Paso Robles City Council
December 2, 2025

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24 With respect to the Bonds registered in the name of the Nominee, neither the City nor the Fiscal Agent shall have any responsibility or obligation to any broker-dealers, banks and other financial institutions from time to time for which the Depository holds Bonds as securities depository (the “Participant”) or to any person on behalf of which such a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, neither the City nor the Fiscal Agent shall have any responsibility, liability or obligation whatsoever with respect to (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person, other than an Owner of a Bond as shown in the registration books maintained by the Fiscal Agent pursuant to Section 2.08 hereof (the “Registration Books”), of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in the Bonds to be redeemed in the event the City redeems the Bonds in part, or (iv) the payment to any Participant or any other person, other than an Owner of a Bond as shown in the Registration Books, of any amount with respect to principal of or interest on the Bonds. The City and the Fiscal Agent may treat and consider conclusively the person in whose name each Bond is registered as the holder and absolute Owner of such Bond for the purpose of payment of principal and interest with respect to such Bond, for the purpose of giving notices of redemption, if applicable, and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The City shall pay all principal of and interest on the Bonds only to or upon the order of the respective Owner of a Bond, as shown in the Registration Books, or his or her attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to payment of principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner of a Bond, as shown in the Registration Books, shall receive a Bond evidencing the obligation of the City to make payments of principal and interest pursuant to this Agreement. Upon delivery by the Depository to the Owners of the Bond, and the City of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Agreement shall refer to such nominee of the Depository.

In the event (i) the Depository determines not to continue to act as securities depository for the Bonds, or (ii) the Depository shall no longer so act and gives notice to the City of such determination, then the City will discontinue the book-entry system with the Depository. If the City elects to replace the Depository with another qualified securities depository, the City shall prepare or direct the preparation of a new, single, separate, fully registered Bond, per maturity, registered in the name of such successor or substitute qualified securities depository or its nominee. If the City fails to identify another qualified securities depository to replace the Depository, then the Bonds shall no longer be restricted to being registered in the Registration Books in the name of the Nominee, but shall be registered in whatever name or names Owners of the Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of Sections 2.06 and 2.07 hereof, and the City shall prepare and deliver Bonds to the Fiscal Agent for authentication and delivery to the Owners thereof for such purpose.

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25 In the event of a reduction in aggregate principal amount of Bonds Outstanding or an advance refunding of part of the Bonds Outstanding, the Depository, in its discretion, (a) may request the City to prepare and issue a new Bond or (b) may make an appropriate notation on a Bond indicating the date and amounts of such reduction in principal, but in such event the Registration Books maintained by the Fiscal shall be conclusive as to what amounts are Outstanding with respect to the Bond, except in the case of final maturity, in which case the Bond must be presented to the Fiscal Agent prior to payment.

Notwithstanding any other provision of this Agreement to the contrary, so long as any Bond is registered in the name of the Nominee, all payments of principal and interest with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository and acceptable to the City.

The initial Nominee shall be Cede & Co., as Nominee of DTC.

Section 2.13. Parity Bonds. Subject to the satisfaction of the specific conditions set forth in this Section 2.13, the City may, for and on behalf of the District, at any time after the issuance and delivery of the 2025 Bonds, issue Parity Bonds payable from Special Tax Revenues and other amounts deposited in the funds and accounts created under this Agreement and under any Supplemental Agreement (other than in the Rebate Fund, the Surplus Account and the Administrative Expense Fund) and secured by a lien and charge upon such amounts equal to the lien and charge securing the 2025 Bonds and any other Parity Bonds theretofore issued under this Agreement or under any Supplemental Agreement; provided, however, that Parity Bonds may only be used for the purpose of financing the Project or refunding all or a portion of the 2025 Bonds or any Parity Bonds then Outstanding.

The issuance of any Parity Bonds shall be subject to the following additional specific conditions, which are conditions precedent to the issuance of such Parity Bonds:
(A) The aggregate initial principal amount of the 2025 Bonds and all Parity Bonds issued may not exceed $_____________; 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 this 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 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 issuance of such Parity Bonds shall have been duly authorized pursuant to the Act and all applicable laws, and the issuance of such Parity Bonds shall have been

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26 provided for by a Supplemental Agreement duly authorized, executed and delivered by the City, for and on behalf of the District, which shall specify the following:
(i) The purpose for which such Parity Bonds are to be issued and the fund or funds and accounts therein, if any, into which the proceeds thereof are to be deposited, including a provision requiring the proceeds of such Parity Bonds to be applied solely for the purpose of financing the Project or refunding any Outstanding Bonds or Parity Bonds, including funding a deposit to the reserve account for such Parity Bonds, and payment of all costs incidental to or connected with issuing such Parity Bonds;
(ii) The authorized principal amount of such Parity Bonds; (iii) The date and the maturity date or dates of such Parity Bonds; provided that (a) each maturity date shall fall on a September 1, (b) all such Parity Bonds of like maturity shall be identical in all respects, except as to number, and (c) fixed serial maturities or mandatory sinking fund payments, or any combination thereof, shall be established to provide for the retirement of all such Parity Bonds on or before their respective maturity dates; (iv) The description of the Parity Bonds, the place of payment thereof and the procedure for execution and authentication;
(v) The denominations and method of numbering of such Parity Bonds;
(vi) The amount and due date of each mandatory sinking fund payment, if any, for such Parity Bonds;
(vii) The Supplemental Agreement providing for issuance of the Parity Bonds must provide for one of the following: (1) a deposit to a separate reserve account for the Reserve Parity Bonds that (a) when combined with the Reserve Fund for the 2025 Bonds equals the Reserve Requirement as defined herein, calculated on an aggregate basis of 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 2025 Bonds and that the 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 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 are not secured by the Reserve Fund established for the 2025 Bonds and that the 2025 Bonds are not secured by the reserve account established for such Parity Bonds;
(viii) The form of such Parity Bonds; and
(ix) Such other provisions as are necessary or appropriate and not inconsistent with this Agreement.

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27 (D) There shall have been received by the Fiscal Agent 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 this Agreement and such Supplemental Agreement has been duly and lawfully executed and delivered by the City, for and on behalf of the District, this Agreement and such Supplemental Agreement 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) this Agreement and the Supplemental Agreement creates the valid pledge which it purports to create of the Special Tax Revenues and other amounts as provided in this Agreement and the Supplemental Agreement, subject to the application thereof to the purposes and on the conditions permitted by this Agreement and the 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 this Agreement and all Supplemental Agreements thereto and entitled to the benefits of this Agreement and all such Supplemental Agreements, and such Parity Bonds have been duly and validly authorized and issued in accordance with the Act (or other applicable laws) and this Agreement and all such Supplemental Agreements; 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 2025 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 2025 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 Agreement;
(v) A certificate of an Authorized Representative certifying that:
(a) The City has received a certificate from one or more Independent Financial Consultants which, when taken together, certify that (1) the amount of

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28 the maximum Special Taxes that may be levied pursuant to the Rate and Method of Apportionment in each remaining Bond Year based only on the Taxable Property (as such term is defined in the Rate and Method of Apportionment) buildout of the Improvement Area is at least

1.10 times Annual Debt Service for each corresponding Bond Year on all 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;
(b) Except in the case of the issuance of Parity Bonds to refund Outstanding Bonds or Parity Bonds, the District has received an Appraisal indicating: (i) that the aggregate of appraised value or, to the extent applicable, assessed value, or a combination of assessed value and appraised value, of all Taxable Property (as such term is defined in the Rate and Method of Apportionment) within Improvement Area No. 2 is not less than four (4) times the aggregate amount of Land Secured Debt allocable to such Taxable Property; and (ii) the sum of the value of Approved Property and Undeveloped Property related to Improvement Area No. 2 is four (4) times the Land Secured Debt on such Approved Property and Undeveloped Property on a stand-alone basis (as such terms are defined in the Rate and Method of Apportionment); and
(vi) Such further documents, money and securities as are required by the provisions of the Agreement and the Supplemental Agreement providing for the issuance of such Parity Bonds.

ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; IMPROVEMENT FUND; SPECIAL TAX FUND; ADMINISTRATIVE EXPENSE FUND;

COSTS OF ISSUANCE FUND
Section 3.01. Issuance and Delivery of Bonds. At any time after the execution of this Agreement, the City may issue Bonds for the District in the aggregate principal amount not to exceed $_________ and deliver each series of Bonds to the Original Purchaser thereof. The Authorized Officers of the City are hereby authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of the Bonds in accordance with the provisions of the Act, the Resolution and this Agreement, to authorize the payment of Costs of Issuance by the Fiscal Agent from the proceeds of the Bonds, and to do and cause to be done any and all acts and things necessary or convenient for delivery of each series of Bonds to the Original Purchaser thereof.

Section 3.02. Application of Proceeds of Sale of 2025 Bonds.

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29 The Proceeds of the sale of the 2025 Bonds to the Original Purchaser shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and deposit such Proceeds on the Closing Date as follows:
(A) Deposit in the Reserve Fund the amount of $___________, which constitutes the Reserve Requirement on the Closing Date; (B) Deposit in the Costs of Issuance Fund the amount of $____________; (C) Deposit in the Administrative Expense Fund of $____________; (D) [Deposit in the Capitalized Interest Sub-Account of the Interest Account of the Bond Fund of $____________;] and
(E) Deposit in the Improvement Fund the amount of $__________. (F) The Fiscal Agent may, in its discretion, establish a temporary fund or account in its books and records to facilitate such transfers.

Section 3.03. Improvement Fund.
(A) Establishment of Improvement Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the “Community Facilities District No. 2022-1N (Olsen/South Chandler - Facilities) (Improvement Area No. 2) of the City of El Paso de Robles Special Tax Bonds, 2025 Series A, Improvement Fund” to the credit of which a deposit shall be made as required by paragraph (D) of Section 3.02 hereof. Moneys in the Improvement Fund shall be held by the Fiscal Agent for the benefit of the City, and shall be disbursed, except as otherwise provided in subsection (D) of this Section 3.03, for the payment or reimbursement of the costs of the design, acquisition and construction of the Project. The amounts in the Improvement Fund are not pledged to the repayment of the 2025 Bonds. (B) Procedure for Disbursement. Disbursements from the Improvement Fund shall be made by the Fiscal Agent upon receipt of an Officer’s Certificate which shall:
(i) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made and the person to which the disbursement is to be paid along with payment instructions; and
(ii) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer’s Certificate previously filed with the Fiscal Agent requesting disbursement, and that the amount being requested is an appropriate disbursement from the Improvement Fund.
(C) Investment. Moneys in the Improvement Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings with respect to the

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30 Improvement Fund shall be retained by the Fiscal Agent in such fund to be used for the purposes of such fund.
(D) Closing of Fund. Upon the filing of an Officer’s Certificate stating that the construction and acquisition of the Project has been completed and that all costs of the Project have been paid or are not required to be paid from the Improvement Fund, and further stating that moneys on deposit in the Improvement Fund are not needed to complete the Project or reimburse the cost thereof, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund to the Principal Account of the Bond Fund to be used to pay the principal of the Bonds. At least thirty (30) days prior to closing the Improvement Fund. (E) Officer’s Certificate. Upon receipt of an Officer’s Certificate delivered pursuant to this Section 3.03, the Fiscal Agent is authorized to act thereon without further inquiry and shall not be responsible for the accuracy of the statements made in such Officer’s Certificate or the application of the funds disbursed pursuant thereto, and shall be absolutely protected and incur no liability in relying on such Officer’s Certificate.

Section 3.04. Special Tax Fund.
(A) Establishment of Special Tax Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the “Community Facilities District No. 2022-1N (Olsen/South Chandler - Facilities) (Improvement Area No. 2) of the City of El Paso de Robles Special Tax Fund” to the credit of which the City shall deposit, as hereinafter provided, not later than ten (10) Business Days after receipt, all Special Tax Revenues received by the City. Moneys in the Special Tax Fund shall be held in trust by the Fiscal Agent for the benefit of the City and the Owners of the Bonds, shall be disbursed as provided below and, pending disbursement, shall 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 shall 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 Section 4.02(A) hereof.
(B) Disbursements. 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 shall withdraw from the Special Tax Fund and deposit in the Administrative Expense Fund the Priority Administrative Expense Requirement. Thereafter, the Fiscal Agent shall deposit funds in the Interest Account and the Principal Account of the Bond Fund, as provided in Section

4.02(B). 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 2025 Bonds, in the Reserve Fund, to the extent

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31 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.

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 not including, however, the Interest Account or 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 (1/12th) 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 all as directed in writing by the City. The Fiscal Agent shall have no obligation to monitor the City’s obligations as set forth in this paragraph.
(C) Investment. Moneys in the Special Tax Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained in the Special Tax Fund to be used for the purposes of such fund.

Section 3.05. Administrative Expense Fund.
(A) Establishment of Administrative Expense Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the “Community Facilities District No. 2022-1N (Olsen/South Chandler - Facilities) (Improvement Area No. 2) of the City of El Paso de Robles Special Tax Bonds, 2025 Series A, Administrative Expense Fund” to the credit of which deposits shall be made as required by Section 3.04(B) hereof. Moneys in the Administrative Expense Fund shall be held in trust by the Fiscal Agent for the benefit of the City, and shall be disbursed as provided below.
(B) Disbursement. Amounts in the Administrative Expense Fund shall be withdrawn by the Fiscal Agent and paid to the City or its order upon receipt by the Fiscal Agent of an Officer’s Certificate stating the amount to be withdrawn (along with payment instructions), that such amount is to be used to pay an Administrative Expense (or a Cost of Issuance) and the nature of such Administrative Expense (or Cost of Issuance). (C) Investment. Subject to the provisions of subsection (B) above, moneys in the Administrative Expense Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained by the Fiscal Agent in the Administrative Expense Fund to be used for the purposes of such fund.

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32 Section 3.06. Costs of Issuance Fund.
(A) Establishment of Costs of Issuance Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the “Community Facilities District No. 2022-1N (Olsen/South Chandler - Facilities) (Improvement Area No. 2) of the City of El Paso de Robles Special Tax Bonds, 2025 Series A, Costs of Issuance Fund” to the credit of which a deposit shall be made as required by paragraph (B) of Section 3.02 hereof. Moneys in the Costs of Issuance Fund shall be held in trust by the Fiscal Agent and shall be disbursed as provided in subsection (B) of this Section for the payment or reimbursement of Costs of Issuance. (B) Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed to pay Costs of Issuance, as set forth in a requisition containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal Agent concurrently with the delivery of the 2025 Bonds. The Fiscal Agent shall pay all Costs of Issuance upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such requisition, or upon receipt of an Officer’s Certificate requesting payment of a Cost of Issuance not listed on the initial requisition delivered to the Fiscal Agent on the Closing Date. Each such invoice or Officer’s Certificate shall be sufficient evidence to the Fiscal Agent of the facts stated therein and the Fiscal Agent shall have no duty to confirm the accuracy of such facts. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of ninety (90) days from the Closing Date and shall then transfer and deposit any moneys remaining therein, including any Investment Earnings thereon, in the Improvement Fund.
(C) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained by the Fiscal Agent in the Costs of Issuance Fund to be used for the purposes of such fund.

ARTICLE IV
SPECIAL TAX REVENUES; BOND FUND; RESERVE FUND
Section 4.01. Pledge of Special Tax Revenues. The Bonds shall be secured by a pledge of and lien upon (which shall be affected in the manner and to the extent herein provided) all of the Special Tax Revenues (except the amount which will be deposited in the Administrative Expense Fund for each Fiscal Year pursuant to Section 3.04(B) hereof) and all moneys deposited in the Special Tax Fund and the Bond Fund. The 2025 Bonds are further secured by all moneys deposited in the Reserve Fund and may be secured by amounts deposited in a reserve account for Reserve Parity Bonds to the extent provided for in the Supplemental Agreement delivered in connection with the issuance of Reserve Parity Bonds. Reserve Parity Bonds may be secured by amounts deposited in the Reserve Fund to the extent provided for in the Supplemental Agreement delivered in connection with the issuance of Reserve Parity Bonds. The Bonds shall be equally secured by a pledge of and lien upon the Special Tax Revenues and such moneys without priority for number, date of Bond, date of execution or date of delivery; and the payment of the interest on and principal of the Bonds and any premium upon the redemption of any

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33 thereof shall be and is secured by a pledge of and lien upon the Special Tax Revenues and such moneys. The Special Tax Revenues and all moneys deposited into such accounts are hereby dedicated in their entirety to the payment of the principal of the Bonds, and interest and any premium on, the Bonds, as provided herein and in the Act, until all of the Bonds have been paid and retired or until moneys or Defeasance Securities have been set aside irrevocably for that purpose in accordance with Section 9.03 hereof.

Section 4.02. Bond Fund.
(A) Deposits. There is hereby established, as a separate fund to be held by the Fiscal Agent, the “Community Facilities District No. 2022-1N (Olsen/South Chandler - Facilities) (Improvement Area No. 2) of the City of El Paso de Robles Bond Fund” to the credit of which deposits shall be made as required by Section 3.04(B) and Section 4.03(D) hereof and any other provision of this Agreement or the Act. There are hereby established in the Bond Fund, as separate accounts to be held by the Fiscal Agent, the “Interest Account” and within the Interest Account the “Capitalized Interest Sub-Account” and the “Principal Account.” There is hereby also established in the Bond Fund, as a separate account to be held by the Fiscal Agent, the “Special Tax Prepayments Account” to the credit of which deposits shall be made as required by Section

3.04(A) hereof. 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.
(B) Disbursements. 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:
(1) 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.

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34 (2) 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 pursuant to Section 2.02 hereof, 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 any of the provisions of Section 2.03 hereof. 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 Section 2.03 hereof. 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 to such accounts, as provided in Section 4.03(B) hereof, the amount on deposit in the Interest Account and Principal Account is insufficient to pay the full amount of the interest and principal of the Bonds which is due or is to be redeemed on the Interest Payment Date, the Fiscal Agent shall make a prorated payment first of the interest due until all of such interest is paid, and second to the principal of the Bonds as specified in an Officer’s Certificate provided to the Fiscal Agent. (C) Special Tax Prepayments Account Deposits and Disbursements. Within ten (10) Business Days after receiving a Special Tax Prepayment the City shall deliver the amount thereof to the Fiscal Agent, together with an Officer’s Certificate notifying the Fiscal Agent that the amount being delivered is a Special Tax Prepayment which is to be deposited in the Special Tax Prepayments Account. Upon receiving a Special Tax Prepayment from the City and such an Officer’s Certificate, the Fiscal Agent shall deposit the amount of the Special Tax Prepayment in the Special Tax Prepayments Account. Such an Officer’s Certificate may be combined with the Officer’s Certificate which the City is required to deliver to the Fiscal Agent pursuant to Section

4.03(F) hereof. Moneys on deposit in the Special Tax Prepayments Account shall be transferred by the Fiscal Agent to the Interest Account and the Principal Account on the next date for which notice of the redemption of the Bonds can timely be given under Section 2.03(F) hereof and shall be used to redeem the Bonds on the redemption date selected in accordance with Section 2.03(B) hereof. Pending such transfer, the moneys on deposit in the Special Tax Prepayments Account shall be held uninvested in cash or invested in Defeasance Securities, in accordance with Section

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35 6.01 hereof, at such yield as, in the opinion of Bond Counsel, is necessary to preserve the exclusion of interest on the Bonds from gross income for purposes of federal income taxation.

Investment earnings on the moneys on deposit in the Special Tax Prepayments Account shall be retained in such account. The City shall provide direction in writing to the Fiscal Agent which shall include an exhibit of the Bond Counsel’s opinion.
(D) Investment. Except as provided in subsection (C) above, moneys in the Bond Fund, including all accounts therein, shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained in the Bond Fund, except to the extent they are required to be deposited by the Fiscal Agent in the Rebate Fund in accordance with Section 6.02 hereof.

Amounts in the Bond Fund, including all accounts therein, shall also be withdrawn and deposited in the Rebate Fund as provided in Section 6.02 hereof.

Section 4.03. Reserve Fund.
(A) Establishment of Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the “Community Facilities District No. 2022-1N (Olsen/South Chandler - Facilities) (Improvement Area No. 2) of the City of El Paso de Robles Special Tax Bonds, 2025 Series A, Reserve Fund” to the credit of which a deposit shall be made as required by paragraph (A) of Section 3.02 hereof, which deposit is equal to the Reserve Requirement, and to which deposits shall be made as provided in Section 3.04(B) hereof. Moneys in the Reserve Fund, and any sub-account therein, shall be held in trust by the Fiscal Agent for the benefit of the Owners of the 2025 Bonds and the Reserve Parity Bonds as a reserve for the payment of the principal of and interest and any premium on the 2025 Bonds and the Reserve Parity Bonds and shall be subject to a lien in favor of the Owners of the 2025 Bonds and the Reserve Parity Bonds .

The Reserve Fund may be maintained in the form of one or more separate sub-accounts, to the extent detailed in a Supplemental Agreement, which are established for the purpose of holding the proceeds of the 2025 Bonds and the Reserve Parity Bonds in conformity with applicable provisions of the Code; provided, the Supplemental Agreement for Reserve Parity Bonds will establish separate sub-accounts for the proceeds of the 2025 Bonds and any Reserve Parity Bonds to enable the Fiscal Agent to track the investment of the proceeds of the 2025 Bonds and any Reserve Parity Bonds on an individual basis.
(B) Use of Fund. Except as otherwise provided in this Section, all amounts on deposit in the Reserve Fund, and any account established for Reserve Parity Bonds established therein, 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 for the 2025 Bonds and the Reserve Parity Bonds 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

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36 the 2025 Bonds and the Reserve Parity Bonds or, in accordance with the provisions of subsection (E) of this Section 4.03, for the purpose of redeeming 2025 Bonds and the Reserve Parity Bonds. (C) Transfer Due to Deficiency in Interest and Principal Accounts. Whenever transfer is made from the Reserve Fund to the Interest Account or the Principal Account due to a deficiency in either such account, the Fiscal Agent shall provide written notice thereof to the City.
(D) Transfer of Excess of Reserve Requirement. Whenever, on any September 2, the amount in the Reserve Fund, and any sub-account therein, less Investment Earnings resulting from the investment of the funds therein which pursuant to Section 6.02 hereof must be rebated to the United States, as previously directed by the City, exceeds the Reserve Requirement, as calculated on such date by the City and provided in writing to the Fiscal Agent, the Fiscal Agent shall provide written notice to the City of the amount of the excess. Upon receiving written direction from an Authorized Officer (upon which the Fiscal Agent may conclusively rely), the Fiscal Agent shall, subject to the requirements of Section 6.02 hereof, transfer an amount from the Reserve Fund, and any sub-account therein, which will reduce the amount on deposit therein to an amount equal to the Reserve Requirement to the Interest Account and the Principal Account, in the priority specified in Section 4.02(B)(1) and (2) hereof, to be used for the payment of the interest on and principal of the 2025 Bonds and the Reserve Parity Bonds on the next succeeding Interest Payment Date in accordance with Section 4.02 hereof.
(E) Transfer When Balance Exceeds Outstanding 2025 Bonds. Whenever the balance in the Reserve Fund, and any sub-account therein, is equal to or exceeds the amount required to redeem or pay the Outstanding 2025 Bonds and the 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, and any sub-account therein, to the Interest Account and the Principal Account, in the priority specified in Section 4.02(B)(1) hereof, to be applied, on the next succeeding Interest Payment Date, to the payment and redemption, in accordance with Section 2.03 and Section 4.02 hereof of all of the Outstanding 2025 Bonds and the Reserve Parity Bonds. In the event that the amount available to be so transferred from the Reserve Fund, and any sub-account therein, as provided in an Officer’s Certificate, to the Interest Account and the Principal Account exceeds the amount required to pay and redeem the Outstanding 2025 Bonds and the Reserve Parity Bonds, the excess shall be transferred to the City to be used for any lawful purpose of the City. (F) Transfers on Payment of Special Tax Obligations. Whenever the City receives a Special Tax Prepayment, the City shall by an Officer’s Certificate notify the Fiscal Agent of the amount by which the Reserve Fund, and any sub-account therein, is to be reduced and which is transferrable from the Reserve Fund, and any sub-account therein, to the Principal Account of the Bond Fund, which amount shall be specified in the Officer’s Certificate. Each such Officer’s Certificate shall be accompanied by a report of an Independent Financial Consultant

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37 verifying the accuracy of the calculation of the amount to be transferred from the Reserve Fund, and any sub-account therein, to the Principal Account (“Verification”). Upon receipt of each such Officer’s Certificate and Verification, upon which the Fiscal Agent may conclusively rely, the Fiscal Agent shall at such time as the amount of such Special Tax Prepayment will be used to redeem 2025 Bonds and the Reserve Parity Bonds, as provided in Section 4.02(B)(2) hereof, transfer the amount specified in such Officer’s Certificate to the Principal Account and use such amount, together with the amount of such Special Tax Prepayment, to redeem 2025 Bonds and the Reserve Parity Bonds, as provided in Section 4.02(B)(2) hereof. Notwithstanding the preceding provisions of this subsection, no amount shall be transferred from the Reserve Fund to the Principal Account if the amount on deposit in the Reserve Fund, and any sub-account therein, is, or as a result of such transfer would be, less than the Reserve Requirement. (G) Investment. Moneys on deposit in the Reserve Fund, and any sub-account therein, shall be invested, at the written direction of the City, in Permitted Investments which do not have maturities extending beyond five (5) years; provided, however, if the Reserve Fund, and any sub-account therein, is invested in an investment agreement (as defined in clause (vii) of the definition of Permitted Investments in Section 1.03 hereof) or a repurchase agreement (as defined in clause (xi) of such definition) such agreement may have a maturity longer than five (5) years if the Fiscal Agent is authorized by the provisions of such agreement to draw the full amount thereof, without penalty, if required for the purposes of the Reserve Fund, and any sub-account therein. The City shall cause the Permitted Investments, other than such investment agreements, in which moneys on deposit in the Reserve Fund, and any sub-account therein, are invested to be valued at fair market value and at least once in each Fiscal Year. Fiscal Agent’s pricing service, as reflected on its monthly statements, satisfies fair market value.

ARTICLE V

OTHER COVENANTS OF THE CITY
Section 5.01. Punctual Payment. The City will punctually pay or cause to be paid the principal of and interest and any premium on the Bonds when and as due in strict conformity with the terms of this Agreement and any Supplemental Agreement to the extent that the Special Tax Revenues are available therefor, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Agreement and all Supplemental Agreements and of the Bonds.

Section 5.02. Special Obligation. The Bonds are special obligations of the City and the District and are payable solely from and secured solely by the Special Tax Revenues (except the amount which will be deposited in the Administrative Expense fund each Fiscal Year) and the amounts in the Bond Fund and the Special Tax Fund. The 2025 Bonds are further secured by all moneys deposited in the Reserve Fund.

Section 5.03. Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City shall not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall

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38 not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the City, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Agreement, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded.

Section 5.04. Against Encumbrances. The City shall not encumber, pledge or place any charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, except as permitted by this Agreement.

Section 5.05. Books and Accounts. The City shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the City in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Administrative Expense Fund. Such books of record and accounts shall at all times during business hours, upon reasonable notice, be subject to the inspection of the Owners of not less than ten percent (10%) of the aggregate principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.

Section 5.06. Protection of Security and Rights of Owners. The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City.

Section 5.07. Collection of Special Tax Revenues. The City shall comply with all requirements of the Act, including the enactment of necessary Ordinances, so as to ensure the timely collection of Special Tax Revenues, including without limitation, the enforcement of the payment or collection of delinquent Special Taxes.

On or within five (5) Business Days of June 1 of each year, the Fiscal Agent shall provide the City with a notice stating the amount then on deposit in the Special Tax Fund, the Bond Fund and the Reserve Fund (including all accounts and sub-accounts therein), the monthly statements provided by the Fiscal Agent shall satisfy this notice requirement. The receipt of such notice by the City or the failure of the Fiscal Agent to give such notice shall in no way affect the obligations of the City under the following two paragraphs. The Fiscal Agent shall have no liability if it does not provide such notice to the City. Upon receipt of such notice, the City shall communicate with the Auditor to ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current Fiscal Year.

The City shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Act by August 10 of each year (or such later date as may be authorized by the Act or any amendment thereof) that the Bonds are Outstanding, such that the computation of the levy is complete before the final date on which the Auditor will accept the transmission of the Special

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39 Tax amounts for the parcels within Improvement Area No. 2 for inclusion on the tax roll for the Fiscal Year then beginning. Upon the completion of the computation of the amounts of the levy of the Special Taxes, the City shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the tax roll.

Notwithstanding the preceding provisions of this paragraph, the City Council may elect, as permitted by the Act, to collect the Special Taxes to be levied for any Fiscal Year directly from the owners of the parcels of taxable property upon which the Special Taxes are levied rather than by transmitting the Special Taxes to the Auditor for collection on the tax roll; provided that, in such event, the City shall otherwise comply with the provisions of this Section 5.07.

The City shall fix and levy the amount of Special Taxes within Improvement Area No. 2 required for the payment of the principal of and interest on any Outstanding Bonds becoming due and payable during the ensuing calendar year, including any necessary replenishment of the Reserve Fund, and the amount estimated to be sufficient to pay the Administrative Expenses during such calendar year. The Special Taxes so levied shall not exceed the authorized amounts for Improvement Area No. 2 as provided in the proceedings for the establishment of the District and the designation of Improvement Area No. 2 therein.

The Special Taxes shall be payable and be collected (except in the event of judicial foreclosure proceedings pursuant to Section 5.11 hereof) in the same manner and at the same time and in the same installments as the general taxes on real property are payable, and have the same priority, become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the general taxes on real property.

The City will not, in collecting the Special Taxes or in processing any such judicial foreclosure proceedings, exercise any authority which it has pursuant to Sections 53340, 53344.1, 53356.1 and 53356.5 of the California Government Code in any manner which would materially and adversely affect the interests of the Owners and, in particular, will not permit the tender of Bonds in full or partial payment of any Special Taxes except upon receipt of a certificate of an Independent Financial Consultant certifying that to accept such tender will not result in the City having insufficient Special Tax Revenues to pay the principal of and interest on the Bonds and remaining Outstanding following such tender.

Section 5.08. Levy of Special Taxes for Administrative Expenses. The City covenants that, to the extent that it is legally permitted to do so, (a) it will levy the Special Taxes for the payment of the Administrative Expenses which are expected to be incurred in each Fiscal Year, and (b) 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. 2 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. For purposes of this Section, “Developed Property” has the meaning set forth in the Rate and Method of Apportionment.

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40 The City further covenants 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.

Section 5.09. Further Assurances. The City will adopt, make, execute and deliver any and all such further ordinances, resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Agreement.

Section 5.10. Tax Covenants. The City covenants that:
(A) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of the initial issuance and delivery of the Bonds which are issued as tax-exempt bonds, would have caused any of the Bonds which are issued as tax-exempt bonds to be “arbitrage bonds” within the meaning of Section 103(b) and Section 148 of the Code;
(B) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds which are issued as tax-exempt bonds, would result in loss of exclusion from gross income for purposes of federal income taxation under Section 103(a) of the Code of interest paid with respect to the Bonds which are issued as tax-exempt bonds;
(C) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds which are issued as tax-exempt bonds, would have caused any of the Bonds which are issued as taxexempt bonds to be “private activity bonds” within the meaning of Section 141 of the Code; (D) It will comply with the Rebate Certificate as a source of guidance for achieving compliance with the Code; and
(E) In order to maintain the exclusion from gross income for purposes of federal income taxation of interest paid with respect to the Bond which are issued as tax-exempt bonds, it will comply with each applicable requirement of Section 103 and Sections 141 through 150 of the Code.

The covenants of the City contained in this Section 5.10 shall survive the payment, redemption or defeasance of Bonds pursuant to Section 9.03 hereof.

Section 5.11. Covenant to Foreclose. Pursuant to Section 53356.1 of the California Government Code, the City covenants 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. 2 with delinquent Special Taxes in excess of $7,000 by the October 1

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41 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 ninetyfive percent (95%) of the total Special Taxes levied, if the amount on deposit in the Reserve Fund is less than the applicable Reserve Requirement it will commence judicial foreclosure proceedings against all properties in Improvement Area No. 2 with delinquent Special Taxes by October 1, and diligently pursue to completion such foreclosure proceedings.

Section 5.12. Prepayment of Special Taxes. The City shall cause all applications of owners of property in Improvement Area No. 2 to prepay and satisfy the Special Tax obligation for their property to be reviewed by the Tax Consultant and shall not accept any such prepayment unless such 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 A 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 Outstanding Bonds that will remain outstanding after the prepayment plus the estimated annual Administrative Expenses. For purposes of this Section, “Maximum Special Tax A” and “Taxable Property” have the meanings set forth in the Rate and Method of Apportionment.

Section 5.13. Calculation of Prepayments. The City will cause all Special Tax Prepayments to be calculated to include the amount of the premium on the Outstanding Bonds that will be redeemed with the Special Tax Prepayment and negative arbitrage on the investment of the Special Tax Prepayment from the date of receipt until the Interest Payment Date upon which the Special Tax Prepayment and the amount to be transferred from the Reserve Fund to the Principal Account pursuant to Section 4.03(F) hereof will be used to redeem Outstanding Bonds pursuant to Section 2.03(B) hereof. The City will not include in any calculation of the amount of any Special Tax Prepayment for any parcel of taxable property in Improvement Area No. 2 a proportionate amount of the amount then on deposit in the Reserve Fund, if at the time of such calculation the amount on deposit in the Reserve Fund or such reserve accounts is less than the applicable Reserve Requirement.

Section 5.14. Continuing Disclosure. The City hereby covenants and agrees that they will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.

Section 5.15. Accountability Measures. The City shall comply with the requirements of Section 53410 of the California Government Code with respect to the deposit and expenditure of the Proceeds of the sale of the Bonds and shall cause the appropriate officer of the City to file a report with the City Council no later than January 1, 2027, and annually thereafter, which shall contain the information required by Section 53411 of the California Government Code with respect to the expenditure of the Proceeds.

Section 5.16. State Reporting Requirements. In addition to Section 5.15, the following requirements shall apply to the Bonds:

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42 (A) Annual Reporting. Not later than October 30 of each calendar year, beginning with the October 30 first succeeding the date of the 2025 Bonds, and in each calendar year thereafter until the October 30 following the final maturity of the Bonds, the Finance Director shall cause the information required by California Government Code Section 53359.5(b) to be supplied to CDIAC. The annual reporting shall be made using such form or forms as may be prescribed by CDIAC.
(B) Other Reporting. If at any time the Fiscal Agent fails to pay principal and interest due on any scheduled payment date for the Bonds due to insufficiency of funds on deposit in the Bond Fund, or if funds are withdrawn from the Reserve Fund to pay principal and interest on the Bonds so as to reduce the amount in the Reserve Fund to less than the Reserve Requirement, or if funds are withdrawn from another debt service reserve fund to pay principal and interest on the Bonds so as to reduce the amount in such fund to less than the applicable reserve requirement, the Fiscal Agent shall notify the Finance Director of such failure or withdrawal in writing. The Finance Director shall notify CDIAC and the Underwriters of such failure or withdrawal within 10 days of such failure or withdrawal. (C) Special Tax Reporting. The Finance Director shall file a report with the District no later than the January 1 first succeeding the date of the 2025 Bonds, and at least once a year thereafter, which annual report shall contain: (i) the amount of Special Taxes collected and expended with respect to the District, (ii) the amount of Bond proceeds collected and expended with respect to the District, and (iii) the status of the Project. It is acknowledged that the annual report described in the preceding sentence is intended to satisfy the requirements of Sections 50075.1(d), 50075.3(d) and 53411 of the California Government Code. (D) Compliance with Section 53343.2. The City shall comply with the provisions of California Government Code Section 53343.2, which require the City, within seven months after the last day of each fiscal year, to display prominently on its Internet Web site all of the following information:
(i) A copy of an annual report for that fiscal year if requested pursuant to Section 53343.1; and
(ii) A copy of the report provided to the California Debt and Investment Advisory Commission pursuant to Section 53359.5.
(E) Amendment. The reporting requirements of this Section 5.16 shall be amended from time to time, without action by the District or the Fiscal Agent (i) with respect to subparagraphs (A) and (B) above, to reflect any amendments to Section 53359.5(b) or Section 53359.5(c) of the Act, (ii) with respect to subparagraph (C) above, to reflect any amendments to Section 50075.1, 50075.3, 53410 or 53411 of the California Government Code and (iii) with respect to subparagraph (D) above, to reflect any amendments to Section 53343.2.

Notwithstanding the foregoing, any such amendment shall not, in itself, affect the City’s obligations under the Continuing Disclosure Certificate. The District shall notify the Fiscal Agent

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43 in writing of any such amendments which affect the reporting obligations of the Fiscal Agent under this Agreement.
(F) No Liability. None of the District, the City and its officers, agents and employees, the Finance Director or the Fiscal Agent shall be liable for any inadvertent error in reporting the information required by this Section 5.16.

The Finance Director shall provide copies of any such reports to any Owner upon the written request of an Owner and payment by the person requesting the information of the cost of the District to photocopy and pay any postage or other delivery cost to provide the same, as determined by the Finance Director.

ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS;

LIABILITY OF THE CITY
Section 6.01. Deposit and Investment of Moneys in Funds. Subject in all respects to the provisions of Section 6.02 hereof, moneys in any fund or account created or established by this Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer’s Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments. In the absence of any such Officer’s Certificate, the Fiscal Agent shall hold funds uninvested. The Fiscal Agent shall not have any responsibility for determining the legality of any Permitted Investments. The Fiscal Agent shall have no obligation to pay additional interest or maximize investment income on any funds held by it. Neither the City nor the Owners of the Bonds shall have any claim of any kind against the Fiscal Agent in connection with investments properly made pursuant to this Section 6.01.

Obligations purchased as an investment of moneys in any fund or account shall be deemed to be part of such fund or account, subject, however, to the requirements of this Agreement for transfer of Investment Earnings in funds and accounts.

The Fiscal Agent and its affiliates may act as sponsor, advisor, depository, principal or agent in the holding, acquisition or disposition of any investment. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to this Section 6.01. For purposes of determining the amount on deposit in any fund or account held hereunder, all Permitted Investments or investments credited to such fund or account shall be valued at the cost thereof (excluding accrued interest and brokerage commissions, if any).

Subject in all respects to the provisions of Section 6.02 hereof, investments in any and all funds and accounts may be commingled in a single fund for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent hereunder, provided that the Fiscal Agent shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Agreement.

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44 The Fiscal Agent shall sell or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited, and the Fiscal Agent shall not be liable or responsible for any loss resulting from the acquisition or disposition of any such investment security in accordance herewith.

The City acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City or the District the right to receive brokerage confirmations of securities transactions as they occur, at no additional cost, the City for itself and the District specifically waives receipt of such confirmations to the extent permitted by law. The Fiscal Agent shall furnish the City periodic cash transaction statements which include detail for all investment transactions made by the Fiscal Agent hereunder.

The Fiscal Agent may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or any affiliate.

Section 6.02. Rebate Fund; Rebate to the United States. There is hereby created, to be held by the Fiscal Agent, as a separate account distinct from all other funds and accounts held by the Fiscal Agent under this Agreement, the Rebate Fund. The Fiscal Agent shall, in accordance with written directions received from an Authorized Officer, deposit into the Rebate Fund moneys transferred by the City to the Fiscal Agent pursuant to the Rebate Certificate or moneys transferred by the Fiscal Agent from the Reserve Fund. The Rebate Fund shall be held either uninvested or invested only in Federal Securities at the written direction of the City. Moneys on deposit in the Rebate Fund shall be applied only to payments made to the United States, to the extent such payments are required by the Rebate Certificate. The Fiscal Agent shall, upon written request and direction of the City, make such payments to the United States.

The Fiscal Agent may rely conclusively upon the City’s determinations, calculations and certifications required by this Section. The Fiscal Agent shall have no responsibility to independently make any calculation or determination or to review the City’s calculations hereunder. The Fiscal Agent’s sole responsibilities under this Section 6.02 are to follow the written instructions of the City pertaining hereto. The City shall be responsible for any fees and expenses incurred by the Fiscal Agent pursuant to this Section 6.02.

The Fiscal Agent shall, upon written request and direction from the City, transfer to or upon the order of the City any moneys on deposit in the Rebate Fund in excess of the amount, if any, required to be maintained or held therein in accordance with the Rebate Certificate.

Section 6.03. Liability of City. The City shall not incur any responsibility in respect of the Bonds or this Agreement other than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it. The City shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful default. The City shall not be bound to ascertain or inquire as to the performance or observance of any of the

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45 terms, conditions, covenants or agreements of the Fiscal Agent herein or of any of the documents executed by the Fiscal Agent in connection with the Bonds.

In the absence of bad faith, the City may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the City and conforming to the requirements of this Agreement. The City shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts.

No provision of this Agreement shall require the City to expend or risk its own general funds or otherwise incur any financial liability (other than with respect to the Special Tax Revenues) in the performance of any of its obligations hereunder, or in the exercise of and of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

The City may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The City may consult with counsel, who may be counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.

Whenever in the administration of its duties under this Agreement the City shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the City, be deemed to be conclusively proved and established by a certificate of the Fiscal Agent or the certificate of another person or entity as may seem reasonable to the City, and such certificate shall be full warranty to the City for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the City may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.

Section 6.04. Employment of Agents by City. In order to perform its duties and obligations hereunder, the City may employ such persons or entities as it deems necessary or advisable. The City shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities.

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46 ARTICLE VII

THE FISCAL AGENT
Section 7.01. Appointment of Fiscal Agent. U.S. Bank Trust Company, National Association is hereby appointed Fiscal Agent, registrar and paying agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent.

Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of this Section 7.01, shall be the successor to the Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

The City may, upon a 30-day notice of removal, remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank, national banking association, corporation or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000, and subject to supervision or examination by federal or state authority. If such bank, national banking association, corporation or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 7.01, combined capital and surplus of such bank, national banking association or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

The Fiscal Agent may at any time resign by giving written notice to the City and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent.

If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section 7.01 within forty-five (45) days after the Fiscal Agent shall have given to the City written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent, at the expense of the City, or any Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent.

Section 7.02. Liability of Fiscal Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of

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47 the City and the District, and the Fiscal Agent assumes no responsibility for the correctness of the same, nor makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, nor shall the Fiscal Agent incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it.

The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds.

In the absence of bad faith, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument.

The Fiscal Agent shall not be liable for any error of judgment made in good faith by the Fiscal Agent unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts.

No provision of this Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers.

The Fiscal Agent shall not be responsible for accounting for, or paying to, any party to this Agreement, including, but not limited to the City and the Owners, any returns on or benefit from funds held for payment of unredeemed Bonds or outstanding checks and no calculation of the same shall affect, or result in any offset against, fees due to the Fiscal Agent under this Agreement.

The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Owners pursuant to this Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

The Fiscal Agent may become the owner of the Bonds with the same rights it would have if it were not the Fiscal Agent.

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48 All indemnification and releases from liability granted herein to the Fiscal Agent shall extend to the directors, officers and employees of the Fiscal Agent.

The Fiscal Agent shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Agreement and delivered using Electronic Means (“Electronic Means” shall mean the following communications methods: email, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Fiscal Agent, or another method or system specified by the Fiscal Agent as available for use in connection with its services hereunder); provided, however, that the City shall provide to the Fiscal Agent an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Fiscal Agent Instructions using Electronic Means and the Fiscal Agent in its discretion elects to act upon such Instructions, the Fiscal Agent’s understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Fiscal Agent cannot determine the identity of the actual sender of such Instructions and that the Fiscal Agent shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Fiscal Agent have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Fiscal Agent and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City. The Fiscal Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Fiscal Agent’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Fiscal Agent, including without limitation the risk of the Fiscal Agent acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Fiscal Agent and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Fiscal Agent immediately upon learning of any compromise or unauthorized use of the security procedures.

The permissive right of the Fiscal Agent to do things enumerated in this Agreement shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct.

The Fiscal Agent may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, affiliates, or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder, and the Fiscal

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49 Agent shall not be answerable for any willful misconduct or negligence on the part of any attorney, agent or receiver selected by it with reasonable care.

Section 7.03. Information. The Fiscal Agent shall provide to the City such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the City shall reasonably request, including, but not limited to, quarterly statements reporting funds held and transactions by the Fiscal Agent.

Section 7.04. Notice to Fiscal Agent. The Fiscal Agent may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Fiscal Agent may consult with counsel, who may be counsel to the City, with regard to legal questions, and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by the Fiscal Agent hereunder in good faith and in accordance therewith.

Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed to be conclusively proved and established by a certificate of the City, and such certificate shall be full warranty to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.

Section 7.05. Compensation, Indemnification. The City shall pay to the Fiscal Agent from time to time reasonable compensation for all services rendered as Fiscal Agent under this Agreement, and also all reasonable expenses, charges, fees and other disbursements, including those of its attorneys, agents and employees, incurred in and about the performance of its powers and duties under this Agreement, and the Fiscal Agent shall have a first priority lien therefor on any funds at any time held by it in the Administrative Expense Fund, and the Fiscal Agent shall pay and reimburse all expenses, charges, fees and other disbursements, including those of its attorneys, agents and employees, incurred in connection therewith from the funds held by it in the Administrative Expense Fund. The City further agrees, to the extent permitted by applicable law, to indemnify and save the Fiscal Agent, its officers, employees, directors and agents, harmless against any liabilities, costs, claims, expenses or charges of any kind whatsoever (including fees and expenses of its attorneys) which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The obligation of the City under this Section 7.05 shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and discharge of this Agreement.

Section 7.06. Books and Accounts. The Fiscal Agent shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal

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50 Agent, in which complete and correct entries shall be made of all transactions made by it to the expenditure of amounts disbursed from the Bond Fund, the Special Tax Fund, the Administrative Expense Fund, the Reserve Fund and the Costs of Issuance Fund. Such books of record and accounts shall, upon reasonable notice, at all times during business hours be subject to the inspection of the City and the Owners of not less than ten percent (10%) of the aggregate principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.

ARTICLE VIII

MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01. Amendments Permitted.
(A) This Agreement and the rights and obligations of the District and the City and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of the Owners, or with the written consent, without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 8.04 hereof. No such modification or amendment shall (i) extend the maturity of any Bond or the time for paying interest thereon, or otherwise alter or impair the obligation of the City on behalf of the District to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation of any pledge of or lien upon the Special Tax Revenues, or the moneys on deposit in the Special Tax Fund, the Bond Fund or the Reserve Fund, superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or this Agreement), (iii) reduce the percentage of Bonds required for the amendment hereof, or (iv) reduce the principal amount of or redemption premium on any Bond or reduce the interest rate thereon. Any such amendment may not modify any of the rights or obligations of the Fiscal Agent without its written consent. The Fiscal Agent shall be furnished an opinion of counsel that any such Supplemental Agreement entered into by the City and the Fiscal Agent complies with the provisions of this Section 8.01 and the Fiscal Agent may conclusively rely on such opinion.
(B) This Agreement and the rights and obligations of the District and the City and the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes:
(1) to add to the covenants and agreements of the City in this Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the City; (2) to make modifications not adversely affecting any Outstanding series of Bonds of the District in any material respect;

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51 (3) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provisions of this Agreement, or in regard to questions arising under this Agreement, as the City and the Fiscal Agent may deem necessary or desirable and not inconsistent with this Agreement, and which shall not adversely affect the rights of the Owners;
(4) to make such additions, deletions or modifications as may be necessary or desirable to assure compliance with Section 148 of the Code relating to required rebate of moneys to the United States or otherwise as may be necessary to assure exclusion from gross income for federal income tax purposes of interest on the Bonds which are issued as taxexempt bonds or to conform with the Regulations; or (5) to provide for the issuance of Parity Bonds pursuant to Section 2.13 hereof;
Section 8.02. Owners’ Meetings. The City may at any time call a meeting of the Owners.

In such event, the City is authorized to fix the time and place of any such meeting and to provide for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of the meeting.

Section 8.03. Procedure for Amendment with Written Consent of Owners. The City and the Fiscal Agent may at any time enter into a Supplemental Agreement amending the provisions of the Bonds or of this Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by Section 8.01(A) hereof, to take effect when and as provided in this Section 8.03. A copy of the Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, postage prepaid, by the Fiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of the Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided.

Such a Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in Section 8.04) and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 9.04 hereof. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this Section provided for has been mailed.

After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the City shall mail a notice to the Owners in the manner

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52 hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of the documents required by this Section 8.03 to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article VIII) upon the City, the District and the Owners of all Bonds then Outstanding at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty (60)-day period.

Section 8.04. Disqualified Bonds. Bonds owned or held for the account of the City, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or participate in any action provided for in this Article VIII; except that in determining whether the Fiscal Agent shall be protected in relying upon any such vote, consent or other action of an Owner, only Bonds which the Fiscal Agent actually knows to so be owned or held by or for the account of the City shall be disregarded unless all Bonds are so owned or held, in which case such Bonds shall be considered Outstanding for the purpose of such determination. Upon request of the Fiscal Agent, the City shall specify to the Fiscal Agent those Bonds disqualified pursuant to this Section and the Fiscal Agent may conclusively rely on such certificate.

Section 8.05. Effect of Supplemental Agreement. From and after the time any Supplemental Agreement becomes effective pursuant to this Article VIII, this Agreement shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Agreement of the City and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes.

Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments. The City may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form approved by the City, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and upon presentation of his Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the City may select and designate for that purpose, a suitable notation shall be made on such Bond. The City may determine that new Bonds, so modified as in the opinion of the City is necessary to conform to such action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then

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53 Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for like Bonds then Outstanding, upon surrender of such Bonds.

Section 8.07. Amendatory Endorsement of Bonds. The provisions of this Article VIII shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds.

ARTICLE IX

MISCELLANEOUS
Section 9.01. Benefits of Agreement Limited to Parties. Nothing in this Agreement, expressed or implied, is intended to give to any person other than the City, the Fiscal Agent and the Owners, any right, remedy or claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent.

Section 9.02. Successor is Deemed Included in All References to Predecessor. Whenever in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Agreement contained by or on behalf of the City or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

Section 9.03. Discharge of Agreement.

If the City shall pay and discharge the indebtedness on all or a portion (a “Partial Discharge”) of the Outstanding Bonds in any one or more of the following ways:
(A) by well and truly paying or causing to be paid the principal of and interest and any premium on such Bonds, as and when the same become due and payable; (B) by depositing with the Fiscal Agent, in trust, at or before maturity, an amount of money which, together with the amounts then on deposit in the Bond Fund (including all accounts therein), the Special Tax Fund and the Reserve Fund, or in the event of a Partial Discharge, the appropriate portion of such amounts, as determined by the City, is fully sufficient to pay such Bonds, including all principal, interest and redemption premiums, if any; or (C) by irrevocably depositing with the Fiscal Agent, in trust, cash or noncallable Defeasance Securities in such amount as the City shall determine, as confirmed by an Independent Financial Consultant, will, together with the interest to accrue thereon and amounts then on deposit in the Bond Fund (including all accounts therein), the Special Tax Fund and the Reserve Fund, or in the event of a Partial Discharge, the appropriate portion of such amounts, as determined by the City and confirmed by an Independent Financial Consultant, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates;

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54 and if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any such Bonds shall not have been surrendered for payment, the pledge of the Special Tax Revenues and other funds provided for in this Agreement and all other obligations of the City and the District under this Agreement with respect to such Bonds shall cease and terminate, except the obligation of the City to pay or cause to be paid to the Owners of such Bonds not so surrendered and paid all sums due thereon, the obligation of the City to pay all amounts owing to the Fiscal Agent pursuant to Section 7.05 hereof, and the obligations of the City pursuant to the covenants contained in Section 5.10 hereof; and thereafter Special Taxes shall not be payable to the Fiscal Agent. Notice of such election shall be filed with the Fiscal Agent. The satisfaction and discharge of this Agreement as to all of the Outstanding Bonds shall be without prejudice to the rights of the Fiscal Agent to charge and be reimbursed by the City for the expenses which it shall thereafter incur in connection herewith.

Any funds held by the Fiscal Agent to pay and discharge the indebtedness on such Bonds, upon payment of all fees and expenses of the Fiscal Agent, which are not required for such purpose, shall be paid over to the City.

Section 9.04. Execution of Documents and Proof of Ownership by Owners. Any request, declaration or other instrument which this Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing.

Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such a request, declaration or other instrument, or of a writing appointing such an attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such a notary public or other officer.

Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the registration books maintained by the Fiscal Agent pursuant to Section 2.08 hereof.

Any request, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Fiscal Agent in good faith and in accordance therewith.

Section 9.05. Waiver of Personal Liability. No member, officer, agent or employee of the City or the District shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law.

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55 Section 9.06. Notices to and Demands on City and Fiscal Agent. Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Fiscal Agent to or on the City may be given or served by being deposited postage prepaid (first class, registered or certified) in a post office letter box addressed (until another address is filed by the City with the Fiscal Agent) as follows:

City of El Paso de Robles
1000 Spring Street
El Paso de Robles, California 93446
Attn: City Manager
Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the City to or on the Fiscal Agent may be given or served by being deposited postage prepaid (first class, registered or certified) in a post office letter box addressed (until another address is filed by the Fiscal Agent with the City) as follows:

U.S. Bank Trust Company, National Association
633 W. 5th Street, 24th Floor
Los Angeles, California 90071
Attn: Corporate Trust
Section 9.07. Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held by a court of competent jurisdiction to be illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement. The City hereby declares that it would have executed and delivered this Agreement and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable.

Section 9.08. Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any moneys held by the Fiscal Agent in trust for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when the payment of such principal, interest and premium have become payable, if such moneys were held by the Fiscal Agent at such date, shall be paid by the Fiscal Agent (without liability for interest) to the City as its absolute property free from any trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Owners of such Bonds shall look only to the City for the payment of the principal of, and interest and any premium on, their Bonds.

Section 9.09. Applicable Law. This Agreement shall be governed by and enforced in accordance with the laws of the State of California applicable to contracts made and performed in the State of California.

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56 Section 9.10. Conflict with Act. In the event of a conflict between any provision of this Agreement with any provision of the Act as in effect on the Closing Date, the provision of the Act shall prevail over the conflicting provision of this Agreement.

Section 9.11. Conclusive Evidence of Regularity. Bonds issued pursuant to this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance and the levy of the Special Taxes.

Section 9.12. Payment on Business Day. In any case where the date of the payment of interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption is other than a Business Day, the payment of interest or principal (and premium, if any) need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required, and no interest shall accrue for the period from and after such date.

Section 9.13. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.
(Signature page follows)

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S-1
IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its name on behalf of the District, and the Fiscal Agent, in acknowledgment of its acceptance of the trusts created hereunder, has caused this Agreement to be executed in its name, all as of the date and year first herein above written.

CITY OF EL PASO DE ROBLES, for and on behalf of
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER - FACILITIES)
(IMPROVEMENT AREA NO. 2) OF THE CITY OF EL

PASO DE ROBLES, COUNTY OF SAN LUIS OBISPO,

STATE OF CALIFORNIA
By: ______________________________________
Chris Huot.

City Manager
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Fiscal Agent
By: ______________________________________
Authorized Officer
-Signature PageFiscal Agent Agreement

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A-1

EXHIBIT A
FORM OF 2025 BOND

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AS

DEFINED IN THE AGREEMENT) TO THE FISCAL AGENT FOR REGISTRATION OF TRANSFER,

EXCHANGE OR PAYMENT, AND ANY BOND AUTHENTICATED AND DELIVERED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH

OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY),

ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

No. ________________ $____________________

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

COUNTY OF SAN LUIS OBISPO
COMMUNITY FACILITIES DISTRICT NO. 2022-1N (OLSEN/SOUTH CHANDLER - FACILITIES) (IMPROVEMENT AREA NO. 2)

OF THE CITY OF EL PASO DE ROBLES

SPECIAL TAX BONDS,
2025 SERIES A
INTEREST RATE MATURITY DATE DATED DATE CUSIP NO.

REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: DOLLARS
The City of El Paso de Robles(the “City”), for and on behalf of Community Facilities District No. 2022-1N (Olsen/South Chandler - Facilities) of the City of El Paso de Robles, County of San Luis Obispo, State of California (the “District”), for value received, hereby promises to pay, from the Special Taxes (as hereinafter defined) to be collected in Improvement Area No. 2 of the District (“Improvement Area No. 2”) or amounts in certain of the funds and accounts held under the Agreement (as hereinafter defined) to the registered owner named above, or registered assigns, on the maturity date specified above, unless redeemed prior thereto as hereinafter provided, the principal amount specified above, and to pay interest from the Interest Payment Date next preceding the date of authentication thereof 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 Record Date (as defined below) preceding such Interest Payment Date, in which event it shall bear

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A-2
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 Closing Date; provided, however, that if at the time of authentication of this Bond, interest is in default thereon, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon or from the Closing Date, if no interest has previously been paid or made available for payment thereon. Interest will be paid semiannually on March 1 and September 1 (each an “Interest Payment Date(s)”), commencing March 1, 2026, at the interest rate specified above, until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable by check to the registered owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the Principal Office of U.S. Bank Trust Company, National Association (the “Fiscal Agent”). Interest on this Bond shall be paid by check of the Fiscal Agent mailed by first class mail, postage prepaid, on each Interest Payment Date to the registered owner hereof as of the close of business on the fifteenth (15th) day of the month preceding the month in which the Interest Payment Date occurs (the “Record Date”) at such registered owner’s address as it appears on the registration books maintained by the Fiscal Agent; except that at the written request of the owner of at least $1,000,000 in aggregate principal amount of outstanding Bonds filed with the Fiscal Agent prior to the Record Date preceding any Interest Payment Date, interest on such Bonds shall be paid to such owner on such Interest Payment Date by wire transfer of immediately available funds to an account in the United States of America designated in such written request.

This Bond is one of a duly authorized issue of bonds approved by the qualified electors of Improvement Area No. 2 of the District pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code (the “Mello-Roos Act”), for the purpose, among others, of financing the construction and acquisition of certain public facilities within and for the District, and is one of the series of Bonds designated “Community Facilities District No. 2022-1N (Olsen/South Chandler - Facilities) (Improvement Area No. 2) of the City of El Paso de Robles Special Tax Bonds, 2025 Series A (the “Bonds”), in the aggregate principal amount of $_____________. The issuance of the Bonds and the terms and conditions thereof are provided for by a resolution adopted by the City Council of the City on November __, 2025 (the “Resolution”), and that certain Fiscal Agent Agreement, dated as of December 1, 2025 (the “Agreement”), by and between the City and the Fiscal Agent and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to the terms and conditions of the Resolution and the Agreement. The Resolution is adopted under, the Agreement is executed under, this Bond is issued under, and all are to be construed in accordance with, the laws of the State of California.

Pursuant to the Mello-Roos Act, the Agreement and the Resolution, the principal of and interest on the Bonds are payable from the annual levy of Special Taxes (as defined in the Agreement), authorized under the Mello-Roos Act to be collected within Improvement Area No. 2 and are secured by a pledge of and first lien upon the revenues derived therefrom and certain funds held by the Fiscal Agent pursuant to the Agreement.

82472.04037\44304274.3
Attachment 2
A-3
Any tax for the payment hereof shall be limited to the Special Taxes, except to the extent that provision for payment has been made by the City as may be permitted by law. The Bonds do not constitute obligations of the City for which the City is obligated to levy or pledge, or has levied or pledged, general or special taxation other than as described hereinabove.

The City has covenanted 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. 2 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 ninety-five percent (95%) of the total Special Taxes levied, if the amount on deposit in the Reserve Fund is less than the applicable Reserve Requirement it will commence judicial foreclosure proceedings against all properties in Improvement Area No. 2 with delinquent Special Taxes by the October 1 and diligently pursue to completion such foreclosure proceedings.

The 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 Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:

Redemption Dates Redemption Price
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
The 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 Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:

Redemption Dates Redemption Price
Any Interest Payment Date through and including March 1, 20__
103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100 The outstanding Bonds maturing on September 1, 20__, September 1, 20__, September 1, 20__, September 1, 20__, and September 1, 20__ are subject to mandatory sinking fund redemption, in part, without premium, on September 1, 20__, September 1, 20__, September 1,

82472.04037\44304274.3
Attachment 2
A-4
20__, September 1, 20__, and on September 1, 20__, respectively, and on each September 1 thereafter to maturity as provided in the Agreement.

Notice of redemption with respect to the Bonds to be redeemed shall be given to the registered owners thereof, in the manner and to the extent provided in the Agreement.

From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds selected for redemption shall have been deposited in the Bond Fund, such Bonds shall cease to be entitled to any benefit under the 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.

This Bond shall be registered in the name of the owner hereof, as to both principal and interest.

Each registration and transfer of registration of this Bond shall be entered by the Fiscal Agent in books kept by it for that purpose and authenticated by the manual signature of an authorized signatory of the Fiscal Agent upon the certificate of authentication endorsed hereon.

No transfer or exchange hereof shall be valid for any purpose unless made by the registered owner or his duly authorized attorney, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof and interest hereon shall be payable only to the registered owner or to such owner’s order.

The Fiscal Agent shall require the registered owner requesting transfer or exchange hereof to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange.

The Agreement and the rights and obligations of the City and the District thereunder may be modified or amended as set forth therein.

This Bond shall not become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been dated and manually signed on behalf of the Fiscal Agent.

IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond have existed, happened and been performed in due time, form and manner as required by law.

82472.04037\44304274.3
Attachment 2
A-5
IN WITNESS WHEREOF, the City of El Paso de Robles, for Community Facilities District No. 2022-1N (Olsen/South Chandler - Facilities) (Improvement Area No. 2) of the City of El Paso de Robles thereof, has caused this Bond to be dated ______________, 2025, and to be signed by the facsimile signature of the Mayor of the City and countersigned by the facsimile signature of the Executive Assistant, deputized to sign on behalf of the duly appointed and acting City Clerk.

CITY OF EL PASO DE ROBLES for and on behalf of
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER - FACILITIES)
(IMPROVEMENT AREA NO. 2) OF THE CITY OF EL

PASO DE ROBLES, COUNTY OF SAN LUIS OBISPO,

STATE OF CALIFORNIA
ATTEST:

City Clerk
___________
Mayor of the City of El Paso de Robles

82472.04037\44304274.3
Attachment 2
A-6

CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-defined Agreement.

Dated:

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, Fiscal Agent
By: _______________________________________
Authorized Signatory

82472.04037\44304274.3
Attachment 2
A-7

ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto ______________________________________________________________________________ (Name, Address and Tax Identification or
_____________________________________________________________________________, (Social Security Number of Assignee)
the within registered Bond and hereby irrevocably constitute(s) and appoint(s) _________________________________ attorney, to transfer said Bond on the books of the Fiscal Agent, with full power of substitution in the premises.

Dated: ____________________
NOTE: The signature(s) on this assignment
must correspond with the name(s) as written
on the face of the within Bond in every
particular without alteration or enlargement or
any change whatsoever.

Signature Guaranteed:

NOTE: Signature guarantee shall be made by
a guarantor institution participating in the
Securities Transfer Agents Medallion
Program or in such other guarantee program
acceptable to the Fiscal Agent.

Attachment 3
PRELIMINARY OFFICIAL STATEMENT DATED [_______]

NEW ISSUE - BOOK-ENTRY ONLY NO RATING
In the opinion of Best Best & Krieger LLP, Riverside, California (“Bond Counsel”), subject, however, to certain qualifications described in this Official Statement, under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, 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. See “LEGAL MATTERS — Tax Matters.” $9,895,000*

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N (OLSEN/SOUTH CHANDLER RANCH – FACILITIES) (IMPROVEMENT AREA NO. 2)
SPECIAL TAX BONDS, 2025 SERIES A
Dated: Date of Delivery Due: September 1, as shown on the inside front cover page The City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 2) Special Tax Bonds, 2025 Series A (the “Series 2025 Bonds”) are being issued and delivered to (i) finance various public improvements needed with respect to the development within City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South 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 District has been formed and Improvement Area No. 2 of the District (“Improvement Area No. 2”) has been designated therein by the City of El Paso de Robles (the “City”) in the County of San Luis Obispo, California (the “County”).

The Series 2025 Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Sections 53311 et seq. of the Government Code of the State of California), and pursuant to that certain Fiscal Agent Agreement, dated as of [DATE] (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 “Fiscal Agent”). The Series 2025 Bonds are special obligations of the District and are payable solely from revenues derived from certain annual Special Taxes (as defined in this Official Statement) to be levied on and collected from the owners of certain taxable land within Improvement Area No. 2, and from certain other funds pledged under the Fiscal Agent Agreement, all as further described in this Official Statement. The Special Taxes are to be levied according to the Amended Rate and Method of Apportionment for Improvement Area No. 2 approved by the City Council of the City and the qualified electors within Improvement Area No. 2. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes” and APPENDIX A — “AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” The City Council of the City is the legislative body of the District.

The Series 2025 Bonds are issuable in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Individual purchases of the Series 2025 Bonds may be made in integral multiples of $5,000 and will be in book-entry form only. Purchasers of the Series 2025 Bonds will not receive certificates representing their beneficial ownership of the Series 2025 Bonds but will receive credit balances on the books of their respective nominees. The Series 2025 Bonds will not be transferable or exchangeable except for transfer to another nominee of DTC or as otherwise described in this Official Statement. Interest on the Series 2025 Bonds will be payable semiannually on each March 1 and September 1, commencing March 1, 2026. Principal of and interest on the Series 2025 Bonds will be paid by the Fiscal Agent to DTC for subsequent disbursement to DTC Participants who are obligated to remit such payments to the beneficial owners of the Series 2025 Bonds. See “THE SERIES 2025 BONDS — General Provisions,” “— Book-Entry Only System” and APPENDIX G — “INFORMATION CONCERNING DTC.”
Neither the full faith and credit nor the taxing power of the City, the County, the State of California or any political subdivision of such entities is pledged to the payment of the Series 2025 Bonds. Except for the Special Tax Revenues (as defined herein), no other taxes are pledged to the payment of the Series 2025 Bonds.

The Series 2025 Bonds are special obligations of the District payable solely from Special Taxes and certain other amounts held under the Fiscal Agent Agreement as more fully described in this Official Statement.

The Series 2025 Bonds are subject to optional redemption, mandatory redemption prior to maturity from special tax prepayments, and mandatory sinking fund redemption as described in this Official Statement. See “THE SERIES 2025 BONDS — Redemption.” Investment in the Series 2025 Bonds involves risks that are not appropriate for certain investors. Certain events could affect the ability of the City to pay 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 risk factors that should be considered, in addition to the other matters set forth in this Official Statement, in evaluating the investment quality of the Series 2025 Bonds.

This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms of this issue. Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision. ____________________

MATURITY SCHEDULE
(See Inside Cover Page)
____________________
The Series 2025 Bonds are offered when, as and if issued and accepted by Stifel, Nicolaus & Company, Incorporated., the Underwriter, subject to approval as to their legality by Best Best & Krieger LLP, Riverside, California, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the City and the District by the City Attorney and by Best Best & Krieger LLP, Riverside, California, as Disclosure Counsel, for the Underwriter by Anzel Galvan LLP, San Francisco, California, as counsel to the Underwriter, and for the Fiscal Agent by its counsel. It is anticipated that the Series 2025 Bonds in book-entry form will be available for delivery to DTC in New York, New York, on or about _________, 2025. [STIFEL LOGO]

*
Preliminary; subject to change.

This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Attachment 3
Dated: __________, 2025.

Attachment 3
MATURITY SCHEDULE*

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 2)
SPECIAL TAX BONDS, 2025 SERIES A
Base CUSIP No.†
$__________ Serial Bonds
Maturity Date
(September 1)
Principal
Amount Interest Rate Yield Price CUSIP†©
$_________ [__]% Term Bonds due September 1, 20__ Yield: [__]% Price: [__] CUSIP No.†[__] $_________ [__]% Term Bonds due September 1, 20__ Yield: [__]% Price: [__] CUSIP No.†[__]

*
Preliminary; subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed on behalf of American Bankers Association by FactSet Research Systems Inc. This information is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services Bureau. CUSIP numbers have been assigned by an independent company not affiliated with the City, the District or the Underwriter and are included solely for the convenience of the registered owners of the applicable Bonds. None of the City, the District or the Underwriter is responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

Attachment 3

CITY OF EL PASO DE ROBLES

MAYOR AND CITY COUNCIL
John Hamon, Mayor
Kris Beal, Council Member, District 1
Chris Bausch, Council Member, District 2
Steve Gregory, Council Member, District 3
Fred Strong, Council Member, District 4

CITY STAFF
Chris Huot, City Manager
Ryan Cornell, City Treasurer/Administrative Services Director Catherine Piatti, Finance Manager
Melissa Martin, City Clerk

BOND AND DISCLOSURE COUNSEL
Best Best & Krieger LLP
Sacramento, California

CITY ATTORNEY
Best Best & Krieger LLP
Sacramento, California

MUNICIPAL ADVISOR
NHA Advisors, Inc.

San Rafael, California

SPECIAL TAX CONSULTANT
DTA Public Finance, Inc.

Irvine, California

APPRAISER
Integra Realty Resources
Rocklin, California

FISCAL AGENT
U.S. Bank Trust Company, National Association
Los Angeles, California

Attachment 3
For purposes of compliance with Rule 15c2-12 of the United States Securities and Exchange Commission, as amended (“Rule 15c2-12”), the Preliminary Official Statement constitutes an “official statement” of the City with respect to the Series 2025 Bonds that has been deemed “final” by the City as of its date except for the omission of no more than the information permitted by Rule 15c2-12.

Except where otherwise indicated, all information contained in this Official Statement has been provided by the City and the District. No dealer, broker, salesperson or other person has been authorized by the City, the District, the Fiscal Agent or the Underwriter to give any information or to make any representations in connection with the offer or sale of the Series 2025 Bonds other than those contained in this Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the City, the District, the Fiscal Agent or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Series 2025 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers or Owners of the Series 2025 Bonds.

Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described in this Official Statement, are intended solely as such and are not to be construed as representations of fact. This Official Statement, including any supplement or amendment to this Official Statement, is intended to be deposited with the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board, which can be found at www.emma.msrb.org.

The information set forth in this Official Statement which has been obtained from third party sources is believed to be reliable but is not guaranteed as to accuracy or completeness by the City or the District. The information and expressions of opinion in this Official Statement are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or the District or any other parties described in this Official Statement since the date of this Official Statement. All summaries of the Fiscal Agent Agreement or other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is made by this Official Statement to such documents on file with the City for further information. While the City maintains an Internet website for various purposes, none of the information on that website is incorporated by reference in this Official Statement or intended to assist investors in making any investment decision or to provide any continuing information with respect to the Series 2025 Bonds or any other bonds or obligations of the City. Any such information that is inconsistent with the information set forth in this Official Statement should be disregarded.

The Underwriter has provided the following sentence for inclusion in this Official Statement:

The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

Certain statements included or incorporated by reference in this Official Statement constitute “forward looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “budget” or other similar words.

Such forward-looking statements include, but are not limited to, certain statements contained in the information under the captions “IMPROVEMENT AREA NO. 2” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARDLOOKING 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 DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

IN CONNECTION WITH THE OFFERING OF THE SERIES 2025 BONDS, THE UNDERWRITER MAY

OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH SERIES 2025 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.

SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE 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. 2 ......................... 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............................... 6 Continuing Disclosure........................................................ 7 Bondowners’ Risks ............................................................ 7 Forward Looking Statements ............................................. 7 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 .................................................................. 15 Limited Obligations ......................................................... 15 Special Taxes ................................................................... 16 Teeter Plan ....................................................................... 21 Special Tax Fund ............................................................. 21 Surplus Account................ Error! Bookmark not defined.

Bond Fund........................................................................ 22 Reserve Fund ................................................................... 23 Superior Obligations; Parity Bonds.................................. 24 IMPROVEMENT AREA NO. 2....... ERROR! BOOKMARK
NOT DEFINED.

General Description of the District and Improvement
Area No. 2 .............................................................. 26 Description of Authorized Facilities ................................ 26 Direct and Overlapping Indebtedness .............................. 28 Expected Tax Burden....................................................... 28 Appraisal Report .............................................................. 29 Appraised Value-to-Lien Ratios....................................... 31 Largest Taxpayers............................................................ 34 Delinquency History ........................................................ 34 City’s Collection Practices............................................... 34

PROPERTY OWNERSHIP AND THE
DEVELOPMENT .................................................. 39 The Developer and the Project ......................................... 39 Developer and the Development Plan .... Error! Bookmark not defined.

RISK FACTORS.................................................................... 46 Risks of Real Estate Secured Investments Generally ....... 46 Mortgage Interest Rates ................................................... 46 Availability of Hazard Insurance ..................................... 47 Limited Obligations ......................................................... 47 Insufficiency of Special Taxes ......................................... 47 Failure to Develop Properties........................................... 49 Special Tax Delinquencies............................................... 50 Natural Disasters ..............................................................50 Hazardous Substances......................................................52 Parity Taxes and Special Assessments .............................52 Disclosures to Future Purchasers......................................53 Non-Cash Payments of Special Taxes..............................53 Payment of the Special Tax Is Not a Personal
Obligation of the Owners........................................53 Concentration of Ownership.............................................54 Property Values................................................................54 FDIC/Federal Government Interests in Properties............55 Teeter Plan Termination ...................................................56 Bankruptcy and Foreclosure.............................................57 Depletion of Reserve Fund ...............................................58 No Acceleration Provision................................................58 Loss of Tax Exemption.....................................................58 Limitations on Remedies..................................................59 Limited Secondary Market ...............................................59 Proposition 218.................................................................59 Litigation with Respect to Community Facilities
Districts ..................................................................60 IRS Audit of Tax-Exempt Bond Issues ............................61 Ballot Initiatives...............................................................62 Potential Early Redemption of Bonds from
Prepayments or Community Facilities District
Bond Proceeds........................................................62 Availability of Property and Casualty Insurance ..............62 Cybersecurity....................................................................62 CONTINUING DISCLOSURE..............................................63 City Continuing Disclosure ..............................................63 Developer Continuing Disclosure.....................................63 LEGAL MATTERS ...............................................................63 Tax Matters.......................................................................63 Legal Opinion...................................................................65 Litigation ..........................................................................65 No Rating .........................................................................65 Underwriting ....................................................................66 Municipal Advisor............................................................66 Financial Interests.............................................................66 Pending Legislation ..........................................................67 Additional Information.....................................................67 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
AND COUNTY ...........................................................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
DEVELOPER................................................................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 $9,895,000*

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 2)
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 $9,895,000* Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 2) 2025 Special Tax Bonds, 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. 2, ARE AVAILABLE TO PAY DEBT SERVICE ON ANY IMPROVEMENT AREA NO. 2 BONDS.

NONE OF THE SPECIAL TAXES THAT COULD BE COLLECTED WITHIN IMPROVEMENT AREA NO. 2 ARE AVAILABLE TO PAY DEBT SERVICE ON ANY OTHER IMPROVEMENT AREA BONDS.

The District and Improvement Area No. 2
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.

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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. 2 of the District (“Improvement Area No. 2”) includes approximately 52.60 gross acres and consists of Planning Areas 4 and 5 of the Vinedo Project. Improvement Area No. 2 is located north of Sherwood Road, along Linne Road in the City. Improvement Area No. 2 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. 2 is included in the Vinedo Specific Plan. The final map for Planning Area 4, Final Tract Map No. 3153-4, was approved by the City on April 8, 2025, and was recorded in the official records of the County. The final tract map for Planning Area 5 is expected to be approved by [May 2026. Improvement Area No. 2 is planned for a total of 173 single-family homes known as “Mirabella in Paso Robles” which will feature two product lines: the Avellino Collection and the Catania Collection.

Planning Area 4 is being actively constructed, with the first home closings expected in December 2025.

Planning Area 5 has no homes currently under construction and consists of all unimproved lots. Home construction is expected to begin in Planning Area 5 in June 2026.

The Appraisal Report made assumptions as to the number of expected lots and units for Improvement Area No. 2 and such numbers are subject to change as development progresses and final maps are recorded.

See “IMPROVEMENT AREA NO. 2 — General Description of the District and Improvement Area No. 2,” “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. 2, 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. 2, not to exceed $19,000,000, 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. 2 — 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 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

Attachment 3
3 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. 2 at which the landowners within Improvement Area No. 2 eligible to vote approved the issuance of bonds for the District with respect to Improvement Area No. 2 in an amount not to exceed $19,000,000. A Notice of Special Tax Lien for Improvement Area No. 2 was recorded in the office of the County Recorder on August 8, 2022 as Document No. 202203211.

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. 2 of special taxes pursuant to the Rate and Method of Apportionment of Special Tax for Improvement Area No. 2 approved at the August 2, 2022 election (the “Original Rate and Method”).

On December 3, 2024, the City Council approved Resolution No. 24-139, a resolution of consideration pursuant to which the City Council determined that the public convenience and necessity required certain changes to the Original Rate and Method. Specifically, the City Council determined to modify the Special Tax rates to be levied on parcels of taxable property in Improvement Area No. 2.

Following the conduct of public hearings pursuant to the Act on January 15, 2025, the City Council adopted Resolution No. 25-006 calling a special election for submitting to the voters of the District the question of whether to make certain changes to the Original Rate and Method. At a special election held on January 15, 2025, the owners of the property within Improvement Area No. 2 approved the authorization to levy special taxes within Improvement Area No. 2 pursuant to an Amended and Restated Rate and Method of Apportionment of Special Tax for Improvement Area No. 2 (the “Amended Rate and Method”), a copy of which is attached hereto as Appendix A. An Amendment to the Notice of Special Tax Lien was recorded on January 28, 2025, as Document No. 2025002292 in the official records of the County. On February 4, 2025, the City Council, acting as the legislative body of the District, adopted Ordinance No. 1156 (the “Ordinance”) which authorizes the levy within Improvement Area No. 2 of special taxes pursuant to the Amended Rate and Method approved at the January 15, 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
K. Hovnanian Communities, Inc., a Delaware company (“Developer”), originally entered into a purchase agreement for Planning Areas 4 and 5 in Improvement Area No. 2 with Olsen Ranch 212, LLC (the “Master Developer”), and simultaneously assigned the purchase agreement for Planning Areas 4 and 5 to Brookfield Holdings (Mirabella) LLC, a Delaware limited liability company (the “Land Bank”), who is serving as the Developer’s land bank.

Improvement Area No. 2 has been mass graded and the backbone infrastructure necessary to serve Improvement Area No. 2 is complete except for the Vinedo booster station (see “PROPERTY OWNERSHIP AND THE DEVELOPMENT—The Developer and the Project—Status of Construction – Backbone Infrastructure”). In-tract improvements for Planning Area 4 of Improvement Area No. 2 are complete (except for energization). Construction of the in-tract improvements for Planning Area 5 of Improvement Area No. 2 are expected to start in December 2025 and be completed by the first quarter of 2027. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT — The Development.”
As of November 1, 2025, 28 building permits had been issued within Improvement Area No. 2.

Additionally, as of November 1, 2025, no homes within Improvement Area No. 2 had closed to individual

Attachment 3
4 homeowners, and the Developer and Land Bank collectively owned 4 completed model homes, 24 production homes in various stages of construction, and 145 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. 2 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.

2. 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. 2, as of September 8, 2025 (the “Date of Value”), was $39,599,000. This estimate of value results in an appraised value-to-lien ratio within Improvement Area No. 2 of approximately [4.80]-to-1 *
for Improvement Area
No. 2 based on the estimated amount of all public agency land-secured debt, and approximately [___]-to-1 *
for
Improvement Area No. 2 based on the estimated amount of land-secured debt solely of the District. See “IMPROVEMENT AREA NO. 2 — 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. 2 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. 2 are not pledged to and are not available to pay debt service on the Bonds.

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 Rserve 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).

* Preliminary, subject to change.

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5 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. 2. The ability of the City Council to increase the annual Special Taxes levied in Improvement Area No. 2 to replenish the Reserve Fund is subject to the maximum annual amount of Special Taxes authorized for Improvement Area No. 2 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. 2 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. 2 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. 2 can be sold for the appraised values described in this Official Statement, or for a price sufficient to pay the principal of and interest on the Bonds in the event of a default in payment of Special Taxes by the current or future property owners within Improvement Area No. 2. 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. 2 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”),

Attachment 3
6 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 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

Attachment 3
7 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 the Developer (the “Developer Continuing Disclosure Certificate”), the Developer has agreed to provide or cause to be provided to EMMA certain information with respect to itself and the development within Improvement Area No. 2 and notice of certain listed events to assist the Underwriter in marketing the Series 2025 Bonds. The Underwriter does not consider the Developer to be an obligated party under the Rule.

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

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. 2” 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

Attachment 3
8 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. 2 — 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. 2 to finance additional public improvements.

 Preliminary; subject to change.

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.

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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. 2, and to authorize the levy of special taxes therein, and a resolution of intention to incur bonded indebtedness for Improvement Area No. 2 in an amount not to exceed $19,000,000.

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. 2, authorized the levy of special taxes within Improvement Area No. 2, and determined the necessity for the District to incur bonded indebtedness in a maximum aggregate principal amount of $19,000,000 for Improvement Area No. 2.

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. 2 on the issues of the levy of the special taxes, the incurring of bonded indebtedness for Improvement Area No. 2, 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. 2 approved ballot propositions authorizing the issuance of up to $19,000,000 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. 2 approved ballot propositions authorizing the issuance bonds for the District in an aggregate principal amount not to exceed $19,000,000 for Improvement Area No. 2 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. 2, to incur the bonded indebtedness for Improvement Area No. 2, and to have the established appropriations limit.

Special Tax Lien and Levy. The Notice of Special Tax Lien for Improvement Area No. 2 was recorded in the Office of the County Recorder of the County on August 8, 2022 as Document No. 2022032111 reflecting a continuing lien against the taxable property within Improvement Area No. 2 (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. 2.

Resolutions of Change and Election. On December 3, 2024, the City Council approved a resolution of consideration pursuant to which the Board determined that the public convenience and necessity required certain changes to the Original Rate and Method. Following the conduct of public hearings pursuant to the Act on January 15, 2025, the City Council adopted a resolution calling a special election for submitting to the voters of the District the question of whether to make certain changes to the Original Rate and Method. At a special election held on January 15, 2025, the owners of the property within Improvement Area No. 2 approved the authorization to levy

Attachment 3
11 special taxes within Improvement Area No. 2 pursuant to the Amended Rate and Method. An Amendment to the Notice of Special Tax Lien was recorded on January 28, 2025, as Document No. 2025002292 in the official records of the County. On February 4, 2025, the City Council, acting as the legislative body of the District, adopted the Ordinance which authorizes the levy within Improvement Area No. 2 of special taxes pursuant to the Amended Rate and Method approved at the January 15, 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.

To date, no prepayment of Special Taxes have been made by the owners of the Taxable Property in Improvement Area No. 2, and the Developer has 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

 Preliminary; subject to change.

Attachment 3
12 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.

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.

Attachment 3
13 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.

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

Attachment 3
14 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 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.”

Attachment 3
15 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.

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

 Preliminary; subject to change.

Attachment 3
16 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 August 2, 2022, the owners of the property within Improvement Area No. 2 authorized the District to incur indebtedness in an amount not to exceed $19,000,000 for Improvement Area No. 2 and on January 15, 2025 approved the Amended Rate and Method which authorizes the Special Tax to be levied to repay District indebtedness for Improvement Area No. 2, including the Bonds. On February 4, 2025, the City Council adopted Ordinance No. 1156 which authorized the levy of Special Taxes in Improvement Area No. 2 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. 2 by more than 10%. Additionally, special taxes levied on property located in improvement areas of the District, other than Improvement Area No. 2, cannot be used to pay debt service on the Series 2025 Bonds.

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. 2 shall be assigned to a Zone and classified as Developed

Attachment 3
17 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 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. 2 classified as Developed Property 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 pursuant to the table below.

Assigned Special Tax Rates for
Developed Property
Land Use
Category Description Residential Floor Space Assigned Special Tax Rate 1 Residential Property > = 2,300 sq. ft. $6,588 per Dwelling Unit 2 Residential Property 2,200 – 2,299 sq. ft. $6,391 per Dwelling Unit 3 Residential Property 2,100 – 2,199 sq. ft. $6,076 per Dwelling Unit 4 Residential Property 2,000 – 2,099 sq. ft. $5,760 per Dwelling Unit 5 Residential Property 1,900 – 1,999 sq. ft. $5,563 per Dwelling Unit 6 Residential Property < 1,900 sq. ft. $5,248 per Dwelling Unit 7 Non-Residential Property N/A $34,020 per Acre
Backup Special Tax. The Backup Special Tax for an Assessor’s Parcel of Residential Property in a Final Map shall be computed by multiplying the Acreage of all Taxable Property, 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 $34,020 and dividing the product by the number of such Assessor’s Parcels in such Final Map.

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 NonResidential Property, 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.

Attachment 3
18 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.

Final Mapped Property. The Maximum Special Tax for each Assessor’s Parcel of Final Mapped Property expected to be classified as Residential Property shall be the Backup Special Tax computed as described above.

Undeveloped Property, Taxable Property Owner Association Property, Taxable Public Property. The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property, Taxable Property Owner Association Property, and Taxable Public Property shall be $34,020 per Acre.

Method of Apportionment and Levy of the Special Tax. For each Fiscal Year, the District shall determine the Improvement Area No. 2 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:

First: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property in Improvement Area No. 2 up to 100% of the applicable Assigned Special Tax to satisfy the Special Tax Requirement for Improvement Area No. 2.

Second: If additional monies are needed to satisfy the Special Tax Requirement for Improvement Area No. 2 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. 2 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. 2 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. 2 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. 2 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. 2 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. 2 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. 2 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. 2 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.

Attachment 3
19 Exemptions. The District shall not levy Special Taxes on (i) Property Owner Association Property or Public Property in Improvement Area No. 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 to less than 30.1 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.

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. 2 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. 2 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

Attachment 3
20 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 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. 2 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. 2, they do not constitute a personal indebtedness of the owners of property within Improvement Area No. 2. Moreover, other liens for taxes and/or assessments already exist on the property located within Improvement Area No. 2 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. 2. 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. 2 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. 2 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. 2 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.”

Attachment 3
21 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 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. 2) 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.

Attachment 3
22 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 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. 2) 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

Attachment 3
23 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.

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

 Preliminary; subject to change.

Attachment 3
24 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. 2, 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 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. 2 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. 2 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 $19,000,000; provided, however, that, notwithstanding the foregoing Parity Bonds may be issued at any time to refund

Attachment 3
25 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 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;

Attachment 3
26 (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:
(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. 2 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. 2 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. 2 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. 2
General Description of the District and Improvement Area No. 2 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.

Improvement Area No. 2 of the District includes approximately 52.60 gross acres and consists of Planning Areas 4 and 5 of the Vinedo Project. Improvement Area No. 2 is located north of Sherwood Road, along Linne Road in the City. Improvement Area No. 2 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

Attachment 3
27 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, 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 Developer. 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 Developer and the Master Developer will be responsible for any costs of the Facilities which are not financed from proceeds of bonds issued by the City for the District; however, the Developer and Master Developer 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 Developer and the Project—The Developer and its Development 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 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.

Attachment 3
28 Direct and Overlapping Indebtedness
The ability of an owner of land within Improvement Area No. 2 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. 2 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. 2. 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. 2)

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. compiled by DTA Public Finance, Inc.

Expected Tax Burden
[The Series 2025 Bonds have been sized to produce debt service coverage 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 either because of nonpayment or because property becomes exempt from taxation as permitted in the Amended

Attachment 3
29 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. 2 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. 2, 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. 2, 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. 2 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. 2 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 Developer are accurate.

The Appraiser concluded that, as of the Date of Value, the minimum market value of the property within Improvement Area No. 2 subject to the Special Tax lien was $39,599,000. 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. 2 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. 2, as of the Date of Value.

Attachment 3
30 TABLE 2

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 2)

SUMMARY OF APPRAISED VALUES
AS OF SEPTEMBER 8, 2025
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)
Planning Area 4
Unimproved Lots 70 $360,000 $(38,400) $(65,000) $(3,250) $253,350 $17,735,000 Homes Under Construction 16 360,000 - - 360,000 5,760,000 Total – Planning Area 4 86 $23,495,000
Planning Area 5
Unimproved Lots 87 $360,000 $(38,400) $(130,000) $(6,500) $185,100 $16,104,000 Total – Planning Area 5 87 $16,104,000
Aggregate Appraised Values 173 $39,599,000
___________
Source: The Appraisal Report.

Attachment 3
31 Appraised Value-to-Lien Ratios
The appraised value of the property within Improvement Area No. 2 as of the Date of Value is $39,599,000. Dividing the appraised value by the principal amount of the Series 2025 Bonds results in a value to lien ratio of [4.0]-to-1

for Improvement Area No. 2. Dividing the appraised value by the principal amount of the Series 2025 Bonds plus all public agency land-secured debt results in an estimated appraised value-to-lien ratio of [__]-to-1
* for Improvement Area No. 2. Additional land-secured special tax or assessment debt, however, could be applicable to the parcels within Improvement Area No. 2 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. 2, based on the projected Fiscal Year 2026-27 Special Tax levy, categorized by property status as of September 8, 2025.
(remainder of page intentionally blank)

 Preliminary; subject to change.

Attachment 3
32 TABLE 3

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 2)

ESTIMATED VALUE-TO-LIEN RATIOS

BY DEVELOPMENT STATUS
AS OF SEPTEMBER 8, 2025(1)
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
Pro Rata
Share of
The
Bonds(3)*
Overlapping
Debt
Aggregate
Debt
Appraised
Value(4)
Appraised
Value-toLien
Ratio(5) *
Final Mapped Property
Partially Completed Homes 16 $89,485 8.7% $865,331 $0 $865,331 $5,760,000 6.7 to 1 Unimproved Lots 157 933,770 91.3 9,029,669 0 9,029,669 33,839,000 3.7 to 1 Subtotal – Final Mapped Property 173 $1,023,255 100.0% $9,895,000 $0 $9,895,000 $39,599,000 4.0 to 1 Total 173 $1,023,255 100.0% $9,895,000 $0 $9,895,000 $39,599,000 4.0 to 1 * Preliminary, subject to change.
(1) Development Status categories consistent with the Appraisal 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. (3) The Series 2025 Bonds are allocated based on a proportionate share of the hypothetical Fiscal Year 2026-27 Special Tax Levy. (4) Based on AppraisalReport.
(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
33 Table 4 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. 2 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

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 2)

PROJECTED TOTAL EFFECTIVE TAX RATES
Residential Property Description(1) Avellino Catania
Asheville Santa Rosa Pasadena ESP Amadora Barcelona Belfast ESP Anticipated Living Area (sq. ft.) 1,774 1,985 2,083 2,123 2,277 2,406 Estimated Lowest Home Price $759,990 $801,990 $840,990 $934,990 $954,990 $1,043,990 Less: Homeowner Exemption (7,000) (7,000) (7,000) (7,000) (7,000) (7,000) Total: Assumed Taxable Value(2) $752,990 $794,990 $833,990 $927,990 $947,990 $1,036,990 Ad Valorem Property Taxes(2)(3) Tax Rate Projected Amount Projected Amount Base Property Tax Rate 1.0000% $7,530 $7,950 $8,340 $9,280 $9,480 $10,370 State Water Project 0.0032 24 26 27 30 30 33
Paso City - Bond 0.0310 233 246 259 288 294 321
Cuesta CCD 2014 Bond 0.0150 113 119 125 139 142 156
Paso Unif 2006 GO Bond 0.0104 78 82 86 96 98 107
Paso SFID 2016 Bond 0.0478 360 380 398 443 453 495
Total Ad Valorem Taxes 1.1073% $8,338 $8,803 $9,235 $10,276 $10,497 $11,483 Special/District Assessments and Taxes(4) Projected Amount Projected Amount CFD No. 2022-2N (Public Services) $654 $654 $654 $654 $654 $654 CFD No. 2022-1N (IA No. 2) 5,248 5,563 5,760 6,076 6,391 6,588 Total Special/District Assessments and Taxes $5,902 $6,217 $6,414 $6,730 $7,045 $7,242 Total Estimated Annual Property Taxes $14,239 $15,020 $15,648 $17,005 $17,542 $18,724 Effective Tax Rate 1.8736% 1.8728% 1.8607% 1.8188% 1.8368% 1.7935% (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.

Attachment 3
34 Largest Taxpayers
Based on the ownership status as of September 8, 2025, assuming no additional transfer of property in Improvement Area No. 2 for Fiscal Year 2025-26, the Developer will be responsible for paying 100.0% of the Fiscal Year 2026-27 Special Tax levy. See “RISK FACTORS — Concentration of Ownership” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT – K. Hovnanian Land Bank Arrangement.” 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. 2)
PROJECTED FISCAL YEAR 2026-27 SPECIAL TAXES BY OWNERSHIP Property Classification / Property Owner
Number of
Taxable
Parcels
Projected FY
2026-27
Special Tax
Levy(1)*
Projected
Percentage of
Special Tax
Levy(1)
Developed Property
Final Mapped Property
Partially Completed Homes 16 $89,485 8.7%
Unimproved Lots 157 933,770 91.3
Total 173 $1,023,255 100.0%
___________
* Preliminary; subject to change.
(1) Projected Fiscal Year 2026-27 Special Tax levy assuming full buildout of all currently anticipated units.

Source: DTA Public Finance, Inc.

Delinquency History
Fiscal Year 2025-26 was the first fiscal year in which Special Taxes are levied within Improvement Area No. 2. 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 applicable special taxes. The City will covenant in the Fiscal Agent Agreement to commence foreclosure

Attachment 3
35 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
36 Special Tax Rates
Tables 6 and 7 below set forth the Assigned Special Taxes by Land Use Class within Improvement Area No. 2 for Fiscal Year 2026-27 based on development status as of September 8, 2025, and what would be levied within Improvement Area No. 2 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. 2)
PROJECTED 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 >= 2,300 SF 0 -
$6,588 $0 0.0%
2 Residential Property 2,200 – 2,299 SF 3 -
6,391 19,173 1.1
3 Residential Property 2,100 – 2,199 SF 5 -
6,076 30,380 1.7
4 Residential Property 2,000 – 2,099 SF 0 -
5,760 0 0.0
5 Residential Property 1,900 – 1,993 SF 8 -
5,563 44,504 2.4
6 Residential Property < 1,900 SF 12 -
5,248 62,976 3.5
Subtotal 28 - $157,033 8.6%
Final Mapped Property 48.90 $34,020 $1,663,578 91.4%
Undeveloped Property 0.00 $34,020 0 0.0
Total(3) $1,820,611 100.00%
(1) Based on building permit 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
37 TABLE 7

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 2)
FISCAL YEAR 2025-26 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
1 Residential Property >= 2,300 SF 26 $6,588 $171,288 16.74% 2 Residential Property 2,000 – 2,299 SF 27 6,391 172,557 16.86 3 Residential Property 2,100 – 2,199 SF 30 6,076 182,280 17.81 4 Residential Property 2,000 - 2,099 SF 30 5,760 172,800 16.89 5 Residential Property 1,900 – 1,999 SF 30 5,563 166,890 16.31 6 Residential Property < 1,900 SF 30 5,248 157,440 15.39 Total(2) 173 $1,023,255 100.00%
(4) Source: Developer.
(5) 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. 2 assuming full buildout.
(remainder of page intentionally blank)

Attachment 3
38 TABLE 8

CITY OF PASO ROBLES
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER RANCH - FACILITIES)
(IMPROVEMENT AREA NO. 2)

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 $1,023,255 $25,000 $998,255 $[__] %
2027 1,023,255 25,000 998,255
2028 1,023,255 25,000 998,255
2029 1,023,255 25,000 998,255
2030 1,023,255 25,000 998,255
2031 1,023,255 25,000 998,255
2032 1,023,255 25,000 998,255
2033 1,023,255 25,000 998,255
2034 1,023,255 25,000 998,255
2035 1,023,255 25,000 998,255
2036 1,023,255 25,000 998,255
2037 1,023,255 25,000 998,255
2038 1,023,255 25,000 998,255
2039 1,023,255 25,000 998,255
2040 1,023,255 25,000 998,255
2041 1,023,255 25,000 998,255
2042 1,023,255 25,000 998,255
2043 1,023,255 25,000 998,255
2044 1,023,255 25,000 998,255
2045 1,023,255 25,000 998,255
2046 1,023,255 25,000 998,255
2047 1,023,255 25,000 998,255
2048 1,023,255 25,000 998,255
2049 1,023,255 25,000 998,255
2050 1,023,255 25,000 998,255
2051 1,023,255 25,000 998,255
2052 1,023,255 25,000 998,255
2053 1,023,255 25,000 998,255
2054 1,023,255 25,000 998,255
2055 1,023,255 25,000 998,255
2056 1,023,255 25,000 998,255
2057 1,023,255 25,000 998,255
2058 1,023,255 25,000 998,255
2059 1,023,255 25,000 998,255
2060 1,023,255 25,000 998,255
Total $35,813,925 $875,000 $34,938,925 $ %
_____________
* Preliminary, subject to change.
(1) Based on the Assigned Special Tax for the District assuming full development. (2) Assigned Special Taxes less Priority Administrative Expenses.

Source: DTA Public Finance, Inc.

Attachment 3
39 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. 2 will occur in a timely manner or in the configuration or to the density described in this Official Statement, or that the Developer and the Land Bank, 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. 2. Neither the Series 2025 Bonds nor the Special Tax represent personal obligations of any property owner within Improvement Area No. 2. 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. 2 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 Developer and the Project
Ownership. The taxable property in Improvement Area No. 2 consists of two planning areas (each a “Planning Area”) within the Vinedo Specific Plan area that includes Planning Area 4 and Planning Area 5. The Developer entered into a purchase contract to acquire both planning areas from Olsen Ranch 212, LLC (the “Master Developer”); simultaneously, on August 2, 2024, the Developer assigned its rights to the purchase agreement for Planning Area 4 and Planning Area 5 to the Land Bank, and on the same date the Land Bank closed on the property in Planning Area 4 and Planning Area 5. As of November 3, 2025, the Developer had acquired 46 lots from the Land Bank.

As of November 1, 2025, 24 production homes within Planning Area 4 were under construction. As of the Date of Value and as of November 1, 2025, no homes had been conveyed to individual homeowners.

Planning Area 4 is zoned low density residential and is planned for 86 units, consisting of 51 lots in the Avellino Collection and 35 lots in the Catania Collection, all of which are being constructed by the Developer.

Homes are actively being constructed by the Developer in Planning Area 4. Planning Area 5 is zoned low density residential and is planned for 87 units, consisting of 48 lots in the Avellino Collection and 39 lots in the Catania Collection. The lots within Planning Area 5 are in unfinished lot condition.

Tract Map Status. The final tract map for Planning Area 4 was approved by the City on April 8, 2025.

The final tract map for Planning Area 5 is expected to be approved by the City in May 2026.

Entitlements for Improvement Area No. 2. The Vinedo Project received the following land use approvals: (i) General Plan Amendment approved by the City in February 2020, and (ii) Vindeo Specific Plan approved by the City in February 2020 (the “Vinedo Specific Plan”). Pursuant to the Vinedo Specific Plan, the area within Improvement Area No. 2 is now entitled for up to 173 homes.

Environmental Impact Report. In February 2020, the City Council certified the environmental impact report for the Vinedo Specific Plan (the “Final EIR”). Mitigation measures were required in the Final EIR and are incorporated into the Vinedo Project. [CONFIRM NOTHING REMAINING FOR BUILDOUT OF PA 4 & 5]
The Developer and its Development Plan
K. Hovnanian. K. Hovnanian Communities, Inc. (previously defined as the “Developer”) is an indirect, wholly-owned subsidiary of Hovnanian Enterprises, Inc., a Delaware corporation (“Hovnanian”), which is based

Attachment 3
40 in Matawan, New Jersey, and has been in the business of developing residential real estate communities in California since 1994. Hovnanian is subject to the informational requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) and in accordance therewith files reports, proxy statements, and other information, including financial statements, with the SEC. The SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, including Hovnanian. The address of such internet website is www.sec.gov. All documents subsequently filed by Hovnanian pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in such manner as the SEC prescribes.

Copies of Hovnanian’s Annual Report and each of its other quarterly and current reports, including any amendments, are available from Hovnanian’s website at www.khov.com. The website address is given for reference and convenience only. The information on the websites noted in this Official Statement may be incomplete or inaccurate and have not been reviewed by the City or the Underwriter. Nothing on such websites is a part of this Official Statement or incorporated into this Official Statement by reference.

K. Hovnanian PSA. The Master Developer and the Developer entered into a purchase and sale agreement for the 173 lots in the District (the “Purchase Agreement”). The Purchase Agreement was assigned to the Land Bank, who is serving as the land bank to the Developer for the property in Improvement Area No. 2. On August 2, 2024, the Land Bank closed on the lots in Improvement Area No. 2. See “K. Hovnanian Land Bank Arrangements” below.

Development Plan and Status. The Developer is developing the 173 lots in Improvement Area No. 2 as a single-family detached project known as “Mirabella in Paso Robles” (the “Mirabella Project”) located in the City. The Mirabella Project is being developed in two collections: (i) the Avellino Collection, featuring three product lines known as Asheville, Santa Rosa, and Pasadena ESP; and (ii) the Catania Collection, featuring three product lines known as Amadora, Barcelona, and Belfast ESP.

As of November 1, 2025, building permits had been issued for 17 homes planned for the Avellino Collection, with two model homes completed and 15 homes under construction; building permits had been issued for 11 homes planned for the Catania Collection, with two model homes completed and 9 homes were under construction. The construction of model homes for Avellino are completed and the construction of production homes commenced in June 2025. The first occupancy permit for the Avellino Collection is expected to be received in December 2025, which is the same timeframe that the first homes are expected to be conveyed to individual homeowners. All homes in the Avellino Collection are expected to be conveyed to individual homeowners by June 2028. The first occupancy permit for the Catania Collection is expected to be received in December 2025, which is the same timeframe that the first homes are expected to be conveyed to individual homeowners. All homes in the Catania Collection are expected to be conveyed to individual homeowners by June 2028.

More information regarding the Developer’s planned development of Planning Area 4 and Planning Area 5 within Improvement Area No. 2 and the status of development is set forth in the tables below.

The Avellino and Catania collections are being constructed within Planning Area 4 and Planning Area 5, as shown in the table below:

PA 4 PA 5 Total
Avellino Collection 51 48 99
Catania Collection 35 39 74
Total 86 87 173
_______________
Source: The Developer.

Attachment 3
41 Production in Planning Area 4 will consist of 14 initial phases and then production will transition to Planning Area 5, which will include 13 production phases. Currently, it is anticipated that production will occur in Planning Area 4 between June 2025 and October 2026, then transition to Planning Area 5 where production will occur between June 2026 and February 2028. Production will then transition back to Planning Area 4 for the final four production phases which will happen from November 2027 through May of 2028.

Development Plans
(Avellino Collection)
As of November 1, 2025
Floor Plan
Planned Units
on Land
Square
Footage
Base
Sales Prices(1)
Asheville 27 1,778 $759,990
Santa Rosa 34 1,986 $799,990
Pasadena ESP 38 2,088 $828,990
99 _____________________________
(1) These base sales prices are as of November 1, 2025, and are subject to change. These base prices do not include any additional pricing for upgrades, lot premiums and the like.

Source: The Developer.

Development Plans
(Catania Collection)
As of November 1, 2025
Floor Plan
Planned Units
on Land
Square
Footage
Base
Sales Prices(1)
Amadora 22 2,167 $869,990
Barcelona 24 2,285 $899,990
Belfast ESP 28 2,395 $939,990
74 __________________________
1 These base sales prices are as of November 1, 2025, and are subject to change. These base prices do not include any additional pricing for upgrades, lot premiums and the like.

Source: The Developer

Attachment 3
42 The development status of as of November 1, 2025 for each floor plan within both the Avellino Collection and the Catania Collection is set forth in the following tables.

Development Status
(Avellino Collection)
As of November 1, 2025
Product Line
Total
No.

Planned
Units
Building
Permits
Issued
Homes
Closed to
Homebuyers
Unclosed
Completed
Homes(1)
Units Under
Construction(2)
Remaining
Unimproved
or Finished
Lots(3)
Homes
Under
Contract
But Not
Closed
Asheville 27 6 0 0 6 21 5
Santa Rosa 34 5 0 1 4 29 5
Pasadena ESP 38 6 0 1 5 32 4
99 17 0 2 15 82 14
_______________________________
(1) The Developer has constructed 2 model homes, one in the Santa Rosa product line and one in the Pasadena product line. (2) A home is considered under construction if a building permit has been issued for such lot. As of November 1, 2025, the Developer was under construction on 15 production homes. (3) A lot is considered unimproved or finished if a building permit has not been issued for such lot.

Source: The Developer.

Development Status
(Catania Collection)
As of November 1, 2025
Product
Line
Total
No.

Planned
Units
Building
Permits
Issued
Homes
Closed to
Homebuyers
Unclosed
Completed
Homes(1)
Units Under
Construction(2)
Unimproved
or Finished
Lots(3)
Homes
Under
Contract
But Not
Closed
Amadora 22 5 0 0 5 17 2
Barcelona 24 3 0 1 2 21 0
Belfast ESP 28 3 0 1 2 25 3
74 11 0 2 9 63 5
_______________________________________
(1) The Developer has completed 2 model homes, one in the Barcelona product line and one in the Belfast product line. (2) A home is considered under construction if a building permit has been issued for such lot. As of November 1, 2025, the Developer is under construction on 9 production homes. (3) A lot is considered unimproved or finished if a building permit has not been issued for such lot.

Source: The Developer.

The Developer utilizes the model homes as part of its financing strategy. The Developer anticipates selling the four model homes to a model home company who will hold title to the model homes and lease them back to the Developer for use as model homes. After the project is sold out, the model homes are then sold and delivered by the Developer to homeowners and the proceeds are shared in an agreed-upon manner by both the leaseback company and the Developer. During the time that the model homes are owned by the leaseback company, the Developer pays all taxes on the model homes.

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

Attachment 3
43 base prices set forth above will not change after the date of this Official Statement. The Developer reserves the right to change, suspend or terminate the development plan, product mix, home construction and sales prices at any time without notice.

Status of Construction.

Backbone Infrastructure. All off-site, backbone infrastructure improvements required for the development of the Mirabella Project have been, or are being, constructed by the Master Developer. All of the backbone improvements required as a condition of pulling building permits or obtaining certificates of occupancy have been completed except for the Vinedo booster station. The Vinedo booster station is a Master Developer project that impacts 73 lots in the high-pressure zone of both Planning Area 4 and Planning Area 5. These high pressure zone lots are scheduled for development commencing in Phase 9, when permits will be pulled at the end of November 2025. The Developer will be able to pull building permits on these 73 lots, but will not be able to get certificates of occupancy for these 73 lots until the booster station is completed. The Developer anticipates completing construction of Phase 9 in July 2026, and the booster station is scheduled to be complete by March 2026.

In-tract Improvements. In tract water, streets, sewer and storm drain and dry utility trenching is complete for the entirety of Planning Area 4. Parkway landscaping is being completed on a production phase basis. Land development work commenced in Planning Area 5 in early November 2025.

Amenities. Other than trails which wind throughout, there are no amenities physically located within Planning Area 4 or Planning Area 5. Amenities available to the owners of property in the Mirabella Project, however, 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.

Financing Plan. For each of Planning Area 4 and Planning Area 5, the Developer has been self-funding all costs associated with the development of the property and home construction. The Developer currently expects to finance remaining costs from home sales revenues and internal funding. As of November 1, 2025, the Developer has expended or incurred approximately $23.7 million on land acquisition, site development, and direct construction and expects to expend an additional $101.83 million on land acquisition, site development, and direct construction to complete the development of Planning Area 4 and Planning Area 5. The Developer intends to finance future costs with a combination of equity and proceeds from the sale of completed homes. The Developer expects to have sufficient funds available to complete its development of the Planning Area 4 and Planning Area 5 commensurate with the development timing described in this Official Statement.

Notwithstanding the belief of the Developer that it will have sufficient funds to complete its planned development in Improvement Area No. 2, no assurance can be given that amounts necessary to fund the remaining planned development by the Developer will be available when needed. Neither the Developer 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, or to be acquired by, the Developer. Any contributions by the Developer 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 the Developer, 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 Developer within Improvement Area No. 2 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 Developer in Improvement Area No. 2. Many factors beyond the Developer’s control, or a decision by the Developer to alter its 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
44 K. Hovnanian Land Bank Arrangements
The Option. For the acquisition of the 173 lots in the Mirabella Project (the “Option Lots”), the Developer assigned the purchase agreement with the Master Developer to Brookfield Holdings (Mirabella) LLC, a Delaware limited liability company (the “Land Bank”), who is serving as land bank to the Developer for the Option Lots.

On August 2, 2024, the Land Bank acquired the Option Lots from the Master Developer in order to set up a land banking structure.

To facilitate the land banking structure for the Option Lots, the Developer and the Land Bank entered into that certain Option Agreement, dated August 2, 2024, as amended by the First Amendment to Option Agreement dated July 22, 2025 (as amended, the “Option Agreement”) whereby the Developer has the option, but not the obligation, to purchase the 173 Option Lots from the Land Bank pursuant to a takedown schedule agreed upon between the Developer and the Land Bank.

General. Pursuant to the Option Agreement, the Developer has the right to enter upon the Option Lots for the purpose of, among other things, constructing model homes, dwelling units and related improvements on the Option Lots before the Developer acquires the Option Lots from the Land Bank.

The Developer’s planned development of the Option Lots includes the construction of single-family residential homes and the sale of such homes to individual homebuyers. During the term of the Option Agreement, the Developer is obligated to pay all taxes on the Option Lots, including the Special Taxes, and other carrying costs on the Option Lots.

Under the terms of the Option Agreement, the Land Bank agreed to provide the Developer the exclusive right and option to purchase the Option Lots in consideration for, among other things, (a) an initial option payment, which payment has been made to the Land Bank; and (b) upon exercise of the option, the payment of the purchase price for each set of lots acquired.

The Option Lots must be purchased in certain groups and in a specified order, although the Developer may acquire more lots than scheduled and at earlier times so long as the identified lots are acquired by the applicable takedown date. In addition, pursuant to the Option Agreement, and with some limitations, the Land Bank has granted the Developer a license to enter upon the property to construct homes before it acquires the lots from the Land Bank.
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Attachment 3
45 The failure to acquire the lots in the specified order will result in the payment of a premium in addition to the purchase price. As agreed to by the Developer and the Land Bank, under the Option Agreement, the Option Lots must be acquired pursuant to the following schedule, although the Option Agreement contain provisions allowing for one-month extensions on acquisition of lots subject to the payment of an extension fee and other conditions.

Acquisition
Date
Avellino
Lots
Catania
Lots
Total Number
of Lots
Acquired Per
Acquisition
Date Status of Lots
3-31-25 4 3 7 7 lots acquired on 3-31-25
4-30-25 2 3 5 5 lots acquired on 5-1-25
5-31-25 5 0 5 5 lots acquired on 5-22-25
6-30-25 1 4 5 5 lots acquired on 6-3-25
7-31-25 5 1 6 6 lots acquired on 7-31-25
8-31-25 2 4 6 6 lots acquired on 8-29-25
9-30-25 4 2 6 6 lots acquired on 9-30-25
10-31-25 4 2 6 6 lots acquired on 11-3-25
11-30-25 4 1 5
12-31-25 3 3 6
1-31-26 3 2 5
2-28-26 3 2 5
3-31-26 2 3 5
4-30-26 3 3 6
5-31-26 3 2 5
6-30-26 2 4 6
7-31-26 5 0 5
8-31-26 4 1 5
9-30-26 3 3 6
10-31-26 2 4 6
11-30-26 2 4 6
12-31-26 4 2 6
1-31-27 4 2 6
2-28-27 4 3 7
3-31-27 1 4 5
4-30-27 5 1 6
5-31-27 3 3 6
6-30-27 3 3 6
7-31-27 4 2 6
8-31-27 3 1 4
9-30-27 2 2 4
99 74 173
The option under the Option Agreement expires on the earlier of (i) the last date permitted for the final takedown specified on the takedown schedule in the Option Agreement and the expiration of any applicable cure period, or (ii) the date the Developer has acquired all of the Option Lots in accordance with the Option Agreement.

The failure to timely acquire lots under the Option Agreement could result in the termination of the Option Agreement and the Developer will no longer have a right to purchase any of the remaining units under the Option Agreement.

Attachment 3
46 If the Developer does not exercise its option on the Option Lots or the right to purchase the Option Lots expires or is terminated, the Land Bank being an investor only and not a homebuilder, would likely attempt to sell such remaining Option Lots from the Option Agreement to another merchant builder.

The Land Bank. The Land Bank is an entity within a network of companies associated with Brookfield Asset Management (“BAM”), a subsidiary of the Brookfield Corporation (“Brookfield”). Brookfield is a global alternative asset manager founded in 1899 with over $1 trillion in assets under management, with significant investments in real estate, infrastructure, renewable power, and private equity. Brookfield Properties is the real estate management and development arm of BAM, which manages a wide variety of properties, including residential developments, offices, and retail centers.

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. 2 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. 2.

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. 2, 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 Developer 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. 2. 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. 2.