Paso Robles City Council
December 2, 2025

Attachment 3
THE SERIES 2025 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE SERIES 2025 BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

TABLE OF CONTENTS Attachment 3
-iINTRODUCTION ................................................................... 1 General............................................................................... 1 The District and Improvement Area No. 1 ......................... 1 Property Ownership and Development Status.................... 3 Appraisal Report ................................................................ 4 Sources of Payment for the Series 2025 Bonds.................. 4 Description of the Series 2025 Bonds................................ 6 Redemption ........................................................................ 6 Tax Matters........................................................................ 6 Professionals Involved in the Offering............................... 7 Continuing Disclosure........................................................ 7 Bondowners’ Risks ............................................................ 8 Forward Looking Statements ............................................. 8 Other Information .............................................................. 8 THE FINANCING PLAN........................................................ 8 Estimated Sources and Uses of Funds................................ 9 THE SERIES 2025 BONDS .................................................... 9 General Provisions............................................................. 9 Authority for Issuance...................................................... 10 Redemption ...................................................................... 11 Registration, Transfer and Exchange ............................... 14 Book-Entry Only System ................................................. 14 Debt Service Schedule ..................................................... 14 ANNUAL DEBT SERVICE SCHEDULE ............................ 15 SOURCES OF PAYMENT FOR THE SERIES 2025
BONDS .................................................................. 16 Limited Obligations ......................................................... 16 Special Taxes ................................................................... 16 Teeter Plan ....................................................................... 22 Special Tax Fund ............................................................. 22 Surplus Account................ Error! Bookmark not defined.

Bond Fund........................................................................ 23 Reserve Fund ................................................................... 24 Superior Obligations; Parity Bonds.................................. 25 IMPROVEMENT AREA NO. 1............................................ 27 General Description of the District and Improvement
Area No. 1 .............................................................. 27 Description of Authorized Facilities ................................ 27 Direct and Overlapping Indebtedness .............................. 29 Expected Tax Burden....................................................... 29 Appraisal Report .............................................................. 30 Appraised Value-to-Lien Ratios....................................... 32 Largest Taxpayers............................................................ 36 Delinquency History ........................................................ 37 City’s Collection Practices............................................... 37

PROPERTY OWNERSHIP AND THE
DEVELOPMENT .................................................. 43 The Developers and the Project........................................ 43 Developers and their Development Plan Error! Bookmark
not defined.

RISK FACTORS.................................................................... 50 Risks of Real Estate Secured Investments Generally ....... 50 Mortgage Interest Rates ................................................... 50 Availability of Hazard Insurance ..................................... 51 Limited Obligations ......................................................... 51 Insufficiency of Special Taxes ......................................... 51 Failure to Develop Properties........................................... 52 Special Tax Delinquencies............................................... 53 Natural Disasters.............................................................. 54 Hazardous Substances......................................................56 Parity Taxes and Special Assessments .............................56 Disclosures to Future Purchasers......................................57 Non-Cash Payments of Special Taxes..............................57 Payment of the Special Tax Is Not a Personal
Obligation of the Owners........................................57 Concentration of Ownership.............................................58 Property Values................................................................58 FDIC/Federal Government Interests in Properties............59 Teeter Plan Termination ...................................................60 Bankruptcy and Foreclosure.............................................60 Depletion of Reserve Fund ...............................................61 No Acceleration Provision................................................62 Loss of Tax Exemption.....................................................62 Limitations on Remedies..................................................63 Limited Secondary Market ...............................................63 Proposition 218.................................................................63 Litigation with Respect to Community Facilities
Districts ..................................................................64 IRS Audit of Tax-Exempt Bond Issues ............................65 Ballot Initiatives...............................................................66 Potential Early Redemption of Bonds from
Prepayments or Community Facilities District
Bond Proceeds........................................................66 Availability of Property and Casualty Insurance ..............66 Cybersecurity....................................................................66 CONTINUING DISCLOSURE..............................................67 City Continuing Disclosure ..............................................67 Developers Continuing Disclosure ...................................67 LEGAL MATTERS ...............................................................68 Tax Matters.......................................................................68 Legal Opinion...................................................................69 Litigation ..........................................................................70 No Rating .........................................................................70 Underwriting ....................................................................70 Municipal Advisor............................................................70 Financial Interests.............................................................71 Pending Legislation ..........................................................71 Additional Information.....................................................71 APPENDIX A—AMENDED RATE AND

METHOD OF APPORTIONMENT OF
SPECIAL TAX.............................................................A-1 APPENDIX B—APPRAISAL REPORT.............................B-1 APPENDIX C—SUPPLEMENTAL

INFORMATION CONCERNING CITY OF

EL PASO DE ROBLES AND COUNTY OF
SAN LUIS OBISPO.....................................................C-1 APPENDIX D—SUMMARY OF LEGAL
DOCUMENTS .............................................................D-1 APPENDIX E—FORM OF CONTINUING

DISCLOSURE CERTIFICATE OF THE
CITY............................................................................. E-1 APPENDIX F—FORM OF CONTINUING

DISCLOSURE CERTIFICATE OF THE
DEVELOPERS..............................................................F-1 APPENDIX G—PROPOSED FORM OF BOND
COUNSEL OPINION ..................................................G-1

TABLE OF CONTENTS
(continued)
-ii82472.04037\44299908.1
APPENDIX H—INFORMATION
CONCERNING DTC................................................... H-1

Attachment 3
[REGIONAL MAP]

Attachment 3
[DISTRICT LOCATION MAP]

Attachment 3
[AERIAL PHOTO]

Attachment 3
1 $13,420,000*

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 1)
SPECIAL TAX BONDS, 2025 SERIES A

INTRODUCTION
This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement. A full review should be made of the entire Official Statement. The sale and delivery of Series 2025 Bonds to potential investors is made only by means of the entire Official Statement. All capitalized terms used in this Official Statement and not defined shall have the meaning set forth in APPENDIX D — “SUMMARY OF LEGAL DOCUMENTS — DEFINITIONS” or APPENDIX A — “AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
General
The purpose of this Official Statement (the “Official Statement”) is to provide certain information concerning the issuance of the $13,420,000* Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 1) Special Tax Bonds, 2025 Series A (the “Series 2025 Bonds”). The proceeds of the Series 2025 Bonds will be used to (i) finance various public improvements needed with respect to the development of the property within City of Paso Robles Community Facilities District No. 2022-1N (OlsenSouth Chandler Ranch - Facilities), County of San Luis Obispo, State of California (the “District”); (ii) fund a reserve fund securing the Series 2025 Bonds; (iii) fund a deposit to the administrative expense fund in the amount of $25,000; (iv) fund a portion of capitalized interest on the Series 2025 Bonds through September 1, 2026; and (v) pay costs of issuance of the Series 2025 Bonds.

The Series 2025 Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Act”), and that certain Fiscal Agent Agreement, dated as of [December 1], 2025 (the “Fiscal Agent Agreement”), by and between the City of El Paso de Robles (the “City”), for and on behalf of the District, and U.S. Bank Trust Company, National Association (the “Fiscal Agent”). The Series 2025 Bonds are secured under the Fiscal Agent Agreement by a pledge of and lien upon Special Tax Revenues (as defined in this Official Statement) on parity with any Parity Bonds, as that term is defined in the Fiscal Agent Agreement (the “Parity Bonds,” and together with the Series 2025 Bonds, the “Bonds”) and all moneys in the Bond Fund, the Special Tax Fund, and the Reserve Fund, to the extent set forth in the Fiscal Agent Agreement.

THE CITY EXPECTS TO ISSUE BONDS FOR THE OTHER IMPROVEMENT AREAS OF THE DISTRICT. NONE OF THE SPECIAL TAXES THAT COULD BE COLLECTED WITHIN THE OTHER IMPROVEMENT AREAS OF THE DISTRICT, OTHER THAN IMPROVEMENT AREA NO. 1, ARE AVAILABLE TO PAY DEBT SERVICE ON ANY IMPROVEMENT AREA NO. 1 BONDS.

NONE OF THE SPECIAL TAXES THAT COULD BE COLLECTED WITHIN IMPROVEMENT AREA NO. 1 ARE AVAILABLE TO PAY DEBT SERVICE ON ANY OTHER IMPROVEMENT AREA BONDS.

The District and Improvement Area No. 1
The District is located in the southeastern area of the City. The District consists of five improvement areas totaling approximately 279 acres and is generally coterminous with the boundaries of a new master-planned

* Preliminary, subject to change.

Attachment 3
2 community known as “Vinedo” (the “Vinedo Project”). At build-out, the Vinedo Project is expected to include approximately 1,293 residential units. The Vinedo Project consists of 23 different planning areas.

Improvement Area No. 1 of the District (“Improvement Area No. 1”) includes approximately 35.43 gross acres and consists of Planning Areas 3, 11, 12 and 15 of the Vinedo Project. Improvement Area No. 1 is located off of the intersection of Sherwood Road and Airport Road in the City. Improvement Area No. 1 is surrounded by single-family residential homes to the west and rolling hills, grasslands, and vineyards to the north, east and west.

The property within Improvement Area No. 1 is included in the Vinedo Specific Plan. The final map for Planning Area 3, Final Tract Map No. 3176, was approved by the City on October 21, 2025, and is expected to be recorded by December 31, 2025. The final tract map for Planning Area 11 is expected to be approved by January 31, 2027, and the final tract map for Planning Area 12 is expected to be approved by September 30, 2027.

The final map for Planning Area 15, Final Tract Map No. 3154-1, was approved by the City on November 21, 2023 and was recorded in the official records of the County on February 8, 2024. Improvement Area No. 1 is planned for a total of 213 single-family homes.

Planning Area 15 is the only planning area in Improvement Area No. 1 that is actively selling homes.

Planning Area 15 is being constructed as an age-restricted 55+ community. Construction of homes in Planning Area 3 has commenced, while Planning Areas 11 and 12 consist of unimproved lots.

The Appraisal Report made assumptions as to the number of expected lots and units for Improvement Area No. 1 and such numbers are subject to change as development progresses and final maps are recorded.

See “IMPROVEMENT AREA NO. 1 — General Description of the District and Improvement Area No. 1,” “PROPERTY OWNERSHIP AND THE DEVELOPMENT,” and APPENDIX A — “AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
Formation Proceedings. The District was formed and Improvement Area No. 1, along with the other improvement areas, were designated therein, by the City pursuant to the Act. The District constitutes a governmental entity separate and apart from the City.

The Act was enacted by the California legislature to provide an alternative method of financing certain public capital facilities and services, especially in developing areas of the State. Any local agency (as defined in the Act) may establish a community facilities district to provide for and finance the cost of eligible public facilities and services. Generally, the legislative body of the local agency which forms a community facilities district acts on behalf of such district as its legislative body. Subject to approval by two-thirds of the votes cast at an election and compliance with the other provisions of the Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district or any improvement area designated therein to repay such indebtedness.

Pursuant to the Act, on June 21, 2022, the City Council adopted Resolution No. 22-079 (the “Resolution of Intention”), stating its intention to form the District, designate the five improvement areas therein, and to authorize the levy of a special tax on the taxable property within each of such improvement areas. On June 21, 2022, the City Council also adopted Resolution No. 22-080, stating its intention to incur bonded indebtedness in an aggregate principal amount, with respect to Improvement Area No. 1, not to exceed $20,000,000, for the purpose of financing the acquisition, construction, expansion, improvement, or rehabilitation of certain public facilities to serve the area within the District and its neighboring areas. See “IMPROVEMENT AREA NO. 1 — Description of Authorized Facilities.”
Subsequent to a noticed public hearing, on August 2, 2022, the City Council adopted Resolution Nos. 22- 113, 22-114, and 22-115 (the “Resolution of Formation,” “Resolution to Incur Debt,” and “Resolution Calling

Attachment 3
3 Election,” respectively) which established the District, designated the five improvement areas therein, authorized the levy of special taxes within each of such improvement areas, determined the necessity to incur bonded indebtedness of the District with respect to each of such improvement areas, and called an election within each of such improvement areas on the propositions of incurring bonded indebtedness, levying special taxes and setting an appropriations limit within the District.

On August 2, 2022, an election was held within Improvement Area No. 1 at which the landowners within Improvement Area No. 1 eligible to vote approved the issuance of bonds for the District with respect to Improvement Area No. 1 in an amount not to exceed $20,000,000. A Notice of Special Tax Lien for Improvement Area No. 1 was recorded in the office of the County Recorder on August 8, 2022 as Document No. 2022032110.

On August 16, 2022, the City Council, acting as the legislative body of the District, adopted Ordinance No. 1122 which authorizes the levy within Improvement Area No. 1 of special taxes pursuant to the Rate and Method of Apportionment of Special Tax for Improvement Area No. 1 approved at the August 2, 2022 election (the “Original Rate and Method”).

On April 1, 2025, the City Council approved Resolution No. 25-031, a resolution of consideration pursuant to which the City Council determined that the public convenience and necessity required, among other things, certain changes to the Original Rate and Method and that the bonded indebtedness for Improvement Area No. 1 be increased from $20,000,000 to $21,000,000. Specifically, the City Council determined to (i) modify the Special Tax rates to be levied on parcels of taxable property in Improvement Area No. 1, and (ii) increase the bonded indebtedness for Improvement Area No. 1 to $21,000,000.

Following the conduct of public hearings pursuant to the Act on May 6, 2025, the City Council adopted Resolution No. 25-047 calling special elections for submitting to the voters of the District the questions of, among others, whether to make certain changes to the Original Rate and Method and to increase the bonded indebtedness for Improvement Area No. 1. At a special election held on May 6, 2025, the owners of the property within Improvement Area No. 1 approved the authorization to levy special taxes within Improvement Area No. 1 pursuant to an Amended and Restated Rate and Method of Apportionment of Special Tax for Improvement Area No. 1 (the “Amended Rate and Method”), a copy of which is attached hereto as Appendix A, and the increase in bonded indebtedness of Improvement Area No. 1. An Amendment to the Notice of Special Tax Lien was recorded on May 19, 2025, as Document No. 2025014009 in the official records of the County. On May 20, 2025, the City Council, acting as the legislative body of the District, adopted Ordinance No. 1159N.S. (the “Ordinance”) which authorizes the levy within Improvement Area No. 1 of special taxes pursuant to the Amended Rate and Method approved at the May 6, 2025 election.

On August 2, 2022, the City Council, as legislative body of the District, also formed City of Paso Robles Community Facilities District No. 2022-2N (Olsen/South Chandler Ranch – Services) (the “Services CFD”) in order to provide for the funding of certain services within the boundaries of the District. The boundaries of the Services CFD overlap with the boundaries of the District. The special taxes collected in connection with the Services CFD are not available for the payment of debt services on the Bonds.

Property Ownership and Development Status
In2023, SH AA Vinedo LLC, a California limited liability company (“Shea”), originally purchased Planning Areas 3, 11, 12 and 15 in Improvement Area No. 1 from Olsen Ranch 212, LLC (the “Master Developer”). Shea has since sold Planning Area 3 to TH Paso Robles LLC, a California limited liability company (“Trumark” and together with Shea, the “Developers”), and is under contract with Trumark for the additional purchase of Planning Areas 11 and 12. The purchase of Planning Area 11 is expected to close by February 2026 and the purchase of Planning Area 12 is expected to close by November 2026. Shea has retained Planning Area 15 for development as further described herein.

Attachment 3
4 Improvement Area No. 1 has been mass graded and the backbone infrastructure necessary to serve Improvement Area No. 1 is complete. In-tract improvement with respect to Planning Area 15 are expected to be substantially completed by [DATE]. In-tract improvements with respect to Planning Area 3 are expected to be substantially complete by June 30, 2026, and with respect to Planning Area 11 and 12, sequentially thereafter.

Planning Areas 3, 11, and 12 consist of the same 40’ by 80’ alley load single family residential lots and product.

For that reason, formal schedules for the construction of in-tract improvements for Planning Areas 11 and 12 will not be established until sometime after the commencement of retail home sales within Planning Area 3 to allow for such schedules to coincide with the sales pace of lots within Planning Area 3. Based on the currently anticipated absorption rate of approximately three sales per month, Planning Area 11 in-tract improvements will need to be completed by November 2027, and Planning Area 12 in-tract improvements will need to be completed by July 2029. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT — The Development.” As of November 1, 2025, 52 building permits had been issued within Zone 1 of Improvement Area No. 1 and 3 building permits had been issued in Zone 2 of Improvement Area No. 1. Additionally, as of November 1, 2025, 23 homes within Improvement Area No. 1 had closed to individual homeowners, and the Developers collectively owned 23 completed homes, 6 homes in various stages of construction, 3 finished lots, and 158 partially improved lots. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” Appraisal Report
Integra Realty Resources (the “Appraiser”) has conducted an Appraisal of the land within Improvement Area No. 1 subject to the Special Tax (the “Appraisal Report”). The Appraisal Report sets forth an estimate of the market value of the fee simple interest of the taxable land and improvements within Improvement Area No.

1. The Appraiser is of the opinion that, based upon the assumptions and conditions contained in the Appraisal Report, the minimum market value of the taxable land and improvements in existence within Improvement Area No. 1, as of September 8, 2025 (the “Date of Value”), was $53,692,000. This estimate of value results in an appraised value-to-lien ratio within Improvement Area No. 1 of approximately [5.80]-to-1 *
for Improvement Area
No. 1 based on the estimated amount of all public agency land-secured debt, and approximately [__]-to-1 *
for
Improvement Area No. 1 based on the estimated amount of land-secured debt solely of the District. See “IMPROVEMENT AREA NO. 1 — Appraisal Report,” APPENDIX B — “APPRAISAL REPORT,” and “RISK FACTORS — Parity Taxes and Special Assessments.”
Sources of Payment for the Series 2025 Bonds
Special Taxes. The Special Tax is that tax which has been authorized to be levied against certain land within Improvement Area No. 1 pursuant to the Act and in accordance with the Amended Rate and Method to satisfy the Special Tax Requirement (as defined in the Amended Rate and Method). “Special Tax Revenues” are defined in the Fiscal Agent Agreement to mean the proceeds of the Special Taxes received by the City, including any scheduled payments, interest and penalties and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes in the amount of said lien and interest and penalties thereon. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes” and APPENDIX A — “AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” Pursuant to the Fiscal Agent Agreement, the Special Tax Revenues (except amounts deposited in the Administrative Expense Fund) and amounts on deposit in the Bond Fund, the Special Tax Fund and the Reserve Fund established under the Fiscal Agent Agreement will be pledged to the repayment of the Bonds, subject to the application of such funds in accordance with the Fiscal Agent Agreement.

Special taxes levied within improvement areas of the District other than Improvement Area No. 1 are not pledged to and are not available to pay debt service on the Bonds.

* Preliminary, subject to change.

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5 Reserve Fund. The Fiscal Agent Agreement establishes a Reserve Fund for the Series 2025 Bonds to be maintained at the Reserve Requirement. The Fiscal Agent Agreement provides that the Reserve Requirement for the Series 2025 Bonds and any Reserve Parity Bonds (as defined below) shall be, as determined by the City and provided in writing to the Fiscal Agent, equal to the lesser of (i) 10% of the original issue price of the Series 2025 Bonds and the Reserve Parity Bonds (as defined below) calculated in accordance with Treasury Regulations Section 1.148-2(f)(1); (ii) Maximum Annual Debt Service on the Series 2025 Bonds and the Reserve Parity Bonds; or (iii) 125% of average Annual Debt Service on the Series 2025 Bonds and the Reserve Parity Bonds.

On the date the Series 2025 Bonds are issued, amounts on deposit in the Reserve Fund in an amount of $[___] will equal the Reserve Requirement for the Series 2025 Bonds, and shall be increased only upon the issuance of Reserve Parity Bonds pursuant to the Fiscal Agent Agreement (i.e., the Reserve Requirement will not increase unless Reserve Parity Bonds are issued); provided, however, that the deposit to the Reserve Fund in connection with the issuance of the Reserve Parity Bonds shall not exceed the limitations of Treasury Regulation 1.148- 2(f)(1).

The term “Reserve Parity Bonds” is defined in the Fiscal Agent Agreement to mean Parity Bonds which share a combined Reserve Requirement with the Series 2025 Bonds and are secured by the Reserve Fund, pursuant to the Fiscal Agent Agreement.

Subject to the maximum annual amount of Special Taxes that may be levied in accordance with the Amended Rate and Method, if the amount in the Reserve Fund is less than the Reserve Requirement, the City will covenant in the Fiscal Agent Agreement to restore the amount therein to the Reserve Requirement by the inclusion of a sufficient amount in the next annual Special Tax levy within Improvement Area No. 1. The ability of the City Council to increase the annual Special Taxes levied in Improvement Area No. 1 to replenish the Reserve Fund is subject to the maximum annual amount of Special Taxes authorized for Improvement Area No. 1 and certain limitations in the Act. The moneys in the Reserve Fund will be used only for payment of the principal of and interest and any redemption premium on, the Series 2025 Bonds and any Reserve Parity Bonds, and, at the direction of the City, for deposit in the Rebate Fund. The City may establish a reserve fund or account in connection with the issuance of Parity Bonds which are not Reserve Parity Bonds, and in such event, such reserve fund or account for such Parity Bonds will not secure the Series 2025 Bonds and the Reserve Fund will not secure such Parity Bonds. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Reserve Fund.” The Special Tax Revenues are the primary security for the repayment of the Bonds. In the event that the Special Taxes are not paid when due, the only sources of funds available to pay the debt service on the Series 2025 Bonds are amounts held by the Fiscal Agent in the Bond Fund and the Reserve Fund, to the limited extent described in the Fiscal Agent Agreement. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Reserve Fund.”
Foreclosure Proceedings. The City will covenant in the Fiscal Agent Agreement, for the benefit of the owners of the Bonds, that it will order, and cause to be commenced, judicial foreclosure proceedings against properties in Improvement Area No. 1 with delinquent Special Taxes in excess of $7,000 by the October 1 following the close of the Fiscal Year in which such Special Taxes were due, and following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Taxes levied, if the amount on deposit in the Reserve Fund, or any reserve account established in connection with Parity Bonds which are not Reserve Parity Bonds, is less than the applicable Reserve Requirement, it will commence judicial foreclosure proceedings against all properties in Improvement Area No. 1 with delinquent Special Taxes by October 1, and diligently pursue to completion such foreclosure proceedings. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Proceeds of Foreclosure Sales.” There is no assurance that the property within Improvement Area No. 1 can be sold for the appraised value or assessed values described in this Official Statement, or for a price sufficient to pay the principal of and

 Preliminary; subject to change.

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6 interest on the Bonds in the event of a default in payment of Special Taxes by the current or future property owners within Improvement Area No. 1. See “RISK FACTORS — Property Values” and APPENDIX B — “APPRAISAL REPORT.”

EXCEPT FOR THE SPECIAL TAX REVENUES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CITY OR

THE DISTRICT, BUT ARE SPECIAL OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY

FROM SPECIAL TAXES AND AMOUNTS HELD UNDER THE FISCAL AGENT AGREEMENT AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT. SPECIAL TAXES LEVIED WITHIN IMPROVEMENT AREAS OF THE DISTRICT OTHER THAN IMPROVEMENT AREA NO. 1 ARE NOT PLEDGED TO AND ARE NOT AVAILABLE TO PAY DEBT SERVICE ON THE BONDS.

Superior Obligations; Parity Bonds. The City will covenant in the Fiscal Agent Agreement that it will not issue, on behalf of the District, any other obligations payable, as to principal or interest, from the Special Tax Revenues which have, or purport to have, any lien upon the Special Tax Revenues superior to the lien of the Bonds. Subject to the requirements set forth in the Fiscal Agent Agreement, the City, on behalf of the District, may issue bonds secured by the Special Tax Revenues on a parity with the Series 2025 Bonds (“Parity Bonds”), to finance additional public improvements and/or to refund all or a portion of the Outstanding Bonds or any Parity Bonds. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Superior Obligations; Parity Bonds.”
Description of the Series 2025 Bonds
The Series 2025 Bonds will be issued and delivered as fully registered Bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to actual purchasers of the Series 2025 Bonds (the “Beneficial Owners”) in integral multiples of $5,000, under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants. Beneficial Owners will not be entitled to receive physical delivery of the Series 2025 Bonds. In the event that the book-entry only system described in this Official Statement is no longer used with respect to the Series 2025 Bonds, the Series 2025 Bonds will be registered and transferred in accordance with the Fiscal Agent Agreement. See APPENDIX H — “INFORMATION CONCERNING DTC.” Principal of, premium, if any, and interest on the Series 2025 Bonds is payable by the Fiscal Agent to DTC, as the registered Owner of the Series 2025 Bonds. Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants. In the event that the book-entry only system is no longer used with respect to the Series 2025 Bonds, the Beneficial Owners will become the registered owners of the Series 2025 Bonds and will be paid principal and interest by the Fiscal Agent, all as described in this Official Statement. See “THE SERIES 2025 BONDS — Book-Entry Only System” and see APPENDIX H — “INFORMATION CONCERNING DTC.” Redemption
The Series 2025 Bonds are subject to optional redemption, mandatory redemption from Special Tax Prepayments, and mandatory sinking fund redemption as described in this Official Statement. For a more complete description of the Series 2025 Bonds and the documentation pursuant to which they are being sold and delivered, see “THE SERIES 2025 BONDS” and APPENDIX D — “SUMMARY OF LEGAL DOCUMENTS.” Tax Matters
In the opinion of Bond Counsel, based on an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, compliance with certain covenants, interest on the Series 2025 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue

Attachment 3
7 Code of 1986 and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Series 2025 Bonds is not a specific preference item for purposes of federal alternative minimum tax imposed on individuals and corporations, although Bond Counsel observes that such interest is included in annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations. Bond Counsel expresses no opinion regarding any other federal or state income tax consequences relating to the ownership or disposition of, or the accrual or receipt of interest on, the Series 2025 Bonds. Set forth in Appendix G is the proposed form of opinion of Bond Counsel expected to be delivered in connection with the issuance of the Series 2025 Bonds. For a more complete discussion of such opinion and certain other tax consequences incident to the ownership of the Series 2025 Bonds, including certain exceptions to the tax treatment of interest, see “LEGAL MATTERS — Tax Matters.” Professionals Involved in the Offering
U.S. Bank Trust Company, National Association will act as Fiscal Agent under the Fiscal Agent Agreement. Stifel, Nicolaus & Company, Incorporated is the Underwriter of the Series 2025 Bonds. Certain proceedings in connection with the issuance and delivery of the Series 2025 Bonds are subject to the approval of Best Best & Krieger LLP, Sacramento, California, Bond Counsel. Certain legal matters will be passed on for the City and the District by the City Attorney’s Office and by Best Best & Krieger LLP, Sacramento, California, as Disclosure Counsel, and for the Underwriter by Anzel Galvan LLP, San Francisco, California, as Underwriter’s Counsel. Other professional services have been performed by DTA Public Finance, Inc., Irvine, California, as Special Tax Consultant; NHA Advisors, San Rafael, California, as Municipal Advisor; and Integra Realty Resources, Rocklin, California, as Appraiser. At times, Bond Counsel and Disclosure Counsel represent the Underwriter in matters unrelated to the Series 2025 Bonds.

For information concerning the respects in which certain of the above-mentioned professionals, advisors, counsel and agents may have a financial or other interest in the offering of the Series 2025 Bonds, see “LEGAL MATTERS — Financial Interests.”
Continuing Disclosure
Pursuant to a Continuing Disclosure Certificate to be executed by the City (the “City Continuing Disclosure Certificate”), the City, on behalf of the District, will agree to provide, or cause to be provided, on an annual basis, to the Electronic Municipal Market Access System (“EMMA”) of the Municipal Securities Rulemaking Board (the “MSRB”), which can be found at www.emma.msrb.org (none of the information on which is incorporated in this Official Statement), certain financial information and operating data. The City will further agree to provide notice to EMMA of certain enumerated events. These covenants are being made in order to assist the Underwriter in complying with Rule 15c2-12(b)(5) (the “Rule”) adopted by the Securities and Exchange Commission (the “SEC”).

In addition, pursuant to Continuing Disclosure Certificates to be executed by each of the Developers (each, a “Developer Continuing Disclosure Certificate”), the Developers have agreed to provide or cause to be provided to EMMA certain information with respect to itself and the development within Improvement Area No. 1 and notice of certain listed events to assist the Underwriter in marketing the Series 2025 Bonds. The Underwriter does not consider the Developers to be an obligated party under the Rule.

See “CONTINUING DISCLOSURE” and Appendix E for a description of the specific nature of the annual reports to be filed by the City, on behalf of the District, and Appendix F for the semiannual reports to be filed by the Developers, and notices of listed events to be provided by the City, on behalf of the District, and the Developers.

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8 Bondowners’ Risks
Certain events could affect the timely repayment of the principal of and interest on the Series 2025 Bonds when due. See the section of this Official Statement entitled “RISK FACTORS” for a discussion of certain factors which should be considered, in addition to other matters set forth in this Official Statement, in evaluating an investment in the Series 2025 Bonds. The Series 2025 Bonds are not rated by any nationally recognized rating agency.

Forward Looking Statements
Certain statements included or incorporated by reference in this Official Statement constitute “forwardlooking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “budget” or other similar words. Such forwardlooking statements include, but are not limited to, certain statements contained in the information under the captions “IMPROVEMENT AREA NO. 1” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN

SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,

UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE

OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,

PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY AND THE DISTRICT DO NOT PLAN TO ISSUE ANY UPDATES OR

REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

Other Information
This Official Statement speaks only as of its date, and the information contained in this Official Statement is subject to change.

Brief descriptions of the Series 2025 Bonds and the Fiscal Agent Agreement are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references to the Fiscal Agent Agreement, the Series 2025 Bonds, and the constitution and laws of the State as well as the proceedings of the City Council, acting as the legislative body of the District, are qualified in their entirety by references to such documents, laws, and proceedings and, with respect to the Series 2025 Bonds, by reference to the Fiscal Agent Agreement.

Copies of the Fiscal Agent Agreement, the City Continuing Disclosure Certificate, and other documents and information referred to in this Official Statement are available for inspection and (upon request and payment to the City of a charge for copying, mailing and handling) for delivery from the City at 1000 Spring Street, Paso Robles, California 93446, Attention: City Manager.

THE FINANCING PLAN
A portion of the Series 2025 Bond proceeds will be used by the District to design, construct and/or acquire certain authorized facilities. See “IMPROVEMENT AREA NO. 1 — Description of Authorized Facilities” for a description of the public facilities authorized to be financed with the proceeds of the Bonds. After the issuance of the Series 2025 Bonds, the City may, on behalf of the District, issue up to an additional $[___]* principal amount of Parity Bonds for Improvement Area No. 1 to finance additional public improvements.

Attachment 3
9 Estimated Sources and Uses of Funds
The following table sets forth the expected sources and uses of the proceeds of the Series 2025 Bonds.

Sources of Funds
Principal Amount of the Series 2025 Bonds $
[Plus] [Net] Original Issue [Premium]
Total Sources $
Uses of Funds
Improvement Fund $
Administrative Expense Fund
Reserve Fund
Costs of Issuance Fund(1)
Capitalized Interest Fund(2)
Underwriter’s Discount
Total Uses $
(1) Costs of Issuance include legal fees, printing costs, Appraisal Report costs, Municipal Advisor fees, Special Tax Consultant fees, and Fiscal Agent fees, Bond Counsel and Disclosure Counsel fees, in addition to other miscellaneous costs incidental to Bond issuance and the formation of the District. (2) Represents a portion of capitalized interest on the Series 2025 Bonds through September 1, 2026.

THE SERIES 2025 BONDS
General Provisions
The Series 2025 Bonds will be dated their date of delivery and will bear interest at the rates per annum set forth on the inside cover page, payable semiannually on each March 1 and September 1, commencing on March 1, 2026 (each, an “Interest Payment Date”), and will mature in the amounts and on the dates set forth on the inside cover page of this Official Statement. The Series 2025 Bonds will be issued in fully registered form in integral multiples of $5,000. See “— Book-Entry Only System.” Interest will be calculated on the basis of a 360 day year comprised of twelve 30 day months. Each Series 2025 Bond will bear interest from the Interest Payment Date next preceding the date of authentication of that Series 2025 Bond, unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the fifteenth day of the month preceding such Interest Payment Date (such fifteenth day, the “Record Date”), in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the dated date of the Series 2025 Bonds; provided, however, that if at the time of authentication of a Series 2025 Bond, interest is in default, such Series 2025 Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment or from the date of the Series 2025 Bonds, if no interest has previously been paid or made available for payment.

Interest on any Series 2025 Bond will be paid to the person whose name appears as its registered Owner in the registration books held by the Fiscal Agent on the close of business on the Record Date. Interest will be paid by check of the Fiscal Agent mailed by first class mail, postage prepaid, to the registered Owner at its address

 Preliminary; subject to change.

Attachment 3
10 on the registration books. Pursuant to a written request prior to the Record Date of a Bondowner of at least $1,000,000 in aggregate principal amount of Bonds, payment will be made by wire transfer in immediately available funds to a designated account in the United States.

Principal of the Series 2025 Bonds and any premium due upon redemption is payable upon presentation and surrender of the Series 2025 Bonds at the principal corporate trust office of the Fiscal Agent in Los Angeles, California.

Authority for Issuance
The Series 2025 Bonds are issued pursuant to the Act and the Fiscal Agent Agreement. As required by the Act, the City Council has taken the following actions with respect to establishing the District and the Series 2025 Bonds:

Resolutions of Intention. On June 21, 2022, the City Council adopted a resolution stating its intention to establish the District, designate five improvement areas therein, including Improvement Area No. 1, and to authorize the levy of special taxes therein, and a resolution of intention to incur bonded indebtedness for Improvement Area No. 1 in an amount not to exceed $20,000,000.

Resolutions of Formation. Following a noticed public hearing conducted on August 2, 2022, the City Council adopted on that same date resolutions which established the District, designated five improvement areas therein, including Improvement Area No. 1, authorized the levy of special taxes within Improvement Area No. 1, and determined the necessity for the District to incur bonded indebtedness in a maximum aggregate principal amount of $20,000,000 for Improvement Area No. 1.

Resolution Calling Election. The resolutions adopted by the City Council on August 2, 2022 also called for a consolidated special election by the landowners in Improvement Area No. 1 on the issues of the levy of the special taxes, the incurring of bonded indebtedness for Improvement Area No. 1, and the establishment of an appropriations limit for the District.

Landowner Election and Declaration of Results. On August 2, 2022, an election was held at which the landowners within Improvement Area No. 1 approved ballot propositions authorizing the issuance of up to $20,000,000 of bonds to finance the design, construction, installation and/or acquisition of various public facilities, the levy of the special taxes, and the establishment of an appropriations limit for the District. The landowners within Improvement Area No. 1 approved ballot propositions authorizing the issuance bonds for the District in an aggregate principal amount not to exceed $20,000,000 for Improvement Area No. 1 to finance public facilities. On August 2, 2022, the City Council adopted a resolution approving the canvass of the votes and declaring the District to be fully formed with the authority to levy the special taxes within Improvement Area No. 1, to incur the bonded indebtedness for Improvement Area No. 1, and to have the established appropriations limit.

Special Tax Lien and Levy. The Notice of Special Tax Lien for Improvement Area No. 1 was recorded in the Office of the County Recorder of the County on August 8, 2022 as Document No. 2022032110 reflecting a continuing lien against the taxable property within Improvement Area No. 1 (the “Notice of Special Tax Lien”).

Ordinance Levying Special Taxes. On August 16, 2022, the City Council adopted Ordinance No. 1122 which authorized the levy of special taxes within Improvement Area No. 1.

Resolutions of Change and Election. On April 1, 2025, the City Council approved a resolution of consideration pursuant to which the Board determined that the public convenience and necessity required, among other things, certain changes to the Original Rate and Method and that the bonded indebtedness for Improvement Area No. 1 be increased from $20,000,000 to $21,000,000. Following the conduct of public hearings pursuant to the Act on May 6, 2025, the City Council adopted a resolution calling special elections for submitting to the voters

Attachment 3
11 of the District the questions of, among others, whether to make certain changes to the Original Rate and Method and to increase the bonded indebtedness for Improvement Area No. 1. At a special election held on May 6, 2025, the owners of the property within Improvement Area No. 1 approved the authorization to levy special taxes within Improvement Area No. 1 pursuant to the Amended Rate and Method and the increase in bonded indebtedness of Improvement Area No. 1. An Amendment to the Notice of Special Tax Lien was recorded on May 19, 2025, as Document No. 2025014009 in the official records of the County. On May 20, 2025, the City Council, acting as the legislative body of the District, adopted the Ordinance which authorizes the levy within Improvement Area No. 1 of special taxes pursuant to the Amended Rate and Method approved at the May 6, 2025 election.

Resolution Authorizing Issuance of the Bonds. On [DATE], 2025, the City Council adopted a resolution approving issuance of the Series 2025 Bonds.

Redemption

Optional Redemption. The Series 2025 Bonds are subject to redemption prior to their stated maturity dates at the option of the City on September 1, 20__ or any date thereafter, in whole or in part from such maturities as selected by the City (and by lot within any one maturity), in integral multiples of $5,000, at the option of the City from moneys derived by the City from any source, at a redemption price (expressed as a percentage of the principal amount of the Series 2025 Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:

Redemption Dates Redemption Prices
September 1, 20__ through and including August 31, 20__ 103% September 1, 20__ through and including August 31, 20__ 102 September 1, 20__ through and including August 31, 20__ 101 September 1, 20__ and any date thereafter 100
Mandatory Redemption From Special Tax Prepayments. The Series 2025 Bonds are subject to mandatory redemption prior to their stated maturity dates on any Interest Payment Date, as selected among maturities by the City (and by lot within any one maturity), in integral multiples of $5,000, from moneys derived by the City from Special Tax Prepayments, at redemption prices (expressed as percentages of the principal amounts of the Series 2025 Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:

Redemption Dates Redemption Prices
Any Interest Payment Date through September 1, 20__ 103% March 1, 20__ and September 1, 20__ 102
March 1, 20__ and September 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100 Special Tax Prepayments and amounts released from the Reserve Fund, and from a reserve fund established with respect to Parity Bonds, if applicable, in connection with Special Tax Prepayments will be allocated to the payment at maturity and redemption of Bonds and any Parity Bonds as nearly as practicable on a proportionate basis based on the outstanding principal amount of the Bonds and any Parity Bonds and such amounts shall be applied to redeem Bonds and Parity Bonds as nearly as practicable on a pro rata basis among maturities in increments of $5,000, as directed in writing by the City.

 Preliminary; subject to change.

Attachment 3
12 To date, no prepayment of Special Taxes have been made by the owners of the Taxable Property in Improvement Area No. 1, [and the Developers have advised that they have no current plans to make any partial or full prepayments]. No assurance can be given, however, that prepayments, in whole or in part, will not occur in the future which would result in a redemption of a portion of the Series 2025 Bonds prior to maturity. See “RISK FACTORS - Potential Early Redemption of Bonds from Prepayments or Community Facilities District Bond Proceeds.”
Mandatory Sinking Fund Redemption. The Series 2025 Bonds maturing on September 1, 20__ are subject to mandatory sinking fund redemption, in part, on September 1, 20__, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, and from sinking payments as follows:

Series 2025 Bonds Maturing on September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Payments
†
† Maturity.

The Series 2025 Bonds maturing on September 1, 20__ are subject to mandatory sinking fund redemption, in part, on September 1, 20__, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, and from sinking payments as follows:

Series 2025 Bonds Maturing on September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Payments
†
† Maturity.

The amounts in the foregoing schedules shall be reduced by the City pro rata among sinking fund redemption dates, in order to maintain substantially level Debt Service, as a result of any prior or partial optional or mandatory redemption from Special Tax Prepayments of the Series 2025 Bonds, and the City shall provide the Fiscal Agent with a revised sinking fund schedules.

Purchase of Bonds. In lieu of payment at maturity or redemption under the Fiscal Agent Agreement, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer’s Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer’s Certificate may provide, but in no event may Bonds be purchased at a price in excess of the redemption price thereof, plus interest accrued to the date of purchase. In such event, the City shall, as may be appropriate, provide to the Fiscal Agent a revised maturity schedule or a revised mandatory sinking fund schedule for the Bonds, or both.

Attachment 3
13 Notice to Fiscal Agent. An Authorized Officer shall give the Fiscal Agent written notice of the City’s intention to redeem Bonds not less than 45 days (or such lesser number of days acceptable to the Fiscal Agent) prior to the applicable redemption date. Such written notice shall specify whether Bonds are to be redeemed by optional redemption or mandatory redemption from Special Tax Prepayments. The requirement to provide such notice to the Fiscal Agent shall not apply to mandatory sinking fund redemption of the Bonds.

Redemption Procedure by Fiscal Agent. So long as the Bonds are held in book-entry form by the DTC, or its nominee, notice of redemption will be given to DTC in such manner as is set forth in the procedures of DTC.

It is the responsibility of DTC Participants to provide such notice. See APPENDIX H — “INFORMATION CONCERNING DTC.”
If the Bonds are no longer registered in the name of DTC, or its nominee, the Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, at least 30 days but not more than 60 days prior to the date fixed for redemption, or electronically submitted, to the Securities Depositories and to one or more Information Services selected by an Authorized Officer, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond registration books maintained by the Fiscal Agent at its Principal Office; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds. The Fiscal Agent shall also cause notice of any redemption to be mailed, in such manner and within such time, to the Underwriter.

Such notice shall state the date of such notice, the date of issue of the Bonds, the place or places of redemption, the redemption date, the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed, by giving the individual CUSIP number and Bond number of each Bond to be redeemed, or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called for redemption in part the portion of the principal of the Bond to be redeemed, shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. The cost of the mailing and publication of any such redemption notice shall be paid by the District.

Any notice of optional redemption of the Bonds delivered in accordance with the Fiscal Agent Agreement may be conditional and if any condition stated in the notice of redemption shall not have been satisfied on or prior to the redemption date, said notice shall be of no force and effect and the City shall not be required to redeem such Bonds and the redemption shall not be made and the Fiscal Agent shall within a reasonable time thereafter give notice, to the persons and in the manner in which the notice of redemption was given, that such condition or conditions were not met and that the redemption was cancelled. The City shall have the right to rescind any notice of redemption prior to maturity or prior to the date fixed for such redemption prior to maturity, in which case such redemption shall be cancelled and annulled and such cancellation shall not constitute an event of default. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date so fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under the Fiscal Agent Agreement. The City and the Fiscal Agent shall have no liability to the Owners or any other party related to or arising from such rescission or cancellation of redemption. The Fiscal Agent shall mail notice of such rescission or cancellation of redemption in the same manner as the original notice of redemption was sent under the Fiscal Agent Agreement.

Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer.

Attachment 3
14 In the event of a mandatory redemption from Special Tax Prepayments pursuant to the Fiscal Agent Agreement, the City shall transfer or cause to be transferred to the Fiscal Agent for deposit in the Bond Fund moneys in an amount equal to the redemption price of the Bonds being redeemed on or before the fifteenth day of the month preceding the Interest Payment Date upon which such Bonds are to be redeemed.

Selection of Bonds for Redemption. If less than all the Bonds Outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or a multiple thereof, and, in selecting portions of such Bonds for redemption, the Fiscal Agent shall treat each such Bond as representing the number of Bonds of $5,000 denomination which is obtained by dividing the principal amount of such Bond to be redeemed in part by $5,000.

Whenever provision is made in the Fiscal Agent Agreement for the redemption of less than all of the Bonds of a maturity or any given portion thereof, the Fiscal Agent shall select the Bonds of such maturity to be redeemed, from all Bonds of such maturity or such given portion thereof not previously called for redemption, by lot within a maturity in any manner which the Fiscal Agent in its sole discretion shall deem appropriate.

Partial Redemption of Bonds. Upon surrender of Bonds redeemed in part only, the City shall execute, and the Fiscal Agent shall authenticate and deliver to the Owner, at the expense of the District, a new Bond or Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds.

Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds called for redemption shall have been deposited in the Bond Fund, such Bonds shall cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price, and interest shall cease to accrue on the Bonds to be redeemed on the redemption date specified in the notice of redemption.

All Bonds redeemed and purchased by the Fiscal Agent pursuant to the Fiscal Agent Agreement shall be cancelled by the Fiscal Agent.

Registration, Transfer and Exchange
Registration. The Fiscal Agent will keep sufficient books for the registration and transfer of the Bonds.

The ownership of the Bonds will be established by the Bond registration books held by the Fiscal Agent.

Transfer or Exchange. Whenever any Bond is surrendered for registration of transfer or exchange, the Fiscal Agent will authenticate and deliver a new Bond or Bonds of the same maturity, for a like aggregate principal amount of authorized denominations; provided that the Fiscal Agent will not be required to register transfers or make exchanges of (i) Bonds for a period of 15 days next preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds selected for redemption.

Book-Entry Only System
The Bonds will be issued in book-entry form and DTC will act as securities depository. So long as the Bonds are held in book-entry form, principal of, premium, if any, and interest on the Bonds will be paid by the Fiscal Agent directly to DTC for distribution to the beneficial owners of the Bonds in accordance with procedures adopted by DTC. See APPENDIX H — “INFORMATION CONCERNING DTC.” Debt Service Schedule
The following table presents the annual debt service on the Series 2025 Bonds (including sinking fund redemptions), assuming there are no optional redemptions or mandatory redemptions from Special Tax

Attachment 3
15 Prepayments pursuant to the Amended Rate and Method. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes” and “THE SERIES 2025 BONDS — Redemption.” ANNUAL DEBT SERVICE SCHEDULE
Bond Year
Ending
September 1
2025 Bonds
Principal
2025 Bonds
Interest
Total Annual
Debt Service
2026 $ $ $
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
2055
2056
2057
2058
2059
2060
TOTAL $ $ $
Source: Underwriter.

 Preliminary; subject to change.

Attachment 3
16 SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS
Limited Obligations
The Bonds are special, limited obligations of the District payable only from amounts pledged under the Fiscal Agent Agreement and from no other sources.

The Special Tax Revenues are the primary security for the repayment of the Bonds. Under the Fiscal Agent Agreement, the City and the District have pledged to repay the Bonds from the Special Tax Revenues (which are the proceeds of the Special Taxes received by the City, including any scheduled payments, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes in the amount of said lien and interest and penalties thereon) and all moneys deposited in the Bond Fund and the Special Tax Fund, to the extent set forth in the Fiscal Agent Agreement. The Series 2025 Bonds and any Reserve Parity Bonds shall be further secured by amounts on deposit in the Reserve Fund.

In the event that the Special Tax Revenues are not received when due, the only sources of funds available to pay the debt service on the Bonds are amounts held by the Fiscal Agent in the Bond Fund and the Reserve Fund.

NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE

COUNTY OF SAN LUIS OBISPO, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE

SPECIAL TAX REVENUES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CITY OR THE DISTRICT, BUT

ARE SPECIAL OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM SPECIAL TAXES

AND AMOUNTS HELD UNDER THE FISCAL AGENT AGREEMENT AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT.

Special Taxes
Authorization and Pledge. In accordance with the provisions of the Act, the City Council established the District on August 2, 2022 for the purpose of financing the design, construction, installation and/or acquisition of various public improvements required in connection with the proposed development within the District. At a special election held on May 6, 2025, the owners of the property within Improvement Area No. 1 authorized the District to incur indebtedness in an amount not to exceed $21,000,000 for Improvement Area No. 1 and approved the Amended Rate and Method which authorizes the Special Tax to be levied to repay District indebtedness for Improvement Area No. 1, including the Bonds. On May 20, 2025, the City Council adopted Ordinance No. 1159N.S. which authorized the levy of Special Taxes in Improvement Area No. 1 pursuant to the Amended Rate and Method.

The City will covenant in the Fiscal Agent Agreement that each year it will levy Special Taxes up to the maximum rates permitted under the Amended Rate and Method in an amount sufficient, together with other amounts on deposit in the Special Tax Fund, to pay the principal of and interest on any Outstanding Bonds (and any Parity Bonds that may be issued), to replenish the Reserve Fund (and any reserve funds established in connection with Parity Bonds which are not Reserve Parity Bonds) and to pay the estimated Administrative Expenses. Notwithstanding the foregoing, pursuant to Section 53321(d) of the Act, under no circumstances will the Special Taxes levied against any Assessor’s Parcel used as a private residence be increased as a consequence of delinquency or default by the owner of any other Assessor’s Parcel or Assessor’s Parcels within Improvement Area No. 1 by more than 10%. Additionally, special taxes levied on property located in improvement areas of the District, other than Improvement Area No. 1, cannot be used to pay debt service on the Series 2025 Bonds.

Attachment 3
17 The Special Taxes levied in any Fiscal Year may not exceed the maximum rates authorized pursuant to the Amended Rate and Method. See APPENDIX A — “AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” There is no assurance that the Special Tax proceeds will, in all circumstances, be adequate to pay the principal of and interest on the Bonds when due. See “RISK FACTORS — Insufficiency of Special Taxes.”
Amended Rate and Method of Apportionment of Special Tax. All capitalized terms used in this section shall have the meaning set forth in Appendix A hereto.

Classification of Parcels. For each Fiscal Year, commencing with Fiscal Year 2024-25, each Assessor’s Parcel of Taxable Property in Improvement Area No. 1 shall be assigned to a Zone and classified as Developed Property, Final Mapped Property, Undeveloped Property, Public Property and/or Property Owner’s Association Property, and all such Taxable Property shall be subject to the levy of Special Taxes in accordance with the Amended Rate and Method.

Developed Property shall be further classified as Residential Property or Non-Residential Property. Each Assessor’s Parcel of Residential Property shall be further categorized into Land Use Classes based on its Zone and Residential Floor Area and assigned the appropriate Assigned Special Tax.

Maximum Special Tax Rates.

Developed Property. The Maximum Special Tax for each Assessor’s Parcel in Improvement Area No. 1 classified as Developed Property within a Zone shall be the greater of (i) the amount derived by application of the Assigned Special Tax or (ii) the amount derived by application of the Backup Special Tax.

Each Fiscal Year, each Assessor’s Parcel of Residential property or Non-Residential Property shall be subject to an Assigned Special Tax. The Assigned Special Tax applicable to an Assessor’s Parcel of Developed Property shall be determined based on the applicable Zone pursuant to the tables below.

Assigned Special Tax Rates for
Developed Property
(Zone 1)
Land Use
Category Description Residential Floor Space Assigned Special Tax Rate 1 Residential Property > = 2,900 sq. ft. $9,466 per Dwelling Unit 2 Residential Property 2,700 – 2,899 sq. ft. $8,835 per Dwelling Unit 3 Residential Property 2,500 – 2,699 sq. ft. $7,534 per Dwelling Unit 4 Residential Property 2,300 – 2,499 sq. ft. $6,825 per Dwelling Unit 5 Residential Property 2,100 – 2,299 sq. ft. $6,659 per Dwelling Unit 6 Residential Property 1,900 – 2,099 sq. ft. $5,840 per Dwelling Unit 7 Residential Property 1,700 – 1,899 sq. ft. $5,713 per Dwelling Unit 8 Residential Property < 1,700 sq. ft. $5,438 per Dwelling Unit 9 Non-Residential Property N/A $44,270 per Acre

Attachment 3
18 Assigned Special Tax Rates for
Developed Property
(Zone 2)
Land Use
Category Description Residential Floor Space Assigned Special Tax Rate 10 Residential Property > = 2,100 sq. ft. $5,721 per Dwelling Unit 11 Residential Property 1,850 – 2,099 sq. ft. $5,635 per Dwelling Unit 12 Residential Property 1,600 – 1,849 sq. ft. $5,272 per Dwelling Unit 13 Residential Property < 1,600 sq. ft. $4,996 per Dwelling Unit 14 Non-Residential Property N/A $76,163 per Acre
Backup Special Tax. The Backup Special Tax for an Assessor’s Parcel of Developed Property shall be calculated independently for each Zone. The Backup Special Tax attributable to property within a Final Map within a Zone shall be determined by multiplying the Acreage of all Taxable Property located within such Zone, excluding Acreage associated with current or expected Non-Residential Property, Taxable Public Property and Taxable Property Owner Association Property, if any, in such Final Map, by the amount shown in the table below for such Zone and dividing the product by the total number of Dwelling Units expected to be constructed within such Zone.

Backup Special Tax
Zone Backup Special Tax
1 $44,270 per Acre
2 $73,163 per Acre
Notwithstanding the foregoing, if all or any portion of a Final Map is subsequently changed or modified, then the Backup Special Tax for each Assessor’s Parcel of Residential Property in such Final Map, or the portion thereof that is changed or modified, will be a rate per Acre calculated as follows:

1. Determine the total Backup Special Taxes anticipated to apply to the changed or modified portion of the Final Map prior to the change or modification.

2. Divide the amount determined pursuant to the provisions of the Amended Rate and Method summarized in paragraph 1 above by total Acreage of Residential Property excluding Taxable Public Property and Taxable Property Owner Association Property which is ultimately expected to exist in such changed or modified Final Map area, as reasonably determined by the CFD Administrator.

3. The result is the Backup Special Tax per Acre, which shall be applicable to all Assessor’s Parcels of Residential Property in such changed or modified Final Map.

Taxable Property Owner Association Property, Taxable Public Property and Undeveloped Property. The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property, Taxable Property Owner Association Property, and Taxable Public Property in each Zone in Improvement Area No. 1 shall equal $44,270 per Acre for Zone 1 and $73,163 per Acre for Zone 2.

Method of Apportionment and Levy of the Special Tax. For each Fiscal Year, the District shall determine the Improvement Area No. 1 Special Tax Requirement and shall levy the Special Tax until the total Special Tax levy equals the Special Tax Requirement. The Special Tax shall be levied in each Fiscal Year as follows:

Attachment 3
19 First: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property within all Zones in Improvement Area No. 1 up to 100% of the applicable Assigned Special Tax to satisfy the Special Tax Requirement for Improvement Area No. 1.

Second: If additional monies are needed to satisfy the Special Tax Requirement for Improvement Area No. 1 after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Final Mapped Property in Improvement Area No. 1 at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.

Third: If additional monies are needed to satisfy the Special Tax Requirement for Improvement Area No. 1 after the first two steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property in Improvement Area No. 1 at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.

Fourth: If additional monies are needed to satisfy the Improvement Area No. 1 Special Tax Requirement after the first three steps have been completed, the Special Tax on each Assessor’s Parcel of Developed Property in Improvement Area No. 1 whose Maximum Special Tax is the Backup Special Tax shall be increased Proportionately from the Assigned Special Tax up to 100% of the Maximum Special Tax as needed to satisfy the Special Tax Requirement.

Fifth: If additional monies are needed to satisfy the Improvement Area No. 1 Special Tax Requirement after the first four steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Taxable Property Owner Association Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.

Sixth: If additional monies are needed to satisfy the Improvement Area No. 1 Special Tax Requirement after the first five steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Taxable Public Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.

Notwithstanding the above, pursuant to Section 53321(d)(3) of the California Government Code, under no circumstances will the Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential property be increased as a consequence of delinquency or default by the owner or owners of any other Assessor Parcel(s) within Improvement Area No. 1 by more than 10% above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults. To the extent that the levy on the Special Tax on certain Assessor’s Parcels is limited by the provision in the preceding sentence, the levy of the Special Tax on each Assessor’s Parcel of all other property shall continue in equal percentages up to 100% of the Assigned Special Tax.

Exemptions. The District shall not levy Special Taxes on (i) Property Owner Association Property or Public Property in Zone 1 and Zone 2, provided that an Assessor’s Parcel shall not be exempt and shall be classified as Taxable Property Owner Association property and Taxable Public Property if exempting such property would reduce the sum of all Taxable Property in Zone 1 to less than 8.4 Acres and sum of all Taxable Property in Zone 2 to less than 11.7 Acres.

No Special Tax shall be levied on any Assessor’s Parcel in any Fiscal Year in which such Assessor’s Parcel is classified as Exempt Welfare Exemption Property.

Term of Special Tax. The Special Tax shall be levied for the period necessary to fully satisfy the Special Tax Requirement, but in no event shall it be levied after Fiscal Year 2073-74.

Attachment 3
20 Debt Service Coverage. The Special Tax is only expected to be levied in an amount needed to pay the debt service due on the related series of Bonds, plus the Administrative Expense Requirement. The Assigned Special Taxes that may be levied in each Fiscal Year produce an amount equal to at least 110% of the debt service due on the Bonds in such Fiscal Year plus Administrative Expenses of $25,000.

Maximum Special Tax Capacity; Limitation on Special Tax Levy and Potential Impact on Coverage.

The Special Tax is only expected to be levied in an amount needed to pay the debt service due on the Bonds, plus the Administrative Expense Requirement. Though the District has the ability to increase the Special Tax levy to account for delinquencies, pursuant to Section 53321(d) of the California Government Code, under no circumstances will the Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential Property be increased as a consequence of delinquency or default by the owner or owners of any other Assessor Parcel(s) within Improvement Area No. 1 by more than 10% above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults. As a result, it is possible that the District may not be able to increase the tax levy to the Assigned Special Tax in all years. Subject, however, to the limitations on the District’s ability to levy the necessary amount of Special Taxes as imposed by Section 53321(d) of the California Government Code, the District can levy Special Taxes on Final Mapped Property and Undeveloped Property up to the maximum amount of such Special Taxes to make-up all or a portion of any shortfall in the Special Tax levy.

Prepayment of Annual Special Taxes. The Special Tax obligation for an Assessor’s Parcel may be prepaid, either in full or in part, in accordance with formulas set forth in the Amended Rate and Method. See APPENDIX A — “AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
[The Series 2025 Bonds have been sized so that, assuming no delinquencies, Special Taxes, levied in accordance with the Amended Rate and Method, will generate in each Fiscal Year beginning in Fiscal Year 2025- 26 not less than 110% of debt service payable with respect to the Bonds in the calendar year that begins in that Fiscal Year, plus Administrative Expenses.]
Prepayment of Special Taxes. The City Council may allow property owners to fully or partially prepay the obligation of parcels of Taxable Property to pay the Special Taxes.

Additionally, the City will covenant in the Fiscal Agent Agreement that the City shall cause all applications of owners of property in Improvement Area No. 1 to prepay and satisfy the Special Tax obligation for their property to be reviewed by the Special Tax Consultant. The City will not accept any such prepayment unless the Special Tax Consultant certifies in writing that following the acceptance of the proposed prepayment by the City and the redemption of Bonds with such prepayment, the amount of Maximum Special Tax 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. For purposes of such certification, “Taxable Property” has the meaning set forth in the Amended Rate and Method. (See APPENDIX A — “AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX”). See “THE SERIES 2025 BONDS — Redemption — Mandatory Redemption from Special Tax Prepayments.”
Collection and Application of Special Taxes. The Special Taxes are collected by the Treasurer-Tax Collector of the County in the same manner and at the same time as ad valorem property taxes. The City, on behalf of the District may, however, collect the Special Taxes at a different time or in a different manner if necessary to meet its financial obligations.

Covenants to Protect Special Tax Rates. The City will make certain covenants in the Fiscal Agent Agreement for the purpose of ensuring that the current Maximum Special Tax rates and method of collection of the Special Taxes are not altered in a manner that would impair the City’s ability to collect sufficient Special

Attachment 3
21 Taxes to pay debt service on the Bonds and Administrative Expenses when due. The City will covenant that it will not initiate proceedings under the Act to reduce the Maximum Special Tax rates (the “Maximum Rates”) on then existing Developed Property in Improvement Area No. 1 below the amounts which are necessary to provide Special Tax Revenues in an amount equal to estimated Administrative Expenses for the then current Fiscal Year plus an amount equal to 110% of Maximum Annual Debt Service on the Outstanding Bonds. See “RISK FACTORS — Proposition 218.”
The City will further covenant that in the event an ordinance is adopted by initiative pursuant to Section 3 of Article XIII C of the California Constitution, which purports to reduce or otherwise alter the Maximum Rates, it will commence and pursue legal action seeking to preserve its ability to comply with its covenant contained in the preceding paragraph.

The City will covenant not to permit the tender of Bonds in payment of any Special Taxes except upon receipt of a certificate of an Independent Financial Consultant certifying that accepting such tender will not result in the City having insufficient Special Tax Revenues to pay the principal of and interest on the Outstanding Bonds following such tender. See “RISK FACTORS — Non-Cash Payments of Special Taxes.” Although the Special Taxes constitute liens on taxable parcels within Improvement Area No. 1, they do not constitute a personal indebtedness of the owners of property within Improvement Area No. 1. Moreover, other liens for taxes and/or assessments already exist on the property located within Improvement Area No. 1 and others could come into existence in the future in certain situations without the consent or knowledge of the City or the landowners in Improvement Area No. 1. See “RISK FACTORS — Parity Taxes and Special Assessments.” There is no assurance that property owners will be financially able to pay the annual Special Taxes or that they will pay such taxes even if financially able to do so, all as more fully described in the section of this Official Statement entitled “RISK FACTORS.”
Proceeds of Foreclosure Sales. The net proceeds received following a judicial foreclosure sale of land within Improvement Area No. 1 resulting from a landowner’s failure to pay the Special Taxes when due are included within the Special Tax Revenues pledged to the payment of principal of and interest on the Bonds under the Fiscal Agent Agreement.

Pursuant to Section 53356.1 of the Government Code, the City will covenant in the Fiscal Agent Agreement with and for the benefit of the Owners of the Bonds that (i) it will order, and cause to be commenced, judicial foreclosure proceedings against properties in Improvement Area No. 1 with delinquent Special Taxes in excess of $7,000 by the October 1 following the close of the Fiscal Year in which such Special Taxes were due, and (ii) following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Taxes levied, if the amount on deposit in the Reserve Fund, or any reserve account established in connection with Parity Bonds which are not Reserve Parity Bonds, is less than the applicable Reserve Requirement, it will commence judicial foreclosure proceedings against all properties in Improvement Area No. 1 with delinquent Special Taxes by October 1, and diligently pursue to completion such foreclosure proceedings. See APPENDIX D — “SUMMARY OF LEGAL DOCUMENTS — OTHER COVENANTS OF THE CITY.”
If foreclosure is necessary and other funds (including amounts in the Reserve Fund) have been exhausted, debt service payments on the Bonds could be delayed until the foreclosure proceedings have ended with the receipt of any foreclosure sale proceeds. Judicial foreclosure actions are subject to the normal delays associated with court cases and may be further slowed by bankruptcy actions, involvement by agencies of the federal government and other factors beyond the control of the City and the District. See “RISK FACTORS — Bankruptcy and Foreclosure.” Moreover, no assurances can be given that the real property subject to foreclosure and sale at a judicial foreclosure sale will be sold or, if sold, that the proceeds of such sale will be sufficient to pay any delinquent Special Tax installment. See “RISK FACTORS — Property Values.” Although the Act authorizes the City to cause such an action to be commenced and diligently pursued to completion, the Act does not impose

Attachment 3
22 on the District or the City any obligation to purchase or acquire any lot or parcel of property sold at a foreclosure sale if there is no other purchaser at such sale. The Act provides that, in the case of a delinquency, the Special Tax will have the same lien priority as is provided for ad valorem taxes.

The City is not obligated to enforce the lien of any delinquent installment of the Special Tax for any Fiscal Year in which the City has received 100% of the amount of the installment from the County under the Teeter Plan (as defined below). The District is currently included in the County’s Teeter Plan (as defined below). See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Teeter Plan” and “RISK FACTORS — Teeter Plan Termination.”
Teeter Plan
The Board of Supervisors of the County approved the implementation of the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”), as provided for in Section 4701 et seq. of the California Revenue and Taxation Code. Under the Teeter Plan, the County apportions secured property taxes on an accrual basis (irrespective of actual collections) to local political subdivisions for which the County acts as the tax-levying or tax-collecting agency.

Under the Teeter Plan, the County distributes tax collections on a cash basis to certain taxing entities during the fiscal year and at year-end distributes 100% of any taxes delinquent as of June 30th to the taxing entities and those special assessment districts and community facilities districts that the County determines are eligible to participate in the Teeter Plan. The County may make eligibility determinations on an annual basis and may exclude a district or an individual parcel that had previously been included in the plan. The District is currently included in the County’s Teeter Plan. The County has the discretion to determine which delinquent special taxes will be paid through the Teeter Plan on a case-by-case basis. See “RISK FACTORS — Teeter Plan Termination.” Special Tax Fund
Pursuant to the Fiscal Agent Agreement, there will be established, as a separate fund to be held by the Fiscal Agent, the “City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch – Facilities) (Improvement Area No. 1) Special Tax Fund” (the “Special Tax Fund”) to the credit of which the City will deposit, not later than ten (10) Business Days after receipt, all Special Tax Revenues received by the City.

Moneys in the Special Tax Fund will be held by the Fiscal Agent for the benefit of the City and the Owners of the Bonds, will be disbursed as provided below and, pending disbursement, will be subject to a lien in favor of the Owners of the Bonds. Notwithstanding the foregoing, any amounts received by the City which constitute Special Tax Prepayments will be transferred by the City not later than ten (10) business days after receipt to the Fiscal Agent for deposit by the Fiscal Agent in the “Special Tax Prepayments Account” established pursuant to the Fiscal Agent Agreement.

As soon as practicable after the receipt from the City of any Special Tax Revenues, but no later than ten (10) Business Days after such receipt, the Fiscal Agent will withdraw from the Special Tax Fund and deposit in the Administrative Expense Fund, an amount equal to the Priority Administrative Expense Requirement.

Thereafter, the Fiscal Agent shall deposit in the Interest Account and the Principal Account of the Bond Fund the amounts required by the Fiscal Agent Agreement, as described under “— Bond Fund” below. If after such deposits are made to the Administrative Expense Fund, the Interest Account, and the Principal Account there are funds remaining on deposit in the Special Tax Fund, the City shall instruct the Fiscal Agent by an Officer’s Certificate (upon which the Fiscal Agent may conclusively rely) to transfer such amount from the Special Tax Fund to and deposit it, pro rata based on the Outstanding principal amount of the Bonds, in the Reserve Fund and to any reserve accounts established in connection with Parity Bonds which are not Reserve Parity Bonds, to the

Attachment 3
23 extent that the amounts on deposit therein are less than the applicable Reserve Requirement. Any funds remaining after such deposits shall be retained in the Special Tax Fund.

The term “Priority Administrative Expense Requirement” is defined in the Fiscal Agent Agreement to mean an annual amount equal to $25,000.

On September 2 of each year, the amount, if any, on deposit in the Special Tax Fund, together with the amount then on deposit in the Bond Fund (including the Principal Account therein but excluding the Interest Account and the Special Tax Prepayments Account), as determined by the City, shall not exceed the greater of (i) one year’s earnings on such amounts, or (ii) one-twelfth (1/12 th) of Annual Debt Service for the then current Bond
Year. If on September 2 of any year the amount on deposit in the Special Tax Fund, together with the amount then on deposit in the Bond Fund (other than such excluded amounts), exceeds the maximum amount allowable pursuant to the preceding sentence, as determined by the City and communicated in writing by an Authorized Officer to the Fiscal Agent (upon which the Fiscal Agent may conclusively rely), moneys shall be transferred from the Special Tax Fund to the Administrative Expense Fund to pay any additional Administrative Expenses during the then current Fiscal Year, and thereafter shall be retained in the Special Tax Fund as directed in writing by the City.

Moneys in the Special Tax Fund will be invested and deposited in accordance with the Fiscal Agent Agreement. Investment Earnings will be retained in the Special Tax Fund to be used for the purposes of such fund to the extent set forth in the Fiscal Agent Agreement. See APPENDIX D — “SUMMARY OF LEGAL DOCUMENTS.”
Bond Fund
Pursuant to the Fiscal Agent Agreement, there will be established, as a separate fund to be held by the Fiscal Agent, the “City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 1) Bond Fund” (the “Bond Fund”) and within the Bond Fund, an Interest Account [(and within the Interest Account, a Capitalized Interest Sub-Account)], a Principal Account, and a Special Tax Prepayments Account. Moneys in the Bond Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds.

On or before each Interest Payment Date, the Fiscal Agent shall transfer from the Special Tax Fund and deposit into the following respective accounts in the Bond Fund, the following amounts in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Special Tax Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority:

Interest Account. On or before each Interest Payment Date, the Fiscal Agent shall deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest becoming due and payable on the Bonds on such date. No deposit need be made into the Interest Account on any Interest Payment Date if the amount on deposit therein is at least equal to the interest becoming due and payable on the Bonds on such date. All moneys in the Interest Account, including the Capitalized Interest Sub-Account, shall be used and withdrawn by the Fiscal Agent solely for the purpose of paying the interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds redeemed prior to maturity). All funds in the Capitalized Interest Sub-Account shall be used and withdrawn to pay interest on the Bonds prior to using any other funds on deposit in the Interest Account for such purpose. All amounts on deposit in the Interest Account on the first day of any Bond Year, to the extent not required to pay any interest then having become due and payable on the Outstanding Bonds, shall be withdrawn therefrom by the Fiscal Agent and transferred to the Special Tax Fund.

Attachment 3
24 Principal Account. On or before each Interest Payment Date which occurs on September 1, the Fiscal Agent shall deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Bonds becoming due and payable on such date, or the redemption price of the Bonds (consisting of the principal amount thereof and any applicable redemption premium) required to be redeemed on such date pursuant to the Fiscal Agent Agreement. All moneys in the Principal Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of (i) paying the principal of the Bonds at the maturity thereof, or (ii) paying the principal of and premium (if any) on any Bonds upon the redemption thereof pursuant to the Fiscal Agent Agreement. All amounts on deposit in the Principal Account on the first day of any Bond Year, to the extent not required to pay the principal of any Outstanding Bonds then having become due and payable, shall be withdrawn therefrom by the Fiscal Agent and transferred to the Special Tax Fund.

In the event that moneys on deposit in the Special Tax Fund will be insufficient on any Interest Payment Date for the Fiscal Agent to deposit the required amounts in the Interest Account and the Principal Account, as provided above, the Fiscal Agent shall deposit the available funds first to the Interest Account up to the full amount required to cause the aggregate amount on deposit therein to equal the amount of interest becoming due and payable on the Bonds on the Interest Payment Date, and shall then deposit the remaining available funds in the Special Tax Fund to the Principal Account up to the full amount required to cause the aggregate amount on deposit therein to equal the amount, if any, of principal becoming due and payable on the Bonds on the Interest Payment Date. If, after making such deposits to the Interest Account and the Principal Account, and after transferring moneys from the Reserve Fund (or from the reserve account established with respect to a series of Parity Bonds, as applicable) to such accounts, as provided in the Fiscal Agent Agreement, the amount on deposit in the Principal Account is insufficient to pay the full amount of the principal of each of the Bonds which is to be paid at maturity or redeemed on the Interest Payment Date, the Fiscal Agent shall make a prorated payment of the principal of each of such Bonds as specified in an Officer’s Certificate provided to the Fiscal Agent.

Reserve Fund
In order to secure further the payment of principal of and interest on the Series 2025 Bonds and any Reserve Parity Bonds, the City will, upon delivery of the Series 2025 Bonds, deposit in the Reserve Fund, and thereafter will maintain in the Reserve Fund, an amount equal to the Reserve Requirement. The Fiscal Agent Agreement provides that the Reserve Requirement for the Series 2025 Bonds and any Reserve Parity Bonds (as defined in the Fiscal Agent Agreement) shall be, as determined by the City and provided in writing to the Fiscal Agent, equal to the lesser of (i) 10% of the original issue price of the Series 2025 Bonds and the Reserve Parity Bonds calculated in accordance with Treasury Regulations Section 1.148-2(f)(1); (ii) Maximum Annual Debt Service on the Series 2025 Bonds and the Reserve Parity Bonds or (iii) 125% of average Annual Debt Service on the Series 2025 Bonds and the Reserve Parity Bonds. On the date the Series 2025 Bonds are issued, amounts on deposit in the Reserve Fund, in an amount of $[___], will equal the Reserve Requirement for the Series 2025 Bonds and shall be increased only upon the issuance of Reserve Parity Bonds pursuant to the Fiscal Agent Agreement; provided, however, that the deposit to the Reserve Fund in connection with the issuance of the Reserve Parity Bonds shall not exceed the limitations of Treasury Regulation 1.148-2(f)(1).

Moneys in the Reserve Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Series 2025 Bonds and any Reserve Parity Bonds as a reserve for the payment of the principal of and interest and any premium on the Series 2025 Bonds and any Reserve Parity Bonds and shall be subject to a lien in favor of the Owners of the Series 2025 Bonds and any Reserve Parity Bonds.

Subject to the limits on the maximum annual Special Tax which may be levied within Improvement Area No. 1, as described in the Amended Rate and Method, the City will covenant to levy Special Taxes in an amount that is anticipated to be sufficient, in light of the other intended uses of the Special Tax proceeds, to maintain the

 Preliminary; subject to change.

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25 balance in the Reserve Fund at the Reserve Requirement. The ability of the legislative body of the District to increase the annual Special Taxes levied in Improvement Area No. 1 to replenish the Reserve Fund is additionally subject to certain additional limitations under the Act restricting the amount by which Special Taxes on taxable parcels can be increased due to delinquencies of other taxable parcels.

Except as otherwise provided in the Fiscal Agent Agreement, all amounts on deposit in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Interest Account and the Principal Account of the Bond Fund in the event of any deficiency at any time in either of such accounts of the amount then required for payment of the principal of and interest and any premium on the Series 2025 Bonds and any Reserve Parity Bonds or, in accordance with the provisions of the Fiscal Agent Agreement for the purpose of redeeming Series 2025 Bonds and any Reserve Parity Bonds as described below.

Whenever the balance in the Reserve Fund is equal to or exceeds the amount required to redeem or pay the Outstanding Series 2025 Bonds and Reserve Parity Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer (upon which the Fiscal Agent may conclusively rely), transfer the amount in the Reserve Fund to the Interest Account and the Principal Account, in the priority specified in the Fiscal Agent Agreement, to be applied, on the next succeeding Interest Payment Date, to the payment and redemption, in accordance with the Fiscal Agent Agreement, of all of the Outstanding Series 2025 Bonds and Reserve Parity Bonds. In the event that the amount available to be so transferred from the Reserve Fund to the Interest Account and the Principal Account exceeds the amount required to pay and redeem the Outstanding Series 2025 Bonds and Reserve Parity Bonds, the excess shall be transferred to the City to be used for any lawful purpose of the City.

In the event of a prepayment of Special Taxes, under certain circumstances, a portion of the Reserve Fund will be credited to the amount being prepaid and be applied to redeem Series 2025 Bonds and Reserve Parity Bonds.

As described under the caption “—Superior Obligations; Parity Bonds” below, the City may establish a reserve fund or account for Parity Bonds which are not Reserve Parity Bonds. Such reserve fund or account established for Parity Bonds which are not Reserve Parity Bonds will not secure the Series 2025 Bonds or any Reserve Parity Bonds.

See APPENDIX D — “SUMMARY OF LEGAL DOCUMENTS.”
Superior Obligations; Parity Bonds
The District and the City have covenanted in the Fiscal Agent Agreement that they will not issue any other obligations payable, as to principal or interest, from Special Tax Revenues which have, or purport to have, any lien upon the Special Tax Revenues superior to the lien of the Series 2025 Bonds or any Parity Bonds.

The City may, on behalf of the District, issue Parity Bonds for Improvement Area No. 1 to finance additional public improvements or to refund the Bonds, subject to the following specific conditions, among others, which are conditions precedent to the issuance of such Parity Bonds:
(A) The aggregate initial principal amount of the Bonds issued may not exceed $21,000,000; provided, however, that, notwithstanding the foregoing Parity Bonds may be issued at any time to refund Outstanding Bonds pursuant to the Act where the issuance of such Parity Bonds results in a reduction of Annual Debt Service on all Outstanding Bonds.
(B) The City and the District shall be in compliance with all covenants set forth in the Fiscal Agent Agreement and any Supplemental Agreement then in effect and a certificate of the City and the District to that effect shall have been filed with the Fiscal Agent; provided, however, that Parity Bonds may be issued

Attachment 3
26 notwithstanding that the City and the District are not in compliance with all such covenants so long as immediately following the issuance of such Parity Bonds the City and the District will be in compliance with all such covenants. (C) The Supplemental Agreement providing for issuance of the Parity Bonds must provide for one of the following: (1) a deposit to an account for the Reserve Parity Bonds that (a) when combined with the Reserve Fund equals the Reserve Requirement, calculated on an aggregate basis for the Series 2025 Bonds and Reserve Parity Bonds, and (b) such Supplemental Agreement must expressly declare that such Reserve Parity Bonds are secured by the Reserve Fund established for the Series 2025 Bonds and that the Series 2025 Bonds are secured by the reserve account established for such Reserve Parity Bonds; or (2) a deposit to a separate reserve account for the Parity Bonds which are not Reserve Parity Bonds in an amount equal to the lesser of the test established in Treasury Regulation 1.148-2(f), and such Supplemental Agreement must expressly declare that such Parity Bonds which are not Reserve Parity Bonds are not secured by the Reserve Fund established for the Series 2025 Bonds and that the Series 2025 Bonds are not secured by the reserve account established for such Parity Bonds which are not Reserve Parity Bonds. See the definition of “Reserve Requirement” in Appendix D hereto for a description of the Reserve Requirement for Parity Bonds which are not Reserve Parity Bonds. (D) The Fiscal Agent shall have received the following documents or money or securities, all of such documents dated or certified, as the case may be, as of the date of delivery of such Parity Bonds by the Fiscal Agent (unless the Fiscal Agent shall accept any of such documents bearing a prior date):
(i) A certified copy of the resolution authorizing the issuance of such Parity Bonds; (ii) A written request of the City, for and on behalf of the District, as to the delivery of such Parity Bonds;
(iii) An opinion of Bond Counsel to the effect that (a) the City has the right and power under the Act to execute and deliver the Supplemental Agreement for and on behalf of the District relating to such Parity Bonds, and the Fiscal Agent Agreement and the Supplemental Agreement have been executed and delivered by the City, for and on behalf of the District, are in full force and effect and are valid and binding upon the City, for and on behalf of the District, and enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights); (b) the Fiscal Agent Agreement and such Supplemental Agreement creates the valid pledge which it purports to create of the Special Tax Revenues and other amounts as provided in the Fiscal Agent Agreement and such Supplemental Agreement, subject to the application thereof to the purposes and on the conditions permitted by the Fiscal Agent Agreement and such Supplemental Agreement; and (c) such Parity Bonds are valid and binding limited obligations of the City and the District, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights) and the terms of the Fiscal Agent Agreement and the Supplemental Agreement and entitled to the benefits of the Fiscal Agent Agreement and the Supplemental Agreement, and such Parity Bonds have been duly and validly authorized and issued in accordance with the Act (or other applicable laws) and the Fiscal Agent Agreement and such Supplemental Agreement; and a further opinion of Bond Counsel to the effect that, assuming compliance by the City and the District with certain tax covenants, the issuance of the Parity Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds and any Parity Bonds theretofore issued on a tax-exempt basis, or the exemption from State of California personal income taxation of interest on any Outstanding Bonds and Parity Bonds theretofore issued;
(iv) A certificate of an Authorized Representative containing such statements as may be reasonably necessary to show compliance with the requirements of the Fiscal Agent Agreement; (v) A certificate of an Authorized Representative certifying as follows:

Attachment 3
27 (a) The City has received a certificate from one or more Independent Financial Consultants which, when taken together, certify that (1) the amount of the Maximum Special Taxes that may be levied pursuant to the Amended Rate and Method of Apportionment in each remaining Bond Year based only on the Taxable Property (as such term is defined in the Amended Rate and Method of Apportionment) at buildout of Improvement Area No. 1 is at least 1.10 times Annual Debt Service for each corresponding Bond Year on all Outstanding Bonds which remain Outstanding together with the Parity Bonds proposed to be issued, provided, however, there shall be excluded from such calculation the Special Taxes on any parcel then delinquent in the payment of Special Taxes; and provided further that, for purposes of making the certifications required by this subsection 2.13(D)(v)(a), the Independent Financial Consultant may rely on reports or certificates of such other persons as may be acceptable to the District, Bond Counsel and the underwriter of the proposed Parity Bonds; and
(b) Except in the case of the issuance of Parity Bonds to refund Outstanding Bonds, the District has received an appraisal indicating that (1) the aggregate appraised value of all Taxable Property (as such term is defined in the Amended Rate and Method) within Improvement Area No. 1 is not less than four times the aggregate amount of Land Secured Debt allocable to such Taxable Property; and (2) the sum of the value of Approved Property and Undeveloped Property related to Improvement Area No. 1 is four times the Land Secured Debt on such Approved Property and Undeveloped Property on a stand-alone basis (as such terms are defined in the Amended Rate and Method).

See APPENDIX D — “SUMMARY OF LEGAL DOCUMENTS — THE BONDS — Parity Bonds” IMPROVEMENT AREA NO. 1
General Description of the District and Improvement Area No. 1 The District is located in the southeastern area of the City. The District consists of five improvement areas totaling approximately 279 acres and is generally coterminous with the boundaries of a new master-planned community known as “Vinedo.” At build-out, the Vinedo Project is expected to include approximately 1,293 residential units. The Vinedo Project consists of 23 different planning areas and is anticipated to be developed over an anticipated 8-year buildout.

Improvement Area No. 1 of the District includes approximately 35.43 gross acres and consists of Planning Areas 3, 11, 12 and 15 of the Vinedo Project. Improvement Area No. 1 is located off of the intersection of Sherwood Road and Airport Road in the City. Improvement Area No. 1 is surrounded by single-family residential homes to the west and rolling hills, grasslands, and vineyards to the north, east and west.

Description of Authorized Facilities
The facilities authorized to be financed from Bond proceeds (the “Facilities”) consist of transportation facilities, park and recreation improvements and facilities, parkway and landscaping improvements, public safety facilities including police and fire buildings and equipment, public library and community center facilities, water, wastewater and storm drain improvements, street improvement and general governmental facilities and all appurtenances and appurtenant work in connection with the foregoing facilities, including the costs of engineering, planning, designing, materials testing, coordination, construction, staking, construction management and supervision for such facilities, and to finance the incidental expense to be included, including the cost of engineering, planning and designing the Facilities, all costs, including costs of the property owner petition to form the District, associated with the creation of the District, the issuance of the Bonds, the determination of the amount of Special Taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the District, and any other expenses incidental to the construction, acquisition, modification, rehabilitation,

Attachment 3
28 completion and inspection of the Facilities, and any capital improvement fee imposed by any local agency pursuant to the Act that serves or is required for the project.

Proceeds of the Series 2025 Bonds of approximately $[___] million are expected to be available to acquire Facilities from the Master Developer and approximately $[____]* are expected to be available to finance Facilities or acquire Facilities that are the responsibility of the Developers. The City may issue Parity Bonds as well as bonds for the other improvement areas within the District to finance Facilities costs, however, no assurance can be made as to timing of such issuance or that such bonds will be issued. The Developers, Master Developer and/or the builders active in the other improvement areas of the District will be responsible for any costs of the Facilities which are not financed from proceeds of bonds issued by the City for Improvement Area No. 1; however, the Developers are under no obligation to provide any financing for such Facilities or to complete development within the District. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT—The Developers and the Project—Infrastructure Requirements and Financing Plan.” [The District intends to size the Series 2025 Bonds so that, assuming no delinquencies, Special Taxes, levied in accordance with the Amended Rate and Method, will generate in each Fiscal Year beginning in Fiscal Year [2026-27] not less than 110% of debt service payable with respect to the Series 2025 Bonds in the calendar year that begins in that Fiscal Year, plus Administrative Expenses.] The Special Tax Levy for Fiscal Year [2026- 27] will be 110% of the expected bond debt service for Fiscal Year [2026-27], plus the estimated annual Administrative Expenses in each year. Surplus Special Tax collection in Fiscal Year 2025-26, if any, will be applied to fund a portion of capitalized interest on the Series 2025 Bonds. [In future years, the City intends to levy Special Taxes sufficient to only cover bond debt service and administrative costs, including any amounts necessary to replenish the Reserve Fund]. In the event of delinquencies, future special tax levies can then be increased up to 10% to cover delinquencies.

 Preliminary; subject to change.

Attachment 3
29 Direct and Overlapping Indebtedness
The ability of an owner of land within Improvement Area No. 1 to pay the Special Taxes could be affected by the existence of other taxes imposed upon the property. These other taxes consist of the direct and overlapping debt in Improvement Area No. 1 and are set forth in Table 1 below (the “Debt Report”), as of the date of the Debt Report ([___], 2025). The Debt Report sets forth those entities which have issued debt and does not include entities which only levy or assess fees, charges, ad valorem taxes or special taxes. See Table 4 for information regarding other entities levying taxes, assessments or other charges on property in Improvement Area No. 1. The Debt Report has been derived from data assembled and reported to the District by DTA Public Finance, Inc. as of [___], 2025. None of the District, the City, or the Underwriter have independently verified the information in the Debt Report and do not guarantee its completeness or accuracy.

TABLE 1

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 1)

DIRECT AND OVERLAPPING DEBT
AS OF [___], 2025
DIRECT AND OVERLAPPING ASSESSMENT DEBT % Applicable Debt as of [__] TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT*

OVERLAPPING GENERAL FUND DEBT

TOTAL GROSS OVERLAPPING GENERAL FUND DEBT

TOTAL NET OVERLAPPING GENERAL FUND DEBT
GROSS COMBINED TOTAL DEBT(1)*
NET COMBINED TOTAL DEBT*
Ratios to Appraised Value*:

Direct Debt ($[_])……………………………………..[_]%
Total Direct and Overlapping Tax and Assessment Debt……..[_]% Gross Combined Total Debt……………………………….......[_]%
Net Combined Total Debt…………………………………......[_]%
* Preliminary; subject to change. Includes the Series 2025 Bonds. (1)
Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Source: California Municipal Statistics, Inc. complied by DTA Public Finance, Inc.

Expected Tax Burden
The Series 2025Bonds have been sized to produce debt service coverage thereon from Special Taxes from Taxable Property of at least 110%, net of Administrative Expenses. Additionally, if necessary due to delinquencies, extraordinary Administrative Expenses or otherwise, Special Taxes up to the maximum Special Taxes as permitted by the Amended Rate and Method may be levied. Notwithstanding that the maximum Special Taxes that may be levied, the Special Taxes collected could be inadequate to make timely payment of debt service

Attachment 3
30 either because of nonpayment or because property becomes exempt from taxation as permitted in the Amended Rate and Method. See Table 4 for additional information. The actual amounts charged and the effective tax rates may vary and may increase or decrease in future years. Subject to the limitations established by the Amended Rate and Method and the provisions of the Act, the City has covenanted in the Fiscal Agent Agreement to levy Special Taxes on parcels of Taxable Property in Improvement Area No. 1 in each Fiscal Year in an amount sufficient to pay debt service on the outstanding Bonds. The forgoing estimated tax rate is based on currently available information. The actual amounts charged may vary and may increase in future years depending on the amount of Bonds outstanding, the number of delinquencies in Improvement Area No. 1, and additional overlapping taxes and/or assessments, among other factors.

Appraisal Report
As a result of the requirements of Article XIIIA of the California Constitution, a property’s assessed value is not necessarily indicative of its market value. In order to provide information with respect to the value of the property within Improvement Area No. 1, the City engaged Integra Reality Resources, the Appraiser, to prepare the Appraisal Report. The Appraiser has an “MAI” designation from the Appraisal Institute and has prepared numerous appraisals for the sale of land-secured municipal bonds. The Appraiser was selected by the City and has no material relationships with the City or the owners of the land within Improvement Area No. 1 other than the relationship represented by the engagement to prepare the Appraisal Report. The City instructed the Appraiser to prepare its analysis and report in conformity with City-approved guidelines and the Appraisal Standards for Land Secured Financings published in 1994 and revised in 2004 by the California Debt and Investment Advisory Commission. A copy of the Appraisal Report is included as APPENDIX B — “APPRAISAL REPORT” to this Official Statement.

The purpose of the Appraisal Report was to estimate the market value of the fee simple interest of the property within Improvement Area No. 1 subject to the Special Tax levy. The estimate of market value takes into consideration and assumes the improvements to be funded with the proceeds of the Series 2025 Bonds have been installed and that the development costs provided to the Appraiser by the Developers are accurate.

The Appraiser concluded that, as of the Date of Value, the minimum market value of the property within Improvement Area No. 1 subject to the Special Tax lien was $53,692,000. The Appraisal Report is based upon a variety of assumptions and limiting conditions that are described therein. The City makes no representation as to the accuracy of the Appraisal Report. See APPENDIX B — “APPRAISAL REPORT.” There is no assurance that the property within Improvement Area No. 1 can be sold for the prices set forth in the Appraisal Report or that any parcel can be sold for a price sufficient to pay the Special Tax for that parcel in the event of a default in payment of Special Taxes by the landowner. See “RISK FACTORS — Property Values” and APPENDIX B — “APPRAISAL REPORT.”
The Appraisal Report merely indicates the Appraiser’s opinion as to the market value of the property referred to therein as of the date and under the conditions specified therein. The Appraiser’s opinion reflects conditions prevailing in the applicable market as of the Date of Value. The Appraiser’s opinion does not predict the future value of the subject property, and there can be no assurance that market conditions will not change adversely in the future. See “RISK FACTORS — Property Values.” The following Table 2 shows a breakdown of the values of the appraised parcels in Improvement Area No. 1.

Attachment 3
31 TABLE 2

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 1)
SUMMARY OF APPRAISED VALUES(1)
Component
No. of
Lots/
Parcels/
Homes
Lot/Home
Value
Permits and
Fees
Remaining
Site
Development
Costs
Developer
Incentive at
5%
Value per
Component
Market Value
(not less than)
Individual Homeowners(2)
Completed Homes
Affirm II 6 $775,000 - - - $775,000 $4,650,000
Excite II 5 865,000 - - - 865,000 4,325,000
Vertex 2 950,000 - - - 950,000 1,900,000
Total – Individual Homeowners 13 $10,875,000
Shea
Unimproved Lots
PA 11 55 $320,000 $(40,685) $(135,524) $(6,776) $137,015 $7,536,000 PA 12 42 320,000 (40,685) (148,6180 (7,431) 123,266 5,177,000 Improved Lots (PA 15) 3 355,000 (33,400) (20,800) (1,040) 299,760 899,000 Homes Under Construction (PA 15) 28 355,000 - (20,800) (1,040) 333,160 9,328,000 Completed Homes (PA 15)
Affirm II 3 775,000 - 775,000 2,325,000
Excite II 6 865,000 - 865,000 5,190,000
Vertex 2 950,000 - 950,000 1,900,000
Total – Shea 139 $32,355,000
Trumark
Unimproved Lots (PA 3) 61 $320,000 $(40,685) $(102,679) $(5,134) $171,502 $10,462,000 Total – Trumark 61 $10,462,000
Aggregate Appraised Values 213 $53,692,000
___________
(1)
As of September 8, 2025.
(2) All homes that have been conveyed to individual homeowners are located within Planning Area 15, which is being developed by Shea.

Source: The Appraisal Report.

Attachment 3
32 Appraised Value-to-Lien Ratios
The appraised value of the property within Improvement Area No. 1 as of the Date of Value is $53,692,000. Dividing the appraised value by the principal amount of the Series 2025 Bonds results in value to lien ratio of [4.0]-to-1

for Improvement Area No. 1. Dividing the appraised value by the principal amount of the Series 2025 Bonds plus all public agency land-secured debt results in an estimated assessed value-to-lien ratio of [__]-to-1
* for Improvement Area No. 1. Additional land-secured special tax or assessment debt, however, could be applicable to the parcels within Improvement Area No. 1 in the future. The City anticipates issuing one or more series of Parity Bonds in the future. See “RISK FACTORS — Parity Taxes and Special Assessments.” Table 3 below reflects the values assigned to parcels in the Appraisal Report, the estimated principal amount of the Series 2025 Bonds, and the estimated appraised value-to-lien ratios in Improvement Area No. 1, based on the projected Fiscal Year 2026-27 Special Tax levy, assuming full build-out, categorized by property status as of September 8, 2025.
(remainder of page intentionally blank)

 Preliminary; subject to change.

Attachment 3
33 TABLE 3

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 1)

ESTIMATED VALUE-TO-LIEN RATIOS

BY DEVELOPMENT STATUS
AS OF SEPTEMBER 8, 2025
Development Status/Property Owner(1)
Number of
Taxable
Parcels
Projected
FY 2026-27
Special Tax
Levy(2)
Percentage
of Projected
FY 2026-27
Special Tax
Levy
The
Bonds(3)*
Overlapping
Debt*
Aggregate
Debt
Appraised
Value(4)
Appraised
Value-toLien
Ratio(5) *
Developed Property
Completed Homes - Individual Homeowners 13 $84,183 7.3% $981,379 $0 $981,379 $10,875,000 11.1 to 1 Completed Homes - Shea 11 74,206 6.4 865,070 0 865,070 9,415,000 10.9 to 1 Partially Completed Homes - Shea 28 184,493 16.0 2,150,761 0 2,150,761 9,328,000 4.3 to 1 Subtotal - Developed Property 52 $342,882 29.8% $3,997,210 $0 $3,997,210 $29,618,000 7.4 to 1 Final Mapped Property
Finished Lots - Shea 3 $18,922 1.6% $220,587 $0 $220,587 $899,000 4.1 to 1 Subtotal – Final Mapped Property 3 $18,922 1.6% $220,587 $0 $220,587 $899,000 4.1 to 1 Undeveloped Property
Unimproved Lots – Shea and Trumark 158 $789,638 68.6% $9,202,203 $0 $9,202,203 23,175,000 2.5 to 1 Subtotal - Undeveloped Property 158 $789,368 68.6% $9,202,203 $0 $9,202,203 $23,175,000 2.5 to 1 Total 213 $1,151,172 100.0% $13,420,000 $0 $13,420,000 $53,692,000 4.0 to 1 * Preliminary, subject to change.
(1) Development Status categories consistent with the Appraisal Report with a date of value of September 8, 2025. (2) Hypothetical Fiscal Year 2026-27 Special Tax levy assuming full build-out of all currently anticipated units. For Undeveloped Property, assumes all future permits are in the lowest land use class.
(3) The Series 2025 Bonds are allocated based on a proportionate share of the Fiscal Year 2026-27 hypothetical Special Tax levy. (4) Based on the Appraisal Report.
(5) Calculated by dividing the Appraised Value column by the pro rata share of the Series 2025 Bonds.

Source: DTA Public Finance, Inc.

Attachment 3
34 Tables 4A and 4B below sets forth the projected total effective tax rates for a [generic single family home] within the neighborhoods and the land use classes within Improvement Area No. 1 based upon the Fiscal Year 2025-26 tax rates and the appraised value of such homes, including those entities with fees, charges, ad valorem taxes and special taxes regardless of whether those entities have issued debt and assume the issuance of the Series 2025 Bonds.

TABLE 4 A

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 1)

PROJECTED TOTAL EFFECTIVE TAX RATES
Residential Property Description(1) Freedom 40(5) Freedom 50(5) Freedom 60(5) Affirm II Connect II Reunion II Excite II Proclaim II Liberty II Vertex Pinnacle Meridian Anticipated Living Area (sq. ft.) 1,624 1,849 1,977 2,038 2,155 2,369 2,610 2,880 3,232 Estimated Lowest Home Price $879,990 $939,990 $945,990 $999,990 $1,019,990 $1,065,990 $1,025,990 $1,299,990 $1,424,990 Less: Homeowner Exemption (7,000) (7,000) (7,000) (7,000) (7,000) (7,000) (7,000) (7,000) (7,000) Total: Assumed Taxable Value(2) $872,990 $932,990 $938,990 $992,990 $1,012,990 $1,058,990 $1,018,990 $1,292,990 $1,417,990 Ad Valorem Property Taxes(2)(3) Tax Rate Projected Amount Projected Amount Projected Amount Base Property Tax Rate 1.0000% $8,730 $9,330 $9,390 $9,930 $10,130 $10,590 $10,190 $12,930 $14,180 State Water Project 0.0032 28 30 30 32 33 34 33 42 46
Paso City - Bond 0.0310 271 289 291 308 314 328 316 401 440 Cuesta CCD 2014 Bond 0.0150 131 140 141 149 152 159 153 194 213 Paso Unif 2006 GO Bond 0.0104 90 97 97 103 105 110 105 134 147 Paso SFID 2016 Bond 0.0478 417 446 448 474 484 506 487 617 677 Total Ad Valorem Taxes 1.1073% $9,667 $10,331 $10,398 $10,995 $11,217 $11,726 $11,283 $14,317 $15,702 Special/District Assessments and Taxes(4) Projected Amount Projected Amount Projected Amount CFD No. 2022-2N (Public Services) $654 $654 $654 $654 $654 $654 $654 $654 $654 CFD No. 2022-1N (IA No. 1)* 5,438 5,713 5,840 5,840 6,659 6,825 7,534 8,835 9,466 Total Special/District Assessments and Taxes $6,092 $6,367 $6,494 $6,494 $7,313 $7,479 $8,188 $9,489 $10,120 Total Estimated Annual Property Taxes $15,758 $16,698 $16,891 $17,489 $18,529 $19,205 $19,471 $23,806 $25,821 Effective Tax Rate 1.7907% 1.7764% 1.7855% 1.7489% 1.8166% 1.8016% 1.8978% 1.8312% 1.8120%

Attachment 3
35 * Preliminary, subject to change.
(1) Sourced from the Appraisal Report.
(2) Assumed Taxable Value and ad valorem taxes incorporate owner-occupied assessed value exemption of $7,000. (3) Based on the Fiscal Year 2025-26 ad valorem rates for the tax rate area(s) within the District. Rates subject to change in future years. (4) Based on the levy of the applicable Assigned Special Tax. (5) Freedom 40, Freedom 50, and Freedom 60 are names given to each product line in Planning Area 15.

Source: DTA Public Finance, Inc.

Attachment 3
36 TABLE 4 B

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 1)

PROJECTED TOTAL EFFECTIVE TAX RATES
Residential Property Description(1) Morada at Vinedo
Plan 1 Plan 2 Plan 3 Plan 4
Anticipated Living Area (sq. ft.) 1,409 1,990 2,087 2,584 Estimated Lowest Home Price $729,900 $779,900 $794,990 $839,900 Less: Homeowner Exemption ($7,000) ($7,000) ($7,000) ($7,000) Total: Assumed Taxable Value(2) $722,900 $772,900 $787,990 $832,900 Ad Valorem Property Taxes(2)(3) Tax Rate Projected Amount Base Property Tax Rate 1.0000% $7,229 $7,729 $7,880 $8,329 State Water Project 0.0032 $23 $25 $25 $27
Paso City - Bond 0.0310 $224 $240 $244 $258
Cuesta CCD 2014 Bond 0.0150 $108 $116 $118 $125
Paso Unif 2006 GO Bond 0.0104 $75 $80 $82 $86
Paso SFID 2016 Bond 0.0478 $345 $369 $376 $398
Total Ad Valorem Taxes 1.1073% $8,005 $8,558 $8,725 $9,223 Special/District Assessments and Taxes(4) Projected Amount CFD No. 2022-2N (Public Services) $654 $654 $654 $654
CFD No. 2022-1N (IA No. 1) $4,996 $5,635 $5,635 $5,721
Total Special/District Assessments and Taxes $5,650 $6,289 $6,289 $6,375 Total Estimated Annual Property Taxes $13,654 $14,847 $15,014 $15,597 Effective Tax Rate 1.8707% 1.9037% 1.8886% 1.8570%
(1) Sourced from the Appraisal Report.
(2) Assumed Taxable Value and ad valorem taxes incorporate owner-occupied assessed value exemption of $7,000. (3) Based on the Fiscal Year 2025-26 ad valorem rates for the tax rate area(s) within the District. Rates subject to change in future years.
(4) Based on the levy of the applicable Assigned Special Tax.

Source: DTA Public Finance, Inc.

Largest Taxpayers
Based on the ownership status as of September 8, 2025, assuming no additional transfer of property in Improvement Area No. 1 for Fiscal Year 2025-26, Shea will be responsible for paying [65.5]% of the projected Fiscal Year 2026-27 Special Tax levy and Trumark will be responsible for paying [27.1]% of the Fiscal Year 2026-27 Special Tax Levy. See “RISK FACTORS — Concentration of Ownership.”

Attachment 3
37 Table 5 below shows Special Tax-paying responsibility by ownership. The actual property ownership, development status, share of Fiscal Year 2026-27 Special Taxes and percent of total Special Taxes, will change to the extent that development, home construction and home sales occur. In addition, neither the District nor the City can make any representation as to whether individual persons, corporations or other organizations are liable for Special Tax payments in connection with multiple properties held in various names that in the aggregate may be larger than what is suggested by the following information. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT” and “RISK FACTORS — Concentration of Ownership.” TABLE 5

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 1)
PROJECTED FISCAL YEAR 2026-27 SPECIAL TAXES BY OWNERSHIP Property Classification / Property Owner(2)
Number of
Taxable
Parcels
Projected
FY 2026-27
Special Tax
Levy(1)*
Percentage of
Special Tax
Levy(1)
Developed Property
Completed Homes – Owned by Individuals 13 $84,183 7.50% Completed Homes – Owned by Shea 11 74,206 6.60
Partially Completed Homes – Owned by Shea 28 160,677 14.30 Final Mapped Property
Finished Lots – Owned by Shea 3 $16,314 1.50%
Undeveloped Property
Unimproved Lots – Owned by Shea 97 $484,612 43.10%
Unimproved Lots – Owned by Trumark 61 304,756 27.10
Total 213 $1,124,748 100.00%
___________
* Preliminary; subject to change.
(1) Projected Fiscal Year 2026-27 Special Tax levy, assuming full build-out. (2) Between Septemer 8, 2025 and November 1, 2025, ad additional [__] homes were conveyed to homeowners and [__] additional building permits were issued, including [__] in Planning Area 3 and [__] in Planning Area 15.

Source: DTA Public Finance, Inc.

Delinquency History
Fiscal Year 2025-26 was the first fiscal year in which Special Taxes were levied within Improvement Area No. 1. There are currently no delinquencies in the District.

The District is currently included in the County’s Teeter Plan and, as a result, the City expects to receive 100% of the Special Tax levy, without regard to the actual amount of collections. See “SECURITY FOR THE BONDS — Teeter Plan” and “RISK FACTORS—Teeter Plan Termination.” City’s Collection Practices
The staff of the City provides administrative and other support services for the community facilities districts that have been formed by the City. These services include, but are not limited to, attempting to collect delinquent special taxes prior to the commencement of foreclosure proceedings by sending demand letters to property owners whose special taxes are delinquent advising them of the consequences of failing to pay the

Attachment 3
38 applicable special taxes. The City will covenant in the Fiscal Agent Agreement to commence foreclosure proceedings against parcels with delinquent Special Taxes under certain circumstances described in this Official Statement. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Proceeds of Foreclosure Sales.”
(remainder of page intentionally blank)

Attachment 3
39 Special Tax Rates
Tables 6 and 7 below set forth the hypothetical Assigned Special Taxes by Land Use Class within Improvement Area No. 1 for Fiscal Year 2026-27 based on development status as of September 8, 2025, and what would be levied within Improvement Area No. 1 for Fiscal Year 2026-27 assuming full buildout, respectively.

TABLE 6

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 1)
FISCAL YEAR 2026-27 ASSIGNED/MAXIMUM SPECIAL TAXES
DEVELOPMENT AS OF SEPTEMBER 8, 2025
Land
Use
Class Description Units(1) Acres(1)
Assigned/
Maximum
Special Tax
Rate(1)
Assigned/
Maximum
Special
Taxes(2)
Percent of
Assigned/
Maximum
Special
Taxes
Developed Property - Zone 1
1 Residential Property >= 2,900 SF 2 - $9,466 $18,932 0.9% 2 Residential Property 2,700 – 2,899 SF 4 - 8,835 35,340 1.6 3 Residential Property 2,500 – 2,699 SF 4 - 7,534 30,136 1.4 4 Residential Property 2,300 - 2,499 SF 12 - 6,825 81,900 3.7 5 Residential Property 2,100 - 2,299 SF 7 - 6,659 46,613 2.1 6 Residential Property 1,900 - 2,099 SF 6 - 5,840 35,040 1.6 7 Residential Property 1,700 - 1,899 SF 9 - 5,713 51,417 2.3 8 Residential Property < 1,700 SF 8 - 5,438 43,504 2.0
Subtotal(2) 52 - $342,882 15.4%
Developed Property - Zone 2
9 Residential Property >= 2,100 SF 1
$5,721 $5,721 0.3%
10 Residential Property 1,850 - 2,099 SF 2
5,635 11,270 0.5
11 Residential Property 1,600 - 1,849 SF 0
5,272 0 0.0
12 Residential Property < 1,600 SF 0
4,996 0 0.0
Subtotal(2) 3 $16,991 0.8%
Final Mapped Property – Zone 1 - 0.53 $44,270 $23,332 1.1% Final Mapped Property – Zone 2 - 0.00 73,163 0 0.0
Undeveloped Property – Zone 1 - 0.00 44,270 0 0.0
Undeveloped Property – Zone 2 - 25.10 73,163 1,836,391 82.7 Total(3) $2,219,597 100.0%
(1) Based on building permits issuances as of the Date of Value. (2) Assigned Special Tax applied for Developed Property. Maximum Special Tax applied for Final Mapped Property and Undeveloped Property.
(3) Totals may not add due to rounding.

Source: DTA Public Finance, Inc.

Attachment 3
40 TABLE 7

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 1)
FISCAL YEAR 2026-27 ASSIGNED SPECIAL TAXES

ASSUMING FULL DEVELOPMENT
Land Use
Class Description
Planned
Units(1)
Assigned
Special Tax
Rate
Assigned
Special Taxes
Percent of
Assigned
Special
Taxes
Zone 1
1 Residential Property >= 2,900 SF 2 $9,466 $18,932 1.64% 2 Residential Property 2,700 – 2,899 SF 4 8,835 35,340 3.07 3 Residential Property 2,500 – 2,699 SF 4 7,534 30,136 2.62 4 Residential Property 2,300 - 2,499 SF 13 6,825 88,725 7.71 5 Residential Property 2,100 - 2,299 SF 8 6,659 53,272 4.63 6 Residential Property 1,900 - 2,099 SF 6 5,840 35,040 3.04 7 Residential Property 1,700 - 1,899 SF 9 5,713 51,417 4.47 8 Residential Property < 1,700 SF 9 5,438 48,942 4.25
Subtotal(2) 55 $361,804 31.43%
Zone 2
9 Residential Property >= 2,100 SF 0 $5,721 $0 0.00%
10 Residential Property 1,850 - 2,099 SF 0 5,635 0 0.00 11 Residential Property 1,600 - 1,849 SF 0 5,272 0 0.00 12 Residential Property < 1,600 SF 158 4,996 789,368 68.57 Subtotal(2) 158 $789,368 68.57%
Total 213 $1,151,172 100.00%
(1) Per Trumark, future units are not pre-plotted. Therefore, for purposes of projecting the special tax revenue, the analysis assumes all future Zone 2 permits are issued in the lowest land use class. (2) Totals may not add due to rounding.

Source: DTA Public Finance, Inc.

Projected Debt Service Coverage
The following Table 8 provides the projected debt service coverage based on the Assigned Special Tax for Improvement Area No. 1 assuming full buildout.

Attachment 3
41 TABLE 8

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 1)

PROJECTED DEBT SERVICE COVERAGE FROM ASSIGNED SPECIAL TAX ASSUMING FULL DEVELOPMENT Bond Year
Ending
September 1
Assigned Special
Taxes(1)
Priority
Administrative
Expenses Special Tax Revenues
2025 Bonds Net Debt
Service(3)*
Debt Service
Coverage*
2026 $1,151,172 $25,000 $1,126,172 $[__] %
2027 1,151,172 25,000 1,126,172
2028 1,151,172 25,000 1,126,172
2029 1,151,172 25,000 1,126,172
2030 1,151,172 25,000 1,126,172
2031 1,151,172 25,000 1,126,172
2032 1,151,172 25,000 1,126,172
2033 1,151,172 25,000 1,126,172
2034 1,151,172 25,000 1,126,172
2035 1,151,172 25,000 1,126,172
2036 1,151,172 25,000 1,126,172
2037 1,151,172 25,000 1,126,172
2038 1,151,172 25,000 1,126,172
2039 1,151,172 25,000 1,126,172
2040 1,151,172 25,000 1,126,172
2041 1,151,172 25,000 1,126,172
2042 1,151,172 25,000 1,126,172
2043 1,151,172 25,000 1,126,172
2044 1,151,172 25,000 1,126,172
2045 1,151,172 25,000 1,126,172
2046 1,151,172 25,000 1,126,172
2047 1,151,172 25,000 1,126,172
2048 1,151,172 25,000 1,126,172
2049 1,151,172 25,000 1,126,172
2050 1,151,172 25,000 1,126,172
2051 1,151,172 25,000 1,126,172
2052 1,151,172 25,000 1,126,172
2053 1,151,172 25,000 1,126,172
2054 1,151,172 25,000 1,126,172
2055 1,151,172 25,000 1,126,172
2056 1,151,172 25,000 1,126,172
2057 1,151,172 25,000 1,126,172
2058 1,151,172 25,000 1,126,172
2059 1,151,172 25,000 1,126,172
2060 1,151,172 25,000 1,126,172
Total $40,291,020 $875,000 $39,416,020 $ %
_____________
* Preliminary, subject to change.
(1) Based on the Assigned Special Tax for the District assuming full development.

Attachment 3
42 (2) Assigned Special Taxes less Priority Administrative Expenses.

Source: DTA Public Finance, Inc.

Attachment 3
43 PROPERTY OWNERSHIP AND THE DEVELOPMENT
The information provided in this section has been included because it may be considered relevant to an informed evaluation and analysis of the Series 2025 Bonds. No assurance can be given, however, that the proposed development of the property within Improvement Area No. 1 will occur in a timely manner or in the configuration or to the density described in this Official Statement, or that the Developers, or any owners or affiliates thereof described in this Official Statement will or will not retain ownership of their respective property within Improvement Area No. 1. Neither the Series 2025 Bonds nor the Special Tax represent personal obligations of any property owner within Improvement Area No. 1. The Series 2025 Bonds are secured by and payable solely from the Special Tax Revenues and amounts on deposit in certain of the funds and accounts established and maintained under the Fiscal Agent Agreement. See “RISK FACTORS” for a discussion of certain of the risk factors that should be considered in evaluating the investment quality of the Series 2025 Bonds. Neither the Series 2025 Bonds nor the Special Taxes are personal obligations of the property owners within Improvement Area No. 1 or any affiliate thereof, and, in the event that a property owner defaults in the payment of its Special Taxes, the City may proceed with judicial foreclosure, but has no direct recourse to the assets of such property owner or any affiliate thereof.

The Developers and the Project
Ownership. The taxable property in Improvement Area No. 1 consists of four planning areas (each a “Planning Area”) within the Vinedo Specific Plan area that includes Planning Area 3, Planning Area 11, Planning Area 12 and Planning Area 15. Shea acquired all four planning areas from Olsen Ranch 212, LLC (the “Master Developer”) in September 2023. Shea has entered into a purchase and sale agreement with Trumark (the “PA 3, 11 and 12 PSA”) for the sale of Planning Area 3, Planning Area 11 and Planning Area 12 to Trumark. In February 2025, Shea conveyed Planning Area 3 to Trumark pursuant to the PA 3, 11 and 12 PSA, and currently expects that Planning Area 11 will be conveyed to Trumark in November 2025 and Planning Area 12 will be conveyed to Trumark in August 2026. As further discussed below, Shea is developing Planning Area 15 and is an active sales program. As of November 1, 2025, 23 homes within Planning Area 15 had been conveyed to individual homeowners.

Planning Area 3 is zoned medium density residential and is planned for 61 units to be called “Morada.” Planning Areas 11 and 12 are zoned medium density residential, are in unfinished lot condition, are anticipated to be a continuation of the Morada product by Trumark, and are expected to be conveyed from Shea to Trumark pursuant to the PA 3, 11 and 12 PSA as described above. Trumark anticipates constructing 55 single-family detached homes in Planning Area 11 and 42 single-family detached homes in Planning Area 12. Planning Area 15 is zoned low density residential and is planned for 55 units in a neighborhood called “Nevina, a Trilogy Boutique Community” currently being constructed by Shea which is an age-restricted 55+ community. Nevina is part of a larger development that encompasses areas outside of Improvement Area No. 1 known as Trilogy.

Planning Area 15 is the only planning area in Improvement Area No. 1 actively selling homes. Amenities are available to the owners of property in the improvement areas include nine miles of walking trails, two pickle ball courts, a farm fresh produce farm stand (which is completed but not yet open), and a resort-style pool (which is nearly complete), all of which is being constructed by the Master Developer.

Tract Map Status. The final map for Planning Area 3, Tract Map No. 3176, was approved by the City on October 21, 2025, and is expected to be recorded in the official records of the County by December 31, 2025. [Remainder is TBD – Developer team to provide]
Entitlements for Improvement Area No. 1. The Vinedo Project received the following land use approvals: (i) General Plan Amendment approved by the City in February 2020, (ii) Vinedo Specific Plan approved by the City in February 2020 (the “Specific Plan”), and (iii) Vesting Tentative Map for Tract Map Nos.

Attachment 3
44 3152, 3153, and 3155 approved by the City. Pursuant to the Specific Plan, the area within Improvement Area No. 1 is now entitled for up to 158 (and 55 age-restricted) homes, and a number of parks and open space.

Environmental Impact Report. In February 2020, the City Council certified the environmental impact report for the Specific Plan (the “Final EIR”). Mitigation measures were required in the Final EIR and are incorporated into the Vinedo Project.

Shea and its Development Plan
SH AA Vinedo, LLC (referred to herein as “Shea”) is a Delaware limited liability company and is a subsidiary of Shea Homes Limited Partnership, a California limited partnership (“Shea Homes”). Shea Homes is headquartered in Walnut, California, near Los Angeles, and is a privately held company with multiple home building divisions. Shea Homes, through various subsidiaries and affiliates, operates in many states throughout the United States, including California, Colorado, Nevada, Arizona, Washington, Virginia, North Carolina, South Carolina, Florida, Idaho and Texas.

Additional information regarding Shea Homes is generally available at www.sheahomes.com. This internet address is included for reference only, and the information on this internet site is not a part of this Official Statement and is not incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on this internet site.

Planning Areas 3, 11 and 12 Purchase and Sale. In February 2025, Shea conveyed Planning Area 3 to Trumark pursuant to the PA 3, 11 and 12 PSA. The remaining conveyances of Planning Areas 11 and 12 pursuant to the PA 3, 11 and 12 PSA are subject to various closing conditions, including Shea’s completion and delivery of the lots in in a certain improved condition by certain closing dates [MORE DETAIL TO COME FROM DEVELOPER]. Pursuant to the PA 3, 11 and 12 PSA, Planning Area 11 is expected to be conveyed to Trumark by the end of February 2026 and Planning Area 12 is expected to be conveyed to Trumark by the end of November 2026.

Planning Area 15 Development Plan and Status. Shea retained ownership of and is currently developing Planning Area 15 as the first phase of a planned 413 dwelling unit, age-qualified (55+) project being marketed as “Trilogy.” Of the 413 units planned for the entire Trilogy project, 55 of said units are located in Planning Area 15 within Improvement Area No. 1 and called “Nevina.” Nevina includes nine product types ranging in size from 1,624 square feet to 3,232 square feet. The additional phases of Trilogy are expected to be located in other planning areas of the Vinedo Specific Plan and other improvement areas of the District.

As of September 8, 2025, building permits had been issued for 52 of the 55 homes planned for the Nevina neighborhood, 24 homes had been completed, of which 15 had been conveyed to individual homeowners, and 28 homes were under construction. Additionally, as of September 8, 2025, 16 homes were under contract for sale to individual homebuyers. As of November 1, 2025, for the Nevina neighborhood, 23 homes had been conveyed to individual homeowners, 23 homes had been completed (7 of which were under contract for sale to individual homeowners), and 6 homes were under construction.

The completed homes in the Nevina neighborhood include 5 model homes and one additional home serving as the sales center, which, together with the 3 lots in Planning Area 15 for which building permits have not been issued, serve as the model home complex for the larger Trilogy project. Homes are planned to be built on the 3 vacant lots and, together with the 5 model homes and one sales center/home, marketed for sale near the time of buildout of Trilogy when the model home complex is not required, or when the model homes are no longer necessary, which is anticipated to occur by October 2028. Accordingly, Shea is expected to retain ownership of the 9 parcels (5 model homes, 1 sales center and 3 vacant lots being used for parking) for an extended period of time, although all are planned to be sold to individual homeowners in the future.

Attachment 3
45 Only the Nevina neighborhood of the Trilogy project is located within Improvement Area No. 1. In order to complete development of the entire Trilogy project, Shea needs to acquire an additional 4 planning areas in the District, although outside of Improvement Area No. 1, for which Shea has a purchase agreement in place. Shea is anticipated to acquire all land necessary for completion of its Trilogy project by October 2027. Assuming Shea acquires the land for the remaining phases of Trilogy as anticipated and subject to market and other factors, Shea estimates buildout of Trilogy would occur in or around 2029. Shea anticipates full buildout of the Nevina neighborhood, excluding the 9 lots described above, to occur in or around October 2030. According to Shea, a failure to acquire the remaining land, however, will not impair the development of Nevina. More information regarding Shea’s planned development of Planning Area 15 within Improvement Area No. 1 and the status of development is set forth in the following tables:

Development Plan
Planning Area 15 - Nevina
(Trilogy – Phase 1)
As of November 1, 2025
Floor Plan
Planned Units
on Land
Square
Footage
Base
Sales Prices(1)
Affirm II 8 1,624 $ 778,303
Reunion II 2 1,927 828,240
Proclaim II 6 2,155 934,157
Liberty II 14 2,366 954,966
Pinnacle 4 2,880 1,107,240
Meridian 3 3,232 1,207,657
Connect II 9 1,849 822,490
Excite II 5 2,041 893,990
Vertex 3 2,610 1,029,323
Sales Center(2) 1 2,514 1,250,000
55 _______________________
(1) The base sales prices are as of September 8, 2025, and are subject to change. The base prices do not include any additional pricing for options, upgrades or lot premiums. (2) The sales center has been constructed as a home to be sold to an individual homeowner in the future.

Source: Shea

Attachment 3
46 Development Status
Planning Area 15 - Nevina
(Trilogy – Phase 1)
As of November 1, 2025
Floor Plan
Total No.

Planned
Units
Building
Permits
Issued
Homes
Closed to
Individuals
Homes
Under
Contract
But Not
Closed
Unclosed
Completed
Homes(1)
Units
Under
Construction(2)
Remaining
Unimproved
or Finished
Lots(3)
Freedom 40
Affirm II 8 8 3 3 4 1 0
Connect II 9 9 5 0 3 1 0
Reunion II 2 2 1 1 1 0 0
Freedom 50
Excite II 5 5 1 1 3 1 0
Proclaim II 6 6 2 0 4 0 0
Liberty II 14 12 8 1 2 2 2
Freedom 60
Pinnacle 4 4 1 3 2 1 0
Meridian 3 2 0 1 2 0 1
Vertex 3 3 2 0 1 0 0
Sales Center 1 1 - - 1 - -
55 52 23 10 23 6 3
____________________________
(1)
Includes 5 model homes and sales center and 7 homes under contract. (2) A home is considered under construction if a building permit has been issued for such lot, but the home has not been completed. Of the 6 homes under construction, 3 homes are under contract. (3) A lot is considered finished if a building permit has not been issued for such lot.

Source: Shea.

No assurance can be given that home construction and sales will be carried out on the anticipated timeline and according to the plans outlined herein, or at all, or that the home construction and sale plans or base prices set forth above will not change after the date of this Official Statement. The Developers reserve the right to change, suspend or terminate the development plan, product mix, home construction and sales prices at any time without notice.

Planning Area 15 Status of Construction.

Backbone Infrastructure. All off-site, backbone infrastructure improvements required for the development of Planning Area 15 has been constructed and completed by the Master Developer. All of the backbone improvements required as a condition of pulling building permits or obtaining certificates of occupancy within Planning Area 15 have been completed.

In-tract Improvements. All in-tract water, streets, sewer, storm drain and dry utility trenching are complete for the entirety of Planning Area 15.

Planning Area 15 Financing Plan. As of [September 8], 2025, Shea had expended or incurred approximately $38 million on land acquisition, site development, and home construction relating to Planning Area 15 and expects to expend an additional $2.3 million to complete the construction and sale of the remaining homes in Planning Area 15. Shea intends to finance future costs relating to Planning Area 15 with a combination

Attachment 3
47 of equity and proceeds from the sale of completed homes. Shea expects to have sufficient funds available to complete its development of Planning Area 15.

Notwithstanding the belief of Shea that it will have sufficient funds to complete its planned development in the District, no assurance can be given that amounts necessary to fund the remaining planned development by Shea will be available when needed. Neither Shea nor any other entity or person is under any legal obligation of any kind to expend funds for the proposed development of the property owned by Shea within Planning Area 15.

Any contributions by Shea or any other entity or person to fund the costs of such development are entirely voluntary. If and to the extent the aforementioned sources are inadequate to pay the costs to complete the planned development by Shea, the remaining portions of such development may not be completed. There is no legal obligation to Bondholders to make any such funds available for construction or development, or the payment of ad valorem property taxes or the Special Taxes.

Trumark and its Development Plan
TH Paso Robles, LLC (referred to herein as “Trumark”) is a single member California limited liability company owned by Trumark WAB Borrower LLC, a Delaware limited liability company, a wholly owned subsidiary of Trumark Homes, LLC, a California limited liability company, in turn wholly owned by Trumark Companies, LLC (collectively, “Trumark Homes”). Founded in 1988, Trumark Homes is engaged in the development of master planned communities, and construction and sale of single family and attached dwellings in California and Colorado. Since its founding, Trumark Homes has developed over 8,000 residential lots. Other than the subject project, Trumark Homes currently has active residential projects in California that are located in Oceanside, Covina, Mission Viejo, Corona, Escondido, Loma Linda, Chino, Chino Hills, Livermore, Brentwood, Dublin, Alameda, San Jose, San Ramon, Danville, Manteca, Madera, Fresno, San Luis Obispo, and Marina. In January 2020, Daiwa House USA, Inc., a subsidiary of Daiwa House Industry Co., Ltd., acquired the majority equity interests in Trumark Companies LLC and Trumark Homes became a subsidiary of Daiwa House USA, Inc.

Daiwa House Industry Co., Ltd. is Japan’s largest homebuilder and is a public company listed on the Tokyo Stock Exchange and the Osaka Securities Exchange under the ticker symbol “DWAHY.” Additional information regarding Trumark is generally available at www.trumarkhomes.com. This internet address is included for reference only, and the information on this internet site is not a part of this Official Statement and is not incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on this internet site.

Planning Areas 3, 11 and 12 Purchase and Sale. In February 2025, Shea conveyed Planning Area 3 to Trumark pursuant to the PA 3, 11 and 12 PSA. The remaining conveyances of Planning Areas 11 and 12 pursuant to the PA 3, 11 and 12 PSA are subject to various closing conditions, including Shea’s completion and delivery of the lots in in a certain improved condition by certain closing dates [MORE DETAIL TO COME]. Pursuant to the PA 3, 11 and 12 PSA, Planning Area 11 is expected to be conveyed to Trumark by the end of February 2026 and Planning Area 12 is expected to be conveyed to Trumark by the end of November 2026.

Planning Area 3 Development Plan and Status. Trumark is currently developing Planning Area 3 as “Morada at Vinedo” which is planned for 61 single-family detached homes. The Morada community will include four floor plans ranging in size from 1,409 square feet to 2,584 square feet. As of November 1, 2025, building permits had been issued for 3 homes planned for the Morada neighborhood (all model homes) and all three homes were under construction. The construction of these three model homes for Morada commenced in September 2025 and the construction of production homes is anticipated to commence by the end of January 2026. The first occupancy permit for the Morada neighborhood is expected to be received in summer 2026, which is the same timeframe that the first homes are expected to be conveyed to individual homeowners. Planning Areas 3, 11, and 12 consist of the same product and will be marketed accordingly together as “Morada at Vinedo.” The model homes being constructed in Project Area 3 will continue to serve as the model homes for Project Areas 11 and 12.

Attachment 3
48 All homes in Planning Areas 3, 11 and 12 are expected to be conveyed to individual homeowners by the end of 2031.

More information regarding Trumark’s planned development of Planning Area 3 within Improvement Area No. 1 and the status of development is set forth in the following tables:

Development Plan
Planning Area 3
Morada
As of November 1, 2025
Floor Plan
Planned Units
on Land
Square
Footage
Base
Sales Prices(1)
1 16 1,409 $729,900
2 15 1,990 779,900
3 15 2,087 794,990
4 15 2,584 839,900
61 _______________________
(1) The base sales prices set forth above are the base sales prices anticipated by Trumark as of September 8, 2025, and are subject to change. The base prices do not include any additional pricing for options, upgrades or lot premiums.

Source: Shea
Development Status
Planning Area 3
Morada
As of November 1, 2025
Floor Plan
Total No.

Planned
Units
Building
Permits
Issued
Homes
Closed to
Individuals
Units
Under
Construction(1)
Remaining
Unimproved
or Finished
Lots(2)
1 16 0 0 0 16
2 15 1 0 1 14
3 15 1 0 1 14
4 15 1 0 1 14
61 3 0 3 58
____________________________
(1)
Includes 3 model homes. A home is considered under construction if a building permit has been issued for such lot but the home has not been completed.
(2) A lot is considered finished if a building permit has not been issued for such lot.

Source: Trumark.

No assurance can be given that home construction and sales will be carried out on the anticipated timeline and according to the plans outlined herein, or at all, or that the home construction and sale plans or base prices set forth above will not change after the date of this Official Statement. The Developers reserve the right to change, suspend or terminate the development plan, product mix, home construction and sales prices at any time without notice.

Attachment 3
49 Planning Area 3 Status of Construction.

Backbone Infrastructure. All off-site, backbone infrastructure improvements required for the development of Planning Area 3 have been, or are being, constructed by the Master Developer. The remaining backbone infrastructure to be completed includes [TBD] and is expected to be completed by [MONTH/YEAR]. All of the backbone improvements required as a condition of pulling building permits or obtaining certificates of occupancy within Planning Area 3 [have been completed].

In-tract Improvements. All in-tract water, streets, sewer, storm drain and dry utility trenching are currently being constructed for Planning Area 3 and are expected to be completed by Q2 of 2026. As of November 1, 2025, all grading and approximately 90% of sewer, storm and water utility in-tract improvements with respect to Planning Area 3 were completed. The remaining work to be completed includes the balance of such sewer, storm and water utility improvements, as well as the installation of electrical utilities, finish grading, curb and gutter improvements, paving, energization and certain retaining walls.

Planning Area 3 Financing Plan. As of November 1, 2025, Trumark had expended or incurred approximately $11,077,974 million on land acquisition, site development, and home construction relating to Planning Area 3 and expects to expend an additional $30,634,007 million to complete the construction and sale of the homes in Planning Area 3. Trumark intends to finance future costs relating to Planning Area 3 with a combination of equity, proceeds from the sale of completed homes, and commercial financing. Trumark expects to have sufficient funds available to complete its development of Planning Area 3. [FINANCING DETAILS TO COME].

Planning Area 11 and 12 Development Plan. Shea is the current owner of Planning Area 11 and 12, however, pursuant to the Planning Area 3, 11 and 12 PSA, Shea expects to convey Planning Area 11 to Trumark by the end of February 2026 and Planning Area 12 by the end of November 2026. Assuming such conveyance occurs, Trumark anticipates constructing 55 single-family detached homes in Planning Area 11 and 42 singlefamily detached homes in Planning Area 12. Based on the anticipated absorption of homes within Planning Area 3, Trumark anticipates completing in-tract improvements in Planning Area 11 no later than November 2027, and the same at Planning Area 12 no later than June 2029. Trumark may choose to complete in-tract improvements ahead of such dates to take advantage of trade availability, rates, or other business reasons.

Notwithstanding the belief of Trumark that it will have sufficient funds to complete its planned development in Improvement Area No. 1, no assurance can be given that amounts necessary to fund the remaining planned development by Trumark will be available when needed. Neither Trumark nor any other entity or person is under any legal obligation of any kind to expend funds for the proposed development of the property owned by Trumark within Improvement Area No. 1. Any contributions by Trumark or any other entity or person to fund the costs of such development are entirely voluntary. If and to the extent the aforementioned sources are inadequate to pay the costs to complete the planned development by Trumark, the remaining portions of such development may not be completed. There is no legal obligation to Bondholders to make any such funds available for construction or development, or the payment of ad valorem property taxes or the Special Taxes.

If and to the extent that internal funding, including but not limited to home sales revenue, is inadequate to pay the costs to complete the planned development by the Developers within Improvement Area No. 1 and other financing is not put into place, there could be a shortfall in the funds required to complete the remaining planned development by the Developers in Improvement Area No. 1. Many factors beyond the Developers’ control, or a decision by the Developers to alter their current plans, may cause the actual sources and uses to differ from the projections. See “RISK FACTORS” herein for a discussion of risk factors.

Attachment 3
50 RISK FACTORS
The purchase of the Series 2025 Bonds involves significant investment risks, and, therefore, the Series 2025 Bonds are not suitable investments for many investors. The following is a discussion of certain risk factors which should be considered, in addition to other matters set forth in this Official Statement, in evaluating the investment quality of the Series 2025 Bonds. The Series 2025 Bonds have not been rated by a rating agency.

This discussion does not purport to be comprehensive or definitive and does not purport to be a complete statement of all factors which may be considered as risks in evaluating the credit quality of the Series 2025 Bonds. The occurrence of one or more of the events discussed in this section of this Official Statement could adversely affect the ability or willingness of property owners in Improvement Area No. 1 to pay their Special Taxes when due.

Such failures to pay Special Taxes could result in the inability of the City to make full and punctual payments of debt service on the Series 2025 Bonds. In addition, the occurrence of one or more of the events discussed in this section of this Official Statement could adversely affect the value of the property in Improvement Area No. 1.

See “—Property Values” and “— Limited Secondary Market” below.

Risks of Real Estate Secured Investments Generally
The Series 2025 Bond Owners will be subject to the risks generally incident to an investment secured by real estate, including, without limitation, (i) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of Improvement Area No. 1, the supply of or demand for competitive properties in such area, and the market value of residential property or buildings and/or sites in the event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, governmental rules and fiscal policies; and (iii) natural disasters (including, without limitation, earthquakes and floods), which may result in uninsured losses.

No assurance can be given that the Developers or future individual homeowners will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See “RISK FACTORS — Bankruptcy and Foreclosure” below, for a discussion of certain limitations on the City’s ability to pursue judicial proceedings with respect to delinquent parcels.

Mortgage Interest Rates
Most of the purchasers of homes finance their acquisitions with mortgage financing. As such, rising interest rates, decreased availability of mortgage financing, or of certain mortgage programs, higher down payment requirements or increased monthly mortgage costs could have a negative impact on the estimated absorption rates of the planned for-sale homes in the Improvement Area No. 1. Further, a combination of higher mortgage rates, delays in construction stemming from delays in the supply chain, homebuyers’ inability to sell their existing homes and adverse changes in local, regional or national economic conditions, among other factors, could contribute to an increase in the rate of home order cancellations. An increase in the level of such cancellations could similarly have a negative impact on the estimated absorption rates of the planned for-sale homes in Improvement Area No. 1.

With respect to entry-level households, increased mortgage interest rates may adversely impact the affordability of homes and may increase mortgage payment levels for owning a lower-priced home relative to renting a residence, thereby making purchasing less attractive. With respect to move-up households, higher mortgage interest rates may impact the desire of current homeowners to move from their present home due to the fact that their present home likely has a relatively low mortgage interest rate. In addition, in such instances, a new home would likely have a higher interest rate on a new mortgage loan as well as a higher purchase price and property taxes. Such considerations may decrease the desire for move-up households to purchase a new home.

The foregoing factors could reduce demand for and/or the calendar year absorption schedule for the residential projects within Improvement Area No. 1.

Attachment 3
51 Availability of Hazard Insurance
According to the California Department of Insurance, insurance companies declined to renew 2.8 million homeowner policies in the State. Insurers have been exiting the State, refusing to write new policies in areas they consider to be at high risk, or in some cases refusing to offer coverage for high-value homes, which insurance companies generally classify as homes with a replacement cost of $750,000 or higher. Such cancellations generally have resulted in increased cost to homeowners as they obtain replacement coverage. The California FAIR Plan Association provides insurance to homeowners who cannot otherwise find insurance coverage, but policies through the FAIR Plan do not provide as much coverage as traditional homeowner’s insurance and tend to bear rates that are higher than traditional homeowner’s insurance. Though several legislative and policy revisions are circulating, neither the City nor the District can predict whether homeowner’s insurance will continue to be available to home purchasers at affordable rates. An increase in homeowner’s insurance rates or a reduction in the availability of new homeowner’s insurance policies will increase the overall cost to purchase homes and may in turn reduce the Developers’ ability to sell new homes to homeowners. Further, increases in homeowner’s insurance rates may reduce affordability and may cause homeowners to be unable or unwilling to pay the Special Taxes when due.

Limited Obligations
The Bonds and related interest are not payable from the funds of the City. Except with respect to the Special Tax Revenues, neither the credit nor the taxing power of the District or the City is pledged for the payment of principal or interest of the Bonds, and, except as provided in the Fiscal Agent Agreement, no Owner of the Bonds may compel the exercise of any taxing power by the District or the City or force the forfeiture of any City or District property. The principal of, premium, if any, and interest on the Bonds are not a debt of the City or a legal or equitable pledge, charge, lien or encumbrance upon any of the City’s or District’s property or upon any of the City’s or District’s income, receipts or revenues, except the Special Tax Revenues and other amounts pledged under the Fiscal Agent Agreement.

Insufficiency of Special Taxes
The annual amount of Special Tax to be levied on each taxable parcel in Improvement Area No. 1 will generally be based on the development status and land use class to which a parcel of Developed Property is assigned under the Amended Rate and Method. See APPENDIX A — “AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX” and “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Amended Rate and Method of Apportionment of Special Tax.” The Maximum Special Taxes that may be levied within Improvement Area No. 1 are at least 110% of Maximum Annual Debt Service on the Bonds. Notwithstanding that the Maximum Special Taxes that may be levied in Improvement Area No. 1 exceeds debt service due on the Bonds, the Special Taxes collected could be inadequate to make timely payment of debt service either because of nonpayment or because property becomes exempt from taxation as permitted in the Amended Rate and Method.

In order to pay debt service on the Bonds, it is necessary that the Special Taxes be paid in a timely manner.

Should the Special Taxes not be paid on time, the City has established a Reserve Fund under the Fiscal Agent Agreement to pay debt service on the Series 2025 Bonds and any Reserve Parity Bonds to the extent other funds are not available. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Reserve Fund.” The City will covenant in the Fiscal Agent Agreement to maintain in the Reserve Fund an amount equal to the Reserve Requirement subject, however, to the limitation that the City may not levy the Special Tax in Improvement Area No. 1 in any Fiscal Year at a rate in excess of the maximum amounts permitted under the Amended Rate and Method. In addition, under no circumstances may the Special Tax levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by owner of any other parcel or parcels within Improvement Area No. 1 by more than 10% in any Fiscal Year. As a result, if a significant number

Attachment 3
52 of delinquencies occurs, the City could be unable to replenish the Reserve Fund to the Reserve Requirement. If such defaults were to continue in successive years, the Reserve Fund could be depleted and a default on the Series 2025 Bonds could occur.

The City has covenanted in the Fiscal Agent Agreement that, under certain conditions, it will institute judicial foreclosure proceedings to sell any property with delinquent Special Taxes in order to obtain funds to pay debt service on the Bonds. If foreclosure proceedings were ever instituted, any mortgage or deed of trust holder could, but would not be required to, advance the amount of the delinquent Special Tax to protect its security interest. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Proceeds of Foreclosure Sales” for provisions which apply in the event of such foreclosure and which the City is required to follow in the event of delinquencies in the payment of the Special Tax.

In the event that sales or foreclosures of property are necessary, there could be a delay in payments to owners of the Series 2025 Bonds (if the Reserve Fund has been depleted) pending such sales or the prosecution of such foreclosure proceedings and receipt by the City on behalf of the District of the proceeds of sale. The City may adjust the future Special Tax levied on taxable parcels in Improvement Area No. 1, subject to the limitation on the Maximum Special Tax, to provide an amount required to pay interest on, principal of, and redemption premiums, if any, on the Bonds, and the amount, if any, necessary to replenish the Reserve Fund to an amount equal to the Reserve Requirement and to pay all current expenses. There is, however, no assurance that the total amount of the Special Tax that could be levied and collected against taxable parcels in Improvement Area No. 1 will be at all times sufficient to pay the amounts required to be paid by the Fiscal Agent Agreement, even if the Special Tax is levied at the Maximum Special Tax rates. See “— Bankruptcy and Foreclosure” below for a discussion of potential delays in foreclosure actions.

The Amended Rate and Method governing the levy of the Special Tax permits the City Council to classify an Assessor’s Parcel as Exempt Property under the circumstances described in the Amended Rate and Method so long as such classification would not reduce the Acreage of all Taxable Property in Zone 1 of Improvement Area No. 1 to less than 8.4 acres or in Zone 2 of Improvement Area No. 1 to less than 11.7 acres. See APPENDIX A — “AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” If for any reason property within Improvement Area No. 1 becomes exempt from taxation by reason of ownership by a non-taxable entity such as the federal government, another public agency or a religious organization, subject to the limitations of the maximum authorized rates, the Special Tax will be reallocated to the remaining taxable properties within Improvement Area No. 1. This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon the ability and willingness of the owners of such property to pay the Special Tax when due.

The Act provides that, if any property within Improvement Area No. 1 not otherwise exempt from the Special Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax will continue to be levied on and enforceable against the public entity that acquired the property. In addition, the Act provides that, if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment and be paid from the eminent domain award. The constitutionality and operation of these provisions of the Act have not been tested in the courts. Due to problems of collecting taxes from public agencies, if a substantial portion of land within Improvement Area No. 1 was to become owned by public agencies, collection of the Special Tax might become more difficult and could result in collections of the Special Tax which might not be sufficient to pay principal of and interest on the Bonds when due and a default could occur with respect to the payment of such principal and interest.

Failure to Develop Properties
Development of property within Improvement Area No. 1 may be subject to unexpected delays, disruptions and changes which may affect the willingness and ability of the Developers or any future property

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53 owner to pay the Special Taxes when due. Land development is subject to comprehensive federal, State and local regulations. Approval is required from various agencies in connection with the layout and design of developments, the nature and extent of improvements, construction activity, land use, zoning, school and health requirements, as well as numerous other matters. There is always the possibility that such approvals will not be obtained or, if obtained, will not be obtained on a timely basis. Failure to obtain any such agency approval or satisfy such governmental requirements would adversely affect planned land development. Development of land in Improvement Area No. 1 is also subject to the availability of water. Finally, development of land is subject to economic considerations.

No assurance can be given that the remaining proposed development will be partially or fully completed; and for purposes of evaluating the investment quality of the Series 2025 Bonds, prospective purchasers should consider the possibility that such parcels will remain unimproved or in a mass graded condition.

Undeveloped or partially developed land is inherently less valuable than developed land and provides less security to the Owners of the Bonds should it be necessary for the City to foreclose on the property due to the nonpayment of Special Taxes. The failure to complete development of the required infrastructure for development in Improvement Area No. 1 as planned, or substantial delays in the completion of the development or the required infrastructure for the development due to litigation or other causes may reduce the value of the property within Improvement Area No. 1 and increase the length of time during which Special Taxes will be payable from undeveloped property, and may affect the willingness and ability of the owners of property within Improvement Area No. 1 to pay the Special Taxes when due.

There can be no assurance that land development operations within Improvement Area No. 1 will not be adversely affected by future deterioration of the real estate market and economic conditions or future local, State and federal governmental policies relating to real estate development, an increase in mortgage interest rates, the income tax treatment of real property ownership, or the national economy. A slowdown of the development process and the absorption rate could adversely affect land values and reduce the ability or desire of the property owners to pay the annual Special Taxes. In that event, there could be a default in the payment of principal of, and interest on, the Bonds when due.

Owners of the Bonds should assume that any event that significantly impacts the ability to develop land in Improvement Area No. 1 would cause the property values within Improvement Area No. 1 to decrease substantially from those estimated by the Appraiser and could affect the willingness and ability of the owners of land within Improvement Area No. 1 to pay the Special Taxes when due. [The City will levy Special Taxes on Undeveloped Property for Fiscal Year 2025-26 and expects to levy Special Taxes on Undeveloped Property in future fiscal years until the Special Taxes levied on Developed Property are sufficient to pay debt service on the Bonds and to fund Administrative Expenses.] Undeveloped Property is less valuable per unit of area than Developed Property, especially if there are no plans to develop such land or if there are severe restrictions on the development of such land. The Undeveloped Property also provides less security to the Owners of the Bonds should it be necessary for the City to foreclose on Undeveloped Property due to the nonpayment of the Special Taxes. Furthermore, an inability to develop the land within Improvement Area No. 1 as currently proposed will make the Owners of the Bonds dependent upon timely payment of the Special Taxes levied on Undeveloped Property. A slowdown or stoppage in the continued development of Improvement Area No. 1 could reduce the willingness and ability of the Developers or any successors to make Special Tax payments on Undeveloped Property and could greatly reduce the value of such property in the event it has to be foreclosed upon. See “—Property Values.”
Special Tax Delinquencies
Under provisions of the Act, the Special Taxes, from which funds necessary for the payment of principal of, and interest on, the Bonds are derived, are customarily billed to the properties within Improvement Area No.

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54 1 on the ad valorem property tax bills sent to owners of such properties. The Act currently provides that such Special Tax installments are due and payable, and bear the same penalties and interest for non-payment, as do ad valorem property tax installments. The District, however, is currently included in the County’s Teeter Plan and, as a result, the City expects to receive 100% of the Special Tax levy, without regard to the actual amount of collections. See “SECURITY FOR THE BONDS — Teeter Plan” and “RISK FACTORS—Teeter Plan Termination.”
See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Proceeds of Foreclosure Sales,” for a discussion of the provisions which apply, and procedures which the City is obligated to follow under the Fiscal Agent Agreement, in the event of delinquencies in the payment of Special Taxes. See “RISK FACTORS — FDIC/Federal Government Interests in Properties” below, for a discussion of the policy of the Federal Deposit Insurance Corporation (the “FDIC”) regarding the payment of special taxes and assessment and limitations on the City’s ability to foreclose on the lien of the Special Taxes in certain circumstances where property within Improvement Area No. 1 is owned by the federal government, agencies of the federal government, or, possibly, government sponsored enterprises such as Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”).

The City has the authority and the obligation, subject to the Act and the Maximum Special Tax rates set forth in the Amended Rate and Method, to increase the levy of Special Taxes against non-delinquent property owners in Improvement Area No. 1 in the event other owners in Improvement Area No. 1 are delinquent. Pursuant to the Amended Rate and Method and the Act, under no circumstances may the Special Tax levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by owner of any other parcel or parcels within Improvement Area No. 1 by more than 10% in any Fiscal Year. Thus, the City may not be able to increase Special Tax levies in future Fiscal Years by enough to make up for delinquencies for prior Fiscal Years. This would result in draws on the Reserve Fund, and if delinquencies continue and in the aggregate exceed the Reserve Fund balance, defaults would occur in the payment of principal and interest on the Series 2025 Bonds.

Although the City will covenant in the Fiscal Agent Agreement to commence and diligently pursue foreclosure under the circumstances described under the caption “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Proceeds of Foreclosure Sales,” foreclosure delays may occur under the circumstances described under the caption “RISK FACTORS — Bankruptcy and Foreclosure.” Delinquencies may result as a consequence of many factors. See “RISK FACTORS,” generally, for a discussion of certain potential causes of delinquencies.

Natural Disasters
The District, like all California communities, may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. California is a seismically active area. Seismic activity represents a potential risk for damage to buildings, roads, bridges and property within Improvement Area No. 1. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event. According to the California Department of Conservation and the California Geological Survey, the property within Improvement Area No. 1 is not located in an Alquist-Priolo Earthquake Special Study Zone and is not located in a liquefaction zone.

Additionally, all of the lots in Improvement Area No. 1 are located outside the 500-year floodplain.

Seismic Hazard. The area encompassed by the City, like that in much of California, may be subject to unpredictable seismic activity. The County contains several fault traces and has been subject to intense warping, folding and faulting. While most of the faults within the County have not been active in recent geologic times, movement may occur along one or several of these minor faults, and movements along the major principal faults traversing the County, including the San Andreas and Nacimiento Faults. The structural trend in the area is northwest to southeast, controlled mainly by the San Andreas Fault. Numerous fault traces have been detected in the area, but most have not been active in recent geologic time (San Luis Obispo County, 1980). Active faults are

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55 those along which there has been movement within the last 11,000 years; “proven” active faults have had movement within the last 300 years. The Paso Robles area is exposed to seismic hazards from movement along several regional faults. The identified active fault zones in this area are the San Andreas, Nacimiento, Rinconada, and “Offshore Faults,” although the classification of the Rinconada Fault as active has been much disputed (Quad Consultants, 1980). Historically, most of the earthquakes detected in Paso Robles have originated from movement along the San Andreas Fault, which lies approximately 23 miles northeast of the City, near the Town of Cholame.

In the Paso Robles Area, the San Andreas Fault is identified as the primary source of potential ground shaking.

Magnitudes as high as 6.5 have been recorded twice in the past from movement along the San Andreas.

Flood Hazard. Potential hazards for Paso Robles include riverine flooding, also known as overbank flooding due to excessive rainfall, and localized flooding. Localized flooding may occur outside of recognized drainage channels or delineated floodplains due to a combination of locally heavy precipitation, increased surface runoff, and inadequate facilities for drainage and stormwater conveyance. The Paso Robles area is subject to flood hazards from the Huerhuero Creek, Dry Creek, the Salinas River floodplains, and their tributaries. This has the potential to occur in events where runoff is too great for the system, or the storm water system is disrupted by vegetation or other debris causing excess water to remain on the surface.

In recent years, wildfires have caused extensive damage throughout the State. Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes. In some instances, entire neighborhoods have been destroyed. In January 2025, multiple fires occurred across communities in Los Angeles County, including Pacific Palisades, Malibu and Altadena, some of which damaged or destroyed property in areas that were not previously considered to be at risk from such events.

Fire Hazard. In August 2025, the Gifford Fire burned over 130,000 acres is San Luis Obispo and Santa Barbara counties and damaged 5 building structures. No structures in the City were damaged. While some areas were evacuated, [there were no evacuations of City residents.] In addition, other fires with smaller impact, such as the Solar Fire, Salt Fire and the Walnut Fire have occurred in areas proximate to the City. No damage, however, was done to any structures within the City due to these fires.

In March 2025, Department of Forestry and Fire Protection of the State of California (“Cal Fire”) released an updated Fire Hazard Severity Zone map for the Southern California region. The Cal Fire Hazard Severity Zone maps evaluate fire hazard, which is defined as the likelihood and expected fire behavior over a 30 to 50-year period without considering mitigation measures such as home hardening, recent wildfire or fuel reduction efforts, as opposed to risk, which is the potential damage a fire can do to the area under existing conditions, accounting for any modifications such as fuel reduction projects, defensible space, and ignition resistant building construction. Pursuant to State law, the State Fire Marshal is mandated to classify the state responsibility areas where the state has financial responsibility for wildfire protection and prevention into Fire Hazard Severity Zones classified as “Moderate,” “High” or “Very High.” For more information on Cal Fire’s Fire Hazard Severity Zone maps, see the Cal Fire website. The District is not located within a Moderate or High Fire Hazard Severity Zone as recommended by Cal Fire. [ANY MAP ADOPTION BY CITY TO COME] Improvement Area No. 1 is located within an area which the Department of Forestry and Fire Protection of the State of California has designated as a high fire hazard severity zone. No assurance can be given as to the severity or frequency of wildfires within the vicinity of or in Improvement Area No. 1.

On January 16, 2025, Governor Gavin Newsom issued Executive Order N-10-25 (the “Governor’s Order”) which suspended penalties, costs and interest on overdue property taxes (including special taxes) within certain zip codes affected by the Palisades Fire during calendar year 2025. In the event of a major fire or other natural disaster affecting the City or the District, a similar order affecting the City or the District could impact the collection of Special Taxes needed to make debt service payments for the Series 2025 Bonds.

In the event of a severe earthquake, fire, flood or other natural disaster, there may be significant damage to both property and infrastructure in Improvement Area No. 1. As a result, a substantial portion of the property

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56 owners may be unable or unwilling to pay the Special Taxes when due. In addition, the value of land in Improvement Area No. 1 could be diminished in the aftermath of such a natural disaster, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Special Taxes.

Hazardous Substances
The presence of hazardous substances on a parcel may result in a reduction in the value of a parcel. In general, the owners and operators of a parcel may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner or operator is obligated to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the taxed parcels be affected by a hazardous substance, is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.

Further, it is possible that liabilities may arise in the future with respect to any of the parcels resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently on the parcel of a substance not presently classified as hazardous but which may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of a parcel that is realizable upon a delinquency and the willingness or ability of the owner of any parcel to pay the Special Tax Installments.

The value of the taxable property within Improvement Area No. 1, as set forth in the various tables in this Official Statement, does not reflect the presence of any hazardous substance or the possible liability of the owner (or operator) for the remedy of a hazardous substance condition of the property. The City has not independently verified, but is not aware, that any owner (or operator) of any of the parcels within Improvement Area No. 1 has such a current liability with respect to any such parcel. It is possible, however, that such liabilities do currently exist and that City is not aware of them.

Parity Taxes and Special Assessments
Property within Improvement Area No. 1 is subject to taxes imposed by public agencies also having jurisdiction over the land within Improvement Area No. 1. See “IMPROVEMENT AREA NO. 1 — Estimated Direct and Overlapping Indebtedness.”
The Special Taxes and any related penalties will constitute a lien against the lots and parcels of land on which they will be annually imposed until they are paid. Such lien is on a parity with all special taxes and special assessments levied by the City and other agencies and is co-equal to and independent of the lien for general property taxes regardless of when they are imposed upon the same property. The Special Taxes have priority over all existing and future private liens imposed on the property except, possibly, for liens or security interests held by the Federal Deposit Insurance Corporation. See “RISK FACTORS — Bankruptcy and Foreclosure” below.

Neither the District nor the City has control over the ability of other entities and districts to issue indebtedness secured by special taxes, ad valorem taxes or assessments payable from all or a portion of the property within Improvement Area No. 1. In addition, the landowners within Improvement Area No. 1 may, without the consent or knowledge of the City, petition other public agencies to issue public indebtedness secured by special taxes, ad valorem taxes or assessments. Any such special taxes, ad valorem taxes or assessments may

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57 have a lien on such property on a parity with the Special Taxes and could reduce the estimated value-to-lien ratios for property within Improvement Area No. 1 described in this Official Statement. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS” and “IMPROVEMENT AREA NO. 1 — Estimated Direct and Overlapping Indebtedness.”
Disclosures to Future Purchasers
The willingness or ability of an owner of a parcel to pay the Special Tax even if the value of the parcel is sufficient may be affected by whether or not the owner was given due notice of the Special Tax authorization at the time the owner purchased the parcel, was informed of the amount of the Special Tax on the parcel should the Special Tax be levied at the maximum tax rate and the risk of such a levy, and, at the time of such a levy, has the ability to pay it as well as pay other expenses and obligations. The City has caused the Notice of Special Tax Lien and Amendment to Notice of Special Tax Lien to be recorded in the Office of the Recorder for the County against each parcel in Improvement Area No. 1. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Special Tax obligation in the purchase of a property within Improvement Area No. 1 or lending of money thereon.

The Act requires the subdivider (or its agent or representative) of a subdivision to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section 1102.6b requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statute.

Failure by an owner of the property to comply with the above requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax when due.

Non-Cash Payments of Special Taxes
Under the Act, the City Council, as the legislative body of the District, may reserve to itself the right and authority to allow the owner of any taxable parcel to tender a Bond in full or partial payment of any installment of the Special Taxes or the interest or penalties thereon. A Bond so tendered is to be accepted at par and credit is to be given for any interest accrued thereon to the date of the tender. Thus, if Bonds can be purchased in the secondary market at a discount, it may be to the advantage of an owner of a taxable parcel to pay the Special Taxes applicable thereto by tendering a Bond. Such a practice would decrease the cash flow available to the City to make payments with respect to other Bonds then outstanding; and, unless the practice was limited by the City, the Special Taxes paid in cash could be insufficient to pay the debt service due with respect to such other Bonds.

In order to provide some protection against the potential adverse impact on cash flows which might be caused by the tender of Bonds in payment of Special Taxes, the Fiscal Agent Agreement includes a covenant pursuant to which the City will not authorize owners of taxable parcels to satisfy Special Tax obligations by the tender of Bonds unless the City shall have first obtained a report of an Independent Financial Consultant certifying that doing so would not result in the City having insufficient Special Tax Revenues to pay the principal of and interest on all Outstanding Bonds when due.

Payment of the Special Tax Is Not a Personal Obligation of the Owners An owner of a taxable parcel is not personally obligated to pay the Special Tax. Rather, the Special Tax is an obligation which is secured only by a lien against the taxable parcel. If the value of a taxable parcel is not sufficient, taking into account other liens imposed by public agencies, to secure fully the Special Tax, the City has no recourse against the owner.

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58 Concentration of Ownership
As of November 1, 2025, a total of 23 homes within Improvement Area No. 1 had closed to individual homeowners. Based on development and ownership status as of September 8, 2025, Shea is expected to be responsible for [__]%, and Trumark is expected to be responsible for [__]%, of the projected Fiscal Year 2026- 27 Special Tax levy.

The timely payment of principal of and interest on the Bonds depends upon the willingness and ability of the current and future property owners in Improvement Area No. 1 to pay the Special Taxes prior to delinquency.

General and local economic conditions and governmental requirements or restrictions may affect the willingness of the current property owners, or any successor property owners, to pay the Special Taxes, and there is no assurance that the current property owners, or any successor property owners, will pay such Special Taxes even if financially able to do so. Due to the concentration of ownership of the property within Improvement Area No. 1, a failure by the Developers or any successor property owner thereto to pay the Special Taxes may result in a default in the payment of debt service on the Bonds. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” Failure of the Developers or any successors to pay the annual Special Taxes when due could also result in a draw on the Reserve Account of the Special Tax Fund, and ultimately a default in payments of the principal of, and interest on, the Bonds, when due. No assurance can be given that the Developers or their successors will complete the remaining intended construction and development in Improvement Area No. 1. See “— Failure to Develop Properties.”
[In Fiscal Year 2025-26, a majority of the Special Tax levy was on property within Improvement Area No. 1 classified as Undeveloped Property.] Undeveloped Property is defined in the Amended Rate and Method as property not classified as Developed Property, Final Mapped Property, Public Property or Property Owner’s Association Property. In the event that the Developers fail to complete the remaining intended construction and development in Improvement Area No. 1, Special Taxes will continue to be levied on Undeveloped Property owned by such entities. No assurance can be given that the Developers or any successors will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See “— Bankruptcy and Foreclosure” for a discussion of certain limitations on the District’s ability to pursue judicial proceedings with respect to delinquent parcels.

Property Values
The value of the property within Improvement Area No. 1 is a critical factor in determining the investment quality of the Series 2025 Bonds. If a property owner is delinquent in the payment of Special Taxes, the City’s only remedy is to commence foreclosure proceedings against the delinquent parcel in an attempt to obtain funds to pay the Special Taxes. Reductions in property values due to a downturn in the economy, physical events such as earthquakes, fires or floods, stricter land use regulations, delays in development or other events will adversely impact the security underlying the Special Taxes. See “IMPROVEMENT AREA NO. 1 — Appraisal Report” and APPENDIX B — “APPRAISAL REPORT.”
The Appraisal Report assumes a value of property based upon the receipt of Series 2025 Bond proceeds in an amount based upon a 4-to-1 value to lien ratio for the Series 2025 Bonds, while the anticipated amount of Series 2025 Bond proceeds is expected to be in an amount which achieves a value to lien ratio slightly higher than 4-to-1 for the Series 2025 Bonds. See APPENDIX B — “APPRAISAL REPORT.” The Appraiser has estimated, on the basis of certain assumptions and limiting conditions contained in the Appraisal Report, that as of the Date of Value, the market value of the property within Improvement Area No. 1 was not less than $53,692,000. See “IMPROVEMENT AREA NO. 1 — Appraisal Report.” The Appraisal Report indicates the Appraiser’s opinion as to the minimum market value of the properties referred to therein as of the date and under the conditions specified therein. The Appraiser’s opinion reflects conditions prevailing in the applicable market as of the Date of Value. The Appraiser’s opinion does not predict the future value of the

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59 subject property, and there can be no assurance that market conditions will not change adversely in the future.

The values are based on the estimated numbers of units which is subject to change.

Prospective purchasers of the Series 2025 Bonds should not assume that the taxable land within Improvement Area No. 1 could be sold for the appraised amount at a foreclosure sale for delinquent Special Taxes.

In arriving at the estimate of market value, the Appraiser assumes that any sale will be unaffected by undue stimulus and will occur following a reasonable marketing period, which is not always present in a foreclosure sale. See Appendix B for a description of other assumptions made by the Appraiser and for the definitions and limiting conditions used by the Appraiser. Any event which causes one of the Appraiser’s assumptions to be untrue could result in a reduction of the value of the taxable land and improvements within Improvement Area No. 1 from the market value estimated by the Appraiser.

No assurance can be given that any bid will be received for a parcel with delinquent Special Taxes offered for sale at foreclosure or, if a bid is received, that such bid will be sufficient to pay all delinquent Special Taxes.

See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Proceeds of Foreclosure Sales.”
FDIC/Federal Government Interests in Properties
General. The ability of the City to foreclose the lien of delinquent unpaid Special Tax installments may be limited with regard to properties in which the Federal Deposit Insurance Corporation (the “FDIC”), the Drug Enforcement Agency, the Internal Revenue Service, or other federal agency has or obtains an interest.

The supremacy clause of the United States Constitution reads as follows: “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the contrary notwithstanding.” This means that, unless Congress has otherwise provided, if a federal governmental entity owns a parcel that is subject to Special Taxes within Improvement Area No. 1 but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.

Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the City wishes to foreclose on the parcel as a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government’s mortgage interest. In Rust v. Johnson (9th Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, Ninth Circuit held that the Federal National Mortgage Association (“FNMA”) is a federal instrumentality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of state power over a mortgage interest held by FNMA constitutes an exercise of state power over property of the United States.

The City has not undertaken to determine whether any federal governmental entity currently has, or is likely to acquire, any interest (including a mortgage interest) in any of the parcels subject to the Special Taxes within Improvement Area No. 1, and therefore expresses no view concerning the likelihood that the risks described above will materialize while the Bonds are outstanding.

FDIC. In the event that any financial institution making any loan which is secured by real property within Improvement Area No. 1 is taken over by the FDIC, and prior thereto or thereafter the loan or loans go into default, resulting in ownership of the property by the FDIC, then the ability of the City to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited. The FDIC’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”)

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60 provides that property owned by the FDIC is subject to state and local real property taxes only if those taxes are assessed according to the property’s value, and that the FDIC is immune from real property taxes assessed on any basis other than property value. According to the Policy Statement, the FDIC will pay its property tax obligations when they become due and payable and will pay claims for delinquent property taxes as promptly as is consistent with sound business practice and the orderly administration of the institution’s affairs, unless abandonment of the FDIC’s interest in the property is appropriate. The FDIC will pay claims for interest on delinquent property taxes owed at the rate provided under state law, to the extent the interest payment obligation is secured by a valid lien.

The FDIC will not pay any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts. If any property taxes (including interest) on FDIC-owned property are secured by a valid lien (in effect before the property became owned by the FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC’s consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC’s consent.

The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes, including special assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Special taxes imposed under the Act and a special tax formula which determines the special tax due each year are specifically identified in the Policy Statement as being imposed each year and therefore covered by the FDIC’s federal immunity. The Ninth Circuit has issued a ruling on August 28, 2001 in which it determined that the FDIC, as a federal agency, is exempt from Mello-Roos special taxes.

The City is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency in the payment of Special Taxes on a parcel within Improvement Area No. 1 in which the FDIC has or obtains an interest, although prohibiting the lien of the Special Taxes to be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale.

Such an outcome could cause a draw on the Reserve Fund and perhaps, ultimately, if enough property were to become owned by the FDIC, a default in payment on the Bonds.

Teeter Plan Termination
The County has implemented its Teeter Plan as an alternate procedure for the distribution of certain property tax and assessment levies on the secured roll. Pursuant to its Teeter Plan, the County has elected to provide certain local agencies and taxing areas, including the District, with full tax and assessment levies instead of actual tax and assessment collections. In return, the County is entitled to retain all delinquent tax and assessment payments, penalties and interest. Thus, the County’s Teeter Plan may protect the Holders of the Series 2025 Bonds from the risk of delinquencies in the payment of the Special Tax. The County is entitled, however, and under certain circumstances could be required, to terminate its Teeter Plan with respect to all or part of the local agencies and taxing areas covered thereby. A termination of the Teeter Plan with respect to the District would eliminate such protection from delinquencies in the payment of the Special Tax. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Teeter Plan.”
Bankruptcy and Foreclosure
Bankruptcy, insolvency and other laws generally affecting creditors’ rights could adversely impact the interests of owners of the Bonds in at least two ways. First, the payment of property owners’ taxes and the ability of the City to foreclose the lien of a delinquent unpaid Special Tax pursuant to its covenant to pursue judicial foreclosure proceedings may be limited by bankruptcy, insolvency or other laws generally affecting creditors’ rights or by the laws of the State relating to judicial foreclosure. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS—Special Taxes—Proceeds of Foreclosure Sales.” In addition, the prosecution of a foreclosure could be delayed due to many reasons, including crowded local court calendars or lengthy procedural delays.

Attachment 3
61 Second, the Bankruptcy Code might prevent moneys on deposit in the Improvement Fund from being applied to pay interest on the Bonds and/or to redeem Bonds if bankruptcy proceedings were brought by or against a landowner or other party and if the court found that the landowner or other party had an interest in such moneys within the meaning of Section 541(a)(1) of the Bankruptcy Code.

Although a bankruptcy proceeding would not cause the Special Taxes to become extinguished, the amount of any Special Tax lien could be modified if the value of the property falls below the value of the lien. If the value of the property is less than the lien, such excess amount could be treated as an unsecured claim by the bankruptcy court. In addition, bankruptcy of a property owner could result in a delay in prosecuting Superior Court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of delinquent Special Tax installments and the possibility of delinquent Special Tax installments not being paid in full.

On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued its opinion in a bankruptcy case entitled In re Glasply Marine Industries. In that case, the court held that ad valorem property taxes levied by Snohomish County in the State of Washington after the date that the property owner filed a petition for bankruptcy were not entitled to priority over a secured creditor with a prior lien on the property. Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid taxes imposed after the filing of the bankruptcy petition were declared to be “administrative expenses” of the bankruptcy estate, payable after all secured creditors. As a result, the secured creditor was able to foreclose on the property and retain all the proceeds of the sale except the amount of the pre-petition taxes.

The Bankruptcy Reform Act of 1994 (the “Bankruptcy Reform Act”) included a provision which excepts from the Bankruptcy Code’s automatic stay provisions, “the creation of a statutory lien for an ad valorem property tax imposed by . . . a political subdivision of a state if such tax comes due after the filing of the petition [by a debtor in bankruptcy court].” This amendment effectively makes the Glasply holding inoperative as it relates to ad valorem real property taxes. It is possible, however, that the original rationale of the Glasply ruling could still result in the treatment of post-petition special taxes as “administrative expenses,” rather than as tax liens secured by real property, at least during the pendency of bankruptcy proceedings.

According to the court’s ruling, as administrative expenses, post-petition taxes would be paid, assuming that the debtor had sufficient assets to do so. In certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise), it would at that time become subject to current ad valorem taxes.

The Act provides that the Special Taxes are secured by a continuing lien which is subject to the same lien priority in the case of delinquency as ad valorem taxes. No case law exists with respect to how a bankruptcy court would treat the lien for Special Taxes levied after the filing of a petition in bankruptcy. Glasply is controlling precedent on bankruptcy courts in the State. If the Glasply precedent was applied to the levy of the Special Taxes, the amount of Special Taxes received from parcels whose owners declare bankruptcy could be reduced.

The various legal opinions to be delivered concurrently with the delivery of the Series 2025 Bonds (including Bond Counsel’s approving legal opinion) will be qualified, as to the enforceability of the various legal instruments, by moratorium, bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally.

Depletion of Reserve Fund
The Reserve Fund is to be maintained at an amount equal to the Reserve Requirement. Money in said fund may be used to pay debt service on the Series 2025 Bonds in the event the proceeds of the levy and collection of the Special Tax against property in Improvement Area No. 1 are insufficient. If funds in the Reserve Fund are used to pay debt service on the Series 2025 Bonds, the funds can be replenished from the proceeds of the levy and

Attachment 3
62 collection of the Special Tax that are in excess of the amount required to pay all amounts to be paid pursuant to the Fiscal Agent Agreement. No replenishment from the proceeds of a levy of the Special Tax, however, can occur as long as the proceeds that are collected from the levy of the Special Tax at the maximum tax rates, together with other available funds, remain insufficient to pay all such amounts. Thus, it is possible that the Reserve Fund will be depleted by its use to pay such amounts and will not be replenished by the levy of the Special Tax. There is no assurance that the amount in the Reserve Fund will, at any particular time, be sufficient to pay all such amounts or that any amounts of the Reserve Requirement used for debt service on the Series 2025 Bonds will be fully replenished from the proceeds of the levy and collection of the Special Tax.

No Acceleration Provision
The Series 2025 Bonds do not contain a provision allowing for the acceleration of the Series 2025 Bonds in the event of a payment default or other default under the Series 2025 Bonds or the Fiscal Agent Agreement or in the event interest on the Series 2025 Bonds becomes included in gross income for federal income tax purposes.

See “— Limitations on Remedies” below.

Loss of Tax Exemption
As discussed under the caption “LEGAL MATTERS — Tax Matters,” the interest on the Series 2025 Bonds could become includable in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2025 Bonds as a result of a failure of the City to comply with certain provisions of the Internal Revenue Code of 1986, as amended. Such an event of taxability would not in and of itself result in an early redemption of the Series 2025 Bonds and the Series 2025 Bonds will remain outstanding to maturity or until redeemed under the redemption provisions of the Fiscal Agent Agreement.

Current or future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Series 2025 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest.

Legislative changes have previously been proposed in Congress, which, if enacted, would result in additional federal income tax being imposed on certain owners of tax-exempt state or local obligations, such as the Series 2025 Bonds. The introduction or enactment of any pending or future legislative proposals, clarification of the Code or court decisions may also affect the market price for, or marketability of, the Series 2025 Bonds.

Prospective purchasers of the Series 2025 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

It is possible that subsequent to the issuance of the Series 2025 Bonds there might be federal, State, or local statutory changes (or judicial or regulatory interpretations of federal, State, or local law) that affect the federal, State, or local tax treatment of the Series 2025 Bonds or the market value of the Series 2025 Bonds.

Legislative changes have been introduced in Congress, which, if enacted, could result in additional federal income or state tax being imposed on owners of tax-exempt state or local obligations, such as the Series 2025 Bonds. The introduction or enactment of any of such changes could adversely affect the market value or liquidity of the Series 2025 Bonds. No assurance can be given that subsequent to the issuance of the Series 2025 Bonds such changes or interpretations will not occur. Before purchasing any of the Series 2025 Bonds, all potential purchasers should consult their tax advisors regarding possible statutory changes or judicial or regulatory changes or interpretations, and their collateral tax consequences relating to the Series 2025 Bonds. See “TAX MATTERS” below.

Attachment 3
63 Limitations on Remedies
Remedies available to the owners of the Series 2025 Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Series 2025 Bonds or to preserve the tax-exempt status of the Series 2025 Bonds.

Bond Counsel has limited its opinion as to the enforceability of the Series 2025 Bonds and of the Fiscal Agent Agreement to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium, or other similar laws affecting generally the enforcement of creditors’ rights, by equitable principles and by the exercise of judicial discretion. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the owners of the Series 2025 Bonds.

Limited Secondary Market
There can be no guarantee that there will be a secondary market for the Series 2025 Bonds or, if a secondary market exists, that such Series 2025 Bonds can be sold for any particular price. Although the City has committed to provide certain financial and operating information on an annual basis, there can be no assurance that such information will be available to Owners of the Series 2025 Bonds on a timely basis. See “CONTINUING DISCLOSURE.” The failure to provide the required annual financial information does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions, lack of current information, or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated.

Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances.

Such prices could be substantially different from the original purchase price.

Proposition 218
An initiative measure commonly referred to as the “Right to Vote on Taxes Act” (the “Initiative”) was approved by the voters of the State at the November 5, 1996 general election. The Initiative added Article XIIIC and Article XIIID to the California Constitution. According to the “Title and Summary” of the Initiative prepared by the California Attorney General, the Initiative limits “the authority of local governments to impose taxes and property-related assessments, fees and charges.” The provisions of the Initiative have not yet been interpreted by the courts, although several lawsuits have been filed requesting the courts to interpret various aspects of the Initiative. The Initiative could potentially impact the Special Taxes available to the City to pay the principal of and interest on the Bonds as described below.

Among other things, Section 3 of Article XIII states that “. . . the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.” The Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the Amended Rate and Method of apportionment of an existing special tax. However, the Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislative body determines that the reduction or termination of the special tax would not interfere with the timely retirement of that debt. On July 1, 1997, a bill was signed into law by the Governor of the State enacting Government Code Section 5854, which states that:
“Section 3 of Article XIIIC of the California Constitution, as adopted at the November 5, 1996, general election, shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after that date, assumes the risk of, or in any way consents to, any action by initiative measure that constitutes an impairment of contractual rights protected by Section 10 of Article I of the United States Constitution.”

Attachment 3
64 Accordingly, although the matter is not free from doubt, it is likely that the Initiative has not conferred on the voters the power to repeal or reduce the Special Taxes if such reduction would interfere with the timely retirement of the Bonds.

It may be possible, however, for voters or the City Council acting as the legislative body of the District to reduce the Special Taxes in a manner which does not interfere with the timely repayment of the Bonds, but which does reduce the maximum amount of Special Taxes that may be levied in any year below the existing levels. Furthermore, no assurance can be given with respect to the future levy of the Special Taxes in amounts greater than the amount necessary for the timely retirement of the Bonds. Therefore, no assurance can be given with respect to the levy of Special Taxes for Administrative Expenses. Nevertheless, to the maximum extent that the law permits it to do so, the City will covenant in the Fiscal Agent Agreement that it will not initiate proceedings under the Act to reduce the Maximum Rates on then existing Developed Property in Improvement Area No. 1 below the amounts which are necessary to provide Special Tax Revenues in an amount equal to estimated Administrative Expenses for the then current Fiscal Year plus an amount equal to one hundred ten percent (110%) of Maximum Annual Debt Service on the Outstanding Bonds. The City will also covenant in the Fiscal Agent Agreement that, in the event an initiative is adopted which purports to alter the Amended Rate and Method, it will commence and pursue legal action in order to preserve its ability to comply with the foregoing covenant. No assurance, however, can be given as to the enforceability of the foregoing covenants.

The interpretation and application of Article XIIIC and Article XIIID will ultimately be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainty the outcome of such determination or the timeliness of any remedy afforded by the courts. See “RISK FACTORS — Limitations on Remedies.”
Litigation with Respect to Community Facilities Districts Shapiro. With respect to the approval of the Special Taxes, on August 1, 2014, the California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in City of San Diego v. Melvin Shapiro, et al. (D063997) (the “San Diego Decision”). The case involved a Convention Center Facilities District (the “CCFD”) established by the City of San Diego (“San Diego”). The CCFD is a financing district much like a community facilities district established under the provisions of the Act. The CCFD is comprised of all of the real property in San Diego. The special tax to be levied within the CCFD, however, was to be levied only on hotel properties located within the CCFD.

The election authorizing the special tax was limited to owners of hotel properties and lessees of real property owned by a governmental entity on which a hotel is located. Thus, the election was not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was modeled after Section 53326(c) of the Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed district whose property would be subject to the special tax. The Court held that the CCFD special tax election was invalid under the California Constitution because Article XIIIA, Section 4 thereof and Article XIIIC, Section 2 thereof require that the electors in such an election be the registered voters within the district.

The facts of the San Diego Decision show that there were thousands of registered voters within the CCFD (viz., all of the registered voters in San Diego). The election held in Improvement Area No. 1 had no registered voters within Improvement Area No. 1 at the time of the election to authorize the Special Tax. In the San Diego Decision, the Court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the Court’s holding does not apply to the Special Tax election in Improvement Area No. 1.

Attachment 3
65 Horizon. The Sacramento County Superior Court had issued a ruling in Horizon Capital Investments, LLC v. City of Sacramento et al. (Case No. 34-2017-80002661). As described below, this case involved an election to approve the levy of a special tax within a community facilities district (“CFD”) formed under the Act.

In 2017, the City of Sacramento initiated proceedings to form a CFD to finance certain costs to operate and maintain a streetcar line. As permitted by the Act, the proposed district included non-contiguous parcels of non-residential property. Because there were fewer than 12 registered voters residing within the territory of the proposed CFD, the City Council submitted the special tax proposed to be levied within the proposed CFD to the owners of land within the proposed CFD, as required by the Act. The proposed special tax received the requisite two-thirds vote in the landowner election.

Petitioners Horizon Capital Investments, LLC et al. filed a writ of mandate and complaint for reverse validation and declaratory relief. Petitioners argued, and the superior court agreed in its final ruling, that under section 4(a) of article XIII A of the California Constitution (which provides that “Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district [sic], may impose special taxes on such district…”) the phrase “qualified electors” means the registered voters of the entire City of Sacramento and not just the owners of the property within the boundaries of the proposed CFD. Citing the San Diego Decision, the tentative ruling states that the phrase “qualified electors of the district” refers to the registered voters of the entity imposing the special tax, which in this case was the City of Sacramento. Because the vote within the proposed CFD was by landowners only and not by all registered voters in the City of Sacramento, the final ruling states that the special tax is invalid.

The superior court’s final ruling is not binding upon other courts within the State and does not directly apply to the District, the Special Taxes, or the Bonds. The City of Sacramento did not appeal the superior court’s ruling.

The Special Tax Election in the District. With respect to the San Diego Decision, the facts of the San Diego Decision show that there were thousands of registered voters within the CCFD (viz., all of the registered voters in San Diego). The election held in Improvement Area No. 1 had no registered voters within Improvement Area No. 1 at the time of the election to authorize the Special Tax. In the San Diego Decision, the Court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the Court’s holding does not apply to the Special Tax election in Improvement Area No. 1. Moreover, Section 53341 of the Act provides that any “action or proceeding to attack, review, set aside, void or annul the levy of a special tax…shall be commenced within 30 days after the special tax is approved by the voters.” Similarly, Section 53359 of the Act provides that any action to determine the validity of bonds issued pursuant to the Act be brought within 30 days of the voters approving the issuance of such bonds. The petitioners in Horizon filed the writ of mandate within 30 days of the landowner election. Voters in the District at the time the District was established approved the Special Tax. Based on Sections 53341 and 53359 of the Act and analysis of existing laws, regulations, rulings and court decisions, the District believes that no successful challenge to the Special Tax being levied in accordance with the Amended Rate and Method may now be brought.

IRS Audit of Tax-Exempt Bond Issues
The Internal Revenue Service has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Series 2025 Bonds will be selected for audit by the Internal Revenue Service. It is also possible that the market value of the Series 2025 Bonds might be affected as a result of such an audit of the Series 2025 Bonds (or by an audit of similar bonds). See, “TAX MATTERS” herein.

Attachment 3
66 Ballot Initiatives
Article XIII A, XIII B, XIII C and XIII D were adopted pursuant to measures qualified for the ballot pursuant to California’s constitutional initiative process and the State Legislature has in the past enacted legislation which has altered the spending limitations or established minimum funding provisions for particular activities. On March 6, 1995 in the case of Rossi v. Brown, the State Supreme Court held that an initiative can repeal a tax ordinance and prohibit the imposition of further such taxes and that the exemption from the referendum requirements does not apply to initiatives. From time to time, other initiative measures could be adopted by California voters or legislation enacted by the legislature. The adoption of any such initiative or legislation might place limitations on the ability of the State, the County, or local districts to increase revenues or to increase appropriations or on the ability of the Developers to complete the remaining proposed development within Improvement Area No. 1.

Potential Early Redemption of Bonds from Prepayments or Community Facilities District Bond Proceeds Property owners within Improvement Area No. 1 are permitted to prepay their Special Taxes at any time.

Such prepayments could also be made from the proceeds of bonds issued by or on behalf of an overlapping community facilities district. Such prepayments will result in a redemption of the Series 2025 Bonds on the Interest Payment Date for which timely notice may be given under the Fiscal Agent Agreement following the receipt of the prepayment. The resulting redemption of Series 2025 Bonds that were purchased at a price greater than par could reduce the otherwise expected yield on such Series 2025 Bonds. See the caption “THE SERIES 2025 BONDS — Redemption — Mandatory Redemption from Special Tax Prepayments.” Availability of Property and Casualty Insurance
Recently, several insurance companies have announced that they would cease accepting certain new applications in California, including all business and personal lines property and casualty insurance. Any adverse impact of the availability of homeowner’s insurance on the homeowners in Improvement Area No. 1 and the real estate market in general cannot be predicted, but it is possible that homeowner’s insurance may not be readily available to homeowners within Improvement Area No. 1 in the future, which may impact both the values of the homes within Improvement Area No. 1 and the availability of mortgages to finance the acquisition of properties within Improvement Area No. 1. The District can provide no assurances whether future changes in insurance markets may occur, and what impact, if any, these changes may have on the values of the properties within Improvement Area No. 1.

Cybersecurity
The City, like other public and private entities, relies on a large and complex technology environment to conduct its operations, and consequently faces the threat of cybersecurity incidents. Such incidents can result from unintentional events, or from deliberate attacks by unauthorized entities or individuals attempting to gain access to the City’s information technology systems to misappropriate assets or information or to cause operational disruption and damage. The City and its departments face cyber threats from time to time, including but not limited to hacking, viruses, malware, phishing, distributed denial-of-service, and other attacks on computers, networks, and systems. [ANY CYBER INCIDENTS TBD]. The City maintains cyber liability insurance through its insurance carrier.

No assurances can be given that the City’s security and operational control measures will ensure against any and all cybersecurity threats and attacks. A cybersecurity incident or breach could damage the City’s information technology systems and cause disruption to City services and operations. Although the City carries cyber liability insurance, the cost of any such disruption or remedying damage caused by future attacks could be substantial. The City will continue to assess cyber threats and protect its data and systems.

Attachment 3
67 The City is also reliant on other entities and service providers in connection with the administration of the Bonds, including without limitation, the Trustee. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the Owners of the Bonds.

CONTINUING DISCLOSURE
City Continuing Disclosure
Pursuant to the City’s Continuing Disclosure Certificate, the City, on behalf of the District, will agree to provide, or cause to be provided, to the EMMA system of the Municipal Securities Rulemaking Board, which can be found on the Internet at www.emma.msrb.org, on an annual basis certain financial information and operating data concerning Improvement Area No. 1 and notice of enumerated events. This covenant is being made by the City in order to assist the Underwriter in complying with the Rule.

In the past five years, the City has complied with all disclosure covenants, except [TBD].

Developers Continuing Disclosure
Shea. To provide updated information with respect to the development within Improvement Area No. 1, Shea will enter into a Developer Continuing Disclosure Certificate and will covenant to provide a Semiannual Report not later than June 15 and December 15 of each year, beginning June 15, 2026, until satisfaction of certain conditions set forth in the Developer Continuing Disclosure Certificate. The Semiannual Reports provided by Shea will contain updates regarding the development within Improvement Area No. 1 as outlined in its Developer Continuing Disclosure Certificate attached as APPENDIX F. In addition to its Semiannual Reports, Shea will agree to provide notices of certain events set forth in its Developer Continuing Disclosure Certificate.

Shea’s obligations under its Developer Continuing Disclosure Certificate will terminate upon the earliest to occur of (a) the legal defeasance, prior redemption, or payment in full of all the Bonds; or (b) when Shea owns property that will be developed as less than 46 single-family homes within Improvement Area No. 1.

Shea has not failed to comply in any material respect in providing periodic continuing disclosure reports or notices of listed events except [TBD].

Trumark. To provide updated information with respect to the development within Improvement Area No. 1, Trumark will enter into a Developer Continuing Disclosure Certificate, and will covenant to provide a Semiannual Report not later than June 15 and December 15 of each year, beginning June 15, 2025, until satisfaction of certain conditions set forth in its Developer Continuing Disclosure Certificate. The Semiannual Reports provided by Trumark will contain updates regarding the development within Improvement Area No. 1 as outlined in its Developer Continuing Disclosure Certificate attached as APPENDIX F. In addition to its Semiannual Reports, Trumark will agree to provide notices of certain events set forth in its Developer Continuing Disclosure Certificate.

Trumark’s obligations under its Developer Continuing Disclosure Certificate will terminate upon the earliest to occur of (a) the legal defeasance, prior redemption, or payment in full of all the Bonds; or (b) when Trumark owns property that will be developed as less than 46 single-family homes within Improvement Area No.

1. In the previous five years, Trumark has not failed to comply in any material respect in providing periodic continuing disclosure reports or notices of listed events pursuant to its previous continuing disclosure undertakings.

Attachment 3
68 LEGAL MATTERS
Tax Matters
In the opinion of Best Best & Krieger LLP, Sacramento, California, subject, however, to certain qualifications described in this Official Statement, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants, the interest on the Series 2025 Bonds is excluded from gross income for federal income tax purposes, and interest on the Series 2025 Bonds is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Series 2025 Bonds is taken into account in determining the annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations. In the further opinion of Bond Counsel, interest on the Series 2025 Bonds is exempt from California personal income tax.

The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (“Tax Code”) that must be satisfied subsequent to the issuance of the Series 2025 Bonds. The City has made certain representations and covenanted to comply with each such requirement. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Series 2025 Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Series 2025 Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention after the date of issuance of the Series 2025 Bonds may adversely affect the value of, or the tax status of interest on, the Series 2025 Bonds. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events, or matters.

If the initial offering price to the public (excluding bond houses and brokers) at which a Series 2025 Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount” for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public (excluding bond houses and brokers) at which a Series 2025 Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “original issue premium” for purposes of federal income taxes and State of California personal income taxes. De minimis original issue discount and original issue premium is disregarded.

Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the Series 2025 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Series 2025 Bonds to determine taxable gain upon disposition (including sale, prepayment, or payment on maturity) of such Series 2025 Bond.

The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Series 2025 Bonds who purchase the Series 2025 Bonds after the initial offering of a substantial amount of such maturity. Owners of such Series 2025 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Series 2025 Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Series 2025 Bonds under federal individual alternative minimum taxes.

Under the Tax Code, original issue premium is amortized on an annual basis over the term of the Series 2025 Bond (said term being the shorter of the bond’s maturity date or its call date). The amount of original issue

Attachment 3
69 premium amortized each year reduces the adjusted basis of the owner of the Series 2025 Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a Bond is amortized each year over the term to maturity of the Series 2025 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates).

Amortized Series 2025 Bond premium is not deductible for federal income tax purposes. Owners of premium Series 2025 Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Series 2025 Bonds.

Current and future legislative proposals, if enacted into law, clarification of the Tax Code, or court decisions may cause interest with respect to the Series 2025 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code, or court decisions may also affect the market price for, or marketability of, the Series 2025 Bonds. Prospective purchasers of the Series 2025 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the Series 2025 Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”) or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the City or about the effect of future changes in the Tax Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The City has covenanted, however, to comply with the requirements of the Tax Code.

A copy of the proposed form of opinion of Bond Counsel is attached hereto as APPENDIX F.

Owners of the Series 2025 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Series 2025 Bonds may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Series 2025 Bonds other than as expressly described above.

The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the Series 2025 Bonds, or as to the consequences of owning or receiving interest on the Series 2025 Bonds, as of any future date. Prospective purchasers of the Series 2025 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

Legal Opinion
The legal opinion of Bond Counsel, approving the validity of the Series 2025 Bonds in substantially the form set forth as Appendix F, will be made available to the original purchaser at the time of original delivery. A copy of the legal opinion for the Series 2025 Bonds will be provided with each definitive bond. Certain legal matters will be passed upon for the City and the District by the City Attorney’s Office, and by Best Best & Krieger LLP, as Disclosure Counsel, and for the Underwriter by [___], as counsel to the Underwriter.

Attachment 3
70 Litigation
No litigation is pending or threatened concerning the validity of the Series 2025 Bonds, the pledge of Special Tax Revenues to repay the Series 2025 Bonds, the powers or authority of the City with respect to the Series 2025 Bonds, or seeking to restrain or enjoin development of the land within Improvement Area No. 1 and a certificate of the City to that effect will be furnished to the Underwriter at the time of the original delivery of the Series 2025 Bonds.

No Rating
The City has not made and does not contemplate making application to any rating agency for the assignment of a rating of the Series 2025 Bonds.

Underwriting
The Series 2025 Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”). The Underwriter has agreed to purchase the Series 2025 Bonds at a price of $__________ (being $__________ aggregate principal amount thereof, less Underwriter’s discount of $_______ and [plus/less] [net] original issue [premium/discount] of $_________). The purchase agreement relating to the Series 2025 Bonds provides that the Underwriter will purchase all of the Series 2025 Bonds if any are purchased. The obligation to make such purchase is subject to certain terms and conditions set forth in such purchase agreement, the approval of certain legal matters by counsel and certain other conditions.

Under certain circumstances, the Underwriter may offer and sell the Series 2025 Bonds to certain dealers and others at prices lower or yields greater than the offering prices or yields stated on the inside cover page of this Official Statement. The offering prices or yields may be changed from time to time by the Underwriter.

The Underwriter and its affiliates comprise a full service financial institution engaged in activities which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and nonfinancial activities and services. The Underwriter and its affiliates may have provided, and may in the future provide, a variety of these services to the City and District and to persons and entities with relationships with the City and District, for which they received or will receive customary fees and expenses.

In the ordinary course of these business activities, the Underwriter and its affiliates may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the City or District (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the City or District.

The Underwriter and its affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire such assets, securities and instruments. Such investment and securities activities may involve securities and instruments of the City or District.

Municipal Advisor
The City has retained NHA Advisors, San Rafael, California, as Municipal Advisor for the sale of the Series 2025 Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

Attachment 3
71 NHA Advisors is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities.

Financial Interests
The fees being paid to the Municipal Advisor, the Underwriter, Underwriter’s Counsel, Bond Counsel and Disclosure Counsel are contingent upon the issuance and delivery of the Series 2025 Bonds. From time to time, Bond Counsel and Disclosure Counsel represent the Underwriter on matters unrelated to the Series 2025 Bonds.

Pending Legislation
The City is not aware of any significant pending legislation which would have material adverse consequences on the Series 2025 Bonds or the ability of the City to pay the principal of and interest on the Series 2025 Bonds when due.

Additional Information
The purpose of this Official Statement is to supply information to prospective buyers of the Series 2025 Bonds. Quotations and summaries and explanations of the Series 2025 Bonds and documents contained in this Official Statement do not purport to be complete, and reference is made to such documents for full and complete statements and their provisions.

Attachment 3
72 The execution of this Official Statement by the City Manager of the City and the delivery thereof have been duly authorized by the City Council acting in its capacity as the legislative body of the District.

CITY OF EL PASO DE ROBLES, ON BEHALF OF
ITS COMMUNITY FACILITIES DISTRICT NO. 2022-
1N (OLSEN/SOUTH CHANDLER RANCHFACILITIES)
By:

City Manager

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APPENDIX A

AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

Attachment 3
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APPENDIX B

APPRAISAL REPORT

Attachment 3

APPENDIX C

SUPPLEMENTAL INFORMATION CONCERNING

CITY OF EL PASO DE ROBLES AND COUNTY OF SAN LUIS OBISPO The Bonds will not be secured by any pledge of ad valorem taxes or City General Fund revenues but will be payable solely from Special Taxes to levied on and collected from the owners of certain taxable land within Improvement Area No. 1. The information set forth below is included in the Official Statement for background purposes only.

General Description and Background
The City was incorporated in 1889 and operates under a Council-Manager form of government. The City began as a natural hot springs destination, eventually growing into an agricultural economy, which has become a premier wine region in the country and a food and beverage destination. Today, the City has a population of approximately 31,000 residents. There are more than 300 wineries on 26,000 vineyard acres. Locals and visitors can still take hot springs treatments at Paso Robles Inn, Franklin Ponds and River Oaks Hot Springs Spa. The Downtown City Park remains the heart of the community, hosting events all year and surrounded by restaurants, wine tasting rooms, and small family-owned businesses. The City is looking to the future with the development of a Spaceport designation for its airport and a Tech Corridor to attract and serve technology-related businesses to the region. New housing is being built to help accommodate planned growth.

The City is located midway between Los Angeles and San Francisco and bordered by coastal Highway 1 and Highway 101. The City is 12,740 acres or 19.9 square miles. Topography of the surrounding area varies from broad coastal plains to fertile inland valleys backed up by mountain ranges to the east. The climate is equable in the coastal and valley regions.

The City is a general law city and operates under a Council/Manager form of government. The Council/Manager form of government is broadly defined as combining the political/policy leadership of elected officials with the managerial leadership of the City Manager. Residents elect the Mayor and four Councilmembers.

The Council acts as the board of directors of the municipal corporation and meets in a public forum where citizens may participate in the governmental process. Prompted by a legal challenge alleging that previous "at-large" City Councilmember election system violated the California Voting Rights Act of 2002, the City has transitioned from an at-large system of electing the City Council to a by-district election model. The City is divided into 4 voting districts, with each district represented by one City Council member from that district. The Mayor's position will remain at-large. Council Members represent the City on various regional commissions, boards, and committees.

The City Manager is appointed by the City Council and serves as the City Council’s administrative head of the City. The City Attorney is also appointed by the City Council. All other city employees are appointed by and are responsible to the City Manager.

The City maintains a website at www.prcity.com. The information presented there, however, is not part of this Official Statement, is not incorporated by reference herein and should not be relied upon in making an investment decision with respect to the Bonds.

As one of the original 27 counties in the State and the fifteenth largest county in the State, the County encompasses 3,300 square miles and 100 miles of coastline midway between the metropolitan areas of San Francisco and Los Angeles. The County borders the Pacific Ocean to the west, Monterey County to the north, Santa Barbara County to the south, and Kern County to the east. The Santa Lucia Range dominates the western half of the County with the Los Padres National Forest located in the south central part of the County. San Luis Obispo County has many recreational areas and tourist attractions including the nationally known Hearst Castle in San Simeon. The County government is a general law form of government governed by a five-member elected Board of Supervisors each serving overlapping four-year terms.

Attachment 3
Population
The following sets forth the City, the County and the State population estimates as of January 1, for the years 2021 to 2025.

CITY OF EL PASO DE ROBLES, SAN LUIS OBISPO COUNTY AND STATE OF CALIFORNIA Estimated Population
Year
(January 1)
City of
El Paso de Robles
San Luis Obispo
County
State of
California
2021 31,456 279,100 39,369,530
2022 30,948 280,111 39,179,680
2023 30,799 280,206 39,228,444
2024 30,988 279,568 39,420,663
2025 31,061 279,337 39,529,101
___________________
Source: State of California Department of Finance, Demographic Research Unit with 2020 Benchmark.

Commerce
A summary of historic taxable sales within the City for the years 2020 through 2024 is shown in the following table.

CITY OF EL PASO DE ROBLES
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions Retail and Food Service Stores Total All Outlets
Number of
Outlets
Taxable
Transactions
Number of
Outlets
Taxable
Transactions
2020 1,065 $673,895,270 1,921 $851,788,770
2021 931 827,047,755 1,737 1,058,134,022
2022 927 874,111,954 1,745 1,148,163,847
2023 897 851,923,817 1,713 1,115,352,873
2024 877 822,641,261 1,709 1,098,211,144
___________________
Source: California Department of Tax and Fee Administration.

Attachment 3
A summary of historic taxable sales within the County for the years 2020-2024 is shown in the following table.

COUNTY OF SAN LUIS OBISPO
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in thousands)(1)
Retail and Food Service Stores Total All Outlets
Number of
Permits
Taxable
Transactions
Number of
Permits
Taxable
Transactions
2020 7,447 $4,005,502,018 13,332 $5,480,712,553
2021 6,569 4,803,343,899 11,956 6,695,514,613
2022 6,533 5,064,031,991 12,193 7,094,082,991
2023 6,320 4,884,514,255 11,907 6,979,933,847
2024 6,154 4,816,862,358 11,740 7,008,494,684
___________________
(1) Numbers are rounded.

Source: California Department of Tax and Fee Administration.

Attachment 3
Employment and Industry
The City is included in the San Luis Obispo-Paso Robles labor market area. The following table shows the average annual estimated numbers of wage and salary workers by industry. The table does not include proprietors, the self-employed, unpaid volunteers or family workers, domestic workers in households, and persons in labor management disputes.

SAN LUIS OBISPO-PASO ROBLES METROPOLITAN STATISTICAL AREA (San Luis Obispo County)
Civilian Labor Force, Employment and Unemployment
(Annual Averages)
2020 2021 2022 2023 2024
Civilian Labor Force(1) 129,300 130,000 131,100 132,500 132,300 Employment 118,800 122,900 126,900 127,700 126,900
Unemployment 10,500 7,200 4,200 4,700 5,400
Unemployment Rate 8.1% 5.5% 3.2% 3.6% 4.1%
Wage and Salary Employment(2)
Mining, Logging and Construction 8,500 9,100 8,900 8,700 8,900 Manufacturing 7,300 7,900 8,200 8,500 8,500
Service Providing 93,800 97,300 101,000 101,400 99,400
Retail Trade 12,900 13,500 13,700 13,500 13,400
Trade, Transportation and Utilities 19,100 19,700 20,000 19,900 19,800 Information 1,100 1,200 1,300 1,200 1,100
Finance and Insurance 2,300 2,300 2,100 2,000 1,800
Real Estate and Rental and Leasing 1,500 1,600 1,800 1,900 1,900 Professional and Business Services 10,500 11,000 11,100 11,000 10,900 Private Education and Health Services 17,000 17,500 18,100 18,500 18,500 Leisure and Hospitality 15,400 17,400 19,500 19,900 20,500 Other Services 3,300 3,400 3,700 3,900 4,000
Federal Government 600 600 600 600 600
State Government 10,600 10,200 10,400 10,400 9,000
Local Government 12,400 12,400 12,400 12,200 11,300
Total, All Industries(3) 114,400 119,300 123,500 124,300 122,600 ___________________
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers and workers on strike. The unemployment rate is calculated using unrounded data. (2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding and due to the fact that not all industries are included.

Source: State of California, Employment Development Department; March 2024 Benchmark.

Attachment 3
Major Employers
The table below shows the 10 largest employers in the City as of June 30, 2024.

CITY OF EL PASO DE ROBLES

LARGEST EMPLOYERS
(As of June 30, 2024)
Rank Employer
Number of
Employees
% of Total City
Employment

1. Paso Robles Joint Unified School District 869 4.51%

2. Firestone Walker, Inc. 286 1.48

3. City of El Paso de Robles 274 1.42

4. Walmart 231 1.20

5. Allegretto Vineyard Resort 205 1.06

6. Justin Vineyards & Winery LLC 200 1.04

7. Trelleborg Sealing Solutions Tustin, Inc. 174 0.90

8. Target 170 0.88

9. Applied Technologies 162 0.84

10. Albertson’s Food Center #314 156 0.81
TOTAL 2,727 14.14%
___________________
Source: City’s Annual Comprehensive Financial Report for Fiscal Year ended June 30, 2024.

The table below shows the 10 largest employers in the County as of June 30, 2024.

COUNTY OF SAN LUIS OBISPO

LARGEST EMPLOYERS
(As of June 30, 2024)
Rank Name of Business Employees
% of Total County
Employment

1. County of San Luis Obispo 2,959 2.18%

2. Cal Poly Corporation 2,650 1.95

3. Department of State Hospitals-Atascadero 2,300 1.69

4. California Men’s Colony 2,000 1.47

5. California Polytechnic State University 1,912 1.41

6. Lucia Mar Unified School District 1,823 1.34

7. Pacific Gas and Electric Company 1,700 1.25

8. Tenet Health Central Coast 1,425 1.05

9. San Luis Coastal Unified School District 1,388 1.02

10. Paso Robles Joint Unified School District 1,262 0.93 TOTAL 19,419 14.29%
___________________
Source: County’s Annual Comprehensive Financial Report for fiscal year ended June 30, 2024.

Attachment 3
D-1

APPENDIX D

SUMMARY OF LEGAL DOCUMENTS
The following is a summary of certain provisions of the Fiscal Agent Agreement. This summary does not purport to be comprehensive and reference should be made to the agreement for a full and complete statement of the provisions thereof.

Attachment 3
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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE OF THE CITY
This Continuing Disclosure Certificate dated [DATE] (the “Disclosure Certificate”), is executed and delivered by the City of El Paso de Robles (the “City”), on behalf of City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch – Facilities) (the “District”), in connection with the issuance and delivery of $13,420,000 City of Paso Robles 2022-1N (Olsen/South Chandler Ranch – Facilities) (Improvement Area No. 1) Special Tax Bonds, 2025 Series A (the “Bonds”). The City covenants as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by City, on behalf of the District, for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Underwriter in complying with Rule 15c2-12(b)(5) of the Securities and Exchange Commission.

Section 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the District pursuant to, and as described in, Section 3 and 4 of this Disclosure Certificate.
“Annual Report Date” means the date that is nine months after the end of the District’s fiscal year (currently April 1 based on the District’s fiscal year end of June 30). “Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income purposes.
“County” means the County of San Luis Obispo, California. “Disclosure Representative” shall mean the [City Treasurer], or his or her designee, or such other officer or employee as the District shall designate in writing to the Dissemination Agent from time to time. “Dissemination Agent” shall mean, initially, [DTA Public Finance, Inc.], or any successor Dissemination Agent designated in writing by the District and which has filed with the then current Dissemination Agent a written acceptance of such designation.
“District” shall mean City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch – Facilities).
“EMMA” shall mean the Electronic Municipal Market Access system of the MSRB. “Fiscal Agent” means U.S. Bank Trust Company, National Association or such other entity appointed by the District pursuant to the Fiscal Agent Agreement to act as the fiscal agent under the Fiscal Agent Agreement.

 Preliminary; subject to change.

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“Fiscal Agent Agreement” means that certain Fiscal Agent Agreement, dated as of [December 1], 2025, by and between the City, for and on behalf of the District, and U.S. Bank Trust Company, National Association, as fiscal agent.
“Improvement Area No. 1” means Improvement Area No. 1 of the District. “Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board and any successor entity designated under the Rule as the repository for filings made pursuant to the Rule. “Official Statement” shall mean that certain Official Statement for the Bonds dated [_______], 2025. “Owners” shall mean the registered owners of the Bonds as set forth in the registration books maintained by the Fiscal Agent.
“Repository” shall mean the MSRB or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Unless otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the EMMA website of the MSRB, currently located at http://emma.msrb.org.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “State” shall mean the State of California.
“Underwriter” shall mean any underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.

Section 3. Provision of Annual Reports.
(a) The City shall, or, if the Dissemination Agent is other than the City or District, upon written direction shall cause the Dissemination Agent to, not later than the Annual Report Date of April 1, commencing with the report due by April 1, 2026, which initial Annual Report shall consist solely of the Official Statement and audited financial statements of the City, provide to the Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the District’s fiscal year changes, the District shall give notice of such change in the same manner as for a Listed Event under Section 5(d). (b) In the event that the Dissemination Agent is an entity other than the City or District, then the provisions of this Section 3(b) shall apply. Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report, the City shall provide the Annual Report to the Dissemination Agent. If by fifteen (15) Business Days prior to the due date for an Annual Report the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City will be filing the Annual Report in compliance with subsection (a). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the City and shall have no duty or obligation to review such Annual Report.

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(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to EMMA by the date required in subsection (a), the Dissemination Agent shall send, in a timely manner, a notice to EMMA, in the form required by EMMA.
(d) If the Dissemination Agent is other than the City or District, the Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the name and address of the repository if other than the MSRB through EMMA; and (ii) promptly after receipt of the Annual Report, file a report with the City certifying that the Annual Report has been provided to EMMA and the date it was provided. (e) Notwithstanding any other provision of this Disclosure Certificate, all filings shall be made in accordance with the MSRB’s EMMA system or in another manner approved under the Rule.

Section 4. Content of Annual Reports. The District’s Annual Report shall contain or include by reference the following:
(a) Financial Statements. The audited financial statements of the City for the prior fiscal year, if any have been prepared and which, if prepared, shall be prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board; provided, however, that the City may, from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the City shall modify the basis upon which its financial statements are prepared, the City shall provide the information referenced in Section 8 below regarding such modification. If the City is preparing audited financial statements and such audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) Financial and Operating Data. The first Annual Report due by April 1, 2026 shall consist of the Official Statement and audited financial statements of the City. Thereafter, the District’s Annual Report shall contain or incorporate by reference the following:
(i) the principal amount of the Bonds outstanding as of the June 30 preceding the filing of the Annual Report;
(ii) the balance in the Reserve Fund and the Reserve Requirement as of the June 30 preceding the filing of the Annual Report;
(iii) any changes to the RMA approved or submitted to the qualified electors for approval prior to the filing of the Annual Report;
(iv) an update of the estimated assessed value-to-lien ratio for Improvement Area No. 1 substantially in the form of [Table 4] in the Official Statement based upon the most recent Special Tax levy preceding the date of the Annual Report and on the assessed values of property for the current fiscal year;
(v) until such time that the property within Improvement Area No. 1 is no longer owned by any developer or merchant builder, an update of the largest taxpayers in Improvement Area No. 1 based upon the most recent Special Tax levy preceding the date of the Annual Report and on the assessed values of property for the current fiscal year;

Attachment 3
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(vi) the percentage of the Maximum Special Taxes levied by the District with respect to the Bonds;
(vii) the status of any foreclosure actions being pursued by the District with respect to delinquent Special Taxes in Improvement Area No. 1;
(viii) a statement as to whether the District participates in the Teeter Plan (as defined in the Official Statement) and in the event that the Teeter Plan is terminated with respect to the District, a table showing the total Special Taxes levied and the total Special Taxes collected for the prior fiscal year and the total Special Taxes that, as of December 31, remain unpaid for each prior fiscal year in which Special Taxes were levied and the number of delinquent parcels in Improvement Area No. 1; and (ix) if Special Taxes are levied on Undeveloped Property, the amount of Special Taxes levied on Undeveloped Property and the amount of Special Taxes levied on Developed Property in Improvement Area No. 1 (as such terms are defined in the RMA.

Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been submitted to EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB through EMMA. The City shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the City shall give, or cause the Dissemination Agent to give, notice filed with the Repository of the occurrence of any of the following events with respect to the Bonds in a timely manner not more than ten (10) business days after the event:

1. principal and interest payment delinquencies;

2. unscheduled draws on debt service reserves reflecting financial difficulties;

3. unscheduled draws on credit enhancements reflecting financial difficulties;

4. substitution of credit or liquidity providers, or their failure to perform;

5. adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability or of a Notice of Proposed Issue (IRS Form 5701-TEB);

6. tender offers;

7. defeasances;

8. ratings changes;

9. bankruptcy, insolvency, receivership or similar proceedings; and

10. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the obligated person, any of which reflect financial difficulties.

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Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(b) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material:

1. unless described in paragraph 5(a)(5) above, notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds;

2. the consummation of a merger, consolidation or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms;

3. appointment of a successor or additional paying agent or the change of the name of a paying agent;

4. nonpayment related defaults;

5. modifications to the rights of Owners of the Bonds;

6. notices of redemption;

7. release, substitution or sale of property securing repayment of the Bonds; and

8. incurrence of a financial obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect Bond holders. (c) Upon the occurrence of a Listed Event under Section 5(b) above, the City shall as soon as possible determine if such event would be material under applicable federal securities laws. (d) If the City determines that knowledge of the occurrence of a Listed Event under Section 5(b) would be material under applicable federal securities laws, the City shall file a notice of such occurrence with the Repository in a timely manner not more than 10 business days after the event. (e) For purposes of the events identified in subparagraphs (a)(10) and (b)(8), the term “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.

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(f) The City hereby agrees that the undertaking set forth in this Disclosure Certificate is the responsibility of the City and that the Dissemination Agent, if other than the City or District, shall not be responsible for determining whether the City’s instructions to the Dissemination Agent under this Section 5 comply with the requirements of the Rule.

Section 6. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds.

Section 7. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be [DTA Public Finance, Inc.] The Dissemination Agent, if other than the City or District, shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Certificate. If at any time there is not any other designated Dissemination Agent, the Trustee shall be the Dissemination Agent. The Dissemination Agent may resign by providing thirty (30) days written notice to the City and the Trustee.

Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver is related to the provisions of Sections 3(a), 4, or 5, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;
(b) The undertaking hereunder, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) The amendment or waiver either (i) is approved by the Owners of the Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or Beneficial Owners of the Bonds.

In the event of any amendment or waiver of a provision of this Disclosure Certificate, the City shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment related to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(a), and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the formed accounting principles.

Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have

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no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 10. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, the Trustee at the written direction of any Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Bonds, shall, or any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate, but only to the extent funds have been provided to the Trustee or the Trustee has been otherwise indemnified to its satisfaction from any cost, liability, expense or additional charges of the Trustee whatsoever, including, without limitation, fees and expenses of its attorney. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Certificate shall be an action to compel performance.

Section 11. Duties, Immunities and Liabilities of Dissemination Agent. Where an entity other than the City or District is acting as the Dissemination Agent, the Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent and its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of their powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

Section 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Certificate may be given as follows:

City: City of El Paso de Robles
1000 Spring Street
Paso Robles, CA 93446
Attn: City Manager
District: City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch – Facilities)
1000 Spring Street
Paso Robles, CA 93446
Attn: City Manager
Underwriter: Stifel, Nicolaus & Company, Incorporated
[TBD]
[TBD]
Attn: Sara Brown
Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notice or communications should be sent.

Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, District, the Trustee, the Dissemination Agent, the Underwriter and Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

This Disclosure Certificate is executed as of the date and year first set forth above.

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CITY OF EL PASO DE ROBLES, ON BEHALF OF ITS
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH – FACILITIES)
By:

Authorized Officer

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APPENDIX F

FORM OF CONTINUING DISCLOSURE CERTIFICATE OF THE DEVELOPERS This Continuing Disclosure Certificate (the “Disclosure Certificate”), dated [ _______], 2025, is executed and delivered by [SH AA Vinedo, LLC/TH Paso Robles LLC], a California limited liability company (the “Landowner”), in connection with the issuance by the City of Paso Robles (the “City”), on behalf of its Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch – Facilities) (the “District”), of the $13,420,000 City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch – Facilities) (Improvement Area No. 1) Special Tax Bonds, 2025 Series A (the “Bonds”). The Bonds are being issued pursuant to that certain Fiscal Agent Agreement, dated as of [December 1], 2025 (the “Fiscal Agent Agreement”), by and between the City, for and on behalf of the District, and U.S. Bank Trust Company, National Association, as fiscal agent. The Landowner covenants and agrees as follows:

SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Landowner to assist the Underwriter in the marketing of the Bonds.

SECTION 2. Definitions. Unless defined herein, capitalized terms used herein shall have the meanings ascribed thereto in the Fiscal Agent Agreement.
“Affiliate” shall mean, with respect to any Person, (a) each Person that, directly or indirectly, owns or controls, whether beneficially or as an agent, guardian or other fiduciary, twenty-five percent (25%) or more of any class of Equity Securities of such Person, (b) each Person that controls, is controlled by or is under common control with such Person or any Affiliate of such Person or (c) each of such Person’s executive officers, directors, joint venturers and general partners. For the purpose of this definition, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise. [SH AA Vinedo, LLC/TH Paso Robles LLC] is not an Affiliate of the Landowner.
“Assumption Agreement” means an undertaking of a Major Developer (or Affiliate thereof) containing terms substantially similar to this Disclosure Certificate, whereby such Major Developer agrees to provide Semiannual Reports and notices of significant events with respect to the portion of the Property owned by such Major Developer in the Improvement Area.
“Beneficial Owner” shall mean any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of the Bonds (including persons holding Bonds through nominees, depositories or other intermediaries).
“Dissemination Agent” shall mean the Landowner, or any successor Dissemination Agent designated in writing by the Landowner and which has filed with the Landowner and the District a written acceptance of such designation.
“District” shall mean City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch – Facilities).
“EMMA” shall mean the Electronic Municipal Market Access system of the MSRB.

 Preliminary; subject to change.