28000000 Rio Elementary School District

NEW ISSUE NOT RATED

In the opinion of Kronick, Moskovitz, Tiedemann & Girard, a Professional Corporation, Sacramento, California, Bond Counsel, based upon an analysis of existing statutes, regulations and court decisions, and assuming, among other things, the accuracy of certain representations and compliance with certain covenants, interest on the Series 2013 Bonds is excludable from gross income for federal income tax purposes and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Series 2013 Bonds is not an item of tax preference for purpose of the alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. Bond Counsel expresses no opinion regarding any other tax consequences relating to the ownership or disposition of, or the accrual or receipt of interest on, the Series 2013 Bonds. See “LEGAL MATTERS - Tax Exemption.”

$28,000,000 RIO ELEMENTARY SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 1 SPECIAL TAX BONDS, SERIES 2013

Dated: Date of Delivery Due: September 1, as shown below

Authority for Issuance. The bonds captioned above (the “Series 2013 Bonds”) are being issued under the Mello-Roos Community Facilities Act of 1982 (the “Act”) and a Fiscal Agent Agreement dated as of November 1, 2005, as supplemented by a First Supplemental Fiscal Agent Agreement dated as of November 1, 2013 (collectively, the “Fiscal Agent Agreement”), between the Rio Elementary School District (the “School District”), on behalf of the Rio Elementary School District Community Facilities District No. 1 (the “Community Facilities District”) and Zions First National Bank, as fiscal agent (the “Fiscal Agent”). See “THE SERIES 2013 BONDS – Authority for Issuance.”

Additional Bonds. The School District has authorized the issuance of bonds for the Community Facilities District in an aggregate principal amount not to exceed $75,000,000. The Series 2013 Bonds are the second series of bonds to be issued under this authorization, and are issued on a parity with the bonds of the School District captioned “$30,725,000 Rio Elementary School District Community Facilities District No. 1 Special Tax Bonds, Series 2005.” See “SECURITY FOR THE BONDS –Issuance of Additional Bonds.”

Security and Sources of Payment. The Series 2013 Bonds are payable from proceeds of Special Taxes (as defined herein) levied on property within the Community Facilities District according to the rate and method of apportionment of special tax approved by the qualified electors of the Community Facilities District and by the Board of the School District. The Series 2013 Bonds are secured by a pledge of the proceeds of the Special Taxes, together with certain funds and accounts established under the Fiscal Agent Agreement. See “SECURITY FOR THE BONDS.”

Use of Proceeds. The Series 2013 Bonds are being issued to (i) finance the acquisition and construction of certain public school facilities and improvements owned or to be owned and operated by the School District, (ii) fund a reserve fund for the Series 2013 Bonds, and (iii) pay the costs of issuing the Series 2013 Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS” and “FACILITIES TO BE FINANCED WITH PROCEEDS OF THE SERIES 2013 BONDS.”

Series 2013 Bond Terms. Interest on the Series 2013 Bonds is payable on March 1, 2014, and semiannually thereafter on each September 1 and March 1. The Series 2013 Bonds will be issued in denominations of $5,000 or integral multiples of $5,000. The Series 2013 Bonds, when delivered, will be initially registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Series 2013 Bonds. See “THE SERIES 2013 BONDS – General Provisions” and “APPENDIX G – DTC and the Book-Entry Only System.”

Redemption. The Series 2013 Bonds are subject to optional redemption, mandatory redemption from Special Tax prepayments, and mandatory sinking fund redemption before maturity. See “THE SERIES 2013 BONDS - Redemption.” THE SERIES 2013 BONDS, THE INTEREST THEREON, AND ANY PREMIUMS PAYABLE ON THE REDEMPTION OF ANY OF THE SERIES 2013 BONDS, ARE NOT AN INDEBTEDNESS OF THE SCHOOL DISTRICT, THE COMMUNITY FACILITIES DISTRICT, THE STATE OF CALIFORNIA (THE “STATE”) OR ANY OF ITS POLITICAL SUBDIVISIONS, AND NEITHER THE SCHOOL DISTRICT, THE COMMUNITY FACILITIES DISTRICT (EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN), THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS IS LIABLE ON THE SERIES 2013 BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE SCHOOL DISTRICT, THE COMMUNITY FACILITIES DISTRICT (EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN) OR THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE SERIES 2013 BONDS. OTHER THAN THE SPECIAL TAXES, NO TAXES ARE PLEDGED TO THE PAYMENT OF THE SERIES 2013 BONDS. THE SERIES 2013 BONDS ARE NOT A GENERAL OBLIGATION OF THE COMMUNITY FACILITIES DISTRICT, BUT ARE LIMITED OBLIGATIONS OF THE COMMUNITY FACILITIES DISTRICT PAYABLE SOLELY FROM THE SPECIAL TAXES AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT.

MATURITY SCHEDULE (see inside cover)

This cover page contains certain information for quick reference only. It is not a summary of the issue. Potential investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. Investment in the Series 2013 Bonds involves risks which may not be appropriate for some investors. See “SERIES 2013 BOND OWNERS' RISKS” herein for a discussion of special risk factors that should be considered in evaluating the investment quality of the Series 2013 Bonds. The Series 2013 Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Kronick, Moskovitz, Tiedemann & Girard, a Professional Corporation, Sacramento, California, Bond Counsel, and subject to certain other conditions. Jones Hall, A Professional Law Corporation, San Francisco, California, has served as disclosure counsel to the School District. McFarlin & Anderson LLP, Laguna Hills, California, has acted as counsel to the Underwriter. It is anticipated that the Series 2013 Bonds, in book-entry form, will be available for delivery through the facilities of DTC on or about November 7, 2013.

The date of this Official Statement is: October 24, 2013.

MATURITY SCHEDULE (Base CUSIP†: 767027)

$7,355,000 Serial Bonds

Maturity Principal Interest (September 1) Amount Rate Yield Price CUSIP† 2014 $155,000 2.000% 0.900% 100.892% AV7 2015 40,000 3.000 1.400 102.858 AW5 2016 70,000 3.000 1.900 103.001 AX3 2017 55,000 3.000 2.400 102.173 AY1 2018 90,000 4.000 2.900 104.908 AZ8 2019 125,000 4.000 3.300 103.673 BA2 2020 160,000 4.000 3.620 102.273 BB0 2021 200,000 4.000 3.920 100.529 BC8 2022 235,000 4.000 4.070 99.481 BD6 2023 280,000 4.250 4.300 99.597 BE4 2024 325,000 4.250 4.450 98.292 BF1 2025 375,000 4.500 4.600 99.090 BG9 2026 430,000 4.500 4.750 97.614 BH7 2027 485,000 4.750 4.850 98.994 BJ3 2028 545,000 4.750 4.950 97.910 BK0 2029 610,000 5.000 5.020 99.776 BL8 2030 680,000 5.000 5.100 98.872 BM6 2031 750,000 5.000 5.150 98.257 BN4 2032 830,000 5.000 5.200 97.610 BP9 2033 915,000 5.125 5.250 98.463 BQ7

$20,645,000 5.500% Term Bond due September 1, 2039, Yield: 5.470%, Price: 100.216% C CUSIP† No. 767027 BR5

† Copyright 2013, American Bankers Association. CUSIP data herein are provided by Standard & Poor's CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc., and are provided for convenience of reference only. None of the School District, the Community Facilities District or the Underwriter assumes any responsibility for the accuracy of CUSIP data. C = Priced to optional par redemption date of September 1, 2023.

RIO ELEMENTARY SCHOOL DISTRICT

BOARD OF TRUSTEES

Ramon Rodriguez, President Matt Klinefelter, Clerk Henrietta Macias, Trustee Celia Robles, Trustee Eleanor Torres, Trustee

DISTRICT ADMINISTRATION

John D. Puglisi, Ph.D., Superintendent Paul Disario, Ed.D, Interim Assistant Superintendent, Business Services

______

PROFESSIONAL SERVICES

BOND COUNSEL

Kronick, Moskovitz, Tiedemann & Girard, a Professional Corporation Sacramento, California

DISCLOSURE COUNSEL

Jones Hall, A Professional Law Corporation San Francisco, California

SPECIAL TAX CONSULTANT

Dolinka Group, LLC Irvine, California

APPRAISER

Bruce Hull & Associates Ventura, California

MARKET CONSULTANT

Empire Economics, Inc. Capistrano Beach, California

FISCAL AGENT

Zions First National Bank Los Angeles, California

GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT

No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations with respect to the Series 2013 Bonds other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized.

No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Series 2013 Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the School District, the Community Facilities District, any other parties described in this Official Statement, or in the condition of property within the Community Facilities District since the date of this Official Statement.

Use of this Official Statement. This Official Statement is submitted in connection with the sale of the Series 2013 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 a contract with the purchasers of the Series 2013 Bonds.

Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness.

The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as 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.

Document References and Summaries. All references to and summaries of the Fiscal Agent Agreement or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents.

Stabilization of and Changes to Offering Prices. The Underwriter may overallot or take other steps that stabilize or maintain the market prices of the Series 2013 Bonds at levels above those that might otherwise prevail in the open market. If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the Series 2013 Bonds to certain securities dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the inside cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter.

Series 2013 Bonds are Exempt from Securities Laws Registration. The issuance and sale of the Series 2013 Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.

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

The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The School District does not plan to issue any updates or revisions to those forward-looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based occur.

School District Internet Site. The School District maintains an Internet website, but the information on the website is not incorporated in this Official Statement.

TABLE OF CONTENTS

Page Page INTRODUCTION ...... 1 Environmental Conditions ...... 55 ESTIMATED SOURCES AND USES OF Overall Development Plan and Development FUNDS ...... 5 Status ...... 57 FACILITIES TO BE FINANCED WITH Market Absorption Study ...... 61 PROCEEDS OF THE SERIES 2013 BONDS ... 6 PROPERTY OWNERSHIP ...... 65 School Facilities Mitigation Agreement ...... 6 General ...... 65 Acquisition Agreement ...... 6 SOCM ...... 69 Description of Facilities ...... 7 Owners of Undeveloped Property ...... 70 THE SERIES 2013 BONDS ...... 9 No Information Concerning Other Property General Provisions ...... 9 Owners ...... 71 Authority for Issuance ...... 9 SERIES 2013 BOND OWNERS' RISKS ...... 72 Redemption ...... 11 Limited Obligation of the Community Registration, Transfer and Exchange ...... 13 Facilities District to Pay Debt Service ...... 72 DEBT SERVICE SCHEDULE ...... 14 Levy and Collection of the Special Tax ...... 72 SECURITY FOR THE BONDS ...... 15 Risks Related to Declines in Property Values .. 74 General ...... 15 Limited Number of Taxable Parcels; Limited Obligation ...... 15 Concentration of Ownership ...... 74 Special Taxes ...... 16 Payment of Special Tax is not a Personal Rate and Method ...... 16 Obligation of the Property Owners ...... 74 Bonding Capacity ...... 23 Appraised Values ...... 74 Issuance of Additional Bonds ...... 23 Property Values ...... 75 Foreclosure of Delinquent Parcels ...... 25 Other Possible Claims Upon the Value of Allocation of Special Tax Revenues; Special Taxable Property ...... 77 Tax Fund ...... 26 Exempt Properties ...... 77 Interest Fund ...... 28 Future Property Development ...... 78 Principal Fund ...... 28 Depletion of Bond Reserve Fund ...... 79 Bond Reserve Fund ...... 29 Bankruptcy Delays ...... 79 Investment of Moneys in Funds ...... 30 Disclosure to Future Purchasers ...... 80 THE COMMUNITY FACILITIES DISTRICT ...... 32 No Acceleration Provisions ...... 80 General Description and Location ...... 32 Loss of Tax Exemption ...... 80 Appraised Property Value ...... 33 IRS Audit of Tax-Exempt Bond Issues ...... 81 Fiscal Year 2013-14 Assessed Value ...... 37 Legislative Proposals, Clarifications of the Appraised Value-to-Debt Ratio ...... 37 Code and Court Decisions on Tax Direct and Overlapping Governmental Exemption ...... 81 Obligations ...... 40 Voter Initiatives ...... 81 Estimated Tax Burden ...... 42 Secondary Market for Bonds ...... 82 Special Tax Collection and Delinquency LEGAL MATTERS ...... 83 Rates ...... 44 Legal Opinions ...... 83 Potential Consequences of Special Tax Tax Exemption ...... 83 Delinquencies ...... 44 No Material Litigation ...... 84 Mortgage Study ...... 45 NO RATINGS ...... 85 Estimated Maximum Special Tax Proceeds CONTINUING DISCLOSURE ...... 85 and Debt Service Coverage ...... 47 UNDERWRITING ...... 85 Undeveloped Property ...... 48 PROFESSIONAL FEES ...... 86 THE DEVELOPMENT ...... 50 EXECUTION ...... 86 Development Requirements ...... 50

APPENDIX A – Economic and Demographic Information for the City of Oxnard and the County of Ventura APPENDIX B – Rate and Method of Apportionment of Special Tax APPENDIX C – Appraisal Report APPENDIX D – Market Absorption Study APPENDIX E – Mortgage Study APPENDIX F – Summary of Certain Provisions of the Fiscal Agent Agreement APPENDIX G – DTC and the Book-Entry Only System APPENDIX H – Form of Issuer Continuing Disclosure Certificate APPENDIX I – Form of Opinion of Bond Counsel APPENDIX J – Community Facilities District Boundary Map

[THIS PAGE INTENTIONALLY LEFT BLANK]

Rio School District (Ventura County, California) Regional Location Map

"---, Rosamond -L __ -- ~~:r ,__ __ r----a----te

LOS ANGELES COUNTY

Malibu

Anacapa Island

North RIO ELEMENTARY SCHOOL DISTRICT Community Facilities District No. 1 Special Tax Bonds, Series 2013

Note: Boundaries shown are approximate. Map as of April, 2013.

OFFICIAL STATEMENT

$28,000,000 RIO ELEMENTARY SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 1 SPECIAL TAX BONDS, SERIES 2013

INTRODUCTION

This Official Statement, including the cover page and attached appendices, is provided to furnish information regarding the bonds captioned above (the “Series 2013 Bonds”) to be issued by Rio Elementary School District, also known as Rio School District (the “School District”), on behalf of the Rio Elementary School District Community Facilities District No. 1 (the “Community Facilities District”).

This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and attached appendices, and the documents summarized or described in this Official Statement. A full review should be made of the entire Official Statement. The offering of the Series 2013 Bonds to potential investors is made only by means of the entire Official Statement.

Capitalized terms used but not defined in this Official Statement have the definitions set forth in the Fiscal Agent Agreement (as defined below).

The School District. The School District covers approximately 15.5 square miles in Ventura County (the “County”), including a portion of the City of Oxnard (the “City”) and unincorporated County territory. The School District provides K-8 public education to more than 4,600 students in six elementary and two middle schools. For economic and demographic information regarding the area in and around the School District, see APPENDIX A. The administration headquarters of the School District are located at 2500 Vineyard Avenue, Oxnard, California.

Authority for Issuance of the Series 2013 Bonds. The Series 2013 Bonds are issued under the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), certain resolutions adopted by the Board of Trustees of the School District (the “Board”) and a Fiscal Agent Agreement dated as of November 1, 2005, as supplemented by a First Supplemental Fiscal Agent Agreement dated as of November 1, 2013 (the “First Supplemental Fiscal Agent Agreement” and, collectively, the “Fiscal Agent Agreement”), between the School District, on behalf of the Community Facilities District, and Zions First National Bank, as fiscal agent (the “Fiscal Agent”). See “THE SERIES 2013 BONDS – Authority for Issuance.”

Additional Bonds. The Board and the eligible landowner voters in the Community Facilities District have authorized the issuance of bonds in an aggregate principal amount not to exceed $75,000,000. See “THE SERIES 2013 BONDS – Authority for Issuance.” The Series 2013 Bonds are the second series of bonds to be issued under this authorization, and are issued on a parity with the bonds of the School District captioned “$30,725,000 Rio Elementary School District Community Facilities District No. 1 Special Tax Bonds, Series 2005” (the “Series 2005 Bonds”). Additional series of bonds may be issued that are payable from the Special

Taxes (as defined below) on a parity with the Series 2005 Bonds and the Series 2013 Bonds upon the satisfaction of the conditions contained in the Fiscal Agent Agreement (collectively, “Additional Bonds” and together with the Series 2005 Bonds and the Series 2013 Bonds, the “Bonds”). After the issuance of the Series 2013 Bonds, the Community Facilities District will have $16,275,000 of remaining Bond authorization. See “SECURITY FOR THE BONDS – Issuance of Additional Bonds.”

The Community Facilities District. The Community Facilities District was established by the School District on May 3, 2005, under the Act, following a public hearing and a landowner election at which the qualified electors of the Community Facilities District authorized the Community Facilities District to incur bonded indebtedness and approved the levy of special taxes.

The Community Facilities District was formed in accordance with a School Facilities Mitigation Agreement dated as of October 15, 2002 (the “Mitigation Agreement”), by and between the School District and RiverPark A, L.L.C. (“RiverPark A”) and RiverPark B, L.L.C. (“RiverPark B” and together with RiverPark A, the “Original Developers”), the predecessors- in-interest to the current property owners. See “FACILITIES TO BE FINANCED WITH PROCEEDS OF THE SERIES 2013 BONDS.”

The property within the City’s RiverPark Specific Plan (as amended, the “RiverPark Specific Plan”) encompasses approximately 702 acres and is entitled for the construction of up to 3,043 residential units and up to 2,098,000 square feet of commercial space. The property within the Community Facilities District consists of approximately 660 acres within the RiverPark Specific Plan area and is entitled for the construction of all of the maximum 3,043 residential units and up to 1,573,000 square feet of the commercial space. The planned residential portion includes a wide variety of detached and attached product types, including units designated as affordable. The planned commercial portion includes retail, hotel, convention and office uses. The development within the Community Facilities District will also include various public facilities and infrastructure (together with the residential and commercial development within the Community Facilities District, the “Development”). See “THE DEVELOPMENT.”

Purpose of the Series 2013 Bonds. Proceeds of the Series 2013 Bonds will be used primarily to finance the costs of school facilities owned or to be owned and operated by the School District which will benefit the property in the Community Facilities District in satisfaction of the obligation to pay school facilities fees under the Mitigation Agreement. Proceeds of the Series 2013 Bonds will also be used to make a deposit to the Bond Reserve Fund, and pay the costs of issuing the Series 2013 Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS” and “FACILITIES TO BE FINANCED WITH PROCEEDS OF THE SERIES 2013 BONDS.”

Security and Sources of Payment for the Series 2013 Bonds. The Series 2013 Bonds are secured by and payable from a first pledge of the proceeds of the special taxes levied on the property in the Community Facilities District (the “Special Taxes”) in accordance with the “Rate and Method of Apportionment of Special Tax”, which was adopted by the Board, as legislative body of the Community Facilities District, and approved by the qualified electors of the Community Facilities District (the “Rate and Method”). The Series 2013 Bonds will be additionally secured by all moneys deposited in the Interest Fund, the Principal Fund, the Bond Reserve Fund and (until disbursed as provided in the Fiscal Agent Agreement) the Special Tax Fund. See “SECURITY FOR THE BONDS” and “APPENDIX B - RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”

The School District has covenanted in the Fiscal Agent Agreement to cause foreclosure proceedings to be commenced and prosecuted against parcels with specified delinquent installments of the Special Tax. For a more detailed description of the foreclosure covenant, see “SECURITY FOR THE BONDS - Foreclosure of Delinquent Parcels.”

Property Ownership and Development Status. The property in the Community Facilities District subject to the Special Tax in Fiscal Year 2013-14 is in the process of development and currently under diversified ownership, summarized as follows as of July 1, 2013:

• Residential for sale property responsible for approximately 62% of the Fiscal Year 2013-14 Special Tax levy, which is owned primarily by individual homeowners.

• Residential rental property responsible for approximately 21% of the Fiscal Year 2013- 14 Special Tax levy, which is owned primarily by four separate, unrelated entities.

• Commercial property responsible for approximately 17% of the Fiscal Year 2013-14 Special Tax levy, which is owned primarily by two entities, SOCM I, LLC (the developer of The Collection office and retail center) and Target Corporation (owner of the Target store in The Collection).

For detailed information about the current property ownership and actual and proposed development of the property in the Community Facilities District, see “PROPERTY OWNERSHIP” and “THE DEVELOPMENT.”

Appraisal. An appraisal of the property within the Community Facilities District dated August 20, 2013 (the “Appraisal”), was prepared by Bruce Hull & Associates, Ventura, California (the “Appraiser”), in connection with issuance of the Series 2013 Bonds. The purpose of the appraisal was to estimate the current market value of the fee simple interest of the taxable parcels in the Community Facilities District as of an August 1, 2013, date of value. Subject to the assumptions contained in the Appraisal, the Appraiser estimated that the fee simple interest in the taxable property within the Community Facilities District, subject to the lien of the Special Taxes and any other special tax and assessment liens, had an estimated aggregate value of $677,076,167. See “THE COMMUNITY FACILITIES DISTRICT – Appraised Property Value” and “APPENDIX C – Appraisal Report.”

Market Absorption Study. A market absorption study with respect to the proposed development of the property within the Community Facilities District dated June 17, 2013, and revised on July 26, 2013 (the “Market Absorption Study”), was prepared by Empire Economics, Inc., Capistrano Beach, California (the “Market Consultant”) in connection with issuance of the Series 2013 Bonds. The purpose of the Market Absorption Study was to conduct a comprehensive analysis of the product mix characteristics, macroeconomic factors, and microeconomic factors as well as the potential risk factors that are expected to influence the absorption of the homes in the Community Facilities District, in order to arrive at conclusions regarding the following: (a) for the currently active as well as the forthcoming residential and commercial projects, their estimated absorption schedules, from market-entry to build-out on an annualized basis, and (b) a discussion of potential economic and real estate risk factors that may adversely impact the marketability of the remaining residential and commercial products to be absorbed. See "THE DEVELOPMENT – Market Absorption Study” and “APPENDIX D – Market Absorption Study.”

Mortgage Study. A mortgage study with respect to the homes within the Community Facilities District dated June 17, 2013, and revised on July 26, 2013 (the “Mortgage Study”), was prepared by the Market Consultant in connection with issuance of the Series 2013 Bonds. The purpose of the Mortgage Study was to discuss the mortgage loan characteristics, estimated levels of current equity and special tax / mortgage loan duress of the current homeowners within the Community Facilities District. See "THE COMMUNITY FACILITIES DISTRICT – Mortgage Study” and “APPENDIX E – Mortgage Study.”

Risk Factors Associated with Purchasing the Series 2013 Bonds. Investment in the Series 2013 Bonds involves risks that may not be appropriate for some investors. See “SERIES 2013 BOND OWNERS' RISKS” 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 Series 2013 Bonds.

ESTIMATED SOURCES AND USES OF FUNDS

The proceeds from the sale of the Series 2013 Bonds will be deposited into the following funds established under the Fiscal Agent Agreement:

SOURCES

Principal Amount of Series 2013 Bonds $28,000,000.00 Less: Net Original Issue Discount (29,732.70) Less: Underwriter's Discount (280,000.00) Total Sources $27,690,267.30

USES

Series 2013 Bonds Facilities Account $23,696,013.19 School District Support Facility Fund 1,139,971.71 Bond Reserve Fund [1] 2,558,282.40 Costs of Issuance Fund [2] 296,000.00 Total Uses $27,690,267.30

[1] Equal to the amount necessary to increase the balance of the Bond Reserve Fund to the parity Bond Reserve Requirement as of the date of delivery of the Series 2013 Bonds. [2] Includes, among other things, the fees and expenses of Bond Counsel and Disclosure Counsel, the cost of printing the Preliminary and final Official Statements, fees and expenses of the Fiscal Agent, the cost of the Appraisal, the cost of the Market Absorption Study, the cost of the Mortgage Study and the fees of the Special Tax Consultant.

FACILITIES TO BE FINANCED WITH PROCEEDS OF THE SERIES 2013 BONDS

A portion of the proceeds from the sale of the Series 2013 Bonds will be deposited in the Series 2013 Bonds Facilities Account of the Acquisition Fund and used to pay costs associated with the construction of certain school facilities authorized to be funded by the Community Facilities District (the “Facilities”) in accordance with the terms of the Fiscal Agent Agreement and the Acquisition Agreement (as defined below). The development status of the Facilities is briefly described below.

School Facilities Mitigation Agreement

The Original Developers and the School District entered into the Mitigation Agreement in order to mitigate the impacts from the approximately 2,8051 residential units originally entitled by the RiverPark Specific Plan. Under the Mitigation Agreement, a combination of schools (which includes the Facilities) must be constructed to serve up to 1,638 students in kindergarten through eighth grade. Formation of the Community Facilities District and issuance of the Bonds are contemplated by the Mitigation Agreement as a means of financing the construction of such schools.

Under the Mitigation Agreement, the Original Developers were responsible for paying the cost of construction of the required schools (subject to provisions authorizing the formation of the Community Facilities District, the issuance of Bonds, and the acceptance of available State funding), and the School District will not be required to use its general fund revenues to fund such construction or to repay or guarantee repayment of any related debts. See “– Description of Facilities” below.

The sole member of both of the Original Developers is RiverPark Development, L.L.C., a Delaware limited liability company (“RiverPark Development”). The sole member of RiverPark Development is Riverpark Legacy, LLC (“Riverpark Legacy” and together with RiverPark Development and the Original Developers, the “Master Developer Entities”).See “PROPERTY OWNERSHIP – Current Property Ownership,” herein.

Acquisition Agreement

The School District and the Original Developers entered into an Acquisition Agreement, dated as of September 1, 2005 (the “Acquisition Agreement”), which provides the terms on which the Original Developers have constructed or are to construct the Facilities (in accordance with the Mitigation Agreement) and the School District is required to pay for and acquire such Facilities or specific components thereof that can be separately identified, inspected and completed, as further described in the Acquisition Agreement (each a “Discrete Component”).

The Original Developers agreed to construct and deliver the Facilities to the School District, and the School District agreed to reimburse the Original Developers for costs incurred in construction of such Facilities or any Discrete Component thereof, including costs incurred in acquiring the underlying land on which the Facilities are located, solely from certain amounts on deposit from time to time in the Acquisition Fund and from certain amounts of State funding on deposit from time to time in a fund maintained by the School District.

1 As of September 15, 2013, development approvals total 3,043 residential units in the Community Facilities District. See “THE DEVELOPMENT – Overall Development Plan and Development Status.”

Description of Facilities

The Facilities eligible to be financed with the proceeds of the Bonds consist of school facilities owned or to be owned and operated by the School District, including two new elementary schools, a new intermediate school, sites, structures, and furniture, fixtures, and equipment, and any other facilities or equipment, such as administrative and support facilities, offices and equipment, buses, bus storage facilities, maintenance facilities and warehouses to be owned by the School District, provided that the Facilities must have a useful life of five years or longer.

The three schools that comprise the Facilities (the “Required Schools”) include two elementary schools (grades K-6) and one intermediate school (grades 7-8), all of which are within the boundaries of the Community Facilities District. One of the elementary schools (Rio Del Mar Elementary School) and the intermediate school (Rio Vista Intermediate School) have been completed and transferred to the School District.

Proceeds of the Series 2005 Bonds were used to partially reimburse the Original Developers for the costs of construction and equipping of the first elementary school and a portion of the intermediate school.

Proceeds of the Series 2013 Bonds and Additional Bonds (as defined in “SECURITY FOR THE BONDS – Issuance of Additional Bonds”) will be used to partially reimburse the Original Developers for additional capital costs of the intermediate school and a portion of the capital costs of the second elementary school.

The Original Developers currently estimate the total cost for the Required Schools to be approximately $113 million, with approximately $61 million of the costs having been or expected to be financed from the proceeds of the Series 2005 Bonds, the Series 2013 Bonds and Additional Bonds. In addition, it is anticipated that approximately $36.4 million in State funding will be available to finance costs related to the construction of the Required Schools. To date, the Original Developers have received approximately $23 million from the proceeds of the Series 2005 Bonds and approximately $29 million in State funding for the construction of the first elementary school and the intermediate school. The Original Developers are obligated to contribute their own moneys in an amount sufficient, when added to the amounts available from the proceeds of the Series 2005 Bonds, the Series 2013 Bonds, any Additional Bonds, and any State funding, to complete construction of the remaining elementary school.

The second elementary school, to be known as “RiverPark West Elementary School,” is expected to consist of approximately 44,000 square feet of classroom and ancillary space accommodating approximately 540 students, and will be located on approximately 10 acres of property within the School District at the intersection of Ventura Road and Forest Park Boulevard in the City. The Riverpark West Elementary School construction documents were approved in June 2007 by the Department of State Architect plan check review. The site has been reviewed and approved by the State Department of Toxic Substances Control with a “No Further Action” letter issued, and State Department of Education site approvals have been received. To date, approximately $1,565,000 has been spent on the Riverpark West Elementary School towards completion and approval of Department of State Architect Stamped Drawings, site approvals. However, these plans have expired as a result of the delay in the need for the school and a change in building codes which will require a building code update to the currently designed school.

Pursuant to the Mitigation Agreement, delivery of the second elementary school to the School District was originally required to take place prior to the issuance of the 1,600th certificate of occupancy for a residential unit within the Community Facilities District. However, the School District and the Original Developers have agreed that although such milestone has occurred, the School District does not need the second elementary school at this time. The Original Developers have instead agreed to ensure that all permits and approvals secured by the Original Developers will remain valid, and that the Original Developers will commence construction of the second elementary school within eight months after the School District directs the Original Developers to commence construction. The construction schedule for this school facility remains under review and construction timing will correspond with the residential absorption rates and student generation in the School District.

The total cost of the second elementary school has been estimated to be approximately $27.8 million.

It is anticipated that the Original Developers will receive approximately $7.4 million in additional State funding for the second elementary school. It is also anticipated that the Original Developers will receive approximately $23.7 million from the proceeds of the Series 2013 Bonds and $15 million from the proceeds of future Additional Bonds as reimbursement for costs associated with the construction of the Required Schools, when, and if, such Additional Bonds are issued; provided, however, that no assurance can be given that such Additional Bonds will be issued in the future or, if issued, that the principal amount of such Additional Bonds will be sufficient to provide such estimated proceeds for reimbursement of such costs. See “SECURITY FOR THE BONDS – Issuance of Additional Bonds.”

Assuming the Original Developers receive all of the State funding and the full anticipated amounts from the proceeds of the Series 2013 Bonds and the Additional Bonds, the remaining budget shortfall to complete the second elementary school would be approximately $15.6 million. The Original Developers expect to fund such shortfall from equity from its members as well as ongoing payments to the Master Developer Entities pursuant to the OPA.

THE SERIES 2013 BONDS

This section generally describes the terms of the Series 2013 Bonds contained in the Fiscal Agent Agreement, which is summarized in more detail in APPENDIX F. Capitalized terms used but not defined in this section are defined in APPENDIX F.

General Provisions

Maturity and Denominations. The Series 2013 Bonds will mature on September 1, in the years and in the amounts set forth on the inside cover page of this Official Statement. The Series 2013 Bonds will be issued in fully registered form in denominations of $5,000 each or any integral multiple of $5,000.

Interest. The Series 2013 Bonds will be dated their date of delivery and will bear interest at the annual rates set forth on the inside cover page of this Official Statement, payable semiannually on each March 1 and September 1, commencing March 1, 2014 (each, an “Interest Payment Date”). Interest will be calculated on the basis of a 360-day year composed of twelve 30-day months.

Method of Payment. The principal or Redemption Price of the Series 2013 Bonds shall be payable to the Owner thereof upon surrender thereof in lawful money of the United States of America at the corporate trust office of the Fiscal Agent in Los Angeles, California. Interest on the Series 2013 Bonds shall be payable by check mailed or, upon the written request of any Owner of $1,000,000 or more in aggregate principal amount of the Series 2013 Bonds who has provided the Fiscal Agent with wire transfer instructions at least five days before the applicable Regular Record Date, by wire transfer on each interest payment date to the Owner thereof as of the close of business on the Regular Record Date.

As long as Cede & Co. is the registered owner of the Series 2013 Bonds, as described below, payments of the principal of, premium, if any, and interest on the Series 2013 Bonds will be made directly to DTC, or its nominee, Cede & Co.

Record Date. The Regular Record Date for the Series 2013 Bonds is defined in the Fiscal Agent Agreement as the 15th day of the calendar month immediately preceding the relevant Interest Payment Date.

DTC and Book-Entry Only System. DTC will act as securities depository for the Series 2013 Bonds. The Series 2013 Bonds will be issued as fully-registered securities registered initially in the name of Cede & Co. (DTC’s partnership nominee). Ultimate purchasers of Series 2013 Bonds will not receive physical certificates representing their interest in the Series 2013 Bonds. So long as the Series 2013 Bonds are registered in the name of Cede & Co., as nominee of DTC, references in this Official Statement to the “Owners” mean Cede & Co., and not the purchasers or Beneficial Owners of the Series 2013 Bonds. See APPENDIX G.

Authority for Issuance

Community Facilities District Proceedings. As required by the Act, the Board of the School District has taken the following actions with respect to establishing the Community Facilities District and authorizing issuance of the Series 2013 Bonds:

Resolutions of Intention: On March 1, 2005, the Board adopted Resolution No. 0405-23 stating its intention to establish the Community Facilities District, authorize the levy of a special tax therein and incur bonded indebtedness in an amount not to exceed $75,000,000 in the aggregate within the Community Facilities District for the purpose of financing the Facilities. See “FACILITIES TO BE FINANCED WITH PROCEEDS OF THE SERIES 2013 BONDS.”

Resolution of Formation: On May 3, 2005, immediately following a noticed public hearing, the Board adopted Resolution No. 0405-25 (the “Resolution of Formation”), which established the Community Facilities District, authorized the levy of a special tax within the Community Facilities District, called an election by the landowners within the Community Facilities 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 May 17, 2005, an election was held within the Community Facilities District in which the then qualified electors of the Community Facilities District approved a ballot proposition authorizing the issuance of up to $75,000,000 in bonds to finance the acquisition and construction of the Facilities, the levy of a special tax and the establishment of an appropriations limit for the Community Facilities District. On the same date, the Board adopted Resolution No. 0405-31 pursuant to which the Board of Education approved the canvass of the votes and declared the Community Facilities 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.

Ordinance Levying Special Taxes: On May 17, 2005, the Board adopted an ordinance levying the Special Tax within the Communities Facilities District beginning with the 2005-06 fiscal year.

Special Tax Lien and Levy: A Notice of Special Tax Lien was recorded in the real property records of Ventura County on June 21, 2005.

Resolution Authorizing Issuance of the Series 2005 Bonds: On September 15, 2005, the Board adopted Resolution 0506-03 approving issuance of the Series 2005 Bonds in an amount not to exceed $35,000,000.

Resolution Authorizing Issuance of the Series 2013 Bonds: On September 18, 2013, the Board adopted Resolution No. 1314/02 approving issuance of the Series 2013 Bonds in an amount not to exceed $28,000,000.

School District’s Goals and Policies. As required by the Act, the School District adopted “Local Goals and Policies Concerning the Use of the Mello-Roos Community Facilities Act of 1982” (the “Goals and Policies”) on March 1, 2005. The Goals and Policies establish an order of priority for financing by community facilities districts and other requirements for Mello- Roos financings. The School District has determined that issuance of the Series 2013 Bonds conforms with the School District’s Goals and Policies.

Redemption

Optional Redemption from Sources Other than Prepayments. The Series 2013 Bonds maturing on or after September 1, 2024, are subject to redemption prior to their respective stated maturities, at the option of the School District, from any source of available funds, as a whole or in part (by such maturities as may be specified by the School District and by lot within a maturity) on any date on or after September 1, 2023, at a redemption price equal to the principal amount of the Series 2013 Bonds called for redemption, plus accrued interest to the date fixed for redemption, without premium.

Mandatory Sinking Fund Redemption. The Series 2013 Bonds maturing on September 1, 2039 (the “Term Bonds”), are subject to redemption prior to their stated maturity in part, at random from Mandatory Sinking Account Payments in the following amounts and on the following dates, at the principal amount thereof on the date fixed for redemption, without premium, but which amounts will be proportionately reduced by the principal amount of the respective Term Bonds optionally redeemed:

Term Bonds Maturing September 1, 2039

Redemption Date Principal Amount (September 1) Redeemed 2034 $1,000,000 2035 1,095,000 2036 4,125,000 2037 4,450,000 2038 4,800,000 2039 (maturity) 5,175,000

Mandatory Redemption from Special Tax Prepayments. The Series 2013 Bonds are subject to redemption by the School District prior to their respective stated maturities, as a whole or in part on any Interest Payment Date from prepayments of the Special Taxes, at the following redemption prices (expressed as a percentage of the principal amount of Series 2013 Bonds called for redemption), together with accrued interest thereon to the date fixed for redemption:

Redemption Date Redemption Price March 1, 2014 through March 1, 2021 103% September 1, 2021 and March 1, 2022 102 September 1, 2022 and March 1, 2023 101 September 1, 2023 and thereafter 100

Notice of Redemption. The Fiscal Agent will mail notice of redemption not fewer than 30 days nor more than 60 days prior to the redemption date to the respective Owners of any Series 2013 Bonds designated for redemption at their addresses appearing on its bond register for the Series 2013 Bonds. If a Series of Bonds is not then registered solely to a Securities Depository, the Fiscal Agent shall also give notice of redemption of Series 2013 Bonds to the Securities Depositories and the Information Service (at the same time it mails notice of redemption to the Owners) by registered or overnight mail, or by such other method as may be acceptable to such institutions.

However, while the Series 2013 Bonds are subject to DTC’s book-entry system, the Fiscal Agent will be required to give notice of redemption only to DTC as provided in the letter of representations executed by the School District and received and accepted by DTC. DTC and the Participants will have sole responsibility for providing any such notice of redemption to the beneficial owners of the Series 2013 Bonds to be redeemed. Any failure of DTC to notify any Participant, or any failure of Participants to notify the Beneficial Owner of any Series 2013 Bonds to be redeemed, of a notice of redemption or its content or effect will not affect the validity of the notice of redemption, or alter the effect of redemption set forth in the Fiscal Agent Agreement.

Defects in Notice or Procedure. Failure by the Fiscal Agent to give notice to the Information Service or any one or more of the Securities Depositories, or failure of any Owner to receive notice or any defect in any such notice, will not affect the sufficiency of the proceedings for redemption. A certificate by the Fiscal Agent that notice of redemption has been given as provided in the Fiscal Agent Agreement will be conclusive as against all parties to whom such notice was given, and no such party will be entitled to show that he or she failed to receive notice of redemption.

Failure by the Fiscal Agent to mail notice to any one or more of the respective Owners of any Bonds designated for redemption will not affect the sufficiency of the proceedings for redemption with respect to the Owner or Owners to whom such notice was mailed.

Rescission of Optional Redemption. The School District may, at its option, prior to the date fixed for optional redemption of the Series 2013 Bonds, rescind and cancel the notice of redemption, consistent with the provisions of the Fiscal Agent Agreement regarding redemption notices.

Selection of Series 2013 Bonds for Redemption in Part. If less than all the Outstanding Series 2013 Bonds of any maturity are to be redeemed, not more than 45 days prior to the redemption date the Fiscal Agent will select the particular Series 2013 Bonds to be redeemed from the Outstanding Bonds of such maturity that have not previously been called for redemption, in minimum denominations of $5,000, at random in any manner that the Fiscal Agent in its sole discretion deems appropriate and fair.

Effect of Redemption. If notice of redemption has been given as provided in the Fiscal Agent Agreement and if moneys for the payment of the redemption price of the Series 2013 Bonds to be redeemed plus interest accrued thereon to the date of redemption are held by the Fiscal Agent, on the designated redemption date (i) the Series 2013 Bonds to be redeemed will become due and payable at the redemption price plus accrued interest thereon to the designated date of redemption, (ii) interest on such Series 2013 Bonds will cease to accrue, (iii) such Series 2013 Bonds will cease to be entitled to any benefit or security under the Fiscal Agent Agreement and (iv) the Owners of such Series 2013 Bonds will have no rights in respect thereof except to receive payment of such redemption price plus accrued interest thereon to the date of redemption.

Upon surrender of any such Series 2013 Bond for redemption in accordance with the redemption notice, such Series 2013 Bond will be paid by the Fiscal Agent at the Redemption Price on each Interest Payment Date or date of redemption. Installments of interest due on or prior to the Redemption Date will be payable on each Interest Payment Date or date of redemption to the Owners of the Bonds on the relevant Record Dates according to the terms of such Bonds and the Fiscal Agent Agreement.

Registration, Transfer and Exchange

The following provisions regarding the exchange and transfer of the Series 2013 Bonds apply only during any period in which the Series 2013 Bonds are not subject to DTC’s book- entry system. While the Series 2013 Bonds are subject to DTC’s book-entry system, their exchange and transfer will be effected through DTC and the Participants and will be subject to the procedures, rules and requirements established by DTC. See APPENDIX G.

The Fiscal Agent will keep or cause to be kept, at its Corporate Trust Office, a register (the “Series 2013 Bond Register”) in which, subject to such reasonable regulations as it may prescribe, the Fiscal Agent shall provide for the registration and transfer of the Series 2013 Bonds. The Series 2013 Bond Register will at all times be open to inspection by the School District during regular business hours. Upon presentation for this purpose, the Fiscal Agent will, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, the ownership of the Series 2013 Bonds on the Series 2013 Bond Register.

Any Series 2013 Bond may be transferred upon the Series 2013 Bond Register, accompanied by delivery of a duly written instrument of transfer in a form acceptable to the Fiscal Agent, and otherwise subject to the reasonable regulations of the Fiscal Agent. Series 2013 Bonds may be exchanged at the Principal Office of the Fiscal Agent for an equivalent aggregate principal amount of Series 2013 Bonds of authorized denominations and of the same tenor and maturity, upon surrender thereof.

No service charge shall be made for any transfer or exchange of Bonds, but the Fiscal Agent will collect from the Owner requesting such transfer or exchange any tax or other governmental charge required to be paid with respect to such transfer or exchange.

Whenever any Series 2013 Bond or Series 2013 Bonds are surrendered for transfer or exchange, the School District will execute (and the Fiscal Agent will authenticate and deliver) a new Series 2013 Bond or Series 2013 Bonds of the same tenor and maturity and of an equivalent aggregate principal amount.

No transfers or exchanges of Series 2013 Bonds will be required to be made during the period established by the Fiscal Agent for the selection of Series 2013 Bonds for redemption or any Series 2013 Bond that has been selected for redemption in whole or in part (except the unredeemed portion of such Series 2013 Bond selected for redemption in part), from and after the date that such Series 2013 Bond has been selected for redemption.

DEBT SERVICE SCHEDULE

The following table presents the annual debt service on the Series 2005 Bonds and the Series 2013 Bonds (including sinking fund redemptions), assuming there are no optional redemptions.

Year Ending Series 2005 Series 2013 Series 2013 Series 2013 Total Debt September 1 Debt Service Bonds Principal Bonds Interest Debt Service Service 2014 $ 1,889,721 $ 155,000 $ 1,206,364.69 $ 1,361,364.69 $3,251,085.69 2015 1,926,946 40,000 1,474,081.26 1,514,081.26 3,441,027.52 2016 1,966,134 70,000 1,472,881.26 1,542,881.26 3,509,015.26 2017 2,006,909 55,000 1,470,781.26 1,525,781.26 3,532,690.26 2018 2,044,309 90,000 1,469,131.26 1,559,131.26 3,603,440.26 2019 2,083,269 125,000 1,465,531.26 1,590,531.26 3,673,800.26 2020 2,128,479 160,000 1,460,531.26 1,620,531.26 3,749,010.26 2021 2,168,979 200,000 1,454,131.26 1,654,131.26 3,823,110.26 2022 2,215,479 235,000 1,446,131.26 1,681,131.26 3,896,610.26 2023 2,257,479 280,000 1,436,731.26 1,716,731.26 3,974,210.26 2024 2,304,979 325,000 1,424,831.26 1,749,831.26 4,054,810.26 2025 2,351,041 375,000 1,411,018.76 1,786,018.76 4,137,060.02 2026 2,396,723 430,000 1,394,143.76 1,824,143.76 4,220,866.76 2027 2,441,766 485,000 1,374,793.76 1,859,793.76 4,301,559.76 2028 2,490,916 545,000 1,351,756.26 1,896,756.26 4,387,672.26 2029 2,543,660 610,000 1,325,868.76 1,935,868.76 4,479,528.76 2030 2,593,180 680,000 1,295,368.76 1,975,368.76 4,568,548.76 2031 2,645,420 750,000 1,261,368.76 2,011,368.76 4,656,788.76 2032 2,699,860 830,000 1,223,868.76 2,053,868.76 4,753,728.76 2033 2,750,980 915,000 1,182,368.76 2,097,368.76 4,848,348.76 2034 2,808,520 1,000,000 1,135,475.00 2,135,475.00 4,943,995.00 2035 2,866,700 1,095,000 1,080,475.00 2,175,475.00 5,042,175.00 2036 0 4,125,000 1,020,250.00 5,145,250.00 5,145,250.00 2037 0 4,450,000 793,375.00 5,243,375.00 5,243,375.00 2038 0 4,800,000 548,625.00 5,348,625.00 5,348,625.00 2039 0 5,175,000 284,625.00 5,459,625.00 5,459,625.00 Total: $51,581,448 $28,000,000 $32,464,508.63 $60,464,508.63 $112,045,958.15

SECURITY FOR THE BONDS

This section generally describes the security for the Series 2005 Bonds, the Series 2013 Bonds and any Additional Bonds under the Fiscal Agent Agreement, which is summarized in more detail in APPENDIX F. Capitalized terms used but not defined in the section are defined in APPENDIX F.

General

Pursuant to the Fiscal Agent Agreement, the principal of and interest and any redemption premium on the Bonds are secured by a pledge of and first lien on all of the Net Special Tax Revenues, any prepaid Special Taxes, and all amounts (including proceeds of the Bonds) held by the Fiscal Agent in the Special Tax Fund, Principal Fund, Interest Fund, and the Bond Reserve Fund, subject only to the provisions of the Fiscal Agent Agreement permitting the application thereof for other purposes as provided further therein. The foregoing pledged assets are pledged to the payment of Bonds without priority or distinction of one over the other and such pledged assets constitute a trust fund for the security and payment of the interest on and principal of the Bonds. The foregoing pledge is irrevocable until all of the Bonds are no longer Outstanding.

The term “Net Special Tax Revenues” is defined in the Fiscal Agent Agreement to mean the proceeds of the Special Taxes received by the School District, including any scheduled payments, interest and penalties thereon (excluding prepayments of Special Taxes) and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes in the amount of said lien and interest and penalties thereon, less Administrative Expenses.

The amount of Special Taxes required to pay Administrative Expenses is not pledged to the repayment of the Bonds. The term “Administrative Expenses” is defined in the Fiscal Agent Agreement to mean all expenses paid or incurred by the School District as administrator of the Community Facilities District to determine, levy, and collect the Special Taxes, including the expenses of collecting delinquencies; the administration of Bonds; the fees of consultants, legal counsel, paying agents, fiscal agents; the costs of collecting installments of the Special Taxes upon the general tax rolls; the cost of arbitrage calculation and arbitrage rebates; the cost of preparation of required reports; and any other costs reasonably required to administer the Community Facilities District as determined by the School District, up to a maximum of $87,874.45 in Fiscal Year 2013-14 (subject to an annual inflation adjustment of 2.00% per Fiscal Year).

Limited Obligation

The School District is not required to advance any moneys derived from any source other than the Special Tax Revenues, any prepaid Special Taxes, and other assets pledged under the Fiscal Agent Agreement for the payment of the principal or Redemption Price of or interest on the Bonds or for any other purpose of the Fiscal Agent Agreement. Neither the faith and credit of the School District, the Community Facilities District or the State of California, or any political subdivision thereof, is pledged to the payment of the Series 2013 Bonds.

Special Taxes

Levy of Special Taxes. The School District has agreed in the Fiscal Agent Agreement that, so long as any of the Bonds are Outstanding, and subject to the maximum rates of Special Taxes that it is authorized to levy on Taxable Property, it will annually levy and make provision for the collection of the Special Taxes in amounts that will be sufficient, after making reasonable allowances for contingencies and errors in the estimates, to yield proceeds equal to the amounts required for compliance with the Fiscal Agent Agreement, and that in any event will be sufficient for the following:

• To pay the interest on and principal of and Mandatory Sinking Account Payments for and redemption premiums, if any, and to accumulate funds to pay future debt service on the Bonds as they become due and payable;

• to replenish the Bond Reserve Fund to the Bond Reserve Requirement; and

• to pay all current Administrative Expenses as they become due and payable in accordance with the Fiscal Agent Agreement.

The School District has also agreed in the Fiscal Agent Agreement to have the Special Taxes collected in the same manner as ordinary ad valorem property taxes are collected and, except as otherwise provided in the School District’s covenant to foreclose (see “- Foreclosure of Delinquent Parcels,” below) and the Act, the Special Taxes are subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem property taxes.

The School District has also agreed in the Fiscal Agent Agreement not to consent to or conduct proceedings with respect to a reduction in the Special Taxes that may be levied in the Community Facilities District below an amount, for any Fiscal Year, equal to 110% of the aggregate of the debt service due and payable with respect to the Bonds in such Fiscal Year, plus 100% of the School District’s reasonable estimate of Administrative Expenses for such Fiscal Year; provided, however, that the School District may at any time reduce the Special Taxes to the extent that the amount of Special Taxes that would result from levying the Special Taxes at such maximum amounts would result in an amount of Special Taxes in excess of the amount required.

Duration of Special Tax Levy. The Special Taxes have been levied against Taxable Property in the Community Facilities District beginning with Fiscal Year 2005-06. The Rate and Method provides that Special Taxes will be levied and collected for a period of 35 years after the last Series of Bonds has been issued, but in no event after Fiscal Year 2046-47.

The Special Tax levy is limited to the maximum Special Tax rates set forth in the Rate and Method. Accordingly, no assurance can be given that, in the event of Special Tax delinquencies, the receipts of Special Taxes will, in fact, be collected in sufficient amounts in any given year to pay debt service on the Bonds.

Rate and Method

General. The Special Tax is levied and collected according to the Rate and Method, which provides the methodology by which the Board may annually determine the amount of the Special Tax that will need to be collected each fiscal year from the taxable property within the

Community Facilities District and to levy the Special Taxes within the Community Facilities District, up to the Maximum Special Tax.

The following is a synopsis of the provisions of the Rate and Method, which should be read in conjunction with the complete text of the Rate and Method, including its attachments, which is attached as APPENDIX B. The meaning of the capitalized terms used in this section are as set forth in APPENDIX B.

This section provides only a summary of the Rate and Method, and is qualified by more complete and detailed information contained in the entire Rate and Method attached as APPENDIX B.

Minimum Annual Special Tax Requirement. Annually, at the time of levying the Special Tax for the Community Facilities District, the Board will determine the minimum amount of money to be levied on Taxable Property in the Community Facilities District (the “Minimum Annual Special Tax Requirement”), which means the amount in any Fiscal Year equal to the sum of:

(i) 110% of the debt service on all outstanding Bonds,

(ii) the periodic costs of the Bonds, including but not limited to, credit enhancement costs and rebate payments on the Bonds,

(iii) the Administrative Expenses of the Community Facilities District,

(iv) the costs associated with the release of funds from an escrow account established in association with the Bonds,

(v) any amount required to establish or replenish any reserve funds (or account thereof) established in association with the Bonds, and

(vi) an amount equal to the reasonably anticipated delinquent Special Taxes, based on the delinquency rate for Special Taxes in the prior Fiscal Year,

less

(vii) any amount available to pay debt service or other periodic costs on the Bonds pursuant to any applicable bond indenture, fiscal agent agreement, or trust agreement.

Annual Determination of Property Categories for Administration of Special Tax. Each Fiscal Year,

(i) each Assessor's Parcel will be assigned to a Zone within the Community Facilities District, as set forth in Exhibits A and B of the Rate and Method;

(ii) each Assessor's Parcel will be classified as Exempt Property or Taxable Property;

(iii) each Assessor's Parcel of Taxable Property will be classified as Developed Property or Undeveloped Property; and

(iv) each Assessor's Parcel of Developed Property will be classified as Residential Property or Non-Residential Property.

Residential Property will be further classified based upon Unit type (i.e., Attached Unit, Detached Unit, Very Low Affordable Unit, Affordable Unit, High Density Unit A, High Density Unit D/F) and each Attached Unit and Detached Unit shall be classified by the Building Square Footage of such Unit. The classification of Exempt Property will take into consideration the Minimum Taxable Acreage of each Zone.

“Zone” generally means a geographic subdivision of the Community Facilities District, which has been subdivided into three Zones (Zone 1, Zone 2 and Zone 3), as set forth in Exhibit A of the Rate and Method.

“Exempt Property” means all parcels within the Community Facilities District that are exempt from the levy of Special Taxes, as described further below under the subheading “-Exemptions.”

“Taxable Property” means Assessor’s Parcels within the Community Facilities District that are not classified as Exempt Property.

“Developed Property” means all Assessor's Parcels in the Community Facilities District for which building permits for new construction were issued on or before January 1 of the prior Fiscal Year. Developed Property consists of either Residential Property or Non-Residential Property.

“Undeveloped Property” generally means all Assessor's Parcels in the Community Facilities District which are not classified as Developed Property.

"Residential Property" generally means all Assessor's Parcels of Developed Property for which a building permit has been issued for the construction of one or more residential dwelling units.

"Non-Residential Property" generally means Developed Property that is not Residential Property.

Maximum Annual Special Tax. The Maximum Annual Special Tax in any Fiscal Year is defined in the Rate and Method as follows:

Residential Property. The Maximum Annual Special Tax for each parcel of Residential Property within a particular Zone is the greater of (i) the applicable Assigned Annual Special Tax for such Zone, or (ii) the Backup Annual Special Tax for such Zone.

Non-Residential Property. The Maximum Annual Special Tax for each parcel of Non-Residential Property within a particular Zone is the greater of (i) the Assigned Annual Special Tax for such Zone, or (ii) the Backup Annual Special Tax for such Zone.

Undeveloped Property. The Maximum Annual Special Tax for each Assessor's Parcel classified as Undeveloped Property within a particular Zone is the Assigned Annual Special Tax for such Zone.

Assigned Annual Special Taxes. The Assigned Annual Special Tax in any Fiscal Year is defined in the Rate and Method as follows:

Residential Property. The Assigned Annual Special Tax for Residential Property is determined by reference to the tables below:

ASSIGNED ANNUAL SPECIAL TAX FOR RESIDENTIAL PROPERTY IN ZONE 1 FISCAL YEAR 2013-14

Assigned Annual Unit Type Building Square Footage Special Tax Per Unit Attached Unit < 1,400 $1,516.12 Attached Unit 1,400 - 1,699 1,572.16 Attached Unit 1,700 -1,999 1,796.30 Attached Unit 2,000 -2,199 2,093.28 Attached Unit > 2,200 2,317.42 Detached Unit < 1,750 1,963.84 Detached Unit 1,750 - 2,099 2,342.62 Detached Unit 2,100 - 2,299 2,571.80 Detached Unit 2,300 - 2,799 2,877.74 Detached Unit > 2,800 3,331.60 Very Low Affordable Unit NA 439.00 Affordable Unit NA 761.86 High Density Unit A NA 871.46 High Density Unit D/F NA 1,015.96

ASSIGNED ANNUAL SPECIAL TAX FOR RESIDENTIAL PROPERTY IN ZONE 2 FISCAL YEAR 2013-14

Assigned Annual Unit Type Building Square Footage Special Tax Per Unit Attached Unit < 1,400 $1,861.70 Attached Unit 1,400 - 1,699 1,917.74 Attached Unit 1,700 -1,999 2,141.88 Attached Unit 2,000 -2,199 2,438.86 Attached Unit > 2,200 2,662.98 Detached Unit < 1,750 2,309.42 Detached Unit 1,750 - 2,099 2,688.20 Detached Unit 2,100 - 2,299 2,917.36 Detached Unit 2,300 - 2,799 3,223.32 Detached Unit > 2,800 3,677.18 Very Low Affordable Unit NA 632.32 Affordable Unit NA 955.18 High Density Unit A NA 1,064.78 High Density Unit D/F NA 1,209.28

ASSIGNED ANNUAL SPECIAL TAX FOR RESIDENTIAL PROPERTY IN ZONE 3 FISCAL YEAR 2013-14

Each July 1, the Assigned Annual Special Tax for Residential Property within each Zone is increased by 2% of the amount in effect in the prior Fiscal Year.

Non-Residential Property. The Assigned Annual Special Tax rate for Non- Residential Property within any Zone in Fiscal Year 2013-14 is $0.88 per square foot of Floor Area, and such rate is increased by 2% of the amount in effect the prior Fiscal Year.

Undeveloped Property. The Assigned Annual Special Tax rate per acre of Undeveloped Property is determined by reference to the following table:

ASSIGNED ANNUAL SPECIAL TAX FOR UNDEVELOPED PROPERTY FISCAL YEAR 2013-14

Assigned Annual Zone Special Tax per Acre Zone 1 $26,132.94 Zone 2 30,949.80 Zone 3 15,051.78

Each July 1, the Assigned Annual Special Tax per acre of Acreage for each Assessor's Parcel of Undeveloped Property within each Zone is increased by 2% of the amount in effect the prior Fiscal Year.

Backup Annual Special Taxes. Each Fiscal Year, all Developed Property shall be subject to a Backup Annual Special Tax. The Backup Annual Special Tax per square foot of Acreage for a parcel of Developed Property is determined as follows:

BACKUP ANNUAL SPECIAL TAX FOR DEVELOPED PROPERTY FISCAL YEAR 2013-14

Backup Annual Zone Special Tax Zone 1 $0.60 per sq. ft. Zone 2 0.71 per sq. ft. Zone 3 0.34 per sq. ft.

Each July 1, the Backup Annual Special Tax per square foot of each parcel of Developed Property within each Zone shall be increased by 2% of the amount in effect the prior Fiscal Year.

Method of Calculating Special Tax Levy. Under the Rate and Method, for each Fiscal Year, the Community Facilities District administrator will determine the Special Tax Requirement to be collected in that Fiscal Year. A Special Tax will then be levied according to the following steps:

Step 1: The Community Facilities District will levy an Annual Special Tax on each parcel of Residential Property in an amount equal to the Assigned Annual Special Tax applicable to each such parcel.

Step 2: If the sum of the amounts collected in Step 1 is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Community Facilities District will levy Proportionately an Annual Special Tax on each parcel of Non-Residential Property, up to the applicable Assigned Annual Special Tax, to satisfy the Minimum Annual Special Tax Requirement.

Step 3: If the sum of the amounts collected in Steps 1 and 2 is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Community Facilities District will levy Proportionately an Annual Special Tax on each Assessor's Parcel of Undeveloped Property, up to the applicable Assigned Annual Special Tax, to satisfy the Minimum Annual Special Tax Requirement.

Step 4: If the sum of the amounts collected in Steps 1 through 3 is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Community Facilities District will additionally levy an Annual Special Tax Proportionately on each parcel of Residential Property, up to the applicable Maximum Annual Special Tax, to satisfy the Minimum Annual Special Tax Requirement.

Step 5: If the sum of the amounts collected in Steps 1 through 4 is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Community Facilities District will additionally levy an Annual Special Tax Proportionately on each parcel of Non-Residential Property, up to the applicable Maximum Annual Special Tax, to satisfy the Minimum Annual Special Tax Requirement.

Excess Assigned Annual Special Taxes. In any Fiscal Year, in which the Annual Special Taxes collected from Developed Property, pursuant to Step 1, above, exceed the Minimum Annual Special Tax Requirement, the School District will use such amount for any authorized uses in accordance with the Act, the Community Facilities District proceedings, and/or other applicable law.

Prepayment of Special Tax. The Special Tax obligation applicable to an Assessor’s Parcel may be prepaid in full or in part and the obligation of the Assessor’s Parcel to pay the Special Tax permanently satisfied in full or in part, provided that the terms set forth under the Rate and Method are satisfied, including the following conditions:

• There are no delinquent Special Taxes, penalties, or interest charges with respect to such Assessor’s Parcel at the time of prepayment.

• An owner of an Assessor’s Parcel intending to prepay the Special Tax obligation is required to provide the School District with written notice of intent to prepay. Within 30 days of receipt of such written notice, the School District will notify such owner of the prepayment amount for such Assessor’s Parcel.

• Under no circumstance will a prepayment be allowed unless the amount of Annual Special Taxes that may be levied on Taxable Property, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently outstanding Bonds in each future Fiscal Year and such prepayment wiIl not impair the security of all currently outstanding Bonds, as reasonably determined by the School District. Such determination will include identifying all Assessor's Parcels that are expected to become Exempt Property.

The Prepayment Amount is calculated based on the present value of future Special Taxes, a credit for reduction in debt service reserve requirements and the prepayment of Administrative Expenses, all as specified in APPENDIX B.

Termination of Special Tax. Annual Special Taxes will be levied for 35 Fiscal Years after the last series of Bonds has been issued, provided that Annual Special Taxes will not be levied after Fiscal Year 2046-47.

Exemptions. “Exempt Property” means (i) Assessor's Parcels owned by the State of California, Federal or other local governments, (ii) Assessor's Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor's Parcels used exclusively by a homeowners' association and (iv) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, provided that no such classification would reduce the sum of all Taxable Property in a given Zone to less than the Minimum Taxable Acreage as shown in the table below. Notwithstanding the above, the Board shall not classify an Assessor's Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property in a given Zone to less than the Minimum Taxable Acreage for such Zone. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than the Minimum Taxable Acreage in a given Zone will continue to be classified as Residential Property, Non-Residential Property or Undeveloped Property, as applicable, and wiIl continue to be subject to Special Taxes accordingly. In such a case that an Assessor's Parcel, not otherwise classified as Exempt Property, is acquired by the State of California, Federal or other local governments after the

issuance of a building permit, or after the issuance of Bonds, whichever occurred first, will continue to be subject to a Special Tax in accordance with Section B of the Rate and Method.

MINIMUM TAXABLE ACREAGE

Zone Minimum Taxable Acreage Zone 1 74.97 Zone 2 90.63 Zone 3 61.67

Bonding Capacity

The Community Facilities District is authorized to issue bonds in a total principal amount not to exceed $75,000,000 (the “Bonded Indebtedness Limit”) with respect to the Community Facilities District. See “THE SERIES 2013 BONDS – Authority for Issuance.”

The Series 2005 Bonds were issued in the initial principal amount of $30,725,000. Following the issuance of the Series 2013 Bonds in the amount of $28,000,000, the remainder of the authorized principal amount, $16,275,000, may be issued in one or more series of Additional Bonds secured by Special Taxes on a parity with the Series 2005 Bonds and the Series 2013 Bonds as needed to finance or refinance the costs of any Facilities (or to reimburse the School District or its designee for the payment of such costs). Any Additional Bonds may only be issued in compliance with the conditions set forth in the Fiscal Agent Agreement, as described below,

Issuance of Additional Bonds

Conditions for Issuance of Additional Bonds. The conditions precedent to the issuance of any Additional Bonds are set forth in the Fiscal Agent Agreement as follows:

(A) No Default. No Event of Default may have occurred and then be continuing.

(B) Bond Reserve Fund. Subject to the provisions of the Fiscal Agent Agreement, any Supplemental Fiscal Agent Agreement providing for the issuance of such series of Additional Bonds must require that the balance in the Bond Reserve Fund, promptly upon the receipt of the proceeds of the sale of such series of Additional Bonds, be increased, if necessary, to an amount at least equal to the Bond Reserve Requirement with respect to all Bonds to be considered outstanding upon the issuance of such series of Additional Bonds. The deposit may be made from the proceeds of the sale of such series of Additional Bonds or from other funds of the School District or from both such sources or in the form of a letter of credit, an insurance policy, or a surety bond as described in such Supplemental Fiscal Agent Agreement.

(C) Principal Amount. The aggregate principal amount of Bonds issued under the Fiscal Agent Agreement or any Supplemental Fiscal Agent Agreement may not exceed the amount authorized pursuant to the Act and shall not exceed any other limitation imposed by law or by any Supplemental Fiscal Agent Agreement.

(D) Value-to-Lien Ratios - Aggregate.

Developed Property. The aggregate fair market value of all Developed Property that is Taxable Property (and the then existing private improvements thereon) on the date of the adoption of the Supplemental Fiscal Agent Agreement authorizing the issuance of such Additional Bonds (based on either the assessed valuations thereof as contained in the most recent equalized assessment roll of the County or an appraisal performed within three months of the date of issuance of such Additional Bonds by an appraiser selected by the School District who is State certified and a member of the Appraisal Institute (MAl) who will apply the standards and methods for appraisals described in the School District's Local Goals and Policies Concerning the Use of the Mello-Roos Community Facilities Act of 1982), must be equal to at least four times the sum of

(i) the aggregate principal amount of all Bonds to be outstanding after the issuance of such Additional Bonds payable from Special Taxes on such Developed Property, plus

(ii) the aggregate principal amount of all outstanding special assessment bonds that are payable from special assessments levied on such Developed Property, plus

(iii) the proportion of the aggregate principal amount of all outstanding bonds issued under the Act (other than the Bonds) that are payable from Special Taxes to be levied on such Developed Property.

Undeveloped Property. The aggregate fair market value of all Undeveloped Property that is Taxable Property on the date of the adoption of the Supplemental Fiscal Agent Agreement authorizing the issuance of such Additional Bonds (based on either the assessed valuations thereof as contained in the most recent equalized assessment roll of the County or an appraisal performed within three months of the date of issuance of such Additional Bonds by an appraiser selected by the School District who is State certified and a member of the Appraisal Institute (MAl) who shall apply the standards and methods for appraisals described in the School District's Local Goals and Policies Concerning the Use of the Mello-Roos Community Facilities Act of 1982), must be equal to at least three times the sum of

(i) the aggregate principal amount of all Bonds to be Outstanding after the issuance of such Additional Bonds payable from Special Taxes on Undeveloped Property, plus

(ii) the aggregate principal amount of all outstanding special assessment bonds that are payable from special assessments levied on the Undeveloped Property, plus

(iii) the proportion of the aggregate principal amount of all outstanding bonds issued under the Act (other than the Bonds) that are payable from Special Taxes to be levied on the Undeveloped Property.

(E) Debt Service Coverage Ratio. The amount of Net Special Taxes that may be collected in each Bond Year following issuance of the series of Additional Bonds by application of the Rate and Method must be no less than 110% of the aggregate of

Annual Debt Service due and payable with respect to all Bonds to be outstanding in such Bond Year, as determined by an Independent Financial Consultant.

(F) Exclusion of Delinquent Parcels. The value of the Delinquent Parcels of Developed Property and Undeveloped Property must be excluded from the calculation of the value-to-lien ratio and debt service coverage ratios described in clauses (D) and (E) above.

(G) Payment Dates. The principal payments of such series of Additional Bonds must be due on the Principal Payment Date in each year in which principal is to be paid and the interest on such series of Additional Bonds must be due on each Interest Payment Date in each year, as appropriate.

Nothing contained in this Official Statement or the Fiscal Agent Agreement will prevent or be construed to prevent the Supplemental Fiscal Agent Agreement when providing for the issuance of a series of Additional Bonds from pledging or otherwise providing, in addition to the security given or intended to be given by the Fiscal Agent Agreement, additional security for the benefit of such series of Additional Bonds or any portion thereof.

Foreclosure of Delinquent Parcels

Sale of Property for Nonpayment of Taxes. The Fiscal Agent Agreement provides that the Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described below and in the Act, is to be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is subject to sale by the County.

Foreclosure Under Mello-Roos Act. Under Section 53356.1 of the Act, if any delinquency occurs in the payment of the Special Tax, the School District may order the institution of a Superior Court action to foreclose the lien therefor within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at judicial foreclosure sale.

Foreclosure Covenant. Under the Fiscal Agent Agreement, the School District covenants that it will order, cause to be commenced, and thereafter diligently prosecute to judgment (unless such delinquency is brought current), an action in the superior court to foreclose the lien of any Special Tax or installment thereof not paid when due, as provided in the following paragraph. On or about February 15 and June 15 of each Fiscal Year, the School District will compare the amount of Special Taxes to be collected on the December 10 and April 10 installments of the secured property tax bills to the amount of Special Taxes actually received by the School District in said installments, and proceed as set forth below:

Individual Delinquencies. If the School District determines that any single parcel subject to the Special Tax in the Community Facilities District is delinquent in the payment of Special Taxes in the aggregate amount of $5,000 or more, then the School District will send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner within 45 days of such determination, and (if the delinquency remains uncured) foreclosure proceedings will be commenced by the School District within 90 days of a June 15 determination.

Aggregate Delinquencies. If the School District determines that the total amount of delinquent Special Taxes for the prior Fiscal Year (after both the first and second installments) for the entire Community Facilities District (including the total of individual delinquencies under the paragraph above) exceeds 5% of the total Special Taxes due and payable for the prior Fiscal Year, the School District will notify or cause to be notified all property owners who are then delinquent in the payment of Special Taxes and demand immediate payment of the delinquency within 45 days of a June 15 determination, and will commence foreclosure proceedings within 90 days of a June 15 determination against each parcel of land in the Community Facilities District with a Special Tax delinquency.

Sufficiency of Foreclosure Sale Proceeds; Foreclosure Limitations and Delays. No assurances can be given that the real property subject to a judicial foreclosure sale will be sold or, if sold, that the proceeds of sale will be sufficient to pay any delinquent Special Tax installment. The Act does not require the School District to purchase or otherwise acquire any lot or parcel of property foreclosed upon if there is no other purchaser at such sale.

Section 53356.6 of the Act requires that property sold by foreclosure be sold for not less than the amount of judgment in the foreclosure action, plus post-judgment interest and authorized costs, unless the consent of the owners of 75% of the outstanding Bonds is obtained. However, under Section 53356.6 of the Act, the School District, as judgment creditor, is entitled to purchase any property sold at foreclosure using a “credit bid,” where the School District could submit a bid crediting all or part of the amount required to satisfy the judgment for the delinquent amount of the Special Tax. If the School District becomes the purchaser under a credit bid, the School District must pay the amount of its credit bid into the Principal Fund, but this payment may be made up to 24 months after the date of the foreclosure sale.

Foreclosure by court action is subject to normal litigation delays, the nature and extent of which are largely dependent on the nature of any defense by the debtor and the Superior Court calendar. Also, the ability of the School District to foreclose the lien of delinquent unpaid Special Taxes may be limited in certain instances and may require prior consent of the property owner if the property is owned by or in receivership of the Federal Deposit Insurance Corporation (the “FDIC”). See “SERIES 2013 BOND OWNERS’ RISKS – Exempt Properties.”

No Teeter Plan. Because the County has not elected to apply the procedures of the “Teeter Plan” (which is the County's Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code) to special taxes, collections of the Special Taxes remitted to the School District will reflect actual delinquencies.

Allocation of Special Tax Revenues; Special Tax Fund

Set Asides for Administrative Expenses and Prepayments. Under the Fiscal Agent Agreement, the School District has established and maintains a special fund designated the “Administrative Expense Fund.” Each time Special Tax Revenues are received, the School District is required to set aside and deposit into the Administrative Expense Fund the amount determined by the School District to be required to pay its budgeted Administrative Expenses for the period prior to the next expected distribution of Special Tax Revenues from the County or otherwise (taking into account in such determination the amounts already on deposit in or available in the Administrative Expense Fund for payment of Administrative Expenses). The

payment of Administrative Expenses is subject to a maximum of $87,874.45 per Fiscal Year in Fiscal Year 2013-14 (subject to an annual inflation adjustment of 2% per year).

Under the Fiscal Agent Agreement, the School District is required to transfer all prepaid Special Taxes to the Fiscal Agent. The Fiscal Agent is required to deposit the prepaid Special Taxes into the Prepayment Fund.

Deposit to Special Tax Fund. Under the Fiscal Agent Agreement, the Fiscal Agent has established and maintains the “Rio Elementary School District Community Facilities District No. 1 Special Tax Fund” (the “Special Tax Fund”). The Fiscal Agent is required to deposit the Net Special Tax Revenues received into the Special Tax Fund. All money in the Special Tax Fund is required to be held by the Fiscal Agent in trust and disbursed, allocated and applied solely to the uses and purposes hereinafter set forth in the Fiscal Agent Agreement.

Disbursements. Under the Fiscal Agent Agreement, the Fiscal Agent is required to transfer, from the Special Tax Fund into the following respective accounts and funds established and maintained by the Fiscal Agent, in the following order of priority, the requirements of each such fund (including the making up of any deficiencies in any such fund resulting from lack of Net Special Tax Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any deposit is made to any fund subsequent in priority:

(A) Interest Fund. On or before each Interest Payment Date, the Fiscal Agent is required to deposit in the Interest Fund an amount equal to the aggregate amount of interest becoming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date (excluding any amounts already on deposit therein or interest for which there are moneys deposited in the Interest Fund from the proceeds of any Series of Bonds or other source reserved as capitalized interest to pay such interest on such Interest Payment Date). No deposit is required to be made into the Interest Fund if the amount contained therein is at least equal to the interest to become due and payable on the next succeeding Interest Payment Date (but excluding any moneys on deposit in the Capitalized Interest Account of the Interest Fund from the proceeds of any Series of Bonds or other source and reserved as capitalized interest to pay interest on any future Interest Payment Dates following such Interest Payment Date).

(B) Principal Fund; Sinking Accounts. On or before each Principal Payment Date, the Fiscal Agent is required to deposit in the Principal Fund an amount equal to (a) the aggregate amount of principal becoming due and payable on the Outstanding Serial Bonds of all Series on the next succeeding Principal Payment Date, plus (b) the aggregate amount of the Mandatory Sinking Account Payments to be paid on the next succeeding Principal Payment Date; provided that, if the School District certifies to the Fiscal Agent that any principal payments shall be refunded on or prior to their respective due dates, no amounts are required be set aside towards the principal to be refunded. No deposit is required to be made into the Principal Fund so long as such fund contains (i) moneys sufficient to pay the principal of all Serial Bonds of all Series issued hereunder and then Outstanding and maturing by their terms within the next twelve months, plus (ii) the aggregate of all Mandatory Sinking Account Payments required to be made in such twelve-month period, but less any amounts deposited into the Principal Fund during such twelve-month period and theretofore paid from the Principal Fund to redeem or purchase Term Bonds during such twelve month period, and less any principal payments to be refunded on or prior to their respective due dates.

(C) Bond Reserve Fund. On or before each Interest Payment Date, the Fiscal Agent is required to deposit in the Bond Reserve Fund (except as otherwise provided in the Fiscal

Agent Agreement for the funding and application of the Bond Reserve Fund), the amount required to restore the balance in the Bond Reserve Fund to an amount equal to the Bond Reserve Requirement. The Fiscal Agent is required to promptly notify the School District of any deficiencies in the Bond Reserve Fund.

(D) Surplus Fund. The Fiscal Agent is required to transfer to the School District all money remaining in the Special Tax Fund on September 5 of each year, after transferring all of the sums required to be transferred therefrom on or prior to such date by the provisions of the foregoing paragraphs (A), (B), and (C) above, for deposit into the Surplus Fund. The School District shall use the money in the Surplus Fund solely for the payment of costs of the Facilities in accordance with the Act and the Acquisition Agreement.

Interest Fund

Under the Fiscal Agent Agreement, the Fiscal Agent may use amounts in the Interest Fund solely for the purpose of paying interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity pursuant to this Fiscal Agent Agreement).

Principal Fund

Application of Principal Fund. Under the Fiscal Agent Agreement, the Fiscal Agent may use amounts in the Principal Fund solely for the purpose of paying the principal of the Bonds when due and payable, except that all amounts in the Sinking Accounts shall be used and withdrawn by the Fiscal Agent solely to purchase or redeem or pay at maturity Term Bonds.

Application of Sinking Accounts. Under the Fiscal Agent Agreement, the Fiscal Agent is required to establish and maintain a Sinking Account within the Principal Fund for the Term Bonds of each Series and maturity. On the Business Day prior to any date upon which a Mandatory Sinking Account Payment is due, the Fiscal Agent is required to transfer the amount of such Mandatory Sinking Account Payment from the Principal Fund to the applicable Sinking Account.

With respect to each Sinking Account, on each Mandatory Sinking Account Payment date established for such Sinking Account, the Fiscal Agent shall apply the Mandatory Sinking Account Payment required on that date to the redemption (or payment at maturity, as the case may be) of Term Bonds of such Series and maturity for which such Sinking Account was established; provided that the Fiscal Agent is required, upon receipt of a Request of the School District, to apply moneys in a Sinking Account to the purchase of Term Bonds of such Series and maturity at public or private sale as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Fund) as is directed by the School District, except that the purchase price (excluding accrued interest) shall not exceed the principal amount thereof.

If, during the twelve-month period immediately preceding said Mandatory Sinking Account Payment date, the Fiscal Agent has purchased Term Bonds of such Series and maturity with moneys in such Sinking Account, or, during said period the School District has deposited Term Bonds of such Series and maturity with the Fiscal Agent, or Term Bonds of such Series and maturity were at any time purchased or redeemed by the Fiscal Agent from the Prepayment Fund or other source of funds and allocable to said Mandatory Sinking Account Payment, such Term Bonds so purchased or deposited or redeemed shall be applied, to the

extent of the full principal amount thereof, to reduce said Mandatory Sinking Account Payment. Any amounts remaining in a Sinking Account when all of the Term Bonds of such Series and maturity for which such account was established are no longer outstanding shall be transferred to the Principal Fund.

All Term Bonds purchased from a Sinking Account or deposited by the School District with the Fiscal Agent in a twelve-month period ending August 31 shall be allocated first to the next succeeding Mandatory Sinking Account Payment for such Series and maturity of Term Bonds, then as a credit against such future Mandatory Sinking Account Payments for such Series and maturity of Term Bonds as may be specified in a Request of the School District.

All Term Bonds redeemed by the Fiscal Agent from the Prepayment Fund or other source of funds shall be credited to such future Mandatory Sinking Account Payments for such Series and maturity of Term Bonds as may be specified in a Request of the School District except as provided in “THE SERIES 2013 BONDS – Optional Redemption.”

Bond Reserve Fund

Establishment. Under the Fiscal Agent Agreement, the Fiscal Agent has established and is required to maintain the Bond Reserve Fund. Certain proceeds of the Series 2013 Bonds will be deposited into the Bond Reserve Fund in an amount necessary to increase the balance therein to the “Bond Reserve Requirement” for all of the Outstanding Bonds. (See “ESTIMATED SOURCES AND USES OF FUNDS”). Thereafter, deposits will be made as necessary to replenish the Bond Reserve Fund as provided in the Fiscal Agent Agreement.

Bond Reserve Requirement. The Fiscal Agent Agreement defines the “Bond Reserve Requirement, as of any date of calculation, as the least of

(i) Maximum Annual Debt Service as of such date,

(ii) 125% of average Annual Debt Service on all Bonds Outstanding as of such date and

(iii) 10% of the original principal amount of the Bonds.

“Maximum Annual Debt Service” is defined in the Fiscal Agent Agreement as the greatest amount of principal and interest becoming due and payable on all Bonds in any one- year period ending September 1 (a “Bond Year”) including the Bond Year in which the calculation is made or any subsequent Bond Year.

Disbursements. Under the Fiscal Agent Agreement, the Fiscal Agent may use amounts on deposit in the Bond Reserve Fund as follows:

(1) Payment of Debt Service Deficiencies. All amounts in the Bond Reserve Fund (including all amounts that may be obtained from letters of credit, insurance policies, and surety bonds on deposit in the Bond Reserve Fund) shall be used and withdrawn by the Fiscal Agent, as hereinafter provided, solely for the purpose of making up any deficiency in the Interest Fund or the Principal Fund. The portion of the Bond Reserve Fund held in cash or Permitted Investments may be used (together with any other moneys available therefor) for the payment or redemption of all Bonds then Outstanding; such portion may also be used for the payment of the final principal and interest payment of a Series of Bonds if, following such payment, the

amounts in the Bond Reserve Fund (including the amounts that may be obtained from letters of credit, insurance policies, and surety bonds on deposit therein) will equal the Bond Reserve Requirement after such redemption. The Fiscal Agent is required first to draw on the portion of the Bond Reserve Fund held in cash or Permitted Investments and then, on a pro rata basis with respect to the portion of the Bond Reserve Fund held in the form of letters of credit, insurance policies, and surety bonds (calculated by reference to the maximum amounts of such letters of credit, insurance policies, and surety bonds), draw on each letter of credit and collect under each insurance policy or surety bond issued with respect to the Bond Reserve Fund, in a timely manner and pursuant to the terms of such letter of credit, insurance policy, or surety bond to the extent necessary in order to obtain sufficient funds on or prior to the date such funds are needed to pay the principal of, Mandatory Sinking Account Payments with respect to, and interest on the Bonds when due.

(2) Transfer Upon Special Tax Prepayment. In the event of a prepayment of Special Taxes, the amount in the Bond Reserve Fund will be reduced by the amount of the Reserve Fund Credit as such term is defined in the Rate and Method of Apportionment and, as directed by the School District in writing, such amount shall be transferred by the Fiscal Agent to the Special Tax Fund.

(3) Reimbursement of Draws on Letters of Credit and Insurance Policies. If a drawing is made on a letter of credit, insurance policy, or surety bond, the Fiscal Agent is required to use amounts deposited in the Bond Reserve Fund by the School District following such draw first to make the payments required by the terms of the letter of credit, insurance policy, surety bond, or related reimbursement or loan agreement so that the letter of credit, insurance policy, or surety bond will (absent the delivery to the Fiscal Agent of a substitute letter of credit, insurance policy, or surety bond satisfying the requirements of this Section or the deposit in the Bond Reserve Fund of an amount sufficient to increase the balance in the Bond Reserve Fund to the Bond Reserve Requirement) be reinstated in the amount of such drawing within one year of the date of such drawing. After such reinstatement, the Fiscal Agent is required to use amounts deposited in the Bond Reserve Fund by the School District for the replenishment of the portion of Bond Reserve Fund held in cash or Permitted Investments.

(4) Surplus Amounts. Any amounts in the Bond Reserve Fund in excess of the Bond Reserve Requirement are required to be transferred by the Fiscal Agent each March 1 and September 1 inclusive of interest earnings to the Special Tax Fund; provided that such amounts are required to be transferred only from the portion of the Bond Reserve Fund held in the form of cash or Permitted Investments.

Substitute Credit Instruments. Upon satisfaction of the certain conditions set forth in the Fiscal Agent Agreement, the School District may deliver a letter of credit, insurance policy or surety bond in lieu of making a cash deposit to or in replacement of cash then on deposit in the Bond Reserve Fund. See APPENDIX F for a description of the terms and conditions upon which such a substitution may occur. Upon the issuance of the Series 2013 Bonds, the entire Bond Reserve Requirement will be funded with cash.

Investment of Moneys in Funds

All moneys in any of the funds and accounts held by the Fiscal Agent and established pursuant to this Fiscal Agent Agreement are required to be invested as directed by the School District, in Permitted Investments. See APPENDIX F for a definition of “Permitted Investments.” Moneys in the Bond Reserve Fund are required to be invested in Permitted Investments

maturing or available on demand within ten years of the date of such investment. Moneys in the remaining funds and accounts will be invested in Permitted Investments maturing or available on demand not later than the date on which it is estimated that such moneys will be required by the Fiscal Agent.

THE COMMUNITY FACILITIES DISTRICT

General Description and Location

Background. The School District formed the Community Facilities District by resolution adopted on May 3, 2005. The Community Facilities District is part of the City’s 702-acre RiverPark Specific Plan area, which is entitled for the construction of up to 3,043 residential units and up to 2,098,000 square feet of commercial space. The property within the Community Facilities District consists of approximately 660 acres within the RiverPark Specific Plan area and is entitled for the construction of all of the maximum 3,043 residential units and up to 1,573,000 square feet of the commercial space. The planned residential portion includes a wide variety of detached and attached product types, including units designated as affordable. The planned commercial portion includes retail, hotel, convention and office uses. The development within the Community Facilities District will also include various public facilities and infrastructure. See “THE DEVELOPMENT.”

Location. Located in the northwest portion of the City, the Community Facilities District is bounded by U.S. Route 101 on the southwest, Vineyard Avenue on the southeast and the Santa Clara River on the north. The City is on the Pacific Coast in Ventura County, with the City of Ventura directly to the northwest and the City of Camarillo directly to the southeast. The City of Santa Barbara is approximately 30 miles northwest while the City of Los Angeles is approximately 60 miles southwest.

Boundaries and Zones. The boundary map of the Community Facilities District is attached as APPENDIX J. The Community Facilities District is subdivided into three “zones” (Zone 1, Zone 2 and Zone 3), as set forth in the map of zones attached to the Rate and Method. See “APPENDIX B – RATE AND METHOD OF APPORTIONMENT.” Each Zone has different Special Tax Rates. See “SECURITY FOR THE BONDS – Rate and Method.”

Development Plan Summary. Pursuant to the RiverPark Specific Plan, the Community Facilities District is subdivided into 13 “Planning Areas” (A through M) designated for residential neighborhoods, retail, hotel/convention, two elementary schools, one secondary school, and a complete system of parks and play fields.

The RiverPark Specific Plan and subsequent approvals provide for up to 3,043 residential units in the Community Facilities District, including single family detached, single family attached and high-density multifamily residences. A portion of the single family attached and high-density multifamily residences are affordable units.

The retail, office and hotel/convention uses in the Community Facilities District are limited to 1,573,000 square feet and is expected to occur almost exclusively in Planning Areas A, B, C, D and E. Planning Area D includes an entertainment-retail complex emphasizing local and regional culture and interest known as “The Collection.” The Collection is a regional open- air lifestyle center with total entitlements of 904,000 square feet including retail and office space. Other sites will be developed as retail centers within the Community Facilities District to serve local neighborhoods. See “THE DEVELOPMENT - Overall Development Plan and Development Status.”

Public uses include two new elementary schools (one of which has been completed), an intermediate school (which has been completed), open space/parks, a new detention basin (as part of the storm water quality treatment system), a new joint City/County fire station

(completed), and a water storage/recharge basin which are subject to the provisions of a new mine reclamation plan.

Appraised Property Value

The Appraisal. The Appraisal was prepared to estimate the current market value of the fee simple interest of the taxable residential properties in the Community Facilities District as of an August 1, 2013, date of value. The Appraisal was intended to comply with the reporting requirements set forth under the Uniform Standards of Professional Appraisal Practice and Code of Ethics of the Appraisal Institute, and with the appraisal standard proposed by the California Debt and Investment Advisory Commission. A copy of the Appraisal is attached as APPENDIX C.

Basis for Appraisal and Assumptions. The property rights appraised were of a fee simple interest subject to covenants, conditions, restrictions, rights of way, and easements of record, and all special tax and assessment liens, including the lien of the Special Taxes. The Appraisal was based on certain assumptions and limiting conditions set forth in APPENDIX C, including the following extraordinary assumptions:

• An extraordinary assumption relates to The Collection. No lease information was provided to the Appraiser. As a result, the estimated values in the Appraisal were based on comparable rents and information estimated by the Market Consultant and summarized in the Market Absorption Study. If the actual leases are more (or less) then the estimated rents estimated in the Appraisal, the value would be more (or less). The Appraiser also relied on the square footage provided by Riverpark Legacy (and the Market Consultant) as it relates to the rentable square footage. Information was provided on the tenants and their square footage but, as stated above, no details of the leases were provided.

• An extraordinary assumption relates to costs to complete, as estimates were provided by the owners of Mosaic Apartments, Vista Urbana Condominiums, and Waypointe Condominiums.

Development Status and Valuation Methodology. The Appraisal summarizes the development status of the property in the Community Facilities District, and the valuation methodology, as follows:

Section I, Properties Subject to the Special Tax Levy for Fiscal Year 2012-13.

• Section IA of the Appraisal refers to the 1,081 parcels that have been constructed since the inception of this master plan and have been sold to individual homeowners and were subject to a Special Tax levy for the 2012-13 tax year. The Appraiser prepared a statistical analysis to determine if the assessor’s roll is reflective of the market value, as discussed in detail in the valuation section of the Appraisal. The Appraiser concluded, based on this statistical analysis, that there is a 95% confidence level that the assessed value is representative of market value.

• Section IB of this report refers to two apartment projects that have been constructed and are subject to the Special Tax levy, Paseo Santa Clara (a 140- unit affordable housing development) and Serenade (a 400-unit market rate

apartment project). The Appraiser estimated a market value for the market rate apartments to determine if the assessed value is representative of market value. The affordable housing apartment project, on the other hand, is restricted by income requirements and, as a result, is constrained by market value. The value of the affordable housing apartment was compared to apartments with similar rental rates to determine if the assessed value represented minimum market value.

Section II, Gap Properties.

The Appraisal defines “Gap Properties” as properties that are subject to the Special Tax levy despite the fact that the assessor does not yet reflect a market value (land or partial improvements) and properties that will be subject to a Special Tax levy for the first time for the 2013-14 tax year.

• Section IIA refers to 49 individual homeowners of constructed single- family attached and single-family detached units that had received a building permit as of January 1, 2013, but for which a market value not yet reflected on the assessor’s roll.

• Section IIB refers to an affordable housing condominium project referred to as “Vista Urbana”, consisting of 48 units that have been constructed. Although all of the units have been sold with the exception of the models, the appraisal provides a single valuation.

• Section IIC refers to a lifestyle shopping center named The Collection, which was built in 2008, and in certain years was not assessed a Special Tax. Values are estimated and compared to the assessed value.

• Section IID refers to the Target Department Store which was constructed in 2010, but has not yet been assigned a Special Tax levy. This property was valued and then compared to the assessed value.

• Section IIE refers to Cinemark Theaters, which was constructed in 2008, but has not yet been assigned a Special Tax levy. This property was valued and then compared to the assessed value.

• Section IIF refers to a parcel that has been built out and has eight townhouse units, referred to as Avenue II, for which the assessor has not reflected individual APNs on the tax roll. This parcel was owned by Standard Pacific in 2012-13, and all except three of the units have been sold to individual homeowners.

• Section IIG refers to an 80-unit townhouse project currently being leased known as The Vines. The project has been constructed, but the assessor has not yet assigned APNs, so the Appraisal report these values on several parcels.

• Section IIH refers to a 224-unit apartment complex under construction known as Mosaic. This property was valued as complete and on a stabilized occupancy level (95%). The costs to complete and a deduction for absorption

and risk for completion of the project to reach a stabilized occupancy were deducted to arrive at an “as-is” condition.

Section III, Gap Properties That Will Become Subject to the Special Tax Levy for Fiscal Year 2014-15.

Section III refers to Gap Properties that will first become subject to the Special Tax levy for Fiscal Year 2014-15.

• Section IIIA refers to 16 individual homeowners of constructed single- family attached and single-family detached units that had received a building permit between January 2, 2013, and June 1, 2013, but for which a market value not yet reflected on the assessor’s roll.

• Section IIIB refers to 48 Vista Urbana condominiums that are under construction or recently completed and are owned by the developer. The costs to complete were deducted and a discount was applied for risk for completion to arrive at an “as-is” value (all of the units have been pre-sold).

• Section IIIC refers to a model home complex for East End condominiums. These units have recently been completed.

• Section IIID refers to Waypointe Condominiums, the remaining standing inventory currently owned by Standard Pacific.

Value Estimate. The Appraiser estimated that, as of the August 1, 2013 date of value, the fee simple interest in the taxable residential property within the Community Facilities District (subject to the lien of the Special Taxes) had the following values:

TABLE 1 APPRAISED VALUES OF TAXABLE PROPERTY

Assessed Value per 2012-13 Assessor’s Appraised Section Owner No. of Units Project Roll [1] Value IA Individual 1,081 Individual Homeowners $269,377,928 $269,377,928 IB CAPRI/KW Serenade LLC 400 Serenade Apartments 83,068,300 86,000,000 Cabrillo Econ. Dev. Corp. 140 Paseo Santa Clara Apartments 10,160,185 10,160,185 IIA Individual 49 Gap Properties: Individual Homeowners [2] 6,281,643 14,565,554 IIB Individual and Models 48 Gap Properties: Vista Urbana Condominiums 948,628 10,300,000 IIC SOCM I, LLC N/A Gap Properties: The Collection Shopping Center 76,362,400 152,700,000 IID Target Corporation N/A Gap Properties: Target Department Store 22,574,295 46,300,000 IIE SOCM I, LLC N/A Gap Properties: Cinemark Theaters 6,936,000 20,000,000 IIF Individual 8 Gap Properties: Avenue II 818,944 3,037,500 IIG Corona Riverpark Promenade 80 Gap Properties: The Vines 2,550,000 19,750,000 IIH Wolf Partners 224 Gap Properties: The Mosaic 3,083,041 27,000,000 Subtotal 2,030 $482,161,364 $659,191,167

IIIA Individual 16 Gap Properties: Individual Homeowners [3] $ 2,633,404 $ 5,285,000 IIIB Aldersgate Investments 48 Gap Properties: Vista Urbana 948,628 9,600,000 IIIC AGS Meridian, LLC 3 Gap Properties: East End Condominiums 200,000 1,000,000 IIID Standard Pacific Corporation 6 Gap Properties: Waypointe Condominiums 892,182 2,000,000 Subtotal 73 $ 4,674,214 $ 17,885,000

TOTAL 2,103 $486,835,578 $677,076,167 ______[1] The aggregate Fiscal Year 2013-14 assessed value of the property appraised in the Appraisal is $518,916,076 according to the County Assessor. The Appraisal uses Fiscal Year 2012-13 assessed values because those were the latest available as of the Appraisal date of value. [2] “Gap Properties” refers to homes that were not reflected on the County Assessor’s Fiscal Year 2012-13 property tax rolls at full market value but have since been completed and sold to homeowners. These properties had building permits as of January 1, 2013. [3] Gap Properties that were not reflected on the County Assessor’s Fiscal Year 2012-13 property tax rolls at full market value but have since been completed and sold to homeowners. These properties received building permits between January 2, 2013 and June 1, 2013. Source: the Appraiser.

The foregoing summary of the valuation methods used in the Appraisal is qualified in all respects to the actual Appraisal, which is attached hereto as APPENDIX C.

The Community Facilities District, the School District and the Underwriter make no representation as to the accuracy or completeness of the Appraisal.

Fiscal Year 2013-14 Assessed Value

The Fiscal Year 2013-14 assessed value of the property appraised by the Appraiser is set forth in the table below, an increase of approximately $32 million over the aggregate Fiscal Year 2012-13 assessed value. The Fiscal Year 2013-14 assessed value of Undeveloped Property in the Community Facilities District is also set forth below. The Appraisal uses Fiscal Year 2012-13 assessed values because the Fiscal Year 2013-14 assessed values were not available as of the date of value of the Appraisal.

TABLE 2 ASSESSED VALUE OF APPRAISED PROPERTY (Fiscal Year 2013-14)

Category Assessed Value

Residential $425,681,977

Commercial 93,234,099

Total Assessed Value of Appraised Property $518,916,076

Undeveloped Property 81,621,250

Total Assessed Value of All Taxable Property $600,537,326 ______Source: County Assessor.

Appraised Value-to-Debt Ratio

The tables below show the projected value-to-debt ratios for the taxable property in the Community Facilities District, based on the appraised value set forth in the Appraisal, the principal amount of the Series 2005 Bonds and the Series 2013 Bonds, and the principal amount of overlapping special tax bonds. Table 3A allocates the principal amount of the Series 2005 Bonds and the Series 2013 Bonds based on each property classification’s estimated share of the actual Fiscal Year 2013-14 Special Tax levy, and Table 3B allocates the principal amount of the Series 2005 Bonds and the Series 2013 Bonds based on each property classification’s estimated share of the projected Fiscal Year 2014-15 Special Tax levy.

No assurance can be given that the amounts shown in the tables below will conform to those ultimately realized in the event of a foreclosure action following delinquency in the payment of Special Taxes.

TABLE 3A APPRAISED VALUES AND VALUE-TO-DEBT RATIO FISCAL YEAR 2013-14

Percent of City of Oxnard Fiscal Year Fiscal Year Principal Principal Community 2013-14 2013-14 Amount of Amount of Facilities Number of Appraised Special Tax Special Tax Series 2005 Series 2013 Total District No. Value-to- Property Ownership Units/BSF [1] Value [2] Levy [1] Levy Bonds [3] Bonds [3] Principal [3] 2000-3 [4] Debt Ratio Residential For Sale Individual Homeowners 1,180 $295,376,982 $2,264,222 61.78% $18,076,828 $17,298,400 $35,375,228 $1,307,458 8.05:1 Standard Pacific 6 1,904,000 13,966 0.38 111,188 106,400 217,588 0 8.75:1 Total Residential For Sale 1,186 $297,280,982 $2,278,188 62.16% $18,188,016 $17,404,800 $35,592,816 $1,307,458 8.06:1

Residential Rental Capri/KW Serenade LLC 400 $86,000,000 $348,584 9.51% $2,782,936 $2,663,096 $5,446,032 $416,522 14.67:1 Wolf Partners 224 27,000,000 227,575 6.21 1,816,855 1,738,617 3,555,473 197,757 7.19:1 Corona Riverpark Promenade LLC 80 19,750,000 122,915 3.35 981,295 939,039 1,920,334 153,393 9.52:1 Cabrillo Economic Development 140 10,160,185 61,460 1.68 490,669 469,539 960,208 0 10.58:1 Total Residential Rental 844 $142,910,185 $760,534 20.75% $6,071,755 $5,810,293 $11,882,046 $767,672 11.30:1

Commercial Property [5] SOCM I LLC 557,764 BSF $172,700,000 $496,410 13.54% $3,963,110 $3,792,450 $7,755,560 $1,160,880 19.37:1 Target 145,963 BSF 46,300,000 129,907 3.54 1,037,119 992,458 2,029,577 0 22.81:1 Total Commercial Property 707,727 BSF $219,000,000 $626,317 17.09% $5,000,229 $4,784,908 $9,785,137 $1,160,880 20.01:1

Total Taxable Property $659,191,167 $3,665,039 100.00% $29,260,000 $28,000,000 $57,260,000 $3,236,009 10.90:1

[1] Based on building permits issued as of June 1, 2013. “BSF” means building square footage. [2] Market value estimated by the Appraiser as of August 1, 2013. Includes currently delinquent parcels. See Table 6, “Special Tax Collections and delinquencies.” [3] Allocated based on each property classification’s estimated share of the projected Fiscal Year 2013-14 Special Tax levy. [4] Represents the overlapping lien of bonds issued by the City of Oxnard Community Facilities District No. 2000-3 and the City of Oxnard Community Facilities District No. 88-1. See “–Direct and Overlapping Governmental Obligations” below. The total amount outstanding is $4,791,545. Of this amount, only $3,236,009 is from the Developed Properties for Fiscal Year 2013-14, and, therefore, is the amount included in this table. City of Oxnard’s CFD No. 88-1 is not included because the applicable amount is levied on only one parcel in the Community Facilities District, and that parcel was not classified as Developed Property for Fiscal Year 2013-14. [5] Under the Rate and Method, this property is classified as Non-Residential Property and is taxed under the second step in the method of apportionment in the Rate and Method, such that no Special Tax will be levied on it once Special Taxes levied on property classified as Residential Property are sufficient to satisfy the Minimum Annual Special Tax Requirement. See “SECURITY FOR THE BONDS – Rate and Method.” Source: Dolinka Group, LLC.

TABLE 3B APPRAISED VALUES AND VALUE-TO-DEBT RATIO FISCAL YEAR 2014-15

Fiscal Year % of Projected Principal Principal City of Oxnard 2014-15 Fiscal Year Amount of Amount of Community Number of Appraised Special Tax 2014-15 Special Series 2005 Series 2013 Total Facilities District Value-to-Debt Property Ownership Units/BSF [1] Value [2] Levy [1] Tax Levy Bonds [3] Bonds [3] Principal [3] No. 2000-3 [4] Ratio Residential For Sale Individual Homeowners 1,193 $300,661,982 $2,363,200 60.96% $17,837,363 $17,069,247 $34,906,610 $1,319,088 8.30:1 AGS Meridian LLC 3 1,000,000 6,628 0.17 50,031 47,877 97,907 0 10.21:1 Standard Pacific 15 3,904,000 32,193 0.83 242,993 232,529 475,523 0 8.21:1 Aldersgate Investments 48 9,600,000 36,312 0.94 274,081 262,279 536,360 0 17.90:1 Total Residential For Sale 1,259 $315,165,982 $2,438,333 62.90% $18,404,469 $17,611,932 $36,016,400 $1,319,088 8.44:1

Residential Rental Capri/KW Serenade LLC 400 $86,000,000 $355,552 9.17% $2,683,696 $2,568,130 $5,251,826 $416,522 15.17:1 Wolf Partners 224 27,000,000 232,122 5.99 1,752,052 1,676,605 3,428,656 197,757 7.45:1 Corona Riverpark Promenade LLC 80 19,750,000 125,373 3.23 946,310 905,560 1,851,871 153,393 9.85:1 Cabrillo Economic Development 140 10,160,185 62,689 1.62 473,176 452,800 925,976 0 10.97:1 Total Residential Rental 844 $142,910,185 $775,736 20.01% $5,855,234 $5,603,095 $11,458,330 $767,672 11.69:1

Commercial Property [5] SOCM I LLC 584,015 BSF $172,700,000 $529,964 13.67% $4,000,152 $3,827,896 $7,828,048 $1,484,020 18.55:1 Target 145,963 BSF 46,300,000 132,505 3.42 1,000,145 957,077 1,957,222 0 23.66:1 Total Commercial Property 729,978 BSF $219,000,000 $662,469 17.09% $5,000,297 $4,784,973 $9,785,270 $1,484,020 19.43:1

Total Taxable Property $677,076,167 $3,876,539 100.00% $29,260,000 $28,000,000 $57,260,000 $3,570,779 11.13:1

[1] Based on building permits as of June 1, 2013. “BSF” means building square footage. [2] Market value estimated by the Appraiser as of August 1, 2013. [3] Allocated based on each property classification’s estimated share of the projected Fiscal Year 2014-15 Special Tax levy. Includes currently delinquent parcels. See Table 6, “Special Tax Collections and delinquencies.” [4] Represents the overlapping lien of bonds issued by the City of Oxnard Community Facilities District No. 2000-3 and the City of Oxnard Community Facilities District No. 88-1. See “–Direct and Overlapping Governmental Obligations” below. The total amount outstanding is $4,791,545. Of this amount, only $3,570,779 is projected to be from the Developed Properties for Fiscal Year 2014-15, and, therefore, is the amount included in this table. City of Oxnard’s CFD No. 88-1 is not included because the applicable amount is levied on only one parcel in the Community Facilities District, and that parcel is not anticipated to be classified as Developed Property for Fiscal Year 2014-15. [5] Under the Rate and Method, this property is classified as Non-Residential Property and is taxed under the second step in the method of apportionment in the Rate and Method, such that no Special Tax will be levied on it once Special Taxes levied on property classified as Residential Property are sufficient to satisfy the Minimum Annual Special Tax Requirement. See “SECURITY FOR THE BONDS – Rate and Method.” Source: Dolinka Group, LLC.

Direct and Overlapping Governmental Obligations

Overlapping Debt Statement. Contained within the boundaries of the Community Facilities District are certain overlapping local agencies providing public services. Many of these local agencies have outstanding debt. The direct and overlapping debt affecting the Community Facilities District as of July 19, 2013 is shown in the table below, a direct and overlapping government obligations report (the “Debt Report”) prepared by National Tax Data, Inc. The Debt Report is included for general information purposes only. The School District has not reviewed the Debt Report for completeness or accuracy and makes no representation in connection therewith.

The Debt Report generally includes long term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the Community Facilities District in whole or in part. These long-term obligations generally are not payable from revenues of the Community Facilities District (except as indicated) nor are they necessarily obligations secured by land within the Community Facilities District. In many cases long term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency.

The contents of the Debt Report are as follows. Section I sets forth the aggregate 2012- 13 assessed value of property in the Community Facilities District on the secured property tax roll. Section II describes the secured property taxes levied against property in the Community Facilities District. Section III describes outstanding bonded indebtedness secured by a lien on property within the Community Facilities District, other than general obligation bonded indebtedness. Section IV describes outstanding general obligation bonded indebtedness payable from and secured by property taxes on property within the Community Facilities District.

TABLE 4 DIRECT AND OVERLAPPING GOVERNMENTAL OBLIGATIONS

I. Assessed Value 2012-13 Secured Roll Assessed Value [1] $564,094,529

II. Secured Property Taxes Description on Tax Bill Type Total Parcels Total Levy % Applicable Parcels Levy Basic Levy PROP13 242,041 $996,154,669 0.55053% 1,703 $5,484,149 Voter Approved Debt VOTER 242,104 91,440,957 0.88783 1,703 811,837 Calleguas Municipal Water District Standby Charge STANDBY 174,018 1,397,863 0.73108 1,703 10,219 City of Oxnard Community Facilities District No. 2000-3 CFD 626 652,062 62.26829 581 406,028 City of Oxnard Community Facilities District No. 5 CFD 1,711 3,576,921 99.87814 1,709 3,572,562 City of Oxnard Community Facilities District No. 88-1 CFD 13 250,296 4.99079 1 12,492 County of Ventura Flood Control District, Zone No. 1 FLOOD 39,189 225,543 2.48705 1,669 5,609 County of Ventura Flood Control District, Zone No. 2 FLOOD 89,138 3,731,102 1.05900 1,669 39,512 County of Ventura Flood Control District, Zone No. 3 1982BA 39,201 585,948 2.48423 1,669 14,556 Metropolitan Water District of So. California Standby Charge STANDBY 171,489 2,500,323 0.77701 1,727 19,428 Rio Elementary School District CFD No. 1 CFD 1,752 2,537,219 100.00000 1,093 2,537,219 Ventura County Public Works Agency Vector Control VECTOR 227,900 1,115,755 0.47485 1,717 5,298 2012-2013 TOTAL PROPERTY TAX LIABILITY $12,918,910 TOTAL PROPERTY TAX LIABILITY AS A PERCENTAGE OF 2012-2013 ASSESSED VALUATION 2.29%

III. Land Secured Bond Indebtedness Outstanding Direct and Overlapping Bonded Debt Type Issued Outstanding % Applicable Parcels Amount City of Oxnard Community Facilities District No. 2000-3 CFD $10,490,000 $7,695,000 62.26829% 581 $4,791,545 City of Oxnard Community Facilities District No. 88-1 CFD 14,770,000 0 4.99079 1 0 Rio Elementary School District CFD No. 1 CFD 30,725,000 29,260,000 100.00000 1,093 29,260,000 TOTAL LAND SECURED BOND INDEBTEDNESS [2] $34,051,545

IV. General Obligation Bond Indebtedness Outstanding Direct and Overlapping Bonded Debt Type Issued Outstanding % Applicable Parcels Amount Metropolitan Water District of Southern California GOB 1966 GOB $850,000,000 $165,085,000 0.02690% 1,703 $44,400 Oxnard Union High School District GOB 1996 GOB 57,000,000 39,170,000 1.77454 1,703 695,089 Oxnard Union High School District GOB 2004 GOB 50,000,000 47,705,000 1.77454 1,703 846,546 Rio Elementary School District GOB 1997 GOB 20,000,000 14,040,000 13.34382 1,703 1,873,472 Ventura County Community College District GOB 2002 GOB 356,347,814 304,428,714 0.55002 1,703 1,674,419 TOTAL GENERAL OBLIGATION BOND INDEBTEDNESS [2] $5,133,926

TOTAL OF ALL OUTSTANDING AND OVERLAPPING BONDED DEBT $39,185,470.88

[1] The aggregate secured roll assessed value of Taxable Property in the Community Facilities District is $600,537,326 for Fiscal Year 2013-14 according to the County Assessor. This table uses Fiscal Year 2012-13 assessed values because those were the latest available as of the date of calculation. [2] Additional bonded indebtedness or available bond authorization may exist but are not shown because a tax was not levied for the referenced fiscal year. Source: National Tax Data, Inc.

Estimated Tax Burden

Representative Single Family Detached Home. The following table sets forth the estimated total tax burden on a typical single family detached unit in the Community Facilities District based on tax rates for Fiscal Year 2013-14 obtained from the County Tax Collector.

TABLE 5A REPRESENTATIVE FISCAL YEAR 2013-14 TAX RATES (1,928 Square Foot Detached Single Family Unit)

Percent of Projected Total Taxes ASSESSED VALUATION AND PROPERTY TAXES Assessed and Valuation Assessments Assessed Value [1] $400,846 Homeowner’s Exemption (7,000) Taxable Value [2] $393,846

AD VALOREM PROPERTY TAXES Prop 13 Maximum 1% Tax 1.0000% $3,938.46 Ad Valorem Tax Overrides Rio Elementary School District Debt 1997 0.0301 118.55 Oxnard Union High School District GOB 1996 0.0107 42.14 Oxnard Union High School District GOB 2004 0.0218 85.86 Ventura County Community College District GOB 2002 0.0167 65.77 Metropolitan Water District of Southern California GOB 1966 0.0035 13.78 City Oxnard District #1 0.0766 301.83 Total Ad Valorem Property Taxes and Overrides $4,566.40

ASSESSMENTS, SPECIAL TAXES AND PARCEL CHARGES

Ventura Co. Watershed Prot. Dist. NPDES Oxnard $ 1.58 Ventura Co. Watershed Prot. Dist. NPDES #2 Oxnard 4.10 Ventura Co. Public Works Agency Vector Control 4.88 Calleguas Municipal Water District Standby Charge 5.00 Metropolitan Water Dist. of So. Cal. Standby Charge 9.58 Co. of Ventura Flood Control District Zone No. 2 11.14 City of Oxnard Community Facilities District No. 5 [3] 2,615.62 CFD No. 1 Rio Elementary School District 2,688.20 Total Assessments, Special Taxes and Parcel Charges $5,340.10

TOTAL PROJECTED ANNUAL TAXES AND ASSESSMENTS $9,906.50

Total Effective Tax Rate 2.47%

[1] Fiscal Year 2013-14 Assessed Valuation from County of Ventura Assessor's Office for a Single Family Detached unit containing 1,928 building square feet, selected to represent the median effective tax rate for a Single Family Detached unit. [2] Taxable value reflects assessed value net of homeowner exemption. [3] City of Oxnard Community Facilities District No. 5 levies a special tax for authorized services but has no bond authorization. Source: Dolinka Group, LLC

Representative Attached Home. The following table sets forth the estimated total tax burden on a typical attached residence in the Community Facilities District based on tax rates for Fiscal Year 2013-14 obtained from the County Tax Collector.

TABLE 5B REPRESENTATIVE FISCAL YEAR 2013-14 TAX RATES (1,527 Square Foot Attached Single Family Unit)

Percent of Projected Total Taxes ASSESSED VALUATION AND PROPERTY TAXES Assessed and Valuation Assessments Assessed Value [1] $199,000 Homeowner’s Exemption (7,000) Taxable Value [2] $192,000

AD VALOREM PROPERTY TAXES Prop 13 Maximum 1% Tax 1.0000% $1,920.00 Rio Elementary School District Debt 1997 0.0301 57.79 Oxnard Union High School District GOB 1996 0.0107 20.54 Oxnard Union High School District GOB 2004 0.0218 41.86 Ventura County Community College District GOB 2002 0.0167 32.06 Metropolitan Water District of Southern California GOB 1966 0.0035 6.72 City Oxnard District #1 0.0766 147.14 Total Ad Valorem Property Taxes and Overrides $2,226.12

ASSESSMENTS, SPECIAL TAXES AND PARCEL CHARGES

Ventura Co. Watershed Prot. Dist. NPDES Oxnard $ 2.92 Ventura Co. Watershed Prot. Dist. NPDES #2 Oxnard 2.14 Ventura Co. Public Works Agency Vector Control 5.54 Calleguas Municipal Water District Standby Charge 5.00 Metropolitan Water Dist. of So. Cal. Standby Charge 9.58 Co. of Ventura Flood Control District Zone No. 2 15.06 City of Oxnard Community Facilities District No. 5 [3] 1,917.74 CFD No. 1 Rio Elementary School District 1,935.50 Total Assessments, Special Taxes and Parcel Charges $3,893.48

TOTAL PROJECTED ANNUAL TAXES AND ASSESSMENTS $6,119.60

Total Effective Tax Rate 3.08%

[1] Fiscal Year 2013-14 Assessed Valuation from County of Ventura Assessor's Office for a Single Family Attached unit containing 1,527 building square feet, selected to represent the median effective tax rate for a Single Family Attached unit. [2] Taxable value reflects assessed value net of homeowner exemption. [3] City of Oxnard Community Facilities District No. 5 levies a special tax for authorized services but has no bond authorization. Source: Dolinka Group, LLC

Special Tax Collection and Delinquency Rates

Overall Delinquencies. The table below shows the collections and delinquencies of the Special Taxes for the current and past four Fiscal Years, with updated delinquency amounts as of September 24, 2013.

TABLE 6 SPECIAL TAX COLLECTIONS AND DELINQUENCIES Fiscal Years 2006-07 through 2012-13

Subject Fiscal Year [1] Delinquencies of September 24, 2013 Fiscal Parcels Year Special Special Delinquent / Fiscal Year Delin- Remaining Remaining Remaining Fiscal Taxes Taxes Parcels Amount quency Parcels Amount Delinquency Year Levied Collected Levied Delinquent Rate Delinquent Delinquent Rate 2006-07 $1,923,079 $1,923,079 0 / 418 $ 0 0.00% 0 $ 0 0.00% 2007-08 2,111,643 2,090,673 17 / 1,193 20,969 0.99 0 0 0.00 2008-09 2,099,240 2,024,474 50 / 1,046 74,765 3.56 1 690 0.03 2009-10 2,141,034 2,101,244 27 / 774 39,790 1.86 4 2,815 0.13 2010-11 2,144,944 2,122,527 17 / 936 22,416 1.05 3 1,795 0.08 2011-12 2,421,067 2,380,189 27 / 1,059 40,878 1.69 25 36,283 1.50 2012-13 2,537,219 2,513,054 19 / 1,093 24,165 0.95 9 9,772 0.39 , [1] Delinquency information as provided by the County as of July or August of the applicable Fiscal Year. Source: Dolinka Group, LLC

No Prior or Pending Enforcement Actions. The School District has not to date taken actions to enforce delinquent Special Taxes or filed any Superior Court actions for foreclosure against any parcels with Special Tax delinquencies. See “SECURITY FOR THE BONDS - Foreclosure of Delinquent Parcels.”

Potential Consequences of Special Tax Delinquencies

General. Future delinquencies in the payment of property taxes (including the Special Taxes) with respect to property in the Community Facilities District could result in draws on the Bond Reserve Fund established for the Bonds, and perhaps, ultimately, a default in the payment on the Bonds. See “SERIES 2013 BOND OWNERS’ RISKS.”

Special Tax Enforcement and Collection Procedures. The School District could receive additional funds for the payment of debt service through foreclosure sales of delinquent property, but no assurance can be given as to the amount of foreclosure sale proceeds or when foreclosure sale proceeds would be received. The School District has covenanted in the Fiscal Agent Agreement to take certain enforcement actions and commence and pursue foreclosure proceedings against delinquent parcels under the terms and conditions described herein. See “SECURITY FOR THE BONDS — Foreclosure of Delinquent Parcels.”

Foreclosure actions would include, among other steps, formal Board action to authorize commencement of foreclosure proceedings, mailing multiple demand letters to the record owners of the delinquent parcels advising them of the consequences of failing to pay the applicable special taxes and contacting secured lenders to obtain payment. If these efforts were unsuccessful, they would be followed (as needed) by the filing of an action to foreclose in superior court against each parcel that remained delinquent.

Limitations on Increases in Special Tax Levy. If owners are delinquent in the payment of Special Taxes, the School District may not increase Special Tax levies to make up for delinquencies for prior Fiscal Years above the Maximum Special Tax rates specified for each category of property within the Community Facilities District. See “SECURITY FOR THE BONDS – Rate and Method.” In addition, pursuant to Section 53321(d) of the Act and a resolution of the Community Facilities District, under no circumstances will the special tax levied against any parcel used for private residential purposes be increased by more than 10% as a consequence of delinquency or default by the owner of any other parcel or parcels of land within the Community Facilities District. In cases of significant delinquency, these factors may result in defaults in the payment of principal of and interest on the Series 2013 Bonds. See “SERIES 2013 BOND OWNERS’ RISKS.”

Mortgage Study

General. The School District retained the Market Consultant to prepare the Mortgage Study to discuss the mortgage loan characteristics, estimated levels of current equity and special tax / mortgage loan duress of the current homeowners within the Community Facilities District.

The Market Consultant estimated that approximately 1,193 homes in the Community Facilities District had closed escrow to homeowners as of the date of the Mortgage Study. Based upon a review of the data available for these homes, the number of homes that fulfilled the criteria for the analysis amounted to 1,039 homes (approximately 87%). Accordingly, these 1,039 are referred to in the Mortgage Study as the “homeowners.”

The Mortgage Study is not intended to arrive at any predictions of future Special Tax delinquencies for homeowners in the Community Facilities District.

The Mortgage Study is attached to this Official Statement as APPENDIX E, and should be reviewed carefully. None of the School District, the Community Facilities District or the Underwriter make any representation as to the accuracy or completeness of the Mortgage Study.

Price Patterns. Features of the recent home price trends in the Community Facilities District are summarized as follows:

Price Appreciation: Starting in 2002, housing prices began to appreciate as mortgage rates declined, and then the rate of appreciation accelerated during 2004 to 2007 due to the pervasive use of non-conventional (creative) financing structures. During this time period, these financing structures and related financing factors, rather than employment growth, were the primary driving forces underlying the extraordinary rate of housing price appreciation for California, and also for the County.

Price Declines – Negative Equity: During 2007 to 2009, housing prices decreased significantly, pushing a substantial proportion of homeowners who purchased their homes during the price bubble into a position of negative equity, especially those that had high loan to value ratios. The enormous number of homeowners under duress caused an over-supply of homes which, in turn, severely depressed new development activity.

Foundation for Recovery: During 2009 to 2012, housing prices were relatively stable, and this enabled the housing market to go through a consolidation phase. Homeowners with negative equity went through the foreclosure and short sales process. These homes, in turn, were purchased by new, bona-fide homeowners that benefited from lower prices and very favorable mortgage rates; additionally, mortgage lending criteria were tighter.

Mortgage Loan-to-Value Ratios. The Mortgage Study analyzed the mortgage loan characteristics for the 1,039 homes for which mortgage data was available, using the original mortgage loan amounts (first and second, if any) and actual sales prices. For this purpose, the Mortgage Study assumed no amortization of principal since the loans were made. The Mortgage Study concluded that the loan-to-value ratios for these homes were as follows:

Mortgage Loan to Number of Percent of Value Category Homes Total 100%+ 233 22% 90-99% 455 44 80-89% 131 13 1-79% 142 14 No mortgage 78 8 Total: 1,039 100%

The 1,039 homeowners as a whole have mortgage loan to value ratios of 85% on the average, with the median at 97% (50% of homeowners above this level and 50% below).

Estimated Current Levels of Homeowner Equity. The Mortgage Study then provided an estimate of current equity levels of the 1,039 homes for which information was available, using the current home values (estimated using actual sales price data for 43 of the homes that were sold from January 2013 to April 2013 and a statistical regression analysis to estimate the relationship between sales price and living area) and the original amounts of the mortgage loans, and estimated that the levels of homeowner equity by the various categories are as follows:

Estimated Equity Number of Percent of Levels Homes Total Below (20%) 219 21% (20%) to (10%) 141 14 (10%) to 0% 172 17 0% to 10% 127 12 10% to 20% 102 10 Above 20% 278 27 Total: 1,039 100%

The Mortgage Study is being provided for informational purposes only, and no statement in the Mortgage Study should be construed as a prediction, or an assurance by the Market Consultant, the Underwriter, the Community Facilities District or the School District, that the existing property owners within the Community Facilities District or any successors thereof will continue making the Special Tax payments when due.

Estimated Maximum Special Tax Proceeds and Debt Service Coverage

Projected Special Tax revenues, based on building permits issued as of January 1, 2013, for Fiscal Year 2013-14, and as of June 1, 2013, for Fiscal Years 2014-15 and thereafter, when applied to the projected debt service on the Series 2005 Bonds and the Series 2013 Bonds, are anticipated to result in a debt service coverage ratio of at least 110% for the life of the Series 2005 Bonds and the Series 2013 Bonds, as shown in the table below.

The Community Facilities District is authorized to issue up to $75,000,000 in indebtedness secured by the Special Tax, and it is anticipated that the Community Facilities District will be able to satisfy certain conditions in order to issue Additional Bonds. See “SECURITY FOR THE BONDS –Issuance of Additional Bonds.”

TABLE 7 PROJECTED LEVY OF SPECIAL TAXES AND DEBT SERVICE COVERAGE

Projected Net Special Tax Revenues as a Percentage of Year Ending Net Special Tax Debt Service Debt Service Total Debt Total Debt Sept. 1 Revenues [1] Series 2005 Series 2013 Service [2] Service 2014 $ 3,577,165 $ 1,889,721 $ 1,361,365 $ 3,251,086 110% 2015 3,786,907 1,926,946 1,514,081 3,441,028 110 2016 3,862,645 1,966,134 1,542,881 3,509,015 110 2017 3,939,898 2,006,909 1,525,781 3,532,690 112 2018 4,018,696 2,044,309 1,559,131 3,603,440 112 2019 4,099,070 2,083,269 1,590,531 3,673,800 112 2020 4,181,051 2,128,479 1,620,531 3,749,010 112 2021 4,264,672 2,168,979 1,654,131 3,823,110 112 2022 4,349,966 2,215,479 1,681,131 3,896,610 112 2023 4,436,965 2,257,479 1,716,731 3,974,210 112 2024 4,525,704 2,304,979 1,749,831 4,054,810 112 2025 4,616,218 2,351,041 1,786,019 4,137,060 112 2026 4,708,543 2,396,723 1,824,144 4,220,866 112 2027 4,802,714 2,441,766 1,859,794 4,301,560 112 2028 4,898,768 2,490,916 1,896,756 4,387,673 112 2029 4,996,743 2,543,660 1,935,869 4,479,529 112 2030 5,096,678 2,593,180 1,975,369 4,568,549 112 2031 5,198,612 2,645,420 2,011,369 4,656,789 112 2032 5,302,584 2,699,860 2,053,869 4,753,729 112 2033 5,408,635 2,750,980 2,097,369 4,848,349 112 2034 5,516,808 2,808,520 2,135,475 4,943,995 112 2035 5,627,144 2,866,700 2,175,475 5,042,175 112 2036 5,739,687 0 5,145,250 5,145,250 112 2037 5,854,481 0 5,243,375 5,243,375 112 2038 5,971,571 0 5,348,625 5,348,625 112 2039 6,091,002 0 5,459,625 5,459,625 112 Total [2] $124,872,926 $51,581,448 $60,464,509 $112,045,956

[1] Net of Administrative Expenses. Fiscal Year 2013-14 Administrative Expense is $87,874 with an annual escalation rate of 2.00%. For Fiscal Year 2013-14, projected Special Tax revenues are based on Assigned Annual Special Tax Rates on Developed Property (with building permits issued as of January 1, 2013). For Fiscal Year 2014-15, projected Special Tax revenues are based on Assigned Annual Special Tax Rates on Developed Property and on Undeveloped Property with building permits issued as of June 1, 2013. Thereafter, projected Special Tax Revenues are escalated by 2.00% in accordance with the Rate and Method. [2] Totals may not add due to independent rounding. Source: Dolinka Group, LLC

Undeveloped Property

Currently, there are approximately 125.8 acres of Undeveloped Property in the Community Facilities District, which are not expected to be subject to the levy of the Special Tax in Fiscal Years 2013-14 or 2014-15. This undeveloped acreage is spread among the three Zones. The Rate and Method permits the Community Facilities District to levy a per-acre Special Tax against Undeveloped Property if the Assigned Annual Special Tax to be levied against Developed Property is insufficient to meet the Minimum Annual Special Tax Requirement. Under the Rate and Method, the rates at which the Special Tax is levied against Undeveloped Property vary according to whether the acreage is for residential or non-residential use, and according to the Zone in which the acreage is situated. See “SECURITY FOR THE BONDS – Rate and Method.”

The Series 2013 Bonds have been structured such that a Special Tax against Undeveloped Property is not expected to be required. Special Tax revenues from Undeveloped Property were not taken into account in calculating the projected debt service coverage table above, unless the property had a building permit as of June 1, 2013 (in which case the property would be reclassified as Developed Property no later than the Fiscal Year 2014-15 Special Tax levy).

48 exhibit

August 27, 2002 LAND USE PLAN: PERMITTED USES update through 3/2012 prepared for RiverPark Development, LLC by AC Martin Partners with RTKL / EDSA / CRAIN AND ASSOCIATES / WILLIAM HEZMALHALCH ARCHITECTS / HUITT-ZOLLARS 2.B

THE DEVELOPMENT

The property within the RiverPark Specific Plan encompasses approximately 702 acres in the City and is entitled for the construction of up to 3,043 residential units and up to 2,098,000 square feet of commercial space. The property within the Community Facilities District consists of approximately 660 acres within the RiverPark Specific Plan and is entitled for the construction of all of the maximum 3,043 residential units and up to 1,573,000 square feet of the commercial space within the specific plan area. The development within the Community Facilities District will also include various public facilities and infrastructure (together with the residential and commercial development planned in the Community Facilities District, the “Development”). The planned residential portion includes a wide variety of detached and attached product types, including units designated as affordable. The planned commercial portion includes retail, hotel, convention and office uses.

Development Requirements

Original Developers. At the time of the formation of the Community Facilities District, a substantial amount of the property in the Community Facilities District was owned by the Original Developers (RiverPark A and RiverPark B), the predecessors-in-interest to the current property owners. See “PROPERTY OWNERSHIP – Current Property Ownership.” The Master Developer Entities have acted as master developer for the property and have sold the property to other affiliates and merchant builders for development and no longer own a material portion of the property that is or might become Taxable Property within the Community Facilities District.

Development Agreement. The City and the Original Developers entered into a Development Agreement, dated August 27, 2002, and recorded on September 10, 2002 (as amended and extended, including by administrative extension or amendment, the “Development Agreement”), and formally amended the Development Agreement by entering into a First Amendment to Development Agreement, recorded on January 24, 2005, a Second Amendment to Development Agreement, recorded August 21, 2007, a Third Amendment to Development Agreement, recorded on October 13, 2010 (the “Third Amendment to Development Agreement”) and a Fourth Amendment to Development Agreement, recorded on October 8, 2012 (the “Fourth Amendment to Development Agreement”).

The Development Agreement provides vested rights to develop certain property within the RiverPark Specific Plan, including the property within the Community Facilities District, pursuant to the provisions of the RiverPark Specific Plan and the provisions of the Development Agreement. The Development Agreement became operative on October 10, 2002, and remains in effect for 20 years, unless modified by the parties or pursuant to the specific terms and conditions of the Development Agreement. At the City’s discretion, the Development Agreement may be extended for up to ten additional years. Except under specific circumstances, the Development Agreement prevents the City from enacting measures that relate to rate, timing, sequencing, density, intensity or configuration of any part of the Development inconsistent with the Development Agreement. The Development Agreement also prohibits moratoriums or other limitations that adversely affect the development of the Development.

The Development Agreement requires construction of the master planned facilities within the Development in exchange for specific credits and fee waivers and required prepayment of $10,100,000 in sewer fees to the City (which have been paid), to ensure that adequate sewer

capacity and facilities are available to serve the Development. Pursuant to the Development Agreement, certain credits for fees (“Quimby Fees”) payable under the Quimby Act (Section 66477 of the California Government Code) for the public recreation and open space areas that will be developed within the Development have been and continue to be credited. These credits are expected to cover the full cost of the Quimby Fees that will be levied against the Development. Pursuant to the Development Agreement and subsequent Third Amendment to Development Agreement, a Limitation on Increase of Certain Fees holds certain City Impact fees at specific rates for specified time frames starting from the time the first building permit for a non-model dwelling unit is issued. Such fee restrictions expire on January 6, 2014 for all residential units and January 6, 2016 for all commercial development.

Owner Participation Agreement. The Oxnard Community Development Commission (“CDC”) and RiverPark A entered into an Owner Participation Agreement on June 12, 2001 (as amended and extended, including by administrative extension or amendment, the “OPA”), which was subsequently amended pursuant to a First Amendment to the Owner Participation Agreement, dated November 19, 2002, a Second Amendment to Owner Participation Agreement dated as of December 14, 2004, a Third Amendment to Owner Participation Agreement dated on or about August 7, 2007, a Fourth Amendment to Owner Participation Agreement dated on or about November 20, 2007, and a Fifth Amendment to Owner Participation Agreement dated on or about May 18, 2010.

Under the terms of the OPA, the CDC agreed to provide financial incentives to the Development to assist with the construction of infrastructure in a not-to-exceed net present value aggregate total amount of $10,000,000, using a discount rate of eight percent of which $2,140,462 has been paid as of September 6, 2013. The CDC also agreed to provide financial incentives to assist with the production of affordable housing within the Development in a not-to- exceed net present value aggregate total amount of $8,500,000, less certain adjustments, of which approximately $4,250,000 was paid to Cabrillo Economic Development Corporation (“Cabrillo”) in conjunction with development of the Paseo Santa Clara project and the remaining $4,250,000 has been and will continue to be paid over time, as specific conditions in the OPA are satisfied.

In exchange for these financial incentives, RiverPark A agreed to comply with all conditions of entitlement approvals and environmental mitigation for the Development and to develop the public infrastructure, facilities, and improvements required pursuant to the requirements of the RiverPark Specific Plan, the EIR, the Development Agreement, and the OPA, including those requirements related to timing and phasing of commercial development and minimum affordable housing requirements. The terms of the OPA relating to phasing of the Development and affordable housing parallel such terms in the Development Agreement. See “Development Phasing Requirements” and “Affordable Housing” below.

In addition, RiverPark A agreed initially to develop a hotel with approximately 320 rooms on or before November 19, 2009. The hotel was originally scheduled to be built on a 12.67 acre portion of property which comprised the eastern portion of The Landing and all of the property contained in The Pointe. Subsequent amendments to the OPA made the following changes to such requirement: (1) reduced the size of the hotel parcel from a 12.67 acre site to a site of approximately five acres and moved the hotel location to five acre parcel in the northwest portion of The Collection and then moved the hotel location back to a five acre parcel in The Landing (the current anticipated location) and permitted construction of the Target Store in the northwest portion of The Collection; (2) extended the time period for commencement of construction of the hotel until December 31, 2011; (3) modified the manner in which the CDC

could acquire and develop the hotel site if construction did not commence by December 31, 2011, and diligent efforts were not used to complete the hotel within thirty six (36) months after the commencement of construction; and (4) modified the way in which the hotel site may be developed for retail purposes if the CDC did not develop the hotel site with a hotel in the specified manner. The current five acre hotel parcel is owned by Riverpark Hotel II, LLC.

Pursuant to state legislation enacted in 2011, the CDC was dissolved by operation of law as of February 1, 2012 and the City has succeeded to the obligations of the CDC under the OPA as its successor agency.

Certain Remaining Infrastructure Requirements. Pursuant to the OPA and the Development Agreement, the following work is required to be completed: (i) Vineyard Avenue: complete minor widening, add raised median, restriping and complete signal upgrades, minor utility relocation, sidewalks, and landscaping; (ii) RiverPark master plan streets: complete road and utility construction and final cap paving of roads within areas of the development after the home construction; (iii) Reclamation Basins: repair north slope of Large Woolsey Basin and construction of perimeter maintenance road, and complete Small Woolsey/Brigham Basin trail completion, landscape, fencing and conduct ongoing maintenance of all three basin slopes until basins are accepted by appropriate public entity; (iv) Crescent Park: complete construction of Crescent Park and related facilities; (v) Street Parkways: complete construction of street parkways; and (vi) complete construction of the second elementary school pursuant to the Mitigation Agreement. The total cost of this work is approximately $32,061,970 (including the remaining costs related to the second elementary school (one of three Required Schools), currently estimated to be approximately $17.6 million). It is currently anticipated that (i) remaining costs related to the second elementary school will be financed in part from proceeds of Additional Bonds and in part from additional State funding for the second elementary school, as well as additional payments to be made under the OPA and from equity contributions, if necessary, and (ii) the remaining costs for all remaining infrastructure requirements will be financed from additional payments to be made under the OPA and from equity contributions. See “FACILITIES TO BE FINANCED WITH PROCEEDS OF THE SERIES 2013 BONDS.”

Development Phasing Requirements. The Development Agreement and OPA provide phasing and development schedules for residential and commercial development within the Development. To date all previous development milestones (as have been amended or extended) have been satisfied. The most recent development milestone to be satisfied required certificates of occupancy to be issued for at least 680,000 square feet of commercial development by December 31, 2015. As of September, 2013, approximately 731,000 square feet of commercial property has received certificates of occupancy/completion. Satisfaction of such milestone now permits builders to obtain certificates of occupancy for up to 2,413 market- rate dwelling units in the Development.

Affordable Housing. The Development Agreement provides that the Development is to include 140 affordable dwelling units for rent to very low income households (together with all other affordable dwelling units required for the Development, the “Affordable Housing Units”). This requirement was satisfied by transferring land to Cabrillo, which completed and rented the 140 units.

The Development Agreement originally required 252 affordable dwelling units for sale (of which 140 units are to be for sale to low income households, and 112 units are to be for sale to moderate income households). In March 2012, the City approved a Specific Plan Minor Modification allowing an increase of 26 market rate dwelling units to be added to Lot 18 but also

requiring two additional affordable units (moderate income), thereby raising the requirement for Affordable Housing Units in that category from 112 to 114. As of August 31, 2013, 112 of the 140 required units for sale to low income households have been sold, and 41 of the 114 required units for sale to moderate income households have been sold, for a total of 153 affordable units sold. The 153 affordable units include 98 units located in Planning Areas F and J and approximately 55 units in the Vista Urbana project.

In June 2012, the City approved the Fourth Amendment to the Development Agreement and RiverPark Specific Plan Amendment No. 3 which allowed an increase of 212 high density dwelling units to Lots 16 and 17 to the RiverPark Specific Plan (the Tempo and Sonata projects). The approval of the Fourth Amendment to the Development Agreement also required an increase of 32 affordable high density rental units on such lots. Of the additional affordable high density dwelling units, 13 units are required to be available to very low income households and the remaining 19 dwelling units are available to moderate income households, all of which will be located within the Sonata development on Lot 17. None of these 32 units have been completed.

The following table summarizes the affordable housing requirements for the Development.

RiverPark Development Affordable Housing Requirements As of August 31, 2013

Units Units Units Minimum Affordable Housing Requirement Required Satisfied Remaining

For Rent to Very Low Income Households 153 140 13 [1]

For Rent to Moderate Income Households 19 0 19 [1]

For Sale to Low Income Households 140 112 28 [2]

For Sale to Moderate Income Households 114 41 73 [2]

TOTALS 426 293 133 ______[1] Expected to be satisfied by the completion of 53 units in the Sonata project. [2] Expected to be satisfied by the completion of remaining 101 units in the Vista Urbana project.

Certain milestones in the development of Affordable Housing Units must be achieved in order to continue to develop market rate residential units in the Development. Before certificates of occupancy are issued for more than 1,735 market-rate dwelling units, the City must have issued certificates of occupancy for not less than 224 Affordable Housing Units, including 140 rental dwelling units affordable to very low income households and 84 for-sale dwelling units affordable to low and moderate income households. The Development has satisfied this phasing milestone. As of August 31, 2013, approximately 293 certificates of occupancy have been issued, including the 153 units for sale to low and moderate income households and the 140 units for rent to very low income households described above. This currently allows up to 1,735 market rate dwelling unit certificates of occupancy. See Table 8 for a description of communities and locations where residential units have been completed.

In addition, before the certificates of occupancy are issued for more than 2,339 market- rate dwelling units, the City must have issued certificates of occupancy for an additional 82 Affordable Housing Units. The Development is approximately 13 Affordable Housing Units short of meeting this phasing milestone.

Finally, before the certificates of occupancy are issued for more than 2,413 market-rate dwelling units, the City must have issued certificates of occupancy for an additional 86 Affordable Housing Units. Including the 13 Affordable Housing Units mentioned in the preceding paragraph, the Development is approximately 99 Affordable Housing Units short of meeting this phasing milestone.

For Planning Area H of the Development, an affordable housing in-lieu fee of $4,235 must be paid for each of the 382 dwelling units constructed in Planning Areas H-1 through H-5, but in no event will the total amount of the affordable housing in-lieu fees be less than $1,617,770. Such fees have been paid as building permits have been pulled in such Planning Areas.

Currently, it is anticipated that the remaining requirements contained in the Development Agreement and the OPA regarding the construction of Affordable Housing Units will be satisfied by the construction and sales of the remaining portion of the Vista Urbana project, a 156-unit, for-sale, low and moderate income housing development in Planning Area F, as well as the Sonata project on Lot 17. The Vista Urbana project opened for sales later in 2012 and is selling units and thus far exceeding Development Agreement phasing obligations for affordable housing requirements. Sonata has completed its design review process.

Donation Agreement and Settlement Agreement. The School District and RiverPark B entered into a Donation Agreement, dated as of September 1, 2005 (the “Donation Agreement”), pursuant to which RiverPark B agreed to donate, by no later than December 31, 2006, property within the Community Facilities District to the School District identified as follows: Lots 31 and 32, as identified in the final tract map for Tract No. 5352-1, recorded on August 31, 2004, located in Planning Area L in the Community Facilities District, which is located adjacent to Vineyard Avenue (the “Donated Parcel”). Pursuant to subsequent letter agreements between the parties, the deadline for the transfer of title to the Donated Parcel was extended to August 31, 2013. The deed transferring title to the Donated Parcel to the School District was executed and delivered by RiverPark B on August 30, 2013.

The Donation Agreement provided for the allocation of the proceeds of the Series 2005 Bonds and the Series 2013 Bonds to pay for fixtures, furniture and equipment, the costs of acquiring and constructing Required Schools and the costs of additional Facilities permitted to be financed by the Community Facilities District. However, the allocation of such amounts has been amended as described below.

Pursuant to the Settlement Agreement and Release dated March 10, 2011, by and among the School District and various of the Master Developer Entities (the “Settlement Agreement”), the Series 2005 Bond proceeds were used in large part to cover costs of construction of the first elementary school and the Series 2013 Bond proceeds shall be split as follows: (i) 4.59% to the School District; and (ii) the remainder towards reimbursement to the Master Developer Entities for the costs of construction of the intermediate school of the Required Schools pursuant to the terms of the Settlement Agreement (in each case after the payment of capitalized interest, costs of issuance, underwriter’s discount and any required bond reserve fund deposits).

Environmental Conditions

Environmental Impact Report. In connection with the approval of the RiverPark Specific Plan, the City approved an environmental impact report (as amended, the “EIR”) that generally analyzed the environmental impacts of the Development. The City also prepared a mitigation monitoring program in conformance with Section 21081.6 of the California Environmental Quality Act (the “Mitigation Monitoring Program”). The City certified the EIR in July 2002. The statute of limitations to challenge the City’s action with respect to the EIR expired in August 2002 and the City’s action is now final and unappealable.

Hazardous Substances. For a discussion of the risks associated with the discovery of hazardous substances on the property within the Community Facilities District, see “RISK FACTORS – Hazardous Substances.”

San Buenaventura Settlement Agreement. The City of San Buenaventura (“San Buenaventura”) disputed certain of the findings contained in the EIR, dealing primarily with the need for roadway improvements in San Buenaventura. RiverPark Development, LLC (one of the Master Developer Entities) and San Buenaventura have entered into a Settlement Agreement and Release Between San Buenaventura and RiverPark Development, dated August 5, 2002 (the “San Buenaventura Settlement Agreement”). Pursuant to the San Buenaventura Settlement Agreement, RiverPark Development agreed to pay San Buenaventura $4,614,034 (the “San Buenaventura Settlement Fee”), so long as the Development receives final approval and necessary entitlements, and is completed.

The San Buenaventura Settlement Fee has been paid in part and will continue to be paid as building permits are obtained for the commercial and residential components of the Development. San Buenaventura currently receives $542.83 per dwelling unit and $1.24 for each square foot of commercial space for which a building permit is pulled. The obligation to pay the San Buenaventura Settlement Fee ceases after all commercially and residentially zoned property within the Development has been developed and the applicable San Buenaventura Settlement Fee has been paid for such development or 25 years from the effective date of the San Buenaventura Settlement Agreement, whichever occurs first.

County Settlement Agreement. The County entered into a settlement agreement with certain of the Master Developer Entities, effective August 5, 2003 (the “County Settlement Agreement”), to settle any potential claims by the County that the environmental impacts of the Development were not adequately mitigated. Under the terms of the County Settlement Agreement, the County receives a County Settlement Fee for commercial and residential development within the Development. As of October 2, 2013, the amount of the County Settlement Fee ranges from $518 to $753 for residential dwelling units (based on type of unit) and is approximately $987 per 1,000 square feet of commercial space. The fee is increased on October 2 of each year based upon the increase in the Engineering News Record Construction Cost Index in the prior year. The County Settlement Agreement also required payment of a total of $1,000,000 toward a storm drain system in the adjoining El Rio neighborhood to address existing drainage issues. Construction of such storm drain system has been completed and facility has been accepted by the County.

Four Party Agreement. A Four-Party Agreement Regarding Oxnard Plain Groundwater Recharge Program and RiverPark Reclamation Plan (the “Four Party Agreement”), was entered into on July 24, 2003, by and among RiverPark B, the City, United Water Conservation

District (“UWCD”), and the Oxnard Plain/RiverPark Reclamation and Recharge Joint Powers Authority (the “JPA”). The Four Party Agreement provides a mechanism and procedure for three completed recharge basins within the Development to be conveyed to the JPA, the City, and/or UWCD once specific conditions have been met. The Four Party Agreement also provides (i) a formula for the distribution of certain grant funds to the parties, (ii) a formula by which the JPA would participate in cost savings (if any) relating to the reclamation work within the Development; (iii) a process for the short-term funding by RiverPark B of the recharge basin maintenance; and (iv) a short term remediation by RiverPark B of any slope failures in the recharge basins.

Reclamation work has been completed for two of the three recharge basins; The Small Woolsey and Brigham Basin reclamation work has been completed and is under maintenance until acceptance by the City and the JPA and/or UWCD. Work in the third basin, Large Woolsey Basin is approximately 80% complete pending repair in one slope area. This remaining work is expected to be completed by the fourth calendar quarter of 2013 and will thereafter be maintained until acceptance by the City, the JPA and/or UWCD.

FEMA Flood Control Decertification. The Santa Clara River Levee, which runs along the northern border of the Community Facilities District, does not meet the new post-Katrina federal levee standards and has been decertified by the Federal Emergency Management Agency (“FEMA”). The levee is owned by the County.

The U.S. Army Corps of Engineers will need to complete a study (the “Flood Insurance Study”) of the Santa Clara River Watershed to determine the new Base Flood Elevation. A Congressional appropriation and a County contribution is anticipated to be required to fund this study. The Flood Insurance Study will analyze the Santa Clara River at a maximum flow rate of 226,000 cubic feet per second. The last study (October 1985) was analyzed at a maximum flow rate of 165,000 cubic feet per second. There can be no assurance as to if or when the federal and County funding for the Flood Insurance Study is obtained or if or when the study is completed.

Once the Base Flood Elevation has been determined, new Flood Insurance Rate Maps (“FIRM”) will be issued. Once the FIRM is issued it becomes effective 90 days later. It is anticipated that the new FIRM will be issued in late 2015 or later, depending on when funding is provided.

It is possible that the new FIRM will reclassify 204 lots (in the Morning View and Sienna developments) as well as the remaining undeveloped portion of the Westerly II development as being within Flood Zone A; however, the actual lots that may be affected will not be known until the new FIRM is completed. These lots are currently in Flood Zone X because they are protected by the Santa Clara River Levee. No new homes in Flood Zone A may be built unless elevated more than two feet above the new Base Flood Elevation. For new homes below that level, a solution will need to be devised to remove the site from Flood Zone A, and no assurance can be given as to the feasibility or cost of any such solution. The City has indicated that it will continue to allow development to proceed as currently approved until such time as the new FIRM is effective.

In addition, the new FIRM could affect existing homes in the Community Facilities District. Any existing homes in Flood Zone A with a mortgage owned by a federal regulated lender that are not at least two feet above the new Base Flood Elevation will need to get flood insurance.

The new FIRM could also expand Flood Zone A to encompass The Landing, an approximately nine-acre property designated for retail and hotel development. See “THE DEVELOPMENT – Overall Development Plan and Development Status – Commercial.” If the flood zone encompasses The Landing, no assurance can be given that such property will be developable or will be developed.

Any existing commercial development that falls within the newly drawn flood zone might be required to obtain flood insurance or undertake other measures to mitigate flood risk. No assurance can be given that any particular commercial property will or will not fall within the newly drawn flood zone and no assurance can be given as to the nature of any mitigation measures that might be required.

Overall Development Plan and Development Status

Residential. The overall development plan and development status of the residential property in the Community Facilities District is described in the table below.

TABLE 8 RESIDENTIAL DEVELOPMENT PLAN AND DEVELOPMENT STATUS (as of August 31, 2013)

Potential Completed Square Units per and Sold Planning Residential Project Name Footage Develop. or Rented Area [1] Developer (Product Type) [2] (Range) Plan [3] Units Comments/Status A Capri/KW Serenade LLC Serenade (HDMF for rent) N/A 400 400 Completed and occupied. A E.D./KOH Lot 3 N/A 40 0 Design Development Permit Required [4] D Wolf Partners Mosaic (HDMF for rent) N/A 224 0 Under construction. D Wolf Partners Tempo (HDMF for rent) N/A 235 0 Design phase. D American Communities, LLC Sonata (HDMF for rent) N/A 53 0 Affordable; design complete. F AGS Destination, LLC Destination (SFA) 1,464-1,870 54 54 Affordable, closed out. F AGS Destination, LLC Reflections (SFA) 1,321-1,475 62 62 Completed and sold. F Centex Homes Trellis (SFA) 1,664-2,096 56 56 Completed and sold. F Aldersgate Investments Vista Urbana (SFA) 981-1,407 156 55 36 units under construction; 5 model homes constructed. F Cabrillo EDC Paseo Santa Clara (HDMF N/A 140 140 Affordable, occupied. for rent) G Centex Homes Promenade (SFA) 1,835-2,116 36 36 Completed and sold out. G Corona Riverpark Promenade (SFA for rent) 1,835-2,116 80 80 80 units completed with certificate of occupancy. G Centex Homes Luminaria (SFA) 1,473-1,686 102 102 Completed and sold out. G Corona Riverpark Luminaria (SFA for rent) [5] 1,473-1,686 84 0 Design approval pending to start construction. G AGS Market Street, LLC Market Street (SFA) 2,362-2,631 32 32 Completed and sold out. G AGS Market Street, LLC Boardwalk (SFA) 1,800-2,162 81 77 4 units to build. H Standard Pacific Pacific Crossing (SFD) 1,547-2,097 104 77 11 under construction, 16 not yet permitted. H Centex Homes Westerly II (SFD) 1,976-2,420 14 14 Completed and sold out. H Corona Riverpark Westerly II (SFD) [5] 1,976-2,420 69 0 Finished lots, not yet permitted. H Corona Riverpark Veranda (SFD) [5] 2,672-2,968 95 0 Finished lots, not yet permitted. H AGS Land Holdings I LP Morning View (SFD) 1,652-1,987 113 0 Mass graded lots, all lots currently for sale. H AGS Land Holdings I LP Sienna (SFD) 1,881-2,337 91 0 Mass graded lots, all lots currently for sale. I Standard Pacific Collage I (SFA) 1,456-1881 44 44 Completed and sold out. I Standard Pacific Collage II (SFA) 1,456-1881 60 60 Completed and sold out. I Standard Pacific Avenue II (SFA) 2,137-2,303 32 30 2 available for sale. I Standard Pacific Landing (SFA) 1,050-1,658 78 78 Completed and sold out. I Standard Pacific Waypointe (SFA) 1,333-1,765 104 99 5 under construction I AGS Meridian, LLC Meridian (SFA) 1,301-1,980 87 87 Completed and sold out. I AGS Meridian, LLC East End (SFA) 1,478-2,112 72 0 24 permits pulled. J Standard Pacific Celadon (SFD) 1,527-2,076 68 68 Completed and sold out. J Standard Pacific Avenue (SFA) 2,137-2,303 28 28 Completed and sold out. J Standard Pacific Daybreak (SFA) 1,543-1,662 62 62 44 units affordable and 18 market rate, sold out. K Standard Pacific Avenue (SFA) 2,137-2,303 13 13 Completed and sold out. K Centex Homes Westerly (SFD) 1,979-2,418 55 55 Completed and sold out. K Shea Homes Tradewinds (SFD) 2,263-2,453 19 19 Completed and sold out TOTALS 3,043 1,759

[1] A diagram showing all the Planning Areas is set forth immediately preceding “THE DEVELOPMENT.” [2] Key: HDMF – high-density multifamily; SFA – single family attached; SFD – single family detached. [3] Per Specific Plan, as amended through August 1, 2012. [4] Lot 3 is currently entitled for either 40 high density residential units or commercial uses. Development plans for Lot 3 are undetermined at this time. [5] Product type listed is the currently entitled and approved product type. No assurances can be made that the developer of this property will not apply for approval for changes in the product type. Source: Riverpark Legacy, LLC

In March 2012, the City approved a Minor Modification to the RiverPark Specific Plan which allowed an increase of 26 Dwelling Units in Planning Area F1. This increased the Specific Plan overall maximum dwelling unit count from 2,805 to 2,831.

In June 2012, the City approved the Fourth Amendment to the Development Agreement and RiverPark Specific Plan Amendment No. 3 which allowed an increase of 212 high density dwelling units to Lots 16 and 17 to the RiverPark Specific Plan. The RiverPark Specific Plan was amended to allow an overall maximum unit count of 3,043 residential dwelling units.

The following communities have been sold out: Destination (F2), Reflections (F2), Trellis (F3), Market Street (G1), Collage (I3), Collage II (I2 and I3), The Landing (I), Meridian (I2), Celadon (J1), The Avenue (J3 and K1), Daybreak (J2), Westerly (K2), Tradewinds (K3), Centex Promenade (G3) and Centex Luminaria (G2). Sales or leasing continue in the Corona RiverPark Promenade (G3), Boardwalk (G1) The Avenue II (I1), Waypointe (I3), Pacific Crossing (H1), East End (I4) and Vista Urbana (for sale affordable housing) (F1) communities.

The following high density residential projects have been completed: Serenade, 400 units, (Planning Area A) and Paseo Santa Clara, 140 affordable units, (Planning Area F1). Mosaic, 224 units (Planning Area D) is under construction with phased occupancy commencing in early 2014.

Commercial. The current development plan and development status of the commercial property in the Community Facilities District is set forth in the table below.

TABLE 9 COMMERCIAL DEVELOPMENT PLAN AND DEVELOPMENT STATUS (as of August 31, 2013)

Max Planning Approved Permitted Area Developer or Owner Project Name (Sq. Ft.) [1] (Sq. Ft.) Comments/Status A E.D./KOH Lot 3 20,000 0 Project design TBD [2] A Riverpark Legacy TBD 15,000 0 Development plans TBD C RiverPark Pointe, LLC, Commercial/Retail/Hotel 478,000 0 Project design TBD RiverPark Landing, LLC and Riverpark Hotel II, LLC D SOCM I, LLC The Collection 755,145 585,707 57% executed leases. D Target Store Target Store 148,855 148,855 Sold and occupied. E Riverpark Myrtle, LLC TBD 111,000 0 McDonald’s lease and City of Oxnard executed. Other Various N/A 45,000 0 [3] TOTALS 1,573,000 734,562

[1] Per RiverPark Specific Plan as of August 1, 2012. [2] Lot 3 is currently entitled for either 40 high density residential units or commercial uses. Development plans for Lot 3 are undetermined at this time. [3] Planning Areas F, G, I, J and K are collectively approved for approximately 45,000 square feet of commercial space. However, no commercial development in these Planning Areas is anticipated at this time. Source: Riverpark Legacy, LLC and commercial owners listed above.

The major commercial component of the Development is The Collection, a regional open-air lifestyle center with total entitlements of 904,000 square feet consisting of retail and office space (approximately 755,000 square feet, owned by SOCM I, LLC) and an adjacent Target store (approximately 148,000 square feet, owned by Target Corporation). Construction

of The Collection began in November of 2007, and was temporarily halted in 2009 due to market conditions, waiting on an improved retail leasing market. Construction restarted in January 2012 with the objective of completing the retail building shells and initial tenant improvements in 2012 and 2013. The initial development in The Collection contains approximately 585,000 square feet of shell retail space and was completed in the second quarter of 2013. As of September 2013, The Collection has approximately 308,000 square feet of executed retail leases and 23,000 square feet of executed office leases. Most major tenants have opened their stores. The major tenants include Whole Foods, Cinemark Theater, REI, H&M, ULTA, Yardhouse and Toby Keith’s, and the adjacent Target. The Target store opened in July, 2011, Cinemark Theater opened in October, 2012, REI opened in March, 2013, and Whole Foods Store opened in June, 2013. ULTA and H&M are planning to open prior to the end of 2013.

Of the remaining entitlements, a 43,000 square-foot 24 Hour Fitness building is currently processing its Design Development Review Permit and the owner expects 24 Hour Fitness to submit plans for a building permit in late 2013. Additionally, an 8,400 square foot restaurant has been submitted to the City for discretionary approval, which is expected by late 2013. It is anticipated that construction of both buildings could commence in early 2014. The development of the balance of the buildings is subject to overall market conditions.

The 4.01 acre parcel in Planning Area E (Myrtle Site) contains three parcels. One parcel contains 1.40 acres and will not be subject to the levy of the Special Tax because it is owned by the City of Oxnard. The remaining two parcels contain 2.61 acres and are owned by Riverpark Myrtle, LLC. Planning Area E is currently entitled for 111,000 square feet of commercial space, including office, retail, food service facilities and take-out or drive-through restaurants.

Riverpark Myrtle has executed a ground lease for one acre of the property for an approximately 3,500 square foot McDonald’s USA, LLC restaurant. Riverpark Myrtle received Design Development Review Permits on September 12, 2013, related to the McDonald’s use as well as the associated site improvements. Plans for the McDonalds have been submitted to the Oxnard Building Department, and it is anticipated that issuance of a building permit will occur in late 2013. Construction is currently scheduled to commence fourth quarter 2013 and McDonald’s is expecting to open in 2014.

Development of the remaining 1.6 acres of the property is subject to overall market conditions and pre-leasing commitments.

The Landing and The Pointe are zoned for up to 478,000 square feet of neighborhood retail and convention hotel use. The RiverPark Specific Plan allows up to 206,000 square feet of retail uses including office, retail and food service facilities and 272,000 square feet with 320 rooms designated for the convention hotel use. Development of these sites is subject to market conditions and pre-leasing commitments. There are no specific plans for development in the near term.

No assurances can be made that the current developers of the land within the Community Facilities District will have the resources, willingness and ability to successfully complete development or marketing activities on their property within the Community Facilities District as currently planned.

Market Absorption Study

A market absorption study with respect to the proposed development of the property within the Community Facilities District dated June 17, 2013, and revised on July 26, 2013, was prepared by Empire Economics, Inc., Capistrano Beach, California in connection with issuance of the Series 2013 Bonds. The purpose of the Market Absorption Study was to conduct a comprehensive analysis of the product mix characteristics, macroeconomic factors, and microeconomic factors as well as the potential risk factors that are expected to influence the absorption of the homes in the Community Facilities District, in order to determine, as of July 26, 2013, the following:

(a) For the currently active as well as the forthcoming residential and commercial projects, their estimated absorption schedules, from market-entry to build-out on an annualized basis.

(b) A discussion of potential economic and real estate risk factors that may adversely impact the marketability of the remaining residential and commercial products to be absorbed.

Projected Absorption Rates. Based on the market assumptions contained therein, the Market Absorption Study projected the following absorption rates for the property within the Community Facilities District:

Residential Projects. The Market Absorption Study’s estimated absorption (escrow closings for-sale homes and apartment rentals) schedules for the residential projects in the Community Facilities District are as follows:

June-December 2013: There are expected to be a total of 235 apartment units/homes absorbed:

• Apartments: 100 units in Mosaic as it commences rentals.

• Attached For-Sale: 100 homes closing escrow in the currently active projects.

• Detached For-Sale: 35 homes as the final currently active project closes out.

January-December 2014: There are expected to be a total of 345 apartment units/homes absorbed:

• Apartments: the remaining 124 units in Mosaic.

• Attached For-Sale: the remaining 171 homes in the currently active projects.

• Detached For-Sale: 50 homes as a new project enters the marketplace.

January-December 2015: There are expected to be a total of 295 apartment units/homes absorbed:

• Apartments: 150 apartment units in a new project that enters the marketplace.

• Attached For-Sale: 45 homes in a new project that enters the marketplace.

• Detached For-Sale: 100 homes in new projects that enter the marketplace

January-December 2016: There are expected to be a total of 302 apartment units/homes absorbed:

• Apartments: the final 138 apartment units in the new projects.

• Attached For-Sale: the remaining 39 homes in the new project

• Detached For-Sale: 125 homes in new projects.

January-December 2017: There are expected to be a total of 93 homes absorbed:

• Apartments: Closed-Out in 2016.

• Attached For-Sale: Closed-Out in 2016

• Detached For-Sale: the remaining 93 homes in new projects.

The estimated absorption schedules for the residential projects in the Community Facilities District are subject to change due to potential shifts in economic/real estate market conditions and/or the development strategy by the various builders.

Potential Risk Factors Regarding Residential Projects. The Market Absorption Study noted that, although the economic and real estate conditions for the currently active as well as the forthcoming projects in the Community Facilities District are expected to be favorable, there are some potential risk factors:

• During the next several years, there are potential factors which may result in higher mortgage rates, as the Federal Reserve re-sells the mortgage securities and also the treasury bonds that it has purchased in recent years.

• Also, during the next several years, as the federal government moves toward reducing its deficits, there may be attempts to curtail the use of mortgage deductions, and this may adversely impact the housing market.

In addition, the estimated absorption schedules for residential projects, which represent escrow closings to homeowners, are subject to the assumptions and qualifications set forth in the Market Absorption Study.

Commercial Projects. With regards to the development and marketing of the forthcoming commercial parcels, the Market Absorption Study partitioned them into four categories, as described below.

1. Developed/Active: The major commercial development thus far has been in Planning Area D, “The Collection,” a premier retail center that includes major tenants such as Target, Whole Foods, REI, H&M and Cinemark Theaters as well as numerous smaller/moderate sized stores.

• Of the maximum allowable 904,000 square feet of building space, 734,562 square feet (81%) of the allowable space has been constructed/built, leaving 169,337 square feet (19%) for potential future development.

Status of Buildings that have been Constructed: 734,562 square feet:

• With regards to the 734,562 square feet of space that has been constructed, there were executed leases for about 387,939 square feet of space as of April 1, 2013, for an executed lease percentage of about 53%. All of these stores are expected to be occupied by the end of 2013.

• So, there is another 346,724 square feet of building space that that has been constructed but has not yet been leased, for a vacancy rate of about 47%, and most of these stores are for moderate/smaller sized vs. major tenants. Since the major tenants are essentially in place, the remaining space is expected to be leased during 2013-2016+.

Status of Future Buildings to be Constructed: 169,337 square feet:

• With regards to the remaining 169,337 square feet, based upon its maximum entitlements, this is expected to be utilized for additional commercial outlets. However, considering the significant amount of space that is currently available, there is not expected to be additional space constructed in the near-term.

2. Near Term Development (Next 3 Years):

• Planning Area E has some development activity in the pipeline for a fast food outlet with about 3,500 square feet of building space that may enter the marketplace during 2014.

• Planning Area D has some development activity in the pipeline for a 24 Hour Fitness Super Sport with an estimated 43,000 square feet of building space that may enter the marketplace during 2015.

3. Future Development: Since these parcels are NOT in the development stage, with regards to site planning, building permits or construction, they are regarded as being three or more years from entering the marketplace, and so their absorption is not set forth in the Market Absorption Study; the specific Planning Areas are as follows:

• Planning Area C with for a Convention/Hotel District with 478,000 square feet

• Planning Area B with 104,000 square feet

• Planning Area A with about 20,000 square feet, reduced from 456,000 square feet due to apartments.

4. Commercial Not Probable: There are another five Planning Areas that had development potential for smaller commercial projects; however, these are in areas that have already been committed for residential projects, and so their commercial development in not probable since the land was used instead for residential products.

• Planning Area G: 15,000 square feet

• Planning Area I: 10,000 square feet

• Planning Area J: 10,000 square feet

• Planning Area F: 5,000 square feet

• Planning Area K: 5,000 square feet

Conclusions on Near-Term Commercial Absorption. Based upon an analysis of the recent/expected development-marketing conditions for commercial properties in the Community Facilities District is for leasing up the existing building space in Planning Area D (The Collection), as additional retail stores utilize the infill sites that are currently available. The other development is in Planning Area E, which has a fast food outlet in the planning stages. With regards to the other parcels, they are regarded as having a longer term development potential, of at least some three+ years; since they are not currently active in the development process, their absorption is estimated as having a three year+ time horizon

None of the Underwriter, the Community Facilities District or the School District makes any representation as to the accuracy or completeness of the Market Absorption Study. The Market Absorption Study is attached as APPENDIX D and should be reviewed in its entirety.

PROPERTY OWNERSHIP

General

Ownership of the property subject to the Special Tax in Fiscal Year 2013-14 is significantly diversified with a majority of the residential property being either owned by homeowners or leased by end user tenants. The remaining property under development, or to be developed, is owned by multiple, unaffiliated developers, some building residential units for sale and some building residential units for rent (including affordable and market rate units) and others developing commercial uses. See “THE DEVELOPMENT – Overall Development Plan and Development Status”.

Original Developers. The sole member of both of the Original Developers is RiverPark Development, L.L.C., a Delaware limited liability company (“RiverPark Development”). The sole member of RiverPark Development is Riverpark Legacy, LLC (“Riverpark Legacy” and together with RiverPark Development and the Original Developers, the “Master Developer Entities”). Riverpark Legacy was formed on November 12, 2003, pursuant to a limited liability company agreement executed by Shea RiverPark Developers, LLC, a Delaware limited liability company (“Shea RiverPark Developers”). The original limited liability company agreement was amended and restated by that certain First Amended and Restated Limited Liability Company Agreement of Riverpark Legacy, LLC, dated as of February 17, 2004, among Shea RiverPark Developers, Centex Homes (“Centex”), and Standard Pacific Homes (“Standard Pacific”). Shea RiverPark Developers serves as the managing member of Riverpark Legacy. Shea Homes Limited Partnership, a California limited partnership (“Shea Homes”) is the managing member of Shea RiverPark Developers and is empowered to act on Riverpark Legacy’s behalf with respect to the Development. The Master Developer Entities continue to own property in the Community Facilities District, consisting of one parcel for the construction of the second public elementary school for the School District (one of three Required Schools), one parcel for the construction of detention basins to be transferred to the City, one parcel for the construction of reclamation basins to be transferred to the City or other governmental agency, and one approximately 1.5-acre parcel currently entitled for commercial uses. Riverpark Legacy may own other Exempt Property developed as or intended for public infrastructure as the remaining infrastructure obligations are completed. See “THE DEVELOPMENT” for a discussion of the remaining infrastructure development to be carried out by Riverpark Legacy.

Current Property Ownership. The table below shows the ownership of the taxable property within the Community Facilities District as of January 1, 2013, the actual Fiscal Year 2013-14 Special Tax levy on the property classified as Taxable Property for Fiscal Year 2013- 14, and the resulting percentage share of the Special Tax levy borne by the Taxable Property. The table also shows the ownership of the property entitled for residential development but currently classified as Undeveloped Property for Fiscal Year 2013-14, which will not be subject to the levy of the Special Tax for Fiscal Year 2013-14. Undeveloped Property within the Community Facilities District that is entitled for commercial uses is not included in the following table. Approximately 125.78 acres (including both property zoned for residential and commercial uses) are classified as Undeveloped Property in Fiscal Year 2013-14. See “SECURITY FOR THE BONDS – Rate and Method Assigned Annual Special Taxes” for a description of the Assigned Annual Special Tax rates for each of the Zones in the event Special Taxes were to be levied on Undeveloped Property.

TABLE 10A Property Ownership by Share of Special Tax Levy Fiscal Year 2013-14 2013-14 Special Tax % Property Ownership Project Name Parcels Levy [1] Share

TAXABLE PROPERTY [2]

Residential For Sale Individual Homeowners [3] 1,180 $2,264,222 61.78% Standard Pacific 6 13,966 0.38 Total Residential For Sale 1,186 $2,278,188 62.16%

Residential Rental Capri/KW Serenade LLC Serenade 400 $348,584 9.51% Wolf Partners Mosaic 224 227,575 6.21 Corona Riverpark Promenade LLC The Vines [4] 80 122,915 3.35 Cabrillo Economic Development Paseo Santa Clara 140 61,460 1.68 Total Residential Rental 844 $760,534 20.75%

Commercial Property [5] SOCM I LLC [6] The Collection; Cinemark Theater 557,764 BSF $496,410 13.54% Target Target Store 145,963 BSF 129,907 3.54 Total Commercial Property 707,727 BSF $626,317 17.09%

TOTAL FISCAL YEAR 2013-14 TAXABLE PROPERTY $3,665,039 100.00%

UNDEVELOPED RESIDENTIAL PROPERTY

Wolf Partners Tempo High Density 235 $0 0.00% American Communities Sonata (affordable units for rent) 53 0 0.00 Corona Riverpark Luminaria 84 0 0.00 Corona Riverpark Westerly II 69 0 0.00 Corona Riverpark Veranda 95 0 0.00 AGS Meridian LLC East End 72 0 0.00 AGS Land Holdings I L.P. Morning View 113 0 0.00 AGS Land Holdings I L.P. Sienna 91 0 0.00 Aldersgate Investments Vista Urbana (affordable for sale) 108 0 0.00

TOTAL FISCAL YEAR 2013-14 UNDEVELOPED RESIDENTIAL 920 $0 0.00%

[1] Represents the actual Fiscal Year 2013-14 Special Tax levy to satisfy the Minimum Annual Special Tax Requirement. See "SECURITY FOR THE BONDS - Rate and Method." [2] Represents parcels classified as "Developed Property" under the Rate and Method for Fiscal Year 2013-14, which is generally defined as property for which building permits were issued on or before January 1, 2013. See "SECURITY FOR THE BONDS - Rate and Method." The 2013 Bonds are being sized assuming no revenue from Undeveloped Property. [3] Includes 48 units in the Vista Urbana development, which are affordable units representing 0.79% of the Fiscal Year 2013-14 Special Tax levy. At build out, Vista Urbana is anticipated to consist of 156 affordable units. Affordable units are taxed at reduced Special Tax rates under the Rate and Method. See "SECURITY FOR THE BONDS - Rate and Method." [4] Corona Riverpark Promenade has completed 80 units in The Vines which are currently for rent but which may be sold when market conditions are more favorable. [5] Under the Rate and Method, this property is classified as Non-Residential Property and is taxed under the second step in the method of apportionment in the Rate and Method, such that no Special Tax will be levied on it once Special Taxes levied on property classified as Residential Property are sufficient to satisfy the Minimum Annual Special Tax Requirement. See “SECURITY FOR THE BONDS – Rate and Method.” [6] Includes the Cinemark Theater (representing 1.61% of the Fiscal Year 2013-14 Special Tax levy) and The Collection shopping center (representing 11.93% of the Fiscal Year 2013-14 Special Tax levy). Source: Dolinka Group, LLC.

The table below shows the ownership of the property within the Community Facilities District as of January 1, 2013, the projected Fiscal Year 2014-15 Special Tax levy on all property for which building permits have been issued as of June 1, 2013 (which will be classified as Taxable Property for Fiscal Year 2014-15), and the resulting percentage share of the Special Tax levy borne by Taxable Property. The table also shows the ownership of the property anticipated to be classified as Undeveloped Property, and not subject to the levy of the Special Taxes, for Fiscal Year 2014-15. To the extent that additional building permits are issued before January 1, 2014, additional property will be classified as Developed Property and subject to the Special Tax levy in Fiscal Year 2014-15. Undeveloped Property within the Community Facilities District that is entitled for commercial uses is not included in the following table. Approximately 125.78 acres (including both property zoned for residential and commercial uses) are classified as Undeveloped Property in Fiscal Year 2013-14.

TABLE 10B Property Ownership by Share of Projected Special Tax Levy Fiscal Year 2014-15 2014-15 Special % Property Ownership Project Name Units Tax Levy [1] Share TAXABLE PROPERTY [2]

Residential For Sale Individual Homeowners [3] 1,193 $2,363,200 60.96% AGS Meridian LLC East End 3 6,628 0.17 Standard Pacific 15 32,193 0.83 Aldersgate Investments Vista Urbana 48 36,312 0.94 Total Residential For Sale 1,259 $2,438,333 62.90%

Residential Rental Capri/KW Serenade LLC Serenade 400 $355,552 9.17% Wolf Partners Mosaic 224 232,122 5.99 Corona Riverpark Promenade LLC The Vines [4] 80 125,373 3.23 Cabrillo Economic Development Paseo Santa Clara 140 62,689 1.62 Total Residential Rental 844 $775,736 20.01%

Commercial Property [5] SOCM I LLC [6] The Collection; Cinemark Theater 584,015 BSF $529,964 13.67% Target Target Store 145,963 BSF 132,505 3.42 Total Commercial Property 729,978 BSF $662,469 17.09%

TOTAL FISCAL YEAR 2014-15 TAXABLE PROPERTY $3,876,539 100.00%

UNDEVELOPED RESIDENTIAL PROPERTY

Wolf Partners Tempo High Density 235 $0 0.00% American Communities Sonata (affordable units for rent) 53 0 0.00 Corona Riverpark Luminaria 84 0 0.00 Corona Riverpark Westerly II 69 0 0.00 Corona Riverpark Veranda 95 0 0.00 AGS Meridian LLC East End 69 0 0.00 AGS Land Holdings I L.P. Morning View 113 0 0.00 AGS Land Holdings I L.P. Sienna 91 0 0.00 Aldersgate Investments Vista Urbana (affordable for sale) 60 0 0.00

TOTAL FISCAL YEAR 2014-15 UNDEVELOPED RESIDENTIAL 869 $0 0.00%

[1] Represents the projected Fiscal Year 2014-15 Special Tax levy to satisfy the Minimum Annual Special Tax Requirement, based on the property for which building permits have been issued as of June 1, 2013. See "SECURITY FOR THE BONDS - Rate and Method." [2] Represents property for which building permits have been issued as of June 1, 2013, which will be classified as Taxable Property for Fiscal Year 2014-15. See "SECURITY FOR THE BONDS - Rate and Method." To the extent that additional building permits are issued before January 1, 2014, additional property will be classified as Developed Property and subjected to the Special Tax levy in Fiscal Year 2014-15. The 2013 Bonds are being sized assuming no revenue from Undeveloped Property. [3] Includes 48 units in the Vista Urbana development, which are affordable units representing 0.96% of the projected Fiscal Year 2014-15 Special Tax levy. An additional 48 affordable units in Vista Urbana now owned by Aldersgate Investments are included in the projected Fiscal Year 2014-15 Special Tax levy as shown in the table above. At build out, Vista Urbana is anticipated to consist of a total of 156 affordable units. Affordable units are taxed at reduced Special Tax rates under the Rate and Method. See "SECURITY FOR THE BONDS - Rate and Method." [4] Corona Riverpark Promenade has completed 80 units in The Vines which are currently for rent but which may be sold when market conditions are more favorable. [5] Under the Rate and Method, this property is classified as Non-Residential Property and is taxed under the second step in the method of apportionment in the Rate and Method, such that no Special Tax will be levied on it once Special Taxes levied on property classified as Residential Property are sufficient to satisfy the Minimum Annual Special Tax Requirement. See “SECURITY FOR THE BONDS – Rate and Method.” [6] Includes the Cinemark Theater (representing 1.56% of the Fiscal Year 2014-15 Special Tax levy) and The Collection Shopping Center (representing 11.56% of the Fiscal Year 2014-15 Special Tax levy). Source: Dolinka Group, LLC.

SOCM

The information contained in this section has been provided by representatives of SOCM, and has not been independently confirmed or verified by either the Underwriter or the School District. Neither the Underwriter nor the School District makes any representation as to the accuracy or adequacy of this information. There may be material adverse changes in this information after the date of this Official Statement. No assurance can be given that the development of the property in the Community Facilities District will occur as currently anticipated.

SOCM I, LLC, a Delaware limited liability company (“SOCM”), is the owner of a majority of the portion of the commercial development known as “The Collection.” See “– Overall Development Plan and Development Status,” below, for description of the current development status of The Collection. SOCM has four members: RPO Retail, L.P., Riverpark CenterCal, LLC, Riverpark Collection Developer II, LLC, and Riverpark Collection Developer I, LLC. RPO Retail, L.P., is related to Oaktree Capital and owns approximately 33.3% of SOCM. Riverpark CenterCal, LLC, is a CalSTRS related entity and owns approximately 33.3% of SOCM. The remaining members, Riverpark Collection Developer II, LLC, and Riverpark Collection Developer I, LLC, which are related to Shea Properties III, LLC and Shea Properties II, LLC, respectively, collectively own approximately 33.3% of SOCM.

SOCM has contracted with Shea Properties Management Company (“Shea Properties”) and CenterCal Properties, LLC (“CenterCal Properties”) to provide development, leasing and management services for the property.

Shea Properties, headquartered in Aliso Viejo, California, is a diversified real estate company responsible for the acquisition, design, development, construction and management of business parks, shopping centers, apartment communities and mixed-use environments. Since beginning operations in 1969, annual revenues have grown steadily to more than $200 million, while the overall value of the portfolio has grown from $150 million to more than $2.25 billion. Shea Properties currently owns and operates approximately 6,000 apartment units and 6 million square feet of office, industrial and retail space in California, Colorado and Arizona. The development pipeline holds an additional 2,200 apartment units and 2.5 million square feet of commercial space. In concert with sister company, Shea Homes, the nation's largest private home builder, Shea Properties offers a range of capabilities matched by few other developers in the industry.

CenterCal Properties is a retail development company formed in 2005 by Fred Bruning and Jean Paul Wardy to continue their tradition of developing and acquiring high quality retail properties throughout the western United States. Bruning and Wardy combined have over 50 years’ experience in shopping center development and have worked together for over 12 years. CenterCal Properties is one of only five retail development joint venture partners of California State Teachers Retirement System (CALSTRS), and is one of most active retail developers in the United States. Currently, the company has over 3.5 million sq. ft. in various stages of development. CenterCal Properties seeks to continue to grow its shopping center portfolio through ground-up development and the acquisition of both core and value-added retail and mixed-use assets.

Owners of Undeveloped Property

The property in the Community Facilities District that is now classified as Undeveloped Property is not subject to the Special Tax in Fiscal Years 2013-14, and Special Tax revenues from such Undeveloped Property is not relied upon to satisfy the debt service coverage test for the issuance of the Series 2013 Bonds. See “SECURITY FOR THE BONDS – Issuance of Additional Bonds.” Such property is anticipated to become subject to the Special Tax if, and when, it is reclassified as Developed Property. See “SECURITY FOR THE BONDS – Rate and Method.”

Currently, there is approximately 125.8 acres of Undeveloped Property in the Community Facilities District that is not expected to be subject to the levy of the Special Tax in Fiscal Years 2013-14 or 2014-15. This undeveloped acreage is spread among the three Zones. Although the Series 2013 Bonds have been structured such that a Special Tax against Undeveloped Property is not expected to be required, the Rate and Method permits the Community Facilities District to levy a per-acre Special Tax against Undeveloped Property if the Assigned Annual Special Tax to be levied against Developed Property is insufficient to meet the Minimum Annual Special Tax Requirement. Under the Rate and Method, the rates at which the Special Tax is levied against Undeveloped Property vary according to whether the acreage is for residential or non-residential use, and according to the Zone in which the acreage is situated. See “SECURITY FOR THE BONDS – Rate and Method.”

The following are the owners of property in the Community Facilities District currently classified as Undeveloped Property:

Residential for Sale

• Riverpark Corona LLC currently owns 84 lots entitled for the Luminaria project (single family attached), 69 lots entitled for the Westerly II project (single family detached) and 95 lots entitled for the Veranda project (single family detached).

• AGS Land Holdings I, L.P. owns 113 lots entitled for the Morning View project (single family detached) and 91 lots entitled for the Sienna project (single family detached).

• AGS Meridian, LLC owns 72 lots in the East End project (single family attached) (although three building permits for this project had been issued as of June 1, 2013).

• Aldersgate Investments owns the remaining 101 undeveloped lots of the Vista Urbana project that are slated to be for sale affordable units, as of August 31, 2013. Vista Urbana is currently under development. None of these lots are subject to a Special Tax levy in Fiscal Year 2013-14 but at least 48 units are expected to be subject to a Special Tax levy in Fiscal Year 2014-15.

Residential for Rent

• American Communities, LLC, through an affiliate, is the current owner of the Sonata development (53 high density multifamily affordable rental units).

• Wolf Partners is the owner of the property slated for the Tempo project (235 high density multifamily for rent units).

Commercial

• RiverPark Landing, LLC, a Delaware limited liability company, is the current owner of the approximately nine acre parcel currently slated for development as The Landing, a neighborhood retail center. RiverPark Landing, LLC has one member: Shea RiverPark Commercial Developers II, LLC, and is managed by Shea Properties.

• RiverPark Pointe, LLC, a Delaware limited liability company, is the current owner of the approximately 5.2 acre parcel currently slated for development as The Pointe, a neighborhood retail center. RiverPark Pointe, LLC has one member: Shea Riverpark Commercial Developers III, LLC, and is managed by Shea Properties.

• RiverPark Myrtle, LLC, a California limited liability company, is the current owner of the 2.6 acre parcel currently slated for development as a neighborhood retail center. RiverPark Myrtle, LLC has one member: Shea Properties II, LLC, and is managed by Shea Properties.

• Riverpark Hotel II, LLC is the current owner of the approximately five acre parcel currently slated for development of a hotel (located in The Landing portion of the Development).

See “THE DEVELOPMENT – Overall Development Plan and Development Status” for additional information about these developments.

No Information Concerning Other Property Owners

Other than SOCM, no other person or entity is the owner of property responsible for at least 10% of the Special Tax levy in Fiscal Years 2013-14 or 2014-15, as indicated in Tables 10A and 10B, above. Accordingly, no information about any such other property owners has been presented in this Official Statement.

SERIES 2013 BOND OWNERS' RISKS

The purchase of the Series 2013 Bonds described in this Official Statement involves a degree of risk that may not be appropriate for some investors. The following includes a discussion of some of the risks which should be considered before making an investment decision. This discussion does not purport to be comprehensive or definitive and does not purport to be a complete statement of all factors which may be considered as risks in evaluating the credit quality of the Series 2013 Bonds.

Limited Obligation of the Community Facilities District to Pay Debt Service

The Community Facilities District has no obligation to pay principal of and interest on the Series 2013 Bonds if Special Tax collections are delinquent or insufficient, other than from amounts, if any, on deposit in the Bond Reserve Fund or funds derived from the tax sale or foreclosure and sale of parcels for Special Tax delinquencies. Neither the School District nor the Community Facilities District is obligated to advance funds to pay debt service on the Series 2013 Bonds.

Levy and Collection of the Special Tax

General. The principal source of payment of principal of and interest on the Series 2013 Bonds is the proceeds of the annual levy and collection of the Special Tax against property within the Community Facilities District.

Limitation on Maximum Special Tax Rate. The annual levy of the Special Tax is subject to the maximum annual Special Tax rate authorized in the Rate and Method. The levy cannot be made at a higher rate even if the failure to do so means that the estimated proceeds of the levy and collection of the Special Tax, together with other available funds, will not be sufficient to pay debt service on the Bonds. Generally, the Community Facilities District levies Special Taxes at the Assigned Special Tax rate on Developed Property in the Community Facilities District. In the event that delinquencies occur in the receipt of Special Taxes within the Community Facilities District in any fiscal year, the Community Facilities District may increase the Special Tax levy up to the maximum rates as permitted in the Rate and Method in the following fiscal years if determined necessary to cure any delinquencies on the Series 2013 Bonds. There may be little or no difference between the Assigned Special Tax rate and the maximum rates where the property within the Community Facilities District is all categorized as Developed Property. In the event the Community Facilities District was to levy Special Taxes on Developed Property in the Community Facilities District at less than the Assigned Annual Special Tax, pursuant to Section 53321(d) of the Act and a resolution of the Community Facilities District, under no circumstances will the special tax levied against any parcel used for private residential purposes be increased by more than 10% as a consequence of delinquency or default by the owner of any other parcel or parcels of land within the Community Facilities District.

No Relationship Between Property Value and Special Tax Levy. Because the Special Tax formula set forth in the Rate and Method is not based on property value, the levy of the Special Tax will rarely, if ever, result in a uniform relationship between the value of particular parcels of Taxable Property and the amount of the levy of the Special Tax against those parcels. Thus, there will rarely, if ever, be a uniform relationship between the value of the parcels of Taxable Property and their proportionate share of debt service on the Bonds, and certainly not a direct relationship.

Factors that Could Lead to Special Tax Deficiencies. The following are some of the factors that might cause the levy of the Special Tax on any particular parcel of Taxable Property to vary from the Special Tax that might otherwise be expected:

Transfers to Governmental Entities. The number of parcels of Taxable Property could be reduced through the acquisition of an interest in Taxable Property by a governmental entity and failure of the government to pay the Special Tax based upon a claim of exemption or, in the case of the federal government or an agency thereof or sponsored thereby, immunity from taxation, thereby resulting in an increased tax burden on the remaining taxed parcels. Such entities and agencies include the Federal Deposit Insurance Corporation (the "FDIC") the Federal National Mortgage Association ("Fannie Mae"), the Federal Home Loan Mortgage Corporation ("Freddie Mac"), the Drug Enforcement Agency, the Internal Revenue Service or other similar federal governmental agencies. The FDIC could obtain such an interest by taking over a financial institution which has made a loan which is secured by property within the Community Facilities District, and Fannie Mae or Freddie Mac could obtain such an interest by acquiring a mortgage secured by property within the Community Facilities District. See " — Exempt Properties — Property Owned by FDIC" below.

Property Tax Delinquencies. Failure of the owners of Taxable Property to pay the Special Tax, or delays in the collection of or inability to collect the Special Tax by tax sale or foreclosure and sale of the delinquent parcels, could result in a deficiency in the collection of Special Tax revenues. For a summary of Special Tax collections in the Community Facilities District for the prior Fiscal Year, see “THE COMMUNITY FACILITIES DISTRICT – Special Tax Collection and Delinquency Rates.” Sustained or increased delinquencies in the payment of the Special Taxes could cause a draw on the Bond Reserve Fund established for the Bonds and perhaps, ultimately, a default in the payment on the Bonds.

Other Laws. Other laws generally affecting creditors' rights or relating to judicial foreclosure may affect the ability to enforce payment of Special Taxes or the timing of enforcement of Special Taxes. For example, the Soldiers and Sailors Civil Relief Act of 1940 affords protections such as a stay in enforcement of the foreclosure covenant, a six-month period after termination of such military service to redeem property sold to enforce the collection of a tax or assessment and a limitation on the interest rate on the delinquent tax or assessment to persons in military service if the court concludes the ability to pay such taxes or assessments is materially affected by reason of such service.

Delays Following Special Tax Delinquencies and Foreclosure Sales. The Fiscal Agent Agreement generally provides that the Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described in “SECURITY FOR THE BONDS – Foreclosure of Delinquent Parcels” and in the Act, is subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ordinary ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the County.

If sales or foreclosures of property are necessary, there could be a delay in payments to owners of the Bonds pending such sales or the prosecution of foreclosure proceedings and

receipt by the Community Facilities District of the proceeds of sale if the Bond Reserve Fund is depleted. See “SECURITY FOR THE BONDS – Foreclosure of Delinquent Parcels.”

Risks Related to Declines in Property Values

Declines in property values in the Community Facilities District could result in property owner unwillingness or inability to pay mortgage or other loan payments, as well as ad valorem property taxes and Special Taxes, when due. Under such circumstances, bankruptcies could occur. Bankruptcy by property owners with delinquent Special Taxes would delay the commencement and completion of foreclosure proceedings to collect delinquent Special Taxes.

Limited Number of Taxable Parcels; Concentration of Ownership

Numerous or continuing delinquencies by the owners of Taxable Property in the Community Facilities District in the payment of property taxes (and, consequently, the Special Taxes, which are collected on the ordinary property tax bills) when due could result in a deficiency in Special Tax revenues necessary to pay debt service on the Series 2013 Bonds, which could in turn result in the depletion of the Bond Reserve Fund, prior to reimbursement from the resale of foreclosed property or payment of the delinquent Special Tax. In that event, there could be a delay or failure in payments of the principal of and interest on the Series 2013 Bonds. See “SECURITY FOR THE BONDS – Reserve Fund,” and “THE COMMUNITY FACILITIES DISTRICT – Potential Consequences of Special Tax Delinquencies.”

As shown in Table 10A, above, certain developers continue to own a substantial amount of taxable property the Community Facilities District and will be responsible for the Special Taxes levied against such property until the property is developed and sold. For the 2013-14 Special Tax levy, approximately 27% of the Special Tax levy is secured by properties not occupied by end users (tenants or homeowners). To the extent a developer retains ownership of retail, commercial or for-rent residential property, the developer will remain responsible for the Special Taxes for so long as such developer owns the property. The failure by one or more of these developers to pay installments of the Special Tax when due could result in an insufficiency of Special Tax proceeds to meet debt service obligations of the Series 2013 Bonds and the depletion of the Bond Reserve Fund prior to receipt of proceeds from the sale of foreclosed property or payment of the delinquent Special Tax. In that event, there could be a delay or failure in payments of the principal of and interest on the Series 2013 Bonds.

Payment of Special Tax is not a Personal Obligation of the Property Owners

An owner of Taxable Property is not personally obligated to pay the Special Taxes. Rather, the Special Taxes are an obligation running only against the parcels of Taxable Property. If, after a default in the payment of the Special Tax and a foreclosure sale by the Community Facilities District, the resulting proceeds are insufficient, taking into account other obligations also constituting a lien against the affected parcels of Taxable Property, the Community Facilities District has no recourse against the owner.

Appraised Values

The Appraisal summarized in APPENDIX C estimates the market value of the Taxable Property within the Community Facilities District. This market value is merely the opinion of the Appraiser as of the date of value set forth in the Appraisal, and is subject to the assumptions and limiting conditions stated in the Appraisal. The Community Facilities District has not sought

an updated opinion of value by the Appraiser subsequent to the date of value of the Appraisal, or an opinion of the value of the Taxable Property by any other appraiser. A different opinion of value might be rendered by a different appraiser.

The opinion of value assumes a sale by a willing seller to a willing buyer, each having similar information and neither being forced by other circumstances to sell or to buy. Consequently, the opinion is of limited use in predicting the selling price at a foreclosure sale, because the sale is forced and the buyer may not have the benefit of full information.

In addition, the opinion is based upon the facts and circumstances at the date of value of the Appraisal. Differing facts and circumstances may lead to differing opinions of value. The appraised value is not evidence of future value because future facts and circumstances may differ significantly from such date of value.

No assurance can be given that any of the Taxable Property in the Community Facilities District could be sold for the estimated market value contained in the Appraisal if that property should become delinquent in the payment of Special Taxes and be foreclosed upon.

Property Values

The value of Taxable Property within the Community Facilities District is a critical factor in determining the investment quality of the Series 2013 Bonds. If a property owner defaults in the payment of the Special Tax, the Community Facilities District’s only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Special Tax. Land values could be adversely affected by economic and other factors beyond the Community Facilities District’s control, such as a general economic downturn, relocation of employers out of the area, shortages of water, electricity, natural gas or other utilities, destruction of property caused by earthquake, flood, landslides, wildfires, or other natural disasters, environmental pollution or contamination, or unfavorable economic conditions.

The following is a discussion of specific risk factors that could affect the value of property in the Community Facilities District.

Risks Related to Availability of Mortgage Loans. Recent events in the United States and worldwide capital markets have adversely affected the availability of mortgage loans to buyers of real property, including potential buyers of homes and commercial property within the Community Facilities District. Any such unavailability could hinder the ability of the current property owners to resell their property, or the sale of newly completed residential and commercial development in the future.

Natural Disasters. The value of the Taxable Property in the future can be adversely affected by a variety of natural occurrences, particularly those that may affect infrastructure and other public improvements and private improvements on the Taxable Property and the continued habitability and enjoyment of such private improvements. The areas in and surrounding the Community Facilities District, like those in much of California, may be subject to unpredictable seismic activity, including earthquakes and landslides. See “THE DEVELOPMENT – Environmental Conditions.”

In addition, the Community Facilities District is bordered by the Santa Clara River to the north, which could be subject to flooding. FEMA has recently declared that the County-owned levee does not meet post-Katrina federal levee standards and has decertified the levee.

Although the decertification is not indicative of an increase in inherent flood risk, it could trigger additional flood control work to permit the continued construction of structures in the Community Facilities District and could trigger flood insurance mandates. See “THE DEVELOPMENT – Environmental Condition – FEMA Flood Control Decertification.”

Apart from earthquakes, floods and landslides, other natural disasters could include, without limitation, wildfires, droughts or tornadoes. One or more natural disasters could occur and could result in damage to improvements of varying seriousness. The damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost, or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances there could be significant delinquencies in the payment of Special Taxes, and the value of the Taxable Property may well depreciate or disappear.

Legal Requirements. Other events that may affect the value of Taxable Property include changes in the law or application of the law. Such changes may include, without limitation, local growth control initiatives, local utility connection moratoriums and local application of statewide tax and governmental spending limitation measures.

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

The appraised values set forth in this Official Statement do not take into account the possible reduction in marketability and value of any of the Taxable Property by reason of the possible liability of the owner or operator for the remedy of a hazardous substance condition of the parcel. Although the Community Facilities District and Riverpark Legacy are not aware that the owner or operator of any of the Taxable Property has such a current liability with respect to any of the Taxable Property, it is possible that such liabilities do currently exist and that the Community Facilities District and Riverpark Legacy are not aware of them.

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

See “THE DEVELOPMENT – Environmental Conditions.”

Other Possible Claims Upon the Value of Taxable Property

While the Special Taxes are secured by the Taxable Property, the security only extends to the value of such Taxable Property that is not subject to priority and parity liens and similar claims.

The table in the section entitled “THE COMMUNITY FACILITIES DISTRICT – Direct and Overlapping Governmental Obligations” shows the presently outstanding amount of governmental obligations (with stated exclusions), the tax or assessment for which is or may become an obligation of one or more of the parcels of Taxable Property. The table also states the additional amount of general obligation bonds the tax for which, if and when issued, may become an obligation of one or more of the parcels of Taxable Property. The table does not specifically identify which of the governmental obligations are secured by liens on one or more of the parcels of Taxable Property.

In addition, other governmental obligations may be authorized and undertaken or issued in the future, the tax, assessment or charge for which may become an obligation of one or more of the parcels of Taxable Property and may be secured by a lien on a parity with the lien of the Special Tax securing the Series 2013 Bonds. See “SECURITY FOR THE BONDS – Bonding Capacity” and “– Issuance of Additional Bonds.”

In general, as long as the Special Tax is collected on the County tax roll, the Special Tax and all other taxes, assessments and charges also collected on the tax roll are on a parity, that is, are of equal priority. Questions of priority become significant when collection of one or more of the taxes, assessments or charges is sought by some other procedure, such as foreclosure and sale. In the event of proceedings to foreclose for delinquency of Special Taxes securing the Series 2013 Bonds, the Special Tax will be subordinate only to existing prior governmental liens, if any. Otherwise, in the event of such foreclosure proceedings, the Special Taxes will generally be on a parity with the other taxes, assessments and charges, and will share the proceeds of such foreclosure proceedings on a pro-rata basis. Although the Special Taxes will generally have priority over non-governmental liens on a parcel of Taxable Property, regardless of whether the non-governmental liens were in existence at the time of the levy of the Special Tax or not, this result may not apply in the case of bankruptcy. See “– Bankruptcy Delays” below.

Exempt Properties

Exemptions Under Rate and Method and the Act. Certain properties are exempt from the Special Tax in accordance with the Rate and Method and the Act, which provides that properties or entities of the state, federal or local government are exempt from the Special Tax; provided, however, that property within the Community Facilities District acquired by a public entity through a negotiated transaction or by gift or devise, which is not otherwise exempt from the Special Tax, will continue to be subject to the Special Tax. See “SECURITY FOR THE BONDS – Rate and Method.”

In addition, although the Act provides that if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment, the constitutionality and operation of these provisions of the Act have not been tested, meaning that such property could become exempt from the Special Tax. The Act further provides that no

other properties or entities are exempt from the Special Tax unless the properties or entities are expressly exempted in a resolution of consideration to levy a new special tax or to alter the rate or method of apportionment of an existing special tax.

Property Owned by FDIC. The ability of the Community Facilities District to collect interest and penalties specified by State law and to foreclose the lien of a delinquent Special Tax installment may be limited in certain respects with regard to property in which the Federal Deposit Insurance Corporation (the "FDIC") has or obtains an interest. The FDIC has asserted a sovereign immunity defense to the payment of special taxes and assessments. The Community Facilities District is unable to predict what effect this assertion would have in the event of a delinquency on a parcel within the Community Facilities District in which the FDIC has or obtains an interest.

In addition, although the FDIC does not claim immunity from ad valorem property taxation, it requires a foreclosing entity to obtain FDIC's consent to foreclosure proceedings. Prohibiting a foreclosure on property owned by the FDIC could reduce the amount available to pay the principal of and interest on the Bonds. Either outcome would cause a draw on the Bond Reserve Fund established for the Bonds and perhaps, ultimately, a default in the payment on the Bonds.

Property Owned by Fannie Mae or Freddie Mac. If a parcel of taxable property is owned by a federal government entity or federal government-sponsored entity, such as Fannie Mae or Freddie Mac, or a private deed of trust secured by a parcel of taxable property is 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 courts have held that, based on the supremacy clause of the United States Constitution, in the absence of Congressional intent to the contrary, a state or local agency cannot foreclose to collect delinquent taxes or assessments if foreclosure would impair the federal government interest. This means that, unless Congress has otherwise provided, if a federal government entity owns a parcel of taxable property but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.

Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the Community Facilities District wishes to foreclose on the parcel as a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government's mortgage interest.

No investigation has been made as to whether any governmental entity or government- sponsored entity currently owns or has an interest in any property in the Community Facilities District.

Future Property Development

Continuing development of the undeveloped parcels in the Community Facilities District may be adversely affected by changes in general or local economic conditions, fluctuations in or a deterioration of the real estate market, increased construction costs, development, financing and marketing capabilities of property owners, water or electricity shortages, discovery on the

undeveloped property of any plants or animals in their habitat that have been listed as endangered species, and other similar factors. Development in the Community Facilities District may also be affected by development in surrounding areas, which may compete with the Community Facilities District. As described in ‘THE DEVELOPMENT – Development Requirements,” additional infrastructure improvements are required to develop all undeveloped parcels in the Community Facilities District.

In addition, partially developed land is less valuable than developed land and provides less security for the Bonds (and therefore to the owners of the Bonds) should it be necessary for the Community Facilities District to foreclose on undeveloped property due to the nonpayment of Special Taxes. Moreover, failure to complete future development on a timely basis could adversely affect the land values of those parcels which have been completed. Lower land values result in less security for the payment of principal of and interest on the Bonds and lower proceeds from any foreclosure sale necessitated by delinquencies in the payment of Special Taxes.

Depletion of Bond Reserve Fund

The Reserve Fund is to be maintained at an amount equal to the Bond Reserve Requirement. See “SECURITY FOR THE BONDS – Bond Reserve Fund.” The Bond Reserve Fund will be used to pay principal of and interest on the Bonds if insufficient funds are available from the proceeds of the levy and collection of the Special Tax against property within the Community Facilities District. If the Reserve Fund is depleted, it can be replenished from the proceeds of the levy and collection of the Special Taxes that exceed the amounts to be paid to the Bondowners under the Fiscal Agent Agreement. However, because the Special Tax levy is limited to the maximum annual Special Tax rates, it is possible that no replenishment would be possible if the Special Tax proceeds, together with other available funds, remain insufficient to pay all such amounts. Thus it is possible that the Bond Reserve Fund will be depleted and not be replenished by the levy and collection of the Special Taxes.

Bankruptcy Delays

The payment of the Special Tax and the ability of the Community Facilities District to foreclose the lien of a delinquent unpaid Special Tax, as discussed in “SECURITY FOR THE BONDS,” may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State of California relating to judicial foreclosure. The various legal opinions to be delivered concurrently with the delivery of the Series 2013 Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases.

Although bankruptcy proceedings would not cause the Special Taxes to become extinguished, bankruptcy of a property owner or any other person claiming an interest in the property could result in a delay in superior court foreclosure proceedings and could result in the possibility of Special Tax installments not being paid in part or in full. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Series 2013 Bonds.

In addition, the amount of any lien on property securing the payment of delinquent Special Taxes could be reduced if the value of the property were determined by the bankruptcy

court to have become less than the amount of the lien, and the amount of the delinquent Special Taxes in excess of the reduced lien could then be treated as an unsecured claim by the court. Any such stay of the enforcement of the lien for the Special Tax, or any such delay or nonpayment, would increase the likelihood of a delay or default in payment of the principal of and interest on the Series 2013 Bonds and the possibility of delinquent Special Taxes not being paid in full.

Disclosure to Future Purchasers

The Community Facilities District has recorded a notice of the Special Tax lien in the Office of the County Recorder. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such special tax obligation in the purchase of a parcel of land or a home in the Community Facilities District or the lending of money secured by property in the Community Facilities District. The Act and the Goals and Policies require the subdivider of a subdivision (or its agent or representative) to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section 1102.6b requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with these requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax when due.

No Acceleration Provisions

The Series 2013 Bonds do not contain a provision allowing for their acceleration in the event of a payment default or other default under the terms of the Series 2013 Bonds or the Fiscal Agent Agreement. Under the Fiscal Agent Agreement, a Bondholder is given the right for the equal benefit and protection of all Bondowners similarly situated to pursue certain remedies. See “APPENDIX F – Summary of Certain Provisions of the Fiscal Agent Agreement.” So long as the Series 2013 Bonds are in book-entry form, DTC will be the sole Bondholder and will be entitled to exercise all rights and remedies of Bondholders.

Loss of Tax Exemption

As discussed under the caption “LEGAL MATTERS – Tax Exemption,” interest on the Series 2013 Bonds might become includable in gross income for purposes of federal income taxation retroactive to the date the Series 2013 Bonds were issued as a result of future acts or omissions of the Community Facilities District in violation of its covenants in the Fiscal Agent Agreement. The Fiscal Agent Agreement does not contain a special redemption feature triggered by the occurrence of an event of taxability. As a result, if interest on the Series 2013 Bonds were to become includable in gross income for purposes of federal income taxation, the Series 2013 Bonds would continue to remain outstanding until maturity unless earlier redeemed pursuant to optional or mandatory redemption or redemption upon prepayment of the Special Taxes. See “THE SERIES 2013 BONDS – Redemption.”

IRS Audit of Tax-Exempt Bond Issues

The Internal Revenue Service (the "IRS") has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Series 2013 Bonds will be selected for audit by the IRS. It is also possible that the market value of such Series 2013 Bonds might be affected as a result of such an audit of such Series 2013 Bonds (or by an audit of similar bonds or securities).

Legislative Proposals, Clarifications of the Code and Court Decisions on Tax Exemption

Future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Series 2013 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Bondowners from realizing the full current benefit of the tax status of such interest.

For example, various proposals have been made in Congress and by the President which, if enacted, would subject interest on bonds that is otherwise excludable from gross income for federal income tax purposes, including interest on the Series 2013 Bonds, to a tax payable by certain bondholders that are individuals, estates or trusts with adjusted gross income in excess of certain specified thresholds.

The introduction or enactment of any such legislative proposals, clarification of the Code or court decisions may also affect the market price for, or marketability of, the Series 2013 Bonds. Prospective purchasers of the Series 2013 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation.

Voter Initiatives

Under the California Constitution, the power of initiative is reserved to the voters for the purpose of enacting statutes and constitutional amendments. Since 1978, the voters have exercised this power through the adoption of Proposition 13 and similar measures, including Proposition 218, which was approved in the general election held on November 5, 1996, and Proposition 26, which was approved on November 2, 2010.

Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies such as the Community Facilities District. Subject to overriding federal constitutional principles, such collection may be materially and adversely affected by voter- approved initiatives, possibly to the extent of creating cash-flow problems in the payment of outstanding obligations such as the Bonds.

Proposition 218—Voter Approval for Local Government Taxes—Limitation on Fees, Assessments, and Charges—Initiative Constitutional Amendment, added Articles XIIIC and XIIID to the California Constitution, imposing certain vote requirements and other limitations on the imposition of new or increased taxes, assessments and property-related fees and charges.

On November 2, 2010, California voters approved Proposition 26, entitled the “Supermajority Vote to Pass New Taxes and Fees Act”. Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as

defined in Proposition 26) without a two-thirds vote of the Legislature. Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes require a majority vote and taxes for specific purposes (“special taxes”) require a two-thirds vote.

The Special Taxes and the Series 2013 Bonds were each authorized by not less than a two-thirds vote of the landowners within the Community Facilities District who constituted the qualified electors at the time of such voted authorization. The Community Facilities District believes, therefore, that issuance of the Series 2013 Bonds does not require the conduct of further proceedings under the Act, Proposition 218 or Proposition 26.

Like their antecedents, Proposition 218 and Proposition 26 are likely to undergo both judicial and legislative scrutiny before the impact on the Community Facilities District and its obligations can be determined. Certain provisions of Proposition 218 and Proposition 26 may be examined by the courts for their constitutionality under both State and federal constitutional law, the outcome of which cannot be predicted.

Secondary Market for Bonds

There can be no guarantee that there will be a secondary market for the Series 2013 Bonds or, if a secondary market exists, that any Series 2013 Bonds can be sold for any particular price. Prices of bond issues for which a market is being made will depend upon then- prevailing circumstances. Such prices could be substantially different from the original purchase price.

No assurance can be given that the market price for the Series 2013 Bonds will not be affected by the introduction or enactment of any future legislation (including without limitation amendments to the Internal Revenue Code), or changes in interpretation of the Internal Revenue Code, or any action of the Internal Revenue Service, including but not limited to the publication of proposed or final regulations, the issuance of rulings, the selection of the Series 2013 Bonds for audit examination, or the course or result of any Internal Revenue Service audit or examination of the Series 2013 Bonds or obligations that present similar tax issues as the Series 2013 Bonds.

LEGAL MATTERS

Legal Opinions

The proceedings in connection with the issuance of the Series 2013 Bonds are subject to the approval as to their legality by Kronick, Moskovitz, Tiedemann & Girard, a Professional Corporation, Sacramento, California, Bond Counsel. A copy of the proposed form of Bond Counsel opinion approving the validity of the Series 2013 Bonds will be made available to purchasers at the time of original delivery and is attached as APPENDIX I to this Official Statement. Certain legal matters will be passed upon for the School District and the Community Facilities District by Kronick, Moskovitz, Tiedemann & Girard, a Professional Corporation, Sacramento, California. Certain legal matters will be passed upon for the Underwriter by McFarlin & Anderson LLP, Laguna Hills, California. Jones Hall, A Professional Law Corporation, San Francisco, California, is serving as Disclosure Counsel to the School District. Payment of the fees of Bond Counsel, Disclosure Counsel and counsel to the Underwriter is contingent upon the issuance and delivery of the Series 2013 Bonds.

Tax Exemption

In the opinion of Kronick, Moskovitz, Tiedemann & Girard, a Professional Corporation, Sacramento, California, Bond Counsel, based upon the analysis of existing statutes, regulations, ruling and court decisions, and assuming, among other things, the accuracy of certain representations and compliance with certain covenants, interest on the Series 2013 Bonds is excludable from gross income for federal income tax purposes and is exempt from State of California personal income taxes. Bond Counsel is also of the opinion that interest on the Series 2013 Bonds is not an item of tax preference for purposes of the alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account when determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. A complete copy of the proposed form of Opinion of Bond Counsel is attached as APPENDIX I.

The Internal Revenue Code of 1986, as amended, (the “Code”) imposes various restrictions, conditions, and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Series 2013 Bonds. The School District has covenanted to comply with certain restrictions designed to assure that interest on the Series 2013 Bonds will not be included in federal gross income. Failure to comply with these covenants may result in interest on the Series 2013 Bonds being included in federal gross income, possibly from the date of issuance of the Series 2013 Bonds. The opinion of Bond Counsel assumes compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after that date of issuance of the Series 2013 Bonds may adversely affect the tax status of interest on the Series 2013 Bonds. Prospective Bondholders are urged to consult their own tax advisors with respect to proposals to restructure the federal income tax.

Although Bond Counsel expects to render an opinion that interest on the Series 2013 Bonds is excludable from gross income for federal income tax purposes and exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of interest on, the Series 2013 Bonds may otherwise affect the owner’s federal or state tax liability. The nature and extent of these other tax consequences will depend upon the owner’s particular tax status or the owner’s other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences.

In addition, no assurance can be given that any future legislation, including amendments to the Code, if enacted into law, or changes in interpretation of the Code, will not cause interest on the Series 2013 Bonds to be subject, directly or indirectly, to federal and/or state income taxation, or otherwise prevent beneficial owners of the Series 2013 Bonds from realizing the full current benefit of the tax status of such interest. Recently, proposed legislative changes have been introduced in Congress that, if enacted, could result in additional federal income or state tax being imposed on owners of tax-exempt state or local obligations, such as the Series 2013 Bonds. Prospective purchasers of the Series 2013 Bonds should consult their own tax advisers regarding any pending or proposed federal and/or state tax legislation. Further, no assurance can be given that the introduction or enactment of any such future legislation, or any action of the Internal Revenue Service (“IRS”), including but not limited to regulation, ruling, or selection of the Series 2013 Bonds for audit examination, or the course or result of any IRS examination of the Series 2013 Bonds, or obligations that present similar tax issues, will not affect the market price or liquidity of the Series 2013 Bonds.

The rights of the owners of the Series 2013 Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditor’s rights heretofore or hereafter enacted to the extent constitutionally applicable, and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases.

The IRS has initiated an expanded program for the auditing of tax exempt bond issues, including both random and target audits. It is possible that the Series 2013 Bonds will be selected for audit by the IRS. It is also possible that the market value of the Series 2013 Bonds might be affected as a result of such an audit of the Series 2013 Bonds (or by an audit of similar bonds).

No Material Litigation

Absence of Material Litigation. At the time of delivery of the Series 2013 Bonds, the School District will certify that there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending with respect to which the School District has been served with process or threatened, which:

• in any way questions the powers of the Board or the School District, or

• in any way questions the validity of any proceeding taken by the Board in connection with the issuance of the Series 2013 Bonds, or

• wherein an unfavorable decision, ruling or finding could materially adversely affect the transactions contemplated by the purchase agreement with respect to the Series 2013 Bonds, or

• which, in any way, could adversely affect the validity or enforceability of the resolutions of the Board adopted in connection with the formation of the Community Facilities District or the issuance of the Series 2013 Bonds, the Fiscal Agent Agreement, the Continuing Disclosure Certificate or the purchase agreement with respect to the Series 2013 Bonds, or

• to the knowledge of the School District, which in any way questions the exclusion from gross income of the recipients thereof of the interest on the Series 2013 Bonds for federal income tax purposes, or

• in any other way questions the status of the Series 2013 Bonds under State tax laws or regulations.

Other Litigation. The School District is a party to litigation arising from a breach of contract claim with regard to an elementary school construction project, which resulted in a trial court judgment against the School District of approximately $9.4 million. (The school in question is outside the boundaries of the Community Facilities District and not one of the schools being financed by the Community Facilities District.) The School District filed an appeal from the judgment, which is currently pending. If determined adversely to the School District, any ultimate liability of the School District with respect to this claim would not be payable from the Special Taxes or the proceeds of the 2013 Bonds.

NO RATINGS

The School District has not made, and does not contemplate making, any application to a rating agency for a rating on the Series 2013 Bonds. No such rating should be assumed from any credit rating that the School District may obtain for other purposes. Prospective purchasers of the Series 2013 Bonds are required to make independent determinations as to the credit quality of the Series 2013 Bonds and their appropriateness as an investment.

CONTINUING DISCLOSURE

The School District. The School District will covenant for the benefit of owners of the Series 2013 Bonds to provide certain financial information and operating data relating to the Community Facilities District and the Series 2013 Bonds each fiscal year (the “Annual Report”) and to provide notices of the occurrence of certain listed events. The timing of and the specific nature of the information to be contained in the Annual Report and the notices of listed events is set forth in APPENDIX H. These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5) (the “Rule”).

In July 2011, the School District filed certain significant event notices, relating to the November 8, 2010, Chapter 11 bankruptcy filing by Ambac Financial Group (insuring bonds as Ambac Assurance Corp.). Apart from the foregoing late filings, the School District has not failed to comply, in any material respect, with an undertaking under the Rule in the last five years.

UNDERWRITING

The Series 2013 Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) at a purchase price of $27,690,267.30 (which represents the aggregate principal amount of the Series 2013 Bonds ($28,000,000), less a net original issue discount of $29,732.70, less an underwriter's discount of $280,000).

The Bond Purchase Agreement provides that the Underwriter will purchase all of the Series 2013 Bonds, if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the Bond Purchase Agreement.

The Underwriter may offer and sell Series 2013 Bonds to certain dealers and others at prices lower than the offering price stated on the cover page hereof. The offering prices may be changed from time to time by the Underwriter.

PROFESSIONAL FEES

In connection with the issuance of the Series 2013 Bonds, fees payable to certain professionals are contingent upon the issuance and delivery of the Series 2013 Bonds. Those professionals include:

• the Underwriter;

• Kronick, Moskovitz, Tiedemann & Girard, a Professional Corporation, as Bond Counsel;

• Jones Hall, A Professional Law Corporation, as Disclosure Counsel;

• Dolinka Group, LLC, as special tax consultant; and

• Zions First National Bank, as Fiscal Agent.

EXECUTION

The execution and delivery of the Official Statement have been duly authorized by the School District on behalf of the Community Facilities District.

RIO ELEMENTARY SCHOOL DISTRICT

By: /s/ Paul Disario Paul Disario, Ed.D, Interim Assistant Superintendent, Business Services, Rio Elementary School District, on behalf of Rio Elementary School District Community Facilities District No. 1

APPENDIX A

ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY OF OXNARD AND THE COUNTY OF VENTURA

The following information concerning the City of Oxnard (the "City") and the County of Ventura (the “County”) are included only for the purpose of supplying general information regarding the community. The Series 2013 Bonds are not a debt of the City, the County, the State or any of its political subdivisions, and neither the City, the County, the State nor any of its political subdivisions is liable therefor.

General

The Rio Elementary School District is located in the County and serves the City of Oxnard, the unincorporated community of El Rio, and the RiverPark development.

City of Oxnard. The City of Oxnard is located along the coast of Southern California. It is the most populous city in the County and the 19th most populous city in the State. The City lies approximately 35 miles west of the Los Angeles city limits and is part of the larger Greater Los Angeles area. The City was incorporated as a California city in 1903. The city has a total area of 39 square miles; 27 square miles of it is land and 12 square miles of it is water.

The City is located on the Oxnard Plain, which is considered one of the most fertile soil areas in the world due to its Group I soils and favorable climate. In approximately the mid-19th Century, pioneers began settling the area and farming barley and lima beans. Henry T. Oxnard operated a successful sugar beet factory, which operated from 1899 until 1959. In present day, the Oxnard Plain is well known for its strawberries. The City is considered one of the State's largest strawberry producers, supplying about one third of the State's annual strawberry volume. The City hosts the annual California Strawberry Festival.

The economy of the City is driven by international trade, agriculture, manufacturing, finance, transportation, and petroleum energy. The City is one of the key manufacturing centers in the Greater Los Angeles area, and its Port of Hueneme is the busiest and only deep-harbor commercial port between Los Angeles and San Francisco and is vital to trade with the Pacific Rim economies. The Oxnard Oil Field and the West Montalvo Oil field are two large active oil fields that underlie the City and adjacent areas.

The Interstate 101 is the major highway running through the City, connecting Ventura and Santa Barbara to the northwest, and Los Angeles to the southeast. The Pacific Coast Highway (State Route 1) heads down the coast south to Malibu. The City is also served by Amtrak, Union Pacific, Metrolink, and Greyhound trains and buses. The City also has a small regional airport called Oxnard Airport.

County of Ventura. The County is located in the southern part of California. It is located on Pacific coast and is part of the Greater Los Angeles Area. The County has a total of 2,208 square miles, of which 1,845 square miles is land and 363 square miles is water. Most of the population of Ventura County lives in the southern (mainland) portion of the county. The major population centers are the Oxnard Plain and the Simi and Conejo Valleys.

A-1

Population

Population figures for the City, the County and the State for the last five years are shown in the following table.

CITY OF OXNARD AND VENTURA COUNTY Population Estimates Calendar Years 2008 through 2012

Calendar City of County State of Year Oxnard Ventura California 2009 194,764 815,284 36,966,713 2010 197,563 822,108 37,223,900 2011 199,265 827,874 37,427,946 2012 199,446 829,065 37,668,804 2013 200,855 835,436 37,966,471

Source: State Department of Finance estimates (as of January 1, 2013

Employment and Industry

The School District is included in the Oxnard-Thousand Oaks-Ventura Metropolitan Statistical Area (“MSA”), which includes all of Ventura County. The unemployment rate in Ventura County was 6.6% in May 2013, down from a revised 6.9% in April 2013, but below the year-ago estimate of 8.6%. This compares with an unadjusted unemployment rate of 8.1% for California and 7.3% for the nation during the same period.

A-2

Set forth below is data from calendar years 2008 to 2012 reflecting the County’s civilian labor force, employment and unemployment. These figures are county-wide statistics and may not necessarily accurately reflect employment trends in the School District.

OXNARD-THOUSAND OAKS-VENTURA METROPOLITAN STATISTICAL AREA (Ventura County) Civilian Labor Force, Employment and Unemployment (Annual Averages - December)

2008 2009 2010 2011 2012 Civilian Labor Force (1) 432,800 428,400 436,200 439,100 440,800 Employment 399,200 382,800 390,300 397,300 402,900 Unemployment 33,600 45,600 45,900 41,800 37,900 Unemployment Rate 7.8% 10.6% 10.5% 9.5% 8.6% Wage and Salary Employment: (2) Agriculture 22,000 19,500 21,100 22,500 24,600 Mining and Logging 1,300 1,200 1,300 1,300 1,200 Construction 15,400 11,900 11,100 11,300 12,200 Manufacturing 35,300 31,100 31,100 30,200 29,600 Wholesale Trade 12,800 11,800 12,200 12,300 12,700 Retail Trade 38,700 37,500 38,300 39,300 39,000 Transportation, Warehousing and Utilities 5,600 5,500 5,500 5,800 5,800 Information 5,400 5,300 5,000 4,900 4,900 Financial Activities 20,500 20,500 20,800 19,800 18,700 Professional and Business Services 37,800 34,700 34,000 34,000 35,000 Educational and Health Services 32,800 33,100 33,600 35,000 36,100 Leisure and Hospitality 30,600 29,800 30,500 31,800 34,000 Other Services 9,500 9,300 9,100 9,400 9,400 Federal Government 7,400 7,400 7,500 7,100 7,200 State Government 2,700 2,500 2,800 2,700 2,800 Local Government 33,700 33,200 35,200 34,500 34,600 Total All Industries(3) 311,500 294,300 299,100 301,900 307,800

(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (3) Totals may not add due to rounding. Source: State of California Employment Development Department.

A-3

The following table lists the major employers within the City in 2013:

CITY OF OXNARD Major Employers, 2013 (Ranked by Number of Employees)

Approximate Employer Name Number of Employees St. John's Regional Medical Center 1,393 City of Oxnard 1,000 Haas Automation, Inc. 900 Verizon 860 Waterway Plastics, Inc. 700 Procter & Gamble Paper Products 650 Boskovich Farms, Inc. 600 Sysco Food Services of Ventura 500 Workrite Uniforms Co., Inc. 405 CalAmp 400 Gills Onions 400 Seminis 400 Wal-Mart Stores, Inc. 400 Raypak, Inc. 320 Home Depot 310 Dullam Nursery 300 Costco Wholesale 250 Deardorff Jackson Co. 250 Seaboard Produce Distribution 230

Source: Economic Development Corporation of Oxnard

A-4

The following table lists the major employers within the County, as of July, 2013:

COUNTY OF VENTURA Major Employers As of July 2013 (Listed Alphabetically)

Employer Name Location Industry Amgen Inc Thousand Oaks Biological Specimens-Manufacturers Bankers Capital Financial Inc Westlake Village Real Estate Loans Baxter Healthcare Westlake Village Physicians & Surgeons Equip & Supls-Mfrs Boskovich Farms Inc Oxnard Fruits & Vegetables-Growers & Shippers Central Purchasing Inc Camarillo Tools-New & Used Coleman Welding Ventura Welding Dole Berry Co Oxnard Fruits & Vegetables-Growers & Shippers Farmers Insurance Simi Valley Insurance Haas Automation Inc Oxnard Machinery-Manufacturers Harbor Freight Tools USA Inc Camarillo Tools-New & Used Iyogi Computer Support Oak Park Computers-Service & Repair Los Robles Hospital & Med Ctr Thousand Oaks Hospitals Moorpark College Moorpark Schools-Universities & Colleges Academic Nancy Reagan Breast Ctr Simi Valley Diagnostic Imaging Centers Naval Air Warfare Ctr Weapons Point Mugu NAWC Federal Government-National Security Naval Base Ventura County Point Mugu NAWC Military Bases Naval Construction Battalion Point Mugu NAWC Federal Government-National Security Ojai Valley Inn & Spa Ojai Hotels & Motels Oxnard College Oxnard Schools-Universities & Colleges Academic Penny Mac Mortgage Investment Moorpark Real Estate Investment Trusts Sheriff's Dept-Jails Ventura Sheriff Simi Valley Hospital Simi Valley Hospitals St John's Regional Medical Ctr Oxnard Schools-Universities & Colleges Academic Technicolor Inc Camarillo Motion Picture Producers & Studios Ventura County Superintendent Camarillo Schools

Source: State of California Employment Development Department, extracted from The America's Labor Market Information System (ALMIS) Employer Database, 2013 2nd Edition.

A-5

Commercial Activity

In 2009, the State Board of Equalization converted the business codes of sales and use tax permit holders to North American Industry Classification System codes. As a result of the coding change, retail stores data for 2009 and after is not comparable to that of prior years.

A summary of historic taxable sales within the City during the past five years in which data is available is shown in the following table. Total taxable sales during the 2011 calendar year in the City were reported to be $2,122,220,000, a 9.75% increase over the total taxable sales of $1,933,728 reported during the 2010 calendar year. Annual figures for 2012 are not yet available.

CITY OF OXNARD Taxable Retail Sales Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)

Retail Stores Total All Outlets Number Taxable Number Taxable of Permits Transactions of Permits Transactions 2007 1,492 $1,809,324 3,759 $2,317,108 2008 1,518 1,648,461 3,772 2,165,477 2009(1) 2,262 1,436,959 3,526 1,856,434 2010(1) 2,262 1,507,987 3,530 1,933,728 2011(1) 2,174 1,633,046 3,460 2,122,220

(1) Not comparable to prior years. “Retail” category now includes “Food Services.” Source: California State Board of Equalization, Taxable Sales in California (Sales & Use Tax).

A summary of historic taxable sales within the County during the past five years in which data is available is shown in the following table. Total taxable sales during the 2011 calendar in the County were reported to be $11,020,181,000, a 7.77% increase over the total taxable sales of $10,225,488,000 reported during the 2010 calendar year. Data is not yet available for 2012.

COUNTY OF VENTURA Taxable Retail Sales Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)

Retail Stores Total All Outlets Number Taxable Number Taxable of Permits Transactions of Permits Transactions 2007 8,623 $8,822,848 23,953 $12,230,207 2008 8,902 8,075,751 23,940 11,322,410 2009(1) 14,331 7,213,606 22,564 9,883,853 2010(1) 14,134 7,546,960 22,422 10,225,488 2011(1) 13,788 8,156,404 22,032 11,020,181

(1) Not comparable to prior years. “Retail” category now includes “Food Services.” Source: California State Board of Equalization, Taxable Sales in California (Sales & Use Tax).

A-6

Effective Buying Income

“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.”

The following table summarizes the total effective buying income and the medical household effective buying income for the City, the County, the State and the United States for the years 2008 through 2012.

CITY OF OXNARD AND VENTURA COUNTY EFFECTIVE BUYING INCOME 2008 through 2012

Total Effective Buying Income Median Household Year Area (000’s Omitted) Effective Buying Income 2008 City of Oxnard $ 2,801,315 $ 49,112 Ventura County 19,931,932 59,275 California 832,531,445 48,952 United States 6,443,994,426 42,303

2009 City of Oxnard 2,944,858 50,253 Ventura County 20,448,570 62,193 California 844,823,319 49,736 United States 6,571,536,768 43,252

2010 City of Oxnard 2,738,220 46,869 Ventura County 19,427,353 58,583 California 801,393,028 47,177 United States 6,365,020,076 41,368

2011 City of Oxnard 2,737,998 46,616 Ventura County 19,920,950 58,300 California 814,578,458 47,062 United States 6,438,704,664 41,253

2012 City of Oxnard 3,059,218 47,708 Ventura County 21,829,752 59,284 California 864,088,828 47,307 United States 6,737,867,730 41,358

Source: The Nielsen Company (US), Inc.

A-7

Construction Activity

The tables below summarize building activity in the City and the County from calendar years 2008 through 2012.

CITY OF OXNARD Total Building Permit Valuations (Valuations in Thousands) 2008 through 2012

2008 2009 2010 2011 2012 Permit Valuation New Single-family $15,904.7 $19,531.8 $13,019.2 $6,657.2 $790.1 New Multi-family 41,659.8 22,507.6 21,388.6 40,084.8 13,871.4 Res. Alterations/Additions 9,817.1 6,678.2 5,086.7 13,279.5 4,159.9 Total Residential $67,381.6 $48,717.7 $39,494.5 $60,021.50 $18,821.4

New Commercial $51,200.5 $17,230.1 $16,292.7 $12,533.9 $6,932.8 New Industrial 6,526.9 0.0 0.0 0.0 5,126.5 New Other 6,898.9 706.7 2,290.7 3,763.6 0.0 Com. Alterations/Additions 20,235.2 15,574.6 11,097.0 13.735.5 8,497.8 Total Nonresidential $84,861.5 $33,511.3 $29,680.4 $16,311.735 $20,557.1

New Dwelling Units Single Family 53 81 44 20 4 80 Multiple Family 290 123 116 320 TOTAL 343 204 160 340 84

Source: Construction Industry Research Board, Building Permit Summary

COUNTY OF VENTURA Total Building Permit Valuations (Valuations in Thousands) 2008 through 2012

2008 2009 2010 2011 2012 Permit Valuation New Single-family $119,157.3 $81,959.7 $68,191.5 $65,286.8 $62,359.0 New Multi-family 82,542.3 32,433.1 52,395.9 67,765.1 23,303.3 Res. Alterations/Additions 79,040.2 60,450.2 61,349.0 83,791.4 56,288.6 Total Residential $280,739.8 $174,843.0 $181,936.4 $216,843.3 $141,950.9

New Commercial $120,076.7 $30,640.9 $41,329.1 $33,617.1 $36,557.8 New Industrial 16,258.5 16,561.1 0.0 6,955.4 9,636.2 New Other 49,012.6 31,878.8 39,078.1 5,326.7 3,147.1 Com. Alterations/Additions 159,278.0 74,224.4 80,035.6 80,890.5 69,241.1 Total Nonresidential $344,625.9 $153,305.2 $160,442.7 $126,789.7 $118,582.2

New Dwelling Units Single Family 354 231 192 167 175 Multiple Family 488 173 398 539 147 TOTAL 842 404 590 706 322

Source: Construction Industry Research Board, Building Permit Summary

A-8

APPENDIX B

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

B-1

[THIS PAGE INTENTIONALLY LEFT BLANK]

RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 1 OF RIO ELEMENTARY SCHOOL DISTRICT

The following sets forth the Rate and Method ofApportionment ("RMA") for the levy and collection of Special Taxes by Community Facilities District No. I ("CFD No. I") of the Rio Elementary School District ("School District"). A Special Tax shall be levied annually on and collected from Taxable Property (as defined below) in CFD No. I each Fiscal Year, as defined below, in an amount determined through the application of the RMA, described below. All of the real property in CFD No. I, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.

SECTION A DEFINITIONS

The terms hereinafter set forth have the following meanings:

"Acreage or Acre" means the number of acres of! and area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map the Board may rely on the applicable Final Map.

"Act" means the Mello-Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5 of Part I ofDivision 2 of Title 5 of the Government Code of the State of California.

"Administrative Expenses" means any ordinary and necessary expense incurred by the School District on behalfofCFD No. I related to the determination of the amount of the levy of Special Taxes, the collection of Special Taxes including the expenses of collecting delinquencies, the administration of Bonds, the proportional payment of salaries and benefits of any School District employee to the extent duties are directly related to the administration ofCFD No. I, fees charged by a third party consultant for services related to the administration of CFD No. I, and costs otherwise incurred in order to carry out the authorized purposes ofCFD No. I. The costs associated with the administration of Bonds shall include, but not be limited to (i) costs of complying with disclosure obligations required by the State of California, Federal or other governmental agencies, (ii) costs of complying with arbitrage rebate requirements, (iii) costs associated with releasing funds from escrow, if any, and (v) fees charged by the authorized trustee.

"Affordable Unit" means any (i) Attached Unit or Detached Unit constructed within CFD No. I to satisfy Section 1.1 ofthe Development Agreement and which conforms with the "affordable housing cost" limitations, set forth in Health and Safety Code Section 50052.5(3) or (ii) any Apartment Unit constructed within CFD No. I to satisfy Section 1.1 of the Development Agreement and which conforms with the "affordable rent" limitations set forth in Health and Safety Code Section 50053 (b) as evidenced by the applicable deed restrictions, resale restrictions, and/or regulatory agreements.

"Annual Special Tax" means the Special Tax actually levied in any Fiscal Year on any Assessor's Parcel.

"Apartment Unit" means each separate residential dwelling unit which comprises an independent facility made available for rental, but not for purchase by the general public.

ROI Page I of 15 March I, 2005 "Assessor's Parcel" means a lot or parcel ofland designated on an Assessor's Parcel Map with an assigned Assessor's Parcel number.

"Assessor's Parcel Map" means an official map ofthe Assessor of the County designating parcels by Assessor's Parcel Number.

"Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the County for purposes of identification.

"Assigned Annual Special Tax" means the Special Tax of that name described in Section D.

"Attached Unit" means a Unit that is located within a building in which each of the individual Units has or shall have at least one common wall with another Unit.

"Backup Annual Special Tax" means the Special Tax of that name described in Section E.

"Board" means the Board of Trustees of Rio Elementary School District, or its designee, in certain cases acting as the Legislative Body ofCFD No. I.

"Bond Index" means the national Bond Buyer Revenue Index, commonly referenced as the 25- Bond Revenue Index. In the event the Bond Index ceases to be published, the index used shall be based on a comparable index for revenue bonds maturing over a 30 year period with an average rating equivalent to Moody's "A I" and S&P's "A+", as may be reasonably determined by the Board.

"Bonds" means any obligation to repay a sum ofmoney, including obligations in the form ofbonds, notes, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, to which all or a portion of the Special Taxes have been pledged.

"Bond Yield" means the weighted average yield on all outstanding series ofBonds, for purposes of this calculation the yield ofthe Bonds shall be the yield calculated at the time such Bonds are issued, pursuant to Section 148 of the Internal Revenue Code of 1986, as amended for the purpose of the Non-Arbitrage (Tax) Certificate or other similar bond issuance document.

"Building Square Footage" or "BSF" means for any Unit, the square footage of assessable internal living space listed on the building permit(s) for such Unit, exclusive of any carports, walkways, garages, overhangs, patios, enclosed patios, internal hallways or detached accessory structure.

"Calendar Year" means the period commencing January I of any year and ending the following December 3 I.

"City" means the City of Oxnard.

"County" means the County of Ventura.

"Detached Unit" means a Unit, which is not an Attached Unit.

ROI Page 2 of 15 March I, 2005 "Developed Property" means all Assessor's Parcels in CFD No. I for which building permits for new construction were issued on or before January I ofthe prior Fiscal Year.

"Development Agreement" means the Development Agreement by and between the City and Riverpark A, LLC and River Park B, LLC dated August 27, 2002, as amended.

"Exempt Property" means all Assessor's Parcels designated as being exempt from Special Taxes pursuant to Section K.

"Final Map " means a final tract map, parcel map, condominium plan, lot line adjustment, or functionally equivalent map or instrument that creates building sites recorded in the County Office of the Recorder.

"Final Tract Map 5352-1" means that certain map known as Tract No. 5352-1, in the City of Oxnard, County ofVentura, State of California, as per map recorded in Book 150 Page 76 through 92 inclusive ofMiscellaneous Records (Maps), in the office ofthe County Recorder of said County as document number 20040831-0239661.

"Fiscal Year" means the period commencing on July I of any year and ending the following June 30.

"Floor Area" or "FA" means for any Non-Residential Property the total of the gross area ofthe floor surface within the exterior wall of the building(s), not including space devoted to stairwells, basement storage, required corridors, public restrooms, elevator shafts, light courts, vehicle parking and areas incidental thereto, mechanical equipment incidental to the operation of such building and covered public pedestrian circulation areas including atriums, lobbies, plazas, patios, decks, and similar areas, except such public circulating areas or portions thereof that are used solely for commercial purposes as listed on the applicable building permit issued for such Non-Residential Property.

"High Density Unit A" means a Unit that is (i) located within a building in which each of the individual Units have at least one common wall with another Unit and (ii) is located within Lot 3, 4, 5, 7 and/or 8 of Final Tract Map 5352-1.

"High Density Unit D/F" means a Unit that is (i) located within a building in which each of the individual Units have at least one common wall with another Unit and (ii) is located within Lot II, 12, 16,17 and/or 18 ofFinal Tract Map 5352-1.

"Homeowner" means any owner of a completed Unit constructed and sold within CFD No. I.

"Long Term Lessee" means any person or entity who has entered into a lease contract for the use of an Assessor's Parcel within CFD No. I for a term of20 years or longer.

"Lot" means an individual legal lot created by a Final Map.

"Maximum Annual Special Tax" means the Special Tax of that name as described in Section C.

"Minimum Annual Special Tax Requirement" means the amount in any Fiscal Year equal to: (i) one-hundred and ten percent (II 0%) of the debt service on all outstanding Bonds, (ii) the periodic costs of the Bonds, including but not limited to, credit enhancement costs and rebate payments on

ROI Page 3 ofl5 March I, 2005 the Bonds, (iii) Administrative Expenses ofCFD No. I, (iv) the costs associated with the release of funds from an escrow account established in association with the Bonds, (v) any amount required to establish or replenish any reserve funds (or account thereof) established in association with the Bonds, and (vi) an amount equal to the reasonably anticipated delinquent Special Taxes, based on the delinquency rate for Special Taxes in the prior Fiscal Year, less (vii) any amount available to pay debt service or other periodic costs on the Bonds pursuant to any applicable bond indenture, fiscal agent agreement, or trust agreement.

''Minimum Taxable Acreage" means the applicable Acreage classified as Taxable Property as determined pursuant to s·ection K.

"Non-Residential Property" means all Assessor's Parcels of Developed Property that is not Residential Property for which a building permit has been issued by the City, or another public agency in the event the City no longer issues permits for the construction of non-residential structures within CFD No. I.

"Partial Prepayment Amount" means the amount required to prepay a portion of the Annual Special Tax obligation for an Assessor's Parcel as described in Section I.

"Prepaym.ent Amount" means the amount required to prepay the Annual Special Tax obligation in full for an Assessor's Parcel as described in Section H.

"Prepayment Administrative Fees" means any fees or expenses of the School District or CFD No. I associated with the prepayment of the Special Tax obligation of an Assessor's Parcel. Prepayment Administrative Fees shall include among other things the cost of computing the Prepayment Amount, redeeming Bonds, and recording any notices to evidence the prepayment and/or redemption of Bonds.

"Present Value of Taxes" means for any Assessor's Parcel the present value of (i) the unpaid portion, if any, of the Annual Special Tax applicable to such Assessor's Parcel in the current Fiscal Year and (ii) the Maximum Annual Special Taxes expected to be levied on such Assessor's Parcel in each remaining Fiscal Year, as reasonably determined by the Board, until the termination date specified in Section J. The discount rate used for this calculation shall be equal to the (i) Bond Yield after the issuance of the first Series ofBonds or (ii) most recently published Bond Index prior to the issuance of the first Series of Bonds.

"Proportionately" means that the ratio of the actual Annual Special Tax levy to the applicable Assigned Annual Special Tax is equal for all applicable Assessor's Parcels.

"Reserve Fund Credit" means an amount equal to the reduction in the applicable reserve fund requirement(s) resulting from the redemption of Bonds with the Prepayment Amount. In the event that a surety bond or other credit instrument satisfies the reserve requirement or the reserve requirement is under funded at the time of the prepayment, no Reserve Fund Credit shall be given.

"Reside~ttial Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for the construction of a Unit(s) by the City, or another public agency in the event the City no longer issues permits for the construction of Units within CFD No. I, for the purposes of constructing one or more units.

ROI Page 4 of 15 March I, 2005 "School District" means the Rio Elementary School District, or subsequent successor school district.

"Special Tax" means any ofthe special taxes authorized to be levied by CFD No. I pursuant to the Act. ·

"Taxable Property" means all Assessor's Parcels that are not classified as Exempt Property.

"Undeveloped Property" means all Assessor's Parcels ofTaxable Property that are not Residential ·Property or Non-Residential Property.

"Unit" means each separate residential dwelling unit that comprises an independent facility capable of conveyance or rental separate from adjacent residential dwelling units.

"Very Low Affordable Unit" means any (i) Unit constructed within CFD No. I to satisfy Section 1.1 of the Development Agreement and which conforms with the "affordable housing cost" limitations, set forth in Health and Safety Code Section 50052.5(2) and (ii) any Apartment Unit constructed within CFD No. I to satisfy Section 1.1 of the Development Agreement and which conforms with the "affordable rent" limitations, set forth in Health and Safety Code Section 50053(b)(2) as evidence by the applicable deed restrictions, resale restrictions, and/or regulatory agreements.

"Zone" means the areas identified as a Zone ofCFD No. I as in Exhibit A to this RMA.

"Zone 1" means all property located within the area identified as Zone I ofCFD No. I as in Exhibit A and described in Exhibit B to this RMA.

"Zone 2" means all property located within the area identified as Zone 2 ofCFD No. I as in Exhibit A and described in Exhibit B to this RMA.

"Zone 3" means all property located within the area identified as Zone 3 ofCFD No. I as in Exhibit A and described in Exhibit B to this RMA.

SECTIONB CLASSIFICATION OF ASSESSOR'S PARCELS

Each Fiscal Year, beginning with Fiscal Year 2005-06, (i) each Assessor's Parcel shall be assigned to a Zone in accordance with Exhibit A and/or Exhibit B; (ii) each Assessor's Parcel shall be classified as Exempt Property or Taxable Property; (iii) each Assessor's Parcel ofTaxable Property shall be classified as Developed Property or Undeveloped Property; and (iv) each Assessor's Parcel of Developed Property shall be classified as Residential Property or Non-Residential Property. Residential Property shall be further classified based upon Unit type (ie: Attached Unit, Detached Unit, Very Low Affordable Unit, Affordable Unit, High Density Unit A, ,High Density Unit D/F) and each Attached Unit and Detached Unit shall be classified by the Building Square Footage of such Unit. The classification of Exempt Property shall take into consideration .the Minimum Taxable Acreage of each Zone as determined pursuant to Section K.

ROI Page 5 of 15 March I, 2005 SECTIONC MAXIMUM ANNUAL SPECIAL TAXES

1. Residential Property

The Maximum Annual Special Tax for each Assessor's Parcel classified as Residential Property within a particular Zone in any Fiscal Year shall be the amount determined by the greater of(i) the application of the applicable Assigned Annual Special Tax for such Zone, or (ii) the application of the Backup Annual Special Tax for such Zone.

2. Non-Residential Property

The Maximum Annual Special Tax for each Assessor's Parcel classified as Non-Residential Property within a particular Zone in any Fiscal Year shall be the amount determined by the greater of(i) the application of the Assigned Annual Special Tax for such Zone, or (ii) the application of the Backup Annual Special Tax for such Zone.

3. Undeveloped Property

The Maximum Annual Special Tax for each Assessor's Parcel classified as Undeveloped Property within a particular Zone in any Fiscal Year shall be the amount determined by the application of the Assigned Annual Special Tax for such Zone.

SECTIOND ASSIGNED ANNUAL SPECIAL TAXES

1. Residential Propertv

The Assigned Annual Special Tax applicable to an Assessor's Parcel classified as Residential Property shall be determined by reference to Tables I, 2 and 3 according to the Zone within which the Assessor's Parcel is located, the Unit type, and the Building Square Footage of the Unit.

ROI Page 6 ofl5 March I, 2005 · TABLEl

ASSIGNED ANNUAL SPECIAL TAX FOR RESIDENTIAL PROPERTY IN ZONE 1 FISCAL YEAR 2005-06

Building Square Footage Attached Unit < 1,400 $1,294.00 per Unit Attached Unit I ,400 - I ,699 $1 ,341.83per Unit Attached Unit 1,700-1,999 $1,533.13 per Unit Attached Unit 2,000-2,199 I $1,786.60 per Unit Attached Unit > 2,200 $1,977.90 per Unit Detached Unit < 1,750 $1,676.13 per Unit Detached Unit 1,750-2,099 $1,999.41 per Unit Detached Unit 2, I 00-2,299 $2,195.0 I per Unit Detached Unit 2 300-2 799 $2 456.13 per Unit Detached Unit > 2,800 $2,843.50 per Unit Very Low Affordable Unit NA $374.69 per Unit Affordable Unit NA $650.24 per Unit High Density Unit A NA $743.79 per Unit High Density Unit D/F NA $867.11 per Unit

Each July I, commencing July I, 2006, the Assigned Annual Special Tax for each Assessor's Parcel of Residential Property within Zone I shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

ROI Page 7 of 15 March I, 2005 TABLE2

ASSIGNED ANNUAL SPECIAL TAX FOR RESIDENTIAL PROPERTY IN ZONE 2 FISCAL YEAR 2005-06

Building Square I Assigned Annual Unit Type Footage Special Tax Attached Unit < 1,400 $1,588.94 per Unit Attached Unit 1,400- 1,699 $1,636.77 per Unit Attached Unit 1,700-1,999 $1,828.07 per Unit Attached Unit 2,000-2,199 $2,081.54 per Unit Attached Unit > 2,200 $2,272.84 per Unit Detached Unit < 1,750 $1,971.07 per Unit Detached Unit 1,750-2,099 $2,294.35 per Unit Detached Unit 2, I 00- 2,299 $2 489.95 per Unit Detached Unit 2,300-2,799 $2,751.07 per Unit Detached Unit > 2,800 $3,138.44 per Unit Very Low Affordable Unit NA $539.69 per Unit Affordable Unit NA $815.24 per Unit High Density Unit A NA $908.79 per Unit High Density Unit D/F NA $1,032.11 per Unit

Each July 1, commencing July I, 2006, the Assigned Annual Special Tax for each Assessor's Parcel ofResidential Property within Zone 2 shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

ROI Page 8 of 15 March I, 2005 TABLE3

ASSIGNED ANNUAL SPECIAL TAX FOR RESIDENTIAL PROPERTY IN ZONE 3 FISCAL YEAR 2005 -06 Assigned Annual Unit Type Building Square Footage Special Tax

Attached Unit < 1,400 $1,294.00 per Unit Attached Unit 1,400- 1,699 $1,341.83 per Unit Attached Unit 1,700-1,999 $1,533.13 per Unit Attached Unit 2,000 -2,199 $1,786.60 per Unit Attached Unit > 2,200 $1,977.90 per Unit Detached Unit < 1,750 $1,676.13 per Unit Detached Unit 1,750-2,099 $1,999.41 per Unit Detached Unit 2,100-2,299 $2,195.0 I per Unit Detached Unit 2,3 00 - 2, 799 $2,456.13 oer Unit Detached Unit > 2,800 $2,843.50 per Unit Verv Low Affordable Unit NA $374.69 per Unit Affordable Unit NA $650.24 oer Unit Hi"h Densitv Unit A NA $743.79 per Unit High Densitv Unit D/F NA $867 .I I per Unit

Each July I, commencing July I, 2006, the Assigned Annual Special Tax for each Assessor's Parcel of Residential Property within Zone 3 shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.

2. Non-Residential Property

The Assigned Annual Special Tax rate for an Assessor's Parcel ofNon-Residential Property within any Zone in Fiscal Year 2005-06 shall be $0.76 per square foot of Floor Area.

Each July I, commencing July I, 2006, the Assigned Annual Special Tax per square foot of Floor Area shall be increased by two percent (2.00%) ofthe amount in effect the prior Fiscal Year.

ROI Page 9 of 15 March I, 2005 3. Undeveloped Property

The Assigned Annual Special Tax rate per acre of Acreage for an Assessor's Parcel of Undeveloped Property shall be determined by reference to Table 4 according to the Zone withiri which the Assessor's Parcel is located.

TABLE4

ASSIGNED ANNUAL SPECIAL TAX FOR UNDEVELOPED PROPERTY FISCAL YEAR 2005-06 Assigned Annual Special Tax

Zone 1 $22,304.22 per Acre Zone2 $26,415.36 oer Acre Zone3 $12,846.55 per Acre

Each July 1, commencing July 1, 2006, the Assigned Annual Special Tax per acre of Acreage for each Assessor's Parcel ofUndeveloped Property within each Zone shall be increased by two percent (2.00%) of the amount in effect the prior Fiscal Year.

SECTIONE BACKUP ANNUAL SPECIAL TAXES

Each Fiscal Year, each Assessor's Parcel ofDeveloped Property shall be subject to a Backup Annual Special Tax. The Backup Annual Special Tax per square foot ofAcreage for an Assessor's Parcel of Developed Property shall be determined by reference to Table 5 according to the Zone within which the Assessor's Parcel is located.

TABLES

BACKUP ANNUAL SPECIAL TAX FOR DEVELOPED PROPERTY FISCAL YEAR 2005-06 Backup Annual Special Tax

Zone 1 $0.51 per sq.ft. Zone2 $0.61 per sa.ft Zone 3 $0.29 per sq.ft.

ROI Page 10 of 15 March 1, 2005 Each July I, 2006, the Backup Annual Special Tax per square foot of Acreage for each Assessor's Parcel of Developed Property within each Zone shall be increased by two percent (2.00%) of the amount in effect the prior Fiscal Year.

SECTIONF METHOD OF APPORTIONMENT OF THE. ANNUAL SPECIAL TAX

Commencing Fiscal Year 2005-06, and for each subsequent :Fiscal Year, the Board shall levy Annual Special Taxes as follows:

Step One: The Board shall levy an Annual Special Tax on each Assessor's Parcel of Residential Property in an amount equal to the Assigned Annual Special Tax applicable to each such Assessor's Parcel.

Step Two: If the sum of the amounts collected in step one is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Board shall levy Proportionately an Annual Special Tax on each Assessor's Parcel of Non Residential Property, up to the Assigned Annual Special Tax applicable to each such Assessor's Parcel, to satisfy the Minimum Annual Special Tax Requirement.

Step Three: If the sum of the amounts collected in steps one and two is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Board shall levy Proportionately an Annual Special Tax on each Assessor's Parcel of Undeveloped Property, up to the Assigned Annual Special Tax applicable to each such Assessor's Parcel, to satisfy the Minimum Annual Special Tax Requirement.

Step Four: If the sum of the amounts collected in steps one, two and three is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Board shall additionally levy an Annual Special Tax Proportionately on each Assessor's Parcel of Residential Property, up to the Maximum Annual Special· Tax applicable to each such Assessor's Parcel, to satisfy the Minimum Annual Special Tax Requirement.

Step Five: If the sum of the amounts collected. in steps one, two, three and four is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Board shall additionally levy an Annual Special Tax Proportionately on each Assessor's Parcel of Non-Residential Property, up to the Maximum Annual Special Tax applicable to each such Assessor's Parcel, to satisfy the Minimum Annual Special Tax Requirement.

ROI Page II of 15 March I, 2005 SECTIONG EXCESS ASSIGNED ANNUAL SPECIAL TAXES

In any Fiscal Year, in which the Annual Special Taxes collected from Developed Property, pursuant to Step I of Section F, exceed the Minimum Annual Special Tax Requirement, the School District shall use such amount for any authorized uses in accordance with the Act, CFD No. I proceedings, and/or other applicable law as determined by the Board.

SECTIONH PREPAYMENT OF ANNUAL SPECIAL TAXES

The Annual Special Tax obligation of an Assessor's Parcel ofUndeveloped Property or an Assessor's Parcel of Developed Property for which a building permit has been issued for new construction has been issued may be prepaid in full, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Annual Special Tax obligation would be prepaid. The Prepayment Amount for an Assessor's Parcel eligible for prepayment shall be determined as described below.

An owner or Long Term Lessee of an Assessor's Parcel intending to prepay the Annual Special Tax obligation shall provide CFD No. I with written notice of intent to prepay. Within thirty (30) days of receipt of such written notice, the Board shall reasonably determine the prepayment amount of such Assessor's Parcel and shall notifY such party of such Prepayment Amount. The Prepayment Amount shall be calculated according to the following formula:

P =PVT-RFC+PAF

The terms above have the following meanings:

p = Prepayment Amount PVT Present Value of Taxes RFC = Reserve Fund Credit PAF = Prepayment Administrative Fees

Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Annual Special Taxes that may be levied on Taxable Property, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently outstanding Bonds in each future Fiscal Year and such prepayment will not impair the security of all currently outstanding Bonds, as reasonably determined by the Board. Such determination shall include identifYing all Assessor's Parcels that are expected to become Exempt Property.

With respect to any Assessor's Parcel that is prepaid, the Board shall indicate in the records ofCFD No. I that there has been a prepayment ofthe Annual Special Tax obligation as shall cause a suitable notice to be recorded in compliance with the Act to indicate the prepayment ofthe Annual Special Tax obligation and the release of the Annual Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Annual Special Tax shall cease.

ROI Page 12 ofl5 March I, 2005 SECTION I PARTIAL PREPAYMENT OF ANNUAL SPECIAL TAXES

The Annual Special Tax obligation of an Assessor's Parcel ofResidential Property may be partially prepaid at the times and under the conditions set forth in this section, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Annual Special Tax obligation would be prepaid. The Annual Special Tax obligation of an Assessor's Parcel ofNon-Residential Property may not be partially prepaid.

1. Partial Prepayment Times and Conditions

Prior to the conveyance of the first production Unit within Final Map to a Homeowner, the owner of no less than all the Taxable Property within such a Final Map may elect in writing to the Board to prepay a portion of the Annual Special Tax obligations for all the Assessor's Parcels within such Final Map, as calculated in Section 1.2. below. The partial prepayment of each Annual Special Tax obligation shall be collected for all Assessor's Parcels prior to the conveyance of the first production Unit within such Final Map.

2. Partial Prepayment Amount

The Partial Prepayment Amount shall be calculated according to the following formula:

PP=PaxF

The terms above have the following meanings:

pp = the Partial Prepayment Amount Pa = the Prepayment Amount calculated according to Section H F = the percent by which the owner of the Assessor's Parcel is partially prepaying the Annual Special Tax obligation

3. Partial Prepayment Procedures and Limitations

With respect to any Assessor's Parcel that is partially prepaid, the Board shall indicate in the records ofCFD No. I that there has been a partial prepayment of the Annual Special Tax obligation and shall cause a suitable notice to be recorded in compliance with the Act to indicate the partial prepayment of the Annual Special Tax obligation and the partial release of the Annual Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay such prepaid portion of the Annual Special Tax shall cease. Additionally, the notice shall indicate that the Assigned Annual Special Tax and the Backup Annual Special Tax for the Assessor's Parcel has been reduced by an amount equal to the percentage which waspartially prepaid.

Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of Annual Special Taxes that may be levied on Taxable Property after such partial prepayment, net of Administrative Expenses, shall be at least J.J times the regularly scheduled annual interest and principal payments on all currently outstanding Bonds in each future Fiscal Year and such partial prepayment will not impair the security of all currently outstanding Bonds, as reasonably determined by the Board. Such determination shall include identifYing all Assessor's Parcels that are expected to become Exempt Property.

ROI Page 13 of 15 March I, 2005 SECTIONJ TERMINATION OF SPECIAL TAX

Annual Special Taxes shall be levied for a period of thirty-five (35) Fiscal Years after the last series ofBonds has been issued, as detennined by the Board, provided that Annual Special Taxes shall not be levied after Fiscal Year 2046-47.

SECTIONK EXEMPTIONS

The Board shall classifY as Exempt Property (i) Assessor's Parcels owned by the State of California, Federal or other local governments, (ii) Assessor's Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor's Parcels used exclusively by a homeowners' association and (iv) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, provided that no such classification would reduce the sum of all Taxable Property in a given Zone to less than the Minimum Taxable Acreage as shown in Table 6. Notwithstanding the above, the Board shall not classifY an Assessor's Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property in a given Zone to less than the Minimum Taxable Acreage for such Zone. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than the Minimum Taxable Acreage in a given Zone will continue to be classified as Residential Property, Non Residential Property or Undeveloped Property, as applicable, and will continue to be subject to Special Taxes accordingly. In such a case that an Assessor's Parcel, not otherwise classified as Exempt Property, is acquired by the State of California, Federal or other local governments after the issuance of a building penn it, or after the issuance of Bonds, whichever first occurs, shall continue to be subject to a Special Tax in accordance with Section B of the RMA.

ROI Page 14 of 15 March I, 2005 TABLE6 MINIMUM TAXABLE ACREAGE Minimum Taxable Acreal!e

Zone I 74.97 Zone2 90,63 Zone 3 61.67

SECTIONL APPEALS

Any property owner claiming that the amount or application of the Special Tax is not correct may file a written notice of appeal with the Board within six (6) months after having paid the first installment of the Special Tax that is disputed. In order to be considered sufficient, any notice of appeal must: (i) specifically identifY the property by address and Assessor's Parcel Number; (ii) state the amount in dispute and whether it is the whole amount or only a portion of the Special Tax; (iii) state all grounds on which the property owner is disputing the amount or application ofthe Special Tax, including a reasonably detailed explanation as to why the amount or application of such Special Tax is incorrect; (iv) include all documentation, if any, in support of the claim; and (v) be verified under penalty of perjury by the person who paid the Special Tax or his or her guardian, executor or administrator. A representative(s) ofCFD No. I shall promptly review such appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and rule on the appeal. Ifthe representative's decision requires that the Special Tax for an Assessor's Parcel be modified or changed in favor of the property owner, a cash refund shall not be made (except for the last year oflevy), but an adjustment shall be made to the Annual Special Tax on that Assessor's Parcel in the subsequent Fiscal Year(s) at the representative's decision shall indicate.

SECTIONM MANNER OF COLLECTION

The Annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. I may collect Annual Special Taxes at a different time or in a different manner if necessary to meet its financial obligations.

J:ICLIENTS\Rio School Distriet\Rh'erPnrk 2004\RMA _ROI_FINAL. doc

ROI Page 15 ofl5 March I, 2005 SHEET 1 OF 1 EXHIBIT "A" MAP OF ZONES OF THE RIO ELEMENTARY SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 1

LEGEND Boundaries of the Rio Elementary School Dlatrlct

Boundaries of Zonee

' > ·~" ..a: ..' l! ..,.. .." "'

(U.S.

Prepared by David Taussig & Associates, Inc. Sheet 1 of 5 EXHIBIT "B" LEGAL DESCRIPTION OF RIO ELEMENTARY SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 1

ZONE 1

11 Lots 3, 4, 5, 7, 8, 11, 12, 16, 17, 18, 19, 20, 22, 23, 24, 25, "A", "E", "F , "G", "H", "J", and a portion of Lot 21 of Tract No. 5352-1, in the City of Oxnard, County of Ventura, State of California, as shown on the map filed in Book 150, Pages 76 through 92, inclusive of Miscellaneous Records (Maps), in the office of the County Recorder of said County, and that portion of Parcel Map Waiver No. 6933, as shown in the document recorded as Instrument No. 86-175821 of Official Records, in the office of the County Recorder of said County described as a whole as follows:

Beginning at the most Westerly corner of Lot "I" of said Tract No. 5352-1; thence North 24°21'24" East 170.71 feet along the Northwesterly line of said Lot "I" and its Northeasterly prolongation to a point on the Southwesterly line of said Lot 21, said point being the beginning of a non-tangent curve concave Southwesterly having a radius of 905.00 feet, a radial of said curve to said point bears North 23 o 15'23" East; thence leaving said Northeasterly prolongation along said Southwesterly line and the Southeasterly line of said Lot 21, the following courses: Southeasterly 72.14 feet along said curve through a central angle of 4°34'02" to the beginning of a reverse curve concave Northerly having a radius of 17.00 feet, Southeasterly, Easterly, and Northeasterly 25.87 feet, North 30°37'16" East 80.13 feet to the beginning of acurve concave Southeasterly having a radius of 228.00 feet, Northeasterly 45.02 feet along said curve though a central angle of II 0 18'50", and North 41 °56'06" East 138.68 feet; thence leaving said Southeasterly line North 48°03'54" West 415.00 feet; thence South 41 °56'06" West 7.50 feet; thence North 48°03'54" West 436.00 feet to the Northwesterly line of said Lot 21; thence along said Northwesterly line, the following courses: South 41 °56'06" West 23.02 feet to the beginning of a curve concave Northwesterly having a radius of228.00 feet, Southwesterly 57.96 feet along said curve through a central angle of 14°33'54", South 56°30'00" West 36.29 feet to the beginning of a curve concave Southeasterly having a radius of 12.00 feet, Southwesterly, Southerly and Southeasterly 17.54 feet through a central angle of 83°45'36" to the beginning of a reverse curve concave Southwesterly having a radius of 356.00 feet, and Southeasterly 82.69 feet along said curve through a central angle of 13°18'29" to the Northeasterly line of Parcel C of Parcel Map Waiver No. 6933, as shown on the document recorded as Instrument No. 86-175821 of said Official Records; thence leaving said Northwesterly line non-tangent along said Northeasterly line and the Northwesterly line of said Parcel C, the following courses: North 55°33'36" West 185.58 feet, North 48°19'11" West 2550.20 feet and South 46°34'27" West 19.24 feet to the most Northerly corner of said Lot 22; thence along the general Northwesterly line of said Tract No. 5352-1, the following courses: South 46°34'27" West 937.45 feet, South 43°25'15" East 596.08 feet to the beginning of a non-tangent curve concave Southeasterly having a radius of 546.00 feet, a radial of said curve to said point bears North 14°39'19" West, Southwesterly 274.02 feet along said curve 1 through a central angle of28°45'16' , South 46°35'24" West 583.37 feet and South 35°49'59" East 554.28 feet to the Northwesterly line of Lot 6 of said Tract No. 5352-1 and to the beginning of a non-tangent curve concave Southeasterly having a radius of 450.00 feet, Sheet 2 of 5 EXHIBIT "B" LEGAL DESCRIPTION OF RIO ELEMENTARY SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 1 (CONT.)

ZONE 1

a radial of said curve to said point bears North 65°25'10" West; thence leaving said Northwesterly line of said Tract No. 5352-1 along said Northwesterly line of Lot 6 and the Northeasterly line of said Lot 6 and its Southeasterly prolongation, the following courses; Northeasterly 136.30 feet along said curve through a central angle of 17°21 '16", North 41 °56'06" East 289.38 feet and South 48°03'54" East 473.87 feet to the centerline of Oxnard Boulevard, 118.00 feet wide, as shown on the map of said Tract No. 5352-1; thence leaving said Southeasterly prolongation along said centerline North 41 °56'06" East 392.22 feet to the Northwesterly prolongation of the Northeasterly line of Lot I 0 of said Tract No. 5352-1; thence leaving said centerline along said Northwesterly prolongation ofthe Northeasterly line of said Lot 10 and the general Northeasterly lines of Lots 10 and 15 of said Tract 5352-1, the following courses: South 48°03'54" East 935.53 feet to the beginning of a non-tangent curve concave Northwesterly having a radius of86.00 feet, a radial of said curve to said point bears North 48°03'54" West, Southwesterly 37.52 feet along said curve through a central angle of 25°00'00", South 66°56'06" West 9.34 feet to the beginning of a curve concave Northerly having a radius of64.00 feet, Southwesterly, Southerly, Southeasterly, Easterly and Northeasterly 256.92 feet through a central angle of230°00'00", North 16°56'06" East 9.34 feet to the beginning of a curve concave Southeasterly having a radius of 86.00 feet, Northeasterly 37.52 feet along said curve through a central angle of25°00'00", non-tangent along said Northeasterly line of Lot 15 and its Southeasterly prolongation South 48°03'54" East 900.75 feet to the centerline of Myrtle avenue, 84.00 feet wide, as shown on the map of said Tract No. 5352-1; thence leaving said Southeasterly prolongation along said centerline, the following courses: South 41 °56'06" West 1233.62 feet to the beginning of a curve concave Easterly having a radius of 420.00 feet, Southwesterly, Southerly and Southeasterly 544.84 feet along said curve through a central angle of74°!9'35", South 32°23'29" East 314.75 feet to the beginning of a curve concave Northeasterly having a radius of 800.00 feet, Southeasterly 346.80 feet along said curve through a central angle of24°50'16" and South 57°13'45" East 83.53 feet to the Southeasterly line of said Tract No. 5352-1; thence leaving said centerline along said Southeasterly line North 24°21 '24" East 2744.53 feet to the point of beginning.

Containing an area of 140.099 acres, more or less.

Subject to covenants, conditions, reservations, restrictions, rights of way and easements, if any, of record. · Sheet 3 of 5 EXHIBIT "B" LEGAL DESCRIPTION OF RIO ELEMENTARY SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 1

ZONE2

Parcell of Parcel Map Waiver No. 932 (Lot Line Adjustment), in the City of Oxnard, County of Ventura, State of California, as shown in the document recorded as Instrument No. 99-076680 of Official Records, in the office of the County Recorder of said County, Parcell of Parcel Map Waiver No. 713, in the City of Oxnard, County of Ventura, State ofCalifomia, as shown in the document recorded as Instrument No. 94-021086 of Official Records, in the office of the County Recorder of said County, that portion of the land described in the Document recorded as Instrument No. 95-122785 of said Official Records, a portion of the Rancho Santa Clara Del Norte as shown on a map filed in Book A, Page 301 of Patents (transcribed Records from Santa Barbara County), in the office of the County Recorder of said County, and that portion of Tract No. 5352-1, in the City of Oxnard, County of Ventura, State of California, as shown on the map filed in Book !50, Pages 76 through 92, inclusive, of Miscellaneous Records, in the Office of the County Recorder of said County described as a whole as follows:

Beginning at the most Westerly comer of Lot"!" of said Tract No. 5352-1; thence North 24°21'24" East 170.71 feet along the Northwesterly line of said Lot"!" and its Northeasterly prolongation to a point on the Southwesterly line of said Lot 21, said point being the beginning of a non-tangent curve concave Southwesterly having a radius of905.00 feet, a radial of said curve to said point bears North 23°15'23" East; thence leaving said Northeasterly prolongation along said Southwesterly line and the Southeasterly line of said Lot 21, the following courses: Southeasterly 72.14 feet along said curve through a central angle of 4°34'02" to the beginning of a reverse curve concave Northerly having a radius of 17.00 feet, Southeasterly, Easterly and Northeasterly 25.87 feet, North 30°37'16" East 80.13 feet to the beginning of a curve concave Southeasterly having a radius of228.00 feet, Northeasterly 45.02 feet along said curve through a central angle of II o 18'50", and North 41 °56'06" East 138.68 feet; thence leaving said Southeasterly line North 48°03'54" West 415.00 feet; thence South 41 °56'06" West 7.50 feet; thence North 48°03'54" West 436.00 feet to the Northwesterly line of said Lot 21; thence along said Northwesterly line, the following courses: South 41 °56'06" West 23.02 feet to the beginning of a curve concave Northwesterly having a radius of228.00 feet, Southwesterly 57.96 feet along said curve through a central angle of !4°33'54", South 56°30'00" West 36.29 feet to the beginning of a curve concave Southeasterly having a radius of 12.00 feet, Southwesterly, Southerly and Southeasterly 17.54 feet through a central angle of 83°45'36" to the beginning of a reverse curve concave Southwesterly having a radius of 356.00 feet, and Southeasterly 82.69 feet along said curve through a central angle of 13°18'29" to the Northeasterly line of Parcel C ofParcel Map Waiver No. 6933, as shown on the document recorded as Instrument No. 86-175821 of said Official Records; thence leaving said Northwesterly line non-tangent along said Northeasterly line and Northwesterly line of said Parcel C, the following courses: North 55°33'36" West 185.58 feet, North 48°19'11" West 2550.20 feet; thence leaving said Northeasterly line ofParcel Map Waiver No. 6933 along the Northwesterly, Northeasterly and Southeasterly lines of said Parcell of Parcel Map Waiver No. 932, the following courses: Sheet 4 of 5 EXHIBIT "B" LEGAL DESCRIPTION OF RIO ELEMENTARY SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 1 (CONT.)

ZONE2

North 46°34'27" East 1111.94 feet to the beginning of a curve concave Southeasterly having a radius of 9940.00 feet, Northeasterly 655.44 feet along said curve through a central angle of 3°46'41 ",North 50°2) '08" East 5130.05 feet, South 55°)] '46" East 1082.50 feet, South 51 °50'22" West 879.50 feet, South 64°50'49" West 462.44 feet, South 52°20'57" West 302.86 feet, North 54°52'45" West 51.48 feet, South 52°)9'40" West 336.64 feet, South 56°50'16" West 462.55 feet, South 55°2) '47" West 396.41 feet, South 39°56'17" West 434.14 feet and South 55°05'51" East 74.61 feet to the most Northerly comer of Parcel I of said Parcel Map Waiver No. 713; thence leaving said Southeasterly line of said Parcel I of Parcel Map Waiver No. 932 along the Northeasterly and Southeasterly Jines of said Parcel I of Parcel Map Waiver No. 713, the following courses: South 55°05'51" East 2255.07 feet and South 33°07'00" West 511.07 feet; thence leaving said Southeasterly line along the general Westerly line of Parcell of the Parcel Map recorded in Book 10, Page 63 of Parcel Maps, in the office of said County Recorder of said County, the following courses: South 55°18'30" East 125.21 feet and South 33°07'00" West 199.31 feet to the Northeasterly line of the land described in the Deed recorded as Instrument No. 95-122785 of said Official Records; thence along said Northeasterly line and the Southeasterly line of said land, the following courses: South 55°)4'40" East 299.96 feet, South 33°07'00" West I 001.37 feet, South 32°54'38" West 212.03 feet, North 57°50'22" West 86.00 feet and South 32°54'38" West 22.23 feet to the most Easterly comer of Lot 32 of said Tract No. 5352-1; thence leaving said Southeasterly line of said land along the Southeasterly and Southwesterly line of said Southeasterly line of said land along the Southeasterly and Southwesterly line of said Tract No. 5352-1, the following courses: South 32°54'38" West 152.77 feet, South 57°37'38" East 86.00 feet, South 32°54'38" West 2114.20 feet and North 57°58'57" West 1191.21 feet to the pint of beginning.

Containing an area of 430.171 acres, more or Jess.

Subject to covenants, conditions, reservations, restrictions, rights of way and easements, if any, of record. Sheet 5 of 5 EXHIBIT "B" LEGAL DESCRIPTION OF RIO ELEMENTARY SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 1

ZONE3

Lots I, 2, 6, 9, 10, 13, 14, 15, "B" and "D" of Tract No. 5352-1, in the City of Oxnard, County of Ventura, State of California, as shown on the map filed in Book !50, Pages 76 through 92, inclusive, of Miscellaneous Records (Maps), in the office of the County Recorder of said County, all the land described in Instrument No. 2001-0215425 of Official Records, in the office of the County Recorder of said County and portions of Lots I through 6, Block I and portions of Lots I through 12, Block 12 of the Map of Town of Colonia, in the City of Oxnard, County of Ventura, State of California, as shown on the map filed in Book 2, Page !57 of Miscellaneous Records (Maps), in the office of the County Recorder of said County.

Containing an area of 96.504 acres, more or less.

Subject to covenants, conditions, reservations, restrictions, rights of way and easements, if any, of record.

[THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX C

APPRAISAL REPORT

C-1

[THIS PAGE INTENTIONALLY LEFT BLANK]

SUMMARY APPRAISAL REPORT - COMPLETE APPRAISAL BRUCE W. HULL & ASSOCIATES INC. REAL ESTATE APPRAISERS & CONSULTANTS

August 20, 2013

Paul Disario

Interim Assistant Superintendent

Rio School District COMMUNITY FACILITIES DISTRICT NO. 1 2500 Vineyard Avenue, SPECIAL TAX BONDS, SERIES 2013 Oxnard, California 93036 RIO SCHOOL DISTRICT City of Oxnard Reference: Summary Appraisal Report – Complete Appraisal State of California Community Facilities District No. 1, Special Tax Bonds, Series 2013 (Appraiser’s File No. 2013-100) Rio School District, Oxnard, California

Dear Mr. Disario:

At the request and authorization of the Rio School District, I have completed a summary appraisal report for the above-referenced project.

Community Facilities District No. 1, Special Tax Bonds, Series 2013, Rio School District (“CFD No. 1”), consists of a master planned development referred to as RiverPark, in the City of Oxnard. Although the CFD No. 1 boundaries’ encompass the entire masterplan, this appraisal only concerns the assessor’s parcel numbers (“APN’s”) referenced herein below.

The appraisal has been prepared and reported in three sections. Prepared For Rio School District Section IA of this report refers to the APN’s that have been constructed since the inception of this 2500 Vineyard Avenue masterplan and have been sold to individual homeowners and were subject to a special tax levy for Oxnard, California 93036 the 2012-2013 tax year. There are 1,081 of these APN’s and a detailed list of these is listed in the report. I have prepared a statistical analysis to determine if the assessor’s roll is reflective of the market value. This is discussed in detail in the valuation section of this report, but I have concluded, based on this statistical analysis, that there is a 95% confidence level that the assessed value is representative of market value.

Section IB of this report refers to two apartment projects that have been constructed and have had a Prepared By tax levied, Paseo Santa Clara and Serenade. Paseo Santa Clara is an affordable housing Bruce W. Hull & Associates, Inc. development consisting of 140 apartments. Serenade is a market rate apartment complex consisting 1056 E. Meta Street, Suite 204 of 400 apartments. In this section of the report, the affordable housing apartment project is restricted Ventura, California 93001 by income requirements and, as a result, is constrained by market value. The value of the affordable housing apartment was compared to apartments with similar rental rates to determine if the assessed value represented minimum market value. As to the Serenade, I have estimated a market value for the market rate apartments to determine if the assessed value is representative of the market value. Section II refers to both properties that have been levied despite the fact that the assessor does not Section IIIC refers to a model home complex for East End condominiums. These units have recently yet reflect a market value (land or partial improvements) and properties that will be subject to a been completed. special tax levy for the first time for the 2013-2014 tax year (“Gap Properties”); e.g., The Collection. Section IIID refers to Waypointe Condominiums, the remaining standing inventory currently owned Section IIA refers to individual homeowners [Single Family Attached (“SFA”) and Single Family by Standard Pacific. Detached (“SFD”) Constructed but Market Value Not Yet Reflected on Assessor Roll] of properties permitted as of 01.01.2013. This report is a Summary Appraisal Report which is intended to comply with the reporting requirements set forth under Standard Rule 2-2(b) of the Uniform Standards of Professional Section IIB refers to an affordable housing condominium project known as Vista Urbana (“Vista Appraisal Practice for a Summary Appraisal Report, as well as the standards set forth by California Urbana”). There are 48 units that have been constructed. Although all of the units have been sold Debt and Investment Advisory Board for Appraisals for Land Secured Financings. As such, it does with the exception of the models, the valuation is provided under a single APN. not include full discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation concerning the data, Section IIC refers to a lifestyle shopping center named The Collection Shopping Center (“The reasoning, and analyses is retained in the appraiser’s file. The information contained in this report is Collection”). These buildings were built in 2008, and in certain years they were not assessed a specific to the needs of the client and for the intended use stated in this report. The appraiser is not special tax. Values are estimated and compared to the assessed value. responsible for unauthorized use of this report.

Section IID refers to the Target Department Store (“Target”) which was constructed in 2010, but has The above values are stated subject to the assumptions and limiting conditions of this report and the not yet been assigned a special tax levy; this was valued and then compared to the assessed value. Appraiser’s Certification as of August 1, 2013.

Section IIE refers to Cinemark Century Theater (“Cinemark”) that was constructed in 2008, but has The reader should note Extraordinary Assumption Nos. 19 and 20. not yet been assigned a special tax levy; this was valued and then compared to the assessed value. This letter of transmittal is part of the attached report which sets forth the data and analyses upon Section IIF refers to an APN that has been built out and has eight townhouse units, but the assessor which my opinion of value is, in part, predicated. has not reflected the individual APNs; this project is referred to as Avenue II (“Avenue II”). This APN was owned by Standard Pacific in 2012-2013, and all except three of the APNS have been sold Respectfully submitted, to individual homeowners. BRUCE W. HULL & ASSOCIATES, INC. Section IIG refers to an 80-unit townhouse project that has been constructed, but is currently being leased known as The Vines (“The Vines”). As the assessor has not yet mapped these APN’s, it was Bruce W. Hull, MAI necessary to report the values on several parcels. California State Certified General Real Estate Appraiser (AG004964) Section IIH refers to a 224 unit apartment complex under construction (“The Mosaic”). This was valued as complete and on a stabilized occupancy level (95%). The costs to complete and a BWH: deduction for absorption and risk for completion of the project to reach a stabilized occupancy were Attachment deducted to arrive at an “as-is” condition.

Section III refers to Gap Properties which will be subject to a 2014-2015 special tax levy.

Section IIIA refers to individual homeowners (SFA and SFD Constructed but Market Value Not Yet Reflected on Assessor Roll) of properties permitted from 01.02.2013 through 06.01.2013.

Section IIIB refers to Vista Urbana condominiums that are under construction or recently completed 1056 E. Meta Street, Suite 204, Ventura, California 93001 - (805) 641-3275 – Cell (714) 801-2602 that are owned by the developer. The costs to complete were deducted and a discount was applied for risk for completion to arrive at an “as-is” value (all of the units have been pre-sold).

The following table summarizes my findings for each of the sections:

ASSESSED VALUE PER SECTION OWNER APN NUMBER PROJECT 2013-14 APPRAISAL OF LOTS ASSESSOR’S ROLL IA Individual Various 1,081 Individual Homeowner $269,377,928 $269,377,928 IB CAPRI / KW 132-0-110-335 400 Serenade Apartments $ 83,068,300 $ 86,000,000 Sornade LLC Cabrillo Economic 132-0-320-335 140 Paseo Santa Clara Apartments $ 10,160,185 $ 10,160,185 Development Co. 132-0-320-045 IIA Individual Various 49 Gap Properties: Individual Homeowners of Properties $ 6,281,643 $ 14,565,554 Permitted as of 01.01.2013 IIB Individual & Model 132-0-110-515 48 Gap Properties: Vista Urbana Condominiums $ 948,628 $ 10,300,000 Complex IIC SOCM I, LLC 132-0-110-365 N/A Gap Properties: The Collection $ 76,362,400 $152,700,000 IID Target Corporation 132-0-310-375 N/A Gap Properties: Target Department Store $ 22,574,295 $ 46,300,000 IIE SOCM I, LLC 132-0-310-305 N/A Gap Properties: Cinemark Century Theater $ 6,936,000 $ 20,000,000 IIF Individual 132-0-090-125 8 Gap Properties: Avenue II $ 818,944 $ 3,037,500 IIG Corona Riverpark 132-0-280-275, 305, 80 Gap Properties: The Vines $ 2,550,000 $ 19,750,000 Promenade 315, 325, 335; 132-0- 290-015-065, 195-245, 285-305, 132-300-015, 025, 035, 045 IIH Wolf Partners 132-0-230-145, 224 Gap Properties: The Mosaic $ 3,083,041 $ 27,000,000 132-0-230-155 Subtotal 2030 $ 482,161,364 $659,191,167

IIIA Individual Various 16 Gap Properties: Individual Homeowners of Properties $ 2,633,404 $ 5,285,000 Permitted from 01.02.2013 to 06.01.2013 IIIB Aldersgate 132-0-110-515 (Port) 48 Gap Properties: Vista Urbana $ 948,628 $ 9,600,000 Investments IIIC AGS Meridian, 132-0-100-105 3 Gap Properties: East End Condominiums $ 200,000 $ 1,000,000 LLC IIID Standard Pacific 133-0-300-345 6 Gap Properties: Waypointe Condominiums-Standard $ 892,182 $ 2,000,000 Corporation through Pacific 133-0-300-395 Subtotal 73 $ 4,674,214 $ 17,885,000

Total 2,103 Total $486,835,578 $677,076,167 Detailed Property Descriptions Detailed PropertyDescriptions ...... Subject PropertyDescriptions ...... Community FacilitiesDistrictNo.1 ...... CommercialResidential, Multi-Family, andOfficeMarketDiscussion ...... 16 RiverPark SpecificPlan ...... Immediate Surroundings ...... Regional AreaDescription Scope ofAppraisalAssignment ...... 5 Appraisal Development andReportingProcess ...... 4 Three YearSalesHistory ...... Legal Description ...... Owner ofRecord ...... 3 Date ofReport ...... Effective DateofValue ...... Property RightsAppraised ...... Definitions ...... Intended UseoftheReport ...... Purpose oftheAppraisal ...... Assumptions andLimiting Conditions ...... i §IIG §IID §IIC §IIB Value NotYetReflectedonAssessorRoll;Permitted as of01.01.2013) ...... 41 §IIA §IB §IB §IA §IIH –GapProperties §IIF §IIE – Apartment –Serenade ...... 40 – Apartment –PaseoSantaClara...... 39 – VariousInd – GapProperties – GapProperties – GapProperties – GapProperties – GapProperties – GapProperties – GapProperties-IndividualHomeowners (SFAandSFD Constructed but Market ividually OwnedAPN’s – VenturaCounty ...... 7 – AvenueII ...... 50 Cinemark Century Theater – Cinemark CenturyTheater ...... 48 – TheCollection ...... 44 – VistaUrbana ...... 42 – TheVines ...... 51 – TargetDepartment Store ...... 47 – TheMosaic ...... 53 TABLE OFCONTENTS ...... 38

...... 1 ...... 3 ...... 3 ...... 12 ...... 3 ...... 1 ...... 3 ...... 10 ...... 2 ...... 1 ...... 37 ...... 26 ...23 §IIIA - Gap Properties - Individual Homeowners (SFA and SFD Constructed but Market ASSUMPTIONS AND LIMITING CONDITIONS Value Not Yet Reflected on Assessor Roll; Permitted 01.02.2013 through 06.01.2013) .55 1. This report is a Summary Appraisal Report, which is intended to comply with the reporting §IIIB – Gap Properties – Vista Urbana Condominiums ...... 56 requirements set forth under Standard Rule 2-2(b) of the Uniform Standards of Professional §IIIC – Gap Properties – East End Condominiums ...... 58 Appraisal Practice for a Summary Appraisal Report. As such, it might not include full §IIID – Gap Properties – Waypointe Condominiums-Standard Pacific ...... 60 discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation concerning the data, Highest and Best Use Analysis ...... 62 reasoning, and analyses is retained in the appraiser’s file. The information contained in this Valuation ...... 65 report is specific to the needs of the client and for the intended use stated in this report. The appraiser is not responsible for unauthorized use of this report. Valuation Re §IA – Various Individually Owned APN’s ...... 67 2. No responsibility is assumed for legal or title considerations. Title to the property is Valuation Re §IB – Apartment – Paseo Santa Clara & Serenade ...... 98 assumed to be good and marketable unless otherwise stated in this report. Valuation Re §IIA – Gap Properties – Individual Homeowners (SFA and SFD Constructed 3. The property is appraised subject to the special tax lien of CFD No. 1, , Rio School District, but Market Value Not Yet Reflected on Assessor Roll; Permitted as of 01.01.2013) ....119 Oxnard, California. Valuation Re §IIB – Gap Properties – Vista Urbana ...... 122 4. Responsible ownership and competent property management are assumed unless otherwise Valuation Re §IIC – Gap Properties – The Collection ...... 124 stated in this report. Valuation Re §IID – Gap Properties – Target Department Store ...... 140 5. The information furnished by others is believed to be reliable; however, no warranty is given for its accuracy. Valuation Re §IIE – Gap Properties – Cinemark Century Theater ...... 142 6. All engineering is assumed to be correct. Any plot plans and illustrative material in this Valuation Re §IIF – Gap Properties – Avenue II ...... 146 report are included only to assist the reader in visualizing the property. Valuation Re §IIG – Gap Properties – The Vines ...... 147 7. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or Valuation Re §IIH – Gap Properties – The Mosaic ...... 149 structures that render it more or less valuable. No responsibility is assumed for such Valuation Re §IIIA - Gap Properties - Individual Homeowners (SFA and SFD Constructed conditions or for arranging for engineering studies that may be required to discover them. but Market Value Not Yet Reflected on Assessor Roll; Permitted 01.02.2013 through 8. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated in this report. 06.01.2013) ...... 153 9. It is assumed that all applicable zoning and use regulations and restrictions have been Valuation Re §IIIB – Gap Properties – Vista Urbana Condominiums ...... 154 complied with, unless nonconformity has been stated, defined, and considered in this Valuation Re §IIIC – Gap Properties – East End Condominiums ...... 155 appraisal report. Valuation Re §IIID – Gap Properties – Waypointe Condominiums-Standard Pacific ....156 10. It is assumed that all required licenses, certificates of occupancy, or other legislative or administrative authority from any local, state, or national governmental or private entity or Exposure Time ...... 157 organization have been or can be obtained or renewed for any use on which the value Appraisal Summary ...... 158 estimates contained in this report are based. Appraiser’s Certification ...... 160 11. Any sketch in this report may show approximate dimensions and is included to assist the reader in visualizing the property. Maps and exhibits found in this report are provided for ADDENDA reader reference purposes only. No guarantee as to accuracy is expressed or implied unless Discounted Cash Flow – The Vines Condominiums (Rentals) otherwise stated in this report. No survey has been made for the purpose of this report. Absorption Loss Calculation – The Collection Absorption Loss Calculation – The Mosaic Apartments Appraiser’s Qualifications

Summary Appraisal Report – Complete Appraisal

Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page i 12. It is assumed that the utilization of the land and improvements is within the boundaries or 19. An extraordinary assumption relates to The Collection, the shopping center within property lines of the property described and that there is not encroachment or trespass unless RiverPark. No lease information was provided to me. As a result my estimate was based on otherwise stated in this report. comparable rents and information estimated by Empire Economics in their report “Market 13. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any Absorption for RiverPark dated June 17, 2013.” If the actual leases are more (or less) then comment by the appraiser that might suggest the possibility of the presence of such the estimated rents that I have estimated, than the value would be more (or less). In addition substances should not be taken as confirmation of the presence of hazardous waste and/or I have relied on the square footage provided by Shea Homes (and Empire Economics) as it toxic materials. Such determination would require investigation by a qualified expert relates to the rentable square footage. Information was provided on the tenants and their relating to asbestos, urea-formaldehyde foam insulation, or other potentially hazardous square footage but, as stated above, no details of the leases were provided. materials, which may affect the value of the property. The appraiser’s value estimate is 20. Furthermore, this appraisal rests upon an extraordinary assumption due to the limited data predicated on the assumption that there is not such material on or in the property that would provided concerning the costs to complete which were estimated by the owners of The cause a loss in value unless otherwise stated in this report. No responsibility is assumed for Mosaic apartments, Vista Urbana Condominiums, and Waypointe Condominiums. any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraiser’s descriptions and resulting comments are the result of the routine observations made during the appraisal process. 14. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications. 15. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. 16. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event, only with property written qualification and only in its entirety. 17. Neither all nor any part of the contents of this report shall be conveyed to any person or entity, other than the appraiser’s client, through advertising, solicitation materials, public relations, news, sales, or other media, without the written consent and approval of the author, particularly as to valuation conclusions, the identity of the appraiser or firm with which the appraiser is connected, or any reference to the Appraisal Institute or MAI. Further, the appraiser or the firm assumes no obligation, liability, or accountability to any third party. If this report is placed in the hands of anyone but the client, client shall make such party aware of all the assumptions and limiting conditions of the assignment. 18. The Americans with Disabilities Act (“ADA”) became effective on January 26, 1992. The appraiser has not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. The appraiser is not a qualified expert as to the requirements of the ADA Act. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since the appraiser has no direct evidence relating to this issue, possible noncompliance with the requirements of ADA in estimating the value of the property has not been considered.

INTENDED USE OF THE REPORT

It is my understanding that this report will be utilized by the client, Rio School District, in determining the feasibility of issuing special tax bonds for Series 2013 of CFD No. 1 which is the subject of this appraisal.

DEFINITIONS

Market Value The term “market value” as used in this report is defined as being:

“The most probable price which a specified interest in real property is likely to bring under all the following conditions: Consummation of a sale occurs as of a specified date. An open and competitive market exists for the property interest appraised. The buyer and seller are each acting prudently and knowledgeably. The price is not affected by undue stimulus. The buyer and seller are typically motivated. Both parties are acting in what they consider their best interests. Marketing efforts were adequate and a reasonable time was allowed for exposure in the open market. Payment was made in cash in U.S. Dollars or in terms of financial arrangements comparable thereto. The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales’ concessions granted by anyone associated with the sale.”1

1The Appraisal of Real Estate, 11th Edition (definition adopted by Appraisal Institute in 1993) Summary Appraisal Report – Complete Appraisal Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Community Facilities District No. 1 Special Tax Bonds, Series 2013 Special Tax Bonds, Series 2013 Rio School District Rio School District Bruce W. Hull & Associates, Inc. Page iv Bruce W. Hull & Associates, Inc. Page 1 Income Capitalization Approach EFFECTIVE DATE OF VALUE

The term “income capitalization approach” used in this report is defined as: The subject property is valued as of August 1, 2013.

A set of procedures in which an appraiser derives a value indication for income-producing DATE OF REPORT property by converting anticipated benefits into property value. This conversion is accomplished either by 1) capitalizing a single year’s income expectancy or an annual The date of this report is August 20, 2013. average of several years’ income expectancies at a market-derived capitalization rate or a OWNER OF RECORD capitalization rate that reflects a specified income pattern, return on investment, and change Refer to “Subject Property Description” of this report. in the value of the investment, or 2) discounting the annual cash flows for the holding period and the reversion at a specified yield rate. LEGAL DESCRIPTION

Net Lease, aka Triple Net (“NNN”) Refer to the “Subject Property Description” of this report. The term “net lease” used in this report is defined as: THREE YEAR SALES HISTORY A lease in which the lessee pays all property charges, e.g., taxes, insurance, assessments, and maintenance, in addition to the stipulated rent. Refer to the “Subject Property Description” of this report.

Sales Comparison Approach, aka Market Data Approach

The term “sales comparison approach, aka market data approach” used in this report is defined as:

A set of procedures in which an appraiser derives a value indication by comparing the

property being appraised to similar properties that have been sold recently, applying

appropriate units of comparison, and making adjustments, based on the elements of

comparison, to the sale prices of the comparables.

PROPERTY RIGHTS APPRAISED

The property rights being appraised for the developer owned property are fee simple interest subject to existing easements of record and subject to CFD No. 1. The definition of “fee simple estate” is:

“Possession of a title in fee established the interest in property known as the fee simple estate, i.e., absolute ownership unencumbered by any other interest of estate, subject to the

limitation imposed by the governmental powers of taxation, eminent domain, police power, and escheat.”2

2 Appraisal of Real Estate, 11th Edition

As previously stated, the purpose of this appraisal is to report the appraiser’s best estimate of 1. Compiled demographic information and related such data to the subject project in order to market value for the subject project. This appraisal will be presented in the format described determine a feasibility/demand analysis. below. 1. A regional and city description followed by a description of the immediate area 2. Gathered and analyzed information on the subject marketplace, including reviewing several surrounding the subject project. brokerage house publications on historical and projected growth in the subject market, 2. A Ventura County residential, commercial, and apartment market description. researching the microeconomics and macroeconomics within Ventura County. 3. Description of RiverPark Specific Plan. 3. Inspected the subject project on numerous occasions from May 2013, through August 2013.

4. Description of Community Facilities District No. 1. 4. Interviewed the master developer (i.e. RiverPark Legacy, LLC).

5. Description of the subject project. 5. Interviewed City of Oxnard representatives regarding the subject project. 6. Analysis of the Highest and Best Use for the subject project. 6. Interviewed the developer and/or the authorized agent regarding the current status of the site 7. A separate description for each section, as described in the letter of transmittal. development. 8. Analysis and valuation of the subject properties. 7. Searched the area for comparable sales, inspected, and verified the relevant data.

9. Summary of the report. 8. Reviewed report prepared by Empire Economics, “Market Absorption Study, CFD No. 1, Special Tax Bond, Rio School District, Ventura County, California dated June 17, 2013 (“MAS”). 9. Prepared statistical analysis and compared assessed value to individual SFA and SFD that had been levied a special tax for 2012-2013. 10. Reviewed and collected multi-family apartment sales and rentals. 11. Reviewed and collected commercial rents and sales. 12. Reviewed and collected theater rents and sales. 13. Reviewed photographs of the subject project (aerial and ground). 14. Participated in meetings regarding CFD No. 1 with special tax consultants, Dolinka Group, the master developer, and their consultants. 15. Surveyed developers, brokers, and appraisers regarding changing market conditions, expected rates of return, and sales activity for commercial and residential market.

RiverPark Map Oxnard is the most populous city in Ventura County and the 19th most populous in the state of California with just over 200,000 residents. The City of Oxnard lies on the western edge of the fertile Oxnard Plain with the City of Ventura directly to the northwest and the City of Camarillo directly to the southeast; Los Angeles lies approximately another 60 miles southwest of Oxnard, while Santa Barbara lies approximately another 30 miles northwest of Oxnard. Oxnard was incorporated as a California city in 1903 and has always maintained a strong identity as an agricultural area. Naval bases at Point Mugu and Port Hueneme were established during World War II as the only major navigable ports between Los Angeles and San Francisco. Port Hueneme is the busiest and only deep-harbor commercial port in this span and is vital to trade with Pacific Rim economies.

Also within proximity to the subject property is Wagon Wheel Plaza Shopping Center, an older 60-acre site north of the subject properties that began development in the 1950s and represents older, mixed uses including, but not limited to, industrial, motel, and recreation (bowling alley, skating rink, fitness facilities). Redevelopment is occurring and 1,500 units of high density housing are being planned for this area.

The subject properties are located on the north side of Highway 101 between Vineyard Avenue and the Santa Clara River. The site combines the original “Oxnard Town Center” in the southern portion of the project and Southern Pacific Milling Properties in the northern portion of the project. Located within the southern portion of this project are two office buildings (not part of CFD No. 1). The Oxnard Town Center was a Specific Plan that was adopted by the City of Oxnard in 1986. This Specific Plan was to allow for 4.4 million square feet of commercial and industrial space, and was planned for multiple use business and commercial developments. At one time, it was envisioned as a regional commercial center site; however, due to the renovated

Pacific View Mall in Ventura and the demise of The Esplanade across the street, the economic reality of developing the site into a regional mall became a moot point. As a result, a new RSP Summary Appraisal Report – Complete Appraisal Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Community Facilities District No. 1 Special Tax Bonds, Series 2013 Special Tax Bonds, Series 2013 Rio School District Rio School District Bruce W. Hull & Associates, Inc. Page 10 Bruce W. Hull & Associates, Inc. Page 11 RIVERPARK SPECIFIC PLAN school on a joint site with associated open space / parks. Planning District L contains the East The RSP consists of 13 Planning Districts which have initially been designated for residential Detention Basin, part of the storm water quality treatment system, as well as a site for a new neighborhoods, retail centers, hotel / conventions centers, elementary (two) and secondary joint City / County fire station (completed). Planning District M contains the mine pits (being schools, and a complete system of parks and play fields. The core of the community is reclaimed) that will be used for water storage / recharge basin which are subject to the provisions residential neighborhoods, for which the RSP approved 3,043 residential units with a wide of a new mine reclamation plan. In addition, Planning District M will contain a new detention variety of detached and attached product type. Fourteen percent (14%) of the residential units basin and dry swales. were designated as affordable. The RSP allows for up to 2,098,000 sq. ft. of retail / hotel / The following is a recap of the RSP, or the changes to the original RiverPark Specific Plan convention office uses. A storm water control system accommodates flows from within and Documents: outside the property. The existing sand and gravel pit sand related surface facilities are in the Specific Plan Revision Number / Date Summary of Revisions process of being reclaimed and will offer a water amenity for the area. For details of the Specific Plan No. 1 / April 2009 Allows Freeway- oriented pylon signage. Specific Plan No. 2 / June 2011 Allows three freeway-oriented monument signs planning areas, please see the matrix chart on P. 27 in the section below entitled “Subject and electronic display signage (LED). Property Description.” Specific Plan No. 3 /June 2012 Allows increase of maximum 212 additional high density units in District D, maximum 3,043 residential units for the RSP area. The RSP, as approved, contains two major sub-areas that are referred to as RiverPark A and Development Agreement (“DA”) RiverPark B. RiverPark A will contain a mix of retail, office, hotel / convention, and residential DA Revision Number / Date Summary of Revisions uses. The RSP reduces the approximately 4.4 million sq. ft. of retail uses allowed by the Oxnard DA No. 1 / December 2004 Incorporated properties acquired by RP “A” and RP “B” within the Specific Plan area after the Town Center Specific Plan to 2,098,000 sq. ft. Planning District D includes regional and effective date of the DA. neighborhood oriented retail, as well as an entertainment retail area emphasizing local and DA No. 2 / July 2006 Allowed the ability to locate a multiplex theatre in District D commercial area. regional culture and interest known as The Collection. The RSP allows for development of DA No. 3 / October 2010 Maintained certain development fees at current levels for an extended period of time. Market alternate uses in two planning areas: rate and affordable residential until Jan. 6, 2014; Residential: Medium uses instead of the school / community park use allowed in commercial retail until Jan. 6, 2016. Planning District G, the Village Square Neighborhood District; DA No. 4 / June 2012 Implemented Specific Plan Amendment No. 3 and establishment of additional fees and Residential: Medium uses instead of the school / community park use allowed in exactions for increase in high density units in Planning District J, the RiverPark Mews Neighborhood District. District D.

RiverPark B contains residential, open space, and public facilities uses. The El Rio Detention Basin No. 2 is located in this area and is being filled and reclaimed. Residential neighborhoods have been developed in Planning Districts I, J, and K. Commercial live / work uses are allowed on the first floor of multi-unit residential buildings in limited areas of Planning Districts I, J, and

K. Planning District J was designated and constructed for a new elementary school and middle

Owner Participation Agreement (“OPA”) Flood Hazard OPA Revision Number / Date Summary of Revisions With respect to all of the properties located within RiverPark, while they share the same OPA First Amendment /November 2002 Provides procedure to assign and transfer parcels within Redevelopment Area and update schedule flood hazard risk which is unclear at this time due to ongoing bureaucratic stagnancy since of performance. 2009, they have been permitted. The County of Ventura (“County”) Watershed Protection OPA Second Amendment / December 2004 Provides certain rights and obligations for entities ED, LLC, KOH, LLC, and RPP, LLC for Department (“WPD”) provided a status report on September 15, 2009, to the Board of properties within Redevelopment Area. Supervisors that stated the Santa Clara levee adjacent to RiverPark based on FEMA OPA Third Amendment / August 2007 Relocates hotel site from Planning District C to Planning District D, and modifications to Regulation 44 of the Code of Federal Regulations §65.10 (“44 CFR 65.10”) cannot be schedule of performance of the hotel site. Revises the definition of hotel size to certified at this time. 44 CFR 65.10 provides the minimum design, operation, and approximately 320 rooms. maintenance standards levee systems must meet and continue to meet in order to be OPA Fourth Amendment / Nov 2007 Provides financing for public parking structure in the Redevelopment Area in District D. recognized as providing protection from the base flood on a Digital Flood Insurance Rate OPA Fifth Amendment / May 2010 Relocates hotel site to a portion of Planning Map (“DFIRM”). Levee owners must provide appropriate data and documentation to District C and allows for Target retail store in a portion of District D. demonstrate the levee is compliant with 44 CFR 65.10 requirements in order for the levee to be certified. The County WPD was required to submit a report to FEMA by November 30, 2009, on the certification status of the levee. As of this date, there has been no confirmation that such a report has been filed. The United States Corps of Engineers (“Corps”) has reviewed the County’s report. County and City of Oxnard staff have been working with Corps on this situation. The revision to the DFIRM maps has been delayed until the Santa Clara River study is complete. According to RiverPark Legacy, this is anticipated to occur sometime in 2013 or 2014. If there is not a solution at that time, it is anticipated that there would be revisions to DFIRM flood rate map revision. It is anticipated that a portion of RiverPark would be subject to inclusion in a 1% Annual Chance Flood Zone. Once the DFIRM is revised, there would be a requirement for flood insurance for constructed properties within the 1% Annual Chance Flood Zone for those properties that have a mortgage with a federally regulated lender. According to City officials, there are currently no restrictions on building permits although if their study of the Santa Clara levee reveals that it is in a 100 Year Flood Plain, the issuance of building permits may be reviewed. Again, the parcels that are the subject of this appraisal have been permitted.

RESIDENTIAL, MULTI-FAMILY, COMMERCIAL AND OFFICE MARKET DISCUSSION recently as the middle of 2011, the Fed stated officially that its present Interest Rate For purposes of evaluating the current residential, office, and retail markets, the following Policy (“IRP”) would extend until economics dictate change. A 0% interest rate has reports and studies were taken into consideration: allowed those lenders in the marketplace to keep 30 year mortgage rates in the 4% 1. MAS for RiverPark prepared by Empire Economics, dated June 17, 2013. range, rates not seen since the early 1970’s. 2. Reviewed DataQuick Statistics for Ventura County, and the cities of Ventura and • According to DataQuick in its March 13, 2013, report titled “Southland Oxnard, May, 2013. Begins 2013 with Sales and Price Gains vs. Year Earlier”, absentee buyers, mostly 3. CoreLogic’s ‘The MarketPulse’ with Quarterly Executive Letter, Volume 2, Issue 3, investors and some second home purchasers, bought a record 31.4% of the homes dated March 2013. sold in the Southland in February. Buyers paying with cash accounted for 35.6% of 4. CoreLogic’s report that 61,000 foreclosures were completed in January as described last month’s home sales. The share of homes that were flipped in March of 2013 has in ‘The Foreclosure Inventory Has Fallen Year Over Year for 15 Consecutive Months,’ dated risen to 6.9% of all homes sold on the open market. This is up from a flipping rate of February 28, 2013. 6.6% in January of 2013. 5. Reviewed commercial, apartment, and residential reports from REIS Reports. • CoreLogic, in February 2013, reported that a smaller inventory of houses is 6. State of the Nation’s Housing – 2012, Joint Center for Housing Studies by Harvard partially the result of fewer foreclosed houses or distressed properties entering the University, 2012. marketplace. Approximately 1.2 million homes were in some stage of foreclosure in 7. Survey of land brokers, principals, and appraisers regarding changed market the U.S. as of January 2013, compared to 1.5 million in January 2012, a 21% year- conditions, expected rates of return, and sales activity for blue-top and finished lots for over-year decrease which was the 15th consecutive month with a year-over-year detached and attached single-family residential subdivisions. decrease. • USA Today on March 28, 2013, reported that the Millennials (or Generation Reports and Studies Summary Y, the oldest in their early 30’s and the youngest age 12) who form the largest Data Quick reported that the median price of a house in Ventura County was $425,000 in demographic wave in the nation’s history, even larger than the Baby Boomers, are May 2013, an 18.6% increase from May 2012. The City of Oxnard’s median price was now coming of age for home ownership. Having now found jobs and wanting to $320,000, a 12.8% increase from May 2012. The City of Ventura’s median price was move out of their parent’s houses, they will potentially be a buying force in the $415,000, a 22.42% increase from May, 2012. marketplace. In early 2013, Core-Logic reported that the median price for California as a whole had the • Per the UCLA Anderson Report on April 3, 2013, a key feature of this year’s fourth biggest gain in the U.S. at 14.1%. forecast is the acceleration in the rate of job creation and the steady decline in the A number of factors are leading this recovery including, but not limited to, the current unemployment rate. According to this report, the housing sector continues to Federal Reserve (“Fed”) position on interest rates, low home mortgage interest rates, a large generate new momentum with the steady improvement in the numbers of number of cash buyers, a decrease in the inventory of houses for sale and resale, the homebuyers. The once ominous shadow inventory3 is rapidly diminishing, and may emerging generation of potential young buyers – the Millennials, and lower unemployment no longer be a problem for the housing market. Consequently, fewer homeowner rates. • On December 16, 2008, the Fed reduced the official U.S. interest rates to a range of 0 - .25% and left it in place for the entire year of 2009. For the years 2010,

2011, 2012, and the first quarter of 2013, the Fed has left the interest rate at 0%. As 3 A term that refers to real estate properties that are either in foreclosure and have not yet been sold or homes that owners have delayed putting on the market until prices improve (www.investopedia). Summary Appraisal Report – Complete Appraisal Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Community Facilities District No. 1 Special Tax Bonds, Series 2013 Special Tax Bonds, Series 2013 Rio School District Rio School District Bruce W. Hull & Associates, Inc. Page 16 Bruce W. Hull & Associates, Inc. Page 17

Following is a chart of asking rents for office space in Oxnard. defaults and foreclosures are forecast for this year. In addition, the unemployment rate is forecast to average between 6% - 7% in 2013, and to be less than 6 % in 2014. Office Property Asking Rent - Lease Trends (Source: LoopNet, Jul. 2013) • Empire Economics has concluded in its report that “CFD No. 1 is situated in the City of Oxnard which has a somewhat higher unemployment rate; however, Ventura County and Santa Barbara counties, as a whole, have relatively low unemployment rates along with moderate employment growth. Since the demand for homes in CFD No.1 is driven by unemployment rates along with moderate employment growth in Ventura and Santa Barbara counties, as a whole, this will provide support for the currently active as well as the forthcoming projects in CFD No. 1.” • Multi-family apartments have shown strong growth and low vacancies. The rental survey I completed with the assistance of Jill Almonia indicated vacancy rates from 95% to 98%. Rental increases have occurred over the year with capitalization

rates for the purchase of apartments at historical lows. vs. 3 mo. The average asking rental rate per sq ft/year for Office • Retail is more of a challenge. The retail market, as indicated in the following Jul 13 prior Y-O-Y properties in Oxnard, CA as of Jul 13 was $22.95. This represents an increase of 3.2% compared to the prior 3 charts, demonstrates the current situation in Ventura County. - $20.43 +0.4% +1.2% months, with an increase of +9.3% year-over-year. County- State wide, average rental rates in Oxnard are +0.0% higher at - $21.39 per sq ft/year for Office properties currently for lease. $21.36 0.0% +0.4% Metro - $21.39 +0.0% +0.6% County

- $22.95 +3.2% +9.3% City

As can be seen, the office market currently has high vacancies; this indicates high supply and

low absorption for these uses in Ventura County. Following is a chart of asking rents for

retail space in Oxnard.

Following is a chart of asking rents for retail space in Oxnard. The apartment market has been strong and is expected to continue. The RSP currently has Retail Property Asking Rent - Lease Trends (Source: LoopNet, Jul. 2013) one 400 unit apartment project, with another 224 units under construction. The demand for high quality apartments is expected to continue. An affordable housing apartment project is also located within RSP. In contrast, the office market has a high vacancy rate and a low absorption rate due to the fact that office space located within a shopping center is atypical and located on the 2nd floor of the shopping center, a non-prime location for office uses. The subject properties do not have a significant amount of office space (approximately 51,000 sq. ft.) and this space is expected to absorb in the four year period as The Collection matures.

vs. 3 mo. Jul 13 prior Y-O-Y

- $19.98 +0.3% -0.9% State

- $20.81 -1.2% -4.3% Metro

- $21.00 -1.2% -4.1% County

The retail market is dependent upon a number of factors, not the least being the anchor tenants in the shopping center. In the case of the subject properties, there are very strong anchor tenants (Target, Whole Foods, REI, Cinemark Century Theater) and, as a result, these properties are expected to fare better than the typical retail center. I have relied on Empire

Economics’ MAS which expects the remaining space to absorb in 3+ years (I have considered four years in my analysis).

It is apparent from a review of the statistics, as well as a discussion with builders and brokers, along with a review of recent studies for CFD No. 1 by Empire Economics, that the residential market has rebounded from an extraordinary decline in real estate prices that began with the economic “melt down” of 2007. Furthermore, it appears that CFD No. 1 is well positioned to take advantage of the recovery occurring in the residential market.

COMMUNITY FACILITES DISTRICT NO. 1

On May 3, 2,005, the Rio School District (“District”) adopted Resolution 0405-25 which formed CFD No. 1 and authorized and levied a special tax for a bonded indebtedness in an amount not to exceed $75,000,000. The District was formed to levy a special tax on the subject properties within CFD No. 1 for purposes of financing school facilities.

On November 16, 2,005, the District issued Special Tax Bonds, Series 2005, in the amount of $30,725,000 pursuant to a resolution adopted on September 15, 2,005, by the District.

The CFD’S, a second bond, issue, the Special Tax Bonds, Series 2013 (“Series 2013 Bonds”), that was requested by the master developer, RiverPark Legacy LLC (“RiverPark Legacy”), in light of the development of the property that has occurred since 2,005, is now being considered by the District.

The following is Exhibit “A” from a settlement agreement between the District and RiverPark Legacy dated March 10, 2011, which summarizes the current status of the school situation within RiverPark. Following this exhibit is a summary of bond proceeds prepared by the Dolinka Group. The intended uses of the Series CFD 2013 Bonds and the facilities funded are set forth in the “Reconciliation of Budgeted Costs, Actual Costs, and Reimbursements to Date” provided by the Dolinka Group which immediately follows.

Rio School District Community Facilities District No. 1 x Recap of Proceeds – (share of bonds proceeds for the District per the Settlement Agreement) – Subject to Revision

Projected Bond Offering $25,500,000 Preliminary, subject to change. Estimated Bond Proceeds $30,446,151 Excludes issuance and bond related costs. School District Allocation $ 1,397,478 Per Exhibit “A” settlement agreement. Available for Construction $29,048,672 Funds available for completed construction Reimbursement reimbursement.

x Use of Proceeds

School Construction $27,869,140 Per Exhibit “A” settlement agreement (for Completed Subject to Rio Vista Middle School). Reimbursement $ 1,179,532 Remaining Series 2013 bond proceeds Contingency Amount available.

x Availability of Remaining Funds

Bond Authorization $75,000,000 Authorized May 2,005, by the District.

First Issuance $30,725,000 Authorized November 2,005, by the District. Remaining Authorized $44,275,000 Remaining authorized after Series 2005 bond issuance. $25,850,000 Proposed Series 2013 issuance. Projected Second Issuance $25,500,000. $18,425,000 Estimated remaining authorized after Series Remaining Authorized 2013.

Lot

SUBJECT PROPERTY DESCRIPTIONS 40 n ucted ecific ecific DKOH 5352-1. 5352-1.

square feet square The subject properties consist of single family attached (“SFA”), single family detached Map al density density and and constr mercial per tion A of Sp idential. ecific Plan ecific and its per RPL/E its per rtition o Agrmt Developer exercised Op Plan high res Completed/occupied entitlement Remaining 20,000 com Sp un Pa 3, Fin TBD design Project Comments TBD design Project TBD design Project (“SFD”), multi-family (“MF”), and commercial properties (“CP”). The SFA and SFD have age ge of n

been developed by three homebuilders: Standard Pacific Homes (“Standard Pacific”), Shea oot Square Square F Ra Units / SF

Homes (“Shea”), and Centex Development (“Centex”); Centex, however, is no longer an owner as it sold its undeveloped property to Corona RiverPark, LLC (“Corona RiverPark”). High Density MFA* Type of Type Units

Corona RiverPark constructed townhomes, but has opted to lease its product, as the owner ) 1 (

of wishes to delay selling its townhomes until such time as the market and sales prices improve. ved 400 Units Number RSP Appro

4, 5, 7 2, and

A matrix that describes the planning areas is included which indicates the following 5352-

03, - t 1, Lot 3 Lot d 8 ap DDR PZ05- 200 Tract 1, an 5352- Tract 1, Residential M Number 4334 Tract 5352-1 Tract Lo 6 neighborhoods within RiverPark as of August 20, 2013.

Serenade Project Name

& RiverPark ing, LLC

EDKOH EDKOH Builder RiverPark Pointe, LLC Land

Dwelling Units 440

RESIDENTIAL

Allowable

ted ted

ermit date

Commercial SF P to

Specific Commercial Commercial

104,000 478,000 456,000 Per

Max SF Plan

Complete Appraisal –

(“MFA”) 47.5 Gross Acreage 5.5 24.6

al rcial rcial

tel ripher strict Summary Appraisal Report – Complete Appraisal COMMERCIAL Mixed Use / Use Mixed Office Land Use West Pe Comm District / Convention Ho Di

Community Facilities District No. 1 Special Tax Bonds, Series 2013

Planning District B C A Rio School District 27 Page Inc. Associates, Attached *Multi-Family & Hull Appraisal Report Summary Community Facilities District No. 1 W. Special Tax Bonds, Series 2013 Rio School District Bruce Bruce W. Hull & Associates, Inc. Page 26 COMMERCIAL RESIDENTIAL Planning Land Use Gross Max Commercial Commercial Allowable Dwelling Units Builder Project Name Residential Number of Type of Square Comments District Acreage SF Per Specific SF Permitted Map Units Units Footage Plan to date Number Approved (1) Range of Units D Town Square 88.4 904,000 320-512 Commercial

Wolf Partners The Mosaic DDR PZ10- 224 High Density Wolf Partners, The 200- MFA Mosaic, Lot 12 and 06, Tract 13, under 5352- construction, 1, Lot 12 Anticipated opening and late Q3 2013 585,808 SOCM I, LLC The Collection DDR PZ06- Collection 200-15, Retail/Commercial Tract 5352- Center, various 1, Lot 9, 10, stages of base 13, 14, and building/Tenant 15 improvements / occupied 148,855 Target Target Center at DDR PZ 09- Completed / The Collection 140-29, Tract occupied 5352-1, Lot 10 Wolf Partners Tempo DDR PZ, 235 High Density Construction Tract 5352- MFA drawings in process 1, Lot 16 and 17 EDKOH Sonata DDR PZ10- 53 High Density DDR Design 200-11, MFA complete Tract 5352-1 Lot 17

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 28

COMMERCIAL RESIDENTIAL Planning Land Use Gross Max Commercial Commercial Allowable Dwelling Units Builder Project Name Residential Number of Type of Square Comments District Acreage SF Per Specific SF Permitted Map Units Units Footage Plan to date Number Approved (1) Range of Units E East 8.9 111,000 RiverPark Myrtle, RiverPark DDR PZ 13- Final Parcel Map LLC Gateway 200-08 & 13- No. 2,005-300-024 200-09 divides planning area into three parcels. DDR submittal for McDonald's site @ 3,500 sq. ft. F Vineyards 37.9 5,000 290-450 Neighborhood District Shea Homes Destination Tract 5536-1 54 SFA* 1,464 Affordable units, to completed/sold 1,716 Shea Homes Reflections Tract 5536-1 62 SFA 1,321 Completion of to Destination 1,475 neighborhood, market rate Centex Homes Trellis Tract 5536-2 56 SFA 1,664 Completed/sold to 2,096 Aldersgate Vista Urbana Tract 5781 156 SFA 981 toAffordable, 48 Investments 1,407units under construction, 48 units completed/sold

*Single Family Attached (“SFA”)

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 29 COMMERCIAL RESIDENTIAL Planning Land Use Gross Max Commercial Commercial Allowable Dwelling Units Builder Project Name Residential Number of Type of Square Comments District Acreage SF Per Specific SF Permitted Map Units Units Footage Plan to date Number Approved (1) Range of Units Cabrillo Economic Paseo Santa DDR PZ06- 140 High Density Affordable units, Development Clara 300- MFA completed/occupied 18, Tract 5352-1, Lot 19 G Village 53 15,000 325-425 Square Centex Homes Promenade Tract 5538-1 36 SFA 1,835 Completed/sold to 2116 Corona Pacific Promenade Tract 5538-1 80 SFA 1,835 Constructed as to condominiums for 2,116 rent, Corona Pacific acquisition from Centex Homes Centex Homes Lumineria Tract 5538-2 102 SFA 1,473 Completed/sold to 1,686 Corona Pacific Lumineria Tract 5538-2 84 SFA 1,473 Corona Pacific to acquisition from 1,686 Centex Homes Shea Homes Market Street Tract 5538-3 32 SFA 2,362 Completed/sold to 2,631 Shea Homes Boardwalk Tract 5538-3 81 SFA 1,800 77 units to completed/sold, 4 2,162 units remaining to build

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 30

COMMERCIAL RESIDENTIAL Planning Land Use Gross Max Commercial Commercial Allowable Dwelling Units Builder Project Name Residential Number of Type of Square Comments District Acreage SF Per Specific SF Permitted Map Units Units Footage Plan to date Number Approved (1) Range of Units RiverPark Legacy, Public Elementary school LLC Elementary design approved, School pending determination of need prior to any construction H RiverPark 78 425-455 Crescent Standard Pacific Pacific Crossing Tract 5643- 104 SFD 1,547 87 units 3,-6 to completed/sold, 17 2,097 units not permitted Centex Homes Westerly II Tract 5643-4 14 SFD 1,976 14 units to completed/sold 2,420 Corona Pacific Westerly II Tract 5643-4 69 SFD 1,976 Corona Pacific to acquisition from 2,420 Centex Homes, not permitted Corona Pacific Veranda Tract 5644-1 95 SFD 2,672 Map recorded, to improvement plans 2,968 approved and partially completed. Homes not permitted

Shea Homes Morning View Tract 5644-2 113 SFD 1,652 Not permitted, plans to in plan check 1,987 Shea Homes Sienna Tract 5644-3 91 SFD 2,130 Not permitted to 2,337 *Single Family Detached (“SFD”) Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 31 COMMERCIAL RESIDENTIAL PlanningLand Use Gross Max Commercial Commercial Allowable Dwelling Units Builder Project Name Residential Number of Type of Square Comments District Acreage SF Per Specific SF Permitted Map Units Units Footage Plan to date Number Approved (1) Range of Units I RiverPark 56.8 10,000 375-510 Standard Pacific Collage I Tract 5643-1 44 SFA 1,884 Completed/Sold to 2,617 Standard Pacific Collage II Tract 5643-1 60 SFA 1,884 Completed/Sold to 2,617 Standard Pacific Avenue II Tract 5643-1 32 SFA 2,137 32 Completed to 2,303 Standard Pacific Landing Tract 5643-2 78 SFA 1,050 Completed/Sold -5 to 1,658 Standard Pacific Waypointe Tract 5643-3 104 SFA 1,333 98 Units Completed, to 6 Units Under 1,765 Construction Shea Homes Meridian Tract 5643-2 87 SFA 1,301 Completed/Sold -5 to 1,980 Shea Homes East End Tract 5643-2 72 SFA 1,478 3 units completed -5 to (Model Home) 2,112

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 32

COMMERCIAL RESIDENTIAL Plannin Land Use Gross Max Commercial Commercial Allowable Dwelling Units Builder Project Name Residential Number of Type of Square Comments g Acreage SF Per Specific SF Permitted Map Units Units Footage District Plan to date Number Approved (1) Range of Units J RiverPark 61.4 10,000 220-310 Standard Pacific Celadon Tract 5537-1 68 SFD 1,535 Completed/sold to 2,084

Standard Pacific Avenue Tract 5537-1 28 SFA 2,137 Completed/sold to 2,303 Standard Pacific Daybreak Tract 5536-3 62 SFA 1,543 Completed/sold to , 44 units 1,662 Affordable, 18 units market rate RiverPark Legacy, Public Rio School District, LLC elementary Rio Del Mar School school completed/occupied RiverPark Legacy, Public middle Rio School District, LLC school Rio Vista School completed/occupied K Lakeside 20 5,000 80-112 Standard Pacific Avenue Tract 5537-1 13 SFA 2,137 Completed/Sold to 2,303 Centex Homes Westerly Tract 5537-2 55 SFD 1,979 Completed/Sold to 2,418 Shea Homes Tradewinds Tract 5537-3 19 SFD 2,263 Completed/Sold to 2,453

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 33 COMMERCIAL RESIDENTIAL Plannin Land Use Gross Max Commercial Commercial Allowable Dwelling Units Builder Project Name Residential Number of Type of Square Comments g Acreage SF Per Specific SF Permitted Map Units Units Footage District Plan to date Number Approved (1) Range of Units

L Public 13.6 RiverPark Legacy, City of Oxnard Tract 5352-1 Joint use Facility LLC and County of Lot 30 City/County fire District Ventura Fire station Station completed/occupied

Tract 5352-1 Project design TBD Lot 31 and M Water 206.3 RiverPark Legacy, Tract, 5643- Reclamation Storage / LLC 4, Tract Program under Recharge 5644-4 construction, Basin Detention basins under construction TOTAL 701.9 2,098,000 3,003 3043 units maximum allowable residential, 40 units not approved yet in Planning District A, 2,098,000 SF maximum allowable commercial

(1) The total number of units approved on the RSP is 3,043; the difference is on lot 3 in the mixed use / office space. Source: Shea Development Company.

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 34 survey for fiscal year 2013-2014 asofAug.28,2013: survey forfiscalyear2013-2014 The followingisasummary chartpreparedbytheDolinkaGroupwhichsummarizes thedevelopment Bruce W. Hull & Associates, Inc. Bruce W.Hull&Associates, Inc. Rio SchoolDistrict Special TaxBonds,Series2013 FacilitiesDistrictNo.1 Community Summary AppraisalReport Note: 2,045 units less 15 (The Collection & Target) indicates 2,030 residential units Note: 2,045unitsless15(TheCollection&Target) indicates2,030residentialunits – CompleteAppraisal Page35 The following is a summary chart prepared by Dolinka Group which summarizes the development DETAILED PROPERTY DESCRIPTIONS survey for fiscal year 2014-2015. These represent permits issued from January 2, 2013, to June 1, 2013. Following is a description of the subject properties.

As described in the letter of transmittal, these are presented in three sections: Section I, Section II, and Section III.

Note: 2,119 units less 16 (The Collection, H&M Building, Cinemark Century Theater, and Target) indicates 2,103 residential units.

Summary Appraisal Report – Complete Appraisal Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Community Facilities District No. 1 Special Tax Bonds, Series 2013 Special Tax Bonds, Series 2013 Rio School District Rio School District Bruce W. Hull & Associates, Inc. Page 36 Bruce W. Hull & Associates, Inc. Page 37 Section IA – Various Individually Owned APN’s Section IB – Apartment - Paseo Santa Clara (Affordable Housing Project) Location: Various APN’s located throughout RiverPark Specific Plan. Location: Easterly terminus of American River Park Court, RiverPark Specific Plan. APN’s: See list in the valuation section. APN: 132-0-320-035 and 132-0-320-045. Assessed Value Fiscal Year 2012-2013: $269,377,928. Assessed Value Fiscal Year 2012-2013: $10,160,185. Three Year Sales History: See list in the Valuation section. Three Year Sales History: There have been no transfers of this property within the last three years. Size/Shape: Various shapes. Size/Shape: The site is irregular and consists of 3.96 acres. Zoning: These properties are zoned and entitled for single family attached and single family Zoning: The property is zoned and entitled for multi-family housing and accommodates apartments. detached housing. Topography and Drainage: The entire site has been graded to finished lot condition for the Topography and Drainage: The homes have been built and the lots are level with the drainage apartment project drainage as it has been designed to be engineered into a street system. engineered into a master storm drain. Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone. Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone. Streets/Access: Street access is from RiverPark Blvd. and American River Court, with RiverPark Streets/Access: Access to these properties is through various streets that are part of the Blvd. being a major traffic artery. masterplan of RiverPark. Utilities: The following utility and public service companies and organizations provide services to Utilities: The following utility and public service companies and organizations provide services the subject property. to the subject property. Water/Sewer: City of Oxnard Water/Sewer: City of Oxnard Electricity: Edison Electricity: Edison Natural Gas: The Gas Company Natural Gas: The Gas Company Fire: City of Oxnard Fire: City of Oxnard Police: City of Oxnard Police: City of Oxnard Telephone: AT&T Telephone Company Telephone: AT&T Telephone Company School District: Rio School District and Oxnard Union High School District School District: Rio School District and Oxnard Union High School District Improvements: This is a high density affordable apartment project. There are 140 apartments in this Improvements: The improvements that have been constructed have occurred over the last 6 years building which was constructed in 2008. As this project is “affordable,” the rents are restricted to and are SFA and SFD residences. The typical construction is wood frame and stucco with concrete certain income levels and are not market rents. Current rental rates are set forth below. foundations and tile or composition roofs. The interior finish varies according to the product type, but consistent throughout are forced air units, carpeting and vinyl flooring, radius drywall, energy Plan Room Count Sq. Footage Affordable Housing Rent efficient dual pane vinyl windows, prewired for cable television and phone/computer, and high 1 2 Total: 1 bd, 1 br 750 sq. ft. $ 774 efficiency lighting. 2 3 Total: 2 bd, 1 br 1,000 sq. ft. $ 910 3 4 Total: 3 bd, 1 br 1,200 sq. ft. $ 1,054

Location: 700 Forest Park Blvd. at the NEC Forest Park Blvd. and Oxnard Blvd. 1 Bedroom x 1 Bath Property Name Size Rent $/sq.ft. APN: 132-0-110-335. Serenade at RiverPark 798 $ 1,289 $ 1.62 Tierra Vista 757 $ 1,332 $ 1.76 Assessed Value Fiscal Year 2012-2013: $83,068,300. Woodside Village Archstone Vanoni 728 $ 1,458 $ 2.00 Three Year Sales History: A grant deed was recorded September 3, 2010 (Document No. Arbors Parc Rose 988 $ 1,647 $ 1.67 0000132581), for the Serenade Apartments, but was not considered to be an arms-length transaction. Archstone Ventura 734 $ 1,545 $ 2.11 Ralston Courtyards 711 $ 1,407 $ 1.98 786 1,446 1.85 Size/Shape: The site is rectangular and consists of 14.26 acres. 2 Bedroom x 2 Bath (also includes 2x1 floor plans as marked) Property Name Size Rent $/sq.ft. Zoning: The property is zoned and entitled for multi-family housing and accommodates apartments. Serenade at RiverPark 1,077 $ 1,649 $ 1.53 Tierra Vista 1,059 $ 1,746 $ 1.65 Topography and Drainage: The entire site has been graded to finished lot condition for the Woodside Village 803 $ 1,569 $ 1.95 apartment project. Drainage for the project has been designed to be engineered into a street system. Archstone Vanoni 1,146 $ 1,812 $ 1.58 Arbors Parc Rose 1,292 $ 1,884 $ 1.46 Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone. Archstone Ventura 1,086 $ 1,869 $ 1.72 Ralston Courtyards 891 $ 1,175 $ 1.32 Streets/Access: Street access is from Oxnard Blvd. and Forest Park Blvd., both main traffic arteries. 1,051 1,672 1.60 3 Bedroom x 2 Bath Utilities: The following utility and public service companies and organizations provide services to Property Name Size Rent $/sq.ft. the subject property. The Vines at RiverPark 1,410 $ 2,324 $ 1.65 Serenade at RiverPark 1,261 $ 2,055 $ 1.63 Water/Sewer: City of Oxnard Tierra Vista 1,303 $ 2,219 $ 1.70 Woodside Village 1,150 $ 1,909 $ 1.66 Electricity: Edison Archstone Vanoni 1,337 $ 2,122 $ 1.59 Natural Gas: The Gas Company Arbors Parc Rose 1,527 $ 2,281 $ 1.49 Fire: City of Oxnard Archstone Ventura Police: City of Oxnard Ralston Courtyards Telephone: AT&T Telephone Company 1,329 2,133 1.61 School District: Rio School District and Oxnard Union High School District. *All numbers were multiple floorplans are available are averages.

Improvements: This is a garden mid-rise apartment project that consists of 400 apartment units occupying 395,618 sq. ft. The project is built over covered parking and has a variety of amenities -- pool, gym, picnic area, business center. There are 132 (1) bedroom apartments, 171 (2) bedroom apartments, and 39 (3) bedroom apartments. The apartments were built in 2008, and appear to be of good construction and maintenance. The project is currently 96% leased.

Section IIA- Gap Properties - Individual Homeowners (SFA and SFD Constructed but Market Section IIB - Gap Properties - Vista Urbana (Affordable Housing Project) Value Not Yet Reflected on Assessor Roll; Permitted as of 01.01.2013) Location: 360 RiverPark Blvd., RiverPark, Oxnard. Location: Various throughout RiverPark Specific Plan. APN: 132-0-110-515 (Portion). APN: See list in valuation section. Assessed Value Fiscal Year 2012-2013: $3,083,041 is assessed to the entire APN, which has Assessed Value Fiscal Year 2012-2013: See list in Valuation section. approvals for 156 units. Allocation of the assessed value for 48 units equals $948,628.

Three Year Sales History: See Valuation section. Three Year Sales History: See Valuation section.

Size/Shape: Varies. Size/Shape: Irregular.

Zoning: The property is zoned and entitled for single family attached and single family detached Zoning: The property is zoned and entitled for multi-family housing and accommodates housing. condominiums.

Topography and Drainage: The lots have been graded to finished lot condition for SFA and SFD Topography and Drainage: The lots have been graded to finished lot condition for SFA housing. housing. Drainage for the project has been designed to be engineered into a street system. Drainage for the project has been designed to be engineered into a street system.

Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone. Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone.

Streets/Access: Street access is from Oxnard Blvd. and Forest Park Blvd., both main traffic arteries. Streets/Access: Street access is from RiverPark Blvd. and American River Court, with RiverPark Blvd. being a main traffic artery. Utilities: The following utility and public service companies and organizations provide services to the subject property. Utilities: The following utility and public service companies and organizations provide services to the subject property. Water/Sewer: City of Oxnard Electricity: Edison Water/Sewer: City of Oxnard Natural Gas: The Gas Company Electricity: Edison Fire: City of Oxnard Natural Gas: The Gas Company Police: City of Oxnard Fire: City of Oxnard Telephone: AT&T Telephone Company Police: City of Oxnard School District: Rio School District and Oxnard Union High School District. Telephone: AT&T Telephone Company School District: Rio School District and Oxnard Union High School District. Improvements: These are Gap Properties and represent recently constructed SFA and SFD homes in RiverPark. The construction is new (2011 and 2012) and is of average to good construction. The Improvements: This a three story condominium development constructed with 48 units. Each of the typical construction is frame and stucco with concrete foundations and tile or composition roofs. buildings contains 12 units with Buildings 1 and 2 presently being occupied by homeowners, with The interior finish varies according to the product the exception of the models. Buildings 3 and 4 will be completed in or about July 2013, with all of type, but consistent throughout are forced air units, carpeting and vinyl flooring, radius drywall, the units being for sale. This is an affordable housing development and, as a result, the sales prices energy efficient dual pane vinyl windows, prewired for cable television and phone/computer, and of the units are restricted to low and moderate income. The buildings are of good construction with high efficiency lighting. frame and stucco composition and tile roofs. Interior details of the condominiums are central

heating, double-glazed windows, 9 foot ceilings, granite countertops, fire sprinklers, pre-wired for cable and Cat 5 computer network. There are five models.

Plan Room Count Sq. Footage Garage Current Prices 1 4 Total: 2 bd, 2 br 998 1 $ 141,500 2 4 Total: 2 bd, 2 br 1,025 1 $ 196,700 3 5 Total: 3 bd, 2 br 1,266 2 $ 223,900 4 5 Total: 3 bd, 2 br 1,347 1 $ 233,999 5 5 Total: 3 bd, 2 br 1,470 2 $ 235,999

Complete Appraisal Complete –

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013

Rio School District 45 Page Inc. Associates, & Hull Appraisal Report Summary Community Facilities District No. 1 W. Special Tax Bonds, Series 2013 Rio School District Bruce Bruce W. Hull & Associates, Inc. Page 44

Section IIC- Gap Properties - The Collection As indicated by the following leases, there have been major tenants that have executed leases and are now open for business, including Whole Foods and REI Stores. The total executed retail leases Location: East side of Oxnard Blvd., north of US Highway 101, RiverPark Specific Plan. consist of 169,580 square feet (excluding Cinemark Theaters and Target) and represent a current occupancy rate of 36% (rentable excluding Cinemark Theaters and Target). APN: 132-0-310-365. The following is a summary of executed leases. Note per Limiting Condition No. 19, no lease income Assessed Value Fiscal Year 2012-2013: $76,362,900. was provided to appraiser:

Three Year Sales History: There was a transfer that occurred July 27, 2010 (Document 100109442) Tenant GLA Executed Lease Date that indicated a sales price of $9,550,000. Conversations with Shea indicated that this was a Bank of America 5,000 06-05-2008 restructure of existing partnerships. Chase Bank ATM 120 10-24-2012 Cinemark Century Theatres 59,350 06-03-2008 Size/Shape: Irregular. Color Me Mine 965 05-05-2011 Famous Dave’s 6,000 12-17-2012 Zoning: The property is zoned and entitled for commercial and related uses. Five Guys Burgers & Fries 2,500 08-19-2011 Gandolfo’s NY Deli 1,357 09-04-2012 Topography and Drainage: The lot has been graded to a finished lot condition with buildings and Gen Korean BBQ 5,296 10-22-2012 parking lots constructed with drainage designed to flow into a master plan storm drain for RiverPark. H & M 25,112 Date Unknown Kabuki 4,000 01-20-2012 Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone. Massage Envy 2,963 05-26-2010 Menchie’s 1,252 07-29-2011 Streets/Access: Street access is from Oxnard Blvd. and RiverPark Blvd., both main traffic arteries. Panera Bakery Café 4,000 06-07-2012 REI 28,015 10-21-2008 Utilities: The following utility and public service companies and organizations provide services to the Republic of Couture 5,571 12-17-2012 subject property. Settebello Pizza 4,000 01-16-2013 Starbucks 1,528 12-07-2011 Water/Sewer: City of Oxnard Toby Keith’s 14,616 12-27-2012 Electricity: Edison Ulta 10,824 10-12-2012 Natural Gas: The Gas Company Whole Foods 35,500 07-31-2006 Fire: City of Oxnard Yard House 10,961 01-21-2013 Police: City of Oxnard Total Executed Leases 228,930 Telephone: AT&T Telephone Company School District: Rio School District and Oxnard Union High School District. It should be noted that Cinemark Century Theater (59,350 sq. ft.) is located on a separate APN. The executed leases attributed to The Collection are calculated below: Improvements: This is a shopping center that has been designed as a lifestyle center that features entertainment, retail, restaurants, open space with fountains, parks and playgrounds, and outdoor artwork. Constructed to Type II high standards, this center can be classified as a regional center 228,930 Per Shea which will attract people from Thousand Oaks to Santa Barbara. The outdoor lifestyle is a new concept for shopping centers, and the subject is unique due to its design, construction, and outdoor <59,350> Cinemark Century Theater parks and artwork. I have relied on the square footage from Shea (see Limiting Condition No. 19) which indicates a total of 582,134 sq. feet. Of the total square footage, 59,350 sq. ft. represents the 169,580 Executed Retail Leases, The Cinemark Theaters and is located on a separate APN, leaving the square footage for The Collection Collection Square Footage retail space and office space at 522,784 square feet. Thus, there is 471,423 square feet of retail space for which there are executed leases for 169,580 sq. feet as indicated below (36% occupancy). There is 51,361 sq. ft. of office space for which there are two executed leases (Fidelity Title Company and Management Company for The Collection) that total 13,046 sq ft. (25% occupancy). Summary Appraisal Report – Complete Appraisal Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Community Facilities District No. 1 Special Tax Bonds, Series 2013 Special Tax Bonds, Series 2013 Rio School District Rio School District Bruce W. Hull & Associates, Inc. Page 46 Bruce W. Hull & Associates, Inc. Page 47

Section IID- Gap Properties - Target Department Store Section IIE - Gap Properties - Cinemark Century Theater

Location: East side of Oxnard Blvd., north of US Highway 101, RiverPark Specific Plan. Location: 2766 Sea Glass Way, The Collection, RiverPark Specific Plan.

APN: 132-0-310-375. APN: 132-0-310-305.

Assessed Value Fiscal Year 2012-2013: $22,574,295. Assessed Value Fiscal Year 2012-2013: $6,936,000.

Three Year Sales History: There was a transfer that occurred July 2, 2010 (Document No. Three Year Sales History: There have been no transfers of this property within the last three 100197703), that indicated a sales price of $2,000,000. Conversations with Shea, the seller, indicated years. that this was not a market sale. Shea wanted to attract a major tenant to benefit its shopping center, The Collection, and as such, this sale was a “loss leader” according to seller’s representative. Size/Shape: The site is rectangular and consists of 1.83 acres.

Size/Shape: Irregular; 6.46 acres. Zoning: The property is zoned and entitled for commercial and related uses.

Zoning: The property is zoned and entitled for commercial and related uses. Topography and Drainage: The entire site has been graded to finished lot condition for the theater project that has been constructed on site. Drainage for the project has been designed to be Topography and Drainage: The lot has been graded to finished lot condition with buildings and engineered into a street system. parking lots constructed and drainage designed to flow into a master plan storm drain for RiverPark. Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone. Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone. Streets/Access: Street access is from RiverPark Blvd. and American River Court, with RiverPark Streets/Access: Street access is from Oxnard Blvd. and RiverPark Blvd., both main traffic arteries. Blvd. being a major traffic artery. The site is located on Seaglass Way, an interior street within The Collection. Utilities: The following utility and public service companies and organizations provide services to the subject property. Utilities: The following utility and public service companies and organizations provide services to the subject property. Water/Sewer: City of Oxnard Electricity: Edison Water/Sewer: City of Oxnard Natural Gas: The Gas Company Electricity: Edison Fire: City of Oxnard Natural Gas: The Gas Company Police: City of Oxnard Fire: City of Oxnard Telephone: AT&T Telephone Company Police: City of Oxnard School District: Rio School District and Oxnard Union High School District. Telephone: AT&T Telephone Company School District: Rio School District and Oxnard Union High School District. Improvements: This is a Target department store that consists of 148,855 sq. ft. The construction is Type I. The building consists of a paved concrete foundation with steel beams, a fire sprinkler Improvements: This is a 16-Screen Cinemark Theater that was constructed in Type II system, and a subterranean parking garage. The interior of the building has good finish that is typical Construction in 2007-2008 to state of the art for cinemas and opened in 2012. The building of this retailer. consists of 59,350 sq. ft. and seats 3,200 patrons. Each theater features stadium seating, large wall to wall and floor to ceiling screens, enhanced JBL sound systems, digital presentations, and “Digital 4k-Digital Projection” powered by Barco Projections which offers the brightest light standards in the industry. In addition, eight (8) of the auditoriums are Real-3D capable and there is a Cinemark XD Extreme Digital Cinema auditorium. All of the movies are provided in high frame rate (HFR), a new cutting edge motion picture format that is only offered in select theaters,

which presents pictures in forty-eight (48) frames per second, or at twice the rate of the worldwide Section IIF - Gap Properties - Avenue II cinema standard of twenty-four (24) frames per second. Location: West Side of Oxnard Blvd., North of Garonee St., RiverPark Specific Plan. There is a separate room for private parties and self-kiosks for refreshments. APN: 133-0-090-125 (8 units). A lease was executed in June 2008, but no information was provided to the appraiser. The grand opening of the theater occurred October 26, 2012. Assessed Value Fiscal Year 2012-2013: $818,944

Three Year Sales History: See Valuation section.

Size/Shape: Rectangular.

Zoning: The property is zoned and entitled for multi-family housing and accommodates townhouses.

Topography and Drainage: The lots have been graded to finished lot condition for SFA housing. Drainage for the project has been designed to be engineered into a street system.

Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone.

Streets/Access: Street access is from RiverPark Blvd. and American River Court, with RiverPark Blvd. being a main traffic artery.

Utilities: The following utility and public service companies and organizations provide services to the subject property.

Water/Sewer: City of Oxnard Electricity: Edison Natural Gas: The Gas Company Fire: City of Oxnard Police: City of Oxnard Telephone: AT&T Telephone Company School District: Rio School District and Oxnard Union High School District.

Improvements: This a townhouse project referred to as Avenue II. The buildings are of good construction with frame and stucco composition and tile roofs. Interior details of the condominiums are central heating, double glazed windows, 9 foot ceilings, granite countertops, fire sprinklers, prewired for cable and Cat 5 computer network. There are two models.

Plan Room Count Sq. Footage Garage Current Price 2A 7 Total: 3 bd, 3.5 br 2,327 2 $365,000 to $487,000 1A 8 Total: 4 bd, 3.5 br 2,192 2 $365,000 to $409,000

Section IIG - Gap Properties - The Vines with some minor modifications. It should be noted that the assessor has not yet changed the maps to Location: 3051 Oxnard Blvd., RiverPark Specific Plan. indicate the new units. The construction is frame and stucco, tile roofs, concrete foundation, wood floors, granite countertops, central heating and air conditioning, two car attached garage. APN: 132-0-280-275; 132-0-280-305; 132-0-280-315; 132-0-280-325; 132-0-280-335; 132-0-290-015; 132-0-290-025; 132-0-290-035; 132-0-290-045; 132-0-290-055; Plan Room Count Sq. Footage Garage Lease Rate 132-0-290-065; 132-0-290-195; 132-0-290-205; 132-0-290-215; 132-0-290-225; 1 5 Total: 3 bd, 2.5 br 1,301 2 $2,100 to $2,700 132-0-290-235; 132-0-290-245; 132-0-290-275; 132-0-290-285; 132-0-290-295; 2 5 Total, 3 bd, 2.5 br 1,375 2 $2,100 to $2,700 132-0-290-305; 132-0-300-015; 132-0-300-025; 132-0-300-045; 132-0-300-055; 3 5 Total, 3 bd, 2.5 br 1,554 2 $2,100 to $2,700 Presently, 35 of the 80 units have been leased. Assessed Value Fiscal Year 2012-2013: $2,550,000

Three Year Sales History: A grant deed recorded June 5, 2012 (Document No. 12010005) transferred and was a restructure of the partnership.

Size/Shape: Irregular.

Zoning: The property is zoned and entitled for multi-family housing and accommodates townhouses.

Topography and Drainage: The lots have been graded to finished lot condition for SFA housing. Drainage for the project has been designed to be engineered into a street system.

Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone.

Streets/Access: Street access is from Oxnard Blvd. and Garonee St., with RiverPark Blvd. being a main traffic artery.

Utilities: The following utility and public service companies and organizations provide services to the subject property.

Improvements: This is a townhouse development (80 units) that has been constructed and is currently being leased as rentals. Centex, the seller of the land, had marketed a project referred to as Promenade. The new buyer, Corona Pacific, has utilized this same building construction and design

Section IIH - Gap Properties - The Mosaic No. Units No. Bedrooms Sq. Footage 52 Studio 560 Location: Northeast corner of Oxnard Blvd and Forest Park Blvd, RiverPark Specific Plan. 72 1 745 20 1 730 APN: 132-0-230-145 and 155 42 2 1,006 20 2 988 Assessed Value Fiscal Year 2012-2013: $3,083,041 18 2 1,096

Three Year Sales History: A transaction occurred on March 15, 2012 for $9,632,000. This was the There are 291 parking spaces, with 250 spaces for garages, 108 carports, 9 on-site parking spaces, and acquisition of the land and sold with entitlements for a 224 unit apartment complex. 58 parking spaces on the street.

Size/Shape: Rectangular. 6.26 acres of level land, indicating a density of 35.78 (units per acre). Amenities include a swimming pool, and fitness room.

Zoning: The property is zoned and entitled for multi-family housing and accommodates apartments; it According to Developer’s representations, there is an estimated $11,000,000 remaining to be spent to is presently under construction. complete the buildings. He also indicated there have been no leases signed and they anticipate first move-in to be December 2013. No rents have been established as of the date of this appraisal. I have Topography and Drainage: The lots have been graded to finished lot condition for SFA housing. estimated fair market rents and these are listed in the valuation section of this report for The Mosaic. Drainage for the project has been designed to be engineered into a street system.

Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone.

Streets/Access: Street access is from Oxnard Blvd and Forest Park Blvd, with both being a main traffic arteries.

Utilities: The following utility and public service companies and organizations provide services to the subject property.

Water/Sewer: City of Oxnard Electricity: Edison

Natural Gas: The Gas Company Fire: City of Oxnard Police: City of Oxnard Telephone: AT&T Telephone Company School District: Rio School District and Oxnard Union High School District.

Improvements: This is a three story apartment development under construction for 224 units. The buildings are of good construction with frame and stucco composition and tile roofs. Interior details of the apartments are central heating, double-glazed windows, fire sprinklers, and interior detail above average.

Section IIIA - Gap Properties - Individual Homeowners (SFA and SFD Constructed but Market Section IIIB - Gap Properties - Vista Urbana Condominiums (Affordable Housing) Value Not Yet Reflected on Assessor Roll; Permitted 01.02.2013 through 06.01.2013) Location: 361 RiverPark Blvd. (Model Home), RiverPark Specific Plan. Location: Various throughout RiverPark Specific Plan. APN: 132-0-110-515 (Portion) APN: See list in valuation section. Assessed Value Fiscal Year 2012-2013: $3,083,041 is assessed to the entire APN which has Assessed Value Fiscal Year 2012-2013: See list in Valuation section. approvals for 156 units. Allocation of the assessed value for 48 units = $948,628.

Three Year Sales History: See Valuation section. Three Year Sales History: There are 48 units that under construction. 24 units are nearing completion, with the remaining 24 scheduled to be completed November, 2013. All of the units are Size/Shape: Varies. under contract.

Zoning: The property is zoned and entitled for single family attached, and single family detached Size/Shape: These are condominium units with each unit allocated .046 acres. housing. Zoning: The property is zoned and entitled for multi-family housing and accommodates Topography and Drainage: The lots have been graded to finished lot condition for SFA and SFD condominiums. housing. Drainage for the project has been designed to be engineered into a street system. Topography and Drainage: The lots have been graded to finished lot condition for SFA housing. Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone. Drainage for the project has been designed to be engineered into a street system.

Streets/Access: Street access is from Oxnard Blvd. and Forest Park Blvd., both main traffic arteries. Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone.

Utilities: The following utility and public service companies and organizations provide services to the Streets/Access: Street access is from RiverPark Blvd, a main traffic artery. subject property. Utilities: The following utility and public service companies and organizations provide services to the Water/Sewer: City of Oxnard subject property. Electricity: Edison Natural Gas: The Gas Company Water/Sewer: City of Oxnard Fire: City of Oxnard Electricity: Edison Police: City of Oxnard Natural Gas: The Gas Company Telephone: AT&T Telephone Company Fire: City of Oxnard School District: Rio School District and Oxnard Union High School District. Police: City of Oxnard Telephone: AT&T Telephone Company Improvements: These are Gap Properties and represent recently constructed SFA and SFD homes in School District: Rio School District and Oxnard Union High School District. RiverPark. The construction is new (2013) and is of average to good construction. The typical construction is frame and stucco with concrete foundations and tile or composition roofs. The interior Improvements: This is a three story condominium development under construction for 48 units in 4 finish varies according to the product type, but consistent throughout are forced air units, carpeting 12 unit buildings with each unit having the same model. The buildings are of good construction with and vinyl flooring, radius drywall, energy efficient dual pane vinyl windows, prewired for cable frame and stucco composition and tile roofs. Interior details of the condominiums are central heating, television and phone/computer, and high efficiency lighting. double-glazed windows, fire sprinklers, pre-wired for cable and Cat-5 computer network. There are five models. Two of the buildings are nearing completion, with the balance of the project anticipated to be completed in November 2013.

Plan No. Units No. Bedrooms Sq. Footage Current Prices Section IIIC - Gap Properties - East End Condominiums – AGS Meridian, LLC (Shea Homes) 1 2 2 bd, 2 br 998 $ 141,500 2 4 2 bd, 2 br 1,025 $ 196,700 Location: Northeast corner of Oxnard Blvd and Kiawah River Drive, RiverPark Specific Plan. 3 2 3 bd, 2 br 1,266 $ 223,900 4 2 3 bd, 2 br 1,347 $ 233,999 APN: 132-0-100-105 (Portion). 5 2 3 bd, 2.5 br 1,470 $ 235,999 Assessed Value Fiscal Year 2012-2013: $690,194, of which $200,000 is allocated for three units. Plan 1 has one assigned parking space, Plan 2 has a 1 car garage, Plans3 and 5 have 2 car garages, and Plan 4 has one car garage. Three Year Sales History: There have been no transactions within the last three years.

A park is being constructed within the 156 unit condominium project for common area amenities Size/Shape: .365 acres of land. Rectangular and level.

Developer’s representative has estimated the cost to complete the last two building to a finished Zoning: The property is zoned and entitled for multi-family housing and accommodates condition as being $1,000,000. condominiums; it is presently under construction and nearing completion.

Per the developer, all of the units have been pre-sold. Topography and Drainage: The lots have been graded to finished lot condition for SFA housing. Drainage for the project has been designed to be engineered into a street system.

Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone.

Streets/Access: Street access is from RiverPark Blvd. and Kiwah River Drive, with both being main traffic arteries.

Utilities: The following utility and public service companies and organizations provide services to the subject property.

Improvements: This is the model home complex that is being completed for the East End SFA development that will be developed by Shea Homes. There are three models which range from 1,478 to 2,112 square feet.

The construction is wood frame and stucco with tile roofs on a post tension concrete foundation. There are 6 panel 8” Thermatru entry doors with Schlage deadbolts, attached 2 car garages, and insulated garages with 2 transmitters. Fire sprinklers are located throughout the units. The interior of the units have thermofoil raised panel cabinetry with white finish and concealed hinges. Appliances are Whirlpool stainless steel which includes four burner gas range stoves, microwaves with hoods,

and multi-cycle dishwashers. In the kitchen there are granite countertops, ceramic flooring and tile in Section IIID - Gap Properties - Waypointe Condominiums-Standard Pacific select areas, and textured finish 4 panel Craftmaster interior doors. In addition, there are advanced pre-wiring packages for Category 5e and coaxial cables for phone and television for each bedroom. Location: Lisbon Lane (Phase 15), RiverPark Specific Plan.

Plan Room Sq. Footage Garage Current Prices Assesor’s Parcel No.: 133-0-300-345; 133-0-300-355; 133-0-300-365; 133-0-300-375; 1 3 bd, 2 br 1,478 2 $ 289,900 133-0-300-385; 133-0-300-395. 2 3 bd, 2.5 br 1,944 2-Private courtyard $ 342,100 3 4 bd, 3 br 2,112 2-Private courtyard $ 369,900 Assessed Value Fiscal Year 2012-2013: $892,182.

Three Year Sales History: There have been no transactions within the last three years.

Size/Shape: These are condominiums occupying .0384 acres.

Zoning: The property is zoned and entitled for multi-family housing and accommodates condominiums; it is presently under construction and nearing completion.

Topography and Drainage: The lots have been graded to finished lot condition for SFA housing. Drainage for the project has been designed to be engineered into a street system.

Seismic & Soils: The site is not located in a designated Alquisit-Priolo earthquake fault zone.

Streets/Access: Street access is from RiverPark Blvd. and Kiwah River Drive, with both being main traffic arteries.

Utilities: The following utility and public service companies and organizations provide services to the subject property.

Improvements: This is the last phase of the condominiums (Waypointe) that is being developed by Standard Pacific Homes. The condominiums range from 1,388 to 2,112 sq. feet.

select areas, and textured finish 4 panel Craftmaster interior doors. In addition, there are advanced HIGHEST AND BEST USE ANALYSIS pre-wiring packages for Category 5e and coaxial cables for phone and television for each bedroom.

The “Highest and Best Use” is a concept in real estate valuation that represents the underlying Plan Room Sq. Footage Garage Current Prices 6A 3 bd, 3.5 br 1,864 2 $ 373,900 premise upon which the estimate of value is based. In this report the highest and best use is 1A 2 bd, 2 br 1,388 2 $ 328,900 defined as: 2A 3 bd, 2 br 1,437 2 $ 350,900 2A 3 bd, 2 br 1,487 2 $ 356,900 “The reasonably probable and legal use of vacant land or improved property which is 5A 3 bd, 2.5 br 1,671 2 $ 359,900 physically possible, appropriately supported, financially feasible, and that results in the 3A 3 bd, 2 br 1,437 2 $ 350,900 highest value”4. These units are nearing completion with interior flooring and granite countertops remaining to be installed. A representative from the builder indicates $15,000 per unit to complete these units. They Proper application of this analysis requires the subject properties to first be considered as if are anticipated to be completed at the end of August, 2013. One of the units is scheduled to close vacant in order to identify the “ideal” improvements in terms of use, size, and timing of August 31, 2013, and the balance of the units are being offered for sale. development. The existing improvements, if any, are then compared to the ideal improvements to determine if the use should be continued, altered, or demolished, preparatory to redevelopment of the site with a more productive or ideal use.

The following analysis considers the site’s (a) probable use – i.e., those uses which are

physically possible, (b) the legality of use – i.e., those uses which are allowed by zoning or deed restrictions, (c) the financially feasible use – i.e., those uses which generate a positive return on

investment, and (d) the maximally productive use – i.e., those probable permissible uses which

combine to give the owner of the land the highest net return on value in the foreseeable future.

As Vacant

Physically Possible Uses

The subject properties are a part of the RiverPark Specific Plan. Presently, the majority of the site has been improved to contain homes, with the balance in a graded condition and a number of

lots in finished condition. All drainage courses will ultimately be channelized.

Backbone utilities have been completed on the majority of the site. Unsuitable soils have been over-excavated and removed from the site to accommodate engineered structures. It is further assumed that there are no environmental issues that would slow or thwart development of the subject site.

The site is presently accessible to the public via Oxnard Blvd.; internal roads have been completed throughout RiverPark as of the valuation date.

4The Appraisal of Real Estate, 11th Edition, 1996 Summary Appraisal Report – Complete Appraisal Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Community Facilities District No. 1 Special Tax Bonds, Series 2013 Special Tax Bonds, Series 2013 Rio School District Rio School District Bruce W. Hull & Associates, Inc. Page 62 Bruce W. Hull & Associates, Inc. Page 63

The physical condition of the site has been tailored for single family residential development and Master planned communities combine different densities and lot sizes to maximize the different urban activity, i.e., apartment, neighborhood, commercial, and compatible uses. The majority of market demands for lands in those communities. the land has been graded to a finished lot or blue top condition. Conclusion – As Vacant Based on this analysis, the subject parcels are suitable for various land uses; however, the The final determinant of highest and best use as vacant is the interaction of the previously physical condition suggests residential development, commercial, multi-family. discussed factors (i.e., physical use, legal use, financial feasibility, and maximum productivity). Based upon the foregoing analysis, it is my opinion that the highest and best use for the subject Legality of Use The subject project is located within the boundaries of the City of Oxnard, the entity responsible properties, as vacant, are for the proposed development of single-family detached homes, for regulating land use through the implementation of a general plan and zoning ordinance. As condominiums, and apartments, and compatible commercial uses to support the residential discussed in the RSP section, there has been a litany of entitlements and environmental permits communities. issued in order to develop the property. As If Improved

Based on the legality of use analysis, the type of development for which the subject properties The subject properties have been improved with SFA and SFD homes, apartments, and can be utilized is limited to the uses specified in the RSP. This is consistent with the possible commercial buildings that range from new to five years old. The construction is good. physical uses of the site. The functional design is considered good. The remaining economic life of these improvements ranges from 55 to 70 years. The existing uses are considered the highest Feasibility of Development The third and fourth considerations in the highest and best use analysis are economic in nature, and best uses. i.e., the use that can be expected to be most profitable. Residential subdivisions re-emerged in the subject marketplace after the early 1990’s recession. The late 1,980’s were characterized by rapidly escalating prices, good presale activity, and a strong resale market permitting move-up buyers. From 1999 – 2007, the market saw a lessoning of supply which created significant appreciation in land prices and a substantial increase in new homes prices in the marketplace.

The 2007 real estate meltdown had lasting effects on the housing market that dramatically negatively impacted it for years. Only recently has there been positive news on the housing market. The current new home market in the Ventura County marketplace is considered to be rebounding (see Residential, Commercial, Multi-Family Office Market Discussion section).

Economic feasibility is based upon whether there is sufficient demand that produces the highest present site value.

Maximally Productive

In light of the current sales activity in the marketplace, coupled with the aforementioned discussion, it is my opinion that the subject properties produce the maximum productivity on the lands as single-family detached and attached homes, along with apartment and commercial uses.

report the values on several parcels. Both the market approach and the discounted cash flow VALUATION analysis were considered in this section. The valuation section will be presented consistent with the description of the property. The Section IIH refers to The Mosaic apartment project, currently under construction. The 224 unit methodology for the valuation will vary to each section. apartments were valued as if complete and at 95% occupancy. A deduction for the cost to Section IA will consider a statistical analysis to determine if the assessed value is representative complete and time for absorption and risk to achieve 95% was deducted from the stabilized value of market value. to arrive at an “as-is” value. Section IB consists of two apartment complexes; of those, one is an affordable housing complex Section IIIA refers to “Gap Properties” that have not yet reflected on the assessor roll as mark of and the rents are restricted by the income levels of the tenants; the other is a 400 unit apartment value. This was a result of a SFA or SFD being vacant land as of this lien date of January 1, complex which will be valued with the income and market approach. The independent value 2013 (all of these “Gap Properties” were permitted after January 1, 2013). Subsequently, a SFA conclusion for the 400 unit apartment complex will be compared to the assessor’s value for this or SFD was constructed and sold to an individual homeowner. The market data was considered APN to determine if the assessor’s value is representative of market value. in this section. Section IIA represents “Gap Properties” that have not yet reflected on the assessor’s roll as Section IIIB refers to 48 units in Vista Urbana. Two of four condominium buildings have market value. This was a result of the SFA or SFD being partially complete or vacant land at the recently been completed. The condominiums were valued on the basis of sales (all have been lien date; subsequently, a SFA or SFD has been constructed. The market data approach was pre-sold) since this is an affordable subject housing development. A deduction for the cost to considered in this section. complete and risk was deducted from the value. Section IIB refers to an affordable condominium project, Vista Urbana. This is also considered a Section IIIC represents the model home complex for East End. These 3 units have recently been Gap Property since 48 units were constructed. The market data approach was also considered in completed. A discount to sell the 3 units was considered in arriving at a final value. this section. Section IIID represents the remaining 6 units in Waypointe Condominiums that is owned by Section IIC refers to a shopping center, “The Collection”, and the income and market data Standard Pacific. The market data approach was utilized and a discount for time to sell and approach was utilized and the conclusion was compared to the assessed value. complete the units were considered in arriving at final “as-is” value conclusion. Section IID refers to the Target department store, and the income and market data approach was utilized and compared to the assessed value. Section IIE refers to Cinemark Century Theater that was constructed in 2008, but has not yet been assigned a special tax levy; this was valued and then compared to the assessed value. Section IIF refers to an APN that has been built out and has eight townhouse units, but the assessor has not reflected the individual APNs; this project is referred to as Avenue II (“Avenue II”). This APN was owned by Standard Pacific in 2012-2013, and all except three of the APNS have been sold to individual homeowners. The market data approach was considered in this section. Section IIG refers to a townhouse project known as The Vines (“The Vines”) that had been constructed, but is currently being leased for the short to medium term before the developer markets the units for sale. As the assessor has not yet mapped these APN’s, it was necessary to

Valuation Re §IA – Various Individually Owned APN’s AV Total for Assessed 2012 Building APN Fiscal Year Value Per Levy Sq Ft This section involves the 1,081 APN’s that were subject to the CFD No. 1 special tax levy in fiscal 2012-2013 Sq. Ft. 1320131025 $ 287,000.00 x 2,076 $ 138.25 year 2012-2013 and have been constructed since the RiverPark project began construction in 2008. 1320131035 $ 285,000.00 x 1,604 $ 177.68 The following is a list provided by the Dolinka Group: 1320131045 $ 244,000.00 x 1,525 $ 160.00 1320131055 $ 244,000.00 x 1,525 $ 160.00

1320131065 $ 285,000.00 x 1,604 $ 177.68 1320131075 $ 300,000.00 x 2,053 $ 146.13 1320131085 $ 273,000.00 x 2,100 $ 130.00

1320131095 $ 280,000.00 x 1,604 $ 174.56 1320131105 $ 233,000.00 x 1,525 $ 152.79 1320131115 $ 232,000.00 x 1,525 $ 152.13 1320131125 $ 271,000.00 x 1,604 $ 168.95 1320131135 $ 274,000.00 x 2,160 $ 126.85 1320132025 $ 287,000.00 x 2,100 $ 136.67 1320132035 $ 299,000.00 x 1,604 $ 186.41 1320132045 $ 246,000.00 x 1,525 $ 161.31 1320132055 $ 244,000.00 x 1,525 $ 160.00 1320132065 $ 300,000.00 x 1,604 $ 187.03 1320132,075 $ 287,000.00 x 2,100 $ 136.67 1320133015 $ 288,000.00 x 1,979 $ 145.53 1320133025 $ 310,000.00 x 2,270 $ 136.56 1320133035 $ 340,000.00 x 2,393 $ 142.08 1320133045 $ 340,000.00 x 2,393 $ 142.08 1320133055 $ 299,900.00 x 1,979 $ 151.54 1320133065 $ 309,000.00 x 2,370 $ 130.38 1320133075 $ 288,000.00 x 1,979 $ 145.53 1320133085 $ 288,000.00 x 1,979 $ 145.53 1320133095 $ 340,000.00 x 2,393 $ 142.08 1320133105 $ 340,000.00 x 2,393 $ 142.08 1320133115 $ 288,000.00 x 1,979 $ 145.53 1320133125 $ 309,000.00 x 2,370 $ 130.38 1320133135 $ 340,000.00 x 2,393 $ 142.08 1320133145 $ 288,000.00 x 1,979 $ 145.53 1320133155 $ 309,000.00 x 2,370 $ 130.38 1320133165 $ 340,000.00 x 2,393 $ 142.08 1320133175 $ 335,000.00 x 2,393 $ 139.99 1320133185 $ 309,000.00 x 2,370 $ 130.38 1320133195 $ 288,000.00 x 1,979 $ 145.53 1320133205 $ 340,000.00 x 2,393 $ 142.08 1320133215 $ 288,000.00 x 1,979 $ 145.53 1320133225 $ 288,000.00 x 1,979 $ 145.53 1320133235 $ 288,000.00 x 2,393 $ 120.35 1320133245 $ 340,000.00 x 2,393 $ 142.08 1320133255 $ 309,000.00 x 2,370 $ 130.38 1320133265 $ 288,000.00 x 1,979 $ 145.53

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1320134015 $ 287,000.00 x 2,100 $ 136.67 1320140145 $ 343,000.00 x 2,453 $ 139.83 1320134025 $ 295,000.00 x 1,604 $ 183.92 1320140155 $ 326,000.00 x 2,263 $ 144.06 1320134035 $ 246,000.00 x 1,525 $ 161.31 1320140165 $ 326,000.00 x 2,275 $ 143.30 1320134045 $ 244,000.00 x 1,525 $ 160.00 1320140175 $ 336,000.00 x 2,393 $ 140.41 1320134055 $ 294,000.00 x 1,609 $ 182.72 1320140185 $ 381,000.00 x 2,453 $ 155.32 1320134065 $ 287,000.00 x 2,100 $ 136.67 1320140195 $ 331,000.00 x 2,453 $ 134.94 1320134085 $ 239,000.00 x 2,302 $ 103.82 1320140215 $ 274,000.00 x 1,979 $ 138.45 1320134095 $ 235,000.00 x 2,084 $ 112.76 1320140225 $ 294,000.00 x 2,370 $ 124.05 1320134105 $ 233,000.00 x 2,084 $ 111.80 1320140235 $ 326,000.00 x 2,393 $ 136.23 1320134115 $ 235,000.00 x 2,084 $ 112.76 1320140245 $ 326,000.00 x 2,393 $ 136.23 1320134125 $ 233,000.00 x 2,084 $ 111.80 1320140255 $ 274,000.00 x 1,979 $ 138.45 1320134135 $ 234,000.00 x 2,084 $ 112.28 1320140265 $ 356,000.00 x 2,370 $ 150.21 1320134145 $ 234,000.00 x 1,527 $ 153.24 1320140275 $ 309,000.00 x 2,370 $ 130.38 1320135015 $ 267,000.00 x 2,084 $ 128.12 1320140285 $ 288,000.00 x 1,979 $ 145.53 1320135025 $ 280,000.00 x 2,084 $ 134.36 1320140295 $ 340,000.00 x 2,393 $ 142.08 1320135035 $ 232,000.00 x 2,084 $ 111.32 1320140305 $ 269,000.00 x 2,393 $ 112.41 1320135045 $ 231,000.00 x 1,527 $ 151.28 1320140315 $ 288,000.00 x 1,979 $ 145.53 1320135055 $ 271,000.00 x 1,527 $ 177.47 1320140325 $ 309,000.00 x 2,370 $ 130.38 1320135065 $ 274,000.00 x 2,076 $ 131.98 1320140345 $ 340,000.00 x 2,393 $ 142.08 1320135075 $ 287,000.00 x 2,053 $ 139.80 1320140355 $ 288,000.00 x 1,979 $ 145.53 1320135085 $ 285,000.00 x 1,527 $ 186.64 1320140365 $ 300,000.00 x 2,370 $ 126.58 1320135095 $ 244,000.00 x 1,527 $ 159.79 1320140385 $ 340,000.00 x 2,393 $ 142.08 1320135105 $ 246,000.00 x 1,527 $ 161.10 1320140395 $ 275,000.00 x 1,979 $ 138.96 1320135115 $ 286,000.00 x 1,527 $ 187.30 1320140405 $ 311,000.00 x 2,370 $ 131.22 1320135125 $ 287,000.00 x 2,053 $ 139.80 1320140415 $ 340,000.00 x 2,393 $ 142.08 1320135145 $ 244,000.00 x 2,325 $ 104.95 1320140425 $ 288,000.00 x 1,979 $ 145.53 1320135155 $ 235,000.00 x 2,192 $ 107.21 1320140435 $ 309,000.00 x 2,370 $ 130.38 1320135175 $ 235,000.00 x 2,192 $ 107.21 1320140445 $ 340,000.00 2,393 $ 142.08 1320135185 $ 233,000.00 x 2,192 $ 106.30 1320140455 $ 309,000.00 x 2,370 $ 130.38 1320135195 $ 237,000.00 x 2,192 $ 108.12 1320140465 $ 288,000.00 x 1,979 $ 145.53 13201,35205 $ 239,000.00 x 2,385 $ 100.21 1320140475 $ 340,000.00 x 2,393 $ 142.08 13201,40015 $ 342,000.00 x 2,593 $ 131.89 1320140485 $ 340,000.00 x 2,393 $ 142.08 13201,40025 $ 336,000.00 x 2,575 $ 130.49 1320140495 $ 288,000.00 x 1,979 $ 145.53 13201,40035 $ 326,000.00 x 2,263 $ 144.06 13201,40505 $ 309,000.00 x 2,370 $ 130.38 13201,40045 $ 336,000.00 x 2,575 $ 130.49 13201,40515 $ 244,000.00 x 2,325 $ 104.95 13201,40055 $ 330,000.00 x 2,275 $ 145.05 13201,40525 $ 233,000.00 x 2,192 $ 106.30 13201,40065 $ 336,000.00 x 2,275 $ 147.69 13201,40535 $ 235,000.00 x 2,192 $ 107.21 13201,40075 $ 342,000.00 x 2,453 $ 139.42 13201,40545 $ 233,000.00 x 2,192 $ 106.30 13201,40085 $ 326,000.00 x 2,263 $ 144.06 13201,40555 $ 234,000.00 x 2,192 $ 106.75 13201,40095 $ 326,000.00 x 2,263 $ 144.06 13201,40565 $ 235,000.00 x 2,325 $ 101.08 1320140105 $ 343,000.00 x 2,453 $ 139.83 13201,40575 $ 244,000.00 x 2,325 $ 104.95 1320140115 $ 336,000.00 x 2,275 $ 147.69 13201,40585 $ 235,000.00 x 2,192 $ 107.21 1320140125 $ 342,000.00 x 2,453 $ 139.42 13201,40595 $ 234,000.00 x 2,192 $ 106.75 1320140135 $ 336,000.00 x 2,275 $ 147.69 1320140605 $ 235,000.00 x 2,192 $ 107.21

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1320140615 $ 233,000.00 x 2,192 $ 106.30 1320150455 $ 234,000.00 x 2,192 $ 106.75 1320140625 $ 233,000.00 x 2,325 $ 100.22 1320150465 $ 235,000.00 x 2,192 $ 107.21 1320140635 $ 244,000.00 x 1,527 $ 159.79 1320150475 $ 233,000.00 x 2,192 $ 106.30 1320150035 $ 244,000.00 x 2,076 $ 117.53 1320150485 $ 233,000.00 x 2,192 $ 106.30 1320150045 $ 300,000.00 x 1,527 $ 196.46 1320150495 $ 244,000.00 x 2,325 $ 104.95 1320150055 $ 265,000.00 x 1,527 $ 173.54 1320170125 $ 222,000.00 x 2,090 $ 106.22 1320150065 $ 242,500.00 x 2,053 $ 118.12 1320170135 $ 237,000.00 x 2,175 $ 108.97 1320150075 $ 289,000.00 x 1,527 $ 189.26 1320170145 $ 233,000.00 x 2,090 $ 111.48 1320150085 $ 233,000.00 x 1,527 $ 152.59 1320170155 $ 221,000.00 x 2,090 $ 105.74 1320150095 $ 272,000.00 x 1,527 $ 178.13 1320170165 $ 237,000.00 x 2,027 $ 116.92 1320150105 $ 231,000.00 x 1,527 $ 151.28 1320170175 $ 233,000.00 xx 2,090 $ 111.48 1320150115 $ 232,000.00 x 1,527 $ 151.93 1320170185 $ 221,000.00 x 2,090 $ 105.74 1320150125 $ 280,000.00 x 1,527 $ 183.37 1320170195 $ 237,000.00 x 2,175 $ 108.97 1320150135 $ 277,000.00 x 2,076 $ 133.43 1320170205 $ 233,000.00 x 2,090 $ 111.48 1320150145 $ 286,000.00 x 2,053 $ 139.31 1320170215 $ 222,000.00 x 2,090 $ 106.22 1320150155 $ 244,000.00 x 1,527 $ 159.79 1320170225 $ 236,000.00 x 2,175 $ 108.51 1320150165 $ 285,000.00 x 1,527 $ 186.64 1320170235 $ 233,000.00 x 2,090 $ 111.48 1320150175 $ 287,000.00 x 2,053 $ 139.80 1320170245 $ 215,000.00 x 1,790 $ 120.11 1320150185 $ 249,000.00 x 1,527 $ 163.06 1320170255 $ 230,000.00 x 1,892 $ 121.56 1320150205 $ 257,500.00 x 1,527 $ 168.63 1320170265 $ 237,000.00 x 2,175 $ 108.97 1320150215 $ 286,000.00 x 2,053 $ 139.31 1320170275 $ 237,000.00 x 2,175 $ 108.97 1320150225 $ 294,000.00 x 1,527 $ 192.53 1320170285 $ 229,000.00 x 1,892 $ 121.04 1320150235 $ 244,000.00 x 1,527 $ 159.79 1320170295 $ 224,000.00 x 1,802 $ 124.31 1320150245 $ 287,000.00 x 2,076 $ 138.25 1320170305 $ 233,000.00 x 2,090 $ 111.48 1320150255 $ 271,000.00 x 2,053 $ 132.00 1320170315 $ 216,000.00 x 1,770 $ 122.03 1320150265 $ 270,000.00 x 1,527 $ 176.82 1320170325 $ 229,000.00 x 1,892 $ 121.04 1320150275 $ 232,000.00 x 1,527 $ 151.93 1320170335 $ 237,000.00 x 2,175 $ 108.97 1320150285 $ 231,000.00 x 1,527 $ 151.28 1320170345 $ 236,000.00 x 2,175 $ 108.51 1320150295 $ 271,000.00 x 1,527 $ 177.47 1320170355 $ 218,000.00 x 1,892 $ 115.22 1320150305 $ 271,000.00 x 1,527 $ 177.47 1320170365 $ 215,000.00 x 1,770 $ 121.47 1320150315 $ 286,000.00 x 2,053 $ 139.31 1320170375 $ 222,000.00 x 2,090 $ 106.22 1320150325 $ 249,000.00 x 1,527 $ 163.06 1320170385 $ 227,000.00 x 2,175 $ 104.37 1320150335 $ 285,000.00 x 1,527 $ 186.64 1320170395 $ 221,000.00 x 2,090 $ 105.74 1320150345 $ 287,000.00 x 2,053 $ 139.80 1320170405 $ 232,000.00 x 2,090 $ 111.00 1320150355 $ 244,000.00 x 1,527 $ 159.79 1320170415 $ 237,000.00 x 2,175 $ 108.97 1320150365 $ 244,000.00 x 2,325 $ 104.95 1320170425 $ 236,000.00 x 2,175 $ 108.51 1320150375 $ 231,000.00 x 2,192 $ 105.38 1320170435 $ 232,000.00 x 2,190 $ 105.94 1320150385 $ 230,000.00 x 2,192 $ 104.93 1320170445 $ 232,000.00 x 2,190 $ 105.94 1320150395 $ 235,000.00 x 2,192 $ 107.21 1320170455 $ 236,000.00 x 2,175 $ 108.51 1320150405 $ 233,000.00 x 2,192 $ 106.30 1320170465 $ 232,000.00 x 2,090 $ 111.00 1320150415 $ 235,000.00 x 2,192 $ 107.21 1320170475 $ 232,000.00 x 2,090 $ 111.00 1320150425 $ 244,000.00 x 2,325 $ 104.95 1320170485 $ 236,000.00 x 2,175 $ 108.51 1320150435 $ 244,000.00 x 2,325 $ 104.95 1320170495 $ 228,300.00 x 2,175 $ 104.97 1320150445 $ 235,000.00 x 2,192 $ 107.21 1320170505 $ 221,000.00 x 2,090 $ 105.74

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1320170515 $ 216,000.00 x 1,770 $ 122.03 1320180445 $ 212,260.00 x 1,632 $ 130.06 1320170525 $ 229,000.00 x 1,892 $ 121.04 1320180455 $ 212,260.00 x 1,632 $ 130.06 1320170535 $ 237,000.00 x 2,175 $ 108.97 1320180465 $ 235,000.00 x 1,670 $ 140.72 1320170545 $ 237,000.00 x 2,175 $ 108.97 1320180475 $ 212,260.00 x 1,632 $ 130.06 1320170555 $ 230,000.00 x 1,892 $ 121.56 1320180485 $ 212,260.00 x 1,632 $ 130.06 1320170565 $ 215,000.00 x 1,770 $ 121.47 1320180495 $ 212,260.00 x 1,632 $ 130.06 1320170575 $ 232,000.00 x 2,090 $ 111.00 1320180505 $ 212,260.00 x 1,632 $ 130.06 1320170585 $ 230,000.00 x 2,175 $ 105.75 1320180515 $ 235,000.00 x 1,670 $ 140.72 1320170595 $ 237,000.00 x 2,175 $ 108.97 1320180525 $ 235,000.00 x 1,670 $ 140.72 1320170605 $ 232,000.00 x 2,090 $ 111.00 1320180535 $ 212,260.00 x 1,632 $ 130.06 1320170615 $ 232,000.00 x 2,090 $ 111.00 1320180545 $ 212,260.00 x 1,632 $ 130.06 1320170625 $ 236,000.00 x 2,175 $ 108.51 1320180555 $ 212,260.00 x 1,632 $ 130.06 1320170635 $ 232,000.00 x 2,090 $ 111.00 1320180565 $ 212,260.00 x 1,632 $ 130.06 1320170645 $ 232,000.00 x 2,090 $ 111.00 1320180575 $ 210,000.00 x 1,670 $ 125.75 1320170655 $ 237,000.00 x 2,175 $ 108.97 1320180585 $ 235,000.00 x 1,670 $ 140.72 1320170665 $ 236,000.00 x 2,175 $ 108.51 1320180595 $ 212,260.00 x 1,632 $ 130.06 1320170675 $ 232,000.00 x 2,090 $ 111.00 1320180605 $ 212,260.00 x 1,632 $ 130.06 1320180175 $ 234,600.00 x 1,670 $ 140.48 1320180615 $ 212,260.00 x 1,632 $ 130.06 1320180185 $ 212,260.00 x 1,632 $ 130.06 1320180625 $ 212,260.00 x 1,632 $ 130.06 1320180195 $ 212,260.00 x 1,632 $ 130.06 1320180635 $ 235,000.00 x 1,670 $ 140.72 1320180205 $ 212,260.00 x 1,632 $ 130.06 1320180645 $ 235,000.00 x 1,670 $ 140.72 1320180215 $ 212,260.00 x 1,632 $ 130.06 1320180655 $ 212,260.00 x 1,632 $ 130.06 1320180225 $ 235,000.00 x 1,670 $ 140.72 1320180665 $ 212,260.00 x 1,632 $ 130.06 1320180235 $ 235,000.00 x 1,670 $ 140.72 1320180675 $ 212,260.00 x 1,632 $ 130.06 1320180245 $ 212,260.00 x 1,632 $ 130.06 1320180685 $ 212,260.00 x 1,632 $ 130.06 1320180255 $ 212,260.00 x 1,632 $ 130.06 1320180695 $ 235,000.00 x 1,670 $ 140.72 1320180265 $ 212,260.00 x 1,632 $ 130.06 1320180705 $ 235,000.00 x 1,670 $ 140.72 1320180275 $ 212,260.00 x 1,632 $ 130.06 1320180715 $ 212,260.00 x 1,632 $ 130.06 1320180285 $ 235,000.00 x 1,670 $ 140.72 1320180725 $ 212,260.00 x 1,632 $ 130.06 1320180295 $ 212,260.00 x 1,632 $ 130.06 1320180735 $ 212,260.00 x 1,632 $ 130.06 1320180305 $ 212,260.00 x 1,632 $ 130.06 1320180745 $ 212,260.00 x 1,632 $ 130.06 1320180315 $ 235,000.00 x 1,835 $ 128.07 1320180755 $ 235,000.00 x 1,670 $ 140.72 1320180325 $ 212,260.00 x 1,632 $ 130.06 1320180765 $ 235,000.00 x 1,670 $ 140.72 1320180335 $ 212,260.00 x 1,632 $ 130.06 1320180775 $ 212,260.00 x 1,632 $ 130.06 1320180345 $ 212,260.00 x 1,632 $ 130.06 1320180785 $ 225,043.00 x 1,644 $ 136.89 1320180355 $ 212,260.00 x 1,632 $ 130.06 1320190015 $ 214,000.00 x 1,644 $ 130.17 1320180365 $ 235,000.00 x 1,670 $ 140.72 1320190025 $ 218,000.00 x 1,671 $ 130.46 1320180375 $ 212,260.00 x 1,632 $ 130.06 1320190035 $ 218,000.00 x 1,671 $ 130.46 1320180385 $ 212,260.00 x 1,632 $ 130.06 1320190045 $ 227,000.00 x 1,716 $ 132.28 1320180395 $ 178,017.00 x 1,632 $ 109.08 1320190055 $ 203,000.00 x 1,644 $ 123.48 1320180405 $ 212,260.00 x 1,632 $ 130.06 1320190065 $ 218,000.00 x 1,671 $ 130.46 1320180415 $ 235,000.00 x 1,670 $ 140.72 1320190075 $ 223,000.00 x 1,671 $ 133.45 1320180425 $ 212,260.00 x 1,632 $ 130.06 1320190085 $ 217,000.00 x 1,716 $ 126.46 1320180435 $ 212,260.00 x 1,632 $ 130.06 1320190095 $ 203,000.00 x 1,644 $ 123.48

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1320190105 $ 218,000.00 x 1,617 $ 134.82 1320200145 $ 218,000.00 x 1,671 $ 130.46 1320190115 $ 227,000.00 x 1,716 $ 132.28 1320200155 $ 227,000.00 x 1,716 $ 132.28 1320190125 $ 203,000.00 x 1,644 $ 123.48 1320200165 $ 214,000.00 x 1,644 $ 130.17 1320190135 $ 191,000.00 x 1,464 $ 130.46 1320200175 $ 218,000.00 x 1,671 $ 130.46 1320190145 $ 213,000.00 x 1,870 $ 113.90 1320200185 $ 218,000.00 x 1,671 $ 130.46 1320190155 $ 213,000.00 x 1,870 $ 113.90 1320200195 $ 227,000.00 x 1,716 $ 132.28 1320190165 $ 191,000.00 x 1,464 $ 130.46 1320200205 $ 214,000.00 x 1,644 $ 130.17 1320190175 $ 217,000.00 x 1,716 $ 126.46 1320200215 $ 218,000.00 x 1,671 $ 130.46 1320190185 $ 214,000.00 x 1,644 $ 130.17 1320200225 $ 227,000.00 x 1,716 $ 132.28 1320190195 $ 201,000.00 x 1,464 $ 137.30 1320200235 $ 242,000.00 x 1,352 $ 178.99 1320190205 $ 224,000.00 x 1,870 $ 119.79 1320200245 $ 232,000.00 x 1,338 $ 173.39 1320190215 $ 224,000.00 x 1,870 $ 119.79 1320200255 $ 242,000.00 x 1,352 $ 178.99 1320190225 $ 201,000.00 x 1,464 $ 137.30 1320200265 $ 259,000.00 x 1,475 $ 175.59 1320190235 $ 227,000.00 x 1,716 $ 132.28 1320200275 $ 242,000.00 x 1,352 $ 178.99 1320190245 $ 214,000.00 x 1,644 $ 130.17 1320200285 $ 232,000.00 x 1,338 $ 173.39 1320190255 $ 218,000.00 x 1,671 $ 130.46 1320200295 $ 242,000.00 x 1,352 $ 178.99 1320190265 $ 227,000.00 x 1,716 $ 132.28 1320200305 $ 259,000.00 x 1,475 $ 175.59 1320190275 $ 214,000.00 x 1,735 $ 123.34 13202,00555 $ 247,000.00 x 1,475 $ 167.46 1320190285 $ 218,000.00 x 1,743 $ 125.07 13202,00565 $ 242,000.00 x 1,352 $ 178.99 1320190295 $ 227,000.00 x 1,792 $ 126.67 13202,00575 $ 232,000.00 x 1,338 $ 173.39 1320190305 $ 227,000.00 x 1,792 $ 126.67 13202,00585 $ 242,000.00 x 1,352 $ 178.99 1320190315 $ 218,000.00 x 1,743 $ 125.07 132,0210345 $ 242,000.00 x 1,352 $ 178.99 1320190325 $ 203,000.00 x 1,735 $ 117.00 132,0210355 $ 232,000.00 x 1,338 $ 173.39 1320190335 $ 203,000.00 x 1,735 $ 117.00 132,0210365 $ 242,000.00 x 1,352 $ 178.99 1320190345 $ 218,000.00 x 1,743 $ 125.07 132,0210375 $ 242,000.00 x 1,352 $ 178.99 1320190355 $ 218,000.00 x 1,743 $ 125.07 132,0210385 $ 232,000.00 x 1,338 $ 173.39 1320190365 $ 227,000.00 x 1,792 $ 126.67 132,0210395 $ 242,000.00 x 1,352 $ 178.99 1320190375 $ 227,000.00 x 1,644 $ 138.08 132,0210405 $ 242,000.00 x 1,352 $ 178.99 1320190385 $ 217,000.00 x 1,671 $ 129.86 132,0210415 $ 232,000.00 x 1,338 $ 173.39 1320190395 $ 217,000.00 x 1,671 $ 129.86 132,0210425 $ 242,000.00 x 1,352 $ 178.99 1320190405 $ 214,000.00 x 1,716 $ 124.71 132,0210435 $ 242,000.00 x 1,352 $ 178.99 1320200015 $ 231,000.00 x 1,352 $ 170.86 132,0210445 $ 232,000.00 x 1,338 $ 173.39 1320200025 $ 221,000.00 x 1,338 $ 165.17 132,0210455 $ 242,000.00 x 1,352 $ 178.99 1320200035 $ 231,000.00 x 1,352 $ 170.86 132,0210465 $ 242,000.00 x 1,352 $ 178.99 1320200045 $ 247,000.00 x 1,475 $ 167.46 132,0210475 $ 229,900.00 x 1,338 $ 171.82 1320200055 $ 231,000.00 x 1,352 $ 170.86 132,0210485 $ 242,000.00 x 1,352 $ 178.99 1320200065 $ 221,000.00 x 1,338 $ 165.17 132,0210495 $ 259,000.00 x 1,475 $ 175.59 1320200075 $ 231,000.00 x 1,552 $ 148.84 132,0210505 $ 249,900.00 x 1,352 $ 184.84 1320200085 $ 247,000.00 x 1,475 $ 167.46 132,0210515 $ 219,900.00 x 1,338 $ 164.35 1320200095 $ 203,000.00 x 1,644 $ 123.48 132,0210525 $ 242,000.00 x 1,352 $ 178.99 1320200105 $ 218,000.00 x 1,644 $ 132.60 132,0210535 $ 259,000.00 x 1,475 $ 175.59 1320200115 $ 217,000.00 x 1,716 $ 126.46 1320251015 $ 201,000.00 x 1,519 $ 132.32 1320200125 $ 203,000.00 x 1,644 $ 123.48 1320251025 $ 208,000.00 x 1,584 $ 131.31 1320200135 $ 218,000.00 x 1,671 $ 130.46 1320251035 $ 196,000.00 x 1,483 $ 132.16

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1320251045 $ 217,000.00 x 1,643 $ 132.08 1320251485 $ 285,000.00 x 2,021 $ 141.02 1320251055 $ 217,000.00 x 1,643 $ 132.08 1320251495 $ 285,000.00 x 2,005 $ 142.14 1320251065 $ 196,000.00 x 1,483 $ 132.16 1320251505 $ 266,000.00 x 1,758 $ 151.31 1320251075 $ 208,000.00 x 1,584 $ 131.31 1320251515 $ 266,000.00 x 1,826 $ 145.67 1320251085 $ 201,000.00 x 1,519 $ 132.32 1320251525 $ 285,000.00 x 2,005 $ 142.14 1320251095 $ 201,000.00 x 1,519 $ 132.32 1320251535 $ 271,000.00 x 2,021 $ 134.09 1320251105 $ 208,000.00 x 1,584 $ 131.31 1320251545 $ 266,000.00 x 1,800 $ 147.78 1320251115 $ 175,000.00 x 1,483 $ 118.00 1320251555 $ 300,000.00 x 2,124 $ 141.24 1320251125 $ 217,000.00 x 1,643 $ 132.08 1320251565 $ 305,000.00 x 2,124 $ 143.60 1320251135 $ 196,000.00 x 1,483 $ 132.16 1320251575 $ 266,000.00 x 1,800 $ 147.78 1320251145 $ 208,000.00 x 1,584 $ 131.31 1320251585 $ 285,000.00 x 2,021 $ 141.02 1320251155 $ 201,000.00 x 1,519 $ 132.32 1320251595 $ 285,000.00 x 2,005 $ 142.14 1320251165 $ 201,000.00 x 1,519 $ 132.32 1320251,605 $ 266,000.00 x 1,758 $ 151.31 1320251175 $ 208,000.00 x 1,584 $ 131.31 1320251615 $ 266,000.00 x 1,827 $ 145.59 1320251185 $ 184,000.00 x 1,483 $ 124.07 1320251625 $ 285,000.00 x 2,005 $ 142.14 1320251195 $ 217,000.00 x 1,483 $ 146.33 1320251635 $ 285,000.00 x 2,021 $ 141.02 1320251205 $ 217,000.00 x 1,483 $ 146.33 1320251645 $ 305,000.00 x 2,162 $ 141.07 1320251215 $ 196,000.00 x 1,483 $ 132.16 1320252015 $ 201,000.00 x 1,519 $ 132.32 1320251225 $ 208,000.00 x 1,584 $ 131.31 1320252025 $ 208,000.00 x 1,584 $ 131.31 1320251235 $ 201,000.00 x 1,519 $ 132.32 1320252035 $ 217,000.00 x 1,643 $ 132.08 1320251245 $ 201,000.00 x 1,519 $ 132.32 1320252045 $ 217,000.00 x 1,643 $ 132.08 1320251255 $ 208,000.00 x 1,584 $ 131.31 1320252055 $ 220,000.00 x 1,643 $ 133.90 1320251265 $ 196,000.00 x 1,483 $ 132.16 1320252065 $ 208,000.00 x 1,584 $ 131.31 1320251275 $ 217,000.00 x 1,483 $ 146.33 1320252,075 $ 201,000.00 x 1,519 $ 132.32 1320251285 $ 217,000.00 x 1,483 $ 146.33 1320252085 $ 201,000.00 x 1,519 $ 132.32 1320251295 $ 196,000.00 x 1,483 $ 132.16 1320252095 $ 208,000.00 x 1,584 $ 131.31 1320251305 $ 208,000.00 x 1,584 $ 131.31 1320252105 $ 217,000.00 x 1,643 $ 132.08 1320251315 $ 201,000.00 x 1,519 $ 132.32 1320252115 $ 217,000.00 x 1,643 $ 132.08 1320251325 $ 278,000.00 x 2,631 $ 105.66 1320252125 $ 217,000.00 x 1,643 $ 132.08 1320251335 $ 268,000.00 x 2,431 $ 110.24 1320252135 $ 217,000.00 x 1,643 $ 132.08 1320251345 $ 268,000.00 x 2,432 $ 110.20 1320252145 $ 208,000.00 x 1,584 $ 131.31 1320251355 $ 278,000.00 x 2,623 $ 105.99 1320252155 $ 201,000.00 x 1,519 $ 132.32 1320251365 $ 300,000.00 x 2,124 $ 141.24 1320252165 $ 201,000.00 x 1,519 $ 132.32 1320251,375 $ 266,000.00 x 1,800 $ 147.78 1320252175 $ 208,000.00 x 1,584 $ 131.31 1320251,385 $ 285,000.00 x 2,021 $ 141.02 1320252185 $ 217,000.00 x 1,519 $ 142.86 1320251395 $ 285,000.00 x 2,621 $ 108.74 1320252195 $ 217,000.00 x 1,643 $ 132.08 1320251,405 $ 266,000.00 x 1,758 $ 151.31 1320252205 $ 217,000.00 x 1,643 $ 132.08 1320251415 $ 266,000.00 x 1,826 $ 145.67 1320252215 $ 208,000.00 x 1,584 $ 131.31 1320251,425 $ 285,000.00 x 2,005 $ 142.14 1320252225 $ 201,000.00 x 1,519 $ 132.32 1320251435 $ 285,000.00 x 2,021 $ 141.02 1320252235 $ 201,000.00 x 1,519 $ 132.32 1320251445 $ 266,000.00 x 1,800 $ 147.78 1320252245 $ 208,000.00 x 1,584 $ 131.31 1320251455 $ 300,000.00 x 2,134 $ 140.58 1320252255 $ 217,000.00 x 1,483 $ 146.33 1320251465 $ 300,000.00 x 2,134 $ 140.58 1320252265 $ 217,000.00 x 1,483 $ 146.33 1320251,475 $ 266,000.00 x 1,800 $ 147.78 1320252275 $ 217,000.00 x 1,483 $ 146.33

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1320252285 $ 208,000.00 x 1,584 $ 131.31 1320260195 $ 274,000.00 x 2,631 $ 104.14 1320252295 $ 201,000.00 x 1,519 $ 132.32 1320260205 $ 264,000.00 x 2,431 $ 108.60 1320252305 $ 201,000.00 x 1,519 $ 132.32 1320260215 $ 264,000.00 x 2,434 $ 108.46 1320252315 $ 208,000.00 x 1,584 $ 131.31 1320260225 $ 274,000.00 x 2,631 $ 104.14 1320252,325 $ 217,000.00 x 1,643 $ 132.08 1320260235 $ 274,000.00 x 2,631 $ 104.14 1320252335 $ 208,000.00 x 1,584 $ 131.31 1320260245 $ 256,000.00 x 2,362 $ 108.38 1320252345 $ 201,000.00 x 1,519 $ 132.32 1320260255 $ 260,000.00 x 2,490 $ 104.42 1320252355 $ 201,000.00 x 1,519 $ 132.32 1320260265 $ 256,000.00 x 2,362 $ 108.38 1320252365 $ 208,000.00 x 1,584 $ 131.31 1320260275 $ 256,000.00 x 2,362 $ 108.38 1320252375 $ 217,000.00 x 1,643 $ 132.08 1320260285 $ 260,000.00 x 2,490 $ 104.42 1320252385 $ 208,000.00 x 1,584 $ 131.31 1320260295 $ 260,000.00 x 2,490 $ 104.42 1320252395 $ 201,000.00 x 1,519 $ 132.32 1320260305 $ 256,000.00 x 2,362 $ 108.38 1320252405 $ 201,000.00 x 1,519 $ 132.32 1320260315 $ 274,000.00 x 2,631 $ 104.14 1320252415 $ 208,000.00 x 1,584 $ 131.31 1320260355 $ 267,000.00 x 2,631 $ 101.48 1320252425 $ 217,000.00 x 1,483 $ 146.33 1320260365 $ 257,000.00 x 2,431 $ 105.72 1320252435 $ 217,000.00 x 1,483 $ 146.33 1320260375 $ 257,000.00 xx 2,431 $ 105.72 1320252445 $ 217,000.00 x 1,483 $ 146.33 1320260385 $ 267,000.00 x 2,631 $ 101.48 1320252455 $ 208,000.00 x 1,584 $ 131.31 1320260395 $ 278,000.00 x 2,631 $ 105.66 1320252465 $ 201,000.00 x 1,519 $ 132.32 1320260405 $ 268,000.00 x 2,431 $ 110.24 1320252475 $ 285,000.00 x 2,005 $ 142.14 1320260415 $ 268,000.00 x 2,431 $ 110.24 1320252485 $ 266,000.00 x 1,800 $ 147.78 1320260425 $ 278,000.00 x 2,631 $ 105.66 1320252495 $ 266,000.00 x 1,800 $ 147.78 1320260435 $ 267,000.00 x 2,631 $ 101.48 1320252505 $ 285,000.00 x 2,005 $ 142.14 1320260445 $ 257,000.00 x 2,431 $ 105.72 1320252515 $ 285,000.00 x 2,021 $ 141.02 1320260455 $ 249,000.00 x 2,362 $ 105.42 1320252525 $ 266,000.00 x 1,800 $ 147.78 1320260465 $ 253,000.00 x 2,490 $ 101.61 1320252535 $ 305,000.00 x 2,124 $ 143.60 1320260475 $ 253,000.00 x 2,490 $ 101.61 1320260015 $ 201,000.00 x 1,519 $ 132.32 1320260485 $ 249,000.00 x 2,362 $ 105.42 1320260025 $ 208,000.00 x 1,584 $ 131.31 1320260495 $ 267,000.00 x 2,631 $ 101.48 1320260035 $ 217,000.00 x 1,643 $ 132.08 1320271155 $ 201,000.00 x 1,519 $ 132.32 1320260045 $ 208,000.00 x 1,584 $ 131.31 1320271165 $ 208,000.00 x 1,584 $ 131.31 1320260055 $ 201,000.00 x 1,519 $ 132.32 1320271175 $ 217,000.00 x 1,643 $ 132.08 1320260065 $ 201,000.00 x 1,519 $ 132.32 1320271185 $ 217,000.00 x 1,643 $ 132.08 1320260075 $ 208,000.00 x 1,584 $ 131.31 1320271195 $ 217,000.00 x 1,643 $ 132.08 1320260085 $ 196,000.00 x 1,483 $ 132.16 1320271205 $ 208,000.00 x 1,584 $ 131.31 1320260095 $ 196,000.00 x 1,483 $ 132.16 1320271215 $ 200,000.00 x 1,519 $ 131.67 1320260105 $ 208,000.00 x 1,584 $ 131.31 1320271285 $ 259,029.00 x 2,162 $ 119.81 1320260115 $ 201,000.00 x 1,519 $ 132.32 1320271295 $ 254,029.00 x 2,021 $ 125.69 1320260125 $ 201,000.00 x 1,519 $ 132.32 1320271305 $ 254,029.00 x 2,021 $ 125.69 1320260135 $ 208,000.00 x 1,584 $ 131.31 1320271315 $ 259,029.00 x 2,162 $ 119.81 1320260145 $ 188,000.00 x 1,483 $ 126.77 1320272375 $ 305,000.00 x 2,124 $ 143.60 1320260155 $ 217,000.00 x 1,483 $ 146.33 1320272385 $ 264,900.00 x 1,800 $ 147.17 1320260165 $ 196,000.00 x 1,483 $ 132.16 1320272395 $ 285,000.00 x 2,021 $ 141.02 1320260175 $ 208,000.00 x 1,584 $ 131.31 1320272405 $ 285,000.00 x 2,021 $ 141.02 1320260185 $ 201,000.00 x 1,519 $ 132.32 1320272415 $ 249,900.00 xx 1,800 $ 138.83

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1320272425 $ 264,900.00 x 1,800 $ 147.17 1330110095 $ 284,000.00 x 2,075 $ 136.87 1320272435 $ 294,900.00 x 2,005 $ 147.08 1330110105 $ 285,000.00 x 1,928 $ 147.82 1320280015 $ 195,000.00 x 1,554 $ 125.48 1330110115 $ 243,000.00 x 1,547 $ 157.08 1320280025 $ 185,000.00 x 1,375 $ 134.55 1330110125 $ 246,000.00 x 1,547 $ 159.02 1320280035 $ 177,000.00 x 1,301 $ 136.05 1330110135 $ 285,000.00 x 1,928 $ 147.82 1320280045 $ 177,000.00 x 1,301 $ 136.05 1330110145 $ 284,000.00 x 2,053 $ 138.33 1320280055 $ 185,000.00 x 1,375 $ 134.55 1330110165 $ 392,987.00 x 1,928 $ 203.83 1320280065 $ 196,000.00 x 1,554 $ 126.13 1330110175 $ 243,000.00 x 1,547 $ 157.08 1320280075 $ 196,000.00 x 1,554 $ 126.13 1330110185 $ 244,000.00 x 1,547 $ 157.72 1320280085 $ 185,000.00 x 1,375 $ 134.55 1330110195 $ 285,000.00 x 1,928 $ 147.82 1320280095 $ 177,000.00 x 1,301 $ 136.05 1330110205 $ 284,000.00 x 2,097 $ 135.43 1320280105 $ 177,000.00 x 1,301 $ 136.05 1330110215 $ 284,000.00 x 2,075 $ 136.87 1320280115 $ 185,000.00 x 1,375 $ 134.55 1330110225 $ 285,000.00 x 1,928 $ 147.82 1320280125 $ 197,000.00 x 1,554 $ 126.77 1330110235 $ 246,000.00 x 1,547 $ 159.02 1320280135 $ 205,000.00 x 1,554 $ 131.92 1330110245 $ 243,000.00 x 1,547 $ 157.08 1320280145 $ 194,000.00 x 1,375 $ 141.09 1330110255 $ 292,000.00 x 1,928 $ 151.45 1320280155 $ 186,000.00 x 1,301 $ 142.97 1330110265 $ 287,000.00 x 2,097 $ 136.86 1320280165 $ 186,000.00 x 1,301 $ 142.97 1330120075 $ 285,000.00 x 1,979 $ 144.01 1320280175 $ 194,000.00 x 1,375 $ 141.09 1330120085 $ 334,000.00 x 2,393 $ 139.57 1320280185 $ 206,000.00 x 1,554 $ 132.56 1330120095 $ 307,000.00 x 2,370 $ 129.54 1320280195 $ 206,000.00 x 1,554 $ 132.56 1330120105 $ 285,000.00 x 1,979 $ 144.01 1320280205 $ 194,000.00 x 1,375 $ 141.09 1330120115 $ 334,000.00 x 2,393 $ 139.57 1320280215 $ 186,000.00 x 1,301 $ 142.97 1330120125 $ 285,000.00 x 1,979 $ 144.01 1320280225 $ 186,000.00 x 1,301 $ 142.97 1330120135 $ 307,000.00 x 2,370 $ 129.54 1320280235 $ 194,000.00 x 1,375 $ 141.09 1330120145 $ 334,000.00 x 2,393 $ 139.57 1320280245 $ 207,000.00 x 1,554 $ 133.20 1330120175 $ 334,000.00 x 2,393 $ 139.57 1320290075 $ 196,000.00 x 1,554 $ 126.13 1330120185 1320290085 $ 185,000.00 x 1,375 $ 134.55 1330120195 $ 307,000.00 x 2,370 $ 129.54 1320290095 $ 177,000.00 x 1,301 $ 136.05 1330120205 $ 334,000.00 x 2,393 $ 139.57 1320290105 $ 177,000.00 x 1,301 $ 136.05 133012,0215 $ 285,000.00 x 1,979 $ 144.01 1320290115 $ 185,000.00 x 1,375 $ 134.55 1330120225 $ 306,000.00 x 2,370 $ 129.11 1320290125 $ 197,000.00 x 1,554 $ 126.77 1330120545 $ 189,000.00 x 1,033 $ 182.96 1320290135 $ 205,000.00 x 1,554 $ 131.92 1330120555 $ 261,000.00 x 1,605 $ 162.62 1320290145 $ 194,000.00 x 1,375 $ 141.09 1330120565 $ 243,000.00 x 1,396 $ 174.07 1320290155 $ 186,000.00 x 1,301 $ 142.97 1330120575 $ 243,000.00 x 1,381 $ 175.96 1320290165 $ 186,000.00 x 1,301 $ 142.97 1330120585 $ 261,000.00 x 1,605 $ 162.62 1320290175 $ 194,000.00 x 1,375 $ 141.09 1330120595 $ 194,000.00 x 1,033 $ 187.80 1320290185 $ 206,000.00 x 1,554 $ 132.56 1330120605 $ 194,000.00 x 1,033 $ 187.80 1330110035 $ 367,500.00 x 2,075 $ 177.11 1330120615 $ 261,000.00 x 1,605 $ 162.62 1330110045 $ 285,000.00 x 1,928 $ 147.82 133012,0625 $ 243,000.00 x 1,382 $ 175.83 1330110055 $ 246,000.00 x 1,547 $ 159.02 1330120635 $ 243,000.00 x 1,431 $ 169.81 1330110065 $ 244,000.00 x 1,547 $ 157.72 1330120645 $ 261,000.00 x 1,605 $ 162.62 1330110075 $ 291,000.00 x 1,928 $ 150.93 1330120655 $ 194,000.00 x 1,033 $ 187.80 1330110085 $ 284,000.00 x 2,075 $ 136.87 1330120665 $ 194,000.00 x 1,033 $ 187.80

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1330120675 $ 261,000.00 x 1,605 $ 162.62 1330130315 $ 241,000.00 x 1,691 $ 142.52 1330120685 $ 243,000.00 x 1,396 $ 174.07 1330130325 $ 241,000.00 x 1,691 $ 142.52 1330120695 $ 243,000.00 x 1,381 $ 175.96 1330130335 $ 241,000.00 x 1,691 $ 142.52 1330120705 $ 261,000.00 x 1,605 $ 162.62 1330130345 $ 241,000.00 x 1,691 $ 142.52 1330120715 $ 194,000.00 x 1,033 $ 187.80 1330130355 $ 257,000.00 x 1,857 $ 138.40 1330120725 $ 194,000.00 x 1,033 $ 187.80 1330130365 $ 193,000.00 x 1,447 $ 133.38 1330120735 $ 261,000.00 x 1,605 $ 162.62 1330130375 $ 193,000.00 x 1,447 $ 133.38 1330120745 $ 243,000.00 x 1,396 $ 151.60 1330130385 $ 260,000.00 x 1,852 $ 140.39 133012,0755 $ 243,000.00 x 1,361 $ 174.07 1330130395 $ 241,000.00 x 1,691 $ 142.52 1330120765 $ 261,000.00 x 1,605 $ 162.62 1330130405 $ 241,000.00 x 1,691 $ 142.52 1330120775 $ 194,000.00 x 1,033 $ 187.80 1330130415 $ 241,000.00 x 1,691 $ 142.52 1330120785 $ 243,000.00 x 1,395 $ 174.19 1330130425 $ 241,000.00 x 1,691 $ 142.52 133012,0795 $ 243,000.00 x 1,385 $ 175.45 1330130435 $ 260,000.00 x 1,857 $ 140.01 1330120805 $ 243,000.00 x 1,400 $ 173.57 1330130445 $ 193,000.00 x 1,447 $ 133.38 1330130015 $ 193,000.00 x 1,386 $ 139.25 1330130455 $ 204,000.00 x 1,527 $ 133.60 1330130025 $ 257,000.00 x 1,914 $ 134.27 1330130465 $ 257,000.00 x 1,881 $ 136.63 1330130035 $ 241,000.00 x 1,785 $ 135.01 1330130475 $ 241,000.00 x 1,747 $ 137.95 1330130045 $ 241,000.00 x 1,785 $ 135.01 1330130485 $ 241,000.00 x 1,747 $ 137.95 1330130055 $ 244,000.00 x 1,785 $ 136.69 1330130495 $ 257,000.00 x 1,881 $ 136.63 1330130065 $ 241,000.00 x 1,785 $ 135.01 1330130505 $ 204,000.00 x 1,527 $ 133.60 1330130075 $ 257,000.00 x 1,914 $ 134.27 1330130515 $ 204,000.00 x 1,527 $ 133.60 1330130085 $ 193,000.00 x 1,386 $ 139.25 1330130525 $ 257,000.00 x 1,881 $ 136.63 1330130095 $ 193,000.00 x 1,386 $ 139.25 1330130535 $ 241,000.00 x 1,747 $ 137.95 13301,30105 $ 257,000.00 x 1,914 $ 134.27 1330130545 $ 241,000.00 x 1,747 $ 137.95 13301,30115 $ 250,000.00 x 1,785 $ 140.06 1330130555 $ 257,000.00 x 1,881 $ 136.63 13301,30125 $ 241,000.00 x 1,785 $ 135.01 1330130565 $ 204,000.00 x 1,527 $ 133.60 13301,30135 $ 241,000.00 x 1,785 $ 135.01 1330130575 $ 280,000.00 x 1,527 $ 183.37 13301,30145 $ 241,000.00 x 1,785 $ 135.01 1330130585 $ 308,000.00 x 1,881 $ 163.74 13301,30155 $ 260,000.00 x 1,914 $ 135.84 1330130595 $ 294,990.00 x 1,747 $ 168.86 13301,30165 $ 193,000.00 x 1,386 $ 139.25 1330130605 $ 296,000.00 x 1,747 $ 169.43 13301,30175 $ 193,000.00 x 1,386 $ 139.25 1330130615 $ 289,990.00 x 1,747 $ 165.99 13301,30185 $ 260,000.00 x 1,914 $ 135.84 1330130625 $ 308,000.00 x 1,881 $ 163.74 13301,30195 $ 241,000.00 x 1,785 $ 135.01 1330130635 $ 280,000.00 x 1,527 $ 183.37 1330130205 $ 241,000.00 x 1,785 $ 135.01 13301,40015 $ 224,000.00 x 1,482 $ 151.15 1330130215 $ 257,000.00 x 1,914 $ 134.27 13301,40025 $ 207,000.00 x 1,671 $ 123.88 1330130225 $ 193,000.00 x 1,386 $ 139.25 13301,40035 $ 217,000.00 x 1,427 $ 152.07 1330130235 $ 193,000.00 x 1,386 $ 139.25 13301,40045 $ 199,000.00 x 1,405 $ 141.64 1330130245 $ 260,000.00 x 1,914 $ 135.84 13301,40055 $ 201,000.00 x 1,388 $ 144.81 1330130255 $ 241,000.00 x 1,785 $ 135.01 13301,40065 $ 303,000.00 x 1,864 $ 162.55 1330130265 $ 241,000.00 x 1,785 $ 135.01 13301,40075 $ 282,610.00 x 1,527 $ 185.08 1330130275 $ 257,000.00 x 1,914 $ 134.27 13301,40085 $ 198,000.00 x 1,388 $ 142.65 1330130285 $ 193,000.00 x 1,386 $ 139.25 13301,40095 $ 200,000.00 x 1,405 $ 142.35 1330130295 $ 193,000.00 x 1,447 $ 133.38 1330140105 $ 217,000.00 x 1,487 $ 145.93 1330130305 $ 257,000.00 x 1,857 $ 138.40 1330140115 $ 214,000.00 x 1,487 $ 143.91

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1330140125 $ 197,000.00 x 1,405 $ 140.21 13301,40565 $ 207,000.00 x 1,437 $ 144.05 1330140135 $ 198,000.00 x 1,388 $ 142.65 13301,40575 $ 207,000.00 x 1,437 $ 144.05 1330140145 $ 303,000.00 x 1,864 $ 162.55 13301,40585 $ 224,000.00 x 1,487 $ 150.64 1330140155 $ 303,000.00 x 1,864 $ 162.55 13301,40595 $ 217,000.00 x 1,487 $ 145.93 1330140165 $ 201,000.00 x 1,388 $ 144.81 1330140605 $ 197,000.00 1,437 $ 137.09 1330140175 $ 197,000.00 x 1,405 $ 140.21 1330140615 $ 198,000.00 x 1,388 $ 142.65 1330140185 $ 214,000.00 x 1,487 $ 143.91 1330140625 $ 303,000.00 x 1,864 $ 162.55 1330140195 $ 224,000.00 x 1,685 $ 132.94 1330140635 $ 303,000.00 x 1,864 $ 162.55 1330140205 $ 207,000.00 x 1,685 $ 122.85 1330140645 $ 201,000.00 x 1,388 $ 144.81 1330140215 $ 224,000.00 x 1,685 $ 132.94 1330140655 $ 197,000.00 x 1,437 $ 137.09 1330140225 $ 207,000.00 x 1,482 $ 139.68 1330140665 $ 217,000.00 x 1,487 $ 145.93 1330140235 $ 303,000.00 x 1,864 $ 162.55 1330140675 $ 197,000.00 x 1,419 $ 138.83 1330140245 $ 198,000.00 x 1,388 $ 142.65 1330140685 $ 214,000.00 x 1,487 $ 143.91 1330140255 $ 198,000.00 x 1,388 $ 142.65 1330140695 $ 198,000.00 x 1,388 $ 142.65 1330140265 $ 303,000.00 x 1,864 $ 162.55 1330140705 $ 303,000.00 x 1,864 $ 162.55 1330140275 $ 207,000.00 x 1,482 $ 139.68 1330140715 $ 198,000.00 x 1,388 $ 142.65 1330140285 $ 224,000.00 x 1,685 $ 132.94 1330140725 $ 303,000.00 x 1,864 $ 162.55 1330140295 $ 224,000.00 x 1,671 $ 134.05 1330140735 $ 197,000.00 x 1,419 $ 138.83 1330140305 $ 207,000.00 x 1,482 $ 139.68 1330140745 $ 214,000.00 x 1,487 $ 143.91 1330140315 $ 303,000.00 x 1,864 $ 162.55 1330140755 $ 207,000.00 x 1,482 $ 139.68 1330140325 $ 197,500.00 x 1,388 $ 142.29 1330140765 $ 224,000.00 x 1,671 $ 134.05 1330140335 $ 198,000.00 x 1,388 $ 142.65 1330140775 $ 280,000.00 x 1,527 $ 183.37 1330140345 $ 303,000.00 x 1,864 $ 162.55 1330140785 $ 308,000.00 x 1,881 $ 163.74 1330140355 $ 207,000.00 x 1,482 $ 139.68 1330140795 $ 296,000.00 x 1,747 $ 169.43 1330140365 $ 224,000.00 x 1,671 $ 134.05 1330140805 $ 296,000.00 x 1,747 $ 169.43 1330140375 $ 207,000.00 x 1,482 $ 139.68 1330140815 $ 296,000.00 x 1,747 $ 169.43 1330140385 $ 224,000.00 x 1,671 $ 134.05 1330140825 $ 308,000.00 x 1,881 $ 163.74 1330140395 $ 214,000.00 x 1,487 $ 143.91 1330140835 $ 279,990.00 x 1,527 $ 183.36 1330140405 $ 195,000.00 x 1,419 $ 137.42 1330150015 $ 280,000.00 x 1,869 $ 149.81 1330140415 $ 198,000.00 x 1,388 $ 142.65 1330150025 $ 301,000.00 x 1,980 $ 152.02 1330140425 $ 303,000.00 x 1,864 $ 162.55 1330150035 $ 237,000.00 x 1,301 $ 182.17 1330140435 $ 306,000.00 x 1,864 $ 164.16 1330150045 $ 280,000.00 x 1,869 $ 149.81 1330140445 $ 198,000.00 x 1,388 $ 142.65 1330150055 $ 301,000.00 x 1,980 $ 152.02 1330140455 $ 197,000.00 x 1,419 $ 138.83 1330150065 $ 237,000.00 x 1,301 $ 182.17 1330140465 $ 214,000.00 x 1,487 $ 143.91 1330150075 $ 237,000.00 x 1,301 $ 182.17 1330140475 $ 217,000.00 x 1,487 $ 145.93 1330150085 $ 301,000.00 x 1,980 $ 152.02 1330140485 $ 197,000.00 x 1,437 $ 137.09 1330150095 $ 280,000.00 x 1,301 $ 215.22 1330140495 $ 198,000.00 x 1,388 $ 142.65 1330150105 $ 237,000.00 x 1,301 $ 182.17 13301,40505 $ 303,000.00 x 1,864 $ 162.55 1330150115 $ 301,000.00 x 1,980 $ 152.02 13301,40515 $ 303,000.00 x 1,864 $ 162.55 1330150125 $ 280,000.00 x 1,869 $ 149.81 13301,40525 $ 198,000.00 x 1,388 $ 142.65 1330150135 $ 280,000.00 x 1,869 $ 149.81 13301,40535 $ 197,000.00 x 1,427 $ 138.05 1330150145 $ 301,000.00 x 1,980 $ 152.02 13301,40545 $ 217,000.00 x 1,487 $ 145.93 1330150155 $ 237,000.00 x 1,301 $ 182.17 13301,40555 $ 224,000.00 x 1,487 $ 150.64 1330150165 $ 280,000.00 x 1,869 $ 149.81

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1330150175 $ 299,000.00 x 1,980 $ 151.01 1330170405 $ 291,000.00 x 1,928 $ 150.93 1330150185 $ 237,000.00 x 1,301 $ 182.17 1330170415 $ 283,000.00 x 2,075 $ 136.39 1330150195 $ 237,000.00 x 1,301 $ 182.17 1330170425 $ 286,000.00 x 1,928 $ 148.34 1330150205 $ 301,000.00 x 1,980 $ 152.02 1330170435 $ 244,000.00 x 1,547 $ 157.72 1330150215 $ 280,000.00 x 1,869 $ 149.81 1330170445 $ 243,000.00 x 1,547 $ 157.08 1330150225 $ 280,000.00 x 1,869 $ 149.81 1330170455 $ 286,000.00 x 1,928 $ 148.34 1330150235 $ 301,000.00 x 1,980 $ 152.02 1330170465 $ 283,000.00 x 2,075 $ 136.39 1330150245 $ 236,000.00 x 1,301 $ 181.40 1330170475 $ 284,000.00 x 2,075 $ 136.87 1330150255 $ 280,000.00 x 1,980 $ 141.41 1330170485 $ 286,000.00 x 1,928 $ 148.34 1330150265 $ 301,000.00 x 2,062 $ 145.97 1330170495 $ 243,000.00 x 1,547 $ 157.08 1330150275 $ 237,000.00 x 1,384 $ 171.24 1330170505 $ 244,000.00 x 1,547 $ 157.72 1330150285 $ 237,000.00 x 1,384 $ 171.24 1330170515 $ 286,000.00 x 1,928 $ 148.34 133050295 $ 301,000.00 x 2,062 $ 145.97 1330170525 $ 283,000.00 x 2,075 $ 136.39 1330150305 $ 280,000.00 x 1,908 $ 146.75 1330170535 $ 284,000.00 x 2,097 $ 135.43 1330150315 $ 237,000.00 x 1,384 $ 171.24 1330170545 $ 286,000.00 x 1,928 $ 148.34 1330150325 $ 280,000.00 x 1,908 $ 146.75 1330180405 $ 438,588.00 x 1,928 $ 227.48 1330150335 $ 301,000.00 x 2,062 $ 145.97 1330180415 $ 320,460.00 x 2,075 $ 154.44 1330170015 $ 284,000.00 x 2,075 $ 136.87 1330180425 $ 298,000.00 x 2,097 $ 142.11 1330170025 $ 284,000.00 x 2,075 $ 136.87 1330180435 $ 422,990.00 x 1,928 $ 219.39 1330170035 $ 290,000.00 x 1,928 $ 150.41 1330180445 $ 251,000.00 x 1,547 $ 162.25 1330170045 $ 243,000.00 x 1,547 $ 157.08 1330180455 $ 249,000.00 x 1,547 $ 160.96 1330170055 $ 244,000.00 x 1,547 $ 157.72 1330180465 $ 314,000.00 x 1,928 $ 162.86 1330170065 $ 286,000.00 x 1,928 $ 148.34 1330180555 $ 194,000.00 x 1,083 $ 179.13 1330170075 $ 284,000.00 x 2,075 $ 136.87 1330180565 $ 261,000.00 x 1,605 $ 162.62 1330170085 $ 283,000.00 x 2,075 $ 136.39 1330180575 $ 243,000.00 x 1,431 $ 169.81 1330170215 $ 246,000.00 x 1,547 $ 159.02 1330180585 $ 243,000.00 x 1,382 $ 175.83 1330170225 $ 283,000.00 x 2,075 $ 136.39 1330180595 $ 261,000.00 x 1,605 $ 162.62 1330170235 $ 436,548.00 x 2,075 $ 210.38 1330180605 $ 194,000.00 x 1,073 $ 180.80 1330170245 $ 244,000.00 x 1,547 $ 157.72 1330180615 $ 194,000.00 x 1,073 $ 180.80 1330170255 $ 243,000.00 x 1,547 $ 157.08 1330180625 $ 244,990.00 x 1,605 $ 152.64 1330170265 $ 349,990.00 x 1,547 $ 226.24 1330180635 $ 243,000.00 x 1,381 $ 175.96 1330170275 $ 428,388.00 x 2,097 $ 204.29 1330180645 $ 230,990.00 x 1,396 $ 165.47 1330170285 $ 284,000.00 x 2,075 $ 136.87 1330180655 $ 244,990.00 x 1,605 $ 152.64 1330170295 $ 283,000.00 x 2,075 $ 136.39 1330180665 $ 194,000.00 x 1,033 $ 187.80 1330170305 $ 286,000.00 x 1,928 $ 148.34 1330180675 $ 194,000.00 x 1,033 $ 187.80 1330170315 $ 244,000.00 x 1,547 $ 157.72 1330180685 $ 261,000.00 x 1,605 $ 162.62 1330170325 $ 243,000.00 x 1,547 $ 157.08 1330180695 $ 238,990.00 x 1,431 $ 167.01 1330170335 $ 286,000.00 x 1,928 $ 148.34 1330180705 $ 235,000.00 x 1,382 $ 170.04 1330170345 $ 283,000.00 x 2,075 $ 136.39 1330180715 $ 253,990.00 x 1,605 $ 158.25 1330170355 $ 284,000.00 x 2,087 $ 136.08 1330180725 $ 194,000.00 x 1,033 $ 187.80 1330170365 $ 286,000.00 x 1,928 $ 148.34 1330180735 $ 241,900.00 x 1,425 $ 169.75 1330170375 $ 246,000.00 x 1,547 $ 159.02 1330180745 $ 239,990.00 x 1,375 $ 174.54 1330170385 $ 244,000.00 x 1,547 $ 157.72 1330180755 $ 244,990.00 x 1,414 $ 173.26 1330170395 $ 283,000.00 x 2,079 $ 136.12 1330180765 $ 178,276.00 x 1,033 $ 172.58

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1330180775 $ 184,276.00 x 1,605 $ 114.81 1330230045 $ 227,500.00 x 1,747 $ 130.22 1330180785 $ 181,276.00 x 1,431 $ 126.68 1330230055 $ 230,000.00 x 1,747 $ 131.65 1330180795 $ 181,276.00 x 1,382 $ 131.17 1330230065 $ 245,000.00 x 1,881 $ 130.25 1330180805 $ 184,276.00 x 1,605 $ 114.81 1330230075 $ 204,000.00 x 1,527 $ 133.60 1330180815 $ 178,278.00 xx 1,033 $ 172.58 1330230085 $ 328,000.00 x 2,327 $ 140.95 1330220015 $ 280,000.00 x 1,869 $ 149.81 1330230095 $ 335,000.00 x 2,193 $ 152.76 1330220025 $ 301,000.00 x 1,980 $ 152.02 1330230105 $ 338,000.00 x 2,191 $ 154.27 1330220035 $ 237,000.00 x 1,301 $ 182.17 1330230115 $ 335,000.00 x 2,193 $ 152.76 1330220045 $ 237,000.00 x 1,301 $ 182.17 1330230125 $ 336,000.00 x 2,192 $ 153.28 133022,0055 $ 301,000.00 x 1,980 $ 152.02 1330230135 $ 349,410.00 x 2,325 $ 150.28 1330220065 $ 280,000.00 x 1,869 $ 149.81 1330230145 $ 328,000.00 x 2,356 $ 139.22 1330220075 $ 280,000.00 x 1,869 $ 149.81 1330230155 $ 337,000.00 x 2,168 $ 155.44 1330220085 $ 301,000.00 x 1,980 $ 152.02 1330230165 $ 335,000.00 x 2,161 $ 155.02 1330220095 $ 237,000.00 x 1,301 $ 182.17 1330230175 $ 328,000.00 x 2,371 $ 138.34 1330220105 $ 237,000.00 x 1,301 $ 182.17 1330230185 $ 204,000.00 x 1,527 $ 133.60 1330220115 $ 301,000.00 x 1,980 $ 152.02 1330230195 $ 257,000.00 x 1,881 $ 136.63 1330220125 $ 280,000.00 x 1,869 $ 149.81 1330230205 $ 241,000.00 x 1,747 $ 137.95 1330220135 $ 301,000.00 x 1,980 $ 152.02 1330230215 $ 241,000.00 x 1,747 $ 137.95 1330220145 $ 280,000.00 x 1,869 $ 149.81 1330230225 $ 257,000.00 x 1,881 $ 136.63 1330220155 $ 237,000.00 x 1,301 $ 182.17 1330230235 $ 204,000.00 x 1,527 $ 133.60 1330220165 $ 237,000.00 x 1,301 $ 182.17 1330230245 $ 280,000.00 x 1,527 $ 183.37 1330220175 $ 280,000.00 x 1,869 $ 149.81 1330230255 $ 308,000.00 x 1,881 $ 163.74 1330220185 $ 301,000.00 x 1,980 $ 152.02 1330230265 $ 296,000.00 x 1,747 $ 169.43 1330220195 $ 280,000.00 x 1,869 $ 149.81 1330230275 $ 296,000.00 x 1,747 $ 169.43 1330220205 $ 301,000.00 x 1,980 $ 152.02 1330230285 $ 296,000.00 x 1,747 $ 169.43 133022,0215 $ 237,000.00 x 1,301 $ 182.17 1330230295 $ 296,000.00 x 1,747 $ 169.43 1330220225 $ 237,000.00 x 1,301 $ 182.17 1330230305 $ 308,000.00 x 1,881 $ 163.74 1330220235 $ 280,000.00 x 1,869 $ 149.81 1330230315 $ 280,000.00 x 1,527 $ 183.37 1330220245 $ 301,000.00 x 1,980 $ 152.02 1330230325 $ 280,000.00 x 1,527 $ 183.37 1330220255 $ 280,000.00 x 1,869 $ 149.81 1330230335 $ 308,000.00 x 1,881 $ 163.74 1330220265 $ 301,000.00 x 1,980 $ 152.02 1330230345 $ 296,000.00 x 1,747 $ 169.43 1330220275 $ 237,000.00 x 1,301 $ 182.17 1330230355 $ 296,000.00 x 1,747 $ 169.43 1330220285 $ 237,000.00 x 1,301 $ 182.17 1330230365 $ 308,000.00 x 1,881 $ 163.74 1330220295 $ 280,000.00 x 1,869 $ 149.81 1330230375 $ 280,000.00 x 1,527 $ 183.37 1330220305 $ 301,000.00 x 1,980 $ 152.02 1330230385 $ 352,000.00 x 2,227 $ 158.06 1330220315 $ 280,000.00 x 1,869 $ 149.81 1330230395 $ 335,000.00 x 2,193 $ 152.76 1330220325 $ 301,000.00 x 1,980 $ 152.02 1330230405 $ 336,000.00 x 2,191 $ 153.35 1330220335 $ 237,000.00 x 1,301 $ 182.17 1330230415 $ 335,000.00 x 2,193 $ 152.76 1330220345 $ 237,000.00 x 1,301 $ 182.17 1330230425 $ 335,000.00 x 2,192 $ 152.83 1330220355 $ 301,000.00 x 1,980 $ 152.02 1330230435 $ 349,410.00 x 2,375 $ 147.12 1330220365 $ 280,000.00 x 1,869 $ 149.81 1330280015 $ 237,000.00 x 1,301 $ 182.17 1330230015 $ 204,000.00 x 1,527 $ 133.60 1330280025 $ 301,000.00 x 1,980 $ 152.02 1330230025 $ 245,000.00 x 1,881 $ 130.25 1330280035 $ 280,000.00 x 1,869 $ 149.81 1330230035 $ 230,000.00 x 1,747 $ 131.65 1330280045 $ 280,000.00 x 1,869 $ 149.81

AV Total for Assessed AV Total for Assessed 2012 Building 2012 Building APN Fiscal Year Value Per APN Fiscal Year Value Per Levy Sq Ft Levy Sq Ft 2012-2013 Sq. Ft. 2012-2013 Sq. Ft. 1330280055 $ 301,000.00 x 1,980 $ 152.02 1330300075 $ 335,000.00 x 2,161 $ 155.02 1330280065 $ 237,000.00 x 1,033 $ 229.43 1330300085 $ 348,978.00 x 2,371 $ 147.19 1330280075 $ 229,900.00 x 1,301 $ 176.71 1330300095 $ 148,697.00 x 1,437 $ 103.48 1330280085 $ 301,000.00 x 1,980 $ 152.02 1330300105 $ 224,000.00 x 1,671 $ 134.05 1330280095 $ 269,900.00 x 1865 $ 144.72 1330300115 $ 217,000.00 x 1,487 $ 145.93 1330280105 $ 237,000.00 x 1,301 $ 182.17 1330300125 $ 148,697.00 x 1,437 $ 103.48 1330280115 $ 301,000.00 x 1,980 $ 152.02 1330300135 $ 198,000.00 x 1,388 $ 142.65 1330280125 $ 280,000.00 x 1,869 $ 149.81 1330300145 $ 303,000.00 x 1,864 $ 162.55 1330280135 $ 237,000.00 x 1,301 $ 182.17 1330300155 $ 303,000.00 x 1,864 $ 162.55 1330280145 $ 301,000.00 x 1,980 $ 152.02 1330300165 $ 198,000.00 x 1,388 $ 142.65 1330280155 $ 280,000.00 x 1,869 $ 149.81 1330300175 $ 197,000.00 x 1,437 $ 137.09 1330280165 $ 237,000.00 x 1,301 $ 182.17 1330300185 $ 217,000.00 x 1,487 $ 145.93 1330280175 $ 301,000.00 x 1,980 $ 152.02 1330300235 $ 279,990.00 x 1,527 $ 183.36 1330280185 $ 284,900.00 x 1,869 $ 152.43 1330300245 $ 308,000.00 x 1,881 $ 163.74 1330290015 $ 194,000.00 x 1,033 $ 187.80 1330300255 $ 299,000.00 x 1,747 $ 171.15 1330290025 $ 261,000.00 x 1,605 $ 162.62 1330300265 $ 296,000.00 x 1,747 $ 169.43 1330290035 $ 243,000.00 x 1,382 $ 175.83 1330300275 $ 299,000.00 x 1,747 $ 171.15 1330290045 $ 243,000.00 x 1,431 $ 169.81 1330300285 $ 308,000.00 x 1,881 $ 163.74 1330290055 $ 261,000.00 x 1,605 $ 162.62 1330300295 $ 279,990.00 x 1,527 $ 183.36 1330290065 $ 194,000.00 x 1,033 $ 187.80 1330300405 $ 224,000.00 x 1,685 $ 132.94 1330290075 $ 194,000.00 x 1,033 $ 187.80 1330300415 $ 316,697.00 x 1,437 $ 220.39 1330290085 $ 261,000.00 x 1,605 $ 162.62 1330300425 $ 337,697.00 x 1,864 $ 181.17 1330290095 $ 243,000.00 x 1,396 $ 174.07 1330300435 $ 308,697.00 x 1,388 1330290105 $ 243,000.00 x 1,381 $ 175.96 Average Assessed Value/Sq Ft $ 140.80 1330290115 $ 261,000.00 x 1,605 $ 162.62 1330290125 $ 194,000.00 x 1,033 $ 187.80 Median Assessed Value/Sq Ft $ 140.72 1330290135 $ 194,000.00 x 1,033 $ 187.80 1330290145 $ 261,000.00 x 1,605 $ 162.62 Average $/sq ft - (sales price) $ 153.23 1330290155 $ 243,000.00 x 1,382 $ 175.83 1330290165 $ 243,000.00 x 1,431 $ 169.81 Median $/sq ft (sales price) $ 149.26 1330290175 $ 261,000.00 x 1,605 $ 162.62 1330290185 $ 194,000.00 x 1,033 $ 187.80 Average Assessed Value to Sales Price 110.28% 1330290195 $ 194,000.00 x 1,033 $ 187.80 Median Assessed Value to Sales Price 106.07% 1330290205 $ 261,000.00 x 1,605 $ 162.62 1330290215 $ 243,000.00 x 1,396 $ 174.07 $269,377,928.00 1,913,184 $ / Sq.Ft. 1330290225 $ 243,000.00 x 1,381 $ 175.96 $ 140.80 1330290235 $ 261,000.00 x 1,605 $ 162.62 1330290245 $ 194,000.00 x 1,033 $ 187.80 1330300015 $ 200,415.00 x 2,327 $ 86.13 1330300025 $ 196,415.00 x 2,168 $ 90.60 1330300035 $ 194,415.00 x 2,192 $ 88.69 1330300045 $ 200,415.00 x 2,325 $ 86.20 1330300055 $ 338,990.00 x 2,356 $ 143.88 1330300065 $ 336,000.00 x 2,161 $ 155.48

Recent resales that have occurred within RiverPark are depicted in Sample I (sample being defined as a statistical term used to define a population in which a sampling, or portion of that population, is used for comparison purposes to measure the accuracy of the assessor’s value) as follows:

SAMPLE I ASSESSED SALE Ratio SALES ASSESSED VALUE / SQ. PRICE / Sales $ APN SALES DATE PRICE VALUE SQ. FT. DIFFERENCE FT. SQ FT COMMENTS / Value 1320132055 Current $280,000.00 $244,000.00 $160.00 $36,000 1,525 $183.61 Short Sale 1.148 1320133045 Dec $315,000.00 $340,000.00 $138.27 $-25,000 2,459 $128.10 Short Sale 0.926 1320133105 Dec $300,000.00 $340,000.00 $138.27 $-40,000 2,459 $122.00 Short Sale 0.882 1320133115 March $275,000.00 $288,000.00 $142.50 $-13,000 2,021 $136.07 Short Sale 0.955 1320133125 March $376,000.00 $309,000.00 $125.15 $67,000 2,469 $152.29 1.217 1320133215 Current $300,000.00 $288,000.00 $142.50 $12,000 2,021 $148.44 Short Sale 1.042 1320134085 Current $350,000.00 $239,900.00 $104.21 $110,100 2,302 $152.04 Short Sale 1.459 1320135125 Current $305,000.00 $287,000.00 $167.54 $18,000 1,713 $178.05 Short Sale 1.063 1320140115 Jan $318,000.00 $336,000.00 $138.21 $-18,000 2,431 $130.81 Short Sale 0.946 1320140365 April $365,000.00 $300,000.00 $146.91 $65,000 2,042 $178.75 1.217 1320140415 May $330,500.00 $340,000.00 $138.27 $-9,500 2,459 $134.40 Reo 0.972 1320140425 Current $329,000.00 $288,000.00 $142.50 $41,000 2,021 $162.79 Short Sale 1.142 13201,40585 Current $399,900.00 $326,000.00 $156.43 $73,900 2,084 $191.89 Reo 1.227 1320150085 Jan $223,300.00 $233,000.00 $152.79 $-9,700 1,525 $146.43 Short Sale 0.958 1320150145 Dec $280,000.00 $326,000.00 $190.31 $-46,000 1,713 $163.46 Short Sale 0.859 1320150485 Feb $285,000.00 $238,000.00 $114.20 $47,000 2,084 $136.76 Reo 1.197 1320150495 Dec $247,200.00 $244,000.00 $105.99 $3,200 2,302 $107.38 Short Sale 1.013 1320170135 March $249,900.00 $237,000.00 $108.97 $12,900 2,175 $114.90 Short Sale 1.054 1320170145 April $229,300.00 $233,000.00 $111.48 $-3,700 2,090 $109.71 Short Sale 0.984 1320170465 Current $312,500.00 $232,000.00 $111.00 $80,500 2,090 $149.52 1.347 1320170525 Current $248,900.00 $229,000.00 $121.04 $19,900 1,892 $131.55 1.087 Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 94

ASSESSED SALE Ratio SALES ASSESSED VALUE / SQ. PRICE / Sales $ APN SALES DATE PRICE VALUE SQ. FT. DIFFERENCE FT. SQ. FT. COMMENTS / Value 1320180505 May $213,000.00 $212,260.00 $130.06 $740 1,632 $130.51 1.003 1320180695 Dec $208,000.00 $235,000.00 $140.55 $-27,000 1,672 $124.40 HUD Home 0.885 1320190225 March $229,000.00 $201,000.00 $130.77 $28,000 1,537 $148.99 1.139 Short Sale - Affordable 1320190375 Current $246,900.00 $227,000.00 $126.67 $19,900 1,792 $137.78 Housing 1.088 1320200295 April $237,450.00 $242,000.00 $181.14 $-4,550 1,336 $177.73 Short Sale 0.981 132,0210345 Current $250,000.00 $242,000.00 $177.68 $8,000 1,362 $183.55 HUD Home 1.033 1320251125 Feb $200,000.00 $217,000.00 $142.67 $-17,000 1,521 $131.49 Short Sale 0.922 1320251145 Current $235,000.00 $208,000.00 $131.31 $27,000 1,584 $148.36 Reo 1.130 1320251255 Jan $234,900.00 $208,000.00 $131.31 $26,900 1,584 $148.30 Reo 1.129 1320251415 March $308,000.00 $266,000.00 $146.48 $42,000 1,816 $169.60 1.158 1320251445 March $309,900.00 $266,000.00 $146.48 $43,900 1,816 $170.65 1.165 1320252295 Current $210,000.00 $201,000.00 $132.32 $9,000 1,519 $138.25 Reo 1.045 1320252425 April $220,000.00 $208,000.00 $127.29 $12,000 1,634 $134.64 Short Sale 1.058 1320252435 Current $220,000.00 $217,000.00 $132.80 $3,000 1,634 $134.64 Reo 1.014 1320260025 Current $235,000.00 $208,000.00 $131.31 $27,000 1,584 $148.36 Short Sale 1.130 1320260035 Current $369,900.00 $217,000.00 $132.80 $152,900 1,634 $226.38 REO 1.705 1320260105 Dec $203,000.00 $208,000.00 $136.75 $-5,000 1,521 $133.46 Short Sale 0.976 1320280025 April $225,000.00 $185,000.00 $136.03 $40,000 1,360 $165.44 HUD Home 1.216 1320280065 Current $195,000.00 $196,000.00 $125.96 $-1,000 1,556 $125.32 Short Sale 0.995 1320280075 April $205,000.00 $196,000.00 $125.96 $9,000 1,556 $131.75 Short Sale 1.046 1320280185 Dec $207,400.00 $206,000.00 $132.39 $1,400 1,556 $133.29 Short Sale 1.007 1330120605 Current $213,000.00 $194,000.00 $187.80 $19,000 1,033 $206.20 Short Sale 1.098 13301,30155 March $305,000.00 $260,000.00 $135.84 $45,000 1,914 $159.35 Short Sale 1.173 Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 95

ASSESSED SALE Ratio SALES SALES ASSESSED VALUE / SQ. PRICE / Sales $ APN DATE PRICE VALUE SQ. FT. DIFFERENCE FT. SQ. FT. COMMENTS / Value 1330130595 Feb $303,000.00 $294,900.00 $165.21 $8,100 1,785 $169.75 1.027 1330140115 Dec $240,000.00 $214,000.00 $141.16 $26,000 1,516 $158.31 Short Sale 1.121 1330140305 Dec $215,000.00 $207,000.00 $137.72 $8,000 1,503 $143.05 1.039 1330150335 Current $359,900.00 $301,000.00 $145.97 $58,900 2,062 $174.54 1.196 1330170285 Jan $308,500.00 $284,000.00 $165.79 $24,500 1,713 $180.09 1.086 1330170305 Current $279,000.00 $286,000.00 $178.30 $-7,000 1,604 $173.94 Short Sale 0.976 1330170375 Current $359,000.00 $246,000.00 $161.31 $113,000 1,525 $235.41 1.459 1330180715 April $280,000.00 $253,990.00 $160.04 $26,010 1,587 $176.43 1.102 1330220045 April $280,000.00 $237,000.00 $171.24 $43,000 1,384 $202.31 1.181 1330220345 March $217,000.00 $237,000.00 $171.24 $-20,000 1,384 $156.79 Short Sale 0.916 1330230385 Current $420,000.00 $352,000.00 $147.59 $68,000 2,385 $176.10 1.193 1330230435 Current $339,000.00 $349,000.00 $146.33 $-10,000 2,385 $142.14 Short Sale 0.971 1330290075 March $176,000.00 $194,000.00 $194.19 $-18,000 999 $176.18 Short Sale 0.907 1330290115 Feb $274,900.00 $261,000.00 $164.46 $13,900 1,587 $173.22 1.053

Overall Average Ratio (Sale $/Assessed Value) 1.083 Ratio of HUD, REO & Short Sales Only (Sales $/Assessed Value) 1.058 Average $/Sq Ft - (Sales Price) $153.23

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 96

Median $/Sq Ft (Sales Price) $149.26

Average $/Sq Ft - (Assessed Value - Sample Data Only) $141.47 Median $/Sq Ft (Assessed Value - Sample Data Only ) $139.41 Summary of Findings

Given the population & sample size, a 95% confidence factor implies a range of values +/- Total sample size 58 12.5%. Therefore the range of assessed values lies within the following parameters: Total population size 1,081 % Representation sample/population 5.37%

Avg sample/sq ft $153.23 Low end High end Avg assessed value/sq ft $140.80 $ 134.07 $172.38

Please see the next page for a summary statement, findings, and conclusions.

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 97

Valuation Re §IB – Apartment – Paseo Santa Clara & Serenade Appraisal Methodology Re §IA - Various Individually Owned APN’s This section involves two apartment complexes that have been constructed and are subject to the Following are the procedures I used to analyze the assessed values on 1,081 homes in CFD No. CFD No. 1 special tax levy in fiscal year 2012-2013. In this section, I have independently 1. I obtained a total of 58 recent sales in the area; of that total, 41, or 71%, were either real valued the Serenade, a 400 unit apartment complex, and my conclusion was compared to the estate owned (“REO”), short sales, or HUD sales. Since these sales undoubtedly reflect assessor’s value. Paseo Santa Clara, the affordable apartment complex, has 140 apartments. distressed sellers, my assumption is that those sales represent the low end of the market. I Following is a rental survey of apartments in Ventura County. The Serenade at RiverPark is the calculated the average assessed value per square foot of the 1,081 units I was evaluating, as well subject property. as the average sales price per square foot of the sample transactions I obtained.

For the full population of 1,081 units, the average assessed value per square foot was $140.80.

The average sales price per square foot of the sample units was $153.23. I wanted to perform a confidence interval analysis of my data to see what the variability of my sample sales price values would be at a 95% confidence level to validate my assumptions about the actual appraised values.

Discussions were held about the concept of confidence intervals with Mr. Doug Tuggle, former dean of the George L. Argyros School of Business at Chapman University and former dean of

Rice University Jones School of Business. Under his direction, the total number of units of the population (1,081) and 95% confidence factors were inputted into a software program from the web (Creative Research Systems), to test the confidence interval by inputting various percentage figures in order to determine the appropriate sample size (58). The confidence interval turned out to be 12.5% for a 95% range of expected per square foot sales price valuations. This means that in order to estimate the appropriate appraised value price per square foot from the average sample sales price per square foot ($153.23), there will be 95% level of accuracy for the appraised value units (1,081) given a range of ± 12.5% from the sample sales price figure

($153.23). That range turns out to be a low of $135.86 and a high of $174.68.

Since the actual calculated average assessed value per square foot was $140.80 on the 1,081 lots, and since 71% of my sales data represented REOs, short sales, or HUD sales, I feel confident in using the actual assessed values per square foot to represent market value.

I therefore conclude that the appraised value of the 1,081 units comprising 1,318,184 square feet will be a minimum of $140.80 per square foot, or a total appraised value similar to the assessed value of $269,377,928.

The following graph has been prepared as a result of the rental survey that was completed and summarizes the square footage and rental rates for comparable projects.

1 Bedroom x 1 Bath

The following graph has been prepared as a result of the rental survey that was completed and summarizes the square footage and rental rates for comparable projects. The following graph has been prepared as a result of the rental survey that was completed and summarizes the square footage and rental rates for comparable projects. 3 Bedroom x 1 Bath 2 Bedroom x 1 Bath

1 Bedroom x 1 Bath Property Name Size Rent $/sq.ft. Serenade at RiverPark 798 $ 1,289 $ 1.62 Tierra Vista 757 $ 1,332 $ 1.76 Woodside Village Archstone Vanoni 728 $ 1,458 $ 2.00 Arbors Parc Rose 988 $ 1,647 $ 1.67 Archstone Ventura 734 $ 1,545 $ 2.11 Ralston Courtyards 711 $ 1,407 $ 1.98 786 1,446 1.85 2 Bedroom x 2 Bath (also includes 2x1 floor plans as marked) Property Name Size Rent $/sq.ft. Serenade at RiverPark 1,077 $ 1,649 $ 1.53 Tierra Vista 1,059 $ 1,746 $ 1.65 Woodside Village 803 $ 1,569 $ 1.95 Archstone Vanoni 1,146 $ 1,812 $ 1.58 Arbors Parc Rose 1,292 $ 1,884 $ 1.46 Archstone Ventura 1,086 $ 1,869 $ 1.72 Ralston Courtyards 891 $ 1,175 $ 1.32 1,051 1,672 1.60 3 Bedroom x 2 Bath Property Name Size Rent $/sq.ft. The Vines at RiverPark 1,410 $ 2,324 $ 1.65 Serenade at RiverPark 1,261 $ 2,055 $ 1.63 Tierra Vista 1,303 $ 2,219 $ 1.70 Woodside Village 1,150 $ 1,909 $ 1.66 Archstone Vanoni 1,337 $ 2,122 $ 1.59 Arbors Parc Rose 1,527 $ 2,281 $ 1.49 Archstone Ventura Ralston Courtyards 1,329 2,133 1.61 *All numbers were multiple floorplans are available are averages.

Summary – Fair Market Rent

As indicated herein, the subject property (Serenade) appears to be at the lower end of the range for 1 and 2 bedroom apartments. The 3 bedroom apartments for the subject property appear to be at the mid to upper range.

I have concluded that the subject rents represent fair market rental.

The following comparable sales of apartments were considered against abstract capitalization rates, gross rent multiples, and price per unit for use in the income and market approach to value.

Appraisal Methodology Re §IB – Apartment - Paseo Santa Clara & Serenade Gross Rent Multiplier

The Serenade will be valued on the income and market approaches to value. As indicated The gross rent multipliers ranged from 10.7 to 11.80 (from comparable sales 1-5). I have previously, the current rental income is consistent with the rental comparables and is considered utilized 11.5 in my analysis: market rental. As a result, the income and market approach is presented below: Potential Gross Income $7,475,808 Gross Income Gross Rent Multiplier 11.5 Indicated Value $85,971,792, say $86,000,000 Market Data Approach Comparable sales 1-5 indicated a price per unit ranging from $176,322 to $265,432. Of these, comparables 1, 3, 4 and 5 are the most similar; these range from $220,680 to $268,979. I have considered $250,000 per unit. This indicates the following:

400 units x $250,000 per unit $100,000,000 Summary - Serenade The income approach had a value indicator of $85,520,000, the Gross Rent Multiplier had a value indicator of $86,000,000, and the market approach (utilizing the price per unit) had a value indicator of $100,000,000. Based on these calculations, I conclude a final value conclusion for the Serenade of $86,000,000. Paseo Santa Clara Apartments As Paseo Santa Clara is an affordable housing apartment project, rents are dictated by the Potential Gross Income $622,984 x 12 $ 7,475,808 income requirements set forth by the City of Oxnard. The fiscal year 2012-2013 assessed value Vacancy and Collection Loss at 5% (373,790) of $10,160,185 represents a $ / Unit of $72,575. This is significantly below the market comparables. Note that comparable 6 located in Oxnard has rental rates similar to Paseo Santa Effective Gross Income 7,102,018 Clara. The rents for these apartments range from $1,000 to 1,050 for these two bedroom units. Estimated Expenses at 40% of Effective Gross Income ($ 2,840,807) This comparable sold for $111,765 per unit. Net Operating Income $ 4,261,211 As previously stated, the rents are restricted and, for purposes of this appraisal, I am assuming The capitalization rates abstracted from sales ranged from a low of 4.75% to a high of 6.00%. that the assessed value is minimum market value. The high demand for apartments has put pressure on capitalization rates in the last several years. Because of the high demand for apartments and the potential for increasing the rental rates in the near future, the capitalization rates are at historical lows. I have concluded a 5% capitalization rate for the subject property which is calculated as follows:

$4,261,211 divided by .05 = $85,224,220, say $85,250,000

Valuation Re §IIA – Gap Properties – Individual Homeowners (SFA and SFD Constructed but Market Value not Yet Reflected on Assessor Roll; Permitted as of 01.01.2013)

This section refers to Gap Properties that have been constructed and not yet reflected on the current fiscal year 2012-2013 Assessor’s Roll as market value. I have considered the sales of the subject properties, as well as the new home sales currently being marketed and sold as well as Empire Economics report in arriving at the values for the Gap Properties.

Section IIA Gap Properties: (SFA and SFD Constructed but Market Value Not Yet Reflected on Assessor Roll; Permitted as of 01.01.2013) Assessor Parcel Number Sq. Feet Assessed Value Sales Price $ / Sq. Foot 1320 200 45 5 1,321 $125,488.00 3/1/2013 $235,431 $178.22 1320 200 46 5 1,352 $125,488.00 1/1/2013 $249,804 $184.77 1320 200 47 5 1,352 $125,488.00 3/1/2013 $242,941 $179.69 1320 200 48 5 1,321 $125,488.00 1/1/2013 $243,956 $184.68 1320 200 49 5 1,352 $125,488.00 1/1/2013 $246,418 $182.26 1320 200 50 5 1,352 $125,488.00 1/1/2013 $244,690 $180.98 1320 210 64 5 1,352 $125,488.00 1/1/2013 $246,690 $182.46 1320 210 65 5 1,321 $125,488.00 1/1/2013 $232,690 $176.15 1320 210 60 5 1,352 $125,488.00 1/1/2013 $245,547 $181.62 1320 210 61 5 1,352 $125,488.00 1/1/2103 $245,547 $181.62 1320 210 62 5 1,321 $125,488.00 1/1/2013 $236,409 $178.96 1320 210 63 5 1,352 $125,488.00 1/10/1900 $244,150 $180.58 1320 210 54 5 2,124 $259,000.00 1/1/2013 $339,372 $159.78 1320 210 55 5 1,800 $127,090.00 8/1/2012 $274,870 $152.71 1320 210 56 5 2,021 $127,090.00 1/1/2013 $300,900 $148.89 1320 210 57 5 2,005 $127,090.00 8/1/2012 $314,900 $157.06 1320 210 58 5 1,800 $127,090.00 9/1/2013 $268,328 $149.07 1320 210 59 5 1,800 $127,090.00 8/1/2012 $279,900 $155.50 1320 271 32 5 2,005 $127,090.00 8/1/2012 $307,775 $153.50 Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 120

Assessor Parcel Number Sq. Feet Assessed Value Sales Price $ / Sq. Foot 1320 271 33 5 2,124 $127,090.00 11/1/2012 $340,728 $160.42 1320 271 34 5 1,800 $127,090.00 11/1/2012 $280,088 $155.60 1320 271 35 5 2,021 $127,090.00 11/1/2012 $309,900 $153.34 1320 271 36 5 2,005 $127,090.00 1/1/2013 $309,900 $154.56 1320 271 37 5 1,826 $127,090.00 1/1/2013 $279,900 $153.29 1320 271 38 5 1,758 $127,090.00 1/1/2013 $270,747 $154.01 1320 271 39 5 2,005 $127,090.00 2/1/2013 $309,900 $154.56 1320 271 40 5 2,021 $127,090.00 2/1/2013 $306,229 $151.52 1320 271 41 5 1,800 $127,090.00 1/1/2013 $279,418 $155.23 1320 271 42 5 2,124 $127,090.00 1/1/2013 $339,160 $159.68 1320 271 43 5 2,162 $127,090.00 3/1/2013 $341,120 $157.78 1320 271 44 5 2,021 $127,090.00 3/1/2013 $313,950 $155.34 1320 271 45 5 2,005 $127,090.00 3/1/2013 $308,918 $154.07 1320 271 46 5 1,827 $127,090.00 3/1/2013 $274,675 $150.34 1320 271 47 5 1,758 $127,090.00 3/1/2013 $281,900 $160.35 1320 271 48 5 2,005 $127,090.00 3/1/2013 $315,597 $157.40 1320 271 49 5 2,021 $127,090.00 3/1/2013 $304,900 $150.87 1320 271 50 5 1,800 $127,090.00 3/1/2013 $272,900 $151.61 1320 271 51 5 2,124 $127,090.00 3/1/2013 $343,900 $161.91 1320 271 52 5 2,162 $127,090.00 4/1/2013 $351,823 $162.73 1320 271 53 5 2,021 $127,090.00 4/1/2013 $317,580 $157.14 1320 271 54 5 2,021 $127,090.00 4/1/2013 $328,843 $162.71 1320 271 55 5 2,162 $127,090.00 4/1/2013 $358,557 $165.85 1320 271 56 5 1,800 $127,090.00 3/20113 $272,900 $151.61 1320 271 57 5 2,124 $127,090.00 3/1/2013 $343,900 $161.91 1320 271 58 5 2,162 $127,090.00 4/1/2013 $351,823 $162.73

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 121

Assessor Parcel Number Sq. Feet Assessed Value Sales Price $ / Sq. Foot 1320 271 59 5 2,021 $127,090.00 4/1/2013 $317,580 $157.14 1320 271 60 5 2,021 $127,090.00 4/1/2013 $328,843 $162.71 1320 271 61 5 2,162 $127,090.00 4/1/2013 $358,557 $165.85 $6,213,006.00 $14,114,554

1330 110 15 5 1,713 68,637 $451,000 $6,281,643.00 $14,565,554

Note: APN 1330-110-155 was levied for 2012-2013, but had partial value for assessed value; thus, it is included as a Gap Property.

Appraisal Methodology Re §IIA – Gap Properties – Individual Homeowners (SFA and SFD Constructed but Market Value not Yet Reflected on Assessor Roll; Permitted as of 01.01.2013)

I have considered the subject sales, as well as the competing developments, as well as information provided in Empire Economic Reports in estimating market value which is reflected in the conclusion above as $14,565,554.

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 122 Valuation Re§IIB Bruce Rio SchoolDistrict Special TaxBonds,Series2013 W. FacilitiesDistrictNo.1 Community Summary Appraisal Report Hull & Associates, Inc. Page 123 This willbereportedunderAPN132-0-110-515. Total $10,288,703, Total Plan5: say Total Plan4: $10,300,000 Total Plan3: Total Plan2: Total Plan1: are reportedasfollows: They The salespricesareconsideredmarket value,subjecttotheseaffordablehousingrequirements. Census Bureaudata.Asaresult,thesesalespricesar determined forlowandmoderate tomeet income certaincriteria families baseduponUnitedStates moderate income); abuyermust complete aCityofOxnard affordablehousingapplicationandbe criteriasetforthbytheCityofOxnard(lowto result, thesalespricesarerestrictedbaseduponincome of theunitshavebeensoldexceptmodel projectand,as a complex. Thisisanaffordable housing This sectionrefersto nt ulig nt 2599 =$1,887,992 2 unitsx4buildings=8$235,999 =$1,869,592 2 unitsx4buildings=8x$233,699 =$1,847,920 2 unitsx4buildings=8$230,990 =$3,147,200 4 unitsxbuildings=16$196,700 =$1,535,999 2 unitsx4buildings=8$191,999 Plan 5has1,470sq.ftandtwounitsineachbuildingwithabasepriceof$235,999. Plan 4has1,347sqft.andtwounitsineachbuildingwithabasepriceof$233,699. Plan 3has1,266sq.ftandtwounitsineachbuildingwithabasepriceof$230,999. Plan 2has1,025sq.feetandfourunitsineachbuildingwithabasepriceof$196,700. Plan 1has985sqfeetandtwounitsineachbuildingwithabasepriceof$191,999.

– GapProperties Vista Urbana,a48unitcondominium (atotalof156unitswhencompleted). All

– CompleteAppraisal – VistaUrbana e influencedbyfactorsotherthanmarket value.

Appraisal Methodology Re §IIB – Gap Properties – Vista Urbana I have considered the subject sales which are restricted because of affordable housing requirements to represent the market value. I have also considered information provided in Empire Economic Reports in Valuation Re Section IIC – Gap Properties – The Collection estimating market value which is reflected in the conclusion above of $10,300,000. This section involves a shopping center, The Collection. As indicated in Limiting Condition No.

19, no lease information was provided on this property. As a result, I have concluded at a fair market rental based upon comparable shopping centers and office space. I have also considered estimates provided by Empire Economics in their report, MAS, which considered retail rental rates at $2.25 NNN. No. Location Sq. Footage Rental Rate (annual) Comments 1 Pacific View Mall, 970,424 $2.00 to $3.00 NNN Regional mall with Macy’s, Ventura Target, JC Penny, Trader Joes 2 195 Esplanade, 356,864 $2.00 to $2.50 NNN Power Center with 10 Oxnard, CA Anchor Tenants, Home Depot, TJ Max, Cost Plus World Market.

3 Rose Shopping 450,000 $2.00 to $2.50 NNN Community Center Center, Oxnard, shopping center anchored CA by Wal-Mart, Sam’s Club, and Vons. 4 SWC Rose Ave. & 72,515 $3.00 to $3.50 NNN New neighborhood Gonzales Road, shopping center anchored Oxnard, CA by grocery store. 5 4360 Main Street, 153,205 $2.50 NNN Neighborhood center Ventura, CA adjacent to Target. Tenants include Office Depot, Petco.

I have collected five rentals from shopping centers in the immediate area of the subject. No. 1

represents the regional mall in Ventura. No. 2 is located across from the subject and also has prominent US 101 freeway visibility. No. 3 is a large community shopping center located at Rose Ave., with major anchors and visibility. No. 4 is a new center located across from Rose Shopping Center but does not have freeway visibility. No. 5 is located at a prominent corner in Ventura,

Telephone Road and Main Street, and adjacent to a Super Target Center and is also located near the southbound freeway access to US Highway 101.

Also note the following graph which indicates the price trend of retail space in the City of Oxnard, County of Ventura, State of California:

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Summary Appraisal Report – Complete Appraisal Special Tax Bonds, Series 2013 Community Facilities District No. 1 Rio School District Special Tax Bonds, Series 2013 Bruce W. Hull & Associates, Inc. Page 124 Rio School District Bruce W. Hull & Associates, Inc. Page 125

The following rental survey was completed for office space. Retail Property Asking Rent - Lease Trends

Following is a summary of asking rents for retail and office space in Oxnard: No. Location Sq. Footage Rental Rate (annual) Comments 1 Solar Plaza, 1701 Solar 47,000 $30.00 Full Service Class A Building, built in Retail Property Asking Rent - Lease Trends (Source: LoopNet, Jul. 2013) Dr., Oxnard, CA 2001 2 The Times Building, 93 13,500 $48.00 Full Service Class A Building (Downtown Chestnut, Ventura, CA Ventura) 3 Ventura Professional 52,174 $24.00 Full Service Class A Building, high-rise, Building, 130 Eastman freeway visibility Ave., Ventura, CA 4 1000 Town Center Dr., 112,000 $25.25 Full Service Class A Building, high-rise, Oxnard, CA freeway visibility 5 Topa Financial Plaza, 291,983 $26.40 Full Service Class A Building, high-rise, 300 Esplanade Dr., freeway visibility Oxnard, CA

Office Property Asking Rent - Lease Trends Office Property Asking Rent - Lease Trends (Source: LoopNet, Jul. 2013)

vs. 3 mo. Jul 13 prior Y-O-Y

- $19.98 +0.3% -0.9% State

- $20.81 -1.2% -4.3% Metro

- $21.00 -1.2% -4.1% County

vs. 3 mo. The average asking rental rate per sq ft/year for Office Jul 13 prior Y-O-Y properties in Oxnard, CA as of Jul 13 was $22.95. This represents an increase of 3.2% compared to the prior 3 - $20.43 +0.4% +1.2% months, with an increase of +9.3% year-over-year. County- State wide, average rental rates in Oxnard are +0.0% higher at - $21.39 per sq ft/year for Office properties currently for lease. $21.36 0.0% +0.4% Metro - $21.39 +0.0% +0.6% County

- $22.95 +3.2% +9.3% City

The following sales were helpful for the analysis of “The Collection.” While there were no lifestyle shopping centers that sold in the vicinity, there were shopping centers and, as a result, they were helpful in abstracting the capitalization rate and the $ per square foot.

Source: Geoff Tranchina, Wilson Commercial Real Estate; Public Records, CBRE, Comps Data Service

Source: Geoff Tranchina, Wilson Commercial Real Estate, Public Records, CBRE, Comps Data Service Source: Marcus & Millachap, Public Records, CBRE, Comps Data Service

Source: Geoff Tranchina, Wilson Commercial Real Estate, Public Records, CBRE, Comps Data Service Source: Geoff Tranchina, Wilson Commercial Real Estate, Public Records, CBRE, Comps Data Service

Source: Megan Read, CBRE, Public Records, CBRE, Comps Data Service Source: Confidential Party, Public Records, CBRE, Comps Data Service

Appraisal Methodology Re Section IIC – Gap Properties – The Collection The income approach to value takes into consideration the income from the property and capitalizes it into an indicated value. As indicated, no income was provided to the appraiser for the subject property (see Limiting Condition No. 19). The following represents a rental survey in the immediate area. I have taken the above into consideration, as well as the estimate provided by Empire Economics in their report, MAS. I have concluded at $2.25 NNN for retail space within the subject property. In addition to the retail space at The Collection, there is 51,361 sq. ft. of office space. This is located on the second floor of Buildings 2100 and 3100. Currently, there are two tenants: Fidelity Title and the Management Company for The Collection. According to CBRE, the current asking rent for office space for the subject property is $25.20 per square foot annually (full service). Based on the above, I have considered the subject property to have a fair market rental of $24 per sq. ft. annually based upon a full service lease. The following summarizes the square footage on APN 132-0-110-365: Total Square footage 522,784 sq. ft. Total Leasable Retail 471,423 sq. ft. Total executed leases-retail ` 169,580 sq. ft. Total leasable office 51,361 sq. ft. Total executed leases-offices 13,046 sq. ft. The income for the buildings for The Collection that are located on APN 132-0-110-365 is estimated as follows: Retail 471,423 sq. feet x $27 per square foot =$12,728,421 Offices 51,361 sq. feet x $24 per square foot =$ 1,232,664 Total Estimated Gross Income $13,961,085

Vacancy & The Collection The next step in the income approach is to estimate the vacancy rate on a stabilized basis.

Source: Tom Lagos, Colliers International, Public Records, CBRE, Comps Data Service The reader should note that there are both retail and office uses in this project. It should also

be noted that the office is on the second floor located within a lifestyle shopping center. It is the appraiser’s opinion that this space will be more difficult to absorb and maintain Retail Net Income occupancy than other office space that it will be competing with in the marketplace. For the The net income from the retail is the deduction of the vacancy and collection loss, as well as retail, I will estimate a 5% vacancy rate on a stabilized basis. For the office, I will estimate a the deduction of expenses, from the potential gross income which is: 10% vacancy rate, based on a stabilized basis. This calculates as follows: Potential Gross Income $12,728,421 Gross Income – Retail Less Vacancy/Collection loss ($ 636,421) $12,728,421 x 5% =$ 636,421 Effective Gross Income $12,092,000 Gross Income-Office Less Expenses $1,232,664 x 10% =$ 123,264 5% Entertainment Expense ($ 604,600) $ 759,685 Net Income $ 11,487,4000 Effective Gross Income & Net Income Total Net Annual Income Next, the expenses will be estimated. In the case of the retail uses, the leases are typically Office $ 773,554 leased a NNN, or a Triple Net, lease. As defined earlier, NNN leases refer to all the all Retail $11,487,400 operating expenses that are incurred by the property owner in the maintenance and operation Total $12,260,954 of the commercial center (“Common Area Maintenance Charges”). In addition, the tenant is responsible for all utility expenses. In the case of the subject property, certain entertainment The next step is to determine an appropriate capitalization rate to use in the capitalization of and other events exist that I believe would not be typical of common area maintenance the income. As noted earlier in this report, there were 8 shopping center sales collected. charges. These include concerts, wine and tasting events, and other entertainment in the These had a capitalization rate ranging from a low of 5.20% to a high of 7.68%. The lifestyle center. I believe it would be difficult to “pass on” these expenses to the tenants. I majority of the transactions indicated a capitalization rate in the 6% range. I have considered have estimated 5% for these expenses. Offices are rented on a modified or full service basis. 6.75% rate in the following analysis: In the case of the subject property, leases are offered on a full service lease basis. This type of lease provides for the property owner to pay for all expenses; thus, the tenant’s only $12,260,594 divided by .0675 = $181,643,763, say $181,700,000 responsibility is the payment of the lease. In this case, the operating expenses can vary, but it Market Data Approach has been my experience that a range of $6.00 to $7.00 per square foot can be estimated as the The eight comparable sales collected have a price per square foot of leasable area ranging operating expenses of a good quality office building. Thus, following are the estimated from $139.39 to $352.36. It should be noted that the majority of these sales are expenses: neighborhood commercial sales. Indeed, there were no sales comparable of a lifestyle center Office Annual Income $ 1,232,664 similar to the subject property. The highest price per square foot of $352.36 refers to a Less Vacancy ($ 123,264) community shopping center in Northridge, California. Utilizing $355 per square foot and Effective Gross Income $ 1,109,400 multiplying the gross leasable area of 522,784 results in the following value: Less Expenses 51,361 sq. feet x $6.50 per sq. ft. ($ 335,846) 522,784 sq. ft. x $355 per sq. ft. = $185,588,320 say $185,600,000 Net Annual Income $ 773,554

Valuation Re §IID – Gap Properties – Target Stabilized Value Conclusion This section refers to the Target department store at The Collection which was The stabilized value has a range from $181,700,000 to $188,600,000. I have concluded at constructed in 2010 and occupies a 148,555 square foot building built and occupied $185,000,000. The reader should note that this is the stabilized value at 95% occupancy by Target. The income and market data approaches to value were also considered in (90% for the offices); that is not the case as there needs to be absorption of space as well as this section. tenant improvements of this space accounted for in the “as-is” analysis. There are 301,843 Appraisal Methodology Re §IID – Gap Properties – Target Department Store square feet of retail space and 38,315 square feet of office space for a total of 340,158 square In determining a value for the subject property, I have relied on the income approach. feet to be absorbed. Empire Economics estimates that there is 3+ years of absorption needed The following rental comparables for big box retail were considered: for this center to be absorbed to a stabilized basis. I have estimated that it would take 4 years Data Location Square Date Annual which is an annual absorption of 85,040 square feet per year. The calculation for the Footage Rental absorption and the required tenant improvements is located in the addendum; please refer to Rate for details. The total amount for the absorption and tenant improvements is $32,300,000. 1 324 Hampshire, Thousand Oaks, CA 104,000 Current $18.00 This will be deducted from the stabilized value to arrive at an as-is value. 2 1305 Channel Islands Blvd, Oxnard 104,120 Current $16.00 Stabilized Value $ 185,000,000 CA Absorption and Tenant Improvements ($32,300,000) 3 2301 Rose Avenue, Oxnard, CA 40,000 Current $24.00 “As-Is” Value $152,700,000, say $152,700,000 (negotiable)

4 88 E. Orangethorpe, Anaheim, CA 100,000 11/2012 $9.60

5 4550 Pico Blvd., Los Angeles, CA 140,000 2010 $24.00

Data No. 1 relates to an old K-Mart store in Thousand Oaks which is currently available

for sublease. Home Depot leased with the intention of renovating the space into Home

Depot but the permit was denied by the City. The Home Depot lease extends until 2025.

Data No. 2 is a former K-Mart store for lease in Oxnard. There are 104,120 sq. ft.

available with maximum contiguous being 65,000 sq. ft. This is a substantially inferior

building and location when compared to the subject property.

Data No. 3 is a former Sports Authority space within the Rose Shopping Center. Freeway

visibility (signage) is available. The 40,000 sq. ft. is available for lease with negotiated

terms but quoted at $24.00 per square foot.

Data No. 4 is a lease to Wal-Mart on the basis of $9.60 annually. Inferior in location and

building quality.

Data No. 5 is a lease to Lowe’s for 140,000 square feet in a community shopping center consisting of 300,000 square feet. The lease is $24 annually for a 120 month term. Valuation Re §IIE – Gap Properties – Cinemark Century Theater Based on the comparables, I have concluded at $21 annually for the subject property. This section refers to the Cinemark Century Theatres at The Collection which was constructed in 148,555 sq. ft. x $21 $ 3,119,655 2007 and occupies a 59,350 square foot building built and occupied by Cinemark Theater. The Vacancy and Collection Loss (3%) ($ 93,590) income and market data approaches to value were also considered in this section.

Effective Gross Income $ 3,026,065 Appraisal Methodology Re § IIE – Gap Properties – Cinemark Century Theater Expenses –NNN $ 0 This is a special purpose property that is improved with a state of the art 16-screen theater. The Net Operating Income $3,026,065 most applicable methods of valuation are considered to be the income and market data approaches. In the estimation of a capitalization rate I have found no sales of leased investments of Rental Survey big box retail. I have considered the capitalization rates abstracted from the sales utilized It should be noted that no information was provided to the appraiser regarding the current lease in the valuation of The Collection and have concluded at 6.5% rate. which was executed in June 2008. The following information was collected as it relates to theaters $3,026,065 divided .065 $46,554,846, say $46,500,000 in Ventura County. No comparable sales of big box retail were discovered. The sales that were collected for The “Buenaventura 6 Theater” located in Ventura, California is a second run theater with significant The Collection were considered in this analysis. While these sales were neighborhood or functional obsolescence besides being in an aging community shopping center. The miniplex had community shopping center sales, they were retail uses and did have “Big Box” anchor been leased to Mann Theaters for 20 years until 2,005, with the ending rent being $1.33 per square tenants as part of the shopping center. I have considered $300 per sq. ft. for the market foot on a triple net basis. It is currently leased to Regency Theaters on a month to month gross basis data approach. of $20,000 to allow for redevelopment. The property is adjacent to a 23,000 square foot office 148,855 sq. ft. x $300 $44,656,500, say $44,500,000 building that shares surface parking across the street from the aging Rivera Shopping Center. “Plaza Stadiums Theaters 14” located in downtown Oxnard, California is in a center that is in Summary central Oxnard. This was a “city redevelopment project” and provided for guaranty and payment if Two approaches to value were considered. The income approach indicated $46,500,000, income did not reach certain levels. This lease was executed December 22, 2003, for a minimum 25 while the market data approach indicated $44,500,000. I have put more emphasis on the year period. There is one (1) option to extend for ten (10) years. The base rent is $111,300 per income approach in arriving at a final value conclusion of $46,500,000. month with a ten percent 10% increase every sixty (60) months after the commencement date, with provisions to suspend the sixty (60) month escalation if guaranty proceeds are used to fund shortfalls in rent and triple net expenses. Shortfalls have been consistent throughout the history of the operation of this theater. The average annual shortfall was estimated to be .81 cents per square foot, which suggests that the monthly break even base would be approximately $1.75 per square foot. When dealing with special purpose properties such as theaters, it is necessary to consider comparable special purpose properties located in various counties of the state where the subject special purpose property is located.

Edwards Cinemas 18, 1180 W. San Marcos Blvd., San Marcos, California is leased to Edwards Theater and has a lease expiration date of March 2019. The lease provides for seven percent (7%) million in annual revenue, and the durability is considered good. While no lease information was increases every five years. The current lease rate is $1.80 per square foot on a triple net basis. available (Limiting Condition No. 21) leases of this sort are typically 20 years or more in duration. Roxy Theater, Santa Rosa, California, is a state of the art 14-screen theater located in downtown Santa Rosa. The lease, which expires in 2029, provides for a ten percent 10% escalation every five The following information was considered in the selection of a capitalization rate: (5) years. The current rental rate is $1.80 per square foot on a triple net basis. ¾ The Edwards Cinema in San Marcos sold in March, 2011 for a reported $24,305,000, or at A recent article in The Appraisal Journal (Spring 2013) entitled “The Business of Show Business capitalization rate of 8.97%. Edwards Cinema is the current tenant on a long term lease that Act II: Appraising the Movie Theater” discusses the valuation of movie theaters. The authors expires in 2019. present market data and rental information, but do not provide specific locations, other than suburb, ¾ Regal Cinemas of the Riverside Plaza, Riverside, California sold in September, 2012. This rural, etc. The author notes six comparable rentals ranging from rural to suburb of metro area. Of was a portion of the larger regional shopping mall which consisted of 475,211 square feet. the six comparable rentals, one is the only downtown theater in the metropolitan area of 5,000,000 The sales price that was allocated to the Regal Cinemas was $18,536,403. The capitalization people that is a 20-screen theater, constructed in 2006, and part of a larger 153,979 square foot rate abstracted for the entire center’s transaction is 5.76%. center. The rental rate is $2.07 per square foot with no rental increases until 2020. The other item ¾ United Artist Emery Bay Stadium 10 is located in the Public Market, a lifestyle center in worth noting is a 30-screen megaplex that is located in the suburb of a large metropolitan area which Emeryville, California. This center sold with an allocated price for the theater being was leased to AMC Theaters and has 17 years remaining on a 25 year lease. The current lease rate $14,206,609. The sale of the center took place November 11, 2012. The abstracted is $2.19 per square foot. This information is provided as “background” information and provides capitalization rate was 5.3%. secondary information to the data that I have collected. ¾ In the Appraisal Journal, supra, the author indicated six (6) sales with capitalization rates Based on the comparables, and taking into consideration the location, quality, and age of the theater, which ranged from 6.45% to 9%. However, it should be noted that the timeframe of these I have considered a rental rate of $1.80 per square foot on a triple net basis. This calculates as capitalization rates are 2008 through 2010. It should also be noted that the capitalization follows: rates of the three (3) theater sales which had 16 to 20 screens ranged from 6.45% to 6.60%. 59,350 sq. ft. x $1.80 -$106,830 x 12 = $1,281,560 Vacancy and Collection loss 2% ($ 25,639) I have selected 6.50% as an overall capitalization rate which is calculated as follows: Effective Gross Income $1,255,921 Net Income Capitalization Rate Indicated Value Expenses (2%) ($ 25,118) $1,230,803 divided .065 $18,935,430, Net Operating Income $1,230,803 say $19,000,000 Capitalization Rate Market Data Approach In the determination of a capitalization rate, the quality, quantity, and durability of the income In the market data approach, the price per screen and the price per square foot will be considered. stream has an influence on the selection of a capitalization rate. The Edwards Cinema 18 in San Marcos, California sold on March 5, 2001, for $24,305,000 which In the case of the subject property, the quality of the income stream is determined by the type of indicates a price per screen of $1,350,277 and a price per square foot of $241.72. tenant. Cinemark is the third largest company in the motion picture exhibition industry with 289 The 16-Screen Century Theater in Pleasant Hill, California sold in March, 2013, for $20,927,274 theaters and 3,916 screens in 39 states. It is also ranked either 1st or 2nd by box office revenues in 25 which represents a price per screen of $1,307,954 and $280.84 price per square foot. of the top 30 U.S. Markets as of December, 2012. The quantity of income is significant, with over 1

Valuation Re §IIF – Gap Properties – Avenue II The Regal Cinema 16-Screen Theater sold as part of the Riverside Plaza Center transaction in This section concerns APN 133-0-090-125 which currently lists Standard Pacific as the owner on September, 2012. The allocated price for the theater was reported to be $18,536,403, which the 2012-2013 Assessor’s Roll; however, all of the units have been sold except for one. This is a represents a price per screen of $1,158,525 and a price per square foot of $205.96. project referred to as Avenue II,. I have considered the subject sales, as well as the competing The Emeryville Bay Stadium 10 transaction is interesting in that it was part of a unique lifestyle developments, as well as information provided in Empire Economic Reports in estimating market center, The Public Market, in Emeryville, California. This center, similar to the center in which the value. The following is a list of the same. subject theater is located -- a walkable, mixed use property integrating shopping, dining, and Avenue II community life, with cultural offerings such as art and music and science education displays by the This is eight units of a project, Avenue II. Eight units have been constructed and five (5) have been San Francisco Exploratorium. In addition, there are green living demonstration projects, electric sold to homeowners. The developer, Standard Pacific, still owns three (3) of the units. The vehicle charging stations, outdoor plazas, and seating. The transaction took place in November assessor has not mapped this with new assessor’s parcel numbers and this is currently one APN. 2012, and the allocated price for the theater was $14,206,609, which represents a price per screen of Appraisal Methodology Re §IIF – Gap Properties – Avenue II $1,420,661 and a price per square foot of $253.60. The sales that have occurred are as follows: The price per screen from the market data ranged from $1,158,525 to $1,420,661. The price per square foot ranged from $205.96 to $280.84. It should be noted that that the six sales that are cited Homesite Plan Sq. Footage Sales Date Sales Price in the Appraisal Journal, supra, had a price per screen from $877,066 to $1,316,111, with four of 17 2 2,327 08.2013 $409,000 the six ranging from $1,250,000 to $1,316,111. The price per square foot from these transactions 18 1 2,167 05.2013 $367,000 19 1 2,192 08.2013 $407,000 ranged from $277 to $340. Utilizing a price per screen of $1,250,000, and a price per square foot of 20 2 2,325 N/A $409,000 $300 calculates as follows: 21 1 2,356 04.2013 $358,000 22 1 2,168 04.2013 $366,000 18 screens x $1,250,000 per screen=$22,500,000 23 1 2,161 04.2013 $356,500 59,350 sq. ft. x $300 per sq. foot= $17,805,000 24 2 2,371 04.2013 $365,000 Total $3,037,500 The price per square foot is given less weight due to the unique features of theaters, open Based on the current sales, as well as the comparable developments, as well as relying on Empire area, lobby area, etc. Giving the most weight to the price per screen, a market data Economics Report, the current sales are considered to represent current market value. conclusion of $21,000,000 is estimated for Cinemark Century Theater.

Value Conclusion The income and market data approaches were considered in the valuation of the theater. The income approach indicates a value of $19,000,000, while the market data approach indicates a value of $21,000,000. I have considered $20,000,000 as the final value conclusion for Cinemark Century Theater.

Based on the comparables mentioned I estimate Plan 1 would fall within a $197 to $216 per square Valuation Re §IIG – Gap Properties -- The Vines foot range, say $205 per sq. foot. Plan 2 would also fall within this range, say $200 per sq. foot. The Vines is an 80 unit condominium project that has been constructed in ten six unit buildings and Plan 3 would also be within this same range, say $195 per sq. foot. four five unit buildings. There are three floor plans available, all three bedrooms with two and half This calculates to a base price as follows: baths. Plan 1- 1,301 x $205 = $266,705, say $267,000 The units were built similar to what the previous builder, Centex, built in a product that was referred Plan 2-1,375 x $200 = $275,000 to as Promenade. Plan 3- 1,554 x $195 = $303,300, say $303,000 The new developer, Corona Pacific, has opted to lease these units instead of marketing them for sale, The prices and absorption, as well as the expenses for selling the units (and profit) is incorporated believing that the market will improve. I am of the opinion that the market has rebounded from the into a DCF, which is included in the Addendum of this report. depths of the longest real estate recession since the Great Depression. Reference is made to Empire The results of the DCF indicated a bulk value for the 80 units as $19,750,000. For details, please Economics Report for more details. Historically, residential developments marketed in RiverPark refer to the addendum. have experienced 2 units per month in sales. I believe the current economic climate would generate 4 sales per month, with absorption of the 80 units occurring in 20 months.

The units are currently being leased from $2,100 to $2,700 per month.

Appraisal Methodology Re §IIG – Gap Properties -- The Vines

If marketed for sale I believe the following comparable projects in RiverPark provide a basis for estimating the market value for the units.

1. East End, currently being market with square footages ranging from 1,478 to 2,124

with a value ratio of $197 (source Empire Economics).

2. Waypointe with current active sales program, with square footage ranging from

1,388 to 1,864 with a value ratio of $216 (source Empire Economics).

3. Boardwalk, which has closed out their sales program, with square footages ranging

from 1,800 to 2,124 with a value ratio of $159 (source Empire Economics).

The subject has three floor plans, all three bedrooms two and one half baths.

Plan 1-1,301 sq. ft.

Plan 2- 1,375 sq. ft.

Plan 3-1,554 sq. ft.

Valuation Re §IIH – Gap Properties – The Mosaic

The income and market approaches will be considered in the valuation of this property. It should 2 Bedroom x 1 Bath be noted that this 224 unit apartment project is currently under construction. According to a representative of Wolf Company, the developer of the project, there have no leases signed, but they anticipate the first occupancy in December 1, 2013. The Wolf representative also indicated that $11,000,000 in remaining costs for the project to be complete. As in the valuation of the property a deduction for the remaining costs, as well as deduction for the absorption of units to a stabilized occupancy. In addition, a risk will be attributed to the project due to the fact it is under current construction. Appraisal Methodology Re §IIH – Gap Properties – The Mosaic Income Approach The developer did not provide any rental amounts that they anticipate for the project. I have relied on the rental survey that was accomplished for the valuation of The Serenade Apartments. A summary of the rental survey is located below. 1 Bedroom x 1 Bath

It should be noted that there are no studio apartments in the rental survey. Indeed, the subject is unique in that the studios are limited in the high end, luxury rental market. I am aware of studios in the Oxnard/Ventura market, but they typically are in smaller residential income units (e.g. less than 10 units). Considering the data from this market, I estimate the fair market rental for the studio to be $900. The above chart indicates the average 1 bedroom rental rate is $1,446 for an average 786 sf. 1 bedroom. I have considered $1,450 in my analysis. The 2 bedroom average is $1,672 for an average 1,051 square foot 2 bedroom apartment. I have considered $1,650 to $1,700 in my analysis. Following is an estimate of the scheduled income for the property:

Studio percentage of studio apartments. 52 x $ 900x 12 $ 561,600 224 units x $175,000 per unit = $39,200,000 1 bedroom 72 x $1,450 x 12 $1,252,800 Summary 20 x $1,450 x 12 $ 348,000 The Income approach had a value indicator of $39,950,000, the Gross Rent Multiplier had a 2 bedroom value of $40,500,000 and the market approach (utilizing the price per unit) had a value 42 x $1,700 x 12 $ 856,800 20 x$1,650 x 12 $ 396,000 indicator of $39,200,000. I have concluded at $40,000,000. 18 x $1,700 x12 $ 367,200 $3,782,400 The above value is estimated on a stabilized occupancy rate of 95% and a completed Vacancy and Collection Loss: building. This is not the case. There is an estimated $11,000,000 remaining costs according to

An estimated 5% vacancy and collection loss ($189,120) the developer. In addition the 244 units must be rented. I have considered the time to absorb Effective Gross Income $3,593,280 these units as well as applied a contingency and risk for completing this project. Please refer

Expenses: to the addendum for this calculation.

Estimated at 40% of Effective Gross Income ($1,437,312) Value at Stabilized Occupancy 95% $40,000,000 Less: Absorption Contingency & Risk ($ 6,000,000) Net Operating Income $ 2,155,968 Less: Cost to Complete ($11,000,000) As Is Value $23,000,000 In considering capitalization rates I have considered the sales that were collected in the valuation of The Serenade apartments. These rates ranged from 4.75 to 6%. I have considered 6% due to the fact that almost 25% of the subject project is studios, atypical for the high end apartments in the Oxnard/Ventura market.

$2,155,968 divided by .06=$35,932,800, say $39,950,000

Gross Rent Multiplier

The sales that were collected for the Serenade valuation indicated a gross rent multiplier that ranged from 10.7 to 11.8 (from comparable sales 1 -5). I have used the lower end of the range due to the high percentage of studio apartments. This calculates as follows: Gross Income $13,782,400 Gross Rent Multiplier 10.7 Indicated Value $40,471,168, say $40,500,000

Market Data Approach

The comparable sales that were collected (1-5) indicated a price per unit ranging from

$176,322 to $265,432. I have considered the lower end of the range due to the high

Valuation Re §IIIA – Gap Properties – Individual Homeowners (SFA and SFD Valuation Re §IIIB - Vista Urbana Condominiums Constructed but Market Value Not Yet Reflected on Assessor Roll; Permitted 01.02.2013 through 06.01.2013) This is an affordable housing condominium project. There are 4 buildings, of which 2 are

completed. The buildings under construction are estimated to be completed in November, 2013. These represent homes that have been built and constructed and sold to individual homeowners. There are restrictions on the selling price which is subject to the income requirements set forth by They are located in Waypointe, Pacific Crossings, and Reflections residential developments. the City of Oxnard. As a result the sales prices are impacted by these requirements. The sales prices Appraisal Methodology Re §IIIA - Individual Homeowners (SFA and SFD Constructed but Market Value Not Yet Reflected on Assessor Roll; Permitted 01.02.2013 through 06.01.2013) are considered to be market value, subject to the income requirements of the City of Oxnard.

The sales are considered to be market value. This is based upon the sales that have occurred in each All of the units have been sold. of the developments, the competing developments, and the information from Empire Economics Appraisal Methodology Re §IIIB - Vista Urbana Condominiums MAS. I have considered the subject sales which are restricted because of affordable housing requirements INDIVIDUAL HOMEOWNERS to represent the market value. I have also considered information provided in Empire Economic Assessed Appraised Sq. Sales Sales Reports in estimating market value which is reflected in the conclusion below. Each building has APN Value Value Footage Date Price $/SF Project twelve units with the following sales prices per model. 1330300195 $148,697 $275,000 1,388 Jun-13 $275,900 198.78 Waypointe Plan 1 (2bd, 2br; 998 sq. ft.) - $141,500 x 2 = $ 283,000 1330300205 $148,697 $370,000 1,864 Apr-13 $370,000 198.50 Waypointe 1330300215 $148,697 $285,000 1,437 Jun-13 $285,900 198.96 Waypointe Plan 2 (2 bd, 2 br; 1,025 sq. ft.) - $196,700 x 4 = $ 786,800 1330300225 $148,697 $310,000 1,437 Jun-13 $312,396 217.39 Waypointe Plan 3 (3bd, 2br; 1,266 sq. ft.) - $233,900 x 2 = $ 467,800 1330300305 $148,697 $305,000 1,487 Jul-13 $306,900 206.39 Waypointe Plan 4 (3bd, 2 br; 1,347 sq. ft.) - $233,999 x 2 = $ 935,600 1330300315 $148,697 $290,000 1,437 Jul-13 $290,900 202.44 Waypointe Plan 5 (3bd, 2 br; 1,470 sq. ft.) - $235,999 x 2 = $ 471,998 1330300325 $148,697 $310,000 1,388 Jul-13 $311,480 224.41 Waypointe 1330300335 $148,697 $375,000 1,864 Jul-13 $373,900 200.59 Waypointe Total $2,945,198 Pacific No. of Buildings 4 1330180475 $212,260 $440,000 2,075 Jul-13 $440,900 212.48 Crossing Pacific Total $11,780,792 1330180485 $212,260 $450,000 2,075 Jul-13 $450,046 216.89 Crossing The costs to complete the buildings have been estimated at $1,000,000 by a representative of the Pacific 1330180495 $212,260 $440,000 1,928 Jul-13 $443,056 229.80 Crossing developer. Pacific 1330180505 $212,260 $395,000 1,547 Jul-13 $395,900 255.91 Crossing A deduction of $1,000,000 from $11,780,792 equals $10,780,792. 13202,0051 In addition, 10% is subtracted from this amount for contingency and risk (even though all of the 5 $148,697 $270,000 1,475 May-13 $270,568 183.44 Reflections 13202,0052 units have been sold); 10% x $11,780,792 = $1,178,072, say $1,180,000. 5 $148,697 $260,000 1,352 May-13 $260,241 192.49 Reflections “As-Is” Condition 13202,0053 5 $148,697 $255,000 1321 May-13 $253,256 191.72 Reflections Total Completed $11,780,792 13202,0054 Less Costs to Complete <$ 1,000,000> 5 $148,697 $255,000 1,352 May-13 $256,900 190.01 Reflections Less Risk & Contingency <$ 1,180,000> Total $2,633,404 $5,285,000 “As-Is” Value $ 9,600,792, say $ 9,600,000

Section IIID - Waypointe Condominiums - Standard Pacific Valuation Re §IIIC - East End Condominiums

th This is a model complex for East End Condominiums. These units have been updated with These represent the remaining inventory for this project (15 and last phase). The units are numerous upgrades. The base prices for these condominiums are as follows. under construction with completion scheduled for August 31, 2013. A representative for Plan 1- $ 289,900 Standard Pacific has estimated that $15,000 remains in costs (flooring and kitchen countertops) Plan 2- $ 342,410 for each unit. Plan 3- $ 369,900 Appraisal Methodology Re §IIID - Waypointe Condominiums - Standard Pacific Total $1,002,210 The units are offered for sale at the following prices and are considered to be market value, based on the historical sales of the subject project (Waypointe) as well as the competing Appraisal Methodology Re §IIIC - East End Condominiums Taking into consideration the current sales activity within East End Condominiums as well as the developments within RiverPark, and also taking into consideration the results of Empire competing developments in RiverPark, as well as the Empire Economics MSA, I have formed the Economics MAS: opinion that value of these models (with upgrades) is as follows: Unit 23 - $ 373,900, $ 200.56 per sq.ft. Plan 1 - $ 300,000 Unit 24 - $ 328,900, $ 236.96 per sq.ft. Plan 2 - $ 350,000 Unit 25 - $ 350,900, $ 244.19 per sq.ft. Plan 3 - $ 380,000 Unit 26 - $ 356,900, $ 239,05 per sq.ft. (Under contract to close Aug. 31, 2013) Total $1,030,000 Unit 27 - $ 359,900, $ 215,38 per sq.ft. The units within East End have been selling at the rate of 2 to 3 units per month. Historical Unit 28 - $ 349,900, $ 243.50 per sq.ft. absorption in RiverPark is consistent with that sales rate. Even though currently being used as Total $2,120,400 model homes, an estimate is made that if put on the market the units could sell in 2 months. The total revenue of $2,120,400 is discounted over a three month period at 15% (marketing, time Discounting one month at 15% for time value of money and profit results in the following value of money, risk and profit). calculation: Period Revenue Discount Factor Revenue 1 $706,800 .988 $ 698,318 $1,030,000 x .976 = $1,005,280, say, $1,000,000 2 $706,800 .976 $ 698,837 3 $706,800 .964 $ 681,355 $2,073,510

Less: Costs to complete $15,000 x 5 units ($ 75,000) Estimated Value $1,998,510, say $2,000,000

EXPOSURE TIME Exposure time is defined in USPAP as the following: $ 46,300,000 $ 20,000,000 $ 19,750,000 $ 27,000,000 $ 3,037,500 $269,377,928 $152,700,000 $659,191,167 $ 86,000,000 $ 10,160,185 $ 14,565,554 $ 10,300,000

“Estimated length of time that the property interest being appraised would have APPRAISAL

ered. The ered. The

been offered on the market prior to the hypothetical consumption of a sale at were RSP in

market value on the effective date of the appraisal.” ROLL 2013-14 ASSESSED $269,377,928 $482,161,364 $ 83,068,300 $ 10,160,185 $ 76,362,400 $ 22,574,295 $ 6,281,643 $ 6,936,000 $ 2,550,000 $ 3,083,041 $ 948,628 $ 818,944 VALUE PER ASSESSOR’S There are a variety of different uses within RSP and that were subject of this appraisal. Apartments have strong demand and marketing exposure time is estimated at less than 3 months. -family housing apartments, or housing apartments, -family Retail sales that were collected and analyzed were all on the market for less than 3 months; thus, I estimate marketing exposure time to be less than 3 months. The residential uses range from 3 unit condominiums to 1,081 residential units. Obviously, marketing exposure time would vary considerably as it relates to the number of units. Suffice it to say marketing time for sales of SFA and SFD has decreased substantially – now 90 days or

PROJECT

less. The historical absorption of active new residential product in RiverPark has been 2 units Serenade Apartments Individual Homeowner Individual Homeowner Gap Properties: Avenue II Gap Properties: The Vines Permitted as of 01.01.2013 Gap Properties: The Mosaic Paseo Santa Clara Apartments per month. Gap Properties: The Collection Gap Properties: Target Department Store Gap Properties: Cinemark Century Theater

Gap Properties: Vista Urbana Condominiums lue for these APN’s that were the subject of this appraisal:

of Properties Gap Properties: Individual Homeowners

l tax levy for CFD No. 1. As a result, not all of the APN’s with

49 48 80 400 140 224 N/A N/A N/A 2030 1,081 APPRAISAL SUMMARY OF LOTS NUMBER

245, 015, , as well as the more traditional income and market data approaches and market traditional income were consid , as well the more

-015-065, 195- -305, 132-300- Various 132-0-110-335 132-0-320-335 132-0-320-045 Various 132-0-110-515 132-0-110-365 132-0-310-375 132-0-310-305 132-0-090-125 132-0-280-275, 305, 315, 325, 335; 132-0- 290 132-0-230-145, 132-0-230-155 285 025, 035, 045

Complete Appraisal Complete –

OWNER APN

Individual / KW CAPRI Sornade LLC Cabrillo Economic Development Co. Individual Individual & Model Complex I, LLC SOCM Target Corporation I, LLCSOCM Individual Corona Riverpark Promenade Wolf Partners

sed. The APN’s that were examined and valued are improved with either SFA, SFD, multi with either SFA, SFD, and valued are improved sed. The APN’s that were examined IB IA IIF IIB IIE IIA IIC IID Summary Appraisal Report – Complete Appraisal IIG IIH Subtotal Subtotal

Community Facilities District No. 1 SECTION apprai This appraisal is founded on APN’s that are to have a specia commercial buildings. commercial In the valuation section, a statistical analysis the assess value and appraised va following chart summarizes Special Tax Bonds, Series 2013 159 Page Inc. Associates, & Hull Appraisal Report Summary Community Facilities District No. 1 W. Special Tax Bonds, Series 2013 Rio School District Bruce Rio School District Bruce W. Hull & Associates, Inc. Page 158

Individual Various 16 Gap Properties: Individual Homeowners of Properties $ 2,633,404 $ 5,285,000 IIIA Permitted from 01.02.2013 to 06.01.2013 IIIB Aldersgate 132-0-110-515 (Port) 48 Gap Properties: Vista Urbana $ 948,628 $ 9,600,000 Investments IIIC AGS Meridian, 132-0-100-105 3 Gap Properties: East End Condominiums $ 200,000 $ 1,000,000 LLC IIID Standard Pacific 133-0-300-345 6 Gap Properties: Waypointe Condominiums-Standard $ 892,182 $ 2,000,000 Corporation through Pacific 133-0-300-395 Subtotal 73 $ 4,674,214 $ 17,885,000

Total 2,103 Total $486,835,578 $677,076,167

The above values are stated subject to the Assumptions and Limiting Conditions and the Appraiser’s Certification as of said date of value.

Summary Appraisal Report – Complete Appraisal Community Facilities District No. 1 Special Tax Bonds, Series 2013 Rio School District Bruce W. Hull & Associates, Inc. Page 160 rc .Hl soits n. Page161 Bruce W.Hull&Associates, Inc. Rio SchoolDistrict Special TaxBonds,Series2013 FacilitiesDistrictNo.1 Community Summary Appraisal Report

As of the date of this report, Bruce W. Hull hascompleted the requirements of the continuing 11. was assistedbyMike NatelsonandDougTuggleregardingstatisticalanalysis.The I 10. issubjecttotherequi Theuseofthisreport 9. Thereportedanalyses,opinions,andconclusion Ihavemade apersonalinspectionofthepropertythatissubjectthisreport. 8. 7. werede andconclusions opinions, Myanalyses, 6. This appraisalwasnotbasedonarequested 5. Mycompensation isnotcontingentuponthere 4. Ihavenopresentorprospectiveinterestintheprope 3. Thereportedanalyses,opinions,andconc Thestatements offactcontainedinthisreportaretrueandcorrect. 2. 1. I certifythat,tothebestofmy knowledgeandbelief,that: Bruce W. Hull,MAI Real Estate Appraiser (AG004964) Real EstateAppraiser(AG004964) California StateCertifiedGeneral education program of the Appraisal Institute. education program ofthe Appraisal Institute. conclusions aremine. review byitsdulyauthorizedrepresentatives. Uniform StandardsofProfessionalAppraisalPractice. Standards ofProfessionalAppraisalPracticetheInstitute,whichinclude prepared, inconformity withtherequirements conformity withtheUniform StandardsofProfessionalAppraisalPractice. approval ofaloan. ortheoccurrenceofasubsequentevent. of astipulatedresult, in valuethatfavorsthecauseofclient,th biaswithrespecttothepartiesinvolved. have nopersonalinterestor opinions, andconclusions. assumptions andlimiting conditions,andare – CompleteAppraisal APPRAISER’S CERTIFICATION

minimum valuation,aspecificorthe e amount ofthevalueestimate, theattainment rements oftheAppraisalInstituterelatingto my personal,unbiasedprofessionalanalyses, lusions are limited only by the reported lusions arelimited onlybythe porting ofapredetermined veloped, and this reporthasbeenpreparedin andthis veloped, of theCodeProfessionalEthicsand s weredeveloped,andthisreporthasbeen rty thatisthesubject

of this reportof this andI value ordirection

A D D E N D A DCF – THE VINES

THE VINES

Assumptions Plan Total Sales Price Total 1 25 $267,000 $6,675,000 2 25 $275,000 $6,875,000 3 30 $303,000 $9,090,000 $22,640,000

Marketing and Sales5% of Sales Discount Rate 10% Absorption 4 units per month Monthly DCF 123 4 5678910 Revenue $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 Market and Sales $56,600 $56,600 $56,600 $56,600 $56,600 $56,600 $56,600 $56,600 $56,600 $56,600 Net Income $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 Discount Rate 0.992 0.984 0.975 0.967 0.965 0.951 0.944 0.936 0.929 0.92 Discounted Net Income $1,066,797 $1,058,194 $1,048,515 $1,039,912 $1,037,761 $1,022,705 $1,015,178 $1,006,574 $999,047 $989,368

11 12 13 14 15 16 17 18 19 20 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $1,132,000 $56,600 $56,600 $56,600 $56,600 $56,600 $56,600 $56,600 $56,600 $56,600 $56,600 $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 $1,075,400 0.913 0.905 0.898 0.89 0.883 0.876 0.868 0.861 0.854 0.847 $981,840 $973,237 $965,709 $957,106 $949,578 $942,050 $933,447 $925,919 $918,392 $910,864 $10,284,050 $ 19,750,000.00

ABSORPTION LOSS – THECOLLECTION

Assumptions $27 psf Retail $17.50 psf office (no expenses on vacancy) Absorption - 4 years Absorptio Stablized Occupancy n Beginning sf Year 1 Year 2 Year 3 Year 4 95 90 Retail 169,580 70,000 70,000 70,000 60,682 440,262 Office 13,046 10,000 10,000 10,000 3,178 46,224 Loss Income

Retail 730,8414 5,418,414 3,528,414 1,638,414

Office 580,615 405,615 230615 55615

Total 788,9029 5,824,029 3,759,029 1694029

Discount at 6% 0.943 0.89 0.84 0.792

Discounted 743,9354 5,183,386 3,157,584 1,341,671 17,121,995 Tenant Improvements 270,682 sf Retail 33,178 sf offices 311,060 total to be leased to stabilized occupancy Each lease is negotiated with different tenant improvements. For purposes of this appraisal I have considered $50 psf $50 psf x 303,868 sf 15,193,400 32,315,395 say $32,300,000

ABSORPTION LOSS

– THEMOSAIC

QUALIFICATIONS

BRUCE W. HULL, MAI Former California Real Estate Broker, Lic. No. 00821209 BRUCE W. HULL & ASSOCIATES INC. California Certified General Real Estate Appraiser, Orange, City of CFD No. 2000-1, Crosby Estate; Solana Beach REAL ESTATE APPRAISERS & CONSULTANTS Certificate No. AG004964 Sycamore Creek A.D. No. 95-1 Riverside, City of 1056 E. Meta Street, Suite 204, Ventura, California 93001 Appraisal Institute, Member No. 6894 Orange, County of CFD No. 9, Orangecrest - Imp. Areas 1, 3 & 5 Office: (805) 641-3275 Mobile: (714) 801-2602 E-Mail: [email protected] CFD No. 99-1, Santa Margarita Water District CFD No. 90-1, Lusk-Highlander CFD No. 88-1, Saddleback Valley U.S.D. CFD No. 2, Riverside U.S.D. Bruce W. Hull & Associates, Inc. is an appraisal firm that provides a wide variety of appraisal assignments for public agencies, developers and CFD No. 89-1, Saddleback Valley U.S.D. Riverside, County of financial institutions. CFD No. 89-2, Saddleback Valley U.S.D. CFD No. 7, Victoria Grove CFD No. 89-3, Saddleback Valley U.S.D. San Bernardino, County of The principal, Bruce W. Hull, MAI, has been in the appraisal field since graduation in 1969 from Westmont College, Santa Barbara. After being Oxnard, City of CFD No. 9 employed by the Ventura County Assessor's Office for five years, he established an appraisal company in Orange County in 1974. In August of A.D. Nos. 86-3, 87-1 and 89-1 (Refunding) San Diego, County of 1995, he established an office in Ventura while maintaining an Orange County location. The appraisal assignments completed have been diverse A.D. No. 97-1-R Valley Center Municipal Water District in nature, including such property types as large master planned developments, shopping centers, large retail uses, and mitigation land as A.D. No. 96-1 Temecula, City of described herein. Rancho Cucamonga, City of CFD NO. 88-12 Master planned Development CFD No. 91-1 Ventura, County of These are typically more than 1,000 acres in size and have a wide variety of residential product, often ranging from condominiums to large estate Rancho Santa Fe, City of Lake Sherwood A.D. Refunding type of properties. In addition, there is often a commercial use within the development. I have been involved in the following projects. Partial List of Clients Lake Sherwood, Hidden Valley Mountain Cove, Temescal Wood Ranch, Simi Valley Mountain Gate, South Corona I have completed appraisal assignments for a wide variety of clients. A partial list of these includes the following: Rancho San Clemente, San Clemente The Foothill Ranch, Corona Towne Center, Rancho Santa Margarita Orangecrest, City of Riverside Rancho Trabuco North and South, Rancho Santa Margarita Aliso Viejo, County of Orange CITIES & COUNTIES: Citicorp, N.A. Hunters Ridge, Fontana Talega Valley, City of San Clemente/County of Orange Anaheim City U.S.D. Coast Federal Bank The Corona Ranch, Corona Otay Ranch, City of Chula Vista Brea, City of Colton Joint U.S.D. Carpinteria Valley U.S.D. Downey Savings and Loan Retail Use Chino U.S.D. Federal National Mortgage Association (FNMA) Consultant to City of Long Beach regarding a 30 acre site (Long Beach Naval Hospital) which the City was acquiring from the US Navy for Chino, City of Federal Deposit Insurance Corporation (FDIC) inclusion in a 100 acre shopping center site. Chino Hills, City of Fieldman, Rolapp & Associates (Financial Consultants) Towne Center, Rancho Santa Margarita, a master planned project containing two shopping centers (Towne Center, 160,000 SF plus a Target Chula Vista, City of Irvine Ranch Water District Store, 122,000 SF; Plaza Antonio, 165,000 SF). Colton, City of Irvine U.S.D. Corona, City of Jurupa Community Services District Mission Grove, City of Riverside, is a 395,362 SF center that included a K-Mart Department Store among the major tenants. Fullerton, City of Metro Bank Victoria Gardens Masterplan, a proposed mixed use project consisting of 3,065 acres of land that included a mixture of residential (2,150 Huntington Beach, City of Metropolitan Water District acres); commercial (335 acres of which a regional center was 91.9 acres); schools; parks; and open space. Jurupa, City of Meserve, Mumper & Hughes (Law Firm) Los Angeles, County of Munger, Tolles & Olson LLP (Law Firm) Menifee Village, Riverside County, a 1977 acre master planned development which had approvals for 5,256 units. The assignment included Mission Viejo, City of Murrieta Valley U.S.D. the valuation of Planning Area 2-7 which was a commercial site that had been developed with a Target Store, Ralph's Market, and in-line Moreno Valley, City of Rialto U.S.D. stores (190,000 SF with eventually being a 257,000 SF center). Orange, City of and County of Riverside U.S.D. Rancho Cucamonga, City of Saddleback Valley U.S.D. Mitigation Lands Riverside, City of and County of Santa Margarita Water District These assignments involved valuing lands that are considered mitigation lands which are often acquired by public agencies or nonprofit San Bernardino, City of and County of Sidley & Austin (Law Firm) organizations. San Marcos, City of »Bolsa Chica, Huntington Beach, a 42-acre site which was part of a larger wetlands conservation program. This particular acreage was Solana Beach U.S.D. Temecula, City of Southern California Edison Company unique since it was subject to "tidal flushing" and had both fresh and saltwater impacting the lands. This assignment was completed for Ventura, County of Stone & Youngberg LLC (Bond Underwriters) Metropolitan Water District. Talmantz Aviation »San Joaquin Marsh, City of Irvine, consisted of approximately 289 acres of wetlands which were acquired for use as a "buffer" zone ENTITIES: Bank of America NT & SA The Irvine Company by the Irvine Ranch Water District. Eagle Valley, a 1072-acre parcel near Lake Matthews in Riverside County, was acquired by Bank of Montreal Wells Fargo Bank Metropolitan Water District for use as a water treatment plant and buffer zone. Bear, Stearns & Co., Inc. Wells Fargo Mortgage Company »Poormans Reservoir, Moreno Valley, a 38-acre site acquired by the City of Moreno Valley for preservation/open space use. Best Best & Krieger LLP (Law Firm) Weyerhaeuser Mortgage Company Assessment Districts/Bond Issues

Have been involved in the appraisals of the following Bond Issues regarding Community Facilities Districts and/or Assessment Districts. (This represents a partial list of assignments completed from 1990 thru Present). Guest Speaker (for) Court Experience »UCLA Symposium on Mello Roos Districts: ‘88, ‘01, ‘05. »Qualified Expert Witness: Superior Courts of Los Angeles, Chino, City of CFD No. 90-1 »Stone & Youngberg, LLC, bond underwriters: "Exploring Orange, Riverside, and Ventura; U.S. District Court, Central Prop. CFD No. 2 Centex A.D. No. 95-1 the Rumors & Realities of Land Secured Debt in California," District of California, Los Angeles. Chino Hills, City of Fullerton, City of 01.15.92 (L.A. Conference); "Appraisals for Land Secured International CFD No. 9 Coyote Hills A.D. No. 95-1 Financing," 03.05.98 (San Francisco Presentation) »Panama – Consultation with property owner regarding CFD No. 10 (Fairfield Ranch) Jurupa, City of Miscellaneous highest and best uses beachfront land, Bocas Del Toro. Chula Vista, City of CFD No. 1 (Refunding) »Member Advisory Panel to California Debt Advisory »Colombia – Consultation with property owner of boutique CFD No. 97-3 Lebec Commission (May 1994) and (June 2004) re Appraisal hotel, Medellin. Otay Ranch SPA I - CFD No. 99-2 CFD No. 2000-1, Tejon Industrial Complex Standards for Land Secured Financing. »Uruguay – Consultation with property owner regarding Corona, City of Moreno Valley, City of beachfront lots, Puente del Este. A.D. No. 89-1 CFD No. 87-1 (Series B) »Indonesia – Consultation with representative of U.S. State CFD No. 89-1 Murrieta Dept. regarding property rights – Indonesia, Bali. CFD No. 90-1 (Refunding) CFD No. 2001-01, Murrieta Valley U.S.D.

[THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX D

MARKET ABSORPTION STUDY

D-1

[THIS PAGE INTENTIONALLY LEFT BLANK]

MARKET ABSORPTION STUDY

COMMUNITY FACILITIES DISTRICT NO. 1 2013 SPECIAL TAX BONDS

RIO SCHOOL DISTRICT

VENTURA COUNTY, CALIFORNIA

BY EMPIRE ECONOMICS, INC. JUNE 17, 2013 (REVISIONS: JULY 26, 2013) (GRAMMATICAL REVISIONS: SEPTEMBER 18, 2013)

THE USE OF THIS MARKET ABSORPTION STUDY IS AUTHORIZED ONLY FOR THE RIO SCHOOL DISTRICT CFD NO. 1 BOND ISSUE

7-2

CERTIFICATION OF INDEPENDENCE

EMPIRE ECONOMICS PROVIDES CONSULTING SERVICES ONLY FOR PUBLIC ENTITIES

The Securities & Exchange Commission has taken action against firms that have utilized their research analysts to promote companies with whom they conduct business, citing this as a potential conflict of interest. Accordingly, Empire Economics (Empire), in order to ensure that its clients, including the Rio School District, are not placed in a situation that could cause such conflicts of interest, provides a Certification of Independence. This Certificate states that Empire performs consulting services only for public entities such as the Rio School District, in order to avoid potential conflicts of interest that could occur if it also provided consulting services for developers/builders. For example, if a research firm for a specific Community Facilities District were to provide consulting services to both the public entity as well as the property owner/developer/builder, then a potential conflict of interest could be created, given the different objectives of the public entity versus the property owner/developer.

Accordingly, Empire Economics certifies that the Market Absorption Study for the CFD No. 1 of the Rio School District was performed in an independent professional manner, as represented by the following statements:

 Empire was retained to perform the Market Absorption Study by the Rio School District, not the CFD’s developer, Shea Homes, or the various builders.

 Empire has not performed any consulting services for the CFD’s property owner or the developer/builders during the past twenty+ years.

 Empire will not perform any consulting services for the CFD’s property owner or the developer/builders during at least the next five years.

 Empire’s compensation for performing the Market Absorption Study for the CFD is not contingent upon the issuance of bonds; Empire’s fees are paid on a non-contingency basis.

Therefore, based upon the statements set-forth above, Empire hereby certifies that the Market Absorption Study for CFD No. 1 of the Rio School District was performed in an independent professional manner.

______

Empire Economics, Inc. Joseph T. Janczyk, President

EXECUTIVE SUMMARY

The Rio School District was previously petitioned to form Community Facilities District (CFD) No. 1 for the planned community of RiverPark to provide financing for a portion of the infrastructure that is required to support the development of its residential and commercial projects. CFD No. 1 is located some sixty miles westerly of the Los Angeles Urban Core, in the City of Oxnard in Ventura County, easterly of Route 101 and northerly of Vineyard Avenue; Oxnard Avenue traverses the project.

The planned community of RiverPark has received entitlements for about 3,003 residential units and approximately 2,098,000 sq.ft. of commercial building space; accordingly, the specifics of the product mix characteristics as well as their development and marketing status are now discussed.

 Residential: With regards to the development/marketing status of the residential product types, they are as follows:  Occupied Closed-Out Projects (19 projects): 1,410 homes, a share of 47%  Currently Active Projects (8 projects): Occupied: 323 homes or 10.8%. Future Occupancies: 530 homes or 17.6%.  Future Occupancies: Parcels Not Active (7 projects): 740 homes or 24.6% There is a significant amount of development occurring in CFD No. 1; the currently active projects have closed escrows/rented 323 homes and these projects have another 530 homes for near-term escrow closing/rentals.

 Commercial: The ten commercial parcels are categorized as follows: Developed, Near-Term Development, Future Development and Commercial Not Probable.  Developed: The major commercial development thus far has been in Planning Area D: “The Collection”, a premier retail center that includes major tenants such as Target, Whole Foods, REI, H&M and Cinemax/Century Theatres. Of the maximum allowable 904,000 sq.ft. of building space, 734,663 or 81% of the allowable space has been developed.  Near-Term: Planning District E has a development potential for 111,000 sq.ft. of space.; currently there is some development activity for a fast food outlet with about 3,500 sq.ft.  Future Development: Planning Districts C (478,000 sq.ft.), B (104,000 sq.ft.) and A (20,000 sq.ft.) are not being actively developed at this time.  Not Probable: Five Planning Districts that had development potential but were used instead for residential projects: Planning Districts G, I, J, F, and K

Macroeconomic Conditions: CFD No. 1 is situated in the City of Oxnard which has a somewhat higher unemployment rate than Ventura and Santa Barbara counties, as a whole. Since the demand for homes in CFD No. 1 is driven by employment growth in Ventura and Santa Barbara counties, as a whole, this will provide support for the currently active as well as the forthcoming projects in CFD No. 1.  Ventura County has grown +4,900 new position during the past year, +1.6%  Santa Barbara County has grown by +5,400 new position during the past year, +2.9%

iii

Socioeconomic Conditions: The CFD No. 1 Market Area has a significantly lower crime rate and the school district has a significantly higher educational achievement level than for other nearby cities/areas; accordingly, these positive socioeconomic factors support the demand for homes in CFD No. 1.

Housing Sales Trends: During 2006 to 2008, sales increased as projects began to enter the marketplace, from 91 homes in 2006 to 195 homes in 2008. From 2009 to 2011, sales decreased dramatically, from 153 in 2009 to a trough of 104 in 2011. Then, in 2012, sales rebounded, reaching a level of 158 homes but of these, about 43% were resales.

Housing Price Patterns: Prices started at a level of approximately $340,361 in 2006, and then escalated to a peak level of $405,919 in 2007. Then, prices declined substantially from 2008 to 2012, to about $260,720 in 2012, a decrease of some -36%. From 2012 to January-April 2013, prices rose to $293,642, an increase of +13%.

Characteristics of the For-Sale Projects in CFD No. 1, RiverPark Market Segments:  RiverPark-Detached: Base prices of $436,400 for some 1,822 sq.ft. of living area. Value Ratio of $240 and Special Taxes of $4,972/yr. (1.14%).  RiverPark-Attached: Base prices of $354,200 for some 1,898 sq.ft. of living area. Value Ratio of $188 and Special Taxes of $4,201/yr. (1.19%).  RiverPark-Affordable: Base prices of $203,499 for some 1,012 sq.ft. of living area. Value Ratio of $201 and Special Taxes of $1,080/yr. (0.53%).

Characteristics of the Apartment Market:  RiverPark-Affordable: 1 project with 140 units that entered the market in 2009; all have been leased; typical lease rate $914/mo. (for a family with a moderate level of income) for units with 935 sq.ft., for a rent ratio of $0.98 per sq.ft./avg.  RiverPark – Market Rate: 3 projects with 704 units that entered the marketplace during 2007 (1 project) to 2013 (2 projects); of these 435 are leased; typical lease rates $1,450 to $2,268 per month for units with 802 to 1,428 sq.ft., for a rent ratio of $1.59 to $1.81 per sq.ft./avg.  Market Comparables– Market Rate: Archstone with 316 units –all leased and The Artisan Apartments with 272 units - 136 leased; typical lease rates $1,590 to $2,118 per month for units with 1,029 to 1,150 sq.ft., for a rent ratio of $1.55 to $1.84 per sq.ft./avg.

Conditions in the Commercial Retail Market:  Ventura County has an estimated 22,725,383 sq.ft. of retail space with a current vacancy rate of about 6.4%, and the current asking lease rate of $2.24.  With regards to current construction activity, the major project in Ventura County as well as the greater Los Angeles area that is under construction is “The Collection”, the major retail center in CFD No. 1.

Estimated Residential Absorption Schedules: The absorption (escrow closings for-sale homes and apartment rentals) schedules for the remaining residential projects in CFD No. 1 are as follows:

 June-December 2013: There are expected to be a total of 235 apartments/homes absorbed: o Apartments: 100 units in Mosaic as it commences rentals. o Attached For-Sale: 100 homes closing escrow in the currently active projects. o Detached For-Sale: 35 homes as the final currently active project closes out.

 January-December 2014: There are expected to be a total of 345 apartments/homes absorbed: o Apartments: the remaining 124 units in Mosaic. o Attached For-Sale: the remaining 171 homes in the currently active projects. o Detached For-Sale: 50 homes as a new project enters the marketplace.

 January-December 2015: There are expected to be a total of 295 apartments/homes absorbed: o Apartments: 150 apartments in a new project that enters the marketplace. o Attached For-Sale: 45 homes in a new project that enters the marketplace. o Detached For-Sale: 100 homes in new projects that enter the marketplace.

 January-December 2016: There are expected to be a total of 302 apartments/homes absorbed: o Apartments: the final 138 apartments in the new projects. o Attached For-Sale: the remaining 39 homes in the new project o Detached For-Sale: 125 homes in new projects.

 January-December 2017: There are expected to be a total of 93 homes absorbed: o Apartments: Closed-Out in 2016. o Attached For-Sale: Closed-Out in 2016 o Detached For-Sale: the remaining 93 homes in new projects.

Estimated Commercial Absorption Schedules: Since “The Collection” was just constructed recently, and some of the stores, primarily the smaller outlets, are in the process of leasing up, the construction of additional commercial space is expected to be minimal in the near-term.

 The major commercial development thus far has been in Planning Area D: “The Collection”, a premier retail center that includes major tenants such as Target, Whole Foods, REI, H&M and Cinemax/Century Theatres as well as numerous smaller/moderate sized stores as well. o With regards to the 734,663 sq.ft. of space that has been constructed, about 346,724 sq.ft. of this space has NOT yet been leased, for a vacancy rate of about 47%; most of this space is for moderate/smaller sized vs. major tenants. Since the major tenants are essentially in place, the remaining space is expected to be leased during 2013-2016+.

 Near Term Development (Next 3 Years): * Planning District E has some development activity in the pipeline for a fast food outlet with about 3,500 sq.ft. of building space that may enter the marketplace during 2014. * Planning District D has some development activity in the pipeline for a 24 Hour Fitness Super Sport with an estimated 43,000 sq.ft. of building space that may enter the marketplace during 2015.

Potential Risk Factors:  During the next several years, there are potential factors which may result in higher mortgage rates, as the Federal Reserve re-sells the mortgage securities and also the treasury bonds that it has purchased in recent years.  Also, during the next several years, as the federal government moves toward reducing its deficits, there may be attempts to curtail the use of mortgage deductions, and this may adversely impact the housing market. Finally, the estimated absorption schedules, which represent escrow closings to homeowners, are subject to the Assumptions and Qualifications set-forth in Section V.

TABLE OF CONTENTS

INTRODUCTION

A. Overview of the Bond Financing Program…………………………………………………………………………….1 B. Roles of the Market Study for the Bond Financing…..……………………………………………………………….5 C. Methodology Underlying the Market Absorption Study……………………………………………………………..6

SECTION I: CHARACTERISTICS AND THE DEVELOPMENT/MARKETING STATUS OF THE RESIDENTIAL AND COMMERCIAL PRODUCTS IN CFD NO. 1

A. Characteristics of the Expected Product Mix for CFD No. 1 …………..………………………………………...... 7

SECTION II: MACROECONOMIC ANALYSIS DESIGNATED ECONOMIC AND REAL-ESTATE FORECASTING SCENARIO

A. Overview of the Housing Market During 2007-2012 and Projections for 2013-2015+ …………….….….……..14 B. Primary Components of the Economic Forecasting Model………………..……...….…………….………………16 C. Recent Unemployment Rates……………………………………………………………………………………..…..19 D. Conclusions on Recent/Future Housing Market Conditions…………………………………………….….….…..20

SECTION III: MICROECONOMIC ANALYSIS

A. Methodology Underlying the Microeconomic Analysis of the Residential and Commercial Products.………...21 B. Development Tends/Patterns in the CFD No. 1 Market Area ………………………………………..…………….22 C. Socioeconomic Characteristics: Crime Levels and Quality of Schools………………………………..…….….....24 D. Competitive Market Analysis of the For-Sale Projects in CFD No. 1…………...….…………….……………….26 E. Competitive Market Analysis of the Apartment Projects in CFD No. 1…………...….…………….…………….34 F. Recent Conditions in the Retail Market for Ventura County ……………………………………………………….37

SECTION IV: ESTIMATED ABSORPTION

A. Estimated Absorption Schedules for the Residential Products in CFD No. 1 …………………………..….…...... 38 B. Estimated Absorption Schedules for the Commercial Products in CFD No. 1 …………………………..….…....42

SECTION V: ASSUMPTIONS AND LIMITING CONDITIONS

Assumptions and Limiting Conditions…………………..…………………………………….……………………...... 44

Appendix A: Credentials/Qualifications of Empire Economics: Resume: Joseph T. Janczyk, Ph.D……………….47

INTRODUCTION A. OVERVIEW OF THE BOND FINANCING PROGRAM

The planned community of RiverPark, has received entitlements for a significant amount of commercial and residential development; accordingly, the primary land-uses are as follows:

Residential:  Entitlements have been received for a maximum of some 3,003 housing units.  With regards to product types, there are expected to be 1,052 apartments (35.0%), 1,323 attached for-sale homes (44.1%) and 628 detached for-sale homes (20.9%).  With respect to development status, the number of apartments rented and escrows closed to homeowners are as follows:  Apartments: 540 rented, 224 currently active and another 288 for future development.  Attached for-sale: 968 closed escrows, 271 currently active and another 84 for future development.  Detached for-sale: 225 closed escrows, 35 currently active and another 368 for future development.

Commercial:  Entitlements have been received for a maximum of some 2,098,000 sq.ft. of building space.  The major commercial development thus far has been “The Collection”, a premier retail center that includes major tenants such as Target, Whole Foods, REI, H&M and Cinemax/Century Theatres.  The next largest retail project is a Convention/Hotel District; this is a future development that is not active at this time.  There are several other moderately and smaller sized retail centers; however, they are not actively being developed at this time.

The Rio School District has retained Empire Economics, Inc., an economic and real estate consulting firm, to perform a Market Absorption Study for the projects in CFD No. 1. The purpose of the Market Absorption Study is to conduct a comprehensive analysis of the product mix characteristics, macroeconomic factors, and microeconomic factors as well as the potential risk factors that are expected to influence the absorption of the forthcoming residential and commercial products in CFD No. 1, in order to arrive at conclusions regarding the following:

 For the currently active as well as the forthcoming residential and commercial projects, their estimated absorption schedules, from market-entry to build-out on an annualized basis.

 Discussion of potential economic and real estate risk factors that may adversely impact the marketability of the remaining residential and commercial products to be absorbed.

SOUTHERN CALIFORNIA MARKET REGION LOCATION OF CFD NO. 1 AND THE CITY OF OXNARD

CFD NO. 1 MARKET REGION VENTURA COUNTY AND SANTA BARBARA COUNTY (“STAR” LOCATION OF CFD NO. 1)

SANTA BARBARA COUNTY

VENTURA COUNTY

CFD NO. 1 “LOCATION - STAR” APPROXIMATE BOUNDARIES OF THE MARKET AREA

B. ROLES OF THE MARKET STUDY FOR THE BOND FINANCING

The Market Absorption Study for CFD No. 1 has a multiplicity of roles with regards to the Bond Financing; accordingly, these are set-forth below:

Marketing Prospects for the Residential and Commercial Projects

Estimated Absorption Schedules:

Escrow Closings of For-Sale Homes to Homeowners Apartments to Renters and Commercial Buildings to Final-Users

From Market-Entry to Build-Out Currently Active Projects as well as Forthcoming Projects

Potential Risk Factors that may Adversely Impact the Marketability of the Homes

Relationship of the Market Study to the Special Tax Payments

Special Taxes for the Residential and Commercial Projects/Products

Aggregate Levels of Special Tax Revenues for Bond Sizing

Share of Payments: Developer/Builder vs. Final-Users/Homeowners

The Issuing Agency, the Rio School District, along with the Finance Team, can utilize the information found in the Market Absorption Study to estimate the future Special Tax Revenues to structure the CFD No. 1 bonds.

C. METHODOLOGY UNDERLYING THE MARKET ABSORPTION STUDY

The Market Absorption Study performs a comprehensive analysis of the product mix characteristics, macroeconomic factors, and microeconomic factors as well as the potential risk factors that are expected to influence the absorption of the forthcoming residential and commercial products in CFD No. 1.

I. Characteristics and the Development/Marketing Status of the Residential and Commercial Products in CFD No. 1

II. Macroeconomic Analysis Designated Economic Real Estate Forecasting Scenario

Overview of the Recent/Expected Housing Market Conditions during 2007-2015+

Critical Components of the Economic Forecasting Model

Recent Unemployment Rates in the CFD No. 1 Market Region/Area

Conclusions on Recent/Future Housing Market Conditions

III. Microeconomic Analysis of the Residential and Commercial Projects in CFD No. 1

Development Trends/Patterns in the CFD No. 1 Market Region/Area

Socioeconomic Characteristics: Crime Levels and School Quality

Identification of the Currently Active Residential Projects in the Market Area and Selection of the Comparable Projects

Recent Sale Trends and Price Patterns for Housing in CFD No. 1

Competitive Market Analysis of the For-Sale and Apartment Projects: Statistical Analysis of the Prices/Rents, Living Area and Special Taxes

Recent Conditions in the Market for Retail Products

IV. Estimated Absorption Schedules

Estimated Absorption Schedules for CFD No. 1 Residential and Commercial Products Potential Risk Factors

V. Assumptions and Limiting Conditions

SECTION I: CHARACTERISTICS AND THE DEVELOPMENT/MARKETING STATUS OF THE RESIDENTIAL AND COMMERCIAL PRODUCTS IN CFD NO. 1

The planned community of RiverPark, has received entitlements for about 3,003 residential units and approximately 2,098,000 sq.ft. of commercial building space; accordingly, the specifics of the product mix characteristics as well as their development and marketing status are now discussed.

Residential:

 With regards to the development/marketing status of the residential product types, they are as follows:

 Occupied Closed-Out Projects (19 projects): 1,410 homes, a share of 47%  Currently Active Projects (8 projects): o Occupied: 323 homes or 10.8%. o Future Occupancies: 530 homes or 17.6%.  Future Occupancies: Parcels Not Active (7 projects): 740 homes or 24.6%

So, there is a significant amount of development occurring in CFD No. 1; the currently active projects have closed escrows/rented 323 homes and these projects have another 530 homes for near-term escrow closing/rentals.

CFD NO. 1 (RIO SCHOOL DISTRICT) DEVELOPMENT/MARKETING STATUS OF THE RESIDENTIAL PROJECTS

1,400

84 1,200 271 1,000 288 254 800

224 600 0 368 400 714 540 35 200 69 156

0 Apartments Attached: For-Sale Detached: For-Sale Future Occupancies: Parcels Not Active 288 84 368 Currently Active Projects: Future Occupancies 224 271 35 Currently Active Projects: Occupied 0 254 69 Occupied: Closed-Out Projects 540 714 156

Please refer to the following pages for additional detailed information on the development and marketing characteristics of the residential parcels in CFD No. 1.

RIVERPARK LAND USE P"..AN: PERMfTTED USf.S l (Jn::ft.))e Pk:'Jl"' Dolt.' Jdy '26, 2011 Legend Plor,qlng 0 f;l m,:l$ A ~ u..,.Ofiu ~.,..~, !) We}! ~phCO"ol ~""'!"!:td O•,lrro C w.tt COI!ttb ComnM:k:i t>tt~ 0 f~ Squo•• C-()Mmtu:ol Duriti &r:-1 hAcl'"~ ColtYl"~e~:~l o.~r11:1 F "'"-r-<:v M. lf'!~.. ~ DLI.. ~I G \II I~•S:t-.-t4.•f1!b.,....C>Od Dltll"..:l H ~~li.:W Cr~tNt o;~~eoll'\o6d O;t-i e-1 it•J!fl'cr' lOI:'!p ~~~~&ho«JI)Jit>'2 .J ltrioo'llv\ ""~ t'.k!sJ·~·¢0d i)l!'ld 1:,. lcl~ I'

~ 1'1,1~'"1: Mooi:OUI'TI (i2-!SC.•JIII'o7'11o-nJ ~ e.~tn1o.Vr M•flh (I~ Ol.V!)~t .:.~

M L t:::J ~~ooh ltq;oncl

GJ. Ccolltl'!ilrrt 1 : Of\u. 1!:11!11 ea,.....,.,.;oc~._cUovw'l,....,/ ~ - C~al ltelat/Officoec ~ MJO»Ci l.h,.; P••d..->tbh H~h/~omm ...,-7: 00~

CJ Op.o $;J11~., Pool ~._ CCI C\'>- Sp.X.. : No.!Jhb... l!o.-JA:k.. ~ ~ ~ewoi: l#d>'CO~«f t!ufMt

CJ Opon Spoco! hC.JC!llh:l"'u:wJ~: Cty~ ..-a wl ~em-«>~"' t:::::i ep..,, Sp-,.., M..:.•llo_ _..,,,. W.."" ~~ w ,i)'~l!o.ns: - ~ !1~: 1\l,c.. ll ta'I•Out:~ f.-i ~r·

~~coVC:!m""-""~'IJ ~ liill A..bl.-: r-<~d t~e..

1- - I Sp-!'0~<: p Ill'\ AM!I t - P\ ~•·111-lf Oirt-1

CJ::J t\:wl•f"'S f).flud O...QIIMef!

LAND USE PLAN: PERMITIED USES ~orU lbol41sJI.l':l»2 pnpartdfor Ritu.Park Dt1'tlopmt111., uc~ AC M3rnn Partners 'lrirll Rna. I IDS.\ t nW.~~ .\S~CL.u!S I WillLL\!HEDti.U!iU.C'H.U..CHmCTS I HUITT·ZOLL..US

STATISTICAL SUMMARY OF THE DEVELOPMENT AND MARKETING STATUS OF THE RESIDENTIAL PARCELS IN CFD NO. 1

Number‐Projects Number of Units Residential Permitted Residential: Escrows Residential Future: Approved Closed/Rented Sales & Rentals

Apartments Closed Projects 2 540 540 540 0 Active Projects 1 224 224 0 224 Future Projects 2 288 0 0 288 Total 5 1,052 764 540 512

Attached For‐Sale Closed Projects 13 714 714 714 0 Active Projects 6 525 392 254 257 Future Projects1840 084 Total 20 1,323 1,106 968 341

Detached For‐Sale Closed Projects 4 156 156 156 0 Active Projects 1 104 87 69 35 Future Projects 4 368 0 0 368 Total 9 628 243 225 403

Overall ‐ Aggregate Closed Projects 19 1,410 1,410 1,410 0 Active Projects 8 853 703 323 516 Future Projects 7 740 0 0 740 Total 34 3,003 2,113 1,733 1,256

DESCRIPTION OF THE DEVELOPMENT POTENTIAL AND /MARKETING STATUS OF THE RESIDENTIAL PARCELS

Development ‐ Marketing Type of Units Builder Project Name Residential Map Tract Number Number of Residential Residential: Residential Status Number Units Permitted Escrows Future Approved Closed Closings Cabrillo Economic Paseo Santa DDR PZ06‐300‐18, Tract Closed‐Out High Density Multi‐family 5352‐1 140 140 140 0 Development Clara 5352‐1, Lot 19 DDR PZ05‐200‐03, Tract Closed‐Out High Density Multi‐family EDKOH Serenade 400 400 400 0 5352‐1, Lot 4, 5, 7 and 8 DDR PZ10‐200‐06, Tract Currently Active High Density Multi‐family Wolf Partners Mosiac 224 224 0224 5352‐1, Lot d12 an 13 DDR PZ, Tract 5352‐1, Future High Density Multi‐family Wolf Partners Tempo 235 0 0 235 Lot 16 and 17 DDR PZ10‐200‐11, Tract Future High Density Multi‐family EDKOH Sonata 53 0 0 53 5352‐1 Lot 17

Closed‐Out Single family Attached Shea Homes Destination Tract 5536‐1 5536‐15454540

Closed‐Out Single family Attached Shea Homes Reflections Tract 5536‐1 5536‐16262620

Closed‐Out Single family Attached Centex Homes Trellis Tract 5536‐2 5536‐25656560

Closed‐Out Single family Attached Centex Homes Promenade Tract 5538‐1 5538‐13636360

Closed‐Out Single family Attached Centex Homes Lumineria Tract 5538‐2 5538‐2 102 102 102 0

Closed‐Out Single family Attached Shea Homes Market Street Tract 5538‐3 5538‐33232320

Closed‐Out Single family Attached Standard Pacific Collage ITract 5643‐1 5643‐14444440

Closed‐Out Single family Attached Standard Pacific Collage II Tract 5643‐1 5643‐16060600

Closed‐Out Single family Attached Standard Pacific Landing Tract 5643‐2, ‐55643‐2 5643‐57878780

Closed‐Out Single family Attached Shea Homes Meridian Tract 5643‐2, ‐55643‐2 5643‐58787870

Closed‐Out Single family Attached Standard Pacific Avenue Tract 5537‐1 5537‐12828280

Closed‐Out Single family Attached Standard Pacific Daybreak Tract 5536‐3 5536‐36262620

Closed‐Out Single family Attached Standard Pacific Avenue Tract 5537‐1 5537‐11313130

Currently Active Single family Attached Standard Pacific Avenue II Tract 5643‐15643‐13232 28 4

Currently Active Single family Attached Standard Pacific Waypointe Tract 5643‐35643‐3104104 90 0

Currently Active Single family Attached Shea Homes East End Tract 5643‐2, ‐57230 72

Currently Active Single family Attached Corona Pacific The Vines Tract 5538‐15538‐180 80 0 80

Aldersgate Currently Active Single family Attached Vista Urbana Tract 5781 5781 156 96 60 96 Investments

Future Single family Attached Corona Pacific Lumineria Tract 5538‐2 840 084

Closed‐Out single family detached Centex Homes Westerly II Tract 5643‐45643‐4141414 0

Closed‐Out single family detached Standard Pacific Celadon Tract 5537‐15537‐1686868 0

Closed‐Out single family detached Centex Homes Westerly Tract 5537‐25537‐2555555 0

Closed‐Out single family detached Shea Homes Tradewinds Tract 5537‐35537‐3191919 0

Currently Active single family detached Standard Pacific Pacific Crossing Tract 5643‐3,‐65643‐3 5643‐6 104 87 69 35

Future single family detached Corona Pacific Westerly II Tract 5643‐4 69 0 0 69

Future single family detached Shea Homes Sienna Tract 5644‐3 910 091

Future single family detached Corona Pacific Veranda Tract 5644‐1 950 095

Future single family detached Shea Homes Morning View Tract 5644‐211300113

TOTALS 3,003 2,113 1,733 1,256

Commercial:

CFD No. 1 has a development potential for 2,089,000 sq.ft. of commercial building space; however, the amount of space that will likely be developed may be below this amount due to various factors, such as the Specific Plan providing residential vs. commercial options for various parcels.

Accordingly, the development/marketing status of the ten commercial parcels are categorized as follows: Developed, Near-Term Development, Future Development and Commercial Not Probable.

Developed:  The major commercial development thus far has been in Planning Area D: “The Collection”, a premier retail center that includes major tenants such as Target, Whole Foods, REI, H&M and Cinemax/Century Theatres.

 Of the maximum allowable 904,000 sq.ft. of building space, 734,663 sq.ft. or 81% of the allowable space has been developed.

Near Term Development (Next 3 Years):  Planning District E, the East Peripheral Commercial District has a development potential for 111,000 sq.ft. of space.  There is some development activity in the pipeline, for a fast food outlet with about 3,500 sq.ft. of building space.

Future Development: (More than three+ years in the future):  Planning Area C’s land use is for a Convention/Hotel District which has a development potential for 478,000; this parcel is not being actively developed at this time.

 Planning District B, West Peripheral Commercial District, has a development potential for 104,000 sq.ft. of space; this parcels is not being actively developed at this time.

Planning Area A had a development potential for 456,000 sq.ft. of commercial; however, another development option was chosen, and this consisted of building 400 apartments. The parcel still has a development potential for about 20,000 sq.ft. of commercial space but it is not being actively developed at this time.

Commercial Not Probable:  There are other Planning Districts that had development potential for smaller commercial projects; however, these are in areas that have already been committed for residential projects, and so there commercial development is not probable. o Planning Area G: 15,000 sq.ft o Planning Area I: 10,000 sq.ft. o Planning Area J: 10,000 sq.ft. o Planning Area F: 5,000 sq.ft. o Planning Area K: 5,000 sq.ft.

For more information on these projects, please refer to the following table on the following page.

DEVELOPMENT/MARKETING STATUS OF THE COMMERCIAL PARCELS IN CFD NO. 1

Planning Expected Land Uses Max Commercial Commercial Potential Remarks Districts Square Footage Permitted Entitlements

DTown Square Commercial District 904,000 734,663 169,337 Mostly Developed

CConvention / Hotel District 478,000 0 478,000 Not Currently Active

Reduced to 20,000 AMixed Use / Office District 456,000 0 456,000 sq.ft. due to Apartments

BWest Peripheral Commercial District 104,000 0 104,000 Not Currently Active

Some development, EEast Peripheral Commercial District 111,000 0 111,000 fast‐food outlet

Area Developed as G Village Square Neighborhood District 15,000 0 15,000 Residential

Area Developed as IRiverPark Loop Neighborhood District 10,000 0 10,000 Residential

Area Developed as JRiverPark Mews Neighborhood District 10,000 0 10,000 Residential

Area Developed as FVineyards Neighborhood District 5,000 0 5,000 Residential

Area Developed as KLakeside Neighborhood District 5,000 0 5,000 Residential

TOTALS 2,098,000 734,663 1,363,337

SECTION II: MACROECONOMIC ANALYSIS DESIGNATED ECONOMIC AND REAL ESTATE FORECASTING SCENARIO

This section describes the Economic and Real Estate Model underlying the forecasts for the absorption of the forthcoming residential and commercial products in CFD No. 1 during the foreseeable future; accordingly, this involves a systematic analysis of the following:

A. Overview of the Housing Market during 2007-2012 and Projections for 2013-2015+ for the CFD No. 1 Market Region: Ventura County and Santa Barbara County

B. Primary Components of the Economic Forecasting Model:

Critical Drivers: Employment as the Primary Economic Driver of the Housing Market Mortgage Rates as a Secondary Economic Driver of the Housing Market

C. Recent Unemployment Rates: California, Ventura and Santa Barbara Counties and the City of Oxnard

D. Conclusions on Recent/Future Housing Market Conditions

A. OVERVIEW OF THE RECENT/EXPECTED HOUSING MARKET CONDITIONS

RECENT/EXPECTED REAL ESTATE MARKET TRENDS/PATTERNS THE CFD NO. 1 MARKET REGION IMPACT OF IMPACT OF EMPLOYMENT MORTGAGE STRONGER THAN PHASE 1: PRICE DECLINES 2007 TO 2009 RATES ANTICIPATED HOUSING PRICES ADJUST FROM PEAK LEVELS BACK TO EQUILIBRIUM, EMPLOYMENT BASED UPON HOUSEHOLD INCOMES LOWER THAN GROWTH AND CONVENTIONAL FINANCING TECHNIQUES ANTICIPATED ACCELERATES THE MORTGAGE RATES REAL ESTATE PRICES DECLINE SIGNIFICANTLY ACCELERATE THE REAL RECOVERY DUE INITIALLY TO MORTGAGE RESETS AND THEN PRICE DECLINES CONTINUE DUE TO NEGATIVE EQUITY FOR HOMEOWNERS ESTATE RECOVERY

PHASE 2: PRICES STABILIZE 2010 TO 2012

FORECLOSURE AND SHORT‐SALES DOMINATED THE MARKET THE LEVEL OF EMPLOYMENT MORTGAGE RATES, CHANGES, WHICH FORECLOSURE/SHORT SALES WERE A SIGNIFICANT COMPONENT OF THE MARKET WHICH DEPEND DEPEND UPON THE MARKET SALES OF EXISTING HOMES WERE MODERATE UPON THE RATE OF OVERALL ECONOMY, SALES OF NEW HOMES WERE MINIMAL –DISPLACED BY FORECLOSURE SALES INFLATION, MAY MAY SHIFT THIS SHIFT THIS PARADIGM MOST OF THE HOMES THAT HAVE SIGNIFICANT LEVELS OF NEGATIVE EQUITY WERE CLEARED IN THE MARKETPLACE PARADIGM

PHASE 3: HOUSING MARKET RECOVERY 2013‐2015+ LOWER THAN MODERATE EMPLOYMENT GROWTH IN THE CFD NO. 1 MARKET REGION HIGHER THAN ANTICIPATED DRIVES HOUSING DEMAND/PRICES INCREASES FOR THE CFD NO. 1 MARKET AREA ANTICIPATED EMPLOYMENT FOR NEW DEVELOPMENT IN THE CFD NO. 1 MARKET AREA , THE MARKET IS SUFFICIENTLY MORTGAGE RATES GROWTH ELONGATES STRONG TO SUPPORT THE MARKET‐ENTRY OF NEW RESIDENTIAL PROJECTS ELONGATE THE REAL THE REAL ESTATE ESTATE RECOVERY RECOVERY BUT UNIQUE NEAR‐TERM CHALLENGES ARE THE FEDERAL DEFICIT AND THE FEDERAL RESERVE RE‐BALANCING ITS ACCOUNTS

B. CRITICAL COMPONENTS OF THE ECONOMIC FORECASTING MODEL

EMPLOYMENT IS THE PRIMARY ECONOMIC DRIVER EMPLOYMENT GROWTH / LOSSES DRIVE PRICE INCREASES / DECREASES

EMPLOYMENT GROWTH FOR VENTURA COUNTY HAS BEEN +4,900 NEW POSITION DURING THE PAST YEAR, +1.6% EMPLOYMENT GROWTH FOR SANTA BARBARA COUNTY HAS BEEN +5,400 NEW POSITION DURING THE PAST YEAR, +2.9%

RECENT EMPLOYMENT TRENDS FOR THE MARKET REGION VENTURA AND SANTA BARBARA COUNTIES 15,000

Ventura County Santa Barbara & Northerly 10,000

5,000

0 ANNUALLY ‐

‐5,000 CHANGES

‐10,000 EMPLOYMENT

‐15,000

‐20,000

‐25,000 13 12 11 11 10 10 09 09 08 08 07 07 06 06 05 05 04 04 03 03 02 02 01 01 12 11 10 09 08 07 06 05 04 03 02 01 12 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ p Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Se May May May May May May May May May May May May

RECENT INCREASES IN HOUSING PRICES ARE DRIVEN BY STRONG EMPLOYMENT GROWTH LOW MORTGAGE RATES ALSO ACCOMMODATE THE STRONG DEMAND FOR HOUSING

LOS ANGELES REGION / VENTURA COUNTY: HOUSING PRICE CHANGES 40%

30%

20%

10%

-10% PRICE CHANGES PRICE CHANGES - ANNUALLY -20%

-30%

-40% 1988.1 1989.1 1990.1 1991.1 1992.1 1993.1 1994.1 1995.1 1996.1 1997.1 1998.1 1999.1 2000.1 2001.1 2002.1 2003.1 2004.1 2005.1 2006.1 2007.1 2008.1 2009.1 2010.1 2011.1 2012.1 2013.1 2014.1

MORTGAGE RATES AS A SECONDARY ECONOMIC DRIVER

HIGH/LOW MORTGAGE RATES HAVE A MODERATE INFLUENCE ON PRICE DECREASES/ INCREASES ALSO, LOOSE LENDING CRITERIA (2002-2006) VS. TIGHT LENDING CRITERIA (2010-2012)

LOS ANGELES REGION / VENTURA COUNTY HOUSING PRICE CHANGES AND MORTGAGE RATES 40% 14%

30% 12%

20% 10%

10% 8%

0% 6%

-10% 4% FIXED 30 YEAR YEAR FIXED 30MORTGAGE RATE HOUSING PRICE CHANGES HOUSING PRICE CHANGES - ANNUALLY

-20% 2%

Empire Economics -30% 0% 1988.1 1989.1 1990.1 1991.1 1992.1 1993.1 1994.1 1995.1 1996.1 1997.1 1998.1 1999.1 2000.1 2001.1 2002.1 2003.1 2004.1 2005.1 2006.1 2007.1 2008.1 2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015

Price Ch. MR: Lower MR: Avg. MR: Upper Fixed: 30-Yr

C. RECENT UNEMPLOYMENT RATES: UNEMPLOYMENT RATES FOR CALIFORNIA AS WELL AS CFD NO. 1 MARKET REGION AND MARKET AREA

ALTHOUGH THE CITY OF OXNARD HAS A RELATIVELY HIGH UNEMPLOYMENT RATE, THE VENTURA AND SANTA BARBARA COUNTIES HAVE MUCH LOWER UNEMPLOYMENT RATES (According to the most recent Census Data, the mean commuting time to work for households in the City of Oxnard amounts to about 24 minutes.)

RECENT UNEMPLOYMENT RATES: CALIFORNIA, VENTURA/SANTA BARBARA COUNTIES AND THE CITY OF OXNARD 12%

10% 9.5% 9.0%

8% 6.9%

6.0% 6%

D. CONCLUSIONS ON RECENT/ FUTURE HOUSING MARKET CONDITIONS

Empire’s housing market forecast for the CFD No. 1 Market Region is based upon its Designated Economic and Real Estate Scenario, which is as follows:

Market Correction 2007-2009: During this time period the housing market experienced a MAJOR correction, due initially to mortgage resets for creative financing structures and then due to the negative equity for many homeowners. Additionally, this was exacerbated by more stringent mortgage loan qualification criteria. During this time there were high levels of mortgage loan defaults, low levels of housing sales and minimal amounts of new residential development activity.

Housing Market Moved Towards Stability 2010-2012: During this time period the housing market moved towards a balance of demand-supply, and so prices “stabilized”. Since employment growth, the fundamental factor underlying housing price appreciation, was not significant, the level of mortgage rates, which were at historically low levels, were critical factors supporting the market, especially since the federal tax credits for purchasers expired in April 2010. Additionally, although the adverse impact of properties under duress diminished, they still continued to create competition for new housing projects.

Foundation for a Market Recovery During 2013: The housing market is moving into a recovery phase, with the return of employment growth, although at a moderate level and a strong rate of housing price appreciation. As the economy gains strength, financial rates, including mortgage rates, are likely to move upwards, and this will somewhat offset the favorable impacts of employment growth.

Normal Market Conditions During 2014-2015+: Employment, the traditional driver of housing price appreciation, is expected to increase at a stronger rate, and this will enable the housing market to return to a “healthy” condition. However, unlike other recoveries, this recovery is not expected to surpass the long-term trendline due to the following macroeconomic conditions: * Reducing the Federal Deficit through higher tax rates, reduced deductions and lower spending. * Federal Reserve Board re-balancing its accounts by selling recently purchased securities.

Economic Strength of the CFD No. 1 Market Region: CFD No. 1 is situated in the City of Oxnard which has a somewhat higher unemployment rate; however, Ventura County and Santa Barbara counties, as a whole, have relatively low unemployment rates along with moderate employment growth. Since the demand for homes in CFD No. 1 is driven by employment growth in Ventura and Santa Barbara counties, as a whole, this will provide support for the currently active as well as the forthcoming projects in CFD No. 1.

SECTION III: MICROECONOMIC ANALYSIS

A. METHODOLOGY UNDERLYING THE MICROECONOMIC ANALYSIS OF THE RESIDENTIAL AND COMMERCIAL PROJECTS IN CFD NO. 1

The microeconomic analysis focuses upon the competitiveness of the residential and commercial projects in CFD No. 1 with regards to the regional geographic development patterns within Ventura County and also the currently active comparable projects within the Market Area.

Competitiveness from a Geographical Regional Perspective

Development Trends/Patterns in the CFD No. 1 Market Region/Area

* Socioeconomic Characteristics: Crime Rates and School Quality

The existing/active/forthcoming Planned Communities, Retail Centers and Business Parks, in conjunction with the transportation system, determines the locations of the employment centers and residential areas along with retail centers; accordingly, these patterns can then be utilized to gauge the marketing potential of CFD No. 1 from a geographic regional perspective.

Competitive Market Analysis of the Residential and Commercial Projects in CFD No. 1

Identification of the Currently Active Residential Projects in the Market Area and Selection of the Comparable Projects

Recent Sale Trends and Price Patterns for Housing in CFD No. 1

Competitive Market Analysis of the For-Sale and Apartment Projects: Statistical Analysis of the Prices/Rents, Living Area and Special Taxes

Recent Conditions in the Market Area for Retail Products

The Competitive Market Analysis evaluates the competitiveness of the residential and commercial projects in CFD No. 1 relative to the currently active comparable projects, with regards to their prices/rents and sizes of living areas, among other factors.

B. DEVELOPMENT TRENDS/PATTERNS IN THE CFD NO. 1 MARKET AREA

From a regional perspective, the competitiveness of CFD No. 1 Market Area, the City of Oxnard, is influenced by the geographic development patterns for employment and housing within Southern California, in general, and Ventura as well as Santa Barbara counties in particular.

Specifically, Business Parks/Office Complexes generate industrial-office development while Planned Communities provide residential development; these in turn generate a demand for Retail Centers. Additionally, the flow of traffic between them is facilitated by the freeways and transportation corridors.

 Expansion of Employment Centers and Business Parks

The major established employment centers in Southern California are Los Angeles, Orange, and San Diego (LA/OC/SD) urban cores as well as the western portions of Riverside and San Bernardino counties.

There has also been moderate growth for some Business Parks/Office Complexes located in Ventura County. Specifically, these are situated primarily along Interstate 101, a major westerly-easterly freeway that links the cities/communities in the CFD No. 1 Market Area with other portions of Ventura County as well as Santa Barbara County.

 Commuting Patterns: Employment Centers to Residential Areas

The CFD No. 1 Market Area has an economic base, and this, in turn, generates some demand for housing in the Market Area.

Additionally, some of the households employed elsewhere in Ventura County as well as Santa Barbara County reside in the CFD No. 1 Market Area, since it offers various housing opportunities, including moderately priced attached and detached homes.

These commuting patterns are based upon the Interstate 101 freeway that links these employment centers to the CFD No. 1 Market Area.

Therefore, the CFD No. 1 Market Area, the City of Oxnard, is strategically situated in Ventura and Santa Barbara counties, and, as such, offers moderately priced housing opportunities for households employed in these employment centers.

For additional information on the regional development patterns, please refer to the following exhibit.

EMPLOYMENT CENTERS SUPPORTING HOUSING DEMAND FOR CFD NO. 1

C. SOCIOECONOMIC CHARACTERISTICS: CRIME LEVELS AND THE QUALITY OF SCHOOLS

When households consider the purchase of a home, the primary factors are the location of the residence relative to their place of employment and also the prices that they can afford; furthermore, secondary socioeconomic factors that are significant include the neighborhood safety as well as the educational quality of the schools in the Market Area; accordingly, these are now discussed.

1. Crime Levels and Safety in the Market Area

To gauge the safety of the CFD No. 1 Market Area, information on crime levels was obtained utilizing the most recent data available from the Federal Bureau of Investigation (FBI) Index, with a focus on “Violent Crimes”.

 CFD Market Area/City of Oxnard: The violent crime rate is approximately 1.56 per 1,000 people per year.

 City of Santa Barbara: The violent crime rate is somewhat higher, about 1.79 per 1,000 people per year.

 City of Los Angeles: The violent crime rate is significantly higher, about 2.59 per 1,000 people per year.

SOCIOECONOMIC CHARACTERISTICS: CRIME LEVELS (FBI: VIOLENT CRIME RATES BY CITIES/AREAS) 3.00

2.59

2.50

2.00 1.79 1.56

1.50

1.00

0.50 VIOLENT CRIME RATE PER 1,000 PEOPLE 1,000 PER RATE CRIME VIOLENT

0.00 Oxnard Santa Barbaba Los Angeles

The City of Oxnard, has a somewhat lower crime rate as compared to the City of Santa Barbara, and a significantly lower crime rate than the City of Los Angeles; this is beneficial to the demand for homes in CFD No. 1.

2. Quality of Schools and Education

To gauge the quality of schools in the CFD No. 1 Market Area and its vicinity, information was compiled on educational achievement, utilizing the Academic Performance Index Scores (API), published by the California Department of Education in a report dated 2012.

SOCIOECONOMIC CHARACTERISTICS: EDUCATIONAL QUALITY RECENT API SCORES FOR CALIFORNIA AND SELECT DISTRICTS

1000

788 800 725

627 600 API SCORES SCORES API

400

200

0 California Ventura County Rio Elementary

Accordingly, the Rio School District has an API of 725, much higher than that of other schools in Ventura County.

Conclusions

From a socioeconomic perspective, the CFD No. 1 Market Area has a significantly lower crime rate and the school district has a significantly higher educational achievement level than for other nearby cities/areas; accordingly, these positive socioeconomic factors support the demand for homes in CFD No. 1.

D. COMPETITIVE MARKET ANALYSIS OF THE FOR-SALE PROJECTS IN CFD NO. 1

A Competitive Market Analysis of the for-sale projects in CFD No. 1 is now performed, by analyzing their recent sales trends and price patterns as well as their characteristics, such as prices, living areas, Special Taxes and sales rates, among others.

1. Selection of the Currently Active Comparable Projects

Empire Economics, based upon its market surveys, identified the currently active residential projects in the Oxnard area and its vicinity, and then selected those that are regarded as being the most comparable to the projects in CFD No. 1; accordingly, these are as follows:

CFD No. 1 - RiverPark:

. Detached:  Pacific Crossing

. Attached:  Boardwalk  East End  Waypointe  Avenue II

. Affordable:  Vista Urbana

Other Nearby Currently Active Projects:

. Port Hueneme  Hideaway (Coastal Location)  The Bungalows (Coastal Location)

Based upon a consideration of the number of currently active projects and also their locations, the Competitive Market Analysis focuses specifically upon the currently active projects within CFD No. 1. By comparison, the other two nearby active projects are in Port Hueneme which is a coastal area, and so these are not regarded as being comparable.

2. Recent Housing Sales Trends and Price Patterns in the Competitive Housing Market Area

To provide an overview of the recent conditions in the CFD No. 1, their recent sales trends and price patterns are now analyzed.

Empire identified 1,193 new homes that were marketed in the Competitive Market Area (CMA) during the 2007 - March 2013 time period; of these, 1,039 had sufficient information on sales dates, sales prices and sizes of living area to be included in this analysis..

Housing Sales Trends:

 During 2006 to 2008, sales increased as projects began to enter the marketplace, from 91 homes in 2006 to 195 homes in 2008.

 From 2009 to 2011, sales decreased dramatically, from 153 in 2009 to a trough of 104 in 2011; additionally, an increasing proportion of these sales were resales by original homeowners, probably due to foreclosures and short sales.

 Then, in 2012, sales rebounded, reaching a level of 158 homes but of these, about 43% were resales.

 For the January-April 2013 time period, sales amounted to 43 homes, a pace similar to 2012, again with a significant number of resales.

Note: Although April 30 was the cut-off date for this analysis, there may have been additional homes that closed escrow before then, but sufficient data on them was not available due to reporting lags, especially with regards to the mortgage data.

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 YEARS IN WHICH *CURRENT* HOMEOWNERS PURCHASED THEIR HOMES 250

200

150

100 Number Sales of

0 Jan.-April 2006 2007 2008 2009 2010 2011 2012 2013 Resales 0 0 4 10 20 39 68 27 Original Sales 91 167 191 143 108 65 90 16

Original Sales Resales

Housing Price Patterns:

The sales prices for the homes in CFD No. 1 are now analyzed by using their actual sales prices during the August 2006 to April 2013 time period.  While the actual sales prices typically include buyer incentives as well as premiums for options/upgrades, which may vary significantly among the specific home sales, they are regarded as being generally reliable indicators of sales price trends.  Additionally, the sales prices are adjusted for the variations in the sizes of the homes so that they represent price changes for the average sized home, which has 1,745 sq.ft. of living area; during the 2006-2013 time period, the average sizes of the homes sold per year ranged from 1,645/avg. in 2010 to 1,843/avg. in 2007.

The sales prices for homes in CFD No. 1 exhibited the following pattern during August 2006 to April 2013 time period:  Prices started at a level of approximately $340,361 in 2006, and then escalated to a peak level of $405,919 in 2007.  Then, prices declined substantially from 2008 to 2012, to about $260,720 in 2012, a decrease of some -36%.  From 2012 to January-April 2013, prices rose to $293,642, an increase of +13%.

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 HOUSING PRICE PATTERNS $450,000

$405,919 $400,000

$355,403 $340,361 $350,000 $330,653 $319,924

$300,000 $293,642

$270,675 $260,720 $250,000

$200,000

Housing Sales Prices $150,000

$100,000

$50,000

$0 2006 2007 2008 2009 2010 2011 2012 2013

Although Empire made adjustments to the prices due to variations in the sizes of the homes, there may still be some potential aberrations due to the types of products that are being offered in the marketplace.

3. Competitive Market Analysis of the For-Sale Projects in CFD No. 1 - RiverPark

A Competitive Market Analysis of the projects in CFD No. 1, RiverPark, is now performed, by discussing their characteristics, with regards to prices, living areas, Special Taxes and sales rates, among others.

The six currently active comparable projects in CFD No. 1, RiverPark, together have a total of 549 housing units; of these, 294 have had their escrows closed and so there are another 255 remaining for future occupancies.

 RiverPark-Detached: 1 project that has a total of 104 homes; 69 homes have closed escrows and so there are another 35 for future closings.

 RiverPark-Attached: 4 active projects with 289 homes; 194 have closed escrows and so there are another 95 for future escrow closings.

 RiverPark-Affordable: 1 active project with 156 homes; 31 have closed escrows and so there are another 125 for future escrow closings.

CFD NO. 1 MARKETING STATUS OF THE PROJECTS 250

200

150

100

0 RiverPark - Detached RiverPark - Attached RiverPark-Affordable Escrows Closed 69 194 31 Future Units 35 95 125

For the comparable projects in CFD No. 1, RiverPark, their prices amount to some $342,783, on the average, while their living areas are some 1,738 sq.ft., on the average.

 RiverPark-Detached: Base prices of $436,400 for some 1,822 sq.ft. of living area.

 RiverPark-Attached: Base prices of $354,200 for some 1,898 sq.ft. of living area.

 RiverPark-Affordable: Base prices of $203,499 for some 1,012 sq.ft. of living area.

Additionally, the currently active projects are offering incentive to purchasers that amount to some $5,167, on the average, with a range of $0 to $12,000. Most of these incentives appear to be related to the purchaser using the builder’s lender for their mortgage loan.

CFD NO. 1 PRICES AND LIVING AREAS FOR THE PROJECTS $500,000 2,000

$450,000 1,800

$400,000 1,600

$350,000 1,400

$300,000 1,200

$250,000 1,000

$200,000 800 PRICES OF HOUSING UNITS $150,000 600 SIZE OF LIVING AREA - AREA OF LIVING SIZE SQUARE FEET

$100,000 400

$50,000 200

$0 0 RiverPark - Detached RiverPark - Attached RiverPark-Affordable Totals/Averages LEFT: Price $436,400 $354,200 $203,499 $342,783 RIGHT: Living Area 1,822 1,898 1,012 1,738

To compare the prices of the comparable projects in CFD No. 1 their value ratios are utilized, the price per sq. ft. of living area, since this effectively makes adjustments for differences in their sizes of living areas. Accordingly, the value ratios amount to $199 per sq. ft. of living area and their Special Taxes/Assessments amount to some $3,809/yr. (1.07% as a ratio to the housing prices):

 RiverPark-Detached: Value Ratio of $240 and Special Taxes of $4,972/yr. (1.14%).

 RiverPark-Attached: Value Ratio of $188 and Special Taxes of $4,201/yr. (1.19%).

 RiverPark-Affordable: Value Ratio of $201 and Special Taxes of $1,080/yr. (0.53%).

CFD NO. 1 VALUE RATIOS AND SPECIAL TAXES FOR THE PROJECTS $300 $4,500

$4,000 $250 $240 $3,500

$201 $199 $200 $188 $3,000

$2,500 $150 $2,000

$100 $1,500

VALUE RATIO: PRICE / LIVING AREA LIVING / PRICE RATIO: VALUE $1,000

$50 -ASSESSMENTS / TAXES ANNUALLY SPECIAL $500

$0 RiverPark - Detached RiverPark - Attached RiverPark-Affordable Totals/Averages $0 LEFT: Value Ratio $240 $188 $201 $199 RIGHT: Special $4,972 $4,201 $1,080 $3,809 Assmt/Tax

The CFD No. 1 RiverPark’s active projects have an estimated “recent” sales rate of some 133 homes per year, for an average of some 22 homes per project per year; additionally, they have a future supply of 255 homes which, at recent sales rates, could take some 1.9 years to close-out.

(Note: Time to close-out of projects is extrapolated using current sales rates.)

 RiverPark-Detached: 1 project with sales of 21 homes annually, and 35 remaining homes (1.7 years to close-out).

 RiverPark-Attached: 4 projects with sales of 67 homes annually, some 17/project, and 95 remaining homes (1.4 years to close-out).

 RiverPark-Affordable: 1 project with sales of 45 homes annually, and 125 remaining homes (2.8 years to close-out).

CFD NO. 1 SALES RATES AND FUTURE SUPPLY FOR THE PROJECTS 250 100 67 45 50 194 200 21 0

-50 150 125 -100

95 100 - SALES FOR PROJECTS ANNUALLY -150 69 -200

NUMBER OF HOMES: SOLD AND FUTURE SUPPLY SUPPLY FUTURE AND SOLD HOMES: OF NUMBER 50 35 31 -250

0 -300 RiverPark - Detached RiverPark - Attached RiverPark-Affordable

Escrows Closed Future Supply Sales-Year

CHARACTERISTICS OF THE *COMPARABLE* ACTIVE PROJECTS IN THE COMPETITIVE HOUSING MARKET AREA BY MARKET SEGMENTS

Special Taxes

Project Project Builder Product Project Size and Sales Housing Prices Incentives Size of Living Area Value (Base Rate = 1.15%)

Locations Type Total Escrows Future Sales Lower Average Upper Lower Average Upper Ratio Amount/ Ratio/

Closed Rate/Yr. Year Price

RiverPark - Detached Pacific Crossing Standard Pacific Detached 104 69 35 21 $398,900 $436,400 $473,900 $12,000 1,547 1,822 2,097 $240 $4,972 1.14%

RiverPark - Attached Boardw alk Shea Homes Attached 81 76 5 23 $275,000 $312,500 $350,000 $5,000 1,800 1,962 2,124 $159 $4,200 1.34%

RiverPark - Attached East End Shea Homes Attached 72 0 72 20 $299,000 $344,500 $390,000 $0 1,478 1,745 2,012 $197 $3,800 1.10%

RiverPark - Attached Waypointe Standard Pacific Attached 104 90 14 18 $328,900 $351,400 $373,900 $7,000 1,388 1,626 1,864 $216 $3,774 1.07%

RiverPark - Attached Avenue II Standard Pacific Attached 32 28 4 6 $406,900 $408,400 $409,900 $7,000 2,192 2,259 2,325 $181 $5,028 1.23%

RiverPark-Affordable Vista Urbana Aldergate Investments Att. - Affordable 156 31 125 45 $196,999 $203,499 $209,999 $0 998 1,012 1,025 $201 $1, 080 0.53%

Statistical Summary

Sales / Year Projects

RiverPark - Detached 21 1 104 69 35 21 $398,900 $436,400 $473,900 $12,000 1,547 1,822 2,097 $240 $4,972 1.14%

RiverPark - Attached 17 4 289 194 95 67 $327,450 $354,200 $380,950 $4,750 1,715 1,898 2,081 $188 $4,201 1.19%

RiverPark-Affordable 45 1 156 31 125 45 $196,999 $203,499 $209,999 $0 998 1,012 1,025 $201 $1,080 0.53%

Totals/Averages 22 6 549 294 255 133 $317,617 $342,783 $367,950 $5,167 1,567 1,738 1,908 $199 $3,809 1.07%

E. COMPETITIVE MARKET ANALYSIS OF THE APARTMENT PROJECTS IN CFD NO. 1

A Competitive Market Analysis of the apartment projects in CFD No. 1 is now performed, by analyzing their rents and living areas.

1. Selection of the Currently Active Comparable Projects

Empire Economics, based upon its market surveys, identified the “recently constructed” apartment projects in the City of Oxnard and its vicinity, and then selected those that are regarded as being the most comparable to the apartment projects in CFD No. 1.

Specifically, the primary criterion for the apartment projects outside of CFD No. 1 was that they offer units at market rate and also that they were constructed recently; accordingly, the characteristics of the apartment projects in CFD No. 1 as well as the market comparables are as follows:

CFD No. 1 - RiverPark:

. Paseo Santa Clara (2009: Year Built)– Affordable /Income Qualifications

. Serenade (2007) – Market Rents

. Mosaic – (2013) Under Construction – Market Rents

. The Vines (2013) – Condominium Project – Now Renting Units

Other Nearby Apartment Projects:

. Archstone in Ventura (2007) – Market Rents

. Artisan Apartments City of Oxnard (2013) – Market Rents

So, based upon market surveys of apartment projects and applying the years that the apartments were built as the primary criterion (since all of the apartment projects in CFD No. 1 were built recently), Archstone and Artisan are the relevant comparables.

2. Competitive Market Analysis of the Apartment Projects

The rents, living areas and other characteristics of the apartments in CFD No. 1 are compared to the market comparables, in order to evaluate their competitiveness in the marketplace.

The apartments in CFD No. 1 and the market comparables were partitioned into three market segments; their characteristics are as follows:

 RiverPark-Affordable: 1 project with 140 units that entered the market in 2009; all have been leased.

 RiverPark – Market Rate: 3 projects with 704 units that entered the marketplace during 2007 (1 project) to 2013 (2 projects); of these 435 are leased;  Serenade with 400 units entered the market in 2007 and has leased all the units.  The Vines with 80 units, originally planned as a condo project, entered the market in 2013 and has leased 35 units; the units may eventually be sold as condominiums.  Mosaic with 224 units is expected to commence leasing units late Fall 2013.

 Market Comparables:  Archstone with 316 units entered the marketplace in 2007 and has leased all of the units.  The Artisan Apartments with 272 units entered the market in 2013 and has leased 136 units.

The rental rates and the living area are now analyzed, along with the rent/sq.ft.

 RiverPark Affordable: A typical lease rate $914/mo. (for a family with a moderate level of income) for a units with 935 sq.ft., for a rent ratio of $0.98 per sq.ft.

 RiverPark Market Rate: Typical lease rates $1,450 to $2,268 per month for units with 802 to 1,428 sq.ft., for a rent ratio of $1.59 to $1.81 per sq.ft.

 Market Comparables Market Rate: Typical lease rates $1,590 to $2,118 per month for units with 1,029 to 1,150 sq.ft., for a rent ratio of $1.55 to $1.84 per sq.ft.

Therefore, based upon the above competitive market analysis, the RiverPark-Market Rate rents ($1.69) are somewhat below the Comparables–Market Rate ($1.84), and so they are regarded as being competitive in the marketplace.

For additional information of the apartments, with regards to rents, living areas and other characteristics, please refer to the following table.

CHARACTERISTICS OF THE CFD NO. 1 AND *COMPARABLE* APARTMENT PROJECTS

Market Segments Project Name Builder Name Market or Year Project Size and Lease Status Apartment Rents Size of Living Area Rent/

Affordable Built Total Leased Future Lower Average Upper Lower Average Upper Sq.Ft.

Rents

RiverPark Affordable Paseo Santa Clara Cabrillo Economic Dev. Affordable 2009 140 140 0 $774 $914 $1,054 724 935 1,145 $0.98

RiverPark- Market Rate Serenade EDKOH Market Rate 2007 400 400 0 $1,300 $1,650 $2,000 796 990 1,184 $1.67

RiverPark- Market Rate Mosaic - Under Construction Wolff Partners Market Rate 2013 224 0 224 $1,300 $1,450 $1,600 645 802 958 $1.81

RiverPark- Market Rate The Vines - Condos; Now Renting Corona Pacific Market Rate 2013 80 35 45 $2,100 $2,268 $2,435 1,301 1,428 1,554 $1.59

Ventura - Vanoni Ranch Archstone Avalon Comm. Property Market Rate 2007 316 316 0 $1,433 $1,590 $1,746 728 1,029 1,329 $1.55

Oxnard The Artisan Apartments Shea Apt. Comm. Market Rate 2013 272 136 136 $1,465 $2,118 $2,770 723 1,150 1,576 $1.84

Statistical Summary

RiverPark Affordable 140 140 0 $774 $914 $1,054 724 935 1,145 $0.98

RiverPark- Market Rate 704 435 269 $1,567 $1,789 $2,012 914 1,073 1,232 $1.69

Comparables - Market Rate 272 136 136 $1,465 $2,118 $2,770 723 1,150 1,576 $1.84

Totals/Averages 1,432 1,027 405 $1,395 $1,665 $1,934 820 1,055 1,291 $1.57

F. RECENT CONDITIONS IN THE RETAIL MARKET FOR VENTURA COUNTY

The purpose of this section is to discuss the recent/current trends/patterns for lease rates and vacancy rates as well as new construction activity in the retail market for Ventura County.

As a point of reference, the conditions for the retail market in Ventura County are compared to those of the Los Angeles Urban Core. The statistics presented herein are from CBRE Inc. a major provider of commercial real estate data.

 Ventura County has an estimated 22,725,383 sq.ft. of retail space, and this represents a share of about 17.3% of the aggregate amount of retail space for the greater Los Angeles area, which includes Los Angeles County as well as Ventura County.

 Ventura County has a current vacancy rate of about 6.4%, and this is slightly higher than the aggregate vacancy rate of 6.0% for the greater Los Angeles area.

 Ventura County has a current asking lease rate of $2.24, and this is some 14% higher than the aggregate lease rate of $1.96 for the greater Los Angeles area.

 With regards to current construction activity, the major project in the greater Los Angeles area that is under construction is “The Collection”, the major retail center in CFD No. 1.

Accordingly, to CBRE, the greater Los Angeles area is expected to experience declining vacancy rates over the next year, while the asking lease rates are expected to remain stable.

With regards to other major retail development in the City of Oxnard, the Rose Shopping Center is situated just on the other side of the 101 freeway, to the west of CFD No. 1: some of its major tenants are as follows: Walmart Neighborhood Market, TJ Max, Bed-Bath Beyond, Dick’s Sporting Goods and other major tenants as well as numerous smaller stores and restaurants.

SECTION IV: ESTIMATED ABSORPTION SCHEDULES

A. ESTIMATED ABSORPTION SCHEDULES FOR THE RESIDENTIAL PROJECTS IN CFD NO. 1

The purpose of this section is to estimate the absorption schedules for the currently active and forthcoming residential projects CFD No. 1, based upon a comprehensive analysis of the following factors:

 For the currently active projects, their recent performance in the marketplace, with regards to their sales rates as well as the number of homes that have sold but have not yet closed.

 For the forthcoming projects, their expected development schedules, with regards to their entering the marketplace.

 The market demand for homes in the CFD No. 1Market Area is based upon recent/expected economic and real estate factors, according to the Most Probable Economic Scenario. Since the demand for homes in CFD No. 1 is driven by employment growth in Ventura and Santa Barbara counties, as a whole, this will provide support for the currently active as well as the forthcoming projects in CFD No. 1.

 The competitive market analysis revealed that the currently active for-sale and also apartment projects in CFD No. 1 have prices/rents, living areas and special taxes that are regarded as being competitive with other active projects in the Competitive Housing Market Area.

Accordingly, Empire’s estimated absorption (escrow closings for-sale homes and apartment rentals) schedules for the residential projects in CFD No. 1 are as follows:

The estimated absorption schedules for the residential projects in CFD No. 1 are subject to change due to potential shifts in economic/real estate market conditions and/or the development strategy by the developer of the various builders.

Please refer to the graph and table on the following pages for additional information on the residential absorption schedules.

Specifically, the table represents the number of homes absorbed by market segment by year for the currently active projects as compared to the forthcoming new proejcts.

Potential Risk Factors

Although the economic and real estate conditions for the currently active as well as the forthcoming projects in CFD No. 1 are expected to be favorable, there are some potential risk factors:

 During the next several years, there are potential factors which may result in higher mortgage rates, as the Federal Reserve re-sells the mortgage securities and also the treasury bonds that it has purchased in recent years.

 Also, during the next several years, as the federal government moves toward reducing its deficits, there may be attempts to curtail the use of mortgage deductions, and this may adversely impact the housing market.

Finally, the estimated absorption schedules, which represent escrow closings to homeowners, are subject to the Assumptions and Qualifications set-forth in Section V.

CFD NO. 1 (RIO SCHOOL DISTRICT) ESTIMATED ABSORPTION SCHEDULE

450

400

350

300

250

200

150

ESTIMATED ABSORPTION ABSORPTION -ESTIMATED ANNUALLY 100

0 January FUTURE June - RECENT 2006 2007 2008 2009 2010 2011 2012 - May ABSORP Decem. 2014 2015 2016 2017 2018 SALES 2013 TION 2013 Detached: For-Sale 15 56 40 31 26 21 29 7 35 50 100 125 93 0 Attached: For-Sale 90 131 175 142 122 103 149 56 100 171 45 39 0 0 Apartments 0 200 200 0 70 70 0 0 100 124 150 138 0 0

ESTIMATED ABSORPTION SCHEDULES CFD NO. 1

Overall Product Types >>> Apartments Attached: For-Sale Detached: For-Sale Totals Averages

Housing Units Totals 1,052 1,323 628 3,003 Share 35.0% 44.1% 20.9% 100.0%

Development-Marketing Status: Planned Units/Homes 1,052 1,323 628 3,003 Occupied - Escrows Closed/Rented 540 968 225 1,733 Future Near Term Active 224 271 35 530 Future - Parcel Not Active 288 84 368 740

Check >>> 0 0 0

Recent Absorption Schedules 2006 0 90 15 105 105 2007 200 131 56 387 492 2008 200 175 40 415 907 2009 0 142 31 173 1,080 2010 70 122 26 218 1,298 2011 70 103 21 194 1,492 2012 0 149 29 178 1,670 January - May 2013 0 56 7 63 1,733

Empire's Absorption Schedules (Cells Not Shaded: Currently Active Projects - Cells Shaded: Future Projects) June - December 2013 100 100 35 235 1,968 2014 124 171 50 345 2,313 2015 150 45 100 295 2,608 2016 138 39 125 302 2,910 2017 0 0 93 93 3,003 2018 0 0 0 0 3,003

Totals - Future Absorption 512 355 403

B. ESTIMATED ABSORPTION SCHEDULES FOR THE COMMERCIAL PROJECTS IN CFD NO. 1

The purpose of this section is to estimate the absorption schedules for the currently active and forthcoming commercial projects CFD No. 1, accordingly, these are now discussed.

With regards to the development and marketing of the forthcoming commercial parcels, Empire partitions them into four categories: each of these are now discussed.

Developed/Active:

o Of the maximum allowable 904,000 sq.ft. of building space, 734,663 sq.ft. (81%) of the allowable space has been constructed/built, leaving 169,337 sq.ft. (19%) for potential future development.

Status of Buildings that have been Constructed: 734,663 sq.ft.

o With regards to the 734,663 sq.ft. of space that has been constructed, there were executed leases for about 387,939 sq.ft. of space as of April 1, 2013, for a occupancy rate of about 53%; all of these stores are expected to be occupied by the end of 2013.

o So, there is another 346,724 sq.ft. of building space that that has been constructed but has NOT yet been leased, for a vacancy rate of about 47%, and most of these stores are for moderate/smaller sized vs. major tenants. Since the major tenants are essentially in place, the remaining space is expected to be leased during 2013-2016+.

Status of Future Building to be Constructed: 169,337 sq.ft.

o With regards to the remaining 169,337 sq.ft., based upon its maximum entitlements, this is expected to be utilized for additional commercial outlets. However, considering the significant amount of space that is currently available, there is not expected to be additional space constructed in the near-term.

Near Term Development (Next 3 Years):

Planning District E has some development activity in the pipeline for a fast food outlet with about 3,500 sq.ft. of building space that may enter the marketplace during 2014.

Planning District D has some development activity in the pipeline for a 24 Hour Fitness Super Sport with an estimated 43,000 sq.ft. of building space that may enter the marketplace during 2015.

Future Development:

 Since these parcels are NOT in the development stage, with regards to site planning, building permits or construction, there are regarded as being three+ years from entering the marketplace, and so their absorption is not set-forth herein; the specific Planning Districts are as follows:

o Planning Area C with for a Convention/Hotel District with 478,000 sq.ft. o Planning District B with 104,000 sq.ft. o Planning Area A with about 20,000 sq.ft., reduced from 456,000 sq.ft. due to apartments.

Commercial Not Probable:

 There are another five Planning Districts that had development potential for smaller commercial projects; however, these are in areas that have already been committed for residential projects, and so their commercial development in not probable since the land was used instead for residential products.

o Planning Area G: 15,000 sq.ft o Planning Area I: 10,000 sq.ft. o Planning Area J: 10,000 sq.ft. o Planning Area F: 5,000 sq.ft. o Planning Area K: 5,000 sq.ft.

Conclusions on Near-Term Commercial Absorption

Based upon an analysis of the recent/expected development-marketing conditions for commercial properties in CFD No. 1 is for leasing up the existing building space in Planning Area D, The Collections, as additional retail stores utilize the infill sites that are currently available.

The other development is in Planning Area E, which has a fast food outlet in the planning stages.

With regards to the other parcels, they are regarded as having a longer term development potential, of at least some three+ years; since they are not currently active in the development process, their absorption is estimated as having a three year+ time horizon.

SECTION V: ASSUMPTIONS AND LIMITING CONDITIONS

The Market Absorption Study is based upon various assumptions and limiting conditions; accordingly, these are as follows:

Property Boundaries No survey or engineering analysis of CFD No. 1 property has been made by the market analyst; the District Engineer's report utilized for the Bond is deemed to be reliable. The market analyst assumes the existing boundaries to be correct, that no encroachments exist and assumes no responsibility for any condition not readily observable from customary investigation and inspection of the premises, which might affect the valuation, excepting those items which were specifically mentioned in the report.

Maps and Exhibits Maps and exhibits included in this report are for illustration only as an aid in visualizing matters discussed within the report. They should not be considered as surveys, or relied upon for any other purpose, nor should they be removed from, reproduced, or used apart from the report.

Title to Property No opinion as to title is rendered. Data related to ownership and legal description, obtained from governmental records related to the formation of the District that forms the basis for identifying the boundaries of CFD No. 1 are considered reliable. Title is assumed to be marketable and free and clear of all liens, encumbrances, easements and restrictions except those specifically discussed in the report. The property is evaluated assuming to be under responsible ownership and competent management and available for development to highest and best use.

Earthquakes and Seismic Hazards The property which is the subject of this market analysis is within a geographic area prone to earthquakes and seismic disturbances. Except as specifically indicated in the report, no seismic or geologic studies have been provided to the market analyst concerning the geologic and/or seismic condition of the subject property. The market analyst assumes no responsibility for the possible effect on the subject property of seismic activity and/or earthquakes.

Soil and Geological Studies No detailed soil studies or geological studies or reports were made available to the market analyst. Assumptions employed in this report regarding soils and geologic qualities of the subject property have been provided to the client. However, such assumptions are not conclusive and the market analyst assumes no responsibility for soils or geologic conditions discovered to be different from the conditions assumed unless otherwise stated in this report.

Hidden or Unapparent Conditions The market analyst assumes no responsibility for hidden or unapparent conditions of the property, subsoil, groundwater or structures that render the subject property more or less valuable. No responsibility is assumed for arranging for engineering, geologic or environmental studies that may be required to discover such hidden or unapparent conditions.

Presence and Impact of Hazardous Material Unless otherwise stated in the report, the market analyst did not become aware of the presence of any hazardous material or substance during the market analyst's general inspection of the subject property. However, the market analyst is not qualified to investigate or test for the presence of such materials or substances. The presence of such materials or substances may adversely affect the evaluation of the subject property. The market analyst assumes no responsibility for the presence of any such substance or material on or in the subject property, nor for any expertise or engineering knowledge required to discover the presence of such substance or material.

Structural Deficiencies of Improvements The market analyst has not performed a thorough inspection of the subject property, and except as noted in this report has not found obvious evidence of structural deficiencies in any improvements located on the subject property. Consequently, the market analyst assumes no responsibility for hidden defects or nonconformity with specific governmental requirements, such as fire, building and safety, earthquake or occupancy codes, unless inspections by qualified independent professions or governmental agencies were provided to the market analyst. Further, the market analyst is not a licensed engineer or architect and assumes no responsibility for structural deficiencies not apparent to the market analyst at the time of their inspection.

Presence of Asbestos The market analyst is not aware of the existence of asbestos in any existing improvements on the subject property. However, the market analyst is not trained to discover the presence of asbestos and assumes no responsibility should asbestos be found in or at the subject property. For the purposes of this report, the market analyst assumes the subject property is free of asbestos and the subject property meets all federal, state and local laws regarding asbestos abatement.

Environmental and Other Regulations The property is evaluated assuming it to be in full compliance with all applicable federal, state and local environmental regulations and laws, unless otherwise stated, and that there are no lawsuits that may adversely impact the rate of development.

Required Permits and Other Governmental Authority Unless otherwise stated, the property evaluated is assumed to have all required licenses, permits, certificates, consents or other legislative and/or administrative authority from any local, state or national government or private entity or organization that have been or can be obtained or renewed for any use on which the evaluation analysis contained in this report is based upon.

Designated Economic Scenario The Market Absorption Study focuses upon the expected absorption schedule for the products in CFD No. 1 according to the designated economic scenario. Specifically, this scenario represents the economic and real estate conditions for the Market Region and also the Market Area during the foreseeable future according to the most probable conditions, and this is regarded as being appropriate for the Bond Financing. However, the economic and market conditions which actually materialize on a year by year basis may differ from those presented according to the designated economic scenario, as a result of exogenous factors which are difficult to forecast/quantify. Accordingly, the designated scenario should be utilized as an economic framework for evaluating the marketing prospects of the properties within CFD No. 1 rather than a "literal" representation of what is expected to occur on a year/year basis during the foreseeable future.

Provision of the Infrastructure The Market Absorption Study assumes that the governmental agencies that supply public facilities and services, including water, provide these in a timely manner so that the proposed products/projects in CFD No. 1 can respond to the expected market demand for their products. Otherwise, if the required infrastructure is not available in a timely manner, then the absorption of the products/projects could be adversely impacted.

Developer/Builders Responsiveness to Market Conditions The Market Absorption Study assumes that the developer/builders in CFD No. 1 respond to the market conditions with products that are competitively priced and have the features/amenities that are desired by the purchasers. Specifically, many of the homes in CFD No. 1 have not yet entered the marketplace, and so the specific characteristics of their product types cannot be identified until they actually offer products on the marketplace. Consequently, to the extent that future products/projects have prices/features that differ from the competitive market standards, then their absorption schedule would need to be modified from those presented according to the designated economic scenario.

Financial Strength of the Projects’ Developer/Builders The Market Absorption Study assumes that the developer/builders in CFD No. 1 (and also their lenders) have sufficient financial strength to adequately fund their projects, including paying their Special Taxes/Assessments, and that they have sufficient financial reserves which could be utilized to supplement their cash flow positions, in the event that adverse economic or market conditions occur.

Accuracy of Information from Others In preparing this report, the market analyst was required to rely on information furnished by other individuals or found in previously existing records and/or documents. Unless otherwise indicated, such information is presumed to be reliable. However, no warranty, either expressed or implied, is given by the market analyst for the accuracy of such information and the market analyst assumes no responsibility for information relied upon and later found to have been inaccurate. The market analyst reserves the right to make such adjustments to the analyses, opinions and conclusions set forth in this report as may be required by consideration of additional data or more reliable data that may become available.

Liability of Market Analyst The liability of Empire Economics, the market analyst responsible for this report, is limited to the client only and to the fee actually received by the market analyst. Further, there is no accountability, obligation or liability to any third party. If this report is placed in the hands of anyone other than the client, the client shall make such party aware of all limiting conditions and assumptions of the assignment and related discussion. The market analyst is in no way to be responsible for any costs incurred to discover or correct any deficiencies or any type present in the property--physical, financial, and/or legal.

Testimony or Court Attendance Testimony or attendance in court or at any other hearing is not required by reason of rendering this market analysis, unless such arrangements are made a reasonable time in advance of said hearing. Separate arrangements would need to be made concerning compensation for the market analyst's time to prepare for and attend any such hearing.

Right of Publication of Report Possession of this report, or a copy of it, does not carry with it the right of publication except for the party to whom it is addressed. Without the written consent of the market analyst, this report may not be used for any purpose by any person other than the party to whom it is addressed. In any event, this report may be used only with properly written qualification and only in its entirety for its stated purpose.

Timeliness of the Market Absorption Study The Market Absorption Study performs a comprehensive analysis of the relevant land-use, economic, residential and commercial market conditions that are expected to influence the marketing success of the products/projects in CFD No. 1. Nevertheless, the Study should be dated within six-months of the Bond Sale, or even sooner, should these land-use and/or economic market as well as real estate conditions change significantly.

APPENDIX A CREDENTIALS/QUALIFICATIONS OF EMPIRE ECONOMICS RESUME: JOSEPH T. JANCZYK, Ph.D.

Education: University of California, Riverside, Ph.D. in Economics, Completed in 1976 Specializations in Urban Economics, Mathematical Modeling and Econometric Analysis State University of New York at Buffalo, Bachelors, Completed in 1970 Dual Majors: Economics and Psychology

Prior Employment: California State University, Tenured Economics Professor: 1976-1985 Courses Taught: Microeconomics, Macroeconomics, Urban Economics, Computer Modeling, Econometrics, among others

Empire Economics: Chairman and President: 1986-Present

 Perform Independent Real Estate Consulting Services Primarily for Land Secured Financings  Work for Public Entities including Counties, Cities, School Districts and Water Districts  Long-term Relationships with Many Clients, Including Orange and Riverside Counties, 25+ years  Well Established Relationships with Numerous Professionals in the Municipal Finance Industry

 Performed 450+ Studies on behalf of Public Entities for $14B+ in municipal financing o Land Secured Financings for Planned Communities, Business Parks and Retail Centers for 350+ CFDs/ADs for $7.5B bonds . Price Point Studies – Establish Special Taxes that conform to public entities’ policies . Market Absorption Studies: Provide timelines for phasing infrastructure . Homeowner Equity Studies: Current Equity levels for homeowners o Economic Forecasting Studies: Forecast Employment and Housing Demand

 Socioeconomic Studies Orange County Transportation Corridors: 2 studies $2.75B bonds o Designated as Municipal Bond Issue of the Year for 1999 o Rating Agency and Bond Insurer Presentations – Trips to New York City

 Mortgage Revenue Bond Issues: Lower Mortgage Rates 50+ studies for $1.7B bonds  Other Municipal Bond Issues: 35+ studies $2B+ bonds; Certificates of Participation, others  Forthcoming Bond Issues: 30+ studies for $500M+ future bond sales

Industry Contributions – Regular Speaker/Panelist at Following Events:  UCLA Municipal Bond Financing Seminars (10+ times, as Featured Speaker)  Bond Buyer Conference  League of Cities  Municipal Bond Industry Association  Best Practices for Continuing Disclosure  Appraisal Standards for Land Secured Financing by CDIAC  Meetings with Municipal Bond Funds

Dedicated to Public Sector: Certifications Provided in each Study:  Empire has not performed any consulting services for the CFD/AD property owners nor the developers/builders, during at least the past twenty years.  Empire will not perform any consulting services for the CFD/AD property owners nor the developers/builders, during at least the next five years.

[THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX E

MORTGAGE STUDY

E-1

[THIS PAGE INTENTIONALLY LEFT BLANK]

COMMUNITY FACILITIES DISTRICT NO. 1 2013 SPECIAL TAX BONDS

RIO SCHOOL DISTRICT VENTURA COUNTY, CALIFORNIA

CHARACTERISTICS OF MORTGAGE LOANS AND ESTIMATED CURRENT EQUITY LEVELS FOR HOMEOWNERS

EMPIRE ECONOMICS, INC.

JUNE 17, 2013 (REVISED JULY 26, 2013: GRAMMATICAL REVISIONS)

This report was prepared by Empire Economics specifically for the Rio School District CFD No. 1 Special Tax Bond Series 2013. This report or any portions are not intended for other uses.

EXECUTIVE SUMMARY

The purpose of this report is to discuss the mortgage loan characteristics, estimated levels of current equity and special tax / mortgage loan duress of the current homeowners within the Rio School District Community Facilities District (CFD) No. 1.

Empire has estimated that approximately 1,193 homes have closed escrow to homeowners in CFD No. 1. Based upon a review of the data available for each of these. The number of homes that fulfilled the criteria for the analysis amounted to 1,039 homes, a strong sample of 87%. Accordingly, these 1,039 are hereafter referred to as the “homeowners”.

The homes in CFD No. 1 were marketed during August 2006 to April 2013, the distribution of the sale of the 1,039 homes on an annual basis has been as follows:

 During 2006 to 2008, sales increased as projects began to enter the marketplace, from 91 homes in 2006 to 195 homes in 2008.  From 2009 to 2011, sales decreased dramatically, from 153 in 2009 to a trough of 104 in 2011; additionally, an increasing proportion of these sales were resales by original homeowners, probably due to foreclosures and short sales.  Then, in 2012, sales rebounded, reaching a level of 158 home; of these, about 43% were resales.  For the January-April 2013 time period, sales amounted to 43 homes, a pace similar to 2012, again with a significant number of resales.

The sales prices for homes in CFD No. 1 exhibited the following pattern during August 2006 to April 2013 time period:

 Prices started at a level of approximately $340,361 in 2006, and then escalated to a peak level of $405,919 in 2007.  Then, prices declined substantially from 2008 to 2012, to about $260,720 in 2012, a decrease of some -36%.  From 2012 to January-April 2013, prices rose to $293,642, an increase of +13%.

The current equity cushion/deficit for each of the homeowners was calculated based upon a comparison of the current estimated values of the homes to the amount of their mortgage loans.

 For All of the homeowners, as a whole, they have positive equity of about +5% or +$13,386/avg.

 For 507 homeowners with Positive Equity, they have positive equity of about +33% or +$98,115/avg.

 For 532 homeowners with Negative Equity, they have negative equity of about -23% or - $67,362/avg.

RIO SCHOOL DISTRICT CFD NO.1, SERIES 2013 HOMEOWNERS' AMOUNTS OF NEGATIVE/POSITIVE EQUITY

100% 2,500 FOR ALL OF THE HOMEOWNERS, THIS GROUP, AS A WHOLE HAS 2,400 75% AS A WHOLE, THEY HAVE PROTECTIVE EQUITY OF +33% 2,300 PROTECTIVE EQUITY OF 5% 2,200 50% 2,100 33% 2,000 25% 1,900 5% 1,800 0% 1,700 1,600 -25% 1,500

Homeowner Equity Homeowner -23% 1,400 1,300 -50% 1,200 1,039 1,100 -75% 1,000 900 -100% 800 700 -125% 532 507 600 500 -150% 400 300 -175% 200 100

-200% 0 of Homeowners Number All Homeowners Homeowners: Negative Equity Homeowners: Positive Equity

For the 1,039 homeowners in the Mortgage Study, comparing their home values with the amount of their mortgage debt reveals that they currently have an equity cushion of amount 5%.  Aggregate Sales Prices ($342M) are higher than their mortgage loans ($290M) by +18%  Aggregate Current Market Values ($304M) are higher than their mortgage loans (290M) by +5%  Current Homeowner Equity is $14M or $13,386 per homeowner for a 5% equity cushion/avg.

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 ESTIMATED VALUE AND MORTGAGE DEBT (NOT AN APPRAISAL) $400

$342 $350 $304

$300 $290

$250

$200

VALUES IN MILLIONS MILLIONS IN VALUES $150

$100

$50 $14 $0 SALES PRICES CURRENT ESTIMATED MORTGAGE DEBT CURRENT EQUITY VALUE

Finally, of the 1,039 homeowners in CFD No. 1, the vast majority 1,024 are not under mortgage duress, while 15 other homeowners are in some stage of the “foreclosure process”: such homeowners are referred to as being under mortgage loan duress.  9 homeowners have a notice of default/pre-foreclosure  3 homeowners have homes scheduled for auction  3 homeowners have homes that are now bank owned

TABLE OF CONTENTS

Introduction………………..…………………………………………….…………………….……………1

Section I: Characteristics of the Current Homeowners in CFD No. 1.………………..….………………..2

Section II: Estimated Current Levels of Equity for the Homeowners in CFD No. 1………….…………...7

Section III: Characteristics of the Homeowners with Special Tax Delinquencies and Under Mortgage Duress in CFD No. 1………………….………..……………………………………...... 13

Appendix A: Mortgage Lenders …..……………………………..………………………………..……..16

iii

INTRODUCTION

The CFD No. 1 housing market recently experienced a major housing market bubble; accordingly, the various phases of this housing market cycle are now discussed.

 Price Appreciation: Starting in 2002, housing prices began to appreciate as mortgage rates declined, and then the rate of appreciation accelerated during 2004 to 2007 due to the pervasive use of non-conventional (creative) financing structures. During this time period, these financing structures and related financing factors, rather than employment growth, were the primary driving forces underlying the extraordinary rate of housing price appreciation for California, and also for Ventura County.

 Price Declines – Negative Equity: During 2007 to 2009, housing prices decreased significantly, pushing a substantial proportion of homeowners who purchased their homes during the price bubble into a position of negative equity, especially those that had high loan to value ratios. The enormous number of homeowners under duress caused an over-supply of homes which, in turn, severely depressed new development activity.

 Foundation for Recovery: During 2009 to 2012, housing prices were relatively stable, and this enabled the housing market to go through a consolidation phase:  Homeowners with negative equity went through the foreclosure and short sales process.  These homes, in turn, were purchased by new bona-fide homeowners that benefited from lower prices and very favorable mortgage rates; additionally, mortgage lending criteria were tighter as well.

Accordingly, this study will provide an overview of the price patterns and sales trends for the homes in CFD No. 1, to provide information on the mortgage loan characteristics, estimated levels of current equity and special tax / mortgage loan duress of the current homeowners

SECTION I

CHARACTERISTICS OF THE CURRENT HOMEOWNERS IN CFD NO. 1

This section performs an analysis of characteristics of the current homeowners in CFD No. 1 using their sales prices as well as their mortgage loan amounts, along with other factors; the current homeowners include those that purchased from builders as well as those that purchased resale homes.

Selection of Homes for the Mortgage Study: Homes with Sufficient Mortgage Data

With regard to selecting the specific homes to be included in the mortgage analysis, Empire Economics’ (Empire) primary criterion was whether there was sufficient information to calculate the Loan to Value Ratio (LTV), which requires the following information:

 Sales price of the home.  Amount of the mortgage loan(s), first and possibly a second as well.

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 ESCROW CLOSINGS AND HOMES WITH SUFFICIENT MORTGAGE DATA 1,400

1,193 1,200 1,039 1,000

800

600 Number of Homes

400

200

0 Number of Escrow Closings Sufficient Price/Mortgage Data

The composition of these 1,039 homeowners with regards to various profiles, such as original purchasers vs. resales, owner occupied vs. investors and delinquent vs. non-delinquent, are now discussed.

 Of the 1,039 current homeowners, 871 (84%) purchased from the builders and the remaining 168 (16%) are resales from prior homeowners who originally purchased from the builders.

 Of the 1,039 homeowners, 924 (89%) appear to be owner occupied while the other 115 (11%) appear to be owned by investors. The “conservative” filter for identifying owner occupants vs. owner investors is based upon whether the property tax bill is mailed to the zip code as the home or to another place in a different zip code area.

 As of April 2013, there were 1,019 homeowners that were not delinquent (98%) and 20 homeowners, (2%) that were delinquent with regards to the payment of their second installment for the 2012-2013 FY in a timely manner. (Note: Updated information on delinquencies is provided in the Official Statement.)

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 CHARACTERISTICS OF THE HOMEOWNERS

1,400 TYPES OF OWNERS: OWNER OCCUPIED SPECIAL TAX ORIGINAL OR RESALE OR INVESTOR PAYMENT STATUS 1,200 1,019 1,000 924 871

800

600 Number ofHomes

400

168 200 115 20 0 Original Resales Owned - Owned- Non- Delinquent; Purchasers Occupant Investor Delinquent 2012-2013 FY

Mortgage Loan to Value Ratios for the Homeowners

The Mortgage Loan to Value Ratios (LTV) for the homeowners were calculated using the following formula: First and Second Loans ------Sales Price (Note: The data compiled from the various sources report only the first and second loans on a parcel, and so additional loans are not included in this analysis; however, such additional loans are not common .)

Finally, the analysis herein assumes that the second loans are fully funded; however, in some cases, such as an equity line of credit, the second loans may not be fully funded. Information was not available on whether the second loans were equity lines of credit and, even if so, the extent to which they were funded. Accordingly, Empire made the conservative assumption, for purposes of this report, that all the second loans were fully funded. Of the 1,039 homeowners in CFD No. 1, there are 92, or about 9%, that have second loans; for these homeowners, their second mortgages amount to some $63,760, on the average.

For each of the LTV categories, the proportions and also the number of the homeowners in the various categories are as follows:

100%+ LTV: about 22% of the homeowners; there are 233 such homeowners. 90-99% LTV: about 44% of the homeowners; there are 455 such homeowners. 80-89% LTV: about 13% of the homeowners; there are 131 such homeowners. 1%-80% LTV: about 14% of the homeowners; there are 142 such homeowners. No Mortgage: about 8% of the homeowners; there are 78 such homeowners.

For all of the homeowners in CFD No. 1, as a whole, their LTV amounts to 85%, on the average. While the median LTV is 97%, and this means that 50% of the homeowners have a LTV that is above this amount while the remaining 50% have a LTV that is below this amount.

RIO SCHOOL DISTRCIT CFD NO. 1, SERIES 2013 SHARE OF HOMEOWNERS BY LTV CATEGORIES OVERALL AVERAGE = 85%; MEDIAN = 97% 50% 2,400

45% 44% 2,200 2,000 40% 1,800 35% 1,600 30% 1,400 25% 22% 1,200

20% 1,000

Share of Homeowners Share of 800 15% 13% 14% 600 455 10% 8% 400 233 5% 131 142 78 200 0% 0

. 100% 90% - 99% 80% - 89% 1%-79% . 0% ofNumber Homeowners

Share of Homeowners Number of Homeowners

4 Housing Prices and Mortgage Loan Amounts

The critical factors underlying the calculation of the Loan to Value Ratios (LTV), the sales prices of the homes and mortgage loan amounts, are now discussed.

Before proceeding, it is worthwhile to note that the homes in the various projects in CFD No. 1 were marketed (escrows closed to homeowners) during the August 2006 to April 2013 time period. The most recent sale reported was as of April 30, 2013; subsequent sales/resales may have occurred but data on them was not yet available due to reporting time lags.

 The sales prices for the homeowners amount to $329,134, on the average, and the sales prices vary from a low of $299,187, on the average, for the LTV group of 0% to a high of $378,557, on the average, for the LTV group of 80% to 89%.

 The mortgage loans for the homeowners amount to $278,856, on the average, and the mortgage loan amounts, excluding cash purchases, vary from a low $240,014, on the average, for the LTV group of Below 1%-79% to a high of $315,969, on the average, for the LTV group of 90% to 99%.

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 PURCHASE PRICES AND LOAN AMOUNTS BY LTV CATEGORIES $400,000

$350,000

$300,000

$250,000

$200,000

$150,000

$100,000

$50,000

$0 . 100% 90% - 99% 80% - 89% 1%-79% . 0% Overall Purchase Prices; Avg. $301,058 $327,035 $378,557 $352,781 $299,187 $329,134 Mortgage Loans; Avg. $304,426 $315,969 $312,610 $240,014 $0 $278,856

Times of Purchase for Homeowners

The homes in CFD No. 1 were marketed during August 2006 to April 2013, the distribution of the sale of the 1,039 homes on an annual basis has been as follows:

 During 2006 to 2008, sales increased as projects began to enter the marketplace, from 91 homes in 2006 to 195 homes in 2008.

 Then, in 2012, sales rebounded, reaching a level of 158 home; of these, about 43% were resales.

 For the January-April 2013 time period, sales amounted to 43 homes, a pace similar to 2012, again with a significant number of resales.

Accordingly, the sales of the 1,039 homes in CFD No. 1 on an annual basis by new sales and resales has been as follows:

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 YEARS IN WHICH *CURRENT* HOMEOWNERS PURCHASED THEIR HOMES 250

200

150

100 Number of Sales of Number

0 Jan.-April 2006 2007 2008 2009 2010 2011 2012 2013 Resales 0 0 4 1020396827 Original Sales 91 167 191 143 108 65 90 16

Original Sales Resales

6 SECTION II

ESTIMATED CURRENT LEVELS OF EQUITY FOR THE HOMEOWNERS IN CFD NO. 1

The following analysis represents ESTIMATES of the current Equity Levels for homeowners. By comparison, the specific levels of equity for each homeowner would require an appraisal of the market value for each home along with financial data on each of the homeowner’s current loan balances; such an undertaking would be costly and also require access to “private” financial data on mortgages.

The first step is to estimate the potential amount of the price decline for homeowners that purchased at various points (such as years) in time: this is measured as the difference between actual purchase price and the current market equilibrium price.  For those homes purchased during 2006 to 2010 their prices were higher than the current prices for January-April 2013, and so these homeowners may have negative levels of equity.  By comparison, for recent homes purchased during 2011-2012, their prices were below the current prices January-April 2013, and so these homeowners should have positive levels of equity. .

RIO SCHOOL DISTRICT CFD NO.1, SERIES 2013 RELATIONSHIP BETWEEN TIME OF SALE AND PRIOR PRICES RELATIVE TO THE CURRENT 2013 PRICE LEVEL

$100,000 LOW RISK TIME PERIOD $75,000 CURRENT PRICES HIGHER THAN PRICES DURING 2011‐2012 $50,000

$25,000

-$25,000

-$50,000

-$75,000

-$100,000

-$125,000

-$150,000 HIGHEST RISK TIME PERIOD: CURRENT PRICES BELOW PRICES DURING 2006‐2010 -$175,000 2006 2007 2008 2009 2010 2011 2012 2013

So, the highest risk time period, representing those homes with peak level prices, was during 2006 to 2010: such homeowners may now have significant negative equity levels if their original LTV were high. During this high-risk time period, about 71% of the current homeowners in CFD No. 1 purchased their homes.

Furthermore, it is worthwhile to mention that purchasers at the peak time period also generally utilized aggressive financing structures, such as interest-only loans as well as “teaser rate” loans which have negative amortization; such factors exacerbate their vulnerability to subsequent price declines. However, specific information on the loan structures for homeowners in CFD No. 1 was not available.

Recent Trends/Patterns for Housing Prices in CFD No. 1

The sales prices for the homes in CFD No. 1 are now analyzed by using their actual sales prices during the August 2006 to April 2013 time period.

 While the actual sales prices typically include buyer incentives as well as premiums for options/upgrades, which may vary significantly among the specific home sales, they are regarded as being generally reliable indicators of sales price trends.

 Additionally, the sales prices are adjusted for the variations in the sizes of the homes so that they represent price changes for the average sized home, which has 1,745 sq.ft. of living area; during the 2006-2013 time period, the average sizes of the homes sold per year ranged from 1,645/avg. in 2010 to 1,843/avg. in 2007.

The sales prices for homes in CFD No. 1 exhibited the following pattern during August 2006 to April 2013 time period:

 Prices started at a level of approximately $340,361 in 2006, and then escalated to a peak level of $405,919 in 2007.

 Then, prices declined substantially from 2008 to 2012, to about $260,720 in 2012, a decrease of some -36%.

 From 2012 to January-April 2013, prices rose to $293,642, an increase of +13%.

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 HOUSING PRICE PATTERNS $450,000

$405,919 $400,000

$355,403 $340,361 $350,000 $330,653 $319,924

$300,000 $293,642

$270,675 $260,720 $250,000

$200,000

Housing PricesHousing Sales $150,000

$100,000

$50,000

$0 2006 2007 2008 2009 2010 2011 2012 2013

8 Estimated Equity Levels for Homeowners in CFD No. 1

To gauge the levels of equity for the homeowners in CFD No. 1, their estimated current housing prices are compared to the original amounts of their mortgage loans.

Empire used a statistical regression analysis to estimate the relationship between the sales prices for the homes and their sizes of their living areas, based upon homes that have closed escrows recently.

 There were 43 homes that closed escrows during January 2013 to April 2013 within CFD No. 1 and their features are as follows:

o The prices of these homes amount to some $288,942, on the average.

o The sizes of living area amounted to some 1,717 sq.ft. on the average.

o So the value ratio, price/living area, amounts to $168, on the average.

 The original mortgage loans are assumed to be relatively stable, since most of the mortgage payments in the initial years go towards interest payments. Additionally, this is also regarded as being a conservative assumption, since the analysis uses a higher mortgage balance.

Empire performed a statistical analysis of these recent housing sales, and found that the primary determinant of the price of a home was its square footage of living area.

For a home with a specific amount of living area, its price can be predicted within +/- 12% by using the following metrics:

 A constant factor or starting amount of $86,649.

 A variable factor of $117.85 for each sq.ft. of living area.

As a cross-check, for all of the 43 homes that recently closed escrow, Empire compared their “average” current estimated value to the estimated average current value using the statistical metrics, (constant and variable factor) and found that they were close to each other, on the average. Although the overall averages were close, there were some variations on a home by home basis, but applying the constant/variable factors to a large sample provides an accurate representation, as compared to analyzing a particular home.

Accordingly, using the current home values and the original amounts of the mortgage loans, the estimated levels of homeowner equity by the various categories are as follows:

 Below -20%: 21% of the homeowners: 219 homeowners.

 -10% to -20%: 14% of the homeowners: 141 homeowners.

 0% to -10%: 17% of the homeowners; 172 homeowners

 0% to +10%: 12% of the homeowners: 127 homeowners.

 +10% to +20%: 10% of the homeowners: 102 homeowners.

 Above +20%: 27% of the homeowners: 278 homeowners.

So, of the homeowners in CFD No. 1, some 27% have protective equity of Above +20% or more and 21% have negative equity of Below -20%.

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 SHARES AND NUMBER OF HOMEOWNERS BY EQUITY CATEGORIES 40% 800 21% 27% 20% 17% 700 14% 12% 10% 600 0% Below -20% . -10% to - 20% . 0% to - 10% . 0% to +10% +10% to +20% Above +20% 500 Share ofHomeowners -20% 400 -40% 278 300

-60% 219 172 200 141 127 102 -80% 100

-100% 0 Number of Homeowners

Share Number

Homeowners’ Current Equity and Price Changes

The purpose of this section is to discuss the characteristics of the homeowners with regards to the various levels of positive/negative equity, and the amount of price increases/decreases that would be required for them to return to a position of neutral equity.

The current equity gap for such homeowners is calculated based upon a comparison of the current estimated home values to the amount of their mortgage loans.

 For All of the homeowners, as a whole, they have positive equity of about +5% or +$13,386/avg.

 For 507 homeowners with Positive Equity, they have positive equity of about +33% or +$98,115/avg.

 For 532 homeowners with Negative Equity, they have negative equity of about -23% or -$67,362/avg.

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 HOMEOWNERS' AMOUNTS OF NEGATIVE / POSITIVE EQUITY - AVERAGES $200,000 1,039 532 507

$150,000

$98,115 $100,000

$50,000 $13,386

-$50,000

-$67,362 -$100,000 All Homeowners Homeowners: Negative Homeowners: Positive Equity Equity

For these homeowners to return to a position of “neutral’ equity, where the market values are equal to the amounts of their mortgage debt, the estimated current home prices would need to increase/decrease by the following amounts:

 For all of the homeowners, 1,039, they currently have a protective equity cushion of +5%, and so IF prices were to decline by -5%, then they would be at a position of neutral equity.

 For the 507 homeowners with Positive Equity, they currently have a protective equity cushion of +33%, on the average, so IF prices declined by -33% then they would have neutral equity.

 For the 532 homeowners with Negative Equity, they currently have negative equity of -23%, on the average, so IF prices increased by +23%, then they would have neutral equity.

RIO SCHOOL DISTRICT CFD NO.1, SERIES 2013 HOMEOWNERS' AMOUNTS OF NEGATIVE/POSITIVE EQUITY

Homeowner Equity Homeowner -23% 1,400 1,300 -50% 1,200 1,039 1,100 -75% 1,000 900 -100% 800 700 -125% 532 507 600 500 -150% 400 300 -175% 200 100

-200% 0 Number of Homeowners All Homeowners Homeowners: Negative Equity Homeowners: Positive Equity

SECTION III

CHARACTERISTICS OF THE HOMEOWNERS WITH SPECIAL TAX DELINQUENCIES AND UNDER MORTGAGE DURESS IN CFD NO. 1

This section performs an analysis of the current homeowners that are delinquent with regards to the payment of their Special Taxes and also homeowners that are under mortgage duress, behind on their mortgage payments.

Special Tax Delinquent Homeowners: This group represents homeowners that are currently reported to be delinquent in the payment of their Special Taxes for the 2nd-installment for the 2012/2013 FY.

Dolinka Group. the Special Tax Administrator, provided Empire with information that it obtained from the Ventura County Treasurer/Tax Collector’s Office, and this showed that for the 2nd- installment payment that were delinquent for the 2012/2013 FY, there are currently 20 parcels/homeowners that are delinquent in such a manner.

Special Tax Non-Delinquent Homeowners: This group represents homeowners that were reported to have paid their 2nd-installment of the Special Tax payment for the 2012/2013 FY in a timely manner; there were 1,019 such parcels/homeowners.

For the most recent information on delinquency rates, please refer to the Official Statement.

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 INITIAL SPECIAL TAX DELINQUENCIES: 2ND-INSTALLMENT FOR 2012-2013 FY 1,200 1,019

1,000

800

600 Number ofNumber Homeowners 400

200

20 0 Non-Delinquent Delinquent

With regard to these 20 delinquent homeowners, the Special Tax delinquencies by the years in which the homes were purchased were as follows:

For homeowners that purchase their homes in 2007, there were 7 Special Tax delinquencies; these homeowners represented 4% of the homeowners that purchased homes in 2007.

For 2006, 2008 and 2011, there were 3 delinquent homeowners that purchased their homes in each of these years; these homeowners represented 2% to 3% of the homeowners that purchased homes in each of these years.

So, most of the current homeowners who are delinquent on the Special Tax payments purchased their homes during 2006 to 2008.

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 DELINQUENT HOMEOWNERS BY YEARS OF PURCHASE 8

7 7

3 3 3 3

2 Number ofHomeowners 2

1 1 1

0 0 2006 2007 2008 2009 2010 2011 2012 2013

Number Delinquent

Of the 1,039 homeowners in CFD No. 1, the vast majority 1,024 are not under mortgage duress, while 15 other homeowners are in some stage of the “foreclosure process”: such homeowners are referred to as being under mortgage loan duress.

 9 homeowners have a notice of default/pre-foreclosure

 3 homeowners have homes scheduled for auction

 3 homeowners have homes that are now bank owned

So, considering that there are a total of 1,039 homeowners in CFD No. 1, and that 15 are currently under mortgage duress, this amount to about 1.4% of all of the homeowners.

RIO SCHOOL DISTRICT CFD NO. 1, SERIES 2013 STATUS OF HOMEOWNERS UNDER MORTGAGE PAYMENT DURESS

1,200 1,024

1,000

800

600 Number ofHomes

400

200

9 33 0 NOT Under Under Duress Pre- Scheduled for Bank Owned Duress >>> Foreclosure Auction

APPENDIX A

Mortgage Lenders and Special Tax Delinquencies

Mortgage Lenders - Number of Homeowners - - Share of Homeowners -

(First Mortgages) All Special Tax Delinquent All Special Tax Delinquent

Standard Pac Mtg Inc 249 4 24.0% 20.0%

Shea Mtg 191 1 18.4% 5.0%

Ctx Mtg Co Llc 136 1 13.1% 5.0%

Premier America Fcu 75 6 7.2% 30.0%

Other Lenders 309 6 29.7% 30.0%

Lender Not Reported 79 2 7.6% 10.0%

TOTALS 1,039 20 100.0% 100.0%

16 APPENDIX F

SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT

The following is a summary of selected provisions of the Fiscal Agent Agreement, as supplemented by the First Supplemental Fiscal Agent Agreement, which in some instances, may also be described elsewhere in this Official Statement. This summary does not purport to be comprehensive and reference should be made to the Fiscal Agent Agreement for a full and complete statement of its provisions. All capitalized terms not defined in this Official Statement have the meanings set forth in the Fiscal Agent Agreement.

General

The Fiscal Agent Agreement sets forth the terms, the application of the proceeds of the sale of the Bonds, the nature and extent of the security for the Bonds, and the various rights of the Bondholders, and the rights, duties, and immunities of the Fiscal Agent.

Definitions

Annual Debt Service means for each Bond Year the aggregate amount of principal and interest becoming due and payable on all Bonds.

Bond Reserve Requirement means, as of any date of calculation, the least of (i) Maximum Annual Debt Service as of such date, (ii) 125% of average Annual Debt Service on all Bonds Outstanding as of such date and (iii) 10% of the original principal amount of the Bonds.

Bonds means the Rio Elementary School District Community Facilities District No. 1 Special Tax Bonds authorized by, and at any time outstanding pursuant to, the Fiscal Agent Agreement and any Supplemental Fiscal Agent Agreement.

Bond Year means the period ending on September 1 of each year with the first Bond Year ending on September 1, 2014, and the last Bond Year ending on the date on which none of the Bonds remain Outstanding.

Board means the Board of Trustees of the School District.

CFD means the Rio Elementary School District Community Facilities District No. 1, a community facilities district duly established within the geographical jurisdiction of the School District pursuant to the Law.

Corporate Trust Office or corporate trust office means the corporate trust office of the Fiscal Agent at 550 South Hope Street, Suite 2650, Los Angeles, California 90071, Attention: Corporate Trust Services- Rio Elementary School District, or such other or additional offices as may be designated by the Fiscal Agent.

Costs of Issuance means all items of expense directly or indirectly payable by or reimbursable to the School District and related to the original formation of the CFD and the authorization, execution, sale, and delivery of the Bonds, including but not limited to advertising

F-1 and printing costs, costs of preparation and reproduction of documents, costs of printing and distribution of the preliminary and final official statements, filing and recording fees, initial fees and charges of the Fiscal Agent, legal fees and charges, fees and disbursements of consultants and professionals, financial advisor fees and expenses, rating agency fees, if any, credit enhancement, if any, fees and charges for preparation, execution, transportation and safekeeping of Bonds, and any other cost, charge, or fee in connection with the original delivery of Bonds.

Defeasance Securities means the following:

(A) United States Treasury Certificates, Notes, and Bonds (including State and Local Government Series -- “SLGS”).

(B) Direct obligations of the Treasury that have been stripped by the Treasury itself, CATS, TGRS, and similar securities.

(C) The interest component of Resolution Funding Corp. (REFCORP) strips that have been stripped by request to the Federal Reserve Bank of New York in book-entry form.

(D) Pre-refunded municipal bonds rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s. If, however, the pre-refunded bonds are rated by Standard & Poor’s but are not rated by Moody’s, then the pre-refunded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations, or Aaa-rated pre-refunded municipal bonds.

(E) Obligations issued or guaranteed by the following agencies that are backed by the full faith and credit of the U.S.:

(1) U.S. Export-Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership

(2) Farmers Home Administration (FmHA) Certificates of beneficial ownership

(3) Federal Financing Bank

(4) General Services Administration Participation certificates

(5) U.S. Maritime Administration Guaranteed Title XI financing

(6) U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds

Facilities mean those public facilities as described in Resolution No. 0405-25 establishing the CFD and adopted by the Board on May 3, 2005

F-2 First Supplemental Fiscal Agent Agreement means the First Supplemental Fiscal Agent Agreement dated November 1, 2013 by and between the Fiscal Agent and the School District for and on behalf of the CFD.

Fiscal Agent Agreement means the Fiscal Agent Agreement dated November 1, 2005, by and between the Fiscal Agent and the School District for and on behalf of the CFD, as originally executed, and the First Supplemental Fiscal Agent Agreement.

Fiscal Year means the period beginning on July 1 of each year and ending on the next succeeding June 30 or any other twelve-month period hereafter selected and designated as the official fiscal year period of the School District.

Mandatory Sinking Account Payment means, with respect to Bonds of any Series and maturity, the amount required by the Fiscal Agent Agreement or a Supplemental Fiscal Agent Agreement hereto to be deposited by the School District in a sinking account for the payment of Term Bonds of such Series and maturity.

Maximum Annual Debt Service shall mean the greatest amount of principal and interest becoming due and payable on all Bonds in any Bond Year including the Bond Year in which the calculation is made or any subsequent Bond Year.

Moody’s means Moody’s Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the School District and approved by the Fiscal Agent.

Owner or Bondholder or Bondowner, whenever used herein with respect to a Bond, means the Person in whose name such Bond is registered.

Permitted Investments means:

(i) Federal Securities; and

(ii) Bonds, debentures, notes or other evidence issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself):

(a) Federal Financing Bank

(b) Federal Housing Administration Debentures

(c) Government National Mortgage Association (GNMA) GNMA – guaranteed mortgage-backed bonds GNMA – guaranteed pass-through obligations

(d) U.S. Maritime Administration

F-3 Guaranteed Title XI financing

(e) U.S. Department of Housing and Urban Development Project Notes Local Authority Bonds New Communities Debentures – United States government guaranteed debentures U.S. Public Housing Notes and Bonds – United States government guaranteed public housing notes and bonds;

(iii) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit United States government agencies (stripped securities are only permitted if they have been stripped by the agency itself):

(a) Federal Home Loan Bank System Senior debt obligations

(b) Federal Home Loan Mortgage Corporation Participation Certificates Senior debt obligations

(d) Student Loan Marketing Association Senior debt obligations

(e) Resolution Funding Corporation (REFCORP) obligations

(f) Farm Credit System Consolidated systemwide bonds and notes;

(iv) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by Standard & Poor’s of “AAAm-G,” “AAA-m” or “AA-m” and, if rated by Moody’s, rated “Aaa,” “Aa1” or “Aa2” by Moody’s, including funds for which the Fiscal Agent or any of its affiliates provides investment management services;

(v) Certificates of deposit secured at all times by collateral described in clauses (i) and/or (ii) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the Fiscal Agent on behalf of the Owners of the Bonds must have a perfected first security interest in the collateral;

(vi) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC, including BIF and SAIF;

F-4 (vii) Investment agreements with domestic or foreign banks or corporations the long- term debt or claims paying ability of which or, in the case of a guaranteed corporation, the long-term debt, or, in the case of a monoline financial guaranty insurance company, the financial strength, of the guarantor is rated in at least the double A category by Standard & Poor’s and Moody’s; provided that, by the terms of the investment agreement:

(a) interest payments are to be made to the Fiscal Agent at times and in amounts as necessary to pay debt service on the Bonds;

(b) the invested funds are available for withdrawal without penalty or premium at any time upon not more than seven (7) days’ prior notice;

(c) the investment agreement shall provide that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof;

(d) the School District and the Fiscal Agent receive the opinion of domestic counsel (which opinion shall be addressed to the School District) that such investment agreement is legal, valid, binding upon and enforceable against the provider in accordance with its terms and of foreign counsel (if applicable) in form and substance acceptable, and addressed to, the School District;

(e) the investment agreement shall provide that if during its term

(1) the provider’s rating by either Standard & Poor’s or Moody’s falls below “AA-“ or “Aa3”, respectively, the provider shall, at its option, within ten (10) days of receipt of publication of such downgrade, either (i) collateralize the investment agreement by delivering or transferring in accordance with the applicable state and federal laws (other than by means of entries on the provider’s books) to the Fiscal Agent or third party acting solely as agent therefor (the “Holder of the Collateral”) collateral free and clear of any third-party liens or claims, the market value of which collateral is maintained and levels and upon such conditions as would be acceptable to Standard & Poor’s and Moody’s to maintain an “A” rating in an “A” rated structured financing (with a market value approach); or (ii) assign the investment agreement and all of its obligations thereunder to a financial institution mutually acceptable to the provider, the School District and the Fiscal Agent which is rated either in the first or second highest category by Standard & Poor’s and Moody’s; and

(2) the provider’s rating by either Standard & Poor’s or Moody’s is withdrawn or suspended or falls below “A-” or “A3”, respectively, the provider must, at the direction of the School District or the Fiscal Agent, within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the invested funds, in either case with no penalty or premium to the Fiscal Agent; and

(f) the investment agreement shall provide and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted

F-5 collateral and all proceeds thereof (in the case of bearer securities, this shall mean the Holder of the Collateral is in possession of such collateral); and

(g) the investment agreement shall provide that if during its term

(1) the provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the School District or the Fiscal Agent, be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the School District or the Fiscal Agent, as appropriate; and

(2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc., the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the School District or the Fiscal Agent, as appropriate;

(viii) Commercial paper rated, at the time of purchase, “Prime – 1” by Moody’s or “A- 1” or better by Standard & Poor’s;

(ix) Bonds or notes issued by any state or municipality which are rated by Moody’s or Standard & Poor’s in one of the two highest rating categories assigned by them;

(x) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of “Prime – 1” or “A3” or better by Moody’s and “A-1” or better by Standard & Poor’s;

(xi) Repurchase agreements which satisfy the following criteria:

(a) Repurchase agreements must be between the Fiscal Agent and a dealer bank or securities firm which is:

(1) A primary dealer on the Federal Reserve reporting dealer list which is rated “A” or better by Standard & Poor’s or Moody’s, or

(2) A bank rated “A” or above by Standard & Poor’s or Moody’s;

(b) The written agreement must include the following:

(1) Securities which are acceptable for transfer are:

(A) direct obligations of the United States government, or

(B) obligations of federal agencies backed by the full faith and credit of the United State of America (or the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC)),

(2) The collateral must be delivered to the Fiscal Agent or a third party acting as custodian for the Fiscal Agent before or simultaneous with payment (perfection by possession of certificated securities),

F-6 (3) (A) The securities must be valued weekly, marked-to-market at current market price plus accrued interest, and

(B) The value of the collateral must be at least equal to one hundred four percent (104%) of the amount of money transferred by the Fiscal Agent to the dealer, bank or securities firm under the agreement plus accrued interest. If the value of the securities held as collateral is reduced below one hundred four percent (104%) of the value of the amount of money transferred by the Fiscal Agent, then additional acceptable securities and/or cash must be provided as collateral to bring the value of the collateral to one hundred four percent (104%); provided, however, that if the securities used as collateral are those of FNMA or FHLMC, then the value of the collateral must be equal to one hundred five percent (105%) of the amount of money transferred by the Fiscal Agent; and

(c) A legal opinion must be delivered to the School District and the Fiscal Agent that the repurchase agreement meets the requirements of California law with respect of the investment of public funds; and

(xii) The Local Agency Investment Fund in the State Treasury of the State of California as permitted by the State Treasurer pursuant to Section 16429.1 of the California Government Code.

Person means an individual, corporation, limited liability company, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.

Rate and Method of Apportionment means the rate, method of apportionment, and manner of collection of the Special Taxes included as Exhibit B to Resolution No. 0405-25 adopted by the Board on May 3, 2005, establishing the CFD, as the same may be amended from time to time in accordance with the Law.

Redemption Price means, with respect to any Bond (or portion thereof) the principal amount of such Bond (or portion) plus the applicable premium, if any, payable upon redemption thereof pursuant to the provisions of such Bond and the Fiscal Agent Agreement.

School District means the Rio Elementary School District, a school district duly organized and existing under the Constitution and laws of the State, and which is acting solely for and on behalf of the CFD.

Serial Bonds means the Bonds, maturing in specified years, for which no Mandatory Sinking Account Payments are provided.

Series, whenever used herein with respect to Bonds, means all of the Bonds designated as being of the same series, authenticated and delivered in a simultaneous transaction, regardless of variations in maturity, interest rate, redemption, and other provisions, and any Bonds thereafter authenticated and delivered upon transfer or exchange or in lieu of or in substitution for (but not to refund) such Bonds as herein provided.

F-7 Standard & Poor’s means Standard & Poor’s, a division of The McGraw Hill Companies, Inc., and its successors and assigns, except that if such rating agency shall no longer perform the functions of a securities rating agency, then the term “Standard & Poor’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the School District.

Supplemental Fiscal Agent Agreement means any fiscal agent agreement hereafter duly executed and delivered, supplementing, modifying, or amending the Fiscal Agent Agreement, but only if and to the extent that such Supplemental Fiscal Agent Agreement is specifically authorized hereunder.

Taxable Property means all property described by the definition of the term “Taxable Property” in the Rate and Method of Apportionment.

Term Bonds means the Bonds payable at or before their specified maturity date or dates from Mandatory Sinking Account Payments established for that purpose and calculated to retire such Bonds on or before their specified maturity date or dates.

Creation of Funds and Accounts

The Fiscal Agent Agreement provides for the establishment of the following funds and accounts, all of which, except the Administrative Expense Fund and the Surplus Fund, are to be held and administered by the Fiscal Agent:

Acquisition Fund. The costs of acquiring and constructing the Facilities will be paid for by the funds deposited in the Acquisition Fund. Upon acquisition of all the Facilities, the Fiscal Agent will transfer any amounts remaining in the Acquisition Fund to the Special Tax Fund.

Costs of Issuance Fund. The Costs of Issuance of the Bonds will be paid for by funds deposited in the Costs of Issuance Fund. At the end of six months from the date of issuance of the 2013 Bonds (or earlier if determined by the School District) the School District shall transfer any remaining amounts in such fund to the Acquisition Fund.

Furniture, Fixtures and Equipment Fund. The costs of acquiring the furniture, fixtures and equipment will be paid for by the funds deposited in the Furniture, Fixtures, and Equipment Fund. Upon acquisition of all the furniture, fixtures and equipment, the Fiscal Agent will transfer any amounts remaining in the Furniture, Fixtures and Equipment Fund to the Acquisition Fund.

School District Support Facility Fund. The costs of acquiring certain authorized Facilities will be paid for by the funds deposited in the School District Support Facility Fund. Upon acquisition of all authorized Facilities, the Fiscal Agent will transfer any amounts remaining in the School District Support Facility Fund to the Acquisition Fund.

Special Tax Fund. The Net Special Tax Revenues are transferred by the School District to the Fiscal Agent for deposit in the Special Tax Fund. All money in the Special Tax

F-8 Fund shall be allocated to the Interest Fund and the Principal Fund for the payment of the Bonds, to the Bond Reserve Fund to replenish that fund to the Bond Reserve Requirement, and then to the Surplus Fund.

Interest Fund. The money in the Interest Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of paying interest on the Bonds as it shall become due and payable.

Principal Fund. The money in the Principal Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of paying principal on the Bonds as it shall become due and payable.

Special Tax Securities Fund. All amounts in the Special Tax Securities Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making up certain shortfalls in the Special Tax Fund.

Bond Reserve Fund. All amounts in the Bond Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making up deficiencies in the Interest Fund and the Principal Fund.

Prepayment Fund. All moneys representing prepaid Special Taxes that are deposited by the School District with the Fiscal Agent shall be deposited in the Prepayment Fund. Such funds shall be used solely for the purpose of redeeming Bonds in the manner specified in the Fiscal Agent Agreement.

Surplus Fund. All money in the Surplus Fund shall be used by the School District solely for the payment of costs of the Facilities for the benefit of the CFD.

Administrative Expense Fund. All money in the Administrative Expense Fund shall be used by the School District solely for the payment of costs of administering the CFD.

Investment of Funds.

All moneys in any of the funds and accounts held by the Fiscal Agent and established pursuant to the Fiscal Agent Agreement shall be invested solely as directed by the School District, solely in Permitted Investments. Moneys in the Bond Reserve Fund shall be invested in Permitted Investments maturing or available on demand within ten years of the date of such investment. Moneys in the remaining funds and accounts shall be invested in Permitted Investments maturing or available on demand not later than the date on which it is estimated that such moneys will be required by the Fiscal Agent. Interest earnings and profits resulting from investment of moneys in: (1) the Rebate Fund shall be deposited in the Rebate Fund, except as otherwise directed by the School District; (2) the Costs of Issuance Fund, the Acquisition Fund, the Capitalized Interest Account shall be deposited when received into the Acquisition Fund, and (3) all other funds and accounts shall be deposited therein.

F-9 Other Obligations Secured by Net Special Tax Revenues

The School District may not, so long as any of the Bonds are Outstanding, issue any obligations or securities, howsoever denominated, payable in whole or in part from Net Special Tax Revenues except the following: Series 2005 Bonds, Series 2013 Bonds and Additional Bonds. The Series 2005 Bonds, Series 2013 Bonds and Bonds of any Series authorized in compliance with the provisions of the Fiscal Agent Agreement for the issuance of Additional Series of Bonds. Principal and Interest Payments.

The principal or Redemption Price of the Series 2013 Bonds shall be payable to the Owner thereof upon surrender thereof in lawful money of the United States of America at the Corporate Trust Office. Interest on the Series 2013 Bonds shall be payable by check mailed by first class mail on each Interest Payment Date or, upon the written request of any Owner of $1,000,000 or more in aggregate principal amount of Bonds who has provided the Fiscal Agent with wire transfer instructions on or before the applicable Regular Record Date, by wire transfer on each Interest Payment Date to the Owner thereof as of the close of business on the Regular Record Date. The Regular Record Date for the Series 2013 Bonds shall be the fifteenth (15th) day of the calendar month immediately preceding the relevant Interest Payment Date.

Persons Deemed Owners

The School District and the Fiscal Agent will treat the Person in whose name any Bond is registered, as shown on the registration books kept by the Fiscal Agent, as the person exclusively entitled to payment of principal, premium, if any, and interest on the Bond and to the exercise of all other rights and powers of the owner, except that all interest payments will be made to the Owner registered as of the Record Date.

Events of Default and Remedies

Events of Default. The following events shall be Events of Default:

Principal Payment Default. Default in the due and punctual payment of the principal or Redemption Price of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise, or default in the redemption from any Sinking Account of any Bonds in the amounts and at the times provided therefor;

Interest Payment Default. Default in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due and payable; and

Covenant Default. Failure by the School District to observe or perform any other covenant, condition, agreement, or provision in the Fiscal Agent Agreement on its part to be observed or performed, for a period of 60 days after written notice, specifying such failure and requesting that it be remedied, has been given to the School District; except that, if such failure can be remedied but not within such 60-day period and if the School District has taken all action reasonably possible to remedy such failure within such

F-10 60-day period, such failure shall not become an Event of Default for so long as the School District shall diligently proceed to remedy same.

Remedies. Upon the occurrence and continuance of an Event of Default, any Owner shall have the right for the equal benefit and protection of all Owners similarly situated:

Mandamus. By mandamus or other action, suit, or proceeding at law or in equity to enforce the Owners’ rights against the Board or the School District or any of the officers or employees of the School District, and to compel the Board or the School District or any such officers or employees to perform and carry out their duties under the Law and the agreements and covenants with the Owners contained in the Fiscal Agent Agreement;

Injunction. By suit in equity to enjoin any acts or things that are unlawful or violate the rights of the Owners; or

Accounting. By suit in equity upon the nonpayment of the Bonds to require the Board or the School District or its officers and employees to account as the trustee of an express trust.

Modification or Amendment of the Fiscal Agent Agreement

Supplemental Fiscal Agent Agreements without Consent of Owners. The Fiscal Agent Agreement and the rights and obligations of the School District, of the Fiscal Agent, and of the Owners may be modified or amended from time to time and at any time by a Supplemental Fiscal Agent Agreement, which the School District may adopt without the consent of any Owners but only to the extent permitted by law and only for any one or more of the following purposes:

Additional Security. to add to the covenants and agreements of the School District contained in the Fiscal Agent Agreement other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power reserved to or conferred upon the School District in the Fiscal Agent Agreement;

Curative Provisions. to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision, contained in the Fiscal Agent Agreement, or in regard to matters or questions arising under the Fiscal Agent Agreement, as the School District may deem necessary or desirable, and that shall not materially and adversely affect the interests of the Owners of the Bonds;

Trust Indenture Act Qualification. to modify, amend, or supplement the Fiscal Agent Agreement in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute, and to add such other terms, conditions, and provisions as may be permitted by said act or similar federal statute, and that shall not materially and adversely affect the interests of the Owners of the Bonds;

F-11 Additional Series. to create any Series of Bonds (other than the Series 2005 Bonds and the Series 2013 Bonds) and make such other provisions in accordance with the provisions of the Fiscal Agent Agreement for the issuance of Additional Series of Bonds;

Book-Entry System. to provide for the issuance of Bonds in book-entry form, provided that no such provision shall materially and adversely affect the interests of the Owners of the Bonds;

Notice of Redemption. to modify or add to the procedures providing for the notice in the event of redemption of the Bonds in order to comply with regulations promulgated by the United States Securities and Exchange Commission;

Accommodation of Credit Enhancement. to make modifications or adjustments necessary, appropriate, or desirable to accommodate credit enhancements;

Preservation of Tax Exemption. to make such provisions as are necessary or appropriate to ensure the exclusion of interest on the Bonds from gross income for purposes of federal income taxation; and

No Material Effect. for any other purpose that does not materially and adversely affect the interests of the Owners of the Bonds.

Supplemental Fiscal Agent Agreements with Consent of Owners or Credit Providers. The Fiscal Agent Agreement and the rights and obligations of the School District, the Owners of the Bonds, and the Fiscal Agent may be modified or amended from time to time and at any time by a Supplemental Fiscal Agent Agreement, which the School District and the Fiscal Agent may enter into with the written consent of the Owners of a majority in aggregate principal amount of the Bonds; provided that, if such modification or amendment will, by its terms, not take effect so long as any Bonds of any particular maturity remain Outstanding, the consent of the Owners of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Bonds Outstanding.

The Fiscal Agent Agreement and the rights and obligations of the School District and of the Owners of the Bonds and of the Fiscal Agent may also be modified or amended at any time by a Supplemental Fiscal Agent Agreement entered into by the School District and the Fiscal Agent, which shall become binding when the written consents of each provider of a letter of credit or a policy of bond insurance for the Bonds shall have been filed with the Fiscal Agent, provided that at such time the payment of all the principal of and interest on all Outstanding Bonds shall be insured by a policy or policies of municipal bond insurance or payable under a letter of credit the provider of which shall be a financial institution or association having unsecured debt obligations rated, or insuring or securing other debt obligations rated on the basis of such insurance or letters of credit, in one of the two highest Rating Categories of Moody’s and Standard & Poor’s.

No such modification or amendment shall (1) extend the fixed maturity of any Bond, or reduce the amount of principal thereof, or extend the time of payment or mandatory redemption of any Bond, or reduce the rate of interest thereon, or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the Owners of the Bonds so affected, or (2) reduce the aforesaid percentage of Bonds the consent of

F-12 the Owners of which is required to effect any such modification or amendment, or permit the creation of any lien on the Net Special Tax Revenues, any prepaid Special Taxes, and other assets pledged under the Fiscal Agent Agreement superior to or on a parity with the lien created by the Fiscal Agent Agreement, or deprive the Owners of the Bonds of the lien created by the Fiscal Agent Agreement on such Net Special Tax Revenues, any prepaid Special Taxes, and assets (in each case, except as expressly provided in the Fiscal Agent Agreement), without the consent of the Owners of all of the Bonds then Outstanding.

Defeasance

Discharge of Fiscal Agent Agreement. Bonds of any Series may be paid by the School District in any of the following ways:

Payment When Due: by paying or causing to be paid the principal of and interest on such Bonds, as and when the same become due and payable;

Deposit of Money or Securities: by depositing with the Fiscal Agent, an escrow agent or other fiduciary, in trust, at or before maturity, money or Defeasance Securities in the necessary amount to pay or redeem such Bonds; or

Delivery of Bonds for Cancellation: by delivering such Bonds to the Fiscal Agent for cancellation.

If the School District shall pay all Bonds Outstanding and also pay or cause to be paid all other sums payable under the Fiscal Agent Agreement by the School District, including, without limitation, any compensation due and owing to the Fiscal Agent, then and in that case, at the election of the School District, evidenced by a certificate of the School District filed with the Fiscal Agent signifying the intention of the School District to discharge all such indebtedness and the Fiscal Agent Agreement, and notwithstanding that any Bonds shall not have been surrendered for payment, the Fiscal Agent Agreement, the pledge of Net Special Tax Revenues, any prepaid Special Taxes, and other assets made under the Fiscal Agent Agreement, all covenants and agreements and other obligations of the School District under the Fiscal Agent Agreement, and the rights and interests created (except as to any surviving rights of transfer or exchange of Bonds and rights to payment from moneys deposited with the Fiscal Agent for the discharge of liability on Bonds, as described below) shall cease, terminate, become void, and be completely discharged and satisfied.

Discharge of Liability on Bonds. Upon the deposit with the Fiscal Agent, escrow agent or other fiduciary, in trust, at or before maturity, of money or Defeasance Securities in the necessary amount to pay or redeem any Outstanding Bond (whether upon or prior to its maturity or the redemption date of such Bond), provided that, if such Bond is to be redeemed prior to maturity, notice of such redemption shall have been given as required under the Fiscal Agent Agreement or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then all liability of the School District in respect of such Bond shall cease, terminate, and be completely discharged, except that thereafter (i) the Owner shall be entitled to payment of the principal of and premium, if any, and interest on such Bond by the School District and the School District shall remain liable for such payment, but only out of such money or securities

F-13 deposited with the Fiscal Agent as aforesaid for their payment and (ii) the Owner shall retain its rights of transfer or exchange of Bonds.

F-14

APPENDIX G

DTC AND THE BOOK-ENTRY ONLY SYSTEM

The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the Series 2013 Bonds, payment of principal, interest and other payments on the Series 2013 Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Series 2013 Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.

Neither the issuer of the Series 2013 Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the Series 2013 Bonds (the “Agent”) take any responsibility for the information contained in this Appendix.

No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Series 2013 Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Series 2013 Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Series 2013 Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning 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 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and

G-1

dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation 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 through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and 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 ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.

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

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

G-2

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer 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 Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from Issuer or 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 responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption 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 Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to the Paying Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to the Paying Agent’s DTC account.

10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

11. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.

12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.

G-3

[THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX H

FORM OF ISSUER CONTINUING DISCLOSURE CERTIFICATE

$28,000,000 RIO ELEMENTARY SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 1 SPECIAL TAX BONDS, SERIES 2013

This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the Rio Elementary School District (the “District”) in connection with the issuance of the bonds captioned above (the “Series 2013 Bonds”). The 2013 Bonds are being issued pursuant to a Fiscal Agent Agreement dated as of November 1, 2005, as supplemented by a First Supplemental Fiscal Agent Agreement dated as of November 1, 2013 (collectively, the “Fiscal Agent Agreement”), between the District, on behalf of the Rio Elementary School District Community Facilities District No. 1 (the “Community Facilities District”), and Zions First National Bank, as fiscal agent (the “Fiscal Agent”). The District hereby covenants and agrees as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the District for the benefit of the holders and beneficial owners of the 2013 Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).

Section 2. Definitions. In addition to the definitions set forth above and in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

“Annual Report” means any Annual Report provided by the District pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.

“Annual Report Date” means the date that is seven months after the end of the District's Fiscal Year (currently January 31 based on the District’s Fiscal Year end of June 30).

“Community Facilities District” means the Rio Elementary School District Community Facilities District No. 1.

“Dissemination Agent” means Dolinka Group, LLC, or any successor Dissemination Agent designated in writing by the District and which has filed with the District a written acceptance of such designation.

“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.

“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule.

“Official Statement” means the final official statement dated October 24, 2013, executed by the District in connection with the issuance of the 2013 Bonds.

H-1

“Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated, the original underwriter of the 2013 Bonds required to comply with the Rule in connection with offering of the 2013 Bonds.

“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time.

Section 3. Provision of Annual Reports.

(a) The District shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing January 31, 2014, with the report for the 2012-13 Fiscal Year, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the District shall provide the Annual Report to the Dissemination Agent (if other than the District). If by the Annual Report Date the Dissemination Agent (if other than the District) has not received a copy of the Annual Report, the Dissemination Agent shall contact the District to determine if the District is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the District may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the District's Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c).

(b) If the District does not provide, or cause the Dissemination Agent to provide, an Annual Report by the Annual Report Date as required in subsection (a) above, the Dissemination Agent shall provide to the MSRB, in an electronic format as prescribed by the MSRB, a notice in substantially the form attached as Exhibit A.

(i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and

(ii) if the Dissemination Agent is other than the District, file a report with the District and the Participating Underwriter certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4. Content of Annual Reports. The District's Annual Report shall contain or incorporate by reference the following documents and information:

(a) The District's audited financial statements for the most recently completed Fiscal Year, prepared in accordance with Generally Accepted Accounting Principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board, together with the following statement:

THE DISTRICT'S ANNUAL FINANCIAL STATEMENT IS PROVIDED SOLELY TO COMPLY WITH THE SECURITIES EXCHANGE COMMISSION STAFF’S INTERPRETATION OF RULE 15c2-12. NO FUNDS OR ASSETS OF THE DISTRICT,

H-2

OTHER THAN SPECIAL TAX REVENUES, ARE REQUIRED TO BE USED TO PAY DEBT SERVICE ON THE 2013 BONDS, AND THE DISTRICT IS NOT OBLIGATED TO ADVANCE AVAILABLE FUNDS TO COVER ANY DELINQUENCIES. INVESTORS SHOULD NOT RELY ON THE FINANCIAL CONDITION OF THE DISTRICT IN EVALUATING WHETHER TO BUY, HOLD OR SELL THE 2013 BONDS.

(b) To the extent not included in the audited financial statements, the following information:

(i) The principal amount of the Series 2013 Bonds and any other outstanding bonds issued under the Fiscal Agent Agreement (including refunding bonds).

(ii) The balances in the funds and accounts established under the Fiscal Agent Agreement.

(iii) The current debt service schedule for the Series 2013 Bonds.

(iv) A statement as to whether or not the amount on deposit in the Bond Reserve Fund is equal to the Bond Reserve Requirement and, if not, the amount of the delinquency or surplus, as applicable.

(v) If any moneys are still on deposit in the Acquisition Fund, the estimated date of completion of the improvements being financed with the Series 2013 Bond proceeds.

(vi) Updates to the tables in the sections of the Official Statement entitled “SECURITY FOR THE BONDS – Rate and Method – Assigned Annual Special Taxes” and “SECURITY FOR THE BONDS – Rate and Method – Backup Annual Special Taxes.”

(vii) The amount of Special Taxes levied on Residential Property, Non- Residential Property and Undeveloped Property, respectively, during the period covered by the Annual Report, the amount of such Special Taxes actually collected by the District with respect to Developed Property and Undeveloped Property, respectively, and the delinquency rate of such Special Taxes.

(viii) An update to the table in the Official Statement entitled “Special Tax Collections and Delinquencies” showing the total dollar amount of delinquencies and number of delinquent parcels, if any, in the Community Facilities District as of June 30 of the prior calendar year.

(ix) If the total delinquencies within the Community Facilities District as of June 30 in the prior calendar year exceed 5% of the Special Tax for the previous Fiscal Year, delinquency information for each parcel responsible for more than $5,000 in the payment of Special Tax, amounts of delinquencies, length of delinquency and status of any foreclosure or enforcement actions regarding each such parcel.

(x) An update to the table in the Official Statement entitled “Appraised Values and Value-to-Debt Ratio” but substituting assessed values (per the Ventura County Assessor’s records) for appraised values of all parcels currently subject to the Special Tax within the Community Facilities District.

H-3

(xi) The amount of prepayments of the Special Tax for the prior Fiscal Year.

(xii) An update to the table in the Official Statement entitled “Property Ownership by Share of Special Tax Levy” reflecting information for the then-current Fiscal Year, and revised to include a column showing the then-current maximum special tax amounts applicable to each property ownership category.

(xiii) Any changes to the Rate and Method of Apportionment of Special Tax for the Community Facilities District.

(xiv) A copy of the most recent annual information required to be filed by the Community Facilities District with the California Debt and Investment Advisory Commission pursuant to the Act and relating generally to outstanding Community Facilities District bond amounts, fund balances, assessed values, special tax delinquencies and foreclosure information.

(c) In addition to any of the information expressly required to be provided under paragraph (b) above, the District shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.

(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the District or related public entities, which are available to the public on the MSRB’s internet web site or filed with the Securities and Exchange Commission. The District shall clearly identify each such other document so included by reference.

Section 5. Reporting of Listed Events.

(a) The District shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds:

(1) Principal and interest payment delinquencies.

(2) Non-payment related defaults, if material.

(3) Unscheduled draws on debt service reserves reflecting financial difficulties.

(4) Unscheduled draws on credit enhancements reflecting financial difficulties.

(5) Substitution of credit or liquidity providers, or their failure to perform.

(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the 2013 Bonds, or other material events affecting the tax status of the 2013 Bonds.

H-4

(7) Modifications to rights of security holders, if material.

(8) Bond calls, if material, and tender offers.

(9) Defeasances.

(10) Release, substitution, or sale of property securing repayment of the securities, if material.

(11) Rating changes.

(12) Bankruptcy, insolvency, receivership or similar event of the District.

(13) The consummation of a merger, consolidation, or acquisition involving the District , or the sale of all or substantially all of the assets of the District (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material.

(14) Appointment of a successor or additional Fiscal Agent or the change of name of the Fiscal Agent, if material.

(b) Upon the occurrence of a Listed Event, the District shall, or shall cause the Dissemination Agent (if not the District) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Indenture.

(c) The District acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), and (a)(14) of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier "material" with respect to certain notices, determinations or other events affecting the tax status of the 2013 Bonds. The District shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law. Upon occurrence of any of these Listed Events, the District will as soon as possible determine if such event would be material under applicable federal securities law. If such event is determined to be material, the District will cause a notice to be filed as set forth in paragraph (b) above.

(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the District in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the District, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or

H-5

liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the District.

Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under the Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.

Section 7. Termination of Reporting Obligation. The District's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the 2013 Bonds. If such termination occurs prior to the final maturity of the 2013 Bonds, the District shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).

Section 8. Dissemination Agent. The District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent will be Dolinka Group, LLC.

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the District may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:

(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the 2013 Bonds, or type of business conducted;

(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the 2013 Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(c) the proposed amendment or waiver either (i) is approved by holders of the 2013 Bonds in the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of holders, or (ii) does not, in the opinion of the Fiscal Agent or nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the 2013 Bonds.

If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.

If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to

H-6

investors to enable them to evaluate the ability of the District to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be filed in the same manner as for a Listed Event under Section 5(c).

Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the District from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the District shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 11. Default. In the event of a failure of the District to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the 2013 Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the District to comply with this Disclosure Certificate shall be an action to compel performance.

Section 12. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the District agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the District, the Property Owner, the Fiscal Agent, the Bond owners or any other party. The obligations of the District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the 2013 Bonds.

Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the District, the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the 2013 Bonds, and shall create no rights in any other person or entity.

H-7

Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.

Date: November 7, 2013 RIO ELEMENTARY SCHOOL DISTRICT

By: Interim Assistant Superintendent, Business Services

AGREED AND ACCEPTED: Dolinka Group, LLC as Dissemination Agent

By: Name: Title:

H-8

EXHIBIT A

NOTICE OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Rio Elementary School District

Name of Bond Issue: Rio Elementary School District Community Facilities District No. 1 Special Tax Bonds, Series 2013

Date of Issuance: November 7, 2013

NOTICE IS HEREBY GIVEN that the District has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate dated November 7, 2013, executed by the District and countersigned by Dolinka Group, LLC, as dissemination agent. The District anticipates that the Annual Report will be filed by ______.

Dated:

DISSEMINATION AGENT:

Dolinka Group, LLC

By: Its:

H-9

[THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX I PROPOSED FORM OF BOND COUNSEL OPINION

[closing date]

Board of Trustees Rio Elementary School District 2500 Vineyard Street Oxnard, CA 93036

Re: Rio Elementary School District Community Facilities District No. 1 Special Tax Bonds, Series 2013

Dear Board Members:

We have acted as bond counsel in connection with the issuance by the Rio Elementary School District (the “School District”) of the Rio Elementary School District Community Facilities District No. 1 Special Tax Bonds, Series 2013 (the “Bonds”), under and pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982 of the State of California (being Sections 53311 et seq. of the Government Code of the State of California); and pursuant to the provisions of the Fiscal Agent Agreement dated November 1, 2005, as supplemented by the First Supplemental Fiscal Agent Agreement dated November 1, 2013, both between Zions First National Bank, as fiscal agent, and the School District (collectively, the “Fiscal Agent Agreement”), on behalf of the Rio Elementary School District Community Facilities District No. 1 (the “CFD”). In such capacity, we have examined such law and such certified proceedings and other documents as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the School District contained in the Fiscal Agent Agreement and in the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation.

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

1. The School District has duly authorized, executed and delivered the Bonds. The Bonds are legal, valid and binding limited obligations of the School District on behalf of the CFD, payable solely from the proceeds of the Net Special Tax Revenues (as that term is defined in the Fiscal Agent Agreement) and certain funds held under the Fiscal Agent Agreement to the extent specified therein.

2. The Fiscal Agent Agreement constitutes a valid and binding obligation of the School District on behalf of the CFD and is enforceable against the School District in accordance with its terms. The Fiscal Agent Agreement creates a valid lien on the Net Special Tax Revenues and other funds pledged by the Fiscal Agent Agreement for the

I-1 security of the Bonds.

3. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the School District comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The School District has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds.

4. Interest on the Bonds is exempt from State of California personal income taxes.

The rights of the owners of the Bonds and the enforceability of the Bonds and the Fiscal Agent Agreement are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally and by equitable principles, whether considered at law or in equity.

We express no opinion regarding the accuracy, adequacy or completeness of the Official Statement or other offering materials relating to the Bonds. Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein.

This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur.

Very truly yours,

KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD A Professional Corporation

I-2

APPENDIX J

COMMUNITY FACILITIES DISTRICT BOUNDARY MAP

J-1

[THIS PAGE INTENTIONALLY LEFT BLANK]

SHEET 1 OF 2 PROPOSED BOUNDARIES OF RIO ELEMENTARY SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 1 COUNTY OF VENTURA STATE OF CALIFORNIA

LEGEND (1) Filed in lhe office of the Clerk of the Board this _ Boundaries of Community day of , 2005. Facilities Dletrlct No. 1

Community Facilities Clerk of lhe Board District No. 1 (See Exhibit A) I hereby certify lhallhe wilhin map showing the proposed boundaries of the Rio Elementary School District, Community Facilities District No. 1 , Ventura County, State of California, was approved by the Board (2) at a regular meeting thereof, held on this __ day of ____ , 2005, by its Resolution No.

Clerk of the Board

Filed this _day of , 2005, at the hour of __ o'clock_m, in Book of Maps of Assessment and Community Facilities Districts at page and as Instrument No. (3) in the office of the County Recorder of Ventura County, State of California.

Fee _____

County Recorder of Ventura County

Reference is hereby mode to the Assessor mops of the County of Ventura for on exact description of the lines end dimensions of each lot and parcel.

Prepared by David Taussig &: Associates. Inc. SHEET 2 OF 2 EXHIBIT "A" OF RIO ELEMENTARY SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 1 COUNTY OF VENTURA STATE OF CALIFORNIA F.Y. 2004-05 Assessor Parcel Numbers within the Boundaries of Community Facilities District No. 1

132-0-020-205 132-0-020-210 132-0-020-220 132-0-020-240 132-0-020-260 132-0-020-375 132-0-020-385 132-0-020-405 132-0-020-415 132-0-020-425 132-0-020-435 132-0-031-060 132-0-031-120 132-0-032-010 132-0-032-050 132-0-032-080 132-0-032-090 132-0-032-100 132-0-032-120 132-0-032-130 132-0-032-145 132-0-032-155 132-0-100-115 132-0-020-160 132-0-020-190 133-0-010-015 133-0-010-115 133-0-010-475 133-0-010-495 133-0-010-575 133-0-010-595 133-0-010-605 133-0-010-615 133-0-010-630