$495,000 AROMAS WATER DISTRICT ORCHARD …cdiacdocs.sto.ca.gov/2008-0120.pdfCOUNTY OF SAN BENITO $495,000 AROMAS WATER DISTRICT ORCHARD ACRES ASSESSMENT DISTRICT STATE OF CALIFORNIA

•

NEW ISSUE-BOOK-ENTRY-ONLY

•'i-01.20

NOT RATED

(See "CONCLUDING INFORMATION-No Rating on the Bonds; Secondary Market'' herein)

In the opmzon of Robert M Haight, Scotts Valley, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes, such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although for the purpose of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in determining certain income and earnings. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See "LEGAL MATTERs-Tax Exemption" herein.

COUNTY OF SAN BENITO

$495,000 AROMAS WATER DISTRICT

ORCHARD ACRES ASSESSMENT DISTRICT

STATE OF CALIFORNIA

2008 LIMITED OBLIGATION IMPROVEMENT BONDS, SERIES A (Bank Qualified)

Dated: Date of Delivery Due: September 2 as shown on the Inside Cover.

The cover page contains certain information for quick reference only, It is not a summary of the issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. Investment in the Bonds involves risks. See "BONDHOLDERS' RISKS~ herein for a discussion of special risk factors that should be considered in evaluating the investment quality of the Bonds.

The Orchard Acres Assessment District 2008 Limited Obligation Improvement Bonds, Series A (the "Bonds") are being issued by the Aromas Water District (the "District") pursuant to a Fiscal Agent Agreement, dated as of March l, 2008 (the "Fiscal Agent Agreement"), by and between the District and Union Bank of California, N.A., as fiscal agent (the "Fiscal Agent") to: (i) finance the construction costs of certain public water improvements serving property within Orchard Acres Assessment District (the "Assessment District"), (ii) pay costs related to the issuance of the Bonds, and (iii) make a deposit to a Reserve Fund.

The Bonds are being issued pursuant to provisions of the Improvement Bond Act of 1915, being Division 10 of the California Streets and Highways Code (the "Bond Law"). The Bonds are payable from assessments levied pursuant to the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code) (the "1913 Act"). See "SOURCES OF PAYMENT FOR THE BONDS" and "BONDHOLDERS' RISKS" herein. Interest on the Bonds is payable semiannually on March 2 and September 2 each year, commencing March 2, 2009 (each, an "Interest Payment Date"), until maturity or earlier redemption. The Bonds are subject to optional, special mandatory and mandatory sinking payment redemption as described herein. See "THE BONDS-Redemption" herein.

MATURITY SCHEDULE SHOWN ON INSIDE COVER

CROCKER

SECURITIES

The Bonds are offered when, as and if issued subject to the approval as to their legality by Robert M Haight, Scotts Valley, California, Bond/Disclosure Counsel and certain other conditions. Certain legal matters will be passed on for the District by the District Counsel. It is anticipated that the Bonds in book-entry form will be available for delivery through the facilities of The Depository Trust Company, New York, New York on or about March 13, 2008.

The date of this Official Statement is March 5, 2008 .

MATURITY SCHEDULE (Base CUSIPt 04266R)

Maturity Date Principal Interest Re-offering CUSIPt Sel!tember 2 Amount Rate Xi£!!! 04266R

2009 $5,000 4.100% 4.100% AA9 2010 $5,000 4.300% 4.300% AB7 2011 $5,000 4.500% 4.500% AC5 2012 $10,000 4.600% 4.700% AD3 2013 $10,000 4.800% 4.900% AEI 2014 $10,000 4.900% 5.000% AF8 2015 $10,000 5.000% 5.100% AG6 2016 $10,000 5.100% 5.300% AH4 2017 $10,000 5.300% 5.400% AJO 2018 $10,000 5.400% 5.600% AK7 2019 $\0,000 5.500% 5.700% AL5

$135,000, 5.900% Term Bond maturing September 2, 2028, Yield 6.200% CUSIPt 04266R AM3 $265,000, 6.100% Term Bond maturing September 2, 2038, Yield 6.250% CUSIPt 04266R ANI

t CUSIP® A registered trademark of the American Bankers Association. Copyright © 1999-2006 Standard & Poor's, a Division of The McGraw-Hill Companie%, Inc. All rights reserved. CUSIP® data herein is provided by Standard & Poor's CUSIP® Service Bureau and are provided for convenience of reference ()nly. None of the City, the Authority or the Underwriter takes any responsibility for the accuracy of such numbers.

AROMAS WATER DISTRICT BOARD OF DIRECTORS

Stuart Cardott, President Ernest Huggins, Vice-President

Marcus Dutra, Director Edward Lee Duggs, Director

Chad Mesirojf, Director

DISTRICT STAFF

Larry Cain, General Manager Vicki Morris, District Secretary

Utility Services Engineering, District Engineer Bosso Williams, District Counsel

PROFESSIONAL SERVICES

Bond/Disclosure Counsel Robert M. Haight

Scotts Valley, California

Underwriter Crocker Securities, LLC Walnut Creek, California

Financial Consultant Public Finance Resources Walnut Creek, California

Assessment Engineer Utility Services Engineering

Sand City, California

Fiscal Agent Union Bank of California, N.A.

San Francisco, California

GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT

Use of Official Statement. This Official Statement is submitted in connection with the offer and sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not to be construed as a contract with the purchasers of the Bonds.

Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the District in any press release and in any oral statement made with the approval of an authorized officer of the District or any other entity described or referenced herein, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "forecast," "expect," "intend" and similar expressions identify "forward-looking statements." Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur.

Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material.

Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the District to give any infonnation or to make any representations in connection with the offer or sale of the Bonds other than those contained herein and if given or made, such other information or representation must not be relied upon as having been authorized by the District, the Financial Consultant or the Underwriter. 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 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

Involvement of Underwriter. The Underwriter has submitted the following statement for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as a 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.

Information Subject to Change. The information and expressions of opinions herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District or any other entity described or referenced herein since the date hereof. All summaries of the documents referred to in this Official Statement 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.

Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effect transactions that stabilize or maintain the market price of the Bonds 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 the Bonds to certain dealers and others at prices lower than the . public offering prices set forth on the inside front cover page hereof and said public offering prices may be

changed from tirne to time by the Underwriter. THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXCEPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

Figure 1: Orchard Acres Location Map

Regional Location Orchard Acres Subdivision _...,...,.. ____ ........,~

' ... ~-.. ··- -i-- ---.. ···-··· i, i

r;;' .r

[THIS PAGE INTENTIONALLY LEFT BLANK]

TABLE OF CONTENTS

INTRODUCTION ....................................... : .................................................................................................... 1

THE ISSUER ........................................................................... .-......................................................................... 1

THE ASSESSMENT DISTRICT ......................................... : ................................................................................. 1

PURPOSE .................................................................................. : ...................................................................... 3

PROPERTY VALUES ........................................................................................................................................ 3

TAX EXEMPTION ............................................................................................................................................ 3

PROFESSIONALS INVOLVED IN THE OFFERING ............................................................................................... 3 OFFERING OF THE BONDS ............................................................................................................................... 4

INFORMATION CONCERNING THIS OFFICIAL STATEMENT ............................................................................. 4

THE BONDS .................................................................................................................................................... 5

GENERAL PROVISIONS .................................................................................................................................... 5

TAX COVENANTS; BANK QUALIFIED ............................................................................................................. 6

BOOK-ENTRY-ONLY SYSTEM ........................................................................................................................ 6

REDEMPTION .................................................................................................................................................. 6 SCHEDULED DEBT SERVICE ON THE BONDS .................................................................................................. 9

THE FINANCING PLAN ............................................................................................................................. 10

ESTIMATED USES OF FUNDS ......................................................................................................................... 11

ESTIMATED IMPROVEMENT COSTS .............................................................................................................. I 1

THE ASSESSMENT DISTRICT .................................................................................................................. ll

ASSESSED VALUES ....................................................................................................................................... II

ASSESSED VALUE TO ASSESSMENT LIEN RATIOS ........................................................................................ 12

DELINQUENCIES; NO "TEETER PLAN" ......................................................................................................... 14

DIRECT AND OVERLAPPING DEBT ................................................................................................................ 14

SOURCES OF PAYMENT FOR THE BONDS .......................................................................................... l6

REPAYMENTOFTHEBONDS ......................................................................................................................... I6

COVENANT TO COMMENCE FORECLOSURE PROCEEDINGS .......................................................................... 16

RESERVEFVND ............................................................................................................................................. 18

BONDHOLDERS' RISKS ............................................................................................................................ 19

GENERAL ...................................................................................................................................................... I9

FORECLOSURE AND SALE PROCEEDINGS ..................................................................................................... 19

DEPLETION OF RESERVE FUND .................................................................................................................... 20

VALUATION OF PROPERTY IN THE ASSESSMENT DISTRICT ......................................................................... 21

FACTORS AfFECTING PARCEL VALUE AND AGGREGATE VA LUES .............................................................. 21

PREPAYMENT OF ASSESSMENTS ................................................................................................................... 22

OTHER POSSIBLE CLAIMS UPON THE VALUE OF AN ASSESSMENT PARCEL ................................................ 23

DIRECT AND OVERLAPPING INDEBTEDNESS ................................................................................................ 23

(i)

BANKRUPTCY PROCEEDINGS ....................................................................................................................... 23 PAYMENT OF THE ASSESSMENT NOT A PERSONAL OBLIGATION ................................................................ 24

NO DISTRICTOBLIGAT!ONTO PAY DEBT SERVICE ..................................................................................... 24

LOSS OFT AX EXEMPTION ............................................................................................................................ 24 NO ACCELERATION PROVISION ................................................................................................................... 24

PROPOSITION 218; POSSIBLE FUTURE BALLOT INITIATIVES ........................................................................ 25

LEGAL MATTERS ....................................................................................................................................... 26

ENFORCEABILITY OF REMEDIES ................................................................................................................... 26

. APPROVAL OF LEGAL PROCEEDINGS ........................................................................................................... 26

TAX EXEMPTION .......................................................................................................................................... 26

ABSENCE OF LITIGATION ............................................................................................................................. 27

CONCLUDING INFORMATION ............................................................................................................... 27

NO RATING ON THE BONDS; SECONDARY MARKET .................................................................................... 27

UNDERWRITING ............................................................................................................................................ 27

THE DISTRICT ENGINEER ............................................................................................................................. 27

ADDITIONAL INFORMATION ......................................................................................................................... 28 REFERENCES ................................................................................................................................................. 28

EXECUTION ................................................................................................................................................... 28

APPENDIX A SUMMARY OF FISCAL AGENT AGREEMENT ....................................................... A-1

APPENDIX B FORM OF BOND COUNSEL OPINION ....................................................................... B-1

APPENDIX C ASSESSMENT PARCEL LISTING ................................................................................ C-1

APPENDIX D DTC AND THE BOOK-ENTRY-ONLY SYSTEM ....................................................... D-1

APPENDIX E SUPPLEMENTAL INFORMATION THE AROMAS WATER DISTRICT ............. E-1

APPENDIX F FAIR MARKET ESTIMATE OF VALUE OF ROBERT E. CLARK REALTY ...... F-1

(ii)

OFFICIAL STATEMENT

$495,000 AROMAS WATER DISTRICT

ORCHARD ACRES ASSESSMENT DISTRICT 2008 LIMITED OBLIGATION IMPROVEMENT BONDS, SERIES A

This Official Statement which includes the cover page and appendices (the "Official Statement'~ is provided to furnish certain information concerning the sale of the Aromas Water District, Orchard Acres Assessment District 2008 Limited Obligation Improvement Bonds, Series A (the "Bonds'~, in the aggregate principal amount of$495,000.

INTRODUCTION

The description and summaries of various documents hereinafter set forth do not purport to be comprehensive or definitive, and reference is made to each document for the complete details of all terms and conditions. All statements herein are qualified in their entirety by reference to each document. All capitalized terms used in this Official Statement and not otherwise defined herein have the same meaning as in the Fiscal Agent Agreement (defined below).

The Issuer

The Aromas Water District (the "District") was incorporated in 1959 pursuant to the County Water District Act as set forth in the Water Code of the State of California. It is located sixteen (16) miles north of the city of Salinas, California and sixty-five (65) miles south of San Francisco, California.

The main function of the District is to supply domestic water from its facilities, which has 833 connections as of January I, 2008.

Under the District's authority over water, property owners within the Orchard Acres Assessment District (the "Assessment District") petitioned the District to extend its water mains to the Assessment District and to maintain the water system as a part of the District's maintained water system.

The Assessment District

The land within the Orchard Acres Assessment District (the "Assessment District") is comprised of II parcels of land in an unincorporated area of the County of San Benito known as Orchard Acres. Of the II parcels within the Assessment District, 6 parcels are developed with residential homes and the remaining 5 parcels are unimproved. Assessments on 3 parcels have been prepaid in full. Accordingly, the Bonds will be secured by 8 parcels; 5 of which are developed and 3 of which are undeveloped. (See "APPENDIX C-ASSESSMENT PARCEL LISTING" herein.)

Presently, the Assessment District is provided with water service by a small mutual water system, the Orchard Acres Mutual Water Association ("OAMWA"), which relies on two groundwater wells and a spring for water supply. The OAMWA has been identified by the California Department of Health

OFFICIAL STATEMENT AROMAS WATER DISTRICT

Page I

Services ("DHS") as having "significant water quality and quantity problems." The local residents have petitioned the District to provide water service to the Assessment District.

The purpose of the proposed project is to connect the II parcels to the District's municipal water supply system. The OAMW A has been under a "boil water" order from the DHS for the past several years which requires that domestic potable water has been trucked in at various times. This condition also poses a fire safety concern. The proposed project would provide a safe and dependable water supply, improve firefighting capabilities, and eliminate the current need to truck potable water to the Assessment District.

All of the proceedings of the District undertaken to form the Assessment District and to levy the assessments were undertaken under the Municipallmprovement Act of 1913 (Division 12 of the California Streets and Highways Code). For an additional description of the Assessment District, see "THE ASSESSMENT DISTRICT" herein.

Assessments in the total amount of $865,000 were confirmed by the District after a public hearing and election held January 8, 2008. $180,000 of the total assessment was levied to: (i) cover certain contingent liabilities and charges of the Assessment District for connection fees due Larwin as a result of a disputed agreement to reimburse certain costs of auxiliary water facilities installed in prior years; and (ii) to cover a contingent assessment liability allegedly due the Pajaro Water Management Agency (collectively, the "Contingent Liabilities").

The District has levied $180,000 of additional assessment to cover the foregoing Contingent Liabilities, but has determined NOT to issue bonds (the "Series B Bonds") at this time, if ever. Certain statutes of limitation will expire in early 2009, and if so, the District will take action to expunge the additional liens and never issue Series B Bonds.

It should be noted, however, that should Series B Bonds be issued, that said assessment lien for the Series B Bonds would be on a lien of equal parity with the Series A Bonds.

Security and Sources of Repayment for the Bonds

The Bonds will be issued under the Fiscal Agent Agreement, dated as of March l, 2008 (the "Fiscal Agent Agreement"), between the District and Union Bank of California, N.A., San Francisco, California, as fiscal agent (the "Fiscal Agent") (see "APPENDIX A-SUMMARY OF THE FISCAL AGENT AGREEMENT" herein) and pursuant to the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code) (the "1913 Act") and the Improvement Bond Act of 1915 (Division 10 of the California Streets and Highways Code) (the "Bond Law") (collectively, the "Assessment Bond Law").

Assessments levied on the property in the Assessment District arc estimated to be sufficient, if paid timely, to pay the aggregate amount of the principal and interest on the Bonds. See "SOURCES OF PAYMENT FOR THE BONDS" and "BONDHOLDERS' RISKS" herein.

The District has covenanted to cause foreclosure proceedings to be commenced and prosecuted against Assessment Parcels with delinquent installments of Assessments under certain circumstances. For a more detailed description of the foreclosure covenant see "SOURCES OF PAYMENT FOR THE BONDSRepayment of the Bonds-Covenant to Commence Foreclosure Proceedings."


Page 2

The Bonds are limited obligations of the District payable solely from the proceeds of unpaid Assessments levied on the Assessment Parcels within the Assessment District and other funds pledged under the Fiscal Agent Agreement. The Bonds do not constitute a debt or liability of the State of California or of any political subdivision thereof, other than the District to the limited extent described herein.

The District shall only be obligated to pay the principal of the Bonds, and ·the interest thereon, from the funds described herein, and neither the faith and credit nor the taxing power of t!te District, the State of California or any of its political subdivisions is pledged to the payment of the principal of or the interest on the Bonds, except to the limited extent described herein. See "SOURCES OF PAYMENT FOR THE BONDS" and "BONDHOLDERS' RISKS" herein.

Purpose

Proceeds from the Bonds will be used to (i) finance the construction costs of certain public water improvements of benefit to property within the Assessment District, (ii) pay costs related to the issuance of the Bonds, and (iii) make a deposit to a Reserve Fund (see "THE FINANCING PLAN-Estimated Uses of Funds" herein).

Property Values

The District has relied on the assessed valuations of the San Benito County Assessor used for the purposes of general taxes for the valuations for all of the Assessment Parcels (see "APPENDIX CASSESSMENT PARCEL LISTING") presented in this Official Statement, together with a summary of the assessed value to lien ratios (TABLE 1). See "BONDHOLDERS" RISKS" and "THE ASSESSMENT DISTRICT-Assessed Values," "-Assessed Value to Assessment Lien Ratios."

Tax Exemption

In the opinion of Robert M. Haight, Scotts Valley, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes, such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although for the purpose of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in determining certain income and earnings. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See "LEGAL MA TIERS-Tax Exemption" herein.

Professionals Involved in the Offering

The legal proceedings relating to the issuance of the Bonds are subject to the approving opinion of Robert M. Haight, Scotts Valley, California, as Bond/Disclosure Counsel. Certain legal matters will be passed on for the District by Bosso Williams, Attorneys at Law, District Counsel.

Union Bank of California, N.A., San Francisco, California, will serve as the fiscal agent, paying agent, registrar, authentication and transfer agent for the Bonds and perform the functions required of it under the Fiscal Agent Agreement for the payment of the principal of and interest and any premium on the Bonds and all activities related to the redemption of the Bonds.


Page3

LISTING" contains a complete list of Assessment Parcels, 2007-2008 assessed values and estimated Assessment liens. The County's assessed valuation of land and improvements is based on the base year assessed value (which may or may not be reflective of the fair market value of the land and improvements) increased by a maximum of 2% a year each year thereafter, as allowed under Article Xll!A of the Constitution of the State of California. Therefore, the assessor's value typically does not accurately reflect the fair market value of the land and improvements, which may be higher or lower than the Assessor's value. Further, due to timing, the Assessor's value may not reflect the most recent sale price of a parcel or new construction on a parcel. The fair market value can only be established through the sale of the property or an M.A.!. appraisal of the property within the Assessment District. The District has not undertaken to obtain an M.A.!. appraisal of the property within the Assessment District, but it has engaged the services of Robert E. Clark Realty, a licensed real estate brokerage firm of over 40 years experience, to provide a fair market estimate of value of real properly and improvements within the Assessment District. Also, sec "-Assessed Value to Assessment Lien Ratios" and "APPENDIX F-F AIR MARKET ESTIMATE OF VALUE OF ROBERT E. CLARK REALTY."

Investors must recognize the uncertainties with respect to the assessed values of the Assessment Parcels, since the Bonds are only secured by the Assessment Parcels. See "BONDHOLDERS' RISKS" herein.

Assessed Value to Assessment Lien Ratios

Assessed valuation to assessment lien ratios are derived by dividing the 2007-2008 fiscal year County Assessor's assessed valuation amount or' land plus improvements, if any, by the unpaid assessments. For example, a 3:1 ratio means that the assessed value is three times the total assessment lien amount.

According to the County Assessor's Office, the aggregate assessed valuation of land and improvementsofthe 8 Assessment Parcels with unpaid Series A assessments is $3,312,695 for fiscal year 2007-2008 and ratios range from 0.81:1 to 11.46:1. The total Series A lien on the Assessment Parcels is $498,176 The aggregate value-to-lien ratio is 6.64:1. (See "APPENDIX C-ASSESSMENT PARCEL LISTING" herein.)

Potential purchasers of the Bonds should be aware that if an Assessment Parcel bears an Assessment in excess of its market value, then there may be little incentive for the owner of the Assessment Parcel to pay the assessment on such Assessment Parcel and little likelihood that such property would be purchased in a foreclosure sale. See "APPENDIX C-ASSESSMENT PARCEL LISTING" for various assessed value-to-lien ratios and "BONDHOLDERS' RISKS" describing risks relating to market values of Assessment Parcels.

TABLE l categorizes the assessed value-to-lien ratios for the Assessment Parcels.


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r

''

Whenever an Assessment is pre-paid in whole or in part, as provided in the Act, the General Manager will transfer from the Reserve Fund to the Redemption Fund an amount equal to the product of (a) the ratio of the original amount of the Assessment securing any Bonds so paid to the original amount of all Assessments securing any Bonds, times (b) the initial deposit to the Reserve Fund upon the issuance of the Bonds.

Whenever, on any Interest Payment Date, or on any other date as determined by the General Manager, the amount in the Reserve Fund exceeds the Reserve Requirement, the General Manager will (except as otherwise provided in the Fiscal Agent Agreement for purposes of rebate) transfer on or before such Interest Payment Date an amount equal to the excess from the Reserve Fund to the Redemption Fund to be used in accordance with Part 16 of the Assessment Bond Law.

Whenever the balance in the Reserve Fund is sufficient to retire all the outstanding Bonds, whether by advance retirement or otherwise, collection of the principal and interest on the Assessments will be discontinued and the Reserve Fund will be liquidated by the General Manager in retirement of the outstanding Bonds. If the balance in the Reserve Fund at the time of liquidation exceeds the amount required to retire all of the outstanding Bonds, the excess will be transferred to the District to be used in accordance with the Assessment Bond Law.

BONDHOLDERS' RISKS

General

BEFORE PURCHASING ANY OF THE BONDS, ALL PROSPECTIVE INVESTORS AND THEIR PROFESSIONAL ADVISORS SHOULD CAREFULLY CONSIDER, AMONG OTHER THINGS, THE FOLLOWING RlSK FACTORS, WHICH ARE NOT MEANT TO BE AN EXHAUSTIVE LISTING OF ALL RISKS ASSOCIATED WITH THE PURCHASE OF THE BONDS. MOREOVER, THE ORDER OF PRESENTATION OF THE RISK FACTORS DOES NOT NECESSARlL Y REFLECT THE ORDER OF THEIR IMPORTANCE.

The purchase of the Bonds involves investment risk. If a risk factor materializes to a sufficient degree, it could delay or prevent payment of principal of and/or interest on the Bonds. Such risk factors include, but are not limited to, the following matters.

Debt service on the Bonds is payable from installment payments of principal and interest on unpaid Assessments on the Assessment Parcels. The principal of the Assessments is the aggregate of the amounts of the individual Assessments levied against the Assessment Parcels. The individual Assessment on a parcel will be paid in annual installments, together with interest on the unpaid balance, unless the unpaid balance is subsequently prepaid. The annual installments of principal and interest with respect to an Assessment Parcel will be collected on the District tax roll at the same time and in the same manner as general real property taxes are collected. The annual installments of principal and interest with the respect to all Assessment Parcels were, at the time of initial levy of the Assessments, equal in the aggregate to the annual debt service on the Bonds.

Foreclosure and Sale Proceedings

The Board of Directors is obligated under certain conditions to institute foreclosure and sale proceedings against Assessment Parcels, which have delinquent assessment installments, and may do so in other circumstances even if not so obligated. However, the District has determined, because of the


Page 19

administrative costs involved, not to implement foreclosure proceedings unless and until the applicable delinquent amounts (including ·interest thereon) exceed certain thresholds. See "SOURCES OF PAYMENT FOR THE BONDS-Repayment of the Bonds-Covenant to Commence Foreclosure Proceedings" herein.

Foreclosure proceedings are instituted by the bringing of an action in the superior court of the County in which the Assessment Parcel lies, naming the owner and other interested persons as defendants. The action is prosecuted in the same manner as other civil actions. Upon judgment of foreclosure the Assessment Parcel may be offered for sale at a minimum price. The initially established minimum price will be sufficient to cover the amount of the delinquent installments and unpaid interest together with penalties, costs, fees and charges and the costs of execution and sale. The buyer in a foreclosure sale takes the parcel subject to the remaining assessment installments and regular taxes.

However, in the event an Assessment Parcel does not sell for the minimum price the court may modifY its judgment and reduce or eliminate the minimum price. In order to do so, however, written notice of a hearing on the matter of reducing or eliminating the minimum price is required to be given to the owners of the Bonds.

If at the hearing the court determines that such a sale will not result in an ultimate loss to the owners of the Bonds, or if the owners of 75% of the outstanding Bonds by principal amount consent and the sale will not result in an ultimate loss to the non-consenting owners of Bonds, the court may reduce or eliminate the minimum price at which an Assessment Parcel may be sold. Further, if the owners of 75% of the outstanding Bonds by principal amount consent, the court may reduce or eliminate the minimum price at which an Assessment Parcel may be sold even if sale below the minimum price will result in an ultimate loss to non-consenting owners of Bonds, provided that the court makes certain additional determinations specified by statute including the reasonable unavailability of any other remedy acceptable to the owners of75% or more ofthe outstanding Bonds by principal amount. Upon sale of the Assessment Parcel for less than the minimum price the remaining unpaid balance of the assessment on the Assessment Parcel will be reduced by the difference between the minimum price and the sale price. By such a reduction the aggregate principal amount of the outstanding Bonds may further exceed the aggregate principal amount of the unpaid Assessments.

Depletion of Reserve Fund

Upon the issuance of the Bonds, the Reserve Fund will contain an amount equal to $38,202.50, the initial "Reserve Requirement." Whenever there are insufficient funds in the Revenue Fund to pay the next maturing installment of principal and interest on the Bonds, the amounts necessary to make up the deficiency, to the extent available, will be transferred from the Reserve Fund to the Revenue Fund.

Amounts so transferred will be reimbursed to the Reserve Fund if, and when, available from the payments of delinquent installments and from the proceeds of redemption or sale of delinquent parcels which caused the withdrawal.

The Reserve Requirement is subject to reduction if, and when, the unpaid balance of the Assessment on an Assessment Parcel is prepaid. Upon prepayment of an Assessment, there will be a mandatory redemption of the Bonds (see "THE BONDS-Redemption" herein). The Reserve Requirement will be reduced to the Reserve Requirement following such mandatory redemption. A reduction in the Reserve Requirement caused by prepayment of an assessment and the mandatory redemption of Bonds is a permanent reduction.


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TABLE I

AROMAS WATER DISTRJCT ORCHARD ACRES ASSESSMENT DISTRICT

2008 LIMITED OBLIGATION IMPROVEMENT BONDS, SERIES A

SUMMARY ASSESSED VALUE TO LIEN RATIO AS OF FEBRUARY I, 2008

Assessed Value Percentage of to Lien Parcels Parcels

Less than 1: I I . 12.50% 1:1 to 2.09:1 0 0.00

3.00 to 4.99: I 12.50

5.00:1 and up 6 75.00

8* 100.00%

* Excludes parcels on which assessments have been fully prepaid. Source: Aromas Water District.

Bond Lien

$62,272

0

62,272

373,632

$498,176*

Percentage of Total Lien

12.50%

0.00

12.50

75.00

100.00%

Equal Serie.< A Assessment Liens. All Assessment Parcels have equal Series A assessment liens. The Assessment is $62,272 on both improved and unimproved parcels. The property owners in the Assessment District will not be personally liable for payments of the Assessments. No assurance can be given that the present property owners will continue to hold an interest in the Assessment Parcels.

No.

I 2 3 4 7 8 10 11

Source:

TABLE2

AROMAS WATER DISTRICT ORCHARD ACRES ASSESSMENT DISTRJCT


FAIR MARKET ESTIMATE OF VALUE (as of March I, 2008)

Fair Market APN Estimate of Land Assessment Value to Lien

and Im2rovement Lien 11-230-006 $755,000 $62,272 11-230-007 $825,000 $62,272 11-230-043 $900,000 $62,272 11-230-042 $839,000 $62,272 11-290-073 $700,000 $62,272 11-290-074 $575,000 $62,272 11-290-076 $425,000 $62,272 11-300-014 $725,000 $62,272

TOTAL: $5,744,000 $498,176

Fair Market Estimate of Robert E. Clark Realty. See APPENDIX F.

OFFICIAL STATEMENT AROMAS WATER DISTRJCT

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Ratio 12.12:1 13.24:1 14.45:1 13.47:1 11.24:1 9.23 :1 6.82:1

11.64:1

11.53 :I

Delinquencies; No "Teeter Piau"

Of the II parcels assessed, there are no tax delinquencies. The collection of assessments are not subject to the "Teeter Plan" (which is the County's Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code). See "BONDHOLDERS' RISKS-Foreclosure and Sale Proceedings" for a further discussion with respect to delinquent assessment payments.

Direct and Overlapping Debt

Set forth below is the direct and overlapping debt report (the "Debt Report") prepared by California Municipal Statistics, Inc., as of March 1, 2008. The Debt Report is included for general information purposes only.

The Debt Report generally includes long-term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the Assessment District in whole or in part. Such long-term obligations arc not payable from unpaid Assessments nor are they necessarily obligations secured by property within the Assessment District. In many cases, long-term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency.

Presently, the Assessment Parcels are subject to $53,650 of direct and overlapping tax and assessment debt and overlapping lease obligation debt, excluding the Bonds. To repay the direct and overlapping tax and assessment debt and overlapping lease obligation debt, the property owners of the land within the Assessment District must pay the annual Assessments and the general property tax levy.

In addition, other public agencies whose boundaries overlap those of the Assessment District could, without the cons,nt of the District, and in certain cases without the consent of the owners of the land within the Assessment District, impose additional taxes or assessment liens on the real property within the Assessment District in order to finance public water improvements or services to be located or furnished inside of or outside of the Assessment District. The lien created on the real property within the Assessment District through the levy of such additional taxes or Assessments may be on a parity with the lien of the Assessments. The imposition of additional liens on parity with the Assessments may reduce the ability or willingness of the property owners to pay the Assessments and increases the possibility that foreclosure proceeds, if any, will not be adequate to pay delinquent Assessments.


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AROMAS WATER DISTRICT ORCHARD ACRES ASSESSMENT DISTRICT


DIRECT AND OVERLAPPING DEBT

SAN BENITO COUNTY ORCHARD ACRES ASSESSMENT DISTRICT

2007-08 Local Secured Assessed Valuation: $3,891,227

DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Gavilan Conununity College District Aromas-San Juan Joint Unified School District San Benito Healthcare District San Benito County Orchard Acres Assessment District

TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT

OVERLAPPING GENERAL FUND DEBT: San Benito County Certificates of Participation Aromas-San Juan Joint Unified School District Certificates of Participation Monterey Bay Unified Air Pollution Authority Certificates of Participation TOTAL OVERLAPPING GENERAL FUND DEBT

COMBINED TOTAL DEBT

(I) Based on 2006-07 ratios. (2) Excludes 1915 Act bonds to be sold.

% Agglicable {I) 0.014% 0.239 0.055

100.

0.066% 0.239 0.005

Debt 3/1/08 $10,618

26,001 17,03 I

- (2) --$53,650

$ 574 3,920 ___ill

$4,645

$58,295 (3)

(3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.

Ratios to 2007-08 Local Secured Assessed Valuation: Direct Debt................................................................................ - % Total Direct and Overlapping Tax and Assessment Debt... ......... 1.38% Combined Total Debt .................................................................. 1.50%

Source: California Municipal Statistics, Inc.

OFFICIAL STATEMENT AROMAS WATER DISTRJCT

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SOURCES OF PAYMENT FOR THE BONDS

Repayment of the Bonds

The Bonds are issued upon and are secured by the unpaid Assessments levied on the Assessment Parcels, together with interest on those Assessments. The unpaid Assessments together with interest thereon constitute a trust fund for the redemption and payment of the principal of and interest (and any applicable premium) on the Bonds. All of the Bonds are secured by the monies in the Redemption Fund (including the Prepayment Account therein) and the Reserve Fund created under the Fiscal Agent Agreement. Principal of and interest on the Bonds are payable exclusively out of the Redemption Fund.

Although the unpaid Assessments constitute fixed liens on the Assessment Parcels, they are not personal indebtedness of the owners of the Assessment Parcels. Furthermore, there can be no assurance as to the willingness or ability ofthe property owners to pay the unpaid Assessments.

Collection of Assessments. The unpaid Assessments levied annually on the Assessment Parcels will be collected, together with interest on the declining balances, on the tax roll of the District on which general taxes on real property are collected, and the unpaid Assessments are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do general taxes, and the Assessment Parcels are subject to the same provisions for sale and redemption as are properties for nonpayment of general taxes. The annual Assessment installments together with interest are to be paid into the Redemption Fund which will be used to pay the principal of and interest on the Bonds as they become due.

Limited Obligations. The obligations of the District under the Fiscal Agent Agreement and the Bonds are not general obligations of the District, but are limited obligations, payable solely from the Assessments and the funds pledged therefor under the Fiscal Agent Agreement. Neither the faith and credit of the District nor of the State of California or any political subdivision thereof is pledged to the payment of the Bonds. The Bonds are not secured by the general taxing power of the District, the State or any political subdivision of the State.

The Bonds are "Limited Obligation Improvement Bonds" under Section 8769 of the Act and are payable solely from and secured solely by the Assessments and the amounts in the Redemption Fund and the Reserve Fund created under the Fiscal Agent Agreement. The District is not obligated to advance available surplus funds from the District treasury to cure any deficiency in the Redemption Fund.

Covenant to Commence Foreclosure Proceedings.

In the Fiscal Agent Agreement, the District has covenanted with and for the benefit of the owners of the Bonds that it within one hundred fifty (150) days following the due date of any delinquent installment of assessments securing the bonds to be issued, commence and thereafter diligently prosecute to completion a foreclosure action regarding such delinquent installment of assessment against parcels with delinquent assessments in excess of $3,000 by the October I following the close of each Fiscal Year in which assessments were due and will commence judicial foreclosure proceedings against all parcels with delinquent assessments by the October I following the close of each Fiscal Year in which it receives assessments in an amount which is less than 95% of the total assessment levied, and diligently pursue to completion such foreclosures.


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The District will determine if any of the conditions described above exist and will notify the District Counsel of any such delinquencies. The District Counsel will commence, or cause to be commenced, such foreclosure proceedings, including collection actions preparatory to the filing of any complaint. The District Counsel is hereby authorized to employ outside counsel to conduct any such foreclosure proceedings.

Possibility of Foreclosure Delays. No assurances can be given that any real property subject to a judicial foreclosure sale will be sold or, if sold, that the proceeds of sale will be sufficient to pay any delinquent Assessment installment. If court foreclosure proceedings are necessary, there may be a delay in payments to the owner of the Bonds pending prosecution of the foreclosure proceedings and receipt by the District of the proceeds of the foreclosure sale. It is also possible that no bid for the purchase of the applicable property would be received at the foreclosure sale. See "BONDHOLDERS' RISKSForeclosure and Sale Proceedings."

Priority of Lien. Each Assessment (and any Assessment thereof) and each installment thereof, and any interest and penalties on each Assessment, constitute a lien against the Assessment Parcel on which it was imposed until it is paid. The lien is subordinate to all fixed special assessment liens imposed upon the same property prior to the date that the Assessments became a lien on the property assessed, but has priority over all private liens and over all fixed special assessment liens which may .thereafter be created against the property. The lien is co-equal to and independent of the lien for general taxes and any special taxes levied under the Mello-Roos Community Facilities Act of 1982. The direct and overlapping debt of property within the Assessment District as of March I, 2008 is shown under the heading "THE ASSESSMENT DISTRICT -Direct and Overlapping Debt."

Sales ofT ax-Defaulted Property Generally_ If foreclosure is deemed necessary, property securing delinquent Assessment installments which is not sold pursuant to the judicial foreclosure proceedings described above may be sold, subject to redemption by the property owner, in the same manner and to the same extent as real property sold for nonpayment of general District property taxes. On or before June 30 of the year in which such delinquency occurs, the property becomes tax-defaulted. This initiates a fiveyear period during which the property owner may redeem the property. At the end of the five-year period the property becomes subject to sale by the County Tax Collector. Except in certain circumstances, as provided in the Act, the purchaser at any such sale takes such property subject to all unpaid assessments, interest and penalties, costs, fees and other charges which are not satisfied by application of the sales proceeds and subject to all public improvement assessments which may have priority.

Delinquency Resulting in Ultimate or Temporary Loss on Bonds. If amounts in the Redemption Fund are temporarily insufficient to pay Bonds that have matured or past due interest, or the principal and interest on Bonds coming due during the current tax year, but it does not appear to the General Manager that there will be an ultimate loss to the owner of the Bonds, the General Manager will, pursuant to the Act, pay the principal of Bonds which have matured as presented and make interest payments on the Bonds when due as long as there are available funds in the Redemption Fund, in the following order of priority: All matured interest payments will be made before the principal of any other Bond is paid.

When funds become available for the payment of any Bond which was not paid upon presentment, the General Manager will notify the registered owner of such Bond by registered mail to present the Bond for payment. If the Bond is not presented for payment within ten days after the mailing of the notice, interest will cease to accrue on the Bond. If it appears to the General Manager that there is a danger of an ultimate loss accruing to the Bond Owner for any reason, he or she is required pursuant to the Act to


Page I 7

withhold payment on all matured Bonds and interest on all Bonds and report the facts to the Board of Directors so that the Board of Directors may take proper action to equitably protect the Bond Owner.

Upon the receipt of such notification from the General Manager, the Board of Directors is required to fix a date for a hearing upon such notice. At the hearing the Board of Directors will determine whether in its judgment there will ultimately be insufficient money in the Redemption Fund to pay the principal of the unpaid Bonds and interest thereon.

If the Board of Directors determines that in its judgment there will ultimately be a shortage in the Redemption Fund to pay the principal of the unpaid Bonds and interest thereon (an "Ultimate Default"), the Board of Directors will direct the General Manager to pay to the owner of all outstanding and unpaid Bonds such proportion thereof as the amount of funds on hand in the Redemption Fund bears to the total amount of the unpaid principal of the Bonds and interest which has accrued or will accrue thereon. Similar proportionate payments will thereafter be made periodically as monies come into the Redemption Fund.

Upon the determination by the Board of Directors that an Ultimate Default will occur, the General Manager will notifY the Bond Owner to surrender its Bonds to the General Manager for cancellation.

Upon cancellation of the Bonds, the Bond Owner will be credited with the principal amount of the Bond so canceled. The General Manager will then pay by warrant the proportionate amount of principal and accrued interest due on the Bonds of the Bond Owner as may be available from time to time out of the money in the Redemption Fund. Interest will cease on principal payments made from the date of such payment, but interest will continue to accrue on the unpaid principal at the rate specified on the Bonds until payment thereof is made. No premiums will be paid on payments of principal on Bonds made in advance of the maturity date thereon.

If Bonds arc not surrendered for registration and payment, the General Manager will give notice to the Bond Owner by registered mail, at the Bond Owner's last address as shown on the registration books maintained by the Registrar, of the amount available for payment. Interest on such amount will cease to accrue as often days after the date of mailing of such notice.

If the Board of Directors determines that in its judgment there will not be an Ultimate Default, it will direct the General Manager to pay matured Bonds and interest as long as there is available money in the Redemption Fund.

Reserve Fund

The District will establish the Reserve Fund upon the issuance of the Bonds in an amount equal to $38,202.50. See "THE FINANCING PLAN-Estimated Uses of Funds." Thereafter the Reserve Fund will be maintained in an amount equal to the "Reserve Requirement," which is defined as the least of I 0% of the original principal amount of the Bonds, 125% of average annual Debt Service on the Bonds, or maximum annual Debt Service on the Bonds.

All amounts deposited in the Reserve Fund will be used and withdrawn by the General Manager solely for the purpose of making transfers to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the amount then required for payment of the principal of, and interest and any premium on, the Bonds or, in accordance with the Resolution, for the purpose of redeeming Bonds from the Redemption Fund.


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The Reserve Fund may be invested, and the investment earnings may be retained in the Reserve Fund, to the extent necessary to maintain the amount therein at the Reserve Requirement. No sources of funds other than such investment earnings and any recoveries of delinquent Assessments are available to replenish deficiencies in the Reserve Fund. Accordingly, there is no assurance that the amount in the Reserve Fund will, at any particular time, be sufficient to pay, when due, debt service on the Bonds nor that the Reserve Fund will be fully reimbursed for any amounts expended for debt service.

Valuation of Property in the Assessment District

The value of the land within the Assessment District is a critical factor in determining the investment quality of the Bonds. If there is a default in the payment of the Assessments, the District's only remedy is to commence foreclosure proceedings on the delinquent taxable property in an attempt to obtain funds to pay the delinquent Assessment.

Value-to-lien ratios have traditionally been used in land-secured bond issues as a measure of the "collateral" supporting the willingness of property owners to pay their special taxes and assessments (and, in effect, their general property taxes as well). The value-to-lien ratio is mathematically a fraction, the numerator of which is the value of the property (usually a market value as determined by an appraiser) and the denominator of which is the "lien" of the assessments or special taxes. A value-to-lien ratio should not, however, be viewed as a guarantee of credit-worthiness. Land values are more volatile in the early stages of a development, and are especially sensitive to economic cycles. A downturn of the economy may depress land values and hence the value-to-lien ratios, thereby increasing risk to investors and lenders. Further, the value-to-lien ratio cited for a bond issue is based on the aggregate value of all parcels in the Assessment District. Individual parcels in an assessment district may fall above or below the average, sometimes even below a I: I ratio. (With a ratio below I: I, the land is worth less than the debt on it.) Although judicial foreclosure proceedings can be initiated rapidly, the process can take several years to complete, and the bankruptcy courts may impede the foreclosure action. Finally, local agencies may form overlapping community facilities districts or assessment districts. Debt issuance by another entity can dilute value-to-lien ratios. See "THE ASSESSMENT DISTRICT -Direct and Overlapping Debt."

The values shown in "APPENDIX C-ASSESSMENT PARCEL LISTING" are based on the assessed values of property in the Assessment District derived from the 2007-2008 County Assessor's assessed valuation of land and improvements, which may or may not be reflective of such property's fair market value or what a property could be sold for at judicial foreclosure. Note particularly in this regard the subsections under this caption "BONDHOLDERS' RISKS" which discuss matters relating to value of a parcel and the discussions under the caption "THE ASSESSMENT DISTRICT" with respect to lien to value ratios within the Assessment District. The District has undertaken to provide a fair market valuation estimate of properties within the Assessment District. See "TABLE 2-Fair Market Estimate of Value."

Factors Affecting Parcel Value and Aggregate Values

Prospective purchasers of the Bonds should not assume that the land could be sold for its original sales price or its fair market value at a foreclosure sale for delinquent Assessments. The future value of the land can be expected to fluctuate due to many different, not fully predictable, real estate related investment risk factors, including, but not limited to: general tax law changes related to real estate, changes in competition, general area employment base changes, population changes, changes in real estate related interest rates affecting general purchasing power, changes in allowed zoning uses and density, natural disasters such as floods, earthquakes, fires, landslides, and similar factors.


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The facts and circumstances concerning . the values of the Assessment Parcels that are of importance are not confined to those relating to individual Assessment Parcel values because the Bonds are not individually secured by particular Assessment Parcels. The Bonds are secured by all of the unpaid Assessments on all of the Assessment Parcels within the Assessment District. Therefore factors which affect all of the Assessment Parcels should be considered. The following are some of the factors which may affect the market for and value of particular Assessment Parcels individually, as well as the market for and value of all Assessment Parcels.

Geologic, Topographic and Climatic Conditions. Values of Assessment Parcels can be adversely affected by a variety of natural events and conditions, including, without limitation geologic conditions such as earthquakes; topographic conditions such as earth movements and floods; and climatic conditions such as storms and wildfires. The possibility of the occurrence of some of these conditions and events has been taken into account to a limited extent in the design of the Assessment District's improvements and has been or will be taken into account to a limited extent in the designs of other public water improvements which may be approved by the District or other public agencies. Building codes require that some of these conditions be taken into account to a limited extent in the design of private improvements. Design criteria in ,my of these circumstances are established upon the basis of a variety ofconsiderations and may change from time to time leaving previously designed improvements unaffected by more stringent subsequently established criteria. ln general, design criteria, at .the time of their establishment, reflect a balance between the present costs of protection and the future costs of lack of protection, based in part upon a present perception of the probability that the condition will occur and the seriousness of the condition should it occur. Also reflecting that balances are decisions not to impose design criteria at alL The District expects that one or more of these conditions may occur from time to time, and, even if design criteria do exist, such conditions may result in damage to property improvements. That damage may entail significant repair or replacement costs, and repair or replacement may never occur. Under any of these circumstances, the value of the Assessment Parcels could depreciate substantially notwithstanding the establishment of design criteria.

According to the Seismic Safety Element of the District's General Plan, the District is located in a seismically active region and buildings in the Assessment District could be impacted by a major earthquake originating from the numerous faults in the area. Seismic hazards encompass both potential surface rupture and ground shaking.

Legal Requirements. Other events which may affect the value of an Assessment Parcel 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. See "Proposition 218; Possible Future Ballot Initiatives" herein.

Prepayment of Assessments

There is rarely a uniform relationship between the relative value of Assessment Parcels and the proportionate share of debt service on the Bonds to be borne by such Assessment Parcels. One of the factors that may effect a significant change in the relationship between the aggregate Assessment Parcel values and the assessment is the prepayment before final bond maturity of the remaining balance of the Assessments on particular Assessment Parcels. Should the Assessments on Assessment Parcels having a relatively high ratio of assessed value to assessment be prepaid, the security for the Bonds, as evidenced by" the ratio of the aggregate remaining Assessment Parcel values to the remaining outstanding Bonds, will be reduced.


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Other Possible Claims Upon the Value of an Assessment Parcel

The sufficiency of tax or foreclosure sale proceeds to cover delinquent amounts may also depend on the value of any prior or parity liens and similar claims. While the Assessments are secured by the Assessments Parcels, this security only extends to the value thereof that is not subject to priority and parity liens and similar claims relative to the Assessments.

Other governmental obligations, including taxes, assessments, special taxes or other charges, may be authorized and undertaken or issued in the future may become obligations of one or more of the Assessment Parcels and may be secured by liens on a parity with the liens of the Assessments securing the Bonds.

The lien of the Assessments is subordinate to all fixed special assessment liens previously imposed upon the parcels in the Assessment District, but has priority over all private liens and over all fixed special assessment liens which may thereafter be creased against the parcels in the Assessment District. This lien is co-equal to and independent of the lien of general property taxes and special taxes, including, without limitation, special taxes levied under the Mello-Roos Community Facilities Act of 1982 (being Chapter 2.5, Part I, Division 2, Title 5 of the Water Code of the State of California), whenever created against the property.

There are no fixed special assessment liens previously imposed upon the Assessment Parcels.

Direct and Overlapping Indebtedness

The ability of an owner of land within the Assessment District to pay Assessment Installments could be affected by the existence of other taxes and assessments imposed upon the Assessment Parcels. Presently, the sum of the direct and overlapping debt applicable to the property in the Assessment District is as detailed under the caption "THE ASSESSMENT DISTRICT-Direct and Overlapping Debt." In addition, the District and other public agencies whose boundaries overlap those of the Assessment District, (without the consent of the District), could, impose additional taxes or assessment liens on the assessment parcels in certain cases without the consent of the owners of the land, in order to finance various public improvements or services to be located or provided inside of or outside of such area. The lien created on the property within the Assessment District through the levy of such additional taxes or assessments may be on parity with the lien of the assessments.

The imposition of additional liens on a parity with the Assessments may reduce the ability or willingness of the landowners to pay the assessment installments and increases the possibility that foreclosure proceeds will not be adequate to pay delinquent assessment installments or the principal of and interest on the Bonds when due.

Bankruptcy Proceedings

Regardless of the priority of an Assessment securing the Bonds over non-governmental liens, the exercise by the District of the foreclosure and sale remedy or the tax sale remedy may be forestalled or delayed by bankruptcy, reorganization, insolvency or other similar proceedings affecting the owner of an Assessment Parcel or any other party claiming an interest in an Assessment Parcel. The federal bankruptcy laws provide for an automatic stay of foreclosure and sale or tax sale proceedings thereby delaying such proceedings perhaps for an extended period. Delay in exercise of remedies, especially if the Assessments are significant or if bankruptcy proceedings are instituted with respect to assessments which are


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significant, may result in periodic assessment installment collections which may be insufficient to pay the debt service on the Bonds as it comes due. Further, should remedies be exercised under the bankruptcy law against the Assessment Parcels, payment of installments of the assessment may be subordinated to bankruptcy law priorities. Therefore, certain claims may have priority over the assessment lien; even though they would not were the bankruptcy law not applicable.

Payment of the Assessment Not a Personal Obligation

Under the Assessment Bond Law, the owners of Assessment Parcels are not personally liable for the payment of the Assessment or the Assessment Installments. Rather, an assessment is a lien only on an Assessment Parcel. Accordingly, if the value of an Assessment Parcel is not sufficient to fully secure the assessment on it, the District has no recourse against the owner under the Assessment Bond Law by which the assessment has been levied and the Bonds have been issued.

No District Obligation to Pay Debt Service

IF ASSESSMENT INSTALLMENT COLLECTIONS ARE INSUFFICIENT, THE ONLY AMOUNTS AVAILABLE TO PAY DEBT SERVICE ON THE BONDS WILL BE THE AMOUNT ON DEPOSIT FROM TIME TO TIME IN THE RESERVE FUND, AND IF SO ADVANCED WILL REDUCE THE RESERVE FUND BY THE AMOUNT OF THE FUNDS ADVANCED.

Notwithstanding the limited nature of the District's obligation, the District may, at its option and in its sole discretion, elect to advance available funds of the District in the amount of any delinquent Assessment installments to pay debt service on the Bonds. Should the District do so, it is entitled to reimbursement from the first proceeds of any payments of delinquent Assessment installments or the redemption or sale of delinquent Assessment Parcels.

OWNERS OF BONDS MAY NOT RELY UPON THE DISTRICT TO ADVANCE FUNDS TO PAY DEBT SERVICE ON THE BONDS FOLLOWING DEPLETION OF THE RESERVE FUND EVEN IF THE DISTRICT MAY HAVE PREVIOUSLY DONE SO OR MAY DO SO CONTEMPORANEOUSLY WITH RESPECT TO OTHER BONDS OR OBLIGATIONS.

Loss of Tax Exemption

As discussed in the section herein entitled "LEGAL MATTERS-Tax Exemption," interest on the Bonds could become includable in gross income for purposes of federal income taxation, retroactive to the date of issuance, as a result of acts or omissions of the District subsequent to issuance in violation of the District's covenants applicable to the Bonds. Should interest become includable in gross income, the Bonds arc not subject to redemption by reason thereof and may remain outstanding. The Bonds arc subject to redemption for other reasons as discussed in the section herein entitled "THE BONDS-Redemption."

No Acceleration Provision

The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the terms of the Bonds or the Fiscal Agent Agreement.


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' ,.

Proposition 218; Possible Future Ballot Initiatives

Under the California Constitution, the power of initiative is reserved to the voters for the purpose of enacting statutes and constitutional amendments. Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies such as the District. Subject to overriding federal constitutional principles, such collection may be materially and adversely affected by voter-approved initiatives.

On November 5, 1996, California voters approved Proposition 218 -Voter Approval for Local Government Taxes -Limitation on Fees, Assessments, and Charges -Initiative Constitutional Amendment. Proposition 218 added Articles XIIIC and XIIID to the California Constitution, imposing certain vote requirements and other limitations on the imposition of new or increased taxes, assessments and propertyrelated fees and charges. Proposition 218 states that all taxes imposed by local governments shall be deemed to be either general taxes or special taxes. No local government may impose, extend or increase any general tax unless and until such tax is submitted to the electorate and approved by a majority vote. No local government may impose, extend or increase any special tax unless and until such tax is submitted to the electorate and approved by a two-thirds vote. (See "INTRODUCTION~Offering of the Bonds" herein.)

Proposition 218 also provides that no tax, assessment, fee or charge shall be assessed by any agency. upon any parcel of property or upon any person as an incident of property. ownership except: (i) the ad valorem property tax imposed pursuant to Article XIII and Article XIIIA of the California Constitution, (ii) any special tax receiving a two-thirds vote pursuant to the California Constitution, and (iii) assessments, fees and charges for property related services as provided in Proposition 218. Proposition 218 then goes on to add voter requirements for assessments and fees and charges imposed as an incident of property ownership, other than fees and charges for sewer, water, and refuse collection services. In addition, all assessments and fees and charges imposed as an incident of property ownership, including sewer, water, and refuse collection services, are subjected to various additional procedures, such as hearings and stricter and more individualized benefit requirements and findings.

Proposition 218 also extended the initiative power 'to reducing or repealing any local taxes, assessments, fees and charges. This extension of the initiative power is not limited to taxes imposed on or after November 6, 1996, the effective date of Proposition 218, and could result in retroactive repeal or reduction in any existing taxes, assessments, fees and charges, subject to overriding federal constitutional principles relating to the impairment of contracts.

The foregoing discussion ·Of Proposition 218 should not be considered an exhaustive or authoritative treatment of the issues. The District does not expect to be in a position to control the consideration or disposition of these issues and cannot predict the timing or outcome of any judicial or legislative activity in this regard. Interim rulings, final decisions, legislative proposals and legislative enactments may all affect the impact of Proposition 218 on the Bonds as well as the market for the Bonds. Legislative and court calendar delays and other factors may prolong any uncertainty regarding the effects of Proposition 218.

Further, from time to time, other initiative measures may qualify for the State ballot pursuant to the State's constitutional initiative process and those measures could be adopted by California voters. The adoption of any such initiative might place limitations on the ability of the State, the District or other local districts to increase revenues or to increase appropriations or on the ability of the landowners to complete the development of the land within the Assessment District.


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LEGAL MATTERS

Enforceability of Remedies

The remedies available to the Fiscal Agent and the Owners of the Bonds upon an event of default under the Fiscal Agent Agreement, or any other document described herein are in many respects dependent upon regulatory and judicial actions which are often subject to discretion and delay. Under existing law and judicial decisions, the remedies provided for under such documents may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified to the extent that the enforceability of certain legal rights related to the Fiscal Agent Agreement is subject to limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally and by equitable remedies and proceedings generally.

Approval of Legal Proceedings

Robert M. Haight, Scotts Valley, California, as Bond Counsel, will render an opinion which states that the Fiscal Agent Agreement and the Bonds are valid and binding obligations of the District and are enforceable in accordance with their terms. The legal opinions of Bond Counsel will be subject to the effect of bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights and to the exercise of judicial discretion in accordance with general principles of equity.

Certain legal matters will be passed on for the District by Bosso Williams, District Counsel, and by Robert M. Haight, Scotts Valley, California, as Disclosure Counsel.

Fees payable to Bond/Disclosure Counsel are contingent upon the sale and delivery of the Bonds.

Tax Exemption

In the opinion of Robert M. Haight, Scotts Valley, California, Bond Counsel, subject, however, to the qualifications set forth below, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, provided, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining certain income and earnings. The opinions described in the preceding sentence are subject to the condition that the District comply with all requirements of the Internal Revenue Code of 1986 that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The District has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds.

The District has designated the Bonds as "Bank Qualified." See "THE BONDS-Tax Covenants; Bank Qualified."

In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income taxes.

Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may have federal or state tax consequences other than as described above.


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,. '

Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Bonds other than as expressly described above.

A copy of the proposed form of opinion of Bond Counsel is included as "APPENDIX B."

Absence of Litigation

To the knowledge of the District, there is not now known to be pending or threatened any litigation restraining or enjoining the execution or delivery of the Fiscal Agent Agreement, or the sale or delivery of the Bonds or in any manner questioning the proceedings and authority under which the Fiscal Agent Agreement is to be executed or delivered or the Bonds are to be delivered or affecting the validity thereof.

CONCLUDING INFORMATION

No Rating on the Bonds; Secondary Market

The District has not made, and does not contemplate making, any application for a rating on the Bonds.

No such rating should be assumed based upon any other District rating that may be obtained. Prospective purchasers of the Bonds are required to make independent determinations as to the credit quality of the Bonds and their appropriateness as an investment. Should a Bondholder elect to sell a Bond prior to maturity, no representations or assurances can be made that a market will have been established or maintained for the purchase and sale of the Bonds. The Underwriter assumes no obligation to establish or maintain a market for the purchase and sale of the Bonds and is not obligated to repurchase any of the Bonds at the request of the holder thereof.

Underwriting

Crocker Securities, LLC (the "Underwriter") is offering the Bonds at the prices set forth on the inside front cover page hereof. The initial offering prices may be changed from time to time and concessions from the offering prices may be allowed to dealers, banks and others. The Underwriter purchased the Bonds at a price equal to $466,705.60, which amount represents the principal amount of the Bonds less an original issue discount of $10,794.40 and less the Underwriters' discount of $17,500.00. The Underwriter will pay certain of their expenses relating to the offering.

The District Engineer

The material contained in this Official Statement was prepared by the District with the assistance of the District Engineer. The information set forth herein has been obtained by the District from sources which are believed to be reliable, but such information is not guaranteed by the District Engineer as to accuracy or completeness, nor has it been independently verified.


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Additional Information

The summaries and references contained herein with respect to the Fiscal Agent Agreement, the Bonds, statutes and other documents, do not purport to be comprehensive or definitive and are qualified by reference to each such document or statute and references to the Bonds are qualified in their entirety by reference to the form hereof included in the Fiscal Agent Agreement. Copies of the Fiscal Agent Agreement are available for inspection during the period of initial offering on the Bonds at the offices of the Underwriter, Crocker Securities, LLC, 2999 Oak Road, Suite 1010, Walnut Creek, California 94597, telephone (925) 941-1541. Copies of these documents may be obtained after delivery of the Bonds from the District through the District Secretary, 387 Blohm Avenue, Aromas, California 95004, telephone 831-726-3155

References

Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the District and the purchasers or Owners of any of the Bonds.

Execution

The execution of this Official Statement by the General Manager has been duly authorized by the Aromas Water District.

AROMAS WATER DISTRICT

By: /s/ Larry Cain General Manager


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APPENDIX A

SUMMARY OF FISCAL AGENT AGREEMENT

The following is a brief summary of certain provisions of the Fiscal Agent Agreement, as well as definitions of certain terms used therein and in this Official Statement. This summary is not intended to be definitive, and reference is made to the complete Fiscal Agent Agreement, a copy of which is available from the Fiscal Agent.

CERTAIN DEFINITIONS

"Act" means the Municipal Improvement Act of 1913, as amended, being Division 12 of the California Streets and Highways Code.

"Agreement" means this Fiscal Agent Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement executed pursuant to the provisions of the Fiscal Agent Agreement.

"Assessment or Assessments" means the unpaid assessments levied within the Assessment District by the Board under the proceedings taken pursuant to the Act and Resolution of Intention for the purpose of paying Debt Service on the Bonds and any Parity Bonds.

"Assessment District" means the area within the District designated "Orchard Acres Assessment District" formed by the District under the Act and the Resolution of Intention, the boundaries of which are as showri in a map to the Fiscal Agent Agreement on file with the District Secretary.

"Auditor" means the auditor/controller or tax collector of the County of San Benito, or such other official of the County who is responsible for preparing real property tax bills.

"Authorized Investments" means any securities (other than those identified in paragraphs (a) and (d) of Section 53601 of the Water Code of the State) in which the District may legally invest funds subject to its control, pursuant to Article I, commencing with Section 53600, of Chapter 4 of Part I of Division 2 of Title 5 of the Water Code of the State, as now or hereafter amended, provided that such securities are acquired at Fair Market Value.

"Authorized Officer" means the General Manager, District Counsel, Board President or VicePresident, Secretary of the District, or their respective designees, or any other officer or employee authorized by the Board or by an Authorized Officer to undertake the action referenced in this Agreement as required to be undertaken by an Authorized Officer.

"Board" means the Board of Directors of the District.

"Bond or Bonds" means the bonds designated "Aromas Water District, Orchard Acres Assessment District, 2008 Limited Obligation Improvement Bonds, Series A" at any time Outstanding under this Agreement or any Supplemental Agreement. ·

"Bond Counsel" means any attorney or firm of attorneys acceptable to the District and nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities.

OFFICIAL STATEMENT SUMMARY OF FISCAL AGENT AGREEMENT

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"Bond Date" means the dated date of the Bonds which is the Closing Date.

"Bond Law" means the Improvement Bond Act of 1915, as amended, being Division 10 of the California Streets and Highways Code.

"Bond Register" means the books maintained by the Fiscal Agent pursuant to Section 2.08 for the registration and transfer of ownership of the Bonds.

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

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

"Closing Date" means the date upon which there is a physical delivery of the Bonds in exchange for the amount representing the purchase price of the Bonds by the Original Purchaser.

"Costs of Issuance" means items of expense payable or reimbursable directly or indirectly by the District and related to the authorization, sale and issuance of the Bonds, which items of expense shall include, but not be limited to, printing costs for the Bonds and the Official Statement, costs of reproducing and binding documents, closing costs, appraisal costs, filing and recording fees, fees and expenses of the District and the Fiscal Agent, initial fees and charges of the Fiscal Agent including its first annual administration fee, expenses incurred by the District in connection with the formation of the Assessment District and the issuance of the Bonds, Bond (underwriter's) discount, legal fees and charges, including bond counsel, charges for execution, transportation and safekeeping of the Bonds and other costs, charges and fees in connection with the foregoing.

"Costs of Issuance Fund" means the fund designated "Aromas Water District, Orchard Acres Assessment District, 2008 Limited Obligation Improvement Bonds, Series A, Costs of Issuance Fund"

. established and administered under Section 4.02 of the Fiscal Agent Agreement.

"County" means the County of San Benito, California, and any successor thereto.

"Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled, and (ii) the principal amount of the Outstanding Bonds and the Sinking Fund Payments due in such Bond Year.

"District Counsel" means the District Counsel of the District or other designated counsel to the District with respect to the Assessment District.

assigns.

"District Secretary" means the Secretary or Assistant Secretary of the District.

"DTC" means The Depository Trust Company, a New York Corporation and its successors and


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"Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Tax Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Tax Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Tax Code, (iii) the investment is a United States Treasury Security-State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) any commingled investment fund in which the District and related parties do not own more than a 10% beneficial interest therein if the return paid by the fund is without regard to the source of the investment.

"Federal Securities" means any of the following which are non-callable and which at the time of investment are legal investments under the laws of the State of California for funds held by the Fiscal Agent:

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

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

"Fiscal Agent" means the Fiscal Agent appointed by the District and acting as the registrar, transfer agent, paying and registration agent for the Bonds and as an independent fiscal agent with the duties and powers herein provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 7.01 of the Fiscal Agent Agreement.

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

"General Manager" means the General Manager of the District or designee.

"Information Services" means:

(a) Financial Information, Inc.'s "Daily Called Bond Service," 30 Montgomery Street,· lOth Floor, Jersey District, New Jersey 07302, Attention: Editor;

(b) Mergent/FIS, 5250 77 Center Drive, Suite 150, Charlotte, North Carolina, 28217, Attn: Called Bond Dept.''; and


Page A-3

(c) Kenny S&P, 55 Water Street, 45th Floor, New York, New York 10041, Attention: Notification Department;

and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such services providing information with respect to called bonds as the District may designate in an Officer's Certificate delivered to the Fiscal Agent.

"Improvement Fund" means the fund designated "Aromas Water District, Orchard Acres Assessment District, 2008 Limited Obligation Improvement Bonds, Series A, Improvement Fund," established and administered under Section 4.03 of the Fiscal Agent Agreement.

"Interest Payment Dates" means March 2 and September 2 of each year, commencing March 2, 2009.

"Maximum Annual Debt Service" means the largest Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds.

"Officer's Certificate" means a written certificate of the District signed by an Authorized Officer of the District.

"Outstanding" when used as of any particular time with reference to Bonds, means, subject to the provisions of Section 8.04 of the Fiscal Agent Agreement, all Bonds except:

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

(ii) Bonds paid or deemed to have been paid within the meaning of Section 9.03; (iii) Bonds in lieu of or in substitution for which other Bonds shall have been authorized,

executed, issued and delivered by the District pursuant to this Agreement or any Supplemental Agreement.

"Original Purchaser" means the first purchaser of the Bonds from the District.

"Owner" or "Bond Owner" means the registered owner of any Outstanding Bond as shown on the Bond Register of the Fiscal Agent under Section 2.08 of the Fiscal Agent Agreement.

"Prepayment Account" means the account within the Redemption Fund and designated "Aromas Water District, Orchard Acres Assessment District, 2008 Limited Obligation Improvement Bonds, Series A, Prepayment Account," established and administered under Section 4.04 ofthe Fiscal Agent Agreement.

"Principal Office" means the corporate trust office of the Fiscal Agent in San Francisco, California, located at such address as shall be specified in a written notice by the Fiscal Agent to the District under Section 9.06 of the Fiscal Agent Agreement or such other office of the Fiscal Agent designated for payment, transfer or exchange of the Bonds.

"Project" means the acquisitions and improvements described in the Resolution oflntention.

"Record Date" means the fifteenth day of the calendar month immediately preceding the applicable Interest Payment Date.


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"Redemption Fund" means the fund designated "Aromas Water District, Orchard Acres Assessment District, 2008 Limited Obligation Improvement Bonds, Series A, Redemption Fund," established and administered under Section 4.04 of the Fiscal Agent Agreement.

"Reserve Fund" means the fund designated "Aromas Water District, Orchard Acres Assessment District, 2008 Limited Obligation Improvement Bonds, Series A, Reserve Fund," established and administered under Section 4.05 of the Fiscal Agent Agreement.

"Reserve Requirement" means as of any date of calculation, an amount not to exceed the lesser of (a) Maximum Annual Debt Service on the Outstanding Bonds; (b) 10% of the total of the proceeds of the Bonds deposited under Section 4.01 of the Fiscal Agent Agreement; or (c) average annual debt service on the Bonds.

"Resolution of Intention" means Resolution No. 2007-3 adopted by the Board on January 17, 2007.

"Resolution of Issuance" means Resolution No. 2008-04 adopted by the Board on February 26, 2008

"Securities Depository" means The Depository Trust Company, 711 Stewart Avenue, Garden District, New York 11530, Fax- (516) 227-4039 or 4190; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses or such other securities depositories as the District may designate in an Officer's Certificate delivered to the Fiscal Agent.

"Sinking Fund Payments" means amounts specified in Section 2.03 of the Fiscal Agent Agreement to be paid by the District with respect to any term Bonds, as they may be adjusted pursuant to Section 2.03 of the Fiscal Agent Agreement.

"Supplemental Agreement" means an agreement the execution of which is authorized by a resolution which has been duly adopted by the Board under the Bond Law and which agreement is amendatory of or supplemental to this Agreement, but only if and to the extent that such agreement is specifically authorized hereunder.

"Tax Code" means the Internal Revenue Tax Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable temporary and final regulations promulgated, and applicable official public guidance published, under the Tax Code.

"Term Bonds" means those Bonds maturing on September 2, 2028 and September 2, 2038.


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THE BONDS AND SECURITY FOR THE BONDS

Bond Terms

See the section in the main body of this Official Statement entitled "THE BONDS -General Provisions. "

Redemption

See the section in the main body of this Official Statement entitled "THE BONDS -Redemption. "

Registration. Transfer and Exchange

See the section in the main body of this Official Statement entitled "THE BONDS -General Provisions."

Pledge; Limited Obligation

See the section in the main body of this Official Statement entitled "SOURCES OF PAYMENT FOR THE BONDS."

No Acceleration

The principal of the Bonds shall not be subject to acceleration under the Fiscal Agent Agreement. Nothing in the Fiscal Agent Agreement in any way prohibits the redemption of Bonds or the defeasance of the Bonds and discharge of the Fiscal Agent Agreement, all as set forth in the Fiscal Agent Agreement.

Deposits of Bond Proceeds

The proceeds of the purchase of the Bonds received from the Original Purchaser (net of all discounts) will be paid to the Fiscal Agent, who will deposit and transfer such proceeds on the Closing Date in the funds and accounts, and in the amounts, set forth in the Fiscal Agent Agreement.

Costs of Issuance Fund

Establishment of Costs of Issuance Fund. The Costs of Issuance Fund is established under the Fiscal Agent Agreement as a separate fund to be held by the Fiscal Agent, to the credit of which a deposit shall be made as required by the Fiscal Agent Agreement. Moneys in the Costs of Issuance Fund shall be held by the Fiscal Agent for the benefit of the District and shall be disbursed as provided in the Fiscal Agent Agreement for the payment or reimbursement of Costs of Issuance.

Disbursement. Amounts in the Costs oflssuance Fund shall be disbursed by the Fiscal Agent from time to time upon receipt of an invoice from any party entitled to by paid from the Costs of Issuance Fund.

Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited as required by the Fiscal Agent Agreement. Interest earnings and profits resulting from such investment shall be retained by the Fiscal Agent in the Costs of Issuance Fund to be used for the purposes of such fund.


PageA-6

Closing of Fund.· The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of 90 days from the Closing Date and then the Fiscal Agent shall transfer any moneys remaining therein, including any investment earnings thereon, to the Improvement Fund and the Costs of Issuance Fund shall be closed.

Reserve Fund

Establishment and Use of Fund. See the section in the main body of this Official Statement entitled "SOURCES OF PAYMENT FOR THE BONDS-Reserve Fund."

Transfer of Excess of Reserve Requirement. Whenever, on any Interest Payment Date, or on any other date as determined by the Fiscal Agent, the amount in the Reserve Fund exceeds the then applicable Reserve Requirement, the Fiscal Agent shall, except as otherwise provided in the Fiscal Agent Agreement for purposes of rebate, transfer on or before such Interest Payment Date an amount equal to the excess from the Reserve Fund to the Fiscal Agent for deposit in the Redemption Fund to be used in accordance with Part 16 of the Bond Law as directed in an appropriate Officer's Certificate.

Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund is sufficient to retire all the Outstanding Bonds, whether by advance retirement or otherwise, collection of the principal and interest on the Assessments shall be discontinued and the Reserve Fund liquidated by the Fiscal Agent in retirement of the Outstanding Bonds, as directed by an Officer's Certificate. In the event that the balance in the Reserve Fund at the time of liquidation exceeds the amount required to retire all of the Outstanding Bonds, the excess shall after payment of amounts due to the Fiscal Agent, be transferred to the District to be used in accordance with the Act and the Bond Law.

Transfer Upon Payment of Assessments. Whenever, after the issuance of the Bonds, an Assessment is paid, in whole or in part, as provided in the Bond Law, the Fiscal Agent shall transfer from the Reserve Fund for deposit in the Redemption Fund an amount equal to the product of the ratio of the original amount of the Assessment securing any Bonds so paid to the original amount of all unpaid Assessments securing any Bonds, times the initial Reserve Requirement.

Investment. Moneys in the Reserve Fund will be invested and deposited in accordance with the Fiscal Agent Agreement. Interest earnings and profits resulting from such investment shall be retained in the Reserve Fund to be used for the purposes thereof, subject to the provisions of the Fiscal Agent Agreement.

Improvement Fund

Establishment. The Improvement Fund is established under the Fiscal Agent Agreement as a separate fund to be held by the Fiscal Agent for the benefit of the District and to the credit of which fund deposits shall be made as required by the Fiscal Agent Agreement. Moneys in the Improvement Fund shall be disbursed, except as otherwise described below, for the payment or reimbursement of costs of the Project.

Procedure for Disbursement. Disbursements from the Improvement Fund shall be made by the Fiscal Agent upon receipt of an Officer's Certificate which shall:

(i) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made, the person to which the disbursement is to be paid and state that such disbursement is a Project cost;


Page A-7

(ii) certify that no portion of the amount then being requested to be disbursed was set forth in any Officers Certificate previously filed requesting disbursement.

Investment. Moneys in the Improvement Fund shall be invested as required by the Fiscal Agent Agreement. Interest earnings and profits from such investment shall be retained in the Improvement Fund to be used for the purposes of such fund.

Closing of Fund. Upon the filing of an Officer's Certificate stating that the Project has been completed and that all costs of the Project have been paid or are not required to be paid from the Improvement Fund, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund as directed in such Officer's Certificate which directions shall be pursuant to the Resolution of Intention and to the applicable provisions of the Act and the Improvement Fund shall be closed.

COVENANTS

Collection of Assessments The District will comply with all requirements of the Act, the Bond Law and the Fiscal Agent Agreement so as to assure the timely collection of the Assessments, including without limitation, the enforcement of delinquent Assessments.

The Assessments as set forth on the list thereof on file with the General Manager together with the interest thereon, shall be payable in annual series corresponding in number and proportionate amount to the number of installments and principal amounts of the Bonds maturing or becoming subject to mandatory prior redemption. An annual proportion of each Assessment shall be payable in each Fiscal Year preceding the date of maturity or mandatory prior redemption date of each of the Bonds issued sufficient to pay the Bonds when due (including any Sinking Fund Payments thereon) and such proportion of each Assessment coming due in any year, together with the annual interest thereon, shall be payable in the same manner and at the same time and in the same installments as the general taxes on real property are payable, and become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the general taxes on real property. All sums received from the collection of the Assessments and of the interest and penalties thereon shall be transferred to the Fiscal Agent for deposit in the Redemption Fund.

The General Manager shall, before the final date on which the Auditor will accept the transmission of the Assessments for the parcels within the Assessment District for inclusion on the next tax roll, prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the installments of the Assessments on the next secured tax roll. The General Manager is authorized under the Fiscal Agent Agreement to employ consultants to assist in computing the installments of the Assessments thereunder and in reconciling Assessments billed to amounts received as provided in the Fiscal Agent Agreement.

In addition to any amounts authorized pursuant to section 8682 of the Bond Law to be included with the annual amounts of installments as aforesaid, the District, pursuant to section 8682.1 of the Bond Law, may cause to be entered on the assessment roll on which taxes will next become due, opposite each lot or parcel of land within the Assessment District in the manner set forth in said section 8682, each lot's pro rata share of the estimated annual expenses of the District in connection with the administrative duties thereof for the Bonds, including, but not limited to, the costs of registration, authentication, transfer and compliance with the provisions of the Fiscal Agent Agreement. Delinquent Assessments shall be subject to foreclosure pursuant to the Fiscal Agent Agreement.


. Page A-8

Enforcement of Delinquencies

See the section in the main body of this Official Statement entitled "SOURCES OF PAYMENT FOR THE BONDS-Covenant to Commence Foreclosure Proceedings."

Punctual Pavment

The District will punctually pay or cause to be paid the principal of (including Sinking Fund Payments), and interest and any premium on, the Bonds when and as due in strict conformity with the terms of the Fiscal Agent Agreement and any Supplemental Agreement, and it will faithfully observe and perform all of the conditions covenants and requirements of the Fiscal Agent Agreement and all Supplemental Agreements and of the Bonds.

Extension of Time for Payment

In order to prevent any accumulation of claims for interest after maturity, the District shall not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest is extended or funded, whether or not with the consent of the District, such claim for interest so extended or funded shall not be entitled, in case of default under the Fiscal Agent Agreement, to the benefits of the Fiscal Agent Agreement, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have so extended or funded.

Against Encumbrance

The District will not encumber, pledge or place any charge or lien upon any of the Assessments or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien created in the Fiscal Agent Agreement for the benefit of the Bonds, or their Owners, except as permitted by the Fiscal Agent Agreement, the Act or the Bond Law.

Books and Accounts

The District will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the District, in which complete and correct entries shall be made of all transactions relating to the Assessments and the application of amounts disbursed from the Improvement Fund, which records shall be subject to inspection by the Fiscal Agent upon reasonable prior notice on any Business Day.

Protection of Sccuritv and Rights of Owners

The District will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the delivery of any of the Bonds by the District, the Bonds shall be incontestable by the District.


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Compliance with Law; Completion of Project

The District will comply with all applicable provisions of the Act and the Bond Law in completing the acquisition and construction of the Project; provided that the District shall have no obligation to advance any funds to complete the Project in excess of the amounts available therefor in the Improvement Fund.

Further Assurances

The District will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Fiscal Agent Agreement, and for the better assuring and confirming unto the Owners of the rights and benefits provided in the Fiscal Agent Agreement.

Private Activitv Bond Limitation

The District shall assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of Section 14l(b) of the Tax Code or the private loan-financing test of Section 141 (c) of the Tax Code.

Federal Guarantee Prohibition

The District shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Bonds to be "federally guaranteed" within the meaning of Section l49(b) of the Tax Code.

Rebate Requirement

The District shall take any and all actions necessary to assure compliance with Section l48(t) of the Tax Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds.

No Arbitrage

The District shall not take, or permit or suffer to be taken by the General Manager, by the Fiscal Agent or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Tax Code.

Yield of the Bonds

In determining the yield of the Bonds to comply with the Fiscal Agent Agreement, the District will take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the District, as of the date of delivery of the Bonds, regarding prepayments of Assessments and use of prepayments for redemption of the Bonds, without regard to whether or not prepayments are received or Bonds redeemed.


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Maintenance of Tax-Exemption

The District shall take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the date of issuance of the Bonds.

INVESTMENTS: LIABILITY OF THE DISTRICT

Deposit and Investment of Moneys in Funds

Moneys in any fund or account created or established by the Fiscal Agent Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Authorized Investments, as directed pursuant to an Officer's Certificate filed with the Fiscal Agent at least two Business Days in advance of the making of such investments. The following shall apply to such investments:

(A) In the absence of any such Officer's Certificate, the Fiscal Agent shall invest any such moneys in Authorized Investments consisting of investments in a money market fund rated AAAm or AAAm-G or better by S&P, which may include funds for which the Fiscal Agent or its affiliates provide investment advisory or other management services, which by their terms mature prior to the date on which such moneys are required to be paid out under the Fiscal Agent Agreement. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account, subject, however, to the requirements of the Fiscal Agent Agreement for transfer of interest earnings and profits resulting from investment of amounts in funds and accounts;

(B) The Fiscal Agent may act as principal or agent in the acqms1!Jon or disposition of any investment. The Fiscal Agent shall incur no liability for losses arising from any investments made pursuant to the Fiscal Agent Agreement;

(C) Subject in all respects to the provisions of arbitrage provisions of the Fiscal Agent Agreement, investments in any and all funds and accounts may at the discretion of the Fiscal Agent be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent under the Fiscal Agent Agreement, provided that the Fiscal Agent shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in the Fiscal Agent Agreement;

(D) The Fiscal Agent shall sell at the highest price reasonably obtainable, or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited and the Fiscal Agent shall not be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance herewith; and

(E) For funds held by the General Manager, the foregoing provisions shall also apply, except that an Officer's Certificate shall not be required. For such funds the General Manager shall keep records or accounts of all expenditures or disbursements therefrom which records shall be available for inspection during business hours on any Business Day upon prior written request.


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Acquisition. Disposition and Valuation of Investments

Except as provided in the paragraph below, the District has covenanted in the Fiscal Agent Agreement that all investments of amounts deposited in any fund or account created by or pursuant to the Fiscal Agent Agreement, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Tax Code) shall be acquired, disposed of and valued (as of the date that valuation is required by the Fiscal Agent Agreement or the Tax Code) at Fair Market Value.

Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Tax Code and (unless valuation is undertaken at least annually) investments in the Reserve Fund shall be valued by the District at their present value (withjn the meaning of section 148 of the Tax Code).

Liability of District

General. The District shall not incur any responsibility in respect of the Bonds or the Fiscal Agent Agreement other than in connection with the duties or obligations explicitly therein or in the Bonds. The District shall not be liable to any Owner in connection with the performance of its duties under the Fiscal Agent Agreement, except for its own negligence or willful default. The District shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements of the Fiscal Agent in the Fiscal Agent Agreement or in any of the documents executed by the Fiscal Agent in connection with the Bonds, or as to the existence of a default or event of default thereunder.

Reliance. In the absence of bad faith, the District, including the General Manager, may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the District and conforming to the requirements of the Fiscal Agent Agreement. The District, including the General Manager, shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts.

No General Liability. No provision of the Fiscal Agent Agreement shall require the District to expend or risk its own general funds or otherwise incur any financial liability (other than with respect to the foreclosure proceedings for delinquent Assessments and the payment of fees and costs of the Fiscal Agent) in the performance of any of its obligations under the Fiscal Agent Agreement, or in the exercise of any of its rights or powers.

Owner of Bonds. The District shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto satisfactorily established, if disputed.

Employment of Agents by District

In order to perform its duties and obligations under the Fiscal Agent Agreement, the District may employ such persons or entities as it deems necessary or advisable. The District shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith under the Fiscal Agent Agreement, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities.


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MODIFICATION OR AMENDMENT

Amendments Permitted

Amendments with Owner Consent. The Fiscal Agent Agreement and the rights and obligations of the District and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of Owners, or with the written consent without a meeting, of the Owners of at least 60% in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in the Fiscal Agent Agreement.

No such modification or amendment shall (i) extend the maturity of any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the District to pay the principal of, and

· the interest and any premiwn on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation by the District of any pledge or lien upon the Assessments superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, the Resolution, the laws of the State of California or the Fiscal Agent Agreement), or reduce the percentage of Bonds required for the amendment of the Fiscal Agent Agreement.

Amendments Without Owner Consent. The Fiscal Agent Agreement and the rights and obligations of the District and of the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes:

(i) to add to the covenants and agreements of the District in the Fiscal Agent Agreement, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power reserved to or conferred upon the District in the Fiscal Agent Agreement;

(ii) to make modifications not adversely affecting any outstanding series of Bonds of the District in any material respect;

(iii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the Fiscal Agent Agreement, or in regard to questions arising under the Fiscal Agent Agreement, as the District and the Fiscal Agent may deem necessary or desirable and not inconsistent with the Fiscal Agent Agreement, and which shall not adversely affect the rights of the Owners of the Bonds; or

(iv) to make such additions, deletions or modifications as may be necessary or desirable to assure exclusion from gross income for federal income tax purposes of interest on the Bonds.

Fiscal Agent's Consent. Any amendment of the Fiscal Agent Agreement may not modify any of the rights or obligations of the Fiscal Agent without its written consent.

Owners' Meetings

The District may at any time call a meeting of the Owners. In such event the District is authorized to fix the time and place of said meeting and to provide for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of said meeting.


Page A-13

Procedure for Amendment with Written Consent of Owners

The District and the Fiscal Agent may at any time adopt a Supplemental Agreement amending the provisions of the Bonds or of the Fiscal Agent Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by the Fiscal Agent Agreement, to take effect when and as described in this section.

A copy of such Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, by the Fiscal Agent, to each Owner of Bonds Outstanding, but failure to mail copies of such Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as described below.

Such Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least 60% in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in the Fiscal Agent Agreement) and a notice shall have been mailed as described below. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by the Fiscal Agent Agreement. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice described below has been mailed.

After the · Owners of the required percentage of Bonds have filed their consents to the Supplemental Agreement, the District shall mail a notice to the Owners in the manner described below for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of the papers required by this provision to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise specifically provided in the Fiscal Agent Agreement) upon the District and the Owners of all Bonds at the expiration of 60 days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such 60-day period.

Disqualified Bonds

Bonds owned or held for the account of the District, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or. other action or any calculation of Outstanding Bonds provided for in the ·Fiscal Agent Agreement, and shall not be entitled to vote upon, consent to, or take any other action provided for in the Fiscal Agent Agreement.

Effect of Supplemental Agreement

From and after the time any Supplemental Agreement becomes effective under the Fiscal Agent Agreement, the Fiscal Agent Agreement shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under the Fiscal Agent Agreement of the District


Page A-14

and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced under the Fiscal Agent Agreement subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of the Fiscal Agent Agreement for any and all purposes.

Endorsement or Replacement of Bonds Issued After Amendment

The District may determine that Bonds issued and delivered after the effective date of any action taken as provided in this provision of Fiscal Agent Agreement shall bear a notation, by endorsement or otherwise, in form approved by the District, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and upon presentation of his Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the District may select and designate for that purpose, a suitable notation shall be made on such Bond. The District may determine that new Bonds, so modified as in the opinion of the District is necessary to conform to such Owners' action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds.

Arnendatorv Endorsement of Bonds

These provisions shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds.

DISCHARGE OF AGREEMENT

If the District pays and discharges the entire indebtedness on all Bonds Outstanding in any one or more of the following ways:

(A) by paying or causing to be paid the principal of (including any Sinking Fund Payments) and interest and any premium on, all Bonds Outstanding, as and when the same become due and payable;

(B) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts provided for in the Redemption Fund and the Reserve Fund is fully sufficient to pay all Bonds Outstanding, including all principal, interest and redemption premiums; or

(C) by irrevocably depositing with the Fiscal Agent, in trust, cash and/or Federal Securities in such amount as the District shall determine, as confirmed by an independent certified public accountant, will, together with the interest to accrue thereon and moneys then on deposit in the fund and accounts provided for in the Redemption Fund and the Reserve Fund (to the extent invested in Federal Securities), be fully sufficient to pay and discharge the indebtedness on all Bonds (including all principal, Sinking Fund Payments, interest and applicable redemption premiums) at or before their respective maturity dates; If . such Bonds are to be redeemed prior to the maturity thereof, and notice of such redemption shall have been given as in the Fiscal Agent Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the. giving of such notice, then, at the election of the District, and notwithstanding that any Bonds have not been surrendered for payment, the pledge of the Assessments and other funds provided for in the Fiscal Agent Agreement and all other obligations of the District under the Fiscal Agent Agreement with respect to all Bonds Outstanding shall cease and terminate, except only the obligation of the District to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due


Page A-15

thereon, the obligation of the District to assure that no action is taken or failed to be taken if such action or failure adversely affects the exclusion of interest on the Bonds from gross income for federal income tax purposes, and all amounts owing to the Fiscal Agent pursuant to the Fiscal Agent Agreement; and thereafter Assessments shall not be payable to the Fiscal Agent. Notice of such election shall be filed with the Fiscal Agent. Any funds thereafter held by the Fiscal Agent upon payments of all fees and expenses of the Fiscal Agent, which are not required for said purpose, shall be paid over to the District to .be used by the District as provided in the Act and the Bond Law.

Execution of Documents and Proof of Ownership by Owners

Any request, declaration, ·Consent or other instrument which the Fiscal Agent Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing.

Except as otherwise expressly provided in the Fiscal Agent Agreement, the fact and date of the execution by any Owner or his attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer.

The ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the registration books maintained by the Fiscal Agent under the Fiscal Agent Agreement.

Any consent, request, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the District or the Fiscal Agent in good faith and in accordance therewith.


Page A-16

http://to.be

APPENDIXB

FORM OF BOND COUNSEL OPINION

Law Of/ice of

ROBERT M. HAIGHT ATTORNEY AT LAW

Municipal Bond Counsel

March 13, 2008

The Honorable Board of Directors Aromas Water District 387 Blohm Avenue Aromas, California 95004

Opinion: $495,000 Aromas Water District Orchard Acres Assessment District 2008 Limited Obligation Improvement Bonds, Series A

Members of the Board:

We have acted as Bond Counsel in connection with the issuance by the Aromas Water District (the "District"), of the District's 2008 Limited Obligation Improvement Bonds captioned above, dated as of March 13, 2008 (the "Bonds"), under the Improvement Bond Act of 1915 Division I 0 of the California Streets and Highways Code (the "Bond Law"), a Resolution of the District adopted February 26, 2008 and a Fiscal Agent Agreement, dated as of March I, 2008 (the "Fiscal Agent Agreement"), between the District and Union Bank of California, N.A., as fiscal agent. We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion.

As to questions of fact material to our opinion, we have relied upon representations of the District contained in the Fiscal Agent Agreement, and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify such facts by independent investigation.

Based upon our examination, we are of the opinion, under existing law, that:

I. The District is duly created and validly existing as a County Water District and a public corporation of the State of California pursuant to the Water Code, with power to enter into the Fiscal Agent Agreement, perform the agreements on its part contained therein, and issue the Bonds.

OFFICIAL STATEMENT FORM OF BOND COUNSEL OPINION

Page B-1

2. The Fiscal Agent Agreement has been duly approved by the District and constitutes a valid, legal and binding obligation of the District enforceable upon the District.

3. Pursuant to the Bond Law, the Fiscal Agent Agreement creates a valid lien on the funds pledged by the Fiscal Agent Agreement for the security of the Bonds, subject to any existing prior liens granted under the Bond Law.

4. The Bonds have been duly authorized, executed and delivered by the District and are valid and binding special obligations of the District, payable solely from the sources provided therefor in the Fiscal Agent Agreement.

5. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining certain income and earnings. The opinions set forth in the preceding sentences are subject to the condition that the District comply with all requirements of the Tax Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The District has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds.

6. The District has designated the Bonds "Bank Qualified" for purposes of paragraph (3) of Section 265(b) of the Internal Revenue Code.

7. The interest on the Bonds is exempt from personal income taxation imposed by the State of California.

The rights of the owners of the Bonds and the enforceability of the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and may also be subject to the exercise of judicial discretion in appropriate cases.

Respectfully submitted,

ROBERT M. HAIGHT

OFFICIAL STATEMENT FORM OF BOND COUNSEL OPINION

Page B-2

APPENDIXC

ASSESSMENT PARCEL LISTING

The following table contains the Assessment Parcels as of March 2008. The information concerning the ownership was obtained from the County and other sources which arc believed to be reliable, but such information is not guaranteed as to accuracy or completeness, nor has it been independently verified and is not to be construed as a representation by the Underwriter or the District.

AROMAS WATER DISTRICT ORCHARD ACRES ASSESSMENT DISTRICT

2008 Limited Obligation Improvement Bonds, Series A

ASSESSMENT PARCEL LISTING

Diagram & Assessment

Number APN Bond Lien Land( I) Improvement(l) Total

11-230-006 $62,272 $188,060 $269,526 $457,586

2 11-230-007 $62,272 $137,909 $233,315 $371,224

3 11-230-043 $62,272 $234,029 $479,764 $713,793

4 11-230-042 $62,272 $194,502 $267,444 $461,946

7 11-290-073 $62,272 $663,600 $0 $663,600

8 11-290-074 $62,272 $390,150 $0 $390,150

10 11-290-076 $62,272 $50,392 $0 $50,392

11 11-300-014 $62,272 $102,002 $102,002 $204,004

Totals: $498,176 $1,960,643 $1,352,051 $3,312,695

!ll Assessed Value per San Benito County Assessor (l) Source: San Benito County Assessor

OFFICIAL STATEMENT ASSESSMENT PARCEL LISTING

Page C-1

Last Value to Transfer

Lien Date<'>

7.35:1 2006

5.96:1 1995

11.46:1 1999

7.41 :1 1998

10.65:1 2006

6.26:1 2005

0.81 :1 1980

3.27:1 2004

6.64:1


APPENDIXD

DTC AND THE BOOK-ENTRY-ONLY SYSTEM

THE INFORMATION IN THIS SECTION CONCERNING THE DEPOSITORY TRUST COMPANY, NEW YORK, NEW YORK ("DTC") AND DTC'S BOOK-ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM SOURCES THAT THE BOARD, THE STATE TREASURER THE REGENTS AND THE UNDERWRITERS BELIEVE TO BE RELIABLE, BUT THE BOARD, THE STATE TREASURER, THE REGENTS AND THE UNDERWRITERS TAKE NO RESPONSIBILITY FOR THE ACCURACY HEREOF. THE OWNERS SHOULD CONFIRM THE FOLLOWING INFORMATION WITH DTC OR THE DTC PARTICIPANTS (AS HEREINAFTER DEFINED). THE CURRENT "RULES" APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION AND THE CURRENT "PROCEDURES" OF DTC TO BE FOLLOWED IN DEALING WITH DTC PARTICIPANTS ARE ON FILE WITH DTC.

DTC will act as securities depository for the Certificates. The Certificates will be issued as fully registered securities in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Certificate will be issued for each maturity of the Certificates, in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934, as amended. DTC holds securities that its participants ("Direct Participants") deposit with DTC. DTC also facilitates the settlement among Direct Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized bookentry changes in Direct Participants' accounts, thereby eliminating the need for physical movement of securities Certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Direct and Indirect Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of Certificates under the DTC system must be made by or through Direct Participants, which will receive a credit for the Certificates on DTC's records. The ownership interest of each actual purchaser of each Certificate ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Owners will not receive written confirmation from DTC of their purchase, but Owners are expected to receive written confirmation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Certificates are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Owners. Owners will not receive Certificates representing their ownership interests in Certificates, except in the event that use of the book-entry only system for the Certificates is discontinued.

OFFICIAL STATEMENT DTC AND THE BOOK-ENTRY-ONLY SYSTEM

Page D-1

http://www.dtcc.com

To facilitate subsequent transfers, all securities deposited by Direct Participants with DTC are registered in the name ofDTC's partnership nominee, Cede & Co. (or such other name as requested by an authorized representative of DTC). The deposit of Certificates with DTC and their registration in the name of Cede & Co. do not effect any change in Ownership. DTC has no knowledge of the actual Owners of the Certificates; DTC' s records reflect only the identity of the Direct Participants to whose accounts such Certificates are credited, which may or may not be the Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Owners of the Certificates may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Certificates, such as redemptions, tenders, defaults, and proposed amendments to the Certificate documents. Owners of Certificates may wish to ascertain that the nominee holding the Certificates for their benefit has agreed to obtain and transmit notices to Owners.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices shall be sent to DTC. Ifless than all of the Certificates within a maturity arc being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (or such other DTC nominee) will consent or vote with respect to Certificates unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an omnibus proxy (the "Omnibus Proxy") to the Board as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the 'certificates are credited on· the record date (identified in a listing attached io the Omnibus Proxy).

Principal and interest payments on the Certificates will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the State Treasurer on the payment date in accordance with their respective holdings shown on DTC's records. Payments by Direct and Indirect Participants to Owners will be governed by standing instructions and customary practices, as is the case with securities held for ·the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Direct and Indirect Participant and not of DTC (or its nominee), the State Treasurer or the Board, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the State Treasurer or the Board, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Owners shall be the responsibility of Direct and Indirect Participants.

The Board and the State Treasurer may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Certificate Certificates will be printed and delivered. DTC may discontinue providing its services as securities depository with respect to the Certificates at any time by giving reasonable notice to the Board or the State Treasurer. Under such circumstances, in the event that a successor securities depository is not obtained, Certificate Certificates are required to be printed and delivered.


Page D-2

SO LONG AS CEDE & CO. IS THE REGISTERED HOLDER OF THE CERTIFICATES, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE OWNERS OR OWNERS OF THE CERTIFICATES (OTHER THAN UNDER THE CAPTION "TAX MATTERS" HEREIN) SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE OWNERS OF THE CERTIFICATES.

NONE OF THE STATE TREASURER, THE BOARD, THE REGENTS OR THE UNDERWRITERS HAS ANY RESPONSIBILITY OR OBLIGATION TO DTC DIRECT PARTICIPANTS, TO INDIRECT PARTICIPANTS, OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DTC DIRECT PARTICIPANT, OR INDIRECT PARTICIPANT, (II) THE DELIVERY OF ANY NOTICE THAT IS PERMITTED OR REQUIRED TO BE GIVEN TO THE OWNERS OF THE CERTIFICATES UNDER THE TRUST AGREEMENT, (III) THE SELECTION BY DTC OR ANY DTC DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE CERTIFICATES, (IV) THE PAYMENT BY DTC OR ANY DTC DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OR REDEMPTION PREMIUM, IF ANY, OR INTEREST DUE WITH RESPECT TO THE CERTIFICATES, (V) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE REGISTERED HOLDER OF CERTIFICATES, OR (VI) ANY OTHER MATTER.

THE STATE TREASURER, SO LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE CERTIFICATES, WILL SEND ANy NOTICE OF REDEMPTION OR OTHER NOTICES ONLY TO DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC DIRECT OR INDIRECT PARTICIPANT, OR OF ANY DTC DIRECT OR INDIRECT PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OR SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE CERTIFICATES CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.


Page D-3


APPENDIXE

SUPPLEMENTAL INFORMATION THE AROMAS WATER DISTRICT

The following information concerning the Aromas Water District, California (the "District'') and

surrounding areas is included for the purpose of supplying general information regarding the community.

The Bonds are not a debt of the District, the County, the State of California (the "State'') or any of its

political subdivisions, and neither the District, the County, the State nor any of its political subdivisions is liable therefor.

General Description

The Aromas Water District was formed in 1959 under the State of California Water Code (Division

12, Section 30000 et seq.) as a County Water District. The District is located 16 miles north of the City of

Salinas. The District is approximately 20 square miles and provides water service to most of the

unincorporated area of Aromas (population 3,500) and a portion of the unincorporated area west of the City

of San Juan Bautista.

The District utilizes groundwater to serve its customers. The groundwater is stored in the Aromas

Red Sands aquifers. Rainfall is the source of recharge to these aquifers. Studies conducted by Woodward

Clyde Consultants, Groundwater Management Consultant to the District, indicate that the groundwater basin

contains some 9,734 acre feet of water (approximately 3,171 billion gallons). These studies have indicated

that the perennial safe yield of the basin is 1,833 acre feet per year (approximately .537 billion gallons). The

District, the private, domestic, industrial and agriculture which shares the use of the aquifers, and private

wells use less than 90% of that perennial safe yield in each year.

The District has 19 miles of water mains, 3 deep-water wells, I 0 storage tanks, 4 Pressure Booster

Stations, an Iron and Manganese Removal Treatment Plant and no wastewater facilities.

The District is staffed by 6 people. The field staff average 7 years experience. The General Manager

has over 5 years experience in water district management.

The Water System

As of June 30, 2007, the District had all of the following:

I. 799 active water meter connections.

2. I fire sprinkler connection.

3. 14 metered vacant lots.

4. 34 meters sold but inactive.

OFFICIAL STATEMENT FAIR MARKET ESTIMATE OF VALUE-AROMAS WATER DISTRICT

Page E-1

This District currently has a total of 3 wells with a combined capacity of 1199 gallons per minute or

1.736 MG gallons per day, as shown in TABLE 3. The average daily demand for the year 2007 was 254

gallons per minute or 365,918 gallons per day.

WELL NAME

Pleasant Acres

Carpenteria

San Juan

TABLE3

AROMAS WATER DISTRICT PRODUCTION WELLS

JULY 1, 2007

CAPACITY (GPM)

379

120

700

CAPACITY (MGD)

.550

.170

1.010

*Standby Wells and Capacities are not included

years.

TABLE 4 sets forth the annual well production for all ofthe District's wells for the last five (5)

YEAR

2003

2004

2005

2006

2007

TABLE4

AROMAS WATER DISTRICT ANNUAL WELL PRODUCTION

JULY 1, 2007

TOTAL (GAL.)

120.5 MG

122.4

123.2

127.42

133.56

OFFICIAL STATEMENT

TOTAL

(ACRE FEET)

370AF

376

378

391

409

FAIR MARKET ESTIMATE OF VALUE- AROMAS WATER DISTRICT Page E-2

The District currently maintains 10 storage tanks with 875,500-gallon capacity, as shown m

TABLES.

TABLES

AROMAS WATER DISTRICT WATER STORAGE TANKS

JULY I, 2007

NAME CAPACITY IN GALLONS

Pine Tree I 200,000

Cole 212,000

Rancho Larios 240,000

Carr I 90,000

Carr2 15,500

Ballantree I 15,000

Ballantree 2 15,000

Rca 60,000

School I 15,000

School2 15,000

The number of active water connections from 2003 to 2007 is shown in TABLE 6.

TABLE6

AROMAS WATER DISTRICT NUMBER OF ACTIVE WATER SERVICES

YEAR NUMBER (JULY)

2003 736

2004 775

2005 800

2006 804

2007 799

Water provided by the District meets or exceeds the strict requirements of both the State of

California Department of Health Services and the Federal Safe Drinking Water Standards. The District has

never been cited by the California Water Quality Board.

OFFICIAL STATEMENT FAIR MARKET ESTIMATE OF VALUE- AROMAS WATER DISTRJCT

Page E-3

Water Rates

TABLE 7 sets forth the currently effective connection charges, while TABLE 8 sets forth the

currently effective monthly water commodity charge. TABLE 9 sets forth the monthly service charge based

upon the size of the customers' meter.

TABLE?

AROMAS WATER DISTRICT CONNECTION CHARGES

SIZE JULY 1, 2007 5/8" X 3/4" 8,976

I" 22,440 1-112" 44,880

2" 71,808 3" 134,640 4" 224,400

TABLES

AROMAS WATER DISTRICT MONTHLY WATER COMMODITY CHARGE

(DOLLARS PER 100 CUBIC FEET PER MONTH)

MONTHLY CONSUMPTION JULY 1, 2007 (IN CUBIC FEET)

0-200 $1.729

201-2000 $2.881

2001 + $4.034

TABLE9

AROMAS WATER DISTRICT MONTHLY SERVICE CHARGE

SIZE JULY 1, 2007

5/8" X 3/4" $25.95 through 3" inclusive $389.25

FIRE SERVICES $25.00

OFFICIAL STATEMENT FAIR MARKET ESTIMATE OF VALUE- AROMAS WATER DISTRICT

Page E-4

Top Ten Water Users

TABLE 10 sets forth the top ten water users in the District.

TABLE 10

AROMAS WATER DISTRICT TOP TEN WATER CONSUMERS

ACCOUNT CONSUMPTION DOLLAR NUMBER {IN CUBIC FEET) AMOUNT<'>

990000 32,500 CF $1,273

191000 18,000 $725

775000 15,500 $648

701000 11,700 $475

140000 6,400 $276

905101 6,400 $250

904900 5,450 $210

194000 4,000 $201

901900 4,700 $179

903701 4,300 $162

TOTAL 108,950 $4,398 (1) Includes monthly servtcc charge

Assessed Valuation and Property Taxes

Property in the District is assessed by the County Assessor. All ad valorem taxes levied on property

in the District by the County, schools and special districts are due at the same time and are based on the same

rolls as county taxes. The valuation of secured property is established as of January 1 of each year and is

equalized for purposes of establishing tax rates in August. Ad valorem taxes on secured and utility property

are payable on November 1 and March 1 of each fiscal year and become delinquent on December 10 and

April 10, respectively. Taxes on unsecured property (personal property and leaseholds) are due on April 15 of

each year based on the preceding year's tax rate.

OFFICIAL STATEMENT FAIR MARKET ESTIMATE OF VALUE- AROMAS WATER DISTRICT

Page E-5


Aromas Water District 387 Blohm Avenue Aromas, Ca. 95004

APPENDIXF

FAIR MARKET ESTIMATE OF VALUE OF ROBERT E. CLARK REALTY

ROBERTE.CLARK,REALTOR P.O. BOX 124

FELTON, CA. 95018 (831) 433-4446

FEBRUARY 4, 2008

Dear Members of the Aromas Water Board:

In accordance with your request I have reviewed and made current valuations on the eleven (II) rural properties located in the Orchard Acres Assessment District. This Assessment District is located off Highway I in the eastern part of Aromas in San Benito County. Seven of the parcels in this assessment district are improved and four are unimproved properties.

Comparable sold properties in the Aromas area in San Benito County and the Aromas areas situated in Santa Cruz County and Monterey County were used to help ascertain current valuations on these eleven (11) parcels in this proposed assessment district. Comparables used are attached to this valuation packet. Also the following web sites were used: Reil.com and Zillow.com. All the properties are located in Aromas, Ca. 95004, San Benito County.

Current valuations on the subject properties are as follows:

I) APN: 11-230-006-04.55 acres, 203 Chateau Drive=$ 755,000 (improved) 2) APN: 11-230-007-03.27 acres, 205 Chateau Drive = $825,000 (improved) 3) APN: 11-230-043 - 07.16 acres, 215 Chateau Drive = $ 900,000 (improved) 4) APN: 11-230-042 - 06.90 acres, 225 Chateau Drive = $ 839,000 (improved) 5) APN: 11-290-002- 10.23 acres, Chateau Drive = $550,000 (unimproved) 6) APN: 11-290-004- 13.34 acres, 220 Chateau Drive = $875,000 (improved) 7) APN: 11-290-073-25.11 acres, Chateau Drive = $700.000 (unimproved) 8) APN: 11-290-074- 14.07 acres, Private Road off Chateau Drive= $575,000 (unimproved) 9) APN: 11-290-075-05.00 acres, Chateau Drive = $425,000.(unimproved) 10) APN: 11-290-076-04.73 acres, Chateau Drive = $425.000 (unimproved) II) APN: 11-300-014-05.76 acres, Cannon Road = $725,000 (improved)

http://Reil.com

http://Zillow.com

The following comparables were used to help in the valuation of the unimproved properties:

APN: 117-043-009 - IO acres, sold 03/08/06, sales price $509,000 (row crop land with distant ocean views).

APN: 117-471-006- 5.6 acres, sold 06/10/06, sales price $500,000 (usable foundation, 2300 square feet from previous dwelling that burnt down. Has well and a septic system.

APN: 113-041-013- 11.56 acres, sold 06/30/05, sales price $500,000 (frontage on Espinosa Lake. Has well)

APN: 181-211-008- 5 acres, sold 09/28/06, sales price $300,000. This property has similar slopes like some of the subject properties.

APN: 181-211-010 - 5 acres, sold 06/08/06, sales price $489,000. Years ago this property was farmed. Has well and paved road.

APN: 129-141-053- 7 acres, sold 09/16/05, sales price $320,000. Property has steeper slopes than some of the subject properties, but does have building sites.

APN: 131-131-009- 5 acres, sold 09/26/06, sales price $435,000. 2 acres level to gradual and moderate slopes. Paved road and well in place.

APN: 131-041-022- 10 acres, sold 01/26/06, sales price $700,000. This is · the sale of tWo separate parcels that were sold together. Paved road, needs well.

APN: 412-011-041 - 6.42 acres, sold 02/24/06, sales price $418,000. This is an average size parcel like some of the subject properties, but with more levelland. Has paved road and mutual water system.

APN: 129-201-051 - 10 acres, sold 12/15/06, sales price $505,000. Has distant ocean views with moderately sloping land. Has mutual water system.

Comparables used to help in the current valuation of the improved properties in this assessment district are attached and made part of this valuation packet.

V e!}' truly yours,

&CA/4t. {}~ Robert E. Clark, :Realtor REC/dmm

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PTN. ORCHARD ACRES SU801VISION

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11!!11 1375 COLE RD, AROMAS 95004 (Aromas) 11M $755,000 Beds: 2 bed(s) Baths: 2 bath(s)

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CA

" "-" " fl.lmi a.

!.:· 2UUf: Tdc Alb..~. Rd. (~'20fl6

Remark~

DOM: 10 CDOM: 10 MLS: 614159

Property Overview 1375COLE RD AROMAS (Aromas) 95004 Aromas (Area 185)

San Benito County Detached Single Family (Class 1)

Bed/Bath: 212

SqFt: 1470 (Seller)

Lot Size: 4.75 ac

Age: 33 years

Assoc Fee: Parcel#: 011-220-022

Commission: 2.50%

Private Aromas location behind a gated en!rance and situated on almost 5 acres This property offers roorn for horses. fireplace. large pantry, indoor laundry. unfinished basement, bam, seasonal pond and easy access to highway 101! Prlvate : ORTC·S1ella UB on gate wlgate key & house key Dogs friendly Call Me Please

Oates List: 0311412006

0311412006 0312412006 0412112006 03/0312007

Pricing List: $769,000

$769,000 $755,000

Schools/Districts Elem: -1··

Original: Sale: COE: Expires: OffMarket:

Tour Information Tour1: Assoc 1: Tour 2: Assoc2: Original: Remark!S:

Property Features Family room

Informal Dining Area No Informal Dining Area Other Rooms

Bedroom Descriptions

Shower And Tub 2 or More Showers over Tubs Shower

Original: Sale:

Showing Information Occupant: CALL Listing Agenl Occupied By:Owner Phone: 831-334-9500 OWner: Add'l Owner: -Instructions: Call listing Agent, Do Not

Disturb Occupants, Locked Main Entrance Gate, Restricted Hours, Supra Keysafe

Middle: High:

Map X-street: Barclay: Thomas

Other Areas Floor Covering(S) Linoleum or Vinyl

Lot Description Extra Storage Laundry Area - Inside Pantry Partial Basement Fireplace Location Fireplace in living Room Cooling No Cooling Heating Central Forced Air Heat Propane Gas Heat Heat-See Fireplace

Wall to Wall Carpeting Amenities 220 Volts in Laundry Area Double Pane Windows Gas Hookup in Kitchen Gas Water Heater

Has Pool No Pool View View of Mountains

Listing Agent/Office lnrormation

-1-

Carr or HWY 101 Pg: - Hz: - VI: -Pg: 1017 Grid: 07

Garage/Parking Electric Door or Gate Opener No Garage/Parking RV or Boat Parking Uncovered Yards/Grounds Barn Deck Fenced Yard Horse(s) Permitted Patio or Deck Covered

Katie A. Smith (DRE#01292413) Pref Phone: 831-334-9500, Email: [email protected] David Lyng & Associates Selling Agent/Office information Jerry Kiss (DRE#00987021) lntero Real Estate SeNices

•• Information contained on this report is designed for accuracy but is not guarantee<! u

mailto:[email protected]

1J1!W 1097 CANNON RD, AROMAS 95004 (Aromas) U $769,000 Beds: 3 bed(s) Baths: 2 bath(s)

CA

* Unll3n1Cd St

{I IJ.ln:i ~.·, 2U06 Tt:k• Ada.,., Rei. O-l'21MI6

Remarks

DOM: 70 CDOM: 70 MLS: 571512

Property Overview 1097 CANNON RD

AROMAS (Aromas) 95004

Aromas (Area 185)


Bed/Bath: 3/ 2

SqFt: 1500 (Seller)

Lot Size: .5+ to 1 Acre Age: 20 years

Assoc Fee: Parcel#:

Commission:

011-230-031

2.50%

Country delight in Aromas. Charming 3 bedroom, 2 fu1t bath w/2 c.3r garage Country kitchen combo family room with firepa!ce. Seperate living room w/ pellet stove. Nice dedc.,Pretty views. useable land for animals. Private : Easy to show, can leave message and go or call UA 320-9676

Dates list Original:

12/15/2005 12115/2005 02/2312006 03123/2006 03/28/2006


$769,000 $769,000

Schools/Districts Elem: -/

__ ,_ Sale: COE: Expires: OffMarket:

Tour Information Tour 1: Assoc 1: Tour 2: Assoc2: Original:

Original: Sale:

Showing Information Occupant: michelle/brian Occupied By:Owner Phone: 831-726-7262 Owner: michelle Add'l Owner: -

Middle: High:


Remarks: Instructions: Appointment Only, Supra Keysafe

Property Features Family room Family Room Kitchen Separate Family Room Informal Dining Area

Other Rooms

Bedroom Descriptions 1 Master Bedroom Suite Shower And Tub

Shower 1 Slall Shower

Other Areas Floor Coverlng(S) Extra Storage Area Carpeting Laundry Area -Garage Hardwood Fireplace Location Amenities Fireplace in Family Room Fireplace in Living Room Cooling No Cooling Heating Central Forced Air Heat Heat-See Fireplace

Listing Agent/Office Information Alisa Elder (DRE#01205324) Country Properties & Estates Selling Agent/Office information Patty Thompson (DRE#01212424) Country Properties & Estales

Lot Description level lot Has Pool

View Neighborhood View View of Mountains Valley View

Pref Phone: -. Email: -

brown rd Pg: Hz:-Pg:- Grid:-

Garage/Parking 2 Car Garage Artached

Vt:-

RV or Boat Parking Yards/Grounds Deck Fenced Yard Other livestock Permitted

01 Information contained on this report is designed for accuracy but is not guaranteed ••

... 1369 CARR, AROMAS 95004 (Aromas) • $830,600 Beds: 3 bed(s) Baths: 2 bath(s)

Htilr~w.1y

U II. l llli !:- 211U6 T1.:!c :\!h.;. Rd. H7/21Kl6

Remarks

CA

DOM: 23 CDOM: 23 MLS: 510601

Property Overview 1369CARR AROMAS (Aromas) 95004 Aromas (Area 185) San Benito County Detached Single Family (Class 1)

Bed/Bath: 3/2 SqFt: 2400 (Seller)

Lot Size: 5.46 ac Age: Assoc Fee: Parcel#;

Commission:

30 years

011-170-013 2.00%

BEAUTIFUL. SETIING ON 5+ ACRES. SET UP FOR HORSES OR THAT 4-H PROJECT NEW SEPTIC, WATER HEATER, FURNESS, FAUCETS. ROOF 13 YEARS OLD, NC AROMAS WATER, PG&E GAS. OUT BUILDINGS, NEW PAVED DRIVE WAY. Private: STEWART TITLE-#770315-KARRYL-831-636-5884. VACANT/LOCK BOX, GO SHOW

Dates List Original: Sale: COE: Expires: OffMarket:

Tour Information

03/07/2005 03/07/2005 03/30/2005 05115/2005 09/07/2005

Tour 1: 03/10/2005 Assac 1: Tour 2: Assoc 2: Original: 03/10/2005 Remarks:

Property features Famllyroom Family Room Kitchen Informal Dining Area

Other Areas

Pricing List: Original: Sale:

$880,000 $880,000 $830,600

Showing Information Occupant: Occupied By: Vacant Phone: Owner: Huning Add'l Owner: Instructions: Go Direct, Supra Keysafe

Schools/Districts Elem: Middle: High:

Map X~street: Barclay: Thomas

Anzar Rd. Pg:- Hz:-Pg:- Grid:-

-1-

-1-

Floor Covering(S) linoleum or Vinyl

Lot Description Garage/Parking 2 Car Garage Attached Has Pool

Vt: --

Other Rooms Utility Room

Laundry Area ~ Inside Fireplace Location Fireplace in Living Room Cooling Central Air Conditioning Healing

Wall to Wall Carpeting Amenities

View RV or Boat Parking Yards/Grounds Greenhouse

Bedroom Oescriptions 1 Master Sed room Suite Shower Arid Tub 1 Shower over Tub Shower

Central Forced Air Heat Gas Heat

Listing Agent/Office Information

Patio Stable

Dave Baumgartner (DRE#00843407) Pref Phone: 831-637-1148, Email: [email protected] Baumgartner Realty Selling Agent/Office information Dave Baumgartner (DRE#00843407) Baumgartner Realty

··Information contained on this report is designed for accuracy but is not guaranteed u

~~ 500 SEELY AV, AROMAS 95004 (Aromas) $660,000 MLS: 628647 DOM: 206 CDOM: 206

Property Features Famllyroom No Family Room

Property Overview Area: Aromas (Area 185) Bed/Bath: 3/1 Age: SqFt: 1 ,460 Lot:

Remarks

99 years 2.43 ac

Pricing/Dates List: $719,000 05/16/2006 Original : $879,000 05/16/2006 OffMktDate:01/24/2007 Sold $660,000 12/08/2006 (Closed Sale)

A RARE FIND!JI "ROSE FARM' 102 YR OLD FARMHOUSE ON 2.43 ACRES IN AROMAS SURROUNDED BY FLOWERING SHRUBS/ROSES/HERBS/MATURE TREES. PROPERTY INCLUDES RUSTIC STUDIO UNIT & OLD BARN WITH GUEST QTRS./SOLD "AS-IS'

Informal Dining Area Formal Dining Area Pool Options No Formal Dining Area

Garage/Parking Guest Parking

a 438 PINE TREE AV, AROMAS 95004 (Aromas) $840,000 MLS: 669806 DOM: 197 CDOM: 197

Property Features Familyroom Dining Area in Family Room

Property Overview Area: Aromas (Area 185) Bed/Bath: 4 /2 1/2 Age: SqFt: 2,200 Lot:

Remarks

9 years

158,994 sq It

Pricing/Dates List: $819,000 11/20/2006 Original: $925,000 11/20/2006 OffMktDate:07/19/2007 Sold $840,000 06/05/2007 (Closed Sale)

REDUCED $65,0000! ~ Gorgeous Views, open floorplan, wall of windows in LRoom, End of the road privacy, ground floor master, 3+ Acres, great room with views. RV pkng, DSL, high ceil'lngs, outbuildings. Immaculate. Must see!

Informal Oinlng Area Breakfast Bar

Formal Dining Area Living Rm/Dining Rm Combo

Pool Options Garage/Parking 2 Car Garage

a 797 COL-E RD, AROMAS 95004 (Aromas) $850,000 MLS: 671613 DOM: 0 CDOM: 0

Property Features

Familyroom No Family Room

Remarks

Pricing/Dates List: $850,000 12/07/2006 Original: $850,000 12/07/2006 OffMktDate:01107/2007 Sold $850,000 12/07/2006 (Closed Sale)

Beautiful40+ acres of land located on sunny Cole Road"Aromas"by the red barn house is nonhabitable, great utility barn.orchardw/fruit trees. water source is spring.Can be great horse property.Oiscontinued Williamson Act. Must See

Informal Dining Area Formal Dining Area Pool Options Garage/Parking No Formal Dining Area No Garage/Parking

Presented by Robert Clark, Robert Clark, Realtor ** Information contained on this report is designed for accuracy but is not guaranteed ••

... 438 PINE TREE AV, AROMAS 95004 (Aromas) 11;11 $840,000 Beds: 4 bed(s) Baths: 2 112 bath(s)

Can Ave

11 n.Imi

CA

i) J:IHl() Tdc :\lhl>. Rd. Cl1!1fl0(,

Remarks

DOM: 197 CDOM: 197 MLS: 669806

Property Overview 438 PINE TREE AV AROMAS (Aromas) 95004 Aromas(Area 185) San Benito County Detached Single Family (Class 1) Bed/Bath: 412 112 SqFt: 2200 (Seller)

Lot Size·. 158,994 sq ft Age: 9 years Assoc Fee: Parcel#: 011-380-016

Commission: 2.50%

REDUCED $65.0000!- Gorgeous Views. open floorplan, wall of windows in LRoom, End of the road privacy, ground floor master, 3+ Acres, great room with views. ~V pkng, DSL, high ceilings, outbuildings. Immaculate. Must see! Private :

Dates list: Original: Sale: COE: Expires: OffMarket:

Tour Information Tour1: -Assoc 1: -Tour2: -Assoc2: -

11/20/2006 11/20/2006 06/05/2007 07/18/2007 10/01/2007 07/19/2007

Original: 06/07/2007

Pricing List: Original: Sale:

$819,000 $925,000 $840,000

Showing Information Occupant: Occupied By:Owner Phone: 831-726-7193 Owner: Bob and Sally Add'l Owner: -


Map X-street: Barclay:

CARPENTERIA Pg:- Hz:-

_,_ __ ,_

Thomas Pg: 1017 Grid: B6 Vt:-

Remarks: LUNCH!- WAS $885 '-LARGE, PRIVATE- 3.6 ACRES, VIEWS, IMMACULATE ..

Instructions: Appointment Only, Call Listing Agent, Supra Keysafe

Property Features Familyroom Dining Area in family Room Informal Dining Area Breakfast Bar Other Rooms

Bedroom Descriptions 2 or More Master Suites Showor And Tub 1 Shower over Tub Shower 1 Stall Shower

Other Areas Extra Storage Laundry Area - Garage Pantry Partial Basement Fireplace Location Fireplace in Living Room Cooling No Cooling Heating Central Forced Air Heat Gas Heal


Floor Covering($) Partial Hardwood Tile Wall to Wall Carpeting Amenities Cable TV Available Double Pane Windows Fire Sprinkler System Gas Water Heater High Ceilings

Lot OescripUon Lot Sloped Down from Street Has Pool No Pool View View of Mountains Valley View

Garage/Parking 2 Car Garage Attached Electric Door or Gate Opener Guest Parking RV or Boat Parking Uncovered YardsfGrounds Deck Horse(s) Pennitted Other Livestock Permitted Patio

Seth J. Baron (DRE#01313604) Pref Phone: 831-588-1368, Email: [email protected] Bailey Properties Selling AgenUOffice information Renate Harris (DRE#01279430) Harris Mortgage and Sales, Inc

•• Information contained on this report is designed for accuracy but is not guaranteed ..


... 1879 COLE RD, AROMAS 95004 (Aromas) lliWI $840,000 Beds: 3 bed(s) Baths: 2 1/2 bath(s)

u U.lu:i

CA

!.'; 2U~I6 Tl..'k :\!Ia.;, Rd. (~121)()()

Remarks

DOM: 25 CDOM: 25 MLS: 562953

Property Overview 1879COLE RD


Aromas (Area 185)

San Benito County Attached Single Family (Class 1)

Bed/Balh: 3/2 1/2

Sqft: 2140 (Seller)

Lot Size: 4.74 ac

Age: 28 years

Assoc Fee: Parcel#: 011·160·032

Commission: 2.50%

4.74 BEUTIFULL ACRES IN TRANQUIL AROMAS. GREAT HOME WITH 2140 SQ FT. FLAT USABLE LAND WITH MANY POSSIBILUTYS. GREAT PORCH WITH VIEWS. STORAGE SHED, COVERED PARKING, DOG RUNS, GREAT VIEWS. Private: CALL AGENT THEN SHOW. AGENT RELATED TO SELLER. FAX OFFERS TO 408 847-3700

Dates List Original: Sale: COE: Expires: OffMarket:

Tour Information Tour 1: Assoc 1: Tour 2: Assoc2: Original: Remarks:

Property Features Familyroom

10122/2005 10122/2005 11/16/2005 12/19/2005 01/1212006

Other Areas

Pricing list Original: Sale:

$850,000 $850,000 $840,000

Showing Information Occupant: Kern Occupied By: Owner Phone: Owner: Kern Add'\ Owner: Instructions: Call First-Then Keysafe



Anzar Pg:- Hz:-Pg:- Grid:-

-1-

-1-

Lot Description Garage/Parking

Vt:-

Separate Family Room Informal Dining Area

Extra Storage Laundry Area - Inside Fireplace Location Fireplace in Living Room Cooling

Floor Covering{S) Linoleum or Vinyl Tile Has Pool

No Pool View.

3 or More Car Garage Yards/Grounds

Other Rooms

Bedroom Descriptions

Shower And Tub

Shower · 2 or More Stall Showers

Room Air Conditioner(s} Heating Gas Heat

Listing Agent/Office Information Charles L Leonard (DRE#01407163) Century 21-Premier Selling Agent/Office information

Wall to Wall Carpeting Wood (Commercial) Amenities

Alisa Elder (DRE#01205324) Country Properties & Estates

View of Mountains Valley View

Pref Phone:-. Email: -

._ Information contained on this report is designed for accuracy but is not guaranteed n

Deck Dog Run/Kennel Patio

11!11 201 CARR AV, AROMAS 95004 (Aromas) M $845,000 Beds: 3 bed(s) Baths: 2 bath(s)

0 O.lmi

C'A

OOM: 16 CDOM: 16 MLS: 553304

Property Overview 201 CARR AV


Aromas (Area 185)


Bed/Bath: 3 12

SqFI: 1459 (Seller)

Lot Size:

Age:

Assoc Fee:

1+ to 2.5 Acres

27 years

D 2006 Tdc :\!lot~. Rd. o..t.'2006 Parcel#: 011-380-027

2.00% Commission:

Remarks Peace & quiet abound. this spotless home has a partial in-ground pool, spa, deck plus giant oak trees. corian counters. new cabinets and gourmet DCS range are sorne kit highlights. 1.49 ac provide room to roam. bonus b!d for storage. Privata : ownors cell: 277-3836 call here first

Dates List: Original: Sale: COE: Expires: OffMarket:

Tour Information Tour 1: Assoc 1: Tour 2: Assoc2: Original:

0911112005 09/11/2005 09/27/2005 10/14/2005 11/1012005

Pricing List Original: Sale:

$855,000 $855,000 $845,000

Showing Information Occupant: Sonne Occupied By:Ovmer Phone: 831-726-2325 Owner: Sonne Add'l Owner: -



Carpentaria Pg:- Hz:-Pg:- Grid:-

-1-

-1-

Remarks: Instructions: Call First-Then Keysafe, Supra Keysafe

Property Features Familyroom No Family Room Informal Dining Area

Other Rooms

Bedroom Descriptions 1 Master Bedroom Suite Shower And Tub

Shower 1 Stall Shower

Other Areas Laundry Area -Garage Fireplace Location

Cooling No Cooling Heating Central Forced Air Heat Gas Heat

Listing Agent/Office Information Millard Strohn (DRE#00555252) lntero Real Estate Services Selling Agent/Office information

Floor Covorlng(S) Wall to Wall Carpeting Amenities 220 Volts in Laundry Area Gas Hookup in Kitchen Gas Water Heater

Millard Strohn (DRE#00555252) lntero Real Estate Services

Lot Description Court Lot Lot Sloped Up from Street Has Pool

View Neighborhood View

Pref Phone: -, Email: -

*" Information contained on this report is designed for accuracy but is not guaranteed ••

GaragefParking 2 Car Garage Attached Yards/Grounds Barbecue Area Deck Dog Run/Kennel Fenced Yard

Vt:-

... 530 Cole RD, AROMAS 95004 (Aromas} lliiill $850,000 .

DOM: 298 CDOM: 298 MLS: 411018

Property Overview 530Cole RD

AROMAS (Aromas} 95004 Aromas (Area 185)

San Benito County Single Family Residential land (Class 5) SqFt:

CA Unnnmed St

Lot Size: Parcel1t: Zone:

18.00 ac 011-260-005

R Tract: LoUBiock#:

" 0.1 u~i ro'nd D 21JU!I Tc!c :\11:..-. Rd. OJ1.2tKJ6

Commission: 2.50%

Remarks Approx 18 acres. Possible split as z.one dictates, 5 acre min. Ne'Ner well equip Open property: might make great horse property. Sm 311 residence wl tenants. Don't disturb. Call to show or ju$1 drive by. Pdg. end. instruct prev escrow Private : Refer to MLS# 411112 ~Class 1 for Residence info.

Dates List Original:

07/12/2004 07/12/2004 05/06/2005 07/29/2005 07/12/2005


$849,950 $850,000

Schools/Districts Elem: -1-

Sale: COE: Expires: OffMarket:

Tour Information Tour 1: Assoc 1: Tour 2: Assoc 2: Original: Remarks:

Lot Features Present Use Residential Development Status Minor Subdivision (2-4 Parcels) Possible Lot Split Existing Structure($) Residence Fencing Fencing Not Surveyed

Special Information:

Original: Sale:

Showing Information Occupant Occupied By: Phone: Owner: Add'l Owner:

Middle: High:

Map X-street Barclay: Thomas

Instructions: Appointment Only

Lot Description

Vi OW View of Mountains Topography/ rmprovements LCll Sloped Up from Street Pllrcel Access county Maintained Road Access

Utilities

Gas

Electric Electricity Available at Lot Line Other ·

Septic Existing Septic Water Water Available at Site Individual Well Bonds! Assessments Unknown Bonds/Assessments

Listing AgentJOffice Information

_,_

Hwy 101 Pg:- Hz:-Pg:- Grid:-

Special Requirements

Earthquake Fault Zone Fault Zone-See Report Flood Area Flood Zone-See Report Listing Includes

Eugene Ferris (DRE#01012052) Prel Phone: 831-753-2180 111, Email: [email protected] Windermere Coast & Valley Properties Selling Agent/Office information Stephen Pearson (DRE#01201194) Century 21 Classic Properties

.. Information contained on this report is designed for accuracy but is not guaranteed ••

VI:-

11'!111436 SNYDER AV, AROMAS 95004 (Aromas) H $867,000 Beds: 3 b~d(s) Baths: 3 bath(s)

n o. !mi CA

;~: 2Htl6 Td~ Atla!>, Rcl. ~.:2006

Remarks

DOM: 64 CDOM: 64 MLS: 384841

Property Overview 436 SNYDER AV AROMAS (Aromas) 95004 Aromas (Area 185)

San Benito County Detached Single Family (Class 1) Bed/Bath: 313 SqFt: 2100 (Seller) Lot Size: 3.00 ac Age: 12 years

Assoc Fee: Parcel#: 011-210-112

Commission: 2.00%

GORGEOUS 3BDI3BA CUSTOM HOME SUPERIOR MATERIALS & WORKMANSHIP- 2100+ SQ FT 3+ DELIGHTFUL MULTI-USE ACRES. STUNNING HILLTOP VIEWS OF ROLLING LUGH VALLEYS& CITY LIGHTS A TRULL Y UNIQUE & DESIREABLE LIFESTYLE OPPORTUNITY Private:

Dates List: Original: Sale: COE: Expires: OffMarket:

Tour Information Tour1: Assoc 1: Tour 2: Assoc2: Original: Remarks:

Property Features Family room

03/21/2004 03121/2004 05/24/2004 07/19/2004 08119/2004

Other Areas

Pricing List Original: Sale:

$899.000 $899,000 $867,000

Showing Information Occupant: TRISHA EGELSTON Occupied By:Owner Phone: Owner: TRISHA EGELSTON Add'! Owner: -Instructions: Appointment Only, Call Listing

Agent, Do Not Disturb Occupants


Map X-street Barclay:

CARPENTERIA Pg:- Hz:-

-1-

-1 --

Thomas Pg: 0 Grid:-

Floor Covering($) Lot Description Garage/Parking Area Carpeting

VI:-

Separate Family Room Informal Dining Area fireplace Location Partial Hardwood

Lot Sloped Up from Street

3 or More Car Garage Yards/Grounds Barbecue Area Horse(s) Permitted Patio

Other ~ooms

Bedroom Descriptions 1 Master Bedroom Suite Shower And Tub 2 or More Showers OV(lr

Tubs Shower 2 or More Stall Showers

Cooling No Cooling Heating Gas Heat

listing Agent/Office Information

Wood (Commercial) Amenities Bay Windows Built-in Vacuum Cable TV Available Double Pane Windows Fire Sprinkler System High Ceilings Vaulted/Cathedral Ceiling

Has Pool

View View of City Lights View of Mountains Valley View

Kevin Koranda (DRE#01389135) Pref Phone: 831-682-5333. Email: [email protected] Cottage & Castles Real Estate Selling AgentfOffice information Teresa Williams (DRE#01299742) David Lyng & Associates

- Information conta!ned on this report is designed for accuracy but is not guaranteed ...


111!111 347 RICARDO DR, AROMAS 95004 (Aromas) llitll $900,000 Beds: 4 bed(s} Baths: 4+ bath(s)

O' ,oo <;:..\"'"

CA

Remarks

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DOM: 21 CDOM: 110 MLS: 569157

Property Overview 347 RICARDO DR AROMAS (Aromas) 95004 Aromas (Area 185) San Benito County Detached Single Family (Ciass1)

Drivcw,~y Bed/Bath: 4/4+

SqFt: 2910 (Seller) Lot Size: Age: Assoc Fee: Parcel#: Commission:

5.00 ac 9 years

011-270-046 2.50%1

BEAUTIFUL HOME & LAND 10 MINUTES SOUTH OF GILROY. EASY FRWY ACCESS HUGE COUNiRY KITCHEN WITH CENTER ISLAND & TILE FLOORS. All BD'S FULL BATHS VIEWS .. VIEWS. VIEWS. PERFECT FOR HORSES, PLANT VINEYARD, NICE PROPERTY Private :Call me first for gate code, then lock box on front door, MOTIVATED SELLER

Oates List: 11/29/2005

09/01/2005 12/20/2005 01/31/2006 03/0112005

Pricing list: $975,000

$975,000 $900,000

Schools/Districts Elem:

_,_ Original: Sale: COE: Expires: OffMarket:

Tour Information Tour 1: Assoc 1: Tour 2: Assoc2: Original: Remarks:

Property Features Familyroom Separate Family Room Informal Dining Area Breakfast Nook Breakfast Bar 0\h&rRooms Den or S1udy Library Office Recreation Room Utility Room Workshop Bonus Room Bedroom Ooscriptions 2 or More MaGter Suites Shower And Tt1b 2 or More Showers over Tubs Shower 2 or More Stall Showers

Original: Sale:

Showing Information Occupant: GLEN Occupied By: Tenant Phone·. 408-421-7913 Owner: YOUNG Add'l Owner: -

Middle: High:


Instructions: Call First-Then Keysate, Call Listing Agent, Locked Main Entrance Gate, Supra Keysaie

Other Areas Floor Covering($) Artist Studio Tile Extra Storage Wall to Wall Carpeting Formal Entry Amenities Guest House Bay Windows Guest Quarters Ceiling Fan{s) Laundry Area - Inside Double Pane Windows Pantry Garden Hause Windows Fireplace Location Gas Hookup in Kitchen Fireplace in Family Room Gas Hookup in laundry Cooling Area No Cooling Gas Water Heater Heating High Ceilings Central Forced Air Heat Skylight(s) Propane Gas Heat Vaulted/Cathedral Ceiling

Lot Description Lot Sloped Up from Street Has Pool No Pool View View of Green Belt View of Mountains Valley View Canyon View


-1-

Cole Rd. Pg:- Hz:- VI:-Pg:- Grid:-

Garage/Parking 2 or More Car Carport Garage- Converted Guest Parking Off Street Pari<ing RV or Boat Parking Yards/Grounds Automatic Sprinkler(s) Barbecue Area Barn Dog Run/Kennel Fenced Yard Horse(s) Permitted Other Livestock Permitted Patio Patio or Deck. Covered

Barry Adams (DRE#01042579) Pref Phone·. 408-779..()756, Email: [email protected] fntero Real Estate Services Selling Agent/Office information Matthew Medeiros (DRE#01276261) Coldwell Banker/American Home Realty

., Information contained on this report is designed for accuracy but is not guaranteed n