record owner of each parcel of land affected by that fee or charge. The municipality must then hold a hearing upon the proposed imposition or increase at least 45 days after the written notice is mailed, and, if a majority of the property owners of the identified parcels present written protests against the proposal, the municipality may not impose or increase the property-related fee or charge.

Further, under Article XIIID, revenues derived from a property-related fee or charge may not exceed the funds required to provide the “property-related service” and the entity may not use such fee or charge for any purpose other than that for which it imposed the fee or charge. The amount of a property-related fee or charge may not exceed the proportional cost of the service attributable to the parcel, and no property-related fee or charge may be imposed for a service unless that service is actually used by, or is immediately available to, the owner of the property in question.

In addition, Article XIIIC 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 power of initiative to affect local taxes, assessments, fees and charges shall be applicable to all local governments and neither the Legislature nor any local government charter shall impose a signature requirement higher than that applicable to statewide statutory initiatives.” Judicial Interpretation of Proposition 218. After Proposition 218 was enacted in 1996, appellate court cases and an Attorney General’s opinion initially indicated that fees and charges for water and wastewater services, which are based on the amount of services consumed, would Item 8.1
Mountain House                                               Page 333 of 618 67 not be considered property-related fees and charges, and thus not subject to the requirements of Article XIIID. However, numerous subsequent court cases have held that certain types of water and wastewater charges could be subject to the requirements of Proposition 218. These cases include, for example, Capistrano Taxpayers Assoc., Inc. v. City of San Juan Capistrano (186 Cal.

Rptr. 3d 362 (Cal. App. 4th Distr. 2015)), Bighorn-Desert View Water Agency v. Verjil (46 Cal.

Rptr. 3d 73 (Cal. 2006)), and Howard Jarvis Taxpayers Assoc. v. City of Fresno (26 Cal. Rptr. 3d 153 (Cal. App. 5th Distr. 2005)).

Under the Bighorn case, for example, the court held that under Article XIIIC, local voters could adopt an initiative measure that reduces or repeals the City’s rates and charges, though it is not clear whether (and California courts have not decided whether) any such reduction or repeal by initiative would be enforceable in a situation in which such rates and charges are pledged to the repayment of bonds or other indebtedness, as is the case with respect to the 2026 Bonds.

Under the City of San Juan Capistrano case, the court held that tiered or inclined rates that go up progressively in relation to usage must correspond to the actual cost of providing water service at each tier (level of usage), and accordingly the pricing for any tier cannot exceed the cost of service to that tier.

City’s Current Practice Regarding Rates and Charges. The City’s practice in implementing increases in the usage fees for the Water and Wastewater Systems has been to comply with the requirements of Article XIIID, including the practice of providing property owners with a 45-day mailed notice and public hearing before the City Board approves rate increases. As noted elsewhere, the Pledged Facilities Component of the rates charged by the City were implemented in accordance with Ordinance No. 4182(a), effective December 10, 2002.

Conclusion. It is not possible to predict how courts will further interpret Article XIIIC and Article XIIID in future judicial decisions, and what, if any, further implementing legislation will be enacted. As noted above, under the Bighorn case, local voters could adopt an initiative measure that reduces or repeals the City’s rates and charges, though it is not clear whether (and California courts have not decided whether) any such reduction or repeal by initiative would be enforceable in a situation in which such rates and charges are pledged to the repayment of bonds or other indebtedness, as is the case with respect to the 2026 Bonds. Under the City of San Juan Capistrano case, tiered or inclined rates that go up progressively in relation to usage must correspond to the actual cost of providing water service at each tier (level of usage), and accordingly the pricing for any tier cannot exceed the cost of service to that tier. There can be no assurance that the courts will not further interpret, or the voters will not amend, Article XIIIC and Article XIIID to limit the ability of local agencies to impose, levy, charge and collect increased fees and charges for service provided by the System, or to call into question previously adopted rates.

Cyber Security
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. In addition, the City relies on the County to provide the City with information technology services and personnel. As a recipient and provider of personal, private or other sensitive electronic information, each of the City and the County is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the City’s or County’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City, the County or the Systems, or the administration of the 2026 Bonds. The City is also reliant on other entities and service providers Item 8.1
Mountain House                                               Page 334 of 618 68 in connection with the administration of the 2026 Bonds, including without limitation the Trustee and the dissemination agent. No assurance can be given that the City, the County and these other entities will not be affected by cyber threats and attacks in a manner that may affect the 2026 Bond owners.

Impact of State Budget
In the past, local governments like the City have been negatively impacted by actions taken by the State Legislature and Governor to deal with insufficient State revenues. The City cannot predict what actions will be taken in the future by the State Legislature and the Governor if insufficient State revenues are available in the future. Given the magnitude of the State’s budgetary deficits from time to time, it is possible that future legislation will impact revenues of local agencies such as the City in a materially adverse manner.

Risks Related to Subordinate Bonds
The 2026 Payments securing the 2026 Bonds are Subordinate Parity Obligations, meaning that the pledge and lien on the Pledged Facility Component Revenues securing payment of principal and interest on the 2026 Payments that secure the 2026 Bonds is subordinate to the pledge and lien on the Pledged Facility Component Revenues securing payment of principal and interest on the 2019 Payments (and 2019 Bonds) and 2020A Payments (and 2020A Bonds). See “SECURITY FOR THE 2026 BONDS” for additional details on the subordinate nature of the 2026 Payments and the 2026 Bonds.

Loss of Tax Exemption
As discussed in this Official Statement under the caption “TAX MATTERS,” interest on the 2026 Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the 2026 Bonds were issued, as a result of future acts or omissions of the Authority or City in violation of its covenants in the Master Contracts or Trust Agreement. Should such an event of taxability occur, the 2026 Bonds are not subject to a special redemption and will remain outstanding until maturity or until redeemed. The Internal Revenue Service (the “IRS”) has initiated an expanded program for auditing bond issues, including both targeted and random audits. It is possible that the 2026 Bonds will be selected for audit by the IRS. It is also possible that the market value of the 2026 Bonds would be affected as a result of such an audit, or by an audit of similar obligations.

Rating Downgrades
In connection with seeking a rating on the 2026 Bonds, the City experienced a rating downgrade of its previous rating. No assurance can be given that further downgrades will not occur in the future, if, in the judgment of the rating agency, circumstances so warrant. The City and the Authority have no responsibility to oppose any downward revision or withdrawal of any rating obtained. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the 2026 Bonds.

Secondary Market Risk
There can be no assurance that there will be a secondary market for purchase or sale of the 2026 Bonds, and from time to time there may be no market for them, depending upon Item 8.1
Mountain House                                               Page 335 of 618 69 prevailing market conditions, the financial condition or market position of firms who may make the secondary market and the financial condition of the City.

Pandemic Diseases and Other Global Events
In 2020, the COVID-19 pandemic spread around the world, causing material adverse impacts on the finances of individuals, businesses and local governments due to widespread health issues resulting from the pandemic and governmental actions intended to stop its spread.

Neither the City’s general fund finances nor the Pledged Facility Component Revenues were materially adversely impacted by COVID-19. However, no assurance can be given that a resurgence in COVID-19 or some other global event will not materially adversely impact the City or the Pledged Facility Component Revenues. Negative impacts on the Pledged Facility Component Revenues in the future could occur because utility payments are deferred in the City due to some State or federal governmental action, or some taxpayers being unable or unwilling to make their utility payments. Additionally the value of property on future secured property tax rolls could be reduced as a result of future global events. The negative impacts of COVID-19 or other global events could reduce or negatively affect the pace of development activity in the City, as well as the ability or willingness of property owners to pay their utility bills, all of which could impact the Authority’s ability to pay debt service on the 2026 Bonds.

TAX MATTERS
Federal Tax Status. In the opinion of Jones Hall LLP, as Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the 2026 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the 2026 Bonds may be subject to the corporate alternative minimum tax.

The opinions set forth in the preceding paragraph are subject to the condition that the Authority and the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Tax Code”) that must be satisfied subsequent to the issuance of the 2026 Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Authority and the City have made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the 2026 Bonds.

Tax Treatment of Original Issue Discount and Premium. The issue price for original issue discount (as further discussed below) and market discount purposes (the “OID Issue Price”) for each maturity of the 2026 Bonds is the price at which a substantial amount of such maturity of the 2026 Bonds is first sold to the public (excluding bond houses and brokers and similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The OID Issue Price of a maturity of the 2026 Bonds may be different from the price set forth, or the price corresponding to the yield set forth, on the cover page hereof.

If the OID Issue Price of a maturity of the 2026 Bonds is less than the principal amount payable at maturity, the difference between the OID Issue Price of each such maturity, if any, of the 2026 Bonds (the “OID Bonds”) and the principal amount payable at maturity is original issue discount.

Item 8.1
Mountain House                                               Page 336 of 618 70 For an investor who purchases an OID Bond in the initial public offering at the OID Issue Price for such maturity and who holds such OID Bond to its stated maturity, subject to the condition that the City complies with the covenants discussed above, (a) the full amount of original issue discount with respect to such OID Bond constitutes interest which is excludable from the gross income of the owner thereof for federal income tax purposes; (b) such owner will not realize taxable capital gain or market discount upon payment of such OID Bond at its stated maturity; (c) such original issue discount is not included as an item of tax preference in computing the alternative minimum tax for individuals under the Code; and (d) the accretion of original issue discount in each year may result in certain collateral federal income tax consequences in each year even though a corresponding cash payment may not be received until a later year. An OID Bond would be treated in a similar manner for purposes of California personal income taxes.

Owners of 2026 Bonds who dispose of 2026 Bonds prior to the stated maturity (whether by sale, redemption or otherwise), purchase 2026 Bonds in the initial public offering, but at a price different from the OID Issue Price or purchase 2026 Bonds subsequent to the initial public offering should consult their own tax advisors.

If a 2026 Bond is purchased at any time for a price that is less than the 2026 Bond’s stated redemption price at maturity or, in the case of an OID Bond, its OID Issue Price plus accreted original issue discount (the “Revised Issue Price”), the purchaser will be treated as having purchased a 2026 Bond with market discount subject to the market discount rules of the Code (unless a statutory de minimis rule applies). Accrued market discount is treated as taxable ordinary income and is recognized when a 2026 Bond is disposed of (to the extent such accrued discount does not exceed gain realized) or, at the purchaser’s election, as it accrues. Such treatment would apply to any purchaser who purchases an OID Bond for a price that is less than its Revised Issue Price. The applicability of the market discount rules may adversely affect the liquidity or secondary market price of such 2026 Bond. Purchasers should consult their own tax advisors regarding the potential implications of market discount with respect to the 2026 Bonds.

An investor may purchase a 2026 Bond at a price in excess of its stated principal amount.

Such excess is characterized for federal income tax purposes as “bond premium” and must be amortized by an investor on a constant yield basis over the remaining term of the 2026 Bond in a manner that takes into account potential call dates and call prices. An investor cannot deduct amortized bond premium relating to a tax-exempt bond. The amortized bond premium is treated as a reduction in the tax-exempt interest received. As bond premium is amortized, it reduces the investor’s basis in the bond. Investors who purchase a 2026 Bond at a premium should consult their own tax advisors regarding the amortization of bond premium and its effect on the 2026 Bond’s basis for purposes of computing gain or loss in connection with the sale, exchange, redemption or early retirement of the 2026 Bond.

California Tax Status. In the further opinion of 2026 Bond Counsel, interest on the 2026 Bonds is exempt from California personal income taxes.

Other Tax Considerations. Current and future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest on the 2026 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code or court decisions may also affect the market price for, or marketability of, the 2026 Bonds. It cannot be predicted whether or in what form any such Item 8.1
Mountain House                                               Page 337 of 618 71 proposal might be enacted or whether, if enacted, such legislation would apply to bonds issued prior to enactment.

The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the 2026 Bonds, or as to the consequences of owning or receiving interest on the 2026 Bonds, as of any future date. Prospective purchasers of the 2026 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

Owners of the 2026 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the 2026 Bonds may have federal or state tax consequences other than as described above. Other than as expressly described above, Bond Counsel expresses no opinion regarding other federal or state tax consequences arising with respect to the 2026 Bonds, the ownership, sale or disposition of the 2026 Bonds, or the amount, accrual or receipt of interest on the 2026 Bonds.

NO LITIGATION
There is no proceeding or litigation of any nature now pending to restrain or enjoin the issuance, sale, execution or delivery of the 2026 Bonds, or in any way contesting or affecting the validity of the 2026 Bonds, the proceedings of the City taken with respect to the issuance or sale thereof, the pledge or application of any moneys or securities provided for the payment of the 2026 Bonds, the existence or powers of the City or the title of any officers of the City to their respective positions. In addition, there is no proceeding or litigation of any nature now pending contesting or affecting the levy and collection of the Pledged Facility Component Revenues or the right of the City to use the Pledged Facility Component Revenues to pay amounts due under the Master Contracts, which amounts will in turn be used to repay the 2026 Bonds. A certificate of the City to this effect will be delivered on the date of delivery of the 2026 Bonds.

RATINGS
It is anticipated that S&P Global Ratings (“S&P”) will assign its municipal bond rating of “___” to the 2026 Bonds that are insured, based on the understanding that the Insurer will issue its 2026 Insurance Policy in connection with the closing of the 2026 Bonds. S&P has also assigned an underlying municipal bond rating of “___” to the 2026 Bonds. These ratings reflect only the views of S&P, and an explanation of the significance of such ratings may be obtained from S&P.

There is no assurance that any rating will continue for any given period of time for the 2026 Bonds or that it will not be revised downward or withdrawn entirely by S&P, if, in the judgment of S&P, circumstances so warrant. The City and the Authority undertake no responsibility to oppose any downward revision or withdrawal of any rating obtained. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the 2026 Bonds.

Item 8.1
Mountain House                                               Page 338 of 618 72 MUNICIPAL ADVISOR
The City has retained Kosmont Financial Services, as registered municipal advisor (the “Municipal Advisor”) for the sale of the 2026 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 of fairness of the information contained in this Official Statement.

PROFESSIONAL FEES
In connection with the execution of the 2026 Bonds, fees payable to Kosmont Financial Services, as Municipal Advisor, Jones Hall LLP, as Bond and Disclosure Counsel, Computershare Trust Company, N.A., as Trustee, and Stradling, Yocca Carlson & Rauth LLP, as counsel to the Underwriter are contingent upon the execution and delivery of the 2026 Bonds.

LEGAL OPINION
The validity of the 2026 Bonds and certain other legal matters are subject to the approving opinion of Jones Hall LLP, Bond Counsel to the Authority and the City. A complete copy of the proposed form of Bond Counsel opinion is contained in APPENDIX D hereto.

UNDERWRITING
The City has agreed to sell the 2026 Bonds to Piper Sandler & Co., as underwriter (the “Underwriter”), and the Underwriter has agreed, subject to certain conditions, to purchase the 2026 Bonds. The purchase price of the 2026 Bonds is $____________ (being the principal amount of the 2026 Bonds ($____________), [plus/less] an Underwriter’s [premium/discount] in the amount of $____________, plus net original issue premium of $____________). The obligations of the Underwriter are subject to certain conditions precedent, and it will be obligated to purchase all such 2026 Bonds if any such 2026 Bonds are purchased. The public offering prices of the 2026 Bonds may be changed from time to time by the Underwriter.

The Underwriter reserves the right to join with dealers and other underwriters in offering the 2026 Bonds to the public. The Underwriter may offer and sell the 2026 Bonds to certain dealers (including dealers depositing 2026 Bonds into investment trusts) at prices lower than the public offering prices, and such dealers may reallow any such discounts on sales to other dealers.

CONTINUING DISCLOSURE
The City has covenanted for the benefit of the Underwriter and the beneficial owners of the 2026 Bonds to provide certain financial information and operating data relating to the City by no later than nine months following the end of the City’s fiscal year (presently June 30) (the “Annual Report”), commencing with March 31, 2027 for the report for the fiscal year ending June 30, 2026, and to provide notices of the occurrence of certain enumerated events.

These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5) (the “Rule”). The specific nature of the Item 8.1
Mountain House                                               Page 339 of 618 73 information to be contained in the Annual Report or the notices of listed events by the City is set forth in “APPENDIX E – Form of Continuing Disclosure Certificate.” The City has previously entered into continuing disclosure undertakings under the Rule in connection with the issuance of other long-term obligations for which it is an obligated person.

During the previous five years, the City has not complied with its prior undertakings under the Rule as follows:
• [Underwriter to review and provide]
The City has retained Kosmont Financial Services to monitor and disseminate its filing requirements under the Continuing Disclosure Certificate.

ADDITIONAL INFORMATION
References are made herein to certain documents and reports which are brief summaries and do not purport to be complete or definitive. Prospective purchasers of the 2026 Bonds are advised to refer to such documents and reports for full and complete statements of their contents.

Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or Owners of any of the 2026 Bonds. The execution of this Official Statement and its use in connection with the offering of the 2026 Bonds for sale have been authorized by the Authority and the City.

MOUNTAIN HOUSE FINANCING

AUTHORITY
By:

Executive Director

CITY OF MOUNTAIN HOUSE
By:

City Manager
Item 8.1
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APPENDIX A

CITY AUDITED FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2025
Item 8.1
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APPENDIX B

SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
Item 8.1
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APPENDIX C

GENERAL DEMOGRAPHIC INFORMATION ABOUT

THE MOUNTAIN HOUSE AREA
The following information concerning the San Joaquin County (the “County”) is included only for the purpose of supplying general information regarding the general area surrounding the Mountain House Community.

The City was incorporated by vote of its citizens at an election held on March 5, 2024, becoming the 483rd incorporated city admitted to the State of California on July 1, 2024.

The area encompassed by the City is directly north and northwest of the City of Tracy, located on the western edge of the Central Valley in San Joaquin County. The City is 60 miles east of San Francisco and 70 miles south of Sacramento, covering approximately 14.3 square miles.

Population
The population of the Mountain House community was estimated by the Department of Finance at 30,687 as of January 1, 2026. Population figures for cities in the County, the County and the State for the dates indicated over the last five years are shown in the following table.

COUNTY OF SAN JOAQUIN
Population Estimates
Calendar Years 2022 through 2026
Population Estimates
(As of January 1st)
Area 2022 2023 2024 2025 2026
Escalon 7,392 7,307 7,400 7,359 7,304
Lathrop 31,267 34,673 36,971 38,791 40,942
Lodi 67,012 66,910 68,047 68,468 68,513
Manteca 87,174 89,067 92,521 94,951 96,511
Mountain House - - - 29,048 30,687
Ripon 16,037 15,864 16,071 15,996 15,873
Stockton 320,079 317,486 322,799 323,077 322,436
Tracy 94,859 95,328 97,391 98,776 99,705
Balance of County 162,486 161,726 163,698 138,490 138,154 Incorporated 623,820 626,635 641,200 676,466 681,971
County Total 786,306 788,361 804,898 814,956 820,125
Source: California Department of Finance (Estimates are as of January 1).

Item 8.1
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Employment and Industry
The unemployment rate in San Joaquin County was 6.2 percent in June 2026, up from a revised 5.6 percent in May 2026, and below the year-ago estimate of 6.8 percent. This compares with an unadjusted unemployment rate of 5.2 percent for California and 4.4 percent for the nation during the same period.

The City is included in the Stockton Metropolitan Statistical Area (“MSA”), which includes all of the County. Set forth on the following page is data from calendar years 2021 to 2025 reflecting the County’s industry employment and labor force, including the civilian labor force, employment and unemployment statistics. These figures are county-wide statistics and may not necessarily accurately reflect employment trends in the City.

STOCKTON-LODI MSA
(San Joaquin County)
Annual Average Labor Force and Employment by Industry
Calendar Years 2021 through 2025
(March 2025 Benchmark)
2021 2022 2023 2024 2025
Civilian Labor Force (1) 350,300 357,500 364,200 370,400 378,700 Employment 321,200 339,000 342,400 346,400 353,400
Unemployment 29,100 18,500 21,800 24,000 25,300
Unemployment Rate 8.3% 5.2% 6.0% 6.5% 6.7%
Wage and Salary Employment: (2)
Agriculture 14,200 13,800 14,500 14,200 13,300
Mining and Logging 100 0 0 0 0
Construction 13,900 14,900 14,000 14,600 14,300
Manufacturing 21,300 23,000 23,500 23,400 22,800
Wholesale Trade 10,800 11,600 12,300 12,500 12,500
Retail Trade 26,200 27,000 27,100 26,800 26,300
Transportation, Warehousing and Utilities 43,000 48,100 47,300 47,000 48,100 Information 1,200 1,200 1,100 1,000 900
Financial Activities 8,000 8,200 7,900 7,700 7,800
Professional and Business Services 22,500 24,100 23,100 22,900 23,100 Educational and Health Services 38,000 39,700 42,000 45,000 48,100 Leisure and Hospitality 21,300 24,300 24,500 24,300 24,700 Other Services 7,300 7,900 8,100 8,300 8,300
Federal Government 3,100 3,100 3,000 3,000 3,000
State Government 6,000 5,500 5,100 5,100 5,300
Local Government 32,900 34,000 35,300 37,400 40,700
Total All Industries (3) 269,800 286,200 288,700 293,200 299,200 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.

Source: State of California Employment Development Department. .

Item 8.1
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The following table lists the major public and private employers within the County, as of April 2026.

SAN JOAQUIN COUNTY
Major Employers
As of August 2026
Employer Name Location Industry
Amazon Fulfillment Ctr Stockton Mail Order Fulfillment Service Blue Shield of California Lodi Insurance
Dameron Hospital Stockton Hospitals
Foster Care Svc Stockton Foster Care
Leprino Foods Co Tracy Cheese Processors (mfrs)
Lodi Health Home Health Agency Lodi Home Health Service M & R Co Lodi Fruits & Vegetables-Growers & Shippers
Medline Tracy Physicians & Surgeons Equip & Supls-Whls
Morada Produce Stockton Ranches
NA Chaderjian Youth Stockton State Govt-Correctional Institutions O-G Packing & Cold Storage Co Stockton Fruits & Vegetables-Growers & Shippers Prima Frutta Packing Inc Linden Fruit & Produce Packers Safeway Distribution Ctr Tracy Distribution Centers (whls) San Joaquin County CA Pubc Stockton Government Offices-County San Joaquin County Human Svc Stockton Government Offices-County San Joaquin County Sch Stockton School Districts
San Joaquin General Hospital French Camp Hospitals
San Joaquin Sheriff's Office French Camp Government Offices-County Sjgov Stockton Government Offices-County
St Joseph's Regional Health Stockton Health Services
Stockton Police Dept Stockton Police Departments
Stockton Unified Sch Dist Stockton Facilities Management Stockton Unified School Dist Stockton Schools
Walmart Supercenter Stockton Department Stores
Waste Management-Lodi Transfer Lodi Solid Waste Collection Source: State of California Employment Development Department, extracted from The America’s Labor Market Information System (ALMIS) Employer Database, 2026 2nd Edition.

Item 8.1
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Commercial Activity
Summaries of historic taxable sales within the City and the County during the past five years in which data is available are shown in the following table.

The total taxable sales during calendar year 2025 in the City were reported to be $18,529,412.

CITY OF MOUNTAIN HOUSE
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2021 -- -- -- --
2022 -- -- -- --
2023 -- -- -- --
2024 90 $4,033 141 $4,108
2025 152 15,639 238 18,529
Source: State of California, Board of Equalization.

The total taxable sales during calendar year 2025 in the County were reported to be $25,379,956,351, a 2.82% increase over the total taxable sales of $24,682,772,928 reported during calendar year 2024.

SAN JOAQUIN COUNTY
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2021 10,642 $15,153,915 17,665 $22,306,576
2022 10,884 15,342,203 18,100 23,625,470
2023 10,632 15,584,742 17,666 23,507,449
2024 10,831 16,862,302 18,099 24,682,773
2025 10,956 17,348,763 18,405 25,379,956
Source: State of California, Board of Equalization.

Item 8.1
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Median Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance).

Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the total effective buying income for the City, the County, the State of California, and the United States for the period 2022 through 2026.

CITY OF MOUNTAIN HOUSE, COUNTY OF SAN JOAQUIN,

STATE OF CALIFORNIA AND UNITED STATES
Effective Buying Income
2022 through 2026
Year Area
Total Effective
Buying Income
(000’s Omitted)
Median Household
Effective
Buying Income
2022 City of Mountain House $911,305 $134,611
San Joaquin County 21,672,926 68,971
California 1,452,426,153 77,058
United States 11,208,582,541 64,448
2023 City of Mountain House $1,330,321 $144,614
San Joaquin County 22,168,255 68,912
California 1,461,799,662 77,175
United States 11,454,846,397 65,326
2024 City of Mountain House $1,370,183 $143,573
San Joaquin County 24,445,200 76,847
California 1,510,708,521 80,973
United States 11,987,185,826 67,876
2025 City of Mountain House $1,411,554 $141,311
San Joaquin County 24,833,658 77,622
California 1,557,429,767 82,725
United States 12,525,577,707 69,687
2026 City of Mountain House $1,667,621 $152,413
San Joaquin County 28,892,491 85,982
California 1,730,654,738 90,403
United States 13,932,177,817 75,433
Source: Claritas, LLC.

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Education
The County has fourteen school districts within its boundaries, one County Office of Education and one California Youth Authority District. Lammersville Unified School District provides K-12 education for residents of Mountain House.

Community colleges in California are locally operated and administered two-year institutions of higher education. They offer Associate in Arts and Associate in Science degrees and have extensive vocational curricula. There is one community college district in the County, San Joaquin Delta Community College, with an enrollment of more than 17,500 students. In addition to the main Campus in Stockton, San Joaquin Delta Community College offers courses offsite in the cities of Lodi, Manteca, and Mountain House.

The primary institution of higher education offering bachelors and graduate programs in the County is the University of the Pacific, a private four-year institution. Approximately 5,000 students are enrolled at the university’s Stockton campus. Part-time students have options of attending California State University, Stanislaus, which has an enrollment of approximately 1,200 students at its center in Stockton, as well as programs offered locally by Chapman University, Humphrey’s College and School of Law, National University and the University of San Francisco.

Transportation
County residents and businesses are served by surface, sea, and air transportation facilities. Three interstate and eight state highways provide trucking access to major markets of the West. Additional ground transportation is provided by three long-haul and four short-haul railroads. The County has enjoyed commuter rail service since mid-1998. The Altamont Commuter Express (“ACE”) currently operates with three trains and provides commuter rail service between Stockton and San Jose.

The Tri-Valley/San Joaquin Valley Regional Rail Authority was created in 2018 to plan and deliver cost-effective and responsive transit connectivity between the BART system in the Tri-Valley and the ACE that meets the goals of the communities it will serve. The authority is the planning stages for Valley Link, a new 42-mile, 7-station passenger rail project that will establish rail connectivity between BART’s rapid transit system and ACE commuter service in San Joaquin County-linking nearly 500 miles of commuter and intercity rail with more than 130 stations in the Northern California megaregion. The Authority, at its April 12, 2023 meeting, selected a location at the southeast corner of the Mountain House Community as the preferred alternative location for its first station and layover facility in San Joaquin County. The station is contemplated to include 3000 parking spaces and a station platform that could accommodate 1000-passenger trains every fifteen minutes.

Stockton’s Metropolitan Airport is located approximately four miles south of the downtown area and provides passenger and freight jet service to the County. The facilities are owned and maintained by the County, which leases them to commercial airlines and other tenants. In addition, the County is in close proximity to the Oakland, San Francisco, and Sacramento airports.

The Port of Stockton is a deep-water port that provides inland access to shipping lines serving West Coast and world markets. The approximate 2,000 acres of the Port of Stockton includes over 7.7 million square feet of warehouse space and serves as a port of entry for steel and ammonia fertilizer shipments.

Item 8.1
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APPENDIX D

PROPOSED FORM OF OPINION OF BOND COUNSEL
[Closing Date]
Board of Directors
Mountain House Financing Authority
230 South Sterling Drive, Suite 100
Mountain House, California 9539
OPINION: $__________ Mountain House Financing Authority Utility Systems Revenue Bonds, Subordinate Series 2026
Members of the Board:

We have acted as bond counsel to the Mountain House Financing Authority (the “Authority”) in connection with the issuance by the Authority of its $___________ Subordinate Series 2026 (the “Bonds”). In such capacity, we have examined such law and such certified proceedings, certifications and other documents as we have deemed necessary to render this opinion.

The Bonds are issued pursuant to the Marks Roos Local Bond Pooling Act of 1985 (commencing with Section 6584 of the California Government Code) (the “Act”), a Resolution adopted by the Board of Directors of the Authority on [October 14], 2026 (the “Resolution”), a Trust Agreement dated as of November 1, 2026 (the “Trust Agreement”) between the Authority and Computershare Trust Company, N.A., as trustee (the “Trustee”). In addition, the Authority and the City have entered into (i) a 2026 Supplemental Installment Purchase Contract (Wastewater System), dated as of November 1, 2026, which is supplemental to that certain Master Installment Purchase Contract (Wastewater System), dated as of December 1, 2019, (ii) a 2026 Supplemental Installment Purchase Contract (Water System), dated as of November 1, 2026, which is supplemental to that certain Master Installment Purchase Contract (Water System), dated as of December 1, 2019, and (iii) a 2026 Supplemental Installment Purchase Contract (Storm Drain System), dated as of November 1, 2026, which is supplemental to that certain Master Installment Purchase Contract (Storm Drain System), dated as of December 1, 2019 (which Master Installment Purchase Contracts as so supplemented are referred to herein, collectively, as the “Contracts” and individually for each System, a “Contract”).

Regarding questions of fact material to our opinion, we have relied on representations of the City contained in the Resolution, the Trust Agreement and the Contracts, and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Capitalized terms used but not defined herein have the meanings given to them in the Trust Agreement.

Based on the foregoing, we are of the opinion that, under existing law:

1. The Trust Agreement has been duly adopted by the Authority and constitutes the valid and binding obligation of the Authority enforceable against the Authority in accordance with Item 8.1
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its terms. The Trust Agreement creates a valid lien on and pledge of the Authority Revenues and other funds pledged thereby for the security of the Bonds, in accordance with its terms.

2. The Contracts have been duly adopted by the Authority and the City and constitute the valid and binding obligations of the Authority and the City, enforceable against the Authority and the City in accordance with their respective terms. The Contract for each System creates a valid lien on the Pledged Facility Component Revenues of such System and the other funds pledged by such Contract for the security of the installment payments payable thereunder, in accordance with their respective terms.

3. The Bonds have been duly authorized, executed and delivered by the Authority and are valid and binding special obligations of the Authority, payable solely from the Authority Revenues and the other sources provided therefor in the Trust Agreement.

4. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax.

Interest on the Bonds may be subject to the corporate alternative minimum tax.

The opinions set forth in the preceding paragraph are subject to the condition that the Authority and the City comply with all requirements of the Internal Revenue Code of 1986, as amended, relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. Each of the Authority and the City has made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the Bonds.

5. The interest on the Bonds is exempt from personal income taxation imposed by the State of California.

We express no opinion regarding any other tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Bonds. The rights of the owners of the Bonds and the enforceability of the Bonds and the Trust Agreement are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally, and by equitable principles, whether considered at law or in equity.

This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Our engagement with respect to this matter has terminated as of the date hereof. Moreover, our opinions are not a guarantee of a particular result, and are not binding on the Internal Revenue Service or any court; rather, our opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations and covenants referenced above.

Respectfully submitted,
Item 8.1
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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE
Relating to:
$___________

MOUNTAIN HOUSE FINANCING AUTHORITY

UTILITY SYSTEMS REVENUE BONDS
SUBORDINATE SERIES 2026
This Continuing Disclosure Certificate, dated as of November 1, 2026 (the “Disclosure Certificate”) is executed and delivered by the City of Mountain House (the “City”), in connection with sale and delivery of the above-captioned bonds (the “2026 Bonds”). The 2026 Bonds are being issued pursuant to the Marks Roos Local Bond Pooling Act of 1985 (commencing with Section 6584 of the California Government Code) (the “Act”), a Resolution adopted by the Board of Directors of the Authority, and a Trust Agreement, dated as of November 1, 2026 (the “Trust Agreement”) between the Authority and Computershare Trust Company, N.A., as trustee (the “Trustee”). The City certifies as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the 2026 Bonds and in order to assist the Participating Underwriters in complying with the Rule.

Section 2. Definitions. In addition to the definitions set forth above and in the respective Trust Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Annual Report Date” means the date that is 9 months after the end of the City’s fiscal year (currently March 31 based on the City’s fiscal year end of June 30). “Authority” mean Mountain House Financing Authority.
“Dissemination Agent” means Kosmont Financial Services or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.
“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement executed by the City in connection with the issuance of the 2026 Bonds.

Item 8.1
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“Participating Underwriter” means Piper Sandler & Co., the original underwriter of the 2026 Bonds required to comply with the Rule in connection with offering of the 2026 Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time.

Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing by March 31, 2027, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. 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 City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date.

If the City’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). The City 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 the City hereunder. (b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City, in a timely manner, shall provide (or cause the Dissemination Agent to provide) to the MSRB, a notice substantially in the format prescribed by the MSRB.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) The City’s audited financial statements 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 City’s audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.

Item 8.1
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(b) Updates to the information set forth in the following tables (which may be presented in a different format than in the Official Statement):
• Table 1 (fiscal year in which each Annual Report is filed only) • Tables 2–7 (most recently ended fiscal year only)
• Tables 8–10 (as of June 30 of most recently ended fiscal year) • Tables 11–13 (updated based on the updated Billable Units set forth in the prior item)
• Tables 14 and 15 (most recently ended calendar year only) • Tables 16, 18, 20, 22, and 24 (most recently ended fiscal year only) (c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the 2026 Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties. (4) Unscheduled draws on credit enhancements reflecting financial difficulties. (5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, 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 security, or other material events affecting the tax status of the security.
(7) Modifications to rights of security holders, if material.

Item 8.1
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(8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person.
(13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material (for the definition of “financial obligation,” see clause (e)). (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties (for the definition of “financial obligation,” see clause (e)).
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsection (a)(8) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected 2026 Bonds under the respective Trust Agreement. (c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) and (a)(15) of this Section 5 contain the qualifier “if material.” The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that the City determines the event’s occurrence is material for purposes of U.S. federal securities law. Whenever the City obtains knowledge of the occurrence of any of these Listed Events, the City will as soon as possible determine if such event would be material under applicable federal securities law. If such event is determined to be material, the City will cause a notice to be filed as set forth in paragraph (b) above. (d) Any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in Item 8.1
Mountain House                                               Page 354 of 618 E-5
a proceeding under the United States 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 City, or if such jurisdiction has been assumed by leaving the existing governing 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 City. (e) For purposes of Section 5(a)(15) and (16), “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.

Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under the Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.

Section 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the 2026 Bonds. If such termination occurs prior to the final maturity of the 2026 Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).

Section 8. Dissemination Agent. The City 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 Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign by providing 30 days’ written notice to the City.

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the 2026 Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the 2026 Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the 2026 Bonds in the manner provided in the respective Trust Agreement for amendments to the respective Trust Agreement with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the 2026 Bonds.

Item 8.1
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If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first Annual Report filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.

If an amendment is made to this Disclosure Certificate modifying the accounting principles to be followed in preparing financial statements, 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. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.

A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as for a Listed Event under Section 5(c).

Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City 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 City 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 City 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 11. Default. If the City fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the 2026 Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the respective Trust Agreement or any other agreement related to the 2026 Bonds, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.

Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, 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 its 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.

The Dissemination Agent shall have no duty or obligation to review any information provided to it by the City hereunder, and shall not be deemed to be acting in any fiduciary capacity for the City, the 2026 Bond holders or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the 2026 Bonds.

Item 8.1
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(b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.

Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners from time to time of the 2026 Bonds, and shall create no rights in any other person or entity.

Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.

CITY OF MOUNTAIN HOUSE
By:

City Manager

ACCEPTANCE OF
DISSEMINATION AGENT:

The undersigned hereby accepts the designation of
Dissemination Agent and agrees to further the
duties set forth in Section 3(c) of the foregoing
Continuing Disclosure Certificate.

KOSMONT FINANCIAL SERVICES
By:

Authorized Signatory
Item 8.1
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APPENDIX F

DTC AND THE BOOK-ENTRY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the 2026 Bonds, payment of principal, interest and other payments on the 2026 Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the 2026 Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.

Neither the issuer of the 2026 Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the 2026 Bonds (the “Agent”) take any responsibility for the information contained in this Appendix.

No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the 2026 Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the 2026 Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the 2026 Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities 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 Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. 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 Item 8.1
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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.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“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 Securities 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 Securities, except in the event that use of the book-entry system for the Securities is discontinued.

4. To facilitate subsequent transfers, all Securities 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 Securities 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 Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities 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.

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

6. Redemption notices will be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting Item 8.1
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rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the Securities 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 Issuer or Agent, 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, Agent, or Issuer, 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 Issuer or Agent, 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.

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

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

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

12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.

Item 8.1
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APPENDIX G

SPECIMEN MUNICIPAL BOND INSURANCE POLICY
Item 8.1
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APPENDIX H

TABLE OF ACCRETED VALUES
Item 8.1
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INTERFUND LOAN AGREEMENT
(Water Bond Fund to Wastewater Bond Fund)
This Interfund Loan Agreement (“Agreement”) is entered into as of ____________, 2026, between the City of Mountain House (“City”) Water Bond Fund and the City Wastewater Bond Fund. The Water Bond Fund will lend to the Wastewater Bond Fund, and the Wastewater Bond Fund will repay to the Water Bond Fund, an amount not to exceed the Principal Amount, plus interest accrued on the unpaid balance, on the following terms.

1. Background. The Mountain House Financing Authority expects to issue its Utility Systems Revenue Bonds, Subordinate Series 2026 (the “2026 Bonds”) to pay amounts the City owes developers for the costs of the City’s Water, Wastewater, and Storm Drain Systems (the “Developer Notes”). The share of 2026 Bond proceeds allocated to the Water System is expected to exceed the Water System Developer Notes, while the share allocated to the Wastewater System is not expected to be enough to pay the Wastewater System Developer Notes. This Agreement allows the excess Water System proceeds to be used to pay Wastewater System Developer Notes.

2. Purpose of the Loan. To provide funds to pay Developer Notes for Wastewater System capital improvements.

3. Principal Amount. Not to exceed Twenty-Four Million Eight Hundred Thousand Dollars ($24,800,000) (the “Principal Amount”). The amount actually lent may be less than the Principal Amount and will be the amount of 2026 Bond proceeds allocated to the Water System that are not needed to pay Water System Developer Notes, as determined by the Finance Director after the 2026 Bonds are issued. The loan will be recorded as a receivable of the Water Bond Fund and a payable of the Wastewater Bond Fund.

4. Term of the Loan. The loan begins on the date funds are first advanced under this Agreement, which will be on or after the date the 2026 Bonds are issued. The outstanding balance will be repaid as funds become available from the sources described in Section 6.

5. Scheduled Payments. The Wastewater Bond Fund will make a payment each fiscal year beginning with Fiscal Year 2027/2028. Each payment is due by December 31. Each annual payment will equal the interest accrued through the previous June 30, plus any principal payable from the sources described in Section 6. The Wastewater Bond Fund may prepay all or part of the outstanding balance at any time without penalty.

6. Repayment Sources. The Wastewater Bond Fund receives revenues from the Pledged Facility Component collected on utility bills. To the extent those revenues exceed the amounts required in a fiscal year to pay bonded debt and Developer Notes, the Wastewater Bond Fund will use the excess to make interest and principal payments to the Water Bond Fund. The City may also use annexation fees, future bond proceeds, and other lawfully available funds of the Item 8.1
Mountain House                                               Page 363 of 618 Wastewater System to repay the loan. Payments under this Agreement are subordinate to all payments due on bonds and other obligations secured by Wastewater System Pledged Facility Component revenues.

7. Rate of Interest. Interest will accrue annually on June 30 on the outstanding loan balance at the variable rate earned by the Local Agency Investment Fund for the fiscal year then ending.

Interest will be recorded as revenue of the Water Bond Fund and an expenditure of the Wastewater Bond Fund.

8. Relationship to 2023 Loan. The Interfund Loan Agreement dated June 14, 2023, under which the Wastewater Bond Fund lent funds to the Water Bond Fund, remains in effect. This Agreement does not modify it.

9. Accounting and Reporting. Payments under this Agreement will be reflected in the City’s proposed and adopted budgets. The City’s annual financial statements will show the loan amount, term, interest rate, and interest due.

10. Authority. The City Council approved this Agreement by Resolution No. 2026-____, adopted October 14, 2026.

11. General Provisions. This Agreement is the entire agreement between the parties concerning the loan. It may be amended only in a writing approved by the City Council and signed by the City.

CITY OF MOUNTAIN HOUSE
______________________________
Andy Su, Mayor
Date: _________________
______________________________
Steven J. Pinkerton, City Manager
Date: _________________
ATTEST:
______________________________
Margaret Wimberly, City Clerk
APPROVED AS TO FORM:
______________________________
John D. Bakker, City Attorney
Item 8.1
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INTERFUND LOAN AGREEMENT
(Stormwater Bond Fund to Wastewater Bond Fund)
This Interfund Loan Agreement (“Agreement”) is entered into as of ____________, 2026, between the City of Mountain House (“City”) Stormwater Bond Fund and the City Wastewater Bond Fund.

The Stormwater Bond Fund will lend to the Wastewater Bond Fund, and the Wastewater Bond Fund will repay to the Stormwater Bond Fund, an amount not to exceed the Principal Amount, plus interest accrued on the unpaid balance, on the following terms.

1. Background. The Mountain House Financing Authority expects to issue its Utility Systems Revenue Bonds, Subordinate Series 2026 (the “2026 Bonds”) to pay amounts the City owes developers for the costs of the City’s Water, Wastewater, and Storm Drain Systems (the “Developer Notes”). The share of 2026 Bond proceeds allocated to the Storm Drain System is expected to exceed the Storm Drain System Developer Notes, while the share allocated to the Wastewater System is not expected to be enough to pay the Wastewater System Developer Notes.

This Agreement allows the excess Storm Drain System proceeds to be used to pay Wastewater System Developer Notes.

2. Purpose of the Loan. To provide funds to pay Developer Notes for Wastewater System capital improvements.

3. Principal Amount. Not to exceed Six Million Five Hundred Thousand Dollars ($6,500,000) (the “Principal Amount”). The amount actually lent may be less than the Principal Amount and will be the amount of 2026 Bond proceeds allocated to the Storm Drain System that are not needed to pay Storm Drain System Developer Notes, as determined by the Finance Director after the 2026 Bonds are issued. The loan will be recorded as a receivable of the Stormwater Bond Fund and a payable of the Wastewater Bond Fund.

4. Term of the Loan. The loan begins on the date funds are first advanced under this Agreement, which will be on or after the date the 2026 Bonds are issued. The outstanding balance will be repaid as funds become available from the sources described in Section 6.

5. Scheduled Payments. The Wastewater Bond Fund will make a payment each fiscal year beginning with Fiscal Year 2027/2028. Each payment is due by December 31. Each annual payment will equal the interest accrued through the previous June 30, plus any principal payable from the sources described in Section 6. The Wastewater Bond Fund may prepay all or part of the outstanding balance at any time without penalty.

6. Repayment Sources. The Wastewater Bond Fund receives revenues from the Pledged Facility Component collected on utility bills. To the extent those revenues exceed the amounts required in a fiscal year to pay bonded debt and Developer Notes, the Wastewater Bond Fund will use the excess to make interest and principal payments to the Stormwater Bond Fund. The City Item 8.1
Mountain House                                               Page 365 of 618 may also use annexation fees, future bond proceeds, and other lawfully available funds of the Wastewater System to repay the loan. Payments under this Agreement are subordinate to all payments due on bonds and other obligations secured by Wastewater System Pledged Facility Component revenues.

7. Rate of Interest. Interest will accrue annually on June 30 on the outstanding loan balance at the variable rate earned by the Local Agency Investment Fund for the fiscal year then ending.

Interest will be recorded as revenue of the Stormwater Bond Fund and an expenditure of the Wastewater Bond Fund.

8. Accounting and Reporting. Payments under this Agreement will be reflected in the City’s proposed and adopted budgets. The City’s annual financial statements will show the loan amount, term, interest rate, and interest due.

9. Authority. The City Council approved this Agreement by Resolution No. 2026-____, adopted October 14, 2026.

10. General Provisions. This Agreement is the entire agreement between the parties concerning the loan. It may be amended only in a writing approved by the City Council and signed by the City.

CITY OF MOUNTAIN HOUSE
______________________________
Andy Su, Mayor
Date: _________________
______________________________
Steven J. Pinkerton, City Manager
Date: _________________
ATTEST:
______________________________
Margaret Wimberly, City Clerk
APPROVED AS TO FORM:
______________________________
John D. Bakker, City Attorney
Item 8.1
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