POWAY UNIFIED SCHOOL DISTRICT

POWAY UNIFIED SCHOOL DISTRICT CONTINUING DISCLOSURE ANNUAL REPORT FISCAL YEAR ENDING JUNE 30, 2017 COMMUNITY FACILITIES DISTRICT NO. 6 SPECIAL TAX BONDS, SERIES 2012 SPECIAL TAX REFUNDING BONDS, SERIES 2016 BASE CUSIP: 738855 JANUARY 31, 2018 PREPARED FOR: Poway Unified School District Planning Department 13626 Twin Peaks Road Poway, CA 92064-3098 T 858.748.0010 PREPARED BY: Cooperative Strategies 8955 Research Drive Irvine, CA 92618 T 949.250.8300

Poway Unified School District Community Facilities District No. 6 Special Tax Bonds, Series 2012 Maturity Date (September 1) CUSIP* 2013 738855UW3 2014 738855UX1 2015 738855UY9 2016 738855UZ6 2017 738855VA0 2018 738855VB8 2019 738855VC6 2020 738855VD4 2021 738855VE2 2022 738855VF9 2023 738855VG7 2024 738855VH5 2025 738855VJ1 2026 738855VK8 2027 738855VL6 2028 738855VM4 2029 738855VN2 2030 738855VP7 2031 738855VQ5 2033 738855VS1 2036 738855VV4 * CUSIP is a registered trademark of the American Bankers Association.

Poway Unified School District Community Facilities District No. 6 Special Tax Refunding Bonds, Series 2016 Maturity Date (September 1) CUSIP* 2017 738855ZQ1 2018 738855ZR9 2019 738855ZS7 2020 738855ZT5 2021 738855ZU2 2022 738855ZV0 2023 738855ZW8 2024 738855ZX6 2025 738855ZY4 2026 738855ZZ1 2027 738855A21 2028 738855A39 2029 738855A47 2030 738855A54 2031 738855A62 2032 738855A70 2033 738855A88 2034 738855A96 2035 738855B20 * CUSIP is a registered trademark of the American Bankers Association.

List of Participants Issuer Community Facilities District No. 6 Poway Unified School District- Planning Department 13626 Twin Peaks Road Poway, CA 92064 Phone: 858.748.0010 www.powayusd.com Bond Counsel Best Best & Krieger LLP 655 West Broadway 15th Floor San Diego, CA 92101 Disclosure Counsel James F. Anderson Law Firm, A Professional Corporation 23282 Mill Creek Drive, Suite 240 Laguna Hills, CA 92653 Community Facilities District Administrator and Dissemination Agent Cooperative Strategies, LLC 8955 Research Drive Irvine, CA 92618 Phone: 949.250.8300 Fax: 949.250.8301 www.coopstrategies.com

Fiscal Agent Zions Bank, a division of ZB, National Association 550 South Hope Street, Suite 2875 Los Angeles, CA 90071 Phone: 213.593.3152 Fax: 213.593.3160 www.zionsbank.com Underwriter (Series 2012 Bonds) Stifel, Nicolaus & Company, Incorporated 515 South Figueroa Street, Suite 1800 Los Angeles, CA 90071 Phone: 213.443.5006 Fax: 213.443.5023 Underwriter (Series 2016 Bonds) Piper Jaffray & Co. 2321 Rosecrans Ave, Suite 3200 El Segundo, CA 90245 Phone: 310.297.6011

T.O.C. SECTION PAGE I. ISSUER S STATEMENT ----------------------------------------------------------------------- 1 II. FINANCIAL INFORMATION --------------------------------------------------------------- 2 III. BOND INFORMATION ----------------------------------------------------------------------- 3 A. Principal Amount of Bonds Outstanding B. Fund and Account Balances C. Reserve Requirement D. Status of Projects IV. SPECIAL TAXES ---------------------------------------------------------------------------------- 7 A. Changes to the Rate and Method of Apportionment B. Prepayments C. Special Tax Budget D. Debt Service Coverage E. Summary of Levy F. Major Taxpayers G. Special Tax Delinquencies H. Special Tax Foreclosures I. Status of Improvement Areas V. ASSESSED VALUES AND LAND SECURED BONDED INDEBTEDNESS -- 14 A. Assessed Value Summary B. Overlapping Debt Report C. Assessed Value and Value-to-Lien Ratios VI. REPORTS AND ADDITIONAL INFORMATION ------------------------------------ 16 A. Reports to the California Debt and Investment Advisory Commission B. Listed Events C. Additional Information

EXHIBITS EXHIBIT A: Debt Service Schedules EXHIBIT B: Rate and Method of Apportionment EXHIBIT C: Prepayment Table EXHIBIT D: Annual Debt Service Coverage Summary Table EXHIBIT E: Assessed Value and Value-to-Lien Ratios EXHIBIT F: Detailed Direct and Overlapping Debt Report EXHIBIT G: Reports to the California Debt and Investment Advisory Commission

I. ISSUER S STATEMENT This Annual Report ("Report") has been prepared pursuant to the Continuing Disclosure Agreements ("Disclosure Agreements") executed in connection with the issuance of the Special Tax Bonds, Series 2012 ("2012 Bonds") and the Special Tax Refunding Bonds, Series 2016 ("2016 Bonds"), (collectively, "Bonds"), by Community Facilities District ("CFD") No. 6 of the Poway Unified School District ("School District"). The School District has agreed under the Disclosure Agreements and pursuant to Rule 15c2-12 of the Securities and Exchange Commission to provide certain annual financial information, operating data, and notices of certain listed events via the Electronic Municipal Market Access ("EMMA") system, a service of the Municipal Securities Rulemaking Board. This Report has been prepared by Cooperative Strategies at the direction of the School District, for the benefit of the owners of the Bonds and the Participating Underwriter. Any information contained herein which involves 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 representations of fact. The information set forth herein has been furnished by the School District, or other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Report nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the School District or CFD No. 6 since the date hereof. Capitalized terms used herein which are not otherwise defined shall have the meaning given them in the Disclosure Agreements. For a detailed listing of information provided in this Report, please contact Cooperative Strategies at taxinfo@coopstrategies.com. Information requested, in accordance with the Disclosure Agreements, will be uploaded to the Electronic Municipal Market Access website. Please visit https://emma.msrb.org for any updates. Poway Unified School District POWAY UNIFIED SCHOOL DISTRICT PAGE 1 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012 AND SERIES 2016 JANUARY 31, 2018

II. FINANCIAL INFORMATION The CFD does not prepare annual financial statements, however, the School District's annual audited financial statements for Fiscal Year 2016/2017 are available online at http://emma.msrb.org/ and are hereby incorporated by reference. The School District's annual financial statements are provided solely to comply with the Securities Exchange Commission staff's interpretation of Rule 15c2-12. No funds or assets of CFD No. 6 or the School District, other than Net Special Taxes, are required to be used to pay debt service on the Bonds, and neither CFD No. 6 nor the School District is obligated to advance available funds to cover any delinquencies. Investors should not rely on the financial condition of CFD No. 6 or the School District in evaluating whether to buy, hold, or sell the Bonds. POWAY UNIFIED SCHOOL DISTRICT PAGE 2 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012 AND SERIES 2016 JANUARY 31, 2018

III. BOND INFORMATION Special Tax Bonds, Series 2012. The 2012 Bonds were issued in the amount of $38,940,000 on June 7, 2012. The 2012 Bonds were issued (i) to fund the defeasance and redemption of the Community Facilities District No. 6 (4S Ranch) Special Tax Bonds Series 2002 (the "2002 Bonds"), (ii) to finance, either directly or indirectly, the planning, design and construction of certain school facilities, (iii) to pay the costs of issuing the 2012 Bonds, and (iv) to fund the amount necessary to increase the amount on deposit in the Reserve Fund to the Reserve Requirement applicable upon issuance of the 2012 Bonds. Special Tax Bonds, Series 2015. The 2015 Special Tax Refunding Bonds ("2015 Bonds") were issued in the amount of $39,065,000 on June 4, 2015. The 2015 Bonds were issued to fully redeem the Series 2005 Special Tax Bonds, originally issued in the amount of $44,305,000 on November 22, 2005, and the Series 2010 Special Tax Bonds, originally issued in the amount of $5,775,000 on October 27, 2010. Information for the 2015 Bonds are included in the report for the Special Tax Revenue Refunding Bonds, Series 2015B of the Authority. Special Tax Bonds, Series 2016. The 2016 Bonds were issued in the amount of $29,635,000.00 on November 30, 2016. The 2016 Bonds were issued to (i) refund and defease the outstanding Poway Unified School District Community Facilities District No. 6 (4S Ranch) Special Tax Bonds, Series 2007 (the 2007 Bonds ), and (ii) pay the costs of issuing the 2016 Bonds, including the premiums for a municipal bond insurance policy and debt service reserve insurance policy. The Bonds are limited obligations of CFD No. 6 and are payable solely from revenues of the "Net Taxes" which is defined as Special Taxes collected within CFD No. 6 less the Administrative Expense Requirement. The Bonds are not a debt of the School District, the State of California, or any of its political subdivisions. The information below summarizes information required by the Disclosure Agreements. POWAY UNIFIED SCHOOL DISTRICT PAGE 3 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012 AND SERIES 2016 JANUARY 31, 2018

A. Principal Amount of Bonds Outstanding The outstanding principal amount of the Bonds and any parity bonds, as of January 1, 2018, is shown in the table below. The debt service schedule for the Bonds is included as Exhibit A. Principal Amount of Bonds Outstanding Principal Amount Bonds Outstanding 2012 Bonds $33,720,000.00 2015 Bonds $36,935,000.00 2016 Bonds $28,610,000.00 Total $99,265,000.00 B. Fund and Account Balances The balance in each fund and account of the Bonds and 2015 Bonds, as of January 1, 2018, is listed in the table below. Fund and Account Balances Funds and Accounts Amount 2016 Cost of Issuance $19,545.83 2016 Refunding Escrow $0.00 2016 Reserve Fund $0.00 Administrative Expense Fund $39,061.13 Interest Account $19,732.61 Principal Account $210,353.07 Redemption Fund $72,739.31 Reserve Fund $3,310,565.24 Special Tax Fund $1,455,581.35 Total $5,127,578.54 The balances of all other funds and accounts referenced in the Bond Indentures and/or the respective Fiscal Agent Agreements are $0.00 and/or have been closed. POWAY UNIFIED SCHOOL DISTRICT PAGE 4 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012 AND SERIES 2016 JANUARY 31, 2018

C. Reserve Requirement As of January 1, 2018, the Reserve Requirement for the 2012 Bonds was $3,305,000.00. The 2012 Bond Reserve Requirement was satisfied by a cash amount in the amount of $3,310,565.24 in the Reserve Fund, therefore, the Reserve Requirement was satisfied as of this date. As of January 1, 2018, the Reserve Requirement for the 2016 Bonds $2,834,212.50; The 2016 Bonds Reserve Requirement was satisfied by surety policy, therefore, the Reserve Requirements was satisfied as of this date. D. Status of Projects 2002 Special Tax Bonds. Construction proceeds generated from the issuance of the 2002 Special Tax Bonds were used to construct additional seats at Stone Ranch Elementary School. The last payment from bond proceeds occurred in 2005. 2005 Special Tax Bonds. Construction proceeds generated from the issuance of the 2005 Special Tax Bonds were used to construct additional seats at Stone Ranch Elementary School and Monterey Ridge Elementary School. The last payment from bond proceeds occurred in August 2007. 2007 Special Tax Bonds. Construction proceeds generated from the issuance of the 2007 Special Tax Bonds were used to construct additional seats at: Monterey Ridge Elementary School, Oak Valley Middle School and Del Norte High School. The last payment from bond proceeds occurred in March 2009. 2010 Special Tax Bonds. Construction proceeds generated from the issuance of the 2010 Special Tax Bonds were used to construct additional middle school and elementary school seats for the Design 39 Campus. The last payment from bond proceeds occurred in May 2013. 2012 Special Tax Bonds. Construction proceeds generated from the issuance of the 2012 Special Tax Bonds were used to construct additional middle school and elementary school seats for the Design 39 Campus. The last payment from bond proceeds occurred in February 2014. POWAY UNIFIED SCHOOL DISTRICT PAGE 5 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012 AND SERIES 2016 JANUARY 31, 2018

2015 Special Tax Bonds. There were no construction process generated from the issuance ofthe 2015 Special Tax Bonds. The proceeds were used to refund the 2005 Bonds and the 2010 Bonds. Special Tax Refunding Bonds, Series 2016. There were no construction process generated from the issuance of the 2016 Bonds. The proceeds were used to refund the 2007 Bonds. POWAY UNIFIED SCHOOL DISTRICT PAGE 6 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012 AND SERIES 2016 JANUARY 31, 2018

IV. SPECIAL TAXES CFD No. 6 has covenanted to annually levy the Special Tax in accordance with the Rate and Method of Apportionment ("RMA") so long as the Bonds and parity bonds are outstanding. The items below summarize information required by the Disclosure Agreements. A. Changes to the Rate and Method of Apportionment There has been no change to the RMA since the date of the Official Statement. A copy of the RMA has been included as Exhibit B. B. Prepayments A summary of the Assessor Parcel Numbers pledged to the Bonds that have prepaid their Special Tax Obligations since the date of the Official Statement has been included in Exhibit C. C. Special Tax Budget A summary of the Fiscal Year 2017/2018 Special Tax budget is outlined below. Special Tax Budget FY 2017/2018 Obligations $9,968,362.38 Interest Payment Due March 1, 2018 $2,376,231.25 Interest Payment Due September 1, 2018 $2,376,231.25 Principal Payment Due September 1, 2018 $2,570,000.00 Administrative Expense Budget for Fiscal Year 2017/2018 $53,834.73 Anticipated Special Tax Delinquencies (0.72%) $72,094.15 Transfer to the CFD No. 6 Available Special Tax Fund of the Joint $2,519,971.00 Acquisition Agreement Minimum Annual Special Tax Requirement $9,968,362.38 POWAY UNIFIED SCHOOL DISTRICT PAGE 7 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012 AND SERIES 2016 JANUARY 31, 2018

D. Debt Service Coverage At the time the Bonds were sold, CFD No. 6 represented that, the amount of Net Taxes that may be levied on the parcels within CFD No. 6, if levied in accordance with the RMA, would annually yield revenue in an amount not less than 1.10 times the annual debt service on the Bonds and parity bonds. In Fiscal Year 2017/2018 the amount of Net Taxes yields 135.59% of the of the annual debt service on the Bonds and 2015 Bonds. An Annual Debt Service Coverage Summary Table has been included as Exhibit D. E. Special Tax Levy A summary of the Fiscal Year 2016/2017 Special Tax Levy as well as collections and delinquencies is listed in the following table. Tax Class (Land Use) Summary of Fiscal Year 2016/2017 Special Tax Levy Number of Units/Acres Average Annual Special Tax Rate [1] Total Annual Special Taxes Total Annual Collections Total Amount Delinquent Delinquency Rate Tax Class 1 (Detached) 2,988 Units $2,933.54 per Unit $8,765,417.86 $8,711,176.41 $54,241.45 0.62% Tax Class 2 (Attached) 763 Units $1,351.90 per Unit $1,031,501.54 $1,021,500.55 $10,000.99 0.97% Tax Class A (Affordable) 120 Units $0.00 per Unit $0.00 $0.00 $0.00 NA Developed Property 3,871 Units NA $9,796,919.40 $9,732,676.96 $64,242.44 0.66% Undeveloped Property 0.00 Acres $0.00 per Acre $0.00 $0.00 $0.00 NA Total $9,796,919.40 $9,732,676.96 $64,242.44 0.66% [1] The average Annual Special Tax rate is the average of all the Special Tax rates in each Special Tax Class, therefore they may not reflect the actual Assigned Annual Special Tax rate for each parcel in each Special Tax Class. The Maximum Special Tax rate ranges from $1,327.42 to $3,471.08 per unit/parcel. A summary of the Fiscal Year 2017/2018 Special Tax levy is listed in the following table. Tax Class (Land Use) Summary of Fisccal Year 2017/2018 Special Tax Levy Number of Units/Acres Average Annual Special Tax Rate [1] Total Annual Special Taxes Tax Class 1 (Detached) 2,980 Units $2,992.03 per Unit $8,916,235.90 Tax Class 2 (Attached) 763 Units $1,378.93 per Unit $1,052,126.48 Tax Class A (Affordable) 120 Units $0.00 per Unit $0.00 Developed Property 3,863 Units NA $9,968,362.38 Undeveloped Property 0.00 Acres $0.00 per Acre $0.00 Total $9,968,362.38 [1] The average Annual Special Tax rate is the average of all the Special Tax rates in each Special Tax Class, therefore they may not reflect the actual Assigned Annual Special Tax rate for each parcel in a given Special Tax Class. POWAY UNIFIED SCHOOL DISTRICT PAGE 8 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012AND SERIES 2016 JANUARY 31, 2018

Fiscal Year F. Major Taxpayers "Major Taxpayers" are those property owners responsible for more than five percent (5.00%) of the Special Tax levy. There are no property owners responsible for more than five percent (5.00%) of the Special Taxes levied in Fiscal Year 2017/2018. G. Special Tax Delinquencies Parcels Levied Historical Special Tax delinquencies within CFD No. 6 are shown in the table below. Aggregate Special Tax Total Annual Special Taxes Collected Historical Special Tax Delinquencies Subject Fiscal Year [1] June 30, 2017 [2] Fiscal Year Fiscal Year Remaining Parcels Amount Delinquency Parcels Amount Delinquent Delinquent Rate Delinquent Delinquent Remaining Delinquency Rate 2005/2006 1624 $3,603,560.90 $3,520,216.75 57 $83,344.15 2.31% 0 $0.00 0.00% 2006/2007 2455 $5,256,325.64 $5,111,273.68 91 $145,051.96 2.76% 0 $0.00 0.00% 2007/2008 3152 $6,652,933.90 $6,371,257.89 172 $281,676.01 4.23% 0 $0.00 0.00% 2008/2009 3380 $7,412,148.40 $7,145,058.61 155 $267,089.79 3.60% 0 $0.00 0.00% 2009/2010 3380 $7,559,391.32 $7,352,168.38 110 $207,222.94 2.74% 0 $0.00 0.00% 2010/2011 3543 $8,073,732.82 $7,993,414.69 46 $80,318.13 0.99% 0 $0.00 0.00% 2011/2012 3645 $8,543,913.36 $8,458,757.35 58 $85,156.01 1.00% 0 $0.00 0.00% 2012/2013 3718 $8,940,185.46 $8,887,824.27 32 $52,361.19 0.59% 1 $2,537.76 0.03% 2013/2014 3769 $9,283,927.74 $9,242,485.31 31 $41,442.43 0.45% 3 $6,427.88 0.07% 2014/2015 3760 $9,443,433.30 $9,368,845.47 47 $74,587.83 0.79% 2 $3,916.14 0.04% 2015/2016 3755 $9,616,765.32 $9,541,209.43 48 $75,555.89 0.79% 47 $72,401.73 0.75% 2016/2017 3751 $9,796,919.40 $9,732,676.96 42 $64,242.44 0.66% 42 $64,242.44 0.66% [1] As of June 30th of the applicable Fiscal Year. [2] Section 4 (b) of each of the Disclosure Agreement requires delinquency information as of July 1st (2016 Bonds) and August 15th (2012 Bonds). However, due to the availability of tax information from the County of San Diego delinquencies are as of June 30 th. There is no delinquent taxpayer obligated for greater than five percent (5.00%) of the annual Special Tax levy for Fiscal Year 2016/2017. H. Special Tax Foreclosures CFD No. 6 has covenanted that it will commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in the event (i) any single parcel has aggregate delinquent Special Taxes in excess of $5,000 or (ii) a property owner of multiple parcels has delinquent Special Taxes in excess of $10,000 by POWAY UNIFIED SCHOOL DISTRICT PAGE 9 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012AND SERIES 2016 JANUARY 31, 2018

the August 30 th following the close of each Fiscal Year in which such Special Taxes were due and will commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the August 30 th following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Taxes levied. After reviewing the level of delinquencies within CFD No. 6 as of June 1, 2017, it was determined that CFD No. 6 was not required to initiate foreclosure proceedings for Fiscal Year 2016/2017. Below is a table summarizing all outstanding forcolosures within CFD No. 6. CFD No. 6 Special Tax Foreclosures APN Fiscal Year Amount [1] Status 678-502-08-10 2012/2013 $2,537.76 Unresolved 678-502-08-10 2013/2014 $2,588.52 Unresolved 678-502-08-10 2014/2015 $2,640.28 Unresolved 678-502-08-10 2015/2016 $2,693.10 Unresolved [1] Amount does not include interest, penalties and attorney fees. I. Status of Improvement Areas The following section outlines the status of the Improvement Areas ("IAs") formed by the School District to finance infrastructure improvements within CFD No. 6. POWAY UNIFIED SCHOOL DISTRICT PAGE 10 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012AND SERIES 2016 JANUARY 31, 2018

Improvement Area A of CFD No. 6 Bond Authorization and Use of Bond Proceeds Bond Issuance Issuance Date Use of Proceeds Amount Original Bond Authorization $18,000,000.00 Construct (i) School Facility Improvements at Rancho Bernardo High School; and (ii) various public IA A of CFD No. 6 infrastructure improvements to be owned 2002 Special Tax December 19, 2002 $18,000,000.00 and operated by the City of Poway, the Bonds County of San Diego, the Olivenhain Municipal Water District and the Rancho Santa Fe Fire Protection District. IA A of CFD No. 6, Special Tax Refund the outstanding 2002 Special Tax November 3, 2011 $0.00 Refunding Bonds, Bonds of IA A of CFD No. 6 Series 2011 Remaining Bond Authorization $0.00 POWAY UNIFIED SCHOOL DISTRICT PAGE 11 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012AND SERIES 2016 JANUARY 31, 2018

Improvement Area B of CFD No. 6 Bond Authorization and Use of Bond Proceeds Bond Issuance Issuance Date Use of Proceeds Amount Original Bond Authorization $30,000,000.00 Finance the acquisition and construction of improvements including: (i) a pump station, water transmission pipeline, potable water storage tanks, pipelines, and a sewer treatment owned by Olivenhain Municipal Water District IA B of CFD No. 6, (ii) improvements to Camino San 2005 Special Tax November 22, 2005 $30,000,000.00 Bernardo, Dove Canyon Road, and Bonds Bernardo Center, community parks, and a public library owned by the County of San Diego, and (iii) a fire station and improvements to Carmel Valley Road and Bernardo Center/Camino Del Norte to be owned by the City of San Diego. IA B of CFD No. 6, Special Tax Revenue Refund the outstanding 2005 Special Tax June 4, 2015 $0.00 Refunding Bonds, Bonds of IA B of CFD No. 6. Series 2015 Remaining Bond Authorization $0.00 POWAY UNIFIED SCHOOL DISTRICT PAGE 12 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012AND SERIES 2016 JANUARY 31, 2018

Improvement Area C of CFD No. 6 Bond Authorization and Use of Bond Proceeds Bond Issuance Issuance Date Use of Proceeds Amount Original Bond Authorization $14,000,000.00 Finance the acquisition and construction of infrastructure IA C of CFD No. 6, 2012 Special Tax Bonds September 20, 2012 improvements including improvements to Camino San Bernardo, Dove Canyon Road, and Bernardo Center Drive to be owned by the City of San Diego. $9,470,000.00 IA C of CFD No. 6, Refund the outstanding 2012 Special Special Tax Refunding June 9, 2016 Tax Bonds of IA C of CFD No. 6. Bonds, Series 2016 $0.00 Remaining Bond Authorization $4,530,000.00 POWAY UNIFIED SCHOOL DISTRICT PAGE 13 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012AND SERIES 2016 JANUARY 31, 2018

V. ASSESSED VALUES AND LAND SECURED BONDED INDEBTEDNESS The assessed values and direct and overlapping land secured bonded indebtedness on individual parcels vary among parcels within CFD No. 6. The value of and debt burden on individual parcels is significant because in the event of a delinquency in the payment of Special Taxes CFD No. 6 may foreclose only against delinquent parcels. The items below summarize information required by the Disclosure Agreements. A. Assessed Value Summary Tax Class (Land Use) Improved A summary of the assessed value of the property within of CFD No. 6, distinguishing between the assessed value of improved parcels and unimproved parcels, is shown in the table below. Parcels Assessed Value Summary Assessed Value Land Assessed Value Improvement Assessed Value Other Assessed Value Total [1] Tax Class 1 (Detached) 2,979 $970,776,386.00 $1,404,807,102.00 $0.00 $2,375,583,488.00 Tax Class 2 (Attached) 763 $173,717,806.00 $162,469,673.00 $0.00 $336,187,479.00 Tax Class U (Undeveloped) 0 $0.00 $0.00 $0.00 $0.00 Subtotal Improved 3,742 $1,144,494,192.00 $1,567,276,775.00 $0.00 $2,711,770,967.00 Unimproved Tax Class 1 (Detached) 0 $0.00 $0.00 $0.00 $0.00 Tax Class 2 (Attached) 0 $0.00 $0.00 $0.00 $0.00 Tax Class U (Undeveloped) 0 $0.00 $0.00 $0.00 $0.00 Subtotal Unimproved 0 $0.00 $0.00 $0.00 $0.00 Subtotal Taxable 3,742 $1,144,494,192.00 $1,567,276,775.00 $0.00 $2,711,770,967.00 Tax Class A (Affordable) 1 $4,337,978.00 $6,235,596.00 $0.00 $10,573,574.00 Tax Class C (Commercial) 22 $43,260,576.00 $94,340,440.00 $0.00 $137,601,016.00 Tax Class E (Exempt) 150 $14,042,814.00 $20,226,945.00 $0.00 $34,269,759.00 Tax Class P (Prepaid) 89 $84,029,712.00 $142,368,564.00 $0.00 $226,398,276.00 Total 4,004 $1,290,165,272.00 $1,830,448,320.00 $0.00 $3,120,613,592.00 [1] Total Assessed Value as reported on the Fiscal Year 2017/2018 equalized tax roll of the County of San Diego. POWAY UNIFIED SCHOOL DISTRICT PAGE 14 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012AND SERIES 2016 JANUARY 31, 2018

B. Overlapping Debt Report Certain overlapping local agencies provide public services and assess property taxes, assessments, special taxes, and other charges on the property in CFD No. 6. Many of these local agencies have outstanding debt. The direct and overlapping debt affecting the property in CFD No. 6 as of the date of this Report is outlined in Exhibit F. Exhibit F was prepared by National Tax Data, Inc., and has not been reviewed for completeness or accuracy by the School District or Cooperative Startegies. Additional indebtedness could be authorized by the School District or other public agencies at any time. C. Assessed Values and Value-to-Lien Ratios A summary of the assessed values and value-to-lien ratios by neighborhood and land use for all parcels within CFD No. 6 is shown in Exhibit E. POWAY UNIFIED SCHOOL DISTRICT PAGE 15 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012AND SERIES 2016 JANUARY 31, 2018

VI. REPORTS AND ADDITIONAL INFORMATION Below is a summary of various other reports and information regarding the Bonds which are required by the Disclosure Agreements. A. Report to the California Debt and Investment Advisory Commission Copies of the reports prepared and filed with the California Debt and Investment Advisory Commission pursuant to Section 53359.5(b) of the Act for Fiscal Year 2016/2017 are included as Exhibit G. B. Listed Events Pursuant to the Disclosure Agreement for the 2012 Bonds, CFD No. 6 shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the 2012 Bonds, if material: (i) Principal and interest payment delinquencies; (ii) Non-payment related defaults, if material; (iii) Unscheduled draws on debt service reserves reflecting financial difficulties; (iv) Unscheduled draws on credit enhancements reflecting financial difficulties; (v) Substitution of credit or liquidity providers, or their failure to perform; (vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security or other material events affecting the tax status of the security; (vii) Modifications to rights of security holders, if material; (viii) Bond calls, if material, and tender offers; (ix) Defeasances; (x) Release, substitution, or sale of property securing repayment of the securities, if material; POWAY UNIFIED SCHOOL DISTRICT PAGE 16 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012AND SERIES 2016 JANUARY 31, 2018

(xi) Rating changes; (xii) Bankruptcy, insolvency, receivership or similar event of the obligated person; (xiii) The consummation of a merger, consolidation or acquisition involving an obligated person or sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material. Pursuant to the Disclosure Agreement for the 2016 Bonds, CFD No. 6 shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the 2016 Bonds, if material: (i) Principal and interest payment delinquencies; (ii) Non-payment related defaults, if material; (iii) Unscheduled draws on debt service reserves (including, e.g., the Reserve Fund) reflecting financial difficulties; (iv) Unscheduled draws on credit enhancements reflecting financial difficulties; (v) Substitution of credit or liquidity providers, or their failure to perform; (vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; (vii) Modifications to rights of security holders, if material; (viii) Bond calls, if material, and tender offers; (ix) Defeasances; (x) Release, substitution, or sale of property securing repayment of the securities, if material; (xi) Rating changes; (xii) Bankruptcy, insolvency, receivership or similar event of the obligated person; POWAY UNIFIED SCHOOL DISTRICT PAGE 17 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012AND SERIES 2016 JANUARY 31, 2018

(xiii) The consummation of a merger, consolidation or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material. None of these events occurred in Fiscal Year 2016/2017. C. Additional Information In addition to any of the information expressly required to be provided by the Disclosure Agreements, the Authority shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading. After careful review it has been determined that there is no such information for Fiscal Year 2016/2017. S:\Clients\Poway Unified SD\SADM\CFDs\CFD No. 6\FY1617\Reports\Continuing Disclosure\ContDisc_CFD6_Fn.PDF POWAY UNIFIED SCHOOL DISTRICT PAGE 18 ANNUAL REPORT FOR CFD NO. 6 SERIES 2012AND SERIES 2016 JANUARY 31, 2018

EXHIBIT A Debt Service Schedule

Debt Service Schedule Poway Unified School District Community Facilities District No. 6 Special Tax Bonds, Series 2012 Maturity Date (September 1) Principal Amount/ Sinking Fund Payment Interest Total Debt Service 2018 $1,110,000.00 $1,674,900.00 $2,784,900.00 2019 $1,155,000.00 $1,630,500.00 $2,785,500.00 2020 $1,240,000.00 $1,572,750.00 $2,812,750.00 2021 $1,380,000.00 $1,510,750.00 $2,890,750.00 2022 $1,475,000.00 $1,441,750.00 $2,916,750.00 2023 $1,590,000.00 $1,368,000.00 $2,958,000.00 2024 $1,700,000.00 $1,288,500.00 $2,988,500.00 2025 $1,825,000.00 $1,203,500.00 $3,028,500.00 2026 $1,960,000.00 $1,112,250.00 $3,072,250.00 2027 $2,090,000.00 $1,014,250.00 $3,104,250.00 2028 $2,235,000.00 $909,750.00 $3,144,750.00 2029 $2,395,000.00 $798,000.00 $3,193,000.00 2030 $2,545,000.00 $678,250.00 $3,223,250.00 2031 $2,720,000.00 $551,000.00 $3,271,000.00 2032 $2,890,000.00 $415,000.00 $3,305,000.00 2033 $2,600,000.00 $270,500.00 $2,870,500.00 2034 $950,000.00 $140,500.00 $1,090,500.00 2035 $880,000.00 $93,000.00 $973,000.00 2036 $980,000.00 $49,000.00 $1,029,000.00 A-1

Debt Service Schedule Poway Unified School District Community Facilities District No. 6 Special Tax Refunding Bonds, Series 2016 Maturity Date (September 1) Principal Amount/ Sinking Fund Payment Interest Total Debt Service 2018 $770,000.00 $1,254,862.50 $2,024,862.50 2019 $835,000.00 $1,231,762.50 $2,066,762.50 2020 $900,000.00 $1,206,712.50 $2,106,712.50 2021 $970,000.00 $1,179,712.50 $2,149,712.50 2022 $1,040,000.00 $1,150,612.50 $2,190,612.50 2023 $1,130,000.00 $1,109,012.50 $2,239,012.50 2024 $1,220,000.00 $1,063,812.50 $2,283,812.50 2025 $1,325,000.00 $1,002,812.50 $2,327,812.50 2026 $1,440,000.00 $936,562.50 $2,376,562.50 2027 $1,560,000.00 $864,562.50 $2,424,562.50 2028 $1,685,000.00 $786,562.50 $2,471,562.50 2029 $1,820,000.00 $702,312.50 $2,522,312.50 2030 $1,920,000.00 $647,712.50 $2,567,712.50 2031 $2,070,000.00 $551,712.50 $2,621,712.50 2032 $2,225,000.00 $448,212.50 $2,673,212.50 2033 $2,390,000.00 $336,962.50 $2,726,962.50 2034 $2,565,000.00 $217,462.50 $2,782,462.50 2035 $2,745,000.00 $89,212.50 $2,834,212.50 A-2

EXHIBIT B Rate and Method of Apportionment

RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR COMMUNITIES FACILITIES DISTRICT NO. 6 OF THE POWAY UNIFIED SCHOOL DISTRICT A One-Time Special Tax and an Annual Special Tax shall be levied on and collected in Community Facilities District No. 6 ("CFD No. 6") of the Poway Unified School District (the "School District") in amounts to be determined through the application of this Rate and Method of Apportionment of the Special Tax ("RMA"). All of the real property in CFD No. 6, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided. SECTION A DEFINITIONS The terms hereinafter set forth have the following meanings: "Acreage" means the land area of an Assessor s Parcel, exclusive of land area identified as open space on a Final Map and land area encumbered with public or utility easements making impractical such land area use for purposes other than those set forth in the easements, including recorded easements for conservation or open space purposes, as reasonably calculated or determined by the Assistant Superintendent based on the applicable Assessor Parcel Map, Final Map, parcel map, condominium plan, or other recorded County parcel map or applicable data. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means any ordinary and necessary expense incurred by the School District on behalf of the CFD related to the determination of the amount of the levy of special taxes (e.g., administration consultant, fiscal agent, arbitrage consultant, etc.), the collection of special taxes including the expenses of collecting delinquencies, the administration of Bonds, the cost of complying with disclosure requirements of applicable federal and state security laws and the Act, and the costs of the payment of the appropriate allocable share of salaries and benefits of any School District employee whose duties are directly related to the administration of the CFD. "Affordable Unit" means one of not more than 150 Units that (i) is located or shall be located within a building in which each of the individual Units has or shall have at least one common wall with another Unit and (ii) is subject to affordable housing restrictions under any applicable law. The first 150 Units which meet the criteria set forth in (i) and (ii) of the preceding sentence and for which Building Permits are issued will be designated permanently and irrevocably as Affordable Units. "Annual Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor s Parcel of Taxable Property. "Assessor s Parcel" means a lot or parcel of land designated on an Assessor s Parcel Map with an assigned Assessor s Parcel Number. Page 1 of 13 B-1

"Assessor s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor s Parcel Number. "Assessor s Parcel Number" means that number assigned to an Assessor s Parcel by the County Assessor for purposes of identification. "Assigned Annual Special Tax" means (i) for Developed Property, the special tax of that name calculated as described in Section E.1. below, or (ii) for Undeveloped Property, the special tax of that name calculated as described in Section E.2. below. "Assistant Superintendent" means the Assistant Superintendent, Business Support Services of the School District or his/her designee. "Attached Unit" means a Unit that (i) is located or shall be located within a building in which each of the individual Units has or shall have at least one common wall with another Unit, and (ii) is not an Affordable Unit. "Board" means the Board of Education of the School District or its designee. "Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof incurred by CFD No. 6 or the School District. "Building Square Footage" or "BSF" for any Residential Property means all of the square footage within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, detached accessory structure, or similar area, as defined in Section 65995 of the Government Code. "Building Permit" means a permit for construction of a residential or commercial/industrial structure. For purposes of this definition, "Building Permit" shall not include permits for construction or installation of utility improvements, retaining walls, parking structures or other such improvements not intended for human habitation or commercial/industrial use. "Calendar Year" means the period commencing on January 1 of any year and ending the following December 31. "CFD No. 6" means Community Facilities District No. 6 established by the School District under the Act. "Commercial/Industrial Property" means all Assessor's Parcels of Developed Property other than Residential Property and Exempt Property. "County" means the County of San Diego. "Detached Unit" means a Unit which is not an Affordable Unit or an Attached Unit. Page 2 of 13 B-2

"Developed Property" means all Assessor s Parcels in CFD No. 6 for which Building Permits for new construction were issued after the formation of CFD No. 6 and on or before January 1 of the prior Fiscal Year. "Exempt Property" means the property designated as being exempt from special taxes in Section J. "Facilities" means those school facilities (including land) and other facilities which the School District is authorized by law to construct, own or operate and which would service the properties within CFD No. 6. "Final Map" means a final tract map, parcel map, lot line adjustment, or functionally equivalent map or instrument that creates building sites, recorded in the County Office of the Recorder. "Fiscal Year" means the period commencing on July 1 of any year and ending the following June 30. "Gross Floor Area" or "GFA" means for Commercial/Industrial Property, the covered and enclosed space determined to be within the perimeter of a commercial or industrial structure, not including any storage areas incidental to the principal use of the development, garage, parking structure, unenclosed walkway, or utility or disposal area, as defined in Section 65995 of the Government Code. "Gross Prepayment Amount" for any Assessor s Parcel of Developed Property means that gross prepayment amount determined by reference to Table 2 and adjusted as set forth in Section G. "Index" means the Marshall & Swift Western Region Class D Wood Frame Index ("M&S Index"), and if the M&S Index ceases to be used by the State Allocation Board, a reasonably comparable index used by the State Allocation Board to estimate increases or decreases in school construction costs, or in the absence of such an index, the Engineering News Record, Construction Cost Index (Los Angeles Area) published by McGraw-Hill, Inc. "Land Use Class" means any of the classes of Developed Property, i.e., Commercial/Industrial Property, Exempt Property, and Residential Property. "Master Developer" means 4S Kelwood General Partnership, a California general partnership or any successor. "Maximum Special Tax" means the maximum special tax, determined in accordance with Section C, that can be levied by CFD No. 6 on any Assessor's Parcel in any Fiscal Year. "One-Time Special Tax" means the single payment special tax to be collected from the owner of an Assessor's Parcel of Undeveloped Property, pursuant to Section D below. "Partial Prepayment Amount" means the dollar amount required to prepay a portion of the Annual Special Tax obligation on any Assessor s Parcel, determined pursuant to Section H. "Prepayment Amount" means the dollar amount required to prepay all of the Annual Special Tax obligation on any Assessor s Parcel, determined pursuant to Section G. Page 3 of 13 B-3

"Prepayment Ratio" means, with respect to an Assessor's Parcel, for each series of Bonds, the ratio of (i) the Assigned Annual Special Tax or portion thereof applicable to the Assessor's Parcel at the time each such series of Bonds was issued and which was used in providing the minimum debt service coverage required to issue such series of Bonds, as reasonably determined by the Assistant Superintendent, to (ii) the sum of all the Assigned Annual Special Taxes used in providing the minimum debt service coverage required to issue such series of Bonds, as reasonably determined by the Assistant Superintendent. "Residential Property" means all Assessor s Parcels of Developed Property for which the Building Permit was issued for purposes of constructing a Unit(s). "Special Tax Requirement" means the amount required in any Fiscal Year to pay: (i) the regularly scheduled debt service payments on all Bonds which are due in the Calendar Year commencing during such Fiscal Year, assuming that principal is paid when due without acceleration or optional redemption, (ii) credit or liquidity fees on the Bonds, (iii) the cost of acquisition or construction of Facilities, (iv) Administrative Expenses, (v) the costs associated with the release of funds from an escrow account, (vi) any amount required to establish, maintain, or replenish any reserve funds and credit enhancement facilities established in association with the Bonds, (vii) lease payments for Facilities, and (vii) any other payments permitted by law. "Special Tax Requirement A" means, in Fiscal Years in which an elementary school located within or financed by CFD No. 6 is opened, the amount required to fund the Technology Budget, less any amount previously received by CFD No. 6 for such purpose from Master Developer. In Fiscal Years in which no elementary school located within or financed by CFD No. 6 is opened, the Special Tax Requirement A shall be $0. "Taxable Property" means all Assessor s Parcels within the boundaries of CFD No. 6 which are not exempt from the special tax pursuant to law or Section J below. "Technology Budget" means, for Fiscal Year 1997-98, $238,770 for each elementary school constructed in CFD No. 6. Each July 1, commencing July 1, 1998, the Technology Budget for each elementary school constructed in CFD No. 6 shall be increased or decreased by the annual percentage change in the Index. For purposes of this calculation, the annual percentage change in the Index shall be calculated for the twelve (12) months ending November 30 of the prior Fiscal Year. "Undeveloped Property" means all Assessor s Parcels in CFD No. 6 for which no Building Permit was issued after the formation of CFD No. 6 and on or before January l of the prior Fiscal Year. Page 4 of 13 B-4

"Undeveloped Special Tax Requirement" means the greater of (i) $0 or (ii) the amount required in any Fiscal Year to pay: (1) the regularly scheduled debt service payments on all Bonds which are due in the Calendar Year commencing during such Fiscal Year, assuming that principal is paid when due without acceleration or optional redemption, (2) credit or liquidity fees on the Bonds, (3) Administrative Expenses, and (4) any amount required to establish, maintain, or replenish any reserve funds and credit enhancement facilities established in association with the Bonds, less the sum of the amounts levied on Developed Property in Section F.1. "Unit" means each separate residential dwelling unit which comprises an independent facility capable of conveyance separate from adjacent residential dwelling units. Each Unit shall be classified as an Affordable Unit, an Attached Unit, or a Detached Unit. "Zone A" means the area within the boundaries of CFD No. 6 designated as Zone A on the map of the boundaries of CFD No. 6 most recently recorded in the Maps of Assessment and Community Facilities Districts in the Office of the Recorder of the County, which area is designated at the time of the formation of CFD No. 6 as Assessor's Parcel Numbers 678-030-06-00 and 678-050-09-00. SECTION B PROPERTY CLASSIFICATION For each Fiscal Year, beginning Fiscal Year 1997-98, each Assessor s Parcel in CFD No. 6 shall be classified as an Assessor s Parcel of Developed Property, Undeveloped Property or Exempt Property. 1. Developed Property SECTION C MAXIMUM SPECIAL TAX In any Fiscal Year the Maximum Special Tax for each Assessor s Parcel of Residential Property shall be the Assigned Annual Special Tax. In any Fiscal Year the Maximum Special Tax for each Assessor's Parcel of Commercial/Industrial Property shall be the amount of any portion of the One- Time Special Tax that is not collected at the issuance of a Building Permit, which amount may be levied on such Assessor's Parcel when classified as Developed Property in any following Fiscal Year. 2. Undeveloped Property In any Fiscal Year the Maximum Special Tax for each Assessor's Parcel of Undeveloped Property not located in Zone A shall be the sum of (i) the Assigned Annual Special Tax and (ii) the One- Time Special Tax. In any Fiscal Year the Maximum Special Tax for each Assessor's Parcel of Undeveloped Property located in Zone A shall be the sum of (i) the Assigned Annual Special Tax, (ii) the Zone A Assigned Annual Special Tax, and (iii) the One-Time Special Tax. Page 5 of 13 B-5

SECTION D ONE-TIME SPECIAL TAX A One-Time Special Tax shall be collected from the owner of each Assessor's Parcel of Undeveloped Property on the date a Building Permit is issued for such Assessor's Parcel. There shall be no One-Time Special Tax for Assessor's Parcels of Undeveloped Property for which the Building Permit is issued for the construction of a residential structure. The One-Time Special Tax for Calendar Year 1997 for Assessor's Parcels of Undeveloped Property for which the Building Permit is issued for the construction of a structure other than a residential structure shall be $0.30 per square foot of Gross Floor Area. On each January 1, commencing January 1, 1998, the amount of the One-Time Special Tax shall be increased by the greater of the annual percentage change in the Index or two percent (2.00%) of the amount in effect in the prior Calendar Year. The annual percent change in the Index shall be calculated for the twelve (12) months ending November 30 of the prior Calendar Year. 1. Developed Property SECTION E ASSIGNED ANNUAL SPECIAL TAX a. Assigned Annual Special Tax for New Developed Property The Assigned Annual Special Tax applicable to an Assessor's Parcel in the first Fiscal Year in which such Assessor's Parcel is classified as Developed Property shall be the amount determined by reference to Table 1 below, subject to adjustment as described below, as applicable. TABLE 1 ASSIGNED ANNUAL SPECIAL TAX FOR NEW DEVELOPED PROPERTY FOR FISCAL YEAR 1997-98 Land Use Class Unit Type Assigned Annual Special Tax 1997-98 Residential Property Detached Unit $1,770.00 per Unit Residential Property Attached Unit $782.88 per Unit Residential Property Affordable Unit $0.00 per Unit Commercial/Industrial Property NA $0.00 per GFA Page 6 of 13 B-6

Each July 1, commencing July 1, 1998, the Assigned Annual Special Tax applicable to an Assessor's Parcel in the first Fiscal Year in which such Assessor's Parcel is classified as Developed Property shall be increased by the greater of the annual percentage change in the Index or two percent (2.00%) of the amount in effect in the prior Fiscal Year. The annual percentage change in the Index shall be calculated for the twelve (12) months ending November 30 of the prior Calendar Year. b. Assigned Annual Special Tax for Existing Developed Property Each July 1, commencing the July 1 immediately following the Fiscal Year in which the Assessor's Parcel was first classified as Developed Property, the Assigned Annual Special Tax applicable to an Assessor's Parcel shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. 2. Undeveloped Property 1. Assigned Annual Special Tax The Assigned Annual Special Tax for Undeveloped Property shall be $1,000 per acre of Acreage in Fiscal Year 1997-98. On each July 1, commencing July 1, 1998, the Assigned Annual Special Tax shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. a. Zone A Assigned Annual Special Tax The Zone A Assigned Annual Special Tax for Undeveloped Property located in Zone A shall be $5,000 per acre of Acreage in Fiscal Year 1997-98. On each July 1, commencing July 1, 1998, the Zone A Assigned Annual Special Tax shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. SECTION F METHOD OF APPORTIONMENT OF THE ANNUAL SPECIAL TAX Commencing Fiscal Year 1997-98 and for each subsequent Fiscal Year, the Assistant Superintendent shall reasonably determine the Special Tax Requirement and the Undeveloped Special Tax Requirement. In addition, in any Fiscal Year in which an elementary school located within or financed by CFD No. 6 is opened, the Assistant Superintendent shall reasonably determine the Special Tax Requirement A. The Annual Special Tax shall be levied as follows: 1. Special Tax Requirement An Annual Special Tax shall be levied on each Assessor's Parcel of Developed Property in an amount equal to the Assigned Annual Special Tax applicable to each such Assessor's Parcel. Page 7 of 13 B-7