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HomeMy WebLinkAbout23 Res Nos. 2021-29, 2021-30, 2021-31 - Section 29 Assessment DistrictMEETING DATE: PREPARED BY: REQUEST: Recommendation STAFF REPORYEETI CITY OF PALM DEafi FINANCE DEPARTIVIO: ABSENT: ABSTAIN• A)IP VERIFIED BY• S Original on File with City Clerk's Office Veronica Tapia, Senior Management Analyst June 10, 2021 CITY COUNCIL ON APPROVED ' DENIED RECEIVED OTHER Ildeoled Rasitta. aov-aq, at4911-30# w-m GD4TE 6/4•/0-X09,-1 Mai Quinbni KPl(y Adopt Resolution Nos. 2021-29, 2021-30, and 2021-31, 1) A Resolution Declaring Intention to Issue Refunding Bonds for the Section 29 Assessment District (No. 2004-02), and 2) A Resolution Approving the Reassessment Report in Connection with the Section 29 Assessment District Refunding Bonds; and 3) A Resolution Authorizing the Issuance and Sale of Section 29 Assessment District Limited Obligation Refunding Improvement Bonds, Series 2021, authorizing certain documents, and approving certain other related matters That the City Council waive further reading and adopt, 1) Resolution No. 2021-29, a Resolution of the City Council of the City of Palm Desert, declaring its intention to issue refunding bonds for the Section 29 Assessment District (No. 2004-02); directing the preparation of a report pursuant to section 9523 of the California Streets and Highways Code; making other determinations relating to the refunding; and directing other matters relating thereto; and 2) Resolution No. 2021-30, a Resolution of the City Council of the City of Palm Desert, approving a Reassessment Report prepared in connection with the issuance of refunding bonds for the Section 29 Assessment District (No. 2004-02); confirming reassessments for such refunding bonds; making other findings in connection therewith; ordering refunding and reassessments; and directing and approving other matters relating thereto; and 3) Resolution No. 2021-31, a Resolution of the City Council of the City of Palm Desert, authorizing the issuance and sale by the City of its Section 29 Assessment District (No. 2004-02) Limited Obligation Refunding Improvement Bonds, Series 2021; approving as to form and authorizing the execution and delivery of certain documents in connection therewith; and approving certain other matters relating thereto. Strategic Plan Approval of the attached resolutions supports the Land Use, Housing and Open Space Priority 2 by achieving interest savings on property assessments that will benefit the June 10, 2021 - Staff Report Adopt Resolution No. 2021-29 Reso of Intent to Issue Refunding Bonds for AD 2004-02 Adopt Resolution No. 2021-30 Reso Approving Reassessment Report Adopt Resolution No. 2021-31 Reso Authorizing Issuance and Sale of Refunding Bonds Page 2 of 4 property owners in the assessment district and may assist in furthering the development of the City's northern section. Executive Summary Approval of the resolutions and attached documents in substantial form, is required in order for the City of Palm Desert to refund the limited obligation improvement bonds of the City's Section 29 Assessment District (No. 2004-02) to provide cost savings to the property owners within the Section 29 Assessment District (the "District"). Background The City, on behalf of the District, issued one series of bonds (debt) in 2007 with a par amount of $29.43 million. The repayment of that debt is a burden that is carried by the property owners within the District boundaries. Currently, $19,830,000 in principal remains outstanding. On September 10, 2020, the Council authorized staff to begin work on the refunding. Similar to the 2007 bonds, the refunding bonds will be limited obligations of the City, payable from and secured by assessments on the properties within the District. The District is located entirely within the City at the northwest corner of Portola Avenue and Gerald Ford Drive and was created to finance the costs associated with the public improvements necessary to develop the area. The area is generally known as the Gateway Area of North Palm Desert. The area is predominantly residential, with some commercial uses along Gerald Ford Drive in the vicinity of the District. Property in the District subject to the lien of the assessments consists of approximately 260 acres, most of which is undeveloped. The property is planned for mixed use development including commercial, multifamily residential and single family residential. In general, and pursuant to the City's Debt Policy, a net present value savings of 3.00% or greater are considered significant. Based on current rates and the credit worthiness of the issue, the Underwriting team has determined that the District has the potential to realize approximately $263,600 in savings to annual debt service payments. In total, refunding the outstanding debt may generate savings of approximately $4.217 million over the life of the bonds. That equates to about $2.189 million net present value savings (or 11.04% NPV savings). The actual extent of the savings is subject to market conditions. The Reassessment Report, prepared by Willdan Financial Services, provides information to support three key requirements for the refunding: (1) annual assessment installment savings for each parcel in the District; (2) no extension on the bond term; and (3) a lower principal amount of the reassessment on each parcel than the remaining unpaid principal amount of the original assessment. Per the attached resolution approving the report, the June 10, 2021 - Staff Report Adopt Resolution No. 2021-29 Reso of Intent to Issue Refunding Bonds for AD 2004-02 Adopt Resolution No. 2021-30 Reso Approving Reassessment Report Adopt Resolution No. 2021-31 Reso Authorizing Issuance and Sale of Refunding Bonds Page 3 of 4 bonds can only be sold if the sale terms result in reassessments that continue to meet these three key requirements, and the report will be finalized once the bonds are sold to reflect the final terms. By approving the Resolution of Issuance, the City Council will be approving the Preliminary Official Statement and other financing documents. Below is a summary of the documents included for approval. D. 'Preliminary Official Statement UMENT WHAT IS DOE The City's offering and disclosure document for the bonds. Includes info regarding the proposed bonds, the District, development status, property ownership, assessment delinquencies, demographic, financial and other information and related investment risks is disclosed by the City to investors in the Preliminary/Final Official Statement. Must contain all material info related to the District that a reasonable investor would consider significant in its investment decision. Bond Purchase Agreement The City sells the bonds to the underwriter for concurrent resale to investors Continuing Disclosure Agreement Fiscal Agent Agreement Listing of info from the Official Statement that the City must update annually and disclose to the bond market during the life of the bonds Governs the terms of the refunding bonds Escrow Agreement Governs the defeasance escrow where the refunding bonds are deposited to redeem the 2007 bonds The final interest rates and terms will be inserted in each of the documents mentioned above, after the bonds are priced. Similar to the 2007 bonds, the refunding bonds will be issued with a reserve fund consisting of debt service for approximately one year, which provides back-up for payment on the bonds if there is a shortfall of assessment revenues. Due to the significant portion of undeveloped property in the District and slow pace of development, the refunding bonds will be issued as nonrated bonds in a public offering through bond underwriter Stifel, Nicolaus & Company, Inc. Investments in the bonds will be a minimum amount of $100,000 to help ensure that the bonds are sold only to investors who are capable of making sizeable investments and more prepared to bear the higher risk. Investors are expected to be institutional investors, such as mutual funds and banks. Approval of the resolutions will meet the requirements of the debt policy and continue the process the refunding of bonds. Following a marketing period in early June, the bonds June 10, 2021 - Staff Report Adopt Resolution No. 2021-29 Reso of Intent to Issue Refunding Bonds for AD 2004-02 Adopt Resolution No. 2021-30 Reso Approving Reassessment Report Adopt Resolution No. 2021-31 Reso Authorizing Issuance and Sale of Refunding Bonds Page 4 of 4 are expected to be sold in late June and issued in mid -July. Fiscal Analysis The table below provides the good faith estimates from the City's financial advisor pursuant to Section 5852.1 of the Government Code: True Annual Finance Charge of Proceeds from Total DS Interest Cost the Bonds' Sale of Bonds2 Payments3 3.403599% $495,951 $16,472,008 $24,113,225 1. The sum of all fees and charges paid to third parties 2. Proceeds from the sale of the bonds, less the finance charge of the bonds described in item (B) and any reserves or capitalized interest paid or funded with proceeds of the bonds. As detailed in the Reassessment Report, the issuance is structured for the refunding of the outstanding principal amounts remaining on the prior 2007 bonds only. No new monies will be issued as part of this transaction. 3. The sum total of all debt service payments on the bonds. The costs of issuance of the refunding bonds will be included and are eligible to be paid from proceeds of the refunding bonds, if and when issued. The savings generated by the refunding will benefit the property owners within AD 2004-02. There is no impact to the City's General Fund from this request. LEGAL REVIEW WLS William L. Strausz Bond Counsel FINANCIAL ASSISTANT DEPT. REVIEW REVIEW CITY MANAGER Yc ,,a'141. 14?oo2e p ,,e�'14?. 141.0o2& Andy Firestine Janet M. Moore Janet M. Moore Andy Firestine Director of Finance Director of Finance Assistant City Manager L. Todd Hileman, City Manager: L. ToOlol I-ti.LCVu,Givv, ATTACHMENTS: Resolution No. 2021-29 Resolution of Intention Resolution No. 2021-30 Resolution approving Reassessment Report Reassessment Report Resolution No. 2021-31 Resolution authorizing Issuance Preliminary Official Statement Bond Purchase Agreement Fiscal Agent Agreement Escrow Agreement RESOLUTION NO. 2021-29 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, DECLARING ITS INTENTION TO ISSUE REFUNDING BONDS FOR THE SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02); DIRECTING THE PREPARATION OF A REPORT PURSUANT TO SECTION 9523 OF THE CALIFORNIA STREETS AND HIGHWAYS CODE; MAKING OTHER DETERMINATIONS RELATING TO THE REFUNDING; AND DIRECTING OTHER MATTERS RELATING THERETO RECITALS: WHEREAS, the City of Palm Desert (the "City") has heretofore formed the Section 29 Assessment District (No. 2004-02) (the "District") and issued its City of Palm Desert, Section 29 Assessment District (No. 2004-02), Limited Obligation Improvement Bonds, Series 2007 (the "Prior Bonds"), of which $19,830,000 in aggregate principal amount remain outstanding; and WHEREAS, in light of currently favorable market conditions, the City has proposed issuing bonds (the "Refunding Bonds") to refund the Prior Bonds pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (the "1984 Refunding Act"), as set forth in Division 11.5 (commencing with Section 9500) of the California Streets and Highway Code (the "Code"); and WHEREAS, such refunding will be beneficial to the public as the amounts required for principal and interest payments each year for the Refunding Bonds are expected to be lower than those for the Prior Bonds; and WHEREAS, the City Council of the City (the "City Council") desires to initiate proceedings to issue the Refunding Bonds pursuant to the terms and provisions of the 1984 Refunding Act; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, FIND, DECLARE AND ORDER AS FOLLOWS: Section 1. Recitals. The above recitals, and each of them, are all true and correct. Section 2. Findinq of Public Interest. Pursuant to Section 9520 of the Code, the City Council hereby finds that public interest requires the refunding of the Prior Bonds, subject to the City Council's review of the Reassessment Report described in Section 4 below. Section 3. Declaration of Intention to Issue Refunding Bonds and Levy Reassessments. Pursuant to Section 9520 of the Code, and subject to the terms and conditions set forth in this Resolution, the City Council hereby declares its intention to (a) issue the Refunding Bonds to refund the remaining outstanding Prior Bonds, and (b) levy -1- RESOLUTION NO. 2021-29 reassessments (the "Reassessments") against parcels in the District as security for the Refunding Bonds. Section 4. Appointment of Reassessment Engineer; Preparation of Reassessment Report. The appointment of Willdan Financial Services as the "Reassessment Engineer" in connection with the above -described refunding is hereby approved. The Reassessment Engineer shall prepare and file with the office of the City Clerk a report (the "Reassessment Report") on the estimated Reassessments to be levied upon the issuance of the Refunding Bonds. The Reassessment Report shall contain (a) all of the information required by Section 9523 of the Code to be contained therein, and (b) such additional information as necessary and appropriate to enable the City Council to make a determination on whether the refunding, as proposed, will satisfy the conditions set forth in clauses (1) through (3) of Section 9525(a) of the Code. Section 5. Limited Obligation of the City. The City shall not be obligated to advance available funds from the City Treasury to cure any deficiency which may occur in the bond redemption funds for the Refunding Bonds. This determination shall be clearly stated in the text of the Refunding Bonds. The designated names of the Refunding Bonds shall include the words "limited obligation refunding improvement bonds." Section 6. Establishment of Special Reserve Funds. Pursuant to Part 16 (commencing with Section 8880) of Division 10 of the Code, there shall be created a special reserve fund for the Refunding Bonds (the "Special Reserve Fund"). The amount of money to be deposited in the Special Reserve Fund (which is not to exceed 10% of the total Reassessments) shall be included in the Reassessments. Section 7. Certain Terms of Refunding Bonds. The Refunding Bonds shall be issued and sold in the manner consistent with the 1984 Refunding Act and the conditions set forth below in this Resolution. Notice is hereby given as follows: (a) The Refunding Bonds shall (i) represent and be secured by unpaid Reassessments, (ii) bear interest at a rate of not exceeding 12 percent per annum, or such other maximum interest rate permitted by law, and (iii) be issued in the manner provided by the 1984 Refunding Act. (b) The last installment of the Refunding Bonds shall mature on September 2nd of a year that is no later than 2037 (i.e., the year of the final maturity for the Prior Bonds). (c) The Refunding Bonds may be issued in the form of serial or term bonds, or a combination thereof. (d) Interest on the Refunding Bonds shall be payable on March 2 and September 2 of each year (each an "Interest Payment Date") during which the Refunding Bonds shall remain outstanding. -2- RESOLUTION NO. 2021-29 Section 8. Determinations Regarding Annual Principal and Interest. With respect to the Refunding Bonds, respectively, the City Council hereby determines that the principal amount of Refunding Bonds maturing or becoming subject to mandatory prior redemption each year shall be other than an amount equal to an even annual proportion of the aggregate principal of such Refunding Bonds. Section 9. Provisions for Redemption. With respect to the Refunding Bonds, the City Council hereby determines as follows: (a) Each Refunding Bond, or any portion thereof in a fixed amount or any integral multiple of the fixed amount, shall be subject to optional redemption in advance of its maturity on any Interest Payment Date upon payment to the registered owner of the principal and accrued interest to the date of redemption, together with a redemption premium. The redemption premium shall be in an amount equal to a percentage (which may be zero percent) of the principal of the Refunding Bonds subject to redemption, as determined in accordance with the resolution(s), indenture(s), fiscal agent agreement(s) or other similar instrument(s) pursuant to which the Refunding Bonds are to be issued; provided, however, that the redemption premium for the first 5 years of the term of the Refunding Bonds shall be in an amount not less than 3 percent of the principal. (b) Notwithstanding the foregoing, to the extent that such Refunding Bonds include one or more term bonds, such term bonds shall be subject to mandatory prior redemption, without premium, through annual sinking fund installments conforming to the requirements of Section 8 of this Resolution. Section 10. Collection of Reassessments and Advance Retirement of Refunding Bonds. Pursuant to Section 8760 of the Code, the City Council hereby proposes to proceed in accordance with Part 11.1 (commencing with Section 8760) of the Code with respect to the collection of the Reassessments and the advance retirement, if any, of the Refunding Bonds. Section 11. Person Designated to Collect Reassessments. The City Council hereby designates the City Treasurer, or an agent designated by the City Treasurer in writing, to collect and receive the Reassessments. Section 12. Original Assessment to Remain in Effect until Refunding Bonds Issuance. All original assessments levied in the District relating to the Prior Bonds shall continue and remain in full force and effect until the Refunding Bonds have been issued by the City pursuant to the provisions of the 1984 Refunding Act and such original assessments have been superseded and supplanted by the Reassessments. Section 13. Determination Regarding Monies Remaining in Improvement Fund. The City Council hereby determines that, pursuant to Section 10427 of the Code, -3- RESOLUTION NO. 2021-29 all monies remaining in the improvement fund with respect to the Prior Bonds, which are approximately $669.83 as of April 23, 2021, are hereby determined to be surplus monies, and the entirety of such remaining monies (plus accrued interest, if any) shall be transferred to the general fund of the City in accordance with, and as further specified in, paragraph (a) of Section 10427 of the Code. Section 14. Other Acts. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to effectuate the purposes of this Resolution and any such actions previously taken by such officers are hereby ratified and confirmed. Section 15. Effective Date. This Resolution shall take effect immediately upon adoption. PASSED, APPROVED and ADOPTED by the City Council of the City of Palm Desert, California, on this 10th day of June, 2021, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ATTEST: M. Gloria Sanchez, Acting City Clerk City of Palm Desert, California Kathleen Kelly, Mayor -4- RESOLUTION NO. 2021-30 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING A REASSESSMENT REPORT PREPARED IN CONNECTION WITH THE ISSUANCE OF REFUNDING BONDS FOR THE SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02); CONFIRMING REASSESSMENTS FOR SUCH REFUNDING BONDS; MAKING OTHER FINDINGS IN CONNECTION THEREWITH; ORDERING REFUNDING AND REASSESSMENTS; AND DIRECTING AND APPROVING OTHER MATTERS RELATING THERETO RECITALS: WHEREAS, the City of Palm Desert (the "City") has heretofore formed the Section 29 Assessment District (No. 2004-02) (the "District") and issued its City of Palm Desert, Section 29 Assessment District (No. 2004-02), Limited Obligation Improvement Bonds, Series 2007 (the "Prior Bonds"), of which $19,830,000 in aggregate principal amount remain outstanding; and WHEREAS, the City Council of the City (the "City Council") has adopted a resolution entitled, "A Resolution of the City Council of the City of Palm Desert, California, Declaring Its Intention to Issue Refunding Bonds for the Section 29 Assessment District (No. 2004-02); Directing the Preparation of Report Pursuant to Section 9523 of the California Streets and Highways Code; Making Other Determinations Relating to the Refunding; and Directing Other Matters Relating Thereto" (the "Resolution of Intention"), and initiated proceedings to refund all of the remaining Prior Bonds pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (the "1984 Refunding Act"), as set forth in Division 11.5 (commencing with Section 9500) of the California Streets and Highways Code (the "Code"); and WHEREAS, in accordance with Section 9523 of the Code, the City Council has ordered Willdan Financial Services (the "Reassessment Engineer") to prepare a report on the reassessments (the "Reassessments") to be levied in connection with the issuance of the refunding bonds (the "Refunding Bonds") for the District; and WHEREAS, the Reassessment Engineer's report, entitled "City of Palm Desert Section 29 Reassessment District No. 2004-02 Reassessment Report, May 24, 2021" (the "Reassessment Report"), has been presented to the City Council and is on file with the City Clerk; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, FIND, DECLARE AND ORDER AS FOLLOWS: correct. Section 1. Recitals. The above recitals, and each of them, are true and -1- RESOLUTION NO. 2021-30 Section 2. Approval of Reassessment Report. The Reassessment Report, in the form presented to the City Council and on file with the City Clerk, is hereby approved. Section 3. Findings Pursuant to Section 9525 of the Code. With respect to the Refunding Bonds, the City Council hereby determines that the following conditions have been satisfied: (a) Each estimated annual installment of principal and interest on the Reassessments, as set forth pursuant to Section 9523(d) of the Code, is Tess than the corresponding annual installment of principal and interest on the portion of the original assessment being superseded and supplanted, as set forth in Section 9523(c) of the Code, by the same percentage for all subdivisions of land within the District. Amounts, if any, added to the annual installments of the Reassessments because of delinquency in payment on the original assessments have not been considered in the calculation supporting this finding. (b) The number of years to maturity of all Refunding Bonds is not more than the number of years to the last maturity of the Prior Bonds. (c) The principal amount of the Reassessment on each subdivision of land within the District is less than the unpaid principal amount of the portion of the original assessment being superseded and supplanted by the same percentage for each subdivision of land within the District. Amounts, if any, added to the Reassessments because of delinquency in payment on the original assessments have not been considered in the calculation supporting this finding. Section 4. Modifications to Reassessment Report. The City Council hereby authorizes the Mayor and the City Manager, or either of them, to approve any necessary or appropriate modifications to the Reassessment Report to reflect changes in the amounts of contribution from existing moneys on hand with respect to the District, and in any other amounts, so long as such modifications would not cause any of the findings set forth in Section 3 of this Resolution (as if made by the City Council after such modifications have been made) to be false. Such Reassessment Report, as modified pursuant to this Section 4, shall stand as the Reassessment Report for the purposes of these proceedings relating to the issuance of the Refunding Bonds. Section 5. Confirmation of Reassessments. The public interest requires, and the City Council hereby orders, the refunding and reassessments for the District to be done and completed as described in and in accordance with the 1984 Refunding Act, the Resolution of Intention, this Resolution and the Reassessment Report. The reassessments for the Refunding Bonds and the contribution from the existing funds of the District, set forth in the Reassessment Report, are hereby approved and confirmed, -2- RESOLUTION NO. 2021-30 and a copy of this Resolution shall be entered upon the minutes of this meeting of the City Council. Section 6. Authorization for Issuance of Refunding Bonds. The City Council hereby authorizes the issuance and sale of the Refunding Bonds to represent all unpaid Reassessments. The Refunding Bonds shall be issued in accordance with the provisions of the 1984 Refunding Act and the terms of the Refunding Bonds (including, but not limited to, interest rates, redemption provisions and maturity) shall be consistent with the parameters set forth in the Resolution of Intention. Section 7. Incorporation of District Maps; Omission of Certain Parcels from Reassessments. The properties within the District will benefit by the refunding and reassessment contemplated hereby and shall be assessed to pay the costs and expenses thereof, including installments of principal and interest on the Refunding Bonds. The exterior boundaries of the District are shown on the map on file with the City Clerk and approved by the City Council on January 25, 2007, by Resolution No. 07-4B. Such map is incorporated into this Resolution by this reference. Section 8. Recordation of Reassessments and Reassessment Diagram. The Reassessments provided for herein, together with the reassessment diagram related thereto, as set forth in the Reassessment Report are hereby approved and confirmed as the reassessments and reassessment diagram of the properties to be reassessed in the District in these proceedings. The final reassessments thereof shall immediately be recorded in the office of the Superintendent of Streets, which (as appointed and designated in the formation proceedings for the District) is the Director of Public Works of the City. Immediately thereafter, a copy of the reassessment diagram shall be filed in the office of the County Recorder and a Notice of Reassessment relating thereto, referencing such diagram, shall be recorded in the office of the County Recorder, all pursuant to the provisions of Division 4.5 (commencing with Section 3100, and specifically Section 3114) of the Code. Upon recordation, the reassessments shall become liens upon the various parcels of land assessed as shown on the reassessment diagram. Section 9. Records and Collections of Reassessment Payments. A copy of this Resolution confirming the Reassessments authorized hereunder (which reassessments shall constitute the security for the Refunding Bonds) shall be filed in the office of the City Treasurer, and the City Treasurer shall keep the record showing the several installments of principal and interest on the reassessments that are to be collected each year during the term of the Refunding Bonds. An annual portion of each reassessment, together with annual interest on such reassessment, shall be payable in the same manner and at the same time and in the same installments as the general property taxes of the City and shall be payable and become delinquent at the same time and in the same proportionate amount. Each year the annual installments shall be submitted to the County Auditor for purposes of collection, and the County Auditor shall, at the close of the tax collecting season, promptly render to the City Treasurer a detailed report showing the amount of such installments, interest, penalties and percentages so collected. -3- RESOLUTION NO. 2021-30 Section 10. Other Acts. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things that they may deem necessary or advisable in order to effectuate the purposes of this Resolution and any such actions previously taken by such officers are hereby ratified and confirmed. Section 11. Effective Date. This Resolution shall take effect immediately upon adoption. PASSED, APPROVED and ADOPTED by the City Council of the City of Palm Desert, California, on this 10th day of June, 2021, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ATTEST: M. Gloria Sanchez, Acting City Clerk City of Palm Desert, California Kathleen Kelly, Mayor -4- r3 PALM DESERT City of Palm Desert Section 29 Reassessment District No. 2004-02 REASSESSMENT REPORT May 24, 2021 27368 Via Industria Suite 200 Temecula, CA 92590 T 951.587.3500 1800.755.6864 F 951.587.3510 www.willdan.com/financial WWILLDAN 11W I LLDAN CITY OF PALM DESERT Section 29 Reassessment District No. 2004-02 REASSESSMENT REPORT Division 11.5, Streets & Highways Code of the State of California ITEM PAGE NO Reassessment 2 Cost Estimate 4 Refunding Bonds 5 Reassessment Roll 6 Comparison of the Auditor's Records for the Existing Bonds and the 2021 Refunding Bonds 25 Method of Reassessment 41 Certifications 42 Reassessment Diagram 43 11W I LLDAN CITY OF PALM DESERT Section 29 Reassessment District No. 2004-02 Overview The City of Palm Desert Section 29 Reassessment District No. 2004-02 consists of 777 assessed parcels. The reassessments, the underlying bonds and the proposed refunding bonds are analyzed in this Section 29 Reassessment District No. 2004-02 Reassessment Report. 1 11W I LLDAN CITY OF PALM DESERT Section 29 Reassessment District No. 2004-02 Reassessment WHEREAS, on May 27, 2021, the City Council of the City of Palm Desert, California, pursuant to the provisions of the Refunding Act of 1984 for 1915 Improvement Act Bonds (the "Act"), adopted its Resolution of Intention No. for the Reassessment of the real property within the boundaries of the City's Section 29 Assessment District No. 2004-02 (the "District") and for the refunding of the outstanding principal amounts of certain improvement bonds (the "Prior Bonds") of the City, all as more particularly described in the Resolution of Intention, and to pay the costs of said reassessment refunding; and WHEREAS, said Resolution directed the undersigned to make and file a report presenting a schedule setting forth the unpaid principal and interest of the Prior Bonds to be refunded and the total amounts thereof, the total estimated principal amount of the reassessment and of the refunding bonds and the maximum interest thereon, together with an estimate of the cost of the reassessment and of issuing the refunding bonds, the auditor's record showing the schedule of principal installments and interest on all unpaid original assessments and reassessments and the total amounts thereof, the estimated amount of each reassessment, identified by reassessment number corresponding to the reassessment number of the reassessment diagram, together with a proposed auditor's record for the reassessment, and reassessment diagram showing the assessment and reassessment district and the boundaries and dimensions of the subdivisions of land within the district. Each subdivision, including each separate condominium interest as defined in Section 783 of the Civil Code, shall be given a separate number upon the diagram to which Resolution reference is hereby made for further particulars; NOW THEREFORE, the undersigned, by virtue of the power vested in me under the Act and the order of the Council of said City, hereby proposes the following reassessment as security for the refunding bonds. The amount to be paid for said refunding, together with the expenses incidental thereto, and the reassessment balance are set forth herein. And I do hereby reassess and apportion said portion of said total amount of the cost and expenses of said reassessment and refunding upon the several lots, pieces or parcels or portions of lots or subdivisions of land liable therefore and benefited thereby, and hereinafter numbered to correspond with the numbers upon the attached diagram, upon each, severally and respectively, and more particularly set forth in the list hereto attached and by reference made a part hereof. 2 WWI LLDAN CITY OF PALM DESERT Section 29 Reassessment District No. 2004-02 As required by the Act, a diagram is hereto attached showing the District and also the boundaries and dimensions of the respective subdivisions of land within said District as the same existed at the time of the passage of the Resolution of Intention, each of which subdivisions having been given a separate number upon said diagram. Said reassessment is made upon the several subdivisions of land within said District in proportion to the scheduled unpaid principal amount of the original assessment and reassessment recorded as a lien against each said subdivision of land. Delinquent assessment and reassessment installments are not included. The diagram and reassessment numbers appearing herein are the diagram numbers appearing on said diagram, to which reference is hereby made for a more particular description of said property. Each subdivision of land reassessed is described in the reassessment list by reference to its parcel number as shown on the Assessor's Maps of the County of Riverside for the fiscal year 2020-2021 and includes all of such parcels. For a more particular description of said property, reference is hereby made to the deeds and maps on file and of record in the office of the County Recorder of said County. Notice is hereby given that refunding bonds to represent unpaid reassessments and bearing interest at the rate of not to exceed twelve percent (12%) per annum, or such higher rate of interest as may be authorized by applicable law at the time of sale of such bonds, will be issued thereunder in the manner provided by Chapter 3 of Division 11.5 of the Streets and Highways Code, the Refunding Act of 1984 for 1915 Improvement Act Bonds, and the last installment of such refunding bonds shall mature on September 2, 2037. Dated as of , 2021 Willdan Financial Services By Mark Risco President and CEO 3 CITY OF PALM DESERT Section 29 Reassessment District No. 2004-02 Cost Estimate Dated Date Delivery Date Sourc es: Bond Proceeds: Par Amount Premium 07/15/2021 07/15/2021 Other Sources of Funds: Prior Reserve Fund Prior Redemption Fund Prior Assessment Fund Prior Assessments for 9/2/21 DS Payment Remaining Funds from April Collection Uses: Refunding Escrow Deposits: Cash Deposit SLGS Purchases 17,915,000.00 676,665.85 18,591,665.85 1,774,51 1.96 4.37 5.66 1,266,761.25 818,470.10 3,859,753.34 22,451,419.19 0.25 20,331,761.00 20,331,761.25 Other Fund Deposits: Debt S ervice Reserve Fund 1,621,717.50 Delivery Date Expenses: Cost of Issuance U nderwnter's Discount 300,000.00 197,065 00 497,065.00 Other Uses of Funds: Contingency 87544 22,451,419.19 WWILLDAN 4 Bond Component Serial Bond: Term Bond (2026) Term Bond (2031): Term Bond (2037) WW I LLDAN CITY OF PALM DESERT Section 29 Reassessment District No. 2004-02 Refunding Bonds Maturity Yield to Call Call Date Amount Rate -1 Price Maturity Data Price 09/02/2022 710,000 3.850% 1.990% 102.180 09102/2023 850,000 3.850% 3.470% 101.768 09/02/2024 880,000 3.850% 3.470% 101.768 09102/2025 915,000 3.850% 3.470% 101.768 09/02/2026 945,000 3.850% 3.470% 101.768 3,590,000 09/02/2027 985,000 4.350% 3.990% 102.971 09/02/2028 1,025,000 4.350% 3.990% 102.971 09/02/2029 1,070,000 4.350% 3.990% 102.971 09/02/2030 1,120,000 4.350% 3.990% 102.971 09/02/2031 1,165,000 4.350% 3.990% 102.971 5,365,000 09/02/2032 1,220,000 4.850% 4.200% 105.313 C 4.387% 09/02/2031 100.000 09/02/2033 1,275,000 4.850% 4.200% 105.313 C 4.387% 09/02/2031 100.000 09/02/2034 1,335,000 4.850% 4.200% 105.313 C 4.387% 09/02/2031 100.000 09/02/2035 1,405,000 4.850% 4.200% 105.313 C 4.387% 09/02/2031 100.000 09/02/2036 1,475,000 4.850% 4.200% 105.313 C 4.387% 09/02/2031 100.000 09/02/2037 1,540,000 4.850% 4.200% 105.313 C 4.387% 09/02/2031 100.000 8,250,000 17,915,000 5 11W I LLDAN CITY OF PALM DESERT Section 29 Reassessment District No. 2004-02 Reassessment Roll City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-130-016 1 $1,407,674.60 694-130-017 2 $1,082,826.62 694-130-018 3 $557,315.29 694-130-021 4 $3,293,250.02 694-130-022 5 $1,179,393.41 694-140-001 6 $16,929.66 694-140-002 7 $16,929.66 694-140-003 8 $16,929.66 694-140-004 9 $16,929.66 694-140-005 10 $16,929.66 694-140-006 11 $16,929.66 694-140-007 12 $16,929.66 694-140-008 13 $16,929.66 694-140-009 14 $16,929.66 694-140-010 15 $16,929.66 694-140-011 16 $16,929.66 694-140-012 17 $16,929.66 694-140-013 18 $16,929.66 694-140-014 19 $16,929.66 694-140-015 20 $16,929.66 694-140-016 21 $16,929.66 694-140-017 22 $16,929.66 694-140-018 23 $16,929.66 694-140-019 24 $16,929.66 694-140-020 25 $16,929.66 694-140-021 26 $16,929.66 694-140-022 27 $16,929.66 694-140-023 28 $16,929.66 694-140-024 29 $16,929.66 694-140-025 30 $16,929.66 694-140-026 31 $16,929.66 694-140-027 32 $16,929.66 694-140-028 33 $16,929.66 694-140-029 34 $16,929.66 694-140-030 35 $16,929.66 694-140-031 36 $16,929.66 694-140-032 37 $16,929.66 694-140-033 38 $16,929.66 694-140-034 39 $16,929.66 694-140-035 40 $16,929.66 694-140-036 41 $16,929.66 694-140-037 42 $16,929.66 694-140-038 43 $16,929.66 694-140-039 44 $16,929.66 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-140-040 45 $16,929.66 694-140-041 46 $16,929.66 694-140-042 47 $16,929.66 694-140-043 48 $16,929.66 694-140-044 49 $16,929.66 694-140-045 50 $16,929.66 694-140-046 51 $16,929.66 694-140-047 52 $16,929.66 694-140-048 53 $16,929.66 694-140-049 54 $16,929.66 694-140-050 55 $16,929.66 694-140-051 56 $16,929.66 694-140-052 57 $16,929.66 694-140-053 58 $16,929.66 694-140-054 59 $16,929.66 694-140-055 60 $16,929.66 694-140-056 61 $16,929.66 694-140-057 62 $16,929.66 694-140-058 63 $16,929.66 694-140-059 64 $16,929.66 694-140-060 65 $16,929.66 694-140-061 66 $16,929.66 694-140-062 67 $16,929.66 694-140-063 68 $16,929.66 694-140-064 69 $16,929.66 694-140-065 70 $16,929.66 694-140-066 71 $16,929.66 694-140-067 72 $16,929.66 694-140-068 73 $16,929.66 694-140-069 74 $16,929.66 694-140-070 75 $16,929.66 694-140-071 76 $16,929.66 694-140-072 77 $16,929.66 694-140-073 78 $16,929.66 694-140-074 79 $16,929.66 694-140-075 80 $16,929.66 694-140-076 81 $16,929.66 694-150-001 82 $16,929.66 694-150-002 83 $16,929.66 694-150-003 84 $16,929.66 694-150-004 85 $16,929.66 694-150-005 86 $16,929.66 694-150-006 87 $16,929.66 694-150-007 88 $16,929.66 8 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-150-008 89 $16,929.66 694-150-009 90 $16,929.66 694-150-010 91 $16,929.66 694-150-011 92 $16,929.66 694-150-012 93 $16,929.66 694-150-013 94 $16,929.66 694-150-014 95 $16,929.66 694-150-015 96 $16,929.66 694-150-016 97 $16,929.66 694-150-017 98 $16,929.66 694-150-018 99 $16,929.66 694-150-019 100 $16,929.66 694-150-020 101 $16,929.66 694-150-021 102 $16,929.66 694-150-022 103 $16,929.66 694-150-023 104 $16,929.66 694-150-024 105 $16,929.66 694-150-025 106 $16,929.66 694-150-026 107 $16,929.66 694-150-027 108 $16,929.66 694-150-028 109 $16,929.66 694-150-029 110 $16,929.66 694-150-030 111 $16,929.66 694-150-031 112 $16,929.66 694-150-032 113 $16,929.66 694-150-033 114 $16,929.66 694-150-034 115 $16,929.66 694-150-035 116 $16,929.66 694-150-036 117 $16,929.66 694-150-037 118 $16,929.66 694-150-038 119 $16,929.66 694-150-039 120 $16,929.66 694-150-040 121 $16,929.66 694-150-041 122 $16,929.66 694-150-042 123 $16,929.66 694-150-043 124 $16,929.66 694-150-044 125 $16,929.66 694-150-045 126 $16,929.66 694-150-046 127 $16,929.66 694-150-047 128 $16,929.66 694-150-048 129 $16,929.66 694-150-049 130 $16,929.66 694-150-050 131 $16,929.66 694-150-051 132 $16,929.66 9 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-150-052 133 $16,929.66 694-150-053 134 $16,929.66 694-150-054 135 $16,929.66 694-150-055 136 $16,929.66 694-150-056 137 $16,929.66 694-150-057 138 $16,929.66 694-150-058 139 $16,929.66 694-150-059 140 $16,929.66 694-150-060 141 $16,929.66 694-150-061 142 $16,929.66 694-150-062 143 $16,929.66 694-150-063 144 $16,929.66 694-150-064 145 $16,929.66 694-150-065 146 $16,929.66 694-150-066 147 $16,929.66 694-150-067 148 $16,929.66 694-150-068 149 $16,929.66 694-150-069 150 $16,929.66 694-150-070 151 $16,929.66 694-150-071 152 $16,929.66 694-150-072 153 $16,929.66 694-150-073 154 $16,929.66 694-150-074 155 $16,929.66 694-150-075 156 $16,929.66 694-150-076 157 $16,929.66 694-150-077 158 $16,929.66 694-150-078 159 $16,929.66 694-150-079 160 $16,929.66 694-150-080 161 $16,929.66 694-150-081 162 $16,929.66 694-150-082 163 $16,929.66 694-150-083 164 $16,929.66 694-250-001 165 $14,857.19 694-250-002 166 $14,857.19 694-250-003 167 $14,857.19 694-250-007 168 $14,857.19 694-250-008 169 $14,857.18 694-250-009 170 $14,857.18 694-250-010 171 $14,857.18 694-250-011 172 $14,857.18 694-250-012 173 $14,857.18 694-250-013 174 $14,857.18 694-250-014 175 $14,857.18 694-250-015 176 $14,857.18 10 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-250-016 177 $14,857.18 694-250-017 178 $14,857.18 694-250-018 179 $14,857.18 694-250-019 180 $14,857.18 694-250-020 181 $14,857.18 694-250-021 182 $14,857.18 694-250-022 183 $14,857.18 694-250-023 184 $14,857.18 694-250-024 185 $14,857.18 694-250-025 186 $14,857.18 694-250-026 187 $14,857.18 694-250-027 188 $14,857.18 694-250-028 189 $14,857.18 694-250-029 190 $14,857.18 694-250-030 191 $14,857.18 694-250-031 192 $14,857.18 694-250-032 193 $14,857.18 694-250-033 194 $14,857.18 694-250-034 195 $14,857.18 694-250-035 196 $14,857.18 694-250-036 197 $14,857.18 694-250-037 198 $14,857.18 694-250-038 199 $14,857.18 694-250-039 200 $14,857.18 694-250-040 201 $14,857.18 694-250-041 202 $14,857.18 694-250-042 203 $14,857.18 694-250-043 204 $14,857.18 694-250-044 205 $14,857.18 694-250-045 206 $14,857.18 694-250-046 207 $14,857.18 694-250-047 208 $14,857.18 694-250-048 209 $14,857.18 694-250-049 210 $14,857.18 694-250-050 211 $14,857.18 694-250-051 212 $14,857.18 694-250-052 213 $14,857.18 694-260-001 214 $14,857.18 694-260-002 215 $14,857.18 694-260-003 216 $14,857.18 694-260-004 217 $14,857.18 694-260-005 218 $14,857.18 694-260-006 219 $14,857.18 694-260-007 220 $14,857.18 11 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-260-008 221 $14,857.18 694-260-009 222 $14,857.18 694-260-010 223 $14,857.18 694-260-011 224 $14,857.18 694-260-012 225 $14,857.18 694-260-013 226 $14,857.18 694-260-014 227 $14,857.18 694-260-015 228 $14,857.18 694-260-016 229 $14,857.18 694-260-017 230 $14,857.18 694-260-018 231 $14,857.18 694-260-019 232 $14,857.18 694-260-020 233 $14,857.18 694-260-021 234 $14,857.18 694-260-022 235 $14,857.18 694-260-023 236 $14,857.18 694-260-024 237 $14,857.18 694-260-025 238 $14,857.18 694-260-026 239 $14,857.18 694-260-027 240 $14,857.18 694-260-028 241 $14,857.18 694-260-029 242 $14,857.18 694-260-030 243 $14,857.18 694-260-031 244 $14,857.18 694-260-032 245 $14,857.18 694-260-033 246 $14,857.18 694-260-034 247 $14,857.18 694-260-035 248 $14,857.18 694-260-036 249 $14,857.18 694-260-037 250 $14,857.18 694-260-038 251 $14,857.18 694-260-039 252 $14,857.18 694-260-040 253 $14,857.18 694-260-041 254 $14,857.18 694-260-042 255 $14,857.18 694-260-043 256 $14,857.18 694-260-049 257 $14,857.18 694-260-050 258 $14,857.18 694-260-051 259 $14,857.18 694-260-052 260 $14,857.18 694-260-053 261 $14,857.18 694-260-054 262 $14,857.18 694-260-055 263 $14,857.18 694-260-056 264 $14,857.18 12 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-260-057 265 $14,857.18 694-260-058 266 $14,857.18 694-260-059 267 $14,857.18 694-260-060 268 $14,857.18 694-260-061 269 $14,857.18 694-260-062 270 $14,857.18 694-260-063 271 $14,857.18 694-270-002 272 $14,857.18 694-270-003 273 $14,857.18 694-270-004 274 $14,857.18 694-270-005 275 $14,857.18 694-270-006 276 $14,857.18 694-270-007 277 $14,857.18 694-270-008 278 $14,857.18 694-270-009 279 $14,857.18 694-270-010 280 $14,857.18 694-270-011 281 $14,857.18 694-270-012 282 $14,857.18 694-270-013 283 $14,857.18 694-270-014 284 $14,857.18 694-270-015 285 $14,857.18 694-270-016 286 $14,857.18 694-270-017 287 $14,857.18 694-270-018 288 $14,857.18 694-270-019 289 $14,857.18 694-270-020 290 $14,857.18 694-270-026 291 $15,219.55 694-270-027 292 $15,219.55 694-270-028 293 $15,219.55 694-270-029 294 $15,219.55 694-270-030 295 $15,219.55 694-270-031 296 $15,219.55 694-270-032 297 $15,219.55 694-270-033 298 $15,219.55 694-270-034 299 $15,219.55 694-270-035 300 $15,219.55 694-270-036 301 $15,219.55 694-270-037 302 $15,219.55 694-270-038 303 $15,219.55 694-270-039 304 $15,219.55 694-270-040 305 $15,219.55 694-270-041 306 $15,219.55 694-270-042 307 $15,219.55 694-270-043 308 $15,219.55 13 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-270-044 309 $15,219.55 694-270-045 310 $15,219.55 694-270-046 311 $15,219.55 694-270-047 312 $15,219.55 694-270-048 313 $15,219.55 694-270-049 314 $15,219.55 694-270-050 315 $15,219.55 694-270-051 316 $15,219.55 694-270-052 317 $15,219.55 694-270-053 318 $15,219.55 694-270-054 319 $15,219.55 694-270-055 320 $15,219.55 694-270-056 321 $15,219.55 694-270-057 322 $15,219.55 694-270-058 323 $15,219.55 694-270-059 324 $15,219.55 694-270-060 325 $15,219.55 694-270-061 326 $15,219.55 694-270-062 327 $15,219.55 694-270-063 328 $15,219.55 694-270-064 329 $15,219.55 694-270-065 330 $15,219.55 694-270-066 331 $15,219.55 694-280-002 332 $14,857.18 694-280-003 333 $14,857.18 694-280-004 334 $14,857.18 694-280-005 335 $14,857.18 694-280-006 336 $14,857.18 694-280-007 337 $14,857.18 694-280-008 338 $14,857.18 694-280-009 339 $14,857.18 694-280-010 340 $14,857.18 694-280-011 341 $14,857.18 694-280-013 342 $14,857.18 694-280-014 343 $14,857.18 694-280-018 344 $14,857.18 694-280-019 345 $14,857.18 694-280-020 346 $14,857.18 694-280-021 347 $14,857.18 694-280-022 348 $14,857.18 694-280-023 349 $14,857.18 694-280-024 350 $14,857.18 694-280-025 351 $14,857.18 694-280-026 352 $14,857.18 14 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-280-027 353 $14,857.18 694-280-028 354 $14,857.18 694-280-029 355 $14,857.18 694-280-030 356 $14,857.18 694-280-031 357 $14,857.18 694-280-032 358 $14,857.18 694-280-033 359 $14,857.18 694-280-034 360 $14,857.18 694-280-035 361 $14,857.18 694-280-036 362 $14,857.18 694-280-047 363 $14,553.98 694-280-048 364 $14,553.98 694-280-049 365 $14,553.98 694-280-050 366 $14,553.98 694-280-051 367 $14,553.98 694-280-052 368 $14,553.98 694-280-053 369 $14,553.98 694-280-054 370 $14,553.98 694-280-055 371 $14,553.98 694-280-056 372 $14,553.98 694-421-001 373 $6,946.52 694-421-002 374 $6,946.52 694-421-003 375 $6,946.52 694-421-004 376 $6,946.52 694-421-005 377 $6,946.52 694-421-006 378 $6,946.52 694-421-007 379 $6,946.52 694-421-008 380 $6,946.52 694-421-009 381 $6,946.52 694-421-010 382 $6,946.52 694-421-011 383 $6,946.52 694-421-012 384 $6,946.52 694-421-013 385 $6,946.52 694-421-014 386 $6,946.52 694-421-015 387 $6,946.52 694-421-016 388 $6,946.52 694-421-017 389 $6,946.52 694-421-018 390 $6,946.52 694-421-019 391 $6,946.52 694-421-020 392 $6,946.52 694-421-021 393 $6,946.52 694-421-022 394 $6,946.52 694-421-023 395 $6,946.52 694-421-024 396 $6,946.52 15 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-421-025 397 $6,946.52 694-421-026 398 $6,946.52 694-421-027 399 $6,946.52 694-421-028 400 $6,946.52 694-421-029 401 $6,946.52 694-421-030 402 $6,946.52 694-421-031 403 $6,946.52 694-421-032 404 $6,946.52 694-422-001 405 $6,946.52 694-422-002 406 $6,946.52 694-422-003 407 $6,946.52 694-422-004 408 $6,946.52 694-422-005 409 $6,946.52 694-422-006 410 $6,946.52 694-422-007 411 $6,946.52 694-422-008 412 $6,946.52 694-422-009 413 $6,946.52 694-422-010 414 $6,946.52 694-422-011 415 $6,946.52 694-422-012 416 $6,946.52 694-422-013 417 $6,946.52 694-422-014 418 $6,946.52 694-422-015 419 $6,946.52 694-422-016 420 $6,946.52 694-422-017 421 $6,946.52 694-422-018 422 $6,946.52 694-422-019 423 $6,946.52 694-422-020 424 $6,946.52 694-422-021 425 $6,946.52 694-422-022 426 $6,946.52 694-422-023 427 $6,946.52 694-422-024 428 $6,946.52 694-423-001 429 $6,946.52 694-423-002 430 $6,946.52 694-423-003 431 $6,946.52 694-423-004 432 $6,946.52 694-423-005 433 $6,946.52 694-423-006 434 $6,946.52 694-423-007 435 $6,946.52 694-423-008 436 $6,946.52 694-423-009 437 $6,946.52 694-423-010 438 $6,946.52 694-423-011 439 $6,946.52 694-423-012 440 $6,946.52 16 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-423-013 441 $6,946.52 694-423-014 442 $6,946.52 694-423-015 443 $6,946.52 694-423-016 444 $6,946.52 694-423-017 445 $6,946.52 694-423-018 446 $6,946.52 694-423-019 447 $6,946.52 694-423-020 448 $6,946.52 694-423-021 449 $6,946.52 694-423-022 450 $6,946.52 694-423-023 451 $6,946.52 694-423-024 452 $6,946.52 694-423-025 453 $6,946.52 694-423-026 454 $6,946.52 694-423-027 455 $6,946.52 694-423-028 456 $6,946.52 694-423-030 457 $6,946.52 694-423-031 458 $6,946.52 694-423-032 459 $6,946.52 694-423-033 460 $6,946.52 694-423-034 461 $6,946.52 694-423-035 462 $6,946.52 694-423-036 463 $6,946.52 694-423-037 464 $6,946.52 694-423-038 465 $6,946.52 694-423-039 466 $6,946.52 694-423-040 467 $6,946.52 694-423-041 468 $6,946.52 694-423-042 469 $6,946.52 694-423-043 470 $6,946.52 694-423-044 471 $6,946.52 694-423-045 472 $6,946.52 694-423-046 473 $6,946.52 694-423-047 474 $6,946.52 694-423-048 475 $6,946.52 694-423-049 476 $6,946.52 694-423-050 477 $6,946.52 694-423-051 478 $6,946.52 694-423-052 479 $6,946.52 694-423-053 480 $6,946.52 694-423-054 481 $6,946.52 694-423-055 482 $6,946.52 694-423-056 483 $6,946.52 694-423-057 484 $6,946.52 17 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-423-058 485 $6,946.52 694-423-059 486 $6,946.52 694-423-060 487 $6,946.52 694-423-061 488 $6,946.52 694-423-062 489 $6,946.52 694-423-063 490 $6,946.52 694-423-064 491 $6,946.52 694-423-065 492 $6,946.52 694-423-066 493 $6,946.52 694-423-067 494 $6,946.52 694-423-068 495 $6,946.52 694-423-069 496 $6,946.52 694-423-070 497 $6,946.52 694-423-071 498 $6,946.52 694-423-072 499 $6,946.52 694-423-073 500 $6,946.52 694-423-074 501 $6,946.52 694-423-075 502 $6,946.52 694-423-076 503 $6,946.52 694-423-077 504 $6,946.52 694-423-078 505 $6,946.52 694-423-079 506 $6,946.52 694-423-080 507 $6,946.52 694-423-081 508 $6,946.52 694-423-082 509 $6,946.52 694-423-083 510 $6,946.52 694-423-084 511 $6,946.52 694-423-085 512 $6,946.52 694-423-086 513 $6,946.52 694-423-087 514 $6,946.52 694-423-088 515 $6,946.52 694-423-089 516 $6,946.52 694-424-001 517 $6,946.52 694-424-002 518 $6,946.52 694-424-003 519 $6,946.52 694-424-004 520 $6,946.52 694-424-005 521 $6,946.52 694-424-006 522 $6,946.52 694-424-008 523 $6,946.52 694-424-009 524 $6,946.52 694-424-010 525 $6,946.52 694-424-011 526 $6,946.52 694-424-012 527 $6,946.52 694-424-014 528 $6,946.52 18 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-424-015 529 $6,946.52 694-424-016 530 $6,946.52 694-424-017 531 $6,946.52 694-424-019 532 $6,946.52 694-424-020 533 $6,946.52 694-424-021 534 $6,946.52 694-424-022 535 $6,946.52 694-424-024 536 $6,946.52 694-424-025 537 $6,946.52 694-424-026 538 $6,946.52 694-424-027 539 $6,946.52 694-425-001 540 $6,946.52 694-425-002 541 $6,946.52 694-425-003 542 $6,946.52 694-425-004 543 $6,946.52 694-425-005 544 $6,946.52 694-425-006 545 $6,946.52 694-425-007 546 $6,946.52 694-425-008 547 $6,946.52 694-425-009 548 $6,946.52 694-425-010 549 $6,946.52 694-425-011 550 $6,946.52 694-425-012 551 $6,946.52 694-425-013 552 $6,946.52 694-425-014 553 $6,946.52 694-425-015 554 $6,946.52 694-425-016 555 $6,946.52 694-425-017 556 $6,946.52 694-425-018 557 $6,946.52 694-425-019 558 $6,946.52 694-425-020 559 $6,946.52 694-425-021 560 $6,946.52 694-425-022 561 $6,946.52 694-425-023 562 $6,946.52 694-425-024 563 $6,946.52 694-425-025 564 $6,946.52 694-425-026 565 $6,946.52 694-425-027 566 $6,946.52 694-425-028 567 $6,946.52 694-425-029 568 $6,946.52 694-425-030 569 $6,946.52 694-425-031 570 $6,946.52 694-425-032 571 $6,946.52 694-425-033 572 $6,946.52 19 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-425-034 573 $6,946.52 694-425-035 574 $6,946.52 694-425-036 575 $6,946.52 694-425-037 576 $6,946.52 694-425-038 577 $6,946.52 694-425-039 578 $6,946.52 694-425-040 579 $6,946.52 694-425-041 580 $6,946.52 694-425-042 581 $6,946.52 694-425-043 582 $6,946.52 694-425-044 583 $6,946.52 694-425-045 584 $6,946.52 694-425-046 585 $6,946.52 694-425-047 586 $6,946.52 694-425-048 587 $6,946.52 694-425-049 588 $6,946.52 694-425-050 589 $6,946.52 694-425-051 590 $6,946.52 694-425-052 591 $6,946.52 694-425-053 592 $6,946.52 694-425-054 593 $6,946.52 694-425-055 594 $6,946.52 694-425-056 595 $6,946.52 694-425-058 596 $6,946.52 694-425-059 597 $6,946.52 694-425-060 598 $6,946.52 694-425-061 599 $6,946.52 694-425-062 600 $6,946.52 694-425-063 601 $6,946.52 694-425-064 602 $6,946.52 694-425-065 603 $6,946.52 694-425-066 604 $6,946.52 694-425-067 605 $6,946.52 694-425-068 606 $6,946.52 694-425-069 607 $6,946.52 694-425-070 608 $6,946.52 694-425-071 609 $6,946.52 694-425-072 610 $6,946.52 694-425-073 611 $6,946.52 694-425-074 612 $6,946.52 694-425-075 613 $6,946.52 694-425-076 614 $6,946.52 694-425-077 615 $6,946.52 694-425-078 616 $6,946.52 20 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-425-079 617 $6,946.52 694-425-080 618 $6,946.52 694-425-081 619 $6,946.52 694-440-001 620 $14,857.18 694-440-002 621 $14,857.18 694-440-003 622 $14,857.18 694-440-004 623 $14,857.18 694-440-005 624 $14,857.18 694-440-006 625 $14,857.18 694-440-007 626 $14,857.18 694-440-010 627 $14,553.98 694-440-011 628 $14,553.98 694-440-012 629 $14,553.98 694-440-013 630 $14,553.98 694-440-014 631 $14,553.98 694-440-015 632 $14,553.98 694-440-016 633 $14,553.98 694-440-017 634 $14,553.98 694-440-018 635 $14,553.98 694-440-019 636 $14,553.98 694-440-020 637 $14,553.98 694-440-021 638 $14,553.98 694-440-022 639 $14,553.98 694-440-023 640 $14,553.98 694-440-024 641 $14,553.98 694-440-025 642 $14,553.98 694-440-026 643 $14,553.98 694-440-027 644 $14,553.98 694-440-028 645 $14,553.98 694-440-029 646 $14,553.98 694-440-030 647 $14,553.98 694-440-031 648 $14,553.98 694-440-032 649 $14,553.98 694-440-033 650 $14,553.98 694-440-034 651 $14,553.98 694-440-035 652 $14,553.98 694-440-036 653 $14,553.98 694-440-037 654 $14,553.98 694-440-038 655 $14,553.98 694-440-039 656 $14,553.98 694-440-040 657 $14,553.98 694-440-041 658 $14,553.98 694-440-042 659 $14,553.98 694-440-043 660 $14,553.98 21 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-440-044 661 $14,553.98 694-440-045 662 $14,553.98 694-440-046 663 $14,553.98 694-440-047 664 $14,553.98 694-440-048 665 $14,553.98 694-490-001 666 $15,369.50 694-490-002 667 $15,369.50 694-490-003 668 $15,369.50 694-490-004 669 $15,369.50 694-490-005 670 $15,369.50 694-490-006 671 $15,369.50 694-490-007 672 $15,369.50 694-490-008 673 $15,369.50 694-490-009 674 $15,369.50 694-490-010 675 $15,369.50 694-490-011 676 $15,369.50 694-490-012 677 $15,369.50 694-490-013 678 $15,369.50 694-490-014 679 $15,369.50 694-490-015 680 $15,369.50 694-490-016 681 $15,369.50 694-490-017 682 $15,369.50 694-490-018 683 $15,369.50 694-490-019 684 $15,369.50 694-490-020 685 $15,369.50 694-490-021 686 $15,369.50 694-490-022 687 $15,369.50 694-490-023 688 $15,369.50 694-490-024 689 $15,369.50 694-490-025 690 $15,369.50 694-490-026 691 $15,369.50 694-490-027 692 $15,369.50 694-490-028 693 $15,369.50 694-490-029 694 $15,369.50 694-490-030 695 $15,369.50 694-490-031 696 $15,369.50 694-490-032 697 $15,369.50 694-490-033 698 $15,369.50 694-490-034 699 $15,369.50 694-490-036 700 $15,369.50 694-490-037 701 $15,369.50 694-490-038 702 $15,369.50 694-490-039 703 $15,369.50 694-490-040 704 $15,369.50 22 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-490-041 705 $15,369.50 694-490-042 706 $15,369.50 694-490-043 707 $15,369.50 694-490-044 708 $15,369.50 694-490-045 709 $15,369.50 694-490-046 710 $15,369.50 694-490-047 711 $15,369.50 694-490-048 712 $15,369.50 694-490-049 713 $15,369.50 694-500-001 714 $15,369.50 694-500-002 715 $15,369.50 694-500-003 716 $15,369.50 694-500-004 717 $15,369.50 694-500-005 718 $15,369.50 694-500-006 719 $15,369.50 694-500-007 720 $15,369.50 694-500-008 721 $15,369.50 694-500-009 722 $15,369.50 694-500-010 723 $15,369.50 694-500-011 724 $15,369.50 694-500-012 725 $15,369.50 694-500-013 726 $15,369.50 694-500-014 727 $15,369.50 694-500-015 728 $15,369.50 694-500-016 729 $15,369.50 694-500-017 730 $15,369.50 694-500-018 731 $15,369.50 694-500-019 732 $15,369.50 694-500-020 733 $15,369.50 694-500-021 734 $15,369.50 694-500-022 735 $15,369.50 694-500-023 736 $15,369.50 694-500-024 737 $15,369.50 694-500-025 738 $15,369.50 694-500-026 739 $15,369.50 694-500-027 740 $15,369.50 694-500-028 741 $15,369.50 694-500-029 742 $15,369.50 694-500-030 743 $15,369.50 694-500-031 744 $15,369.50 694-500-032 745 $15,369.50 694-500-033 746 $15,369.50 694-500-034 747 $15,369.50 694-500-035 748 $15,369.50 23 City of Palm Desert Section 29 Reassessment No. 2004-02 Reassessment Roll Column 1 Column 2 Column 3 Column 4 Assessor's Parcel Reassessment As Preliminarily As Confirmed and Number ID Approved Recorded 694-500-036 749 $15,369.50 694-500-037 750 $15,369.50 694-500-038 751 $15,369.50 694-500-039 752 $15,369.50 694-500-040 753 $15,369.50 694-500-041 754 $15,369.50 694-500-042 755 $15,369.50 694-500-043 756 $15,369.50 694-500-044 757 $15,369.50 694-500-045 758 $15,369.50 694-500-046 759 $15,369.50 694-500-047 760 $15,369.50 694-500-048 761 $15,369.50 694-500-049 762 $15,369.50 694-500-050 763 $15,369.50 694-500-051 764 $15,369.50 694-500-052 765 $15,369.50 694-500-053 766 $15,369.50 694-500-054 767 $15,369.50 694-500-055 768 $15,369.50 694-500-056 769 $15,369.50 694-500-057 770 $15,369.50 694-500-058 771 $15,369.50 694-500-059 772 $15,369.50 694-500-060 773 $15,369.50 694-500-061 774 $15,369.50 694-500-062 775 $15,369.50 694-510-001 776 $522,563.25 Total $17,915,000.00 24 11W I LLDAN CITY OF PALM DESERT Section 29 Reassessment District No. 2004-02 Comparison of the Auditor's Records for the Existing Bonds and the 2021 Refunding Bonds The analysis contained in this report supports the satisfaction of Section 9525(a)(1) through (3). The conditions that are met are as follows: (1) Each estimated annual installment of principal and interest on the reassessment is less than the corresponding annual installment of principal and interest on the portion of the original assessment. (2) The number of years of maturity of all refunding bonds is not more than the number of years to the last maturity of the bonds being refunded. (3) The principal amount of the reassessment on each subdivision of land within the district is less than the unpaid principal amount of the portion of the original assessment being superseded. The auditor's records only include the unique reassessment lien amounts. 25 Assessor's Parcel No: Reassessment No: Property Owner: City of Palm Desert Section 29 Reassessment District No. 2004-02 Total of all Parcels Included within the Proposed Reassessment District AUDITOR'S RECORD FOR ORIGINAL BONDS Year Principal Interest 2022 $800,000.00 $967,185.00 2023 845,000.00 929,185.00 2024 885,000.00 886,512.50 2025 930,000.00 841,820.00 2026 975,000.00 794,855.00 2027 1,025,000.00 745,617.50 2028 1,075,000.00 693,855.00 2029 1,130,000.00 639,030.00 2030 1,190,000.00 581,400.00 2031 1,250,000.00 520,710.00 2032 1,315,000.00 456,960.00 2033 1,380,000.00 389,895.00 2034 1,450,000.00 319,515.00 2035 1,525,000.00 245,565.00 2036 1,605,000.00 167,790.00 2037 1,685,000.00 85,935.00 Total $1,767,185.00 1,774,185.00 1,771,512.50 1,771,820.00 1,769,855.00 1,770,617.50 1,768,855.00 1,769,030.00 1,771,400.00 1,770,710.00 1,771,960.00 1,769,895.00 1,769,515.00 1,770,565.00 1,772,790.00 1,770,935.00 TOTAL $19,065,000.00 $9,265,830.00 $28,330,830.00 Remaining Assessment Lien: Estimated Reassessment: Estimated Lien Savings: AUDITOR'S RECORD FOR REFUNDING BONDS Principal $710,000.00 850,000.00 880,000.00 915,000.00 945,000.00 985,000.00 1,025,000.00 1,070,000.00 1,120,000.00 1,165,000.00 1,220,000.00 1,275,000.00 1,335,000.00 1,405,000.00 1,475,000.00 1,540,000.00 $17,915,000.00 $19,065,000.00 17.915.000.00 $1,150,000.00 Interest Total Savings $903,373.24 $1,613,373.24 $153,811.76 771,717.50 1,621,717.50 152,467.50 738,992.50 1,618,992.50 152,520.00 705,112.50 1,620,112.50 151,707.50 669,885.00 1,614,885.00 154,970.00 633,502.50 1,618,502.50 152,115.00 590,655.00 1,615,655.00 153,200.00 546,067.50 1,616,067.50 152,962.50 499,522.50 1,619,522.50 151,877.50 450,802.50 1,615,802.50 154,907.50 400,125.00 1,620,125.00 151,835.00 340,955.00 1,615,955.00 153,940.00 279,117.50 1,614,117.50 155,397.50 214,370.00 1,619,370.00 151,195.00 146,227.50 1,621,227.50 151,562.50 74,690.00 1,614,690.00 156,245.00 $7,965,115.74 $25,880,115.74 $2,450,714.26 Prepared By: Willdan Financial Services May 2021 TOTAL SAVINGS $2,450,714.26 26 Assessor's Parcel No: Reassessment No: Property Owner: City of Palm Desert Section 29 Reassessment District No. 2004-02 694-130-016 1 MACLEOD COUCH LAND CO AUDITOR'S RECORD FOR ORIGINAL BONDS Year Principal Interest 2022 $62,860.16 $75,996.75 2023 66,396.04 73,010.89 2024 69,539.05 69,657.89 2025 73,074.93 66,146.17 2026 76,610.81 62,455.89 2027 80,539.57 58,587.04 2028 84,468.33 54,519.79 2029 88,789.97 50,211.91 2030 93,504.48 45,683.62 2031 98,218.99 40,914.89 2032 103,326.38 35,905.72 2033 108,433.77 30,636.08 2034 113,934.03 25,105.95 2035 119,827.17 19,295.32 2036 126,113.19 13,184.13 2037 132,399.20 6,752.36 TOTAL $1,498,036.07 $728,064.39 Total $138, 856.90 139,406.93 139,196.94 139,221.10 139,066.70 139,126.61 138,988.12 139,001.88 139,188.10 139,133.88 139,232.10 139,069.84 139,039.98 139,122.49 139,297.32 139,151.56 $2,226,100.46 Prepared By: Willdan Financial Services May 2021 Remaining Assessment Lien: Estimated Reassessment: Estimated Lien Savings: AUDITOR'S RECORD FOR REFUNDING BONDS Principal $55,788.39 66,788.91 69,146.17 71,896.30 74,253.56 77,396.57 80,539.57 84,075.46 88,004.22 91, 540.10 95,861.74 100,183.37 104,897.88 110, 398.15 115,898.41 121,005.80 $1,407,674.60 Interest Total $70,982.73 $126,771.12 60,637.85 127,426.77 58,066.48 127,212.65 55,404.35 127,300.65 52,636.34 126,889.90 49,777.58 127,174.15 46,410.83 126,950.40 42,907.36 126,982.82 39,250.08 127,254.29 35,421.89 126,961.99 31,439.90 127,301.64 26,790.61 126,973.98 21,931.71 126,829.60 16,844.16 127,242.31 11,489.85 127,388.27 5,868.78 126,874.58 $625,860.51 $2,033,535.11 TOTAL SAVINGS $1,498,036.07 1.407.674.60 $90,361.47 Savings $12,085.79 11,980.16 11,984.29 11,920.45 12,176.80 11,952.47 12, 037.72 12,019.06 11, 933.80 12,171.89 11, 930.46 12, 095.87 12, 210.39 11,880.18 11, 909.05 12, 276.98 $192,565.35 $192,565.35 27 Assessor's Parcel No: Reassessment No: Property Owner: City of Palm Desert Section 29 Reassessment District No. 2004-02 694-130-017 2 UHC 00357 PALM DESERT AUDITOR'S RECORD FOR ORIGINAL BONDS Year Principal Interest 2022 $48,353.97 $58,459.04 2023 51, 073.88 56,162.22 2024 53,491.57 53,582.99 2025 56,211.49 50,881.67 2026 58,931.40 48,042.99 2027 61,953.52 45,066.95 2028 64,975.64 41,938.30 2029 68,299.98 38,624.54 2030 71,926.52 35,141.24 2031 75,553.07 31,472.99 2032 79,481.83 27,619.79 2033 83,410.59 23,566.21 2034 87,641.56 19,312.27 2035 92,174.75 14,842.55 2036 97,010.14 10,141.64 2037 101,845.54 5,194.12 TOTAL $1,152,335.44 $560,049.53 Total $106, 813.00 107,236.10 107,074.57 107,093.15 106,974.38 107,020.47 106,913.94 106,924.52 107,067.77 107,026.06 107,101.62 106,976.80 106,953.83 107,017.30 107,151.78 107,039.66 $1,712,384.98 Prepared By: Willdan Financial Services May 2021 Remaining Assessment Lien: Estimated Reassessment: Estimated Lien Savings: AUDITOR'S RECORD FOR REFUNDING BONDS Principal $42,914.14 51,376.09 53,189.36 55,304.85 57,118.12 59,535.82 61,953.52 64,673.43 67,695.55 70,415.46 73,739.80 77,064.13 80,690.68 84,921.65 89,152.62 93,081.38 $1, 082, 826.62 Interest Total $54,602.10 $97,516.24 46,644.50 98,020.59 44,666.52 97,855.88 42,618.73 97,923.58 40,489.50 97,607.62 38,290.45 97,826.27 35,700.64 97,654.16 33,005.66 97,679.09 30,192.37 97,887.92 27,247.61 97,663.07 24,184.54 97,924.34 20,608.16 97,672.29 16,870.55 97,561.23 12,957.05 97,878.70 8,838.35 97,990.97 4,514.45 97,595.83 $481,431.17 $1,564,257.78 TOTAL SAVINGS $1,152,335.44 1,082,826.62 $69,508.83 Savings $9,296.76 9,215.51 9,218.68 9,169.57 9,366.77 9,194.20 9,259.78 9,245.43 9,179.85 9,362.99 9,177.28 9,304.51 9,392.61 9,138.60 9,160.81 9,443.83 $148,127.19 $148,127.19 28 City of Palm Desert Section 29 Reassessment District No. 2004-02 Assessor's Parcel No: 694-130-018 Remaining Assessment Lien: $593,090.48 Reassessment No: 3 Estimated Reassessment: 557.315.29 Property Owner: UHC 00357 PALM DESERT Estimated Lien Savings: $35,775.19 AUDITOR'S RECORD FOR ORIGINAL BONDS AUDITOR'S RECORD FOR REFUNDING BONDS Year Principal Interest Total Principal Interest Total Savings 2022 $24,887.09 $30,088.03 $54,975.12 $22,087.29 $28,102.91 $50,190.21 $4,784.91 2023 26,286.99 28,905.89 55,192.88 26,442.53 24,007.25 50,449.79 4,743.09 2024 27,531.34 27,578.40 55,109.74 27,375.80 22,989.22 50,365.02 4,744.72 2025 28,931.24 26,188.06 55,119.31 28,464.61 21,935.25 50,399.86 4,719.45 2026 30,331.14 24,727.04 55,058.18 29,397.88 20,839.36 50,237.24 4,820.94 2027 31,886.59 23,195.31 55,081.90 30,642.23 19,707.54 50,349.77 4,732.12 2028 33,442.03 21,585.04 55,027.07 31,886.59 18,374.61 50,261.19 4,765.88 2029 35,153.02 19,879.50 55,032.51 33,286.48 16,987.54 50,274.02 4,758.49 2030 37,019.55 18,086.69 55,106.24 34,841.93 15,539.58 50,381.50 4,724.74 2031 38,886.08 16,198.70 55,084.78 36,241.83 14,023.95 50,265.78 4,819.00 2032 40,908.16 14,215.51 55,123.66 37,952.81 12,447.43 50,400.25 4,723.41 2033 42,930.23 12,129.19 55,059.42 39,663.80 10,606.72 50,270.52 4,788.90 2034 45,107.85 9,939.75 55,047.60 41,530.33 8,683.03 50,213.36 4,834.24 2035 47,441.02 7,639.25 55,080.26 43,707.95 6,668.81 50,376.76 4,703.50 2036 49,929.73 5,219.76 55,149.48 45,885.57 4,548.97 50,434.55 4,714.94 2037 52,418.44 2,673.34 55,091.78 47,907.65 2,323.52 50,231.17 4,860.60 TOTAL $593,090.48 $288,249.44 $881,339.92 $557,315.29 $247,785.70 $805,100.99 $76,238.94 Prepared By: Willdan Financial Services May 2021 TOTAL SAVINGS $76,238.94 29 Assessor's Parcel No: Reassessment No: Property Owner: 694-130-021 4 MC PROPERTIES City of Palm Desert Section 29 Reassessment District No. 2004-02 AUDITOR'S RECORD FOR ORIGINAL BONDS Year Principal Interest 2022 $147,061.12 $177,794.14 2023 155, 333.31 170, 808.74 2024 162, 686.37 162, 964.40 2025 170, 958.56 154, 748.74 2026 179, 230.74 146,115.34 2027 188, 422.06 137, 064.18 2028 197, 613.38 127, 548.87 2029 207,723.84 117,470.59 2030 218,753.42 106,876.67 2031 229,783.00 95,720.25 2032 241,731.72 84,001.31 2033 253,680.44 71,673.00 2034 266,548.29 58,735.29 2035 280,335.27 45,141.33 2036 295,041.38 30,844.23 2037 309,747.49 15,797.12 TOTAL $3,504,650.38 $1,703,304.20 Total $324,855.26 326,142.05 325,650.77 325,707.30 325,346.08 325,486.25 325,162.25 325,194.42 325,630.09 325,503.25 325,733.03 325,353.43 325,283.58 325,476.60 325,885.61 325,544.61 $5,207,954.59 Prepared By: Willdan Financial Services May 2021 Remaining Assessment Lien: Estimated Reassessment: Estimated Lien Savings: AUDITOR'S RECORD FOR REFUNDING BONDS Principal $130, 516.75 156,252.44 161,767.24 168,201.16 173,715.95 181,069.01 188,422.06 196,694.25 205,885.57 214,157.76 224,268.21 234,378.66 245,408.25 258,276.10 271,143.95 283,092.66 $3,293,250.02 Interest Total $166,063.85 $296,580.60 141,862.05 298,114.50 135,846.33 297,613.57 129,618.29 297,819.45 123,142.55 296,858.50 116,454.49 297,523.49 108,577.98 297,000.05 100,381.62 297,075.88 91,825.42 297,711.00 82,869.40 297,027.16 73,553.54 297,821.75 62,676.53 297,055.20 51,309.17 296,717.41 39,406.87 297,682.96 26,880.48 298,024.42 13,729.99 296,822.66 $1,464,198.58 $4,757,448.60 TOTAL SAVINGS $3,504,650.38 3,293,250.02 $211,400.36 Savings $28,274.66 28,027.55 28,037.20 27,887.84 28,487.58 27,962.75 28,162.21 28,118.55 27,919.09 28,476.09 27,911.28 28,298.24 28, 566.16 27,793.63 27,861.19 28,721.96 $450,505.99 $450,505.99 30 Assessor's Parcel No: Reassessment No: Property Owner: 694-130-022 5 LOWES HIW INC City of Palm Desert Section 29 Reassessment District No. 2004-02 AUDITOR'S RECORD FOR ORIGINAL BONDS Year Principal Interest 2022 $52,666.19 $63,672.43 2023 55,628.66 61,170.79 2024 58,261.97 58,361.54 2025 61,224.44 55,419.31 2026 64,186.91 52,327.48 2027 67,478.55 49,086.04 2028 70,770.19 45,678.37 2029 74,390.99 42,069.09 2030 78,340.95 38,275.15 2031 82,290.92 34,279.76 2032 86,570.04 30,082.93 2033 90,849.17 25,667.85 2034 95,457.46 21,034.55 2035 100, 394.92 16,166.22 2036 105,661.54 11,046.07 2037 110,928.16 5,657.34 TOTAL $1,255,101.06 $609,994.91 Total $116,338.62 116, 799.45 116,623.51 116,643.75 116,514.39 116, 564.59 116,448.56 116,460.08 116,616.10 116,570.68 116,652.97 116,517.03 116,492.01 116,561.13 116, 707.61 116,585.49 $1,865,095.97 Prepared By: Willdan Financial Services May 2021 Remaining Assessment Lien: Estimated Reassessment: Estimated Lien Savings: AUDITOR'S RECORD FOR REFUNDING BONDS Principal $46,741.24 55,957.82 57,932.81 60,236.95 62,211.93 64,845.24 67,478.55 70,441.02 73,732.66 76,695.13 80,315.93 83,936.73 87,886.70 92,494.99 97,103.28 101, 382.41 $1,179,393.41 Interest Total $59,471.53 $106,212.77 50,804.27 106,762.10 48,649.90 106,582.70 46,419.48 106,656.43 44,100.36 106,312.29 41,705.20 106,550.44 38,884.43 106,362.98 35,949.12 106,390.14 32,884.93 106,617.59 29,677.56 106,372.69 26,341.32 106,657.26 22,446.00 106,382.73 18,375.07 106,261.77 14,112.56 106,607.55 9,626.56 106,729.84 4,917.05 106,299.46 $524,365.34 $1,703,758.75 TOTAL SAVINGS $1,255,101.06 1.179.393.41 $75,707.64 Savings $10,125.85 10,037.35 10,040.81 9,987.32 10, 202.10 10,014.15 10,085.57 10, 069.94 9,998.51 10,197.98 9,995.71 10,134.29 10,230.24 9,953.58 9,977.77 10,286.04 $161,337.22 $161,337.22 31 City of Palm Desert Section 29 Reassessment District No. 2004-02 Assessor's Parcel No: 694-140-001 Remaining Assessment Lien: $18,016.41 Reassessment No: 6 Estimated Reassessment: 16.929.66 Property Owner: GID PALM DESERT Estimated Lien Savings: $1,086.75 AUDITOR'S RECORD FOR ORIGINAL BONDS AUDITOR'S RECORD FOR REFUNDING BONDS Year Principal Interest Total Principal Interest Total Savings 2022 $756.00 $913.99 $1,669.99 $670.95 $853.69 $1,524.64 $145.35 2023 798.52 878.08 1,676.60 803.25 729.27 1,532.52 144.08 2024 836.32 837.75 1,674.08 831.60 698.35 1,529.95 144.13 2025 878.85 795.52 1,674.37 864.67 666.33 1,531.00 143.36 2026 921.37 751.14 1,672.51 893.02 633.04 1,526.07 146.45 2027 968.62 704.61 1,673.23 930.82 598.66 1,529.48 143.75 2028 1,015.87 655.69 1,671.57 968.62 558.17 1,526.79 144.77 2029 1,067.85 603.88 1,671.73 1,011.15 516.03 1,527.18 144.55 2030 1,124.55 549.42 1,673.97 1,058.40 472.05 1,530.45 143.52 2031 1,181.25 492.07 1,673.32 1,100.92 426.01 1,526.93 146.39 2032 1,242.67 431.83 1,674.50 1,152.90 378.12 1,531.02 143.48 2033 1,304.10 368.45 1,672.55 1,204.87 322.20 1,527.08 145.47 2034 1,370.25 301.94 1,672.19 1,261.57 263.77 1,525.34 146.85 2035 1,441.12 232.06 1,673.18 1,327.72 202.58 1,530.30 142.88 2036 1,516.72 158.56 1,675.29 1,393.87 138.18 1,532.06 143.23 2037 1,592.32 81.21 1,673.53 1,455.30 70.58 1,525.88 147.65 TOTAL $18,016.41 $8,756.20 $26,772.61 $16,929.66 $7,527.03 $24,456.69 $2,315.92 Prepared By: Willdan Financial Services May 2021 TOTAL SAVINGS $2,315.92 32 City of Palm Desert Section 29 Reassessment District No. 2004-02 Assessor's Parcel No: 694-250-001 Remaining Assessment Lien: $15,810.90 Reassessment No: 165 Estimated Reassessment: 14.857.19 Property Owner: ROSALES JEANNE Estimated Lien Savings: $953.71 AUDITOR'S RECORD FOR ORIGINAL BONDS AUDITOR'S RECORD FOR REFUNDING BONDS Year Principal Interest Total Principal Interest Total Savings 2022 $663.45 $802.10 $1,465.55 $588.81 $749.18 $1,338.00 $127.56 2023 700.77 770.59 1,471.36 704.92 640.00 1,344.92 126.44 2024 733.94 735.20 1,469.14 729.80 612.86 1,342.66 126.49 2025 771.26 698.13 1,469.40 758.82 584.76 1,343.58 125.81 2026 808.58 659.19 1,467.77 783.70 555.55 1,339.25 128.52 2027 850.05 618.35 1,468.40 816.88 525.37 1,342.25 126.15 2028 891.51 575.42 1,466.94 850.05 489.84 1,339.89 127.05 2029 937.13 529.96 1,467.08 887.37 452.86 1,340.23 126.85 2030 986.89 482.16 1,469.05 928.83 414.26 1,343.10 125.95 2031 1,036.64 431.83 1,468.48 966.15 373.86 1,340.01 128.47 2032 1,090.55 378.96 1,469.51 1,011.77 331.83 1,343.60 125.92 2033 1,144.46 323.35 1,467.80 1,057.38 282.76 1,340.14 127.66 2034 1,202.51 264.98 1,467.49 1,107.14 231.48 1,338.61 128.87 2035 1,264.71 203.65 1,468.36 1,165.19 177.78 1,342.97 125.39 2036 1,331.05 139.15 1,470.20 1,223.24 121.27 1,344.51 125.69 2037 1,397.40 71.27 1,468.66 1,277.15 61.94 1,339.09 129.58 TOTAL $15,810.90 $7,684.30 $23,495.20 $14,857.19 $6,605.60 $21,462.79 $2,032.42 Prepared By: Willdan Financial Services May 2021 TOTAL SAVINGS $2,032.42 33 City of Palm Desert Section 29 Reassessment District No. 2004-02 Assessor's Parcel No: 694-250-008 Remaining Assessment Lien: $15,810.90 Reassessment No: 169 Estimated Reassessment: 14.857.18 Property Owner: EBEID FADI Estimated Lien Savings: $953.71 AUDITOR'S RECORD FOR ORIGINAL BONDS AUDITOR'S RECORD FOR REFUNDING BONDS Year Principal Interest Total Principal Interest Total Savings 2022 $663.45 $802.10 $1,465.55 $588.81 $749.18 $1,338.00 $127.56 2023 700.77 770.59 1,471.36 704.92 640.00 1,344.92 126.44 2024 733.94 735.20 1,469.14 729.80 612.86 1,342.66 126.49 2025 771.26 698.13 1,469.40 758.82 584.76 1,343.58 125.81 2026 808.58 659.19 1,467.77 783.70 555.55 1,339.25 128.52 2027 850.05 618.35 1,468.40 816.88 525.37 1,342.25 126.15 2028 891.51 575.42 1,466.94 850.05 489.84 1,339.89 127.05 2029 937.13 529.96 1,467.08 887.37 452.86 1,340.23 126.85 2030 986.89 482.16 1,469.05 928.83 414.26 1,343.09 125.95 2031 1,036.64 431.83 1,468.48 966.15 373.86 1,340.01 128.47 2032 1,090.55 378.96 1,469.51 1,011.76 331.83 1,343.59 125.92 2033 1,144.46 323.35 1,467.80 1,057.38 282.76 1,340.14 127.66 2034 1,202.51 264.98 1,467.49 1,107.14 231.48 1,338.61 128.87 2035 1,264.71 203.65 1,468.36 1,165.19 177.78 1,342.97 125.39 2036 1,331.05 139.15 1,470.20 1,223.24 121.27 1,344.51 125.69 2037 1,397.40 71.27 1,468.66 1,277.15 61.94 1,339.09 129.58 TOTAL $15,810.90 $7,684.30 $23,495.19 $14,857.18 $6,605.59 $21,462.78 $2,032.41 Prepared By: Willdan Financial Services May 2021 TOTAL SAVINGS $2,032.41 34 City of Palm Desert Section 29 Reassessment District No. 2004-02 Assessor's Parcel No: 694-270-026 Remaining Assessment Lien: $16,196.53 Reassessment No: 291 Estimated Reassessment: 15.219.55 Property Owner: BLAKE ROBERT EUGENE Estimated Lien Savings: $976.97 AUDITOR'S RECORD FOR ORIGINAL BONDS AUDITOR'S RECORD FOR REFUNDING BONDS Year Principal Interest Total Principal Interest Total Savings 2022 $679.63 $821.66 $1,501.30 $603.18 $767.45 $1,370.63 $130.67 2023 717.86 789.38 1,507.25 722.11 655.61 1,377.72 129.53 2024 751.85 753.13 1,504.98 747.60 627.81 1,375.40 129.57 2025 790.07 715.16 1,505.24 777.33 599.02 1,376.35 128.88 2026 828.30 675.26 1,503.57 802.82 569.10 1,371.91 131.65 2027 870.78 633.43 1,504.21 836.80 538.19 1,374.99 129.23 2028 913.26 589.46 1,502.72 870.78 501.79 1,372.57 130.15 2029 959.98 542.88 1,502.87 909.01 463.91 1,372.92 129.95 2030 1,010.96 493.92 1,504.88 951.49 424.37 1,375.85 129.03 2031 1,061.93 442.37 1,504.29 989.72 382.98 1,372.69 131.60 2032 1,117.15 388.21 1,505.36 1,036.44 339.92 1,376.36 128.99 2033 1,172.37 331.23 1,503.60 1,083.17 289.66 1,372.82 130.78 2034 1,231.84 271.44 1,503.28 1,134.14 237.12 1,371.26 132.02 2035 1,295.55 208.62 1,504.17 1,193.61 182.12 1,375.72 128.45 2036 1,363.52 142.54 1,506.06 1,253.08 124.23 1,377.30 128.76 2037 1,431.48 73.01 1,504.48 1,308.30 63.45 1,371.75 132.74 TOTAL $16,196.53 $7,871.72 $24,068.24 $15,219.55 $6,766.70 $21,986.26 $2,081.99 Prepared By: Willdan Financial Services May 2021 TOTAL SAVINGS $2,081.99 35 City of Palm Desert Section 29 Reassessment District No. 2004-02 Assessor's Parcel No: 694-280-047 Remaining Assessment Lien: $15,488.23 Reassessment No: 363 Estimated Reassessment: 14.553.98 Property Owner: PALATIAN DIKRAN K Estimated Lien Savings: $934.25 AUDITOR'S RECORD FOR ORIGINAL BONDS AUDITOR'S RECORD FOR REFUNDING BONDS Year Principal Interest Total Principal Interest Total Savings 2022 $649.91 $785.73 $1,435.64 $576.80 $733.89 $1,310.69 $124.96 2023 686.47 754.86 1,441.33 690.53 626.94 1,317.47 123.86 2024 718.97 720.19 1,439.16 714.90 600.35 1,315.25 123.91 2025 755.52 683.89 1,439.41 743.34 572.83 1,316.16 123.25 2026 792.08 645.73 1,437.81 767.71 544.21 1,311.92 125.90 2027 832.70 605.73 1,438.43 800.20 514.65 1,314.86 123.58 2028 873.32 563.68 1,437.00 832.70 479.84 1,312.54 124.46 2029 918.00 519.14 1,437.14 869.26 443.62 1,312.88 124.27 2030 966.75 472.32 1,439.07 909.88 405.81 1,315.69 123.38 2031 1,015.49 423.02 1,438.51 946.44 366.23 1,312.66 125.85 2032 1,068.29 371.23 1,439.52 991.12 325.06 1,316.17 123.35 2033 1,121.10 316.75 1,437.85 1,035.80 276.99 1,312.79 125.06 2034 1,177.97 259.57 1,437.54 1,084.54 226.75 1,311.29 126.24 2035 1,238.90 199.49 1,438.39 1,141.41 174.15 1,315.56 122.83 2036 1,303.89 136.31 1,440.20 1,198.28 118.79 1,317.07 123.13 2037 1,368.88 69.81 1,438.69 1,251.08 60.68 1,311.76 126.93 TOTAL $15,488.23 $7,527.48 $23,015.71 $14,553.98 $6,470.79 $21,024.77 $1,990.94 Prepared By: Willdan Financial Services May 2021 TOTAL SAVINGS $1,990.94 36 City of Palm Desert Section 29 Reassessment District No. 2004-02 Assessor's Parcel No: 694-280-052 Remaining Assessment Lien: $15,488.22 Reassessment No: 368 Estimated Reassessment: 14.553.98 Property Owner: BELL BRIAN C Estimated Lien Savings: $934.25 AUDITOR'S RECORD FOR ORIGINAL BONDS AUDITOR'S RECORD FOR REFUNDING BONDS Year Principal Interest Total Principal Interest Total Savings 2022 $649.91 $785.73 $1,435.64 $576.80 $733.89 $1,310.69 $124.96 2023 686.47 754.86 1,441.33 690.53 626.94 1,317.47 123.86 2024 718.97 720.19 1,439.16 714.90 600.35 1,315.25 123.91 2025 755.52 683.89 1,439.41 743.34 572.83 1,316.16 123.25 2026 792.08 645.73 1,437.81 767.71 544.21 1,311.92 125.90 2027 832.70 605.73 1,438.43 800.20 514.65 1,314.86 123.58 2028 873.32 563.68 1,437.00 832.70 479.84 1,312.54 124.46 2029 918.00 519.14 1,437.14 869.26 443.62 1,312.88 124.27 2030 966.74 472.32 1,439.07 909.88 405.81 1,315.68 123.38 2031 1,015.49 423.02 1,438.51 946.43 366.23 1,312.66 125.85 2032 1,068.29 371.23 1,439.52 991.12 325.06 1,316.17 123.35 2033 1,121.10 316.75 1,437.85 1,035.80 276.99 1,312.79 125.06 2034 1,177.97 259.57 1,437.54 1,084.54 226.75 1,311.29 126.24 2035 1,238.90 199.49 1,438.39 1,141.41 174.15 1,315.56 122.83 2036 1,303.89 136.31 1,440.20 1,198.28 118.79 1,317.07 123.13 2037 1,368.88 69.81 1,438.69 1,251.08 60.68 1,311.76 126.93 TOTAL $15,488.22 $7,527.47 $23,015.70 $14,553.98 $6,470.78 $21,024.76 $1,990.94 Prepared By: Willdan Financial Services May 2021 TOTAL SAVINGS $1,990.94 37 City of Palm Desert Section 29 Reassessment District No. 2004-02 Assessor's Parcel No: 694-421-001 Remaining Assessment Lien: $7,392.43 Reassessment No: 373 Estimated Reassessment: 6.946.52 Property Owner: GID MONTEREY Estimated Lien Savings: $445.91 AUDITOR'S RECORD FOR ORIGINAL BONDS AUDITOR'S RECORD FOR REFUNDING BONDS Year Principal Interest Total Principal Interest Total Savings 2022 $310.20 $375.02 $685.22 $275.30 $350.28 $625.58 $59.64 2023 327.65 360.29 687.94 329.59 299.23 628.82 59.12 2024 343.16 343.74 686.90 341.22 286.54 627.76 59.14 2025 360.61 326.41 687.02 354.79 273.41 628.20 58.82 2026 378.06 308.20 686.26 366.42 259.75 626.17 60.09 2027 397.44 289.11 686.56 381.93 245.64 627.57 58.98 2028 416.83 269.04 685.87 397.44 229.03 626.47 59.40 2029 438.16 247.78 685.94 414.89 211.74 626.63 59.31 2030 461.42 225.44 686.86 434.28 193.69 627.97 58.89 2031 484.69 201.90 686.59 451.73 174.80 626.53 60.07 2032 509.89 177.19 687.08 473.05 155.15 628.20 58.87 2033 535.09 151.18 686.27 494.38 132.20 626.58 59.69 2034 562.24 123.89 686.13 517.64 108.23 625.87 60.26 2035 591.32 95.22 686.53 544.79 83.12 627.91 58.63 2036 622.34 65.06 687.40 571.93 56.70 628.63 58.77 2037 653.36 33.32 686.68 597.13 28.96 626.09 60.58 TOTAL $7,392.43 $3,592.82 $10,985.25 $6,946.52 $3,088.47 $10,034.99 $950.26 Prepared By: Willdan Financial Services May 2021 TOTAL SAVINGS $950.26 38 City of Palm Desert Section 29 Reassessment District No. 2004-02 Assessor's Parcel No: 694-490-001 Remaining Assessment Lien: $16,356.10 Reassessment No: 666 Estimated Reassessment: 15.369.50 Property Owner: PONDEROSA HOMES II INC Estimated Lien Savings: $986.60 AUDITOR'S RECORD FOR ORIGINAL BONDS AUDITOR'S RECORD FOR REFUNDING BONDS Year Principal Interest Total Principal Interest Total Savings 2022 $686.33 $829.76 $1,516.09 $609.12 $775.02 $1,384.13 $131.96 2023 724.94 797.16 1,522.10 729.23 662.07 1,391.29 130.80 2024 759.25 760.55 1,519.80 754.96 633.99 1,388.95 130.85 2025 797.86 722.21 1,520.07 784.99 604.92 1,389.91 130.15 2026 836.46 681.92 1,518.38 810.73 574.70 1,385.43 132.95 2027 879.36 639.67 1,519.03 845.04 543.49 1,388.53 130.50 2028 922.26 595.27 1,517.52 879.36 506.73 1,386.09 131.43 2029 969.44 548.23 1,517.67 917.97 468.48 1,386.44 131.23 2030 1,020.92 498.79 1,519.71 960.86 428.55 1,389.41 130.30 2031 1,072.39 446.72 1,519.11 999.47 386.75 1,386.22 132.90 2032 1,128.15 392.03 1,520.19 1,046.65 343.27 1,389.93 130.26 2033 1,183.92 334.50 1,518.41 1,093.84 292.51 1,386.35 132.07 2034 1,243.97 274.12 1,518.09 1,145.31 239.46 1,384.77 133.32 2035 1,308.32 210.67 1,518.99 1,205.37 183.91 1,389.28 129.71 2036 1,376.95 143.95 1,520.90 1,265.42 125.45 1,390.87 130.03 2037 1,445.58 73.72 1,519.31 1,321.18 64.08 1,385.26 134.04 TOTAL $16,356.10 $7,949.27 $24,305.37 $15,369.50 $6,833.37 $22,202.87 $2,102.50 Prepared By: Willdan Financial Services May 2021 TOTAL SAVINGS $2,102.50 39 City of Palm Desert Section 29 Reassessment District No. 2004-02 Assessor's Parcel No: 694-510-001 Remaining Assessment Lien: $556,107.63 Reassessment No: 776 Estimated Reassessment: 522.563.25 Property Owner: PONDEROSA HOMES II INC Estimated Lien Savings: $33,544.39 AUDITOR'S RECORD FOR ORIGINAL BONDS AUDITOR'S RECORD FOR REFUNDING BONDS Year Principal Interest Total Principal Interest Total Savings 2022 $23,335.23 $28,211.85 $51,547.08 $20,710.01 $26,350.52 $47,060.54 $4,486.54 2023 24,647.83 27,103.43 51,751.26 24,793.68 22,510.25 47,303.93 4,447.33 2024 25,814.60 25,858.71 51,673.31 25,668.75 21,555.70 47,224.45 4,448.86 2025 27,127.20 24,555.08 51,682.28 26,689.67 20,567.45 47,257.12 4,425.16 2026 28,439.81 23,185.15 51,624.96 27,564.74 19,539.90 47,104.64 4,520.33 2027 29,898.26 21,748.94 51,647.20 28,731.50 18,478.66 47,210.15 4,437.05 2028 31,356.71 20,239.08 51,595.79 29,898.26 17,228.84 47,127.10 4,468.70 2029 32,961.01 18,639.89 51,600.90 31,210.87 15,928.26 47,139.13 4,461.77 2030 34,711.15 16,958.88 51,670.03 32,669.32 14,570.59 47,239.91 4,430.12 2031 36,461.29 15,188.61 51,649.90 33,981.92 13,149.47 47,131.40 4,518.50 2032 38,357.28 13,329.08 51,686.36 35,586.22 11,671.26 47,257.48 4,428.88 2033 40,253.27 11,372.86 51,626.13 37,190.52 9,945.33 47,135.85 4,490.28 2034 42,295.10 9,319.94 51,615.04 38,940.66 8,141.59 47,082.25 4,532.79 2035 44,482.78 7,162.89 51,645.67 40,982.49 6,252.97 47,235.46 4,410.21 2036 46,816.30 4,894.27 51,710.57 43,024.33 4,265.31 47,289.64 4,420.93 2037 49,149.82 2,506.64 51,656.46 44,920.31 2,178.64 47,098.95 4,557.52 TOTAL $556,107.63 $270,275.31 $826,382.95 $522,563.25 $232,334.73 $754,897.98 $71,484.97 Prepared By: Willdan Financial Services May 2021 TOTAL SAVINGS $71,484.97 40 11W I LLDAN CITY OF PALM DESERT Section 29 Reassessment District No. 2004-02 Method of Reassessment Each Reassessment has been computed as a proration of the existing individual assessments to the total existing assessment. 41 11W I LLDAN CITY OF PALM DESERT Section 29 Reassessment District No. 2004-02 Certifications 1. I, the City Clerk of the City of Palm Desert, hereby certify that the foregoing Reassessment with the Reassessment Diagram thereto attached, was filed with me on May 27, 2021. City Clerk, City of Palm Desert 2. I, the City Clerk of the City of Palm Desert, California, hereby certify that the Reassessments set forth in Column 3 of the Reassessment Roll, with Reassessment Diagram attached, were approved and confirmed by the City Council of said City on May 27, 2021. City Clerk, City of Palm Desert 3. I, the Superintendent of Streets of the City of Palm Desert, County of Riverside, California, hereby certify that this Reassessment, together with the Reassessment Diagram thereto attached, was recorded in my office on May 27, 2021. Superintendent of Streets 4. A Notice of Reassessment was recorded, and the Reassessment Diagram was filed in the office of the County Recorder of the County of Riverside, California, on , 2021. City Clerk, City of Palm Desert 42 1/VW I LLDAN CITY OF PALM DESERT Section 29 Reassessment District No. 2004-02 Reassessment Diagram The reassessment diagram will be on file with the City Clerk prior to the approval of the bond issue and Reassessment Report. 43 MONTEREY AVE REASSESSMENT DIAGRAM OF ASSESSMENT DISTRICT NO. 2004-02 E) 35TH AVE CITY OF PALM DESERT COUNTY OF RIVERSIDE STATE OF CALIFORNIA GATEWAY DR CRYSTAL BLUE WAY / SHEET 1 OF 5 FILED IN THE OFFICE OF THE CITY CLERK OF THE CITY OF PALM DESERT THIS DAY OF , 2021. CITY CLERK CITY OF PALM DESERT A REASSESSMENT WAS LEVIED BY THE CITY COUNCIL OF THE CITY OF PALM DESERT ON THE LOTS, PIECES AND PARCELS OF LAND SHOWN ON THIS REASSESSMENT DIAGRAM. SAID REASSESSMENT WAS LEVIED ON THE DAY OF , 2021. SAID REASSESSMENT DIAGRAM AND REASSESSMENT ROLL WERE RECORDED IN THE OFFICE OF THE SUPERINTENDENT OF STREETS OF THE CITY OF PALM DESERT ON THE DAY OF , 2021. REFERENCE IS MADE TO THE REASSESSMENT ROLL RECORDED IN THE OFFICE OF THE SUPERINTENDENT OF STREETS OF SAID CITY FOR THE EXACT AMOUNT OF EACH REASSESSMENT LEVIED AGAINST EACH PARCEL SHOWN ON THE REASSESSMENT DIAGRAM. CITY CLERK CITY OF PALM DESERT RECORDED IN THE OFFICE OF THE SUPERINTENDENT OF STREETS, CITY OF PALM DESERT, THIS DAY OF , 2021. SUPERINTENDENT OF STREETS CITY OF PALM DESERT FILED THIS DAY OF , 2021, AT THE HOUR OF O'CLOCK .M. IN BOOK OF MAPS OF ASSESSMENT AND COMMUNITY FACILITIES DISTRICTS AT PAGE(S) AT THE REQUEST OF THE CITY OF PALM DESERT IN THE OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA. FEE: INST.NO.: PETER ALDANA, ASSESSOR -COUNTY CLERK -RECORDER BY DEPUTY COUNTY RECORDER COUNTY OF RIVERSIDE NOTE: THIS REASSESSMENT DIAGRAM IS RECORDED PURSUANT TO THE REFUNDING ACT OF 1984 FOR 1915 IMPROVEMENT ACT BONDS (SECTION 9500 AND FOLLOWING, CALIFORNIA STREETS AND HIGHWAYS CODE). THE RECORDING OF THE REASSESSMENTS FROM THESE PROCEEDINGS HAS SUPERSEDED AND SUPLANTED THE EARLIER ASSESSMENTS FOR THE CITY OF PALM DESERT ASSESSMENT DISTRICT NO. 2004-02, COUNTY OF RIVERSIDE, CALIFORNIA, WHICH BECAME A LIEN BY VIRTUE OF THE RECORDING AS FOLLOWS: ON FEBRUARY 15, 2007, IN BOOK 70 AT PAGES 10-11 OF THE MAPS OF ASSESSMENTS AND COMMUNITY FACILITIES DISTRICTS IN THE OFFICE OF COUNTY RECORDER FOR THE COUNTY OF RIVERSIDE. FOR PARTICULARS ON THE LINES AND DIMENSIONS OF ASSESSOR'S PARCELS, REFERENCE IS MADE TO THE MAPS OF THE RIVERSIDE COUNTY ASSESSOR, WHICH MAPS SHALL GOVERN FOR ALL DETAILS RELATING THERETO. REASSESSMENT DISTRICT PARCELS REASSESSMENT NUMBERS WILLDAN Financial Services 27368 Via Industria, Suite 200 Temecula, CA 92590 951.587.3500 Phone 951.587.3510 Fax / 684 687 688 58 J i d MICHELANGELO O LN z w 670 669 668 699 98 694 709 691 714 REASSESSMENT DIAGRAM OF ASSESSMENT DISTRICT NO. 2004-02 753 754 KANDINSKY WAY a� 56 757 758 49 CITY OF PALM DESERT COUNTY OF RIVERSIDE STATE OF CALIFORNIA 76 763 764 765 65 66 67 68 69 CEZANNE �R REASSESSMENT DISTRICT PARCELS REASSESSMENT NUMBERS SHEET 2 OF 5 WWI LLDAN Financial Services 27368 Via Industria, Suite 200 Temecula, CA 92590 951.587.3500 Phone 951.587.3510 Fax 45 MICHELANGELO LN REASSESSMENT DIAGRAM OF ASSESSMENT DISTRICT NO. 2004-02 30 KANDINSKY WAY ( J a 0 z w cr 96 20 47* 318 317 80 316 OKEEFE WAY 314 313 VERMEER WAY PICASSO DR 325 310 303 304 CITY OF PALM DESERT COUNTY OF RIVERSIDE STATE OF CALIFORNIA GERALD FORD DR / \ MONDRIAN PL REASSESSMENT DISTRICT PARCELS REASSESSMENT NUMBERS 0 w =z d w SHEET 3 OF 5 'WILLDAN Financial Services 27368 Via Industria, Suite 200 Temecula, CA 92590 951.587.3500 Phone 951.587.3510 Fax 46 REASSESSMENT DIAGRAM OF ASSESSMENT DISTRICT NO. 2004-02 CITY OF PALM DESERT COUNTY OF RIVERSIDE STATE OF CALIFORNIA GATEWAY DR 26 DOMANI DR i I AVELLANA PL SERENO LN DOLCE AVE CIERRA ST TRAVERS ST REASSESSMENT DISTRICT PARCELS REASSESSMENT NUMBERS 58 GRANITA DR SHEET 4 OF 5 CORTESIA WAY 119 WWI LLDAN Financial Services 27368 Via Industria, Suite 200 Temecula, CA 92590 951.587.3500 Phone 951.587.3510 Fax ASSESSOR'S REASSESSMENT PARCEL NUMBER NUMBER 1 694-130-016 2 694-130-017 3 694-130-018 4 694-130-021 5 694-130-022 6 694-140-001 7 694-140-002 8 694-140-003 9 694-140-004 10 694-140-005 11 694-140-006 12 694-140-007 13 694-140-008 14 694-140-009 15 694-140-010 16 694-140-011 17 694-140-012 18 694-140-013 19 694-140-014 20 694-140-015 21 694-140-016 22 694-140-017 23 694-140-018 24 694-140-019 25 694-140-020 26 694-140-021 27 694-140-022 28 694-140-023 29 694-140-024 30 694-140-025 31 694-140-026 32 694-140-027 33 694-140-028 34 694-140-029 35 694-140-030 36 694-140-031 37 694-140-032 38 694-140-033 39 694-140-034 40 694-140-035 41 694-140-036 42 694-140-037 43 694-140-038 44 694-140-039 45 694-140-040 46 694-140-041 47 694-140-042 48 694-140-043 49 694-140-044 50 694-140-045 51 694-140-046 52 694-140-047 53 694-140-048 54 694-140-049 55 694-140-050 56 694-140-051 57 694-140-052 58 694-140-053 59 694-140-054 60 694-140-055 61 694-140-056 62 694-140-057 63 694-140-058 64 694-140-059 65 694-140-060 66 694-140-061 67 694-140-062 68 694-140-063 SHEET 1 1 1 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 REASSESSMENT DIAGRAM OF ASSESSMENT DISTRICT NO. 2004-02 ASSESSOR'S REASSESSMENT PARCEL NUMBER NUMBER 694-140-064 694-140-065 694-140-066 694-140-067 694-140-068 694-140-069 694-140-070 694-140-071 694-140-072 694-140-073 694-140-074 694-140-075 694-140-076 694-150-001 694-150-002 694-150-003 694-150-004 694-150-005 694-150-006 694-150-007 694-150-008 694-150-009 694-150-010 694-150-011 694-150-012 694-150-013 694-150-014 694-150-015 694-150-016 694-150-017 694-150-018 694-150-019 694-150-020 694-150-021 694-150-022 694-150-023 694-150-024 694-150-025 694-150-026 694-150-027 694-150-028 694-150-029 694-150-030 694-150-031 694-150-032 694-150-033 694-150-034 694-150-035 694-150-036 694-150-037 694-150-038 694-150-039 694-150-040 694-150-041 694-150-042 694-150-043 694-150-044 694-150-045 694-150-046 694-150-047 694-150-048 694-150-049 694-150-050 694-150-051 694-150-052 694-150-053 694-150-054 694-150-055 SHEET 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 ASSESSORS REASSESSMENT PARCEL NUMBER NUMBER 694-150-056 694-150-057 694-150-058 694-150-059 694-150-060 694-150-061 694-150-062 694-150-063 694-150-064 694-150-065 694-150-066 694-150-067 694-150-068 694-150-069 694-150-070 694-150-071 694-150-072 694-150-073 694-150-074 694-150-075 694-150-076 694-150-077 694-150-078 694-150-079 694-150-080 694-150-081 694-150-082 694-150-083 694-250-001 694-250-002 694-250-003 694-250-007 694-250-008 694-250-009 694-250-010 694-250-011 694-250-012 694-250-013 694-250-014 694-250-015 694-250-016 694-250-017 694-250-018 694-250-019 694-250-020 694-250-021 694-250-022 694-250-023 694-250-024 694-250-025 694-250-026 694-250-027 694-250-028 694-250-029 694-250-030 694-250-031 694-250-032 694-250-033 694-250-034 694-250-035 694-250-036 694-250-037 694-250-038 694-250-039 694-250-040 694-250-041 694-250-042 694-250-043 SHEET 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 CITY OF PALM DESERT COUNTY OF RIVERSIDE STATE OF CALIFORNIA ASSESSORS REASSESSMENT PARCEL NUMBER NUMBER 694-250-044 694-250-045 694-250-046 694-250-047 694-250-048 694-250-049 694-250-050 694-250-051 694-250-052 694-260-001 694-260-002 694-260-003 694-260-004 694-260-005 694-260-006 694-260-007 694-260-008 694-260-009 694-260-010 694-260-011 694-260-012 694-260-013 694-260-014 694-260-015 694-260-016 694-260-017 694-260-018 694-260-019 694-260-020 694-260-021 694-260-022 694-260-023 694-260-024 694-260-025 694-260-026 694-260-027 694-260-028 694-260-029 694-260-030 694-260-031 694-260-032 694-260-033 694-260-034 694-260-035 694-260-036 694-260-037 694-260-038 694-260-039 694-260-040 694-260-041 694-260-042 694-260-043 694-260-049 694-260-050 694-260-051 694-260-052 694-260-053 694-260-054 694-260-055 694-260-056 694-260-057 694-260-058 694-260-059 694-260-060 694-260-061 694-260-062 694-260-063 694-270-002 SHEET 3 3 3 3 3 3 2 2 2 3 3 3 3 3 3 3 3 3 3 3 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 ASSESSOR'S REASSESSMENT PARCEL NUMBER NUMBER 694-270-003 694-270-004 694-270-005 694-270-006 694-270-007 694-270-008 694-270-009 694-270-010 694-270-011 694-270-012 694-270-013 694-270-014 694-270-015 694-270-016 694-270-017 694-270-018 694-270-019 694-270-020 694-270-026 694-270-027 694-270-028 694-270-029 694-270-030 694-270-031 694-270-032 694-270-033 694-270-034 694-270-035 694-270-036 694-270-037 694-270-038 694-270-039 694-270-040 694-270-041 694-270-042 694-270-043 694-270-044 694-270-045 694-270-046 694-270-047 694-270-048 694-270-049 694-270-050 694-270-051 694-270-052 694-270-053 694-270-054 694-270-055 694-270-056 694-270-057 694-270-058 694-270-059 694-270-060 694-270-061 694-270-062 694-270-063 694-270-064 694-270-065 694-270-066 694-280-002 694-280-003 694-280-004 694-280-005 694-280-006 694-280-007 694-280-008 694-280-009 694-280-010 SHEET 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 REASSESSMENT NUMBER 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360 361 362 363 364 365 366 367 368 369 370 371 372 373 to 404 405 to 428 429 to 456 457 to 516 517 to 522 523 to 527 528 to 531 532 to 535 536 to 539 540 to 595 596 to 619 620 621 622 623 624 625 626 627 628 629 630 631 632 633 634 635 636 637 638 639 640 641 642 643 644 ASSESSORS PARCEL NUMBER 694-280-011 694-280-013 694-280-014 694-280-018 694-280-019 694-280-020 694-280-021 694-280-022 694-280-023 694-280-024 694-280-025 694-280-026 694-280-027 694-280-028 694-280-029 694-280-030 694-280-031 694-280-032 694-280-033 694-280-034 694-280-035 694-280-036 694-280-047 694-280-048 694-280-049 694-280-050 694-280-051 694-280-052 694-280-053 694-280-054 694-280-055 694-280-056 694-421-001 to 694-421-032 694-422-001 to 694-422-024 694-423-001 to 694-423-028 694-423-030 to 694-423-089 694-424-001 to 694-424-006 694-424-008 to 694-424-012 694-424-014 to 694-424-017 694-424-019 to 694-424-022 694-424-024 to 694-424-027 694-425-001 to 694-425-056 694-425-058 to 694-425-081 694-440-001 694-440-002 694-440-003 694-440-004 694-440-005 694-440-006 694-440-007 694-440-010 694-440-011 694-440-012 694-440-013 694-440-014 694-440-015 694-440-016 694-440-017 694-440-018 694-440-019 694-440-020 694-440-021 694-440-022 694-440-023 694-440-024 694-440-025 694-440-026 694-440-027 SHEET 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 ASSESSOR'S REASSESSMENT PARCEL NUMBER NUMBER 694-440-028 694-440-029 694-440-030 694-440-031 694-440-032 694-440-033 694-440-034 694-440-035 694-440-036 694-440-037 694-440-038 694-440-039 694-440-040 694-440-041 694-440-042 694-440-043 694-440-044 694-440-045 694-440-046 694-440-047 694-440-048 694-490-001 694-490-002 694-490-003 694-490-004 694-490-005 694-490-006 694-490-007 694-490-008 694-490-009 694-490-010 694-490-011 694-490-012 694-490-013 694-490-014 694-490-015 694-490-016 694-490-017 694-490-018 694-490-019 694-490-020 694-490-021 694-490-022 694-490-023 694-490-024 694-490-025 694-490-026 694-490-027 694-490-028 694-490-029 694-490-030 694-490-031 694-490-032 694-490-033 694-490-034 694-490-035 694-490-036 694-490-037 694-490-038 694-490-039 694-490-040 694-490-041 694-490-042 694-490-043 694-490-044 694-490-045 694-490-046 694-490-047 SHEET 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 SHEET 5 OF 5 ASSESSOR'S REASSESSMENT PARCEL NUMBER NUMBER 694-490-048 694-490-049 694-500-001 694-500-002 694-500-003 694-500-004 694-500-005 694-500-006 694-500-007 694-500-008 694-500-009 694-500-010 694-500-011 694-500-012 694-500-013 694-500-014 694-500-015 694-500-016 694-500-017 694-500-018 694-500-019 694-500-020 694-500-021 694-500-022 694-500-023 694-500-024 694-500-025 694-500-026 694-500-027 694-500-028 694-500-029 694-500-030 694-500-031 694-500-032 694-500-033 694-500-034 694-500-035 694-500-036 694-500-037 694-500-038 694-500-039 694-500-040 694-500-041 694-500-042 694-500-043 694-500-044 694-500-045 694-500-046 694-500-047 694-500-048 694-500-049 694-500-050 694-500-051 694-500-052 694-500-053 694-500-054 694-500-055 694-500-056 694-500-057 694-500-058 694-500-059 694-500-060 694-500-061 694-500-062 694-510-001 SHEET 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 WWILLDAN Financial Services 27368 Via Industria, Suite 200 Temecula, CA 92590 951.587.3500 Phone 951.587.3510 Fax 48 RESOLUTION NO. 2021-31 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AUTHORIZING THE ISSUANCE AND SALE BY THE CITY OF ITS SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021; APPROVING AS TO FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION THEREWITH; AND APPROVING CERTAIN OTHER MATTERS RELATING THERETO RECITALS: WHEREAS, the City of Palm Desert (the "City") has heretofore formed the Section 29 Assessment District (No. 2004-02) (the "District") and issued its City of Palm Desert, Section 29 Assessment District (No. 2004-02), Limited Obligation Improvement Bonds, Series 2007 (the "Prior Bonds"), of which $19,830,000 in aggregate principal amount remain outstanding; and WHEREAS, the City Council of the City (the "City Council") has adopted a resolution entitled, "A Resolution of the City Council of the City of Palm Desert, California, Declaring Its Intention to Issue Refunding Bonds for the Section 29 Assessment District (No. 2004-02) ; Directing the Preparation of Report Pursuant to Section 9523 of the California Streets and Highways Code; Making Other Determinations Relating to the Refunding; and Directing Other Matters Relating Thereto" (the "Resolution of Intention"), on June 10, 2021 declaring its intention to issue bonds to refund the Prior Bonds and to levy reassessments within the Assessment District to secure such refunding bonds, under and pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (the "1984 Refunding Act"), as set forth in Division 11.5 (commencing with Section 9500) of the California Streets and Highways Code; and WHEREAS, the City Council, by a resolution entitled, "A Resolution of the City Council of the City of Palm Desert, California, Approving a Reassessment Report Prepared in Connection with the Issuance of Refunding Bonds for the Section 29 Assessment District (No. 2004-02); Confirming Reassessments for Such Refunding Bonds; Making Other Findings in Connection Therewith; Ordering Refunding and Reassessments; and Directing and Approving Other Matters Relating Thereto," adopted on June 10, 2021, has approved a reassessment report (the "Reassessment Report") prepared by Willdan Financial Services in connection with the proposed refunding and reassessments pursuant to Section 9523 of the 1984 Refunding Act, made the findings required by Section 9525 of the 1984 Refunding Act, and confirmed and adopted the reassessments and reassessment diagrams presented with the Reassessment Report; and WHEREAS, the aforementioned reassessment diagram with respect to the District and a notice of reassessment shall be duly recorded in the manner provided by law, and the reassessments and interest thereon shall be collected on the assessment -1- RESOLUTION NO. 2021-31 roll for the County of Riverside in the same manner and subject to the same remedies on default and to the payment of interest and penalties on the enforcement thereof as the original assessments in the District; and WHEREAS, the City Council at this time desires to adopt this Resolution to authorize the issuance of the refunding bonds, which shall be designated "City of Palm Desert, Section 29 Assessment District (No. 2004-02), Limited Obligation Refunding Improvement Bonds, Series 2020" (the "Bonds") and approve the execution and delivery of certain documents in connection with such issuance; and WHEREAS, to effect the refunding of the Prior Bonds, the City proposes to enter into an Escrow Agreement with U.S. Bank National Association, in its capacity as the fiscal agent for the Prior Bonds, substantially in the form presented to the City Council and on file with the City Clerk; and WHEREAS, on January 10, 2019, the City Council approved an updated local debt policy (the "Local Debt Policy") in furtherance of Section 8855(i) of the California Government Code, as amended by SB 1029, enacted as Chapter 307, Statutes of 2016; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, FIND, DECLARE AND ORDER AS FOLLOWS: Section 1. Recitals. The above recitals, and each of them, are true and correct. Section 2. Local Debt Policy. The City Council hereby determines that (a) the Local Debt Policy is consistent with the requirements of Government Code Section 8855(i), and (b) the proposed Bonds to be issued in accordance with the parameters set forth in this Resolution are consistent with the Local Debt Policy. Section 3. Authorization to Issue Bonds. Subject to the parameters set forth in Section 8 below, the City Council approves and authorizes the issuance and sale of the Bonds for the purpose of refunding the Prior Bonds, including but not limited to financing of the costs of issuing refunding bonds (as defined in Section 9600(a) of the 1984 Refunding Act) and the Special Reserve Fund (as defined in the Resolution of Intention). Section 4. Fiscal Agent Agreement. The Fiscal Agent Agreement (the "Fiscal Agent Agreement"), proposed to be entered into by and between the City and the Fiscal Agent (defined in Section 5 below), in the form presented at this meeting and on file with the City Clerk of the City (the "City Clerk"), is hereby approved. Subject to Section 8 below, each of the Mayor, the Mayor Pro Tem (in the Mayor's absence), the City Manager, the Assistant City Manager (in the City Manager's absence), and any deputy of such officers (each, an "Authorized Officer"), acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Fiscal Agent Agreement in substantially said form, with such additions or changes as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). -2- RESOLUTION NO. 2021-31 Section 5. Appointment of Fiscal Agent. The appointment of U.S. Bank National Association, as fiscal agent (the "Fiscal Agent") under the Fiscal Agent Agreement is hereby approved. Section 6. Escrow Agreement. The Escrow Agreement (the "Escrow Agreement"), proposed to be entered into by and between the City and U.S. Bank National Association, as fiscal agent and escrow agent for the Prior Bonds, in the form presented at this meeting and on file with the City Clerk, is hereby approved. Each of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Escrow Agreement in substantially said form, with such additions or changes as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). Section 7. Bond Purchase Agreement. The Bond Purchase Agreement (the "Purchase Agreement") proposed to be entered into by and between the City and the Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), in the form presented at this meeting and on file with the City Clerk, is hereby approved. Subject to Section 8 below, each of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Purchase Agreement in substantially said form, with such additions or changes as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). Section 8. Terms of Sale of Bonds. Each of the Authorized Officers, acting singly, is hereby authorized and directed to act on behalf of the City to establish and determine (i) the aggregate initial principal amount of the Bonds, which amount shall be less than the outstanding aggregate principal amount of the Prior Bonds on the date of issuance of the Bonds; (ii) the purchase price of the Bonds and the interest rates thereon, provided that the true interest cost on the Bonds shall not exceed 4.26 percent; (iii) the final maturity of the Bonds, which shall not be on a date that is later than the scheduled final maturity date of the Prior Bonds; and (iv) the Underwriter's compensation (discount) with respect to the Bonds, which shall not exceed 1.1 percent of the principal amount thereof. Section 9. Preliminary Official Statement. The Preliminary Official Statement relating to the Bonds (the "Preliminary Official Statement"), in the form presented at this meeting and on file with the City Clerk, is hereby approved. Solely for purposes of this Section 9 and Section 10 below, the term "Authorized Officers" shall include the City Treasurer. Each of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to cause the Preliminary Official Statement in substantially said form, with such additions or changes therein as such Authorized Officer may approve, to be deemed final for the purposes of Rule 15c2-12 of the Securities and Exchange Act of 1934. The distribution by the Underwriter of copies of the Preliminary Official Statement to potential purchasers of the Bonds is hereby approved. -3- RESOLUTION NO. 2021-31 Section 10. Official Statement. Each of the Authorized Officers (within the meaning set forth in Section 9 above), acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to cause the Preliminary Official Statement to be brought into the form of a final Official Statement (the "Official Statement"), and to execute the same for and in the name and on behalf of the City, with such additions or changes therein as such Authorized Officer may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). The distribution and use of the Official Statement by the Underwriter in connection with the sale of the Bonds are hereby approved. Section 11. Continuing Disclosure Agreement. The Continuing Disclosure Agreement (the Continuing Disclosure Agreement") relating to the Bonds, proposed to be entered into by and between the City and Willdan Financial Services, as Dissemination Agent, in the form appended to the Preliminary Official Statement and on file with the City Clerk, is hereby approved. Each of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure Agreement in substantially said form, with such additions or changes therein as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). Section 12. Appointment of Financing Team. The City hereby confirms the appointments of Del Rio Advisors, LLC, to act as municipal advisor in connection with the issuance of the Bonds; Richards, Watson & Gershon, A Professional Corporation, to act as bond counsel; Best Best & Krieger LLP to act as disclosure counsel; Willdan Financial Services, to act as Reassessment Engineer in connection with the issuance of the Bonds; Stephen G. White, MAI, to act as appraiser in connection with the issuance of the Bonds; Empire Economics, Inc. to act as Absorption Consultant in connection with the issuance of the Bonds; and Stifel, Nicolaus & Company, Incorporated, to act as underwriter of the Bonds (the "Underwriter"). Section 13. Other Acts. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the issuance, sale and delivery of the Bonds, or otherwise effectuate the purposes of this Resolution, the Fiscal Agent Agreement, the Escrow Agreement, the Purchase Agreement, the Official Statement, and the Continuing Disclosure Agreement, and any such actions previously taken by such officers are hereby ratified and confirmed. Section 14. Effective Date. This Resolution shall take effect immediately upon adoption. -4- RESOLUTION NO. 2021-31 PASSED, APPROVED and ADOPTED by the City Council of the City of Palm Desert, California, on this 10th day of June, 2021, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ATTEST: M. Gloria Sanchez, Acting City Clerk City of Palm Desert, California Kathleen Kelly, Mayor -5- [This page has intentionally been left blank.] PRELIMINARY OFFICIAL STATEMENT DATED , 2021 NEW ISSUE - BOOK -ENTRY -ONLY NO RATING In the opinion of Richards, Watson & Gershon, A Professional Corporation, Bond Counsel, under existing law (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax, and (ii) interest on the Bonds is exempt from State of California personal income taxes. Interest on the Bonds may be subject to certain federal income taxes imposed only on certain corporations. Bond Counsel expresses no opinion as to any other tax consequences regarding the Bonds. For a more complete discussion of the tax aspects, see "TAXMATTERS" herein. $17,790,000* CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 Dated: Date of Delivery Due: September 2, as shown on the inside cover page The City of Palm Desert Section 29 Assessment District (No. 2004-02) Limited Obligation Refunding Improvement Bonds, Series 2021 (the "Bonds") are being issued by the City of Palm Desert (the "City") pursuant to the provisions of Refunding Act of 1984 for 1915 Improvement Act Bonds (the "1984 Refunding Act"), as set forth in Division 11.5 (commencing with Section 9500) of the California Streets and Highways Code and a Fiscal Agent Agreement dated as of July 1, 2021 (the "Fiscal Agent Agreement"), by and between the City and U.S. Bank National Association, as fiscal agent (the "Fiscal Agent"). The Bonds are being issued for the primary purpose of defeasing and redeeming the Section 29 Assessment District (No. 2004-02), Limited Obligation Improvement Bonds, Series 2007, of which $19,830,000 in aggregate principal amount remain outstanding (the "Prior Bonds") and to levy reassessments within the Section 29 Assessment District (No. 2004-02) (the "District") to secure the Bonds. The Bonds will be issued in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). Individual purchases of ownership interests in the Bonds may be made in denominations of $100,000 and any integral multiple of $5,000 in excess thereof in book -entry form only. Purchasers of the Bonds will not receive certificates representing their interests in the Bonds purchased. Interest on the Bonds will be payable on March 2, 2022 and on each March 2 and September 2 thereafter. Principal of, and interest on, the Bonds will be paid by the Fiscal Agent directly to DTC, DTC is in turn obligated to remit such principal and interest to DTC participants for subsequent disbursement to the beneficial owners of the Bonds. See "THE BONDS — Registration" and APPENDIX F — "The Book -Entry System" herein. INVESTMENT IN THE BONDS INVOLVES A HIGH DEGREE OF SPECULATIVE RISK AND RISKS THAT MAY NOT BE APPROPRIATE FOR SOME INVESTORS. EACH PROSPECTIVE INVESTOR SHOULD CONSIDER ITS FINANCIAL CONDITION AND THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE BONDS. See "SPECIAL RISK FACTORS" for a discussion of certain risk factors that should be considered, in addition to other matters set forth herein, in evaluating the investment quality of the Bonds. This cover page contains certain information for general reference only. It is not a summary of this issue. Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision. The Bonds are issued upon and secured by the unpaid special reassessments levied on parcels within the District (the "Reassessments"). The Bonds are special limited obligations of the City and are not payable from the City's general fund. Reassessment installments of principal and interest sufficient to meet annual debt service on the Bonds are to be included on the regular Riverside County tax bills sent to owners of property against which there are unpaid Reassessments. These annual Reassessment installments are to be used to pay debt service on the Bonds as it becomes due. To provide funds for payment of the Bonds and the interest thereon in the event of delinquent installments, the City will establish a Reserve Fund from Bond proceeds, as described herein. See "SECURITY FOR THE BONDS." Property in the District subject to the lien of the Reassessments consists of 776 parcels on approximately 260 acres. The District is in various stages of development, of which a significant portion is undeveloped. See "THE DISTRICT" and "SPECIAL RISK FACTORS." The Bonds are subject to optional, mandatory redemption from prepayments of Reassessments, and mandatory sinking fund redemption as more fully described herein. Transfers of property ownership and other similar circumstances could result in prepayment of all or part of the Reassessments. Such prepayment would result in redemption of a portion of the Bonds prior to their stated maturities. THE BONDS ARE LIMITED OBLIGATION IMPROVEMENT BONDS AND ARE SECURED SOLELY BY THE SPECIAL REASSESSMENTS AND THE AMOUNTS IN THE REDEMPTION FUND, THE REASSESSMENT FUND, AND THE RESERVE FUND. THE BONDS ARE NOT SECURED BY THE GENERAL TAXING POWER OF THE CITY OF PALM DESERT, THE COUNTY OF RIVERSIDE (THE "COUNTY"), OR THE STATE OF CALIFORNIA (THE "STATE") OR ANY POLITICAL SUBDIVISION OF THE STATE. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE INFORMATION SET FORTH IN THIS OFFICIAL STATEMENT, INCLUDING INFORMATION UNDER THE HEADING "SPECIAL RISK FACTORS," SHOULD BE READ IN ITS ENTIRETY. The Bonds are being offered when, as, and if issued by the City and received by the Underwriter, subject to prior sale and to the approval of validity by Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California, Bond Counsel, and the approval of certain matters for the City by Best Best & Krieger LLP, Indian Wells, California, as City Attorney. Certain legal matters will be passed upon by Best Best & Krieger LLP, Riverside, California, Disclosure Counsel, and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, Underwriter's Counsel. It is expected that the Bonds in book -entry form will be available for delivery through the facilities of DTC on or about , 2021. STIFEL Dated: , 2021 * Preliminary, subject to change. $17,790,000* CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 MATURITY SCHEDULE* (Base CUSIP°: t ) Maturity Date Principal (September 2) Amount Interest Rate Yield 2022 $ 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 Price $ % Term Bond Due September 2, ; Price: %, CUSIPt $ % Term Bond Due September 2, ; Price: %, CUSIPt CUSIP° Preliminary, subject to change. Copyright 2021, American Bankers Association. CUSIP data herein are provided by CUSIP Global Services, managed by S&P Global Market Intelligence on behalf of the American Bankers Association, and are provided for convenience of reference only. Neither the City nor Stifel Nicolaus & Company, Incorporated (the "Underwriter") assume any responsibility for the accuracy of these CUSIP data. CITY OF PALM DESERT, CALIFORNIA City Council Kathleen Kelly, Mayor Jan Harnik, Mayor Pro Tern Sabby Jonathan, Councilmember Gina Nestande, Councilmember Karina Quintanilla, Councilmember City Staff Todd Hileman, City Manager Janet Moore, Director of Finance M. Gloria Sanchez, Acting City Clerk Veronica Tapia, Senior Management Analyst Best Best & Krieger LLP, City Attorney SPECIAL SERVICES Bond Counsel Richards, Watson & Gershon, A Professional Corporation Los Angeles, California Disclosure Counsel Best Best & Krieger LLP Riverside, California Fiscal Agent U.S. Bank National Association Los Angeles, California Municipal Advisor Del Rio Advisors, LLC Modesto, California Reassessment Engineers Willdan Financial Services Temecula, California Underwriter Stifel Nicolaus & Company, Incorporated San Francisco, California Verification Agent Robert Thomas, CPA, LLC Minneapolis, Minnesota GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT Use of Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Estimates and Forecasts. When used in this Official Statement, in any press release and in any oral statement made with the approval of an authorized officer of the City, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "forecast," "expect," "intend" and similar expressions identify "forward looking statements." Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward -looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, give rise to any implication that there has been no change in the affairs of the City since the date hereof. Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained herein and if given or made, such other information or representation must not be relied upon as having been authorized by the City or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. Involvement of Underwriter. The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinions herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. All summaries of the documents referred to in this Official Statement, are made subject to the provisions of such documents, respectively, and do not purport to be complete statements of any or all of such provisions. Information Not Incorporated. A wide variety of other information, including financial information concerning the City, is available from publications and websites of the City and others. No such information is a part of or incorporated into this Official Statement. THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXCEPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. TABLE OF CONTENTS INTRODUCTION 1 The District 1 Property Ownership and Development 1 Use of Proceeds of the Bonds 3 Source of Payment of the Bonds 3 Security for the Bonds 3 Market Absorption Study 3 Value of Property in the District 4 Reserve Fund 4 Limited Obligation of the City 4 Summary of Information 4 THE REFUNDING PLAN 5 The Prior Bonds 5 Estimated Sources and Uses of Funds 5 THE BONDS 6 Authority For Issuance 6 Registration 6 Payment 6 Redemption 6 Investments 9 Debt Service Schedule 9 SECURITY FOR THE BONDS 10 Reassessments 10 Collection of Reassessments 10 District Not Included in Teeter Plan 11 Covenant to Foreclose 11 Establishment of Funds 11 Priority of Lien 14 THE DISTRICT 15 General 15 The City of Palm Desert 15 Location of the District 15 Development Status and Valuation 15 Estimated Value -to -Lien Ratios 17 Direct and Overlapping Debt 19 Delinquency 20 Market Absorption Study 20 The Appraisal 22 PROPERTY OWNERSHIP OF APPRAISED PARCELS 24 Ownership of Property in the District 24 SPECIAL RISK FACTORS 30 Land Values 30 General 31 Collection of the Reassessments 31 Concentration of Landownership 32 Risks Associated with Real Estate Secured Investments 32 Risk Related to Availability of Construction Financing. 32 Limitations on Remedies 32 Depletion of Reserve Fund 33 Non -availability of City Funds 33 Owner Not Obligated to Pay Bonds or Reassessments 33 FDIC/Federal Government Interests in Properties 33 Parity Taxes and Special Assessments 35 Foreclosure 35 Bankruptcy 35 Limited Obligation of the City Upon Delinquency 36 Hazardous Materials 36 Natural Hazard Risks 37 Natural Disasters 37 Endangered and Threatened Species 37 Proposition 218 37 Appraised Values 38 No Acceleration Provision 38 Absence of Market for the Bonds 38 Voter Initiatives 39 Loss of Tax Exemption 39 Potential Early Redemption of Bonds from Prepayment of Reassessments 39 Cybersecurity 39 COVID-19 (Coronavirus) Pandemic 40 Legal Requirements. 40 VERIFICATION 41 CONCLUDING INFORMATION 41 Enforceability of Remedies 41 Absence of Material Litigation 41 Certain Information Concerning the City 41 Tax Matters 41 Continuing Disclosure 43 Approval of Legality 44 Underwriting 44 Municipal Advisor 44 Miscellaneous 44 APPENDIX A — REASSESSMENT REPORT A-1 APPENDIX B — CITY OF PALM DESERT GENERAL INFORMATION B-1 APPENDIX C — FORM OF BOND COUNSEL OPINION C-1 APPENDIX D — FORM OF CONTINUING DISCLOSURE AGREEMENT D-1 APPENDIX E — APPRAISAL REPORT E-1 APPENDIX F — THE BOOK -ENTRY SYSTEM F-1 APPENDIX G — MARKET ABSORPTION STUDY G-1 APPENDIX H — SUMMARY OF THE FISCAL AGENT AGREEMENT H-1 APPENDIX I — FORM OF CONTINUING DISCLOSURE AGREEMENT FOR PROPERTY OWNER I-1 -i- OFFICIAL STATEMENT $17,790,000* CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 INTRODUCTION This Official Statement sets forth certain information concerning the issuance and sale by the City of Palm Desert, California (the "City") of $17,790,000* in principal amount of its Section 29 Assessment District (No. 2004-02) Limited Obligation Refunding Improvement Bonds, Series 2021 (the "Bonds"). The Bonds are issued pursuant to the Refunding Act of 1984 for Improvement Bond Act of 1915 ("1984 Refunding Act"), being Division 10 of the California Streets and Highways Code, a Resolution approving the issuance of the Bonds adopted by the City Council of the City on June 10, 2021 (the "Resolution of Issuance") and a Fiscal Agent Agreement dated as of July 1, 2021 (the "Fiscal Agent Agreement") by and between the City and U.S. Bank National Association, as Fiscal Agent (the "Fiscal Agent"). The District The City of Palm Desert Section 29 Assessment District (No. 2004-02) (the "District") was formed in accordance with the Municipal Improvement Act of 1913, being Division 12 of the California Streets and Highways Code (the "1913 Act"). The District is generally located in the northwest portion of the City, at the Northwest corner of Portola Avenue and Gerald Ford Drive. The District currently consists of a total of 776 current assessor parcels subject to the lien of the Reassessments. The District was formed for the purpose of acquiring, constructing, and installing water and sewer lines, storm drainage facilities, street improvements, and other capital improvements. The City issued its Section 29 Assessment District (No. 2004-02), Limited Obligation Improvement Bonds, Series 2007, of which $19,830,000 in aggregate principal amount remain outstanding (the "Prior Bonds"). The City Council of the City (the "City Council") adopted its Resolution No. [ ] on June 10, 2021, declaring its intention to issue bonds to refund the Prior Bonds and to levy reassessments (the "Reassessments") within the District to secure such refunding bonds under and pursuant to the 1984 Refunding Act. The City Council, by its Resolution No. [ ], adopted on June 10, 2021, approved a reassessment report, entitled "City of Palm Desert Section 29 Reassessment District No. 2004-02 Reassessment Report, May 24, 2021" (the "Reassessment Report"), with respect to the Assessment District, and prepared by Willdan Financial Services in connection with the proposed refunding and reassessment pursuant to Section 9523 of the 1984 Refunding Act, made certain findings in accordance with Section 9525 of the 1984 Refunding Act, and confirmed and adopted the reassessment and reassessment diagram presented with the Reassessment Report. See "APPENDIX A — REASSESSMENT REPORT". By its Resolution No. [ ], adopted by the City Council on June 10, 2021, the City Council authorized and provided for the issuance and sale of the Bonds pursuant to the 1984 Refunding Act. Property Ownership and Development The District is located entirely within the City at the northwest corner of Portola Avenue and Gerald Ford Drive. The area is generally known as the Gateway Area of North Palm Desert. The area is predominantly residential, with some commercial uses along Gerald Ford Drive in the vicinity of the District. Property in the District consists of approximately 260 acres, a significant portion of which is undeveloped or partially developed. Some of the undeveloped and partially developed property is currently owned by homebuilders and land developers, as described under "PROPERTY OWNERSHIP OF THE APPRAISED PARCELS." The District is made up of 301 parcels owned by individual property owners, making up 24.39% of the Reassessment lien; one * Preliminary, subject to change. 1 developed commercial parcel owned by Lowes HIW Inc. ("Lowes"), which makes up 6.58% of the Reassessment lien and undeveloped and partially developed property, which makes up the remaining (69.03%) portion of the Reassessment lien. The ownership of undeveloped and partially developed property is concentrated among six property owners. There are no delinquent property owners representing more than five percent (5%) of the remaining assessment lien. Currently there are no parcels subject to judicial foreclosure in the District. The undeveloped and partially developed property in the District is planned for future mixed -use development including commercial, multi -family residential (for -sale and for -rent) and single-family residential. A summary table describing property ownership/development project, property condition, assessed or appraised value of such property and percentage of Reassessment lien is shown below. Approximately 35% of the Reassessment lien is on properties with no current development plans and an estimated value -to -lien of 2.05:1* or less. See "PROPERTY OWNERSHIP OF APPRAISED PARCELS," "SPECIAL RISK FACTORS," "THE DISTRICT — Estimated Value -to -Lien Ratios and — The Appraisal" and "APPENDIX E — APPRAISAL REPORT" herein. SUMMARY OF PROPERTY OWNERSHIP AND DEVELOPMENT Ownership/Development Proiect MacLeod -Couch Land Company, LLC/MC Properties, LLCM Individual Property Owners(2) Ponderosa Homes II Inc. (Single-family Project)(') UHC 00357 Palm Desert, L.P.(1) GID Monterey, LLCM Lowes HIW Inc(2) GID Palm Desert, LLC (Dolce Project)(1 Lennar Homes of California, Inc. (Dolce Projectr Ponderosa Homes II Inc. (Multi -family Projectr) TOTAL: % of Reassessment Parcels Value Lien 2 $8,430,000 26.24% 301 136,520,287 24.39 110(3) 17,550,000 9.44 2 3,340,000 9.16 227 10,500,000 8.80 1 21,583,850 6.58 66 8,450,000 6.24 66 8,450,000 6.24 1 2,750,000 2.92 776 $217,574,137 100.00% Description of Property Condition raw land; commercial and multi -family residential zoning developed residential property single-family residential lots; semi -finished condition; 8 completed homes, 19 homes under construction, 83 vacant lots raw land; multi -family residential zoning multi -family residential lots; semi -finished condition developed commercial property single-family residential lots; semi -finished condition single-family residential lots; semi -finished condition rough graded; multi -family residential zoning (1) Value based on Appraisal with a date of value of May 1, 2021. (2) Value based on Fiscal Year 2020-21 assessed value shown on Riverside County Assessor's Secured Tax Roll. (3) Includes five parcels that are owned by individual homeowners that closed escrow in December 2020, those five parcels are still included in appraised value for the Ponderosa Homes II, Inc. single-family project. Source: The Appraiser; Willdan Financial Services. * Preliminary, subject to change. 2 INVESTMENT IN THE BONDS INVOLVES A SIGNIFICANT DEGREE OF RISK, AND EACH PROSPECTIVE INVESTOR SHOULD CONSIDER ITS FINANCIAL CONDITION AND THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE BONDS. SEE "SPECIAL RISK FACTORS" FOR A DISCUSSION OF SPECIAL RISK FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING THE INVESTMENT QUALITY OF THE BONDS. Use of Proceeds of the Bonds Proceeds of the Bonds will be used to: (1) defease and redeem the outstanding Prior Bonds; (2) fund the Reserve Fund; and (3) pay costs incurred in connection with the issuance of the Bonds. Source of Payment of the Bonds The Bonds are issued upon and secured by the unpaid Reassessments levied on properties within the District which secure the payment of the amount of interest and principal payable on the Bonds scheduled to be paid during the period of computation, excluding amounts payable during such period which relate to principal of the Bonds which are scheduled to be retired and paid before the beginning of such period (the "Debt Service"), pursuant to the 1984 Refunding Act, including without limitation Section 9538 thereof, and the Reassessment Report, approved by the City Council on June 10, 2021, and, together with interest thereon, constitute a trust fund for the redemption and payment of the principal of the Bonds and the interest thereon. Under the provisions of the 1984 Refunding Act, Reassessment installments sufficient to meet annual debt service on the Bonds are to be collected on the regular property tax bills sent to owners of property within the District against which there are unpaid Reassessments. These annual installments are to be paid into an Reassessment Fund (the "Reassessment Fund"), which will be held by the Fiscal Agent and used to pay Bond principal and interest as it becomes due. Security for the Bonds The Bonds are secured by a pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Reassessment Revenues and all moneys deposited in the Redemption Fund, the Reassessment Fund, and the Reserve Fund. "Reassessment Revenues" means the revenues received by the City in each Fiscal Year from the collection of the annual installments of the unpaid Reassessments, prepayments of any unpaid Reassessments, and proceeds from the sale of property for delinquent Reassessment installments. Each respective parcel in the District which is subject to an unpaid Reassessment is security for such Reassessment. The unpaid Reassessments represent fixed liens on the parcels of land assessed under the proceedings and failure to pay the Reassessments could result in proceedings to foreclose title to the delinquent property. The Reassessments do not constitute the personal indebtedness of the owners of assessed parcels, and in the event of an insufficiency of proceeds of a foreclosure sale to satisfy the delinquent amounts, statutory penalties and interest, and costs of foreclosure, the City has no recourse against the owner for the delinquency. See "SECURITY FOR THE BONDS" and "SPECIAL RISK FACTORS." Market Absorption Study Empire Economics, Inc., an economic and real estate consulting firm that provides consulting services only to public entities, prepared a report on the forthcoming residential for -sale as well as the nonresidential and apartment projects on the undeveloped or partially developed property subject to the lien of the Reassessments in the District (the "Market Absorption Study"). 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 include the absorption of the residential for -sale and nonresidential and apartment products. See "THE DISTRICT — Market Absorption Study" and "APPENDIX G — MARKET ABSORPTION STUDY." 3 Value of Property in the District The estimated assessed value of the property within the District subject to the Reassessment lien, as shown on the County of Riverside (the "County") secured property tax roll for Fiscal Year 2020-21, is $179,974,636. However, a property's assessed value is not necessarily indicative of its market value. Stephen G. White, MAI, Fullerton, California (the "Appraiser") prepared an appraisal report dated May 10, 2021 (the "Appraisal") of the 474 parcels of the undeveloped and partially developed property within the District subject to the lien of the Reassessments (the "Appraised Parcels"), with a date of value of May 1, 2021. The Appraiser estimated that the fee simple interest of the Appraised Parcels had an estimated market value of $59,470,000. The 302 parcels of fully developed property owned by individual homeowners and Lowes within the District subject to the lien of the Reassessments (the "Assessed Parcels") were valued using the Fiscal Year 2020-21 assessed value, which totals $158,104,137. The total value of the Appraised Parcels and the Assessed Parcels (the "Composite Value") is $217,574,137. Approximately 35% of the Reassessment lien is on properties with no current development plans and an estimated value -to -lien of 2.05:1* or less. See "PROPERTY OWNERSHIP OF APPRAISED PARCELS," "SPECIAL RISK FACTORS," "THE DISTRICT — Estimated Value -to -Lien Ratios and — The Appraisal" and "APPENDIX E — APPRAISAL REPORT" herein. Reserve Fund The City will direct the Fiscal Agent to establish a Reserve Fund (the "Reserve Fund") in the amount of the Reserve Requirement (described herein) from Bond proceeds, which amount will be transferred to the Redemption Fund in the event of delinquencies in the payment of the Reassessment installments to the extent of such delinquencies. The Reserve Fund will be maintained to the extent of collection of delinquent Reassessment payments and realization of proceeds from any foreclosure sales, in an amount equal to the Reserve Requirement, as defined herein. See "SECURITY FOR THE BONDS —Establishment of Funds — Reserve Fund" and "APPENDIX H — SUMMARY OF THE FISCAL AGENT AGREEMENT." If there are additional delinquencies after depletion of funds in the Reserve Fund, the City is not obligated to transfer into the Reserve Fund the amount of such delinquencies out of any other available monies of the City. Limited Obligation of the City The Bonds are limited obligations of the City, secured by and payable solely from the Reassessment Revenues and the amounts in the Redemption Fund, the Reassessment Fund, and the Reserve Fund. The Bonds are not payable from or secured by the general fund of the City. The Bonds are not secured by the general taxing power of the City, the County, or the State of California (the "State") or any political subdivision of the State, and neither the City, the County, nor the State nor any political subdivision of the State has pledged its full faith and credit for the payment of the Bonds. Summary of Information There follow brief descriptions of the Bonds, the District, the Prior Bonds, the City, the Fiscal Agent Agreement, and certain other matters. Such descriptions and the discussions and information contained herein do not purport to be comprehensive or definitive. All references in this Official Statement to documents, the Bonds, and the Reassessment proceedings are qualified in their entirety by references to the actual documents and the City's resolutions setting forth the terms thereof. Copies of the Fiscal Agent Agreement and other documents described in this Official Statement may be obtained from the City. * Preliminary, subject to change. 4 THE REFUNDING PLAN The Prior Bonds The Bonds are being issued for the purpose of providing a portion of the moneys, together with certain funds on deposit with U.S. Bank to defease and redeem the outstanding Prior Bonds. The Prior Bonds were issued to pay for a portion of the infrastructure improvements in the District, including street, improvements, acquisition and improvement of a retention basin, storm drain improvements, water and sewer improvements, and to a lesser extent, other related capital improvements. Proceeds of the sale of the Bonds, together with certain available moneys on hand, including moneys held in certain funds relating to the Prior Bonds will be deposited into an escrow fund (the "Escrow Fund") held by U.S. Bank National Association, acting as escrow agent ("Escrow Agent"), pursuant to an Escrow Agreement, dated as of July 1, 2021 (the "Escrow Agreement") by and between the Escrow Agent and the City. Amounts in the Escrow Fund will be used to defease the Prior Bonds, as of the date of issuance of the Bonds. Amounts deposited under the Escrow Agreement will be held in the Escrow Fund and may be invested in State and Local Government Series, open market treasury securities and/or in cash. Robert Thomas CPA, LLC, Minneapolis, Minnesota (the "Verification Agent") will verify that the amounts deposited, together with investment earnings thereon, if any, will be sufficient to pay the principal of and interest on the Prior Bonds maturing on September 2, 2021 and the redemption price of the outstanding Prior Bonds maturing on and after September 2, 2021, at a redemption price of 100%. The securities and other monies held under the Escrow Agreement are pledged to the payment of the Prior Bonds to be paid upon the maturity or redemption thereof, and neither the principal of nor the interest thereon will be available for the payment of the Bonds. Estimated Sources and Uses of Funds The proceeds of the sale of the Bonds will be deposited with the Fiscal Agent in trust pursuant to the terms of the Fiscal Agent Agreement in the amounts set forth below. A summary of the estimated sources and uses of funds associated with the sale of the Bonds follows: Estimated Sources of Funds: Principal Amount of Bonds Plus/Less: [Net] Original Issue Premium/Discount Less: Underwriter's Discount Plus: Prior Bonds Funds held by Fiscal Agent Plus: Prior Bonds Funds held by City Total Estimated Uses of Funds: Deposit to Costs of Issuance Fund(1) Deposit to Reserve Fund Escrow Fundy) Total (n (2) Includes fees of Bond Counsel, fees of Disclosure Counsel, fees and expenses of the Municipal Advisor, initial fees, expenses and charges of the Fiscal Agent, underwriter's discount, costs of printing the Official Statement, administrative fees of the City and other costs of issuance. To be disbursed according to the Escrow Agreement. 5 THE BONDS Authority For Issuance The District proceedings were conducted pursuant to the 1984 Refunding Act and a resolution of issuance adopted by the City Council of the City. The Bonds, which represent the unpaid Reassessments levied against privately owned property in the District, are issued pursuant to the provisions of the 1984 Refunding Act, the Resolution of Issuance and the Fiscal Agent Agreement. Registration The Bonds will be issued in fully registered form, without coupons, in the denomination of $100,000 and any integral multiple of $5,000 in excess thereof. The Bonds shall be lettered and numbered in a customary manner as determined by the City. The Bonds will be dated the date of delivery, and will bear interest at the rates per annum, and mature on the dates and in the amounts set forth on the front cover of this Official Statement. The Bonds are being issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC") and will be available to ultimate purchasers in the denomination of $100,000 and any integral multiple of $5,000 in excess thereof, under the book -entry system maintained by DTC. Ultimate purchasers of Bonds will not receive physical certificates representing their interest in the Bonds. So long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the Owners will mean Cede & Co., and will not mean the ultimate purchasers of the Bonds. Payments of the principal, premium, if any, and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co. so long as DTC or Cede & Co. is the registered owner of the Bonds. Disbursements of such payments to DTC's Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC's Participants and Indirect Participants, as more fully described herein. See "APPENDIX F THE BOOK -ENTRY SYSTEM." Payment Interest on the Bonds is payable March 2, 2022, and thereafter semiannually on September 2 and March 2 of each year (each an "Interest Payment Date"). Interest will be calculated on the basis of a 360-day year composed of twelve 30-day months. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated after a Record Date and before the close of business on the next Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated on or before the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if at the time of authentication of a Bond, interest is in default thereon, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon or from the Closing Date, if no interest has previously been paid or made available for payment thereon. Interest on the Bonds is payable by check of the Fiscal Agent mailed by first class mail, postage prepaid, on each Interest Payment Date, until the principal amount of a Bond has been paid or made available for payment, to the registered Owner thereof at such registered Owner's address as it appears on the Registration Books at the close of business on the Record Date preceding the Interest Payment Date or by wire transfer made on such Interest Payment Date upon written instructions of any owner of $1,000,000 or more in aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the applicable Record Date. The principal of the Bonds and any premium on the Bonds are payable in lawful money of the United States of America upon surrender of such Bonds at the Principal Office of the Fiscal Agent. Redemption Mandatory Sinking Fund Redemption. The Term Bonds are subject to redemption in part by lot from sinking fund payments made by the City, at a redemption price equal to the principal amount thereof to be 6 redeemed with accrued interest thereon to the redemption date, without premium, in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; provided, however, if some but not all of the Term Bonds of a maturity have been redeemed pursuant to provisions of the Fiscal Agent Agreement governing optional redemption or mandatory redemption from Reassessment prepayments, described below, each future sinking fund payment with respect to such Term Bonds will be reduced on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, so that the total amount of sinking fund payments with respect to such Term Bonds to be made subsequent to any such redemption shall be reduced by an amount equal to the principal amount of the Term Bonds so redeemed, all as shall be designated pursuant to written notice filed by the City with the Fiscal Agent: Bonds Maturing on September 2, 20 Redemption Date (September 2) (maturity) Principal Amount to be Redeemed $ Bonds Maturing on September 2, 20 Redemption Date Principal Amount (September 2) to be Redeemed $ (maturity) In lieu of a redemption pursuant to this section, the Fiscal Agent may apply amounts in the Redemption Fund to purchase Term Bonds at public or private sale, as and when and at such prices (including brokerage and other charges) as may be directed by the City, except that the purchase price (exclusive of accrued interest) may not exceed the redemption price then applicable to such Bonds, as set forth in writing by the City; provided, however, that no Term Bonds shall be purchased by the Fiscal Agent hereunder with a settlement date more than 60 days prior to the date on which the City would otherwise redeem such Term Bonds pursuant to this section. The principal amount of any Term Bonds so purchased by the Fiscal Agent shall be credited towards and shall reduce the Redemption Fund payment otherwise required to be made with respect to such Term Bonds on the applicable redemption date. Optional Redemption.* The Bonds are subject to optional redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, at the option of the City from moneys derived by the City from any source, at the following redemption prices expressed as percentages of the principal amount of the Bonds to be redeemed, together with accrued interest to the date of redemption: Redemption Dates Redemption Prices Prior to September 2, 2028 103% [September 2, 2028 and March 2, 2029 102] [September 2, 2029 and March 2, 2030 101] [September 2, 2030 and thereafter 100] * Preliminary, subject to change. 7 Mandatory Redemption from Prepayment of Reassessments.* The Bonds are subject to redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, from the prepayment of Reassessments or surplus amounts in the Reserve Fund as provided for in the Fiscal Agent Agreement, at the following redemption prices expressed as percentages of the principal amount of the Bonds to be redeemed, together with accrued interest to the date of redemption: Redemption Dates Redemption Prices Prior to September 2, 2026 103% September 2, 2026 and March 2, 2027 102 September 2, 2027 and March 2, 2028 101 September 2, 2028 and thereafter 100 Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be provided by registered or certified mail or by personal service or in any such other manner as is acceptable to such other institutions at least thirty (30) days prior to the date fixed for redemption to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Registration Books. In addition to the foregoing, the Fiscal Agent shall send a notice of redemption at least thirty (30) days prior to the redemption date, by first class mail, postage prepaid, or by overnight delivery service to the following: (i) each of the Securities Depositories, and (ii) one or more of the Information Services. Such notice shall state the date of such notice, the date of issue of the Bonds, the place or places of redemption, the redemption date, the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers (if any) and Bond numbers of the Bonds to be redeemed, or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called for redemption in part the portion of the principal of the Bond to be redeemed, shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. The cost of the mailing of any such redemption notice shall be paid by the City. Neither failure to receive any redemption notice nor any defect in such redemption notice so given shall affect the sufficiency of the proceedings for the redemption of such Bonds. Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue, maturity and Bond number, the Bonds being redeemed with the proceeds of such check or other transfer. The City shall have the right to rescind any optional redemption, by written notice to the Fiscal Agent at least one Business Day prior to the date fixed for redemption. Any notice of such redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the Business Day preceding the Interest Payment Date upon which such Bonds are to be redeemed, and such cancellation shall not constitute a default under this Agreement. The City and the Fiscal Agent shall have no liability to the Owners or any other party related to or arising from such rescission of redemption. The Fiscal Agent shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent. Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds called for redemption shall have been deposited in the Redemption Fund or the Reassessment Prepayment Account, as applicable, such Bonds or portions thereof shall cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price, and interest shall cease to accrue on the Bonds or portions thereof to be redeemed on the redemption date specified in the notice of redemption. * Preliminary, subject to change. 8 Investments Moneys in any fund or account created or established by the Fiscal Agent Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer's Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments. In the absence of any such Officer's Certificate, the Fiscal Agent shall hold such moneys uninvested. See APPENDIX H — "SUMMARY OF THE FISCAL AGENT AGREEMENT" herein. Debt Service Schedule Set forth below is the debt service schedule for the Bonds, assuming no early redemption. CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 ANNUAL BOND DEBT SERVICE Year Ending Principal September 2 Amount 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 Interest Source: Stifel, Nicolaus & Company, Incorporated. Total Bond Debt Service 9 SECURITY FOR THE BONDS Reassessments The Bonds are issued upon and secured by the unpaid Reassessments against the property in the District, together with interest thereon, and the unpaid Reassessments, together with interest thereon, constitute a trust fund for the redemption and payment of the principal of the Bonds and the interest thereon. The Bonds are further secured by the monies in the Redemption Fund, the Reassessment Fund, and the Reserve Fund created pursuant to the Fiscal Agent Agreement. Principal of and interest and redemption premiums, if any, on the Bonds are payable exclusively out of the Redemption Fund. The Bonds are secured by a pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Reassessment Revenues and all moneys deposited in the Redemption Fund, the Reassessment Fund, and the Reserve Fund. The Reassessments and each installment thereof and any interest and penalties thereon constitute a lien against the parcels of land on which the Reassessments are levied until the same are paid. Such lien is subordinate to all fixed special assessment liens previously imposed upon the same property, but has priority over all existing and future private liens and over all fixed special assessment liens which may thereafter be created against the property. Such lien is coequal to and independent of the lien for general property taxes. The Bonds are not secured by the general taxing power of the City, the County, or the State or any political subdivision of the State, and neither the City, the County, the State nor any political subdivision of the State has pledged its full faith and credit for the payment thereof. Although the unpaid Reassessments constitute fixed liens on the parcels assessed, they do not constitute the personal indebtedness of the owners of said parcels. Furthermore, there can be no assurance as to the ability or the willingness of such owners to pay the unpaid Reassessments. See "SPECIAL RISK FACTORS — Owner Not Obligated to Pay Bonds or Reassessments." In addition, there can be no assurance that the present owners will continue to own their parcel in the District. The unpaid Reassessments will be collected in annual installments, together with interest on the declining balance, on the Riverside County tax roll on which general taxes on real property are collected, and are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do said general taxes, and the property upon which the Reassessments were levied is subject to foreclosure, sale and redemption if the Reassessment installments are not paid when due. These annual installments are to be paid into the Reassessment Fund held by the Fiscal Agent, for transfer into the Redemption Fund, which will be held by the Fiscal Agent and used to pay the principal of (including any sinking fund payments) and interest on the Bonds as they become due. The installments billed against all of the parcels of property in the District subject to the Reassessments will be equal to the total principal (including any sinking fund payments) and interest coming due on all of the Bonds that year, plus, with respect to each parcel in the District, an amount to cover the administrative charges of the City related to the Bonds and the Reassessments. Collection of Reassessments Pursuant to the 1984 Refunding Act, installments of principal and interest sufficient to meet annual debt service on the Bonds will be billed by the County to the owner of each parcel within the District and against which there are unpaid Reassessments. Upon receipt by the County and transfer to the City, reassessment installments are to be deposited into the Reassessments Fund for transfer to the Redemption Fund, which shall be held by the Fiscal Agent and used to pay principal and interest payments on the Bonds as they become due. The Reassessment installments billed against each parcel each year represent pro rata shares of the total principal (including any sinking fund payments) and interest coming due that year, based on the percentage which the Reassessment against that parcel bears to the total of Reassessments in connection with the refunding. Pursuant to the Fiscal 10 Agent Agreement, payment of the principal of (including any sinking fund payments) and interest on the Bonds is secured by moneys in the Redemption Fund and certain other funds established under the Fiscal Agent Agreement. The City has no obligation to advance funds to replenish the Reserve Fund except to the extent that delinquent Reassessments are paid or proceeds from foreclosure sales are realized. Additionally, the City has covenanted to cause the institution of judicial foreclosure proceedings following a delinquency, and thereafter to diligently cause prosecution to completion of such foreclosure proceedings upon the lien of delinquent unpaid Reassessments as described in "Covenant to Foreclose" below. The City is not required to bid at the foreclosure sale. District Not Included in Teeter Plan Although the Riverside County Board of Supervisors has adopted the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the "Teeter Plan") which allows each entity levying secured property taxes in the County to draw on the amount of property taxes levied rather than the amount actually collected, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code, and the City's ad valorem taxes are included in the Teeter Plan, the District is not included in the Teeter Plan. Consequently, the District may not draw on the County Tax Loss Reserve Fund in the event of delinquencies in Reassessment installments and collections of Reassessments will reflect actual delinquencies. Covenant to Foreclose The City covenants in the Fiscal Agent Agreement for the benefit of the Owners of the Bonds that it will order, and cause to be commenced, judicial foreclosure proceedings against any parcel with at least two (2) delinquent Reassessment installments by the December 1 following the close of the Fiscal Year in which the second of such installments was due, and will commence judicial foreclosure proceedings against all properties with delinquent Reassessment installments by the December 1 following the close of each Fiscal Year in which it receives Reassessment Revenues in an amount which is less than ninety-five percent (95%) of the total Reassessment Revenues which were to be received in the Fiscal Year and diligently pursue to completion such foreclosure proceedings; provided, however, the City may elect to defer the commencement of foreclosure proceedings with respect to any property so long as (i) the amount on deposit in the Reserve Fund is equal to the Reserve Requirement and (ii) the City is current in the payment of Debt Service. Notwithstanding the foregoing, if at any time, the County's Teeter Plan (adopted pursuant to Sections 4701 through 4717 of the California Revenue and Taxation Code) is in effect and is made applicable to the Assessment District and the Reassessments being levied in connection with the Bonds, the City may, in its discretion, elect not to commence any judicial foreclosure proceeding pursuant to the foregoing paragraph or defer the commencement of such proceedings until such time as the City deems appropriate. Establishment of Funds For administering the proceeds of the sale of Bonds and payment of interest and principal on the Bonds, the Fiscal Agent will establish and maintain five funds or accounts under the Fiscal Agent Agreement to be known as the Costs of Issuance, the Reassessment Fund, the Reassessment Prepayment Account, the Redemption Fund and the Reserve Fund. See also "APPENDIX H — SUMMARY OF FISCAL AGENT AGREEMENT." Costs of Issuance Fund. There is established, as a separate account to be held by the Fiscal Agent, the "Costs of Issuance Fund" into which shall be deposited the proceeds of the sale of the Bonds. Moneys in the Costs of Issuance Fund shall be held in trust by the Fiscal Agent and shall be disbursed for the payment or reimbursement of Costs of Issuance. Amounts in the Costs of Issuance Fund are not pledged to the payment of the Bonds. Reassessment Fund. There is established in the Fiscal Agent Agreement, as a separate account to be held by the Fiscal Agent, the Reassessment Fund to the credit of which the Fiscal Agent shall deposit all Reassessment 11 Revenues received by the Fiscal Agent from the City except for the prepayment of Reassessments. Upon receiving any Reassessment Revenues from the County, the City shall retain the amounts included up to the amount budgeted and assessed pursuant to California Streets and Highways Code Section 10204(f) and Sections 8682 and 8682.1 of the Improvement Bond Act of 1915, as set forth in Division 10 (commencing with Section 8500) of the California Streets and Highways Code (the "1915 Act"), or a portion thereof, for payment of the City's expenses associated with the collection of the Reassessment Revenues and payment of the annual costs associated with the registration of the Bonds and the other duties of the Fiscal Agent provided for in the Fiscal Agent Agreement, and transfer the remainder of the Reassessment Revenues received to the Fiscal Agent for deposit in the Reassessment Fund. Moneys in the Reassessment Fund shall be held by the Fiscal Agent for the benefit of the City and the Owners of the Bonds, as provided in the Fiscal Agent Agreement, shall be disbursed as provided therein and, pending disbursement, shall be subject to a lien in favor of the Owners of the Bonds. Not later than the third Business Day preceding each Interest Payment Date, the Fiscal Agent shall withdraw from the Reassessment Fund and deposit in the Redemption Fund the amount which is necessary to pay Debt Service on the Interest Payment Date. Reassessment Prepayment Account. The Fiscal Agent shall establish and maintain within the Reassessment Fund a "Reassessment Prepayment Account" for administration of prepayments of the Reassessments. Amounts received from property owners in the Reassessment District as prepayments of the Reassessment pursuant to the 1915 Act shall be deposited by the City Treasurer and held by the Fiscal Agent in the Reassessment Prepayment Account for application pursuant to Fiscal Agent Agreement. The City shall identify to the Fiscal Agent in writing the amount of such prepayment. The Fiscal Agent also shall deposit in the Reassessment Prepayment Account amounts transferred thereto from the Reserve Fund pursuant to Fiscal Agent Agreement. Amounts in the Reassessment Prepayment Account shall be used to pay the principal of and redemption premium on Bonds to be called for redemption as provided in the next sentence. Subject to the priority of disbursements set forth in the Fiscal Agent Agreement, whenever and to the extent monies on deposit in the Reassessment Prepayment Account are sufficient to pay on redemption the principal of Bonds in integral $5,000 amounts plus the redemption premium thereon (if any), the Fiscal Agent shall advance the maturity of and call Bonds for redemption pursuant to the Fiscal Agent Agreement. See "APPENDIX H SUMMARY OF THE FISCAL AGENT AGREEMENT." On or after each redemption date, upon presentation and surrender thereof, the Fiscal Agent shall pay the principal of and redemption premium on each Bond the maturity of which has been so advanced from monies in the Reassessment Prepayment Account. Interest accrued on each such Bond shall be paid from monies in the Redemption Fund. Redemption Fund. There is established under the Fiscal Agent Agreement, as a separate account to be held by the Fiscal Agent, the "Redemption Fund" to the credit of which deposits shall be made as required by the provisions of such agreement. Moneys in the Redemption Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of (including any sinking fund payments), and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Redemption Fund and pay to the Owners of the Bonds the principal of (including any sinking fund payments) and interest and any premium then due and payable on the Bonds on the Interest Payment Date. If, on any Interest Payment Date, there will be insufficient funds in the Redemption Fund to make the payments required, the Fiscal Agent shall apply the available funds first to the payment of interest on the Bonds, and then to the payment of principal due on the Bonds including, and on a pro rata basis with, any scheduled sinking fund payments. Reserve Fund. Out of the proceeds of the sale of the Bonds, there is established under the Fiscal Agent Agreement, as a separate account to be held by the Fiscal Agent, the Reserve Fund to the credit of which a deposit of Bond proceeds shall be made, which deposit is equal to the Reserve Requirement as of the Closing Date. The "Reserve Requirement" is defined in the Fiscal Agent Agreement to mean, as of the date of calculation, an amount equal to the least of (i) Maximum Annual Debt Service on the then Outstanding Bonds; (ii) 10% of the original 12 amount of the Bonds ("amount" meaning the principal amount of the Bonds, unless the Bonds were issued with original issue discount greater than two percent of the principal amount, or original issue premium greater than the sum of two percent of the principal amount plus original issue premium attributable exclusively to reasonable underwriters' compensation, in which case "amount" means issue price); or (iii) 125% of average Annual Debt Service on the then Outstanding Bonds. Moneys in the Reserve Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of the principal of and interest and any premium on the Bonds and shall be subject to a lien in favor of the Owners of the Bonds. Except as provided below, moneys in the Reserve Fund shall be used solely for the purpose of making transfers to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the amount then required for the payment of the principal of (including any scheduled sinking payments), and interest on the Bonds, or for the purpose of redeeming the Bonds. Amounts transferred from the Reserve Fund to the Redemption Fund shall be restored by the City to satisfy the then applicable Reserve Requirement from (i) the collection of delinquent installments on the Reassessments levied on parcels for which such installments are delinquent, and penalties and interest thereon, whether by judicial foreclosure proceedings or otherwise, as soon as is reasonably possible following the receipt by the City of such delinquent installments, penalties and interest, and (ii) monies transferred by the Fiscal Agent as delinquent principal, interest, and penalties on a Reassessment being prepaid pursuant to the Fiscal Agent Agreement. Whenever transfer is made from the Reserve Fund to the Redemption Fund due to a deficiency in the Redemption Fund, the Fiscal Agent shall report such fact to the City. Whenever a Reassessment levied on a lot or parcel of property within the District is paid off, the Fiscal Agent shall, upon receiving an Officer's Certificate regarding such Reassessment, transfer from the Reserve Fund to the Reassessment Prepayment Account an amount equal to the reduction in such Reassessment determined pursuant to Section 8881 of the 1915 Act, which amount shall be specified in the Officer's Certificate. Upon receipt of such an Officer's Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy of the statements contained therein, and shall be absolutely protected and incur no liability in relying on such Officer's Certificate. Whenever, on any September 3, the amount in the Reserve Fund, less Investment Earnings which must be rebated to the United States pursuant to the Fiscal Agent Agreement, exceeds the then applicable Reserve Requirement, the Fiscal Agent must provide written notice to the City of the amount of the excess and must, subject to the requirements of the Fiscal Agent Agreement, transfer an amount equal to the excess from the Reserve Fund to the Redemption Fund to be used for the payment of Debt Service on the next succeeding Interest Payment Date in accordance with the Fiscal Agent Agreement. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay all of the then Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving written direction from the City, transfer money from the Reserve Fund to the Reassessment Prepayment Account and the Redemption Fund as provided in the next succeeding sentence to redeem all of the Outstanding Bonds on the next succeeding Interest Payment Date. To effect such redemption, the Fiscal Agent shall make the following transfers from the Reserve Fund: (i) an amount equal to the principal and premium on the Bonds due upon redemption to the Reassessment Prepayment Account, and (ii) an amount equal to the interest thereon accrued to the redemption date to the Redemption Fund. In the event that the amounts so transferred from the Reserve Fund to the Reassessment Prepayment Account and the Redemption Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Reserve Fund shall be transferred by the Fiscal Agent to the City to be applied as provided in Section 8885 of the California Streets and Highways Code. 13 Priority of Lien Each Reassessment and each installment thereof, and any interest and penalties thereon, constitutes a lien against the parcel of land on which it was imposed until the same is paid. Such a lien is subordinate to all fixed special assessment liens previously imposed upon the same property, but has priority over all private liens and over all fixed special assessment liens which may thereafter be created against the property. Such a lien is co- equal to and independent of the lien for general property taxes and special taxes, including, without limitation, special taxes created pursuant to the "Mello -Roos Community Facilities Act of 1982" (being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California), whenever created against the property. 14 THE DISTRICT General The proceedings for the reassessment of the District were conducted pursuant to the Act and a resolution of intention adopted by the City Council on June 10, 2021. The City Council confirmed a total reassessment in the Reassessment District of $17,915,000 on June 10, 2021 on the basis of the preliminary principal amount for the Bonds, subject to modification and finalization based on the sale of the Bonds as limited by the findings made by City Council pursuant to Section 9525 of the 1984 Refunding Act, and ordered such confirmed reassessment to be recorded following modification and finalization. See "APPENDIX A — REASSESSMENT REPORT." Under the Act, any reassessment so approved and confirmed shall not be deemed to be an assessment within the meaning of, and may be ordered without compliance with the procedural requirements of, Article XIIID of the California Constitution. See "SPECIAL RISK FACTORS — Proposition 218" herein. As of [date], the District is made up of 301 residential parcels owned by individual property owners (property owners with a percentage of the Reassessment lien of less than 1%), accounting for a total of 24.39% of the lien; one developed commercial parcel owned by Lowes, which makes up 6.58% of the lien and undeveloped and partially developed property, which makes up the remaining portion (69.03%) of the lien. The undeveloped and partially developed property consists of 474 parcels. See "SPECIAL RISK FACTORS — Risks Associated With Real Estate Secured Investments" herein. Approximately 35% of the Reassessment lien is on properties with no current development plans and an estimated value -to -lien of 2.05:1* or less. See "PROPERTY OWNERSHIP OF APPRAISED PARCELS," "SPECIAL RISK FACTORS," herein and "— Estimated Value - to -Lien Ratios and — The Appraisal" below and "APPENDIX E — APPRAISAL REPORT" hereto. The City of Palm Desert The City of Palm Desert is located in the Coachella Valley and is approximately midway between the cities of Indio and Palm Springs, 117 miles east of Los Angeles, 118 miles northeast of San Diego and 515 miles southeast of San Francisco. The City was incorporated on November 26, 1973, as a general law city. In 1998 the City became a charter city. The City occupies an area of approximately 24 square miles. Elevation of the City is 243 feet and the mean temperature is 73.1 degrees. Except for the summers, the weather is mild; annual average rainfall is 3.38 inches. According to State Department of Finance estimates, the City population as of January 1, 2021 was 52,892. See "Appendix B — THE CITY OF PALM DESERT GENERAL INFORMATION" for general demographic information on the City and County. Location of the District The District is located entirely within the City at the northwest corner of Portola Avenue and Gerald Ford Drive. The area is generally known as the Gateway Area of North Palm Desert. The area is predominantly residential, with some commercial uses along Gerald Ford Drive in the vicinity of the District. Development Status and Valuation As noted above, the District is made up of the Assessed Parcels (302 fully developed parcels accounting for 30.97% of the Reassessment lien) and the Appraised Parcels (undeveloped and partially developed property accounting for the remaining portion (69.03%) of the Reassessment lien). The Appraised Parcels consist of 474 parcels. The ownership of the Appraised Parcels are as follows: 2 parcels are owned by MC Properties LLC and Macleod Couch Land Company LLC as tenants in comment (collectively, "MC"); 66 parcels are owned by GID Palm Desert, LLC ("GID Palm Desert"); 66 parcels are owned by Lennar Homes of California, Inc. ("Lennar Homes"); 106 parcels are owned by Ponderosa Homes II Inc. ("Ponderosa"); 2 parcels are owned by UHC 00357 Palm Desert, L.P. ("UHC"); 227 parcels are owned by GID Monterey, LLC ("GID Monterey") and 5 parcels that * Preliminary, subject to change. 15 were previously owned by Ponderosa that currently owned by individual homeowners. See "SPECIAL RISK FACTORS" herein. The aggregate assessed value of the parcels in the District, with unpaid assessments, as shown on the Riverside County Assessor's roll for Fiscal Year 2020-21 is $179,974,636. Table 1 below reflects the assessed value history of property within the original District subject to the assessment lien from Fiscal Year 2011-12 through Fiscal Year 2020-21. TABLE 1 CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 ASSESSED VALUE HISTORY Fiscal Parcels Year Levied 2011-12 564 2012-13 626 2013-14 626 2014-15 666 2015-16 666 2016-17 666 2017-18 777 2018-19 777 2019-20 777 2020-21 777(1) Assessed Value Land $46,914,653 49,712,904 51,824,048 52,032,986 53,638,244 57,671,028 58,740,041 62,034,365 63,218,284 63,867,916 Assessed Value Improved $33,928,047 40,210,992 50,151,606 65,946,698 82,790,438 98,805,664 105,019,380 108,264,502 112,120,005 116,106,720 Total Assessed Value $80,842,700 89,923,896 101,975,654 117,979,684 136,428,682 156,476,692 163,759,421 170,298,867 175,338,289 179,974,636 Source: Riverside County Assessor, compiled by Willdan Financial Services. (1) One parcel prepaid their assessment in Fiscal Year 2020-21 and will not be subject to the Reassessment lien. Percent Change NA 11.23% 13.40 15.69 15.64 14.69 4.65 3.99 2.96 2.64 A property's assessed value is not necessarily indicative of its market value. The Appraisal of the Appraised Parcels with a date of value of May 1, 2021 estimated that the fee simple interest of the Appraised Parcels had an estimated market value of $59,470,000. The Assessed Parcels were valued using the Fiscal Year 2020-21 assessed value, which totals $158,104,137. The Composite Value is $217,574,137. The Appraised Parcels are responsible for approximately 69% of the Reassessment lien and the Assessed Parcels are responsible for approximately 31 % of the Reassessment lien. See "— The Appraisal" below and "APPENDIX E — APPRAISAL REPORT" attached hereto. 16 Estimated Value -to -Lien Ratios According to the County's Fiscal Year 2020-21 property ownership records, there were 777 parcels in the District, but one parcel recently prepaid, so there will only be 776 parcels subject to the Reassessment lien. Based on the share of the lien representing the $17,790,000* principal amount of Bonds, the overall value -to -lien ratio for Fiscal Year 2020-21 is approximately 12.23* to 1 (not including other outstanding direct and overlapping tax indebtedness applicable to assessable property in the District). The tables below show the estimated value -to -lien ratios by category and estimated value -to -lien ratios by property owner. The appraised values were used for the Appraised Parcels and the assessed values were used for the Assessed Parcels. See — "APPENDIX E — APPRAISAL REPORT" and "SPECIAL RISK FACTORS — Land Values" herein. Value -to -Lien Cateeory 0.00:1 to 4.99:1 5.00:1 to 9.99:1 10.00:1 to 14.99:1 15.00:1 to 19.99:1 > 20.00:1 All (1) TABLE 2 CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 ESTIMATED VALUE -TO -LIEN RATIOS BY CATEGORY Number of Parcels 5 364 121 134 152 776 Percent of Parcels 0.64% 60.57 1.93 17.27 19.59 100.00% Composite Value (1) $14,520,000 45,050,330 27,736,551 53,545,804 78.721.452 $217,574,137 Reassessment Lien (2)* $6,815,740 5,478,434 1,398,802 1,946,189 2.150.835 $17,790,000 Percent of Reassessment Lien 38.31% 30.80 7.86 10.94 12.09 100.00% Appraised Parcels based on the Appraisal for the property prepared by the Appraiser with a date of value of May 1, 2021. Assessed Parcels based on th Roll for Fiscal Year 2020-21. (2) Estimated Reassessment lien based on share of refunding bonds. Source: Willdan Financial Services. * Preliminary, subject to change. 17 Composite Value -to -Lien Ratio* 2:13:1 8.22:1 18.40:1 27.51:1 36.60:1 12.23:1 e County Assessor's Secured TABLE 3 CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 ESTIMATED VALUE -TO -LIEN RATIO BY PROPERTY OWNER Property Owner MC UHC GID PALM DESERT GID MONTEREY LENNAR HOMES LOWES PONDEROSA (SFR) PONDEROSA (MFR) OTHER PROPERTY OWNERS All (1) (2) (3) Number of Parcels 2 2 66 227 66 1 110(3) 1 301 776 Composite Value (1) $8,430,000 3,340,000 8,450,000 10,500,000 8,450,000 21,583,850 17,550,000 2,750,000 136.520.287 $217,574,137 Percent of Composite Value 3.87% 1.54 3.88 4.83 3.88 9.92 8.07 1.26 62.75 100.00% Reassessment Lien (2)* $4,668,124 1,628,698 1,109,561 1,565,858 1,109,561 1,171,164 1,678,849 518,917 4.339.267 $17,790,000 Percent of Reassessment Lien 26.24% 9.16 6.24 8.80 6.24 6.58 9.44 2.92 24.39 100.00% Composite Value -to -Lien Ratio* 1.81:1 2.05:1 7.62:1 6.71:1 7.62:1 18.43:1 10.75:1 5.30:1 31.46:1 12.23:1 Appraised Parcels based on the Appraisal for the property prepared by the Appraiser with a date of value of May 1, 2021. Assessed Parcels based on the County Assessor's Secured Roll for Fiscal Year 2020-21. Estimated Reassessment lien based on share of refunding bonds. Includes five parcels that are owned by individual homeowners that closed escrow in December 2020, those five parcels are still included in appraised value for the Ponderosa Homes II, Inc. single-family project. Source: Willdan Financial Services. No assurance can be given that any of the foregoing value -to -lien ratios will be maintained during the period of time that the Bonds are outstanding. The City has no control over future property values or the amount of additional indebtedness that may be issued in the future by other public agencies, the payment of which, through the levy of a tax or an assessment, is on a parity with the Reassessments. See "SPECIAL RISK FACTORS — Land Values" herein. 18 Direct and Overlapping Debt The ability of an owner of land within the District to pay the Reassessment installments could be affected by the existence of other taxes and assessments imposed upon the property. These other taxes and assessments which secure direct and overlapping debt outstanding as of June 1, 2021 in the District are set forth in Table 4 below (the "Debt Report"). The Debt Report sets forth those entities which have issued debt and does not include entities which only levy or assess fees, charges, ad valorem taxes or special taxes. The Debt Report includes the principal amount of the Bonds. The Debt Report has been derived from data assembled and reported to the City as of June 1, 2021. Neither the City nor the Underwriter have independently verified the information in the Debt Report and do not guarantee its completeness or accuracy. The agencies listed, as well as other public agencies may issue indebtedness or additional indebtedness on property within the District at any time. See "SECURITY FOR THE BONDS — Priority of Lien" herein. TABLE 4 CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 DIRECT AND OVERLAPPING DEBT 2020-21 Composite Value: $217,574,137 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Desert Community College District General Obligation Bonds Palm Springs Unified School District General Obligation Bonds City of Palm Desert Reassessment District No. 2004-02 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT Ratios to Composite Value: Direct Debt ($17,790,000) 8.18%* Total Direct and Overlapping Tax and Assessment Debt 9.71 %* Source: California Municipal Statistics, Inc.; Willdan Financial Services. * Preliminary, subject to change. % Applicable 0.203% 0.540 100. Debt 6/1/21 $798,534 2,540,499 17.790,000* $21,129,033 19 Delinquency The following table sets forth delinquency information for the assessment installments levied in the original District for the ten (10) most recent fiscal years. There are no delinquent property owners representing more than five percent (5%) of the remaining assessment lien. TABLE 5 CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 FISCAL YEAR END SUMMARY OF DELINQUENT REASSESSMENTS Annual Parcels Amount Percent Fiscal Year Parcels Levied Levy Amount Delinquent Delinquent Delinquent 2011-12 564 $1,976,825 7 $7,709 0.39% 2012-13 626 1,972,322 5 5,836 0.30 2013-14 626 1,980,349 3 3,298 0.17 2014-15 666 1,806,493 4 3,140 0.17 2015-16 666 1,795,871 4 3,504 0.20 2016-17 666 1,798,179 4 4,912 0.27 2017-18 777 1,800,822 5 4,069 0.23 2018-19 777 1,808,621 1 752 0.04 2019-20 777 1,809,175 3 2,252 0.12 2020-21 (1) 777 905,525 6 4,260 0.47 (1 As of [date]. Source: Riverside County Tax Collector, compiled by Willdan Financial Services. Market Absorption Study General. The City retained Empire Economics, Inc., ("Empire") an economic and real estate consulting firm that provides consulting services only to public entities, to perform an absorption study for the forthcoming residential for -sale as well as the nonresidential and apartment projects in the District. A copy of the Market Absorption Study is set forth in APPENDIX G hereto. 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 residential for -sale and non-residential and apartment products. The Market Absorption Study described the favorable factors for the planned community, mortgage rates and developer prices. Empire was retained to project absorption value for the undeveloped and partially developed property in the District. Forthcoming Products. The Market Absorption Study includes an estimate absorption schedule for the forthcoming residential for -sale products in the District. Empire's most probable forecast of absorption for the District takes into account macroeconomic and microeconomic factors in arriving at its estimated residential for - sale absorption escrow closing by homeowners schedules: • Sage — Detached (Ponderosa single-family project): Currently active, market entry in Fall 2020. • Dolce — Detached (GID Palm Desert and Lennar): Estimated market entry: 2024 Previously, 27 homes closed escrow, and project on hold. • Monterey — Attached (GID Monterey): Estimated market entry: 2025 Previously, 20 homes closed escrow, and project on hold. 20 Empire's absorption commences once the project commences closings to homeowners; accordingly, based upon representations from the developer, the time schedule is as follows: • Prior to February 2021: 53 homeowners. • 2021: March — December: closings to homeowners: 19. • 2022-2025: closings to homeowners increase, reaching a peak level of 74 in 2025, as all of the three projects are on the marketplace. • 2026-2028: closings to homeowners stay at a high level of about 63-69 per year. • 2029-2030: closings to homeowners decline as projects are closed -out. The estimated absorption schedules by Empire are based upon the most probable economic scenario regarding economic/housing market conditions, however, potential risk factors that may adversely impact the absorption rates are as follows: potential impacts from COVID-19 variations that require longer times for effective vaccinations to be developed and distributed, thereby resulting in some closures that adversely impact the economy; increases in mortgage rates; new residential development activity in the vicinity of the District which may trigger market competition and softness in prices. See "SPECIAL RISK FACTORS — Risks Associated with Real Estate Secured Investments" and "APPENDIX G — MARKET ABSORPTION STUDY." The Market Absorption Study reports that the District is located in a favorable location in the City in close proximity to Interstate 10 as well as established commercial retail centers. The residential for -sale product types feature a diversity of single-family and attached for sale product types. The competitive market analysis for the currently active project in the District, Sage by Ponderosa Homes, revealed that its prices along with their special assessments are regarded as being competitive in the marketplace. The Market Absorption Study also showed that mortgage rates have declined significantly, reducing housing payments. While housing prices have risen significantly, increasing the housing payments due to higher principal component as well as higher property taxes. The combined impacts for these factors have counter -balanced each other resulting in stable monthly payments from January 2019 through December 2020. The composition of Coachella Valley's economy has resulted in it being more impacted by COVID-19 due to the relatively higher concentration of employment in accommodation/food services: 22% of Coachella Valley as compared to about 10% of California. Conversely, the Coachella Valley has lower shares of employment in the sectors that are showing significant improvement, such as essential industries and those that can better accommodate telecommunicating. The Market Absorption Study focused on the Appraised Parcels within the District. The characteristics of the Appraised Parcels are as follows: single-family detached homes, multi -family apartments, townhomes and commercial property, some with active development plans in place and others without any current development plans. With regards to the development of new single-family detached homes in the Coachella Valley, since 2008, there has been only moderate increase in the level of such activity, about 1,000 homes annually. Furthermore, for the City in particular, its share of the Coachella Valley's activity has declined from 20% during 2010-2014 to less than 5% in recent years. The absorption analysis identified four currently active comparable projects situated in Palm Desert and its vicinity. These projects have sales rates that range from 6 to 20 homes per year for an overall average of 11 homes per year which is well below what is typically observed in the marketplace. Empire's forecast of the marketing potential of the major nonresidential and apartment properties in the District based upon a consideration of the market demand/supply conditions discussed above on development patterns along with the economic recovery of the Coachella Valley economy. 21 Potential Development. The term "marketing development potential" utilized herein is meant to signify to what degree general economic and nonresidential & apartment/residential market conditions in the Coachella Valley and Palm Desert provide a sufficient amount of support for the development of the various parcels. The time required between the "market development potential" and the "actual occupancy" of the buildings may be about 2-3 years due to planning approvals/construction. However the owner of the property may have a different perspective regarding its development and or investment potential, and as such may not respond as expected to the current market conditions. Ponderosa: Tract Map: 36351 8.1 Acres near Dinah Shores and Portola Avenues has entitlements for 160 multi -family apartment units; of these, 137 are market -rate units and the balance of 23 are affordable units. As compared to the other two parcels that have multi -family apartments, this parcel/project is considered to have more favorable prospects. Specifically, Ponderosa Homes has a development/construction strategy currently in progress and presently has an active project offering new for -sale single-family detached homes that are adjacent to the apartment site. The location/product type is expected to commence construction in Fall 2022 with rental occupancies occurring by early 2024. MC: APNs 694-130-016 and 694-130-021 have a prime location with high traffic counts being off Monterey Ave, for the front part of the property. Given there is a development to the south that has a Lowes and condo rentals (The Enclave), the development pattern will likely be similar with retail in front next to Monterey Ave. and multi -family in the back. This location faces competition from future proposed development at Monterey Ave. and Dinah Shore Ave, as well as the Ponderosa Homes project, as this location has higher traffic counts, more existing retail and more nearby commercial tenants. The lack of significant apartments in the area is also a concern for future apartments. This location/product type is expected to have favorable "marketing development potential" starting in 2025 for multi -family apartments and 2025 for retail. UHC: APNs 694-130-17 and 694-130-18 has a secondary location in the market east of Gateway Dr. and south of Dick Kelly, further easterly of Monterey Ave. This area is primarily residential infill, with multi- family/apartments being the logical choice. However, it may take longer to develop given future competition from Ponderosa and MC properties which likely will be developed first. This location/product type is expected to have favorable "marketing development potential" starting in 2027. The Appraisal General. The Appraiser prepared the Appraisal at the request of the City to estimate the appraised value for Appraised Parcels in the District. A copy of the Appraisal is set forth in APPENDIX E hereto. The description herein of the Appraisal is intended for limited purposes only; the Appraisal should be read in its entirety. The conclusions reached in the Appraisal reflect the Appraiser's opinion of value and are subject to certain assumptions and qualifications which are set forth in the Appraisal. The Appraiser valued the Appraised Parcels within the District. The properties appraised consist of only the Appraised Parcels in the District. These are the parcels for which there was no structure assessed value as of the January 1, 2020 assessed valuation, and three parcels for which there was partial structure assessed value which were homes under construction as of the January 1, 2020 assessed valuation. The purpose of the Appraisal was to estimate the market values of the Appraised Parcels by each separate ownership, reflecting the as is physical and entitlement condition of each property, and reflecting the status of home construction. Although the District consists of a total of 776 assessor parcels subject to the Reassessment lien, the Appraisal comprises only the Appraised Parcels (474 assessor parcels either consisting of undeveloped land, or in the case of the Sage Neighborhood by Ponderosa, the current assessed values reflect just partial construction for the 3 completed model homes and land only for the other completed homes and homes under construction, although as noted above, one of these assessor parcels will not be subject to the Reassessment lien because of a recent prepayment). Based on the inspection of the Appraised Parcels and analysis of matters pertinent to value, the Appraiser arrived at the following conclusions of market value, subject to assumptions and limiting conditions listed in the Appraisal: 22 SUMMARY OF APPRAISED VALUE Ownership Market Valuer') MC $8,430,000 UHC 3,340,000 GID Palm Desert 8,450,000 Lennar Homes 8,450,000 GID Monterey 10,500,000 Ponderosa (Sage Neighborhood)(2) 17,550,000 Ponderosa (MFR Land) 2,750,000 TOTAL $59,470,000 (1) See "APPENDIX E — APPRAISAL REPORT" for a breakdown of these value estimates by property. (2) Includes five parcels that are owned by individual homeowners that closed escrow in December 2020, but are still included in appraised value for Ponderosa Homes II, Inc. single family project. Source: The Appraiser. The appraisal methodology used in the Appraisal is based on the sales comparison approach which compares sales of commercial or residential land to the subject property in order to estimate the market value. The Appraiser conducted thorough searches for recent sales of reasonably similar commercial and residential land that have taken place in the general area. The searches included closed sales, current escrows, offers and listings. See "APPENDIX E — APPRAISAL REPORT." Assumptions and Limiting Conditions. In considering the estimate of value evidenced by the Appraisal, the Appraisal is based upon a number of standard and special assumptions which affect the estimates as to value, some of which include the following. See "APPENDIX E — APPRAISAL REPORT." • It is assumed that the properties are in full compliance with all applicable federal, state and local environmental regulations and laws unless the lack of compliance is stated, described and considered in the appraisal report. • It is assumed that there are no hidden or unapparent conditions of the properties, subsoil, or structures that render them more or less valuable. No responsibility is assumed for such conditions or for obtaining the engineering studies that may be required to discover them. • The existence of hazardous materials, which may or may not be present on the properties, was not observed by the Appraiser. However, the Appraiser is not qualified to detect such substances. The presence of such substances may affect the value of the property, but the values estimated in Appraisal are based on the assumption that there is no such material on or in the properties that would cause a loss in value. Limitations of Appraisal Valuation. Property values may not be evenly distributed throughout the District; thus, certain parcels may have a greater value than others. This disparity is significant because in the event of nonpayment of the Reassessments, the only remedy is to foreclose against the delinquent parcel. No assurance can be given that the foregoing valuation can or will be maintained during the period of time that the Bonds are outstanding in that the City has no control over the market value of the property within the District or the amount of additional indebtedness that may be issued in the future by other public agencies, the payment of which, through the levy of a tax or an assessment, may be on a parity with the Reassessments. See "Direct and Overlapping Debt" above. For a description of certain risks that might affect the assumptions made in the Appraisal, see "SPECIAL RISK FACTORS" herein. 23 PROPERTY OWNERSHIP OF APPRAISED PARCELS The information about the property ownership of the Appraised Parcels contained in this section of the Official Statement has been provided by the property owners and has not been independently confirmed or verified by the Underwriter or the City. No assurance can be given that any of the development plans will occur as described in this Official Statement or that it will be completed in a timely manner, if at all, or that any of the property owners will continue to own the property. Neither the Bonds nor the Reassessments are personal obligations of the property owners or any affiliate thereof and, in the event that a property owner defaults in the payment of its Reassessments, the City may proceed with judicial foreclosure against the property within the District secured by the Reassessment lien but has no direct recourse to any other assets of such property owner or any affiliate thereof. Neither the Underwriter nor the City make any representation as to the accuracy or adequacy of this information. Further, there may be material adverse changes in this information after the date of this Official Statement. Ownership of Property in the District Neither the Bonds nor the Reassessments are personal obligations of any person or entity owning property within the District or having any interest in such property at the present time or at any time in the future, including the homeowners. An owner of land in the District can elect at any time to not pay Reassessments and allow the property to be foreclosed and in doing so, such owner will incur no personal liability for the Reassessments. See "SPECIAL RISK FACTORS". The landowners have provided the information set forth in this section entitled "Ownership of Property in the District." No assurance can be given that all information is complete. In addition, any Internet addresses included below are for reference only, and the information on those Internet sites is not a part of this Official Statement or incorporated by reference into this Official Statement. The owners of the Appraised Parcels (the "Property Owners") are summarized as follows: SUMMARY OF PROPERTY OWNERSHIP OF APPRAISED PARCELS Ownership Acreaee Number of Parcels Number of Lots MC 32.36 2 n/a Ponderosa 8.15 111 c' » 105 UHC 10.95 2 n/a GID Monterey n/a 227 227 GID Palm Desert n/a 66 66 Lennar Homes n/a 66 66 (1) Includes five parcels that are owned by individual homeowners that closed escrow in December 2020, but are still included in appraised value for Ponderosa Homes II, Inc. single-family project. Source: Appraisal. 24 Each Property Owner is not under legal obligation of any kind to expend funds for the development of property in the District and will expend such funds only if it determines that doing so is in its best interests. All expectations of the owners described above are based on the current and actual knowledge of the respective Property Owner and present facts and circumstances. Such expectations may change as the result of facts and circumstances occurring, or discovered, after the date of this Official Statement. There is no assurance that the Property Owner's expectations described above will actually materialize or that the money necessary in order to implement the planned development will in fact be available for such purpose. See "SPECIAL RISK FACTORS." MC Properties, LLC and MacLeod -Couch Land Company LLC (26.24% of the Reassessment Lien). APNs 694-130-016 and 694-130-021 are owned by MC Properties LLC, a California limited liability company (64.1%) and MacLeod -Couch Land Company LLC, a California limited liability company (35.9%), as tenants in common (collectively, "MC"). MC inherited the property several decades ago and has no plans to develop the property. MC's property amounts to 26.24% of the Reassessment lien. See "SPECIAL RISK FACTORS — Collection of the Reassessments" and "- Concentration of Land Ownership" and "-Risks Associated with Real Estate Secured Investments" and "- Land Values" herein. MC is currently interviewing brokers regarding listing the property for sale to a developer. The MC property is bound by Dick Kelly Drive on the north, Gateway Drive on the east, "A" Street on the south, and Monterey Ave. on the west. The property consists of 32.05 developable acres and 32.41 gross acres. MC has obtained the Phase I Environmental Site Assessment for the property. MC has obtained the Tentative Map 37234 from the City. MC has not been delinquent in property taxes or assessments on the property during the past three years. There have been no suit or claims threatened against MC with respect to the property. MC has not defaulted in the payments of special tax or assessment on the property. MC has never filed for bankruptcy or been declared bankrupt. The MC property falls within the MCP Palm Desert Specific Plan which identifies a General Plan land use designation of approximately 21 acres as Regional Retail (R-R) and approximately 11 acres (southeast portion of the overall site) designated as Town Center Neighborhood (T-CN). The MCP Palm Desert Specific Plan divides the MC property into four planning areas. Planning Areas 1 and 2 are designated as planned commercial and may be developed as commercial shopping centers consisting of one or two-story buildings, allowing a wide range of commercial uses and including residential units and/or professional office space on a second story. Planning Area 4 is designated as planned residential and shall be developed with attached for -sale or for -rent residential units Planning Area 3 is designated as either planned residential or planned commercial and may be developed as part of a large attached residential project in conjunction with Planning Area No. 4. Alternatively, it may be developed (i) with attached or detached residential units, for sale or for rent, (ii) as a mixed use project and/or 100% commercial project, (iii) for a variety of specialized housing designed for market rate or affordable housing types that may include senior housing types for residents over the age of 55; and condominium projects may be permitted with approval of a precise plan application. Currently the MC property consists of vacant land with no structures or improvements including fencing. Ponderosa Homes II, Inc. (12.43% of the Reassessment Lien). As of May 1, 2021 date of value, individual homeowners owned 6 of the lots (Lots 11 to 13 and 33 to 35) and Ponderosa owned the remaining 105 lots (Lots 1 to 10, 14 to 32 and 36 to 111). Ponderosa is a California corporation with two (2) shareholders: Kile Morgan Jr. (89.9%) and Linda F. Morash (10.1%). The 6 sales to the individual homeowners closed in late December 2020 and one of these individual homeowners recently prepaid and will not be subject to the Reassessment lien. As of early May 2021, there were 19 pending sales comprising all homes currently under construction. Ponderosa is a homebuilder and currently has two developments underway, both called Sage at Palm Desert, one multi -family project currently consisting of 1 lot and one single-family project currently consisting of 111 lots. These projects are described below: 25 Sage at Palm Desert (Multi-Familv) The Sage at Palm Desert multi -family project is located at Dick Kelly and Dinah Shore, Palm Desert, CA 92211. Ponderosa purchased the property in 2003 for $1,000,000. Ponderosa has entitlements for 160 multi -family apartments; of these, 137 are market rate units and the balance of 23 are affordable units. Ponderosa's parcel consist of 8.15 acres of vacant land zoned for multi -family use. The site was entitled at the time of the recording of the Tract Map 36351 on November 28, 2016, and is covered by the Map Conditions of Approval. A Phase I Environmental Site Assessment and soils report was prepared for the Sage at Palm Desert project. It is estimated that it will take 18 months for Ponderosa to get plans developed, submitted and approved by the City. Construction is expected to commence in the fall of 2022.23 units of moderate income rental housing is required for the project. Moderate is described as 110% of median rent. Construction financing for the project has not been obtained. Ponderosa has never defaulted on a payment of a special tax or assessment on the property owned by it. Ponderosa has not filed for bankruptcy or been declared bankruptcy. There are no existing trust deeds or loans on the property. Sage at Palm Desert (Single-Familv) The Sage at Palm Desert single-family project is located on Dick Kelly and Dinah Shore, Palm Desert, CA 92211. The project consists of 22.63 developable acres. Ponderosa has owned the property since 2003 and purchased the property for $3,000,000. The property is zoned for residential use. Ponderosa has recorded a subdivision map for 111 single-family residences. The project will include lot improvements and houses, a community center, common area landscaping and an entry gate system. The project is scheduled to be complete in the fall of 2024. Ponderosa has an existing improvement loan from Housing Capital Company, a division of U.S. Bank in the amount of $9,880,500. As of February 2021, the loan balance was approximately $6,696,000. Unfinanced improvements and all house and community center construction is being financed by Ponderosa. Tract Map No. 36351 for the project was recorded on November 28, 2016. As of May 1, 2021 date of value, there were 6 completed -closed homes (closed builder sales); 3 completed -unclosed homes; 19 homes under construction of which 6 were estimated to be 70% completed, 6 were estimated to be 30% completed, and 7 were in the early stage prior to completion of slabs; and 83 vacant lots in semi -finished condition. 23 units of moderate income rental housing are required for the project and will be mitigated on the adjacent multi -family property project. No property taxes or assessments on the property have been delinquent at any time during the past three years. No claims or suits have been filed against Ponderosa or with respect to the project. Ponderosa has never defaulted in the payment of a special tax or an assessment on the property owned by it. Ponderosa has never filed for bankruptcy or been declared bankrupt. The first phase of the project was delayed by a slowdown of delivery of building components and labor shortages due to the COVID- 19 pandemic, since municipalities and the utility companies were closed for at least three months. Additional information about Ponderosa can be obtained from its website at www.nonderosahomes.com. This Internet address is included for reference only, and the information on this Internet site is not a part of this Official Statement or incorporated by reference into this Official Statement. UHC 00357 Palm Desert, L.P. (9.15% of the Reassessment Lien). UHC owns APNs 694-130-017 and 694-130-018. UHC has parcels with approximately 11 acres designated for future multi -family apartments. UHC's property is located at the southeast corner of Dick Kelly Dr. and Gateway Dr., extending east to Cortesia Way. The property was acquired from MC (defined above) by grant deed recorded May 21, 2008, and is subject to a Deed of Trust securing indebtedness to MC in the amount of $2,633,334. UHC has no development plans proposed at this time. The property has been listed for a lengthy period of time by Wilson Meade at an asking price of $4,500,000. GID Monterey, LLC (8.79% of the Reassessment Lien). Assessor Parcel Nos. 694-421-001 to 032; 694- 422-001 to 024; 694-423-001 to 028 and 030 to 089; 694-424-001 to 006, 008 to 012, 014 to 017 and 019 to 022; and 694-425-017 to 056 and 058 to 081 are owned by GID Monterey. GID Monterey is owned by AG Capital 26 and Global Investment and Development. The ownership consists of 227 lots for attached townhomes, which are located within the Monterey Ridge project at the northeast corner of Dick Kelly R. and Gateway Dr. Originally, the Monterey Ridge project consisted of 247 lots but 20 of the lots were previously developed with townhomes and are now owned by individual homeowners. GID Monterey purchased the property by deed recorded in September 2009 and re -recorded in November 2009. The Monterey Ridge project is located in the northeast corner of Gateway Drive and Dick Kelly Drive and consists of 18.136 developable acres. Final Tract Map No. 34179 has been recorded. All environmental conditions are satisfied for the project. GID Monterey plans to sell the property to one or more merchant homebuilders at a later time. There are no existing trust deeds or loans on the property. No property taxes or assessments on the property have been delinquent at any time during the past three years. There have been no claims or suits filed against GID Monterey with respect to the project. GID Monterey has never filed bankruptcy or been declared bankrupt. GID Monterey has never defaulted in the payment of a special tax or an assessment on the property owned by it. GID Palm Desert, LLC (6.23% of the Reassessment Lien). 66 of the lots on APNs 694-140-001 to 048 and 053 to 076 and 694-150-015 to 039 and 049 to 083 are owned by GID Palm Desert. GID Palm Desert owns Lots 35 to 59, 115 to 123 and 128 to 159 of the Final Tract Map No. 31071. The project, referred to as the Dolce project currently consists of 27 single family detached residential homes that are owned by individual homeowners, a homeowners association clubhouse and pool, and 132 partially completed lots. GID Palm Desert is owned by AG Capital and Global Investment and Development. GID Palm Desert purchased the 132 lots in 2008. GID Palm Desert sold 66 of the lots to Lennar Homes by deed recorded April 28, 2021. GID Palm Desert plans to sell the remaining 66 lots to Lennar who intends to complete the development of the Dolce project described below. See "Lennar Homes of California, Inc. (6.23% of the Reassessment Lien)" below. There are no existing trust deeds or loans on GID Palm Desert's property. No property taxes or assessments on the property have been delinquent at any time during the past three years. There have been no claims or suits filed against GID Palm Desert with respect to the Dolce project. GID Palm Desert has never filed bankruptcy or been declared bankrupt. GID Palm Desert has never defaulted in the payment of a special tax or an assessment on the property owned by it. Lennar Homes of California, Inc. (6.23% of the Reassessment Lien). Of the lots within recorded Tract Map No. 31701, Lots 15 to 34, 60 to 78 and 88 to 114, for a total of 66 lots are owned by Lennar Homes. Lennar Homes purchased these lots from GID Palm Desert, by deed recorded April 28, 2021 at an indicated price of $8,451,000, and is under contract to acquire an additional 66 undeveloped lots by April 27, 2022. The Dolce project is located in the city of Palm Desert, northeast of the intersection of Gerald Ford Drive and Gateway Drive. The project consists of 38.05 developable acres. The lots acquired and to be acquired are in finished lot or near finished lot condition. The 66 semi to finished residential lots owned by Lennar Homes are developed, with segments of the public streets completed and most related utilities built. The remaining improvements to be completed include paving of the in -tract private streets, re -installing some dry utilities, and completing some perimeter landscaping. Construction on model homes is estimated to start in the 4th Quarter 2021. Lennar Homes anticipates the sale of homes to end -users with first closings expected in 3rd Quarter 2022. Lennar Homes currently anticipates developing the project in 8 construction phases consisting of five single- family floor plans, averaging 1,800 square feet, with an expected average base home sales price of approximately $485,000. These plans are subject to change at any time. Assuming the takedown of the additional 66 lots in the 2nd Quarter 2022, construction is estimated to be complete by the 1st Quarter 2025. Lennar Homes is based in Irvine, California, and has been in the business of developing residential real estate communities in California since 1995. Lennar Homes is wholly -owned by U.S. Home Corporation, a Delaware corporation ("U.S. Home"). U.S. Home is wholly -owned by Lennar Corporation, a Delaware corporation ("Lennar Corporation"). Lennar Corporation, founded in 1954 and publicly traded under the symbol "LEN" since 1971, is one of the nation's largest home builders, operating under a number of brand names, 27 including Lennar and U.S. Home. The company primarily develops residential communities both within the Lennar Corporation family of builders and through consolidated and unconsolidated partnerships in which the company maintains an interest. Lennar Corporation is subject to the informational requirements of the Exchange Act and in accordance therewith files reports, proxy statements and other information with the SEC. Such filings, particularly the Annual Report on Form 10-K and its most recent Quarterly Report on Form 10-Q, may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such files can also be accessed over the internet at the SEC's website at www.sec.gov. This internet address is included for reference only and the information on the internet site is not a part of this Official Statement and is not incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on the internet site. Copies of Lennar Corporation's Annual Report on Form 10-K and related financial statements are available from Lennar Corporation's website at www.lennar.com. This internet address is included for reference only and the information on the internet site is not a part of this Official Statement and is not incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on the internet site. A lawsuit was filed in the state court of California against Lennar Corporation relating to Lennar Corporation and LandSource Communities Development, LLC, a Delaware limited liability company ("LandSource"), in which the California Public Employees' Retirement System ("CalPers") invested in 2007 ("Complaint"). LandSource filed for bankruptcy on June 8, 2008 ("LandSource Bankruptcy Matter"), and a plan for reorganization was approved by the bankruptcy court on July 20, 2009. (In re: LandSource Communities Development LLC, et al, Case No. 08-11111, United States Bankruptcy Court, District of Delaware.) The Complaint, which is filed as a qui tam action by a newly created limited liability company, makes a number of claims related to Lennar Corporation's actions regarding LandSource and the related bankruptcy and seeks injunctive relief and damages (including statutory and treble) relating to CalPers' alleged $970 million loss. Lennar Corporation filed a petition to remove the Complaint to federal court (Citizens Against Corporate Crime ("CACC") v. Lennar Corporation (9th Circuit, California Eastern District Court, Case No. 2:2018cv01269). Lennar Corporation also filed a Motion to Reopen the Chapter 11 Bankruptcy Cases for the Limited Purpose of Enforcing the Injunction and Release in the Debtors' Joint Chapter 11 Plan and Confirmation Order. Lennar Corporation contended that in addition to the Complaint being barred by the release and injunction in the LandSource Bankruptcy Matter, the Complaint was meritless and barred by applicable statutes of limitation and other defenses. On July 17, 2018, the Bankruptcy Court granted that motion, allowing Lennar Corporation to proceed with filing its proposed enforcement motion. After a hearing on October 25, 2018, the Bankruptcy Court granted the enforcement motion and found that CACC and its member Nicolas Marsch III ("Marsch") filed the Complaint in violation of the injunction and release in the Chapter 11 Plan and Confirmation Order and barred CACC, Marsch and their agents from prosecuting the Complaint. Further, the Bankruptcy Court enjoined CACC, Marsch and their agents from continuing to pursue released and enjoined claims and causes of action against Lennar Corporation in further violation of the Chapter 11 Plan and Confirmation Order. The California federal district court dismissed the Complaint by minute order issued November 16, 2018. CACC also filed a Notice of Appeal and Statement of Election with the Delaware District Court ("District Court") to appeal the Bankruptcy Court's November 1, 2018 order granting the enforcement motion. In January 2020, the district court issued its opinion denying CACC's request for oral argument, and rejecting each of CACC's arguments in the appeal. Later in January 2020, CACC filed a notice of appeal to the Third Circuit Court of Appeals. On December 3, 2020, the Third Circuit issued an order denying CACC's appeal and affirming the district court and bankruptcy court orders. CACC filed a petition for rehearing on December 17, 2020, which was denied on January 7, 2021. The time for CACC to file a petition for certiorari seeking United States Supreme Court review has not expired. 28 Lennar Homes was not a party to the Complaint. Lennar Homes believes that even if, in the unlikely event, the appeal and the underlying claims are successful against Lennar Corporation, Lennar Homes will be able to complete the development and sale of its project within the District as described in this Official Statement and pay Special Taxes and ad valorem tax obligations on the property that it owns within the District prior to delinquency during Lennar Homes' period of ownership. Lennar Homes has represented that they have not been delinquent on any property taxes or assessments on the Property and that no claims have been made or suits filed against Lennar Homes or the property with respect to the project. Lennar Homes has represented that they have never defaulted on any payment of a special tax or an assessment on property owned by it in the past five years that has resulted in a foreclosure action being instituted against Lennar Homes in a court of law. 29 SPECIAL RISK FACTORS The following information should be considered by prospective investors in evaluating the investment quality of the Bonds. The information below, however, does not purport to be an exhaustive listing of risks and other considerations that may be relevant to a decision to invest in the Bonds. Furthermore, the order in which the following information is presented is not intended to reflect the relative importance of any such risks. Failure by any owner to pay Reassessments installments when due, depletion of the Reserve Fund, delay in foreclosure proceedings, or the inability of the City to sell parcels which have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent Reassessments levied against such parcels may result in the inability of the City to make full or punctual payment of debt service on the Bonds and Owners of the Bonds would therefore be adversely affected. The value of property within the District is a critical factor in determining the investment quality of the Bonds. If a property owner or future landowner defaults in the payment of the Reassessment installments, the District's only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Reassessment installments and prospective purchasers of the Bonds should not assume that the property within the District could be sold for the appraised or assessed values described herein or an amount adequate to pay delinquent Reassessment installments. Land development and land values could be adversely affected by economic and other factors beyond the City's control, such as a general economic downturn, adverse judgments in future litigation that could affect the scope, timing or viability of development, relocation of employers out of the area, stricter land use regulations, shortages of water, electricity, natural gas or other utilities, destruction of property caused by earthquake, flood or other natural disasters, environmental pollution or contamination, or unfavorable economic conditions. The City has not evaluated development risks. Since these are largely business risks of the type that the landowner customarily evaluates individually, and inasmuch as changes in land ownership may well mean changes in the evaluation with respect to any particular parcel, the City is issuing the Bonds without regard to any such evaluation. Thus, the issuance of the Bonds in no way implies that the City has evaluated these risks or the reasonableness of these risks. On the contrary, the City has made no such evaluation and are undertaking the refunding of the Prior Bonds through the issuance of the Bonds even though these risks may be serious and may ultimately halt or slow the progress of land development and forestall the realization of property values in the event of delinquency and foreclosure. The following is a discussion of specific risk factors that could affect the timing or scope of property development in the District or the value of property in the District, or the ability or willingness of the property owners to pay when due the Reassessment installments that secure the Bonds, and therefore the availability of Reassessment Revenues to pay principal and interest on the Bonds. Land Values Approximately 35% of the Reassessment lien is on properties with no current development plans and an estimated value -to -lien of 2.05:1* or less. Land values are influenced by the level of development in the area in many respects. First, undeveloped or partially developed land is generally less valuable than developed land and provides less security to the owners of the Bonds should it be necessary for the City to foreclose on undeveloped or partially developed property due to the nonpayment of Reassessment installments. See "PROPERTY OWNERSHIP OF APPRAISED PARCELS," "SPECIAL RISK FACTORS," "THE DISTRICT — Estimated Value -to -Lien Ratios and — The Appraisal" and "APPENDIX E — APPRAISAL REPORT" herein. Second, failure to complete development on a timely basis could adversely affect the land values of those parcels that have been completed. Lower land values would 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 * Preliminary, subject to change. 30 payment of the Reassessment installments. See "THE DISTRICT — Estimated Value -to -Lien Ratios." No assurance can be given that the proposed development within the District will be completed or with respect to the timing of development, and in assessing the investment quality of the Bonds, prospective purchasers should evaluate the risks of noncompletion. General Under the provisions of the Improvement Bond Act of 1915, as amended, being Division 10 of the California Streets and Highways Code, and the Refunding Act of 1984 for 1915 Improvement Bonds, as amended, being Division 11.5 of the California Streets and Highways Code (collectively, the "Act"), Reassessments, from which funds for the payment of annual installments of principal of and interest on the Bonds are derived, will be billed to properties against which there are unpaid Reassessments on the regular ad valorem property tax bills sent to owners of such properties. Such Reassessments are due and payable at the same times, and bear the same penalties and interest for non-payment, as do regular property tax installments. A property owner cannot pay the County tax collector less than the full amount due on the tax bill; however, it is possible to pay Reassessments directly to the City in satisfaction of the obligation to pay that Reassessment without paying property taxes also then due. It should also be noted that the unwillingness or inability of a property owner to pay regular ad valorem property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to make regular ad valorem property tax payments and Reassessment installment payments in the future. Unpaid Reassessments do not constitute a personal indebtedness of the owners of the parcels within the District and the owners have made no commitment to pay the principal of or interest on the Bonds or to support payment of the Bonds in any manner. Accordingly, in the event of delinquency, proceedings may be conducted only against the real property securing the delinquent Reassessment. Thus, the value of the real property within the District is a critical factor in determining the investment quality of the Bonds. Several of the parcels in the District with unpaid Reassessments are vacant. There is no assurance any owner will be able to pay the Reassessments or that they will pay such installments even though financially able to do so. In order to pay debt service on the Bonds, unpaid Reassessments on land within the District must be paid in a timely manner Should the Reassessments not be paid on time, the City has established a Reserve Fund to provide for payment of the Bonds in the event of a shortfall in the amounts in the Redemption Fund for such purpose. The Reassessments are secured by a lien on the Reassessment parcels and the City has covenanted to institute foreclosure proceedings under certain circumstances against parcels with delinquent Reassessments in order to obtain funds to pay debt service on the Bonds. Collection of the Reassessments The Reassessments are to be collected in the same manner as ordinary ad valorem real property taxes are collected and, except as provided in the special covenant for foreclosure in the Fiscal Agent Agreement (which effectively requires the City under certain circumstances to commence foreclosure against delinquent parcels each year in which a delinquency arises, see "SECURITY FOR THE BONDS — Foreclosure Covenant"), will be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem real property taxes. Pursuant to these procedures, if ad valorem property taxes are unpaid for a period of five years or more, the property is subject to foreclosure sale by the County. If at any time, the County's Teeter Plan (adopted pursuant to Sections 4701 through 4717 of the California Revenue and Taxation Code) is in effect and is made applicable to the District and the Reassessments being levied in connection with the Bonds, the City may, in its discretion, elect not to commence any judicial foreclosure proceeding pursuant to the Fiscal Agent Agreement or defer the commencement of such proceedings until such time as the City deems appropriate. The Reassessments, and other special assessments for assessment districts or special taxes levied for community facilities districts are billed and collected by the County on the same tax bill and property owners do 31 not have the right to selectively pay any one assessment or tax. However, prior to the actual foreclosure of the lien of the Reassessments, the City may be able to collect the delinquent Reassessments directly from the property owner without the County receiving the other amounts due. In such event, liens for ad valorem property taxes and other assessments or special taxes could remain on the subject property, which would reduce its value. Concentration of Landownership Currently, undeveloped or partially developed property comprises 69.03% of the property in the District subject to the lien of the Reassessments. Ownership of the undeveloped and partially developed property is concentrated in six property owners. See Tables under the heading, "THE DISTRICT — Estimated Value -to -Lien Ratios." The timely payment of the principal of and interest on the Bonds depends upon the willingness and ability of property owners or future landowners in the District to pay the Reassessment installments when due. The willingness and ability of the owners of undeveloped land, as well as other property owners, to pay property taxes and the Reassessments could be adversely affected by changes in general or local economic conditions, fluctuations in the real estate market and other factors. A description of the owners of the Appraised Parcels is set forth under the caption "PROPERTY OWNERSHIP OF APPRAISED PARCELS." The City, the Municipal Advisor, and the Underwriter make no representation as to the accuracy or completeness of such information. Failure of the owners of undeveloped land (or any future owner of a significant amount of taxable property within the District) to pay installments of such Reassessments when due could cause the depletion of the reserve fund held under the Fiscal Agent Agreement prior to reimbursement from the resale of foreclosed property and repayment of the delinquent Reassessment. In such an event, there may be insufficient revenues from Reassessments to meet the District's obligations under the Fiscal Agent Agreement. In that event, there could be a delay or failure in payments of the principal of and interest on the Bonds. Risks Associated with Real Estate Secured Investments Owners of the Bonds will be subject to the risks generally incident to an investment secured by real estate, including, without limitation: (i) adverse changes in local market conditions, such as changes in the market value of real property in, and in the vicinity of, the District, the supply of or demand for competitive properties in such area, and the market value of property or buildings and/or sites in the event of sale or foreclosure; (ii) changes in real estate tax rate, governmental rules (including, without limitation, zoning laws) and fiscal policies; (iii) natural disasters (including, without limitation, earthquakes, floods and fires), which may result in uninsured losses; and (iv) changes in federal tax law relating to deductions for state and local taxes. Risk Related to Availability of Construction Financing. The ability of the property owners or future landowners within the District may be dependent on the availability of construction financing. No guarantees can be made that any construction financing will be available. In the event are unable to complete development of the property within the District, this may adversely impact the value of the property and as a result, adversely impact Reassessment installments available to pay debt service on the Bonds. Limitations on Remedies Remedies available to the Owners may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on, or to preserve the tax-exempt status of, the Bonds. Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the Fiscal Agent Agreement to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium, or others similar laws affecting generally the enforcement of creditor's rights, by equitable principles, by the exercise of judicial discretion and by limitations on remedies against public agencies in the State. Additionally, the Bonds are not subject to acceleration in the event of the breach of any 32 covenant or duty under the Fiscal Agent Agreement. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the Owners. Depletion of Reserve Fund Upon receipt of the proceeds from the sale of the Bonds, the City will initially establish the Reserve Fund in an amount equal to the initial Reserve Requirement. The monies in the Reserve Fund constitute a trust fund for the benefit of the Owners of the Bonds, and will be held by, and administered by, the Fiscal Agent in accordance with and pursuant to the provisions of the Fiscal Agent Agreement. If, on any Interest Payment Date, a deficiency occurs in the Redemption Fund for payment of interest on or principal of the Bonds, the Fiscal Agent will transfer into the Redemption Fund an amount out of the Reserve Fund, to the extent of the funds then on deposit in the Reserve Fund, needed to pay debt service on the Bonds. There is no assurance that the balance in the Reserve Fund will always be adequate to pay the debt service on the Bonds in the event of shortfall in amounts in the Redemption Fund due to delinquent Reassessments or otherwise. Non -availability of City Funds The Fiscal Agent may be required to transfer the amount of a delinquent installment from the Reserve Fund to the Redemption Fund. If the Reserve Fund is depleted and if there are additional delinquencies, the City is not required to transfer into the Redemption Fund the amount of the delinquency out of any other moneys of the City. The failure of any owners of parcels within the Reassessment District to pay Reassessment Installments in a timely manner could result in the unavailability of money to pay the principal of or interest on the Bonds. See "SECURITY FOR THE BONDS" herein. Owner Not Obligated to Pay Bonds or Reassessments Unpaid Reassessments do not constitute a personal indebtedness of the owners of Reassessment parcels within the District and the property owners have made no commitment to pay the principal of or interest on the Bonds or to support payment of the Bonds in any manner. There is no assurance that the property owners have the ability to pay the Reassessments or that, even if they have the ability, they will choose to pay such installments. An owner may elect to not pay the Reassessments when due and cannot be legally compelled to do so. If an owner decides it is not economically feasible to continue owning its property encumbered by the lien of the Reassessment or decides that for any other reason it does not want to retain title to the property, such owner may choose not to pay Reassessments and to allow the property to be foreclosed. Such a choice may be made due to a decrease in the market value of the property. A foreclosure of the property will result in such owner's interest in the property being transferred to another party. Neither the City nor any Owner of the Bonds will have the ability at any time to seek payment directly from any owner of property within the District of any Reassessment or any principal or interest due on the Bonds, or the ability to control who becomes a subsequent owner of any property within the District. FDIC/Federal Government Interests in Properties The City's ability to enforce the lien of a reassessment installment and to foreclose the lien of a delinquent Reassessment installment, is limited with regard to properties in which the Internal Revenue Service, the Drug Enforcement Agency, Federal Deposit Insurance Corporation (the "FDIC"), or other federal government entities such as Fannie Mae or Freddie Mac, has or obtains an interest. In the case of the FDIC, in the event that any financial institution making a loan which is secured by parcels is taken over by the FDIC and the applicable installment of any Reassessments levied within the Reassessment District is not paid, the remedies available to the City may be constrained. The FDIC's policy statement regarding the payment of state and local real property taxes (the "Policy Statement") provides that taxes other than ad valorem taxes which are secured by a valid lien in effect before the FDIC acquired an interest in a property will be paid unless the FDIC determines that abandonment of its interests is appropriate. The Policy 33 Statement provides that the FDIC generally will not pay installments of non -ad valorem taxes which are levied after the time the FDIC acquires its fee interest, nor will the FDIC recognize the validity of any lien to secure payment except in certain cases where the Resolution Trust Corporation had an interest in property on or prior to December 31, 1995. Moreover, the Policy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, the FDIC will not permit its lien to be foreclosed upon by a taxing authority without its specific consent, nor will the FDIC pay or recognize liens for any penalties, fines or similar claims imposed for the non-payment of taxes or assessments. The FDIC has taken a position similar to that expressed in the Policy Statement in legal proceedings brought against Orange County, California, in United States Bankruptcy Court and in Federal District Court. The Bankruptcy Court issued a ruling in favor of the FDIC on certain of such claims. Orange County appealed that ruling, and the FDIC cross -appealed. On August 28, 2001, the Ninth Circuit Court of Appeals issued a ruling favorable to the FDIC except with respect to the payment of pre -receivership liens based upon delinquent property tax. The City is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency with respect to parcels in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed out at a judicial foreclosure sale would prevent or delay the foreclosure sale. In the case of Fannie Mae and Freddie Mac, in the event 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 in the event 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 Reassessments levied within the Reassessment District and each installment thereof 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 the Reassessments), 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 an instrumentality of the federal government such as Fannie Mae or Freddie Mac has a mortgage interest in the parcel and the City wishes to foreclose on the parcel as a result of delinquent Reassessments levied within the Reassessment District and each installment thereof, 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 Reassessments and preserve the federal government's mortgage interest. In Rust v. Johnson 597 F.2d 174 (9th Cir 1979), the United States Court of Appeal, Ninth Circuit, held that Fannie Mae is a federal instrumentality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of State power over a mortgage interest held by Fannie Mae constitutes an exercise of State power over property of the United States. The City's remedies may also be limited in the case of delinquent Reassessments levied within the Reassessment District and each installment thereof with respect to parcels in which other federal agencies (such as the Internal Revenue Service and the Drug Enforcement Administration) have or obtain an interest. The City is unable to predict what effect the FDIC's application of the Policy Statement would have in the event of a delinquency on a parcel within the Reassessment District in which the FDIC has an interest, although prohibiting the lien of the FDIC to be foreclosed at a judicial foreclosure sale would reduce or eliminate the persons willing to purchase a parcel at a foreclosure sale. Owners and Beneficial Owners of the Bonds should assume that the City will be unable to foreclose on any parcel owned by the FDIC. According to County records, as of July 1, 2020, no property in the portion of the District securing the Prior Bonds described herein was owned by the FDIC or any other federal government entity. 34 Parity Taxes and Special Assessments The ability or willingness of a property owner in the District to pay the Reassessments could be affected by the existence of other taxes and assessments imposed upon the property. The Reassessments and any penalties thereon constitute a lien against the parcels of land on which they have been levied until they are paid. Such lien is on a parity with all special taxes levied by other agencies regardless of when they are imposed on the same property and is co -equal to and independent of the lien for general property taxes. The Reassessments are subordinate to pre-existing assessment liens and senior to assessment liens created in the future. The Reassessments have priority over all existing and future private liens imposed on the property. In addition, other public agencies whose boundaries overlap those of the District could, with or in some circumstances without the consent of the owners of the Reassessment parcels in the District, impose additional taxes or assessment liens on the property in the District in order to finance public improvements to be located inside or outside of the District. The City, however, has no control over the ability of other entities and districts to issue indebtedness secured by special taxes or assessments payable from all or a portion of the property in the District. In addition, the City is not prohibited itself from establishing assessment districts, community facilities districts or other districts which might impose assessments or taxes against property in the District. The imposition of additional liens on a parity with the Reassessments could reduce the ability or willingness of the owners of parcels in the District to pay the Reassessments and increases the possibility that foreclosure proceeds will not be adequate to pay delinquent Reassessments. See "THE DISTRICT — Direct and Overlapping Bonded Indebtedness." Foreclosure The City has covenanted for the benefit of the Owners of the Bonds that the City will commence foreclosure upon the occurrence of a delinquency in the limited circumstances described in the Fiscal Agent Agreement and that it will diligently prosecute and pursue such foreclosure proceedings to judgment and sale, all as provided in the Fiscal Agent Agreement. See "SECURITY FOR THE BONDS — Covenant to Foreclose." Foreclosure proceedings are instituted by the bringing of an action in the superior court of the county in which the Reassessment parcel lies, naming the owner and other interested persons as defendants. The action is prosecuted in the same manner as other civil actions. The prosecution of a foreclosure action could be delayed due to crowded local court calendars or delays in the legal process. In the event that sales or foreclosure of property are necessary, there can be no assurance that foreclosure proceedings will occur in a timely manner. There could be a delay in payments to Owners of the Bonds pending such sales or the prosecution of foreclosure proceedings and the receipt by the City of the proceeds of sale, if the other sources of payment for the Bonds, as set forth in the Fiscal Agent Agreement, are depleted. Bankruptcy The payment of the Reassessments and the ability of the City to foreclose the lien of a delinquent unpaid Reassessment, as discussed in "SECURITY FOR THE BONDS — Covenant to Foreclose," 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. Regardless of the priority of the Reassessments over non -governmental liens, the exercise by the City of the foreclosure and sale remedy or by the County of the tax sale remedy may be forestalled or delayed by bankruptcy, reorganization, insolvency or other similar proceedings affecting the owner of a Reassessment parcel. The federal bankruptcy laws provide for an automatic stay of foreclosure and sale or tax sale proceedings thereby delaying such proceedings perhaps for an extended period. Delay in exercise of remedies, especially if the owner owns a parcel the Reassessment delinquencies on which are significant or if bankruptcy proceedings are instituted with respect to a number of owners owning parcels the Reassessment delinquencies on which are significant, may result in periodic Reassessment installment collections which, even in conjunction with the Reserve Fund, may be insufficient to pay the debt service on the Bonds as it comes due. Further, should remedies be exercised under the bankruptcy law against such parcels, payment of installments of the 35 Reassessments may be subordinated to bankruptcy law priorities. Therefore, certain claims may have priority over the Reassessment lien, even though such claims would not have priority were the bankruptcy law not applicable. Any prohibition of the enforcement of the Reassessment lien or any such non-payment or delay could increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds. Limited Obligation of the City Upon Delinquency If a delinquency occurs in the payment of any reassessment installment, the City has a duty only to cause the transfer into the Redemption Fund the amount of the delinquency out of the Reserve Fund and to undertake judicial foreclosure proceedings to recover such delinquencies. This duty of the City is continuing during the period of delinquency, until reinstatement, redemption, or sale of the delinquent property. There is no assurance that funds will be available for this purpose and if, during the period of delinquency, there are insufficient funds in the Reserve Fund, a delay may occur in payments to the owners of the Bonds. If there are additional delinquencies after exhaustion of funds in the Reserve Fund, the City is not obligated to transfer into the applicable Redemption Fund the amount of such delinquency out of any other available moneys of the City. The City's legal responsibilities with respect to such delinquent installments are limited to advancing the amount thereof solely from any available moneys in the Reserve Fund and to undertaking judicial foreclosure proceedings to recover such delinquencies. This duty of the City to advance funds continues during the period of delinquency only to the extent of funds available from the Reserve Fund, until reinstatement, redemption, or sale of the delinquent property. In accordance with Section 8769(b) of the 1915 Act, the City has determined that it will not be obligated to advance funds from its treasury to cure any deficiency in the Redemption Fund. Hazardous Materials While government taxes, reassessments and charges are a common claim against the value of an assessed parcel, other less common claims may be relevant. One of the most serious in terms of the potential reduction in the value that may be realized to pay the Reassessment on a parcel is a claim with regard to a hazardous substance. In general, the owners and operators of a Reassessment parcel may be required by law to remedy conditions on the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1989, sometimes referred to as "CERCLA" or "Superfund Act," is a well-known one of these laws. California laws with regard to hazardous substances are also stringent and somewhat similar. Under many of these laws, the owner (or operator) is obligated to remediate hazardous substances on, under or about the property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance; however, an owner (or operator) who is not at fault may seek recovery of its damages from the actual wrongdoer. The effect, therefore, should any of the Reassessment parcels be affected by a hazardous substance, may be to reduce the marketability and value of the parcel, because the purchaser, upon becoming an owner, may become obligated to remedy the condition just as is the seller. The assessed values of the Reassessment parcels in the District do not take into account the possible reduction in marketability and value of any of the Reassessment parcels by reason of the possible liability of the owner (or operator) for the remedy of a hazardous substance condition of the Reassessment parcel. 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 property by reason of the possible liability of the property owners for the remedy of a hazardous substance condition of the parcels. Although the City is not aware that the property owners of any of the property has such a current liability with respect to any of the property, it is possible that such liabilities do currently exist and that the City is not aware of them. Further, it is possible that liabilities may arise in the future with respect to any of the 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 36 method of handling it. All of these possibilities could significantly affect the value of property that is realizable upon a delinquency. Natural Hazard Risks The value of the Reassessment parcels in the District in the future can be adversely affected by a variety of additional factors, particularly those which may affect infrastructure and other public improvements and private improvements on property and the continued habitability and enjoyment of such private improvements. Such additional factors include, without limitation, geologic conditions such as earthquakes, topographic conditions such as earth movements, landslides and floods and other climatic conditions such as droughts, and fires. Natural Disasters The value of the parcels in the District 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 parcels in the District and the continued habitability and enjoyment of such private improvements. For example, the areas in and surrounding the District, like those in much of California, may be subject to earthquakes or other unpredictable seismic activity, however, the District is not located in a seismic special studies zone. Other natural disasters could include, without limitation, landslides, floods, 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 Reassessments, and the value of the parcels may well depreciate. Endangered and Threatened Species It is illegal to harm or disturb any plants or animals in their habitat that have been listed as endangered species by the United States Fish & Wildlife Service under the Federal Endangered Species Act or by the California Fish & Game Commission under the California Endangered Species Act without a permit. Although the City and property owners are not aware of any federally listed endangered or threatened species would be affected by the proposed development within the District, other than any that are permitted by the entitlements already received, the discovery of an endangered plant or animal could delay development of vacant property in the District or reduce the value of undeveloped property. Proposition 218 On November 5, 1996, the voters of the State approved Proposition 218, the so-called "Right to Vote on Taxes Act." Proposition 218 added Articles XIIIC and XIIID to the State Constitution, which contain, among other things, a number of provisions affecting the ability of the City to levy and collect both existing and future taxes, assessments, fees and charges. Under the Act, Section 9525(b) of the California Streets and Highways Code, the Reassessments herein are not assessments within the meaning of, and may be ordered without compliance with the procedural requirements of, Article XIIID of the California Constitution. In addition, under Section 10400 of the California Streets and Highways Code, any challenge (including any constitutional challenge) to the proceedings or the assessment must be brought within 30 days after the date the assessment was levied. With respect to the portion of the Prior Reassessment District securing the Prior Bonds described herein for which the City completed its proceedings for the levy of assessments after July 1, 1997, the City complied with the provisions of Section 4 of Article XIIID. Article XIIIC removes limitations on the initiative power in matters of local taxes, assessments, fees and charges. Article XIIIC does not define the term "assessment", and it is unclear whether this term is intended to include assessments levied under the 1913 Act. Furthermore, this provision of Article XIIIC is not, by its terms, 37 restricted in its application to assessments which were established or imposed on or after July 1, 1997. In the case of the unpaid Reassessments which are pledged as security for the payment of the Bonds, the Act provides a mandatory, statutory duty of the City and the County Auditor to post installments on account of the unpaid Reassessments to the property tax roll of the County each year while any of the Bonds are outstanding, in amounts equal to the principal of and interest on the Bonds coming due in the succeeding calendar year. Although the matter is not free from doubt, it is likely that a court would hold that Article XIIIC has not conferred on the voters the power to reduce or repeal the unpaid Reassessments which are pledged as security for payment of a Bond or to otherwise interfere with performance of the mandatory, statutory duty of the City and the County Auditor with respect to the unpaid Reassessments which are pledged as security for payment of the Bonds. The interpretation and application of the Proposition 218 will ultimately be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainty the outcome of such determination. Appraised Values The Appraisal in APPENDIX E estimates the value of the taxable property within the District. This value estimate is merely the present opinion of the Appraiser, and is subject to the assumptions and limiting conditions stated in the Appraisal. The City and the District have not sought the present opinion of any other appraiser of the value of the taxed parcels. A different present opinion of value might be rendered by a different appraiser. The valuation set forth in the Appraisal is not a bulk sale value, which would represent the most probable price of all the parcels within District to a single purchaser or sales to multiple buyers, over a reasonable absorption period discounted to present value. The Appraisal estimates the aggregate value of property in the District expressed as the sum of the individual parcel valuations. This value estimate was determined by applying the sales comparison approach to each parcel, as described in the Appraisal. The valuation does not represent a bulk valuation of all the property in the District or a sum or bulk valuations based on ownership or projected property uses. This value estimate excludes all discounts or allowances for carrying costs and is not equal to the market value of all the subject properties as a whole. The opinion of value relates to sale by a willing seller to a willing buyer of each parcel as of the date of valuation, 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 a present opinion. It is based upon present facts and circumstances. Differing facts and circumstances may lead to differing opinions of value. The appraised market value is not evidence of future value because future facts and circumstances may differ significantly from the present. No assurance can be given that any of the appraised property in the District could be sold in a foreclosure for the estimated market value contained in the Appraisal. Such sale is the primary remedy available to Bondowners if that property should become delinquent in the payment of reassessments. No Acceleration Provision The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the terms of the Bonds. Absence of Market for the Bonds No application has been made for a credit rating for the Bonds, and it is not known whether a credit rating could be secured either now or in the future for the Bonds. There can be no assurance that there will ever be a secondary market for purchase or sale of the Bonds, and from time to time there may be no market for them, depending upon prevailing market conditions, the financial condition or market position of firms who may make 38 the secondary market and other factors. The Bonds should therefore be considered long-term investments in which funds are committed to maturity, subject to redemption prior to maturity as described herein. 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, discussed herein, which was approved in the general election held on November 5, 1996. Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies such as the City. 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, the "Right to Vote on Taxes Act," 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. The Reassessments are being levied after the passage of Proposition 218. However, the City believes that the issuance of the Bonds does not require the conduct of further proceedings under either the Act or Proposition 218 because Senate Bill 919 (effective July 1, 1997) amended the Act to provide: "Any reassessment that is approved and confirmed pursuant to [the Act] shall not be deemed to be an assessment within the meaning of, and may be ordered without compliance with the procedural requirements of, Article XIIID of the California Constitution." Like its antecedents, certain provisions of Proposition 218 may be examined by the courts for their constitutionality under both State and federal constitutional law. The City is not able to predict the outcome of any such examination. The foregoing discussion of Proposition 218 should not be considered an exhaustive or authoritative treatment of the issues. The City does not expect to be in a position to control the consideration or disposition of these issues and cannot predict the timing or outcome of any judicial or legislative activity in this regard. Interim rulings, final decisions, legislative proposals and legislative enactments may all affect the impact of Proposition 218 on the Bonds as well as the market for the Bonds. Legislative and court calendar delays and other factors may prolong any uncertainty regarding the effects of Proposition 218. Loss of Tax Exemption As discussed under the caption "TAX MATTERS" herein, interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the Bonds were issued, as a result of future acts or omissions of the City in violation of its covenants in the Fiscal Agent Agreement. Should such an event of taxability occur, the Bonds are not subject to early redemption and will remain outstanding until maturity or until redeemed under one of the other provisions contained in the Fiscal Agent Agreement. Potential Early Redemption of Bonds from Prepayment of Reassessments Property owners within the Reassessment District are permitted to prepay their Reassessments at any time. Such payments will result in a mandatory redemption of Bonds from a prepayment of Reassessments on the Interest Payment Date for which timely notice may be given under the Fiscal Agent Agreement following the receipt of such prepayment of Reassessments the resulting redemption of Bonds purchased at a price greater than par could reduce the otherwise expected yield on such Bonds. See "THE BONDS — Redemption." Cybersecurity The City, like many other public and private entities, relies on a large and complex technology environment to conduct its operations. As a recipient and provider of personal private or sensitive information, the City is subject to multiple cyber threats including, but not limited to, hacking, viruses, malware and other attacks on computer and other sensitive digital networks and systems. Entities or individuals may attempt to gain unauthorized access to the City's digital systems for the purposes of misappropriating assets or information or 39 causing operational disruption and damage. To date, the City has not experienced an attack on its computer operating systems which resulted in a breach of its cybersecurity system that are in place. However, no assurances can be given that the City's effort to manage cyber threats and attacks will be successful or that any such attack will not materially impact the operations or finances of the City. COVID-19 (Coronavirus) Pandemic The spread of the novel strain of coronavirus called COVID-19 ("COVID-19") is causing significant negative impacts throughout the world, including in the City. Since mid -March 2020, based on guidance and directives from the State and public health agencies, the County and the City have undergone varying degrees of closure and limited reopening of public buildings and businesses. On May 6, 2020, Governor Newsom issued Executive Order N-61-20 (the "Executive Order"), waiving penalties and interest on taxes on property on the secured or unsecured roll through May 6, 2021 under certain conditions, including: (i) the property is a residential property occupied by the taxpayer or the property is used for a small business, (ii) the taxes owed were not delinquent as of March 4, 2020, (iii) the taxpayer files for relief in a form prescribed by the tax collector, and (iv) the taxpayer demonstrates economic hardship to the satisfaction of the tax collector. The Executive Order ceased as of May 6, 2021. The City initially closed certain non -essential functions of the City, while City Hall remained opened, by appointment only, and community services and public safety functions remained open to the public to service City residents and businesses. The City's Building & Safety Department remained opened and continued to issue building permits and inspect unoccupied dwellings for the lots within the City. Other City Departments that serve businesses and residents within the District telecommuted and/or continued in -person work schedules to meet the needs of the community. Other public agencies serving the property and residents within the District may have taken similar actions in response to the COVID-19 pandemic, though the District and the City can provide no assurance regarding the actions of any other public agencies. Such actions may affect the landowners ability to complete their planned development within the District as described in the Official Statement. See "PROPERTY OWNERSHIP OF APPRAISED PARCELS." The COVID-19 pandemic is ongoing, and the ultimate geographic spread of the virus, the duration and severity of the outbreak, and the economic and other actions that may be taken by governmental authorities to contain the outbreak or to treat its impacts are uncertain. However, the impact of the COVID-19 outbreak could adversely impact development within the District, including, but not limited to, one or more of the following ways: (i) potential supply chain slowdowns or shutdowns resulting from the unavailability of workers in locations producing construction materials; (ii) slowdowns or shutdowns by local governmental agencies in providing governmental permits, inspections, title and document recordation, and other services and activities associated with real estate development; (iii) delays in construction where one or more members of the workforce becomes infected with COVID-19; (iv) continued extreme fluctuations in financial markets and contraction in available liquidity; (v) extensive job losses and declines in business activity across important sectors of the economy; (vi) declines in business and consumer confidence that negatively impact economic conditions or cause an economic recession; (vii) the failure of government measures to stabilize the financial sector and introduce fiscal stimulus to counteract the economic impact of the pandemic; (viii) delays in sales or fewer sales due to lower traffic at model home complexes and real estate offices; and (ix) delays in sales, or cancellations, due to mortgage lending issues. Any adverse impact of COVID-19 on the District, landowners' operations, finances and ability to complete development within the District as planned, homebuyers' willingness and ability to pay the Reassessments when due, and the real estate market in general cannot be predicted. Legal Requirements. Other events that may affect the value of 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. 40 VERIFICATION The Verification Agent will deliver to the City its reports indicating that it has examined, in accordance with standards established by the American Institute of Certified Public Accountants, the information and assertions provided by the City and its representatives. Included in the scope of its examination will be a verification of the mathematical accuracy of the mathematical computations of the adequacy of the money deposited with the Escrow Agent to pay the interest, principal and redemption price coming due on the Prior Bonds on and prior to their respective redemption dates as described in "THE REFUNDING PLAN" herein. CONCLUDING INFORMATION Enforceability of Remedies The remedies available to the Fiscal Agent, the City, or the Owners of the Bonds upon any nonpayment of reassessment installments are in many respects dependent upon judicial actions, which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically Title 11 of the United States Code (the federal bankruptcy code) and relevant banking and insurance law, the remedies provided in the 1915 Act and the 1913 Act may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Bonds, including Bond Counsel's approving legal opinion, will be qualified as to the enforceability of the various legal instruments by limitations imposed by bankruptcy, reorganization, insolvency, or other similar laws affecting the rights of creditors generally, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases, and to the limitations on legal remedies in the State of California. Absence of Material Litigation There is no controversy or litigation now pending against the City, or, to the knowledge of its officers, threatened, restraining, or enjoining the issuance, sale, execution, or delivery of the Bonds or in any way contesting or affecting the validity of the Bonds. Certain Information Concerning the City Certain general information concerning the City is included herein as APPENDIX B hereto. THE GENERAL FUND OF THE CITY IS NOT LIABLE FOR THE PAYMENT OF THE BONDS OR THE INTEREST THEREON, AND THE TAXING POWER OF THE CITY IS NOT PLEDGED FOR THE PAYMENT OF THE BONDS OR THE INTEREST THEREON. Tax Matters The Internal Revenue Code of 1986, as amended (the "Code"), establishes certain requirements which must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from gross income for federal income tax purposes. Noncompliance with such requirements could cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to their date of issue. These requirements include, but are not limited to, provisions which limit how the proceeds of the Bonds may be spent and invested, and generally require that certain investment earnings be rebated on a periodic basis to the United States of America. The City and the Authority have made certifications and representations and have covenanted to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes pursuant to Section 103 of the Code. In the opinion of Richards, Watson & Gershon, A Professional Corporation, Bond Counsel, under existing law and assuming the accuracy of such certifications and representations by, and compliance with such covenants of, the City and the Authority, (i) interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Code, and (ii) the Bonds are not "specified private activity bonds" within the meaning of Section 57(a)(5) of the Code and, therefore, interest on the Bonds is not a preference item for purposes 41 of computing the alternative minimum tax imposed by Section 55 of the Code. Bond Counsel is also of the opinion that, under existing law, interest on the Bonds is exempt from State of California personal income taxes. Bond counsel expresses no opinion as to any other tax consequences regarding the Bonds. Under the Code, interest on the Bonds may be subject to a federal branch profits tax imposed on certain foreign corporations doing business in the United States and to a federal tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes may have certain adverse federal income tax consequences on items of income, deduction or credit for certain taxpayers, including financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, those deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations, and individuals otherwise eligible for the earned income tax credit. The applicability and extent of these and other tax consequences will depend upon the particular tax status or other tax items of the owner of the Bonds. Bond Counsel will express no opinion regarding these and other such consequences. Bond Counsel has not undertaken to advise in the future whether any circumstances or events occurring after the date of issue of the Bonds may affect the tax status of interest on the Bonds. Legislation affecting tax- exempt obligations is regularly considered by the United States Congress and may also be considered by the California legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment of obligations such as the Bonds. No assurance can be given that legislation enacted or proposed, or actions by a court, after the date of issue of the Bonds, will not eliminate, or directly or indirectly reduce the benefit of the exclusion of interest on the Bonds from gross income for federal income tax purposes, or have an adverse effect on the market value or marketability of the Bonds. For example, federal tax legislation enacted on December 22, 2017, reduced corporate tax rates, modified individual tax rates, eliminated many deductions, repealed the corporate alternative minimum tax, and generally eliminated the tax-exempt advance refunding of tax-exempt bonds and other tax advantaged bonds, among other things. In addition, investors in the Bonds should be aware that future legislative actions might increase, reduce, or otherwise change (including retroactively) the financial benefits and the treatment of all or a portion of the interest on the Bonds for federal income tax purposes for all or certain taxpayers. In all such events, the market value of the Bonds may be adversely affected and the ability of holders to sell their Bonds in the secondary market may be reduced. The Bonds are not subject to special mandatory redemption, and the interest rates on the Bonds are not subject to adjustment, in the event of any such change. Investors should consult their own financial and tax advisors to analyze the importance of these risks. Certain requirements and procedures contained or referred to in relevant documents may be changed and certain actions may be taken, under the circumstances and subject to the terms and conditions set forth in such documents, upon the advice or with the approving opinion of nationally recognized bond counsel. Bond Counsel expresses no opinion as to any Bond, or the interest thereon, if any such change occurs or action is taken upon the advice or approval of bond counsel other than Richards, Watson & Gershon, A Professional Corporation. If the issue price of a Bond (the first price at which a substantial amount of the bonds of a maturity are sold to the public) is less than the stated redemption price at maturity of such Bond, the difference constitutes original issue discount, the accrual of which is excluded from gross income for federal income tax purposes to the same extent as interest on the Bonds. Further, such original issue discount accrues actuarially on a constant yield method over the term of each such Bond and the basis of each Bond acquired at such initial offering price by an initial purchaser thereof will be increased by the amount of such accrued original issue discount. The accrual of original issue discount may be taken into account as an increase in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Bonds. Purchasers who acquire Bonds with original issue discount are advised that they should consult with their own independent tax advisors with respect to the state and local tax consequences of owning such Bonds. 42 If the issue price of a Bond is greater than the stated redemption price at maturity of such Bond, the difference constitutes original issue premium, the amortization of which is not deductible from gross income for federal income tax purposes. Original issue premium is amortized over the period to maturity of such Bond based on the yield to maturity of that Bond (or, in the case of a Bond callable prior to its stated maturity, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on that Bond), compounded semiannually For purposes of determining gain or loss on the sale or other disposition of such Bond, the purchaser is required to decrease such purchaser's adjusted basis in such Bond by the amount of premium that has amortized to the date of such sale or other disposition. As a result, a purchaser may realize taxable gain for federal income tax purposes from the sale or other disposition of such Bond for an amount equal to or less than the amount paid by the purchaser for that Bond. A purchaser of that Bond in the initial public offering at the issue price for that Bond who holds it to maturity (or, in the case of a callable Bond, to its earlier call date that results in the lowest yield on that Bond) will realize no gain or loss upon its retirement. Payments of interest on tax-exempt obligations, including the Bonds, are generally subject to IRS Form 1099-INT information reporting requirements. If an owner of a Bond is subject to backup withholding under those requirements, then payments of interest will also be subject to backup withholding. Those requirements do not affect the exclusion of such interest from gross income for federal income tax purposes. Prospective purchasers of the Bonds should consult their own independent tax advisers regarding pending or proposed federal and state tax legislation and court proceedings, and prospective purchasers of the Bonds at other than their original issuance at the respective prices indicated on the inside cover of this Official Statement should also consult their own tax advisers regarding other tax considerations such as the consequences of market discount, as to all of which Bond Counsel expresses no opinion. Bond Counsel's engagement with respect to the Bonds ends with the issuance of the Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Authority or the owners of the Bonds regarding the tax status of interest thereon in the event of an audit examination by the IRS. The IRS has a program to audit tax-exempt obligations to determine whether the interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the Bonds, under current IRS procedures, the IRS will treat the Authority as the taxpayer and the beneficial owners of the Bonds will have only limited rights, if any, to obtain and participate in judicial review of such audit. Any action of the IRS, including but not limited to selection of the Bonds for audit, or the course or result of such audit, or an audit of other obligations presenting similar tax issues, may affect the market value of the Bonds. A copy of the proposed form of opinion of Bond Counsel is attached hereto as APPENDIX C. Continuing Disclosure Pursuant to a Disclosure Agreement, the City will covenant for the benefit of the Owners of the Bonds to provide certain financial information and operating data relating to the City, the District and the Bonds by not later than April 1 after the end of the City's Fiscal Year (currently June 30) (the "Annual Report"), commencing with the report for the Fiscal Year ending June 30, 2021 due by April 1, 2022, and to provide notices of the occurrence of certain enumerated events. The Annual Report and the notices of enumerated events will be filed by the City, or its dissemination agent, if any, (currently NBS) with the MSRB through its EMMA system. The specific nature of the information to be contained in the Annual Report and the notices of enumerated events and the text of the Disclosure Agreement are set forth in APPENDIX D — FORM OF CONTINUING DISCLOSURE AGREEMENT." A default under the Disclosure Agreement will not be an event of default under the Fiscal Agent Agreement. The sole remedy under the Disclosure Agreement in the event of any failure of the City to comply will be an action to compel specific performance. These covenants will be made in order to assist the initial purchaser(s) in complying with Rule 15c2-12 of the Securities and Exchange Commission. Within the last five years, certain filings relating to the public debt obligations of the City and its related entities were incomplete or not made in a timely manner, as required under then outstanding continuing disclosure 43 obligations of the City and its related entities. [Specific non-compliance to be described based on lookback report]. The City has adopted procedures to enhance timely filing and to review and monitor compliance with all of its continuing disclosure undertakings. [Pursuant to a Property Owner Continuing Disclosure Certificate (the "Property Owner Continuing Disclosure Certificate") to be executed by MC and [ 1, as dissemination agent, MC will agree to provided, or cause to be provided, to EMMA certain information relating to the development of their property on a semi-annual basis and notices of certain enumerated events. The form of the Property Owner Continuing Disclosure Certificate is set forth in APPENDIX I — "FORM OF CONTINUING DISCLOSURE CERTIFICATE (MC)".] Approval of Legality The validity of the Bonds and certain other legal matters are subject to the approving opinion of Richards, Watson & Gershon, A Professional Law Corporation, Bond Counsel. A complete copy of the proposed form of Bond Counsel opinion is contained in APPENDIX C hereto and is printed on the Bonds. Bond Counsel undertakes no responsibility for the accuracy, completeness, or fairness of this Official Statement. Certain matters will be passed upon for the City by the City Attorney of the City. Underwriting Stifel, Nicolaus & Company, Incorporated (the "Underwriter") has agreed to purchase the Bonds if and when issued pursuant to a contract of purchase by and between the City and the Underwriter for $ (representing the aggregate principal amount of the Bonds, plus a net original issue premium of $ less an underwriter's discount of $ ). The purchase contract pursuant to which the Underwriter is purchasing the Bonds provides that the Underwriter will purchase all of the Bonds if any are purchased. The obligation of the Underwriter to make such purchase is subject to certain terms and conditions set forth in such contract of purchase. The Underwriter may offer and sell the Bonds to certain dealers and others at prices different from the prices stated on the cover page of this Official Statement. The offering prices may be changed from time to time by the Underwriter. Municipal Advisor The City has retained Del Rio Advisors, LLC, of Modesto, California, as municipal advisor (the "Municipal Advisor") in connection with the issuance of the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. Del Rio Advisors, LLC, is an independent financial advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. Miscellaneous The foregoing summaries or descriptions of provisions of the Bonds, the Fiscal Agent Agreement, and all references to other materials not purporting to be quoted in full are only brief outlines of some of the provisions thereof and do not purport to summarize or describe all of the provisions thereof, and reference is made to said documents for full and complete statements of their provisions. The appendices hereto are a part of this Official Statement. 44 Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. The Official Statement is not to be construed as a contract or agreement between the City and the purchasers or Owners of any of the Bonds. The execution and delivery of this Official Statement has been duly authorized by the City. CITY OF PALM DESERT By: [Authorized Officer] 45 APPENDIX A REASSESSMENT REPORT A-1 APPENDIX B CITY OF PALM DESERT GENERAL INFORMATION GENERAL ECONOMIC DATA CONCERNING THE CITY OF PALM DESERT AND THE COUNTY OF RIVERSIDE The following information concerning the City of Palm Desert, the County of Riverside and surrounding areas is included only for the purpose of supplying general information regarding the community. The Bonds are not an obligation of the City. The following information concerning the City and surrounding areas are included only for the purpose of supplying general information regarding the community. The Local Obligations and the Bonds are not a debt of the City, the State, or any of its political subdivisions and neither said City, said State, nor any of its political subdivisions is liable therefor. Overview The City of Palm Desert (the "City"), incorporated in November 26, 1973 as a general law city, became a charter city through the adoption of Ordinance 858 by the City Council on January 8, 1998. The City is located in the Coachella Valley and is approximately mid -way between the cities of Indio and Palm Springs, 117 miles east of Los Angeles, 118 miles northeast of San Diego and 515 miles southeast of San Francisco. The City occupies an area of approximately 26 square miles. Elevation of the City is 243 feet and the mean temperature is 73.1 degrees. Except in summer, the weather is mild and annual average rainfall is 3.38 inches. According to the State Department of Finance, the City population as of January 1, 2020 was approximately 52,986. Government The City Council is comprised of five members, elected to four-year terms every two years. In 2020, changes were made to the City's elections as a result of a legal settlement related to the California Voting Rights Act. A new downtown district, comprising about 20% of the City's population was created which is represented by one (1) elected City Council member and a larger surrounding district, comprising about 80% of the City's population was created, which is represented by four (4) elected City Council members. The City will implement ranked choice voting in both districts beginning in 2022. The general municipal election is conducted in November of even -numbered years, and councilmembers are sworn in and take office at the first meeting in December following each election. The City Council selects one of its members to serve as Mayor for a one-year term and appoints a City Manager to conduct the day to day business of the City and the City Clerk. The City Attorney is appointed by City Council. The City operates as "Contract City" utilizing, primarily, agreements with other governmental entities, private companies and individuals to provide services. Contracted services include police and fire protection provided through the County, animal control, health services, legal services and landscape maintenance. B-1 TABLE B-1 CITY OF PALM DESERT CITY COUNCIL MEMBERS Name Office Kathleen Kelly Mayor Jan Harnik Mayor Pro Tem Sabby Jonathan Council Member Gina Nestande Council Member Karina Quintanilla Council Member Labor Force and Employment The main sources of revenue in the City are derived from tourism and sales tax. Historically, the unemployment rate in the City has been lower than that for the County and the State. Table B-2 represents the labor patterns in the City, the County, the State, and the United States from 2016 through 2020. TABLE B-2 CITY OF PALM DESERT, RIVERSIDE COUNTY, STATE OF CALIFORNIA AND UNITED STATES CIVILIAN LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT (2016 through 2020) Year and Area Labor Force Employment Unemployment Unemployment Rate 2016 City 23,900 22,400 1,400 6.0% County 1,051,600 987,200 64,400 6.1 State 19,012,000 17,965,400 1,046,600 5.5 United States 159,190,000 151,440,000 7,750,000 4.9 2017 City 24,300 23,000 1,200 5.1 County 1,071,600 1,014,900 56,700 5.3 State 19,173,800 18,246,800 927,000 4.8 United States 160,320,0000 153,340,000 6,980,000 4.4 2018 City 24,600 23,500 1,100 4.4 County 1,090,100 1,041,500 48,600 4.5 State 19,263,900 18,442,400 821,500 4.3 United States 162,070,000 155,760,000 6,310,000 3.9 2019 City 24,800 23,700 1,100 4.3 County 1,105,700 1,058,700 47,000 4.2 State 19,353,700 18,550,500 803,200 4.2 United States 163,540,000 157,540,000 6,000,000 3.7 2020 City 25,100 22,400 2,700 10.8 County 1,107,700 997,700 110,000 9.9 State 18,821,200 16,913,100 1,908,100 10.1 United States 160,740,000 147,790,000 12,950,000 8.1 Sources: State of California Employment Development Department and U.S. Department of Labor, Bureau of Labor Statistics. B-2 Retail and Food Services Motor Vehicle and Parts Dealers Home Furnishings and Appliance Stores Bldg. Matrl. and Garden Equip. and Food and Beverage Stores Gasoline Stations Clothing and Clothing Accessories Stores General Merchandise Stores Food Services and Drinking Places Other Retail Group Total Retail and Food Services All Other Outlets Total All Outlets TABLE B-3 CITY OF PALM DESERT TAXABLE RETAIL SALES DATA (in the thousands) (2015 through 2019) 2019(') $ 65,093,550 122,046,532 84,436,299 81,813,404 69,984,089 253,045,206 358,374,011 252,836,165 191.502.580 $1,479.131.836 $ 324,470,184 $1,803,602,020 (1) Last year available. Sources: California Department of Tax and Fee Administration. Utilities 2018 2017 $ 82,725,948 132,768,970 82,014,590 77,869,295 67,733,653 250,503,344 341,563,319 238,890,591 165.413.351 $1,439,483,061 $ 313.228.922 $1,752,711,983 $ 44,491,689 124,455,814 89,170,778 75,359,174 64,915,851 244,443,566 329,251,150 229,246,725 157.504.642 $1,358,839,389 $ 302.675.938 $1,661,515,327 2016 $ 49,529,836 129,458,711 89,027,862 70,326,406 61,869,476 251,417,762 320,437,183 220,353,868 184.721.184 $1.377.142.288 $ 274.092.741 $1,651,235,029 2015 $ 25,832,749 112,784,398 85,154,640 71,526,119 73,512,687 250,206,480 337,171,923 211,445,325 185.221.170 $1,352,855,491 $ 263.319.995 $1,616,175,486 Water, sewage treatment and wastewater disposal are provided by the Coachella Valley Water District. Southern California Gas Company supplies natural gas to the City and electric power is provided by the Southern California Edison Company. Waste Disposal is provided by Burrtec Waste & Recycling Services. Telephone/Internet service is available through Frontier Communications. Cable television/Internet service is provided by Time Warner Cable/Spectrum. Transportation Inter -City transportation is provided by SunLine Transit Agency which provides service throughout the entire Coachella Valley. The City's central highways are California Highway 111 and 74 which connect to US Interstate 10 and to California Highway 62 and 86. Shipping is provided by numerous truck carriers which have overnight service to Los Angeles, San Francisco, San Diego and Phoenix. Rail transportation is provided by the Southern Pacific Railroad located in Indio, 10 miles east of the City, and by Amtrak, which has two stations located in Coachella Valley. A full service airport is located in Palm Springs, 12 miles northwest of the City, with approximately seven carriers providing service. The airport has an 8,500 foot runway and general aviation facilities. There is also a private airport in Bermuda Dunes, eight miles northeast of the City. Community Services The City of Palm Desert provides both police and fire protection through contracts with the County of Riverside. The Riverside County Public Library System provides library services to the City. The City/County also operates a 43,000 square foot public library on the College of the Desert campus which is jointly used by the public and the College of the Desert. B-3 The Desert Willow Golf Resort, two championship 18-hole, public golf course, is located on approximately 540 acres in the northern area of the City. This golf course also features a 33,000 square foot clubhouse with restaurant, dining and banquet facilities. The City also is home to five other public golf courses and resorts and 20 private or semi -private golf clubs and resorts. Population The following sets forth the City, the County and the State population estimates as of January 1 for the years 2017-2021: TABLE B-4 CITY OF PALM DESERT, RIVERSIDE COUNTY AND STATE OF CALIFORNIA Estimated Population (2017-2021) Year City of Riverside State of (January 1) Palm Desert Coun California 2017 53,334 2,374,555 39,352,398 2018 53,554 2,397,662 39,519,535 2019 53,695 2,419,057 39,605,361 2020 53,828 2,440,719 39,648,938 2021 53,892 2,454,453 39,466,855 Source: State of California Department of Finance, Demographic Research Unit. Employment and Industry The City is included in the Riverside -San Bernardino labor market area. The unemployment rate in the Riverside -San Bernardino -Ontario MSA was 8.1% in February 2021. This compares with an unadjusted unemployment rate of 8.4% for California and 6.6% for the nation during the same period. The unemployment rate was 8.0% for Riverside County and 8.1% in San Bernardino County. B-4 The following table summarizes the civilian labor force, employment and unemployment in the County for calendar years 2015 through 2019. TABLE B-5 RIVERSIDE-SAN BERNARDINO METROPOLITAN STATISTICAL AREA (RIVERSIDE COUNTY) CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT (Annual Averages) TITLE 2015 2016 2017 2018 20190) Civilian Labor Force(2) 1,033,500 1,051,600 1,071,600 1,090,100 1,105,700 Civilian Employment 963,800 987,200 1,014,900 1,041,500 1,058,700 Civilian Unemployment 69,600 64,400 56,700 48,600 47,000 Civilian Unemployment Rate 6.7% 6.1% 5.3% 4.5% 4.2% Total, All Industries(3) 657,900 688,400 718,400 748,500 768,400 Total Farm 12,600 12,800 12,300 12,300 12,900 Total Nonfarm 645,300 675,500 706,100 736,200 755,400 Goods Producing 94,500 101,600 105,500 112,300 113,200 Mining and Logging 300 300 400 400 500 Construction 52,900 58,600 62,200 67,400 67,600 Manufacturing 41,300 42,700 42,900 44,500 45,100 Durable Goods 28,600 29,300 29,100 30,200 30,400 Nondurable Goods 12,700 13,400 13,800 14,300 14,700 Service Providing 550,800 574,000 600,600 623,900 642,200 Trade, Transportation & Utilities 146,100 152,800 158,900 163,600 168,500 Wholesale Trade 23,300 23,800 23,900 24,900 25,700 Retail Trade 88,700 91,600 92,700 92,900 93,500 Transportation, Warehousing & Utilities 34,100 37,400 42,400 45,800 49,300 Information 6,400 6,300 6,100 6,200 6,500 Financial Activities 20,900 21,400 21,800 22,100 21,600 Finance & Insurance 11,600 11,700 11,900 11,900 11,100 Real Estate & Rental & Leasing 9,400 9,700 9,900 10,200 10,500 Professional & Business Services 62,600 65,200 66,600 70,500 73,000 Professional, Scientific & Technical Services 19,100 19,000 19,400 20,500 21,000 Management of Companies & Enterprises 3,000 3,000 2,400 2,500 3,100 Administrative & Support & Waste Services 40,500 43,200 44,700 47,500 49,000 Educational & Health Services 95,200 100,200 107,000 114,900 120,700 Educational Services 7,600 8,200 8,200 8,300 8,500 Health Care & Social Assistance 87,600 92,000 98,800 106,700 112,200 Leisure & Hospitality 83,400 88,200 91,200 93,700 97,400 Arts, Entertainment & Recreation 10,900 11,300 11,600 12,000 12,400 Accommodation & Food Services 72,500 76,900 79,600 81,700 84,900 Other Services 21,700 22,300 22,600 22,800 23,100 Government 114,500 117,600 126,400 130,100 131,600 Federal Government 6,900 7,100 7,100 7,200 7,200 State Government 16,300 17,000 17,500 17,500 17,700 Local Government 91,400 93,600 101,800 105,400 106,700 Latest year available. Civilian labor force data are by place of residence; include self-employed individuals, unpaid family workers, household domestic workers, & workers on strike. Data may not add due to rounding. The unemployment rate is calculated using unrounded data. Industry employment is by place of work; excludes self-employed individuals unpaid family workers, household domestic workers, & workers on strike. Data may not add due to rounding. B-5 Source: State of California Employment Development Department. Employer Name Abbott Vascular Inc. Abbott Vascular Inc. Agua Caliente Casino Resort Spa Amazon Fulfillment Ctr Collins Aerospace Corona City Hall Corona Regional Medical Ctr Department -Corrections -Rehab Desert Regional Medical Ctr Eisenhower Health Fantasy Springs Resort Casino J Ginger Masonry LP Kleinfelder Construction Svc La Quinta Golf Course Parkview Community Hosp Med Pechanga Resort Casino Riverside Community Hospital Riverside County Public Health Riverside University Health Southwest Healthcare System Spa Resort Casino Starcrest of California Starcrest Products Sun World Intl LLC Time Rack TABLE B-6 COUNTY OF RIVERSIDE MAJOR EMPLOYERS (2021) Location Temecula Temecula Rancho Mirage Moreno Valley Riverside Corona Corona Norco Palm Springs Rancho Mirage Indio Riverside Riverside La Quinta Riverside Temecula Riverside Riverside Moreno Valley Murrieta Palm Springs Perris Perris Coachella Corona Source: State of California Employment Development Department. Industry Hospital Equipment & Supplies -Mfrs Hospital Equipment & Supplies -Mfrs Casinos Mail Order Fulfillment Service Aircraft Components -Manufacturers Government Offices-City/Village & Twp Hospitals Government Offices -State Hospitals Hospitals Casinos Masonry Contractors Engineers -Structural Golf Courses Hospitals Casinos Hospitals Government Offices -County Hospitals Health Care Management Casinos Internet & Catalog Shopping Internet & Catalog Shopping Fruits & Vegetables -Wholesale Computer Software B-6 APPENDIX C FORM OF BOND COUNSEL OPINION [TO COME FROM BOND COUNSEL] C-1 APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT THIS CONTINUING DISCLOSURE AGREEMENT (the "Disclosure Agreement") is executed and delivered on , 2021, by the City of Palm Desert, California (the "City") in connection with the issuance of its $ City of Palm Desert Section 29 Assessment District (No. 2004-02) Limited Obligation Refunding Improvement Bonds, Series 2021 (the "Bonds"). The Bonds are issued pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds of the California Streets and Highways Code, and other applicable laws of the State. The specific terms of the Bonds are contained in a Fiscal Agent Agreement, dated as of , 2021 (the "Fiscal Agent Agreement"), between the City and U.S. Bank National Association, as fiscal agent (together with any successors, the "Fiscal Agent"). The City covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the City for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter (as defined herein) in complying with the Rule (as defined herein). SECTION 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Beneficial Owner" shall mean any person, which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). "City" shall mean the City of Palm Desert, County of Riverside, California. "Dissemination Agent" shall mean Willdan Financial Services, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation. "Financial Obligation" means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Holder" shall mean the person in whose name any Bond shall be registered. "Listed Events" shall mean any of the events listed in Section 5 of this Disclosure Agreement and any other event legally required to be reported pursuant to the Rule. "MSRB" shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access ("EMMA") website of the MSRB, currently located at hp://emma.msrb.or2. "Official Statement" shall mean the Official Statement relating to the Bonds dated , 2021. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. D-1 "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" shall mean the State of California. SECTION 3. Provision of Annual Reports. (a) The City shall, or shall cause the Dissemination Agent by written direction to such Dissemination Agent to, not later than April 1 after the end of the City's Fiscal Year (which currently ends on June 30), commencing with the report due on April 1, 2022 for the Fiscal Year ending June 30, 2021, provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. 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 Agreement; provided that the audited financial statements of the City may be submitted separately from and later than the balance of the Annual Report if they are not available by the date required above for the filing of the Annual Report. (b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report to the MSRB, the City shall provide the Annual Report to the Dissemination Agent. If by fifteen (15) Business Days prior to the date specified in (a) for the Annual Report, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall notify the City of such failure to receive the report. If the Dissemination Agent is other than the City, the City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the City and shall have no duty or obligation to review such Annual Report. (c) If the City fails to provide an Annual Report by the date required in subsection (a), the Dissemination Agent shall send in a timely manner a notice of such failure to file to the MSRB, in the form required by the MSRB. SECTION 4. Content of Annual Reports. The City's Annual Report shall contain or include by reference the following: (a) Financial Statements. The audited financial statements of the City for the most recent Fiscal Year of the City then ended. If the City prepares audited financial statements and if the audited financial statements are not available by the time the Annual Report is required to be filed, the Annual Report shall contain any unaudited financial statements of the City in a format similar to the financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. Audited financial statements of the City shall be audited by such auditor as shall then be required or permitted by State law. Audited financial statements, if prepared by the City, shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the City may from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are City. In the event that the City shall modify the basis upon which its financial statements are prepared, the City shall provide a notice of such modification to the MSRB, including a reference to the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis. (b) Financial and Operating Data. Numerical and tabular information for the immediately preceding Fiscal Year of the type contained in the Official Statement, as follows: 1. The principal amount of Bonds outstanding and any bonds issued to refund the same as of the September 30th date preceding the Annual Report. Report. 2. The balance in the Reserve Fund as of the September 30th date preceding the Annual D-2 3. An update of Table 1 (Assessed Value History), Table 2 (Value to Lien Ratios By Category), Table 3 (Estimated Value to Lien Ratio by Property Owner), and Table 5 (Fiscal Year End Summary of Delinquent Reassessments) in the Official Statement based on the assessed values for the current Fiscal Year in which the Annual Report is being filed, the reassessment levy for the current year in which the Annual Report is being filed and the delinquency status for the most recently completed Fiscal Year. 4. The status of any foreclosure proceedings being pursued by the City with respect to delinquent Reassessments. Financial information relating to the City referenced in Section 4(b) may be updated from time to time, and such updates may involve displaying data in a different format or table or eliminating data that is no longer available. The City has not undertaken in this Disclosure Agreement to provide all information an investor may want to have in making decisions to hold, sell or buy Certificates but only to provide the specific information listed above. 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 City or related public entities, which have been submitted to the MSRB or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The City shall clearly identify each such other document so included by reference. SECTION 5. Reporting of Significant Events. (a) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than ten (10) business days after the occurrence of the event: 1. principal and interest payment delinquencies; 2. unscheduled draws on debt service reserves reflecting financial difficulties; 3. unscheduled draws on credit enhancements reflecting financial difficulties; 4. substitution of credit or liquidity providers, or their failure to perform; 5. adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB); 6. tender offers; 7. defeasances; 8. rating changes; 9. bankruptcy, insolvency, receivership or similar event of the City; and 10. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. D-3 Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. 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 City, 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 liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. (b) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely manner not later than ten (10) business days after the occurrence of the event: 1. unless described in paragraph 5(a)(5), material notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; 2. modifications to rights of Bond holders; 3. bond calls; 4. release, substitution, or sale of property securing repayment of the Bonds; 5. non-payment related defaults; 6. the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, 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; 7. appointment of a successor or additional fiscal agent or the change of name of a fiscal agent; and 8. incurrence of a Financial Obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders. (c) Whenever the City obtains knowledge of the occurrence of a Listed Event described in Section 5(b), the City shall determine if such event would be material under applicable federal securities laws. (d) If the City learns of the occurrence of a Listed Event described in Section 5(a), or determines that knowledge of a Listed Event described in Section 5(b) would be material under applicable federal securities laws, the City shall within ten business days of occurrence file a notice of such occurrence with the MSRB. Notwithstanding the foregoing, notice of the Listed Event described in subsections (b)(3) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to owners of affected Bonds pursuant to the Fiscal Agent Agreement. SECTION 6. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Disclosure Agreement must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB. SECTION 7. Termination of Renorting Obligation. The City's obligations under this Disclosure Agreement shall terminate upon the legal defeasance or payment in full of all of the Bonds. If such termination D-4 occurs prior to the final maturity date of the Certificates, the City shall give notice of such termination in a filing with the MSRB. SECTION 8. Dissemination Agent. The City may, from time to lime, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Agreement. The initial Dissemination Agent shall be Willdan Financial Services. The Dissemination Agent may resign at any time by providing at least thirty (30) days' notice in writing to the Issuer and the City. SECTION 9. Amendment: Waiver. Notwithstanding any other provision of this Disclosure Agreement, the City may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3, 4 or 5(a) or (b), 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 Certificates, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or Beneficial Owners of the Bonds. SECTION 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement 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 Agreement. If the City 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 Agreement, the City shall have no obligation under this Disclosure Agreement 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 City to comply with any provision of this Disclosure Agreement, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Agreement; provided, that any such action may be instituted only in Superior Court of the State of California in and for the County of Riverside (the "County") or in U.S. Federal Court in or nearest to the County. The sole remedy under this Disclosure Agreement in the event of any failure of the City to comply with this Disclosure Agreement shall be an action to compel performance. SECTION 12. Duties. Immunities and Liabilities of Dissemination Agent. A Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the City agrees to indemnify and save such 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 obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. D-5 SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. This Disclosure Agreement is not intended to create any monetary rights on behalf of any person based upon the Rule. SECTION 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. D-6 IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement as of the date first above written. CITY OF PALM DESERT By: Authorized Officer WILLDAN FINANCIAL SERVICES, as Dissemination Agent By: Authorized Officer D-7 EXHIBIT A FORM OF NOTICE TO THE MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Palm Desert Name of Bond Issue: $ City of Palm Desert Section 29 Assessment District (No. 2004-02) Limited Obligation Refunding Improvement Bonds Series 2021 Date of Issuance: , 2021 NOTICE IS HEREBY GIVEN that the City of Palm Desert (the "City") on behalf of City of Palm Desert Section 29 Assessment District (No. 2004-02) has not provided an Annual Report with respect to the above -named Bonds as required by Section 3 of the Disclosure Agreement of the City, dated the Date of Issuance. The City anticipates that the Annual Report will be filed by Dated: WILLDAN FINANCIAL SERVICES, as Dissemination Agent By: Authorized Officer D-8 APPENDIX E APPRAISAL REPORT E- 1 APPENDIX F THE BOOK -ENTRY SYSTEM The information in this section concerning DTC and DTC's book -entry only system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, premium, if any, accreted value and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC to the City which the City believes to be reliable, but the City and the Underwriter do not and cannot make any independent representations concerning these matters and do not take responsibility for the accuracy or completeness thereof. Neither the DTC, Direct Participants, Indirect 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. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully - registered Bond will be issued for each annual maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited through the facilities of DTC. 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 3.6 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 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-E." 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. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct 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 Bonds 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 Bonds representing their ownership interests in Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. F-1 To facilitate subsequent transfers, all Bonds 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 Bonds 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 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and 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 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as prepayments, tenders, defaults, and proposed amendments to the Series 2021 Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being prepaid, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds 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 the City or the Fiscal Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Fiscal Agent, or the City, 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 the City or the Fiscal 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. A Series 2021 Bond Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Fiscal Agent, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant's interest in the Bonds, on DTC's records, to the Fiscal Agent. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC's records and followed by a book - entry credit of tendered Bonds to the Fiscal Agent's DTC account. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered. F-2 The City may decide to discontinue use of the system of book -entry only transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered to DTC. F-3 APPENDIX G MARKET ABSORPTION STUDY G-1 APPENDIX H SUMMARY OF THE FISCAL AGENT AGREEMENT H-1 APPENDIX I [FORM OF CONTINUING DISCLOSURE CERTIFICATE (MC)] This Continuing Disclosure Certificate (MC) (this "Disclosure Certificate") is executed and delivered by the undersigned (collectively the "Property Owner") and [Willdan Financial Services] as dissemination agent (the "Dissemination Agent") in connection with the issuance of the bonds captioned above (the "Bonds") by the City of Palm Desert (the "City"). The Bonds are being issued pursuant to a resolution adopted by the City Council of the City on [June 10, 2021], and a Fiscal Agent Agreement, dated as of 1, 2021, (the "Indenture"), by and between the City and U.S. Bank National Association, as fiscal agent (the "Fiscal Agent"). The Property Owner covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Property Owner for the benefit of the holders and beneficial owners of the Bonds. Section 2. Definitions. In addition to the definitions set forth above and in the Indenture, 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: "Affiliate" means any person presently directly (or indirectly through one or more intermediaries) currently under managerial control of the Property Owner, and about whom information could be material to potential investors in their investment decision regarding the Bonds (including without limitation information relevant to the proposed development of the Property or the Property Owner's ability to pay the Special Taxes related to the Property prior to delinquency). "Assumption Agreement" means an undertaking of an Obligated Owner, or an Affiliate thereof, for the benefit of the holders and beneficial owners of the Bonds containing terms substantially similar to this Disclosure Certificate (as modified for such Obligated Owner's development and financing plans with respect to the Property), whereby such Obligated Owner or Affiliate agrees to provide Periodic Reports and notices of significant events, setting forth the information described in sections 4 and 5 hereof, respectively, with respect to the portion of the Property owned by such Obligated Owner and its Affiliates and, at the option of the Property Owner or such Obligated Owner, agrees to indemnify the Dissemination Agent (if any) pursuant to a provision substantially in the form of Section 11 hereof. "City" means the City of Palm Desert. "Dissemination Agent" means [Willdan Financial Services], or any successor Dissemination Agent designated in writing by the Property Owner, and which has filed with the Property Owner, the City and the Fiscal Agent a written acceptance of such designation, and which is experienced in providing dissemination agent services such as those required under this Disclosure Certificate. "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, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. "Obligated Owner" means, as of any Report Date, an owner of all or a portion of the Property that represents more than 20% of the Assessment Lien. "Official Statement" means the final limited offering memorandum executed by the City in connection with the issuance of the Bonds. I-1 "Participating Underwriter" means Stifel Nicolaus & Company, Incorporated, the original Underwriter of the Bonds. "Periodic Report" means any Periodic Report provided by the Property Owner pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Person" means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. "Property" means Assessor's Parcel Numbers [ 1. "Report Date" means December 31 and June 30 of any Fiscal Year. "Rule" means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "Reassessments" means the reassessments levied on taxable property within the District. Section 3. Provision of Periodic Reports. (a) [SPECIFIC REQUIREMENTS/PROVISIONS TO COME] (b) If the Dissemination Agent does not receive a Periodic Report by 15 calendar days prior to the Report Date, the Dissemination Agent shall send a reminder notice to the Property Owner that the Periodic Report has not been provided as required under Section 3(a) above. The reminder notice shall instruct the Property Owner to determine whether its obligations under this Disclosure Certificate have terminated (pursuant to Section 6 below) and, if so, to provide the Dissemination Agent with a notice of such termination in the same manner as for a Listed Event (pursuant to Section 5 below). If the Property Owner does not provide, or cause the Dissemination Agent to provide, a Periodic Report to the MSRB by the Report Date as required in subsection (a) above, the Dissemination Agent shall, in a timely manner, send a notice to the MSRB in substantially the form attached hereto as Exhibit A, with a copy to the Fiscal Agent (if other than the Dissemination Agent), the District, the Participating Underwriter and the Property Owner. (c) With respect to the Periodic Report, the Dissemination Agent shall, to the extent the Periodic Report has been furnished to it, file the Periodic Report with the MSRB and file a report with the Property Owner (if the Dissemination Agent is other than the Property Owner), the City and the Participating Underwriter certifying that the Periodic Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided to and filed with the MSRB. Section 4. Content of Periodic Reports. The Property Owner's Periodic Report shall contain or incorporate by reference the information set forth in Exhibit B, any or all of which may be included by specific reference to other documents, including official statements of debt issues of the Property Owner or related public entities, which have been submitted to the MSRB or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The Property Owner shall clearly identify each such other document so included by reference. In addition to any of the information expressly required to be provided in Exhibit B, the Property Owner's Periodic Report shall include 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. Section 5. Reporting of Significant Events. (a) The Property Owner shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to itself or the Property, if material: I-2 [SPECIFIC REQUIREMENTS/PROVISIONS TO COME] (b) Whenever the Property Owner obtains knowledge of the occurrence of a Listed Event, the Property Owner shall as soon as possible determine if such event would be material under applicable Federal securities law. (c) If the Property Owner determines that knowledge of the occurrence of a Listed Event would be material under applicable Federal securities law, the Property Owner shall, or shall cause the Dissemination Agent to, promptly file a notice of such occurrence with the MSRB, with a copy to the Fiscal Agent, the District and the Participating Underwriter. Section 6. Duration of Reporting Obligation. (a) All of the Property Owner's obligations hereunder shall commence on the date hereof and shall terminate (except as provided in Section 11) on the earliest to occur of the following: [SPECIFIC REQUIREMENTS/PROVISIONS TO COME] The Property Owner shall give notice of the termination of its obligations under this Disclosure Certificate in the same manner as for a Listed Event under Section 5. Nothing herein shall require any person (including, without limitation, the City and the Participating Underwriter) to confirm the satisfaction of any condition for termination of the Property Owner's obligations hereunder pursuant to this Section 6. (b) If a portion of the Property owned by the Property Owner, or any Affiliate of the Property Owner, is conveyed to a Person that, upon such conveyance, will be an Obligated Owner, the obligations of the Property Owner hereunder with respect to the property in the District owned by such Obligated Owner and its Affiliates may be assumed by such Obligated Owner or by an Affiliate thereof, and the Property Owner's obligations hereunder with respect to such property will be terminated. In order to effect such assumption, such Obligated Owner or Affiliate shall enter into an Assumption Agreement in form and substance reasonably satisfactory to the City and the Participating Underwriter. Section 7. Dissemination Agent. The Property Owner may, from time to time, appoint or engage a Dissemination Agent to assist the Property Owner in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be Willdan Financial Services. The Dissemination Agent may resign by providing thirty days' written notice to the C, the Property Owner and the Fiscal Agent. Section 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Property Owner may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied (provided, however, that the Dissemination Agent shall not be obligated under any such amendment that modifies or increases its duties or obligations hereunder without its written consent thereto): (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 Bonds, or type of business conducted; and (b) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Fiscal Agent Agreement with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds. Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Property Owner from disseminating any other information, using the means of dissemination set forth in this I-3 Disclosure Certificate or any other means of communication, or including any other information in any Periodic Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Property Owner chooses to include any information in any Periodic Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Property Owner shall have no obligation under this Disclosure Certificate to update such information or include it in any future Periodic Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Property Owner to comply with any provision of this Disclosure Certificate, the Fiscal Agent shall (upon written direction and only to the extent indemnified to its satisfaction from any liability, cost or expense, including fees and expenses of its attorneys), and the Participating Underwriter and any holder or beneficial owner of the Bonds may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Property Owner 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 and exclusive remedy under this Disclosure Certificate in the event of any failure of the Property Owner to comply with this Disclosure Certificate shall be an action to compel performance. Section 11. 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 Property Owner agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents (each, an "Indemnified Party"), harmless against any loss, expense and liability which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the reasonable costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding losses, liabilities, costs and expenses due to an Indemnified Parry's negligence or willful misconduct or failure to perform its duties hereunder. The Dissemination Agent shall be paid compensation for its services provided hereunder from the Administrative Expense Fund established under the Fiscal Agent Agreement in accordance with the Dissemination Agent's schedule of fees as amended from time to time, which schedule, as amended, shall be reasonably acceptable, and all reasonable expenses, reasonable legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. 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 Property Owner under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Section 12. Notices. Any notice or communications to be among any of the parties to this Disclosure Certificate may be given as follows: To the Issuer: City of Palm Desert 73510 Fred Waring Drive Palm Desert, California 92260 Attention: Director of Finance To the Fiscal Agent: U.S. Bank National Association 633 West 5th Street, 24th Floor Los Angeles, California 90071 Attn: Global Corporate Trust Services LM-CA-T24T To the Participating Underwriter: Stifel Nicolaus & Company, Incorporated One Montgomery Street, 35th Floor San Francisco, CA 94104 I-4 To the Dissemination Agent: Willdan Financial Services 27368 Via Industria, Suite 200 Temecula, California 92590 Attention: Federal Compliance Group To the Property Owner: MC Properties LLC [address to come] MacLeod -Couch Land Company LLC [address to come] provided, however, that all such notices, requests or communication may be made by telephone and promptly confirmed by writing. Any person may, by notice given as aforesaid to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent. Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Property Owner (its successors and assigns), the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. All obligations of the Property Owner hereunder shall be assumed by any legal successor to the obligations of the Property Owner as a result of a sale, merger, consolidation or other reorganization. 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: , 2021 ACCEPTED AND AGREED TO: WILLDAN FINANCIAL SERVICES, as Dissemination Agent By: Authorized Signatory MC PROPERTIES, LLC By: Name: Title: MACLEOD-COUCH LAND COMPANY, LLC By: Name: Title: I-5 Name of Issuer: EXHIBIT A NOTICE OF FAILURE TO FILE PERIODIC REPORT City of Palm Desert Name of Bond Issue: City of Palm Desert Section 29 Assessment District (No. 2004-02) Limited Obligation Refunding Improvement Bonds, Series 2021 Date of Issuance: , 2021 NOTICE IS HEREBY GIVEN that collectively, MC Properties LLC and MacLeod -Couch Land Company, LLC (collectively, the "Obligated Owner") has not provided a Periodic Report with respect to the above -named bonds as required by that certain Continuing Disclosure Certificate, dated , 2021. The Obligated Owner anticipates that the Periodic Report will be filed by Dated: cc: Fiscal Agent City Participating Underwriter Property Owner/Obligated Owner [Willdan Financial Services,] as Dissemination Agent By: Its: I-6 EXHIBIT B PERIODIC REPORT $ CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 This Periodic Report is hereby submitted under Section 4 of the Continuing Disclosure Certificate (the "Disclosure Certificate") dated , 2021, executed by the undersigned (collectively, the "Property Owner") in connection with the issuance of the above -captioned bonds by the City of Palm Desert (the "City"). Capitalized terms used in this Periodic Report but not otherwise defined have the meanings given to them in the Disclosure Certificate. [SPECIFIC REQUIREMENTS TO COME] Certification The undersigned Property Owner hereby certifies that this Periodic Report constitutes the Periodic Report required to be furnished by the Property Owner under the Disclosure Certificate. ANY STATEMENTS REGARDING THE PROPERTY OWNER, THE DEVELOPMENT OF THE PROPERTY, THE PROPERTY OWNER'S FINANCING PLAN OR FINANCIAL CONDITION, OR THE BONDS, OTHER THAN STATEMENTS MADE BY THE PROPERTY OWNER IN AN OFFICIAL RELEASE, OR FILED WITH THE MUNICIPAL SECURITIES RULEMAKING BOARD, ARE NOT AUTHORIZED BY THE PROPERTY OWNER. THE PROPERTY OWNER IS NOT RESPONSIBLE FOR THE ACCURACY, COMPLETENESS OR FAIRNESS OF ANY SUCH UNAUTHORIZED STATEMENTS. THE PROPERTY OWNER HAS NO OBLIGATION TO UPDATE THIS PERIODIC REPORT OTHER THAN AS EXPRESSLY PROVIDED IN THE DISCLOSURE CERTIFICATE. Dated: MC PROPERTIES, LLC By: Name: Title: MACLEOD-COUCH LAND COMPANY, LLC By: Name: Title: I-7 [This page has intentionally been left blank.] Stradling Yocca Carlson & Rauth Draft of 5/26/21 $ CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-2) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 BOND PURCHASE AGREEMENT , 2021 City of Palm Desert 73510 Fred Waring Drive Palm Desert, California 92260 Ladies and Gentlemen: Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), acting not as a fiduciary or agent for the City of Palm Desert (the "City"), offers to enter into this Bond Purchase Agreement (this "Purchase Agreement") with the City, which, upon acceptance by the City, will be binding upon the City and upon the Underwriter. This offer is made subject to its acceptance by the City prior to 5:00 p.m. California time on the date hereof; and, if not accepted prior thereto, it will be subject to withdrawal by the Underwriter upon notice delivered to the City. The City acknowledges and agrees that: (i) the purchase and sale of the Bonds (as such term is defined below) pursuant to this Purchase Agreement is an arm's-length commercial transaction between the City and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not and has not been acting as a "municipal advisor" (as such term is defined in Section 15B of the Securities Exchange Act of 1934, as amended) to the City; (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City on other matters) and the Underwriter has no obligation to the City with respect to the offering contemplated by this Purchase Agreement except the obligations expressly set forth in this Purchase Agreement; (iv) the Underwriter has financial interests that may differ from and be adverse to those of the City; and (v) the City has consulted its own legal, financial and other advisors to the extent that it has deemed appropriate in connection with this transaction. 1. Purchase, Sale and Delivery of the Bonds. (a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter agrees to purchase from the City, and the City agrees to sell to the Underwriter, all (but not less than all) of the City of Palm Desert Section 29 Assessment District (No. 2004-02) Limited Obligation Refunding Improvement Bonds, Series 2021 (the "Bonds") in the aggregate principal amount specified in Exhibit A hereto. The Bonds shall be dated the Closing Date (as such term is hereinafter defined); and they shall bear interest from said date (payable semiannually on March 2 and September 2 in each year, commencing March 2, 2022) at the rates per annum, mature on the dates and in the amounts, and be subject to redemption, all as set forth in Exhibit A hereto. The purchase price for the Bonds shall be the amount specified as such in Exhibit A hereto. (b) The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable and subject to redemption as provided in, the Fiscal Agent Agreement by and between the City and U.S. Bank National Association ("U.S. Bank"), as fiscal agent, dated as of 1, 2021 (the "Fiscal Agent Agreement"), approved by a resolution adopted by the City Council of the City (the "City Council") on May 27, 2021 (the "Resolution of Issuance"). The Bonds and interest thereon will be payable from unpaid reassessments (the "Reassessments") levied and collected within the area designated "City of Palm Desert Section 29 Assessment District (No. 2004-02)" (the "District") formed by the City in accordance with the Municipal Improvement Act of 1913, as amended, being Division 12 of the California Streets and Highways Code (the "Bond Law"), and the Refunding Act of 1984 for 1915 Improvement Act Bonds, as amended, being Division 11.5 of the California Streets and Highways Code (the "Refunding Law," and, together with the Bond Law, the "Act"). Proceeds from the sale of the Bonds will be used, along with other available funds, in accordance with the Fiscal Agent Agreement and the Act, to refund the outstanding City of Palm Desert Section 29 Assessment District (No. 2004-02) Limited Obligation Improvement Bonds, Series 2007 (the "Prior Bonds"). (c) Subsequent to its receipt of a certificate of the City, deeming the Preliminary Official Statement for the Bonds, dated , 2021 (the "Preliminary Official Statement"), final for purposes of Rule 15c2-12 of the Securities and Exchange Commission ("Rule 15c2-12"), the Underwriter has distributed copies of the Preliminary Official Statement. The City hereby ratifies the use by the Underwriter of the Preliminary Official Statement and authorizes the Underwriter to use and distribute, in connection with its offer and sale of the Bonds, printed and/or electronic forms of: (i) the final Official Statement, dated the date hereof (including all information previously permitted to have been omitted by Rule 15c2-12, and any supplements and amendments thereto as have been approved by the City as evidenced by the execution and delivery of such document by an officer of the City) (the "Official Statement"), (ii) the Fiscal Agent Agreement, (iii) the Continuing Disclosure Agreement, dated as of 1, 2021 (the "City Continuing Disclosure Agreement"), by and between the City and Willdan Financial Services, as dissemination agent, (iv) this Purchase Agreement and (v) all other documents, certificates and written statements furnished by the City to the Underwriter in connection with the transactions contemplated by this Purchase Agreement and all information therein. The Underwriter hereby agrees to deliver a copy of the Official Statement to the Municipal Securities Rulemaking Board (the "MSRB") through the Electronic Municipal Marketplace Access website of the MSRB on or before the Closing Date and otherwise to comply with all applicable statutes and regulations in connection with the offering and sale of the Bonds, including, without limitation, MSRB Rule G-32 and Rule 15c2-12. (d) Prior to the acceptance of this Purchase Agreement, the City shall have caused to be delivered to the Underwriter certificates of MC Properties LLC ("MC"), MacLeod -Couch Land Company, LLC ("MacLeod"), UHC Palm Desert 00357 Palm Desert, L.P. ("UHC"), Ponderosa Homes II, Inc. ("Ponderosa"), GID Monterey, LLC ("GID Monterey"), GID Palm Desert, LLC ("GID Palm Desert") and Lennar Homes of California, Inc. ("Lennar") each dated the date of the Preliminary Official Statement and in substantially the forms attached hereto as Exhibits C, D, E, F, G , H and I, respectively. 2 2. Public Offering and Establishment of Issue Price. (a) The Underwriter agrees to make a bona fide public offering of the Bonds at the initial public offering price or prices set forth on the inside cover page of the Official Statement and in Exhibit A hereto; and, subject to Section 2(c) and 2(d) hereof, the Underwriter reserves the right to change such initial public offering prices as the Underwriter deems necessary or desirable, in its sole discretion, in connection with the marketing of the Bonds, and to sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the initial offering prices set forth in the Official Statement. A "bona fide public offering" shall include an offering to institutional investors or registered investment companies, regardless of the number of such investors to which the Bonds are sold. (b) The Underwriter agrees to assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing (defined below) an "issue price" or similar certificate, together with copies of supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel (as such term is hereinafter defined) to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the City under this section to establish the issue price of the Bonds may be taken on behalf of the City by the City's municipal advisor, Del Rio Advisors, LLC (the "Municipal Advisor") and any notice or report to be provided to the City may be provided to the City's Municipal Advisor, with a copy to the City. (c) Except as otherwise set forth in Exhibit A attached hereto, the City will treat the first price at which 10% of each maturity of the Bonds (the "10% test"), identified under the column "10% Test Used" in Exhibit A, is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the City the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either (i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter's reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the City or Bond Counsel. For purposes of this section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. (d) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the "initial offering price"), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also sets forth, identified under the column "Hold the Offering Price Rule Used," as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the "hold -the -offering - price rule"). So long as the hold -the -offering -price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following. 3 (1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. The Underwriter will advise the City promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.] (e) The Underwriter confirms that: (1) any selling group agreement and any third -party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker -dealer that is a party to such third -party distribution agreement, as applicable: (A) (i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold -the -offering -price rule, if applicable, if and for so long as directed by the Underwriter, (B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or broker - dealer, the Underwriter shall assume that each order submitted by the dealer or broker -dealer is a sale to the public. (2) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third -party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker -dealer that is a party to such third -party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold -the -offering -price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (0 The City acknowledges that, in making the representations set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold -the -offering -price rule, if applicable to the Bonds, as set forth 4 in a selling group agreement and the related pricing wires, and (ii) in the event that a third -party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker -dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold -the -offering -price rule, if applicable to the Bonds, as set forth in the third -party distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker -dealer that is a party to a third -party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold -the -offering -price rule, if applicable to the Bonds. (g) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section: (1) "public" means any person other than an underwriter or a related party; (2) "underwriter" means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third -party distribution agreement participating in the initial sale of the Bonds to the public); (3) a purchaser of any of the Bonds is a "related party" to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and (4) "sale date" means the date of execution of this Purchase Agreement by the City and the Underwriter. 3. Delivery of the Bonds. At 8:00 A.M., Pacific Daylight Time, on , 2021, or at such other time or date as shall be agreed upon by the Underwriter and the City (such time and date being herein referred to as the "Closing Date"), the City will deliver (i) to The Depository Trust Company ("DTC") or to U.S. Bank National Association, acting as DTC's agent, the Bonds in definitive form (all Bonds being in book -entry form registered in the name of Cede & Co. and having the CUSIP numbers assigned to them printed thereon), duly executed by the officers of the City, as provided in the Fiscal Agent Agreement, and (ii) to the Underwriter, at the offices of Bond Counsel, or at such other place as shall be mutually agreed upon by the City and the Underwriter, the other documents herein mentioned; and the Underwriter shall accept such delivery and pay the purchase price of the Bonds in immediately available funds (such delivery and payment being herein referred to as the "Closing"). 5 4. Representations, Warranties and Agreements of the City. The City represents, warrants and covenants to and agrees with the Underwriter that: (a) The City is a charter city and municipal corporation of the State of California (the "State"), duly organized and validly existing pursuant to the Constitution and laws of the State with full right, power and authority to (i) enter into this Purchase Agreement, (ii) enter into the Fiscal Agent Agreement, (iii) enter into an escrow agreement dated as of 1, 2021 (the "Escrow Agreement"), by and between the City and U.S. Bank, as escrow agent, (iv) enter into the City Continuing Disclosure Agreement, (v) adopt the Resolution of Issuance, adopt the resolution of the City Council declaring its intention to levy reassessments and to issue refunding bonds upon the security thereof (the "Resolution of Intention"), and the resolution of the City Council adopting the Reassessment Report, confirming and ordering the reassessment pursuant to summary proceedings and directing actions with respect thereto (the "Resolution Confirming Reassessments"), and to take all other actions on the part of the City relating thereto (the Resolution of Issuance, the Resolution of Intention and the Resolution Confirming Reassessments are collectively referred to herein as the "City Resolutions"), (vi) issue, sell and deliver the Bonds as provided in this Purchase Agreement and the Fiscal Agent Agreement, and (vii) carry out and consummate the transactions on its part contemplated by this Purchase Agreement, the Fiscal Agent Agreement, the City Continuing Disclosure Agreement, the Escrow Agreement and the Official Statement. This Purchase Agreement, the Fiscal Agent Agreement, the City Continuing Disclosure Agreement, the Escrow Agreement, the Bonds and the Official Statement are collectively referred to herein as the "City Documents." (b) The City has complied, and will at the Closing Date be in compliance, in all material respects, with the City Resolutions and the City Documents, and any immaterial compliance by the City, if any, will not impair the ability of the City to carry out, give effect to or consummate the transactions contemplated by the foregoing. From and after the date of issuance of the Bonds, the City will continue to comply with the covenants of the City contained in the City Documents. (c) By all necessary official action of the City, the City has (i) duly and validly formed the District, confirmed the Reassessments described in the Official Statement and taken, or prior to the Closing Date will take, all actions necessary to cause said Reassessments to constitute liens on the respective parcels to which they were confirmed, and (ii) duly authorized and approved the execution and delivery by the City of, and the performance by the City of the obligations on its part contained in, the City Documents and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered by the parties thereto, the City Documents will constitute the legally valid and binding obligations of the City enforceable upon the City in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors' rights generally. The City has complied, and will at the Closing be in compliance in all respects, with the terms of the City Documents applicable to the City. (d) The Reassessments described in the Official Statement have been duly and lawfully confirmed under and pursuant to the provisions of the California Constitution and the Act; and each such Reassessment constitutes, or prior to the Closing Date will constitute, a valid and legally binding lien on the parcel of land in the District on which such Reassessment was confirmed. The Reassessments are not subject to repeal or reduction by action of the City Council if the effect thereof would interfere with the timely payment of the principal of and interest on the Bonds. Except as disclosed in the Official Statement, as of the Closing Date there will be no outstanding liens for general 6 (ad valorem) taxes or special taxes or assessment liens against the land in the District which will be senior to the Reassessment liens. (e) To the best of the City's knowledge, the City is not in breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order, or under any indenture, fiscal agent agreement, loan agreement, note, resolution, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the performance by the City of its obligations under the City Resolutions or the City Documents, and compliance with the provisions of each thereof will not, in any material respect, conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order, or a material breach of or default under any loan agreement, note, resolution, trust agreement, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound. (f) Except for compliance with the blue sky or other states' securities law filings, as to which the City makes no representations, all approvals, consents, authorizations, elections and orders of or filings or registrations with any state governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the City of its obligations hereunder, or under the City Resolutions or the City Documents, have been obtained and are in full force and effect. (g) The City shall not supplement or amend the Official Statement or cause the Official Statement to be supplemented or amended without the prior written consent of the Underwriter, which consent shall not be unreasonably withheld. Until the date which is twenty-five (25) days after the "end of the underwriting period" (as hereinafter defined), if any event shall occur of which the City is aware, as a result of which it may be necessary to supplement the Official Statement in order to make the statements in the Official Statement, in light of the circumstances existing at such time, not misleading, the City shall forthwith notify the Underwriter of any such event of which it has knowledge and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary, in the Underwriter's reasonable opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time and the City shall promptly furnish to the Underwriter a reasonable number of copies of such supplement. If any such amendment or supplement of the Official Statement shall occur after the Closing Date, the City also shall furnish, or cause to be furnished, such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably deem necessary to evidence the truth and accuracy of such amendment or supplement to the Official Statement. As used herein, the term "end of the underwriting period" means the later of such time as (i) the City delivers the Bonds to the Underwriter, or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the "end of the underwriting period" shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the City at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the "end of the underwriting period." (h) The Fiscal Agent Agreement creates a valid pledge of the unpaid Reassessments and the moneys in the Redemption Fund, the Reassessment Fund and the Reserve Fund (and the accounts 7 therein) established pursuant to the Fiscal Agent Agreement, including the investments thereof, subject in all cases to the provisions of the Fiscal Agent Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein. Until such time as moneys have been set aside in an amount sufficient to pay all then outstanding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon to maturity or to the date of redemption if redeemed prior to maturity, and premium, if any, the City will faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Fiscal Agent Agreement. (i) Except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body with respect to which the City has been served with process or has received pleadings or equivalent documents is pending against the City or, to the best knowledge of the City, threatened against the City (i) which would materially adversely affect the ability of the City to perform its obligations under the City Resolutions or the City Documents, or (ii) seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the collection or application of the Reassessments pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the City Resolutions, the City Documents, or any action contemplated by any of said documents, or (iii) in any way contesting the completeness or accuracy of the Preliminary Official Statement or the powers or authority of the City with respect to the Bonds, the City Resolutions, the City Documents, or any action of the City contemplated by any of said documents; nor is there any action pending against the City with respect to which the City has been served with process or has received pleadings or equivalent documents or, to the best knowledge of the City, threatened against the City which alleges that interest on the Bonds is not excludable from gross income for federal income tax purposes or is not exempt from California personal income taxation. (j) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order for the Underwriter to qualify the Bonds for offer and sale under the "Blue Sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, the City shall not be required to register as a dealer or a broker of securities or to consent to service of process in connection with any blue sky filing. (k) Any certificate signed by any official of the City authorized by the City Council to do so shall be deemed a representation and warranty to the Underwriter as to the statements made therein. (1) The City will apply the proceeds of the Bonds in accordance with the Fiscal Agent Agreement and as described in the Official Statement. (m) The information contained in the Preliminary Official Statement (other than information with respect to DTC's book -entry system under the caption "THE BONDS —Registration" and in Appendix F, as to which no view is expressed) was as of the date thereof and is as of the date hereof, and the information contained in the Official Statement (other than information with respect to DTC's book -entry system under the caption "THE BONDS —Registration" and in Appendix F, as to which no view is expressed), is as of its date and shall be on the Closing Date, true and correct in all material respects and such information does not and shall not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 8 (n) The Preliminary Official Statement heretofore delivered to the Underwriter has been deemed final by the City as of its date, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of Rule 15c2-12. The City hereby covenants and agrees that, within seven (7) business days from the date hereof, or, if sooner, upon reasonable written notice from the Underwriter, within sufficient time to accompany any confirmation requesting payment for Bonds from any customer of the Underwriter, the City shall cause a final printed form of the Official Statement to be delivered to the Underwriter in a quantity mutually agreed upon by the Underwriter and the City so that the Underwriter may comply with paragraph (b)(4) of Rule 15c2-12 and Rules G- 12, G-15, G-32 and G-36 of the MSRB. (o) Except as disclosed in the Official Statement, neither the City nor any of its affiliated agencies is, or has been within the last five (5) years, in breach of any reporting obligation that it has undertaken under Rule 15c2-12. (p) The City shall not amend, terminate, repeal or rescind, and will not agree to any amendment, termination, repealing or rescission of any of the City Resolutions or the City Documents without the prior written consent of the Underwriter prior to the Closing Date. (q) The City shall not voluntarily undertake any course of action inconsistent with satisfaction of the requirements applicable to the City as set forth in this Purchase Agreement. (r) The City shall not knowingly take or omit to take any action that, under existing law, may adversely affect the exemption from personal income taxation of the State or the exclusion from gross income for federal income tax purposes of the interest on the Bonds. 5. Conditions to the Obligations of the Underwriter. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the City contained herein, as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the City of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions: (a) At the Closing Date, the City Resolutions and the City Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by this Purchase Agreement, all such actions as, in the opinion of Richards, Watson & Gershon, A Professional Corporation ("Bond Counsel"), shall be necessary and appropriate; (b) The information contained in the Official Statement will, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant to Section 4(m) hereof, be true, correct and complete in all material respects and will not, as of the Closing Date or as of the date of any supplement or amendment thereto pursuant to Section 4(g) hereof, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; 9 (c) Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices set forth in the Official Statement or the ability of the Underwriter to enforce contracts for the sales of the Bonds shall not have been materially adversely affected, in the reasonable judgment of the Underwriter (evidenced by a written notice to the City terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following: (1) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service of the United States of America, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon the interest that would be received by the holders of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; (2) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America, or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Fiscal Agent Agreement is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement is or would be in violation of the federal securities laws, rules or regulations as amended and then in effect; (3) any amendment to the federal or California Constitution or action by any federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City, its property, income, securities (or interest thereon), the validity or enforceability of the Reassessments or the ability of the City to refund the Prior Bonds as contemplated by the City Resolutions and the City Documents; (4) any event occurring, or information becoming known, which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement or the Official Statement, or results in the Preliminary Official Statement or the Official Statement containing any untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (x) the City refuses to permit the Official Statement to be supplemented to supply such statement or information or (y) the effect of any such supplement would be to materially adversely affect the market price or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; 10 (5) a declaration of war or an escalation of, or engagement in, military hostilities by the United States or the occurrence of any other national or international emergency or calamity relating to the effective operation of the government of, or the financial community in, the United States; (6) the declaration of a general banking moratorium by federal, State of New York or State of California authorities, or the general suspension of trading on any national securities exchange or the fixing and maintaining in force of minimum or maximum prices for trading, or maximum ranges for prices for securities shall have been required and be in force on the New York Stock Exchange or other national securities exchange, whether by virtue of determination by that exchange or by order of the Securities and Exchange Commission (the "SEC") or any other governmental authority having jurisdiction; (7) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; (8) there shall have been any material adverse change in the affairs of the City; (9) there shall be established any new restriction on transactions in securities materially affecting the free market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a change to the net capital requirements of, underwriters established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or (10) a stop order, release, regulation, or no -action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made to the effect that the issuance, offering, or sale of the Bonds, including all the underlying obligations as contemplated hereby or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds is or would be in violation of any provision of federal securities laws at the Closing Date. (d) On the Closing Date, the Underwriter shall have received counterpart originals or certified copies of the following documents, in either printed or electronic format, in each case satisfactory in form and substance to the Underwriter: (1) The City Resolutions and the City Documents, together with a certificate dated as of the Closing Date of the City Clerk to the effect that each City Resolution is a true, correct and complete copy of the one duly adopted by the City Council; (2) The Official Statement; (3) An unqualified approving opinion of Bond Counsel, dated the Closing Date and addressed to the City, in the form attached to the Preliminary Official Statement as Appendix C, and an unqualified letter of such counsel, dated the Closing Date and addressed to the Underwriter and U.S. Bank, to the effect that such approving opinion may be relied upon by the Underwriter and U.S. Bank to the same extent as if such opinion were addressed to them; (4) A supplemental opinion of Bond Counsel, dated the Closing Date and addressed to the City and the Underwriter, to the effect that (i) the other City Documents have been 11 duly authorized, executed and delivered by the City, and, assuming such agreements constitute valid and binding obligations of the respective other parties thereto, constitute the legally valid and binding agreements of the City enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditor's rights or remedies and by general principles of equity (regardless of whether such enforceability is considered in equity or at law); (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended; (iii) the information contained in the Preliminary Official Statement and the Official Statement on the cover and under the captions "INTRODUCTION," "THE FINANCING PLAN," "THE BONDS," "SECURITY FOR THE BONDS," "CONCLUDING INFORMATION — Tax Matters," "CONCLUDING INFORMATION —Continuing Disclosure," and Appendices C and H thereof (except that no opinion or belief need be expressed as to any financial or statistical data contained in the Preliminary Official Statement and the Official Statement), insofar as it purports to summarize or replicate certain provisions of the Act, the Bonds, the City Continuing Disclosure Certificate, the Escrow Agreement and the Fiscal Agent Agreement and the exclusion from gross income for federal income tax purposes and exemption from State of California personal income taxes of interest on the Bonds present a fair and accurate summary of such provisions; (iv) the District has been validly formed, and the Reassessments have been duly and validly authorized in accordance with the provisions of the Act and, except as the same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or other laws relating to or affecting generally the enforcement of creditors' rights, by equitable principles and by the exercise of judicial discretion in appropriate cases, a lien to secure payment of the Reassessments has been imposed on all the parcels in the District specified in the Preliminary Official Statement and the Official Statement, (v) the City has obtained all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which constitute a condition precedent to the levy of the Reassessments, the issuance of the Bonds or the performance by the City of its obligations thereunder or under the Fiscal Agent Agreement, except that no opinion need be expressed regarding compliance with blue sky or other securities laws or regulations, whatsoever; and (vi) the Prior Bonds have been legally defeased in accordance with the indenture or fiscal agent agreement pursuant to which the Prior Bonds were issued, and (except as described in the Preliminary Official Statement and the Official Statement) the owners of the Prior Bonds have ceased to be entitled to the pledge of assessments, and all covenants, agreements and other obligations of the City to the owners of the Prior Bonds under the indenture or fiscal agent agreement pursuant to which the Prior Bonds were issued have ceased, terminated and become void and have been discharged and satisfied; (5) An opinion, dated the Closing Date and addressed to the City and the Underwriter, of Best Best & Krieger, disclosure counsel for the City ("Disclosure Counsel"), to the effect that without having undertaken to determine independently the accuracy or completeness of the statements contained in the Preliminary Official Statement and the Official Statement, but on the basis of their participation in conferences with representatives of the City, Bond Counsel, counsel to the Underwriter and others, and their examination of certain documents, nothing has come to their attention which has led them to believe that the either the Preliminary Official Statement as of its date or the Official Statement as of its date and as of the Closing Date contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial or statistical data contained in the Preliminary Official Statement or the Official Statement); 12 (6) An opinion, dated the Closing Date and addressed to the Underwriter, of Stradling Yocca Carlson & Rauth, a Professional Corporation, counsel to the Underwriter, in form and substance reasonably satisfactory to the Underwriter; (7) A certificate, dated the Closing Date and signed by an authorized officer of the City, ratifying the use and distribution by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offering and sale of the Bonds; and certifying that (i) the representations and warranties of the City contained in Section 4 hereof are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) to the best of his or her knowledge, no event has occurred since the date of the Official Statement affecting the matters contained therein which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make the statements and information contained in the Official Statement not misleading in any material respect, and the Bonds, the City Resolutions and the City Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement; (iii) the City has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the City Resolutions and the City Documents at or prior to the Closing Date; and (iv) the representations and warranties of the City contained in this Purchase Agreement are true and correct in all material respects on and as of the Closing Date, with the same effect as if made on the Closing Date; (8) An opinion, dated the Closing Date and addressed to the Underwriter and the City, of Best Best & Krieger LLP, the City Attorney, to the effect that (i) to their current actual knowledge and except as disclosed in the Official Statement, there is no litigation, action, suit, proceeding or investigation at law or in equity as to which the City is or would be a party, before or by any court, governmental agency or body, pending and notice of which has been served on and received by the City or, to the best of his knowledge, threatened against the City, which would materially adversely affect the ability of the City to perform its obligations under the City Resolutions or the City Documents, the issuance, sale and delivery of the Bonds or exclusion from gross income for federal income tax purposes or State of California personal income taxes of interest on the Bonds, or the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the collection or application of the Reassessments to pay the principal of and interest on the Bonds, or which in any way contests or affects the validity or enforceability of the Bonds, the City Resolutions or the City Documents or the accuracy of the Official Statement, or any action of the City contemplated by any of said documents; (ii) the City is a charter city and municipal corporation of the State, duly organized and validly existing pursuant to the Constitution and laws of the State, and the City has full legal right, power and authority to issue the Bonds and to perform all of its obligations under the City Resolutions and the City Documents; (iv) the City Council duly and validly adopted the City Resolutions at meetings of the City Council which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the City Resolutions are now in full force and effect and have not been amended; and (v) to their current actual knowledge, the City is not in breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order, or under any indenture, fiscal agent agreement, loan agreement, note, resolution, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the performance by the City of its obligations under the City Resolutions or the City Documents, and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or 13 administrative decree or order, or a material breach of or default under any loan agreement, note, resolution, trust agreement, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound; (9) An opinion of counsel to U.S. Bank, dated the date of the Closing, addressed to the City and the Underwriter, to the effect that: (A) U.S. Bank is a national banking association duly organized and validly existing under the laws of the jurisdiction of its organization and has the corporate power to execute and deliver the Fiscal Agent Agreement and the Escrow Agreement, and any other documentation relating to the Fiscal Agent Agreement and the Escrow Agreement, and to perform its obligations under the Fiscal Agent Agreement and the Escrow Agreement; (B) the execution and delivery by U.S. Bank of the Fiscal Agent Agreement and the Escrow Agreement and any other documentation relating to the Fiscal Agent Agreement and the Escrow Agreement, and its performance of its obligations under the Fiscal Agent Agreement and the Escrow Agreement, have been and are as of the date hereof duly authorized by all necessary corporate action; (C) no approval, authorization or other action by, or filing with, any governmental body or regulatory authority (which has not been obtained) is required in connection with the due execution, delivery and performance by U.S. Bank of the Fiscal Agent Agreement and the Escrow Agreement; (D) the Fiscal Agent Agreement and the Escrow Agreement have been duly executed and delivered by U.S. Bank and constitute the valid and legally binding obligations of U.S. Bank enforceable against it in accordance with their terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought as a proceeding in equity or at law); and (E) the Bonds have been duly authenticated by the Fiscal Agent; (10) A certificate of Willdan Financial Services, as reassessment engineer (the "Reassessment Engineer"), dated the date of the Closing, addressed to the City and the Underwriter, to the effect that (i) based upon the information provided to such firm as the Reassessment Engineer to the City in the course of its participation in the preparation of the Official Statement and without having undertaken to determine independently the accuracy or completeness of the statements contained in the Official Statement relating to information not furnished by it, said firm has no reason to believe that the Official Statement as of the date of the Official Statement omitted, or as of the date of Closing omits, to state any material fact required to be stated therein or necessary to make the statements therein relating to the District, in light of the circumstances under which they were made, not misleading, and (ii) data provided by such firm and presented in the Official Statement, are true, correct and accurate; (11) A certificate of the City dated the Closing Date, in a form acceptable to Bond Counsel, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended; (12) A certificate of U.S. Bank, dated the Closing Date, addressed to the City and the Underwriter to the following effect: (i) U.S. Bank is duly organized and existing as a national banking association in good standing under the laws of the United States, having the full power and authority to accept and perform its duties under the Fiscal Agent Agreement and the Escrow Agreement; (ii) the Fiscal Agent Agreement and the Escrow Agreement have been duly authorized, executed and delivered by U.S. Bank and constitute the legal, valid and binding obligations of U.S. Bank enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors rights, or by the application of equitable principles if equitable remedies are sought; (iii) U.S. Bank is duly authorized to accept the 14 obligations created by the Fiscal Agent Agreement and the Escrow Agreement, and to authenticate the Bonds pursuant to the terms of the Fiscal Agent Agreement; and (iv) no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over U.S. Bank that has not been obtained is or will be required for the authentication of the Bonds or the consummation by U.S. Bank of the other transactions contemplated to be performed by U.S. Bank in connection with the authentication of the Bonds and the acceptance and performance of the obligations created by the Fiscal Agent Agreement and the Escrow Agreement; (13) Evidence that the federal tax information Form 8038-G has been prepared for filing; (14) A verification report, dated the Closing Date, from , certified public accountants, to the effect that amounts on deposit under the Escrow Agreement will be sufficient to pay the principal of and interest on the Prior Bonds that are due and payable on September 2, 2021 and to pay, on said date, the applicable redemption prices of the Prior Bonds that mature subsequent thereto; (15) Evidence that notice of the defeasance of the Prior Bonds and termination of disclosure obligations relating to the Prior Bonds has been prepared for filing with the EMMA system of the MSRB; (16) Certificates from each of MC, MacLeod, UHC, Ponderosa, GID Monterey, GID Palm Springs and Lennar, dated the Closing Date, in form and substance acceptable to the Underwriter, to the effect that the certifications and representations made in their respective certificates delivered pursuant to Section 1(d) hereof are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, except that all references therein to the Preliminary Official Statement shall be deemed to be references to the final Official Statement; (17) A Continuing Disclosure Certificate, dated the Closing Date, duly executed by MC and MacLeod, in substantially the form attached as Appendix I to the Preliminary Official Statement and the Official Statement; (18) A certificate of Stephen G. White, MAI (the "Appraiser"), dated the Closing Date, in form and substance acceptable to the Underwriter, to the effect that it has prepared the appraisal report (the "Appraisal") with respect to certain property located within the District and that (a) the Appraisal, set forth in Appendix E to the Official Statement, may be included in the Preliminary Official Statement and the Official Statement, (b) the assumptions made in the Appraisal are reasonable; (c) neither the Appraisal in Appendix E nor the information in the Official Statement referring to the Appraisal contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and (d) no events or occurrences have been ascertained by it or have come to its attention that would materially change the opinion set forth in the Appraisal; (19) A certificate of Empire Economics, Inc. (the "Market Absorption Consultant"), dated the Closing Date, in form and substance acceptable to the Underwriter, to the effect that it has prepared the market absorption study with respect to certain property within the District (the "Market Absorption Study") and that (a) the Market Absorption Study, set forth in Appendix G to the Official Statement, may be included in the Preliminary Official Statement and the Official Statement, (b) the assumptions made in the Market Absorption Study are reasonable; (c) 15 neither the Market Absorption Study in Appendix G nor the information in the Official Statement referring to the Market Absorption Study contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and (d) no events or occurrences have been ascertained by it or have come to its attention that would materially change the opinion set forth in the Market Absorption Study; and (20) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the statements and information contained in the Preliminary Official Statement and the Official Statement, of the City's representations and warranties contained herein and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City in connection with the transactions contemplated hereby and by the Official Statement. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriter nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Underwriter set forth in Section 7 and Section 8 hereof shall continue in full force and effect. 6. Conditions of the City's Obligations. The City's obligations hereunder are subject to the Underwriter's performance of its obligations hereunder, and are also subject to the following conditions: (a) As of the Closing Date, no litigation shall be pending or, to the knowledge of the duly authorized officer of the City executing the certificate referred to in Section 5(d)(7) hereof, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds, the City Resolutions, the City Documents or the existence or powers of the City; and (b) As of the Closing Date, the City shall receive the approving opinion of Bond Counsel referred to in Section 5(d)(3) hereof, dated as of the Closing Date. 7. Expenses. Whether or not the Bonds are delivered to the Underwriter as set forth herein: (a) The Underwriter shall be under no obligation to pay, and the City shall pay or cause to be paid (out of any legally available funds of the City) all expenses incident to the performance of the City's obligations hereunder, including, but not limited to, the cost of printing, engraving and delivering the Bonds to DTC, the cost of preparation, printing, distribution and delivery of the Fiscal Agent Agreement, the Preliminary Official Statement, the Official Statement and all other agreements and documents contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the Underwriter (excluding the fees and disbursements of the Underwriter's counsel); the reasonable cost of confirming that the City has timely filed materially complete disclosure reports in conformance with the City's continuing disclosure undertakings pursuant to Rule 15c2-12 in each of the last five fiscal years; and the fees and disbursements of U.S. Bank as fiscal agent and escrow agent 16 for the Bonds and the refunding of the Prior Bonds, Bond Counsel, Disclosure Counsel, the Reassessment Engineer, the Market Absorption Consultant, the Appraiser and any accountants, engineers or any other experts or consultants the City has retained in connection with the Bonds; and for expenses (included in the expense component of the Underwriter's discount) incurred by the Underwriter on behalf of the City's employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, lodging, and entertainment of those employees; and (b) The City shall be under no obligation to pay, and the Underwriter shall pay, any fees of the California Debt and Investment Advisory Commission, the cost of obtaining CUSIP numbers, the cost of preparation of any "blue sky" or legal investment memoranda and this Purchase Agreement; expenses to qualify the Bonds for sale under any "blue sky" or other state securities laws; and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enumerated in paragraph (a) of this section), including the fees and disbursements of its counsel and any advertising expenses. 8. Notices. Any notice or other communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the City at City of Palm Desert, 73510 Fred Waring Drive, Palm Desert, California 92260, Attention: City Manager; and any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, California 94104, Attention: Vince Lazalde. 9. Parties in Interest. This Purchase Agreement is made solely for the benefit of the City and the Underwriter (including their successors or assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. 10. Survival of Representations and Warranties. The representations and warranties of the City set forth in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the City and regardless of delivery of and payment for the Bonds. 11. Effective. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance. 12. No Prior Agreements. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds for the City. 13. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California applicable to contracts made and performed in California. 17 14. Counterparts. This Purchase Agreement may be executed simultaneously in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. Very truly yours, STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Managing Director ACCEPTED: CITY OF PALM DESERT By: City Manager p.m. S-1 EXHIBIT A MATURITY SCHEDULE CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-2) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 Hold the Maturity Date Principal Interest 10% Test Offering (September 2) Amount Rate Yield Price Used Price Used C Yield calculated to the optional redemption date of September 2, 20_ at T Term Bonds. PURCHASE PRICE The purchase price of the Bonds shall be $ , which is the principal amount thereof ($ 1 [plus/less] [net] original issue [premium/discount] of $ and less Underwriter's discount of $ A-1 REDEMPTION Mandatory Sinking Fund Redemption. The Term Bonds are subject to redemption in part by lot from sinking fund payments made by the City, at a redemption price equal to the principal amount thereof to be redeemed with accrued interest thereon to the redemption date, without premium, in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; provided, however, if some but not all of the Term Bonds of a maturity have been redeemed pursuant to provisions of the Fiscal Agent Agreement governing optional redemption or mandatory redemption from Reassessment prepayments, described below, each future sinking fund payment with respect to such Term Bonds will be reduced on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, so that the total amount of sinking fund payments with respect to such Term Bonds to be made subsequent to any such redemption shall be reduced by an amount equal to the principal amount of the Term Bonds so redeemed, all as shall be designated pursuant to written notice filed by the City with the Fiscal Agent: Bonds Maturing on September 2, 20 Redemption Date (September 2) (maturity) Principal Amount to be Redeemed Bonds Maturing on September 2, 20 Redemption Date (September 2) (maturity) Principal Amount to be Redeemed Optional Redemption. The Bonds are subject to optional redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, at the option of the City from moneys derived by the City from any source, at the following redemption prices expressed as percentages of the principal amount of the Bonds to be redeemed, together with accrued interest to the date of redemption: Redemption Dates Redemption Prices Prior to September 2, 2028 103% September 2, 2028 and March 2, 2029 102 September 2, 2029 and March 2, 2030 101 September 2, 2030 and thereafter 100 A-2 Mandatory Redemption from Prepayment of Reassessments. The Bonds are subject to redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, from the prepayment of Reassessments or surplus amounts in the Reserve Fund as provided for in the Fiscal Agent Agreement, at the following redemption prices expressed as percentages of the principal amount of the Bonds to be redeemed, together with accrued interest to the date of redemption: Redemption Dates Redemption Prices Prior to September 2, 2026 103% September 2, 2026 and March 2, 2027 102 September 2, 2027 and March 2, 2028 101 September 2, 2028 and thereafter 100 A-3 EXHIBIT B FORM OF ISSUE PRICE CERTIFICATE $ CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-2) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated ("Stifel") hereby certifies as set forth below with respect to the sale and issuance of the above -captioned bonds (the "Bonds"). 1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A. 2. [Initial Offering Price of the Hold -the -Offering -Price Maturities. (a) Stifel offered the Hold -the -Offering -Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the "Initial Offering Prices") on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (b) As set forth in the Bond Purchase Agreement, dated , 2021, by and between Stifel and the Issuer, Stifel has agreed in writing that, (i) for each Maturity of the Hold -the - Offering -Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the "hold -the -offering -price rule"), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker -dealer who is a party to the retail distribution agreement, to comply with the hold -the -offering -price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold -the -Offering -Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.] 3. Defined Terms. (a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the "General Rule Maturities." (b) [Hold -the -Offering -Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the "Hold -the -Offering -Price Maturities." (c) Holding Period means, with respect to a Hold -the -Offering -Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date ( , 2021), or (ii) the date on which Stifel has sold at least 10% of such Hold- B-1 the -Offering -Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold -the -Offering -Price Maturity.] (d) Issuer means the City of Palm Desert. (e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) [Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is , 2021. (h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).] The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in a Certificate as to Arbitrage and Tax Compliance Procedures for the Bonds and with respect to compliance with the federal income tax rules affecting the Bonds, and by Richards, Watson & Gershon, A Professional Corporation in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. Dated: , 2021 STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Name: By: Name: B-2 SCHEDULE A SALE PRICES OF THE GENERAL RULE MATURITIES [AND INITIAL OFFERING PRICES OF THE HOLD -THE -OFFERING -PRICE MATURITIES] (Attached) B-3 SCHEDULE B PRICING WIRE OR EQUIVALENT COMMUNICATION (Attached) B-4 EXHIBIT C $ CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-2) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 CERTIFICATE OF MC PROPERTIES, LLC In connection with the issuance and sale of the above -captioned bonds (the "Bonds") by the City of Palm Desert (the "City"), MC Properties, LLC, a California limited liability company (the "Landowner"), hereby certifies, represents, warrants and covenants to the City and Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), as underwriter of the Bonds, that: 1. The Landowner is duly organized and validly existing under the laws of the State of California, is qualified to transact business in the State of California and has all requisite limited liability company right, power and authority to: (i) execute and deliver this Certificate; and (ii) develop the Property (as defined below) as described in the Preliminary Official Statement, dated , 2021, with respect to the Bonds (the "Preliminary Official Statement"). 2. As set forth in the Preliminary Official Statement, certain property within the District is held in the name of the Landowner (herein, the "Property"). The undersigned, on behalf of the Landowner, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Landowner is the party responsible for the development of the Property. 3. The Landowner has, or will have prior to the Closing, duly authorized the execution and delivery at the Closing of the Continuing Disclosure Certificate to be executed and delivered by the Landowner and the performance by the Landowner of its obligations thereunder. Except as described in the Preliminary Official Statement, the Landowner and its parent and affiliates have not failed to comply in all material respects with any previous undertakings with regard to Rule 15c2-12 of the Securities and Exchange Commission to provide annual reports, semi-annual reports or notices of listed events in the last five years. 4. Except as disclosed in the Preliminary Official Statement, (a) the Landowner and its affiliates are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond or note (collectively, the "Material Agreements") to which the Landowner or its affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Landowner's ability to complete the development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default. 5. Except as described in the Preliminary Official Statement, there is no material indebtedness of the Landowner or its affiliates that is secured by an interest in the Property. Neither the Landowner nor, any of its affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Landowner's ability to complete the C-1 development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property. 6. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Landowner (with proper service of process or proper notice to the Landowner having been accomplished) or, to the knowledge of the undersigned, is pending against any current affiliate (with proper service of process to such affiliate having been accomplished) or to the knowledge of the undersigned is threatened in writing against the Landowner or any such affiliate which if successful, is reasonably likely to materially and adversely affect the Landowner's ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Reassessments or ad valorem tax obligations on its Property when due. 7. The information under the captions "UNDEVELOPED PROPERTY OWNERSHIP — Ownership of Property in the District MC Properties, LLC (18.37%) and MacLeod -Couch Land Company LLC (7.85% of the Assessments)" in the Preliminary Official Statement, to the extent provided by the Landowner, does not, as of the date hereof, contain any untrue statement of a material fact, and does not, as of the date hereof, omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 8. For the period through 25 days after the "end of the underwriting period" as defined in the Bond Purchase Agreement, dated , 2021 by and between the City and the Underwriter, if any event relating to or affecting the Landowner, ownership of the Property, the Landowner's development plan, the Landowner's financing plan, the Landowner's lenders, if any, and contractual arrangements of the Landowner shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Landowner shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 9. Except as disclosed in the Preliminary Official Statement, the Landowner is not aware that any other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized or any assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 10. Neither the Landowner nor any affiliate has been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by the Landowner or any current affiliate during the period of its ownership included within the boundaries of a community facilities district or an assessment district within California that (a) would have caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the Landowner or any such affiliate. C-2 11. The Landowner is able to pay its bills as they become due and no legal proceedings are pending against the Landowner (with proper service of process to the Landowner having been accomplished) or, to the knowledge of the undersigned, threatened in writing in which the Landowner may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation. Unless otherwise indicated, capitalized terms used herein and not defined have the meaning given to them in the Bond Purchase Agreement. Dated: , 2021 MC PROPERTIES, LLC, a California limited liability company By: Authorized Officer C-3 EXHIBIT D $ CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-2) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 CERTIFICATE OF MACLEOD-COUCH LAND COMPANY, LLC In connection with the issuance and sale of the above -captioned bonds (the "Bonds") by the City of Palm Desert (the "City"), MacLeod -Couch Land Company LLC, a California limited liability company (the "Landowner"), hereby certifies, represents, warrants and covenants to the City and Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), as underwriter of the Bonds, that: 1. The Landowner is duly organized and validly existing under the laws of the State of California, is qualified to transact business in the State of California and has all requisite limited liability company right, power and authority to: (i) execute and deliver this Certificate; and (ii) develop the Property (as defined below) as described in the Preliminary Official Statement, dated , 2021, with respect to the Bonds (the "Preliminary Official Statement"). 2. As set forth in the Preliminary Official Statement, certain property within the District is held in the name of the Landowner (herein, the "Property"). The undersigned, on behalf of the Landowner, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Landowner is the party responsible for the development of the Property. 3. The Landowner has, or will have prior to the Closing, duly authorized the execution and delivery at the Closing of the Continuing Disclosure Certificate to be executed and delivered by the Landowner and the performance by the Landowner of its obligations thereunder. Except as described in the Preliminary Official Statement, the Landowner and its parent and affiliates have not failed to comply in all material respects with any previous undertakings with regard to Rule 15c2-12 of the Securities and Exchange Commission to provide annual reports, semi-annual reports or notices of listed events in the last five years. 4. Except as disclosed in the Preliminary Official Statement, (a) the Landowner and its affiliates are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond or note (collectively, the "Material Agreements") to which the Landowner or its affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Landowner's ability to complete the development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default. 5. Except as described in the Preliminary Official Statement, there is no material indebtedness of the Landowner or its affiliates that is secured by an interest in the Property. Neither the Landowner nor, any of its affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Landowner's ability to complete the D-1 development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property. 6. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Landowner (with proper service of process or proper notice to the Landowner having been accomplished) or, to the knowledge of the undersigned, is pending against any current affiliate (with proper service of process to such affiliate having been accomplished) or to the knowledge of the undersigned is threatened in writing against the Landowner or any such affiliate which if successful, is reasonably likely to materially and adversely affect the Landowner's ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Reassessments or ad valorem tax obligations on its Property when due. 7. The information under the captions "UNDEVELOPED PROPERTY OWNERSHIP — Ownership of Property in the District MC Properties, LLC (18.37%) and MacLeod -Couch Land Company LLC (7.85% of the Assessments)" in the Preliminary Official Statement, to the extent provided by the Landowner, does not, as of the date hereof, contain any untrue statement of a material fact, and does not, as of the date hereof, omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 8. For the period through 25 days after the "end of the underwriting period" as defined in the Bond Purchase Agreement, dated , 2021 by and between the City and the Underwriter, if any event relating to or affecting the Landowner, ownership of the Property, the Landowner's development plan, the Landowner's financing plan, the Landowner's lenders, if any, and contractual arrangements of the Landowner shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Landowner shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 9. Except as disclosed in the Preliminary Official Statement, the Landowner is not aware that any other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized or any assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 10. Neither the Landowner nor any affiliate has been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by the Landowner or any current affiliate during the period of its ownership included within the boundaries of a community facilities district or an assessment district within California that (a) would have caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the Landowner or any such affiliate. D-2 11. The Landowner is able to pay its bills as they become due and no legal proceedings are pending against the Landowner (with proper service of process to the Landowner having been accomplished) or, to the knowledge of the undersigned, threatened in writing in which the Landowner may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation. Unless otherwise indicated, capitalized terms used herein and not defined have the meaning given to them in the Bond Purchase Agreement. Dated: , 2021 MACLEOD-COUCH LAND COMPANY LLC, a California limited liability company By: Authorized Officer D-3 EXHIBIT E $ CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-2) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 CERTIFICATE OF UHC 00357 PALM DESERT, L.P. In connection with the issuance and sale of the above -captioned bonds (the "Bonds") by the City of Palm Desert (the "City"), UHC 00357 Palm Desert, L.P., a California limited partnership (the "Landower"), hereby certifies, represents, warrants and covenants to the City and Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), as underwriter of the Bonds, that: 1. The Landowner is duly organized and validly existing under the laws of the State of California, is qualified to transact business in the State of California and has all requisite limited liability company right, power and authority to: (i) execute and deliver this Certificate; and (ii) develop the Property (as defined below) as described in the Preliminary Official Statement, dated , 2021, with respect to the Bonds (the "Preliminary Official Statement"). 2. As set forth in the Preliminary Official Statement, certain property within the District is held in the name of the Landowner (herein, the "Property"). The undersigned, on behalf of the Landowner, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Landowner is the party responsible for the development of the Property. 3. Except as disclosed in the Preliminary Official Statement, (a) the Landowner and its affiliates are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond or note (collectively, the "Material Agreements") to which the Landowner or its affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Landowner's ability to complete the development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default. 4. Except as described in the Preliminary Official Statement, there is no material indebtedness of the Landowner or its affiliates that is secured by an interest in the Property. Neither the Landowner nor, any of its affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Landowner's ability to complete the development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property. 5. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Landowner (with proper service of process or proper notice to the Landowner having been accomplished) or, to the knowledge of the undersigned, is pending against any current affiliate (with proper service of process to such affiliate having been accomplished) or to E-1 the knowledge of the undersigned is threatened in writing against the Landowner or any such affiliate which if successful, is reasonably likely to materially and adversely affect the Landowner's ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Reassessments or ad valorem tax obligations on its Property when due. 6. The information under the captions "UNDEVELOPED PROPERTY OWNERSHIP — Ownership of Property in the District—UHC 00357 Palm Desert, L.P. (9.15% of the Assessments)" in the Preliminary Official Statement, to the extent provided by the Landowner, does not, as of the date hereof, contain any untrue statement of a material fact, and does not, as of the date hereof, omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 7. For the period through 25 days after the "end of the underwriting period" as defined in the Bond Purchase Agreement, dated , 2021 by and between the City and the Underwriter, if any event relating to or affecting the Landowner, ownership of the Property, the Landowner's development plan, the Landowner's financing plan, the Landowner's lenders, if any, and contractual arrangements of the Landowner shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Landowner shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 8. Except as disclosed in the Preliminary Official Statement, the Landowner is not aware that any other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized or any assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 9. Neither the Landowner nor any affiliate has been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by the Landowner or any current affiliate during the period of its ownership included within the boundaries of a community facilities district or an assessment district within California that (a) would have caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the Landowner or any such affiliate. 10. The Landowner is able to pay its bills as they become due and no legal proceedings are pending against the Landowner (with proper service of process to the Landowner having been accomplished) or, to the knowledge of the undersigned, threatened in writing in which the Landowner may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation. Unless otherwise indicated, capitalized terms used herein and not defined have the meaning given to them in the Bond Purchase Agreement. E-2 Dated: , 2021 UHC 00357 PALM DESERT, L.P., a California limited partnership By: Authorized Officer EXHIBIT F $ CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-2) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 CERTIFICATE OF PONDEROSA HOMES II, INC. In connection with the issuance and sale of the above -captioned bonds (the "Bonds") by the City of Palm Desert (the "City"), Ponderosa Homes, Inc., a California corporation (the "Landower"), hereby certifies, represents, warrants and covenants to the City and Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), as underwriter of the Bonds, that: 1. The Landowner is duly organized and validly existing under the laws of the State of California, is qualified to transact business in the State of California and has all requisite limited liability company right, power and authority to: (i) execute and deliver this Certificate; and (ii) develop the Property (as defined below) as described in the Preliminary Official Statement, dated , 2021, with respect to the Bonds (the "Preliminary Official Statement"). 2. As set forth in the Preliminary Official Statement, certain property within the District is held in the name of the Landowner (herein, the "Property"). The undersigned, on behalf of the Landowner, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Landowner is the party responsible for the development of the Property. 3. Except as disclosed in the Preliminary Official Statement, (a) the Landowner and its affiliates are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond or note (collectively, the "Material Agreements") to which the Landowner or its affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Landowner's ability to complete the development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default. 4. Except as described in the Preliminary Official Statement, there is no material indebtedness of the Landowner or its affiliates that is secured by an interest in the Property. Neither the Landowner nor, any of its affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Landowner's ability to complete the development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property. 5. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Landowner (with proper service of process or proper notice to the Landowner having been accomplished) or, to the knowledge of the undersigned, is pending against any current affiliate (with proper service of process to such affiliate having been accomplished) or to F- 1 the knowledge of the undersigned is threatened in writing against the Landowner or any such affiliate which if successful, is reasonably likely to materially and adversely affect the Landowner's ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Reassessments or ad valorem tax obligations on its Property when due. 6. The information under the captions "UNDEVELOPED PROPERTY OWNERSHIP — Ownership of Property in the District— Ponderosa Homes II, Inc. (12.43% of the Assessments)" in the Preliminary Official Statement, to the extent provided by the Landowner, does not, as of the date hereof, contain any untrue statement of a material fact, and does not, as of the date hereof, omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 7. For the period through 25 days after the "end of the underwriting period" as defined in the Bond Purchase Agreement, dated , 2021 by and between the City and the Underwriter, if any event relating to or affecting the Landowner, ownership of the Property, the Landowner's development plan, the Landowner's financing plan, the Landowner's lenders, if any, and contractual arrangements of the Landowner shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Landowner shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 8. Except as disclosed in the Preliminary Official Statement, the Landowner is not aware that any other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized or any assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 9. Neither the Landowner nor any affiliate has been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by the Landowner or any current affiliate during the period of its ownership included within the boundaries of a community facilities district or an assessment district within California that (a) would have caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the Landowner or any such affiliate. 10. The Landowner is able to pay its bills as they become due and no legal proceedings are pending against the Landowner (with proper service of process to the Landowner having been accomplished) or, to the knowledge of the undersigned, threatened in writing in which the Landowner may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation. Unless otherwise indicated, capitalized terms used herein and not defined have the meaning given to them in the Bond Purchase Agreement. F-2 Dated: , 2021 PONDEROSA HOMES II, INC., a California corporation By: Authorized Officer EXHIBIT G $ CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-2) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 CERTIFICATE OF GID MONTEREY, LLC In connection with the issuance and sale of the above -captioned bonds (the "Bonds") by the City of Palm Desert (the "City"), GID Monterey, LLC, a Delaware limited liability company (the "Landower"), hereby certifies, represents, warrants and covenants to the City and Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), as underwriter of the Bonds, that: 1. The Landowner is duly organized and validly existing under the laws of the State of Delaware, is qualified to transact business in the State of California and has all requisite limited liability company right, power and authority to: (i) execute and deliver this Certificate; and (ii) develop the Property (as defined below) as described in the Preliminary Official Statement, dated , 2021, with respect to the Bonds (the "Preliminary Official Statement"). 2. As set forth in the Preliminary Official Statement, certain property within the District is held in the name of the Landowner (herein, the "Property"). The undersigned, on behalf of the Landowner, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Landowner is the party responsible for the development of the Property. 3. The Landowner has, or will have prior to the Closing, duly authorized the execution and delivery at the Closing of the Continuing Disclosure Certificate to be executed and delivered by the Landowner and the performance by the Landowner of its obligations thereunder. Except as described in the Preliminary Official Statement, the Landowner and its parent and affiliates have not failed to comply in all material respects with any previous undertakings with regard to Rule 15c2-12 of the Securities and Exchange Commission to provide annual reports, semi-annual reports or notices of listed events in the last five years. 4. Except as disclosed in the Preliminary Official Statement, (a) the Landowner and its affiliates are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond or note (collectively, the "Material Agreements") to which the Landowner or its affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Landowner's ability to complete the development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default. 5. Except as described in the Preliminary Official Statement, there is no material indebtedness of the Landowner or its affiliates that is secured by an interest in the Property. Neither the Landowner nor, any of its affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Landowner's ability to complete the G-1 development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property. 6. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Landowner (with proper service of process or proper notice to the Landowner having been accomplished) or, to the knowledge of the undersigned, is pending against any current affiliate (with proper service of process to such affiliate having been accomplished) or to the knowledge of the undersigned is threatened in writing against the Landowner or any such affiliate which if successful, is reasonably likely to materially and adversely affect the Landowner's ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Reassessments or ad valorem tax obligations on its Property when due. 7. The information under the captions "UNDEVELOPED PROPERTY OWNERSHIP — Ownership of Property in the District—GID Monterey, LLC (8.79% of the Assessments)" in the Preliminary Official Statement, to the extent provided by the Landowner, does not, as of the date hereof, contain any untrue statement of a material fact, and does not, as of the date hereof, omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 8. For the period through 25 days after the "end of the underwriting period" as defined in the Bond Purchase Agreement, dated , 2021 by and between the City and the Underwriter, if any event relating to or affecting the Landowner, ownership of the Property, the Landowner's development plan, the Landowner's financing plan, the Landowner's lenders, if any, and contractual arrangements of the Landowner shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Landowner shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 9. Except as disclosed in the Preliminary Official Statement, the Landowner is not aware that any other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized or any assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 10. Neither the Landowner nor any affiliate has been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by the Landowner or any current affiliate during the period of its ownership included within the boundaries of a community facilities district or an assessment district within California that (a) would have caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the Landowner or any such affiliate. 11. The Landowner is able to pay its bills as they become due and no legal proceedings are pending against the Landowner (with proper service of process to the Landowner having been G-2 accomplished) or, to the knowledge of the undersigned, threatened in writing in which the Landowner may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation. Unless otherwise indicated, capitalized terms used herein and not defined have the meaning given to them in the Bond Purchase Agreement. Dated: , 2021 GID MONTEREY, LLC, a Delaware limited liability company By: Authorized Officer G-3 EXHIBIT H $ CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-2) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 CERTIFICATE OF GID PALM DESERT, LLC In connection with the issuance and sale of the above -captioned bonds (the "Bonds") by the City of Palm Desert (the "City"), GID Palm Desert, LLC, a Delaware limited liability company (the "Landower"), hereby certifies, represents, warrants and covenants to the City and Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), as underwriter of the Bonds, that: 1. The Landowner is duly organized and validly existing under the laws of the State of Delaware, is qualified to transact business in the State of California and has all requisite limited liability company right, power and authority to: (i) execute and deliver this Certificate; and (ii) develop the Property (as defined below) as described in the Preliminary Official Statement, dated , 2021, with respect to the Bonds (the "Preliminary Official Statement"). 2. As set forth in the Preliminary Official Statement, certain property within the District is held in the name of the Landowner (herein, the "Property"). The undersigned, on behalf of the Landowner, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Landowner is the party responsible for the development of the Property. 3. The Landowner has, or will have prior to the Closing, duly authorized the execution and delivery at the Closing of the Continuing Disclosure Certificate to be executed and delivered by the Landowner and the performance by the Landowner of its obligations thereunder. Except as described in the Preliminary Official Statement, the Landowner and its parent and affiliates have not failed to comply in all material respects with any previous undertakings with regard to Rule 15c2-12 of the Securities and Exchange Commission to provide annual reports, semi-annual reports or notices of listed events in the last five years. 4. Except as disclosed in the Preliminary Official Statement, (a) the Landowner and its affiliates are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond or note (collectively, the "Material Agreements") to which the Landowner or its affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Landowner's ability to complete the development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default. 5. Except as described in the Preliminary Official Statement, there is no material indebtedness of the Landowner or its affiliates that is secured by an interest in the Property. Neither the Landowner nor, any of its affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Landowner's ability to complete the H-1 development of the Property as proposed in the Preliminary Official Statement or to pay the Reassessments when due with respect to the Property. 6. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Landowner (with proper service of process or proper notice to the Landowner having been accomplished) or, to the knowledge of the undersigned, is pending against any current affiliate (with proper service of process to such affiliate having been accomplished) or to the knowledge of the undersigned is threatened in writing against the Landowner or any such affiliate which if successful, is reasonably likely to materially and adversely affect the Landowner's ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Reassessments or ad valorem tax obligations on its Property when due. 7. The information under the captions "UNDEVELOPED PROPERTY OWNERSHIP — Ownership of Property in the District—GID Palm Desert, LLC (12.46% of the Assessments)" in the Preliminary Official, to the extent provided by the Landowner, does not, as of the date hereof, contain any untrue statement of a material fact, and does not, as of the date hereof, omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 8. For the period through 25 days after the "end of the underwriting period" as defined in the Bond Purchase Agreement, dated , 2021 by and between the City and the Underwriter, if any event relating to or affecting the Landowner, ownership of the Property, the Landowner's development plan, the Landowner's financing plan, the Landowner's lenders, if any, and contractual arrangements of the Landowner shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Landowner shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 9. Except as disclosed in the Preliminary Official Statement, the Landowner is not aware that any other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized or any assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 10. Neither the Landowner nor any affiliate has been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by the Landowner or any current affiliate during the period of its ownership included within the boundaries of a community facilities district or an assessment district within California that (a) would have caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the Landowner or any such affiliate. 11. The Landowner is able to pay its bills as they become due and no legal proceedings are pending against the Landowner (with proper service of process to the Landowner having been H-2 accomplished) or, to the knowledge of the undersigned, threatened in writing in which the Landowner may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation. Unless otherwise indicated, capitalized terms used herein and not defined have the meaning given to them in the Bond Purchase Agreement. Dated: , 2021 GID PALM DESERT, LLC, a Delaware limited liability company By: Authorized Officer H-3 EXHIBIT I CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-2) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2021 CERTIFICATE OF LENNAR HOMES OF CALIFORNIA, INC. Dated May, 2021 In connection with the issuance and sale of the above -captioned bonds (the "Bonds") by the City of Palm Desert (the "City"), Lennar Homes of California, Inc., a California corporation (the "Landower"), hereby certifies, represents, warrants and covenants to the City and Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), as underwriter of the Bonds, that: 1. The Landowner is duly organized and validly existing under the laws of the State of California and has all requisite corporate right, power and authority to: (i) execute and deliver this Certificate of Lennar Homes of California, Inc. (the "Certificate"); and (ii) develop the Property (as defined below) as described in the Preliminary Official Statement, dated , 2021, with respect to the Bonds (the "Preliminary Official Statement"). 2. As set forth in the Preliminary Official Statement, certain property within the District is held in the name of the Landowner (herein, the "Property"). The undersigned, on behalf of the Landowner, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Landowner is the party responsible for the development of the Property. 3. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned' (a) the Landowner and its Affiliates2 are not in breach of or in default under any ' "Actual Knowledge of the Undersigned" means, as of the date of signing, the knowledge that the individual signing on behalf of the Landowner currently has or has obtained through (i) interviews with such current officers and responsible employees of the Landowner and its Affiliates as the undersigned has determined are reasonably likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Certificate, and/or (ii) review of documents that were reasonably available to the undersigned and which the undersigned has reasonably deemed necessary for the undersigned to sign this Certificate. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Landowner's current business and operations. The individual signing this Certificate has not contacted any individuals who are no longer employed by or associated with the Landowner or its Affiliates. The Landowner further notes that Lennar Corporation completed a merger with CalAtlantic Group, Inc., a Delaware corporation ("CalAtlantic"), in February, 2018, pursuant to which CalAtlantic merged with and into Lennar Corporation, a Delaware corporation ("Lennar Corporation"), with Lennar Corporation being the surviving entity. Separate and apart from Lennar Corporation's due diligence efforts for purposes of completing the acquisition of CalAtlantic, for purposes of this Certificate, individuals who were employees and officers of CalAtlantic and its subsidiaries prior to the merger have not been consulted or contacted and documents entered into by CalAtlantic and its subsidiaries or related to their properties and projects have not been reviewed. 2 "Affiliate" means, with respect to the Landowner, any other Person (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by, or under common control with the Landowner, and (ii) for whom information, including financial information or operating data, concerning such Person is material to I-1 applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond or note (collectively, the "Material Agreements") to which the Landowner or its Affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Landowner's ability to develop the Property as proposed in the Preliminary Official Statement or to pay the Reassessments prior to delinquency with respect to the Property and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default. 4. Except as described in the Preliminary Official Statement, there is no material indebtedness of the Landowner or its Affiliates that is secured by an interest in the Property. To the Actual Knowledge of the Undersigned, neither the Landowner nor, any of its Affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Landowner's ability to develop the Property as proposed in the Preliminary Official Statement or to pay the Reassessments prior to delinquency with respect to the Property. 5. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Landowner (with proper service of process to the Landowner having been accomplished) or, to the Actual Knowledge of the Undersigned, is pending against any current Affiliate (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against the Landowner or any such Affiliate which if successful, is reasonably likely to materially and adversely affect the Landowner's ability to develop the Property as described in the Preliminary Official Statement or to pay the Reassessments or ad valorem tax obligations on its Property prior to delinquency. 6. As of the date of the Preliminary Official Statement, the information contained therein solely with respect to the Landowner, its Affiliates, and the Property as set forth under the caption "UNDEVELOPED PROPERTY OWNERSHIP —Ownership of Property in the District—Lennar Homes of California, Inc. (6.23% of the Assessment)" (but in all cases under all captions excluding information which is identified as having been provided by a source other than the Landowner), is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 7. For the period through 25 days after the "end of the underwriting period" as defined in the Bond Purchase Agreement, dated , 2021 by and between the City and the Underwriter to mean the Closing Date, if any event relating to or affecting the Landowner, its Affiliates, and the Property shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the Official Statement in order to make the statements in the potential investors in their evaluation of the District and investment decision regarding the Bonds (i.e., information regarding such Person's assets or funds that would materially affect the Landowner's ability to develop the Property as described in the Preliminary Official Statement or to pay the Reassessments on the portion of the Property then owned by the Landowner (to the extent the responsibility of the Landowner) prior to delinquency). "Person" means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. For purposes hereof, the term "control" (including the terms "controlling," "controlled by" or "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. For purposes hereof, the term Affiliate shall exclude CalAtlantic and its direct and indirect subsidiaries. I-2 Official Statement not misleading in the light of the circumstances under which they were made, the Landowner shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the information described in the section of the Official Statement referenced in Paragraph 6 in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 8. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, there is no other public debt secured by a tax or assessment on the Property that exists or is in the process of being authorized or any assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 9. The Landowner has been developing or has been involved in the development of numerous projects over an extended period of time. It is likely that the Landowner has been delinquent at one time or another in the payment of ad valorem property taxes, special assessments, or special taxes. However, to the Actual Knowledge of the Undersigned, neither the Landowner nor any current Affiliate has been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by the Landowner or any current Affiliate during the period of its ownership included within the boundaries of a community facilities district or an assessment district within California that (a) would have caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the Landowner or any such Affiliate in a court of law. 10. To the Actual Knowledge of the Undersigned, the Landowner is able to pay its bills as they become due and no legal proceedings are pending against the Landowner (with proper service of process to the Landowner having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened in writing in which the Landowner may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation. Unless otherwise indicated, capitalized terms used herein and not defined have the meaning given to them in the Bond Purchase Agreement. The undersigned has executed this Certificate solely in his capacity as an authorized officer or representative of the Landowner and he will have no personal liability arising from or relating to this Certificate. Any liability arising from or relating to this Certificate may only be asserted against the Landowner. Lennar Homes of California, Inc., A California corporation By: Name: Title: I-3 ESCROW AGREEMENT by and between CITY OF PALM DESERT and U.S. BANK NATIONAL ASSOCIATION as Escrow Agent Dated as of July 1, 2021 Pertaining to the Defeasance and Redemption of City of Palm Desert Section 29 Assessment District (No. 2004-02) Limited Obligation Improvement Bonds, Series 2007 RWG DRAFT 5/20/2021 TABLE OF CONTENTS Page Section 1. Definitions 2 Section 2. Purpose of Agreement; Escrow Agent's Acceptance of Duties; Incorporation of Prior Bonds Fiscal Agent Agreement 3 Section 3. Escrow Fund 3 Section 4. Deposits to Escrow Fund 3 Section 5. Maintenance of Escrow Fund 4 Section 6. Reinvestment; Payment of Refunding Requirement 4 Section 7. Verification 5 Section 8. Compliance with Prior Bonds Fiscal Agent Agreement 5 Section 9. Tax Covenant 5 Section 10. Notices 6 Section 11. Discharge of Prior Bonds Fiscal Agent Agreement Concurrently with the Defeasance of Prior Bonds 6 Section 12. Nature of Lien 6 Section 13. Amendments 6 Section 14. Compensation of Escrow Agent 7 Section 15. Resignation or Removal of Escrow Agent; Appointment of Successor 7 Section 16. Limitation of Powers and Duties 9 Section 17. Indemnification 9 Section 18. Limitation of Liability 9 Section 19. Termination 10 Section 20. Governing Law 10 Section 21. Severability 10 Section 22. Successors Deemed Included in All References to Predecessor 10 Section 23. Counterparts 10 SCHEDULE A SCHEDULE B EXHIBIT A REFUNDING REQUIREMENT ESCROW SECURITIES FORM OF NOTICE OF DEFEASANCE, FULL OPTIONAL REDEMPTION AND TERMINATION OF CONTINUING DISCLOSURE REPORTING OBLIGATIONS -i- ESCROW AGREEMENT This Escrow Agreement (this "Agreement), is made and entered into as of July 1, 2021, by and between the City of Palm Desert, a municipal corporation duly formed and existing pursuant to the laws of the State of California (the "City") and U.S. Bank National Association, a national banking association duly organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, California, as Escrow Agent (the "Escrow Agent") and Prior Bonds Fiscal Agent as hereinafter defined. RECITALS: WHEREAS, the City has heretofore formed its Section 29 Assessment District (No. 2004- 02) and issued its Section 29 Assessment District (No. 2004-02), Limited Obligation Improvement Bonds, Series 2007, of which $19,830,000 in aggregate principal amount remain outstanding (the "Prior Bonds"); and WHEREAS, the Prior Bonds were issued pursuant to a Prior Bonds Fiscal Agent Agreement, dated as of March 1, 2007 (the "Prior Bonds Fiscal Agent Agreement"), by and between the City and Wells Fargo Bank, National Association, as succeeded by U.S. Bank National Association, as successor fiscal agent (the "Prior Bonds Fiscal Agent"); and WHEREAS, the City plans to issue $ aggregate principal amount of City of Palm Desert, Section 29 Assessment District (No. 2004-02), Limited Obligation Refunding Improvement Bonds, Series 2021 (the "Series 2021 Bonds") pursuant to a Fiscal Agent Agreement, dated as of July 1, 2021 (the "Series 2021 Fiscal Agent Agreement"), by and between the City and U.S. Bank National Association, as fiscal agent thereunder, and the Refunding Act of 1984 for 1915 Improvement Act Bonds (the "1984 Refunding Act"), as set forth in Division 11.5 (commencing with Section 9500) of the California Streets and Highway Code; and WHEREAS, proceeds of the Series 2021 Bonds will be used to the refund all of the Prior Bonds; and WHEREAS, in accordance with the Prior Bonds Fiscal Agent Agreement, if the City shall deposit, or caused to be deposited, with the Escrow Agent, as fiscal agent thereunder, in trust, moneys or noncallable Federal Securities which, when added to other funds on hand with respect to the Prior Bonds, shall be sufficient pay to the Owners (as defined in the Prior Bonds Fiscal Agent Agreement) of Prior Bonds, the principal and interest, and premium, if any, to become due on the Prior Bonds, then the Prior Bonds shall be deemed discharged and the pledge of the Assessment Revenues (as defined in the Prior Bonds Fiscal Agent Agreement) thereupon will cease and terminate; and WHEREAS, pursuant to the Series 2021 Fiscal Agent Agreement, a portion of the proceeds derived from the sale of the Series 2021 Bonds will be deposited in escrow with the Escrow Agent to effect the refunding of the Prior Bonds; and WHEREAS, in order to provide for the proper and timely application of the moneys deposited in said escrow to the payment of the Prior Bonds, it is necessary to enter into this Escrow Agreement; -1- NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows: Section 1. Definitions. Unless the context clearly requires otherwise, capitalized terms used in this Agreement shall have the meanings ascribed to them in the introductory paragraph and the Recitals hereof. In addition, as used herein, the following terms shall have the following meanings: "Bond Counsel" means Richards, Watson & Gershon, A Professional Corporation, or such other attorney or firm of attorneys of nationally recognized experience in the issuance of obligations the interest on which is excludable from gross income for federal income tax purposes under the Code selected by the City. "Business Day" means any day other than (i) a Saturday or Sunday or legal holiday or a day on which banking institutions in the city in which the corporate trust office of the Escrow Agent is located are authorized to close, or (ii) a day on which the New York Stock Exchange is closed. "City" means the City of Palm Desert, a general law city and municipal corporation duly formed pursuant to the laws of the State of California. "Closing Date" means July _, 2021, the date on which the Series 2021 Bonds and are being issued. "Code" means the Internal Revenue Code of 1986 as amended, together with regulations promulgated, and official public guidance published, thereunder. "Escrow Agent" means U.S. Bank National Association, in its capacity as the successor fiscal agent for the Prior Bonds under the Prior Bonds Fiscal Agent Agreement and as escrow agent under this Agreement, and its successors and assigns. "Escrow Fund" means the "Escrow Fund" established and held by the Escrow Agent pursuant to Section 3. "Escrow Securities" means the Federal Securities set forth in Schedule B attached hereto. "Federal Securities" means non -callable direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or obligations, the payment of principal of and interest on which is unconditionally guaranteed by the United States of America. "Prior Bonds" means all of the remaining outstanding City of Palm Desert Section 29 Assessment District (No. 2004-02), Limited Obligation Improvement Bonds, Series 2007. "Prior Bonds Fiscal Agent" means U.S. Bank National Association, as successor fiscal agent under the Prior Bonds Fiscal Agent Agreement. -2- "Prior Bonds Fiscal Agent Agreement" means the Fiscal Agent Agreement, dated as of March 1, 2007, by and between the City and the Prior Bonds Fiscal Agent, pursuant to which the Prior Bonds were issued. "Redemption Date" means September 2, 2021. "Refunding Requirement" means an amount sufficient to pay the principal, interest, and the redemption premium (if any) with respect to the Prior Bonds on the Redemption Date, all as set forth in Schedule A attached hereto. "Series 2021 Fiscal Agent" means U.S. Bank National Association, as fiscal agent under the Series 2021 Fiscal Agent Agreement. "Series 2021 Fiscal Agent Agreement" means the Fiscal Agent Agreement, dated as of July 1, 2021, by and between the City and the Series 2021 Fiscal Agent, pursuant to which the Series 2021 Bonds are to be issued. "Series 2021 Bonds" means, the $ initial aggregate principal amount City of Palm Desert, Section 29 Assessment District (No. 2004-02), Limited Obligation Refunding Improvement Bonds, Series 2021. Section 2. Purpose of Agreement; Escrow Agent's Acceptance of Duties; Incorporation of Prior Bonds Fiscal Agent Agreement. The City and the Escrow Agent are entering into this Agreement for the benefit of the Owners of the Prior Bonds to provide for the refunding of all of the remaining outstanding Prior Bonds in the manner contemplated in Sections 2.12 and 9.03 of the Prior Bonds Fiscal Agent Agreement. The Escrow Agent hereby accepts its duties and obligations expressly provided in this Agreement and agrees that the irrevocable instructions to the Escrow Agent contained herein are in a form satisfactory to it. The applicable and necessary provisions of the Prior Bonds Fiscal Agent Agreement, including particularly the defeasance and redemption provisions thereof, are incorporated herein by reference. Reference herein to, or citation herein of, any provisions of the Prior Bonds Fiscal Agent Agreement shall be deemed to incorporate the same as a part hereof in the same manner and with the same effect as if the same were fully set forth herein. In addition to the foregoing, the Escrow Agent hereby further acknowledges receipt of a true and correct copy of the Series 2021 Fiscal Agent Agreement. Section 3. Escrow Fund. There is created and established with the Escrow Agent a special and irrevocable trust fund designated the "Section 29 Assessment District (No. 2004-02) Bonds Escrow Fund" (the "Escrow Fund") to be held by the Escrow Agent separate and apart from all other funds of the City or the Escrow Agent and used only for the purposes and in the manner provided in this Agreement. Section 4. Deposits to Escrow Fund. On the Closing Date, the City shall cause to be deposited with the Escrow Agent in the Escrow Fund, to be held in irrevocable trust by the Escrow Agent and to be applied solely as provided in this Escrow Agreement, (i) $ representing a portion of the proceeds of the Series 2021 Bonds and (ii) $ of excess moneys from the funds and accounts under the Prior Bonds Fiscal Agent Agreement, which the City hereby instructs the Prior Bonds Fiscal Agent to deliver to the Escrow Agent., as follows: (a) $ from the Reserve Fund established under the Prior Bonds Fiscal Agent -3- Agreement, and (b) $ from the Redemption Fund established under the Prior Bonds Fiscal Agent Agreement, and (c) $ from the Assessment Fund established under the Prior Bonds Fiscal Agent Agreement. The sum of the deposits and transfers pursuant to this Section is $ , and such amount is equal to the Refunding Requirement as certified in the report provided by Robert Thomas CPA, LLC, referenced in Section 7 of this Agreement. Section 5. Maintenance of Escrow Fund. The Escrow Agent, upon receipt of the moneys described in Section 4, shall immediately invest $ of such moneys in the Escrow Securities described in Schedule B and deposit such Escrow Securities in the Escrow Fund, and deposit the remaining $ in the Escrow Fund to hold uninvested. The Escrow Agent is hereby authorized and empowered to deposit uninvested monies held hereunder from time to time in demand deposit accounts, without payment of interest thereon as provided hereunder, established at commercial banks that are corporate affiliates of the Escrow Agent. Notwithstanding the foregoing or any other provision of this Agreement to the contrary, at the written request of the City and upon compliance with the conditions hereinafter set forth, the Escrow Agent shall have the power to sell, transfer, request the redemption of or otherwise dispose of some or all of the Escrow Securities in the Escrow Fund and to substitute Federal Securities. The foregoing may be effected only if: (a) the substitution of Federal Securities for the substituted Escrow Securities occurs simultaneously; (b) the amounts of and dates on which the anticipated transfers from the Escrow Fund for the payment of the principal or interest with respect to the Prior Bonds will not be diminished or postponed thereby, as shown in the verification report (described below) of an independent certified public accountant; (c) the Escrow Agent shall receive the unqualified opinion of counsel, addressed to the Escrow Agent, to the effect that the City has the right and power to effect such disposition and substitution; and (d) the Escrow Agent shall receive from an independent certified public accountant a verification report, addressed to the City, the Escrow Agent, and Bond Counsel, certifying that, immediately after such transaction, the principal of and interest on the Federal Securities in the Escrow Fund will, together with other moneys available for such purpose, be sufficient to pay the Refunding Requirement. Any cash received from the disposition and substitution of Escrow Securities pursuant to this Section to the extent that, as shown in such certification, such cash will not be required, in accordance with the Prior Bonds Fiscal Agent Agreement and this Agreement, at any time for the payment when due as provided in Section 6, shall be applied as set forth in Section 19 of this Agreement. The Escrow Agent shall furnish the City periodic cash transaction statements which include detail for all investment transactions effected by the Escrow Agent or brokers selected by the City. Section 6. Reinvestment; Payment of Refunding Requirement. (a) As the principal of the Escrow Securities shall mature and be paid, and the investment income and earnings thereon are paid, the Escrow Agent shall reinvest such moneys in Federal Securities in accordance with the written instructions of the City; provided, in connection with any such reinvestment, the City shall provide to the Escrow Agent a verification report of an independent certified public accountant, addressed to the City, the Escrow Agent, and Bond Counsel, certifying that, immediately after such reinvestment, the principal of and interest on the Federal Securities in the Escrow Fund will, together with other moneys available for such purpose, be sufficient to pay the Refunding Requirement. -4- (b) On the Redemption Date, the Escrow Agent shall disburse from the Escrow Fund to the Prior Bonds Fiscal Agent an amount sufficient to pay the Refunding Requirement, and the Prior Bonds Fiscal Agent shall apply such monies to redeem the Prior Bonds for the equal and ratable benefit of the Owners of the Prior Bonds. (c) Upon the City's election, such statements will be delivered via the Escrow Agent's online service and upon electing such service, paper statements will be provided only upon request. The City waives the right to receive brokerage confirmations of security transactions effected by the Escrow Agent as they occur, to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Escrow Agent will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker. Section 7. Verification. The City has caused schedules to be prepared relating to the sufficiency of the anticipated receipts from the Escrow Securities, together with other moneys deposited in the Escrow Fund, to pay the Refunding Requirement. The City shall furnish the Escrow Agent with the report of Robert Thomas CPA, LLC, Minneapolis, Minnesota, verifying the mathematical accuracy of the computations contained in such schedules. Section 8. Compliance with Prior Bonds Fiscal Agent Agreement. The City hereby directs and the Prior Bonds Fiscal Agent hereby agrees that it will take all the actions required to be taken by it under the Prior Bonds Fiscal Agent Agreement, including the timely transfer of moneys for the payment of principal, interest and redemption premium (if any) with respect to the Prior Bonds, in order to effectuate this Agreement. The liability of the Escrow Agent for the payment of the Refunding Requirement, pursuant to this Section shall be limited to the application, in accordance with this Agreement, of moneys and the Escrow Securities in the Escrow Fund (including interest earnings thereon, if any) available for the purposes of and in accordance with this Agreement. Section 9. Tax Covenant. Notwithstanding any other provision of this Agreement, the City hereby covenants that no part of the proceeds of the Series 2021 Bonds or of the moneys, funds, or securities held by the Escrow Agent hereunder shall be used, and that the City shall not direct the Escrow Agent to use any of such moneys or funds at any time, directly or indirectly, in a manner that would cause any of the Series 2021 Bonds to be an "arbitrage bond" under Section 148 of the Code and regulations of the Treasury Department thereunder proposed or in effect at the time of such use and applicable to obligations issued on the date of issuance of such Series 2021 Bonds. Neither of the City nor the Escrow Agent shall sell, transfer or otherwise dispose of the Escrow Securities or otherwise transfer or dispose of moneys or securities held in the Escrow Fund except as set forth in this Agreement; provided that the Escrow Agent may effectuate the transfer of such securities or moneys to a successor escrow agent in accordance with the provisions of Section 15 relating to the transfer of rights and property to successor escrow agents. Section 10. Notices. As soon as practicable upon the Escrow Agent's receipt of moneys for deposit in the Escrow Fund pursuant to Section 4 (but in no event later than (i) 30 days before the Redemption Date set forth in Schedule A, or (ii) ten (10) Business Days after the Closing Date), the Escrow Agent shall send a notice of defeasance and redemption, substantially in form set forth in Appendix A, to the Owners (as defined in the Prior Bonds Fiscal Agent Agreement) of the Prior -5- Bonds at their addresses appearing on the registration books maintained with respect to the Prior Bonds and The Depository Trust Company, and to be filed on the Electronic Municipal Market Access System ("EMMA"), a facility of the Municipal Securities Rulemaking Board (the "MSRB"), in an electronic format accompanied by identifying information as prescribed by the MSRB, in accordance with Section 2.03(e) of the Prior Bonds Fiscal Agent Agreement. Section 11. Discharge of Prior Bonds Fiscal Agent Agreement Concurrently with the Defeasance of Prior Bonds. The City hereby gives notice, pursuant to Section 2.03(d) of the Prior Bonds Fiscal Agent Agreement, that by entering into this Agreement, it is electing to defease and redeem all of the remaining outstanding Prior Bonds, notwithstanding that such Prior Bonds shall not have been surrendered for payment. Concurrently with the initial deposit of the monies and the Escrow Securities in the Escrow Fund pursuant to Sections 4 and 5 hereof, the Prior Bonds shall no longer deemed to be outstanding within the meaning and with the effect expressed in the Prior Bonds Fiscal Agent Agreement, the Prior Bonds Fiscal Agent Agreement will be discharged and terminated with respect to the Prior Bonds pursuant to Section 9.03 of the Prior Bonds Fiscal Agent Agreement, and the pledge of the "Assessment Revenues" and other funds provided for such Bonds under the Prior Bonds Fiscal Agent Agreement shall cease and terminate. Section 12. Nature of Lien. The trust hereby created shall be irrevocable. The Owners of the Prior Bonds shall have an express lien on all of the moneys and Escrow Securities in the Escrow Fund, including the interest earnings thereon, until paid out, used and applied in accordance with this Agreement. Section 13. Amendments. This Agreement is made pursuant to and in furtherance of the Prior Bonds Fiscal Agent Agreement and the Series 2021 Fiscal Agent Agreement and for the benefit of the City and the Owners from time to time of the Prior Bonds and it shall not be repealed, revoked, altered, amended or supplemented without the written consent of all such Owners and the written consent of the Escrow Agent and the City; provided, however, that the City and the Escrow Agent may, without the consent of, or notice to, such Owners, enter into such agreement or agreements supplemental to this Agreement as shall not materially adversely affect the rights of such Owners and as shall not be inconsistent with the terms and provisions of this Agreement, for any one or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Agreement; (b) to grant to, or confer upon, the Escrow Agent for the benefit of the Owners of the Prior Bonds, any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such Owners or the Escrow Agent; (c) to transfer to the Escrow Agent and make subject to this Agreement additional funds, securities or properties; (d) to conform the Agreement to the provisions of any law or regulations governing the tax-exempt status of the Prior Bonds and the Series 2021 Bonds in order to maintain their tax-exempt status; and (e) to make any other change determined by the City to be not materially adverse to the Owners of the Prior Bonds. -6- The Escrow Agent shall be entitled to rely exclusively upon an opinion of Bond Counsel with respect to compliance with this Section, including the extent, if any, to which any change, modification or addition affects the rights of the Owners of the Prior Bonds, or that any instrument executed hereunder complies with the conditions and provisions of this Section. Section 14. Compensation of Escrow Agent. In consideration of the services rendered by the Escrow Agent under this Agreement, the City agrees to and shall pay to the Escrow Agent its proper fees and expenses in accordance with the letter agreement therefor reached by the Escrow Agent and the City, including all reasonable expenses, charges, counsel fees and other disbursements incurred by it or by its attorneys, agents and employees in and about the performance of their powers and duties hereunder, from any moneys of the City lawfully available therefor and the Escrow Agent shall have no lien whatsoever upon any of the moneys or Escrow Securities in the Escrow Fund for the payment of such proper fees and expenses. Section 15. Resignation or Removal of Escrow Agent; Appointment of Successor. Notwithstanding anything to the contrary in Article VII of the Prior Bonds Fiscal Agent Agreement, the Escrow Agent agrees to abide by this Section 14 with respect to its duties under this Agreement. The Escrow Agent at the time acting hereunder may at any time resign and be discharged from the trusts hereby created by giving not less than 30 days' written notice to the City specifying the date when such resignation will take effect, but no such resignation shall take effect unless a successor Escrow Agent shall have been appointed by the Owners of the Prior Bonds or by the City as hereinafter provided and such successor Escrow Agent shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance of a successor Escrow Agent. The Escrow Agent may be removed at any time by an instrument or concurrent instruments in writing, delivered to the Escrow Agent and the City and signed by the registered Owners of a majority in principal amount of the Prior Bonds. The Escrow Agent may also be removed at any time by the City with not less than 30 days' prior written notice to the Escrow Agent, the Prior Bonds Fiscal Agent (if different from the Escrow Agent), and the registered Owners of the Prior Bonds. In the event the Escrow Agent hereunder shall resign or be removed, or be dissolved, or shall be in the course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case the Escrow Agent shall be taken under the control of any public officer or officers, or of a receiver appointed by a court, a successor Escrow Agent may be appointed by the Owners of a majority in principal amount of the Prior Bonds, by an instrument or concurrent instruments in writing, signed by such Owners, or by their attorneys in fact, duly authorized in writing; provided, nevertheless, that in any such event, the City shall appoint a temporary Escrow Agent to fill such vacancy until a successor Escrow Agent shall be appointed by the Owners of a majority in principal amount of the Prior Bonds, and any such temporary Escrow Agent so appointed by the City shall immediately and without further act be superseded by the Escrow Agent so appointed by such Owners. In the event that no appointment of a successor Escrow Agent or a temporary successor Escrow Agent shall have been made by such Owners or the City pursuant to the foregoing provisions of this Section within 30 days after written notice of the removal or resignation of the -7- Escrow Agent has been given to the City, the Owner of any of the Prior Bonds or any retiring Escrow Agent may apply to any court of competent jurisdiction for the appointment of a successor Escrow Agent, and such court may thereupon, after such notice, if any, as it shall deem proper, appoint a successor Escrow Agent. No successor Escrow Agent shall be appointed unless such successor Escrow Agent shall be a corporation with trust powers organized under the banking laws of the United States or any state, and shall have at the time of appointment capital and surplus of not less than $100,000,000. Every successor Escrow Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the City, an instrument in writing accepting such appointment hereunder and thereupon such successor Escrow Agent without any further act, deed or conveyance, shall become fully vested with all the rights, immunities, powers, trusts, duties and obligations of its predecessor; but such predecessor shall, nevertheless, on the written request of such successor Escrow Agent or the City execute and deliver an instrument transferring to such successor Escrow Agent all the estates, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Escrow Agent shall deliver all securities and moneys held by it to its successor. Should any transfer, assignment or instrument in writing from the City be required by any successor Escrow Agent for more fully and certainly vesting in such successor Escrow Agent the estates, rights, powers and duties hereby vested or intended to be vested in the predecessor Escrow Agent, any such transfer, assignment and instrument in writing shall, on request, be executed, acknowledged and delivered by the City. Any entity into which the Escrow Agent, or any successor to it in the trusts created by this Agreement, may be merged or converted or with which it or any successor to it may be consolidated, or any entity resulting from any merger, conversion, consolidation or tax free reorganization to which the Escrow Agent or any successor to it shall be a party, shall, if it meets the qualifications set forth in the fifth paragraph of this Section and if it is otherwise satisfactory to the City, be the successor Escrow Agent under this Agreement without the execution or filing of any paper or any other act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 16. Limitation of Powers and Duties. The Escrow Agent shall have no power or duty to invest any funds held under this Agreement except as provided in Sections 5 and 6 hereof. The Escrow Agent shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder except as provided in this Agreement. Section 17. Indemnification. To the extent permitted by law, the City hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Agent and its respective successors, assigns, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Agent at any time (whether or not also indemnified against the same by the City or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Agreement, the establishment hereunder of the Escrow Fund, the -8- acceptance of the moneys and securities deposited therein, the purchase of any securities to be purchased pursuant thereto, the retention of such securities or the proceeds thereof and any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Agreement; provided, however, that the City shall not be required to indemnify the Escrow Agent against the Escrow Agent's own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Agent's employees. In no event shall the City or the Escrow Agent be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Agreement and removal or resignation of the Escrow Agent. Section 18. Limitation of Liability. The Escrow Agent and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund, the acceptance of the moneys or any securities deposited therein, the purchase of the securities to be purchased pursuant hereto, the retention of such securities or the proceeds thereof, the sufficiency of the securities or uninvested moneys held hereunder to accomplish the payment and redemption of the Prior Bonds, or any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Agreement or by reason of any non -negligent act, non -negligent omission or non -negligent error of the Escrow Agent made in good faith in the conduct of its duties. The Escrow Agent shall incur no liability for losses arising from any investment made in accordance with this Agreement. The recitals of fact contained in the Recitals of this Agreement shall be taken as the statements of the City and the Escrow Agent assumes no responsibility for the correctness thereof. The Escrow Agent makes no representation as to the sufficiency of any securities to be purchased pursuant hereto and any uninvested moneys to accomplish the payment and redemption of the Prior Bonds pursuant to the Prior Bonds Fiscal Agent Agreement or to the validity of this Agreement as to the City and, except as otherwise provided herein, the Escrow Agent shall incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the performance of its duties under this Agreement except for its own negligence or willful misconduct and the duties and obligations of the Escrow Agent shall be determined by the express provisions of this Agreement. Anything in this Agreement notwithstanding, the Escrow Agent shall not be liable for any consequential (i.e., special or indirect) losses or damages in performing its duties or in exercising its rights or power pursuant to this Agreement. The Escrow Agent may consult with counsel, who may or may not be counsel to the City. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Agreement, such matter (except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of nationally recognized bond counsel) may be deemed to be conclusively established by a written certification of the City. Whenever the Escrow Agent shall deem it necessary or desirable that a matter specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of nationally recognized bond counsel be proved or established prior to taking, suffering, or omitting any such action, such matter may be established only by such a certificate or such an opinion. No provision of this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties in accordance with this Agreement, or in the exercise of its rights or powers. -9- Section 19. Termination. This Agreement shall terminate when moneys have been withdrawn from the Escrow Fund in a sufficient amount to satisfy the Refunding Requirement and applied to redeem and pay all Prior Bonds in accordance with Section 6 of this Agreement. Upon such termination, all moneys remaining in the Escrow Fund, if any, after payment of any amounts due to the Escrow Agent hereunder, shall be transferred to the Redemption Fund established and held under the 2021 Fiscal Agent Agreement to pay debt service on the Series 2021 Bonds. Section 20. Governing Law. This Agreement shall be governed by the laws of the State of California. Section 21. Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the City or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. Section 22. Successors Deemed Included in All References to Predecessor. All the covenants, promises and agreements in this Agreement contained by or on behalf of the City or the Escrow Agent shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. Section 23. Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. [Remainder of Page Intentionally Left Blank] -10- IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers and appointed or elected officials as of the date first written above. CITY OF PALM DESERT By Mayor U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent and Prior Bonds Fiscal Agent By Authorized Officer -11- REFUNDING REQUIREMENT "Prior Bonds" SCHEDULE A City of Palm Desert Section 29 Assessment District (No. 2004-02), Limited Obligation Improvement Bonds, Series 2007 Redemption Date Principal* Interest September 2, 2021 $19,830,000.00 $ Redemption Premium $0.00 Refunding Requirement $ * Consists of the following Prior Bonds with mandatory sinking fund redemption price coming due payable, or to be optionally redeemed, on September 2, 2021, as applicable: Maturity Date (September 2) 2022 2027 2037 Principal $ 1,565,000 4,660,000 13,605,000 Interest Redemption Rate Price 4.750% 100% 5.050 100 5.100 100 Schedule A SCHEDULE B ESCROW SECURITIES Type of Maturity Par Security Date Amount Rate Yield Price [SLGS] //2021 $ % % % Purchase Cost of Cash Total Date Securities Deposit Escrow Cost Yield July , 2021 $ $ $ % Schedule B EXHIBIT A FORM OF NOTICE OF DEFEASANCE, FULL OPTIONAL REDEMPTION AND TERMINATION OF CONTINUING DISCLOSURE REPORTING OBLIGATIONS NOTICE OF DEFEASANCE, FULL OPTIONAL REDEMPTION AND TERMINATION OF CONTINUING DISCLOSURE REPORTING OBLIGATION City of Palm Desert Section 29 Assessment District (No. 2004-02) Limited Obligation Improvement Bonds, Series 2007 NOTICE IS HEREBY GIVEN to the owners of the above -captioned bonds, dated April 12, 2007 (the "Bonds"), of the City of Palm Desert (the "City") in accordance with that certain Fiscal Agent Agreement, dated as of March 1, 2007 (the "Fiscal Agent Agreement"), by and between the City and Wells Fargo Bank, National Association, as succeeded by U.S. Bank National Association, as successor fiscal agent (the "Fiscal Agent"), pursuant to which such Bonds were originally issued on April 12, 2007, that all of the outstanding Bonds, in the aggregate principal amount of $19,830,000, have been refunded and called for redemption on September 2, 2021 (the "Redemption Date"), subject to the provisions of the succeeding paragraphs of this notice, and pursuant to the provisions of the governing documents of the Bonds. The Bonds maturing or called for redemption have the maturity dates, principal amounts, and CUSIP numbers as set forth below: Maturity (September 2) 2022 2027 2037 Principal Amount $ 1,565,000 4,660,000 13,605,000 Interest Rate 4.750% 5.050 5.100 Redemption Price 100% 100 100 Bond No. R-12 R-13 R-14 CUSIP* 696618 HM2 696618 HS9 696618 JC2 Pursuant to the Fiscal Agent Agreement, on the Redemption Date, the principal and interest accrued to the Redemption Date on such Bonds, without redemption premium (the "Redemption Price"), shall become due and payable, and from and after the Redemption Date, interest on the Bonds shall cease to accrue and be payable. Pursuant to Section 9.03 of the Fiscal Agent Agreement, the lien of the above captioned Bonds issued pursuant to the Fiscal Agent Agreement has been discharged through the irrevocable deposit in escrow of cash and noncallable Federal Securities (as defined in the Fiscal Agent Agreement. Owners of the Bonds should surrender said Bonds on the Redemption Date at the following address: BY HAND OR MAIL U.S. Bank National Association Global Corporate Trust Services 111 Fillmore Ave. E St. Paul, MN 55107 For Bonds surrendered by mail, the use of registered or certified mail is suggested. IMPORTANT NOTICE: Federal law requires the Trustee to withhold taxes at the applicable rate from the payment if an IRS Form W-9 or applicable IRS Form W-8 is not provided. Please visit www.irs.zov or contact the Internal Revenue Service for additional information on the tax forms and instructions. Exhibit A NOTICE IS ADDITIONALLY GIVEN that, pursuant to Section 9.03 of the Fiscal Agent Agreement, the lien pursuant to such Fiscal Agent Agreement on the above -referenced Bonds has been discharged through the irrevocable deposit of cash and non -callable Federal Securities (as defined in the Fiscal Agent Agreement) in an Escrow Fund (the "Escrow Fund"). The Escrow Fund is established and held pursuant to the Escrow Agreement, dated as of July 1, 2021 (the "Escrow Agreement"), by and between the City and U.S. Bank National Association, as Fiscal Agent and Escrow Agent. As a result of such deposit in the Escrow Fund, the above -referenced Bonds are deemed to have been paid and defeased in accordance with the Fiscal Agent Agreement. Obligations of the City to the Owners of the above -referenced Bonds shall hereafter be limited to the application of moneys and securities in the Escrow Fund for the payment of outstanding principal on such bonds and the interest payment on such bonds due and payable on or before the Redemption Date. NOTICE IS HEREBY GIVEN, FURTHER, that such defeasance constitutes the legal defeasance of all of the remaining outstanding Bonds, and accordingly, pursuant to Section 5 of the Continuing Disclosure Agreement with respect to the Bonds (the "2007 Continuing Disclosure Agreement"), the obligations of the City and Willdan Financial Services, as successor dissemination agent, under the 2007 Continuing Disclosure Agreement have also terminated. * The CUSIP numbers are included solely for the convenience of the Owners of the Bonds. None of the City, the Fiscal Agent, nor the Escrow Agent shall be responsible for any error of any nature relating to such numbers. No representation is made as to the correctness of the CUSIP number either as printed on any Bond or as contained herein, and any error in the CUSIP number shall not affect the validity of the proceedings for redemption of the Bonds. DATED this th day of July, 2021 By: U.S. Bank National Association, as Fiscal Agent and Escrow Agent on behalf of the City of Palm Desert Exhibit A [This page has intentionally been left blank.] FISCAL AGENT AGREEMENT by and between CITY OF PALM DESERT and U.S. BANK NATIONAL ASSOCIATION, as Fiscal Agent Dated as of [July 1, 2021] Relating to $ City of Palm Desert Section 29 Assessment District (No. 2004-02) Limited Obligation Refunding Improvement Bonds Series 2021 RWG DRAFT 5/26/2021 ARTICLE I ARTICLE II ARTICLE III ARTICLE IV ARTICLE V TABLE OF CONTENTS Page AUTHORITY AND DEFINITIONS Section 1.1. Authority for this Agreement Section 1.2. Agreement for Benefit of Bondowners Section 1.3. Definitions THE BONDS Section 2.1. Principal Amount Section 2.2. Terms of Bonds Section 2.3. Redemption Section 2.4. Form of Bonds Section 2.5. Execution of Bonds Section 2.6. Transfer of Bonds Section 2.7. Exchange of Bonds Section 2.8. Bond Register Section 2.9. Temporary Bonds Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen Section 2.11. Special Obligation Section 2.12. Refunding Section 2.13. No Acceleration Section 2.14. Book Entry System Section 2.15. Representation Letter Section 2.16. Transfers Outside the Book -Entry System Section 2.17. Payments to Nominee Section 2.18. Initial Depository and Nominee ISSUANCE OF BONDS Section 3.1. Section 3.2. Section 3.3. Section 3.4. Issuance and Delivery of Bonds Application of Proceeds of Sale of Bonds Costs of Issuance Fund Reassessment Fund REASSESSMENT REVENUES Section 4.1. Pledge of Reassessment Revenues Section 4.2. Redemption Fund Section 4.3. Reserve Fund OTHER COVENANTS, REPRESENTATIONS AND DECLARATIONS OF THE CITY 24 Section 5.1. Punctual Payment 24 Section 5.2. Special Obligation 25 Section 5.3. Extension of Time for Payment 25 Section 5.4. Against Encumbrances 25 Section 5.5. Protection of Security and Rights of Owners 25 Section 5.6. Collection of Reassessment Revenues 25 Section 5.7. Further Assurances 25 Section 5.8. Tax Covenants 25 Section 5.9. Covenant to Foreclose 26 Section 5.10. Continuing Disclosure 26 2 2 2 2 11 11 11 12 15 15 16 16 16 16 17 17 17 17 17 18 19 19 19 19 19 19 20 20 22 22 22 23 i ARTICLE VI TABLE OF CONTENTS INVESTMENTS Section 6.1. Section 6.2. Section 6.3. Section 6.4. Page 27 Deposit and Investment of Moneys in Funds 27 Rebate Fund 28 Liability of City 28 Employment of Agents by the City 29 ARTICLE VII THE FISCAL AGENT Section 7.1. Appointment of Fiscal Agent Section 7.2. Liability of Fiscal Agent Section 7.3. Information Section 7.4. Reliance by Fiscal Agent Section 7.5. Compensation Section 7.6. Books and Accounts ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT Section 8.1. Amendments Permitted Section 8.2. Owners' Meetings Section 8.3. Procedure for Amendment with Written Consent of Owners Section 8.4. Disqualified Bonds Section 8.5. Effect of Supplemental Agreement Section 8.6. Endorsement of Replacement of Bonds Issued after Amendments Amendatory Endorsement of Bonds Consent of Fiscal Agent ARTICLE IX Section 8.7. Section 8.8. 29 29 30 31 31 32 32 32 32 33 33 34 34 34 35 35 MISCELLANEOUS 35 Section 9.1. Section 9.2. Section 9.3. Section 9.4. Section 9.5. Section 9.6. Section 9.7. Section 9.8. Section 9.9. Section 9.10. Section 9.11. Section 9.12. Section 9.13. Section 9.14. Benefits of Agreement Limited to Parties Successors Deemed Included References to Predecessor Discharge of Agreement Execution of Documents Ownership by Owners Waiver of Personal Liability Notices Severability Unclaimed Moneys Destruction of Cancelled Bonds Applicable Law Conflict with 1915 Act or 1984 Refunding Act Conclusive Evidence of Regularity Payment on Business Day Counterparts in All 35 35 35 and Proof of 36 36 37 37 37 38 38 38 38 38 38 EXHIBIT A —FORM OF BOND A-1 ii FISCAL AGENT AGREEMENT THIS FISCAL AGENT AGREEMENT (the "Agreement") is made and entered into as of [July 1, 2021], by and between the City of Palm Desert, California, a municipal corporation (the "City"), and U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, California, as fiscal agent (the "Fiscal Agent"). WITNESSETH: WHEREAS, the City has heretofore formed Section 29 Assessment District (No. 2004-02) (the "Assessment District") and issued its Section 29 Assessment District (No. 2004-02) Limited Obligation Improvement Bonds, Series 2007, of which $19,830,000 in aggregate principal amount remain outstanding (the "Prior Bonds"); and WHEREAS, the City Council of the City (the "City Council") has adopted its Resolution No. on [June 10, 2021], declaring its intention to issue bonds to refund the Prior Bonds and to levy reassessments within the Assessment District to secure such refunding bonds under and pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (the "1984 Refunding Act"), as set forth in Division 11.5 (commencing with Section 9500) of the California Streets and Highways Code; and WHEREAS, the City Council, by its Resolution No. , adopted on [June 10, 2021], has approved a reassessment report, entitled "City of Palm Desert Section 29 Reassessment District No. 2004-02 Reassessment Report, May 24, 2021" (the "Reassessment Report"), with respect to the Assessment District, and prepared by Willdan Financial Services in connection with the proposed refunding and reassessment pursuant to Section 9523 of the 1984 Refunding Act, made the findings required by Section 9525 of the 1984 Refunding Act, and confirmed and adopted the reassessment and reassessment diagram presented with the Reassessment Report; and WHEREAS, the aforementioned reassessment diagram and a notice of reassessment shall be duly recorded in the manner provided by law, and the reassessments and interest thereon shall be collected on the assessment roll for the County of Riverside in the same manner and subject to the same remedies on default and to the payment of interest and penalties on the enforcement thereof as the original assessments in the Assessment District; and WHEREAS, by its Resolution No. , adopted by the City Council on [June 10, 2021], the City Council has authorized and provided for the issuance and sale of its City of Palm Desert, Section 29 Assessment District (No. 2004-02), Limited Obligation Refunding Improvement Bonds, Series 2021 (the "Bonds"), pursuant to the 1984 Refunding Act; and WHEREAS, the City has determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the City, authenticated and delivered by the Fiscal Agent and duly issued, the valid, binding and legal limited obligations of the City, and to constitute this Fiscal Agent Agreement a valid and binding agreement for the uses and purposes herein set 1 forth in accordance with its terms, have been done and taken, and the execution and delivery of this Fiscal Agent Agreement have been in all respects duly authorized; NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: ARTICLE I AUTHORITY AND DEFINITIONS Section 1.1. Authority for this Agreement. This Agreement is entered into pursuant to the provisions of the 1984 Refunding Act and the Resolutions. Section 1.2. Agreement for Benefit of Bondowners. The provisions, covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal benefit, protection and security of the Owners of the Bonds. All of the Bonds, without regard to the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or permitted by this Agreement. The Fiscal Agent and its officers and employees may become the owner of any of the Bonds with the same rights it would have if it were not Fiscal Agent. Section 1.3. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.3 shall, for all purposes of this Agreement, of any Supplemental Agreement, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof. "1984 Refunding Act" means the Refunding Act of 1984 for 1915 Improvement Act Bonds, as set forth in Division 11.5 (commencing with Section 9500) of the California Streets and Highways Code. "1915 Act" means the Improvement Bond Act of 1915, as set forth in Division 10 (commencing with Section 8500) of the California Streets and Highways Code. "Agreement" means this Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement entered into pursuant to the provisions hereof. "Annual Debt Service" means, for each Bond Year, the sum of (a) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled, and (b) the principal amount of the Outstanding Bonds scheduled to be paid in such Bond Year. "Assessment District" means the City's Section 29 Assessment District (No. 2004-02). 2 "Authorized Officer" means any officer or employee of the City authorized by the City Council or by an Authorized Officer to undertake the action referenced in this Agreement as required to be undertaken by an Authorized Officer. "Bond Counsel" means the law firm of Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California, or another firm or attorney of favorable reputation in the field of municipal bond law. "Bond Year" means the period beginning on the Closing Date and ending on September 2, 2021 and thereafter the period beginning on each September 3 and ending on the following September 2. "Bonds" means the City of Palm Desert, Section 29 Assessment District (No. 2004-02) Limited Obligation Refunding Improvement Bonds, Series 2021, at any time Outstanding under this Agreement. "Business Day" " means any day of the year, other than (i) a Saturday or Sunday, or (ii) a day on which banks in New York, New York and Los Angeles, California, and San Francisco, California are required or authorized to remain closed and on which the New York Stock Exchange is closed. "City" means the City of Palm Desert. "City Council" means the City Council of the City. "Closing Date" means the date upon which there is an exchange of the Bonds for the proceeds representing payment of the purchase price of the Bonds by the Original Purchaser. "Code" means the Internal Revenue Code of 1986 as in effect on the date of original issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of original issuance of the Bonds, together with regulations promulgated, and official public guidance published, under the Code. "Continuing Disclosure Agreement" means that certain Continuing Disclosure Agreement dated as of July _, 2021, by and between the City and Willdan Financial Services, as dissemination agent, together with any amendments thereto. "Costs of Issuance" means all expenses incident to the calling, retiring or paying of the Prior Bonds and to the issuance of the Bonds including, but not limited to, any bond counsel, financial advisors, underwriters, certified public accountants, and rating agency fees, printing and advertising costs, filing and recording fees, City administrative expenses, and charges of the Escrow Agent under the Escrow Agreement, and the charges of the Fiscal Agent. "County" means Riverside County, California. "Debt Service" means the amount of interest and principal payable on the Bonds scheduled to be paid during the period of computation, excluding amounts payable during such period which 3 relate to principal of the Bonds which are scheduled to be retired and paid before the beginning of such period. "Depository" means The Depository Trust Company, New York, New York, and its successors and assigns as securities depository for the Bonds, or any other securities depository acting as Depository under Article II hereof "Escrow Agent" means U.S. Bank National Association, acting as escrow agent under the Escrow Agreement, or any successor thereto appointed under the Escrow Agreement. "Escrow Agreement" means the Escrow Agreement proposed to be entered into by and between the City and the Escrow Agent in connection with the refunding of the Prior Bonds. "Federal Securities" means any of the following which at the time of investment are determined by the City to be legal investments under the laws of the State of California for the moneys proposed to be invested therein: (i) Cash; and (ii) Direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or obligations, the payment of principal of and interest on which is unconditionally guaranteed by the United States of America. "Fiscal Agent" means U.S. Bank National Association, the Fiscal Agent appointed by the City, acting as an independent fiscal agent with the duties and powers herein provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 7.1 hereof "Fiscal Year" means the twelve-month period extending from July 1 in a calendar year to June 30 of the succeeding year, both dates inclusive, or any other twelve-month period selected by the City as its official fiscal year period. "Independent Financial Consultant" means a firm of certified public accountants, a financial consulting firm, a consulting engineering firm or an engineer which is not an employee of, or otherwise controlled by, the City. "Information Services" means the Electronic Municipal Market Access System (referred to as "EMMA"), a facility of the Municipal Securities Rulemaking Board, at www.emma.msrb.org; provided, however, in accordance with then current guidelines of the Securities and Exchange Commission, Information Services shall mean such other organizations providing information with respect to called bonds as the City may designate to the Fiscal Agent in writing. "Interest Payment Dates" means March 2 and September 2 of each year, commencing March 2, 2022. 4 "Investment Earnings" means all interest earned and any gains and losses on the investment of moneys in any fund or account created by this Agreement excluding interest earned and gains and losses on the investment of moneys in the Rebate Fund. "Maximum Annual Debt Service" means the amount determined by the City to be the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds. "Moody's" shall mean Moody's Investors Service, its successors and assigns. "Nominee" means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.18 hereof. "Officer's Certificate" means a written certificate of the City signed by an Authorized Officer of the City. "Original Purchaser" means Stifel, Nicolaus & Company, Incorporated. "Outstanding," when used as of any particular time with reference to the Bonds, means (subject to the provisions of Section 8.4 hereof) all Bonds except: (i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) Bonds called for redemption which, for the reasons specified in Section 2.3(f) hereof, are no longer entitled to any benefit under this Agreement other than the right to receive payment of the redemption price therefor; (iii) Bonds paid or deemed to have been paid within the meaning of Section 9.3 hereof; and (iv) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the City and authenticated by the Fiscal Agent pursuant to this Agreement or any Supplemental Agreement. "Owner" or "Bondowner" means any person who shall be the registered owner of any Outstanding Bond. "Particinants" means those broker -dealers, banks and other financial institutions from time to time for which the Depository holds Bonds as securities depository. "Permitted Investments" means any of the following that at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein: (a) Direct obligations of the United States (including obligations issued or held in book -entry form on the books of the Department of the Treasury, and CATS and TIGRS) or 5 obligations the principal of and interest on which are unconditionally guaranteed by the United States. (b) Bonds, debentures, notes or other evidence of indebtedness 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 (stripped securities are only permitted if they have been stripped by the agency itself): 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. Federal Housing Administration Debentures ("FHA") 5. General Services Administration Participation certificates 6. Government National Mortgage Association ("GNMA") GNMA - guaranteed mortgage -backed bonds GNMA - guaranteed pass -through obligations (participation certificates) (not acceptable for certain cash -flow sensitive issues) 7. United States Maritime Administration Guaranteed Title XI financing 8. United States Department of Housing and Urban Development Project Notes Local Authority Bonds New Communities Debentures United States government guaranteed debentures United States Public Housing Notes and Bonds United States government guaranteed public housing notes and bonds (c) 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): 1. Federal Home Loan Bank System Senior debt obligations 6 2. Federal Home Loan Mortgage Corporation ("FHLMC") Participation Certificates Senior debt obligations 3. Federal National Mortgage Association ("FNMA") Mortgage -backed securities and senior debt obligations 4. Resolution Funding Corporation obligations 5. Farm Credit System Consolidated system -wide bonds and notes (d) 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 S&P of "AAAm-G," "AAA-m" or "AA-m" and if rated by Moody's rated "Aaa," "Aal" or "Aa2," including funds for which the Fiscal Agent or any of its affiliates (including any holding company, subsidiaries, or other affiliates) provides investment advisory or other management services, but excluding such funds with a floating net asset value, and provided such funds satisfy the criteria herein contained. (e) Certificates of deposit secured at all times by collateral described in (a) and/or (b) above. Such certificates must be issued by commercial banks (including affiliates of the Fiscal Agent), savings and loan associations or mutual savings banks. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral. (f) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by the Federal Deposit Insurance Corporation or secured at all times by collateral described in paragraphs (a) and/or (b) above, including those of the Fiscal Agent and its affiliates. (g) Investment agreements, including guaranteed investment contracts, forward purchase agreements and reserve fund put agreements. (h) Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's and "A- 1" or better by S&P. (i) Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in one of the two highest rating categories assigned by such agencies. (j) Federal funds or bankers acceptances with a maximum term of one year of any bank (including those of the Fiscal Agent and its affiliates) which has an unsecured, uninsured and unguaranteed obligation rating of "Prime - 1" or "A3" or better by Moody's and "A-1" or "A" or better by S&P. (k) Repurchase agreements for 30 days or less must follow the following criteria. Repurchase agreements which provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a 7 municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date, and 1. Repurchase agreements must be between the municipal entity and a dealer bank or securities firm A. Primary dealers on the Federal Reserve reporting dealer list which are rated "A" or better by S&P and Moody's, or B. Banks rated "A" or above by S&P and Moody's. 2. The written repurchase agreements contract must include the following: A. Securities which are acceptable for transfer are: (1) Direct United States governments, or (2) Federal agencies backed by the full faith and credit of the United States government (and FNMA & FHLMC) B. The term of a repurchase agreement may be up to 30 days C. The collateral must be delivered to the City, the Fiscal Agent (if the Fiscal Agent is not supplying the collateral) or third party acting as agent for the Fiscal Agent (if the Fiscal Agent is supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities). D. Valuation of Collateral (1) The securities must be valued weekly, marked -to -market at current market price plus accrued interest (2) The value of collateral must be equal to 104% of the amount of cash transferred by the municipal entity to the dealer bank or security firm under the repo plus accrued interest. If the value of securities held as collateral slips below 104% of the value of the cash transferred by municipality, then additional cash and/or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must equal 105%. 3. A legal opinion must be delivered to the municipal entity to the effect that the repurchase agreement meets guidelines under state law for legal investment of public funds. 8 (1) Any state administered pool investment fund in which the City is statutorily permitted or required to invest will be deemed a permitted investment, including, but not limited to the Local Agency Investment Fund in the treasury of the State. "Principal Office" means the office of the Fiscal Agent in Los Angeles, California, at which at any particular time corporate trust business shall be administered, or such other office as the Fiscal Agent shall designate. "Prior Bonds" means all of the remaining outstanding Section 29 Assessment District (No. 2004-02), Limited Obligation Improvement Bonds, Series 2007. "Prior Bonds Fiscal Agent Agreement" means the Fiscal Agent Agreement, dated as of March 1, 2007, by and between the City and Wells Fargo Bank, National Association, as succeeded by U.S. Bank National Association, as successor fiscal agent, pursuant to which the Prior Bonds were issued. "Prior Bonds Fiscal Agent" means U.S. Bank National Association, in its capacity as the successor fiscal agent under the Prior Bonds Fiscal Agreement. "Reassessment Fund" means the fund by that name established and maintained by the Fiscal Agent pursuant to Section 3.4(a). "Reassessment Prepayment Account" means the account by that name in the Reassessment Fund established and maintained by the Fiscal Agent pursuant to Section 3.4(a). "Reassessment Revenues" means the revenues received by the City in each Fiscal Year from the collection of the annual installments of the unpaid Reassessments, prepayments of any unpaid Reassessments, and proceeds from the sale of property for delinquent Reassessment installments. "Reassessments" means the unpaid reassessments levied on properties within the Assessment District which secure the payment of Debt Service, pursuant to the 1984 Refunding Act, including without limitation Section 9538 thereof, and the Reassessment Report (as defined in the recitals to this Agreement) approved by the City Council thereunder. "Rebate Fund" means the fund by that name established pursuant to Section 6.2. "Record Date" means the fifteenth (15th) day of the month next preceding the applicable Interest Payment Date whether or not such day is a Business Day. "Redemption Fund" means the fund by that name established pursuant to Section 4.2(a). "Registration Books" means the records maintained by the Fiscal Agent pursuant to Section 2.8 hereof for the registration and transfer of ownership of the Bonds. 9 "Representation Letter" means the Blanket Issuer Letter of Representations, dated August 10, 1998, from the City to the Depository, qualifying bonds issued by the City for the Depository's book -entry system. "Reserve Fund" means the fund by that name established and maintained by the Fiscal Agent pursuant to Section 4.3(a). "Reserve Requirement" means, as of the date of calculation, an amount equal to the least of (i) Maximum Annual Debt Service on the then Outstanding Bonds; (ii) 10% of the original amount of the Bonds ("amount" meaning the principal amount of the Bonds, unless the Bonds were issued with original issue discount greater than two percent of the principal amount, or original issue premium greater than the sum of two percent of the principal amount plus original issue premium attributable exclusively to reasonable underwriters' compensation, in which case "amount" means issue price); or (iii) 125% of average Annual Debt Service on the then Outstanding Bonds. "Resolution of Intention" means Resolution No. of the City Council, referred to in the recitals hereof. "Resolution of Issuance" means Resolution No. of the City Council, referred to in the recitals hereof. "Resolutions" means, collectively, the Resolution of Intention and the Resolution of Issuance. "S&P" means S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC, its successors and assigns. "Securities Depositories" means The Depository Trust Company, 55 Water Street, New York, New York 10041, Attn: Call Notification Department, Fax (212) 855-7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses or such other securities depositories as the City may designate in writing to the Fiscal Agent. "State" means the State of California. "Supplemental Agreement" means a Supplemental Agreement entered into by the City and the Fiscal Agent for the purpose of modifying or amending this Agreement or the rights and obligations of the City and the Owners pursuant to Section 8.1 hereof. "Tax Certificate" means the Certificate Regarding Compliance with Certain Tax Matters (or similar document) pertaining to the use and investment of proceeds of a series of Bonds, executed and delivered by a duly authorized officer of the City on the related Closing Date, including any and all exhibits and attachments thereto. "Tax-exempt" means, with respect to interest on any obligations of a state or local government, including the interest on the Bonds, that such interest is excluded from gross income 10 for federal income tax purposes whether or not such interest is an item of tax preference for purposes of the alternative minimum tax under the Code or otherwise taken into account in calculating tax liabilities under the Code. "Term Bonds" means the Bonds maturing on September 2, 20_ and September 2, 20_. ARTICLE II THE BONDS Section 2.1. Principal Amount; Designation. The Bonds in the aggregate principal amount of $ ( Dollars) are hereby authorized to be issued by the City for the Assessment District under and subject to the terms of the Resolutions, this Agreement, the 1984 Refunding Act and other applicable laws of the State. The Bonds shall be designated "City of Palm Desert, Section 29 Assessment District (No. 2004-02), Limited Obligation Refunding Improvement Bonds, Series 2021," and shall be secured by the Reassessments. Section 2.2. Terms of Bonds. (a) The Bonds. The Bonds shall be issued as fully registered bonds, without coupons, in the denominations of $100,000 and any integral multiple of $5,000 in excess thereof. The Bonds shall be lettered and numbered in a customary manner as determined by the City. The Bonds shall be dated the Closing Date. "CUSIP" identification numbers shall be imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds, and any error or omission with respect thereto shall not constitute cause for refusal of any purchaser to accept delivery of and pay for the Bonds. In addition, failure on the part of the City of the Fiscal Agent to use such CUSIP numbers in any notice to Owners shall not constitute an event of default or any violation of the city's contract with such Owners and shall not impair the effectiveness of any such notice. (b) Maturities. The Bonds shall mature and become payable on September 2 of each applicable year of maturity, and bear interest at the specified rate of interest per annum, as follows: Interest Interest Maturity Date Principal Rate Maturity Date Principal Rate (September 2) Amount (per annum) (September 2) Amount (per annum) $ % $ % (c) Interest. The Bonds shall bear interest at the respective rates set forth in subsection (b) above which shall be payable on the Interest Payment Dates in each year. Interest shall be 11 calculated on the basis of a 360-day year composed of twelve 30-day months. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated after a Record Date and before the close of business on the next Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated on or before the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if at the time of authentication of a Bond, interest is in default thereon, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon or from the Closing Date, if no interest has previously been paid or made available for payment thereon. (d) Method of Payment. Interest on the Bonds is payable by check of the Fiscal Agent mailed by first class mail, postage prepaid, on each Interest Payment Date, until the principal amount of a Bond has been paid or made available for payment, to the registered Owner thereof at such registered Owner's address as it appears on the Registration Books at the close of business on the Record Date preceding the Interest Payment Date or by wire transfer made on such Interest Payment Date upon written instructions of any owner of $1,000,000 or more in aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the applicable Record Date. The principal of the Bonds and any premium on the Bonds are payable in lawful money of the United States of America upon surrender of such Bonds at the Principal Office of the Fiscal Agent. All Bonds paid by the Fiscal Agent pursuant to this subsection shall be canceled and destroyed by the Fiscal Agent. Section 2.3. Redemption. (a) Mandatory Sinking Fund Redemption. The Term Bonds are subject to redemption in part by lot from sinking fund payments made by the City, at a redemption price equal to the principal amount thereof to be redeemed with accrued interest thereon to the redemption date, without premium, in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; provided, however. if some but not all of the Term Bonds of a maturity have been redeemed pursuant to Section 2.3(b) or (c), each future sinking fund payment with respect to such Term Bonds will be reduced on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, so that the total amount of sinking fund payments with respect to such Term Bonds to be made subsequent to a Section 2.3(b) or (c) redemption shall be reduced by an amount equal to the principal amount of the Term Bonds so redeemed, all as shall be designated pursuant to written notice filed by the City with the Fiscal Agent: Bonds Maturing on September 2, 20 Redemption Date (September 2) Principal Amount to be Redeemed $ (maturity) Bonds Maturing on September 2, 20 12 Redemption Date (September 21 (maturity) Principal Amount to be Redeemed $ In lieu of a redemption pursuant to this Section 2.3(a), the Fiscal Agent may apply amounts in the Redemption Fund to purchase Term Bonds at public or private sale, as and when and at such prices (including brokerage and other charges) as may be directed by the City, except that the purchase price (exclusive of accrued interest) may not exceed the redemption price then applicable to such Bonds, as set forth in writing by the City; provided, however, that no Term Bonds shall be purchased by the Fiscal Agent hereunder with a settlement date more than 60 days prior to the date on which the City would otherwise redeem such Term Bonds pursuant to this Section 2.3(a). The principal amount of any Term Bonds so purchased by the Fiscal Agent shall be credited towards and shall reduce the Redemption Fund payment otherwise required to be made with respect to such Term Bonds on the applicable redemption date. (b) Mandatory Redemption from Prepayment of Reassessments. The Bonds are subject to redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, pursuant to Section 3.4 or 4.3 from the prepayment of Reassessments or surplus amounts in the Reserve Fund as provided therein, at the following redemption prices expressed as percentages of the principal amount of the Bonds to be redeemed, together with accrued interest to the date of redemption: Redemption Dates Redemption Prices Prior to September 2, 2026 103% September 2, 2026 and March 2, 2027 102 September 2, 2027 and March 2, 2028 101 September 2, 2028 and thereafter 100 (c) Optional Redemption. The Bonds are subject to redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, at the option of the City from moneys derived by the City from any source, at the following redemption prices expressed as percentages of the principal amount of the Bonds to be redeemed, together with accrued interest to the date of redemption: Redemption Dates Redemption Prices Prior to September 2, 2028 103% [September 2, 2028 and March 2, 2029 102] [September 2, 2029 and March 2, 2030 101] [September 2, 2030 and thereafter 100] 13 (d) Notice to Fiscal Agent. An Authorized Officer shall give the Fiscal Agent written notice of the City's intention to redeem Bonds not less than forty-five (45) days prior to the applicable redemption date unless a shorter time is acceptable to the Fiscal Agent in its sole discretion specifying the principal amount and maturities of Bonds to be redeemed. (e) Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be provided by registered or certified mail or by personal service at least thirty (30) days prior to the date fixed for redemption, to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Registration Books. In addition to the foregoing, the Fiscal Agent shall send a notice of redemption at least thirty (30) days prior to the redemption date, by first class mail, postage prepaid, or by overnight delivery service to the following: (i) each of the Securities Depositories, and (ii) one or more of the Information Services. Such notice shall state the date of such notice, the date of issue of the Bonds, the place or places of redemption, the redemption date, the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers (if any) and Bond numbers of the Bonds to be redeemed, or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called for redemption in part the portion of the principal of the Bond to be redeemed, shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. The cost of the mailing of any such redemption notice shall be paid by the City. Neither failure to receive any redemption notice nor any defect in such redemption notice so given shall affect the sufficiency of the proceedings for the redemption of such Bonds. Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, identify, by issue, maturity and Bond number, the Bonds being redeemed with the proceeds of such check or other transfer. Except as otherwise provided in Section 3.4(d), in the event of a redemption of Bonds, the Fiscal Agent shall deposit in the Redemption Fund moneys provided by the City in an amount equal to the redemption price of the Bonds being redeemed on or before the Business Day immediately preceding the Interest Payment Date upon which such Bonds are to be redeemed. Whenever provision is made in this Agreement for the redemption of less than all of the Bonds, the Fiscal Agent shall select the Bonds for redemption in such a way that the ratio of Outstanding Bonds to issued Bonds shall be approximately the same in each maturity of the Bonds insofar as possible (i.e., on a pro-rata basis), and shall select Bonds for redemption within each maturity of the Bonds by lot. The City shall have the right to rescind any redemption pursuant to paragraph (c) above, by written notice to the Fiscal Agent at least one Business Day prior to the date fixed for redemption. Any notice of such redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the Business Day preceding the Interest Payment Date upon which such Bonds are to be redeemed, and such cancellation shall not constitute a default under 14 this Agreement. The City and the Fiscal Agent shall have no liability to the Owners or any other party related to or arising from such rescission of redemption. The Fiscal Agent shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent. Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the Owner, at the expense of the City, a new Bond or Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds. Such partial redemption shall be valid upon payment of the amount required to be paid to such Owner, and the City and the Fiscal Agent shall be released and discharged thereupon from all liability to the extent of such payment. (f) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds called for redemption shall have been deposited in the Redemption Fund or the Reassessment Prepayment Account, as applicable, such Bonds or portions thereof shall cease to be entitled to any benefit under this Agreement other than the right to receive payment of the redemption price, and interest shall cease to accrue on the Bonds or portions thereof to be redeemed on the redemption date specified in the notice of redemption. All Bonds redeemed by the Fiscal Agent pursuant to this Section 2.3 shall be canceled and destroyed by the Fiscal Agent. Section 2.4. Form of Bonds. The Bonds, the Fiscal Agent's certificate of authentication and the assignment to appear thereon shall be substantially in the forms, respectively, set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions as permitted or required by this Agreement. Section 2.5. Execution of Bonds. The Bonds shall be executed by the manual or facsimile signatures of the Treasurer and the City Clerk of the City, who are in office on the date of this Agreement or at any time thereafter. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bond to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Bond to the Owner. Any Bond may be signed and attested by such persons as at the actual date of the execution of such Bond shall be the proper officers of the City notwithstanding that on the nominal date of such Bond any such person shall not have been such officer of the City. Only such Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A hereto, manually executed by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of authentication of the Fiscal Agent shall be conclusive evidence that such Bonds have been duly authenticated, registered and delivered hereunder, and are entitled to the benefits of this Agreement. Section 2.6. Transfer of Bonds. Any Bond, or any portion thereof which is equal to $100,000 or greater in any integral multiple of $5,000 in principal amount (unless due to prior redemption in part thereof, the Bond is Outstanding in a principal amount of less than $100,000, 15 then in an integral multiple of $5,000 of less than $100,000), may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.8 hereof, by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Fiscal Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting transfer of a Bond any tax or other governmental charge required to be paid with respect to such transfer. Whenever any Bond or Bonds shall be surrendered for transfer, the City shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of like aggregate principal amount of authorized denominations. No transfers of Bonds shall be required to be made (a) during the fifteen (15) days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (b) with respect to Bonds which have been selected for redemption. Section 2.7. Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Fiscal Agent only for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity. The cost for any services rendered or any expense incurred by the Fiscal Agent in connection with any such exchange shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting exchange of a Bond any tax or other governmental charge required to be paid with respect to such exchange. No exchanges of Bonds shall be required to be made (i) during the fifteen (15) days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds which have been selected for redemption. Section 2.8. Bond Register. The Fiscal Agent shall keep, or cause to be kept, sufficient books for the registration and transfer of the Bonds which books shall show the series, number, CUSIP identification number (if any), date of issuance, amount, rate of interest and Owner of each Bond and shall at all times be open to inspection by the City during regular business hours upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the ownership of the Bonds as hereinbefore provided. Section 2.9. Temporary Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the City, and may contain such reference to any of the provisions of this Agreement as may be appropriate. Every temporary Bond shall be executed by the City upon the same conditions and in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds, it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange for the definitive Bonds at the Principal Office of the Fiscal Agent or at such other location as the Fiscal Agent shall designate, and the Fiscal Agent shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of 16 definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Agreement as definitive Bonds authenticated and delivered hereunder. Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the City, at the expense of the Owner of said Bond, shall execute, and the Fiscal Agent shall authenticate and deliver, a replacement Bond of like tenor and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be canceled and destroyed by the Fiscal Agent. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence be satisfactory to it and indemnity satisfactory to it shall be given, the City, at the expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and deliver, a replacement Bond of like tenor and principal amount in lieu of and in substitution for the Bond so lost, destroyed or stolen. The City or Fiscal Agent may require payment of a sum not exceeding the actual cost of preparing each replacement Bond delivered under this Section 2.10 and of the expenses which may be incurred by the City and the Fiscal Agent for the preparation, execution, authentication and delivery thereof. Any Bond delivered under the provisions of this Section 2.10 in replacement of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation of the City whether or not the Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Agreement with all other Bonds issued pursuant to this Agreement. Section 2.11. Special Obligation. All obligations of the City under this Agreement and the Bonds and interest thereon shall be special obligations of the City, payable solely from the Reassessment Revenues. Neither the faith and credit nor the taxing power of the City or the State of California or any political subdivision thereof is pledged to the payment of the Bonds or the interest thereon and no Owner of the Bonds may compel the exercise of any taxing power by the City or force the forfeiture of any of its property, other than the Reassessment Revenues and other assets pledged hereunder and only to the extent of, and subject in all respects to, the terms of this Agreement. The principal of, and premium (if any) and interest on the Bonds are not a debt of the City nor a legal or equitable pledge, charge, lien or encumbrance upon any of its property, or upon any of its income, receipts or revenues. Section 2.12. Refunding. At any time necessary or appropriate, the City may issue bonds to refund all or any portion of the Bonds as permitted by and in accordance with law including, but not limited to, the 1984 Refunding Act. Section 2.13. No Acceleration. The principal of the Bonds shall not be subject to acceleration hereunder. Nothing in this Section shall in any way prohibit the redemption of Bonds under Section 2.3 hereof, or the defeasance of the Bonds and discharge of this Agreement under Section 9.3 hereof. Section 2.14. Book Entry System. The Bonds shall be initially delivered in the form of a separate single fully registered Bond (which may be typewritten) for each of the maturities of the Bonds. Upon initial delivery, the ownership of each such Bond shall be registered in the 17 registration books kept by the Fiscal Agent in the name of the Nominee as nominee of the Depository. Except as provided in Section 2.16 hereof, all of the Outstanding Bonds shall be registered in the registration books kept by the Fiscal Agent in the name of the Nominee With respect to Bonds registered in the registration books kept by the Fiscal Agent in the name of the Nominee, the City and the Fiscal Agent shall have no responsibility or obligation to any such Participant or to any Person on behalf of which such a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Fiscal Agent shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the registration books kept by the Fiscal Agent, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in the Bonds to be redeemed in the event the Bonds are redeemed in part, or (iv) the payment to any Participant or any other Person, other than an Owner as shown in the registration books kept by the Fiscal Agent, of any amount with respect to principal of, premium, if any, or interest due with respect to the Bonds. The City and the Fiscal Agent may treat and consider the Person in whose name each Bond is registered in the registration books kept by the Fiscal Agent as the holder and absolute owner of such Bond for the purpose of payment of the principal of, premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Fiscal Agent shall pay all principal of, premium, if any, and interest due on the Bonds only to or upon the order of the respective Owner, as shown in the registration books kept by the Fiscal Agent, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to satisfy and discharge fully the City's obligations with respect to payment of the principal, premium, if any, and interest due on the Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the registration books kept by the Fiscal Agent, shall receive a Bond evidencing the obligation of the City to make payments of principal, premium, if any, and interest pursuant to this Agreement. Upon delivery by the Depository to the Fiscal Agent and the City of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Agreement shall refer to such new nominee of the Depository. Section 2.15. Representation Letter. In order to qualify the Bonds which the City elects to register in the name of the Nominee for the Depository's book -entry system, the City has heretofore executed and delivered to such Depository the Representation Letter. The execution and delivery of the Representation Letter does not in any way impose upon the City or the Fiscal Agent any obligation whatsoever with respect to persons having interests in the Bonds other than the Owners, as shown on the registration books kept by the Fiscal Agent. The Fiscal Agent agrees to take all action necessary to continuously comply with all representations made by it in the Representation Letter. In addition to the execution and delivery of the Representation Letter, the Authorized Officers are hereby authorized to take any other actions, not inconsistent with this Agreement, to qualify the Bonds for the Depository's book -entry program. Section 2.16. Transfers Outside the Book-Entry System. In the event (i) the Depository determines not to continue to act as securities depository for the Bonds, or (ii) the City determines 18 that the Depository shall no longer so act, then the City will discontinue the book -entry system with the Depository. If the City fails to identify another qualified securities depository to replace the Depository then the Bonds so designated shall no longer be restricted to being registered in the registration books kept by the Fiscal Agent in the name of the Nominee, but shall be registered in whatever name or names Persons transferring or exchanging Bonds shall designate, in accordance with the provisions of Section 2.6 hereof. Section 2.17. Payments to Nominee Notwithstanding any other provisions of this Agreement to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal, premium, if any, and interest due with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository. Section 2.18. Initial Depository and Nominee. The initial Depository under this Article shall be The Depository Trust Company, New York, New York. The initial Nominee shall be Cede & Co., as Nominee of The Depository Trust Company, New York, New York. ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; REASSESSMENT FUND Section 3.1. Issuance and Delivery of Bonds. At any time after the execution and delivery of this Agreement, the City may issue the Bonds in the aggregate principal amount set forth in Section 2.1 hereof and deliver the Bonds to the Original Purchaser. The Authorized Officers of the City are hereby authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of the Bonds in accordance with the provisions of the 1915 Act, the 1984 Refunding Act, the Resolutions and this Agreement and to do and cause to be done any and all acts and things necessary or convenient for delivery of the Bonds to the Original Purchaser. Section 3.2. Application of Proceeds of Sale of Bonds. The proceeds of the sale of the Bonds, in the amount of $ , being the purchase price for the Bonds of $ (calculated as the aggregate original principal amount $ , [plus/less] $ of net original issue [premium/discount], and less $ of underwriter's discount), shall be deposited by the Fiscal Agent as follows: (a) The Fiscal Agent shall deposit $ established hereunder to pay the Costs of Issuance of the Bonds; in the Costs of Issuance Fund (b) The Fiscal Agent shall deposit $ in the Reserve Fund established hereunder to fund the Reserve Requirement; and (c) The Fiscal Agent shall transfer the remaining $ to the Escrow Agent for deposit pursuant to the Escrow Agreement. Section 3.3. Costs of Issuance Fund. 19 (a) Establishment of Costs of Issuance Fund. There is hereby established, as a separate account to be held by the Fiscal Agent, the "Costs of Issuance Fund" into which shall be deposited the proceeds of the sale of the Bonds pursuant to Section 3.2(a) hereof. Moneys in the Costs of Issuance Fund shall be held in trust by the Fiscal Agent and shall be disbursed as provided in subsection (b) of this Section for the payment or reimbursement of Costs of Issuance. (b) Disbursements. Amounts in the Costs of Issuance Fund shall be disbursed to pay Costs of Issuance, as set forth in an Officer's Certificate containing respective amounts to be paid to the designated payees delivered to the Fiscal Agent on the Closing Date concurrently with the delivery of the Bonds. The Fiscal Agent shall, to the extent of the moneys on deposit in the Costs of Issuance Fund, pay all Costs of Issuance upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such Officer's Certificate, or upon receipt of an Officer's Certificate requesting payment of a Cost of Issuance not listed on the initial Officer's Certificate delivered to the Fiscal Agent on the Closing Date. The Fiscal Agent is authorized to act on such an Officer's Certificate without further inquiry, shall not be responsible for the accuracy of the statements contained therein, and shall be absolutely protected and incur no liability in relying on such an Officer's Certificate. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of 180 days from the Closing Date and shall then transfer and deposit any moneys remaining therein, including any Investment Earnings thereon, to the Redemption Fund. (c) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited in accordance with Section 6.1 hereof. Investment Earnings shall be retained in the Costs of Issuance Fund to be used for the purposes of such fund. Section 3.4. Reassessment Fund. (a) Establishment of Reassessment Fund. There is hereby established, as a separate account to be held by the Fiscal Agent, the "Reassessment Fund" to the credit of which the Fiscal Agent shall deposit all Reassessment Revenues received by the Fiscal Agent from the City except for the prepayment of reassessments. Upon receiving any Reassessment Revenues from the County, the City shall retain the amounts included therein up to the amount budgeted and assessed pursuant to California Streets and Highways Code Section 10204(f) and Sections 8682 and 8682.1 of the 1915 Act, or a portion thereof, for payment of the City's expenses associated with the collection of the Reassessment Revenues and payment of the annual costs associated with the registration of the Bonds and the other duties of the Fiscal Agent provided for herein, and transfer the remainder thereof to the Fiscal Agent for deposit in the Reassessment Fund. Moneys in the Reassessment Fund shall be held by the Fiscal Agent for the benefit of the City and the Owners of the Bonds, as hereinafter provided, shall be disbursed as provided below and, pending disbursement, shall be subject to a lien in favor of the Owners of the Bonds. The Fiscal Agent shall establish and maintain within the Reassessment Fund a "Reassessment Prepayment Account" when needed. (b) Disbursements. Not later than the third Business Day preceding each Interest Payment Date, the Fiscal Agent shall withdraw from the Reassessment Fund and deposit in the Redemption Fund the amount which is necessary to pay Debt Service on the Interest Payment Date. 20 (c) Investment. Moneys in the Reassessment Fund shall be invested and deposited in accordance with Section 6.1 hereof. Investment Earnings shall be retained in the Reassessment Fund to be used for the purposes of such fund. (d) Prepayment of Reassessments. Amounts received from property owners in the Assessment District as prepayments of the Reassessment pursuant to the 1915 Act shall be deposited by the City Treasurer and held by the Fiscal Agent in the Reassessment Prepayment Account for application pursuant to Section 3.4(e). The City shall identify to the Fiscal Agent in writing the amount of such prepayment. The Fiscal Agent also shall deposit in the Reassessment Prepayment Account amounts transferred thereto from the Reserve Fund pursuant to Sections 4.3(d) and 4.3(f). Amounts in the Reassessment Prepayment Account shall be used to pay the principal of and redemption premium on Bonds to be called for redemption as provided in the next sentence. Subject to the priority of disbursements set forth in Section 3.4(e), whenever and to the extent monies on deposit in the Reassessment Prepayment Account are sufficient to pay on redemption the principal of Bonds in integral $5,000 amounts plus the redemption premium thereon (if any), the Fiscal Agent shall advance the maturity of and call Bonds for redemption pursuant to Section 2.3(b). On or after each redemption date, upon presentation and surrender thereof, the Fiscal Agent shall pay the principal of and redemption premium on each Bond the maturity of which has been so advanced from monies in the Reassessment Prepayment Account. Interest accrued on each such Bond shall be paid from monies in the Redemption Fund. (e) Application of Prepaid Reassessments. Upon receiving a prepayment of a Reassessment, the City Treasurer shall transfer it to the Fiscal Agent for deposit in the Reassessment Prepayment Account. All prepayments may be commingled in a single subaccount within the Reassessment Prepayment Account. From the Reassessment Prepayment Account (but solely from money representing prepayment on Reassessments described in Section 3.4(d)), the Fiscal Agent shall make disbursements in the following priority as specified by the City as follows: (i) The administrative fee, in the amount included in such prepayment amount pursuant to Section 8766.5 of the 1915 Act for the City's costs of administering the prepayment and the related redemption of Bonds and specified to the Fiscal Agent by the City, shall be transferred to the City for deposit in the general fund of the City. (ii) Delinquent principal, interest, and penalties on the Reassessment being prepaid shall be transferred to the Redemption Fund. If the Reserve Fund has been depleted on account of the delinquencies, the delinquent amounts and penalties shall be transferred instead to the Reserve Fund. (iii) The installment of principal on the Reassessment being prepaid due in the Fiscal Year in which prepayment is made shall be transferred to the Redemption Fund. (iv) Interest accrued on the Reassessment to the next available redemption date with respect to the Bonds shall be transferred to the Redemption Fund. (v) The balance in the Reassessment Prepayment Account shall be used to redeem Bonds on the next available redemption date as provided in Section 2.3(b) hereof. The 21 amount of Bonds to be retired shall be the maximum for which principal and redemption premium may be paid in full from the Reassessment Prepayment Account. Accrued interest on Bonds to be retired shall be paid from the Redemption Fund. ARTICLE IV REASSESSMENT REVENUES; REDEMPTION FUND; RESERVE FUND Section 4.1. Pledge of Reassessment Revenues. The Bonds shall be secured by a pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Reassessment Revenues and all moneys deposited in the Redemption Fund, the Reassessment Fund, and the Reserve Fund. The Reassessment Revenues and all moneys deposited into such funds are hereby dedicated in their entirety to the payment of the principal of the Bonds (including any sinking fund payments), and interest and any premium on, the Bonds as provided herein, until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose in accordance with Section 9.3 hereof. Amounts in the Costs of Issuance Fund are not pledged to the payment of the Bonds. Section 4.2. Redemption Fund. (a) Deposits. There is hereby established, as a separate account to be held by the Fiscal Agent, the "Redemption Fund" to the credit of which deposits shall be made as required by the provisions of this Agreement. Moneys in the Redemption Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of (including any sinking fund payments), and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. (b) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Redemption Fund and pay to the Owners of the Bonds the principal of and interest and any premium then due and payable on the Bonds, including any sinking fund payments thereon required pursuant to Section 2.3(a), on the Interest Payment Date. If, on any Interest Payment Date, there will be insufficient funds in the Redemption Fund to make the payments provided for in the first paragraph of this Section 4.2(b), the Fiscal Agent shall apply the available funds first to the payment of interest on the Bonds, and then to the payment of principal due on the Bonds including, and on a pro rata basis with, any sinking fund payments thereon required pursuant to Section 2.3(a). Any sinking fund payment or portion thereof not made when due pursuant to Section 2.3(a) shall be added to the sinking fund payment due on the next September 2. As provided in the form of the Bonds attached hereto as Exhibit A, the City Council has determined, pursuant to Section 8769(b) of the 1915 Act that the City will not obligate itself to advance available funds from the City Treasury to cure any deficiency which may occur in the Redemption Fund. 22 Amounts in the Redemption Fund shall also be withdrawn and deposited in the Rebate Fund as provided in Section 6.2 hereof. (c) Investment. Moneys in the Redemption Fund shall be invested and deposited in accordance with Section 6.1 hereof. Investment Earnings shall be retained in the Redemption Fund, except to the extent they are required to be deposited by the Fiscal Agent in the Rebate Fund in accordance with Section 6.2 hereof. Section 4.3. Reserve Fund. (a) Establishment of Fund; Disbursement. There is hereby established, as a separate account to be held by the Fiscal Agent, the "Reserve Fund" to the credit of which an initial deposit shall be made from proceeds of the sale of the Bonds pursuant to Section 3.2 of this Agreement, which deposit is equal to the Reserve Requirement as of the Closing Date, and to which deposits shall be made as provided in Sections 4.3(b) and 3.4(e)(ii). Moneys in the Reserve Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of the principal of and interest on the Bonds and shall be subject to a lien in favor of the Owners of the Bonds. (b) Use of Fund. Except as otherwise provided in this Section, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the amount then required for payment of the principal of (including any sinking fund payments required under Section 2.3(a)), and interest on the Bonds or, in accordance with the provisions of Section 4.3(e), or for the purpose of redeeming Bonds. Amounts transferred from the Reserve Fund to the Redemption Fund pursuant to this subsection shall be restored by the City to satisfy the then applicable Reserve Requirement from (i) the collection of delinquent installments on the Reassessments levied on parcels for which such installments are delinquent, and penalties and interest thereon, whether by judicial foreclosure proceedings or otherwise, as soon as is reasonably possible following the receipt by the City of such delinquent installments, penalties and interest, and (ii) monies transferred by the Fiscal Agent pursuant to Section 3.4(e)(ii) of this Agreement. Except as provided by the foregoing sentence, the City has no monies available, and no obligation hereunder, to replenish the Reserve Fund to the Reserve Requirement. (c) Transfer Due to Deficiency in Redemption Fund. Whenever transfer is made from the Reserve Fund to the Redemption Fund due to a deficiency in the Redemption Fund, the Fiscal Agent shall report such fact to the City. (d) Transfers on Payment of Reassessment. Whenever a Reassessment levied on a lot or parcel of property within the Assessment District is paid off, the Fiscal Agent shall, upon receiving an Officer's Certificate regarding such Reassessment, transfer from the Reserve Fund to the Reassessment Prepayment Account an amount equal to the reduction in such Reassessment determined pursuant to Section 8881 of the 1915 Act, which amount shall be specified in the Officer's Certificate. Upon receipt of such an Officer's Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy of the statements 23 contained therein, and shall be absolutely protected and incur no liability in relying on such Officer's Certificate. (e) Transfer of Excess of Reserve Requirement. Whenever, on any September 3, the amount in the Reserve Fund, less Investment Earnings resulting from the investment of the funds therein which pursuant to Section 6.2 hereof must be rebated to the United States, exceeds the then applicable Reserve Requirement, the Fiscal Agent shall provide written notice to the City of the amount of the excess and shall, subject to the requirements of Section 6.2 hereof, transfer an amount equal to the excess from the Reserve Fund to the Redemption Fund to be used for the payment of Debt Service on the next succeeding Interest Payment Date in accordance with Section 4.2 hereof. (f) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay all of the then Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer, transfer money from the Reserve Fund to the Reassessment Prepayment Account and the Redemption Fund as provided in the next succeeding sentence to redeem all of the Outstanding Bonds in accordance with Sections 3.4(d) and 2.3(b) on the next succeeding Interest Payment Date. To effect such redemption, the Fiscal Agent shall make the following transfers from the Reserve Fund: (i) an amount equal to the principal and premium on the Bonds due upon redemption to the Reassessment Prepayment Account, and (ii) an amount equal to the interest thereon accrued to the redemption date to the Redemption Fund. In the event that the amounts so transferred from the Reserve Fund to the Reassessment Prepayment Account and the Redemption Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Reserve Fund shall be transferred by the Fiscal Agent to the City to be applied as provided in Section 8885 of the 1915 Act. Upon receipt of such an Officer's Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy of the statements contained therein, and shall be absolutely protected and incur no liability in relying on such Officer's Certificate. (g) Investment. Moneys in the Reserve Fund shall, except as provided in subsection (d) above, be invested and deposited in accordance with Section 6.1 hereof. ARTICLE V OTHER COVENANTS, REPRESENTATIONS AND DECLARATIONS OF THE CITY Section 5.1. Punctual Payment. The City will punctually pay or cause to be paid the principal of and interest and any premium on the Bonds when and as due in strict conformity with the terms of this Agreement and any Supplemental Agreement to the extent that the Reassessment Revenues are available therefor, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Agreement and all Supplemental Agreements and of the Bonds. 24 Section 5.2. Special Obligation. The Bonds are special obligations of the City and are payable solely from and secured solely by the Reassessment Revenues and the amounts in the Redemption Fund, the Reserve Fund and the Reassessment Fund. Section 5.3. Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City shall not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the City, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Agreement, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded. Section 5.4. Against Encumbrances. The City shall not encumber, pledge or place any charge or lien upon any of the Reassessment Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, except as permitted by this Agreement, including without limitation Section 2.12 with respect to refunding bonds. Section 5.5. Protection of Security and Rights of Owners. The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City. Section 5.6. Collection of Reassessment Revenues. The City shall comply with all requirements of the 1915 Act so as to assure the timely collection of Reassessment Revenues, including without limitation, the enforcement of the payment or collection of delinquent Reassessments. Section 5.7. Further Assurances. The City will adopt, make, execute and deliver any and all such further ordinances, resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for better assuring and confirming unto the Owners of the Bonds the rights and benefits provided in this Agreement. Section 5.8. Tax Covenants. Notwithstanding any other provision of this Agreement, absent an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds issued on a tax-exempt basis for federal income tax purposes will not be adversely affected for federal income tax purposes, the City covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows: (a) The City shall not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the Tax-exempt status of interest on the Bonds under 25 Section 103(a) of the Code or cause interest on the Bonds to be an item of tax preference for purposes of the alternative minimum tax under the Code; and (b) In furtherance of the foregoing tax covenant, the City shall comply with the provisions of the Tax Certificate, which is incorporated herein as if fully set forth herein. The covenants of the City contained in this Section 5.8 shall survive the payment, redemption or defeasance of Bonds pursuant to Section 9.3 hereof. The Fiscal Agent makes no warranties, covenants or representations regarding the current or future tax status of interest on the Bonds. Section 5.9. Covenant to Foreclose. The City hereby covenants with and for the benefit of the Owners of the Bonds that it will order, and cause to be commenced, judicial foreclosure proceedings against any parcel with at least two (2) delinquent Reassessment installments by the December 1 following the close of the Fiscal Year in which the second of such installments was due, and will commence judicial foreclosure proceedings against all properties with delinquent Reassessment installments by the December 1 following the close of each Fiscal Year in which it receives Reassessment Revenues in an amount which is less than ninety-five percent (95%) of the total Reassessment Revenues which were to be received in the Fiscal Year and diligently pursue to completion such foreclosure proceedings; provided, however, the City may elect to defer the commencement of foreclosure proceedings with respect to any property so long as (i) the amount on deposit in the Reserve Fund is equal to the Reserve Requirement and (ii) the City is current in the payment of Debt Service. Notwithstanding the foregoing, if at any time, the County's Teeter Plan (adopted pursuant to Sections 4701 through 4717 of the California Revenue and Taxation Code) is in effect and is made applicable to the Assessment District and the Reassessments being levied in connection with the Bonds, the City may, in its discretion, elect not to commence any judicial foreclosure proceeding pursuant to this Section 5.9 or defer the commencement of such proceedings until such time as the City deems appropriate. Section 5.10. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement, which provides for certain information to be disseminated to the Owners on an annual basis, all as specified in the Continuing Disclosure Agreement. The Fiscal Agent agrees to inform the City within three (3) Business Days after obtaining knowledge that any of the events listed in Section 5(a) or (b) of the Continuing Disclosure Agreement has occurred, or as soon as reasonably practicable thereafter. ARTICLE VI INVESTMENTS; REBATE FUND; LIABILITY OF THE CITY Section 6.1. Deposit and Investment of Moneys in Funds. Subject in all respects to the provisions of Section 6.2 hereof, moneys in any fund or account created or established by this Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted 26 Investments, as directed pursuant to an Officer's Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments; provided that moneys in the Reserve Fund shall be invested in Permitted Investments which shall mature not more than five years from the date of such investment. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest any such moneys in Permitted Investments described in paragraph (d) of the definition of Permitted Investments in Section 1.3 hereof. Except as specifically provided herein, the Fiscal Agent shall have no obligation to pay additional interest or maximize investment income on any funds held by it. Neither the City nor the Owners of the Bonds shall have any claim of any kind against the Fiscal Agent in connection with investments properly made pursuant to this Section 6.1. Obligations purchased as an investment of moneys in any fund or account shall be deemed to be part of such fund or account, subject, however, to the requirements of this Agreement for transfer of Investment Earnings in funds and accounts. The Fiscal Agent shall be entitled to rely conclusively upon the written instructions of the City directing investments in Permitted Investments as to the fact that each such investment is permitted by the laws of the State, and shall not be required to make further investigation with respect thereto. With respect to any restrictions contained in the definition of Permitted Investments in Section 1.3 hereof which embody legal conclusions (e.g., the existence, validity and perfection of security interests in collateral), the Fiscal Agent shall be entitled to rely conclusively on an opinion of counsel obtained at the City's expense. The Fiscal Agent or an affiliate of the Fiscal Agent may act as principal or agent in the acquisition or disposition of any investment and may engage in or be interested in any financial or other transaction with the City. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to this Section 6.1. For purposes of determining the amount on deposit in any fund or account held hereunder, all Permitted Investments or investments credited to such fund or account shall be valued at the cost thereof (excluding accrued interest and brokerage commissions, if any). Subject in all respects to the provisions of Section 6.2 hereof, investments in any and all funds and accounts may be commingled in a single fund for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent hereunder, provided that the Fiscal Agent shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Agreement. The Fiscal Agent shall sell or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited, and the Fiscal Agent shall not be liable or responsible for any loss resulting from the acquisition or disposition of any such investment security in accordance herewith. The Fiscal Agent shall furnish the City periodic cash transaction statements which shall include detail for all investment transactions effected by the Fiscal Agent or brokers selected by the District. The City waives the right to receive brokerage confirmations of security transactions 27 effected by the Fiscal Agent as they occur, to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Fiscal Agent will be available upon request and at no additional cost, and other trade confirmations may be obtained from the applicable broker. The Fiscal Agent or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Fiscal Agent hereunder. Section 6.2. Rebate Fund: Rebate to United States. There is hereby created, to be held by the Fiscal Agent, as a separate account distinct from all other funds and accounts held by the Fiscal Agent under this Agreement, the Rebate Fund. Pursuant to the written direction of the City, the Fiscal Agent shall deposit into the Rebate Fund moneys transferred by the City to the Fiscal Agent pursuant to the Tax Certificate. The Rebate Fund shall be held either uninvested or invested only in Federal Securities at the direction of the City. Moneys on deposit in the Rebate Fund shall be applied only to payments made to the United States, to the extent such payments are required by the Tax Certificate. The Fiscal Agent shall, upon written direction of the City, make such payments to the United States. The Fiscal Agent's sole responsibilities under this Section 6.2 are to follow the written instructions of the City pertaining hereto and the Fiscal Agent shall have no independent responsibility to monitor or enforce compliance by the City with the Tax Certificate. The City shall be responsible for any fees and expenses incurred by the Fiscal Agent pursuant to this Section 6.2. The Fiscal Agent shall, upon written request and direction from the City, transfer to or upon the order of the City any moneys on deposit in the Rebate Fund in excess of the amount, if any, required to be maintained or held therein in accordance with the Tax Certificate. Upon receipt of such a written request and direction the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy thereof, and shall be absolutely protected and incur no liability in relying thereon. Section 6.3. Liability of City. The City shall not incur any responsibility in respect of the Bonds or this Agreement other than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it. No provision of this Agreement shall require the City to expend or risk its own general funds or otherwise incur any financial liability (other than with respect to the Reassessment Revenues) in the performance of any of its obligations hereunder, or in the exercise of and of its rights or powers. Section 6.4. Employment of Agents by the City. In order to perform its duties and obligations hereunder, the City may employ such persons or entities as it deems necessary or advisable. The City shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities. 28 ARTICLE VII THE FISCAL AGENT Section 7.1. Appointment of Fiscal Agent. U.S. Bank National Association is hereby appointed Fiscal Agent, registrar and paying agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent. Any financial institution into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any financial institution resulting from any merger, conversion or consolidation to which it shall be a party or any financial institution to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such financial institution shall be eligible under the following paragraph of this Section 7.1, shall be the successor to the Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. The City may remove the Fiscal Agent initially appointed, and any successor thereto, and the City may appoint a successor or successors thereto, but any such successor shall be a financial institution having (or in the case of a corporation or trust company included in a bank holding company system, the related bank holding company shall have) a combined capital (exclusive of borrowed capital) and surplus of at least $250,000,000, and subject to supervision or examination by federal or state authority. If such financial institution publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 7.1, combined capital and surplus of such financial institution shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Fiscal Agent may at any time resign by giving thirty (30) days' written notice to the City and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent. If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section 7.1 within sixty (60) days after the Fiscal Agent shall have given to the City written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent, at the expense of the City, or any Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent. Section 7.2. Liability of Fiscal Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the City and the Fiscal Agent assumes no responsibility for the correctness of the same, nor makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, nor shall the Fiscal Agent incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds expressly assigned to or imposed upon it. The Fiscal Agent 29 shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. In the absence of willful misconduct, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, written directions or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in accordance with the terms of this Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, facsimile transmission, electronic mail or other paper or document which it shall reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument. The Fiscal Agent shall not be liable for any error of judgment made by a responsible officer of the Fiscal Agent unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts. No provision of this Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers unless an indemnity and security reasonably satisfactory to the Fiscal Agent shall have been provided to the Fiscal Agent. The Fiscal Agent shall not be responsible for accounting for, or paying to, any party to this Agreement, including, but not limited to the City and the Owners, any returns on or benefit from funds held for payment of unredeemed Bonds or outstanding checks and no calculation of the same shall affect, or result in any offset against, fees due to the Fiscal Agent under this Agreement. The Fiscal Agent shall have no responsibility with respect to the payment of Debt Service by the City or with respect to the observance or performance by the City of the other conditions, covenants and terms contained herein, or with respect to the investment of any moneys in any fund or account established, held or maintained by the City pursuant to this Fiscal Agent Agreement or otherwise. All indemnification and releases from liability granted herein to the Fiscal Agent shall extend to the directors, officers and employees of the Fiscal Agent. The Fiscal Agent may execute any of its trusts or powers or perform its duties through attorneys, agents or receivers. The Fiscal Agent shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of enforced delay ("unavoidable delay") in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine 30 restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources or energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Fiscal Agent; provided that, in the event of any such unavoidable delay under this paragraph, the Fiscal Agent notify the City in writing within five (5) business days after (i) the occurrence of the event giving rise to the unavoidable delay, (ii) the Fiscal Agent's actual knowledge of the impending unavoidable delay, or (iii) the Fiscal Agent's knowledge of sufficient facts under which a reasonable person would conclude the unavoidable delay will occur. Section 7.3. Information. The Fiscal Agent shall provide to the City such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the City shall reasonably request, including but not limited to quarterly statements reporting funds held and transactions by the Fiscal Agent. Section 7.4. Reliance by Fiscal Agent. The Fiscal Agent may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, written direction, report, warrant, Bond, facsimile transmission, electronic mail or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Fiscal Agent may consult with counsel, who may be counsel to the City, selected by it in good faith with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by the Fiscal Agent hereunder in accordance therewith. Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed to be conclusively proved and established by a certificate of the City, and such certificate shall be full warranty to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 7.5. Compensation; Indemnification. The City shall pay to the Fiscal Agent from time to time reasonable compensation for all services rendered as Fiscal Agent under this Agreement, and also all reasonable expenses, charges, fees and other disbursements, including those of its attorneys (including the allocated costs and disbursements of in-house counsel), agents and employees, incurred in and about the performance of its powers and duties under this Agreement, and the Fiscal Agent shall have a lien therefor on any funds at any time held by it under this Agreement. The City further agrees, to the extent permitted by applicable law, to indemnify and save the Fiscal Agent, its officers, employees, directors and agents, harmless against any costs, claims, expenses or liabilities, including, without limitation fees and expenses of its attorneys, which it may incur in the exercise and performance of its powers and duties hereunder 31 which are not due to its negligence or willful misconduct. The obligation of the City under this Section 7.5 shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and discharge of this Agreement. Section 7.6. Books and Accounts. The Fiscal Agent shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shall be made of all transactions made by it with respect to the expenditure of amounts disbursed from the Redemption Fund, the Reassessment Fund and the Reserve Fund. Such books of record and accounts shall, upon reasonable notice, at all times during business hours be subject to the inspection of the City and the Owners of not less than ten percent (10%) of the aggregate principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing. ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT Section 8.1. Amendments Permitted. (a) This Agreement and the rights and obligations of the City and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of the Owners, or with the written consent, without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 8.4 hereof. No such modification or amendment shall (i) extend the maturity of any Bond or the time for paying interest thereon, or otherwise alter or impair the obligation of the City to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation of any pledge of or lien upon the Reassessment Revenues, or the moneys on deposit in the Redemption Fund, superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the 1915 Act or the 1984 Refunding Act, the laws of the State or this Agreement), (iii) reduce the percentage of Bonds required for the amendment hereof, (iv) reduce the principal amount of or redemption premium on any Bond or reduce the interest rate thereon, or (v) modify the rights or obligations of the Fiscal Agent without its prior consent. (b) This Agreement and the rights and obligations of the City and the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes: (i) to add to the covenants and agreements of the City in this Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the City; (ii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provisions of this Agreement, or in regard to questions arising under this Agreement, as the City and the Fiscal Agent may deem necessary or 32 desirable and not inconsistent with this Agreement, and which shall not be materially adverse to the interests of the Owners of the Bonds; or (iii) to make such additions, deletions or modifications as may be necessary or desirable to assure compliance with Section 148 of the Code relating to required rebate of moneys to the United States or otherwise as may be necessary to assure exclusion from gross income for federal income tax purposes of interest on the Bonds or to conform with the Code. (iv) to modify, amend or supplement this Agreement in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect; and (v) to make other modifications not adversely affecting any Outstanding Bonds in any material respect. Section 8.2. Owners' Meetings. The City may at any time call a meeting of the Owners. In such event the City is authorized to fix the time and place of any such meeting and to provide for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of the meeting. Section 8.3. Procedure for Amendment with Written Consent of Owners. To the extent that such amendment is permitted by Section 8.1(a) and Section 8.9 hereof, the City may at any time enter into a Supplemental Agreement amending the provisions of the Bonds or of this Agreement or any Supplemental Agreement, to take effect when and as provided in this Section 8.3. A copy of the Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, postage prepaid, by the City to each Owner of Bonds then Outstanding, but failure to mail copies of the Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided. Such a Supplemental Agreement shall not become effective unless there shall be filed with the City the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in Section 8.4 hereof) and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 9.4 hereof. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the City prior to the date when the notice hereinafter in this Section provided for has been mailed. After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the City shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the 33 mailing of such notice shall be filed with the City. A record, consisting of the papers required by this Section 8.3 to be filed with the City, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the City of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the City and the Owners of all Bonds then Outstanding at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty (60) day period. Section 8.4. Disqualified Bonds. Bonds owned or held for the account of the City, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or participate in any action provided for in this Article VIII. Section 8.5. Effect of Supplemental Agreement. From and after the time any Supplemental Agreement becomes effective pursuant to this Article VIII, this Agreement shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Agreement of the City and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes. Section 8.6. Endorsement of Replacement of Bonds Issued after Amendments. The City may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form approved by the City, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and upon presentation of his or her Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the Fiscal Agent may select and designate for that purpose, a suitable notation shall be made on such Bond. The City may determine that new Bonds, so modified as in the opinion of the City is necessary to conform to such action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for like Bonds then Outstanding, upon surrender of such Bonds. Section 8.7. Amendatory Endorsement of Bonds. The provisions of this Article shall not prevent any Owner from accepting any amendment as to the particular Bonds held by the Owner, provided that due notation thereof is made on such Bonds. Section 8.8. Consent of Fiscal Agent. The Fiscal Agent shall not be required to enter into or consent to any Supplemental Agreement which, in the sole judgment of the Fiscal Agent, might adversely affect the rights, obligations, powers, privileges, indemnities, and immunities provided to the Fiscal Agent herein. The Fiscal Agent upon request, shall be provided an opinion of counsel that any such Supplemental Agreement complies with the provisions of this Article VIII and the Fiscal Agent may conclusively rely upon such opinion. 34 ARTICLE IX MISCELLANEOUS Section 9.1. Benefits of Agreement Limited to Parties. Nothing in this Agreement, expressed or implied, is intended to give to any person other than the City, the Fiscal Agent, and the Owners, any right, remedy or claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent. Section 9.2. Successors Deemed Included in All References to Predecessor. Whenever in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Agreement contained by or on behalf of the City or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 9.3. Discharge of Agreement. If the City shall pay and discharge the entire indebtedness on all Bonds in any one or more of the following ways: (A) by well and truly paying or causing to be paid the principal of and interest and any premium on all Bonds, as and when the same become due and payable; (B) by depositing with the Fiscal Agent, in trust, at or before maturity, an amount of money which, together with the amounts then on deposit in the Redemption Fund, the Reassessment Fund and the Reserve Fund, is fully sufficient to pay all Bonds, including all principal, interest and redemption premiums, if any; or (C) by irrevocably depositing with the Fiscal Agent or another fiduciary, in trust, cash or noncallable Federal Securities in such amount as the City shall determine, as confirmed by an Independent Financial Consultant, will, together with the interest to accrue thereon and amounts then on deposit in the Redemption Fund, the Reassessment Fund and the Reserve Fund, be fully sufficient to pay and discharge the indebtedness on all Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates; and if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Reassessment Revenues and other funds provided for in this Agreement and all other obligations of the City under this Agreement with respect to all Bonds shall cease and terminate, except the obligation of the City to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, the obligation of the City to pay all amounts owing to the Fiscal Agent pursuant to Section 7.5 hereof, and the obligations of the City pursuant to the covenants contained in Section 5.8 hereof, and thereafter Reassessment Revenues shall not be payable to the Fiscal Agent. Notice of such election shall be filed with the Fiscal Agent. The satisfaction and discharge of this Agreement shall be without 35 prejudice to the rights of the Fiscal Agent to charge and be reimbursed by the City for the expenses which it shall thereafter incur in connection herewith. Any funds held by the Fiscal Agent to pay and discharge the indebtedness on all Bonds, upon payment of all fees and expenses of the Fiscal Agent, which are not required for such purpose, shall be paid over to the City. Section 9.4. Execution of Documents and Proof of Ownership by Owners. Any request, declaration or other instrument which this Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his or her attorney of such a request, declaration or other instrument, or of a writing appointing such an attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he or she purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him or her the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such a notary public or other officer. Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the Registration Books. Any request, declaration, consent or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Fiscal Agent in accordance therewith. Section 9.5. Waiver of Personal Liability. No member, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds- but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law. Section 9.6. Notices. Any notice, request, complaint, demand or other communication under this Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, by overnight mail, or by facsimile or other form of telecommunication, confirmed by telephone at its number set forth below. Notice shall be effective either (i) upon transmission by facsimile or other form of telecommunication (provided that receipt is confirmed), (ii) 48 hours after deposit in the United States mail, postage prepaid, (iii) in the case of overnight mail, upon delivery to the addressed destination, or (iv) in the case of personal delivery to any person, upon actual receipt. If to the City: City of Palm Desert 73-510 Fred Waring Drive Palm Desert, California 92260 Attention: Finance Director Facsimile: (760) 340-0574 Telephone: (760) 346-0611 36 If to the Fiscal Agent: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: Global Corporate Trust Facsimile: (213) 615-6199 Telephone: (213) 615-6062 The above parties may designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. The Fiscal Agent agrees to accept and act upon facsimile transmission of written instructions and/or directions pursuant to this Agreement; provided, however, that: (a) such originally executed instructions and/or directions by the City shall be signed by an Authorized Officer, and (b) the City shall provide to the Fiscal Agent an incumbency certificate listing such designated persons and the City shall from time to time provide the Fiscal Agent updated incumbency certificates, as necessary or appropriate, reflecting persons who have been added or deleted from the listing. Section 9.7. Severability . If any section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held by a court of competent jurisdiction to be illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement. The City hereby declares that it would have executed and delivered this Agreement and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable. Section 9.8. Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any moneys held by the Fiscal Agent for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when the payment of such principal, interest and premium have become payable, if such moneys were held by the Fiscal Agent at such date, shall be repaid by the Fiscal Agent to the City as its absolute property free from any trust, and the Fiscal Agent shall have no responsibility or liability for such moneys. Section 9.9. Destruction of Cancelled Bonds. Whenever in this Agreement provision is made for the surrender to the Fiscal Agent of any Bonds which have been paid or cancelled pursuant to the provisions of this Agreement, the Fiscal Agent shall, as permitted by law, destroy such cancelled Bonds and provide to the City a certificate of destruction duly executed by the Fiscal Agent, and the City shall be entitled to rely upon any statement of fact contained in such certificate with respect to the destruction of any such Bonds therein referred to; provided, however, the City shall reimburse the Fiscal Agent for the Fiscal Agent's costs incurred in connection with the microfilming or the required permanent recording, if any, related thereto. 37 Section 9.10. Applicable Law. This Agreement shall be governed by and enforced in accordance with the laws of the State applicable to contracts made and performed in the State of California. Section 9.11. Conflict with 1915 Act or 1984 Refunding Act. In the event of a conflict between any provision of this Agreement with any provision of the 1915 Act or the 1984 Refunding Act as in effect on the Closing Date, the provision of the 1915 Act or the 1984 Refunding Act, as applicable, shall prevail over the conflicting provision of this Agreement. Section 9.12. Conclusive Evidence of Regularity. Bonds issued pursuant to this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the 1984 Refunding Act relative to their issuance. Section 9.13. Payment on Business Day. In any case where the date of the payment of interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption is other than a Business Day, the payment of interest or principal (and premium, if any) need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required, and no interest shall accrue for the period from and after such date. Section 9.14. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. [Remainder of Page Is Intentionally Left Blank; Signature Page Follows] 38 IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its name and attested, and the Fiscal Agent, in acknowledgment of its acceptance of the duties created hereunder, has caused this Agreement to be executed in its name, all as the date first written above. ATTEST: By: City Clerk CITY OF PALM DESERT By: Mayor U.S. BANK NATIONAL ASSOCIATION, as Fiscal Agent By: Authorized Officer 39 EXHIBIT A FORM OF BOND Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the City or the Fiscal Agent for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE REGISTERED NO. R- $ .00 CITY OF PALM DESERT SECTION 29 ASSESSMENT DISTRICT (NO. 2004-02) LIMITED OBLIGATION REFUNDING IMPROVEMENT BOND SERIES 2021 INTEREST RATE % MATURITY DATE BOND DATE CUSIP September 2, 20 July , 2021 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS Under and by virtue of the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division 11.5 of the California Street and Highways Code (the "1984 Refunding Act") the City of Palm Desert, County of Riverside, California (the "City"), will, out of the Redemption Fund for the payment of the Bonds issued upon the unpaid reassessments made for the refunding and reassessment more fully described in proceedings taken pursuant to Resolution No. , adopted by the City Council of the City on [June 10, 2021] (the "Resolution of Intention"), pay to the registered owner hereof, or registered assigns, on the maturity date stated above, the principal sum shown hereon in lawful money of the United States of America and in like manner will pay interest at the rate per annum stated above, payable semiannually on March 2 and September 2 (each an "Interest Payment Date") in each year commencing on March 2, 2022. This Bond bears interest from the Interest Payment Date next preceding its date of authentication and registration, unless this Bond is authenticated and registered (i) on an Interest Payment Date, in which event interest shall be payable from such date of authentication and registration, (ii) prior to an Interest Payment Date and after the close of business on the fifteenth (15th) day of the month immediately preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, A-1 or (iii) prior to the close of business on the 15th day of the month immediately preceding the first Interest Payment Date, in which event it shall bear interest from the Bond Date stated above, until payment of such principal sum shall have been discharged; provided, however, that if at the time of authentication of such Bond, interest is in default, interest on that Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment. Both the principal hereof and redemption premium hereon are payable upon presentation and surrender hereof at the corporate trust office of U.S. Bank National Association, or its successor, as Fiscal Agent (the "Fiscal Agent"), in Los Angeles, California, or such other place as may be designated by the Fiscal Agent and the interest hereon is payable by check mailed, by first-class mail, to the owner hereof at such owner's address as it appears on the registration books of the Fiscal Agent of the fifteenth (15th) day of the month immediately preceding each Interest Payment Date, or by wire transfer made on the Interest Payment Date upon instructions of any owner of $1,000,000 or more in aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the fifteenth (15th) day of the month immediately preceding the Interest Payment Date. This Bond will continue to bear interest after maturity at the rate above stated, provided that it is presented at maturity and payment thereof is refused upon the sole ground that there are not sufficient moneys in the Redemption Fund with which to pay same. If it is not presented at maturity interest hereon will run only until maturity. This Bond is one of several annual series of bonds of like date, tenor and effect, but differing in amounts, maturities and interest rates, issued by the City of Palm Desert under the 1984 Refunding Act, Resolution No. of the City Council of the City, adopted on [June 10, 2021] (the "Resolution of Issuance") and a Fiscal Agent Agreement dated as of [July 1, 2021] (the "Fiscal Agent Agreement") by and between the City and the Fiscal Agent in the aggregate principal amount of $ ( Dollars) for the purpose of providing means for the refunding and reassessment described in the proceedings, and is secured by the moneys in the Redemption Fund and by the unpaid reassessments made for the payment of the refunding and reassessment, and, including principal and interest, is payable exclusively out of the Redemption Fund and certain other funds and accounts as provided in the Fiscal Agent Agreement. The City will not obligate itself to advance available funds from the City Treasury to cure any deficiency which may occur in the Redemption Fund. If this Bond matures on September 2, 20_ or September 2, 20_, it is subject to mandatory sinking fund redemption by lot, at a redemption price equal to the principal amount thereof to be redeemed, without premium, on September 2 of each year (commencing September 2, 20_ or September 2, 20_, respectively) in the aggregate respective principal amounts set forth in the Fiscal Agent Agreement, by giving at least 30 days' notice by registered or certified mail, postage prepaid, or by personal service to the registered owners thereof at the owners' address as they appear on the registration books of the Fiscal Agency; provided, however, in lieu of redemption thereof such Bonds may be purchased by the City pursuant to the Fiscal Agent Agreement. In addition, this Bond or any portion of it in the amount of five thousand dollars ($5,000), or any integral multiple thereof, is subject to mandatory redemption from the prepayment of Reassessments or surplus amounts in the Reserve Fund as provided in the Fiscal Agent Agreement and may be redeemed and paid in advance of maturity upon March 2 or September 2 in any year by giving at least 30 days' notice by registered or certified mail, postage prepaid, or by personal A-2 service to the registered owner hereof at the registered owner's address as it appears on the registration books of the Fiscal Agent at the following redemption prices expressed as percentages of the principal amount of the Bonds to be redeemed together with interest accrued to the date of redemption: Redemption Dates Redemption Prices Prior to September 2, 2026 103% September 2, 2026 and March 2, 2027 102 September 2, 2027 and March 2, 2028 101 September 2, 2028 and thereafter 100 This Bond or any portion of it in the amount of five thousand dollars ($5,000), or any integral multiple thereof, also may be redeemed at the option of the City from moneys derived by the City from any source and paid in advance of maturity upon March 2 or September 2 in any year by giving at least 30 days' notice by registered or certified mail, postage prepaid, or by personal service to the registered owner hereof at the registered owner's address as it appears on the registration books of the Fiscal Agent at the following redemption prices expressed as percentages of the principal amount of the Bonds to be redeemed together with interest accrued to the date of redemption: Redemption Dates Redemption Prices Prior to September 2, 2028 103% [September 2, 2028 and March 2, 2029 102] [September 2, 2029 and March 2, 2030 101] [September 2, 2030 and thereafter 100] This Bond is subject to refunding pursuant to the procedure of Division 11 (commencing with Section 9000) or Division 11.5 (commencing with Section 9500) of the Streets and Highways Code of the State of California prior to maturity. This Bond, or any portion hereof which is equal to $100,000 or greater in any integral multiple of $5,000 in principal amount (unless due to prior redemption in part, this Bond is Outstanding in a principal amount of less than $100,000, then in an integral multiple of $5,000 of less than $100,000), is transferable by the registered owner hereof, in person or by the owner's attorney duly authorized in writing, at the office of the Fiscal Agent, subject to the terms and conditions provided in the Fiscal Agent Agreement including the payment of certain charges, if any, upon surrender and cancellation of this Bond. Upon transfer, a new registered Bond or Bonds, of any authorized denomination or denominations, of the same maturity, and for the same aggregate principal amount, will be issued to the transferee in exchange therefor. Bonds shall be registered only in the name of an individual (including joint owners), a corporation, a partnership or a trust. Neither the City nor the Fiscal Agent shall be required to exchange or to register the transfer of Bonds during the fifteen days immediately preceding any interest payment date or of any Bonds selected for redemption in advance of maturity. A-3 The City and the Fiscal Agent may treat the owner hereof as the absolute owner for all purposes, and the City and the Fiscal Agent shall not be affected by any notice to the contrary. This Bond shall not be entitled to any benefit under the 1984 Refunding Act, the Resolution of Issuance or the Fiscal Agent Agreement, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and manually signed by the Fiscal Agent. IN WITNESS WHEREOF, the City of Palm Desert has caused the Bond to be signed and attested by the facsimile signatures of the City Treasurer and the City Clerk, all on the Bond Date above. CITY OF PALM DESERT By Attest: City Clerk Treasurer CERTIFICATE OF AUTHENTICATION AND REGISTRATION This is one of the Bonds described in the within mentioned Fiscal Agent Agreement which has been authenticated and registered on July _, 2021. U.S. BANK NATIONAL ASSOCIATION, as Fiscal Agent By: Authorized Signatory A-4 ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto the within -mentioned Bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the books kept for registration hereof with full power of substitution in the premises. Dated: , 20 NOTICE: The signature to this assignment must correspond with the name as it appears upon the within Bond in every particular, without alteration or enlargement or any change whatsoever. A-5