$23,155,000 COUNTY OF SACRAMENTO COMMUNITY FACILITIES DISTRICT NO (NORTH VINEYARD STATION NO. 1) SPECIAL TAX BONDS, SERIES 2016

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1 NEW ISSUE (Book-Entry Only) NO RATING In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the County, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the 2016 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the 2016 Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the 2016 Bonds. See CONCLUDING INFORMATION Tax Matters. $23,155,000 COUNTY OF SACRAMENTO COMMUNITY FACILITIES DISTRICT NO (NORTH VINEYARD STATION NO. 1) SPECIAL TAX BONDS, SERIES 2016 Dated: Date of Initial Issuance Due: September 1, inside cover The County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Special Tax Bonds, Series 2016 (the 2016 Bonds ) are being issued by the County of Sacramento (the County ) with respect to its Community Facilities District No (North Vineyard Station No. 1) (the District ) to provide funds to (i) refund the outstanding County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Special Tax Bonds, Series 2007A, issued by the County with respect to the District, (ii) pay costs of the acquisition and construction of certain public facilities required in connection with the development of land within the District, (iii) fund a Bond Reserve Fund in the amount described herein, (iv) fund capitalized interest on a portion of the 2016 Bonds through approximately September 1, 2016, and (v) pay certain costs of issuing the 2016 Bonds. The 2016 Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section et seq. of the Government Code of the State of California), and pursuant to Resolution No adopted by the Board of Supervisors of the County (the Board of Supervisors ) on August 7, 2007 (the Original Resolution ), as supplemented by Resolution No adopted by the Board of Supervisors on April 26, 2016 (the First Supplement and together with the Original Resolution, the Bond Resolution ). The District has been formed by and is located in the County. The 2016 Bonds are being issued in fully registered book-entry form only in denominations of $5,000 or any integral multiple thereof and, when executed and delivered, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ( DTC ), which will act as securities depository for the 2016 Bonds, and purchasers will not receive certificates representing their interests in the 2016 Bonds. See THE 2016 BONDS Book-Entry Only System. Interest on the 2016 Bonds is payable semiannually on each March 1 and September 1, commencing September 1, Such interest on and the principal of the 2016 Bonds is payable by the County s Director of Finance to Cede & Co., and such payments are expected to be disbursed to the beneficial owners of the 2016 Bonds through the participants of DTC. The 2016 Bonds and any additional bonds payable on a parity with them (collectively, the Bonds ) are payable from the proceeds of an annual special tax (the Special Tax ) to be levied on and collected from Parcels of Taxable Property (as defined herein) in the District. The Special Tax is to be levied according to the amended rate and method of apportionment approved by the County Board of Supervisors and by the vote of the qualified landowner-electors in the District. See APPENDIX B AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX. The Special Tax will be collected in the same manner and at the same time as ad valorem property taxes applicable to the Parcels of Taxable Property. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS The Special Tax. The 2016 Bonds are subject to optional, mandatory and extraordinary redemption as described herein. See THE 2016 BONDS Redemption. Neither the full faith and credit nor the general taxing power of the County, the District, the State of California, or any political subdivision thereof is pledged to the payment of the 2016 Bonds. The 2016 Bonds are not general obligations of the County but are limited obligations of the County payable solely from proceeds of the Special Tax and certain funds and accounts as provided in the Bond Resolution. This cover page contains certain information for general reference only. It is not a summary of the 2016 Bonds. Prospective investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. See SPECIAL RISK FACTORS for a discussion of special risk factors that should be considered, in addition to the other matters set forth herein, in evaluating the investment quality of the 2016 Bonds. MATURITY SCHEDULE (See Inside Cover) The 2016 Bonds are offered when, as and if issued and accepted by the Underwriter, subject to the approval as to their validity by Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the County, and certain other conditions. Certain legal matters will be passed on for the County by the office of County Counsel, and other legal matters will be passed upon for the County by its Disclosure Counsel, Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California and for the Underwriter by its counsel, Jones Hall, A Professional Law Corporation, San Francisco, California. It is anticipated that the 2016 Bonds in book-entry form will be available for delivery to DTC in New York, New York on or about June 8, Dated May 25, 2016.

2 $23,155,000 COUNTY OF SACRAMENTO COMMUNITY FACILITIES DISTRICT NO (NORTH VINEYARD STATION NO. 1) SPECIAL TAX BONDS, SERIES 2016 MATURITY SCHEDULE Maturity September 1 Principal Amount Interest Rate Yield CUSIP No $300, % 0.75% MY , MZ , NA , NB , NC , ND , NE , NF , NG , NH , NJ , C NK , NL , NM , NN , NP , NQ5 $7,100, % Term Bond due September 1, 2040 Yield 3.19% C CUSIP No. : NT9 $6,740, % Term Bond due September 1, 2045 Yield 3.25% C CUSIP No. : NU6 C Yield to optional redemption date of September 1, 2026, at par. CUSIP is a registered trademark of the American Bankers Association ( CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S&P Capital IQ. Copyright 2016 CUSIP Global Services. All rights reserved. CUSIP data herein are provided for convenience of reference only. Neither the County nor the Underwriter takes any responsibility for the accuracy of the CUSIP data.

3 Investment in the 2016 Bonds involves risks which are not appropriate for certain investors. Therefore, only persons with substantial financial resources (in net worth or income) who understand (either alone or with competent investment advice) the risk of investment in the 2016 Bonds should consider such an investment. All information for investors regarding the County of Sacramento (the County ), its Community Facilities District No (North Vineyard Station No. 1) (the District ), and the 2016 Bonds is contained in this Official Statement. While the County maintains an internet website for various purposes, none of the information on that website is intended to assist investors in making any investment decision or to provide any continuing information with respect to the 2016 Bonds or any other obligations of the County or the District. No dealer, broker, salesperson or other person has been authorized by the County to provide any information or to make any representations other than as contained herein and, if given or made, such other information or representation must not be relied upon as having been authorized by the County. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the 2016 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the 2016 Bonds. Statements contained in this Official Statement that involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as a representation of facts. The information and expressions of opinion herein are subject to change without notice; and neither delivery of this Official Statement nor any sale of securities made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the County, the District, the property in the District, the Developer or any matters discussed herein since the date hereof. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT Certain statements included or incorporated by reference in this Official Statement constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as plan, expect, estimate, budget or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. No updates or revisions to those forward-looking statements are expected to be issued if or when the expectations, or events, conditions or circumstances on which such statements are based change. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL SECURITIES AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES SET FORTH ON THE INSIDE FRONT COVER PAGE HEREOF, SUCH PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THEY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

4 COUNTY OF SACRAMENTO, CALIFORNIA BOARD OF SUPERVISORS Roberta MacGlashan, Supervisor, District 4, Chair Don Nottoli, Supervisor, District 5, Vice Chair Patrick Kennedy, Supervisor, District 2 Susan Peters, Supervisor, District 3 Phil Serna, Supervisor, District 1 COUNTY STAFF Navdeep S. Gill, County Executive Britt Ferguson, Chief Financial Officer Kristen Yates, County Debt Officer Ben Lamera, Interim Director of Finance Robyn Truitt Drivon, Esq., County Counsel BOND COUNSEL Orrick, Herrington & Sutcliffe LLP FINANCIAL ADVISOR Public Financial Management, Inc. San Francisco, California DISCLOSURE COUNSEL Stradling Yocca Carlson & Rauth, a Professional Corporation Newport Beach, California SPECIAL TAX CONSULTANT Goodwin Consulting Group, Inc. Sacramento, California APPRAISER Seevers Jordan Zeigenmeyer Real Estate Appraisal and Consultation Rocklin, California VERIFICATION AGENT Causey, Demgen & Moore, P.C. Denver, Colorado

5 TABLE OF CONTENTS Page INTRODUCTION... 1 General... 1 The District... 1 Sources of Payment for the 2016 Bonds... 3 Continuing Disclosure... 4 Bond Owners Risks... 4 Other Information... 4 THE 2016 BONDS... 5 Authority for Issuance... 5 Purpose of the 2016 Bonds... 5 Description of the 2016 Bonds... 5 Limited Obligation... 6 Redemption... 6 Selection of 2016 Bonds for Redemption... 8 Notice of Redemption... 8 Book-Entry Only System... 8 ESTIMATED SOURCES AND USES OF FUNDS... 9 THE REFUNDING PLAN... 9 General... 9 Verification of Mathematical Computations DEBT SERVICE SCHEDULE AND ESTIMATED COVERAGE SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS General The Special Tax Special Tax Analysis Proceeds of the Special Tax Letter of Credit Agreement Letter of Credit Bank Bond Reserve Fund Covenant for Foreclosure Teeter Plan Delinquency History Property Values and the Appraisal Direct and Overlapping Bonded Indebtedness Top Taxpayers Parity Bonds THE DISTRICT General Description Lennar Development Plan Vineyard Creek Status of Entitlements Facilities THE DEVELOPER Lennar Homes of California, Inc i

6 TABLE OF CONTENTS (continued) THE DEVELOPER S FINANCING PLANS SPECIAL RISK FACTORS Introduction Concentration of Ownership Levy of Special Tax Collection of the Special Tax Teeter Plan Termination Exempt Properties Failure to Develop Properties Maximum Special Tax Payment of Special Tax Not Personal Obligation of Property Owners Disclosures to Future Purchasers Parity Taxes and Special Assessments Reductions in Property Values Bankruptcy and Legal Delays FDIC/Federal Government Interests In Properties Geologic, Topographic and Climatic Conditions Endangered Species Legal Requirements Hazardous Substances No Acceleration Provision No Obligation To Pay Debt Service Loss of Tax Exemption Audit of Tax-Exempt Bond Issues Limited Secondary Market; Potential Reductions in Bond Values Proposition Shapiro Decision Ballot Initiatives CONCLUDING INFORMATION Legality Tax Matters Continuing Disclosure No Litigation No General Obligation of the County or the District No Ratings Underwriting Financial Advisor Miscellaneous APPENDIX A APPRAISAL REPORT... A-1 APPENDIX A-1 UPDATE APPRAISAL REPORT... A-1-1 APPENDIX B AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX... B-1 APPENDIX C FORM OF CONTINUING DISCLOSURE CERTIFICATE OF THE COUNTY... C-1 APPENDIX D INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY... D-1 APPENDIX E PROPOSED FORM OF OPINION OF BOND COUNSEL... E-1 APPENDIX F FORM OF DEVELOPER CONTINUING DISCLOSURE AGREEMENT... F-1 APPENDIX G SUMMARY OF CERTAIN PROVISIONS OF THE BOND RESOLUTION... G-1 Page ii

7 $23,155,000 COUNTY OF SACRAMENTO COMMUNITY FACILITIES DISTRICT NO (NORTH VINEYARD STATION NO. 1) SPECIAL TAX BONDS, SERIES 2016 INTRODUCTION General The purpose of this Official Statement, which includes the cover page and attached appendices, is to provide certain information concerning the County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Special Tax Bonds, Series 2016 in the principal amount of $23,155,000 (the 2016 Bonds ). The 2016 Bonds are being issued by the County of Sacramento (the County ) with respect to its Community Facilities District No (North Vineyard Station No. 1) (the District or the CFD ) to provide funds to (i) refund the outstanding County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Special Tax Bonds, Series 2007A, issued by the County with respect to the District (the 2007 Bonds ), (ii) pay costs of the acquisition and construction of certain public facilities required in connection with the development of land within the District, (iii) fund the Bond Reserve Fund in the amount of the Required Bond Reserve (each as defined herein), (iv) fund capitalized interest on a portion of the 2016 Bonds through approximately September 1, 2016, and (v) pay certain costs of issuing the 2016 Bonds. The 2016 Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section et seq. of the Government Code of the State of California), and pursuant to Resolution No adopted by the Board of Supervisors of the County (the Board of Supervisors ) on August 7, 2007 (the Original Resolution ), as supplemented by Resolution No adopted by the Board of Supervisors on April 26, 2016 (the First Supplement and together with the Original Resolution, the Bond Resolution ). Capitalized terms that are not otherwise defined herein shall have the respective meanings ascribed to them in the Bond Resolution. The 2016 Bonds and any additional bonds issued pursuant to the Bond Resolution and payable on a parity with the 2016 Bonds ( Parity Bonds and, together with the 2016 Bonds, the Bonds ) are payable from the proceeds of an annual special tax (the Special Tax ) to be levied and collected from Parcels of Taxable Property (as defined herein) in the District. The Special Tax is to be levied according to the amended rate and method of apportionment approved by the Board of Supervisors on June 5, 2007 and by the vote of the qualified landowner-electors in the District at an election held on May 29, 2007 (the Special Tax Formula ). For purposes of the Special Tax Formula, the 2016 Bonds constitute both Vineyard Creek Bonds and Vineyard Point Bonds. See APPENDIX B AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX. The Special Tax is expected to be collected in the same manner and at the same time as ad valorem property taxes applicable to the Parcels of Taxable Property. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS The Special Tax. The District General. The District is located within an unincorporated area in the southeastern portion of the County, approximately 13 miles southeast of downtown Sacramento and five miles north of the City of Elk Grove. More specifically, the District is situated west of Bradshaw Road, north of Gerber Road and south of Florin Road. The District consists of approximately 284 gross acres and consists of a portion of the North Vineyard Station Specific Plan ( NVSSP ) area. The District includes the master planned community known as Vineyard Point and a portion of the master planned community known as Vineyard Creek. 1

8 Planned Development. Lennar Homes of California, Inc. (the Developer or Lennar ) has completed construction within Vineyard Point with 709 completed single family homes owned by individual homeowners, including a 177-unit active adult community with a clubhouse. The Developer is actively developing the remaining parcels within the Vineyard Creek development. For development planning purposes, Lennar has divided the property that it still owns within the Vineyard Creek portion of the District into Units to be developed in phases. A map showing the location of the Units is included on page 39. The Vineyard Creek portion of the District consists of a portion of Unit 1 and Units 4, 5 and 6, planned for 383 single family detached homes, 185 of which will be part of an age-restricted community. As of March 1, 2016, Lennar had sold and closed 10 completed homes to individual homeowners, 4 completed homes were under contract to be sold, and 24 homes were under construction (13 of which were under contract to be sold) within the portion of Unit 1 of Vineyard Creek in the District. As of such date, construction had not yet commenced in Units 4, 5 or 6. The District is also planned to include a multifamily project on a site of approximately 6.77 acres. Lennar expects to either construct the multi-family project itself or sell the parcel to another merchant builder. The balance of the property within the District consists of approximately 16.6 acres for parks and related open space and trails, and approximately 90 acres for streets and public utilities. See the THE DISTRICT General Description for a summary of the current development status within the District and in CFD No CFD No The remaining portion of the Vineyard Creek development that is not included within the District is within County of Sacramento Community Facilities District No (North Vineyard Station No. 2) ( CFD No ). CFD No is located southeast of the District and is planned for 479 single family detached residential units being developed by Lennar and 94 lots currently owned by Family Real Property Limited Partnership planned for residential development. Thomas P. Winn, as trustee of his personal trust, is the majority owner of Family Real Property Limited Partnership and the sole shareholder of Tom Winn Communities, a California corporation ( Winn Communities ). Winn Communities will undertake to manage and improve the property within CFD No that is owned by Family Real Property Limited Partnership. As referenced herein, Winn shall refer to both Winn Communities and Family Real Property Limited Partnership; provided, however, Winn Communities does not own any real property within CFD No As of March 1, 2016, Lennar had closed 19 homes in CFD No to individual homeowners, had entered into contracts to sell 48 additional homes, had 18 completed homes and 37 homes under construction; the remaining property within the CFD No owned by Lennar was in various stages of development from finished lots to unimproved land and the property owned by Winn was unimproved land. The County expects to issue special tax bonds with respect to CFD No concurrently with the issuance of the 2016 Bonds. A portion of the proceeds of such bonds are expected to fund a portion of the public infrastructure costs necessary to develop the Vineyard Creek project, which includes property within the District and CFD No and the property owned by Winn which is not a part of Vineyard Creek. Special taxes levied within CFD No are not pledged to and are not available to pay the principal of and interest on the 2016 Bonds. Appraisal. An appraisal of certain Taxable Property within the District, dated March 31, 2016, and an Update Appraisal Report dated April 26, 2016 (such appraisal and the Update Appraisal Report are referred to collectively as the Appraisal ), have been prepared by Seevers Jordan Ziegenmeyer, Real Estate Appraisal and Consultation, Rocklin, California (the Appraiser ). A copy of the Appraisal is attached to this Official Statement as Appendix A and Appendix A-1. The purpose of the Appraisal is to set forth the Appraiser s opinions of value of a certain portion of the Taxable Property on the assumptions (among others) that the improvements expected to be financed with 2016 Bond proceeds were installed and that the appraised property were subject to the lien of the Special Taxes. The Appraisal is based on the status of development as of 2

9 January 20, 2016 (the Date of Value ) which, as described above and under the captions THE DISTRICT General Description and THE DEVELOPMENT PLAN, has progressed since such date. To arrive at the estimated value of the Taxable Property within the District, the Appraiser applied the following methodology: (i) for the 657 completed single family homes owned by individual homeowners within the District, as of January 1, 2015, the Appraiser used the Fiscal Year assessed values assigned by the County; (ii) for the 145 completed or partially completed single family homes without an assessed value as of January 1, 2015, the Appraiser used the sales comparison approach to estimate the market values for such homes and (iii) for the remaining Taxable Property within the District, which as of the Date of Value, consisted of 291 lots in either a mass graded or raw land condition, the Appraiser used a discounted cash flow analysis to arrive at the estimated bulk market value. The property described in (ii) and (iii) of the foregoing sentence is referred to in this Official Statement as the Appraised Property. Based on the assumptions set forth in the Appraisal, and subject to the limiting conditions described therein, the Appraiser is of the opinion that the market value of the Appraised Property was $53,610,000 (represents a rounded total of the individually appraised parcels) as of the Date of Value. In the Update Appraisal Report, the Appraiser concludes based on the assumptions and limiting conditions set forth therein that as of April 26, 2016 the value of the Appraised Property was not less than the market value as of the Date of Value. Combined with the Fiscal Year assessed value of the 657 homes within the District owned by individual homeowners as of January 1, 2015 ($178,281,801), the Appraiser is of the opinion that the cumulative (aggregate) value of the Taxable Property within the District, as of the Date of Value, was not less than $231,891,801 (the Composite Value ). This Composite Value is approximately 9.27 times the $23,155,000 principal amount of the 2016 Bonds and the $1,839,629 amount of direct and overlapping tax and assessment debt on the Taxable Property. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS Property Values and the Appraisal and Direct and Overlapping Bonded Indebtedness. The Appraisal is based upon a variety of assumptions and limiting conditions that are described in the full text of the Appraisal attached to this Official Statement as Appendix A and Appendix A-1. The Appraiser s opinions reflect conditions prevailing in the applicable market as of the Date of Value. Neither the County or the Underwriter makes any representation as to the accuracy of the Appraisal. There is no assurance that the property within the District can be sold for the amounts set forth in the Appraisal or that any parcel can be sold for a price sufficient to pay the Special Taxes for such parcel in the event of a default in payment of Special Taxes by the owner of such parcel. See the caption SPECIAL RISK FACTORS Reductions in Property Values, Appendix A and Appendix A-1. Sources of Payment for the 2016 Bonds The County is authorized to issue up to a maximum of $30,000,000 in bonded indebtedness with respect to the District. The County issued the 2007 Bonds in the aggregate principal amount of $14,415,000, leaving a remaining authorization of $15,585,000. The 2016 Bonds are the second series of bonds that may be issued by the County with respect to the District. The 2016 Bonds will refund the 2007 Bonds and include $9,745,000 allocable to finance new capital improvements; therefore, following the issuance of the 2016 Bonds $5,840,000 in bond authorization will remain. See THE REFUNDING PLAN. The 2016 Bonds are referred to in the Special Tax Formula and in the Bond Resolution as Vineyard Point Bonds and as Vineyard Creek Bonds. The County may issue one or more Series of Parity Bonds to finance the construction or acquisition of additional facilities described under the caption THE DISTRICT Facilities in a principal amount equal to the lesser of (i) the amount remaining under the $30,000,000 in bond authorization or (ii) an amount determined based upon the projected Maximum Annual Special Taxes which could be levied on Parcels of Taxable Property within the District at build-out, subject to the requirements under the Bond Resolution for the issuance of Parity Bonds. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS Special Tax Analysis. Upon the issuance of such Parity Bonds, Special Taxes would be levied on the Parcels of Taxable Property within the District to pay debt service on the 2016 Bonds and Parity Bonds. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS Parity Bonds and The Special Tax Classification of Parcels Subject to Special Tax herein. 3

10 Pursuant to the Special Tax Formula, the Special Taxes are apportioned within the District first to Developed Property, then to Parcels of Final Map Property and then to Parcels of Large Lot Subdivision Map Property (as such terms are defined in the Special Tax Formula), to the extent necessary to meet the Special Tax Requirement (as defined in the Special Tax Formula). For the Fiscal Year Special Tax levy, there were 703 parcels of Developed Property (i.e., assessor s parcels for which a building permit has been issued as of June 1, 2015) within the District. Based on development status as of March 1, 2016, 749 parcels classified as Developed Property for the Fiscal Year Special Tax levy are expected to support approximately 81% of the annual debt service on the 2016 Bonds (without considering any capitalized interest). Neither the full faith and credit nor the general taxing power of the County, the District, the State of California, or any political subdivision thereof is pledged to the payment of the 2016 Bonds. The 2016 Bonds are not general obligations of the County but are limited obligations of the County payable solely from proceeds of the Special Tax and certain funds and accounts as provided in the Bond Resolution. Continuing Disclosure The County has agreed to provide, or cause to be provided, to the Electronic Municipal Market Access System ( EMMA ) of the Municipal Securities Rulemaking Board (the MSRB ), certain annual financial information and operating data and notice of certain enumerated events in order to assist the Underwriter in complying with Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time (the Rule ). See the caption CONCLUDING INFORMATION Continuing Disclosure and Appendix C for a description of the specific nature of the annual reports and enumerated event notices to be filed by the County or its representatives. The Underwriter does not consider the Developer to be an obligated person with respect to the 2016 Bonds for purposes of the Rule. Notwithstanding the foregoing, to assist in the marketing of the 2016 Bonds, the Developer has agreed to provide, or cause to be provided to EMMA, certain updates with respect to the development within the District and notices of certain material events. See Appendix F for a description of the specific nature of the annual reports and enumerated event notices to be filed by the Developer or its representatives. Bond Owners Risks Certain events could affect the timely repayment of the principal of, premium, if any and interest on the 2016 Bonds when due. See the caption SPECIAL RISK FACTORS for a discussion of certain factors that should be considered, in addition to other matters set forth herein, in evaluating an investment in the 2016 Bonds. The 2016 Bonds are not being rated by any nationally recognized rating agency. Other Information Brief descriptions of the 2016 Bonds, the Bond Resolution, the security for the 2016 Bonds, the Special Tax, the County and the District are included in this Official Statement together with summaries of certain provisions of the 2016 Bonds, the Bond Resolution and certain other documents. Such descriptions do not purport to be comprehensive or definitive. All references herein to the Bond Resolution and other documents are qualified in their entirety by reference to such documents, and references herein to the 2016 Bonds are qualified in their entirety by reference to the form thereof included in the Bond Resolution, copies of which are available for inspection at the office of the Clerk of the Board of Supervisors. This information speaks only as of its date, and the information contained herein is subject to change. Unless otherwise defined elsewhere in this Official Statement, capitalized terms shall have the meanings assigned to them in the Bond Resolution. 4

11 THE 2016 BONDS Authority for Issuance The Mello Roos Community Facilities Act of 1982, as amended (Sections et seq. of the California Government Code) (the Act ), was enacted by the California Legislature to provide an alternate method of financing certain public capital facilities and services, especially in developing areas of the State of California (the State ). Subject to approval by a two-thirds vote of a district s qualified electors and compliance with the provisions of the Act, a legislative body of a local agency may issue bonds for a community facilities district to finance certain public improvements and may levy and collect a special tax within such district to repay such indebtedness. The legislative body is also authorized to issue bonds to refund such indebtedness, subject to compliance with the provisions of the Act. Pursuant to the Act, the Board of Supervisors adopted on December 13, 2005, Resolution No providing for the establishment of the District and calling an election to authorize the issuance of bonds and the levying of a special tax within the District and adopted Resolution No determining the necessity to incur bonded indebtedness within the District in an amount not to exceed $30,000,000. On January 19, 2006, at an all-mailed ballot election held pursuant to the Act, the then-sole owners of land within the District, who under the terms of the Act were the only qualified electors within the District, authorized the issuance of up to $30,000,000 principal amount of special tax bonds to finance certain public facilities to serve the property within the District and approved the maximum rate and method of apportionment of the Special Tax to pay the principal of and interest on such bonds. The rate and method of apportionment was subsequently amended at a May 29, 2007 mailed ballot election. See caption SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS The Special Tax herein. The 2016 Bonds are being issued pursuant to the Bond Resolution adopted by the Board of Supervisors of the County on August 7, 2007, as supplemented on April 26, Purpose of the 2016 Bonds The 2016 Bonds are being issued to provide funds to (i) refund the outstanding 2007 Bonds, (ii) pay costs of the acquisition and construction of certain public facilities required in connection with the development of land within the District, (iii) fund the Bond Reserve Fund in the amount of the Required Bond Reserve (each as defined herein), (iv) fund capitalized interest on a portion of the 2016 Bonds through approximately September 1, 2016, and (v) pay certain costs of issuing the 2016 Bonds. Description of the 2016 Bonds The 2016 Bonds will be issued as fully registered bonds without coupons in denominations of $5,000, or any integral multiple thereof (not exceeding the principal amount maturing at any one time), and shall be dated the date of their initial issuance (the Dated Date ). The 2016 Bonds will mature on September 1, in the principal amounts and years, and will bear interest at the rates, shown on the inside front cover of this Official Statement. Interest on the 2016 Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months and will be payable semiannually on March 1 and September 1 of each year, commencing September 1, 2016 (each an Interest Payment Date ). Each 2016 Bond will bear interest from the Interest Payment Date next preceding the date of registration thereof, unless (i) it is registered on a day during the period from the sixteenth day of the calendar month next preceding an Interest Payment Date to such Interest Payment Date (both dates inclusive), in which event it shall bear interest from such Interest Payment Date, or (ii) it is registered on a day on or before the fifteenth day of the month preceding the first Interest Payment Date, in which event it shall bear interest from its date; provided, that if at the time of registration of any 2016 Bond interest is then in default thereon, such 2016 Bond shall bear interest from the Interest Payment Date to which interest thereon has previously been paid or made available for payment. 5

12 Interest on the 2016 Bonds will be payable in lawful money of the United States only to the Holders thereof at the close of business as of the fifteenth day of the month next preceding each Interest Payment Date (the Record Date ), whether or not such day is a business day. Such interest shall be paid by check mailed on each such Interest Payment Date to such Holders at their addresses as they appear in the registration books required to be kept by the County s Director of Finance (sometimes referred to as the Paying Agent ), except that in the case of a Holder of $1,000,000 or more in aggregate principal amount of the 2016 Bonds then Outstanding, payment on any Interest Payment Date shall be made at such Holder s option by wire transfer of immediately available funds according to instructions provided by such owner to the Paying Agent not later than the applicable Record Date. Payment of the principal of a 2016 Bond will be made only to the person whose name appears as the registered owner thereof in the registration books to be kept by the Paying Agent and only on the surrender thereof at the office of the Paying Agent. See Book-Entry Only System herein. Limited Obligation The 2016 Bonds are not general obligations of the County but are limited obligations of the County payable solely from the proceeds of the Special Tax and certain funds and accounts as provided in the Bond Resolution. Neither the full faith and credit nor the general taxing power of the County, the State of California or any political subdivision thereof is pledged to the payment of the 2016 Bonds. See SPECIAL RISK FACTORS No Obligation to Pay Debt Service and CONCLUDING INFORMATION No General Obligation of the County or the District. Redemption Mandatory Sinking Fund Redemption. The Bond Resolution authorizes the provision of certain amounts (the Minimum Sinking Fund Account Payments ) for the mandatory redemption and payment of the 2016 Bonds that are Term Bonds. Minimum Sinking Fund Account Payments are to be deposited in the Sinking Fund Account in the Bond Redemption Fund to be used and withdrawn by the County at any time for the mandatory redemption or payment of the principal of the Term Bonds or for the purchase of Term Bonds at public or private sale as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Bond Redemption Fund) as it may in its discretion determine, but not to exceed the principal amount of such Term Bonds. The Term Bonds maturing on September 1, 2040 are subject to mandatory redemption in part on any September 1 on or after September 1, 2034, upon mailed notice as provided in the Bond Resolution, at the principal amount thereof called for redemption together with accrued interest thereon to the date of redemption, on September 1 of each year, beginning on September 1, 2034, in the following amounts: Year Ending September 1 Minimum Sinking Fund Account Payments Term Bonds Maturing September 1, 2040 Minimum Sinking Fund Account Payment 2034 $ 915, , ,060, ,135, , ,000, (Maturity) 1,080,000 The Term Bonds maturing on September 1, 2045 are subject to mandatory redemption in part on any September 1 on or after September 1, 2041, upon mailed notice as provided in the Bond Resolution, at the 6

13 principal amount thereof called for redemption together with accrued interest thereon to the date of redemption, on September 1 of each year, beginning on September 1, 2041, in the following amounts: Year Ending September 1 Minimum Sinking Fund Account Payments Term Bonds Maturing September 1, 2045 Minimum Sinking Fund Account Payment 2041 $ 1,160, ,250, ,345, ,440, (Maturity) 1,545,000 In the event of a partial redemption of any of the Term Bonds (other than as a result of the application of Minimum Sinking Fund Account Payments) the amounts of the Minimum Sinking Fund Account Payments shown in the foregoing table will be reduced proportionately by the principal amount of all such Term Bonds which are redeemed by such partial redemption. Optional Redemption. The 2016 Bonds maturing by their terms on or after September 1, 2027 are subject to optional redemption by the County prior to their respective stated maturity dates on any date on or after September 1, 2026, in whole or in part, from funds derived by the County from any source (including the proceeds of bonds issued in order to refund the 2016 Bonds) other than Minimum Sinking Fund Account Payments or prepayments of the Special Tax, upon notice mailed as provided in the Bond Resolution and described under Notice of Redemption below, at a redemption price equal to the principal amount of the 2016 Bonds or portions thereof called for redemption together with accrued interest thereon to the date fixed for redemption, without premium. Extraordinary Redemption from Prepayment of Special Tax. The 2016 Bonds are subject to extraordinary redemption by the County prior to their respective stated maturity dates on any Interest Payment Date, in whole or in part, from funds derived by the County solely from prepayments of the Special Tax, upon notice mailed as provided in the Bond Resolution and described under Notice of Redemption below, at the following redemption prices (computed upon the principal amount of the 2016 Bonds or portions thereof called for redemption) together with accrued interest thereon to the date of redemption: Redemption Date Redemption Price September 1, 2016 and any Interest Payment Date through March 1, % September 1, 2024 and March 1, September 1, 2025 and March 1, September 1, 2026 and any Interest Payment Date thereafter 100 The 2016 Bonds and any Parity Bonds subject to extraordinary redemption from prepayments of Special Taxes shall be redeemed pro rata (as nearly as possible given minimum authorized denominations) in proportion to the total principal amount Outstanding of each Series at the time of Redemption. Transfers of property ownership and certain other circumstances could result in prepayments of the Special Tax applicable to particular parcels. Such prepayments would result in redemption of the 2016 Bonds prior to their stated maturity, at the redemption prices corresponding to the redemption dates as shown above, and could cause a reduction of the amount on deposit in the Bond Reserve Fund. 7

14 Selection of 2016 Bonds for Redemption If less than all the Outstanding 2016 Bonds are to be redeemed at any one time, the County shall select the maturity date or dates of the 2016 Bonds to be redeemed, and if less than all the Outstanding 2016 Bonds of any maturity are to be redeemed at any one time, the Director of Finance shall select the 2016 Bonds or the portions thereof of such maturity date to be redeemed in integral multiples of five thousand dollars ($5,000) in any manner that the Director of Finance deems appropriate and fair; provided, that any such partial redemption will result in the least disturbance of the proportionality of Annual Debt Service on the Bonds in each Bond Year (except the last Bond Year after such redemption) unless the Paying Agent has first received a report from an Independent Financial Consultant to the effect that the proceeds of the Special Taxes that would be available to the County if the Special Taxes were to be levied and collected at their maximum rate and amount on all Parcels of Taxable Property in the District, based upon the Special Tax Formula as applied on the date of the proposed partial redemption, would be equal to at least one hundred ten percent (110%) of the Maximum Annual Debt Service on the Bonds (after giving effect to such partial redemption). Notice of Redemption The Paying Agent will mail a notice of redemption to the respective Holders of all 2016 Bonds selected for redemption in whole or in part not less than 30 days and not more than 60 days prior to the date of redemption. Any notice of optional or extraordinary redemption given with respect to the 2016 Bonds may be rescinded by written notice given to the Paying Agent by the County no later than five (5) Business Days prior to the date specified for redemption. The Paying Agent will give notice of such rescission as soon as practicable thereafter in the same manner, and to the same recipients, as notice of such redemption was given. With respect to any notice of optional or extraordinary redemption of 2016 Bonds, unless, upon the giving of such notice, the 2016 Bonds to be redeemed have been deemed to have been paid within the meaning of the Bond Resolution, the redemption notice shall state that the redemption will be conditional upon the receipt by the Paying Agent on or before the date fixed for redemption of amounts sufficient to pay the principal of, and premium, if any, and interest on, such 2016 Bonds to be redeemed, and that if those amounts have not been so received the notice will be of no force and effect and the County will not be required to redeem the 2016 Bonds specified in the redemption notice. If any such notice of redemption contains such a condition and such amounts are not so received, the redemption will not be made and the Paying Agent will within a reasonable time thereafter give notice to the Holders of the Series 2016 Bonds specified in the redemption notice to the effect that the amounts were not so received and the redemption was not made, the notice to be given by the Paying Agent in the manner in which the notice of redemption was given. The failure to redeem Series 2016 Bonds pursuant to the Bond Resolution due to the failure of a condition of redemption will not constitute an event of default under the Bond Resolution. Book-Entry Only System The 2016 Bonds are to be initially registered in the name of Cede & Co., as nominee of The Depository Trust Company of New York, New York ( DTC ). One fully registered 2016 Bond will be issued for each maturity of the 2016 Bonds in the aggregate principal amount of such maturity and will be deposited with DTC. So long as Cede & Co. is the registered owner of the 2016 Bonds, references herein to the Holders of the 2016 Bonds shall refer to Cede & Co. and shall not refer to the beneficial owners of such 2016 Bonds. The County does not give any assurance that DTC, its participants or others will distribute payments with respect to the 2016 Bonds or notices concerning the 2016 Bonds to the beneficial owners thereof or that DTC or its participants will otherwise serve and act in the manner described in this Official Statement. See Appendix D for a further description of DTC and its book-entry system. The information presented therein is based solely on information provided by DTC. 8

15 ESTIMATED SOURCES AND USES OF FUNDS The estimated sources and uses of funds in connection with the issuance of the 2016 Bonds are shown in the following table: Estimated Sources and Uses of Funds Estimated Sources of Funds Principal Amount $ 23,155, Plus: Net Original Issue Premium 2,425, Less: Underwriter s Discount (158,210.37) Funds Related to 2007 Bonds (1) 2,137, Total Sources of Funds $ 27,559, Estimated Uses of Funds Escrow Fund $ 15,071, Acquisition and Construction Fund 10,362, Bond Reserve Fund 1,679, Costs of Issuance Fund (2) 221, Capitalized Interest Account (3) 224, Total Uses of Funds $ 27,559, (1) (2) (3) Includes funds held under the bond redemption fund and bond reserve fund with respect to the 2007 Bonds. Includes financial advisor s fees, legal fees, Appraiser fees, Special Tax Consultant fees, printing costs, and other costs of issuance. Represents capitalized interest on a portion of the Bonds through approximately September 1, THE REFUNDING PLAN General The County issued the 2007 Bonds pursuant the Bond Resolution in the aggregate principal amount of $14,415,000, which 2007 Bonds are currently outstanding in the aggregate principal amount of $13,965,000. The County plans to apply a portion of the proceeds of the 2016 Bonds to refund the outstanding 2007 Bonds. To effect such refunding, the County will cause a portion of the proceeds of the 2016 Bonds, together with other funds to be deposited into the Escrow Fund (the Escrow Fund ) established under the Escrow Agreement dated as of May 1, 2016 (the Escrow Agreement ), by and between County and The Bank of New York Mellon Trust Company, N.A., as escrow agent (the Escrow Agent ). Such amounts will be held in cash or invested in direct non-callable obligations of the United States of America (the Defeasance Obligations ). Cash and certain Defeasance Obligations deposited in the Escrow Fund will be scheduled to mature in such amounts and at such times and bear interest at such rates as to provide amounts sufficient to pay all regularly scheduled payments of principal of and interest on the refunded 2007 Bonds through and including September 1, 2017 and to redeem on September 1, 2017, the refunded 2007 Bonds maturing on and after September 1, 2018 at a redemption price equal to the principal amount to be redeemed, without premium. All cash and Defeasance Obligations in the Escrow Fund will be irrevocably pledged to secure, when due, the payment of the principal, interest and premium due on the refunded 2007 Bonds and will not be available to pay the principal of and interest on the 2016 Bonds. The sufficiency of the cash and Defeasance Obligations to pay such amounts will be verified by Causey, Demgen & Moore, P.C., Denver, Colorado (the Verification Agent ). See the caption Verification of Mathematical Computations below. 9

16 Verification of Mathematical Computations Upon delivery of the 2016 Bonds, the Verification Agent, a firm of independent public accountants, will deliver a report on the mathematical accuracy of certain computations based upon certain information and assertions provided to them by the Underwriter relating to: (a) the adequacy of the maturing principal of and interest earned on the Defeasance Obligations, together with the cash to be concurrently deposited in the Escrow Fund, to pay all regularly scheduled payments of principal of and interest on the refunded 2007 Bonds through and including September 1, 2017 and to redeem on September 1, 2017, the refunded 2007 Bonds maturing on and after September 1, 2018 at a redemption price equal to the principal amount to be redeemed, without premium; and (b) the computations of yield of the Bonds and the Defeasance Obligations which support Bond Counsel s opinion that interest on the 2016 Bonds is excluded from gross income for federal income tax purposes. DEBT SERVICE SCHEDULE AND ESTIMATED COVERAGE The following is the debt service schedule and estimated coverage of annual debt service on the 2016 Bonds. The coverage amounts in the table below also assume no delinquencies in the payment of Special Taxes and that no 2016 Bonds are redeemed except from Minimum Sinking Fund Account payments. Based on development status as of March 1, 2016, Special Tax revenues from Taxable Parcels of Developed Property and Final Map Property are expected to produce coverage on the 2016 Bonds of not less than 110%. Pursuant to the Act, the Special Tax levied against any Taxable Parcel for which an occupancy permit for private residential use has been issued may not be increased as a consequence of delinquency or default by the owner of any other Taxable Parcel within the District by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. As a result, it is possible that the County may not be able to increase the tax levy to the Maximum Special Tax rate in all years. Investors should not assume actual coverage from Special Taxes in excess of 110% of debt service. See SPECIAL RISK FACTORS Levy of Special Tax. In addition, coverage could be reduced upon the issuance of Parity Bonds. See Parity Bonds below for a description of the conditions precedent to the issuance of Parity Bonds. 10

17 Debt Service Schedule and Estimated Coverage Bond Year (Ending September 1) Principal Interest Total Annual Debt Service (1) Maximum Special Tax Levy on Developed Property (2) Maximum Special Tax Levy on Developed Property and Final Map Property (2) Estimated Net Maximum Special Tax at Build-Out (2)(3) From Maximum Special Tax Levy on Developed Property Debt Service Coverage (4) From Maximum Special Tax Levy on Developed Property and Final Map Property From Estimated Net Maximum Special Tax at Build-Out 2016 $ 224,440 (1) $ 1,208,671 $ 1,131,292 $ 1,575,249 $ 1,665,426 94% 130% 138% 2017 $ 300, ,475 1,273,475 1,153,918 1,606,754 1,698, , ,475 1,292,475 1,176,997 1,638,890 1,732, , ,725 1,307,725 1,200,536 1,671,667 1,767, , ,725 1,325,725 1,224,547 1,705,101 1,802, , ,225 1,343,225 1,249,038 1,739,203 1,838, , ,225 1,360,225 1,274,019 1,773,987 1,875, , ,725 1,376,725 1,299,499 1,809,467 1,913, , ,225 1,399,225 1,325,489 1,845,656 1,951, , ,325 1,414,325 1,351,999 1,882,569 1,990, , ,625 1,437,625 1,379,039 1,920,220 2,030, , ,875 1,454,875 1,406,620 1,958,625 2,070, , ,675 1,478,675 1,434,752 1,997,797 2,112, , ,675 1,496,675 1,463,447 2,037,753 2,154, , ,700 1,517,700 1,492,716 2,078,508 2,197, , ,800 1,540,800 1,522,571 2,120,078 2,241, , ,550 1,562,550 1,553,022 2,162,480 2,286, , ,950 1,582,950 1,584,082 2,205,730 2,331, , ,000 1,607,000 1,615,764 2,249,844 2,378, , ,250 1,631,250 1,648,079 2,294,841 2,426, ,060, ,000 1,657,000 1,681,041 2,340,738 2,474, ,135, ,000 1,679,000 1,714,662 2,387,553 2,524, , ,250 1,412,250 1,748,955 2,435,304 2,574, ,000, ,000 1,441,000 1,783,934 2,484,010 2,626, ,080, ,000 1,471,000 1,819,613 2,533,690 2,678, ,160, ,000 1,497,000 1,856,005 2,584,364 2,732, ,250, ,000 1,529,000 1,893,125 2,636,051 2,786, ,345, ,500 1,561,500 1,930,988 2,688,772 2,842, ,440, ,250 1,589,250 1,969,607 2,742,548 2,899, ,545,000 77,250 1,622,250 2,008,999 2,797,398 2,957, Total $ 23,155,000 $ 19,931,915 $ 44,071,146 $ 45,894,357 $ 63,904,846 $ 67,563,139 (footnotes on next page) 11

18 (1) (2) (3) (4) Interest on a portion of the 2016 Bonds through approximately September 1, 2016 will be funded from capitalized interest. Includes debt service on the 2007 Bonds due in the Bond Year ending September 1, See ESTIMATED SOURCES AND USES OF FUNDS. Based on revenues from Maximum Special Tax levy, escalating at 2% per year, and development status as of March 1, Amounts reflect a reduction in each year of 15% of the Maximum Special Tax revenues at build-out of property in the Vineyard Creek portion of the District. Pursuant to the Act, the Special Tax levied against any Taxable Parcel for which an occupancy permit for private residential use has been issued may not be increased as a consequence of delinquency or default by the owner of any other Taxable Parcel within the District by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. As a result, it is possible that the County may not be able to increase the tax levy to the Maximum Special Tax rate in all years. See the caption SPECIAL RISK FACTORS Levy of the Special Tax. 12

19 SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS General The 2016 Bonds are limited obligations of the County and, except as otherwise provided in the Bond Resolution, the interest on and principal of the 2016 Bonds are payable solely from the Special Tax which is to be levied annually against the property in the District. Neither the full faith and credit nor the general taxing power of the County, the District, the State of California, or any political subdivision thereof is pledged to the payment of the 2016 Bonds. Although the Special Tax constitutes a lien on property subject to taxation in the District, it does not constitute a personal indebtedness of the owners of such property. There is no assurance that the owners will be financially able to pay the annual Special Tax or that they will pay such tax even if financially able to do so. The risk of nonpayment by property owners is more fully described in SPECIAL RISK FACTORS Collection of the Special Tax. The Special Tax In accordance with the provisions of the Act, the Board of Supervisors established the District on December 13, 2005 for the purpose of providing for the financing of certain public facilities in and for the District. At an all-mailed ballot election conducted on January 19, 2006, the landowner-electors within the District authorized both the issuance of up to $30,000,000 principal amount of special tax bonds for the purpose of financing such public facilities and the annual levy of the Special Tax to be used for the purpose, among others, of paying the interest on and principal of and redemption premiums, if any, on such bonds. On March 20, 2007, the Board of Supervisors adopted Resolution No declaring its intent to amend the special tax formula and to annex certain additional property (the Annexed Parcels ) to the District. Following a public hearing conducted on May 8, 2007, the Board of Supervisors adopted Resolution No calling an election for May 29, 2007 on the annexation of the Annexed Parcels to the District and the amendment to the special tax formula. On May 29, 2007 at an all-mailed ballot election held pursuant to the Act, El Dorado Corners, LLC, as the owner of the Annexed Parcels, approved the annexation of Annexed Parcels to the District, and the Developer, Standard Pacific Corp., North Vineyard Investors and El Dorado Corners, LLC as the sole owners of land within the District, who under the terms of the Act were the only qualified electors within the District, authorized the amendment to the special tax formula (as amended, the Special Tax Formula ). A copy of the Special Tax Formula is attached as Appendix B hereto. Pursuant to the Bond Resolution, so long as any Bonds are outstanding, the County is required to annually levy the Special Tax against Parcels of Taxable Property (as defined in the Special Tax Formula) in the District in accordance with the Special Tax Formula and make provision for the collection of the Special Tax in amounts which will be sufficient, together with the money then on deposit in the Bond Redemption Fund, after making allowance for contingencies and errors in the estimates, to yield proceeds equal to the amounts required for compliance with the agreements, conditions, covenants and terms contained in the Bond Resolution, and (i) to pay the interest on and the principal of and Minimum Sinking Fund Account Payments for and redemption premiums, if any, on the Bonds as they respectively become due and payable, (ii) to replenish the Bond Reserve Fund, and (iii) to pay all current Expenses as they become due and payable in accordance with the provisions of the Bond Resolution. The Special Tax Formula annually allocates the Special Tax required among the Parcels of Taxable Property based upon location, land uses and development status. The Special Tax Formula involves a number of separate steps to be performed by the County which are described in Appendix B and summarized below. For purposes of this section only, terms with initial capital letters not otherwise defined in this Official Statement shall have the meanings assigned to them in Appendix B. 13

20 Classification of Parcels Subject to Special Tax. On or about July 1 of each Fiscal Year, the Administrator shall identify the current Assessor s Parcel numbers for all Parcels of Taxable Property. The Administrator shall also determine: (i) whether each Assessor s Parcel of Taxable Property is Developed Property, Final Map Property, Large Lot Subdivision Map Property, Vineyard Creek Tentative Map Property, Vineyard Point Tentative Map Property or Annexation Property, (ii) for Developed Property, which Parcels are Single Family Detached Property, Single Family Attached Property, Multifamily Property and Other Property, (iii) for Parcels of Single Family Attached Property, the number of Residential Units on each Parcel, (iv) the Specific Plan Land Use Designation for each Parcel, and (v) the Special Tax Requirement. For Single Family Attached Property, the number of Residential Units shall be determined by referencing the site plan, condominium plan, or other development plan. In any Fiscal Year, if it is determined that: (i) a parcel map for property in the District was recorded after January 1 of the prior Fiscal Year (or any other date after which the Assessor will not incorporate the newly-created Parcels into the then current tax roll), (ii) because of the date the parcel map was recorded, the Assessor does not yet recognize the new Parcels created by the parcel map, and (iii) one or more of the newly-created parcels is in a different Development Class than other parcels created by the subdivision, the Administrator shall calculate the Special Tax for the property affected by recordation of the parcel map by determining the Special Tax that applies separately to the property within each Development Class, then applying the sum of the individual Special Taxes to the Parcel that was subdivided by recordation of the parcel map. For purposes of making the classification described above, Developed Property means all Parcels for which building permits have been issued on or prior to June 1 of the preceding Fiscal Year. Final Map Property means in any Fiscal Year, all Single Family Detached Property for which a Final Map had been recorded prior to June 1 of the preceding Fiscal Year and which had not yet become Developed Property. Large Lot Subdivision Map Property means, in any Fiscal Year, all Single Family Detached Property included within a Large Lot Subdivision Map that was recorded by June 1 of the prior Fiscal Year, and which has not yet become Final Map Property. Vineyard Creek Tentative Map means the vesting tentative map for the Vineyard Creek project approved by the Board of Supervisors on November 10, Vineyard Point Tentative Map means the vesting tentative map for the Vineyard Point project approved by the Board of Supervisors on November 10, Additionally, the Special Tax Formula exempts up to acres of Public Property from the levy of the Special Tax and acres identified as Parcel 3 on Attachment 1 to the Special Tax Formula (the Exempt Parcel ). The table below shows the maximum Special Tax capacity for Fiscal Year based on development status as of March 1,

21 (1) (2) (3) (4) Table 1 County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Estimated Fiscal Year Maximum Special Tax Revenue Based on Land Uses at Build-Out (Development Status as of March 1, 2016) Estimated Fiscal Year Special Tax Category (1) Fiscal Year Maximum Special Tax Rate Planned Units/Acres Maximum Special Tax Revenue at Build-Out (3) Vineyard Point Developed Property SFR 3-5 $ 1, units $ 496,105 SFR 4-7 1, units 383,892 MDR , units 209,074 Clubhouse 11, acres 4,607 Total Vineyard Point 709 units $ 1,093,678 Vineyard Creek Developed Property Existing Farmhouse (2) MDR 7-12 $ 1,181 1 unit $ 1,181 Unit 1 SFR 4-7 1, units 59,060 Total $ 60,242 Final Map Property (3) Unit 1 SFR 4-7 $1, units $ 102,579 Unit 4 SFR 3-5 1, units 203,664 Clubhouse Other Property 11, acres 21,262 Unit 5 SFR 3-5 1, units 125,332 Total $ 452,836 Large Lot Map Property (4) Unit 6 SFR 3-5 1, units 156,665 Multi-Family Parcel MFR , acres 42,088 Total $ 198,753 Total Vineyard Creek 384 units $ 711,831 Total 1,093 units $1,805,508 Pursuant to the Special Tax Formula, Developed Property includes Taxable Property for which a building permit was issued as of June 1 of the prior Fiscal Year. Final Map Property is Single Family Detached Property for which a Final Map had recorded prior to June 1 of the preceding Fiscal Year and which has not yet become Developed Property. Parcel is entitled for medium density, however, such parcel is currently occupied and used as an existing farmhouse and is not owned by Lennar. The County is not aware of any plans to develop such parcel. However, the County can make no assurances that this property will not be subdivided and developed in the future. See Attachment 1 to the Rate and Method attached hereto as Appendix B for the location of the existing farmhouse which is located on the Remainder A Parcel. Development status is as of March 1, 2016 except that the final maps recorded for Units 4 and 5 in April 2016 are reflected. Excludes the Remainder B parcel owned by Douglas B/Anne R Bayless Revocable Living Trust, which is subject to the Special Tax levy but has no planned development at build-out and was not appraised. Source: Goodwin Consulting Group, Inc. Method of Apportionment of the Annual Special Tax. The Special Tax is to be levied each Fiscal Year in accordance with the following procedures until the amount of the levy equals the Special Tax 15

22 Requirement for that Fiscal Year. The Special Tax Requirement is the amount necessary in any Fiscal Year to: (i) pay principal and interest on Bonds that is due in the calendar year that begins in such Fiscal Year; (ii) create and/or replenish reserve funds for the Bonds; (iii) cure any delinquencies in the payment of principal or interest on Bonds which have occurred in the prior Fiscal Year or, based on existing delinquencies in the payment of Special Taxes, are expected to occur in the Fiscal Year in which the tax will be collected; (iv) pay Administrative Expenses; and (v) pay the costs of public improvements and public infrastructure authorized to be financed by the District. The amounts referred to in clauses (i) and (ii) of the preceding sentence may be reduced in any Fiscal Year by: (i) interest earnings on or surplus balances in funds and accounts for the Bonds to the extent that such earnings or balances are available to apply against debt service pursuant to a Bond Resolution or other legal document that sets forth these terms; (ii) proceeds received by the District from the collection of penalties associated with delinquent Special Taxes; and (iii) any other revenues available to pay debt service on the Bonds as determined by the Administrator. The Administrator shall determine the Special Tax Requirement to be collected each Fiscal Year, and the Special Tax shall be levied according to the steps outlined below. Upon the issuance of the 2016 Bonds, both Vineyard Point Bonds and Vineyard Creek Bonds (as such terms are defined in the Special Tax Formula) will have been issued. In accordance with the Special Tax Formula, the method under Alternative 3 will be as described below will be used to determine the Special Tax levy. Step 1: Step 2: Step 3: Step 4: Step 5: The Special Tax shall be levied proportionately on each Parcel of Developed Property within the District up to 100% of the Maximum Special Tax for each Parcel for such Fiscal Year until the amount levied on Developed Property is equal to the Special Tax Requirement prior to applying any Capitalized Interest that is available in the District accounts. If additional revenue is needed after Step 1, and after applying Capitalized Interest to the Special Tax Requirement, the Special Tax shall be levied proportionately on each Assessor s Parcel of Final Map Property within the District, up to 100% of the Maximum Special Tax for Final Map Property for such Fiscal Year. If additional revenue is needed after applying the first two steps, the Special Tax shall be levied proportionately on each Parcel of Large Lot Subdivision Map Property within the District, up to 100% of the Maximum Special Tax for Large Lot Subdivision Map Property for such Fiscal Year. If additional revenue is needed after applying the first three steps, the Special Tax shall be levied proportionately on each Parcel of Vineyard Creek Tentative Map Property, Vineyard Point Tentative Map Property, and Annexation Property, up to 100% of the Maximum Special Tax for such property for such Fiscal Year. If additional revenue is needed after applying the first four steps, the Special Tax shall be levied proportionately on each Assessor s Parcel of Excess Public Property, up to 100% of the Maximum Special Tax for Vineyard Creek Tentative Map Property and Vineyard Point Tentative Map Property for such Fiscal Year. Prepayment of Special Tax. The Special Tax obligation applicable to an Assessor s Parcel in the District may be prepaid and the obligation of the Assessor s Parcel to pay the Special Tax permanently satisfied as described in APPENDIX B AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX, provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor s Parcel at the time of prepayment. Any prepayment of the Special Tax will result in an extraordinary redemption of Bonds. See THE 2016 BONDS Redemption Extraordinary Redemption from Prepayment of Special Tax. Limitations. In general, the Special Tax shall be levied and collected until principal and interest on Bonds have been repaid, costs of constructing or acquiring authorized facilities from Special Tax proceeds 16

23 have been paid, and all Administrative Expenses have been reimbursed. However, in no event shall a Special Tax be levied after Fiscal Year Pursuant to the Act, under no circumstances will the Special Tax levied in any Fiscal Year against any Taxable Parcel for which an occupancy permit for private residential use has been issued within the District be increased by more than 10% as a consequence of a delinquency or default by the owner of any other parcel within the District above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults. Interpretation. The County reserves the right to make minor administrative and technical changes to the Special Tax Formula that do not materially affect the rate and method of apportioning Special Taxes. In addition, the County may, in its discretion, interpret and apply the Special Tax Formula. Special Tax Analysis The Special Tax is exempt from the tax rate limitation of California Constitution Article XIIIA pursuant to Section 4 thereof as a special tax authorized by a two-thirds vote of the qualified electors as set forth in the Act. Consequently, the County has the power and is obligated to cause the levy and collection of the Special Tax in an amount determined according to the Special Tax Formula. The Act prohibits the Board of Supervisors from adopting a resolution to reduce the rate of the Special Tax or terminate the levy of the Special Tax unless the Board of Supervisors determines that the reduction or termination of the Special Tax would not interfere with the timely retirement of the outstanding Bonds. California Constitution Article XIIIC, which removed certain limitations on the initiative power, provides that the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. Although the matter is not free from doubt, it is likely that the exercise by the voters of the initiative power referred to in Article XIIIC to reduce the Special Tax is subject to the same restrictions as are applicable to the Board of Supervisors pursuant to the Act. See SPECIAL RISK FACTORS Proposition 218. Although the Special Tax constitutes a lien on property subject to taxation within the District, it does not constitute a personal indebtedness of the current owners of such property or of their successors. There is no assurance that the owners will be financially able to pay the annual Special Tax or that they will pay such tax even if financially able to do so. Subject to the covenant by the County to pursue accelerated foreclosure proceedings under certain circumstances as described under Delinquent Payments of Special Tax; Covenant for Foreclosure below, the Special Tax is expected to be collected in the same manner and at the same time as ad valorem property taxes are collected; and it will be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem property taxes. See SPECIAL RISK FACTORS Collection of the Special Tax. Pursuant to Section of the Act, properties or entities of federal, state or local governments are exempt from the Special Tax except that, under Section of the Act, property not otherwise exempt which is acquired by a public entity through a negotiated transaction, or by gift or demise, remains subject to the Special Tax. (Notwithstanding the foregoing statutory exceptions, property owned by the federal government may be exempt from the Special Tax regardless of the manner in which it was acquired.) It is not clear under the Act whether property acquired by a public entity following a tax sale or foreclosure based upon failure of a non-exempt person or entity to pay property taxes would remain subject to the Special Tax under Section of the Act or would become exempt from the Special Tax under Section of the Act. Pursuant to Section of the Act, if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special annual assessment. For this purpose, the present value of the obligation to pay the Special Tax to pay principal and interest on any Bonds Outstanding prior to the date of apportionment is to be treated the same as a fixed lien special annual assessment. The Act further provides that no other properties or entities are exempt from the Special Tax unless the properties or entities are expressly exempted in a resolution of consideration to levy a new tax under the Act or to alter the rate or method of apportionment of an existing tax under the Act. See SPECIAL RISK FACTORS Exempt Properties. 17

24 Neither the faith and credit nor the general taxing authority of the County, the State or any political subdivision of any of the foregoing is pledged to the payment of the 2016 Bonds. The County is to establish tax rates, within the limits of the Maximum Annual Special Tax for each Parcel of Taxable Property set forth in the Special Tax Formula, to be used to levy and apportion the Special Tax against Parcels of Taxable Property within the District on an annual basis. The actual amount of the Special Tax that could be levied and collected against property within the District during any future Fiscal Year will depend upon a number of factors, including without limitation the land use categories then in effect in the District, the tax rates imposed pursuant to the Special Tax Formula (subject to the Maximum Annual Special Tax rates) and the level of delinquent Special Tax installments. See SPECIAL RISK FACTORS Collection of the Special Tax. Annual Debt Service for the Bonds has been structured so that, based on development status within the District as of March 1, 2016 and assuming no delinquencies, Special Taxes levied on Developed Property and Final Map Property, will generate in each Fiscal Year not less than 110% of debt service payable with respect to the Bonds in each Bond Year. Pursuant to the Special Tax Formula, the Special Taxes are apportioned first to Developed Property, then to Parcels of Final Map Property, then to Parcels of Large Lot Subdivision Map Property, then to Parcels of Vineyard Creek Tentative Map Property, Vineyard Point Tentative Map Property and Annexation Property, and finally to Excess Public Property, to the extent necessary to meet the Special Tax Requirement. Pursuant to the Act, the Special Tax levied against any Taxable Parcel for which an occupancy permit for private residential use has been issued may not be increased as a consequence of delinquency or default by the owner of any other Taxable Parcel within the District by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. Investors should not assume actual coverage from Special Taxes in excess of 110% of debt service. The actual amount of the Special Tax that could be levied and collected against Parcels of Taxable Property during any future year will depend upon a number of factors, including without limitation the land use categories then in effect in the District, the tax rates imposed pursuant to the Special Tax Formula (subject to the Maximum Annual Special Tax rates) and the level of delinquent Special Tax installments. See SPECIAL RISK FACTORS Collection of the Special Tax herein. Additionally, pursuant to the terms of the Bond Resolution, the County may issue Parity Bonds pursuant to certain conditions precedent. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS Parity Bonds herein. In addition to payment of the Special Tax, the property within the District will also be obligated to pay ad valorem property taxes levied against such property and special assessments and special taxes levied to pay certain existing and any additional overlapping debt for which the property within the District is or may become obligated. See Direct And Overlapping Bonded Indebtedness herein. The actual amount of those taxes and assessments which may be levied or assessed in the future will vary depending upon a number of factors, including without limitation the assessed valuation of the property within the District at such time, the actual amount of the Special Tax that is levied annually in the future against such property and the existence of additional bonded and overlapping debt in the future. Special taxes and special assessments may also be levied to pay for the costs of certain services and/or to maintain certain public improvements. Proceeds of the Special Tax The County has covenanted in the Bond Resolution that all proceeds of the Special Tax, when and as received, will be immediately deposited in the County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Special Tax Fund, established in the treasury of the County (the Special Tax Fund ). All money in the Special Tax Fund is to be held by the County in trust under the Bond Resolution and is to be disbursed, allocated and applied solely to the uses and purposes set forth in the Bond 18

25 Resolution. See APPENDIX G SUMMARY OF CERTAIN PROVISIONS OF THE BOND RESOLUTION Deposit of Special Taxes in the Special Tax Fund. Letter of Credit Agreement The County and the Developer have entered into a Letter of Credit Agreement (the Letter of Credit Agreement ) pursuant to which the Developer is required to post a letter of credit with the County in an amount initially equal to 102% of the annual maximum Special Tax (without regard to capitalized interest) allocable to all Parcels of Taxable Property owned by the Developer at the time of commencement of the letter of credit (approximately $650,626 at issuance). Such letter of credit may be drawn upon by the County in the event that the Developer is delinquent in the payment of Special Taxes or if the Developer does not renew the then current letter of credit or provide a substitute letter of credit on or before the date specified in the Letter of Credit Agreement. Such letter of credit must be renewed or a substitute letter of credit provided not less than 30 days prior to its stated expiration date which is initially December 31, The stated amount of the letter of credit may be reduced or the letter of credit may be terminated upon the sale or transfer of the Parcels of Taxable Property owned by the Developer or its affiliates, in accordance with the Letter of Credit Agreement. In any event, the letter of credit requirement shall terminate when all legal lots that are owned by the Developer or its affiliates are collectively responsible for less than 10% of the total annual Special Taxes to be levied on all property in the District. The Letter of Credit Agreement requires that the letter of credit bank be: (a) rated A or better by Moody s or Standard & Poor s and have a Fitch Viability Rating of a or better; or (b) a subsidiary of a parent organization rated A or better by Moody s or Standard & Poor s, with parent s confirmation, and with a Fitch Viability Rating of a or better; or (c) on a case-by-case basis as determined by the County Director of Finance, rated below investment grade or not rated by Moody s or Standard & Poor s but meets the following test: (1) assets of at least $1 billion, (2) capital and surplus of at least $100 million, and (3) collateral of 110% of liability exposure to be held by a trustee (collateral to be those types of government securities used for bond defeasance) and to be marked-to-market weekly. The County may amend or waive the requirements of the Letter of Credit Agreement at any time without the consent of the Bond Owners. Under the Letter of Credit Agreement, the County Director of Finance is authorized to draw upon the letter of credit in an amount equal to the aggregate amount of Special Taxes applicable to Parcels of Taxable Property owned by the Developer or any affiliate thereof that are delinquent. The proceeds of any such draw will be deposited into the Special Tax Fund but they will not be deemed to have cured the Special Tax delinquencies. To the extent the letter of credit is drawn upon as a result of such delinquent Special Taxes, net proceeds, if any, of delinquent Special Taxes recovered by the County will be used to reimburse the issuer of the letter of credit for the amount of the draw as described in the Letter of Credit Agreement and the Bond Resolution. The Letter of Credit Agreement also permits the County Director of Finance to draw on the letter of credit in the full stated amount thereof in the event that the Developer fails to renew it or to provide a substitute letter of credit prior to the date specified in the Letter of Credit Agreement (initially December 31, 2016). The proceeds of any such drawing are to be deposited into the Letter of Credit Fund maintained by the County under the Bond Resolution. Money on deposit in the Letter of Credit Fund is to be withdrawn therefrom and transferred to the Special Tax Fund in the event and to the extent that the Developer or any affiliate thereof becomes delinquent in the payment of Special Taxes. Letter of Credit Bank The information under this heading has been obtained from publicly available information. The County has not independently verified such information, cannot assure that it is accurate and complete and makes no representation as to its accuracy and completeness. The Developer may substitute a letter of credit from a different qualified letter of credit bank in accordance with the Letter of Credit Agreement. 19

26 Accordingly, neither the County nor the Underwriter make any assurance that Citibank (defined below) will remain the letter of credit bank for the Developer beyond the stated expiration date of Citibank s Letter of Credit. The Developer expects to satisfy the requirement described above by delivering a letter of credit issued by Citibank, N.A. ( Citibank ). Citibank is an indirect wholly owned subsidiary of Citigroup Inc. ( Citigroup ), a Delaware holding company. Citibank is a commercial bank that, along with its subsidiaries and affiliates, offers a wide range of banking and trust services to its customers throughout the United States and the world. As a national bank, Citibank is primarily regulated by the Office of the Comptroller of the Currency (the Comptroller ), which also examines Citibank s loan portfolios and reviews the sufficiency of its allowance for credit losses. For further information regarding Citibank, reference is made to the annual report on Form 10-K of Citigroup and its subsidiaries for the year ended December 31, 2015, filed by Citigroup with the Securities and Exchange Commission (the SEC ). Copies of Citigroup s annual reports and other filings may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C at prescribed rates. Such files can also be accessed over the internet at the SEC s website at In addition, Citibank submits quarterly reports to the Comptroller called Consolidated Reports of Condition and Income for a Bank With Domestic and Foreign Offices ( Call Reports ). The Call Reports are on file with, and publicly available on the website of the Federal Deposit Insurance Corporation ( The foregoing internet addresses are included for reference only and the information on such internet sites are not a part of this Official Statement and are not incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on such internet sites. The information contained in this section relates to and has been obtained from publicly available information, and is furnished solely to provide limited introductory information regarding Citibank and does not purport to be comprehensive. Any financial information provided in this section is qualified in its entirety by the detailed information appearing in the annual reports, Call Reports and other filings referenced above. The delivery hereof shall not create any implication that there has been no change in the affairs of the Citibank since the date hereof. Bond Reserve Fund In order to further secure the payment of interest on and principal of the Bonds, the County is required to deposit in the Bond Reserve Fund and thereafter maintain therein an amount equal to the Required Bond Reserve which means, as of any date of calculation, the least of (a) ten percent (10%) of the principal amount of the Outstanding Bonds, or (b) the Maximum Annual Debt Service, or (c) one hundred twenty-five percent (125%) of the average Annual Debt Service payable hereunder in the current and in all future Bond Years, as determined by the County and specified in writing to the Director of Finance; provided, that the amount of the Required Bond Reserve shall not increase at any time, except upon the issuance of a new Series of Bonds; and provided further, that, with respect to the issuance of any issue of Bonds, if the amount on deposit in the Bond Reserve Fund would have to be increased by an amount greater than ten percent (10%) of the stated principal amount of such issue of Bonds (or, if the issue has more than a de minimis amount of original issue discount or premium, of the issue price of such issue of Bonds) then the Required Bond Reserve shall be such lesser amount as is determined by a deposit of such 10% (the Required Bond Reserve ). Subject to the limits on the maximum annual Special Tax which may be levied within the District as described in Appendix B, the County has covenanted to levy Special Taxes in an amount that is anticipated to be sufficient in light of other intended uses of the Special Tax proceeds to maintain the balance in the Bond Reserve Fund at the Required Bond Reserve. 20

27 All money in the Bond Reserve Fund will be used and withdrawn by the County solely for the purpose of (i) paying the interest on or principal or redemption premiums, if any, on the Bonds in the event there is insufficient money in the Bond Redemption Fund available for this purpose, or (ii) retiring Bonds, in whole or in part, to the extent that the amount on deposit in the Bond Reserve Fund exceeds the Required Bond Reserve due to a redemption of Bonds or a prepayment of Special Taxes; provided that, if as a result of a valuation of the investments held in the Bond Reserve Fund it is determined that the amount of money in the Bond Reserve Fund exceeds the Required Bond Reserve, the Director of Finance is required to withdraw the amount of such excess from the Bond Reserve Fund and deposit the same in the Special Tax Fund. Covenant for Foreclosure The Bond Resolution provides that the Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described below and in the Act, are subject to the same penalties and the same collection procedure, sale, and lien priority in case of delinquency as is provided for ad valorem property taxes. Pursuant to Section of the Act, in the event of any delinquency in the payment of the Special Tax, the County may order the institution of a superior court action to foreclose the lien therefor within specified time limits. In such an action, the real property subject to the unpaid Special Tax may be sold at a judicial foreclosure sale. Such judicial foreclosure action is not mandatory. However, the County has covenanted for the benefit of the Holders of the 2016 Bonds that the County will, not later than October 15 of each year, review its public records relating to the collection of the Special Taxes in the District during the prior Fiscal Year in order to determine the amount of the Special Taxes collected and the amount thereof delinquent in the District in such prior Fiscal Year, and on the basis of such review the County will thereupon institute foreclosure proceedings as authorized by the Act in order to enforce the lien of each then delinquent installment of the Special Taxes in such prior Fiscal Year and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale; provided, that if the total amount of such delinquencies is less than five percent (5%) of the total amount of Special Taxes levied in the District in such Fiscal Year and the Bond Reserve Fund is then fully funded in the amount of the Required Bond Reserve, the County shall not be required to institute any foreclosure proceedings against any Parcel of Taxable Property with a delinquency for such Fiscal Year of less than two thousand dollars ($2,000) or against any Parcels of Taxable Property owned by a common owner with total delinquencies for such Fiscal Year of less than five thousand dollars ($5,000); and provided further, that the County shall not be obligated to enforce the lien of any delinquent installment of the Special Tax in the District for any Fiscal Year in which the County shall have received one hundred percent (100%) of the amount of such installment from the Teeter Plan. See Teeter Plan below. In the event that sales or foreclosures of property are necessary, there could be a delay in payments to Holders of the 2016 Bonds pending such sales or the prosecution of such foreclosure proceedings and receipt by the County of the proceeds of sale. However, the County may adjust the Special Tax levied in the next fiscal year, subject to the limitation on the maximum Special Tax, to provide an amount required to pay interest on and principal of the 2016 Bonds, and the amount, if any, necessary to pay all current Expenses. There is, however, no assurance that the total amount of the Special Tax that could be levied and collected in the District will be at all times sufficient to pay the amounts required to be paid by the Bond Resolution, even if the Special Tax is levied at the maximum special tax rates. See SPECIAL RISK FACTORS Maximum Special Tax. No assurance can be given that the real property subject to sale or foreclosure will be sold, or if sold, that the proceeds of sale will be sufficient to pay any delinquent installments of the Special Tax. The Act does not require the County to purchase or otherwise acquire any lot or parcel of property to be sold if there is no other purchaser at such sale. The Act and the Bond Resolution do specify that the Special Tax will have the same lien priority as for ad valorem property taxes in the case of delinquency. Section of the Act requires that property sold pursuant to foreclosure under the Act be sold for not less than the amount of 21

28 judgment in the foreclosure action, plus post judgment interest and authorized costs, unless the consent of the owners of 75% of the Outstanding Bonds is obtained. After the County has ordered a foreclosure action, it shall dismiss the action before judgment if the owner of the subject property (or any other person) pays all of the following amounts: the delinquent Special Tax and all penalties, interests and costs accrued; costs of the foreclosure action; authorized attorneys fees; the County s administrative expenses in connection with the foreclosure action; and the tax collector s authorized costs. Teeter Plan In June 1993, the Board of Supervisors of the County approved the implementation of the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the Teeter Plan ), as provided for in Section 4701 et seq. of the California Revenue and Taxation Code. Under the Teeter Plan, the County apportions secured property taxes on an accrual basis (irrespective of actual collections) to local political subdivisions for which the County acts as the tax-levying or taxcollecting agency. The County s Teeter plan has been in effect since Fiscal Year , and, under the Teeter Plan, the County purchased all delinquent receivables (comprising delinquent taxes, penalties, and interest) that had accrued as of June 30, 1993, from local taxing entities and selected special assessment districts and community facilities districts, including the District. Under the Teeter Plan, the County distributes tax collections on a cash basis to taxing entities during the fiscal year and at year-end distributes 100% of any taxes delinquent as of June 30th to the taxing entities and those special assessment districts and community facilities districts (and individual parcels within each district) that the County determines are eligible to participate in the Teeter Plan. The County may make eligibility determinations on an annual basis and may exclude a district or individual parcel that had previously been included in the plan. The District is included in the County s Teeter Plan. The County has the discretion to determine which delinquent assessments will be paid through the Teeter Plan on a case-by-case basis. See SPECIAL RISK FACTORS Teeter Plan Termination. 22

29 Delinquency History The following table is a summary of Special Tax levies, collections and delinquency rates in the District for Fiscal Year through the first installment for Fiscal Year The District is currently included in the County s Teeter Plan and, as a result, pays 100% of the Special Tax levy, without regard to the actual amount of collections. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS Teeter Plan and SPECIAL RISK FACTORS Teeter Plan Termination. Fiscal Year Source: The County. Amount Levied Table 2 County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Special Tax Levies, Delinquencies and Delinquency Rates Fiscal Years Through Parcels Delinquent Delinquencies as of June 30 of Fiscal Year in which Special Taxes Were Levied Delinquencies as of May 12, 2016 Amount Delinquent Percent Delinquent Parcels Delinquent Amount Delinquent Percent Delinquent $ 945,635 0 $ % 0 $ % , , ,003, ,010, , ,031, ,051, , , ,359,849 N/A N/A N/A 11 11,

30 Property Values and the Appraisal The extent to which the Special Tax provides security for the 2016 Bonds is, at least in part, a function of the value of each parcel of land within the District that is subject to the Special Tax because, in the event that a property owner defaults in the payment of the applicable Special Tax, such property owner will not have any personal liability for the payment of the Special Tax, and the principal remedy available to the County will be to take foreclosure proceedings with respect to the subject property. Assessed Value. The assessed value of the property within the District represents the secured assessed valuation established by the County Assessor. Assessed values do not necessarily represent market values. Article XIIIA of the California Constitution (Proposition 13) defines full cash value to mean the County assessor s valuation of real property as shown on the 1975/76 roll under full cash value, or, thereafter, the appraised value of real property when purchased or newly constructed or when a change in ownership has occurred after the 1975 assessment, subject to exemptions in certain circumstances of property transfer or reconstruction. The full cash value is subject to annual adjustment to reflect increases, not to exceed 2% for any year, or decreases in the consumer price index or comparable local data, or to reflect reductions in property value caused by damage, destruction or other factors. Because of the general limitation to 2% per year in increases in full cash value of properties which remain in the same ownership, the County tax roll does not reflect values uniformly proportional to actual market values. There can be no assurance that the assessed valuations of the properties within the District accurately reflect their respective market values, and the future fair market values of those properties may be lower than their current assessed valuations. The table below sets forth historic secured assessed values of the parcels of Taxable Property within the District from Fiscal Years through Fiscal Year Land Assessed Value (1) Table 3 County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Historic Assessed Values in the District Improvement Assessed Value (1) Total Property Assessed Value (1) Change in Property Assessed Value Parcels of Developed Property (1) $60,362,925 $ 51,688 $ 60,414,613 N/A ,464,279 51,688 61,515, % ,778,581 52,721 12,831,302 (79.1) (2) ,001,934 52,595 21,054, ,147,382 7,556,262 28,703, ,454,267 18,687,145 40,141, ,861,473 44,435,459 69,296, ,342, ,705, ,047, ,035, ,490, ,526, (1) As of January 1 of each year as shown on the County Assessor s Rolls. Total Assessed Value is calculated as the sum of Land Assessed Value and Improvement Assessed Value. (2) In addition to economic deterioration, decrease a result of reassessment by the County after foreclosure by the Developer on property previously owned by Standard Pacific Corp. Sources: The County. Appraised Value. The Appraisal, a copy of which is attached as Appendix A to this Official Statement, sets forth the Appraiser s opinion as to the market value of the Appraised Property as of the Date of Value, subject to certain assumptions and limiting conditions. The value reported in the Appraisal is the value of the Appraised Property. The Appraised Property does not include the balance of the Taxable Property within the District which has been assigned assessed values by the County as of January 1, The 24

31 respective values of each individual parcel will vary depending on factors such as the size, shape and permitted land use of the parcel and the costs associated with its development. The Appraised Property includes (i) 145 completed or partially completed single family homes without an assessed value as of January 1, 2015, and (ii) 291 lots in either a mass graded or raw land condition (development activity has progressed since the Date of Value). See THE DISTRICT and THE DEVELOPMENT PLAN below. For the 145 completed or partially completed single family homes without an assessed value as of January 1, 2015, the Appraiser used the sales comparison approach to estimate the market values for such homes. The appraised value for the 291 lots in either a mass graded or raw land condition is based upon a subdivision development method which includes aspects of the cost, sales comparison and income approaches to determine the value. As a component of the subdivision development method, the Appraiser applied the sales comparison approach, and residual analyses were used to estimate the value for the various typical sized lot configuration within the District. All direct and indirect costs (exclusive of the costs of fee credits in the amount of $16,505,430 for the infrastructure that is expected to be acquired from the Developer with 2016 Bond proceeds) and entrepreneurial profit were then deducted from the gross sales proceeds, and the resultant net proceeds were then discounted to present value at a market-derived rate over the development absorption period to indicate the market value of the Parcels of Taxable Property included in the Appraisal. The Appraiser relied upon estimates provided by the Developer to determine the amount of development costs and concluded that such estimates were reasonable. The balance of the Taxable Property in the District consists of 657 completed single family homes owned by individual homeowners and the existing farmhouse located on the Remainder A Parcel within the District and the Appraiser used the Fiscal Year assessed values assigned by the County for such property. Based on the assumptions set forth in the Appraisal, and subject to the limiting conditions described therein, the Appraiser is of the opinion that the market value of the Appraised Property was $53,610,000 (represents a rounded total of the individually appraised parcels) as of the Date of Value. Additionally, in the Update Appraisal Report, the Appraiser confirmed that as of April 26, 2016 its opinion of the market value of Appraised Property was not less than it was as of the Date of Value based on the assumptions and limiting conditions described in the Update Appraisal Report. Combined with the Fiscal Year assessed value of the 657 homes within the District owned by individual homeowners as of January 1, 2016 ($178,281,801), the Appraiser is of the opinion that the Composite Value of the Taxable Property within the District, including those parcels with assessed value, as of the Date of Value, was not less than $231,891,801. The following table summarizes the components of the Composite Value: Appraised Property Value 145 completed or partially completed single family homes $ 20,010, lots in either a mass graded or raw land condition 33,600,000 Total Appraised Value $ 53,610,000 Assessed Property 657 completed homes as of January 1, 2015 $ 178,281,801 Total Composite Value $ 231,891,801 Source: The Appraiser; the County. The Appraisal merely indicates the Appraiser s opinion as to the market value of the Appraised Property as of the date and under the conditions and subject to the limitations set forth in the Appraisal and the Update Appraisal Report. See APPENDIX A APPRAISAL REPORT and APPENDIX A-1 UPDATE APPRAISAL REPORT for a complete list of the assumptions and limiting conditions applicable to the Appraisal, including the costs projected to be incurred in connection with the development of the Parcels of Taxable Property as well as the costs to hold and market the Parcels of Taxable Property, and the discount rate 25

32 applied to projected future revenues. If any of the Appraiser s assumptions are not realized, the value of the Parcels of Taxable Property may be less than estimated in the Appraisal. The Appraiser s opinion reflects conditions prevailing in the applicable market as of the Date of Value. The Appraiser s opinion does not predict the future value of the Parcels of Taxable Property, and there can be no assurance that market conditions will not change adversely in the future. The following table shows the value to lien ratios of the Parcels of Taxable Property based on ownership and development status as of March 1, 2016 and the Composite Value. Such value to lien ratios do not include the direct and overlapping tax and assessment debt set forth in Table 6 below. If such direct and overlapping tax and assessment debt were included, such aggregate ratio would be approximately 9.27 to 1. 26

33 Special Tax Category Taxable Parcels Planned Residential Units (2) Table 4 County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Estimated Maximum Special Tax and Value-to-Lien Ratios Based on Land Uses at Build-Out (As of March 1, 2016) Estimated Fiscal Year Special Tax Levy Percent of Estimated Fiscal Year Special Tax Levy Maximum Special Tax at Build-Out (2) (Fiscal Year ) Composite Value (3) Allocated 2016 Bonds Debt (4) Value-to- Lien Ratio Developed Property (1) Vineyard Point Individually Owned $ 1,089, % $ 1,089,070 $ 192,759,145 $ 13,966, to 1 Clubhouse (5) 1 0 4, , , Vineyard Creek Existing Farmhouse 1 1 1, , ,137 15, to 1 Unit 1 Individually Owned , ,542 3,650, , to 1 Unit 1 Lennar Owned , ,518 4,327, , to 1 Subtotal $ 1,153, % $ 1,153,918 $ 201,159,104 $ 14,798, to 1 Final Map Property Vineyard Creek Unit , ,579 7,381,128 1,315, to 1 Unit , ,926 9,395,343 2,884, to 1 Unit , ,332 5,383,177 1,607, to 1 Subtotal $ 269, % $ 452,836 $ 22,361,648 $ 5,807, to 1 Large Lot Subdivision Map Property (6) Vineyard Creek Unit $ 0 0.0% $156,665 $ 6,978,971 $2,009, to 1 Multi-Family Parcel ,088 1,391, , to 1 Subtotal 3 90 $ 0 0.0% $ 198,753 $ 8,370,530 $ 2,548, to 1 Total 1,007 1,093 $ 1,423, % $ 1,805,508 $ 231,891,282 $ 23,155, to 1 (footnotes on next page) 27

34 (1) Pursuant to the Rate and Method, Developed Property includes Taxable Property for which a building permit was issued as of June 1 of the prior Fiscal Year. (2) Based on the expected land uses on all parcels at build-out. The Rate and Method does not include a backup tax. Accordingly, for purposes of sizing the Bonds, the County has assumed a reduction of 15% (or $106,775) in the availability of Maximum Special Tax revenues at build-out. Such maximum Special Tax revenues may vary based on actual development. The County may elect to issue Bonds on such units in the future pursuant to the terms of the Bond Resolution. See Parity Bonds. (3) Includes: (i) assessed values for 657 parcels with single family detached homes completed as of January 1, 2015 and existing farmhouse located on the Remainder A parcel and (ii) appraised values for 145 parcels with single family detached homes completed or partially completed after January 1, 2015 and 291 lots in a mass graded or raw land condition, as set forth in the Appraisal. (4) Allocated based on expected maximum Special Tax at build-out. (5) Parcel is designated by the County as a common use area and no assessed value has been assigned. Parcel is developed with a 3,000 square-foot clubhouse owned by homeowner s association of the age-restricted development in Vineyard Point. (6) Excludes the Remainder B parcel owned by Douglas B/Anne R Bayless Revocable Living Trust, which is subject to the Special Tax levy but has no planned development at build-out and was not appraised. See the Rate and Method attached hereto as Appendix B. Source: County of Sacramento; the Appraiser; Goodwin Consulting Group, Inc. 28

35 Table 5 below sets forth the stratification of value-to-liens of the Taxable Property within the District as of the Date of Value, based on the Composite Value of the Appraised Property as set forth in the Appraisal and the Fiscal Year assessed values of the balance of the Taxable Property within the District, and such parcels respective shares of the principal amount of the 2016 Bonds, allocated to each parcel based upon its respective share of the maximum Special Tax at build-out. Table 5 below does not include the direct and overlapping tax and assessment debt and general obligation debt set forth in Table 6 below. Value to Lien Taxable Parcels Planned Units (1) Table 5 County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Summary of Value-to-Lien Ratios Maximum Special Tax at Build-Out (1) Composite Value Allocated 2016 Bonds Debt (2) Average Value-to- Bond Lien Ratio (3) % of Allocated 2016 Bonds Debt Greater than 10: $ 1,081,548 $ 194,628,530 $ 13,870, % 5.01:1 to 10: ,951 12,877,889 1,923, :1 to 5.00: ,314 22,993,304 6,762, Less than 3.00:1 Multi-Family ,088 1,391, , Clubhouse (4) 1 0 4, , Total 1,007 1,093 $ 1,805,508 $ 231,891,282 $ 23,155, % (1) (2) (3) Based on the expected land uses on all parcels at build-out. Excludes the Remainder B parcel owned by Douglas B/Anne R Bayless Revocable Living Trust, which is subject to the Special Tax levy but has no planned development at build-out and was not appraised. The initial principal amount of the 2016 Bonds is allocated based on the expected Maximum Special Tax at build-out. Excludes direct and overlapping debt shown in Table 6, which if included, would reduce the overall value-to-lien ratio to 9.27 to 1. (4) Parcel owned by homeowner s association of the age-restricted development in Vineyard Point, which has no assessed value and was not appraised. Parcel is developed with a 3,000 square foot clubhouse. See THE DEVELOPMENT PLAN Vineyard Point for a description of the clubhouse. Source: County of Sacramento; the Appraiser; Goodwin Consulting Group, Inc. Direct and Overlapping Bonded Indebtedness The property within the District is included within the boundaries of numerous overlapping agencies providing public services, some of which have outstanding bonded indebtedness secured by such property. The direct and overlapping bonded indebtedness of property in the District as of September 1, 2015, is shown in the table below (the Debt Report ). In addition to the bonded indebtedness set forth in said table, new community facilities districts or special assessment districts may be formed which encompass all or a portion of the property and, upon approval of registered voters or landowners within such districts, may issue more bonds and levy additional special or other taxes or assessments. In addition to the Special Tax and other special taxes and assessments, the property owners in the District will be required to pay the general ad valorem property tax. The Debt Report has been derived from data assembled and reported to the County by California Municipal Statistics Inc. Neither the County nor the Underwriter has independently verified the information in the Debt Report and do not guarantee its completeness or accuracy. 29

36 Table 6 County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Direct and Overlapping Debt Statement Local Secured Assessed Valuation: $181,526,504 (Land and Improvements) (1) DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 9/1/15 Los Rios Community College District General Obligation Bonds 0.115% $ 404,564 Elk Grove Unified School District Community Facilities District No ,839,629 Sacramento County Community Facilities District No ,965,000 (2) TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $16,209,193 Ratios to Local Secured Assessed Valuation: Direct Debt ($13,965,000) % Total Direct and Overlapping Tax and Assessment Debt % (1) Not all information for the Fiscal Year levy was available to California Municipal Statistics, Inc. in compiling this table. (2) Excludes the 2016 Bonds. Source: California Municipal Statistics Inc. 30

37 The following table sets forth effective tax rates on three sample property classifications within the District. The effective tax rates for the Taxable Property within the District range from approximately 1.73% to 1.85%, based on average sales prices provided by the Developer. Table 7 County of Sacramento Community Facilities District No (North Vineyard Station No. 1) (1) Estimated Fiscal Year Sample Tax Bill Assumptions SFR 3-5 SFR 4-7 MDR 7-12 Average Sales Price (2) $349,000 $275,000 $237,000 Homeowner's Exemption ($7,000) ($7,000) ($7,000) Net Expected Assessed Value $342,000 $268,000 $230,000 Ad Valorem Tax Rate County General % $3,420 $2,680 $2,300 Los Rios Coll GOB Total Ad Valorem Taxes $3,459 $2,710 $2,326 Direct Charges CSA 1 Lights Sacunincorp Zone 1 $18 $18 $18 Southgate L&L Vineyard West North Vineyard Station CFD No. 1 (3) Water & Drainage Studies - SCWA CSA 10 Benefit Zone Sacto County Police Serv. CFD Elk Grove School Dist MR - CFD # North Vineyard Station CFD ,741 1,554 1,181 Total Direct Charges $2,564 $2,377 $2,004 Total Taxes and Direct Charges $6,023 $5,087 $4,330 Percentage of Average Sales Price 1.73% 1.85% 1.83% (1) Based on Fiscal Year overlapping taxes and assessments rates and projected Fiscal Year Special Tax levy for the District. (2) Average sales price of homes sold between January 1, 2014 and April 30, 2015, as reported by the Developer. (3) Community facilities district formed for the maintenance and operations of parkways, parks, landscape corridors, other open space and community recreation facilities. Source: Sacramento County Tax Collector s Office; the Developer; Goodwin Consulting Group, Inc. 31

38 Top Taxpayers Based on ownership and development status as of March 1, 2016, individual homeowners are expected to be responsible for approximately 77.7% of the projected Fiscal Year levy and the Developer is expected to be responsible for approximately 22.0% of the projected Fiscal Year Special Tax levy. Table 8 below lists the largest property taxpayers within the District measured by the percentage of the projected Fiscal Year Special Tax levy. Owner Table 8 County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Top Taxpayers Taxable Parcels (1) Planned Units Estimated Fiscal Year Special Tax Levy Percentage of Estimated Fiscal Year Special Tax Levy Maximum Special Tax at Build- Out (2) Composite Value Allocated Bond Debt (4) Value-to- Lien Ratio (5) Lennar $313, % $ 695,107 $ 35,060,000 $8,914, Destinations at Vineyard Point Community Assoc. (3) 1 0 4, , , Individual Homeowners (6) ,105, ,105, ,831,282 14,181, Total 1,007 1,093 $1,423, % $1,805,508 $231,891,282 $23,155, (1) As of March 1, Excludes the Remainder B parcel owned by Douglas B/Anne R Bayless Revocable Living Trust, which has no planned development at build-out. (2) Based on the expected land uses on all parcels at build-out. (3) Parcel is developed with a 3,000 square-foot clubhouse and is owned by homeowner s association of the age-restricted development in Vineyard Point. (4) Allocated based on projected share of the Maximum Special Tax levy at build-out. (5) Excludes direct and overlapping debt shown in Table 6, which if included, would reduce the overall value-to-lien ratio to 9.27 to 1. (6) Includes the existing farmhouse located on the Remainder A Parcel. Source: Sacramento County Assessor s Office; Goodwin Consulting Group, Inc. 32

39 Parity Bonds The County is authorized to issue up to a maximum of $30,000,000 in bonded indebtedness with respect to the District. The County issued the 2007 Bonds in the aggregate principal amount of $14,415,000. Following the issuance of the 2016 Bonds, $5,840,000 in bond authorization will remain. The County may issue one or more Series of Parity Bonds payable from the Special Taxes as provided in the Bond Resolution on a parity with all other Bonds theretofore or thereafter issued under the Bond Resolution, but only subject to certain conditions precedent to the issuance of such Bonds as set forth in the Bond Resolution which include: (a) The County is in compliance with all agreements, conditions, covenants and terms contained herein and in all Supplemental Resolutions required to be observed or performed by it, and no Event of Default has occurred and is continuing; (b) The estimated Special Taxes available to the County if the Special Taxes were to be levied and collected at the maximum rate and amount on all Taxable Property in the District during each Fiscal Year that any Bonds of such Series of Bonds will be Outstanding (excluding the estimated Special Taxes from any Parcel of Taxable Property then delinquent in the payment of any Special Taxes) would produce (1) a sum equal to at least one hundred ten percent (110%) of the Annual Debt Service during the Bond Year which begins in such Fiscal Year, and (2) a sum equal to at least one hundred percent (100%) of the Annual Debt Service plus the estimated Expenses during each such Bond Year; all as shown by a certificate of an Independent Financial Consultant on file with the Paying Agent; (c) The aggregate Value-to-Lien Ratio of all Taxable Property (excluding the Value of any Parcels of Taxable Property then delinquent in the payment of any Special Taxes) is at least 3:1; and for the purposes of this paragraph, the term Value means either the current assessed valuation of a Parcel of Taxable Property or the appraised value of a Parcel of Taxable Property determined by an MAI appraiser, and the term Value-to-Lien Ratio means the ratio of (i) the Value of all Taxable Property to (ii) the aggregate principal amount of all Bonds Outstanding or proposed to be issued reasonably allocable to such Taxable Property plus the aggregate principal amount of all other assessment bonds and bonds issued under the Act reasonably allocable to such Taxable Property; and (d) The aggregate Value-to-Lien Ratio of all Undeveloped Property (excluding the Value of any Parcel of Undeveloped Property then delinquent in the payment of any Special Taxes) shall be at least 2:1; and for the purposes of this paragraph, the term Value means either the current assessed valuation of a Parcel of Undeveloped Property or the appraised value of a Parcel of Undeveloped Property determined by an MAI appraiser, and the term Value-to-Lien Ratio means the Value of all Undeveloped Property to the aggregate principal amount of all Bonds Outstanding or proposed to be issued reasonably allocable to such Undeveloped Property plus the aggregate principal amount of all other assessment bonds and bonds issued under the Act reasonably allocable to such Undeveloped Property. Notwithstanding the limitations contained in paragraphs (b), (c) and (d) above, nothing contained in the Bond Resolution shall limit the issuance of any Series of Bonds thereunder if after the issuance and delivery of such Series of Bonds none of the Bonds theretofore issued thereunder will be Outstanding, and nothing contained in the Bond Resolution shall limit the issuance of any Series of Bonds thereunder if after the issuance and delivery of such Series of Bonds the Annual Debt Service on all Bonds to be Outstanding after the issuance of the Bonds of such Series of Bonds in each Bond Year thereafter shall not be increased by reason of the issuance of such Series of Bonds. 33

40 THE DISTRICT General Description North Vineyard Station Specific Plan Area. The District is located within the North Vineyard Station Specific Plan (NVSSP) Area in Sacramento County, California. The NVSSP area is located in the south-central portion of the County, approximately 13 miles southeast of downtown Sacramento and five miles north of the City of Elk Grove. The project area consists of approximately 1,594.5 acres located within the Vineyard Community Planning Area. The NVSSP area is bounded by Florin Road to the north, Gerber Road to the south, the northerly extension of Vineyard Road on the east, and generally by Elder Creek on the west. The District. The District consists of approximately 284 gross acres and consists of a portion of the NVSSP area. The District includes the master planned community known as Vineyard Point and a portion of the master planned community known as Vineyard Creek. Lennar commenced construction within the District in 2007 with the development of the Vineyard Point project. Development slowed during the economic recession beginning in 2008 but resumed in Lennar has completed construction within Vineyard Point with 709 single family homes owned by individual homeowners, 177 of which were developed as an age-restricted community known as Destinations at Vineyard Point. Lennar has also completed a clubhouse of approximately 3,000 square feet consisting of a game room, bocce ball courts and a community garden which serves Destinations at Vineyard Point. Lennar is actively developing Vineyard Creek. Lennar Development Plan Vineyard Creek For development planning purposes, Lennar has divided Vineyard Creek into Units to be developed in phases. A map showing the location of the Units is included on page 39. The portion of Vineyard Creek within the District consists of a portion of Unit 1 and Units 4 through 6 and is expected to include approximately 383 single family homes and a multifamily project on a site of approximately 6.77 acres. Lennar is expected to either construct the multi-family project itself or sell the parcel to another merchant builder. A portion of the project is expected be built as a 183-unit active adult community to be known as Destinations at Vineyard Creek. A site of approximately 1.80 acres is expected to be developed as the clubhouse for Destinations at Vineyard Creek. CFD No The portion of the Vineyard Creek development that is not included within the District is within the County s CFD No CFD No is located southeast of the District and is planned for 479 single family detached residential units being developed by Lennar and 94 lots currently owned by Winn planned for residential development. As shown in Table 9 below, as of March 1, 2016, Lennar had completed 37 homes in CFD No , of which 19 had closed escrow to individual homeowners, had entered into contracts to sell 48 additional homes and had 37 more homes under construction. As of March 1, 2016, the remaining property within CFD No owned by Lennar was in various stages of development ranging from finished lots to unimproved land and the property owned by Winn was primarily unimproved land. Special taxes levied within CFD No are not pledged to and are not available to pay the principal of and interest on the 2016 Bonds. The table below summarizes Lennar s development status within the District and CFD No as of March 1,

41 Table 9 County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Development Status Vineyard Creek (As of March 1, 2016) Typical Lot Size (sq.ft) Number of Planned Lots Building Permits Issued Completed Homes Total Sales Sales Pending Unit Neighborhood The District 1 Cascade 45' x 105' Destinations 50' x 105' TBD 50' x 105' Destinations 50' x 105' Subtotal CFD No Cascade 45' x 105' Redwood 55' x 105' Redwood 52' x 105' Destinations 50' x 105' TBD 50' x 105' TBD 55' x 105' TBD 55' x 120' TBD 55' x 120' TBD 55' x 120' TBD 50' x 100' Subtotal Total (1) Based on County records which may lag in timing against those of Lennar. See Table 10 which shows 14 homes closed by Lennar in the District as of March 1, Source: The County; Lennar. Closed Escrows (1) Unit 1 (Portion). The portion of Unit 1 within the District is planned for 104 single family detached homes and is being marketed as The Cascade Collection at Parkside, which is a subdivision of Lennar s Parkside at Vineyard Creek within the NVSSP area. Products within The Cascade Collection at Parkside are currently planned to range in size from 1,603 square feet to 2,631 square feet with base sales prices ranging from $345,990 to $390,990. As of March 1, 2016, the portion of Unit 1 within the District consisted of 10 completed homes owned by individual homeowners, 4 completed homes under contract to be sold and 24 homes under construction (13 of which were under contract to be sold). Lennar expects to complete construction and close all 104 homes within Unit 1 in the District to individual homeowners by November Unit 4. Unit 4 in the District is planned for 117 single family detached homes, 22 of which will be conventional units and 95 of which will be a part of the age-restricted Destinations at Vineyard Creek (see Destinations at Vineyard Creek (Unit 4 (Portion) and Unit 6 below) project. As of March 1, 2016, construction had not yet commenced in Unit 4. Lennar has not yet developed the specific product mix, square footage, floor plans or pricing for the development within Unit 4. Lennar recorded a final map for Unit 4 in April 2016 and expects home sales to commence for the conventional units in June 2016 and for the agerestricted units in late A clubhouse to be located adjacent to both Units 4 and 6 will be constructed by Lennar as part of the Destinations at Vineyard Creek project. Destinations at Vineyard Creek (Unit 4 (Portion) and Unit 6. Lennar expects to develop a portion of Unit 4 and all of Unit 6 into the age-restricted Destinations at Vineyard Creek project, which is expected to 35

42 include 185 lots in total. Lennar recorded a final tract map for Unit 4 in April 2016 and Unit 6 has a tentative map recorded. Lennar has not yet developed the specific product mix, square footage, floor plans or pricing for the Destinations at Vineyard Creek project. The Developer expects home sales in the Unit 4 portion of Destinations at Vineyard Creek project to begin in late 2016 and in the Unit 6 portion in January Unit 5. Lennar plans to construct 72 single family detached homes within Unit 5 within the District. As of March 1, 2016, construction had not yet commenced in Unit 5. Lennar has not yet developed the specific product mix, square footage, floor plans or pricing for the development within Unit 5. Lennar recorded a final map for Unit 5 in April 2016 and expects home sales to commence in early Lennar expects to complete construction and close all homes within the District to individual homeowners by June The balance of the property within the District consists of approximately 16.6 acres for parks and related open space and trails, and approximately 90 acres for streets and public utilities. The Remainder A Parcel on which an existing farmhouse is located within the District is entitled for medium density. Additionally, the Remainder B Parcel which consists of 6.11 acres and is entitled for low density single family dwellings is located within the District. The County is not aware of any plans to develop such parcels, however, the County can make no assurances that such parcels will not be subdivided and developed in the future. See Attachment 1 to the Rate and Method attached hereto as Appendix B for the location of the Remainder A Parcel. 36

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44 Status of Entitlements On April 19, 1993, the North Vineyard Station Property Owners Group filed a petition with Sacramento County to initiate the NVSSP process. On January 19, 1994, the Board of Supervisors adopted Resolution , initiating the NVSSP. On December 10, 1997, the Policy Planning Commission voted to recommend approval of the NVSSP (Resolution No. 97-PO-005). On August 12, 1998, after receipt of documentary evidence, the Board certified the environmental document, approved the General Plan Amendment (Resolution No ) and adopted the Findings of Fact and a Statement of Overriding Considerations. On November 4, 1998, the Board adopted the Findings of Fact and Statement of Overriding Considerations for the NVSSP; approved the Community Plan Amendment to the Vineyard Community Plan; and approved the NVSSP. On this date, the Board also approved the Zoning Ordinance Amendment to establish a separate section in the Zoning Code incorporating the North Vineyard Station Specific Plan Development Standards; and approved the North Vineyard Station Public Infrastructure/Facilities Financing Strategy (the Financing Plan ). The District is located within the area covered by the NVSSP. The Vineyard Point portion of the District is fully built out. The Vineyard Creek development within the District is entitled for 383 single family homes, 7.0 acres for a multifamily residential project and approximately 16.6 acres of park and related open space and trails. The property within the District that is not Developed Property or Final Map Property has a Large Lot Subdivision Map recorded. Water and sewer service to the District is provided by the County of Sacramento Water Agency and the Sacramento Regional County Sanitation District, respectively. Electricity is supplied by Sacramento Municipal Utility District, natural gas is supplied by Pacific Gas and Electric, police services are provided by the County of Sacramento Sheriff, and fire services are provided by the Sacramento Metropolitan Fire District. The Developer has obtained all discretionary entitlements required to complete development in the District. The permits required pursuant to Section 404 of the Clean Water Act (33 U.S.C. 1347) to develop the property within the District have been issued. Facilities Off-site Infrastructure Development. Following the completion of various studies, the Board of Supervisors approved the Financing Plan in November of The Financing Plan constituted a comprehensive plan for the financing of various public improvements in the NVSSP area, including schools, roadway improvements, domestic water supply, sewage collection and treatment facilities, recreation and park facilities, regional transit facilities, drainage facilities, fire protection facilities, libraries and sheriff facilities. Certain facilities required for the development within the District were financed with a portion of the proceeds of the 2007 Bonds. Road Improvements: The Developer, Family Real Property Limited Partnership and the County entered into an Improvement Implementation Agreement dated May 6, 2014, as amended by the First Amendment to Improvement Implementation Agreement dated March 29, 2016 (as amended, the Implementation Agreement ). The Implementation Agreement requires that the Developer and Family Real Property Limited Partnership to construct certain on-site and off-site roadway improvements in order to obtain certain amounts of building permits in each of three phases of development planned for the Vineyard Creek project and the property owned by Winn which is not located within Vineyard Creek but within the NVSSP area (which overlaps the District and CFD No ). Specifically, the Implementation Agreement requires 50% completion of such improvements within each phase before 50% of the building permits allocated to each phase are issued and 100% completion of such improvements within each phase before 80% of the building permits allocated for each phase are issued. Such improvements generally relate to the construction, extension and widening of existing roadways to serve and mitigate the traffic impact of the Vineyard Creek project. The required improvements under the Implementation Agreement also includes associated sidewalk, signal and 38

45 gutter improvements. The Developer has awarded bids for certain of the improvements under the Implementation Agreement and expects to have sufficient funding to complete all projects required thereunder to develop the property within the District in the timeframe described herein. Additionally, the Implementation Agreement requires the Developer and Family Real Property Limited Partnership to advance $3,150,000 in certain landscape and median costs to the County in three annual payments. Two payments totaling $2,100,000 have been made. In addition, the roadway improvements required by the Implementation Agreement include a railroad crossing through an abandoned railroad track owned by the Central California Traction Company at Waterman Road or certain alternative roadway mitigation improvements. Until such roadway improvements are completed, the number of building permits that may be issued within the NVSSP area is currently limited to 930. The planned development within the District is not expected to be affected by such limitation, however, within CFD No , 57 lots owned by Lennar within Units 8 and 9 are affected by such limitation. The Implementation Agreement allows Lennar, Family Real Property Limited Partnership and the County to adjust the required roadway improvements or other transportation mitigation measures in connection with the development in the NVSSP area as a result of changes in the location, size and number of planned units. Water Facilities and Drainage. The Developer is required to construct certain phased improvements to comply with the County s water and drainage master plan applicable to the NVSSP area. The required drainage basins for the development within the District have been constructed. The Developer has acquired all the necessary right-of-way and detention basin property and has secured all the environmental permits for the drainage improvements necessary to develop the property within the District. The Developer expects to complete construction of the drainage facilities necessary to develop the property within the District by

46 The remaining facilities that are authorized to be financed by the District and CFD No and their estimated cost include: Cost Item Total Costs Estimate Costs Incurred Through January 31, 2016 Remaining Costs CFD No : (1)(2) Lennar Portion Roadway and Frontage $11,077,000 $2,991,000 $ 8,086,000 Drainage Improvements 4,482,000 1,210,000 3,272,000 Park Improvements 1,945, ,945,000 Subtotal (Lennar Portion) $17,504,000 $4,201,000 $13,303,000 CFD No : Lennar Portion Roadway and Frontage (1) $12,203,000 $3,295,000 $ 8,908,000 Drainage Improvements 4,937,000 1,333,000 3,604,000 Park Improvements 2,142, ,142,000 Subtotal (Lennar Portion) $19,282,000 $4,628,000 $14,654,000 Winn Portion Roadway and Frontage (1) $ 2,351,000 $ 66,000 $ 2,285,000 Drainage Improvements 951,000 27, ,000 Park Improvements 413, ,000 Subtotal (Winn Portion) $ 3,715,000 $ 93,000 $ 3,622,000 Total CFD No : $22,997,000 $ 4,721,000 $18,276,000 TOTAL $40,501,000 $8,922,000 $31,579,000 (1) Includes costs of water improvements. (2) Excludes costs previously paid for from proceeds of the 2007 Bonds in the amount of $12,468,930. Source: Lennar. A portion of the remaining costs set forth in the table above are expected to be funded from proceeds of the 2016 Bonds and bonds expected to be issued by the County with respect to CFD No concurrently with the 2016 Bonds. The Developer and Winn will be responsible for the costs of such facilities to the extent the proceeds of the 2016 Bonds and proceeds of bonds to be issued by the County with respect to CFD No are insufficient. The Developer is financing a portion of its development activities in the District through internal sources and intends to use these sources of funds, together with proceeds of future home sales, to finance home construction costs and carrying costs for its property in the District (including property taxes and the Special Taxes while it owns the property) until full sell-out of its proposed single-family residential homes in the District. The Developer believes that it will have sufficient funds to provide the internal funding needed to complete the development of the lots it currently owns in the District. It is anticipated that the Developer will receive credits against required development impact fees with respect to its development for a portion of the public improvements financed by the District. See THE DEVELOPER S FINANCING PLAN below. Intract Infrastructure Development. As a lot is developed for home construction, the lot-specific horizontal improvements need to be constructed (e.g., driveway, sidewalk, utility laterals, retaining walls, street capping (excluding home construction)), impact fees need to be paid (e.g., library, sewer, and school fees), and building permit fees need to be paid. The Developer is responsible for construction of all intract infrastructure. The lots owned by the Developer within the District vary from completed homes to unimproved land. The Developer estimates the costs to bring the unfinished lots that it owns to a physically 40

47 finished lot condition to range from approximately $29,000 to $66,000 per lot, with an average of approximately $37,196 per lot. Amenities. The Vineyard Point development includes a completed clubhouse. The Developer expects to construct a clubhouse on a parcel of approximately 1.80 acres for the Destinations at Vineyard Creek agerestricted community, a park and associated open space and trails of approximately 16.6 acres. Initial site development has commenced for the proposed clubhouse. The Developer expects to commence construction in the spring of 2016 of a park within the District, however, construction of the park is not required to develop the property within the District. THE DEVELOPER The following information has been provided by the Developer and has not been verified and is not guaranteed as to accuracy or completeness by the County. The information herein regarding ownership of property in the District has been included because it is considered relevant to an informed evaluation of the 2016 Bonds. The inclusion in this Official Statement of information related to the Developer should not be construed to suggest that the 2016 Bonds or the Special Taxes that will be used to repay the 2016 Bonds are recourse obligations of any property owner in the District. A property owner may sell or otherwise dispose of land within the District or any interest therein at any time. The 2016 Bonds and the Special Taxes are not personal obligations of the Developer or any subsequent landowners and, in the event the Developer or any subsequent landowner default in the payment of the Special Taxes, the County may proceed with judicial foreclosure but has no direct recourse to the assets of the Developer or any subsequent landowner. The 2016 Bonds are secured solely by the Special Taxes and other amounts pledged under the Bond Resolution. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS and SPECIAL RISK FACTORS herein. Lennar Homes of California, Inc. General. Lennar Homes of California, Inc., a California corporation, is based in Aliso Viejo, California, and has been in the business of developing residential real estate communities in California since Lennar is owned by U.S. Home Corporation, a Delaware corporation ( U.S. Home ), and two other entities, Lennar Land Partners Sub, Inc. (7.331% interest) and Lennar Land Partners Sub II, Inc. (11.933% interest). U.S. Home, Lennar Land Partners Sub, Inc., and Lennar Land Partners Sub II, Inc. are each whollyowned by Lennar Corporation. Lennar Corporation ( Lennar Corporation ), founded in 1954 and publicly traded under the symbol LEN since 1971, is one of the nation s largest home builders, operating under a number of brand names, including Lennar Homes and U.S. Home. Lennar develops residential communities both within the Lennar family of builders and through consolidated and unconsolidated partnerships in which Lennar maintains an interest. Lennar is an indirect wholly owned subsidiary of Lennar Corporation. In its SEC filing on form 10-K filed on January 22, 2016 (for the twelve months ending November 30, 2015), Lennar Corporation reported that, for both the years ended November 30, 2015 and 2014, revenues from home sales were $8.3 billion and $6.8 billion, respectively. New home deliveries increased to 24,292 homes in the year ended November 30, 2015 from 21,003 homes in The average sales price of homes delivered by all of Lennar Corporation s homebuilding segments increased to $344,000 in the year ended November 30, 2015, from $326,000 in the same period in Lennar Corporation is subject to the informational requirements of the Exchange Act and in accordance therewith files reports, proxy statements and other information with the SEC. Such filings, 41

48 particularly the Annual Report on Form 10-K and its most recent Quarterly Report on Form 10-Q, may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C at prescribed rates. Such files can also be accessed over the internet at the SEC s website at This internet address is included for reference only and the information on the internet site is not a part of this Official Statement and is not incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on the internet site. Copies of Lennar Corporation s Annual Report and related financial statements, prepared in accordance with generally accepted accounting standards, are available from Lennar Corporation s website at This internet address is included for reference only and the information on the Internet site is not a part of this Official Statement and is not incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on the internet site. Special Tax and Assessment Delinquencies. To the actual knowledge of the officer signing a certificate executed in connection with the closing of the 2016 Bonds, Lennar is not currently in default in any material respect, or has ever been delinquent in any material respect, in the payment of any ad valorem property tax, special assessment, or special taxes on property owned by Lennar within California that was not cured within the fiscal year in which the tax or assessment was levied, within the past five years. THE DEVELOPER S FINANCING PLANS The information under this heading includes forward-looking statements. See, CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT on the page immediately preceding the Table of Contents. As previously discussed, such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements. Readers are cautioned not to place undue reliance on such forward-looking statements, which only speak as of the date of this Official Statement. Moreover, the information under this heading has been obtained from the Developer; and the County has not independently verified it, cannot assure that it is accurate and complete and makes no representation as to its accuracy and completeness. The Developer believes that the funding sources described below are expected to be sufficient to complete the Developer s activities and obligations with respect to its development as described herein. There is no assurance, however, that amounts necessary to finance any outstanding development costs will be available from the Developer, any other entities described below, the sale of property within the District, or any other source when needed. Neither the Developer nor any of its affiliated entities are under any legal obligation of any kind to expend funds for the development of property within the District. Any contributions by the Developer or any of its affiliated entities to fund the costs of such development are entirely voluntary. Lennar is self-financing the project through internal sources and intends to use the proceeds of the 2016 Bonds, together with proceeds of future home sales, to finance home construction costs and carrying costs for its property. The following table shows Lennar s estimated sources and uses of funds for developing Vineyard Creek: 42

49 Table 10 County of Sacramento Community Facilities District No (North Vineyard Station No. 1) Vineyard Creek Development Developer Cash Flow as of March 1, 2016 Total Budget Through March 1, 2016 March 1, 2016 to December 31, 2016 January 1, 2017 to December 31, 2017 January 1, 2018 Through Build- Out ( Sources of Funds Sales of Homes $ 143,710,000 $ 5,163,000 (2) $ 26,876,000 $ 40,313,000 $ 71,358,000 Sales of Land (2) 2,369, ,369,500 0 Lennar Corporate (Self Fund Project) 33,914,400 33,914, CFD Bond Proceeds 10,300, ,300, Credits/Reimbursements 16,505, ,000 3,087,000 4,630,000 8,038,000 Total Sources of Funds $ 206,798,900 $ 39,827,400 $ 40,263,000 $ 47,312,500 $ 79,396,000 Uses of Funds Land $ 11,519,000 $ 11,519,000 $ 0 $ 0 $ 0 Common Costs/Land Planning/Other 3,758,000 3,645,000 21,000 32,000 60,000 Site Construction (In-tracts) 16,441,000 9,865,000 1,230,000 1,845,000 3,501,000 Roadway and Frontage (Water Included) 11,077,000 3,323,000 2,072,000 3,107,000 2,575,000 Drainage 4,482,000 1,121, ,000 1,257,000 1,266,000 Park Construction 1,945, ,945, Direct Construction 52,006,000 6,402,000 9,726,000 14,589,000 21,289,000 Fees & Permits 21,352,000 3,149,000 3,993,000 5,990,000 8,220,000 Service & Warranty 2,156, , ,000 1,148,000 Field Expenses 2,300, , ,000 1,225,000 Selling & Marketing 7,905, ,000 1,478,000 2,217,000 4,010,000 General & Administrative 718, , , ,000 Property Taxes & Other 1,724, , , , ,600 Total Uses of Funds $ 137,383,000 $ 39,827,400 $ 22,701,000 $ 30,919,000 $ 43,935,600 NET CASH FLOW $ 69,415,900 $ 0 $ 17,562,000 $ 16,393,500 $ 35,460,400 Cumulative Cash Flow $ 0 $ 17,562,000 $ 33,955,500 $ 69,415,900 (1) Assumes sale of the approximately 6.77 acre parcel proposed for a multifamily project. (2) Based on estimated 14 actual home closings which is four more than the number of closings shown in Table 9, which is based on the County s records as of March 1, Source: The Developer. Introduction SPECIAL RISK FACTORS The principal source of payment of debt service on the 2016 Bonds will be payments of the Special Tax made with respect to the Taxable Property in the District. As discussed under SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS The Special Tax, the Special Tax is to be levied annually against all Taxable Property either at the maximum rates authorized by the Special Tax Formula or at such lower rates as are determined by the Board of Supervisors to raise sufficient funds to comply with the agreements, conditions, covenants and terms contained in the Bond Resolution. The Special Tax is to be collected on the tax roll of the County of Sacramento at the same time and in the same manner as general ad valorem real property taxes are collected. The annual levy of the Special Tax cannot be made at a tax rate higher than the maximum tax rates established by the Special Tax Formula even if that rate is insufficient to comply with the agreements, conditions, covenants and terms contained in the Bond Resolution. See discussions below under Levy of Special Tax and Collection of the Special Tax. 43

50 Payment of the Special Tax is secured by a lien against Parcels of Taxable Property in the District. In the event an installment of the Special Tax included in the tax bill for a Parcel of Taxable Property is not paid when due, the County has covenanted that, under certain circumstances, it will institute foreclosure proceedings in court to cause the Parcel of Taxable Property to be sold in order to recover the delinquent amount from the sale proceeds. Tax roll collection remedies will be used in the event that foreclosure proceedings are not instituted. Foreclosure and sale may not always result in the recovery of the full amount of delinquent installments of the Special Tax. See Collection of the Special Tax. The sufficiency of the tax or foreclosure sale proceeds to cover the delinquent amount depends in part upon the market for and the value of the parcel at the time of the tax or foreclosure sale. The value of the Parcels of Taxable Property in the District, and the relationship of such value to the principal amount of the 2016 Bonds, and the proportionate share of debt service of the 2016 Bonds to be borne by the parcels of various landowners, are based upon present facts and circumstances. Future substantial adverse changes in those facts and circumstances may result in future value relationships and proportionate shares of debt service, that differ significantly from the current appraised or assessed values and such relationships and shares. Those facts and circumstances include land ownership, development plans and other factors affecting the progress of land development, natural conditions relating to the enjoyment of property and legal requirements affecting the development of property, as well as a number of additional factors many of which are discussed or referred to in this section of the Official Statement. These factors may result in significant erosion in value, with consequent reduced security for the 2016 Bonds. Sufficiency of the tax or foreclosure sale proceeds to cover a delinquency may also depend upon the amount of prior or parity liens and similar claims. Thus, a variety of governmental liens may presently exist or may arise in the future with respect to a parcel which, unless subordinate to the Special Tax, may effectively reduce the value of the parcel that is realizable for the benefit of the Special Tax. Further, other governmental claims, such as hazardous substance claims, may affect the realizable value even though such claims may not rise to the status of liens. See Hazardous Substances. Timely foreclosure and sale proceedings with respect to a parcel may be forestalled or delayed by a stay in the event the owner of the parcel becomes the subject of bankruptcy proceedings. Not only may foreclosure and sale proceedings be forestalled or delayed, but the sale of a parcel may also be similarly affected by a bankruptcy stay. Further, should the stay not be lifted, payment of the Special Tax may be subordinated to bankruptcy law priorities. See Bankruptcy and Legal Delays. Although bankruptcy proceedings may forestall or delay a foreclosure and sale or a tax sale of a delinquent parcel, the Special Tax is secured by a lien which, assuming proper procedures are followed, may be enforced against the parcel. However, there will not be any recourse against a bankrupt property owner since the owner is not personally obligated to pay the Special Tax. Further, if proper disclosure of the authorization of the Special Tax is not made to the owner, the willingness or ability of an owner to pay the Special Tax may be adversely affected. See Payment of the Special Tax Not a Personal Obligation of Property Owners. The County is not obligated to pay debt service on the 2016 Bonds in the event collections of the Special Tax are delinquent and no money is available from the Redemption Account. See No Obligation to Pay Debt Service. Even if debt service is timely paid, it is possible that interest on the 2016 Bonds may have to be included in the gross income of the owner of the 2016 Bonds by reason of some circumstance occurring subsequent to issuance of the 2016 Bonds, thereby reducing the after-tax yield. See Loss of Tax Exemption. 44

51 Concentration of Ownership Based on development status as of March 1, 2016, the Developer is expected to be responsible for approximately 22% of the estimated Fiscal Year Special Tax levy. See SECURITY AND SOURCE OF PAYMENT FOR THE BONDS Special Tax Analysis. Until the completion and sale of additional homes by the Developer, the receipt of the Special Taxes is dependent on the Developer s willingness and ability to pay the Special Taxes when due. Failure of the Developer, or any successor, to pay the annual Special Taxes when due could result in a draw on its letter of credit or a default in payments of the principal of, and interest on, the 2016 Bonds, when due. See SPECIAL RISK FACTORS Failure to Develop Properties below. No assurance can be made that the Developer, or its successors, will complete the intended construction and development in the District. See SPECIAL RISK FACTORS Failure to Develop Properties below. As a result, no assurance can be given that the Developer, and its successors, will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See SPECIAL RISK FACTORS Bankruptcy and Foreclosure below, for a discussion of certain limitations on the District s ability to pursue judicial proceedings with respect to delinquent parcels. Levy of Special Tax The principal source of payment of debt service on the 2016 Bonds is the proceeds of the annual levy and collection of the Special Tax against Parcels of Taxable Property in the District. The annual levy of the Special Tax is subject to the maximum tax rates authorized. The levies cannot be made at higher rates even if the failure to do so would mean that the estimated proceeds of the levy and collection of the Special Tax, together with other available funds, will not be sufficient to pay debt service on the 2016 Bonds. Other funds which might be available include funds derived from the payment of delinquent Special Tax levies and funds derived from the tax sale or foreclosure and sale of parcels on which levies of the Special Tax are delinquent. The levy of the Special Tax will rarely, if ever, result in a uniform relationship between the value of particular parcels 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 and their proportionate share of debt service on the 2016 Bonds. The Special Tax levied in any particular tax year on a parcel is based upon the revenue needs and application of the Special Tax Formula. Application of the Special Tax Formula will, in turn, be dependent upon certain factors with respect to each parcel (its location, land use classification and size) in comparison to similar factors with respect to the other parcels in the District. Thus, in addition to annual variations of the revenue needs from the Special Tax, the following are some of the factors which might cause the levy of the Special Tax on any particular parcel to vary from the Special Tax that might otherwise be expected: (1) Changes in the land use classifications applicable to parcels; (2) Reduction in the number of parcels and/or the aggregate area thereof for such reasons as acquisition of parcels by a government and failure of the government to pay the Special Tax based upon a claim of exemption or, in the case of the federal government or an agency thereof, immunity from taxation; and (3) Failure of the owners of parcels to pay the Special Tax and delays in the collection of or inability to collect the Special Tax by tax sale or foreclosure and sale of the delinquent parcels. In addition, pursuant to Section 53321(d) of the Government Code, the Special Tax levied against any Taxable Parcel for which an occupancy permit for private residential use has been issued may not be increased 45

52 as a consequence of delinquency or default by the owner of any other Taxable Parcel within the District by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. As a result, it is possible that the County may not be able to increase the tax levy to the Special Tax rates set forth in the Special Tax Formula in all years. However, to the extent the County s ability to levy the necessary amount of Special Taxes is limited by Section 53321(d) of the Government Code, the County can levy Special Taxes on Large Lot Subdivision Map Property and Tentative Map Property at the Maximum Special Tax rates set forth in the Special Tax Formula. Such limitation would not apply to increases in Special Taxes levied for other purposes, such as the issuance of Parity Bonds. Collection of the Special Tax In order for the County to pay debt service on the 2016 Bonds it will generally be necessary that the Special Tax be paid in a timely manner. The Bond Resolution provides that the Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described above and in the Act, is to be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem property taxes. Pursuant to these procedures, if taxes are unpaid for a period of five years or more, the property is subject to sale by the County. Pursuant to the Act, in the event of any delinquency in the payment of the Special Tax, the County may order the institution of a superior court action to foreclose the lien therefor within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at judicial foreclosure sale. Such judicial foreclosure action is not mandatory. However, the County has covenanted for the benefit of the owners of the 2016 Bonds that it will institute foreclosure proceedings as authorized by the Act in order to enforce the lien of the delinquent installments of the Special Tax under certain circumstances. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS Covenant for Foreclosure. In the event that foreclosure proceedings are commenced, such foreclosure proceedings could be stayed by the commencement of bankruptcy proceedings by or against the owner of the property being foreclosed. In the event that sales or foreclosures of property are necessary, there could be a delay in payments to Holders of the 2016 Bonds pending such sales or the prosecution of foreclosure proceedings and receipt by the County of the proceeds of sale. Teeter Plan Termination In 1993, the County implemented its Teeter Plan as an alternative procedure for the distribution of certain property tax and assessment levies on the secured roll. Under its Teeter Plan, the County has elected to provide local agencies and taxing areas, including the District, with full tax and assessment levies instead of actual tax and assessment collections. In return, the County is entitled to retain all delinquent tax and assessment payments, penalties and interest. Thus, the County s Teeter Plan may protect the Owners of the 2016 Bonds from the risk of delinquencies in the payment of the Special Tax. However, the County is entitled, and under certain circumstances could be required, to terminate its Teeter Plan with respect to all or part of the local agencies and taxing areas covered thereby. A termination of the Teeter Plan with respect to the District would eliminate such protection from delinquent Special Taxes. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS Teeter Plan. Exempt Properties Certain properties are exempt from the Special Tax in accordance with the Special Tax Formula. In addition, the Act provides that properties or entities of the state, federal or local government are exempt from the Special Tax; provided, however, that property in the District which is acquired by a public entity through a negotiated transaction or by gift or devise and which is not otherwise exempt from the Special Tax, will continue to be subject to the Special Tax. In addition, the Act provides that if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax 46

53 with respect to that property is to be treated as if it were a special assessment. The constitutionality and operation of these provisions of the Act have not been tested. Reduction in the amount of property subject to the Special Tax, for such reasons as acquisition of such property by a government and failure of the government to pay the Special Tax based upon a claim of exemption or, in the case of the federal government or an agency thereof, immunity from taxation, could result in an increased tax burden on the remaining parcels of Taxable Property. The Act provides that, if any property within the District not otherwise exempt from the Special Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax will continue to be levied on and enforceable against the public entity that acquired the property. In addition, the Act provides that, if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment and be paid from the eminent domain award. The constitutionality and operation of these provisions of the Act have not been tested in the courts. Due to the problems of collecting taxes from public agencies, if a substantial portion of land within the District were to become owned by public agencies, collection of the Special Tax might become more difficult and could result in collections of the Special Tax which might not be sufficient to pay principal of and interest on the 2016 Bonds when due, and a default could occur with respect to the payment of such principal and interest. See the caption FDIC/Federal Government Interests in Properties. The Act further provides that no other properties or entities are exempt from the Special Tax unless the properties or entities are expressly exempted in a resolution of consideration to levy a new special tax or to alter the rate or method of apportionment of an existing special tax. Failure to Develop Properties Development of property within the District is ongoing. See the captions THE DEVELOPMENT PLAN, and THE DISTRICT for a description of the development status of the Taxable Property. Undeveloped or partially developed land is inherently less valuable than developed land and provides less security to the Bondowners should it be necessary for the County to foreclose on the property due to the nonpayment of Special Taxes. The failure to complete development of the required infrastructure for development in the District as planned, or substantial delays in the completion of the development or the required infrastructure for the development due to litigation or other causes may reduce the value of the property within the District and increase the length of time during which Special Taxes will be payable from undeveloped property, and may affect the willingness and ability of the owners of property within the District to pay the Special Taxes when due. See the caption THE DISTRICT Facilities and THE DEVELOPMENT PLAN for a discussion of the remaining infrastructure and homes to be completed and sold within the District. Land development is subject to comprehensive federal, State and local regulations. Approval is required from various agencies in connection with the layout and design of developments, the nature and extent of improvements, construction activity, land use, zoning, school and health requirements, as well as numerous other matters. There is always the possibility that such approvals will not be obtained or, if obtained, will not be obtained on a timely basis. Failure to obtain any such agency approval or satisfy such governmental requirements would adversely affect planned land development. Finally, development of land is subject to economic considerations. The Developer may need to obtain financing to complete the development of the units that it is developing. No assurance can be given that the required funding will be secured or that the proposed development will be partially or fully completed, and it is possible that cost overruns will be incurred which will require additional funding beyond what the Developer, has projected, which may or may not be available. See THE DEVELOPER S FINANCING PLANS herein. 47

54 There can be no assurance that land development operations within the District will not be adversely affected by a future deterioration of the real estate market and economic conditions, increases in interest rates for real estate loans or future local, State and federal governmental policies relating to real estate development, the income tax treatment of real property ownership, or the national economy. A slowdown of the development process and the absorption rate could adversely affect land values and reduce the ability or desire of the property owners to pay the annual Special Taxes. In that event, there could be a default in the payment of principal of, and interest on, the 2016 Bonds when due. Bondowners should assume that any event that significantly impacts the ability to develop land in the District or delays the timing of development would cause the property values within the District to decrease substantially from those estimated by the Appraiser and could affect the willingness and ability of the owners of land within the District to pay the Special Taxes when due. See THE DISTRICT Status of Entitlements herein. Based on current development status, the payment of principal of and interest on the 2016 Bonds depends in part upon the receipt of Special Taxes levied on undeveloped property. Undeveloped property is less valuable per unit of area than developed land, especially if there are no plans to develop such land or if there are severe restrictions on the development of such land. The undeveloped property also provides less security to the 2016 Bondowners should it be necessary for the County to foreclose on undeveloped property due to the nonpayment of the Special Taxes. Furthermore, an inability to develop the land within the District as currently proposed will make the 2016 Bondowners dependent upon timely payment of the Special Taxes levied on undeveloped property for a longer period of time than projected. A slowdown or stoppage in the continued development of the District could reduce the willingness and ability of the landowners to make Special Tax payments on undeveloped property and could greatly reduce the value of such property in the event it has to be foreclosed upon. See Reductions in Property Values below. Maximum Special Tax Within the limits of the Special Tax, the County may adjust the Special Tax levied on all property in the District to provide an amount required to pay interest on and principal of the 2016 Bonds, and the amount necessary and to pay all current Expenses. However, the amount of the Special Tax that may be levied against particular categories of property in the District is subject to the maximum Special Tax applicable to that category. There is no assurance that the maximum Special Tax on the property in the District will be sufficient to pay the amounts required to be paid by the Bond Resolution at all times. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS The Special Tax. Payment of Special Tax Not Personal Obligation of Property Owners No owner of property within the District is personally obligated to pay the Special Tax applicable to his or her property. Rather, the Special Tax is an obligation only against the property, and recourse is limited to judicial foreclosure on the property. If the value of a parcel is not sufficient, taking into account other obligations also payable thereby, to fully secure the Special Tax, the County has no recourse against the owner. Disclosures to Future Purchasers The District has recorded a notice of the Special Tax lien in the Office of the County Recorder of the County. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Special Tax obligation in the purchase of a parcel of land, a home or a commercial or industrial facility or the lending of money thereon. The Act requires the subdivider (or its agent or representative) of a subdivision to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section b requires that in the case of transfers other than those covered by the above requirement, the 48

55 seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with the above requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax when due. Parity Taxes and Special Assessments The ability or willingness of an owner of property within the District to pay the Special Tax could be affected by the existence of other taxes and assessments imposed upon the property. The Special Tax and any penalties thereon will constitute a lien against the lots and parcels of land on which they will be annually imposed until they are paid. Such lien is on a parity with all Special Tax and special assessments levied by other agencies and is co-equal to and independent of the lien for general property taxes, other Special Tax, and certain special assessments regardless of when they are imposed upon the same property. The Special Tax has priority over all existing and future private liens imposed on the property. In addition, other public agencies whose boundaries overlap those of the District could, with or in some circumstances without the consent of the owners of the land in the District, impose additional taxes or assessment liens on the property in the District in order to finance public improvements to be located inside or outside of the District. The County has no control over the ability of other entities to issue indebtedness secured by other special taxes or assessments payable from all or a portion of the property in the District. In addition, the County is not prohibited itself from establishing assessment districts, community facilities districts or other districts which might impose assessments or taxes against property in the District. In the event any additional improvements or fees are financed pursuant to the establishment of an assessment district, community facilities district or other district, any taxes or assessments levied to finance such improvements will have a lien on a parity with the lien of the Special Tax. The imposition of additional liens on a parity with the Special Tax could reduce the ability or willingness of the property owners to pay the Special Tax and increases the possibility that foreclosure proceeds will not be adequate to pay delinquent Special Tax or the principal of and interest on the 2016 Bonds when due. See SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS Direct And Overlapping Bonded Indebtedness. Development of land within the District is contingent upon construction or acquisition of major public improvements such as arterial streets, water distribution facilities, sewage collection and transmission facilities, drainage and flood protection facilities, gas, telephone and electrical facilities, schools, parks and street lighting, as well as local in-tract improvements and on-site grading and related improvements. Certain of these improvements have been acquired and/or completed; however, there can be no assurance that the remaining improvements will be constructed or will be constructed in time for development to proceed as currently expected. The cost of these additional improvements plus the public and private in-tract, on-site and off-site improvements could increase the public and private debt for which the land within the District is security. This increased debt could reduce the ability or desire of the property owners to pay the annual Special Taxes levied against the property. In that event there could be a default in the payment of principal of, and interest on, the 2016 Bonds when due. Neither the County nor the District has control over the ability of other entities and districts to issue indebtedness secured by special taxes, ad valorem taxes or assessments payable from all or a portion of the property within the District. In addition, the landowners within the District may, without the consent or knowledge of the County, petition other public agencies to issue public indebtedness secured by special taxes, ad valorem taxes or assessments. Any such special taxes, ad valorem taxes or assessments may have a lien on such property on a parity with the Special Taxes and could reduce the estimated value-to-lien ratios for property within the District described herein. 49

56 Reductions in Property Values The value of the land within the District is an important factor in determining the investment quality of the 2016 Bonds. If a property owner is delinquent in the payment of Special Taxes, the County s only remedy is to commence foreclosure proceedings in an attempt to obtain funds to pay the Special Taxes. Reductions in property values due to a downturn in the economy, physical events such as earthquakes or floods, stricter land use regulations, delays in development or other events will adversely impact the security underlying the Special Taxes. The Appraiser has estimated, on the basis of certain assumptions and limiting conditions contained in the Appraisal, that as of April 26, 2016 the value of the Appraised Property within the District was not less than $53,610,000 (represents a rounded total of the individually appraised parcels). Combined with the Fiscal Year assessed value of the 657 homes within the District owned by individual homeowners as of January 1, 2015 ($178,281,801), the Appraiser is of the opinion that the Composite Value of the Taxable Property within the District, as of April 26, 2016, was not less than $231,891,801. The Appraisal is based on the assumptions as stated in APPENDIX A APPRAISAL REPORT and APPENDIX A-1 UPDATE APPRAISAL REPORT. The Appraisal does not reflect any possible negative impact which could occur by reason of future slow or no growth voter initiatives, any potential limitations on development occurring due to time delays, an inability of landowners within the District to obtain any needed development approval or permit, the presence of hazardous substances within the District, the listing of endangered species or the determination that habitat for endangered or threatened species exists within the District, or other similar situations. Bankruptcy and Legal Delays The payment of the Special Tax and the ability of the County to foreclose the lien of a delinquent unpaid tax, as discussed in SECURITY AND SOURCES OF PAYMENT FOR THE 2016 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 foreclosure action could be delayed due to crowded local court calendars or delays in the legal process. The various legal opinions to be delivered concurrently with the delivery of the 2016 Bonds (including Bond Counsel s approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases. Although bankruptcy proceedings would not cause the obligation to pay the Special Tax to become extinguished, the bankruptcy of a property owner could result in a delay in prosecuting superior court foreclosure proceedings because federal bankruptcy laws may provide for an automatic stay of foreclosure and sale of tax sale proceedings. Any such delays could increase the likelihood of a delay or default in payment of the principal of and interest on the 2016 Bonds and the possibility of delinquent tax installments not being paid in full. Moreover, if the value of the subject property is less than the lien of the Special Tax, such excess could be treated as an unsecured claim by the bankruptcy court. Further, should remedies be exercised under the federal bankruptcy laws against Taxable Property, payment of the Special Tax may be subordinated to bankruptcy law priorities. Thus, certain claims may have priority over the Special Tax in a bankruptcy proceeding even though they would not outside of a bankruptcy proceeding. FDIC/Federal Government Interests In Properties General. The ability of the County to collect interest and penalties specified by the Act and to foreclose the lien of delinquent Special Taxes may be limited in certain respects with regard to parcels in which the FDIC, the Drug Enforcement Agency, the Internal Revenue Service, or other federal agencies such as the Federal National Mortgage Association ( FNMA ) or Freddie Mac, has or obtains an interest. 50

57 The supremacy clause of the United States Constitution reads as follows: This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the contrary notwithstanding. The foregoing is generally interpreted to mean that, unless the United States Congress has otherwise provided, if a federal governmental entity owns a parcel that is subject to Special Taxes within the District but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable State and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments. Moreover, unless the United States Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the County wishes to foreclose on the parcel as a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government s mortgage interest. In Rust v. Johnson 597 F.2d 174 (9th Cir. 1979), the United States Court of Appeal, Ninth Circuit (the Ninth Circuit ), held that FNMA is a federal instrumentality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of state power over a mortgage interest held by FNMA constitutes an exercise of state power over property of the United States. For a discussion of risks associated with taxable parcels within the District becoming owned by the federal government, federal government entities or federal government sponsored entities, see the caption Exempt Properties. The County has not undertaken to determine whether any federal governmental entity currently has, or is likely to acquire, any interest (including a mortgage interest) in any of the parcels subject to the Special Taxes, and therefore expresses no view concerning the likelihood that the risks described above will materialize while the 2016 Bonds are outstanding. FDIC. In the event that any financial institution making a loan which is secured by parcels within the District is taken over by the FDIC and prior thereto or thereafter the loan or loans go into default, resulting in ownership of the property by the FDIC, then the ability of the County to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited. The FDIC s policy statement regarding the payment of state and local real property taxes (the Policy Statement ) provides that property owned by the FDIC is subject to state and local real property taxes only if those taxes are assessed according to the property s value, and that 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 due and payable and will pay claims for delinquent property taxes as promptly as is consistent with sound business practice and the orderly administration of the institution s affairs, unless abandonment of the FDIC s interest in the property is appropriate. The FDIC will pay claims for interest on delinquent property taxes owed at the rate provided under state law, to the extent that the interest payment obligation is secured by a valid lien. The FDIC will not pay any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts. If any property taxes (including interest) on FDIC-owned property are secured by a valid lien (in effect before the property became owned by the FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC s consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC s consent. The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes, including special assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent that it purports to secure the payment of any such amounts. Special taxes imposed under the Act and a special tax formula which determines the special tax due each year are specifically identified in the Policy Statement as being imposed each year and therefore covered by the FDIC s federal immunity. The Ninth Circuit issued a 51

58 ruling on August 28, 2001 in which it determined that the FDIC, as a federal agency, is exempt from special taxes imposed pursuant to the Act. The County is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency with respect to parcels in which the FDIC has or obtains an interest, although prohibiting the lien of the Special Taxes from foreclosure at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. Such an outcome could cause a draw on the Bond Reserve Fund and perhaps, ultimately, if enough property were to become owned by the FDIC, a default in payment on the 2016 Bonds. Geologic, Topographic and Climatic Conditions The value of the Taxable Property in the future can be adversely affected by a variety of additional factors, particularly those which may affect infrastructure and other public improvements and private improvements on Taxable Property and the continued habitability and enjoyment of such private improvements. Such additional factors include, without limitation, geologic conditions such as earthquakes, topographic conditions such as earth movements, landslides and floods and climatic conditions such as droughts. It may be expected that one or more of such conditions may occur and may result in damage to improvements of varying seriousness, that the damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances, the value of the Taxable Property may well depreciate or disappear. The District is located in an area designated by FEMA as X (shaded), meaning an area that is subject to a 0.2% annual chance of a flood event (i.e., a 500-year flood zone). Flood insurance is not required within the District. Approximately 142 lots owned by Lennar in CFD No , which is adjacent to the District are located adjacent to Gerber Creek and Elder Creek and are identified by FEMA to be within a 100- year flood zone (having 1% annual change of a flood event). Lennar has submitted an application to FEMA for a CLMR, however, a CLMR has not yet been issued. Lennar expects FEMA to issue final letters of map revision upon the completion of certain drainage improvements in such affected area to re-designate the areas as X (shaded) (within a 500-year flood zone). A portion of the drainage improvements adjacent to Gerber Creek have been constructed. The processing of plans to construct the remaining water and drainage improvements is substantially complete and all environmental permits for such improvements have been obtained. Lennar expects to construct certain drainage improvements and upon the completion thereof, Lennar and the County expect FEMA to issue final letters of map revision to re-designate such affected areas as X (shaded) (within a 500-year flood zone). See THE DISTRICT Facilities. The property within the District is not located in a Fault-Rupture Hazard Zone. Endangered Species During recent years, there has been an increase in activity at the State and federal level related to the possible listing of certain plant and animal species found in California as endangered species. An increase in the number of endangered species could limit development in areas inhabited by such endangered species. At present, the property in the District is known to contain habitat for two protected species of vernal pool crustaceans (fairy shrimp and tadpole shrimp) that are listed as protected species by the United States Fish and Wildlife Service as well as habitat for the Swainson s hawk, a species listed as protected by the California Department of Fish and Game. The United States Fish and Wildlife Service has authorized an incidental take for the fairy shrimp and tadpole shrimp; and the California Department of Fish and Game has approved a Swainson s Hawk Management Plan for the property which allows for development within the District. The Developer has taken measures to preserve the natural habitat of such endangered species within the District and does not expect their existence to have an adverse effect on the Developer s ability to complete their development as planned. 52

59 New species are proposed to be added to the State and federal protected lists on a regular basis. Any action by the State or federal governments to protect species located on or adjacent to the property in the District could negatively affect the Developer s ability to complete the development of the remaining undeveloped property. Legal Requirements Other events which may affect the value of property in the District include changes in the law or application of the law. Such changes may include, without limitation, local growth control initiatives, local utility connection moratoriums and local application of statewide tax and governmental spending limitation measures. Hazardous Substances While governmental taxes, assessments, and charges are a common claim against the value of a parcel, other less common claims may be relevant. One example is a claim with regard to a hazardous substance. In general, the owners and operators of a parcel may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as CERCLA or the Superfund Act, is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances are also similar and stringent. Under some of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of property whether or not the owner (or operator) had anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the property in the District be affected by a hazardous substance is to reduce the marketability and value of the property by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the financial and legal liability of a property owner to develop the affected parcel or other parcels, as well as the value of the property that is realizable upon a delinquency and foreclosure. The estimated appraised valuation of property in the District does not take into account the possible reduction in marketability and value of any of the property by reason of the possible liability of the owner (or operator) for the remedy of a hazardous substance condition of the parcel. While the County is not aware that the owner (or operator) of any of the property in the District has such a current liability with respect to any such property, it is possible that such liabilities do currently exist and that the County is not aware of them. Further, it is possible that liabilities may arise in the future with respect to any of the property in the District resulting from the current existence on the parcel of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the current existence on the parcel of a substance not presently classified as hazardous but which may in the future be so classified. Any of these possibilities could impact the value of a parcel that is realizable upon a delinquency. No Acceleration Provision The Bond Resolution does not contain a provision allowing for the acceleration of the 2016 Bonds in the event of a payment default or other default under the terms of the 2016 Bonds or the Bond Resolution. No Obligation To Pay Debt Service The County has no obligation to pay debt service on the 2016 Bonds in the event collections of the Special Tax are delinquent, other than from amounts, if any, on deposit in the Redemption Account or funds 53

60 derived from the tax sale or foreclosure and sale of parcels on which levies of the Special Tax are delinquent, nor is the County obligated to advance funds to pay such debt service. Loss of Tax Exemption As discussed under the caption CONCLUDING INFORMATION Tax Matters, the interest on the 2016 Bonds could become includable in gross income for federal income tax purposes retroactive to the date of issuance of the 2016 Bonds as a result of a failure of the County to comply with certain provisions of the Code or acts or omissions of the County in violation of the Code and covenants set forth in the Bond Resolution. In order to maintain the exclusion from gross income for federal income tax purposes of the interest on the 2016 Bonds, the County has covenanted in the Bond Resolution not to take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of interest on the 2016 Bonds under Section 103 of the Code. Should such an event of taxability occur, the 2016 Bonds are not subject to early redemption as a result of such event and will remain outstanding to maturity or until redeemed under the optional redemption provisions of the Bond Resolution. See the caption THE 2016 BONDS Redemption. Pending or future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the 2016 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such future legislative proposals, clarification of the Code or court decisions may also affect the market price for, or marketability of, the 2016 Bonds. Prospective purchasers of the 2016 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation. Audit of Tax-Exempt Bond Issues The Internal Revenue Service has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the 2016 Bonds will be selected for audit by the Internal Revenue Service. It is also possible that the market value of the 2016 Bonds might be affected as a result of such an audit of the 2016 Bonds (or by an audit of similar municipal obligations). Limited Secondary Market; Potential Reductions in Bond Values There can be no guarantee that there will be a secondary market for the 2016 Bonds or, if a secondary market exists, that such 2016 Bonds can be sold for any particular price. Although the County and the Developer have committed to provide certain financial and operating information on an annual basis, there can be no assurance that such information will be available to 2016 Bond Owners on a timely basis. See the caption CONCLUDING MATTERS Continuing Disclosure. The failure to provide annual financial information, if required, does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions, lack of current information, or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price. Proposition 218 An initiative measure commonly referred to as the Right to Vote on Taxes Act (the Initiative ) was approved by the voters of the State at the November 5, 1996 general election. The Initiative added Articles XIIIC and Article XIIID to the State Constitution. According to the Title and Summary of the Initiative prepared by the State Attorney General, the Initiative limits the authority of local governments to impose taxes and property-related assessments, fees and charges. The provisions of the Initiative have not yet 54

61 been interpreted by the courts, although a number of lawsuits have been filed requesting the courts to interpret various aspects of the Initiative. The Initiative could potentially impact the Special Taxes available to the County to pay the principal of and interest on the 2016 Bonds as described below. Among other things, Section 3 of Article XIII states that... the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. The Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the rate and method of apportionment of an existing special tax. However, the Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislative body determines that the reduction or termination of the special tax would not interfere with the timely retirement of that debt. On July 1, 1997, a bill was signed into law by the Governor of the State enacting Government Code Section 5854, which states that: Section 3 of Article XIIIC of the California Constitution, as adopted at the November 5, 1996, general election, shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after that date, assumes the risk of, or in any way consents to, any action by initiative measure that constitutes an impairment of contractual rights protected by Section 10 of Article I of the United States Constitution. Accordingly, although the matter is not free from doubt, it is likely that the Initiative has not conferred on the voters the power to repeal or reduce the Special Taxes if such reduction would interfere with the timely retirement of the 2016 Bonds. It may be possible, however, for voters within the District or the Board of Supervisors to reduce the Special Taxes in a manner which does not interfere with the timely repayment of the 2016 Bonds, but which does reduce the maximum amount of Special Taxes that may be levied in any year below the existing levels. Furthermore, no assurance can be given with respect to the future levy of the Special Taxes in amounts greater than the amount necessary for the timely retirement of the 2016 Bonds. Therefore, no assurance can be given with respect to the levy of Special Taxes for Expenses. The interpretation and application of the Initiative will ultimately be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainty the outcome of such determination or the timeliness of any remedy afforded by the courts. Shapiro Decision On August 1, 2014, the California Court of Appeal, Fourth Appellate District, Division One (the Court ), issued its opinion in City of San Diego v. Melvin Shapiro, et al. (D063997). The case involved a Convention Center Facilities District (the CCFD ) established by the City of San Diego. The CCFD was a financing district established under the City of San Diego s charter (the Charter ) and was intended to function much like a community facilities district established under the provisions of the Act. The CCFD was comprised of all of the real property in the entire City of San Diego. However, the special tax to be levied within the CCFD was to be levied only on properties improved with a hotel located within the CCFD. At the election to authorize such special tax, the Charter proceeding limited the electorate to owners of hotel properties and lessees of real property owned by a governmental entity on which a hotel is located. Thus, the election was an election limited to owners and lessees of properties on which the special tax would be levied, and not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was based on Section 53326(c) of the Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed district whose property would be subject to the special tax. The 55

62 Court held that the CCFD special tax election did not comply with applicable requirements of Article XIIIA, Section 4 thereof and Article XIIIC, Section 2 of the State Constitution, or with applicable provisions of the City of San Diego s Charter, because the electors in such an election were not the registered voters residing within the district. In the case of the CCFD, at the time of the election there were several hundred thousand registered voters within the CCFD (viz., all of the registered voters in the City of San Diego). In the case of the District, there were no registered voters within the District at the time of the elections to authorize the special tax levy for the District. In City of San Diego, the Court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the Court s holding does not apply to the special tax election in the District. Moreover, Section of the Act provides that any action or proceeding to attack, review, set aside, void or annul the levy of a special tax shall be commenced within 30 days after the special tax is approved by the voters. Similarly, Section of the Act provides that any action to determine the validity of bonds issued pursuant to the Act or the levy of special taxes authorized pursuant to the Act be brought within 30 days of the voters approving the issuance of such bonds or the special tax. Voters approved the special tax and the issuance of bonds for the District in compliance with all applicable requirements of the Act at the time of the amendment of the Special Tax Formula in Therefore, under the provisions of Sections and of the Act, the statute of limitations period to challenge the validity of the special tax for the District has expired. Ballot Initiatives The Initiative was adopted pursuant to measures qualified for the ballot pursuant to the State s Constitutional initiative process and the State Legislature has in the past enacted legislation which has altered the spending limitations or established minimum funding provisions for particular activities. On March 6, 1995, in the case of Rossi v. Brown, the State Supreme Court held that an initiative can repeal a tax ordinance and prohibit the imposition of further such taxes and that the exemption from the referendum requirements does not apply to initiatives. From time to time, other initiative measures could be adopted by State voters or legislation enacted by the State Legislature. The adoption of any such initiative or legislation might place limitations on the ability of the State, the County or local districts to increase revenues or appropriations or on the ability of the property owners within the District to complete the remaining proposed development. See Failure to Develop Properties. Legality CONCLUDING INFORMATION The validity of the 2016 Bonds and certain legal matters are subject to the approving opinion of Orrick, Herrington & Sutcliffe, LLP, Bond Counsel to the County ( Bond Counsel ). A complete copy of the proposed form of Bond Counsel opinion is contained in Appendix E hereto. Bond Counsel undertakes no responsibility for the accuracy, completeness, or fairness of this Official Statement. Certain legal matters will be passed upon for the County by County Counsel and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel, and for the Underwriter by its counsel, Jones Hall, A Professional Law Corporation, San Francisco, California. Tax Matters In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the 2016 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the Code ) and is exempt from State of California personal income taxes. Bond Counsel is of the further opinion 56

63 that interest on the 2016 Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. A complete copy of the proposed form of opinion of Bond Counsel is set forth in Appendix E hereto. To the extent the issue price of any maturity of the 2016 Bonds is less than the amount to be paid at maturity of such 2016 Bonds (excluding amounts stated to be interest and payable at least annually over the term of such 2016 Bonds), the difference constitutes original issue discount, the accrual of which, to the extent properly allocable to each Beneficial Owner thereof, is treated as interest on the 2016 Bonds which is excluded from gross income for federal income tax purposes and State of California personal income taxes. For this purpose, the issue price of a particular maturity of the 2016 Bonds is the first price at which a substantial amount of such maturity of the 2016 Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the 2016 Bonds accrues daily over the term to maturity of such 2016 Bonds on the basis of a constant interest rate compounded semiannually (with straightline interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such 2016 Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such 2016 Bonds. Beneficial Owners of the 2016 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of 2016 Bonds with original issue discount, including the treatment of Beneficial Owners who do not purchase such 2016 Bonds in the original offering to the public at the first price at which a substantial amount of such 2016 Bonds is sold to the public Bonds purchased, whether at original issuance or otherwise, for an amount higher than their principal amount payable at maturity (or, in some cases, at their earlier call date) ( Premium Bonds ) will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax-exempt interest received, and a Beneficial Owner s basis in a Premium Bond, will be reduced by the amount of amortizable bond premium properly allocable to such Beneficial Owner. Beneficial Owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the 2016 Bonds. The County has made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the 2016 Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the 2016 Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the 2016 Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel s attention after the date of issuance of the 2016 Bonds may adversely affect the value of, or the tax status of interest on, the 2016 Bonds. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Although Bond Counsel is of the opinion that interest on the 2016 Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the 2016 Bonds may otherwise affect a Beneficial Owner s federal, state or local tax liability. The nature and extent of these other tax consequences depends upon the particular tax status of the Beneficial Owner or the Beneficial Owner s other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences. 57

64 Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the 2016 Bonds to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. For example, the Obama Administration s budget proposals in recent years have proposed legislation that would limit the exclusion from gross income of interest on the 2016 Bonds to some extent for high-income individuals. The introduction or enactment of any such legislative proposals or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the 2016 Bonds. Prospective purchasers of the 2016 Bonds should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel is expected to express no opinion. The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel s judgment as to the proper treatment of the 2016 Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service ( IRS ) or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the County, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The County has covenanted, however, to comply with the requirements of the Code. Bond Counsel s engagement with respect to the 2016 Bonds ends with the issuance of the 2016 Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the County or the Beneficial Owners regarding the tax-exempt status of the 2016 Bonds in the event of an audit examination by the IRS. Under current procedures, parties other than the County and its appointed counsel, including the Beneficial Owners, would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the County legitimately disagrees, may not be practicable. Any action of the IRS, including but not limited to selection of the 2016 Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues may affect the market price for, or the marketability of, the 2016 Bonds, and may cause the County or the Beneficial Owners to incur significant expense. Continuing Disclosure The County has covenanted to comply with the County s Continuing Disclosure Certificate and to provide certain financial information and operating data relating to the District no later than seven months after the end of the County s fiscal year (the Annual Report ) and notices of the occurrence of certain enumerated events (the Listed Events ). The Annual Reports and notices of Listed Events are required to be filed with Municipal Securities Rulemaking Board through its Electronic Municipal Market Access (EMMA) website, or other repository authorized under the Rule. The specific nature of the information to be included in the Annual Reports and the notices of Listed Events is set forth in Appendix C. These obligations have been undertaken by the County in order to assist the Underwriter in complying with the Rule. Notwithstanding any provision of the Bond Resolution, failure of the County to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default; however, any Holder of the 2016 Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the County to comply with its obligations with respect to the Continuing Disclosure Certificate. Within the last five years, the County has been subject to prior continuing disclosure undertakings entered into pursuant to the Rule (the Prior Continuing Disclosure Undertakings ). In 2011, 2012 and 2013, the County filed certain operating information and audited financial statements between 2 to 4 days after the date required under the Prior Continuing Disclosure Undertakings. In addition, the County did not timely file at least two instances of rating changes of County obligations relating to insurer rating changes with EMMA. Other than such ratings change notices described above, the County is not aware of any events in the last five 58

65 years which may have required the filing of significant event notices under continuing disclosure undertakings entered into pursuant to the Rule that were not filed. To provide updated information with respect to the development within the District, the Developer will enter into a Continuing Disclosure Agreement of the Developer (the Developer Continuing Disclosure Agreement ) by and between the Developer and Goodwin Consulting Group, Inc., as dissemination agent, and will covenant to provide an Annual Report not later than June 15 of each year beginning June 15, 2017, and a Semiannual Report on each December 15, beginning December 15, 2016, until satisfaction of certain conditions set forth in the Developer Continuing Disclosure Agreement. The Annual Report provided by the Developer and the Semiannual Report will contain updates regarding the development within the District as outlined in Section 4 of the Developer Continuing Disclosure Agreement attached as Appendix F. In addition to its Annual Reports and Semiannual Reports, the Developer will agree to provide notices of certain events set forth in the Developer Continuing Disclosure Agreement. The Developer s Annual Report, Semiannual Reports and notices of certain events will be filed with the Municipal Securities Rulemaking Board through its EMMA website, or other repository authorized under the Rule. The Developer s obligations under the Developer Continuing Disclosure Agreement will terminate upon the earliest to occur of: (a) the legal defeasance, prior redemption or payment in full of all the 2016 Bonds, or (b) the first date on which the Developer (i) is no longer a Major Developer and (ii) has no obligations under the Developer Continuing Disclosure Agreement with respect to any property because such obligations have been assumed by one or more Major Developers or Affiliates thereof pursuant to an Assumption Agreement (as such terms are defined in the Developer Continuing Disclosure Agreement). No Litigation There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or regulatory agency, public board or body pending or threatened against the County or the District affecting their existence, or the titles of their respective officers, or seeking to restrain or to enjoin the issuance, sale or delivery of the 2016 Bonds, the application of the proceeds thereof in accordance with the Bond Resolution, or the collection or application of the Special Tax to pay the principal of and interest on the 2016 Bonds, or in any way contesting or affecting the validity or enforceability of the 2016 Bonds, the Bond Resolution, the agreement entered into between the County and the Underwriter for the sale of the 2016 Bonds (the Bond Purchase Agreement ), or any other applicable agreements or any action of the County or the District contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement or any amendment or supplement hereto, or contesting the powers of the County or the District or their authority with respect to the 2016 Bonds or any action of the County or the District contemplated by any of said documents, nor, to the knowledge of the County, is there any basis therefor. No General Obligation of the County or the District The 2016 Bonds are not general obligations of the County or the District, but are limited obligations of the County payable solely from proceeds of the Special Tax and investment income on funds held pursuant to the Bond Resolution (other than as necessary to be rebated to the United States of America pursuant to Section 148(f) of the Code and any applicable regulations promulgated pursuant thereto). Any tax for the payment of the 2016 Bonds shall be limited to the Special Tax to be collected within the jurisdiction of the District. No Ratings The County has not made and does not contemplate making application to any rating agency for the assignment of a rating of the 2016 Bonds. 59

66 Underwriting The 2016 Bonds were purchased through negotiation by Stifel, Nicolaus & Company, Incorporated (the Underwriter ) at a price of $25,421,863.13, which is equal to the principal amount of 2016 Bonds plus net original issue premium of $2,425, and less an underwriter s discount of $158, The Underwriter may change the initial public offering prices set forth on the cover page and may offer and sell the 2016 Bonds to certain dealers and others at prices lower than the public offering prices set forth on the cover page hereof. Financial Advisor Public Financial Management, Inc. is serving as Financial Advisor to the County in connection with the issuance of the 2016 Bonds. The Financial Advisor s fee for services rendered with respect to the sale of the 2016 Bonds is contingent upon the issuance and delivery of the 2016 Bonds. Public Financial Management, Inc., in its capacity as Financial Advisor, does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the 2016 Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. The Financial Advisor to the County has provided the following sentence for inclusion in this Official Statement. The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the County and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information. Miscellaneous All of the preceding summaries of the Bond Resolution, other applicable legislation, agreements and other documents are made subject to the provisions of such documents respectively, and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the County for further information in connection therewith. This Official Statement does not constitute a contract with the purchasers of the 2016 Bonds. Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. References are made herein to certain documents and reports which are brief summaries thereof which do not purport to be complete or definitive and reference is made to such documents and reports for full and complete statements of the contents thereof. Copies of such documents and reports are available for inspection at the office of the County s Municipal Services Agency. 60

67 The execution and delivery of the Official Statement by the County have been duly authorized by the Board of Supervisors of the County of Sacramento on behalf of the District. COUNTY OF SACRAMENTO By /s/ Britt Ferguson Chief Financial Officer 61

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69 APPENDIX A APPRAISAL REPORT

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71 Appraisal Report Properties within County of Sacramento Community Facilities District No , North Vineyard Station No. 1 (portion of) Sacramento, California Date of Report: March 31, 2016 Prepared For: Mr. Ben Lamera Director of Finance County of Sacramento 700 H Street Sacramento, California Prepared By: Kevin K. Ziegenmeyer, MAI Eric A. Segal, MAI Sara A. Gilbertson, Appraiser

72 March 31, 2016 Mr. Ben Lamera Director of Finance County of Sacramento 700 H Street Sacramento, California RE: Properties within County of Sacramento Community Facilities District No , North Vineyard Station No. 1 (portion of) Sacramento, California Dear Mr. Lamera: At your request and authorization, Seevers Jordan Ziegenmeyer has prepared an appraisal report for the purpose of estimating the market value (fee simple estate) of certain undeveloped properties within the boundaries of the County of Sacramento Community Facilities District No , North Vineyard Station No. 1 (the CFD ), under the assumptions and limiting conditions contained in this report. The appraisal report has been conducted in accordance with appraisal standards and guidelines found in the Uniform Standards of Professional Appraisal Practice (USPAP) and the Appraisal Standards for Land Secured Financing published by the California Debt and Investment Advisory Commission (2004). This document is an Appraisal Report, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(a) of the edition of USPAP. The appraised properties represent certain land areas within North Vineyard Station No. 1, and are identified as the Vineyard Point and Vineyard Creek (portion of) master planned communities. The appraised properties consist of 145 improved single-family residential lots and 291 unimproved single-family residential lots, as well as a 6.77-acre multifamily parcel and a 1.80-acre proposed clubhouse site. It is noted there are 657 additional improved single-family residential lots within North Vineyard Station CFD No that have vertical improvements constructed (i.e., single-family homes), as well as 48 public and quasi-public land use sites (i.e., park sites, water treatment plant site, detention basins, roadways, etc.), which are not a part of this appraisal. North Vineyard Station No. 1 is generally located within the boundaries identified as follows: west of Bradshaw Road, north of Gerber Road and south of Florin Road, within an unincorporated area of Sacramento County. We have been requested to provide a cumulative, or aggregate, value of the appraised properties for the individual ownership components of the subject, under the assumptions and conditions cited in the attached report. Primary among the assumptions is the value estimate is subject to the hypothetical condition any improvements to be financed by the County of Sacramento Community Facilities District No (Series 2), Special Tax collections are in place. 3825AthertonRoad,Suite500 Rocklin,CA95765 Phone: Fax:

73 Mr. Ben Lamera March 31, 2016 Page 2 The value estimates assume a transfer would reflect a cash transaction or terms that are considered to be equivalent to cash. The estimates are also premised on an assumed sale after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with buyer and seller each acting prudently, knowledgeably, for their own self-interest and assuming neither is under duress. The cumulative, or aggregate, value of the appraised properties in the District accounts for the impact of the Lien of the Special Tax securing the North Vineyard Station CFD No Bonds. As a result of our analysis, it is our opinion the cumulative, or aggregate, value of the fee simple interest in the appraised properties, subject to the hypothetical condition any improvements to be financed by the North Vineyard Station CFD No Special Tax collections are in place, as of January 20, 2016, in accordance with the assumptions and conditions set forth in the attached document (please refer to pages 7 through 9), is: Bulk Market Value - Lennar Corporation (Master Developer) $ 33,600,000 Aggregate Value of Completed Homes without an Assessed Value* $ 20,010,000 Cumulative (Aggregate) Appraised Value of the District $ 53,610,000 Cumulative (Aggregate) Assessed Value of the District $ 178,281,801 Cumulative (Aggregate) Value of the District $ 231,891,801 * The estimate of aggregate value above represents a not-less-than value due to the fact we were requested to provide a market value of the smallest floor plan on each single-family residential lot improved with a completed home without an assessed value assigned. Please note the aggregate value noted above is not the market value of the appraised properties in bulk. As defined by The Dictionary of Real Estate Appraisal, an aggregate value is the total of multiple market value conclusions. For purposes of this report, market value is estimated by ownership. The estimates of market value account for the impact of the Lien of the Special Taxes securing the Bonds. The estimates of market value provided assume a transfer would reflect a cash transaction or terms considered to be equivalent to cash. The estimates are also premised on an assumed sale after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with buyer and seller acting prudently, knowledgeably, for their own self-interest and assuming neither is under duress. We hereby certify the properties have been inspected and have impartially considered all data collected in the investigation. Further, we have no past, present or anticipated future interest in the properties. This letter must remain attached to the report, which contains 133 pages, plus related exhibits and Appendix, in order for the value opinions set forth herein to be considered valid.

74 Mr. Ben Lamera March 31, 2016 Page 3 The appraised properties do not have any significant natural, cultural, recreational or scientific value. The appraisers certify this appraisal assignment was not based on a requested minimum valuation, a specific valuation or the approval of a loan. This appraisal has been performed in accordance with the requirements of USPAP, the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute and the Appraisal Standards for Land Secured Financing, published by the California Debt and Investment Advisory Commission (2004). Additionally, this valuation is offered in accordance with the limiting conditions, assumptions and significant factors set forth in this report. Thank you for the opportunity to work with your office on this assignment. Respectfully submitted, Kevin K. Ziegenmeyer, MAI Eric A. Segal, MAI State Certification No.: AG State Certification No.: AG Expiration Date: June 4, 2017 Expires: February 18, 2017 Sara A. Gilbertson, Appraiser State Certification No.: Expires: May 29, 2016 /dtn

75 TABLE OF CONTENTS Transmittal Letter Summary of Important Facts and Conclusions 1 Appraisal Conditions Client, Intended User and Intended Use 4 Appraisal Report Format 4 Type and Definition of Value 4 Property Rights Appraised 5 Dates of Inspection, Value and Report 5 Scope of Work 5 Extraordinary Assumptions and Hypothetical Conditions 7 General Assumptions and Limiting Conditions 8 Certification Statements 10 Subject Property Property Ownership and History 13 Property Legal Data 20 Site Description 34 Subject Photographs 39 Market Analysis Sacramento County 40 Neighborhood 47 Residential Market 53 Highest and Best Use 67 Valuation Approaches to Value 69 Bulk Market Value Lennar Corporation (Master Developer) 72 Market Valuation Floor Plans 115 Summary and Conclusion 132 Exposure Time and Marketing Time 133 Appendix A Tax Roll B Preliminary Title Report C Development Costs D Estimated List of Facilities, Timing and Use of Funds (Bond Proceeds) E Glossary of Terms F Qualifications of Appraisers

76 SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Property: Location: Assessor Parcel Numbers / Owners of Record: The appraised properties comprise the improved and unimproved residential lots within the boundaries of the County of Sacramento Community Facilities District No (North Vineyard Station No. 1) not improved with a single-family residence, as well as a 6.77-acre multifamily parcel and 1.80-acre proposed clubhouse site. In addition, those residential lots with completed single-family homes without an assessed value for vertical improvements were included in the scope of this appraisal assignment. In general, the appraised properties are contained within the boundaries identified as follows: west of Bradshaw Road, north of Gerber Road and south of Florin Road, within an unincorporated area of Sacramento County, California The appraised properties consist of 145 improved singlefamily residential lots and 291 unimproved single-family residential lots, as well as a 6.77-acre multifamily parcel and a 1.80-acre proposed clubhouse site, which are identified within the Appendix to this report (see Tax Roll). It is noted there are 657 additional parcels within North Vineyard Station CFD No that have vertical improvements constructed (i.e., single-family homes), as well as 48 public and quasi-public land use sites (i.e., park sites, water treatment plant site, detention basins, roadways, etc.), which are not a part of this appraisal. The bulk of the parcels without completed single-family homes are owned by Lennar Corporation, while most (if not all) of the residential lots with completed single-family homes without an assessed value for vertical improvements are owned by individual homeowners. Zoning: Flood Zone: The various land use components representing the appraised properties are zoned and designated for single-family, medium-density and multifamily residential uses. For a complete description of the underlying zoning ordinances, please refer to the respective Property Legal Data section of this report. Flood Zone X Areas outside of the 100 and 500-year floodplains. Flood insurance is not required. Earthquake Zone: Zone 3 Moderate seismic activity (not located in a Fault- Rupture Hazard Zone) Seevers Jordan Ziegenmeyer 1

77 Entitlements: Current entitlements for the appraised properties are summarized in the table below. Tentative map lot counts were provided by Sacramento County. CFD (North Vineyard Station No. 1) Description Acres No. Homes/Lots Improved Single-Family Lots Completed Single-Family Homes* 67 Partially Improved Single-Family Homes (Under Construction) 20 Improved Single-Family Lots 58 Subtotal 145 Unimproved Single-Family Lots Unit 1 / Village 1 12 Unit Unit 5 / Village 8 (portion of) 72 Unit 6 90 Subtotal 291 Total Single-Family Component 436 Multifamily Parcel 6.77 n/a Total Multifamily Component 6.77 Proposed Clubhouse Site (portion of APN ) 1.80 n/a Total Clubhouse Component 1.80 * Any completed single-family home with an assessed value for improvements is not considered in this appraisal. It should be noted that some properties without vertical improvements are excluded from the table above. These properties include those not subject to the Lien of the Special Tax securing the Bonds (public and quasi-public land use sites). Lot Sizing: Highest and Best Use: Property Rights Appraised: The typical lot size of the subjects single-family lots range from 4,725 to 5,250 square feet. Near term single- and multi-family residential development Fee simple estate Date of Inspection: January 20, 2016 Effective Date of Value: January 20, 2016 Date of Report: March 31, 2016 Exposure Time: 12 months Seevers Jordan Ziegenmeyer 2

78 Conclusion of Cumulative, or Aggregate, Value: Bulk Market Value - Lennar Corporation (Master Developer) $ 33,600,000 Aggregate Value of Completed Homes without an Assessed Value* $ 20,010,000 Cumulative (Aggregate) Appraised Value of the District $ 53,610,000 Cumulative (Aggregate) Assessed Value of the District $ 178,281,801 Cumulative (Aggregate) Value of the District $ 231,891,801 * The estimate of aggregate value above represents a not-less-than value due to the fact we were requested to provide a market value of the smallest floor plan on each single-family residential lot improved with a completed home without an assessed value assigned. The market value conclusions noted above are subject to the Extraordinary Assumptions, Hypothetical Conditions, General Assumptions and Limiting Conditions referenced on pages 7 through 9 of this report. Note: The estimate of cumulative, or aggregate, value of the appraised properties comprising a portion of the County of Sacramento CFD No (North Vineyard Station No. 1) is subject to a hypothetical condition. A hypothetical condition is defined by USPAP as a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of the analysis. The hypothetical condition assumes certain infrastructure improvements to be financed by the County of Sacramento CFD No Special Tax collections are in place and available for use. Seevers Jordan Ziegenmeyer 3

79 CLIENT, INTENDED USER AND INTENDED USE The client and intended user of this appraisal report is the County of Sacramento. The appraisal report is intended for use in bond underwriting, and will be included in the official statement used to market the bonds. APPRAISAL REPORT FORMAT This document is an Appraisal Report, intended to comply with the reporting requirements set forth under Standards Rule 2-2(a) of the edition of the Uniform Standards of Professional Appraisal Practice (USPAP). TYPE AND DEFINITION OF VALUE The purpose of this appraisal is to estimate the market value (fee simple estate), by ownership, and the cumulative, or aggregate, value of the appraised properties comprising a portion of the County of Sacramento Community Facilities District (CFD) No (North Vineyard Station No. 1), subject to the hypothetical condition any improvements to be financed by the CFD No (Series 2) Special Tax collections are in place. Market value and aggregate value are defined as follows: Market Value: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) Buyer and seller are typically motivated; (2) Both parties are well informed or well advised, and acting in what they consider their own best interests; (3) A reasonable time is allowed for exposure in the open market; (4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. 1 1 Code of Federal Regulations, Title 12, Section (55 Federal Register 34696, Aug. 24, 1990; as amended at 57 Federal Register 12202, Apr. 9, 1992; 59 Federal Register 29499, June 7, 1994). Seevers Jordan Ziegenmeyer 4

80 Aggregate Value: The sum of the separate and distinct market value opinions for each of the units in a condominium, subdivision development, or portfolio of properties, as of the date of valuation. The aggregate of retail values does not represent the value of all the units as though sold together in a single transaction; it is simply the total of the individual market value conclusions 2 PROPERTY RIGHTS APPRAISED The market values estimated herein are for the fee simple estate, defined as follows: Fee Simple Estate: absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. 3 DATES OF INSPECTION, VALUE AND REPORT An inspection of the appraised properties was completed on January 20, 2016, which represents the effective date of market value. This Appraisal Report was completed and assembled on March 31, SCOPE OF WORK This Appraisal Report has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP). This analysis is intended to be an appraisal assignment, as defined by USPAP; the intention is the appraisal service be performed in such a manner that the result of the analysis, opinions, or conclusion be that of a disinterested third party. Several legal and physical aspects of the appraised properties were researched and documented. A physical inspection of the properties was completed and serves as the basis for the site description contained in this report. Interviews were conducted with Messrs. Larry Gualco and Jack Sevey, representing Lennar Corporation (master developer), who provided project maps, development costs and a status update on the overall project. Documentation identifying the subject parcels by Assessor s parcel number (APN) was provided by Sacramento County for use in the appraisal. This documentation is included within the Appendix to this report. The sales history was verified by consulting public records. The subjects zoning and entitlement information, earthquake zones, flood zones, utilities and tax information were obtained from the respective agencies. 2 The Dictionary of Real Estate Appraisal, 6 th ed. (Chicago: Appraisal Institute, 2015), 6. 3 The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015), 90. Seevers Jordan Ziegenmeyer 5

81 Data relating to the subjects neighborhood and surrounding market area were analyzed and documented. This information was obtained through personal inspections of portions of the neighborhood and market area; newspaper articles; real estate conferences; and interviews with various market participants, including property owners, property managers, land brokers, developers and local government agencies. In this appraisal we determined the highest and best use of the appraised properties as though vacant based on the four standard tests (legal permissibility, physical possibility, financial feasibility and maximum productivity). As will be shown in the Highest and Best Use Analysis section, the highest and best use of the subject property is for near term single-family residential development (production homes), with an interim hold for development of the subject s multifamily parcel. We have been requested to provide estimates of market value of the appraised properties. The sales comparison approach to value was used to determine the market value of each developable land use component comprising the appraised properties (production-oriented residential lots). The data set and other market indicators was utilized to establish the incremental value difference between each of the lot groupings larger and/or smaller than the typical lot size used for analysis. The sales comparison approach was also utilized to determine the value of the subjects multifamily land and clubhouse component. A discounted cash flow analysis was relied upon in the valuation of the remaining land held by the master developer. The cumulative, or aggregate, value of the appraised properties represents the sum of the value estimates concluded for each ownership interest, which is not equivalent to the market value of the District as a whole. This appraisal report has been conducted in accordance with appraisal standards and guidelines found in the Uniform Standards of Professional Appraisal Practice (USPAP) and the Appraisal Standards for Land Secured Financing published by the California Debt and Investment Advisory Commission (2004). The individuals involved in the preparation of this appraisal include Kevin K. Ziegenmeyer and Eric A. Segal, MAIs, and Sara A. Gilbertson, Appraiser. Mr. Segal and Ms. Gilbertson assisted in 1) inspecting the appraised properties, 2) reviewing the subjects information provided by the master developer, 3) the collection and confirmation of market data, 4) the analysis of the market data and 5) preparing the draft report. Mr. Ziegenmeyer 1) inspected the appraised properties, 2) reviewed the subjects information provided by the owner/developer, 3) reviewed Mr. Segal and Ms. Gilbertson s research, 4) provided professional input and direction, 5) made any necessary revisions and/or amplifications to the draft report and 6) completed the final report. Seevers Jordan Ziegenmeyer 6

82 EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS It is noted the use of an extraordinary assumption or hypothetical condition may have affected the results of the appraisal. Extraordinary Assumptions 1. It is assumed all remaining infrastructure improvements, including those to be financed by the North Vineyard Station CFD No Bonds and those to be financed by the master developer, will be properly installed and available for use. 2. It is presumed there are no adverse soil conditions, toxic substances or other environmental hazards that may interfere or inhibit development of the appraised properties. If, at some future date, items are discovered that are determined to have a detrimental impact on value, the appraiser reserves the right to amend the opinion of value stated herein. 3. The aggregate value presented herein is not the market value in bulk of the entire subject property. As defined by The Dictionary of Real Estate Appraisal, an aggregate value is the total of multiple market value conclusions. For purpose of this report, market value has been estimated by the individual ownerships only. Hypothetical Conditions 1. The estimate of cumulative, or aggregate, value of the appraised properties comprising a portion of the County of Sacramento CFD No (North Vineyard Station No. 1) is subject to a hypothetical condition. A hypothetical condition is defined by USPAP as a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of the analysis. The hypothetical condition assumes certain infrastructure improvements to be financed by the County of Sacramento CFD No Special Tax collections are in place and available for use. Seevers Jordan Ziegenmeyer 7

83 GENERAL ASSUMPTIONS AND LIMITING CONDITIONS 1. No responsibility is assumed for the legal description provided or for matters pertaining to legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated. 2. No responsibility is assumed for matters of law or legal interpretation. 3. The property is appraised free and clear of any or all liens or encumbrances unless otherwise stated. 4. The information and data furnished by others in preparation of this report is believed to be reliable, but no warranty is given for its accuracy. 5. It is assumed there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for obtaining the engineering studies that may be required to discover them. 6. It is assumed the property is in full compliance with all applicable federal, state, and local environmental regulations and laws unless the lack of compliance is stated, described, and considered in the appraisal report. 7. It is assumed the property conforms to all applicable zoning and use regulations and restrictions unless nonconformity has been identified, described and considered in the appraisal report. 8. It is assumed all required licenses, certificates of occupancy, consents, and other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 9. It is assumed the use of the land and improvements is confined within the boundaries or property lines of the property described and there is no encroachment or trespass unless noted in the report. 10. Unless otherwise stated in this report, the existence of hazardous materials, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, ureaformaldehyde foam insulation and other potentially hazardous materials may affect the value of the property. The value estimated is predicated on the assumption there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for such conditions or for any expertise or engineering knowledge required to discover them. The intended user of this report is urged to retain an expert in this field, if desired. 11. The Americans with Disabilities Act (ADA) became effective January 26, I (we) have not made a specific survey or analysis of this property to determine whether the physical aspects of the improvements meet the ADA accessibility guidelines. Since compliance matches each owner s financial ability with the cost-to cure the property s potential physical characteristics, Seevers Jordan Ziegenmeyer 8

84 the real estate appraiser cannot comment on compliance with ADA. A brief summary of the subjects physical aspects is included in this report. It in no way suggests ADA compliance by the current owner. Given that compliance can change with each owner s financial ability to cure non-accessibility, the value of the subject does not consider possible non-compliance. Specific study of both the owner s financial ability and the cost-to-cure any deficiencies would be needed for the Department of Justice to determine compliance. 12. The appraisal is to be considered in its entirety and use of only a portion thereof will render the appraisal invalid. 13. Possession of this report or a copy thereof does not carry with it the right of publication nor may it be used for any purpose by anyone other than the client without the previous written consent of Seevers Jordan Ziegenmeyer. 14. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news, sales, or any other media without the prior written consent and approval of Seevers Jordan Ziegenmeyer. Seevers Jordan Ziegenmeyer authorizes the reproduction of this document to aid in bond underwriting and in the issuance of Bonds. 15. Acceptance and/or use of the appraisal report constitutes acceptance of all assumptions and limiting conditions stated in this report. 16. An inspection of the appraised properties revealed no apparent adverse easements, encroachments or other conditions, which currently impact the subject. The appraiser is not a surveyor nor qualified to determine the exact location of easements. It is assumed typical easements do not have an impact on the opinion (s) of value as provided in this report. If, at some future date, these easements are determined to have a detrimental impact on value, the appraiser reserves the right to amend the opinion (s) of value. 17. This appraisal report is prepared for the exclusive use of the appraiser s client. No third parties are authorized to rely upon this report without the express consent of the appraiser. Seevers Jordan Ziegenmeyer authorizes the reproduction of this document to aid in bond underwriting and in the issuance of Bonds. Seevers Jordan Ziegenmeyer 9

85 CERTIFICATION STATEMENT I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. I have made an inspection of the properties that are the subject of this report. Eric A. Segal and Sara A. Gilbertson, Appraisers, provided significant real property appraisal assistance to the person signing this certification. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. I certify that my State of California real estate appraiser license has never been revoked, suspended, cancelled, or restricted. I have the knowledge and experience to complete this appraisal assignment. Please see the Qualifications of Appraiser(s) portion of the Appendix to this report for additional information. As of the date of this report, I have completed the continuing education program for Designated Members of the Appraisal Institute. March 31, 2016 Kevin K. Ziegenmeyer, MAI DATE State Certification No.: AG (Expires June 4, 2017) Seevers Jordan Ziegenmeyer 10

86 CERTIFICATION STATEMENT I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. I have made an inspection of the properties that are the subject of this report. Sara A. Gilbertson, Appraiser, provided significant real property appraisal assistance to the person signing this certification. Kevin Ziegenmeyer, MAI reviewed this report. I certify that my State of California real estate appraiser license has never been revoked, suspended, cancelled, or restricted. I have the knowledge and experience to complete this appraisal assignment. Please see the Qualifications of Appraiser(s) portion of the Appendix to this report for additional information. As of the date of this report, I have completed the continuing education program for Designated Members of the Appraisal Institute. Eric A. Segal, MAI State Certification No.: AG (February 18, 2017) March 31, 2016 DATE Seevers Jordan Ziegenmeyer 11

87 CERTIFICATION STATEMENT I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. I have made an inspection of the property that is the subject of this report. Kevin Ziegenmeyer and Eric Segal, MAIs, reviewed this report. I certify that my State of California real estate appraiser license has never been revoked, suspended, cancelled, or restricted. I have the knowledge and experience to complete this appraisal assignment. Please see the Qualifications of Appraiser(s) portion of the Addenda to this report for additional information. Sara A. Gilbertson, Appraiser State Certification No.: (May 29, 2016) March 31, 2016 DATE Seevers Jordan Ziegenmeyer 12

88 PROPERTY OWNERSHIP AND HISTORY North Vineyard Station Specific Plan The appraised properties represent a portion of the North Vineyard Station Specific Plan, which is projected for the development of 1,595 acres and is generally bound by Elder Creek to the west, Florin Road to the north, Gerber Road to the south and Vineyard Road to the east. The Specific Plan was initiated by the Sacramento County Board of Supervisors on January 19, After several years of technical studies, environmental impact reviews and public hearings, the North Vineyard Station Specific Plan was officially approved on November 4, The Specific Plan area will likely be developed over a 10 to 20 year period and will ultimately represent a cohesive network of residential, commercial, recreational and educational development. At the time of approval, the North Vineyard Station Specific Plan was primarily undeveloped, with existing uses consisting primarily of rural residential and agriculture properties. However, the area will be transitioned into a higher density residential area with supporting commercial areas as approved under the guidelines of the Specific Plan. Proposed residential build out includes a total of 6,050 residential units, with 4,622 low-density units, 309 medium-density units, and 1,119 multifamily units. These residential areas will be served by 78 acres of parks, 22 acres of schools and 39 acres of retail and business uses. The parks will be dispersed throughout the Specific Plan area and two schools are also planned. Retail and business development will be situated along Bradshaw Road, with the largest concentration of commercial properties located at the intersection with Florin Road. A network of pedestrian and bicycle pathways, numerous interior streets and major thoroughfares and a multiple acre regional transit site will provide access within the North Vineyard Station Specific Plan. Existing streets, such as Florin Road, Bradshaw Road and Gerber Road, will be upgraded or extended to accommodate the future growth within the Specific Plan. The appraised properties represent portions of the North Vineyard Station Specific Plan and are identified as Vineyard Point and Vineyard Creek, respectively. A discussion of the Vineyard Point and Vineyard Creek developments begins below. Vineyard Point At the time of inspection, the Vineyard Point master planned community was completely built-out, with 710 single-family and medium-density residential lots. The western portion of the community is devoted to public uses, including a school, park, water tank site and a detention basin. A map of this community is displayed on the following page (note this is a map of the anticipated layout of the community and is slightly different, i.e. reflecting 725 total units as opposed to the 710 that exists). In addition, Vineyard Point included 7.0 acres of multifamily residential land (MFR 12-22). The multifamily project on this site was constructed in 2008 and includes 179 affordable housing units. Seevers Jordan Ziegenmeyer 13

89 Seevers Jordan Ziegenmeyer 14

90 It is noted Village F, the small lot residential village, on the far east side of Vineyard Point is age restricted (55+). Since some of the lots within Vineyard Point are improved with a single-family home without an assessed value, we will be estimating market value for these lots. In the valuation section, we will estimate the market value of the smallest respective floor plan (1,268 square feet of living area for the standard sized residential lot in Vineyard Point and 996 square feet of living area for the age restricted community Destinations at Vineyard Point) for those lots with completed single-family homes that do not have an assessed value for the vertical improvements. Vineyard Creek Station No. 1 In addition to single-family residences, Vineyard Creek Station No. 1 is entitled for 7.0 acres of multifamily residential land (MFR 12-22), 16.6 acres of transitional land, a park space, landscape corridors and open space areas. As proposed, this community will include varying densities of single-family residential development and have multiple parks and recreational areas available just to the west. It was reported the multifamily residential component would likely be a condominium project with a density of approximately 18 units per acre. A copy of the anticipated layout of Vineyard Creek is displayed on the next page. Vineyard Creek Station No. 1 has been highlighted in green. For the reader s reference, Vineyard Creek Station No. 2 is located to the immediate east and south of Station No. 1. Seevers Jordan Ziegenmeyer 15

91 Seevers Jordan Ziegenmeyer 16

92 Appraised Property Description The appraised properties represent a portion of the County of Sacramento CFD No (North Vineyard Station No. 1), within the Vineyard Point and Vineyard Creek master planned communities. A summary of the appraised properties within Vineyard Point and Vineyard Creek are provided below. It is noted the public/quasi-public land areas within the District will not be encumbered by special taxes; thus, these sites will be excluded from this analysis. The following tables detail the various land use components comprising the appraised properties. * VINEYARD POINT Description Acres No. Homes/Lots Improved Single-Family Lots Completed Single-Family Homes* n/a 53 Total n/a 53 Any completed single-family home with an assessed value for improvements is not considered in this appraisal. At the time of inspection, all of the lots within Vineyard Point were improved residential lots with completed vertical improvements. Further, the majority of these competed single-family homes have an assessed value for the vertical improvements (i.e., single family homes). As such, these lots are not a part of this appraisal, as is the same for the 48 public and quasi-public land use sites (i.e., park sites, water treatment plant site, detention basins, roadways, etc.). Seevers Jordan Ziegenmeyer 17

93 VINEYARD CREEK Description Acres No. Homes/Lots Improved Single-Family Lots Unit 1 / Village 1 Completed Single-Family Homes* 14 Partially Improved Single-Family Homes (Under Construction) 20 Improved Single-Family Lots 58 Subtotal 92 Unimproved Single-Family Lots Unit 1 / Village 1 12 Unit Unit 5 / Village 8 (portion of) 72 Unit 6 90 Subtotal 291 Total Single-Family Component 383 Multifamily Parcel 6.77 n/a Total Multifamily Component 6.77 Proposed Clubhouse Site (portion of APN ) 1.80 n/a Total Clubhouse Component 1.80 * Any completed single-family home with an assessed value for improvements is not considered in this appraisal. At the time of inspection, with the exception of Unit 1/Village 1, Vineyard Creek Station No. 1 consists of unimproved land. Unit 1/Village 1 was representative of improved single-family residential lots (with the exception of 12 lots along Wild Lilac Circle were unimproved). Construction of the vertical improvements in Unit 1/Village 1 was in progress as of the date of inspection. With the exception of 14 completed single-family homes (none of which have been assigned an assessed value; thus, they are included in the scope of our analysis herein), the 20 lots under construction had no significant amount of construction completed to contribute any vertical improvement value to these lots. The remaining units/villages are tentatively mapped for 117, 72 and 90 single-family residential lots, Unit 4, Unit 5/Village 8 (portion of), and Unit 6, respectively. The appraised properties are situated west of Bradshaw Road, north of Gerber Road and south of Florin Road, within an unincorporated area of Sacramento County, California. Land uses in the subjects immediate area are currently devoted primarily to rural residential uses, with some industrial development and supporting commercial development. With the development of North Vineyard Station and neighboring Vineyard Springs and Florin-Vineyard Special Plan areas, there are a variety of land uses, including single and multifamily residential, commercial and recreational uses, that will be incorporated into the area in the near to mid-term. Seevers Jordan Ziegenmeyer 18

94 Regarding the sales history of the appraised properties, the majority (if not all) of the appraised properties in Vineyard Point have transferred to individual homeowners in arm s length transactions during the previous three-year period. Further, some of these individual homes may be currently being markets for resale. To the best of our knowledge, most of the appraised properties in Vineyard Creek have not been involved in any arm s length transactions during the previous three-year period and are vested with Lennar Homes of California, Inc., while the individual finished (improved) single-family residential homes completed have transferred to individual homeowners in arm s length transactions and those under construction in Unit 1/Village 1 maybe currently being marketed for sale. Strengths, Weaknesses, Opportunities, Threats Strengths: Appeal to both first time and move-up buyers Good condition of surrounding homes and immediate path of growth Good transportation linkages with proximity to State Highway 99 and U.S. Highway 50 The housing market is in a state of expansion Weaknesses: Backbone infrastructure, in-tract and site development is not 100% complete Opportunities: Strengthening residential sector may be a signal the local economy is entering an expansionary cycle Threats: Macroeconomic factors, and the possibility the economy remains stagnant and the residential sector loses steam Unforeseen delays Seevers Jordan Ziegenmeyer 19

95 PROPERTY LEGAL DATA Assessor s Parcel Number(s) The appraised properties consist of 145 improved single-family residential lots and 291 unimproved single-family residential lots, as well as a 6.77-acre multifamily parcel and a 1.80-acre proposed clubhouse site, which are identified within the 2015/16 Tax Roll appended hereto. It is noted there are 657 additional parcels within North Vineyard Station CFD No that have vertical improvements constructed (i.e., single-family homes), as well as 48 public and quasi-public land use sites (i.e., park sites, water treatment plant site, detention basins, roadways, etc.), which are not a part of this appraisal. Location In general, the appraised properties are contained within the boundaries identified as follows: west of Bradshaw Road, north of Gerber Road and south of Florin Road, within an unincorporated area of Sacramento County, California. Owner(s) of Record The bulk of the parcels without completed single-family homes are owned by Lennar Corporation, while most (if not all) of the residential lots with completed single-family homes without an assessed value for vertical improvements are owned by individual homeowners. Legal Description A complete legal description of the subject property is contained within the preliminary title report, a copy of which is located in the Appendix to this report. Assessment and Tax Information Ad Valorem Taxes The property tax system in California was amended in 1978 by Article XIII to the State Constitution, commonly referred to as Proposition 13. It provides for a limitation on property taxes and for a procedure to establish the current taxable value of real property by reference to a base year value, which is then modified annually to reflect inflation (if any). Annual inflationary increases cannot exceed 2% per year. The base year was set at or any year thereafter in which the property is substantially improved or changes ownership. When either of these two conditions occurs, the Seevers Jordan Ziegenmeyer 20

96 property is to be re-appraised at market value, which becomes the new base year assessed value. Proposition 13 also limits the maximum tax rate to 1% of the value of the property, exclusive of bonds and supplemental assessments. Bonded indebtedness approved prior to 1978, and any bonds subsequently approved by a two-thirds vote of the political jurisdiction in which the property is located, can be added to the 1% tax rate. The existing ad valorem taxes are of nominal consequence in this appraisal, primarily due to the fact these taxes will be adjusted substantially as the remaining infrastructure and property improvements are completed and in consideration of the definition of market value employed in this appraisal, which assumes a sale of the appraised properties. According to the Sacramento County Treasurer- Tax Collector s Office, the subject parcels have a cumulative annual tax rate of % based on assessed value. Special Taxes and Assessments As referenced, the appraised properties are located within the boundaries of County of Sacramento CFD No (North Vineyard Station No. 1). The District includes single-family and multifamily residential land use components, and undeveloped parcels. Each of these land uses are encumbered by Bonds associated with the CFD. The financing provided through the North Vineyard Station CFD No Bond (Series 2) issuance will fund certain portions of the public improvements. These improvements include but are not limited to roadway and intersections improvements to Waterman Road, Bradshaw Road and Florin Road, as well as potable water system at Waterman Road. A copy of the County of Sacramento CFD No (North Vineyard Station No. 1) Fiscal Year Special Tax Revenue is provided on the next page. Seevers Jordan Ziegenmeyer 21

97 Conditions of Title A preliminary title report, prepared by North American Title Company and dated August 28, 2014, was provided for use in this appraisal and is included in the Appendix to the report. While the appraiser has reviewed the conditions of title and has determined no adverse impact on value, the appraiser assumes no negative title restrictions have been recorded since the date of the preliminary title report. The appraiser accepts no responsibility for matters pertaining to title. Seevers Jordan Ziegenmeyer 22

98 Zoning According to the County of Sacramento Planning Department, the subject parcels are currently zoned for single-family, medium-density and multifamily residential development. A description of each of the allowable land use designations is presented in the following table. The information was obtained from the County of Sacramento Planning Department and the North Vineyard Station Specific Plan text. It is noted the County zoning designations contain numbers that indicate the maximum number of dwelling units allowed per acre of land. For example, the RD-3 zone allows for a maximum of three dwelling units per acre. Specific Plan Designation SFR 3-5 SFR 4-7 MDR 7-12 MFR Description Single-family residential: 3-5 units per acre Single-family residential: 4-7 units per acre Medium-density single-family residential: 7-12 units per acre Multifamily residential: units per acre County Zoning Designation RD-3, RD-4, RD-5 RD-4, RD-5, RD-6, RD-7 RD-7, RD-10 RD-15, RD-20, RD-25 According to the County of Sacramento Zoning Code, The purpose of the residential land uses zones is as follows: The Residential Land Use Zones established in this Chapter are designed to promote and protect the public health, safety, and general welfare. The Board of Supervisors in establishing these zones finds that these zones with the uses and regulations provided in this Code are consistent and compatible with the objectives, policies, general land uses and programs specified in the Sacramento County General Plan; and are adopted for the following purposes: (a) To provide sufficient space in appropriate locations for residential development to meet the housing needs of the County's present and expected future population with due allowance for the need for a choice of sites. (b) To protect residential areas against fire, explosions, toxic and noxious matter, and other hazards, and against offensive noise, odorous matter, glare, and other objectionable influences. (c) To protect residential areas, as far as possible, against heavy and through traffic. (d) To protect residential areas against congestion, by regulating the density of population and the bulk of buildings in relation to the land around them and to one another, and by providing for off-street parking spaces; to require the provisions of open space in residential areas wherever practicable; and thereby to provide a more desirable environment for urban living in a metropolitan area. Seevers Jordan Ziegenmeyer 23

99 Entitlements (e) To provide for access of light and air and for privacy, by controls over the spacing and height of buildings and other structures. (f) To provide appropriate space for those educational, religious, recreational, health, and similar facilities which serve the needs of the nearby residents, which generally perform their own activities more effectively in a residential environment, and which do not create objectionable influences. (g) To encourage the development of more attractive and economic building forms. (h) To promote the most desirable use of land and direction of building development in accord with the General Plan; to promote stability of residential development so as to protect the character of a district and its peculiar suitability for particular uses; to conserve the values of land and buildings; and to protect the County's tax revenues. (i) To provide for the parking and storage of major recreational equipment within designated open spaces. (j) To provide for State authorized, certified or licensed family care homes, foster homes or group homes as a residential use of property. Current entitlements for the subject property are summarized in the table on the following page. Tentative map lot counts were provided by Sacramento County. Seevers Jordan Ziegenmeyer 24

100 CFD (North Vineyard Station No. 1) Description Acres No. Homes/Lots Improved Single-Family Lots Completed Single-Family Homes* 67 Partially Improved Single-Family Homes (Under Construction) 20 Improved Single-Family Lots 58 Subtotal 145 Unimproved Single-Family Lots Unit 1 / Village 1 12 Unit Unit 5 / Village 8 (portion of) 72 Unit 6 90 Subtotal 291 Total Single-Family Component 436 Multifamily Parcel 6.77 n/a Total Multifamily Component 6.77 Proposed Clubhouse Site (portion of APN ) 1.80 n/a Total Clubhouse Component 1.80 * Any completed single-family home with an assessed value for improvements is not considered in this appraisal. It should be noted that some properties without vertical improvements are excluded from the table above. These properties include those not subject to the Lien of the Special Tax securing the Bonds (public and quasi-public land use sites). Flood Zone Source: First American Flood Data Services Flood Zone: Zone X Areas outside the 100-year and 500-year floodplains Map Panel: 06067C-0326H and -0327H Panel Date: August 16, 2012 Flood Insurance: Flood insurance is not required. Seevers Jordan Ziegenmeyer 25

101 There are several areas throughout the CFD that are in various flood zones with some chance of flooding; however, it has been mapped in such a way that the areas inside the 100-year floodplain will be situated above open spaces, roads and parking areas upon completion of all site development and are considered to have nominal, if any, adverse impact on the subject property. Earthquake Zone According to the Seismic Safety Commission, the appraised properties are located within Zone 3, which is considered to be the lowest risk zone in California. There are only two zones in California: Zone 4, which is assigned to areas near major faults; and Zone 3, which is assigned to all other areas of more moderate seismic activity. In addition, the subject is not located in a Fault-Rupture Hazard Zone (formerly referred to as an Alquist-Priolo Special Study Zone), as defined by Special Publication 42 (revised January 1994) of the California Department of Conservation, Division of Mines and Geology. Easements An inspection of the subject property revealed no apparent adverse easements, encroachments or other conditions that currently impact the subject property. According to the preliminary title report provided for this appraisal (see Appendix), the subject contains easements for roadways, public utilities and ingress/egress. However, these easements are typical for the area and are not considered to adversely affect the value or marketability of the subject property. The appraiser is not a surveyor nor qualified to determine the exact location of any easements. It is assumed any easements do not have an impact on the opinion(s) of value set forth in this report. If, at some future date, any easements are determined to have a detrimental impact on value, the appraiser reserves the right to amend the opinion(s) of value contained herein. It is worth noting there are overhead power lines throughout the CFD; however, it has been mapped in such a way that the power lines are situated above open spaces, roads and parking areas upon completion of all site development. Thus, the power lines are considered to have nominal, if any, adverse impact on the appraised properties. Assessor s Parcel Maps Assessor s parcel maps encompassing the North Vineyard Station No. 1 CFD No are included on the following pages. Note the parcels subject to this appraisal report ( appraised properties ) are highlighted in orange/yellow; those highlighted in blue are within the District but are not subjects of this appraisal report as they have an assessed value assigned for their vertical improvements (i.e., single family homes) and/or they are public and quasi-public land use sites (i.e., park sites, water treatment plant site, detention basins, roadways, etc.). Seevers Jordan Ziegenmeyer 26

102 A subdivision map has been recorded for this parcel and was provided by the County Planning Department, which have been provided at the end of this section. Note the maps provided by the County show lot numbers as opposed to their recorded APNs. Seevers Jordan Ziegenmeyer 27

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107 Seevers Jordan Ziegenmeyer 32

108 Seevers Jordan Ziegenmeyer 33

109 SITE DESCRIPTION The appraised properties represent a portion of the County of Sacramento CFD No (North Vineyard Station No. 1). The appraised properties consist of 145 improved single-family residential lots and 291 unimproved single-family residential lots, as well as a 6.77-acre multifamily parcel and a proposed 1.80-acre clubhouse site. It is noted there are 657 additional parcels within North Vineyard Station CFD No that have vertical improvements constructed (i.e., single-family homes), as well as 48 public and quasi-public land use sites (i.e., park sites, water treatment plant site, detention basins, roadways, etc.), which are not a part of this appraisal. As such, these land areas are excluded from this analysis. The following table details the various developable land use components comprising the subject property. CFD (North Vineyard Station No. 1) Description Acres No. Homes/Lots Improved Single-Family Lots Completed Single-Family Homes* 67 Partially Improved Single-Family Homes (Under Construction) 20 Improved Single-Family Lots 58 Subtotal 145 Unimproved Single-Family Lots Unit 1 / Village 1 12 Unit Unit 5 / Village 8 (portion of) 72 Unit 6 90 Subtotal 291 Total Single-Family Component 436 Multifamily Parcel 6.77 n/a Total Multifamily Component 6.77 Proposed Clubhouse Site (portion of APN ) 1.80 n/a Total Clubhouse Component 1.80 * Any completed single-family home with an assessed value for improvements is not considered in this appraisal. The appraised properties are situated west of Bradshaw Road, north of Gerber Road and south of Florin Road, within an unincorporated area of Sacramento County, California. Land uses in the subject s immediate area are devoted primarily to rural residential uses, with some limited commercial development. As the North Vineyard Station Specific Plan area is built out, a wide range of land uses, including single and multifamily residential, commercial and recreational uses, will be incorporated into the area over the near to mid-term. Seevers Jordan Ziegenmeyer 34

110 The appraised properties are further discussed as follows. Size and Shape: Topography: Soils: Adjacent Uses: North East South West Drainage: Access, Frontage, Visibility: Utilities: The subject land areas are primarily irregular in shape, yet functional for development under their respective land use and zoning designations. Generally level A soils report was not provided for this analysis. However, based on the existence of residential and commercial structures situated within the subjects immediate area, it appears the appraised properties possess adequate load bearing capacity for development. Vacant land proposed for single-family residential development Rural residential development Vacant land proposed for residential and public development Proposed landscape corridor Based on the development plan, a physical inspection of the appraised properties, and assuming typical grading and paving work will be completed, it is expected the appraised properties will have adequate drainage. The appraised properties offer primary frontage along Gerber Road, Bradshaw Road, Florin Road, Waterman Road and several proposed interior streets. Public utilities, including electricity, natural gas, water and telephone service, are available at the perimeter of the properties and will be extended to each of the land components. Public utilities will be served by the following providers: Water: County of Sacramento Water Agency Sewer: SRCSD CSD-1 Natural Gas: Pacific Gas and Electric Electricity: Sacramento Municipal Utility District Telephone: AT&T Fire: Sacramento Metropolitan Fire District Police: County of Sacramento Sheriff Environmental Issues: At the time of inspection, the appraiser did not observe the existence of hazardous material, which may or may Seevers Jordan Ziegenmeyer 35

111 not be present on the properties. The appraiser has no knowledge of the existence of such materials on the properties. However, the appraiser is not qualified to detect such substances. The presence of potentially hazardous materials could affect the value of the properties. The value estimate is predicated on the assumption there is no such material on or in the properties that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in the field if desired. Wetlands: Functional Adequacy: Improved Lots: Unimproved Lots: A wetlands mitigation plan has been completed to establish the guidelines for issuance of the Section 404 Permits by the U.S. Army Corps of Engineers. According to Section 404 of the Clean Water Act, a permit is required to discharge dredged or fill materials into waters of the United States, including wetlands. The U.S. Army Corps of Engineers is the permitting authority. A 404 Permit is therefore required before any wetland or wetland impacted area can be developed. The 404 Permit has been issued for the subject, and the property is not encumbered by wetlands. Development of the appraised properties will require an interior street system that connects with Gerber Road and Bradshaw Road and serves all of the various components of the subject. Based upon the tentative map, overall functional utility is considered to be good. It is noted the Central California Traction Company has a railway corridor along the southwestern border of the appraised properties. This line is not currently being utilized and is not considered to have an adverse effect on the subject property s development potential. The subject portion of North Vineyard Station CFD No includes 145 fully improved single family lots (curbs, gutters, sidewalks, street lighting, utilities stubbed, etc.), which includes completed single-family homes, partially improved single-family homes (under construction), and improved single-family lots. The subject portion of North Vineyard Station CFD No includes 291 unimproved or paper lots that require all in-tract improvements. Multifamily Parcel: The multifamily site is currently unimproved, but will be fully improved with completion of the remaining backbone infrastructure. Seevers Jordan Ziegenmeyer 36

112 Proposed Clubhouse Site: Backbone Infrastructure: The proposed clubhouse site is currently unimproved, but will be fully improved with completion of the remaining backbone infrastructure. As of the date of value, some of the offsite improvement work has been completed. The primary facilities authorized to be constructed with the bond proceeds will be used for improvements in the North Vineyard Station Specific Plan Area, including, roadway and intersections improvements to Waterman Road, Bradshaw Road and Florin Road, as well as potable water system at Waterman Road; in each case including design, planning, project management and other soft project costs. The total offsite improvement costs are reported at $21,261,570, or $48,103 per lot ($21,261, lots). According to Lennar, remaining offsite improvement costs, which include common costs, roadway and frontage (water included), drainage and park construction, total $13,173,127, or $35,700 for the remaining 369 lots ($13,173, lots). However, the market value estimated herein, which is subject to a hypothetical condition, assumes the completion of the certain public facilities to be financed by the County of Sacramento CFD No (North Vineyard Station No. 1) Bonds (series 2), which are anticipated to generate $10,300,000 in construction fund proceeds to be used for roadway and intersection improvements and potable water system. Therefore, $2,873,127 ($13,173,127 - $10,300,000), or $7,786 per lot, will be considered in the valuation of the master developer presented later in this report. It s important to note the completion of certain infrastructure improvements within the District has, and will, generate significant fee credits and reimbursements towards new home construction. Specifically, according to the Developer s budget provided and appended hereto, the subject will receive $16,505,430 in fee credits/reimbursements, or $37,343 per lot ($16,505, lots), which will be considered in the valuation. In-Tract Development Costs: In-tract improvements in the region typically range from approximately $29,000 to $66,000 per lot. According to the Master Developer, total in-tract costs are reportedly $16,440,685, or $37,196 per lot ($16,440, lots). For the remaining 291 unimproved lots in the District, remaining in-tract costs are estimated at $10,824,036. For the reader s reference, the multifamily Seevers Jordan Ziegenmeyer 37

113 component does not have in-tract costs like the single family sites. Permits and fees for Home Construction: Conclusion: The subject s proposed permits and fees pertaining to the home construction costs have been estimated based on documents provided by the Developer, which, based on the range of product to be developed, suggests total permits and fees due at building permit in Vineyard Creek range from approximately $63,899 to $74,902 per lot, or an average of $69,400 per lot. However, it is noted fee credits attributable to infrastructure improvements constructed by the developer will lower the effective permits and fees required to be paid at time of building permit. As mentioned previously, completion of certain infrastructure improvements within the District will generate approximately $37,343 per lot in fee credits will be created. Considering the above-mentioned fee credits, the property owner s effective permits and fees costs are estimated to average $32,057 ($69,400 - $37,343) per lot. These permits and fees are lower than competing projects located throughout the market area; however, this is primarily attributable to the significant fee reductions available. The configuration and size of the appraised properties are considered adequate for development. The on-going demand for residential development bodes well for this project and should increase the demand for the complementary land use within the Specific Plan. We expect the appraised properties to be competitive with the other local developments, as well as projects located elsewhere throughout the Sacramento region. Seevers Jordan Ziegenmeyer 38

114 SUBJECT PHOTOGRAPHS Vineyard Point Vineyard Point Vineyard Creek, Unit 1 / Village 1 Vineyard Creek, Unit 1 / Village 1 Vineyard Creek, Unit 1 / Village 1 Vineyard Creek, Unit 1 / Village 1 Seevers Jordan Ziegenmeyer 39

115 SACRAMENTO COUNTY Introduction The Sacramento MSA is the largest metropolitan area in the Central Valley and the fourth-largest in the state of California. The region includes four counties Sacramento, Placer, El Dorado and Yolo and spans from the Sacramento River Delta in the west to the Sierra Nevada mountain range in the east. The region s largest city, Sacramento, is the State Capital and the seat of government for Sacramento County. Sacramento is located approximately 385 miles north of Los Angeles, 500 miles south of Oregon, 85 miles northeast of San Francisco, 105 miles west of South Lake Tahoe, and 135 miles southwest of Reno, Nevada. The region has relatively stable seismic conditions, especially compared to the San Francisco Bay Area and Southern California. Sacramento and adjoining cities rank among the lowest in the state for the probability of a major earthquake. Population The region has a population of over 2.2 million, and has grown at a moderate rate of 0.8% per year for the past five years. The following table illustrates recent population trends for each county in the region over the past few years. Seevers Jordan Ziegenmeyer 40

116 POPULATION TRENDS - SACRAMENTO MSA County %/Yr Sacramento 1,417,259 1,427,961 1,431,726 1,442,993 1,456,230 1,470, % Placer 347, , , , , , % El Dorado 180, , , , , , % Yolo 200, , , , , , % Total 2,145,558 2,160,978 2,173,773 2,192,763 2,214,441 2,234, % Source: California Department of Finance Placer County has led the region with growth of 1.3% per year over the past five years. Most of this growth has occurred in the cities of Roseville, Rocklin and Lincoln. Much of the region s growth is attributed to in-migration of residents from other California and U.S. areas. The population in the region is expected to continue growing. According to the California Department of Finance, the population in the Sacramento MSA is projected to increase to about 2.84 million by 2030 and 3.57 million by The region s growth is expected to outpace the growth of most other metropolitan areas in California, as well as the state as a whole. Employment & Economy Historically, the Sacramento region has been one of the more stable employment centers in California, with a significant number of jobs in State government. The California Employment Development Department has reported the following employment data for the Sacramento MSA over the past few years. EMPLOYMENT TRENDS - SACRAMENTO MSA Labor Force 1,052,100 1,048,500 1,044,400 1,049,500 1,046,800 1,049,200 Employment 935, , , , , ,100 Job Growth (37,900) (16,600) 2,200 20,200 15,000 18,000 Unemployment Rate 11.1% 12.4% 11.8% 10.3% 8.7% 7.2% Source: California Employment Development Department The unemployment rate in the four-county region was 5.5% in October 2015, which compares to rates of 5.8% for California and 5.0% for the U.S. For most areas within the state and nation, including the Sacramento MSA, unemployment declined from 2004 through 2006, increased from 2007 to 2010, and declined during Seevers Jordan Ziegenmeyer 41

117 14.0% UNEMPLOYMENT RATE - SACRAMENTO MSA 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% Oct-15 Source: California Employment Development Department The region experienced a significant decline in jobs in 2009, but the rate of decline moderated in 2010, and job growth was positive in each year from 2011 through In the one-year period ending in October 2015, the region gained 21,000 jobs, which equates to a job growth rate of 2.3%. Employment conditions should continue to slowly improve over the next few years. The local economy has transitioned from a government and agricultural center to a more diverse economy. Growing industries in the region include healthcare, technology, clean energy and life sciences. The region is a western hub for data processing, customer call centers and other corporate back office support activities. The following chart indicates the percentage of total employment for each sector within the region. Seevers Jordan Ziegenmeyer 42

118 EMPLOYMENT BY SECTOR - SACRAMENTO MSA Government Trade/Transport/Utilities Education/Health Services Profess/Business Services Leisure/Hospitality Financial Activities Construction/Mining Manufacturing Other Services Information Agriculture 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Source: California Employment Development Department As can be seen in the chart above, the region s largest employment sectors are Government, Trade/Transportation/Utilities (including retail and wholesale trade), Education and Health Services, and Professional and Business Services. Government jobs account for about 25% of total employment in the region. This percentage has declined only slightly in the past couple of decades government employment was about 30% of the total in The region s 10 largest employers are listed in the following table (based on the number of employees in the four-county region). LARGEST EMPLOYERS - SACRAMENTO MSA Company Industry Employees 1 State of California Government 76,557 2 U.S. Government Government 12,888 3 University of California Davis University 12,639 4 Sacramento County Government 10,700 5 Sutter Health Healthcare 10,431 6 UC Davis Health System Healthcare 9,905 7 Kaiser Permanente Healthcare 8,845 8 Dignity Health (formerly Mercy) Healthcare 7,020 9 Intel Corp. Semiconductors 6, Raley's Inc. Retail Grocery 5,456 Source: Sacramento Business Journal, Book of Lists 2014 Seevers Jordan Ziegenmeyer 43

119 Household Income Median household income represents a broad statistical measure of well-being or standard of living in a community. The median income level divides households into two equal segments with one half of households earning less than the median and the other half earning more. The median income is considered to be a better indicator than the average household income as it is not dramatically affected by unusually high or low values. The following chart shows income for each county in the region, as well as the state of California, for the year 2013 (most recent available). MEDIAN HOUSEHOLD INCOME Placer El Dorado California Yolo Sacramento $0 $20,000 $40,000 $60,000 $80,000 Source: U.S. Census As indicated in the chart above, Placer and El Dorado Counties exhibit the highest income levels in the region. Household incomes in these counties are among the highest in California. Transportation A significant strategic advantage of the Sacramento region is its proximity to large markets and its transportation accessibility to these markets provided by extensive highway, rail, water and air systems. The Sacramento region has over 800 miles of maintained state highways. The hub of freeways in the region makes the Sacramento Area a good center for freight distribution. U.S. Highway 50, Interstate 80, and the Capital City Freeway are the principal routes for commuters living in the densely populated eastern suburbs. Commuters from the north and south of Sacramento travel on Interstate 5 and State Highway 99. State Highways 65 and 70 link Placer County to Yuba and Sutter Counties to the north. Interstate 5 provides a direct route to Redding, Oregon and Washington to the north and Seevers Jordan Ziegenmeyer 44

120 Los Angeles to the south. Interstate 80 permits travel to Nevada and Utah to the east and the San Francisco Bay Area to the west. Lake Tahoe and Nevada are reachable within a couple hours on U.S. Highway 50, which originates in Sacramento. State Highway 99 provides access to the San Joaquin and upper Sacramento Valleys. The main public transit system in the Sacramento Area is operated by Sacramento Regional Transit (RT), with additional service provided by other local public and private transit operators. Regional Transit covers a 418-square-mile service area that is serviced by 182 buses and 76 light rail vehicles, transporting over 31.5 million passengers annually. Light Rail began operation in 1987 along a twopronged route linking Downtown Sacramento with populous suburbs to the east and north. In 2003 and 2004, RT completed extensions to the Meadowview area in South Sacramento and Sunrise Boulevard in Rancho Cordova to the east. In 2005, an eastward extension to the city of Folsom was completed. The Sacramento region has access to a number of railroads. The north-south and east-west main lines of the Union Pacific Railroad intersect in Sacramento and, as a result of the merger of Union Pacific and Southern Pacific in 1996, Sacramento has access to the Burlington Northern Santa Fe Railway. Union Pacific s major freight classification facility for Northern California, Nevada and Oregon is located in Roseville (Placer County). Amtrak provides daily passenger service in all directions from Sacramento. The Capital Corridor system provides high-speed commuter rail service from Roseville to San Jose. The region has good water transportation capabilities. The Port of Sacramento is a deep-water port located 79 miles northeast of San Francisco in the city of West Sacramento, serving ocean-going vessels handling a variety of cargo types. The 30-foot depth of the channel, along with extensive rail and truck cargo handling facilities, make the Port highly productive for long distance shipping. The Port is equipped for handling bulk cargo and a number of agricultural and forest products. Finally, the region includes several air transport facilities. Most notably, Sacramento International Airport is served by 11 passenger carriers and numerous cargo carriers. Major expansions of the terminals and parking facilities were completed between 2004 and Each year, about 9 million passengers travel through Sacramento International. The region is also served by Sacramento Executive Airport, Lincoln Regional Airport, McClellan Airfield, Mather Airport (the latter two being former Air Force Bases), and several smaller airports and airfields. Recreation & Culture The Sacramento region offers innumerable recreational and cultural opportunities. The American River Parkway offers 5,000 acres of recreation area along both sides of the river for 30 miles, with Folsom Lake situated at the eastern end. The Sacramento-San Joaquin Delta has over 1,000 miles of Seevers Jordan Ziegenmeyer 45

121 waterways. The rivers and lakes within the Sacramento Area offer boating, fishing and water-skiing opportunities. In addition, numerous parks and golf courses are located throughout the region. Professional sports teams in Sacramento include an NBA team (the Kings) and a Triple-A minor league baseball team (the River Cats). Cultural attractions in the region include the Old Sacramento Historic District, California State Railroad Museum, Crocker Art Museum, Historic Governor s Mansion, Sutter s Fort State Historic Park and Sacramento Zoo. Sacramento is home to several theaters and performing arts centers offering world-class shows. Annual events in Sacramento include the California State Fair, the Music Circus and the Sacramento Jazz Jubilee. In terms of higher education, the region s largest universities are the University of California Davis and Sacramento State University. Six community colleges are located in the region, including Sierra College, American River, Cosumnes River, Folsom Lake, Sacramento City and Woodland Community College. Several private colleges are located in the area, as well as satellite campuses of colleges headquartered elsewhere. The region also contains numerous vocational schools. Other recreational and cultural opportunities are available within a short drive of the Sacramento area. To the west are the San Francisco Bay Area, the Napa Valley wine country, the coastal redwood forests, and the beaches of the Pacific Ocean. To the east are Lake Tahoe and the Sierra Nevada Mountains, which are home to more than a dozen snow-skiing resorts. Legalized casino gambling is available in Nevada, as well as several tribal casinos in the Sacramento region. Conclusion The Sacramento region is the fourth-largest metropolitan area in California, and has seen moderate population growth of about 0.8% per year over the past five years. Between 2004 and 2006, the regional economy expanded rapidly with large gains in the housing market and relatively strong job growth. However, the housing market began a rapid decline in late 2005, and most sectors of the commercial real estate market began to deteriorate in Like most metropolitan areas in the state and nation, the Sacramento region experienced high unemployment and real estate market declines during the period of roughly However, employment conditions have been improving since 2011 and most real estate sectors are showing signs of recovery or expansion. As the economy continues to improve, the long-term outlook for the region is good. The area s advantages include a diverse economy, mild climate, seismic stability, ample recreational and cultural opportunities, and expansive transportation systems. Further, the region offers greater affordability than the Bay Area and Southern California. Seevers Jordan Ziegenmeyer 46

122 NEIGHBORHOOD Source: Google Maps Introduction This section of the report provides an analysis of the observable data that indicate patterns of growth, structure and/or change that may enhance or detract from property values. For the purpose of this analysis, a neighborhood is defined as a group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises. 4 The boundaries of a neighborhood identify the physical area that influences the value of the subject property. These boundaries may coincide with observable changes in prevailing land use or occupant characteristics. Physical features such as the type of development, street patterns, terrain, vegetation and parcel size tend to identify neighborhoods. Roadways, waterways and changing elevations can also create neighborhood boundaries. The subject is located just outside the Sacramento City limits, within an unincorporated Sacramento County community known as Vineyard. The neighborhood boundaries can generally be described as the zip code, or Jackson Road/Highway 16 to the north, S. Watt Avenue/Elk Grove Florin Road to the west, Calvine Road to the south, and is bounded to the east by Excelsior Road (south of Florin Road) and Eagles Nest Road (north of Florin Road). 4 The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015), 156. Seevers Jordan Ziegenmeyer 47

123 Demographics According to reports prepared by Esri Business Analyst Online (Esri), current and projected demographics within the subject s zip code (95829) are summarized in the following table. Population (2015) 28,447 persons Population (2020), % change 30,684 persons, +7.86% Median Age 34.1 years Number of Households 8,416 Average Household Size 3.36 persons % of Households Owner-Occupied 72.8% % of Households Renter Occupied 27.2% Median Household Income $83,693 Transportation The appraised properties are located approximately six miles east of State Highway 99. This freeway is a primary transportation corridor linking the southern portions of the county to the Sacramento Central Business District. Additionally, State Highway 99 connects with the other major regional highways, including U.S. Highway 50, the Capital City Freeway and Interstate 5. To the south, State Highway 99 provides access to Stockton and eventually merges with Interstate 5 near Bakersfield. In a northerly direction, State Highway 99 connects the subject neighborhood with the Sacramento Central Business District and Yuba City and continues to Chico. Additionally, the subject is located about four miles south of Jackson Road/State Highway 16. Jackson Road/State Highway 16 is an east/west thoroughfare that connects the Sacramento area with Amador and El Dorado Counties to the east. Jackson Road intersects with the major north/south arterials in the neighborhood, including Bradshaw Road, South Watt Avenue and Florin-Perkins Road. U.S. Highway 50 is also accessible via Bradshaw Road and Watt Avenue. Within the subject neighborhood, primary thoroughfares include Elder Creek, Florin, Gerber, Calvine, Elk Grove Florin, and Bradshaw Roads. Many of these roads serve as connector routes between the South Sacramento area and Elk Grove. Surrounding Land Uses A map of land uses in the vicinity of the subject is provided on the following page. Seevers Jordan Ziegenmeyer 48

124 Industrial Development Single-Family Development Subject Property Industrial Development Single-Family Development Single-Family Development The subjects area consists primarily of single-family residential uses, and agricultural/residential uses, including rural residential home sites, horse farms and general hobby farms. Neighborhood residences (outside of the District) are generally considered to be in fair to average condition and exhibit effective ages of 15 to 50 years. Currently, there is only a limited amount of industrial and commercial development situated near the subject. The closest industrial properties are located within the Power Inn industrial submarket, generally located between Power Inn Road and Watt Avenue, and Jackson Road/State Highway 16 and Florin Road, just northwest of the subjects neighborhood. Typical industrial properties in the this vicinity include vehicle storage yards, raw material processing plants and large-scale nurseries. Commercial development is primarily located closer to higher density residential development. The largest development just west of the subjects neighborhood is the Florin Towne Center, formally the Florin Mall, located along the west line of Stockton Boulevard, south of 65th Street and north of Florin Road. This property was originally constructed as an enclosed mall but has been completely redeveloped as an open-air center consisting of 14 buildings. This center is anchored by Wal-Mart, PetSmart, 24-Hour Fitness. Other retailers include a newly constructed Sizzler, Verizon Wireless, U.S. Bank, Starbucks, Panda Express and additional service and retail tenants. Other well known entities proximate to this center include Sears, Wells Fargo, McDonalds and Bank of America. Florin Road is heavily developed with a wide variety of commercial uses, including home improvement stores, auto dealerships, restaurants, and a number of miscellaneous small retail uses. Nearby commercial properties represent gas stations, convenience stores and restaurants. Significant amounts of new single-family residential development are being developed within the neighboring cities of Elk Grove and Rancho Cordova. The most proximate urban development in the neighborhood is located to the west and south of the appraised properties. The majority of the residential development represents older single-family residential development; however, there has been substantial new in-fill development over the past several years. Seevers Jordan Ziegenmeyer 49

125 The subject neighborhood is served by several community uses typical of a suburban residential area, including schools, parks, churches, libraries, hospitals and open space. Neighborhood parks include Sunrise Florin, Southwoods, Florin Town and Vintage Parks. Churchill Downs Community Park, located near the intersection of Vintage Park Drive and Waterman Road, offers basketball courts, soccer fields, lighted tennis courts, picnic areas and bike trails. There are several golf courses in the neighborhood, including the Champions Golf Links, Bradshaw Ranch Golf Course and Wildhawk Golf Club. Florin High School is located along the west line of Cottonwood Lane, south of Elsie Avenue, and Sheldon High School is located on the north line of Calvine Road, just east of Bradshaw Road. The nearest post office is located south of Florin Road, along Elk Grove Florin Road. Additional community amenities are situated in areas closer to State Highway 99 to the west. Overall build-out in these areas is much higher than in the subject s immediate area. North Vineyard Station Specific Plan The appraised properties are located within the North Vineyard Station Specific Plan. A map of this area is presented below: The North Vineyard Station Specific Plan area is located in the south central portion of Sacramento County, about 13 miles southeast of the Sacramento CBD and 5 miles north of elk Grove. The Plan area is about 1,595 acres in size and is bounded on the north by Florin Road, on the south by Gerber Road, and on the east by Vineyard Road. Elder Creek roughly constitutes the west boundary, and Bradshaw Road transects the Plan area in a north-south direction. Seevers Jordan Ziegenmeyer 50

126 The Plan area is best characterized as a primarily undeveloped, semi-rural area containing a scattering of older residences and a few non-residential uses. The small amount of agricultural activity that occurs in the area is generally limited to dry farming. The Plan provides for the ultimate development of the entire 1,595 acre are, including 5,732 dwelling units in a wide range of types and densities, retail commercial and business professional uses for the convenience of local residents, parks and open space, schools and all public facilities necessary to support the ultimate population at adopted service levels. The following are key features of the Plan: A primarily residential community that includes a wide range of housing types and densities, all served by necessary public infrastructure; Well-defined residential neighborhoods, served by nearby parks and schools; A commercial center at the Florin Road/Bradshaw Road intersection that will provide retail commercial shopping and employment opportunities for area residents; Parks and other open space dispersed throughout the community to serve both active and passive recreational needs; A railroad corridor as a future public transit right-of-way; A naturalized storm drainage system within drainage parkways that is a part of a larger, countywide solution to area-wide flooding; A network of pedestrian and bicycle pathways along streets and within dedicated open space; A street network that provides safe and efficient travel throughout the Plan area, with multiple connections to existing major streets beyond the Plan area; Development standards, land use policies and design guidelines that will guide development through ultimate build-out of the Plan The following table highlights the proposed land uses of the Plan area: Seevers Jordan Ziegenmeyer 51

127 Source: Sacramento County Planning Department Conclusion In conclusion, the subjects are located in an expanding suburban area that should continue to experience adequate demand for various urban property uses. While the subjects are located on the edge of development and within an expanding area, the neighborhood overall offers a balanced mix of land uses. The area has good access to neighborhood thoroughfares. Households in the area have average income levels, and the community appeal is good. The characteristics of the neighborhood relative to other parts of the Sacramento region are desirable. Seevers Jordan Ziegenmeyer 52

128 RESIDENTIAL MARKET Market Definition The subject property is located just outside the Sacramento City limits, within an unincorporated Sacramento County community known as Vineyard. The neighborhood is characterized as a suburban, quasi-commuter area. Based on existing, surrounding homes and new projects under development, the subject characteristics best support a project designed for a combination of entrylevel and/or first-time move-up home buyers. In this analysis of the housing market, we will analyze market trends within the regional area encompassing unincorporated Sacramento County, as well as the cities of Elk Grove and Rancho Cordova. These cities represent the two largest areas adjacent to the subjects neighborhood. Building Permits Single-family building permits for Sacramento County, as well as the cities of Elk Grove and Rancho Cordova, are shown in the table and chart on the following page. Seevers Jordan Ziegenmeyer 53

129 Single-family Building Permits Sacramento Elk Rancho Percent County Grove Cordova Total Change ,646 2,603 1,633 12, , , % , , % , , % , % , % , % , , % , , % , , % 2015 (Jan-Nov) 2, , Source: SOCDS Building Permits Database Single-family Building Permits The number of single-family permits for the area declined from 2005 through 2011, and then increased in 2012 and Permit levels remained fairly steady in 2014 compared to Preliminary figures reported between January and November 2015 indicate permit levels have exceeded 2014 levels by at least 25%. Seevers Jordan Ziegenmeyer 54

130 New Home Pricing and Sales The Gregory Group surveys active new home projects in California and Nevada. Below we present a table and chart depicting average sale prices for active single-family residential projects in Sacramento County, Elk Grove and Rancho Cordova for the past three years. The data include both attached and detached projects, but the vast majority of units are detached homes. Average Home Size (SF) Source: The Gregory Group Avg. Net Price / Avg. SF Sold Per Project Per Month Average Base Price Average Net Price Average Incentive % Change Net Price Quarter Sold Number of Projects 1Q 2013 $297,941 $294,900 $3, ,061 $ Q 2013 $340,616 $337,266 $3, % 2,252 $ Q 2013 $327,946 $324,637 $3, % 2,070 $ Q 2013 $329,386 $326,086 $3, % 2,064 $ Q 2014 $354,520 $350,923 $3, % 2,239 $ Q 2014 $361,860 $356,199 $5, % 2,246 $ Q 2014 $362,972 $357,854 $5, % 2,252 $ Q 2014 $367,843 $362,791 $5, % 2,266 $ Q 2015 $380,498 $375,202 $5, % 2,326 $ Q 2015 $381,804 $376,527 $5, % 2,273 $ Q 2015 $394,229 $388,554 $5, % 2,346 $ Q 2015 $400,498 $395,239 $5, % 2,343 $ New Home Pricing Source: The Gregory Group Net prices have been generally increasing since the First Quarter of 2014, and have increased in every quarter since, with the exception of the two quarters where net prices decreased by no more than 0.5% each. In the following table we show the average net base price divided by the average home size. Seevers Jordan Ziegenmeyer 55

131 New Home Average Net Price / Average SF Source: The Gregory Group Looking at the average price per square foot, this indicator increased rapidly in the most of 2013 and began flattening through 2014, with more modest increases for The following chart shows recent trends in absorption (number of sales per project per month). New Home Sales per Project per Month Source: The Gregory Group In terms of the number of home sales, there have been ups and downs from quarter to quarter, but the overall trend has been fairly flat over the last three years. There were 2.6 sales per project per month in the Fourth Quarter of 2015, which was up from 1.8 in the previous quarter, and consistent Seevers Jordan Ziegenmeyer 56

132 with the 2.6 a year earlier. Over the past two years, absorption rates (homes sold per project per month) have improved significantly, from a low of 1.8 sales per project per month in the previous quarter (Third Quarter of 2015) to 3.9 sales per project per month in the Second Quarter Over the last 12 months (through the Fourth Quarter of 2015), the average was 2.7 sales per month. Active Projects, Current New Home Pricing & Absorption There are 16 active detached projects in the Sacramento County, Elk Grove and Rancho Cordova market areas. The 16 active projects are summarized in the tables below, based on data from the Fourth Quarter Active Projects Summary Fourth Quarter 2015 Avg. Base Age. Home Avg. Price Lot Size Units Units Units Units Project Community Builder Price Size (SF) Per SF (SF) Planned Offered Sold Unsold Diamonte Elk Grove Lennar Homes $494,480 2,899 $ , Grammercy Sacramento County Taylor Morrison Homes $357,750 2,133 $ , The Cascade Collection Sacramento County Lennar Homes $366,240 2,119 $ , The Redwood Collection Sacramento County Lennar Homes $401,890 2,673 $ , The Springs Sacramento County JMC Homes $420,704 2,462 $ , Wildhawk Landing Sacramento County Homes by Towne $467,433 2,546 $ , Bungalows Rancho Cordova Beazer Homes $391,323 2,343 $ , Camden Rancho Cordova Woodside Homes $397,490 2,481 $ , Corinthia Rancho Cordova Richmond American Homes $421,150 2,888 $ , Cottages Rancho Cordova Beazer Homes $354,240 1,996 $ , Cypress Point Rancho Cordova Lennar Homes $410,157 2,481 $ , Eclipse II Rancho Cordova Woodside Homes $412,740 2,541 $ , Highland Grove Rancho Cordova Lennar Homes $372,740 2,119 $ , Kensington Rancho Cordova Lennar Homes $411,990 2,689 $ , Reflections Rancho Cordova Beazer Homes $323,740 1,592 $ , Trentino Rancho Cordova Elliott Homes $398,950 1,874 $ , Overall Minimum $323,740 1,592 $ /SF Overall Maximum $494,480 2,899 $ /SF Overall Average $400,189 2,365 $ /SF Source: The Gregory Group Project Active Projects Recent Absorption (Number of Sales) Community Avg. Home Price Open Date Diamonte Elk Grove $494,480 Feb Grammercy Sacramento County $357,750 Mar The Cascade Collection Sacramento County $366,240 Mar The Redwood Collection Sacramento County $401,890 Mar The Springs Sacramento County $420,704 Mar Wildhawk Landing Sacramento County $467,433 Mar Bungalows Rancho Cordova $391,323 Jun Camden Rancho Cordova $397,490 Jun Corinthia Rancho Cordova $421,150 Jan Cottages Rancho Cordova $354,240 Jun Cypress Point Rancho Cordova $410,157 Jun Eclipse II Rancho Cordova $412,740 Mar Highland Grove Rancho Cordova $372,740 May Kensington Rancho Cordova $411,990 May Reflections Rancho Cordova $323,740 Jun Trentino Rancho Cordova $398,950 Aug Source: The Gregory Group Seevers Jordan Ziegenmeyer 57 4Q Q Q Q Q Q 2014 Total No. of Projects Sales per Project per Quarter Sales per Project per Month

133 As shown in the preceding table, over the last 18 months the monthly absorption rate per project has ranged from 1.8 to 3.8 sales, with an average rate of 2.9 sales per project per month. Of importance, the two active projects in Vineyard Point (The Cascade Collection and The Redwood Collection), report average monthly absorption rates of 0.3 to 4.2 sales over the last four quarters. Note the low absorption rate reported in the most recent quarter (Fourth Quarter 2015) or 0.3 sales per month reflect the last few home sales in Vineyard Point and the opening of these projects in Vineyard Creek. Further absorption details are provided for these projects on the following page. Overall, based on the absorption rates of active projects in North Vineyard Station, with additional support given to the other new projects in the market area, absorption for the subject property is estimated at 4± sales per month. The projects most similar to the subject are Diamonte, The Cascade Collection, The Redwood Collection, Camden, Cypress Point and Eclipse II. These projects are deemed most similar to the subject because of their locations and lot sizes. Below and on the following pages, we provide more detailed information on these projects. The tabular data have been extracted directly from The Gregory Group s website, showing the most recent two years of quarterly data. Project 1: Diamonte Seevers Jordan Ziegenmeyer 58

134 Project 2: The Cascade Collection Project 3: The Redwood Collection Seevers Jordan Ziegenmeyer 59

135 Project 4: Camden Project 5: Cypress Point Seevers Jordan Ziegenmeyer 60

136 Project 6: Eclipse II Resale Market We have analyzed recent trends in the resale market in addition to the preceding analysis of the new home market. Based on data from the local multiple listing service, the table on the following page shows resale prices for the most recent four and a half months (August 1, 2015 through January 20, 2016) for detached homes located in the (Sacramento County) zip code, built in 2005 or later, and situated on lots containing at least 4,500 SF but less than 7,500 SF. Seevers Jordan Ziegenmeyer 61

137 Resales (Sacramento County) August 1, 2015 through January 20, 2016 Sale Living Sale Last List Sale Sale % Days on Lot Address Date Area (SF) Price Price Price/SF of List Market Size 9433 Blue Mountain Way 11/13/15 1,268 $278,900 $279,900 $ % 55 4, Cedar Point Way 9/2/15 1,268 $280,000 $279,900 $ % 21 4, Morning Hill Street 10/7/15 1,268 $280,000 $284,900 $ % 7 5, Morning Hill Street 10/9/15 1,428 $295,000 $299,900 $ % 48 5, Morning Hill Street 8/28/15 1,428 $299,900 $299,900 $ % 3 5, Gardella Way 12/4/15 1,876 $300,000 $299,900 $ % 12 4, Blue Mountain Way 9/4/15 1,428 $305,000 $299,900 $ % 17 6, Fruitdale Way 9/20/15 1,428 $309,900 $309,900 $ % 93 6, Almadine Drive 9/24/15 1,843 $312,000 $325,000 $ % 15 6, Cobble Bay Court 8/3/15 2,439 $353,500 $349,000 $ % 11 6, Blue Mountain Way 8/10/15 2,567 $369,000 $380,000 $ % 146 4, Garden Ridge Way 11/12/15 1,794 $379,900 $379,900 $ % 6 7, Alder Creek Drive 12/1/15 2,567 $390,000 $374,500 $ % 8 6, Everbloom Way 9/2/15 3,046 $400,000 $424,000 $ % 32 6, Hopyard Way 12/30/15 2,811 $405,000 $409,900 $ % 80 7, Everbloom Way 9/15/15 2,968 $465,000 $474,888 $ % 33 6,909 Average: 1,964 $338,944 $341,962 $ % 37 5,938 Source: MetroList MLS The following table and chart show historical resale data for the (Sacramento County) zip code. Resale History (Sacramento County) Total Avg. Home Avg. Avg. Price/ Avg. Days Sales Size (SF) Price Avg. SF on Market 4Q ,495 $209,642 $ Q ,232 $272,500 $ Q ,220 $301,083 $ Q ,999 $284,153 $ Q ,838 $274,899 $ Q ,939 $282,936 $ Q ,767 $289,500 $ Q ,151 $311,800 $ Q ,296 $331,643 $ Q ,855 $311,667 $ Q ,017 $321,000 $ Q ,883 $326,553 $ Q ,859 $332,686 $ Source: MetroList MLS Seevers Jordan Ziegenmeyer 62

138 Resale Home Average Price / Average SF Source: MetroList MLS Over the past three years, MLS data show that average resale prices have fluctuated between $84 and $179 per square foot. The average price per square foot was at a low in the Fourth Quarter 2012 and then trended upward over the past three years, with just a couple of quarterly dips. Over the last three years, the average time on the market has fluctuated from quarter to quarter; the general trend has been downward, with slight increases in late 2013 and early 2014, but still represents an improvement over years Ability to Pay In the Market Valuation Floor Plans section of this report, the latest sale data indicates that a new, standard lot with a 1,603 SF home in the subject s area would have a sale price of approximately $365,000. In this section, we will examine the ability to pay among prospective buyers for a representative price point of $365,000. First, we will estimate the required annual household income based on typical mortgage parameters in the subject s market area. Specifically, we will employ a loan-to-value ratio of 80% (down payment of 20%), mortgage interest rate of 4.25%, 360 monthly payments, and a 30% ratio for the mortgage payment as a percent of monthly income, which includes a tax rate of % according to the Sacramento County Treasurer-Tax Collector s Office (note the home price is inclusive of bonds). The following table shows an estimate of the annual household income that would be required to afford a home priced at $365,000. Seevers Jordan Ziegenmeyer 63

139 Income Requirement Home Price $365,000 Loan % of Price (Loan to Value) 80% Loan Amount $292,000 Interest Rate 4.25% Mortgage Payment $1,436 Mortgage Payment % of Income 30% Property Taxes $308 Monthly Income $5,096 Annual Income $61,150 We have obtained income data from Esri Business Analyst Online (Esri), formerly STDB Online, for a 15-mile radius surrounding the subject property, which is considered representative of typical buyers for the subject property. It is noted this geographic area is wider than the immediate neighborhood profiled previously in the Neighborhood section of this report, which focuses on the subject s immediate location. In the table on the following page we show the income brackets within a 15-mile radius, along with estimates of the percentage of households able to afford a $365,000 home within each income bracket. Seevers Jordan Ziegenmeyer 64

140 Ability to Pay Household Percent Percent Households Income of Households Able to Pay Able to Pay < $15, % 0% 0.0% $15,000 - $24, % 0.0% 0.0% $25,000 - $34, % 0.0% 0.0% $35,000 - $49, % 0.0% 0.0% $50,000 - $74, % 27.7% 4.9% $75,000 - $99, % 100.0% 12.4% $100,000 - $149, % 100.0% 12.6% $150,000 - $199, % 100.0% 5.3% $200, % 100.0% 3.9% 100.0% 39.2% Source: ESRI (household income) The preceding analysis indicates that approximately 39% of households within a 15-mile radius of the subject property would be able to pay for a home priced at $365,000. Market Participant Interviews We frequently interview market participants about supply and demand conditions for land in the Sacramento region. Within the last few months we have interviewed multiple land brokers and builder land acquisition agents. The consensus is near-term land (predominantly improved and unimproved residential lots) pricing increased significantly from 2012, but in 2013 land prices for near-term development properties pulled back. One participant referenced a project in the Sacramento region where one builder submitted an offer at $85,000 per finished lot in mid-2013, but later, due to market changes, reduced their offer to $65,000 per finished lot. This price was still higher than the price paid in 2012 for a similar property ($45,000 per finished lot). The pullback in land prices was the result of a combination of factors, including slowing home sales, the doubling of mortgage insurance, seasonality, as well as the fact that builders had increased pricing. However, it should also be noted that in recent months land brokers have reported that a re-set in the market has occurred, whereby land prices have stabilized and a more normal rate of growth and appreciation is expected in the near and intermediate terms. Conclusion We have summarized some of the key points from this section as follows: Throughout the regional area, new and resale prices have trended upward over the past three to four years, with increases tempering as of late. Seevers Jordan Ziegenmeyer 65

141 For new homes in the subject s market area (Sacramento County, Elk Grove and Rancho Cordova), average prices have been generally increasing since the First Quarter of 2014, and have increased in every quarter since, with the exception of the two quarters where net prices decreased by no more than 0.5% each. The average price per square foot in the subject s market area increased rapidly in most of 2013 and began flattening through 2014, with more modest increases for Absorption rates in the subject s market area have been fairly steady over the past 18 months, with a range of 1.8 to 3.8 sales per project per month. Among the active projects deemed most similar to the subject (i.e., the two active projects in Vineyard Creek: The Cascade Collection and The Redwood Collection), an average absorption rate between 2.3 and 4.2 sales per project per month is considered reasonable for the subject property, which is indicative of an improving market with average demand. In the resale market, the average price per square foot reached a low in the Fourth Quarter 2012 and then trended upward over the past three years, with just a couple of quarterly dips. Overall, demand for new homes in the subject s market area is improving. The housing market is considered to be in a stage of expansion. Seevers Jordan Ziegenmeyer 66

142 HIGHEST AND BEST USE The term highest and best use, as used in this report, is defined as follows: The reasonably probable use of property that results in the highest value. The four criteria that the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. 5 Two analyses are typically required for highest and best use. The first analysis is highest and best use of the land as though vacant, and the second analysis is the highest and best use as improved (which is not applicable). Definitions of these terms are provided in the Glossary of Terms in the Appendix to this report. Highest and Best Use as Vacant In accordance with the definition of highest and best use, it is appropriate to analyze the subject property as though vacant as it relates to legal permissibility, physical possibility, financial feasibility and maximum productivity. Legal Permissibility The legal factors influencing the highest and best use of the appraised properties are primarily government regulations, such as zoning and building codes. The appraised properties are zoned and approved for single- and multi-family development, as well as a 1.80-acre site proposed for a clubhouse. Overall, the legally permissible uses are to develop the appraised properties in accordance with the existing entitlements and land use designations, which have undergone extensive planning and review. A rezone to any other land use is highly unlikely. Additionally, the above land uses are consistent with the Sacramento County General Plan and the North Vineyard Specific Plan. Physical Possibility The physical characteristics of a site that affect its possible use(s) include, but are not limited to, location, street frontage, visibility, access, size, shape, topography, availability of utilities, offsite improvements, easements and soil and subsoil conditions. The legally permissible test has resulted in uses consistent with the existing entitlements (i.e., single- and multifamily development); at this point the physical characteristics are examined to see if they are suited for the legally permissible use. 5 The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015), 109. Seevers Jordan Ziegenmeyer 67

143 The physical characteristics of the appraised properties support development, with paved access, and public utilities in proximity to the appraised properties. Upon completion of remaining site improvements, interior streets and utilities will be extended to each of the subjects lots. The subject is not located in an adverse earthquake or flood zone. Surrounding land uses are compatible and/or similar to the legally permissible uses. Development on adjacent properties provides support that soils are adequate for development. Financial Feasibility Financial feasibility depends on supply and demand influences. With respect to financial feasibility of single-family residential development, in recent months merchant builders have acquired unimproved lots in the Sacramento region for near term construction, and there are multiple active projects in the subjects immediate area that demonstrate demand for new homes. Finished lots are transferring for prices that exceed the sum of unimproved lots and site development costs, which indicates completion of site development is financially feasible. Strong land speculation by merchant builders has led to land prices that have outpaced current home prices, which reflects that builders, when making land purchase decisions, are speculating that home prices will continue to increase. Regarding multifamily development, in general, while all real estate sectors experienced contraction between 2008 and 2011, the apartment market has since improved significantly and is currently regarded as one of the best performing property investment sectors. Vacancy in the subjects neighborhood is low, and rental rates have been increasing, indicating that there is good demand for multifamily residential housing. It is our opinion multifamily development would be financially feasible and maximally productive. Maximum Productivity Legal, physical and market conditions have been analyzed to evaluate the highest and best use of the appraised properties as vacant. The analysis is presented to evaluate the type of use(s) that will generate the greatest level of future benefits possible to the properties. Based on the factors previously discussed, the maximally productive use of the appraised properties, and its highest and best use as vacant, is for near term single- and multi-family residential development, in addition to the 1.80-acre proposed clubhouse as an added amenity for the project s residences. The probable buyer of the subject, in bulk, is a land developer or production homebuilder intending to build a combination of entry-level and move-up homes (including the multifamily site). Seevers Jordan Ziegenmeyer 68

144 APPROACHES TO VALUE The valuation process is a systematic set of procedures an appraiser follows to provide answers to a client s questions about real property value. 6 This process involves the investigation, organization and analysis of pertinent market data and other related factors that affect the market value of real estate. The market data is analyzed in terms of any one or all of the three traditional approaches to estimating real estate value. These are the cost, sales comparison and income capitalization approaches. An additional approach discounted cash flow analysis is also applicable. Each approach to value is briefly discussed and defined as follows: Cost Approach The cost approach is based on the premise that no prudent buyer would pay more for a particular property than the cost to acquire a similar site and construct improvements of equivalent desirability and utility. Thus, this approach to value relates directly to the economic principle of substitution, as well as supply and demand. The cost approach is most applicable when valuing properties where the improvements are new or suffer only a minor amount of accrued depreciation, and is especially persuasive when the site value is well supported. The cost approach is also highly relevant when valuing special-purpose or specialty properties and other properties that are not frequently exchanged in the market. The definition of the cost approach is offered as follows: A set of procedures through which a value indication is derived for the fee simple estate by estimating the current cost to construct a reproduction of (or replacement for) the existing structure, including an entrepreneurial incentive or profit; deducting depreciation from the total cost; and adding the estimated land value. Adjustments may then be made to the indicated value of the fee simple estate in the subject property to reflect the value of the property interest being appraised. 7 Sales Comparison Approach The sales comparison approach is based on the premise that the value of a property is directly related to the prices being generated for comparable, competitive properties in the marketplace. Similar to the cost approach, the economic principles of substitution, as well as supply and demand are basic to the sales comparison approach. This approach has broad applicability and is particularly persuasive when there has been an adequate volume of recent, reliable transactions of similar properties that indicate value patterns or trends in the market. When sufficient data are available, this approach is the most direct and systematic approach to value estimation. Typically, the sales comparison approach is most pertinent when valuing land, single-family homes and small, owner-occupied commercial and office properties. The definition of the sales comparison approach is offered as follows: 6 The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015), The Dictionary of Real Estate Appraisal, 54. Seevers Jordan Ziegenmeyer 69

145 The process of deriving a value indication for the subject property by comparing sales of similar properties to the property being appraised, identifying appropriate units of comparison, and making adjustments to the sale prices (or unit prices, as appropriate) of the comparable properties based on relevant, market-derived elements of comparison. 8 Income Capitalization Approach The income capitalization approach is based on the premise that income-producing real estate is typically purchased as an investment. From an investor s point of view, the potential earning power of a property is the critical element affecting value. The concepts of anticipation and change, as they relate to supply and demand issues and substitution, are fundamental to this valuation approach. These concepts are important because the value of income-producing real estate is created by the expectation of benefits (income) to be derived in the future, which is subject to changes in market conditions. Value may be defined as the present worth of the rights to these future benefits. The validity of the income capitalization approach hinges upon the accuracy of which the income expectancy of a property can be measured. Within the income capitalization approach there are two basic techniques that can be utilized to estimate market value. These techniques of valuation are direct capitalization and yield capitalization. Direct Capitalization: A method used to convert an estimate of a single year s income expectancy into an indication of value in one direct step, either by dividing the net income estimate by an appropriate capitalization rate or by multiplying the income estimate by an appropriate factor. Direct capitalization employs capitalization rates and multipliers extracted or developed from market data. Only one year s income is used. Yield and value changes are implied, but not explicitly identified. 9 Yield Capitalization: A method used to convert future benefits into present value by 1) discounting each future benefit at an appropriate yield rate, or 2) developing an overall rate that explicitly reflects the investment s income pattern, holding period, value change, and yield rate. 10 The definition of the income capitalization approach is offered as follows: Specific appraisal techniques applied to develop a value indication for a property based on its earning capability and calculated by the capitalization of property income The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015), The Dictionary of Real Estate Appraisal, The Dictionary of Real Estate Appraisal, The Dictionary of Real Estate Appraisal, 115. Seevers Jordan Ziegenmeyer 70

146 Extraction The definition of the extraction is offered as follows: A method of estimating land value in which the depreciated cost of the improvements on an improved property is calculated and deducted from the total sale price to arrive at an estimated sale price for the land. 12 Discounted Cash Flow (DCF) Analysis A discounted cash flow analysis is a procedure in which a discount rate is applied to a set of projected income streams and a reversion. The analyst specifies the quantity, variability, timing and duration of the income streams as well as the quantity and timing of the reversion and discounts each to its present value at a specified yield rate. DCF analysis can be applied with any yield capitalization technique and may be performed on either a lease-by-lease or aggregate basis. 13 In the case of subdivision land, there is no reversion. The four main components of a discounted cash flow analysis are listed as follows: Revenue the total gross income derived from the disposition of the subject components. Absorption Analysis the time frame required to sell-off the components. Of primary importance in this analysis is the allocation of the revenue over the absorption period including the estimation of an appreciation factor (if any). Expenses the expenses associated with the sell-off of the components are calculated in this section including administration, marketing and commission costs and property taxes. Discount Rate the appropriate discount rate is derived in this portion of the analysis employing a variety of data. 12 The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015), 83. Seevers Jordan Ziegenmeyer 71

147 BULK MARKET VALUE LENNAR CORPORATION (MASTER DEVELOPER) In this section, the market value of the subject property in bulk will be estimated by employing the subdivision development method (discounted cash flow analysis); whereby, the expected revenue, absorption period, expenses and discount rate associated with the development and sell-off of the residential lots, in bulk, to merchant builders, as well as the 6.77-acre multifamily parcel and the acre proposed clubhouse site. A discounted cash flow analysis is a procedure in which a discount rate is applied to a projected revenue stream generated from the sale of individual components of a project. In this method of valuation, the appraiser/analyst specifies the quantity, variability, timing and duration of the revenue streams and discounts each to its present value at a specified yield rate. The four main items of the discounted cash flow analysis are summarized as follows: Revenue the gross income is based on the individual component values. Absorption Analysis the time frame required for sell off. Of primary importance in this analysis is the allocation of the revenue over the absorption period including the estimation of an appreciation factor (if any). Expenses the expenses associated with the sell-off are calculated in this section including infrastructure costs, administration, marketing and commission costs, as well as taxes and special taxes. Discount Rate an appropriate discount rate is derived employing a variety of data. Discussions of these four concepts begin on the following pages, with the discounted cash flow analysis offered at the end of this section. REVENUE The individual component valuations of the subject property comprise the revenue of the discounted cash flow analysis. Specifically, North Vineyard Station CFD No comprises multiple units/villages of primarily typical single-family residential lots within Vineyard Creek Station No. 1 and Vineyard Point; however, there is one (age restricted) village with small detached single-family residential lots (known as Destinations at Vineyard Point). In addition to single-family residential lots, North Vineyard Station CFD No also includes 6.77 acres of multifamily land and 1.80 acres proposed for a clubhouse. The sales comparison approach and extraction technique will be utilized to estimate the bulk value of the subject s single-family residential lots within the District. The analysis is conducted on a finished lot Seevers Jordan Ziegenmeyer 72

148 basis where backbone infrastructure and in-tracts are completed. Later in this report, we apply a lot size adjustment factor to account for size differences between the categories, and then we deduct backbone infrastructure and in-tract improvement costs as part of a discounted cash flow analysis. The market value of the 6.77 acres of multifamily land and the proposed 1.80-acre clubhouse site will also be estimated using the sales comparison approach to value. Single-Family Residential Lots Sales Comparison Approach The underlying premise of the sales comparison approach is the market value of a property is directly related to the price of comparable, competitive properties in the marketplace. In the sales comparison approach, the market value of the subject lots will be estimated by a comparison to similar properties that have recently sold, are listed for sale or are under contract. This approach is based on the economic principle of substitution. According to The Appraisal of Real Estate, 14 th Edition (Chicago: Appraisal Institute, 2013), The principle of substitution holds that the value of property tends to be set by the cost of acquiring a substitute or alternative property of similar utility and desirability within a reasonable amount of time. The sales comparison approach is applicable when there are sufficient recent, reliable transactions to indicate value patterns or trends in the market. The proper application of this approach requires obtaining recent sales data for comparison with the subject property. In order to assemble the comparable sales, we searched public records and other data sources for leads, then confirmed the raw data obtained with parties directly related to the transactions (primarily brokers, buyers and sellers). Consideration is given to factors such as property rights conveyed, financing, conditions of sale, and market appreciation or depreciation since the date of sale. Differences in physical characteristics, such as location, number of lots, typical lot size, lot premiums/discounts, site utility/topography and zoning/entitlements are considered in the analysis. On the following page is a table depicting the various lot size groupings comprising the residential lots within the District. For purposes of comparison, the District s predominant, typical lot size of 5,250 square feet will form the basis of analysis, from which adjustments will be made for the varying lot size categories within the District. Seevers Jordan Ziegenmeyer 73

149 * NORTH VINEYARD STATION CFD No (portion of) Unit /Village No. of No. Lot Dimensions Lot Size Lots Status Vineyard Creek Station No. 1 1 / 1 45 x 105 4,725 78* Improved lots 1 / 1 45 x 105 4, Unimproved lots 4 50 x 105 5, Recorded final map (unimproved lots) 5 / 8 (por.) 50 x 105 5, Tentative map (unimproved lots) 6 50 x 105 5, Tentative map (unimproved lots) 369 Excludes the 35 Lots in Village 1 that are part of Vineyard Creek Station No. 2 and the 14 lots with completed single-family homes In the collection of data for analysis, six comparables have been identified as being representative of the market and it is believed the sales data collected is sufficient for comparison to the appraised properties and pertinent to the valuation herein. The data from the comparable sales is summarized in the table below, along with a location map, followed by detailed sales sheets and a discussion of adjustments necessary for comparison with the appraised properties. For purposes of this analysis, the market data will be compared to the predominant production-oriented lot category within the District, the 5,250 square foot lots. Seevers Jordan Ziegenmeyer 74

150 COMPARABLE BULK LOT SALES SUMMARY Property Sale No. of Price per Typical No. Identification Date Sale Price Lots Lot Lot Size (sf) 1 Sun Grove - Laguna Ridge Jan-16 $6,450, $75,000 5, Poppy Ridge Road (paper) Elk Grove, Sacramento County 2 Natomas Meadows Dec-15 $4,788, $40,235 4,155 Del Paso Road at Blackrock Drive (paper) (average) Sacramento, Sacramento County 3 Fieldstone South Oct-15 $7,910, $60,846 5,775 W/O Grant Line Road, E/O Wayland Drive/Sauteme Way (paper) Elk Grove, Sacramento County 4 North Douglas Sep-14 $5,925, $75,000 5,775 N/O Douglas Rd, E/O Americanos Blvd. (paper) Rancho Cordova, Sacramento County 5 McGeary Ranch Jul-14 $9,080, $40,000 5,500 S/S of Poppy Ridge Rd., E/O Bruceville Rd. (paper) Elk Grove, Sacramento County 6 Bella Strada Jan-14 $14,575, $137,500 4,500 SEC Civic Center Dr. and Big Horn Blvd. (finished) Elk Grove, Sacramento County Seevers Jordan Ziegenmeyer 75

151 COMPARABLE BULK LOT SALES MAP Seevers Jordan Ziegenmeyer 76

152 BULK LOT COMPARABLE 1 Property Identification Project Name Sun Grove Laguna Ridge Location 8365 Poppy Ridge Road APN City Elk Grove County Sacramento County Sale Data Grantor Artisan Land Investments, LLC Grantee Taylor Morrison of California, LLC Sale Date 01/15/2016 Deed Book Page Property Rights Conveyed Fee Simple Conditions of Sale Market Financing Terms Cash equivalent Sale Price $6,450,000 Annual Special Taxes per Lot $1,850 Land Data Zoning RD-5 Residential Topography Generally level Utilities All available Number of Lots 86 Land Area (Acres) Density (Units per Acre) Approximately 4.6 units per acre Development Status at Sale Unimproved Lots Typical Lot Size (SF) 5,500 Indicators (per Lot) Sale Price $75,000 Bonds $ 1,850 Total Consideration $76,850 Site Development Costs $35,000 (est.) Permits and Fees $60,000 (est.) Remarks This transaction represents the recent sale of 18.67± acres of vacant land representing a portion a subdivision, identified as Sun Grove, in the Laguna Ridge Specific Plan area of Elk Grove. The property has tentative subdivision map approval for 86 lots with a typical lot size of 5,500 square feet. Site development costs and permits and fees were estimated based on other projects in the immediate area. Seevers Jordan Ziegenmeyer 77

153 BULK LOT COMPARABLE 2 Property Identification Project Name Natomas Meadows Location Del Paso Road at Blackrock Drive APN City Sacramento County Sacramento County Sale Data Grantor Granite Bay Natomas Meadows Grantee Lennar Homes of California, Inc. Sale Date 12/03/2015 Deed Book Page Property Rights Conveyed Fee Simple Conditions of Sale Market Financing Terms Cash equivalent Sale Price $4,788,000 Annual Special Taxes per Lot $1,575 Land Data Zoning R-1A-P Residential Topography Generally level Utilities All available Number of Lots 119 Land Area (Acres) N/Av Density (Units per Acre) N/Av Development Status at Sale See Remarks Typical Lot Size (SF) 4,155 (average) Indicators (per Lot) Sale Price $40,235 Bonds $21,680 Total Consideration $61,915 Site Development Costs $30,966 Permits and Fees $57,137 Remarks This transaction consisted of 119 lots in the Natomas Meadows subdivision located along the south side of Del Paso Road, near the intersection of Blackrock Drive. These lots consisted of (87) 47 x 85 and (32) 45 x 102. Note seven of the 45 x 102 lots were finished, the balance (112 lots) was in blue top condition. Lennar is to complete site development of the partially improved lots and is re-processing the improvement plans and final map with the City. Seevers Jordan Ziegenmeyer 78

154 BULK LOT COMPARABLE 3 Property Identification Project Name Fieldstone South Location W/O Grant Line Road, E/O Wayland Drive/Sauteme Way APN , -137 & -138 City Elk Grove County Sacramento County Sale Data Grantor East Elk Grove 24, LLC Grantee Lennar Homes of California Sale Date 10/26/2015 Deed Book Page Property Rights Conveyed Fee Simple Conditions of Sale Market Financing Terms Cash equivalent Sale Price $7,910,000 Annual Special Taxes per Lot $120 Land Data Zoning RD-5 Residential Topography Generally level Utilities All available Number of Lots 130 Land Area (Acres) Density (Units per Acre) Approximately 4.5 units per acre Development Status at Sale Unimproved Lots Typical Lot Size (SF) 5,775 Indicators (per Lot) Sale Price $60,846 Bonds $ 1,506 Total Consideration $62,352 Site Development Costs $29,000 (est.) Permits and Fees $62,500 (est.) Remarks This comparable represents the sale of 130 tentatively mapped lots in the Fieldstone South project along Grant Line Road. Based on information from other projects in the area, site development costs are estimated at $29,000 per lot and permit and fees are estimated at $62,500 per lot. Seevers Jordan Ziegenmeyer 79

155 BULK LOT COMPARABLE 4 Property Identification Project Name North Douglas Location N/O Douglas Road, E/O Americanos Boulevard APN through 079 and through 056 City Rancho Cordova County Sacramento County Sale Data Grantor Lennar Homes of California, Inc. Grantee Woodside 05N, LP Closing Date September 2014 Deed Book Page Property Rights Conveyed Fee Simple Conditions of Sale Market Financing Terms Cash Equivalent Sale Price $6,225,000 Annual Special Assessments per Lot $1,805 Land Data Zoning Single-family Topography Generally level Utilities All available Number of Lots 83 Land Area (Acres) N/Av Density (Units per Acre) N/Av Development Status at Sale Improved Lots Typical Lot Size (SF) 5,775 Indicators (per Lot) Sale Price $75,000 Bonds $24,840 Total Consideration $99,840 Site Development Costs $ 0 Permits and Fees $65,000 Remarks This comparable represents the sale of a 79-lot improved village located in the North Douglas community of Rancho Cordova. The lots have a typical size of 5,775 square feet and are fully improved. According to a representative of the seller the transaction was based on 79 lots for $75,000 per lot. Public records shows an addition of four lots ( through 056) for a total of 83, which are currently used for models, and a sale price of $6,225,000, which also equates to $75,000 per lot. Seevers Jordan Ziegenmeyer 80

156 BULK LOT COMPARABLE 5 Property Identification Project Name McGeary Ranch Location Along the south side of Poppy Ridge Road, east of Bruceville Road APN City Elk Grove County Sacramento County Sale Data Grantor Stockbridge Capital Grantee Richland Communities Closing Date July 2014 Deed Book Page Property Rights Conveyed Fee Simple Conditions of Sale Market Financing Terms Cash Equivalent Sale Price $9,080,000 Annual Special Assessments per Lot $1,850 Land Data Zoning Single-family Topography Generally level Utilities Partial Number of Lots 227 Land Area (Acres) Density (Units per Acre) Approximately 5.0 units per acre Development Status at Sale Unimproved Lots Typical Lot Size (SF) 5,500 Indicators (per Lot) Sale Price Bonds Total Consideration $40,000 $21,219 $61,219 Site Development Costs $40,000 Permits and Fees $70,000 Remarks This comparable is the July 2014 sale of 45.77± acres of vacant land identified as the proposed McGeary Ranch single-family subdivision in the Laguna Ridge Specific Plan area of Elk Grove. The property has tentative subdivision map approval for 227 lots with a typical lot size of 5,500 square feet. Presently the site is unimproved and requires substantial infrastructure improvements. Seevers Jordan Ziegenmeyer 81

157 BULK LOT COMPARABLE 6 Property Identification Project Name Bella Strada Location Southwest corner of Civic Center Drive and Big Horn Boulevard APN through -106 City Elk Grove County Sacramento County Sale Data Grantor MBK Homes Grantee Richmond American Homes Closing Date January 2014 Deed Book Page Property Rights Conveyed Fee Simple Conditions of Sale Market Financing Terms Cash Equivalent Sale Price $14,575,000 Annual Special Assessments per Lot $1,850 Land Data Zoning Single-family Topography Generally level Utilities All available Number of Lots 106 Land Area (Acres) 22.7 Density (Units per Acre) Approximately 4.7 units per acre Development Status at Sale Improved Lots Typical Lot Size (SF) 4,500 Indicators (per Lot) Sale Price $137,500 Bonds $ 21,219 Total Consideration $158,719 Site Development Costs $ 0 Permits and Fees $ 50,000 Remarks This sale is the January 2014 transfer of 106 single-family residential lots from MBK Homes to Richmond American Homes. The typical lot size is 4,500 square feet. Richmond American Homes is now marketing homes on the lots identified as Bella Strada, with home sizes ranging from 2,250 to 2,950 square feet, with prices currently starting in the low $400s. Seevers Jordan Ziegenmeyer 82

158 Adjustments and Conclusion The comparable transactions are adjusted based on the profile of the subject property with regard to categories that affect market value. For certain adjustments such as site development cost, permits and fees and special taxes, adjustments are made using actual or estimated (present value) dollar amounts. Other adjustments may be categories as either superior or inferior, with percentage adjustments applied accordingly. If a comparable has an attribute considered superior to that of the subject, it is adjusted downward to negate the effect the item has on the price of the comparable. The opposite is true of categories considered inferior to the subject. The adjustments are made in consideration of paired sales, the appraiser s experience and knowledge and interviews with market participants. At a minimum, the appraiser considers the need to make adjustments for the following items: Expenditures after Sale (i.e. site development costs (if any), permits and fees, bond encumbrance and atypical carrying costs such as Homeowner s Association fees) Property rights conveyed Financing terms Conditions of sale (motivation) Market conditions (time) Location Physical features A detailed analysis involving the adjustment factors is presented below. Loaded Lot Analysis Since each comparable has the same highest and best use as the subject property near term singlefamily residential development we apply adjustments for remaining site development costs (if any) and permits and fees on a dollar-for-dollar basis. That is, the comparables are analyzed on a loadedlot-basis, where any remaining site development costs and permits and fees due at building permit are added to the lot price to yield a price that reflects the total consideration. After all other adjustments are applied (market conditions, physical characteristics, etc.), we deduct the subject s remaining permits and fees to determine the subject s finished lot value. We consider the special taxes of the comparables and their remaining bond terms to estimate a remaining principal bond balance. While bond interest rates may vary somewhat, for approximation purposes, we utilize a 6% discount rate. The estimated bond encumbrances are added to the loaded lot prices on a dollar-for-dollar basis. As HOA fees are associated with intrinsic benefits, such as community pools, services, etc., no adjustments for this item are applicable. Seevers Jordan Ziegenmeyer 83

159 Property Rights Conveyed In transactions of real property, the rights being conveyed vary widely and have a significant impact on the sales price. As previously noted, the opinion of value in this report is based on a fee simple estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat, as well as non-detrimental easements, community facility districts and conditions, covenants and restrictions (CC&Rs). All the comparables represent fee simple estate transactions. Therefore, adjustments for property rights are not necessary. Financing Terms In analyzing the comparables, it is necessary to adjust for financing terms that differ from market terms. Typically, if the buyer retained third party financing (other than the seller) for the purpose of purchasing the property, a cash price is presumed and no adjustment is required. However, in instances where the seller provides financing as a debt instrument, a premium may have been paid by the buyer for below-market financing terms or a discount may have been demanded by the buyer if the financing terms were above market. The premium or discounted price must then be adjusted to a cash equivalent basis. The comparable sales were cash to the seller transactions and do not require adjustments. Conditions of Sale Adverse conditions of sale can account for a significant discrepancy from the sales price actually paid compared to that of the market. This discrepancy in price is generally attributed to the motivations of the buyer and the seller. Certain conditions of sale are considered to be non-market and may include the following: a seller acting under duress, a lack of exposure to the open market, an inter-family or inter-business transaction for the sake of family or business interest, an unusual tax consideration, a premium paid for site assemblage, a sale at legal auction, or an eminent domain proceeding. All of the comparables represent arm s-length, market transactions; therefore, no adjustments for conditions of sale are warranted. Seevers Jordan Ziegenmeyer 84

160 Market Conditions Market conditions vary over time, but the date of this appraisal is for a specific point in time. In a dynamic economy one that is undergoing changes in the value of the dollar, interest rates and economic growth or decline extra attention needs to be paid to assess changing market conditions. Significant monthly changes in price levels can occur in several areas of a city, while prices in other areas remain relatively stable. Although the adjustment for market conditions is often referred to as a time adjustment, time is not the cause of the adjustment. Comparable 6 transferred in the beginning of 2014 when price points for bulk land transactions were higher than the current market. As such this comparable is adjusted downward for market conditions. No adjustments are warranted for the remaining comparables. Physical Characteristics The physical characteristics of a property can impact the selling price. Those that may impact value include the following: Location Location adjustments are applied in consideration of area home prices, household income and other characteristics. The subject property is located in unincorporated Sacramento County, which is considered an average location relative to other submarkets in the Sacramento region. The majority of the comparables are located in Elk Grove or Rancho Cordova, with one comparable located in Natomas. Downward adjustments are applied to those comparables located in Elk Grove as their locations are superior due to proximity to regional thoroughfares and supporting commercial development. Conversely, the Natomas transaction is adjusted upward for its inferior location. No other adjustments for location are required. Community Appeal The Vineyard Creek development offers average community appeal, with minor negative external influences including the high-tension power lines along the eastern boundary. All of the comparables are considered to have a similar community appeal; thus, no adjustment for community appeal is warranted. Number of Lots Based on the subject s typical lot size (5,250 square feet), there are 279 lots planned of this size within three units/villages of the subject portion of Vineyard Creek (for an average of 93 lots per unit/village). Generally, there is an inverse relationship between the number of lots and price per lot Seevers Jordan Ziegenmeyer 85

161 such that larger projects (with a greater number of lots) achieve a lower price per lot. However, under current market conditions, market participants indicate that due to strong builder demand, significant discounts are not being achieved for larger transactions. Thus, the degree of adjustments for the larger transactions are not as substantial as the smaller transactions analyzed. Comparable 5 is adjusted upward for its significantly higher number of lots as compared to the subject. Lot Size (Typical) Adjustments for differences in lot size between the comparables and subject are estimated by applying lot size adjustment factors to difference in lot size. We have considered paired sales to assist with the determination of a lot size adjustment factor, as well as market participant interviews. Topography/Utility Differences in contour, drainage, soil conditions, as well as project design, can affect the utility and, therefore, the market value of the properties. The subject property and comparables are planned for traditional single-family lots and all have average site utility. Adjustments for this factor do not apply. Lot Premiums The subject and comparables are anticipated to achieve a similar level of lot premiums (cul-de-sac, corner, inverted corner). None of the comparables benefit from view or significant open space premiums. Adjustments for this factor do not apply. Deductions for Remaining Permits Finished Lot Indicator As stated, the comparables are analyzed on a loaded lot basis. After applying all adjustments, we deduct the subject s effective permits and fees costs estimated at $32,057 per lot, inclusive of fee credits (see the Site Description section for a detailed discussion), to yield lot prices reflective of finished lots. After concluding a finished lot value, later in this report we apply additional deductions for remaining development costs. Adjustment Grid The grid on the next page reflects the afore-discussed adjustments. Seevers Jordan Ziegenmeyer 86

162 ADJUSTMENT GRID - BULK LOT SALES Elements of Comparison: Subject Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 Sale 6 Lot Price $75,000 $40,235 $60,846 $75,000 $40,000 $137,500 Remaining Site Development Costs $0 $35,000 $30,966 $29,000 $0 $40,000 $0 Permits and Fees $32,057 $60,000 $57,137 $62,500 $65,000 $70,000 $50,000 Loaded Lot Price Before Bonds $170,000 $128,338 $152,346 $140,000 $150,000 $187,500 Special Taxes $1,850 $1,575 $120 $1,805 $1,850 $1,850 Years to Bond Maturity Bond Encumbrance (Present Value at 6%) $21,219 $21,680 $1,506 $24,840 $21,219 $21,219 Loaded Lot Price After Bonds $191,219 $150,018 $153,852 $164,840 $171,219 $208,719 Property Rights Conveyed Fee Simple Similar Similar Similar Similar Similar Similar Adjustment Financing Terms Cash Equiv. Similar Similar Similar Similar Similar Similar Adjustment Conditions of Sale Market Similar Similar Similar Similar Similar Similar Adjustment Market Conditions Jan-16 Jan-16 Dec-15 Oct-15 Sep-14 Jul-14 Jan-14 Adjustment (Appraisal) Downward Physical Characteristics: Location Sac. County Sl. Superior Inferior Sl. Inferior Similar Sl. Superior Sl. Superior Adjustment Sl. Downward Upward Sl. Upward Sl. Downward Sl. Downward Community Appeal Average Similar Similar Similar Similar Similar Similar Adjustment Number of Lots Adjustment Upward Lot Size (Typical) 5,250 5,500 4,155 5,775 5,775 5,500 4,500 Adjustment Upward Sl. Upward Topography/Utility Average Similar Similar Similar Similar Similar Similar Adjustment Lot Premiums/Discounts Average Similar Similar Similar Similar Similar Similar Adjustment Summary of Adjustments Sl. Downward Upward Sl. Upward Similar Similar Downward Adjusted Loaded Lot Value < $191,219 > $150,018 > $153,852 $164,840 $171,219 < $208,719 Concluded Loaded Lot Value: $170,000 Less: Permits and Fees (typical) ($32,057) Less: Remaining Site Development Costs $0 Estimated Improved Lot Indicator $137,943 $138,000 (rounded) Conclusion of Improved Lot Value Sales Comparison Approach The market data set consists of various sales that are considered reasonable indicators of market value for the fee simple interest in the typical lot category (5,250 square feet) of the subject property. The comparables reflect an unadjusted range of $40,000 to $137,500 per lot; however, the broad range is the result of the data including both unimproved and improved single-family lots. On a loaded lot basis, and considering assumed bond debt, the comparables reflect a range of $150,018 to $208,719 per lot. The adjusted range of the data set indicates a loaded lot value lower than Comparables 1 and 6, higher than Comparables 2 and 3, and similar to Comparables 4 and 5. Utilizing the elements of comparison described on the preceding pages, we have arrayed a qualitative ranking of the comparables in the table on the next page, based on the loaded lot price. Seevers Jordan Ziegenmeyer 87

163 Loaded Lot Property Price Per Lot Overall Similarity Comparable 6 $208,719 Superior Comparable 1 $191,219 Sl. Superior Comparable 5 $171,219 Similar SUBJECT $170,000 - Comparable 4 $164,840 Similar Comparable 3 $153,852 Sl. Inferior Comparable 2 $150,018 Inferior In general, an indicated market value estimate for a loaded lot is between $164,840 and $171,219. Based upon our analysis, a market value conclusion of $170,000 per loaded lot is concluded for the typical lot category (5,250 square feet). As shown in the grid, after deducting $32,057 for permits and fees, the finished lot indicator is $138,000 (rounded). The next section of the report will be an extraction analysis. Seevers Jordan Ziegenmeyer 88

164 Extraction Analysis As support for the estimate of finished lot value concluded in the sales comparison approach for the typical lot category (5,250 square feet), we utilize an extraction (residual) analysis that takes into account home prices, direct and indirect construction costs, accrued depreciation and developer s incentive in order to arrive at an estimate of finished lot value. The elements of the extraction technique are discussed below. Revenue The typical lot is 5,250 square feet. Based on the analysis in the preceding Market Valuation Floor Plans section of this report, we estimate the subject s smallest-sized home on the subject (Vineyard Creek) contains approximately 1,603 square feet and would have a corresponding base price of approximately $365,000, inclusive of bonds. This estimate will be utilized in the extraction analysis. Expense Projections General and Administrative These expenses consist of management fees, liability and fire insurance, inspection fees, appraisal fees, legal and accounting fees and copying or publication costs. This expense category typically ranges from 2.5% to 4.0%, depending on length of project and if all of the categories are included in a builder s budget. We have used 3.0% for general and administrative expenses. Marketing and Sale These expenses typically consist of advertising and promotion, closing costs, sales operations, and sales commissions. The expenses are expressed as a percentage of the gross sales revenue. The range of marketing and sales expenses typically found in projects within the subject s market area is 5.0% to 6.5%. A figure of 6.0%, or 3.0% for marketing and 3.0% for sales, is estimated in the marketing and sales expense category. Direct and Indirect Construction Costs Construction costs are generally classified into direct and indirect costs. Direct costs reflect the cost of labor and materials to build the project. Direct costs generally are lower per square foot for larger floor plans, all else being equal, due to economies of scale. Indirect items are the carrying costs and fees incurred in developing the project and during the construction cycle. Seevers Jordan Ziegenmeyer 89

165 Construction quality and market-segment are significant factors that affect direct construction costs. In addition, national/public builders, which are able to achieve lower costs due to the larger scale in which orders are placed, routinely achieve lower direct costs. Various direct cost comparables from projects throughout the Sacramento region are profiled in the table on the following page. Project Effective Number Construction Floor Plan Direct Costs Location Date of Units Quality (SF) per SF Del Paso Heights Average 768 $ Sacramento County entry-level 1,253 $ ,034 $ ,364 $59.08 West Sacramento Average 1,867 $62.01 Yolo County to Good 2,401 $ ,601 $ ,860 $ ,264 $55.87 West Sacramento Average 1,867 $69.63 Yolo County to Good 2,401 $ ,601 $ ,860 $62.24 Dixon Average 1,951 $56.00 Solano County entry-level or 2,215 $55.00 first move-up 2,296 $ ,204 $ ,506 $50.00 Lincoln Average 1,915 $63.14 Placer County move-up 2,075 $ ,797 $ ,866 $ ,927 $52.79 Based on the cost comparables, and considering the assumed average quality product line for the benchmark lots, a direct cost estimate of $65 per square foot is applied to the 1,603 square foot home, given the principle of economies of scale. Regarding indirect costs, the following list itemizes some of the typical components that generally comprise indirect costs: Architectural and engineering fees for plans, plan checks, surveys and environmental studies Appraisal, consulting, accounting and legal fees The cost of carrying the investment in land and contract payments during construction. If the property is financed, the points, fees or service charges and interest on construction loans are considered Seevers Jordan Ziegenmeyer 90

166 All-risk insurance The cost of carrying the investment in the property after construction is complete, but before sell-out is achieved Developer fee earned by the project coordinator Interest reserve Conversations with homebuilders indicate the indirect costs generally range anywhere from 10% to 15% of the direct costs (excluding marketing, sales, general and administrative expenses, taxes, which are accounted for separately). An estimate of 12% is considered reasonable for the subject. Permits and Fees As noted, permits and fees due at building permit are projected to total $32,057 per lot (inclusive of fee credits). Remaining Site Development Cost Most of the subject lots in Vineyard Creek are unimproved and require further site development costs with the exception of Unit 1/Village 1. However, the extraction analysis will be used to value these lots in an as if finished state, with remaining site development costs accounted for in the next section. Accrued Depreciation For new construction on the subject, an allocation for deprecation (physical, functional, or economic) is not applicable. Developer s Incentive According to industry sources, developer s incentive (profit) historically has ranged anywhere from 5% to 25%. With a predominate range of 5% to 15%. Profit is based on the perceived risk associated with the development. Low profit expectations are typical for projects focused on more affordable product with faster sales rates. Higher profit expectations are common in projects with more risk such as developments where sales rates are slower, project size produces an extended holding period or the product type is considered weak or untested. Elements affecting profit include location, supply/demand, anticipated risk, construction time frame and project type. Another element considered in profit expectations is for the development stage of a project. First phases typically generate a lower profit margin due to cautious or conservative pricing, as new subdivisions in competitive areas must become established to generate a fair market share. Additionally, up front development costs on first phases can produce lower profit margins. Seevers Jordan Ziegenmeyer 91

167 Positive attributes of the subject property include: Approved entitlements Desirable location Good transportation linkages Recent price increases and steady yearly absorption There are generally few negative attributes associated with the subject property, other than the potential for deterioration in market conditions in the residential sector that would result from a change in macroeconomic factors (e.g., unemployment rates, interest rates, etc.). A survey of profit expectations is presented below: Data Profit Source Expectations Lance Goulette - Mission Peak Co. (2015) 10% net profit is the target for any residential development, which typically is geared towards move-up homebuyers with a Bay Area concentration Josh Roden - Meritage (2013) 8% to 10% net profit, regardless of product type, market area or lot condition Jeb Elmore - Lewis Operating Corp (2013) 8% to 10%, with better located projects with less uncertainty regarding pricing and absorption at the lower end of the range and higher risk projects nearer the high end of the range. Dustin Barker - Lennar (2011) 10% to 15% Greg Ackerman - Pulte (2010) 9% profit, 18+% gross margin (5% for marketing/sales, 4% for G&A) Steve Schnable - JMC Homes (2008) 15% line item profit expectation with two to three home sales per month at current home prices Tulare Windmill Ventures, LLC (2007) 15% typical profit factor for single-family subdivisions Mike Grant - Premier Homes (2007) 12% static profit John Bacigalupi - Beazer Homes (2007) Static profit expectation was 20% during the period of expansion ( ), but it is now 10% to 15% given the recent moderation/stabilization in the residential market David Jacobsen - Ridgecrest Homes (2007) 10% for typical single-family projects, up to a maximum of 35% Mike Winn - Reynen & Bardis (2005) 12% to 25% profit pre-tax; typical development timeline of 5 to 8 years Doug Eikenbary - William Lyon Homes (2005) 8% to 10% target profit for both single-family subdivisions and master-planned communities; typical development timeline of 1 to 2 years Based on the preceding discussion and developer surveys, we have concluded an estimate of 10.0% for developer s incentive. Conclusion Our estimate of finished lot value for the subject s typical lot category via the extraction analysis is presented on the following page. Seevers Jordan Ziegenmeyer 92

168 EXTRACTION ANALYSIS Revenue Smallest Floor Plan Size (Vineyard Creek) 1,603 SF Typical Home Price $365,000 Expense Projections G & A 3.0% of Retail Value $10, % of Retail Value $21,900 Average Direct $65.00 /SF $104,195 Indirect 12.0% of Direct Cost $12,503 Permits and Fees Due at BP $32,057 Per Lot $32,057 Developer's Incentive 10.0% of home price $36,500 $218,105 Residual Finished Lot Value: $146,895 Rd. $147,000 Final Conclusion of Finished Lot Value (Typical Lot) For the typical lot (5,250 square feet), the sales comparison approach indicated a value of $138,000 per improved/finished lot and the extraction analysis indicated $147,000 per improved/finished lot. In our opinion the extraction analysis is primarily a supportive indicator for the results of sales comparison approach. With greater weight on the indication of the sales comparison approach, a value of $140,000 per lot for the larger lot category is concluded. In the following table, adjustments for discrepancies in lot size are made to the above-concluded typical lot for each typical lot size category within the subject portion of North Vineyard Station CFD No A survey of active new home subdivisions, as well as an analysis of bulk lot transactions in the market, suggests differences in typical, or average, lot sizes can generate between $3 and $10 per square foot in lot premiums. Therefore, for purposes of this analysis, an adjustment of $7 per square foot differential in lot size is considered reasonable for the traditional lot size categories. Number Indicated Lot of Lot Size Lots Description Values 4, Single-Family Lots $136,000 5, Single-Family Lots $140,000 5, Single-Family Lots $140,000 5, Single-Family Lots $140,000 Seevers Jordan Ziegenmeyer 93

169 It s worth noting 291 of the 369 production oriented residential lots held by the master developer represent unimproved lots, which will require completion of infrastructure and in-tract costs for development. These costs will be considered in the market valuation, in bulk, of the master development held properties, which are presented at the end of this section. Multifamily Residential Land In this section of the report, we will utilize the sales comparison approach to estimate the market value of a subject s multifamily residential land component. Based on County documents (the Sacramento County Housing Element ), the subject s 6.77-acre multifamily site has 128 available units. This analysis is conducted on a per unit basis. COMPARABLE MULTIFAMILY RESIDENTIAL LAND SUMMARY Sale Sale Land Area # Price PV Bonds Total No. Location Date Price Acre/SF Units per Unit Per Unit Consideration Zoning 1 Harbour Point Drive & Maritime Drive Oct-15 $725, $11,508 $85,347 $12,863 RD-25 Elk Grove 132,858 $1,355 APN: & N/S Blue Oaks Blvd., E/O Fiddyment Rd. Sep-14 $4,000, $13,333 $2,350,500 $21,168 R-3 Roseville 549,727 $7,835 APN: SWC Aguilar Rd. & China Garden Rd. Sep-14 $775, $15,816 $0 $15,816 R-3 Rocklin (contract) (approximate) 149,846 $0 APN: Elk Grove Blvd. Mar-14 $630, $10,500 $19,980 $10,833 RD-20 Elk Grove 130,680 $333 APN: &330 G St. & 620 4th St. Feb-14 $960, $10,909 $0 $10,909 R-3 West Sacramento 81,457 $0 APN: ; & Riverside Blvd. Jun-13 $1,500, $13,761 $1,544 $13,776 R-2B-R Sacramento 225,205 $14 APN: Seevers Jordan Ziegenmeyer 94

170 COMPARABLE MULTIFAMILY RESIDENTIAL LAND MAP Seevers Jordan Ziegenmeyer 95

171 Property Identification Multifamily Residential Land COMPARABLE 1 Harbour Point Drive & Maritime Drive Elk Grove, CA Sacramento County APN: & -018 Sale Data Grantor Samara Baveljit S & B K Trust Grantee Dhir Capital, Inc. Sale Date 10/30/2015 Deed Book Page Property Rights Fee Simple Conditions of Sale Market Financing Terms Cash Equivalent Sale Price $725,000 PV of Bonds $85,347 Land Data Land Area (SF) 132,858 Land Area (Acres) 3.05 Zoning RD-25, Multiple-family Residential Number of Units 63 Shape Irregular Corner Orientation Yes Street Frontage Harbour Point and Maritime Drives Topography Generally level Offsite Improvements In place Onsite Improvements None Indicators Sale Price per Unit $11,508 PV of Bonds per Unit $1,355 Remarks This sale consists of 3.05 acres of multifamily land in Elk Grove. The buyer acquired the property in October 2015 for $11,508 per unit, plus the assumption of bonds in the amount of $1,355 per unit. The unit count (63) was provided by the Elk Grove General Plan Housing Element which changed this sites general plan and zoning designation from commercial (C and TC, respectively) to high density residential (HDR and RD-25, respectively) with a realistic unit capacity of 63 units. Seevers Jordan Ziegenmeyer 96

172 Property Identification Multifamily Residential Land COMPARABLE 2 North side of Blue Oaks Boulevard, east of Fiddyment Road Roseville, CA Placer County APN: Sale Data Grantor West Roseville Development Company Grantee Central Valley Property Advisors Sale Date 09/19/2014 Deed Book Page Property Rights Fee Simple Conditions of Sale Market Financing Terms Cash Equivalent Sale Price $4,000,000 PV of Bonds $2,350,500 Land Data Land Area (SF) 549,727 Land Area (Acres) Zoning R-3, Multiple-family Residential Number of Units 300 Shape Generally rectangular Corner Orientation No Street Frontage Blue Oaks Boulevard Topography Generally level Offsite Improvements In place Onsite Improvements None Indicators Sale Price per Unit $13,333 PV of Bonds per Unit $7,835 Remarks This sale consists of acres of multifamily land in Roseville. The buyer acquired the property in September 2014 for $13,333 per unit, plus the assumption of bonds in the amount of $7,835 per unit. Seevers Jordan Ziegenmeyer 97

173 Property Identification Multifamily Residential Land COMPARABLE 3 SWC Aguilar Road & China Garden Road Rocklin, CA Placer County APN: Sale Data Grantor Scott Cooper Grantee N/Av (pending) Sale Date 9/2014 (contract) Deed Book Page N/Av (pending) Property Rights Fee Simple Conditions of Sale Market Financing Terms Cash Equivalent Sale Price $775,000 (approximate) PV of Bonds $0 Land Data Land Area (SF) 149,846 Land Area (Acres) 3.44 Zoning R-3, Multiple-family Residential Number of Units 49 Shape Irregular Corner Orientation Yes Street Frontage Aguilar Road and China Garden Road Topography Generally level Offsite Improvements Partial Onsite Improvements None Indicators Sale Price per Unit $15,816 PV of Bonds per Unit $0 Remarks This is the pending sale of a 3.44-acre multifamily site located in Rocklin, just south of Sierra College. The property sold for $15,816 per unit. Seevers Jordan Ziegenmeyer 98

174 Property Identification Multifamily Residential Land COMPARABLE Elk Grove Boulevard Elk Grove, CA Sacramento County APN: Sale Data Grantor Pacific West Communities Grantee Elk Grove Pacific Associates Sale Date 03/13/2014 Deed Book Page Property Rights Fee Simple Conditions of Sale Market Financing Terms Cash Equivalent Sale Price $630,000 PV of Bonds $19,980 Land Data Land Area (SF) 130,680 Land Area (Acres) 3.00 Zoning RD-20, Multifamily Number of Units 60 Shape Generally rectangular Corner Orientation No Street Frontage Elk Grove Boulevard Topography Generally level Offsite Improvements In place Onsite Improvements None Indicators Sale Price per Unit $10,500 PV of Bonds per Unit $333 Remarks This comparable represents the second sale in 13 months for $630,000. The first transaction (February 15, 2013) was a short sale with an original asking price was $995,000 and the property was on the market for about 8 months. Based on the appraisers research and verification process, we know of no reason why this is not a market transaction to unrelated, willing parties. The property is located between a shopping center and a senior residential facility. Seevers Jordan Ziegenmeyer 99

175 Property Identification Multifamily Residential Land COMPARABLE & 330 G Street and 620 4th Street West Sacramento, CA Yolo County APN: , & -011 Sale Data Grantor Richard Strock PSP Grantee 4th Street Investors, LP Sale Date 02/04/2014 Deed Book Page Property Rights Fee Simple Conditions of Sale REO/Market Financing Terms Cash Equivalent Sale Price $960,000 PV of Bonds $0 Land Data Land Area (SF) 81,457 Land Area (Acres) 1.87 Zoning R-3, Multiple-family Residential Number of Units 88 Shape Irregular Corner Orientation Yes Street Frontage F & G Streets and 4th & 5th Streets Topography Generally level Offsite Improvements In place Onsite Improvements None Indicators Sale Price per Unit $10,909 PV of Bonds per Unit $0 Remarks This sale consists of three parcels north of Raley Field that were entitled for condominiums. The seller was a loan servicing company. At the time of sale, the buyer intended to consider developing either rental or for-sale housing on the property. Seevers Jordan Ziegenmeyer 100

176 Property Identification Multifamily Residential Land COMPARABLE Riverside Boulevard Sacramento, CA Sacramento County APN: Sale Data Grantor Max H. & Eleanor Hoseit Grantee Ethos Properties, LLC Sale Date 06/14/2013 Deed Book Page Property Rights Fee Simple Conditions of Sale Market Financing Terms Cash Equivalent Sale Price $1,500,000 PV of Bonds $1,544 Land Data Land Area (SF) 225,205 Land Area (Acres) 5.17 Zoning R-2B-R, Multifamily Residential Number of Units 109 Shape Irregular Corner Orientation Yes Street Frontage Riverside Boulevard and 43rd Avenue Topography Generally level Offsite Improvements All to site Onsite Improvements None Indicators Sale Price per Unit $13,761 PV of Bonds per Unit $14 Remarks This comparable represents the sale of a multifamily residential parcel. The parcel is zoned for up to 21 dwellings per acre. According to the listing broker, the buyer plans to construct an elementary school on the site, which has since been completed. Seevers Jordan Ziegenmeyer 101

177 Adjustments and Conclusion The comparable multifamily residential land transactions are adjusted based on the profile of the subject s average multifamily residential land parcel (128 units on 6.77 acres, with a density of 18.9 units per acre) with regard to categories that affect market value. A discussion involving each of these factors is presented as follows: Present Value of Bonds Bond debt has a direct impact on the amount for which the end product will sell. In an effort to account for the impact of bond indebtedness on the sales price, we establish a present value amount for the bond encumbrance based on the annual assessment. The present value amount is based on the annual assessment payment, an interest rate of 6.0% and the remaining term from the date of sale. Comparables 1, 2, 4 and 6 are encumbered by bonds; thus, the present value of the bonds is considered in this analysis. Property Rights Conveyed In transactions of real property, the rights being conveyed vary widely and have a significant impact on the sales price. The opinion of value for the retail land in this report is based on a fee simple estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat, as well as non-detrimental easements, community facility districts and conditions, covenants and restrictions (CC&Rs). All the comparables represent fee simple estate transactions. Therefore, adjustments for property rights are not necessary. Financing Terms In analyzing the comparables, it is necessary to adjust for financing terms that differ from market terms. Typically, if the buyer retained third party financing (other than the seller) for the purpose of purchasing the property, a cash price is presumed and no adjustment is required. However, in instances where the seller provides financing as a debt instrument, a premium may have been paid by the buyer for below-market financing terms or a discount may have been demanded by the buyer if the financing terms were above market. The premium or discounted price must then be adjusted to a cash equivalent basis. All of the comparable sales were cash to the seller transactions and do not require adjustments. Conditions of Sale Adverse conditions of sale can account for a significant discrepancy from the sales price actually paid compared to that of the market. This discrepancy in price is generally attributed to the Seevers Jordan Ziegenmeyer 102

178 motivations of the buyer and the seller. Certain conditions of sale are considered to be non-market and may include the following: a seller acting under duress, a lack of exposure to the open market, an inter-family or inter-business transaction for the sake of family or business interest, an unusual tax consideration, a premium paid for site assemblage, a sale at legal auction, or an eminent domain proceeding. Most of the comparable transactions were arms-length and do not require a conditions of sale adjustment. However, Comparable 5 was a REO transaction, but was adequately marketed and its sale price reflected market pricing; therefore, no adjustment is warranted. Expenditures After Sale This category includes all costs required after the transaction. No adjustments are required for this element of comparison. Market Conditions In evaluating market conditions, changes between the comparable sales date and the effective date of this appraisal may warrant adjustment; however, if market conditions have not changed, then no adjustment is required. All of the comparables sold or went into contract between 2013 and Those comparables that transferred in 2013 are adjusted upward for the improvement in market conditions since these properties sold. Physical Characteristics The physical characteristics of a property can impact the selling price. Those that may impact value include the following: Location The subject property is located in unincorporated Sacramento County, in the North Vineyard community, which is generally considered an average location for the regional area. Comparables 2 and 3 are located in areas considered superior to the subject s location. More specifically, these comparables are located in the desirable South Placer County. Varying adjustments are applied to these comparable based on varying demographics, growth rates, surrounding uses and property values for the immediate area of each comparable. No other adjustments are applied. Seevers Jordan Ziegenmeyer 103

179 Visibility/Accessibility The visibility and accessibility of a property can have a direct impact on property value. For example, if a property is landlocked, this is considered to be an inferior position compared to a property with open accessibility. However, if a property has good visibility or is in proximity to major linkages, this is considered a superior amenity in comparison to a property with limited visibility. All of the comparables possess similar visibility and accessibility characteristics as the subject property; therefore, no adjustments are warranted. Number of Units / Project Size Differences in number of units can affect the price per unit paid because there are economies of scale when developing a larger project. That is, all else being equal, larger projects tend to sell for less per unit than smaller projects. Based on County documents (the Sacramento County Housing Element ), the subject s 6.77-acre multifamily site has 128 available units. Comparable 3 can accommodate significantly fewer units than the subject property and is adjusted downward. Offsite Improvements Based on a hypothetical condition, the subject property has all offsite improvements in place. Comparable 3 transferred with partial offsite improvements; therefore, a slight upward adjustment is applied to this comparable, as the subject is valued with all offsite improvements in place. The remaining comparables transferred with all offsite improvements in place and no adjustments are applied. Onsite Improvements The subject s multifamily parcels have no onsite improvements, nor do any of the comparables; thus, no adjustments are warranted. Density (Units per Acre) With 128 available units, the subject s multifamily site would have a density of 18.9 units per acre. All else being equal, properties that allow for lower density development sell for less on a per-acre basis than those that allow for higher density development. Most of the comparables have similar densities as the subject; however, Comparable 5 can allow for a significantly higher project density (46.3 units per acre) and an upward adjustment is warranted. Seevers Jordan Ziegenmeyer 104

180 Site Utility Differences in shape, contour, drainage or soil conditions can affect the utility and, therefore, the market value of the land. The subject property exhibits average site utility, with a functional shape, generally level topography and no major impediments to development. Most of the comparables have similar site utility and no adjustments are required; however, Comparable 3 is adjusted upward for the amount of trees on the site. Zoning/Entitlements Comparable 2 transferred with approved multifamily residential entitlements; therefore, this transaction warrants a downward adjustment. Conclusion of Multifamily Residential Land Value Sales Comparison Approach Several land sales were analyzed for comparison to the subject s multifamily residential parcel. The market data analyzed herein reflects a range in value of $10,833 to $21,168 per unit (inclusive of bonds). While Comparable 1 required the fewest adjustments and is the most recent transaction, somewhat more emphasis is given to this comparable, with support from the balance of the data set in estimating the market value for the subject s multifamily land component. The following grid arrays the comparables as they relate to the subject, suggesting where the subject s land value should fall in comparison. Indicator Total Price per Unit (inlcusive of bonds) Overall the comparable is deemed to the subject property Market Conditions Location Visibilty/ Accessibility Number of Units / Project Size Offsite Improvements Onsite Improvements Density (Units/Acre) Site Utility Zoning/ Entitlements Comparable 2 $21,168 Sig. Superior Sep-14 Sig. Superior Similar 300 Similar Similar 23.8 Similar Approved Comparable 3 $15,816 Superior Sep-14 Superior Similar 49 Partial Similar 14.4 Sl. Inferior None SUBJECT Aug-15 Average Average 128 All to site (hypothetical) None 18.9 Average None Comparable 1 $12,863 Similar Oct-15 Similar Similar 63 Similar Similar 20.7 Similar None Comparable 6 $13,776 Sl. Inferior Jun-13 Similar Similar 109 Similar Similar 21.0 Similar None Comparable 4 $10,833 Inferior Mar-14 Similar Similar 60 Similar Similar 20.0 Similar None Comparable 5 $10,909 Inferior Feb-14 Similar Similar 88 Similar Similar 46.3 Similar Approved Note: "" symbol connotes a "Superior" element of comparison to the subject property warranting a downward adjustment, "" symbol connotes an "Inferior" element of comparison warranting an upward adjustement, and "" symbol connotes "Similar" warrenting no adjustment Based on the preceding discussion, and considering the specifics of the subject property, a conclusion of land value for the subject s multifamily residential parcel of $14,000 per unit is estimated. Applying this unit indicator to the available unit count for the subject s multifamily parcel results in the following estimate of land value via the sales comparison approach: 128 units x $14,000 per unit = $1,792,000 Seevers Jordan Ziegenmeyer 105

181 Proposed Clubhouse Site In this section of the report, we will utilize the sales comparison approach to estimate the market value of a subjects proposed clubhouse site (approximately 1.80 acres of land area). Since this site is designated for multifamily residential use, we have utilized the same multifamily land sales in our analysis of the proposed clubhouse site. Based on the density available for the multifamily parcel (18.9 units per acre), suggests the clubhouse site could support 34 units, which will be used in our analysis of the proposed clubhouse site. Applying the previously concluded $14,000 per unit indicator to the number of units that could be constructed on the proposed clubhouse site results in the following estimate of land value via the sales comparison approach: 34 units x $14,000 per unit = $476,000 Total Aggregate Retail Value/Sales Revenue Conclusion The revenue portion of this analysis is based on the conclusions of market value of the subject s various components (finished single-family residential lots, multifamily land and clubhouse site). Our revenue estimates for each component is displayed in the following table. Component Acres No. of Units Value per Unit Retail Value Single-Family Residential Lots Unit 1 / Village 1 90 $136,000 $ 12,240,000 Unit $140,000 $ 16,380,000 Unit 5 / Village 8 (por.) 72 $140,000 $ 10,080,000 Unit 6 90 $140,000 $ 12,600,000 Sub-Total - Finished SFR Lots 369 $139,024 $ 51,300,000 (Average) Multifamily Residential Land APN $14,000 $ 1,792,000 Sub-Total - Multifamily Land Component $ 1,792,000 Proposed Clubhouse Site Portion of APN $ 476,000 Sub-Total - Multifamily Land Component 1.80 $ 476,000 Total Aggregate Retail Value/Sales Revenue $ 53,568,000 ABSORPTION ANALYSIS Absorption rates are best measured by looking at historic absorption rates for similar properties in the region. In developing an appropriate absorption period for the disposition of the subjects components, we have considered historic absorption rates for similar properties and also attempted to consider the impacts of present market conditions, as well as the anticipated changes in the market. Real estate is cyclical in nature, and it is difficult to accurately forecast specific demand over a projected absorption period. In light of this, when estimating absorption, it is important to give significant weight to the past experience of parties marketing similar projects for sale. Seevers Jordan Ziegenmeyer 106

182 In attempting to estimate the exposure time that would be required for the disposition of the residential land component of the subject, both the historical exposure times and projected economic conditions have been considered. While there is a correlation between the sell-off of the end product (roof tops) and the sell-off of the land components, the relationship may not be readily apparent. Generally, the higher priced end products are expected to experience slower absorption rates than the lower priced end products, which are driven by the size of the respective buying pools. Thus, you could sell two land use components that will not compete with each other, due to product and price point, at similar times in the development process without jeopardizing absorption. A master developer s goal, and the goal of any respective builder, would be to avoid saturating the market with product. By the use of segmenting the range of product and diversifying the type of product, a development can maximize the return to the land by hastening the disposition time necessary to sell off the land. A number of assumptions are made in the discounted cash flow analysis, not the least of which is the forecast of absorption, or disposition, of the various land use components comprising the subject property. It is common for surveys of market participants to reveal different estimations of anticipated absorption periods for the sell-off of multiple components comprising a master planned development, with some developers preferring to hasten the holding period in favor of mitigating exposures to fluctuations in market conditions; whereas, other developers prefer to manage the sell-off of the property over an extended period of time so as to minimize direct competition of product within the master planned project. In light of current conditions of the residential market in the Sacramento region, it is anticipated the disposition of the residential land could occur over a three-year time period. This programmed selloff of the lots will allow the developers greater control over the ultimate build-out of the communities and capture anticipated market appreciation in lot (and home) prices, as well as manage any market contractions. It is noted that we do not estimate an exact sequencing of absorption of the residential parcels, given that such an attempt would be considered highly speculative. As such, we average the revenues for the master developer evenly over the respective absorption periods. The subject includes a multifamily residential component and a proposed clubhouse site. While these sites are expected to receive adequate interest from the market, development of the sites will likely be driven by the completion and sale of single-family homes. It is our opinion the multifamily site will likely sell at the end of Year 2 and the clubhouse site will sell at the end of Year 3 of the absorption period as rooftops are completed. Market conditions in the area have been experiencing recovery in some segments as discussed throughout this report. Consequently, it is appropriate to consider an appreciation rate for the land components during the absorption period. In light of current and past economic conditions, an appreciation rate of 5% per year will be applied to the revenue components in this analysis. Seevers Jordan Ziegenmeyer 107

183 EXPENSES Changes in Expenses (Expense Increases or Decreases) Market participants widely expect expenses to increase either from inflation or labor increases (as workers become less willing to accept lower pay as more sources of work become available). General and administrative and marketing and sale expenses are calculated in this section as a fixed percentage of revenue (not including future growth reimbursements). Property tax expenses are trended upward, as will be discussed in a later section. General and Administrative General and administrative expenses would include management of project entitlements and Community Facilities District financing, as well as coordination with others. This expense category typically ranges from 2.0% to 4.0%, depending on length of the project and if all of the categories are included in a builder s budget. For purposes of this analysis, we have estimated this expense at 2.0% of revenue, which is spread evenly over the sell-off period. Marketing and Sales Based on the total revenue, we have estimated an expense of 2.0% for sales, which is within market parameters. For the sell-off of residential lots (units) to builders, marketing costs would be negligible, since master developers often contact builders directly and indicate lots are available, rather than openly list properties and have marketing costs. Ad Valorem Taxes This appraisal is predicated on, and assumes, a sale of the appraised property. Interim ad valorem real estate taxes are based on a tax rate of %. This rate will be applied to the estimated market value, in bulk, and divided by the total number of lots to yield an estimate of ad valorem taxes/lot/year. The total tax expense is gradually reduced over the absorption period, as the residential lots are sold off. Property taxes are increased by 2% per year. Seevers Jordan Ziegenmeyer 108

184 Special Taxes (CFD Bonds) This analysis is intended to consider the underlying land value presuming the appraised properties are encumbered by a proposed Community Facilities District (CFD). According to the Developer, the proposed Special Taxes attributable to each lot will be dependent on the anticipated home size, with the maximum effective tax rate including both ad valorem and special taxes not to exceed 2.00%. Based on preliminary analyses, the maximum annual special tax for the subject property is $1,824 per home, which will be used as the basis for estimating annual debt service while North Vineyard Station No. 1 (Vineyard Creek) is under construction. Additionally, the maximum annual special tax for the subject s multifamily parcel is $5,975 and $11,353 for the proposed clubhouse site. There is currently no anticipated annual escalator for the annual special tax. A copy of the County of Sacramento CFD No (North Vineyard Station No. 1) Fiscal Year Special Tax Revenue is provided below. Seevers Jordan Ziegenmeyer 109

185 As parcels are sold off by the master developer, the ad valorem and special tax obligation will be assumed by the buyer and, ultimately, each end user. The purpose of this analysis is to estimate the market value of the underlying land. As components of the appraised properties are sold off in this analysis, the balance of the Special Tax obligations necessary to service the debt are presumed to be collected from the new owners (buyers of the various land parcels). The Developer will utilize one year of capitalized interest as part of construction fund proceeds from the sale of the Bonds; therefore, no special taxes are reflected in the first year of the discounted cash flow. In-Tract Development Costs Adjustment In the Site Description section we concluded remaining in-tract costs are approximately $10,824,036, or $37,196 per lot for the remaining 291 unimproved lots in the District. For the reader s reference, the multifamily component does not have in-tract costs like the single family sites. This cost has been spread evenly over the disposition period. Backbone Infrastructure Costs It was noted in the Site Description section that there is approximately $13,173,127 in remaining backbone infrastructure costs. However, the market value estimated herein, which is subject to a hypothetical condition, assumes the completion of the certain public facilities to be financed by the County of Sacramento CFD No (North Vineyard Station No. 1) Bonds (series 2), which are anticipated to generate $10,300,000 in construction fund proceeds to be used for roadway and intersection improvements and potable water system. Therefore, $2,873,127 ($13,173,127 - $10,300,000), or $7,786 per lot, will be considered in the valuation. This remaining cost has been captured in the first year of the disposition period. DISCOUNT RATE The project yield rate is the rate of return on the total un-leveraged investment in a development, including both equity and debt. The leveraged yield rate is the rate of return to the base equity position when a portion of the development is financed. The base equity position represents the total equity contribution. The developer/builder may have funded all of the equity contribution, or a consortium of investors/builders as in a joint venture may fund it. Most surveys indicate that the threshold project yield requirement is about 20% to 30% for production home type projects. Instances in which project yields may be less than 20% often involve profit participation arrangements in master planned communities where the master developer limits the number of competing tracts. Seevers Jordan Ziegenmeyer 110

186 According to a leading publication within the appraisal industry, the PwC Real Estate Investor Survey 14, discount rates for land development projects ranged from 10.0% to 20.0%, with an average of 15.5% during the Fourth Quarter 2015, which is down 40 basis points from the Second Quarter 2015 (15.9%) and 125 basis points from last year s average; the land survey is completed semiannually. These rates are free-and-clear of financing, are inclusive of developer s profit, and assume entitlements are in place. Without entitlements in place, the PwC survey recently indicated certain investors increase the discount rate between 100 and 800 basis points, with an average of 400 basis points. It s worth noting this range is significantly lower than previous surveys, which reflected a range between 400 and 1,500 basis points, and an average increase of 1,040 basis points, indicative of the strengthening land development market. According to the data presented in the survey prepared by PwC, the majority of those respondents who use the discounted cash flow (DCF) method do so free and clear of financing. Additionally, the participants reflect a preference in including the developer s profit in the discount rate, versus a separate line item for this factor. As such, the range of rates presented above is inclusive of the developer s profit projection. The discount rates are based on a survey that includes residential, office, retail and industrial developments. Participants in the survey indicate the highest expected returns are on large-scale, unapproved developments. The low end of the range was extracted from projects where certain development risks had been lessened or eliminated. Several respondents indicate they expect slightly lower returns when approvals/entitlements are already in place. Excerpts from recent PwC surveys are copied below. Looking ahead over the next 12 months, surveyed investors unanimously forecast property values in the national development land market to increase. Their expected appreciation rate ranges up to 10.0% and averages 5.7% higher than the rate six months ago (5.0%). (Fourth Quarter 2015) Of the four main property types covered in our Survey, three of them are expected to positively move along the real estate cycle, shifting mainly into either expansion or recovery, which will provide development opportunities. The one exception is the national multifamily sector, where many metros are expected to move into contraction by year-end 2015 Over the next 12 months, all investor participants expect one foresee development land values to increase. Appreciation ranges up to 15.0% and averages 5.2%. (Second Quarter 2015) Looking ahead over the next 12 months, surveyed investors unanimously forecast property values in the national development land market to increase. Expected appreciation ranges up to 15.0% and average 5.0%. (Fourth Quarter 2014) As both the U.S. economy and the commercial real estate (CRE) industry s fundamentals show continued signs of improvement, interest in CRE development has picked up across each main 14 PwC Real Estate Investor Survey, PricewaterhouseCoopers, 4 nd Quarter 2015, Volume 28, Number 4. Seevers Jordan Ziegenmeyer 111

187 property sector office, retail, industrial, apartments, and lodging. As a result, certain investors in the national development land market are looking to acquire new parcels, finish entitling owned tracts, and/or convert parcels into readied sites For the first time in quite a while, our surveyed investors are unanimous in their expectations that values for development land will increase over the next 12 months Appreciation ranges up to 10.0% and averages 3.6% up quite a bit from six months ago when the average was 2.6%. (Second Quarter 2014) Survey results suggest that investors anticipate commercial real estate (CRE) fundamentals to continue to improve, opening up diverse development land opportunities across all property types The outlook for development improved for the second straight year. In addition, and perhaps more importantly, the average outlook for development is considered fair an improvement from two years ago when the average outlook was modestly poor The improvement in the development outlook does not mean that the CRE industry will be flooded with new supply in the near future and that vast opportunities exist for development land investors. Some markets still have a significant inventory of land with entitlements and some with partial infrastructure that will move forward with development first, so we still need to be patient, says an investor, who suggests looking for opportunities in metros where sustainable job growth exists. Another strategizes to find the right land location and then wait for buyers to show up. (Fourth Quarter 2013) Information for a developing in-house database of project yield rates is presented in the table below. Data Source PwC Real Estate Investor Survey - Fourth Quarter 2015 (updated semi-annually) Josh Roden - Meritage (2013) Jeb Elmore - Lewis Operating Corp (2013) Greg Ackerman - Pulte (2010) Chris Downey - Hon Development Gary Gorian - Dale Poe Development David Pitts - Newhall Land and Farming Mark Palkowitsh - MSP California, LLC Rick Nieman - GFC Lin Stinson - Providence Realty Group Dan Boyd - ESE Land Company Tulare Windmill Ventures, LLC David Jacobsen - Ridgecrest Homes Mike Grant - Premier Homes Lyle McCullogh - California Pacific Homes Roy Robertson - Ekotec Gordon MacKenzie - Brookfield Development Yield / IRR Expectations (Inclusive of Profit) Range of 10.0% to 20.0%, with an average of 15.50%, inclusive of profit and assuming entitlements in place, for land development (national average) 20% to 25% for entitled lots 18% to 25%. Longer term, higher risk projects on higher side of the range, shorter term, lower risk projects on the lower side of the range. Long term speculation properties (10 to 20 years out) often closer to 30%. 18% minimum, 20% target Minimum IRR of 20-25%; for an 8 to 10 year cash flow, mid to upper 20% range 25% IRR for land development is typical (no entitlements); slightly higher for properties with significant infrastructure costs 20% to 30% IRR for land development deals on an unleveraged basis 35% for large land deals from raw unentitled to tentative map stage, unleveraged or leveraged. 25% to 30% from tentative map to pad sales to merchant builders, unleveraged 18% to 22% for land with some entitlements, unleveraged. 30% for raw unentitled Low 20% range yield rate required to attract capital to longer-term land holdings Merchant builder yield requirements in the 20% range for traditionally financed tract developments. Larger land holdings would require 25% to 30%. Environmentally challenged or politically risky development could well run in excess of 35%. 10% discount rate excluding profit for single-family subdivisions 10% to 40% for single-family residential subdivisions with 1-2 year development timelines 15% to 20% IRR No less than 20% IRR for land development, either entitled or unentitled 20% to 30% for an unentitled property; the lower end of the range would reflect those properties close to tentative maps No less than 30% when typical entitlement risk exists It is noted the preceding survey related to production home developments at the land stage. Even so, the respondents reflect the expectations of market participants in the residential sector. Seevers Jordan Ziegenmeyer 112

188 Even though much of the entitlement risk has been mitigated, there is risk associated with estimating the timing that the subject components will be sold off, especially when the market is entering an expanding stage. In addition, there is risk associated with unforeseen factors such as broad economic declines and job losses. Considering these factors, and the positive and negative characteristics previously described, we estimate a discount rate of 12%. Conclusion The discounted cash flow on the following page incorporates the preceding factors in estimating the market value, in bulk. The discounted cash flow analysis is calculated on an annual basis, with the components selling out over a three-year period. Seevers Jordan Ziegenmeyer 113

189 Assumptions: Seevers Jordan Ziegenmeyer 114 HOLDING COSTS AND GENERAL EXPENSES Component Acres No. of Units Value per Unit Retail Value General and Administrative (% sales) 2.0% Single-Family Residential Lots Marketing and Sales 2.0% Unit 1 / Village 1 90 $136,000 $ 12,240,000 Annual Increase in Property Tax 2.0% Unit $140,000 $ 16,380,000 First Year Annual Taxes / Lot: $882 Unit 5 / Village 8 (por.) 72 $140,000 $ 10,080,000 First Year Annual Taxes / Acre: $1,679 Unit 6 90 $140,000 $ 12,600,000 Annual Special Taxes / Lot $1,591 Sub-Total - Finished SFR Lots 369 $139,024 $ 51,300,000 Annual Special Taxes / Acre (MF) $6,095 (Average) Annual Special Taxes / Acre (Clubhouse) $11,580 Multifamily Residential Land APN $14,000 $ 1,792,000 REMAINING DEVELOPMENT COSTS Sub-Total - Multifamily Land Component $ 1,792,000 In-Tract Development Costs: $10,824,036 Proposed Clubhouse Site Backbone Infrastructure Costs: $2,873,127 Portion of APN $ 476,000 Sub-Total - Multifamily Land Component 1.80 $ 476,000 DISCOUNT RATE (IRR) Total Aggregate Retail Value/Sales Revenue $ 53,568,000 12% Income and Expense Analysis: Period (One Period = 1 Year) Total Sales (Finished SFR Lots): Inventory (Finished SFR Lots): Sales (Multifamily Land): Inventory (Multifamily Land): Sales (Clubhouse: Inventory (Clubhouse): Sales Revenue $ 20,853,659 $ 22,645,659 $ 10,068,683 $ 53,568,000 Appreciation Factor 5.00% 10.00% 15.00% Total Revenue $ 21,896,341 $ 24,910,224 $ 11,578,985 $ 58,385,551 Expenses General and Administrative $ (389,237) $ (389,237) $ (389,237) $ (1,167,711) Marketing and Sales $ (437,927) $ (498,204) $ (231,580) $ (1,167,711) Real Estate Taxes $ (339,797) $ (207,516) $ (63,871) $ (611,184) Annual Special Taxes* $ - $ (410,512) $ (130,615) $ (541,127) In-Tract Development Costs $ (3,608,012) $ (3,608,012) $ (3,608,012) $ (10,824,036) Backbone Infrastructure Costs $ (2,873,127) $ - $ - $ (2,873,127) Total Expenses $ (7,648,100) $ (5,113,482) $ (4,423,315) $ (17,184,896) NET INCOME $ 14,248,242 $ 19,796,743 $ 7,155,671 $ 41,200,655 Present Value Factor Discounted Cash Flow $ 12,721,644 $ 15,781,842 $ 5,093,265 $ 33,596,751 Net Present Value - Land Components (Rd.) $ 33,596,751 CONCLUSION OF MARKET VALUE IN BULK (RD) $ 33,600,000 * Reflects one year of capitalized interest

190 MARKET VALUATION FLOOR PLANS As requested, we will estimate the market value of the smallest floor plan offered within the District, as of the date of inspection, January 20, 2016, to apply to those lots with completed single-family homes without an assigned assessed value. The objective of the analyses is to estimate the base price of the smallest floor plan, net of incentives, upgrades and lot premiums. Incentives can take the form of direct price reductions or non-price incentives such as upgrades or non-recurring closing costs. Base price pertains to the typical lot size within the subject. The sales comparison approach to value is employed in order to establish the market values for each floor plan. This approach is based on the economic principle of substitution. According to The Appraisal of Real Estate, 14 th Edition (Chicago: Appraisal Institute, 2013), The principle of substitution holds that the value of property tends to be set by the cost of acquiring a substitute or alternative property of similar utility and desirability within a reasonable amount of time. The sales comparison approach is applicable when there are sufficient recent, reliable transactions to indicate value patterns or trends in the market. The proper application of this approach requires obtaining recent sales data for comparison with the subject property. In order to assemble the comparable sales, we searched public records and other data sources for leads, then confirmed the raw data obtained with parties directly related to the transactions (primarily brokers, buyers and sellers). Most of the residential lots with completed single-family homes without assessed values are located in Vineyard Point, which consist primarily of standard detached single-family residential lots; however, there is one (age restricted) village with small detached single-family residential lots (known as Destinations at Vineyard Point). In addition, as of the date of inspection (January 20, 2016) 14 residential lots in Vineyard Creek (Unit 1/Village 1) have completed single-family homes without assessed values. Therefore, we will analyze three floor plans, 1) the smallest floor plan offered on a standard sized residential lot in Vineyard Creek at 1,603 square feet of living area (3 bedroom, 2 bathroom), 2) the smallest floor plan offered on a standard sized residential lot in Vineyard Point at 1,268 square feet of living area (3 bedroom, 2 bathroom), and 3) the smallest floor plan offered in Destinations at Vineyard Point of 996 square feet of living area (2 bedroom, 2 bathroom). There are 14 standard residential lots with completed single-family homes without assessed values in Vineyard Creek, as well as 30 standard residential lots and 23 small residential lots with completed single-family homes without assessed values in Vineyard Point that will be considered in this analysis. Our survey included new home sales in Vineyard Creek and Vineyard Point of each floor plan detailed above. Specifically, we were provided with new home closings within The Cascade and Redwood Collections at Vineyard Creek, The Gardens and The Gables at Vineyard Point for our Seevers Jordan Ziegenmeyer 115

191 analysis of the standard detached single-family residential homes, and closings at Destinations at Vineyard Point for the small detached single-family residential homes, as sales in the subject s subdivision are deemed to provide the best estimate of market value for the subject s floor plans. FLOOR PLAN COMPARABLE SUMMARY VINEYARD CREEK STANDARD LOT Sale Price Sale Date PV of Bonds Living Room Count Lot No. Location Close of Escrow Date Total Consideration Area (SF) Bedroom Bathroom Size (SF) 1 The Cascade Collection at Vineyard Point Sep-15 $346,016 1, , Purple Sage Court Nov-15 $23,484 Sacramento $369,500 2 The Cascade Collection at Vineyard Point Jul-15 $339,211 1, , Purple Sage Court Dec-15 $23,484 Sacramento $362,695 3 The Cascade Collection at Vineyard Point May-15 $334,699 1, , Purple Sage Court Oct-15 $23,486 Sacramento $358,185 4 The Cascade Collection at Vineyard Point Listing $341,990 1, ,725 Listing N/Ao $23,486 Sacramento $365,476 COMPARABLE PHOTOGRAPHS VINEYARD CREEK STANDARD LOT Comparable 1 (New Home Sale) 7336 Purple Sage Court The Cascade Collection at Vineyard Creek Comparable 2 (New Home Sale) 7344 Purple Sage Court The Cascade Collection at Vineyard Creek Seevers Jordan Ziegenmeyer 116

192 N/Av Comparable 3 (New Home Sale) 7335 Purple Sage Court The Cascade Collection at Vineyard Creek Comparable 4 (Listing) The Cascade Collection at Vineyard Creek Seevers Jordan Ziegenmeyer 117

193 FLOOR PLAN COMPARABLE SUMMARY VINEYARD POINT STANDARD LOT Sale Price Sale Date PV of Bonds Living Room Count Lot No. Location Close of Escrow Date Total Consideration Area (SF) Bedroom Bathroom Size (SF) 1 The Gables at Vineyard Point Sep-14 $271,990 1, , Blue Mountain Way Feb-15 $23,073 Sacramento $295,063 2 The Gables at Vineyard Point Oct-14 $252,990 1, , Fruitdale Way Nov-14 $23,073 Sacramento $276,063 3 The Gables at Vineyard Point Oct-14 $252,990 1, , Fruitdale Way Oct-14 $23,073 Sacramento $276,063 4 The Gables at Vineyard Point Aug-14 $251,481 1, , Fruitdale Way Oct-14 $23,073 Sacramento $274,554 5 The Gables at Vineyard Point May-14 $247,990 1, , Fruitdale Way Sep-14 $23,073 Sacramento $271,063 COMPARABLE PHOTOGRAPHS VINEYARD POINT STANDARD LOT Comparable 1 (New Home Sale) 9571 Blue Mountain Way The Gables at Vineyard Point Comparable 2 (New Home Sale) 7405 Fruitdale Way The Gables at Vineyard Point Seevers Jordan Ziegenmeyer 118

194 Comparable 3 (New Home Sale) 7416 Fruitdale Way The Gables at Vineyard Point Comparable 4 (New Home Sale) 7408 Fruitdale Way The Gables at Vineyard Point Comparable 5 (New Home Sale) 7429 Fruitdale Way The Gables at Vineyard Point 1 Seevers Jordan Ziegenmeyer 119

195 FLOOR PLAN COMPARABLE SUMMARY VINEYARD POINT SMALL LOT Sale Price Sale Date PV of Bonds Living Room Count Lot No. Location Close of Escrow Date Total Consideration Area (SF) Bedroom Bathroom Size (SF) 1 Destinations at Vineyard Point Feb-15 $220, , Chevelle Way May-15 $18,450 Sacramento $239,205 2 Destinations at Vineyard Point Sep-14 $209, , Dartwell Way Nov-14 $18,138 Sacramento $227,984 3 Destinations at Vineyard Point Aug-14 $204, , Dartwell Way Sep-14 $18,138 Sacramento $223,026 4 Destinations at Vineyard Point Aug-14 $206, , Dartwell Way Sep-14 $18,138 Sacramento $224,266 5 Destinations at Vineyard Point Aug-14 $206, , Chevelle Way Sep-14 $18,138 Sacramento $225,128 COMPARABLE PHOTOGRAPHS VINEYARD POINT SMALL LOT N/Av Comparable 1 (New Home Sale) 7497 Chevelle Way Destinations at Vineyard Point Comparable 2 (New Home Sale) 9701 Dartwell Way Destinations at Vineyard Point Seevers Jordan Ziegenmeyer 120

196 Comparable 3 (New Home Sale) 9759 Dartwell Way Destinations at Vineyard Point Comparable 4 (New Home Sale) 9734 Dartwell Way Destinations at Vineyard Point Comparable 5 (New Home Sale) 7454 Chevelle Way Destinations at Vineyard Point Seevers Jordan Ziegenmeyer 121

197 Discussion of Adjustments In order to estimate the market values for the subject s smallest floor plans, the comparable transactions were adjusted to reflect the subject with regard to categories that affect market value. If a comparable has an attribute considered superior to that of the subject, it is adjusted downward to negate the effect the item has on the price of the comparable. The opposite is true of categories that are considered inferior to the subject and are adjusted upward. In order to isolate and quantify the adjustments on the comparable sales data, percentage or dollar adjustments are considered appropriate. At a minimum, the appraiser considers the need to make adjustments for the following items: Property rights conveyed Financing terms Conditions of sale (motivation) Market conditions (time) Location Physical features A paired sales analysis is performed in a meaningful way when the quantity and quality of data are available. Even so, many of the adjustments require the appraiser s experience and knowledge of the market and information obtained from those knowledgeable and active in the marketplace. A detailed analysis involving each of these factors and the value conclusion for each unit follows. Total Consideration The appraised properties are analyzed based on the total consideration of home price and the assumption of bonds, if any. Bond debt has a direct impact on the amount for which the end product will sell. In an effort to account for the impact of bond indebtedness on the sales price, we establish a present value amount for the bond encumbrance based on the annual assessment. The present value amount is based on the annual special tax, an interest rate of 6.0% and the remaining term from the date of sale. All of the comparables are encumbered by bonds; thus, the present value of the bonds is considered in this analysis to determine the total consideration with each sale. Upgrades and Incentives The objective of the analysis is to estimate the base price per floor plan, net of incentives. Incentives can take the form of direct price reductions or non-price incentives such as upgrades or non-recurring closing costs. All of the comparables represent new home sales, and no incentives were reported for any of the sales. Further, it seems the builders speculatively pre-selected interior amenities and included these features in the stated pricing. Adjustments for upgrades do not apply. Seevers Jordan Ziegenmeyer 122

198 Property Rights Conveyed In transactions of real property, the rights being conveyed vary widely and have a significant impact on the sales price. As previously noted, the opinion of value in this report is based on a fee simple estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat, as well as non-detrimental easements, community facility districts and conditions, covenants and restrictions (CC&Rs). All of the comparables represent fee simple estate transactions. Therefore, adjustments for this factor are not necessary. Financing Terms In analyzing the comparables, it is necessary to adjust for financing terms that differ from market terms. If the seller provides incentives in the form of paying for closing costs or an interest rate buy down, a discount has been obtained by the buyer for financing terms. This discount price must then be adjusted to a cash equivalent basis. Also, any incentives applicable toward closing costs would have been reflected in the incentives adjustments previously considered. No adjustments were required for this factor. Conditions of Sale Adverse conditions of sale can account for a significant discrepancy from the sales price actually paid compared to that of the market. This discrepancy in price is generally attributed to the motivations of the buyer and the seller. Certain conditions of sale are considered to be non-market and may include the following: a seller acting under duress, a lack of exposure to the open market, an inter-family or inter-business transaction for the sake of family or business interest, an unusual tax consideration, a premium paid for site assemblage, a sale at legal auction, or an eminent domain proceeding The comparables did not involve any non-market or atypical conditions of sale. Adjustments for this factor do not apply. Market Conditions (Date of Sale, Phase Adjustment) The market conditions vary over time, but the date of this appraisal is for a specific point in time. In a dynamic economy one that is undergoing changes in the value of the dollar, interest rates and economic growth or decline extra attention needs to be paid to assess changing market conditions. Seevers Jordan Ziegenmeyer 123

199 Significant monthly changes in price levels can occur in several areas of a neighborhood, while prices in other areas remain relatively stable. Although the adjustment for market conditions is often referred to as a time adjustment, time is not the cause of the adjustment. As discusses in the Residential Market overview section, average net prices for active single-family residential projects in Sacramento County, Elk Grove and Rancho Cordova have increased on an average of 0.7% per month for the last year. Therefore, we have applied this appreciation factor (0.7%) to each comparable sale, based on the date of sale. Location Location is a very important factor to consider when making comparisons. The comparables need not be in the same neighborhood but should be in neighborhoods that offer the same advantage and have, in general, the same overall desirability to the most probable buyer or user. The comparables are located in the same location (Vineyard Creek and Vineyard Point) as the subject; location adjustments are not necessary. Community Appeal In addition to market location adjustments, we consider community appeal adjustments. Even within a specific market location, often specific community characteristics influence sale prices. Often, prices on one street may be significantly higher or lower than the next, despite similar home characteristics. Community characteristics that may influence sale prices include a gated amenity or the condition of surrounding development. The subject and all of the comparable sales represent the same new home project (Vineyard Creek and Vineyard Point) with new home construction and its own project identity. Therefore, adjustments for community appeal are not warranted. Lot Size The lot size adjustment pertains to the differences between the subject s average lot size (which, for the subject, is representative of an average size for the standard residential lot in Vineyard Creek and Vineyard Point and average size for the small residential lots in the Destinations project, 4,725 square feet for the standard lots and 2,500 square feet for the small lots) and comparables with either larger or smaller lots. It does not include any premium location adjustments, which are adjusted for later. The amount of the adjustment used in the comparison of the base lot sizes comes from a survey of premiums paid for larger lots. Considering the average lot size adjustments factors indicated by the comparable sales utilized in this analysis, a lot size adjustment factor of $15.00/SF is considered reasonable for the subject s standard residential lots and $12.00/SF for the subject s small residential lots. Using these estimated lot size adjustment factors, adjustments are applied to the comparables, accordingly. Seevers Jordan Ziegenmeyer 124

200 Lot Premiums Properties sometimes achieve premiums for corner or cul-de-sac positioning, or proximity to open space or views. Adjustments for lot position premiums would be in addition to lot size adjustments previously considered. The subject does not feature any lots meriting a lot premium, and all lots are generally similar in size. The subject does not feature any atypical premiums such as view or open space frontage. None of the comparable sales include a lot premium; thus, no adjustments are warranted. Design and Appeal/Quality of Construction Design and appeal of a floor plan is consumer specific. One exterior may appeal to one buyer, while another appeals to a different buyer. These types of features for new homes with similar functional utility are not typically noted in the base sales prices. The comparables are similar to the subject in regard to design and appeal. Construction quality can differ from slightly to substantially between projects and is noted in the exterior and interior materials and design features of a standard unit. In terms of quality of construction, the subject represents good construction quality. All of the comparable sales feature similar construction quality and do not require adjustments. Age/Condition All of the comparables represent sales of new homes; therefore, an adjustment for age/condition is not warranted. Functional Utility The subject property and comparables represent traditional detached single-family residential construction on standard lots for the area. Adjustments for this factor do not apply. Room Count For similar size units the differences between room count is a buyer preference. One buyer might prefer two bedrooms and a den versus a three-bedroom unit. Extra rooms typically result in additional building area and are accounted for in the size adjustment. Therefore, no adjustments are made for number of total rooms or bedrooms. Because bathrooms are a functional item for each floor plan and add substantial cost due to the number of plumbing fixtures, an adjustment is made for the difference in the number of fixtures between the subject and the comparable sales. The adjustment is based on an amount of $5,000 per fixture (or half-bath) and is supported by cost Seevers Jordan Ziegenmeyer 125

201 estimates for a good quality home in the Residential Cost Handbook, published by the Marshall and Swift Corporation. Considering the fact that plumbing upgrades for existing bathrooms generally range from $5,000 to over $25,000 for the various fixtures, the $12,500 per fixture, or half-bath, is supported. Consequently, a factor of $25,000 per full bath is also applied in our analysis. Unit Size/Living Area Units similar (in the same development), except for size, were compared to derive the applicable adjustment for unit size. Those used for comparison purposes, are units within similar projects. Units within the same project were used since they have a high degree of similarity in quality, workmanship, design and appeal. Other items such as a single level or two-story designs, number of bathrooms and number of garage spaces were generally similar in these comparisons, in order to avoid other influences in price per square foot. Where differences exist, they are minor and do not impact the overall range or average concluded. There have been an adequate number of recent sales of the smallest floor plans, and all of the comparable sales are representative of the same floor plan analyzed; therefore, an adjustment for unit size/living area is not required in this analysis. Number of Stories Since there have been an adequate number of recent sales of the smallest floor plans, an adjustment for number of stories is not warranted in this analysis. Parking/Garage As discussed, there have been an adequate number of recent sales of the smallest floor plans and an adjustment for this element of comparison is not required. Landscaping This factor was considered as part of the Quality of Construction factor. An additional adjustment is not warranted. Conclusion The following pages include grids reflecting the aforementioned adjustments. Seevers Jordan Ziegenmeyer 126

202 Seevers Jordan Ziegenmeyer 127 Project Information: Subject Property Comparable No. 1 Comparable No. 2 Comparable No. 3 Comparable No. 4 Project Name The Cascade Vineyard Creek The Cascade VC The Cascade VC The Cascade VC The Cascade VC Plan Smallest Floor Plan Smallest Floor Plan Smallest Floor Plan Smallest Floor Plan Smallest Floor Plan Address/Lot Number Base Plan 7336 Purple Sage Court 9344 Purple Sage Court 7335 Purple Sage Court Listing (N/Av) City/Area Sacramento Sacramento Sacramento Sacramento Sacramento Price N/Ap $346,016 $339,211 $334,699 $341,990 Price Per SF N/Ap $ $ $ $ Special Taxes (PV at 6% over bond term) Yes Yes $23,484 Yes $23,484 Yes $23,486 Yes $23,486 Total Consideration (Including Bonds) $369,500 $362,695 $358,185 $365,476 Total Consideration per SF $ $ $ $ Data Source Developer Developer Developer Developer Incentives N/Ap No $0 No $0 No $0 No $0 Upgrades Base Upgrades $0 Upgrades $0 Upgrades $0 Upgrades $0 Effective Base Sales Price $369,500 $362,695 $358,185 $365,476 Adjustments: Factor Description +/(-) Description +/(-) Description +/(-) Description +/(-) Property Rights Fee Simple Similar Similar Similar Similar Financing Terms Cash Equivelant Similar Similar Similar Similar Conditions of Sale Market Market Market Market Market Market Conditions Date of Sale MV 1/16 9/30/2015 $7,760 7/2/2015 $15,233 5/9/2015 $20,058 Listing, 1/16 Phase Adjustment N/Ap New Incentive Adjustment N/Ap Project Location Sacramento Sacramento Sacramento Sacramento Sacramento Community Appeal Average Similar Similar Similar Similar Lot Size $ ,725 6,918 ($32,895) 5,596 ($13,065) 4,822 ($1,455) 4,725 $0 Lot Premium None Similar Similar Similar Similar Design and Appeal Average Similar Similar Similar Similar Quality of Construction Good Similar Similar Similar Similar Age (Total/Effective) New Similar Similar Similar Similar Condition Good/New Similar Similar Similar Similar Functional Utility Average Similar Similar Similar Similar Room Count Bedrooms Baths $25, Living Area (SF) 1,603 1,603 1,603 1,603 1,603 Number of Stories One One One One One Heating/Cooling Central/Forced Similar Similar Similar Similar Garage $25,000 2 Car 2 Car 2 Car 2 Car 2 Car Landscaping Front Similar Similar Similar Similar Pool/Spa None Similar Similar Similar Similar Patios/Decks Patio Similar Similar Similar Similar Fencing Rear Similar Similar Similar Similar Fireplace(s) None Similar Similar Similar Similar Kitchen Equipment Average Similar Similar Similar Similar Other None None None None Gross Adjustments $64,139 $51,782 $44,999 $23,486 Net Adjustments ($25,135) $2,168 $18,603 $0 Adjusted Base Retail Value $344,365 $364,863 $376,788 $365,476 Concluded Base Retail Value $365,000 Indicated Value Per SF $ ADJUSTMENT GRID - VINEYARD CREEK STANDARD LOT

203 Seevers Jordan Ziegenmeyer 128 Project Information: Subject Property Comparable No. 1 Comparable No. 2 Comparable No. 3 Comparable No. 4 Comparable No. 5 Project Name Vineyard Point Vineyard Point Vineyard Point Vineyard Point Vineyard Point Vineyard Point Plan Smallest Floor Plan Smallest Floor Plan Smallest Floor Plan Smallest Floor Plan Smallest Floor Plan Smallest Floor Plan Address/Lot Number Base Plan 9571 Blue Mountain Way 7405 Fruitdale Way 7416 Fruitdale Way 7408 Fruitdale Way 7429 Fruitdale Way City/Area Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Price N/Ap $271,990 $252,990 $252,990 $251,481 $247,990 Price Per SF N/Ap $ $ $ $ $ Special Taxes (PV at 6% over bond term) Yes Yes $23,073 Yes $23,073 Yes $23,073 Yes $23,073 Yes $23,073 Total Consideration (Including Bonds) $295,063 $276,063 $276,063 $274,554 $271,063 Total Consideration per SF $ $ $ $ $ Data Source Developer Developer Developer Developer Developer Incentives N/Ap No $0 No $0 No $0 No $0 No $0 Upgrades Base Upgrades $0 Upgrades $0 Upgrades $0 Upgrades $0 Upgrades $0 Effective Base Sales Price $295,063 $276,063 $276,063 $274,554 $271,063 Adjustments: Factor Description +/(-) Description +/(-) Description +/(-) Description +/(-) Description +/(-) Property Rights Fee Simple Similar Similar Similar Similar Similar Financing Terms Cash Equivelant Similar Similar Similar Similar Similar Conditions of Sale Market Market Market Market Market Market Market Conditions Date of Sale MV 1/16 9/23/2014 $26,851 10/21/2014 $23,189 10/11/2014 $23,189 8/23/2014 $26,906 5/18/2014 $32,256 Phase Adjustment N/Ap New Incentive Adjustment N/Ap Project Location Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Community Appeal Average Similar Similar Similar Similar Similar Lot Size $ ,725 5,479 ($11,310) 4,725 $0 4,545 $2,700 4,545 $2,700 4,725 $0 Lot Premium None Similar Similar Similar Similar Similar Design and Appeal Average Similar Similar Similar Similar Similar Quality of Construction Good Similar Similar Similar Similar Similar Age (Total/Effective) New Similar Similar Similar Similar Similar Condition Good/New Similar Similar Similar Similar Similar Functional Utility Average Similar Similar Similar Similar Similar Room Count Bedrooms Baths $25, Living Area (SF) 1,268 1,268 1,268 1,268 1,268 1,268 Number of Stories One One One One One One Heating/Cooling Central/Forced Similar Similar Similar Similar Similar Garage $25,000 2 Car 2 Car 2 Car 2 Car 2 Car 2 Car Landscaping Front Similar Similar Similar Similar Similar Pool/Spa None Similar Similar Similar Similar Similar Patios/Decks Patio Similar Similar Similar Similar Similar Fencing Rear Similar Similar Similar Similar Similar Fireplace(s) None Similar Similar Similar Similar Similar Kitchen Equipment Average Similar Similar Similar Similar Similar Other None None None None None Gross Adjustments $61,234 $46,262 $48,962 $52,679 $55,329 Net Adjustments $15,541 $23,189 $25,889 $29,606 $32,256 Adjusted Base Retail Value $310,604 $299,252 $301,952 $304,160 $303,319 Concluded Base Retail Value $305,000 Indicated Value Per SF $ ADJUSTMENT GRID - VINEYARD POINT STANDARD LOT

204 Seevers Jordan Ziegenmeyer 129 Project Information: Subject Property Comparable No. 1 Comparable No. 2 Comparable No. 3 Comparable No. 4 Comparable No. 5 Project Name Vineyard Point Vineyard Point Vineyard Point Vineyard Point Vineyard Point Vineyard Point Plan Smallest Floor Plan Smallest Floor Plan Smallest Floor Plan Smallest Floor Plan Smallest Floor Plan Smallest Floor Plan Address/Lot Number Base Plan 7497 Chevelle Way 9701 Dartwell Way 9759 Dartwell Way 9734 Dartwell Way 7454 Chevelle Way City/Area Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Price N/Ap $220,755 $209,846 $204,888 $206,128 $206,990 Price Per SF N/Ap $ $ $ $ $ Special Taxes (PV at 6% over bond term) Yes Yes $18,450 Yes $18,138 Yes $18,138 Yes $18,138 Yes $18,138 Total Consideration (Including Bonds) $239,205 $227,984 $223,026 $224,266 $225,128 Total Consideration per SF $ $ $ $ $ Data Source Developer Developer Developer Developer Developer Incentives N/Ap No $0 No $0 No $0 No $0 No $0 Upgrades Base Upgrades $0 Upgrades $0 Upgrades $0 Upgrades $0 Upgrades $0 Effective Base Sales Price $239,205 $227,984 $223,026 $224,266 $225,128 Adjustments: Factor Description +/(-) Description +/(-) Description +/(-) Description +/(-) Description +/(-) Property Rights Fee Simple Similar Similar Similar Similar Similar Financing Terms Cash Equivelant Similar Similar Similar Similar Similar Conditions of Sale Market Market Market Market Market Market Market Conditions Date of Sale MV 1/16 2/6/2015 $16,744 9/6/2014 $20,747 8/22/2014 $21,857 8/26/2014 $21,978 8/24/2014 $22,063 Phase Adjustment N/Ap New Incentive Adjustment N/Ap Project Location Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Community Appeal Average Similar Similar Similar Similar Similar Lot Size $ ,500 2,468 $384 2,650 ($1,800) 2,369 $1,572 2,369 $1,572 2,369 $1,572 Lot Premium None Similar Similar Similar Similar Similar Design and Appeal Average Similar Similar Similar Similar Similar Quality of Construction Good Similar Similar Similar Similar Similar Age (Total/Effective) New Similar Similar Similar Similar Similar Condition Good/New Similar Similar Similar Similar Similar Functional Utility Average Similar Similar Similar Similar Similar Room Count Bedrooms Baths $25, Living Area (SF) Number of Stories One One One One One One Heating/Cooling Central/Forced Similar Similar Similar Similar Similar Garage $25,000 1 Car 1 Car 1 Car 1 Car 1 Car 1 Car Landscaping Front Similar Similar Similar Similar Similar Pool/Spa None Similar Similar Similar Similar Similar Patios/Decks Patio Similar Similar Similar Similar Similar Fencing Rear Similar Similar Similar Similar Similar Fireplace(s) None Similar Similar Similar Similar Similar Kitchen Equipment Average Similar Similar Similar Similar Similar Other None None None None None Gross Adjustments $35,579 $40,684 $41,566 $41,688 $41,772 Net Adjustments $17,128 $18,947 $23,429 $23,550 $23,635 Adjusted Base Retail Value $256,334 $246,930 $246,454 $247,816 $248,762 Concluded Base Retail Value $250,000 Indicated Value Per SF $ ADJUSTMENT GRID - VINEYARD POINT SMALL LOT

205 Conclusion All of the comparables were given consideration in our concluded opinions of value. Generally, adjustments were made, as warranted, for differences relating to special taxes and lot size. The comparable data was located in the subject s immediate area, and all represented transactions of the same three smallest floor plans analyzed. Prior to adjustments, the comparables indicated a range of value between $358,185 and $369,500 (total consideration) for the smallest floor plan available for the standard single-family lot size within Vineyard Creek. Following the required adjustments, with equal emphasis placed on the entire data set, a market value of $365,000 is deemed reasonable for the subject s smallest floor plan available for the standard single-family lot size within Vineyard Creek. For the standard residential lots located in Vineyard Point, the comparables indicated a range of value between $271,063 and $295,063 (total consideration) for the smallest floor plan available for the standard single-family lot size within Vineyard Point. Following the required adjustments, the range of value further narrowed to $299,252 to $310,604. With equal emphasis placed on the entire data set, a market value of $305,000 is deemed reasonable for the subject s smallest floor plan available for the standard single-family lot size within Vineyard Point. In terms of the small residential lots located in Destinations at Vineyard Point, the data set reflected an unadjusted range of $223,026 to $239,205 (total consideration) for the smallest floor plan offered. Following the adjustments, a market value within the range of $246,454 and $256,334 is considered reasonable for the smallest floor plan offered at Destinations. Overall, a market value of $250,000 is deemed reasonable for the subject s smallest floor plan available for the residential lots located in Destinations at Vineyard Point. Based on the discussion above, applying the conclusion of market value to the number of residential lots with completed single-family homes without an assessed value results in the following aggregate value. VINEYARD CREEK STANDARD RESIDENTIAL LOT 14 residential lots x $365,000 = $5,110,000 VINEYARD POINT STANDARD RESIDENTIAL LOT 30 residential lots x $305,000 = $9,150,000 VINEYARD POINT SMALL RESIDENTIAL LOT (AGE RESTRICTED) 23 small residential lots x $250,000 = $5,750,000 Seevers Jordan Ziegenmeyer 130

206 AGGREGATE VALUE OF COMPETED HOMES WITHOUT AN ASSESSED VALUE $20,010,000 This estimate of aggregate value above represents a not-less-than value due to the fact we were requested to provide a market value of the smallest floor plan on each single-family residential lot improved with a completed home without an assessed value assigned. Seevers Jordan Ziegenmeyer 131

207 SUMMARY AND CONCLUSION The purpose of this appraisal is to provide a cumulative, or aggregate, value estimate for the appraised properties, subject to the Lien of the Special Tax securing the North Vineyard Station CFD No Bonds (fee simple estate), as of January 20, The appraised properties comprise the improved and unimproved residential lots within the boundaries of the District not improved with a singlefamily residence, as well as a 6.77-acre multifamily parcel and 1.80-acre proposed clubhouse site. In addition, those residential lots with completed single-family homes without an assessed value for vertical improvements were included in the scope of this appraisal assignment. North Vineyard Station No. 1 is generally located within the boundaries identified as follows: west of Bradshaw Road, north of Gerber Road and south of Florin Road, within an unincorporated area of Sacramento County. The cumulative, or aggregate, value of the appraised properties is estimated herein in accordance with the definitions, certifications, assumptions and conditions set forth in the attached document (please refer to pages 7 through 9). Primary among the assumptions is the value estimate is subject to the hypothetical condition any improvements to be financed by the County of Sacramento Community Facilities District No (Series 2), Special Tax collections are in place. As a result of our analysis, it is our opinion the cumulative, or aggregate, value of the appraised properties, as of January 20, 2016, is: Bulk Market Value - Lennar Corporation (Master Developer) $ 33,600,000 Aggregate Value of Completed Homes without an Assessed Value* $ 20,010,000 Cumulative (Aggregate) Appraised Value of the District $ 53,610,000 Cumulative (Aggregate) Assessed Value of the District $ 178,281,801 Cumulative (Aggregate) Value of the District $ 231,891,801 * The estimate of aggregate value above represents a not-less-than value due to the fact we were requested to provide a market value of the smallest floor plan on each single-family residential lot improved with a completed home without an assessed value assigned. Please note the aggregate value noted above is not the market value of the appraised properties in bulk. As defined by The Dictionary of Real Estate Appraisal, an aggregate value is the total of multiple market value conclusions. For purposes of this report, market value is estimated by ownership. The estimates of market value account for the impact of the Lien of the Special Taxes securing the Bonds. The value estimates assume a transfer that reflects a cash transaction or terms considered to be equivalent to cash. The estimate is also premised on an assumed sale after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with buyer and seller each acting prudently, knowledgeably, for their own self interest and assuming neither is under duress. Seevers Jordan Ziegenmeyer 132

208 EXPOSURE TIME & MARKETING TIME Exposure time and marketing time may or may not be similar depending on whether market activity in the immediate future continues in the same manner as in the immediate past. Indications of the exposure time associated with the market value estimate are provided by the marketing times of sale comparables, interviews with participants in the market and analysis of general economic conditions. Estimation of a future marketing time is more difficult, requiring forecasting and analysis of trends. Exposure Time Exposure time is the period a property interest would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. For a complete definition of exposure time, please reference the Glossary of Terms in the Addenda. In attempting to estimate a reasonable exposure time for the subject property, we looked at both the historical exposure times of a number of sales, as well as current and past economic conditions. The housing market has entered a growth stage for the past few years. A transfer of residential land in the region has typically occurred within 12 months of exposure. It is estimated the exposure time for the subject property, if appropriately priced, would be within 12 months. Marketing Time Marketing time is an estimate of the time to sell a property interest in real estate at the estimated market value during the period immediately after the effective date of value. A reasonable marketing time is estimated by comparing the recent exposure time of similar properties, and then taking into consideration current and future economic conditions and how they may impact marketing of the subject property. The marketing time for the subject property is not anticipated to vary significantly from the exposure time. Thus, the marketing time is estimated at 12 months or less. Seevers Jordan Ziegenmeyer 133

209 APPENDIX

210 A TAX ROLL

211 Community Facility District No, (North Vineyard Station No. 1) wood Assessed Value Owner of Pare... 1 Number AI1IOl (Ac.) Improvements u"d Tob' R."oro p(ope Identification ' ' G4 $64 VINEYARD POINT 2009 LLC Pub~c Use - Nol ApprOlised (}.{l~ 1101 ELK GROVE UNIFIED 5CH DI5T Publr- U~ e - Not ApPfa,utd QF.5..00BO-O:.!7-00oo S 5 ~3 3" $5<\3 SACRAMENTO COUNTY WATER AGENC'I' PublIC. Use Not Ap fl ra, ~ed 056-(081) COUNTY OF ~CRAM ENTU Pubbc Usa Not "'ppralsed (}-OZ9-O(.)OO '64 VI NEYARD POINT 2009 LtC Puvlle U.I!e Not Apprp,sed "" 38' '" 56' $64 VINEYARD POINT 4.Q(\!f LiC Public Use - Not ","wralseo O6B-OOf;O-()3 1-OOOO "7 '64 '64 VINE't'ARD mint 2009 Lie Publi:; U ~ II - Not Alipr&I ~.. o >080-0; ,\CRAMENTO MUNJOPA L UTIUlY DISTRICT NO!ldentrflllbl.. Nol Apprii l~~ $19,284 $19,284 lennar HOMES CA INCURf'ORATED ImproVed SF Home $1!1,284 $19,284 LENNAR HOME5 CA INCORPORATtD Improved SF Home 06& $19,284 $19,284 LENNAR HOMES CA INCDRPORAnD Improved SF Home (}'0() $207,853 $19,284 $383,294 BUI DUY T 8. 8EllY L Model Home $275,846 $19,284 $295,130 LENNAR HOMES CA INCORPORATED Improved SF Home (} $202,$70 $19,284 $221,854 5ERRA MAURIOOT & PATRICIA P Improved SF Home (}'007-OOOO $252,386 $19,329 $271,715 EFFIONG JOSEPH & EUNICE Improved SF Home ().(108-oooo $19,284 $19,284 ClARK MARK 0 & DIANNE R Improved SF HO"le $223,858 $5.0,999 $274,857 NGUYEN JONATHAN LEWIS ImproVed SF Home G-OOOO $256,266 $50,999 $301,265 KAISER JOHNSTON AMANDA N Improved SF Home (}'011.QOOO $223,792 $50,999 $2.74,791 BUNTING STACEY 0 Improved SF Home (}'012-OOO $195,000 $&0,000 $ZSS,OOO NGONGHIA Improved SF Home ().( $215,433 $50,999 $266,432 TRUONG CALVIN CUONG QUOC Improved SF Home (}'01+.oooo $201,559 $50,999 $2S2,558 VANG PHOUA Lmproved SF Home $251,891 $50,999 $302,890 DELACRU2 PHIL Improved SF Home (} $217, ,999 $268,582 MATSUZAKI TANYA 0 Improved SF Home ().( $195,825 $50,999 $246,824 MCGUINNES5 MICHAEl R II Impraved SF Home $210,432 $ $261,431 GAZAWAY CHARLES III 80 CATHERINA Improved SF Home ().(1t $245,836 $ $296,835 LOf'EZ VICTOR M 80 FLOR E CLAR05 G Improved SF Home (} $211,363 $50,999 $262,362 NGUYEN THINH Q Improved SF Home ,907 $50,999 $236,906 TAHUNGV Improved SF Home $ $ ,464 KAUR AMANOEEP Improved SF Home <-0000 O.lOS $205,053 $50,999 $256,052 CAYABYAB MARK A Improved SF Home 066-{l $191,024 $50,999 $248,023 YANG KATHY & T5UAJ Improved SF Home (}'025-oooo $225,694 $ $276,693 WAGNER FRED H Improved SF Home (}.()2& $254,984 $ $305,983 DONGDI Improved SF Home $223,899 $50,999 $274,898 HUYNH HUONG T Improved SF Home $210,105 $50,99!1 $ LlETEK SUN Improved SF Home ().( $19,284 $19,284 VU ~EVlN Improved SF Home $245,375 $50,999 $296,374 MURPHY ERIK L & KRI5TAl f Improved SF Home $ $50,999 $263,144 GABR!El HERMOGENES T & ESTRELlA R Improyed SF Home $265, ,999 $316,451 CRUMP JANEE A Improved SF Home $ $50,999 $ JENNINGS BRADLEY F Improved SF Home $242,142 $50,999 $293,141 5ANDOVAL FAMILY TRUST Improved SF Home (}.035-oooo $194, ,999 $245,637 BURGES5 CHEl51 Improved SF Home & ,074 $51,230 $m"", PREMEfliDEZ MAY F Improved SF Home $50,999 $ MORONES VANESA N Impro~ed SF Home $224,876 $$1.230 $276,106 WINWAL Y Improved SF Home (}' $168,025 $51,230 $219,255 ENONA AUSTIN EDJAN & ROSEMARIE Improyed SF Home Q..O.otO-OOOO $192,001 $51, ,231 VANCANNON ANDREW J & ABIGAIL C Improved Sf Home $189,816 $51,230 $241,Q46 BUnER RASHIOA YU5UF Improved SF Home $195,836 $50,~9 $246,.835 QUACI-!UNHT Improved SF Home $181,85S $51,230 $233,085 IVALOI JIM 5 Improved SF Homll Q $217,944 $51,230 $269,174 WO~ALLE Improved SF Home $288, ,230 $340,125 VANG SA Impl oved SF Home (}'046-0ooo $15S,217 $51,230 $206,447 SOtANtA ANGEUTO 0 & LEONA T IrroPloved Sf Home (}.047 oooo $ $Sl,230 $227,462 FERNANDEZ RUDOlPHO D & DOLORE5 8 Improved SF Home (}'048-oooo $220,915 $51,230 $272,145 HUGHES ERIKA & JUSTIN Improved Sf Home (}'049-00oo $182,598 5$1,230 $233,828 2!MMERMAN DANA LEE Improved SF Home (} $196,714 $51,230 $247,944 ALMONTE PEDRO J & AMALIA Improved SF Home $222,553 $51,230 $273,783 GREEN JUSTINA DLANE ImproVed SF Home $188,022 $51,230 $239,252 HUNTOON DAVID R & 5U5AN A Improved SF Homo $181, ,230 $232,279 PEDER5EN LY55A 5 Improved SF Home $226,708 $51,230 $277,938 8URNIT2~1 MARK A & VALERiE A Improved SF Home $221,531 $51,230 $ RAYMOND MATTHEW J Improvod SF Home (}.056-0ooo $187,776 $51,230 $239,006 MCSORl EY RYAN J Impro~ed SF Homo $173, ,230 $ CIMINO JAME5 II. & AMY E Imprcwod SF Home $225,405 $50,999 $276,404 8EClCER GALEN C Improved SF Home $2ll,US $50,999 $252,U4 NGUYEN HIEN T Imprcwed SF Home (}' $256,032 $50,999 $ ANDERSON WAYLON Improved SF Home (}.061 oooo $225,694 $50,999 $276,693 REIF IAN P & BETHANY J Improved SF Home $211,125 $50,999 $262,12.4 5AINI 5URINDER 5 Improved Sf Home J B $226,435 $50,999 $277,434 CATHY KEVIN P Improved SF Home ,284 $19,284 5AETEURN DULIN Improved SF Home $146,302 $52,254 $ BORJA QATAR!NA 5 Improved SF Home <l ,215 $Sl,230 $211,445 LUONG TOAN T V Improved SF Home $198,261 $51, ,491 CHEN2HI HUA Improved SF Home (}'068-00oo $159, $211,035 REICHERT ALEX J Improved SF Home $146,609 $51,230 $197,839 HIOTTTlMOTHV A & KATRINA l Improved SF Home (}.()70-oooo $156,666 $5l,230 $207,895 CAMP8ELL PATRICK E & KAlliLEEN M Improved SF Home ,543 5S1.230 $ NGH HARJINDER Improved SF Home ).{) $214,195 $50,99!1 $265,194 TRANVUT ImproYed SF Home $146, $198,120 LEONARD DONNA ~ Improved SF Home $194,557 $51,230 $245,787 PHELPS AMY N Improved SF Home 06G oooo O.lOB $174,087 $S1,230 $225,317 CHRISTENSEN NICKOLAUS J & TliERE5A. A Improved Sf Home (}'07& $1S3,n5 $ $205,005 THOMA5 R05ETTA L Improved SF Home n-OOOO $166,517 5S1,230 $217,747 DANG TUAN H ImprovlKi SF Home O.lOS $154,949 $51,230 $206,179 GALARZA MARIA CARMEN Imprcwed SF Home $191,702 $51,230 $ VI HVEJUNG Improved SF Home 06&012Q-08Q $156,381 $51,230 $207,611 8ENOIT ARTHUR R Improved SF Home $170,217 $ $221,447 80MBARO 8EllY J ImproVed SF Home 06tHl120-C11:J2 00Q UTHGATE REC Public U:i\!' No! Appi"alsed Q6& $169,937 $51, ,167 RAMIREZ JULIO C A Improved SF Home $159,222 $51,230 $210,452 GARBE JOHN Improved SF Home < $242,653 $51,230 $293,883 NGUYEN MARGARET Improved SF Home 1J66.013G-01l<-OOOO 0.11 $194,1$3 $51,230 $245,383 MAULDING JENNIFER M Improved SF Home ,731 $Sl,230 $230,961 MCCOY STEVEN M Improved SF Hom", $186,656 $61,198 $247,854 DARDEN PERRY t Improv~ SF Homo $170,320 $Sl,230 $221,sSO TANWElXIN Improved SF Home $237,543 $51,230 $288,773 JOHNSON SHEILA R Improved SF Home JO.OO $211,1.35 $61,198 $272,333 MCGREW MATHEW 0 Improved SF Home (}' $154,680 $51,230 $205,910 TIEU KEN QUYEN Improved SF Home $184,460 $S2,254 $235,714 HERNDON KATIE 5 & PHILLIP M Improved SF Home 06B Q $163,338 $52,254 $ BRYANT ELMA R Improved SF Home

212 Community Facility District No (North Vineyard Station No. 1) Assessed Value Owner 01 "',' Parcel Number A~(Ac _ 1 Improvements "',' lou' Record P Identiftc ation ).000( $146,810 $S2,2S4 $199,064 LOP Z RIOiAAO S JR Imprcwed SF Home Q66.()13Q.{l1" $ ,254 $210,J69 MCQUillEN JULIE A Impfoved SF Home $141,805 $S2,2S4 $ HUESTIS ElMEJI R Improved SF Home 0fi $ $S2,2S4 $218,425 SNYOER BRANOON Improved SF Home 06IHl OOOO $238,000 $60,000 $ DOwtlNG JOHNATHAN & RAVEN Improved SF Home 066.(l $170,783 $53,300 $224,083 ABARCA ERIKA I Impfoved SF Home 1J $160,134 $S3,698 $U3.812 SIDHU GURSHARAH Ii( lmpto'led SF HomI' 066.(l13().O O.lOS $200,941 $53,300 $254,241 RAlGON YURIY & larlsa Improved SF Home (l66.013g-021.ootlo $201,619 $19,187 $226,806 OCAMPO ZENAIDA 0 Impfoved SF Home O.lOS $15S,103 $53,300 $ SAHOTAMANEffS Impfoved SF Home (l66.o O.lOS $169,494 $53,300 $ VEGA CATAUNA Improved SF Home $196,228 $53,300 $249,52.8 MENOOZA EUAS G& ERIKA R Impt'oved SF HOfT\C $190,532 $61,198 $2.51,130 SYOiANH Improved SF Home O.lOS $181,449 $53,300 $ PHAN MY MELISSA T Improved SF Home ().O21-OOOO $150,210 $53,300 $203,510 HACHEY JOHN Improved SF Home $162,554 $53,300 $215,85<1 RAMOSJONATHANJ & SETH Improved SF Home ()66.013()' $112,441 $52,254 $224,695 euilant Improved SF Home $152,666 $51,230 $203,896 JOHNSON KENT F & RONDA R Improved SF Home ().031-OO $139,812 $52,254 $192,066 BALLESTEROS JOYCE M Improved SF lioltle ().032,OOOO 0.11 $207,055 $~,999 $158,054 SANGHERA INDERPREET R & JAGROOP Improved SF Home 0S6-01JO lA9 $203,996 $61,198 $265,194 NORRIS JULIE Improved SF Hom $191,000 $100,000 $291,000 CLEMENT JOHN J & ROXANNE M Improved SF Home $116,990 $90,000 $266,990 PRASAD SUNIL & JYOnKA Impro~ed SF Home OSEHll JO $19,284 $19,2&4 MAXWELL SCOTT & JENNIFER Improved SF Home Q6f1-013[).{)37-000Q $19,2&4 $19,284 WALKER MARCUS l Improvod SF Home OOO--013O.(13S-OOOO $168,245 $52,254 $220,499 CLAY SAMANTHA A & DiAD E Improved SF Home a.o $138,229 $52,2S4 $190,4&3 BAGAfORO THERESA G & JOSE MARIE 5 ImpfO~6d SF I10me Q66.()1 J!I $136,385 $52.2S4 $188,639 LENANCYH Improved SF Home 06& O.ll $154,088 $ $206,342 DUARTE PRISOlLA ImproVed SF I10me $172,441 $52,.254 $ GERNAl. MARGIE G Jmproved SF Home ().04J..OOOO 0.11 $159,740 $ $2ll.994 CARPENTER IRENE A & I srer M Improved SF Home $140,054 $52,254 $ FUJIMOTO II(OI~ 1 0 I!np(OV6d SF Home 06B-013Q $121,501 $ $t79,7ss TRINH AMY H & DORAN Improved SF Home ~ O.lOS $205,129 $52,254 $257,383 VElOSTRA SUSAN M Improved SF Home 06(M)1 JO-O.41-OOOQ $185,453 $ $236,683 SANVlCENTI RAYMOND 8 & JENNIFER Imp!oved SF Home $136,293 $53,300 $ DELATORR E ESMERALDA Improved SF Home 0SB-013().().4g.oooo O.lOS $236,941 $50,999 $ STlIARTGARDELl UVING TRUST Improved SF Home $169,304 $53,300 $ ram SH1NGT ImprOved SF Home $189,614 $61,193 $lso,3u SOSA PAUL P Improved SF Home 06&-013().05bOOOO $181,219 $53,300 $234,519 VUNHIM ImPrCl"'ed SF Home Q60.01 JO.051.QOOO O.lOS $149,240 $53,300 $ YU XIAOGUANG Improved SF Home JO.054-OOOO 0.L08 $191,156 $61,198 $ RIDHAZAIO Improved SF Home $182,561 $53,300 $235,361 LATORRE LUIS E Impro~1Id SF Home 06S-013()' $163,652 $53,698 $ UMAYAM FERNANDO M JR & MARIA L G Imp!o~ ed SF Home 0f>&.(I1Jo.057-OOOO $ $274,374 CARDOZA FAMILY TRUST Improved SF Home 0fiB.U 13()' " SOUTliG4.TEREC I"u,')hc Use. Not APPlllilled ()66..O14()'OO\-OOOO $283,132 $50,999 $334,731 EMILIA M TYMINSki RE'VOCABLfTRUsr 2014 Improved SF Home ()56.()14()'OO $251,613 $61,198 $312,811 DELGADILLO JORGE E Impro~'d SF Home ()S6.(J $229,059 $51,230 $ VONG JODIE Improved SF Mome $227,617 $51,230 $278,907 THOMAS ERNESnNE P Imploved SF Home Q6&.0140-OO5-oooo O.lOS $207,932 $61,198 $ NGUYENOANH Improved SF Home 0S6-014Q $250,433 $71,398 $321,831 ESPERANZA TRUELiNO AJR Improved SF Home Q6& OOOO $228,055 $51,230 $279,285 WISHART LAWRENCE P & KATHI EN A Imprtlved SF Home ~~ $262,553 $50,999 $ RAMOS CHRISTOPHER P & RITA G C Impro~ed SF Home Q Q09.0C $251,SOl $61,198 $112,.699 SYlVESTER PAUL L & RHONDA A Improved SF Home Q66.0 1~O..Q1 Q.OOOO $256,151 $51,230 $ VILORIA VICTOR C & ROCHUlf l Improved SF Home 1)6& $ $50,999 $:n2,.747 TA!IIG UNO" T Improved SF Home Q66.014Q.012-OOOO O.lOS $268,408 $55,499 $ PHAMTUU Impr!)Ved SF HomI O..Q1J..OOOO $290,694 $50,999 $141,693 KAHLON GURCHARANJIT 5 Improv~ SF Home 06&014Q.()1~ $211,288 $ $ NAVARRO SCOTT M ImproYed SF Home ()S6.(J14Q.()1S..QOOO $252,699 $61,l98 $313)J97 NGUYEN CAMVAN Improved SF Home $ $61,198 $ PERE2 RAMLSI5 V ImpfDYed SF Home Q60.01~()'011-OOOO $ $ $ BECl(YJORT}i nffany Improved SF Home Q $316,183 $61,198 $317,381 TRUONG DUC N & NGUYE!II THUY e Impfoved SF Home Q66.014()'() $ $61,198 $l27.l92 BLA 'flock JOHN A & MEUSSA 5 improved SF Iiome ()56.()14().(12().OOOO $242,.612 $61,198 $303)J10 SADDLER (URTIS t & M ILLER HIllARY A Improved SF Home O66..Q1~()' $231,915 $51,230 $283,145 ASHLEY DANIEL & CHRI5nNA R!OS Improved SF Home ij6&.014q.() $232,820 $51,230 $2&4.050 HUANG RI2 Improved SF Home 06lHl14().( $219,131 $51,230 $ BOl1THAVONG PHETHSAMONE Improved SF Home QB6-(114() $228,354 $52,254 $230,608 BENEO!CTO A CABACUNGAN FAMILY UVING ImproVed SF Home Q60.014()..Q $242,606 $ $293)J36 SMITH LUCAS M & RAYNAA Improved SF Home ()'026-<1OOO $205,620 $51,230 $2.56)J50 GASTINEll RAYMOND G &. SRANOY P Improved SF Home 066..Q14()..Q $221,888 $51,230 $ XIO!llG 0.0,0 Impro~ed SF liome $206,533 $51,230 $2.51,163 WOO TAMMY Improved SF Hgme ()..Q $214,591 $51,230 $325)J21 RAMAY M IUKOVIC MAURA L Improved SF Home Q JO..OOOO $218,740 $51,230 $169,970 RAM SACHENDRA Improved SF Home ,586 $51,230 $ SINGH 8ALWINDER Improved SF Home ().032-OOOO $219,376 $51,230 $270,606 MARINA l WHiTt TRUST IlT'IPfcved SF Home ~()' $235,470 $51,230 $236,700 NGUYEN DE881E Improved SF Home Q.034..()()OQ $211,681 $51,230 $262,917 I{YIKYAWZ Improved SF Home ~o.03s.oooo 0.1OS $136,213 $ $ MARIA ELENA GAMBOA TRUST ImproVed SF Horne "0-( $242,043 $51,230 $293,213 DIE!IIG KONG A Irnpnwed SF Home 0S6-014().( $214,913 $51,230 $ NGU~NHUNG Improved Sf Home () ~()'03a-OOOO $252,395 $51,230 $303,625 AROlAMBAULT MICHAEL JR & ASHfENA Improved SF Home ()56.() $214,678 $51,230 $265,908 OO ANVlNHT Improved SF Home Q..04G-OOOO $216,309 $51,230 $267,539 PAGULAYAN KYRAN Improved Sf Home Q66.014Q.041..QOOO $300,856 $ S351)J55 NAVIDAO JOSE JR & ester Improved SF Home Q66.014G.042.ootlO $274,155 $50,999 $325,154 LEE GREGORY P & HEATHER M Improved SF Home Q Q $282,592 $50,999 $333,591 tlu YUANJ IE Improved SF Home ()66.014Q O.lOS $ $50,999 $332,186 NGUYEN THANH V & nmmy Imp!Oved SF Home 066..Q14Q.04S-OOOO $222,801 $61,198 $ HERNANO Z ROGEliO II & M INERVA C IlTIpfoved SF Home o.D46-OOQO $265,194 $61,ISS $ DHAUWAL INDEJUIT 5 Improved SF Horne Q66.Q1 ~0-047-OOOO $U1.455 $61,198 $288,653 NG SOLOMAN S IrrtprlWlKI SF Home 06& $ $51,230 $252,241 YUENM Improved SF Home Q $228,513 $51,230 $219,143 MUROiIE KYLE & SHAYlA ImpRl\led SF Home Q66.01~o.o5().OOOO $221,698 $51,230 $218,928 MINGGIA THOMAS & MARIA Improved SF Hom6 06I).014().OS1-00Q $238,051 $51,BO $289,287 KUY YOUTHARiN ImproYed SF Home $218,763 $51,230 $269,993 SAECHAO FARM MENG & LAY Improved SF Helme 06a.01~ $220,808 $ $272,038 NGUYEN DIANA Improv!ld SF Home $177,249 $51,230 $228,479 PISANO JAMES V Improved SF Home oss s..qooo 0.12 $UO,010 $5l.230 $271,240 STINSON ANTHONY FURTADO Imp!oved SF Home ()66.() oooo 0,12 $196,415 $51,230 $241,645 ANDERSON ALFONSO F Improved SF Home $270,816 $51,230 $322,046 DELROSARIO QUEENIE Impro~ed SF Home

213 Community Facility District No (North Vineyard Station No_1) Co,d Auassecl V;llue Owner of Pa~1 Number Aru (Ae.) Improvements Co"" T"', Record ldentifle,ation & $218,802 $51,230 $270,032 CORTES JUAN E & CATHY Improved SF HoITMI $ $52,254 $139,456 MERCADO JAIME II Improved SF Home 066-O14()..(l6O-OOOO $195,372 $51,230 $246,602 HAMILTON NEILS & ANNAG Improved SF Home ()66.0t $247,842 SSl,230 $Z99.o12 NORTON OSCAR X & JESSICA Improved SF Home () $2.14,538 $51,230 $265,768 SINGH SEEMA N & VEER Imprgved SF Home $258,010 $ $309,240 JEFFERSON BETIY J Impro... ed SF Home 06& $184,429 $ $235,659 TRAN MINH T Improved SF Home $248, 216 $ $299,446 VOOOPYANOV AI.fKS.EY & UMA Impro... ed SF Home $262,975 $ $314,205 WITT NOREEN F IrTIp(o... ed SF Home ( $218, ,230 $269,913 HOJIl(A SANTOS CONNIE Impro... ed SF Home...,40-<l66< $rn,176 'SU30 $250,406 ICWAN CARLOS H Improved SF Home 06!H)140.(169-OOOO $241,452 $51,230 $298,682 MA)VUONGH ImPfo... ed SF Home $254,995 $56,098 $3U,093 GUIlFORD RYAN &JENNIFER Improved SF Home $201,176 $52,.254 $253,430 SAECHAO CAROL l &. NAI W kl1pro... ed SF Horne ],, $l99,237 $51,230 S250,467 SQUIRES REVERNA R ImprO\led SF Home ()66.015().() $210,556 $51,2.30 $ BODDIE DUOlINE TRACY A Impro... ed SF Horne 066-0t~ $25"1,163 $51,230 $310,393 EoWA RD ~JAMES L Improved Sf Hamill ~01~ $216,508 $51,230 $267,1 SAECHOU MUENG Impmnd SF Home ()66.015().(101..QOO0 0.n2 $20B.989 $5 2,254 $261,.243 ARCHI El EANElTE lmpro...",d SF Hamill so.oos-oooo $207,105 $ $258,335 CRAWFORD AUDREY Improved SF Home 06& $186,413 $52,254 $238,721 DENNIS JERRY l Impro... ed SF Home so.o S 5111,OB9 $52,254 $123,343 HUVNH NGOCT Impro~ltd SF Horne $213,059 $62,105 $21S,n4 LOR MAl Impro~ed SF Hom O-{lt $196,210 $ $247,440 SAELEE SHELLY Impro~ed Sf Home 06f>.015O..Q < $220,856 $52,2~ $213,110 LVCANGO Improved SF HorTH! () $227,218 $ $279,532 KETSAVONG HANH H Improv.d SF Home U2 $199,129 $ $1SO,.3S9 TIGER OENN!5 VINCENT & TONI Improved Sf Home $219,295 $61,198 $280,493 JUAN A ESPINOSA PERSONAl TRUn Improv.d SF Home $193,08!I $ $145,342 DIGGS a EMMONS NATAlIE R Improved SF Home (l66-() $249,636 $51,230 $300,866 GAGNON BRIAN CONRAD Improved SF Home $219,000 $60,000 $339,000 MILLER ARGUSTER B & NATASIiA C Improved SF Home () $249,122 SS1.230 $300,.352 BLUE M ISlY Imptov.d Sf" Home t-OOOO 0.t49 $229, $280,131 AHMACH TROYGAH Improved SF Home $211,069 $51,230 $262,299 TRAN THOMAS T & THUY T Improved SF Home $215,215 $61,l98 $216,413 OEVERO EU VN L Improved SF Home $165,190 $ $218,490 CONSTANT OAVID I & SHAUNA F Improved SF Home O66-(It5O-(l25..OQOO $1B1,324 $62,705 $244,029 CORTEZ SA.l RNO A Improved SF Home ll2 $321,874 SSl,110 $379,104 DUONG CUOt+G Improved SF Home ,300 $52,254 $Z30,S54 NGUVEN NGHIEP T Improvtd SF ~e () oooo 0.ll2 $204, ,2S4 $156,545 JOHNS JEREMV lmj:lro... ed SF Home B2,892 $52, ,146 ZHANG lie Impro... ed SF Home JO.OOOO $240,265 $52,254 $292,51.9 5HERRIFFE ERICA 5 Impro... ed SF Horne 06t> oooo $254, ,198 $316,193 TRUONG LAURA Improved SF liome 06B-01so.0J $205,215 $52,254 $257,529 TAOLOCK CASSONoA H & DUANE A Impro... ed SF Home 0S6-015()...03]" $52,254 $278,518 SIMMONS ANTUAN & STACIE \mpro~ed SF Home $190, ,254 $2~3,165 SU PHILLIP ImproVed SF Home $203,51B $51,230 $254,B08 PURDY GREGORY 5 & "ROBIN F Impro... d SF Home $259,606 $51,230 $310,B36 HERNANOEZJOSe A Improved SF Home 0S6-tI $209,832 $53,300 $263,132 FERRER JOSE M & LUZ M I mpro~ed SF Home $204,8B2 $53,300 $1511,182 ALVAREZ ONTHIA R Improved SF liome $172,180 $52,254 $224,434 CLOTIl DE C MORRISON FAMll YTRUST Impro... d SF Home $170,014 $52,254 $2U,328 NORRIS DOUGLAS P & MARll1A R Improved SF Home $200,551 $51,230 $151,781 VARAOY SARAH Improved SF Home ()42-OOOO O.ln $225,B50 $52,254 $218,104 SCOTT MEUNDA Improved SF Home J..OOOO 0.22 $279,719 $53,300 $333,019 LARA OANIEL& MARIA T A improved SF Home D-()4.4-OOOO 0.17 $242,4B5 $53,300 $295,185 MENDEZ UUA Improved SF Home () ( $191,n3 $51,230 $243,003 BARNES TI MOTHY 0 Improveod SF Ht>rne $237,760 $41,029 $284,1119 ferreira ANGEUTA Impro~ed SF Home $280,000 $60,000 $340,000 GARlAMARIO Improved SF Home ().04I1-OOOO $244,795 $61, 19B $305,993 VANGMAO J Improved SF Home 066-Q15(H)49-OOOO $291,986 $51, ,216 YARNS MAROIS R Impro... ed SF Home $258,438 $51,230 $309,668 NAVARRO SALAS MARIO R &. SALAS ZELIA M ImproYe(l SF Home $219,984 $330,983 5PEEO MATHEW 0 Improved SF Home 'SO"" $ $51,230 $3H,445 LEOS ARNElC& SORAVAM Imp ro~ecj SF Home $191,BI8 $53,300 $245,118 GLOVER KARL A & KATliLEEN l Improved SF Home ,614 $53, ,914 SAl.AMANCA R08ERT 5 SR & amy B ImprO... ed SF Home 06 > $205,73B $53,300 $259,038 MU mphi A & WHITNEY Impro... ed Sf Iiome $212,466 $53,300 $265,166 SAlAZAR ANTHONY R & EUZABETli M Impro"'ed SF Home $194,947 $51,230 $246,ln BRANSON STEVEN l Impro... ed SF Home $202,301 $51,230 $253,531 MAOAS ALBERT & MARTI NA Impro... ed SF Home $182,360 $ $233,590 NGUYEN TERESA T Impro... ed SF Home $209,446 $51,230.$260,676 NGUYEN TOM C Impro... ed SF Home 05& $236,49] $ $288,141 HUYNIi CUONG Q Impro... ed SF Home $221,436 $52,254 $213,69(} CHANOEoWIN Impro... lld SF Home $231,%9 $51,230 $289,199 PHAM TUAN V Impro~ed SF Home 066-0t5() OOOO O.13B $212,.217 $51,230 $263,441 HUYNH UEU Improved SF Home $216,643 $51,230 $267,873 JENNINGS OAMON & MERCY Improved SF Home $225,941 $51,230 $217,171 MABRY MAIAR ISHA G Impro... ed SF Home Q $223,678 $ $214,908 SINGH KULWAN"T lmpto~ed SF Home 066-0' $236,480 $52,254 $288,134 BAOIMAN BRANDON J & CHRISTINA l Impro~ed SF Home $233,840 $51,230 $2B5,010 POPE ALVIN improved SF Home 06 > $232,050 $51,230 52Bl,280 ABAN JONATHAN L& EMlltA Impro~ed SF Home $201,870 $S3,3OO $ HUVNH BE Improved SF Home () $233,484 $ $2B6,784 WRIGHT JENlQUE N Improved SF Home ],, $226, ,300 $219,714 loretoemola ENRIQUE F & JAOlYN A Improved SF Home $202,540 $53,300 $155,840 PROEUNG SAMBAnt Improved SF Home $265,966 $53,.300 $319,266 OEER NAHCY ANN Improved SF Home...,..,...,., $196,602 $53,300 $249,902 NGUYEN PHUONG L & HUY T Improved SF Home $259,853 $21,520 $281,.373 ROSSE M ICHAElA & ERICA l Improved SF Home ll2 $275.]57 $21,520 $296,8n 51RUEtO HElEN G A Impro... ed SF Home,,,,,",,, $216,719 $53,3CIO $ CHANG WIlSON W Improved SF Home $244,833 $53,300 $298,133 SIMMONS ROSEMARYT Improved SF Home ~ 11-OOOO 0,)35 $320,783 $50,999 $311,782 CORDERO CARlOS C & NORY 8 Impro... 1Id SF Home 066-0'~12-OOOO $2S1,n2 $53,698 $305,470 AHUWAUA AMARlfT 5 & SAR1NDERlEfT ~ Improyed SF Home $211,738 $53,698 $265,436 NGUYfN KEVIN Improved SF Home ) $205,OB5 $51,230 $256,315 SANGHERA PRITPAL 5 & KALBANT K Improved SF Home ,S-OOOO $264,622 $51,230 $315,852 ROTHENBAUM EDWARD H & MONICA L Improvtd SF Home ) $236,831 $51,230 $2811,061 GUilLERMO ONG JHOANNA Improved SF Home $242,994 $53,300 $296,294 ORTIZ INOCENO O T & VIRGINIA R Improved SF Home B_ $218,016 $53,698 $271,714 MOONEY FAMILY UVING TRUST Impl"Dved SF Home O.lSB $258,4B1 $53,300 $311,787 RAI FAMilY TRUST Improved SF Home IS4 $263,956 $53,300 $317,156 HUSTON ROBERT P & JONELLE N Imprllved SF Home _ $233,454 $53,300 $286,754 CHAVEZ EMMANUEL & TI FFANY A Impro~od SF Home '"

214 Community Facility District No (North Vineyard Station No. 1) LAo' Assessed Value e>wne,'" Parcel Number AnaIAc 1 lmprovemenu Loo' Tou' R... ord P,. Identificallon () OOOO 0.15< 5248,~ ~1.9 $169,697 CHRlmN5EN l OU A Improved SF Home , ,300 $286,754 "'"'" RAJ R lmprolled Sf Home <) Z49,895 $61,198 $3U,093 SINGH GURINDER Improved SF Home SS2.2S< $276, 102 BAOiIUER MARK M Improved Sf" Home , ,254 $254,888 DELGADO JORGE & NORMA Improved SF Home ,144 $229,571 SS2.2S< $281,825 BAOillLER MARlA lao Improved SF Home 06!).(I16O-(l $17-4,342 Sl7,029 $221,371 NGUYEN pmr & YEN Improved SF Home $270,294 $61,198 $331,492 SAELEE JUOY A & KAO C ~edsfhome O66-{l,60-0:m.oooo $182,820 S52,2S4 $235,074 luce FAMIlYTRU5T Improved SF Home J1..()()()() ,335 $52,254 $268.sa9 CASTIUO AIlEEN a & HONESTO C Improved SF Home SO'() ,000 $60, ,000 SWEENEY OONNA L Improved SF Home 06G-Dl60-0Jl-OOOO $183,790 $47,029 $130,819 5UnONPAUL Improl/ed SF Home 1J ()()(){) ,919 $47,029 $271,~ GREEN RICXY Improved SF Home <) $223,297 $47,029 $270,326 COWN5 EUGENE III Improved SF Home 066.Q OOOO $225,710 $52,254 $271,964 IMRRAJOSe M & ROMELlA 0 Improved SF Home 066.()160-0J S192,588 $S2.2S4 $244,842 WHlmN HUNTER & JENNIFER Improved SF Home 066.Q lgd ,143 $52,254 $268,~97 SILVA KENNETH W & NAIMA S Im"roved SF Horne CJ66..() $214,423 5S2,254 $266,6n LUCUONG Improved SF Home 066-(l Q.()()()() 0,193 $202,261 $53,300 $255,561 SEPULVEDA DEBBRA J Im"roved SF Home $199,753 $53,300 $253,053 LEEGARRmA Improved SF Home 06& ,225 $275,000 $&0,000 $335,000 TADIQUE ARACELI Impt'llved SF Home 066.() $ $60,000 $413,840 DHANOWA SARSJI T & HAR81R improved SF Home ()66.01f $21,629 $Zl,629 PHUNG HEATHER M Impro~ed SF Home 06&016D , ,230 $317,020 SINGH l-\arpal Impro~ed SF Home () $51,230 $329,400 BHAUASAVITA K & BALOEV P Improved SF Home ~7.QOOO $203,480 $51,230 $B4,7W LAOVIVtEN Improved SF Home 06&-01 """""""" ,167 $51,230 $266,397 HOANG M. TRA Improved SF Home $228,478 $51,230 $279,708 PIZARRO ALEX R Improved SF Home $220,700 $51,230 $ GAROA SEAN J & JENNifeR 1mpro~ed SF Home QOOO $256,664 $51,230 $307,894 NEWMAN MATTHEW 0 Improved SF Home GS2.OOQO $241, ,230 $292,581 RUFINO JOya: KAY Improved SF Home $198, ,230 $249.}54 HAN K1SHUA & OIANA ImprO\led SF Home Q66.01flO.054.OO1X $ ,705 $254,249 CARLSON MiCHAEl R & BONNIE L Improved SF Home 0S6.() $265,194-56l ,392 KNOK WlLUAM PAUL Imp!'Cllled SF Home () Q56.00Q $203,118 $51, LE ANGElA Imprcwed SF Home 06G oooo $231, ,254 $284,018 WHITE WESlEY 0 & MARSHA A Improl/lld SF Home.-o>16<HlS8-OOOO ,000 $60, ,000 TOLUSON JOHN & SHIELA Improved SF Home O66.Q1BO-OS $219,247 $52,25'" $271,so1 VANGOIA Impro..-.d SF Horne 06&-0161) $254, ,705 5]17,483 MAURO RAVMOND J & ANTONETTE K Improv!td SF Home $221,561 $52, ],815 LOPEZ FAUSTO J & REBECA Improved SF Home ,023 $52,254 $319,277 FEENEYTIMOTHY P Irnprolll!d SF Home 06& $212, ,254 $265,034 CRUlJAIME Improvltd Sf" Home , , ,335 LUC ANNA L & MING H Improved SF Home ~ $ S52,254 $263,350 ASHFORD KIM8ERLY M & ANDRE M ImprOved SF Home 06& ::18 $183,284 $52,254 $235,538 THAM DAMON ImprOlled SF Home , ,2~ 5299,472 ROSS SUZANNE D Improved SF Home () B $ $52,254 $273,318 MENDOZA FEDERICO T Improved SF liome $188, ,254 $240,617 5EWELL DAVID lin05ey Improved SF Home SO-07().{)()Q $235,093 $51,230 $286,323 SINGH AMANOEEP Improved SF Horne Q QOOO $259,39] $51,230 $310,623 LEE CRYSTAL & SUNNY Improved Sf" Home 0S6-016O-Q72 ooo $189, ,230 $240,807 FRANKUN RONALD C& CHERYL l Improved SF Home Q66..() Q $263,144 $61, 198 $324,342 OANGCJAMES F& VING T Improved Sf" Home 06&-( $~10, ,198 $371,798 HUANG QUN & VUE a Improved Sf" Home $265,559 $61,198 $~26,757 SUN KIAOU Improved Sf" Home 1J66..() $344,418 $61,L98 $-405,616 WANG CHANGGUI Improved SF Home 066'()17D-OOS-OOOO $29~,640 S61,198 $354,838 CHANT familv REVOCAatE 2003 TRUST Improved SF Home () $290, ,198 $351,882 KAUR AMANDEEP Improved SF Home 066.Q OOOO $3ZS,5OS $61,198 $389,703 AlAM 51iA8ANA Improved SF Home 1)66.017Q , ,999 $329,760 U UNGXIANG Improved SF Home , ,999.$401,053 JOHNSON MAE l ImJ)l'OIIIIdSF Home Q ~ ,743 $50,999 $368,742 NElSON UTTlEiOHN I(ATRINA M Improlllld SF tiome ().O ,396 $50,999 $325,395 CARRASCO ERIC & PATIlIOA M Improved SF Home QOOO ,207 $50,999 $361,206 SHEKHAR SHASHI & NAMNI Improved SF Home QOOO ~20,2ti3 $50,999 $~71,262 IiA PHAN D & HUONG D ImpwlGd SF tiome 066.Q OOOO 0.lS6 $341,599 "",999 $~92.s98 ALLRED DARIN e & BETH A Improved SF Home 0fi6.{)17()'olS , ,999 $33O,z4ll DELUCE RON Improved SF Home 06!Hl QOOO 0.U8 $299,874 $50,999 $350,873 VANG(OU Improved SF Home ().{117 oooo 0,ll8 5345,253 $50, ,252 AGYEMAN (WAKU S Improved SF Home ()56.() $268, $330,175 JOSEPH MALOUF INVCOMPANV Improved SF Home 066.Q Q $60,000 $]83,990 j-iorgan MATHEW & TARA Improved SF Home 06S-O ,318 $81,598 $331,916 ARCIAGA UTA C Improved SF Home 06& $81,598 $376,Ul TAAN STEVEN VAN Improved SF Home 066.( $278,129 $81,598 $359,727 DEMESA GA8RIEL R Improved SF Home 066.(l ,209 $61,198 $334,407 MASSARO CHERVlE L Improved SF Home 0f:>6.IJ OOOO $~08,023 $61,198 $ ~69,221 laysoic Impro~~ SF Home ,731 $61,198 $363,929 BEIDALAH ATHMAN H Improved SF Home $328,423 $ $389,621 HOWARD GARV 0 & NORA F Impro~ed SF Home $275,554 $61,198 $336,752 TOSTA 2004 REVOCABLE TR UST Improved SF Home ,072 $61,198 $336,210 HOANG VICKY H ImpJoved SF Horne 066-(l17o.02s.oooo $296,932 $51,198 $358,130 M IRANOA GilBERT C 111 & PRISCILLA M Improved SF Home lS9 $~11,424 $61,198 $~72,622 I(ANG NEENA K Improveo SF Home 066.()170-0J ,2().4 $51,198 $]27,4Ol URQUIZO MARTHA S Improved SF Home (l66-{i ooqo ,170 $61,198 $383,368 TABORJ/ALlISON D RAMSEY 2012 REV TRUST Improlled SF Home 066.Q170-0l ,315 $61,198 $396,513 DEGUZMAN MILiEl ImprOlllld SF Home 066.Q170-0:w.oooo , ,000 $323,990 RAVARAA VAUANT 0 & luditi-i E Improved SF Home $~25, ,000 $385,062 SITHIPHO NE JERRY & JUDV Improved SF Horne Q68..() OOOO $330,714 $60,000 $390,714 TAVERAS LERWIN J & CLARISA M Improved SF Home Q $265,161 $60, ,161 FU X1NGGANG Improved SF Home S313,500 $60,000 $373,500 DOUGl.A.55 HENRY & JOSIE L Irnpn:lVfld SF Home 066.() QOOO $236,990 $110,000 $346,990 SAAR JASBIR K & JAGROOP 5 Imprv\led SF Home Q66.017D-04D-OOOO 0.14S 5~25,802 $60,000 $3&5,102 PAUUANEW IrnproIIII(I SF Home Q oooo , ,000 $3SS,9U (AUR SUKHPAL Improved SF Home $ S6O,000 $]25,190 TRAN THUYET T & JESSICA Impro ~ed SF Home J..OOOO $359, ,000 Sl19,901 NElSON RANDALL W Impto\!lld Sf Home ().(l4+oooo $290, ,000 $350,000 HUANGMEIY Improll9d SF Home ( ,472 S6O,OOO $326,472 LUUAVI Improved SF Homa ().{)46.() ,990 $60,000 $]70,990 RUTHERfORD TERESITA Irnprov&d SF Home Q S265,858 $120,000 $185,8sa JONES EDWIN Till & FRANCES C Impro~ SF Home $293, ,000 $353,317 RAMOS MARIA G & VALENTIN T Impr~)Ved SF Home ().(l49-OOQO $265,847 $60,000 $325,847 PEl leyuv Improved SF Home Q '()SO-OOOO 0.lS1 S291,~90 S6O,000 $351,390 HOPKINS SOLOMON & 8ERNADfITE F (mj)ro~ed SF Home t. $30B,640 $60,000 $368,640 LAWSON KENNETH W rmprov&d SF Home $273,354 $61,198 $334,552 VEE TIFFANV ANGELA MEl FONG Improved SF Home

215 Community Facility District No (North Vineyard Station No. 1) un< Assessed Value Owner of PaR'el Number AlWolIIAc.1 Improvements 06&-017!).{) $337,514 $60,000 $ JOHN M I.INGEII SPECIAL NEEDS TRUST Il"I"IptOved SF Home ()66.017()'0S $265,899 $GO,OOO $325,8.99 HOANGBAOT Improved SF Home ()65..() $313,445 $61,198 $374,643 QiENXUNP&NIUF I~ed SF Horne Q66.011o-05&-OOOO $267,224 $61,198 $328,421 YANG CHAO ImproWld SF Home ()(l()O $290,684 $61,19. $351,882 SUNOAMING Improved Sf Home SS-OOOO $327,617 $ $381,815 AllEN NATHANIEL & llieasiusa Improved Sf Home 06&-017()'05$-OOOO $ $60,000 $330,171 BRIGHTMAN ANNA M & RIOtAAO B Improved SF Home Q66.017f)..()6()..()() $342,676 $61,198 $403,814 RAMOS MANUel V & MARIA l C Imprgved SF Home (l66.017~1-oooo 0.13 $305,792 $61,198 $366,990 KAURJASVIR Improved Sf Home $ $21,629 LENNAR HOMESCA INCORPORATED Improved SF Home ( $279,844 $60,000 $339,844 CLAY ISIAH D & NICOLE E Improved SF Horne Q lS3 $335,240 $60,000 $395,240 50UVANNARATH HATSADY Improved Sf Home ().06S-000CI $293,706 $60,000 $353,706 VlRk JOGINDER 8. JASWINDER IlTl9f"Oved SF Home $261,990 $60,000 $321,990 BRINK MILLICENT A & THOMAS W Improved SF Home $21,629 $21,629 QUILATAN JOHN JOHN 5 Be CHERYL Improved Sf" Home ()'066' DOOO $21,629 $21,629 THICH ANH V Improved SF Home ()' U8 $217,395 $61,198 $178,593 PATRICK LINWOOD H Imprt)ved SF Horne $248,720 $61,198 $309,918 BORJA JOFIL RIYAOH SUSANA & LAC kr1sty T Improved SF Home ()68...{I $217,534 $61,198 $278,732 HA SKILLJENNIFER A Improved SF Home $202,874 $61,198 $264,on CHUONG PAMElA Improved SF Home 06s.D11Q...D $262,246 $61,198 $323,444 NGOMAI Improved SF Home 06fMl OOOO $212,580 $61,198 $273,778 BAUERtECHRI STOPHER H Impn:lVee! SF Home U8 $225,351 $61,198 $186,549 VANVLIETOARREN J & KASSI B Improved SF Home B3 $257,000 $60,000 $317,000 TAPIA JUAN M Improved SF Home 00& $213,481 $$1,230 $264,111 MAC GINA A Improv&O SF Home Q.002:.OOQO $257,122 $51,2:30 $308,952 BAlOiANDRASAROJINI M Im~1d SF Home Cl66-(i180-00J $313,521 $51,230 $364,751 HARPER HENRY l & YOLANDA R ImprovDd SF Home o-<lO "" $248,846 $51,230 $300,076 TONGTY Improved SF Home Q ~ ,795 $61,198 $305,993 WONG FAMILY TRUST Improved SF Home $288,175 $51,230 $319,40S JAGAOISH SHYLAJA ImproVed SF Home $ $51,230 $209,019 ERRECAlDE MINDY ICAHNONG Improved SF Home Q $ $51,230 $211,202 SNEll ERNEST M JR & DONNA M ImprO ed SF Home 06& $268,921 $51,230 $320, 151 GROSS PAULA 5 & PHIUP M Improved SF Home $285,962 $.51,230 $337,192 TSAO CHERI" kevin Improved SF Home ,281 $51,230 $21l,5ll PHANCU Improved SF Horne $238,723 $51,230 $289,953 BUI HElEN Improved SF Home 06& $297,732 $51,230 $348,962 YANG HCUAV Improved SF Home $267,594 $51,230 $318,824 BHANDAt NARINDER 5 Improved SF Home $218,287 $51,230 $269,517 CHON LUNA Improved Sf" Home O-() $289,088 $51,230 $340,318 SIMONS DIANA l & MATTHEW P Improved SF Home $280,756 $51,230 $331,986 SINGH GURJIT Improved SF Home $231,867 $51,230 $283,097 SCOTT CASEY A 8. AlEXANDRA 0 Improved Sf Home 06& $328,082 $51,230 $379,312 HAESCHE DAVID M & DARO Improved SF Home ,941 $51,230 $276,171 SIEFkEN ANNE M Irrtp(oved SF Home ()'021-OOOO $321,523 $51,230 $372,753 T\JTT VOlANDA Y Improved SF Home ()'022-OO $277,053 $51,230 $328,283 CONCEPCION CHRISTOPHER P & RUBY'" Improved SF Home 06& J..OOOO $234,822 $51,230 $286,052 BAkER JEVAUGHN Improved SF Home () oooo $268,437 $51,230 $319,667 NGUYEN HOANG 0 Improved SF Home B()'025-OOQO ,000 $19,284 $105,284 PIERRE MAXIME & NADIYAH Improved SF f-iome $192,000 $19,284 $211,284 AMOR ALFIE t ImplO eq SF Kame ()'027-OOOO $19,284 $19,284 RIVERA MARCO Improved SF Home $19,284 $19,284 SHANKLI keith A Improved SF Home o-02~ $19,284 $19,284 YOUNG SHI N-CHEN Impltlved SF Home $19,284 $19,284 RAMOS ERlCKSOili Improved SF Home Q66.01Bo.Oll-0D $19,284 $19,284 HOLTZOAW DAVID WHEELER Improved SF Home $ $19,284 THACH JACKSON Improved SF Home O.14B $19,284 $19,284 TON MAE 5H.AlYMAR SA01ILLER Improved SF Home $19,284 $19,284 ENG EDWARD N" YOLANDA Improved SF Home 06& $328,620 $61,198 $3-89,818 ARMSTRONG REBECCA M ImPlOVed SF Horne 066-!I180-0J $19,284 $19,2&4 l TAV Improved SF Home Cl66-(i OOOO 0.29 $344,576 $61,198 S40S.774 OVORNIKOV liuya P & SERGO Improved SF Home $327,600 $61,198 $388,798 VARELA ROBERTO & SElENA ltnp!qyed SF Home Q ~OOOO $264,806 $50,999 $:315,805 CAYA8YAB CHRISTlNAJ Improved SF Home 066-Q180.Q4().OOOO $318,998 $50,999 $ JEANES RAYMOND W & MARY E Improved SF Horne Q OOOO 0.U2 $284,879 $50,999 $33S,878 WEATHERMAN BREANNE R & TERRY E tmpro ed SF Home /lO-OoC2-OOOO $157,273 $46,174 $203,447 DEJESUS BlEI'NENlOO & RUNDA Improved SF Home O6G-Olso-o..J..OOOO $285,644 $50,999 $336,643 ESTEBAN CHRISTOPHER P & CAMilLI G Improved SF Home Il $311,591 $50,999 $362,590 PEl levu ImplOYed SF Home ~18CJ $227,650 $61,198 $288,848 ADIGUNSAMSON 0 & NINAG Improved SF Horne ""' T... ' Record Pm Io.mifieatlon $270,905 $51,2:30 $322,135 DOMINGO JADE 5 Improvtd SF Home ~ $230,.516 $71,721 $302,237 WAYNE/f'AULA URBANI REVOCABLE TRUST Improved SF Home & $259,520 $61,476 $320,996 YOKLEV 5ErH M & CHRISTlE MACRAE A tm pro~d SF Home ().() $305,14.5 $61,198 $366,343 5HJ:RABAK ILYA ERGENIEVICH Improved SF Home SO-0SCI-OOOO $263,538 $61,198 $324,736 THUN kao C Improved SF HOmll Q.051-OOOO $254,995 $50,999 $305,994 VAUGHN LESA Improved SF Home $309,489 $ $360,48.8 AZllMUSA Improved SF Home Q..05J-OOOO $280,538 $50,999 $331,537 DO PHEX Improved SF Home BO-054-oooo $312,903 $50,999 $363,902 PINISETTY OINESH 8. MANASA Improved SF Home 0Ei S $335,849 $50,999 $386,848 BASCO LEA ANNE C & )QSEPH C Improved SF Horne Il $274,364 $50,999 $325,363 M ACARA EG TORRES CAROUNA Improved SF Home Il $19,284 $19,284 DAkAN JESSICA l & SHANE W Improved SF Home $19,284 $19,284 le UNH PHAN Improved SF Home (l.O $ $19,284 mnovalov DENNIS & ANNA Improved SF Home 006<,""""""" $19,284 $19,284 OOMINGUElICIMSERLY J & RAYMOND l Improved SF Home 1l66-01BQ..061-OOOO $19,284 $19,284 ANDEllSON CHASE & SARAH Improved SF Home Q66.(I l ao.oo2-oooo $ $19,284 SINGH REGINA & WAY Improved SF Home 006-{) QOOO $19,284 $19,284 CHIMA AMARPREfT 5 Improved SF Home 006<'80<)64.0() $19,284 $19,284 NAIDUAROIAl. Improved Sf Home: 006<,8<>06><l $19,284 $19,2:84!(AUR GUI!DIP Improved SF Home 006<,,,,,,,,,,,,, $255,347 $61,198 $316,545 MADAR ANDREW W Improved SF Home a0.007-oooo 0.U8 $2oo,9lS $61,198 $262,123 ZAMORA CHARLIE l H ImprO~ld Sf Horne 006<,,,,,,,,,,,,, 0.U8 $215,494 $ $276,692 CHAO FRANK R & YUJIAO Improved SF Home U8 $25<1,092 $ $315,290 JOHNSON VENUS 0 Improved SF Ho(11e 06&-0111().(170-00Q0 0.U8 $201,956 $ $ SCHMIDT ERICT Improved SF Home ~160-07t-OOOO $1l3,562 $61,198 $184,760 DElEMAR CAROLYN M Improved SF Home $246,824 $61,198 $ MADRID PAUlJ & MARTINElJENNEl M tmpro~bd Sf" Home 06&-01BD $220,678 $61,198 $281,816 ALVAREZ JANET IIT1Pfl1~ed SF Home o.ua $214,674 S61/198 $275,an NGUYEN OIEW T N Impro~ed SF Home 06& $2S4,179 $61,19B $315.3n REYNOLDS SHERI C Improved SF Home $203,985 $61,198 $265,183 GRAVEN8ERG ARACELE Improved SF Home $236,316 $60,000 $296,316 CA,BALI.ES AL OANIEll Improved SF Home QS6..019D-002-OOOO $200,900 $60,000 $260,900 SAGASTUME MARSTON KATHRYN Improved SF Home _ S216,194 $60,000 $276,194 XIONG ZANG Improved SF Home

216 "'"' Community Facility District No (North Vineyard Station No. 1) Assessed Value ""' Parcel Number ArlIa (Ac.) Improvements Total Record P, Identification $244,985 $60,000 $304,985 TRANZOR llna M Improved SF Home 06& U8 $209,856 $60,000 $269,866 WEE STEVEN M & CATHERINE G Improved SF Home U8 $188,117 $90,000 $278,117 DEYL1US JESSICA A Improved SF Home $200,481 $60,000 $260,481 SHaTON TREVOR J & ERIKA L Improved SF Home $249,187 $60,000 $309,187 FRINCKE BRIAN Improved SF Home $221,742 $60,000 $281,742 SINGH ASHNA 0 Imp~ed SF Home $WS,587 $60,000 $265,587 SINGH DAUlT Improved SF Home 0S oo $222,900 $60,000 $282,900 BOOKER TAMARA Y Improved SF Home QOOO 0_108 $245,848 $60,000 $305,848 LEAP JEFFREY L Improved SF Hame $174,990 $90,000 $264,990 MICAllEF CHAR LOnE Improved SF Home $215,273 $60,000 $275,273 HUA DAN Improved SF Home _108 $203,481 $60,000 $263,481 RAPTAKIS MICHALlS Improved SF Home 0S6-019O-o18-oooo $lso,199 $90,000 $280,199 WYCI<OFF BRm G Improved SF Home $219,843 $100,000 $319,843 5ANCHEZ IAN JAMES & TATIANA Improved SF Home $224,629 $60,000 $284,629 CHENNUPATI SRINIVASA R Improved SF Home 066-{)19O $204,990 $60,000 $264,990 CHAU CORAZON Improved SF Home lHJOOO $216,832 $60,000 $276,832 TRINH FUONG Improved SF Home 0S oo $260,220 $60,000 $320,220 HARRY BARBARA A Improved SF Home <108 $208,307 $60,000 $268,]07 VANG KATHY Improved SF Home $215,990 $60,000 $275,990 WUYUN Improved SF Home $268,171 $60,000 $328,171 REMIllARD JEREMY J & ANGELA D Improved SF Home $202,900 $60,000 $262,900 AVINA ARlURO G & MARTHA A Improved SF Home & $205,005 $61,198 $266,203 PffiRSON KEllY 0 Improved SF Home $229,544 $61,198 $290,742 COOPER ANTHONY & LIDIA Im ~roved SF Home $207,955 $61,198 $269,153 TRANTHAOT Improved SF Home ,638 $61,198 $290,836 COOK WINSTON II. Improved SF Home $214,928 $61,198 $276,126 THOMAS JAIME P Improved SF Home $249,612 $61,198 $310,810 COFFEY FAMilY TRUST Improved SF Hamil $10 $10 WEfII7.El TOBY &. JENNIFER Public lli.. Not Apprdi5~ 066-C2(lO-oo:;"OOOO $68 $68 Vl/JEYARD POINT2009lLC No ~ Idenll!l~e - No! Appreised $101 $101 U S HOME CORPOP.AnON N~t Iden!r!la'Jle' No\ "pprelsed $137,166 $51,230 $ DEkONING JlliARt A & JOHN V Improved SF Home $135,956 $51,230 $187,186 PHILPOIT DENISE II. Impro~ed SF Home $155,944 $51,230 $207,174 HOLLY NELSONC & KATHLEEN M Improved SF Home $132,347 $51,230 $183,577 T~EASTER KATHY Improved SF Home $128,334 $51,230 $179,564 DISQUE JANET C& WILLIAM l Improved SF Home $156, ,230 $207,283 GAGNIER PATRICK Improved SF Horne $153,768 $SI,230 $204,998 REDFEARN OAN E & SHARON K Improved SF Home $172,172 $51,230 $223,402 WARREN ROBERT A & TAMARA II. I mpro~9d SF Home $157,604 $51,230 $208,834 GILLMYRA Improved SF Home $161,416 $40,983 $202,399 GUPTA AKSHAR P Improved SF Home 066-{)26Q.-Ol1-OOoo 0.07 $186,798 $40,983 $227,781 SLACK NHI A Improved SF Home ,192 $51,230 $214,422 GEIER NICHOLAS I mpro~ed SF Home $187,485 $30,738 $218,223 RODRIGUEZ ARTURO M & ORAUA L Improved SF Hame , $145,036 $45,899 $190,935 KAREN l GAUSS LIVING TRUST Improved SF Home $163,836 $50,999 $214,835 CHUNGHYEY&YIMH Improved SF Home $U8,262 $50,999 $239,261 DELANOY ROBERT A Improved SF Home $152,997 $61,198 $21 4,195 BARTOLOME OSCAR M & CONCHITA Improved SF Home OS9 $164,434 $50,999 $215,433 BlmE THOMAS R & JOANNE 0 Improved SF Home $175,850 $50,999 $226,849 ROBERT S/MARY E WilCOX LIVING 1999 TRUST Improved SF Home $170,942 $SO,999 $221,941 KIPP MICHAEL G Improved SF Hom", (]"021-OO $164,051 $50,999 $2ts,OSC STEWART JUOITH N Improved SF Home 06IHl oo $179,216 $56,098 $235,314 CUSIC)( GEORGE & DORIS ImprOVed SF Home $175,763 $51,230 $226,993 POWLESLAND LYNNE P & STEPHEN L Improved SF Home $168, ,983 $209,019 HALEY ROBERT D & SANDRA A Improved SF Home $224,900 $60,000 $284,900 MOORE JOHNNY E Improved SF Home $148,094 $40,983 $189,077 ONGOENUAN Improved SF Home Q $186,478 $46,107 $232,585 IMRE/HEIDE RADtSAY REVOCABLE FAMILY TRUST Improved SF Home $187,148 $81,598 $268,746 KAISER MARTHA J & RONALD H Improved SF Home Q-{l $157,146 $61,198 $218,344 M UNIZ GUSTAVO & MARY J ImprOVed SF Home (]7 $lb9,716 $66,298 $256,014 K!NSELLA BRIAN E & LOUISE G Improved SF Home OS9 $175,529 $61,198 $236,727 ZEDUn DAVID GRAOY Improved SF Home $196,757 $66,298 $263,055 GALLAGHER MAUREEN E Improved SF Home $172,838 $71,398 $244,236 ALVARAOO OLIVIA Improved SF Home ,990 $60,000 $209,990 HAMPTON RONALD F & ROSALIE C Improved SF Home OS9 $165,746 $81,598 $247,344 COOPER ANTHONY & KAREN Improved SF Htlm $183,593 $61,198 $244,791 ADAMS BJRDWEU DONNA Improved SF Home $181,199 $61,198 $242,397 UNDERWOOD ROBERT & GRACE Improved SF Home $176,446 $61,198 $237,644 PANTANO LOUIS II. & MARIA S Improved SF Home $178,707 $81,598 $260,305 TROITIER EVELYN A & RICHARD W Improved SF Home $162,981 $81,598 $244,579 WEST KEVIN S & MAUNEE L Improved SF Home 066-{) oo $176,413 $61,198 $237,61.1 CROSSWHITE KATHLEEN L Improvild SF Home $186,941 $81.,598 $268,539 CUPPLES JAfllrE & MARK 5 Improved SF Home $179,163 $61,198 $240,361 JOHNSON DANIEL S & JOAN M Improved SF Home O56-02UQ..044-oo $176,989 $61,198 $238,187 PENOE.lCTER JOAN M Improved SF Home Q.415-oooo $174,009 $61,198 $235,207 OWENS LAURIE A ImproVed SF Home Q66..() oo $188,461 $60,000 $248,461 THOMPSON STEPHEN 0 & NORMA J Improved SF Home $183,568 $50,000 $243,568 RAGLAND PAULA Improved SF Horne $190,103 $60,000 $250,103 CREWS OEBBIE J & JERRY L Improved SF Home $195,000 $90,000 $285,000 THANYAWATPOKIN TIiEIRAWOOT & PUANGTHONG Improved SF Home $ $60,000 $240,521 AMADORESSTAHl TRUST Improvilft SF Home $186,173 $60,000 $246,173 BILYl:U CONNIE L Improved SF HOO'\e $221,257 $60,000 $281,257 HARRIS CHARLES S & MARGARET L Improved SF Home $161,803 $ao,ooo $241,803 FAN YUXI Improved SF Home 06IHl $182,066 $60,000 $242,066 FURIA SILVANA Improved SF Home $205, ,000 $265,476 CORTEl NOLI 5 Improveft SF Home $199,810 $60,000 $259,810 SmLES RONALD E Improved SF Home _06 $112,075 $38,972 $151,047 SAITO ROBERT M TRUST Improved SF!;ome $208,963 $60,000 $268,963 RODRIGUEZ MYRNA J Improved SF Home $184,000 $90,000 $ COBB KEITH R & CYNTHIA A Improved SF Home $181,176 $60,000 $241,176 MCGHEE CHARLENE E Improved SF Home (lOOO 0,073 $184,000 $90,000 $274,000 JOHNSON BYRON E & MARY A Improved SF Home OS5 $153,302 $60,000 $213,302 BATESUNOAD Impro~ed SF Home $ $60,000 $232,422 ZEDtin SHERRY L Improved SF Home $20,247 $20,247 CALLAHAN JOHN & DIANA Impro~ed SF Home $20,247 $20,247 DOUPONCE GARY l & PATRIC!A A Impro vod SF H(ItTle $20,247 $20,247 WESSENDORF CHRIS Impro~ e d SF Home (] OS1 $20,247 $20,247 HAN GENE YULf Impro~ed SF Home _062 $20,247 $20,247 HARRIS GLENN E Improved SF Home $ $20,247 RAMSEY LYNN Improved SF Home OS3 $ $20,247 MElENDEZ RAFAEL Improved SF Home 0S oooo $20,247 $20,247 CHAN STELLA M & DANNY F Impro~l!d SF Home $ $20,247 STEVENSON JAMES III Improved SF Home Owner of

217 Community Facility Dlstr1ct No (North Vineyard Station No.1) I..,' Assessed Value Own~'" Parcel Number At-ea IAc.1 Improvements t.." Tobll Record p" IderrtiflCatio., 0S6-026().(l13-oooo o.os7 $ $ZO,247 KIM TAEK G & OKHEE Improved SF HoIl'Ml Q6&..( oooo $10,247 $20,241 DlfITER WlLUAM l( & DAWN J Improved SF Home !>oooo $20,247 $20,241 MCCUUOCH W fluam PAUL Improved Sf Home & $20,247 $20,247 CASUGA ROOOLFO 8 & FLORA R Improved Sf Home Q66..Q261).(ln-oooo $20,247 $20,247 OOON CAROLYN & CRES Improved SF Home l))6..q2so-(l1e-odoo 0591 OESTlNATlQNS ATVINEYARO POINT CQMMUNITY AS.SOC Pubbe Use Not ~ alst!d ij66.ti oooo los DBnNAnON~ AT VINEYARD POINT COMM ASSN PublIC U5&. Not lo,ppr')$"d ~OOOO.'66 OESTlNJo TlON ~ AT \olflleyaro POINT COMMUNITY ASSN Publie Use Not Appra.sed Q ~ o 82 M>lffiiGATE RECREATION f'ubhe Uu - No! "pprtllsed ~!j,2-oooo 0102 M>VTliG.4.TE RECREATION f'ul:i!e Un - Not /o.ppni.~ed DESTINATIONS iiitvjneyard POINT COMM AS ~N PublIC Uu Not Appals;,d """"""'><>000 _ DESTINATI ON:' ATV INEVAAO FOINT COMM A55N PublIC Use ~ t-ioi "PP'f"!!-;cxj 1J V65-0Q00 O.Ojo DESTlNATION5AH'INEY,",lm POINT COMMUNf'TY A)SN PublIC U~I! - Nol Appfa.siId ~ DESTiNATIOth A.T VINE'\'ARO POINT COMMUNITY ASSN Public U~e Nol Ap"..a.~ QG6..{I260-0S :17 DESTINA.TlON5 AT VlNEYARD POINl CVMMUNITY ASSN ~ubht: Ulili - Not Appralsosd otlehi260-0e DESTINATION) AT VINEYARD floint COMMUNITY AS5N Public llq - No! Appra'Jed ose-026o.()8i1-oooq o f)2s DESTINATIONS AT.JINEYARD FOINT COMMUNITY ASSN Public U~.. - Not Appral!>ed 066-D~ 00'1:8 D ESO NATlO ~S AT VINEVA~D POINT COMMUNITY ASSOC Pubh e- US"" Not Appralud >169,893 $51,230 $221,123 (ioman STANLEY ImproveG SF Home Q oooo $ $46,107 $219,3U SLAUGHTER RODNEY A Improved SF Home ( $176, , ,422 FOlENA RtCHARD P & 8AR8ARA 0 Improved SF Home Q $159,000 $60,000 $219,000 MAYKATHRYNJ ImproVed Sf Home 1J G-005-OOOO $117,830 $51,230 $169,060 5URVIVING SPOU5E5TRU~/JANI5 FAMILY TRU5T/ETAl Improved SF Home Q $11.04,960 $52,254 $167,.214 GREENE R08ERT J & SHARON Imptgved SF Home $105,541 $51, ,771 WILU5 MARY A Improved SF Home Q66.027()-Q ,500 $60,000 $2.16,500 WHISTON WIllIAM C Improved SF Home $1.39,617 $52,254 $1..91,811 RANKE MARYA Improwe(i SF Holl'Ml ()"{)IO-DOOO $121,004 $52,2S4 $173,258 kumar SATYA & PRITHI Improved SF Home Q OOOO ,515 $ $158,145 MAITAUNDAL Imploved SF Home 0S6-C21().(l12-OOOO 0.0$9 $122,952 $ $114,182 RENSHAW TERRANCE A & SANDRA l 'mptoyed Sf Home $97,540 $61,416 $159,01. GERAlD E STEWAAT JR LIVING TRUST Imp!'D'led Sf Home ()66.021().(l D... $ $52,254 $173,955 DIAl 5TEPHEN Improved SF Home Q $U2.970 $ $174,200 8ECER RA FAMILY TRU5T Improved SF Homa 0S6-Q270-01s.oooo 0.05 $117, ,848 DEl ESTllE2 ARMOND l & MARYlEE Impl'O'Ied SF Home $127, ;230 $118,916 MEl,NIKOFF NICHOlAS JR ImPfoved SF Home ().(l $118,000 $60,000 $118,000 GARREN MIQ-lAH A Improved SF Home HXlOO $125,186 $ $176,416 HARPER JEAN ImptQVed SF Home 06&0270-0zu..oooo $154, , ,851 HOGAN 5HIRLEY MAE Improved SF Home ()2 ' ,547 $ $1B6,n7 ANORIOGE MARIANA t Improvi!cl SF Home $ $ $154,115 TAYlOI!. RICHARD Improved SF Kame '() $1S1,641 $ $202,871 MARTINEZ RONALD & JODY Improved SF Home 01» $ $S1,230 $179,048 DUNBAR CHARLE5.!05EPti ImpfOvlld SF Kome $144,469 $ $19S,699 TURNIf'5EEO ~ATHERINEA Imptoved SF Home 066-C21().(l $ $Sl,13O $171,621 FEL T5 PAT5Y j Improved SF Home 06& $119,356 $ $180,841 MAGGY PATRICIA A Improved SF Home $ $51,230 $194,674 RANES HERMAN & VICTORIA Imploved SF Homll S-Oooo 0.05 $119,000 $ $119,000 8ERLI SUSAN M Improved SF Home $145,494 $51,230 $196,124 $TPIERRE SHIRLEY Improved SF Home 066-{) Q $123, ,230 $174,340 PLATE THEODORE G & JUOlnt A Improved SF Home D.D65 $ $31,2.13 $152,211 RONALD 0 LONG REVOCA8LE TRUST Improved SF Home $151,129 $51,230 $202,359 8ENJAM IN/SUSAN HARRISON 2014 TRUST Improved SF Home $140,310 $51,230 $191,600 WOLFGRAM GAYLE Improved SF Home $148,492 $51,230 $199,722 TSUHA FAMILY TRUST jmproved SF Home $158,196 $ $209,426 JANICE TRUMAN LIVING TRUST Improved SF Home $ 141, ,230 $192,153 HALL DANtn' L Improved SF Home $128,931 $51,230 $180,161 PLATE TI1EODORE G & JUDlnt A Improved SF Home i-OOOO 0.01 $153, ,230 $204,254 HIGGINS FAMilY TRUST Improved SF I10me $:132,658 $ $ STEVENS DONALD l & MIRIAM E Improved SF Home 0S6-Q210-Cl'1-OOOO 0.OS4 $:132,563 $51,230 $183,793 MICHAEL J EJCAS Improved SF Heme $151,492 $50, ,491 ARC ALICE A hnprovlpd SF Home (4) $190,012 $SO,999 $241,071 CHAfIIlCAM T Improved SF Home OOQO 0.01 $198,002 $50,999 $249,001 8ROUSSARD PATRICK R ImprooJed SF Horne ,997 $61,198 $214,195 HAWI(S TERRY 0 ImplO'led SF Home G $189,130 'SO.." $l4o,u9 MONTAGNA M ICHAElASR Improved SF Home 06f> OOOO 0.01 $213, ,999 $264,925 COUJNS JAMES TIMOTHY Improved SF Home $ ,999 $242,921 KEVIN BlOOMGREN 2006 REVOCABLE LIVING T Improwed SF Home $ $50,999 $242,533 JOHNSON FlORENCE Improved SF Home Q66.021O-Q ,247 $20,247 DENIS f/joan E M UllEN 1997 TRUST Imploved SF Home Q S1-OOOO $20, ,247 LENNAR HOMES CA INCORPORATED Impl'owed SF ~ome Q-(l $ $20,141 HINDS WilliAM & TERRY Improved SF Kome $50,999 $251,171 MACALUSO JANE T Improved SF Home $159,390 $50,999 $210,389 PARK CHANG H & SOYOUN Improved SF Koll'Ml $188,173 $50,999 $239,112 NIZAM PARVEEN & MANZOOR Improved SF Holl'Ml & "" $210,219 $50,999 $26 1,218 SCHULT2 5U5AN Improved SF ~ome $183,918 $50,999 $134,917 CAMP05 5HAREENA 0 & JAIME J Improved SF Home O-Q $165, ,999 $216,129 CONSTANCE J OAVIS LIVING TRUST Improved SF Home () O $194,995 $50,999 $245,994 II'ffiNJIAN UNDA J Improved SF Home $189,051 $81,598 $210,649 ESCALANTE JESSE H & PAULA M Improved SF Home $152,990 $60,000 $2U,990 ORTIZ PEARL Improved SF Home ,216 $81,598 $145.,814 PARK JUN II' & WON H Improved SF Home 06& $208,496 $61,198 $269,694 8EEDY DAVID G & SHARI Improved SF Home $178, ,000 $238,400 FARVER AUAVAN & EllEN R Improved SF Home < $156,914 $61,198 $218,112 ELLSWORTH EiLeEN Improved SF Home & $153,526 $42,125 $195,651 HENRY WOlff II' Improved SF Home ,241 $20,241 NGUYEN PHUONG Improved SF Home Q66.027,... D... $20,247 $10,241 8lAS &JOSEFINA DE LA CRUZ lru5t ImptO ed SF Home ,232 $76,498 $250,730 THORP DOROTHY Improved SF HoIl'Ml ().(l7D-OOOO $183,184 $60,000 $243,184 8RUTON CRt5Tl NE ImprO'led SF Home $ $61,198 $222.,893 Elll5 CHARLES W III IrnprQ'ICd SF Home $184, ,198 $245,199 QARA WAmR5 REVOCABLE UVING TR UST Improved SF Home 0S $128, ,798 $220,(m HOWAI 8&ONG PEl F Impnwed SF Horne 06& $160,090 $80,000 $240,090.IOAQUlfII J/J ARILYN J DE OLIVEIRA 1999 REV TRUST Improved SF Home ().(l $157, ,t.98 $218,392 WALTON ALAN Improved SF Home $157, ,000 $217,674 QUICHOCHO f'eter Y IrnprO'led SF Homa $116,413 $ $236,4U POTEET DAVID G Improved SF Home $155,124 $60,000 $215,124 PUll FAMILY IRREV TRUST Improved SF Home 06& ~OOOO $160,730 $80,000 $240,130 AMOS SANDRA E. Improved SF Home $149,083 $60,000 $209,083 MELNIKOFF N I C~ Improlled SF Home $164, , ,034 KAPLAN MICHAEL A & JUlIE A Improved SF Home QOOO $191,385 $ $252,583 W02NICK DANIEL J & EUGENIA E Improved SF Home $9 $20,241 $20,241 lennar HOMES CA INCORPORATED Improved SF Home $20,247 $20,241 LENNAR HOMES CA INCORPORATED Improved SF Home S20,247 $20,247 LENNAR HOMES CA JNCORPORATED Improved SF Home

218 ""' AS$essed Value OWner of Area {Ae.) Impn;lveme/lt$ c.", Total Record $20,247 $20,247 lennar HOMES CA INCORPORATED 0,064 $193,090 $20,247 $324,541 GOODMAN THOMAS G & DIANE L Improved Sf Home $170,429 $20,247 $190,676 EISN ER CARLA FlORA ImprtlYed Sf Home $155,712 $20,247 $175,959 CALVillO LINDA MA RIE Improved SF Home 0.05 $160,134 $20,247 $180,381 JEFFRIES CARL T Improved SF Home $171,382 $61,198 $232,580 VINCENT PATR ICI A ANN Improved Sf Home $133,572 $83,120 $216,692 SDGE CHARLES Improved SF Home 0.1 $234,914 $61,198 $296,112 HINCHMAN ROBE RT t JR & ROBERTA F Improved SF Home $158,300 $60,000 $218,300 JEN SEN JOHN J & CYNTHIA 0 Improved Sf Home 0.06 $158,623 $61,198 $ NELSON LINDA 5 Improved Sf Home 0,073 $179,309 $90,000 $269,309 HANSON KEV IN 0 Improved SF Home 0.06 $157,129 $80,000 $237,129 R06ERTS THOMAS E & JUDY K ImpfClvecl SF Home $20S,637 $60,000 $Z6S,637 M ITCHelL CORINNE C & GLENN.S Improve d SF Home $177,566 $90,000 $267,566 JOHAL GURNAM S & AMARJIT K Improved SF Home ,000 $ $ NGUYEN KHAL Y Improved SF" Hom!:> 153 OESTlNATlON5AT \fineyaad POINT COMMUNtTY A...(,SOC P!Jbltc Use Nol A.ppra;sed OS, DESTINATIO NS AT 'VINF'fARO POINT COMM ASSN Publl: Ute> N'lt AppJ1l ~"!d DESTINATIONS ATVlt-IEYARD POlf'lT COMM ASSN PublIC Use - No'... ppralsed 0"" DESTINATIONS AT V'NE"1ARQ POINT COMMUNITY ASSN Publl{: U s~ - NCit >\ppr>nsed o Oi l Publ,.. U'";e N?! Appraised SOll11iGATE RECREATION PubliC U~". Not f,ppra,st-d 0071 SOUTHGATE "ECREATION Putlllt: Use ""'I A ~pra l sed 025 SCUTr1GATE RECREAnON Public U!it! - Not Appr.lIsed 0027 DESTINATIONS AT VI NE"1ARO P.OINT COMMUNITY ASSOC PubliC U~ Not.-.pptllised 0026 DESllNATlON$ AT Vl t-ievaro POINT COMMIJNITY ASSOC Pub,,: Use Nol Appral~ed 0026 DESllNATlONS AT VINEYARD POINT COMMUNrTY ASSN PUt>iI!; I)~ Not 6,ppralsed o O~!. DESll NATION ~ AT vineyard POINT COMMUNIT( ASSN Pubhc Use Not App r",,~ed 0016 DESTINATIONS ATVINEY~RO POINT COMMUNITY ASSOC PUblf,;: Use Not ApP«'ilsed 00" OESllNATlONSAT VINEY.4RD POINT COMMUNllY ASSQc Pub"c U:.:e tlot Appral~.. d 0393 OESTINATlONS AT VINEYAPD POINT r..ommuj'l11'y ~SOC Not id""~ ~"liie Not Appf'!llSf.!f 00" SOUT11GATE ~ECREATION AND PARK DISTRI CT Not td~nlffillb le. NOI '\pprd',ed Village 1 Individual lois (APNs) valued below Recorded Sund;yjsion Map Not Appr.llsad 16.5 $495, ,000 LENNAR HOMES CA Unimproved SF Parcel with T.M APN wa, on ROil, but now IS not referenced? Unimproved SF Parcel with T.M. & Clubhouse 6.77 $203,000 $203,000 US HOME CORPORATION Un;mproved MF" PerCliI ,000 $166,000 US HOME CORPORATION Unimproved SF Parcel with T.M Not identifiable Not Appraised S.1S 54' 54' LEt>/NttR HOMES CA PublK; U"'e - Not Appraised ' $49 LENNAII HOMES CA PubliC Use Not Appral~e d S38::1,649 $383,649 LENNAR HOMES CA INCORPORATED Ulllmproved Lots Now Village 'I? $5,3S4 55,354 lennar HOMES CA Unimproved SF" Lol (Village.. pin.) $5,954 $5,354 lennar HOMES CA Unimproved SF lot (VIllage 4 ptn.) $S,354 $5,354 LENNAR HOMES CA Unimproved SF Lot (Vlllage4 ptn.) $5,354 $5,354 lennar HOMES CA Un;mproved SF lot MHelOe 4 ptn.) $5,354 $5,354 LEN NAR HOMES CA LIflimproved SF Lot (VIllage 4 pin.) $5,354 $5,354 LENNAR HOMES CA Unimproved SF Lot (Vllfage 4 pin.) $5,354 $5,3$4 lennar HOMES CA Unimproved SF" lot (Village 4 pin.) $5,354 $5,354 LENNAR HOMES CA Unimproved SF Lot (Vllla5le 4 plnj $S,354 $S,354 LEN NAR HOMES CA Un;mproved SF" loi (Vdlage 4 pin.) $5,354 $S,354 lennar HOMES CA Unimproved SF Lot (Village 4 pin.) $5,354 $S,354 LENNAR HOMES CA U(limpro~ed SF" Lol (Vlnage 4 pin.) $S,3S4 $S,354 LENNAR HOMES CA Unimproved SF" lol (Villege 4 pin.) $5,354 $5,354 LENNAR HOMES CA Unimproved Sf Lol (VIllage 4 ptn.) $S,354 $S,354 LENNAR HOMES CA Unimproved SF lot (Villega 4 pi n.) $5,354 $5,354 LEN NAR HOM ES CA Un;mproved SF Lot (Village 4 pin.) ,35.4 $5,354 LENNAR HOMES CA UnImproved SF lot (VIllage 4 ptn.) $S,3S4 $S,3S4 LENNAR HOMES CA Unimprovlld SF lot (Village 4 pin.) $5,354 $5,354 lennar HOMES CA Unimproved SF Lot {Villelle 4 pin.) $5,354 $5,35" LEN NAR HOMES CA Unimproved SF l ot (V"rIlage.. ptn.) $5,354 55,354 LEN NAR HOMES CA Unimproved SF Lot (Village 4 ptn.) $S,354 $5,354 LENNAR HOMES CA Unimproved SF Lot (VIllaGe 4 ptn,) $5,354 $5,354 LfNNAR HOMES CA Unimproved SF lol (Villege 4 pin.) $S,354 $S,354 LfNNAR HOMES CA Unlm pro~ed Sf Lol (Villalle 4 ptn.) $5,354 $5,354 LEN NAR HOMES CA Un;mproved SF lot (Village 4 ptn.) $5,354 $S,3S4 LEN NAil HOMES CA Unimproved SF Lot (Ville!ile 4 ptn.) 0.14 $5,354 $5,354 lennar HOMES CA Unimproved SF lot (Villagl!l <I ptn.) $5,354 $5,354 LENNAR HOMES CA Unimproved SF Lot {Villllile 4 ptn.) $5,354 $S,354 lennar HOMES CA Unimproved SF l ot {Village 4 pin.) 0,16 $5,3S4 $5,354 lennar HOMES CA Un;mproved SF l ot (Village 4 ptn.) $5,354 $S,354 LENNAR HOMES CA Unimproved SF lot (Vill",!!e 4 pin.) $S,3S4 $5,354 LENNAR HOMES CA Unimproved SF lot (Villa!!e 4 pin.) $5,354 $5,354 LEN NAR HOMES CA Unimproved Sf lot (Villalle 4 pin.) $S,354 $S,354 LENNAR HOMES CA Unimproved SF lot (Village 4 pin.) $S.354 $5,354 lennar HOMES CA Unimproved SF lot (V11I ~ge 4 pin.) $5,354 $S,3S4 LENNAR HOMES CA UnImproved SF lot {Village <I pin.) $S,354 $5,354 LENNAR HOMES CA Unimproved Sf Lot {Village 4 ptn.) $5,354 $S,354 LfNNAR HOMES CA Unimproved SF lot (Vtllagll 4 pin.) $5,3S4 $5,354 lennar HOMES CA Unimproved SF l ot {Village <I pin.) $5,354 $S,354 lennar HOMES CA Unimproved SF lot (Vtllage 4 pin.) $5,354 $5,354 LENNAR HOMES CA Unimproved SF Lot {V~llIge 4 pin.) 0.13 $S,354 $5,354 lennar HOMES CA Unimproved SF lot (Villalle 4 pin.) $5,354 $5,354 lennar HOMES CA Unimproved SF Lot (VIPalle 4 pin.) $5,354 $5,354 lennar HOMES CA Unimproved SF l ot {Village <I ptn.) $5,354 $5,354 tennar HOMES CA Unimproved SF lol Milage 4 pto.) $5,354 $5,354 LENNAR HOMES CA Unimproved SF Lot (Villalle 4 ptn.) $5,354 $5,354 tennar HOMES CA Unimproved SF Lot (Villalle 4 ptn.) $5,354 $5354 lennar HOMES CA Unimproved SF Lot (VIllage <I pin.) ,3S4 $S,354 tennar HOM ES CA Unimproved SF LClt (Village 4 ptn.) $S,l54 $S,354 tennar HOMES CA Unimproved Sf lot ('ViRag!! 4 ptn.) $5,354 $5,354 tennar HOMES CA Unimproved SF Lot (VtHalle4 ptn.) $5,354 $S,354 lennar HOMES CA Unimproved SF Lol (Vlllagll4 ptn.) $5,354 $5,354 t ENNAR HOMES CA Unlmprovlld SF lol (Village 4 pin.) $5,354 $S.354 l ENNAR HOM ES CA Unimproved SF Lot (Vilialle 4 pin.) $5,354 $5,354 W'JNAR HOMES CA Unimproved SF Lol ('ViUage <I ptn.) $5,354 $5,354 tennar HOMES CA Unimproved SF Lot (Village 4 pin.) 0.U5 $S,354 $5,354 lennar HOMES CA Unimproved SF" lot (Vtlla ge 4 pin.) $5,354 $5,354 lennar HOMES CA Unimproved SF Lot (Village 4 pin.) $5,354 $5,354 lennar HOMES CA Unimproved SF Lot {Villag!! 4 pin.) $5,3S4 $S,354 tennar HOM ES CA Unimproved SF" lclt (Village 4 pin.)

219 Community Facility District No (North Vineyard StaUon No. 1) Assessed Valua awnetof "',' Pnc:el Number Area (Ac.) Improvamants "',' Toto' ".,,,no p~ ldentifh:atiol'l 06s.02eo-06O-OOOO $5,354 $5,354 LENNAA HOMES c:a ljoimproved S lot (VoIIage.. pin.) "()()oo $5.354 $5,354 lfnnar HOMES CA Unimproved SF L.oI (V~llIge" pin.) () $5,354 $5,354 lennar HOMES CA Unimproved SF Lot (\IiHa;e 4 pin.) Wo $5,354 $5,lS4 LENNAR HOMES c:a UnimproveD SF LD1 (\IiUage 4 pin.) oe~02bo $5,354 $5,354- LENNAR HOM ES CA U nkt1 pro~ eo SF Lot {Vinag. 4 pin.) $5,354 $5,354 l ENNAR HOMES CA Un impro~ed SF Lol {ViIlIlQO 4 pin.) De5-028{) Q $5,354 $5,354 lfnnar HOMES CA Unimp«>~ed SF Lot (Village 4 ptn.) 06$ "" $5,354 $5,354 lennar HOME5 CA Unimproved SF Lol (Villa9fl.o$ pin.) 06s-t>ZBO-068-OOOO 'S.3S' $5,354 lennar HOMES CA lmimproved SF Lot (V~l a ge 4 pin.) $5,354 $5,354 LENN AR HOMES CA UnimptIJVed SF Lot {Village 4 PIn.} $5,354 $5,354 tennar HOMES CA Unimproved Sf Lol (Village" pin.) 06~BO ,354 $5,354 LENNAR HOMES CA Unimproved SF Lot (VIllage 4 pin,) 06~8O-()72-oooo $5,354,S.3S' lennar HOMES CA UlUmptoved Sf Lot (VII.V- 4 pin,) ? $5,354 $5,354 lennar HOMES CA Unimproved Sf LOI (Village 4 ptn.) BD $5,354 $5,354 lfnnar HOMES CA Unimproved SF Lot (V~I.glI 4 pin.) $5,3S4 $5,354 LENNAR HOMESCA UoImproved SF Lot (VHlag' 4 pln.l ().() O.2U l ENNAIi HOM ES Co\ PublIC Ur.e Not ~pprals&d '" '< "90 t ENNAR HOMES CA PublIC Us.e - Nol Appraised ", ,,0> $49 '" lfnnap HOM fs CA PublIC U ~ Not I>pJ>r.Ilsed lennar HOME! CA ", '" Putl l~ Use - Noll Apprllll.."'d I)l)00 $4lt,n? DASVEER5 " VASVINDAR" 5HERGIll Improvf>d SFR - Not ",pprllised 0E&-031t).OO:!-OOOO l.' $ 106 DOUGLAS a/aliine R BA' less REV0CA5lf UVlNG TRU5T PLtlkc Use - Nol Appra"~ ' $7.240 S7~4<) lennar HOMES CA INCORPORATED Improyed Sf lot (Village 1) ().002-oooo $6,995 tennar HOMES CA INCORPORATED Improved SF Lot (VrII~ 1) $6,995 LENNAR HOMES CA INCORPORATED Impro~ed SF Lot (VIUage 1) ".m $6,995 $6,995 t NNAR HOMES CA INCORPORATED Improved SF loi (Vina", 1) $6,995 tfnnar HOMES CA INCORPORATED I.mpnwed SF la! (ViUage 1) O.I OS $6,995 lfnnar HOMES CA INCORPORATED Improved SF LOI (ViII.9' 1) ".m O.lOS $6,995 lfnnar HOMES CA INCORPORATED Im>'foved SF Lot (\linage 1) ".m $6,995 $6,995" UNNAR HOMES CA I NCOR~ORATEO Impro ~ed SF Lot (Villag.1) $6,995 $6,995 tennar HOMES CA INCORPORATEO Impro~er;! SF Lol (ViNage I) $6,995 $6,995 lennar HOMES CA INCORPORATED Unimprover;! SF Lot (Villagll I) $6,995 $6,995 lennar HOMES CA INCORPORATED Unjmpro~ ed SF LOI (VIllage I) $6,995 $6,995 l ENNAR HOMES CA INCORPORATE D Unimproved SF LOI (VIllage 1) B $6,995 $6,995 LENNAR HOMES CA INCORPORATED Unimprover;! SF Lot (VIII.ge 1) $6,995 $6,995 l ENNAR HOME5 CA INCORPORATED Unimproved SF Lol (Villilge 1) S-OOOO O.lOS $6,995 $6.995 LENNAR HOMES CA INCORPORATED Uflimprovad SF LOI (ViILag1l 1) t1 $6,995 tennar HOMES CA INCORPORATED Unimproved SF LOl (ViIIaoe 1) O.lOB $6,995 """ $6,995 LENNAR HOMES CA INCORPORATED Unimproved SF Lot (V~lagll ') $6,995 $6,995 LENNAR HOMES CA INCORPORATED UnimproYed SF Lot (Vdlagll I) $6,995 """ lennar HOMES CA INCORPORATED Unimproved SF Lot (V~lagll 1) $6,995 $6,995 \.fnnar HOME5 CA IJ'Kl)RPORATED Improved SF Lot (Vtllall' 1) 06s-t> _112 $6,995 $6,995 l ENNAR HOMES CA INCORPORATED Impr'Oved SF lot (Village 1) ) $6,99S $6,995 LENNAR HOME5 CA INCORPOIlATED Improved SF lol (Vill&ge I) ().{)23-OOOO O.lOS $6,995 $6,995 lennar HOMES CA INCORPORATED Impro~ed SF Lot (Village I) O.lOS 56,995 $6,995 lennar HOME$ CA INCORPORATED Improved SF LUi (Villa~e 1) $6,995.$6,995 LENNAR HOME5CA INCORPORATED Improved SF Lui (Villa;e 1) O. los $6,995 $6,995 lennar HOMES CA INCORPORATED I mpro~ad SF Lot {Village,> $6,995 $6,995 tennar HOM E5CA INCORPORATED ImPfoved SF Lol (V~laljle I ) 06> $6,995 $6,995 LENNAR HOME5 CA INCORPORATED l[tipro~ed SF Lot (Vijlage 1) $6,995 $6,995 lfnnar HOME5 CA INCORPORATED IlTIPfOved SF Lot (V~I&lil1I 1) $6,995 lfnnar HOME5 CA INCORPORATED Improved ".m Sf Lot (Vr/lage 1) ll7 $6,995 lennar HOME5 Co\ INCORPORATED ImproYed SFLot (ViI1bg. 1) ()()()() """,,"" lennar HOMES CA INCORPORATED Improved Sf Lot (Vdlage t) 06S-0320-<133-OQOO $6,995 ",m ".'" lennar HOMES CA INCORPORATED Improved Sf lot (Vijlagll 1) ~3~J O.IOS $6,995 $6,995 LEN NAR HOME5 CA INCORPORATED Improved SF Lot (Vmage 1) $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Lot (V~lage 1) $6,995 $6,995 lfnnar HOME5 CA INCORPORATED Irnpn)ved SF LO l (ViltagIl 1) ~ OOOO $6,995 $6,995 tennar HOMES CA INCORPORATED Improved SF Lot (\I~tage 1) $6,995 $6,995 LENNAR HOME5 CA I NCOR~ORATED Improved SF Lot (Village 1) 06> $6,995 $6,995 tennar HOME5CA INCORPORATED Improved SF Lol (Vill_ge I) $6,995 $6,995 LENNAR HOM ES CA I NCOR~ORATED Improved SF Lot (Village 1) _ $6,995 $6,995 lfnnar HOMES CA INCORPORATED Improved SF Lui (Vi~ge 1) t $6,995 $6,995 LEHNAR HOMESCA INCORPORATED Improved SF Lol (Villa;e 1) O.lDE LENNAR HOMES CA INCORPORATED public U511 - Not Apprllbed '12 '12 l ENN.AR HOMES CA tncoflpdrarro Publoc Uq, - Not Appral$ed fl.062-OOOC '12 ' $6,995 $6,995 If:NNAR HOME5 CA INCORPORATED UrlllTlptClVed Sf Lot (Village 1) ,99$ $6,995 LENNAR HOMES CA INCORPORATED Upmproved SF Lol (V,a,gll 1) 06S-Ol3O-OOl $6,995 $6,995 L NNAR HOMES CA INCORPORATED Illl'roved Sf Lol (VIUage I) O.lOB S6,995 $6,995 tennar HOMES CA INCORPORATED Improved SF lol (Vi l~e 1) O.l OB $6,995 $6,995 tennar HOMES CA INCORPORATED Improved SF lot (Villagll 1) O.lOS $6,995 $6,995 tennar HOMES CA INCORPORATED Impro'o'ed SF Lot (Village 1) O. lob $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improyed SF Lot (V~18ge 1) 06s-t>330-00a-OOOO $6,995 $6,995 lennar HOM ES CA INCO RPORAT EO Improved SF Lol (V~lagel) 00s-t>33G-Q $6,995 $6,995 lennar HOMES CA INCORPORATED Improved SF lot (Vinagel) $6,995 $6,995 l ENNAR HOMES CA INCORPORATED Improved SF lot (Village 1) $6,995 $6,995 t NNAR HOMES CA INCORPORATED Irnpro'led SF lot (Village 1) $6,995 $6,99$ l ENNAR HOMES CA INCORPORATED Improved SF Lot (ViHage 1) $6,995 $6,995 lennail HOMES CA INCORPORATED Impto'led SF Lot (ViKaga 1) $6,995 $6,995 lennar HOMES CA INCORPORATED Improved Sf Lol (Vdlag. 1) 065-0JJO.OI $6,995 $6,995 lennar HOMES CA INCORPORATED Improved SF Lot (ViUagll 1) $6,995 $6,995 tennar HOME5 CA INCORPORATED Improv'lld Sf Lol (V~'.gll 1) t1 $6,995 $6,995 lennar HOMES CA INCORPORATED Improved SF Lot (V~ liige 1) $6,99S $6,995 lennar HOMES CA INCORPORATED Improved SF lot (Voliage 1) $6,995 $6,995 lennar HOMES CA INCORPORATED Improved SF Lol (ViYage 1) $6,995 $6,995 LEN NAII HOM ES CA INCORPORATEO Imploved SF Lol (Villaga1) $6,995 $6,995 lennar HOME5 CA INCORPORATED Impro ~ed SF Lot (Vitla!}e 1) $6,995 $6,995 lennar HOME5 CA INCORPORATED I mpro~ad SF LOI (Village 1) _112 $6,995 $6,995 LEN NAR HOM ES CA INCORPORATED Improved SF loi (Villllljle 1) $6,995 $6,995 L NNAR HOM E5 CA INCORPORATED Improved SF Lot (Villagal) $6,995 l ENNAR HOME5 CA INCORPORATED ImproVed SF Lot (Villaga I) " $6,995 $6,995 lennar HOME5 CA INCORPORATED 1m"",,," SF Lot (Village 1) }65 56,995 $6,995 l NNAR HOM ES CA INCORPORATED Impl1lved SF Lol {Villag. 1) ,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Lol (V~lagll 1) """ J<>< $6,995 $6,995 LENNAR HOME5 CA INCORPORATED Improved SF lot (Village I) O-OJG-OOOO $6,995 lennar HOMES CA INCORPORATED ImprIJVIIIl SF Lot (Village 1) $6,995 L NNAR HOME5 CA INCORPORATED Improved Sf lot (Vm.ge 1) $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Lot (Vinaga 1) $6,995 $6,995 t NNAR HOMES CA INCOR~ORATED Improved SF Lol (Vlllag8 1) 06~ _ $6,995 $6,995 lfnnar HOMES CA INCORPORATED Improvad SF Lot (Villagll 1) _124 $6,995 $6,99S lennaii HOMES CA INCOR~ORATED Improved SF Lol (Village I ) 06~ $6,995 $6,995 lennar HOMES CA INCORPORATED Improved SF Lot (Villllge I ) $&,995 $6,995 LENNAR HOM ES CA INCOR~ORATED Improved SF Lol (Village 1)

220 "'"' Community Facility District No {North Vineyard Station No. 1} Assessed Value Pan.:el Number Area lac.) Improvements,",m' Total Record Pro art... Identification {)65-0:nO $6,995 $6,995 LENNAJI HOMES CA INCORPORATED Improved SF lot N'Uage I } 06!>-03S l48 'l',,, lennaji HOMES CA INCORPORATEO Public Use _ N01 Appr::llised $6,995 $6,995 LENNAR HOMES CA INCORPORAITD Improved SF lot {Village I} $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improvlld SF Lot (Village 1) $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF lol (Village 1) 06~034Q..(l()4.OOO $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Lol {Village I} $6,995 $6,995 LENNAR HOMES CA INCORPORATED I,rnproved SF Lot (Village 1) 06~ !3<> $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Lot (Village 1) $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Lol (Village 1) O-OOIHIOOO $6,995 $6,995 LENNAR HOMES CA INCORPORATED (mproved SF Lot (Village 1) 06S Q9.oooo $6,995 $6,995 LENNAR HOMES CA INCORPORAITD Improved SF Lot {Village I} $6,99$ $6,995 LENNAR HOMES CA INCORPORATED Improved SF Lol (Village 1) 06~ $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Home 06~ $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improvec:l SF Home {) OOOO $6,995 $6,995 LENNAR HOM ES CA INCORPORATED Improved SF Home $6,995 $6,995 LENNAR HOMES CA INCORPORATED Imj)foved SF Home $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Home 06~ $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved S F Home $6,995 $6,995 LENN AR HOMES CA INCORPORATED Improved SF Home $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Home $5,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Home $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Home 06~ $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Home 06~ OOOO $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Home $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Homa $6,995 $6,995 LENNAR HOMES CA INCORPORATED Improved SF Home Owner of

221 B PRELIMINARY TITLE REPORT

222 2240 Douglas Boulevard, Suite 120 Roseville, california OffIce Phone: (916) OffICe Fax: (916) Like Clockwork It North American nue Company 2240 Douglas Boulevard, Suite 120 Rosevine, CA Attention: Lucy Bendvengo Amendment No. 4 Our Order No,; Property Address: APN: and , Vineyard Creek Unit 2A, APN: , North Vineyard Greens Unit 1, Sacramento, CA Preliminary Report Dated as of August 28, 2014 at 7:30 A.M, In response to the above referenced application for a Policy of Tltle Insurance, North American Title Ins urance Comp;!lny Hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance describing the land and the estate or interest therein hereinafter set forth, insuring against toss which may be sustained by reason of any defect. lien or encumbrance not shown or referred to as an Exception below or not cxcluded from coverage pursuant to the primed Schedules, Conditions and Stipulations of said Policy forms. 1ne printed Exceptions and Exclusions from the coverage and limitations on covered risks of said Policy or Policies are set forth in Exlubit A attacbed. The Policy to be issued may contain an Arbitration Clause, When the affiowlt of insurance is less than that set forth in the Arbirrntion Clause, au acbitrnble matters shall be arbitrated al the option of either the Company or the Insured as the exclusive remedy of the Pa..'1.ies. Limitations on covered risks applicable to!he CLTA and ALTA Homeowner's Policies of Title Insurance which establish II deductible amount nod II maximum dollar limit of liability for certain coverages are also set fonh in Exhibit A Copies of the Policy forms should be n::ad. They are available from the office which issued this report. Please Tead the ej[ceptions shown or referred to below and tlle cj[ceptlons and exclusiolul set forth in Exhibit A of this rcport carefully. The exceptions and exclusions are meant to provide you with notice of mattcrs which are not covered under the terms of the tille insurance policy and should be carefully cojlsillercd. It is impo... mt to nole that this prcliminary report is not II writtcn rcpresenlallon as to the condition of title and may not list all Hens, defects, and encumbrances affecting title to the land. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy orlitle insurance and 00 liability is assumed hereby, If it is desired that liability be asswned prior to the issuance of a policy of title illsurance. a Binder or Commitment should be requested. The fonn of Policy of litle insurance contemplated by this report is: Prelim Please nole that tbe Amuica's First Homeowner's Policy (UTA! ALTA 1I0meowoer's Policy) can only be issued ou transactions involving individuals as purchasers and residential 14 properties. Any indicatiou that the America's First Homeowner's Policy (CLTAI ALTA Homeowner's Policy) will be issued in a transaction that does not meet lhese criteria is hereby revised to state that the policy contemplated is a Standard Coverage Policy. Julie Grace, Tltle Offiter Page 1 Rev. NAT 8/20/13 Order No

223 SCHfDULfA 1. The estate or interest in the land hereinafter described or referred to covered by this report is: A fee 2. Title to said estate or interest at the date hereof is vested in: LENNAR HOMES OF CAUFORNIA, INC., A CALIFORNIA CORPORATION 3. The Land referred to in this report is situated in the State of California, County of Sacramento, and is described as follows: See attached Legal Description Page 2 Rev. NAT 8/20/13 Order No

224 LIEGAL DESCRIPTION Real property in the unincorporated area of the County of Sacramento, State of California, described as follows: TRACT ONE: LOT A, ON THE MAP ENTITLED SUBDMSION NO VINEYARD CREEK 2A, RECORDED ON SEPTEMBER 27, 2007 IN BOOK 371 OF MAPS AT PAGE 4 IN THE SACRAMENTO COUNTY RECORDERS OffiCE. TRACf1WO: ALL OF LOT 1 IN THAT CERTAIN DEED IN LIEU OF FORECLOSURE RECORDED ON DECEMBER 01,2008, IN BOOK , AT PAGE 0268, OFROAL RECORDS OF SACRAMENTO COUNTY, AND AS SHOWN AND SO DESIGNATED ON THAT CERTAIN FINAL MAP ENTffiED "SUBDIVISION NO VINEYARD CREEK UNIT 2A" FILED FOR RECORD ON SEPTEMBER 27, 2007 IN BOOK 371 OF MAPS, AT PAGE 4, SACRAMENTO COUNTY RECORDS. TOGETHER WITH THE FOLLOWING DESCRIBED PROPERTY BEING A PORTION OF THE NORTHWEST ONE-QUARTER OF SAID SECTION 5 AND FURTHER DESCRIBED AS A PORTION OF LOT 1 IN THAT CERTAIN GRANT DEED RECORDED ON DECEMBER 6, 2013 IN BOOK AT PAGE 0388 IN THE OFFICIAL RECORDS OF SACRAMENTO COUNTY AND AS SHOWN AND SO DESIGNATED ON THAT CERTAIN FINAL MAP ENTITLED "SUBDIVISION NO NORTH VINEYARD GREENS UNIT 1, LARGE LOT MAP" FILED FOR RECORD ON FEBRUARY 27, 2007 IN BOOK 365 OF MAPS, AT PAGE 2, SACRAMENTO COUNTY RECORDS AND BEING MORE PARTICULARLY DESCRIBED AS FOll.OWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 5 AS SHOWN ON SAID MAP AND THE NORTHWEST CORNER OF SAID LOT 1 AS SHOWN AND SO DESIGNATED ON THAT CERTAIN FINAL MAP ENillLED "NORTH VINEYARD GREENS UNIT I, LARGE LOT MAP"; THENCE COINCIDENT WITH WEST LINE OF THE OORTHWEST ONE-QUARTER OF SAID SECTION 5 AND THE WEST LINE OF SAID LOT 1, SOUTH 00 40'58" EAST A DISTANCE OF FEET TO THE TRUE POINT OF BEGINNING; THENCE FROM SAID TRUE POINT OF BEGINNING DEPARTING FROM SAID WEST LINE OF THE NORTHWEST ONE-QUARTER OF SAID SECITON 5 AND SAID WEST LINE OF lot I, FROM A RADIAL LlNE WHICH BEARS SOUTH 57 43'51" WEST, FEET ALONG THE ARC OF A NON-TANGENT FOOT RADIUS CURVE TO THE LEFT THROUGH A CENTRAL ANGLE OF '49"; THENCE SOUTH 36 15'58" EAST A DISTANCE OF FEET TO A POINT OF CURVAlURE; THENCE FEET ALONG THE ARC OF A TANGENT FOOT RADIUS CURVE TO THE RIGHT THROUGH A CENTRAL ANGLE OF '31" TO A POINT OF REVERSE CURVATURE; THENCE FEET ALONG THE ARC OF A TANGENT FOOT RADIUS CURVE TO THE LEFT THROUGH A CENTRAL ANGLE OF 67 32'55"; THENCE SOUTH '39" WEST A DISTANCE OF FEET TO THE SOUTHERLY LlNE OF SAID LOT 1; THENCE COINCIDENT WITH SAID SOUTHERLY LlNE OF lot 1, NORTH '52" WEST A DISTANCE OF FEET TO me SOUTHWEST CORNER OF SAID LOT 1; THENCE COINCIDENT WITH THE WEST line OF THE NORTHWEST ONE-QUARTER OF SAID SECTION 5 AND THE WEST LINE OF SAID LOT 1, NORTH '58" WEST A DISTANCE OF FEET TO THE POINT OF BEGINNING, PURSUANT TO THAT CERTAIN "LOT LINE ADJUSTMENT" RECORDED AUGUST 18, 2014, BOOK , PAGE 1078, OFFIQAl RECORDS. TRACf THREE: ALL THAT REAL PROPERTY DESCRIBED AS LOT 1 IN THAT CERTAIN GRANT DEED RECORDED ON DECEMBER 06, 2013, IN BOOK , AT PAGE 0388, OFFIQAl RECORDS OF SACRAMENTO COUNTY, AND f'!s SHOWN AND SO DESIGNATED ON THAT CERTAIN FINAL MAP ENillLED "SUBDIVISION NO NORTH VINEYARD GREENS UNIT I, LARGE LOT MAP" FILED FOR RECORD ON FEBRUARY 27,2007 IN BOOK 365 OF MAPS, AT PAGE 2, SACRAMENTO COUNTY RECORDS. Page 3 Rev. NAT 8/20/13 Order No

225 EXCEPTING TIlEREFROM THE FOLLOWING DESCRIBED PROPERTY BEING A PORTION OF SAID LOT 1 AS SHOWN ON THAT CERTAIN FINAL MAP ENTITLED "NORTII VINEYARD GREENS UNIT 1, LARGE LOT MAP" SITUATED IN THE NORTHWEST ONE-QUARTER OF SAID SECfION 5 AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 5 AS SHOWN ON SAID MAP AND THE NORTHWEST CORNER OF SAID LOT 1 AS SHOWN AND SO DESIGNATED ON THAT CERTAIN ANAL MAP ENIDLED "NORTH VINEYARD GREENS UNIT I, LARGE LOT MAP"; THENCE COINCIDENT WITH WEST LlNE OF THE NORTIlWEST ONE-QUARTER OF SAID SECfION 5 AND THE WEST LINE OF SAID LOT I, SOUTH 00040'58" EAST A DISTANCE OF FEET TO THE TRUE POINT OF BEGINNING; THENCE FROM SAID TRUE POINT OF BEGINNING DEPARTING FROM SAID WEST LINE OF THE NORTHWEST ONE-QUARTER OF SAID SECfION 5 AND SAID WEST LINE OF LOT 1, FROM A RADIAL U NE WHICH BEARS SOUTH 57043'51" WEST, FEET ALONG THE ARC OF A NON-TANGENT FOOT RADIUS CURVE TO THE LEFT THROUGH A CENTRAL ANGLE OF 03059'49"; THENCE SOUTH 36015'58" EAST A DISTANCE OF FEET TO A POINT OF CURVATIJRE; THENCE FEET ALONG THE ARC OF A TANGENT FOOT RADIUS CURVE TO THE RIGHT THROUGH A CENTRAL ANGLE OF 26031'31" TO A POINT OF REVERSE OJRVATURE; THENCE FEET ALONG THE ARC OF A TANGENT FOOT RADIUS CURVE TO THE LEFT THROUGH A CENTRAL ANGLE OF 67 32'55"; THENCE SOUTH 12042'39" WEST A DISTANCE OF FEET TO THE SOUTHERLY UNE OF SAID LOT 1; THENCE COINQDENT WITH SAID SOU"THERLY UNE OF LOT I, NORTH 36015'52" WEST A DISTANCE OF FEET TO THE SOUTHWEST CORNER OF SAID LOT 1; THENCE COINCIDENT WITH THE WEST LINE OF "THE NORTHWEST ONE-QUARTER OF SAID SECTION 5 AND THE WEST LINE OF SAID LOT I, NORTH 00 40'58" WEST A DISTANCE OF FEET TO "THE POINT OF BEGINNING, PURSUANT TO THAT CERTAIN "LOT LINE ADJUSTMENT" RECORDED AUGUST 18, 2014, BOOK , PAGE 1078, OFFICIAL RECORDS. APN: ; and Page 4 Rev. NAT a/20113 Order No

226 SCHEDULEB At the date hereof exceptions to coverage in addition to the printed exceptions and exdusions in the policy form designated on the face page of this report would be as follows: 1. General and special taxes and assessments for the fiscal year , a lien not yet due or payable. 2. General and special taxes and assessments for the fiscal year First Installment: $2,163.20, PAID Penalty: $ Second Installment: $2,163.20, PAID Penalty: $ Tax Rate Area: A. P. No.: General and special taxes and assessments for the fiscal year First Installment: $2,002.95, PAID Penalty: $ Second Installment: $2,002.95, PAID Penalty: $ Tax Rate Area: A. P. No.: Supplemental taxes for the year assessed pursuant to Olapter 3.5 commencing with Section 75 of the California Revenue and Taxation Code. First Installment: Delinquent Date: Penalty: Second Installment: Delinquent Date: Penalty: Tax Rate Area: A. P. No.: $282.65, DUE 07/31/2014 $28.27 $282.65, PAYABLE 11/30/2014 $ There is no current Tax Bill issued for APN at this time. 6. The lien of supplemental taxes, if any, assessed pursuant to Chapter 3.5 commencing with Section 75 of the california Revenue and Taxation Code. 7. The lien of bonds and assessment liens, if applicable, collected with the general and special taxes. 8. Any unpaid amounts for delinquent utilities owed to, or resultant liens in favor of, the County of Sacramento and/or any incorporated Cities within the County of Sacramento. Contact the City of Elk Grove at (916) , the City of Folsom at (916) , the City of Galt at (209) , or the City of Sacramento at (916) for information on amounts due to those cities for properties within those locations. Contact the County of Sacramento at (916) for information on amounts due to any other incorporated dties, and also for information on amounts due to the County. Page 5 Rev. NAT 8/20/13 Order No

227 9. The lien of special tax for the following community facilities district, which tax is collected with the county taxes. District: EG School M-R BDS 10. The lien of special tax for the fonowing community facilities district, which tax is collected with the county taxes. District: North Vineyard Station CFD#l 11. The terms and provisions contained in the document entitled Agreement, executed by and between William Kasis, et al and County of sacramento, recorded September 8, 1983, in Book , Page 1025 of Official Records. The last mentioned item was also recorded September 8, 1983 in Book , Page 1026 Affects Tract One and Two. 12. Dedications as set forth and shown on the parcel map filed in Book 84 of Parcel Maps, at Page 5 as follows: A. Public utilities over a portion as shown and delineated on said parcel map. B. Planting and maintaining trees over a portion as shown and delineated on said Parcel Map C. 100 year food plain over a portion as shown and delineated on said parcel map D. Irrevocable offer of dedication for any and all uses as shown on said map Affects Tract Three. 13. An easement over said land for the purpose of building set back and private access and incidental purposes as set forth on parcel map filed November 29, 1984, Book 84, Page 5 of Parcel Maps. Affects: As shown on said parcel map. Affects Tract Three. 14. Provisions and conditions set forth in the "Notes" of the following map: Map: Parcel Map 84, Page 5 Reference is made to a copy of said map for further particulars. Affects Tract Three. 15. The terms and provisions contained in the document entitled "Memorandum of Agreement for Building PennitApportionment" recorded August 26, 2005 as Book , Page 1014 of Officia I Records. Affects Tract One and Two. 16. The lien of special tax assessed pursuant to Chapter 2.5 commencing with Section of the california Government Code for Community Facilities District No, , as disclosed by Notice of Special Tax Uen recorded February 21, 2006 as Book , Page 1643 of Official Records. 17. The terms and provisions contained in the document entitled Dedaration Agreement, executed by and between Standard Pacific Corp., a Delaware corporation and EI Dorado Comers LLC, a Page 6 Rev. NAT 8/20/13 Order No,

228 California limited liability company, et ai, recorded March 10, 2006, as Instrument No. Book , Page 2098 of Offidal Records. Affects Tract Three. 18. An easement over said land for temporary construction and incidental purposes, as granted to Standard Pacific Corp., a Delaware corporation in deed recorded March 10, 2006, as Book , Page 2099, Official Records. No representation is made as to the current ownership of said easement. Reference is made to said doojment for full particulars. Affects Tract Three. 19. An ordinance of the board of supervisors of Sacramento County amending the zoning code of Sacramento County Ordinance No , as amended changing the land use zone of certain property known as assessor's parcel nos ; , 043, 244, 245,046; ,002,003,016, also identified as North Vineyard Greens Unit #1, recorded April 28, 2006, Book , Page Reference is made to said document for full particulars. 20. The terms and provisions contained in the document entitled "Agreement "In Mitigation Monitoring and Reporting Program" recorded February 1, 2007 as Book , Page 865 of Official Records. Affects Tract Three. 21. An irrevocable offer of dedication, recorded September 27, 2007 as Book , Page 0412 of Official Records. To: Southgate Recreation and Park District Affects Tract One. 22. The terms and provisions contained in the document entitled "Resolution No , Resolution to Approve Vineyard Creek Unit 2A" recorded October 2, 2007 as Book , Page 0548 of Official Records. Affects Tract One and Two. 23. The terms and provisions contained in the document entitled Subdivision Agreement Pursuant to Resolution No , executed by and between County of Sacramento and Standard Pacific Corp., a Delaware corporation, recorded October 2, 2007, in Book , Page 548 of Official Records. Affects Tract One and Two. 24. Dedication as set forth and shown on the official map of subdivision No of North Vineyard Greens Unit No. 1 large lot map filed in Book 365 of Maps, at Page 2. Affects Tract Three. Page 7 Rev. NAT 8/20/13 Order No

229 25. Provisions and conditions set forth in the nnotes D of the following map: Map: Subdivision No of North Vineyard Greens Unit No. 1 large lot map?ied in Book 365 of Maps, at page 2 Reference is made to a copy of said map for further particulars. Affects Tract Three. 26. The terms and provisions contained in the document entitled Easement Agreement, executed by and between EI Dorado Corner, LLC, a california limited liability company, et al and Westamerica Bank, California banking corporation, recorded September 25, 2009, in Book , Page 369 of Official Records. Affects Tract Three. 27. An easement for water pipelines and incidental purposes, recorded October 23, 2009 as Book , Page 98 of Official Records. In Favor of: Affects: Sacramento County Water Agency A 25 foot strip over Tract Three Affects Tract Three. 28. An easement for public utility, landscaping, sidewalk and drainage and incidental purposes, recorded October 23, 2009 as Book , Page 99 of Official Records. In Favor of: County of Sacramento Affects: A portion of Tract Three 29. An easement for ingress and egress and incidental purposes, recorded October 23, 2009 as Book , Page 100 of Official Records. In Favor of: County of Sacramento Affucts: A portion of Tract Three 30. A road maintenance agreement upon the terms, covenants and provisions contained therein, executed by William E. KaSSiS, et ai, recorded April 11, 1986, as Book , Page 773, Official Records Affects Tract Three. 31. An easement for sewer and incidental purposes, recorded July 3, 2014 as Book , Page 1181 of Official Records. In Favor of: Affects: Sacramento Area Sewer District, a county sanitation district a portion of Tract One 32. No known matters otherwise appropriate to be shown have been deleted from this report, which is not a policy of title insurance but a report to facilitate the issuance of a policy of title insurance. For purposes of policy issuance, items None may be eliminated on the basis of an indemnity agreement or other agreement satisfactory to the Company as insurer. ********** END OF REPORT ********** Page 8 Rev. NAT 8/20/13 Order No

230 ***** NOTES ***** 1. Any conveyance of the herein described real property if located within the City of Sacramento will be subject to a City Property Transfer Tax at the rate stated below. Any unpaid bonds or assessments which are assumed will be added to the sales price in fixing this tax. Rate: $ 2.75 per $1, based on full value of property City of SacramentD Transfer Tax must be sent directly td the City of Sacramento. The County of Sacramento will not collect this at the time of recording. The address is 915 "In Street, Room 104, Sacramento, CA Notice of change in ownership recording procedure Effective July 1, 1985 pursuant to state law as amended January 1, 2011 (Section of the Revenue and Taxation Code), all Deeds and other Documents that reflect a change in ownership must be accompanied by a Preliminary Change of Ownership Report to be completed by the transferee. If this special report is not presented at the time of recording, an additional recording fee of $20.00, as required by law, will be charged. Preliminary Change in Ownership forms, instructions on how to complete them, and a nonexclusive list of documents that are affected by this change, are available from the County Recorder's Office or the Office of the County Assessor. 3. GOOD FUNDS LAW Under Section of the california Insurance Code, North American ntle Company, Inc. may only make funds available for disbursement in accordance with the following rules: Same day availability. Disbursement on the date of deposit is allowed only when funds are deposited to North American ntle Company, Inc. by Cash or Electronic Transfer (Wire). cash will be accepted only under spedal circumstances and upon approval by management. Next business day availability. If funds are deposited to North American Title Company, Inc. by cashier's checks, certified checks or teller's checks, disbursement may be on the next business day following deposit. A "teller's check" is one drawn by an insured financial Institution against another insured financial institution (e.g., a savings and loan funding with a check drawn against a FDIC insured bank). Second business day availability. If the deposit is made by checks other than those described in paragraphs 1 and 2 above, disbursement may occur on the day when funds must be made available to depositors under Federal Reserve Regulation Cc. In most cases, these checks will be available on the second business day following deposit. (For further details, consult California Insurance Code Section 12413, et seq. and Regulation CC). These are the minimum periods before funds will be made available. North American Title Company, Inc. is not obligated to disburse funds at the expiration of the time periods above, and expressly reserves the right to require additional time before disbursing on deposited funds. Close of escrow and final disbursement will not be made based on deposits in the form of personal checks, corporate checks, credit union checks, money market checks, travelers checks and official checks until confirmation of final clearance of the funds. Page 9 Rev. NAT 8/2.0/13 Order No

231 North American Title Company will not be responsible for accruals of interest or other charges resulting from compliance with the disbursement restrictions imposed by state law. For Your Information, Our Wire Instructions Are: Wire To: Comerica Bank 2321 Rosecrans Ave, Ste 5000 EI Segundo, CA Credit die Account of: North American Title Company, Inc. Bank Account No.: ABA No.: Escrow No ACH FUNDS - Automatic Clearing House North American Title Company, Inc. will not accept funds in the form of ACH transfers. Be sure to reference our order number Should this office be required to wire funds out at close of escrow, please be informed that wiring instructions should be received as soon as possible, but no later than the following times. Wires outside the State of California: 11:00 A.M. ON DATE OF WIRE Wires within the State of California: 12:00 P.M. ON DATE OF WIRE Effective January 1, 1991 A service charge of $25.00 will be assessed for all funds disbursed by this Company by wire. 4. North American Title Company, Inco's charges for recording the transaction documents include charges for services petformed by North American Title Company, Inc., in addition to an estimate of payments to be made to governmental agencies. 5. The map attached, if any, mayor may not be a survey of the land depicted hereon. North American Title Company expressly disclaims any liability for loss or damage which may result from reliance on this map except to the extent coverage for such loss or damage is expressly provided by the terms and provisions of the title insurance policy, if any, to which this map is attached. Page 10 Rev. NAT 8/2.0/13 Order No

232 NORTH AMERICAN TI11.E COMPANY 2240 Douglas Boulevard, Suite 120, Roseville, CA (916) Fax: (916) Closing Protection Letters can be ordered directly by ing with your titte order number and property address. Attention: Your Ref: Our Order No.: Dated as of August 28, 2014 AT 7:30 A.M. LENDERS SUPPLEMENTAL REPORT TItle Officer: Julie Grace The above numbered report (including any supplements or amendments thereto) is hereby modified and/or supplemented in order to reflect the following additional items relating to the issuance of an American Land Title Association loan form policy of Title Insurance: Our ALTA Loan Policy, when issued, will contain Endorsement Nos. 100 and 116. There is located on said land a Vacant Land Known as: APN: and , Vineyard Creek Unit 2A, APN: , North Vineyard Greens Unit 1 alyol County of Sacramento State of California. According to the public records, there has been no conveyance of the land within a period of twenty-four months prior to the date of this report, except as follows: A document recorded December 6, 2013 as Book , Page 0388 of Offidal Records. From: To: Family Real Property Umited Partnership, a California limited partnership Lennar Homes of California, Inc., a California corporation Affects Tract Three. A document recorded August 25, 2014 as Book , Page 1018 of Offida] Records. From: To: U.s. Home Corporation, Inc. A Delaware Corporation Lennar Homes of California, Inc, a California Corporation Affects A portion of Tract Two. Page 11 Rev. NAT 8/20/13 Order No

233 A document recorded August 25, 2014 as Book , Page 1019 of Official Records. From: To: u.s. Home Corporation, Inc. A Delaware Corporation Lennar Homes of California, Inc, a California corporation Affects Tract One. Page 12 Rev. NAT 8/20/13 Order No

234 Rev. 03/2014 FACTS Why? WHAT DOES NORTH AMERICAN TITLE GROUP, INC. FAMILY OF COMPANIES DO WITH YOUR PERSONAL INFORMATION? Financial companies choose how they share your personal information. Federal law gives ronsumers the right to limit some, but not all, sharing. Federal law also requires us to tell you how we rolled, share, and protect your personal information. Please read this notice carefully to understand what we do, The types of personal information we collect and share depend on the product or service you have with us. This information can indude: Social Security number and income transaction history and payment history purchase history and account balances When you are no /ongerour customer, we continue to share your information as described in this notice. How? All financial rompanies need to share customers' personal infonnation to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal Informationi tile reasons North American litle Group, Inc. Family of Companies ("NATG") choose to share; and whether you can limit this sharing. Reasons we can share your personal Information Does NATG share? Can you limit this sharing? For our everyday business purposes- Yes No such as to process your transactions, maintain your a((;ount(s), respond to routt orders and legal investigations, or report to credit bureaus For our marketing purposes- Yes No to offer our products and services to you For joint marketing with other financial No We don't share companies For our affiliates' everyday business purposes- Yes No information about your transactions and experiences For our affiliates' everyday business purposes- No We don't share information about your creditworthiness For our affiliates to market to you No We don't share For non affiliates to market to you No We don't share Questions? call 1 (888) , extension 6585 Page 13 Rev. NAT 8/2.0/13 Order No

235 The North American Title Group, Inc. Family of Companies (Identified below), such as home owners insurance What we do How does NATG protect my personal information? How does NATG collect my pemonal information? Why can't I limit all sharing? To protect your personal infonnation from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We collect your personal information, for example, when you apply for financing or provide employment information provide account information or show your government issued ID give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates or other companies. Federal law gives you the right to limit only sharing for affiliates' everyday business purposes-information about your creditworthiness affiliates from using your information to market to you sharing for nonaffiliates to market to you Definitions Affiliates Nonaffiliates Joint marketing Companies related by common ownership or control. They can be financial and nonfinancial companies. Our affiliates indude the companies listed below. Companies not related by common ownership or control. They can be financial and nonfinandal companies. Nonaffiliates we share with can indude collection agencies, IT service providers, companies that perform marketing selvices on our or their own behalf, consumer reporting agendes, and others. M4 TG does not share with nonaffiliales so they can market to you. A formal agreement between nonaffiliated financial companies that together market finandal products or services to you. NATG doesntjoint/y market Our Affiliates. The North American Title Group, Inc. Family of Companies is: North American Title Company North American Title Insurance Company North American Title Alliance, LLC North American TItle Florida Alliance, LLC North American Services, LLC North American Title Agency North American Abstract Agency NA55A, LLC North American Title, LLC North American Advantage Insurance SelVices, LLC North American National Title Solutions, LLC North American Exchange Company Rev. NAT 8/20/13 Page 14 Order No

236 ExhlbltA {O6-O3-ll} ara STAltDARD COVERAGE POlICY _1ggo EXCLUSIONS FROM COVERAGE n.. follow~ ""'-.. ~ ~pre«1y =lode<! from!he oowrage of this poiky iiiiil IN Company wiu r.ot Pi'y lass; or ~ co<is, 2IIInrn/!ys' r""" or expe!i5els which arise bot _do 1. (a) Ar>{ Iilw, ordinana. or!pi""""",,"'i regulation (indudi"ll W rrt limite<! to WdOo\j or zonin!< Iawi, orditlili1cl5, 0.-r~) re5triding, reguiillilg, prohibll:if1jj or relating (i) thu OCWPilO'Y,... or en~ of!he land; (il!he <:haracter, dimensions IX location r:l any ~!low or ~ ~rected on the land; roil a separation in ~ip or. change in!he dim<mions or area of!he land or My paroo! of which!he land i. or-.; a part; or";;".,=_ enwonmentai protooim, or ti1iil11fect of any YioIotioo of tt...1aws, ",dir>ance< or li""emmentai ~li'itions, except 1D!he extent thit. noiio:e of the.. lfuo<e>'.. ot Iflereof or. """"'" of. d.fud,. lim, Q( enrumbraroce resulting from a violation or a~"!i9il violation ~!he loond h;ts b=1 rr=rded in!he ~ tectjrds at Dae of (b) /Jnt..,...nmentaI police JIOW"I'" not """uded by [a) abo e, =f!pt to!he _ that ~ _ of the ""ercise th..-eof or nooce of a defed:, I... OOOJmbranr:e ""'" resur~ from a violation or alleged vdation affecting th. land hao been re<ordoo in the ptt,lic tecct'ds at Dam '" PoI:y. 2. R9f'*s of eminent domain..,less notice of tho> """"'... thol«lf hit!; booen ~ded in!he fdjiic r=otds.t Date of Poky, but not exdudi"ll from C"""'""9O' any toki1g ""i<:h ha. ooourtd prior to o.te of Policy whi<:h would be binding on the rights rj " purchaser Kc- value without,",owledge. 3. Defects, i... """"""'raro:e>. ;odve5e dairn5 or ot/w matters: (~) wh~ or net recorderl in the public ~. at Date of Polir;y, 1M Ol!i>ted, ~, ~ or ag~ to bot Itu. insured clalmant; (b) not known to!hi ~ny, not rarorded in the public rr<ijfd5 "'- Date of Policy, biit knowil to the insured claimant and not ~ in writing to tt... Camp;lny by tt... in,.,1l!d dairnant J>ri<r to the <J;ot., the inm-e:i dairmnt ~,., in... ed uooer this policy; (e) re<tjling in M Joss or <J.mage to the ~ dainuot; (cl) ott.ching CO" created subsequent to Date rl Poky; or (e) resl.bl!l in w or dama,.. which would not """" been sustained ;r the insured claimant had paid value far the insull!d ~ orforthe.state or:merest OlSUIl!d bythi.poucy. 4. Unrnfo:<=bi!ity of the lien d the in...-ed mortg'9' OOoau"" of the mility or fa..., of the in<ure:i ~ o..t.o. of Policy, or the imbliity or folbe of OIlY,.,b5aqUfflt _ of the mebtedness, to oomply with the appkable doill!l law. of the _ Ol whidl the bond is.n..tm. 5. Inv~lidity or unenforr.eability d the 100 of the insured mortg"ljlo, or dairn ~, which an"'" rut of the ~ ~ by the in=ed ~ and is ba>ed upon usury or any "'''Will''' Cf.clit ~ ex-!ruth in Iend.,g law. 6. lvrf daim, whid!.,-;..,. out of the tra.-..ac:tioo ~II!I Ol the Uistnd the estate dilltftelt i1sured by thi!; >"llicy or the tr.in!ation <luting the irm=t d the OlSUfM Ierrlor, by ~ of the opera~on of federal bankruptcy, 5tote insoivenoy oroim~.r """lttor~ right< low<. EXCEPTIONS FROM COVERAGE - SOIEDULE II, PART I This poflcy does not in!;un;o agoillst ".. or damage (and thoo ComP""y will not pay mm, &W1Ileys' fees or expenses) which """" by reason of: 1. Ta_ or asoessmoot. which are not shown... existing liens by the """"". of any taxing authority that le...-ies tax.., or,elb "" real pmperty or by the po.&,"""," P,-,;uedings by a public"!,loll'lcy ~ may result i1 taxes or assessmerrt>, or notice!; of oudl proceedi"9",,yho:ther a" not <hown by the!'ec;()f{js rl SU<:t! "!JOOCY or by the public rocoo!s. 2. Any facts, r\jjhto, Olteres!o, or daim. whidl are not """'""' by the p<tjiic records but...mch could be ascertained by a" inspoction of the lard or V<Ilic:h ma~ be ~ by ponons i1 possessiort thereof Easements, ~ or~, or claims thereof, not shown by tt... public re<ord. Dis:crep""'"", coohm in b<>jndary limo, short1!ge in area, enaoacljonqnt., or ""'" other fact!; which.. OOIT~ """"Y would disclose, and..mid, we not shown by the 5. public records. (a) Unpatenmd mirolnll claim.; (b)~. or ""ceptions in palert< or in Acts liuthooiling the issuance theroof; (e) _,;got., claims or tille to water, not the ~e.cept<d li:lder (a), (b) or (e) are shown by the public records. 6. My Iio!n 0..- rightto ~ ~ for service'l, labor or material not shown bot the pubk moorcj.. atajaltahoneowner'spolicyoftineinsliran(e(oz..03-ldj EXCLUSIONS In addildn to the Exceptions i1 S<hedule e, You..-e not in5ured ~ m., CO<!s, aii"""'j's' fees, arod ""P'f'9"S resulting from: 1. Govemmental police power, <II1Il thq existence 0..- vio/&ldn rl thooe p<liiioro; of""i' law or I»WlI"nmMI regulation concemlng: a. building; b. zaring; Co larod ""'"; d. improvements on the Land; e. lam division.rod f. emironm~~. This: E><dusion does not ~mitthe ~d.,.".iber::i in Covered Risk B.a., 14, 1~, 16, 18, 19,20, The fail"", of Your exioting structur=, or ~ part of them, to "" c.onstructed in accord,""" with a~e buildo,g 0><Ies. This ExtJu<lon d""" """' limit the ",,",rage describojd in Cowred ruok TJ.., rijlt In take the lard by oomelmiio it. Th;. he"'""" d""" not Io'!m: th~ """"""'" describe:l in Covered RIsk Risko: a. that are """ted, allowed, or agreffi to by You, ~ 0..- not they are recorded in the Public Record.; b_!hat ~~ Known to You at the Policy Date, but not to Us,...,1e>5 thoy are ~ in t"" Ptb\: Rt<:nrds at the Policy o..te; e. that r=~ in M 0010 You; 0..- d. that f...t occur after tile ~ D.>t<! -!his oo.s oct limit the covei""!le described i1 Covered lin< 7, 8.e., 25, 26, 27 or faiue to pay ",Iue far Your Title. 6.. lock of a rijht: to;on~ "nd out.id~ the.rea.pecinc:a~y described ""d retorred to in por.>gr;oph 3 of ~ A; and b. in.tfeet<, aile\", or waterways that toudl the land. This ~ does nat r"",l the ~ descllbed incov... ed rusk 11 or 2l. 7. The transfer of the TlIe to You;' mud as a prefe.-entioi tr"n""" 0..- a. a fraudulent transfer 0..- """""l'aoce urd... fed... ai bankruptcy, ~tli in~, Dr simoi.r crrditnrs' rights laws. UMITATIONS ON COVERED RtslCS Your inwr.once far the fubj1ng Covered Risk.<! is Irnited 00 lhe 1JwooI'. Coverage Stateml!flt ~. fuiiow5: I For C~ Risk 16, 18, 19, and 11 Yo... DflductibIe AmoI.I1t and o.rr Maximum DoI.r Limit d ~ty show" in Sd>edul~ A. The doductrblo """"",Is and rm><imum do~ar ~mits shown on Schedule A are... fullo.,." '(w= CIcr!oortibio: Amp!!ot Covered Risk 16: Covered Rj.k 18: Covet~ RisK 19: ~Rld11: 1% dl'olicy AmountSOOoom in SdJeduIeA 0..- $2,500 (1'III1ktJov.,-;. less) 1% of Policy Ama.lnt Shown in SdurlJle A or $5,000 (wilrl>ever is less) 1% oil'o1icy Amount Shown in Schedule A or $5,000 (whichever i.li=) 1% oil'o1icy Amount Shown in Schedule A or $2,500 (wildlev",. is less) Our MlIxi!!V!J OoIbr Ljm~ of Lljbj!jty $10,000 $10,000 $25,000 $5,000 Rev. NAT 8{20/13 Page 15 Order No

237 ...,~ AlTA RESIDENTTAl TT1lE INSU/bIifCE Pt:1UCY (6-1-{17) ""'~~ In addition to the Exwption. i1 S<hed..., B, 1"'".re nat insured ~nst loss, oosili, altomt\'il' feel, 100 e.q>etlsl$ ~ fro",: 1. ~ police po;wr, and!he exi>tmoo co- YiDIation of.ry 10.. Of ~ "'I1LJ1ation. This i"ldudes building and lofling oroin.,..,.. and.iso,"ws.nd f'<'!gjiirtiom ooncemng: imp~ on the land Iiond diw.-.,., awiror1rnootal proh;<tion ru. ""duoion doe5 nat apply to violations or the mforoornerlt of u.e... matton "'"k" "PI"""" in the pubic,~. at Policy Date. 1hi!I exclusion does nat limit the Z<rlin!I 0>Yl!Ii0!I<' di5oij..:l in 1_ 12 ~nd 13 of Covered Title ru,ks. 2. The rigl1t to take the Iond by comemnlng t, """"": * a notice of ej(efd;ing I"" right appear!l i1 the p"'* m<xlids * on the Policy 0iJt<, * the taking ~ prot- to the PtJiicy Dam Md is bindinq on you If you bwuht the IM<I without knowing of the takirog 3. TOle Risks: that are created. aiowed, co- OQrood to by you * that"", known to you, but!lilt to "",on the Policy ~- uroir<sthq"appeamd in the ~re<h,", * that... ~ in no loss to you * that first affect )'OlJ"titje. Iter the PoI!q Date - this does nn!: Wmitlilllliibor.oo materii>l ~ c""""'9" in Item 8 of Covered Title Rlsh; 4. failure to pay v.l... fa'- your w". 5. lkk of. right: to ally!lind oubide the ""'" <fl"lcifir>l!ly de<aih..:l and rnfermd to in Item 3 cf Sdledule A 00 in :<I:...ts, ad.ys, or Wf'h>.rways!hat to<dj YWI" Iiooo Thi!; exckjoion croe. root limit the ~ ~age in nem 5 of Cove,ed lliie Risks. 2006ALTA loan POlICY ( ) EXClUSIONS FROM COVERAGE The loiiowing matl<!rs are expressty ""du;i<o:l from the ~ nf thr; policy, awl t~ Company will not pay loss or domoge, cost>, aitomeys' me., or e"".. ",... that arise by r&ooil of: 1. (aj Iwt Ia.., otdin>,..,.., pe"",le, or ~I "'9-I1aOOn [..-.:lulling i;ijooe ~ to buildi1g Mdzmng) restrictlng, "-fating, prohililirog, Of relating 10 (i) the OCCIJpn:y, use, Of ~t of the Land; ["1 the <:IJar.idef, dimi!n>ion., co- io<din of "'rf irnp""..,.."..-,t erected ott the Land; [Iii) the subdivision of Iiond; co- 0..-),.,.,;ronmental protection; or the.jfud: of MY W>Mtion d these lam, Ofdi~ or ~I r"!jur.tq,s. This BcdJ<irn 1(.) does not modify or Iimt the cov'""'l[e [>ro"ided md.,- eow.-ed Risk ~. (b) ~ goyemmentai ~ ~. Th. ExWsion 1(b) does not modify or I'rnl th~ ~ provided under Covered Risk 6-2. Rights of OOIinent cxmain. Th;' Bcdusioo dooo; rp: modify or ~w the """""'9" provided!ildar Cavered Risk 7 co Detects, liens, eoctmbrances, adv.-.e dairro;. or <ti-..- matter.; (0) created, suffered, ""'""""", Of ogreed to by the Insured a.im;mt; (b) not i<rictml to the Cnmpany, not I"fIC.M!ed i1 the Public Record. at Date of Pdq, III Known In the Insured Claimant and not dsdoood in writinq to the Company by IhIo m.urtd Oaimant prio.- to the date the Insured Claimant bocama an Insured undor this pal",,; (el!"e5i.jitir'lf i1 no ros. or da""'!l'l to the 1rlSUf"ed Claimant; (d) attaching or <"",ted..,b<equflnt to Date d Policy (howeva-, thi!; does not mod"ify or limit It-.e t<m'1arl" pmvido'xl L.nda- Covered Risk 11, 13, Of 14); or (e)... rw-.. in loss or damage that would not haw been "".mined if the I~ Claimant hiod paid ".rue for the Insured MorlQage. ~. Un""""c:e.'Ibility or the.lien of the I"",red Mortg;oge be:at= d the iriability or failure d an Insumd to cornpiv with.p~br.. doing-bu5ines, ra... of the state where the land ;, oltuated. 5. Invalidity or unellorceability in whole or irl part of the r;." of the I"""""" Mortgage that.rt;es ott rf the transaction evidenced by the I,..,..-ec! Mortg'9' am is 00...:1 upon U!iUry or ony C<JrIOUIIler <red~ ~ or truth in-lendinq law. 6. Any claim, by reason d the 't'aration of fedor.ol bankruptcy, ""'-te ~, 0' simi,", cred~ors' rigllts I... that the tr~"'i"ction """ttog tt-.e rl<f1 d lhe Insured Mortg;oge, io (a) ofraudulent~anceorf~banst...-,or (b) 0 ~~I tr~ for MY "'"""" not stated i1 CcNeroo Risk 13{b) ofthi. poky. 7. Iwt 11m ott the TItle for real estate taxes or a=sments irnpos<o:l by ~I ~uthority and creatbd Of attadlirlg between Date of Policy ~nd lhe d,m, of r"""'"<iing of the Ir.mred i'iori!lage in the Public Records. This Exclusion does not modify or... the aweflo!i'o ~ed uooer eov..-ed ru.k l1(b). The """"" policy form may be isouod to afford eithe, stmdard Cove",!!" co- Extended Co lragio. In addition to the above BcclJmns from C<Nemge, the Bcooption. ITOOI Coverage :., a S\iilI1dartl Cnv.rage polley will also :ncludil the following Exception. korn ~: EXCEPTIOMl FROM COVERAGE This po'cy doe!; oot insure ag.in.., ros. or damage (m the COOlpany win oot pay costs, attorr.yo' fee!; or ~J that arise by reason d: 1. (0) T= or _~ that ore oot shown.s existing,en. by the.-..mrck of any b"ing authorlty that levies bxes or... smerts on lui propmy co- by the PLJb!i<: Rer::ordo!; (b) pnx:eedingo by a pub!lc agero::y thot rmy =uit in ~"" or."""",ments, or _ d well Dl"0C2edi1gs. wilether or not ohown by It-.e ~ of SlJch agency or by the Publk Rocort;k. 2. My facts, ri<jlts. inwre5ts, or doi"," that iif~ oot shown by the Public: Records but that oould be aocertained by an iffipectiort d the IN!d or that may be asserted by..."... in ~ of the land. 3. E-. I"". or encumbrance!!, Of claim. thereof, not ohown bot the ~i<: R=rds. 4. Iwt e~ MCUmi::,ance, vioiatlro,..-..,iatiort, or adverse drw;miti\nce oifucting the Ule thii: """,lei be dioclooed by an ac<:i.!ffite ond complete Iiond SlJrver of the l.-.:l am not shown by the Public Ra::ords. 5. (a) Unpatmted mjning doi"",; (b) ",..ry<jtior-"o or ""t'fll:""''' in patents or i1 h:ts authorizing Ihu """on", thereof; (e) water r;g1b, claims ot title to ",at..-, whether Of oot the motter>- cqrted cnder (0), (b), ot (e) are shown by the PWlk Records. 6. Niy lien or right to a ~"" for ~ Iilbor or materioll not shov.n by the public: ""-""""'. 2006ALTA OWMfR'S POlICY (fjii ) EXa.U.SIONS FROM COVERAGE Tho folkming m;itter>; _ expressly exduded from the """"raga of thi. policy, ;and the eon-.>my wil 001; p"y Io<s or da""'!le, coots, attorneys' fees, or expenses that arise by "",son of: 1. (a) My law, ordinance, pernit, or~ regulatiort (inclooi"9those relatin~to buildin\l and zoning) ~.-.gulating, prohibting, or rnting to (ij tho or;cup;oncy, use, or enjoymmt of the Land; (n) the ch..-acter. dimen!;"rlo, or Ioc;otion of any i""""""",ent <'I"tded on the land; (Ii) the 5Ubdivision of Iilnd; or (iv) erwironmental protection; or tho Effect of""y violation d these laws, ordinances, or!io""<rl!rloi"ital rejjulatiort. Thio Bcdu!;ion 1(0) not modify ot hmit th" coverage provided li:ld~ Covered Risk 5. (b) Any 9"""nmental police p<l"m!r. TIl;' Bcdu,.",., 1(bJ does ncl: Il"ICldify or ~mit the coverage pr<l"l'ided..-.jer Covered Risk 6. Page 16 Rev. NAT 8/20/13 Order No

238 2. Rights '* eminent domain. ThT. B<dusion does not modify em" ~mit the COVIlrn!le provided "nd... Covemd Rjok 7, Dofect>, lien!;, o"o.urb"r"ic<5, ~dv= d.im.,,.. ~ ~ (a) created,... ffer«!,... u"ed,,.. ~ to by the In.ured Claimant; (b) not Known In the Company, net recorded in the PubrlC Record. at Date '* Policy, but Known to the IOOlI"oo daimant;nl not <ioclosli!d in WftinQ to the CompIlny by the I""""" ClaTmant prior In tt... date the In... "'" Cll.Trnant became an In...-ed undo!"!his policy; (e) re<ulmg in no """ or damage In the In... ed (I<ITmant; (d) attlld'ing Of <mated su~ui!tlt to Date '* Polky (tk>wever, this doe!; not modify <>r limit the """"_ l'fl'i'idoo uoo«uw~red Rid<. 9 and 10); or (e) ~., bs!;;,.. darn;oge that would rl<t have boon SI.IStilined f the In... red Claimant h<jd paid v"lu~ fur the nko. 4. As.f du1l, by,.,.""" d'1il!. operation of fede,ai biinkruptcy, state mo!vmcy, or.imllar creditors' rights 1<1""" that the transactlon vesting the TItle as ""-' in ~..., A, i< (al a rraudulerlt <XlIIVE!\Illnre,.. frnudulent trltnsfer; Of" (b) a prnferenl:ial transfolr fur any reasm not stated in Cov<!red Rjok 9 '* thi< policy. 5. krf lien "" the ale for real estate taxes em"... rrjelii!s im~ by Q(M",,,,...,,taI authority.nd created or i>tti>chir"l between Date '* Policy...0 the dow d liiwoding of the <I=J or oiher in5trument cltr.>n<f... in the Public Recnrds that vests lltle "" mown in ScheduI!! A. Tha <IIbove pdicy form mol' be iosued to <J!fO<d 5"", Standard ~ Of Extended GJo.terage. In additioo to the above E>:dusi<:f1. lrom cn.tem!!", the E.r;eptj:Ins. from Covw;,ge in Sbnd.,d ~ policy wii.r.., ircljde the fui~ E>:O!ptions (rom CoIm"age: EXCEPUOIti FROM COVERAGE This policy doe;;!1gi: mu~ "'90;"0(: Ios:s or '"''''''9''- {ijiid the Cnmpony.,.;M rot p"", rnols, attorneys' lee. or """""",,,,1 that orise by """,011 cl: 1. (a) T;,xes; or _ thai; are not.djown e:ci!;ting...,. by t/-.., r=>rd. of ony taxing.ttmrtty thatbies ~""" or 'ssessmmts M "",I property or by the PtbUe Records; (b) proceeding< by public "!I"I"-Y!h>t may result in taxes or """"'o;rnerts, or notire; of!iudl proc.eedings, whether or not 'L sikwm by thi! rea>rd. of sud1 ;;ogm<y 0.- by the Pubk ~~. Arrf facts, rights, hlere<ts,,.. claims that are not.hown in the Public Record!; but that could be ascertained by '"' inspection cl the Land,.. thot ITJily be...-ted by J*'SOIIS in possession of the Land. 3. EMements, lien< or encumbrances,,.. da... thereof, not shown by the Public Remrds. 4. As.f..,<roadJment, encumbrance, violotion, y<wi<tton, or ;ody"lsol cimj"""""'".ffecting the Tille thot W!X.lid be di<l:lo5e:l by IlflIICOII"lIte am ~e land survey clthe Land ;ni that ~'" not """"n by the Public Re;<>rds. ~. (a) Ulpal:flnted mining clai"",,; (b) reservations,.. e><rep!ioos in paterits,.. i1 Acts aulhorizin!l the iss",,,,,,,,!hereof; (e) wat...- r\gilts, dai"""..- tit1e to water,...u..r,.. not the matws ~ l.nder (a), (b), or (e) are shown by the Public Rerords. 6. Arrf lien Of" JiQht to a lion fur services, labor,..li1i1teri;ji not sho.." by Ill!. J>UbIi<: =orm. ALTA EXPANDED COIlER.tGE RESIDEII17AllOAll POllCY (07-M-10J EXCLIJSlONS FRO" COVERAGE n,., foi!cwtn!j tmtt.ni; are ""1""""1)1 e><duded from the coverage of thi~ policy.nd the CompalY"...;1 not pay Ioos or damaqe, costs, attorneys' fees,.. expm_ whim an... by rea..", of: 1. (a) Arrf law, CIRinaflce, II'lIJ1lit,..- governmental regulation (indudiiq toose relating Il:> building.nd ZOI"ling) re<tricl;i1g, t<guiaiing, prohibiting, or relatr.\! to (i) the <>=JP'IflC\', use, or "'*""ment '* the Land; (ii) the~, dimensions, or location '*.ny itt1pr<om"nent erected on the l...o; (ii)!he subdiyisionofland;or (Iv) envirmmerltol protection;..- the ~ cl any violation cl these Iaw!;, ordinallcljs, or governmental "'!lul.lions. Th.. ExdJslon l(a) does net mocflfy or liml the!xlvei<i!1" f"""ided ur-.d.t- Covered Risk S, 6, 13{c), 13(d), 14., (b) Anygov~taI pclb, power. Thi< E:<cllii<:f11(b) """'" not modi!)' or Iim~thecov... age provided under Covered Ris~5, 6, l3(c), 13(d), 14 or ". 2. Rq:>ts of eminent do:rnain. This E:<cIusion doo< not modify or I1mit the COYeraQe l'fl'i'ided ll1der Covered Risk 7 Of a. 3. Do!floct5, Iim>, er<:'-'llbr;,oce,;, ~ datrns,.,.. other malt~ (~J <ruled, suffered,~,.,.. og"",d to by tt...insured dltimanl:; (b) not Known to!he Comp.1lIy, not """"dad in the Publl< Rer.ord. >JI: Date cl Policy, blll: Kmwn to the m.ur.d Claimant.00 not docklsed in writi1g to the U>mp;Jny by IIl!.I".,n,d 0aimM0t prior to the date the Insured dilirnant became an IMlJreci lj"1der this policy; «) resultiflg in no '-or damageldlhe I_red 0airrenI; (d) attaching or Cl"eMed subsequent to Date '* Policy (however, this doo; not modify,.. fmit the coveriiga proyided COlder Covtred Risk 11, 16, 17, 18,19,20,21,21,23,24,27 or 28);,.. (e) resulting i"lloss or damage that ~ not h""" been sustained ~ the Irniured Claimant had paid val"a fur the In... red ~. 4. ~bility cl tho I"" of the ~ M~ h=>u"" of the in;,b;iity or f2ti1ure of an Insured In t:<:o"ilpiy wtti1 applicable doing-bwine5s I<Iws of th~.tate wne... thoo Land is.ituilted. S. Invalidity,.. unerkn:eability in whole,.. in J>art of the lien of lho, Insu=J M~e tmt _ rut of u.. transact;,.., evidenced by tho Insured Mortga~ and i< based upon lis,""",.. any con...""" credit proolction or ttuth-i"l-lending law. ll"is Bcd... ion doeo not modify or limit lhoo """""'go provided in Covered Risk Any <!aim cl invalidity, unenf~iuty or lad< of priority oflll!. lien of the lnsure:l Mortfjage "" In M,."""".,.. mcxhfocations made af'mr the Inru"ed has Knowledge that the _.row.. i"l Sdledulo. A ;. no itr.ger Ill!..,..,...- of lhio estate or interest ~ by thi< policy. Thi'I Exdu<ion does not modify or Ilmit the coverage prowled in C<wered Risk My lim on the Tltle fco" "",1_ taxe.,.. assessments inposed by governmental outhorrty and created or attadlill!l... ~ to Dat\! of PoU"!. This Elcdusion does not modify or Imit the mverage provided ill Covered Risk ll(b), a. The fa~u", of the residenl:iill stru::tur., or ony porton cl it, to hov<i been construct~ before, <Xl or o..te of PoI'cy "' ~"'" with.ppf1cable buildillq co:ies.. This Exdusi<:f1 does not modfy or limit tila """""~ pm>'ided i"l ~ Ri<k 5 or krf claim, by ""'SOh cl the operatioo of federal biin~, state insoiven,,!, or sim~'" creditors' rijlts laws, Ihat the trltnsacti<xl <"",ling the lion cl tho Insured Mortga!:l". i< (a) a frnudukmt C<Jllveyance..- fraudulent tr.msf...,,.. (b) a preferential tramj", fur any reas:on fklt stated ill Cover«! Risk 27(bJ cl thi!; policy. Page 17 Rev. NAT 8/20/13 Order No

239 ~ I qj ci ~, W ~ ~ ~ ~ <I f.i '" ~, ~ 7 Q ~ ---~ ::: 1 I I I,, I, ~ " ~ " ~! ;;, ~ u Rev. NAT 8/20/13 Page 18 Order No

240 POR. S. W. 1/4 SEC 5, & S.. 1/4 SEC 5, T.7N., R.6., M.D.B, &: --'- I ~ -"'-"!~<-;;r~. - --"-: ~_~_./~w~. - ~ ~ - om!i r ' ~:.'<l Ir- - - ~ -'{ ~ fi,2hn ", I I!.(7) -- A 0 )0...- = =~ 1!1;1: = ~ = <0.,,/1f1Jl IU,U I, ~ It... ~ 1. _ _--' - - \. ~-~'!'"-~!<f.j'! '!' -.. J _...,._' ~ tfft~!:l _ ~ _!<1~~! t_ ~ ~ "" _~, :...,. North \!jmjord G,-een", Unit I, Lorg e La! Map, ~.M, 8i<.. 'S5. P Ol.2(oz- ~7-2oo ') 17tM ,... J7\ ~ ' '-'' tj.nhl 1 "'",sesaor's Mop 8i:. 066 Pg. 021 Cou.-,ty of Socrom en lo, Collf. -- -!" ~--- I. I. ~ ~ ~ gl ~ ~ ~, ~ ~ " ~ ~,- 1!I I. ' ''' ~,@" '-.~. ".. '._... I -- ~ t a..

241 C DEVELOPMENT COSTS

242

243

244

245

246 D ESTIMATED LIST OF FACILITIES, TIMING AND USE OF FUNDS (BOND PROCEEDS)

247 Combined Estimated list of Facilities, Timing and Use of Funds County of Sacramento, (FD No (North Vineyard Station No.1) and CFD No , (No. Vineyard Station No.2) Item Total Estimated Est. ClP Cost (1) ROADWAY & INTERSECTIONS 1. Waterman Rd: Gerber Rd. to cere 2. Waterman Rd; Gerber Rd. to cere - FRONTAGE 3. Waterman Rd. at Gerber Rd. Intersection (ROWand Construction) 4. Waterman Rd. at Gerber Crossing - Box Culverts 5. Bradshaw Road at Collector 11 (Alder Creek) 6. Bradshaw Road at Collector 9 (Ballinger) 7. Florin at Hedge Intersection (ROWand Construct ion) 8. Florin Road - Shoulder WIdening 9. Florin Road - Conspan Bridge at Elder Creek 10. Flo rin Road - Frontage 11. Waterman Rd: CeTe to East Boundary of VC 12. Waterman Rd: ecleto East Boundary ofvc - FRONTAGE 13. Waterman Rd: East Boundary of vc to Florin Rd. 14. Waterman Rd. at Florio Road ~ Intersect ion (ROW) TOTAL ROADWAY R4.4 R.3.2 R3.12 R3.3 R7.3.2 R7.3.2 R7.3.2 R $318,000 $427,000 $1,990,000 $1,240,000 $1,413,000 $1,199,938 $627,000 $734,000 $17,288,938 $8,935,000 POTABLE WATER SYSTEM 1. Waterman Road TOTAL POTABLE WATER PARK, LANDSCAPE AND TRAIL IMPROVEMENTS 1. Park TOTAL PARK SOFT (1) Al l Values Per ap, PFFP and fu Proa:rams (Rounded). Actual Ccnstruetion Coru,re Higher

248 E GLOSSARY OF TERMS

249 GLOSSARY OF TERMS Unless otherwise noted, the following definitions are from The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015). Aggregate of Retail Values: The sum of the separate and distinct market value opinions for each of the units in a condominium, subdivision development, or portfolio of properties, as of the date of valuation. The aggregate of retail values does not represent the value of all the units as though sold together in a single transaction; it is simply the total of the individual market value conclusions. As Is Market Value: The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date. Band of Investment: A technique in which the capitalization rates attributable to components of an investment are weighted and combined to derive a weighted-average rate attributable to the total investment. Bulk Value: The value of multiple units, subdivided plots, or properties in a portfolio as though sold together in a single transaction. Comparative-Unit Method: A method used to derive a cost estimate in terms of dollars per unit of area or volume based on known costs of similar structures that are adjusted for time and physical differences; usually applied to total building area. Cost Approach: A set of procedures through which a value indication is derived for the fee simple estate by estimating the current cost to construct a reproduction of (or replacement for) the existing structure, including an entrepreneurial incentive or profit; deducting depreciation from the total cost; and adding the estimated land value. Adjustments may then be made to the indicated value of the fee simple estate in the subject property to reflect the value of the property interest being appraised. Depreciation: In appraisal, a loss in property value from any cause; the difference between the cost of an improvement on the effective date of the appraisal and the market value of the improvement on the same date. Direct Capitalization: A method used to convert an estimate of a single year s income expectancy into an indication of value in one direct step, either by dividing the net income estimate by an appropriate capitalization rate or by multiplying the income estimate by an appropriate factor. Direct capitalization employs capitalization rates and multipliers extracted or developed from market data. Only one year s income is used. Yield and value changes are implied, but not explicitly identified. Discounted Cash Flow (DCF) Analysis: The procedure in which a discount rate is applied to a set of projected income streams and a reversion. The analyst specifies the quantity, variability, timing, and duration of the income streams and the quantity and timing of the reversion, and discounts each to its present value at a specified yield rate. Discount Rate: A rate of return on capital used to convert future payments or receipts into present value; usually considered to be a synonym for yield rate. Disposition Value: The most probable price that a specified interest in property should bring under the following conditions: 1) consummation of a sale within a specified time, which is shorter than the typical exposure time for such a property in that market; 2) the property is subjected to market conditions prevailing as of the date of valuation; 3) both the buyer and seller are acting prudently and knowledgeably; 4) the seller is under compulsion to sell; 5) the buyer

250 is typically motivated; 6) both parties are acting in what they consider to be their best interests; 7) an adequate marketing effort will be made during the exposure time; 8) payment will be made in cash in US dollars (or the local currency) or in terms of financial arrangements comparable thereto; 9) the price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Easement: The right to use another s land for a stated purpose. Exposure Time: The estimated length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. External Obsolescence: A type of depreciation; a diminution in value caused by negative external influences and generally incurable on the part of the owner, landlord, or tenant. The external influence may be either temporary or permanent. Extraction: A method of estimating land value in which the depreciated cost of the improvements on an improved property is calculated and deducted from the total sale price to arrive at an estimated sale price for the land. Extraordinary Assumption: An assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser s opinions or conclusions. Fair Market Value: The highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available. (California Code of Civil Procedure, Section (a)) Fee Simple Estate: Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. Floor Area Ratio (FAR): The relationship between the above-ground floor area of a building, as described by the zoning or building code, and the area of the plot on which it stands; in planning and zoning, often expressed as a decimal, e.g., a ratio of 2.0 indicates that the permissible floor area of a building is twice the total land area. Functional Obsolescence (Curable): An element of depreciation; a curable defect caused by a flaw in the structure, materials, or design, which can be practically and economically corrected. Functional Obsolescence (Incurable): An element of depreciation; a defect caused by a deficiency or superadequacy in the structure, materials, or design that cannot be practically or economically corrected as of the effective date of the appraisal. Highest and Best Use: The reasonably probable use of property that results in the highest value. The four criteria that the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. Hypothetical Condition: A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.

251 Income Capitalization Approach: Specific appraisal techniques applied to develop a value indication for a property based on its earning capability and calculated by the capitalization of property income. Leased Fee Interest: The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires. Leasehold Interest: The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease. Marketing Time: An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. Neighborhood: A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises. Obsolescence: One cause of depreciation; an impairment of desirability and usefulness caused by new inventions, changes in design, improved processes for production, or external factors that make a property less desirable and valuable for a continued use; may be either functional or external. Prospective Opinion of Value: A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that have not yet achieved sellout or a stabilized level of long-term occupancy. Quantity Survey Method: A cost-estimating method in which the quantity and quality of all materials used and all categories of labor required are estimated and unit cost figures are applied to arrive at a total cost estimate for labor and materials. Replacement Cost: The estimated cost to construct, at current prices as of a specified date, a substitute for a building or other improvements, using modern materials and current standards, design, and layout. Reproduction Cost: The estimated cost to construct, at current prices as of the effective date of the appraisal, an exact duplicate or replica of the building being appraised, using the same materials, construction standards, design, layout, and quality of workmanship and embodying all the deficiencies, superadequacies, and obsolescence of the subject building. Sales Comparison Approach: The process of deriving a value indication for the subject property by comparing sales of similar properties to the property being appraised, identifying appropriate units of comparison, and making adjustments to the sale prices (or unit prices, as appropriate) of the comparable properties based on relevant, market-derived elements of comparison. Site Coverage Ratio: The gross area of the building footprint divided by the site area. Stabilized Occupancy: 1. The occupancy of a property that would be expected at a particular point in time, considering its relative competitive strength and supply and demand conditions at the time, and presuming it is priced at market rent and has had reasonable market exposure. A property is at stabilized occupancy when it is capturing its appropriate share of market demand. 2. An expression of the average or typical occupancy that would be expected for a property over a specified projection period or over its economic life.

252 Subdivision Development Method: A method of estimating land value when subdividing and developing a parcel of land is the highest and best use of that land. When all direct and indirect costs and entrepreneurial incentive are deducted from an estimate of the anticipated gross sales price of the finished lots (or the completed improvements on those lots), the resultant net sales proceeds are then discounted to present value at a marketderived rate over the development and absorption period to indicate the value of the land. Superadequacy: An excess in the capacity or quality of a structure or structural component; determined by market standards. Unit-In-Place Method: A cost-estimating method in which total building cost is estimated by adding together the unit costs for the various building components as installed; also called the segregated cost method. Yield Capitalization: A method used to convert future benefits into present value by 1) discounting each future benefit at an appropriate yield rate, or 2) developing an overall rate that explicitly reflects the investment s income pattern, holding period, value change, and yield rate. Yield Rate: A rate of return on capital, usually expressed as a compound annual percentage rate. A yield rate considers all expected property benefits, including the proceeds from sale at the termination of the investment.

253 F QUALIFICATIONS OF APPRAISER(S)

254 Kevin K. Ziegenmeyer, MAI, Partner Introduction Professional Affiliations Education Appraisal and Real Estate Courses

255 Appraisal Experience

256 Sample of Appraisal Experience

257 Sample of Appraisal Experience (continued)

258 Sample of Appraisal Experience (continued)

259

260 Academic: Appraisal and Real Estate Courses:

261

262

263

264

265 Sara Gilbertson, Appraiser Introduction Ms. Gilbertson is a licensed appraiser with Seevers Jordan Ziegenmeyer, a real estate appraisal firm that engages in a wide variety of real estate valuation and consultation assignments. She joined the firm in April 2011 after completing her bachelor's degree at California State University, Sacramento and has been writing narrative appraisal reports for a variety of commercial properties. She is now involved in appraisal assignments covering office, retail, industrial, land and mixed-use properties, as well as special-use properties including self-storage facilities, hotels and mobile home parks. Ms. Gilbertson has developed the experience and background necessary to deal with complex assignments covering an array of property types. Professional Affiliations Certified General Real Estate Appraiser - State of California (No ) Education Academic: Bachelor of Science in Business Administration (Concentration in Real Estate and Land Development), California State University, Sacramento Appraisal Institute Courses: Basic Appraisal Principles Basic Appraisal Procedures Uniform Standards of Professional Appraisal Practice Real Estate Finance and Statistics and Valuation Modeling Sales Comparison Approach Report Writing and Case Studies Market Analysis and Highest and Best Use Site Valuation and Cost Approach Basic Income Capitalization Expert Witness for Commercial Appraisers Commercial Appraisal Review

266 Sample of Appraisal Experience 27-Room Hotel Stockton, California 76,971 SF Multi-Building Office Complex Sacramento, California 120,944 SF Office Building & 6,000 SF Bank Building Modesto, California 14,703 SF Retail Building (Proposed) Escalon, California Commercial Laundry Facility Gilroy, California Mobile Home Park Lakeport, California Mixed-Use Commercial Development (Proposed) Fresno, California In this assignment for Wells Fargo Bank, we estimated the market value of the going concern of 27-room, limited service hotel. The market value of the going concern was also allocated between real property, FF&E (personal property), and business enterprise. This appraisal involved the valuation of a three, multi-tenant office buildings. In this assignment, we estimated the market value of the leased fee interest in the property as of a current inspection date, and the prospective market value upon stabilized occupancy. The as-is and prospective values were provided for each building, as well as in bulk. The client for this assignment was Mechanics Bank. In this assignment for Bank of America, the subject property consisted of a five-story medical office building and a free standing bank branch building. We estimated the hypothetical market value of the property as if stabilized, the as-is market value, and the prospective market value upon stabilized occupancy. This report involved the valuation of a commercial-zoned site proposed for development of a single tenant retail building with a credit tenant in place (build-to-suit). The valuation scenarios included the prospective market value (leased fee interest) upon completion of construction and at stabilized occupancy, the hypothetical market value (leased fee interest) at completion of construction and stabilized occupancy, and the as-is market value of the land (fee simple interest). The client for this assignment was Wells Fargo. This report involved the valuation of a two-building commercial laundry facility. We estimated the retrospective market value of the leased fee interest. The client was Libitzky Property Companies. This assignment involved the valuation of multifamily project consisting of 19 income producing mobile home lots and two for-ret duplexes (or four apartment units). The valuation involved the prospective market value upon stabilized occupancy and the as-is market value which accounted for the renovation of the duplex units and deferred maintenance. This appraisal involved the valuation of an acre portion of master planned community proposed for retail, office, and multifamily development, as well as a plaza, lake, and recreation area. The valuation of multifamily parcels included some second level ( air rights ) area. We estimated the as-is market value, hypothetical market values assuming all backbone infrastructure is in place in bulk, by parcel and the aggregate retail value. This report was prepared for Wells Fargo.

267 May39, May 19, "'ii\l! 2iIIlJll~ ip1f <-'!if P4~,,~j >+<nflf!

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269 APPENDIX A-1 UPDATE APPRAISAL REPORT

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271 Update Appraisal Report Properties within County of Sacramento Community Facilities District No , North Vineyard Station No. 1 (portion of) Sacramento, California Date of Report: April 26, 2016 Prepared For: Mr. Ben Lamera Director of Finance County of Sacramento 700 H Street Sacramento, California Prepared By: Kevin K. Ziegenmeyer, MAI Eric A. Segal, MAI Sara A. Gilbertson, Appraiser

272 April 26, 2016 Mr. Ben Lamera Director of Finance County of Sacramento 700 H Street Sacramento, California RE: Properties within County of Sacramento Community Facilities District No , North Vineyard Station No. 1 (portion of) Sacramento, California Dear Mr. Lamera: At your request and authorization, Seevers Jordan Ziegenmeyer has prepared an update to our appraisal of the above-referenced property. In the original document, dated March 31, 2016, we submitted an Appraisal Report, conforming to the requirements set forth under Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice (USPAP) and the Appraisal Standards for Land Secured Financing published by the California Debt and Investment Advisory Commission (2004). Our original appraisal had an effective date of value of January 20, This update appraisal may only be used in conjunction with our original report. As an Update Appraisal Report, this document does not present complete discussion of the data, reasoning and analyses used in the appraisal process to develop the appraiser s opinions of value. Supporting documentation concerning the data, reasoning and analyses is retained in the appraiser s work file. The appraised properties represent certain land areas within North Vineyard Station No. 1, and are identified as the Vineyard Point and Vineyard Creek (portion of) master planned communities. The appraised properties consist of 145 improved single-family residential lots and 291 unimproved single-family residential lots, as well as a 6.77-acre multifamily parcel and a 1.80-acre proposed clubhouse site. It is noted there are 657 additional improved single-family residential lots within North Vineyard Station CFD No that have vertical improvements constructed (i.e., single-family homes), as well as 48 public and quasi-public land use sites (i.e., park sites, water treatment plant site, detention basins, roadways, etc.), which are not a part of this appraisal. North Vineyard Station No. 1 is generally located within the boundaries identified as follows: west of Bradshaw Road, north of Gerber Road and south of Florin Road, within an unincorporated area of Sacramento County. The subject is more fully described within the original Appraisal Report dated March 31, The market value estimated herein is based on a hypothetical condition. USPAP defines a hypothetical condition as a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of the analysis. The hypothetical condition assumes certain infrastructure improvements to be financed by the County of Sacramento CFD No Special Tax collections are in place and available for use. Seevers Jordan Ziegenmeyer 1

273 Presented below is a summary of pertinent information pertaining to the subject properties: Property Rights Appraised: Property Description & History: Fee Simple Interest The appraised properties represent a portion of the County of Sacramento CFD No (North Vineyard Station No. 1), within the Vineyard Point and Vineyard Creek master planned communities. A summary of the appraised properties within Vineyard Point and Vineyard Creek are provided below. It is noted the public/quasi-public land areas within the District will not be encumbered by special taxes; thus, these sites will be excluded from this analysis. The tables on the following page detail the various land use components comprising the appraised properties. At the time of inspection, all of the lots within Vineyard Point were improved residential lots with completed vertical improvements. Further, the majority of these competed single-family homes have an assessed value for the vertical improvements (i.e., single family homes). As such, these lots are not a part of this appraisal, as is the same for the 48 public and quasi-public land use sites (i.e., park sites, water treatment plant site, detention basins, roadways, etc.). At the time of inspection, with the exception of Unit 1/Village 1, Vineyard Creek Station No. 1 consists of unimproved land. Unit 1/Village 1 was representative of improved single-family residential lots (with the exception of 12 lots along Wild Lilac Circle were unimproved). Construction of the vertical improvements in Unit 1/Village 1 was in progress as of the date of inspection. With the exception of 14 completed single-family homes (none of which have been assigned an assessed value; thus, they are included in the scope of our analysis herein), the 20 lots under construction had no significant amount of construction completed to contribute any vertical improvement value to these lots. The remaining units/villages are tentatively mapped for 117, 72 and 90 single-family residential lots, Unit 4, Unit 5/Village 8 (portion of), and Unit 6, respectively. The appraised properties are situated west of Bradshaw Road, north of Gerber Road and south of Florin Road, within an unincorporated area of Sacramento County, California. Land uses in the subjects immediate area are currently devoted primarily to rural residential uses, with some industrial development and supporting commercial development. With the development of North Vineyard Seevers Jordan Ziegenmeyer 2

274 * Station and neighboring Vineyard Springs and Florin- Vineyard Special Plan areas, there are a variety of land uses, including single and multifamily residential, commercial and recreational uses, that will be incorporated into the area in the near to mid-term. Regarding the sales history of the appraised properties, the majority (if not all) of the appraised properties in Vineyard Point have transferred to individual homeowners in arm s length transactions during the previous three-year period. Further, some of these individual homes may be currently being markets for resale. To the best of our knowledge, most of the appraised properties in Vineyard Creek have not been involved in any arm s length transactions during the previous threeyear period and are vested with Lennar Homes of California, Inc., while the individual finished (improved) single-family residential homes completed have transferred to individual homeowners in arm s length transactions and those under construction in Unit 1/Village 1 maybe currently being marketed for sale. VINEYARD POINT Description Acres No. Homes/Lots Improved Single-Family Lots Completed Single-Family Homes* n/a 53 Total n/a 53 Any completed single-family home with an assessed value for improvements is not considered in this appraisal. Seevers Jordan Ziegenmeyer 3

275 VINEYARD CREEK Description Acres No. Homes/Lots Improved Single-Family Lots Unit 1 / Village 1 Completed Single-Family Homes* 14 Partially Improved Single-Family Homes (Under Construction) 20 Improved Single-Family Lots 58 Subtotal 92 Unimproved Single-Family Lots Unit 1 / Village 1 12 Unit Unit 5 / Village 8 (portion of) 72 Unit 6 90 Subtotal 291 Total Single-Family Component 383 Multifamily Parcel 6.77 n/a Total Multifamily Component 6.77 Proposed Clubhouse Site (portion of APN ) 1.80 n/a Total Clubhouse Component 1.80 * Any completed single-family home with an assessed value for improvements is not considered in this appraisal. Zoning & Entitlements: According to the County of Sacramento Planning Department, the subject parcels are currently zoned for single-family and medium-density residential development. A description of each of the allowable land use designations is presented in the table on the following page. The information was obtained from the County of Sacramento Planning Department and the North Vineyard Station Specific Plan text. It is noted the County zoning designations contain numbers that indicate the maximum number of dwelling units allowed per acre of land. For example, the RD-3 zone allows for a maximum of three dwelling units per acre. Seevers Jordan Ziegenmeyer 4

276 Specific Plan Designation SFR 3-5 SFR 4-7 MDR 7-12 MFR Description Single-family residential: 3-5 units per acre Single-family residential: 4-7 units per acre Medium-density single-family residential: 7-12 units per acre Multifamily residential: units per acre County Zoning Designation RD-3, RD-4, RD-5 RD-4, RD-5, RD-6, RD-7 RD-7, RD-10 RD-15, RD-20, RD-25 Current entitlements for the subject property are summarized in the table on the previous page. Flood Zone: According to the Federal Emergency Management Agency (FEMA) National Flood Insurance Program, Flood Insurance Rate Map (FIRM) Community Panel Number 06067C-0326H and -0327H, dated August 16, 2012, the subject property is located within Zone X Areas determined to be outside the 100-year and 500-year floodplain. The subject is Not subject to the Central Valley Flood Protection Plan. There are several areas throughout the CFD that are in various flood zones with some chance of flooding; however, it has been mapped in such a way that the areas inside the 100-year floodplain will be situated above open spaces, roads and parking areas upon completion of all site development and are considered to have nominal, if any, adverse impact on the subject property. Earthquake Zone: Highest and Best Use: Type and Definition of Value: Scope of Work: Zone 3 Moderate seismic activity (not located in a Fault- Rupture Hazard Zone) Near term single-family residential development The purpose of this update appraisal is to estimate the notless-than market value of the subject property. In preparing this update appraisal, we analyzed market data presented in our original appraisal report dated March 31, In addition, we analyzed current market conditions in the market area of the subject properties, through an analysis of recent market sales and market surveys published by local real estate brokerage houses. This Update Appraisal Report sets forth only the appraiser s conclusions. Supporting documentation is retained in the appraiser s work file. Seevers Jordan Ziegenmeyer 5

277 Date of Inspection: The subject was not re-inspected. The subject property was last inspected on January 20, Date of Report: April 26, 2016 Date of Value: April 26, 2016 Conclusions of Not-Less-Than Value: Bulk Market Value - Lennar Corporation (Master Developer) $ 33,600,000 Aggregate Value of Completed Homes without an Assessed Value* $ 20,010,000 Cumulative (Aggregate) Appraised Value of the District $ 53,610,000 Cumulative (Aggregate) Assessed Value of the District $ 178,281,801 Cumulative (Aggregate) Value of the District $ 231,891,801 * The estimate of aggregate value above represents a not-less-than value due to the fact we were requested to provide a market value of the smallest floor plan on each single-family residential lot improved with a completed home without an assessed value assigned. Please note the aggregate value noted above is not the market value of the appraised properties in bulk. As defined by The Dictionary of Real Estate Appraisal, an aggregate value is the total of multiple market value conclusions. For purposes of this report, market value is estimated by ownership. The estimates of market value account for the impact of the Lien of the Special Taxes securing the Bonds. The estimates of market value assume a transfer would reflect a cash transaction or terms considered to be equivalent to cash. The estimate is also premised on an assumed sale after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with buyer and seller each acting prudently, knowledgeably, for their own self interest and assuming neither is under duress. We hereby certify the properties have been inspected and we have impartially considered all data collected in the investigation. Further, we have no past, present or anticipated future interest in the properties. The subject properties do not have any significant natural, cultural, recreational or scientific value. The appraisers certify this appraisal assignment was not based on a requested minimum valuation, a specific valuation or the approval of a loan. This Update Appraisal Report dated April 26, 2016, which contains 12 pages, must remain attached to the original appraisal dated March 31, 2016 which contains 133 pages, plus related exhibits and Appendix, in order for the value opinions set forth herein to be considered valid. Seevers Jordan Ziegenmeyer 6

278 EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS It is noted the use of an extraordinary assumption or hypothetical condition may have affected the results of the appraisal. Extraordinary Assumptions 1. It is assumed all remaining infrastructure improvements, including those to be financed by the North Vineyard Station CFD No Bonds and those to be financed by the master developer, will be properly installed and available for use. 2. It is presumed there are no adverse soil conditions, toxic substances or other environmental hazards that may interfere or inhibit development of the appraised properties. If, at some future date, items are discovered that are determined to have a detrimental impact on value, the appraiser reserves the right to amend the opinion of value stated herein. 3. The aggregate value presented herein is not the market value in bulk of the entire subject property. As defined by The Dictionary of Real Estate Appraisal, an aggregate value is the total of multiple market value conclusions. For purpose of this report, market value has been estimated by the individual ownerships only. Hypothetical Conditions 1. The estimate of cumulative, or aggregate, value of the appraised properties comprising a portion of the County of Sacramento CFD No (North Vineyard Station No. 1) is subject to a hypothetical condition. A hypothetical condition is defined by USPAP as a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of the analysis. The hypothetical condition assumes certain infrastructure improvements to be financed by the County of Sacramento CFD No Special Tax collections are in place and available for use. Seevers Jordan Ziegenmeyer 7

279 GENERAL ASSUMPTIONS AND LIMITING CONDITIONS 1. No responsibility is assumed for the legal description provided or for matters pertaining to legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated. 2. No responsibility is assumed for matters of law or legal interpretation. 3. The property is appraised free and clear of any or all liens or encumbrances unless otherwise stated. 4. The information and data furnished by others in preparation of this report is believed to be reliable, but no warranty is given for its accuracy. 5. It is assumed there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for obtaining the engineering studies that may be required to discover them. 6. It is assumed the property is in full compliance with all applicable federal, state, and local environmental regulations and laws unless the lack of compliance is stated, described, and considered in the appraisal report. 7. It is assumed the property conforms to all applicable zoning and use regulations and restrictions unless nonconformity has been identified, described and considered in the appraisal report. 8. It is assumed all required licenses, certificates of occupancy, consents, and other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 9. It is assumed the use of the land and improvements is confined within the boundaries or property lines of the property described and there is no encroachment or trespass unless noted in the report. 10. Unless otherwise stated in this report, the existence of hazardous materials, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, ureaformaldehyde foam insulation and other potentially hazardous materials may affect the value of the property. The value estimated is predicated on the assumption there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for such conditions or for any expertise or engineering knowledge required to discover them. The intended user of this report is urged to retain an expert in this field, if desired. 11. The Americans with Disabilities Act (ADA) became effective January 26, I (we) have not made a specific survey or analysis of this property to determine whether the physical aspects of the improvements meet the ADA accessibility guidelines. Since compliance matches each owner s financial ability with the cost-to cure the property s potential physical characteristics, the real estate appraiser cannot comment on compliance with ADA. A brief summary of the Seevers Jordan Ziegenmeyer 8

280 subjects physical aspects is included in this report. It in no way suggests ADA compliance by the current owner. Given that compliance can change with each owner s financial ability to cure non-accessibility, the value of the subject does not consider possible non-compliance. Specific study of both the owner s financial ability and the cost-to-cure any deficiencies would be needed for the Department of Justice to determine compliance. 12. The appraisal is to be considered in its entirety and use of only a portion thereof will render the appraisal invalid. 13. Possession of this report or a copy thereof does not carry with it the right of publication nor may it be used for any purpose by anyone other than the client without the previous written consent of Seevers Jordan Ziegenmeyer. 14. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news, sales, or any other media without the prior written consent and approval of Seevers Jordan Ziegenmeyer. Seevers Jordan Ziegenmeyer authorizes the reproduction of this document to aid in bond underwriting and in the issuance of Bonds. 15. Acceptance and/or use of the appraisal report constitutes acceptance of all assumptions and limiting conditions stated in this report. 16. An inspection of the appraised properties revealed no apparent adverse easements, encroachments or other conditions, which currently impact the subject. The appraiser is not a surveyor nor qualified to determine the exact location of easements. It is assumed typical easements do not have an impact on the opinion (s) of value as provided in this report. If, at some future date, these easements are determined to have a detrimental impact on value, the appraiser reserves the right to amend the opinion (s) of value. 17. This appraisal report is prepared for the exclusive use of the appraiser s client. No third parties are authorized to rely upon this report without the express consent of the appraiser. Seevers Jordan Ziegenmeyer authorizes the reproduction of this document to aid in bond underwriting and in the issuance of Bonds. Seevers Jordan Ziegenmeyer 9

281 CERTIFICATION STATEMENT I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. I have made an inspection of the properties that are the subject of this report. Eric A. Segal, MAI, and Sara A. Gilbertson, Appraiser, provided significant real property appraisal assistance to the person signing this certification. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. I certify that my State of California real estate appraiser license has never been revoked, suspended, cancelled, or restricted. I have the knowledge and experience to complete this appraisal assignment. Please see the Qualifications of Appraiser(s) portion of the Appendix to this report for additional information. As of the date of this report, I have completed the continuing education program for Designated Members of the Appraisal Institute. Kevin K. Ziegenmeyer, MAI State Certification No.: AG (Expires June 4, 2017) April 26, 2016 DATE Seevers Jordan Ziegenmeyer 10

282 CERTIFICATION STATEMENT I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. I have made an inspection of the properties that are the subject of this report. Sara A. Gilbertson, Appraiser, provided significant real property appraisal assistance to the person signing this certification. Kevin Ziegenmeyer, MAI reviewed this report. I certify that my State of California real estate appraiser license has never been revoked, suspended, cancelled, or restricted. I have the knowledge and experience to complete this appraisal assignment. Please see the Qualifications of Appraiser(s) portion of the Appendix to this report for additional information. As of the date of this report, I have completed the continuing education program for Designated Members of the Appraisal Institute. Eric A. Segal, MAI State Certification No.: AG (February 18, 2017) April 26, 2016 DATE Seevers Jordan Ziegenmeyer 11

283 CERTIFICATION STATEMENT I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. I have made an inspection of the property that is the subject of this report. Kevin Ziegenmeyer and Eric Segal, MAIs, reviewed this report. I certify that my State of California real estate appraiser license has never been revoked, suspended, cancelled, or restricted. I have the knowledge and experience to complete this appraisal assignment. Please see the Qualifications of Appraiser(s) portion of the Addenda to this report for additional information. Sara A. Gilbertson, Appraiser State Certification No.: (May 29, 2016) April 26, 2016 DATE Seevers Jordan Ziegenmeyer 12

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285 APPENDIX B COUNTY OF SACRAMENTO COMMUNITY FACILITIES DISTRICT NO (NORTH VINEYARD STATION NO. 1) AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX A Special Tax applicable to each Assessor s Parcel in the Community Facilities District No (North Vineyard Station No. 1) shall be levied and collected according to the tax liability determined by the Board of Supervisors of the County of Sacramento, acting in its capacity as the legislative body of CFD No , through the application of the appropriate Special Tax rate, as described below. All of the property in CFD No , unless exempted by law or by the provisions of Section F below, shall be taxed for the purposes, to the extent, and in the manner herein provided, including property subsequently annexed to CFD No unless a separate Rate and Method of Apportionment of Special Tax is adopted for the annexation area. A. DEFINITIONS The terms hereinafter set forth have the following meanings: Acre means each acre of the land area making up 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 Map or other recorded County parcel map. Act means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, (commencing with Section 53311), Division 2 of Title 5 of the California Government Code. Administrative Expenses means any or all of the following: the fees and expenses of any fiscal agent or trustee (including any fees and expenses of its counsel) employed in connection with any Bonds of CFD No , and the expenses of the County in carrying out its duties for such Bonds, including, but not limited to, the levy and collection of the Special Tax, the fees and expenses of its counsel, charges levied by the County Department of Finance, amounts needed to rebate the federal government with respect to arbitrage earnings on any of such Bonds, costs associated with complying with continuing disclosure requirements, and all other costs and expenses of the County in any way related to the establishment or administration of CFD No Administrator means the Administrator of the County Municipal Services Agency or his/her designee or such other person or department as the Board may designate to serve as the Administrator of the Special Tax. Amended RMA means this Amended Rate and Method of Apportionment of Special Tax. Annexation Approval means the date on which the Board declares the results of a successful election to authorize the levy of a Special Tax in the first area annexed into CFD No Annexation Property means those Assessor s Parcels within Annexed Parcel One and Annexed Parcel Two that have not yet become Large Lot Subdivision Map Property, Final Map Property, or Developed Property. Annexed Parcel One means the lot designated as Parcel 1 on Attachment 1 of this Amended RMA. Annexed Parcel Two means the lot designated as Parcel 2 on Attachment 1 of this Amended RMA. B-1

286 Assessor s Parcel or Parcel means a lot or parcel shown on an Assessor s Parcel Map with an assigned Assessor s Parcel number. Assessor s Parcel Map means an official map of the County Assessor designating parcels by Assessor s Parcel number. Board means the Sacramento County Board of Supervisors. Bonds means bonds or other debt (as defined in the Act), whether in one or more series, issued, insured or assumed by CFD No related to public infrastructure and/or improvements that are authorized to be funded by CFD No Building Permits means a single permit or set of permits required to construct an entire structure, which structure may include stand-alone surface parking, common areas, landscaping, or other areas. If a permit is issued for parking, landscaping or another related facility or amenity, but a building permit has not yet been issued for the structure that these facilities or amenities serve, such permits shall not be considered Building Permits for purposes of application of the Special Tax herein. Capitalized Interest means funds in any capitalized interest account available to pay debt service on Bonds. CFD or CFD No means the County of Sacramento Community Facilities District No (North Vineyard Station No. 1). CFD Formation means the date on which the Resolution of Formation to form CFD No was adopted by the Board. County means the County of Sacramento. Developed Property means, in any Fiscal Year, all Parcels in CFD No for which Building Permits have been issued on or prior to June 1 of the preceding Fiscal Year. Development Class means, individually, Developed Property, Final Map Property, Large Lot Subdivision Map Property, Vineyard Creek Tentative Map Property, Vineyard Point Tentative Map Property, and Annexation Property. Excess Public Property means the acres of Public Property that exceed the acreage exempted in Section F below. In any Fiscal Year in which a Special Tax must be levied on Excess Public Property pursuant to the steps set forth in Section D below, Excess Public Property shall be those Assessor s Parcel(s) that most recently became Public Property based on the dates on which Final Maps recorded creating such Public Property. Exempt Parcel means the lot designated as Parcel 3 on Attachment 1 of this Amended RMA. Expected Land Uses means the total number of Residential Units and Acres of Multi-Family Property expected to be developed within the CFD. The Expected Land Uses at Annexation Approval are identified in Attachment 1 and summarized in Attachment 2 hereto; the Administrator shall update Attachments 1 and 2 each time a change occurs to the land use plans for property in the CFD. Expected Maximum Special Tax Revenue means the expected aggregate Maximum Special Tax revenue that can be collected from all property within the CFD. The Expected Maximum Special Tax Revenue is shown in Attachment 2 of this Amended RMA and may be reduced due to prepayments or land use changes. B-2

287 Final Bond Sale means the last series of Bonds that will be issued on behalf of CFD No (excluding any Bond refundings), as determined in the sole discretion of the Board. Final Map means a final map, or portion thereof, approved by the County pursuant to the Subdivision Map Act (California Government Code Section et seq.) that creates SFD Lots. The term Final Map shall not include any Large Lot Subdivision Map, Assessor s Parcel Map, or subdivision map or portion thereof, that does not create SFD Lots, including Assessor s Parcels that are designated as remainder parcels. Final Map Property means, in any Fiscal Year, all Single Family Detached Property for which a Final Map had recorded prior to June 1 of the preceding Fiscal Year and which has not yet become Developed Property. Fiscal Year means the period starting July 1 and ending on the following June 30. Land Use Categories means Single Family Detached Property, Single Family Attached Property, Multi-Family Property and Other Property. Large Lot Subdivision Map means a subdivision map recorded at the County Recorder s Office that subdivides the property in CFD No into large Parcels, most of which will be subject to future subdivision. Large Lot Subdivision Map Property means, in any Fiscal Year, all Single Family Detached Property included within a Large Lot Subdivision Map that was recorded by June 1 of the prior Fiscal Year, and which has not yet become Final Map Property. Maximum Special Tax means the greatest amount of Special Tax that can be levied on an Assessor s Parcel in any Fiscal Year determined in accordance with Sections C below. Multi-Family Property means, in any Fiscal Year, all Parcels within the CFD for which a building permit was issued for construction of a residential structure with multiple Residential Units that share common walls, all of which are offered or are expected to be offered for rent to the general public and/or employees. Other Property means, in any Fiscal Year, all Parcels of Developed Property which are not Single Family Detached Property, Single Family Attached Property, or Multi-Family Property. Proportionately means that the ratio of the actual Special Tax levied in any Fiscal Year to the Maximum Special Tax authorized to be levied in that Fiscal Year is equal for all Assessor s Parcels. Public Property means any property within the boundaries of CFD No that is either (i) owned by the federal government, the State of California, the County, another public agency, or a private non-profit organization that owns and is responsible for conservation of open space areas or (ii) encumbered by an easement owned by any such public agency or private organization which easement makes the development of such property impractical. Notwithstanding the foregoing, a leasehold or other possessory interest in any such property which is subject to taxation pursuant to Section of the Act shall not constitute Public Property. Residential Unit means (i) for Single Family Detached Property, an individual single-family detached unit, and (ii) for Single Family Attached Property, an individual residential unit within a duplex, triplex, fourplex, townhome, or condominium structure. An accessory residential dwelling unit, as defined by the County Zoning Code, shall not be considered as a Residential Unit for taxation purposes. SFD Lot means an individual residential lot, identified and numbered on a recorded Final Map, on which a building permit has been or is permitted to be issued for construction of a single family detached unit without B-3

288 further subdivision of the lot and for which no further subdivision of the lot is anticipated pursuant to an approved tentative map. Single Family Attached Property means, in any Fiscal Year, all Parcels of Taxable Property for which a building permit was issued or is permitted to be issued for construction of a residential structure consisting of two or more Units that share common walls and are offered or expected to be offered as for-sale units, including residential structures that meet the statutory definition of a condominium contained in Civil Code Section Single Family Detached Property means, in any Fiscal Year, all Parcels of Taxable Property for which a building permit was issued or is permitted to be issued for construction of a Residential Unit that does not share a common wall with another Residential Unit. Special Tax means a Special Tax levied in any Fiscal Year to pay the Special Tax Requirement. Special Tax Requirement means the amount necessary in any Fiscal Year to: (i) pay principal and interest on Bonds that is due in the calendar year that begins in such Fiscal Year; (ii) create and/or replenish reserve funds for the Bonds; (iii) cure any delinquencies in the payment of principal or interest on Bonds which have occurred in the prior Fiscal Year or, based on existing delinquencies in the payment of Special Taxes, are expected to occur in the Fiscal Year in which the tax will be collected; (iv) pay Administrative Expenses; and (v) pay the costs of public improvements and public infrastructure authorized to be financed by CFD No The amounts referred to in clauses (i) and (ii) of the preceding sentence may be reduced in any Fiscal Year by: (i) interest earnings on or surplus balances in funds and accounts for the Bonds to the extent that such earnings or balances are available to apply against debt service pursuant to a Bond indenture, Bond resolution, or other legal document that sets forth these terms; (ii) proceeds received by CFD No from the collection of penalties associated with delinquent Special Taxes; and (iii) any other revenues available to pay debt service on the Bonds as determined by the Administrator. Specific Plan means the North Vineyard Station Specific Plan approved by the Board on November 4, 1998, as may be amended from time to time. Specific Plan Land Use Designation means the land use designation assigned to a particular Parcel in the Specific Plan. Taxable Property means all of the Assessor s Parcels within the boundaries of CFD No which are not exempt from the Special Tax pursuant to law or Section F below. Vineyard Creek Bonds means Bonds that are sized based on Maximum Special Tax revenues that can be generated from Taxable Property within the Vineyard Creek Tentative Map, Annexed Parcel One, and Annexed Parcel Two. Vineyard Point Bonds means Bonds that are sized based on Maximum Special Tax revenues that can be generated from Taxable Property within the Vineyard Point Tentative Map. Vineyard Creek Tentative Map means the vesting tentative map for the Vineyard Creek project approved by the Board on November 10, Vineyard Point Tentative Map means the vesting tentative map for the Vineyard Point project approved by the Board on November 10, Vineyard Creek Tentative Map Property means all Parcels of Taxable Property included within the Vineyard Creek Tentative Map that have not yet become Large Lot Subdivision Map Property, Final Map Property, or Developed Property. B-4

289 Vineyard Point Tentative Map Property means all Parcels of Taxable Property included within the Vineyard Point Tentative Map that have not yet become Large Lot Subdivision Map Property, Final Map Property, or Developed Property. B. DATA FOR ANNUAL ADMINISTRATION On or about July 1 of each Fiscal Year, the Administrator shall identify the current Assessor s Parcel numbers for all Parcels of Taxable Property. The Administrator shall also determine: (i) whether each Assessor s Parcel of Taxable Property is Developed Property, Final Map Property, Large Lot Subdivision Map Property, Vineyard Creek Tentative Map Property, Vineyard Point Tentative Map Property, or Annexation Property, (ii) for Developed Property, which Parcels are Single Family Detached Property, Single Family Attached Property, Multi-Family Property and Other Property, (iii) for Parcels of Single Family Attached Property, the number of Residential Units on each Parcel, (iv) the Specific Plan Land Use Designation for each Parcel, and (v) the Special Tax Requirement. For Single Family Attached Property, the number of Residential Units shall be determined by referencing the site plan, condominium plan, or other development plan. In any Fiscal Year, if it is determined that: (i) a parcel map for property in CFD No was recorded after January 1 of the prior Fiscal Year (or any other date after which the Assessor will not incorporate the newly-created Parcels into the then current tax roll), (ii) because of the date the parcel map was recorded, the Assessor does not yet recognize the new Parcels created by the parcel map, and (iii) one or more of the newly-created parcels is in a different Development Class than other parcels created by the subdivision, the Administrator shall calculate the Special Tax for the property affected by recordation of the parcel map by determining the Special Tax that applies separately to the property within each Development Class, then applying the sum of the individual Special Taxes to the Parcel that was subdivided by recordation of the parcel map. C. MAXIMUM SPECIAL TAX 1. Developed Property The following maximum rates shall apply to all Parcels of Developed Property within CFD No : B-5

290 Land Use Category Single Family Detached Property Single Family Detached Property Single Family Detached Property or Single Family Attached Property Single Family Detached Property or Single Family Attached Property Multi-Family Property Other Property Acre TABLE 1 DEVELOPED PROPERTY MAXIMUM SPECIAL TAX Specific Plan Land Use Designation Single Family Residential 3-5 (SFR 3-5) Single Family Residential 4-7 (SFR 4-7) Medium Density Residential 7-12 (SFR 7-12) Multi-Family Residential (MFR 12-22) Multi-Family Residential (MFR 12-22) N/A Maximum Special Tax (Fiscal Year ) * $1,400 per Residential Unit $1,250 per Residential Unit $950 per Residential Unit $950 per Residential Unit $5,000 per Acre $9,500 per Acre * On July 1, 2006 and on each July 1 thereafter, the Maximum Special Taxes shown in Table 1 shall be increased by an amount equal to 2.0% of the amount in effect for the prior Fiscal Year. 2. Final Map Property The following maximum rates shall apply to all Parcels of Final Map Property within CFD No : Land Use Category Single Family Detached Property Single Family Detached Property Single Family Detached Property Single Family Detached Property TABLE 2 FINAL MAP PROPERTY MAXIMUM SPECIAL TAX Specific Plan Land Use Designation Single Family Residential 3-5 (SFR 3-5) Single Family Residential 4-7 (SFR 4-7) Medium Density Residential 7-12 (SFR 7-12) Multi-Family Residential (MFR 12-22) Maximum Special Tax (Fiscal Year ) * $1,400 per SFD Lot $1,250 per SFD Lot $950 per SFD Lot $950 per SFD Lot * On July 1, 2006 and on each July 1 thereafter, the Maximum Special Taxes shown in Table 2 shall be increased by an amount equal to 2.0% of the amount in effect for the prior Fiscal Year. B-6

291 3. Large Lot Subdivision Map Property The following maximum rates shall apply to all Parcels of Large Lot Subdivision Map Property within CFD No : Land Use Category Single Family Detached Property Single Family Detached Property Single Family Detached Property Single Family Detached Property TABLE 3 LARGE LOT SUBDIVISION MAP PROPERTY MAXIMUM SPECIAL TAX Specific Plan Land Use Designation * Single Family Residential 3-5 (SFR 3-5) Single Family Residential 4-7 (SFR 4-7) Medium Density Residential 7-12 (SFR 7-12) Multi-Family Residential (MFR 12-22) Maximum Special Tax (Fiscal Year ) ** $7,000 per Acre $8,750 per Acre $11,400 per Acre $5,000 per Acre * If more than one Specific Plan Land Use Designation occurs on a single Assessor s Parcel, the Administrator shall calculate the Maximum Special Tax that applies to the acreage within each Specific Plan Land Use Designation; the sum of the Maximum Special Taxes shall be the Maximum Special Tax for the Parcel. ** On July 1, 2006 and on each July 1 thereafter, the Maximum Special Taxes shown in Table 3 shall be increased by an amount equal to 2.0% of the amount in effect for the prior Fiscal Year. 4. Vineyard Point Tentative Map Property, Vineyard Creek Tentative Map Property, and Annexation Property The Maximum Special Tax for Fiscal Year for Vineyard Point Tentative Map Property, Vineyard Creek Tentative Map Property, and Annexation Property is $7,300 per Acre. On July 1, 2006 and on each July 1 thereafter, this Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the prior Fiscal Year. D. METHOD OF LEVY OF THE SPECIAL TAX The Administrator shall determine the Special Tax Requirement to be collected each Fiscal Year, and the Special Tax shall be levied according to the steps outlined below. Step 1: The Special Tax shall be levied proportionately on each Parcel of Developed Property within the CFD up to 100% of the Maximum Special Tax for each Parcel for such Fiscal Year until the amount levied on Developed Property is equal to the Special Tax Requirement prior to applying any Capitalized Interest that is available in the CFD accounts. B-7

292 [Based on the Bonds that have been issued each Fiscal Year (if any), the Administrator shall determine which alternative set forth below is applicable for that Fiscal Year.] Alternative 1: Bonds Have Not Been Issued or only Vineyard Point Bonds Have Been Issued: Step 2: Step 3: Step 4: Step 5: Step 6. Step 7. Step 8. If additional revenue is needed after Step 1, and after applying Capitalized Interest to the Special Tax Requirement, the Special Tax shall be levied proportionately on each Assessor s Parcel of Final Map Property within the Vineyard Point Tentative Map, up to 100% of the Maximum Special Tax for Final Map Property for such Fiscal Year. If additional revenue is needed after applying the first two steps, the Special Tax shall be levied proportionately on each Parcel of Large Lot Subdivision Map Property within the Vineyard Point Tentative Map, up to 100% of the Maximum Special Tax for Large Lot Subdivision Map Property for such Fiscal Year. If additional revenue is needed after applying the first three steps, the Special Tax shall be levied proportionately on each Parcel of Vineyard Point Tentative Map Property, up to 100% of the Maximum Special Tax for Vineyard Point Tentative Map Property for such Fiscal Year. If additional revenue is needed after applying the first four steps, the Special Tax shall be levied proportionately on each Assessor s Parcel of Final Map Property within the Vineyard Creek Tentative Map, Annexed Parcel One, and Annexed Parcel Two, up to 100% of the Maximum Special Tax for Final Map Property for such Fiscal Year. If additional revenue is needed after applying the first five steps, the Special Tax shall be levied proportionately on each Parcel of Large Lot Subdivision Map Property within the Vineyard Creek Tentative Map, Annexed Parcel One, and Annexed Parcel Two, up to 100% of the Maximum Special Tax for Large Lot Subdivision Map Property for such Fiscal Year. If additional revenue is needed after applying the first six steps, the Special Tax shall be levied proportionately on each Parcel of Vineyard Creek Tentative Map Property and Annexation Property, up to 100% of the Maximum Special Tax for such property for such Fiscal Year. If additional revenue is needed after the first seven steps, the Special Tax shall be levied proportionately on each Assessor s Parcel of Excess Public Property, up to 100% of the Maximum Special Tax for Vineyard Creek Tentative Map Property and Vineyard Point Tentative Map Property for such Fiscal Year. Alternative 2: Only Vineyard Creek Bonds Have Been Issued: Step 2. Step 3. If additional revenue is needed after Step 1, and after applying Capitalized Interest to the Special Tax Requirement, the Special Tax shall be levied proportionately on each Assessor s Parcel of Final Map Property within the Vineyard Creek Tentative Map, Annexed Parcel One, and Annexed Parcel Two, up to 100% of the Maximum Special Tax for Final Map Property for such Fiscal Year. If additional revenue is needed after applying the first two steps, the Special Tax shall be levied proportionately on each Parcel of Large Lot Subdivision Map B-8

293 Property within the Vineyard Creek Tentative Map, Annexed Parcel One, and Annexed Parcel Two, up to 100% of the Maximum Special Tax for Large Lot Subdivision Map Property for such Fiscal Year. Step 4. Step 5. Step 6. Step 7. Step 8. If additional revenue is needed after applying the first three steps, the Special Tax shall be levied proportionately on each Parcel of Vineyard Creek Tentative Map Property and Annexation Property, up to 100% of the Maximum Special Tax for such property for such Fiscal Year. If additional revenue is needed after applying the first four steps, the Special Tax shall be levied proportionately on each Assessor s Parcel of Final Map Property within the Vineyard Point Tentative Map, up to 100% of the Maximum Special Tax for Final Map Property for such Fiscal Year. If additional revenue is needed after applying the first five steps, the Special Tax shall be levied proportionately on each Parcel of Large Lot Subdivision Map Property within the Vineyard Point Tentative Map, up to 100% of the Maximum Special Tax for Large Lot Subdivision Map Property for such Fiscal Year. If additional revenue is needed after applying the first six steps, the Special Tax shall be levied proportionately on each Parcel of Vineyard Point Tentative Map Property, up to 100% of the Maximum Special Tax for Vineyard Point Tentative Map Property for such Fiscal Year. If additional revenue is needed after applying the first seven steps, the Special Tax shall be levied proportionately on each Assessor s Parcel of Excess Public Property, up to 100% of the Maximum Special Tax for Vineyard Creek Tentative Map Property and Vineyard Point Tentative Map Property for such Fiscal Year. Alternative 3: Both Vineyard Point Bonds and Vineyard Creek Bonds Have Been Issued: Step 2. Step 3. Step 4. Step 5. If additional revenue is needed after Step 1, and after applying Capitalized Interest to the Special Tax Requirement, the Special Tax shall be levied proportionately on each Assessor s Parcel of Final Map Property within the CFD, up to 100% of the Maximum Special Tax for Final Map Property for such Fiscal Year. If additional revenue is needed after applying the first two steps, the Special Tax shall be levied proportionately on each Parcel of Large Lot Subdivision Map Property within the CFD, up to 100% of the Maximum Special Tax for Large Lot Subdivision Map Property for such Fiscal Year. If additional revenue is needed after applying the first three steps, the Special Tax shall be levied proportionately on each Parcel of Vineyard Creek Tentative Map Property, Vineyard Point Tentative Map Property, and Annexation Property, up to 100% of the Maximum Special Tax for such property for such Fiscal Year. If additional revenue is needed after applying the first four steps, the Special Tax shall be levied proportionately on each Assessor s Parcel of Excess Public Property, up to 100% of the Maximum Special Tax for Vineyard Creek Tentative Map Property and Vineyard Point Tentative Map Property for such Fiscal Year. B-9

294 E. COLLECTION OF SPECIAL TAX The Special Taxes for CFD No shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that prepayments are permitted as set forth in Section G below and provided further that the County may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner, and may collect delinquent Special Taxes through foreclosure or other available methods. The Special Tax shall be levied and collected until principal and interest on Bonds have been repaid, costs of constructing or acquiring authorized facilities from Special Tax proceeds have been paid, and all Administrative Expenses have been reimbursed. However, in no event shall a Special Tax be levied after Fiscal Year Under no circumstances may the Special Tax on one Parcel in the CFD be increased by more than ten percent (10%) as a consequence of delinquency or default in payment of the Special Tax levied on another Parcel or Parcels in the CFD. F. EXEMPTIONS Notwithstanding any other provision of this Amended RMA, no Special Tax shall be levied on up to Acres of Public Property, which is planned for and comprised of approximately acres for streets, acres for parks, a 10.0 acre school site, a 4.17 acre water storage site, a 0.32 acre pump station site, a 3.87 acre drainage channel site, a 9.75 drainage corridor site, a 0.37 acre SMUD site, acres for two detention basins, 0.33 acres for two well sites, 0.23 acres of utility easements, and 3.79 acres of landscaping. Vineyard Point includes approximately 66 percent, or acres, of Public Property, while Vineyard Creek includes the remaining 34 percent, or acres, of Public Property. A Special Tax may be levied on Excess Public Property pursuant to steps set forth in Section D; however, a public agency may require that the special tax obligation on land conveyed to it that would be classified as Excess Public Property be prepaid pursuant to Section G below. No Special Tax shall be levied in any Fiscal Year on Parcels that have fully prepaid the Special Tax obligation pursuant to the formula set forth in Section G. In addition to the exemptions set forth above, no Special Tax shall be levied on the Exempt Parcel subsequent to Annexation Approval. G. PREPAYMENT OF SPECIAL TAX The following definitions apply to this Section G: Outstanding Bonds means all Previously Issued Bonds which remain outstanding, with the following exception: if a Special Tax has been levied against, or already paid by, an Assessor s Parcel making a prepayment, and a portion of the Special Tax will be used to pay a portion of the next principal payment on the Bonds that remain outstanding (as determined by the Administrator), that next principal payment shall be subtracted from the total Bond principal that remains outstanding, and the difference shall be used as the amount of Outstanding Bonds for purposes of this prepayment formula. Previously Issued Bonds means all Bonds that have been issued on behalf of the CFD prior to the date of prepayment. Public Facilities Requirements means either $18,500,000 in 2005 dollars, which shall increase on January 1, 2006, and on each January 1 thereafter by the percentage increase, if any, in the construction cost index for the San Francisco region for the prior twelve (12) month period as published in the Engineering News Record or other comparable source if the Engineering News Record is discontinued or otherwise not available, or such other number as shall be determined by the B-10

295 Administrator to be an appropriate estimate of the net construction proceeds that will be generated from all Bonds that have been or are expected to be issued on behalf of CFD No Remaining Facilities Costs means the Public Facilities Requirements (as defined above), minus any portion of the Public Facilities Requirements funded by Previously Issued Bonds (as defined above), developer equity, Special Tax revenues, and/or any other source of funding. The Special Tax obligation applicable to an Assessor s Parcel in the CFD may be prepaid and the obligation of the Assessor s Parcel to pay the Special Tax permanently satisfied as described herein, provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor s Parcel at the time of prepayment. An owner of an Assessor s Parcel intending to prepay the Special Tax obligation shall provide the County with written notice of intent to prepay. Within 30 days of receipt of such written notice, the Administrator or its designee shall notify such owner of the prepayment amount for such Assessor s Parcel. Prepayment must be made not less than 75 days prior to any redemption date for Bonds to be redeemed with the proceeds of such prepaid Special Taxes. The Prepayment Amount shall be calculated as follows: (capitalized terms as defined below): Bond Redemption Amount plus Remaining Facilities Amount plus Redemption Premium plus Defeasance Requirement plus Administrative Fees and Expenses less Reserve Fund Credit equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount shall be determined by application of the following steps: Step 1. Step 2. Step 3. Step 4. Step 5. Step 6. Step 7. Compute the total Maximum Special Tax that could be collected from the Assessor s Parcel prepaying the Special Tax in the Fiscal Year in which prepayment would be received by the County. Divide the Maximum Special Tax from Step 1 by the then-current Expected Maximum Special Tax Revenues for the CFD. Multiply the quotient computed pursuant to Step 2 by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the Bond Redemption Amount ). Compute the current Remaining Facilities Costs (if any). Multiply the quotient computed pursuant to Step 2 by the amount determined pursuant to Step 4 to compute the amount of Remaining Facilities Costs to be prepaid (the Remaining Facilities Amount ). Multiply the Bond Redemption Amount computed pursuant to Step 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the Redemption Premium ). Compute the amount needed to pay interest on the Bond Redemption Amount starting with the first Bond interest payment date after which the prepayment has been received until the earliest redemption date for the Outstanding Bonds, which, B-11

296 depending on the Bond offering document, may be as early as the next interest payment date. Step 8: Step 9: Step 10. Step 11. Step 12. Compute the amount of interest the County reasonably expects to derive from reinvestment of the Bond Redemption Amount plus the Redemption Premium from the first Bond interest payment date after which the prepayment has been received until the redemption date for the Outstanding Bonds. Take the amount computed pursuant to Step 7 and subtract the amount computed pursuant to Step 8 (the Defeasance Requirement ). Determine the costs of computing the prepayment amount, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the Administrative Fees and Expenses ). If and to the extent so provided in the indenture pursuant to which the Outstanding Bonds to be redeemed were issued, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the Reserve Fund Credit ). The Special Tax prepayment is equal to the sum of the amounts computed pursuant to Steps 3, 5, 6, 9, and 10, less the amount computed pursuant to Step 11 (the Prepayment Amount ). H. INTERPRETATION OF SPECIAL TAX FORMULA The County reserves the right to make minor administrative and technical changes to this document that do not materially affect the rate and method of apportioning Special Taxes. In addition, the interpretation and application of any section of this document shall be left to the County s discretion. Interpretations may be made by the County by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this Amended RMA. B-12

297 ATTACHMENT 1 COUNTY OF SACRAMENTO COMMUNITY FACILITIES DISTRICT NO (NORTH VINEYARD STATION NO. 1) IDENTIFICATION OF EXPECTED LAND USES B-13

298 B-14

299 B-15