Agenda packet — Ontario City Council, June 4, 2024 (part 5 of 7)

EXHIBIT A
Location Map
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C I T y 0 F 0 N TA R I 0
303 EAST B STREET I ONTARIO, CALIFORNIA 91764 (909) 395·2000 FAX (909) 395-2070 OntarioCA.gov PAUL S. LEON
MAYOR

DEBRA PORADA

MAYOR PRO TEM
ALAN D. WAPNER
JIM W. BOWMAN

RUSEN VALENCIA

COUNCIL MEMBERS
AMENDMENT NO. 1

TO THE PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF ONTARIO AND
PETRA GEOSCIENCES, INC.

1. Parties and Date.

SHEILA MAUTZ

CITY CLERK
JAMES R. MILHISER

TREASURER

SCOTT OCHOA

CITY MANAGER
This Amendment No. 1 to the Agreement (as defined herein) is made and entered into as of this day of _______ , 2024, by and between the City of Ontario ("City") and Petra Geosciences, Inc., a California Corporation with its principal place of business at 3186 Airway A venue, Suite K, Costa Mesa, CA 92626 ("Consultant"). City and Consultant are sometimes individually referred to as "Party" and collectively as "Parties."

2. Recitals.

2.1 Agreement. The City and Consultant have entered into an agreement entitled "Professional Services Agreement" dated September 20, 2022 ("Agreement") for the purpose of retaining the services of CONSULTANT to provide geotechnical testing and inspection services for the San Antonio Transmission Water Main - 8
th Street Project, UT 1046.

2.2 Amendment Purpose. The City and Consultant desire to amend the Agreement to revise the scope of services and increase the compensation amount by Two Hundred Forty One Thousand Two Hundred Sixty Nine Dollars ($241,269) for a total not-to-exceed compensation amount of Four Hundred Ninety Eight Thousand Four Hundred Forty Four Dollars ($498,444) for the San Antonio Transmission Water Main - 8
th Street Project, UT 1046. This increase in
compensation is for unanticipated factors that led to unplanned effort on scope of work items listed in the attached Consultant's Proposal titled "Second Revised Request for Amendment to Existing Agreement (Amendment Request No. 1) for Additional Geotechnical Oversight Services During Construction and Materials Testing, OMUC Contract No. I 046, San Antonio Transmission Water Main - 8
th Street (San Antonio to Eighth) Phase 2, City of Ontario, California" and dated March 29, 2024.

2.3 Amendment Authority. This Amendment No. l is authorized pursuant to Section 3.2.4 of the Agreement.

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3. Additional Work (Term).

3.1 Section 3.1.2 of the Agreement is hereby amended in its entirety to read as follows:

3.1.2 Term.

The term of this Agreement shall be from October 29, 2022 to September 30, 2024, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. The Parties may, by mutual, written consent, extent the term of this Agreement if necessary to complete the Services.

3.2 Section 3.2.1 of the Agreement is hereby amended in its entirety to read as follows:

3.2.1 Compensation.

Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed Four Hundred Ninety Eight Thousand Four Hundred Forty Four Dollars ($498,444) without written approval of the City Council or City Manager, as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

3.3 Continuing Effect of Agreement. Except as amended by this Amendment No. 1, all other provisions of the Agreement remain in full force and effect and shall govern the actions of the parties under this Amendment No. 1. From and after the date of this Amendment No. 1, whenever the term "Agreement" appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 1.
3 .4 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this Amendment No. 1.

3.5 Severability. If any portion of this Amendment No. l is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall contin!le in full force and effect.

3.6 Integration. This Amendment represents the entirety of the Parties' understanding relating to the subject of this Amendment, including written or verbal communications between the Parties, which shall have no relevance unless expressly incorporated herein. This is an integrated amendment.
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Department: Public Works
Prepared By: Manuel Rebolledo
Staff Member Presenting: Tito Haes, Executive
Director Public Works
Reviewed By: Bonnie Tam, Gina Gomez
Approved By:

STREETLIGHT CONTROL SYSTEM SERVICES

CITY OF ONTARIO
Agenda Report
June 4, 2024
SECTION:

CONSENT CALENDAR
RECOMMENDATION: That the City Council authorize the City Manager or his designee to execute a Maintenance Services Agreement with Ubicquia, Inc., of Fort Lauderdale, Florida, to provide Smart Streetlight Monitoring Software and Data Retention Services for a total contract amount not-toexceed $470,000 for up to five (5) years.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
FISCAL IMPACT: The recommended contract award to Ubicquia, Inc., is for $94,000 annually for a total not-to-exceed contract amount of $470,000 over the five-year term. If approved, appropriations will be included in future Annual Budgets to City Council for approval as needed for Smart City Streetlight Control System Services.

BACKGROUND & ANALYSIS: The Municipal Services Department is responsible for the maintenance and repairs of 12,507 City-owned streetlights. On July 21, 2019, the City Council approved an Energy Services Contract with Climatec, LLC that included the conversion of City Streetlights to Light-Emitting Diode (LED) lights and the installation of the Smart City Control System with Ubicquia, Inc. The Climatec, LLC contract included the installation of the LED lights and smart nodes on the streetlights, and a 3-year connectivity and data retention with Ubicquia, Inc. The City has saved $1,326,288 in streetlight electricity costs with the conversion to LED lights and $528,000 with Yunex, Inc., by the elimination of night light surveys that were discontinued with the implementation of Ubicquia's Smart City Streetlight Control System. Staff recommends awarding the Maintenance Services Agreement to Ubicquia, Inc. to allow access to view real-time streetlight information; improving the response time to the maintenance and repairs of City streetlights. 1846
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Department: Fire Department
Prepared By: Nereida Medrano
Staff Member Presenting: Mike Gerken, Fire
Chief
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 23
SUBJECT: AN AMENDMENT TO THE GOODS AND SERVICES AGREEMENT WITH CALIFORNIA PPE RECON. INC. FOR RENTAL AND MAINTENANCE OF PERSONAL PROTECTIVE

EQUIPMENT FOR THE ONTARIO FIRE DEPARTMENT

CITY OF ONTARIO
Agenda Report
June 4, 2024
SECTION:

CONSENT CALENDAR
RECOMMENDATION: That the City Council authorize the City Manager, or his designee, to execute Amendment No. 1 to the Goods and Services Agreement with California PPE Recon. Inc., of Riverside, California for rental and maintenance of personal protective equipment (PPE) to increase the current contract by $85,000, plus a 10% contingency for a new not to exceed amount of $247,500 per contract year, for a total contract amount not to exceed $1,237,500 THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Maintain the Current High Level of Public Safety
FISCAL IMPACT: The Fiscal Year 2023-24 Adopted Budget includes appropriations in the General Fund for the rental and maintenance of PPE within the Fire Department operating budget. The recommended Amendment would increase the existing Agreement to $225,000 per year plus a 10% contingency of $112,500 for a total contract amount over a five-year period, not-to-exceed $1,237,500. If approved, appropriations will be included in future annual budgets to City Council for approval as needed for PPE.

BACKGROUND & ANALYSIS: The Ontario Fire Department has a longstanding commitment to the safety of its firefighters, consistently striving to meet and exceed the standards set by the National Fire Protection Association (NFPA). In compliance with the 2020 amendment to NFPA Standard 1851, which governs the maintenance of firefighter protective gear, the Ontario Fire Department has adopted more stringent inspection requirements. This NFPA amendment mandates that advanced inspections of protective gear, including comprehensive liner inspections and hydrostatic testing, be conducted annually. This is a significant change from the previous three-year requirement. This change inevitably led to higher costs associated with maintaining compliance and ensuring the safety of firefighter gear.

In an ongoing effort to provide exceptional service, the Ontario Fire Department recognizes the importance of rigorous training. The Department introduced the Fire Basic Academy last year, which is a thorough 16-week program, designed to equip recruits with no fire experience the skills 1851
and knowledge necessary for the demanding nature of firefighting. However, this intense training regimen has accelerated the wear and tear on structural firefighting gear, prompting the Ontario Fire Department to explore more sustainable solutions.

To address the challenges, the Fire Department initiated a rental program for turnout gear during the first year of a firefighter's service. This innovative approach not only mitigates the costs associated with premature gear degradation, but also offers firefighters the opportunity to train with gear that meets the latest NFPA safety standards. By doing so, firefighters are better prepared to face the evolving challenges and hazards of modern firefighting. Specifically, this rental program was initiated soliciting proposals through the City’s bid management system in March 2023 to adhere to the compliance requirements of NFPA 1851. One proposal was submitted from the potential 205 bidders. Staff reviewed the proposal and recommended California PPE Recon, Inc. of Riverside, CA, to provide the necessary services. Over the course of the year, Staff has had an exceptional experience with the vendor who has ensured efficient turnaround times for gear inspections, repairs, and rentals, thereby enhancing our operational readiness. As such, Staff is recommending Amendment No. 1 with California PPE Recon, Inc. to increase and extend the contract amount from $140,000 per year to $225,000 per year plus a 10% contingency of $112,500, for a contract amount of over a five-year period, not-to-exceed $1,237,500. 1852
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1. Parties and Date.

This Amendment No. 1 to the Agreement (as defined herein) is made and entered as of ____________, by and between the City of Ontario (“City”) and California PPE Recon. Inc., a CORPORATION (“Vendor”). City and Vendor are sometimes individually referred to as “Party” and collectively as “Parties.”

2. Recitals.

2.1 Agreement. The City and Vendor have entered into an agreement entitled “Goods & Services Agreement” dated April 18, 2023 (“Agreement”).

2.2 Amendment Purpose. The City and Vendor desire to amend the Agreement to increase compensation and extend term.

2.3 Amendment Authority. This Amendment No. 1 is authorized pursuant to Sections

2.1 and 3.1 of the Agreement.

3. Terms.

3.1 Amendment. Sections 2.1 and 3.1 of the Agreement is hereby amended in its entirety to read as follows:
“2.1 The term of this Agreement shall be from April 10, 2023 to June 30, 2028, unless earlier terminated as provided herein. Vendor shall provide all Goods and complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. The Parties may, by mutual, written consent, extend the term of this Agreement if necessary to complete the work.”
“3.1 Compensation. Vendor shall receive compensation, including authorized reimbursements, for all Goods provided and Services rendered under this Agreement at the rates set forth in Exhibit “A” attached hereto and incorporated herein by reference. The total 1853
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compensation shall not exceed Two Hundred Twenty-Five Thousand dollars ($225,000.00) annually with a total not to exceed One Million One Hundred TwentyFive Thousand dollars ($1,125,000), for the term of the contract without written approval of City Manager. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.” Attachment A will replace fee schedule in Exhibit A hereto and incorporated herein by reference.

3.2 Continuing Effect of Agreement. Except as amended by this Amendment No. 1, all other provisions of the Agreement remain in full force and effect and shall govern the actions of the parties under this Amendment No. 1. From and after the date of this Amendment No. 1, whenever the term “Agreement” appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 1.

3.3 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this Amendment No. 1.

3.4 Severability. If any portion of this Amendment No. 1 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.5 Integration. This Amendment represents the entirety of the Parties’ understanding relating to the subject of this Amendment, including written or verbal communications between the Parties, which shall have no relevance unless expressly incorporated herein. This is an integrated amendment.
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SIGNATURE PAGE FOR AMENDMENT NO. 1 TO GOODS & SERVICES

AGREEMENT BETWEEN THE CITY OF ONTARIO
AND CALIFORNIA PPE RECON. INC
IN WITNESS WHEREOF, the Parties have entered into this Amendment No. 1 as of the day and year first above written.

CITY OF ONTARIO CALIFORNIA PPE RECON. INC
By:

Its:

Printed Name:

By:

Its:

Printed Name:
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
Approved By:

Scott Ochoa
City Manager
Approved as to Form:
_____________________________________
Best Best & Krieger LLP
City Attorney
Attested By:

City Clerk
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Department: Police Department
Prepared By: Lizceth Zazueta
Staff Member Presenting: Mike Lorenz, Chief of
Police
Approved By:

DISTRICT FOR SCHOOL RESOURCE OFFICERS

CITY OF ONTARIO
Agenda Report
June 4, 2024
SECTION:

CONSENT CALENDAR
RECOMMENDATION: That the City Council approve and authorize the City Manager or his designee to execute a Cost Sharing Agreement with the Chaffey Joint Union High School District for three School Resource Officers for a total revenue amount of $1,381,163.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Maintain the Current High Level of Public Safety
Pursue City's Goals and Objectives by Working with Other Governmental Agencies Operate in a Businesslike Manner
FISCAL IMPACT:

The School Resource Officer Cost Sharing Agreement will recoup 50 percent of the costs to provide services of three Police Officers placed at Chaffey Joint Union High School District schools to the General Fund. The revenue amount for year one is $255,000, year two is $265,200, and year three is $275,808, for a total revenue amount of $796,008. If the two additional option years are exercised, the revenue amount of option year four is $286,841 and option year five is $298,314, for a total revenue amount of $1,381,163 for School Resource Officers (SRO) to the General Fund. Revenues for future fiscal years will be included in the respective fiscal year's budgets for City Council consideration and approval.

BACKGROUND & ANALYSIS: School districts nationwide have come to see the benefits of having a School Resource Officer (SRO) on campus. The presence of SROs has been proven to deter behavior that is not normally accepted by society. The SRO Program creates an environment that adds to the safety of our school campuses. The SRO is involved in a variety of functions aimed at prevention and on-site crisis intervention, as well as a resource for students, parents, teachers, and administration regarding law issues. SROs have become positive role models for the students of Ontario and work hand in hand with the administrators in each school finding solutions to problems affecting school children of today. The result is that when children feel safe about their 1859
learning environment, they are more likely to learn what is being taught.

The Ontario Police Department has assigned one SRO at Chaffey High School, Colony High School, and Ontario High School. The Cost Sharing Agreement will allow Chaffey Joint Union High School District to share in the cost of maintaining the three Officers placed under this Agreement at 50 percent of the Officer's collective total salary and benefits costs. The City of Ontario Police Department has provided Chaffey Joint Union High School District SRO services since 2001.

Continuing SRO services brings value to the City of Ontario, not only sharing in salary costs to maintain services, but in shaping the future of our children and how they interact with Law Enforcement.
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AGREEMENT

FOR SCHOOL RESOURCE OFFICER(S)

BETWEEN

THE CITY OF ONTARIO AND

THE CHAFFEY JOINT UNION HIGH SCHOOL DISTRICT
This Agreement for the Provision of School Resource Officer(s) (the “Agreement”) is made and entered into this _____ day of ___________________, _______ by and between the CITY OF ONTARIO, hereinafter referred to as “CITY,” and the CHAFFEY JOINT UNION HIGH SCHOOL DISTRICT, hereinafter referred to as “DISTRICT.” The CITY and the DISTRICT may be referred to in this Agreement individually as “PARTY” or collectively as “PARTIES.” NOW, THEREFORE, in consideration of the premises and mutual conditions hereinafter provided, it is agreed by and between the PARTIES as follows:

1. RECITALS. This Agreement is entered into with reference to the following facts and objectives:
a. The PARTIES desire the CITY through its Police Department to place a sworn Police Officer (“Officer”) at Chaffey High School, Ontario High School, and Colony High School as assigned to the School Resource Officer Program (“Program”) for the ten (10) months of the regular school year. A total of three (3) Officer(s) will be placed under this Agreement for the Agreement Term.
b. The Program will allow for an immediate and appropriate police response to calls for service generated from the campuses of Chaffey High School, Ontario High School, and Colony High School and for an Officer’s presence at Chaffey High School, Ontario High School, and Colony High School campuses.
c. The Program provides a means for positive student, faculty, staff, and law enforcement interaction and crises intervention.
d. The Program provides a positive role model for students.

2. TERM AND TERMINATION.
a. Term. The term of this Agreement for Fiscal Year 2024-2025 (“Fiscal Year”) is for the ten (10) month period beginning August 01, 2024, and ending on May 31, 2025; for Fiscal Year 2025-2026 (“Fiscal Year”) is for the ten (10) month period beginning August 01, 2025, and ending on May 31, 2026 (“Program End Date”); for Fiscal Year 2026-2027 (“Fiscal Year”) is for the ten (10) month period beginning August 01, 2026, and ending on May 31, 2027 (“Program End Date”). The City shall have the unilateral option, by mutual written consent of the PARTIES, to renew this Agreement automatically for no more than two (2) additional one (1)-year terms. b. Termination. The CITY or DISTRICT may terminate all or any portion of this Agreement at any time upon providing ten (10) days prior written notice to the other 1861
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Party. The PARTIES may agree to terminate with shorter notice upon the PARTIES mutual written consent.

3. SCOPE OF SERVICES.

The Officer shall provide services to the DISTRICT pursuant to the terms of this Agreement, as described in Exhibit A which is attached hereto and incorporated herein by reference.

4. CITY EMPLOYEE.

It is understood by both PARTIES that the Officer(s) shall remain the CITY’s employee(s) during the term of this Agreement. City shall therefore pay the salary, insurance, and other related benefits/pension plan the CITY provides to employees. Nothing contained in this Agreement shall create an employer-employee relationship between the DISTRICT and any Officer.

5. GENERAL ADMINSTISTRATION, SUPERVISION AND MANAGEMENT The CITY Chief of Police shall have the primary administrative responsibility under this Agreement for the City. The Chief of Police or his/her designee shall consult with the Superintendent of the DISTRICT or his or her designee on matters that pertain to this Agreement.

Any complaint or allegations of misconduct involving or against the OFFICER arising out of the performance of this Agreement shall be reported to the Chief of Police and shall be handled in accordance with the policies, procedures, and practices applicable to the OFFICER as a CITY employee. However, DISTRICT retains the right to request that OFFICER be removed or reassigned from the performance of this Agreement at DISTRICT’s sole discretion.

6. COST SHARING.
a. The CITY and DISTRICT will share the cost of the three (3) Officer(s) placed under this Agreement at 50% of the Officer’s collective total salary and benefits costs. The estimated cost for the period of ten (10) months per fiscal years is $510,130.00. b. The DISTRICT agrees to pay an annual amount of $255,000.00 for the Fiscal Year 2024-25; $265,200.00 for Fiscal Year 2025-26; $275,808.00 for Fiscal Year 2026-27 of this Agreement, which is approximately 50% of the estimated cost of an SRO at each of the three schools
c. The CITY will invoice the DISTRICT for its share of the annual costs $255,000.00 on March 1, 2024. The DISTRICT agrees to pay the invoice within thirty (30) days. d. In the event this Agreement is terminated by either party prior to the Program End Date, DISTRICT agrees to pay for its share of costs, which shall be prorated and invoiced accordingly by the CITY.
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COMPLIANCE WITH FEDERAL AND STATE LAW
CITY shall ensure that OFFICER complies with applicable federal, state and local laws and regulations including, but not limited to the Family Educational Rights and Privacy Act (FERPA”) 20 USC 1232g, 34 CFR, Part 99 and California Education Code sections 49073 to 49079.7 et. seq. which pertains to the privacy of pupil records

7. INSURANCE. The PARTIES shall each maintain adequate insurance coverage for the activities contemplated herein for the duration of this Agreement.

8. INDEMNIFICATION.

To the extent permitted by law, DISTRICT hereby agrees to and shall indemnify, defend, and hold CITY, its elective and appointive boards, officers, agents, volunteers, and employees harmless for any and all claims, actions, losses, liability or damages or claims for damage for personal injury, including death, as well as from claims from breach of confidentiality or property damage which may arise from DISTRICT’s negligent or intentional acts, errors or omissions under this Agreement, except where such indemnification is prohibited by law.

To the extent permitted by law, CITY hereby agrees to and shall indemnify, defend, and hold DISTRICT, its elective and appointive boards, officers, agents, volunteers, and employees harmless for any and all claims, actions, losses, liability or damages or claims for damage for personal injury, including death, as well as from claims from breach of confidentiality or property damage which may arise from CITY’s negligent or intentional acts, errors or omissions under this Agreement, except where such indemnification is prohibited by law.

9. NOTICE.

All notices to be given hereunder shall be in writing and may be made either by personal delivery or by registered or certified mail, postage prepaid, return receipt requested. Mailed notices shall be addressed to the PARTIES at the addresses listed below, but each PARTY may change the address by written notice to the other PARTY. Notices delivered personally will be deemed communicated as of actual receipt; mailed notices will be deemed communicated as of two (2) days after mailing:

If to the CITY: City of Ontario – Ontario Police Department 2500 S, Archibald Avenue
Ontario, CA 91761
Attn: Thomas O’Dell
Phone: (909) 408-1859
E-mail:[email protected]
If to the DISTRICT: Chaffey Joint Union High School District 211 West 5th Street
Ontario, CA 91762
Attn: Robert McCoy
Phone: (909) 988-8511 ext. 2620
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E-mail:[email protected]

10. GENERAL TERMS.
a. Relationship of the Parties. Nothing contained in this Agreement shall be construed as creating a joint venture, partnership, or any other similar arrangement between the PARTIES. No PARTY to this Agreement shall be deemed to be a representative, an agent, or an employee of the other PARTY.
b. No Third-Party Beneficiaries. This Agreement and the performance of the PARTIES’ obligations hereunder are for the sole and exclusive benefit of the PARTIES. No person or entity who or which is not a signatory to this Agreement shall be deemed to be benefited or intended to be benefited by any provision hereof, and no such person or entity shall acquire any rights or causes of action against either PARTY hereunder as a result of a PARTY’s performance or non-performance of its responsibilities under this Agreement.
c. Entire Agreement. This Agreement constitutes the entire understanding between the PARTIES with respect to the matters set forth above and supersede all prior or contemporaneous understanding or agreements between the PARTIES with respect to the subject matter, whether oral or written.
d. Amendments. Modifications or amendments to the terms of this Agreement shall be in writing and executed by both PARTIES.
e. Non-assignability. Neither this Agreement nor any duties or obligations under this Agreement may be assigned, in whole or in part, by the DISTRICT without prior written consent of the CITY.
f. Governing Law and Venue. This Agreement and all rights and obligations arising out of it shall be construed in accordance with the laws of the State of California, without reference to conflict of laws principles, and any arbitration, mediation, litigation, or other proceeding arising out of this Agreement shall be conducted only in the County of San Bernardino.
g. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which, taken together, shall be deemed to be one and the same document.
h. Electronic Signature/Transmission. This Agreement may be signed using an electronic signature. A manually or electronically signed copy of this Agreement which is transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Agreement for all purposes.
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IN WITNESS WHEREOF, the PARTIES hereto have executed this Agreement as of the day and year first written above.

CITY OF ONTARIO CHAFFEY JOINT UNION HIGH

SCHOOL DISTRICT
By: __________________________________
Scott Ochoa, City Manager
Date: ____________________
By:_____________________________
Kern Oduro, Assistant Superintendent
Date: ____________________
APPROVED AS TO LEGAL FORM:

By:__________________________________
Best Best & Krieger LLP, City Attorney
Date: ____________________
ATTEST:

By:_____________________________________
Sheila Mautz, City Clerk
Date: ____________________
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Exhibit A
Scope of Services
 Build professional relationships with students, teachers, administrators, counselors, and other school staff.
 Assist school psychologist and Therapist to conduct mental health evaluations.  Offer resources and guidance to all students and staff.  Protect life and property on school campus.
 Respond to calls for service in/around the school, especially those outside of the school that directly affect students.
 Enforce the law and conduct thorough investigations as they are reported.  Work with school discipline administrators to assist in correcting bad behavior.  Understand and assist with school safety plans. (I.E. Active Shooter training).  Offer mentorship and be a positive role model to all students on campus.  Educate staff and students on several community dangers such as: Drugs, crime awareness and behaviors.
 Participate in student functions such as Career Day, College Day, and various other school events.
 Build positive, healing relationships among Law Enforcement, the youth, and their families.
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Department: Planning
Prepared By: Diane Ayala
Staff Member Presenting: Scott Murphy,
Executive Director Community Development
Reviewed By: Kimberly Ruddins, Henry Noh
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 25
SUBJECT: AN AMENDMENT TO THE DESIGN SERVICES AGREEMENT WITH THIRTIETH STREET ARCHITECTS, INC., FOR THE DOWNTOWN A1 BLOCK PRESERVATION PROJECT DESIGN

CITY OF ONTARIO
Agenda Report
June 4, 2024
SECTION:

CONSENT CALENDAR
RECOMMENDATION: That the City Council take the following actions:

A. Authorize the City Manager or his designee to execute Amendment No. 5 to the Design Services Agreement with Thirtieth Street Architects, Inc., of Newport Beach, California, in the amount of $147,300 for a total not-to-exceed $706,600; and B. Authorize the City Manager or his designee to execute all documents required for the completion of the project including, but not limited to, contracts, agreements, assessments, easements, reduction of retention accounts, and filing a notice of completion at the conclusion of all construction related activities.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Focus Resources in Ontario's Commercial and Residential Neighborhoods Invest in the Growth and Evolution of the City's Economy Operate in a Businesslike Manner
FISCAL IMPACT: The Fiscal Year 2023-2024 Adopted Budget includes appropriations in the General Fund for the Downtown A1 Block Mothball project design. The proposed Amendment would increase the contract amount by $147,300 for a not-to-exceed contract amount of $706,600.

BACKGROUND & ANALYSIS: The historic Citizens Bank, Lerch Building, and the Commercial Hotel are located within the Civic Center Planned Unit Development and are bordered by Euclid Avenue to the west, Holt Boulevard to the south, B Street to the north, and Lemon Avenue to the east, also referred to as the A1 Block. The City Council designated the buildings as local historic landmarks on January 20, 1998. The buildings provide a visual history of early twentieth-century commercial development in Ontario which is evident by the survival of prominent architectural features.

Preservation and adaptive reuse of the buildings are integral to the implementation of the Downtown Civic Center Project and can contribute to downtown revitalization. 1867
The acquisition of the A1 Block began in 2003 with the last few remaining properties acquired in 2016 by the City of Ontario for the purpose of land assembly. This assemblage is part of the Downtown Civic Center Project for future sale to, and adaptive reuse by, a private investor.

Unfortunately, deterioration and vandalism of these historic buildings are continuing to occur.

Therefore, to secure the preservation of these historic buildings until funding and development of the site, the A1 Block would benefit from the development of a security plan, maintenance and monitoring plan, and the identification of temporary/interim repairs through a process known as “mothballing.” Mothballing is a widely practiced preservation treatment that requires identification and assessment of the existing building conditions and sets priorities for repairs that are necessary to stabilize the building and arrest rapid deterioration. It is the practice of closing up a building temporarily to protect it from the weather as well as to secure it from vandalism for short or long term (2 to 10 years) until such time funding and development of the site can occur.

The mothball plan is prepared by an architect or preservation specialist and, in some cases a structural engineer, to evaluate the age and condition of the major elements of the buildings including foundations, structural systems, exterior materials, roofs and gutters, interior finishes, staircases, plumbing, electrical, and mechanical systems, and site drainage. The three highest priorities for the building while mothballed are to: 1) protect the building from sudden loss; 2) weatherize and maintain the property to stop moisture penetration; and 3) control the humidity levels inside once the building has been secured, positioning the historic buildings for successful adaptive reuse development.
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AMENDMENT NO. 5 TO THE DESIGN SERVICES AGREEMENT

BETWEEN THE CITY OF ONTARIO AND
THIRTIETH STREET ARCHITECTS, INC.

1. Parties and Date.

This Amendment No. 5 to the Agreement (as defined herein) is made and entered as of ____________, by and between the City of Ontario (“City”) and Thirtieth Streets Architects, Inc. a Corporation (“Consultant”). City and Consultant are sometimes individually referred to as “Party” and collectively as “Parties.”

2. Recitals.

2.1 Agreement. The City and Consultant have entered into an agreement entitled “Design Services Agreement” dated February 15, 2021 (“Agreement”).

2.2 Amendment Purpose. The City and Consultant desire to amend the Agreement to revise the scope of services for the Downtown Mothball Plan set forth in Amendment No. 5 – Attachment “A” and increase the not-to-exceed compensation amount by One Hundred Forty Seven Thousand Three Hundred Dollars ($147,300). The Parties have heretofore entered into Amendment No. 1 dated April 19,2022, Amendment No. 2 dated March 21, 2023, Amendment No. 3 dated November 1, 2023, and Amendment No. 4 dated March 19, 2024.

2.3 Amendment Authority. This Amendment No. 5 is authorized pursuant to Section

3.8.1 of the Agreement.

3. Terms.

3.1 Amendment. Section 3.10.1 of the Agreement is hereby amended in its entirety to read as follows:
“3.10.1 Consultant's Compensation for Basic Services. City shall pay to consultant, for the performance of all Services rendered under this Agreement, with the total not to exceed amount of Seven Hundred Six Thousand Six Hundred Dollars ($706,600) ("Total Compensation").

This Total Compensation amount shall be based upon, and may be adjusted according to, the fee schedule and related terms and conditions attached hereto as Exhibit "B" and incorporated herein by reference.

The Total Compensation, as may be adjusted upon mutual agreement, shall constitute complete and adequate payment for Services under this Agreement."
Exhibit A is hereby deleted in its entirety and replaced with Attachment A attached hereto and incorporated herein by reference.

3.2 Continuing Effect of Agreement. Except as amended by this Amendment No. 5, all 1869
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other provisions of the Agreement remain in full force and effect and shall govern the actions of the parties under this Amendment No. 5. From and after the date of this Amendment No. 5, whenever the term “Agreement” appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 5.

3.4 Severability. If any portion of this Amendment No. 5 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

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SIGNATURE PAGE FOR AMENDMENT NO. 5 TO THE DESIGN SERVICES

AGREEMENT BETWEEN THE CITY OF ONTARIO
AND THIRTIETH STREET ARCHITECTS, INC.

IN WITNESS WHEREOF, the Parties have entered into this Amendment No. 5 as of the day and year first above written.

CITY OF ONTARIO THIRTIETH STREET ARCHITECTS, INC.

By:

Its:

Printed Name:

By:

Its:

Printed Name:

If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED
Approved By:

Scott Ochoa
City Manager
Approved as to Form:
_____________________________________
Best Best & Krieger LLP
City Attorney
Attested By:

City Clerk
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architecture
2821 newport blvd.
phone (949) 673-2643
historical rehabilitation
newport beach
fax (949) 673-8547
planning
california 92663
email: [email protected]
founding principals
john c. loomis, architect
james c. wilson, architect
principal
elwood l. gulley, architect

AGREEMENT
The following is an agreement dated March 26, 2024, between the City of Ontario, 303 East “B” Street, Ontario, CA and Thirtieth Street Architects, Inc., 2821 Newport Boulevard, Newport Beach, CA 92663 to prepare a Mothballing Plan consistent with the City of Ontario Historic Preservation Ordinance and National Park Service Bulletin 34, Mothballing Historic Buildings, for the following existing buildings located on the east side of the 100 N. Block of Euclid Avenue in Ontario, CA hereinafter referred to as the project.

The following buildings addresses are included in this study:
114 -118 North Euclid Avenue
122 North Euclid Avenue
124-126 North Euclid Avenue
128 -132 North Euclid Avenue
Project Team
Preservation Architect Thirtieth Street Architects, Inc.

Prime Consultant 2821 Newport Boulevard
Newport Beach, CA 92663
949) 673-2643
Structural Engineer Grimm and Chen
17500 Redhill Ave. Suite 240
Irvine, CA. 92614
(949) 250-3150
MEP Engineer NV-5
163 Technology Dr.

Irvine, CA 92618
(714) 478-6155
thirtieth
street
architects
inc.
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Services Provided by the City
 Providing access to the buildings as required.

Base Services Included

SCOPE OF WORK
Phase I, Prepare As-Built Drawings for Lerch Building at 122 N. Euclid Avenue only, Prepare Conditions Assessment and Mothballing Recommendations for all four buildings listed above.

Prepare “As-Built” Drawings of the existing Lerch Building at 122 N. Euclid Avenue only.

The Team shall provide the following services for each building:

The Architect shall have the following reports prepared for all the buildings in this study:
 Providing a Hazardous Materials Study
 Providing a Termite and Mold/Mildew Reports
 Providing services of a Security Systems Consultant
(Please note that the cost of these reports will be billed as reimbursable costs.) The Team shall conduct a cursory, on-site investigation to verify existing conditions relating to the following mothballing issues:

Evaluate how and where to Secure the Building
Eradication of Vermin or Birds and droppings
Structural Stability of the Structures and any needed shoring Condition and functionality of any existing utilities or interim utility replacement.

Methods of providing ventilation to all levels of existing buildings Identify all needed building exterior water proofing improvements.

Identify methods to secure all exterior window and door openings.

Identify secure point of entry for on-site surveillance and monitoring.

Discuss the need for an on-site security system with direct-dial notification to the police and fire departments.

Make recommendation regarding physical appearance of the building exterior during duration of mothballing.

Discuss surveillance and monitoring schedule appropriate for the buildings.

Make recommendations on hazardous materials, mold and mildew, and termite treatments.

All recommendations should be designed to remain functional for a minimum period of ten years with reasonable maintenance.

Summarize findings and recommendations in a brief written report. 1873

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Based on the Conditions Assessment and Mothballing Report, the Architect shall prepare cursory Conceptual Drawings to illustrate the proposed scope of work. These drawing shall also show proposed exterior changes and/or aesthetic enhancement treatments such as securing existing openings and boarding up storefronts so that the visual character of the 100 block is preserved and is compatible with adjacent blocks.

Include a Cost Estimate for all mothballing recommendations for each address.

The City shall then review the Conceptual Mothballing Drawings and shall make any suggested modifications or changes to the scope of work.

Meet with the City to review any comments or recommended revisions to the study.

Make all necessary revisions as required.

Phase I Products:

As-built drawings including floor plans of all levels, roof plan, exterior elevations and two building sections for 122 N. Euclid Avenue only.

Hazardous materials study, mold and mildew study termite study and Security Consultant recommendations.

Conditions Assessment and Moth Balling Recommendations for each building Conceptual Mothballing Drawings
Cost Estimates for the work on each building
Phase II, Prepare Construction Documents for Implementation of Mothballing Recommendations (Optional)
After the review and approval of the Mothballing Recommendations Study by the City, the Team shall prepare construction documents including working drawings and specifications to construct the recommended improvements including Structural, Mechanical and Electrical Engineering as required.

The Team shall prepare a Construction Document Statement of Probable Costs for the project.

The Team shall submit the Construction Documents for Plan Check and make all necessary revisions.

Phase II Products
Construction Documents for Mothballing
Construction Document Statement of Probable Cost
Phase III, Construction Observation (Optional)
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The Team shall provide Construction Observation services for the construction of the project.

The Architect shall visit the site at intervals appropriate to the stage of construction or as otherwise agreed by the Architect in writing to become generally familiar with the progress and quality of the Work and to determine in general if the Work is proceeding in accordance with the Contract Documents. However, the Architect shall not be required to make exhaustive or continuous on-site inspections to check the quality or quantity of the Work. On the basis of such on-site observations as an Architect, the Architect shall keep the Owner informed of the progress and quality of the Work, and shall endeavor to guard the Owner against defects and deficiencies in the Work of the Contractor.

The Architect does not guarantee the performance of contracts by the construction contractor(s), or other third parties, nor is the Architect responsible for their acts or omissions. The Architect has not been retained or compensated to provide design and construction review services relating to the Contractor's safety precautions or to means, methods, techniques, sequences, or proceedings required for the Contractor to perform his work but not relating to the final or completed structure; omitted services include but are not limited to shoring, scaffolding, underpinning, temporary retainment of excavations and any erection methods and temporary bracing.

The Architect shall be the interpreter of the requirements of the Contract Documents and the judge of the performance thereunder by both the Owner and Contractor. The Architect shall render interpretations necessary for the proper execution or progress of the Work with reasonable promptness on written decisions, within a reasonable time, on all claims, disputes, and other matters in question between the Owner and the Contractor relating to the execution or progress of the Work or the interpretation of the Contract Documents.

Interpretations and decisions of the Architect shall be consistent with the intent of and reasonably inferable from the Contract Documents and shall be in written or graphics form. In the capacity of interpreter and judge, the Architect shall endeavor to secure faithful performance by both the Owner and the Contractor, shall not show partiality to either, and shall not be liable for the result of any interpretation or decision rendered in good faith in such capacity.

The Architect’s decisions in matters relating to artistic effect shall be final if consistent with the intent of the Contract Documents. The Architect’s decisions on any other claims, disputes, or other matters, including those in question between the Owner and the Contractor, shall be subject to arbitration as provided in the Agreement and in the Contract Documents.

The Architect shall have authority to reject Work which does not conform to the Contract documents, as agreed upon with the Owner. Whenever, in the Architect's reasonable opinion, it is necessary or advisable for the implementation of the intent of the Contract Documents, the Architect will have authority to require special inspection or testing of the Work in accordance with the provisions of the Contract Documents, whether or not such Work be then fabricated, installed or completed.
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The Architect shall review and approve or take other appropriate action upon the Contractor's submittals such as shop drawings, product data, and samples, but only for conformance with the design concept of the Work and with the information given in the Contract Documents. Such action shall be taken with reasonable promptness so as to cause no delay. The Architect's approval of a specific item shall not indicate approval of an assembly of which the item is a component.

It is agreed that the Owner shall hire all Contractors/Subcontractors, and handle all certificates for payments. The Owner shall file Notice of Completion and shall be responsible for all matters regarding liens.

The extent of the duties, responsibilities, and limitation of authority of the Architect as the Owner's representative during construction shall not be modified or extended without written consent of the Owner, the Contractor, and the Architect.

The Architect shall meet with the Clients periodically.

Phase III, Products:
 Miscellaneous documents.

ADDITIONAL SERVICES
The following services are not included in Basic Services.

Providing any other services not otherwise included in this Agreement or not customarily furnished in accordance with generally accepted Architectural practice.

OWNER'S RESPONSIBILITIES
The Owner shall provide full information regarding his requirements for the Project. The Owner shall designate, when necessary, a representative authorized to act in his behalf with respect to the Project. The Owner or his representative shall examine documents submitted by the Architect and shall render decisions pertaining thereto promptly, to avoid unreasonable delay in the progress of the Architect.

The Owner shall furnish full access to the buildings as requested by the Team.

The Owner shall furnish information required of him expeditiously as necessary for the orderly progress of the Work.

PROFESSIONAL FEES
The Professional Fee for Phase I through III shall be as listed below, plus reimbursable expenses:
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Phase Fee
Phase I, As-Built Drawings for 122 N. Euclid,
Conditions Assessment and Mothballing
Recommendations for all Buildings Lump Sum of $46,000
Phase II, Construction Documents (Optional) NTE $48,500 Phase III, Construction Observation (Optional) NTE $18,800 Reimbursable Allowance NTE $34,000*
*Includes technical studies.

Total NTE $147,300
HOURLY FEE SCHEDULE:

Hourly Billing Rates
If additional services are requested, they shall be billed at the following hourly rates:

Architect
Principal $225/hr.

Licensed Architect $200/hr.

Draftsperson $175/hr.

Structural Engineer $230/hr.

MEP Engineer $220/hr.

Billings shall be made to the Owner monthly in proportion to the Work completed plus reimbursable expenses and are to be paid within fifteen (15) days of receipt.

Reimbursable expenses shall be billed at a multiple of 1.1 x cost to cover processing and bookkeeping.

Reimbursable Cost Schedule
Blueprinting Invoice
In-house photo-copying .25/page
In-house blueprints $1/sheet
In-house color copies $1/sheet
Other Expenses Cost
The fees listed above and the hourly rates listed are subject to a cost of living increase two years from the date of this Agreement.
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TIME OF PERFORMANCE
We estimate the following time frame to complete the work:

Phase Time
Phase I, Conditions Assessment and
Mothballing Recommendations 9 weeks
Phase II, Construction Documents (Optional) 4-6weeks
Phase III, Construction Observation (Optional) As needed It is agreed that if suit is filed or informal proceedings are needed to obtain or to enforce payment of the statement, Owner is to pay the Architect, in addition to the amount of the statement and interest thereon, all costs of collection including court costs, and such reasonable attorney's fees as the court may fix, or if collection is obtained without court action, then in the amount of fifteen (15) percent of the total amount due, including interest.

Owner hereby agrees that the balance as stated on the billing from the Architect to Owner is correct, conclusive and binding on the Owner unless Owner, within ten (10) days from the date of the making of the billing, notifies the Architect in writing of the particular item that is alleged to be incorrect. Payment for the Architect's services are not contingent upon the Owner's ability to collect monies due the Owner.

No deductions shall be made from the Architect's compensation on account of penalty, liquidated damages or other sums withheld from payments to Contractors.

If the Project is suspended by the Owner or abandoned in whole or in part, the Architect shall be paid his compensation for services performed prior to receipt of written notice from the Owner of such suspension or abandonment, together with reimbursable expenses then due.

DEFAULT
In the event Owner fails to pay the Architect within thirty (30) days after invoices are rendered, Owner agrees that the Architect shall have the right to consider said default a total breach of this Agreement and, upon written notice, the duties, obligations and responsibilities of the Architect under this Agreement are terminated. In such event, Owner shall then promptly pay the Architect all of the fees and charges for services rendered by the Architect.

DELAYS
Neither party shall hold the other responsible for damages or delay in performance caused by acts of God, strikes, lockouts, accidents, or other events beyond the other's control. 1878

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TERMINATION
This Agreement may be terminated by either party upon seven days written notice should the other party fail substantially to perform in accordance with its terms through no fault of the other. In the event of termination due to the fault of others than the Architect, the Architect shall be paid his compensation for services performed to termination date, including reimbursable expenses then due and all terminal expenses.

SUCCESSORS AND ASSIGNS
The Owner and Architect each binds himself, his partners, successors, assigns and legal representatives to the other party to this Agreement. Neither the Owner or the Architect shall assign, sublet, or transfer his interest in this Agreement without the written consent of the other.

CLAIMS BY PARTIES
All claims, disputes, and other matters in question arising out of or relating to, this Agreement or the breach thereof, shall be decided by arbitration in accordance with the Construction Industry Arbitration rules of the American Arbitration Association then obtaining. This Agreement so to arbitrate shall be specifically enforceable under the prevailing arbitration law.

Notice of the demand for arbitration shall be filed in writing with the other party to the contract and with the American Arbitration Association. The demand shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration be made after institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations.

Should arbitration occur between the two parties relating to the provisions of this Agreement, or any act arising out of the performance of this Agreement, all expenses, collection expenses, witness fees, court costs and attorney's fees shall be paid by the non-prevailing party to the prevailing party.

The Owner agrees that the Architect cannot be joined with any other person that is not a party to this Agreement either by joiner or consolidation except by the Architect's written consent.

APPLICABLE LAW
Unless otherwise specified, this Agreement shall be governed by the law of the principal place of business of the Architect.

WARRANTY OF AUTHORITY TO SIGN
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The person signing this Agreement warrants he has authority to sign as, and on behalf of, the Owner for whom or for whose benefit Thirtieth Street Architect's services are rendered. If such person does not have such authority, he agrees that he is personally liable for all breaches of this Agreement, and that in any action against him for breach of such warranty a reasonable attorney's fee shall be included in any judgment rendered.

The undersigned hereby acknowledges that he or she has reviewed and accepts all provisions of this Agreement including the payment schedule.

The confirmation is valid for a period of thirty (30) days from the date shown above. If not accepted within thirty (30) days, it is void.

This Agreement executed on the day and year first written above.

OWNER THIRTIETH STREET ARCHITECTS, INC.

Authorized Agent James C. Wilson Lic. #C8994
President
John C. Loomis Lic. #C8684
Secretary/C.F.O.
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Department: Financial Services
Prepared By: Cruz Torres
Staff Member Presenting: Armen Harkalyan,
Executive Director of Finance
Reviewed By: Claudia Hernandez, . .

Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 26
SUBJECT: A PUBLIC HEARING TO CONSIDER A RESOLUTION REGARDING THE FORMATION OF THE CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 65 (FALLONCREST); ADOPTION OF A RESOLUTION DEEMING IT NECESSARY TO INCUR BONDED INDEBTEDNESS; AND INTRODUCTION OF AN ORDINANCE

LEVYING SPECIAL TAXES

CITY OF ONTARIO
Agenda Report
June 4, 2024
SECTION:

PUBLIC HEARINGS
RECOMMENDATION: That the City Council consider and:

A. Adopt a Resolution of Formation of Community Facilities District No. 65 (Falloncrest), proposing that the community facilities district be authorized to levy a special tax and proposing that an appropriations limit of the community facilities district be established; B. Adopt a Resolution deeming it necessary for the district to incur bonded indebtedness within Community Facilities District No. 65 (Falloncrest);
C. Adopt a Resolution calling a special election for City of Ontario Community Facilities District No. 65 (Falloncrest);
D. Adopt a Resolution declaring the results of the special election and directing the recording of a Notice of Special Tax Lien;
E. Introduce and waive further reading of an ordinance levying special taxes within City of Ontario Community Facilities District No. 65 (Falloncrest); and F. Adopt a Resolution authorizing the execution and delivery of an acquisition and funding agreement with Lennar Homes of California, LLC, a California limited liability company.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Focus Resources in Ontario's Commercial and Residential Neighborhoods Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
Ensure the Development of a Well Planned, Balanced, and Self-Sustaining Community in Ontario Ranch
FISCAL IMPACT: The use of Mello-Roos financing in the Falloncrest residential development is 1881
projected to generate approximately $430,266 per year, at buildout, to fund administrative fees and municipal services; and approximately $14.6 million in bond proceeds to be used to fund a portion of the public infrastructure improvements needed to serve the project. Mello-Roos bonds are not a direct obligation of the City and are paid from special taxes levied on each taxable parcel in the district; therefore, there is no fiscal impact to the General Fund from the issuance of MelloRoos bonds. City Council approval will be required in future years to process annual special tax levies.

BACKGROUND & ANALYSIS: The Mello-Roos Community Facilities Act of 1982 provides local government, with the consent from a majority of the property owners, the authority to establish community facilities districts for the purpose of levying special taxes to finance various kinds of public infrastructure facilities and municipal services. Under the Mello-Roos Act the initial steps in the formation of a community facilities district to finance public improvements and municipal services are to adopt resolutions declaring the intention to establish a community facilities district, authorize the levy of special taxes, and issue bonds. Accordingly, on April 16, 2024, the City Council approved Resolution No. 2024-017, a Resolution of Intention to establish City of Ontario Community Facilities District No. 65 (Falloncrest) and authorize the levy of special taxes; and Resolution No. 2024-018 declaring the City Council's intention to issue bonds for the district. The Resolution of Intention set the public hearing date for the regularly scheduled City Council meeting on May 21, 2024, to consider formation matters. City Council opened the hearing on May 21, 2024, and continued the hearing to Tuesday, June 4, 2024.

In the First Amended and Restated Agreement for the Financing and Construction of Limited Infrastructure Improvements to Serve an Easterly Portion of the New Model Colony ("First Amended and Restated Construction Agreement") between the City of Ontario and NMC Builders, LLC, the City agreed to cooperate with the members of NMC Builders, LLC in the formation of community facilities districts to assist in the financing of the public improvements included in the agreement.

The Falloncrest project addresses the development is approximately 22.65 gross acres located south of Ontario Ranch Road, north of Grand Park Street, west of Broadway Avenue, and east of Archibald Avenue. At build out, the project is expected to include 362 attached units.

Included, as part of the Resolution of Formation is the proposed Rate and Method of Apportionment of Special Tax for the District. Under the proposed Rate and Method of Apportionment, the portion of the maximum annual special tax rates which will be used to fund debt service payments on the bonds is fixed and will not increase over time. As proposed, the amount of bonds authorized for the district ($60 million) is set intentionally higher than the current estimated bond amount (approximately $14.6 million) in order to allow future City Council the option, without increasing the amount of the annual special taxes, to issue additional bonds to replace and/or construct new public infrastructure improvements in the future, or to fund municipal services. The term and structure of the Rate and Method of Apportionment of Special Tax for the Falloncrest project is consistent with those of previously adopted Rates and Methods of Apportionment for Ontario Ranch community facilities districts. This ensures that the special tax rates levied on all residential property owners in community facilities districts in Ontario Ranch are developed in a consistent and equivalent manner. In addition, under the provisions of the MelloRoos Act, to ensure that home buyers are making an informed decision, all residential builders in the Ontario Ranch districts are required to disclose the maximum annual special tax amount to 1882
each homeowner before entering into a sales contract.

Attached are five Resolutions and an Ordinance. The first attached Resolution establishes the community facilities district, with the rate and method of apportionment of special taxes, and authorizes the levy of special taxes within the district. The second attached Resolution deeming it necessary to incur bonded indebtedness for the district. The third attached Resolution calls for a special landowner election to be held on June 4, 2024. The fourth attached Resolution declares the results of the election, including a statement from the City Clerk as to the canvass of ballots, and directs the recording of the Notice of Special Tax Lien. The attached Ordinance authorizes the levying of special taxes, and the final attached, fifth Resolution authorizes the execution and delivery of an acquisition and funding agreement with Lennar Homes of California, LLC. 1883
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RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, OF FORMATION OF CITY OF ONTARIO COMMUNITY
FACILITIES DISTRICT NO. 65 (FALLONCREST), PROPOSING THAT THE

COMMUNITY FACILITIES DISTRICT BE AUTHORIZED TO LEVY A

SPECIAL TAX AND PROPOSING THAT AN APPROPRIATIONS LIMIT OF

THE COMMUNITY FACILITIES DISTRICT BE ESTABLISHED
WHEREAS, on April 16, 2024, the City Council (the “City Council”) of the City of Ontario (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, of Intention to Establish a Community Facilities District Proposed to be Named City of Ontario Community Facilities District No. 65 (Falloncrest) and to Authorize the Levy of a Special Tax Therein” (the “Resolution of Intention”), stating its intention to establish City of Ontario Community Facilities District No. 65 (Falloncrest) (the “Community Facilities District”), to authorize the Community Facilities District to levy a special tax within the Community Facilities District for the purpose of financing certain public facilities and services and setting May 21, 2024 as the date for a public hearing to be held on the establishment of the Community Facilities District; and WHEREAS, pursuant to the Resolution of Intention, notice of said public hearing was published in the Inland Valley Daily Bulletin, a newspaper of general circulation published in the area of the Community Facilities District, in accordance with the Act; and WHEREAS, on May 21, 2024, the City Council opened said public hearing and continued said public hearing to this date; and
WHEREAS, on this date, the City Council opened, conducted and closed said public hearing; and
WHEREAS, pursuant to the Resolution of Intention, each officer of the City who is or will be responsible for providing one or more of the proposed types of public facilities or services to be financed by the Community Facilities District was directed to study, or cause to be studied, the proposed Community Facilities District and, at or before said public hearing, file a report with the City Council containing a brief description of the public facilities and services by type that will in his or her opinion be required to adequately meet the needs of the Community Facilities District, and his or her estimate of the cost of providing such public facilities and services; such officers were also directed to estimate the fair and reasonable cost of the public facilities proposed to be purchased as completed public facilities and of the incidental expenses proposed to be paid; and WHEREAS, said report was so filed with the City Council and made a part of the record of said public hearing; and
WHEREAS, at the hearing, the testimony of all persons for or against the establishment of the Community Facilities District, the extent of the Community Facilities 1884
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District and the furnishing of the specified types of public facilities and services was heard; and
WHEREAS, written protests against the establishment of the Community Facilities District, the furnishing of any specified type or types of facilities and services within the Community Facilities District or the levying of a specified special tax were not made or filed at or before said hearing by 50% or more of the registered voters, or six registered voters, whichever is more, residing within the territory proposed to be included in the Community Facilities District, or the owners of one-half or more of the area of land in the territory proposed to be included in the Community Facilities District and not exempt from the special tax; and
WHEREAS, there has been filed with the City Clerk of the City a letter from the Registrar of Voters of the County of San Bernardino indicating that no persons were registered to vote within the territory of the proposed Community Facilities District as of May 2, 2024, which demonstrates that 12 or more persons have not been registered to vote within the territory of the proposed Community Facilities District for each of the 90 days preceding the close of said public hearing; and
WHEREAS, Section 53314.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, including, but not limited to, paying any cost incurred by the local agency in creating a community facilities district; and
WHEREAS, Section 53314.9 of the Act further provides that the legislative body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced, as determined by the legislative body, with or without interest, under all the following conditions: (a) the proposal to repay the funds is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53321 of the Act and in the resolution of formation to establish a community facilities district pursuant to Section 53325.1 of the Act, (b) any proposed special tax is approved by the qualified electors of the community facilities district pursuant to the Act, and (c) any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special tax, the local agency shall return any funds which have not been committed for any authorized purpose by the time of the election to the person or entity advancing the funds; and WHEREAS, the City and Lennar Homes of California, LLC (“Lennar”), have entered into the Deposit and Reimbursement Agreement, dated as of April 1, 2022 (the “Deposit Agreement”), that provides for the advancement of funds by Lennar to be used to pay costs incurred in creating the Community Facilities District and the incurrence of bonded indebtedness thereby, and provides for the repayment to Lennar of such funds advanced, without interest, from the proceeds of any such bonded indebtedness incurred by the Community Facilities District; and
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WHEREAS, the City desires to include in this Resolution, in accordance with Section 53314.9 of the Act, the proposal to repay funds pursuant to the Deposit Agreement;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:

Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

Section 2. The Community Facilities District is hereby established.

Section 3. The name for the Community Facilities District is “City of Ontario Community Facilities District No. 65 (Falloncrest).”
Section 4. The public facilities (the “Facilities”) proposed to be financed by the Community Facilities District pursuant to the Act are described under the caption “Facilities” on Exhibit A hereto, which is by this reference incorporated herein. Those Facilities proposed to be purchased as completed public facilities are identified under the caption “Facilities to be Purchased” on Exhibit A hereto. The services (the “Services”) proposed to be financed by the Community Facilities District pursuant to the Act are described under the caption “Services” on Exhibit A hereto. The incidental expenses proposed to be incurred are identified under the caption “Incidental Expenses” on Exhibit A hereto. All or any portion of the Facilities may be financed through a financing plan, including, but not limited to, a lease, lease-purchase or installment-purchase arrangement.

Section 5. The proposed special tax to be levied within the Community Facilities District has not been precluded by majority protest pursuant to Section 53324 of the Act.

Section 6. The City Council proposes that, except where funds are otherwise available, the Community Facilities District be authorized to annually levy within the Community Facilities District a special tax (the “Special Tax”) sufficient to pay for all Facilities and Services, secured by recordation of a continuing lien against all nonexempt real property in the Community Facilities District. The rate, method of apportionment and manner of collection of the Special Tax in sufficient detail to allow each landowner or resident within the proposed Community Facilities District to estimate the maximum amount that he or she will have to pay, is specified in the Rate and Method of Apportionment of Special Tax (the “Rate and Method”) attached hereto as Exhibit B, which is by this reference incorporated herein. The conditions under which the obligation to pay the Special Tax to be levied to pay for Facilities may be prepaid and permanently satisfied are specified in the Rate and Method. The Special Tax will be collected in the same manner as ordinary ad valorem property taxes or in such other manner as the City Council shall determine, including direct billing of the affected property owners.

Section 7. The Special Tax may only finance the Services to the extent that they are in addition to those provided in the territory of the Community Facilities District before the date the Community Facilities District is created. The Services may not supplant services already available within that territory when the Community Facilities District is 1886
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created. Bonds of the Community Facilities District may not be issued to fund any of the Services.

Section 8. The tax year after which no further Special Tax to pay for Facilities shall be levied against any parcel used for private residential purposes is specified in the Rate and Method. Under no circumstances shall the Special Tax to pay for Facilities in any fiscal year against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the Community Facilities District by more than 10% above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. For purposes of this paragraph, a parcel shall be considered “used for private residential purposes” not later than the date on which an occupancy permit for private residential use is issued. The Special Tax to pay for Services will be levied in perpetuity, as provided in the Rate and Method.

Section 9. Pursuant to Section 53344.1 of the Act, the City Council hereby reserves to itself the right and authority to allow any interested owner of property within the Community Facilities District, subject to the provisions of said Section 53344.1 and to those conditions as it may impose, and any applicable prepayment penalties as prescribed in the bond indenture or comparable instrument or document, to tender to the Community Facilities District treasurer in full payment or part payment of any installment of the Special Tax or the interest or penalties thereon that may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, the bond or other obligation to be taken at par and credit to be given for the accrued interest shown thereby computed to the date of tender.

Section 10. The name, address and telephone number of the office, department or bureau that will be responsible for preparing annually a current roll of Special Tax levy obligations by assessor’s parcel number and that will be responsible for estimating further Special Tax levies pursuant to Section 53340.2 of the Act are as follows: Management Analyst, Financial Services, City of Ontario, 303 East B Street, Ontario, California 91764, (909) 395-2341.

Section 11. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the California Streets and Highways Code, a continuing lien to secure each levy of the Special Tax shall attach to all nonexempt real property in the Community Facilities District and this lien shall continue in force and effect until the Special Tax obligation is prepaid, permanently satisfied and canceled in accordance with law or until the Special Tax ceases to be levied and a notice of cessation of the Special Tax is recorded in accordance with Section 53330.5 of the Act.

Section 12. The boundary map of the Community Facilities District has been recorded in San Bernardino County in Book 91 at Page 58 of Maps of Assessments and Community Facilities Districts in the San Bernardino County Recorder’s Office (Document No. 2024-0090697).
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Section 13. The City Council proposes that the annual appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, of the Community Facilities District be established at $60,000,000.

Section 14. Pursuant to the provisions of the Act, the propositions to authorize the Community Facilities District to levy the Special Tax and to establish the appropriations limit of the Community Facilities District specified above shall be subject to the approval of the qualified electors of the Community Facilities District at a special election. The City Council hereby finds and determines that no persons were registered to vote within the territory of the proposed Community Facilities District as of May 2, 2024, and that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearing held by the City Council on the establishment of the Community Facilities District.

Accordingly, pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the Special Tax. The voting procedure shall be by mailed or handdelivered ballot.

Section 15. Lennar has heretofore advanced certain funds, and may advance additional funds, that have been or may be used to pay costs incurred in creating the Community Facilities District and the incurrence of bonded indebtedness thereby. The City Council has previously approved the acceptance of such funds for the purpose of paying costs incurred in creating the Community Facilities District and the incurrence of bonded indebtedness thereby. The City Council proposes to repay Lennar all or a portion of such funds so advanced, without interest, solely from the proceeds of any such bonded indebtedness incurred by the Community Facilities District, pursuant to the Deposit Agreement. The Deposit Agreement is hereby incorporated herein as though set forth in full herein.

Section 16. The City Council hereby finds and determines that all proceedings, up to and including the adoption of this Resolution, were valid and in conformity with the requirements of the Act. In accordance with Section 53325.1 of the Act, such finding shall be final and conclusive.

Section 17. All actions heretofore taken by the officers, employees and agents of the City with respect to the establishment of the Community Facilities District, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

Section 18. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things that they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

Section 19. This Resolution shall take effect immediately upon its adoption. 1888
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The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 4th day of June, 2024. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
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STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Resolution No. 2024- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held June 4, 2024 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. 2024- duly passed and adopted by the Ontario City Council at their regular meeting held June 4, 2024. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
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EXHIBIT A

FACILITIES, SERVICES AND INCIDENTAL EXPENSES
Facilities
The types of public facilities to be financed by the Community Facilities District are street and bridge improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, domestic and recycled water distribution facilities, sewer collection facilities, solid waste facilities, storm drainage facilities, park and recreation facilities and equipment, aquatic facilities and equipment, fire facilities and equipment, police facilities and equipment, library facilities and equipment, fiber optic telecommunication, wireless communication and public safety camera facilities and equipment, general governmental office, administrative and meeting facilities, and land, rights-of-way and easements necessary for any of such facilities.

Facilities to be Purchased
The types of public facilities to be purchased as completed facilities are street and bridge improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, domestic and recycled water distribution facilities, sewer collection facilities, solid waste facilities, storm drainage facilities, and land, rights-of-way and easements necessary for any of such facilities.

Services
The types of City services to be financed by the Community Facilities District are police protection services, fire protection and suppression services, ambulance and paramedic services, maintenance and lighting of parks, parkways, streets, roads and open space, flood and storm protection services, maintenance and operation of fiber optic telecommunication, wireless communication and public safety camera systems and maintenance and operation of any real property or other tangible property with an estimated useful life of five or more years that is owned by the City.

Incidental Expenses
The incidental expenses proposed to be incurred include the following:
(a) the cost of planning and designing public facilities to be financed, including the cost of environmental evaluations of those facilities; (b) the costs associated with the creation of the Community Facilities District, issuance of bonds, determination of the amount of taxes, collection of taxes, payment of taxes, or costs otherwise incurred in order to carry out the authorized purposes of the Community Facilities District; and (c) any other expenses incidental to the construction, completion, and inspection of the authorized work.
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EXHIBIT B

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
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City of Ontario CFD No. 65 1 March 13, 2024

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
Special Taxes shall be levied on all Assessor’s Parcels in the City of Ontario Community Facilities District No. 65 (Falloncrest) (“CFD No. 65”) and collected each Fiscal Year, commencing in Fiscal Year 2024-25, in an amount determined by the City Council of the City of Ontario through the application of the Rate and Method of Apportionment, as described below.

All of the real property in CFD No. 65, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Subdivision Map, parcel map, condominium plan, or other recorded County map.
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the California Government Code. “Administrative Expenses” means the following actual or reasonably estimated costs directly related to the administration of CFD No. 65: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or CFD No. 65 or both); the costs of collecting the Special Taxes (whether by the County or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City or CFD No. 65 of complying with arbitrage rebate requirements; the costs to the City or CFD No. 65 of complying with City, CFD No. 65, or obligated persons disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City or CFD No. 65 related to the analysis and reduction, if any, of the Special Tax A on Single Family Property in accordance with Section C.1 herein; the costs of the City or CFD No. 65 related to an appeal of the Special Tax; the costs associated with the release of funds from any escrow account; the City’s administration fees and third party expenses; the costs of City staff time and reasonable overhead relating to CFD No. 65; and amounts estimated or advanced by the City or CFD No. 65 for any other 1893
City of Ontario CFD No. 65 2 March 13, 2024
administrative purposes of the CFD, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. “Assessor’s Parcel” means a lot or parcel shown in an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.
“Assessor’s Parcel Map” means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.
“Assessor’s Parcel Number” means, with respect to an Assessor’s Parcel, that number assigned to such Assessor’s Parcel by the County for purposes of identification. “Assigned Special Tax A” means the Special Tax A for each Land Use Class of Developed Property, as determined in accordance with Section C.1.a.2 below. “Backup Special Tax A” means the Special Tax A for each Land Use Class of Developed Property, as determined in accordance with Section C.1.a.3 below. “Bonds” means any bonds or other debt (as defined in Section 53317(d) of the Act) issued by CFD No. 65 under the Act and payable from Special Tax A. “Buildable Lot” means an individual lot, within a Final Subdivision Map or an area expected by CFD No. 65 to become Final Mapped Property, such as the area within a Tentative Tract Map, for which a building permit may be issued without further subdivision of such lot.
“CFD Administrator” means an official of the City responsible for determining the Special Tax A Requirement and Special Tax B Requirement, providing for the levy and collection of the Special Taxes, and performing the other duties provided for herein. “CFD No. 65” means City of Ontario Community Facilities District No. 65 (Falloncrest). “City” means the City of Ontario, California.
“City Council” means the City Council of the City, acting as the legislative body of CFD No. 65.
“Contractual Impositions” means (a) a voluntary contractual assessment established and levied on an Assessor’s Parcel pursuant to Chapter 29 of Part 3 of Division 7 of the California Streets and Highways Code (commencing with Section 5898.10 et seq.), as amended from time to time, (b) a special tax established and levied on an Assessor’s Parcel pursuant to Section 53328.1 of the California Government Code and related provisions of the Act, as amended from time to time, and (c) any other fee, charge, tax, or assessment established and levied on an individual Assessor’s Parcel pursuant to a contractual agreement or other voluntary consent by the owner thereof (e.g., property owner association assessments).
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“County” means the County of San Bernardino.
“Designated Buildable Lot” means a Buildable Lot for which a building permit has not been issued by the City as of the date of calculation of the Backup Special Tax A. “Developed Property” means for each Fiscal Year, all Taxable Property, exclusive of Final Mapped Property, Taxable Property Owner Association Property, and Taxable Public Property, for which a building permit or other applicable permit for new construction was issued after January 1, 2023, and before May 1 of the prior Fiscal Year. “Expected Residential Lot Count” means 362 Buildable Lots of Single Family Property or, as determined by the CFD Administrator, the number of Buildable Lots of Single Family Property based on the most recent Tentative Tract Map(s) or most recently recorded Final Subdivision Map(s) or modified Final Subdivision Map(s). “Facilities” means the public facilities authorized to be financed, in whole or in part, by CFD No. 65.
“Final Mapped Property” means, for each Fiscal Year, all Taxable Property, exclusive of Developed Property, Taxable Property Owner Association Property, and Taxable Public Property, which as of January 1 of the previous Fiscal Year was located within a Final Subdivision Map. The term Final Mapped Property shall include any parcel map or Final Subdivision Map, or portion thereof, that creates individual lots for which a building permit may be issued, including Parcels that are designated as a remainder Parcel (i.e., one where the size, location, etc., precludes any further subdivision or taxable use).
“Final Subdivision Map” means a final tract map, parcel map, or lot line adjustment approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or a condominium plan recorded pursuant to California Civil Code Section 4285 that, in either case, creates individual lots for which building permits may be issued without further subdivision.
“Fiscal Year” means the period starting July 1 and ending on the following June 30. “Gated Community Attached Dwelling Unit” means, with respect to Special Tax B, a Unit within any residential building containing two or more dwelling units (including attached condominiums, townhouses, duplexes, triplexes, and apartments) within a gated community that, within such community, is primarily served by private interior streets. “Indenture” means the indenture, fiscal agent agreement, resolution, or other instrument pursuant to which Bonds are issued, as modified, amended, and/or supplemented from time to time.
“Land Use Class” means any of the classes listed in Tables 1 and 2 below. “Lower Income Household Welfare Exemption Property” means, for each Fiscal Year, an Assessor’s Parcel within the boundaries of CFD No. 65 that is subject to a 1895
City of Ontario CFD No. 65 4 March 13, 2024
welfare exemption under subdivision (g) of Section 214 of the California Revenue and Taxation Code (or any successor statute), as indicated in the most recent County assessor’s roll finalized prior to such Fiscal Year.
“Maximum Special Tax A” means, with respect to an Assessor’s Parcel of Taxable Property, the Maximum Special Tax A determined in accordance with Section C.1 below that can be levied in any Fiscal Year on such Assessor’s Parcel of Taxable Property. “Maximum Special Tax B” means, with respect to an Assessor’s Parcel of Taxable Property, the Maximum Special Tax B determined in accordance with Section C.2 below that can be levied in any Fiscal Year on such Assessor’s Parcel of Taxable Property. “Minimum Sale Price” means the minimum price at which Units of a given Land Use Class have sold or are expected to be sold in a normal marketing environment and shall not include prices for such Units that are sold at a discount to expected sales prices for the purpose of stimulating the initial sales activity with respect to such Land Use Class. “Multiple Family Dwelling Unit” means, with respect to Special Tax B, a Unit within any residential building containing two or more dwelling units, including attached condominiums, townhomes, duplexes, triplexes, and apartments, but excluding Gated Community Attached Dwelling Units.
“Non-Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit was issued by the City permitting the construction of one or more non-residential structures or facilities.
“Other Residential Property” means, with respect to Special Tax A, all Assessor’s Parcels of Developed Property for which a building permit was issued by the City for purposes of constructing Units, excluding Single Family Attached Property and Single Family Detached Property.
“Outstanding Bonds” means all Bonds which are outstanding under and in accordance with the provisions of the Indenture.
“Price Point Consultant” means any consultant or firm of such consultants selected by CFD No. 65 that (a) has substantial experience in performing price point studies for residential units within community facilities districts established under the Act or otherwise estimating or confirming pricing for residential units in such community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relates to the pricing of residential units in such community facilities districts, (c) is in fact independent and not under the control of CFD No. 65 or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) CFD No. 65, (ii) the City, (iii) any owner of real property in CFD No. 65, or (iv) any real property in CFD No. 65, and (e) is not connected with CFD No. 65 or the City as an officer or employee thereof, but who may be regularly retained to make reports to CFD No. 65 or the City. “Price Point Study” means a price point study or a letter or report updating a previous price point study prepared by the Price Point Consultant pursuant to Section C herein. 1896
City of Ontario CFD No. 65 5 March 13, 2024
“Property Owner Association Property” means, for each Fiscal Year, any property within the boundaries of CFD No. 65 that was owned by a property owner association, including any master or sub-association, as of January 1 of the prior Fiscal Year. “Proportionately” means (a) for Developed Property in the first step of Section D.1 below, that the ratio of the actual Special Tax A levy to the Maximum Special Tax A is equal for all Assessor’s Parcels of Developed Property; however, for Developed Property in the fourth step of Section D.1 below, Proportionately means that the amount of the increase above the Assigned Special Tax A, if necessary, is equal for all Assessor’s Parcels of Developed Property, except that if the Backup Special Tax A limits the increase on any Assessor’s Parcel(s), then the amount of the increase shall be equal for the remaining Assessor’s Parcels; (b) with respect to Special Tax B, that the ratio of the actual Special Tax B levy to the Maximum Special Tax B is equal for all Assessor’s Parcels of Developed Property; (c) for Final Mapped Property, that the ratio of the actual Special Tax A levy to the Maximum Special Tax A is equal for all Assessor’s Parcels of Final Mapped Property; (d) for Undeveloped Property, that the ratio of the actual Special Tax A levy to the Maximum Special Tax A is equal for all Assessor's Parcels of Undeveloped Property; (e) for Taxable Property Owner Association Property, that the ratio of the actual Special Tax A levy to the Maximum Special Tax A is equal for all Assessor’s Parcels of Taxable Property Owner Association Property; and (f) for Taxable Public Property, that the ratio of the actual Special Tax A levy to the Maximum Special Tax A is equal for all Assessor’s Parcels of Taxable Public Property. “Public Property” means, for each Fiscal Year, property within the boundaries of CFD No. 65 that is (a) owned by, irrevocably offered to, or dedicated to the federal government, the State, the County, the City, or any local government or other public agency or (b) encumbered by an easement for purposes of public or utility right-of-way that makes impractical its use for any purpose other than that set forth in such easement; provided that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified according to its use.
“Rate and Method of Apportionment” means this Rate and Method of Apportionment of Special Tax.
“Residential Floor Area” means all of the Square Footage of living area within the perimeter of a Unit, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be as set forth in the building permit(s) issued for such Assessor’s Parcel, or as set forth in other official records maintained by the City’s Building Department or other appropriate means selected by CFD No. 65. The actual Square Footage shall be rounded up to the next whole square foot. Once such determination has been made for an Assessor’s Parcel, it shall remain fixed in all future Fiscal Years unless an appeal pursuant to Section F below is approved that results in a change in the actual Square Footage. 1897
City of Ontario CFD No. 65 6 March 13, 2024
“Residential Property” means, for each Fiscal Year, an Assessor’s Parcel for which a building permit for new construction of one or more Units was issued after January 1, 2023, and before May 1 of the prior Fiscal Year.
“Services” means the services authorized to be financed, in whole or in part, by CFD No.

65. “Single Family Attached Property” means all Assessor’s Parcels of Developed Property for which a building permit or use permit was issued for construction of a residential structure consisting of two or more Units that share common walls, have separate Assessor’s Parcel Numbers assigned to them (except for a duplex unit, which may share an Assessor’s Parcel with another duplex unit), and may be purchased by individual homebuyers (which shall still be the case even if the Units are purchased and subsequently offered for rent by the owner of the Unit), including such residential structures within a condominium project as defined in Civil Code Section 4125. “Single Family Detached Property” means all Assessor’s Parcels of Developed Property for which a building permit was issued for construction of a Unit, on one legal lot, that does not share a common wall with another Unit. “Single Family Detached Dwelling Unit” means a Unit of Single Family Detached Property.
“Single Family Property” means all Assessor’s Parcels of Single Family Attached Property and Single Family Detached Property.
“Special Taxes” means, collectively, Special Tax A and Special Tax B. “Special Tax A” means the special tax authorized by the qualified electors of CFD No. 65 to be levied within the boundaries of CFD No. 65 to pay for Facilities and Services. “Special Tax A Requirement” means for any Fiscal Year that amount required, after taking into account available amounts held in the funds and accounts established under the Indenture, for CFD No. 65 to: (i) pay debt service on all Outstanding Bonds which is due in the calendar year that commences in such Fiscal Year; (ii) pay periodic costs on the Bonds, including, but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay a pro rata share of Administrative Expenses; (iv) provide any amounts required to establish or replenish any reserve fund for the Bonds; (v) pay directly for acquisition or construction of Facilities, or the cost of Services, to the extent that the inclusion of such amounts does not increase the Special Tax A levy on Final Mapped Property or Undeveloped Property; and (vi) provide an amount equal to Special Tax A delinquencies based on the historical delinquency rate for Special Tax A as determined by the CFD Administrator.
“Special Tax B” means the special tax authorized by the qualified electors of CFD No. 65 to be levied within the boundaries of CFD No. 65 to pay for Services. 1898
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“Special Tax B Requirement” means for any Fiscal Year that amount required, after taking into account available amounts in any funds and accounts established to pay for Services, to pay the cost of Services, a pro rata share of Administrative Expenses, and an amount equal to Special Tax B delinquencies based on the historical delinquency rate for Special Tax B as determined by the CFD Administrator.
“Square Footage” or “Sq. Ft.” means the floor area square footage reflected on the original construction building permit, or as set forth in other official records maintained by the City’s Building Department or other appropriate means selected by CFD No. 65, issued for construction of Residential Property or Non-Residential Property, plus any square footage subsequently added to a building of Non-Residential Property after issuance of a building permit for expansion or renovation of such building. “State” means the State of California.
“Taxable Property” means, for each Fiscal Year, all of the Assessor’s Parcels within the boundaries of CFD No. 65 that are not exempt from the Special Taxes pursuant to law or Section E below.
“Taxable Property Owner Association Property” means, for each Fiscal Year, all Assessor’s Parcels of Property Owner Association Property that are not exempt from the Special Taxes pursuant to Section E below.
“Taxable Public Property” means, for each Fiscal Year, all Assessor’s Parcels of Public Property that are not exempt from the Special Taxes pursuant to law or Section E below. “Tentative Tract Map” means a map: (i) showing a proposed subdivision of an Assessor’s Parcel(s) and the conditions pertaining thereto; (ii) that may or may not be based on a detailed survey; and (iii) that is not recorded by the County to create legal lots. “Total Tax Burden” means, for a Unit within a Land Use Class, for the Fiscal Year in which the Total Tax Burden is being calculated, the sum of (a) the Assigned Special Tax A for such Land Use Class for such Fiscal Year, plus (b) the Special Tax B for such Land Use Class for such Fiscal Year, plus (c) the ad valorem property taxes, special assessments, special taxes for any overlapping community facilities districts, and any other governmental fees, charges (other than fees or charges for services such as sewer and trash), taxes, and assessments (which do not include Contractual Impositions) collected by the County on ad valorem tax bills, plus (d) property owner association assessments (but excluding the refuse collection portion of such assessments), and that the CFD Administrator estimates would be levied or imposed on such Unit in such Fiscal Year if the residential dwelling unit thereon or therein had been completed and sold, and was subject to such fees, charges, taxes, and assessments in such Fiscal Year.
“Trustee” means the trustee or fiscal agent under the Indenture. 1899
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“TTM 20399” means Tentative Tract Map No. 20399, the area of which is located within CFD No. 65.
“Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Final Mapped Property, Taxable Public Property, or Taxable Property Owner Association Property.
“Unit” means an individual single-family detached or attached home, townhome, condominium, apartment, or other residential dwelling unit, including each separate living area within a half-plex, duplex, triplex, fourplex, or other residential structure.

B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, beginning with Fiscal Year 2024-25, all Taxable Property within CFD No. 65 shall be classified as Developed Property, Final Mapped Property, Taxable Public Property, Taxable Property Owner Association Property, or Undeveloped Property, and shall be subject to Special Taxes in accordance with the Rate and Method of Apportionment as determined pursuant to Sections C and D below.

Assessor’s Parcels of Developed Property shall be further classified as: Single Family Property (and further classified as Single Family Attached Property or Single Family Detached Property, as needed) or Other Residential Property (for Special Tax A); Single Family Detached Dwelling Unit, Multiple Family Dwelling Unit, or Gated Community Attached Dwelling Unit (for Special Tax B); or Non-Residential Property. For Special Tax A, Assessor’s Parcels of Single Family Property shall be assigned to Land Use Classes 1 through 8, as listed in Table 1 below based on the Residential Floor Area of the Units on such Assessor’s Parcels. Also for Special Tax A, Other Residential Property and Non-Residential Property shall be assigned to Land Use Classes 9 and 10, respectively.

C. MAXIMUM SPECIAL TAX

1. Special Tax A
At least 30 days prior to the issuance of Bonds, the Assigned Special Tax A on Developed Property (set forth in Table 1 below) shall be analyzed in accordance with and subject to the conditions set forth in this Section C. At such time, CFD No. 65 shall select and engage a Price Point Consultant and the CFD Administrator shall request the Price Point Consultant to prepare a Price Point Study setting forth the Minimum Sale Price of Units within each Land Use Class.

If based upon such Price Point Study the CFD Administrator calculates that the Total Tax Burden, excluding property owner association assessments, applicable to Units within one or more Land Use Classes of Single Family Property to be constructed within CFD No. 65 exceeds 1.95% of the Minimum Sale Price of such Units, the Assigned Special Tax A shall be reduced to the extent necessary to cause the Total Tax Burden, excluding property owner association assessments, 1900
City of Ontario CFD No. 65 9 March 13, 2024
that shall apply to Units within such Land Use Class(es) not to exceed 1.95% of the Minimum Sale Price of such Units.

Each Assigned Special Tax A reduction for a Land Use Class shall be calculated by the CFD Administrator separately, and it shall not be required that such reduction be proportionate among Land Use Classes. In connection with any reduction in the Assigned Special Tax A, the Backup Special Tax A shall also be reduced by the CFD Administrator based on the percentage reduction in Maximum Special Tax A revenues within the Tentative Tract Map area(s) where the Assigned Special Tax A reductions occurred. Upon determining the reductions, if any, in the Assigned Special Tax A and Backup Special Tax A required pursuant to this Section C, the CFD Administrator shall complete the Certificate of Modification of Special Tax substantially in the form attached hereto as Exhibit A (the “Certificate of Modification”), shall execute such completed Certificate of Modification, and shall deliver such executed Certificate of Modification to CFD No. 65. Upon receipt thereof, if in satisfactory form, CFD No. 65 shall execute such Certificate of Modification. The reduced Assigned Special Tax A and Backup Special Tax A specified in such Certificate of Modification shall become effective upon the execution of such Certificate of Modification by CFD No. 65.

The Special Tax A reductions required pursuant to this section shall be reflected in an amended notice of Special Tax lien, which CFD No. 65 shall cause to be recorded with the County Recorder as soon as practicable after execution of the Certificate of Modification by CFD No. 65. The reductions in this section apply to Single Family Property, but not to Other Residential Property or NonResidential Property. a. Developed Property
1) Maximum Special Tax A
The Maximum Special Tax A that may be levied in any Fiscal Year for each Assessor’s Parcel classified as Developed Property shall be the greater of (i) the amount derived by application of the Assigned Special Tax A or (ii) the amount derived by application of the Backup Special Tax A. The Maximum Special Tax A shall not increase in future years, other than as calculated pursuant to Section C.1.a.3 below.
2) Assigned Special Tax A
The Assigned Special Tax A that may be levied in any Fiscal Year for each Land Use Class is shown below in Table 1.
1901
City of Ontario CFD No. 65 10 March 13, 2024
TABLE 1
ASSIGNED SPECIAL TAX A – DEVELOPED PROPERTY
3) Backup Special Tax A
The Backup Special Tax A shall be $3,701 per Unit for Single Family Property in CFD No. 65. However, if the Expected Residential Lot Count of Single Family Property does not equal 362, and the City has not issued Bonds, then the Backup Special Tax A for Designated Buildable Lots of Single Family Property in CFD No. 65 shall be calculated according to the following formulas:

Backup Special Tax A = $1,339,902  Expected Residential Lot Count for Single Family Property
If any portion of a Final Subdivision Map, or any area expected by CFD No. 65 to become Final Mapped Property – such as the area within TTM 20399, or any other Tentative Tract Map – changes any time after the City has issued Bonds, causing an adjustment to the number of Designated Buildable Lots, then the Backup Special Tax A for all Designated Buildable Lots of Single Family Property subject to the change shall be calculated according to the following steps:

Step 1: Determine the total Backup Special Tax A that
could have been collected from Designated
Buildable Lots of Single Family Property, prior to
Land
Use
Class
Description
Residential
Floor Area
(Square
Footage)
Assigned
Special Tax A
1 Single Family Property < 801 $2,718 per Unit
2 Single Family Property 801 – 1,000 $2,875 per Unit
3 Single Family Property 1,001 – 1,200 $3,188 per Unit
4 Single Family Property 1,201 – 1,400 $3,580 per Unit
5 Single Family Property 1,401 – 1,600 $3,822 per Unit
6 Single Family Property 1,601 – 1,800 $3,909 per Unit
7 Single Family Property 1,801 – 2,000 $4,135 per Unit
8 Single Family Property > 2,000 $4,226 per Unit
9 Other Residential Property $95,803 per Acre
10 Non-Residential Property $95,803 per Acre
1902
City of Ontario CFD No. 65 11 March 13, 2024
the Final Subdivision Map or expected Final
Mapped Property change.

Step 2: Divide the amount determined in Step 1 by the
number of Designated Buildable Lots of Single
Family Property that exists after the Final
Subdivision Map or expected Final Mapped
Property change.

Step 3: Apply the amount determined in Step 2 as the
Backup Special Tax A per Unit for Single Family
Property.

The Backup Special Tax A for an Assessor’s Parcel shall not change once an Assessor’s Parcel is classified as Developed Property.
b. Final Mapped Property, Taxable Public Property, Taxable Property Owner Association Property, and Undeveloped Property
The Maximum Special Tax A for Final Mapped Property, Taxable Public Property, Taxable Property Owner Association Property, and Undeveloped Property shall be $95,803 per Acre, and shall not be subject to increase or reduction and, therefore, shall remain the same in every Fiscal Year.

2. Special Tax B
The Maximum Special Tax B for each Assessor’s Parcel classified as Developed Property shall be determined by reference to Table 2 below.

TABLE 2
MAXIMUM SPECIAL TAX B – DEVELOPED PROPERTY
Land Use Class Maximum Special Tax B
Fiscal Year 2024-25
Residential Property
Single Family Detached Dwelling Unit $1,501.46 per Unit Multiple Family Dwelling Unit $1,301.51 per Unit
Gated Community Attached Dwelling Unit $1,091.38 per Unit Non-Residential Property $0.273800 per Sq. Ft.
1903
City of Ontario CFD No. 65 12 March 13, 2024
On January 1 of each Fiscal Year, commencing January 1, 2025, the Maximum Special Tax B to be applied in the next Fiscal Year shall be subject to an automatic increase at a rate equal to 4.0% of the amount in effect for the prior Fiscal Year.

3. Multiple Land Use Classes on an Assessor’s Parcel
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax A levied on such Assessor’s Parcel shall be the sum of the Maximum Special Tax A for all Units of Single Family Property and Acres of Other Residential Property and NonResidential Property (based on the pro rata share of Square Footage between Other Residential Property and Non-Residential Property, according to the applicable building permits, Final Subdivision Map, parcel map, condominium plan, or other recorded County map) located on that Assessor’s Parcel. The Maximum Special Tax B levied on such Assessor’s Parcel shall be the sum of the Maximum Special Tax B for all Units of Residential Property and all Square Footage of Non-Residential Property (based on the applicable building permits, Final Subdivision Map, parcel map, condominium plan, or other recorded County map) located on that Assessor’s Parcel.

4. Developed Property Special Tax Obligation
Once an Assessor’s Parcel has been taxed in any Fiscal Year as Developed Property, the Assessor’s Parcel shall continue to be taxed as Developed Property regardless of changes to or expiration of the original building permit, and regardless of revisions to or destruction of the structure that was, or was expected to be, constructed pursuant to the original building permit.

D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX

1. Special Tax A
Each Fiscal Year, beginning with Fiscal Year 2024-25, the CFD Administrator shall determine the Special Tax A Requirement for such Fiscal Year. The Special Tax A shall then be levied as follows:

First: If needed to satisfy the Special Tax A Requirement, Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Developed Property up to 100% of the applicable Assigned Special Tax A;
Second: If additional monies are needed to satisfy the Special Tax A Requirement after the first step has been completed, then Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Final Mapped Property up to 100% of the Maximum Special Tax A for Final Mapped Property;
1904
City of Ontario CFD No. 65 13 March 13, 2024
Third: If additional monies are needed to satisfy the Special Tax A Requirement after the first two steps have been completed, then Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax A for Undeveloped Property;
Fourth: If additional monies are needed to satisfy the Special Tax A Requirement after the first three steps have been completed, then the levy of Special Tax A on each Assessor’s Parcel of Developed Property whose Maximum Special Tax A is determined through the application of the Backup Special Tax A shall be increased Proportionately from the Assigned Special Tax A up to the Maximum Special Tax A for each such Assessor’s Parcel;
Fifth: If additional monies are needed to satisfy the Special Tax A Requirement after the first four steps have been completed, then Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Taxable Property Owner Association Property up to the Maximum Special Tax A for Taxable Property Owner Association Property; Sixth: If additional monies are needed to satisfy the Special Tax A Requirement after the first five steps have been completed, then Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Taxable Public Property up to the Maximum Special Tax A for Taxable Public Property.

Notwithstanding the above, under no circumstances shall Special Tax A levied in any Fiscal Year on any Assessor’s Parcel of Single Family Property or Other Residential Property for which an occupancy permit for private residential use has been issued be increased as a result of delinquency or default by the owner or owners of any other Assessor’s Parcel or Assessor’s Parcels within CFD No. 65 by more than ten percent above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults.

2. Special Tax B
Each Fiscal Year, beginning with Fiscal Year 2024-25, the CFD Administrator shall determine the Special Tax B Requirement. The Special Tax B shall then be levied Proportionately on each Assessor’s Parcel of Developed Property up to 100% of the applicable Maximum Special Tax B for such Assessor’s Parcel, until the Special Tax B Requirement is satisfied. However, the Special Tax B levied in any Fiscal Year shall not increase by more than 4.0% of the amount of the Special Tax B levied in the prior Fiscal Year.

E. EXEMPTIONS
No Special Tax shall be levied on up to 7.11 Acres of Property Owner Association Property. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property.

Property Owner Association Property or Public Property that is not exempt from the Special Tax A under this section shall be subject to the levy of Special Tax A and shall be 1905
City of Ontario CFD No. 65 14 March 13, 2024
taxed Proportionately as part of the fifth or sixth step, respectively, in Section D above, up to 100% of the applicable Maximum Special Tax A for Taxable Property Owner Association Property and Taxable Public Property. No Special Tax A shall be levied in any Fiscal Year on Assessor’s Parcels that have fully prepaid the Special Tax A obligation pursuant to the formula set forth in Section H.

No Special Tax shall be levied on Lower Income Household Welfare Exemption Property; provided, however, that if, in any Fiscal Year, applicable law does not require that Lower Income Household Welfare Exemption Property be exempt from some portion, or all, of the Special Tax, such portion, or all, of the Special Tax shall be levied on such property in accordance with this Rate and Method of Apportionment based on the Land Use Class to which the Assessor’s Parcel is assigned.

F. APPEALS
Any property owner may file a written appeal of the Special Tax with CFD No. 65 claiming that the amount or application of the Special Tax is not correct. The appeal must be filed not later than one calendar year after having paid the Special Tax that is disputed, and the appellant must be current in all payments of Special Taxes. In addition, during the term of the appeal process, all Special Taxes levied must be paid on or before the payment date established when the levy was made.

The appeal must specify the reasons why the appellant claims the Special Tax is in error.

The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination.

If the property owner disagrees with the CFD Administrator’s decision relative to the appeal, the owner may then file a written appeal with the City Council whose subsequent decision shall be final and binding on all interested parties. If the decision of the CFD Administrator or subsequent decision by the City Council requires the Special Tax to be modified or changed in favor of the property owner, then the CFD Administrator shall determine if sufficient Special Tax revenue is available to make a cash refund. If a cash refund cannot be made, then an adjustment shall be made to credit future Special Tax levy(ies).

This procedure shall be exclusive and its exhaustion by any property owner shall be a condition precedent to filing any legal action by such owner.

G. MANNER OF COLLECTION
The Special Taxes shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the Special Taxes may be collected in such other manner as the City Council shall determine, including direct billing of affected property owners.
1906
City of Ontario CFD No. 65 15 March 13, 2024
H. PREPAYMENT OF SPECIAL TAX A
The following definitions apply to this Section H:
“CFD Public Facilities” means $16,259,000 for each Prepayment Period, or such lower number as determined by the City Council to be sufficient to fund the Facilities and Services to be provided by CFD No. 65.
“Expenditures Fund” means funds or accounts, regardless of their names, that are established to hold moneys that are available to acquire or construct Facilities and to fund Services.
“Future Facilities Costs” means the CFD Public Facilities minus (i) Facilities and Services costs previously paid from the Expenditures Fund during the Prepayment Period in which the prepayment is being made, (ii) moneys currently on deposit in the Expenditures Fund from deposits made during the Prepayment Period in which the prepayment is being made, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance Facilities costs. In no event shall the amount of Future Facilities Costs be less than zero.
“Prepayment Period” means one of three periods of time during which a Special Tax prepayment may be made.
“Prepayment Period 1” means July 1, 2024, through June 30, 2058. “Prepayment Period 2” means July 1, 2058, through June 30, 2091. “Prepayment Period 3” means July 1, 2091, through June 30, 2125.

Only Special Tax A may be prepaid; Special Tax B shall continue to be levied on an annual basis on all Developed Property in CFD No. 65.

1. Prepayment in Full
The obligation of an Assessor's Parcel to pay the Special Tax A may be prepaid as described herein, provided that a prepayment may be made only for Assessor’s Parcels for which a building permit for new construction was issued after January 1, 2023, and only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Special Tax A obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount for such Assessor's Parcel. The CFD Administrator may charge a fee for providing this service. Prepayment in any six month period must be made not less than 45 days prior to the next occurring date that notice of redemption of Bonds from the proceeds of such prepayment may be given to the Trustee pursuant to the Indenture.
1907
City of Ontario CFD No. 65 16 March 13, 2024
The Special Tax A Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below):

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Total Prepayment Amount
As of the proposed date of prepayment, the Special Tax A Prepayment Amount (defined below) shall be calculated by the CFD Administrator as follows:

Paragraph No.

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel, and determine the Prepayment Period for the proposed prepayment.

2. Compute the Assigned Special Tax A and Backup Special Tax A for the Assessor’s Parcel to be prepaid based on the Developed Property Special Tax A which is, or could be, charged in the current Fiscal Year. For Assessor’s Parcels of Final Mapped Property (for which a building permit has been issued but which is not yet classified as Developed Property) to be prepaid, compute the Assigned Special Tax A and Backup Special Tax A for that Assessor’s Parcel as though it was already designated as Developed Property, based upon the building permit which has already been issued for that Assessor’s Parcel.

3. (a) Divide the Assigned Special Tax A computed pursuant to Paragraph 2 by the total estimated Assigned Special Tax A for CFD No. 65 based on the Developed Property Special Tax A which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 65, excluding any Assessor’s Parcels which have been prepaid, and
(b) Divide the Backup Special Tax A computed pursuant to Paragraph 2 by the estimated total Backup Special Tax A at buildout of CFD No. 65, excluding any Assessor’s Parcels which have been prepaid.

4. Multiply the larger quotient computed pursuant to Paragraph 3(a) or 3(b) by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the “Bond Redemption Amount”).

5. Multiply the Bond Redemption Amount computed pursuant to Paragraph 4 by the applicable redemption premium (e.g., the redemption price minus 100%), if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”).

6. Compute the Future Facilities Costs for the applicable Prepayment Period. 1908
City of Ontario CFD No. 65 17 March 13, 2024

7. Multiply the larger quotient computed pursuant to Paragraph 3(a) or 3(b) by the amount determined pursuant to Paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the “Future Facilities Amount”).

8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds.

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

10. Add the amounts computed pursuant to Paragraphs 8 and 9 to determine the “Defeasance Amount”.

11. Verify the administrative fees and expenses of CFD No. 65, including the costs to compute the prepayment, the costs to invest the prepayment proceeds, the costs to redeem Bonds, and the costs to record any notices to evidence the prepayment and the redemption (the “Administrative Fees and Expenses”).

12. If reserve funds for the Outstanding Bonds, if any, are at or above 100% of the reserve requirement (as defined in the Indenture) on the prepayment date, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the “Reserve Fund Credit”). No Reserve Fund Credit shall be granted if reserve funds are below 100% of the reserve requirement on the prepayment date or the redemption date.

13. The Special Tax A prepayment is equal to the sum of the amounts computed pursuant to Paragraphs 4, 5, 7, 10, and 11, less the amount computed pursuant to Paragraph 12 (the “Prepayment Amount”).

14. From the Prepayment Amount, the amounts computed pursuant to Paragraphs 4, 5, 10, and 12 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to Paragraph 7 shall be deposited into the Expenditures Fund. The amount computed pursuant to Paragraph 11 shall be retained by CFD No. 65.

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

As a result of the payment of the current Fiscal Year’s Special Tax A levy as determined under Paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year’s Special Tax A levy for such Assessor’s Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid during Prepayment Period 3, the CFD Administrator shall cause a suitable notice to be recorded in compliance with the Act to indicate that 1909
City of Ontario CFD No. 65 18 March 13, 2024
Special Tax A has been prepaid and that the obligation of such Assessor's Parcel to pay Special Tax A shall cease.

With respect to Special Tax A for any Assessor’s Parcel that is prepaid during Prepayment Period 1 or Prepayment Period 2, the obligation of such Assessor’s Parcel to pay Special Tax A shall be tolled, or suspended, through the end of such Prepayment Period, but shall resume in the first Fiscal Year of the subsequent Prepayment Period.

The CFD Administrator shall cause a suitable notice to be recorded in compliance with the Act to indicate that Special Tax A has been satisfied for the remainder of the applicable Prepayment Period but has not been permanently satisfied and the obligation to pay Special Tax A will resume in the first Fiscal Year of the Prepayment Period following the Prepayment Period in which the prepayment was made. Once the obligation of an Assessor’s Parcel to pay Special Tax A resumes, Special Tax A for the then applicable Prepayment Period may be prepaid.

Notwithstanding the foregoing, no Special Tax A prepayment shall be allowed unless the amount of Maximum Special Tax A that may be levied on Taxable Property within CFD No. 65 (after excluding 1.86 Acres of Public Property and 3.58 Acres of Property Owner Association Property) both prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds.

2. Prepayment in Part
The Special Tax A on an Assessor’s Parcel for which a building permit for new construction was issued after January 1, 2023, may be partially prepaid. The amount of the prepayment shall be calculated as in Section H.1, except that a partial prepayment shall be calculated by the CFD Administrator according to the following formula:

PP = (PF – AE) x % + AE.

The terms above have the following meaning:

PP = the partial prepayment
PF = the Prepayment Amount (full prepayment) for Special Tax A calculated according to Section H.1
AE = the Administrative Fees and Expenses determined pursuant to paragraph 11 above % = the percentage by which the owner of the Assessor’s Parcel(s) is partially prepaying Special Tax A
The Special Tax A partial prepayment amount must be sufficient to redeem at least a $5,000 increment of Bonds.

The owner of any Assessor’s Parcel who desires such prepayment shall notify the CFD Administrator of such owner’s intent to partially prepay Special Tax A and the percentage by which Special Tax A shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of Special Tax A for an Assessor’s Parcel within thirty (30) days of the request and may charge a fee for providing this service. With respect to any Assessor’s Parcel that is 1910
City of Ontario CFD No. 65 19 March 13, 2024
partially prepaid, the CFD Administrator shall (i) distribute the remitted prepayment funds according to Section H.1, and (ii) indicate in the records of CFD No. 65 that there has been a partial prepayment of Special Tax A and that a portion of Special Tax A with respect to such Assessor’s Parcel, equal to the outstanding percentage (100% - “%”, as defined above) of the Maximum Special Tax A, shall continue to be levied on such Assessor’s Parcel pursuant to Section D during the Prepayment Period in which the partial prepayment is made.

For partial prepayments made during Prepayment Period 1 or Prepayment Period 2, the full amount of Special Tax A shall resume in the first Fiscal Year of the Prepayment Period following the Prepayment Period in which the partial prepayment was made.

Once the obligation of an Assessor’s Parcel to pay Special Tax A resumes, Special Tax A for the then applicable Prepayment Period may be prepaid.

I. TERM OF SPECIAL TAX
The Fiscal Year after which no further Special Tax A shall be levied or collected is Fiscal Year 2124-2125, except that Special Tax A that was lawfully levied in or before such Fiscal Year and that remains delinquent may be collected in subsequent years. Special Tax B shall continue to be levied indefinitely on an annual basis on all Developed Property in CFD No. 65.
1911

EXHIBIT A

CERTIFICATE OF MODIFICATION OF SPECIAL TAX A
(PAGE 1 OF 2)
CITY OF ONTARIO AND CFD NO. 65 CERTIFICATE

1. Pursuant to Section C.1 of the Rate and Method of Apportionment of Special Tax (the “Rate and Method”) for City of Ontario Community Facilities District No. 65 (Falloncrest) (“CFD No. 65”), the Assigned Special Tax A and the Backup Special Tax A for Developed Property within CFD No. 65 has been modified. a. The information in Table 1 relating to Assigned Special Tax A for Developed Property within CFD No. 65, as stated in Section C.1.a.2 of the Rate and Method of Apportionment, has been modified as follows:

TABLE 1
ASSIGNED SPECIAL TAX A – DEVELOPED PROPERTY
Land
Use
Class
Description
Residential
Floor Area
(Square
Footage)
Assigned
Special Tax A
1 Single Family Property < 801 $[ ] per Unit
2 Single Family Property 801 – 1,000 $[ ] per Unit
3 Single Family Property 1,001 – 1,200 $[ ] per Unit
4 Single Family Property 1,201 – 1,400 $[ ] per Unit
5 Single Family Property 1,401 – 1,600 $[ ] per Unit
6 Single Family Property 1,601 – 1,800 $[ ] per Unit
7 Single Family Property 1,801 – 2,000 $[ ] per Unit
8 Single Family Property > 2,000 $[ ] per Unit
9 Other Residential Property $[ ] per Acre
10 Non-Residential Property $[ ] per Acre
1912

EXHIBIT A

CERTIFICATE OF MODIFICATION OF SPECIAL TAX A
(PAGE 2 OF 2)
b. The Backup Special Tax for Developed Property, as stated in Section C.1.a.3, shall be modified as follows:

The Backup Special Tax A shall be $[___] per Unit for Single Family Property. However, if the Expected Residential Lot Count of Single Family Property does not equal 362, and the City has not issued Bonds, then the Backup Special Tax A for Designated Buildable Lots of Single Family Property in CFD No. 65 shall be calculated according to the following formulas:

Backup Special Tax A = $[_____]  Expected Residential Lot Count for Single Family Property

2. The Special Tax A for Developed Property may only be modified prior to the first issuance of CFD No. 65 Bonds.

3. Upon execution of this certificate by CFD No. 65, CFD No. 65 shall cause an amended notice of Special Tax lien for CFD No. 65 to be recorded reflecting the modifications set forth herein.

Capitalized undefined terms used herein have the meanings ascribed thereto in the Rate and Method. The modifications set forth in this Certificate have been calculated by the CFD Administrator in accordance with the Rate and Method.

GOODWIN CONSULTING GROUP, INC.

CFD ADMINISTRATOR
By:_________________________________ Date:______________________

The undersigned acknowledges receipt of this Certificate and of the modification of the Assigned Special Tax A and Backup Special Tax A for Developed Property as set forth in this Certificate.

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)
By:_________________________________ Date:______________________ 1913
4164-3933-4222.4
RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ONTARIO, CALIFORNIA, DEEMING IT NECESSARY FOR

CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT
NO. 65 (FALLONCREST) TO INCUR BONDED

INDEBTEDNESS
WHEREAS, on April 16, 2024, the City Council (the “City Council”) of the City of Ontario (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, of Intention to Establish a Community Facilities District Proposed to be Named City of Ontario Community Facilities District No. 65 (Falloncrest) and to Authorize the Levy of a Special Tax Therein,” stating its intention to establish City of Ontario Community Facilities District No. 65 (Falloncrest) (the “Community Facilities District”) and to authorize the Community Facilities District to levy a special tax (the “Special Tax”) within the Community Facilities District for the purpose of financing certain public facilities (the “Facilities”) and services; and
WHEREAS, on April 16, 2024, the City Council also adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, Declaring it Necessary for City of Ontario Community Facilities District No. 65 (Falloncrest) to Incur Bonded Indebtedness” (the “Resolution Declaring Necessity”), declaring it necessary for the Community Facilities District to incur bonded indebtedness and setting May 21, 2024 as the date for a public hearing to be held on the proposed debt authorization; and WHEREAS, pursuant to the Resolution Declaring Necessity, notice of said public hearing was published in the Inland Valley Daily Bulletin, a newspaper of general circulation published in the area of the Community Facilities District, in accordance with the Act; and
WHEREAS, on May 21, 2024, the City Council opened said public hearing and continued said public hearing to this date; and
WHEREAS, on this date, the City Council opened, conducted and closed said public hearing; and
WHEREAS, at said public hearing, any person interested, including persons owning property within the area and desiring to appear and present any matters material to the questions set forth in the Resolution Declaring Necessity appeared and presented such matters; and
WHEREAS, oral or written protests against the proposed debt issue were not made or filed at or before said public hearing by 50% or more of the registered voters, or six registered voters, whichever is more, residing within the territory proposed to be included in the Community Facilities District, or the owners of one-half or more of the area 1914
4164-3933-4222.4
of land in the territory proposed to be included in the Community Facilities District and not exempt from the Special Tax; and
WHEREAS, the City Council deems it necessary for the Community Facilities District to incur bonded indebtedness; and
WHEREAS, on this date, the City Council adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, of Formation of City of Ontario Community Facilities District No. 65 (Falloncrest), Proposing that the Community Facilities District Be Authorized to Levy a Special Tax and Proposing that an Appropriations Limit of the Community Facilities District Be Established;” and WHEREAS, the City Clerk of the City (the “City Clerk”) is the election official that will conduct the special election on the proposition to authorize the Community Facilities District to incur bonded indebtedness; and
WHEREAS, there has been filed with the City Clerk a letter from the Registrar of Voters of the County of San Bernardino indicating that no persons were registered to vote within the territory of the Community Facilities District as of May 2, 2024, which demonstrates that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of said public hearing; and
WHEREAS, there has been filed with the City Clerk consents and waivers of all of the landowners of record in the Community Facilities District consenting to the waiver of, and waiving, any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said special election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), consenting to the holding of said special election on June 4, 2024, and consenting to the waiver of, and waiving, any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act; and WHEREAS, the City Clerk has concurred in said waivers and has concurred in holding said special election on June 4, 2024;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:

Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

Section 2. The City Council deems it necessary for the Community Facilities District to incur the bonded indebtedness.

Section 3. The bonded indebtedness will be incurred for the purpose of financing the costs of the Facilities, including all costs and estimated costs incidental to, or connected with, the accomplishment of said purpose, including, but not limited to, such costs and estimated costs as are described in Section 53345.3 of the Act. 1915
4164-3933-4222.4
Section 4. In accordance with the previous determination of the City Council, the whole of the Community Facilities District will pay for the bonded indebtedness.

Section 5. The maximum amount of debt to be incurred is $60,000,000.

Section 6. The maximum term the bonds to be issued shall run before maturity is 40 years.

Section 7. The maximum annual rate of interest to be paid shall not exceed the maximum interest rate permitted by applicable law at the time of sale of the bonds, payable semiannually or at such times as the City Council or its designee shall determine, the actual rate or rates and times of payment of such interest to be determined by the City Council or its designee at the time or times of sale of the bonds.

Section 8. The proposition to authorize the Community Facilities District to incur the bonded indebtedness shall be submitted to the qualified electors of the Community Facilities District.

Section 9. The City Council hereby finds and determines that no persons were registered to vote within the territory of the Community Facilities District as of May 2, 2024, and that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearing held by the City Council on the proposed debt issue for the Community Facilities District. Accordingly, pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the Special Tax.

Section 10. The City Council hereby finds and determines that the qualified electors of the Community Facilities District have (a) unanimously consented to the waiver of, and have waived, any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), (b) unanimously consented to the holding of said election on June 4, 2024, and (c) unanimously consented to the waiver of, and have waived, any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act. The City Council hereby finds and determines that the City Clerk has concurred in said waivers and has concurred in holding said election on June 4, 2024.

Section 11. The date of the special community facilities district election (which shall be consolidated with the special district election to authorize the Community Facilities District to levy the Special Tax) at which time the proposition to authorize the Community Facilities District to incur the bonded indebtedness shall be submitted to the voters is June 4, 2024.
1916
4164-3933-4222.4
Section 12. As authorized by Section 53353.5 of the Act, the propositions to authorize the Community Facilities District to incur such bonded indebtedness, to authorize the Community Facilities to levy the Special Tax and to establish an appropriations limit of the Community Facilities District shall be combined into one ballot proposition.

Section 13. Pursuant to Section 53326 of the Act, the election shall be conducted by mail or hand-delivered ballot. The voted ballots are required to be received in the office of the City Clerk no later than 7:30 p.m. on June 4, 2024; provided, however, that if all of the qualified electors have voted prior to such time, the election may be closed with the concurrence of the City Clerk.

Section 14. All actions heretofore taken by the officers, employees and agents of the City with respect to the incurrence of bonded indebtedness by the Community Facilities District, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

Section 15. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things that they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

Section 16. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 4th day of June, 2024. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
1917
4164-3933-4222.4
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
1918
4164-3933-4222.4

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
1919
4164-7288-8654.4
RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, CALLING SPECIAL ELECTION FOR CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 65 (FALLONCREST)
WHEREAS, on this date, the City Council (the “City Council”) of the City of Ontario (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, of Formation of City of Ontario Community Facilities District No. 65 (Falloncrest), Proposing that the Community Facilities District be Authorized to Levy a Special Tax and Proposing that an Appropriations Limit of the Community Facilities District Be Established” (the “Resolution of Formation”), establishing City of Ontario Community Facilities District No. 65 (Falloncrest) (the “Community Facilities District”), proposing that the Community Facilities District be authorized to levy a special tax (the “Special Tax”) within the Community Facilities District for the purpose of financing certain public facilities (the “Facilities”) and services and proposing that an appropriations limit of the Community Facilities District be established at $60,000,000; and WHEREAS, on this date, the City Council also adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, Deeming it Necessary for City of Ontario Community Facilities District No. 65 (Falloncrest) to Incur Bonded Indebtedness” (the “Resolution Deeming Necessity”), deeming it necessary for the Community Facilities District to incur bonded indebtedness in a maximum amount of $60,000,000; and
WHEREAS, pursuant to the provisions of the Act and said resolutions, the propositions to authorize the Community Facilities District to incur such bonded indebtedness, to authorize the Community Facilities District to levy the Special Tax and to establish such appropriations limit of the Community Facilities District are to be submitted to the qualified electors of the Community Facilities District at a special election; and
WHEREAS, the City Council desires to designate the City Clerk of the City (the “City Clerk”) as the election official for such special election; and WHEREAS, there has been filed with the City Clerk a letter from the Registrar of Voters of the County of San Bernardino indicating that no persons were registered to vote within the territory of the Community Facilities District as of May 2, 2024, which demonstrates that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearings on the establishment of the Community Facilities District and the proposed debt issue for the Community Facilities District; and WHEREAS, there has been filed with the City Clerk consents and waivers of all of the landowners of record in the Community Facilities District consenting to the waiver of, and waiving, any time limit specified by Section 53326 of the Act and any requirement 1920
4164-7288-8654.4
pertaining to the conduct of said special election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), consenting to the holding of said special election on June 4, 2024 and consenting to the waiver of, and waiving, any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act; and WHEREAS, the City Clerk has concurred in said waivers and has concurred in holding said special election on June 4, 2024;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:

Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

Section 2. Pursuant to Sections 53351, 53326 and 53325.7 of the Act, the propositions to authorize the Community Facilities District to incur bonded indebtedness, to authorize the Community Facilities District to levy the Special Tax and to establish the appropriations limit of the Community Facilities District shall be submitted to the qualified electors of the Community Facilities District at an election called therefor as provided below.

Section 3. The City Clerk is hereby designated as the official to conduct said election.

Section 4. As authorized by Section 53353.5 of the Act, the propositions to authorize the Community Facilities District to incur such bonded indebtedness, to authorize the Community Facilities District to levy the Special Tax and to establish such appropriations limit of the Community Facilities District shall be combined into one ballot proposition.

Section 5. The City Council hereby finds and determines that no persons were registered to vote within the territory of the Community Facilities District as of May 2, 2024, and that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearings heretofore held by the City Council on the establishment of the Community Facilities District and the proposed debt issue for the Community Facilities District.

Accordingly, pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearings, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the Special Tax.

Section 6. The City Council hereby finds and determines that the qualified electors of the Community Facilities District have (a) unanimously consented to the waiver of, and have waived, any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with 1921
4164-7288-8654.4
Section 53345 of the Act), (b) unanimously consented to the holding of said election on June 4, 2024, and (c) unanimously consented to the waiver of, and have waived, any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act. The City Council hereby finds and determines that the City Clerk has concurred in said waivers and has concurred in holding said election on June 4, 2024.

Section 7. The City Council hereby calls a special election to submit to the qualified electors of the Community Facilities District the combined ballot proposition to authorize the Community Facilities District to incur bonded indebtedness in a maximum amount of $60,000,000, to authorize the Community Facilities to levy the Special Tax and to establish the appropriations limit of the Community Facilities District at $60,000,000, which election shall be held at 303 East B Street, Ontario, California, on June 4, 2024, provided, that, in the event the June 4, 2024 City Council meeting is held via teleconference and/or videoconference only, the means by which the public may observe such public hearings and offer public comment would be as prescribed in the notice and agenda for such City Council meeting. The City Council has caused to be provided to the City Clerk, as the official to conduct the election, the Resolution of Formation, the Resolution Deeming Necessity, a certified map of sufficient scale and clarity to show the boundaries of the Community Facilities District and a sufficient description to allow the City Clerk to determine the boundaries of the Community Facilities District.

The voted ballots shall be returned to the City Clerk not later than 7:30 p.m. on June 4, 2024; provided, however, that if all of the qualified electors have voted prior to such time, the election may be closed with the concurrence of the City Clerk.

Section 8. Pursuant to Section 53326 of the Act, the election shall be conducted by mail or hand-delivered ballot pursuant to Section 4000 et. seq. of the California Elections Code. Except as otherwise provided in the Act, the provisions of law regulating elections of the City, insofar as they may be applicable, shall govern the election.

Section 9. The form of the ballot for the election, which sets forth the measure to be submitted to the voters, is attached hereto as Exhibit A and by this reference incorporated herein, and such form of ballot is hereby approved. The City Clerk shall cause to be delivered to each of the qualified electors of the Community Facilities District a ballot in said form, together with all supplies and written instructions necessary for the use and return of the ballot. The number of votes to be voted by a particular landowner shall be specified on the ballot provided to that landowner.

The identification envelope for return of a ballot shall be enclosed with such ballot, shall have the return postage prepaid, and shall contain: (a) the name and address of the landowner, (b) a declaration, under penalty of perjury, stating that the voter is the owner of record or the authorized representative of the landowner entitled to vote and is the person whose name appears on the identification envelope, (c) the printed name and signature of the voter, (d) the date of signing and place of execution of the declaration described in clause (b) above, and (e) a notice that the envelope contains an official ballot and is to be opened only by the canvassing board.
1922
4164-7288-8654.4
Analysis and arguments with respect to the measure submitted to the voters are hereby waived, as provided in Section 53327 of the Act.

Section 10. The City Clerk shall accept the ballots of the qualified electors in the office of the City Clerk at 303 East B Street, Ontario, California, to and including 7:30 p.m. on June 4, 2024, whether said ballots be personally delivered or received by mail. The City Clerk shall have available ballots that may be marked at said location on the election day by said qualified electors.

Section 11. The City Council hereby determines that the facilities and services financed by the Community Facilities District are necessary to meet increased demands placed upon local agencies as a result of development occurring in the Community Facilities District.

Section 12. The specific purpose of the bonded indebtedness that the Community Facilities District is proposed to be authorized to incur is the financing of the Facilities, including all costs and estimated costs incidental to, or connected with, the accomplishment of such purpose, and the proceeds of such bonded indebtedness shall be applied only to such specific purpose.

Upon approval of the proposition to authorize the Community Facilities District to incur bonded indebtedness, and the sale of any bonds evidencing such indebtedness, the City Council shall take such action as may be necessary to cause to be established an account for deposit of the proceeds of sale of the bonds. For so long as any proceeds of the bonds remain unexpended, the Management Analyst, Financial Services of the City shall cause to be filed with the City Council, no later than January 1 of each year, a report stating (a) the amount of bond proceeds received and expended during the preceding year, and (b) the status of any project funded or to be funded from bond proceeds. Said report may relate to the calendar year, fiscal year, or other appropriate annual period, as the Management Analyst, Financial Services of the City shall determine, and may be incorporated into the annual budget, audit, or other appropriate routine report to the City Council.

Section 13. All actions heretofore taken by the officers, employees and agents of the City with respect to the special election called pursuant hereto, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

Section 14. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things that they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

Section 15. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.
1923
4164-7288-8654.4
PASSED, APPROVED, AND ADOPTED this 4th day of June, 2024. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
1924
4164-7288-8654.4

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
1925
4164-7288-8654.4

EXHIBIT A

OFFICIAL BALLOT

CITY OF ONTARIO
June 4, 2024

SPECIAL ELECTION
This ballot is for a special, landowner election. The number of votes to be voted pursuant to this ballot is ____.

INSTRUCTIONS TO VOTERS:

To vote on the measure, mark a cross (+ or X) in the voting square after the word “YES” or after the word “NO”. All distinguishing marks or erasures are forbidden and make the ballot void. If you wrongly mark, tear or deface this ballot, return it to the City Clerk of the City of Ontario and obtain another.

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)
MEASURE: Shall the measure to authorize City of
Ontario Community Facilities District No. 65 (Falloncrest) (the “Community Facilities District”) to incur bonded indebtedness in a maximum amount of $60,000,000, to authorize the Community Facilities District to levy a special tax in order to finance certain facilities and services and to establish the annual appropriations limit of the Community Facilities District at $60,000,000, as specified in the resolutions adopted by the City Council of the City of Ontario on June 4, 2024 entitled “A Resolution of the City Council of the City of Ontario, California, of Formation of City of Ontario Community Facilities District No. 65 (Falloncrest), Proposing that the Community Facilities District Be Authorized to Levy a Special Tax and Proposing that an Appropriations Limit of the Community Facilities District Be Established” and “A Resolution of the City Council of the City of Ontario, California, Deeming it Necessary for City of Ontario Community Facilities District No. 65 (Falloncrest) to Incur Bonded Indebtedness,” be adopted?
Yes:
No:
1926
4164-8966-5870.2
RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, DECLARING RESULTS OF SPECIAL ELECTION AND

DIRECTING RECORDING OF NOTICE OF SPECIAL TAX LIEN
WHEREAS, on June 4, 2024, the City Council (the “City Council”) of the City of Ontario (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, Calling Special Election for City of Ontario Community Facilities District No. 65 (Falloncrest)” (the “Resolution Calling Election”), calling a special election to submit to the qualified electors of City of Ontario Community Facilities District No. 65 (Falloncrest) (the “Community Facilities District”) the combined ballot proposition to authorize the Community Facilities District to incur bonded indebtedness, to authorize the Community Facilities District to levy a special tax and to establish the appropriations limit of the Community Facilities District; and
WHEREAS, pursuant to the terms of the Resolution Calling Election and the provisions of the Act, the special election was held on June 4, 2024; and WHEREAS, the City Clerk of the City (the “City Clerk”) has certified the canvass of the returns of the election and has filed a Canvass and Statement of Results of Election (the “Canvass”), a copy of which is attached hereto as Exhibit A; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:

Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

Section 2. The City Council has received, reviewed and hereby accepts the Canvass.

Section 3. The City Council hereby finds and declares that the ballot proposition submitted to the qualified electors of the Community Facilities District pursuant to the Resolution Calling Election has been passed and approved by such electors in accordance with Section 53355, Section 53328 and Section 53325.7 of the Act.

Section 4. The City Clerk is hereby directed to execute and cause to be recorded in the office of the County Recorder of the County of San Bernardino a notice of special tax lien in the form required by the Act, said recording to occur no later than 15 days following adoption by the City Council of this Resolution. 1927
4164-8966-5870.2
Section 5. All actions heretofore taken by the officers, employees and agents of the City with respect to the special election, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

Section 6. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things that they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

Section 7. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 4th day of June, 2024. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
1928
4164-8966-5870.2

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
1929
4164-8966-5870.2

EXHIBIT A
[See attached]
1930
4164-8966-5870.2

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)

CANVASS AND STATEMENT OF RESULTS OF ELECTION
I hereby certify that on June 4, 2024, I canvassed the returns of the special election for City of Ontario Community Facilities District No. 65 (Falloncrest) held on June 4, 2024, that the total number of ballots cast in said Community Facilities District and the total number of votes cast for and against the combined ballot proposition submitted to the qualified electors of the Community Facilities District are as follows and that the totals as shown for and against such proposition are true and correct:

Qualified
Landowner
Votes
Votes
Cast YES NO
City of Ontario Community Facilities
District No. 65 (Falloncrest) Special
Election, June 4, 2024
23 ___ ___ ___
MEASURE: Shall the measure to authorize City of Ontario Community Facilities District No. 65 (Falloncrest) (the “Community Facilities District”) to incur bonded indebtedness in a maximum amount of $60,000,000, to authorize the Community Facilities District to levy a special tax in order to finance certain facilities and services and to establish the annual appropriations limit of the Community Facilities District at $60,000,000, as specified in the resolutions adopted by the City Council of the City of Ontario on June 4, 2024 entitled “A Resolution of the City Council of the City of Ontario, California, of Formation of City of Ontario Community Facilities District No. 65 (Falloncrest), Proposing that the Community Facilities District Be Authorized to Levy a Special Tax and Proposing that an Appropriations Limit of the Community Facilities District Be Established” and “A Resolution of the City Council of the City of Ontario, California, Deeming it Necessary for City of Ontario Community Facilities District No. 65 (Falloncrest) to Incur Bonded Indebtedness,” be adopted? IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 4th day of June, 2024.

BY:

SHEILA MAUTZ, CITY CLERK
1931
ORDINANCE NO. ________

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

ONTARIO, CALIFORNIA, LEVYING A SPECIAL TAX

WITHIN CITY OF ONTARIO COMMUNITY FACILITIES
DISTRICT NO. 65 (FALLONCREST)
WHEREAS, on April 16, 2024, the City Council (the “City Council”) of the City of Ontario (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, of Intention to Establish a Community Facilities District Proposed to be Named City of Ontario Community Facilities District No. 65 (Falloncrest) and to Authorize the Levy of a Special Tax Therein,” stating its intention to establish City of Ontario Community Facilities District No. 65 (Falloncrest) (the “Community Facilities District”) and to authorize the Community Facilities District to levy a special tax (the “Special Tax”) within the Community Facilities District for the purpose of financing certain public facilities (the “Facilities”) and services (the “Services”); and
WHEREAS, on June 4, 2024, the City Council held a noticed public hearing on the establishment of the Community Facilities District, as required by the Act; and WHEREAS, subsequent to the close of said hearing, the City Council adopted resolutions entitled “A Resolution of the City Council of the City of Ontario, California, of Formation of City of Ontario Community Facilities District No. 65 (Falloncrest), Proposing that the Community Facilities District Be Authorized to Levy a Special Tax and Proposing that an Appropriations Limit of the Community Facilities District Be Established” (the “Resolution of Formation”), “A Resolution of the City Council of the City of Ontario, California, Deeming it Necessary for City of Ontario Community Facilities District No. 65 (Falloncrest) to Incur Bonded Indebtedness” and “A Resolution of the City Council of the City of Ontario, California, Calling Special Election for City of Ontario Community Facilities District No. 65 (Falloncrest),” which resolutions established the Community Facilities District, proposed that the Community Facilities District be authorized to levy the Special Tax within the Community Facilities District, proposed that an appropriations limit of the Community Facilities District be established and called a special election to submit to the qualified electors of the Community Facilities District the combined ballot proposition to authorize the Community Facilities District to incur bonded indebtedness, to authorize the Community Facilities District to levy the Special Tax and to establish the appropriations limit of the Community Facilities District; and
WHEREAS, on June 4, 2024, an election was held in which the qualified electors of the Community Facilities District approved said proposition by more than the two-thirds vote required by the Act; and
WHEREAS, the City Council is the legislative body of the Community Facilities District;
THE CITY COUNCIL OF THE CITY OF ONTARIO DOES ORDAIN AS FOLLOWS:
1932
4165-3999-7518.2
Section 1. The City Council hereby authorizes and levies the Special Tax within the Community Facilities District pursuant to Sections 53328 and 53340 of the Act, at the rate and in accordance with the method of apportionment set forth in Exhibit B to the Resolution of Formation (the “Rate and Method”). The Special Tax is hereby levied commencing in fiscal year 2024-25 and in each fiscal year thereafter until the last fiscal year in which the Special Tax is authorized to be levied pursuant to the Rate and Method.

Section 2. The City Council may, pursuant to subdivision (b) of Section 53340 of the Act, provide, by resolution, for the levy of the Special Tax in the current tax year or in future tax years at the same rate or at a lower rate than the rate provided by this Ordinance. In no event shall the Special Tax be levied on any parcel within the Community Facilities District in excess of the maximum tax specified therefor in the Rate and Method.

Section 3. The Special Tax shall be levied on all of the parcels in the Community Facilities District, unless exempted by law or by the Rate and Method.

Section 4. The proceeds of the Special Tax shall only be used to pay, in whole or in part, the cost of providing the Facilities and Services and incidental expenses pursuant to the Act.

Section 5. The Special Tax shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in the case of delinquency as is provided for ad valorem taxes or in such other manner as the City Council shall determine, including direct billing of the affected property owners.

Section 6. If for any reason any portion of this Ordinance is found to be invalid, or if the Special Tax is found inapplicable to any particular parcel within the Community Facilities District, by a court of competent jurisdiction, the balance of this Ordinance and the application of the Special Tax to the remaining parcels within the Community Facilities District shall not be affected.

Section 7. The Mayor shall sign this Ordinance and the City Clerk shall certify as to the adoption and shall cause a summary thereof to be published at least once, in a newspaper of general circulation in the City of Ontario, California within fifteen (15) days of the adoption. The City Clerk shall post a certified copy of this ordinance, including the vote for and against the same, in the Office of the City Clerk, in accordance with Government Code Section 36933.

PASSED, APPROVED, AND ADOPTED this ________ day of _________ 2024. _____________________________________
PAUL S. LEON, MAYOR
1933
4165-3999-7518.2
ATTEST:
_________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
1934
4165-3999-7518.2

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Ordinance No. _______ was duly introduced at a regular meeting of the City Council of the City of Ontario held _____________ and adopted at the regular meeting held ___________, 2024 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
_________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
I hereby certify that the foregoing is the original of Ordinance No. _______ duly passed and adopted by the Ontario City Council at their regular meeting held ____________ and that Summaries of the Ordinance were published on ___________ and _____________, in the Inland Valley Daily Bulletin newspaper.
__________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
1935
RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, AUTHORIZING THE EXECUTION AND DELIVERY OF AN

ACQUISITION AND FUNDING AGREEMENT WITH LENNAR HOMES

OF CALIFORNIA, LLC
WHEREAS, certain real property within the boundaries of the City located generally south of State Route 60 is commonly known as the New Model Colony; and WHEREAS, the City has approved a General Plan Amendment for the New Model Colony, which has been supplemented by certain water, recycled water and sewer master plans (as so supplemented, the “General Plan Amendment”) and has certified an Environmental Impact Report and adopted a Mitigated Negative Declaration in connection with the General Plan Amendment (together, the “Environmental Impact Report”); and
WHEREAS, the City has specified in the General Plan Amendment and the Environmental Impact Report the major backbone transportation, water, sewer, storm drainage, parks, public safety infrastructure and fiber optic systems required to serve the New Model Colony; and
WHEREAS, the New Model Colony is now commonly referred to as Ontario Ranch; and
WHEREAS, Lennar Homes of California, LLC, a California limited liability company (“Lennar”), is developing certain of the property within Ontario Ranch (the “Property”); and
WHEREAS, certain of such major backbone infrastructure is required to serve the Property; and
WHEREAS, the City and Lennar desire to provide a mechanism to fund, in a timely manner, the costs of certain of such major backbone infrastructure required to serve Ontario Ranch (the “Facilities”) so that such development may occur; and WHEREAS, in order to provide such a mechanism, the City has, pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”), established City of Ontario Community Facilities District No. 65 (Falloncrest) (the “Community Facilities District”), the boundaries of which include the Property; and WHEREAS, the Community Facilities District is authorized to levy a special tax (the “Special Tax”) within the Community Facilities District and issue special tax bonds (the “Bonds”) secured by the Special Tax in order to finance certain of the Facilities; and
1936
4165-5677-4734.2
WHEREAS, it is anticipated that the Special Tax will be levied by the Community Facilities District and that, from time to time, Bonds will be issued by the Community Facilities District; and
WHEREAS, Lennar proposes to construct, or cause to be constructed, certain of the Facilities proposed to be financed by the Community Facilities District pursuant to the Act, and the City proposes to purchase such Facilities from Lennar pursuant to an Acquisition and Funding Agreement by and between the City and Lennar (such Acquisition and Funding Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Acquisition Agreement”); and WHEREAS, the City Council is the legislative body of the Community Facilities District;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:

Section 1. The Acquisition Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. Each of the Mayor of the City, and such other member of the City Council as the Mayor may designate, the City Manager of the City and the Executive Director of Finance of the City, and such other officer or employee of the City as the City Manager may designate (the “Authorized Officers”) is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the City, to execute and deliver the Acquisition Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Acquisition Agreement by such Authorized Officer.

Section 2. All actions heretofore taken by the officers, employees and agents of the City with respect to the Acquisition Agreement, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

Section 3. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things that they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

Section 4. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 4th day of June, 2024. 1937
4165-5677-4734.2
_____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
1938
4165-5677-4734.2

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
1939
4164-5611-1438.2

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)

CONCURRENCE OF ELECTION OFFICIAL
I, Sheila Mautz, City Clerk of the City of Ontario (the “City”), hereby certify as follows:
(a) that I am the election official responsible for conducting special elections in the City; and
(b) that, pursuant to Section 53326(a) of the Mello-Roos Community Facilities Act of 1982 (the “Act”), I do hereby concur in (i) the holding on the date hereof of the special election to submit to the qualified electors of City of Ontario Community Facilities District No. 65 (Falloncrest) (the “Community Facilities District”) the combined ballot proposition to authorize the Community Facilities District to incur bonded indebtedness, to authorize the Community Facilities District to levy a special tax and to establish an appropriations limit of the Community Facilities District, as provided in the resolution entitled “A Resolution of the City Council of the City of Ontario, California, Calling Special Election for City of Ontario Community Facilities District No. 65 (Falloncrest),” proposed to be adopted by the City Council of the City on the date hereof, and (ii) the waiving by the unanimous consent of the qualified electors of the Community Facilities District of any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of the election, including any time limit or requirement applicable to any election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act).

Dated: June 4, 2024
Sheila Mautz, City Clerk
1940
4165-2322-0302.3

RECORDING REQUESTED BY AND
AFTER RECORDATION RETURN TO:

City Clerk
City of Ontario
303 East B Street
Ontario, California 91764

NOTICE OF SPECIAL TAX LIEN

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)
Pursuant to the requirements of Section 3114.5 of the California Streets and Highways Code and Section 53328.3 of the Mello-Roos Community Facilities Act of 1982 (the “Act”), the undersigned City Clerk of the City of Ontario, State of California, hereby gives notice that a lien to secure payment of a special tax is hereby imposed by the City Council of the City of Ontario, County of San Bernardino, State of California. The special tax secured by this lien is authorized to be levied for the purpose of (a) paying the principal of and interest on bonds, the proceeds of which are being used to finance the facilities described in Exhibit A attached hereto and hereby made a part hereof, (b) providing such facilities, and (c) providing the services described in Exhibit A.

The special tax is authorized to be levied within City of Ontario Community Facilities District No. 65 (Falloncrest) (the “Community Facilities District”) that has now been officially formed and the lien of the special tax is a continuing lien that shall secure each annual levy of the special tax and that shall continue in force and effect until the special tax obligation is prepaid, permanently satisfied and canceled in accordance with law or until the special tax ceases to be levied and a notice of cessation of special tax is recorded in accordance with Section 53330.5 of the Act.

The rate, method of apportionment and manner of collection of the authorized special tax is as set forth in Exhibit B attached hereto and hereby made a part hereof. Conditions under which the obligation to pay the special tax for facilities may be prepaid and permanently satisfied and the lien of the special tax canceled are as set forth in Exhibit B. No provision has been made for the prepayment of the special tax for services.

Notice is further given that upon the recording of this notice in the office of the County Recorder of the County of San Bernardino, the obligation to pay the special tax levy shall become a lien upon all nonexempt real property within the Community Facilities District in accordance with Section 3115.5 of the California Streets and Highways Code.

The name(s) of the owner(s) and the assessor’s tax parcel number(s) of the real property included within the Community Facilities District and not exempt from the special tax are as set forth in Exhibit C attached hereto and hereby made a part hereof. 1941
2 4165-2322-0302.3
Reference is made to the boundary map of the Community Facilities District recorded at Book 91 of Maps of Assessment and Community Facilities Districts at Page 58, in the office of the County Recorder for the County of San Bernardino, State of California (Document No. 2024-0090697), which map is now the final boundary map of the Community Facilities District.

For further information concerning the current and estimated future tax liability of owners or purchasers of real property subject to this special tax lien, interested persons should contact the Management Analyst, Financial Services, City of Ontario, 303 East B Street, Ontario, California 91764, (909) 395-2341.

Dated: June ___, 2024
By:

Sheila Mautz, City Clerk
1942
A-1
4165-2322-0302.3

EXHIBIT A

FACILITIES AND SERVICES TO BE FINANCED
Facilities
The types of public facilities to be financed by the Community Facilities District are street and bridge improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, domestic and recycled water distribution facilities, sewer collection facilities, solid waste facilities, storm drainage facilities, park and recreation facilities and equipment, aquatic facilities and equipment, fire facilities and equipment, police facilities and equipment, library facilities and equipment, fiber optic telecommunication, wireless communication and public safety camera facilities and equipment, general governmental office, administrative and meeting facilities, and land, rights-ofway and easements necessary for any of such facilities.

EXHIBIT B

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
1944
C-1
4165-2322-0302.3

EXHIBIT C
PROPERTY OWNER AND ASSESSOR’S PARCEL NUMBERS
Name of Property Owner
San Bernardino County
Assessor Parcel Nos.

Lennar Homes of
California, LLC
0218-324-10
0218-325-44 through and including 0218-325-50
0218-326-01 through and including 0218-326-45
0218-326-47
0218-326-48
0218-334-01 through and including 0218-334-79
0218-335-01 through and including 0218-335-68
0218-335-82
0218-336-01 through and including 0218-336-48
0218-337-01 through and including 0218-337-60
0218-337-76 through and including 0218-337-81

KL LHB DSD AIV LLC
0218-324-11 through and including 0218-324-13
0218-324-21
0218-324-22
0218-324-24 through and including 0218-324-43
0218-325-01 through and including 0218-325-43
0218-325-51 through and including 0218-325-54
0218-326-46
0218-326-49
0218-334-80
0218-334-81
0218-335-69 through and including 0218-335-81
0218-335-83 through and including 0218-335-85
0218-337-61 through and including 0218-337-75
0218-337-82
1945
4165-9032-9166.3

ACQUISITION AND FUNDING AGREEMENT
by and between

CITY OF ONTARIO
and

LENNAR HOMES OF CALIFORNIA, LLC
Dated as of June 1, 2024
City of Ontario
Community Facilities District No. 65
(Falloncrest)
1946

TABLE OF CONTENTS
Page
i
4165-9032-9166.3
ARTICLE I DEFINITIONS .......................................................................................................... 3 Section 1.1. Definitions...................................................................................................... 3 Section 1.2. Rules of Construction .................................................................................... 7 ARTICLE II ACQUISITION OF FACILITIES............................................................................ 9 Section 2.1. Acquisition of Facilities; Limited Source of Payments ................................. 9 Section 2.2. Segment Review; Payment Requests............................................................. 9 Section 2.3. Payment of Purchase Price........................................................................... 11 ARTICLE III CONSTRUCTION OF FACILITIES ................................................................... 12 Section 3.1. Preparation and Approval of Plans and Specifications................................ 12 Section 3.2. Duty of the Developer to Construct............................................................. 12 Section 3.3. Public Works Requirements ........................................................................ 12 Section 3.4. Bonding Requirements................................................................................. 14 Section 3.5. Inspection; Completion of Construction...................................................... 14 Section 3.6. Maintenance of Facilities; Warranties ......................................................... 14 Section 3.7. Insurance Requirements............................................................................... 14 Section 3.8. Ownership of Facilities................................................................................ 16 ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS;
INDEMNIFICATION.................................................................................... 17 Section 4.1. Representations and Warranties of the Developer....................................... 17 Section 4.2. Covenants of the Developer......................................................................... 18 Section 4.3. Covenants of the City................................................................................... 19 Section 4.4. Indemnification ............................................................................................ 19 ARTICLE V EVENTS OF DEFAULT AND REMEDIES; FORCE MAJEURE...................... 21 Section 5.1. Developer Events of Default........................................................................ 21 Section 5.2. Remedies for Developer Events of Default ................................................. 22 Section 5.3. City Events of Default ................................................................................. 23 Section 5.4. Remedies for City Events of Default........................................................... 23 Section 5.5. Force Majeure .............................................................................................. 24 ARTICLE VI MISCELLANEOUS ............................................................................................. 26 Section 6.1. Developer as Independent Contractor.......................................................... 26 1947

TABLE OF CONTENTS
(continued)
Page
ii
4165-9032-9166.3
Section 6.2. Other Agreements ........................................................................................ 26 Section 6.3. Binding on Successors and Assigns............................................................. 26 Section 6.4. Amendments ................................................................................................ 26 Section 6.5. Waivers ........................................................................................................ 26 Section 6.6. Third-Party Beneficiaries............................................................................. 26 Section 6.7. Notices ......................................................................................................... 27 Section 6.8. Attorneys’ Fees ............................................................................................ 27 Section 6.9. Severability .................................................................................................. 27 Section 6.10. Governing Law .......................................................................................... 27 Section 6.11. Jurisdiction and Venue............................................................................... 27 Section 6.12. Electronic Signature................................................................................... 28 Section 6.13. Counterparts............................................................................................... 28 Section 6.14. Effective Date ............................................................................................ 28 EXHIBIT A FACILITIES ........................................................................................................ A-1 EXHIBIT B FORM OF PAYMENT REQUEST ..................................................................... B-1 1948
4165-9032-9166.3

ACQUISITION AND FUNDING AGREEMENT
THIS ACQUISITION AND FUNDING AGREEMENT (this “Acquisition Agreement”), dated as of June 1, 2024, is by and between the CITY OF ONTARIO, a general law city organized and existing under the laws of the State of California (the “City”), and LENNAR HOMES OF CALIFORNIA, LLC, a limited liability company organized and existing under the laws of the State of California (the “Developer”).

W I T N E S S E T H:

WHEREAS, certain real property within the boundaries of the City located generally south of State Route 60 is commonly known as the New Model Colony; WHEREAS, the City has approved a General Plan Amendment for the New Model Colony, which has been supplemented by certain water, recycled water and sewer master plans (as so supplemented, the “General Plan Amendment”) and has certified an Environmental Impact Report and adopted a Mitigated Negative Declaration in connection with the General Plan Amendment (together, the “Environmental Impact Report”); WHEREAS, the City has specified in the General Plan Amendment and the Environmental Impact Report the major backbone transportation, water, sewer, storm drainage, parks, public safety infrastructure and fiber optic systems required to serve the New Model Colony;
WHEREAS, the New Model Colony is now commonly referred to as Ontario Ranch; WHEREAS, the Developer is developing certain of the property within Ontario Ranch (the “Property”);
WHEREAS, certain of such major backbone infrastructure is required to serve the Property;
WHEREAS, the City and the Developer desire to provide a mechanism to fund, in a timely manner, the costs of certain of such major backbone infrastructure required to serve the Ontario Ranch (the “Facilities”) so that such development may occur; WHEREAS, in order to provide such a mechanism, the City has, pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”), established City of Ontario Community Facilities District No. 65 (Falloncrest) (the “Community Facilities District”), the boundaries of which include the Property; WHEREAS, pursuant to the Act, the proceedings of the City Council of the City and an election held within the Community Facilities District, the Community Facilities District is authorized to levy a special tax (the “Special Tax”) within the Community Facilities District and issue special tax bonds (the “Bonds”) secured by the Special Tax in order to finance certain of the Facilities;
1949
2 4165-9032-9166.3
WHEREAS, it is anticipated that the Special Tax will be levied by the Community Facilities District and that, from time to time, Bonds will be issued by the Community Facilities District;
WHEREAS, it is anticipated that, in accordance with the terms set forth in this Acquisition Agreement, the Developer will construct or cause to be constructed certain of the Facilities, that, upon satisfaction of the conditions specified herein, the City will acquire such Facilities and take title thereto and that the Developer will be paid the purchase price thereof, determined as set forth herein, from certain proceeds of the Special Tax, if any, and certain proceeds of the Bonds;
WHEREAS, Section 53313.5 of the Act provides that a community facilities district may only finance the purchase of facilities whose construction has been completed, as determined by the legislative body, before the resolution of formation to establish the community facilities district is adopted pursuant to Section 53325.1 of the Act, except that a community facilities district may finance the purchase of facilities completed after the adoption of the resolution of formation if the facility was constructed as if it had been constructed under the direction and supervision, or under the authority of, the local agency; and WHEREAS, the Facilities are to be acquired by the City pursuant to this Acquisition Agreement pursuant to the Act and, specifically, pursuant to the provisions of Sections 53313.5 thereof;
NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein, the parties hereto agree as follows:
1950
3 4165-9032-9166.3

ARTICLE I

DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires (a) the terms defined in this Section shall, for all purposes of this Acquisition Agreement, have the meanings herein ascribed thereto, and (b) capitalized undefined terms used herein that are defined in the Indenture shall have the respective meanings ascribed thereto in the Indenture. “Acceptable Title” means title to land, or an easement therein, delivered free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether any such item is recorded or unrecorded, except those non-monetary items that are reasonably determined by the City not to interfere with the intended use of such land or easement and therefore are not required to be cleared from title.
“Acceptance Date” means (a) with respect to a Segment, the date on which such Segment is accepted by the City pursuant to Section 2.2(e) hereof, and (b) with respect to a Component, the date on which the last Segment that is part of such Component is accepted by the City pursuant to Section 2.2(e) hereof.
“Acquisition Agreement” means this Acquisition and Funding Agreement, dated as of June 1, 2024, by and between the City and the Developer, as originally executed or as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Act” means the Mello-Roos Community Facilities Act of 1982, constituting Section 53311 et seq. of the California Government Code.
“Actual Cost” means, with respect to a Segment, as the description thereof is reflected in the then current Plans therefor, an amount equal to the sum of (a) the Developer’s actual, reasonable cost of constructing such Segment (including grading for such construction), including labor, material and equipment costs and professional services directly related to materials testing, (b) the Developer’s actual, reasonable cost of designing and preparing the Plans for such Segment, including engineering services provided in connection with designing and preparing such Plans, (c) the Developer’s actual, reasonable cost of any performance and maintenance bonds and insurance, including title insurance, required hereby for such Segment, (d) the Developer’s actual, reasonable cost of any real property or interest therein, other than any such real property or interest therein to be conveyed with a Circulation System Segment, which real property or interest therein is either necessary for the construction of such Segment (e.g., temporary construction easements, haul roads, etc.) or is required to be conveyed with such Segment in order to convey Acceptable Title thereto to the City or its designee, (e) the Developer’s actual, reasonable cost of environmental evaluations required in the City’s reasonable determination specifically for such Segment, (f) the amount of any fees actually paid by the Developer to governmental agencies in order to obtain permits, licenses or other necessary governmental approvals and reviews for such Segment, including City plan check, processing and inspection fees for such Segment, (g) the Developer’s actual, reasonable cost for construction management services for such Segment, which cost shall not exceed 5% of the cost 1951
4 4165-9032-9166.3
of constructing such Segment, as determined pursuant to clause (a) of this definition, and (h) the Developer’s actual, reasonable cost for professional services directly related to the construction of such Segment, including engineering, inspection, construction staking and similar professional services, all as specified in a Payment Request that has been reviewed and approved by the City Engineer; provided, however, that (i) no item of cost relating to a Segment shall be included in more than one category of cost specified in clauses (a) through (h) of this definition, (ii) except with respect to items of cost for construction management services specified in clause (g) that are provided by the Developer or an Affiliate thereof rather than a third party, each item of cost shall include only amounts actually paid by the Developer to third parties, other than Affiliates of the Developer, and shall not include overhead or other internal expenses of the Developer, and (iii) the aggregate cost of items specified in clauses (e) through (h) shall not exceed 30% of the cost of constructing such Segment, as determined pursuant to clause (a) of this definition. “Affiliate” of another Person means (a) each Person that, directly or indirectly, owns or controls, whether beneficially or as trustee, guardian, or other fiduciary, 50% or more of any class of equity securities of such other Person, and (b) each Person that controls, is controlled by or is under common control with or by such Person or any Affiliate of such Person. For the purpose of this definition, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise. “Bonds” means bonds, notes or other obligations of the Community Facilities District payable from the Special Tax and issued under the Indenture. “Circulation System Segments” means Segment Nos. ST-1 through ST-9 inclusive. “City” means the City of Ontario, a general law city organized and existing under the laws of the State, and its successors.
“City Council” means the City Council of the City.
“City Engineer” means the City Engineer of the City.
“City Event of Default” means any event or circumstance specified in Section 5.3 hereof.
“Community Facilities District” means City of Ontario Community Facilities District No. 65 (Falloncrest), a community facilities district organized and existing under the laws of the State, and its successors.
“Complete” means, with respect to a Segment, that the construction of such Segment (including all ancillary, non-essential items included in such Segment) by the Developer is, in the reasonable judgment of the City Engineer, in all respects complete. “Components” means the related groups of Segments identified as such and described in Exhibit A hereto; each Component is comprised of the Segments listed thereunder in Exhibit A. 1952
5 4165-9032-9166.3
“Conditions of Approval” means, with respect to any portion of the Property, the conditions of approval of all land use entitlements approved by the City for such portion of the Property and the conditions of any Development Agreement, subdivision improvement agreement or other agreement between the Developer and the City relating to such portion of the Property, which conditions the Developer must satisfy or cause to be satisfied in order to develop such portion of the Property.
“Construction Agreement” means the First Amended and Restated Agreement for Financing and Construction of Limited Infrastructure Improvements to Serve an Easterly Portion of the New Model Colony, made as of August 21, 2012, by and between the City and NMC Builders, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Developer” means Lennar Homes of California, LLC, a limited liability company organized and existing under the laws of the State of California, and its successors and assigns. “Developer Acquisition Account” means (a) prior to the initial issuance of Bonds, the fund or account established for the Community Facilities District by the City, howsoever denominated, into which the Net Proceeds of the Special Tax are to be deposited, and (b) from and after the initial issuance of Bonds, the account by that name within the Improvement Fund established and held by the Trustee pursuant to the Indenture, into which the Net Proceeds of Bonds available to pay the Purchase Prices of the Segments purchased by the City pursuant hereto are to be deposited.
“Developer Event of Default” means any event or circumstance specified in Section 5.1 hereof.
“Developer Representative” means the person or persons designated as such in a certificate signed by the Developer and delivered to the City, which certificate shall contain an original or specimen signature of each person so designated. “Development Agreement” means a statutory development agreement between the City and the Developer, entered into pursuant to California Government Code Section 65864 et seq., relating to the development of a portion of the Property. “DIF Program Costs” has the meaning ascribed thereto in the definition of “Program Costs” or “DIF Program Costs” in the Construction Agreement. “Effective Date” means June 4, 2024.
“Facilities” means the facilities that are described on Exhibit A hereto. “General Prevailing Wage Rates” means those rates as determined by the Director of the Department of Industrial Relations of the State of California. “Hazardous Material” means any hazardous or toxic substance, material or waste that is regulated by any local governmental authority, the State or the United States Government, including any material or substance that is (a) designated as a “hazardous substance” pursuant to 1953
6 4165-9032-9166.3
Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1321), (b) defined as a “hazardous waste” pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903), (c) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq., (d) petroleum, or (e) asbestos.
“Improvement Fund” means the fund or account established under the Indenture, howsoever denominated, into the accounts established within which the Net Proceeds of Bonds are to be deposited.
“Indenture” means the indenture, trust agreement, fiscal agent agreement or similar instrument, howsoever denominated, pursuant to which Bonds of the Community Facilities District are issued, as originally executed and as it may be amended, supplemented or otherwise modified in accordance with its terms.
“Member” means a member of NMC Builders.
“Memorandum of Agreement” means the Amended and Restated Memorandum of Agreement, dated as of November 1, 2022, by and between the City and NMC Builders, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Net Proceeds” means (a) the proceeds, if any, of the Special Tax received prior to the initial issuance of Bonds and remaining after the payment or setting aside of, or provision for, administrative expenses of the Community Facilities District, and (b) the proceeds of Bonds remaining after the payment or setting aside of, or provision for (i) the underwriter’s discount for such Bonds, (ii) the costs of issuance of such Bonds, including the costs of formation of the Community Facilities District, (iii) any required reserve fund deposit for such Bonds, (iv) capitalized interest on such Bonds, and (v) pre-funded administrative expenses of the Community Facilities District.
“NMC Acquisition Account” means the account by that name within the Improvement Fund established and held by the Trustee pursuant to the Indenture. “NMC Builders” means NMC Builders, LLC, a limited liability company organized and existing under the laws of the State of California, and its successors and assigns. “Payment Request” means the document to be provided by the Developer to substantiate the Purchase Price of one or more Segments, which shall be substantially in the form of Exhibit B attached hereto.
“Person” means an individual, a corporation, a partnership, an association, a limited liability company, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof.
“Plans” means the plans and specifications for the Facilities prepared or to be prepared by or on behalf of the Developer pursuant to Section 3.1 hereof. 1954
7 4165-9032-9166.3
“Property” means the real property located within the boundaries of the Community Facilities District.
“Purchase Price” means, with respect to a Segment, subject to the provisions of Section 2.3 hereof, the Actual Cost of such Segment.
“Rate and Method” means the rate and method of apportionment of the Special Tax approved by the qualified electors of the Community Facilities District. “Related Property” means, with respect to a Segment, the property on, in or over which such Segment is located, which property, or an easement thereon or other interest therein, is dedicated or otherwise conveyed to the City as provided in Section 2.2(d) hereof. “Segments” means the discrete portions of the Components identified as such and described in Exhibit A hereto as Segments; provided, however, that each such Segment described therein shall constitute a Segment for purposes of this Acquisition Agreement only if such Segment was constructed by or on behalf of the Developer singly and not jointly or in conjunction with another Member or NMC Builders.
“Special Tax” means the special tax approved by the qualified electors of the Community Facilities District to be levied therein.
“State” means the State of California.
“Substantially Complete” means, with respect to a Circulation System Segment, that the construction of such Circulation System Segment by the Developer has, in the reasonable judgment of the City Engineer, reached a stage of completion sufficient to allow such Circulation System Segment to be utilized for the purpose for which it is intended and that only the construction of ancillary, non-essential items remains incomplete; provided, however, that a Circulation System Segment shall not be deemed to be Substantially Complete if, in the reasonable judgment of the City Engineer, the cost to complete the construction of such ancillary, non-essential items would exceed 15% of the Purchase Price of such Circulation System Segment.
“Trustee” means the commercial bank or trust company initially designated as trustee under the Indenture, and any successor thereto thereunder substituted in its place as provided therein.

Section 1.2. Rules of Construction. (a) The terms defined herein expressed in the singular shall, unless the context otherwise indicates, include the plural and vice versa. (b) The use herein of the masculine, feminine or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine or neuter gender, as appropriate.
(c) References herein to a document shall include all amendments, supplements or other modifications to such document, and any replacements, substitutions or novation of, that document.
1955
8 4165-9032-9166.3
(d) Any term defined herein by reference to another document shall continue to have the meaning ascribed thereto whether or not such other document remains in effect. (e) The use herein of the words “including” and “includes,” and words of similar import, shall be deemed to be followed by the phrase “without limitation.” (f) Headings of Articles and Sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.
(g) All references herein to designated “Articles,” “Sections,” “Exhibits,” “subsections,” “paragraphs,” “clauses,” and other subdivisions are to the designated Articles, Sections, Exhibits, subsections, paragraphs, clauses, and other subdivisions of this Acquisition Agreement.
(h) The words “hereof” (except when preceded by a specific Section or Article reference) “herein,” “hereby,” “hereunder,” “hereinabove,” “hereinafter,” and other equivalent words and phrases used herein refer to this Acquisition Agreement and not solely to the particular portion hereof in which any such word is used. (i) Any reference to a Person, or a Person in a specified capacity, shall be construed to include such Person’s successors or such Person’s successors in such capacity, as the case may be.
1956
9 4165-9032-9166.3

ARTICLE II

ACQUISITION OF FACILITIES
Section 2.1. Acquisition of Facilities; Limited Source of Payments. (a) Subject to the terms and conditions hereof, the Developer hereby agrees to sell to the City, and the City hereby agrees to purchase from the Developer, each Segment for the Purchase Price thereof. (b) The Purchase Prices of Segments are to be paid from Net Proceeds of the Special Tax, if any, and Net Proceeds of Bonds deposited in the Developer Acquisition Account.

Notwithstanding anything to the contrary contained herein, the City shall not be obligated to pay the Purchase Price of any Segment except from the Net Proceeds of the Special Tax and the Net Proceeds of the Bonds so deposited in the Developer Acquisition Account. The City makes no warranty, either express or implied, that the Community Facilities District will be able to issue and sell any Bonds or that the Net Proceeds of the Special Tax and the Net Proceeds of the Bonds so deposited in the Developer Acquisition Account and available for the payment of the Purchase Price of the Segments will be sufficient for such purpose. (c) The Net Proceeds of the Special Tax and the Net Proceeds of the Bonds shall be applied to the uses in the priorities set forth in the Memorandum of Agreement. If amounts remain in the Developer Acquisition Account after the Purchase Prices of all of the Segments have been paid, such remaining amounts shall be deposited in the NMC Acquisition Account.

Section 2.2. Segment Review; Payment Requests. (a) When the Developer has concluded that the construction of a Segment by the Developer is in all respects complete, the Developer shall deliver to the City Engineer (i) a Payment Request for such Segment, together with all attachments and exhibits to be included therewith, (ii) a copy of the documents conveying, or that previously conveyed, to the City Acceptable Title to the Related Property of such Segment, as described in subsection (d) of this Section, and (iii) a copy of the Notice of Completion of such Segment that will be filed in accordance with Section 3093 of the California Civil Code, if applicable; provided, however, that, if, during the process of designing a Segment, obtaining bids for construction of a Segment or during construction of a Segment, the Developer determines that, because of changed conditions or circumstances, the actual cost of constructing such Segment may materially exceed the Developer’s originally estimated cost thereof, the Developer shall, in order to facilitate and expedite the City Engineer’s review and verification with respect to such Segment pursuant to subsection (b) of this Section, as soon as practicable, deliver to the City Engineer a written statement describing (i) such changed conditions or circumstances, (ii) the Developer’s original estimated cost of constructing such Segment, (iii) the anticipated effect of such changed conditions or circumstances on the Actual Cost of such Segment, and (iv) an explanation as to why including the increased cost resulting from such changed conditions or circumstances would result in the Actual Cost of such Segment being no greater than the actual, reasonable cost thereof, determined in accordance with the provisions of the definition of Actual Cost set forth herein.
(b) Upon receipt of a completed Payment Request (and accompanying documentation) for a Segment, the City Engineer shall conduct a review in order to confirm that such Segment is Complete and was constructed in accordance with the Plans therefor and to 1957
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verify and approve the Actual Cost of such Segment specified in such Payment Request. As a reference in determining the reasonable cost of constructing such Segment, the City Engineer may use the most recently updated DIF Program Costs of such Segment, which reflect the City Engineer’s determination, as of the date of such update, of the reasonable cost of constructing such Segment, recognizing that, depending on the date of such most recent update, such DIF Program Costs may not reflect the reasonable cost of constructing such Segment at the time it was constructed. The Developer agrees to cooperate with the City Engineer in conducting each such review and to provide the City Engineer with such additional information and documentation as is reasonably necessary for the City Engineer to conclude each such review.

The City agrees to cause the City Engineer to conduct such review without unreasonable delay.

If the City Engineer determines that the Actual Cost specified in such Payment Request as initially submitted exceeds the Developer’s actual, reasonable cost of constructing such Segment, the Developer shall resubmit such Payment Request, with the Actual Cost specified therein modified so as to take into account such determination by the City Engineer. Upon confirmation that such Segment is Complete and has been constructed in accordance with the Plans therefor, and verification and approval of the Actual Cost of such Segment, the City Engineer shall sign the Payment Request, indicating thereon that such Segment is Complete and that the full amount of the Purchase Price of such Segment is eligible for payment, and forward the same to the City. (c) With respect to a Circulation System Segment, if, as a result of the review described in subsection (b) of this Section, the City Engineer (i) determines that such Circulation System Segment, while not Complete, is Substantially Complete, (ii) confirms that such Circulation System Segment has been constructed in accordance with the Plans therefor, and (iii) verifies and approves the Actual Cost of such Circulation System Segment, the City Engineer shall sign the Payment Request, indicating thereon that such Circulation System Segment is Substantially Complete and that an amount equal to 85% of the Actual Cost of such Circulation System Segment is eligible for payment, and forward the same to the City.

When the Developer completes or causes to be completed all work with respect to such Circulation System Segment and concludes that such Circulation System Segment is Complete, the Developer shall deliver to the City Engineer (i) if as-built drawings or similar plans and specifications for such Circulation System Segment have not previously been submitted to the City Engineer, such drawings or plans and specifications, together with a certification of the Developer that such drawings or plans and specifications are true, correct and complete, and (ii) such information and documentation as is reasonably required by the City Engineer in order for the City Engineer to determine whether such Circulation System Segment is Complete. Upon receipt of such information and documentation, the City Engineer shall conduct a review in order to confirm that such Circulation System Segment is Complete. If, as a result of such review, the City Engineer determines that such Circulation System Segment is Complete, the City Engineer shall sign a copy of the original Payment Request therefor, indicating thereon that such Circulation System Segment is Complete and that the full amount of the Purchase Price of such Segment is eligible for payment, and forward the same to the City. (d) Acceptable Title to all property on, in or over which each Segment will be located shall be conveyed to the City by way of grant deed, quitclaim, or dedication of such property, or easement thereon, if such easement is approved by the City as being a sufficient interest therein to permit the City to properly own, operate and maintain such Segment located therein, thereon 1958
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or thereover, and to permit the Developer to perform its obligations as set forth in this Acquisition Agreement.

Upon the request of the City, the Developer shall furnish to the City a title report for such property not previously dedicated or otherwise conveyed to the City or its designee, for review and approval at least 20 calendar days prior to the transfer of Acceptable Title to a Segment to the City or its designee. The City shall approve the title report unless it reveals a matter that, in the reasonable judgment of the City, could materially affect the City’s or its designee’s use and enjoyment of any part of the property or easement covered by the title report. In the event the City does not approve the title report, the City shall not be obligated to accept title to such Segment until such objections to title have been cured to the reasonable satisfaction of the City. (e) Upon (i) the execution by the City Engineer of a Payment Request for a Segment indicating that such Segment is Complete, and (ii) the City’s determination that Acceptable Title to the property on, in or over which each Segment is located has been or is being conveyed to the City, such Segment shall be accepted by the City. The Developer shall transfer to the City, by appropriate instrument in accordance with the Conditions of Approval, title to each Segment accepted by the City pursuant hereto; provided, however, that notwithstanding such transfer, as provided in Section 3.6 hereof, the Developer shall be responsible for the maintenance of such Segment until the Acceptance Date of the Component of which such Segment is a part.

Section 2.3. Payment of Purchase Price. (a) Upon receipt of a reviewed and fully signed Payment Request pursuant to Section 2.2(b) hereof indicating that a Segment is Complete and that the Purchase Price of such Segment is eligible for payment, the City shall, within five business days of the approval and confirmation thereof by the City Engineer, by written request, direct the Trustee to pay from the Developer Acquisition Account such Purchase Price. If the Payment Request for a Segment requests that the Purchase Price requested to be paid pursuant thereto be paid to the Person or Persons, in the amounts, set forth in the completed Purchase Price Payment Instructions attached thereto as Attachment B, the City shall direct the Trustee to pay from the Developer Acquisition Account such Purchase Price or portion thereof to such Person or Persons.
(b) Upon receipt of a reviewed and fully signed Payment Request pursuant to Section 2.2(c) hereof indicating that a Circulation System Segment is Substantially Complete and that an amount equal to 85% of the Purchase Price of such Circulation System Segment is eligible for payment, the City shall, within five business days of the approval and confirmation thereof by the City Engineer, by written request, direct the Trustee to pay from the Developer Acquisition Account 85% of the Purchase Price of such Circulation System Segment. If the Payment Request for a Circulation System Segment requests that the 85% of the Purchase Price of such Circulation System Segment requested to be paid pursuant thereto be paid to the Person or Persons, in the amounts, set forth in the completed Purchase Price Payment Instructions attached thereto as Attachment B, the City shall direct the Trustee to pay from the Developer Acquisition Account such 85% of such Purchase Price or portion thereof to such Person or Persons.
1959
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ARTICLE III

CONSTRUCTION OF FACILITIES
Section 3.1. Preparation and Approval of Plans and Specifications. The Developer shall cause Plans to be prepared for the Facilities to be acquired pursuant hereto in accordance with the Conditions of Approval. The Developer shall obtain the written approval of the Plans from all appropriate departments of the City or from any other public agency or public utility from which such approval must be obtained. The Developer shall provide copies of all such Plans to the City Engineer. The Plans for a Segment shall be updated from time to time to reflect changed conditions or circumstances with respect thereto, the Developer shall obtain the written approval of such updated Plans from all appropriate departments of the City and the Developer shall provide copies of all such updated Plans to the City Engineer.

Section 3.2. Duty of the Developer to Construct. The Developer shall construct or cause to be constructed the Segments in accordance with the Conditions of Approval and the approved Plans. The Developer shall perform all of its obligations hereunder and shall conduct or cause to be conducted all operations with respect to the construction of the Segments in a good, workmanlike and commercially reasonable manner, with the standard of diligence and care normally employed by duly qualified Persons utilizing commercially reasonable efforts in the performance of comparable work and in accordance with generally accepted practices appropriate to the activities undertaken. Notwithstanding the foregoing, the Developer shall not be required to construct any Facilities or cause such Facilities to be constructed other than at the time required by, and in accordance with, the Conditions of Approval or to perform any work requiring a contractor’s license, nor shall the Developer be deemed to be performing construction services pursuant to this Acquisition Agreement.

Section 3.3. Public Works Requirements. (a) In order to ensure that the Segments that are acquired by the City pursuant to this Acquisition Agreement are constructed as if they had been constructed under the direction and supervision, or under the authority of, the City, so that they may be acquired pursuant to California Government Code Section 53313.5, the Developer shall comply with or cause to be complied with all of the requirements of this Section for each Segment for which the Developer submits a Payment Request. (b) Notice inviting sealed bids for the construction of each Segment shall be given as required for public works projects in conformance with the California Public Contracts Code. (c) The contract for the construction of each Segment shall be awarded to the responsible bidder submitting the lowest responsive bid for the construction of such Segment. (d) The Developer shall require, and the specifications and bid and contract documents shall require, all contractors, subcontractors, vendors, equipment operators and owner operators, in each such case to the extent such Persons are engaged to perform work on a Segment, to pay at least General Prevailing Wage Rates to all workers employed in the execution of the contract, to post a copy of the General Prevailing Wage Rates at the job-site in a conspicuous place available to all employees and applicants for employment, and to otherwise 1960
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comply with applicable provisions of the California Labor Code, the California Government Code and the California Public Contracts Code relating to public works projects of cities.

The Developer shall require, and the specifications and bid and contract documents shall require, for all contracts involving in excess of $30,000 or 20 working days, all contractors, subcontractors, vendors, equipment operators and owner operators, in each such case to the extent such Persons are engaged to perform work on a Segment, to comply with the provisions of Section 1777.5 of the California Labor Code with respect to all apprenticeable occupations upon the project.
(e) In performing its obligations under this Acquisition Agreement, the Developer shall comply with, or cause to be complied with, the applicable nondiscrimination and affirmative action provisions of the laws of the United States of America, the State and the City.

In performing its obligations under this Acquisition Agreement, the Developer shall not discriminate in its employment practices against any employee, or applicant for employment, because of such person’s race, religion, national origin, ancestry, sex, sexual orientation, age, physical handicap, marital status or medical condition. The Developer shall require that any contract for the construction of any Segment subject the contractor thereunder to the provisions of this subsection.
(f) The Developer shall require that each contractor, subcontractor, vendor, equipment operator and owner operator, in each such case to the extent such Person is engaged to perform work on a Segment, provide proof of insurance coverage satisfying the requirements of Section 3.7 hereof throughout the term of the construction of such Segment; provided, however, that, rather than requiring such contractors, subcontractors, vendors, equipment operators and owner operators to provide such insurance, the Developer may provide the same for the benefit of such contractors, subcontractors, vendors, equipment operators and owner operators.
(g) The Developer shall comply, and shall cause each contractor, subcontractor, vendor, equipment operator and owner operator, in each such case to the extent such Person is engaged to perform work on a Segment, to comply, with such other requirements relating to the construction of the Segments as the City may impose by written notification delivered to the Developer, to the extent legally required as a result of changes in applicable federal, State or City laws.
(h) The Developer shall require, and the specifications and bid and contract documents shall require, all contractors, subcontractors, vendors, equipment operators and owner operators, in each such case to the extent such Persons are engaged to perform work on a Segment, to submit certified weekly payroll records to the Developer for inspection by the City, and to furnish certified payroll records to the City promptly upon request.

The Developer shall provide proof to the City, at such intervals and in such form as the City may reasonably require, that the foregoing requirements have been satisfied as to all of the Segments for which a Payment Request is submitted pursuant hereto. 1961
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Section 3.4. Bonding Requirements. Prior to the commencement of construction of a Segment, the Developer shall secure, or shall cause each contractor, subcontractor, vendor, equipment operator and owner operator, in each such case to the extent such Person is engaged to perform work on such Segment to secure, appropriate bonds for the construction and completion of construction of such Segment, a faithful performance bond and a bond for the security of laborers and materialmen, each in an amount that is equal to 100% of the contract price for such Segment. If any such bonds for a Segment are provided by such a contractor, subcontractor, vendor, equipment operator or owner operator, the City shall be named as an additional insured on such bonds. Each issuer of any such bond shall be duly authorized to issue such bond in the State. Each such bond shall comply with the provisions of California Government Code Sections 66499.1 and 66499.2.

Section 3.5. Inspection; Completion of Construction. The City shall have primary responsibility for providing inspection of the work of construction of the Segments to ensure that the work of construction is accomplished in accordance with the Plans. The City’s personnel shall have access to the site of the work of construction at all reasonable times for the purpose of accomplishing such inspection. Upon the completion of the construction of a Segment to the satisfaction of the City’s inspectors, the Developer shall notify the City and the City Engineer in writing that the construction of such Segment has been completed in accordance with the Plans.

No later than ten days after receiving notification pursuant to Section 2.2(b) or Section 2.2(c) hereof that a Segment was constructed in accordance with the Plans therefor, the Developer shall forthwith file with the San Bernardino County Recorder a Notice of Completion, in form acceptable to the City Engineer, pursuant to the provisions of Section 3093 of the California Civil Code, if applicable. The Developer shall furnish to the City a duplicate copy of each such Notice of Completion showing thereon the date of filing with said County Recorder.

Section 3.6. Maintenance of Facilities; Warranties. The Developer shall maintain each Segment in good and safe condition until the Acceptance Date of the Component of which such Segment is a part. Prior to the Acceptance Date of the Component of which such Segment is a part, the Developer shall be responsible for maintaining such Segment in proper operating condition, and shall perform such maintenance on such Segment as the City Engineer reasonably determines to be necessary. As of the Acceptance Date of the Component of which a Segment is a part, the Developer shall assign to the City all of the Developer’s rights in any warranties, guarantees, maintenance obligations or other evidence of contingent obligations of third Persons with respect to such Segment. The Developer shall warrant each Segment to be free from construction defects (and shall correct or cause to be corrected any such defects) for a period of one year from the Acceptance Date of the Component of which such Segment is a part, or alternatively, shall provide a bond reasonably acceptable in form and substance to the City and the Developer for such period and such purpose to ensure that such defects that appear within said period will be repaired, replaced or corrected by the Developer, at its own cost and expense, to the reasonable satisfaction of the City. The Developer shall continue to repair, replace or correct any such defects within 30 Days after written notice thereof by the City to the Developer, and shall complete such repairs, replacement or correction as soon as practicable.

Section 3.7. Insurance Requirements. The Developer shall, at all times prior to the final Acceptance Date of all Segments, maintain, deliver to the City and keep in full force and 1962
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effect, the following insurance policies or, pursuant to Section 3.3(f) hereof, cause each contractor, subcontractor, vendor, equipment operator and owner operator, in each such case to the extent such Person is engaged to perform work on a Segment, to so maintain, deliver and keep the same in full force and effect:
(a) a protective liability policy providing for not less than the following amounts:

Bodily Injury $1,000,000 each person
$2,000,000 each occurrence
$1,000,000 each accident for
products and completed operations
Property Damage $1,000,000 each accident
Workers’ Compensation Statutory, with a waiver of
subrogation in favor of the City
(b) Automobile Liability Insurance to include all owned, non-owned or nonhired vehicles, including loading and unloading thereof:

Automobile Bodily Injury $1,000,000 each person
$2,000,000 each occurrence
Automobile Property Damage $1,000,000 each accident
Each liability insurance policy shall bear an endorsement or shall have attached a rider whereby it is provided that, in the event of expiration or proposed cancellation of such policy for any reason whatsoever, the City shall be notified by registered mail, return receipt requested, giving a sufficient time before the date thereof to comply with any applicable law or statute, but in no event less than 30 days before expiration or cancellation is effective.

The following statement shall be included on the insurance certificate:

Additional Insured: The insurer agrees that the City, its City Council, and/or all City Council appointed groups, committees, boards and any other City Council appointed body, and/or elective and appointive officers, servants, agents or employees of the City, when acting as such, are additional insureds hereunder, for the acts of the insured, and such insurance shall be primary to any insurance of the City.

The Developer may effect such coverage under blanket insurance policies; provided, however, that (a) such policies are written on a per occurrence basis, (b) such policies comply in all other respects with the provisions of this Section, and (c) the protection afforded the City under any such policy shall be no less than that which would be available under a separate policy relating only to the Segments. All policies of insurance shall be with companies licensed or approved by the California Commissioner of Insurance and rated A-VII or better in the most recent edition of Best’s Insurance Guide and shall be issued and delivered in accordance with State law and regulations.
1963
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If the Developer fails to maintain or cause to be maintained any insurance required hereby, the City may, but shall not be obligated to, procure such insurance and recover the amount of the premiums therefor from the Developer or retain such amount from any monies due to the Developer under this Acquisition Agreement. The failure of the City to procure any such insurance shall in no way relieve the Developer of any of its obligations under this Acquisition Agreement.

Section 3.8. Ownership of Facilities. Notwithstanding the fact that some or all of the Facilities may be constructed in dedicated street rights-of-way or on property that has been or will be dedicated to the City, the Facilities shall be and remain the property of the Developer until title thereto is conveyed to and accepted by the City as provided herein and in the Conditions of Approval. Such ownership by the Developer shall likewise not be affected by any agreement that the Developer may have entered into or may enter into with the City pursuant to the provisions of the Subdivision Map Act, Section 66410 et seq. of the California Government Code, and the provisions of this Section and the Conditions of Approval shall control. 1964
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION Section 4.1. Representations and Warranties of the Developer. The Developer makes the following representations and warranties for the benefit of the City:
(a) Organization. The Developer represents and warrants that the Developer is a limited liability company duly organized, validly existing and in good standing under the laws of the State, is authorized to conduct business and is in good standing under the laws of the State, and has the power and authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated. (b) Authority. The Developer represents and warrants that the Developer has the power and authority to enter into this Acquisition Agreement, and has taken all action necessary to cause this Acquisition Agreement to be executed and delivered, and this Acquisition Agreement has been duly and validly executed and delivered on behalf of the Developer.
(c) Binding Obligation. The Developer represents and warrants that this Acquisition Agreement is a valid and binding obligation of the Developer and is enforceable against the Developer in accordance with its terms, subject to bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights in general and by general equity principles.
(d) Environmental Matters Relating to Segments. The Developer represents and warrants that none of the Developer, any Affiliate of the Developer, or any subcontractor, agent or employee of the Developer or an Affiliate thereof, has used, generated, manufactured, procured, stored, released, discharged or disposed of (whether accidentally or intentionally) any Hazardous Material on, under or in any Segment or the Related Property of such Segment, or transported (whether accidentally or intentionally) any Hazardous Material to or from such Segment or such Related Property, in violation of any federal, state or local law, ordinance, regulation, rule or decision regulating Hazardous Material.

The Developer represents and warrants that, as of the Acceptance Date of each Segment, there will not be present on, under or in such Segment or the Related Property of such Segment, or any portion thereof, any Hazardous Materials, except for (i) any types or amounts that do not require remediation or mitigation under federal, state or local laws, ordinances, regulations, rules or decisions, (ii) those that have been remediated or mitigated in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, or (iii) those with respect to which ongoing remediation or mitigation is being performed in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions.

The Developer represents and warrants that neither the Developer nor any Affiliate thereof has received notice of, and, to the best of the Developer’s knowledge, 1965
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there is not, any proceeding or formal inquiry by any governmental authority, body or agency with respect to the presence of Hazardous Materials on, under or in any Segment or the Related Property of such Segment, or any portion thereof, or any structure, fixtures, equipment or other objects thereon, or the migration thereof from or to other property.

Section 4.2. Covenants of the Developer. The Developer makes the following covenants for the benefit of the City:
(a) Completion of Segments. The Developer covenants that it will use its reasonable and diligent efforts to do all things that may be lawfully required of it in order to cause the Segments to be completed in accordance with this Acquisition Agreement and the Conditions of Approval.
(b) Compliance with Laws. The Developer covenants that, while any of the Facilities are owned by the Developer or required pursuant to this Acquisition Agreement to be maintained by the Developer, it will not commit, suffer or permit any of its agents, employees or contractors to commit any act to be done in, upon or to such Facilities in violation in any material respect of any law, ordinance, rule, regulation or order of any governmental authority or any covenant, condition or restriction now or hereafter affecting such Facilities or the Property on, in or over which such Facilities are located. (c) Payment Requests. The Developer covenants that (i) it will not request payment pursuant to this Acquisition Agreement for the acquisition of any improvements that are not part of a Segment, and (ii) it will diligently follow all procedures set forth in this Acquisition Agreement with respect to Payment Requests. (d) Financial Records. Until the Acceptance Date of the last Segment accepted by the City pursuant hereto, the Developer covenants to maintain proper books of record and account for the Facilities and all costs related thereto. The Developer covenants that such accounting books will be maintained in accordance with generally accepted accounting principles and will be available for inspection by the City within a reasonable time after the City submits a written request to the Developer requesting that such books be made available for inspection.
(e) Environmental Matters Relating to Segments. The Developer covenants that none of the Developer, any Affiliate of the Developer or any subcontractor, agent or employee thereof, will use, generate, manufacture, procure, store, release, discharge or dispose of (whether accidentally or intentionally) at any time on or prior to the Acceptance Date of each Segment any Hazardous Material on, under or in such Segment or the Related Property of such Segment, or transport (whether accidentally or intentionally) any Hazardous Material to or from such Segment or such Related Property, in violation of any federal, state or local law, ordinance, regulation, rule or decision regulating Hazardous Material in effect at the time of such use, generation, manufacturing, procurement, storage, release, discharge, disposal or transportation. 1966
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(f) Permits. The Developer covenants that it will obtain all governmental or other permits required to proceed with the construction of the Facilities, and that it will pay all fees relating thereto that are required to be paid, in accordance with the Conditions of Approval.

Section 4.3. Covenants of the City. The City makes the following covenants for the benefit of the Developer:
(a) Completion of Segments. The City covenants that it will use its reasonable and diligent efforts to take all actions that may be lawfully required of it in issuing permits, processing and approving Plans and inspecting the Segments in accordance with this Acquisition Agreement.
(b) Payment Requests. The City covenants that it will diligently follow all procedures set forth in this Acquisition Agreement with respect to Payment Requests. (c) Developer Acquisition Account. The City covenants (i) that, if the Special Tax is to be levied and collected prior to the issuance of Bonds, the City will, at or prior to the first receipt of proceeds of the Special Tax, establish the Developer Acquisition Account, (ii) that the City will deposit the Net Proceeds received prior to the issuance of Bonds in the Developer Acquisition Account, and (iii) that upon the issuance of Bonds, the City will transfer or cause to be transferred any Net Proceeds remaining in the Developer Acquisition Account to the Trustee for deposit in the Developer Acquisition Account established under the Indenture.
(d) Accounting. The City covenants to provide the Developer, within 30 days following the Developer’s written request, an accounting of the Developer Acquisition Account, showing the current balance therein and all deposits thereto and disbursements therefrom since the last such accounting. The Developer shall not make more than two such written requests in any calendar year.

Section 4.4. Indemnification. The Developer agrees to protect, indemnify, defend and hold the City and the Community Facilities District, and its respective officers, employees and agents (the “Indemnified Parties”), and each of them, harmless from and against any and all claims, losses, expenses, suits, actions, decrees, judgments, awards, attorney’s fees and court costs that any Indemnified Party may suffer or that may be sought against or recovered or obtained from any Indemnified Party as a result of or by reason of or arising out of or in consequence of (a) the acquisition, construction, installation or financing of the Facilities, (b) the untruth or inaccuracy of any representation or warranty made by the Developer in this Acquisition Agreement or in any certifications delivered by the Developer pursuant hereto or in connection with the issuance of any Bonds, (c) the release, threatened release, storage, treatment, transportation or disposal (as such terms are defined in applicable law) of any Hazardous Materials on, under, in, from or to any portion of the Property while such portion of the Property is owned by the Developer or an Affiliate thereof, and (d) any act or omission of the Developer, any Affiliate of the Developer or any of their subcontractors, or their respective officers, employees or agents, in connection with the Facilities, including noncompliance with any covenants made by the Developer in this Acquisition Agreement. If the Developer fails to do so, 1967
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the Indemnified Party shall have the right, but not the obligation, to defend the same and charge all of the direct or incidental costs of such defense, including any fees or costs, to and recover the same from the Developer.

Upon receipt by an Indemnified Party of notice of any claim, loss, expense, suit, action, decree, judgment or award for which the Developer is obligated to protect, indemnify, defend and hold such Indemnified Party harmless pursuant to this Section, such Indemnified Party shall promptly notify the Developer in writing of such claim, loss, expense, suit, action, decree, judgment or award. Neither the Developer nor an Indemnified Party shall, without the other’s written consent, settle, compromise or consent to the entry of judgment with respect to any claim, suit or action for which the Developer is obligated to protect, indemnify, defend and hold such Indemnified Party harmless pursuant to this Section.

No indemnification is required to be paid by the Developer for any claim, loss or expense (a) arising from the willful misconduct or negligence of an Indemnified Party, or (b) arising from the use or operation of a Segment after the Acceptance Date of the Component of which such Segment is a part, unless such claim, loss or expense results from the defective or improper design, construction or installation of such Segment.

The provisions of this Section shall survive the termination of this Acquisition Agreement.
1968
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ARTICLE V
EVENTS OF DEFAULT AND REMEDIES; FORCE MAJEURE
Section 5.1. Developer Events of Default. The following shall be Developer Events of Default:
(a) the Developer shall voluntarily file for reorganization or other relief under any Federal or state bankruptcy or insolvency law;
(b) the Developer shall have any involuntary bankruptcy or insolvency action filed against it, or shall suffer a trustee in bankruptcy or insolvency or receiver to take possession of the assets of the Developer, or shall suffer an attachment or levy of execution to be made against its property unless, in any of such cases, such action, possession, attachment or levy shall have been terminated or released within 60 days after the commencement thereof;
(c) except to the extent that the Developer’s obligation to construct or cause to be constructed the Facilities is excused pursuant to Section 5.5 hereof, the Developer shall abandon construction of the Facilities that, as of the time of such abandonment, the Developer is required to construct or cause to be constructed in accordance with the Conditions of Approval (failure for a period of three consecutive months or failure for two periods of two consecutive months to undertake substantial work related to the construction of the Facilities shall constitute a non-exclusive example of such abandonment);
(d) the Developer shall breach any covenant or default in the performance of any obligation under this Acquisition Agreement and such breach or default shall have continued for a period of 60 days after written notice thereof, specifying such breach or default and requiring the same to be remedied, shall have been given to the Developer by the City; provided, however, that, if in the reasonable opinion of the City such breach or default can be corrected, but not within such 60 day period, such breach or default shall not constitute a Developer Event of Default if corrective action is instituted by the Developer within such 60 day period and the Developer thereafter diligently and in good faith cures such breach or default in a period of time reasonably determined by the City to be appropriate under the circumstances;
(e) any representation or warranty of the Developer set forth herein or in any certifications delivered by the Developer hereunder shall prove to have been false or misleading in any material respect when made or deemed made; (f) the Developer shall transfer any of its rights or obligations under this Acquisition Agreement, without the prior written consent of the City, as provided in Section 6.3 hereof;
(g) the Developer shall have made any material misrepresentation or material omission in any written materials furnished in connection with any preliminary official 1969
22 4165-9032-9166.3
statement, official statement or bond purchase contract that has not been corrected and is used in connection with the sale of any Bonds;
(h) the Developer, any Affiliate thereof or any permitted assign or successorin-interest under this Acquisition Agreement shall at any time bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body that in any way seeks to challenge or overturn the Community Facilities District, the levy of the Special Tax in accordance with the Rate and Method or the validity of the Bonds or the proceedings leading up to their issuance; provided, however, that the Developer, any Affiliate thereof or any permitted assign or successor-in-interest under this Acquisition Agreement that owns any of the Property may bring an action or suit contending that the Special Tax has not been levied in accordance with the methodology contained in the Rate and Method; (i) the Developer shall materially fail to complete the Facilities as contemplated by this Acquisition Agreement and the Conditions of Approval and such failure shall have continued for a period of 60 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the Developer by the City; provided, however, that, if in the reasonable opinion of the City such failure can be corrected, but not within such 60 day period, such failure shall not constitute a Developer Event of Default if corrective action is instituted by the Developer within such 60 day period and the Developer thereafter diligently and in good faith cures such breach or default in a period of time reasonably determined by the City to be appropriate under the circumstances; or
(j) the Developer, any Affiliate thereof or any permitted assign or successorin-interest under this Acquisition Agreement that owns any of the Property on which the Special Tax has been levied shall fail to pay such Special Tax as and when due and such failure shall have continued for a period of 60 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the Developer by the City.

Section 5.2. Remedies for Developer Events of Default. (a) If a Developer Event of Default described in subsection (a), (b) or (h) of Section 5.1 hereof occurs, this Acquisition Agreement shall automatically terminate.
(b) If a Developer Event of Default described in subsection (c), (d), (e), (f), (g), (i) or (j) of Section 5.1 hereof occurs and is continuing, the City may terminate this Acquisition Agreement by delivering a written notice of such termination to the Developer. (c) If a Developer Event of Default occurs and is continuing, the City may pursue any other remedy at law or equity available with respect thereto. (d) If this Acquisition Agreement is terminated pursuant to this Section, the City may, but shall not be obligated to, complete the acquisition, construction and installation of any Segment not theretofore acquired from the Developer pursuant hereto, and the City may use all or any portion of the monies in the Developer Acquisition Account to pay for such acquisition, 1970
23 4165-9032-9166.3
construction and installation. In the event of such termination, the Developer shall have no claim or right to any further payment of the Purchase Price of any Segment.

Section 5.3. City Events of Default. The following shall be City Events of Default:
(a) the City shall voluntarily file for reorganization or other relief under any Federal or state bankruptcy or insolvency law;
(b) the City shall have any involuntary bankruptcy or insolvency action filed against it, or shall suffer a trustee in bankruptcy or insolvency or receiver to take possession of the assets of the City, or shall suffer an attachment or levy of execution to be made against its property, in any of such cases, such action, possession, attachment or levy shall have been terminated or released within 60 days after the commencement thereof;
(c) the City shall breach any covenant or default in the performance of any obligation under this Acquisition Agreement and such breach or default shall have continued for a period of 60 days after written notice thereof, specifying such breach or default and requiring the same to be remedied, shall have been given to the City by the Developer; provided, however, that, if in the reasonable opinion of the Developer such breach or default can be corrected, but not within such 60 day period, such breach or default shall not constitute a City Event of Default if corrective action is instituted by the City within such 60 day period and the City thereafter diligently and in good faith cures such breach or default in a period of time reasonably determined by the Developer to be appropriate under the circumstances;
(d) any representation or warranty of the City set forth herein shall prove to have been false or misleading in any material respect when made; and (e) the City shall transfer any of its respective rights or obligations under this Acquisition Agreement, without the prior written consent of the Developer, as provided in Section 6.3 hereof.

Section 5.4. Remedies for City Events of Default. (a) If a City Event of Default occurs and is continuing, the Developer may terminate this Acquisition Agreement by delivering a written notice of such termination to the City.
(b) If a City Event of Default occurs and is continuing, the Developer may pursue any other remedy at law or equity available with respect thereto; provided, however, that the City shall not be liable in damages to the Developer. In light of the foregoing, the Developer shall not sue for or claim any damages for any alleged breach of, or dispute that arises out of, this Acquisition Agreement.
(c) The Developer understands and acknowledges that the City would not have entered into this Acquisition Agreement if it were to be liable in damages under or with respect to this Acquisition Agreement. Any and all obligations of the City hereunder shall be payable only from amounts on deposit in the Developer Acquisition Account. The City shall have no 1971
24 4165-9032-9166.3
pecuniary liability under this Acquisition Agreement for any act or omission of the City, except as set forth in this Section.

Section 5.5. Force Majeure. (a) Except as may be specifically provided in this Acquisition Agreement, the performance by the City or the Developer of its respective obligations hereunder shall be excused during, and the period of time for performance of its respective obligations hereunder shall be extended for a period of time equal to, any period of delay caused by reason of (i) acts of God or civil commotion, (ii) riots, strikes, picketing or other labor disputes, (iii) shortages of materials or supplies, (iv) damage to work in progress by reason of fire, floods, earthquakes or other casualty, (v) enactment of laws that prevent or preclude compliance by the City or the Developer with a material provision of this Acquisition Agreement, (vi) administrative proceedings challenging the Community Facilities District, any Bonds, this Acquisition Agreement or a Payment Request brought by Persons other than the City or the Developer, or any Affiliate thereof, (vii) litigation, including the pendency thereof, brought by Persons other than the City or the Developer, or any Affiliate thereof, including litigation challenging the Community Facilities District, the development of the Property, any Bonds, this Acquisition Agreement or a Payment Request, (viii) pendency of initiatives or referenda affecting the Community Facilities District, the development of the Property, the Bonds, this Acquisition Agreement or a Payment Request, or (ix) any other cause beyond the reasonable control of the City or the Developer, respectively; provided, however that, as to any party (A) the financial inability of such party itself to perform under this Acquisition Agreement, and (B) the negligence or willful misconduct of such party shall not constitute a permitted delay for purposes of this Section and, provided, further, that any action, omission, or failure to approve a Payment Request, or the imposition of additional requirements or restrictions in connection therewith by the City, caused by the Developer’s actual failure to comply with applicable laws or regulations or the provisions of this Acquisition Agreement (other than an actual failure to comply that results from the enactment of laws that prevent or preclude compliance by a party with a material provision of this Acquisition Agreement, administrative proceedings challenging the Community Facilities District, any Bonds, this Acquisition Agreement, a Payment Request, litigation brought by Persons other than a party hereto, or an Affiliate of a party hereto, including litigation challenging the Community Facilities District, the development of the Property, any Bonds, this Acquisition Agreement, a Payment Request, or initiative or referenda affecting the Community Facilities District, the development of the Property, any Bonds, this Acquisition Agreement, a Payment Request), shall not constitute a permitted delay for the Developer for purposes of this Section. (b) If the City or the Developer shall claim that performance of its respective obligations hereunder is excused by a permitted delay pursuant to this Section, such party shall give the other party hereto written notice of the commencement of such permitted delay within 30 days after first gaining knowledge of such permitted delay. (c) If the City or the Developer shall claim that performance of its respective obligations hereunder is excused by a permitted delay pursuant to this Section, such party’s performance shall only be excused during, and the period of time for performance of its obligations hereunder shall only be extended for a period of time equal to, the period of time for which the cause of such permitted delay is in effect and is actually causing a delay in performance by such party of its obligations hereunder. 1972
25 4165-9032-9166.3
(d) The City and the Developer shall act diligently and in good faith to avoid foreseeable delays in performance and to remove the cause of any permitted delay under this Section or develop a reasonable alternative means of performance of its respective obligations hereunder.
1973
26 4165-9032-9166.3

ARTICLE VI

MISCELLANEOUS
Section 6.1. Developer as Independent Contractor. Each of the City and the Developer hereby acknowledges and agrees that the Developer, in performing its obligations under this Acquisition Agreement, is acting as an independent contractor and not an agent of the City. The City shall not have any responsibility for payment to any contractor, subcontractor or supplier of the Developer.

Section 6.2. Other Agreements. Nothing contained herein shall be construed as affecting the City’s or the Developer’s respective duty to perform its respective obligations under other agreements, land use regulations or subdivision requirements relating to the development of the Property, which obligations are and shall remain independent of the Developer’s rights and obligations, and the City’s rights and obligations, under this Acquisition Agreement; provided, however, that the Developer shall use its reasonable and diligent efforts to perform each and every covenant to be performed by it under any lien or encumbrance, instrument, declaration, covenant, condition, restriction, license, order or other agreement, the nonperformance of which could reasonably be expected to materially and adversely affect the acquisition, construction and installation of the Segments.

Section 6.3. Binding on Successors and Assigns. Neither this Acquisition Agreement nor the duties and obligations of the Developer hereunder may be assigned to any Person without the written consent of the City, which consent shall not be unreasonably withheld, conditioned or delayed. Neither this Acquisition Agreement nor the duties and obligations of the City hereunder may be assigned to any Person, without the written consent of the Developer, which consent shall not be unreasonably withheld, conditioned or delayed. The agreements and covenants included herein shall be binding on and inure to the benefit of any partners, permitted assigns, and successors-in-interest of the parties hereto.

Section 6.4. Amendments. This Acquisition Agreement may be amended, supplemented or otherwise modified only by an instrument in writing executed and delivered by the City and the Developer.

Section 6.5. Waivers. No waiver of, or consent with respect to, any provision of this Acquisition Agreement by a party hereto shall in any event be effective unless the same shall be in writing and signed by such party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.

Section 6.6. Third-Party Beneficiaries. The Community Facilities District shall be a third-party beneficiary hereof. No other Person shall be deemed to be a third-party beneficiary hereof, and nothing in this Acquisition Agreement, either express or implied, is intended to confer upon any Person, other than the City, the Developer and the Community Facilities District and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Acquisition Agreement.
1974
27 4165-9032-9166.3
Section 6.7. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other party in writing from time to time, namely:

City: City of Ontario
303 East “B” Street
Ontario, California 91764
Attention: Executive Director of Finance
Developer: Lennar Homes of California, LLC
4140 Temescal Canyon Road, Suite 410
Corona, California 92883
Attention: Geoffrey Smith, Vice President
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (c) if given by electronic mail, on the date sent, but only if confirmation of the receipt of such electronic mail is received or if notice is concurrently sent by another means specified herein, and (d) if given by any other means, upon delivery at the address specified in this Section.

Section 6.8. Attorneys’ Fees. If any action is instituted to interpret or enforce any of the provisions of this Acquisition Agreement, the party prevailing in such action shall be entitled to recover from the other party thereto reasonable attorney’s fees and costs of such suit (including both prejudgment and postjudgment fees and costs) as determined by the court as part of the judgment.

Section 6.9. Severability. If any term or provision of this Acquisition Agreement, or the application of the term or provision to any Person or circumstance is, to any extent, held to be invalid or unenforceable in any jurisdiction, but the extent of such invalidity or unenforceability does not destroy the basis of the bargain between the parties as contained herein, the remainder of this Acquisition Agreement, or the application of the term or provision to Persons or circumstances other than those as to which the term or provision is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability, and each remaining term or provision of this Assignment Agreement shall be valid and will be enforced to the fullest extent permitted by law.

Section 6.10. Governing Law. This Acquisition Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State.

Section 6.11. Jurisdiction and Venue. Each of the City and the Developer (a) agrees that any suit, action or other legal proceeding arising out of or relating to this Acquisition Agreement shall be brought in a state or local court in the County of San Bernardino or in the 1975
28 4165-9032-9166.3
Courts of the United States of America in the district in which said county is located, (b) consents to the jurisdiction of each such court in any such suit, action or proceeding, and (c) waives any objection that it may have to the laying of venue of any suit, action or proceeding in any of such courts and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. Each of the City and the Developer agrees that a final and non-appealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

Section 6.12. Electronic Signature. Each of the parties hereto agrees that the transaction consisting of this Acquisition Agreement may be conducted by electronic means.

Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Acquisition Agreement using an electronic signature, it is signing, adopting and accepting this Acquisition Agreement and that signing this Acquisition Agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this Acquisition Agreement on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Acquisition Agreement in a usable format.

Section 6.13. Counterparts. This Acquisition Agreement may be executed in counterparts, each of which shall be deemed an original.

Section 6.14. Effective Date. This Acquisition Agreement has been dated for convenience purposes only. Notwithstanding the stated date of this Acquisition Agreement, this Acquisition Agreement shall be effective on the Effective Date.

IN WITNESS WHEREOF, the parties hereto have executed this Acquisition Agreement as of the day and year first hereinabove written.

CITY OF ONTARIO
By:

Scott Ochoa, City Manager

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

Geoffrey Smith, Vice President
1976
A-1
4165-9032-9166.3

EXHIBIT A

FACILITIES
The Facilities consist of the following Components and Segments; provided, however, that each such Segment described below shall constitute a Segment for purposes of this Acquisition Agreement only if such Segment was constructed by or on behalf of the Developer singly and not jointly or in conjunction with another Member or NMC Builders:

Storm Drain System Facilities
No.

DIF Program
Project No. Component Segment
SD-1 N/A Storm Drain
Facilities
Storm Drain in Grand Park Street from
Archibald Avenue to Broadway Avenue
Water and Recycled Water System Facilities
No.

DIF Program
Project No. Component Segment
WT-1 N/A Water System
Facilities
8 to 12 inch Water Line in Grand Park Street
from Archibald Avenue to Turner Avenue
WT-2 N/A Water System
Facilities
8 to 12 inch Water Line in Broadway Avenue
from Ontario Ranch Road to Grand Park Street
WT-3 N/A Water System
Facilities
6 inch Recycled Water Line in Grand Park Street
from Archibald Avenue to Turner Avenue
WT-4 N/A Water System
Facilities
6 inch Recycled Water Line in Broadway
Avenue from Ontario Ranch Road to 450 linear
feet S/O Ontario Ranch Road
1977
A-2
4165-9032-9166.3
Streets and Traffic Circulation System Facilities
No.

DIF Program
Project No. Component Segment
ST-1 ST-024 Ontario Ranch
Traffic Control
System
Signalized Intersection at Archibald Avenue and
Grand Park Street
ST-2 ST-024 Ontario Ranch
Traffic Control
System
Signalized Intersection at Ontario Ranch Road
and Broadway Avenue
ST-3 ST-025 Non-Developer
ROW, Frontage
Improvements
Construct the full width street improvements
including curb adjacent lane improvements and
full frontage improvements on Grand Park Street
along the 1,600 LF of future high school
frontage between Broadway Avenue and Turner
Avenue
ST-4 N/A Street System
Facilities
Construct the full width street improvements
including curb adjacent lane improvements and
full frontage improvements on Broadway
Avenue, from Ontario Ranch Road to Grand
Park Street
ST-5 Last Lane Construction of
last lane
improvements
Construction of last-lane street improvements
along Tract frontage of Ontario Ranch Road to
achieve ultimate half-width. Appropriate
pavement transitions shall be designed. These
improvements shall include, but not be limited
to, concrete curb and gutter, sidewalk, street
lights, and signing and striping
ST-6 Last Lane Construction of
last lane
improvements
Construction of last-lane street improvements
along Archibald Avenue from Eucalyptus
Avenue to Ontario Ranch Road to achieve
ultimate half-width. Appropriate pavement
transitions shall be designed. These
improvements shall include, but not be limited
to, concrete curb and gutter, sidewalk, street
lights, and signing and striping
ST-7 Neighborhood
Edge
Neighborhood
edge
improvements
Construction of neighborhood edge, landscaping,
multi-purpose trail, and public improvements in
the right-of-way along Tract frontage of Ontario
Ranch Road
1978
A-3
4165-9032-9166.3
Streets and Traffic Circulation System Facilities
ST-8 Neighborhood
Edge
Neighborhood
edge
improvements
Construction of neighborhood edge, landscaping,
and public improvements in the right-of-way
along Archibald Avenue from Grand Park
Avenue to Ontario Ranch Road
ST-9 Neighborhood
Edge
Neighborhood
edge
improvements
Construction of neighborhood edge, landscaping,
and public improvements in the right-of-way
along Grand Park Avenue from Archibald
Avenue to Turner Avenue
Fiber Optic System Facilities
No.

DIF Program
Project No. Component Segment
FO-1 FO-004 Distribution
Network - Major
Streets Conduit
System
Fiber conduit in Ontario Ranch Road from
Broadway Avenue to Archibald Avenue
FO-2 FO-004 Distribution
Network - Major
Streets Conduit
System
Fiber conduit in Archibald Avenue from Ontario
Ranch Road to Eucalyptus Avenue
FO-3 N/A Fiber Optic
System Facilities
Fiber conduit in Grand Park Street from
Archibald Avenue to Broadway Avenue
FO-4 N/A Fiber Optic
System Facilities
Fiber conduit in Broadway Avenue from Ontario
Ranch Road to Grand Park Street
1979
B-1
4165-9032-9166.3

EXHIBIT B

FORM OF PAYMENT REQUEST
City of Ontario
Community Facilities District No. 65
(Falloncrest)
The City of Ontario (the “City”) and Lennar Homes of California, LLC, a California limited liability company (the “Developer”), are parties to the Acquisition and Funding Agreement, dated as of June 1, 2024 (the “Acquisition Agreement”). Capitalized undefined terms use herein shall have the meanings ascribed thereto in the Acquisition Agreement.

Pursuant to the Acquisition Agreement, the Developer hereby requests confirmation that the Segment described in Attachment A attached hereto (the “Segment”) is [Complete] [Substantially Complete] and hereby further requests approval of the Purchase Price of the Segment. In connection with this Payment Request, the Developer hereby represents and warrants to the City as follows:
(a) The person executing this Payment Request on behalf of the Developer is a Developer Representative, qualified to execute this Payment Request on behalf of the Developer and knowledgeable as to the matters set forth herein. (b) The Developer has submitted or submits herewith to the City Engineer asbuilt drawings or similar plans and specifications for the Segments for which payment is requested, and such drawings or plans and specifications, as applicable, are true, correct and complete; provided, however, that if such Segment is a Circulation System Segment, and certification is being requested that such Segment is Substantially Complete but not Complete, such drawings or plans and specifications need not be submitted to the City Engineer until certification is being requested that such Segment is Complete. (c) Each of the Segments described in Attachment A has been constructed in accordance with the Plans therefor, and in accordance with all applicable City standards and the requirements of the Acquisition Agreement, and the as-built drawings or similar Plans and specifications referenced in paragraph (b) above. (d) The true and correct Actual Cost of each Segment is set forth in Attachment A.
(e) The Developer has submitted or submits herewith to the City Engineer invoices, receipts, worksheets and other evidence of costs that are in sufficient detail to allow the City Engineer to verify the Actual Cost of each Segment for which payment is requested.
(f) There are no liens, rights to lien or attachment upon, or claims affecting the right to receive the payment requested herein that has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or 1980
B-2
4165-9032-9166.3
mechanics’ liens accruing by operation of law. Copies of lien releases for all work for which payment is requested hereunder are attached hereto. (g) No Developer Event of Default has occurred and is continuing. (h) The representations and warranties of the Developer set forth in Section 4.1 of the Acquisition Agreement are true and correct on and as of the date hereof with the same force and effect as if made on and as of the date hereof (except that no certification is made with respect to the representations and warranties contained in subsection (d) of said Section 4.1).
(i) As of the date hereof, there is not present on, under or in the Segment or the Related Property of the Segment, or any portion thereof, any Hazardous Materials, except for (i) any types or amounts that do not require remediation or mitigation under federal, state or local laws, ordinances, regulations, rules or decisions, (ii) those that have been remediated or mitigated in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, (iii) those with respect to which ongoing remediation or mitigation is being performed in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, or (iv) any types or amounts that do not present a human health risk or hazard to the public. (j) Each of the Segments described in Attachment A was constructed by or on behalf of the Developer singly and not jointly or in conjunction with another Member or NMC Builders.

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

The Developer hereby requests that the Purchase Price be paid to the Person or Persons, in the amounts, set forth in Attachment B hereto.

Date: _______________

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

Name:

Title:
1981
B-3
4165-9032-9166.3

CONFIRMATION AND APPROVAL BY THE CITY ENGINEER
[The City Engineer has (a) confirmed that the Segment described in Attachment A is Complete and was constructed in accordance with the Plans therefor, and (b) reviewed, verified and approved the Actual Cost of such Segment described in Attachment A. Such Segment is Complete and the Purchase Price therefor described in Attachment A is eligible for payment to the Developer pursuant to the Acquisition Agreement.]
[The City Engineer has (a) confirmed that the Segment described in Attachment A, which is a Circulation System Segment, is Substantially Complete and was constructed in accordance with the Plans therefor, and (b) reviewed, verified and approved the Actual Cost of such Segment described in Attachment A. Such Segment is Substantially Complete and $_________, an amount equal to 85% of the Purchase Price therefor described in Attachment A, is eligible for payment to the Developer pursuant to the Acquisition Agreement.] [The City Engineer previously confirmed that the Segment described in Attachment A was Substantially Complete, and previously indicated that $_________, an amount equal to 85% of the Purchase Price therefor described in Attachment A, was eligible for payment to the Developer pursuant to the Acquisition Agreement. The City Engineer has (a) now confirmed that such Segment is Complete and was constructed in accordance with the Plans therefor, and (b) reviewed, verified and approved the Actual Cost of such Segment described in Attachment A.

Such Segment is Complete and $_____________, an amount equal to the remaining 15% of the Purchase Price therefor described in Attachment A is eligible for payment to the Developer pursuant to the Acquisition Agreement.]
Date: _______________ CITY ENGINEER OF THE CITY OF

ONTARIO
By:
1982
B-4
4165-9032-9166.3

ATTACHMENT A
Segment Purchase Price
1983
B-5
4165-9032-9166.3

ATTACHMENT B

PURCHASE PRICE PAYMENT INSTRUCTIONS
The Developer hereby requests that the Purchase Price be paid to the Person or Persons, in the amounts, set forth below:

Payee No. 1: Pay $________/__% of the Purchase Price to ______________ by wire transfer in accordance with the following instructions:
[Insert wire transfer instructions]
Date: ________________ LENNAR HOMES OF CALIFORNIA,
LLC, a California limited liability
company
By:

Name:

Title:
_____________________
[Note: If Exhibit A to the Acquisition Agreement indicates that the Segment being acquired includes design costs that have been paid by NMC Builders, the Payment Instructions must include an instruction to pay NMC Builders the portion of the Purchase Price allocable to such design costs.]
1984

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)

FORMATION HEARING REPORT

CONTENTS
Introduction
A. Authorized Facilities and Services
B. Cost Estimate
C. Proposed Boundaries of the Community Facilities District Exhibit A – Description of Authorized Facilities and Services Exhibit B – Incidental Expenses
Exhibit C – Cost Estimate
Exhibit D – Boundary Map
Exhibit E – Supplemental Information
1985
-2-

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)
INTRODUCTION. The City Council of the City of Ontario (the “City Council”) did, pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”), on April 16, 2024, adopt a resolution entitled, “A Resolution of the City Council of the City of Ontario, California, of Intention to Establish a Community Facilities District Proposed to be Named City of Ontario Community Facilities District No. 65 (Falloncrest) and to Authorize the Levy of a Special Tax Therein” (the “ROI”). In the ROI, the City Council expressly ordered the preparation of a written formation hearing report (the “Hearing Report”) for the proposed City of Ontario Community Facilities District No. 65 (Falloncrest) (the “District”), as required by Section 53321.5 of the Act.

Section 53321.5 of the Act does direct that the Hearing Report generally contain the following:

1. A brief description of the public facilities and services by type which will, in the opinion of each officer of the City who is or will be responsible for providing one or more of the types of facilities or services proposed to be financed by the District, be required to adequately meet the needs of the District; and

2. An estimate of the fair and reasonable cost of providing such public facilities and services, including an estimate of the fair and reasonable cost of the incidental expenses proposed to be paid, including any administrative costs, and an estimate of the fair and reasonable cost of all other related expenses.

For particulars, reference is made to the ROI for the District, as previously approved and adopted by the City Council.

NOW, THEREFORE, the following data is submitted pursuant to the direction of the City Council:

A. AUTHORIZED FACILITIES AND SERVICES. A general description of the public facilities and services, and incidental expenses, are as shown in Exhibit “A” and Exhibit “B” attached hereto and hereby made a part hereof.

B. COST ESTIMATE. The cost estimates for the public facilities and services are set forth in Exhibit “C” attached hereto and hereby made a part hereof. Supplemental cost information is provided in Exhibit “E” for reference.

C. PROPOSED BOUNDARIES OF THE COMMUNITY FACILITIES DISTRICT. The proposed boundaries of the District are those properties and parcels in which special taxes may be levied to pay for the costs and expenses of the authorized public facilities and services. The proposed boundaries of the District are as shown on the boundary map recorded in Book 91 of Maps of Assessment and Community Facilities Districts at Page 58 in the office of the County Recorder for the County of San Bernardino. The boundary map is attached hereto as Exhibit “D” and hereby made a part hereof.

Dated: June 4, 2024
1986
A-1

EXHIBIT A

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)

DESCRIPTION OF AUTHORIZED FACILITIES AND SERVICES
A. Facilities to be Financed
The types of public facilities to be financed by the Community Facilities District are street and bridge improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, domestic and recycled water distribution facilities, sewer collection facilities, solid waste facilities, storm drainage facilities, park and recreation facilities and equipment, aquatic facilities and equipment, fire facilities and equipment, police facilities and equipment, library facilities and equipment, fiber optic telecommunication, wireless communication and public safety camera facilities and equipment, general governmental office, administrative and meeting facilities, and land, rights-of-way and easements necessary for any of such facilities.

B. Facilities to be Purchased
The types of public facilities to be purchased as completed facilities are street and bridge improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, domestic and recycled water distribution facilities, sewer collection facilities, solid waste facilities, storm drainage facilities, and land, rights-of-way and easements necessary for any of such facilities.

C. Services
The types of City services to be financed by the Community Facilities District are police protection services, fire protection and suppression services, ambulance and paramedic services, maintenance and lighting of parks, parkways, streets, roads and open space, flood and storm protection services, maintenance and operation of fiber optic telecommunication, wireless communication and public safety camera systems and maintenance and operation of any real property or other tangible property with an estimated useful life of five or more years that is owned by the City. 1987
B-1

EXHIBIT B

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)

INCIDENTAL EXPENSES
The incidental expenses proposed to be incurred include the following:
(a) The cost of planning and designing public facilities to be financed, including the cost of environmental evaluations of those facilities;
(b) The costs associated with the creation of the Community Facilities District, issuance of bonds, determination of the amount of taxes, collection of taxes, payment of taxes, or costs otherwise incurred in order to carry out the authorized purposes of the Community Facilities District; and
(c) Any other expenses incidental to the construction, completion, and inspection of the authorized work.
1988
C-1

EXHIBIT C

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLOMCREST)

COST ESTIMATE
A. Facilities (Special Tax A)

1. ESTIMATED COST OF FACILITIES 1 $14,648,000

2. REPLACEMENT FACILITIES $37,987,000

3. INCIDENTALS
(a) Bond Reserve Fund 2 $ 4,163,000
(b) Bond Discount/Issuance Costs 2 $ 2,328,000
(c) Capitalized Interest $ 874,000
__________
TOTAL BOND AMOUNTS NEEDED $60,000,000
1 All of the facilities may be purchased as completed facilities. 2 Assumes three series of bonds over 100 years.

B. Services (Special Tax B)
Subject to any land use changes or future annexations, the services cost estimate will not exceed the expected revenues from Residential Property and Non-Residential Property (capitalized terms as defined in the Rate and Method of Apportionment of Special Tax) within the District. However, actual revenues collected and service costs funded each Fiscal Year will depend on development that has taken place in the District, as well as service requirements and related costs. Based on current projections, revenues generated at buildout of the property in the District will be as shown in the table below. If a land use change causes the dwelling unit or building square footage estimates to change, the services cost estimate shall adjust accordingly.
1989
C-2
Land Use
Units
or
Sq. Ft.
in Tax
Zone 2
Maximum
Special Tax
Rates
Fiscal Year
2024-25 2
Maximum
Special Tax
Revenue
Fiscal Year
2024-25
Residential Property
Single Family Detached Dwelling Unit
Multiple Family Dwelling Unit
Gated Community Attached Dwelling Unit
0 362
0 $1,501.46 per Unit
$1,301.51 per Unit
$1,091.38 per Unit
$0
$471,147
$0
Non-Residential Property 0 $0.273800 per Sq. Ft. $0
Annual Services Cost Estimate 1 $471,147
1 Total incidental expenses for the services component of the CFD, estimated at $30,000, are included in the amount shown.
2 On January 1 of each Fiscal Year, commencing January 1, 2025, the Maximum Special Tax to be applied in the next Fiscal Year shall be subject to an automatic increase at a rate equal to 4.0% of the amount in effect for the prior Fiscal Year.

Note: Any residual special tax revenue from facilities Special Tax A (primarily, after debt service and District administration) may be used by the City of Ontario to pay for services in accordance with the Rate and Method of Apportionment. 1990
D-1

EXHIBIT D

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)

BOUNDARY MAP
1991
1992
E-1

EXHIBIT E

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 65
(FALLONCREST)

SUPPLEMENTAL INFORMATION
A. Developer’s Estimated Construction Costs
The following table sets forth the estimated construction costs of the public facilities expected to be financed by the District and acquired by the City from Lennar Homes of California, LLC (the “Developer”) pursuant to the Acquisition and Funding Agreement (the “Acquisition Agreement”), by and between the City and the Developer, expected to be entered into at the time of formation of the District. The estimated construction costs have been provided by the Developer. Such estimated construction costs are intended to be used solely to facilitate the acquisition process pursuant to the Acquisition Agreement and to assist in confirming the Actual Costs (as defined in the Acquisition Agreement) of the respective Segments (as defined in the Acquisition Agreement) in accordance with the Acquisition Agreement. The City has not evaluated the reasonableness of the Developer’s estimated construction costs, takes no responsibility for such estimated construction costs and, in confirming the Actual Costs of a Segment pursuant to the Acquisition Agreement, will not be bound by such estimated construction costs.

Segment
No. Segment Description
Developer’s
Estimated
Construction
Costs
SD-1 Storm Drain in Grand Park Street from Archibald Avenue to Broadway Avenue $586,363
WT-1 8 to 12 inch Water Line in Grand Park Street from Archibald Avenue to Turner Avenue $449,448
WT-2 8 to 12 inch Water Line in Broadway Avenue from Ontario Ranch Road to Grand Park Street $218,302
WT-3 6 inch Recycled Water Line in Grand Park Street from Archibald Avenue to Turner Avenue $352,033
WT-4 6 inch Recycled Water Line in Broadway Avenue from Ontario Ranch Road to 450 linear feet S/O Ontario Ranch Road $79,639 1993
E-2
ST-1 Signalized Intersection at Archibald Avenue and Grand Park Street $270,368
ST-2 Signalized Intersection at Ontario Ranch Road and Broadway Avenue $71,693
ST-3 Construct the full width street improvements including curb adjacent lane improvements and full frontage improvements on Grand Park Street along the 1,600 LF of future high school frontage between Broadway Avenue and Turner Avenue $1,366,767 ST-4 Construct the full width street improvements including curb adjacent lane improvements and full frontage improvements on Broadway Avenue, from Ontario Ranch Road to Grand Park Street $698,448 ST-5 Construction of last-lane street improvements along Tract frontage of Ontario Ranch Road to achieve ultimate half-width.

Appropriate pavement transitions shall be designed. These improvements shall include, but not be limited to, concrete curb and gutter, sidewalk, street lights, and signing and striping $498,262 ST-6 Construction of last-lane street improvements along Archibald Avenue from Eucalyptus Avenue to Ontario Ranch Road to
achieve ultimate half-width. Appropriate pavement transitions shall be designed. These improvements shall include, but not be limited to, concrete curb and gutter, sidewalk, street lights, and signing and striping $1,134,376
ST-7 Construction of neighborhood edge, landscaping, multi-purpose trail, and public improvements in the right-of-way along Tract frontage of Ontario Ranch Road $447,970
ST-8 Construction of neighborhood edge, landscaping, and public improvements in the right-of-way along Archibald Avenue from Grand Park Avenue to Ontario Ranch Road $325,561
ST-9 Construction of neighborhood edge, landscaping, and public improvements in the right-of-way along Grand Park Avenue from Archibald Avenue to Turner Avenue $71,969
FO-1 Fiber conduit in Ontario Ranch Road from Broadway Avenue to Archibald Avenue $59,054
FO-2 Fiber conduit in Archibald Avenue from Ontario Ranch Road to Eucalyptus Avenue $131,959
1994
E‐3
FO‐3 Fiber conduit in Grand Park Street from Archibald Avenue to Broadway Avenue $112,892
FO‐4 Fiber conduit in Broadway Avenue from Ontario Ranch Road to Grand Park Street $55,403
B. Anticipated Financing Priorities
Set forth below is the amount of the net proceeds of bonds of the District anticipated to be applied to each of the uses specified below. Capitalized undefined terms used below have the meanings ascribed thereto in the Amended and Restated Memorandum of Agreement, dated as of November 1, 2022, by and between the City and NMC Builders, LLC.

TIER I:  Payment of Actual Costs of
Member Specific Improvements     $6,930,507 PARK FACILITIES:  Payment of costs of
public improvements constructed
by or on behalf of the City in lieu of Park Fees   $4,876,140 TIER II:  Payment of Actual Costs of
Eligible CFD Facilities that are intended
to be acquired by the City from NMC Builders
pursuant to the NMC Acquisition Agreement   $2,841,353 1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Sean J. Baxter
E [email protected]
D +1 213 612 2171
F +1 213 612 2499
Orrick, Herrington & Sutcliffe LLP
355 South Grand Avenue
Suite 2700
Los Angeles, CA 90071
+1 213 629 2020
orrick.com
4150-5658-9391.1
42015-41
April 25, 2024
Via E-mail Only
County of San Bernardino
Elections Office of the Registrar of Voters
777 East Rialto Avenue
San Bernardino, California 92415-0770
Attn: Ms. Melissa Eickman
Re: Registered Voters in the
City of Ontario Community Facilities District No. 65 (Falloncrest) Dear Ms. Eickman:

The owners of property in the City of Ontario Community Facilities District No. 65 (Falloncrest) (“District No. 65”) have petitioned for proceedings to levy a special tax under the Mello-Roos Community Facilities Act of 1982 in District No. 65.

The boundaries of the territory within District No. 65 are identified by the following San Bernardino County Assessor Parcel Numbers:
0218-324-10 through and including 0218-324-13
0218-324-21 through and including 0218-324-22
0218-324-24 through and including 0218-324-43
0218-325-01 through and including 0218-325-54
0218-326-01 through and including 0218-326-49
0218-334-01 through and including 0218-334-81
0218-335-01 through and including 0218-335-85
0218-336-01 through and including 0218-336-48
0218-337-01 through and including 0218-337-82
Such boundaries are further shown on the enclosed boundary map. 2021
Registrar of Voters
April 25, 2024

Page 2 ends

Ontario City CouncilJune 4, 2024

Ontario City Council
June 4, 2024