jurupa6 2014 posg - californiacdiacdocs.sto.ca.gov/2014-1943.pdf · special tax bonds, 2014 series...

NEW ISSUE– BOOK-ENTRY ONLY Not Rated

In the opinion of Nixon Peabody LLP, Bond Counsel, under existing law and assuming compliance with the tax covenants described herein and the accuracy of certain representations and certifications made by the Community Facilities District and the School District (defined below) described herein, interest on the 2014 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”). Bond Counsel is also of the opinion that such interest is not treated as a preference item in calculating the alternative minimum tax imposed under the Code with respect to individuals and corporations. Bond Counsel is further of the opinion that interest on the 2014 Bonds is exempt from personal income taxes of the State of California (the “State”) under present State law. See “TAX MATTERS” herein regarding certain other tax considerations.

$2,100,000

JURUPA UNIFIED SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 6

(ZONE 1) SPECIAL TAX BONDS, 2014 SERIES A

Dated: Date of Delivery Due: September 1, as shown on inside cover

The Jurupa Unified School District Community Facilities District No. 6 (Zone 1) Special Tax Bonds, 2014 Series A (the “2014 Bonds”) are being issued under the Mello-Roos Community Facilities Act of 1982 (the “Act”) and the Fiscal Agent Agreement, dated as of December 1, 2014 (the “Fiscal Agent Agreement”), by and between Community Facilities District No. 6 of the Jurupa Unified School District (the “Community Facilities District”), and Zions First National Bank, as fiscal agent (the “Fiscal Agent”).

The 2014 Bonds are payable from proceeds of Special Taxes (as defined herein) levied on the property within Zone 1 of the Community Facilities District (“Zone 1”) pursuant to the Rate and Method of Apportionment of Community Facilities District No. 6 of the Jurupa Unified School District (the “Rate and Method”), approved by the qualified electors of the Community Facilities District and by the Board of Education of the Jurupa Unified School District (the “School District”), acting as the Legislative Body of the Community Facilities District (the “Board of Education”).

The 2014 Bonds are being issued (i) to finance, either directly or indirectly, the acquisition and construction of certain School District facilities, certain water and sewer facilities of the Jurupa Community Services District and certain park and recreational facilities of the Jurupa Area Recreation and Park District (collectively, the Project”), (ii) to fund the deposit to the Reserve Fund to the Reserve Requirement applicable to the 2014 Bonds and (iii) to pay costs of issuing the 2014 Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS” and “INFRASTRUCTURE IMPROVEMENTS TO BE FINANCED WITH PROCEEDS OF THE 2014 BONDS” herein.

Interest on the 2014 Bonds is payable on March 1, 2015, and semiannually thereafter on each September 1 and March 1. The 2014 Bonds will be issued in denominations of $5,000 or integral multiples thereof. The 2014 Bonds, when delivered, will be initially registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). DTC will act as securities depository for the 2014 Bonds as described herein under “THE 2014 BONDS – Book-Entry and DTC.”

The 2014 Bonds are subject to optional redemption, mandatory redemption from prepayment of Special Taxes and mandatory sinking fund redemption as described herein.

THE 2014 BONDS, THE INTEREST THEREON, AND ANY PREMIUMS PAYABLE UPON THE REDEMPTION OF ANY OF THE 2014 BONDS, ARE NOT AN INDEBTEDNESS OF THE SCHOOL DISTRICT, THE STATE OF CALIFORNIA (THE “STATE”) OR ANY OF ITS POLITICAL SUBDIVISIONS, AND NEITHER THE SCHOOL DISTRICT, THE COMMUNITY FACILITIES DISTRICT (EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN), THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS IS LIABLE FOR THE 2014 BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE SCHOOL DISTRICT, THE COMMUNITY FACILITIES DISTRICT (EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN) OR THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE 2014 BONDS. OTHER THAN THE SPECIAL TAXES LEVIED IN ZONE 1 PURSUANT TO THE RATE AND METHOD, NO TAXES ARE PLEDGED TO THE PAYMENT OF THE 2014 BONDS. THE 2014 BONDS ARE NOT A GENERAL OBLIGATION OF THE COMMUNITY FACILITIES DISTRICT BUT ARE LIMITED OBLIGATIONS OF THE COMMUNITY FACILITIES DISTRICT PAYABLE SOLELY FROM THE SPECIAL TAXES LEVIED PURSUANT TO THE RATE AND METHOD, AS MORE FULLY DESCRIBED HEREIN.

This cover page contains certain information for general reference only. It is not a summary of the issue. Potential investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. Investment in the 2014 Bonds involves risks which may not be appropriate for some investors. See “BONDOWNERS’ RISKS” herein for a discussion of risk factors that should be considered in evaluating the investment quality of the 2014 Bonds.

The 2014 Bonds are offered when, as and if issued and accepted by the Underwriter, subject to the approval as to their legality by Nixon Peabody LLP, Los Angeles, California, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the School District and the Community Facilities District by McFarlin & Anderson LLP, Laguna Hills, California, Disclosure Counsel. Additionally, Nossaman LLP, Irvine, California, has reviewed certain matters for the Underwriter. It is anticipated that the 2014 Bonds, in book-entry form, will be available for delivery through the facilities of DTC on or about December 23, 2014.

Dated: December 11, 2014

STIFEL

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Typewritten Text

2014-1943

MATURITY SCHEDULE$2,100,000

JURUPA UNIFIED SCHOOL DISTRICTCOMMUNITY FACILITIES DISTRICT NO. 6

(ZONE 1)SPECIAL TAX BONDS, 2014 SERIES A

Base CUSIP® No. 482128†

Maturity(September 1)

PrincipalAmount

InterestRate Yield

CUSIP®

No.†Maturity

(September 1)PrincipalAmount

InterestRate Yield

CUSIP®

No.†

2015 $40,000 2.000% 0.800% CF0 2025 $45,000 3.125% 3.320% CR4

2016 20,000 2.000 1.000 CG8 2026 50,000 3.250 3.500 CS2

2017 20,000 2.000 1.460 CH6 2027 55,000 3.500 3.560 CT0

2018 25,000 2.000 1.780 CJ2 2028 60,000 3.375 3.610 CU7

2019 25,000 2.000 2.150 CK9 2029 65,000 3.500 3.660 CV5

2020 30,000 2.250 2.440 CL7 2030 65,000 3.500 3.710 CW3

2021 35,000 2.500 2.710 CM5 2031 70,000 3.500 3.760 CX1

2022 35,000 2.750 2.930 CN3 2032 75,000 3.625 3.810 CY9

2023 40,000 3.000 3.060 CP8 2033 85,000 3.625 3.860 CZ6

2024 45,000 3.000 3.160 CQ6 2034 90,000 3.750 3.910 DA0

$1,125,000 4.00% Term 2014 Bonds due September 1, 2043 – Yield 4.20% CUSIP®

No. 482128 DB8

† CUSIP® is a registered trademark of the American Bankers Association. CUSIP® data is provided by CUSIPGlobal Services (CGS) which is managed on behalf of the American Bankers Association by S&P Capital IQ.CUSIP® data is not intended to create a database and does not serve in any way as a substitute for the CUSIP®Service Bureau. CUSIP® numbers are provided for convenience of reference only. Neither the CommunityFacilities District nor the Underwriter takes any responsibility for the accuracy of such numbers.

JURUPA UNIFIED SCHOOL DISTRICT

BOARD OF EDUCATION

Sheryl Schmidt, PresidentMemo Mendez, ClerkLinda Chard, Member

Robert Garcia1, MemberDonna Johnston, Member

DISTRICT ADMINISTRATION

Elliott Duchon, Superintendent

Paula Ford, Assistant Superintendent of Business ServicesKaren Russell, Director of Fiscal Services

___________________

PROFESSIONAL SERVICES

BOND COUNSEL/DISTRICT SPECIAL COUNSEL

Nixon Peabody LLP

DISCLOSURE COUNSEL

McFarlin & Anderson LLPLaguna Hills, California

FINANCIAL ADVISOR, SPECIAL TAX CONSULTANT & CFD ADMINISTRATOR

Dolinka Group, LLCIrvine, California

FISCAL AGENT

Zions First National BankLos Angeles, California

1 As a result of the November 4, 2014 election, Mr. Robert Garcia replaced Mr. Brian Schafer and commenced serving as aBoard member at the December 8, 2014 Board meeting.

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TABLE OF CONTENTS

INTRODUCTION .............................................1General ..........................................................1The School District........................................1The Community Facilities District ................2Purpose of the 2014 Bonds............................2Sources of Payment for the 2014 Bonds .......3Value-to-Lien Ratios .....................................4Redemption....................................................5Tax Exemption ..............................................5Risk Factors Associated with Purchasingthe 2014 Bonds..............................................5Forward-Looking Statements ........................5Professionals Involved in the Offering..........5Other Information..........................................6

CONTINUING DISCLOSURE.........................6INFRASTRUCTURE IMPROVEMENTS TOBE FINANCED WITH PROCEEDS OF THE2014 BONDS.....................................................7ESTIMATED SOURCES AND USES OFFUNDS ..............................................................8THE 2014 BONDS ............................................9

Authority for Issuance ...................................9General Provisions.........................................9Debt Service Schedule.................................10Redemption..................................................11Registration, Transfer and Exchange...........13Book-Entry and DTC ..................................14

SECURITY FOR THE 2014 BONDS.............14General ........................................................14Special Taxes...............................................14De-Annexation of Zone 2............................15Rate and Method..........................................15Special Tax Levy.........................................17Proceeds of Foreclosure Sales .....................18Special Tax Fund.........................................19Redemption Fund ........................................20Reserve Fund...............................................21Special Reserve Fund ..................................21Administrative Expense Fund .....................22Project Fund.................................................22Investment of Moneys in Funds ..................22Payment of Rebate Obligation.....................22Parity Bonds for Refunding PurposesOnly .............................................................23Special Taxes Are Not Within TeeterPlan..............................................................23

COMMUNITY FACILITIES DISTRICT NO. 6(ZONE 1)......................................................... 23

General Information .................................... 23Authority for Issuance................................. 23Special Tax Collections............................... 24Assessed Value............................................ 26Concentration of Special Tax Obligation.... 26Direct and Overlapping Debt ...................... 27Overlapping Direct Assessments ................ 30

BONDOWNERS’ RISKS ............................... 31Risks of Real Estate Secured InvestmentsGenerally..................................................... 32Economic Uncertainty................................. 32State Budget ................................................ 32Special Taxes Are Not PersonalObligations .................................................. 32The 2014 Bonds Are Limited Obligationsof the Community Facilities District........... 32Assessed Values .......................................... 32Value-to-Lien Ratios ................................... 33Burden of Parity Liens, Taxes and OtherSpecial Assessments on the TaxableProperty....................................................... 33Disclosure to Future Purchasers.................. 34Insufficiency of the Special Tax withinZone 1.......................................................... 34Exempt Properties ....................................... 36Depletion of Special Reserve Fund andReserve Fund............................................... 36Potential Delay and Limitations inForeclosure Proceedings ............................. 36Bankruptcy and Foreclosure Delay ............. 37Payments by FDIC, Fannie Mae, FreddieMac and Other Federal Agencies ................ 39Factors Affecting Parcel Values andAggregate Value.......................................... 40No Acceleration Provisions......................... 41Community Facilities District Formation ... 42Billing of Special Taxes .............................. 42Inability to Collect Special Taxes ............... 42Right to Vote on Taxes Act......................... 43Ballot Initiatives and LegislativeMeasures ..................................................... 44Limited Secondary Market.......................... 45Loss of Tax Exemption ............................... 45IRS Audit of Tax-Exempt Bond Issues....... 45Impact of Legislative Proposals,Clarifications of the Code and CourtDecisions on Tax Exemption ...................... 45Backup Withholding ................................... 46Limitations on Remedies............................. 46

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TAX MATTERS..............................................46Federal Income Taxes..................................46State Taxes...................................................47Original Issue Discount ...............................47Original Issue Premium...............................47Ancillary Tax Matters..................................47Changes in Law and Post Issuance Events..48

LEGAL MATTERS.........................................48Legal Opinion..............................................48Absence of Litigation ..................................49No General Obligation of School Districtor Community Facilities District .................49

NO RATING....................................................49UNDERWRITING ..........................................49PROFESSIONAL FEES..................................50MISCELLANEOUS ........................................50

APPENDIX A - General Information About theJurupa Unified School District .................... A-1

APPENDIX B - Rate and Method ofApportionment for Community FacilitiesDistrict No. 6 of the Jurupa Unified SchoolDistrict ........................................................ B-1

APPENDIX C - Summary of Certain Provisionsof the Fiscal Agent Agreement.................... C-1

APPENDIX D – Form of Continuing DisclosureAgreement ................................................... D-1

APPENDIX E - Form of Opinion of BondCounsel.........................................................E-1

APPENDIX F - Book-Entry System .................F-1

Jurupa

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Jurupa Unified School DistrictCommunity Facilities District No. 6 Zones

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November 2014

Community Facilities District No. 6 Zone 1Community Facilities District No. 6 Zone 2

GENERAL INFORMATION ABOUT THE OFFICIAL STATEMENT

Use of Official Statement. This Official Statement is submitted in connection with the offer and sale of the2014 Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. ThisOfficial Statement is not to be construed as a contract with the purchasers of the 2014 Bonds. All information forinvestors regarding the Community Facilities District and the 2014 Bonds is contained in this Official Statement.While the School District maintains an internet website for various purposes, none of the information on suchwebsite is intended to assist investors in making any investment decision or to provide any continuing informationwith respect to the 2014 Bonds or any other bonds or obligations of the School District

Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by theCommunity Facilities District in any press release and in any oral statement made with the approval of an authorizedofficer of the School District or the Community Facilities District or any other entity described or referenced herein,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” within the meaning ofthe Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements aresubject to risks and uncertainties that could cause actual results to differ materially from those contemplated in suchforward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used todevelop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, thereare likely to be differences between forecasts and actual results and those differences may be material. Theinformation and expressions of opinion herein are subject to change without notice, and neither the delivery of thisOfficial Statement nor any sale made hereunder shall, under any circumstances, give rise to any implication thatthere has been no change in the affairs of the School District or the Community Facilities District or any other entitydescribed or referenced herein since the date hereof. The School District and the Community Facilities District donot plan to issue any updates or revisions to the forward-looking statements set forth in this Official Statement.

Authorized Information. No dealer, broker, salesperson or other person has been authorized by the SchoolDistrict or the Community Facilities District to give any information or to make any representations in connectionwith the offer or sale of the 2014 Bonds other than those contained herein and if given or made, such otherinformation or representation must not be relied upon as having been authorized by the School District, theCommunity Facilities District or the Underwriter. This Official Statement does not constitute an offer to sell or thesolicitation of an offer to buy nor shall there be any sale of the 2014 Bonds by a person in any jurisdiction in whichit is unlawful for such person to make such an offer, solicitation or sale.

Involvement of Underwriter. The Underwriter has submitted the following statement for inclusion in thisOfficial Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, andas a part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstancesof this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. Theinformation and expressions of opinions herein are subject to change without notice and neither delivery of thisOfficial Statement nor any sale made hereunder shall, under any circumstances, create any implication that there hasbeen no change in the affairs of the Community Facilities District or any other entity described or referenced hereinsince the date hereof. All summaries of the documents referred to in this Official Statement are made subject to theprovisions of such documents, respectively, and do not purport to be complete statements of any or all of suchprovisions.

Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effecttransactions which stabilize or maintain the market price of the 2014 Bonds at a level above that which mightotherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. TheUnderwriter may offer and sell the 2014 Bonds to certain dealers and others at prices lower than the public offeringprices set forth on the inside cover page hereof and said public offering prices may be changed from time to time bythe Underwriter.

THE 2014 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, ASAMENDED, IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTSCONTAINED IN SUCH ACT. THE 2014 BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDERTHE SECURITIES LAWS OF ANY STATE.

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OFFICIAL STATEMENT

$2,100,000JURUPA UNIFIED SCHOOL DISTRICT

COMMUNITY FACILITIES DISTRICT NO. 6(ZONE 1)

SPECIAL TAX BONDS, 2014 SERIES A

INTRODUCTION

This introduction is not a summary of this Official Statement. It is only a brief description of andguide to, and is qualified by, more complete and detailed information contained in the entire OfficialStatement, including the cover page, the inside cover page and appendices hereto, and the documentssummarized or described herein. A full review should be made of the entire Official Statement. Theoffering of the 2014 Bonds to potential investors is made only by means of the entire Official Statement.

General

This Official Statement, including the cover page, the inside cover page and appendices hereto, isprovided to furnish information regarding the Jurupa Unified School District Community FacilitiesDistrict No. 6 (Zone 1) Special Tax Bonds, 2014 Series A (the “2014 Bonds”).

The 2014 Bonds are issued pursuant to the Act (as defined below) and the Fiscal AgentAgreement, dated as of December 1, 2014 (the “Fiscal Agent Agreement”), by and between CommunityFacilities District No. 6 of Jurupa Unified School District (the “Community Facilities District”) and ZionsFirst National Bank, as fiscal agent (the “Fiscal Agent”). See “THE 2014 BONDS – Authority ofIssuance” herein.

The Community Facilities District consists of two zones, Zone 1 and Zone 2. 30 homes havebeen constructed within Tract 31301 and 14 homes have been constructed within Tract 31875 locatedwithin Zone 1 of the Community Facilities District. Special Taxes from the 44 homes within Zone 1 arepledged to payment of the principal of and interest on the 2014 Bonds. It is anticipated that the vacantproperty located in Tract 28851 within Zone 2 will be de-annexed from the Community Facilities Districtand released from the levy of Special Taxes by the Community Facilities District. The CommunityFacilities District is located within the City of Jurupa Valley, which incorporated on July 1, 2011.

The Community Facilities District may issue bonds payable on a parity with the 2014 Bondspursuant to the provisions of the Fiscal Agent Agreement for refunding purposes only. See “SECURITYFOR THE 2014 BONDS – Parity Bonds for Refunding Purposes Only.”

The School District

The Jurupa Unified School District (the “School District”) is a school district organized under thelaws of the State of California (the “State”), was established in 1963, and is comprised of an area ofapproximately 44 square miles. The School District is located in the western region of Riverside County(the “County”), encompassing the City of Jurupa Valley, a portion of the City of Eastvale, and a smallportion of unincorporated area. The School District is currently operating 16 elementary schools forgrades K-6, three middle schools for grades 7-8, three comprehensive high schools for grades 9-12, onecontinuation high school and a Learning Center that houses a community day school, an adult educationprogram, an independent study program and other alternative programs. Enrollment in the School Districtin Fiscal Year 2013-14 (for purposes hereof, the term “Fiscal Year” is utilized when followed by

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reference to a specific fiscal year) was 19,545 students in grades K-12, including students in the adulteducation and other alternative programs. Enrollment in grades K-12 in Fiscal Year 2014-15 is expectedto be approximately 19,335 students in grades K-12, including students in the adult education and otheralternative programs. See APPENDIX A – “General Information About the Jurupa Unified SchoolDistrict” herein.

The Community Facilities District

The Community Facilities District was formed and established by the School District onSeptember 18, 2006, pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section53311 et seq. of the California Government Code, the “Act”), following a public hearing. At a landownerelection held on September 18, 2006, the qualified electors of the Community Facilities District, by morethan a two-thirds vote, authorized the Community Facilities District to incur a bonded indebtedness of theCommunity Facilities District to finance the acquisition and construction of School District facilities,certain water and sewer facilities of the Jurupa Community Services District and park and recreationalfacilities of the Jurupa Area Recreation and Park District and approved the levy of special taxes. Thequalified electors of the Community Facilities District authorized bonded indebtedness in the aggregatenot-to-exceed principal amount of $12,000,000 and approved the levy of annual special taxes in theCommunity Facilities District pursuant to a Community Facilities District rate and method ofapportionment of special tax (the “Rate and Method” and “Special Taxes,” respectively). Due to theanticipated de-annexation and release of the vacant property located in Tract 28851 within Zone 2, it isnot anticipated that the remaining bond authorization will ever be issued. As indicated above, theCommunity Facilities District may issue bonds on a parity with the 2014 Bonds pursuant to the provisionsof the Fiscal Agent Agreement for refunding purposes only.

Once duly established, a community facilities district is a legally constituted governmental entityestablished for the purpose of financing specific facilities and services within defined boundaries. Subjectto approval by a two-thirds vote of the qualified voters within a community facilities district, andcompliance with the provisions of the Act, a community facilities district may issue bonds and may levyand collect special taxes to repay such bonded indebtedness, including interest thereon.

The Community Facilities District is non-contiguous. Zone 1 of the Community FacilitiesDistrict consists of two non-contiguous parcels. 30 homes have been constructed on approximately 14.69acres located south of State Route 60 south of Jurupa Road and west of Tyrolite Street (referred to hereinas the “Tract 31301 Portion” of Zone 1). 14 homes have been constructed on approximately 6.595 acreslocated south of State Route 60, near the intersection of Kirby Drive and Jurupa Road (referred to hereinas the “Tract 31875 Portion” of Zone 1). Zone 2 of the Community Facilities District, consists ofapproximately 28.57 acres of vacant land located north of State Route 60 just east of Pyrite Street withaccess off Granite Hill Drive. There is one exempt lot within the Tract 31301 Portion of Zone 1.

See “COMMUNITY FACILITIES DISTRICT NO. 6 (ZONE 1)” for a description of theCommunity Facilities District.

Purpose of the 2014 Bonds

The Community Facilities District was formed pursuant to a School Facilities MitigationAgreement (the “Mitigation Agreement”), dated as of July 1, 2006, by and between the School Districtand Far West Industries, a California corporation (“Far West Industries”). Far West Industries was theproperty owner at the time of formation of the Community Facilities District and was the real estatedevelopment company which constructed the homes in Zone 1. See “INFRASTRUCTUREIMPROVEMENTS TO BE FINANCED WITH PROCEEDS OF THE 2014 BONDS,” “SECURITY

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FOR THE 2014 BONDS – Rate and Method” and “COMMUNITY FACILITIES DISTRICT NO. 6(ZONE 1)” herein.

Sources of Payment for the 2014 Bonds

The 2014 Bonds are secured by and payable from a first pledge of “Special Tax Revenues,”levied on the 44 completed homes in Zone 1 of the Community Facilities District, which is defined in theFiscal Agent Agreement as the proceeds of the Special Taxes levied within Zone 1 of the CommunityFacilities District under the proceedings taken pursuant to the Act, the Resolution of Formation and theFiscal Agent Agreement and received by the Auditor or the Treasurer on behalf of the CommunityFacilities District, including all scheduled payments and proceeds of redemption or sales proceedsresulting from foreclosure of the lien of such Special Taxes (which may include interest and penaltiesthereon) but which does not include any prepayments of such Special Taxes made pursuant to the Rateand Method.

The Community Facilities District anticipates completion of proceedings to de-annex the vacantproperty located in Tract 28851 within Zone 2 from the Community Facilities District and to release suchproperty from the levy of Special Taxes. Regardless of whether such proceedings result in release of suchproperty, the 2014 Bonds are secured only from Special Taxes levied on the 44 homes in Zone 1, and arenot payable from Special Taxes, if any, levied on any other parcels within the Community FacilitiesDistrict. See “SECURITY FOR THE 2014 BONDS –Special Tax Fund.” “Special Tax” is defined in theFiscal Agent Agreement as “the special tax established within and authorized to be levied by theCommunity Facilities District under the Rate and Method and levied within Zone 1 of CommunityFacilities District pursuant to the Act, the Resolution of Formation and this Agreement;” provided thatspecial taxes, if any, levied on the property within Zone 2 are not pledged to the payment of the 2014Bonds and are excluded from the term “Special Taxes” as used in the Fiscal Agent Agreement

Pursuant to the Act, the Rate and Method, the Resolution of Formation (as defined herein) and theFiscal Agent Agreement, so long as the 2014 Bonds are outstanding, the Community Facilities Districtwill, before the final date on which the Auditor will accept the transmission of the Special Tax roll for theparcels located in Zone 1 of the Community Facilities District for inclusion on the next tax roll, prepare orcause to be prepared, and will transmit to the Auditor, such data as the Auditor requires to include theSpecial Taxes on the next secured tax roll of the County. The Community Facilities District may employand has employed consultants to assist in computing Special Taxes pursuant to the Fiscal AgentAgreement, in reconciling Special Taxes levied to amounts received and in computing Special TaxRevenues necessary to pay Annual Debt Service and Administrative Expenses in each Fiscal Year. See“SECURITY FOR THE 2014 BONDS –Special Taxes” herein.

The Rate and Method exempts from the Special Tax all property owned by the State, the federalgovernment and local governments, as well as certain other properties, subject to certain limitations. See“SECURITY FOR THE 2014 BONDS – Rate and Method” and “BONDOWNERS’ RISKS – ExemptProperties.”

The 2014 Bonds are also secured by a first pledge of all moneys deposited in the Reserve Fundand the Special Reserve Fund. See “SECURITY FOR THE 2014 BONDS.”

The Community Facilities District has established the “Reserve Fund” which will be held by theFiscal Agent and will be funded in an amount equal to the Reserve Requirement. The Fiscal AgentAgreement defines Reserve Requirement, as of any date of calculation, as an amount equal to the least of(i) Maximum Annual Debt Service on the Outstanding Bonds as of the date of calculation, initially thedate of issuance of the 2014 Bonds, (ii) ten percent (10%) of the original principal amount of the 2014Bonds, or (iii) one hundred twenty-five percent (125%) of the average Annual Debt Service on the 2014

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Bonds due in any remaining Bond Year as of the date of calculation, initially the date of issuance of the2014 Bonds. As of the date of issuance of the 2014 Bonds, the Reserve Requirement will be$158,850.13. The ability of the Board of Education, in its capacity as legislative body of the CommunityFacilities District (the “Board of Education”), to increase the annual Special Taxes levied to replenish theReserve Fund is subject to the maximum annual amount of Special Taxes authorized by the qualifiedvoters of the Community Facilities District and the limitation imposed by Section 53321 of the Act asapplied to Zone 1. The moneys in the Reserve Fund will only be used for payment of principal of,interest and any redemption premium on the 2014 Bonds, and at the direction of the Community FacilitiesDistrict, for payment of rebate obligations related to the 2014 Bonds. See “SECURITY FOR THE 2014BONDS – Special Tax Levy” and “ – Reserve Fund.”

In addition to the Reserve Fund, the Community Facilities District has established the “SpecialReserve Fund” which will be held by the Fiscal Agent and is initially funded with $148,106.94 of SpecialTaxes previously collected by the Community Facilities District. If the amounts in the Redemption Fundare insufficient to pay the principal of, including sinking account payments, and interest on the 2014Bonds when due, the Fiscal Agent shall withdraw from the Special Reserve Fund moneys necessary forsuch purposes before any draws are made on the Reserve Fund. The Fiscal Agent Agreement defines“Special Reserve Requirement” as the sum of $148,106.94.

The Community Facilities District has also covenanted in the Fiscal Agent Agreement to causeforeclosure proceedings to be commenced and prosecuted against certain parcels with delinquentinstallments of the Special Taxes. For a more detailed description of the foreclosure covenant, see“SECURITY FOR THE 2014 BONDS – Proceeds of Foreclosure Sales.”

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE SCHOOLDISTRICT, THE COMMUNITY FACILITIES DISTRICT (EXCEPT TO THE LIMITEDEXTENT DESCRIBED HEREIN) OR THE STATE OR ANY POLITICAL SUBDIVISIONTHEREOF IS PLEDGED TO THE PAYMENT OF THE 2014 BONDS. OTHER THAN THESPECIAL TAXES LEVIED WITHIN ZONE 1, NO TAXES ARE PLEDGED TO THE PAYMENTOF THE 2014 BONDS. THE 2014 BONDS ARE NOT A GENERAL OBLIGATION OF THECOMMUNITY FACILITIES DISTRICT, BUT ARE LIMITED OBLIGATIONS OF THECOMMUNITY FACILITIES DISTRICT PAYABLE SOLELY FROM THE SPECIAL TAXESLEVIED WITHIN ZONE 1 AS MORE FULLY DESCRIBED HEREIN.

Value-to-Lien Ratios

The aggregate assessed value based on the County Assessor’s records of $18,079,840.00 for the44 homes within Zone 1 results in an approximate value-to-lien ratio of 8.61 to 1, calculated with respectto the 2014 Bonds. There currently are no other direct and overlapping tax and assessment bonds securedby the property within Zone 1 of the Community Facilities District. Jurupa Area Recreation and ParkDistrict Community Facilities District No. 2006-1 levies a special tax on such parcels, but as ofOctober 1, 2014, has not issued bonds secured by such special tax. See Table 4 below. The value-to-lienratio of individual parcels will differ from the foregoing aggregate value. See also “SECURITY FORTHE 2014 BONDS – Rate and Method,” “COMMUNITY FACILITIES DISTRICT NO. 6 (ZONE 1) –Direct and Overlapping Debt” and “BONDOWNERS’ RISKS –Assessed Values” herein, for informationrelating to overlapping indebtedness.

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Redemption

The 2014 Bonds are subject to optional redemption, mandatory redemption from prepayment ofSpecial Taxes and mandatory sinking fund redemption as described herein.

Tax Exemption

Assuming compliance with certain covenants and provisions of the Internal Revenue Code of1986, as amended (the “Code”), in the opinion of Bond Counsel, interest on the 2014 Bonds will not beincludable in gross income for federal income tax purposes although it may be includable in thecalculation for certain taxes. Also in the opinion of Bond Counsel, interest on the 2014 Bonds will beexempt from State personal income taxes. See “TAX MATTERS” herein.

Risk Factors Associated with Purchasing the 2014 Bonds

Investment in the 2014 Bonds involves risks that may not be appropriate for some investors. Seethe section of this Official Statement entitled “BONDOWNERS’ RISKS” for a discussion of certain riskfactors which should be considered, in addition to the other matters set forth herein, in considering theinvestment quality of the 2014 Bonds.

Forward-Looking Statements

Certain statements included or incorporated by reference in this Official Statement constitute“forward-looking statements” within the meaning of the United States Private Securities LitigationReform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, andSection 27A of the United States Securities Act of 1933, as amended. Such statements are generallyidentifiable by the terminology used such as a “plan,” “expect,” “estimate,” “project,” “budget,”“anticipate” or similar words. Such forward-looking statements include, but are not limited to certainstatements contained in the information under the caption “COMMUNITY FACILITIES DISTRICTNO. 6 (ZONE 1)” herein.

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINEDIN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS,PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROMANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BYSUCH FORWARD-LOOKING STATEMENTS. THE COMMUNITY FACILITIES DISTRICT ANDTHE SCHOOL DISTRICT DO NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THEFORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

Professionals Involved in the Offering

Zions First National Bank, Los Angeles, California, will serve as the fiscal agent for the 2014Bonds and will perform the functions required of it under the Fiscal Agent Agreement for the payment ofthe principal of and interest and any premium on the 2014 Bonds and all activities related to theredemption of the 2014 Bonds. Nixon Peabody LLP, Los Angeles, California, is serving as BondCounsel to the Community Facilities District. McFarlin & Anderson LLP, Laguna Hills, California, isacting as Disclosure Counsel. Stifel, Nicolaus & Company, Incorporated, San Francisco, California, isacting as Underwriter in connection with the issuance and sale of the 2014 Bonds, and Nossaman LLP,Irvine, California, is acting as Underwriter’s Counsel.

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Dolinka Group, LLC, Irvine, California, acts as Financial Advisor, Special Tax Consultant, CFDAdministrator and Dissemination Agent to the Community Facilities District.

Payment of the fees and expenses of Bond Counsel, Disclosure Counsel, the Special TaxConsultant, the Underwriter and the Fiscal Agent is contingent upon the sale and delivery of the 2014Bonds.

Other Information

This Official Statement speaks only as of its date, and the information contained herein is subjectto change. Brief descriptions of the 2014 Bonds, certain sections of the Fiscal Agent Agreement, securityfor the 2014 Bonds, risk factors, the Community Facilities District, Zone 1, the School District, and otherinformation are included in this Official Statement. Such descriptions and information do not purport tobe comprehensive or definitive. The descriptions herein of the 2014 Bonds, the Fiscal Agent Agreement,and other resolutions and documents are qualified in their entirety by reference to the forms thereof andthe information with respect thereto included in the 2014 Bonds, the Fiscal Agent Agreement, suchresolutions and other documents. All such descriptions are further qualified in their entirety by referenceto laws and to principles of equity relating to or affecting generally the enforcement of creditors’ rights.Copies of such documents may be obtained from the Assistant Superintendent of Business Services of theJurupa Unified School District, 4850 Pedley Road, Jurupa Valley, California 92509. There may be acharge for copying, mailing and handling of any documents.

CONTINUING DISCLOSURE

The Community Facilities District. The Community Facilities District will covenant in theContinuing Disclosure Agreement, the form of which is set forth in APPENDIX D – “Form of ContinuingDisclosure Agreement” (the “Continuing Disclosure Agreement”), for the benefit of owners andbeneficial owners of the 2014 Bonds, to provide certain financial information and operating data relatingto the Community Facilities District, Zone 1 and the 2014 Bonds by not later than March 31 in each yearcommencing on March 31, 2015 (the “Community Facilities District Annual Report”), and to providenotices of the occurrence of certain enumerated events.

The Community Facilities District Annual Report will be filed by the Community FacilitiesDistrict, or Dolinka Group, LLC, as Dissemination Agent on behalf of the Community Facilities District,with the Municipal Securities Rulemaking Board (the “MSRB”) through the Electronic Municipal MarketAccess System (the “EMMA System”), in an electronic format and accompanied by identifyinginformation as prescribed by the MSRB, with a copy to the Fiscal Agent. Any notice of a listed eventwill be filed by the Community Facilities District, or the Dissemination Agent on behalf of theCommunity Facilities District, with the MSRB through the EMMA System, with a copy to the FiscalAgent. The specific nature of the information to be contained in the Community Facilities DistrictAnnual Report or any notice of a listed event is set forth in the Continuing Disclosure Agreement. Thecovenants of the Community Facilities District in the Continuing Disclosure Agreement have been madein order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the “Rule”); provided, however, a default under the Continuing Disclosure Agreement will not,in itself, constitute an event of default under the Fiscal Agent Agreement, and the sole remedy under theContinuing Disclosure Agreement in the event of any failure of the Community Facilities District or theDissemination Agent to comply with the Continuing Disclosure Agreement will be an action to compelperformance.

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A review of previous disclosure filings during the last five years with respect to financings by theSchool District and community facilities districts formed by the School District indicates that the SchoolDistrict did not comply in all respect with its prior undertakings. For example, (i) the School Districtfiled interim budget reports up to approximately 2 months after the date required under the applicabledisclosure undertaking or in some instances did not specifically file an interim budget report with respectto a particular financing, (ii) the School District filed audit and annual reports up to approximately 2months after the date required under the applicable disclosure undertaking or in some instances did notspecifically file an audit and annual report with respect to a particular financing, (iii) the School Districtdid not specifically file an annual report or the Fiscal Year 2011-12 audit report with respect to the 2012General Obligation Refunding Bonds issued on December 12, 2012 but information to be included in theannual report was contained in the Official Statement and such audit report was filed with respect to otherfilings made by the School District through the EMMA System, and (iv) some annual reports filed by theSchool District did not include each of the specifically listed items in the applicable annual report.Finally, the School District did not provide notice relating to each rating change that may have occurredwith respect to a rated financing. The School District has since filed the foregoing items for currentlyoutstanding financings or is preparing material in order to file notices regarding the foregoing items forfiling. In order to remain in compliance with its undertakings in the future, the School District and thecommunity facilities districts have implemented procedures to file their annual reports on a timely basisand consolidated the personnel or firm responsible for preparing and/or monitoring compliance with therespective disclosure undertakings.

INFRASTRUCTURE IMPROVEMENTS TO BE FINANCEDWITH PROCEEDS OF THE 2014 BONDS

Proceeds of the 2014 Bonds may be used to finance, either directly or indirectly, the acquisitionand construction of certain School District facilities, certain water and sewer facilities of the JurupaCommunity Services District and certain park and recreational facilities of the Jurupa Area Recreationand Park District (collectively, the Project”).

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ESTIMATED SOURCES AND USES OF FUNDS

The proceeds from the sale of the 2014 Bonds and other funds of the Community FacilitiesDistrict consisting of previously collected Special Taxes will be deposited into the following respectiveaccounts and funds established under the Fiscal Agent Agreement, as follows:

SOURCESPrincipal Amount of 2014 Bonds $2,100,000.00Less: Net Original Issue Discount (53,619.55)Less: Underwriter’s Discount (42,000.00)Plus: Special Taxes on hand 148,106.94Total Sources $2,152,487.39

USESDeposit into Project Fund(1) $1,664,530.32Deposit into Reserve Fund(2) 158,850.13Deposit into Special Reserve Fund(3) 148,106.94Deposit into Costs of Issuance Fund (4) 181,000.00

Total Uses $2,152,487.39

(1) See “SECURITY FOR THE 2014 BONDS – Project Fund” below. $1,027,674.32 of the amount deposited in theProject Fund is expected to be expended on School Facilities, $579,480.00 of the amount deposited in the ProjectFund is expected to be expended on eligible water and sewer facilities of the Jurupa Community Services District and$57,376.00 of the amount deposited in the Project Fund is expected to be expended on eligible park and recreationalfacilities of the Jurupa Area Recreation and Park District.

(2) Deposit from Bond proceeds of the amount necessary to fund the Reserve Fund in an amount equal to the ReserveRequirement as of the date of delivery of the 2014 Bonds.

(3) Deposit from Special Taxes on deposit with the Community Facilities District of the amount necessary to fund theSpecial Reserve Fund in an amount equal to the Special Reserve Fund Requirement as of the date of delivery of the2014 Bonds.

(4) Includes, among other things, the fees and expenses of Bond Counsel, Disclosure Counsel, the Financial Advisor, thecost of printing the preliminary and final Official Statements, the fees of the Special Tax Consultant, reimbursementto the School District and reimbursement to Far West Industries.

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THE 2014 BONDS

Authority for Issuance

The 2014 Bonds will be issued pursuant to the Act and the Fiscal Agent Agreement.

General Provisions

The 2014 Bonds will be dated their date of delivery and will bear interest at the rates per annumset forth on the inside cover page hereof, calculated on the basis of a 360-day year of twelve 30-daymonths, payable semi-annually on each March 1 and September 1, commencing on March 1, 2015 (each,an “Interest Payment Date”), and will mature in the amounts and on the dates set forth on the inside coverpage hereof. The 2014 Bonds will be issued in fully registered form in denominations of $5,000 each orany integral multiple thereof and when delivered, will be registered in the name of Cede & Co., asnominee of The Depository Trust Company (“DTC”). DTC will act as securities depository for the 2014Bonds. Ownership interests in the 2014 Bonds may be purchased in book-entry form only, indenominations of $5,000 or any integral multiple thereof within a single maturity. So long as the 2014Bonds are held in book-entry form, principal of, premium, if any, and interest on the 2014 Bonds will bepaid directly to DTC for distribution to the beneficial owners of the 2014 Bonds in accordance with theprocedures adopted by DTC. See “THE 2014 BONDS – Book-Entry and DTC.”

Each 2014 Bond will bear interest from the Interest Payment Date next preceding the date ofauthentication thereof unless (i) it is authenticated and registered as of an Interest Payment Date, in whichevent it will bear interest from such Interest Payment Date, (ii) the date of authentication is after the 15thday of the calendar month immediately preceding the applicable Interest Payment Date whether or notsuch day is a Business Day (the “Record Date”) but prior to the immediately succeeding Interest PaymentDate, in which event interest shall be payable from the Interest Payment Date immediately succeeding thedate of authentication, or (iii) it is authenticated on or before the Record Date for the first InterestPayment Date, in which event, it will bear interest from the date of issuance of the 2014 Bonds; provided,however, that if at the time of authentication of any Bond, interest thereon is in default, the 2014 Bondwill bear interest from the Interest Payment Date to which interest has previously been paid or madeavailable for payment.

Interest on the 2014 Bonds (including the final interest payment upon maturity or earlierredemption) is payable by check of the Fiscal Agent mailed by first-class mail to the registered ownerthereof (an “Owner”) at such Owner’s address as it appears on the Bond Register maintained by the FiscalAgent at the close of business on the Record Date preceding the Interest Payment Dates, or by wiretransfer to an account within the United States of America made on such Interest Payment Date uponwritten instructions of any Owner of $1,000,000 or more in aggregate principal amount of 2014 Bondsdelivered to the Fiscal Agent prior to the applicable Record Date. The principal of the 2014 Bonds andany premium on the 2014 Bonds are payable by check in lawful money of the United States of Americaupon surrender of the 2014 Bonds at the Principal Office of the Fiscal Agent (currently in Los Angeles,California).

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Debt Service Schedule

The following table presents the annual debt service on the 2014 Bonds (including mandatorysinking fund redemptions), assuming that there are no optional redemptions or mandatory redemptionsfrom Special Tax prepayments.

Table 1

Jurupa Unified School DistrictCommunity Facilities District No. 6 (Zone 1)

Scheduled Annual Debt Service on 2014 Bonds

Year EndingSeptember 1 Principal Interest

TotalDebt Service

2015 $40,000 $52,230.70 $92,230.702016 20,000 75,018.76 95,018.762017 20,000 74,618.76 94,618.762018 25,000 74,218.76 99,218.762019 25,000 73,718.76 98,718.762020 30,000 73,218.76 103,218.762021 35,000 72,543.76 107,543.762022 35,000 71,668.76 106,668.762023 40,000 70,706.26 110,706.262024 45,000 69,506.26 114,506.262025 45,000 68,156.26 113,156.262026 50,000 66,750.00 116,750.002027 55,000 65,125.00 120,125.002028 60,000 63,200.00 123,200.002029 65,000 61,175.00 126,175.002030 65,000 58,900.00 123,900.002031 70,000 56,625.00 126,625.002032 75,000 54,175.00 129,175.002033 85,000 51,456.26 136,456.262034 90,000 48,375.00 138,375.002035 95,000 45,000.00 140,000.002036 100,000 41,200.00 141,200.002037 110,000 37,200.00 147,200.002038 115,000 32,800.00 147,800.002039 125,000 28,200.00 153,200.002040 130,000 23,200.00 153,200.002041 140,000 18,000.00 158,000.002042 150,000 12,400.00 162,400.002043 160,000 6,400.00 166,400.00

$2,100,000 $1,545,787.06 $3,645,787.06

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Redemption

Optional Redemption. The 2014 Bonds in the principal amount of $5,000 or any integral multiplethereof, may be redeemed prior to their respective maturity dates, at the option of the CommunityFacilities District, as a whole or in part, from any source of available funds, on any Interest Payment Date,at a redemption price equal to the principal amount of the 2014 Bonds to be redeemed, together with apremium (expressed as a percentage of the principal amount of the 2014 Bonds to be redeemed) as setforth in the following table, plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Premium

September 1, 2015 through and including March 1, 2022 3%September 1, 2022 and March 1, 2023 2September 1, 2023 and March 1, 2024 1September 1, 2024 and any Interest Payment Date thereafter 0

Whenever provision is made for the optional redemption of less than all of the 2014 Bonds, theFiscal Agent shall select the 2014 Bonds for redemption in a way that the ratio of Outstanding 2014Bonds to originally issued 2014 Bonds will be approximately the same in each maturity, insofar aspossible. Within each maturity, the Fiscal Agent will select 2014 Bonds for redemption by lot.

Mandatory Redemption from Special Tax Prepayments. The 2014 Bonds are subject to subject tomandatory redemption prior to maturity on any Interest Payment Date, as a whole or in part, in a mannerdetermined by the Community Facilities District from prepayments of Special Taxes at a redemptionprice equal to the principal amount of the 2014 Bonds to be redeemed, together with a premium(expressed as a percentage of the principal amount of Bonds to be redeemed), together with accruedinterest thereon to the date fixed for redemption:

Redemption Dates Redemption Premium

September 1, 2015 through and including March 1, 2022 3%September 1, 2022 and March 1, 2023 2September 1, 2023 and March 1, 2024 1September 1, 2024 and any Interest Payment Date thereafter 0

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Mandatory Sinking Account Redemption. The 2014 Bonds maturing on September 1, 2043, aresubject to redemption prior to their stated maturity in part as directed by the Community FacilitiesDistrict, and if not so directed, by lot as determined by the Fiscal Agent, from Mandatory SinkingAccount Payments established in the Fiscal Agent Agreement on the dates set forth below at a redemptionprice equal to the principal amount thereof, together with interest accrued thereon to the date fixed forredemption, without premium:

Term Bonds Maturing September 1, 2043

Mandatory Sinking AccountPayment Dates(September 1)

MandatorySinking Account

Payments2035 $95,0002036 100,0002037 110,0002038 115,0002039 125,0002040 130,0002041 140,0002042 150,0002043† 160,000

____________________† Final Maturity.

The amounts in the foregoing table will be reduced as a result of any prior partial redemption of the 2014Bonds pursuant to an optional redemption or redemption from proceeds of Special Tax prepayments asspecified in writing by the Community Facilities District to the Fiscal Agent.

Purchase In Lieu of Redemption. In lieu of an optional, extraordinary mandatory or mandatorysinking fund redemption, the Community Facilities District may elect to purchase such 2014 Bonds atpublic or private sale at such prices as the Community Facilities District in its discretion may determine;provided, that, unless otherwise authorized by law, the purchase price (including brokerage and othercharges) thereof will not exceed the principal amount thereof, plus accrued interest accrued to thepurchase date and any premium which would otherwise be due if such 2014 Bonds were to be redeemedin accordance with the Fiscal Agent Agreement.

Notice of Redemption. The Fiscal Agent will mail, at least 30 days but not more that 60 daysprior to the date of redemption, notice of intended redemption, in accordance with the applicableDepository rules to the respective Owners of the 2014 Bonds appearing on the 2014 Bond register books(the “Bond Register”); however, such mailing to the Owners is not a condition precedent to suchredemption and failure to so mail or of any person or entity to receive any such notice, or any defect inany notice of redemption, will not affect the validity of the proceedings for the redemption of such 2014Bonds.

Such notice will state the redemption date and the redemption price and, if less than all of thethen-Outstanding 2014 Bonds are to be called for redemption, will designate the CUSIP numbers of the2014 Bonds to be redeemed and in the case of 2014 Bonds to be redeemed in part, the respective principalportions to be redeemed, provided, however, that whenever any call includes all bonds of a maturity, thenumbers of the 2014 Bonds of such maturity need not be stated, and will require that such 2014 Bonds bethen surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price,and will state that further interest on such 2014 Bonds, or the portion thereof to be redeemed, will notaccrue from and after the redemption date.

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Conditional Notice of Optional Redemption. The Fiscal Agent may issue a conditional notice ofredemption to the Owners in the same manner as described above. Such conditional notice may berescinded, redemption may be canceled and none of such 2014 Bonds will be redeemed in the eventsufficient funds have not been deposited with the Fiscal Agent on the redemption date.

Effect of Redemption. From and after the date fixed for redemption, if funds available for thepayment of the principal of, and interest and any Redemption Premium on, the 2014 Bonds so called forredemption have been deposited in the Redemption Fund on the date fixed for redemption, such 2014Bonds so called will cease to be entitled to any benefit under the Fiscal Agent Agreement other than theright to receive payment of the redemption price, and no interest will accrue thereon on or after theredemption date specified in the notice of redemption.

Registration, Transfer and Exchange

For so long as the 2014 Bonds are immobilized with DTC, their registration, transfer andexchange will be governed by the rules and procedures of DTC.

Registration. The Fiscal Agent will keep sufficient books for the registration and transfer of the2014 Bonds, and upon presentation for such purpose, the Fiscal Agent shall, under such reasonableregulations as it may prescribe, register or transfer or cause to be registered or transferred, on saidregister, the 2014 Bonds as hereinbefore provided. The Community Facilities District and the FiscalAgent will treat the Owner of any Bond whose name appears on the Bond Register as the holder andabsolute Owner of such 2014 Bond for all purposes under the Fiscal Agent Agreement.

Transfers of 2014 Bonds. In the event the Community Facilities District discontinues the book-entry only system with DTC, any 2014 Bond may, in accordance with its terms, be transferred, upon theBond Register under the Fiscal Agent Agreement, by the person in whose name it is registered, in personor by such person’s duly authorized attorney, upon surrender of such 2014 Bond for cancellation,accompanied by delivery of a duly 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 anysuch transfer shall be paid by the Community Facilities District. The Fiscal Agent shall collect from theOwner requesting such transfer any tax or other governmental charge required to be paid with respect tosuch transfer. Whenever any 2014 Bond or 2014 Bonds shall be surrendered for transfer, the CommunityFacilities District will execute and the Fiscal Agent will authenticate and deliver a new 2014 Bond or2014 Bonds of the same Series, for like aggregate principal amount(s), maturity(ies) and interest rate(s) inthe denominations herein authorized. Neither the Community Facilities District nor the Fiscal Agent willbe required to make such transfer of 2014 Bonds on or after a Record Date and before the next ensuingInterest Payment Date. The Fiscal Agent will not be required to register transfers or make exchanges of2014 Bonds (a) 15 days prior to the date established by the Fiscal Agent for selection of 2014 Bonds forredemption; or (b) with respect to a 2014 Bond after such 2014 Bond has been selected for redemption

Exchange of 2014 Bonds. 2014 Bonds may be exchanged at the Principal Office of the FiscalAgent for a like aggregate principal amount of 2014 Bonds of authorized denominations and of the samematurity, subject to the terms and conditions of the Fiscal Agent Agreement, including the payment ofcertain charges, if any, upon surrender and cancellation of a 2014 Bond.

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Book-Entry and DTC

DTC will act as securities depository for the 2014 Bonds. The 2014 Bonds will be issued as fullyregistered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such othername as may be requested by an authorized representative of DTC. One fully registered 2014 Bondcertificate will be issued for each maturity of the 2014 Bonds, each in the aggregate principal amount ofsuch maturity, and will be deposited with DTC. See APPENDIX F – “Book-Entry System.”

SECURITY FOR THE 2014 BONDS

General

The 2014 Bonds and all Parity Bonds (as defined below) are secured by a first pledge (whichpledge will be effected in the manner and to the extent provided in the Fiscal Agent Agreement) of all ofthe Special Tax Revenues and all moneys deposited in the Special Tax Fund, Redemption Fund, theReserve Fund (except moneys subject to rebate to the United States federal government) and the SpecialReserve Fund. Pursuant to the Act and the Fiscal Agent Agreement, the Community Facilities Districtwill annually levy the Special Taxes on the 44 homes within Zone 1 in an amount required for thepayment of principal of, and interest on, any outstanding 2014 Bonds becoming due and payable duringthe ensuing year, including any necessary replenishment or expenditure of the Reserve Fund and theSpecial Reserve Fund, as well other payments permitted by law and an amount estimated to be sufficientto pay the Administrative Expenses during such year. The Special Tax Revenues and all moneysdeposited into the applicable accounts (until disbursed as provided in the Fiscal Agent Agreement) arepledged to the payment of the principal of, and interest and any premium on, the 2014 Bonds as providedin the Fiscal Agent Agreement and in the Act until all of the 2014 Bonds have been paid and retired oruntil moneys or non-callable federal securities as described in paragraph 1 of the definition of PermittedInvestments have been set aside irrevocably for that purpose.

Amounts in the Administrative Expense Fund, the Costs of Issuance Fund, the Project Fund andthe Rebate Fund are not pledged to the repayment of the 2014 Bonds. The Project constructed andacquired with the proceeds of the 2014 Bonds is not in any way pledged to pay the debt service on the2014 Bonds, nor are any proceeds of condemnation or destruction of any facilities financed with theproceeds of the 2014 Bonds pledged for such purpose.

Special Taxes

The Community Facilities District has covenanted in the Fiscal Agent Agreement to comply withall requirements of the Act so as to assure the timely levy and collection of Special Taxes, includingwithout limitation, the enforcement of delinquent Special Taxes. The Rate and Method provides that theSpecial Taxes are payable and will be collected in the same manner and at the same time as ordinary advalorem property taxes, provided, however, that the Community Facilities District may collect AnnualSpecial Taxes at a different time or in a different manner if necessary to meet its financial obligations.

Because the Special Tax levy is limited to the Maximum Special Tax rates set forth in theRate and Method, no assurance can be given that, in the event of Special Tax delinquencies, thereceipt of Special Taxes will, in fact, be collected in sufficient amounts in any given year to pay debtservice on the 2014 Bonds.

Although the Special Taxes, when levied, will constitute a lien on parcels subject to taxation, itdoes not constitute a personal indebtedness of the owners of property. There is no assurance that the

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owners of real property will be financially able to pay the annual Special Tax or that they will pay suchtax even if financially able to do so. See “BONDOWNERS’ RISKS” herein.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE SCHOOLDISTRICT, THE COMMUNITY FACILITIES DISTRICT (EXCEPT TO THE LIMITEDEXTENT DESCRIBED HEREIN) OR THE STATE OR ANY POLITICAL SUBDIVISIONTHEREOF IS PLEDGED TO THE PAYMENT OF THE 2014 BONDS. OTHER THAN THESPECIAL TAXES LEVIED WITHIN ZONE 1, NO TAXES ARE PLEDGED TO THE PAYMENTOF THE 2014 BONDS. THE 2014 BONDS ARE NOT A GENERAL OBLIGATION OF THECOMMUNITY FACILITIES DISTRICT, BUT ARE LIMITED OBLIGATIONS OF THECOMMUNITY FACILITIES DISTRICT PAYABLE SOLELY FROM THE SPECIAL TAXESMORE FULLY DESCRIBED HEREIN.

De-Annexation of Zone 2

The Community Facilities District anticipates completion of proceedings to de-annex vacantproperty located in Tract 28851 within Zone 2 from the Community Facilities District and to release suchproperty from the levy of Special Taxes. Regardless of whether such proceedings result in release of suchproperty, the 2014 Bonds are secured only from Special Taxes levied on the 44 homes completed in Zone1, and are not payable from Special Taxes, if any, levied on any other parcels within the CommunityFacilities District.

Rate and Method

General. In 2006, pursuant to the request of landowners, the School District established theCommunity Facilities District with respect to approximately 55.58 gross acres of land within theboundaries of the School District, authorized the levy of special taxes therein pursuant to the Rate andMethod, and authorized the issuance of bonded indebtedness to finance, either directly or indirectly, theacquisition and construction of certain School District facilities, certain water and sewer facilities of theJurupa Community Services District and certain park and recreational facilities of the Jurupa AreaRecreation and Park District. As of October 16, 2014, 44 homes had been completed and closed sales tohomeowners within Zone 1 of the Community Facilities District. No additional homes will be completedwithin Zone 1 of the Community Facilities District.

The Special Tax may be levied and collected within Zone 1 of the Community Facilities Districtto finance, either directly or indirectly, the acquisition and construction of certain School Districtfacilities, certain water and sewer facilities of the Jurupa Community Services District and certain parkand recreational facilities of the Jurupa Area Recreation and Park District according to the Rate andMethod, a copy of which is set forth in APPENDIX B – “Rate and Method of Apportionment forCommunity Facilities District No. 6 of the Jurupa Unified School District.”

The qualified electors approved the rate and method of apportionment of special taxes for theCommunity Facilities District on September 18, 2006.

Capitalized terms used in the following paragraphs but not defined herein have the meaningsgiven them in the Rate and Method.

Rate and Method. The Rate and Method provides the means by which the Board of Educationmay annually levy the Special Taxes within the Community Facilities District at the Assigned AnnualSpecial Tax to finance School District facilities, certain water and sewer facilities of the JurupaCommunity Services District and certain park and recreational facilities of the Jurupa Area Recreationand Park District. The Rate and Method limits the term of the Special Tax to the lesser of 33 Fiscal Years

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after the 2014 Bonds have been issued or Fiscal Year 2042-43. A copy of the Rate and Method isincluded in Appendix B hereto.

Developed, Approved or Undeveloped Property; Taxable or Exempt Property. The Rate andMethod declares that for each Fiscal Year, all Assessor’s Parcels within the Community Facilities Districtshall be classified as Developed Property, Approved Property or Undeveloped Property and Taxable orExempt Property and shall be subject to the Special Taxes in accordance with the Rate and Method.

(i) “Developed Property” means all Assessor’s Parcels of Taxable Property for whichBuilding Permits were issued on or before May 1 of the prior Fiscal Year, provided that suchAssessor’s Parcels were created on or before January 1 of the prior Fiscal Year and that each suchAssessor’s Parcel is associated with a Lot, as determined reasonably by the Board.

(ii) “Approved Property” means an Assessor’s Parcel which represents a Lot in a FinalSubdivision Map that was recorded prior to January 1 of the prior Fiscal year, but for which aBuilding Permit has not been issued on or before May 1 of the prior Fiscal Year.Notwithstanding the above, once an Assessor’s Parcel has been classified Approved Property, itshall remain Approved Property until such time as a Building Permit is issued.

(iii) “Undeveloped Property” means all Assessor’s Parcels of Taxable Property which are notDeveloped Property.

(iv) “Taxable Property” means all Assessor’s Parcels within the Community Facilities Districtwhich are not exempt from the special tax pursuant to law or as Exempt Property (as definedbelow) pursuant to the Rate and Method.

(v) “Exempt Property” is defined to include the following:

(a) Lot 1;

(b) Assessor’s Parcels owned by the State, federal or other local governments;

(c) Assessor’s Parcels which are used as places of worship and are exempt from advalorem property taxes because they are owned by a religious organization;

(d) Assessor’s Parcels used exclusively by a homeowner’s association;

(e) Assessor’s Parcels with public or utility easements making impractical theirutilization for other than the purposes set forth in the easements;

(f) Assessor’s Parcels developed or expected to be developed exclusively for non-residential use, including any use directly servicing any non-residential property,such as parking, as reasonably determined by the Board; and

(g) Any other Assessor’s Parcels at the reasonable discretion of the Board.

Maximum Special Tax. The Maximum Special Tax is defined in the Rate and Method as follows:

Developed Property: The Maximum Special Tax for each Assessor’s Parcel classified asDeveloped Property in a given Zone for any Fiscal Year shall be the amount determined by the greater of(i) the application of the Assigned Annual Special Tax for such Zone or (ii) the application of theAssigned Annual Special Tax for Approved Property for such Zone.

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Approved Property: The Maximum Special Tax for each Assessor’s Parcel classified asApproved Property in a given Zone for any Fiscal Year shall be the amount determined by the applicationof the Assigned Annual Special Tax for such Zone.

Undeveloped Property: There shall be no Annual Special Tax collected fromUndeveloped Property.

Method of Apportionment. Each Fiscal Year, the Board shall levy the Annual Special Tax oneach Assessor’s Parcel of Developed Property in an amount equal to the Assigned Annual Special Taxapplicable to each such Assessor’s Parcel.

Prepayment of Annual Special Taxes. The Annual Special Tax obligation of an Assessor’s Parcelof Developed Property or an Assessor’s Parcel of Approved Property for which a Building Permit hasbeen issued may be prepaid in full, provided that there are no delinquent Special Taxes, penalties orinterest charges outstanding with respect to such Assessor’s Parcel at the time the Annual Special Taxobligation would be prepaid. The Prepayment Amount for an Assessor’s Parcel after the issuance ofbonds is calculated based on the present value of Special Taxes, a Reserve Fund credit and prepayment ofAdministrative Fees, all as specified in Section F of the Rate and Method as set forth in APPENDIX B –“Rate and Method of Apportionment for Community Facilities District No. 6 of the Jurupa UnifiedSchool District.”

Special Tax Levy

$134,713.56 of Special Taxes were been levied on 44 parcels within Zone 1 of the CommunityFacilities District for Fiscal Year 2014-15. All of the foregoing Special Taxes in Fiscal Year 2014-15were levied on Developed Property as defined in the Rate and Method.

Table 2 below summarizes the Fiscal Year 2014-15 Special Tax levy made in accordance withthe Rate and Method:

Table 2

Jurupa Unified School DistrictCommunity Facilities District No. 6 (Zone 1)

Assigned Special Tax RatesFiscal Year 2014-15 Special Tax Levy

SpecialTax Class

BuildingSquare

Feet

Fiscal Year2014-15

AssignedSpecial

Tax Rate

Number ofUnits/Acres

Fiscal Year2014-15

Special TaxLevy

PercentageLevy ofTotal

1 < 2,450 $2,870.36 11 $31,573.96 23.44%2 2,451 – 2,650 3,041.04 16 48,656.64 36.123 2,651 – 2,850 3,122.96 0 0.00 0.004 > 2,850 3,204.88 17 54,482.96 40.44Developed Property N/A 44 $134,713.56 100.00%

Undeveloped Property $0.00 per Acre 0.00 $0.00 0.00%Total NA NA 44 $134,713.56 100.00%

____________________Source: Dolinka Group, LLC.

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As indicated above, under “—Rate and Method,” the Community Facilities District levies onDeveloped Property in an amount equal to the Assigned Special Tax. A portion of the Special TaxRequirement may be utilized for acquisition and/or construction of School District facilities. In the eventthe Community Facilities District were to levy Special Taxes on Developed Property at less than theAssigned Special Tax, pursuant to Section 53321 of the Act and a resolution adopted by the CommunityFacilities District, under no circumstances will the Special Tax levied against any parcel used for privateresidential purposes be increased as a consequence of delinquency or default by the owner of any otherparcel or parcels within Zone 1 of the Community Facilities District by more than 10%. For suchpurposes, a parcel will be considered used for private residential purposes not later than the date on whichan occupancy permit for private residential use is issued.

Proceeds of Foreclosure Sales

Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of theSpecial Tax, the Community Facilities District may order the institution of a superior court action toforeclose the lien therefor within specified time limits. In such an action, the real property subject to theunpaid amount may be sold at judicial foreclosure sale. Such judicial foreclosure action is not mandatory.

Under the Fiscal Agent Agreement, not later than July 1 of each Fiscal Year,

(1) If the Community Facilities District determines that there is a delinquency ofSpecial Taxes from any single parcel of land in Zone 1 of the Community Facilities District equalto or greater than the sum of at least four (4) installments of Special Tax from that parcel, theCommunity Facilities District shall commence foreclosure proceedings against each suchdelinquent parcel.

(2) If the Community Facilities District determines that the total amount ofdelinquent Special Taxes in any prior Fiscal Year for the entire Zone 1 of the CommunityFacilities District, excluding the total delinquencies under subsection (1) above, exceeds fivepercent (5%) of the total Special Taxes due and payable for such prior Fiscal Year, theCommunity Facilities District will commence foreclosure proceedings against all delinquentparcels in Zone 1 of the Community Facilities District.

It should be noted that any foreclosure proceedings commenced as described above could bestayed by the commencement of bankruptcy proceedings by or against the owner of the delinquentproperty. See “BONDOWNERS’ RISKS – Bankruptcy and Foreclosure Delay.”

No assurances can be given that a judicial foreclosure action, once commenced, will becompleted or that it will be completed in a timely manner. See “BONDOWNERS’ RISKS – PotentialDelay and Limitations in Foreclosure Proceedings.” If a judgment of foreclosure and order of sale isobtained, the judgment creditor (the Community Facilities District) must cause a Notice of Levy to beissued. Under current law, a judgment debtor (property owner) has 120 days (or in some cases a shorterperiod) from the date of service of the Notice of Levy and 20 days from the subsequent notice of sale inwhich to redeem the property to be sold. If a judgment debtor fails to so redeem and the property is sold,his only remedy is an action to set aside the sale, which must be brought within 90 days of the date ofsale. If, as a result of such action, a foreclosure sale is set aside, the judgment is revived and the judgmentcreditor is entitled to interest on the revived judgment as if the sale had not been made. Theconstitutionality of the aforementioned legislation, which repeals the former one-year redemption period,has not been tested; and there can be no assurance that, if tested, such legislation will be upheld. Anyparcel subject to foreclosure sale must be sold at the minimum bid price unless a lesser minimum bidprice is authorized by the Owners of 75% of the aggregate principal amount of the 2014 BondsOutstanding.

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No assurances can be given that the real property subject to sale or foreclosure will be soldor, if sold, that the proceeds of sale will be sufficient to pay any delinquent Special Tax installment.The Act does not require the School District or the Community Facilities District to purchase orotherwise acquire any lot or parcel of property offered for sale or subject to foreclosure if there isno other purchaser at such sale. The Act does specify that the Special Tax will have the same lienpriority in the case of delinquency as for ad valorem property taxes.

If the Reserve Fund and the Special Reserve Fund are depleted and delinquencies in the paymentof Special Taxes exist, there could be a default or delay in payments to the 2014 Bondowners pendingprosecution of foreclosure proceedings and receipt by the Community Facilities District of foreclosuresale proceeds, if any. However, within the limits of the Rate and Method and the Act, the CommunityFacilities District may adjust the Special Taxes levied on all property in Zone 1 in future Fiscal Years toprovide an amount, taking into account such delinquencies, required to pay debt service on the 2014Bonds and to replenish the Reserve Fund and the Special Reserve Fund. There is, however, no assurancethat the maximum Special Tax rates will be at all times sufficient to pay the amounts required to be paidon the 2014 Bonds by the Fiscal Agent Agreement. The levy of Special Taxes is subject to the maximumannual amount of Special Taxes authorized by the qualified voters of the Community Facilities Districtand the limitation imposed by Section 53321 of the Act as applied to the Community Facilities District.See “SECURITY FOR THE 2014 BONDS – Special Tax Levy.”

Special Tax Fund

Pursuant to the Fiscal Agent Agreement, the Special Tax Revenues received by Fiscal Agentfrom the Community Facilities District or the County, excluding only Special Tax Revenues representingprepayments of Special Taxes, will be deposited in the Special Tax Fund, which will be held by the FiscalAgent. Special Tax Revenues representing prepayments of Special Taxes shall be deposited in theRedemption Fund and applied to pay the redemption of 2014 Bonds on the next available redemption datein accordance with the Fiscal Agent Agreement. Pending disbursement, moneys in the Special Tax Fundwill be subject to a lien in favor of the Bondowners of the 2014 Bonds as established under the FiscalAgent Agreement.

Disbursements. Amounts in the Special Tax Fund will be allocated, in order of priority, to thefollowing funds in the following amounts: (1) to the Administrative Expense Fund, an amount not inexcess of the Administrative Expense Requirement ($29,291.48 for the first Fiscal Year) as defined in theFiscal Agent Agreement; (2) to the Redemption Fund, (a) an amount sufficient to make the interestpayment on the next succeeding Interest Payment Date on the 2014 Bonds; (b) for transfers occurring onor after September 2 of each year and prior to March 1 of each subsequent year, up to one-half of theamount needed to make the principal payment due on the following September 1; (c) for transfers on orafter March 1 of each year and up to and including such September 1 of each year, the amount which,when combined with the amount transferred pursuant to clause (2)(b) hereof, equals the principal amountdue on the 2014 Bonds on such September 1; (3) to the sinking accounts within the Redemption Fund:(a) for transfers occurring on or after September 2 of each year and prior to March 1 of each subsequentyear, up to one-half of the amount needed to make the Mandatory Sinking Account Payments due on the2014 Bonds on the following September 1; (b) for transfers on or after March 1 of each year and up toand including the following September 1 of each year, the amount which, when combined with theamount transferred pursuant to clause (3)(a) equals the Mandatory Sinking Account Payment due on the2014 Bonds on such September 1; (4) to the Reserve Fund, the amount, if any, required to increase thebalance therein to the Reserve Requirement; (5) to the Administrative Expense Fund, the amount, if any,required to pay Administrative Expenses in excess of the Administrative Expense Requirement; and (6) tothe Special Reserve Fund, the amount, if any, required to increase the balance therein to the SpecialReserve Fund Requirement.

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Once sufficient Special Tax Revenues are on deposit in the Special Tax Fund to make thepayments specified in (1)-(6) above, any remaining Special Tax Revenues will promptly be remitted tothe Community Facilities District, free and clear of the lien and pledge established under the Fiscal AgentAgreement.

Investment. Moneys in the Special Tax Fund will be invested and deposited by the CommunityFacilities District as described in “Investment of Moneys in Funds” below. Interest earnings and profitsresulting from such investment and deposit will be retained in the Special Tax Fund to be used for thepurposes thereof.

Redemption Fund

The Redemption Fund is established as a separate fund to be held by the Fiscal Agent to the creditof which deposits shall be made as required by the Fiscal Agent Agreement from the Project Fund, theSpecial Tax Fund, the Reserve Fund and the Special Reserve Fund, and any other amounts required to bedeposited therein by the Fiscal Agent Agreement or the Act. Moneys in the Redemption Fund will beheld by the Fiscal Agent for the benefit of the District and the Owners of the 2014 Bonds and will shall bedisbursed for the payment of the principal of, and interest and any premium on, the 2014 Bonds asdescribed below.

Payment of Mandatory Sinking Account Payments. The Fiscal Agent will establish and maintainwithin the Redemption Fund a separate subaccount for the Sinking Account payments. On eachMandatory Sinking Account Payment date, the Fiscal Agent will apply the amount deposited in theMandatory Sinking Account for the purpose of applying the Mandatory Sinking Account Paymentrequired on that date to the redemption (or payment at maturity, as the case may be) of Term Bonds, uponthe notice and in the manner provided in the Fiscal Agent Agreement; provided that, at any time prior togiving notice of such redemption, the Fiscal Agent will apply such moneys to the purchase of TermBonds at public or private sale, as and when and at such prices (including brokerage and other charges),as the District may direct, except that the purchase price (excluding accrued interest) shall not exceed thepar amount of such Term Bonds. If, during the six-month period immediately preceding any MandatorySinking Account Payment date, the Fiscal Agent has purchased Term Bonds with moneys in such SinkingAccount, or, during said period and prior to giving said notice of redemption, the District has depositedTerm Bonds with the Fiscal Agent, or Term Bonds were at any time purchased or redeemed by the FiscalAgent from the Redemption Fund and allocable to said Mandatory Sinking Account Payment, such Bondsso purchased or deposited or redeemed will be applied, to the extent of the full principal amount thereof,to reduce said Mandatory Sinking Account Payment. All Term Bonds purchased from a Sinking Accountor deposited by the District with the Fiscal Agent shall be allocated first to the next succeedingMandatory Sinking Account Payment, then to remaining Mandatory Sinking Account Payments as theDistrict may direct.

Disbursements. On or before the day which is ten (10) days prior to each Interest Payment Date,the Fiscal Agent will transfer from the Special Tax Fund to the Redemption Fund an amount sufficient tomake payment to the Owners for the principal of, interest and any premium, then due and payable on the2014 Bonds. The Fiscal Agent will pay the principal of, interest and any premium due on the 2014 Bondsfrom money available therefor on deposit in the Redemption Fund. Five (5) Business Days prior to eachInterest Payment Date, the Fiscal Agent will determine if the amounts then on deposit in the RedemptionFund are sufficient to pay all such amounts due on the 2014 Bonds on such Interest Payment Date. Insuch event that amounts in the Redemption Fund are insufficient for such purpose, the Fiscal Agent, on orbefore such Interest Payment Date, will withdraw from the Special Reserve Fund and then the ReserveFund, in the manner described in the Fiscal Agent Agreement to the extent of any funds therein, theamount of such insufficiency, and shall transfer any amounts so withdrawn to the Redemption Fund, to beapplied to the payment of the 2014 Bonds. If, after the foregoing transfers, there are nonetheless

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insufficient funds in the Redemption Fund to make the payments provided for in this Section, the FiscalAgent shall apply the available funds first to the payment of interest on the 2014 Bonds, then to thepayment of principal due on the 2014 Bonds, and then to payment of principal due on the 2014 Bonds byreason of Bonds called for optional redemption pursuant to the Fiscal Agent Agreement.

Any prepayments of Special Taxes made pursuant to Section E of the Rate and Method will bedeposited in the Redemption Fund and applied to the redemption of the 2014 Bonds on the next availableredemption date in accordance with the Fiscal Agent Agreement.

Investment. Moneys in the Redemption Fund will be invested and deposited in accordance withthe Fiscal Agent Agreement. Interest earnings and profits resulting from such investment and deposit willbe retained in the Redemption Fund until applied to the redemption of Bonds.

Reserve Fund

In order to further secure the payment of principal of and interest on the 2014 Bonds, certainproceeds of the 2014 Bonds will be deposited into the Reserve Fund in an amount equal to the ReserveRequirement (see “ESTIMATED SOURCES AND USES OF FUNDS” herein). The ReserveRequirement is defined in the Fiscal Agent Agreement to mean, as of any date of calculation, an amountequal to the least of (i) the maximum annual debt service on the Outstanding 2014 Bonds as of the date ofcalculation, (ii) 10% of the original principal amount of the 2014 Bonds, or (iii) 125% of the averageannual debt service on the 2014 Bonds due in any remaining bond year.

Moneys in the Reserve Fund shall be used for the purpose of (i) making transfers to theRedemption Fund to pay the principal of, including mandatory sinking fund payments, and interest on the2014 Bonds when due, in the event that moneys in the Redemption Fund are insufficient therefor, or (ii)defeasance of the 2014 Bonds. In connection with any optional redemption or a special mandatoryredemption or a defeasance of the 2014 Bonds in part, amounts on deposit in the Reserve Fund whichwould be in excess of the Reserve Requirement following such redemption or partial defeasance shall betransferred to the Redemption Fund prior to such redemption and applied to such redemption of 2014Bonds.

If Special Taxes are prepaid and a portion of 2014 Bonds are to be redeemed with the proceeds ofsuch prepayment, a portion of the Reserve Fund equal to the lesser of (i) the reduction in the ReserveRequirement resulting from the redemption of 2014 Bonds or (ii) 10% of the amount of 2014 Bondswhich will be redeemed will be applied to the redemption of such 2014 Bonds.

Moneys in the Reserve Fund will be invested and deposited as described in “Investment ofMoneys in Funds” below.

See APPENDIX C – “Summary of Certain Provisions of the Fiscal Agent Agreement” for adescription of the timing, purpose and manner of disbursements from the Reserve Fund.

Special Reserve Fund

In order to further secure the payment of principal of and interest on the 2014 Bonds, certainSpecial Taxes on deposit with the Community Facilities District will be deposited into the SpecialReserve Fund in an amount equal to the Special Reserve Fund Requirement (see “ESTIMATEDSOURCES AND USES OF FUNDS” herein). The Special Reserve Fund Requirement is defined in theFiscal Agent Agreement to mean the sum of $148,106.94.

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Moneys in the Special Reserve Fund shall be used for the purpose of making transfers to theRedemption Fund to pay the principal of, including mandatory sinking fund payments, and interest on the2014 Bonds when due, in the event that moneys in the Redemption Fund are insufficient therefor.

Moneys in the Special Reserve Fund will be invested and deposited as described in “Investmentof Moneys in Funds” below.

See APPENDIX C – “Summary of Certain Provisions of the Fiscal Agent Agreement” for adescription of the timing, purpose and manner of disbursements from the Reserve Fund.

Administrative Expense Fund

The Fiscal Agent will receive the transfer of Special Taxes from the Community FacilitiesDistrict from the Special Tax Fund and deposit in the Administrative Expense Fund an amount to payAdministrative Expenses.

Pursuant to the Fiscal Agent Agreement, moneys in the Administrative Expense Fund willnot be considered a trust fund held for the benefit of the Owners of the 2014 Bonds and will not beavailable for the payment of debt service on the 2014 Bonds.

Project Fund

The Fiscal Agent will deposit a portion of the proceeds of the 2014 Bonds in the Project Fund.Moneys in the Project Fund will be disbursed to finance, either directly or indirectly, the acquisition andconstruction of certain School District facilities, certain water and sewer facilities of the JurupaCommunity Services District and certain park and recreational facilities of the Jurupa Area Recreationand Park District pursuant to a requisition of the Community Facilities District.

Pursuant to the Fiscal Agent Agreement, moneys in the Project Fund will not be considereda trust fund held for the benefit of the Owners of the 2014 Bonds and will not be available for thepayment of debt service on the 2014 Bonds.

Investment of Moneys in Funds

Moneys in any fund or account created or established by the Fiscal Agent Agreement and held bythe Fiscal Agent will be invested by the Fiscal Agent in Authorized Investments, as directed by theCommunity Facilities District. In the absence of any direction from the Community Facilities District,the Fiscal Agent will moneys in a money-market fund meeting the requirements of an AuthorizedInvestment which by its term permits withdrawal of such funds prior to the date on which such moneysare required to be paid out hereunder. See APPENDIX C – “Summary of Certain Provisions of the FiscalAgent Agreement” for a definition of “Permitted Investments.”

Payment of Rebate Obligation

The Community Facilities District is required to calculate excess investment earnings inaccordance with the requirements set forth in the Fiscal Agent Agreement. If necessary, the CommunityFacilities District may use amounts in the Special Tax Fund, or amounts on deposit in the AdministrativeExpense Fund and other funds available to the Community Facilities District (except amounts required topay debt service on the 2014 Bonds) to satisfy rebate obligations.

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Parity Bonds for Refunding Purposes Only

Bonds issued on a parity with the 2014 Bonds (“Parity Bonds”) may be issued for refundingpurposes only and subject to specific conditions including that the Community Facilities District must bein compliance with all covenants set forth in the Fiscal Agent Agreement and any Supplement then ineffect and a certificate of the Community Facilities District to that effect will be filed with the FiscalAgent. See APPENDIX C – “Summary of Certain Provisions of the Fiscal Agent Agreement.”

Special Taxes Are Not Within Teeter Plan

The County has adopted a Teeter Plan as provided for in Section 4701 et seq. of the CaliforniaRevenue and Taxation Code, under which a tax distribution procedure is implemented and secured rolltaxes are distributed to taxing agencies within the County on the basis of the tax levy, rather than on thebasis of actual tax collections. However, by policy, the County does not include assessments,reassessments and special taxes in its Teeter program. The Special Taxes are not included in the County’sTeeter Program.

COMMUNITY FACILITIES DISTRICT NO. 6 (ZONE 1)

General Information

The Community Facilities District is located in the northern portion of the City of Jurupa Valleywhich was incorporated on July 1, 2011. The Community Facilities District is non-contiguous. Zone 1 ofthe Community Facilities District consists of two non-contiguous parcels. 30 homes have beenconstructed on approximately 14.69 acres located south of State Route 60 south of Jurupa Road and westof Tyrolite Street (referred to herein as the “Tract 31301 Portion” of Zone 1). 14 homes have beenconstructed on approximately 6.595 acres located south of State Route 60, near the intersection of KirbyDrive and Jurupa Road (referred to herein as the “Tract 31875 Portion” of Zone 1). Zone 2 of theCommunity Facilities District, consists of approximately 28.57 acres of vacant land located north of StateRoute 60 just east of Pyrite Street with access off Granite Hill Drive. In addition to the 30 homes, there isone pre-existing home within the Tract 31301 Portion of Zone 1 which qualified as exempt property inaccordance with the Rate and Method and is not subject to the levy of the Special Tax.

Zone 1 is not within the 100-year flood plain. Utility services for parcels in the CommunityFacilities District are provided by Southern California Gas & Electric (gas and electricity), the JurupaCommunity Services District (water and sewage), Charter Communications (cable) and AT&T(telephone). Waste Management provides refuse service for homes.

Authority for Issuance

The 2014 Bonds are issued pursuant to the Act and the Fiscal Agent Agreement. In addition, asrequired by the Act, the Board of Education of the School District has taken the following actions withrespect to establishing the Community Facilities District, and authorizing issuance of the 2014 Bonds:

Resolution of Intention: On August 7, 2006, the Board of Education adopted ResolutionNo. 2007/06 stating its intention to establish the Community Facilities District and establishing theboundaries thereof and to authorize the levy of special taxes within the Community Facilities Districtpursuant to the rate and method of apportionment.

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Resolution of Necessity: On August 7, 2006, the Board of Education adopted ResolutionNo. 2007/07 declaring the necessity to incur bonded indebtedness to construct, acquire, furnish and equipthe public facilities within the Community Facilities District.

Resolution Approving Joint Community Facilities Agreement: On August 7, 2006, the Board ofEducation adopted Resolution No. 2007/08 approving the Joint Community Facilities Agreement, by andamong the School District, Jurupa Area Recreation and Park District and Far West Industries, relating tothe Community Facilities District. On September 18, 2006, the Board of Education adopted ResolutionNo. 2007/19 approving the Joint Community Facilities Agreement, by and among the School District, theJurupa Community Services District and Far West Industries, relating to the Community FacilitiesDistrict. On November 24, 2014, the Board of the Jurupa Area Recreation and Park District approved anextension of the term of the Joint Community Facilities Agreement.

Resolution of Formation: Immediately following a noticed public hearing on September 18,2006, the Board of Education adopted Resolution No. 2007/10 (the “Resolution of Formation”), whichapproved the establishment of the Community Facilities District, the rate and method of apportionmentand authorized the levy of the Special Taxes pursuant to the Rate and Method, subject to the approval ofsuch levy by the qualified voters.

Landowner Election and Declaration of Results: On September 18, 2006, an election was heldwithin the Community Facilities District in which the landowners eligible to vote, being the qualifiedelectors, approved the ballot proposition authorizing the issuance of up to $12,000,000 in bonds withrespect to the Community Facilities District to finance the acquisition and construction of the eligibleSchool District facilities, water and sewer facilities of the Jurupa Community Services District and certainpark and recreational facilities of the Jurupa Area Recreation and Park District. The qualified electorsalso approved the levy of a special tax in accordance with the rate and method and the establishment of anappropriations limit for the Community Facilities District.

On September 18, 2006, the Board of Education adopted Resolution No. 2006/13 pursuant towhich the Board of Education approved the canvass of the votes.

Special Tax Lien and Levy: Notice of Special Tax Lien was recorded in the real property recordsof Riverside County on September 27, 2006, as Document No. 2006-0711977 (the “Notice of Special TaxLien”).

Ordinance Levying Special Taxes: On October 2, 2006, the Board of Education adopted anOrdinance No. 2007/05 levying the Special Tax.

Resolution Authorizing Issuance of the 2014 Bonds: On November 17, 2014, the Board ofEducation adopted Resolution No. 2015/37, approving issuance of the 2014 Bonds.

Special Tax Collections

The Special Tax on Developed Property authorized for the 2013-14 Fiscal Year in theCommunity Facilities District was $132,071.96, which was levied against 44 parcels. All of such parcelshad paid the second installment of Special Taxes as of June 30, 2014. For the Fiscal Year 2013-14, noSpecial Taxes were levied on Undeveloped Property. The Special Tax on Developed Property authorizedfor the 2014-15 Fiscal Year in Zone 1 is $134,713.56 levied against 44 parcels.

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Table 3 below sets forth the Special Tax collections and delinquencies for Fiscal Years 2007-08 through 2013-14, all of which was levied onDeveloped Property within Zone 1 of the Community Facilities District.

Table 3Jurupa Unified School District

Community Facilities District No. 6 (Zone 1)

Special Tax Collections(1)

(As of June 30 of the Applicable Fiscal Year)

Subject Fiscal Year Ending June 30th As of June 30, 2014

Fiscal YearParcelsLevied

AggregateAnnual

Special Tax

Total AnnualSpecialTaxes

CollectedParcels

Delinquent

Fiscal YearAmount

Delinquent

Fiscal YearDelinquency

Rate

RemainingParcels

Delinquent

RemainingAmount

Delinquent

RemainingDelinquency

Rate

2007/2008 30 $79,802.40 $71,503.60 4 $8,298.80 10.40% 0 $0.00 0.00%

2008/2009 30 80,398.60 74,429.48 3 6,969.12 8.56 0 0.00 0.00

2009/2010 44 122,014.26 119,111.50 1 2,902.76 2.38 0 0.00 0.00

2010/2011 44 124,454.34 124,454.34 0 0.00 0.00 0 0.00 0.00

2011/2012 44 126,943.72 125,510.90 1 1,432.82 1.13 0 0.00 0.00

2012/2013 44 129,482.42 129,482.42 0 0.00 0.00 0 0.00 0.00

2013/2014 44 132,071.96 132,071.96 0 0.00 0.00 0 0.00 0.00

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Assessed Value

The 44 homes within Zone 1 have been completed with closed sales to homeowners for a numberof years. The aggregate assessed value based on the County Assessor’s records of $18,079,840.00 for the44 homes within Zone 1 results in an approximate value-to-lien ratio of 8.61 to 1, calculated with respectto the 2014 Bonds. There currently are no other direct and overlapping tax and assessment bonds securedby the property within Zone 1 of the Community Facilities District. Jurupa Area Recreation and ParkDistrict Community Facilities District No. 2006-1 levies a special tax on such parcels, but as of October1, 2014, has not issued bonds secured by such special tax. See Table 4 below. The value-to-lien ratio ofindividual parcels will differ from the foregoing aggregate value. See also “SECURITY FOR THE 2014BONDS – Rate and Method,” “COMMUNITY FACILITIES DISTRICT NO. 6 (ZONE 1) – Direct andOverlapping Debt” and “BONDOWNERS’ RISKS –Assessed Values” herein, for information relating tooverlapping indebtedness.



Assessed Values and Value to Burden Ratios by Property Ownership

Tax Class

BuildingSquare

Feet

Numberof

ParcelsAssessedValue(1) Bonds(2)

Value-to-Lien

BurdenRatio(3)

Fiscal Year2014-15

Special TaxLevy

Percent ofAssignedAnnual

Special Taxes

1 < 2,450 11 $4,383,784.00 $492,194.82 8.91:1 $31,573.96 23.44%

2 2,450 – 2,650 16 6,397,446.00 758,490.41 8.43:1 48,656.64 36.12

3 2,651 – 2,850 0 0.00 0.00 0.00:1 0.00 0.00

4 > 2,850 17 7,298,610.00 849,314.77 8.59:1 54,482.96 40.44

Total 44 $18,079,840.00 $2,100,000.00 8.61:1 $134,713.56 100.00%

(1) Fiscal Year 2014-15 assessed value from County Assessor’s office.(2) Bond amounts are allocated based on the percentage of the Fiscal Year 2014-15 Special Tax levy.(3) Actual value-to-lien ratio per lot may vary.


Concentration of Special Tax Obligation

As of November 1, 2014, the Taxable Property in Zone 1 of the Community Facilities District isowned by 44 individual homeowners. Numerous future delinquencies by the owners of Taxable Propertyin Zone 1 in the payment of property taxes (and, consequently, the Special Taxes, which are collected onthe ordinary property tax bills) when due could result in a deficiency in Special Tax revenues necessary topay debt service on the 2014 Bonds, which could in turn result in the depletion of the Special ReserveFund and the Reserve Fund, prior to reimbursement from the resale of foreclosed property or payment ofthe delinquent Special Tax. In that event, there could be a delay or failure in payments of the principal ofand interest on the 2014 Bonds. See “SECURITY FOR THE SERIES 2014 BONDS – Reserve Fund,”and “ – Special Reserve Fund,” and “COMMUNITY FACILITIES DISTRICT NO. 6 (ZONE 1) – SpecialTax Collections.”

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Direct and Overlapping Debt

Table 5 below sets forth the existing authorized indebtedness payable from taxes and assessmentsthat may be levied within Zone 1 of the Community Facilities District, prepared by National Tax Data,Inc., and prepared October 22, 2014 (the “Debt Report”). The Debt Report is included for generalinformation purposes only. In certain cases, the percentages of debt calculations are based on assessedvalues, and values may change when home re-sales occur and assessed values increase or decrease toreflect housing values. The Community Facilities District believes the information is current as of itsdate, but makes no representation as to its completeness or accuracy. Other public agencies, such as theCounty, may issue additional indebtedness at any time, without the consent or approval of the SchoolDistrict or the Community Facilities District. See “ – Overlapping Direct Assessments” below.

The Debt Report generally includes long term obligations sold in the public credit markets bypublic agencies whose boundaries overlap the boundaries of Zone 1 in whole or in part. Such long termobligations generally are not payable from property taxes, assessment or special taxes on land in Zone 1.In many cases long term obligations issued by a public agency are payable only from the general fund orother revenues of such public agency. Additional indebtedness could be authorized by the CommunityFacilities District, the School District, the County or other public agencies at any time.

The Community Facilities District has not undertaken to commission annual appraisals of themarket value of property in Zone 1 of the Community Facilities District for purposes of its AnnualReports pursuant to the Continuing Disclosure Agreement, and information regarding property values forpurposes of a direct and overlapping debt analysis which may be contained in such reports will be basedon assessed values as determined by the County Assessor. See Appendix D hereto for the form of theContinuing Disclosure Agreement.

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Community Facilities District No. 6 (Zone 1)Detailed Direct and Overlapping Debt

I. Assessed Value2014-15 Secured Roll Assessed Value $33,968,735

II. Secured Property Taxes

Description on Tax Bill TypeTotal

Parcels Total Levy%

Applicable Parcels Levy

Basic 1% Levy PROP13 903,070 $2,133,488,338.24 0.00856% 45 (1) $182,640.03

County of Riverside LLMD No. 89-1C, Zone 61 LLMD 31 456.32 100.00000 31 456.32

County of Riverside LLMD No. 89-1C, Zone 73 LLMD 14 456.12 100.00000 14 456.12

Jurupa Area Recreation and Park District CFD No. 2006-1 CFDPAYG 45 13,637.70 100.00000 45 13,637.70

Jurupa Area Recreation and Park District Maintenance PARK 23,200 429,669.60 0.15710 45 675.00

Jurupa Community Services District LMD No. 2001-1, Zone R LLMD 31 2,945.62 100.00000 31 2,945.62

Jurupa Community Services District LMD No. 2001-1, Zone X LLMD 14 1,228.92 100.00000 14 1,228.92

Jurupa Community Services District LMD No. 98-1, Zone J LMD 31 7,423.26 100.00000 31 7,423.26

Jurupa Unified School District CFD No. 6 CFD 45 134,713.56 100.00000 44 134,713.56

Jurupa Unified School District Debt Service GOB 23,861 3,444,976.31 0.24488 45 8,435.93

Jurupa Valley Recycling Trash, Waste of Refuse Fee TRASH 574 176,649.90 0.07712 1 136.24

Metropolitan Water District of Southern California Debt Service GOB 256,637 2,792,346.75 0.02289 45 639.08Metropolitan Water District of Southern California StandbyCharge (West) STANDBY 254,360 3,552,026.50 0.01168 45 414.90

Riverside Community College District Debt Service GOB 255,378 14,121,707.76 0.02316 45 3,270.86Riverside County Flood Control and Water Conservation DistrictNPDES (Santa Ana) FLOOD 369,156 2,487,120.36 0.00698 45 173.50

WRCOG HERO Financing Program (Funded 2012-2013) FEE/CHARGE 3,039 6,516,369.46 0.04776 1 3,112.34

2014-15 TOTAL PROPERTY TAX LIABILITY $360,359.38

TOTAL PROPERTY TAX LIABILITY AS A PERCENTAGE OF 2014-15 ASSESSED VALUATION 1.06%

III. Land Secured Bond IndebtednessOutstanding Direct and Overlapping Bonded Debt Type Issued Outstanding % Applicable Parcels Amount

Jurupa Unified School District CFD No. 6 CFD $0 $0 100.00000% 44 $0

TOTAL LAND SECURED BOND INDEBTEDNESS (2) $0

TOTAL OUTSTANDING LAND SECURED BONDINDEBTEDNESS (2) $0

IV. General Obligation Bond IndebtednessOutstanding Direct and Overlapping Bonded Debt Type Issued Outstanding % Applicable Parcels Amount

Jurupa Unified School District GOB 2001 GOB $57,997,972 $44,747,972 0.24442% 45 $109,372

Metropolitan Water District of Southern California GOB 1966 GOB 850,000,000 132,275,000 0.00080 45 1,054

Riverside Community College District GOB 2004 GOB 264,999,278 224,052,323 0.02305 45 51,650

TOTAL GENERAL OBLIGATION BOND INDEBTEDNESS (2) $162,076

TOTAL OUTSTANDING GENERAL OBLIGATIONBOND INDEBTEDNESS (2) $162,076

(1)There is one lot which is exempt from the levy of the Special Tax.

(2)Additional bonded indebtedness or available bond authorization may exist but are not shown because a tax was not levied for the referenced fiscal year.

____________________

Source: National Tax Data, Inc.

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Table 6 below sets forth a sample Fiscal Year 2014-15 overall tax rates projected to be applicableto a Detached Unit. Table 6 also sets forth those entities with fees, charges, ad valorem taxes and specialtaxes regardless of whether those entities have issued debt.



Fiscal Year 2014-15 Tax Rates(Single-Family Detached Unit Containing 2,442 Building Square Feet)

Assessed Valuations and Property Taxes

Assessed Value(1) $398,000

Homeowner's Exemption (7,000)

Net Assessed Value(2) $391,000

Ad Valorem Property TaxesPercent ofTotal AV Amount

General Purposes 1.00000% $3,910.00

Ad Valorem Tax Overrides

Jurupa Unified School District Debt Service 0.046189% $180.60

Metropolitan Water District of Southern California Debt Service 0.003499 13.68

Riverside Community College District Debt Service 0.017908 70.02

Total Ad Valorem Property Taxes 1.067596% $4,174.30

Assessments, Special Taxes and Parcel Charges(3)

County of Riverside LLMD No. 89-1C, Zone 61 $14.72

Jurupa Area Recreation and Park District CFD No. 2006-1 303.06

Jurupa Area Recreation and Park District Maintenance 15.00

Jurupa Community Services District LMD No. 2001-1, Zone R 95.02

Jurupa Community Services District LMD No. 98-1, Zone J 239.46

Metropolitan Water District of Southern California Standby Charge West 9.22

Riverside County Flood Control and Water Conservation District NPDES (Santa Ana) 3.84

Jurupa Unified School District CFD No. 6 $2,870.36

Total Assessments, Special Taxes and Parcel Charges $3,550.68

Total Property Taxes $7,724.98

Total Effective Tax Rate 1.94%

(1) Fiscal Year 2014-15 assessed valuation for a single-family detached unit containing 2,442 building square feet, selected to represent the medianeffective tax rate for a single-family detached unit with CFD No. 6.

(2) Net Assessed Value reflects estimated total assessed value for the parcel net of homeowner’s exemption.

(3) All charges and special assessments are based on a Lot size of less than one (1) acre.


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Overlapping Direct Assessments

As indicated in the table above, properties within the Community Facilities District are subject toa variety of standby charges, direct assessments, maintenance assessments, special assessments andservice charges. Most of these charges are in amounts less than $500 per annum. Other than the SpecialTaxes levied with respect to the 2014 Bonds, the Community Facilities District is not aware of whetherthe properties within Zone 1 are subject to sewer service charges or special taxes in excess of $500 peryear. The direct assessments are described below:

County of Riverside LLMD 89-1C, Zone 61: This pay-as-you-go assessment is used to financethe installation, maintenance and servicing of landscaping, trails, fencing, irrigation, streetlights, trafficsignals, bridge lights, graffiti abatement, bio-swales, and fossil filters within the district. A total of 31parcels within CFD No. 6 are subject to this assessment. The Fiscal Year 2014-15 assessment for parcelswithin Zone 61 was $14.72. This assessment will escalate each year by the greater of two percent (2%) orthe percentage increase in the Consumer Price Index for all Urban Consumers.

County of Riverside, LLMD 89-1C, Zone 73: This pay-as-you-go assessment is used to financethe installation, maintenance and servicing of landscaping, trails, fencing, irrigation, streetlights, trafficsignals, bridge lights, graffiti abatement, bio-swales, and fossil filters within the district. A total of 14parcels within CFD No. 6 are subject to this assessment. The Fiscal Year 2014-15 assessment for parcelswithin Zone 73 was $32.58. This assessment will escalate each year by the greater of two percent (2%) orthe percentage increase in the Consumer Price Index for all Urban Consumers.

Jurupa Area Recreation and Park District CFD No. 2006-1: This special tax funds themaintenance and improvement of parks and recreational areas. There has not been debt issued, nor arethere plans to issue any debt. The Fiscal Year 2014-15 assessment was $303.06 per parcel. Thisassessment will escalate each year by the greater of two percent (2%) or the percentage increase in theConsumer Price Index for all Urban Consumers.

Jurupa Area Recreation and Park District Maintenance: This pay-as-you-go assessment isused to fund the maintenance of parks and recreational areas in the Jurupa Park and RecreationMaintenance District. The assessment is fixed at $15.00 per unit, but can be increased by a vote of thepublic.

Jurupa Community Services District LMD No. 2001-1, Zone R: This assessment funds theenergy costs for street lighting, operation and maintenance of the facilities, and administrative expenses.A total of 31 parcels within CFD No. 6 are subject to this assessment. The assessment for Fiscal Year2014-15 was $95.02. The assessment is calculated each year based upon the total estimated cost of theabove items and the number of contributing properties.

Jurupa Community Services District LMD No. 2001-1, Zone X: This assessment funds theenergy costs for street lighting, operation and maintenance of the facilities, and administrative expenses.A total of 14 parcels within CFD No. 6 are subject to this assessment. The assessment for Fiscal Year2014-15 was $87.78. The assessment is determined each year by the annual expenses relating to theabove mentioned items and the number of contributing properties.

Jurupa Community Services District LMD No 98-1, Zone J: This assessment is used to fundmaintenance and landscaping within Zone J. A total of 31 parcels within CFD No. 6 are subject to theassessment. The Fiscal Year 2014-15 assessment was $239.46 per parcel. The maximum assessment forFiscal Year 2014-15 was $244.25. This maximum assessment escalates each year by two percent (2%).

Metropolitan Water District of Southern California Standby Charge (West): This pay-as-you-go assessment is used to fund capital improvements to the water distribution system and the construction

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and maintenance of reservoirs. The assessment is fixed at $9.22 per parcel, but can be increased by a voteof the public.

Santa Margarita NPDES Flood Control Storm Water/Clean Water: This pay-as-you-goassessment is used to fund educational programs, such as those to increase awareness for the bestmanagement of storm drains. The assessment rate is calculated by multiplying the Benefit AssessmentUnit ("BAU") rate of $4.00 per BAU by the BAU for that land use category. The BAU is computedbased upon the parcel’s size (acreage) and its land use classification. A single-family residential on a7,200 square foot lot is defined as one (1) BAU. The BAUs for other types of land use are calculated inproportion to the amount of runoff generated by a single-family residence on a 7,200 square foot lot. Thisassessment is fixed unless there is a vote to increase the assessment.

The Community Facilities District has no control over the amount of additional debt payable fromtaxes or assessments levied on all or a portion of the property within a special district which may beincurred in the future by other governmental agencies, including, but not limited to, the County or anyother governmental agency having jurisdiction over all or a portion of the property within the CommunityFacilities District. Furthermore, nothing prevents the owners of property within Zone 1 of theCommunity Facilities District from consenting to the issuance of additional debt by other governmentalagencies which would be secured by taxes or assessments on a parity with the Special Taxes. To theextent such indebtedness is payable from assessments, other special taxes levied pursuant to the Act ortaxes, such assessments, special taxes and taxes will be secured by liens on the property within a districton a parity with a lien of the Special Taxes.

Accordingly, the debt on the property within the Community Facilities District could increase,without any corresponding increase in the value of the property therein, and thereby severely reduce theratio that exists at the time the 2014 Bonds are issued between the value of the property and the debtsecured by the Special Taxes and other taxes and assessments which may be levied on such property. Theincurring of such additional indebtedness could also affect the ability and willingness of the propertyowners within Zone 1 of the Community Facilities District to pay the Special Taxes when due.

Moreover, in the event of a delinquency in the payment of Special Taxes, no assurance can begiven that the proceeds of any foreclosure sale of the property with delinquent Special Taxes would besufficient to pay the delinquent Special Taxes. See “BONDOWNERS’ RISKS – Assessed Values.”

BONDOWNERS’ RISKS

In addition to the other information contained in this Official Statement, the following risk factorsshould be carefully considered in evaluating the investment quality of the 2014 Bonds. The CommunityFacilities District and the Underwriter caution prospective investors that this discussion does not purportto be comprehensive or definitive and does not purport to be a complete statement of all factors whichmay be considered as risks in evaluating the credit quality of the 2014 Bonds. The occurrence of one ormore of the events discussed herein could adversely affect the ability or willingness of property owners inZone 1 to pay their Special Taxes and the Community Facilities District Special Taxes when due. Anysuch failure to pay Special Taxes could result in the inability of the Community Facilities District to makefull and punctual payments of debt service on the 2014 Bonds. In addition, the occurrence of one or moreof the events discussed herein could adversely affect the value of the property in Zone 1.

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Risks of Real Estate Secured Investments Generally

The Bondowners will be subject to the risks generally incident to an investment secured by realestate, including, without limitation, (i) adverse changes in local market conditions, such as changes in themarket value of real property in the vicinity of Zone 1, the supply of or demand for competitive propertiesin such area, and the market value of residential property in the event of sale or foreclosure; (ii) changesin real estate tax rate and other operating expenses, governmental rules (including, without limitation,zoning laws and laws relating to endangered species and hazardous materials) and fiscal policies; and (iii)natural disasters (including, without limitation, earthquakes, landslides, wildfires and floods), which mayresult in uninsured losses.

Economic Uncertainty

In recent years there have been local economic uncertainty and volatility within the region.Unemployment rates have decreased to approximately 8.7% for the City of Riverside (not seasonallyadjusted) as compared to 10.4% for calendar year 2013, as of October 17, 2014, and approximately 8.6%(not seasonally adjusted) for Riverside County as compared to 10.3% for calendar year 2013. TheCommunity Facilities District cannot predict how long these conditions will last or whether to what extentthey may affect the ability of homeowners in Zone 1 to pay Special Taxes or the marketability of the 2014Bonds.

State Budget

As a result of the slow State and national economies, the State in recent years experienced seriousbudgetary shortfalls. The effect of the State revenue shortfalls on the local or State economy or on thedemand for, or value of, the property within Zone 1 of the Community Facilities District cannot bepredicted.

Special Taxes Are Not Personal Obligations

The current and future owners of land within Zone 1 of the Community Facilities District are notpersonally liable for the payment of the Special Taxes. Rather, the Special Tax is an obligation only ofthe land within Zone 1 of the Community Facilities District. If the value of the land within Zone 1 of theCommunity Facilities District is not sufficient to fully secure the Special Tax, then the CommunityFacilities District has no recourse against the landowner under the laws by which the Special Tax hasbeen levied and the 2014 Bonds have been issued.

The 2014 Bonds Are Limited Obligations of the Community Facilities District

The Community Facilities District has no obligation to pay principal of and interest on the 2014Bonds in the Special Tax collections with respect to Zone 1 are delinquent, other than from amounts, ifany, on deposit in the Reserve Fund or funds derived from the tax sale or foreclosure and sale of parcelson which levies of the Special Tax are delinquent, nor is the Community Facilities District obligated toadvance funds to pay such debt service on the 2014 Bonds.

Assessed Values

Prospective purchasers of the 2014 Bonds should not assume that the land within Zone 1 couldbe sold for the assessed amount described in this Official Statement at a foreclosure sale for delinquentSpecial Taxes. The assessed values summarized hereto estimates the fee simple interest assessed value ofthe property within Zone 1. This value is merely the amount of the assessed value in the records

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maintained by the County Assessor. The assessed value relates to sale by a willing seller to a willingbuyer at a point in time, as adjusted by State law. Consequently, the assessed value is of limited use inpredicting the selling price at a foreclosure sale, because the sale is forced and the buyer may not have thebenefit of full information.

No assurance can be given that if any of the Taxable Property in Zone 1 should becomedelinquent in the payment of Special Taxes, and be foreclosed upon, that such property could be sold forthe assessed value.

Value-to-Lien Ratios

Value-to-lien ratios have traditionally been used in land-secured bond issues as a measure of the“collateral” supporting the willingness of property owners to pay their special taxes and assessments (and,in effect, their general property taxes as well). The value-to-lien ratio is mathematically a fraction, thenumerator of which is the value of the property (usually either the assessed value or a market value asdetermined by an appraiser) and the denominator of which is the “lien” of the assessments or specialtaxes. A value-to-lien ratio should not, however, be viewed as a guarantee of credit-worthiness. Landvalues are especially sensitive to economic cycles. A downturn of the economy may depress land valuesand hence the value-to-lien ratios. Further, the value-to-lien ratio cited for a bond issue is an average.Individual parcels in a community facilities district may fall above or below the average, sometimes evenbelow a 1:1 ratio. (With a 1:1 ratio, the land is worth less than the debt on it.) Although judicialforeclosure proceedings can be initiated rapidly, the process can take several years to complete, and thebankruptcy courts may impede the foreclosure action. Finally, local agencies may form overlappingcommunity facilities districts or assessment districts. They typically do not coordinate their bondissuances. Debt issuance by an entity other than the Community Facilities District can therefore dilutevalue-to-lien ratios. See “COMMUNITY FACILITIES DISTRICT NO. 6 (ZONE 1) – Direct andOverlapping Debt.”

Burden of Parity Liens, Taxes and Other Special Assessments on the Taxable Property

While the Special Taxes levied in Zone 1 are secured by the Taxable Property, the security onlyextends to the value of such Taxable Property that is not subject to priority and parity liens and similarclaims.

The table in the section entitled “COMMUNITY FACILITIES DISTRICT NO. 6 (ZONE 1) –Direct and Overlapping Debt” sets forth the presently outstanding amount of governmental obligations(with stated exclusions), the tax or assessment for which is or may become an obligation of one or moreof the parcels of Taxable Property and furthermore states the additional amount of general obligationbonds the tax for which, if and when issued, may become an obligation of one or more of the parcels ofTaxable Property. The table does not specifically identify which of the governmental obligations aresecured by liens on one or more of the parcels of Taxable Property.

In addition, other governmental obligations may be authorized and undertaken or issued in thefuture, the tax, assessment or charge for which may become an obligation of one or more of the parcels ofTaxable Property and may be secured by a lien on a parity with the lien of the Special Tax levied on theparcels within Zone 1 securing the 2014 Bonds.

In general, as long as the Special Tax on the parcels within Zone 1 is collected on the County taxroll, the Special Tax and all other taxes, assessments and charges also collected on the tax roll are on aparity, that is, are of equal priority. Questions of priority become significant when collection of one ormore of the taxes, assessments or charges is sought by some other procedure, such as foreclosure and sale.In the event of proceedings to foreclose for delinquency of Special Taxes securing the 2014 Bonds, the

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Special Tax will be subordinate only to existing prior governmental liens, if any. Otherwise, in the eventof such foreclosure proceedings, the Special Taxes will generally be on a parity with the other taxes,assessments and charges, and will share the proceeds of such foreclosure proceedings on a pro rata basis.Although the Special Taxes will generally have priority over non-governmental liens on a parcel ofTaxable Property, regardless of whether the non-governmental liens were in existence at the time of thelevy of the Special Tax or not, this result may not apply in the case of bankruptcy.

While governmental taxes, assessments and charges are a common claim against the value of aparcel of Taxable Property, other less common claims may be relevant. One of the most serious in termsof the potential reduction in the value that may be realized to pay the Special Tax is a claim with regard toa hazardous substance. See “Factors Affecting Parcel Values and Aggregate Value – HazardousSubstances” below.

Disclosure to Future Purchasers

On September 27, 2006, the Community Facilities District recorded the Notice of Special TaxLien for the territory included in the Community Facilities District in the Office of the Riverside CountyRecorder as Document No. 2006-0711977 with respect to the Rate and Method. While title companiesnormally refer to such notices in title reports, there can be no guarantee that such reference will be madeor, if made, that a prospective purchaser or lender will consider such Special Tax obligation in thepurchase of a parcel of land or a home in the Community Facilities District or the lending of moneythereon. The Act requires the subdivider (or its agent or representative) of a subdivision to notify aprospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special tax ofthe existence and maximum amount of such special tax using a statutorily prescribed form. CaliforniaCivil Code Section 1102.6b requires that in the case of transfers, other than those covered by the aboverequirement, the seller must at least make a good faith effort to notify the prospective purchaser of thespecial tax lien in a format prescribed by statute. Failure by an owner of the property to comply with theabove requirements, or failure by a purchaser or lessor to consider or understand the nature and existenceof the Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay theSpecial Tax when due.

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

Insufficiency of the Special Tax within Zone 1

The principal source of payment of principal of and interest on the 2014 Bonds is the proceeds ofthe annual levy and collection of the Special Tax against property within Zone 1 of the CommunityFacilities District. The annual levy of the Special Tax is subject to the maximum tax rates authorized.The levy cannot be made at a higher rate even if the failure to do so means that the estimated proceeds ofthe levy and collection of the Special Tax, together with other available funds, will not be sufficient topay debt service on the 2014 Bonds. Other funds which might be available include funds derived fromthe payment of penalties on delinquent Special Taxes and funds derived from the tax sale or foreclosureand sale of parcels on which levies of the Special Tax are delinquent.

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The levy of the Special Tax will rarely, if ever, result in a uniform relationship between the valueof particular Taxable Property and the amount of the levy of the Special Tax against such parcels. Thus,there will rarely, if ever, be a uniform relationship between the value of such parcels in Zone 1 and theproportionate share of debt service on the 2014 Bonds, and certainly not a direct relationship.

The Special Tax levied in any particular tax year on a Taxable Property is based upon the revenueneeds and application of Rate and Method with respect to Zone 1. Application of the Rate and Methodwill, in turn, be dependent upon certain development factors with respect to each Taxable Property bycomparison with similar development factors with respect to the other Taxable Property within Zone 1 ofthe Community Facilities District. Thus, in addition to annual variations of the revenue needs from theSpecial Tax, the following are some of the factors which might cause the levy of the Special Tax on anyparticular Taxable Property within Zone 1 to vary from the Special Tax that might otherwise be expected:

(1) Reduction in the amount of Taxable Property, for such reasons as acquisition ofTaxable Property by a government and failure of the government to pay the Special Tax basedupon a claim of exemption or, in the case of the federal government or an agency thereof,immunity from taxation, thereby resulting in an increased tax burden on the remaining parcels ofTaxable Property; or

(2) Failure of the owners of Taxable Property within Zone 1 to pay the Special Taxand delays in the collection of or inability to collect the Special Tax by tax sale or foreclosure andsale of the delinquent parcels, thereby resulting in an increased tax burden on the remainingparcels of Taxable Property.

Except as set forth above under “SECURITY FOR THE 2014 BONDS – Special Taxes” and “ –Rate and Method” herein, the Fiscal Agent Agreement provides that the Special Tax is to be collected inthe same manner as ordinary ad valorem property taxes are collected and, except as provided in thespecial covenant for foreclosure described in “SECURITY FOR THE 2014 BONDS – Proceeds ofForeclosure Sales” and in the Act, is subject to the same penalties and the same procedure, sale and lienpriority in case of delinquency as is provided for ad valorem property taxes. Pursuant to theseprocedures, if taxes are unpaid for a period of five years or more, the property is subject to sale by theCounty.

In the event that sales or foreclosures of property are necessary, there could be a delay inpayments to Owners of the 2014 Bonds pending such sales or the prosecution of foreclosure proceedingsand receipt by the Community Facilities District of the proceeds of sale if the Special Reserve Fund andthe Reserve Fund are depleted. See “SECURITY FOR THE 2014 BONDS – Proceeds of ForeclosureSales.”

In addition, the Rate and Method limits the increase of Special Taxes levied on parcels ofDeveloped Property to cure delinquencies of other property owners in the Community Facilities District.See “SECURITY FOR THE 2014 BONDS – Rate and Method” herein.

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Exempt Properties

Certain properties are exempt from the Special Tax in accordance with the Rate and Method (see“SECURITY FOR THE 2014 BONDS – Rate and Method” herein). According to the Rate and Method,the Board of Education classifies Lot 1, a pre-existing home located in Tract 31301 within Zone 1, asexempt from the payment of Special Taxes for the Community Facilities District. In addition, the Actprovides that properties or entities of the state, federal or local government are exempt from the SpecialTax; provided, however, that property within Zone 1 of the Community Facilities District acquired by apublic entity subsequent to adoption of the Resolution of Formation through a negotiated transaction orby gift or devise, which is not otherwise exempt from the Special Tax, will continue to be subject to theSpecial Tax. It is possible that property acquired by a public entity following a tax sale or foreclosurebased upon failure to pay taxes could become exempt from the Special Tax. In addition, although the Actprovides that if property subject to the Special Tax is acquired by a public entity through eminent domainproceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if itwere a special assessment, the constitutionality and operation of these provisions of the Act have not beentested, meaning that such property could become exempt from the Special Tax. In the event thatadditional property is dedicated to the School District or other public entities, this additional propertymight become exempt from the Special Tax.

The Act further provides that no other properties or entities are exempt from the Special Taxunless the properties or entities are expressly exempted in a resolution of consideration to levy a newspecial tax or to alter the rate or method of apportionment of an existing special tax.

Depletion of Special Reserve Fund and Reserve Fund

The Special Reserve Fund is to be maintained at an amount equal to the Special Reserve FundRequirement (see “SECURITY FOR THE 2014 BONDS – Special Reserve Fund” herein) and theReserve Fund is to be maintained at an amount equal to the Reserve Requirement (see “SECURITY FORTHE 2014 BONDS –Reserve Fund” herein). Funds in the Special Reserve Fund and the Reserve Fundmay be used to pay principal of and interest on the 2014 Bonds, in the event the proceeds of the levy andcollection of the Special Tax against property within Zone 1 of the Community Facilities District areinsufficient. If funds in the Special Reserve Fund and the Reserve Fund are depleted, the funds can bereplenished from the proceeds of the levy and collection of the Special Tax that are in excess of theamount required to pay all amounts to be paid to the Bondowners pursuant to the Fiscal AgentAgreement. However, no replenishment from the proceeds of a Special Tax levy can occur as long as theproceeds that are collected from the levy of the Special Tax against property within Zone 1 of theCommunity Facilities District, at the maximum tax rates, together with other available funds, remainsinsufficient to pay all such amounts. Thus it is possible that the Special Reserve Fund and the ReserveFund will be depleted and not be replenished by the levy of the Special Tax.

Potential Delay and Limitations in Foreclosure Proceedings

The payment of property owners’ taxes and the ability of the Community Facilities District toforeclose the lien of a delinquent unpaid Special Tax pursuant to its covenant to pursue judicialforeclosure proceedings, may be limited by bankruptcy, insolvency or other laws generally affectingcreditors’ rights or by the laws of the State relating to judicial foreclosure. See “SECURITY FOR THE2014 BONDS – Proceeds of Foreclosure Sales” and “BONDOWNERS’ RISKS – Bankruptcy andForeclosure Delay” herein. In addition, the prosecution of a foreclosure could be delayed due to manyreasons, including crowded local court calendars or lengthy procedural delays.

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The ability of the Community Facilities District to collect interest and penalties specified by Statelaw and to foreclose against properties within Zone 1 having delinquent Special Tax installments may belimited in certain respects with regard to properties in which the Federal Deposit Insurance Corporation(the “FDIC”), the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation,the Drug Enforcement Agency, the Internal Revenue Service or other similar federal governmentalagencies has or obtains an interest. See “BONDOWNERS’ RISKS – Payments by FDIC, Fannie Mae,Freddie Mac and Other Federal Agencies” herein.

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

The Community Facilities District and the School District are unable to predict what effect theapplication of a policy statement by the FDIC regarding payment of state and local real property taxeswould have in the event of a delinquency on a parcel within Zone 1 in which the FDIC has or obtains aninterest, although prohibiting the lien of the FDIC to be foreclosed at a judicial foreclosure sale wouldlikely reduce or eliminate the persons willing to purchase a parcel at a foreclosure sale.

In addition, potential investors should be aware that judicial foreclosure proceedings are notsummary remedies and can be subject to significant procedural and other delays caused by crowded courtcalendars and other factors beyond the control of the Community Facilities District or the School District.Potential investors should assume that, under current conditions, it is estimated that a judicial foreclosureof the lien of Special Taxes may take up to two or three years from initiation to the lien foreclosure sale.At a Special Tax lien foreclosure sale, each parcel will be sold for not less than the “minimum bidamount” which is equal to the sum of all delinquent Special Tax installments, penalties and interestthereon, costs of collection (including reasonable attorneys’ fees), post-judgment interest and costs ofsale. Each parcel is sold at foreclosure for the amounts secured by the Special Tax lien on such parceland multiple parcels may not be aggregated in a single “bulk” foreclosure sale. If any parcel fails toobtain a “minimum bid,” the Community Facilities District may, but is not obligated to, seek superiorcourt approval to sell such parcel at an amount less than the minimum bid. Such superior court approvalrequires the consent of the Owners of 75% of the aggregate principal amount of the outstanding Bonds.

Delays and uncertainties in the Special Tax lien foreclosure process create significant risks forBondowners. High rates of special tax payment delinquencies, which continue during the pendency ofprotracted Special Tax lien foreclosure proceedings, could result in the rapid, total depletion of theReserve Fund prior to replenishment from the resale of property upon foreclosure. In that event, therecould be a default in payment of the principal of, and interest on, the 2014 Bonds. See “Special TaxesAre Not Personal Obligations” above.

Bankruptcy and Foreclosure Delay

The payment of Special Taxes and the ability of the Community Facilities District to foreclosethe lien of a delinquent Special Taxes as discussed in the section herein entitled “SECURITY FOR THE2014 BONDS” may be limited by bankruptcy, insolvency, or other laws generally affecting creditors’rights or by the laws of the State relating to judicial foreclosure. In addition, the prosecution of a judicialforeclosure may be delayed due to congested local court calendars or procedural delays.

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The various legal opinions to be delivered concurrently with the delivery of the 2014 Bonds(including Bond Counsel’s approving legal opinion) will be qualified, as to the enforceability of thevarious legal instruments, by moratorium, bankruptcy, reorganization, insolvency or other similar lawsaffecting the rights of creditors generally.

Although bankruptcy proceedings would not cause the obligation to pay the Special Tax tobecome extinguished, bankruptcy of a property owner or of a partner or other equity owner of a propertyowner within Zone 1, could result in a stay of enforcement of the lien for the Special Taxes, a delay inprosecuting superior court foreclosure proceedings or adversely affect the ability or willingness of aproperty owner within Zone 1 to pay the Special Taxes and could result in the possibility of delinquentSpecial Taxes not being paid in full. In addition, the amount of any lien on property within Zone 1securing the payment of delinquent Special Taxes could be reduced if the value of the property weredetermined by the bankruptcy court to have become less than the amount of the lien, and the amount ofthe delinquent Special Taxes in excess of the reduced lien could then be treated as an unsecured claim bythe court. Any such stay of the enforcement of the lien for the Special Tax, or any such delay or non-payment, would increase the likelihood of a delay or default in payment of the principal of and interest onthe 2014 Bonds and the possibility of delinquent Special Taxes not being paid in full. Moreover, amountsreceived upon foreclosure sales may not be sufficient to fully discharge delinquent installments. To theextent that a significant percentage of the property in Zone 1 of the Community Facilities District isowned by any one property owner, and Special Taxes have been levied on such property, and such owneris the subject of bankruptcy proceedings, the payment of the Special Tax and the ability of theCommunity Facilities District to foreclose the lien of a delinquent unpaid Special Tax could be extremelycurtailed by bankruptcy, insolvency or other laws generally affecting creditors’ rights or by the laws ofthe State relating to judicial foreclosure.

In 1992, the United States Court of Appeals for the Ninth Circuit issued its opinion in abankruptcy case entitled In re Glasply Marine Industries. In that case, the court held that ad valoremproperty taxes levied by Snohomish County in the State of Washington after the date that the propertyowner filed a petition for bankruptcy were not entitled to priority over a secured creditor with a prior lienon the property. The court upheld the priority of unpaid taxes imposed after the filing of the bankruptcypetition as “administrative expenses” of the bankruptcy estate, payable after all secured creditors. As aresult, the secured creditor was able to foreclose on the property and retain all of the proceeds of the saleexcept the amount of the pre-petition taxes.

According to the court’s ruling, as administrative expenses, post-petition taxes would have to bepaid, assuming that the debtor has sufficient assets to do so. In certain circumstances, payment of suchadministrative expenses may be allowed to be deferred. Once the property is transferred out of thebankruptcy estate (through foreclosure or otherwise) it would at that time become subject to current advalorem taxes.

The Act provides that the Special Taxes are secured by a continuing lien, which is subject to thesame lien priority in the case of delinquency as ad valorem taxes. No case law exists with respect to howa bankruptcy court would treat the lien for the Special Taxes levied after the filing of a petition inbankruptcy. Glasply is controlling precedent for bankruptcy courts in the State. If the Glasply precedentwas applied to the levy of the Special Tax, the amount of Special Tax received from parcels whoseowners declare bankruptcy could be reduced.

It should also be noted that on October 22, 1994, Congress enacted 11 U.S. C. Section362(b)(18), which added a new exception to the automatic stay for ad valorem property taxes imposed bya political subdivision after the filing of a bankruptcy petition. Pursuant to this new provision of law, inthe event of a bankruptcy petition filed on or after October 22, 1994, the lien for ad valorem taxes insubsequent fiscal years will attach even if the property is part of the bankruptcy estate. Bondowners

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should be aware that the potential effect of 11 U.S. C. Section 362(b)(18) on the Special Taxes dependsupon whether a court were to determine that the Special Taxes should be treated like ad valorem taxes forthis purpose.

Payments by FDIC, Fannie Mae, Freddie Mac and Other Federal Agencies

The ability of the Community Facilities District to collect interest and penalties specified by Statelaw and to foreclose the lien of delinquent Special Taxes may be limited in certain respects with regard toproperties in which the FDIC, Fannie Mae, Freddie Mac, the Federal National Mortgage Association, theDrug Enforcement Agency, the Internal Revenue Service or other similar federal governmental agencieshas or obtains an interest.

FDIC. Specifically, with respect to the FDIC, on June 4, 1991, the FDIC issued a Statement ofPolicy Regarding the Payment of State and Local Property Taxes (the “1991 Policy Statement”). The1991 Policy Statement was revised and superseded by new Policy Statement effective January 9, 1997(the “Policy Statement”). The Policy Statement provides that real property owned by the FDIC is subjectto state and local real property taxes only if those taxes are assessed according to the property’s value, andthat the FDIC is immune from real property taxes assessed on any basis other than property value.According to the Policy Statement, the FDIC will pay its property tax obligations when they become dueand payable and will pay claims for delinquent property taxes as promptly as is consistent with soundbusiness practice and the orderly administration of the institution’s affairs, unless abandonment of theFDIC’s interest in the property is appropriate. The FDIC will pay claims for interest on delinquentproperty taxes owed at the rate provided under state law, to the extent the interest payment obligation issecured by a valid lien. The FDIC will not pay any amounts in the nature of fines or penalties and willnot pay nor recognize liens for such amounts. If any property taxes (including interest) on FDIC ownedproperty are secured by a valid lien (in effect before the property became owned by the FDIC), the FDICwill pay those claims. The Policy Statement further provides that no property of the FDIC is subject tolevy, attachment, garnishment, foreclosure or sale without the FDIC’s consent. In addition, the FDIC willnot permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC’sconsent.

The Policy Statement states that the FDIC generally will not pay non ad valorem taxes, includingspecial assessments, on property in which it has a fee interest unless the amount of tax is fixed at the timethat the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to theextent it purports to secure the payment of any such amounts. Special taxes imposed under the Act and aspecial tax formula which determines the special tax due each year, are specifically identified in thePolicy Statement as being imposed each year and therefore covered by the FDIC’s federal immunity.

The Community Facilities District is unable to predict what effect the application of the PolicyStatement would have in the event of a delinquency in the payment of Special Taxes on a parcel withinZone 1 in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to beforeclosed at a judicial foreclosure sale could reduce or eliminate the number of persons willing topurchase a parcel at a foreclosure sale. Owners of the 2014 Bonds should assume that the CommunityFacilities District will be unable to collect Special taxes or to foreclose on any parcel within Zone 1owned by the FDIC. Such an outcome could cause a draw on the Reserve Fund and perhaps, ultimately, adefault in payment on the 2014 Bonds. Based upon the secured tax roll as of January 1, 2013, the FDICdid not own any of the property in Zone 1. The Community Facilities District expresses no viewconcerning the likelihood that the risks described above will materialize while the 2014 Bonds areoutstanding.

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Mortgage Interests. Similarly, in the event a parcel of taxable property is owned by a federalgovernment entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, or aprivate deed of trust secured by a parcel of taxable property is owned by a federal government entity orfederal government sponsored entity, such as Fannie Mae or Freddie Mac, the ability to foreclose on theparcel or to collect delinquent Special Taxes may be limited. Federal courts have held that, based on thesupremacy clause of the United States Constitution (“This Constitution, and the Laws of the United Stateswhich shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under theAuthority of the United States, shall be the supreme Law of the Land; and the Judges in every State shallbe bound thereby, any Thing in the Constitution or Laws of any State to the contrary notwithstanding”),in the absence of Congressional intent to the contrary, a state or local agency cannot foreclose to collectdelinquent taxes or assessments if foreclosure would impair the federal government interest. This meansthat, unless Congress has otherwise provided, if a federal government entity owns a parcel of taxableproperty but does not pay taxes and assessments levied on the parcel (including Special Taxes), theapplicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes andassessments. Moreover, unless Congress has otherwise provided, if the federal government has amortgage interest in the parcel and the Community Facilities District wishes to foreclose on the parcel asa result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be soldfor an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes andpreserve the federal government’s mortgage interest. For a discussion of risks associated with taxableparcels within the Community Facilities District becoming owned by the federal government, federalgovernment entities or federal government sponsored entities, see “ − Exempt Properties” above.

Factors Affecting Parcel Values and Aggregate Value

Geologic, Topographic and Climatic Conditions. The value of the Taxable Property in Zone 1 inthe future can be adversely affected by a variety of additional factors, particularly those which may affectinfrastructure and other public improvements and private improvements on the parcels of TaxableProperty and the continued habitability and enjoyment of such private improvements. Such additionalfactors include, without limitation, geologic conditions such as earthquakes and volcanic eruptions,topographic conditions such as earth movements, landslides, liquefaction, floods or fires, and climaticconditions such as tornadoes, droughts, and the possible reduction in water allocation or availability. Itcan be expected that one or more of such conditions may occur and may result in damage toimprovements of varying seriousness, that the damage may entail significant repair or replacement costsand that repair or replacement may never occur either because of the cost or because repair orreplacement will not facilitate habitability or other use, or because other considerations preclude suchrepair or replacement. Under any of these circumstances, the value of the Taxable Property may welldepreciate or disappear.

Seismic Conditions. Zone 1 is located in a seismically active region in Southern California.Active faults which could cause significant ground shaking in the nearby area include three of the State’smost active faults: the San Andreas, San Jacinto and Elsinore Faults. Most of Southern California sharesthis risk. Earthquakes of magnitude of 6 to 8 on the Richter Scale are possible.

In the event of a severe earthquake, there may be significant damage to both property andinfrastructure in Zone 1. As a result, the property owners may be unable or unwilling to pay the SpecialTaxes when due, and the Reserve Fund may eventually become depleted. In addition, the value of land inZone 1 could be diminished in the aftermath of such natural events, reducing the resulting proceeds offoreclosure sales in the event of delinquencies in the payment of the Special Taxes. Development withinZone 1 of the Community Facilities District has been built in accordance with applicable building codes,including requirements relating to seismic safety. No assurances can be given that any earthquakeinsurance will be obtained as to any of the improvements within Zone 1 of the Community FacilitiesDistrict.

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Hazardous Substances. While government taxes, assessments and charges are a common claimagainst the value of a taxed parcel, other less common claims can occur. One of the most serious in termsof the potential reduction in the value that may be realized to pay the Special Taxes is a claim with regardto hazardous substances. In general, the owners and operators of a parcel may be required by law toremedy conditions relating to releases or threatened releases of hazardous substances. The federalComprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred toas “CERCLA” or “Superfund Act,” is the most well known and widely applicable of these laws, butCalifornia laws with regard to hazardous substances are also stringent and similar. Under many of theselaws, the owner (or operator) may be obligated to remedy a hazardous substance condition of propertywhether or not the owner (or operator) had anything to do with creating or handling the hazardoussubstance. The effect therefore, should any of the parcels be affected by a hazardous substance, would beto reduce the marketability and value by the costs of remedying the condition, because the purchaser,upon becoming owner, may become obligated to remedy the condition just as is the seller. Further, suchliabilities may arise not simply from the existence of a hazardous substance but from the method ofhandling or disposing of it. All of these possibilities could significantly affect the financial and legalability of a property owner to develop the affected parcel or other parcels, as well as the value of theproperty that is realizable upon a delinquency and foreclosure.

The assessed values of the property within Zone 1, do not take into account the possiblereduction in marketability and value of any of the parcels of Taxable Property by reason of the possibleliability of the owner (or operator) for the remedy of a hazardous substance condition of the parcel. TheCommunity Facilities District has not independently verified and is not aware that the owner (or operator)has such a current liability with respect to any of the parcels of Taxable Property. However, it is possiblethat such liabilities do currently exist and that the Community Facilities District is not aware of them.

Further, it is possible that liabilities may arise in the future with respect to any of the land withinZone 1 resulting from the existence, currently, of a substance presently classified as hazardous but whichhas not been released or of a substance not presently classified as hazardous but which may in the futurebe so classified. Further, such liabilities may arise not simply from the existence of a hazardoussubstance but from the method of handling it. All of these possibilities could significantly adverselyaffect the value of a parcel and the willingness or ability of the owner of any parcel to pay the Special Taxinstallments.

Legal Requirements. Other events which may affect the value of a parcel of Taxable Property inZone 1 include changes in the law or application of the law. Such changes may include, withoutlimitation, local growth control initiatives, local utility connection moratoriums and local application ofstatewide tax and governmental spending limitation measures.

No Acceleration Provisions

The 2014 Bonds do not contain a provision allowing for the acceleration of the 2014 Bonds in theevent of a payment default or other default under the terms of the 2014 Bonds or the Fiscal AgentAgreement. Pursuant to the Fiscal Agent Agreement, a Bondowner is given the right for the equal benefitand protection of all Bondowners similarly situated to pursue certain remedies (see APPENDIX C –“Summary of Certain Provisions of the Fiscal Agent Agreement” herein). So long as the 2014 Bonds arein book-entry form, DTC will be treated as the sole Bondowner and will be entitled to exercise all rightsand remedies of the Bondowners.

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Community Facilities District Formation

California voters, on June 6, 1978, approved an amendment (“Article XIIIA”) to the CaliforniaConstitution. Section 4 of Article XIIIA, requires a vote of two-thirds of the qualified electorate toimpose “special taxes,” or any additional ad valorem, sales or transaction taxes on real property. At anelection held within the Community Facilities District pursuant to the Act, more than two-thirds of thequalified electors within the Community Facilities District, consisting of the landowners within theboundaries of the Community Facilities District, authorized the Community Facilities District to incurbonded indebtedness to finance Infrastructure Improvements and approved the Rate and Method. TheSupreme Court of the State has not yet decided whether landowner elections (as opposed to residentelections) satisfy requirements of Section 4 of Article XIIIA, nor has the Supreme Court decided whetherthe special taxes of a community facilities district constitute a “special tax” for purposes of Article XIIIA.

Section 53341 of the Act requires that any action or proceeding to attack, review, set aside, voidor annul the levy of a special tax or an increase in a special tax pursuant to the Act shall be commencedwithin 30 days after the special tax is approved by the voters. No such action has been filed with respectto the Special Tax.

Billing of Special Taxes

A special tax formula can result in a substantially heavier property tax burden being imposedupon properties within a community facilities district than elsewhere in a city or county, and this in turncan lead to problems in the collection of the special tax. In some community facilities districts thetaxpayers have refused to pay the special tax and have commenced litigation challenging the special tax,the community facilities district and the bonds issued by the community facilities district.

Under provisions of the Act, the Special Taxes are billed to the properties within Zone 1 of theCommunity Facilities District which were entered on the Assessment Roll of the County Assessor byJanuary 1 of the previous fiscal year on the regular property tax bills sent to owners of such properties.Such Special Tax installments are due and payable, and bear the same penalties and interest for non-payment, as do regular property tax installments. These Special Tax installment payments cannot bemade separately from property tax payments. Therefore, the unwillingness or inability of a propertyowner to pay regular property tax bills as evidenced by property tax delinquencies may also indicate anunwillingness or inability to make regular property tax payments and installment payments of SpecialTaxes in the future. See “SECURITY FOR THE 2014 BONDS – Proceeds of Foreclosure Sales” for adiscussion of the provisions which apply and procedures which the Community Facilities District isobligated to follow in the event of delinquency in the payment of installments of Special Taxes.

Inability to Collect Special Taxes

In order to pay debt service on the 2014 Bonds, it is necessary that the Special Tax levied againstland within Zone 1 of the Community Facilities District be paid in a timely manner. The CommunityFacilities District has covenanted in the Fiscal Agent Agreement under certain conditions to instituteforeclosure proceedings against property with delinquent Special Tax in order to obtain funds to pay debtservice on the 2014 Bonds. If foreclosure proceedings were instituted, any mortgage or deed of trustholder could, but would not be required to, advance the amount of the delinquent Special Tax to protectits security interest. In the event such superior court foreclosure is necessary, there could be a delay inprincipal and interest payments to the Owners of the 2014 Bonds pending prosecution of the foreclosureproceedings and receipt of the proceeds of the foreclosure sale, if any. No assurances can be given thatthe real property subject to foreclosure and sale at a judicial foreclosure sale will be sold or, if sold, thatthe proceeds of such sale will be sufficient to pay any delinquent Special Tax installment. Although theAct authorizes the Board of Education to cause such an action to be commenced and diligently pursued to

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completion, the Act does not specify the obligations of the Board of Education with regard to purchasingor otherwise acquiring any lot or parcel of property sold at the foreclosure sale if there is no otherpurchaser at such sale. See “SECURITY FOR THE 2014 BONDS – Proceeds of Foreclosure Sales.”

Right to Vote on Taxes Act

An initiative measure, Proposition 218, commonly referred to as the “Right to Vote on TaxesAct” (the “Initiative”) was approved by the voters of the State at the November 5, 1996 general election.The Initiative added Article XIIIC (“Article XIIIC”) and Article XIIID to the California Constitution.According to the “Title and Summary” of the Initiative prepared by the California Attorney General, theInitiative limits “the authority of local governments to impose taxes and property-related assessments,fees and charges.” The provisions of the Initiative as they may relate to community facilities districts aresubject to interpretation by the courts.

Among other things, Section 3 of Article XIIIC states that “. . . the initiative power shall not beprohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee orcharge.” The Act provides for a procedure, which includes notice hearing, protest and votingrequirements to alter the rate and method of apportionment of an existing special tax. However, the Actprohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminatethe levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislativebody determines that the reduction or termination of the special tax would not interfere with the timelyretirement of that debt. On July 1, 1997, a bill was signed into law by the Governor of the State enactingGovernment Code Section 5854, which states that:

“Section 3 of Article XIIIC of the California Constitution, as adopted at theNovember 5, 1996, general election, shall not be construed to mean that any owner orbeneficial owner of a municipal security, purchased before or after that date, assumesthe risk of, or in any way consents to, any action by initiative measure that constitutes animpairment of contractual rights protected by Section 10 of Article I of the United StatesConstitution.”

Accordingly, although the matter is not free from doubt, it is likely that the Initiative has notconferred on the voters the power to repeal or reduce the Special Taxes if such reduction would interferewith the timely retirement of the 2014 Bonds.

It may be possible, however, for voters of Zone 1 of the Community Facilities District to reducethe Special Taxes in a manner which does not interfere with the timely repayment of the 2014 Bonds butwhich does reduce the maximum amount of Special Taxes that may be levied in any year below theexisting levels. Therefore, no assurance can be given with respect to the levy of Special Taxes forAdministrative Expenses. Furthermore, no assurance can be given with respect to the future levy of theSpecial Taxes in amounts greater than the amount necessary for the timely retirement of the 2014 Bonds.

The Act also establishes time limits for initiating any challenge to the validity of special taxeslevied pursuant to the Act and any challenge to the validity of bonds issued pursuant to the Act. Section53341 of the Act provides that:

“Any action or proceeding to attack, review, set aside, void, or annul the levy of a specialtax or an increase in a special tax pursuant to this chapter shall be commenced within 30days after the special tax is approved by the voters. Any appeal from a final judgment inthat action or proceeding shall be perfected within 30 days after the entry of judgment.”

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Section 53359 of the Act provides that:

“An action to determine the validity of bonds issued pursuant to this chapter or thevalidity of any special taxes levied pursuant to this chapter may be brought pursuant toChapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of CivilProcedure but shall, notwithstanding the time limits specified in Section 860 of the Codeof Civil Procedure, be commenced within 30 days after the voters approve the issuance ofthe bonds or the special tax if the action is brought by an interested person pursuant toSection 863 of the Code of Civil Procedure. Any appeal from a judgment in that action orproceeding shall be commenced within 30 days after entry of judgment.”

Based on the forgoing, with respect to any challenge to the validity of the Special Tax or the2014 Bonds, the Community Facilities District believes that under current State law the time for initiatingany such legal challenge has expired.

Like its antecedents, the Initiative is likely to undergo both judicial and legislative scrutinybefore its impact on Zone 1 and the Community Facilities District and its obligations can be determined.Certain provisions of the Initiative may be examined by the courts for their constitutionality under bothState and federal constitutional law. For example, on August 1, 2014, in City of San Diego. v. Shapiro, anAppellate Court ruled that an election held by the City of San Diego to authorize the levying of specialtaxes on hotels City-wide pursuant to a City ordinance which created a convention center facilities districtand which specifically defined the electorate to consist solely of (1) the owners of real property in theCity on which a hotel is located, and (2) the lessees of real property owned by a governmental entity onwhich a hotel is located, was invalid under the California Constitution because such landowners andlessees are neither “qualified electors” of the City for purposes of Articles XIII A, Section 4 of theCalifornia Constitution nor do they comprise a proper “electorate” under Article XIIIC, Section 2(d). TheCourt specifically noted that the decision did not require the Court to consider the distinct question ofwhether landowner voting to impose special taxes pursuant to Section 53326(b) of the Act isconstitutional under Article XIII A, Section 4 and Article XIIIC, Section 2(d) in districts that lacksufficient registered voters to conduct an election among registered voters, and thus does not affect thevalidity of the levy of the Special Taxes by the Community Facilities District. In addition, the provisionsof the Act described above that establish time limits for initiating any challenge to the validity of theSpecial Taxes levied pursuant to the Act or the issuance of Bonds pursuant to the Act described abovewould provide obstacles to any party which sought to present a legal challenge to the validity of theSpecial Taxes or the 2014 Bonds based on the City of San Diego v. Shapiro case. The CommunityFacilities District is not able to predict the outcome of any such examination of the Initiative in relation tocommunity facilities districts formed under the Act.

The foregoing discussion of the Initiative and related matters should not be considered anexhaustive or authoritative treatment of the issues. The Community Facilities District does not expect tobe in a position to control the consideration or disposition of these issues and cannot predict the timing oroutcome of any judicial or legislative activity in this regard. Interim rulings, final decisions, legislativeproposals and legislative enactments may all affect the impact of the Initiative on the 2014 Bonds as wellas the market for the 2014 Bonds. Legislative and court calendar delays and other factors may prolongany uncertainty regarding the effects of the Initiative.

Ballot Initiatives and Legislative Measures

The Initiative was adopted pursuant to a measure qualified for the ballot pursuant to California’sconstitutional initiative process and the State Legislature has in the past enacted legislation which hasaltered the spending limitations or established minimum funding provisions for particular activities.From time to time, other initiative measures could be adopted by California voters or legislation enacted

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by the State Legislature. The adoption of any such initiative or enactment of legislation might placelimitations on the ability of the State, the County, the School District or local districts to increaserevenues or to increase appropriations or on the ability of a property owner to complete the developmentof the property.

Limited Secondary Market

There can be no guarantee that there will be a secondary market for the 2014 Bonds or, if asecondary market exists, that such 2014 Bonds can be sold for any particular price. Although theCommunity Facilities District has committed to provide certain statutorily-required financial andoperating information, there can be no assurance that such information will be available to Bondownerson a timely basis. The failure to provide the required annual financial information does not give rise tomonetary damages but merely an action for specific performance. Occasionally, because of generalmarket conditions, lack of current information, the absence of credit rating for the 2014 Bonds or becauseof adverse history or economic prospects connected with a particular issue, secondary marketing practicesin connection with a particular issue are suspended or terminated. Additionally, prices of issues for whicha market is being made will depend upon then prevailing circumstances. Such prices could besubstantially different from the original purchase price.

Loss of Tax Exemption

As discussed under the caption “TAX MATTERS,” the interest on the 2014 Bonds could becomeincludable in gross income for federal income tax purposes retroactive to the date of issuance of the 2014Bonds as a result of future acts or omissions of the Community Facilities District and the School Districtin violation of certain provisions of the Code and the covenants of the Fiscal Agent Agreement. In orderto maintain the exclusion from gross income for federal income tax purposes of the interest on the 2014Bonds, the Community Facilities District has covenanted in the Fiscal Agent Agreement not to take anyaction, or fail to take any action, if such action or failure to take such action would adversely affect theexclusion from gross income of interest on the 2014 Bonds under Section 103 of the Code. Should suchan event of taxability occur, the 2014 Bonds would not be subject to early redemption and would remainoutstanding to maturity or until redeemed under the optional redemption or mandatory sinking fundredemption provisions of the Fiscal Agent Agreement. See “THE 2014 BONDS – Redemption.”

IRS Audit of Tax-Exempt Bond Issues

The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing orexamination of tax-exempt bond issues, including both random and targeted audits. It is possible that the2014 Bonds will be selected for audit or examination by the IRS. It is also possible that the market valueof such 2014 Bonds might be affected as a result of such an audit of such 2014 Bonds (or by an audit ofsimilar bonds or securities). See “TAX MATTERS” herein.

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

Future legislative proposals, if enacted into law, clarification of the Code or court decisions maycause interest on the 2014 Bonds to be subject, directly or indirectly, to federal income taxation or to besubject to or exempted from state income taxation, or otherwise prevent Owners of the 2014 Bonds fromrealizing the full current benefit of the tax status of such interest.

The introduction or enactment of any such future legislative proposals, clarification of the Codeor court decisions may also affect the market price for, liquidity of or marketability of, the 2014 Bonds.In 2013 and 2014, legislative changes were proposed in Congress, which, if enacted, would have resultedin additional federal income tax being imposed on certain owners of tax-exempt state or local obligations,

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such as the Series 2014 Bonds. Prospective purchasers of the 2014 Bonds should consult their own taxadvisors regarding any pending or proposed federal or state tax legislation, regulations or litigation as towhich Bond Counsel expresses no opinion. As discussed in this Official Statement, under the caption“TAX MATTERS,” interest on the 2014 Bonds could become includable in gross income for purposes offederal income taxation retroactive to the date the 2014 Bonds were issued as a result of future acts oromissions of the Community Facilities District in violation of its covenants in the Fiscal AgentAgreement. Should such an event of taxability occur, the 2014 Bonds are not subject to specialredemption or acceleration and will remain outstanding until maturity or until redeemed under one of theother redemption provisions contained in the Fiscal Agent Agreement.

Backup Withholding

Interest paid with respect to tax-exempt obligations such as the 2014 Bonds is subject toinformation reporting to the IRS in a manner similar to interest paid on taxable obligations. In addition,interest with respect to the 2014 Bonds may be subject to backup withholding if such interest is paid to anOwner that (a) fails to provide certain identifying information (such as the Owner’s taxpayeridentification number) in the manner required by the IRS, or (b) has been identified by the IRS as beingsubject to backup withholding.

Limitations on Remedies

Remedies available to the Bondowners may be limited by a variety of factors and may beinadequate to assure the timely payment of principal of and interest on the 2014 Bonds or to preserve thetax-exempt status of the 2014 Bonds. See “Payments by FDIC, Fannie Mae, Freddie Mac and OtherFederal Agencies,” “No Acceleration Provisions” and “Billing of Special Taxes” herein.

TAX MATTERS

Federal Income Taxes

The Code imposes certain requirements that must be met subsequent to the issuance and sale ofthe 2014 Bonds for interest thereon to be and remain excluded from gross income for federal income taxpurposes. Noncompliance with such requirements could cause the interest on the 2014 Bonds to beincluded in gross income for federal income tax purposes retroactive to the date of issue of the 2014Bonds. Pursuant to the Fiscal Agent Agreement and the tax and nonarbitrage certificate executed by theCommunity Facilities District and the School District in connection with the issuance of the 2014 Bonds(the “Tax Certificate”), the Community Facilities District and the School District, as applicable, havecovenanted to comply with the applicable requirements of the Code in order to maintain the exclusion ofthe interest on the 2014 Bonds from gross income for federal income tax purposes pursuant to Section103 of the Code. In addition, the Community Facilities District and the School District, as applicable,have made certain representations and certifications in the Fiscal Agent Agreement and the TaxCertificate. Bond Counsel will not independently verify the accuracy of those representations andcertifications.

In the opinion of Nixon Peabody LLP, Bond Counsel, under existing law and assumingcompliance with the aforementioned covenant, and the accuracy of certain representations andcertifications made by the Community Facilities District and the School District described above, intereston the 2014 Bonds is excluded from gross income for federal income tax purposes under Section 103 ofthe Code. Bond Counsel is also of the opinion that such interest is not treated as a preference item incalculating the alternative minimum tax imposed under the Code with respect to individuals and

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corporations. Interest on the 2014 Bonds is, however, included in the adjusted current earnings of certaincorporations for purposes of computing the alternative minimum tax imposed on such corporations.

State Taxes

Bond Counsel is also of the opinion that interest on the 2014 Bonds is exempt from personalincome taxes of the State of California under present State law. Bond counsel expresses no opinion as toother state or local tax consequences arising with respect to the 2014 Bonds nor as to the taxability of the2014 Bonds or the income therefrom under the laws of any state other than California.

Original Issue Discount

Bond Counsel is further of the opinion that the difference between the principal amount of the2014 Bonds maturing September 1, 2019 through September 1, 2034, inclusive, and September 1, 2043(collectively, the “Discount Bonds”), and the initial offering price to the public (excluding bond houses,brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at whichprice a substantial amount of such Discount Bonds of the same maturity was sold constitutes originalissue discount, which is excluded from gross income for federal income tax purposes to the same extentas interest on the 2014 Bonds. Further, such original issue discount accrues actuarially on a constantinterest rate basis over the term of each Discount Bond and the basis of each Discount Bond acquired atsuch initial offering price by an initial purchaser thereof will be increased by the amount of such accruedoriginal issue discount. The accrual of original issue discount may be taken into account as an increase inthe amount of tax-exempt income for purposes of determining various other tax consequences of owningthe Discount Bonds, even though there will not be a corresponding cash payment. Owners of the DiscountBonds are advised that they should consult with their own advisors with respect to the state and local taxconsequences of owning such Discount Bonds.

Original Issue Premium

The 2014 Bonds maturing on September 1, 2015 through September 1, 2018, inclusive(collectively, the “Premium Bonds”), are being offered at prices in excess of their principal amounts. Aninitial purchaser with an initial adjusted basis in a Premium Bond in excess of its principal amount willhave amortizable bond premium which is not deductible from gross income for federal income taxpurposes. The amount of amortizable bond premium for a taxable year is determined actuarially on aconstant interest rate basis over the term of each Premium Bond based on the purchaser’s yield tomaturity (or, in the case of Premium Bonds callable prior to their maturity, over the period to the call date,based on the purchaser’s yield to the call date and giving effect to any call premium). For purposes ofdetermining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser whoacquires such obligation with an amortizable bond premium is required to decrease such purchaser’sadjusted basis in such Premium Bond annually by the amount of amortizable bond premium for thetaxable year. The amortization of bond premium may be taken into account as a reduction in the amountof tax-exempt income for purposes of determining various other tax consequences of owning such Bonds.Owners of the Premium Bonds are advised that they should consult with their own advisors with respectto the state and local tax consequences of owning such Premium Bonds.

Ancillary Tax Matters

Ownership of the 2014 Bonds may result in other federal tax consequences to certain taxpayers,including, without limitation, certain S corporations, foreign corporations with branches in the UnitedStates, property and casualty insurance companies, individuals receiving Social Security or RailroadRetirement benefits, and individuals seeking to claim the earned income credit. Ownership of the 2014Bonds may also result in other federal tax consequences to taxpayers who may be deemed to have

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incurred or continued indebtedness to purchase or to carry the 2014 Bonds. Prospective investors areadvised to consult their own tax advisors regarding these rules.

Interest paid on tax-exempt obligations such as the 2014 Bonds is subject to information reportingto the IRS in a manner similar to interest paid on taxable obligations. In addition, interest on the 2014Bonds may be subject to backup withholding if such interest is paid to an Owner that (a) fails to providecertain identifying information (such as the Owner’s taxpayer identification number) in the mannerrequired by the IRS, or (b) has been identified by the IRS as being subject to backup withholding.

Bond Counsel is not rendering any opinion as to any federal tax matters other than thosedescribed in the opinions attached as Appendix B. Prospective investors, particularly those who may besubject to special rules described above, are advised to consult their own tax advisors regarding thefederal tax consequences of owning and disposing of the 2014 Bonds, as well as any tax consequencesarising under the laws of any state or other taxing jurisdiction.

Changes in Law and Post Issuance Events

Legislative or administrative actions and court decisions, at either the federal or state level, couldhave an adverse impact on the potential benefits of the exclusion from gross income of the interest on the2014 Bonds for federal or state income tax purposes, and thus on the value or marketability of the 2014Bonds. This could result from changes to federal or state income tax rates, changes in the structure offederal or state income taxes (including replacement with another type of tax), repeal of the exclusion ofthe interest on the 2014 Bonds from gross income for federal or state income tax purposes, or otherwise.Bond Counsel notes that in each year since 2011, President Obama released legislative proposals thatwould limit the extent of the exclusion from gross income of interest on obligations of states andpolitical subdivisions under Section 103 of the Code (including the 2014 Bonds) for taxpayers whoseincome exceeds certain thresholds. It is not possible to predict whether any legislative or administrativeactions or court decisions having an adverse impact on the federal or state income tax treatment ofOwners of the 2014 Bonds may occur. Prospective purchasers of the 2014 Bonds should consult theirown tax advisors regarding the impact of any change in law on the 2014 Bonds. Bond Counsel has notundertaken to advise in the future whether any events after the date of issuance and sale of the 2014Bonds may affect the tax status of interest on the 2014 Bonds. Bond Counsel expresses no opinion as toany federal, state or local tax law consequences with respect to the 2014 Bonds, or the interest thereon, ifany action is taken with respect to the 2014 Bonds or the proceeds thereof upon the advice or approval ofother counsel.

A copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix E.

LEGAL MATTERS

Legal Opinion

The legal opinion of Nixon Peabody LLP, Bond Counsel, approving the validity of the 2014Bonds will be made available to purchasers at the time of original delivery and is attached hereto asAppendix E. A copy of the legal opinion will be printed on each 2014 Bond. McFarlin & Anderson LLP,Laguna Hills, California, is serving as Disclosure Counsel.

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Absence of Litigation

No litigation is pending or threatened concerning the validity of the 2014 Bonds. There is noaction, suit or proceeding known by the Community Facilities District or the School District to bepending at the present time restraining or enjoining the creation of the Community Facilities District orthe delivery of the 2014 Bonds or in any way contesting or affecting the validity of the 2014 Bonds or anyproceedings of the Community Facilities District or the School District taken with respect to theexecution thereof. A no-litigation certificate executed by the School District, on behalf of the CommunityFacilities District, will be delivered to the Underwriter simultaneously with the delivery of the 2014Bonds.

No General Obligation of School District or Community Facilities District

The 2014 Bonds are not general obligations of the School District or the Community FacilitiesDistrict, but are limited obligations of the Community Facilities District payable solely from proceeds ofthe Special Tax and proceeds of the 2014 Bonds, including amounts in the Reserve Fund, Special TaxFund and Bond Service Fund, the Special Reserve Fund and investment income on funds held pursuant tothe Fiscal Agent Agreement (other than as necessary to be rebated to the United States of Americapursuant to Section 148(f) of the Code and any applicable regulations promulgated pursuant thereto).Any tax levied for the payment of the 2014 Bonds shall be limited to the Special Taxes to be collectedwithin Zone 1.

NO RATING

The 2014 Bonds have not been rated by any securities rating agency and there are no currentplans to do so in the future.

UNDERWRITING

The 2014 Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated at a purchaseprice of $2,004,380.45 (which represents the aggregate principal amount of the 2014 Bonds of$2,100,000.00, less a net original issue discount of $53,619.55 and less an underwriter’s discount of$42,000.00).

The purchase agreement relating to the 2014 Bonds provides that the Underwriter will purchaseall of the 2014 Bonds, if any are purchased, the obligation to make such purchase being subject to certainterms and conditions set forth in such purchase agreement.

The Underwriter may offer and sell the 2014 Bonds to certain dealers and others at prices lowerthan the offering prices stated on the inside cover page hereof. The offering prices may be changed fromtime to time by the Underwriter.

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PROFESSIONAL FEES

Fees payable to certain professionals, including the Underwriter, Nossaman LLP, asUnderwriter’s Counsel, McFarlin & Anderson LLP, as Disclosure Counsel, Nixon Peabody LLP, as BondCounsel, and Zions First National Bank, as the Fiscal Agent, are contingent upon the issuance of the 2014Bonds. The fees of Dolinka Group, LLC, as Financial Advisor, Special Tax Consultant and CFDAdministrator, are in part contingent upon the issuance of the 2014 Bonds.

MISCELLANEOUS

References are made herein to certain documents and reports which are brief summaries thereofwhich do not purport to be complete or definitive and reference is made to such documents and reports forfull and complete statements of the contents thereof.

Any statements in this Official Statement involving matters of opinion, whether or not expresslyso stated, are intended as such and not as representations of fact. This Official Statement is not to beconstrued as a contract or agreement between the Community Facilities District and the purchasers orOwners of any of the 2014 Bonds.

The execution and delivery of this Official Statement by the Community Facilities District hasbeen duly authorized by the Jurupa Unified School District on behalf of the Community FacilitiesDistrict.

JURUPA UNIFIED SCHOOL DISTRICTCOMMUNITY FACILITIES DISTRICT NO. 6 (ZONE 1)

By: /s/ Paula FordPaula Ford, Assistant Superintendent, Business Services,of the Jurupa Unified School District, on behalf ofCommunity Facilities District No. 6 (Zone 1) of theJurupa Unified School District

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APPENDIX A

GENERAL INFORMATION ABOUT THE JURUPA UNIFIED SCHOOL DISTRICT

The following information relating to the School District is included only for the purpose ofsupplying general information regarding the School District. Neither the faith and credit nor the taxingpower of the School District has been pledged to payment of the 2014 Bonds, and the 2014 Bonds will notbe payable from any of the School District’s revenues or assets.

Introduction

Unless otherwise indicated, the following financial, statistical and demographic data has beenprovided by the School District. Additional information concerning the School District and copies of themost recent and subsequent audited financial reports of the School District may be obtained bycontacting: Jurupa Unified School District, 4850 Pedley Road, Jurupa Valley, CA 92509, Attention:Assistant Superintendent of Business Services. There may be a charge for copying, mailing and handling.

General Information

The Jurupa Unified School District (the “School District”) was established in 1963, and iscomprised of an area of approximately 44 square miles. The School District is located in the westernregion of Riverside County (the “County”), encompassing the recently incorporated City of JurupaValley, a portion of the City of Eastvale, and a small portion of unincorporated area. The School Districtis currently operating 16 elementary schools for grades K-6, three middle schools for grades 7-8, threecomprehensive high schools for grades 9-12, one continuation high school and a Learning Center thathouses a community day school, an adult education program, an independent study program and otheralternative programs. Enrollment in the School District in Fiscal Year 2013-14 (for purposes hereof, theterm “Fiscal Year” is utilized when followed by reference to a specific fiscal year) was 19,545 students ingrades K-12, including students in the adult education and other alternative programs. Enrollment ingrades K-12 in Fiscal Year 2014-15 is expected to be approximately 19,335 students in grades K-12,including students in the adult education and other alternative programs.

Administration

The School District is governed by a Board of Education (the “Board”), consisting of fivemembers, each of whom is elected to a four-year term. Elections for positions to the Board are held everytwo years, alternating between two and three available positions. If a vacancy arises during any term, thevacancy is filled by an appointment by a majority vote of the remaining Board members and, if there is nomajority, by a special election.

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Current members of the Board, together with their offices and the dates their current terms expire,are listed below:

BOARD OF EDUCATIONJurupa Unified School District

Name Office Current Term Expires

Sheryl Schmidt President December 2016

Memo Mendez Clerk December 2018

Linda Chard(1) Board Member December 2016

Robert Garcia Board Member December 2018(2)

Donna Johnston(1) Board Member December 2018

(1)Appointed.(2) As a result of the November 4, 2014, election, Mr. Robert Garcia replaced Mr. Brian Schafer and commenced serving as aBoard member at the December 8, 2014, Board meeting.

Superintendent and Administrative Personnel

The Superintendent of the School District is appointed by the Board and reports to the Board.The Superintendent is responsible for management of the School District’s day to-day operations andsupervises the work of other School District administrators and supervisors. Brief biographies of theSuperintendent and other administrative officers are set forth below.

Elliott Duchon, Superintendent. Elliott Duchon, Superintendent for the Jurupa UnifiedSchool District, is serving in his 9th year as Superintendent, which places him as the longest tenuredSuperintendent of the 23 school districts in Riverside County. Mr. Duchon holds Bachelor’s (CumLaude) and Master’s degrees from the University of California, Riverside. He began his teachingcareer with Jurupa in 1977 and served as a teacher, and also supervised the work of parent volunteersand instructional aides. Following this, he served as a consultant for the Riverside County Office ofEducation (“RCOE”) and then as an Administrator for RCOE. In his 26 years with RCOE, he heldpositions from Administrator, to Director, and in his last 10 years with RCOE, Mr. Duchon served asAssistant Superintendent of Schools. He has been involved with and supervised virtually every aspectof K-12 education. In 2001, Mr. Duchon became the Deputy Superintendent for the School Districtand assumed his current role in 2004.

Paula Ford, Assistant Superintendent of Business Services. Paula Ford, AssistantSuperintendent of Business Services, assumed the position of Assistant Superintendent of BusinessServices June 1, 2013, after serving as Director of Education-Information Technology for the SchoolDistrict since May 2011 and Coordinator of Education Technology from July, 1999, to April 2011.Ms. Ford holds a Master’s degree from National University, a Bachelor’s degree from California StateUniversity-San Bernardino and a Teaching Credential from California Baptist University.

Karen Russell, Director of Fiscal Services. Karen Russell, Director of Fiscal Services,assumed the position of Director in January 2008 after first serving as Supervisor of Accounting forthe School District since January 1997. Prior to employment with the School District, she worked inthe private sector as a controller and prior to that as a bookkeeper for various accounting firms. Sheearned her Bachelor of Science degree in Education from Stephen F. Austin State University in Texas.

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Allocation of State Funding to School Districts

The 2013-14 Budget contained a new school funding allocation system (the “Local ControlFunding Formula” or “LCFF” hereafter). State Assembly Bill 97 (Stats. 2013, Chapter 47) (“AB 97”)was enacted to establish a new system for funding State school districts, charter schools and countyoffices of education by the implementation of the Local Control Funding Formula. Subsequently, AB97 was amended and clarified by Senate Bill 91 (Stats. 2013, Chapter 49). The Local Control FundingFormula replaces revenue limit and most categorical program funding. The State budget providedfunding commencing in Fiscal Year 2013-14 to begin implementing the new formulas. Under theprior funding system, school districts received different per-pupil funding rates based on historicalfactors and varying participation in categorical programs. The new system provides a more uniformbase per-pupil rate for each of several grade levels. The base rates are augmented by several fundingsupplements for (1) students needing additional services, defined as English learners, students fromlower income families, and foster youth; (2) school districts with high concentrations of Englishlearners and lower income families; and (3) high school students. The new funding system requiresschool districts to develop local plans describing how the school district intends to educate its students.The following table shows the average daily attendance by grade year for purposes of the LocalControl Funding Formula.

Enrollment can fluctuate due to factors such as population growth or decline, competitionfrom private, parochial, and public charter schools, inter-district transfers in or out, and other causes.Losses in enrollment will cause a school district to lose operating revenues, without necessarilypermitting the district to make adjustments in fixed operating costs.

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The following table shows a breakdown of the District’s ADA by grade span, total enrollmentand the percentage of EL/LI student enrollment for Fiscal Years 2013-14 to 2014-15.

LOCAL CONTROL FUNDING FORMULAADA, ENROLLMENT AND EL/LI ENROLLMENT PERCENTAGE

Fiscal Year 2013-14 to 2014-15Jurupa Unified School District

Average Daily Attendance(1) Enrollment

FiscalYear K-3 4-6 7-8 9-12

TotalADA

TotalEnrollment

% ofEL/LI

Enrollment(2)

2013-14(3) 5,821 4,424 2,800 5,763 18,808 19,545 80.63%

2014-15(4) 5,772 4,481 2,803 5,620 18,676 19,335 80.49

(1)ADA is as of the second principal reporting period (P-2 ADA), ending on or before the last attendance month prior to April 15of each school year.

(2)As of October report submitted To the California Basic Educational Data System (CBEDS). For purposes of calculatingSupplemental and Concentration Grants, a school district’s Fiscal Year 2013-14 percentage of unduplicated EL/LI studentswill be expressed solely as a percentage of its Fiscal Year 2013-14 total enrollment. For Fiscal Year 2014-15, the percentageof unduplicated EL/LI enrollment will be based on the two-year average of EL/LI enrollment in Fiscal Years 2013-14 and2014-15. Beginning in Fiscal Year 2015-16, a school district’s percentage of unduplicated EL/LI students will be based on arolling average of such district’s EL/LI enrollment for the then-current fiscal year and the two immediately preceding fiscalyears.

(3)Actual.(4)Budgeted.

Source: Jurupa Unified School District.

Labor Relations

The teachers of the School District (certificated non-management personnel) are represented bythe National Education Association. The contract for certificated personnel will expire on June 30, 2017.As of June 30, 2014, the School District’s certificated non-management employees had a total payroll of$73,957,690, and for Fiscal Year 2014-15 have a budgeted total payroll of $81,249,348.

The California School Employees Association (“CSEA”) has been selected as the exclusivebargaining agent for non-teaching, non-management (classified) personnel. The contract for the classifiedpersonnel will expire on June 30, 2017. As of June 30, 2014, the School District’s classified non-management employees had a total payroll of $24,008,324, and for Fiscal Year 2014-15 have budgetedtotal payroll of $25,848,030.

Management, supervisory and confidential personnel are comprised of certificated and classifiedpersonnel who are self-represented. The Superintendent and upper level management have employmentcontracts. As of June 30, 2014, the School District’s management, supervisory and confidentialemployees had a total payroll of $7,721,289, and for Fiscal Year 2014-15 have a budgeted total payroll of$8,404,240.

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For Fiscal Year 2014-15, the estimated split between the number of certificated and classifiedemployees is approximately 57% certificated and 43% classified. The table below sets forth the numberof certificated and classified employees employed by the School District for Fiscal Years 2009-10through 2014-15.

EMPLOYEESJurupa Unified School District

Fiscal Years 2009-10 through 2014-15

Fiscal Year

Total Numberof Certificated

Employees

Total Numberof ClassifiedEmployees

Total NumberManagementEmployees

Total Numberof Employees

2009-10 988 660 84 1,7322010-11 923 660 84 1,6672011-12 915 662 83 1,6602012-13 899 657 84 1,640

2013-14 875 650 84 1,609

2014-15 893 690 87 1,670

Source: Jurupa Unified School District.

Retirement Programs

The School District participates in the State of California Teachers’ Retirement System (“STRS”),which provides benefits to full-time certificated personnel. Active plan members are required tocontribute 8% of their salary. The required employer contribution rate for Fiscal Year 2012-13 was8.25% of annual payroll and for Fiscal Year 2013-14 was 8.25% of annual payroll. Budgeted figures forFiscal Year 2014-15 are 8.88% of the annual payroll. The contribution requirements of the plan membersare established by State statute. The School District’s contributions to STRS for Fiscal Years 2011-12through 2013-14 were $6,310,846, $6,295,651, and $6,496,529, respectively.

Interested persons may review the STRS website for details regarding its programs –http://www.calstrs.com (this reference is for convenience of reference only and not considered to beincorporated as part of this Official Statement). The following information has been obtained from theinformation published by STRS and is believed to be reliable but is not guaranteed as to accuracy orcompleteness. The governing board of STRS adopts a valuation of its defined benefit plan and its definedbenefit supplemental plan each year. Due to the financial market declines which occurred during theFiscal Year 2008-09 period, STRS investments lost substantial value at that time. STRS used anaveraging process that recognizes gains and losses over a three-year period, as a result of which the fundis still being affected by losses incurred during the market downturn. Recent years have seen positiveinvestment returns. The valuation for the period ending June 30, 2013, identified the level of funding forthe STRS defined benefit program at 66.9% of full funding, with an estimated actuarial obligation of$222.7 billion, an actuarial valuation of assets of $148.6 billion and unfunded actuarial obligations of$73.67 billion. In recent years, historical unfunded actuarial obligations for the defined benefit plan haveranged from being over funded in the late 1990’s to the 66.9% of full funding estimated in the June 30,2013 valuation. Contributions to STRS are generally fixed by State law.

The 2014-15 State Budget includes a plan of shared responsibility among the State, school districtsand teachers. The first year’s increased contributions from all three entities are estimated in the 2014-15State Budget at $275 million. The contributions are proposed to increase in subsequent years, reachingmore than $5 billion annually. The 2014-15 State Budget indicates that total contributions currently equal

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19.3% of teacher payroll and are estimated to rise to 35.7%. This increase is estimated in the 2014-15State Budget to eliminate the unfunded liability by approximately 2046.

The School District also participates in the State of California Public Employees RetirementSystem (“PERS”) which provides benefits to full-time classified personnel and part-time employees whoare employed more than 1,000 hours during the year. The School District contributes an amount equal to7.0% of the active plan members’ salary as well as an actuarially determined rate. The actuarial methodsand assumptions used for determining the rate are those adopted by the PERS Board of Administration.The required employer contribution for Fiscal Year 2011-12 was 10.923% and for Fiscal Year 2012-13the contribution rate was 11.417%. The contribution requirements of the plan members were establishedby State statute. The School District’s contributions to PERS for Fiscal Years 2011-12 through 2013-14were $3,883,303, $3,877,260 and $3,767,411, respectively.

Interested persons may review the PERS website for details regarding its programs –http://www.calpers.ca.gov (this reference is for convenience of reference only and not considered to beincorporated as part of this Official Statement). The following information has been obtained from theinformation published by PERS and is believed to be reliable but is not guaranteed as to accuracy orcompleteness. The governing board of the PERS adopts a valuation of its defined benefit plan each year.Due to the financial market declines which occurred during the Fiscal Year 2008-09 period, PERSinvestments lost substantial value at that time. In December 2009, the PERS Board adopted changes to itsasset smoothing method in order to phase in over a three-year period the impact of the 24% investmentloss experience by PERS in Fiscal Year 2008-09. Recent years have seen positive investment returns.The valuation for the period ending June 30, 2013, identified the level of funding for the PERS definedbenefit program for schools at 80.5% of full funding. PERS website does not provide an estimate of theactuarial obligations, of the estimated actuarial valuation of assets or of the estimated unfunded actuarialobligations. PERS has adopted policies regarding contribution rates for the various plans and such plansare subject to modification as the PERS governing board determines how to address the unfundedactuarial obligations. At its April 17, 2013 meeting, the Board approved a change to the CalPERSamortization and smoothing policies. Beginning with the June 30, 2014, valuation, the newly adopteddirect smoothing method will be used to set the 2015-16 rates for the State and Schools defined benefitplans. Under this new direct rate smoothing method, all gains and losses will be paid over a fixed 30-yearperiod with the increases or decreases in the rate spread over a 5-year period. On February 20, 2014, thePERS governing board adopted new assumptions regarding the longer life expectancy of state retirees.The impact of these assumptions will be $1 billion phased in over three years. The costs in Fiscal Year2014-15 will be $430 million ($254 million is a State General Fund).

For Fiscal Year 2014-15, the School District has budgeted for a STRS contribution of $7,134,723and a PERS contribution of $4,381,287.

Post-Retirement Health Care Benefits

The School District provides other post-employment benefits (“OPEB”), in accordance withSchool District contracts, to all employees who retire from the School District with at least 10 years ofservice and retirement under STRS and PERS. The School District administers a single-employerdefined benefit OPEB plan that provides medical, dental and vision benefits to eligible retirees and theirspouses. These medical benefits are provided at the same level employees are receiving at the time ofretirement or to age 65 for eligible retirees and their eligible spouses. The School District’s fundingpolicy is based on the projected pay-as-you-go funding requirements, with additional amounts to prefundbenefits as determined annually by the governing board. During Fiscal Years 2012-13 and 2013-14, theSchool District contributed $1,130,445 and $1,251,597, respectively, and for Fiscal Year 2014-15budgeted $1,337,907 for retirees’ healthcare benefits.

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The Government Accounting Standards Board (“GASB”) issued its final accrual accountingstandards for retiree healthcare benefits, GASB 45, in June 2004 (“GASB 45”). GASB 45 requires localgovernmental employers who provide OPEB as part of the total compensation offered to employees torecognize the expense and related liabilities (assets) in the government-wide financial statements of netassets and activities. GASB 45 establishes standards for the measurement, recognition and display ofOPEB expenses/expenditures and related liabilities (assets), note disclosures, and, if applicable, requiredsupplementary information in the financial reports of the governmental employer.

Pursuant to GASB 45, the School District retained Nyhart to assess the School District’s liabilitiesin connection with GASB 45. The report was prepared on September 24, 2014, with a July 1, 2014valuation date. The next report will be valued as of July 1, 2016 under the biennial rules. The reportconcluded that the amount of actuarial liability (past and present) for the School District, as of July 1,2014, was $53,456,820. As of July 1, 2014, the most recent actuarial evaluation date, the School Districtdid not have a funded plan. The actuarial accrued liability (“AAL”) for benefits was $33.2 million and theunfunded actuarial accrued liability (“UAAL”) was $33.2 million.

In the past, financial reporting for the School District for OPEB was generally based on pay-as-you-go financing approaches. Such practices fail to measure or recognize the cost of OPEB during theperiods when employees render the services or provide relevant information about OPEB obligations andthe extent to which progress is being made in funding those obligations.

GASB 45 generally provides for prospective implementation; that is, the employers set thebeginning net OPEB obligation at zero as of the beginning of the initial year. The School District wasrequired to implement the provisions of GASB 45 beginning in the Fiscal Year ending June 30, 2008.

The School District’s annual OPEB cost, the percentage of annual OPEB cost contributed to theplan and the net OPEB obligation for Fiscal Years 2010-11 through 2014-15 are set forth in the followingtable.

OPEB OBLIGATIONSJurupa Unified School District

Fiscal Years 2010-11 through 2014-15

Fiscal YearEnded June 30

Annual RequiredContribution

PercentageContributed

Net OPEBObligation

2011 $3,239,148 36.0% $8,632,300

2012 3,285,417 36.6 10,715,498

2013 3,264,880 34.6 12,850,728

2014(1)4,418,267 28.3 14,606,785

2015(2)4,511,497 29.7 16,904,473

(1) Unaudited actuals.(2) Budgeted.

Source: Jurupa Unified School District Audit Report for the Fiscal Year Ended June 30, 2013, Unauditedactual for the Fiscal Year Ended June 30, 2014, and budget for Fiscal Year ended June 30, 2015.

Supplemental Early Retirement Plans (SERP) and Early Retirement Incentives. Since July 1,2008, the School District has participated in a number of supplemental early retirement plans andincentives to the benefit of the employees. The plans vary in benefit and duration. Most plans will cometo term at the end of the Fiscal Year 2014-15, with the remaining plans ending by 2017-18.

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Payments for all plans totaled $1,518,460 in Fiscal Year 2013-14. The Fiscal Year 2014-15liability is $1,344,973 and will be funded by the unrestricted general fund through salary savings of theretired employees. The savings exceed the liability each year.

Insurance

The School District is self-insured for property damage and for general liability up to $100,000per claim. The general fund is charged premiums by the Self-Insurance Fund, which is accounted for asan Internal Service Fund. The School District also participates in a joint powers authority, SouthernCalifornia Relief (“SCR”), which provides excess liability and property coverage for the School District.During Fiscal Year ended June 30, 2014, the School District made payments of $549,526 to SCR. Thepolicy has a $100,000 deductible per claim, with the excess coverage provided by SAFER through SCR.Settled claims have not exceeded this commercial coverage in any of the past three years.

The School District participates in a joint powers authority, Riverside Schools Risk ManagementAuthority (“RSRMA”), for workers compensation coverage. The excess coverage is provided byProtected Insurance Program for Schools & Community Colleges Joint Powers Authority (PIPS), a publicentity risk pool through RSRMA.

The School District additionally participates in a joint powers authority Riverside CountyEmployer/Employee Partnership for Benefits (“REEP”) to deliver health, dental and vision services to theemployees. The School District currently holds contracts with Kaiser, Blue Cross, United Healthcare formedical and surgical benefits and with MetLife Dental and Delta Dental for dental benefits throughREEP. Basic life insurance benefits are provided through American Fidelity, Prudential orUnum/Provident.

APPENDIX B

RATE AND METHOD OF APPORTIONMENT FORCOMMUNITY FACILITIES DISTRICT NO. 6

OF THE JURUPA UNIFIED SCHOOL DISTRICT

[THIS PAGE INTENTIONALLY LEFT BLANK]

RMA Final Page 1 of 10 August 7, 2006

RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 6

OF THE JURUPA UNIFIED SCHOOL DISTRICT

The following sets forth the Rate and Method of Apportionment for the levy and collection of Special Taxes by Community Facilities District No. 6 ("CFD No. 6") of Jurupa Unified School District ("School District"). A Special Tax shall be levied on and collected from Taxable Property (as defined below) in CFD No. 6 each Fiscal Year (as defined below) in an amount determined through the application of the Rate and Method of Apportionment described below. All of the real property in CFD No. 6, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.

SECTION A DEFINITIONS

The terms hereinafter set forth have the following meanings: "Acre" or "Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Subdivision Map, parcel map, Condominium Plan, or other recorded County parcel map, that creates the boundaries of each Assessor's Parcel Number. "Act" means the Mello-Roos Community Facilities Act of 1982, being Chapter 2.5, Division 2 of Title 5 of the California Government Code. "Administrative Expenses" means any ordinary and necessary expense incurred by the School District on behalf of CFD No. 6 related to the determination of the amount of the levy of Special Taxes, the collection of Special Taxes including the expenses of collecting delinquencies, the administration of Bonds, the proportional payment of salaries and benefits of any School District employee to the extent duties are directly related to the administration of CFD No. 6, and costs otherwise incurred in order to carry out the authorized purposes of CFD No. 6. "Annual Special Tax" means the Special Tax actually levied in any Fiscal Year on any Assessor’s Parcel. "Approved Property" means an Assessor’s Parcel in CFD No. 6 which represents a Lot in a Final Subdivision Map that was recorded prior to January 1 of the prior Fiscal Year, but for which a Building Permit has not been issuued on or before May 1 of the prior Fiscal Year. Notwithstanding the above, once an Assessor’s Parcel has been classified Approved Property, it shall remain Approved Property until such times as a Building Permit is issued. "Assessor’s Parcel" means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number within the boundaries of CFD No. 6. "Assessor’s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.


"Assessor’s Parcel Number" or "APN" means that number assigned to an Assessor’s Parcel by the County for purposes of identification. "Assigned Annual Special Tax" means the Special Tax of that name described in Section D. "Board" means the Board of Education of Jurupa Unified School District or its designee as the legislative body of CFD No. 6. "Bond Index" means the national Bond Buyer Revenue Bond Index, commonly referenced as the 25-Bond Revenue Index. In the event the Bond Index ceases to be published, the index used shall be based on a comparable index for revenue bonds maturing in 30 years with an average rating equivalent to Moody's A1 and S&P's A-plus, as reasonably determined by the Board. "Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, which obligation may be incurred by CFD No. 6 or the School District. "Bond Yield" means the yield on the last series of Bonds issued by or on behalf of CFD No. 6, as calculated at the time such Bonds are issued pursuant of Section 148 of the Internal Revenue Code of 1986, as amended for purpose of the Non-Arbitrage (Tax) Certificate or other similar bond issuance document. "Building Permit" means a permit for the construction of one or more Units issued by the County, or another public agency in the event the County no longer issues permits for the construction of Units within CFD No. 6. For purposes of this definition, "Building Permit" shall not include permits for construction or installation of commercial/industrial structures, parking structures, retaining walls, utility improvements, or other such improvements not intended for human habitation. "Building Square Footage" or "BSF" means the square footage of assessable internal living space of a Unit, exclusive of any carports, walkways, garages, overhangs, patios, enclosed patios, detached accessory structure, or other structures not used as living space, as determined by reference to the Building Permit for such Unit. "Calendar Year" means the period commencing January 1 of any year and ending the following December 31. "Condominium Plan" means a condominium plan recorded pursuant to California Civil Code Section 1352 in the County Office of the Recorder establishing individual building sites for the construction of Condominium Units. "Condominium Unit" means a unit that is located in a Final Subdivision Map which allows for joint ownership of real property in which portions of the property are commonly owned and others are individually owned. "County" means the County of Riverside, State of California.


"Developed Property" means all Assessor’s Parcels of Taxable Property for which Building Permits were issued on or before May 1 of the prior Fiscal Year, provided that such Assessor's Parcels were created on or before January 1 of the prior Fiscal Year and that each such Assessor's Parcel is associated with a Lot, as determined reasonably by the Board. "Exempt Property" means all Assessor’s Parcels designated as being exempt from Special Taxes in Section H. "Final Subdivision Map" means a final tract map, Condominium Plan, parcel map, lot line adjustment, or functionally equivalent map or instrument that creates building sites, recorded in the County Office of the Recorder. "Fiscal Year" means the period commencing on July 1 of any year and ending the following June 30. "Homeowner" means any owner of a completed unit constructed and sold within CFD No. 6. "Lot(s)" means an individual legal lot created by a Final Subdivision Map for which a Building Permit has been or could be issued. Notwithstanding the foregoing, in the case of an individual legal lot created by such a Final Subdivision Map upon which Condominium Units are entitled to be developed but for which a Condominium Plan has not been recorded, the number of Lots allocable to such legal lot for purposes of calculating the Approved Tax applicable to such Final Subdivision Map shall equal the number of Condominium Units which are permitted to be constructed on such legal lot as shown on such Final Subdivision Map. "Lot 1" means the property identified as Lot 1 on the County of Riverside Tentative Tract Map No. 31301 dated March 2003 which consists of approximately 0.51 acres as potentially modified upon recordation. "Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section C, that can be levied by CFD No. 6 in any Fiscal Year on any Assessor’s Parcel. "Minimum Annual Special Tax Requirement" means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds, (ii) Administrative Expenses of CFD No. 6, (iii) the costs associated with the release of funds from an escrow account, and (iv) any amount required to establish or replenish any reserve funds established in association with the Bonds, less (v) any amount available to pay debt service or other periodic costs on the Bonds pursuant to any applicable bond indenture, fiscal agent agreement, or trust agreement. In arriving at the Minimum Annual Special Tax Requirement the Board shall take into account the reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes in the previous Fiscal Year. "Partial Prepayment Amount" means the amount required to prepay a portion of the Annual Special Tax obligation for an Assessor's Parcel as described in Section G. "Prepayment Amount" means the amount required to prepay the Annual Special Tax obligation in full for an Assessor’s Parcel as described in Section F.


"Present Value of Taxes" means the present value of any Special Tax applicable to such Assessor's Parcel in the current Fiscal Year not yet received by the School District for CFD No. 6, plus the expected Annual Special Tax applicable to such Assessor's Parcel in each remaining Fiscal Year until the termination date specified in Section J, using as the discount rate (i) the Bond Yield after Bond issuance or (ii) the most recently published Bond Index prior to Bond issuance. "Proportionately" means that the ratio of the actual Annual Special Tax levy to the applicable Assigned Annual Special Tax is equal for all applicable Assessor's Parcels. "Reserve Fund Credit" means, for each owner of an Assessor's Parcel wishing to prepay the Annual Special Tax obligation of such Assessor's Parcel, an amount equal to the reduction in the reserve requirement for the outstanding Bonds resulting from the redemption of Bonds with the applicable prepaid Special Taxes. In the event that a surety bond or other credit instrument satisfies the reserve requirement or the reserve requirement is under funded at the time of the prepayment, no Reserve Credit shall be given. "Special Tax" means any of the special taxes authorized to be levied by CFD No. 6 pursuant to the Act. "Taxable Property" means all Assessor’s Parcels which are not Exempt Property. "Undeveloped Property" means all Assessor’s Parcels of Taxable Property which are not Developed Property. "Unit" means each separate residential dwelling unit which comprises an independent facility capable of conveyance separate from adjacent residential dwelling units. "Zone" means either Zone 1 or Zone 2. "Zone 1" means all property located within the area identified as Zone 1 in Exhibit A to this Rate and Method of Apportionment, subject to interpretation by the Board as described in Section B. "Zone 2" means all property located within the area identified as Zone 2 in Exhibit A to this Rate and Method of Apportionment, subject to interpretation by the Board as described in Section B.

SECTION B

CLASSIFICATION OF ASSESSOR’S PARCELS Each Fiscal Year, beginning with Fiscal Year 2006-07, (i) each Assessor’s Parcel within CFD No. 6 shall be shall be assigned to a Zone in accordance with Exhibit A at the reasonable discretion of the Board; (ii) each Assessor’s Parcel within a Zone of CFD No. 6 shall be classified as Taxable Property or Exempt Property; and (iii) each Assessor's Parcel of Taxable Property shall be classified as Developed Property, Approved Property or Undeveloped Property. Developed Property shall be further classified based on the Building Square Footage of the Unit.


SECTION C

MAXIMUM SPECIAL TAXES 1. Developed Property

The Maximum Special Tax for each Assessor’s Parcel classified as Developed Property in a given Zone for any Fiscal Year shall be the amount determined by the greater of (i) the application of the Assigned Annual Special Tax for such Zone or (ii) the application of the Assigned Annual Special Tax for Approved Property for such Zone.

2. Approved Property

The Maximum Special Tax for each Assessor’s Parcel classified as Approved Property in a given Zone for any Fiscal Year shall be the amount determined by the application of the Assigned Annual Special Tax for such Zone

3. Undeveloped Property

There shall be no Annual Special Tax collected from Undeveloped Property

SECTION D ASSIGNED ANNUAL SPECIAL TAXES

1. Developed Property

The Assigned Annual Special Tax in Fiscal Year 2006-07 for each Assessor's Parcel of Developed Property shall be determined by reference to Tables 1 and 2 according to the Zone in which the Assessor's Parcel is located and the Building Square Footage of the Unit, subject to increase as described below.

TABLE 1

ASSIGNED ANNUAL SPECIAL TAX FOR

DEVELOPED PROPERTY IN ZONE 1 FISCAL YEAR 2006-07

Building Square Footage

Assigned Annual Special Tax

< 2,450 $2,449.83 per Unit 2,450 – 2,650 $2,595.50 per Unit 2,651 – 2,850 $2,665.42 per Unit

> 2,850 $2,735.34 per Unit


TABLE 2

ASSIGNED ANNUAL SPECIAL TAX FOR DEVELOPED PROPERTY IN ZONE 2

FISCAL YEAR 2006-07 Building

Square Footage Assigned Annual

Special Tax < 1,800 $1,969.75 per Unit

1,800 – 2,000 $2,031.77 per Unit 2,001 – 2,200 $2,093.80 per Unit

> 2,200 $2,217.85 per Unit

Each July 1, commencing July 1, 2007, the Assigned Annual Special Tax for each Assessor’s Parcel of Developed Property shall be increased by two percent (2.00%) of the amount in effect the prior Fiscal Year.

2. Approved Property The Assigned Annual Special Tax rate in Fiscal Year 2006-07 for each Assessor’s Parcel of

Approved Property shall be determined by reference to Table 3 according to the Zone in which the Assessor’s Parcel is located, subject to increase as described below.

TABLE 3

ASSIGNED ANNUAL SPECIAL TAX FOR

APPROVED PROPERTY IN ZONE 1 AND ZONE 2 FISCAL YEAR 2006-07

Location Assigned Annual

Special Tax Zone 1 $2,735.34 per Lot Zone 2 $2,217.85 per Lot

Each July 1, commencing July 1, 2007, the Assigned Annual Special for each Assessor’s Parcel of Approved Property shall be increased by two percent (2.00%) of the amount in effect the prior Fiscal Year.

If all or any portion of the Final Subdivision Map(s) is subsequently changed or modified after the initial creation of such map, then the Assigned Annual Special Tax per Lot for each Assessor’s Parcel of Approved Property in such Final Subdivision Map area that is changed or modified shall be a rate calculated as follows:

1. Determine the total Assigned Annual Special Taxes for Approved Property

anticipated to apply to the changed or modified Final Subdivision Map area prior to the change or modification.

2. The result of paragraph 1 above shall be divided by the number of Lots which

is ultimately expected to exist in such changed or modified Final Subdivision Map area, as reasonably determined by the Board.


3. The result is the Assigned Annual Special Tax which shall be applicable to Assessor's Parcels of Approved Property in such changed or modified Final Subdivision Map area for all remaining Fiscal Years in which the Special Tax may be levied. Each July 1, commencing the July 1, following the change or modification to the Final Subdivision Map, the amount determined by this Section shall be increased by two percent (2.00%) of the amount in effect the prior Fiscal Year.

2. Undeveloped Property

There shall be no Assigned Annual Special Tax for Undeveloped Property.

SECTION E METHOD OF APPORTIONMENT OF THE ANNUAL SPECIAL TAX

Commencing Fiscal Year 2006-07 and for each subsequent Fiscal Year, the Board shall levy Annual Special Taxes as follows: Step One: The Board shall levy an Annual Special Tax on each Assessor’s Parcel of Developed

Property in an amount equal to the Assigned Annual Special Tax applicable to each such Assessor’s Parcel.

Step Two: If the sum of the amounts collected in step one is insufficient to satisfy the Minimum

Annual Special Tax Requirement, then the Board shall Proportionately levy an Annual Special Tax on each Assessor’s Parcel of Approved Property in an amount up to the Assigned Annual Special Tax applicable to each such Assessor’s Parcel to satisfy the Minimum Annual Special Tax Requirement.

Step Three: If the sum of the amounts collected in steps one and two is insufficient to satisfy the

Minimum Annual Special Tax Requirement, then the Board shall Proportionately levy an Annual Special Tax on each Assessor’s Parcel of Developed Property up to the Maximum Special Tax applicable to each such Assessor’s Parcel, to satisfy the Minimum Annual Special Tax Requirement.

SECTION F

PREPAYMENT OF ANNUAL SPECIAL TAXES The Annual Special Tax obligation of an Assessor's Parcel of Developed Property or an Assessor's Parcel of Approved Property for which a Building Permit has been issued may be prepaid in full, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor’s Parcel at the time the Annual Special Tax obligation would be prepaid. The Prepayment Amount for an Assessor’s Parcel eligible for prepayment shall be determined as described below. An owner of an Assessor's Parcel intending to prepay the Annual Special Tax obligation shall provide CFD No. 6 with written notice of intent to prepay. Within thirty (30) days of receipt of such written notice, the Board shall reasonably determine the Prepayment Amount of such Assessor's Parcel and shall notify such owner of such Prepayment Amount. The Prepayment Amount shall be calculated according to the following formula:


P = PVT – RFC + PAF

The terms above have the following meanings:

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

Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Annual Special Taxes that may be levied on Taxable Property, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently outstanding Bonds in each future Fiscal Year and such prepayment will not impair the security of all currently outstanding Bonds, as reasonably determined by the Board. Such determination shall include identifying all Assessor's Parcels that are expected to become Exempt Property. With respect to any Assessor's Parcel that is prepaid, the Board shall indicate in the records of CFD No. 6 that there has been a prepayment of the Annual Special Tax obligation and shall cause a suitable notice to be recorded in compliance with the Act to indicate the prepayment of the Annual Special Tax obligation and the release of the Annual Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay such Annual Special Tax shall cease.

SECTION G PARTIAL PREPAYMENT OF ANNUAL SPECIAL TAXES

The Annual Special Tax obligation of an Assessor's Parcel may be partially prepaid at the times and under the conditions set forth in this section, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor’s Parcel at the time the Annual Special Tax obligation would be prepaid. 1. Partial Prepayment Times and Conditions

Prior to the conveyance of the first production Unit on a Lot within a Final Subdivision Map, the owner of no less than all the Taxable Property within such Final Subdivision Map may elect in writing to the Board to prepay a portion of the Annual Special Tax obligations for all the Assessor’s Parcels within such Final Subdivision Map, as calculated in Section G.2. below. The partial prepayment of each Annual Special Tax obligation shall be collected for all Assessor's Parcels prior to the conveyance of the first production Unit on a lot within such Final Subdivision Map.

2. Partial Prepayment Amount

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

PP = PG x F The terms above have the following meanings:

PP = the Partial Prepayment Amount PG = the Prepayment Amount calculated according to Section H F = the percent by which the owner of the Assessor’s Parcel is partially

prepaying the Annual Special Tax obligation


3. Partial Prepayment Procedures and Limitations

With respect to any Assessor’s Parcel that is partially prepaid, the Board shall indicate in the records of CFD No. 6 that there has been a partial prepayment of the Annual Special Tax obligation and shall cause a suitable notice to be recorded in compliance with the Act to indicate the partial prepayment of the Annual Special Tax obligation and the partial release of the Annual Special Tax lien on such Assessor’s Parcel, and the obligation of such Assessor’s Parcel to pay such prepaid portion of the Annual Special Tax shall cease. Additionally, the notice shall indicate that the Assigned Annual Special Tax and the Backup Annual Special Tax for the Assessor's Parcel has been reduced by an amount equal to the percentage which was partially prepaid.

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

SECTION H

EXEMPTIONS The Board shall classify as Exempt Property (i) Lot 1, (ii) Assessor’s Parcels owned by the State of California, Federal or other local governments, (iii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iv) Assessor’s Parcels used exclusively by a homeowners' association, (v) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (vi) Assessor’s Parcels developed or expected to be developed exclusively for non-residential use, including any use directly servicing any non-residential property, such as parking, as reasonably determined by the Board, and (vii) any other Assessor’s Parcels at the reasonable discretion of the Board. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]


SECTION I APPEALS

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

SECTION J TERMINATION OF SPECIAL TAX

Annual Special Taxes shall be levied for a period of thirty-three (33) Fiscal Years after Bonds have been issued, provided that Annual Special Taxes shall not be levied after Fiscal Year 2042-43.

SECTION K EXCESS ASSIGNED ANNUAL SPECIAL TAXES

In any Fiscal Year which the Annual Special Taxes collected from Developed Property, pursuant to Step One of Section E, exceeds the Minimum Annual Special Tax requirement, the School District shall use such amount for acquisition, construction or financing of school facilities in accordance with the Act, CFD No. 6 proceedings and other applicable law as determined by the Board.

SECTION L MANNER OF COLLECTION

The Annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 6 may collect Annual Special Taxes at a different time or in a different manner if necessary to meet its financial obligations. J:\CLIENTS\JURUPA.USD\Mello\CFD No. 6 Far West Industries (65049)\Formation Docs\Final Docs\RMA_FINAL.doc

EXHIBIT A

Zone Map of CFD No. 6 of the Jurupa Unified School District

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SHEET 1 OF 2

W/7/&

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LEGEND

Boundaries of Community Facnities District No. 6

Zone 1

Zone 2

EXHIBIT A JURUPA UNIFIED SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 6

MAP OF ZONES

f

PREPARED BY DAVID TAUSSIG & ASSOCIATES, INC.

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SHEET 2 OF 2

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EXHIBIT A JURUPA UNIFIED SCHOOL DISTRICT

COMMUNITY FACILITIES DISTRICT NO. 6 ASSESSOR'S PARCELS (PER ZONE)

ZONE 1

166-050-043 166-050-044 1 83-31 0-020

ZONE 2

174-150-021

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APPENDIX C

SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT

The following is a brief summary of certain provisions of the Fiscal Agent Agreement, which setsforth certain terms and provisions for the issuance and sale of the 2014 Bonds which are more fullydescribed in the forepart of this Official Statement. This summary is not intended to be definitive orcomplete and is qualified in its entirety by reference to the Fiscal Agent Agreement, copies of which areavailable from the Fiscal Agent. Except as otherwise defined in this summary, the terms previouslydefined in this Official Statement have the respectively meanings previously given. In addition, thefollowing terms have the following meanings when used in this summary.

Definitions

“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Sections53311, et seq., of the California Government Code.

“Administrative Expense Fund” means the fund designated “Jurupa Unified School DistrictCommunity Facilities District No. 6 (Zone 1) Administrative Expense Fund” established andadministered under the Fiscal Agent Agreement.

“Administrative Expense Requirement” means, for the 2014-15 Fiscal Year of the District, thesum of $29,291.48, and for each Fiscal Year thereafter, an amount calculated at the AdministrativeExpense Requirement for the immediately previous Fiscal Year, increased by 2.0%.

“Administrative Expenses” means the ordinary and necessary fees and expenses fordetermination of the Special Taxes and administering the levy and collection of the Special Taxes and ofservicing the 2014 Bonds, including any or all of the following: the fees and expenses of the Fiscal Agent(including any fees or expenses of its counsel), the expenses of the District in carrying out its duties underthe Fiscal Agent Agreement (including, but not limited to, annual audits, arbitrage rebate services,continuing disclosure compliance, special tax consultants and attorneys and costs incurred in the levyingand collection of the Special Taxes) including the fees and expenses of its counsel, letter of credit, suretybond or other expenses acceptable to the District, all other costs and expenses of the District or the FiscalAgent incurred in connection with the discharge of their respective duties under the Fiscal AgentAgreement.

“Agreement” means the Fiscal Agent Agreement, as it may be amended or supplemented fromtime to time by any Supplement executed pursuant to the provisions of the Fiscal Agent Agreement.

“Annual Debt Service” means the sum of (1) interest falling due on Bonds (except to the extentthat such interest is payable from funds already set aside for such purpose), and (2) the principal payments(or Mandatory Sinking Account Payments) or deposits required with respect to the 2014 Bonds, in eachcase during the period constituting a Bond Year under the Fiscal Agent Agreement, computed on theassumption that no portion of such Bonds shall cease to be outstanding during such Bond Year except byreason of the application of such scheduled payments; provided, however, that with respect to any Bondswhich bear interest at a variable rate, such interest shall be calculated at an assumed rate equal to theaverage rate of interest per annum for each of the five (5) previous whole calendar years as shown by theJ. J. Kenny Index (or, in the event and to the extent such index is not maintained for all or any portion ofsuch period, any similar index of variable rate interest for tax-exempt obligations as may be selected bythe District in its sole discretion).

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“Auditor” means the Auditor-Controller-Clerk of the County, or such other official of the Countywho is responsible for preparing special tax bills.

“Authorized Investments” means any securities in which the District may legally invest fundssubject to its control, pursuant to Article 1, commencing with Section 53600, of Chapter 4 of Part 1 ofDivision 2 of Title 5 of the Government Code of the State, as now or hereafter amended, as certified bythe District to the Fiscal Agent, upon which certification the Fiscal Agent may conclusively rely, providedthat such securities are acquired at Fair Market Value; which securities may include investmentagreements, guaranteed investment contracts, funding agreements, or any other form of corporate noterepresenting the unconditional obligations of entities: (a) the unsecured long-term debt obligations orclaims-paying ability ratings of which are rated in the top three rating categories (without regard togradation) by Moody’s or S&P, or (b) the short-term debt obligation rated in the two highest categories(without regard to gradation) of either of such rating agencies; which in the case of investmentagreements, guaranteed investment contracts, and funding agreements are collateralized with FederalSecurities (all such collateral to be held by the Fiscal Agent or a third party custodian), with a marketvalue of at least 100% of the principal invested, and provided, further, that any such contract or agreementshall in any event provided that if the investment rating assigned to the long term unsecured debtobligations of the financial institution by S&P or Moody’s falls below “A” or “A2,” respectively, theFiscal Agent shall require immediate repayment of all funds invested thereunder.

“Authorized Officer” means the Superintendent, the Assistant Superintendent of BusinessServices of the District, the President or Clerk of the Board of Education or any designee thereofauthorized in writing to undertake the action referenced in the Fiscal Agent Agreement as required to beundertaken by an Authorized Officer.

“Board of Education” means the governing board of the District, which also acts as the governingboard of the Community Facilities District.

“Bond Counsel” means any attorney or firm of attorneys acceptable to the District and nationallyrecognized for expertise in rendering opinions as to the legality and tax status of securities issued bypublic entities.

“Bond Register” means the books maintained by the Fiscal Agent pursuant to the Fiscal AgentAgreement, for the registration and transfer of ownership of the 2014 Bonds.

“Bond Year” means the twelve-month period beginning on September 2 in each year and endingon September 1 in the following year except that (i) the first Bond Year shall begin on the Closing Dateand end on the next September 31, and (ii) the last Bond Year may end on a prior redemption date.

“Business Day” means any day other than (i) a Saturday or a Sunday or (ii) a day on whichbanking institutions in the state in which the Fiscal Agent has its principal corporate trust office areauthorized or obligated by law or executive order to be closed.

“Clerk” means the Clerk of the Board of Education of the District, or any authorized deputy,assistant or designee thereof.

“Closing Date” means the date upon which there is a physical delivery of the 2014 Bonds inexchange for the amount representing the purchase price of the 2014 Bonds by the Original Purchaser.

“Code” means the Internal Revenue Code of 1986, as amended, and as in effect on the date ofissuance of the 2014 Bonds or (except as otherwise referenced in the Fiscal Agent Agreement) as it may

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be amended to apply to obligations issued on the date of issuance of the 2014 Bonds, together withapplicable proposed, temporary and final regulations promulgated, and applicable official public guidancepublished, under the Code.

“Community Facilities District” means “Community Facilities District No. 6 of the JurupaUnified School District” created in proceedings under the Act.

“Comptroller of the Currency” means the U.S. federal agency established by the NationalCurrency Act of 1863 to charter, regulate and supervise all national banks and the federal branches andagencies of foreign banks in the United States, or any other applicable regulatory agency.

“Costs of Issuance” means items of expense payable or reimbursable directly or indirectly by theDistrict and related to the authorization, sale and issuance of the 2014 Bonds, which items of expenseshall include, but not be limited to, printing costs for the 2014 Bonds and the Official Statement, costs ofreproducing and binding documents, closing costs, appraisal costs, filing and recording fees, fees andexpenses of the District and the Fiscal Agent, initial fees and charges of the Fiscal Agent including itsfirst annual administration fee and fees of counsel to the Fiscal Agent, expenses incurred by the District inconnection with the issuance of the 2014 Bonds, legal fees and charges, including bond counsel, chargesfor execution, transportation and safekeeping of the 2014 Bonds and other costs, charges and fees inconnection with the foregoing.

“Costs of Issuance Fund” means the fund designated “Jurupa Unified School District CommunityFacilities District No. 6 (Zone 1) Special Tax Bonds Costs of Issuance Fund” established andadministered under the Fiscal Agent Agreement.

“County” means the County of Riverside, State of California.

“Depository or Securities Depositories” means The Depository Trust Company, 55 Water Street,New York, New York 10041, Fax- (212) 855-1000 or 7320; or, in accordance with the then-currentguidelines of the Securities and Exchange Commission, to such other addresses and/or such othersecurities depositories, or to no such depositories, as the District may designate in an certificate from theAuthorized Representative delivered to the Fiscal Agent.

“Developed Property” means any parcel within Zone 1 for which a residential building permitwas issued on or before May 1 of the prior Fiscal Year, provided that such parcels were created on orbefore January 1 of the prior Fiscal Year and that each such parcel is associated with a lot, as determinedreasonably by the Board of Education.

“DTC” means the Depository Trust Company, New York, New York and its successors andassigns.

“Event of Default” means any event enumerated in the Fiscal Agent Agreement.

“Excess Special Tax Revenues” means those Special Tax Revenues remaining in the Special TaxFund following transfers made as described in the Fiscal Agent Agreement.

“Fair Market Value” means the price at which a willing buyer would purchase the investmentfrom a willing seller in a bona fide, arm’s length transaction (determined as of the date the contract topurchase or sell the investment becomes binding) if the investment is traded on an established securitiesmarket (within the meaning of Section 1273 of the Code) and, otherwise, the term “fair market value”means the acquisition price in a bona fide arm’s-length transaction (as referenced above) if (i) the

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investment is a certificate of deposit that is acquired in accordance with applicable regulations under theCode, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestmentprovisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, aforward supply contract or other investment agreement) that is acquired in accordance with applicableregulations under the Code, (iii) the investment is a United States Treasury Security – State and LocalGovernment Series that is acquired in accordance with applicable regulations of the United States Bureauof Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State of California butonly if at all times during which the investment is held its yield is reasonably expected to be equal to orgreater than the yield on a reasonably comparable direct obligation of the United States.

“Federal Securities” means any of the following which are non-callable:

(i) direct general obligations of the United States of America (including State and LocalGovernment Securities and obligations issued or held in book entry form on the books of the UnitedStates Department of the Treasury) and obligations, the payment of principal of and interest on which aredirectly or indirectly guaranteed by the United States of America, including, without limitation, such ofthe foregoing which are commonly referred to as stripped obligations and coupons; or

(ii) any of the following obligations of the following agencies of the United States ofAmerica: (a) direct obligations of the Export-Import Bank, (b) certificates of beneficial ownership issuedby the Farmers Home Administration, (c) participation certificates issued by the General ServicesAdministration (d) mortgage-backed bonds or pass-through obligations issued and guaranteed by theGovernment National Mortgage Association, (e) project notes issued by the United States Department ofHousing and Urban Development, and (f) public housing notes and bonds guaranteed by the United Statesof America.

“Fiscal Agent” means the Fiscal Agent appointed by the District and acting as the registrar,transfer agent, paying and registration agent for the 2014 Bonds and as an independent fiscal agent withthe duties and powers provided in the Fiscal Agent Agreement, its successors and assigns, and any othercorporation or association which may at any time be substituted in its place, as provided in the FiscalAgent Agreement.

“Fiscal Year” means the twelve-month period extending from July 1 in a calendar year to June 30of the succeeding year, both dates inclusive.

“Information Services” means the Municipal Securities Rulemaking Board (“MSRB”) through itsElectronic Municipal Market Access (“EMMA”) system website at http://emma.msrb.org; and, inaccordance with then current guidelines of the Securities and Exchange Commission, such otheraddresses and/or such other services providing information with respect to called bonds as the Districtmay designate in a certificate of the District delivered to the Fiscal Agent

“Interest Payment Dates” means March 1 and September 1 of each year, commencing March 1,2015.

“Mandatory Sinking Account Payment” means the amount required by the Fiscal AgentAgreement to be paid on any single date for the redemption of term Bonds prior to their stated maturitypursuant to the Fiscal Agent Agreement.

“Maximum Annual Debt Service” means, as of the date of any calculation, the largest sumobtained for any Bond Year after said date of calculation, obtained by totaling the following amounts foreach such Bond Year:

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(a) the principal amount of the 2014 Bonds coming due and payable by their terms in suchBond Year, including Mandatory Sinking Account Payments, as required by the Fiscal Agent Agreement;and

(b) the amount of interest which would be due during such Bond Year on the aggregateprincipal amount of the 2014 Bonds which would be Outstanding in such Bond Year if such Bonds areretired as scheduled; provided, however, that with respect to any Bonds which bear interest at a variablerate, such interest shall be calculated at an assumed rate equal to the average rate of interest per annum foreach of the five (5) previous whole calendar years as shown by the J. J. Kenny Index (or, in the event andto the extent such index is not maintained for all or any portion of such period, any similar index ofvariable rate interest for tax-exempt obligations as may be selected by the District in its sole discretion).

“Moody’s” shall mean Moody’s Investors Service, its successors and assigns, except that if suchcorporation shall no longer perform the functions of a securities rating agency for any reason, the term“Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selectedby the District.

“Original Purchaser” means Stifel, Nicolaus & Company, Incorporated, the initial purchaser ofthe 2014 Bonds from the District.

“Outstanding” when used as of any particular time with reference to Bonds, means, subject to theprovisions of the Fiscal Agent Agreement, all Bonds except:

(i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent forcancellation;

(ii) Bonds paid or deemed to have been paid within the meaning of the Fiscal AgentAgreement; and

(iii) Bonds in lieu of or in substitution for which other Bonds shall have been authorized,executed, issued and delivered by the District pursuant to the Fiscal Agent Agreement or anySupplemental Agreement.

“Owner” or “Bond Owner” means the registered owner of any Outstanding Bond as shown on the2014 Bond Register of the Fiscal Agent under the Fiscal Agent Agreement.

“Principal Office” means the corporate trust office of the Fiscal Agent located at the addressspecified in the Fiscal Agent Agreement or such other address specified in a written notice by the FiscalAgent to the District under the Fiscal Agent Agreement or such other office of the Fiscal Agentdesignated by the Fiscal Agent for payment, transfer or exchange of the 2014 Bonds.

“Project” shall mean the acquisition and construction of certain public improvements using theproceeds of the sale of Bonds.

“Project Costs” means the amount necessary to finance the construction and acquisition of theProject and incidental expenses of the type authorized under the Resolution of Formation and the Act.

“Project Fund” means the fund designated “Jurupa Unified School District Community FacilitiesDistrict No. 6 (Zone 1) Special Tax Bonds Project Fund,” established and administered under the FiscalAgent Agreement.

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“Rate and Method” means the Rate and Method of Apportionment for Jurupa Unified SchoolDistrict Community Facilities District No. 6, appended to and made a part of the Resolution of Formation.

“Rebate Fund” means the fund designated “Jurupa Unified School District Community FacilitiesDistrict No. 6 (Zone 1) Rebate Fund,” established and administered under the Fiscal Agent Agreement;“Rebate Account” means an account within the Rebate Fund established and administered under theFiscal Agent Agreement for each Series of Bonds issued under the Fiscal Agent Agreement whoseinterest is excluded from gross income for federal income tax purposes.

“Record Date” means the fifteenth day of the calendar month immediately preceding theapplicable Interest Payment Date, whether or not such day is a Business Day.

“Redemption Fund” means the fund designated “Jurupa Unified School District CommunityFacilities District No. 6 (Zone 1) Redemption Fund,” established and administered under the Fiscal AgentAgreement.

“Redemption Premium” means the percentage of the principal amount of the 2014 Bonds calledfor redemption pursuant to the Fiscal Agent Agreement.

“Reserve Fund” means the fund designated “Jurupa Unified School District Community FacilitiesDistrict No. 6 (Zone 1) Special Tax Bond Reserve Fund,” established and administered under the FiscalAgent Agreement.

“Reserve Requirement” means as of any date of calculation, an amount not to exceed the least of(a) Maximum Annual Debt Service on the Outstanding Bonds as of the date of calculation, initially theClosing Date, (b) ten percent (10%) of the original principal amount of the 2014 Bonds, or (c) onehundred twenty-five percent (125%) of the average Annual Debt Service on the 2014 Bonds due in anyremaining Bond Year as of the date of calculation, initially the Closing Date. As of the Closing Date, theReserve Requirement will be $158,850.13.

“Resolution of Formation” means Resolution No. 2007/10, adopted by the Board of Education onSeptember 18, 2006.

“Resolution of Issuance” means the Resolution adopted by the Board of Education onNovember 17, 2014.

“S&P” shall mean Standard & Poor’s Ratings Services, a Standard & Poor’s Financial ServicesLLC business, its successors and assigns, except that if such corporation shall no longer perform thefunctions of a securities rating agency for any reason, the term “S&P” shall be deemed to refer to anyother nationally recognized securities rating agency selected by the District.

“Series” whenever used in the Fiscal Agent Agreement with respect to Bonds, means all of the2014 Bonds designated as being of the same series, authenticated and delivered in a simultaneoustransaction, regardless of variations in maturity, interest rate, redemption and other provisions and anyBonds thereafter authenticated and delivered upon transfer or exchange of or in lieu of or in substitutionfor (but not to refund) such Bonds as in the Fiscal Agent Agreement provided.

“Sinking Account” means the account established in the Redemption Fund and administeredunder the Fiscal Agent Agreement.

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“Special Reserve Fund” means the fund designated “Jurupa Unified School District CommunityFacilities District No. 6 (Zone 1) Special Reserve Fund,” established and administered under the FiscalAgent Agreement.

“Special Reserve Fund Requirement” means the sum of $148,106.94.

“Special Tax” means the special tax established within and authorized to be levied within Zone 1by the Community Facilities District under the Rate and Method pursuant to the Act, the Resolution ofFormation and the Fiscal Agent Agreement.

“Special Tax Consultant” means, the Special Tax Consultant appointed by the District andproviding consultation services relating to the Special Taxes from time to time. As of the Closing Date,Dolinka Group, LLC, shall act as the District’s Special Tax Consultant.

“Special Tax Fund” means the fund designated “Jurupa Unified School District CommunityFacilities District No. 6 (Zone 1) Special Tax Fund” established and administered under the Fiscal AgentAgreement.

“Special Tax Revenues” means the proceeds of Special Taxes levied within the CommunityFacilities District under the proceedings taken pursuant to the Act, the Resolution of Formation and theFiscal Agent Agreement, and received by the Auditor or the Treasurer on behalf of the District, includingall scheduled payments and proceeds of redemption or sales proceeds resulting from foreclosure of thelien of the Special Taxes (which may include interest and penalties thereon) but which does not includeany prepayments of Special Taxes made pursuant to Section E of the Rate and Method.

“Supplement” means an agreement the execution of which is authorized by a resolution whichhas been duly adopted by the Board of Education under the Act and which agreement is amendatory of orsupplemental to the Fiscal Agent Agreement, but only if and to the extent that such agreement isspecifically authorized under the Fiscal Agent Agreement.

“Term Bonds” means Bonds, which by their terms are subject to annual mandatory sinking fundpayments.

“Treasurer” means the Treasurer and Tax Collector of the County, or any designee thereof.

“Underwriter” means Stifel, Nicolaus & Company, Incorporated.

“Zone 1” means those parcels within the District designated as such in the Rate and Method.

Issuance of Bonds and Notes under the Fiscal Agent Agreement

Pursuant to the Resolution of Formation, the Authorized Officers of the District are authorizedand directed to deliver any and all documents and instruments necessary to cause the issuance of the 2014Bonds in accordance with the provisions of the Act, the Resolution of Issuance and the Fiscal AgentAgreement, to authorize the payment of Costs of Issuance by the District from the proceeds of the 2014Bonds and to do and cause to be done any and all other acts and things necessary or convenient fordelivery of the 2014 Bonds to the Underwriter.

The Bonds shall be secured by a first pledge (which pledge shall be effected in the manner and tothe extent provided in the Fiscal Agent Agreement) of all of the Special Tax Revenues and all moneysdeposited in the Special Tax Fund, Redemption Fund, Reserve Fund and Special Reserve Fund (except

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moneys subject to rebate to the United States federal government). The Special Tax Revenues and allmoneys deposited into said funds (except as otherwise provided in the Fiscal Agent Agreement) arededicated to the payment of the principal of, and interest and any premium on, the 2014 Bonds asprovided in the Fiscal Agent Agreement and in the Act until all of the 2014 Bonds have been paid andretired or until moneys or Federal Securities have been set aside irrevocably for that purpose inaccordance with the Fiscal Agent Agreement.

Funds and Accounts

A portion of the proceeds of the purchase price of the 2014 Bonds by the Underwriter (net ofUnderwriter’s discount) shall be deposited into the Escrow Fund established under the EscrowAgreement. The remaining proceeds received from the sale of the 2014 Bonds shall then be deposited intrust with the Fiscal Agent, who shall deposit such proceeds into the Cost of Issuance Fund, the ReserveFund, the Special Reserve Fund and the Administrative Expense Fund.

Costs of Issuance Fund. The Costs of Issuance Account is established under the Fiscal AgentAgreement as a separate fund to be held by the Fiscal Agent and within the Costs of Issuance Fund.Monies in the Costs of Issuance Fund shall be held by the Fiscal Agent for the benefit of the District andbe disbursed as for the payment or reimbursement of Costs of Issuance upon receipt by the Fiscal Agentof an invoice from any such payee which requests payment in an amount which is less than or equal to theamount set forth with respect to such payee in such requisition, or upon receipt of a requisition signed byan Authorized Officer requesting payment of a Cost of Issuance not listed on the initial requisitiondelivered to the Fiscal Agent on the Closing Date. Interest Earnings from investments of monies in theCosts of Issuance Fund shall be retained by the Fiscal Agent in the Costs of Issuance Fund to be used forthe purposes of such fund.

Project Fund. The Project Fund is established under the Fiscal Agent Agreement as a separatefund to be held by the Fiscal Agent. Amounts in the Project Fund shall be disbursed to pay the ProjectCosts as set forth in appropriate requisitions signed by an Authorized Officer in the form attached to theFiscal Agent Agreement. Interest earnings and profits resulting from such investment and deposit will beretained in the Project Fund to be used for the purposes thereof

Special Tax Fund. The Special Tax Fund is established under the Fiscal Agent Agreement as aseparate fund to be held by the Fiscal Agent and upon the receipt of Special Tax Revenues. Amounts inthe Special Tax Fund shall be allocated, in order of priority as set forth in the Official Statement under“SECURITY AND SOURCE OF PAYMENT FOR THE 2014 BONDS – Special Tax Fund” and asotherwise set forth in the Fiscal Agent Agreement. Interest earnings and profits resulting from suchinvestment and deposit will be retained in the Special Tax Fund to be used for the purposes thereof.

Administrative Expense Fund. The Administrative Expense Fund is established under the FiscalAgent Agreement as a separate fund to be held by the Fiscal Agent, within which there shall beestablished separate accounts for each Member. Upon receipt of Special Tax Revenues, the Fiscal Agentshall transfer to the Administrative Expense Fund from the Special Tax Fund an amount which will causethe balance in the Administrative Expense Fund to equal the amount specified in writing by theAuthorized Officer as necessary to pay Administrative Expense in the then-current Bond Year, providedthat such amount shall not exceed the Administrative Expense Requirement. The Fiscal Agent shall applythe monies on deposit in each Member’s account within the Administrative Expense Fund for payment ofAdministrative Expenses, as directed by an Authorized Representative.

Redemption Fund. The Redemption Fund is established under the Fiscal Agent Agreement as aseparate fund to be held by the Fiscal Agent. Monies in the Redemption Fund shall be held by the Fiscal

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Agent for the benefit of the District and the Owners of the 2014 Bonds, shall be disbursed for the paymentof the principal of, and interest and any premium on, the 2014 Bonds. Within each Redemption Accountthere shall be a separate subaccount for each series of Bonds, for which there are Mandatory SinkingAccount Payments. With respect to each Sinking Account, on each Mandatory Sinking Account Paymentdate established for such Sinking Account, the Fiscal Agent shall apply the amount deposited in theapplicable Redemption Account to the applicable Mandatory Sinking Account for the purpose of applyingthe Mandatory Sinking Account Payment required on that date to the redemption (or payment at maturity,as the case may be) of Term Bonds, upon the notice and in the manner provided in the Fiscal AgentAgreement; provided that, at any time prior to giving notice of such redemption, the Fiscal Agent shallapply such monies to the purchase of Term Bonds at public or private sale, as and when and at such prices(including brokerage and other charges), as the District may direct, except that the purchase price(excluding accrued interest) shall not exceed the par amount of such Term Bonds.

Reserve Fund. The Reserve Fund is established under the Fiscal Agent Agreement as a separatefund to be held by the Fiscal Agent. See the caption “SECURITY AND SOURCE OF PAYMENT FORTHE 2014 BONDS – Reserve Fund” in the foregoing Official Statement. Monies in the Reserve Fundshall be held by the Fiscal Agent for the benefit of the District and the 2014 Bond Owners as a reserve forthe payment of principal of (including sinking fund payments, if any), and interest and any premium on,the 2014 Bonds.

All amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agentsolely for the following purposes:

(1) Transfer Due to Deficiency in Redemption Fund. Transfers shall be made fromthe Reserve Fund to the Redemption Fund in the event of a deficiency in the Redemption Fundand the Special Reserve Fund in accordance with the Fiscal Agent Agreement, provided,however, that amounts on deposit in the Special Reserve Fund shall be used for such purposeprior to any transfers being made from the Reserve Fund. The Fiscal Agent shall withdrawmonies from the Reserve Fund in an amount equal to the amount of such deficiency after thewithdrawal of moneys from the Special Reserve Fund.

(2) Transfer of Excess Reserve Requirement. Whenever, on any Interest PaymentDate, or on any other date when requested by the Authorized Representative, the amount in theReserve Fund exceeds the then-applicable Reserve Requirement, the Fiscal Agent shall, except asotherwise provided in the Fiscal Agent Agreement for purpose of arbitrage rebate to the federalgovernment, and as evidenced by a certificate from the Authorized Representative, transfer on orbefore such Interest Payment Date or such other date, an amount equal to such excess from theAccount within the Reserve Fund to the Special Tax Fund; and

(3) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance inthe Reserve Fund is sufficient to retire all the Outstanding Bonds of that Series, whether byredemption or otherwise, such balance shall be applied in retirement of the Outstanding Bonds ofthat Series, as directed by a certificate from the Authorized Representative. In the event that thebalance in or to the credit of the Reserve Fund at any time exceeds the amount required to retireall of the Outstanding Bonds, the excess shall, after payment of all amounts due to the FiscalAgent, be transferred to the District to be used in accordance with the Act.

Replenishment from Special Tax Fund. Following the date of any withdrawal made fromthe Reserve Fund, as authorized in the Fiscal Agent Agreement, the balance on deposit in theReserve Fund shall be replenished from Special Tax Revenues deposited into the Special TaxFund, in accordance with the Fiscal Agent Agreement.

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Investment. Interest Earnings and profits resulting from said investment shall be retainedin the Reserve Fund, subject to the provisions of the Fiscal Agent Agreement.

Special Reserve Fund. The Reserve Fund is established under the Fiscal Agent Agreement as aseparate fund to be held by the Fiscal Agent. See the caption “SECURITY AND SOURCE OFPAYMENT FOR THE 2014 BONDS – Special Reserve Fund” in the foregoing Official Statement.Monies in the Special Reserve Fund shall be held by the Fiscal Agent for the benefit of the District andthe 2014 Bond Owners as a reserve for the payment of principal of (including sinking fund payments, ifany), and interest and any premium on, the 2014 Bonds. Moneys in the Special Reserve Fund shall beyield restricted, in accordance with the Tax Certificate.

(1) Deposits to the Special Reserve Fund; Special Reserve Fund Requirement. On or prior tothe Closing Date, the District will deposit with the Fiscal Agent an amount equal to $148,106.94 fromSpecial Tax Revenues previously collected and the Fiscal Agent shall deposit said amount into theSpecial Reserve Fund. The Fiscal Agent will thereafter accept from the District and deposit into theSpecial Reserve Fund all Excess Special Tax Revenues, available under the Fiscal Agent Agreement,until funds in the Special Reserve Fund equal the Special Reserve Fund Requirement.

(2) Transfer Due to Deficiency in Redemption Fund. If the amounts in the Redemption Fundare insufficient to pay the principal of, including sinking account payments, and interest on the 2014Bonds when due, the Fiscal Agent shall withdraw from the Special Reserve Fund moneys necessary forsuch purposes before any draws are made on the Reserve Fund.

(3) Transfer When Balance Exceeds Special Reserve Fund Requirement. If so directed inwriting by an Authorized Officer, the amounts on deposit in the Special Reserve Fund that are in excessof the Special Reserve Fund Requirement may be withdrawn from time to time, and transferred to theDistrict to be used in accordance with the Act. If so directed in a Certificate of an Authorized Officer, theFiscal Agent shall withdraw from the Special Reserve Fund moneys in excess of the Special ReserveFund Requirement one Business Day prior to each March 1 and September 1 and shall transfer suchmoneys to the Redemption Fund to pay principal of and interest on the 2014 Bonds.

(4) Redemption of Bonds. Amounts in the Special Reserve Fund may be applied to theredemption of the 2014 Bonds or a partial defeasance of the 2014 Bonds at the written direction of theDistrict, so long as the amount on deposit in the Special Reserve Fund following such optionalredemption or partial defeasance at least equals the Special Reserve Fund Requirement.

Replenishment from Special Tax Fund. Following the date of any withdrawal made from theSpecial Reserve Fund, as described in paragraph (2) above, the balance on deposit in the Special ReserveFund shall be replenished from Special Tax Revenues deposited into the Special Tax Fund, in accordancewith the Fiscal Agent Agreement, or from any other legally available funds which the District elects toapply to such purpose, the amount needed to restore the amount of the Special Reserve Fund to theSpecial Reserve Fund Requirement. If amounts in the Special Reserve Fund together with any otheramounts transferred to replenish the Special Reserve Fund are inadequate to restore the Special ReserveFund to the Special Reserve Fund Requirement, then the District shall include the amount necessary tofully restore the Special Reserve Fund to the Special Reserve Fund Requirement in the next annualSpecial Tax levy to the extent of the maximum permitted Special Tax rates.

Investment. Interest Earnings and profits resulting from said investment shall be retained in theSpecial Reserve Fund, subject to the provisions of the Fiscal Agent Agreement.

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Rebate Fund. The Fiscal Agent shall establish and maintain a fund separate from any other funddesignated as the Rebate Fund. All money at any time deposited in the Rebate Fund shall be held by theFiscal Agent in trust, to the extent required to satisfy the Rebate Requirement for the 2014 Bonds (asdefined computed and provided to the Fiscal Agent in the tax certificate for the 2014 Bonds (the “TaxCertificate”)), for payment to the federal government of the United States of America. Neither theDistrict nor the Owner of any Bonds shall have any rights in or claim to such money. All amountsdeposited into or on deposit in the Rebate Fund shall be governed by the Fiscal Agent Agreement and bythe Tax Certificate. The Fiscal Agent shall be deemed conclusively to have complied with suchprovisions if it follows the directions of the District, including supplying all necessary information in themanner provided in the Tax Certificate to the extent such information is available to it, and shall have noliability or responsibility to enforce compliance by the District with the terms of the Tax Certificate.

Upon the District’s written direction within sixty (60) days after the end of each Bond Year, anamount equal to the Rebate Requirement specified to the Fiscal Agent for the 2014 Bonds shall bedeposited to the Rebate Fund by the Fiscal Agent from balances in the following funds and accountsestablished for the 2014 Bonds from the Reserve Fund, so that the balance of the Rebate Fund after suchdeposit shall equal the Rebate Requirement for the 2014 Bond Year for the 2014 Bonds (as such term isdefined in the Tax Certificate and not as such term is defined in the Fiscal Agent Agreement) calculated atthe most recent calculation date as required by the Tax Certificate.

The Fiscal Agent shall invest all amounts held in the Rebate Fund at the written direction of theDistrict in any authorized investment, subject to the restrictions set forth in the Tax Certificate. TheFiscal Agent shall retain all earnings (calculated by taking into account net gains or losses on sales orexchanges and taking into account amortized discount or premium as a gain or loss, respectively) oninvestments held in the Rebate Fund. Upon receipt of the District’s written directions, the Fiscal Agentshall remit part or all of the balance in the Rebate Fund to the United States, as so directed. The FiscalAgent shall invest all amounts held in the Rebate Fund at the written direction of the District in anyauthorized investment, subject to the restrictions set forth in the Tax Certificate.

Covenants of the District

Collection of Special Taxes. The District shall comply with all requirements of the Act and theFiscal Agent Agreement to assure the timely levy and collection of the Special Taxes, including, withoutlimitation, the enforcement of rights the District may have with regard to delinquent Special Taxes. AnySpecial Tax Revenues received by the District in and for the District shall be transmitted, in a timelymanner, to the Fiscal Agent, without deduction, to be deposited into the funds and accounts in the FiscalAgent Agreement specified. To that end, the following shall apply:

(A) Special Taxes coming due in any year shall be payable in the same manner and atthe same time as the general ad valorem taxes on real property within the County are payable, andbecome delinquent at the same times and in the same proportionate amounts and bear the sameproportionate penalties and interests after delinquency as do the general ad valorem taxes on realproperty; all sums received from the collection of the Special Taxes and of the interest andpenalties thereon shall be placed in the Special Tax Fund promptly following collection, and shallthereafter be transferred and disbursed as described in the Fiscal Agent Agreement; and

(B) The Authorized Officer shall, before the final date on which the Auditor willaccept the transmission of the Special Tax roll for the parcels within the District for inclusion onthe next tax roll, prepare or cause to be prepared, and shall transmit to the Auditor or theTreasurer, as applicable, such data as the Auditor or Treasurer requires to include the SpecialTaxes on the next secured tax roll of the County. The Authorized Officer is authorized to employ

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consultants to assist in computing Special Taxes under the Fiscal Agent Agreement, inreconciling Special Taxes levied to amounts received, and in computing Special Tax Revenuesnecessary to pay to Annual Debt Service and Administrative Expenses in each Fiscal Year.

Foreclosure. The District covenants with and for the benefit of the Owners of the 2014 Bondsthat it will order, and cause to be commenced, and thereafter diligently prosecute an action in the superiorcourt to foreclose the lien of any Special Taxes which have been billed, but have not been paid, pursuantto and as provided in the Act, and the conditions specified in the foreclosure covenant provisions of theFiscal Agent Agreement. The Authorized Officer shall notify its counsel of any such delinquency ofwhich the Authorized Officer is aware, and such counsel shall commence, or cause to be commenced,such foreclosure proceedings, including collection actions preparatory to the filing of any complaint,against parcels delinquent in the payment of Special Taxes, within 90 days of any of the followingdeterminations which shall be made by the Authorized Officer not later than July 1 of each year: (A) ifthe District determines that there is a delinquency of Special Taxes equal to or greater than the sum of atleast four (4) installments of Special Taxes from that parcel, the District shall commence foreclosureproceedings against each such delinquent parcel; and (B) if the Authorized Officer determines that thetotal amount of delinquent Special Taxes in the current Fiscal Year for the entire District, less the totaldelinquencies under subsection (A) above, exceeds five percent (5%) of the total Special Taxes due andpayable in the current Fiscal Year, the District shall commence foreclosure proceedings against alldelinquent parcels in the District.

Punctual Payment. The District will punctually pay or cause to be paid the principal of, andinterest and any Redemption Premium on, the 2014 Bonds when and as due in strict conformity with theterms of the Fiscal Agent Agreement and any Supplement, and it will faithfully observe and perform allof the conditions, covenants and requirements of the Fiscal Agent Agreement and all Supplements and ofthe 2014 Bonds.

Extension of Time for Payment. In order to prevent any accumulation of claims for interest aftermaturity, the District shall not, directly or indirectly, extend or consent to the extension of the time for thepayment of any claim for interest on any of the 2014 Bonds and shall not, directly or indirectly, be a partyto the approval of any such arrangement by purchasing or funding said claims for interest or in any othermanner. In case any such claim for interest shall be extended or funded, whether or not with the consentof the District, such claim for interest so extended or funded shall not be entitled, in case of default underthe Fiscal Agent Agreement, to the benefits of the Fiscal Agent Agreement, except subject to the priorpayment in full of the principal of all of the 2014 Bonds then Outstanding and of all claims for interestwhich shall not have so extended or funded.

Against Encumbrances. The District will not encumber, pledge or place any charge or lien uponany of the Special Tax Revenues or other amounts pledged to the 2014 Bonds superior to or on a paritywith the pledge and lien in the Fiscal Agent Agreement created for the benefit of the 2014 Bonds, exceptas permitted by the Resolution of Issuance, the Fiscal Agent Agreement or the Act.

Books and Accounts. The District will keep, or cause to be kept, proper books of record andaccount, separate from all other records and accounts of the District, in which complete and correctentries shall be made of all transactions relating to the Special Taxes, which records shall be subject toinspection by the Owners of the 2014 Bonds, upon reasonable prior notice on any Business Day.

Protection of Security and Rights of Owners. The District will preserve and protect the securityof the 2014 Bonds and the rights of the Owners thereto, and will warrant and defend their rights to suchsecurity against all claims and demands of all persons. From and after the delivery of any of the 2014Bonds by the District, the validity of the 2014 Bonds shall be incontestable by the District.

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Certain Tax Covenants. The District shall assure that the proceeds of the 2014 Bonds are not soused as to cause the 2014 Bonds to satisfy the private business tests of Section 141(b) of the Code or theprivate loan financing test of Section 141(c) of the Code. The District shall not take any action or permitor suffer any action to be taken if the result of the same would be to cause any of the 2014 Bonds to be“federally guaranteed” within the meaning of Section 149(b) of the Code. The District shall take any andall actions necessary to assure compliance with Section 148(f) of the Code, relating to the rebate of excessinvestment earnings, if any, to the federal government, to the extent that such section is applicable to the2014 Bonds. Earnings on the Reserve Fund shall be transferred to the Rebate Fund used for rebatepurposes before any application thereof as credits to the Redemption Fund. The District shall not take, orpermit or suffer to be taken by the Authorized Officer, by the Fiscal Agent or otherwise, any action withrespect to the proceeds of the 2014 Bonds which, if such action had been reasonably expected to havebeen taken, or had been deliberately and intentionally taken, on the date of issuance of the 2014 Bondswould have caused the 2014 Bonds to be “arbitrage bonds” within the meaning of Section 148 of theCode. In determining the yield of the 2014 Bonds the District will take into account redemption(including premium, if any) in advance of maturity based on the reasonable expectations of the District, asof the Closing Date, regarding prepayments of Special Taxes and use of prepayments for redemption ofthe 2014 Bonds, without regard to whether or not prepayments are received or Bonds redeemed. TheDistrict shall take all actions necessary to assure the exclusion of interest on the 2014 Bonds from thegross income of the Owners of the 2014 Bonds to the same extent as such interest is permitted to beexcluded from gross income under the Code as in effect on the date of issuance of the 2014 Bonds.

Investments

Monies in any fund or account created or established by the Fiscal Agent Agreement and held bythe Fiscal Agent shall be invested by the Fiscal Agent in Authorized Investments, as directed pursuant toa certificate from the Authorized Representative filed with the Fiscal Agent at least two (2) Business Daysin advance of the making of such investments.

The following shall apply to such investments: (A) in the absence of any such certificate fromthe Authorized Representative, the Fiscal Agent shall invest any such monies in a money-market fundmeeting the requirements of an Authorized Investment which by its term permits withdrawal of suchfunds prior to the date on which such monies are required to be paid out under the Fiscal AgentAgreement and obligations purchased as an investment of monies in any fund shall be deemed to be partof such fund or account, subject, however, to the requirements of the Fiscal Agent Agreement for transferof interest earnings and profits resulting from investment of amounts in funds and accounts; (B) the FiscalAgent may act as principal or agent in the acquisition or disposition of any investment and shall incur noliability for losses arising from any investments made pursuant to the Fiscal Agent Agreement;(C) subject to certain provisions of the Fiscal Agent Agreement, investments in any and all funds andaccounts may at the discretion of the Fiscal Agent be commingled in a separate fund or funds for purposesof making, holding and disposing of investments, notwithstanding provisions in the Fiscal AgentAgreement for transfer to or holding in or to the credit of particular funds or accounts of amounts receivedor held by the Fiscal Agent under the Fiscal Agent Agreement, provided that the Fiscal Agent shall at alltimes account for such investments strictly in accordance with the funds and accounts to which they arecredited and otherwise as provided in the Fiscal Agent Agreement; (D) the Fiscal Agent may investamounts in the Reserve Fund in investment agreements, guaranteed investment contracts, fundingagreements or similar agreements only if such agreement provides that the agreement may be terminatedat any time without financial penalty; (E) the Fiscal Agent shall sell at Fair Market Value, or present forredemption, any investment security whenever it shall be necessary to provide monies to meet anyrequired payment, transfer, withdrawal or disbursement from the fund or account to which suchinvestment security is credited and the Fiscal Agent shall not be liable or responsible for any lossresulting from the acquisition or disposition of such investment security in accordance with the Fiscal

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Agent Agreement; provided, however, that the highest of any three bids received in accordance withapplicable regulations under the Code by the Fiscal Agent shall be conclusively deemed to be the FairMarket Value for investments described in subsection (ii) of the definition of Fair Market Value; (F) theFiscal Agent or any of its affiliates may act as sponsor or advisor in connection with any AuthorizedInvestments; and (G) the District acknowledges that, to the extent regulations of the Controller of theCurrency or other applicable regulatory entity grant the District the right to receive brokerageconfirmations of security transactions as they occur, the District specifically waives receipt of suchconfirmations to the extent permitted by law. The Fiscal Agent will furnish the District periodic cashtransaction statements which include detail for all investment transactions made by the Fiscal Agent underthe Fiscal Agent Agreement.

Except as otherwise provided in the following sentence, the District covenants that allinvestments of amounts deposited in any fund or account under the Fiscal Agent Agreement, or otherwisecontaining gross proceeds of the 2014 Bonds (under Section 148 of the Code) shall be acquired, disposedof and valued (as of the date that valuation is required by the Fiscal Agent Agreement or the Code) at FairMarket Value. The District further covenants that investments in funds or accounts (or portions thereof)that are subject to a yield restriction under applicable provisions of the Code and (unless valued at leastannually) investments in the Reserve Fund shall be valued at their present value (under Section 148 of theCode).

Liability of the District

The District shall not incur any responsibility in respect of the 2014 Bonds or the Fiscal AgentAgreement other than in connection with the duties or obligations explicitly provided in the Fiscal AgentAgreement or in the 2014 Bonds. The District shall not be liable to any Owner in connection with theperformance of its duties under the Fiscal Agent Agreement, except for its own negligence or willfuldefault. The District shall not be bound to ascertain or inquire as to the performance or observance of anyof the terms, conditions, covenants or agreements of the Fiscal Agent in the Fiscal Agent Agreement or ofany of the documents executed by the Fiscal Agent in connection with the 2014 Bonds, or as to theexistence of a default under the Fiscal Agent Agreement. Under the Fiscal Agent Agreement, thefollowing shall apply to the District: (A) in the absence of bad faith, the District, including theAuthorized Officer, may conclusively rely, as to the truth of the statements and the correctness of theopinions expressed therein, upon certificates or opinions furnished to the District and conforming to therequirements of the Fiscal Agent Agreement and the District, including the Authorized Officer, shall notbe liable for any error of judgment made in good faith unless it shall be proved that it was negligent inascertaining the pertinent facts; (B) no provision of the Fiscal Agent Agreement shall require the Districtto expend or risk its own general funds or otherwise incur any financial liability (other than with respectto the foreclosure proceedings for delinquent Special Taxes and the payment of fees and costs of theFiscal Agent) in the performance of any of its obligations under the Fiscal Agent Agreement or in theexercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment ofsuch funds or adequate indemnity against such risk or liability is not reasonably assured to it; (C) theDistrict may rely and shall be protected in acting or refraining from acting upon any notice, resolution,request, consent, order, certificate, report, warrant, bond or other paper or document believed by it to begenuine and to have been signed or presented by the proper party or proper parties; but in the case of anysuch certificates or opinions by which any provision of the Fiscal Agent Agreement are specificallyrequired to be furnished to the District, the District shall be under a duty to examine the same todetermine whether or not they conform to the requirements of the Fiscal Agent Agreement; (D) neitherthe District nor the Fiscal Agent shall be bound to recognize any person as the Owner of a Bond unlesssuch Bond is duly registered and until such Bond is submitted for inspection, if required, and suchOwner’s title thereto is satisfactorily established if disputed; and (E) whenever in the administration of itsduties under the Fiscal Agent Agreement, the District shall deem it necessary or desirable that a matter be

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proved or established prior to taking or suffering any action under the Fiscal Agent Agreement, suchmatter (unless other evidence in respect thereof be in the Fiscal Agent Agreement specifically prescribed)may, in the absence of willful misconduct on the part of the District, be deemed to be conclusively provedand established by a certificate of an expert retained by the District for such purposes.

Events of Default and Remedies

Events of Default. The following events shall be Events of Default under the Fiscal AgentAgreement: (a) default in the due and punctual payment of the principal of any Bond when and as thesame shall become due and payable, whether, at maturity or through mandatory sinking fund redemption;(b) default in the due and punctual payment of interest on any Bond when and as such interest paymentshall become due and payable; (c) default by the District in the observance of any of the other covenants,agreements or conditions on its part in the Fiscal Agent Agreement or in the 2014 Bonds contained, ifsuch default shall have continued for a period of sixty (60) days after written notice thereof, specifyingsuch default and requiring the same to be remedied, shall have been given to the District by the FiscalAgent; provided, however, that if in the reasonable opinion of the District, the default stated in the noticecan be corrected, but not within such sixty (60) day period, such default shall not constitute an Event ofDefault under the Fiscal Agent Agreement if the District shall commence to cure such default within suchsixty (60) day period and thereafter diligently and in good faith cure such failure in a reasonable period oftime; (d) The filing by the District of a petition or answer seeking reorganization or arrangement underthe federal bankruptcy laws or any other applicable law of the United States of America, or if, under theprovisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shallassume custody or control of the District or of the whole or any substantial part of its property.

Application of Funds Upon Default. All amounts received by the Fiscal Agent pursuant to anyright given or action taken by the Fiscal Agent under the provisions of the Fiscal Agent Agreement shallbe applied by the Fiscal Agent in the following order:

First, to the payment of reasonable fees, charges and expenses of the Fiscal Agent (includingreasonable fees and disbursements of its counsel) incurred in and about the performance of itspowers and duties under the Fiscal Agent Agreement; and

Second, to the payment of the whole amount then owing and unpaid upon the 2014 Bonds forinterest and principal, in the manner set forth in the Fiscal Agent Agreement, with interest onsuch overdue amounts to the extent permitted by law at the net effective rate of interest thenborne by the Outstanding Bonds, and in case such monies shall be insufficient to pay in full thewhole amount so owing and unpaid upon the 2014 Bonds, then to the payment of such interest,principal and interest on overdue amounts without preference or priority among such interest,principal and interest on overdue amounts ratably to the aggregate of such interest, principal andinterest on overdue amounts.

Other Remedies; Rights of Owners. Upon the occurrence of an Event of Default, the Fiscal Agentmay pursue any available remedy at law or in equity to enforce the payment of the principal of, premium,if any, and interest on the Outstanding Bonds, and to enforce any rights of the Fiscal Agent under or withrespect to the Fiscal Agent Agreement. If an Event of Default shall have occurred and be continuing andif requested so to do by the Owners of a majority in aggregate principal amount of Outstanding Bondsand indemnified as provided in the provisions of the Fiscal Agent Agreement relating to liability of theDistrict, the Fiscal Agent shall be obligated to exercise such one or more of the rights and powersconferred by events of default and remedies provisions of the Fiscal Agent Agreement, as the FiscalAgent, being advised by counsel, shall deem most expedient in the interests of the Owners. No remedyby the terms of the Fiscal Agent Agreement conferred upon or reserved to the Fiscal Agent (or to the

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Owners) is intended to be exclusive of any other remedy, but each and every such remedy shall becumulative and shall be in addition to any other remedy given to the Fiscal Agent or to the Owners underthe Fiscal Agent Agreement or now or thereafter existing at law or in equity.

Power of Fiscal Agent to Control Proceedings. In the event that the Fiscal Agent, upon theoccurrence of an Event of Default, shall have taken any action, by judicial proceedings or otherwise,pursuant to its duties under the Fiscal Agent Agreement, whether upon its own discretion or upon therequest of the Owners of a majority in principal amount of the 2014 Bonds then Outstanding, it shall havefull power, in the exercise of its discretion for the best interests of the Owners of the 2014 Bonds, withrespect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of suchaction to the extent permitted by the Act; provided, however, that the Fiscal Agent shall not, unless thereno longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwisedispose of any litigation pending at law or in equity, if at the time there has been filed with it a writtenrequest signed by the Owners of a majority in principal amount of the Outstanding Bonds under the FiscalAgent Agreement opposing such discontinuance, withdrawal, compromise, settlement or other disposal ofsuch litigation.

Rights and Remedies of Owners. No Owner of any Bond issued under the Fiscal AgentAgreement shall have the right to institute any suit, action or proceeding at law or in equity, for anyremedy under or upon the Fiscal Agent Agreement, unless (a) such Owner shall have previously given tothe Fiscal Agent written notice of the occurrence of an Event of Default; (b) the Owners of a majority inaggregate principal amount of all the 2014 Bonds then Outstanding shall have made written request uponthe Fiscal Agent to exercise the powers in the Fiscal Agent Agreement before granted or to institute suchaction, suit or proceeding in its own name; (c) said Owners shall have tendered to the Fiscal Agentindemnity reasonably acceptable to the Fiscal Agent against the costs, expenses and liabilities to beincurred in compliance with such request; (d) the Fiscal Agent shall have refused or omitted to complywith such request for a period of sixty (60) days after such written request shall have been received by,and said tender of indemnity shall have been made to, the Fiscal Agent; and (e) the Fiscal Agent has notreceived any inconsistent direction during such 60-day period from the Owners of a majority in aggregateprincipal amount of the Outstanding Bonds.

The Fiscal Agent

Appointment. Pursuant to the Fiscal Agent Agreement, Zions First National Bank is appointedfiscal agent and paying agent for the 2014 Bonds. The Fiscal Agent undertakes to perform such duties,and only such duties, as are specifically set forth in the Fiscal Agent Agreement, and no impliedcovenants or obligations shall be read into the Fiscal Agent Agreement against the Fiscal Agent. Withrespect to the appointment of the Fiscal Agent, the following shall apply: (A) any financial establishmentinto which the Fiscal Agent may be merged or converted or with which it may be consolidated or anyfinancial establishment resulting from any merger, conversion or consolidation to which it shall be a partyor any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trustbusiness, provided such company shall be eligible under paragraph (B) below shall be the successor tosuch Fiscal Agent without the execution or filing of any paper or any further act, anything in the FiscalAgent Agreement to the contrary notwithstanding; (B) unless an Event of Default shall have occurred andby continuing the District may remove the Fiscal Agent initially appointed and any successor thereto, andmay appoint a successor or successors thereto, but any Fiscal Agent shall be a bank or trust companyhaving a combined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars($50,000,000) and subject to supervision or examination by federal or state authority; (C) the FiscalAgent may at any time resign by giving written notice to the District, and by giving to the Owners noticeby mail of such resignation and any resignation or removal of the Fiscal Agent shall become effectiveupon acceptance of appointment by the successor Fiscal Agent; (D) if by reason of the judgment of any

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court, the Fiscal Agent is rendered unable to perform its duties under the Fiscal Agent Agreement, allsuch duties and all of the rights and powers of the Fiscal Agent under the Fiscal Agent Agreement shallbe assumed by and vest in the Treasurer in trust for the benefit of the Owners until such time as theDistrict shall appoint a successor Fiscal Agent; and (E) if no appointment of a successor Fiscal Agentshall be made pursuant to the foregoing provisions within forty-five (45) days after the Fiscal Agent shallhave given to the District written notice or after a vacancy in the office of the Fiscal Agent shall haveoccurred by reason of its inability to act, the Fiscal Agent or any Bond Owner may apply to any court ofcompetent jurisdiction to appoint a successor Fiscal Agent.

Liability of Fiscal Agent. With respect to the liability of the Fiscal Agent, the following shallapply: (A) the recitals of facts, covenants and agreements in the Fiscal Agent Agreement and in the 2014Bonds contained shall be taken as statements, covenants and agreements of the District, and the FiscalAgent assumes no responsibility for the correctness of the same, makes no representations as to thevalidity or sufficiency of the Fiscal Agent Agreement or of the 2014 Bonds, nor shall incur anyresponsibility in respect thereof, other than in connection with the duties or obligations expressly set forthin the Fiscal Agent Agreement; (B) the Fiscal Agent may conclusively rely, as to the truth of thestatements and the correctness of the opinions expressed therein, upon certificates, written instructions, oropinions furnished to the Fiscal Agent and conforming to the requirements of the Fiscal AgentAgreement; (C) the Fiscal Agent shall not be liable for any error of judgment made in good faith by aresponsible officer unless it shall be proved that the Fiscal Agent was negligent in ascertaining thepertinent facts; (D) no provision of the Fiscal Agent Agreement shall require the Fiscal Agent to expendor risk its own funds or otherwise incur any financial liability in the performance of any of its dutiesunder the Fiscal Agent Agreement, or in the exercise of any of its rights or powers; (E) the Fiscal Agentshall be under no obligation to exercise any of the rights or powers vested in it by the Fiscal AgentAgreement at the request or direction of any of the Owners pursuant to the Fiscal Agent Agreementunless such Owners shall have offered to the Fiscal Agent security or indemnity satisfactory to the FiscalAgent against the costs, expenses and liabilities which might be incurred by it in compliance with suchrequest or direction; (F) the Fiscal Agent may become the Owner of the 2014 Bonds with the same rightsit would have if it were not the Fiscal Agent; (G) all indemnifications and releases from liability grantedto the Fiscal Agent under the Fiscal Agent Agreement shall extend to the directors, officers andemployees of the Fiscal Agent; and (H) the Fiscal Agent shall not be liable with respect to any actiontaken or not taken by it in good faith, in accordance with the direction of the Owners of a majority (orother percentage provided for) in aggregate principal amount of Bonds at the time Outstanding relating tothe exercise of any right or remedy available to the Fiscal Agent under the Fiscal Agent Agreement or anyother right or power conferred upon the Fiscal Agent.

Books and Accounts. The Fiscal Agent will keep, or cause to be kept, proper books of record andaccounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correctentries shall be made of all transactions made by it relating to the expenditure of amounts disbursed fromthe Redemption Fund and the Reserve Fund. Such books of record and accounts shall, upon reasonableprior notice, at all times during regular business hours on any Business Day be subject to the inspection ofthe District and the Owners of not less than ten percent (10%) of the principal amount of the 2014 Bondsthen Outstanding, or their representatives duly authorized in writing.

Compensation; Indemnification. The District shall pay to the Fiscal Agent from time to timereasonable compensation for all services rendered as Fiscal Agent under the Fiscal Agent Agreement, andalso all reasonable expenses, charges, counsel fees and other disbursements, including those of the FiscalAgent’s general counsel or other attorneys and agents, incurred in and about the performance of theirpowers and duties under the Fiscal Agent Agreement, but the Fiscal Agent shall not have a lien thereforon any funds at any time held by it under the Fiscal Agent Agreement. The District agrees, to the extentpermitted by law, to indemnify and save the Fiscal Agent, its officers, employees, directors and agents

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harmless against any liabilities which the Fiscal Agent may incur in the exercise and performance of itspowers and duties under the Fiscal Agent Agreement which are not due to the Fiscal Agent’s negligenceor willful misconduct.

Amendment of Fiscal Agent Agreement

Amendments Permitted. The Fiscal Agent Agreement and the rights and obligations of theDistrict and of the Owners of the 2014 Bonds may be modified or amended at any time by a Supplement,which shall become binding, pursuant to the affirmative vote of the Owners, or with the written consentwithout a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the2014 Bonds then Outstanding, exclusive of Bonds disqualified as provided in the Fiscal AgentAgreement. No such modification or amendment shall (i) extend the maturity of any Bond or reduce theinterest rate thereon, or otherwise alter or impair the obligation of the District to pay the principal of, andthe interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or(ii) permit the creation by the District of any pledge or lien upon the Special Tax Revenues superior to oron a parity with the pledge and lien created for the benefit of the 2014 Bonds (except as otherwisepermitted by the Act, the Resolution of Formation, the laws of the State of California or the Fiscal AgentAgreement), or (iii) reduce the percentage of Bonds required for the amendment of the Fiscal AgentAgreement, or (iv) amend certain amendment provisions.

The Fiscal Agent Agreement and the rights and obligations of the District and of the Owners mayalso be modified or amended at any time by a Supplement, without the consent of any Owners, only to theextent permitted by law and only for any one or more of the following purposes: (A) to add to thecovenants and agreements of the District in the Fiscal Agent Agreement contained, other covenants andagreements thereafter to be observed, or to limit or surrender any right or power in the Fiscal AgentAgreement reserved to or conferred upon the District; (B) to make modifications not adversely affectingany Outstanding Series of Bonds of the District in any material respect; (C) to provide for the issuance ofRefunding Bonds in accordance with the provisions of the Fiscal Agent Agreement providing forRefunding Bonds; or (D) to make such provisions for the purpose of curing any ambiguity, or of curing,correcting or supplementing any defective provision contained in the Fiscal Agent Agreement, or inregard to questions arising under the Fiscal Agent Agreement, as the District and the Fiscal Agent maydeem necessary or desirable and not inconsistent with the Fiscal Agent Agreement, and which shall notadversely affect the rights of the Owners of the 2014 Bonds; or (E) to make such additions, deletions ormodifications as may be necessary or desirable to assure exemption from federal income taxation ofinterest on the 2014 Bonds.

Amendment with Written Consent of Owners. The District and the Fiscal Agent may at any timeadopt and execute a Supplement amending the provisions of the 2014 Bonds or of the Fiscal AgentAgreement or any Supplement in which event the following shall apply: (A) a copy of such Supplement,together with a request to Owners for their consent thereto, shall be mailed by first class mail, by theFiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of such Supplement andrequest shall not affect the validity of the Supplement when assented to as provided in the Fiscal AgentAgreement; (B) such Supplement shall not become effective unless there shall be filed with the FiscalAgent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount ofthe 2014 Bonds then Outstanding (exclusive of Bonds disqualified) and a notice shall have been mailed asprovided in the Fiscal Agent Agreement; and (C) after the Owners of the required percentage of Bondsshall have filed their consents to the Supplement, the District shall mail a notice to the Owners in themanner provided in the Fiscal Agent Agreement for the mailing of the Supplement, stating in substancethat the Supplement has been consented to by the Owners of the required percentage of Bonds and will beeffective as provided in the Fiscal Agent Agreement, but failure to mail copies of said notice shall notaffect the validity of the Supplement or consents thereto).

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Miscellaneous Provisions

Benefits of Agreement Limited to Parties. Nothing in the Fiscal Agent Agreement, expressed orimplied, is intended to give to any person other than the District, the Fiscal Agent and the Owners, anyright, remedy or claim under or by reason of the Fiscal Agent Agreement. Any covenants, stipulations,promises or agreements in the Fiscal Agent Agreement contained by and on behalf of the District shall befor the sole and exclusive benefit of the Owners and the Fiscal Agent.

Discharge of Agreement. Subject to the redemption provisions of the Fiscal Agent Agreement, ifthe District shall pay and discharge the entire indebtedness on all Outstanding Bonds of a given Series inany one or more of the following ways: (A) by well and truly paying or causing to be paid the principalof, and interest and any premium on, all Bonds Outstanding in such Series, as and when the same becomedue and payable; (B) by depositing with the Fiscal Agent, in escrow or trust, at or before maturity, moneywhich, together with the amounts then on deposit in the funds and accounts applicable to such Series ofBonds is fully sufficient to pay all Bonds Outstanding in such Series, including all principal, interest andany applicable Redemption Premiums; or (C) by irrevocably depositing with the Fiscal Agent, in escrowor trust, only (1) cash or (2) Federal Securities, in such amount as the District shall determine, asconfirmed by the report of an independent financial analyst or firm of nationally recognized certifiedpublic accountants (the “Accountants”) verifying the sufficiency of the escrow established to pay the2014 Refunding Bonds in full on the maturity or redemption date (the “Verification”), which will,together with the interest to accrue thereon and monies then on deposit in the fund and accounts be fullysufficient to pay and discharge the indebtedness on all Outstanding Bonds in such Series, including allprincipal, interest and any applicable 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 havebeen given as in the Fiscal Agent Agreement provided or provision satisfactory to the Fiscal Agent shallhave been made for the giving of such notice, then, at the election of the District; and notwithstanding thatany Bonds shall not have been surrendered for payment, the pledge of the Special Tax Revenues andother funds provided for in the Fiscal Agent Agreement and all other obligations of the District under theFiscal Agent Agreement with respect to all Bonds Outstanding shall cease and terminate, except only(i) the obligation of the District to pay or cause to be paid to the Owners of the 2014 Bonds not sosurrendered and paid all sums due thereon; (ii) the obligation of the District to assure that no action istaken or failed to be taken if such action or failure adversely affects the exclusion of interest on the 2014Bonds from gross income for federal income tax purposes, and (iii) the obligation to pay all amountsowing to the Fiscal Agent pursuant to the Fiscal Agent Agreement; and thereafter Special Tax Revenuesshall not be payable to the Fiscal Agent.

Any substitution of securities following the execution and delivery of such escrow agreementshall require the delivery of a Verification, an opinion of bond counsel that such substitution will notadversely affect the exclusion from gross income of the interest on the 2014 Refunding Bonds for Federalincome tax purposes.

Waiver of Personal Liability. No member, officer, agent or employee of the District shall beindividually or personally liable for the payment of the principal of, or interest or any premium on, the2014 Bonds; but nothing in the Fiscal Agent Agreement contained shall relieve any such member, officer,agent or employee from the performance of any official duty provided by law.

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APPENDIX D

FORM OF CONTINUING DISCLOSURE AGREEMENT

This CONTINUING DISCLOSURE AGREEMENT (the “Disclosure Agreement”) is executedand entered into as of December 1, 2014, by and among Community Facilities District No. 6 of the JurupaUnified School District (the “Community Facilities District”), Zions First National Bank, in its capacityas fiscal agent (the “Fiscal Agent”), and Dolinka Group, LLC, a California limited liability company, inits capacity as dissemination agent (the “Dissemination Agent”) under this Disclosure Agreement, inconnection with the issuance of $2,100,000 aggregate principal amount of Jurupa Unified School DistrictCommunity Facilities District No. 6 (Zone 1) Special Tax Bonds, 2014 Series A (the “2014 Bonds”).

W I T N E S S E T H :

WHEREAS, pursuant to the Fiscal Agent Agreement, dated as of December 1, 2014 (the “FiscalAgent Agreement”), by and between the Community Facilities District and the Fiscal Agent, theCommunity Facilities District has issued the 2014 Bonds in the aggregate principal amount set forthabove; and

WHEREAS, the 2014 Bonds are payable from and secured by special taxes levied on propertywithin Zone 1 of the Community Facilities District;

NOW, THEREFORE, for and in consideration of the mutual premises and covenants hereincontained, the parties hereto agree as follows:

Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executedand delivered by the Community Facilities District for the benefit of the owners and beneficial owners ofthe 2014 Bonds and in order to assist the Participating Underwriter (as defined below) in complying withSecurities and Exchange Commission (“S.E.C.”) Rule 15c2-12(b)(5) (as defined below).

Section 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreementwhich apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in thisSection or in this Disclosure Agreement, the following capitalized terms shall have the followingmeanings:

“Annual Report” shall mean any Annual Report provided by the Community Facilities Districtpursuant to, and described in, Sections 3 and 4 of this Disclosure Agreement.

“Annual Report Date” shall mean nine months (currently March 31) next following the end of theCommunity Facilities District’s fiscal year, which fiscal year end, as of the date of this DisclosureAgreement, is June 30.

“Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to voteor consent with respect to, or to dispose of ownership of, any 2014 Bonds (including persons holdingBonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any 2014Bonds for federal income tax purposes.

“Community Facilities District” shall mean Community Facilities District No. 6 of the JurupaUnified School District.

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“Disclosure Representative” shall mean the Superintendent of the School District, AssistantSuperintendent of Business Services or either of their designee(s), or such other officer(s) or employee(s)as the Community Facilities District shall designate in writing to the Dissemination Agent from time totime.

“Dissemination Agent” shall mean Dolinka Group, LLC or any successor Dissemination Agentdesignated in writing by the Community Facilities District and which has filed with the CommunityFacilities District and the Fiscal Agent a written acceptance of such designation.

“EMMA System” shall mean the Electronic Municipal Market Access System of the MSRB (asdefined below) or such other electronic system designated by the MSRB or the S.E.C. for compliancewith the Rule.

“Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Agreement.

“MSRB” shall mean the Municipal Securities Rulemaking Board and any successor entitydesignated under the Rule as the repository for filings made pursuant to the Rule.

“Official Statement” shall mean the Official Statement, dated December 11, 2014, relating to the2014 Bonds.

“Owners” shall mean the registered owners of the 2014 Bonds as set forth in the registrationbooks maintained by the Fiscal Agent.

“Participating Underwriter” shall mean Stifel, Nicolaus & Company, Incorporated, SanFrancisco, California.

“Rule” shall mean Rule 15c2-12(b)(5) adopted by the S.E.C. under the Securities Exchange Actof 1934, as the same may be amended from time to time.

“School District” shall mean Jurupa Unified School District, Riverside, California.

“State” shall mean the State of California.

“Zone 1” shall mean Zone 1 of Community Facilities District No. 6 of the Jurupa Unified SchoolDistrict.

Section 3. Provision of Annual Reports.

(a) The Community Facilities District shall, or shall cause the Dissemination Agent to, notlater than the Annual Report Date, commencing March 31, 2015, provide to the MSRBthrough the EMMA System, in an electronic format and accompanied by identifyinginformation as prescribed by the MSRB, an Annual Report which is consistent with therequirements of Section 4 of this Disclosure Agreement; provided, however, that the firstAnnual Report due on March 31, 2015, may consist solely of a copy of the OfficialStatement and the Audited Financial Statements of the School District. Not later thanfifteen (15) business days prior to the Annual Report Date, the Community FacilitiesDistrict shall provide the Annual Report to the Dissemination Agent and the FiscalAgent. The Annual Report may be submitted as a single document or as separatedocuments comprising a package, and may include by reference other information asprovided in Section 4 of this Disclosure Agreement; provided that the audited financial

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statements of the School District may be submitted separately from the balance of theAnnual Report and later than the Annual Report Date if they are not available by thatdate. If the Dissemination Agent has not received a copy of the Annual Report on orbefore 15 business days prior to the Annual Report Date in any year, the DisseminationAgent shall notify the Community Facilities District and the Fiscal Agent of such failureto receive the applicable Annual Report. The Community Facilities District shall providea written certification with each Annual Report furnished to the Dissemination Agent tothe effect that such Annual Report constitutes the Annual Report required to be furnishedby it hereunder. The Dissemination Agent may conclusively rely upon such certificationof the Community Facilities District and shall have no duty or obligation to review suchAnnual Report.

(b) If the Community Facilities District is unable to provide to the MSRB throughthe EMMA System an Annual Report by the Annual Report Date, the Dissemination Agent shallsend a notice to the MSRB through the EMMA System, if any, in substantially the form attachedas Exhibit A.

(c) The Dissemination Agent shall:

(i) determine each year prior to the Annual Report Date the electronic filingrequirements of the MSRB for the Annual Reports;

(ii) provide any Annual Report received by it to the MSRB through theEMMA System and to the Fiscal Agent as provided herein; and

(iii) if the Dissemination Agent is other than the Community FacilitiesDistrict and to the extent it can confirm such filing of an Annual Report, file a report withthe Community Facilities District and the Fiscal Agent certifying that an Annual Reporthas been provided pursuant to this Disclosure Agreement, stating the date it was providedand confirming that it has been filed with the MSRB through the EMMA System.

Section 4. Content of Annual Reports. The Community Facilities District’s Annual Report shallcontain or incorporate by reference the following:

(a) Audited Financial Statements of the School District prepared in accordance withgenerally accepted accounting principles as promulgated to apply to governmententities from time to time by the Governmental Accounting Standards Board. Ifaudited financial statements are not available at the time required for filing,unaudited financial statements shall be submitted with the Annual Report andaudited financial statements shall be submitted once available.

The School District’s Audited Financial Statements may be accompanied by the following statement:

THE SCHOOL DISTRICT’S ANNUAL FINANCIAL STATEMENT IS PROVIDED SOLELYTO COMPLY WITH THE SECURITIES EXCHANGE COMMISSION STAFF’SINTERPRETATION OF RULE 15C2-12. NO FUNDS OR ASSETS OF THE SCHOOLDISTRICT ARE REQUIRED TO BE USED TO PAY DEBT SERVICE ON THE BONDS,AND THE SCHOOL DISTRICT IS NOT OBLIGATED TO ADVANCE AVAILABLE FUNDSTO COVER ANY DELINQUENCIES. INVESTORS SHOULD NOT RELY ON THEFINANCIAL CONDITION OF THE SCHOOL DISTRICT IN EVALUATING WHETHER TOBUY, HOLD OR SELL THE BONDS.

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(b) The following information regarding the 2014 Bonds, and any refunding bonds,issued by the Community Facilities District with respect to Zone 1:

(i) Principal amount of 2014 Bonds, and/or any bonds issued to refund the2014 Bonds, outstanding as of a date within 60 days preceding the dateof the Annual Report;

(ii) Balance in the Special Tax Fund and the Bond Fund as of a date within60 days preceding the date of the Annual Report;

(iii) Balance in the Reserve Fund and the Special Reserve Fund and astatement of the Reserve Requirement and the Special Reserve FundRequirement, as of a date within 60 days preceding the date of theAnnual Report;

(iv) While there are funds in the Construction Fund, or any accounts or anysubaccounts thereof, the balance in the Construction Fund, and eachaccount or subaccount thereunder, as of a date within 60 days precedingthe date of the Annual Report, and of any other fund or account heldunder the terms of the Fiscal Agent Agreement not referenced inclauses (ii), (iii) or (iv) hereof;

(v) A table summarizing assessed value-to-lien ratios for the property withinZone 1 based on the applicable land use categories under the Rate andMethod of Apportionment of Special Tax of the Community FacilitiesDistrict (the “Rate and Method”). The assessed values in such table willbe determined by reference to the value of the parcels within Zone 1 onwhich the Special Taxes are levied, as shown on the assessment roll ofthe Riverside County Assessor last equalized prior to the September 2next preceding the Annual Report Date. The lien values in such tablewill include all 2014 Bonds outstanding as of a date within 60 dayspreceding the date of the Annual Report and any refunding bondsrelating to the 2014 Bonds and need not include any other debt securedby a special tax or assessments levied on parcels within Zone 1;

(vi) Information regarding the amount of the annual special taxes levied inZone 1, amount collected, delinquent amounts and percent delinquent forthe most recently completed fiscal year;

(vii) A land ownership summary listing property owners, if any, responsiblefor more than 5% of the Special Tax levy as shown on the assessmentroll of the Riverside County Assessor last equalized prior to theSeptember 30 next preceding the Annual Report Date, a summary of theSpecial Taxes levied on the property within Zone 1 owned by suchproperty owners, and the assessed value of such property, as shown onsuch assessment roll;

(viii) Concerning parcels within Zone 1 delinquent in the payment of SpecialTaxes to the Community Facilities District as of a date on or about theimmediately preceding July 1 (if applicable), status of foreclosure

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proceedings, if any, and summary of results of foreclosure sales, ifapplicable e.g.;

• number of parcels within Zone 1 delinquent in payment ofSpecial Tax,

• total of such delinquency and percentage of delinquency inrelation to total Special Tax levy,

• status of the actions taken by the School District and/or theCommunity Facilities District related to any foreclosure proceedingsupon delinquent properties within the Zone 1;

(ix) Identity of any delinquent taxpayer obligated for greater than 5% of theannual Special Tax levy as of the immediately preceding November 1, ifapplicable, plus;

• assessed value of applicable properties, and

• summary of results of foreclosure sales, if available;

(x) A copy of any report for or concerning the Community Facilities District,with respect to Zone 1, as of the immediately preceding October 31,required under State law; and

(xi) Any changes to the Rate and Method applicable to Zone 1 approved orsubmitted to the qualified electors of the Community Facilities Districtfor approval prior to the filing of the Annual Report.

(c) In addition to any of the information expressly required to be provided underparagraphs (a) and (b) of this Section, the Community Facilities District shall provide suchfurther information, if any, as may be necessary to make the specifically required statements, inthe light of the circumstances under which they are made, not misleading.

Any or all of the items listed above may be included by specific reference to otherdocuments, including official statements of debt issues of the Community Facilities District orrelated public entities, which are available to the public through the MSRB’s Internet website orequivalent as may then be in place) or filed with the S.E.C. If the document included byreference is a final official statement, it must be available from the MSRB. The CommunityFacilities District shall clearly identify each such other document so included by reference.

Section 5. Reporting of Listed Events.

(a) Pursuant to the provisions of this Section 5, the Community Facilities Districtshall give, or cause to be given, notice of the occurrence of any of the following events withrespect to the 2014 Bonds in a timely manner, not in excess of ten business days after theoccurrence of the event:

(i) Principal and interest payment delinquencies;

(ii) Non-payment related defaults, if material;

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(iii) Unscheduled draws on debt service reserves (including, e.g., the ReserveFund and Special Reserve Fund) and reflecting financial difficulties;

(iv) Unscheduled draws on credit enhancements reflecting financialdifficulties;

(v) Substitution of the credit or liquidity providers, or their failure toperform;

(vi) Adverse tax opinions, the issuance by the Internal Revenue Service ofproposed or final determinations of taxability, Notices of Proposed Issue(IRS Form 5701-TEB) or other material notices or determinations withrespect to the tax status of the security, or other material events affectingthe tax status of the security;

(vii) Modifications to rights of security holders, if material;

(viii) Bond calls, if material, and tender offers;

(ix) Defeasances;

(x) Release, substitution or sale of property securing repayment of thesecurities, if material;

(xi) Rating changes;

(xii) Bankruptcy, insolvency, receivership or similar event of the obligatedperson;(1)

(xiii) The consummation of a merger, consolidation or acquisition involving anobligated person or the sale of all or substantially all of the assets of theobligated person, other than in the ordinary course of business, the entryinto a definitive agreement to undertake such an action or the terminationof a definitive agreement relating to any such actions, other than pursuantto its terms, if material; and

(xiv) Appointment of a successor or additional trustee or the change of nameof a trustee, if material.

(b) The Dissemination Agent shall, within three business days of obtaining actualknowledge of the occurrence of any of the Listed Events under Section 5(a), contact theDisclosure Representative, inform such person of the event and request that the CommunityFacilities District promptly notify the Dissemination Agent in writing whether or not to report the

(1) For the purposes of the event identified in subparagraph (xii), the event is considered to occur when any of thefollowing occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceedingunder the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court orgovernmental authority has assumed jurisdiction over substantially all of the assets or business of the obligatedperson, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers inpossession but subject to the supervision and orders of a court or governmental authority, or the entry of an orderconfirming a plan of reorganization, arrangement or liquidation by a court or governmental authority havingsupervision or jurisdiction over substantially all of the assets or business of the obligated person.

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event pursuant to subsection (e). For purposes of this Disclosure Agreement, “actual knowledge”of the occurrence of the Listed Events described under clauses (ii), (iii), (vi), (x), (xi), (xii), (xiii)and (xiv) above shall mean actual knowledge by an officer at the office of the DisseminationAgent. The Dissemination Agent shall have no responsibility for determining the materiality ofany of the Listed Events.

(c) As soon as practicable so as to satisfy the requirements of Section 5(a), theCommunity Facilities District shall notify the Dissemination Agent in writing of the occurrenceof any of the Listed Events. Such notice shall instruct the Dissemination Agent to report theoccurrence pursuant to subsection (e). The Community Facilities District shall provide theDissemination Agent with a form of notice of such event in a format suitable for reporting to theMSRB through the EMMA System.

(d) If the Community Facilities District determines that a Listed Event subject to amateriality requirement referenced in clauses (a) (ii), (vi), (vii), (x), (xiii) or (xiv) would not bematerial under applicable federal securities law, the Community Facilities District shall so notifythe Dissemination Agent in writing and instruct the Dissemination Agent not to report theoccurrence pursuant to subsection (e).

(e) If the Dissemination Agent has been instructed by the Community FacilitiesDistrict to report the occurrence of a Listed Event and has received a notice of the occurrence in aformat suitable for filing with the MSRB, the Dissemination Agent shall file a notice of suchoccurrence with the MSRB through the EMMA System (or equivalent as may then be in place).

Section 6. Termination of Reporting Obligation. All of the Community Facilities District’s, theFiscal Agent’s and the Dissemination Agent’s obligations hereunder shall terminate upon the earliest tooccur of (i) the legal defeasance of the 2014 Bonds, (ii) prior redemption of the 2014 Bonds or (iii)payment in full of all the 2014 Bonds. If such termination occurs prior to the final maturity of the 2014Bonds, the Community Facilities District shall give notice of such termination in the same manner as fora Listed Event under Section 5(e).

Section 7. Dissemination Agent. The Community Facilities District may, from time to time,appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this DisclosureAgreement and may discharge any such Dissemination Agent, with or without appointing a successorDissemination Agent. The initial Dissemination Agent shall be Dolinka Group, LLC. The DisseminationAgent may resign by providing at least thirty days’ written notice to the Community Facilities Districtand the Fiscal Agent (if the Fiscal Agent is not the Dissemination Agent). The Dissemination Agent shallhave no duty to prepare the Annual Report or notice of a Listed Event nor shall the Dissemination Agentbe responsible for filing any Annual Report or notice of a Listed Event not provided to it by theCommunity Facilities District in a timely manner and in a form suitable for filing.

Section 8. Amendment; Waiver. Notwithstanding any other provision of this DisclosureAgreement, the Community Facilities District, the Fiscal Agent and the Dissemination Agent may amendthis Disclosure Agreement (and the Fiscal Agent and the Dissemination Agent shall agree to anyamendment so requested by the Community Facilities District, so long as such amendment does notadversely affect the rights or obligations of the Fiscal Agent or the Dissemination Agent, as applicable),and any provision of this Disclosure Agreement may be waived, provided that the following conditionsare satisfied:

(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), itmay only be made in connection with a change in circumstances that arises from a change in legal

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requirements, change in law, or change in the identity, nature, or status of an obligated personwith respect to the 2014 Bonds, or type of business conducted;

(b) the undertakings herein, as proposed to be amended or waived, would, in theopinion of nationally recognized bond counsel, have complied with the requirements of the Ruleat the time of the primary offering of the 2014 Bonds, after taking into account any amendmentsor interpretations of the Rule, as well as any change in circumstances; and

(c) the proposed amendment or waiver either (i) is approved by owners of the 2014Bonds in the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal AgentAgreement with the consent of owners, or (ii) does not, in the opinion of nationally recognizedbond counsel, materially impair the interests of the owners or beneficial owners of the 2014Bonds.

If the annual financial information or operating data to be provided in the Annual Report isamended pursuant to the provisions hereof, the first annual financial information filed pursuant heretocontaining the amended operating data or financial information shall explain, in narrative form, thereasons for the amendment and the impact of the change in the type of operating data or financialinformation being provided.

If an amendment is made to the undertaking specifying the accounting principles to be followedin preparing financial statements, the annual financial information for the year in which the change ismade shall present a comparison between the financial statements or information prepared on the basis ofthe new accounting principles and those prepared on the basis of the former accounting principles. Thecomparison shall include a qualitative discussion of the differences in the accounting principles and theimpact of the change in the accounting principles on the presentation of the financial information in orderto provide information to investors to enable them to evaluate the ability of the Community FacilitiesDistrict to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. Anotice of the change in the accounting principles shall be sent to the MSRB through the EMMA Systemin the same manner as for a Listed Event under Section 5(b).

Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to

prevent the Community Facilities District 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 Community Facilities District chooses to include

any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which

is specifically required by this Disclosure Agreement, the Community Facilities District 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 10. Default. In the event of a failure of the Community Facilities District, the Fiscal

Agent or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Fiscal

Agent may, and (at the written direction of the Participating Underwriter or the owners of at least 25%

aggregate principal amount of Outstanding 2014 Bonds, shall, upon receipt of indemnification reasonably

satisfactory to the Fiscal Agent), and any owner or beneficial owner of the 2014 Bonds may, take such

actions as may be necessary and appropriate, including seeking mandate or specific performance by court

order, to cause the Community Facilities District, the Fiscal Agent or the Dissemination Agent to comply

with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall

not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this

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Disclosure Agreement in the event of any failure of the Community Facilities District, the Fiscal Agent or

the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel

performance. Neither the Fiscal Agent nor the Dissemination Agent shall have any liability to the owners

of the 2014 Bonds or any other party for monetary damages or financial liability of any kind whatsoever

relating to or arising from this Disclosure Agreement.

Section 11. Duties, Immunities and Liabilities of the Fiscal Agent and the Dissemination Agent.

Sections 8.02 and 8.05 of the Fiscal Agent Agreement made and entered into with respect to the 2014

Bonds (the “Fiscal Agent Agreement”), by and between the Community Facilities District and the Fiscal

Agent, are hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were

(solely for this purpose) contained in the Fiscal Agent Agreement, and the Fiscal Agent shall be entitled

to the protections, limitations from liability and indemnities afforded to the Fiscal Agent thereunder. The

Fiscal Agent and the Dissemination Agent shall have only such duties hereunder as are specifically set

forth in this Disclosure Agreement. This Disclosure Agreement does not apply to any other securities

issued or to be issued by the Community Facilities District. The Fiscal Agent shall have no obligation to

make any disclosure concerning the 2014 Bonds, the Community Facilities District or any other matter

except as expressly set out herein, provided that no provision of this Disclosure Agreement shall limit the

duties or obligations of the Fiscal Agent under the Fiscal Agent Agreement. The Fiscal Agent and the

Dissemination Agent shall have no responsibility for the preparation, review, form or content of any

Annual Report or any notice of a Listed Event. The fact that the Fiscal Agent has or may have any

banking, fiduciary or other relationship with the Community Facilities District or any other party, apart

from the relationship created by the Fiscal Agent Agreement and this Disclosure Agreement, shall not be

construed to mean that the Fiscal Agent has knowledge or notice of any event or condition relating to the

2014 Bonds or the Community Facilities District except in its respective capacities under such

agreements. No provision of this Disclosure Agreement shall require or be construed to require the

Dissemination Agent to interpret or provide an opinion concerning any information disclosed hereunder.

Information disclosed hereunder by the Fiscal Agent or the Dissemination Agent may contain such

disclaimer language concerning the Fiscal Agent’s or the Dissemination Agent’s responsibilities

hereunder with respect thereto as the Fiscal Agent or the Dissemination Agent may deem appropriate.

The Dissemination Agent may conclusively rely on the determination of the Community Facilities

District as to the materiality of any event for purposes of Section 5 hereof. Neither the Fiscal Agent nor

the Dissemination Agent makes any representation as to the sufficiency of this Disclosure Agreement for

purposes of the Rule. The Fiscal Agent and the Dissemination Agent shall be paid compensation by the

Community Facilities District for their services provided hereunder in accordance with their schedule of

fees, as amended from time to time, and all reasonable expenses, legal fees and advances made or

incurred by the Fiscal Agent and the Dissemination Agent, as applicable, in the performance of their

respective duties hereunder. The Community Facilities District’s obligations under this Section shall

survive the termination of this Disclosure Agreement.

Section 12. Beneficiaries. The Participating Underwriter and the owners and beneficial owners

from time to time of the 2014 Bonds shall be third-party beneficiaries under this Disclosure Agreement.

This Disclosure Agreement shall inure solely to the benefit of the Community Facilities District, the

Fiscal Agent, the Dissemination Agent, the Participating Underwriter and owners and beneficial owners

from time to time of the 2014 Bonds, and shall create no rights in any other person or entity.

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Section 13. Notices. Any notice or communications to or among any of the parties to this

Disclosure Agreement shall be given to all of the following and may be given as follows:

If to the School Jurupa Unified School District

District: 4850 Pedley Road

Jurupa Valley, California 92509

Telephone: (951) 360-4100

Telecopier: (951) 360-4194

Attention: Superintendent

If to the Dolinka Group, LLC

Dissemination 20 Pacifica, Suite 900

Agent: Irvine, California 92618

Telephone: (949) 250-8300

Telecopier: (949) 250-8301

If to the Zions First National Bank

Fiscal Agent: 550 South Hope Street, Suite 2875

Los Angeles, California 90071

Telephone: (213) 593-3157

Telecopier: (866) 870-0209

If to the Stifel, Nicolaus & Company, Incorporated

Participating One Montgomery Street, 35th Floor

Underwriter: San Francisco, California 94104

Telephone: (415) 445-2332

Telecopier: (415) 445-2395

Attention: Municipal Research Department

provided, however, that all such notices, requests or other communications may be made by telephone and

promptly confirmed by writing. The parties may, by notice given as aforesaid, specify a different address

for any such notices, requests or other communications.

Section 14. Severability. In case any one or more of the provisions contained herein shall for any

reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or

unenforceability shall not affect any other provision hereof.

Section 15. State of California Law Governs. The validity, interpretation and performance of

this Disclosure Agreement shall be governed by the laws of the State of California.

Section 16. 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.

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Section 17. Merger. Any person succeeding to all or substantially all of the Dissemination

Agent’s business shall be the successor Dissemination Agent without the filing of any paper or any

further act.

IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement as of the

date first above written.

JURUPA UNIFIED SCHOOL DISTRICTCOMMUNITY FACILITIES DISTRICT NO. 6

By: ______________________________________Authorized Officer

ZIONS FIRST NATIONAL BANK,as Fiscal Agent

By: ______________________________________Authorized Officer

DOLINKA GROUP, LLC,as Dissemination Agent

By: _________________________________________Authorized Officer

[EXECUTION PAGE OF CONTINUING DISCLOSURE AGREEMENT]

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EXHIBIT A

NOTICE TO THE MUNICIPAL SECURITIES RULEMAKING BOARDOF FAILURE TO FILE ANNUAL REPORT

Name of Obligated Person: Jurupa Unified School District

Name of Obligation: Jurupa Unified School DistrictCommunity Facilities District No. 6 (Zone 1)Special Tax Bonds, 2014 Series A

Date of Delivery: December 23, 2014

NOTICE IS HEREBY GIVEN that Community Facilities District No. 6 of the JurupaUnified School District (the “Community Facilities District”) has not provided an Annual Report withrespect to the above-named 2014 Bonds as required by the Continuing Disclosure Agreement, dated as ofDecember 1, 2014, by and among the Community Facilities District, Zions First National Bank, as FiscalAgent, and Dolinka Group, LLC, as Dissemination Agent. [The Community Facilities District anticipatesthat the Annual Report will be filed by ________________.]

Dated: ________, 20__Dolinka Group, LLC, as Dissemination Agent,on behalf of the Community Facilities District

cc: Community Facilities District No. 6 of theJurupa Unified School DistrictZions First National Bank, as Fiscal AgentStifel, Nicolaus & Company, Incorporated

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APPENDIX E

FORM OF OPINION OF BOND COUNSEL

[CLOSING DATE]

Jurupa Unified School DistrictCommunity Facilities District No. 64850 Pedley RoadJurupa Valley, California 92509

Re: $2,100,000 Jurupa Unified School District Community Facilities District No. 6 (Zone 1)Special Tax Bonds, 2014 Series A

Ladies and Gentlemen:

We have acted as Bond Counsel to the Jurupa Unified School District (the “School District”) inconnection with the issuance of $2,100,000 aggregate principal amount of the captioned (Zone 1) SpecialTax Bonds, 2014 Series A (the “Bonds”), issued by the School District on behalf of its CommunityFacilities District No. 6 (the “District”). The Bonds are issued under the Mello-Roos CommunityFacilities Act of 1982, constituting Title 5, Division 2, Part 1, Chapter 2.5 (commencing with Section53311) of the California Government Code (the “Act”), and pursuant to an authorizing resolution adoptedby the Board of Education of the School District, acting on behalf of the District, on November 17, 2014(the “Resolution”), and a Fiscal Agent Agreement (the “Fiscal Agent Agreement”), dated as ofDecember 1, 2014, by and between the District and Zions First National Bank, as fiscal agent (the “FiscalAgent”). All capitalized terms used herein and not otherwise defined shall have the respective meaningsgiven to such terms in the Fiscal Agent Agreement.

The Bonds are limited obligations of the District, payable solely from the proceeds of Special TaxRevenues and certain funds established pursuant to the Fiscal Agent Agreement and held by the FiscalAgent.

We have examined such instruments, certificates and documents as we have deemed necessary orappropriate for the purposes of the opinions rendered below. In such examination, we have assumed thegenuineness of all signatures, the authenticity of all documents submitted to us as originals and theconformity to the authentic original documents of all documents submitted to us as copies. As to anyfacts material to our opinion, we have, when relevant facts were not independently established, reliedupon the aforesaid instruments, certificates and documents, including the tax and nonarbitrage certificateexecuted by the School District and the District in connection with the issuance of the Bonds (the “TaxCertificate”), dated as of the date hereof, and the statement of reasonable expectations of future events setforth in such Tax Certificate.

On the basis of such examination, our reliance upon the assumptions contained herein and ourconsideration of such questions of law as we considered relevant, and subject to the limitations andqualifications in this opinion, we are of the opinion that:

1. The Bonds have been duly authorized, executed and delivered under the Act and the FiscalAgent Agreement and constitute legal, valid and binding limited obligations of the SchoolDistrict, acting on behalf of the District, payable from levies of Special Taxes, and areenforceable in accordance with their terms. The Bonds are secured by a pledge of, and lienand charge against, all such Special Taxes.

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2. The Internal Revenue Code of 1986, as amended (the “Code”) sets forth certain requirementswhich must be met subsequent to the issuance and sale of the Bonds for interest thereon to beand remain excluded from gross income for federal income tax purposes. Noncompliancewith such requirements could cause the interest on the Bonds to be included in gross incomefor federal income tax purposes retroactive to the date of issue of the Bonds. Pursuant to theFiscal Agent Agreement and the Tax Certificate, the School District and the District, asapplicable, have covenanted to comply with the applicable requirements of the Code in orderto maintain the exclusion of the interest on the Bonds from gross income for federal incometax purposes pursuant to Section 103 of the Code. In addition, the School District and theDistrict, as applicable, have made certain representations and certifications in the FiscalAgent Agreement and the Tax Certificate. We have not independently verified the accuracyof those certifications and representations.

Under existing law, assuming compliance with the tax covenants described herein and theaccuracy of the aforementioned representations and certifications, interest on the Bonds isexcluded from gross income for federal income tax purposes under Section 103 of the Code.We are also of the opinion that such interest is not treated as a preference item in calculatingthe alternative minimum tax imposed under the Code with respect to individuals andcorporations. Interest on the Bonds is, however, included in the adjusted current earnings ofcertain corporations for purposes of computing the alternative minimum tax imposed on suchcorporations.

3. Interest on the Bonds is exempt from personal income taxes of the State of California underpresent state law.

4. Bond Counsel is further of the opinion that the difference between the principal amount of theBonds maturing on September 1, 2019 through September 1, 2034, inclusive, and September1, 2043 (the “Discount Bonds”) and the initial offering price to the public (excluding bondhouses, brokers, or similar persons or organizations acting in the capacity of underwriters orwholesalers) at which price a substantial amount of such Discount Bonds of the samematurity was sold constitutes original issue discount which is excluded from gross income forfederal income tax purposes to the same extent as interest on the Bonds. Further, suchoriginal issue discount accrues actuarially on a constant interest rate basis over the term ofeach Discount Bond and the basis of each Discount Bond acquired at such initial offeringprice by an initial purchaser thereof will be increased by the amount of such accrued originalissue discount. The accrual of original issue discount may be taken into account as anincrease in the amount of tax-exempt income for purposes of determining various other taxconsequences of owning the Discount Bonds, even though there will not be a correspondingcash payment.

The opinions set forth in paragraph 1 (i) assume that the Fiscal Agent has duly authenticated theBonds and (ii) are subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium or similarlaws relating to or affecting creditors’ rights generally (including, without limitation, fraudulentconveyance laws), (b) the effect of general principles of equity, including, without limitation, concepts ofmateriality, reasonableness, good faith and fair dealing and the possible unavailability of specificperformance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, and(c) the limitations on legal remedies against government entities in the State of California. We express noopinion as to any provision in the Fiscal Agent Agreement or the Bonds with respect to the priority of anypledge or security interest or indemnification. We express no opinion with respect to the Rate andMethod of Apportionment of Community Facilities District No. 6 of the Jurupa Unified School District orthe validity of the Special Taxes levied upon any individual parcel.

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In rendering the opinions set forth in paragraphs 2 and 4 above, we are relying uponrepresentations and covenants of the School District in the Fiscal Agent Agreement and of the SchoolDistrict and the District in the Tax Certificate concerning the investment and use of Bond proceeds, therebate to the federal government of certain earnings thereon, and the use of the property and facilitiesfinanced with the proceeds of the Bonds. In addition, we have assumed that all such representations aretrue and correct and that the School District and the District will comply with such covenants. We callattention to the fact that the opinions expressed herein and the exclusion of interest on the Bonds fromgross income for federal income tax purposes may be affected by actions taken or omitted or eventsoccurring or failing to occur after the date hereof. We have not undertaken to determine, or inform anyperson, whether any such actions are taken, omitted, occur or fail to occur.

Except as stated in paragraphs 2 through 4, we express no opinion as to any other federal, state orlocal tax consequences of the ownership or disposition of the Bonds. Furthermore, we express no opinionas to any federal, state or local tax law consequences with respect to the Bonds, or the interest thereon, ifany action is taken with respect to the Bonds or the proceeds thereof upon the advice or approval of othercounsel.

No opinion is expressed herein on the accuracy, completeness or sufficiency of the OfficialStatement or other offering material relating to the Bonds. This opinion is expressly limited to thematters set forth above and we render no opinion, whether by implication or otherwise, as to any othermatters.

This letter and the opinions and matters expressed herein are solely for your use in connectionwith the sale and delivery of the Bonds to Stifel, Nicolaus & Company, Incorporated. We do notundertake to advise you of any subsequent events or developments which might affect the statementscontained herein. Our engagement with respect to this matter has terminated as of the date hereof, and wedisclaim any obligation to update this letter.

Respectfully submitted,

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APPENDIX F

BOOK-ENTRY SYSTEM

The following description of the procedures and record keeping with respect to beneficialownership interests in the 2014 Bonds, payment of principal of and interest on the 2014 Bonds to DirectParticipants, Indirect Participants or Beneficial Owners (as such terms are defined below) of the 2014Bonds, confirmation and transfer of beneficial ownership interests in the 2014 Bonds and other bond-related transactions by and between DTC, Direct Participants, Indirect Participants and BeneficialOwners of the 2014 Bonds is based solely on information furnished by DTC to the Community FacilitiesDistrict which the Community Facilities District believes to be reliable, but the Community FacilitiesDistrict, the Community Facilities District and the Underwriter do not and cannot make any independentrepresentations concerning these matters and do not take responsibility for the accuracy or completenessthereof. Neither the DTC, Direct Participants, Indirect Participants nor the Beneficial Owners shouldrely on the foregoing information with respect to such matters, but should instead confirm the same withDTC or the DTC Participants, as the case may be.

The Depository Trust Company (“DTC”), New York, New York, will act as securities depositoryfor the 2014 Bonds. The 2014 Bonds will be issued as fully-registered securities registered in the name ofCede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorizedrepresentative of DTC. One fully-registered 2014 Bond will be issued for each maturity of the 2014Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organizedunder the New York Banking Law, a “banking organization” within the meaning of the New YorkBanking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning ofthe New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisionsof Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and moneymarket instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit withDTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and othersecurities transactions in deposited securities, through electronic computerized book-entry transfers andpledges between Direct Participants’ accounts. This eliminates the need for physical movement ofsecurities 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-ownedsubsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding companyfor DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation all of whichare registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to theDTC 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 relationshipwith a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard &Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities andExchange Commission. More information about DTC can be found at www.dtcc.com. The informationon such website is not incorporated herein by such reference or otherwise.

Purchases of 2014 Bonds under the DTC system must be made by or through Direct Participants,which will receive a credit for the 2014 Bonds on DTC’s records. The ownership interest of each actualpurchaser of each 2014 Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and IndirectParticipants’ records. Beneficial Owners will not receive written confirmation from DTC of theirpurchase. Beneficial Owners are, however, expected to receive written confirmations providing details of

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the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participantthrough which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the2014 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participantsacting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing theirownership interests in the 2014 Bonds, except in the event that use of the book-entry system for the 2014Bonds is discontinued.

To facilitate subsequent transfers, all 2014 Bonds deposited by Direct Participants with DTC areregistered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may berequested by an authorized representative of DTC. The deposit of the 2014 Bonds with DTC and theirregistration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficialownership. DTC has no knowledge of the actual Beneficial Owners of the 2014 Bonds; DTC’s recordsreflect only the identity of the Direct Participants to whose accounts such 2014 Bonds are credited, whichmay or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsiblefor keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by DirectParticipants to Indirect Participants, and by Direct Participants and Indirect Participants to BeneficialOwners will be governed by arrangements among them, subject to any statutory or regulatoryrequirements as may be in effect from time to time. Beneficial Owners of 2014 Bonds may wish to takecertain steps to augment the transmission to them of notices of significant events with respect to the 2014Bonds, such as redemptions, tenders, defaults, and proposed amendments to the 2014 Bonds documents.For example, Beneficial Owners of the 2014 Bonds may wish to ascertain that the nominee holding the2014 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In thealternative, Beneficial Owners may wish to provide their names and addresses to the Fiscal Agent andrequest that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the 2014 Bonds within a maturity arebeing redeemed, DTC’s practice is to determine by lot the amount of the interest of each DirectParticipant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect tothe 2014 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 Community Facilities District as soon aspossible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights tothose Direct Participants to whose accounts the 2014 Bonds are credited on the record date (identified in alisting attached to the Omnibus Proxy).

Payments on the 2014 Bonds will be made to Cede & Co., or such other nominee as may berequested 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 CommunityFacilities District or the Fiscal Agent, on payable date in accordance with their respective holdings shownon DTC’s records. Payments by Participants to Beneficial Owners will be governed by standinginstructions and customary practices, as is the case with securities held for the accounts of customers inbearer form or registered in “street name,” and will be the responsibility of such Participant and not ofDTC, the Fiscal Agent or the Community Facilities District, subject to any statutory or regulatoryrequirements as may be in effect from time to time. Payment of principal, redemption price and interestpayments to Cede & Co. (or such other nominee as may be requested by an authorized representative ofDTC) is the responsibility of the Community Facilities District or the Fiscal Agent, disbursement of suchpayments to Direct Participants will be the responsibility of DTC, and disbursement of such payments tothe Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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DTC may discontinue providing its services as depository with respect to the 2014 Bonds at anytime by giving reasonable notice to the Community Facilities District or the Fiscal Agent. Under suchcircumstances, in the event that a successor depository is not obtained, the 2014 Bond certificates arerequired to be printed and delivered.

The Community Facilities District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, the 2014 Bondcertificates will be printed and delivered to DTC.

The information in this Section concerning DTC and DTC’s book-entry system has been obtainedfrom sources that the Community Facilities District believes to be reliable, but the Community FacilitiesDistrict takes no responsibility for the accuracy thereof.

Discontinuance of DTC Services

In the event that (a) DTC determines not to continue to act as securities depository for the 2014Bonds, or (b) the Community Facilities District determines that DTC shall no longer act and delivers awritten certificate to the Fiscal Agent to that effect, then the Community Facilities District willdiscontinue the Book-Entry System with DTC for the 2014 Bonds. If the Community Facilities Districtdetermines to replace DTC with another qualified securities depository, the Community Facilities Districtwill prepare or direct the preparation of a new single separate, fully-registered 2014 Bond for eachmaturity of the 2014 Bonds registered in the name of such successor or substitute securities depository asare not inconsistent with the terms of the Fiscal Agent Agreement. If the Community Facilities Districtfails to identify another qualified securities depository to replace the incumbent securities depository forthe 2014 Bonds, then the 2014 Bonds shall no longer be restricted to being registered in the 2014 Bondregistration books in the name of the incumbent securities depository or its nominee, but shall beregistered in whatever name or names the incumbent securities depository or its nominee transferring orexchanging the 2014 Bonds shall designate.

In the event that the Book-Entry System is discontinued, the following provisions would alsoapply: (i) the 2014 Bonds will be made available in physical form, (ii) principal of, and redemptionpremiums if any, on the 2014 Bonds will be payable upon surrender thereof at the trust office of the FiscalAgent identified in the Fiscal Agent Agreement, and (iii) the 2014 Bonds will be transferable andexchangeable as provided in the Fiscal Agent Agreement.

The Community Facilities District and the Fiscal Agent do not have any responsibility orobligation to DTC Participants, to the persons for whom they act as nominees, to Beneficial Owners, orto any other person who is not shown on the registration books as being an owner of the 2014 Bonds,with respect to (i) the accuracy of any records maintained by DTC or any DTC Participants; (ii) thepayment by DTC or any DTC Participant of any amount in respect of the principal of, redemption priceof or interest on the 2014 Bonds; (iii) the delivery of any notice which is permitted or required to be givento registered owners under the Fiscal Agent Agreement; (iv) the selection by DTC or any DTCParticipant of any person to receive payment in the event of a partial redemption of the 2014 Bonds; (v)any consent given or other action taken by DTC as registered owner; or (vi) any other matter arising withrespect to the 2014 Bonds or the Fiscal Agent Agreement. The Community Facilities District and theFiscal Agent cannot and do not give any assurances that DTC, DTC Participants or others will distributepayments of principal of or interest on the 2014 Bonds paid to DTC or its nominee, as the registeredowner, or any notices to the Beneficial Owners or that they will do so on a timely basis or will serve andact in a manner described in this Official Statement. The Community Facilities District and the FiscalAgent are not responsible or liable for the failure of DTC or any DTC Participant to make any paymentor give any notice to a Beneficial Owner in respect to the 2014 Bonds or any error or delay relatingthereto.

jurupa6 2014 posg - californiacdiacdocs.sto.ca.gov/2014-1943.pdf · special tax bonds, 2014 series...

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