CITY OF SAN CLEMENTE

COMMUNITY FACILITIES DISTRICT NO. 99-1

2011 SPECIAL TAX REFUNDING BONDS

$5,005,000 Orange County, California Dated: August 25, 2011 Base CUSIP+: 797214

2014/2015 ANNUAL CONTINUING DISCLOSURE INFORMATION STATEMENT

AS OF DECEMBER 23, 2015

27368 Via Industria Suite 200 Temecula, CA 92590 T 951.587.3500 | 800.755.6864 F 951.587.3510 www.willdan.com/financial

LIST OF PARTICIPANTS

CITY OF SAN CLEMENTE HTTP://WWW.SAN-CLEMENTE.ORG

James Makshanoff City Manager

100 Avenida Presidio San Clemente, CA 92672

DISTRICT ADMINISTRATION DISCLOSURE CONSULTANT & DISSEMINATION AGENT

Willdan Financial Services* Temecula, California 92590

(951) 587-3500 www.willdan.com/financial

UNDERWRITER Piper Jaffray

FINANCIAL ADVISOR Fieldman, Rolapp & Associates

19990 MacArthur Boulevard, Suite 500 Irvine, California 92612

(949) 660-8500

BOND COUNSEL Rutan & Tucker, LLP

Costa Mesa, CA

FISCAL AGENT /ESCROW AGENT Fe Tuzon

The Bank of New York Mellon Trust Company, N.A. Los Angeles, California

(213) 630-6240

* In its role as Disclosure Consultant and Dissemination Agent, Willdan Financial Services has not passed upon the accuracy, completeness or fairness of the statements contained herein.

2014/15 City of San Clemente CFD 99-1 Page 1 of 8

I. INTRODUCTION

Pursuant to an Official Statement dated July 29, 2011, the City of San Clemente (the “City”) issued $5,005,000 Community Facilities District No. 99-1, 2011 Special Tax Refunding Bonds (the “Bonds”). The Bonds were issued for the principal purpose of refunding the District’s outstanding 1999 Special Tax Bonds. The 1999 Special Tax Bonds were issued to acquire various public improvements needed to serve property located within the District. The City of San Clemente is located in the southernmost part of Orange County on the San Diego Freeway (I-5) at the midpoint between Los Angeles and San Diego. It encompasses an area of 18.45 square miles of coastline and foothills. Community Facilities District No. 99-1 (the “District”) is generally located along the northerly side of Avenida Pico, in the vicinity of Camino Vera Cruz and Avenida la Pata. A retail center known as Plaza Pacifica comprises the majority of the area within the District. The taxable land areas within the District, subject to Special Tax, are 44.908 acres. The Bonds are Special Obligation Bonds of the District and are payable solely from revenues derived from certain annual Special Taxes and from certain other funds pledged under the Fiscal Agent Agreement. The Bonds are not a debt of the City, the State of California, or any of its political subdivisions and neither the City, the State of California, nor any of its political subdivisions is liable. The Bonds do not constitute indebtedness within the meaning of any constitutional or statutory debt limit or restriction. This Annual Continuing Disclosure Information Statement is being provided pursuant to a covenant made by the City for the benefit of the holders of the Bonds and includes the information specified in a Continuing Disclosure Certificate. For further information and a more complete description of the City, District, and the Bonds, reference is made to the Official Statement. The information set forth herein has been furnished by the City and by sources, which are believed to be accurate and reliable but is not guaranteed as to accuracy or completeness. Statements contained in this Annual Continuing Disclosure Information Statement which involve estimates, forecasts, or other matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. Further, the information and expressions of opinion contained herein are subject to change without notice and the delivery of this Annual Continuing Disclosure Information Statement will not, under any circumstances, create any implication that there has been no change in the affairs of the City or any other parties described herein.

2014/15 City of San Clemente CFD 99-1 Page 2 of 8

THIS REPORT IS OF A FACTUAL NATURE WITHOUT SUBJECTIVE ASSUMPTIONS, OPINIONS, OR VIEWS AND MAY NOT BE RELIED UPON AS ADVICE OR RECOMMENDATION TO PURCHASE OR SELL ANY PRODUCT OR UTILIZE ANY PARTICULAR STRATEGY RELATING TO THE ISSUANCE OF MUNICIPAL SECURITIES OR PURCHASE OF FINANCIAL PRODUCTS. WILLDAN FINANCIAL SERVICES AND ITS EMPLOYEES (COLLECTIVELY "WILLDAN") DO NOT RECOMMEND ANY ACTIONS AND ARE NOT ACTING AS AN ADVISOR TO ANY MUNICIPAL ENTITY, BOARD, OFFICER, AGENT, EMPLOYEE OR OBLIGATED PERSON PURSUANT TO SECTION 15B OF THE EXCHANGE ACT. PRIOR TO ACTING ON ANY INFORMATION OR MATERIAL CONTAINED IN THIS COMMUNICATION, YOU SHOULD DISCUSS IT WITH APPROPRIATE INTERNAL OR EXTERNAL ADVISORS AND EXPERTS AND ONLY RELY UPON THEIR ADVICE.

2014/15 City of San Clemente CFD 99-1 Page 3 of 8

II. BOND INFORMATION

A. PRINCIPAL OUTSTANDING

Bond Issue As of June 30, 2015

Community Facilities District No. 99-1 $4,500,000 2011 Special Tax Refunding Bonds

B. FUND BALANCES

Fund As of June 30, 2015

Reserve Fund $503,655 Reserve Requirement(1) $422,581 Costs of Issuance Fund $46,860 Bond Fund $0 Special Tax Fund $0 Administrative Expense Fund(2) $0

(1) The Reserve Requirement is an amount equal to the lesser of (i) ten percent (10%) of the initial principal amount of the Bonds, (ii) the then Maximum Annual Debt Service on the Bonds, or (iii) 125 percent of the average Annual Debt Service on the Bonds. (2) The Administrative Expense Fund is closed.

2014/15 City of San Clemente CFD 99-1 Page 4 of 8

III. FINANCIAL INFORMATION

THE CITY’S ANNUAL FINANCIAL STATEMENT IS PROVIDED SOLELY TO COMPLY WITH THE SECURITIES EXCHANGE COMMISSION STAFF’S INTERPRETATION OF RULE 15C2-12. NO FUNDS OR ASSETS OF THE CITY ARE REQUIRED TO BE USED TO PAY DEBT SERVICE ON THE BONDS AND THE CITY IS NOT OBLIGATED TO ADVANCE AVAILABLE FUNDS FROM THE CITY TREASURY TO COVER ANY DELINQUENCIES. INVESTORS SHOULD NOT RELY ON THE FINANCIAL CONDITION OF THE CITY IN EVALUATING WHETHER TO BUY, HOLD OR SELL THE BONDS. The audited financial statements for the City for the fiscal year ended June 30, 2015 will be separately filed with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access website (“EMMA”) and are hereby incorporated by reference into this Annual Continuing Disclosure Information Statement. Neither the audited nor the unaudited financial statements were available at the time of this report. The audited financial statements for the City for the fiscal year ended June 30, 2015 are expected to be filed by January 31, 2016.

2014/15 City of San Clemente CFD 99-1 Page 5 of 8

IV. OPERATING INFORMATION

C. DEBT SERVICE COVERAGE The following table illustrates the estimated aggregate coverage for debt service on the Bonds by comparing the aggregate maximum Special Tax generating ability of the District to the estimated debt service on the Bonds, assuming that developable land within the District with unpaid Special Taxes remains classified as Taxable Property. The Special Tax will not generally be levied at the maximum rate except where prior delinquencies require that the Special Tax be increased to replenish the Reserve Fund. Even if the Special Taxes were levied at the maximum rate in any year, actual collections will depend upon the willingness and ability of the owners of property to pay the Special Taxes when due.

Estimated Debt Service Coverage

Bond Year Ending

September 1 Estimated

Debt Service(1) Maximum Special

Taxes(2) Coverage(3) 2015 405,781.26 559,141.01 137.79% 2016 414,931.26 570,323.83 137.45% 2017 418,631.26 581,730.30 138.96% 2018 421,206.26 593,364.91 140.87% 2019 422,581.26 605,232.21 143.22% 2020 417,681.26 617,336.85 147.80% 2021 411,962.50 629,683.59 152.85% 2022 410,712.50 642,277.26 156.38% 2023 413,362.50 655,122.81 158.49% 2024 414,612.50 668,225.26 161.17% 2025 415,112.50 681,589.77 164.19% 2026 419,862.50 695,221.56 165.58% 2027 413,206.26 709,126.00 171.62% 2028 415,200.00 723,308.52 174.21% 2029 416,118.76 737,774.69 177.30% 2030 410,962.50 752,530.18 183.11%

(1) Includes Sinking Fund Payments and assumes no further prepayments of Special Taxes. (2) Assumes no further prepayments of Special Taxes. (3) Maximum Special Taxes divided by Debt Service expressed as a percentage. Source: Page 15 of the Official Statement dated July 29, 2011.

2014/15 City of San Clemente CFD 99-1 Page 6 of 8

D. PARCEL INFORMATION Assessor's Special

Tax Levy FY

2014/15

Special Tax Levy

FY 2015/16

Pro Rata Share of Bonds (1)

Property Owner

Existing Taxable Acreage

FY 2015/16 Assessed

Value(3)

Value-to Parcel Land Lien

Number Use(2) Ratio

688-021-14 $8,053 $8,042 $87,195 Wiles Restaurants Inc. Restaurant – Carl’s Jr. 0.805 1,657,451 19.01

688-021-16 5,302 5,295 57,408 Armstrong, Richard B. Restaurant – Taco Bell 0.53 1,329,065 23.15

688-021-17 5,662 5,655 61,307 S R H Management Inc. Restaurant – El Pollo Loco 0.566 1,379,084 22.49

688-021-18 7,423 7,413 80,371 Bank of America Commercial – Bank 0.742 2,591,660 32.25

688-021-28 115,815 115,658 1,253,978 Lowes HIW Inc. Industrial – Home Impvt. 11.577 12,842,653 10.24

688-021-30 22,789 22,758 246,745 The Shim Family Foundation Commercial –Michael’s 2.278 6,833,866 27.70

688-021-31 21,488 21,459 232,663 Mosich & Family Trust Commercial – Strip Retail 2.148 6,306,958 27.11

688-021-32 15,426 15,405 167,024 Mobil Oil Corp Commercial – Gas Station 1.542 2,021,340 12.10

688-021-33 9,294 9,281 100,626 Chiuminatta, Edward R. Commercial – Tire Center 0.929 2,966,099 29.48

688-021-34 6,843 6,833 74,088 Novogroder/San Clemente LLC Restaurant – IHOP 0.684 1,331,622 17.97

688-131-20 20,308 20,280 219,882 Huang, Stephen C Commercial – Office Depot 2.03 6,861,441 31.21

688-131-21 63,025 62,939 682,393 ABS CA-GL LLC Commercial – Grocery 6.3 15,000,809 21.98

688-131-22 26,010 25,975 281,622 45 Plaza Assoc LLC Commercial – Strip Retail 2.6 12,035,764 42.74

688-131-23 8,603 8,592 93,152 Golden Lantern Management Co. LLC Commercial – Strip Retail 0.86 2,602,422 27.94

688-132-02 4,132 4,126 44,735 Mamo Properties Inc. Commercial – Office 0.413 1,152,686 25.77

688-132-03 19,418 19,391 210,242 Courtyards at TELEGA LLC Commercial – Strip Retail 1.941 8,000,000 38.05

688-141-01 56,022 55,946 606,571 Metro ALP LLC(4) Commercial – Office 5.6 13,579,637 22.39

Total $415,612 $415,048 $4,500,000 41.545 98,492,557 21.89

(1) Calculated by each parcel’s pro-rata share of the total Special Tax Levy times the total Outstanding Bonds. (2) Source: Orange County 2015/16 Secured Property Roll, as compiled by Willdan Financial Services. (3) Source: Assessed Value-Orange County 2015/16 Secured Property Roll, as compiled by Willdan Financial Services. (4) A portion of the Special Tax Lien was prepaid prior to the issuance of bonds. Therefore, the Special Tax Rate per acre is less for this parcel.

2014/15 City of San Clemente CFD 99-1 Page 7 of 8

E. HISTORY OF ASSESSED VALUATIONS The following table shows the history of the assessed valuations of the 17 parcels that comprise the Taxable Property for Fiscal Years 2007/08 through 2015/16.

Assessor Parcel Number

Owner Fiscal Year 2007/08

Fiscal Year 2008/09

Fiscal Year 2009/10

Fiscal Year 2010/11

Fiscal Year 2011/12

Fiscal Year 2012/13

Fiscal Year 2013/14

Fiscal Year 2014/15

Fiscal Year 2015/16

688-021-14 Wiles Restaurants Inc. $1,486,807 $1,516,543 $1,546,873 $1,543,206 $1,554,826 $1,585,922 $1,617,640 $1,624,984 $1,657,451 688-021-16 Armstrong, Richard B. 1,192,231 1,216,075 1,240,396 1,237,455 1,246,773 1,271,708 1,297,142 1,303,031 1,329,065 688-021-17 S R H Management Inc. 1,237,102 1,261,844 1,287,080 1,284,028 1,293,696 1,319,569 1,345,960 1,352,070 1,379,084 688-021-18 Bank of America 2,324,833 2,371,329 2,418,755 2,413,021 2,184,000 2,227,680 2,272,233 2,282,548 2,591,660 688-021-28 Lowes HIW Inc. 11,520,407 11,750,815 11,985,831 11,957,423 12,047,462 12,288,411 12,534,179 12,591,084 12,842,653 688-021-30 The Shim Family Foundation 4,624,605 4,717,097 4,811,438 4,800,034 4,836,178 4,932,901 5,031,559 6,700,000 6,833,866 688-021-31 Mosich & Family Trust 5,626,241 5,738,765 5,886,180 5,872,229 5,916,446 6,034,774 6,155,469 6,183,414 6,306,958 688-021-32 Mobil Oil Corp 1,813,232 1,849,496 1,886,485 1,882,013 1,896,184 1,934,107 1,972,789 1,981,745 2,021,340 688-021-33 Chiuminatta, Edward R. 2,660,721 2,713,935 2,768,213 2,761,652 2,782,447 2,838,095 2,894,856 2,907,998 2,966,099 688-021-34 Novogroder/San Clemente LLC 1,194,526 1,218,416 1,242,784 1,239,837 1,249,172 1,274,155 1,299,638 1,305,538 1,331,622 688-131-20 Huang, Stephen C 6,155,006 6,278,106 6,403,668 6,388,490 6,436,595 6,565,326 6,696,632 6,727,034 6,861,441 688-131-21 ABS CA-GL LLC 15,138,840 14,650,000 14,000,000 13,966,820 14,071,990 14,353,429 14,640,497 14,706,964 15,000,809 688-131-22 45 Plaza Assoc LLC 11,325,378 11,551,885 11,250,000 9,428,000 8,912,000 9,090,240 9,272,044 11,800,000 12,035,764 688-131-23 Golden Lantern Mgmt. Co. LLC 2,334,487 2,381,176 2,428,799 2,230,000 2,246,791 2,291,726 2,337,560 2,551,445 2,602,422 688-132-02 Mamo Properties Inc. 1,315,897 1,342,214 1,369,058 1,365,812 1,376,096 1,403,617 1,125,000 1,130,107 1,152,686 688-132-03 Courtyards at TELEGA LLC 10,921,078 11,139,499 9,047,000 7,000,000 6,550,000 6,681,000 6,814,620 6,845,558 8,000,000 688-141-01 Metro ALP LLC 7,231,588 7,376,219 7,523,743 7,505,910 7,562,429 7,764,721 7,920,015 11,313,631 13,579,637

Totals: $88,102,979 $89,073,414 $87,096,303 $82,875,930 $82,163,085 $83,857,381 $85,227,833 $93,307,151 $98,492,557

Source: Official Statement for San Clemente CFD 99-1 dated July 29, 2011, and Orange County 2015/16 Secured Property Roll, as compiled by Willdan Financial Services.

2014/15 City of San Clemente CFD 99-1 Page 8 of 8

F. DELINQUENCY STATUS The following table lists the Special Tax history for the last five (5) years and a summary of the delinquencies within the District. Currently there are no delinquencies.

Fiscal Year

Number of

Parcels

Number of Parcels

Delinquent

Annual Special

Tax

Delinquent Special Tax(1)

Percent Delinquent

2010/11 17 0 $434,141 $0 0.00% 2011/12 17 0 $396,677 $0 0.00% 2012/13 17 0 $404,583 $0 0.00% 2013/14 17 0 $407,014 $0 0.00% 2014/15 17 0 $415,612 $0 0.00%

(1) Amount delinquent, as of September 15, 2015. Source: Orange County Tax Collector’s Office, as compiled by Willdan Financial Services.

G. RATE AND METHOD OF APPORTIONMENT There have not been any changes to the Rate and Method of Apportionment of the Special Tax approved or submitted to the qualified electors for approval since the issuance of the Bonds.

H. FORECLOSURE There are no delinquencies; therefore, no foreclosure actions have been initiated.

I. CDIAC REPORTING The Annual Report to the California Debt and Investment Advisory Commission (CDIAC) for Fiscal Year 2014/2015 is attached.