Rialto City Council
March 22, 2022

Norton Rose Fulbright US LLP draft of 3/8/22

PRELIMINARY OFFICIAL STATEMENT DATED MARCH __, 2022

NEW ISSUE - BOOK-ENTRY ONLY NO RATING

In the opinion of Norton Rose Fulbright US LLP, Los Angeles, California, Bond Couns el, under existing statutes, regulations, ru lings and judicial decisions, and assuming compliance with the tax covenant s in the documents pertaining to the Bonds and requirements of the Internal Revenue Code of 1986, interest on the Bonds is not included in the gross income of the owners of the Bonds for federal income tax purposes. In the further opinion of Bond Couns el, interest on the Bonds is not an item of tax preference for purposes of the fe deral alternative minimum tax. It is also the opinion of Bond Couns el that, under existing law, interest on the Bonds is exempt from personal income taxes of the State of California. See “TAX MATTERS” herein.

STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO
$[principal amount]*

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

SPECIAL TAX BONDS
SERIES 2022
Dated: Date of Delivery Due: September 1, as shown on the ins ide front cover This cover page and the inside cover page co ntain certain information for general refe rence only. Such information is not a sum mary of this issue. City of Rialto Community Facilities District No . 2019-2 (Foothill/Spruce) (the “District”) has not and does not con template making an application to any rating agency for the assignment of a rating to the Bonds. Investors must read the entire Official Statement, including the sections entitled “SPECIAL RISK FACTORS” and “NO RAT ING” to obtain information essential to making an informed investment decision with respect to the Bonds.

The City of Rialto Community F acilities District No. 2019-2 (Fo othill/Spruce) Special Tax Bo nds, Series 2022 (the “Bonds”) are being issued and delivered to (i) fin ance certain public improvements included in the City’s capital improvement program, (ii) fund a reserve fund for the Bonds, and (iii) pay the costs of issuing the Bond s and forming the district. See “ESTIMATED SOURCES AND USES OF PROCEEDS” and PLAN OF FINANCE” herein. The Bonds are authorized pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, and pursuant to a Fiscal Agent Agreement, dated as of April 1, 2022 (the “Fiscal Agent Agreement”), between the Ci ty of Rialto Community Facilities District No. 2019-2 (Foothill/Spruce) (the “District”) and U.S. Bank Trust Company, National Assoc iation, as Fiscal Agent (the “Fiscal Agent ”). The Bonds are limited oblig ations of the District payable solely from annual Special Taxes (as defined herein) to be levied on taxable land within the District and fr om certain other funds pledged under the Fiscal Agent Agreement , all as further described herein. The S pecial Taxes are to be levied a ccording to the Rate and Method of Apportionment of Special Tax approved by the City Council of the City of Rialto (the “City”) and the qualified electors within the District. See “THE DISTRICT –Rat e and Method of Apportionment of Special Taxes” herein. The City Council of the City is the legislative body of the District.

Interest on the Bonds will be pay able on September 1, 2022, and semiannually thereafter on each March 1 and September 1. Indi vidual purchases may initially be made in principal amounts of $5,000 or any integral multiple thereof and will be in book-entry form only. The Bonds are issuable in fully registered form and when issued wil l be registered in the name of Cede & Co., as nominee of The De pository Trust Company, New York, New York (“DTC”).

The Bonds are subject to optiona l redemption, mandatory redempt ion from prepayments, and mandat ory sinking fund redemption pri or to maturity as set forth herein. See “THE BONDS – Redemption” herein.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRI CT (EXCEPT AS PLEDGED IN THE FISCAL

AGENT AGREEMENT), THE CITY, THE COUNTY OF SAN BERNARDINO, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EX CEPT FOR THE SPECIAL TAXES, NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL

OBLIGATIONS OF THE CITY NOR GENERAL OBLIGATIONS OF THE DISTRICT , BUT ARE LIMITED OBLIGATIONS OF THE

DISTRICT PAYABLE SOLELY FROM SPEC IAL TAXES AND AMOUNTS HELD UND ER THE FISCAL AGENT AGREEMENT AS MORE FULLY DESCRIBED HEREIN.

Maturity Schedule
(see inside front cover page)
The Bonds are offered when, as and if issued, subject to the approval as to their legality by Norton Rose Fulbright US LLP, Bond Counsel.

Certain legal matters will be passed on for the District by Norton Rose Fulbright US LLP, Disclosure Counsel, for the District and the City by Burke, Williams and Sorensen, LLP, as C ity Attorney, and for the Underwriter by Ku tak Rock LLP, Irvine, California, as couns el to the Underwriter, and for the landowner by its counsel. It is anticip ated that the Bonds will be available for delivery in book-ent ry form on or about April ___, 2022.
[PIPER SANDLER LOGO]
Dated: March ___, 2022

* Preliminary, subject to change.

This Preliminary Official Statement and the information contain ed herein are subject to completion or amendment. Under no cir cumstances shall this Preliminary Officia l Statement constitute an offer to sell or a solicitation of an o ffer 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 of the securities laws of such jurisdiction.

$[principal amount]*

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

SPECIAL TAX BONDS
SERIES 2022

MATURITY SCHEDULE

$________________ Serial Bonds

Base CUSIP† No. _________

Maturity Date
September 1
Principal
Amount
Interest
Rate
Reoffering
Yield
CUSIP†
Suffix

$___________ ____% Term Bonds due September 1, 20__, Yield ____% CUSIP† No. _______

* Preliminary, subject to change.
† † CUSIP is a registered trademar k of the American Bankers Assoc iation. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Associati on by S&P Global Market Intell igence. Copyright © 2022 CUSIP Global Services. All rights reserved. The CUSIP numbers are not intended to create a databa se and do not serve in any way as a substitute for CUSIP service. CUSIP numbers have been assigned by an independent com pany not affiliated with the District and are included solely for the convenience of the regis tered owners of the Certificate s. None of the District, the City, the Underwriter or the Munic ipal Advisor are responsible for the selection or uses of these CUSI P numbers, and no representation is made as to their correctnes s on the applicable Bonds or as inc luded 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 insur ance and other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

CITY COUNCIL

OF THE CITY OF RIALTO, CALIFORNIA

Legislative Body of the

CITY OF RIALTO COMMUNITY FACILITIES DISTRICT NO. 2019-2 (FOOTHILL/SPRUCE)

Deborah Robertson, Mayor
Ed Scott, Mayor Pro Tem
Rafael Trujillo, Councilmember
Andy Carrizales, Councilmember
Karla Perez, Councilmember

____________________

CITY OFFICIALS

Marcus Fuller, City Manager
Arron Brown, Deputy City Manager
Edward J. Carrillo, Treasurer
Barbara McGee, City Clerk
Eric Vail, City Attorney

PROFESSIONAL SERVICES

MUNICIPAL ADVISOR
Fieldman, Rolapp & Associates, Inc.

Irvine, California

BOND COUNSEL AND DISCLOSURE COUNSEL
Norton Rose Fulbright US LLP
Los Angeles, California

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

SPECIAL TAX CONSULTANT & CFD ADMINISTRATOR
Webb Municipal Finance, LLC
Riverside, California

APPRAISER
Stephen G. White, MAI
Fullerton, California

TABLE OF CONTENTS
Page

i
INTRODUCTION ........................................................................................................................................ 1 Purpose of Official Statement .......................................................................................................... 1 Authority for Issuance and Use of Proceeds .................................................................................... 1 The City ........................................................................................................................................... 1 The District ...................................................................................................................................... 2 Property Ownership ......................................................................................................................... 2 Security and Sources of Payment .................................................................................................... 2 Appraisal .......................................................................................................................................... 3 No Additional Series of Bonds ........................................................................................................ 3 Risk Factors ..................................................................................................................................... 4 Continuing Disclosure ..................................................................................................................... 4 Miscellaneous .................................................................................................................................. 4 ESTIMATED SOURCES AND USES OF FUNDS .................................................................................... 4 PLAN OF FINANCE .................................................................................................................................... 5 THE BONDS ................................................................................................................................................ 5 General ............................................................................................................................................ 5 Authority for Issuance ...................................................................................................................... 6 Debt Service Schedule ..................................................................................................................... 7 Redemption ...................................................................................................................................... 8 Book-Entry Only System ............................................................................................................... 10 SECURITY FOR THE BONDS ................................................................................................................. 10 Pledge of Special Taxes ................................................................................................................. 10 Special Tax Fund ........................................................................................................................... 11 Prepayment of Special Taxes ......................................................................................................... 13 Covenant to Commence Foreclosure Proceedings ......................................................................... 13 No Issuance of Parity Bonds .......................................................................................................... 14 Value-to-Lien Ratio ....................................................................................................................... 14 No Obligation of the City Upon Delinquency ............................................................................... 14 Other Indebtedness and Obligations .............................................................................................. 15 THE DISTRICT .......................................................................................................................................... 18 General .......................................................................................................................................... 18 Rate and Method of Apportionment of Special Taxes ................................................................... 21 Special Tax Levies and Delinquencies .......................................................................................... 24 Estimated Maximum Special Tax Proceeds and Debt Service Coverage ...................................... 24 Appraised Property Value .............................................................................................................. 25 Appraised Value-to-Lien Ratio ...................................................................................................... 26 Direct and Overlapping Governmental Obligations ...................................................................... 29 Estimated Tax Burden .................................................................................................................... 30 SPECIAL RISK FACTORS ....................................................................................................................... 31 Risks of Real Estate Secured Investments Generally .................................................................... 31 Limited Obligations ....................................................................................................................... 31

TABLE OF CONTENTS (continued)
Page

ii
Insufficiency of Special Taxes ....................................................................................................... 31 Depletion of Reserve Account ....................................................................................................... 32 Risk of Structural or Wildland Fires .............................................................................................. 32 Natural Disasters ............................................................................................................................ 32 Hazardous Substances .................................................................................................................... 33 Parity Taxes and Special Assessments........................................................................................... 33 Disclosures to Future Purchasers ................................................................................................... 34 Special Tax Delinquencies ............................................................................................................. 34 Non-Cash Payments of Special Taxes ........................................................................................... 3 5 Payment of the Special Tax is not a Personal Obligation of the Owners ...................................... 35 Appraised Valuations; Value-to-Lien Ratios ................................................................................. 35 FDIC/Federal Government Interests in Properties ......................................................................... 36 Bankruptcy and Foreclosure .......................................................................................................... 37 No Acceleration Provision ............................................................................................................. 37 Loss of Tax Exemption .................................................................................................................. 37 Limitations on Remedies ............................................................................................................... 38 No Ratings and Limited Secondary Market ................................................................................... 38 Proposition 218 .............................................................................................................................. 38 Validity of Landowner Election ..................................................................................................... 39 Ballot Initiatives ............................................................................................................................. 40 Extraordinary Redemption from Prepaid Special Taxes ................................................................ 40 COVID-19 (Coronavirus) Pandemic ............................................................................................. 40 Cybersecurity ................................................................................................................................. 41 CONTINUING DISCLOSURE .................................................................................................................. 42 TAX MATTERS ......................................................................................................................................... 42 CONCLUDING INFORMATION ............................................................................................................. 44 Absence of Material Litigation ...................................................................................................... 44 Approval of Legality ...................................................................................................................... 44 No General Obligation of City or District ..................................................................................... 45 The Municipal Advisor .................................................................................................................. 45 No Ratings on the Bonds ............................................................................................................... 45 Underwriting .................................................................................................................................. 45 Miscellaneous ................................................................................................................................ 45

APPENDIX A – INFORMATION RELATING TO THE CITY OF RIALTO AND SAN BERNARDINO COUNTY ...................................................................................... A-1 APPENDIX B FORM OF BOND COUNSEL’S OPINION .................... ........................................ B-1 APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT ......................................................................................................... C-1 APPENDIX D – RATE AND METHOD OF APPORTIONMENT
OF SPECIAL TAX .................................................................................................. D-1 APPENDIX E – BOOK-ENTRY ONLY SYSTEM ........................... ................................................ E-1 APPENDIX F – FORM OF CONTINUI NG DISCLOSURE AGREEMENT ................................... F-1 APPENDIX G - APPRAISAL REPORT ................................. ........................................................... G-1

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

Estimates and Forecasts. This Official Statement contains statements which, to the extent they are not recitations of historical fact, constitute “forward-looking statements,” withi n the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. In this respect, such forward-looking statements are generally identified by the use of words “estimate,” “project,” “plan,” “budget,” “anticipate,” “expect,” “intend,” or “believe” or the negative thereof or other variations thereon or comparable terminology.

The achievement of certain results or other expectations contai ned in such forward-looking statements involves known or unknown risks, uncertainties and other factors which m ay cause actual results, performance or achievements to be significantly different than those expressed or implied by such forward-looking statements.

These risks and uncertainties include, but are not limited to, uncertainties relating to economic conditions, the effect of changes in the amounts and tim ing of receipt of revenues, th e availability and sufficiency of Special Taxes, change in circumstances adverse ly affecting the projected use o f proceeds, and risks involving pertinent court decisions. The District does not plan to issue any updates or r evisions to those forward- looking statements if or when its expectations, or events, conditions or circumstances o n which such statements are based change. Potential investors are cautioned that such statements are only predictio ns and that actual events or results may differ materially. In evaluating such statements, potential investors should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements.

Limit of Offering. No dealer, broker, salesperson or other person has been author ized by the District or the City to give any information or to make any representations in connecti on with the offer or sale of the Bonds other than those contained herein and if given or made, such other informa tion or representation must not be relied upon as having been authorized by the District or the City, the Municip al Advisor or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitat ion of an offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful f or such person to make such an offer, solicitation or sale.

Involvement of Underwriter . The Underwriter has provided the following statement for incl usion 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.

The information and expressions of opinions herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District or the City or an y other entity described or referenced herein since the date hereof. All summaries of the documents referred to in this Official Statement are made subject to the provisions of such documents, respectively, and do not purport to be complete statements of any or all of such provisions.

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

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

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

VICINITY MAP

$[principal amount]*

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

SPECIAL TAX BONDS
SERIES 2022
This Official Statement, which includes the cover page, table of contents and appendices hereto, is provided to furnish information in connection with th e sale, issuance and delivery of City of Rialto Community Facilities District No. 2019-2 (Foothill/Spruce) Special Tax Bonds, Series 2022, in the principal amount of $[principal amount]* (the “Bonds”).

INTRODUCTION
This Introduction is not a summary of this Official Stat ement. 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, including the cover page and appendices hereto, and the documents summarized or described herein. All references herein to any document are qualified by the terms of such document in its entirety. A full review should be made of the entire Official Statement. The off ering of the Bonds to potential investors is made only by means of the entire Official Statement.

Purpose of Official Statement
The purpose of this Official Statement, which includes the cove r page, table of contents and appendices hereto (the “Official Statement”), is to provide information co ncerning the sale of $[principal amount] * aggregate principal amount of the City of Rialto Community Faci lities District No. 2019-2 (Foothill/Spruce) Special Tax Bonds, Series 2022 (the “Bonds”). Capitalized term s used but not defined herein shall have the meanings set forth in the Fiscal Agent Agreement, dated as of A pril 1, 2022 (the “Fiscal Agent Agreement”), by and between the City of Rialto Community Facilities District No . 2019-2 (Foothill/Spruce) (the “District”) and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”). See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT” herein.

Authority for Issuance and Use of Proceeds
The Bonds are authorized by and are being issued by the Distric t pursuant to certain resolutions adopted by the City Council of the City of Rialto, California, acting a s the legislative body of the District (the “City Council’), the Fiscal Agent Agreement, and in accordance with t he Mello-Roos Community Facilities Act of 1982, as amended, constituting Chapter 2.5 (commencing with Sec tion 53311) of Division 2 of Title 5 of the California Government Code (the “Act”). See “THE BONDS – Authority for Issuance” herein.

Proceeds of the Bonds will be used to (i) finance certain capit al facilities fees relating to public facility improvements serving property within the District, (ii) fund a reserve fund, and (iii) pay costs of issuance of the Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS” and “PLAN OF FINANCE.” The City
The City is located in the western portion of the County of San Bernardino (the “County”), approximately 60 miles east of the City of Los Angeles and just west of the City of San Bernardino. The City was incorporated in 1911, and is organized as a general law cit y with a Council-Manager form of government.

* Preliminary, subject to change.

2 The City encompasses an area of approximately __ square miles a nd, as of January 1, 2021, had an estimated population of approximately 102,567 as reported by the Californ ia Department of Finance. For certain information regarding the City and the County, see “APPENDIX A –INFORMATION RELATING TO THE CITY OF RIALTO AND SAN BERNARDINO COUNTY.”
The Bonds are not a debt of the City in any respect.

The District
The District was formed and established by the City on December 10, 2019 pursuant to the Act, following a public hearing by the City Council, as legislative body of the District, and a landowner election which authorized the incurrence of bonded indebtedness and appr oved the levy of a facilities special tax (the “Special Taxes” or “Special Tax A”), and a services special tax (“Special Tax B”). The Special Tax B is not pledged to the Bonds. See “THE BONDS – Authority for Issuance.” The District consists of the “Foothill Grove” development which is a gated residential neighborhood on an approximately 16-acre site located in the west central porti on of the City bordered by Foothill Boulevard, Spruce Avenue, Grove Street and Larch Avenue. The gated commun ity is planned for 118 townhomes and 66 single-family homes and features a pool, spa and playground.

Property Ownership
The largest owner of the taxable property within the District is Century Communities of California, LLC (the “Developer”), a subsidiary of a top ten national homebuild er based in Colorado. The rest of the property within the District is owned by individual homeowners.

The Developer purchased the appr oximate 16-acre site in 2019 fr om HNK Associates, LLC. As of March 7, 2022, all 66 single-family homes and 93 of the 118 tow nhomes were completed and closed to individual homeowners. As of March 7, 2022, the Developer owne d 20 townhomes that were under construction, along with 5 completed model townhomes. All 25 remaining townhomes owned by the Developer have pending sales and are expected to be completed and closed by July 2022. For more detailed information about the Developer and the development plans for the property in the District, see “THE DISTRICT - Property Ownership and Development Status.”
Security and Sources of Payment
The Bonds are secured by a first pledge of all of the Special T axes and other amounts deposited in the Special Tax Fund (except for moneys to be deposited in the Admi nistrative Expense Account). See “SECURITY FOR THE BONDS” and APPENDIX C – “SUMMARY OF CERTAIN P ROVISIONS OF THE FISCAL AGENT AGREEMENT.” “Special Taxes” is defined in the Fis cal Agent Agreement to mean the special tax requirement for facilities authorized to be levied by the District on parcels within the District in accordance with the Resolution of Formation, the Act and the vo ter approval obtained at the December 10, 2019 election within the District a nd any additional special taxes a uthorized to be levied by the District from time to time that are pledged by the District to the repayment of the B onds, together with the proceeds collected from the sale of property pursuant to the foreclosure provisions of the Fiscal Agent Agreement for the delinquency of such Special Taxes remaining afte r the payment of all the costs related to such foreclosure actions, including, but not limited to, all legal fees and expenses, court costs, consultant and title insurance fees and expenses.

The Special Taxes will be levied by the District and collected by the San Bernardino County Treasurer- Tax Collector in the same manner and at the same time as ad valorem property taxes. The District has covenanted in the Fiscal Agent Agreement to cause foreclosure p roceedings to be commenced and prosecuted against parcels with delinquent Special Taxes under certain cir cumstances. For a more detailed description of the foreclosure covenant see “SECURITY FOR THE BONDS - Covenant to Commence Foreclosure

3 Proceedings.” There is no assurance that the property within t he District can be sold for the appraised value described herein, or for a price sufficient to pay the principa l of and interest on the Bonds in the event of a default in payment of Special Taxes by the current landowners o r future landowners within the District. See “RISK FACTORS — Appraised Values” and APPENDIX G — “APPRAISAL REPORT” herein.

The District has established a R eserve Account pursuant to the Fiscal Agent Agreement. The Reserve Account will be funded from the proceeds of the Bonds in the in itial amount of $___________. The Reserve Requirement is defined in the Fiscal Agent Agreement to mean, a s of any date of calculation, an amount equal to the lowest of (1) 10% of the issue price of the Bonds (as de fined pursuant to section 148 of the Internal Revenue Code of 1986 (the “Code”)), or (2) Maximum Annual Debt Service, or (3) 125% of the average Annual Debt Service of the Outstanding Bonds; provided, however, the R eserve Requirement on any date of calculation shall not exceed the Reserve Requirement as of the date of deli very of the Bonds. See “SECURITY FOR THE BONDS – Special Tax Fund – Reserve Account.”
Appraisal
An appraisal of the taxable property within the District, dated January 28, 2022 (the “Appraisal”), was prepared by Stephen G. White, MAI, Fullerton, California (the “ Appraiser”) in connection with issuance of the Bonds. The purpose of the Appraisal was to ascertain the “as is ” market value of the fee simple estate as of the January 10, 2022 date of value for the taxable property in the District, which consisted of 66 detached single- family homes owned by individual homeowners, 85 townhomes owned by individual homeowners, 5 completed model townhomes owned by the Developer, and 28 townhomes under construction owned by the Developer, 8 of which were approximately 90% completed and 20 of which were in the early stage of construction. Subject to the assumptions and limitations contained in the Appraisal, the Appraiser estimated that the fee simple interest in the subject property, subject to the lien of the Sp ecial Taxes, had an estimated aggregate value of $83,480,000.

The overall aggregate value-to-lien ratio based on the estimate d appraised values from the Appraisal, and the estimated par amount of the Bonds of $4,895,000* is 17.05 to 1.

There is no assurance that the property within the District can be sold for the appraised value described h e r e i n , o r f o r a p r i ce s u f f ic i e n t t o p a y t h e p r i n c i p a l o f a n d interest on the Bonds in the event of a default in payment of Special Taxes by the current landowner or future lan downers within the District. See “RISK FACTORS — Appraised Values” and APPENDIX G — “APPRAISAL REPORT” herein.

Additional Bonds for Refunding Purposes Only
At the December 10, 2019 election, the qualified electors autho rized the District to incur bonded indebtedness in an amount not t o exceed $7,000,000. Pursuant t o the Fiscal Agent Agreement, the District has covenanted to issue additional bonds only for the purpose of refunding the Bonds.

Other taxes and/or special assessments with liens equal in prio rity to the continuing lien of the Special Taxes may also be levied in the future on the property within t he District which could adversely affect the willingness of the owners of the taxable parcels within the Dis trict to pay the Special Taxes when due. See “SPECIAL RISK FACTORS—Parity Taxes and Special Assessments” herein.

* Preliminary, subject to change.

4 Risk Factors
Investment in the Bonds involves risks that may not be appropri ate for some investors. See “RISK FACTORS” for a discussion of certain risk factors which should be considered, in addition to the other matters set forth in this Official Statement, in considering the investment quality of the Bonds.

Continuing Disclosure
In order to assist the Underwriter in complying with Rule 15c2- 12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time, the District has covenanted to provide certain financial information and operating data and notices of certain enumerated events relating to the District. See “CONTINUING DISCLOSURE” herein.

Miscellaneous
The summaries of and references to all documents, statutes, rep orts and other instruments referred to herein do not purport to be complete, comprehensive or definiti ve, and each such summary and reference is qualified in its entirety by reference to each such document, s tatute, report or other instrument. Included in this Official Statement are summaries of certain provisions of the F iscal Agent Agreement and Appraisal. Copies of the Fiscal Agent Agreement and Appraisal are available for insp ection at the offices of the City, and copies of such documents will be provided by the City upon request and payment of duplication costs.

ESTIMATED SOURCES AND USES OF FUNDS
The proceeds from the sale of the Bonds will be deposited into the following funds and accounts established under the Fiscal Agent Agreement:

SOURCES
Principal Amount of Bonds
Plus/Less: Net Original Issue Premium/Discount
Less: Underwriter’s Discount
Total Sources

USES
Acquisition and Construction Fund
Costs of Issuance Account
(1)
Reserve Account (2)
Total Uses
___________________________
(1) Includes printing costs, appr aisal costs, filing and record ing fees, fees and charges of the Fiscal Agent and its legal counsel, expenses incurred by the City in connection with the issuance of the Bonds, legal fees and charges, including bond counsel and disclosure counse l, and financial advisor’s fe es, and other costs, charges and fees in connection with the foregoing.
(2) Equal to the Reserve Requirement with respect to the Bonds as of their date of delivery.

5 PLAN OF FINANCE
A portion of the proceeds of the Bonds will be used to finance certain capital facilities fees relating to public facility improvements serving properties within the Dist rict and elsewhere in the City. Such eligible fees and estimated costs are set forth in the following table. In a ddition, Special Taxes collected for Fiscal Year 2021-22 will be deposited into the Special Tax Fund to be used to pay debt service due on the Bonds on September 1, 2022 and for Administrative Expenses for Fiscal Year 2021-22.

Description of Eligible Public Facilities Fees
Estimated
Amount

Park Development $ 824,218
Fire Facilities 195,882
General Facilities 374,552
Library Facilities 66,944
Law Enforcement 266,046
Open Space 56,312
Storm Drain 521,136
Street Medians 7,677
Transportation Facilities Fee 522,042
Traffic Signal Fees 55,983
Wastewater Collection 145,555
Wastewater Treatment 343,481
Water Facilities Fees 1,180,677
Total Estimated Cost of City Fees $4,560,505
____________
Source: Century Communities of California, LLC.

THE BONDS
General
The Bonds will be dated the date of their delivery and will mat ure in the amounts and on the dates set forth on the cover page of this Official Statement. The Bonds w ill be issued in fully registered form in denominations of $5,000 each or any integral multiple of $5,000.

The Bonds will bear interest at the annual rates set forth on t he cover page of this Official Statement, payable semiannually on each March 1 and September 1, commencin g September 1, 2022 (each, an “Interest Payment Date”). Interest will be calculated on the basis of a 360-day year composed of twelve 30-day months.

Principal of and interest on the Bonds (including the final int erest payment upon maturity or earlier redemption), is payable by check of the Fiscal Agent mailed by first class mail to the registered Owner thereof at such registered Owner’s address as it appears on the registrati on books maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Pay ment Date, or by wire transfer made on such Interest Payment Date upon written instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the appl icable Record Date, which instructions will continue in effect until revoked in writing, or until such Bond s are transferred to a new Owner. Each Bond shall bear 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 sh all bear interest from such date of authentication, or (ii) it is authenticated prior to an Interest Payment Date a nd after the close of business on the Record Date

6 preceding such Interest Payment Date, in which event it shall b ear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding th e first Interest Payment Date, in which event it shall bear interest from the Closing Date.

The principal of the Bonds and any premium on the Bonds are pay able in lawful money of the United States of America upon surrender of the Bonds at the Principal Office of the Fiscal Agent.

Authority for Issuance
District Proceedings . The Bonds are issued pursuant to the Act and the Fiscal Agent Agreement. In addition, as required by the Act, the City Council has taken the following actions with respect to establishing the District and authorizing issuance of the Bonds:

Resolutions of Intention : On October 22, 2019, the City Council adopted a resolution st ating its intention to establish the District and to authorize the levy o f a special tax therein. On the same day the City Council adopted a resolution stating its intention to incu r bonded indebtedness for the purpose of financing the Facilities.

Resolution of Formation : Following a noticed public hearing, the City Council adopted, on December 10, 2019, a resolution (the “Resolution of Formation”) which es tablished the District and authorized the levy of a special tax within the District.

Resolution of Necessity and Calling Election . On December 10, 2019, the City Council adopted a resolution declaring the necessity to incur bonded indebtedness in an amount not to exceed $7,000,000 for the District and calling an election by the landowners with in the District for the same date on the issues of the levy of the Special Tax, the incurring of bonded indebtedness and the establishment of an appropriations limit.

Landowner Election and Declaration of Results : On December 10, 2019, an election was held in which the qualified landowner electors w ithin the District approved a ballot proposition authorizing the issuance of bonds in the not to exceed amount of $7,000,000 for the District to finance the construction of the Facilities, the levy of a special tax and the establishm ent of an appropriations limit for the District. On December 10, 2019, the City Council adopted a reso lution under which the City Council approved the canvass of the votes and declared the District to be fully formed with the authority to levy the Special Taxes, to incur the bonded indebtedness and to have the established appropriations limit.

Special Tax Lien and Levy : A Notice of Special Tax Lien fo r the District was recorded in t h e r e a l property records of San Bernardino County on December 23, 2019.

Ordinance Levying Special Taxes : On January 14, 2020, the City Council adopted an ordinance authorizing the levy of the Special Tax within the District.

Resolution Authorizing Issuance of the Bonds : On March ___, 2022, the City Council adopted a resolution approving issuance of the Bonds in an amount not to exceed $________ for the District.

City’s Goals and Policies. As required by the Act, the City adopted “Goals and Policies for Community Facilities Districts” by Resolution No. ___________ adopted on _________ (the “Goals and Policies”). The Goals and Policies establish an order of priority for projects to be financed by community facilities districts and certain credit quality requirements for bonds issued by communi ty facilities districts and improvement areas therein, namely a 3:1 ratio of property value to the lien of th e Bonds and other public indebtedness secured by a lien on real property currently existing against the properties to be taxed. Property value may be based on an appraisal or on assessed values as indicated on the county assessor’s tax roll.

7 The Goals and Policies also require that, for residential prope rty, the maximum annual special tax, together with ad valorem property taxes, and all other special assessments or special taxes collected or to be collected on the annual tax bill for each developed parcel at t he time of bond issuance, may not exceed 2% of such parcel’s projected assessed value.

Debt Service Schedule
The following table presents the annualized debt service on the Bonds (including sinking fund payments), assuming there are no optional redemptions.

Year Ending
September 1 Principal Interest Total Debt Service
2022(1)
2023
2024
2025
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

Total
_____________________________
Source: Underwriter
(1) Debt service due on September 1, 2022 is expected to be paid fr om special taxes levied and collected for Fiscal Year 2021-22.

8 Redemption
Optional Redemption. The Bonds maturing on or after September 1, 2030 are subject to redemption prior to maturity at the option of the District on any date, on or after September 1, 2029, as a whole or in part, by lot, from any available source of funds at the following redemp tion prices (expressed as a percentage of the principal amount of Bonds to be redeemed), together with accrue d interest thereon to the date fixed for redemption:

Redemption Dates Redemption Prices

September 1, 2029 through August 31, 2030 103%
September 1, 2030 through August 31, 2031 102%
September 1, 2031 through August 31, 2032 101%
September 1, 2032 and thereafter 100%

Special Mandatory Redemption from Special Tax Prepayments . The Bonds are subject to mandatory redemption prior to maturity on any Interest Payment Date, on o r after September 1, 2022, as a whole or in part, in a manner determined by the District from prepayments of Spec ial Taxes at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed), together with accrued interest thereon to the date fixed for redemption:

Redemption Dates
Redemption Prices

September 1, 2022 and each March 1 and September 1 through and including March 1, 2030
103%
September 1, 2030 and March 1, 2031 102%
September 1, 2031 and March 1, 2032 101%
September 1, 2032 and each March 1 and September 1 thereafter 1 00%

In connection with such redemption, the District may also apply amounts in the Reserve Account which will be in excess of the Reserve Requirement as a result of suc h Special Tax prepayment to redeem Bonds as set forth above.

Mandatory Sinking Fund Redemption. The Term Bonds maturing on September 1, 20__, on September 1, 20__ and on September 1, 20__ are subject to manda tory redemption, in part by lot, on September 1 in each year commencing September 1, 20__ with respect to the Term Bonds maturing on September 1, 20__, commencing September 1, 20__ with respect to the Term Bonds mat uring on September 1, 20__, and commencing September 1, 20__ with respect to the Term Bonds mat uring on September 1, 20__, from the Sinking Fund Payments that have been deposited into the Redempt ion Account at a redemption price equal to the principal amount thereof to be redeemed, without premium, p lus accrued interest thereon to the date of redemption as set forth in the following schedule; provided, ho wever, that (i) in lieu of redemption thereof, the Term Bonds may be purchased by the District and tendered to the Fiscal Agent, and (ii) if some but not all of the Term Bonds have been redeemed, the total amount of all future S inking Fund Payments will be reduced by the aggregate principal amount of th e Term Bonds so redeemed, to be allocated among such Sinking Fund Payments on a pro rata basis (as nearly as practicable) in inte gral multiples of $5,000 as determined by the District in a written notice to the Fiscal Agent.

9 Term Bonds Maturing on September 1, 20__
Redemption Date
(September 1) Principal Amount

(maturity)
Term Bonds Maturing on September 1, 20__
Redemption Date
(September 1)
Principal Amount

(maturity)
Term Bonds Maturing on September 1, 20__
Redemption Date
(September 1)
Principal Amount

(maturity)

Selection of Bonds for Redemption . If less than all of 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 an integral multiple t hereof. In selecting portions of such Bonds for redemption, the Fiscal Agent shall treat such Bonds as representing that number of Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bonds to be redeemed in p art by $5,000. The Fiscal Agent shall promptly notify the District in writing of the Bonds, or portions thereof, selected for redemption.

Notice of Redemption . When Bonds are due for redemption, the Fiscal Agent shall giv e notice, in the name of the District, of the redemption of such Bonds. At leas t 20 days but no more than 60 days prior to the redemption date, the Fiscal Agent shall mail a copy of the noti ce of redemption, by first class mail, postage prepaid, to the respective Owners thereof at their addresses ap pearing on the Bond Register. The actual receipt by the Owner of any Bond or the original purchaser of any Bond of notice of such redemption shall not be a condition precedent to redemption, and neither the failure to receive nor any defect in such notice shall affect the validity of the proceedings for the redemption of such Bonds, or the cessation of interest on the redemption date.

A certificate by the Fiscal Agent that notice of such redemptio n has been given as herein provided shall be conclusive as against all parties and the Owner shall not be en titled to show that he or she failed to receive notice of such redemption.

If at the time of mailing of any notice of optional redemption there has not been deposited with the Fiscal Agent moneys sufficient to redeem all the Bonds called f or redemption, such notice shall state that it is subject to the deposit of the redemption moneys with the Fiscal Agent not later than the opening of business on the redemption date and will be of no effect unless such moneys are so deposited.

10 Partial Redemption of Bonds . Upon surrender of any Bond to be redeemed in part only, the D istrict shall execute and the Fiscal Agent shall authenticate and deliv er to the Bondowner, at the expense of the District, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered, with the same interest rate and the same maturity.

Effect of Notice and Availability of Redemption Money. Notice of redemption having been duly given, as provided in the Fiscal Agent Agreement, and the amount neces sary for the redemption having been made available for that purpose and being available therefor on the date fixed for such redemption:
(1) The Bonds, or portions there of, designated for redemption s hall, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in the Fiscal Agent Agreement, anything in the Fiscal Agent Agreement or in the Bonds to the contrary notwithstanding; (2) Upon presentation and surrender thereof at the office of t he Fiscal Agent, the redemption price of such Bonds shall be paid to the Owners thereof;
(3) As of the redemption date the Bonds, or portions thereof s o designated for redemption shall be deemed to be no longer Outstanding and such Bonds, or portions thereof, shall cease to bear further interest; and (4) As of the date fixed for redemption no Owner of any of the Bonds, or portions thereof so designated for redemption, shall be entitled to any of the bene fits of the Fiscal Agent Agreement or any Supplemental Fiscal Agent Agreement, or to any other rights, ex cept with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available.

Book-Entry Only System
The Depository Trust Company (“DTC”) will act as securities dep ository for the Bonds. The Bonds will be issued as fully-registered securities registered initially i n the name of Cede & Co. (DTC’s partnership nominee). One fully-registered bond will be issued for the Bond s of each maturity and each interest rate, in the initial aggregate principal amount of such maturity of such ser ies. See APPENDIX E – “Book-Entry Only System.”

SECURITY FOR THE BONDS
Pledge of Special Taxes
General. The Special Taxes are the primary security for repayment of t he Bonds. The Bonds are secured by a first pledge of the Special Taxes and all moneys d eposited in the Special Tax Fund (except for moneys to be deposited in the Adm inistrative Expense Account). The Special Taxes and all moneys deposited into these funds (except as otherwise provided in the Fiscal Ag ent Agreement) are dedicated to the payment of the principal of, and interest and any premium on, the Bonds as provided in the Fiscal Agent Agreement and in the Act until all of the Bonds have been paid and retired or un til moneys or Federal Securities have been set aside irrevocably for that purpose under the Fiscal Agent Agree ment. The Administrative Expense Requirement is defined to mean for any Fiscal Year an amount equal to $30,0 00 for Fiscal Year 2021-22 escalating by two percent per each Fiscal Year thereafter.

So long as any Bonds issued under the Fiscal Agent Agreement ar e Outstanding, the District has covenanted in the Fiscal Agent Agreement to levy the Special Ta x in an amount sufficient, together with other amounts on deposit in the Special Tax Fund and available for su ch purpose, to pay (1) the principal of and interest on the Bonds when due, (2) the Administrative Expenses , and (3) any amounts required to replenish the Reserve Account of the Special Tax Fund to the Reserve Requirement.

11 The Special Taxes will be levied by the District and collected by the San Bernardino County Treasurer- Tax Collector in the same manner and at the same time as ad valorem p r o p e r t y t a x e s I n t h e e v e n t t h a t t h e Special Taxes are not received when due, the only sources of fu nds available to pay the debt service on the Bonds are amounts held by the Fiscal Agent in the Special Tax F und (other than the Administrative Expenses), including amounts held in the Reserve Account therein, for the exclusive benefit of the owners of the Bonds, and foreclosure proceeds resulting from the sale of delinquent parcels if and when available. In the event that delinquencies occur in the receipt of the Special Taxes within the District in any Fiscal Year, the District may increase its Special Tax levy in the following Fiscal Year up t o the maximum amount permitted under the Rate and Method of Apportionment of Special Taxes (the “Rate and Met hod”) except for the 10% limit on residential properties. Although the Special Tax levy may be increased, Sp ecial Taxes resulting from the increased levy will not become available to cure any delinquencies until actua lly collected. In addition, an increase in the Special Tax levy may adversely affect the ability or willingnes s of property owners to pay their Special Taxes.

See “THE DISTRICT– Rate and Method of Apportionment of Special Taxes” herein for a description of the District’s procedures for levying Special Taxes, and “SPECIAL RISK FACTORS” herein.

Special Taxes. The Fiscal Agent Agreement defines “Special Taxes” as the spe cial tax requirement for facilities authorized to be levied by the District on parcels w ithin the District in acco rdance with the Resolution of Formation, the Act and the voter approval obtained at the De cember 10, 2019 election in the District and any additional special taxes authorized to be levied by the Distric t within the District from time to time that are pledged by the District to the repayment of the Bonds, together with the proceeds collected from the sale of property pursuant to the foreclosure provisions of the Fiscal A gent Agreement for the delinquency of such Special Taxes remaining after the payment of all the costs rela ted to such foreclosure actions, including, but not limited to, all legal fees and expenses, court costs, consultant and title insurance fees and expenses.

Limited Obligation . ALL OBLIGATIONS OF THE DISTRICT UNDER THE FISCAL

AGENT AGREEMENT AND THE BONDS ARE NOT GENERAL OBLIGATIONS OF TH E CITY

OR THE DISTRICT, BUT ARE LIMITED OBLIGATIONS, PAYABLE SOLELY FR OM THE

SPECIAL TAX REVENUES AND THE FUNDS PLEDGED THEREFORE UNDER THE FISCAL AGENT AGREEMENT. THE FAITH AND CREDIT OF THE CITY, THE DISTRIC T OR THE

STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS NOT PLEDGED TO THE PAYMENT OF THE BONDS.

Special Tax Fund
Pursuant to the Fiscal Agent Agreement, there is established a “Special Tax Fund” to be held and maintained by the Fiscal Agent. In the Special Tax Fund, there is further established and created an Interest Account, a Principal Account, a Redemption Account, a Reserve A ccount and an Administrative Expense Account.

The amounts on deposit in the for egoing funds will be held by t he Fiscal Agent, and the Fiscal Agent shall invest and disburse the amounts in such funds and account s in accordance with the provisions of the Fiscal Agent Agreement and shall disburse investment earnings thereon in accordance with the provisions of the Fiscal Agent Agreement.

The District will, on each date on which it receives Special Ta xes, transfer the Special Taxes to the Fiscal Agent for deposit in the Special Tax Fund to be held in accordance with the terms of the Fiscal Agent Agreement. The Fiscal Agent will transfer the amounts on depos it in the Special Tax Fund on the dates and in the amounts set forth in the Fiscal Agent Agreement in the following order of priority:
(1) The Administrative Expense Account of the Special Tax Fund; (2) The Interest Account of the Special Tax Fund;

12 (3) The Principal Account of the Special Tax Fund;
(4) The Redemption Account of the Special Tax Fund;
(5) The Reserve Account of the Special Tax Fund; and
(6) The Surplus Fund.

Administrative Expense Account. Upon receipt of Special Taxes from the District for deposit in the Special Tax Fund, the Fiscal Agent will transfer from the Speci al Tax Fund and deposit in the Administrative Expense Account of the Special Tax Fund an amount equal to the Administrative Expense Requirement for the Bond Year, to be disbursed by the Fiscal Agent to pay Administr ative Expenses. Moneys in the Administrative Expense Account are not pledged to the repayment of the Bonds.

Interest Account and Principal Account. Upon receipt of Special Taxes from the District for deposit in the Special Tax Fund, the principal of and interest due on the Bonds until maturity, other than principal due upon redemption, shall be paid by the Fiscal Agent from the Pri ncipal Account and the Interest Account of the Special Tax Fund, respectively. At least five Business Days pr ior to each March 1 and September 1, the Fiscal Agent shall make the following transfers from the Special Tax F und first to the Interest Account and then to the Principal Account; provided, however, that to the extent that d eposits have been made in the Interest Account or the Principal Account from the proceeds of the sale of an issue of the Bonds, or otherwise, the transfer from the Special Tax Fund need not be made; and provided, further, that, if amounts in the Special Tax Fund are inadequate to make the foregoing transfers, then any deficiency shall be made up by an immediate transfer from the Reserve Account:
(1) To the Interest Account, an amount such that the balance i n the Interest Account five Business Days prior to each Interest Payment Date shall be equal to the installment of interest due on the Bonds on said Interest Payment Date and any installment of interest due on a previous Interest Payment Date which remains unpaid. Moneys in the Interest Account shall be used f or the payment of interest on the Bonds as the same become due.
(2) To the Principal Account, an amount such that the balance i n the Principal Account five Business Days prior to September 1 of each year, commencing Sep tember 1, 2022 shall at least equal the principal payment due on the Bonds maturing on such September 1 and any principal payment due on a previous September 1 which remains unpaid. Moneys in the Princ ipal Account shall be used for the payment of the principal of such Bonds as the same become due at maturity.

Redemption Account. On each September 1 on which a Sinking Fund Payment is due, a fter the deposits have been made to the Interest Account and the Principal Accoun t of the Special Tax Fund, the Fiscal Agent shall next transfer into the Redemption Account of the Special Tax Fund from the Special Tax Fund the amount needed to make the balance in the Redemption Account five Busin ess Days prior to each September 1 equal to the Sinking Fund Payment due on any Outstanding Bonds on such S eptember 1; provided, however, that, if amounts in the Special Tax Fund are inadequate to make the fore going transfers, then any deficiency shall be made up by an immediate transfer from the Reserve Account. Mon eys so deposited in the Redemption Account shall be used and applied by the Fiscal Agent to call and redee m Term Bonds in accordance with the Sinking Fund Payment schedule set forth in the Fiscal Agent Agreement.

All prepayments of Special Taxes shall be deposited in the Rede mption Account to be used to redeem Bonds on the next date for which notice of redemption can timely be given.

Reserve Account. Moneys in the Reserve Account shall be used solely for the purp ose of paying the principal of, including Sinking Fund Payments, and interest on any Bonds when due in the event that the moneys in the Interest Account and the Principal Account of the Special Tax Fund are insufficient therefor or

13 moneys in the Redemption Account of the Special Tax Fund are in sufficient to make a Sinking Fund Payment when due. If the amounts in the Interest Account, the Principa l Account or the Redemption Account of the Special Tax Fund are insufficient to pay the principal of, incl uding Sinking Fund Payments, or interest on any Bonds when due, the Fiscal Agent shall withdraw from the Reserve Account for deposit in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund, as applicable, moneys necessary for such purposes.

Whenever moneys are withdrawn from the Reserve Account, after m aking the required transfers under the Fiscal Agent Agreement, the Fiscal Agent shall transfer to the Reserve Account from available moneys in the Special Tax Fund, or from any other legally available funds which the District elects to apply to such purpose, the amount needed to restore the amount of such Reserv e Account to the Reserve Requirement.

Moneys in the Special Tax Fund shall be deemed available for transfer to the Reserve Account only if the Fiscal Agent determines that such amounts will not be needed to make t he deposits required to be made to the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund. If amounts in the Special Tax Fund or otherwise transferred to replenish the Reserve Acco unt are inadequate to restore the Reserve Account to the Reserve Requirement, then the District shall inc lude the amount necessary to restore fully the Reserve Account to the Reserve Requirement in the next annual S pecial Tax levy to the extent of the maximum permitted Special Tax rates.

Prepayment of Special Taxes
Under the Rate and Method, the owner of a parcel may voluntarily prepay the Special Tax obligation for a parcel in whole or in part. Any voluntary prepayment of Spec ial Taxes will result in a special mandatory redemption of the Bonds. See “THE BONDS—Redemption—Special Man datory Redemption from Special Tax Prepayments” and “SPECIAL RISK FACTORS – Potential Early Re demption From Special Tax Prepayments.”
Covenant to Commence Foreclosure Proceedings
The District covenants in the Fiscal Agent Agreement that it wi ll determine or cause to be determined, no later than March 1 and August 1 of each year, whether or not any owners of the property within the District are delinquent in the payment of Special Taxes and, if such del inquencies exist, the District will order and cause to be commenced no later than A pril 15 (with respect to the Mar ch 1 determination date) or September 1 (with respect to the August 1 determination date), foreclosure procee dings and diligently prosecute, an action in the superior court to foreclose the lien of any Special Taxes or in stallment thereof not paid when due, provided, however, that the District sha ll not be required to order the c ommencement of foreclosure proceedings if (i) the total Special Tax delinquency in the District for such Fiscal Y ear is less than five percent (5%) of the total Special Tax levied in such Fiscal Year, (ii) the amount in the Reserve Account is equal to the Reserve Requirement, or (iii) the District shall have established from any source of lawfully available funds (other than Special Taxes) an escrow fund to provide for the payment of pri ncipal of and interest on the Bonds.

Notwithstanding the foregoing, if the District determines that any single property owner in the District is delinquent in excess of three thousand dollars ($3,000) in the payment of the Special Tax, then it will diligently institute, prosecute and pursue foreclosure proceedings against such property owner. Commencement of any judicial foreclosure proceedings includes the District’s efforts to collect the delinquent Special Taxes by sending subsequent notice of delinquency and a demand for immediate payment thereof.

There could be a default or a delay in payments to the owners o f the Bonds pending prosecution of foreclosure proceedings and receipt by the District of foreclos ure sale proceeds, if any, and subsequent transfer of those proceeds constituting Special Taxes to the Special Tax Fund.

Under the Act, the City has the power to use a foreclosure judg ment to purchase the subject property by credit bid at foreclosure sale, in which event the City would h ave no obligation to pay such credit bid for 24 months.

14 Notwithstanding any provision of the Act or other law of the St ate to the contrary, in connection with any foreclosure related to delinquent Special Taxes, the Fiscal Agent Agreement authorizes the District to do the following:
(1) The District may credit bid at any foreclosure sale, without an y requirement that funds be set aside in the amount so credit bid, in the amount specifi ed in the Act, or such lesser amount as provided in the Fiscal Agent Agreement or otherwise under the Act. (2) The District may use amounts in the Surplus Fund to pay costs o f foreclosure of delinquent Special Taxes in accordance with the Fiscal Agent Agreement.

IN THE EVENT FORECLOSURE OR FORECLOSURES ARE NECESSARY, THERE M AY BE A

DELAY IN PAYMENTS TO BOND OWNERS PENDING PROSECUTION OF THE FOR ECLOSURE

PROCEEDINGS AND RECEIPT BY THE DISTRICT OF THE PROCEEDS OF THE FORECLOSURE SALE; IT IS ALSO POSSIBLE THAT NO BID FOR THE PURCHASE PRICE OR APPLICABLE PROPERTY WOULD BE RECEIVED AT THE FORECLOSURE SALE. SEE “SPECI AL RISK FACTORS.”

NOTWITHSTANDING ANY OTHER PROVISION OF THE FISCAL AGENT AGREEME NT TO THE

CONTRARY, THE CITY IS NOT OBLIGATED TO ADVANCE AVAILABLE FUNDS FROM THE CITY

TREASURY TO CURE ANY DEFICIENCY IN THE SPECIAL TAX FUND ESTABLI SHED UNDER THE FISCAL AGENT AGREEMENT.

Issuance of Parity Bonds for Refunding Purposes Only
The District has covenanted in the Fiscal Agent Agreement that, except for refunding purposes, it will not issue bonds, notes or other forms of indebtedness payable f rom Special Taxes and other amounts deposited in the Special Tax Fund and secured by a lien and charge upon s uch amounts equal to the lien and charge securing the Outstanding Bonds.

Value-to-Lien Ratio
The Bonds are secured by Special Taxes which may include amount s realized upon foreclosure sale of delinquent parcels. Therefore, the ability of the District to meet debt service on the Bonds may depend on the ability of delinquent parcels to generate sufficient proceeds u pon foreclosure sale to pay delinquent Special Taxes.

The appraised value of the parcels within the District is $83,4 80,000, as of January 10, 2022, which is

17.05* times the aggregate principal amount of Bonds issued and 16.62 * times the aggregate total direct and overlapping debt within the Dis trict, including the Bonds, and overlapping general obligation debt. See “THE DISTRICT – Value-to-Lien Ratios” and “- Direct and Overlapping Debt and Other Obligations” herein. See also, “APPENDIX G – APPRAISAL REPORT.”
No Obligation of the City Upon Delinquency
The City is under no obligation to transfer any funds of the Ci ty into the Special Tax Fund or any other funds or accounts under the Fiscal Agent Agreement for the paym ent of the principal of or interest on the Bonds if a delinquency occurs in the payment of any Special Taxes.

Although the Act authorizes the District to cause a foreclosure action to be commenced and diligently prosecuted to completion, the Act does not impose on the Distri ct or the City any obligation to purchase or acquire any parcel of property sold at a foreclosure sale if th ere is no other purchaser at such sale.

Notwithstanding the above, the City does have the ability to us e the foreclosure judgment to purchase the

* Preliminary, subject to change.

15 property by credit bid at a foreclosure sale, in which case the City would have no obligation to pay such credit bid for 24 months.

Other Indebtedness and Obligations
At the December 10, 2019 election, the qualified electors autho rized the District to incur Bonds in an amount not to exceed $7,000,000. The District has covenanted i n the Fiscal Agent Agreement that, except for refunding purposes, it will not issue bonds, notes or other forms of indebtedness payable from Special Taxes and other amounts deposited in the Special Tax Fund and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds.

The properties in the District are subject to other existing au thorized indebtedness payable from taxes and assessments that may be levied. Existing authorized indebt edness is shown in Table __ under “THE DISTRICT – Direct and Overlapping Debt and Other Obligations” herein.

The properties within the District are subject to annual specia l taxes for services for the District (“Special Tax B”). For the 2020-21 Fiscal Year, the Special Ta x B was $300 per Residential Unit. Special Tax B shall be increased by the lesser of the percent change in the Consumer Price Index or three percent (3%) for each Fiscal Year after Fiscal Ye ar 2020-21. Undeveloped Propert y is not subject to Special Tax B. The Special Tax B is not pledged to the Bonds.

[The remainder of this page is intentionally left blank.]

16 BOUNDARY MAP

17 VICINITY MAP

18 THE DISTRICT
General
Description and Location . The District consists of the gated community known as “Foothi ll Grove” which is planned for 66 detached single-family homes and 118 at tached townhomes and features a pool, spa and playground. The residential neighborhood is on an approximatel y 16-acre site located in the west central portion of the City bordered by Foothill Boulevard, Spruce Aven ue, Grove Street and Larch Avenue. The gated community is about 2 miles south of the 210 Freeway and about 2½ miles north of the 10 Freeway.

Immediate Surroundings. Foothill Grove is located in an urban area along a major arteri al with a mix of commercial and residential uses, and also a significant amou nt of remaining vacant land. There are also residential neighborhoods in the surrounding area.

To the north, northwest and northeast are various neighborhoods of single-family homes. To the east, along the north side of Foothill Boulevard is vacant land that is zoned “Commercial Pedestrian” within the Foothill Boulevard Specific Plan. To the south is more vacant l and that sold in 2019 and is proposed for a 70- unit townhome project. At the corner of Foothill Boulevard and Spruce Avenue is the Foothill Village retail center. The tenants include various small retail, office and service commercial uses.

At the corner of Foothill Boulev ard and Larch Avenue the County occupies a single-story office building. Further west is Cedarhill Plaza, a recently built nei ghborhood retail center, anchored by Dollar Tree and including Starbucks and Arby’s drive-thrus. Farther east is more vacant land, a two-story office building and a 75-unit three-story senior affordable apartment complex. Across Larch Avenue a small retail center is nearing completion which will include a Circle K store, Mobil gas stati on, and a free-standing building with drive-thru to be occupied by Dunkin’ Donuts. A retail center is also locat ed at the corner of Foothill Boulevard and Cedar Avenue. It includes a Walgreens, in-line retail stores, restaur ants and office uses, and free-standing Wendy’s, El Pollo Loco and Waba Grill restaurants.

See APPENDIX A – “INFORMATION RELATING TO THE CITY OF RIALTO AN D SAN BERNARDINO COUNTY” for certain demographic information on the City and the County.

Property Ownership and Development Status
The following information regardi ng the ownership and planned d evelopment of the property in the District has been provided by the Developer for use in this Official Statement and has not been independently confirmed or verified by the District or the Underwriter. Neither the District nor the Underwriter makes any representation as to the accuracy or ad equacy of this information or the absence of any material change after the date of this Official Statement. There may be material adverse changes in this info rmation after the date of this Official Statement.

As the proposed land development progresses and homes a re sold, it is expected that the ownership of the land within the District will beco me more diversified. No assurance can be given that development of the land within the District will occur in the timeframe currently projected or in the configuration or intensity described herein, or that the Developer will or will not retain ownership of any of the land within the District.

The Bonds and the Special Taxes are not personal obligations of any landowners, including the Developer, and, in the event that a landowner defaults in the payment of the Special Taxes, the District may proceed with judicial foreclosure but has no direct recou rse to the assets of any landowner. As a result, other than as provided herein, no financial statements or info rmation is, or will be, provided about the Developer or any other landowners. The Bonds are secured solely by the Special Taxes and other amounts pledged under the Fiscal Agent Agreement. See “SECURITY FOR THE BONDS” and “SPECIAL RISK FACTORS” in this Official Statement.

19 Century Communities of California, LLC
As previously defined in this Official Statement, the “Developer” is Century Communities of California, LLC, a Delaware limited liability company. The Developer is a wholly-owned subsidiary of Century Communities, Inc., a Delaware corporation (“Parent Century Enti ty”), whose principal executive offices are located in Greenwood Village, Colorado. Parent Century Entity is a publicly traded company listed on the New York Stock Exchange under the tic ker symbol “CCS.” Such filing s set forth, among other things, certain data relative to the consolidated results of operations and financia l position of Parent Century Entity and its subsidiaries. Parent Century Entity files annual, quarterly an d current reports, proxy statements and other information with the Securities and Exchange Commission (the “S EC”). Parent Century Entity’s SEC filings are available to the public over the Internet at the SEC’s website at www.sec.gov, and at Parent Century Entity’s website at www.centurycommunities.com. The foregoing internet addresses are included for reference only and the information on the respective internet sites is not a part of this Official Statement and is not incorporated by reference into this Official Statement. No representation is m ade in this Official Statement as to the accuracy or adequacy of the information contained on the aforementioned internet sites.

Founded in 2002, Parent Century Entity is engaged in the develo pment, design, construction, marketing and sale of single-family attached and detached homes in 17 sta tes under the Century Communities and Century Complete brands. Many of their projects include the entitlement and development of the underlying land. Parent Century Entity’s Century Commun ities brand offers a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides homebuyers with the ability to personalize their homes through certain option and upgrade opportunities, w hile Century Complete brand targets entry-level homebuyers, primarily selling homes through retail studios and the internet, and generally provides no option or upgrade opportunities. Homebuilding operations are organized in to the following five reportable segments:

West, Mountain, Texas, Southeast, and Century Complete. Of the 10,805 homes delivered during 2021, approximately 75% of their deliveries were made to entry-level homebuyers and approximately 87% of homes delivered were built as move-in ready homes.

Development Plan
The Developer has built or is in the process of building 66 det ached single-family homes and 118 attached townhomes for a total of 184 homes on its property in the District in a single-neighborhood development known as Foothill Grove.

All 66 single-family detached homes are completed and owned by individuals. The sales of these 66 completed homes closed from January 28, 2021 through December 2 0, 2021 at sale prices ranging from $467,990 to $607,740.

As of March 7, 2022, individual homeowners owned 93 of the townhomes and the Developer owned the remaining 5 model townhomes a nd 20 townhomes under construction . The builder sales of the 93 completed townhomes to homeowners closed from March 24, 2021 through Febr uary 22, 2022 at prices ranging from $346,935 to $450,990. As of March 7, 2022, there are pending s ales on all 25 townhomes that are scheduled to close from June 30, 2022 through July 29, 2022 at prices ranging from $378,990 to $466,990.

The following table describes the development status as of March 7, 2022.

20 TABLE 1

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

DEVELOPMENT STATUS
(AS OF MARCH 7, 2022)
Plan
Square
Feet
Number
of Units
Units With
Closed
Escrows to
Individual
Homeowners
Completed
Units (Not
Closed)(1)
Units Under
Construction
Units in
Escrow with
Individual
Homeowners
Base Sales
Price(2)
SF Detached
Plan 1 1,698 4 4 0 0 0 Sold Out
Plan 2 2,275 18 18 0 0 0 Sold Out
Plan 3 2,371 19 19 0 0 0 Sold Out
Plan 4 2,389 25 25 0 0 0 Sold Out
Subtotal 6 6 6 6 0 0 0

Townhome
Plan 1 1,180 24 19 1 4 5 $397,990
Plan 2 1,375 24 19 1 4 5 $436,990
Plan 3 1,481 24 19 1 4 5 $466,990
Plan 4 1,575 34 36 2 8 10 $461,990
Subtotal 118 93 5 20 25
Totals 184 159 5 20 25

(1) Represents five model homes owned by the Developer. (2) Base sales prices are as of M arch 7, 2022 and do not include upgrades, premiums, etc.

Source: Century Communities of California, LLC.

As of March 7, 2022, of the 25 remaining townhomes and lots tha t had not been closed to homeowners, all 25 were under contract to be sold to individual homeowners. However, sales contracts are subject to cancellation and there can be no assurance that these sales will occur on time or at all.

The Developer anticipates completing the development and sale o f all homes within the Foothill Grove neighborhood by the end of July 2022.

Required Infrastructure. All backbone infrastructure required to build-out all 184 lots has been completed, with internal streets complete and utilities stubbed to each lot. As of March 7, 2022, the remaining land development costs of approximately $158,000 relate to landscaping, perimeter walls, and bond exoneration.

All development impact fees have been paid..

Entitlement Status. Other than certificates of occupancy and other permits required in the normal course of home construction, all discretionary entitlements req uired to complete the development and sales of homes in the District have been received.

Based on the Initial Study by LSA Associates, Inc. (Environment al Assessment Review No. 2018- 0017), it was determined that the Foothill Grove project would not have an adverse impact on the environment and a Mitigated Negative Declara tion was prepared. Subsequently , in response to a comment from the South Coast Air Quality Management District, LSA Associates, Inc. pre pared a response that was accepted to be adequate. All appeal periods with respect to such approvals have expired.

21 Conditions of Approval. All conditions of approval required for the issuance of buildin g permits within the project have been satisfied, and none of the remaining infr astructure improvements are required to be completed as a condition of receiving building or occupancy permits.

Except as described in this Offici al Statement and except for t hose consents, permits, authorizations, certifications and approvals of governmental entities required in the ordinary course of development, the Developer has no actual knowledge of any impediment to construc tion or obtaining land use entitlements which could be reasonably expected to ha ve a material adverse effect on its ability to complete the planned development of its property within the District as described in the Official Statement.

Financing Plan. As of March 7, 2022, the Develope r had expended approximately $ 54.6 million in land acquisition, improvements, home construction costs, and ot her development costs (excluding interest) related to the Foothill Grove project. As of March 7, 2022, th e Developer anticipates expending an additional approximately $2.2 million in development, construction, and marketing costs for the Foothill Grove project.

To date, the Developer has financed its land acquisition, site development and home construction costs related to its property in the through internally generated fun ds. The Developer believes that such funding sources will be sufficient to complete its proposed development in the District as described herein. No assurance can be given that amounts necessary to fund the remai ning planned development of the Developer’s property within the District 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 t he development of the Developer’s property in the District. 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 aforementione d sources are inadequate to pay the costs to complete the Developer’s planned development within the District, the remaining portions of such development may not be completed.

Although the Developer expects to have sufficient funds availab le to complete its p lanned development in the District commensurate with the development timing descri bed in this Official Statement, there can be no assurance that amounts necessary to finance the remaining devel opment and home construction costs will be available from the Developer or any other source when needed. Neither the Developer, nor any of its related entities are under any legal obligation of any kind to expend f unds for the development of and construction of homes on its property in the District, or the payment of ad valorem property taxes or the Special Taxes. Any contributions by the Developer to fund the costs of such development are entirely voluntary.

If and to the extent that internal funding, including but not l imited to home sales revenues, are inadequate to pay the costs to complete the planned development by the Developer within the District and other financing by the Developer is not put into place, there could b e a shortfall in the funds required to complete the planned development by the Devel oper in the District, and the r emaining portions of the Developer’s project in the District may not be completed.

Rate and Method of Apportionment of Special Taxes
The following is a synopsis of the provisions of th e Rate and Method. This synopsis does not purport to be comprehensive and should be read in conjunction with the complete text of the Rate and Method, including its attachments, which is attached hereto as “APPEND IX D – Rate and Method of Apportionment of Special Tax.” All capitalized terms not defined in this section have the meanings set forth in APPENDIX D.

Each Fiscal Year, each Assessor’ s Parcel within the boundaries of the District shall be classified as Taxable Property or Exempt Property. In addition, all Taxable P roperty within the District shall be classified as Developed Property, Undeveloped Property or Provisional Propert y, and all such Taxable Property shall be subject to the levy of Special Taxes in accordance with the Rat e and Method of Apportionment. Furthermore, each Assessor’s Parcel of Developed Property shall be classifie d according to its applicable Land Use Class based on Land Use Type and Building Square Footage.

22 For each Fiscal Year, the CFD Administrator shall calculate the Special Tax Requirement for Facilities and levy Special Tax A on all Taxable Property in accordance with the following steps:

Step 1: The Special Tax A shall be levied Proportionately on al l Assessor’s Parcels of Developed Property up to 100% of the applicable Assigned Special Tax A to s a t i s f y t h e S p e c i a l T a x R e q u i r e m e n t f o r Facilities;
Step 2: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after Step 1 has been completed, the Special Tax A shall be levied Proportio nately on all Assessor’s Parcels of Undeveloped Property up to 100% of the Maximum Special Tax A for Undeveloped Property; Step 3: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the Special Tax A amo unt determined in Step 1 shall be increased Proportionately on all Assessor’s Parcels of Developed Property up to 100% of the Maximum Special Tax A for Developed Property; and
Step 4: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax A s hall be levied Proportionately on all Assessor’s Parcels of Provisional Property up to 100% of the Maximum Special Tax A for Provisional Property.

In the event Building Permits have been issued prior to May 1 st of the previous Fiscal Year for one or more Residential Units on a single Assessor’s Parcel causing su ch Assessor’s Parcel to be classified as Developed Property, and the County has not yet assigned final A ssessor’s Parcel Number(s) to such Residential Unit(s) in accordance with the F inal Map applicable to such Ass essor’s Parcel, then the amount of the Special Tax A levy on such Assessor’s Parcel shall be determined as fol lows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax A for such Asses sor’s Parcel, based on the classification of such Assessor’s Parcel as Undeveloped Property; (2) the amount o f t h e S p e c i a l T a x A a n d l e v y f o r t h e Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Assigned Special Tax A for Developed Property, and such amount shall be levied as Developed Property in accordance with Step 1 above; and (3) the amount of the Special Tax A on the Taxable Property in such Assessor’s Parcel not subject to the Special Tax A levy in clause (2) shall be equal to (A) the percentage of the Maximum Special Tax A rate l evied on all other Undeveloped Property pursuant to Step 2 above multiplied by the total of the amount determined in clause (1), less (B) the amount determined in clause (2).

Notwithstanding the above, under no circumstances will the Spec ial Tax levied against any Assessor’s Parcel of Developed Property for which an occupancy permit for private residential u se has been issued be increased by more than ten percent as a consequence of delinque ncy or default by the owner of any other Assessor’s Parcel within the District.

Special Tax A shall be levied for a period not to exceed forty- five (45) Fiscal Years commencing with Fiscal Year 2020-2021, provided however that the Special Tax A may cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined that all required interest and principal payments on Outstanding Bonds have been paid.

23 TABLE 2

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

ASSIGNED SPECIAL TAXES
Land Use Residential Floor Area
No. of
Units
Fiscal Year 2022-
23 Assigned
Special Tax Per
Unit
Projected Fiscal
Year 2022-23
Special Tax Per
Unit
Total Projected
Fiscal Year
2022-23 Special
Tax Levy(1)
Percent
of Total
Attached Residential Property Less than 1,101 sq. ft. 0 $1,343 $ 0 $0 0.00% Attached Residential Property 1,10 1 sq. ft. to 1,250 sq. ft. 24 1,419 1,211 $29,072 11.59% Attached Residential Property 1,25 1 sq. ft. to 1,400 sq. ft. 24 1,489 1,271 $30,500 12.16% Attached Residential Property 1,40 1 sq. ft. to 1,550 sq. ft. 24 1,586 1,353 $32,482 12.95% Attached Residential Property Greater than 1,550 sq. ft. 46 1,6 07 1,372 $63,115 25.17%

Detached Residential Property Le ss than 1,501 sq. ft. 0 1,325 0 $0 0.00% Detached Residential Property 1,5 01 sq. ft. to 1,650 sq. ft. 0 1,399 0 $0 0.00% Detached Residential Property 1,6 51 sq. ft. to 1,800 sq. ft. 4 1,450 1,238 $4,952 1.97% Detached Residential Property 1,8 01 sq. ft. to 1,950 sq. ft. 0 1,500 0 $0 0.00% Detached Residential Property 1,9 51 sq. ft. to 2,100 sq. ft. 0 1,574 0 $0 0.00% Detached Residential Property 2,1 01 sq. ft. to 2,250 sq. ft. 0 1,674 0 $0 0.00% Detached Residential Property 2,251 sq. ft. to 2,400 sq. ft. 62 1,712 1,462 $90,629 36.14% Detached Residential Property Greater than 2,400 sq. ft. 0 1,77 7 0 $0 0.00% Totals 184 $250,750 100.00%
(1) Based upon the debt service requirement of the Bonds and includes $30,600 in estimated FY 2022-23 priority administration. ______________________
Source: Webb Municipal Finance, LLC

Special Tax Levies and Delinquencies
Beginning in fiscal year 2021-22, the Special Tax was levied on properties within the District.

The following table shows the amount of the Special Tax levy in fiscal year 2021-22 and the associated delinquencies.

TABLE 3

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

SPECIAL TAX LEVIES, DELINQUENCIES, AND DELINQUENCY RATES Delinquencies at Fiscal Year End Delinquencies as of December 10, 2021 Fiscal
Year
Amount
Levied
Parcels
Levied
Lots
Levied Parcels Lots Amount Percent Pa rcels Lots Amount Percent 2021-22(1) $115,191.66 29 (2) 146 N/A N/A N/A N/A 1 1 $839.46 0.73%

(1) Amount levied for FY 2021-22 includes first installment, due December 10, 2021, only. (2) For FY 2021-22, 146 Residential Units were considered to be Developed per the Rate and Method. The Special Tax for the 146 individual Residential Units was assessed on 29 valid FY 2021-22 Assessor Parcels per San Bernardino County. _____________________
Source: Webb Municipal Finance, LLC

Estimated Maximum Special Tax Proceeds and Debt Service Coverage The Rate and Method is structured to produce Special Tax revenu es from the Assigned Special Tax A, which, when applied to the projected debt service on the Bonds, is anticipated to result in a debt service coverage ratio of at least 110% for the anticipated lif e of the Bonds. The following table shows the estimated debt service coverage for the Bonds for Fiscal Year 2022-23.

TABLE 4

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

ESTIMATED DEBT SERVICE COVERAGE
Bond Year
Ending
(September 1)
Maximum
Facilities
Special Tax
Less: Priority
Administrative
Net Maximum
Facilities
Special Tax
Est. Bonds
Debt Service
Coverage
from Net
Maximum
Special Tax
from All
Property(1)
2023 $342,822 ($30,600) $312,222 $220,150 141.82%
_____________
Source: Webb Municipal Finance, LLC and estimated Bonds debt service provided by Piper Sandler & Co. (1) Coverage has been calculated based on net maximum special taxes. The actual special tax levy for FY 2022/23 will be calculated based on 2022 debt service and Administrative Expenses.

25 Pursuant to Section 53321(d) of the Act, the special tax levied against any assessor’s parcel for which an occupancy permit for private residential use has been issued shall not be increased as a consequence of delinquency or default by the owner of any other assessor’s parcel within the district by more than 10% above the amounts that would have been levied in that fiscal year had there never been any such delinquencies or defaults. As a result, it is possibl e that the District may not be able to increase the tax levy to the Assigned Special Tax in all years. However , subject to the limitations on the District’s ability to levy the necessary amount of Special Taxes as impose d by Section 53321(d) of the Act, the District can levy Special Taxes on Undeveloped Property to make up all or a portion of such shortfall.

Appraised Property Value
The information below is only a summary of certai n information contained in the Appraisal. The Appraisal is reprinted herein as Appendix G. The information below is qualified in its entirety by the complete Appraisal. The District makes no represen tation as to the accuracy or completeness of the Appraisal.

The Appraisal . The Bonds are secured by Special Taxes which may include amou nts realized upon foreclosure sale of delinquent parcels. Therefore, the ab ility of the District to meet debt service on the Bonds may depend on the ability of delinquent parcels to ge nerate sufficient proceeds upon foreclosure sale to pay delinquent Special Taxes. The City com missioned Stephen G. White, MAI, Fullerton, California (the “Appraiser”) to ascertain the “as is” market value of the fee simple estate for the taxable property in the District. As of the date of value for the Appraisal (January 10, 2022) 66 single- family homes were owned by individual homeowners, 85 townhomes were owned by individual homeowners, 5 model townhomes wer e owned by the Developer, and 28 townhomes were under construction and owned by the D eveloper (8 of which were approx imately 90% complete and 20 were in the early stage of construction). The Appraiser estimated that, as of the January 10, 2022 date of value of the Appraisal, the “as is” market value of the fee simple estate (subject to the lien of the Special Taxes) of all the taxable land and improvements within the District was $83,480,000, which is approximately 17.05* times the aggregate principal amount of the Bonds. Below is a table summarizing the components of the market value of the taxable property within the District as detailed in the Appraisal.

TABLE 5

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

APPRAISAL VALUE SUMMARY
Product Type No. of Lots Market Value
Foothill Grove - Single-Family Detached
Individual Owners (completed - closed homes) 66 $37,950,000 Foothill Grove – Townhomes
Individual Owners (completed - closed homes) 85 $38,250,000 Builder Ownership (completed – unclosed homes) 5 1,900,000 Builder Ownership (under construction) 28 5,380,000 Townhome Totals 118 $45,530,000
TOTAL 184 $83,480,000

* Preliminary, subject to change.

26 _____________
Source: Appraisal Report.

An updated Appraisal has not been requested by the City or the District or completed by the Appraiser since the original date of value. On the date of issuance of the Bonds, the Appraiser will certify that he is not aware of any event or act that occurred since th e date of value of the Appraisal which, in the opinion of the Appraiser, would materially and adversely affect the conclusions in the Appraisal as to the market value of the appraised property. However, the Appraiser has not performed additional research or valuation analysis specific to t he subject property since the d ate of the Appraisal. The Appraisal’s value estimates reflect certain assumptions set forth in the Appraisa l including that all costs reported by the Developer are accurate, including but not limited to the remain ing impact fees and lot costs. Any variance in costs could impact the value conclusions reported i n t h i s a p p r a i s a l r e p o r t . F o r a f u l l description of the assumptions relied upon by the Appraiser, as well as a description of the valuation methodology, see APPENDIX G – “APPRAISAL REPORT.” The Appraisal was prepared in accordance with and subject to the requirements of The Appraisal Standards for Land Secured Financing as published by the California Debt and Investment Advisory Commission, the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation, and the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal I nstitute. See APPENDIX G – “APPRAISAL REPORT.”
Appraised Value-to-Lien Ratio
The tables below shows the projected aggregate value to burden ratio for the 184 lots that were the subject of the Appraisal based on the appraised values set forth in the Appraisal and the principal amount of the Bonds. The following value-to-lien ratios only re present estimated averages for the property within the District. No assurance can be given that the amounts shown in this table will conform to those ultimately realized in the event of a foreclosure acti on following delinquency in the payment of the Special Taxes.

[Remainder of Page Intentionally Left Blank]

TABLE 6

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

APPRAISED VALUE-TO-LIEN RATIOS BY PROPERTY OWNER
(As of January 10, 2022)

Property Owner(1)
# of
Lots
Maximum
Special Tax
Percentage
of
Maximum
Special
Tax
Projected
Fiscal Year
2022-23
Special Tax
Levy (2)
Percentage
of Total
Fiscal Year
2022-23
Special Tax
Levy
Total
Appraised
Value

Bonds
* (3)
Aggregate
Value- to-
Lien
Ratio*
Developed – Century Communities of
California, LLC
33 $ 55,585 16.23% $43,314 17.27% $ 7,280,000 $ 845,548 8.61:1 Developed – Individual Homeowners 151 286,822 83.77 207,436 82.73 76,200,000 4,049,452 18.82:1 TOTAL 184 $342,407 100.00% $250,750 100.00% $83,480,0000 $4,895,000 17.05:1

______________________________________
Source: Webb Municipal Finance, LLC.

(1) Based upon ownership information and development status as of January 10, 2022. . (2) Based upon the debt service requirement of the Bonds and includes estimated Fiscal Year 2022-23 Administrative Expense Requirement of $30,600. (3) Allocated based on the projected Fiscal Year 2022-23 Special Tax Levy.

* Preliminary, subject to change.

28 TABLE 7

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

VALUE-TO-LIEN STRATIFICATION
(As of January 10, 2022)

Estimated Appraised
Value-to-Lien Ratio Range(1)

No. of
Lots
Percent of
Total Lots
Total
Appraised
Value
Percent of
Total
Appraised
Value
Projected
Fiscal Year
2022-23 Levy(2)
Percent of Total
Projected Fiscal
Year 2022-23
Levy Bonds*
Estimated
Aggregate
Value-to-Lien
Ratio*
Less than 6.00:1(3) 12 6.52% $ 1,860,000 2.23% $ 16,390 6.54% $ 319,960 5. 81:1 Between 6.00:1 - 9.99:1 8 4.35 1,240,000 1.49 9,929 3.96 193,82 1 6.40:1 Between 10.00:1 - 13.99:1 8 4.35 2,280,000 2.73 10,415 4.15 203 ,321 11.21:1 Between 14.00:1 - 17.99:1 56 30.43 24,850,000 29.77 76,238 30.4 0 1,488,277 16.70:1 Between 18.00:1 - 21.99:1 96 52.17 50,950,000 61.03 132,826 52. 97 2,592,952 19.65:1

22.00:1 or greater(4) 4 2.17 2,300,000 2.76 4,952 1.97 96,668 23.79:1 TOTAL 184 100.00% $83,480,000 100.00% $250,750 100.00% $4,895,000 17. 05:1 ______________________________________
Source: Webb Municipal Finance, LLC.

(1) Value-to-Lien Ratios based upon principal amount of the Bond s . . (2) Based upon the debt service requirement of the Bonds and includes $30,600 in estimated FY 2022-23 priority administration.. (3) Minimum estimated Value-to-Lien is 5.79:1.
(4) Maximum estimated Value-to-Lien is 23.79:1.

* Preliminary, subject to change.

29 Direct and Overlapping Governmental Obligations
Properties in the District are within the jurisdiction of a num ber of overlapping local agencies providing public services and assessing property taxes, assessments, spec ial taxes and other charges on the property in the District. Many of these local agencies have outstanding debt. The following table details the direct and overlapping debt currently encumbering property within the District.

TABLE 8

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

DETAILED DIRECT AND OVERLAPPING DEBT
APPRAISED VALUE
Appraised Valuation (1) $83,480,000
LAND SECURED BOND INDEBTEDNESS
Outstanding Direct and Overlapping Bonded Debt Parcels in Amount Type CFD 2019‐2 Issued Outstanding % Applicable Applicable CFD No. 2019‐2 CFD 184 $4,895,000 $4,895,000 (2) 100.00% $4,895,000 TOTAL LAND SECURED BONDED DEBT(3) $4,895,000
Authorized and Unissued Direct and Overlapping Bonded Debt Parce ls in Amount Type CFD 2019‐2 Authorized Unissued % Applicable Applicable CFD No. 2019‐2 CFD 184 $7,000,000 $0 (4) 100.00% $0
TOTAL UNISSUED LAND SECURED INDEBTEDNESS(3) $0
TOTAL OUTSTANDING AND UNISSUED LAND SECURED INDEBTEDNESS $4,895,000 GENERAL OBLIGATION BOND INDEBTEDNESS
Outstanding Direct and Overlapping Bonded Debt Parcels in Amount Type CFD 2019‐2 Issued Outstanding % Applicable(5) Applicable San Bernardino Community College (0.05340%) GO 184 $785,849,147 $86 7,860,518 0.00477% $41,406 Rialto Unified School District (0.08290%) GO 184 $157,993,875 $136, 413,736 0.06319% $86,200 TOTAL GENERAL OBLIGATION BONDED DEBT(3) $127,606
Authorized and Unissued Direct and Overlapping Indebtedness Parc els in Amount Type CFD 2019‐2 Authorized Unissued % Applicable(5) Applicable San Bernardino Community College (0.05340%) GO 184 $1,160,000,000 $ 374,150,853 0.00477% $17,851 Rialto Unified School District (0.08290%) GO 184 $158,000,000 $6,12 5 0.06319% $4 TOTAL UNISSUED GENERAL OBLIGATION INDEBTEDNESS(3) $17,855 TOTAL OUTSTANDING AND UNISSUED GENERAL OBLIGATION INDEBTEDNESS $145,461 TOTAL OF ALL OUTSTANDING DIRECT AND OVERLAPPING BONDED DEBT $5,022,606 TOTAL OF ALL OUTSTANDING AND UNISSUED DIRECT AND OVERLAPPING INDEBTEDNESS $5,040,461 IV.     Ratios to Appraised Valuation
Outstanding Land Secured Bonded Debt 17.05:1
Total Outstanding Direct and Overlapping Bonded Debt 16.62:1 (1) Appraised Valuation is as of January 10, 2022.
(2) Amount outstanding is equal to the principal amount of the 202 2 Bonds. (3) Additional bonded debt or available bond authorization may exis t but is not shown because a tax  was not levied for Fiscal Year  2021‐2022. (4) Additional bonds may be issued for refunding purposes only. (5) Percentage applicable determined by Fiscal Year 2021‐2022 Equal ized Roll Assessed Value information. ______________________
Source:  Webb Municipal Finance, LLC

30 In addition to the bonded indebtedness set forth in Table 8, an y general obligation bonds currently authorized but not issued within the District will likely be is sued and new general obligation bonds may be authorized at future elections. New community facilities distr icts or special assessment districts may be formed which include all or a portion of the District, resulting in th e issuance of more bonds and the levy of additional special taxes or other taxes and assessments on parcels within the District. In addition to the Special Taxes, the property owners in the District will be required to pay the gen eral ad valorem property taxes for their parcels.

See “SPECIAL RISK FACTORS—Parity Taxes and Special Assessments” and “—Appraised Valuations; Value-to-Lien Ratios.”
Estimated Tax Burden
The following table sets forth the estimated total tax burden on the average Fiscal Year 2022-23 tax levy for individually owned lots of de veloped property in the Distri ct, based on estimated tax rates for Fiscal Year 2022-23.

TABLE 9

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(FOOTHILL/SPRUCE)

AVERAGE FISCAL YEAR 2022-23 TAX OBLIGATION(1)

FOR INDIVIDUALLY OWNED PARCELS OF DEVELOPED PROPERTY

Average Projected Home Value(2) $504,636
Ad Valorem Property Taxes:

Basic Levy (1.0000%) $5,046.36
San Bernardino Community College (0.05340%) $269.48
Rialto Unified School District (0.08290%) $418.34
San Bernardino Valley Municipal Water (0.13000%) $656.03 Total General Property Taxes $6,390.20
Assessment, Special Taxes & Parcel Charges:

Rialto LLMD 2 $344.76
Rialto Vector Control $1.30
Rialto SLD 1 $4.39
Rialto CFD 2019-2 Services(3) $314.77
Rialto CFD 2019-2 Facilities(4) $1,373.75
Total Assessment Charges $2,038.97
Average Total Property Tax $8,429.18
Average Effective Tax Rate 1.67%
______________________________________
Source: Webb Municipal Finance, LLC.
(1) Average FY 2022-23 tax rates based upon FY 2021-22 overlapping taxes and assessments. (2) Average Projected Home Value is based upon average appraise d value for Developed Property indicated as being conveyed to individual homeowners.
(3) Reflects average projected FY 2022-23 Rialto CFD 2019-2 ser vices special tax for Developed Property indicated as being conveyed to individual homeowners.
(4) Reflects average projected FY 2022-23 Rialto CFD 2019-2 fac ilities special tax for Developed Property indicated as being conveyed to individual homeowners.

31 SPECIAL RISK FACTORS
The purchase of the Bonds invol ves significant investment risks and, therefore, the Bonds may not be 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 herein, in evaluating the investment quality of the Bonds. This discussion does not purport to be comprehensive or defin itive. The occurrence of one or more of the events discussed herein could adversely affect the ability or willi ngness of property owners in the District to pay their Special Taxes when due. Such failures to pay Special Taxes could result in the inability of the District to make full and punctual payments of debt service on the Bonds. In addition, the occurrence of one or more of the events discussed herein could adversely a ffect the value of the property in the District. See “SPECIAL RISK FACTORS — Property Values; Value-to-Lien Ratio s” and “— Limited Secondary Market” below.

Risks of Real Estate Secured Investments Generally
The Owners of the Bonds will be subject to the risks generally incident to an investment secured by real estate, including, without limitation, (i) adverse changes in l ocal market conditions, such as changes in the market value of real property in the vicinity of the District, the supply of or demand for competitive properties in such area, and the market value of residential property or comm ercial buildings and/or sites in the event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, governmental rules (including, without limitation, zoning laws a nd laws relating to endangered species and hazardous materials) and fiscal policies; (iii) natural disasters (including, without limitatio n, earthquakes, wildfires and floods), which may result in uninsured losses; (iv) adverse changes in local marke t conditions; and (v) increased delinquencies due to rising mortgage costs and other factors.

Other factors that could adversely affect property values in the District include, among others, relocation of employers out of the area, shortages of water, electricity, natural gas or other utilities, and destruction of property caused by man-made disasters.

Limited Obligations
The Bonds and interest thereon are not payable from the general funds of the City. Except with respect to the Special Taxes, neither the credit nor the taxing power of the District or the City is pledged for the payment of the Bonds or the interest thereon, and, except as provided i n the Fiscal Agent Agreement, no Owner of the Bonds may compel the exercise of any taxing power by the District or the City or force the forfeiture of any City or District property. The principal of, premium, if any, and i nterest on the Bonds are not a debt of the City or a legal or equitable pledge, char ge, lien or encumbrance upon any of the City’s or the District’s property or upon any of the City’s or the Distric t’s income, receipts or revenue s, except the Special Taxes and other amounts pledged under the Fiscal Agent Agreement.

Insufficiency of Special Taxes
Given limitations in the Act regarding increases in Special Tax es on residential parcels to address Special Tax delinquencies, the potential coverage to respond to delinquencies is approximately 110% of Annual Debt Service. Notwithstanding that the maximum Special Taxes t hat may be levied in the District exceeds debt service due on the Bonds, the Sp ecial Taxes collected could be inadequate to make timely payment of debt service either because of nonpayment or because property becomes exempt from taxation.

If for any reason property within the District becomes exempt f rom taxation by reason of ownership by a non-taxable entity such as the federal government, another pu blic agency or other organization determined to be exempt, subject to the limitations of the maximum authorized rates, the Special Tax will be reallocated to the remaining taxable properties within the District. This could result in certain owners of property paying a greater amount of the Special Tax and could have an adverse impact upon the ability and willingness of the owners of such property to pay the Special Tax when due.

32 The Act provides that, if any property within the District not otherwise exempt from the Special Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax will continue to be levied on and enforceable against the public entity that acq uired the property. In addition, the Act provides that, if property subject to the Special Tax is acquired by a p ublic entity through emin ent domain proceedings, the obligation to pay the Special Tax with respect to that prop erty is to be treated as if it were a special assessment and be paid from the eminent domain award. The cons titutionality and operation of these provisions of the Act have not been tested in the courts. Due to problems of collecting taxes from public agencies, if a substantial portion of land within the District became exempt from the Special Tax because of public ownership, or otherwise, the Maximum Special Taxes which could be levied upon the remaining property within those areas might not be sufficient to pay principal of and interest on the Bonds when due and a default could occur with respect to the payment of such principal and interest.

Moreover, if a substantial portion of land within the District became exempt from the Special Tax because of public ownership, or otherwise, the maximum Special Tax which could be levied upon the remaining property within the District might not be sufficient to pay principal of and interest on the Bonds when due and a default could occur with respect to the payment of such principal and interest.

Depletion of Reserve Account
The Reserve Account is maintained in an amount equal to the Res erve Requirement. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — Reserve Account of the Special Tax Fund.” Funds in a Reserve Account may be used to pay principal of and interest on the Bonds in the event the proceeds of the levy and the collection of the Special Taxes against the property in the District is not sufficient. If the Reserve Account is depleted, the funds can be replenished from the proc eeds of the levy and collection of the Special Tax that are in excess of the amount required to pay Administra tive Expenses and principal and interest on the Bonds. However, no replenishment of the Reserve Account from the proceeds of the Special Taxes can occur as long as the proceeds that are collected from the levy of the Sp ecial Taxes at the maximum tax rates (subject to the limitations of the Act), together with available funds, rem ain insufficient to pay all such amounts. Thus, it is possible that the Reserve Account will be depleted and not replenished by the levy of the Special Taxes.

Risk of Structural or Wildland Fires
The District is not located in an area of increased risk for ut ility associated wildfires pursuant to the California Public Utilities Commission Fire-Threat Map. The Di strict is located in a ____ Fire Hazard Severity Zone, as is a majority of land within the City limits. The Dis trict and the surrounding area are not considered any more at risk that the rest o f the City. Fire hazards incre ase with any drought period, and are highest for structures at the fringe of forested or wildland areas. In addi tion to the damage caused directly by a foothill fire, further damage may be caused by resulting mudslides during subs equent rains. [The City has adopted programs directed at wildland fire prevention, including adoption of the State Fire Code standards for new development in hazardous fire areas. Fire prevention requirements include prov ision of access roads, adequate road width, and clearance of brush around structures located in hillside areas. Additionally, proof of adequate water supply for fire flow is required within a designated distance for new construction in fire hazard areas.] In the event of damage to real p roperty within the District, th e property owner could become unwilling or unable to pay the Special Taxes when due.

Natural Disasters
The District, like all California communities, may be subject t o unpredictable seismic activity, fires, flood, or other natural disasters. Southern California is a se ismically active area. Seismic activity, wildfires and other natural disasters represents a potential risk for damage to buildings, roads, bridges, and property within the District. In addition, land susceptible to seismic activity ma y be subject to liquefaction during the occurrence of such event.

33 In the event of a severe earthquake, fire, flood or other natur al disaster, there may be significant damage to both property and infrastructure in the District. As a resu lt, a substantial portion of the property owners may be unable or unwilling to pay the Special Taxes when due. In a ddition, the value of land in the District could be diminished in the aftermath of such a natural disaster, reducin g the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Special Taxes.

Active or potential active faults have not been mapped within t he District. The District is not located in a designated Alquist-Priolo Earthquake Fault Zone, and the near est active zone is the San Jacinto fault which is approximately 2.3 miles to the northeast. In addition, the subj ect site is located in an area identified as having low liquefaction susceptibility.

The District is located in Zone X of FEMA Flood Zone designatio ns which indicates areas that are determined to be outside of the 100- and 500-year floodplains and out of a Special Flood Hazard Area.

No assurance can be given that there will be no natural disaste rs in the future that will impact the District or to the extent to which any future natural disasters may impact the property in the District.

Hazardous Substances
The presence of hazardous substances on a parcel may result in a reduction in the value of a parcel. In general, the owners and operators of a parcel may be required b y law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. Th e Federal Comprehensive Environmental Response, Compensation and Liab ility Act of 1980, sometimes ref erred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these law s, but California laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner or operator is obligated to remedy a hazardous substance condition of property whether or n ot the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the taxed parcels be affected by a hazardous substance, is to reduce the marketabili ty and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming o wner, will become obligated to remedy the condition just as is the seller.

Further, it is possible that liabilities may arise in the futur e with respect to any of the parcels resulting from the existence, currently, on the parcel of a substance pre sently classified as hazardous but which has not been released or the release of which is not presently threaten ed, or may arise in the future resulting from the existence, currently on the parcel of a substance not presently classified as hazardous but which may in the future be so classified. Furth er, such liabilities may arise n ot simply from the existence of a hazardous substance but from the method of handling it. All of these pos sibilities could significantly affect the value of a parcel that is realizable upon a delinquency.

Parity Taxes and Special Assessments
Property within the District is subject to taxes and assessment s imposed by public agencies also having jurisdiction over the land within the District. See “THE DISTR ICT —Direct and Overlapping Governmental Obligations.”
The Special Taxes and any penalties thereon will constitute a l ien against the lots and parcels of land on which they will be annually imposed until they are paid. Such l ien is on a parity with all special taxes and special assessments levied by the City and other agencies and i s co-equal to and independent of the lien for general property taxes regardless of when they are imposed upon the same property. The Special Taxes have priority over all existing and fu ture private liens imposed on the property except, possibly, for liens or security interests held by the Federal Deposit Insurance Corporation. S ee “SPECIAL RISK FACTORS — Bankruptcy and Foreclosure” below.

34 Developed Property within the D istrict is also subject to annua l Special Tax B. For the 2020-21 Fiscal Year, the Special Tax B was $300 per Residential Unit. Special Tax B shall be increased by the lesser of the percent change in the Consumer Price Index or three percent (3% ) for each Fiscal Year after Fiscal Year 2020-

21. See “THE DISTRICT - Direct and Overlapping Debt Governmental Obligations.” Neither the City nor the District has control over the ability of other entities and districts to issue indebtedness secured by special taxes, ad valorem taxes or assessments payable from all or a portion of the property within the District. In addition, the landowners with in the District may, without the consent or knowledge of the City, petition other public agencies to issue public indebtedness secured by special taxes, ad valorem taxes or assessments. Any such special taxes, ad valorem taxes or assessments may have a lien on such property on a parity with the Special Taxes and could r educe the estimated value-to-lien ratios for property within the District described herein.

Disclosures to Future Purchasers
The willingness or ability of an owner of a parcel to pay the S pecial Tax, even if the value of the parcel is sufficient, may be affected by whether or not the owner was given due notice of the Special Tax authorization at the time the owner purchased the parcel, was informed of the amount of the Special Tax on the parcel should the Special Tax be levied at the maximum tax rate and the risk of such a levy, and, at the time of such a levy, has the ability to pay it as well as pay other expenses and obligat ions. The City caused Notices of Special Tax lien to be recorded in the Office of the Recorder for the County aga inst each parcel. While title companies normally refer to such notices in title reports, there can be no guarant ee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Special Ta x obligation in the purchase of a property within the District or lending of money thereon.

The Act requires the subdivider (or its agent or representative ) of a subdivision to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subje ct to a Mello-Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section 1102.6b requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with th e above requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of th e Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax when due.

Special Tax Delinquencies
Special Taxes are the primary source for the repayment of the Bonds, and delinquencies could result in a draw on the Reserve Fund and, if the Reserve Fund were to be depleted, in a default in payment on the Bonds.

Under provisions of the Act, the Special Taxes, from which fund s necessary for the payment of principal of, and interest on, the Bonds are derived, are customarily billed to the properties within the District on the ad valorem property tax bills sent to owners of such properties. The Act currently provides that such Special Tax installments are due and paya ble and are subject to the sam e lien priority in the case of delinquency as are ad valorem property tax installments.

See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — Special Ta xes — Proceeds of Foreclosure Sales ,” for a discussion of the provisions which apply, and procedur es which the District is obligated to follow under the Fiscal Agent Agreement, in the ev ent of delinquencies in the payment of Special Taxes. See “THE DISTRICT—Delinquency History” for a history of Special Tax delinquency rates in the D i s t r i c t . S e e “SPECIAL RISK FACTORS — Bankruptcy and Foreclosure” below, for a discussion of the policy of the Federal Deposit Insurance Corporation regarding t he payment of special taxes and assessments and limitations on the District’s ability to foreclose on the lien of the Special Taxes in certain circumstances.

35 Non-Cash Payments of Special Taxes
Under the Act, the City Council as the legislative body of the District may reserve to itself the right and authority to allow the owner of any taxable parcel to tender a Bond in full or partial payment of any installment of the Special Taxes or the interest or penalties thereon. A B ond so tendered is to be accepted at par and credit is to be given for any interest accrued thereon to the date of the tender. Thus, if Bonds can be purchased in the secondary market at a discount, it may be to the advantage of a n owner of a taxable parcel to pay the Special Taxes applicable thereto by tendering a Bond. Such a practice would decrease the cash flow available to the District to make payments with respect to other Bonds then outs tanding; and, unless the practice was limited by the District, the Special Taxes paid in cash could be insuffici ent to pay the debt service due with respect to such other Bonds. In order to provide some protection against the p otential adverse impact on cash flows which might be caused by the tender of Bonds in payment of Special Ta xes, the Fiscal Agent Agreement includes a covenant pursuant to which the District will not authorize owne rs of taxable parcels to satisfy Special Tax obligations by the tender of Bonds unless the District shall ha ve first obtained a report of an Independent Financial Consultant certifying that doing so would not result in the District having insufficient Special Tax revenues to pay the principal of and interest on all Outstanding Bonds when due.

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

Appraised Valuations; Value-to-Lien Ratios
The value of land within the District is an important factor in evaluating the investment quality of the Bonds. In the event that a property owner defaults in the paym ent of Special Tax installments, the District’s only remedy is to judicially foreclose on that property. Prosp ective purchasers of the Bonds should not assume that the property within the District could be sold for the app raised value described in this Official Statement at a foreclosure sale for delinquent Special Tax installments or f or an amount adequate to pay delinquent Special Tax installments. Reductions in property values within the District due to a downturn in the economy or the real estate market, events such as earthquakes, droughts, or floods, stricter land use regulations, threatened or endangered species or other events may adversely impact the security underlying the Special Taxes.

The property values of property set forth in the various tables herein are the property values determined by the Appraiser. The Appraisal was prepared for the purpose o f estimating and confirming the market value of such property as of January 10, 2022 in its as is condition on the basis of certain assumptions and limiting conditions. The Appraised values were not determined on a bulk sale basis, and value may be substantially less if all the properties were subject to foreclosure at the same time.

Prospective purchasers of the Bonds should not assume, however, that such parcels could be sold for the appraised amount described herein at the present time or at a f oreclosure sale for delinquent Special Taxes. See the Appraisal included as Appendix G hereto for a brief descrip tion of the analysis used and assumptions made by the Appraiser. The actual value of the property is subject to future events that might render invalid the assumptions relied upon by the Appraiser in determining the appraised value.

No assurance can be given that the estimated value-to-lien rati os as set forth in “THE DISTRICT — Estimated Value-to-Lien Ratios” will be maintained over time. As discussed herein, many factors that are beyond the control of the Distric t could adversely affect the p roperty values within the District. The District does not have any control over the amount of additional indebte dness that may be issued by other public agencies, the payment of which through the levy of a tax or an assessment is on a parity with the Special Taxes.

A decrease in the assessed values in the District or an increase in the indebtedness secured by taxes and amounts

36 with parity liens on property in the District, or both, could r esult in a lowering of the value-to-lien ratios of the property in the District. See “THE DISTRICT — Appraised Value-to-Lien Ratios” herein.

No assurance can be given that any bid will be received for a p arcel with delinquent Special Taxes offered for sale at foreclosure or, if a bid is received, that such bid will be sufficient to pay all delinquent Special Taxes. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS —Cov enant to Commence Foreclosure Proceedings.”
FDIC/Federal Government Interests in Properties
The ability of the District to collect interest and penalties s pecified by the Act and to foreclose the lien of delinquent Special Taxes may be limited in certain respects with regard to parcels in which the FDIC, or other federal government entities such as Fannie Mae, Freddie Mac, th e Drug Enforcement Agency, the Internal Revenue Service or other federal agency, has or obtains an interest.

In the case of FDIC, in the event that any financial institution making a loan which is secured by parcels is taken over by the FDIC and the applicable Special Tax is not paid, the remedies available to the District may be constrained. The FDIC’s policy statement regarding the paym ent of state and local real property taxes (the “Policy Statement”) provides that taxes other than ad valorem taxes which are secured by a valid lien in effect before the FDIC acquired an interest in a property will be paid unless the FDIC determines that abandonment of its interests is appropriate. The Policy Statement provides th at the FDIC generally will not pay installments of non-ad valorem taxes which are levied after the time the FDIC acquires its fe e interest, nor will the FDIC recognize the validity of any lien to secure payment except in certain cases where the Resolution Trust Corporation had an interest in property on or prior to December 31, 1995. Moreover, the Policy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, the FDIC will not permit its lien to be foreclosed out by a taxing authority without its specific consent, nor will the FDIC pay or recognize liens for any penalties, fines or similar claims imposed for the non-payment of taxes.

The FDIC has taken a position similar to that expressed in the Policy Statement in legal proceedings brought against Orange County in United States Bankruptcy Court and in Federal District Court. The Bankruptcy Court issued a ruling in favor of the FDIC on certai n of such claims. Orange County appealed that ruling, and the FDIC cross-appealed. On August 28, 2001, the N inth Circuit Court of Appeals issued a ruling favorable to the FDIC except with respect to the payment of pre -receivership liens based upon delinquent property tax.

The District is unable to predict what effect the application o f the Policy Statement would have in the event of a delinquency with respect to parcels in which the FDI C has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed out at a judicial foreclo sure sale would prevent or delay the foreclosure sale.

In the case of Fannie Mae and Freddie Mac, in the event a parce l of taxable propert y is o wned by a federal government entity or fe deral government sponsored entit y, such as Fannie Mae or Freddie Mac, or a private deed of trust secured by a parcel of taxable property i s owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, the ability to foreclose on the parcel or to collect delinquent Special Taxes may be limited. Federal court s have held that, based on the supremacy clause of the United States Constitution, in the absence of Congressio nal intent to the contrary, a state or local agency cannot foreclose to collect deli nquent taxes or assessments if foreclosure would impair the federal government interest. This means that, unless Congress has otherwise provi ded, if a federal government entity owns a parcel of taxable property but does not pay taxes and assessments levi ed on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.

37 Moreover, unless Congress has otherwise provided, if the federa l government has a mortgage interest in the parcel and the District wishes to foreclose on the parcel a s a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government’s mortgage interest. For a discussion of risks associated with taxable parcels within the District becoming owned by the federal government, federal government entities or federal government s ponsored entities, see “— Insufficiency of Special Taxes.”
The District’s remedies may also be limited in the case of deli nquent Special Taxes with respect to parcels in which other federal agencies (such as the Internal R evenue Service and the Drug Enforcement Administration) have or obtain an interest.

Bankruptcy and Foreclosure
Bankruptcy, insolvency, and other laws generally affecting cred itors’ rights could adversely impact the interests of Beneficial Owners of the Bonds. The payment of pr operty owners’ taxes and the ability of the District to foreclose the lien of a delinquent unpaid Special T ax pursuant to its covenant to pursue judicial foreclosure proceedings may be limited by bankruptcy, insolvenc y or other laws generally affecting creditors’ rights or by the laws of the State relating to judicial foreclo s u r e . S e e “ S E C U R I T Y A N D S O U R C E S O F PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales .” In addition, the prosecution of a foreclosure could be delayed due to many reaso ns, including crowded local court calendars or lengthy procedural delays.

Although a bankruptcy proceeding would not cause the Special Ta xes to become extinguished, the amount of any Special Tax lien could be modified if the value o f the property falls below the value of the lien.

If the value of the property is less than the lien, such excess amount could be treated as an unsecured claim by the bankruptcy court. In addition, bankruptcy of a property ow ner could result in a delay in prosecuting Superior Court foreclosure proceed ings. Such delay would incre ase the likelihood of a delay or default in payment of delinquent Special Tax installments and the possibil ity of delinquent Special Tax installments not being paid in full.

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

Moreover, the ability of the District to commence and prosecute enforcement proceedings may be limited by bankruptcy, insolvency and other laws generally affe cting creditors’ rights (such as the Soldiers’ and Sailors’ Relief Act of 1940) and by the laws of the State relating to judicial foreclosure.

No Acceleration Provision
The Bonds do not contain a provision allowing for the accelerat ion of the Bonds in the event of a payment default or other default under the Bonds or the Fiscal Agent Agreement.

Loss of Tax Exemption
As discussed under the caption “TAX MATTERS,” interest on the B onds could become includable in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds as a result of a failure by the District to comply with certain provisions of th e Code. In addition, the introduction or enactment of any of legislation could adversely affect the market value o r liquidity of the Bonds. Should an event of taxability occur, the Bonds are not subject to early redemption and will remain outstanding to maturity or until redeemed under the redemption provisions of the Fiscal Agent Agreement.

38 Limitations on Remedies
Remedies available to the Beneficial Owners of the Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Bonds or to preserve the tax- exempt status of the Bonds.

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

No Ratings and Limited Secondary Market
The District has not applied to have the Bonds rated by any nat ionally recognized bond rating company and it does not expect to do so in the future.

There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that the Bonds can be sold at all or for any particular price. Although the District has committed to provide certain financial and operating information on an annua l basis, there can be no assurance that such information will be available to Beneficial Owners on a timely basis. See “CONTINUING DISCLOSURE.” The failure to provide the requi red annual financial informatio n does not give rise to monetary damages but merely an action for specific performance. Occasionally, becau se of general market conditions, lack of current information, or because of adverse history or economic prospect s connected with a particular issue, secondary marketing practices in connection with a particular issue are s uspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then p revailing circumstances. Such prices could be substantially different from the original purchase price.

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

Among other things, Section 3 of Article XIII states that “. . . the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any lo cal tax, assessment, fee or charge.” The Act provides for a procedure which includes notice, hearing, protes t and voting requirements to alter the rate and method of apportionment of an existing special tax. However, t he Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax o r terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legisla tive body determines that the reduction or termination of the special tax would not interfere with the tim ely retirement of that debt. On July 1, 1997, a bill was signed into law by the Governor of the State enacting Government Code Section 5854, which states that:
“Section 3 of Article XIIIC of the California Constitution, as adopted at the November 5, 1996, general election, shall not be c onstrued to mean that any owner or beneficial owner of a municipal security, purchased before or after that date, assumes the risk of, or in any way consents to, any action

39 by initiative measure that constitutes an impairment of contrac tual rights protected by Section 10 of Article I of the United States Constitution.”
Accordingly, although the matter is not free from doubt, it is likely that the Initiative has not conferred on the voters the power to repeal or reduce the Special Taxes i f such reduction would interfere with the timely retirement of the Bonds.

It may be possible, however, for voters or the City Council act ing as the legislative body of the District to reduce the Special Taxes in a manner which does not interfer e with the timely repayment of the Bonds, but which does reduce the maximum amount of Special Taxes that may be levied in any year below the existing levels. Furthermore, no assurance can be given with respect to the future levy of the Special Taxes in amounts greater than the amount necessary for the timely retirement of the Bonds. Therefore, no assurance can be given with respect to the levy of Speci al Taxes for Administrative Ex penses. Nevertheless, to the maximum extent that the law permits it to do so, the District will covenant in the Fiscal Agent Agreement that it will not initiate proceedings under the Act to reduce the maximum Special Tax rat es on parcels within the District to an amount that is less than 110% of the sum on the estimated Administrative Expenses and gross debt service in each future Bond Year on all Bonds to remain Outstanding after the reductio n is approved. In connection with the foregoing covenant, the District has made a finding and determi nation that any elimination or reduction of Special Taxes below the foregoing level would interfere with th e timely retirement of the Bonds. The District also will covenant in the Fiscal Agent Agreement that, in the e vent an initiative is adopted which purports to alter the Rate and Method, it will commence and pursue legal ac tion in order to preserve its ability to comply with the foregoing covenant. However, no assurance can be give n as to the enforceability of the foregoing covenants.

The interpretation and applica tion of the Initiative will ultim ately be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainty the outcome of such determination or the timeliness of any remedy a fforded by the courts. See “SPECIAL RISK FACTORS — Limitations on Remedies.”
Validity of Landowner Election
On August 1, 2014, the California Court of Appeal, Fourth Appel late District, Division One (the “Court”), issued its opinion in City of San Diego v. Melvin Shapiro, et al. (D063997). The Court of Appeal considered whether Propositions 13 and 218, which amended the C alifornia Constitution to require voter approval of taxes, require registered voters to approve a tax o r whether a city could limit the qualified voters to just the landowners and lessees paying the tax. The case invol ved a Convention Center Facilities District (the “CCFD”) established by the City o f San Diego. The CCFD is a fi nancing district established under the Charter and was intended to function much like a community facilities d istrict established under the provisions of the Act. The CCFD is comprised of the entire City of San Diego. H owever, the special tax to be levied within the CCFD was to be levied only on properties improved with a hotel located within the CCFD.

At the election to authorize such special tax, the Charter proc eeding limited the electorate to owners of hotel properties and lessees of real property owned by a govern mental entity on which a hotel is located. Thus, the election was an election limited to landowners and lessees of properties on which the special tax would be levied, and not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was based on Section 53326(c) of the Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property , the legislative body may provide that the vote shall be by the landowners of the proposed district whose prope rty would be subject to the special tax. In addition, Section 53326(b) of the Act provides that if there ar e less than 12 registered voters in the district, the landowners shall vote.

The Court held that the CCFD special tax election did not compl y with applicable requirements of Proposition 13. The Court held that the tax was invalid because the registered voters of the City did not approve

40 it. However, the Court expressly stated that it was not addres sing the validity of landowners voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 registered voters. In the case of the CCFD, at the time of the election there were several hundred th ousand registered voters within the CCFD (i.e., all the registered voters in the City). In the case of the Dist rict, there were fewer than 12 registered voters within the District at the time of the election to authorize the Special Tax.

Moreover, Section 53341 of Act provides that any “action or pro ceeding to attack, review, set aside, void or annul the levy of a special tax … shall be commenced within 30 days after the special tax is approved by the voters.” Similarly, Section 53359 of the Act provides that any action to determine the validity of bonds issued pursuant to the Act or th e levy of special taxes authori zed pursuant to the Act be brought within 30 days of the voters approving the issuance of such bonds or the speci al tax. Voters approved the Special Tax and the issuance of bonds for the District pursuant to the requirements of the Act on December 10, 2019. In the opinion of Bond Counsel, under the provisions of Section 53341 and Sect ion 53359 of the Act, the statute of limitations period to challenge the validity of the Special Tax has expired.

Ballot Initiatives
Articles XIIIC and XIIID were adopted pursuant to measures qual ified for the ballot pursuant to California’s constitutional initiative process. On March 6, 19 95, in the case of Rossi v. Brown , the State Supreme Court held that an initiative can repeal a tax ordinance and prohibit the imposition of further such taxes and that the exemption from the referendum requirements does no t apply to initiatives. From time to time, other initiative measures could be adopted by California voters. The adoption of any such initiative might place limitations on the ability of the State, the City, or local dis tricts to increase revenues or to increase appropriations. See “SPECIAL RISK FACTORS — Risks of Real Esta te Secured Investments Generally” herein.

Extraordinary Redemption from Prepaid Special Taxes
The Bonds are subject to redemption in whole or in part from Sp ecial Tax Prepayments on any Interest Payment Date (see “THE BONDS - Redemption”), which could occur if an owner of a taxable parcel chooses to prepay all or a portion of its Special Tax. The resulting redem ption of Bonds that were purchased at a price greater than the applicable redemption price could reduce the otherwise expected yield on such Bonds.

COVID-19 (Coronavirus) Pandemic
The spread of the novel strain o f coronavirus called COVID-19 i s having negative impacts throughout the world, including in the County and the State. The World He alth Organization has declared the COVID-19 outbreak a pandemic, and states of emergency have been declared by the County, State and the United States.

The COVID-19 pandemic is ongoing and the ultimate geographic sp read of the virus or variants of the virus, the duration and severity of the outbreak, and the econo mic and other actions that may be taken in the future by governmental authorities to contain the outbreak or t reat its impacts are uncertain. The ultimate adverse impact on the District, the property within the Distric t, homeowners’ willingness and ability to pay the Special Taxes when due, and the real estate market in general is unknown.

COVID-19 and responses intended to slow its spread, may result in negative impacts to the value of homes within the District. There can be no assurances that the spread of the virus and the related restrictions previously imposed or which may be imposed in the future by the State of California, or other State or local mandates and/or other responses intended to slow its spread, will not materially adversely impact the willingness of individual homeowners to pay the Special Taxes securing the Bonds. In addition, no assurance can be given that the property tax payment dates will not be deferred in the future, which may cause a delay in the receipt of Special Taxes by the District for the payment of the Bonds. Fi nally, stock and municipal bond markets in the U.S. and globally have seen significant volatility attributed t o coronavirus concerns; there can be no assurances

41 that these or other concerns that emerge later will not materia lly adversely impact the secondary market for the Bonds.

Cybersecurity
As a recipient and provider of p ersonal, private, and sensitive information, the City faces multiple cyber threats including, but not limite d to, hacking, viruses, malwar e and other attacks on computers and other sensitive digital networks and systems. Despite security measu res, information technology and infrastructure may be vulnerable to attacks by hackers or breached due to empl oyee error, malfeasance or other disruptions.

Increasingly, businesses and government entities are being targ eted by cyber-attacks seeking to obtain confidential data or disrupt critical services. A rapidly chan ging cyber risk landscape may introduce new vulnerabilities which hackers may exploit in attempts to effect breaches or service disruptions. Any such breach could compromise networks and the information stored there coul d be disrupted, accessed, publicly disclosed, lost or stolen. Any such disruption, access, disclosure or othe r loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of p ersonal information, regulatory penalties, operations and the services provided which could ultimately adversely affect the Special Taxes.

No assurance can be given that the security and operational con trol measures of the City will be successful in guarding against any and each cyber threat or bre ach, or that any such attack will not materially impact the operations or finances of the City or the District, or the administration of the Bonds. Although the City maintains insurance coverage for cyber security losses in the amount of $___ million per occurrence and $__ million program aggregate li mits, subject t o a $__________ self-insured retention per claim, should a successful breach ever occur, the cost of any such disruption o r remedying damage caused by future attacks could be substantial and in excess of such insurance coverage.

The City is also reliant on other entities and service provider s in connection with the administration of the Bonds, including without limitation the County tax collector for the levy and collection of Special Taxes, the Fiscal Agent, and the dissemination agent. No assurance can be given that the City, the District and these other entities will not be affected by cyber threats and attacks in a manner that may adversely affect the Bond owners. [The City actively manages its networks and systems to ensure t hat City systems are properly secured and protected, however, no assurances can be given that the Cit y’s security and operational control measures will be successful in guarding against any and each cyber threa t and attack. To date, the City has not experienced any cyberattacks that have resulted in major operat ional disruptions or financial consequences. The City currently maintains insurance coverage with respect to cer tain information security and privacy liability claims.]

42 CONTINUING DISCLOSURE
The District has covenanted for the benefit of the Owners and B eneficial Owners of the Bonds pursuant to a Continuing Disclosure Agreement, dated the date of issuanc e of the Bonds (the “Continuing Disclosure Agreement”), by and between the City and Webb Municipal Finance , LLC, as Dissemination Agent, to provide certain financial information and operating data relating to th e District (the “Annual Report”) no later than [April 1] following the end of each fiscal year, commencing wit h the report for Fiscal Year 2021-22, and to provide notices of the occurrence of certain enumerated events through the EMMA System. The specific nature of the information to be contained in the Annual Report and the enumerated events is set forth in APPENDIX F – “FORM OF CONTINUING DISCLOSURE AGREEMENT.”
The City and its related governmental entities have made other undertakings pursuant to the Rule in connection with prior debt issuances. A review of compliance b y the City over the past five years indicates the City of Rialto Community Facilities District No. 2006-1 (Elm Pa rk) (i) failed to timely file under an existing undertaking the City’s annual comprehensive financial report (A CFR) and certain financial information and operating data for Fiscal Year 2019-20 and did not successfully file the City’s ACFR under all CUSIP numbers as required, and (ii) failed to timely file the City’s ACFR for Fiscal Year 2017-18.

Remedial filings have been made and the City and its related go vernmental entities are in compliance with their previous undertakings. The District believes that i ts procedures with the Dissemination Agent will be sufficient in the normal due course to assure substantial compl iance with the Continuing Disclosure Agreement with respect to the Bonds.

TAX MATTERS
Federal Tax Exemption
In the opinion of Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel to the District, under existing statutes, regulations, rulings and judicial deci sions, and assuming compliance by the District and the City with certain covenants in the Fiscal Agent Agreement, the Tax Certificate and other documents pertaining to the Bonds and require ments of the Code, regarding the use, expenditure and investment of proceeds of the Bonds and the timely payment of certain investm ent earnings to the United States, interest on the Bonds is not included in the gross income of the owners of the Bonds for federal income tax purposes.

Failure to comply with such covenants and requirements may cause interest on the Bonds to be included in gross income retroactive to the date of issuance of the Bonds.

In the further opinion of Bond Counsel, interest on the Bonds i s not treated as an item of tax preference for purposes of the federal alternative minimum tax.

Ownership of, or the receipt of interest on, tax-exempt obligat ions may result in collateral federal income tax consequences to certa in taxpayers, including, withou t limitation, financial institutions, property and casualty insurance companies, certain foreign corporations doin g business in the United States, certain S corporations with excess passive income, individual recipients of Social Security or Railroad Retirement benefits, taxpayers that may be deemed to have incurred or cont inued indebtedness to purchase or carry tax- exempt obligations and taxpayers who may be eligible for the ea rned income tax credit. Bond Counsel expresses no opinion with respect to any collateral tax consequences and, accordingly, prospective purchasers of the Bonds should consult their tax advisors as to the applicability of any collateral tax consequences.

Certain requirements and procedures contained or referred to in the Fiscal Agent Agreement, the Tax Certificate or other documents pertaining to the Bonds may be c hanged, and certain actions may be taken or not taken, under the circumstances and subject to the terms and con ditions set forth in such documents, upon the advice or with the approving opinion of counsel nationally reco gnized in the area of tax-exempt obligations.

Bond Counsel expresses no opinion as to the effect of any change to any document pertaining to the Bonds or of

43 any action taken or not taken whe re such change is made or acti on is taken or not taken without the approval of Norton Rose Fulbright US LLP or in reliance upon the advice of counsel other than Norton Rose Fulbright US LLP with respect to the exclusion from gross income of the inte rest on the Bonds for federal income tax purposes.

Bond Counsel’s opinion is not a guarantee of result, but repres ents its legal judgment based upon its review of existing statutes, regulations, published rulings and judicial decisions and the representations and covenants of the District and the City described above. No rul ing has been sought from the Internal Revenue Service (the “IRS”) with respect to the matters addressed in th e opinion of Bond Counsel, and Bond Counsel’s opinion is not binding on the IRS. The IRS has an ongoing prog ram of examining the tax exempt status of the interest on municipal obligations. If an examination of the Bo nds is commenced, under current procedures the IRS is likely to treat the District as the “taxpayer,” and the owners of the Bonds would have no right to participate in the examination process. In responding to or defending an examination of the tax-exempt status of the interest on the Bonds, the District may have different or c onflicting interests from the owners. Additionally, public awareness of any future examination of the Bonds could a dversely affect the value and liquidity of the Bonds during the pendency of the examination, regardless of its ultimate outcome.

Tax Accounting Treatment of Bond Premium and Original Issue Discount Bond Premium. To the extent a purchaser acquires a Bond at a price in exce ss of the amount payable at its maturity, such excess will constitute “bond premium” under the Code. The Code and applicable Treasury Regulations provide generally that bond premium on a tax-exempt obligation is amortized over the remaining term of the obligation (or a shorter period in the case of cert ain callable obligations) based on the obligation's yield to maturity (or shorter period in the case of certain cal lable obligations). The amount of premium so amortized reduces the owner’s basis in such obligation for fede ral income tax purposes, though such amortized premium is not deductible for federal income tax purposes. Thi s reduction in basis will increase the amount of any gain (or decrease the amount of any loss) recognized for fe deral income tax purposes upon a sale or other taxable disposition of the obligation. Bond Counsel is not opi ning on the accounting for bond premium or the consequence to a Bond purchaser of purchasing a Bond with bond premium. Accordingly, persons considering the purchase of Bonds with bond premium should consult their ow n tax advisors with respect to the determination of bond premium on such Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of such Bonds.

Original Issue Discount . The excess, if any, of the stated redemption price at maturi ty of Bonds of a particular maturity over the initial offering price to the publ ic of the Bonds of that maturity at which a substantial amount of such Bonds is sold to the public is “orig inal issue discount.” Original issue discount accruing on a Bond is treated as interest excluded from the gross income of the owner thereof for federal income tax purposes under the same conditions and limitations as are a pplicable to interest payable on such Bond.

Original issue discount on a Bond of a particular maturity purc hased pursuant to the initial public offering at the initial public offering price at which a substantial amount of the Bonds of that maturity is sold to the public accrues on a semiannual basis over the term of the Bond on the basis of a constant yield; and within each semiannual period accrues on a ratable daily basis. The amount of original issue discount on a Bond accruing during each period is added to the adjusted basis of such Bond, which will affect the amount of taxable gain upon disposition (including sale, redemption or payment on matu rity) of such Bond. The Code includes certain provisions relating to the accrual of original issue discount i n the case of purchasers that purchase Bonds other than at the initial offering price and pursuant to the initial public offering. Bond Counsel is not opining on the accounting for or consequence to a Bond purchaser of purchasing a Bond with original issue discount.

Accordingly, persons considering the purchase of Bonds with ori ginal issue discount should consult their own tax advisors with respect to the determination of original issu e discount on such Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of such Bonds.

44 Information Reporting and Backup Withholding
Interest paid on the Bonds will be subject to information repor ting in a manner similar to interest paid on taxable obligations. Although such reporting requirement does not, in and of itself, affect the excludability of such interest from gross income for federal income tax purposes, such reporting requirement causes the payment of interest on the Bonds to be subject to backup withholding if such interest is paid to beneficial owners who (a) are not “exempt recipients,” and (b) either fail to provide cer tain identifying information (such as the beneficial owner’s taxpayer identificati on number) in the required manner or have been identified by the IRS as having failed to report all interest a nd dividends required to be show n on their income tax returns. Generally, individuals are not exempt recipients, whereas corporations and certain other entities are exempt recipients.

Amounts withheld under the backup withholding rules from a paym ent to a beneficial owner are allowed as a refund or credit against such ben eficial owner’s federal income tax liability so long as the required information is furnished to the IRS.

State Tax Exemption
In the further opinion of Bond Counsel, interest on the Bond is exempt from personal income taxes imposed by the State of California.

Future Developments
Existing law may change to reduce or eliminate the benefit to o wners of the Bonds of the exclusion of the interest on the Bonds from gr oss income for federal income tax purposes or of the exemption of interest on the Bonds from State of California personal income taxation. A ny proposed legislation, whether or not enacted, or administrative action, whether or not taken, could also affe ct the value and marketability of the Bonds.

Prospective purchasers of the Bonds should consult their own ta x advisors with respect to any proposed or future change in tax law. A copy of the form of opinion of Bon d Counsel relating to the Bonds is included in “APPENDIX B” hereto.

CONCLUDING INFORMATION
Absence of Material Litigation
There is no controversy of any nature now pending against and notice of which has been received by the City or the District or, to the best knowledge of their respect ive officers, threatened, seeking to restrain or enjoin the issuance, sale, execution or delivery of the Bonds or in an y way contesting or affecting the validity of the Bonds or any proceedings of the District taken with respect to the issuance or sale thereof or the pledge or application of any moneys or security provided for the payment of the Bonds or the use of the Bond proceeds.

There are no pending lawsuits against and notice of which has b een received by the City or the District that challenge the validity of the Bonds, the corporate existence of the City or the District, or the title of the officers thereof to their respective offices.

Approval of Legality
The proceedings in connection with the issuance of the Bonds ar e subject to the approval as to their legality by Norton Rose Fulbright US LLP, Los Angeles, Californ ia, Bond Counsel for the District. Bond Counsel undertakes no responsibility for the accuracy, complete ness or fairness of the information contained in this Official Statement. The legal opinion relates only to the legality of the Bonds and is not intended to be, nor is it to be interpreted or relied upon, as a disclosure document or an express or implied recommendation as to the investment quality of the Bonds. A copy of the proposed form of Bond Counsel’s final approving opinion with respect to the Bonds is attached hereto as APPENDIX B. Fees pay able to Bond Counsel are contingent on the successful sale and delivery of the Bonds.

45 Certain legal matters will be passed on for the District and fo r the City by Burke Williams & Sorensen LLP, Los Angeles, California, Cit y Attorney, and by Norton Rose Fulbright US LLP, Los Angeles, California, Disclosure Counsel.

No General Obligation of City or District
The Bonds are not general obligations of the City or the Distri ct, but are limited obligations of the District payable solely from the Special Taxes and certain amounts held under the Fiscal Agent Agreement. Any tax for the payment of the Bonds shall be limited to the Specia l Taxes to be collected within the jurisdiction of the District.

The Municipal Advisor
The District has retained Fieldma n, Rolapp & Associates, Irvine , California (the “Municipal Advisor”), as municipal advisor in connection with the authorization, issu ance, sale and delivery of the Bonds. The Municipal Advisor is a registered Municipal Advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended) and has acted as municipal advisor to the District concerning the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken t o make, an independent verification or to assume responsibility for the accuracy, completeness or fairness of th e information contained in the Official Statement or any of the other legal documents. Fees paid to the Municipa l Advisor are contingent upon the sale and delivery of the Bonds.

No Ratings on the Bonds
The District has not made, and does not contemplate making, any application for a rating on the Bonds.

No such rating should be assumed based upon any other District rating that may be obtained. Prospective purchasers of the Bonds are required to make independent determ inations as to the credit quality of the Bonds and their appropriateness as an investment. Should a Bondowner elect to sell a Bond prior to maturity, no representations or assurances can be made that a market will ha ve been established or maintained for the purchase and sale of the Bonds. Th e Underwriter assumes no obli gation to establish or maintain such a market and is not obligated to repurchase any of the Bonds at the request of the owner thereof.

Underwriting
The Bonds are being purchased by Piper Sandler & Co., Inc. (the “Underwriter”) at a purchase price of $_______________ (equal to the par amount of the Bonds being is sued less an Underwriter’s discount of $______________ plus/less a net or iginal issue premium/discount of $____________) pursuant to a bond purchase agreement between the District and the Underwriter (th e “Purchase Agreement”). The Purchase Agreement provides that the Underwriter will purchase all of th e Bonds if any are purchased, the obligation to make such purchase, if made, being subject to certain terms and conditions set forth in the Purchase Agreement, the approval of certain legal matters and certain other conditions.

The Underwriter may offer and sell Bonds to certain dealers and others at a price other than the offering price. The offering price may be changed from time to time by the Underwriter.

Miscellaneous
All of the preceding summaries of the Fiscal Agent Agreement, o ther applicable legislation, agreements and other documents are made subject to the provisions of such documents and do not purport to be complete statements of any or all of such provisions. Reference is here by made to such documents on file with the City for further information in connection therewith.

This Official Statement does not constitute a contract with the purchasers of the Bonds.

46 Any statements made in this O fficial Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized.

The execution and delivery of this Official Statement by the Ci ty Manager of the City has been duly authorized by the City on behalf of the City of Rialto Communit y Facilities District No. 2019-2 (Foothill/Spruce).

CITY OF RIALTO
COMMUNITY FACILITIES DISTRICT NO. 2019-2
(Foothill/Spruce)

City Manager of the City of Rialto, California, acting on behalf of the City of Rialto Community Facilities District No. 2019-2 (Foothill/Spruce)

A-1

APPENDIX A

GENERAL INFORMATION RELATING TO

THE CITY OF RIALTO AND SAN BERNARDINO COUNTY
The following information relating to the City of Rialto, California (the “City”) and the County of San Bernardino (the “County”) is provided for informational purposes only. The Bo nds (as defined in the forepart of this Official Statement) are payable solely as described in this Official Statement. Neither the Bonds nor the obligation of the City to make payments on the bonds co nstitute an indebtedness of the City, the State of California, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction.

COVID 19 Pandemic
The economic and demographic data contai ned in this Appendix A are the latest available, but are as of dates and for periods before the economic impact of the CO VID 19 pandemic and measures instituted to slow it.

Accordingly, they are not necessarily in dicative of the current financial conditio n or future prospects of the City, the County or the region or of expected revenues to the General Fund. See “SPECIAL RISK FACTORS – COVID 19 Pandemic” in the forepart of this Official Statement.

General
The City. The City is located in the western portion of the County of Sa n Bernardino (the “County”), approximately 60 miles east of the City of Los Angeles and just west of the City of San Bernardino. The City was incorporated in 1911, and is organized as a general law city wi th a Council-Manager form of government. The City is approximately four miles wide and eight and one-half mi les long. The City is served by Interstate Freeways 210, 215, 10 and 15.

The County. The County is located in Southern California and was establish ed by an act of the State Legislature on April 23, 1853, which formed the County over an area formerly composing the eastern part of the County of Los Angeles. The County encompasses an area of over 2 0,000 square miles and includes twenty-four incorporated cities. It is bordered on the west by Los Angeles County, on the east by the State of Arizona and the State of Nevada, on the north by Inyo and Kern Counties, and on the south by Orange and Riverside Counties.

The County is the largest county in the State of California in terms of geographical area.

Municipal Government
The City provides general government services either with its o wn employees or through contracts. The City has a Council-Manager form of municipal government. The C ity Council appoints the City Manager who is responsible for the day-to-day administration of City business and the coordination of all departments. The Mayor is elected at large to serve a four-year term. The four Council Members are elected to serve staggered four- year terms. The City Council is composed of five members electe d biannually at large to four-year staggered terms. The current members of the City Council, term expiration and their principal occupations are as follows:

A-2
City Council Term Expires Occupation

Deborah Robertson, Mayor November 2024
Ed Scott, Mayor Pro Tem November 2022
Rafael Trujillo, Councilmember November 2024
Andy Carrizales, Councilmember November 2022
Karla Perez, Councilmember November 2024

Current City Management Staff includes the following:

[bios to come]

Municipal Services
The City provides a full range of services to its residents wit h [396] full-time employees as of June 30, 2021. Major services such as atto rney, library, transit, street sweeping, and landscape maintenance are provided through contractual arrangements. The City provides services su ch as fire, police, affordable housing, economic development, planning, community compliance, recreation program s, humane services, park and facilities maintenance, street maintenance, city engineering, and administrative management services with city employees.

Population

The following table shows a historical comparison of the respec tive populations of the City, the County and the State for the last five years.

Table A-1
City of Rialto, San Bernardino,
and the State Of California
Population Comparison(1)
Year
City of
Rialto
San Bernardino
County
State of
California

2017 102,668 2,139,520 39,352,398
2018 102,373 2,150,017 39,519,535
2019 102,733 2,165,876 39,605,361
2020 102,813 2,175,424 39,648,938
2021 102,567 2,175,909 39,466,855
___________________
(1) As of January 1.

Source: State Department of Finance, 2010 Benchmark.

A-3
Assessed Valuation
The following table sets forth the historical assessed valuations for secured and unsecured property within the City for the fiscal years shown.

TABLE A-2

CITY OF RIALTO

ASSESSED VALUE OF ALL TAXABLE PROPERTY
Roll
Year Secured Unsecured Total
2021 $10,549,431,826 $1,338,753,843 $11,888,185,669
2020 9,520,084,370 1,240,843,552 10,760,927,922
2019 9,038,669,651 912,396,270 9,951,065,921
2018 8,277,155,422 868,370,316 9,145,525,738
2017 7,105,006,388 802,045,794 7,907,052,182
2016 6,677,551,639 659,303,329 7,336,854,968
2015 6,291,027,118 646,168,256 6,937,195,374
2014 5,885,181,579 578,031,980 6,463,213,559
2013 5,399,997,454 517,585,920 5,917,583,374
2012 5,167,882,532 529,395,064 5,697,277,596
_____________________
Source: City of Rialto.

The following table sets forth property tax levies and collections for the City for the fiscal years show.

TABLE A-3

CITY OF RIALTO

TAX LEVIES AND COLLECTIONS
(Fiscal Year Ended June 30)

Fiscal
Year
Total Tax
Levy for
Fiscal Year
Collections within the
Fiscal Year of the Levy Collections
in Subsequent
Years
Total Collections to Date
Amount
Percent
of Levy Amount
Percent
of Levy
2011 $17,611,622 $17,470,784 99.20% $140,838 $17,611,622 100.00 % 2012 19,467,112 18,698,687 96.05 768,425 19,467,112 100.00 2013 22,604,425 22,503,375 99.55 101,049 22,604,425 100.00 2014 21,095,830 20,913,162 99.13 182,668 21,095,830 100.00 2015 24,231,424 24,045,621 99.23 185,803 24,231,424 100.00 2016 23,902,218 23,750,424 99.36 151,765 23,902,189 100.00 2017 23,719,160 23,608,043 99.53 110,730 23,718,773 100.00 2018 31,445,680 31,292,569 99.51 152,743 31,445,312 100.00 2019 34,643,458 34,544,095 99 .71 99,342 34,643,437 100.00 2020 37,223,333 37,079,154 99.61 144,179 37,223,333 100.00 2021
_______________________
NOTE: Amounts exclude debt service levies and former redevelopment agency property tax increments.

Source: County of San Bernardino Auditor-Controller; City of Rialto.

A-4
Largest Secured Taxpayers
The following table sets forth the largest 2021-22 local secured taxpayers in the City by taxable assessed value.

TABLE A-4

CITY OF RIALTO
LARGEST 2021-22 LOCAL SECURED TAXPAYERS
2021-22 % of
Property Owner Primary Land Use Assessed Valuation Total (1)

1. Prologis LP Industrial $ 490,746,651 4.62%

2. Target Corporation Industrial 355,733,273 3.35

3. El Rivino Industrial I LLC Industrial 210,767,655 1.99

4. Teachers Insurance & Annuity Association Industrial 197,654 ,373 1.86

5. Liberty Property LP Industrial 186,461,939 1.76

6. GPT BTS Linden II Owner LP Industrial 135,584,513 1.28

7. El Rivino Industrial II LLC Industrial 124,921,160 1.18

8. Medline Industries LLC Industrial 113,950,968 1.07

9. Rialto Renaissance LLC I ndustrial 95,814,626 0.90

10. AG Essential Housing CA 4 LP Undeveloped 89,904,000 0.85

11. SM Logistics Rialto LLC Industrial 89,659,346 0.84

12. IDIL Willow LLC Indu strial 88,606,551 0.83

13. GPT BTS Linden Avenue Owner LP Industrial 84,890,127 0.80

14. DPIF2 CA 7 Rialto LLC Industrial 79,681,339 0.75

15. Miro Way Properties LLC Industrial 78,707,921 0.74

16. GPT South Cactus Avenue Owner LP Industrial 76,261,973 0.7 2

17. DCT Renaissance Rialto LLC Industrial 72,441,147 0.68

18. Renaissance Commercial Prop erty LLC Movie Theater 72,398,3 56 0.68

19. BPREP I-210 Logistics LLC Industrial 72,118,258 0.68

20. LBA RVI-Company XXVII LLC Industrial 68,388,833 0.6 4 $2,784,693,009 26.23%

(1) 2021-22 Local Secured Assessed Valuation: $10,617,347,226. __________________________
Source: California Municipal Statistics, Inc.

Income
The U.S. Census Bureau American FactFinder reports that the median income of households in the City for 2019 is $61,518 compared to $75,237 for the State and $58,061 for the nation.

A-5
Employment and Industry
The following table summarizes th e annual average civilian labo r force, employment and unemployment in the County for the calendar years 2016 through 2020.

Table A-5
San Bernardino
Civilian Labor Force, Employment and Unemployment
(Annual Averages)
2016 2017 2018 2019 2020
Civilian Labor Force(1) 930,200 942,700 955,100 965,000 966,200 Employment 876,400 895,900 915,700 927,400 874,900
Unemployment 53,900 46,800 39,400 37,600 91,300
Unemployment Rate 5.8% 5.0% 4.1% 3.9% 9.4%

Wage and Salary Employment:(2)
Total Farm 1,900 2,200 2,200 2,500 2,000
Mining and Logging 600 600 800 700 900
Construction 33,800 35,200 37,800 39,000 38,400
Manufacturing 56,300 56,300 56,600 55,400 51,900
Wholesale Trade 39,100 38 ,700 40,500 41,500 40,200
Retail Trade 87,400 88, 200 88,300 87,000 82,000
Transportation, Warehousing,
Utilities
67,000 79,600 87,100 96,300 109,000
Information 5,200 5,200 5,300 5,000 4,000
Finance and Insurance 15, 600 13,900 12,700 13,600 13,400 Real Estate and Rental and Leasing 8,300 8,500 9,000 9,800 9,50 0 Professional and Business Services 80,700 80,300 80,900 85,000 83,400 Educational and Health Services 114,100 119,700 124,500 135,000 1 3 6 , 3 0 0 Leisure and Hospitality 71,500 75,200 76,900 78,100 62,900 Other Services 22,800 22,800 23,000 22,900 20,100
Federal Government 13,400 13,500 13,500 13,800 14,600
State Government 12,700 12 ,900 13,100 13,500 13,500
Local Government 96,800 98,200 100,400 101,700 96,700 Total, All Industries (3) 727,100 750,900 772,700 801,000 778,700 _______________________________
(1) Labor force data is by place of residence; includes self-emplo yed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employe d individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.

Source: Labor Division of the California State Employment Development Department, March 2020 Benchmark.

A-6
Major Employers
The following table lists the major employers within the County:

Table A-6
County of San Bernardino
Major Employers – Listed Alphabetically
(As of January 2022)
Employer Name Location Industry
Amazon Fulfillment Ctr Redlands Mail Order Fulfillment Service Amazon Fulfillment Ctr San Bernardino Mail Order Fulfillment Service Arrowhead Regional Medical Ctr Colton Hospitals
Bear Mountain Big Bear Lake Skiing Centers & Resorts
Big Bear Mountain Resorts Big Bear Lake Resorts
Burlington Distribution Ctr San Bernardino Distribution Centers (whls) California State Univ Sn San Bernardino Schools-Universities & Colleges Academic Dignity Health Cmnty Hosp-Sn San Bernardino Hospitals
Environmental Systems Research Redlands Geographics Information Systems Fedex Ground Bloomington Delivery Service
Inland Empire Health Plan Rancho Cucamonga Health Plans Loma Linda Univ Health Board Loma Linda Univ/Clg-Governing Body/Regent/Trustee Loma Linda University Med Ctr Loma Linda Hospitals
Mountain High Ski Resort Wrightwood Skiing Centers & Resorts Ontario International Airport Ontario Airports
Ontario-Montclair School Dist Ontario School Districts
Patton State Hospital Patton Hospitals
Redlands Community Hospital Redlands Hospitals
San Antonio Regional Hospital Upland Hospitals
San Bernardino County Sch Supt San Bernardino Schools & Educational Services NEC San Bernardino County Sheriff San Bernardino County Government-General Offices St Bernardine Medical Ctr San Bernardino Hospitals
St Mary's Medical Ctr Apple Valley Hospitals
Transportation Department San Bernardino State Government-Transportation Programs

Source: California Employment Development Departmen t, extracted from The America’s Labor Market information System (ALMIS) Employer Database, 2022 1st Edition.

A-7
Commercial Activity
The number of establishments selling merchandise subject to sal es tax and the valuation of taxable transactions in the City is presented in the following table.

Table A-7
City of Rialto
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)

Total Retail and
Food Services

Total All Outlets

Taxable
Transactions
Number of
Permits
Taxable
Transactions
2016 $598,370 1,563 $ 941,404
2017 666,371 1,612 1,473,390
2018 804,442 1,791 1,759,274
2019 882,892 1,943 1,880,217
2020 916,844 2,311 1,972,235

Sources: California Department of Tax and Fee Administration, Taxable Sales – Cities by Type of Business.

The number of establishments selling merchandise subject to sal es tax and the valuation of taxable transactions in the County is presented in the following table.

Table A-8
San Bernardino
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)

Number
of Permits
Taxable
Transactions
2016 57,629 $37,216,551
2017 58,956 38,399,373
2018 61,838 40,554,024
2019 64,771 41,768,748
2020 71,145 43,265,512

Source: California Department of Tax and Fee Administration, Taxable Sales – By County (2017- 2020 data).

Housing
As of January 1, 2021, the California Department of Finance rep orted that there were 19,715 single family detached units in the City, 740 single family attached u nits, 5,418 multifamily housing units and 1,746 mobile home units. The vacancy rate is approximately 6.5%.

A-8
Construction Activity
The following tables show a five year summary of the valuation of building permits issued in the City and the County.

Table A-9
City of Rialto
Building Permit Valuation

2016 2017 2018 2019 2020
Permit Valuation
Single-family dwelling $0 $11,991,671 $3,401,547 $15,054,141 $ 54,522 Multi-family 0 0 0 0 0
Res. Alterations/Additions 112,200
1,833,441 801,827 1,143,213 267,602
Total Residential $112,200 $13,825,112 $4,203,374 $16,197,354 $ 322,124

Hotels & Motels 0 0 0 0 0
Non-Housekeeping Shelter 0 0 0 0 0
Amusement and Recreation 0 7,586,589 0 0 0
C h u r c h e s 0 0 0 0 0
Industrial & Manufacturing 0 8,867,158 2,418 111,571,554 0 Parking Garages 0 0 0 0 0
Service Stations 0 307,034 181,116 0 0
Hospitals 0 0 0 0 0
Offices 0 0 0 914,056 0
Public Works 0 0 0 0 0
Schools Education 0 0 908,371 3,348,272 0
Stores, Mercantile & Warehouses 0 23,186,595 12,895,273 22,359, 113 0 Other Non-Residential Buildings 0 491,608 515,868 956,392 0 Structures Other Than Buildings 821,092 2,372,438 3,001,049 3,1 99,608 741,281 Non-Residential Alterations 90,000 40,951,800 15,891,000 108,95 6,410 7,437,068 Residential Garages 0
197,749 13,708 225,926 4,750
Total Nonresidential $911,092 $83,960,971 $33,408,803 $251,531, 331 $8,183,099

New Dwelling Units
Single Family 0 47 16 59 1
Multiple Family 0 0 0 0 0
Total 0 47 16 59 1

Source: Construction Industry Research Board, Annual Building Permit Summary.

A-9

Table A-10
San Bernardino
Building Permit Valuation

2016 2017 2018 2019 2020
Permit Valuation
New Single-family $706,601,794 $1,009,450,839 $1,114,777,827 $1 ,078,797,667 $934,304,422 New Multi-family 119,497,557 278,760,527 268,564,946 232,079,30 5 143,366,170 Res. Alterations/Additions 62,042,410 77,811,946 71,937,836 139,761,121 61,788,531 Total Residential $888,141,761 $1,366,023, $1,455,280,609 $1,45 0,638,093 $1,139,459,123

New Commercial $165,286,100 $251,982,349 $211,175,724 $413,404, 484 $237,588,657 New Industrial 426,747,927 543, 462,721 387,108,590 476,322,279 330,960,066 New Other 308,269,928 330,612,064 388,145,460 365,127,043 486,3 98,444 Alterations/Additions 93,977,723 159,539,841 93,699,940 122,245,823 9,748,343 Total Nonresidential $994,281, 678 $1,285,596,975 $1,080,129,714 $1,377,099,629 $1,064,695,510

New Dwelling Units
Single Family 2,896 4,253 3,311 4,096 3,631
Multiple Family 976 2,578 1,775 1,884 910
Total 3,872 6,831 5,086 5,980 4,541

Source: Construction Industry Research Board, Annual Building Permit Summary.

Development Activity within the City
The following are examples of recently completed and currently planned economic development projects in the City. The City makes no assurance whether or wh en any of the below-listed on-going economic development projects will be completed.
[to come]
Housing.

Commercial.

Mixed-Use.

Civic Uses.

B-1

APPENDIX B

FORM OF BOND COUNSEL’S OPINION

[Closing Date]
City of Rialto Community Facilities
District No. 2019-2 (Foothill/Spruce)
23920 Valencia Boulevard, Suite 295
Rialto, California 91355
Re: $[principal amount] City of Rialto Community Facilities Dis trict No. 2019-2 (Foothill/Spruce) Special Tax Bonds, Series 2022
Ladies and Gentlemen:

We have acted as bond counsel to the City of Rialto Community F acilities District No. 2019-2 (Foothill/Spruce) (the “District”) in connection with the issua nce of $[principal amount] aggregate principal amount of City of Rialto Community Facilities District No. 2019 -2 (Foothill/Spruce) Special Tax Bonds, Series 2022 (the “Bonds”), pursuant to the provisions of the Mello-Roo s Community Facilities Act of 1982, as amended, being Chapter 2.5, Par t 1, Division 2, Title 5, of the Government Code of the State of California (the “Act”), and pursuant to a Fiscal Agent Agreement, dated as of April 1, 2022 (the “Fiscal Agent Agreement”), by and between the District and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”). Capitalized terms not o therwise defined herein shall have the meanings ascribed to them in the Fiscal Agent Agreement
As bond counsel, we have examined applicable provisions of the Act and copies certified to us as being true and complete copies of the proceedings of the City of Rialto (the “City”) and the District, acting through the City Council of the City, as its legislative body, for the auth orization and issuance of the Bonds, including the Fiscal Agent Agreement and the Tax Certificate executed by the District in connection with the issuance of the Bonds (the “Tax Certificate”). Our services as bond counsel we re limited to an examination of such proceedings and to the rendering of the opinions set forth below. In this connection we have also examined such certificates of public officials and officers of the City and t he District as we have considered necessary for the purposes of this opinion.

We have assumed the genuineness of all documents and signatures presented to us. We have not undertaken to verify independently, and have assumed, the accur acy of the factual matters represented, warranted or certified in the doc uments. Furthermore, we have assumed compliance with all covenants and agreements contained in the Fiscal Agent Agreement and the Tax Certificate.

Based upon the foregoing we are of the opinion, under existing law, as follows:

1. The Fiscal Agent Agreement has been duly and va lidly authorized, executed and delivered by the District and constitutes the legally valid and binding obli gation of the District, enforceable against the District in accordance with its terms.

2. The Bonds constitute valid and binding limited obligations o f the District as provided in the Fiscal Agent Agreement, and are entitled to the benefits of the Fiscal Agent Agreement.

3. The Bonds are secured by a va lid pledge of the Special Taxes and all moneys in the funds and accounts under the Fiscal Agent Agreement, including all amount s derived from the investment of such moneys, subject to the application thereof on the terms and conditions as set forth in the Fiscal Agent Agreement.

B-2

4. Under existing statutes, regulations, rulings and judicial d ecisions, and assuming compliance by the District and the City with certain covenants in the Indentu re and the Tax Certificate and requirements of the Internal Revenue Code of 1986 (the “Code”) regarding the use, expenditure and investment of proceeds of the Bonds and the timely payment of certain investment earnings to the United States, interest on the Bonds is not included in gross income for federal income tax purposes. Failure to comply w ith such covenants and requir ements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date hereof.

5. Under current law, interest on the Bonds is not treated as a n item of tax preference for purposes of the alternative minimum tax.

6. Under existing law interest on the Bonds is exempt from pers onal income taxes of the State of California.

The Code imposes certain requirements that must be met subseque nt to the issuance and delivery of the Bonds for interest thereon to be and remain exc luded from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to be included in the gross income of the owners thereof retroactive to the date o f i s s u a n c e o f t h e B o n d s . T h e D i s t r i c t a n d t h e C i t y a r e m a k i n g representations relevant to the determination of, and are covenanting to comply with the applicable provisions of the Code to maintain, the exclusion of interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. In reaching our opi nions described above, we hav e relied on, and have assumed the accuracy of, such representations and the present and future co mpliance by the District and the City with their covenants. Further, except as expressly stated abov e, we express no opinion as to any federal or state tax consequence of the receipt or accrual of interest on, or the ownership or disposition of, the Bonds.

Certain requirements and procedures contained or referred to in the Fiscal Agent Agreement, the Tax Certificate or other documents pertaining to the Bonds may be c hanged, and certain actions may be taken or not taken, under the circumstances and subject to the terms and con ditions set forth in such documents, upon the advice or with the approving opinion of counsel nationally reco gnized in the area of tax-exempt obligations.

With respect to the exclusion from gross income of the interest on the Bonds for federal income tax purposes, we express no opinion as to the effect of any change to any doc ument pertaining to the Bonds or of any action taken or not taken where such ch ange is made or action is taken or not taken without our approval or in reliance upon the advice of counsel other than Norton Rose Fulbright US LLP.

The opinions expressed in paragraphs 1 and 2 above are qualifie d to the extent the enforceability of the Bonds and the Fiscal Agent Agreement may be limited by applicab le bankruptcy, insolvency, debt adjustment, reorganization, moratorium or sim ilar laws or equitable princip les relating to or limiting creditors’ rights generally or as to the availability of any particular remedy. The enforceability of the Bonds and the Fiscal Agent Agreement is subject to the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, to the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a pro ceeding in equity or at law, and to the limitations on legal remedies against governmental entities in California.

No opinion is expressed herein on the accuracy, completeness or fairness of the Official Statement or other offering material relating to the Bonds.

Our opinions are based on existing law, which is subject to cha nge. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any facts or circumstances that may thereafter come to our atte ntion or to reflect any changes in any law that may thereafter occur or become effective. Moreover, our opinio ns are not a guarantee of result and are not

B-3
binding on the Internal Revenue Service. Rather, such opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions a nd in reliance upon the representations and covenants referenced above.

This opinion is limited to the laws of the State of California and the federal laws of the United States.

Respectfully submitted,

C-1

APPENDIX C

SUMMARY OF CERTAIN PROVISIONS

OF THE FISCAL AGENT AGREEMENT

D-1

APPENDIX D

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

E-1

APPENDIX E

BOOK-ENTRY ONLY SYSTEM

None of the District, the Fiscal Agent or the Underw riter can or do give any assurances that DTC, the Participants or others will distribute payments of princi pal of or interest on the Bonds paid to DTC or its nominee as the registered owner, or will distribute any prepayment notices or other notices, to the Beneficial Owners, or that they will do so on a timely basis or w ill serve and act in the manner described in this Official Statement. None of the District, the Fiscal Agent or th e Underwriter are responsible or liable for the failure of DTC or any Participant to make any payment or give any notice to a Beneficial Owner with respect to the Bonds or an error or delay relating thereto.

The following information concerning The Depository Trust Compa ny, New York, New York (“DTC”) and DTC’s book-entry system has been obtained from sources that the District and the Underwriter believe to be reliable, but neither the District or the Underwriter take responsibility for the accuracy thereof. Capitalized terms used herein and not otherwise de fined herein shall have the mea nings set forth in this Official Statement and in APPENDIX C — “SUMMARY OF FISCAL AGENT AGREEMENT.”
DTC will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partners hip nominee) or such other name as may be requested by an authorized representative of DTC. One fully-reg istered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-pu rpose trust company organized under the New York Banking Law, a “banking organization” within the meani ng of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, an d money market instruments (from over 100 countries) that DTC’s participan ts (“Direct Participants”) depo sit with DTC. DTC also facilitates the post trade settlement among Direct Participants of sales and other securit ies transactions in deposited securities, through electronic computerized book-entry transfers and pledges betwee n Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Dire ct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearin g corporations, and certain other organizations.

DTC is a wholly-owned subsidiary of The Depository Trust & Clea ring Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporati on and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear th rough or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Pa rticipants”). DTC has an S&P Global Ratings rating of AA+. The DTC Rules applicable to its Participants are on fil e with the Securities and Exchange Commission.

More information about DTC can be found at www.dtcc.com.

Purchases of Bonds under the DTC system must be made by or thro ugh Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct an d Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of owners hip interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners.

E-2
Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Dire ct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such othe r name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial owners hip. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the B eneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indire ct Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory o r regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant ev ents with respect to the Bonds , such as redemptions, tenders, defaults, and proposed amendments to the Bond doc uments. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provi de their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of th e Bonds within an issue are being redeemed, DTC’s practice is to de termine by lot the amount of t he interest of each Direct Participant in such issue to be redeemed.

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

Redemption proceeds, distributions, and dividend payments on th e Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized repr esentative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or the Fiscal Agent, on payable date in accordance with their respective holdings shown on DTC’s records.

Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibilit y of such Participant and n ot of DTC, the Fiscal Agent, or the City, subject to any statutory or regulatory requirements as may be in effect f r o m t i m e t o t i m e . P a y m e n t o f r e d e m p t i o n proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Fiscal Agent, disbursement of such payments to Direct Participants will be the responsibility of D TC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with r espect to the Bonds at any time by giving reasonable notice to the District or the Fiscal Agent. U nder such circumstances, in the event that a successor depository is not obtained, certificates for the Bond s are required to be printed and delivered in such principal amount or amounts, in authorized denominations, and r egistered in whatever name or names DTC shall designate.

The District may decide to discontinue use of the system of boo k-entry-only transfers through DTC (or a successor securities depository). In that event, certificates for the Bonds will be printed and delivered in such

E-3
principal amount or amounts, in authorized denominations, and r egistered in whatever name or names DTC shall designate.

The information in this section concerning DTC and DTC’s book-e ntry system has been obtained from sources that the District believe to be reliable, but the Distr ict does not take any responsibility for the accuracy thereof.

Risks Regarding the Book-Entry Only System
AS LONG AS CEDE & CO. OR ITS SUCCESSOR IS THE REGISTERED HOLDER OF THE

BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE REGISTERED H OLDERS OF THE BONDS SHALL MEAN CEDE & CO., AS AFORESAID, AND SHALL NOT MEAN T HE BENEFICIAL OWNERS OF THE BONDS. ANY FAILURE OF DTC TO ADVISE ANY PARTICIPA NT, OR OF ANY

PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND I TS CONTEXT OR

EFFECT WILL NOT AFFECT THE VALIDITY OR SUFFICIENCY OF THE PROCE EDINGS RELATING

TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE. Each person for whom a Participant acq uires an interest in the Bonds, as nominee, may desire to make arrangements with such Participant to receive a credit balance in the records of such Participant, and may desire to make arrangements with such Participant to have all notices of redemption or other communications to DTC, which may affect such person, forwarded in writing by such Participant and to receive notification of all interest payments.

NONE OF THE CITY, THE AUTHORITY, THE FISCAL AGENT OR THE UNDERW RITER WILL

HAVE ANY RESPONSIBILITY OR OBLIGATION WITH RESPECT TO THE PAYME NTS TO THE

DIRECT PARTICIPANTS, ANY INDIRECT PARTICIPANTS OR THE BENEFICIA L OWNERS, THE

SELECTION OF THE BENEFICIAL INTERESTS IN THE BONDS TO BE REDEEM ED IN THE EVENT

OF REDEMPTION OF LESS THAN ALL BONDS OF A PARTICULAR MATURITY O R THE PROVISION

OF NOTICE TO THE DIRECT PARTICIPANTS, ANY INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO THE BONDS. NO ASSURANCE CAN BE GIVEN BY THE CITY, THE

AUTHORITY THE FISCAL AGENT OR THE UNDERWRITER THAT DTC, DIRECT PARTICIPANTS,

INDIRECT PARTICIPANTS OR OTHER NOMINEES OF THE BENEFICIAL OWNER S WILL MAKE

PROMPT TRANSFER OF PAYMENTS TO THE BENEFICIAL OWNERS, THAT THEY W I L L

DISTRIBUTE NOTICES, INCLUDING REDEMPTION NOTICES (REFERRED TO A BOVE), RECEIVED

AS THE REGISTERED OWNER OF THE BONDS TO THE BENEFICIAL OWNERS, THAT THEY WILL

DO SO ON A TIMELY BASIS, OR THAT DTC WILL ACT IN THE MANNER DES CRIBED IN THIS OFFICIAL STATEMENT.

In the event the District determ ines not to continue the book-e ntry system or DTC determines to discontinue its services with respect to the Bonds, and the Dis trict does not select another qualified securities depository, the District shall deliver one or more Bonds in suc h principal amount or amounts, in authorized denominations, and registered in whatever name or names, as DTC shall designate. In such event, transfer and exchanges of Bonds will be governed by the provisions of the Fiscal Agent Agreement.

F-1

APPENDIX F

FORM OF CONTINUING DISCLOSURE AGREEMENT

G-1

APPENDIX G

APPRAISAL REPORT