ORDINANCE NO. 723.1

ORDINANCE OF THE BOARD OF SUPERVISORS OF

THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA,

DISSOLVING COMMUNITY FACILITIES DISTRICT NO. 91-2

(SUN CITY PALM SPRINGS) OF THE COUNTY OF RIVERSIDE

WHEREAS, on March 24, 1992, the Board of Supervisors of the County of Riverside, State of California (the "Board"), adopted Resolution No. 92-151 (the "Resolution of Intention to Establish the District") stating its intention to form Community Facilities District No. 91-2 (Sun City Palm Springs) 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 (the "Government Code"), commonly known as the "Mello-Roos Community Facilities Act of 1982," as amended (the "Act"); and

WHEREAS, on March 24, 1992, the Board also adopted Resolution No. 92-152 (the "Resolution of Intention to Incur Bonded Indebtedness") stating its intention to incur bonded indebtedness in an amount not to exceed $23,400,000 within the District for the purpose of financing the construction and acquisition of certain roads and roadway facilities and parkway facilities (the "Facilities"), and incidental expenses related thereto as authorized by the Act (the "Incidental Expenses"), including, but not limited to, (1) the cost of planning and designing the Facilities and the cost of environmental evaluations thereof, (2) the costs associated with the creation of the District, issuance of the bonds, determination of the amount of and collection of taxes, the payment of taxes, and costs otherwise incurred in order to carry out the authorized purposes of the District, and (3) any other expenses incidental to the 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 $23,400,000 within the District; and

WHEREAS, on June 16, 1992, the Board held a noticed public hearing that had been lawfully continued from April 28, 1992, consistent with the provisions of the Act, as required by law, (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 purposes of paying for the Facilities and the Incidental Expenses 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 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. 92-195 (the "Resolution to Incur Bonded Indebtedness) which determined the necessity of incurring bonded indebtedness in an amount not to exceed $23,400,000 and called an election within the District for July 21, 1992, on the proposition of incurring bonded indebtedness; and

WHEREAS, the Board, subsequent to said hearing, adopted Resolution No. 92-195 (the "Resolution to Incur Bonded Indebtedness") which determined the necessity of incurring bonded indebtedness in an amount not to exceed $23,400,000 and called an election within the District for July 21, 1992, on the proposition of incurring bonded indebtedness; and

WHEREAS, on July 21, 1992, 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 two-thirds vote the propositions of incurring bonded indebtedness, levying a special tax and establishing an appropriations limit within the District; and

WHEREAS, on July 29, 1992, the Clerk of the Board caused to be recorded with the Office of the Recorder for the County of Riverside a "Notice of Special Tax Lien" (the "Notice of Special Tax Lien") that bears Instrument No. 281134; and

WHEREAS, on August 11, 1992, the Board adopted Ordinance No. 723 (the "Ordinance Authorizing the Levy of the Special Tax") that authorizes the levy of a special tax consistent with the rate and method of apportionment that the qualified electors approved at the consolidated election held on July 21, 1992; and

WHEREAS, the District has not incurred bonded indebtedness to finance the construction of the Facilities; now, therefore,

The Board of Supervisors of the County of Riverside, State of California 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 finds that no bonded indebtedness has been or will be incurred by the District to finance the construction of the Facilities and the District has no outstanding indebtedness of any kind for which the levy of a special tax may be made consistent with the terms of the rate and method of apportionment of the special tax that was approved by the qualified electors at the consolidated election held on July 21, 1992.

Section 3. By the passage of this Ordinance, the Board finds that, due to the determination of the District not to incur bonded indebtedness to finance the construction of the Facilities, the District is not authorized to levy the special tax approved by the qualified electors at the consolidated election held on July 21, 1992.

Section 4. By the passage of this Ordinance, the Board rescinds Resolution No. 92-194, adopted on June 16, 1992.

Section 5. By the passage of this Ordinance, the Board rescinds Resolution No. 92-195, adopted on June 16, 1992.

Section 6. By the passage of this Ordinance, the Board repeals Ordinance No. 723, adopted on August 11, 1992.

Section 7. The Administrator for the District is directed to give notice to the City of Palm Desert and Del Webb California Corp., an Arizona corporation, that the agreement entitled "Preliminary Joint Financing Agreement Among County of Riverside, Community Facilities District No. 91-2 (Sun City Palm Springs) of the County of Riverside, City of Palm Desert and Del Webb California Corp., an

Arizona Corporation" is terminated.

Section 8. The Clerk of the Board is directed, consistent with Section 53338.5 of the Government Code, to record an addendum to the Notice of Special Tax Lien that is to be prepared and provided by County Counsel stating that the District and all associated liens, if any, have been dissolved.

Section 9. By the passage of this Ordinance, the Board dissolves Community Facilities District No. 91-2 (Sun City Palm Springs) of the County of Riverside and all associated liens.

Section 10. 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 11. This Ordinance relating to the dissolution of the District and the repeal of the Ordinance authorizing 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 Government Code, and the specific authorization for the adoption is pursuant to the provisions of Section 53338.5 of the Government Code

ADOPTED, SIGNED AND APPROVED this 13th day of December, 1994.

ADOPTED: 8-11-92 (Repealed: 12-13-94)

12-13-94 (Eff.: 12-13-94)

Ordinance No. 723

EXHIBIT "A"

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

FOR COUNTY OF RIVERSIDE

COMMUNITY FACILITIES DISTRICT NO. 91-2

(SUN CITY PALM SPRINGS)

A Special Tax (defined below) shall be applicable to each Parcel (defined below) located within the boundaries of Community Facilities District No. 91-2 (Sun City Palm Springs) of the County of Riverside (hereinafter "CFD No. 91-2"). The amount of Special Tax to be collected from a Parcel in any Fiscal Year (defined below) shall be determined by the Board of Supervisors of the County of Riverside (hereinafter the "Board"), acting in its capacity as the legislative body of CFD No. 91-2, by applying the appropriate tax rate, as set forth in Sections C and D below for Developed Property and Vacant Property (all terms defined below). All of the property in CFD No. 91-2, unless exempted by law or by the provisions of Section E below, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS

The terms hereinafter set forth have the following meanings:

"Alternate Maximum Special Tax" for Developed Property means that amount of Special Tax computed under Section C (1) below.

"Alternate Maximum Special Tax Rate" means, as applied to Developed Property, $0.0913 per Net Taxable Square Foot per Parcel.

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

"Assigned Special Tax Rate" means the rate of Special Tax per Parcel, Residential Unit, Net Taxable Acre, or per usable gross square foot as specified in Table 1 below.

"Commercial/Industrial Property" means all Parcels within CFD 91-2 that are to be developed or have been developed for commercial or industrial use as specified in the Specific Plan or in the land use regulations for the County of Riverside.

"Developed Property" means all Parcels for which a final subdivision, tract or functionally equivalent map was recorded prior to March 1 of the Fiscal Year preceding the Fiscal Year for which the Special Tax is being levied.

"Fiscal Year" means the period starting on July 1 of any year and ending the following June 30.

"Gross Floor Area" means, as applied to Commercial/Industrial Property, the square footage for the primary and secondary building uses as shown on the applicable building permit.

"Homeowner's Association" means the Sun City Palm Springs Community Association, a California non-profit mutual benefit corporation.

"Maximum Special Tax" means, with respect to any given Parcel, the maximum Special Tax, determined in accordance with Section C below, that can be levied by the Board in any Fiscal Year on a Parcel of Developed Property or Vacant Property.

"Net Taxable Acre(age)" means an acre or the acreage of Developed Property or Vacant Property, exclusive of property exempted by law or by the provisions of Section E below from the Special Tax; the acreage calculation for Developed Property and Vacant Property will be based on the dimensions as shown on the recorded final subdivision, parcel or functionally equivalent map or instrument. Acreage calculation as to Vacant Property shall be the acreage shown or determined from the current applicable Assessor's Parcel Map.

"Net Taxable Square Foot(age)" means Net Taxable Acre(age) expressed as square feet.

"Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel Number.

"Residential Unit" means a dwelling unit intended for residential use.

"Special Tax Requirement" means that amount required in any Fiscal Year to pay: (1) debt service on all bonds or other indebtedness of CFD No. 91-2 sold by or incurred for the benefit of CFD No. 91-2, (2) any amounts required to establish any required reserve funds or to replenish any reserve fund(s) established in association with bonds issued and sold for the benefit of CFD No. 91-2, (3) costs incurred by CFD No. 91-2 in the annual levy and collection of the Special Tax, (4) the administration costs of CFD No. 91-2, and (5) any amounts needed for the creation of a special fund or funds for financing or funding the costs of acquiring or constructing public facilities in subsequent Fiscal Years.

"Special Tax(es)" means the Special Tax to be levied in each Fiscal Year on each Parcel of Developed Property or Vacant Property to fund the Special Tax Requirement.

"Specific Plan" means Specific Plan No. 281 of the County of Riverside and Specific Plan Ordinance No. 348.3388 approved and adopted, respectively, on October 8, 1991, as may be modified, supplemented or amended.

"Taxable Property" means all Parcels in CFD No. 91-2 which are not exempt from the levy of Special Taxes pursuant to law or Section E below.

"Vacant Property" means all Parcels which are Taxable Property in CFD No. 91-2 that are not classified as Developed Property.

B. ASSIGNMENT TO LAND USE CLASS

For each Fiscal Year (commencing with Fiscal Year 1992-93), all Parcels within CFD No. 91-2 shall be classified either as Developed Property or Vacant Property and shall be subject to the levy of the Special Tax in accordance with the rates and method of apportionment set forth in Sections C and D below.

For purposes of determining the applicable Maximum Special Tax pursuant to Section C below, Parcels of Developed Property shall be assigned to one of the Classes designated in Table 1 below. Residential Units shall be assigned to Class A. Commercial/Industrial Property shall be assigned to Class B.

C. MAXIMUM SPECIAL TAX

1. Developed Property

The Maximum Special Tax for Developed Property assigned to Classes A and B in Table 1 shall be the greater of (i) the amount determined by application of the Assigned Special Tax Rate specified in Table 1, or (ii) if required pursuant to Section D below, the amount derived by multiplying the Net Taxable Square Feet of the Parcel by the Alternate Maximum Special Tax Rate.

TABLE 1

ASSIGNED SPECIAL TAX RATES FOR DEVELOPED PROPERTY

Class Land Use Assigned Special Tax Rates*

A Residential $ 485

B Commercial/ The greater of:

Industrial $4,000 per Net Taxable Acre or $0.26

per square foot of building floor space

NOTE:

* Assigned Special Tax Rates and Alternative Special Tax Rates have been calculated assuming 700 Net Taxable Acres of Developed Property and 787.3 acres of exempted property that is used for public rights-of-way, private roads, open space, utilities, and other uses (see Section E).

2. Vacant Property

The Maximum Special Tax Rate for Vacant Property shall be $4,000 per Net Taxable Acre.

The Assigned Special Tax Rates specified in Table 1 represent the amounts expected to be required to fund the projected revenue requirements of CFD No. 91-2 for servicing bonds sold and issued for the benefit of CFD No. 91-2. The Maximum Special Tax for a Parcel of Developed Property may exceed the Assigned Special Tax Rate if the Alternate Maximum Special Tax Rate is applied pursuant to Section D below. The Alternate Maximum Special Tax Rate may be applied to a Parcel of Developed Property if its application yields a Special Tax greater than the Assigned Special Tax Rate for the Parcel.

Examples of the application of the Alternate Maximum Special Tax Rate include:

! If a 10,000 square foot Parcel in Class A has an Assigned Special Tax Rate of $485 per unit, application of the Alternate Maximum Special Tax Rate would result in a Maximum Special Tax of $913 (10,000 SF x $0.0913/SF).

! If a Parcel in Class B has a building with 12,246 square feet of Gross Floor Area constructed on one Net Taxable Acre, the Assigned Special Tax Rate will be $4,000, application of the Alternate Maximum Special Tax Rate would yield a Special Tax of $3,977 (43,560 SF x $0.0913/SF). Since the application of the Alternate Maximum Special Tax Rate yields a lower Special Tax than the Assigned Special Tax, the Maximum Special Tax for this Parcel would be $4,000 per acre, as determined by the Assigned Special Tax Rate.

As set forth in Section D below, the Alternate Maximum Special Tax Rate will be applied to all Developed Property as a Special Tax of last resort.

D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX TO DEVELOPED PROPERTY AND VACANT PROPERTY

Starting with Fiscal Year 1992-93 and for each subsequent Fiscal Year, the Board shall determine the amount of Special Taxes to be levied and collected from Taxable Property in that Fiscal Year in order to satisfy the Special Tax Requirement for such Fiscal Year.

CFD No. 91-2 may, from time to time, receive revenues from sources other than collections of the Special Tax. Generally, such revenues will be used to redeem outstanding bonds or indebtedness of CFD No. 91-2. However, at the discretion of the Board, such revenues may be used to reduce the Special Tax Requirement in a given Fiscal Year if the Board determines that the revenues will be of a continuing, secure and stable nature. The Board shall levy the Special Tax as follows until it has levied the amount necessary to satisfy the Special Tax Requirement for said Fiscal Year:

First: The Special Tax shall be levied on each Parcel of Developed Property, exclusive of property exempt from Special Tax pursuant to Section E below, up to 91 percent of the Assigned Special Tax Rate;

Second: If additional funds are needed after the first step has been completed, the Special Tax shall be levied on each Parcel of Vacant Property, exclusive of property exempt from the Special Tax pursuant to Section E below, or classified as Vacant Property pursuant to Section E below, up to 100 percent of the Maximum Special Tax Rate for Vacant Property;

Third: If additional funds are needed after the second step has been completed, the Special Tax shall be levied on each Parcel of Developed Property, exclusive of property exempt from Special Tax pursuant to Section E below, up to 100 percent of the Assigned Special Tax Rate;

Fourth: If additional funds are needed after the three steps above have been completed, the Special Tax on Developed Property, exclusive of property exempt from the Special Tax pursuant to Section E below, shall be determined by application of the Alternate Maximum Special Tax Rate to those Parcels meeting the specifications set forth in Section C above to an amount not exceeding 100 percent of the Alternate Maximum Special Tax Rate.

Fifth: If additional funds are needed after the first four steps above have been completed, the Special Tax shall be levied on Parcels classified as Vacant Property pursuant to Section E below up to 100 percent of the Maximum Special Tax Rate for Vacant Property.

E. EXEMPTIONS

The Board shall not levy a Special Tax on:

(i) Properties owned by state, federal, or other local governments, except as otherwise provided in Section 53317.3 or 53317.5 of the Government Code; and

(ii) Properties designated, by the Board, for use as public rights-of-way for roadways, drainage or public parks (including sites, if any, designated "Open Space" and "School Site") as set forth in the Specific Plan as of the date the Special Tax is established by the Board.

(iii) Properties which are to be owned by the Homeowner's Association which are to be used for golf courses, recreation centers, parks and private streets, as shown on Exhibit A.

Parcels that become exempt under (i) or (ii) above after July 1 in a Fiscal Year shall remain liable to pay any Special Tax levied on such Parcel in said Fiscal Year. Parcels conveyed or irrevocably offered for dedication to a public agency after formation of CFD No. 91-2, and not otherwise exempt pursuant to this Section E, shall be subject to the levy of the Special Tax pursuant to Section 53317.3 or Section 53317.5 of the Government Code and shall be classified as Vacant Property. However, at the direction of the Board, such Parcels may be exempted from all or any portion of the levy of the Special Tax in any Fiscal Year, provided the Special Tax Requirement can be satisfied without imposing a levy on said Parcels. Such Parcels will only be taxed following the levy of the Maximum Special Tax on all other Parcels for such Fiscal Year.

In the event that the Specific Plan is amended subsequent to the date the Special Tax is established by the Board which results in an amendment to Exhibit A hereto, then properties which fall within (ii) and/or (iii) above by virtue of such amendment shall be treated as exempt so long as the total exempted property within CFD No. 91-2 does not exceed 787.3 acres.

F. COMMUNITY FACILITIES DISTRICT SPECIAL TAX REVIEW BOARD

The Board has established a Community Facilities District Special Tax Review Board. Said Review Board shall interpret and make determinations relative to the administration of the Special Tax herein specified.

G. MANNER OF COLLECTION

The Special Taxes shall be collected in the same manner and at the same time as ad valorem property taxes; provided, however, that CFD No. 91-2 may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations. The Special Taxes shall be subject to the same penalties as is provided for ad valorem taxes and shall be enforced in the manner determined appropriate by the Board under the laws governing CFD No. 91-2.