Attachment A - Ordinance Levying Special Taxesc1 — Palm Springs City Council, January 14, 2026

ATTACHMENT A
Ordinance
Levying Special Taxes
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ORDINANCE NO. 2122

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY

OF PALM SPRINGS, CALIFORNIA, ACTING AS THE

LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 2025-1 (SERENA PARK) OF THE CITY OF

PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF

CALIFORNIA AUTHORIZING THE LEVY OF SPECIAL

TAXES IN SUCH COMMUNITY FACILITIES DISTRICT
AND IMPROVEMENT AREA NOS. 1, 2, 3, AND 4

THEREOF
WHEREAS, the City Council of the City of Palm Springs, California (the “City Council”), has initiated proceedings, held a public hearing, conducted an election and received a favorable vote from the qualified electors authorizing the levy of special taxes in each improvement area of the community facilities district, all as authorized pursuant to the terms and provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1. Division 2, Title 5 of the Government Code of the State of California (the “Act”).

WHEREAS, this community facilities district shall hereinafter be referred to as Community Facilities District No. 2025-1 (Serena Park) of the City of Palm Springs, County of Riverside, State of California (the “District”) and improvement areas therein designated as Improvement Area No. 1, Improvement Area No. 2, Improvement Area No. 3, and Improvement Area No. 4 (each an “Improvement Area” and together the “Improvement Areas”).

THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2025-1 (SERENA PARK), DOES HEREBY ORDAIN AS FOLLOWS:

Section 1. This City Council does, by the passage of this Ordinance, authorize the levy of special taxes on all parcels of taxable property located in the Improvement Areas of the District pursuant to the Rate and Method of Apportionment as set forth in Exhibits “A” through “D” attached hereto and incorporated herein by this reference (each a “Rate and Method” and together the “Rates and Methods”).

Section 2. This City Council, acting as the legislative body of the District, is hereby further authorized, by resolution, to annually determine the special tax to be levied within each Improvement Area of the District for the then current tax year or future tax years, commencing fiscal year 2025-26; provided, however, the special tax to be levied in the Improvement Areas shall not exceed the maximum special tax authorized to be levied pursuant to the Rate and Method for such Improvement Areas.

Section 3. The special taxes herein authorized to be levied, to the extent possible, shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem taxes. 5 3
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Ordinance No. 2122

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Section 4. The special taxes authorized to be levied shall be secured by the lien imposed pursuant to Section 3114.5 and 3115.5 of the California Streets and Highways Code, which lien shall be a continuing lien and shall secure each levy of the special taxes. The lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the special taxes ceases to be levied by the City Council.

Section 5. This Ordinance shall be effective thirty (30) days after its adoption.

Within fifteen (15) days after its adoption, the City Clerk shall cause this Ordinance to be published in a newspaper of general circulation in the City.

INTRODUCED at a regular meeting of the City Council of the City of Palm Spring
s on the 10th day of December, 2025.

PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Palm Springs on this ____ day of ________________, 202_.

NAOMI SOTO, MAYOR
ATTEST:

BRENDA PREE, CITY CLERK

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

CITY OF PALM SPRINGS )
I, BRENDA PREE, City Clerk of the City of Palm Springs, hereby certify that Ordinance No. _____ is a full, true and correct copy as was introduced at a regular meeting of the Palm Springs City Council on December 10, 2025 and adopted at a regular meeting of the City Council held on __________ by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Ordinance No. ____

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IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this ___ day of __________, 202_.

BRENDA PREE, CITY CLERK
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EXHIBIT “A”

RATE AND METHOD OF APPORTIONMENT FOR

THE CITY OF PALM SPRINGS
COMMUNITY FACILITIES DISTRICT NO. 2025-1
(SERENA PARK)

CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA IMPROVEMENT AREA NO. 1
A Special Tax (all capitalized terms are defined in Section A, “Definitions”, below) shall be applicable to each Parcel of Taxable Property located within the boundaries of Improvement Area No. 1 of the CFD.

The amount of Special Tax to be levied in each Fiscal Year, on a Parcel, shall be determined by the City Council of The City of Palm Springs, acting in its capacity as the legislative body of the CFD by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, Public Property, and/or Property Owners’ Association Property that is not Exempt Property as set forth in Sections B, C, and D, below. All of the real property within Improvement Area No. 1, unless exempted by law or by the provisions hereof in Section E, 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 acreage of a Parcel as indicated on the most recent Assessor’s Parcel Map, or if the land area is not shown on the Assessor’s Parcel Map, the land area shown on the applicable Final Map, parcel map, condominium plan, or other similar instrument. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1 of Division 2 of Title 5 of the California Government Code of the State of California. “Administrative Expenses” means all actual or reasonably estimated costs and expenses of the City related to Improvement Area No. 1 that are chargeable or allocable to carry out its duties as the administrator as allowed by the Act, which shall include without limitation, all costs and expenses arising out of or resulting from the annual levy and collection of the Special Tax, trustee fees, rebate compliance calculation fees, any litigation involving the CFD, continuing disclosure undertakings of the City as imposed by applicable laws and regulations, communication with bondholders and normal administrative expenses.
“Administrator” means an official of the City, or designee thereof, responsible for determining the annual amount of the levy and collection of the Special Taxes. “Approved Property” means all Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a Building Permit on or prior to the April 1st preceding the Fiscal Year in which the Special Tax is being levied.
“Assessor’s Parcel Map” means an official map of the Assessor of the County of Riverside designating parcels by Assessor’s Parcel number.

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“Assigned Special Tax” means the Special Tax for each Land Use Category of Developed Property, as determined in accordance with Section C.1.a., below.
“Backup Special Tax” means the Special Tax amount set forth in Section C.1.b., below. “Bonds” means any bonds or other indebtedness (as defined in the Act), whether in one or more series, issued by the CFD and secured by the levy of Improvement Area No. 1 Special Taxes. “Boundary Map” means a recorded map, as amended, of the CFD which indicates the boundaries of Improvement Area No. 1 of the CFD.
“Building Permit” means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include any subsequent building permits issued or changed after the first issuance, as determined by the Administrator.
“CFD” means Community Facilities District No. 2025-1 (Serena Park) of The City of Palm Springs established pursuant to the Act.
“City” means The City of Palm Springs.
“City Council” means the City Council of The City of Palm Springs. “County” means the County of Riverside.
“Developed Property” means all Parcels of Taxable Property that are included in a Final Map that was recorded prior to January 1st preceding the Fiscal Year in which the Special Tax is being levied and for which a Building Permit for new construction has been issued on or prior to April 1st preceding the Fiscal Year in which the Special Tax is being levied. “Dwelling Unit” or “(D/U)” means a residential unit that is offered for sale (and not for rent) that is used or permitted to be used as a domicile by one or more persons, as determined by the Administrator.
“Exempt Property” means any Parcel which is exempt from Special Taxes pursuant to Section E below.
“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285 that creates individual lots for which Building Permits may be issued without further subdivision. “Fiscal Year” means the 12 month period starting on July 1 of any calendar year and ending on the following June 30.
“Improvement Area No. 1” or “IA No. 1” means the property in the CFD designated as Improvement Area No. 1 on the Boundary Map.
“Indenture” means the bond indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.

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“Land Use Category” means any of the categories listed in Table 1. “MAI Certified Appraiser” or “Appraiser” means a certified appraiser and member of the Appraisal Institute who has met strict testing, standards and experience requirements. “Maximum Special Tax” means for each Parcel, the maximum Special Tax, determined in accordance with Section C, which can be levied in any Fiscal Year on such Parcel. “Minimum Sale Price” means the minimum price at which Dwelling Units of a given Land Use Category have sold or are expected to be sold in a normal marketing environment and shall not include prices for such Dwelling 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 Category. No incentives or discounts offered by the seller will be deducted from expected or sold home prices. “Other Property” means all Parcels of Developed Property for which a Building Permit was issued for any type of use other than Single Family Property.
“Parcel(s)” means a lot or parcel shown on an Assessor’s Parcel Map located in Improvement Area No. 1.
“Price Point Consultant” means any consultant or firm of such consultants selected by the CFD that (a) has substantial experience in performing price point studies for Residential Property within community facilities districts established under the Act or otherwise estimating or confirming pricing for Dwelling Units of Residential Property in such community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relates to the pricing of Dwelling Units of Residential Property in such community facilities districts, (c) is in fact independent and not under the control of the CFD or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) the CFD, (ii) the City, (iii) any owner of real property in the CFD, or (iv) any real property in the CFD, and (e) is not connected with the CFD or the City as an officer or employee thereof, but who may be regularly retained to make reports to the CFD or the City. “Price Point Study” means a price point study or a letter updating a previous price point study prepared by the Price Point Consultant pursuant to Section C.5 herein. “Property Owners’ Association Property” means all Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, have been conveyed, dedicated to, or irrevocably offered for dedication to a property owner association, including any master or sub-association. “Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Parcels of Approved Property, and (iii) Undeveloped Property, Public Property, and Property Owners’ Association Property, that the ratio of the actual Special Tax levy per acre to the Maximum Special Tax per acre is the same for all Parcels of Undeveloped Property, Public Property, and Property Owners’ Association Property.
“Public Property” means all Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, are used for rights-of-way or any other purpose and is owned by, dedicated to, or irrevocably offered for dedication to the federal government, the State of California, the County, or any other local jurisdiction, provided, however, that any property leased by a public agency to a A-1
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” means this Rate and Method of Apportionment of Special Tax for Improvement Area No. 1 of Community Facilities District No. 2025-1 (Serena Park) of The City of Palm Springs. “Residential Floor Area” means all of the square footage of living area of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio or similar area on a Parcel.

The determination of Residential Floor Area shall be made by reference to the original Building Permit issued for the Parcel or, if the Building Permit is not available by reference to a similar official document as selected by the Administrator.
“Residential Property” means all Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one or more Dwelling Units. “Single Family Property” means all Parcels of Residential Property. “Special Tax(es)” means the special tax to be levied in each Fiscal Year pursuant to the Rate and Method on each Parcel of Taxable Property in accordance with Section D. “Special Tax Requirement” means that amount required in any Fiscal Year: (i) to pay annual debt service on all outstanding Bonds due in the calendar year which commences in such Fiscal Year; (ii) to pay periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) to pay Administrative Expenses; (iv) to pay any anticipated shortfall due based on Special Tax delinquencies in the prior Fiscal Year; (v) to establish or replenish any reserve funds for the outstanding Bonds or with respect to Bonds expected to be issued in such Fiscal Year; (vi) until the final series of Bonds are issued as determined by the City Council, to pay directly for acquisition or construction of the facilities eligible under the Act, provided that the inclusion of such amount does not increase the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Step 2 or Step 3 of section D below; less (vii) a credit for funds available to reduce the annual Special Tax levy as determined pursuant to the Indenture as determined by the Administrator.
“Taxable Property” means all Parcels for which the Special Taxes have not been prepaid in full pursuant to Section H. or that are not exempt from the Special Tax pursuant to law or Section E. “Taxable Unit” means either a Dwelling Unit or an Acre, as shown in Table 1. “Total Tax Burden” means for any Dwelling Unit, the annual Special Tax, together with ad valorem property taxes, special assessments, special taxes for any overlapping community facilities district, and any other taxes, fees, and charges which are levied and imposed on such Dwelling Unit and the real property on which it is located and collected by the County on ad valorem tax bills and which are secured by such Dwelling Unit and the real property on which it is located, assuming such Dwelling Unit had been completed, sold, and subject to such levies and impositions, excluding PACE Charges (or any other charge entered into voluntarily by the property owner) and service charges such as those related to sewer and trash.
“Undeveloped Property” means all Parcels of Taxable Property not classified as Developed Property, Approved Property, Public Property, or Property Owners’ Association Property.

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B. ASSIGNMENT TO LAND USE CATEGORY
Each Fiscal Year, commencing with the 2026-2027 Fiscal Year, all Parcels of Taxable Property shall be classified as Developed Property, Approved Property, Undeveloped Property, Public Property, and/or Property Owners’ Association Property, and subject to the levy of Special Taxes in accordance with this Rate and Method as determined pursuant to Sections C and D.

Parcels of Developed Property shall further be classified as Residential Property or Other Property.

Parcels of Residential Property shall further be classified as Single Family Property. Parcels of Single Family Property shall be further categorized into Land Use Categories based on the Residential Floor Area for such Parcel.

C. MAXIMUM SPECIAL TAX RATE

1. Developed Property
The Maximum Special Tax for each Parcel of Single Family Property shall be the greater of: (i) the applicable Assigned Special Tax described in Table 1 or (ii) the amount derived by application of the Backup Special Tax.

The Maximum Special Tax for each Parcel of Other Property shall be the Assigned Special Tax described in Table 1.

On each July 1, commencing July 1, 2026, the Maximum Special Tax shall be increased by an amount equal to two percent (2.0%) of the amount in effect for the previous Fiscal Year. July 1, 2043 shall be the final year the Maximum Special Tax increases. Following the Fiscal Year 2043-2044, the Maximum Special Tax shall not increase from the amount in effect for Fiscal Year 2043-2044. a. Assigned Special Tax
The Assigned Special Tax for each Parcel of Developed Property is shown in Table 1.

TABLE 1
Assigned Special Taxes for Developed Property
Fiscal Year 2025-2026
Land Use Category
Taxable
Unit Residential Floor Area
Assigned Special Tax
Per Taxable Unit

1. Single Family Property D/U Less than 2,100 sq. ft. $3,825

2. Single Family Property D/U 2,100 sq. ft. – 2,299 sq. ft. $4,110

3. Single Family Property D/U Greater than 2,299 sq. ft. $4,425

4. Other Property Acre N/A $33,834
On each July 1, commencing July 1, 2026, the Assigned Special Tax shall be increased by an amount equal to two percent (2.0%) of the amount in effect for the previous Fiscal Year. July 1, 2043 shall be the final year the Assigned Special Tax increases. Following the Fiscal Year 2043-2044, the Assigned Special Tax shall not increase from the amount in effect for Fiscal Year 2043-2044.

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b. Backup Special Tax
When a Final Map is recorded, the Backup Special Tax for a Parcel classified or to be classified as Single Family Property within such Final Map shall be determined by multiplying the Undeveloped Property Maximum Special Tax per Acre by the total Acreage of Taxable Property within such Final Map, excluding the Acreage associated with (i) Public Property and/or Property Owners’ Association Property that is not Exempt Property pursuant to Section E and (ii) Other Property, , and dividing such amount by the number of Parcels within such Final Map classified as either (i) Single Family Property or (ii) Approved Property for which a Building Permit is expected to be issued for Single Family Property (i.e., the number of residential lots).

A Parcel that does not have any changes made to it after the initial assignment of the Backup Special Tax shall not be increased if other Parcels in a Final Map are changed. Prior to the issuance of Bonds, if Parcels classified or to be classified as Single Family Property are subsequently changed or modified by recordation of a lot line adjustment or similar instrument, then the Backup Special Tax shall be recalculated for the area that has been changed or modified using the methodology described in the preceding paragraph. Following the issuance of Bonds, no adjustments shall be made to the Backup Special Tax for any Parcel which would result in the reduction of debt service coverage, as projected at the time of Bond issuance.

The Backup Special Tax shall not apply to Other Property, Public Property, or Property Owners’ Association Property.

On each July 1, commencing July 1, 2026, the Backup Special Tax shall be increased by an amount equal to two percent (2.0%) of the amount in effect for the previous Fiscal Year. July 1, 2043 shall be the final year the Backup Special Tax increases. Following the Fiscal Year 2043-2044, the Backup Special Tax shall not increase from the amount in effect for Fiscal Year 2043-2044.

2. Approved Property
The Maximum Special Tax for each Parcel of Approved Property expected to be classified as Single Family Property shall be the Backup Special Tax computed pursuant to Section C.1.b above.

The Maximum Special Tax for each Parcel of Approved Property expected to be classified as Other Property shall be $33,834 per Acre.

3. Undeveloped Property
The Maximum Special Tax for each Parcel of Undeveloped Property is shown in Table 2 below.

TABLE 2
Undeveloped Property Maximum Special Tax
Fiscal Year 2025-2026
Maximum Special Tax Per Acre
$33,834
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4. Public Property and/or Property Owners’ Association Property that is not Exempt Property pursuant to the provisions of Section E.

The Maximum Special Tax for each Parcel of Public Property and/or Property Owners Association Property that is not Exempt Property shall be equal to the product of the applicable Undeveloped Property Maximum Special Tax rate per Acre in Table 2 multiplied by the Acreage of such Parcel.

5. Special Tax Reduction Prior to Issuance of First Series of Bonds.

Prior to the issuance of the first series of Bonds, the CFD shall do one of the following 1) select and engage a Price Point Consultant, where the Price Point Consultant shall prepare a Price Point Study setting forth the Minimum Sale Price of Dwelling Units within each Land Use Category of Residential Property or 2) select and engage a MAI Certified Appraiser, where the MAI Certified Appraiser shall prepare an appraisal setting forth at least the minimum market value of Dwelling Units within each Land Use Category of Residential Property. If, based upon such Price Point Study or appraisal, the Administrator calculates that the Total Tax Burden applicable to Dwelling Units within one or more Land Use Category of Residential Property to be constructed within the CFD exceeds 2.00% of the Minimum Sale Price of such Taxable Units, the Special Tax within such Land Use Category of Residential Property shall be reduced to the extent necessary to cause the Total Tax Burden applicable to Dwelling Units within such Land Use Category(ies) not to exceed 2.00% of the Minimum Sale Price of such Taxable Units. Each Special Tax reduction for a Land Use Category shall be calculated by the Administrator separately, and it shall not be required that such reduction be proportionate among Land Use Categories.

If the Special Tax for any Land Use Category is reduced pursuant to the preceding paragraph, the Administrator shall calculate a reduced Maximum Special Tax for Other Property and Undeveloped Property, as well as a reduced Backup Special Tax for Developed Property. The revised Backup Special Tax shall be equal to the Maximum Special Tax as set forth in Table 1, reduced by a percentage equal to the weighted average percentage reduction in the Special Tax for all Land Use Categories of Residential Property. The weighted average percentage will be calculated by taking the sum of the products of the number of Taxable Units constructed or expected to be constructed in each Land Use Category multiplied by the percentage change in the Special Tax for each Land Use Category (or 0 for Land Use Categories that are not changing). This amount is then divided by the total number of Dwelling Units constructed or expected to be constructed and converted to a percentage. The reduced Maximum Special Tax shall be used to compute the reduced Backup Special Tax. Following the issuance of Bonds, no adjustments shall be made to the Backup Special Tax for any Parcel which would result in the reduction of debt service coverage, as projected at the time of Bond issuance.

The Special Tax reductions, if required pursuant to this section, shall be reflected in an amended notice of Special Tax lien, which the CFD shall cause to be recorded by executing a certificate in substantially the form attached herein as Exhibit B.

D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
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Commencing with Fiscal Year 2026-2027 and for each following Fiscal Year, the City Council shall levy the Special Tax on all Taxable Property until the amount of Special Taxes equals the applicable Special Tax Requirement in accordance with the following steps:

First: The Special Tax shall be levied Proportionately on each Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax rate as needed to satisfy the Special Tax Requirement; Second: If additional moneys are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Parcel of Approved Property at up to 100% of the Maximum Special Tax for Approved Property; Third: If additional moneys are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax shall be levied Proportionately on each Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Undeveloped Property; Fourth: If additional moneys are needed to satisfy the Special Tax Requirement after the first three steps have been completed, the Special Tax to be levied on each Parcel of Developed Property for which the Maximum Special Tax is derived by the application of the Backup Special Tax shall be increased in equal percentages from the Assigned Special Tax up to the Maximum Special Tax for such Parcel;
Fifth: If additional moneys are needed to satisfy the Special Tax Requirement after the first four steps have been completed, the Special Tax shall be levied Proportionately on each Parcel of Taxable Property that is Public Property or Property Owners’ Association Property at up to 100% of the Maximum Special Tax for such Parcel.

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

E. EXEMPTIONS
The Administrator shall classify as Exempt Property all Parcels of (i) Public Property or (ii) Property Owners’ Association Property; provided that such classification shall not reduce the Acreage of all Taxable Property of the CFD to fewer than 16.07 Acres. The Administrator shall not classify a Parcel of Public Property or Property Owners’ Association Property as Exempt Property if such classification would reduce the Acreage of all Parcels of Taxable Property to fewer than 16.07 Acres. Such Parcels that cannot be classified as Exempt Property because such classification would reduce the Acreage of all Parcels of Taxable Property to fewer than 16.07 Acres will be classified as Property Owners’ Association Property or Public Property and will continue to be subject to Special Taxes. The Administrator shall classify such Parcels as Exempt Property in the chronological order in which property becomes Public Property or Property Owners’ Association Property.

F. MANNER OF COLLECTION
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The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties, the same procedure, sale and lien priority in the case of delinquency; provided, however, that the Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of Improvement Area No. 1, and provided further that the CFD may covenant to foreclose and may actually foreclose on Parcels having delinquent Special Taxes as permitted by the Act.

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

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

The City Council may interpret this Rate and Method for purposes of clarifying any ambiguity and make determinations relative to the amount of Administrative Expenses.

H. PREPAYMENT OF SPECIAL TAX
The following definitions apply to this Section H:
“CFD Public Facilities” means $9,690,276, expressed in 2025 dollars, which shall increase by the Construction Inflation Index on July 1, 2026, and on each July 1 thereafter, or such lower number as (i) shall be determined by the Administrator as sufficient to provide the public facilities under the authorized bonding program, or (ii) shall be determined by the City Council concurrently with a covenant that the CFD will not issue any more Bonds.
“Construction Fund” means, collectively, an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct public facilities eligible under the Act and any account established prior to the issuance of Bonds for such purpose. “Construction Inflation Index” means the annual percentage change in the Engineering News- Record Building Cost Index for the City of Los Angeles, measured as of the calendar year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the Administrator that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles. “Future Facilities Costs” means the CFD Public Facilities minus (i) Bond proceeds deposited in Construction Funds and accounts and (ii) other amounts (special taxes, interest earnings, etc.) A-1
allocated to Construction Funds and accounts that were available to fund such CFD Public Facilities prior to the date of prepayment, but not less than $0.
“Outstanding Bonds” means all previously issued Bonds, which will remain outstanding after the payment of principal from the amount of Special Taxes that have been levied, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Maximum Special Taxes.

1. Prepayment in Full
The Maximum Special Tax obligation may be prepaid and permanently satisfied for (i) Parcels of Developed Property, (ii) Parcels of Approved Property or Undeveloped Property for which a Building Permit has been issued, (iii) Approved Property or Undeveloped Property for which a Building Permit has not been issued, and (iv) Parcels of Public Property or Property Owners’ Association Property that are not Exempt Property pursuant to Section E. The Maximum Special Tax obligation applicable to a Parcel may be fully prepaid and the obligation to pay the Special Tax for such Parcel permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Parcel at the time of prepayment. An owner of a Parcel intending to prepay the Maximum Special Tax obligation for such Parcel shall provide the Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the Administrator shall notify such owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Parcel. Within 15 days of receipt of such non-refundable deposit, the Administrator shall notify such owner of the Prepayment Amount for the Parcel. Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be redeemed with the proceeds of such prepaid Special Taxes.

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

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:

1. Confirm that no Special Tax delinquencies apply to such Parcel.

2. For a Parcel of Developed Property, compute the Maximum Special Tax for the Parcel. For a Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax for the Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Parcel. For a Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, Public Property or Property Owners’ Association Property to be prepaid, compute the Maximum Special Tax for the Parcel.

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

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

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

6. Determine the Future Facilities Costs.

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

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

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

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

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

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

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

A-1

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

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

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

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

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

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

2. Prepayment in Part
The Maximum Special Tax obligation for a Parcel of Developed Property, Approved Property or Undeveloped Property may be partially prepaid. For purposes of determining the partial prepayment amount, the provisions of Section H.1 shall be modified as provided by the following formula:

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

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

With respect to any Parcel for which the Maximum Special Tax obligation is partially prepaid, the Administrator shall (i) distribute the Partial Prepayment as provided in Paragraph 15 of Section H.1, and (ii) indicate in the records of the CFD that there has been a Partial Prepayment for the Parcel and that a portion of the Special Tax obligation equal to the remaining percentage (1.00 - F) of Special Tax obligation will continue on the Parcel pursuant to Section D.

I. TERM OF THE SPECIAL TAX
The Special Tax shall not be levied after the 2065-2066 Fiscal Year.

J. INTERPRETATIONS
The City Council may interpret this Rate and Method by ordinance or resolution for purposes of clarifying any vagueness or ambiguity. Any decision of the City Council shall be final and binding as to all persons.

A-1
“EXHIBIT B”

CERTIFICATE OF MODIFICATION OF SPECIAL TAX
CITY OF PALM SPRINGS AND CFD NO. 2025-1 (SERENA PARK) IMPROVEMENT AREA NO. 1 CERTIFICATE Pursuant to Section C of the Rate and Method of Apportionment of Special Tax for Community Facilities District No. 2025-1 (Serena Park) of the City of Palm Springs (“CFD No. 2025-1”), the Special Tax for Residential Property and Other Property within CFD No. 2025-1 has been modified.

The information in Table 1 relating to the Special Tax for Developed Property within CFD No. 2025-1, as stated in Section C.1. of the Rate and Method of Apportionment, has been modified as follows:

Developed Property
The Maximum Special Tax for each Parcel of Single Family Property shall be the greater of: (i) the applicable Assigned Special Tax described in Table 1 or (ii) the amount derived by application of the Backup Special Tax.

The Maximum Special Tax for each Parcel of Other Property shall be the Assigned Special Tax described in Table 1.

TABLE 1
Assigned Special Taxes for Developed Property
Fiscal Year 20__-20__
Land Use Category
Taxable
Unit Residential Floor Area
Assigned Special Tax
Per Taxable Unit

1. Single Family Property D/U Less than 2,100 sq. ft. $________

2. Single Family Property D/U 2,100 sq. ft. – 2,299 sq. ft. $________

3. Single Family Property D/U Greater than 2,299 sq. ft. $________

4. Other Property Acre N/A $________
A-1

CERTIFICATE OF MODIFICATION OF SPECIAL TAX
By execution hereof, the undersigned acknowledge, on behalf of the District and CFD No. 2025-1, receipt of this certificate and modification of the Rate and Method of Apportionment of Special Tax as set forth in this certificate.

CITY OF PALM SPRINGS
IMPROVEMENT AREA NO. 1 OF COMMUNITY FACILITIES DISTRICT NO. 2025-1 (SERENA PARK) By:_________________________________ Date:______________________ B-1
EXHIBIT “B”

RATE AND METHOD OF APPORTIONMENT FOR

THE CITY OF PALM SPRINGS
COMMUNITY FACILITIES DISTRICT NO. 2025-1
(SERENA PARK)

CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA IMPROVEMENT AREA NO. 2
A Special Tax (all capitalized terms are defined in Section A, “Definitions”, below) shall be applicable to each Parcel of Taxable Property located within the boundaries of Improvement Area No. 2 of the CFD.

The amount of Special Tax to be levied in each Fiscal Year, on a Parcel, shall be determined by the City Council of The City of Palm Springs, acting in its capacity as the legislative body of the CFD by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, Public Property, and/or Property Owners’ Association Property that is not Exempt Property as set forth in Sections B, C, and D, below. All of the real property within Improvement Area No. 2, unless exempted by law or by the provisions hereof in Section E, 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 acreage of a Parcel as indicated on the most recent Assessor’s Parcel Map, or if the land area is not shown on the Assessor’s Parcel Map, the land area shown on the applicable Final Map, parcel map, condominium plan, or other similar instrument. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1 of Division 2 of Title 5 of the California Government Code of the State of California. “Administrative Expenses” means all actual or reasonably estimated costs and expenses of the City related to Improvement Area No. 2 that are chargeable or allocable to carry out its duties as the administrator as allowed by the Act, which shall include without limitation, all costs and expenses arising out of or resulting from the annual levy and collection of the Special Tax, trustee fees, rebate compliance calculation fees, any litigation involving the CFD, continuing disclosure undertakings of the City as imposed by applicable laws and regulations, communication with bondholders and normal administrative expenses.
“Administrator” means an official of the City, or designee thereof, responsible for determining the annual amount of the levy and collection of the Special Taxes. “Approved Property” means all Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a Building Permit on or prior to the April 1st preceding the Fiscal Year in which the Special Tax is being levied.

B-1
“Assessor’s Parcel Map” means an official map of the Assessor of the County of Riverside designating parcels by Assessor’s Parcel number.
“Assigned Special Tax” means the Special Tax for each Land Use Category of Developed Property, as determined in accordance with Section C.1.a., below.
“Backup Special Tax” means the Special Tax amount set forth in Section C.1.b., below. “Bonds” means any bonds or other indebtedness (as defined in the Act), whether in one or more series, issued by the CFD and secured by the levy of Improvement Area No. 2 Special Taxes. “Boundary Map” means a recorded map, as amended, of the CFD which indicates the boundaries of Improvement Area No. 2 of the CFD.
“Building Permit” means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include any subsequent building permits issued or changed after the first issuance, as determined by the Administrator.
“CFD” means Community Facilities District No. 2025-1 (Serena Park) of The City of Palm Springs established pursuant to the Act.
“City” means The City of Palm Springs.
“City Council” means the City Council of The City of Palm Springs. “County” means the County of Riverside.
“Developed Property” means all Parcels of Taxable Property that are included in a Final Map that was recorded prior to January 1st preceding the Fiscal Year in which the Special Tax is being levied and for which a Building Permit for new construction has been issued on or prior to April 1st preceding the Fiscal Year in which the Special Tax is being levied. “Dwelling Unit” or “(D/U)” means a residential unit that is offered for sale (and not for rent) that is used or permitted to be used as a domicile by one or more persons, as determined by the Administrator.
“Exempt Property” means any Parcel which is exempt from Special Taxes pursuant to Section E below.
“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285 that creates individual lots for which Building Permits may be issued without further subdivision. “Fiscal Year” means the 12 month period starting on July 1 of any calendar year and ending on the following June 30.
“Improvement Area No. 2” or “IA No. 2” means the property in the CFD designated as Improvement Area No. 2 on the Boundary Map.

B-1
“Indenture” means the bond indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. “Land Use Category” means any of the categories listed in Table 1. “MAI Certified Appraiser” or “Appraiser” means a certified appraiser and member of the Appraisal Institute who has met strict testing, standards and experience requirements. “Maximum Special Tax” means for each Parcel, the maximum Special Tax, determined in accordance with Section C, which can be levied in any Fiscal Year on such Parcel. “Minimum Sale Price” means the minimum price at which Dwelling Units of a given Land Use Category have sold or are expected to be sold in a normal marketing environment and shall not include prices for such Dwelling 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 Category. No incentives or discounts offered by the seller will be deducted from expected or sold home prices. “Other Property” means all Parcels of Developed Property for which a Building Permit was issued for any type of use other than Single Family Property.
“Parcel(s)” means a lot or parcel shown on an Assessor’s Parcel Map located in Improvement Area No. 2.
“Price Point Consultant” means any consultant or firm of such consultants selected by the CFD that (a) has substantial experience in performing price point studies for Residential Property within community facilities districts established under the Act or otherwise estimating or confirming pricing for Dwelling Units of Residential Property in such community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relates to the pricing of Dwelling Units of Residential Property in such community facilities districts, (c) is in fact independent and not under the control of the CFD or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) the CFD, (ii) the City, (iii) any owner of real property in the CFD, or (iv) any real property in the CFD, and (e) is not connected with the CFD or the City as an officer or employee thereof, but who may be regularly retained to make reports to the CFD or the City. “Price Point Study” means a price point study or a letter updating a previous price point study prepared by the Price Point Consultant pursuant to Section C.5 herein. “Property Owners’ Association Property” means all Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, have been conveyed, dedicated to, or irrevocably offered for dedication to a property owner association, including any master or sub-association. “Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Parcels of Approved Property, and (iii) Undeveloped Property, Public Property, and Property Owners’ Association Property, that the ratio of the actual Special Tax levy per acre to the Maximum Special Tax per acre is the same for all Parcels of Undeveloped Property, Public Property, and Property Owners’ Association Property.

B-1
“Public Property” means all Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, are used for rights-of-way or any other purpose and is owned by, dedicated to, or irrevocably offered for dedication to the federal government, the State of California, the County, or any other local jurisdiction, provided, however, 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” means this Rate and Method of Apportionment of Special Tax for Improvement Area No. 2 of Community Facilities District No. 2025-1 (Serena Park) of The City of Palm Springs. “Residential Floor Area” means all of the square footage of living area of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio or similar area on a Parcel.

B-1
“Undeveloped Property” means all Parcels of Taxable Property not classified as Developed Property, Approved Property, Public Property, or Property Owners’ Association Property.

B. ASSIGNMENT TO LAND USE CATEGORY
Each Fiscal Year, commencing with the 2026-2027 Fiscal Year, all Parcels of Taxable Property shall be classified as Developed Property, Approved Property, Undeveloped Property, Public Property, and/or Property Owners’ Association Property, and subject to the levy of Special Taxes in accordance with this Rate and Method as determined pursuant to Sections C and D.

Parcels of Developed Property shall further be classified as Residential Property or Other Property.

C. MAXIMUM SPECIAL TAX RATE

The Maximum Special Tax for each Parcel of Other Property shall be the Assigned Special Tax described in Table 1.

TABLE 1
Assigned Special Taxes for Developed Property
Fiscal Year 2025-2026
Land Use Category
Taxable
Unit Residential Floor Area
Assigned Special Tax
Per Taxable Unit

1. Single Family Property D/U Less than 2,200 sq. ft. $4,265

2. Single Family Property D/U 2,200 sq. ft. – 2,349 sq. ft. $4,440

3. Single Family Property D/U 2,350 sq. ft. – 2,499 sq. ft. $4,615

4. Single Family Property D/U 2,500 sq. ft. – 2,649 sq. ft. $4,790

5. Single Family Property D/U 2,650 sq. ft. – 2,799 sq. ft. $4,965 B-1

6. Single Family Property D/U Greater than 2,799 sq. ft. $5,400

7. Other Property Acre N/A $28,731
On each July 1, commencing July 1, 2026, the Assigned Special Tax shall be increased by an amount equal to two percent (2.0%) of the amount in effect for the previous Fiscal Year. July 1, 2043 shall be the final year the Assigned Special Tax increases. Following the Fiscal Year 2043-2044, the Assigned Special Tax shall not increase from the amount in effect for Fiscal Year 2043-2044. b. Backup Special Tax
When a Final Map is recorded, the Backup Special Tax for a Parcel classified or to be classified as Single Family Property within such Final Map shall be determined by multiplying the Undeveloped Property Maximum Special Tax per Acre by the total Acreage of Taxable Property within such Final Map, excluding the Acreage associated with (i) Public Property and/or Property Owners’ Association Property that is not Exempt Property pursuant to Section E and (ii) Other Property, , and dividing such amount by the number of Parcels within such Final Map classified as either (i) Single Family Property or (ii) Approved Property for which a Building Permit is expected to be issued for Single Family Property (i.e., the number of residential lots).

The Backup Special Tax shall not apply to Other Property, Public Property, or Property Owners’ Association Property.

The Maximum Special Tax for each Parcel of Approved Property expected to be classified as Other Property shall be $28,731 per Acre.

3. Undeveloped Property
The Maximum Special Tax for each Parcel of Undeveloped Property is shown in Table 2 below.

B-1
TABLE 2
Undeveloped Property Maximum Special Tax
Fiscal Year 2025-2026
Maximum Special Tax Per Acre
$28,731

4. Public Property and/or Property Owners’ Association Property that is not Exempt Property pursuant to the provisions of Section E.

5. Special Tax Reduction Prior to Issuance of First Series of Bonds.

B-1
The Special Tax reductions, if required pursuant to this section, shall be reflected in an amended notice of Special Tax lien, which the CFD shall cause to be recorded by executing a certificate in substantially the form attached herein as Exhibit B.

D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2026-2027 and for each following Fiscal Year, the City Council shall levy the Special Tax on all Taxable Property until the amount of Special Taxes equals the applicable Special Tax Requirement in accordance with the following steps:

E. EXEMPTIONS
The Administrator shall classify as Exempt Property all Parcels of (i) Public Property or (ii) Property Owners’ Association Property; provided that such classification shall not reduce the Acreage of all Taxable Property of the CFD to fewer than 16.57 Acres. The Administrator shall not classify a Parcel of Public Property or Property Owners’ Association Property as Exempt Property if such classification would reduce the Acreage of all Parcels of Taxable Property to fewer than 16.57 Acres. Such Parcels that cannot be classified as Exempt Property because such classification would reduce the Acreage of all Parcels of Taxable Property to fewer than 16.57 Acres will be classified as Property Owners’ Association Property or Public Property and will continue to be subject to Special Taxes. The B-1
Administrator shall classify such Parcels as Exempt Property in the chronological order in which property becomes Public Property or Property Owners’ Association Property.

F. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties, the same procedure, sale and lien priority in the case of delinquency; provided, however, that the Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of Improvement Area No. 2, and provided further that the CFD may covenant to foreclose and may actually foreclose on Parcels having delinquent Special Taxes as permitted by the Act.

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

The City Council may interpret this Rate and Method for purposes of clarifying any ambiguity and make determinations relative to the amount of Administrative Expenses.

H. PREPAYMENT OF SPECIAL TAX
The following definitions apply to this Section H:
“CFD Public Facilities” means $4,839,417, expressed in 2025 dollars, which shall increase by the Construction Inflation Index on July 1, 2026, and on each July 1 thereafter, or such lower number as (i) shall be determined by the Administrator as sufficient to provide the public facilities under the authorized bonding program, or (ii) shall be determined by the City Council concurrently with a covenant that the CFD will not issue any more Bonds.
“Construction Fund” means, collectively, an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct public facilities eligible under the Act and any account established prior to the issuance of Bonds for such purpose. “Construction Inflation Index” means the annual percentage change in the Engineering News- Record Building Cost Index for the City of Los Angeles, measured as of the calendar year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation B-1
Index shall be another index as determined by the Administrator that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles. “Future Facilities Costs” means the CFD Public Facilities minus (i) Bond proceeds deposited in Construction Funds and accounts and (ii) other amounts (special taxes, interest earnings, etc.) allocated to Construction Funds and accounts that were available to fund such CFD Public Facilities prior to the date of prepayment, but not less than $0.
“Outstanding Bonds” means all previously issued Bonds, which will remain outstanding after the payment of principal from the amount of Special Taxes that have been levied, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Maximum Special Taxes.

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

1. Confirm that no Special Tax delinquencies apply to such Parcel.

2. For a Parcel of Developed Property, compute the Maximum Special Tax for the Parcel. For a Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, B-1
compute the Maximum Special Tax for the Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Parcel. For a Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, Public Property or Property Owners’ Association Property to be prepaid, compute the Maximum Special Tax for the Parcel.

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

6. Determine the Future Facilities Costs.

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

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

13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by B-1
subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero.

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

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

I. TERM OF THE SPECIAL TAX
The Special Tax shall not be levied after the 2068-2069 Fiscal Year.

B-1
“EXHIBIT B”

CERTIFICATE OF MODIFICATION OF SPECIAL TAX
CITY OF PALM SPRINGS AND CFD NO. 2025-1 (SERENA PARK) IMPROVEMENT AREA NO. 2 CERTIFICATE Pursuant to Section C of the Rate and Method of Apportionment of Special Tax for Community Facilities District No. 2025-1 (Serena Park) of the City of Palm Springs (“CFD No. 2025-1”), the Special Tax for Residential Property and Other Property within CFD No. 2025-1 has been modified.

The information in Table 1 relating to the Special Tax for Developed Property within CFD No. 2025-1, as stated in Section C.1. of the Rate and Method of Apportionment, has been modified as follows:

The Maximum Special Tax for each Parcel of Other Property shall be the Assigned Special Tax described in Table 1.

TABLE 1
Assigned Special Taxes for Developed Property
Fiscal Year 20__-20__
Land Use Category
Taxable
Unit Residential Floor Area
Assigned Special Tax
Per Taxable Unit

1. Single Family Property D/U Less than 2,200 sq. ft. $_______

2. Single Family Property D/U 2,200 sq. ft. – 2,349 sq. ft. $_______

3. Single Family Property D/U 2,350 sq. ft. – 2,499 sq. ft. $_______

4. Single Family Property D/U 2,500 sq. ft. – 2,649 sq. ft. $_______

5. Single Family Property D/U 2,650 sq. ft. – 2,799 sq. ft. $_______

6. Single Family Property D/U Greater than 2,799 sq. ft. $_______

7. Other Property Acre N/A $_______
B-1

CITY OF PALM SPRINGS
IMPROVEMENT AREA NO. 2 OF COMMUNITY FACILITIES DISTRICT NO. 2025-1 (SERENA PARK) By:_________________________________ Date:______________________ C-1
EXHIBIT “C”

RATE AND METHOD OF APPORTIONMENT FOR

THE CITY OF PALM SPRINGS
COMMUNITY FACILITIES DISTRICT NO. 2025-1
(SERENA PARK)

CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA IMPROVEMENT AREA NO. 3
A Special Tax (all capitalized terms are defined in Section A, “Definitions”, below) shall be applicable to each Parcel of Taxable Property located within the boundaries of Improvement Area No. 3 of the CFD.

The amount of Special Tax to be levied in each Fiscal Year, on a Parcel, shall be determined by the City Council of The City of Palm Springs, acting in its capacity as the legislative body of the CFD by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, Public Property, and/or Property Owners’ Association Property that is not Exempt Property as set forth in Sections B, C, and D, below. All of the real property within Improvement Area No. 3, unless exempted by law or by the provisions hereof in Section E, 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 acreage of a Parcel as indicated on the most recent Assessor’s Parcel Map, or if the land area is not shown on the Assessor’s Parcel Map, the land area shown on the applicable Final Map, parcel map, condominium plan, or other similar instrument. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1 of Division 2 of Title 5 of the California Government Code of the State of California. “Administrative Expenses” means all actual or reasonably estimated costs and expenses of the City related to Improvement Area No. 3 that are chargeable or allocable to carry out its duties as the administrator as allowed by the Act, which shall include without limitation, all costs and expenses arising out of or resulting from the annual levy and collection of the Special Tax, trustee fees, rebate compliance calculation fees, any litigation involving the CFD, continuing disclosure undertakings of the City as imposed by applicable laws and regulations, communication with bondholders and normal administrative expenses.
“Administrator” means an official of the City, or designee thereof, responsible for determining the annual amount of the levy and collection of the Special Taxes. “Approved Property” means all Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a Building Permit on or prior to the April 1st preceding the Fiscal Year in which the Special Tax is being levied.

C-1
“Assessor’s Parcel Map” means an official map of the Assessor of the County of Riverside designating parcels by Assessor’s Parcel number.
“Assigned Special Tax” means the Special Tax for each Land Use Category of Developed Property, as determined in accordance with Section C.1.a., below.
“Backup Special Tax” means the Special Tax amount set forth in Section C.1.b., below. “Bonds” means any bonds or other indebtedness (as defined in the Act), whether in one or more series, issued by the CFD and secured by the levy of Improvement Area No. 3 Special Taxes. “Boundary Map” means a recorded map, as amended, of the CFD which indicates the boundaries of Improvement Area No. 3 of the CFD.
“Building Permit” means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include any subsequent building permits issued or changed after the first issuance, as determined by the Administrator.
“CFD” means Community Facilities District No. 2025-1 (Serena Park) of The City of Palm Springs established pursuant to the Act.
“City” means The City of Palm Springs.
“City Council” means the City Council of The City of Palm Springs. “County” means the County of Riverside.
“Developed Property” means all Parcels of Taxable Property that are included in a Final Map that was recorded prior to January 1st preceding the Fiscal Year in which the Special Tax is being levied and for which a Building Permit for new construction has been issued on or prior to April 1st preceding the Fiscal Year in which the Special Tax is being levied. “Dwelling Unit” or “(D/U)” means a residential unit that is offered for sale (and not for rent) that is used or permitted to be used as a domicile by one or more persons, as determined by the Administrator.
“Exempt Property” means any Parcel which is exempt from Special Taxes pursuant to Section E below.
“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285 that creates individual lots for which Building Permits may be issued without further subdivision. “Fiscal Year” means the 12 month period starting on July 1 of any calendar year and ending on the following June 30.
“Improvement Area No. 3” or “IA No. 3” means the property in the CFD designated as Improvement Area No. 3 on the Boundary Map.

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“Indenture” means the bond indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. “Land Use Category” means any of the categories listed in Table 1. “MAI Certified Appraiser” or “Appraiser” means a certified appraiser and member of the Appraisal Institute who has met strict testing, standards and experience requirements. “Maximum Special Tax” means for each Parcel, the maximum Special Tax, determined in accordance with Section C, which can be levied in any Fiscal Year on such Parcel. “Minimum Sale Price” means the minimum price at which Dwelling Units of a given Land Use Category have sold or are expected to be sold in a normal marketing environment and shall not include prices for such Dwelling 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 Category. No incentives or discounts offered by the seller will be deducted from expected or sold home prices. “Other Property” means all Parcels of Developed Property for which a Building Permit was issued for any type of use other than Single Family Property.
“Parcel(s)” means a lot or parcel shown on an Assessor’s Parcel Map located in Improvement Area No. 3.
“Price Point Consultant” means any consultant or firm of such consultants selected by the CFD that (a) has substantial experience in performing price point studies for Residential Property within community facilities districts established under the Act or otherwise estimating or confirming pricing for Dwelling Units of Residential Property in such community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relates to the pricing of Dwelling Units of Residential Property in such community facilities districts, (c) is in fact independent and not under the control of the CFD or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) the CFD, (ii) the City, (iii) any owner of real property in the CFD, or (iv) any real property in the CFD, and (e) is not connected with the CFD or the City as an officer or employee thereof, but who may be regularly retained to make reports to the CFD or the City. “Price Point Study” means a price point study or a letter updating a previous price point study prepared by the Price Point Consultant pursuant to Section C.5 herein. “Property Owners’ Association Property” means all Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, have been conveyed, dedicated to, or irrevocably offered for dedication to a property owner association, including any master or sub-association. “Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Parcels of Approved Property, and (iii) Undeveloped Property, Public Property, and Property Owners’ Association Property, that the ratio of the actual Special Tax levy per acre to the Maximum Special Tax per acre is the same for all Parcels of Undeveloped Property, Public Property, and Property Owners’ Association Property.

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“Public Property” means all Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, are used for rights-of-way or any other purpose and is owned by, dedicated to, or irrevocably offered for dedication to the federal government, the State of California, the County, or any other local jurisdiction, provided, however, 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” means this Rate and Method of Apportionment of Special Tax for Improvement Area No. 3 of Community Facilities District No. 2025-1 (Serena Park) of The City of Palm Springs. “Residential Floor Area” means all of the square footage of living area of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio or similar area on a Parcel.

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“Undeveloped Property” means all Parcels of Taxable Property not classified as Developed Property, Approved Property, Public Property, or Property Owners’ Association Property.

Parcels of Developed Property shall further be classified as Residential Property or Other Property.

C. MAXIMUM SPECIAL TAX RATE

The Maximum Special Tax for each Parcel of Other Property shall be the Assigned Special Tax described in Table 1.

TABLE 1
Assigned Special Taxes for Developed Property
Fiscal Year 2025-2026
Land Use Category
Taxable
Unit Residential Floor Area
Assigned Special Tax
Per Taxable Unit

1. Single Family Property D/U Less than 1,750 sq. ft. $3,720

2. Single Family Property D/U 1,750 sq. ft. – 1,949 sq. ft. $3,860

3. Single Family Property D/U 1,950 sq. ft. – 2,149 sq. ft. $4,000

4. Single Family Property D/U 2,150 sq. ft. – 2,349 sq. ft. $4,795

5. Single Family Property D/U 2,350 sq. ft. – 2,549 sq. ft. $4,955 C-1

6. Single Family Property D/U 2,550 sq. ft. – 2,749 sq. ft. $5,115

7. Single Family Property D/U Greater than 2,749 sq. ft. $5,400

8. Other Property Acre N/A $27,301
On each July 1, commencing July 1, 2026, the Assigned Special Tax shall be increased by an amount equal to two percent (2.0%) of the amount in effect for the previous Fiscal Year. July 1, 2043 shall be the final year the Assigned Special Tax increases. Following the Fiscal Year 2043-2044, the Assigned Special Tax shall not increase from the amount in effect for Fiscal Year 2043-2044. b. Backup Special Tax
When a Final Map is recorded, the Backup Special Tax for a Parcel classified or to be classified as Single Family Property within such Final Map shall be determined by multiplying the Undeveloped Property Maximum Special Tax per Acre by the total Acreage of Taxable Property within such Final Map, excluding the Acreage associated with (i) Public Property and/or Property Owners’ Association Property that is not Exempt Property pursuant to Section E and (ii) Other Property, , and dividing such amount by the number of Parcels within such Final Map classified as either (i) Single Family Property or (ii) Approved Property for which a Building Permit is expected to be issued for Single Family Property (i.e., the number of residential lots).

The Backup Special Tax shall not apply to Other Property, Public Property, or Property Owners’ Association Property.

The Maximum Special Tax for each Parcel of Approved Property expected to be classified as Other Property shall be $27,301 per Acre.

3. Undeveloped Property
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The Maximum Special Tax for each Parcel of Undeveloped Property is shown in Table 2 below.

TABLE 2
Undeveloped Property Maximum Special Tax
Fiscal Year 2025-2026
Maximum Special Tax Per Acre
$27,301

4. Public Property and/or Property Owners’ Association Property that is not Exempt Property pursuant to the provisions of Section E.

5. Special Tax Reduction Prior to Issuance of First Series of Bonds.

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The Special Tax reductions, if required pursuant to this section, shall be reflected in an amended notice of Special Tax lien, which the CFD shall cause to be recorded by executing a certificate in substantially the form attached herein as Exhibit B.

E. EXEMPTIONS
The Administrator shall classify as Exempt Property all Parcels of (i) Public Property or (ii) Property Owners’ Association Property; provided that such classification shall not reduce the Acreage of all Taxable Property of the CFD to fewer than 24.23 Acres. The Administrator shall not classify a Parcel of Public Property or Property Owners’ Association Property as Exempt Property if such classification would reduce the Acreage of all Parcels of Taxable Property to fewer than 24.23 Acres. Such Parcels that cannot be classified as Exempt Property because such classification would reduce the Acreage of all Parcels of Taxable Property to fewer than 24.23 Acres will be classified as Property Owners’ Association Property or Public Property and will continue to be subject to Special Taxes. The C-1
Administrator shall classify such Parcels as Exempt Property in the chronological order in which property becomes Public Property or Property Owners’ Association Property.

F. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties, the same procedure, sale and lien priority in the case of delinquency; provided, however, that the Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of Improvement Area No. 3, and provided further that the CFD may covenant to foreclose and may actually foreclose on Parcels having delinquent Special Taxes as permitted by the Act.

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

The City Council may interpret this Rate and Method for purposes of clarifying any ambiguity and make determinations relative to the amount of Administrative Expenses.

H. PREPAYMENT OF SPECIAL TAX
The following definitions apply to this Section H:
“CFD Public Facilities” means $7,088,364, expressed in 2025 dollars, which shall increase by the Construction Inflation Index on July 1, 2026, and on each July 1 thereafter, or such lower number as (i) shall be determined by the Administrator as sufficient to provide the public facilities under the authorized bonding program, or (ii) shall be determined by the City Council concurrently with a covenant that the CFD will not issue any more Bonds.
“Construction Fund” means, collectively, an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct public facilities eligible under the Act and any account established prior to the issuance of Bonds for such purpose. “Construction Inflation Index” means the annual percentage change in the Engineering News- Record Building Cost Index for the City of Los Angeles, measured as of the calendar year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation C-1
Index shall be another index as determined by the Administrator that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles. “Future Facilities Costs” means the CFD Public Facilities minus (i) Bond proceeds deposited in Construction Funds and accounts and (ii) other amounts (special taxes, interest earnings, etc.) allocated to Construction Funds and accounts that were available to fund such CFD Public Facilities prior to the date of prepayment, but not less than $0.
“Outstanding Bonds” means all previously issued Bonds, which will remain outstanding after the payment of principal from the amount of Special Taxes that have been levied, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Maximum Special Taxes.

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

1. Confirm that no Special Tax delinquencies apply to such Parcel.

2. For a Parcel of Developed Property, compute the Maximum Special Tax for the Parcel. For a Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, C-1
compute the Maximum Special Tax for the Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Parcel. For a Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, Public Property or Property Owners’ Association Property to be prepaid, compute the Maximum Special Tax for the Parcel.

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

6. Determine the Future Facilities Costs.

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

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

13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by C-1
subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero.

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

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

I. TERM OF THE SPECIAL TAX
The Special Tax shall not be levied after the 2070-2071 Fiscal Year.

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“EXHIBIT B”

CERTIFICATE OF MODIFICATION OF SPECIAL TAX
CITY OF PALM SPRINGS AND CFD NO. 2025-1 (SERENA PARK) IMPROVEMENT AREA NO. 3 CERTIFICATE Pursuant to Section C of the Rate and Method of Apportionment of Special Tax for Community Facilities District No. 2025-1 (Serena Park) of the City of Palm Springs (“CFD No. 2025-1”), the Special Tax for Residential Property and Other Property within CFD No. 2025-1 has been modified.

The information in Table 1 relating to the Special Tax for Developed Property within CFD No. 2025-1, as stated in Section C.1. of the Rate and Method of Apportionment, has been modified as follows:

The Maximum Special Tax for each Parcel of Other Property shall be the Assigned Special Tax described in Table 1.

TABLE 1
Assigned Special Taxes for Developed Property
Fiscal Year 20__-20__
Land Use Category
Taxable
Unit Residential Floor Area
Assigned Special Tax
Per Taxable Unit

1. Single Family Property D/U Less than 1,750 sq. ft. $________

2. Single Family Property D/U 1,750 sq. ft. – 1,949 sq. ft. $________

3. Single Family Property D/U 1,950 sq. ft. – 2,149 sq. ft. $________

4. Single Family Property D/U 2,150 sq. ft. – 2,349 sq. ft. $________

5. Single Family Property D/U 2,350 sq. ft. – 2,549 sq. ft. $________

6. Single Family Property D/U 2,550 sq. ft. – 2,749 sq. ft. $________

7. Single Family Property D/U Greater than 2,749 sq. ft. $________

8. Other Property Acre N/A $________
C-1

CITY OF PALM SPRINGS
IMPROVEMENT AREA NO. 3 OF COMMUNITY FACILITIES DISTRICT NO. 2025-1 (SERENA PARK) By:_________________________________ Date:______________________ D-1
EXHIBIT “D”

RATE AND METHOD OF APPORTIONMENT FOR

THE CITY OF PALM SPRINGS
COMMUNITY FACILITIES DISTRICT NO. 2025-1
(SERENA PARK)

CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA IMPROVEMENT AREA NO. 4
A Special Tax (all capitalized terms are defined in Section A, “Definitions”, below) shall be applicable to each Parcel of Taxable Property located within the boundaries of Improvement Area No. 4 of the CFD.

The amount of Special Tax to be levied in each Fiscal Year, on a Parcel, shall be determined by the City Council of The City of Palm Springs, acting in its capacity as the legislative body of the CFD by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, Public Property, and/or Property Owners’ Association Property that is not Exempt Property as set forth in Sections B, C, and D, below. All of the real property within Improvement Area No. 4, unless exempted by law or by the provisions hereof in Section E, 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 acreage of a Parcel as indicated on the most recent Assessor’s Parcel Map, or if the land area is not shown on the Assessor’s Parcel Map, the land area shown on the applicable Final Map, parcel map, condominium plan, or other similar instrument. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1 of Division 2 of Title 5 of the California Government Code of the State of California. “Administrative Expenses” means all actual or reasonably estimated costs and expenses of the City related to Improvement Area No. 4 that are chargeable or allocable to carry out its duties as the administrator as allowed by the Act, which shall include without limitation, all costs and expenses arising out of or resulting from the annual levy and collection of the Special Tax, trustee fees, rebate compliance calculation fees, any litigation involving the CFD, continuing disclosure undertakings of the City as imposed by applicable laws and regulations, communication with bondholders and normal administrative expenses.
“Administrator” means an official of the City, or designee thereof, responsible for determining the annual amount of the levy and collection of the Special Taxes. “Approved Property” means all Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a Building Permit on or prior to the April 1st preceding the Fiscal Year in which the Special Tax is being levied.

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“Assessor’s Parcel Map” means an official map of the Assessor of the County of Riverside designating parcels by Assessor’s Parcel number.
“Assigned Special Tax” means the Special Tax for each Land Use Category of Developed Property, as determined in accordance with Section C.1.a., below.
“Backup Special Tax” means the Special Tax amount set forth in Section C.1.b., below. “Bonds” means any bonds or other indebtedness (as defined in the Act), whether in one or more series, issued by the CFD and secured by the levy of Improvement Area No. 4 Special Taxes. “Boundary Map” means a recorded map, as amended, of the CFD which indicates the boundaries of Improvement Area No. 4 of the CFD.
“Building Permit” means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include any subsequent building permits issued or changed after the first issuance, as determined by the Administrator.
“CFD” means Community Facilities District No. 2025-1 (Serena Park) of The City of Palm Springs established pursuant to the Act.
“City” means The City of Palm Springs.
“City Council” means the City Council of The City of Palm Springs. “County” means the County of Riverside.
“Developed Property” means all Parcels of Taxable Property that are included in a Final Map that was recorded prior to January 1st preceding the Fiscal Year in which the Special Tax is being levied and for which a Building Permit for new construction has been issued on or prior to April 1st preceding the Fiscal Year in which the Special Tax is being levied. “Dwelling Unit” or “(D/U)” means a residential unit that is offered for sale (and not for rent) that is used or permitted to be used as a domicile by one or more persons, as determined by the Administrator.
“Exempt Property” means any Parcel which is exempt from Special Taxes pursuant to Section E below.
“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285 that creates individual lots for which Building Permits may be issued without further subdivision. “Fiscal Year” means the 12 month period starting on July 1 of any calendar year and ending on the following June 30.
“Improvement Area No. 4” or “IA No. 4” means the property in the CFD designated as Improvement Area No. 4 on the Boundary Map.

D-3
“Indenture” means the bond indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. “Land Use Category” means any of the categories listed in Table 1. “MAI Certified Appraiser” or “Appraiser” means a certified appraiser and member of the Appraisal Institute who has met strict testing, standards and experience requirements. “Maximum Special Tax” means for each Parcel, the maximum Special Tax, determined in accordance with Section C, which can be levied in any Fiscal Year on such Parcel. “Minimum Sale Price” means the minimum price at which Dwelling Units of a given Land Use Category have sold or are expected to be sold in a normal marketing environment and shall not include prices for such Dwelling 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 Category. No incentives or discounts offered by the seller will be deducted from expected or sold home prices. “Other Property” means all Parcels of Developed Property for which a Building Permit was issued for any type of use other than Single Family Property.
“Parcel(s)” means a lot or parcel shown on an Assessor’s Parcel Map located in Improvement Area No. 4.
“Price Point Consultant” means any consultant or firm of such consultants selected by the CFD that (a) has substantial experience in performing price point studies for Residential Property within community facilities districts established under the Act or otherwise estimating or confirming pricing for Dwelling Units of Residential Property in such community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relates to the pricing of Dwelling Units of Residential Property in such community facilities districts, (c) is in fact independent and not under the control of the CFD or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) the CFD, (ii) the City, (iii) any owner of real property in the CFD, or (iv) any real property in the CFD, and (e) is not connected with the CFD or the City as an officer or employee thereof, but who may be regularly retained to make reports to the CFD or the City. “Price Point Study” means a price point study or a letter updating a previous price point study prepared by the Price Point Consultant pursuant to Section C.5 herein. “Property Owners’ Association Property” means all Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, have been conveyed, dedicated to, or irrevocably offered for dedication to a property owner association, including any master or sub-association. “Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Parcels of Approved Property, and (iii) Undeveloped Property, Public Property, and Property Owners’ Association Property, that the ratio of the actual Special Tax levy per acre to the Maximum Special Tax per acre is the same for all Parcels of Undeveloped Property, Public Property, and Property Owners’ Association Property.

D-4
“Public Property” means all Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, are used for rights-of-way or any other purpose and is owned by, dedicated to, or irrevocably offered for dedication to the federal government, the State of California, the County, or any other local jurisdiction, provided, however, 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” means this Rate and Method of Apportionment of Special Tax for Improvement Area No. 4 of Community Facilities District No. 2025-1 (Serena Park) of The City of Palm Springs. “Residential Floor Area” means all of the square footage of living area of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio or similar area on a Parcel.

D-5
“Undeveloped Property” means all Parcels of Taxable Property not classified as Developed Property, Approved Property, Public Property, or Property Owners’ Association Property.

Parcels of Developed Property shall further be classified as Residential Property or Other Property.

C. MAXIMUM SPECIAL TAX RATE

The Maximum Special Tax for each Parcel of Other Property shall be the Assigned Special Tax described in Table 1.

TABLE 1
Assigned Special Taxes for Developed Property
Fiscal Year 2025-2026
Land Use Category
Taxable
Unit Residential Floor Area
Assigned Special Tax
Per Taxable Unit

1. Single Family Property D/U Less than 2,100 sq. ft. $3,470

2. Single Family Property D/U 2,100 sq. ft. – 2,299 sq. ft. $3,735

3. Single Family Property D/U Greater than 2,299 sq. ft. $4,000

4. Other Property Acre N/A $31,262
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On each July 1, commencing July 1, 2026, the Assigned Special Tax shall be increased by an amount equal to two percent (2.0%) of the amount in effect for the previous Fiscal Year. July 1, 2043 shall be the final year the Assigned Special Tax increases. Following the Fiscal Year 2043-2044, the Assigned Special Tax shall not increase from the amount in effect for Fiscal Year 2043-2044. b. Backup Special Tax
When a Final Map is recorded, the Backup Special Tax for a Parcel classified or to be classified as Single Family Property within such Final Map shall be determined by multiplying the Undeveloped Property Maximum Special Tax per Acre by the total Acreage of Taxable Property within such Final Map, excluding the Acreage associated with (i) Public Property and/or Property Owners’ Association Property that is not Exempt Property pursuant to Section E and (ii) Other Property, , and dividing such amount by the number of Parcels within such Final Map classified as either (i) Single Family Property or (ii) Approved Property for which a Building Permit is expected to be issued for Single Family Property (i.e., the number of residential lots).

The Backup Special Tax shall not apply to Other Property, Public Property, or Property Owners’ Association Property.

The Maximum Special Tax for each Parcel of Approved Property expected to be classified as Other Property shall be $31,262 per Acre.

3. Undeveloped Property
The Maximum Special Tax for each Parcel of Undeveloped Property is shown in Table 2 below.

TABLE 2
Undeveloped Property Maximum Special Tax
D-7
Fiscal Year 2025-2026
Maximum Special Tax Per Acre
$31,262

4. Public Property and/or Property Owners’ Association Property that is not Exempt Property pursuant to the provisions of Section E.

5. Special Tax Reduction Prior to Issuance of First Series of Bonds.

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D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2026-2027 and for each following Fiscal Year, the City Council shall levy the Special Tax on all Taxable Property until the amount of Special Taxes equals the applicable Special Tax Requirement in accordance with the following steps:

E. EXEMPTIONS
The Administrator shall classify as Exempt Property all Parcels of (i) Public Property or (ii) Property Owners’ Association Property; provided that such classification shall not reduce the Acreage of all Taxable Property of the CFD to fewer than 10.87 Acres. The Administrator shall not classify a Parcel of Public Property or Property Owners’ Association Property as Exempt Property if such classification would reduce the Acreage of all Parcels of Taxable Property to fewer than 10.87 Acres. Such Parcels that cannot be classified as Exempt Property because such classification would reduce the Acreage of all Parcels of Taxable Property to fewer than 10.87 Acres will be classified as Property Owners’ Association Property or Public Property and will continue to be subject to Special Taxes. The Administrator shall classify such Parcels as Exempt Property in the chronological order in which property becomes Public Property or Property Owners’ Association Property.

F. MANNER OF COLLECTION
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The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties, the same procedure, sale and lien priority in the case of delinquency; provided, however, that the Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of Improvement Area No. 4, and provided further that the CFD may covenant to foreclose and may actually foreclose on Parcels having delinquent Special Taxes as permitted by the Act.

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

The City Council may interpret this Rate and Method for purposes of clarifying any ambiguity and make determinations relative to the amount of Administrative Expenses.

H. PREPAYMENT OF SPECIAL TAX
The following definitions apply to this Section H:
“CFD Public Facilities” means $4,102,493, expressed in 2025 dollars, which shall increase by the Construction Inflation Index on July 1, 2026, and on each July 1 thereafter, or such lower number as (i) shall be determined by the Administrator as sufficient to provide the public facilities under the authorized bonding program, or (ii) shall be determined by the City Council concurrently with a covenant that the CFD will not issue any more Bonds.
“Construction Fund” means, collectively, an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct public facilities eligible under the Act and any account established prior to the issuance of Bonds for such purpose. “Construction Inflation Index” means the annual percentage change in the Engineering News- Record Building Cost Index for the City of Los Angeles, measured as of the calendar year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the Administrator that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles. “Future Facilities Costs” means the CFD Public Facilities minus (i) Bond proceeds deposited in Construction Funds and accounts and (ii) other amounts (special taxes, interest earnings, etc.) D-10
allocated to Construction Funds and accounts that were available to fund such CFD Public Facilities prior to the date of prepayment, but not less than $0.
“Outstanding Bonds” means all previously issued Bonds, which will remain outstanding after the payment of principal from the amount of Special Taxes that have been levied, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Maximum Special Taxes.

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

1. Confirm that no Special Tax delinquencies apply to such Parcel.

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

6. Determine the Future Facilities Costs.

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

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

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

PP = Partial Prepayment
PE = the Prepayment Amount calculated according to Section H.1 F = the percent by which the owner of the Parcel(s) is partially prepaying the Maximum Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section H.1 D-13
The owner of a Parcel who desires to partially prepay the Maximum Special Tax obligation for the Parcel shall notify the Administrator of (i) such owner’s intent to partially prepay the Maximum Special Tax obligation, (ii) the percentage of the Maximum Special Tax obligation such owner wishes to prepay, and (iii) the company or agency that will be acting as the escrow agent, if any. Within 5 days of receipt of such notice, the Administrator shall notify such property owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the amount of a partial prepayment. Within 15 business days of receipt of such non-refundable deposit, the Administrator shall notify such owner of the amount of the Partial Prepayment for the Parcel. A Partial Prepayment must be made not less than 60 days prior to the redemption date for the Outstanding Bonds to be redeemed with the proceeds of the Partial Prepayment.

I. TERM OF THE SPECIAL TAX
The Special Tax shall not be levied after the 2073-2074 Fiscal Year.

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“EXHIBIT B”

CERTIFICATE OF MODIFICATION OF SPECIAL TAX
CITY OF PALM SPRINGS AND CFD NO. 2025-1 (SERENA PARK) IMPROVEMENT AREA NO. 4 CERTIFICATE Pursuant to Section C of the Rate and Method of Apportionment of Special Tax for Community Facilities District No. 2025-1 (Serena Park) of the City of Palm Springs (“CFD No. 2025-1”), the Special Tax for Residential Property and Other Property within CFD No. 2025-1 has been modified.

The information in Table 1 relating to the Special Tax for Developed Property within CFD No. 2025-1, as stated in Section C.1. of the Rate and Method of Apportionment, has been modified as follows:

The Maximum Special Tax for each Parcel of Other Property shall be the Assigned Special Tax described in Table 1.

TABLE 1
Assigned Special Taxes for Developed Property
Fiscal Year 20__-20__
Land Use Category
Taxable
Unit Residential Floor Area
Assigned Special Tax
Per Taxable Unit

1. Single Family Property D/U Less than 2,100 sq. ft. $______

2. Single Family Property D/U 2,100 sq. ft. – 2,299 sq. ft. $______

3. Single Family Property D/U Greater than 2,299 sq. ft. $______

4. Other Property Acre N/A $______
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CITY OF PALM SPRINGS
IMPROVEMENT AREA NO. 4 OF COMMUNITY FACILITIES DISTRICT NO. 2025-1 (SERENA PARK) By:_________________________________ Date:______________________

Palm Springs City CouncilJanuary 14, 2026

Palm Springs City Council
January 14, 2026