Harris Ranch Community Infrastructure District No. 1. Feasibility Report Special Assessment Bonds (Assessment Area One)

Harris Ranch Community Infrastructure District No. 1 Feasibility Report Special Assessment Bonds (Assessment Area One) September 21, 2010 Submitted By: Mr. Doug Fowler Lenir, Ltd. 4940 East Mill Station Drive Suite 101-B Boise, ID 83716

Harris Ranch Community Infrastructure District No. 1 Special Assessment Bonds (Assessment Area One) Table of Contents Introduction; Purpose of Feasibility Report, General Description of the District and Assessment Area... Section One Description of the Projects...Section Two Maps of Location of Projects... Section Three Estimated Cost of the Projects...Section Four Timetable for the Completion of the Projects...Section Five Map of the Area to be Benefited...Section Six Plan of Finance... Section Seven Debt Service Requirements... Exhibit A Legal Description of Assessment Area... Appendix A Legal Description of the District... Appendix B Homeowner Disclosure Notice... Appendix C

SECTION ONE INTRODUCTION, PURPOSE OF FEASIBILITY REPORT, GENERAL DESCRIPTION OF THE DISTRICT AND ASSESSMENT AREA 1 Harris Ranch Community Infrastructure District No. 1

INTRODUCTION The Feasibility Report (the Report ) has been prepared by qualified persons for presentation to the District Board (the Board ) of the Harris Ranch Community Infrastructure District No. 1 (the District ) in connection with the proposed issuance by the District of special assessment bonds (the Bonds ) with respect to certain community infrastructure (as defined in Idaho Code 50-3102) including but not limited to: right-of-way acquisition, greenbelt improvements as well as a fire station road, water and sewer extension (the Project(s) ) to be financed with proceeds of the sale of the Bonds and the plan for financing the Projects in accordance with the District General Plan ( General Plan ). The Report is considered part of: (i) the statement of the estimated costs and expenses of the amounts to be financed through the issuance of the Bonds and (ii) the plans and specifications for purposes of levying the assessment from which Bonds are to be repaid, in each case for all purposes of and pursuant to the Community Infrastructure District Act of 2008, Title 50, Chapter 31, of Idaho Code, as amended ( IC and collectively, the Act ). PURPOSE OF FEASIBILITY REPORT This Report includes: (i) a description of the Projects to be acquired (Section Two); (ii) a map showing, in general, the location of the Projects (Section Three); (iii) an estimate of the Projects (Section Four); (iv) an estimated schedule for the Projects (Section Five); (v) a map or description of the area to be benefited by the Projects (Section Six); and (vi) a plan for financing the Projects (Section Seven). THIS REPORT HAS ALSO BEEN PREPARED AS PART OF THE DECLARATION OF INTENT FOR PURPOSES OF IC 50-3109 (1) AND THE HEREINAFTER DESCRIBED HARRIS RANCH COMMUNITY INFRASTRUCTURE DISTRICT DEVELOPMENT AGREEMENT NUMBER 1 WITH RESPECT TO THE ACQUISITION OF THE PROJECTS FOR THE BENEFIT OF THE AREAS DESCRIBED IN THIS REPORT. On the date this Report is approved, the Board will resolve, among other things, that: (i) the public interest or convenience requires, and it is the intention of the Board, to order the Projects described in substantial form in this Report, (ii) the Projects shall be performed substantially in accordance with this Report and specific plans and specifications relating to the Project, forms of which are filed with this Report for each of the types of the Projects and the contents of which are incorporated by this reference (the Plans and Specifications ); (iii) the Estimate (as such term is defined herein) is approved and adopted by the Board; (iv) the Projects described substantially in the Plans and Specifications shall be performed as provided in the Harris Ranch Community Infrastructure District Development Agreement No. 1 (the CID Development Agreement ); (v) the Projects are of more than local or ordinary public benefit and are of special benefit to the respective lots, pieces and parcels of land within the portion of the District described in Section Six and in Appendix A (the Assessment Area ) and the costs and expenses of the Projects will be charged upon the Assessment Area which 2 Harris Ranch Community Infrastructure District No. 1

shall be benefited by the Projects and assessed to pay the costs and expenses thereof in proportion to the benefit derived therefrom; (vi) the public convenience requires that the Bonds as described in this Report and the CID Development Agreement shall be issued to represent the costs and expenses of the Projects, and the Bonds shall be issued under the provisions of the Act, in the name of the District, but payable only out of a special fund collected by the District from installments of the assessment levied upon the lots, tracts, pieces and parcels of land included within the Assessment Area, in not to exceed thirty (30) annual installments from the assessments remaining unpaid as of the date of the Bonds as provided by the CID Development Agreement and (vii) the Bonds shall bear interest at the rate of not to exceed eleven percent (11%) per annum, payable on the 25th day of January and July of each year and shall be payable in the manner and be subject to the provisions as to collection of assessments for the payment thereof, except as otherwise described in the CID Development Agreement, and neither the District nor the City of Boise, Idaho (the City ), is required to purchase delinquent land at sale if there is no other purchaser, save and except that the special assessments shall be collected and accounted for at the time and in the form and manner as property taxes are collect and accounted for under the laws of Idaho. This Report has been prepared for the exclusive consideration of the Board. It is not intended or anticipated that this Report will be relied upon by other persons, including, but not limited to, purchasers of the Bonds. This Report does not attempt to address the quality of the Bonds as investments or the likelihood of repayment of the Bonds. In preparing this Report, engineers, staff of the City, legal counsel and other experts have been consulted as deemed appropriate. THIS REPORT IS THE FEASIBILITY REPORT REQUIRED BY THE ACT AND IS NOT INTENDED TO BE A FINANCIAL FEASIBILITY REPORT OR STUDY AS THAT TERM IS CUSTOMARILY USED. GENERAL DESCRIPTION OF DISTRICT AND ASSESSMENT AREA Formation of the District was approved on May 11, 2010 by the City upon the request of the Harris Ranch Family Limited Partnership, an Idaho limited partnership, (the Applicant ) as the owners of 470.03 acres of the land within the District upon formation. An additional 485.82 acres property owned by the Applicant was annexed into the District on June 22, 2010 bringing the total acreage included with the boundaries of the District to 955.85 acres. The District is located within the municipal boundaries of the City. (See the maps in Section Three and Section Six of this Report and Appendix B hereto for a description of the District). The District was formed to finance the costs of certain community infrastructure purposes (as such term is defined in the Act), including particularly the Projects, which are part of 955.85 acres known as Harris Ranch (the Development ). The Assessment Area consists of approximately 400.55 acres including 2,517 residential units and 76.5 acres of commercial uses. (See the maps in Section Three and Section Six and Appendix A hereto for a description of the Assessment Area.) Although the number of acres devoted to each particular type of land use may ultimately vary from 3 Harris Ranch Community Infrastructure District No. 1

those presented, the build-out of the Development and the Assessment Area is currently expected to include the following land uses: Harris Ranch Community Infrastructure District No. 1 Land Use Plan/ Assesment Area One District Asssessment Area One Description Acres Units Acres Units Residential - Low Density 189.38 411 189.38 411 Residential - Medium Density 67.00 511 67.00 511 Mixed Use - Residential 24.98 375 24.98 375 Mixed Use - Commerical 76.49 1170 76.49 1170 Spa Hotel 42.70 50 42.70 50 Alta Harris Community Park 28.00 0 0.00 0 Open Space (1) 527.30 0 0.00 0 Total 955.85 2,517 400.55 2,517 FOOTNOTES: (1) To the extent that additional security may be required to achieve value-to-lien requirements, additional acreage and/or other security may be provided as additional security for the Bonds. 4 Harris Ranch Community Infrastructure District No. 1

SECTION TWO DESCRIPTION OF THE PROJECTS 5 Harris Ranch Community Infrastructure District No. 1

DESCRIPTION OF THE PROJECTS The Projects to be acquired and/or constructed with Bond proceeds include the following: (1) Acquisition of the Warm Springs Parkway Right-of-Way The right-of-way related to the southerly portion of the Warm Springs Parkway is comprised of approximately 17.7 acres of land and will allow for the future construction of the Warm Springs Parkway which will create an alternate route to move traffic through Harris Ranch. See the map included in Section Three of this Report for the location of right-of-way and the corresponding area of benefit which is the subject of this Report. Estimated Description Acres Value Per Square Foot Estimated Value Right-of-Way 17.68 $3.50 $2,695,200 The fair market value of the right-of-way will be determined by a MAI appraiser. To the extent that Bond proceeds are insufficient to provide for the acquisition of the right-of-way, excess right-of-way costs not provided by Bond proceeds will be paid pursuant to the terms of the CID Development Agreement. (2) Construction of the Greenbelt Improvements Represents the construction of a Class A Greenbelt as defined by the Boise Parks and Recreation Department. The greenbelt will extend from Marianne Williams Park under Eckert Road to Lystad Road. See the map included in Section Three of this Report for the location of the greenbelt and the corresponding area of benefit which is the subject of this Report. Estimated Cost: $1,668,000 (3) Fire Station #15 Road, Water and Sewer Extension Represents the design and construction of roadway, sanitary sewer, domestic water, pressurized irrigation, site preparation, and other community infrastructure purposes related to Fire Station #15. See the map included in Section Three of this Report for the location of the road, water, and sewer extension the corresponding area of benefit which is the subject of this Report. Estimated Cost: $552,000 6 Harris Ranch Community Infrastructure District No. 1

To the extent that Bond proceeds are insufficient to provide for the acquisition of right-ofway, construction and/or acquisition of the greenbelt and Fire Station #15 road, water, and sewer extension, excess costs not provided by Bond proceeds will be paid pursuant to the terms of the CID Development Agreement. 7 Harris Ranch Community Infrastructure District No. 1

SECTION THREE MAP OF LOCATION OF PROJECTS 8 Harris Ranch Community Infrastructure District No. 1

MAP OF LOCATION OF PROJECTS Fire Station #15 Road, Water, Sewer Extension Warm Springs Pkwy Right-of-Way Greenbelt Improvements 9 Harris Ranch Community Infrastructure District No. 1

SECTION FOUR ESTIMATED COST OF THE PROJECTS 10 Harris Ranch Community Infrastructure District No. 1

ESTIMATED COST OF THE PROJECTS Shown below is a summary of the estimated acquisition and construction costs of the Projects. Harris Ranch Community Infrastructure District No. 1 Estimated Costs of the Projects Project Description Estimated Cost Warm Springs Pkwy ROW (1) $ 2,695,200 Greenbelt Improvements $ 1,668,000 Fire Station #15 Road, Water and Sewer Extension $ 552,000 Total Costs $ 4,915,200 FOOTNOTES: (1) Costs to be determined by MAI Appraiser. The value of the Warm Springs Parkway Right-of-way will be determined by a MAI real estate appraiser. Upon acquisition of the Warm Springs Parkway Right-of-Way, the District will transfer completely the right-of-way to the ACHD. Accordingly, it is not anticipated that there will be District operating or maintenance expenses in connection with the right-of-way. The greenbelt improvements, Fire Station #15 road, water and sewer extension will be constructed upon City owned property and upon completion of such improvements the City will be responsible for the on-going operations and maintenance of the greenbelt and Fire Station #15 road, water and sewer extension. The District will not have any on-going responsibility for such costs. 11 Harris Ranch Community Infrastructure District No. 1

SECTION FIVE TIMETABLE FOR THE COMPLETION OF THE PROJECTS 12 Harris Ranch Community Infrastructure District No. 1

Harris Ranch Community Infrastructure District No. 1 Timetable For Completion Of The Projects Project Description Estimated Cost Est. Start Date Est. Completion Date Warm Springs Pkwy ROW (1) $ 2,695,200 November 2010 December 2010 Greenbelt Improvements $ 1,668,000 January 2011 November 2011 Fire Station #15 Road, Water, Sewer Extension $ 552,000 March 2010 March 2011 Total Costs $ 4,915,200 FOOTNOTES: (1) Actual costs to be determined by MAI Appraiser. 13 Harris Ranch Community Infrastructure District No. 1

SECTION SIX MAP OF THE AREA TO BE BENEFITED 14 Harris Ranch Community Infrastructure District No. 1

FOOTNOTE: To the extent that additional security may be required to achieve value-tolien requirements, portions of the open space may be made available as additional security for the Bonds. 15 Harris Ranch Community Infrastructure District No. 1

SECTION SEVEN PLAN OF FINANCE 16 Harris Ranch Community Infrastructure District No. 1

PLAN OF FINANCE 1) Costs of the acquisition and/or construction of the Projects will be provided by the District pursuant to the terms of CID Development Agreement. To the extent that Bond proceeds are insufficient to provide for the cost of the Projects, unreimbursed costs shall be paid pursuant to the terms of the CID Development Agreement. 2) Valuation of real property interests will adhere to applicable City requirements for such matters. 3) (A) The District shall issue and sell, pursuant to the provisions of the Act, the Bonds in an amount sufficient: (i) to pay directly there from the total cost of the acquisition and/or construction relating to the Projects as described in the CID Development Agreement, and (ii) to pay: (a) all other amounts indicated in the CID Development Agreement (including, but not limited to, costs of establishing the District), (b) all relevant issuance costs related to the Bonds, (c) capitalized interest related to the Bonds for a period not in excess of that permitted by the Act and described herein and (d) an amount necessary to fund a debt service reserve fund related to the Bonds in an amount not in excess of that permitted by the Act and described herein (the amounts described in (i) and (ii) (a), (b), (c) and (d) collectively, the "Estimate"), but not to exceed in principal amount $6,500,000. (B) The Bonds shall be payable from amounts collected by the District from, among other sources, the hereinafter described special assessment (the "Assessment"). (i) The Assessment shall be based on the Estimate. (ii) The Assessment shall be levied pursuant to the procedures prescribed by the Act, as amended, as nearly as practicable and except as otherwise provided in the CID Development Agreement, upon the Assessment Area based on the benefits to be received by and as allocated to the parcels into which the Assessment Area is or is to be divided. 17 Harris Ranch Community Infrastructure District No. 1

(C) The Financeable Amount is as follows: HARRIS RANCH COMMUNITY INFRASTRUCTURE DISTRICT NO. 1 Sources and Uses Of Funds Sources of Funds (1): Series 2010 Bond Issue $ 6,320,000 Total Sources $ 6,320,000 Uses of Funds: (1) Improvement Costs (2) $ 4,030,400 Cost of Issuance Bond Counsel $ 45,000 Underwriter Counsel $ 40,000 City Financial Advisors $ 20,000 Appraisal $ 20,000 Trustee-Estimate $ 4,000 Printing Fee Estimate $ 5,000 Assessment Engineer $ 15,000 Developer Consulting Fees $ 35,000 Other $ 20,000 Subtotal - Cost of Issuance $ 204,000 Underwriter Discount (2%) $ 126,400 Capitalized Interest (36 months) $ 1,327,200 Reserve Fund $ 632,000 Total Uses $ 6,320,000 FOOTNOTES: (1) All figures have been rounded. Individual categories above are estimates. The total of the Bonds to be issued will not exceed $6,500,000 in principal amount and as such, certain amounts may change when the final amount of the Bond is determined. (2) Only $4,030,400 of the total Project costs of $4,915,200 is anticipated to be financed with bond proceeds. The Applicants reserves the right to seek reimbursement for such funds advanced to the District through subsequent Bond issuances. (D) The estimated debt service for the Bonds (assuming a total issuance of $6,320,000 in principal amount) is shown in Exhibit A hereto. 4) The Bonds are expected to have a 30 year maturity with three years being interest only and the principal amount amortized over the remaining 27 years. The Bonds will not be rated or credit-enhanced in any form. 18 Harris Ranch Community Infrastructure District No. 1

5) The Bonds are anticipated to be sold via a private sale to qualified institutional investors and/or accredited investors. 6) Pursuant to the CID Development Agreement, at the time of sale of the Bonds, an appraisal prepared by a MAI appraiser must show that the bulk, wholesale value of the property composing the Assessment Area with the Projects in place including the value of the community infrastructure to be financed or paid for with special assessments and the infrastructure for which performance bonds have been received, is worth at least three (3) times as much as the principal amount of the Bonds. 7) In determining the method of apportioning the Assessment, a square foot basis will be used as the ultimate basis as such, an assessment in the amount not to exceed $0.38 psf ($16,500 per acre) in principal will be assessed to all benefitting property. The average annual assessment payments with respect to such portion will be approximately $0.03 psf ($1,377 per acre). 8) Special assessment liens may be prepaid in whole or in part at any point in time by any property owner in accordance with the following formula: Principal Amount Outstanding (at time of prepayment) Plus: Accrued Interest Through The Next Interest Payment Date (e.g. 6 months) Plus: Prepayment Penalty (if any) Plus: City Administration Fee (if any) Less: <Reserve Fund Credit > (1) Equals = Prepayment Amount Footnotes: (1) The reserve fund credit shall equal the lesser of: (A) the expected reduction in the reserve requirement associated with the redemption of the outstanding Bonds as a result of the prepayment or (B) the amount derived by subtracting the new reserve requirement in effect after the redemption of outstanding Bonds as the result of the prepayment from the balance in the reserve fund on the payment date. The CID will agree to allow for a mechanism whereby special assessment bonds may be broken into $1,000 denominations to facilitate the potential prepayment of assessments. 9) To the extent eligible costs identified in the Report exceed the proceeds from the Bond, such costs shall be reimbursed from future Bond issues pursuant to the terms of the CID Development Agreement. 10) IC 50-3102 requires the District Board record with the Ada County Clerk each parcel of real property within the District that will be encumbered with any future general obligation bond or special assessment bond repayment liability, a notice setting forth: (i) the current obligation of a property owner within the District with respect to any bond repayment liability; (ii) that the obligation to retire the bonds will be the responsibility of any property owner in the District through the payment of real property taxes and/or special assessments, as applicable, collected by the county treasurer in addition to all other property tax payments; (iii) the estimated maximum tax or special assessment rate 19 Harris Ranch Community Infrastructure District No. 1

upon the parcel for bond repayment; (iv) whether the tax or special assessment rate is to be maintained at any level by means of any developer agreement with the District; and (v) that in the event of the failure to maintain the tax rate, the tax rate on a parcel will increase, as needed, to provide for bond repayment. Any purchaser of land within the District prior to purchase will be required to sign and acknowledge a form of disclosure entitled "CID Tax and Special Assessment Disclosure Notice ( Disclosure Notice ) disclosing the property owner's general obligation bond and special assessment repayment liability. A copy of the Disclosure Notice has been attached hereto as Appendix C. 20 Harris Ranch Community Infrastructure District No. 1

EXHIBIT A DEBT SERVICE REQUIREMENTS Harris Ranch Community Infrastructure District No. 1

Exhibit A Harris Ranch Community Infrastructure District No. 1 Debt Service Requirements Series 2010 Special Assessment Bond (1) Issue Year 2010 Anticipated Interest Rate 7.0% Bond Term 27 Interest Only Period (years) 3 Estimated Principal Amount $ 6,320,000 Reserve Fund (1) (632,000) Capitalized Interest (1) (1,327,200) Underwriter (1) 2.0% (126,400) Costs of Issuance (1) 3.2% (204,000) Estimated Construction Proceeds $ 4,030,400 Bond Year Year Cap Interest Normal Interest Principal Payment Beg Balance End Balance Totals - 2010 - - - - $ 6,320,000 $ 6,320,000 1 2011 $ 442,400 - - $ 442,400 6,320,000 6,320,000 2 2012 442,400 - - 442,400 6,320,000 6,320,000 3 2013 442,400 - - 442,400 6,320,000 6,320,000 4 2014 - $ 442,400 $ 85,000 527,400 6,320,000 6,235,000 5 2015-436,460 91,000 527,460 6,235,000 6,144,000 6 2016-430,105 97,000 527,105 6,144,000 6,047,000 7 2017-423,305 104,000 527,305 6,047,000 5,943,000 8 2018-416,029 111,000 527,029 5,943,000 5,832,000 9 2019-408,243 119,000 527,243 5,832,000 5,713,000 10 2020-399,913 127,000 526,913 5,713,000 5,586,000 11 2021-390,999 136,000 526,999 5,586,000 5,450,000 12 2022-381,461 146,000 527,461 5,450,000 5,304,000 13 2023-371,256 156,000 527,256 5,304,000 5,148,000 14 2024-360,337 167,000 527,337 5,148,000 4,981,000 15 2025-348,653 179,000 527,653 4,981,000 4,802,000 16 2026-336,151 191,000 527,151 4,802,000 4,611,000 17 2027-322,774 205,000 527,774 4,611,000 4,406,000 18 2028-308,460 219,000 527,460 4,406,000 4,187,000 19 2029-293,145 234,000 527,145 4,187,000 3,953,000 20 2030-276,758 250,000 526,758 3,953,000 3,703,000 21 2031-259,223 268,000 527,223 3,703,000 3,435,000 22 2032-240,461 287,000 527,461 3,435,000 3,148,000 23 2033-220,386 307,000 527,386 3,148,000 2,841,000 24 2034-198,905 328,000 526,905 2,841,000 2,513,000 25 2035-175,921 351,000 526,921 2,513,000 2,162,000 26 2036-151,328 376,000 527,328 2,162,000 1,786,000 27 2037-125,014 402,000 527,014 1,786,000 1,384,000 28 2038-96,857 430,000 526,857 1,384,000 954,000 29 2039-66,730 461,000 527,730 954,000 493,000 30 2040-34,493 493,000 527,493 493,000 - FOOTNOTES: (1) Estimate. Actual amounts to be determined. Harris Ranch Community Infrastructure District No. 1

APPENDIX A LEGAL DESCRIPTION OF BENEFITED AREA HARRIS RANCH COMMUNITY INFRASTRUCTURE DISTRICT ASSESSMENT AREA Harris Ranch Community Infrastructure District No. 1

APPENDIX B LEGAL DESCRIPTION OF THE DISTRICT Harris Ranch Community Infrastructure District No. 1

APPENDIX C HOMEBUYER DISCLOSURE NOTICE Harris Ranch Community Infrastructure District No. 1

CID TAX AND SPECIAL ASSESSMENT DISCLOSURE NOTICE YOU ARE PURCHASING REAL PROPERTY THAT IS INCLUDED WITHIN THE BOUNDARIES OF A COMMUNITY INFRASTRUCTURE DISTRICT (the District ) formed pursuant to Idaho Code Title 50, Chapter 31 (the Act ) by Resolution No. 20895 adopted the Mayor and City Council of the City of Boise ( City ) on May 11, 2010. 1. The District is governed by a District Board consisting of three (3) members of the City Council pursuant to Idaho Code 50-3104(2) (the District Board ) and is subject to that District Development Agreement No. 1 for entered into among the City, Harris Ranch Limited Partnership and the District dated, 2010 (the Development Agreement ). 2. Property Taxes for General Obligation Bonds. a. By at least a 2/3 majority vote of the qualified electors within the District, the issuance sale of General Obligation Bonds in one or more series ( GO Bonds ) was authorized to be issued over the next 30 years up to $50,000,000 to finance the construction, acquisition and/or installation of community infrastructure facilities including, without limitation, roadways, parks, recreation areas, public facilities, interest in real property, water, wastewater, storm water, flood control improvements and related financing costs. The GO Bonds may be issued sold in one or more series of bonds and shall mature over a period of 30 years from the date of issuance including interest at no greater than twelve percent (12%) per annum. b. Pursuant to the Act and the said voter authorization, each year the District Board shall levy a tax on all real property in the District to pay the debt service on the GO Bonds when due. Pursuant to the Development Agreement, the maximum levy to pay the debt service on the GO Bonds is estimated not to exceed 3 mills (.003) [plus 0onehundredth of one percent (.1) mill (.0001) for administration expenses] of the assessed value of the taxable property within the District. The actual amount of property taxes to pay debt service on the GO Bonds could vary based on several factors including the amount financed, the terms of the financing and the assessed valuation of properties within the District. 3. Special Assessment Bonds. a. The District Board, upon the submission of a petition signed by all the owners of all the lands located in a proposed assessment area, or whenever the District Board shall deem it advisable, shall adopt a resolution ordering a hearing be held to determine whether a special assessment should be imposed and Special Assessment Bonds ( SA Bonds ) be issued and thereafter may impose a special assessment on the real property within the assessment area. b. The District Board may issue SA Bonds if it finds that it will be in the best interest of the District and that the real property contained within the assessment area has an aggregate fair market value, including the value of the community infrastructure to be financed or paid for with the special assessments, and the infrastructure for which performance bonds or other financial assurances have been received, in the amount of at least three (3) times the aggregate principal amount of the SA Bonds. Harris Ranch Community Infrastructure District No. 1

c. SA Bonds are will be secured and paid by special assessment liens on each of the benefitted lots within the special assessment area. Special assessment areas may be established from time-to-time based on public infrastructure improvements being constructed or purchased upon the petition to the District Board by all the landowners contained within the boundaries of the proposed assessment area. d. After the submission of a petition by the owners of all of the land as depicted on the map attached hereto as within land described for special assessment in Exhibit A (hereinafter referred to as the Assessment Area One ) within the District and the holding of a hearing and approval by the District Board thereon, the District has will authorized a special assessment on the property within Assessment Area One in the amount not to exceed $6,500,000 plus interest on the SA Bonds e. The assessment on your property related to Assessment Area One shall not exceed $16,500 per acre ($0.38 per sf), plus interest not to exceed 12% per annum until the same is paid in full. The following table illustrates the estimated total annual CID taxes for the repayment of CID GO bonds, maintenance and operation expenses as well as the repayment of the Assessments. Harris Ranch Community Infrastructure District No. 1 Estimated Tax Liability Example (1) Est. Annual Payment (A) (B) (A) + (B) = C Estimated General Obligation Special Assessment Total CID Tax Home Price & Expense Pmt (2) Payment (3) Payments (4) $200,000 $310 $344 $654 $225,000 $384 $344 $728 $250,000 $461 $344 $806 $275,000 $539 $344 $883 $300,000 $616 $344 $961 $325,000 $694 $344 $1,038 $350,000 $771 $344 $1,116 Footnotes: (1) Note: This schedule has been provided for information purposes only. Actual lot sizes, bond terms, and special assessment amounts to vary and as a result may not necessarily depict your actual general obligation and special assessment obligation. (2) Represents the repayment of CID general obligation bond indebtedness and CID expenses based upon a 3.1 mill increase in the ad valorem property tax rate. Assumes the 2010 State of Idaho property tax exemption of 50% of the value up to a maximum of $101,153 a home up to one acre of land. (3) Assumes a $4,125 special assessment lien on a 10,890 sf lot. Special assessment liens shall not to exceed $16,500 per acre ($0.38 psf). Special assessment bond terms assumes a 7.0% interest rate, 27 year amortization period, 3 years of capitalized interest, 10% reserve fund, and issuance expenses. This figure does not include any administrative charges (estimated at 0.01% per year), which may be charged by the District and/or third party administrators, if any. (4) All of the taxes, assessments and charges described above are in addition to any taxes, fees and charges imposed by Ada County, the City of Boise or other political subdivisions and are in addition to any assessments or fees imposed by any homeowners association. Harris Ranch Community Infrastructure District No. 1

4. Homeowner Acknowledgment: By signing this Disclosure, you, as a contract purchase of a lot(s) within the District: a. Acknowledge receipt of this Disclosure; b. Agree you have been granted and opportunity to review the information contained herein; c. Agree to accept a tax levy to service the debt of GO Bonds which is estimated not to exceed three (3) mills with an additional one-hundredth of one percent (.1) mill for administrative expenses; d. Acknowledge that your property is currently will be subject to a special assessment not to exceed $16,500 per acre ($0.38 psf), payable in 27 annual installments at an interest rate not to exceed 12% per annum to service the debt of SA Bonds and do consent to such assessments, and further you understand that your property may be subject to further special assessment lien to service the debt of additional SA Bonds to the extentas applicable by law; e. Acknowledge that the obligation to retire both GO Bonds and SA Bonds will be the responsibility of the property owners in the District or the special assessment area through taxes or special assessments collected by the Ada County Treasurer in addition to all other taxes or charges imposed by Ada County, the City of Boise or other political subdivisions and in addition to assessments payable to a homeowners association. f. Acknowledge that the tax for GO Bonds will not necessarily be maintained at any particular level by agreement with the developer and, in the event of failure to maintain the tax rate, the tax rate on your parcel may increase, as needed, to retire the GO bonds. g. Acknowledge that the special assessments will not necessarily be maintained by the developer at any particular amount. Should you fail to pay your special assessment payments the District may foreclose on your property in the same manner as real property tax liens. h. Acknowledge that a Notice Pursuant to Section 50-3115, Idaho Code as amended has been recorded against your property relating to the matters set forth herein. Your signature below acknowledged that you have received, read and understand this Disclosure at the time you signed your purchase contract and agree to its terms. Dated this day of, 201. [need a notary acknowledgment here] Harris Ranch Community Infrastructure District No. 1

EXHIBIT A MAP OF ASSESMENT AREA ONE Harris Ranch Community Infrastructure District No. 1