COUNTY OF RIVERSIDE

ORDINANCE NO. 687

ORDINANCE OF THE BOARD OF SUPERVISORS OF THE COUNTY OF

RIVERSIDE, STATE OF CALIFORNIA, AUTHORIZING THE LEVY OF A

SPECIAL TAX WITHIN COMMUNITY FACILITIES DISTRICT NO. 88-1

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WHEREAS, on October 17, 1989, the Board of Supervisors of the County of Riverside, State of California (the "Board"), adopted Resolution No. 89-446 (the "Resolution of Intention to Establish the District") stating its intention to form Community Facilities District No. 88-1 of the County of Riverside, State of California (the "District") pursuant to Chapter 2.5 of Part 1 of Division 2 of Title 5 (commencing with Section 53311) of the California Government Code, commonly known as the "Mello-Roos Community Facilities Act of 1982" (the "Act"); and

WHEREAS, on October 17, 1989, the Board also adopted Resolution No. 89-447 (the "Resolution of Intention to Incur Bonded Indebtedness") stating its intention to incur bonded indebtedness in an amount not to exceed $20,000,000 within the District for the purpose of financing certain facilities (the "Facilities") generally described as follows: the cost of planning and designing the Facilities, including the cost of environmental evaluations of those Facilities; acquisition of land, rights of way, water, sewer or other capacity or connection fees; satisfaction of contractual obligations relating to expenses or the advancement of funds for expenses existing at the time the bonds are issued pursuant to the Act; costs associated with the creation of the District, issuance of bonds, determination of the amount of special taxes, collection of special taxes, payment of special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the District; architectural, engineering, inspection, legal, fiscal and financial consultant fees; bond and other reserve funds; discount fees; capitalized interest on bonds of the District due and payable prior to the expiration of one year from the date of completion of the Facilities, not to exceed two (2) years for each series of bonds issued by the District; and all costs of issuance of the bonds, including, but not limited to, fees for bond counsel and District's counsel, costs of obtaining credit ratings, and printing costs; and, other expenses incidental to the acquisition, construction, completion and inspection of the Facilities, all as more fully described in the Resolution of Intention to Establish the District; and

WHEREAS, notice was published as required by law relative to the intention of the Board to form the proposed District and to incur bonded indebtedness in an amount not to exceed $20,000,000 within the District; and

WHEREAS, the Board convened and closed a noticed public hearing as required by law on November 21, 1989, (1) to determine whether it should proceed with the formation of the District and authorize the rate and method of apportionment of a special tax to be levied within the District for the purpose of paying for the Facilities and the Incidental Expenses (as defined in the Resolution of Intention to Establish the District) relating thereto and the costs associated with the bonded indebtedness proposed to be issued to finance the Facilities, including the principal of and interest on the proposed bonded indebtedness, and (2) on the proposed issuance of the bonded indebtedness; and

WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the District, the levy of the special tax, the proposed issuance of the bonded indebtedness, and all other matters set forth in the Resolution of Intention to Establish the District and the Resolution of Intention to Incur Bonded Indebtedness, were heard and considered and a full and fair hearing was held thereon; and

WHEREAS, the Board, subsequent to said hearing, adopted Resolution No. 89-574 (the "Resolution of Formation") which established the District, determined the validity of prior proceedings relative to the formation of the District and the incurring of bonded indebtedness, authorized the levy of a special tax within the District and called an election for December 5, 1989, on the propositions of levying a special tax and establishing an appropriations limit within the District; and

WHEREAS, the Board, subsequent to said hearing, adopted Resolution No. 89-575 (the "Resolution to Incur Bonded Indebtedness") which determined the necessity of incurring bonded indebtedness in an amount not to exceed $20,000,000 and called an election within the District for December 5, 1989, on the proposition of incurring bonded indebtedness; and

WHEREAS, on December 5, 1989, in accordance with the Resolution of Formation and the Resolution to Incur Bonded Indebtedness, a consolidated election was held within the District in which the qualified electors approved by more than a two-thirds vote the propositions of incurring bonded indebtedness, levying a special tax and establishing an appropriations limit within the District;

NOW, THEREFORE, the Board of Supervisors of the County of Riverside ORDAINS as follows:

Section 1. The above recitals are all true and correct and this Board so finds and determines.

Section 2. By the passage of this Ordinance, the Board authorizes the levy of a special tax pursuant to the rate and method of apportionment set forth in Exhibit "A" attached hereto and incorporated by reference herein, being the rate and method of apportionment specified in the Resolution of Intention to Establish the District.

Section 3. The Board is hereby further authorized each year by resolution adopted within the time period, if any, provided in the Act, to determine the specific special tax rate and amount to be levied for the next fiscal year, except that the special tax rate to be levied shall not exceed that set forth in Exhibit "A" hereto, but the special tax may be levied at a lower rate.

Section 4. Properties or entities of the state, federal or other local governments shall, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act, be exempt from the special tax. No other properties or entities are exempt from the special tax unless the properties or entities are expressly exempted in Exhibit "A" hereto.

Section 5. All of the collections of the special tax shall be used as provided for in the Act and the Resolution of Formation. The special tax shall be levied only so long as needed for its purpose as described in the Resolution of Formation and the Resolution to Incur Bonded Indebtedness.

Section 6. The special tax shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes, as such procedure may be modified by law from time to time.

Section 7. The Chairman of the Board shall sign this Ordinance and the Clerk of the Board shall attest to the Chairman's signature and then cause the same to be published within fifteen (15) days after its passage at least once in the Press-Enterprise, a newspaper of general circulation published and circulated in the County of Riverside.

Section 8. This Ordinance relating to the levy of the special tax shall take effect immediately upon its final passage in accordance with the provisions of Section 25123(c) of the California Government Code, and the specific authorization for adoption is pursuant to the provisions of Section 53340 of the Act.

ADOPTED: 12-19-1989 (Eff.: 12-19-1989)

EXHIBIT "A"

COMMUNITY FACILITIES DISTRICT NO. 88-1

(PLAZA AT MONTEREY)

OF THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

The rates as set forth herein are applicable for the fiscal year commencing July 1, 1990, and ending June 30, 1991, and for each fiscal year thereafter until the principal of and interest and premium, if any, on the Bonds are paid. Capitalized terms used herein shall have the meanings as hereinafter defined.

The proposed District will be divided into three (3) Zones as shown on the Map entitled "Proposed Boundaries of Community Facilities District No. 88-1 (Plaza at Monterey) of the County of Riverside, State of California" on file in the office of the Clerk of the Board of Supervisors of the County of Riverside (hereinafter referred to separately as a "Zone" or as "Zone 1", "Zone 2" or "Zone 3" and collectively as the "Zones"). The boundaries of each Zone will be the respective boundaries thereof as shown on said Map and the tax to be levied within each Zone shall be levied in such amounts and in such a manner as hereinafter provided.

I. MAXIMUM SPECIAL TAX RATE

The Maximum Special Tax Rate for the respective Zones shall be as follows:

CATEGORY OF LAND USE MAXIMUM SPECIAL TAX RATE

1. ZONE 1: $21,000.00 per Net Acre

2. ZONE 2: $13,000.00 per Net Acre *

3. ZONE 3: $13,000.00 per Net Acre *

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* The Maximum Special Tax Rate for Zone 2 and Zone 3 shall be

$13,000.00 per Net Acre except, (i) until such year as bonds are issued for the purpose of paying the costs of improvements in Zone 2

and/or Zone 3 as set forth in Schedule "A" hereto ("Schedule A") and incorporated herein by this reference, the Maximum Special Tax Rate for Zone 2 and/or Zone 3 shall be $5,750 per Net Acre; (ii) in any year prior to the year bond proceeds are expended as provided in (i) above, the Maximum Special Tax Rate for Zone 3 shall be $2,300 per Net Acre for any parcels in Zone 3 for which the owner thereof files a Written Certification with the Chief Administrative Officer of the County. The filing of such Written Certification shall be due on March 1 of each year.

II. SPECIAL TAX RATE

The Special Tax shall be determined for each Zone of the District in the manner as hereinafter set forth in this Section II. The methodology utilized to determine such Special tax as described herein shall be applied to the applicable Zones commencing in the fiscal year during which the Bonds are issued and continuing thereafter in each subsequent fiscal year until such time as the Bonds shall have been paid in full or provision for their payment in full upon their maturity date or upon the date set for redemption prior to maturity shall have been made.

A. LEVY FOR ANNUAL ADMINISTRATIVE COST

The District shall determine the total annual Administrative Costs each July 1 for the preceding fiscal year or portion thereof commencing July 1, 1990. The levy for all parcels within the District for annual Administrative Costs shall be prorated on an acreage basis by Zone and applied as a component of Annual Debt Service.

B. LEVY FOR ANNUAL DEBT SERVICE

The District shall determine the Annual Debt Service each July 1 commencing July 1, 1990 for the ensuing fiscal year.

1. The levy for all parcels within Zone 1 shall be a percentage rate equal to eighty-seven percent (87%) of the Zone 1 Maximum Special Tax Rate. Should the dollar amount produced by eighty-seven percent (87%) of the applicable Maximum Special Tax Rate on all parcels within Zone 1 be greater than that dollar amount necessary to pay the Annual Debt Service after application of the special tax levy for Zone 2 and Zone 3 to pay such Annual Debt Service, then the levy for all parcels within Zone 1 for Annual Debt Service shall be reduced accordingly.

2. The levy for all parcels within Zone 2 and Zone 3 shall be a percentage rate of eighty-seven percent (87%) of the Zone 2 or Zone 3 Maximum Special Tax Rate, as applicable.

C. LEVY FOR RESERVE FUND REPLENISHMENT

The District shall determine the total annual amount required for replenishment of the reserve fund for the Bonds. The amount needed to replenish the reserve fund shall be determined each July 1 commencing July 1, 1991.

The levy for all parcels within Zones 1, 2 and 3 for reserve fund replenishment shall be prorated on an acreage basis for each Zone.

D. SPECIAL TAX

For Zones 1, 2 and 3 the Special Tax to be levied in any fiscal year shall be the total of the amounts determined above in Sections II(A), II(B) and II(C) for annual Administrative Costs, Annual Debt Service and reserve fund replenishment. In no event shall the Special Tax levied in Zones 1, 2 or 3 exceed one hundred percent (100%) of the applicable Maximum Special Tax Rate stated in Section I hereof.

E. REDUCTION OF SPECIAL TAX RATE AS A RESULT OF RECOUPMENT OF DELINQUENCIES

The District shall determine the total dollar amount recouped during the prior fiscal year representing delinquent special taxes. This amount will be determined each July 1 commencing July 1, 1991.

This amount shall be applied as an offset for the Special Tax that is levied in the ensuing fiscal year for Zones 1, 2 and 3, respectively.

F. REVIEW PANEL

The Board shall establish as part of the proceedings and administration of the District a special three-member review panel (the "Review Panel"). The Review Panel shall review and make recommendations to the Board concerning the levy and administration of the Special Tax herein specified.

III. DEFINITIONS

The capitalized terms used above shall have the following meanings:

"Administrative Costs" means the ordinary and necessary fees and expenses for administering the determination, allocation, levy and collection of the Special Tax, and of servicing the Bonds including, but not limited to, the cost of annual audits, and the fees and expenses for special tax consultants, legal counsel and fiscal agent, paying agent; registrar and transfer agent.

"Annual Debt Service" means the principal amount needed for all Bonds outstanding whether at maturity or for sinking fund redemptions, interest and premium, if any, on the Bonds to be paid by the Special Tax with respect to a fiscal year together with annual Administrative Costs for the preceding fiscal year.

"Annual Special Tax Requirement" means the total amount of the special tax required to be levied in a fiscal year to pay the Annual Debt Service, Administrative Costs and an amount, if any, necessary to replenish the reserve fund to the Reserve Requirement for the Bonds.

"Bonds" means any bonds or other forms of indebtedness issued for the District and secured by the Special Tax. The Bonds shall be issued in multiple series such that upon the issuance of any series of bonds, the total outstanding principal amount of bonds shall be limited to the extent that, based upon traditional municipal bond underwriting criteria, the "loan-to-value ratio" based upon an MAI appraisal of the real property within the District boundaries shall not exceed (i) a 1:4 ratio on the entire District and (ii) a 1:3 ratio on any Zone within the District.

"Commercial Use" means any commercial use of real property within the District as may be permitted by the County pursuant to its Comprehensive General Plan, applicable zoning ordinance, variances or conditional use permits.

"County" means County of Riverside.

"District" means Community Facilities District No. 88-1 (Plaza at Monterey) of the County of Riverside, State of California.

"General Plan" means the Comprehensive General Plan of the County of Riverside, as amended.

"Maximum Special Tax Rate" means the maximum dollar amount per Net Acre at which Special Taxes may be levied on each parcel within Zones 1, 2 and 3 as set forth in Section I herein.

"Net Acre" or "Net Acre" means the area in acres of a parcel, as shown on the applicable County Assessor's map for the fiscal year in which the Special Tax is to be levied.

"Reserve Requirement" means an amount required to be held in the reserve fund pursuant to a resolution providing for the issuance of the Bonds, which amount shall not be greater than maximum Annual Debt Service on the Bonds and which shall be funded with no more than ten percent (10%) of the proceeds received from the sale of such Bonds.

"Special Tax" means the dollar amount of tax levied on the parcels in each Zone within the District at a certain amount per Net Acre calculated consistent with Sections I and II hereof.

"Written Certification" means a written certificate from the owner of any parcel within Zone 3 delivered to the Chief Administrative Officer of the County on or before March 1 of each year which states that, as of such March 1, a particular parcel within Zone 3 is not presently being used for a Commercial Use and is not expected to be used during the next succeeding one-year period for a Commercial Use.