NEW ISSUE - BOOK-ENTRY ONLY NO RATING

In the opinion of Best Best & Krieger, LLP, Riverside, California ("Bond Counsel"), subject to certain qualifications described herein, under existing statutes, regulations, rulings and judicial decisions 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 calculating the federal alternative minimum tax imposed on individuals and corporations, although, for purposes 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 tax. See "LEGAL MATTERS-Tax Exemption."

County of Riverside

Dated: Date of Delivery

State of California

$7,395,000 COMMUNITY FACILITIES DISTRICT NO. 30

(EASTVALE AREA) OF JURUPA COMMUNITY SERVICES DISTRICT

SPECIAL TAX BONDS, 2007 SERIES A

Due: September 1, as shown on the inside cover page

The Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District Special Tax Bonds, 2007 Series A (the "Bonds") are being issued and delivered to finance various public improvements needed to develop property located within Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District (the "District"), to fund a reserve fund securing the Bonds and to pay costs of administration and issuance of the Bonds. The District has been formed by the Jurupa Community Services District (the "Services District") and is located in the unincorporated area of the County of Riverside, California (the "County").

The Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Sections 53311 et seq. of the Government Code of the State of California), and pursuant to a Fiscal Agent Agreement, dated as of October 1, 2007 (the "Fiscal Agent Agreement"), by and between the Services District and U.S. Bank National Association as fiscal agent (the "Fiscal Agent"). The Bonds are special obligations of the Services District and are payable solely from revenues derived from certain annual Special Taxes (as defined herein) to be levied on and collected from the owners of certain taxable land within the District and from certain other funds pledged under the Fiscal Agent Agreement, all as further described herein. The Special Taxes are to be levied according to the rate and method of apportionment approved by the Board of Directors of the Services District and the qualified electors within the District. See "SOURCES OF PAYMENT FOR THE BONDS-Special Taxes." The Board of Directors of the Services District is the legislative body of the District.

The Bonds are issuable in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). Individual purchases may be made in principal amounts of $5,000 and integral multiples thereof and will be in book-entry form only. Purchasers of Bonds will not receive certificates representing their beneficial ownership of the Bonds but will receive credit balances on the books of their respective nominees. The Bonds will not be transferable or exchangeable except for transfer to another nominee of DTC or as otherwise described herein. Interest on the Bonds will be payable on March 1, 2008 and semiannually thereafter on each September 1 and March 1. Principal of and interest on the Bonds will be paid by the Fiscal Agent to DTC for subsequent disbursement to DTC Participants who are obligated to remit such payments to the beneficial owners of the Bonds. See "THE BONDS-General Provisions" and "-Book-Entry Only System."

Neither the faith and credit nor the taxing power of the District, the Services District, the County of Riverside, the State of California or any political subdivision thereof is pledged to the payment of the Bonds. Except for the Special Taxes, no other taxes are pledged to the payment of the Bonds. The Bonds are special tax obligations of the Services District payable solely from Special Taxes and certain other amounts held under the Fiscal Agent Agreement as more fully described herein.

The Bonds are subject to optional redemption and mandatory redemption prior to maturity as set forth herein. See "THE BONDS-Redemption."

Investment in the Bonds involves risks that are not appropriate for certain investors. Certain events could affect the ability of the Services District to pay the principal of and interest on the Bonds when due. See the section of this Official Statement entitled "RISK FACTORS" for a discussion of certain risk factors that should be considered, in addition to the other matters set forth herein, in evaluating the investment quality of the Bonds.

This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms of this issue. Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision.

MATURITY SCHEDULE

(See Inside Cover Page)

The Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Best Best & Krieger, LLP, Riverside, California, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the Services District and the District by Best Best & Krieger, LLP, Riverside, California and for the Underwriter by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as counsel to the Underwriter. It is anticipated that the Bonds in book-entry form will be available for delivery to DTC in New York, New York, on or about October 24, 2007.

UBS INVESTMENT BANK Dated: October 10, 2007

MATURITY SCHEDULE Base CUSIP No.1 482097 $2,175,000 Serial Bonds

Maturity Date Principal Interest (September 1) Amount Rate Yield CUSJPNo.f

2008 $ 170,000 4.125% 4.125% PD8 2009 115,000 4.200 4.200 PE6 2010 120,000 4.250 4.250 PF3 2011 125,000 4.400 4.400 PGI 2012 130,000 4.500 4.510 PH9 2013 140,000 4.600 4.650 PJS 2014 145,000 4.700 4.750 PK2 2015 150,000 4.750 4.830 PLO 2016 160,000 4.750 4.900 PMS 2017 165,000 4.875 4.950 PN6 2018 175,000 5.000 5.050 PPI 2019 185,000 5.125 5.125 PQ9 2020 195,000 5.150 5.180 PR7 2021 200,000 5.200 5.230 PSS

$1,460,000 5.375% Term Bonds due September I, 2027 Yield: 5.430% CUSIP No.1 PT3 $3,760,000 5.600% Term Bonds due September I, 2037 Yield: 5.600% CUSIP No.1 PUO

t Copyright 2007, American Bankers Association. CUSJP data herein is provided by Standard & ?oar's, CUSJP Service Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSJP Services.

Except where otherwise indicated, all information contained in this Official Statement has been provided by the Services District and the District. No dealer, broker, salesperson or other person has been authorized by the Services District, the District, the Fiscal Agent or the Underwriter to give any information 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 representations must not be relied upon as having been authorized by the Services District, the District, the Fiscal Agent or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation ofan 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.

This Official Statement is not to be construed as a contract with the purchasers or Owners of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. This Official Statement, including any supplement or amendment hereto, is intended to be deposited with a nationally recognized municipal securities depository.

The Underwriter has provided the following sentence for inclusion in this Official Statement:

The Underwriter has reviewed the information in this Official Statement in accordance with, and as 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.

The information set forth herein which has been obtained from third party sources is believed to be reliable but is not guaranteed as to accuracy or completeness by the Services District or the District. The information and expressions of opinion herein are subject to change without notice, and neither the 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 Services District or the District or any other parties described herein since the date hereof All summaries of the Fiscal Agent Agreement or other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the Services District for further information in connection therewith.

IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANYTIME.

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

JURUPA COMMUNITY SERVICES DISTRICT BOARD OF DIRECTORS

Kenneth J. McLaughlin, President R.M. "Cook" Barela, Vice President

Paul Hamrick, Director James C. Huber, Director Jack E. Smith, Director

DISTRICT STAFF

Eldon Horst, General Manager Ken Waring, Finance Manager

Tina Norrdin, Director of Finance

BOND COUNSEL AND GENERAL COUNSEL TO SERVICES DISTRICT

Best Best & Krieger LLP Riverside, California

FINANCIAL ADVISOR

Fieldman, Rolapp & Associates Irvine, California

DISTRICT ENGINEER AND SPECIAL TAX CONSULT ANT

Albert A. Webb Associates Riverside, California

FISCAL AGENT

U.S. Bank National Association Los Angeles, California

APPRAISER

Bruce W. Hull & Associates, Inc. Ventura, California

Table of Contents Page

INTRODUCTION ................................................................................................................................................ I General ........................................................................................................................................................... I Update of Certain Information Since the Date of the Preliminary Official Statement... ................................ I Forward Looking Statements ......................................................................................................................... I The District .................................................................................................................................................... 2 Sources of Payment for the Bonds ................................................................................................................. 3 Description of the Bonds ................................................................................................................................ 4 Redemption .................................................................................................................................................... 4 Tax Matters .................................................................................................................................................... 4 Professionals Involved in the Offering .......................................................................................................... 5 Continuing Disclosure .................................................................................................................................... 5 Bondovrners' Risks ........................................................................................................................................ 5 Other Information .......................................................................................................................................... 5

ESTIMATED SOURCES AND USES OF FUNDS ............................................................................................ 6

THEBONDS ........................................................................................................................................................ 6 Gerieral Provisions ......................................................................................................................................... 6 Authority for Issuance .................................................................................................................................... 7 Debt Service Schedule ................................................................................................................................... 7 Redemption .................................................................................................................................................... 8 Registration, Transfer and Exchange ........................................................................................................... 11 Book-Entry Only System ............................................................................................................................. 11

SOURCES OF PAYMENT FOR THEBONDS ................................................................................................ 13 Limited Obligations ..................................................................................................................................... 13 Special Taxes ............................................................................................................................................... 13 Reserve Fund ............................................................................................................................................... 17

THE DISTRICT .................................................................................................................................................. 18 General Description of the District .............................................................................................................. 18 Description of Authorized Facilities ............................................................................................................ 18 Estimated Direct and Overlapping Indebtedness ......................................................................................... 18 Direct and Overlapping Assessments and Taxes ......................................................................................... 20 Expected Tax Burden ................................................................................................................................... 21 Estimated Appraised Value-to-Lien Ratio ................................................................................................... 23 Estimated Assessed Value-to-Lien Ratio ..................................................................................................... 23 Delinquency History .................................................................................................................................... 23 Significant Special Taxpayers ...................................................................................................................... 23

THE DEVELOPMENT AND PROPERTY OWNERSHIP ............................................................................... 24 General Description of the Development ..................................................................................................... 24 The Developer .............................................................................................................................................. 24 Development Plan ........................................................................................................................................ 26 Financing Plan ............................................................................................................................................. 29 Status of Entitlement Approvals .................................................................................................................. 30 Enviromnental Constraints ........................................................................................................................... 30 Infrastructure Requirements and Construction Status .................................................................................. 30 Appraisal ...................................................................................................................................................... 31 Tax Delinquencies of Property Owners and Other Matters ......................................................................... 31

Table of Contents (continued)

Page

RISK FACTORS ................................................................................................................................................ 31 Risks of Real Estate Secured Investments Generally ................................................................................... 32 Concentration of Ownership ........................................................................................................................ 32 Limited Obligations ..................................................................................................................................... 32 Special Tax Delinquencies ........................................................................................................................... 32 Risks Related to Adjustable Rate Mortgages, Nontraditional Mortgages .................................................... 34 Risks Related to Current Market Conditions ............................................................................................... 35 Insufficiency of Special Taxes ..................................................................................................................... 36 Failure to Develop Properties ...................................................................................................................... 37 Future Land Use Regulations and Growth Control Initiatives ..................................................................... 38 Endangered Species ..................................................................................................................................... 3 8 Natural Disasters .......................................................................................................................................... 39 Methane Gas ................................................................................................................................................ 39 Hazardous Substances .................................................................................................................................. 40 Parity Taxes Special Assessments and Land Development Costs .............................................................. .40 Disclosures to Future Purchasers ................................................................................................................. 41 Non-Cash Payments of Special Taxes ......................................................................................................... 41 Payment of the Special Tax is not a Personal Obligation of the Owners ..................................................... 42 Land Values ................................................................................................................................................. 42 FDIC/Federal Government Interests in Properties ....................................................................................... 43 Bankruptcy and Foreclosure ........................................................................................................................ 43 No Acceleration Provision ........................................................................................................................... 44 Loss of Tax Exemption ................................................................................................................................ 44 Limitations on Remedies ............................................................................................................................. 44 Limited Secondary Market.. ......................................................................................................................... 45 Proposition 218 ............................................................................................................................................ 45 Ballot Initiatives ........................................................................................................................................... 46

CONTINUING DISCLOSURE .......................................................................................................................... 46

LEGAL MATTERS ............................................................................................................................................ 47 Tax Exemption ............................................................................................................................................. 47 Legal Opinion .............................................................................................................................................. 48 Litigation ...................................................................................................................................................... 48 No Rating ..................................................................................................................................................... 48 Underwriting ................................................................................................................................................ 48 Financial Interests ........................................................................................................................................ 48 Pending Legislation ..................................................................................................................................... 49 Additional Information ................................................................................................................................ 49

APPENDIX A APPENDIXB APPENDIXC

APPENDIXD APPENDIXE APPENDIXF

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES ........................ A-1 APPRAISAL REPORT ...................................................................................................... B-1 SUPPLEMENTAL INFORMATION CONCERNING JURUPA COMMUNITY SERVICES DISTRICT ...................................................................................................... C-1 SUMMARY OF FISCAL AGENT AGREEMENT .......................................................... D-1 FORM OF DISCLOSURE AGREEMENT ....................................................................... E-1 FORM OF OPINION OF BOND COUNSEL .................................................................... F-1

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JURUPA COMMUNITY SERVICES DISTRICT

CFD No. 30 (EASTVALE)

TR 31803

G:\2007\07m0060\Gis\CFD_No30,mxd; Map created March 27, 2007

1" = 2000'

[THIS PAGE INTENTIONALLY LEFT BLANK]

$7,395,000 COMMUNITY FACILITIES DISTRICT NO. 30 (EASTVALE AREA)

OF JURUPA COMMUNITY SERVICES DISTRICT SPECIAL TAX BONDS, 2007 SERIES A

INTRODUCTION

General

This introduction is not a summary of this Official Statement. It is only a brief description of aud guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the appendices, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The sale aud delivery of Bonds to potential investors is made only by meaus of the entire Official Statement. All capitalized terms used in this Official Statement aud not defined shall have the meauing set forth in APPENDIX D-"SUMMARY OF FISCAL AGENT AGREEMENT­Definitions.''

The purpose of this Official Statement, which includes the cover page, the inside cover page, the table of contents and the attached appendices (collectively, the "Official Statement"), is to provide certain information concerning the issuauce of the $7,395,000 Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District (the "Services District") Special Tax Bonds, 2007 Series A (the "Bonds"). The proceeds of the Bonds will be used to finance various public improvements needed with respect to the proposed development within Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District (the "District"), to fund the Reserve Fund securing the Bonds aud to pay costs of administration and issuance of the Bonds.

The Bonds are authorized to be issued pursuaut to the Mello-Roos Community Facilities Act of 1982, as amended (Sections 53311 et seq. of the Government Code of the State of California) (the "Act"), aud a Fiscal Agent Agreement dated as of October I, 2007 (the "Fiscal Agent Agreement") by aud between the Services District aud U.S. Bauk National Association (the "Fiscal Agent"). The Bonds are secured under the Fiscal Agent Agreement by a pledge of aud lien upon Special Tax Revenues (as defined herein) aud all moneys in the Principal Account aud Interest Account of the Bond Fund aud all moneys deposited in the Surplus Account of the Special Tax Fund aud the Reserve Fund as described in the Fiscal Agent Agreement.

Update of Certain Information Since the Date of the Preliminary Official Statement

The Official Statement includes certain chauges since the date of the Preliminary Official Statement. Moody's Investors Service downgraded Pulte Homes, Inc. to non-investment grade status. See "THE DEVELOPMENT AND PROPERTY OWNERSHIP-The Developer." Additionally, Assembly Bill No. 373 that amends certain portions of the Act was signed by the Governor. See "LEGAL MATTERS-Pending Legislation."

Forward Looking Statements

Certain statements included or incorporated by reference in this Official Statement constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchauge Act of 1934, as amended, aud Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as "plan," "expect," "estimate," "project," "budget" or other similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information under the caption "THE DISTRICT" aud "THE DEVELOPMENT AND PROPERTY OWNERSHIP."

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

The District

The District contains approximately 53 gross acres located in an unincorporated area of the County of Riverside (the "County"), on the north side of Schleisman Road west of Archibald Avenue near the San Bernardino County line. The District consists of one tract. Based on current land use approvals and projections, the land within the District is expected to be developed with approximately 183 single family residential units. As of September I, 2007, 160 homes in the District had been sold and conveyed to individual homeowners and the remainder of the land was owned by Pulte Home Corporation, a Michigan corporation (the "Developer"). The Developer is developing 183 residential units in a development known as "Stoneridge." As of August 15, 2007, the date of value of the Appraisal (the "Appraisal"), the taxable property in the District was valued at $91,198,050. For certain information concerning the Developer, see "THE DEVELOPMENT AND PROPERTY OWNERSHIP-The Developer."

Formation Proceedings. The District has been formed by the Services District pursuant to the Act.

The Act was enacted by the California legislature to provide an alternative method of financing certain public capital facilities and services, especially in developing areas of the State. Any local agency ( as defined in the Act) may establish a district to provide for and finance the cost of eligible public facilities and services. Generally, the legislative body of the local agency which forms a district acts on behalf of such district as its legislative body. Subject to approval by two-thirds of the votes cast at an election and compliance with the other provisions of the Act, a legislative body of a local agency may issue bonds for a district and may levy and collect a special tax within such district to repay such indebtedness.

Pursuant to the Act, the Board of Directors of the Services District (the "Board of Directors") adopted the necessary resolutions stating its intent to establish the District, to authorize the levy of Special Taxes on taxable property within the boundaries of the District, and to have the District incur bonded indebtedness to fund certain (i) park and park recreation facilities, and water and sewer improvements (the "Services District Improvements") of the Services District and (ii) public school improvements (the "School District Facilities") to be owned and operated by the Corona-Norco Unified School District (the "School District"). The District additionally has the authority to levy Special Taxes on taxable property within the District to fund the operation and maintenance of public parks and park and recreation improvements and public parkways within and in the area of the District. Following public hearings conducted pursuant to the provisions of the Act, the Board of Directors adopted resolutions establishing the District and calling special elections to submit the levy of the Special Taxes and the incurring of bonded indebtedness to the qualified voters of the District. On May 16, 2006, at a special election held pursuant to the Act, the landowners, as the qualified voters of the District, authorized the District to incur bonded indebtedness in an aggregate principal amount not to exceed $10,000,000, and approved the rate and method of apportionment of Special Taxes for the District which is set forth in Appendix A (the "Rates and Method"). The Board of Directors acts as the legislative body of the District.

Development Status. Development of the land within the District is ongoing. The land within the District is in various stages of development ranging from completed, individually owned homes to homes under construction. As of August 15, 2007, the date of value of the Appraisal, of the 183 residential units proposed to be constructed by the Developer, 157 homes were built and sold and conveyed to individual

2

homeowners, 4 model homes were complete, 18 homes were over 95% complete and 4 homes were under construction. For the current status of the development, please see "THE DEVELOPMENT AND PROPERTY OWNERSHIP-Infrastructure Requirements and Construction Status," and "-Potential Changes to Product Plan."

The Developer reports that they are currently experiencing increased cancellations and reduced sales in many of their markets. See "THE DEVELOPMENT AND PROPERTY OWNERSHIP-The Developer" and "-Development Plan" and "RISK FACTORS-Risks Related to Current Market Conditions" for a discussion on recent cancellations and sales the Developer is experiencing in its markets and for the development project in the District.

Appraisal. Bruce W. Hull & Associates, Inc. (the "Appraiser") has conducted the Appraisal dated August 15, 2007 of the land within the District subject to the Special Tax and has concluded, based upon the assumptions and limiting conditions contained in the Appraisal, including without limitation an assumption that the public improvements to be financed by the Bonds are completed in a timely manner, that, as of August 15, 2007, the value of land and improvements within the District was $91,198,050. This estimate of value results in an overall District-wide appraised value-to-lien ratio of approximately 11.61-to-l for the District based on the estimated amount of direct and overlapping debt allocated to parcels within the District. See "THE DISTRICT-Estimated Appraised Value-to Lien Ratio and-Direct and Overlapping Assessments and Taxes." See also "THE DEVELOPMENT AND PROPERTY OWNERSHIP-Infrastructure Requirements and Construction Status," and "-Appraisal" and APPENDIX B-"APPRAISAL REPORT."

Sources of Payment for the Bonds

Special Taxes. As used in this Official Statement, the term "Special Tax" is that tax which has been authorized pursuant to the Act to be levied against certain land within the District pursuant to the Act and in accordance with the Rates and Method. "Special Tax Revenues" is defined to mean the proceeds of the Special Taxes received by the Services District, including any scheduled payments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes in the amount of said lien and interest and penalties thereon. See "SOURCES OF PAYMENT FOR THE BONDS-Special Taxes" and APPENDIXA-"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES." Under the Fiscal Agent Agreement, the District has pledged to repay the Bonds from the Special Tax Revenues and amouuts on deposit in the Principal Account and Interest Account of the Bond Fuud, the Special Tax Fund and the Reserve Fuud established under the Fiscal Agent Agreement.

Reserve Fund. Pursuant to the Fiscal Agent Agreement, the initial Reserve Requirement for the Bonds is an amount equal to $504,477.50. Subject to the maximum annual amouuts of Special Taxes contained in the Rates and Method, if the amount in the Reserve Fund is less than the Reserve Requirement, the Services District has covenanted to restore the amount in the Reserve Fund to the Reserve Requirement by the inclusion of a sufficient amouut in the next annual Special Tax levy within the District. The ability of the Board of Directors to increase the annual Special Taxes levied in the District to replenish the Reserve Fund is subject to the maximum annual amounts of Special Taxes authorized for the District. The moneys in the Reserve Fund will be used only for payment of the principal of, and interest and any redemption premium on, the Bonds and, at the direction of the Services District, for deposit in the Rebate Fuud. See "SOURCES OF PAYMENT FOR THE BONDS-Reserve Fuud."

The Special Tax Revenues are the primary security for the repayment of the Bonds. In the event that the Special Taxes are not paid when due, the only sources of fuuds available to pay the debt service on the Bonds are amouuts held by the Fiscal Agent in the Principal Account and Interest Account of the Bond Fund, the Special Tax Fund and the Reserve Fuud. See "SOURCES OF PAYMENT FOR THE BONDS-Reserve Fund."

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Foreclosure Proceeds. The District has covenanted for the benefit of the owners of the Bonds that it will commence, and diligently pursue to completion, judicial foreclosure proceedings against Assessor's parcels with delinquent Special Taxes in excess of $5,000 by the October 1 following the close of the fiscal year in which such Special Taxes were due, and it will commence and diligently pursue to completion judicial foreclosure proceedings against all properties with delinquent Special Taxes by the October 1 following the close of any fiscal year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied. See "SOURCES OF PAYMENT FOR THE BONDS-Special Taxes-Proceeds of Foreclosure Sales." There is no assurance that the property within the District can be sold for the appraised value or assessed values described herein, or for a price sufficient to pay the principal of and interest on the Bonds in the event of a default in payment of Special Taxes by the current or future landowners within the District. See "RISK FACTORS-Land Values" and APPENDIX B-"APPRAISAL REPORT."

EXCEPT FOR THE SPECIAL TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE SERVICES DISTRICT NOR SPECIAL OR GENERAL OBLIGATIONS OF THE DISTRICT, BUT ARE SPECIAL OBLIGATIONS OF THE SERVICES DISTRICT PAYABLE SOLELY FROM SPECIAL TAXES AND AMOUNTS HELD UNDER THE FISCAL AGENT AGREEMENT AS MORE FULLY DESCRIBED HEREIN.

Additional Bonds for Refunding Purposes Only. So long as any of the Bonds remain outstanding, the Services District shall not issue any additional bonds or obligations payable from Special Tax Revenues other than refunding bonds which result in a reduction in annual debt service.

Description of the Bonds

The Bonds will be issued and delivered as fully registered Bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC"), and will be available to actual purchasers of the Bonds (the "Beneficial Owners") in the denominations of $5,000 or any integral multiple thereof, under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery of the Bonds. In the event that the book-entry only system described herein is no longer used with respect to the Bonds, the Bonds will be registered and transferred in accordance with the Fiscal Agent Agreement. See "THE BONDS-Book-Entry Only System."

Principal of, premium, if any, and interest on the Bonds is payable by the Fiscal Agent to DTC. Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants. In the event that the book-entry only system is no longer used with respect to the Bonds, the Beneficial Owners will become the registered owners of the Bonds and will be paid principal and interest by the Fiscal Agent, all as described herein. See "THE BONDS-Book-Entry Only System."

Redemption

The Bonds are subject to optional redemption, mandatory redemption from Special Tax Prepayments and mandatory sinking fund redemption as described herein. For a more complete description of the Bonds and the basic documentation pursuant to which they are being sold and delivered, see "THE BONDS" and APPENDIX D-"SUMMARY OF FISCAL AGENT AGREEMENT."

Tax Matters

In the opinion of Bond Counsel, under existing statutes, regulations, rulings and court decisions, the interest on the Bonds is exempt from personal income taxes of the State of California and, assuming compliance with certain covenants described herein, is excluded from gross income for federal income tax

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purposes and is not a specific preference item for purposes of the federal alternative minimum tax. Set forth in Appendix G is the opinion of Bond Counsel expected to be delivered in connection with the issuance of the Bonds. For a more complete discussion of such opinion and certain other tax consequences incident to the ownership of the Bonds, including certain exceptions to the tax treatment of interest. See "LEGAL MATTERS-Tax Exemption"

Professionals Involved in the Offering

U.S. Bank National Association will act as Fiscal Agent under the Fiscal Agent Agreement. UBS Securities LLC is the Underwriter of the Bonds. Certain proceedings in connection with the issuance and delivery of the Bonds are subject to the approval of Best Best & Krieger LLP, Riverside, California, Bond Counsel. Fieldman Rolapp & Associates is acting as Financial Advisor to the Services District in connection with the Bonds. Certain legal matters will be passed on for the Services District and the District by Best Best & Krieger, LLP, General Counsel, and for the Underwriter by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Underwriter's Counsel. Other professional services have been performed by Albert A. Webb Associates, Riverside, California, as District Engineer and Special Tax Consultant, and Bruce W. Hull & Associates, Ventura, California, as Appraiser.

For information concerning the respects in which certain of the above-mentioned professionals, advisors, counsel and agents may have a financial or other interest in the offering of the Bonds, see "LEGAL MATTERS-Financial Interests."

Continuing Disclosure

The Services District on behalf of the District has agreed to provide, or cause to be provided, on an annual basis, to each nationally recognized municipal securities information repository and any public or private repository or entity designated by the State as a state repository for purposes of Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission certain financial information and operating data. The Services District has further agreed to provide notice of certain material events. These covenants have been made in order to assist the Underwriter in complying with Rule 15c2-12(b)(5). See "CONTINUING DISCLOSURE" and Appendix E for a description of the specific nature of the annual reports to be filed by the Services District and notices of material events to be provided by the District.

Bondowners' Risks

Certain events could affect the timely repayment of the principal of and interest on the Bonds when due. See the section of this Official Statement entitled "RISK FACTORS" for a discussion of certain factors which should be considered, in addition to other matters set forth herein, in evaluating an investment in the Bonds. The Bonds are not rated by any nationally recognized rating agency.

Other Information

This Official Statement speaks only as of its date, and the information contained herein is subject to change.

Brief descriptions of the Bonds and the Fiscal Agent Agreement are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Fiscal Agent Agreement, the Bonds and the constitution and laws of the State as well as the proceedings of the Board of Directors, acting as the legislative body of the District, are qualified in their entirety by references to such documents, laws and proceedings, and with respect to the Bonds, by reference to the Fiscal Agent Agreement.

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Copies of the Fiscal Agent Agreement, the Continuing Disclosure Agreement and other documents and information referred to herein are available for inspection and (upon request and payment to the Services District of a charge for copying, mailing and handling) for delivery from the Services District at 11201 Harrel Street, Mira Loma, California 91752, Attention: Secretary of the Board of Directors.

(1)

(2)

ESTIMATED SOURCES AND USES OF FUNDS

The following table sets forth the expected sources and uses of Bond proceeds:

Sources of Funds

Principal Amount of Bonds Less: Original Issue Discount

Total Sources

Uses of Funds

Improvement Fund( 1)

Reserve Fund Costs of Issuance Fund(') Underwriter's Discount

Total Uses

$

$

$

$

7,395,000.00 16 019.65

7,378,980.35

6,476,509.19 504,477.50 275,976.16 122 017.50

7,378,980.35

$2,496,799.19 shall be deposited in the School District Facilities Account and $3,979,710.00 shall be deposited in the Services District Facilities Account. Costs of Issuance include legal fees, printing costs, Appraisal costs, Special Tax Consultant fees and Fiscal Agent fees, in addition to other miscellaneous costs incidental to Bond issuance. Includes additional proceeds of$976.16.

THE BONDS

General Provisions

The Bonds will be dated their date of delivery and will bear interest at the rates per annum set forth on the inside cover page hereof, payable semiannually on each September 1 and March 1, commencing on March I, 2008 ( each, an "Interest Payment Date"), and will mature in the amounts and on the dates set forth on the inside cover page of this Official Statement. The Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof

Interest will be calculated on the basis of a 360-day year comprised of twelve 30-day months. Each Bond will bear interest from the Interest Payment Date next preceding the date of authentication of that Bond, unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the date of the Bonds; provided, however, that ifat the time of authentication of a Bond, interest is in default thereon, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon or from the date of the Bonds, if no interest has previously been paid or made available for payment thereon.

Interest on any Bond will be paid to the person whose name appears as its owner in the registration books held by the Fiscal Agent on the close of business on the Record Date. Interest will be paid by check of the Fiscal Agent mailed by first class mail, postage prepaid, to the Bondowner at its address on the registration books. Pursuant to a written request prior to the Record Date of a Bondowner of at least $1,000,000 in aggregate principal amount of Bonds, interest payments will be made by wire transfer in immediately available funds to a designated account in the United States.

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Principal of the Bonds and any premium due upon redemption is payable upon presentation and surrender of the Bonds at the principal corporate trust office of the Fiscal Agent in St. Paul, Minnesota.

Authority for Issuance

The Bonds are issued pursuant to the Act, the Fiscal Agent Agreement and the Resolution of Issuance. As required by the Act, the Board of Directors of the Services District has taken the following actions with respect to establishing the District and the Bonds:

Resolutions of Intention. On March 13, 2006 the Board of Directors of the Services District adopted a resolution stating its intention to establish the District and to authorize the levy of a special tax, and a resolution declaring its intention to incur bonded indebtedness in an amount not to exceed $10,000,000 within the District.

Resolutions of Formation. Following a noticed public hearing on May 8, 2006, the Board of Directors of the Services District adopted on May 8, 2006 resolutions which established the District, authorized the levy of a special tax within the District, and declared the necessity to incur bonded indebtedness in a maximum aggregate principal amount of $10,000,000 within the District.

Resolution Calling Election. The resolutions adopted by the Board of Directors of the Services District on May 8, 2006 also called for a consolidated special election by the landowners in the District, for May 16, 2006 on the issues of the levy of the Special Tax, the incurring of bonded indebtedness, and the establishment of an appropriations limit.

Landowner Election and Declaration of Results. On May 16, 2006, an election was held at which the landowners within the District approved a ballot proposition authorizing the issuance ofup to $10,000,000 of bonds to finance the acquisition and construction of various public facilities, the levy of the Special Tax and the establishment of an appropriations limit for the District. On June 12, 2006, the Board of Directors adopted a resolution approving the canvass of the votes and declaring the District to be fully formed with the authority to levy the Special Taxes, to incur the bonded indebtedness, and to have the established appropriations limit.

Special Tax Lien and Levy. A Notice of Special Tax Lien for the District was recorded in the real property records of the County on June 16, 2006, reflecting a continuing lien against the property in the District.

Ordinance Levying Special Taxes. On July 23, 2007, the Board of Directors adopted Ordinance No. 276 levying Special Taxes within the District.

Resolution Authorizing Issuance of the Bonds. On September 24, 2007 the Board of Directors adopted a resolution approving issuance of the Bonds.

Debt Service Schedule

The following table presents the aunual debt service on the Bonds (including sinking fund redemptions), assuming there are no optional redemptions or mandatory redemptions from prepayment of Special Taxes pursuant to the Rates and Method. See "SOURCES OF PAYMENT FOR THE BONDS­Special Taxes" and "THE BONDS-Redemption."

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ANNUAL DEBT SERVICE SCHEDULE

Payment Year (September 1) Principal Interest Total

2008 $ 170,000 $ 334,310.21 $ 504,310.21 2009 115,000 385,012.50 500,012.50 2010 120,000 380,182.50 500,182.50 2011 125,000 375,082.50 500,082.50 2012 130,000 369,582.50 499,582.50 2013 140,000 363,732.50 503,732.50 2014 145,000 357,292.50 502,292.50 2015 150,000 350,477.50 500,477.50 2016 160,000 343,352.50 503,352.50 2017 165,000 335,752.50 500,752.50 2018 175,000 327,708.76 502,708.76 2019 185,000 318,958.76 503,958.76 2020 195,000 309,477.50 504,477.50 2021 200,000 299,435.00 499,435.00 2022 215,000 289,035.00 504,035.00 2023 225,000 277,478.76 502,478.76 2024 235,000 265,385.00 500,385.00 2025 250,000 252,753.76 502,753.76 2026 260,000 239,316.26 499,316.26 2027 275,000 225,341.26 500,341.26 2028 290,000 210,560.00 500,560.00 2029 305,000 194,320.00 499,320.00 2030 325,000 177,240.00 502,240.00 2031 345,000 159,040.00 504,040.00 2032 360,000 139,720.00 499,720.00 2033 380,000 119,560.00 499,560.00 2034 405,000 98,280.00 503,280.00 2035 425,000 75,600.00 500,600.00 2036 450,000 51,800.00 501,800.00 2037 475 000 26 600.00 501 600.00 Total $ 7 395 000 $ 7 652 387.77 $ 15 047 387.77

Source: Underwriter

Redemption

Optional Redemption. The Bonds are subject to redemption prior to their stated maturity dates on auy Interest Payment Date, as selected among maturities by the Services District (aud by lot within auy one maturity), in integral multiples of $5,000, at the option of the Services District from moneys derived by the Services District from any source, at redemption prices (expressed as a percentage of the principal amount of the Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:

Redemption Dates

March I, 2008 through March I, 2015 September I, 2015 aud March I, 2016 September I, 2016 aud March I, 2017 September I, 2017 aud thereafter

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Redemption Prices

103% 102 101 100

Mandatory Redemption From Special Tax Prepayments. The Bonds are subject to mandatory redemption prior to their stated maturity dates on any Interest Payment Date, as selected among maturities by the Services District (and by lot within any one maturity), in integral multiples of $5,000, from moneys derived by the Services District from Special Tax Prepayments, at redemption prices ( expressed as percentages of the principal amounts of the Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:

Redemption Dates

March I, 2008 through March I, 2015 September I, 2015 and March I, 2016 September I, 2016 and March I, 2017 September I, 2017 and thereafter

Redemption Prices

103% 102 101 100

Mandatory Sinking Fund Redemption. The outstanding Bonds maturing on September I, 2027 and September I, 2037 are subject to mandatory sinking fund redemption, in part, on September I, 2022 and September I, 2028, respectively, and on each September I thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, and from sinking payments as follows:

Bonds Maturing on September 1, 2027

Sinking Fund Redemption Date (September 1)

2022 2023 2024 2025 2026 2027

Sinking Payments

$ 215,000 225,000 235,000 250,000 260,000 275,000

Bonds Maturing on September 1, 2037

Sinking Fund Redemption Date (September 1)

2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

Sinking Payments

$ 290,000 305,000 325,000 345,000 360,000 380,000 405,000 425,000 450,000 475,000

The amounts in the foregoing schedules shall be reduced by the Services District pro rata among redemption dates, in order to maintain substantially level Debt Service, as a result of any prior or partial optional or mandatory redemption of the Bonds.

Purchase of Bonds. In lieu of payment at maturity or redemption under the Fiscal Agent Agreeruent, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds,

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upon the filing with the Fiscal Agent of an Officer's Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer's Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase.

Notice to Fiscal Agent. An Authorized Officer shall give the Fiscal Agent written notice of the Services District's intention to redeem Bonds not less than forty-five (45) days prior to the applicable redemption date. Such written notice shall specify whether Bonds are to be redeemed by optional redemption or mandatory redemption from Special Tax Prepayments. The provisions of this subsection shall not apply to mandatory sinking fund redemption of the Bonds.

Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption, to the Securities Depositories and to one or more Information Services selected by an Authorized Officer, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond registration books maintained by the Fiscal Agent at its Principal Office; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds. The Fiscal Agent shall also cause notice of any redemption to be mailed, in such manner and within such time, to the Underwriter.

Such notice shall state the date of such notice, the date of issue of the Bonds, the place or places of redemption, the redemption date, the redemption price and, ifless than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed, by giving the individual CUSIP number and Bond number of each Bond to be redeemed, or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called for redemption in part, the portion of the principal of the Bond to be redeemed, shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. The cost of the mailing of any such redemption notice shall be paid by the District.

Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer.

In the event of an optional redemption or mandatory redemption from Special Tax Prepayments pursuant to the Fiscal Agent Agreement, the Services District shall transfer or cause to be transferred to the Fiscal Agent for deposit in the Bond Fund moneys in an amount equal to the redemption price of the Bonds being redeemed on or before the fifteenth (15th) day of the month preceding the Interest Payment Date upon which such Bonds are to the redeemed.

If less than all the Bonds Outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or a multiple thereof, and, in selecting portions of such Bonds for redemption, the Fiscal Agent shall treat each such Bond as representing the number of Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bond to be redeemed in part by $5,000.

Whenever provision is made in the Fiscal Agent Agreement for the redemption ofless than all of the Bonds of a maturity or any given portion thereof, the Fiscal Agent shall select the Bonds of such maturity to be redeemed, from all Bonds of such maturity or such given portion thereof not previously called for redemption, by lot within a maturity in any manner which the Fiscal Agent in its sole discretion shall deem appropriate.

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Upon surrender of Bonds redeemed in part only, the Services District shall execute and the Fiscal Agent shall authenticate and deliver to the Owner, at the expense of the District, a new Bond or Bonds, of the same maturity, of authorized denominations in an aggregate principal amount equal to the unredeemed portion of the Bond or Bonds.

Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds called for redemption shall have been deposited in the Bond Fund, such Bonds shall cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price, and interest shall cease to accrue on the Bonds to be redeemed on the redemption date specified in the notice of redemption.

All Bonds redeemed and purchased by the Fiscal Agent pursuant to the Fiscal Agent Agreement shall be cancelled by the Fiscal Agent.

Registration, Transfer and Exchange

Registration. The Fiscal Agent will keep sufficient books for the registration and transfer of the Bonds. The ownership of the Bonds will be established by the Bond registration books held by the Fiscal Agent.

Transfer or Exchange. Whenever any Bond is surrendered for registration of transfer or exchange, the Fiscal Agent will authenticate and deliver a new Bond or Bonds of the same maturity, for a like aggregate principal amount of authorized denominations; provided that the Fiscal Agent will not be required to register transfers or make exchanges of (i) Bonds for a period of 15 days next preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds selected for redemption.

Book-Entry Only System

The Depository Trust Company ("DTC"), New Yark, NY, will act as securities depository for the Bonds (the "Bonds"). The Bonds will be issued as fully-registered securities registered 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 Bond certificate will be issued for each maturity of the Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world's largest securities depository, is a limited-purpose trust company 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. DTC holds and provides asset servicing for over 2.2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in tum, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New Yark Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard

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& Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in tum to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations 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 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

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

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 Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Fiscal Agent and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are 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. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC's procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal, redemption price and interest payments on the Bonds 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 District or the Trustee, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial 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 Participant and not of DTC, the Trustee, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption price and interest payments to Cede & Co. ( or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Trustee, disbursement of such payments to

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Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the District or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered.

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

SOURCES OF PAYMENT FOR THE BONDS

Limited Obligations

The Bonds are special, limited obligations of the District payable only from arnouuts pledged uuder the Fiscal Agent Agreement and from no other sources.

The Special Taxes are the primary security for the repayment of the Bonds. Under the Fiscal Agent Agreement, the Services District has pledged to repay the Bonds from the Special Tax Revenues (which are the proceeds of the Special Taxes received by the Services District, including any scheduled payments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes in the arnouut of said lien and interest and penalties thereon) and all moneys deposited in Principal and Interest Accouuts of the Bond Fund, Special Tax Fuud and the Reserve Fuud.

In the event that the Special Tax Revenues are not received when due, the only sources of funds available to pay the debt service on the Bonds are amounts held by the Fiscal Agent in the Principal and Interest Accounts of the Bond Fuud, Special Tax Fund and the Reserve Fund for the exclusive benefit of the Owners of the Bonds.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE SERVICES DISTRICT, THE COUNTY OF RIVERSIDE, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE SPECIAL TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE SERVICES DISTRICT BUT ARE SPECIAL OBLIGATIONS OF THE SERVICES DISTRICT PAYABLE SOLELY FROM THE SPECIAL TAXES AND OTHER AMOUNTS PLEDGED UNDER THE FISCAL AGENT AGREEMENT AS MORE FULLY DESCRIBED HEREIN.

Special Taxes

Authorization and Pledge. In accordance with the provisions of the Act, the Board of Directors established the District on May 8, 2006 for the purpose of financing the acquisition, construction and installation of various public improvements required in connection with the proposed development within the District. At a special election held on May 16, 2006, the owners of the property within the District authorized the District to incur indebtedness in an arnouut not to exceed $10,000,000, and approved the Rates and Method which authorizes the Special Tax to be levied to repay District indebtedness, including the Bonds. On July 23, 2007 the Board adopted Ordinance No. 276 levying Special Taxes in the District.

The District has covenanted in the Fiscal Agent Agreement that each year it will levy Special Taxes up to the maximum rates permitted under the Rates and Method in an amount sufficient, together with other arnouuts on deposit in the Special Tax Fund, to pay the principal of and interest on any Outstanding Bonds and Parity Bonds, to replenish the Reserve Fund and to pay the estimated Administrative Expenses.

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The Special Taxes levied in any fiscal year may not exceed the maximum rates authorized pursuant to the Rates and Method. See APPENDIX A-"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES." There is no assurance that the Special Tax proceeds will, in all circumstances, be adequate to pay the principal of and interest on the Bonds when due. See "RISK FACTORS-Insufficiency of Special Taxes."

Rate and Method of Apportionment of Special Taxes. All capitalized terms used in this section shall have the meaning set forth in Appendix A.

Under the Rates and Method, commencing with Fiscal Year 2006-07, all Taxable Property in the District will be classified as Developed Property (Residential or Non-Residential) or Undeveloped Property and will be subject to a Special Tax levy at the maximum rates described in Section C of the Rates and Method.

For purposes of the levy of Special Taxes to satisfy the Maximum Special Tax for Debt Service and Facilities, a parcel will be classified as Developed Property if it is Taxable Property for which a building permit for residential dwelling units or non-residential construction was issued prior to March 1 of the fiscal year preceding the Special Tax levy. For purposes of the levy of Special Taxes to satisfy the O & M Special Tax Requirement, a parcel will be classified as Developed Property, if, as of March I preceding the Fiscal Year for which the Special Tax is being levied, there has been recorded in the official records of the County a subdivision map, parcel map, lot line adjustment or any other similar map which subdivides (or creates) such parcels so that building permits can be issued for construction of one or more residential dwelling units or non-residential buildings thereon. The Maximum Special Tax for Debt Service and Facilities for Developed Property classified as Residential Property will be the greater of (a) the applicable amount set forth in Table I of the Rates and Method (ranging from $3,360 per parcel to $4,288 per parcel), and (b) $3,887 per parcel of Residential Property and $21,992 per Net Acre of Non-Residential Property (each, an "Alternative Special Tax Rate"). The Maximum Special Tax for Debt Service and Facilities for Undeveloped Property will be $21,992 per Net Acre in the District. The Maximum Special Tax rate in the District for O & M for Fiscal Year 2006-07 for each classification of Residential Property is $435 per parcel, as set forth in Table I of the Rates and Method, and for Undeveloped Property and Non-Residential Property is $2,461 per Net Acre. Beginning on July I, 2007 and on July I of each Fiscal Year thereafter, the Maximum Special Tax Rates for O & M will escalate by the percentage increase in the Consumer Price Index (All Items) for Los Angeles-Riverside-Orange County (1982-84 ~ 100) since the beginning of the preceding Fiscal Year, or by 2% of the rate in effect for the previous year, whichever is greater.

After classifying the parcels in the District, the Board of Directors will determine the Debt Service and Facilities Special Tax Requirement (as defined in the Rates and Method) for the District for the fiscal year. "Debt Service and Facilities Special Tax Requirement" means for the District that amount required in any Fiscal Year after taking into consideration available funds pursuant to the Fiscal Agent Agreement: (I) to pay principal of and interest on all outstanding bonds of the Services District for the District, (2) to pay Administrative Expenses attributable to such Bonds and the levy and collection of the Special Taxes, (3) to pay costs of credit enhancement for such Bonds and any amount required to be rebated to the United States with respect to such Bonds, (4) to replenish the Reserve Fund for such Bonds, and (5) to provide any amounts which the Board of Directors determines are necessary to pay the costs of the provision, construction and acquisition of Facilities and/or to accumulate funds therefor.

The Special Tax for Debt Service and Facilities will be levied first on Developed Property in the District up to 100% of the applicable rate set forth in Table I. If additional monies are needed to satisfy the Debt Service and Facilities Special Tax Requirement for the District after levying on all Developed Property in the District at the applicable Table I rate, the Special Tax will be levied next on Undeveloped Property in the District up to the maximum rate for Undeveloped Property for Debt Service and Facilities for the District and finally on Developed Property in the District up to I 00% of the Alternative Special Tax Rate.

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0 & M Special Taxes are levied solely to pay operative and maintenance costs of the facilities and are not available to pay debt service on the Bonds. "O & M Special Tax Requirement" means the amount, after taking into consideration available funds, required in any Fiscal Year to pay: (I) costs related to the ongoing Operation and Maintenance and (2) administrative expenses attributable to said ongoing Operation and Maintenance, as determined by the District. The Maximum Special Tax was increased by 3.84% for Fiscal Year 2007-08. The Maximum Special Tax for Operation and Maintenance at the time of formation was $435.00 per parcel and for Fiscal Year 2007-08 it was $451.70 per parcel. 0 & M Special Taxes will not be available to pay debt service on the Bonds.

For the O & M Special Tax Requirement, the Special Taxes will be levied as follows: (a) First: The Special Tax shall be levied on Developed Property in the District in equal percentages up to 100% of Maximum Special Tax Rate for O & M for each Parcel of Developed Property in the District; and (b) Second: If additional funds are needed, the Special Tax shall be levied on Undeveloped Property in the District in equal percentages up to 100% of Maximum Special Tax Rate for O & M for each Parcel of Undeveloped Property in the District. See APPENDIX A-"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES."

Prepayment of Special Taxes. The Board of Directors may allow property owners to prepay, in whole or in part, the obligation of Parcels to pay the Special Taxes with respect to the Debt Service and Facilities Special Tax Requirement, if it determines, based on the certificate of a Financial Advisor, that allowing such prepayment will not adversely affect its ability to levy sufficient Special Taxes in any Fiscal Year to pay the Debt Service and Facilities Special Tax Requirement or result in the maximum amount of Special Taxes which could be levied on Parcels of Taxable Property for any Fiscal Year, based on the Special Tax Rates for Debt Service and Facilities set forth in Table I, as applicable, being less than the sum of (i) an amount equal to 110 percent of maximum annual debt service on all Outstanding Bonds, plus (ii) Administrative Expenses in the amount of $40,000.

Additionally, the Services District has covenanted in the Fiscal Agent Agreement that the Services District shall cause all applications of owners of property in the District to prepay and satisfy the Special Tax obligation for their property to be reviewed by the Special Tax Consultant and shall not accept any such prepayment unless such consultant certifies in writing that the total amount of the Maximum Special Tax for Debt Service and Facilities (as defined in the Rates and Method) that may be levied on Taxable Property both prior to and after the proposed prepayment is and will be at least 1.1 times the amount of Maximum Annual Debt Service on all Outstanding Bonds plus estimated annual Administrative Expenses. However, as discussed in the succeeding paragraph, the Services District has covenanted in the Fiscal Agent Agreement that it will subordinate priority Administrative Expenses to the extent necessary to pay debt service on the Bonds and maintain the Reserve Fund at the Reserve Requirement. For purposes of such certification, Taxable Property means all parcels of property in the District that are not exempt from the levy of the Special Tax pursuant to the Act or the Rates and Method. The Special Tax Consultant advises that $0 of the Fiscal Year 2006 07 Special Taxes were levied against parcels for which a building permit had been issued and the Special Tax Consultant expects that 674,783 of the Fiscal Year 2007-08 Special Taxes will be levied against parcels for which a building permit has been issued. (See APPENDIX A-"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES"). Prepayments of Special Taxes aggregating in excess of $5,000 will result in a mandatory redemption of Bonds. See "THE BONDS-Redemption-Mandatory Redemption from Special Tax Prepayments.''

The District has covenanted in the Fiscal Agent Agreement that if the prepayment of the Special Tax obligation for any parcel of Taxable Property in the District pursuant to the Rates and Method will result in the total amount of the Maximum Special Tax for Debt Service and Facilities (as defined in the Rates and Method) that may be levied on all parcels of Taxable Property after the proposed prepayment being less than 1.1 times the amount of Maximum Annual Debt Service on all Outstanding Bonds plus the Priority Administrative Expense Amount (i.e., $40,000), the deposit of the Priority Administrative Expense Amount in the Administrative Expense Fund pursuant to the provisions of the Fiscal Agent Agreement concerning disbursements from the Special Tax Fund, shall thereafter be subordinate to the deposits in the Reserve Fund,

15

the Interest Account and the Principal Account that are provided for in the Fiscal Agent Agreement, and no deposit shall be made to the Administrative Expense Fund until all such deposits are made in the Reserve Fund, the Interest Account and the Principal Account.

Collection and Application of Special Taxes. The Special Taxes are collected by the Treasurer-Tax Collector of the County in the same mauner and at the same time as ad valorem property taxes. The District may, however, collect the Special Taxes at a different time or in a different manner if necessary to meet its financial obligations.

Covenants to Protect Special Tax Rates. The Services District has made certain covenants in the Fiscal Agent Agreement for the purpose of ensuring that the current maximum Special Tax rates and method of collection of the Special Taxes are not altered in a manner that would impair the Services District's ability to collect sufficient Special Taxes to pay debt service on the Bonds and Administrative Expenses when due. First, the Services District has covenanted that, to the extent it is legally permitted to avoid doing so, it will not initiate and conduct proceedings to reduce the maximum Special Tax rates (the "Maximum Rates") and, in the event an ordinance is adopted by initiative which purports to reduce or otherwise alter the Maximum Rates, the Services District will commence and pursue legal action seeking to preserve its ability to avoid reduction of Maximum Rates. See "RISK FACTORS-Proposition 218." Second, the Services District has covenanted not to permit the tender of Bonds in payment of any Special Taxes except upon receipt of a certificate of an Independent Financial Consultant that to accept such tender will not result in the Services District having insufficient Special Tax Revenues to pay the principal of and interest on the Outstanding Bonds following such tender. See "RISK FACTORS-Non-Cash Payments of Special Taxes."

Although the Special Taxes constitute liens on taxable parcels within the District, they do not constitute a personal indebtedness of the owners of property within the District. Moreover, other liens for taxes and assessments already exist on the property located within the District and others could come into existence in the future in certain situations without the consent or knowledge of the Services District or the landowners in the District. See "RISK FACTORS-Parity Taxes, Special Assessments and Land Development Costs." There is no assurance that property owners will be financially able to pay the annual Special Taxes or that they will pay such taxes even if financially able to do so, all as more fully described in the section of this Official Statement entitled "RISK FACTORS."

Under the terms of the Fiscal Agent Agreement, all Special Tax Revenues received by the District are to be deposited in the Special Tax Fund. Special Tax Revenues deposited in the Special Tax Fund are to be applied by the Fiscal Agent under the Fiscal Agent Agreement in the following order of priority: (i) to deposit up to $40,000 to the Administrative Expense Fund to pay Administrative Expenses; (ii) to replenish the Reserve Fund to the Reserve Requirement; (iii) to transfer to the Bond Fund to pay the principal of and interest on the Bonds when due; (iv) to make any deposit in the Reserve Fund to the extent that the amount on deposit therein is less than the Reserve Requirement (i) above; and (vi) for any other lawful purpose of the District. See APPENDIX D-"SUMMARY OF FISCAL AGENT AGREEMENT."

Proceeds of Foreclosure Sales. The net proceeds received following a judicial foreclosure sale of land within the District resulting from a landowner's failure to pay the Special Taxes when due are included within the Special Tax Revenues pledged to the payment of principal of and interest on the Bonds under the Fiscal Agent Agreement.

Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of any Special Tax or receipt by the District of Special Taxes in an amount which is less than the Special Tax levied, the Board of Directors, as the legislative body of the District, may order that Special Taxes be collected by a superior court action to foreclose the lien within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at a judicial foreclosure sale. Under the Act, the commencement of judicial foreclosure following the nonpayment of a Special Tax is not mandatory. However, the Services District has covenanted for the benefit of the owners of the Bonds that it will commence and diligently pursue

16

to completion, judicial foreclosure proceedings against (i) parcels with delinquent Special Taxes in excess of $5,000 by the October I following the close of the Fiscal Year in which such Special Taxes were due; and (ii) all properties with delinquent Special Taxes by the October I following the close of any fiscal year in which the Services District receives Special Taxes in an amount which is less than 95% of the total Special Tax levied. See APPENDIXD-"SUMMARY OF FISCAL AGENT AGREEMENT-Other Covenants of the Services District."

If foreclosure is necessary and other funds (including amounts in the Reserve Fund) have been exhausted, debt service payments on the Bonds could be delayed until the foreclosure proceedings have ended with the receipt of any foreclosure sale proceeds. Judicial foreclosure actions are subject to the normal delays associated with court cases and may be further slowed by bankruptcy actions, involvement by agencies of the federal government and other factors beyond the control of the Services District and the District. See "RISK FACTORS-Bankruptcy and Foreclosure." Moreover, no assurances can be given that the real property subject to foreclosure and sale at a judicial foreclosure sale will be sold or, if sold, that the proceeds of such sale will be sufficient to pay any delinquent Special Tax installment. See "RISK FACTORS-Land Values." Although the Act authorizes the Services District to cause such an action to be commenced and diligently pursued to completion, the Act does not impose on the District or the Services District any obligation to purchase or acquire any lot or parcel of property sold at a foreclosure sale if there is no other purchaser at such sale. The Act provides that, in the case of a delinquency, the Special Tax will have the same lien priority as is provided for ad valorem taxes.

No Teeter Plan. Although the Riverside County Board of Supervisors has adopted the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the "Teeter Plan") which allows each entity levying secured property taxes in the County to draw on the amount of property taxes levied rather than the amount actually collected, as provided for in Section 4 70 I el seq. of the California Revenue and Taxation Code, the District is not included in the County Teeter Plan. Consequently, the District may not draw on the County Tax Loss Reserve Fund in the event of delinquencies in Special Tax payments within the District.

Reserve Fund

In order to secure further the payment of principal of and interest on the Bonds, the Services District is required, upon delivery of the Bonds, to deposit in the Reserve Fund and thereafter to maintain in the Reserve Fund an amount equal to the Reserve Requirement. The Fiscal Agent Agreement provides that the amount in the Reserve Fund shall, as of any date in any Bond Year, equal the lesser of (i) I 0% of the par amount of the Bonds; (ii) Maximum Annual Debt Service on the Bonds; or (iii) one hundred twenty-five percent (125%) of average Annual Debt Service on the Bonds (the "Reserve Requirement").

Subject to the limits on the maximum annual Special Tax which may be levied within the District, as described in Appendix A, the Services District has covenanted to levy Special Taxes in an amount that is anticipated to be sufficient, in light of the other intended uses of the Special Tax proceeds, to maintain the balance in the Reserve Fund at the Reserve Requirement. Amounts in the Reserve Fund are to be applied to (i) pay debt service on the Bonds, to the extent other monies are not available therefor; (ii) redeem the Bonds in whole or in part, including without limitation, from Special Tax Prepayments; and (iii) pay the principal and interest due in the final year of maturity of the Bonds. In the event of a prepayment of Special Taxes, under certain circumstances, a portion of the Reserve Fund will be added to the amount being prepaid and be applied to redeem Bonds. As described in the Fiscal Agent Agreement, the Reserve Fund credit will be equal to the expected reduction in the Reserve Requirement; provided, however, there will be no Reserve Fund credit if the amount in the Reserve Fund is less than the Reserve Requirement. See APPENDIX D-"SUMMARY OF FISCAL AGENT AGREEMENT-Reserve Fund."

17

THE DISTRICT

General Description of the District

The District consists of approximately 53 gross acres located in an unincorporated area of the County.

The land in the District is approved for the construction of 183 residential units (the "Development"). The final tract map for the Development was recorded on May 31, 2006. See also "THE DEVELOPMENT AND PROPERTY OWNERSHIP."

Description of Authorized Facilities

The Services District Facilities authorized to be financed from Bond proceeds consist of park and recreation facilities, master plan water system facilities, including capacity in existing facilities, and master plan sewer system improvements, including capacity in existing facilities and sewage treatment and disposal capacity as well as incidental expenses related to the plauning, design and completion of such facilities. The School District Facilities authorized to be financed from Bond Proceeds include K-12 public school facility improvements to be owned and operated by the School District pursuant to that certain Joint Community Facilities Agreement by and between the School District and the Services District, dated as of May 2, 2006.

The estimated costs of the Service District Facilities and School District Facilities expected to be financed with the proceeds of the Bonds are described in the Table I below:

TABLE 1 COMMUNITY FACILITIES DISTRICT NO. 30

OF JURUPA COMMUNITY SERVICES DISTRICT ESTIMATED COSTS OF PROJECTS

Project

Water and Sewer Improvements School District Facilities Park and Recreation Improvements Total

Source: Developer and Services District.

Estimated Direct and Overlapping Indebtedness

Estimated Cost

$ 2,410,110.00 2,496,799.19 I 569 600.00

$ 6476509.19

Within the District's boundaries are numerous overlapping local agencies providing public services. The District is the sole local agency with outstanding bonds which are secured by special taxes or assessments on the parcels within the District. The approximate amount of the direct and overlapping debt on the parcels within the District for fiscal year 2007-08 is shown in Table 2 below (the "Debt Report").

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TABLE2 JURUPA COMMUNITY SERVICES DISTRICT COMMUNITY FACILITIES DISTRICT NO. 30

DIRECT AND OVERLAPPING DEBT AS OF AUGUST 15, 2007

I. Assessed Value 2007-2008 Equalized Roll Assessed Valuation

II. Land Secured Bond Indebtedness

% Outstanding Direct and Overlapping Bonded Debt

JURUPA COMMUNITY SERVICES DISTRICT CFD NO. 30

Type

CFD

Issued Outstanding Applicable

$ 7,395,000 $ 7,395,000 100.000% TOT AL LAND SECURED BONDED DEBT( 1l

Authorized but Unissued Direct and Overlapping Indebtedness Type Authorized Unissued

JURUPA COMMUNITY SERVICES DISTRICT CFD NO. 30 CFD $ 10,000,000 $ 2,605,000(Jl TOT AL UNISSUED LAND SECURED INDEBTEDNESS(1l

TOT AL OUTSTANDING AND UNISSUED LAND SECURED INDEBTEDNESS

III. General Obligation Bond Indebtedness

Outstanding Direct and Overlapping Bonded Debt Type Issued Outstanding

METROPOLITAN WATER DEBT SERVICE GO $850,000,000 $359,115,000 RIVERSIDE COMMUNITY COLLEGE DISTRICT DEBT SERVICE GO $155,000,000 $142,576,109 CORONA-NORCO UNIFIED SCHOOL DISTRICT DEBT SERVICE GO $145,144,622 $131,744,622 TOT AL GENERAL OBLIGATION BONDED DEBT( 1l

Authorized but Unissued Direct and Overlapping Indebtedness Type Authorized Unissued

METROPOLITAN WATER DEBT SERVICE GO $850,000,000 $ 0 RIVERSIDE COMMUNITY COLLEGE DISTRICT DEBT SERVICE GO $350,000,000 $195,000,000 CORONA-NORCO UNIFIED SCHOOL DISTRICT DEBT SERVICE GO $315,000,000 $175,000,000 TOTAL UNISSUED GENERAL OBLIGATIONINDEBTEDNESS(1l

TOT AL OUTSTANDING AND UNISSUED GENERAL OBLIGATION INDEBTEDNESS

TOT AL OF ALL OUTSTANDING DIRECT AND OVERLAPPING BONDED DEBT

% Applicable

100.000%

% Applicahli5J

0.003568%

0.086026%

0.245152%

% Applicablel5J

0.003568%

0.086026%

0.245152%

TOTAL OF ALL OUTSTANDING AND UNISSUED DIRECT AND OVERLAPPING INDEBTEDNESS

IV. Ratios to 2007-2008 Assessed Valuation Outstanding Land Secured Bonded Debt

Outstanding General Obligation Bonded Debt Total Outstanding Bonded Debt

Unissued Land Secured Indebtedness Unissued General Obligation Indebtedness

Total Unissued Indebtedness Total Outstanding and Unissued Land Secured and General Obligation Indebtedness

9.nl 156.87,1

9.16,1 27.6Ll

120.5Ll 22.46, 1

6.50, 1

Parcels in CFD No. 3012J

183

Parcels in CFD No. 3012J

183

Parcels in CFD No. 3012J

183

183

183

Parcels in CFD No. 3012J

183

183

183

(I} Albert A. Webb Associates is not aware of any additional bonded debt for parcels in the District for the referenced fiscal year, 2007-08 (z} All parcels have subdivided into 183 individual parcels for Fiscal Year 2007-08 (3) Additional bonds will be issued for refunding only

Source: Albert A. Webb Associates

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$71,913,909

Amount Applicable

$ 7395000 $ 7,395,000

Amount Applicable

$ 2 605 000 $ 2,605,000

$10,000,000

Amount Applicable

$ 12,813

122,653

322 975 $ 458,441

Amount Applicable

$ 0

167,751

429016 $ 596,767

$ 1,055,208

$ 7,853,441 $11,055,208

Direct and Overlapping Assessments and Taxes

The following direct and overlapping assessments and taxes are applicable to all properties within the District.

Overlapping Assessments

Metropolitan Water District Standby West. An assessment is levied by the Metropolitan Water District at a rate of$9.22 per acre, or $9.22 per parcel ifless than an acre to fund projects such as the Eastside Reservoir.

Flood Control NPDES (National Pollutant Discharge Elimination System) - Santa Ana River. An assessment is levied by the Riverside County Flood Control and Water Conservation District at a rate of $22.50 per acre or $3.75 per single-family residence. The assessment pays for the costs associated with the development, implementation, and management of storm water management activities required by the federally mandated NPDES Permit program.

Landscaping and Lighting Maintenance District No. 89-1-Consolidated, Zone 41. An assessment is levied by the County of Riverside at a rate of $45. 70 per single-family residence. The assessment pays for the costs associated with the maintenance and servicing of catch basin filtrations systems within public rights-of­way, including the removal of petroleum hydrocarbons and other pollutants from water runoff. Future annual assessments will be increased by the percentage increase in the Consumer Price Index, since the beginning of the preceding Fiscal Year, or by two percent (2%), whichever is greater.

N. W. Vector Control. An assessment is levied by the North West Vector Control and Mosquito Abatement District at a rate of $1.47 per single-family residence for Fiscal Year 2006-2007. The assessment has been suspended for Fiscal Year 2007-2008.

Jurupa Community Services District Lighting Maintenance District No. 2001-3. The assessment pays for the energy costs of streetlights within the District. There are currently fifty-three zones within the lighting maintenance district each with a different rate of assessment. The parcels in the District are in Zone PP for which the assessment is currently $44.82 per single-family residence. Future annual assessments will be increased so that the total amount of the assessments on all such lots and parcels will not be less than the District's costs, including the cost of electric power, for the operation and maintenance of streetlights in each such fiscal year.

Special Taxes

The District. The District Special Taxes will be levied to pay debt service on the Bonds and to pay for the operation and maintenance of parks, parkways, including street trees and landscape. For single-family residences, the Special Tax for Debt Service and Facilities is based on the square footage of a residence. The maximum special tax for single-family residences in the District ranges from $3,360 to $4,288 per residence and the maximum special tax for non-residential property is $21,992 per net acre. The initial maximum special tax for operation and maintenance for single-family residences in the District is $435 per residence. The maximum special tax for operation and maintenance will be increased by the percentage increase in the Consumer Price Index (All Items) for Los Angeles - Riverside - Orange County (1982-84 ~ 100) since the beginning of the preceding Fiscal Year, or by two percent (2%), whichever is greater, on July I of each year and will increase annually on each subsequent July I for the Fiscal Year then commencing. The Maximum Special Tax for Operation and Maintenance increased by 3.84% for Fiscal Year 2007-08. The Maximum Special Tax for Operation and Maintenance at the time of formation was $435 per parcel and for Fiscal Year 2007-08 it was $451. 70 per parcel.

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Ad Valorem Overrides

Metropolitan Water District Debt Service. Property within the District is subject to a Metropolitan Water District debt service tax. The rate on such property for Fiscal Year 2007-2008 is 0.0045% per $100 of assessed value. The tax is used to pay debt service on $850,000,000 in bonds which were issued by the Metropolitan Water District under an authorization of $850,000,000, of which approximately $359,115,000 was outstanding as of September I, 2007.

Corona/Norco Unified School District 6.0. Bond. Property within the District is subject to a Corona/Norco Unified School District debt service tax. This tax pays for new school construction, modernization, and improvement projects. The rate on such property for Fiscal Year 2007-2008 is 0.03794% per $100 of the assessed value. The tax is used to pay debt service on $145,144,622 in bonds which were issued by the Corona/Norco Unified School District under an authorization of $315,000,000, of which approximately $131,744,622 was outstanding as of September I, 2007.

Riverside Community College District Debt Service. Property within the District is subject to a Riverside Community College District debt service tax. This tax pays for new school construction, modernization, and improvement projects. The rate on such property for Fiscal Year 2007-2008 is 0.01259% per $100 of assessed value. The tax is used to pay debt service on $155,000,000 in bonds which were issued by the Riverside Community College District under an authorization of$350,000,000, of which approximately $142,576,109 was outstanding as of September I, 2007.

Expected Tax Burden

As shown in Table 3, it is expected that the total tax burden on residential units in the District will range from approximately 1.88% to 1.93% of the projected initial sales price of the units. These percentages are based on the estimated home prices from the Appraisal, which is the minimum value per the Appraisal Report. The estimated tax rates and amounts presented herein are based on currently available information. The actual amounts charged may vary and may increase in future years. Table 3 below describes the estimated fiscal year 2007-08 tax burden for a sample developed property in the District.

21

TABLE3 JURUPA COMMUNITY SERVICES DISTRICT

COMMUNITY FACILITIES DISTRICT NO. 30 (EASTVALE AREA) ESTIMATED FISCAL YEAR 2007-2008 TAX OBLIGATION

FOR A SAMPLE DEVELOPED PROPERTY

2 3 4 5 CFD Tax Category Under 2,501 to 2,701 to 3,101 to 3,101 to

2,501 S.F. 2,700 S.F. 2,900 S.F. 3,300 S.F. 3,300 S.F. Home Size 2,412 2,625 2,825 3,242 3,242

Estimated Home Price (From Appraisa\)(1l $446,220.00 $472,500.00 $494,375.00 $518,720.00 $518,720.00

Ad Valorem Property Taxes: Basic Levy (1.00%) $ 4,462.20 $ 4,725.00 $ 4,943.75 $ 5,187.20 $ 5,187.20 Metropolitan Water District Debt Service (0.0045%) 20.08 21.26 22.25 23.34 23.34

Riverside Community College District Debt Service (.01259%) 56.18 59.49 62.24 65.31 65.31 Corona/Norco Unified School District G.O. Bond (0.03794%) ---1<,'LlQ 179.27 187.57 196.80 196.80

Total General Property Taxes $ 4,707.76 $ 4,985.02 $ 5,215.81 $ 5,472.65 $ 5,472.65 Assessment, Special Tax & Parcel Charges:

Flood Control NPDES - Santa Ana $3.75 $ 3.75 $ 3.75 $ 3.75 $ 3.75 Met Water Dist Standby West 9.22 9.22 9.22 9.22 9.22 L&LMD No. 89-1-Conso\idated 45.70 45.70 45.70 45.70 45.70 JCSD LL1\1D No. 2001-3, Zone PP (Lighting Maintenance District) 44.82 44.82 44.82 44.82 44.82 JCSD CFD No. 30 - Operation & Maintenance 451.70 451.70 451.70 451.70 451.70 JCSD CFD No. 30 - Annual Tax Per Benefit Unit 3,360.00 3,503.00 3,597.00 3,712.00 3,712.00 N.W. Mosquito & Vector Control (z) ___QJ)Q_ ___QJ)Q_ __QJ)j) ____QJ)Q_ ___QJ)Q_

Total Assessments & Parcel Charges $ 3,915.19 $ 4,058.19 $ 4,152.19 $ 4,267.19 $ 4,267.19

Projected Total Property Tax $ 8,622.95 $ 9,043.21 $ 9,368.00 $ 9,739.84 $ 9,739.84 Projected Effective Tax Rate 1.93% 1.91% 1.89% 1.88% 1.88%

(1) Minimum Value per the Appraisal Report.

6 3,301 to

3,500 S.F. 3,376

$523,280.00

$ 5,232.80 23.55

65.88 198.53

$ 5,520.76

$ 3.75 9.22

45.70 44.82

451.70 3,827.00 __QJ)j)

$ 4,382.19

$9,902.95 1.89%

(') For Fiscal Year 2006-07, this assessment was $1.47 per single family residential parcel and for Fiscal Year 2007-08, this assessment has been suspended. Source: Albert A. Webb Associates, based on sales price and home size information from the Appraisal.

22

7 8 3,901 to Over

4,100 S.F. 4,100 S.F. 4,057 4,313

$567,980.00 $582,255.00

$ 5,679.80 $ 5,822.55 25.56 26.20

71.51 73.31 215.49 220.91

$ 5,992.36 $ 6,142.97

$ 3.75 $ 3.75 9.22 9.22

45.70 45.70 44.82 44.82

451.70 451.70 4,139.00 4,288.00 ___QJ)Q_ ____QJ)Q_

$ 4,694.19 $ 4,843.19

$ 10,686.55 $10,986.16 1.88% 1.89%

Estimated Appraised Value-to-Lien Ratio

Table 4 below sets forth the estimated value-to-lien ratio for developed aud uudeveloped property in the District, based upon the appraised value for such property as of August 15, 2007.

Dwelling Property Owner Units

Pulte Homes 26 Individual Owners ill

Total 183

TABLE4 JURUPA COMMUNITY SERVICES DISTRICT COMMUNITY FACILITIES DISTRICT NO. 30

ESTIMATED VALUE-TO-LIEN RATIOS ALLOCATED BY PROPERTY OWNER

General Percentage Appraised Obligation Estimated of FY Property Bond FY 2007-08 2007-2008 JCSDCFD Valui1J Debt rzJ LeryPJ Lecy No. 30 Deb/4J

$ 7,825,000 $ 39,335 $ 76,998 14.15% $1,046,097 83 373 050 419 106 467312 85.85% 6 348 903

$91,198,050 $ 458,441 $ 544,310 100.00% $7,395,000

(I} Reflects the appraised value based on ownership status as of August 15, 2007, the date of value of the Appraisal

Aggregate Value-to-Outstanding Lien

Debt Ratio

$ 1,085,432 7.2Ll 6 768 009 12.32,1

$ 7,853,441 11.6Ll

(z} Consisting of MWD, Riverside Community College District, and Corona-Norco School District general obligation debt, based on Fiscal Year 2007-2008 Equalized Roll Assessed Valuation allocated to property owners based on ownership as of August 15, 2007

(3) Fiscal Year 2007-2008 Debt Service ($504,310) plus Administration ($40,000) based upon development status as of August 15, 2007 and full year debt service

with no capitalized interest (4) Responsibility of the par amount has been allocated based on the Fiscal Year 2007-08 special tax le"Y based on development status as of August 15, 2007 and

finalized bond sizing as provided by UBS Securities LLC on October 10, 2007. As of August 15, 2007, all parcels have been issued a building permit and are therefore considered to be Developed pursuant to the definition in the Rates and Method of Apportionment

Source: Albert A. Webb Associates

Estimated Assessed Value-to-Lien Ratio

The assessed value of the laud within the District is $71,913,909 for fiscal year 2007-08. Dividing the assessed value by the principal amount of the Bonds proceeds results in an estimated assessed value-to-lien ratio of 9. 72-to-l for the District.

As a part of its Annual Report delivered pursuaut to its Continuing Disclosure Agreement, the Services District on behalf of the District will provide the estimated assessed value-to-lien ratio for all Developed Property in the aggregate aud for each owner of Undeveloped Property.

Delinquency History

There have been no ad valorem or special assessment tax delinquencies in the area now included within the District except as disclosed under the caption "THE DEVELOPMENT AND PROPERTY OWNERSHIP-Tax Delinquencies of Property Owners aud Other Matters".

Significant Special Taxpayers

The special tax consultaut has calculated that based on ownership information as of the date of the Appraisal, the Developer would be responsible for 14.15% of the projected $544,310 2007-08 Special Tax Levy for the District aud the individual homeowners would be responsible for 85.85% Special Tax Levy for the District based on ownership as of the Appraisal date of value of August 15, 2007. In determining the investrueut quality of the Bonds, Bondowners should be aware that all of the Special Taxes that the Developer is required to pay will be paid by the Developer until such time as additional parcels are trausferred to individual owners. As of September I, 2007, three additional homes had closed escrow to individual homeowners. An authorized officer of the Developer will execute a certificate in which the Developer will represent that it has never defaulted to any material extent in the payment of special taxes or assessments in connection with the District or any other community facilities district or assessment district that was not cured within the fiscal year in which the tax assessment was levied within the past five years.

23

THE DEVELOPMENT AND PROPERTY OWNERSHIP

Except for the information under the caption "Appraisal," the Developer has provided the information in this section.

The information herein regarding ownership of property in the District has been included because it is considered relevant to an informed evaluation of the Bonds. The inclusion in this Official Statement of information related to the Developer should not be construed to suggest that the Bonds, or the Special Taxes that will be used to pay the Bonds, are recourse obligations of any property owner in the District. A property owner may sell or otherwise dispose of land within the District or a development or any interest therein at any time.

As the proposed land development progresses and parcels are sold, it is expected that the ownership of the land within the District will become more diversified. No assurance can be given that the proposed development of the land within the District will occur, or that it will occur in a timely manner or in the configuration or intensity described herein, or that the Developer will retain ownership of any of the land within the District. The Bonds and the Special Taxes are not personal obligations of the Developer or any subsequent landowners and, in the event that the Developer or any subsequent landowner defaults in the payment of the Special Taxes, the District may proceed with judicial foreclosure but has no direct recourse to the assets of the Developer or any subsequent landowner. As a result, other than as provided herein, no financial statements or information is, or will be, provided about the Developer. The Bonds are secured solely by the Special Taxes and other amounts pledged under the Fiscal Agent Agreement. See "SOURCES OF PAYMENT FOR THE BONDS" and "RJSK FACTORS."

General Description of the Development

The District consists of approximately 53 gross acres located in an unincorporated area of the County. The District is not within the sphere of influence of any city. The final tract map for the Development was recorded by the County Recorder on May 31, 2006. The District is zoned R-1. The District is within the Eastvale Area and the residential portion is being developed by the Developer into 183 single family homes in one neighborhood.

The Developer

Pulte Home Corporation is a Michigan corporation whose parent is Pulte Homes, Inc., also a Michigan corporation, which is headquartered in Bloomfield Hills, Michigan. Pulte Homes, Inc. is a Fortune 200 company that has been constructing single family homes for approximately 57 years. Today, Pulte Homes, Inc. operates in approximately 50 markets throughout the country and through its Del Webb brand earned the distinction as the country's leading builder of active adult communities for people over 55 years of age. Over its history, Pulte Homes, Inc. has constructed almost 500,000 homes.

Pulte Homes, Inc. is a publicly traded company with its stock listed on the New Yark Stock Exchange under the symbol "PHM." Pulte Homes Inc. is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance with the Exchange Act, Pulte Homes Inc. files reports, proxy statements, and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements, and other information may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N. W., Washington, D.C. 20549.

Financial statements for Pulte Homes, Inc. for the fiscal year ended December 31, 2006 are included in the Pulte Annual Report on Form 10-K filed by Pulte Homes, Inc. with the Commission on February 23, 2007 (the "Annual Report"). Financial statements for Pulte Homes, Inc. for the second quarter ended June 30, 2007 are included in the Quarterly Report on Form 10-Q filed by Pulte Homes, Inc. with the Commission on August 8, 2007. Such Annual Report on Form 10-K and Quarterly Report on Form 10-Q are specifically not incorporated by reference in this Official Statement.

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For the second quarter ended June 30, 2007, Pulte Homes Inc. reported a loss from continuing operations of $507.6 million, or $2.01 per share, including impairments, laud-related charges aud restructuring charges. This compared with $243.9 million of income from continuing operations for the prior year second quarter, or $0.94 per diluted share. Consolidated revenues for the quarter were $2.0 billion, a decline of 40% from prior year second quarter revenues of $3.4 billion. Revenues from homebuilding settlements in the second quarter decreased 42% to $1.9 billion compared with $3.3 billion in the second quarter last year. The change in revenue for the quarter reflects a 40% decrease in closings to 5,938 homes, and 4% decrease in average selling price to $320,000. Second quarter homebuilding pre-tax loss was approximately $803.2 million, compared with prior year second quarter pre-tax income of $380.8 million. Pulte Homes also recorded a pretax restructuring charge of approximately $39.1 million during the quarter. Net new home orders for the second quarter were 7,532 homes, valued at $2.4 billion, which represents declines of 20% aud 22%, respectively, from prior year second quarter results. Pulte Homes' ending backlog as of June 30, 2007 was valued at $5.2 billion (14,928 homes), compared with a value of $6.9 billion (19,516 homes) at the end of last year's second quarter. At the end of the second quarter 2007, Pulte Homes lnc.'s debt-to-capitalization ratio was 37.9%.

For the six months ended June 30, 2007, Pulte Homes lnc.'s loss from continuing operations was $593.2 million, or $2.35 per share, compared with income from continuing operations of $506.5 million, or $1.95 per diluted share for the six months ended June 30, 2006. Consolidated revenues for the period were $3. 9 billion, down from $6.3 billion for the first six months of last year. Revenues from homebuilding settlements for the period were $3.7 billion, down 40% from the prior year. Lower revenues for the period resulted from a 3% decrease in average selling price of $325,000, combined with a 39% decrease in the number of homes closed to 11,358. Homebuilding pre-tax loss for the period was approximately $951.6 million, compared with pre-tax income of $758.4 million for the prior year period.

On August 21, 2007, Staudard & Poor' s Ratings-Service cut the corporate credit aud senior unsecured rating on Pulte Homes, Inc. to "BBB-" from "BBB." On October 11, 2007 Moody's Investors Service downgraded Pulte Homes, Inc. to non-investment grade status.

The internet addresses aud references to filings with the SEC are included for reference only, aud the information on these luternet sites aud on file with the SEC are not a part of this Official Statement aud are not incorporated by reference into this Official Statement.

Other Projects Undertaken by Pulte Homes. A small sample of other development projects recently completed or currently under development by Pulte Homes audits affiliates in Southern California include the following:

Approximate Estimated Location Number of Estimated Square Completion

Project Name (CA) Units Price Range Footage Status01 Date

Brookdale Terrace Corona 311 $521,000- 2,400-4,300 Closed Out 2/28/07 $653,000

Rancho Summit Rancho 360 $529,900- 1,860-2,688 62 left to 12/l/Oi2l Cucamonga $658,900 Close

Cypress Pointe Victorville 441 $282,900- 2,392-3,028 246 left to 3/1/0912)

$372,900 Close Solera Apple Valley Apple Valley 1,967 $241,400- 1,657-2,230 1,021 left to 1/1/1012)

$381,400 Close

(1) Based on development status as of August 15. (2) Projected. Source: The Developer.

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Development Plan

Current development plans for the approximately 36 developable acres of home lots and 5 acres of park comprising the neighborhood being developed include the construction and sale to individual homebuyers of 183 market rate residential units in a product line ranging in size from 2,412 square feet to 4,313 square feet and with a minimum lot size of approximately 7,200 square feet. The Developer's current development plan calls for the 183 homes in Stoneridge to be sold to individual homeowners with final escrow closing by 4th quarter 2007. However, the Appraisal concludes that the 22 builder-owned homes (which excludes the four homes which were under construction) will be absorbed by April 15, 2008. As of August 15, 2007, the date of value of the Appraisal, of the 183 residential units proposed to be constructed by the Developer, 157 had closed escrow to individual homeowners. Of the 26 homes that had not closed escrow to individual homeowners, 4 model homes were complete, 18 homes were over 95% complete (13 of which had been sold) and 4 homes were under construction. Construction of the 4 remaining homes (lots I, 2, 7 and 8) began on June 19, 2007 and is projected to be completed by November 9, 2007.

The Developer's expectations regarding final close of escrow and sales could be altered due to changes in economic and market conditions, or other factors. No assurances can be given that the construction of the remaining four homes or sales and closings will be carried out on the schedule, or according to the plans described herein or that the Developer's plans will not change after the date of the Official Statement. See "RISK FACTORS-Risks Related to Current Market Conditions."

As previously mentioned, the Developer reports that it is currently experiencing increased cancellations and reduced sales in many of its markets. See "THE DEVELOPMENT AND PROPERTY OWNERSHIP-The Developer" and "RISK FACTORS-Risks Related to Current Market Conditions." The Developer reports that it had sales traffic of 119 individuals in July and 196 individuals in August which decreased to 79 individuals in September. Based on information provided by the Developer, the following chart summarizes the sales and cancellation history for its project in the District.

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STONERIDGE SALES & CANCELLATIONS HISTORY

Gross Available Closed to Week Ending Released Sale/'! Cancelled Net Sales forSal/2! Date

Prior to May 2007 175 298 140 158 17 130 May2007 0 4 0 162 13 142 June 2007 8 4 0 166 17 152 July 2007 0 9 0 175 8 157 August 2007 0 6 9 172 11 160(')

September 2007 0 5 3 174 9 160 October 20oi3l 0 0 0 0 0 0 November 200i3l 0 0 0 0 0 0 December 200i3l 0 0 0 0 0 0

(1) Total home sales may exceed the total number of homes in the residential project due to duplicate sales of the same home. (2) 3 homes closed after August 15, 2007.

(3) Projected.

The above information is limited to a very short period of time and is not presented to illustrate any specific historical trend or future projection of home sales and cancellations by the Developer within the District or company-wide as cancellations could increase or decrease and the rate of sales could slow or increase compared to what is presented above.

A site map of the development in the District is set forth on the next page, and a summary of the planned units by product type and the estimated sizes and prices is set forth in Table 5 below.

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;,-----ijjjj.i----~,c,.---~ RANCHO

CUCAMONG

MONTCLAIR

I

CHINO

CORONA

* COMMUNITY FACILITIES DISTRICT No. 30

FONTANA

San Bernardino Count Riverside County

G:\2007\07m0060\Gis\CFD_No30,mxd; Map created March 27, 2007 28

RIALTO

JURUPA COMMUNITY SERVICES DISTRICT

MORENO VALLEY

Developer

The Developer

TABLES COMMUNITY FACILITIES DISTRICT NO. 30

OF JURUPA COMMUNITY SERVICES DISTRICT SUMMARY OF PROPOSED DEVELOPMENT

(As of August 15, 2007)

Projected Development/ Number Square Neighborhood Plan of Lot/'! Footag/2!

Stoneridge I 14 2,412 2 22 2,625 3 10 2,825 4 18 3,242 5 21 3,242 6 21 3,376 7 34 4,057 8 43 4,313

183

Base Home Pric/3J

$ Sold Out 515,200 523,000 557,500 534,400 558,500 591,700 604,750

(I) Base home prices shown are as of August 15, 2007. Number of lots reflects the total number of lots in each plan. Base home price of homes that were sold prior to August 15, 2007 differed from the base prices as of August 15, 2007.

(2) Square footages shown exclude room options which may be offered.

(3) Base home prices shown as of August 15, 2007 exclude the builder's estimate of lot premiums, the sales of options and

extras and include incentives or price reductions. As of September 15, 2007, the Developer was offering three percent (3%) concessions ($15,600 to $18,750) with Pulte Mortgage.

Source: The Developer.

The development summaries shown above are based on the Developer's current plans.

Financing Plan

The Developer acquired its property within the District through internal corporate financing and does not expect to require any loans or lines of credit to implement its development plan. The following table shows the Developer's pro fonna cash flow for the District.

The Developer believes that it has sufficient internal funding (or will generate it through ongoing home sales) to complete its project within the District. However, there is no assurance that amounts necessary to finance the remaining home development costs will be available from the Developer, or from any other source, when needed. Neither the Developer nor any of its affiliates are under any legal obligation of any kind to expend funds for the development of the property within the District. Any internal funding by the Developer to finance development costs within the District is entirely voluntary. Although Table 6 reflects the Developer's current plans as of the date thereof, many factors beyond the Developer's control, or a decision to alter those plans, may cause the actual sources and uses to differ from such projects. The Pro-Fonna is presented to demonstrate that the Developer projects that its sources of funds will be sufficient to complete the development within the proposed timeframe and not to guarantee a particular cash flow from the Developer or its affiliates.

If and to the extent that internal funding, sales revenues and the Developer's share of proceeds of the Bonds are inadequate to pay the costs to complete the development within the District, and other financing by the Developer is not put into place, there could be a shortfall in the funds required to complete the proposed development by the Developer in the District and portions of the project may not be developed.

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TABLE6 THE DEVELOPER'S PROJECTED SOURCES AND USES OF FUNDS

(STONERIDGE) (As of August 31, 2007)

CFD30

Incurred through End of Project August 31, 2007 Dec 31, 2007 Total

Units 160 23 183 Sources

Housing Sales Revenues $104,747,309 $ 12,625,093 $117,372,402 Equity Contributions 0 0 0 Estimated Bond Proceeds 0 6 476 509 6 476 509

Total Sources $104,747,309 $ 19,101,602 $123,848,911

Uses Land Acquisition $ 20,000,000 $ 0 $ 20,000,000 Land Improvement 20,714,385 0 20,714,385 Home Construction 47,440,872 300,000 47,740,872 Indirects, Overhead, and Sales Costs 780,422 149,490 929,912 Property Taxes 449 337 0 449 337

Total Uses $ 89,385,016 $ 449,490 $ 89,834,506 Sources in Excess of Uses $ 15,362,293 $ 18,652,112 $ 34,014,405

Source: the Developer.

Status of Entitlement Approvals

The final tract map for the Development was recorded on May 31, 2006.

Environmental Constraints

The Development has received extensive environmental review and has acquired all of the required permits from regulatory agencies that the Developer currently believes will be required to complete their projects. All appeal periods with respect to such approvals have expired. Notwithstanding the foregoing, it is possible that future events relating to environmental issues could impact the development. See "RISK FACTORS-Future Land Use Regulations and Growth Control Initiatives" and "-Endangered Species."

Infrastructure Requirements and Construction Status

All of the land within the District has been mass graded and developed to finished lots with homes completed or under construction. As of August 15, 2007, the date of value of the Appraisal, of the 183 residential units proposed to be constructed by the Developer, 157 had closed escrow to individual homeowners and of the 26 homes that had not closed escrow to individual homeowners 4 model homes were complete, 18 homes were over 95% complete (13 of which had been sold but not closed escrow) and 4 homes were under construction. The Developer is continuing work on a bridge (Schleisman Road) over the adjacent floor channel along with finalizing improvements to Schleisman Road. According to the Developer, there is an additional $1,800,000 remaining to be spent on these non-community facilities district improvements. The Developer represents that the completion of these non-community facilities district improvements is not tied to their ability to pull building permits or obtain certificates of occupancy within the District.

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Appraisal

An MAI appraisal of the land and existing improvements within the District was prepared by Bruce W. Hull & Associates, MAI, Ventura, California (the "Appraiser"), dated August 15, 2007. The Appraisal is entitled "Summary Appraisal Report - Complete Appraisal, Community Facilities District No. 30 of the Jurupa Community Services District" (the "Appraisal Report"). See APPENDIX B-"APPRAISAL REPORT." The Appraisal Report sets forth an estimate of the market value of the fee simple interest of various properties within the District. The Appraiser is of the opinion that the aggregate market value of the land and improvements in existence within the District as of August 15, 2007, was $91,198,050, providing an overall District-wide appraised value-to-lien ratio (including the Bonds and all overlapping debt) of approximately 11.61-to-l. The Appraisal Report is based upon a variety of assumptions and limiting conditions that are described in Appendix B, including without limitation assumptions that all of the facilities to be financed with proceeds of the Bonds are completed in a timely manner. The Services District and the District make no representation as to the accuracy of the Appraisal. See "PROPERTY OWNERSHIP AND DEVELOPMENT-Infrastructure Requirements" and "-Appraised Value-to-Lien Ratios." There is no assurance that the property within the District can be sold for the prices set forth in the Appraisal Report or that any parcel can be sold for a price sufficient to pay the Special Tax for that parcel in the event of a default in payment of Special Taxes by the landowner. See "RISK FACTORS-Land Values" and APPENDIXB­"APPRAISAL REPORT."

Tax Delinquencies of Property Owners and Other Matters

An authorized officer of the Developer will execute a certificate in which the Developer will represent, aruong other things, substantially to the effect that: (i) the Developer has never defaulted to any material extent in the payment of special taxes or assessments in connection with the District or any other community facilities district or assessment district that was not cured within the fiscal year in which the tax assessment was levied within the past five years; (ii) the Developer is not in default on any loan, line of credit or similar arrangement the result of which could have a material adverse effect on the development of the property owned by it in the District or the Developer's ability to pay Special Taxes prior to delinquency; (iii) no proceedings have been filed and served (based on proper service of process) or pending or to the Developer's kuowledge, threatened in which the Developer may be adjudicated as bankrupt and there are no current plans for the Developer to file for bankruptcy; (iv) the Developer is not involved in any litigation or other action, suit, proceeding, inquiry or investigation which if successful, could reasonably be expected to have a material adverse effect on the development of the property owned by it in the District; and (v) except as described in this Official Statement (including in the "RISK FACTORS" section included below) and except for those consents, permits, authorizations, certifications and approvals of governmental entities required in the ordinary course of the Developer's business, there are no impediments which could reasonably be expected to have a material adverse effect on the Developer's ability to complete the plauned development of its property within the District within the timefrarue and budget described herein.

The Developer failed to comply with its reporting obligations in connection with the City of Bakersfield Assessment District No. 04-3 (Solera/Rio Vista) Limited Obligation Improvement Bonds (Taxable). The Developer is or has been involved in the development of numerous different projects in California over the past five years. Except as described above, the Developer is not aware of any material failures to comply with previous continuing disclosure undertakings by it to provide periodic continuing disclosure reports or notices of material events (within the meaning of Rule 15c2-12) in California within the past five years. However, some such reports may have been filed after their due dates from time to time.

RISK FACTORS

The purchase of the Bonds involves significant investment risks and, therefore, the Bonds are not suitable investments for many investors. The following is a discussion of certain risk factors which should be considered, in addition to other matters set forth herein, in evaluating the investment quality of the Bonds. The

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Bonds have not been rated by a rating agency. This discussion does not purport to be comprehensive or definitive and does not purport to be a complete statement of all factors which may be considered as risks in evaluating the credit quality of the Bonds. The occurrence of one or more of the events discussed herein could adversely affect the ability or willingness of property owners in the District to pay their Special Taxes when due. Such failures to pay Special Taxes could result in the inability of the District to make full and punctual payments of debt service on the Bonds. In addition, the occurrence of one or more of the events discussed herein could adversely affect the value of the property in the District. See "Land Values" and "-Limited Secondary Market" below.

Risks of Real Estate Secured Investments Generally

The Bond Owners will be subject to the risks generally incident to an investment secured by real estate, including, without limitation, (i) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of the District, the supply of or demand for competitive properties in such area, and the market value of residential property or buildings and/or sites in the event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, governmental rules (including, without limitation, zoning laws and laws relating to endangered species and hazardous materials) and fiscal policies; and (iii) natural disasters (including, without limitation, earthquakes and floods), which may result in uninsured losses.

Concentration of Ownership

As of August 15, 2007, 157 or approximately 85% of the proposed 183 homes in the District were owned by individual homeowners, with the remainder of the land within the District was owned by the Developer. The receipt of the Special Taxes is dependent, in part, on the willingness and the ability of the Developer to pay the Special Taxes when due. Failure of the Developer, individual homeowners or any successor landowner to pay the annual Special Taxes when due could result in a default in payments of the principal of, and interest on, the Bonds, when due. See "RISK FACTORS-Failure to Develop Properties" below.

No assurance can be made that the Developer, or its successors, will complete the ongoing construction of the last 4 homes for the District as described in this Official Statement. See "RISK FACTORS-Failure to Develop Properties" below. As a result, no assurance can be given that the Developer or its successors, will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See "RISK FACTORS-Bankruptcy and Foreclosure" below, for a discussion of certain limitations on the District's ability to pursue judicial proceedings with respect to delinquent parcels.

Limited Obligations

The Bonds and interest thereon are not payable from the general funds of the Services District. Except with respect to the Special Taxes, neither the credit nor the taxing power of the District or the Services District is pledged for the payment of the Bonds or the interest thereon, and, except as provided in the Fiscal Agent Agreement, no Owner of the Bonds may compel the exercise of any taxing power by the District or the Services District or force the forfeiture of any Services District or District property. The principal of, premium, if any, and interest on the Bonds are not a debt of the Services District or a legal or equitable pledge, charge, lien or encumbrance upon any of the Services District's or the District's property or upon any of the Services District's or the District's income, receipts or revenues, except the Special Taxes and other amounts pledged under the Fiscal Agent Agreement.

Special Tax Delinquencies

Under provisions of the Act, the Special Taxes, from which funds necessary for the payment of principal of, and interest on, the Bonds are derived, are customarily billed to the properties within the District

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on the ad valorem property tax bills sent to owners of such properties. The Act currently provides that such Special Tax installments are due and payable, and bear the same penalties and interest for non-payment, as do ad valorem property tax installments.

See "SOURCES OF PAYMENT FOR THE BONDS-Special Taxes-Proceeds of Foreclosure Sales," for a discussion of the provisions which apply, and procedures which the District is obligated to follow under the Fiscal Agent Agreement, in the event of delinquencies in the payment of Special Taxes. See "RISK FACTORS-Bankruptcy and Foreclosure" below, for a discussion of the policy of the Federal Deposit Insurance Corporation (the "FDIC") regarding the payment of special taxes and assessment and limitations on the District's ability to foreclosure on the lien of the Special Taxes in certain circumstances.

County Reports High First and Second Installment Fiscal Year 2006-07 Property Tax Delinquencies.

The County Treasurer-Tax Collector collects the special taxes for multiple community facilities districts of the Services District in the "Eastvale Area," a primarily residential area within the vicinity of the District. The County recently reported delinquencies in Fiscal Year 2006-07 special taxes and ad valorem taxes exceeded levels in Fiscal Year 2005-06 for all of these community facilities districts for which there was a levy in the previous Fiscal Year. As of September 12, 2007, the County Auditor reported total first installment Fiscal Year 2006-07 delinquencies for the sixteen community facilities districts in the Eastvale Area ranged from 0% to 10.15%. The second installment delinquencies for 2006-07 were, in many cases, double that of the first installment, and ranged from 0% to 17.35%. For the first and second installments combined, delinquencies for Fiscal Year 2006-07 ranged from 0% to 13.75% as of September 12, 2007, compared to delinquencies for Fiscal Year 2005-06 that ranged from 1.91% to 10.36% as of September 18, 2006. See "Risks Related to Adjustable Rate Mortgages, Non Traditional Mortgages" below.

The District is not aware of the causes for the increased delinquencies in the Eastvale Area or other County community facilities districts for Fiscal Year 2006-07, however, to the extent increases in delinquencies for the 2006-07 Fiscal Year are indicative of a trend toward more significant special tax delinquencies in the future, and to the extent increased delinquencies in other Eastvale Area community facilities districts are the result of factors which are present in the District, delinquencies in the District may occur. The County Treasurer-Tax Collector's office reported that certain property tax bills were not timely sent to some homeowners. The County has extended the time for these homeowners to pay their property taxes, including special taxes. As a result, some of the delinquencies mentioned above may be the result of such an extension. The Services District cannot estimate the amount of delinquent special taxes that are related to extensions of the time for payment of property tax bills.

The District has the authority and the obligation, subject to the Maximum Tax Rates set forth in the Rates and Method, to increase the levy of Special Taxes against non-delinquent property owners in the District in the event other owners in the District are delinquent. Pursuant to the Act, under no circumstances may the Special Tax levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by owner of any other parcel or parcels within the District by more than IO percent. Thus, the Services District may not be able to increase Special Tax levies in future Fiscal Years by enough to make up for delinquencies for prior Fiscal Years. This would result in draws on the Reserve Fund, and if delinquencies continue and in the aggregate exceed the Reserve Fund balance, defaults would occur in the payment of principal and interest on the Bonds.

Although the Services District has covenanted in the Fiscal Agent Agreement to commence and diligently pursue foreclosure under the circumstances described under the caption "SOURCES OF PAYMENT FOR THE BONDS-Special Taxes-Proceeds of Foreclosure Sales," foreclosure delays may occur under the circumstances described under the caption "RISK FACTORS-Bankruptcy and Foreclosure." Delinquencies may result as a consequence of many factors whether related to current circumstances in other community

33

facilities districts or not. See "RISK FACTORS," generally, for discussions of certain potential causes of delinquencies.

Additionally, the Services District reports that water shut-offs due to the non-payment of water bills in the Eastvale area for the first six months of2007 were approximately .74% higher than the first six months of 2006. Water shut-offs were approximately 2% higher in 2006 than in prior years.

Risks Related to Adjustable Rate Mortgages, Nontraditional Mortgages

During calendar years 2003 through 2006, many persons financed the purchase of new homes using mortgage loans that featured adjustable interest rates and 'creative' loan structures, such as interest only payments, negative amortization of principal, and introductory 'teaser' rates. Interest only payments on loans allow the borrower to pay interest only for an initial period (e.g., five years) and negative amortization of principal results in lower monthly mortgage payments, but a higher aggregate principal amount of the mortgage loan. Teaser rates are mortgage interest rates that start low and are subject to being reset at higher rates on a specified date or upon the occurrence of specified conditions.

In the opinion of some economists, the significant increase in home prices during calendar years 2003 through 2006 was driven, in part, by the ability of home purchasers to access adjustable rate loans and creative loans, as well as loans up to the full value of the home, in some cases with minimal documentation of purchaser income qualification. These economists predict that increased interest rates on more conventional mortgage loans, and resets on adjustable rate loans to higher interest rates (and payments increased), fewer borrowers will be able to qualify for mortgage loans and, as a result, home sale prices will decrease. Additionally, under such circumstances, homeowners in the District with adjustable loans and limited economic resources may be unable or unwilling to pay higher mortgage payments as well as Special Tax and ad valorem tax payments when due. Interest rates on adjustable mortgage rate loans have, in some instances, previously reset to higher interest rates and some financial studies predict that, nationwide, mortgage loans with teaser rates will experience significant resets from May 2007 through October 2008, resulting in higher levels of mortgage payments.

Some borrowers who purchased homes with adjustable rate loans may refinance before the interest reset date to obtain loans with fixed interest rates. However, other borrowers who purchased homes in recent years may not be able to access replacement financing for their adjustable rate mortgage loans for a number of reasons. Recent news accounts indicate that many borrowers in recent years have financed 100% of the price of their home with adjustable rate loans. In the event there is a decline in home value such borrowers may not be able to obtain replacement financing because outstanding loan balances exceed the value of their homes. Additionally, according to recent articles in the financial press, there is a tightening of underwriting criteria for mortgage loans, such that lenders may no longer offer 100% financing or other creative mortgage structures. Regulatory changes or changes in standards of practice in the mortgage lending industry could also create requirements of stricter income verification, higher income to loan ratios, higher credit ratings, or some combination of such credit factors. In the event borrowers experience a decline in income or an increase in mortgage interest rates, or both, taxpayers may be less able to pay their special tax payments when due.

The Services District has obtained information available from public sources about the mortgage loan characteristics for some of the current individual homeowners within the District. (See "THE DEVELOPMENT AND PROPERTY OWNERSHIP-The Developer.") With respect to the Developer's project, mortgage information was available on 64 of the 151 homeowners that have closed escrows. Of the 64 homeowners for which mortgage data was available, 22 had second mortgages. The information shows that the owners of 17% of these homes financed I 00% of the purchase price of their homes, 17% financed 90% to 99% of the purchase price, 28% financed 80 to 89% of the purchase price, 8% financed 70 to 79% of the purchase price and 30% financed less than 70% of the purchase price. Of the 64 homeowners, 53% had adjustable rate loans and 47% had fixed rate loans. The Services District's information also shows that homeowners who financed 100% of the purchase price of their homes all had adj us table loans (meaning

34

adjustable, interest only or other creative mortgage structures) while homeowners who financed less than 70% of the purchase price had primarily fixed rate loans.

As of September 15, 2007, the Developer reports that it continues to offer loan packages that it believes are comparable to current mortgage industry loans including 30 year fixed, 10 year adjustable rate mortgages, 7 year adjustable rate mortgages and 5 year adjustable rate mortgages. Loan packages still include first and second lien loans, but the Developer is no longer offering I 00% financing packages through their mortgage program.

Homeowners in the District who purchased their homes with adjustable rate loans may experience difficulty in making their loan payments and paying the Special Taxes levied on their property. This would result in an increase in the Special Tax delinquency rate in the District and possible depletion of the Reserve Fund. If there were significant delinquencies in Special Tax collections in the District and the Reserve Fund was depleted, there could be a default in the payment of principal of and interest on the Bonds. See "Special Tax Delinquencies" above for a discussion of historically high Fiscal Year 2006-07 property tax delinquencies in the vicinity of the District.

In the event the owners of property within a community facilities district experience a decline in mcome or an increase in mortgage interest rates, or both, they may be less able to pay their special tax payments when due. According to Albert A. Webb and Associates, delinquencies in first and second installment 2006-07 special tax payments of community facilities districts of the Services District have escalated significantly over historical averages. Fourteen of the seventeen community facilities districts that levied special taxes in the 2006-07 tax year have delinquencies in excess of 5%, and three of those community facilities districts experienced delinquencies of over 10%, and none of those commllllity facilities districts experienced delinquencies over 15%. See "Special Tax Delinquencies," above.

Some economists also report recent increases in recorded notices of default on home mortgage loans in the County and in Southern California. The filing of a notice of default reflects the failure of a homeowner to pay mortgage loan payments in a timely manner for a certain period of time, usually three consecutive months. The County recently set a record for the number of notices of default filed. If home prices decline in the future, the number of notices of default may increase due to decreased home equity. The Services District's economist indicates that, historically, 95% of the notices of default filed on mortgage loans are filed within the first three years after the origination of such loans. Given that the mortgage loans in the District reviewed by the Services District's consultant were originated in the last quarter of2006 through 2007, based on historical patterns notices of default in the District may not begin to occur until mid-2007 and may not peak, cumulatively, until 2009.

Certain financial authorities report that home prices may be declining in the County. Any decline in home values in the District could result in further property owner unwillingness or inability to pay mortgage payments, as well as ad valorem taxes and special taxes, when due. Under such circumstances, bankruptcies are likely to increase. Bankruptcy by homeowners with delinquent Special Taxes would delay the commencement and completion of foreclosure proceedings to collect delinquent Special Taxes. See "Special Tax Delinquencies," "Payment of the Special Tax is not a Personal Obligation of the Owners" and "Bankruptcy and Foreclosure."

Risks Related to Current Market Conditions

Until recently, the housing market in Southern California experienced significant price appreciation resulting from increases in demand for housing. However, more recently, the housing market in Southern California and the County, like that in the country generally, appears to be weakening. In the past several months, a number of public home builders with significant operations in the Southern California housing market have reported weakening new home market conditions nationally in their respective filings with the Securities and Exchange Commission. In general, factors contributing to the weakening new home market

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reported by those homebuilders include: (i) generally lower demand for new homes, (ii) significant increases in cancellation rates, (iii) speculators exiting the new home market, (iv) increases in the supply of new and existing homes available to be purchased, (v) increases in competition for new home orders, (vi) prospective home buyers having a more difficult time selling their existing homes in the more competitive environment, (vii) higher incentives required to stimulate new home orders and maintain homes under contract and (viii) reduced availability of mortgage loans. Softer housing market conditions may affect (i) the ability of home builders to sell homes on the undeveloped property, and (ii) the value of the property.

During the past several years, many people financed the purchase of new homes using loans which were originated with less stringent underwriting criteria and which provided more liberal terms than were generally applied to mortgage loans in the past. Some of these loans were made with little or no income documentation, provided financing for up to the full purchase price of the property, did not require the amortization of principal during an initial period and bore interest at relatively low rates which were subject to being reset to different, and possibly higher, rates on specified dates. In the opinion of some economists, the significant increases in home prices during this period were driven, in part, by the availability of such mortgage loans. These economists predict that as underwriting criteria are tightened and the initial interest rates are reset at higher rates, there will be an increase in mortgage defaults and a decrease in home prices; and, in various portions of the country, this is already taking place. Such events could cause property owners to be less willing or able to pay their Special Taxes and to consider the possibility of filing for bankruptcy protection. See "Bankruptcy and Foreclosure." Moreover, as a result of rising short-term interest rates, potential home purchasers may be unable to obtain adjustable rate loans and creative financing, which may in turn affect the demand for new housing located on the Property.

In addition to the above factors, the financial press has recently reported that perceived risks of increased mortgage delinquencies and defaults has resulted in a softening in the secondary market for mortgages and, thus, a reduction in available funds to make future mortgage loans. Certain articles predict that mortgage loans will be less available to all borrowers, including borrowers with good credit and borrowers seeking more traditional mortgage loans, which may result in increased borrowing costs and higher credit requirements. In particular, articles predict reduced liquidity in the jumbo loan market (i.e., loans exceeding $417,000). The Developers intend to offer most or all of the properties in the district at prices exceeding $417,000. However, as of September I, 2007, 160 of the 183 homes within the District had closed escrow to individual homeowners.

If such market were to deteriorate such that the supply of mortgage loans diminishes, it could adversely affect absorption of the remaining 23 homes. If absorption is significantly slower than anticipated, values in the District may be less than shown in the Appraisal.

Insufficiency of Special Taxes

Under the Rates and Method, the aunual amount of Special Tax to be levied on each taxable parcel in the District will generally be based on whether such parcel is categorized as Undeveloped Property or as Developed Property and on the land use class to which a parcel of Developed Property is assigned. See APPENDIXA-"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES" and "SOURCES OF PAYMENT FOR THE BONDS-Special Taxes-Rate and Method of Apportionment of Special Taxes."

The maximum Special Taxes that may be levied within the District are at least 110% of Maximum Annual Debt Service on the Bonds. Notwithstanding that the maximum Special Taxes that may be levied in the District exceeds debt service due on the Bonds, the Special Taxes collected could be inadequate to make timely payment of debt service either because of nonpayment or because property becomes exempt from taxation.

The Rates and Method governing the levy of the Special Tax expressly exempts up to 20.21 Net Acres of property owned by public agencies and other exempt entities in the District. See Section E of

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APPENDIX A-"RATES AND METHOD OF APPORTIONMENT OF SPECIAL TAXES." If for any reason property within the District becomes exempt from taxation by reason of ownership by a non-taxable entity such as the federal government, another public agency or a religious organization, subject to the limitations of the maximum authorized rates, the Special Tax will be reallocated to the remaining taxable properties within the District. This would result in the owners of such property paying a greater amouut of the Special Tax and could have an adverse impact upon the ability and willingness of the owners of such property to pay the Special Tax when due as permitted in the Rates and Method.

The Rates and Method governing the levy of the Special Tax provides that, once a parcel is classified as taxable property, it will remain subject to a Special Tax levy even if subsequently it is acquired by a public agency. The Act provides that, if any property within the District not otherwise exempt from the Special Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax will continue to be levied on and enforceable against the public entity that acquired the property. In addition, the Act provides that, if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment and be paid from the eminent domain award. The constitutionality and operation of these provisions of the Act have not been tested in the courts. Due to problems of collecting taxes from public agencies, if a substantial portion of land within the District was to become owned by public agencies, collection of the Special Tax might become more difficult and could result in collections of the Special Tax which might not be sufficient to pay principal of and interest on the Bonds when due and a default could occur with respect to the payment of such principal and interest.

Failure to Develop Properties

As of August 15, 2007, 161, or approximately 87%, of the 183 projected homes in the District were complete. Building permits have been issued for all parcels in the District. See "THE DEVELOPMENT AND PROPERTY OWNERSHIP-Infrastructure Requirements and Construction Status." Undeveloped or partially developed land is inherently less valuable than developed land and provides less security to the Bondowners should it be necessary for the District to foreclose on the property due to the nonpayment of Special Taxes. Substantial delays in the completion of the development or any remaining required infrastructure for the development due to litigation or other causes may reduce the value of the property within the District and increase the length of time during which Special Taxes will be payable from uudeveloped property, and may affect the willingness and ability of the owners of property within the District to pay the Special Taxes when due.

Development of property within the District may be subject to unexpected delays, disruptions and changes which may affect the willingness and ability of the Developer or any property owner to pay the Special Taxes when due.

Land development is subject to comprehensive federal, State and local regulations. Approval is required from various agencies in connection with the layout and design of developments, the nature and extent of improvements, construction activity, land use, zoning, school and health requirements. Finally, development of land is subject to economic considerations.

No assurance can be given that the required fuuding will be secured or that the proposed development will be partially or fully completed, and it is possible that cost overruns will be incurred which will require additional fuuding beyond what the Developer has projected, which may or may not be available. See "THE DEVELOPMENT AND PROPERTY OWNERSHIP-Financing Plan."

The future development of the land within the District may be adversely affected by existing or future governmental policies, or both, restricting or controlling the development of land in the District. See "THE DEVELOPMENT AND PROPERTY OWNERSHIP-Environmental Constraints" and "RISK FACTORS­Future Land Use Regulations and Growth Control Initiatives" for a discussion of certain limitations on the

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ability of the Developer to complete the projected development of the remaining homes under construction within the District.

There can be no assurance that land development operations within the District will not be adversely affected by a future deterioration of the real estate market and economic conditions or future local, State and federal governmental policies relating to real estate development, the income tax treatment of real property ownership, or the national economy. A slowdown of the development process of the remaining 22 homes under construction and the absorption rate could adversely affect land values and reduce the ability or desire of the property owners to pay the annual Special Taxes. In that event, there could be a default in the payment of principal of, and interest on, the Bonds when due.

Bondowners should assume that any event that significantly impacts the ability to develop land in the District would cause the property values within the District to decrease substantially from those estimated by the Appraiser and could affect the willingness and ability of the owners of land within the District to pay the Special Taxes when due.

The payment of principal of and interest on the Bonds depends upon the receipt of Special Taxes levied on undeveloped property. Furthermore, an inability to develop the remaining 22 homes under construction within the District as currently proposed will make the Bondowners dependent upon timely payment of the Special Taxes levied on undeveloped property for a longer period of time than projected. The timely payment of the Bonds depends upon the willingness and ability of the Developer to pay the Special Taxes levied on the undeveloped property when due. See "RISK FACTORS-Concentration of Ownership" above. A slowdown or stoppage in the continued development of the remaining 22 homes under construction in the District could reduce the willingness and ability of the Developer to make Special Tax payments on undeveloped property and could greatly reduce the value of such property in the event it has to be foreclosed upon. See "RISK FACTORS-Land Values" below.

Future Land Use Regulations and Growth Control Initiatives

It is possible that future growth control initiatives could be enacted by the voters or future local, state or federal land use regulations could be adopted by governmental agencies and be made applicable to the development of the vacant land within the District with the effect of negatively impacting the ability of the owners of such land to complete the development of the 22 homes under construction. See "RISK FACTORS-Endangered Species" below. This possibility presents a risk to prospective purchasers of the Bonds in that an inability to complete desired development increases the risk that the Bonds will not be repaid when due. A reduction in land values increases the likelihood that in the event of a delinquency in payment of Special Taxes a foreclosure action will result in inadequate funds to repay the Bonds when due.

Endangered Species

During the 1990's there was an increase in activity at the State and federal level related to the possible listing of certain plant and animal species found in the Southern California area as endangered species. An increase in the number of endangered species is expected to curtail development in a number of areas. At present, the unimproved property within the District is not known to be inhabited by any plant or animal species which either the California Fish and Game Commission or the United States Fish and Wildlife Service has listed or has proposed for listing on the endangered species list. Notwithstanding this fact, new species are proposed to be added to the State and federal protected lists on a regular basis. Any action by the State or federal governments to protect species located on or adjacent to the property within the District could negatively impact the ability of an owner of the undeveloped land within the District, to complete the remaining development planned within the District. This, in tum, could reduce the likelihood of timely payment of the Special Taxes and would likely reduce the value of the undeveloped land estimated by the Appraiser and the potential revenues available at a foreclosure sale for delinquent Special Taxes. See "RISK FACTORS-Failure to Develop Properties" and "-Property Values."

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The General Biological Resources Assessment of Tentative Tract No. 31803 dated July 21, 2004 prepared by Amee Earth & Environmental, Inc. concluded that a single Loggerhead Strike and a single Tricolored Blackbird were observed during the surveys, both of which are "Species of Special Concern" and are covered species under the Western Riverside County MSHCP, but are not state or federally listed as endangered. A focal species of the surveys, the Burrowing Owl, was not observed during the two surveys. The report indicated that the Tentative Tract 31803 site is not located in a Criteria Area or specific Conservation Area under the Western Riverside County MSHCP, but is subject to the development impact fee imposed by Riverside County.

The Developer represents that it is not aware of any endangered species located on its property within the District that have not been properly mitigated.

Natural Disasters

The District, like all California communities, may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. Southern California is a seismically active area. Seismic activity represents a potential risk for damage to buildings, roads, bridges and property within the District. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event.

In the event of a severe earthquake, fire, flood or other natural disaster, there may be significant damage to both property and infrastructure in the District. As a result, a substantial portion of the property owners may be unable or unwilling to pay the Special Taxes when due. In addition, the value of land in the District could be diminished in the aftermath of such a natural disaster, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Special Taxes.

Compaction Report Regarding Building Pad Areas and Site Fills for Lots I through 183 of Tract No. 31803 dated December 27, 2005 prepared by LOR Geotechnical Group, Inc. concluded that geotechnical testing during the grading operation of Tract No. 31803 was performed in general conformance with the recommendations contained in the project preliminary geotechnical investigation reports and applicable portions of the Uniform Building Code and that the building pad areas should provide adequate support for the proposed structures constructed in accordance with the recommendations contained in that report.

Per FEMA Map 060245 0680A dated April 15, 1980, the property is not located within a 100-year flood plain.

Methane Gas

GeoKinetics prepared a Post-Grading Subsurface Methane Gas Investigation for Tract No. 31803, Lots 1-183 dated January 18, 2006 in which methane was detected in 52 of the 183 lots. 14 lots had a methane concentration of greater than 12,500 ppm and 4 lots had a methane concentration of greater than 55,000 ppm. The report recommended Level A mitigation measures (installation of 60-mil liquid boot sub-slab gas barriers, sub-slab vents, utility conduit seals and utility trench dams) for the 4 lots with concentrations in excess of 55,000 ppm, Level B mitigation measures (installation of 12 mil. high density polyethylene (HDPE) enhanced sub-slab vapor barrier, utility conduit seals, and utility trench dams) for the twenty lots that were either immediately adjacent to Level A lots and/or had methane levels between 12,500 ppm and 55,000 ppm and Level C mitigation measures (installation of utility conduit seals and utility trench dams) for the remaining 159 lots.

All recommended mitigation measures have been completed on the lots within the District in accordance with the GeoKinetics report. Completion of such mitigation measures should not slow or thwart development of the District.

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Hazardous Substances

The presence of hazardous substances on a parcel may result in a reduction in the value of a parcel. In general, the owners and operators of a parcel may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as "CERCLA" or the "Superfund Act," is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner or operator is obligated to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the taxed parcels be affected by a hazardous substance, is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.

The Riverside County Environmental Assessment Form: Initial Study concerning the proposal to subdivide 54 acres into 183 residential lots and one park site and change current land use classification to R-1 found that although the proposed project could have a siguificant effect on environment, there would not be a significant effect because revisions in the project described in the document were made or agreed to by the project proponent and concluded that a mitigated negative declaration will be prepared.

Further, it is possible that liabilities may arise in the future with respect to any of the parcels resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently on the parcel of a substance not presently classified as hazardous but which may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of a parcel that is realizable upon a delinquency and the willingness or ability of the owner of any parcel to pay the Special Tax Installments.

The value of the taxable property within the District, as set forth in the various tables herein, does not reflect the presence of any hazardous substance or the possible liability of the owner ( or operator) for the remedy of a hazardous substance condition of the property. The District has not independently verified, but is not aware, that any owner (or operator) of any of the parcels within the District has such a current liability with respect to any such parcel. However, it is possible that such liabilities do currently exist and that the District is not aware of them. The Developer represents that it is not aware of any hazardous substances on its property within the District that have not been properly mitigated.

Parity Taxes Special Assessments and Land Development Costs

Property within the District is subject to taxes and assessments imposed by public agencies also having jurisdiction over the land within the District. See "THE DISTRICT-Estimated Direct and Overlapping lndebteduess."

The Special Taxes and any penalties thereon will constitute a lien against the lots and parcels of land on which they will be annually imposed until they are paid. Such lien is on a parity with all special taxes and special assessments levied by the Services District and other agencies and is co-equal to and independent of the lien for general property taxes regardless of when they are imposed upon the same property. The Special Taxes have priority over all existing and future private liens imposed on the property except, possibly, for liens or security interests held by the Federal Deposit Insurance Corporation. See "RISK FACTORS-Bankruptcy and Foreclosure" below.

Development of land within the District is contingent upon construction or acquisition of major public improvements such as arterial streets, water distribution facilities, sewage collection and transmission

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facilities, drainage and flood protection facilities, gas, telephone and electrical facilities, schools, parks and street lighting, as well as local in-tract improvements and on-site grading and related improvements. Certain of these improvements have been acquired and/or completed; however, there can be no assurance that the remaining improvements will be constructed or will be constructed in time for development to proceed as currently expected. The cost of these additional improvements plus the public and private in-tract, on-site and off-site improvements could increase the public and private debt for which the land within the District is security. This increased debt could reduce the ability or desire of the property owners to pay the annual Special Taxes levied against the property. In that event there could be a default in the payment of principal of, and interest on, the Bonds when due.

Neither the Services District nor the District has control over the ability of other entities and districts to issue indebtedness secured by special taxes, ad valorem taxes or assessments payable from all or a portion of the property within the District. In addition, the landowners within the District may, without the consent or knowledge of the Services District, petition other public agencies to issue public indebtedness secured by special taxes, ad valorem taxes or assessments. Any such special taxes, ad valorem taxes or assessments may have a lien on such property on a parity with the Special Taxes and could reduce the estimated value-to-lien ratios for property within the District described herein. See "SOURCES OF PAYMENT FOR BONDS" and "THE DISTRICT-Estimated Direct and Overlapping Indebtedness."

Disclosures to Future Purchasers

The willingness or ability of an owner of a parcel to pay the Special Tax even if the value of the parcel 1s sufficient may be affected by whether or not the owner was given due notice of the Special Tax authorization at the time the owner purchased the parcel, was informed of the amount of the Special Tax on the parcel should the Special Tax be levied at the maximum tax rate and the risk of such a levy, and, at the time of such a levy, has the ability to pay it as well as pay other expenses and obligations. The Services District has caused a notice of the Special Tax lien to be recorded in the Office of the Recorder for the County against each parcel. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Special Tax obligation in the purchase of a property within the District or lending of money thereon.

The Act requires the subdivider (or its agent or representative) of a subdivision to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section 1102.6b requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with the above requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax when due.

Non-Cash Payments of Special Taxes

Under the Act, the Board of Directors as the legislative body of the District may reserve to itself the right and authority to allow the owner of any taxable parcel to tender a Bond in full or partial payment of any installment of the Special Taxes or the interest or penalties thereon. A Bond so tendered is to be accepted at par and credit is to be given for any interest accrued thereon to the date of the tender. Thus, if Bonds can be purchased in the secondary market at a discount, it may be to the advantage of an owner of a taxable parcel to pay the Special Taxes applicable thereto by tendering a Bond. Such a practice would decrease the cash flow available to the District to make payments with respect to other Bonds then outstanding; and, unless the practice was limited by the District, the Special Taxes paid in cash could be insufficient to pay the debt service due with respect to such other Bonds. ln order to provide some protection against the potential adverse impact on cash flows which might be caused by the tender of Bonds in payment of Special Taxes, the Fiscal Agent

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Agreement includes a covenant pursuant to which the District will not authorize owners of taxable parcels to satisfy Special Tax obligations by the tender of Bonds unless the District shall have first obtained a report of an Independent Financial Consultant certifying that doing so would not result in the District having insufficient Special Tax revenues to pay the principal of and interest on all Outstanding Bonds when due.

Payment of the Special Tax is not a Personal Obligation of the Owners

An owner of a taxable parcel is not personally obligated to pay the Special Tax. Rather, the Special Tax is an obligation which is secured only by a lien against the taxable parcel. If the value of a taxable parcel is not sufficient, taking into account other liens imposed by public agencies, to secure fully the Special Tax, the District has no recourse against the owner.

Land Values

The value of the property within the District is a critical factor in determining the investruent quality of the Bonds. If a property owner is delinquent in the payment of Special Taxes, the District's only remedy is to commence foreclosure proceedings against the delinquent parcel in an attempt to obtain funds to pay the Special Taxes. Reductions in property values due to a downturn in the economy, physical events such as earthquakes, fires or floods, stricter land use regulations, delays in development or other events will adversely impact the security underlying the Special Taxes. See "THE DISTRICT-Estimated Appraised Value-to-Lien Ratio."

The assessed values set forth in this Official Statement do not represent market values arrived at through an appraisal process and generally reflect only the sales price of a parcel when acquired by its current owner, adjusted annually by an amount determined by the Riverside County Assessor, generally not to exceed an increase of more than 2% per fiscal year. No assurance can be given that a parcel could actually be sold for its assessed value.

The Appraiser has estimated, on the basis of certain definitions, assumptions and limiting conditions contained in the Appraisal, that as of August 15, 2007, the market value of the land within the District was $91,198,050. The Appraisal does not assume any possible negative impact which could occur by reason of any potential limitations on development occurring due to time delays, an inability of the Developer or subsequent landowners to obtain any needed development approval or permit, the presence of hazardous substances or other adverse soil conditions within the District, the listing of endangered species or the determination that habitat for endangered or threatened species exists within the District, or other similar situations. See "THE DEVELOPMENT AND PROPERTY OWNERSHIP-Appraisal."

The Appraisal indicates the Appraiser's opinion as to the market value of the builder owned property and the minimum market value of the individually owned property referred to therein as of the date and under the conditions specified therein. The Appraiser's opinion reflects conditions prevailing in the applicable market as of the date of value. As set forth in the Appraisal, those market conditions include a rapid escalation in the prices paid for developable land in the County. The Appraiser's opinion does not predict the future value of the subject property, and there can be no assurance that market conditions will not change adversely in the future.

Prospective purchasers of the Bonds should not assume that the land within the District could be sold for the appraised amount at a foreclosure sale for delinquent Special Taxes. In arriving at the estimate of market value, the Appraiser assumes that any sale will be unaffected by undue stimulus and will occur following a reasonable marketing period, which is not always present in a foreclosure sale. See Appendix B for a description of other assumptions made by the Appraiser and for the definitions and limiting conditions used by the Appraiser. Any event which causes one of the Appraiser's assumptions to be untrue could result in a reduction of the value of the land within the District from that estimated by the Appraiser.

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No assurance can be given that any bid will be received for a parcel with delinquent Special Taxes offered for sale at foreclosure or, if a bid is received, that such bid will be sufficient to pay all delinquent Special Taxes. See "SOURCES OF PAYMENT FOR THE BONDS-Special Taxes-Proceeds of Foreclosure Sales."

FDIC/Federal Government Interests in Properties

The ability of the District to foreclose the lien of delinquent unpaid Special Tax installments may be limited with regard to properties in which the Federal Deposit Insurance Corporation (the "FDIC") has an interest. In the event that any financial institution making any loan which is secured by real property within the District is taken over by the FDIC, and prior thereto or thereafter the loan or loans go into default, then the ability of the District to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited.

The FDIC's policy statement regarding the payment of state and local real property taxes (the "Policy Statement") provides that property owned by the FDIC is subject to state and local real property taxes only if those taxes are assessed according to the property's value, and that the FDIC is immune from real property taxes assessed on any basis other than property value. According to the Policy Statement, the FDIC will pay its property tax obligations when they become due and payable and will pay claims for delinquent property taxes as promptly as is consistent with sound business practice and the orderly administration of the institution's affairs, unless abandonment of the FDIC's interest in the property is appropriate. The FDIC will pay claims for interest on delinquent property taxes owed at the rate provided under state law, to the extent the interest payment obligation is secured by a valid lien. The FDIC will not pay any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts. If any property taxes (including interest) on FDIC-owned property are secured by a valid lien (in effect before the property became owned by the FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC's consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC's consent.

The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes, including special assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Special taxes imposed under the Mello-Roos Act and a special tax formula which determines the special tax due each year are specifically identified in the Policy Statement as being imposed each year and therefore covered by the FDIC's federal immunity. The Ninth Circuit has issued a ruling on August 28, 2001 in which it determined that the FDIC, as a federal agency, is exempt from Mello-Roos special taxes. According to information available from the Riverside County assessment roll, the FDIC does not currently own any of the property in the District.

The District is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency in the payment of Special Taxes on a parcel within the District in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. Such an outcome could cause a draw on the Reserve Fund and perhaps, ultimately, a default in payment on the Bonds.

Bankruptcy and Foreclosure

Bankruptcy, insolvency and other laws generally affecting creditors' rights could adversely impact the interests of owners of the Bonds in at least two ways. First, the payment of property owners' taxes and the ability of the District to foreclose the lien of a delinquent unpaid Special Tax pursuant to its covenant to pursue judicial foreclosure proceedings may be limited by bankruptcy, insolvency or other laws generally affecting

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creditors' rights or by the laws of the State relating to judicial foreclosure. See "SOURCES OF PAYMENT FOR THE BONDS-Special Taxes-Proceeds of Foreclosure Sales." In addition, the prosecution of a foreclosure could be delayed due to many reasons, including crowded local court calendars or lengthy procedural delays.

Second, the Bankruptcy Code might prevent moneys on deposit in the Project Account of the Improvement Fund from being applied to pay interest on the Bonds and/or to redeem Bonds if bankruptcy proceedings were brought by or against the Developer and if the court found that such Developer had an interest in such moneys within the meaning of Section 54l(a)(l) of the Bankruptcy Code.

Although a bankruptcy proceeding would not cause the Special Taxes to become extinguished, the amount of any Special Tax lien could be modified if the value of the property falls below the value of the lien. If the value of the property is less than the lien, such excess amount could be treated as an unsecured claim by the bankruptcy court. In addition, bankruptcy of a property owner could result in a delay in prosecuting Superior Court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of delinquent Special Tax installments and the possibility of delinquent Special Tax installments not being paid in full.

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

Moreover, the ability of the Services District to commence and prosecute enforcement proceedings may be limited by bankruptcy, insolvency and other laws generally affecting creditors' rights (such as the Soldiers' and Sailors' Relief Act of 1940) and by the laws of the State relating to judicial foreclosure.

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 Bonds or the Fiscal Agent Agreement or in the event interest on the Bonds becomes included in gross income for federal income tax purposes. Pursuant to the Fiscal Agent Agreement and further subject to the prior lien of owners of Bonds, an owner is given the right for the equal benefit and protection of all owners of a series similarly situated to pursue certain remedies described in APPENDIX D-"SUMMARY OF FISCAL AGENT AGREEMENT" and "-Limitation of Remedies."

Loss of Tax Exemption

As discussed under the caption "LEGAL MATTERS-Tax Exemption," the interest on the Bonds could become includable in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds as a result of a failure of the Services District to comply with certain provisions of the Internal Revenue Code of 1986, as amended. Should such an event of tax.ability occur, the Bonds are not subject to early redemption and will remain outstanding to maturity or until redeemed under the redemption provisions of the Fiscal Agent Agreement.

Limitations on Remedies

Remedies available to the owners of the Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Bonds or to preserve the tax-exempt status of the Bonds.

Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the Fiscal Agent Agreement to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization,

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fraudulent conveyance or transfer, moratorium, or other similar laws affecting generally the enforcement of creditors' rights, by equitable principles and by the exercise of judicial discretion. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the owners of the Bonds.

Limited Secondary Market

There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Although the Services District on behalf of the District has committed to provide certain financial and operating information on an annual basis, there can be no assurance that such information will be available to Bondowners on a timely basis. See "CONTINUING DISCLOSURE." The failure to provide the required annual financial information does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions, lack of current information, or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.

Proposition 218

An initiative measure commonly referred to as the "Right to Vote on Taxes Act" (the "Initiative") was approved by the voters of the State at the November 5, 1996 general election. The Initiative added Article XlllC and Article XlllD to the California Constitution. According to the "Title and Summary" of the Initiative prepared by the California Attorney General, the Initiative limits "the authority of local governments to impose taxes and property-related assessments, fees and charges." The provisions of the Initiative have not yet been interpreted by the courts, although several lawsuits have been filed requesting the courts to interpret various aspects of the Initiative. The Initiative could potentially impact the Special Taxes available to the District to pay the principal of and interest on the Bonds as described below.

Among other things, Section 3 of Article Xlll states that " ... the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge." The Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the rate and method of apportionment of an existing special tax. However, the Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislative body determines that the reduction or termination of the special tax would not interfere with the timely retirement of that debt. On July I, 1997, a bill was signed into law by the Governor of the State enacting Government Code Section 5854, which states that:

"Section 3 of Article XlllC of the California Constitution, as adopted at the November 5, 1996, general election, shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after that date, assumes the risk of, or in any way consents to, any action by initiative measure that constitutes an impairment of contractual rights protected by Section IO of Article I of the United States Constitution."

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

It may be possible, however, for voters or the Board of Directors acting as the legislative body of the District to reduce the Special Taxes in a manner which does not interfere with the timely repayment of the Bonds, but which does reduce the maximum amount of Special Taxes that may be levied in any year below the existing levels. Furthermore, no assurance can be given with respect to the future levy of the Special Taxes in

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amounts greater than the amount necessary for the timely retirement of the Bonds. Therefore, no assurance can be given with respect to the levy of Special Taxes for Administrative Expenses. Nevertheless, to the maximum extent that the law permits it to do so, the District has covenanted that it will not initiate proceedings under the Act to reduce the maximum Special Tax rates on parcels within the District to an amount that is less than 110% of Maximum Annual Debt Service on the Outstanding Bonds and Parity Bonds in each future Bond Year. In connection with the foregoing covenant, the District has made a legislative finding and determination that any elimination or reduction of Special Taxes below the foregoing level would interfere with the timely retirement of the Bonds. The District also has covenanted that, in the event an initiative is adopted which purports to alter the Rates and Method, it will commence and pursue legal action in order to preserve its ability to comply with the foregoing covenant. However, no assurance can be given as to the enforceability of the foregoing covenants.

The interpretation and application of Article XlllC and Article XlllD will ultimately be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainty the outcome of such determination or the timeliness of any remedy afforded by the courts. See "RISK FACTORS-Limitations on Remedies."

Ballot Initiatives

Article Xlll A, Xlll B, Xlll C and Xlll D were adopted pursuant to measures qualified for the ballot pursuant to California's constitutional initiative process and the State Legislature has in the past enacted legislation which has altered the spending limitations or established minimum funding provisions for particular activities. On March 6, 1995 in the case of Rossi v. Brown, the State Supreme Court held that an initiative can repeal a tax ordinance and prohibit the imposition of further such taxes and that the exemption from the referendum requirements does not apply to initiatives. From time to time, other initiative measures could be adopted by California voters. The adoption of any such initiative might place limitations on the ability of the State, the Services District, or local districts to increase revenues or to increase appropriations or on the ability of the landowners within the District to complete the remaining proposed development. See "Failure to Develop Properties."

CONTINUING DISCLOSURE

Pursuant to a Continuing Disclosure Agreement (the "Disclosure Agreement") with Digital Assurance Certification, L.L.C., as disclosure dissemination agent, the Services District has agreed to provide, or cause to be provided, to each nationally recognized municipal securities information repository and any public or private repository or entity designated by the State as a state repository for purposes of Rule 15c2-12(b )(5) (the "Rule") adopted by the Securities and Exchange Commission (each, a "Repository") certain annual financial information and operating data concerning the District. The Annual Report to be filed by the Services District is to be filed not later than 330 days after the end of each fiscal year of the Services District, commencing with the fiscal year ending June 30, 2007, and is to include audited financial statements of the Services District. The requirement that the Services District file its audited financial statements as a part of the Annual Report has been included in the Disclosure Agreement solely to satisfy the provisions of the Rule. The inclusion of this information does not mean that the Bonds are secured by any resources or property of the Services District. See "SOURCES OF PAYMENT FOR THE BONDS" and "RISK FACTORS-Limited Obligations." The Services District has never failed to comply in all material respects with any previous undertakings with regard to the Rule to provide annual reports or notices of material events. The full text of the Disclosure Agreement is set forth in Appendix E.

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LEGAL MATTERS

Tax Exemption

In the opinion of Best Best & Krieger LLP, Riverside, California, Bond Counsel, under existing statutes, regulations, rulings and court decisions, the interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from personal income taxation imposed by the State of California.

Bond Counsel is further of the opinion that interest on the Bonds is not a specific preference item for purposes of the alternative minimum tax provisions of the Internal Revenue Code of 1986, as amended (the "Code"). However, with respect to the Bonds owned by corporations (as defined for federal income tax purposes), interest on the Bonds may be included in adjusted current earnings, a portion of which may increase the alternative minimum taxable income of such corporations. In addition, although interest on the Bonds is excluded from gross income for federal income tax purposes, the accrual or receipt of interest on the Bonds and the ownership of the Bonds may otherwise affect the federal income tax liability of certain persons or entities. Bond Counsel expresses no opinion regarding any such consequences.

The Code sets forth certain requirements which must be met subsequent to the issuance and delivery of the Bonds for interest paid with respect thereto to be and remain exempt from federal income taxation. Noncompliance with such requirements might cause the interest paid on the Bonds to be subject to federal income taxation retroactive to the date of issue and the Bonds. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Bonds and other amounts are to be invested and require that certain investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. Pursuant to the Fiscal Agent Agreement, the Services District has covenanted to comply with all such requirements.

The Internal Revenue Service (the "IRS") has initiated an expanded program for the auditing of tax­exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds ( or by an audit of similar bonds).

It is possible that subsequent to the issuance of the Bonds there might be federal, state, or local statutory changes (or judicial or regulatory interpretations of federal, state, or local law) that affect the federal, state, or local tax treatment of the Bonds or the market value of the Bonds. No assurance can be given that subsequent to the issuance of the Bonds such changes or interpretations will not occur. On May 21, 2007, the U.S. Supreme Court agreed to review a Kentucky state court decision, in the matter of Kentucky v. Davis, on the issue of whether the U.S. Constitution commerce clause precludes states from giving more favorable tax treatment to state and local government bonds issued within that state than the tax treatment given bonds issued outside that state. The outcome of this or any similar case cannot be predicted, but the ultimate result could be a change in the treatment for state tax purposes of interest on the Bonds. If the Kentucky v. Davis decision is affirmed by the United States Supreme Court, states such as California may be required to eliminate the disparity between the income tax treatment of out-of-state tax-exempt obligations and the income tax treatment of in-state tax-exempt obligations, such as the Bonds. The impact of such a United States Supreme Court decision may also affect the market price for, or the marketability of the Bonds. Prospective purchasers of the Bonds should consult their tax advisors regarding this matter.

In rendering such opinions, Bond Counsel is assuming that the Services District will comply with its covenants in the Fiscal Agent Agreement to comply with the requirements of the Code. Noncompliance with the Code might cause the interest on the Bonds to be subject to federal income taxation retroactive to the date of issuance and delivery of the Bonds.

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Legal Opinion

The legal opinion of Best Best & Krieger LLP, Riverside, California, approving the validity of the Bonds in substantially the form set forth as Appendix G, will be made available to purchasers at the time of original delivery. A copy of the legal opinion for the Bonds will be provided with each definitive bond. Certain legal matters will be passed upon for the Services District and the District by Best Best & Krieger, LLP, Riverside, California, as counsel to the Services District, and for the Underwriter by Stradling Y occa Carlson & Rauth, a Professional Corporation, Newport Beach, California, as counsel to the Underwriter.

Litigation

No litigation is pending or threatened concerning the validity of the Bonds, the pledge of Special Taxes to repay the Bonds, the powers or authority of the Services District with respect to the Bonds, or seeking to restrain or enjoin development of the land within the District and a certificate of the Services District to that effect will be furnished to the Underwriter at the time of the original delivery of the Bonds.

On June 29, 2007, the Services District received a report form the Riverside County Grand Jury unrelated to the Bonds or the District, which, among other findings and recommendations, including findings and recommendations regarding the Service District's sale of four acres of land to a private entity without first offering it to other public agencies as directed by State law. Pursuant to State law, the failure to give such notice does not invalidate the sale ofland. Also, pursuant to State law, the recommendations of the Grand Jury are not binding on the Service District. The Services District has ninety (90) days to respond to the Grand Jury report. The Services District believes that the Grand Jury's recommendations do not affect the validity of the Bonds or the obligation or ability of the Services District to levy and collect Special Taxes for the payment of principal of and interest on the Bonds. The Services District has not been advised that it is the subject of any other pending civil or criminal investigations. As of September I, 2007, the Services District had responded to the Grand Jury's report.

No Rating

The District has not made and does not contemplate making application to any rating agency for the assignment of a rating of the Bonds.

Underwriting

The Bonds are being purchased by UBS Securities LLC (the "Underwriter"). The Underwriter has agreed to purchase the Bonds at a price of $7,256,962.85 (being $7,395,000 aggregate principal amount thereof, less Underwriter's discount of $122,017.50 and original issue discount of $16,0 I 9.65). The purchase agreement relating to the Bonds provides that the Underwriter will purchase all of the Bonds if any are purchased. The obligation to make such purchase is subject to certain terms and conditions set forth in such purchase agreement, the approval of certain legal matters by counsel and certain other conditions.

The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the offering price stated on the cover page hereof. The offering price may be changed from time to time by the Underwriter.

Financial Interests

The fees being paid to the Financial Advisor, the Underwriter, Underwriter's Counsel and Bond Counsel are contingent upon the issuance and delivery of the Bonds. From time to time, Bond Counsel represents the Underwriter on matters unrelated to the Bonds.

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Pending Legislation

Several amendments to the Act have been approved by the Governor, including au amendment to interpret the 10% limitation on increases to residential taxes due to the delinquencies of other taxpayers (Assembly Bill No. 373). This bill requires the statement in the resolution of intention to form a commuuity facilities district required under the Act to specify that under no circumstances will the special tax levied in any fiscal year against specified parcels, be increased as a consequence of delinquency or default by the owner or owners of auy other parcel or parcels within the district by more thau I 0% above the amount that would have been levied in that fiscal year had there never been auy delinquencies or defaults. These amendments will become effective Jauuary I, 2008.

The Services District is not aware of auy other significaut pending legislation which would have material adverse consequences on the Bonds or the ability of the Services District to pay the principal of aud interest on the Bonds when due.

Additional Information

The purpose of this Official Statement is to supply information to prospective buyers of the Bonds. Quotations and summaries and explanations of the Bonds and documents contained in this Official Statement do not purport to be complete, and reference is made to such documents for full and complete statements and their provisions.

The execution aud delivery of this Official Statement by the General Mauager of the Services District has been duly authorized by the Board of Directors acting in its capacity as the legislative body of the District.

JURUPA COMMUNITY SERVICES DISTRICT ON BEHALF OF COMMUNITY FACILITIES DISTRICT NO. 30 (EASTVALE AREA) OF JURUPA COMMUNITY SERVICES DISTRICT

By: Isl Eldon E. Horst General Mauager

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APPENDIX A

RATES AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR COMMUNITY FACILITIES DISTRICT NO. 30 (EASTVALE AREA)

OF JURUPA COMMUNITY SERVICES DISTRICT

A special tax (the "Special Tax") (defined below) shall be applicable to each Parcel (defined below) located in Connnunity Facilities District No. 30 (Eastvale Area) of Jurupa Connnunity Services District ("CFD No. 30"). The amount of Special Tax to be levied on a Parcel of Taxable Property in any Fiscal Year (defined below) shall be determined by the Board of Directors of J urupa Connnunity Services District (hereinafter the "District") acting in its capacity as the legislative body of CFD No. 30 (hereinafter the "Board of Directors"), as provided in Sections B, C, and D. All of the Taxable Property in CFD No. 30 shall be taxed for the purposes, to the extent and in the manner, herein provided.

A. DEFINITIONS

"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 ( connnencing with Section 53311) of Part I of Division 2 of Title 5 of the Government Code of the State of California.

"Administrative Expenses" means all ordinary and necessary costs and expenses of the District in administering CFD No. 30, as allowed by the Act, which shall include, without limitation, all costs and expenses arising out of or resulting from the annual levy and collection of the Special Tax and payment of debt service on the outstanding bonds of CFD No. 30, any litigation involving CFD No. 30, continuing disclosure undertakings of the District as imposed by applicable laws and regulations, communication with bondholders, and normal administrative expenses (including any District overhead and salaries).

"Administrator" means the General Manager of the District, or his/her designee.

"Alternative Special Tax Rate" means with respect to Parcels of Developed Property classified as Residential Property the amount of $3,887 per Parcel or an amount determined pursuant to Section I, if applicable.

"Assessor's Parcel Map" means an official map of the Assessor of the County of Riverside designating parcels by Assessor's Parcel number.

''Board of Directors'' means the Board of Directors of the District.

"CFD No. 30" means Connnunity Facilities District No. 30 (Eastvale Area) of the District.

"Church Property" means all property which, as of March I preceding the Fiscal Year for which the Special Tax is levied, has been developed or has been approved by the County for development for use as a church sanctuary, synagogue or other such place of worship, which may or may not include associated buildings which are to be used for religious educational purposes, and which is exempt from taxation pursuant to Section 214 of the Revenue and Taxation Code of the State of California.

"County" means the County of Riverside, California.

"Debt Service and Facilities Special Tax Requirement" means the amount required in any Fiscal Year after taking into consideration available funds pursuant to the bond indenture: (I) to pay principal of and interest on all outstanding bonds of CFD No. 30, (2) to pay Administrative Expenses

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attributable to such bonds and the levy and collection of the Special Taxes, (3) to pay costs of credit enhancement for such bonds and any amount required to be rebated to the United States with respect to such bonds, (4) to replenish the reserve fund for such bonds, and (5) to provide any amounts which the Board of Directors determines are necessary to pay the costs of the provision, construction and acquisition of the Facilities and/or accumulate funds therefor.

"Developed Property" means, for each Fiscal Year, (i) for purposes of the levy of Special Taxes to satisfy the Debt Service and Facilities Special Tax Requirement, all Parcels of Residential Property and Non-Residential Property which, as of March 1 preceding the Fiscal Year for which the Special Tax is being levied, a building permit has been issued which allows residential dwelling units or non­residential buildings to be constructed, or (ii) for purposes of the levy of Special Taxes to satisfy the 0 & M Special Tax Requirement, all Parcels for which, as of March 1 preceding the Fiscal Year for which the Special Tax is being levied, there has been recorded in the official records of the County a subdivision map, parcel map, lot line adjustment or any other similar map which subdivides (or creates) such Parcels so that building permits can be issued for construction of one or more residential dwelling units or non-residential buildings thereon.

"District" means Jurupa Community Services District.

"Facilities" means for CFD No. 30: (a) water system facilities, including capacity in existing facilities, and sewer system facilities, including capacity in existing facilities and sewage treatment and disposal capacity, of the District, (b) Parks and Park Improvements, (c) public school facilities of Corona-Norco Unified School District, and (d) any other improvements or facilities designated by the District, with an estimated useful life of five years or longer, which are eligible for financing under the Act.

"Fiscal Year" means the period from and including July 1 of any year to and including the following June 30.

"Landscape" means landscape, including turf, trees, shrubs, bushes, and other cultivated vegetation which is planted and growing in, associated irrigation system facilities which are located in, and hardscape which is located in publicly owned street rights-of-way, parkways and open-space areas.

"Land Use Regulations" means the General Plan, Community Plan, Zoning Ordinance, any Specific Plan, and any other applicable land use regulations of the County of Riverside, or any successor agency.

"Maximum Special Tax for Debt Service and Facilities" means the maximum amount of Special Tax, determined pursuant to Section C, that can be levied by the Board of Directors in any Fiscal Year on a Parcel of Taxable Property to satisfy the Debt Service and Facilities Special Tax Requirement.

"Maximum Special Tax for O & M" means the maximum amount of Special Tax, determined pursuant to Section C, that can be levied by the Board of Directors in any Fiscal Year on a Parcel of Taxable Property to satisfy the O & M Special Tax Requirement. The Maximum Special Tax for 0 & M shall be increased annually by the percentage increase in the Consumer Price Index (All Items) for Los Angeles - Riverside - Orange County (1982-84 ~ 100) since the beginning of the preceding Fiscal Year, or by two percent (2%), whichever is greater, on July 1, 2007 for Fiscal Year 2007-08 and on each subsequent July 1 for the Fiscal Year then commencing.

"Net Acre or Acreage" means the acreage of a Parcel as shown on an Assessors Parcel Map, or if the acreage of a Parcel is not shown on such a map, the acreage shown or calculated based on the applicable recorded final map, recorded parcel map or other recorded County parcel map.

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"Non-Residential Property" means all Parcels of Developed Property for which a building permit has been issued for the purpose of constructing a non-residential building or upon which such a building has been constructed.

"O & M Special Tax Requirement" means the amount, after taking into consideration available funds, required in any Fiscal Year to pay: (I) costs related to the ongoing Operation and Maintenance and (2) Administrative Expenses attributable to said ongoing Operation and Maintenance, as determined by the District.

"Operation and Maintenance" means the operation and maintenance of Parks and Park Improvements and Landscape.

"Parcel" means a lot or parcel which, or any portion of which, is located within the boundaries of CFD No. 30 and which is shown on the then current applicable Assessor's Parcel Map(s) with an assigned parcel number.

"Park and Open Space Property" means all property which, as of March I of the Fiscal Year preceding the Fiscal Year for which the Special Tax is being levied, has been developed or has been approved by the County for development for active park or open space uses, conveyed to and controlled by a public agency, as specified in the Land Use Regulations.

"Parks and Park Improvements" means parks and park and recreation improvements which are to be developed, constructed, and installed within and in the area of CFD No. 30 and which will be owned and operated by the District for the benefit of the residents of CFD No. 30.

"Property Owners' Association Property" means all property which, as of March I preceding the Fiscal Year for which the Special Tax is being levied, has been conveyed, dedicated or irrevocably offered for dedication to a property owners' association for recreational or open-space use, as specified in the Land Use Regulations.

"Public School Property" means all property which, as of March I preceding the Fiscal Year for which the Special Tax is being levied, has been conveyed, dedicated, or irrevocably offered for dedication or leased for a term of ( I 0) years or more to a public agency for the purpose of providing public school facilities, as specified in the Land Use Regulations, and which is exempt from general ad valorem taxation.

"Residential Property" means all Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units, or upon which a residential dwelling unit has been constructed.

"Residential Floor Area" means all of the square footage of living area of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio or similar area, on a Parcel. The determination of Residential Floor Area shall be made by reference to building permit(s) for the Parcel.

"Special Tax(es)" means the Special Tax to be levied, in each Fiscal Year, on all Parcels of Taxable Property, pursuant to Sections B, C, and D, to fund both the Debt Service and Facilities Special Tax Requirement and the O & M Special Tax Requirement.

"Table 1" means Table 1 contained in Section C.

"Taxable Property" means all Parcels in CFD No. 30 which are not exempt from the levy of Special Taxes pursuant to the Act or Section E.

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"Undeveloped Property" means all Parcels of Taxable Property which are not categorized as Developed Property.

B. ASSIGNMENT TO DEVELOPMENT CATEGORIES AND RESIDENTIAL SIZE CLASSIFICATIONS

For each Fiscal Year (commencing with Fiscal Year 2006-07), each Parcel of Taxable Property shall be categorized as either Developed Property or Undeveloped Property. Parcels of Developed Property shall further be categorized as Residential Property or Non-Residential Property. Parcels of Residential Property shall be assigned to the applicable residential size classification set forth in Table I based on the Residential Floor Area of the residential structure located on or to be constructed on the Parcel.

Determinations of the appropriate development category for each Parcel and the residential size classification for each Parcel of Residential Property shall be made by the Administrator, and shall be based upon a review of the Land Use Regulations and the building permit(s) applicable to each Parcel. All Parcels of Taxable Property shall be subject to the levy of the Special Tax based on the Maximum Special Tax for Debt Service and Facilities and the Maximum Special Tax for O & M, determined as provided in Section C, and in accordance with the method of apportionment set forth in Section D.

C. MAXIMUM SPECIAL TAX

The Maximum Special Tax for Debt Service and Facilities for a Parcel of Developed Property categorized as Residential Property shall be the greater of: (i) the applicable amount set forth in Table I or (ii) the Alternative Special Tax Rate, and for a Parcel of Developed Property categorized as Non-Residential Property shall be the amouut determined by multiplying the Net Acreage of the Parcel by the amount set forth in Table 1. The Maximum Special Tax for Debt Service and Facilities for a Parcel of Undeveloped Property shall be the amouut determined by multiplying the Net Acreage of the Parcel by $21,992 per Net Acre.

Table 1 Special Tax Amounts for Developed Property

Special Tax for Debt Maximum Special Tax for Land Use Classification Service and Facilities 0 & M (Fiscal Yr. 2006-07)

Residential Size: Less than 2,501 SF $3,360 per Parcel $435 per Parcel 2,501 SF to 2,700 SF $3,503 per Parcel $435 per Parcel 2,701 SF to 2,900 SF $3,597 per Parcel $435 per Parcel 2,901 SF to 3,100 SF $3,655 per Parcel $435 per Parcel 3,101 SF to 3,300 SF $3,712 per Parcel $435 per Parcel 3,301 SF to 3,500 SF $3,827 per Parcel $435 per Parcel 3,501 SF to 3,700 SF $3,931 per Parcel $435 per Parcel 3,701 SF to 3,900 SF $4,035 per Parcel $435 per Parcel 3,901 SF to 4,100 SF $4,139 per Parcel $435 per Parcel Over 4,100 SF $4,288 per Parcel $435 per Parcel Non-Residential Property $21,992 per Net Acre $2,461 per Net Acre

The abbreviation "SF" in Table I signifies square footage and the SF numbers in Table I are Residential Floor Areas of residential structures.

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The Maximum Special Tax for O & M for Fiscal Year 2006-07 for Parcels of Developed Property shall be the amounts set forth in Table I. The Maximum Special Tax for Fiscal Year 2006-07 for 0 & M for Parcels of Undeveloped Property shall be $2,461 per Net Acre.

The Maximum Special Tax for O & M for all Parcels of Developed Property and Undeveloped Property shall be increased annually by the percentage increase in the Consumer Price Index (All Items) for Los Angeles - Riverside - Orange County (1982-84 ~ 100) since the beginning of the preceding Fiscal Year, or by two percent (2%), whichever is greater, on July I, 2007 for Fiscal Year 2007-08 and on each subsequent July I for the Fiscal Year then commencing.

In accordance with Section 5332l(d) of the Government Code of the State of California, the Maximum Special Tax for Debt Service and Facilities for each Parcel "used for private residential purposes," as defined therein, shall be calculated and thereby established by the date on which the Parcel is first subject to the Special Tax. Under no circumstances will the Special Tax levied on any parcels used for private residential purposes be increased as a consequence of delinquency or default in the payment of Special Taxes by the owner of any other Parcel or Parcels by more than ten percent (10%) for any Fiscal Year.

D. METHOD OF APPORTIONMENT AND LEVY OF THE SPECIAL TAX

Starting with Fiscal Year 2006-07 and for each subsequent Fiscal Year, the Board of Directors shall determine the total amount of Special Taxes to be levied and collected in that Fiscal Year in order to satisfy the Debt Service and Facilities Special Tax Requirement and the O & M Special Tax Requirement for such Fiscal Year. The Board of Directors shall levy the Special Tax on all Parcels of Taxable Property in the following priority until it has levied the amount necessary to satisfy both the Debt Service and Facilities Special Tax Requirement and the O & M Special Tax Requirement for the Fiscal Year as follows:

(a) Debt Service and Facilities Special Tax Requirement.

(I) First: The Special Tax shall be levied on all Parcels of Developed Property in equal percentages up to 100% of the applicable Special Tax amount set forth in Table I; and

(2) Second: If additional funds are needed, the Special Tax shall be levied on all Parcels of Undeveloped Property in equal percentages up to 100% of the Maximum Special Tax for Debt Service and Facilities for Undeveloped Property; and

(3) Third: If additional funds are needed, the Special Tax shall be levied on all Parcels of Developed Property categorized as Residential Property whose Maximum Special Tax for Debt Service and Facilities is determined by application of the Alternative Special Tax Rate in equal percentages up to 100% of such Maximum Special Tax.

No Special Tax shall be levied on Parcels of Undeveloped Property in any Fiscal Year to provide any amounts which the Board of Directors determines are necessary to pay the costs of the provision, construction and acquisition of the Facilities and/or to accumulate funds therefor, as described in Clause (5) of the definition of Debt Service and Facilities Special Tax Requirement.

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(b) 0 & M Special Tax Requirement.

E. EXEMPTIONS

(1) First: The Special Tax shall be levied on all Parcels of Developed Property in equal percentages up to 100% of Maximum Special Tax Rate for O & M; and

(2) Second: If additional funds are needed, the Special Tax shall be levied on all Parcels of Undeveloped Property in equal percentages up to 100% of Maximum Special Tax Rate for O & M.

The Special Tax related to the Debt Service and Facilities Special Tax Requirement shall not be levied on up to 20.21 Net Acres of Parcels of exempt property in the chronological order in which such property becomes any of the following:

1. Property that lies within dedications for public streets or publicly owned surface drainage channels.

2. Property Owners' Association Property. 3. Public School Property. 4. Park and Open Space Property. 5. Church Property.

Any Parcels described in the preceding paragraph that exceed 20.21 Net Acres shall be classified as Taxable Property and be subject to the Special Tax as either Developed Property or Undeveloped Property as provided for in Sections B, C, and D, unless the obligation to pay the Special Tax for any such Parcel is prepaid pursuant to Section H.

The Special Tax related to the O & M Special Tax Requirement shall not be levied upon any Parcels of exempt property described in items 1 through 5 above.

F. MANNER OF COLLECTION

The Special Taxes shall be collected in the same manner and at the same time as ad valorem property taxes and shall be subject to the same penalties, and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem taxes; provided, however, that the District may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations ofCFD No. 30.

G. DURATION OF SPECIAL TAX LEVIES

Pursuant to Section 5332l(d) of the Government Code of the State of California, the tax year after which no further Special Tax shall be levied or collected with respect to any Parcel to satisfy the Debt Service and Facilities Special Tax Requirement shall be Fiscal Year 2045-46.

All Parcels of Taxable Property shall continue to be subject to the levy and collection of the Special Tax to satisfy the O & M Special Tax Requirement as long as the District operates and maintains Parks and Park Improvements and Landscape within and for the benefit of the residents within CFD No. 30.

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H. PREPAYMENT

As used in this Section H, the terms in quotes have the meanings given to them below:

"CFD Facilities Amount" means the amount of $6,400,000 expressed in 2006 dollars, which shall increase on January 1, 2007 and on each January 1 thereafter, by the percentage increase in Construction Index since the preceding January 1, or such lesser amount (i) as shall be determined by the Administrator to be sufficient to provide for the construction and acquisition of all of the public facilities, or (ii) as shall be determined by the Board of Directors at the time of the adoption of a covenant that CFD No. 30 will not issue any additional bonds.

"Construction Fund" means a fund or account established by the Indenture to hold funds which are to be used to pay costs associated with the construction and acquisition of public facilities for CFD No. 30.

"Construction Index" means the Engineering News-Record Building Cost Index for the City of Los Angeles. If this index ceases to be published, the Construction Index shall be another index which is determined by the Administrator to be reasonably comparable to such index.

"Exempt Property" means property that is exempt from the levy of the Special Tax pursuant to Section E.

"Future Facilities Costs" means the amount determined by subtracting from the CFD Facilities Amount (i) the amount available in the Construction Fund to pay the costs of the construction and acquisition of public facilities, and (ii) the estimated amount of income that will be earned from the investment of such available amount prior to the date upon which the prepayment is to be made.

"Indenture" means the bond indenture, fiscal agent agreement or resolution pursuant to which the bonds of CFD No. 30 are issued and which establishes a construction or improvement fund into which proceeds of the sale of the bonds are deposited to pay for the construction and acquisition of public facilities for CFD No. 30.

"Outstanding Bonds" means all bonds of CFD No. 30 which will remain outstanding after the first date following the current Fiscal Year on which interest on or interest on and principal of such bonds will be paid, excluding bonds to be redeemed on a later date with Prepayment Amounts (as defined below) for other Parcels for which the Special Tax Obligation for Debt Service and Facilities has been prepaid.

"Special Tax Obligation for Debt Service and Facilities" means the total amount of Special Taxes which could be levied on a Parcel based on the Maximum Special Tax for Debt Service and Facilities for the Parcel through the date of final maturity of the Outstanding Bonds.

1. Prepayment in Full

The Special Tax Obligation for Debt Service and Facilities may only be prepaid and permanently satisfied for a Parcel of Developed Property, a Parcel of Undeveloped Property for which a building permit has been issued, or a Parcel of Church Property, Park and Open Space Property, Property Owuers' Association Property or Public School Property that is not Exempt Property. The Special Tax Obligation for Debt Service and Facilities for a Parcel may be fully prepaid and the obligation of the Parcel to pay the Special Tax permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to the Parcel at the time of prepayment. An owuer of a Parcel intending to prepay the Special Tax Obligation for Debt Service and Facilities for the Parcel shall provide the Administrator with written notice of the

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owner's intent to prepay, and within fifteen ( 15) days of receipt of such notice, the Administrator shall notify such owner of the amount of a non-refundable deposit to cover the cost to be incurred by the District and CFD No. 30 in determining the Prepayment Amount for the Parcel. Within thirty (30) days of receipt of such non-refundable deposit, the Administrator shall notify the owner of the Prepayment Amount for the Parcel. Prepayment must be made not later than sixty (60) days prior to any redemption date for any bonds which will be redeemed with the Prepayment Amount.

The Prepayment Amount shall be calculated as follows (Except as provided above, capitalized terms have the meanings given below.):

Bond Redemption Amount plus Redemption Premium plus Prepaid Facilities Amount plus Defeasance Amount plus Administration Costs less Reserve Fund Credit equals Prepayment Amount

The Prepayment Amount shall be calculated, as of the proposed prepayment date, as follows:

Paragraph No.:

I. For a Parcel of Developed Property, determine the Maximum Special Tax for Debt Service and Facilities for the prepaying Parcel. For a Parcel of Undeveloped Property, determine the Maximum Special Tax for Debt Service and Facilities for the Parcel as though it was Developed Property, based on the building permit(s) issued for the Parcel. For a Parcel of Church Property, Park and Open Space Property, Property Owners' Association Property or Public School Property which is not Exempt Property, determine the Maximum Special Tax for Debt Service and Facilities for the Parcel.

2. Divide the Maximum Special Tax for Debt Service and Facilities for the Parcel, determined pursuant to paragraph I, by the total estimated amount of the Maximum Special Taxes for Debt Service and Facilities that could be levied on all Parcels of Developed Property, including the prepaying Parcel and excluding any Parcels which have previously prepaid the Special Tax Obligation for Debt Service and Facilities.

3. Multiply the aggregate principal amount of the Outstanding Bonds by the percentage derived pursuant to paragraph 2 to determine the principal amount of the Outstanding Bonds to be redeemed with the Prepayment Amount (the "Bond Redemption Amount").

4. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium").

5. Determine the Future Facilities Costs.

6. Multiply the Future Facilities Costs by the percentage derived pursuant to paragraph 2 to determine the amount of the Future Facilities Costs to be prepaid (the "Prepaid Facilities Amount").

7. Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds.

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8. Determine the unpaid amount of the Special Taxes levied on the Parcel in the current Fiscal Year.

9. Estimate the earnings on the investment of the Prepayment Amount, less the Prepaid Facilities Amount and the Administration Costs (as defined below), from the date of prepayment until the redemption date for the Outstanding Bonds which will be redeemed with the Prepayment Amount (the "Net Prepayment Amount").

I 0. Add the amounts derived pursuant to paragraphs 7 and 8 and subtract the amount derived pursuant to paragraph 9 to derive the Defeasance Amount (the "Defeasance Amount').

11. Determine the amount which will be needed and will not be paid from a non-refundable deposit by the owner of the prepaying Parcel for paying the costs of (i) determining the Prepayment Amount, (ii) investing the Net Prepayment Amount, (iii) redeeming the Outstanding Bonds, and (iv) recording any notices to evidence the prepayment and satisfaction of the Special Tax Obligation for Debt Service and Facilities for the Parcel (the "Administration Costs").

12. Determine the amount of the reserve fund credit (the "Reserve Fund Credit") which shall be the lesser of: (a) the amount, if any, by which the "Reserve Requirement" (as defined in the Indenture) will be reduced as a result of the redemption of Outstanding Bonds with the Prepayment Amount (the "Reduced Reserve Requirement") or (b) the amount (which shall not be less than zero) derived by subtracting the Reduced Reserve Requirement from the amount which will be on deposit in the Reserve Fund for the Outstanding Bonds on the prepayment date.

13. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Prepaid Facilities Amount, the Defeasance Amount, and the Administration Costs, less the Reserve Fund Credit.

14. Upon receipt of the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, the Defeasance Amount, and the Reserve Fund Credit shall be deposited into the appropriate fund established under the Indenture for the redemption of Outstanding Bonds and shall be used to redeem an aggregate principal amount of Outstanding Bonds which is equally divisible by $5,000 and, to the extent of any portion of the sum thereof which is not so utilized, to pay interest on and principal of Outstanding Bonds. The Prepaid Facilities Amount shall be deposited into the Construction Fund. The Administration Costs shall be retained by the District and used to pay or reimburse such costs.

Upon receipt of the Prepayment Amount for a Parcel, the Board of Directors shall cause the appropriate notice to be recorded in compliance with the Act to acknowledge that the Special Tax Obligation for Debt Service and Facilities for the Parcel has been prepaid and satisfied, and to cancel the Special Tax lien securing payment of Special Taxes for the Debt Service and Facilities Special Tax Requirement.

Notwithstanding the foregoing, no Prepayment shall be allowed for any Parcel unless the total amount of the Maximum Special Taxes for Debt Service and Facilities that may be levied on Taxable Property (excluding Parcels of Property Owners' Association Property, Public School Property and Church Property that are Taxable Property), both before and after expected buildout of the property in CFD No. 30, as then approved by the County, after the proposed Prepayment would be at least equal to the sum of(i) an amount equal to 110 percent of maximum aunual debt service on all Outstanding Bonds, as determined by the Administrator, a financial advisor or a special tax consultant, at the option of the Administrator, plus (ii) Administrative Expenses in the amount of$35,000.

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2. Partial Prepayment

An owner of not less than fifteen (15) Parcels of Developed Property classified as Residential Property may partially prepay the Special Tax Obligation for Debt Service and Facilities for all such Parcels. The owner of a Parcel of Undeveloped Property (i) for which a tentative subdivision map that will subdivide the Parcel into not less than fifteen (15) Parcels has been approved by the County, (ii) that will be classified as Residential Property and (iii) for which a building permit has been issued, may partially prepay the Special Tax Obligation for Debt Service and Facilities for not less than fifteen ( 15) of such Parcels. The amount of the Partial Prepayment shall be calculated pursuant to Section H. l as modified by the following formula:

These terms have the following meaning:

PP the Partial Prepayment PE the Prepayment Amount calculated according to Section H. l F the percentage by which the owner of the Parcels is partially prepaying the Special

Tax Obligation for Debt Service and Facilities.

The owner of such Parcels who desires to partially prepay the Special Tax Obligation for Debt Service and Facilities shall notify the Administrator of (i) the owner's intent to partially prepay the Special Tax Obligation for Debt Service and Facilities, and (ii) the percentage by which the Special Tax Obligation for Debt Service and Facilities for all such Parcels will be prepaid, and within fifteen (15) days of receipt of such notice, the Administrator shall notify such owner of the amount of a non­refuudable deposit determined to cover the costs to be incurred by the District and CFD No. 30 in determining the amount of the Partial Prepayment for such Parcels. Within thirty (30) days ofreceipt of such non-refundable deposit, the Administrator shall notify the owner of the Partial Prepayment amount applicable to each of such Parcels. A Partial Prepayment must be paid not later than sixty ( 60) days prior to the redemption date for any Outstanding Bonds which will be redeemed with the Partial Prepayment.

Upon receipt of a Partial Prepayment of the Special Tax Obligation for Debt Service and Facilities for any such Parcels, the Administrator shall (i) allocate the amouut of the Partial Prepayment pursuant to Paragraph 14 of Section H. l, and (ii) note on the records of CFD No. 30 that there has been a Partial Prepayment of the Special Tax Obligation for Debt Service and Facilities for such Parcels, and that the amount of Special Taxes which shall continue to be levied on such Parcels pursuant to Section D shall be reduced based on the percentage (1.00 - F) of the remaining Special Tax Obligation for Debt Service and Facilities for such Parcels.

Notwithstanding the foregoing, no Partial Prepayment shall be allowed for any Parcel unless the total amount of the Maximum Special Taxes for Debt Service and Facilities that may be levied on Taxable Property ( excluding Parcels of Property Owners' Association Property, Public School Property and Church Property that are Taxable Property), both before and after expected buildout of the property in CFD No. 30, as then approved by the County, after the proposed Partial Prepayment would be at least equal to the sum of (i) an amouut equal to 110 percent of maximum annual debt service on all Outstanding Bonds, as determined by the Administrator, a financial advisor or a special tax consultant, at the option of the Administrator, plus (ii) Administrative Expenses in the amouut of$35,000.

I. CHANGES TO TENTATIVE TRACTS

The Alternative Special Tax Rates have been established based on the land use configurations shown on the subdivision maps for Tentative Tract No. 31803. lu the event any portion of Tract No. 31803 is

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modified by the County, the Alternative Special Tax Rate for all Parcels of Developed Property in such tract, or the portion thereof which is modified, which are classified as Residential Property shall be determined (i) by multiplying the total square footage of the Parcel or Parcels in such tract or in the modified portion thereof by $0.5049 per square foot, and (ii) by dividing the product thus obtained by the number oflots in such tract or in the modified portion thereof.

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APPENDIXB

APPRAISAL REPORT

[THIS PAGE INTENTIONALLY LEFT BLANK]

SUMMARY APPRAISAL REPORT-COMPLETE APPRAISAL

COMMUNITY FACILITIES DISTRICT NO. 30 OfTbe

JURUPA COMMUNITY SERVICES DISTRICT (Pulte Homes)

Riverside County, St.ate of California (Appraisers' File Number 2007~1 IO)

prepared For

Jurupa Community Services District 11201 Harrell Street

Mira Loma, California 91752

Prepared By

Bruce W. Hull & Associates, Inc.

1056 E. Meta Street, Suite 202 Ventura, California 93001

(805) 641-3275 • Phone (805) 641-3278 -Fax

115 E. Second Street, Suite 100 Tustin, California 92780 (714) 544-9978 -Phone (714) 544•9985 • Fax

BRUCE W. HULL & ASSOCIATES INC. REAL EST ATE APPRAISERS & CONSULT ANTS

August 22. 2007

Mr. Ken Waring, Finance Manager Jurupa Community Services District 11201 Harrell Street Mira Loma, California 91752

Reference: Summary Appraisal Report-Complete Appraisal Community Facilities District No. 30 of the Jurupa Community Services District (Pulte Homes) Riverside Cowity, California

Dear Mr. Waring:

At the request and authorization of the Jurupa Community Services District, we have completed a Summary Appraisal Report for the above~referenced community facilities district. Community Facilities District No. 30 of the Jurupa CommW1ity Services District ("CFD No. 30") consists of 183 proposed single-family homes developed by Pulte Homes and marketed as Stoneridge. The condition of the lots within Stoneridge range from homes under construction to completed production homes closed to individuals.

lbe valuation method used in this report is the Sales Comparison Approach. We have valued the fee simple estate for the properties subject to the CFD No, 30 special tax lien. This report is written with the special assumption that the subject property is enhanced by the improvements and/or fee credits to be funded by the bonds issued by CFD No. 30.

As a result of our investigation, the concluded market value for the subject property is:

Ninety-One Million, One Hundred Ninety-Eight Thousand and Fifty Dollars

($91,198,050)

The values arc stated suhject to the Assumptions and Limiting Conditions of this report and the Appraisers' Certification as of August 15, 2007.

This Summary Appraisal Report is intended to comply with the reporting requirements set forth under Standard Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice for a Summary Appraisal Report. As such, it might not include full discussions of the data, reasoning and analyses that were used in the appraisal process to develop the appraisers' opinion of value.

1056 E. Meta Strnt, Suite 202, Ventura, Callfomla 93001 - (805) 641-3275- Phone, (805) 641-3278- Fax 115 E. Seeond Strfft Suite 100, Tustin, California 92780. {714) 544-9978 - Phone, (714) 544.9995 - Fax

Mr. Ken Waring Jurupa Community Services Dwrict August 22, 2007 Page Two

Supporting documentation concerning the data, reasoning and analyses is retained in the appraisers' files. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraised value contained within this report is being estimated with the hypothetical condition of the special tax lien of CFD No. 30. The report is also intended to comply with the appraisal standards of the California Debt Advisory and Investment Commission. The appraisers are not responsible for unauthorized use of this report.

This letter of transmittal is part of the attached report which sets forth the data and analyses upon which our opinion of value is. in part. predicated.

Respectfully submitted,

BRUCE W. HULL & ASSOCIATES, INC.

Bruce W. Hull, MAI California State Certified General

t,:j Real Estate Appraiser (AG004964)

Kitty S. Siino, MAI ca!ifomia State Certified Gtneral

Real Estate Appraiser (AG004793)

"'

TABLE OF CONTENTS

Assumptions and Limiting Conditions.

Purpose of the Appraisal.

The Subject Property ...

Intended Use of the Report

Definitions ....

Property Rights Appraised,

Effective Date of Value.

Drue of Report

Scope of Appraisal

County of Riverside Area Description .............. .

City of Corona/Eastvale Area Description .... ..

Immediate Surroundings ................... .

Riverside County Housing Market ... .

Community Facilities District No. 30 .............. ..

Subject Property Descriptions.

Highest and Best Use Analysis .. .

Market Data Discussion ........... , ..................... .

Improved Residential Sales Summary Chart

ADDENDA Discounted Cash Flow Analysis Detailed CFD Map Residential Lot Sales Summary Chart Improved Residential Sales Summary Chart Appraisers' Qualifications

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3

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.. ...................... 17

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. ............ 25

.. .. 30

.. ... 34

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ASSUMPTIONS AND LIMITING CONDITIONS

This report is a Summary Appraisal Report that is intended to comply ¼1th the reporting requirements set forth under Standard Rule 2~2(b) of the Uniform Standards of Professional Appraisal Practice for a Summary Appraisal Report. As such, it might not include full discussions of the data, reasoning and analyses that were used in the appraisal process to develop the appraisers' opinion of value. Supporting documentation concerning the data, reasoning and analyses is retained in the appraisers' files. The infonnation contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraisers are not responsible for unauthorized use of this report.

No responsibility is assumed for legal or title considerations. Title to the properties is assumed to be good and marketable unless otherwise stated in this report.

The properties are appraised subject to the special tax lien of CFD No. 30.

Responsible ownership and competent property management are asswned unless otherwise stated in this report.

The information furnished by others is believed to be reliable, however, no warranty is given for its accuracy,

All engineering is asswned to be correct Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property.

It is asswned that there are no hidden or unapparent conditions of the property, subsoil or structures that would render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them.

It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and laws unless otherwise stated in this report.

It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless nonconformity has been stated, defined and considered in this appraisal report,

It is assumed that all required licenses, certificates of occupancy or other legislative or administrative authority from any local, state or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based,

Sul'llhlW')' AppraUa/ Report - Complett Appraisal COlllmunlly Facilities District No. 30 Of the Jurupa CommWlily Services District Bruce W. Hull & Associates. Inc. Pogei

11. Any sketch included in this report may show approximate dimensions and is included only to assist the reader in visualizing the properties. Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee regarding accuracy is expressed or implied unless otherwise stated in this report. No survev has been made for the purpose of this report. •

12. It is assumed that the utilization of the land and improvement,;; are within the boundaries or property lines of the properties described and that there is no encroachment or trespass unless otherwise stated in this report.

l3. The appraisers are not qualified to detect hazardous waste and/or toxic materials. Any comment by the appraisers that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxi~ materials. Such determination would require investigation by a 4ualified expert relating to asbestos, urea-formaldehyde foam insulation or other potentially hazardous materials that may affect the value of the properties. The appraisers' value estimate is predicated on the assumption that there is no such material on or in the properties that would cause a loss in value unless otherwise stated in this report. No responsibility is assu~ed for ~ny environmental conditions or for any expertise or engineering knowledge reqmred to discover them. The appraisers• descriptions and resulting comments are the result of the routine observations made during the appraisal process.

14. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications.

l 5. The distribution, if any, of the total valuation in this report between land and impro~ements applies only under the stated program of utilization. The separate allocat1ons for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used.

16. The Americans with Disabilities Act ("ADA") became effective on January 26, 1992. The appraisers have made no specific compliance survey and analysis of these properties to determine whether they conform to the various detailed requirements of the ADA, nor are the appraisers qualified experts regarding the requirements of the ADA It is possible that a compliance sw-vey of the properties, together with a detailed analysis of the requirements of the ADA, could reveal that the properties are not in compliance with one or more of the requirements of the ADA. If so, this fact could have a negative effect upon the value of the properties. Since the appraisers have no direct evidence relating to this issue, a possible noncompliance with the requirements ofthc ADA in estimating the value of the properties has not been considered.

17. It is assumed that all the improvements and benefits to the subject property, which are to be funded by CFD No. 30 are completed and in place.

18. It is asswned there are no environmental concerns that would slow or thwart development of the subject properties and that the soils are adequate to support the highest use conclusion.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 30 Of the Jurupa Commllllity Ser111ces District Bruce W Hull & Associates. Inc. Page ii

19. This appraisal may not be conveyed to any person other than the client v.i.thout the appraisers' written consent. Permission is given for this appraisal to be published as a part of the Official Statement or similar document for the CFO No. 30 bonds.

20. It is an extraordinary asswnption that the costs of development provided by the builders are true and accurate.

Summary Appraisal Report - Complete Appraisal Comm,miry Fac/Uties District No. 30 0/tlw. Jun,pa Community Service• District Bruce W. Hull & Associates, Inc Pagew

PURPOSE OF THE APPRAISAL

The purpose of this appraisal report is to estimate the value of the fee simple interest, subject to

the hypothetical condition of the special tax lien of the CFD No. 30 Special Tax Bonds for the

subject property.

THE SUBJECT PROPERTY

The subject property consists of 183 proposed single-family detached homes being developed as

Stoneridge by Pulte Homes. The condition ofthe Jots are detailed as follows:

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Lot Numbers Lou Ownershin Condition

Traci 31 &03 Lots9-117.119-128. 130-141, 144-148. 1'7 Individuals Completed production homes 153,l.'i5, 159-160 !66-179 181 Wld 183 Lots 3-6 ' Pulte Homes Model Homes Lots I 18, 129, 142,!43, 149-152. 156-158, 18 Pulte Homes Houses over 95% complete 16!-165, J80and 182 Lots I, 2, 7 and 8 4 Pulte Homes Homes under construction

Total 183

INTENDED USE OF THE REPQRT

It is the appraisers' understanding that the client, the Jurupa Community Services District, will

utilize this report in determining the feasibility of selling bonds for CFD No. 30.

DEFINITIONS

Market Value

The term "Market Value" as used in this report is defined as:

"The mosI probable price which a specified interest in real property is likely to bring under all of the following conditions:

I. Consummation of sale occurs as of a specified date 2. An open and competitive marker exists for the properly interest appraised 3. The buyer and seller are each acting prudently and knowledgeahly 4. The price is not affected by undue stimulus 5. The buyer and seller are typically motivated

Summary Appra,sal Report - CO"lplete Appraisal Commumty Fac,/iues Distri,,;t No. 30 of the Jurupa Community Services District Bruce W ffu/1 & Associates, lnt'. Pa,:e I

6. Both parties are acting in what they consider their best interest 7. Marketing efforts were adequate and a reasonable time was allowed for

exposure in the open market 8 Payment was made in cash in US. dollars or in terms of financial

arrangements comparable thereto 9 The price represents the normal consideration for the property sold,

unaffected by special or creative financing or sales concessions granted by anyone associated with the sale "1

Finished Lot

The term "Finished Lot" is defined as:

"A parcel which has legal entitlements created by a recorded subdivision map, the physical condition being a fine~graded level pad with an infrastructure contiguous to each individual lot and consisting of asphalt paved roads in addition to the necessary utilities. This condition assumes the payment of all applicable development fees with the exception of building permit and plan check fees. "1

Hypothetical Condition

The term "hypothetical condition" as defined by USP AP as:

"That which is contrary to what exists but is supposed for the purpose of this analysis"

The hypothetical condition in the case of this appraisal is that we are assuming that the fees

and/or improvements that are to be funded by the bond issue have been paid or installed.

Credible

The term "credible" is defined by USPAP as:

"Worthy of belief"

1t is the intention of the appraisers to prepare a credible appraisal report.

Minimum Market Value

The term "minimum market value" is defined as the lower end of the range of market value.

Extraordinary Assumption

The term ''extraordinary assumption" is defined by USP AP as:

1 The Appraisal ofReal Estate, 1211, Edition

Summary Appraisal Report - Complete Appraisal Commumly Facilities District No. 30 of the JW'll{)4 Community Services District Bruce W: Hull & Associates, Inc. Pagel

"An assumjJtion, directly related to a specific assignment, which, if found to be false, could alter the appraisers· opinions or conclusion"

PROPERTY RIGHTS APPRAISED

The property rights being appraised are of a fee simple interest subject to existing easements of

record and CFD No. 30. The definition of"Fee Simple Estate" is defined as:

"Ownership of a title in fee establishes the interest in properly known as the fee simple estate - i.e., absolute ownership unencumbered by any other interest of estate, subject only to the limitation imposed by the governmental powers of taxation, eminent domain, police power and escheat "2

EFFECTIVE DA TE OF VALUE

11le subject property is valued as of August 15, 2007.

DATE OF REPORT

The date of this report is August 22, 2007,

SCOPE OF APPRAISAL

As previously stated, the purpose of this appraisal is to report the appraisers' best estimate of the

market value for the subject properties. This appraisal will be presented in the following format:

• A regional and community description followed by a description of the immediate area surrounding the subject property

• Riverside County housing market analysis • Brief description of CFD No. 30 • Property description for the subject property • Highest and best use analysis • Valuation analysis and conclusion for the subject property • Appraisal Report Swnmary

2 The Appraisal of Real Estate, 12°' Edition.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 30 of rF,e Jurupa Community Services District Bruce W. flu// & As,·,xi.at;>s, Inc. Page3

The subject property consists of 183 proposed single~family homes being developed a.<;

Stoneridge by Pulte Homes. The condition of the site ranges from homes under construction to

completed homes sold to individuals, There are four model homes completed and open.

In valuing the subject property, the value estimates wilt be based upon the highest and best use

conclusion using the Sales Comparison Approach. The Sales Comparison Approach to value is

defined as:

"The process in which a market value estimate is derived by analyzing the market for similar properties and comparing these properties to the subject property. "3

In the Sales Comparison Approach, market value is estimated by comparing properties similar to

the subject property that have recently been sold. are listed for sale or are under contract. We did

not apply a cost or income approach as it was not considered necessary to arrive at credible

results.

The due diligence of this appraisal assignment included the following:

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Compiled demographic information and related that data to the subject property to determine a feasibility/demand analysis

Gathered and analyzed infonnation on the subject marketplace, reviewed several real estate brokerage publications on historical and projected growth in the subJect market and researched the micro and macro economics within Riverside County and the Eastvale/Mira Loma area

Inspected the subject properties

Interviewed representatives from the builders to obtain available infonnation on the subject properties

Reviewed Preliminary Title Reports on the subject projects

Reviewed Soils Reports and Environmental Reports when appropriate for the subject projects

7. Reviewed Methane Reports for the subject projects when applicable

3 The Appraisal of Real Estate, 12.,_ Edition,

Summary Appraisal Report- Complete Appraisal Community Pocilit1es District No. 30 of the Jwupa Commumty Services District Bruce W Hull & Associates, Inc fage4

8. Searched the area for relevant comparable improved residential transactions, including sales and offerings, and interviewed the appropriate parties to ascertain pertinent infonnation relating to each transaction

9. Interviewed sales representatives from the projects that are currently marketing and reviewed sales brochures and sales infonnation

l 0. Reviewed actual sales information on the closed homes within the projects

11. Reviewed competing new home developments in the Eastvale area

Summary Appraioo/ Report - Complete Appraisal Community Focil1ties Distnc1 No JO of the Jw·upa Community Services Di$tricr Bn,.ce W Hull & Associores, Inc. Page5

COUNTY OF RIVERSIDE AREA DESCRIPTION

~ The subject property is located in the northwestern portion of Riverside County (the "County")

north of the Santa Ana River and west of Interst.ate 15 ("J.}5"). The area is unincorporated and

is between the City of Norco to the south and the City of Ontario (in San Bernardino County) to

the north. The County encompasses approximately 7,300 square miles, which includes large

expanses of undeveloped deserts, valleys, canyons and mountains. The County is the major

recipient of outward urban pressure from Orange and Los Angeles Counties as well as northerly

growth from San Diego County. Although located at the periphery of most urban activity in

Southern California, the County, in particular the westerly region, is clearly perceived by most

observers as a major growth area well into the foreseeable future. Because of mountain ranges

limiting road access into Los Angeles and Orange Counties, Riverside and San Bernardino

Counties belong to the same Metropolitan Statistical Area (''MSA"). This MSA is also knovm as

the Inland Empire.

t,:j Transportation .'.., The subject property is situated west of I-15 and north of the 91 Freeway. Four major freeways

bisect the County. Interstate 15 travels in a northerly/southerly direction with access to Barstow

and Nevada to the north and San Diego to the south where it approaches the international border

with Mexico. The 91 Freeway travels in an easterly/westerly direction and provides access to

Orange and Los Angeles Counties to the west and connects with the 60 Freeway and

Interstate 215 to the north in San Bernardino County. The 60 Freeway provides access to the

west and to the east of Los Angeles where it combines with Interstate IO providing access to

Arizona. Interstate 215 travels in a northerly/southerly direction in the County and provides

access that generally parallels Interstate 15 to the east. The opening of the extension of the 21 0

Freeway in San Bernardino helps to alleviate traffic on 1-10 and the 60 Freeway.

The County is well served by Amtrak and Metrolink as well as several rail freight lines. The

Ontario International Airport provides air service and is located approximately 10 miles north of

the subject in San Bernardino County. In addition to car and plane travel, the County has one of

the most extensive trucking corridors with the interstate and state freeways bisecting the County.

Summary Appraisal Report - Complete App~aisaf Community Facilities District Na. 30 of the Ji,n,pa Community Ser;,/ces DisMcl Bni!"' W. H><ll & Assoc,a1es, Inc. Page6

Population

The County has expenenced increasing population for several decades and is anticipated to

continue to do so in the foreseeable future. Per the California Department of Finance, the

January 1, 2007 population was 2,031,625. This represents an increase of 3.3 percent over the

past year and an average growth rate of approximately 4.2 percent over the prior five years. Per

County projections, the population is anticipated to reach nearly three million by 2020; an

average annual increase of 2.9 percent. Riverside is among the fastest growing counties in the

nation.

Economy

The MSA has had a strong employment record over the past 10 years. The most significant

gains were seen in the areas of construction, finance, insurance, real estate, services and retail

trade. The least amount of growth was in agriculture and the wholesale trade.

The unemployment rate for the MSA is estimated at 5.6 percent (per the Employment

Development Department -June 2007), which reflects an increase from June 2006 (5.0 percent),

however, a decrease from three years ago (June 2004 - 6.0 percent). Individually, Riverside

County has a 5.7 percent unemployment rate while San Bernardino County has a 5.4 percent

unemployment rate. The current unemployment rate for the MSA of 5.6 percent is slightly

higher than the current California unemployment rate of 5.2 percent and compares somewhat

unfavorably to the current national rate of 4.7 percent. Below is a table depicting Riverside

County in relationship to unemployment rates of the surrounding counties:

,Jurisdiction As of Unemolovment Rate Los Angeles County 06/07 4.9% Rh·erside County 06/07 5.7% San Bernardino County 06/07 SA% Orange CountV 06107 3.9% San Diciz.o Countv I 06/07 4.6%

Source. State of California E.D.D.

Although the unemployment rate is higher than in surrounding counties, it is historically low

based on the past 10 years' unemployment rates for the area and is similar to the State's rate.

Summary Appra,sa/ &port - Completr Apprailial Community Fac,lit,es Dis1rict No. 30 oj1he Jurupa Community Services District Bruce W Hull & Associates, Inc Pagrl

The economy within the County had been robust for the past several years, however, it is now

showing signs of slowing. From 1997 through 2000, the economy grew at a rapid pace with the

discovery and use of the Internet and investment in equipment and software becoming more

commonplace. The year 2001 saw a slowdown with the dot.com companies plummeting. The

economy rebounded in 2002 due to low interest loans with home sales a strong force in the

economy from 2002 to 2005. During this period, home values increased in the County almost

10~ percent, however, there has been a definite transition in the new home market.

Toe Federal Reserve increased interest rates 17 times between June 2004 and mid-2006. Non­

conventional financing alternatives such as 40-year amortized loans, variable loans, teaser rate

loans and l 00 percent loans increased sharply in late 2004 and 2005 sustaining the housing

market. Price appreciation hit highS in late 2005 which began a slowing of sales. Higher interest

rates began making an impact on home sales in 2006. During 2006, a sales price decline began

in some areas and a significant sales slowdown began to occur. Over the fourth quarter 2006,

concessions and discounts were prevalent on new homes along with sales slowing further in most

markets, possibly due to the time of year as well as the market slowdown. Thus far in 2007, the

~ housing market has seen a shake-up of the sub-prime mortgages. Sub-prime mortgages include 00

home loans which were obtained for l 00 percent of the sales price without verification or which

used teaser rates or buy-down rates to qualify. Homes were purchased in 2005 and 2006 using

sub-prime mortgages assuming the market would continue to appreciate and borrowers would re~

finance out of the strict loans. The stagnant market of 2006 and now the downturn in prices in

2007 has made refinancing these mortgages nonexistent.

According to the Sullivan Group (Riverside County Housing Market, May 23, 2007), the

County's economy is positive as job growth is still solid and is expected to continue. However,

per the most recent UCLA Anderson Forecast (U.S. Economy Not In a Recession, "But It Is

Certainly Close" -June 19, 2007), the slumping U.S. housing market is now estimated to impact

job growth albeit in the final quarters of 2007 and first quarter 2008. The Forecast states that

mia~2008 will be more optimistic than the previous three quarters and that job growth will return

to nonnal levels later that year, On a more micro level, the Inland Empire region is anticipated

to create 37,000 new jobs in 2007 (there were 48,000 new jobs in 2006) which is a pace well

ahead of most of California.

Summary Appraisal Reparl - Camplek! Appraisal Community Facif,ties Distncl No. 30 a/ the Jun.pa Commu~ Services District Broce W Hull & Associates, Inc. Page8

The current housing downturn is hurting the County, however, not to the extent it did in the early

1990s. The current housing market in Riverside County is changing. The full effects of the sub~

prime lending fiasco is still unknown. The downward trending of the construction trades due to

the housing slowdown is being offset by commercial construction (mainly infrastructure) still

going strong. Robert Kleinhenz, Deputy Chief Economist for the California Association of

Realtors, stated that sales of existing homes in Riverside County plummeted about 25 percent in

2006 and may fall another seven percent in 2007, John Husing predicts a five percent year~to~

year drop with homes farthest from job centers laking the most impact. Husing states the Inland

Empire housing market is in the midst ofan 18~month pause and he expects a housing recovery

to begin in mid~to late 2008 while prior to that he opines homebuilders will have to sell off their

inventory and financially distressed sellers will be flushed out of the market. Esmael Adi bi, an

economist at Chapman University, forecasts that the housing market correction may take longer.

He predicts that any meaningful recovery will be delayed by a surge of new houses that will hit

the market when those homeo"Wners who can't afford mortgages that reset at higher interest rates

are forced to sell. Patrick Duffy, fonner Managing Director of Consulting for Hanley Wood

Market Intelligence, a real-estate industry-consulting firm, said it is difficult to predict the full

effect of riskier mortgages as this is uncharted territory.

The general consensus among the economists appears to be that prices will decline in 2007 and

that sales will remain low. Most experts are in agreement that the economy won't collapse as it

did in the early 1990s, which was triggered by aerospace and military cutbacks, as the Inland

Empire area's job pool is expected to continue expanding, albeit at a slower pace than the past

few years.

It appears the sub-prime lender issue is beginning to have an impact on the housing market.

Second quarter 2007 statistics are now available. According to DataQuick, notices of default are

substantially rising. The second quarter of2007 has seen over 53,943 notices of default filed in

the State of California. According to the Press Enterprise ("Foreclosure Rate Spikes in Region"

June 12, 2007), Riverside County ranked fourth among California counties in foreclosure related

filings (includes notices of default, notices of trustee sales and lender repossessions). There was

one filing for every 128 households in the County. Riverside County recorded 4.550 foreclosure

filings in May which was more than four times the 1,066 filings recorded in May 2006.

Summary Appraisal Report - Complete Appraisal Commumty Facilities District No. 30 of the Jurupo Commumly Services Dis Irie/ Brucf W Hui/ & Associates, Inc. Page9

According to DataQuick, approximately half of the foreclosures in the first quarter 2007 were

from subprime loans (statistics not yet available for second quarter).

In addition to the mortgage woes, housing prices continue to fall. According to First American

Corelogic, 9.5 percent of existing homes sold in Riverside County in March 2007 sold for less

than they were purchased for, This compares to 7.1 percent in Orange County, 4.8 percent in

San Bernardino County, 45 percent in Los Angeles County and 15.5 percent in San Diego

County (all for percentage of March 2007 sales that sold below their purchase price). These new

facts, coupled with tighter mortgage restrictions and the non~conventional financing used over

the past three years suggest a significant housing downturn.

Ggvernment/Environmental

The County is home to the Stephens Kangaroo Rat ("SKR"), which is listed on the endangered

species list by the Federal government. The County formed a Habitat Preserve Agency (the

''Agency") to counter the extinction of this protected animal. fn 1995, tb.e Agency was

designated a success, having protected enough habitat lands. To obtain this degree of success,

ttl the Agency required SKR acreage fees from developers in order to purcb.ase conservation habitat

'° acreage. Due to the success of the Agency, the degree of urgency regarding SKR extinction is

considerably less than in previous years.

New possible endangered species that are affecting the County area include Coastal Sagebrush

which is the habitat for the California Gnateatcher. Due to the County's success with the SKR

conservation, it is anticipated that, if required, the County will perform the same function for

similar endangered species.

The County has also initiated a Multi~Species Habitat Conservation Plan with appropriate

developer fees for funding the conservation plan.

The Pacific Legal Foundation ("PLF') has filed two lawsuits charging the government with

flawed critical habitat designations for 42 California species. According to a press release by

PLF on March 30, 2005, the "critical habitat" designations for more than 40 California species

fail to meet the scientific and legal standards required under the Federal Endangered Species Act.

Summary Appraisal Report - Complete Appraisal Community Facilities Dtstri.ct Na. JO of the Junipa Cammunil)' Serv,ces Districl .Bruce W. Hull & Associaies, Inc. Page 10

On September 20, 2005, the United States Fish and Wildlife Service agreed to perfonn status

reviews for all 194 California species that PLF filed suit on earlier in the year. Although the

Endangered Species Act requires that the government review the status of listed species every

five years, the Fish and Wildlife Services had failed to perform the reviews for about two-thirds

of California's listed species. Under the tenns of the agreement, the Fish and Wildlife Service

agreed to perform all of the reviews over the next eight years, with the first wave of reviews

beginning October 2005.

The lnland Empire Area received approximately $12 million in federal grants in 2003 to buy

habitat land for endangered species, including some sites the Pacific Legal Foundation lawsuit

would target. It is the appraisers' understanding that property that has been graded or has

received grading permits will not have any further habitat issues and will not be affected by the

lawsuit. The subject property has been graded, thus, should not be affected by this issue.

Education

The subject area is served by the Corona~Norco Unified School District which operates eight

high schools, seven middle schools and 32 elementary schools. Higher education is available

within an hour's drive at the University of California campus at Riverside or California State

Un.iversity campuses in San Bernardino, San Marcos, Fullerton and Pomona.

Conclusion

Population in the County has been increasing for the past 30 years. The influence for this groW1h

pattern was primarily commuters from Los Angeles, Orange and San Diego Counties who were

drawn to the area by its relatively affordable housing and quiet country setting. Predictions are

for continued population groW1h in the County through 2020. The robust economy of 1997

through 2000 saw a dov.11turn in 2001 and a rebound from 2002 through 2005. Housing was the

strong force in the economy during these years and was fueled by low interest rates and flexible

mortgages. Home values increased as much as 100 percent between 2002 and 2005 with a

slowdown to a more normal rate of appreciation in 2005 and a decrease in 2006 with further

decreases projected for 2007. Although current national economic conditions and the subject

area's economy are still considered positive, the significant slowdown in the residential market is

being closely monitored. The non~conventional financing which. was used over the past few

years mav have a future effect on the housing market. However, the Countv is expected to S1,mmary Apprwsal Reporl - Complete Appraisal Comml/.nity Facilities Distnct No. 30 of the Jurupa Commun ii}' Services D1s/rict Bruce W Hu/I & Associates. Inc. Pagel l

continue to grow due to its Southern California location, the availability of land and the lov..-er

prices in comparison to adjacent Orange and San Diego Counties.

S11111,rwry Appraisal Report - Complete Apprai8al Community Facilities Dislrict No. 30 of the Jw-upa Community Services District Bruce W Hull & Associates. Inc. Page 12

CITY OF CORONA/EASTVALE AREA DESCRIPTIO~

General Arca

The subject properties are located in the area knov..n as Eastvale in unincorporated Riverside

County approximately five miles north of the City of Corona. Eastvale is a new community with

minimal demographics available, thus we will focus on the nearest large city, Corona. Eastvale

information, while limited, will be discussed as well.

The City of Corona (the "City") is located approximately 45 miles southeast of Los Angeles and

is the second largest City in the County with a land area of approximately 39 square miles. The

City, which incorporated in 1896, had an early local economy based on agricultural production

of citrus crops. The area known as Eastvale wa<1 once dairy farms and is currently transitioning

to new residential neighborhoods. Eastvale is along the northern border of Riverside County

adjacent to the County of San Bernardino.

Population

Per the California Department of Finance, the City of Corona had an estimated population of

146,164 as of January 1, 2007, which is a 0,3 percent increase from the January 2006 population

of 145,659. This minimal increase in growth rate reflects the essential build-out of the City.

The average age in the City is 29.9 years old, lower than that of surrounding Los Angeles and

Orange Counties. The City has a higher education level than surrounding cities with over 60

percent of its adults having attended college, In addition, the college degree attainment is 40

percent higher than the average in the County with 41 percent of Corona's workforce holding

management, professional and technical positions.

As preYiously stated, Eastvale is a transitioning commwiity from dairy farms to new residential

housing. Eastvale is one of the fastest growing areas in Riverside County. The population

within the Eastvale area was estimated at 30,563 as of August 2005. The population is currently

estimated at 35,000 ("Eastvale Sports First Trappings ofCitihood", Press Enterprise March 24,

2007).

Summary Appraisal Repon- Compfele Appraisal Commuml)' FaciUt,es District No. 30 of the Jurupa Community Services District Bruce W. Huf{ & Assac/ateo, Inc. Page 13

Housing

More than 10,500 new homes were built in the City during the 1990s. Several master planned

communities and new housing tracts were developed in the area known as South Corona,

however, since the end of 2000, housing development has slowed considerably due to the limited

amount of remaining land for development. Of the total dwelling units within the City,

approximately 65 percent are detached single-family residences ranging in age from new

construction to in excess of 50 years. The average household occupancy in the City is 3 .14

persons. 1his is higher in comparison with the County, which averages 2.68 persons per

ho~sehold, however, is considered typical of many suburban markets.

The Eastvale area is projected to grow to a proposed 43,174 residential units at build-out.

Between 1999 and 2005 homes in the Eastvale area sold at an exceptionally rapid pace. Sales

prices essentially doubled between 2002 to 2005. In 2005, sales began to slow as prices and

interest rates continued to climb. Where few marketing incentives were offered between 1999

and 2005, the year 2006 saw increasing levels of inventories and slowing sales which created the

need for incentives in the marketplace. Thus far in 2007 there have been price decreases along

9" ""'"' with significant incentives offered in the Eastvale marketplace. -Economy

In the early 1980s, developers viewed Corona as a commuter area to Orange and L-Os Angeles

Counties with less expensive land for development bringing a building boom to the City. In the

late 1980s, prices spiked with the recession of the early 1990s taking away most of the

appreciation. Between 1997 and 2001, there was significant appreciation in the City along with

the majority of Southern California. A brief slowdown in 2001 gave way to rampant

appreciation between 2002 and 2005. Land development within the city limits has slowed

considerably due to the limited availability of developable lands. Due to this limited land

availability, development has moved outside of Corona to the outlying areas such as Eastvale to

the north and the I-15 corridor to the south.

More than 74,000 people work in Corona. This equates to a job for every two persons living in

the City. The average household income within the City exceeds $78,000 while over 25 percent

of all households have earnings of over $100,000. According to the City's Economic

Summary Appraisal Report - Complete Appraisal Community Facilities Districl No. JO of the Jun,po Community Sel'Vices District Bruce W. Hull & Associates, bw Page 14

Development Department, the spendable income of the residents of the City increases an average

of five to seven percent per year. From 1990 to 2004, Corona's retail trade nearly tripled.

Within the Eastvale area the 2003 median household income was $72,123

There has been over 5.8 million square feet of retail, office and industrial buildings constructed

within the City over the past few years. Corona's industrial base is over 30 million square feet

and generates a substantial amount of the City's total sales tax revenue. There are over 2,750

acres zoned for light, medium and heavy industrial uses within the city limits. There are several

new retail projects either under development or recently completed within the City. Corona

Pointe, a 52-acre mixed-use project at Interstate 15 and Magnolia, will eventually add 535,000

square foct of office space to Corona. The Crossings at Corona has completed Phase I and is

proposed at build-out for l .2 million square feet of retail, restaurant and entertainment space.

Hidden Valley Plaza at Interstate 15 and Hidden Valley Parkway ha'> 300,000 square feet of

retail space. Dos Lagos is in the process of building a 650,000 square foot lifestyle center along

with residential units. Office space demand was previously limited to local professionals within

Corona and offices were typically interspersed among the retail projects along strip commercial

corridors, however, with the substantial amount of growth in Corona over the past IO years, there

are several new Class A office buildings.

Eastvale opened its first two retail developments near the intersection of J.]5 and Limonite in

2004 which will serve the subject property. Eastvale Gateway's first two phases opened at the

northeast comer of Limonite and Hamner Avenues with a Home Depot and Vons and in-line

space in the winter of 2003. The project encompasses 75 acres and is proposed a<; a

neighborhood, community and entertainment center. The second phase includes a Best Buy and

Target and additional community stores. The third phase of construction which includes a

theater complex is now under construction. In addition, Cloverdale Marketplace is located at the

southwest comer of Limonite (name changes to Cloverdale at site) and Hamner Avenue. A

Ralphs Supermarket anchors Cloverdale Marketplace. The majority of in-line space within both

centers is leased. There is a third neighborhood retail development recently opened. Vernola

Market Place located at the southeast comer of 1-15 and Limonite Avenue is anchored by Lowes

Home Improvement Store, Michaels, Bed Bath and Beyond, Payless Shoes, Ross and Petco. The

first stores opened in July 2007. There are two additional new neighborhood centers under

Summary Appraisal Report - Complete Apprairnf Community Faciluies Dirtric1 No JO of1he Jurupa Community Stl'VJCes District Bruce W. Hull & Associates, Inc Pa,:e IJ

construction in Eastvale along Archibald. On a more macro level, there are two major regional

shopping centers north of Eastvale along Interstate 215 approximately 10 miles north of

Eastvale. The first, Ontario Mills Mall which opened in 1996, is a regional outlet mall while the

second, Victoria Gardens which opened in 2005, is the new premier regional mall in San

Bernardino County.

Summan

The Corona area has been in transition over the past 15 years. Previously, a first-time

homebuyer area offering an affordable housing alternative to Los Angeles and Orange Counties,

Corona now has a significant nwnber of executive homes. The average household income is

substantially higher than that of the County. The location of Corona, midway between Orange,

Los Angeles and San Diego Counties, make it an excellent location for busines.s and distribution

of product, however, the City is essentially built out.

Eastvale has been transitioning from dairy farming to new residential development over the past

ten years. The area still has some land available for development, however, finding the land is

~ becoming more difficult for the builders as this area becomes built out. The first three retail -N projects have opened and were well received by the community while additional neighborhood

centers are under construction. New residential homes are still selling within the Eastvale area. however, at much slower rates than two years ago and at lower prices.

Summary Appraisal Reporl - Complete ApPraisal Community Facilities Di.;trict No. 30 of tire Ju.rupa Community Services District Brw:e W. Hull & Associate$, lru::. Page 16

IMMEDIATE SURROUNDINGS

l11e subject property is located in the area known as Eastvale, north of the cities of Norco and

Corona and south of the City of Ontario. Until the past 10 years, the primary land use was

agriculture with an emphasis on dairy fanning. In the mid- l 990s, planning for the Eastvale

Specific Plan evolved which began to change the neighborhood from dairy and fanning to

residential land use. There are still several ranches and dairy farms located in the immediate

vicinity ofCFD No. 30.

There are several large communities being developed in the area. ]bese new communities

include The Orchard, Brookdale Terrace, Quail Run, Pheasant Run, Sterling Valley,

Foxborough, Stone River Ranch, Citrus Ranch, Cimarron Trail, Parkside, Carousel Park,

Emerald Valley, Cloverdale Fanns, Rivermist, Meadowside, Copper Ridge, Silver Ridge and

Cimarron Ranch.

There are new neighborhood shopping centers which serve the subject property. The first,

known as Eastvale Gateway, opened its first and second phases of development at the

intersection of I-15 and Limonite. Eastvale Gateway's third phase of construction which

includes a theatre complex is now wider construction. The project encompm;ses 75 acres and is

anchored by Home Depot, Von's Supermarket, Best Buy and Target. Across Hamner Avenue

from Eastvale Gateway is a second neighborhood shopping center anchored by a Ralphs

supermarket with a substantial amount of retail space which appears to be l 00 percent leased. A

third center being marketed as Vernola Market Place recently opened at the southeast comer of

I-15 and Limonite Avenue. Vernola Market Place is anchored by Lowes Home Improvement

Store and opened its first stores in July 2007. There is an additional neighborhood center located

along Archibald A venue at Schleisman Road.

The subject is located west of Archibald A venue along the north side of Schleisman Road, near

the San Bernardino County line, The tract is bordered to the west by the Cucamonga Creek, to

the south by Schleisman Road, to the north and east by new residential development. Access is

considered to be good via 1-15 to Limonite Avenue, west to Archibald Avenue and south to

Schleisman Road.

Summary Appral$al Report- Complete Appraisal Commumty Fm:,/i11es District No. 30 af1he Juri,pa Community Services District Bn,ce W. !lull & Associates, Jnc. Page 17

9"

RIVERSIDE COUNTY HOUSING MARKET

In reviewing the County's housing market, a study of population and economic growth needs to

be conducted.

As of January l, 2007, the County had a population estimate of 2,031,625, which is a 3.3 percent

increase from 2006 and an average annual percentage of approximately 4.2 percent over the

previous five years. Originally, an influx of residents from Orange County looking for more

affordable housing was instrumental in population increases in western Riverside County.

Current growth is from Orange County and North San Diego County where prices have

increased and buyers are attracted to more affordable housing.

The recession of the early 1990s impacted the I~ 15 corridor with a longer recovery period than in

other areas of the Inland Empire (San Bernardino and Riverside Counties). The growth in the

Inland Empire housing market was slower than expected during the recovery years of 1995

through 1997, however, the resurgence in land sales between 1997 and 2005 caused an increase

in population and subsequent homebuilding. Between 1997 and 2000, housing appreciated at a

"'""' good pace with a slowdown in 2001 followed by record appreciation between 2002 and 2005, w Th~ year 2006 saw a "cooling off' in both sales and the rapid appreciation of the past few years,

while thus far 2007 has seen a further slowdown in sales and price decreases.

Economic growth in the Riverside-San Bernardino area has been strong, with over 51,400 new

jobs added in 1999, over 35,000 new jobs added in each of the years 2000 and 2001 and 28,000

new jobs in both years 2002 and 2003. In 2004, over 18,000 new jobs were added while in each

year 2005 and 2006 new jobs grew by 25,000. Per the State of California Economic

Development Department, the year over all total non-farm employment in the Riverside-San

Bernardino area (June 2006 to June 2007) rose by 44,900, a growth rate of 3.5 percent. In

contrast to the balance of Southern California., the Inland Empire has experienced over 19 years

of _employment growth de~-pite the early 1990s recession and the job losses in the rest of the

Southern California region. Since the mid 1990s the Inland Empire experienced several major

economic events that facilitated job growth, including construction of the Ontario Mills Mall,

The Promenade in Temecula., Victoria Gardens, the Ontario Airport expansion, openings of the

Summary Appraisal Report - Complete Appraisal Community Facilities District Na. 30 of the Jurupa Community Sen,ices Dish'ict Bruce W. Hull & Associates, Inc. Page 18

California Speedway and Diamond Valley Lake and a major expansion at the University of

California, Riverside.

The unemployment rate for the MSA was 5.6 in June 2007, down from 6.0 percent in June 2004,

however, up from the year-ago estimate of 5.0 percent This compares with an unemployment

rate of 5.2 percent for California and 4,7 percent for the nation during the same period. The

unemployment rate was 5.7 percent for Riverside County and 5.4 percent in San Bernardino

County.

l.JCLA Anderson reported in January 2007 ("Housing is Still Off Balance" - U.S. News and

World Report, January 15, 2007) residential real estate will be a moderate to poor investment in

2007 with median prices for new homes declining from five to IO percent nationally and existing

home prices treading water at best. In reviewing numerous publications, most forecasts are for

home prices in the Inland Empire to decline between five and seven percent in 2007.

The most recent UCLA Anderson report ("U.S. Economy Not In a Recession, "But It Is

Certainly Close" June 19, 2007) states that the national economy is not in a recession, though

the group's economist, now say, the economy is "certainly close" to recessionary conditions.

The foreca:;t calls for the housing induced sluggishness in the U.S. economy to last into early

2008. In California, weakness in the real estate sector will finally spill over to the job market as

the combination of job losses in construction and real estate finance strain overall payroll job

growth in California to less than one percent for the next five quarters. In the California forecast,

UCLA Economist Ryan Ratcliff states that California has weathered the beginning of the real

estate slowdown better than originally believed, however, he believes this is just a postponement

of the inevitable, and in the final two quarters of 2007 and the beginning of 2008, job losses will

occur. Ratcliff also acknowledges the impact of the subprime meltdo\.\'fl on California. He

believes the collapse of the subprime mortgage market has implications ranging from the

integrity of international financial institutions to job creation in Southern California. The key

questions which are unknown include whether the tightening of lending standards will further

depress home sales and whether or not an increase in foreclosures will bring home prices down

further as bank sellers generate substantial pressure on prices. The California forecast calls for

job growth in the State to slow through the middle of 2008.

Summary Appraisal Report - Complete Appraisal Community Focii,/ies District No. 30 ofrhe iu~upa Communuy Service:; District Broce W. Hull & Ass,,c1aMs, inc Page 19

9" --'"

As- mentioned, the one unknown factor is how foreclosures will factor into the housing market

downturn. According to DataQuick, we are in "uncharted territory" in the foreclosure market.

New mortgage structures of the past five years (i.e. buy-downs with variable interest rates, no

interest for beginning years and zero percent down payments) may create a much weaker market

over the next few years. This is beginning to occur as foreclosures are at record highs and home

prices decline. According to the Press Enterprise ("Foreclosure Rate spikes in Region" -

June 12, 2007), Riverside County ranked fourth among California counties in number of

foreclosures, one foreclosure for every 128 households. In May, 2007 there were 4,550

foreclosure filings (which include notices of default, notices of trustee sale and lender

repossessions), more than four times the filings recorded in May 2006 (1,066),

Co.ncessions in the Eastvale area have grown over the past 18 months. ln early 2006 some

projects began offering $5,000 to $10,000 in financing incentives. For the past year incentives

and concessions have grown and currently it is common to see $ l 00,000 or more in total

concessions (including options, upgrades, cash incentives, lender incentives, etc.). Some

builders are reducing prices rather than offering concessions while others have kept their prices

high and deal with buyers on a case-by-case basis. Actual tracking of concessions is difficult as

some builders transfer the property at the price which includes lender concessions, upgrades and

options which can total $100,000 or more. According to Patrick Duffy, a principal with Metro

Intelligence and previous managing director of Hanley Wood Market Intelligence (Orange

County Register, August 8, 2007), "many times the actual sales prices - not asking prices - are

masked by various incentives that are difficult to track. This issue is an ongoing challenge for

our industry".

We have reviewed the Market Pointe Realty Advisors ("Market Pointe") July 2007 Residential

Trends Executive Swnmary for the Western Riverside County Market which includes the

communities of Banning/Beaumont, Corona/Norco, Hemet/San Jacinto, Lake Elsinore,

Perris/Sun City, Riverside/Moreno Valley and Temecula/Murrieta. The subject property is

located in the Corona/Norco submarket.

According to Market Pointe, there were 375 new housing projects at the end of the second

quarter in Western Riverside County, eight less than the all time high of 383 last quarter. The

overall new home sales volume (2,524) was down 13 percent from last quarter and the second Sum171a1'}' Appraisal Repcrt - Complete Apprats<t/ Communiry Facilities Disfrkl Ne. 30 cf the Jurupa Communiry &n,ices DUtrict Bruce W. Hull & Auociall!s, Inc. Page 20

lowest quarter since the fourth quarter of 2001. Within Western Riverside County, the current

average rate of absorption for detached projects is 0.57 sales per week (compared to 0.80 sales

per week the previous quarter) while for attached projects the average is 0.63 sales per week

(compared to 1.37 sales per week the previous quarter). Overall new homes sales in the

Corona/Norco submarket captured 19.8 percent of the market, the highest percentage in Western

Riverside County.

The overall weighted average sales price in Western Riverside County as of second quarter 2007

decreased 7.0 percent from the previous quarter. In addition to the stated downturn, :'viarket

Pointe docs not track concessions in the marketplace, thus the decrease in pricing is considerably

higher. Sales of new homes are still occurring, however, at a much slower rate than in the pa,;t

three or four years. Lingering problems include the decline in real estate prices coupled with the

subprime issues along with the high cost of doing business in the state coupled with increases in

interest rates and in energy, labor and materials costs.

According to Market Pointe, the second quarter overall weighted average new detached home

sales price in Western Riverside County decreased 6.2 percent from the first quarter 2007 (and a

decrease of 6.7 percent from one year prior) to $462,678, however, it should be noted these

prices do not include concessions, which are currently prevalent in the market place. In the case

of the Corona/Norco market, it is not uncommon to have up to $100,000 or more in concessions;

therefore a more realistic interpretation of the data would suggest that prices have decreased

more significantly. The Corona/Norco submarket indicated an overall weighted m'erage sales

price of a new detached home was $658,437, which was an increa,;e from the first quarter (6.1

percent) and a 0.3 decrease from the previous year. For the attached product in the same

submarket, the overall weighted average sales price was $312,945, which is a decrease of I 1.8

percent from first quarter 2007 and a decrease of 18.5 percent from one year prior. Factoring in

concessions suggests an actual drop in detached home prices and an even larger drop for attached

homes in the Corona/Norco submarket.

We have also reviewed Hanley Wood Market Intelligence's New Home Executive Summary for

Second Quarter 2007. Hanley Wood's statistics encompass all of Riverside County while

Market Pointe's statistics encompass Western Riverside County as previously defined. In

addition, their sub-markets differ. Per Hanley Wood, the Northwest County sub-market which Summary Appraisal Reper/ - Ccmp{ete Appraisal Community Facihtics District No. 30 of the Jun.pa Ccmmunily Services D1$trict Bruce W. !lull & Associates. Inc, Page 2 l

includes the areas of Corona, Riverside, Eastvale and portions of the I-215 corridor, accounts for

approximately 23 percent of the new home sales within the County market over the past 12

months.

Inventories within Riverside County are rising rapidly. As of the end of the firs~ half 2007, there

were 478 active detached new home projects, 94 of which were located in the Northwest sub­

market (or 19 percent). Per Hanley Wood, as of the end of second quarter 2007, there was a

standing and speculative inventory of 3,640 detached writs countywide (standing inventory and

units under construction) compared to an inventory of 2,844 at second quarter 2006. Sales of

new-detached homes within the County during second quarter 2007 decreased significantly from

the prior year. Per Hanley Wood, through the second quarter 2007 there were 2,680 sales in

Riverside County for new-detached homes as compared to 4,481 sales during second quarter

2006, a reduction Of over 40 percent. Based upon second quarter 2007 sales of 2,680 new­

detached units, the current inventory of 3,640 units suggests an approximate 16-week supply, up

from a 12-week supply at end of first quarter 2007 and up from a seven-week supply one-year

prior.

9" "'""' According to Hanley Wood, the subject sub-market had a 549-unit inventory of detached homes V, as of the end of second quarter 2007 (standing inventory and units under construction) compared

to a 471-unit inventory as of the end of second quarter 2006. Based upon second quarter 2007

sales for detached units of 449, the current inventory suggests an approximate 14-wcek supply,

up from a seven-week supply at the end of the first quarter 2007 and up from a seven-week

supply one year ago. The data is showing that homes are still selling, howe•·er, at drastically

slower rates than the previous few years.

According to Hanley Wood's statistics, there were sales of 449 detached homes within 94 active

detached projects in the northwest submarket during the second quarter of 2007. This equates to

an .average of 4. 77 sales per quarter per project or approximately 0.40 sales per week per project,

a slowdown from 0.75 sales per week per project during the first quarter 2007. The subject

project has closed 157 of their 183 proposed homes. An additional 13 homes are in escrow.

In summary, both the County and the subject sub-market have seen a decrease in sales and prices

and there is a more cautious attitude of buyers in the marketplace. This is seen in rising

inventory and more concessions being offered. The year 2005 saw a slowdown in appreciation,

which indicated the torrid increase in prices has abated while 2006 saw a significant increase in

S11mmary Appraisal Report - Comp/tit Appraisal Commumly Facihties District No. 30 of the Jun;pa Comm11nity Services District Broce W. H11/I & Associates, Inc Page 22

concessions with price decreases occurring. Thus far, 2007 has seen larger incentives, lower

prices and slower sa1es from previous years first quarters. Price still appears to be a major factor

in attracting buyers to the Riverside County marketplace with approximately 56 percent of new

detached home sales in the under $600,000 price range. In conclusion, uncertainty is clouding

the 2007 forecast, however, most are in agreement sales will stay slow and base prices will

decrease. It appears that prices have accelerated their decline in the past several months. In the

past builders had provided concessions as opposed to "actual" price reductions. Now both

appear to be occurring in the marketplace. Nevertheless, population increases and job growth

continues and thus housing growth, while at much slower rates than previous years, will

continue.

Summary Appraisal Reporr - Complete Appraisal Community Fac,/,/ies Distri.cf ,Va 30 qf1he Jurup<1 Community Services DIStrlcl Bruce W Hull & Associates, Inc Page 23

COMMUNITY FACILITIES DISTRICT NO. 30

CFD No. 30 was formed in 2006 when the Board of Directors of Jurupa Community Services

District ("JCSD") adopted Resolution No. 1652 on March 13, 2006. The proposed types of

public facilities that v.'lll be provided through the issuance and sale of bonds ofCFD No. 30 are

as follows:

Park and Recreation Facilities - JCSD will receive funds in the approximate amount of $1,569,600 for financing the design, construction and acquisition of parks and park and recreation facilities which are necessary to enable CFD No. 30 to provide for the needs of the residents ofCFD No. 30.

Water and Sewer Facilities - JCSD will receive funds in the approximate amount of $2,179,530 for financing the design, construction and acquisition of master plan water system facilities, including capacity and existing facilities, and master plan sewer system facilities, including capacity and existing facilities and sewage treatment and disposal capacity.

School Facilities - Pursuant to the Joint Community Facilities Agreement between JCSD and the Corona-Norco Unified School District (''CNUSD"), proceeds of the CFD No. 30 bond issue in the approximate amount of$2,646,947 will finance the design, construction and acquisition of public school facilities of CNUSD which are necessary to enable CNUSD to provide for the educational needs of future residents ofCFD No. 30.

Incidental Expenses Reserves Underwriter's Discount and Capitalized Interest -In addition to the above improvements, there are incidental expenses in the estimated amount of $249,882 and reserves, underwriter's discount and capitalized interest in the estimated amount of $1,289,272, which will be funded by the bonds.

The above amounts were taken from the Report of Responsible Officer for CFD No. 30 dated

May 8, 2006. The ammmts are subject to change. The most recent estimates are for water and

sewer improvements in the amount of$2,496,799, school facilities in the amount of$2,496,491,

park and recreation facilities of$1,569,600 and incidentials of$993,49J for a total bond amount

estimated at $7,470,000., The total bond amount authorized for CFD No. 30 is not to exceed

$10,000,000.

Summary Appraisal &port - Complete Appraisal C0111111unuy Facif11iu District No. JO of VII! Jun.pa C0111m1mity S,;n,ice:; Di:;tricl Brua W. Hull & As:;acia/e:;, Inc PagcU

SUB.JECT PROPERTY DESCRIPTIO:,iS

The subject property consists of 183 proposed single-family detached homes being developed as

Stoneridge by Pulte Homes. The neighborhood is described below.

Location:

Legal Property Description:

Property Owner:

Assessors Parcel Nos.:

Property Taxes:

Three-Year Sales History:

Size and Shape:

Zoning:

Entitlements:

Topography:

North side of Schleisman Road west of Archibald Avenue in unincorporated Riverside County

Lots 1 thru 183 of Tract 31803 in unincorporated Riverside County

Individual Owners as to lots 9-117, 119-128, 130-141, 144-148, 153-155, 159-160, 166-179, 181 and 183 of Tract 31803. Pulte Home Corporation as to the remainder of the Jots.

144-470-001 thru 033; 144-471-001 thru 037; 144-480-001 thru 016; 144-481-001 thru 31; 144-482-001 thru 01 l; 144-490-001 thru 008; 144-491-001 thru 035; 144-492-001 thru 012.

We have reviewed a 2006/07 Property Tax Invoice for the subject property prior to the assessor dividing the property into single family lots. The bill refers to APN 144-020-007 (52.78 acres) and is for $219,710.12. This is based on an assessed value of $20,400.000 with a tax rate of l .03342 and special assessments of $8,912A4. It should be noted that the special assessments do not include CFD No. 30.

On January 15, 2005 Pulte Home Corporation purchased the property from Van Ryn Investments et al for $20,000,000. In addition, there have been 157 transactions to individual homeowners.

Tract 31803 is rectangular in shape and contains 52.55 gross acres per the tract map which includes a 5.02 acre park/open space !ot.

Tract 31803 is zoned for RI (single-family dwelling) per Change of Zone No. 6909 which was adopted January 11, 2005.

rhe subject property is encompassed by Tract Map 31803 allowing for 183 lots with a minimum lot size of7,200 square feet. Tract Map 31803 recorded on May 31, 2006.

The subject property has been mass graded and had original topography that was generally level at street grade. The drainage for the lots has been designed to flow into engineered storm drainage systems.

Summary Appraisal Reper/ - Complete Apprai£a/ Commumty Facilines Di:;tricl No. 30 of the Jurupa Community Service£ Dist,ict Bruce W. Hult & Associates, Im: Page 25

Soils Condition:

Seismic Information:

Environmental Concerns:

We have reviewed a Compaction Report, Building Pad Areas and Site Fills, Lots 1-183 of Tract 31803 prepared by LOR Geotechnical Group, Inc. of Riverside and dated December 27, 2005 (revised January 25, 2006). The site was previously a dairy. The property was graded betvreen September 12, 2005 and December 15, 2005. The report states that the upper 5-17 feet of soils were removed and replaced with engineered compact fill. The report concludes that the building pad areas should provide adequate support for the proposed structures constructed in accordance with the recommendations. It is the appraisers' understanding that all recommendations contained within the reports were adhered to during construction.

It is an assumption of this report that the soils are adequate to support the highest and best use conclusion. This is evidenced by County inspectors on site throughout construction.

The property is not located within an identified earthquake study zone. There are no known faults on the site and no evidence of faulting has been encountered on the site,

We have reviewed a General Biological Resources Assessment of Tract 31803 prepared by AMEC Earth & Environmental, Inc. of Riverside and dated July 21, 2004. The report concluded there were no native habitats on the site and no sensitive plants were observed on the property. Two sensitive wildlife species were observed (Logerhead Shrike and a Tricolored Blackbird), however, they are species of special concern and are not threatened or endangered. Burrowing Owl was not observed during the surveys. According to Environmental Assessment No. 39346 covering Tract 31803, no Burrowing Owl was found; the project does not lie within the fee boundary for the Stephen's Kangaroo Rat; and, the project is not within a criteria cell unit of the Western Riverside County Multi-Species Habitat Conservation Plan.

In addition we have reviewed environmental pennits including a Notice to Proceed from the Army Corps, a Santa Ana Regional Water Quality Control Board Section 401 Water Quality Certification (2005-01265-JPL), a nationwide permit authorization from the Department of the Army; a Certification of Compliance with the Department of the Army Nationwide Permit and a California Department of Fish and Game Section 1602 Streambed Alteration Agreement (1600-2005-0077-R6) on the subject site.

It is the appraisers' understanding that any recommendations were adhered to during grading and construction of the site. This is evidenced by

Summary Appraisal Report - Complete Appraisal Communily Fadhties D<.rlricl No. 30 of the Jurupa Community Sen,ices District BruCe W Hui/ & Associates. Inc. Page 26

County inspectors on site throughout construction as well as certificate of occupancy permits.

Methane Issues: The subject site was previously a dairy. We have reviewed a post grading subsurface Methane Gas Investigation for Tract 31803, Lots 1-183 prepared by GeoKinetics oflrvine, California and dated January 18, 2006. All 183 lots were tested. There were 52 lots where methane was detected. Mitigation was required for these lots. The report concludes that four lots (25, 27, 71 and 77) needed Level A mitigation (installation of 60-mil liquid boot barriers, sub-slab vents, utility conduit seals and utility trench dams); 20 lots needed Level B mitigation (12-mil barriers, utility conduit seals and utility trench dams); while the remainder of the lots required Level C mitigation (installation of utility conduit seals and utility trench dams.

It is the appraisers' understanding that the recommended mitigation was completed during construction. This is evidenced by County inspectors on site throughout construction of the property.

Flood Information: Per FEMA Map 060245 0680A dated April 15, 1980 the property is not located within a 100-year flood plain.

Easements and Encumbrances: We have reviewed Preliminary Title Report No. 31803-RV (HLS)

prepared by First American Title Company and dated July 24, 2007 for the Pulte owned lots within Tract 31803. The exceptions are as follows:

Item Nos. 1 thru 3 pertain to property taxes and supplemental property taxes, Item No. 4 pertains to ingress and egress from Schleisman Road. Item No, 5 is in regards to the deferment of payment of drainage fees. Item No. 6 states the property is located in the Eastvale Area drainage plan. Item Nos. 7, 9, 12 and 13 refer to easements. Item No. 8 refers to a Memorandum of Agreement for Permission to Grade. Item No. 10 pertains to CC & Rs on the property. Item No. 11 is in regards to a notice of non-adversarial procedure on the property. Item No. 14 pertains to any reservations, exceptions, easements, conditions, covenants or similar matters not yet appearing in the public record but arising from the grand deed.

It is an assumption of this appraisal report that the subject lands are free and clear of any liens and/or encumbrances other than CFD No. 30.

Summary Apprmsa/ Report - Complete Appraisal Communfly Focil,tics Distric/ No. 30 oftlw. Jwupa Communuy Services D1$lrlct Bruce W Hull & Associates, Inc. Page27

Utilities:

Streets/ Access:

All normal utilities serve the subject site by the following companies:

Electrical: Natural Gas: Sewer/Water: Schools: Telephone: Cable:

Southern California Edison Company The Gas Company Jurupa Community Services District Corona Norco Unified School District AT&T Charter

Access to the subject project is via 1-15 to Limonite Avenue/Cloverdale Road west to Archibald Avenue south to Schleisman Road and west to the subject property.

1-15 is a major north/south freeway, which provides access to both international borders with Mexico and Canada. 1-15 runs parallel to II runner A venue at the subject project.

Limonite Avenue/Cloverdale Road has on/off ramps at 1-15. To the east the arterial is known as Limonite A venue providing access to the areas of Mira Loma and Jurupa. To the west the arterial is known as Cloverdale Road and provides access to the area known as Eastvale.

Archibald Avenue is a north/south access street which, north of the subject, enters in to San Bernardino County while to the south it provides access through Eastvale and merges with River Road in Corona.

Schleisman Road has been recently upgraded to one of the main arterials through Eastvale providing access to Chino to the west. Internal streets within the project include Gypsum Creek Drive, Stonybrook Court, Emerald Canyon Court, Painted Canyon Drive, Pebble Canyon Court, Ruby Canyon Drive, Sleepy Creek Drive, Quarry Creek Court, Colebrook Drive, Boulder Creek Drive, Rock Canyon Court and Dalebrook Drive,

Current Condition: Tract 31803 has been developed into 183 single-family detached lots, however, there is some ongoing offsite work associated 'With the project. There are four completed model homes and 175 production homes over 95 percent complete (157 of which have closed escrow to individuals). Of the remaining 18 homes over 95 percent complete, seven are in escrow and 11 are available for sale (standing inventory). lbere are an additional four production homes under construction (under 95 percent complete) which is the final build-out phase surrounding the models. Within the project, all 183 homes have been released for sale (including the four model homes), 157 are closed, l3 are in escrow and 13 arc available for sale.

Costs to Complete: We have reviewed costs from Pulte Home Corporation on Tract 31803 along with reviewing costs spent to date. Pulte Homes is continuing work

Summary Appraisal Report - Complm Appraisal Community Faci/Jt/es Distncl No. 30 of the J,,n,pa Community Services District Bruce W. Hull&: As.rodale:;, Inc. Page28

Improvement Description:

on a bridge (Schleisman Road) over the adjacent flood channel along with finalizing improvements to Schleisman Road. According to Pulte Homes, there is an additional $1,800,000 remaining to be spent on these improvements (non- CFD improvements).

Stoneridge has eight plans (four of which arc modeled) with base sizes ranging from 2,412 to 4,313 square feet. The homes arc of Early California architecture. The homes are either one or two story with two and three-car garages, concrete tile roofs, block walls, front yard landscaping, roll-up garage doors, finished interior garages, panel interior doors, bullnose comers, gourmet kitchens with granite countertops, Interior laundry and master bedrooms, some with sitting areas Current asking prices are from $520,000 to $625,000 with three percent concessions ($15,600 to $18,750) with Pulte Mortgage. The most recent (June/July) actual sales prices range from $556,490 to $736,090 which include upgrades and options. The plans are detailed below:

Room Floors/ Bldr. Ind. I

Plan Count Parking Sq. Owned Owned Ft. I

1 4/2 1/ 3 2,412 0 14 I

2 5 I 3 1/ 3 2,625 4 17 '

3 5/4 l / 2 2,825 2 8 4 5/4 2/3 3,242 4 14 5 614 213 3,242 3 18 I 6 6/4 2/3 3,376 2 19 I

7 614.5 2/3 4,057 3 29 I

8 713.5 2/3 . 4,313 4 ' 38 7 Plans 2, 5, 7 and 8 are modeled.

Summary Apprai.,af Reporl - Complete Appraisal Community Facililies Dis met No 30 of the Jurupa Community Services Disfm;/ Bruce W. Hull & Associatts, Inc. Pagt 29

HIGHEST AND BEST USE ANALYSIS

The highest and best use is a basic concept in real estate valuation because it represents the

underlying premise (i.e., land use) upon which the estimate of value is based. In this report, the

highest and best use is defined as:

"The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible and that results in the highest value'"'

Proper application of this analysis requires the subject property to first be considered as if vacant

in order to identify the "ideal" improvements in terms of use, size and timing of development

secondly, the existing improvements (if any) are compared to the ideal improvements to

detennine if the use should be continued, altered or demolished preparatory to redevelopment of

the site with a more productive or ideal use.

In the following analysis, we have considered the site's probable use, or those uses that are

physically possible; the legality of use, or those uses that are allowed by zoning or deed

~ restrictions; the financially feasible use, or those uses that generate a positive return on -\0 investment; and the maximally productive use, or those probable permissible uses that combine

to give the owner of the land the highest net return on value in the foreseeable future.

Physically Possible Uses

Tu subject property consists of a 52.55-acre parcel of land located in an unincorporated area in

the County located between the Cities of Corona, Norco and Ontario. The subject property is at

street grade of the surrounding streets with a generally level topography. The western boundary

is the improved Cucamonga Creek Flood Control Channel. The parcel has been developed into

finished residential lots with a minimum size of7,200 square feet.

An engineered drainage system have been designed to alleviate any potential flooding problems

and to control project runoff. It is an assumption of this report that the soils are adequate to

support the highest and best use conclusion and that there are no environmental issues.

~The Appraisal of Real Estate, 12th Edition,

Summary Appraisal Report - Complete Approi.ral Commumty Facilltil!S District No. JO of the Jrmipa Community &rvicu Di.strict Bruce W. Hill! & Associates, Inc. Page 30

All standard utilities serve the subject property. The neighborhood is made up of vacant lands,

dairy farms and new residential development with interspersed neighborhood commercial. The

neighborhood is transitioning to mostly residential use with some interspersed commercial.

Access is via I-15, with the major access streets being Limonitc/Cloverdale Road, Archibald

A venue and Schleisman Road.

Based on the physical analysis, the size, access and topography make the subject property

physically suited for numerous types of development, however, the grading and development

that has occurred on the properties appear to suggest single~family residential use. In addition,

the surrounding uses of residential development appear to make the subject properties more

suitable for residential use,

Legality of Use

The subject properties arc located within the County, which is the entity responsible for

regulating land use through the implementation of a general plan and zoning ordinance. Per the

County, the subject property is zoned Rwl allowing for 7,200 square feet minimum residential

zoning. In addition, Tract Map 31803 has been recorded on the property allowing for J 83 lots

with a minimum lot size of?,200 square feet.

The current entitlements are consistent with the current zoning. Based on the legality of use

analysis, the type of development for which the subject properties can be utilized is narrowed to

residential use. This is consistent with the findings ofthe physically possible uses.

Feasibility of Development

The third and fourth considerations in the highest and best use analysis are economic in nature,

i.e., the use that can be expected to be most profitable. The late l 980s were characterized by

rapidly escalating prices, good pre-sale activity and a strong resale market drawing move-up

buyers. The early l 990s brought a recession with home sale prices falling from their previous

levels and sales volume dropping dramatically while the later half of the l 990s and early 2000s

saw prices rise substantially with significant appreciation in the subject marketplace. Although

the nation's economy saw a mild short~tenn recession in 2001, the housing market in the subject

area was not affected. The Federal Reserve reduced interest rates several times throughout 2001

to 2004, which favorably impacted housing sales, however, then increased them 17 times

between June 2004 and midw2006. Prices, which rose in double digits during 1999 and 2000, Summary Appraisal Report- Complete Appraisal Community Facilities District No 30 of the Jurupa Community Services District Bn;,;e W Hull & Assocuitu, Inc Page 31

grew at a slower rate in 2001 and then increased double-digit rates again from 2002 and into

2005. In the subject market, the latter half of 2005 saw a "cooling" of price inflation with

appreciation still occurring in most areas, however, at a lesser rate than the previous few years

an<;l sales begin to slow. The year 2006's price appreciation slowed considerably with

concessions appearing in the marketplace and some signs of a price decrease and sales further

slowing. In order to combat the sales slowdown, non-conventional financing rose during 2005

and 2006. Thus far in 2007, concessions are significantly larger and price decreases are evident

and the non-conventional financing of the past few years appears to be affecting new home sales.

Sales of new homes in most of Southern California have slowed. Current interest rates, although

higher than historic lows, are still in the seven percent range for 30-year fixed rate mortgages.

The emergence of non-conventional financing such as 40-year mortgages, fixed rates for five

years, and interest only loans kept new home payment.s within reach of buyers during 2005.

However, during 2006, and thus far in 2007, the higher interest rates along with the more limited

availability of non-conventional financing appear to be two factors in slowing new home

purchases. Additionally, the supply of new homes for sale has grown creating the need for

concessions in the subject marketplace. Buyers are carefully evaluating their options as the 0:, N market has become a buyers market for the first time in several years. The new home market in

0 the subject area is still considered positive, mostly due to the gro'Wth in the Riverside area.

MaximaJly Productive

In light of the projected population gro-wth in the area, it is our opinion that the subject property

is feasible for a single-family residential neighborhood with an adequate profit level to entice an

experienced builder.

Highest and Best Use Conclusion As If Vacant

The final determinant of highest and best use, as vacant, is the interaction of the previously

discussed factors (Le., physical, legal, financial feasibility and maximum productivity

considerations). Based upon the foregoing analysis, it is our opinion that the highest and best use

for the subject properties is for residential development.

Summary AppraMal Report - Complete AppraMal Community Facilities Distr«:I No. 30 of tk Ji,rupa Community Services D11trict Br1'ce W. Hull & Aswciotes, Inc. Page 32

Highest and Best Use - As Improved

The subject property is being marketed as Stoneridge by Pulte Homes. Stoncridge has 183

proposed homes \.\11th all 183 homes released..170 homes sold (157 closed, 13 in escrow), 179

homes over 95 percent complete (including four model homes) and the final four production

homes under construction (under 95 percent complete). Asking prices within Stoneridge range

from $520,000 to $625,000. CU1Tent concessions are being offered at three percent of the base

price or approximately $15,000 to $18,000 if using Pulte Mortgage.

Per Hanley Wood, the average price for a new detached home in the Northwest sub-market as of

the end of the second quarter 2007 was $581,250, which is within the price range for Stoneridge.

The market response for the project has been good with 170 homes sold since May 2006 for an

average weekly sales rate of 2.65 homes, higher than current average sales rates within the

market. Within the project the models have been released and the final four homes are under

construction. All of the homes are of good ·design and appear to be of good quality

workmanship. Although new borne sales slowed considerably in 2006 and thus far in 2007,

based on the sales rates for the subject project along with the quality and condition of the homes,

it is our conclusion that the highest and best use for the subject property is for the continued use,

as improved.

Summary Approisal RepMt - Complete App~a,'1al Community Fac1/i1ies Dmrict No 30 of the Jurup,1 Commiinity Services District Bruce W Hull & Assoc/a/es, Inc Page 33

MARKET DAT A DISCUSSION

The Sales Comparison Approach will be used to value the subject property. This approach

compares similar properties that have recently sold or are in escrow. In determining the value

for the currently active projects, a unit of comparison needs to be addressed. For single-family

detached lots, the lots are typically sold on a finished lot basis. lnat is, the sales price is

detennined by a finished lot value and then the remaining costs to develop the property to a

finished lot condition are taken into account in the sales price. Therefore, in determining a

,;:urrent market value for the lands, the current condition of the lots will be taken into

consideration. A home wider construction (under 95 percent complete) v.ill be valued as a

finished lot rather than attribute value to a partially complete improvement. In the case of the

completed (over 95 percent complete) builder owned homes, the homes will be valued using the

Sales Comparison Approach to value followed by a Discounted Cash Flow (''DCF") Analysis

due to the single ovmership. In the case of the individually owned homes, concluded base price

will be used. Due to the buyers typically purchasing some options, this will be considered to be

a minimum market value. All of the value conclusions will take into consideration 0:, N improvements to be funded by the bonds of CFD No. 30 and the lien of CFD No. 30. -

In the Sales Comparison Approach, market value is estimated by comparing properties similar to

the subject property, which have recently been sold, are listed for sale, or are under contract (Le.,

for which purchase offers and a deposit have been recently submitted). In addition, due to the

single ov,rnership of the model homes and builder-o'WJled production homes, a DCF will be

considered. The DCF will take into account the fair market value of the completed homes

(utilizing the Sales Comparison Approach), the marketing and carrying costs associated with

selling off the homes, a profit due to the developer of the homes, and a discount rate reflecting

both the risk associated with selling off the homes and the time value of money during the

estimated absorption period,

The valuation will be presented as follows. First, a discussion of the single-family detached lot

market data will be given. Each of the comparable market data (finished lot basis) will be

detailed along with a comparison discussion of their relationship to the subject property. This

analysis will be followed by a lot-value conclusion. Next, the merchant builder owned homes

will be valued, followed by a fmal value conclusiOn for the lots in their "as is" condition. Summary Appraisal Report - Complete Appraisal Community Facilitks Dis1rlc1 No. 30 of tNI Jun,pa Community Sen.,ice$ District Bniu W. Hi,J/ & A:.wcW/e~-, Inc. Page 34

Finally, the individually owned homes' minimum value will be reported and analyzed. A

summary of the final value conclusions for the subject properties will then be given.

Market Data Discussion - Detached Residential Lot.<i

We have searched the area and found the nine transactions summarized in the Addenda to be

most comparable to the subject properties. All of the sales are reported on a finished lot basis,

which is consistent with the market. The actual purchase price may be less, depending on the

condition of the land (lots) at the time the property was acquired.

Data No. 1 refers to the March 2007 closing of 138 lots with a minimum lot size of 7,200 square

feet located in the Eastvale area. A local homebuilder purchased the lots from a national

homebuilder. The names and location have been kept confidential at the request of the seller.

The property sold in a blue-top condition with grading complete based on a finished lot price of

$190,000. Ith the appraisers' understanding that there were additional, higher offers on the lots,

ho'."ever, the seller needed a guarantee of closing by their year-end which was within

approximately 30 days. The buyer could offer that guarantee, however, the higher offers could

not. \Vhen compared to the subject property, this site is located within a CFD with similar

overall tax rates. In other comparisons, this transaction is considered inferior due to duress of

seller (quick close).

Data No. 2 pertains to the February 2006 purchase of 173 lots by Centex Homes with Richland

Communities the seller. The 7,200 square foot lots are located at the northeast comer of

Schleisman Road and Archibald A venue in the Eastvale area. The property sold on the basis of

$270,000 per finished lot. The lots were delivered in a raw land condition with approved

mapping and a grading permit approved. Currently there is a lengthy processing time for grading

permits in the County of Riverside. This property sold with an approved grading pennit,

however, in a raw land condition. This property is located within a proposed CFD with similar

overall tax rates. In comparison to the subject property, these lots are inferior in condition (raw

lands versus the subject property being nearly finished lots) and superior in date of sale due to

this sale closing approximately 18 months ago with home pricing decreasing over the past couple

years.

Summary Appraisal Repor( - Camplete Appraisal Community Focilihes District No. 30 of the Jun,pa Community Sen.,ices District Bruce W. lfull & Ass,x:,a/es, Inc. Page 35

Data No. 3 refers to an escrow which was cancelled in May 2006 for 7,200 square foot lots

located at River Road and Archibald Avenue in Eastvale. KB Home was in escrow to purchase

the 92 lots from Alexander Communities on the basis of $252,000 per finished lot. This property

was being sold in a raw condition with approved tentative mapping only. When pairing Data

Nos. 2 and 3 there is a significant price difference ($18,000 per lot) due to the grading permit

being approved. This is due to the lengthy processing time for grading approvals in the County.

In comparison to the subject property, these lots are significantly inferior in condition (raw lands

and no grading permit) and superior in the fact that it is a cancelled escrow approximately one

year ago with home prices decreasing over that time.

Data No. 4 refers to the cancelled escrow of 58 lots located between Harrison and Archibald

AVenue in Eastvale. The lots are a minimum of 7,200 square feet and in a semi-finished

condition. Centex was selling the lots. Richmond American Homes pulled out of an escrow in

June 2006 to purchase the lots on the basis of a $270,000 finished lot. Centex purchased these

and additional lots in June 2005 in an unimproved condition on the basis of $263,000 per

finished lot (please see Data No. 7). Centex processed a CFD on the property with an estimated 0:, N overall tax rate of 1.7 percent. In comparison to the subject property, these lots are superior in N the fact that it is a cancelled escrow approximately one year ago with home prices decreasing

over that time.

Data No. 5 pertains to the March 2006 purchase of 72 lots by Van Daele Development. John

L~ng graded the lots and sold them to Van Daele on the basis of $283,179 per finished lot. The

lots have a minimum lot size of 7,200 square feet and are located along Hamner Avenue near

Schleisman Road. The lots were sold in a partially finished condition. Grading had been

completed along with some onsite utility installation. Van Daele is continuing an existing

product and using models at a different location allowing them to pay a premium for the lots.

This property is located within a CFO with similar overall tax rates. In comparison to the subject

property, this sale is considered to be slightly superior due to no model complex and significantly

superior due to date of sale (prior to market downturn).

Data No. 6 pertains to the September 2005 sale of 94 lots located northwest of Archibald A venue

and Schleisman Road in Eastvale (adjacent to the north of the subject property). Trimark sold

the 7,200 square foot minimum lots on the basis of a $248,000 finished lot to Centex Homes. Summary Apprakro{ &port - Complew Appraisal Cammuriity Faci/uies Distrn:1 No. 30 oft~ Jun.pa Commumty Services Di.Jtricl Bruce W. Hull & Aswc,ate~, Im:. Page 36

The property closed upon final map approval with the lands in an unimproved condition. In

comparison to today's current market value, the site was unimproved at time of sale which is

considered to be inferior to today's nearly finished lots, however superior due to date of sale

(prior to market downturn).

Data No. 7 pertains to the William Lyon sale of 187 lots located between Harrison and Archibald

Avenue in Eastvale. Centex Homes purchased the 7,200 square foot minimum lots (some \.vith a

minimum of 7,700 square feet) on the basis of $263,000 per finished lot. The transaction closed

in June 2005. The property was sold in an unimproved condition with an approved tentative

tract map in place. Th.is property was sold with no CFD assumed on the property (Centex has

since begun the process of placing a CFO on the property), In comparison to the subject

property, this transaction is considered to be superior due to a lower overall tax rate and date of

sale, however, inferior due to condition.

Data No. 8 pertains to the June 2005 sale of 95 lots with a minimum lot size of 7,200 square feet

located at the northwest comer of Archibald Avenue and Chandler. This is near a proposed

neighborhood shopping center. Community Pacific Homes purchased the site from Lewis

Companies on the basis of $260,000 per finished lot. The property was sold in an unimproved

coildition with grading plans approved. The property is located within a proposed CFD with

similar overall tax rates in comparison to the subject property. In other considerations, this

property is considered to be inferior due to the raw land condition and superior due to the date of

sale (prior to market downturn).

Data No. 9 pertains to the purchase of 35 lots by Pinnacle Homes in May 2005 from

Distinguished Homes. The lots have a minimwn lot size of 7,200 square feet and were

purchased for $4,662,000. Finishing costs are estimated at $3,780,850 bringing the finished lot

cost to $241,224. The property is located between Schleisman Road and Orange Street in

Eastvale. The site was purchased in a raw condition with approved Tentative Tract Map

No. 32125. This transaction is located within a CFD with similar overall tax rates in comparison

to the subject property. In other considerations, this property is inferior to the subject property

due to the raw land condition and superior due to the date of sale (prior to market do\.vntum).

Summary Appraisal Report- Complete Appraisal Comm~nity f'acilirie$ District No. 30 oft he Jurupa Community Services Districl Bruce W. Hull & Associates, Inc.

Lot Value Conclusion

All of the market data is located within the Eastvale area and have either similar overall tax rates

or adjustments are considered for differences. The nine market data have an overall range of

$1~0,000 to $283,179 per finished lot. Data No. 1 ls the only 2007 transaction. It is the

appraisers' understanding that this transaction was sold under duress with the seller needing to

close by their fiscal year end of March 31, 2007. It should be noted that since March, the market

has deteriorated further. Data No. 1 is 25.30 percent lower than the remainder of the market

data. Data No. 2 is considered inferior due to the sale occurring prior to the property being

graded, however, it is considered to be significantly superior due to the date of sale. Data Nos. 3

and 4 fell out of escrow at the reported prices, which suggests the upper limit of range. As these

were not closed sales, the cancelled escrows are considered to be significantly superior to the

subject property in this declining markeL Data No. 5 pertains to the second most recent closing

which sold on the basis of $283,179 per finished lot after grading was completed in :March 2006.

This sale is now over 16 months old in a declining market making it superior to the subject

pt'Operty' s current market value. In addition, Data No. 5 was a continuation of a previous project

t,:j by Van Daele, thus no model complex was needed. It is interesting to note that between March

Ll, 2006 and March 2007 the pairing of sales 1 and 5 suggest a decrease of 33 percent, however, this

would be slightly offset by the duress of Data No. 1 and the existing model complex of Data No.

5. Data No. 6 was sold in an unimproved condition with no grading permit almost two years

ago. Data No. 7 had no CFD at time of sale, which is superior, however, it was in an

unimproved condition which is considered inferior to the subject property and the date of sale is

significantly superior. Data No. 8 sold with a grading pennit while Data No. 9 sold with

approved mapping only. Pairing Data Nos. 8 and 9 suggest over $20,000 difference per lot due

to approved grading permit versus mapping only. As previously discussed, this is due to the

lengthy approval process for grading plans currently in the County.

With the exception of Data No. I, the remaining market data is, at minimum, 17 months old.

There have been minimal land transactions in the subject area in the pa,;t year. Escrows, rather

than closing, are either being cancelled or being renegotiated downward to follow the declining

market, New home prices in the Northwest sub•market have declined between 1.7 -4.8 percent

($10,510 to $29,482) over the past year per Hanley Wood. However, Hanley Wood does not

track concessions currently being offered at the projects. Our surveys of the comparable projects

Su111mary Appraisal Report - Complete Apprai&al Community Facililies District No. 30 of the Jurupa Community Sen,ices District Broce W. Hull & Associates, Inc. Page 38

foUild concessions ranging from $10,000 up to $100,000 on standing inventory. Using actual

reported price declines and current concessions suggests that home prices in the subject market

have dropped upwards of $100,000. Although some builders can renegotiate some of the

construction prices with subcontractors, the majority of the price decreases falls to the builders·

profit and land prices.

The subject lots are in a generally finished condition alleviating the construction risk. Based on

the market data and current market conditions, it has been concluded that the 7,200 square foot

lots have a finished lot value of $200,000.

Summary Appraisal Report Complete Appraisal Communiry FaciUties D~<lricl No. 30 of the Jurupa Community Services DIS/r/CI

Bruce W Hull & Associates. Inc, Ptige 39

VALUATION ANALYSIS AND FINAL CONCLUSION

Stoneridge is proposed for 183 single-family detached homes. One hundred fifty-seven homes

have been completed and closed to individual homeowners. There are four model homes and 18

production homes over 95 percent complete which are builder owned (IO which are in escrow).

There are four remaining finished lots, all with additional production homes under construction

(under 95 percent complete). The homes under construction (under 95 percent complete) will be

valued on the basis of a finished lot rather than attribute value to a partially complete

improvement. According to the sales office, all 183 homes have been released and 170 have

been sold (157 closed and 13 in escrow, three of which are under construction). First, a

valuation for the builder ov.ned homes will be concluded followed by a value for the lots. Next,

a discounted value for the investment owned model homes will be reported followed by a

reporting of the minimum value for the individually owned homes and finally a value summary

for Stoneridge.

Existing Inventory (Retail Value) - Builder Owned Homes

ttl Due to the current single ownership of the four model homes and 18 production homes by the

"' ..j::::,. builder which are over 95 percent complete, a DCF is needed in order to arrive at a bulk value

for· each entity which takes into account the retail value of the homes, absorption time to sell the

homes, administrative expenses and a discount rate. Below is a summary of the eight floor

plans. The retail value will first be addressed. A listing of comparable properties is located in

the Addenda of this report.

Room Floon/ Plan Count Parking

1 4/2 113 2 5/3 113 3 5/4 1/2 4 5/4 2/3 5 6/4 2/3 6 6/4 2/3 7 6/4.5 2/3 8 7/3.5 2/3

Plans 2, 5, 7 and 8 are modeled.

Summary Appraisal Report - Comp/ere Appraisal Commurnly Faci/1ties Dutrict No. 30 of the Jurupa Community SeYVices District Bruce W. Hull & Assocwtes. Inc.

Bldr. Ind. Sq. Owned Owned Ft.

2,412 0 14 2,625 4 17 2,825 2 8 3,242 4 14 3,242 3 18 3,376 2 19 4.057 J 29 4,313 4 38

Page40

The most appropriate data for Plan l are:

i Data' Model Rm. Ct. Flrs/P1rn, I Sa, Ft. Price/SF : Subi. I 4/2 1 / 3 : 2,412 -! l 2 5/3 1 / 3 i 2,625 $195.85

6 1 412.5 l / 3 I 2,896 $181.42 ! 8 1 4/2.5 1 / 3 , 2,663 $194.89

12 1 3/2.5 ,------J_I± -+ 2,420 $209.08 !Jj" 1 j/2 Ii 3 2,600 $198.07

AH comparables are located within the subject market area. All are of similar quality, design and

appeal. Adjustments were considered (when applicable) for lot size, stories. sales concessions, CFD

taxes, common area benefits, total square footage, room count. garage space and other amenities.

1l1e subject has a current base price less concessions of $209.12 per square foot. It has been

concluded that Plan l has a value of$185.00 per square foot. 1bis calculates as follows:

2,412 sfx $185.00 = $446,220

The most appropriate data for Plan 2 are:

Data Model Rm.Ct. FJrsfPua. So. Ft. Price/SF Subi. 2 5/3 1 I 3 2,625 --

1 3 5/4 1/2 2,825 $185.42 6 1 412.5 113 2.896 $181.42 8 1 4 /2.5 1/3 2,663 $194.89 12 1 3 12.5 1/2 ! 2,420 $209.08 13 1 312 113 2,600 $198.07

All comparables are located within the subject market area. All are of similar quality, design and

appeal. Adjustments were considered (when applicable) for lot size, stories, sales concessions, CFD

taxes, common area benefits, total square footage, room count, garage space and other amenities.

The subject has a current base price less concessions of $195.85 per square foot. It has been

concluded that the Plan 2 has a value of $180.00 per square foot. Thi<; calculates as follows:

2,625 sf X $180,00 = $472,500

Summ,,ry Appraisal Report- Complete Appraisal Community Fae/lilies District No. JO of/he Jun,pa Community Services DWrict Bruce W. Hull & Associares, Inc Page 4/

The most appropriate data for Plan 3 are:

Data Model Rm.Ct. Flrs!P••· ""· Ft. Price/SF Subi. 3 5/4 1/2 2,825 ..

I 2 5/3 I/ 3 2,625 $195.85 6 1 4/2.5 1/3 2,896 $181.42 8 1 4/2.5 1/3 2,663 $194.89 12 1 3 / 2.5 1/2 2,420 $209.08 13 1 3/2 I/ 3 2,600 $198.07

All comparables are located within the subject market area All are of similar quality, design and

appeal. Adjustments were considered (when applicable) for lot size, stories, sales concessions, CFD

taxes, common area benefits, total square footage, room count. garage space and other amenities.

The subject has a cWTent base price less concessions of $185.42 per square foot. It has been

collciuded that Plan 3 has a value of$l75,00 per square foot. This calculates as follows:

2,825 sfx $175.00-$494,375

The most appropriate data for Plan 4 are:

Data Model Rm.Ct, Flrs/P•• Sa. Ft. Price/SF Subi. 4 5/4 2/3 3,242 ..

1 5 6/4 213 3,242 $167.55 2 1 4/3 2/3 3,435 $151.38 4 2 4/3 213 3,301 $156.31 5 2 5/3 213 3,473 $168.41 7 4 5/3 2/3 3,273 $160.09

AH comparables are located within the subject market area. All are of similar quality, design and

appeal. Adjustments were considered (when applicable) for lot size, stories, sales concessions, CFO

taxes, common area benefits, totaJ square footage, room count, garage space and other amenities.

The subject has a cWTent base price less concessions of $167.55 per square foot. It has been

concluded that Plan 4 has a value of$160.00 per square foot. This calculates as follows:

3,242 sfx $160.00 ~ $518,720

Suti!mary Appraisal Rep()r/ - Complete Appraisi.ll Community Facilities District No. 30 of tire JurUjXI Commumty Sel'Vices D111/rict Bruce W Hull & Amx:tates. Inc. Page 42

The most appropriate data for Plan S are:

Data Model ! Rm. Ct. Firs/Pk•. I Sn.Ft. Price/SF Sui,;. 5 6/4 2/3 ' 3,242 ..

1 4 5/4 2/3 3,242 $167.55 2 I 4/3 2/3 3,435 $151.38 4 2 4/3 2/3 3,301 $156.31 5 2 513 2/3 3,473 $168.41 7 4 5/3 2/3 3,273 $160.09

All comparables are located within the subject market area All are of similar quality, design and

appeal. Adjustments were considered (when applicable) for lot size, stories, sales concessions, CFO

taxes, common area benefits, total square footage, room count, garage space and other amenities.

The subject has a current base price less concessions of $167.55 per s4uare foot. It has been

concluded that Plan 5 ha,; a value of$160.00 per square foot. This calculates as follows:

3,242 sfx $160,00 ~ $518,720

lbe most appropriate data for Plan 6 are:

Data Model Rm.Ct. FlnfP""o, ·"'· Ft Price/SF Subi. 6 6/4 2/3 3,376 ! ..

1 5 6/4 2/3 3,242 $167.55 2 1 4/3 213 3,435 i $151.38 4 2 4/3 2/3 3,301 $156.31 5 2 513 2/3 3,473 $168.41 7 4 5/3 2/3 3,273 $160.09

All comparables are located within the subject market area. All are of similar quality, design and

appeal. Adjustments were considered (when applicable) for lot size, stories, sales concessions, CFD

taxes, common area benefits, total square footage, room count, garage space and other amenities.

Ibe subject has a current base price less concessions of $163.77 per square foot. It has been

concluded that Plan 6 ha,; a value of$155.00 per square foot. This calculates as follows:

3,376 sfx $155.00-$523,280

Summary Appraisal Report - Complete Appraisal Cammunily Fac1ilfles D1,tr/c/ No. 30 of /he Jurupa Commumty Sel'V/ces Distriel Bruer W. Hull & Associates. Inc, Page 43

The most appropriate data for Plan 7 are:

Data Model Rm.Ct FlrsfPua. So. Ft. Price/SF Subi. 7 6 I 4.5 2/3 4057 -

2 3 6/ 4.5 2/3 3,929 $140.72 3 l 6/ 4.5 2/3 4.055 $146.81 6 4 5/3.5 2/4 4,170

' $157.19

l3 3 514.5 2/3 4,063 '

$144.72

All comparables are located within the subject market area. All are of similar quality, design and

appeal. Adjustments were considered (when applicable) for lot size, stories, sales concessions, CFD

taxes, common area benefits, total square footage, room count, garage space and other amenities.

The subject has a current base price less concessions of $143.46 per square foot It has been

concluded that Plan 7 has a value of$140.00 per square foot. This calculates as follows:

4,057 sfx $140.00" $567,980

The most appropriate data for Plan 8 are:

Data Model Rm.Ct Flrs{P11n So.Ft Price/SF Subi. 8 7/3.5 2/3 4,313 -

l 7 6/4.5 2/3 4,057 $143.46 2 4 6/5 2/3 4,337 $140.30 3 2 5 I 4.5 2/3 4,260 $149.88 6 5 614.5 2/4 4,272 $156.95 l3 4 514.5 2/3 4,304 $158.22

All comparables are located within the subject market area. All are of similar quality, design and

appeal. Adjustments were considered (when applicable) for lot size, stories, sales concessions, CFD

taxes, common area benefits, total square foot.age, room count, garage space and other amenities.

The subject has a current base price less concessions of $140.56 per square foot. It has been

COIJcluded that Plan 8 has a value of$135.00 per square foot. 1bis calculates as follows:

4,3 lJ sf X $135.00" $582,255

Retail Value Conclusion

Four of the completed homes are models. Per interviews with builders, upgrades and

1andscape/hardscape of up to $200,000 are installed in the model homes, however, the builders

Swnmary Appraisal Report - Complete Appraisal COINIUlr1ily Facilities District No. JO of the Jw,,po Community Se,..,.ices District Bruce W. Hull & Anociates, Inc. Page 44

generally consider this a marketing cost and do not anticipate recovering this investment on a

dollar for Jollar basis, A consideration of a $30,000 premium has been considered on each of

the model homes.

The total gross revenue is calculated as follows:

Absorption Period

Plan l (0 x $446,220) Plan 2 (4 x $472,500) Plan 3 (2 x $494,375) Plan 4 (4 x $518,720) Plan 5 (3 x $518,720) Plan 6 (2 x $523,280) Plan 7 (3 x $567,980) Plan 8 ( 4 x $582,255) !\1odel Upgrades Total Retail Value

$ 0 1,890,000

988,750 2,074,880 1,556,160 1,046,560 1,703,940 2,329,020

120 000 $11,709,310

In order to arrive at an absorption period for the 22 builder-ovmed homes (four models and 18

production homes)_ the absorption rates for the active projects used for market data have been

reviewed. The subject project has released 183 homes and has either sold or taken reservations for

170 of the homes. Stoneridge began sales in May 2006 suggesting a sales rate of 10.6 homes per

month. Ten of the 22 builder o\.VJ1ed homes are in escrow, however, there is no guarantee of

closings. The market has slowed considerably in the past few months. It has been concluded that

the 22 builder-ov.ned homes will be absorbed within an 18-month period.

Expenses

In determining an expense rate, several builders in the subject area have been interviewed as to their

expenses on selling existing inventory. Expenses include marketing and general administrative

costs. These costs typically range from six to 10 percent depending on varying factors such as

absorption period, intensity of marketing, etc. Six percent has been estimated for marketing

expenses and two percent for general and administrative costs for a total of eight percent in

expenses.

Profit

Several interviews with merchant builders in the area were conducted in order to detennine an

appropriate profit percentage for the subject property. In the past, developers typically attempted

Summary Appraisal Reporl - Complete Appraisal Community Facilities District No. 30 oft Ii£ Jun,p<J Commu,ii/y Se,..,.ices District Bn,ce W. Hull & A:ssociates. Inc. Page 45

to achieve a 10 to 12 percent profit based on gross sales proceeds. During the early 1990s

recession this range was lowered considerably to six to 10 percent with some builders drastically

lowering their profit potential in order to maintain their work force. As the market improved, so

did the profits. Currently the market is in another downturn evidenced by the slowing real estate

market. An eight percent profit is considered in the analysis for this project.

Discount Rate

In selecting a discount rate, the following was completed:

l. Interviews with merchant builders in the Riverside area 2. Review of current market conditions including current market rates as well as yields reflected

in other markets (i.e., GNlviA, corporate bonds, etc.) 3. The quality, construction, historical sales and product on the subject property

A 14 percent discount rate has been utilized in our analysis for the subject property.

Discounted Cash Flow Summary

The discounted revenue (see chart in addenda) for the builder owned homes is $8,825,534 (say)

O:l $8,825,000.

"' -..J Finished Lot Valuation Stoneridge

The builder owns four remaining 7,200 minimum square foot lots, which are in a finished

condition, however, there are some offsite improvements currently under construction associated

with the project. The remaining costs are estimated at $1,800,000 and will be addressed under

the final Pulte Home Ownership valuation below, Although all four lots have homes under

construction (under 95 percent complete), the lots have been valued as finished lots rather than

attribute value to a partially complete improvement. It has been concluded that the property has

a value of $200,000 for each lot in a finished condition, The calculation is as follows:

4 lots x $200,000 $800,000

Total Value- Stoneridge-Pulte Home Corporation Ownership

Pulte Home Corporation owns 22 production homes over 95 percent complete and four finished

lots (all with homes under construction). The final value conclusions are as foUows:

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 30 of the Jurupa Communily Services District Bruce W. Hu{l & Associates, Inc. Page 46

Existing Homes Value (22 production homes) "As Is" Finished Lot Valuation (4 lots) Less: Remaining Costs To Complete Total Stoneridge Pulte Home Corporation Ownership

Total Value - Stoneridge lndividuaHy Owned Homes

$8,825,000 800,000

(1,800,000) $7,825,000

In determining the minimum value for the individual owned homes, we have considered base

pricing for the homes as well as competing developments. This is considered to be a minimum

market value as the majority of homeowners pay for some added options or lot premiums in their

final value. Our concluded value is the estimate of base value of the homes taking into

consideration the current concessions in the marketplace, The concluded minimum market

values are as follows:

Plan I (14 x $446,220) Plan 2 (17 x $472,500) Plan 3 (8 x $494,375) Plan 4 (14 x $518,720) Plan 5 (18 x $518,720) Plan 6 (19 x $523,280) Plan 7 (29 x $567,980) Plan 8 (38 x $582,255) Total Minimum Value

$ 6,247,080 8,032,500 3,955,000 7,262,080 9,336,960 9,942,320

16,471,420 22 125 690

$83,373,050

In addition, we have reviewed actual sales prices for the homes. The actual sales prices include

lot premiums, options and upgrades. It should be noted that some incentives such as lender

incentives may not be reflected in the reported sales prices. Closings occurred within the project

between November 2006 and August 2007. The actual sales prices total $103,033,916. The

concluded minimum value for the homes is 19.1 percent below the reported sales prices. This is

due to; (1) the declining market; (2) sales prices including upgrades, options and premiums while

concluded values are base values only; and (3) lender incentives and other incentives not

reflected in the reported sales price. This further substantiates the concluded minimum value for

the homes.

Aggregate Value -Stoncridge

Pulte Home Corporation Ownership Individual Owners Minimum Value Aggregate Value - Stoneridge

Summary Apprmsa/ Report - Complete Appraisal Community Facil,ties District No 10 oft he hn,po Community Services District Brnce W Hull & Associates, Inc

$ 7,825,000 83 373 050

$91,198,050

Page 47

MARKETING AND EXPOSURE TIME

It is the appraisers' estimation that the marketing and exposure time for the subject property

wa;uld be under 12 months if placed on the open market in today's market conditions at the

concluded market value, assuming that the improvements to be financed by CFD No. 30 are in

place.

S11mmary Appraisal Report - Complele Appraisal CommWUty Fac/lu/es Disrrict No. J() of the .hvupa Comm11nity Svvices District Bn.ce W. Hllll & A1,octare,, Inc. Page 48

APPRAISAL REPORT SUMMARY

The appraisal assignment was to value the subject property within CFD No. 30. The subject

property consists of Stoneridge, a development totaling 183 proposed homes under development

by Pulte Home Corporation. Stoneridge's status range from completed homes sold to

homebuyers to finished lots. Out of the total 183 homes 157 have closed escrow to individuals,

22 are builder ovmed homes over 95 percent complete and there are four final production homes

under construction.

The subject property was valued utilizing the Sales Comparison Approach to value and, in the

case of the builder-owned homes, a Discounted Cash Flow Analysis. A reporting of minimum

value was completed for the individually owned homes. The valuation took into account the

improvements/benefits to be funded by CFD No. 30 along with the CFD No. 30 special tax lien.

The concluded aggregate value for the subject property, subject to the special tax lien, are:

Ninety-One Million, One Hundred Ninety-Eight Thousand and Fifty Dollars

($91,198,050)

The above values are stated as of said date of value and subject to the attached Assumptions and

Limiting Conditions and Appraiser's Certification.

Summary ApPraisal Report - Complete Appraisal Comm,mil)' Faci!ilies Dmrict Na. 30 of the Jurupa C ammunity Service.s District Broce W Hull & As.mciate.<, Inc Page 49

0:,

"' '°

APPRAISERS' CERTIFICATION

We certify to the best of our knowledge and belief that:

1. The statements of fact contained in this report are true and correct.

2.

3 ..

4.

5.

6.

.1.

8.

9.

10.

11.

The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and is our personal, unbiased professional analyses, opinions and conclusions.

We have no present or prospective interest in the property that is the subject of this report and we have no personal interest or bias with respect to the parties involved,

Our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result or the occurrence of a subsequent event.

1bis appraisal was not based on a requested minimum valuation, a specific valuation or the approval of any specified amount.

Our analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

We have made a personal inspection of the property that is the subject of this report.

No one provided significant professional assistance to the persons signing this report

The reported analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute.

The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

As of the date of this report, Bruce W. Hull, MAI and Kitty S. Siino, MAI. have completed the requirements of the continuing education program of the Appraisal Institute.

Bruce W. Hull, MAI State Certified General

Real Estate Appraiser (AG004964)

Kitty S. Siino, MAI State Certified General

Real Estate Appraiser (AG004793)

Summary Appraisal Report - Complete Appraisal Cammunity F aciJitit.t District Na. 30 of the Junipa Community Services District Bruce W. Hull & Assacuues. Inc. Page JO

ADDENDA

DISCOUNTED CASH FLOW ANALYSIS

[THIS PAGE INTENTIONALLY LEFT BLANK J

$gffel'fdqe Olscolfflhd Cuh Flow

""""' M!llillil llQllllU MO!flfil MQlfilil Mlll!IliJj """"" Mllliilil - ""'1liJI M!ll!lli.lll """1ill MQfillil2

INCOME Rorn s.re. lll&l.517 $650.517 lfBIJ;Jl $6!:ll.517 lli&l.517 li&l.517 S69J.517 l650.517 '66il.511 S69l.517 16!il.511 $6!:ll,517

TOTAL INCOME ....,,, "'""' ""-ill """"' ""'-'1Z .....,

""""' lOiWZ """" """"' """11 lOiWI

eo>ENSES: Mo.toting & Clff)'m11 Expenses (f52,Q,11) (552.(l,I\) ($'j2JM1) (152,IM1) (152.(l,11) (152)3,11) (152.(),11) (t!i2.[M1) (162.CUI) (152)'.Ml) ($52)3,11) (152,D(1) - llli100l = """'" """"1 "'2Jl'1l """'" """"' - """"' ""'"" ll'2Jl!ll """'1l

TOTAL EXPENSES ($104.oo:J) ($104.cm) ($104,(W) (S104JHJ) ($104,oo3) (S104.[B3) (S1M,oo3l ($10Um) ($104,[B3) ($104.(W) ($104.(83) ($10-1JHJ)

NETCASHFLOW t646,434 ""·"' ""·"' ""·"' """' ""'·"' -·= ""'"' """' ""·"' """' ""-"' o,.,,,,.1111Facto, '"'"' o.,m ..,. - '-"" ,.,,,,

""" '-'ill ...... '""" - -DISCOUNTEO CASH FUJ'N $5«1,133 "",,. $527l47 $521):61 $515,645 ..,, .. $503,821 Sioi:1,011 ..,,,., '''""

,.,,,,. 5,11s,rn

CIJMIJLAlM: OISCOI.IN'll:O ,mm """" ll.iWH llJ2l.ill ,,,,,.,. """"

,,,,,_ ...,,...,. """"' llJ.llJlJI .,...,,,, """"1

CASH fl.OW

Adj. Months I ~ R .. 11\~IR 1 Remo,,e8utt<>Mj

"''"" WIIlill MQ!fillli Wlillill - lllllilliJl "'"'1liJ!l ll1L!I.

""'"' llet,i!S,le! li650,517 tooJ.517 f&OO.!i17 tl)50.517 $E&l;517 SSS'.l.517 $11)00,310

TOTAL INCOME """" 0&'11 lOiWZ """" """"' ""'"' $11)'09,310

S@ENSES M•lk•ti"II & c....,,ing EXPENSES: ($52,(141) {1,9,041) (SS:2.00] ($52,()41) (152.(l,11) ($52!}41) ('$9'36.745) ,., "'2lllli /lllillli """"1l """"' = """'" ($9'.'fi,HS)

TOT/lL. eil'ENSES (S104.oo:J) (Sl!l4!IDJ (SI04,oo:3) (S104.oo:l) (S1M.()33) (S1 •400J') (S11!73A9J)

NETCASH~L!.M' ""·"' """" ,, . .,~ ""·"' $546,~3'1 '546,-434 ~"'"" 0.1<cocnt faclar """ - - ..,. = "'110

OISCOUNTEO CASH FLOW """' "'""' M59,m """" s«ll,644 ""·"" W,B25.S3-I

CUMULATIVE OISCOUNTEO ...,,..,. ILmJll """"" 1Ull.m ..,.,_.., = ......,,. CASHflOW

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B-31

DETAILED CFDMAP

[THIS PAGE l.NTE.NT!ONALLY LEFT BLANKj

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B-33

RESIDENTIAL LOT SALES SUMMARY CHART

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RESIDENTIAL LOT SALES SUMMARY CHART

D,ta Sal<, "' Lot Size Finished No. L«atlon/Buw,rfSeller Date Lot, ,sm Price/Lot Proiect Name

I Confidential Location 03/07 ll8 7,200 $190,000 Recent closing. Seller took low offer with guarantee to close. Eastvale Arca Information kept confidential at request of seller. Within Confidential I Confidential CFO.

2 NEC Schkcisman Road and Arcltlbald Avenue 02/06 173 7,200 $270,000 Closed upon receipt ofa gradir13 penniL Within CFD with Eastvale Arca proposed overall tax rate in the 1.6..1.8 range. TIM 31492. Centex Homes / Richland Communities

3 River Road and Atchibald A venue Cancelled " voo $252,000 To close with TfM approval in a raw land condition. Tract Eastvale Area Escrow No. 31406. KB cancelled !he escrow in May 2006. KB Horne / Alexander Communities 05/06 R·--rtedl several additional offers at same nrice.

4 Between Harrison and Archibald Avenue Cancelled " 7,200 $270,000 Ccn!~ was offering a portion of !he lots they purchased from Eastvale Area F-w William Ly<:>n (see Data No. 6). Within CPD (Centei,. Richmond Ammcan I Centex Homes Late 2006 processed sin,;;e they purchllSed). Centex is now building on

Sile.

' Schleisman Road and Hamner A v1111ue 03/06 72 7,200 $283,179 One of thn subject properties. Sold in a blne topped coodition Eastvale Area ready to start model construction. Within propqsed CFD. Van Dae!c / John Ulin<>

6 NW of Archil»dd Avenue and Schleisman Road 09!05 94 7,200 $248,000 Property dosed upon final map in an unimproved condition. Eastvale Area Within proposed CFO. Centex Homes/ Trirrwk PacUic

1 Between Harrison and Archibald A venue {)fuU, 187 7,200+ $263,000 Sold in unimproved condition with approved Tentative Tract Eastvale Area Map. No CFO. Centex Homes/ William L von

• NWC An:hibald Avenue and Chandler 06/05 .,, 7,200 $260,000 Sold in unimproved condition with approved mapping and Eastvale Area grading pennit ready to go_ Within proposed CFD Community Pacific Homes / Lewis Companies

9 Between S-Ohlcisman Road and Orange Sltcct 1:-.10 Sumner 05/05 3' 7,200 $241,224 Tract 3212.:! purchased in a raw land condition with approved Eastvale Area mapping. Within proposed CFD. Pinnacle/ Distin<>uished Homes

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B-35

IMPROVED RESIDENTIAL SALES

SUMMARY CHART

[Tors PAGE INTENTIONALLY LEFT BLANK j

IMPROVED RESIDENTIAL SALES SUMMARY CHART

Lot Siu/ Price/SF

Data Project Name Room Floon/ No. .... Price less Aire, No. Locatlon/Develo..,._r Plan Count Size""'"" Parkin<> Loi, Sales Price Incentives/Concessions Incentives hu:entives

I Stoneridge I 4/2 2,412 I/ 3 7)00 $520,000 3 Percent if using Pulte $504,400 $209.12 Eastvale Area 2 5 I 3 2,625 1/3 ,r $530,000 Mortgage. $514,100 $195.85 Pulte Homes 3 5/4 2,825 I /2 183 $540,000 $523,800 $185.42

4 5/4 3,242 2/3 $560,000 $543,200 $167.55

' 6/4 3,242 2/3 $560,000 $543,200 $167.55 6 6/4 3,376 2/3 $570,000 $552,900 $163.77 7 6/4.5 4,057 213 $600,000 $582,000 $143.46 8 7 I 3.5 4,3B 213 $625,000 $606,250 $140.56

2 Stone River Ranch I 413 3,435 2/3 6,000 $620,000* $25,000 avernge. Up to $520,000 $151.38 Eastvale Arca 2 513 3,709 2/3 ,f $639,500* $100,000 on standing $539,500 $145.46 Trirnark Pacific Homes 3 614.5 3,929 2/3 92 $652,900* inventory. $552,900 $140.72

4 615 4,337 213 $708,500* $608,500 $14030 3 Foxborough I 614.5 4,055 2 / 3 6,000 $695,310* Up t-0 $100,000 in total $595,310 $146.81

Eastvale Area 2 514.5 4)60 2 / 3 ,f $738.480* incentives on standing $638,480 $149.88 MBK Homes 3 7 / 4.5 4,381 2/4 91 $767,770* lnventoiy. $667,770 $152.42

4 1 I 4.5 4,745 214 $809,950• $709,950 $149.62 ----4 Sterling Valley I 4/2.:S 2,824 2/2 7,200 $516,990 Up to $25,000 wilh $491,990 $174.22

Eastvale Area 2 413 3,301 2 I 3 sf $540,990 kndec $515,990 $156.31 Centex Homes 3 514 3,613 2 / 3 94 $567,990 $542,990 $150.29

4 514 3,808 2/4 $585,990 $560,990 $147.32

' Cimarron Trail I 4 f 3 J,!Wi i--2 / 3 7)00 $499,900 Up to $46,000 in $499,900 $156.41 Eastvale Area 2 513 3,473 2/3 sf $630,900 combined concessions. $584,900 $168.41 Trimark Pacific Homes 3 614 3,981 2 / 3 96 $649,900 Prices reported for plan $603,900 $\5L70

4 5 I 4.5 4.123 213 $639,900 I and 4 are asking $639,900 $155.20 nrices inc. discounts

6 Parkside I 412.5 2,896 I /3 7,200 $535,400 Up to $10,000. $525,400 $181.42 Eastvale Arca 2 6 I 3 3,676 2 / 3 sr $559,500 $549,500 $149.48 William Lyon Homes 3 4 / 3 3,857 213 $580,500 $570,500 $147.91

4 513.5 4,170 214 $665,500 $655,500 $157.19

' 6 I 4.5 4,272 214 $680,500 $670,500 $156.95 7 Silver Ridge I 413 ~:i,405~ ~7 2 6,000 $499,990 $10,000 with lender $484,990 $201.66

Eastvale Area 2 413 2,823 2 / 3 sf $500,990 S485,990 $l72.15 l.<M~ 3 513 2,982 2 I 3 $514,990 $499,990 $(67.67

4 Sil 3,273 213 $538,990 $523,990 $160.09 8 Trentofl-Square I 412.5 2,663 I I 3 7,200 $548,990 Up to $30,000 on $518,990 $l94.89

Eastvale Arca 2 513 3,174 212 sf $599,990 standing inventory $569,990 $179.58 Capital Pacific Homes 3 513 3,688 2/2 142 $649,990 $619,990 $168.11

4 5/3 3,829 214 $659,990 $629,990 $\64.53 5 5 / 3.5 4,173 2/4 $699,990 $669,990 $160.55

. Loi

' Siu/ Price/SF

Data Project Name Room Floors/ N~ Ba~ Price le.'iS All" Na IMatiollfllevcloru.r Plan Count Siu '~t1 ~ ~arking Lo> Sales Price Incentives/Concessions Incentives lncentivet 9 Citrus Ranch I 413 2,836 2 I 3 7,200 $510,000 Up fo-$fooo with $505,000 $178.07

Ea~tvale Area 2 512.5 3,056 2 / 3 sf $530,000 lender. $525,000 $171.7<'/ Wan:nington Homes 3 513 3,396 ! 2i 3 40 $560,000 $355,000 $163.43

4 512.:5 3,438 i 214 $548,000 $543,000 $157.94 10 Del Sol at Cimarron Ranch 2 4 / 2.5 2,992 2 i :r ,;200 $499,990 Up to $15,000 on $484,990 $162.10

Eastvale Area 3 512.5 3,340 2/3 sf $540,990 standing inventol)' with $525,990 $157.48 KB Home 241 lender.

II Pheasant Run I 4/3 2,694 1/2 6,500 $535,900 Up to $30,000 in $495,900 $184.07 Eastvale Area 2 513 3,158 2/3 sf $557,900 upgrades plus $10,000 $517,900 $164.00 KB Home 3 5/3 3,372 2/4 120 $577,900 with lender. $537,900 $159.52

' 614 3,650 2/4 $610,900 $570,900 $156.41 - - --12 Crestfield I 3 /2.5 2,420 l /2 8,000 $515,990 $!0,000 with lender ---$505,990 $209.08

Eastvale Area 2 413 2,916 212 sf $542,990 $537,990 $184.50 Centex Homes 3 514 3,446 2/3 98 $560,990 $550,990 $159.89

4 5 I 4.5 3,:'i68 2 I 3 $569,990 S559,990 $156.95 13 Carrington I 312 2,600 I/ 3 ,.ooo $524,990 --Sfo~OOO-with lender $514,990 $198.07

Eastvale Area 2 414 3,951 213 ,f $585,990 5575,990 $145.78 Centex Homes 3 5 i 4.5 4,063 213 $597,990 $587,990 Sl44.72

4 5 I 4.5 4,304 2/3 $690,990 __ 5680,990 $158.22 * Price re fern to most recent askmg prices for stand mg inventory

B-37

APPRAISERS' QUALIFICATIONS

QUALIFICATIONS OF BRUCE W. HULL, MAI

Business Locations: l 056 E. Meta Street, Suite 202 Ventura, California 93001 (805) 641-3275 - Phone, (805) 641-3278 - Fax E-Mail Address- Bhull86686@aoLcom Direct Correspondence to Ventura Location

115 E. Second Street, Suite 100 Tustin, California 92780 (949) 581-2194 - Phone, (949) 581-2198 - Fax

Bruce W. Hull & Associates, Inc. is an appraisal firm that provides a wide variety of appraisal assignments for public agencies, developers and financial institutions.

The principal, Bruce W. Hull, MAI, has been in the appraisal field since graduation in 1969 from Westmont College, Santa Barbara. After being employed by the Ventura County Assessor's Office for five years, he established an appraisal company in Orange County in 1974. In August of 1995 he established an office in Ventura while maintaining an Orange County location. While most of the appraisal assignments are in Southern California, assignments have been completed in areas from San Francisco/Bay Area and Lake Tahoe to San Diego.

The appraisal assignments completed have been diverse in nature, including such property types as large master planned developments, shopping centers, large retail uses and mitigation land. A brief summary of the more challenging assignments is given on the following pages.

MASTERPLANNED DEVELOPMENT

These are typically more than 1,000 acres in size and have a wide variety of residential product, often ranging from condominiums to large estate type of properties. In addition, there is often a commercial use within the development. I have been involved in the following projects.

Lake Sherwood, Hidden Valley Wood Ranch, Simi Valley Rancho San Clemente, San Clemente Towne Center, Rancho Santa Margarita Rancho Trabuco North and South, Rancho Santa Margarita Hunters Ridge, Fontana The Corona Ranch, Corona .'.\fountain Cove, T emescal ;\,fountain Gate, South Coron.a The Foothill Ranch, Corona Orange crest, City of Riverside Aliso Viejo, County of Orange Talega Valley, City of San Clemente/County of Orange Otay Ranch, City of Chula Vista

RETAIL USE

Consultant to City of Long Beach regarding a 30-acre site (Long Beach Naval Hospital) which the City was acquiring from the US Navy for inclusion in a 100-acre shopping center site.

Tov.ne Center, Rancho Santa Margarita, is a masterplanned project which contains two shopping centers (Tov.ne Center, 160,000 sf plus a Target Store, 122,000 sf; Plaza Antonio, 165,000 sf).

Mission Grove, City of Riverside, is a 395,362 sf center which included a K-Mart Department Store among the major tenants.

Victoria Gardens Masterplan was a proposed mixed-use project consisting of 3,065 acres of land which included a mixture of residential (2,150 acres), commercial (335 acres of which 91.9 acres was a regional center site), schools, parks and open space for the remainder of the lands.

Menifee Village, Riverside County, is a 1977-acre masterplanned development which had approvals for 5,256 units. The assignment included the valuation of Planning Area 2-7 which was a commercial site that had been developed with a Target Store, Ralphs Market, and in-line stores ( l 90,000 sf with eventually being a 257,000 sf center).

0:, w '° MITIGATION LANDS

These assignments involved valuing lands that are considered mitigation lands which are often acquired by public agencies or nonprofit organizations.

Bolsa Chica, Huntington Beach, a 42-acre site which was part of a larger wetland'> conservation program. This particular acreage was unique since it was subject to "tidal flushing" and had both fresh and saltwater impacting the lands. This assignment was completed for Metropolitan Water District.

San Joaquin Marsh, City of Irvine, consisted of approximately 289 acres of wetlands which were acquired for use as a "buffer" zone by the Irvine Ranch Water District. Eagle Valley, a 1072-acre parcel near Lake Matthews in Riverside County, was acquired by Metropolitan Water District for use as a water treatment plant and buffer zone.

Poormans Reservoir, Moreno Valley, a 38-acre site acquired by the City of Moreno Valley for preservation/open space use.

ASSESSMENT DISTRICTS/BOND ISSUES

Involvement in the appraisals of the following Bond Issues regarding Community Facilities Districts and/or Assessment Districts. (This represents a partial list of assignments completed from 1990 through Present.)

CFO No. 9 (Orangecrest - Impr. Areas l, 3 and 5), City of Riverside CFO No. 2000-1 (Crosby Estate@Rancho Santa Fe), Solana Beach CFD No. 2001-01 (Murrieta Valley L'.S.D.), Murrieta CFD No. 90-1 (Lusk-Highlander), City of Riverside Otay Ranch SPA I - CFO No. 99-2, City of Chula Vista CFO No. 7 (Victoria Grove), County of Riverside CFO No. 10 (Fairfield Ranch), City of Chino Hills CFD No. 2000-1, Tcjon Industrial Complex, Lebec CFO No. 99-1, Santa Margarita Water District CFO No. 97-3, City of Chula Vista CFD No. 2 (Riverside Unified School District), City of Riverside CFO No. 89-l, City of Corona Lake Sherwood A.D. Refunding, County of Ventura CFD No. 9, City of Chino Hills CFO No. 88-12, City of Temecula CFO No. 90-1 (Refunding), City of Corona A.D. No. 97-1-R, City of Oxnard A.D. No. 96-1, Valley Center Municipal Water District; San Diego County A.O. No. 96-1, City of Oxnard CFD No. 88-1 (Saddleback Valley Unified School Dist.), Rancho Santa Margarita CFO No. 89-2 (Saddleback Valley Unified School Dist.), Rancho Santa Margarita CFO No. 89-3 (Saddleback Valley Unified School Dist), Rancho Santa Margarita Centex A.D. No. 95-1, City of Corona Coyote Hills A.D. No. 95-1, City of Fullerton Sycamore Creek A.D. No. 95-l, City of Orange Prop. CFO No. 2 (Riverside Unified School District), City of Riverside CFO No. 91-1, City of Rancho Cucamonga Prop. CFO No. 2, City of Chino CFO No. 9, County of San Bernardino A.O. No. 89-1, City of Corona CFO No. 87-1 (Series B), City of Moreno Valley CFO No. 90-1, City of Corona CFO No. 89-1, (Saddleback Valley Unified School District), Orange County A.O. No. 96-1, City of Oxnard A.O. Nos. 86-3. 87-1 and 89-1 (Refunding), City of Oxnard CFO No, 90-1, City of Corona CFO No. I (Refunding), City of Jurupa CFO No. 88-12, City of Temecula

PARTIAL LIST OF CLIENTS

Have completed appraisal assignments for a wide variety of clients. A partial list of these includes the following:

Anaheim City Unified Schoo] District Bank of America NT & SA Bank of Montreal Bear, Stearns & Co., Inc. Best Best & Krieger LLP (Law Firm) Carpinteria Valley Unified School District Chino Unified School District Citicorp, N.A. City of Brea City of Chino City of Chino Hills City of Chula Vista City of Colton City of Corona City of Fullerton City of Huntington Beach City of Jurupa City of Mission Viejo City of Moreno Valley City of Orange City of Oxnard City of Rancho Cucamonga City of Riverside City of San Bernardino City of San Marcos City of Temecula Coast Federal Bank Colton Joint Unified School District County of Los Angeles County of Orange Cowity of Riverside County of San Bernardino County of Ventura Downey Savings and Loan Federal National Mortgage Association (FNMA) Federal Deposit Insurance Corporation (FDIC) Fieldman, Rolapp & Associates (Financial Consultants) Irvine Ranch Water District Irvine Unified School District Jurupa Community Services Disbict

Mctrobank Metropolitan Water District Meserve, Mumper & Hughes (Law Finn) Munger, Tolles & Olson LLP (Law Finn) Murrieta Valley Unified School District Rialto Unified School District Riverside Unified School District Saddleback Valley L'nified School District Santa Margarita Water District Sidley & Austin (Law Firm) Solana Beach Unified School District Southern California Edison Company Stone & Youngberg LLC (Bond Underwriters) Talmantz Aviation The Irvine Company Wells Fargo Bank Wells Fargo Mortgage Company Weyerhaeuser Mortgage Company

COURT EXPERIENCE

Qtialified Expert Witness in the following courts:

United States District Court/Central District of California, Los Angeles Los Angeles County Superior Court Orange County Superior Court Riverside County Superior Court Ventura County Superior Court

ORGANIZATIONS

Member - Appraisal Institute (No. 6894)

LICENSES

Real Estate Broker - State of California Certified General Real Estate Appraiser• State of California (Certificate: AG004964)

GUEST SPEAKER (for)

UCLA Symposium on Mello Roos Districts - 1988

"Exploring the Rumors & Realities of Land Secured Debt in California" - Conference sponsored by Stone & Youngberg, LLC, bond undermiters, held in Los Angeles on January 15, 1992

"Appraisals for Land Secured Financing" presentation for Stone & Youngberg, LLC, bond underwriters, held at San Francisco Headquarters on March 5, 1998

UCLA Symposium on Mello-Roos Districts• 2001

MISCELLANEOUS

Member Advisory Panel to California Debt Advisory Commission regarding Appraisal Standards for Land Secured Financing (May, 1994)

QUALIFICATIONS OF KITTY S. SIINO, MAI

Education

Bachelor of Arts in Business Administration, Financial Investments, California State University, Long Beach, California (l 980)

Post-Graduate Study, Real Estate Development, University of California, Irvine, California

Appraisal Institute Classes: Uniform Standards of Professional Appraisal Practice, A & B; Appraisal Principles; Appraisal Procedures; Basic Income Capitalization; Advanced Income Capitalization; Narrative Report Writing; Advanced Applications, Case Studies. Successfully completed all classes in addition to successfully completing the \vriting of a Demonstration Report and taking the Comprehensive Exam. Became a Member of the Appraisal Institute in December 1996.

Employment

1988 - Present: Self-Employed Real Estate Appraiser. Duties include the appraisal of various types of properties such as commercial, retail, industrial and vacant land. More complex assignments include easements, right-of-ways and special assessment districts. From 1996 to present, specialized in special assessment districts and community facilities districts appraisals for public entities.

1986- 1988: Project Manager of Development for Ferguson Partners, Irvine, California. Duties included land acquisitions; review of fee appraisals and valuations; analysis of proposed development; planning and design; and management of development, construction and lease-up. The types of properties developed were commercial and industrial. Duties ranged from raw, vacant site development through property management of recently developed projects.

1981 - 1986 Manager of Finance, Construction for Community Dc\'elopment Di\'ision, The Irvine Company, Irvine, California. Duties included originating and managing a newly fonned division of finance to bridge between the accounting functions and project management functions. Worked with analysis and budgets for Community Development Division. Coordinated with cities in forming new Assessment Districts and Community Facilities Districts to finance major infrastructure improvements. Types of properties were apartments and single~family residential lots on a for sale basis to apartment and homebuilders.

1980· 1981

Liceuses

Investment Counselor, Newport Equity Funds, Newport Beach, California. Duties included obtaining private financing for residential properties and working with appraisals of properties and analyzing the investments.

Real Estate Sales Person, State of California, 1980 Certified General Appraiser, State of California (#AG004 793)

Organizations MAI #I 1145. The Appraisal Institute

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APPENDIXC

SUPPLEMENTAL INFORMATION CONCERNING JURUPA COMMUNITY SERVICES DISTRICT

The information and expressions of opinion set forth herein have been obtained from sources believed to be reliable, but such information is not guaranteed as to accuracy or completeness. Statements contained herein which involve estimates, forecasts, or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of facts. The information and expressions of opinion herein are subject to change without notice, and neither delivery of this Official Statement nor any sale thereafter of the securities offered hereby shall under any circumstances create any implication that there has been no change in the affairs of the Services District or in any other information contained herein since the date of the Official Statement.

INTRODUCTION

The J urupa Region

Jurupa Community Services District (the "District") encompasses an area of about 18,000 acres located in the northwestern portion of Riverside County approximately 47 miles east of the Los Angeles civic center and four miles west of downtown Riverside. The District serves the unincorporated area of Riverside County which is comprised of the communities of Glen Avon, Mira Loma, Pedley and Eastvale areas.

The District is situated within an area identified as the Jurupa Region by the Riverside County Department of Economic and Community Development. The Jurupa Region is bordered on the north and west by Riverside County, on the east by the unincorporated community of Rubidoux, while its southern boundaries vary, but are generally north of the Santa Ana River and the unincorporated community of Mira Loma. It has a predominantly rural to semi-rural setting, which is currently transitioning to residential neighborhoods typical of Southern California and consists of four district communities: Glen Avon, Mira Loma, Pedley and Rubidoux which is within the District.

Major commercial development within the District is dominated by large distribution warehousing facilities. These facilities range in building size from 400,000 - 1.3 million square feet. There are a number of national corporations that have located within the District such as Metal Container (Anheiser Busch); Nestle Corp.; Millard Refrigerated Facilities PriceCo; Watkins Motors, Consolidated Freightways and England Trucking, all of which are major truck terminals; Ford Motor Company (on the Union Pacific Railroad property) and many other California based companies. Also, located at Mira Loma is the Mira Loma Space Center, a former military depot that is now a manufacturing and warehousing distribution center.

Recent residential developments have tended to capitalize on the availability of open space, either for recreation such as golf or for equestrian pursuits. There are a number of shopping centers in the Jurupa Region.

District Organization

Jurupa Community Services District was formed in 1956 under provisions of the Community Services District Law of the State of California (Government Code, Title 6, Division 2). The District has latent authority to provide a wide range of governmental services including water, sewerage, refuse disposal, fire protection, park and recreation, street lighting, mosquito abatement, police protection, library and street construction services. The District is currently authorized to provide water, sewerage, refuse disposal, street lighting services, and park and recreation services.

C-1

Climate and Topography

The topography of the area ranges from broad stretches of flat land to hills which separate the District from Riverside County.

Contributing to the area's climate is the fact that it is surrounded by mountains which protect it from the heat of the desert areas to the east during the summer and from fog experienced by the coastal area to the west.

Assessed Valuation

Assessed Valuations within the District are established by the Riverside County Assessor, except for utility property, which is assessed by the State Board of Equalization.

The following table summarizes the assessed valuation for the Services District for Fiscal Years 1996-97 to 2006-07.

Fiscal Year

1996-97 1997-98 1998-99

1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

JURUPA COMMUNITY SERVICES DISTRICT Assessed Valuation

Homeowners Secured Unsecured Exemption

$1,958,554,451 $134,622,391 $48,601,952 2,076,187,623 112,070,606 48,151,903 2,099,491,315 97,426,427 47,244,216 2,364,981,499 133,350,866 45,708,710 2,760,681,295 162,268,615 45,689,434 3,144,459,413 203,938,006 46,190,967 3,616,186,493 229,831,387 49,864,166 4,234,076,806 273,929,670 59,430,133 5,131,265,591 271,102,562 64,882,439 6,682,508,363 309,168,779 69,598,955 8,948,118,714 334,229,665 75,430,074

Source: Riverside County Auditor-Controller and California Municipal Statistics, Inc.

Tax Levies and Delinquencies

Assessed Valuation For Revenue

Purposes

$2,141,778,794 2,236,410,132 2,244,161,958 2,544,241,075 2,968,639,344 3,394,588,386 3,895,882,046 4,567,436,609 5,467,250,592 7,061,276,097 9,357,778,453

The Riverside County Tax Collector collects property tax levies for each Fiscal Year on taxable real and personal property in the County as of the preceding January I, the lien date for property taxes. Unsecured taxes are due on March I of each year and become delinquent August 31. One half of the secured tax levy is due November 1, and become delinquent December 10; the second installment is due February 1, and becomes delinquent April 10. A ten percent penalty is added to any late installment. On June 30, delinquent properties are sold to the State.

Property owners may redeem properties sold to the State upon payment of delinquent taxes and penalties. Such properties incur a redemption penalty of one and one-half percent ( 1-1/2%) of the tax due per month. Properties may be redeemed under an installment plan by paying current taxes, plus twenty percent (20%) of delinquent taxes for five (5) years. Interest accrues at one and one-half percent (1-1/2%) of the tax due per month on the unpaid balance. If no payments have been made on delinquent taxes at the end of five Fiscal Years, the property is deeded to the State. Such properties may thereafter be conveyed to the County Tax Collector to be sold at a public auction as provided by law.

C-2

Employment

Residents of Jurupa Community Services District find employment throughout the Riverside-San Bernardino-Ontario Labor Market Area. This labor market area, as defined for reporting purposes by the California Employment Development Departruent, has boundaries coterminous with those of Riverside and San Bernardino Counties. The following tables set forth certain employment data for the Riverside - San Bernardino-Ontario Metropolitan Statistical Area and the County.

RIVERSIDE-SAN BERNARDINO-ONTARIO MSA Riverside, San Bernardino Counties

Industry Employment & Labor Force - by Annual Average March 2006 Benchmark

2002 2003 2004 2005 2006

Civilian Labor Force 1,541,400 1,591,600 1,662,500 1,724,700 1,770,500

Civilian Employment 1,445,000 1,489,800 1,564,600 1,633,300 1,684,400

Civilian Unemployment 96,400 101,800 97,900 91,400 86,100

Civilian Unemployment Rate 6.3% 6.4% 5.9% 5.3% 4.9%

Total Farm 20,300 20,300 18,700 18,200 17,200

Total Nonfarm 1,063,700 1,099,200 1,160,000 1,217,100 1,271,200

Total Private 851,000 887,600 947,500 996,800 1,047,000

Goods Producing 207,500 216,300 233,100 243,700 254,900

Natural Resources and Mining 1,200 1,200 1,200 1,300 1,400

Construction 90,900 99,000 111,800 122,200 129,500

Manufacturing 115,400 116,100 120,100 120,200 124,000

Service Providing 856,200 882,900 926,900 973,400 1,016,400

Trade, Transportation and Utilities 225,400 236,300 254,900 273,900 289,000

Wholesale Trade 41,900 43,500 45,600 49,200 53,800

Retail Trade 137,500 142,700 153,800 165,000 171,500

Transportation, Warehousing and Utilities 46,000 50,100 55,500 59,700 63,800

Information 14,100 13,900 14,000 14,400 15,200

Financial Activities 39,500 42,600 45,700 48,700 51,800

Professional and Business Services 106,800 115,400 125,500 132,500 142,200

Educational and Health Services 112,400 115,800 118,400 120,000 122,700

Leisure and Hospitality 107,200 109,000 116,700 122,400 128,700

Other Services 38,100 38,400 39,300 41,200 42,600

Government 212,700 211,600 212,500 220,400 224,200

Total, All Industries 1,084,000 1,119,400 1,178,700 1,235,400 1,288,400

Note: The unemployment rates are calculated using unrounded data. Data may not add due to rounding. Source: State of California Employment Development Department.

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The following table sunnnarizes the labor force, employment and unemployment figures over the past five years for County, the State and the nation as a whole.

COUNTY OF RIVERSIDE, STATE OF CALIFORNIA AND UNITED STATES

Average Annual Civilian Labor Force, Employment and Unemployment

Year and Area Labor Force Employmenl'1

2002 Riverside County 794,500 746,200 California 17,330,700 16,168,200 United States 144,863,000 136,485,000

2003 Riverside County 817,600 768,100 California 17,403,900 16,212,600 United States(4

) 146,510,000 137,736,000

2004 Riverside County 812,000 764,900 California 17,499,600 16,407,900 United States(4

) 147,401,000 139,252,000

2005 Riverside County 848,700 805,800 California 17,695,600 16,746,900 United States(4

) 149,320,000 141,730,000

2006 Riverside County 886,400 842,000 California 17,901,900 17,029,300 United States(4

) 151,558,000 144,618,000

(I) Includes persons involved in labor-management trade disputes. (2) Includes all persons without jobs who are actively seeking work.

Unemploymen/21

48,300 1,162,500 8,378,000

49,500 1,191,300 8,774,000

47,100 1,091,700 8,149,000

42,900 948,700

7,591,000

44,400 872,600

6,800,000

Unemployment Rate (%/31

6.1% 6.7 5.8

6.1% 6.8 6.0

5.8% 6.2 5.5

5.1% 5.4 5.1

5.0% 4.9 4.5

(3) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded

figures in this table. (4) Not strictly comparable with data for prior years.

Source: California Employment Development Department, based on March 2006 benchmark and U.S. Department of Labor, Bureau ofLabor Statistics.

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The following table sets forth the major employers located in the County as of March 27, 2006:

Name

County of Riverside March Air Reserve Base U.C. Riverside Stater Bros. Markets Riverside Unified School District Pechanga Resort & Casino Gindant Corp. Riverside Community College

COUNTY OF RIVERSIDE Major Employers(!)

Employees

Kaiser Permanente Riverside Medical Center Morongo Casino, Resort & Spa

18,291 8,750 6,657 6,125 5,099 4,800 4,500 3,753 3,200 3,000 2,804 2,667 2,600 2,270 2,053

Southern California Edison Temecula Valley Unified School District City of Riverside Hemet Unified School District Eisenhower Medical Center

Type of business or entity

county government government/military educational institution grocery retailer education casino/resort medical device manufacturer higher education healthcare casino & resort electric utility school district city government school district healthcare

(I) The County itself does not directly maintain employment records, but relies upon a variety of independent surveys, as well as upon its own surveys to identify major employers.

Source: The Business Press, Book of Lists 2007.

Effective Buying Income

"Effective Buying Income" is defined as personal income less personal tax and nontax payments, a number often referred to as "disposable" or "after-tax" income. Personal income is the aggregate of wages and salaries, other than labor-related income (such as employer contributions to private pension funds), proprietor's income, rental income (which includes imputed rental income of owner-occupants of non-fann dwellings), dividends paid by corporations, interest income from all sources and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local, nontax payments, fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as "disposable personal income."

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The following table summarizes the total effective buying income for the County, the State and the United States for the period 2001 through 2005.

COUNTY OF RIVERSIDE, STATE OF CALIFORNIA AND THE UNITED STATES Total Effective Buying Income

and Median Household Effective Buyin~ Income For the Years 2001 through 2005 tJ

Total Effective Buying Median Household Income Effective

(000s Omitted/2) Buying Income

2001* Riverside County $ 23,617,301 $ 37,480 California 650,521,407 43,532 United States 5,303,481,498 38,365

2002* Riverside County $ 49,657,853 $ 38,691 California 647,879,427 42,484 United States 5,340,682,818 38,035

2003* Riverside County $ 27,623,743 $ 39,321 California 647,721,020 42,924 United States 5,466,880,008 38,201

2004* Riverside County $ 29,468,208 $ 40,275 California 705,108,410 43,915 United States 5,692,909,567 39,324

2005** Riverside County $ 32,004,438 $ 41,326 California 720,798,122 44,681 United States 5,894,664,154 40,529

(I) Not comparable with prior years. Effective Buying Income is now based on money income (which does not take into account sale of property, taxes and social security paid, receipt of food stamps, etc.) versus personal income.

(2) Dollars in thousands.

Source: * "Survey of Buying Power," Sales & Marketing Management Magazine, dated 2000, 2001, 2002, 2003 and 2004. **"Demographics USA 2006-County Edition," Trade Dimensions International, Inc.

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Retail Sales

The table below presents the County's retail sales for the years from 2002 through 2006.

COUNTY OF RIVERSIDE Taxable Sales Transactions

(In Thousands)

2002 2003 2004 2005 20061 1)

Apparel Stores Group $ 610,388 $ 746,015 $ 876,276 $ 990,129 $ 260,810 General Merchandise Stores 2,459,046 2,671,971 3,026,335 3,304,474 849,950 Specialty Stores Group 1,501,106 1,649,224 1,885,435 2,104,040 548,524 Food Stores Group 967,171 1,028,392 1,079,972 1,197,438 349,320 Eating and Drinking Group 1,559,215 1,713,632 1,940,610 2,157,801 579,917 Household Group 594,049 691,051 862,551 964,629 232,142 Building Material Group 1,427,731 1,678,347 2,226,117 2,424,898 657,192 Automotive Group 4,563,779 5,198,391 6,035,203 6,751,684 1,870,026 Other Retail Stores 568 148 653 929 792 450 944 155 270 885 Retail Stores Total 14,250,733 16,030,952 18,715,949 20,839,212 5,618,766

Business and Personal Services 881,524 944,658 1,041,360 1,118,570 301,344 All Other Outlets 4 366 737 4 733 525 5 479 839 6 298 709 1 795 837 Total All Outlets $19,498,994 $21709135 25237148 28 256 491 7 715 947

(I) Figures thorough second quarter 2006. Source: California State Board of Equalization, Research and Statistics Division.

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APPENDIXD

SUMMARY OF FISCAL AGENT AGREEMENT

The following is a summary of certain provisions of the Fiscal Agent Agreement not otherwise described in the text of this Official Statement. This summary is not intended to be definitive, and reference is made to the text of the Fiscal Agent Agreement for the complete provisions thereof

DEFINITIONS

The following are some of the terms which are defined in the Fiscal Agent Agreement (the "Agreement"). Except as defined below, the terms previously defined in the is Official Statement have the meanings previously given.

"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 ( commencing with Section 53311) of Part I of Division 2 of Title 5 of the California Government Code.

"Annual 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 scheduled to be paid.

"Auditor" means the Auditor-Controller of the County of Riverside.

"Authorized Officer" means any officer or employee of the Services District authorized by the Board of Directors or by an Authorized Officer to undertake the action referenced in the Agreement as required to be undertaken by an Authorized Officer.

"Bond Year" means the period beginning on the Closing Date and ending on September I, 2008 and thereafter the period beginning on each September 2 and ending on the following September I.

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

"Code" means the Internal Revenue Code of 1986, as amended.

"Debt Service" means the amount of interest and principal payable on the Bonds scheduled to be paid during the period of computation, excluding amounts payable during such period which relate to principal of the Bonds which are scheduled to be retired and paid before the beginning of such period.

"Defeasance Securities" means the following:

(i) Cash;

(ii) United States Treasury Certificates, Notes and Bonds (including State and Local Government Series - "SLGs");

(iii) Direct obligations of the United States Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities;

(iv) Resolution Funding Corporation (REFCORP) obligations; provided that only the interest component of REFCORP strips which have been stripped by request of the Federal Reserve Bank of New York in book-entry form are acceptable;

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(v) Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by Standard & Poor's; provided, however, that if the issue is only rated by Standard & Poor's (i.e., there is no Moody's rating), then the pre-refunded bonds must have been pre-refunded with cash, direct United States or United States guaranteed obligations, or "AAA" rated pre-refunded municipal bonds; and

(vi) Obligations issued by the following agencies which are backed by the full faith and credit of the United States of America:

(a) U.S. Export-Import Bank Direct obligations or fully guaranteed certificates of beneficial ownership

(b) Federal Financing Bank

( c) General Services Administration Participation certificates

(d) United States Maritime Administration Guaranteed Title XI financing

(e) United States Department of Housing and Urban Development Project notes Local Authority Bonds New Communities Debentures - United States government guaranteed debentures United States Public Housing Notes and Bonds - United States government guaranteed public housing notes and bonds.

"Federal Securities" means any of the following which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein:

(i) Cash; and

(ii) Direct general obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America and CATS and TIGRS), or obligations, the payment of principal of and interest on which is unconditionally guaranteed by, the United States of America.

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

"Independent Financial Consultant" means a firm of certified public accountants, a financial consulting firm, a consulting engineering firm or engineer which is not an employee of, or otherwise controlled by, the Services District, or the Special Tax Consultant.

"Investment Earnings" means all interest earned and any gains and losses on the investment of moneys in any fund or account created by the Agreement excluding interest earned and gains and losses on the investment of moneys in the Rebate Fund.

"Joint Community Facilities Agreement" means the Joint Community Facilities Agreement, dated as of May 2, 2006, by and between the Services District and the School District.

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

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

"Outstanding," when used as of any particular time with reference to the Bonds, means all Bonds except:

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

(ii) Bonds called for redemption which, for the reasons specified in a specified section of the Agreement, are no longer entitled to any benefit under the Agreement other than the right to receive payment of the redemption price therefor;

(iii) Bonds paid or deemed to have been paid within the meaning of a specified section of the Agreement; and

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

"Owner" means any person who shall be the registered owner of any Outstanding Bond.

"Parity Bonds" means bonds issued by the District for the purpose of accomplishing the defeasance and redemption of all or a portion of the Outstanding Bonds pursuant to a specific section of the Agreement.

"Permitted Investments" means:

(i) Federal Securities;

(ii) Bonds, debentures, notes or other evidence issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself):

(a) U.S. Export-Import Bank Direct obligations or fully guaranteed certificates of beneficial ownership

(b) Federal Financing Bank

(c) Federal Housing Administration Debentures

( d) General Services Administration Participation certificates

(e) Government National Mortgage Association (GNMA) GNMA - guaranteed mortgage-backed bonds GNMA - guaranteed pass-through obligations

(f) U.S. Maritime Administration Guaranteed Title XI financing

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(g) U.S. Department of Housing and Urban Development Project Notes Local Authority Bonds New Communities Debentures - United States government guaranteed debentures U.S. Public Housing Notes and Bonds - United States government guaranteed public housing notes and bonds;

(iii) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit United States government agencies (stripped securities are only permitted if they have been stripped by the agency itself):

(a) Federal Horne Loan Bank System Senior debt obligations

(b) Federal Horne Loan Mortgage Corporation Participation certificates Senior debt obligations

(c) Federal National Mortgage Association Mortgage-backed securities and senior debt obligations

(d) Student Loan Marketing Association Senior debt obligations

(e) Resolution Funding Corporation (REFCORP) obligations

(f) Farm Credit System Consolidated systernwide bonds and notes;

(iv) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by Standard & Poor's of "AAAm-G," "AAA-m" or "AA-m" and, if rated by Moody's, rated "Aaa," "Aal" or "Aa2" by Moody's, including funds for which the Fiscal Agent or any of its affiliates provides investment management services;

(v) Certificates of deposit secured at all times by collateral described in clauses (i) and/or (ii) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the Fiscal Agent on behalf of the Owners of the Bonds must have a perfected first security interest in the collateral;

(vi) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC, including BIF and SAIF;

(vii) Investment agreements with domestic or foreign banks or corporations the long-term debt or claims paying ability of which or, in the case of a guaranteed corporation, the long-term debt, or, in the case of a rnonoline financial guaranty insurance company, the financial strength, of the guarantor is rated in at least the double A category by Standard & Poor's and Moody's; provided that, by the terms of the investment agreement:

(a) interest payments are to be made to the Fiscal Agent at times and in amounts as necessary to pay debt service on the Bonds;

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(b) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven (7) days' prior notice;

( c) the investment agreement shall provide that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof;

(d) the Services District and the Fiscal Agent receive the opinion of domestic counsel (which opinion shall be addressed to the Services District) that such investment agreement is legal, valid, binding and enforceable upon and against the provider in accordance with its terms and of foreign counsel (if applicable) in form and substance acceptable, and addressed to, the Services District;

( e) the investment agreement shall provide that if during its term

(I) the provider's rating by either Standard & Poor's or Moody's falls below "AA-" or "Aa3", respectively, the provider shall, at its option, within ten (10) days of receipt of publication of such downgrade, either (i) collateralize the investment agreement by delivering or transferring in accordance with the applicable state and federal laws ( other than by means of entries on the provider's books) to the Services District, the Fiscal Agent or a third party acting solely as agent therefor (the "Holder of the Collateral") collateral free and clear of any third-party liens or claims, the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to Standard & Poor's and Moody's to maintain an "A" rating in an "A" rated structured financing (with a market value approach); or (ii) assign the investment agreement and all of its obligations thereunder to a financial institution mutually acceptable to the provider and the Services District which is rated either in the first or second highest category by Standard & Poor's and Moody's; and

(2) the provider's rating by either Standard & Poor's or Moody's is withdrawn or suspended or falls below "A-" or "A3", respectively, the provider must, at the direction of the Services District or the Fiscal Agent, within ten (I 0) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the invested funds, in either case with no penalty or premium to the Services District or the Fiscal Agent, as appropriate; and

(f) the investment agreement shall provide and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this shall mean the Holder of the Collateral is in possession of such collateral); and

(g) the investment agreement shall provide that if during its term

(I) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the Services District or the Fiscal Agent, be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the Services District or the Fiscal Agent, as appropriate; and

(2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc., the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the Services District or the Fiscal Agent, as appropriate;

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(viii) Commercial paper rated, at the time of purchase, "Prime - l" by Moody's and "A-1" or better by Standard & Poor's;

(ix) Bonds or notes issued by any state or municipality which are rated by Moody's and Standard & Poor's in one of the two highest rating categories assigned by them;

(x) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime - l" or "A3" or better by Moody's and "A-1" or better by Standard & Poor's;

(xi) Repurchase agreements which satisfy the following criteria:

(a) Repurchase agreements must be between the Services District or the Fiscal Agent and a dealer bank or securities firm which is:

(I) a primary dealer on the Federal Reserve reporting dealer list which is rated "A" or better by Standard & Poor's and Moody's, or

(2) a bank rated "A" or above by Standard & Poor's and Moody's;

(b) The written agreement must include the following:

( 1) Securities which are acceptable for transfer are:

(A) direct obligations of the United States government, or

(B) obligations of federal agencies backed by the full faith and credit of the United States of America ( or the Federal National Mortgage Association (FNMA) or the Federal Horne Loan Mortgage Corporation (FHLMC)),

(2) The collateral must be delivered to the Services District or the Fiscal Agent (if the Fiscal Agent is not supplying the collateral) or a third party acting as agent for the Fiscal Agent (if the Fiscal Agent is supplying the collateral) before or simultaneous with payment (perfection by possession of certificated securities),

(3) (A) The securities must be valued weekly, marked-to-market at current market price plus accrued interest, and

(B) The value of the collateral must be at least equal to one hundred four percent (104%) of the amount of money transferred by the Fiscal Agent to the dealer, bank or securities firm under the agreement plus accrued interest. If the value of the securities held as collateral is reduced below one hundred four percent (104%) of the value of the amount of money transferred by the Fiscal Agent, then additional acceptable securities and/or cash must be provided as collateral to bring the value of the collateral to one hundred four percent (104%); provided, however, that if the securities used as collateral are those of FNMA or FHLMC, then the value of the collateral must be equal to one hundred five percent (105%) of the amount of money transferred by the Fiscal Agent; and

(c) A legal opinion must be delivered to the Services District and the Fiscal Agent that the repurchase agreement meets the requirements of California law with respect to the investment of public funds; and

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(xii) the Local Agency Investment Fund in the State Treasury of the State of California as permitted by the State Treasurer pursuant to Section 16429.1 of the California Government Code.

"Priority Administrative Expense Amount" means the amount of $40,000 that will be deposited in the Administrative Expense Fund for each Fiscal Year.

"Rebate Certificate" means the certificate delivered by the Services District upon the delivery of the Bonds relating to Section 148 of the Code, or any functionally similar replacement certificate.

"Record Date" means the fifteenth (15th) day of the month next preceding the applicable Interest Payment Date whether or not such day is a Business Day.

"Regulations" means the temporary and permanent regulations of the United States Department of the Treasury promulgated under the Code.

"Representation Letter" means the representation letter which the Services District has delivered to The Depository Trust Company ("OTC") with respect to the utilization of the book-entry system maintained by OTC for the issuance and registration of bonds.

"Reserve Requirement" means on any date in any Bond Year the least of (i) ten percent (10%) of the proceeds of the sale of the Bonds, (ii) Maximum Annual Debt Service on the Bonds or (iii) 125 percent of average Annual Debt Service on the Bonds, as determined by the Services District.

"School District" means Corona-Norco Unified School District.

"Special Taxes" or "Special Tax" means the special taxes levied by the Board of Directors on parcels of taxable property within the District pursuant to the Act and the Agreement.

"Special Tax Consultant" means an engineer or financial consultant or other such person or firm with expertise in the apportionment and levy of special taxes in community facilities districts which is employed by the Services District to assist the Services District in levying the Special Taxes.

"Special Tax Fund" means the fund by that name established by the Agreement.

"Special Tax Prepayments" means amounts received by the Services District as prepayments of all or a portion of the Special Tax obligation of a parcel of property in the District.

"Special Tax Revenues" means the proceeds of the Special Taxes received by the Services District, including any scheduled payments, interest and penalties thereon, and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes in the amount of said lien and interest and penalties thereon.

"Surplus Account" means the account by that name established in the Special Tax Fund.

Improvement Fund

IMPROVEMENT FUND; SPECIAL TAX FUND; ADMINISTRATIVE EXPENSE FUND

(A) Creation of Improvement Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the "Community Facilities District No. 30 (Eastvale Area) of Jurupa Community

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Services District Special Tax Bonds Improvement Fund." There are hereby established as separate accounts in the Improvement Fund, to be held by the Fiscal Agent, the "Services District Facilities Account" and the "School District Facilities Account" to the credit of which deposits shall be made as required by another section of the Agreement. Moneys in the Improvement Fund, and all accounts therein, shall be held by the Fiscal Agent for the benefit of the Services District and the School District, as provided below, and shall be disbursed, except as otherwise provided in subsection (D) of this Section, for the payment or reimbursement of the costs of the design, acquisition and construction of the Project.

(B) Procedure for Disbursement.

(I) Services District Facilities Account. Disbursements from the Services District Facilities Account shall be made by the Fiscal Agent upon receipt of an Officer's Certificate which shall:

(a) be identified as a payment requisition and be sequentially numbered, i.e., "Requisition No. " except that no numbering shall be required if the Officer's Certificate is a requisition for the full amount on deposit in the Services District Facilities Account;

(b) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made and the person to which the disbursement is to be paid; and

( c) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed with the Fiscal Agent requesting disbursement, and that the amount being requested is an appropriate disbursement from the Services District Facilities Account.

(2) School District Facilities Account. Disbursements from the School District Facilities Account shall be made by the Fiscal Agent upon receipt of a School District Certificate which shall:

(a) be identified as a payment requisition and be sequentially numbered, i.e., "Requisition No. __ ," except that no numbering shall be required if the School District Certificate is a requisition for the full amount on deposit in the School District Facilities Account;

(b) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made and the person to which the disbursement is to be paid;

( c) certify that the amount required to be disbursed is for payment of costs related to the construction and acquisition of the School District Facilities as described in the Joint Community Facilities Agreement; and

( d) certify that no portion of the amount then being requested to be disbursed was set forth in any School District Certificate previously filed with the Fiscal Agent requesting disbursement, and that the amount being requested is an appropriate disbursement from the School District Facilities Account.

If any amount on deposit in the School District Facilities Account will not be disbursed for payment of the costs of the construction and acquisition of the School District Facilities, the Fiscal Agent shall, upon receipt of written direction from the Services District (upon which the Fiscal Agent may conclusively rely) transfer such amount to the Services District Facilities Account.

(C) Investment. Moneys in the Improvement Fund, and each account therein, shall be invested and deposited in accordance with another section of the Agreement. Investment Earnings

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from amounts on deposit in the Services District Facilities Account shall be retained by the Fiscal Agent in such account to be used for the purposes of such account. Investment Earnings from amounts on deposit in the School District Facilities Account shall be retained by the Fiscal Agent in such account to be used for the purposes of such account.

(D) Closing of Fund. Upon the filing of an Officer's Certificate stating that the portions of the Project which are to be financed with the moneys on deposit in the Services District Facilities Account and the School District Facilities Account have been completed and that all costs of such portions of the Project have been paid or are not required to be paid from the Improvement Fund and all accounts therein, and further stating that moneys on deposit in the Improvement Fund, and all accounts therein, are not needed to complete such portions of the Project or reimburse the cost thereof, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund, and all accounts therein, to the Principal Account of the Bond Fund to be used to pay the principal of the Bonds.

Special Tax Fund

(A) Creation of Special Tax Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the "Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District Special Tax Bonds Special Tax Fund" to the credit of which the Services District shall deposit, within ten (I 0) Business Days after receipt, the Special Tax Revenues received by the Services District, and any other amounts required by a specific section of the Agreement to be deposited therein. There is hereby also established in the Special Tax Fund, as a separate account to be held by the Fiscal Agent, the "Surplus Account" to the credit of which amounts shall be deposited as provided in other sections of the Agreement. Moneys in the Special Tax Fund shall be held in trust by the Fiscal Agent for the benefit of the Services District and the Owners of the Bonds, shall be disbursed as provided below and, pending disbursement, shall be subject to a lien in favor of the Owners of the Bonds.

Notwithstanding the foregoing, any amounts received by the Services District which constitute Special Tax Prepayments shall be transferred by the Services District immediately upon receipt to the Fiscal Agent for deposit by the Fiscal Agent in the Special Tax Prepayments Account.

(B) Disbursements. As soon as practicable after the receipt from the Services District of any Special Tax Revenues, but no later than ten ( 10) Business Days after such receipt, the Fiscal Agent shall withdraw from the Special Tax Fund and deposit in the Administrative Expense Fund an amount which is estimated by the Services District, in a written communication from an Authorized Officer delivered to the Fiscal Agent (upon which the Fiscal Agent may conclusively rely), to be sufficient, together with the amount then on deposit in the Administrative Expense Fund, to pay the Administrative Expenses during the current Fiscal Year; provided, however, that the amount deposited in the Administrative Expense Fund prior to the deposits to the Interest Account and the Principal Account of the Bond Fund, as provided below, shall not exceed $40,000 for any Fiscal Year. From the amount then remaining on deposit in the Special Tax Fund (including the amount, if any, on deposit in the Surplus Account), the Fiscal Agent shall, as soon as the amount on deposit in the Special Tax Fund (including the Surplus Account) is sufficient, deposit in the Reserve Fund the amount, if any, which the Services District shall direct in a written communication from and Authorized Officer delivered to the Fiscal Agent (upon which the Fiscal Agent may conclusively rely), to be withdrawn from the Special Tax Fund and deposited in the Reserve Fund to make the amount on deposit therein equal to the Reserve Requirement. Thereafter, on or before each Interest Payment Date, the Fiscal Agent shall deposit in the Interest Account and the Principal Account of the Bond Fund the amounts required to pay the interest on and principal of the Bonds on such Interest Payment Date, as provided in another section of the Agreement. If after such deposits are made to the Administrative Expense Fund, the Interest Account and the Principal Account there are funds remaining on deposit in the Special Tax Fund (including the Surplus Account), the Services District shall instruct the Fiscal Agent by a written communication from an Authorized Officer (upon which the Fiscal

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Agent may conclusively rely) to transfer such amount from the Special Tax Fund (including the Surplus Account) to and deposit it in the Reserve Fund to the extent that the amount on deposit therein is less than the Reserve Requirement. Such written communication shall specify the amount which is to be transferred from the Special Tax Fund (including the Surplus Account) and deposited in the Reserve Fund.

Notwithstanding the preceding provisions of this subsection, if prior to the September I Interest Payment Date in any Bond Year the Services District determines that Special Tax Revenues, together with the amount, if any, on deposit in the Surplus Account, will be sufficient to enable the Fiscal Agent to deposit in the Reserve Fund the amount, if any, which is necessary to make the amount on deposit therein equal to the Reserve Requirement and deposit in the Bond Fund the full amounts required for deposit to the Interest Account and the Principal Account to pay the interest on and principal of the Bonds on such Interest Payment Date, the Services District may instruct the Fiscal Agent in a written communication from an Authorized Officer, upon which the Fiscal Agent may conclusively rely, to deposit an additional amount in the Administrative Expense Fund before making the required deposits to the Bond Fund and the Reserve Fund, and the Fiscal Agent shall deposit such additional amount in the Administrative Expense Fund before depositing any amount to the Reserve Fund or the Bond Fund.

On or before the March I Interest Payment Date in each Bond Year, if the amount of other moneys which is on deposit in the Special Tax Fund is less than the amount of the interest on the Bonds which is due on such Interest Payment Date, the Fiscal Agent shall transfer moneys from the Surplus Account, to the extent of moneys on deposit therein and available for transfer, to and deposit such moneys in the Interest Account of the Bond Fund in an amount not to exceed the deficiency in the amount of other moneys which are on deposit in the Special Tax Fund, and available for transfer, to pay the full amount of the interest on the Bonds which is due and payable on such Interest Payment Date. On or before the September I Interest Payment Date in each Bond Year, if the amount of moneys which is on deposit in the Special Tax Fund is less than the amount of the interest on and principal of the Bonds which is due on such Interest Payment Date, the Fiscal Agent shall transfer moneys from the Surplus Account, to the extent of moneys on deposit therein and available for transfer, to and deposit such moneys in the Interest Account and the Principal Account in amounts not to exceed the amount of the deficiency in the amount of other moneys which are on deposit in the Special Tax Fund, and available for transfer, to pay the full amount of the interest on and the principal of the Bonds which is due and payable on such Interest Payment Date.

On September 2 of each year, beginning on September 2, 2008, the amount, if any, on deposit in the Special Tax Fund (including the amount on deposit in the Surplus Account), together with the amount then on deposit in the Principal Account of the Bond Fund, as determined by the Services District, shall not exceed the greater of (i) one year's earnings on such amounts, or (ii) one-twelfth (I/12th) of Annual Debt Service for the then current Bond Year. If on September 2 of any year the amount on deposit in the Special Tax Fund (including the Surplus Account), together with the amount then on deposit in the Principal Account, exceeds the maximum amount allowable pursuant to the preceding sentence, as determined by the Services District and communicated in writing by an Authorized Officer to the Fiscal Agent (upon which the Fiscal Agent may conclusively rely), such excess amount shall be transferred from the Special Tax Fund to and deposited in the Reserve Fund to the extent that the amount on deposit therein is less than the Reserve Requirement. Any such excess remaining in the Special Tax Fund after any such amount is transferred to the Reserve Fund shall be transferred to and deposited in the Administrative Expense Fund. On September 2 of each year, after any such excess amount has been transferred as hereinabove provided, the amount on deposit in the Special Tax Fund (including the Surplus Account), together with the amount then on deposit in the Principal Account, shall not exceed in the aggregate the greater of (i) one year's earnings thereon, or (ii) one-twelfth (I/12th) of Annual Debt Service for the then current Bond Year.

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Administrative Expense Fnnd

(A) Creation of Administrative Expense Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the "Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District Special Tax Bonds Administrative Expense Fund" to the credit of which deposits shall be made as required by another section of the Agreement. Moneys in the Administrative Expense Fund shall be held in trust by the Fiscal Agent for the benefit of the Services District, and shall be disbursed as provided below.

(B) Disbursement. Amounts in the Administrative Expense Fund shall be withdrawn by the Fiscal Agent and paid to the Services District or its order upon receipt by the Fiscal Agent of an Officer's Certificate stating the amount to be withdrawn, that such amount is to be used to pay an Administrative Expense ( or a Cost of Issuance) and the nature of such Administrative Expense ( or Cost of Issuance).

Annually, not later than the last day of each Fiscal Year, the Fiscal Agent shall withdraw any amount then remaining in the Administrative Expense Fund that has not been allocated by an Officer's Certificate received by the Fiscal Agent from the Services District to pay Administrative Expenses which are expected to be incurred in the succeeding Fiscal Year prior to the receipt by the Services District of Special Tax Revenues for such succeeding Fiscal Year and transfer such amount to the Surplus Account.

SPECIAL TAX REVENUES; BOND FUND; RESERVE FUND

Pledge of Special Tax Revenues

The Bonds shall be secured by a first and prior pledge of and lien upon ( which shall be perfected in the mauner and to the extent herein provided) all of the Special Tax Revenues ( except the amount of $40,000 which shall be deposited in the Administrative Expense Fund for each Fiscal Year), all moneys on deposit in the Principal Account and the Interest Account of the Bond Fund, all moneys on deposit in the Surplus Account of Special Tax Fund and all moneys on deposit in the Reserve Fund. The Bonds shall be equally secured by a pledge of and lien upon the Special Tax Revenues and such moneys without priority for number, date of Bond, date of execution or date of delivery; and the payment of the interest on and principal of the Bonds and any premium upon the redemption of any thereof shall be and is secured by a first and prior pledge of and lien upon the Special Tax Revenues and such moneys. The Special Tax Revenues and all moneys on deposit in such funds and accounts are dedicated in their entirety to the payment of the principal of the Bonds, and interest and any premium on, the Bonds, as provided in the Agreement and in the Act, until all of the Bonds have been paid and retired or until moneys or Defeasance Securities have been set aside irrevocably for that purpose.

Bond Fund

(A) Creation of Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the "Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District Special Tax Bonds Bond Fund" to the credit of which deposits shall be made as required by certain sections of the Agreement and any other provision of the Agreement or the Act. There are hereby established in the Bond Fund, as separate accounts to be held by the Fiscal Agent, the "Interest Account" and the "Principal Account." There is hereby also established in the Bond Fund, as a separate account to be held by the Fiscal Agent, the "Special Tax Prepayments Account" to the credit of which deposits shall be made as required by a specified section of the Agreement and paragraph (2) of subsection (B) below. Moneys in the Bond Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds

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as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds.

(B) Disbursements.

(I) Bond Fund Disbursements. On or before each Interest Payment Date, the Fiscal Agent shall transfer from the Special Tax Fund (including the Surplus Account) and deposit into the following respective accounts in the Bond Fund the following amounts in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Special Tax Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority:

(a) Interest Account. On or before each Interest Payment Date, the Fiscal Agent shall deposit in the Interest Account the amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest becoming due and payable on the Bonds on such date. No deposit need be made into the Interest Account on any Interest Payment Date if the amount on deposit therein is at least equal to the interest becoming due and payable on the Bonds on such date. All moneys in the Interest Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of paying the interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds redeemed prior to maturity). All amounts on deposit in the Interest Account on the first day of any Bond Year, to the extent not required to pay any interest then having become due and payable on the Outstanding Bonds, shall be withdrawn therefrom by the Fiscal Agent and transferred to the Surplus Account.

(b) Principal Account. On or before each Interest Payment Date which occurs on September 1, the Fiscal Agent shall deposit in the Principal Account the amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Bonds becoming due and payable on such Interest Payment Date pursuant to another section of the Agreement, or the redemption price of the Bonds ( consisting of the principal amount thereof and any applicable redemption premium) required to be redeemed on such date pursuant to any of the provisions of another section of the Agreement. All moneys in the Principal Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of (i) paying the principal of the Bonds at the maturity thereof, or (ii) paying the principal of and premium (if any) on any Bonds upon the redemption thereof pursuant to another section of the Agreement. All amounts on deposit in the Principal Account on the first day of any Bond Year, to the extent not required to pay the principal of any Outstanding Bonds then having become due and payable shall be withdrawn therefrom by the Fiscal Agent and transferred to the Surplus Account.

On the first Business Day following each Interest Payment Date, the Fiscal Agent shall transfer any moneys remaining on deposit in the Bond Fund (including the Interest Account and the Principal Account) other than moneys on deposit in the Special Tax Prepayments Account, to the Surplus Account.

In the event that moneys on deposit in the Special Tax Fund, including moneys on deposit in the Surplus Account, will be insufficient on any Interest Payment Date for the Fiscal Agent to deposit the required amounts in the Interest Account and the Principal Account, as provided above, the Fiscal Agent shall deposit the available funds first to the Interest Account up to the full amount required to cause the aggregate amount on deposit therein to equal the amount of interest becoming due and payable on the Bonds on the Interest Payment Date, and shall then deposit the remaining available funds in the Special Tax Fund, including funds on deposit in the Surplus Account, to the Principal Account up to the full amount required to cause the aggregate amount on deposit therein to equal the amount, if any, of principal becoming due and payable on the Bonds on the Interest Payment Date. If, after making such deposits to the Interest Account and the Principal Account, and after transferring moneys from the Reserve Fund to

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such accouuts, as provided in another section of the Agreement, the arnouut on deposit in the Principal Accouut is insufficient to pay the full amount of the principal of each of the Bonds which is to be redeemed on the Interest Payment Date, the Fiscal Agent shall make a prorated payment of the principal of each of such Bonds as specified in an Officer's Certificate provided to the Fiscal Agent.

On September 2 of each year, beginning on September 2, 2008, the arnouut, if any, on deposit in the Principal Accouut (but not the arnouuts on deposit in the Interest Accouut and the Special Tax Prepayments Accouut), together with the amouuts then on deposit in the Special Tax Fund (including the Surplus Accouut), shall not exceed the greater of (i) one year's earnings on such arnouuts, or (ii) one­twelfth (I/12th) of Annual Debt Service for the then current Bond Year. If on September 2 of any year the arnouut on deposit in the Principal Accouut, together with the arnouuts then on deposit in the Special Tax Fuud (including the Surplus Accouut), exceeds the maximum amount allowable pursuant to the preceding sentence, the excess shall be transferred by the Fiscal Agent, as directed in writing by and Authorized Officer (upon which the Fiscal Agent may conclusively rely), to the Reserve Fuud to the extent that the arnouut on deposit therein is less than the Reserve Requirement, and any such excess remaining thereafter shall be transferred by the Fiscal Agent to the Administrative Expense Fund. On September 2 of each year, after any such excess amouut has been transferred as hereinabove provided, the arnouut on deposit in the Principal Accouut, together with the amouut then on deposit in the Special Tax Fuud, shall not exceed the greater of (i) one year's earnings thereon, or (ii) one-twelfth (I/12th) of Annual Debt Service for the then current Bond Year.

(2) Special Tax Prepayments Account Deposits and Disbursements. Within ten (I 0) Business Days after receiving a Special Tax Prepayment, the Services District shall deliver the amouut thereof to the Fiscal Agent, together with an Officer's Certificate notifying the Fiscal Agent that the arnouut being delivered is a Special Tax Prepayment which is to be deposited in the Special Tax Prepayments Accouut. Upon receiving a Special Tax Prepayment from the Services District and such an Officer's Certificate, the Fiscal Agent shall deposit the arnouut of the Special Tax Prepayment in the Special Tax Prepayments Account. Such an Officer's Certificate may be combined with the Officer's Certificate which the Services District is required to deliver to the Fiscal Agent pursuant to another section of the Agreement. A portion of the moneys on deposit in the Special Tax Prepayments Account shall be transferred by the Fiscal Agent, upon receipt of an Officer's Certificate directing such transfer and specifying the arnouut to be transferred (upon which the Fiscal Agent may conclusively rely), to the Principal Account on the next date for which notice of the redemption of the Bonds can timely be given uuder another section of the Agreement and shall be used to redeem the Bonds on the redemption date selected in accordance with another section of the Agreement. The portion of the moneys on deposit in the Special Tax Prepayments Accouut representing funded interest on a portion of the Outstanding Bonds shall be transferred by the Fiscal Agent, upon receipt of an Officer's Certificate directing such transfer and specifying the arnouut to be transferred (upon which the Fiscal Agent may conclusively rely), to the Interest Accouut on or before each Interest Payment Date prior to and including the Interest Payment Date on which the redemption of such Bonds will occur. Pending such transfers, the moneys on deposit in the Special Tax Prepayments Accouut shall be invested in Permitted Investments of the type and at such yield as Bond Counsel may determine is necessary to preserve the exclusion of interest on the Bonds from gross income for purposes of federal income taxation. Investment Earnings from such Permitted Investments shall be retained by the Fiscal Agent in the Special Tax Prepayments Accouut.

(C) Investment. Moneys in the Bond Fuud, including all accounts therein, shall be invested and deposited in accordance with another section of the Agreement. Investment Earnings shall be retained in the Bond Fuud, except to the extent they are required to be deposited by the Fiscal Agent in the Rebate Fuud. Investment earnings with respect to moneys in the Special Tax Prepayments Accouut shall be retained therein as specified in paragraph (2) of subsection (B) above.

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Reserve Fund

(A) Creation of Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the "Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District Special Tax Bonds Reserve Fund" to the credit of which a deposit shall be made on the Closing Date, which deposit is equal to the Reserve Requirement, and to which deposits shall be made as provided in another section of the Agreement. Moneys in the Reserve Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of the principal of and interest and any premium on the Bonds and shall be subject to a lien in favor of the Owners of the Bonds.

(B) Use of Fund. Except as otherwise provided in this Section, all amounts on deposit in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Interest Account and the Principal Account of the Bond Fund in the event of any deficiency at any time in either of such accounts of the amount then required for payment of the principal of and interest and any premium on the Bonds or for the purpose of redeeming Bonds.

(C) Transfer Due to Deficiency in Interest and Principal Accounts. Whenever transfer is made from the Reserve Fund to the Interest Account or the Principal Account due to a deficiency in either such account, the Fiscal Agent shall provide written notice thereof to the Services District.

(D) Transfer of Excess of Reserve Requirement. Whenever, on any September 2, the total of the amount in the Reserve Fund, less Investment Earnings resulting from the investment of the funds therein which must be rebated to the United States, exceeds the then applicable Reserve Requirement, the Fiscal Agent shall provide written notice to the Services District of the amount of the excess. Upon receiving written direction from an Authorized Officer (upon which the Fiscal Agent may conclusively rely), the Fiscal Agent shall, subject to the requirements with regard to rebate of funds to the United States, transfer an amount from the Reserve Fund which will reduce the amount on deposit therein to an amount equal to the Reserve Requirement to the Interest Account and the Principal Account to be used for the payment of the interest on and principal of the Bonds on the next succeeding Interest Payment Date. After each such transfer, the Services District shall apply the amount thereof to the Special Tax Fund as a credit upon the amount of the Special Taxes which will be levied on parcels of taxable property in the succeeding Fiscal Year to pay Annual Debt Service.

(E) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer (upon which the Fiscal Agent may conclusively rely), transfer the amount in the Reserve Fund to the Interest Account and the Principal Account to be applied, on the next succeeding Interest Payment Date, to the payment and redemption, in accordance with two other sections of the Agreement, as applicable, of all of the Outstanding Bonds. In the event that the amount available to be so transferred from the Reserve Fund to the Interest Account and the Principal Account exceeds the amount required to pay and redeem the Outstanding Bonds, the excess shall be transferred to the Services District to be used for any lawful purpose of the Services District.

(F) Transfers on Payment of Special Tax Obligations. Whenever the Services District receives a Special Tax Prepayment for a lot or parcel of property within the District, the Services District shall by an Officer's Certificate notify the Fiscal Agent thereof and of the amount by which the Reserve Fund is to be reduced and which is transferrable from the Reserve Fund to the Principal Account of the Bond Fund, which amount shall be specified in the Officer's Certificate. Each such Officer's Certificate shall be accompanied by a report of an Independent Financial Consultant verifying the accuracy of the calculation of the amount to be transferred from the Reserve Fund to the Principal Account ("Verification"). Upon receipt of each such Officer's Certificate and Verification, upon which the Fiscal

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Agent may conclusively rely, the Fiscal Agent shall at such time as the amount of such Special Tax Prepayment will be used to redeem Bonds, as provided in another section of the Agreement, transfer the amount specified in such Officer's Certificate to the Principal Account and use such amount, together with the amount of such Special Tax Prepayment, to redeem Bonds, as provided in another section of the Agreement. Notwithstanding the preceding provisions of this subsection, no amount shall be transferred from the Reserve Fund to the Principal Account if the amount on deposit in the Reserve Fund is, or as a result of such transfer would be, less than the Reserve Requirement.

(G) Investment. Moneys on deposit in the Reserve Fund shall be invested in Permitted Investments which do not have maturities extending beyond five (5) years; provided, however, if the Reserve Fund is invested in an investment agreement (as defined in clause (vii) of the definition of Permitted Investments) or a repurchase agreement (as defined in clause (xi) of such definition) such agreement may have a maturity longer than five ( 5) years if the Fiscal Agent is authorized by the provisions of such agreement to draw the full amount thereof, without penalty, if required for the purposes of the Reserve Fund. The Services District shall cause the Permitted Investments, other than such an investment or repurchase agreement, in which moneys on deposit in the Reserve Fund are invested to be valued at fair market value and marked-to-market at least once in each Fiscal Year. Investment Earnings shall be retained in the Reserve Fund to be used for the purposes of such fund, except to the extent they are required to be deposited by the Fiscal Agent in the Rebate Fund.

OTHER COVENANTS OF THE SERVICES DISTRICT

Punctual Payment

The Services District will punctually pay or cause to be paid the principal of and interest and any premium on the Bonds when and as due in strict conformity with the terms of the Agreement and any Supplemental Agreement to the extent that the Special Tax Revenues are available therefor, and it will faithfully observe and perform all of the conditions, covenants and requirements of the Agreement and all Supplemental Agreements and of the Bonds.

Special Obligation

The Bonds are special obligations of the Services District and the District and are payable solely from and secured solely by the Special Tax Revenues and the amounts in the Bond Fund, the Reserve Fund and the Special Tax Fund, including the Surplus Account.

Extension of Time for Payment

In order to prevent any accumulation of claims for interest after maturity, the Services 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 shall be extended or funded, whether or not with the consent of the Services District, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of the 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 been so extended or funded.

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Against Encnmbrances

The Services District shall not encumber, pledge or place any charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien created for the benefit of the Bonds, except as permitted by the Agreement.

Books and Accounts

The Services District shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Services District in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Administrative Expense Fund. Such books of record and accounts shall at all times during business hours, upon reasonable notice, be subject to the inspection of the Fiscal Agent (which shall have not duty to inspect) and the Owners of not less than ten percent (10%) of the aggregate principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.

Protection of Security and Rights of Owners

The Services 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 Services District, the Bonds shall be incontestable by the Services District.

Collection of Special Tax Revenues

The Services District shall comply with all requirements of the Act, including the enactment of necessary Ordinances, so as to assure the timely collection of Special Tax Revenues, including without limitation, the enforcement of the payment or collection of delinquent Special Taxes.

On or within five (5) Business Days of May 1 of each year, the Fiscal Agent shall provide the Services District with a notice stating the amount then on deposit in the Special Tax Fund, the Bond Fund and the Reserve Fund. The receipt of such notice by the Services District or the failure of the Fiscal Agent to give such notice shall in no way affect the obligations of the Services District under the following two paragraphs. The Fiscal Agent shall have no liability if it does not provide such notice to the Services District. Upon receipt of such notice, the Services District shall communicate with the Auditor to ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current Fiscal Year.

The Services District shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Act by August 1 of each year ( or such later date as may be authorized by the Act or any amendment thereof) that the Bonds are Outstanding, such that the computation of the levy is complete before the final date on which the Auditor will accept the transmission of the Special Tax amounts for the parcels within the District for inclusion on the tax roll for the Fiscal Year then beginning. Upon the completion of the computation of the amounts of the levy of the Special Taxes, the Services District shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the tax roll. Notwithstanding the preceding provisions of this paragraph, the Board of Directors may elect, as permitted by the Act, to collect the Special Taxes to be levied for any Fiscal Year directly from the owners of the parcels of taxable property upon which the Special Taxes are levied rather than by transmitting the Special Taxes to the Auditor for collection on the tax roll; provided that, in such event, the Services District shall otherwise comply with the provisions of this Section.

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The Services District shall fix and levy the amount of Special Taxes within the District required for the payment of the principal of and interest on any Outstanding Bonds becoming due and payable during the ensuing calendar year, including any necessary replenishment or expenditure of the Reserve Fund, and the amount estimated to be sufficient to pay the Administrative Expenses during such calendar year. The Special Taxes so levied shall not exceed the authorized amounts as provided in the proceedings for the formation of the District.

The Special Taxes shall be payable and be collected ( except in the event of judicial foreclosure proceedings) in the same manner and at the same time and in the same instalhnents as the general taxes on real property are payable, and have the same priority, 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.

The Services District will not, in collecting the Special Taxes or in processing any such judicial foreclosure proceedings, exercise any authority which it has pursuant to Sections 53340, 53344.1, 53344.2, 53356.1 and 53356.8 of the California Government Code in any manner which would materially and adversely affect the interests of the Bondowners and, in particular, will not permit the tender of Bonds in full or partial payment of any Special Taxes except upon receipt of a certificate of an Independent Financial Consultant that to accept such tender will not result in the Services District having insufficient Special Tax Revenues to pay the principal of and interest on the Bonds remaining Outstanding following such tender.

Reduction of Maximum Special Tax Rates

The Services District covenants that, to the extent that it is legally permitted to avoid doing so, it will not initiate and conduct proceedings to reduce the maximum rates of Special Taxes which are authorized to be levied on taxable parcels or property within the District ( the "Maximum Rates").

The Services District further covenants that in the event an ordinance is adopted by initiative pursuant to Section 3 of Article XIII C of the California Constitution, which purports to reduce or otherwise alter the Maximum Rates, it will commence and pursue legal action seeking to preserve its ability to comply with its covenant contained in the preceding paragraph.

Further Assurances

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

Tax Covenants

The Services District covenants that:

(A) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of the initial issuance and delivery of the Bonds, would have caused any of the Bonds to be "arbitrage bonds" within the meaning of Section I 03(b) and Section 148 of the Code;

(B) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would result in loss of exclusion from gross income for purposes of federal income taxation under Section I 03(a) of the Code of interest paid with respect to the Bonds;

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(C) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would have caused any of the Bonds to be "private activity bonds" within the meaning of Section 141 of the Code;

(D) It will comply with the Rebate Certificate as a source of guidance for achieving compliance with the Code; and

(E) In order to maintain the exclusion from gross income for purposes of federal income taxation of interest paid with respect to the Bonds, it will comply with each applicable requirement of Section 103 and Sections 141 through 150 of the Code.

The covenants of the Services District contained in this Section shall survive the payment, redemption or defeasance of the Bonds.

Prepayment of Special Taxes

The Services District shall cause all applications of owners of property in the District to prepay and satisfy the Special Tax obligation for their property to be reviewed by the Special Tax Consultant and shall not accept any such prepayment unless such consultant certifies in writing that the total amount of the Maximum Special Tax for Debt Service and Facilities (as defined in the Rates and Method of Apportionment of Special Tax for the District) that may be levied on Taxable Property both prior to and after the proposed prepayment is and will be at least 1.1 times the amount of Maximum Annual Debt Service on all Outstanding Bonds plus the Priority Administrative Expense Amount. For purposes of this Section, Taxable Property means all parcels of property in the District that are not exempt from the levy of the Special Tax pursuant to the Act or the Rates and Method of Apportionment of Special Tax for the District.

Notwithstanding the preceding provisions of this Section or the provisions of another section of the Agreement ("Section 3.04(B)"), the District covenants that if the prepayment of the Special Tax obligation for any parcel of Taxable Property in the District pursuant to the Rates and Method of Apportionment of Special Tax for the District (the "Rates and Method of Apportionment") will result in the total amount of the Maximum Special Tax for Debt Service and Facilities (as defined in the Rates and Method of Apportionment) that may be levied on all parcels of Taxable Property after the proposed prepayment being less than 1.1 times the amount of Maximum Annual Debt Service on all Outstanding Bonds plus the Priority Administrative Expense Amount, the deposit of the Priority Administrative Expense Amount in the Administrative Expense Fund pursuant to Section 3.04(B) shall thereafter be subordinate to the deposits in the Reserve Fund, the Interest Account and the Principal Account that are provided for in Section 3.04(B), and no deposit shall be made to the Administrative Expense Fund until all such deposits are made in the Reserve Fund, the Interest Account and the Principal Account.

Calculation of Prepayments

The Services District will cause all Special Tax Prepayments to be calculated to include the amount of the premium on the Outstanding Bonds that will be redeemed with the Special Tax Prepayment and negative arbitrage on the investment of the Special Tax Prepayment from the date of receipt until the Interest Payment Date upon which the Special Tax Prepayment and the amount to be transferred from the Reserve Fund to the Principal Account pursuant to another section of the Agreement will be used to redeem Outstanding Bonds. The Services District will not include in any calculation of the amount of any Special Tax Prepayment for any parcel of taxable property in the District a proportionate amount of the amount then on deposit in the Reserve Fund, if at the time of such calculation the amount on deposit in the Reserve Fund is less than the Reserve Requirement.

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Issuance of Parity Bonds

The Services District will not issue Parity Bonds for any purpose other than accomplishing the defeasance and redemption of all or a portion of the Outstanding Bonds.

Accountability Measures

The Services District shall comply with the requirements of Section 53410 of the California Goverrnnent Code with respect to the deposit and expenditure of the Proceeds of the sale of the Bonds and shall cause the appropriate officer of the Services District to file a report with the Board of Directors no later than January 2, 2008, and annually thereafter, which shall contain the information required by Section 53411 of the California Goverrnnent Code with respect to the expenditure of the Proceeds and the status of the construction and acquisition of the Project.

INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS

Deposit and Investment of Moneys in Funds

Subject in all respects to the provisions of the section of the Agreement regarding the Rebate Fund, moneys in any fund or account created or established by the Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer's Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest any such moneys in Permitted Investments described in paragraph (iv) in the definition of Permitted Investments. The Fiscal Agent shall not have any responsibility for determining the legality of any Permitted Investments. The Fiscal Agent shall have no obligation to pay additional interest or maximize investment income on any funds held by it. Neither the Services District nor the Owners of the Bonds shall have any claim of any kind against the Fiscal Agent in connection with investments properly made pursuant to this Section. Obligations purchased as an investment of moneys in any fund or account shall be deemed to be part of such fund or account, subject, however, to the requirements of the Agreement for transfer of Investment Earnings in funds and accounts.

The Fiscal Agent and its affiliates may act as sponsor, advisor, depository, principal or agent in the holding, acquisition or disposition of any investment. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to this Section. For purposes of determining the amount on deposit in any fund or account held hereunder, all Permitted Investments credited to such fund or account shall be valued at the cost thereof ( excluding accrued interest and brokerage commissions, if any).

Subject in all respects to the provisions of the Agreement, investments in any and all funds and accounts may be commingled in a single fund for purposes of making, holding and disposing of investments, notwithstanding provisions of the Agreement for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent hereunder, 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 Agreement.

The Fiscal Agent shall sell at the highest price reasonably obtainable (provided that the highest of any three bids received by the Fiscal Agent shall be deemed 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

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investment security is credited, and the Fiscal Agent shall not be liable or responsible for any loss resulting from the acquisition or disposition of any such investment security in accordance herewith.

The Services District acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Services District the right to receive brokerage confirmations of security transactions as they occur, the Services District specifically waives receipt of such confirmations to the extent permitted by law. The Fiscal Agent shall furnish the Services District period cash transaction statements which include detail for all investment transactions made by the Fiscal Agent hereunder.

The Fiscal Agent may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or any affiliate.

Rebate Fund; Rebate to the United States

There is hereby created, to be held by the Fiscal Agent, as a separate fund distinct from all other funds and accounts held by the Fiscal Agent under the Agreement, the Rebate Fund. The Fiscal Agent shall, in accordance with written directions received from an Authorized Officer, deposit into the Rebate Fund moneys transferred by the Services District to the Fiscal Agent pursuant to the Rebate Certificate or moneys transferred by the Fiscal Agent from the Bond Fund or the Reserve Fund. The Rebate Fund shall be held either uninvested or invested only in Federal Securities at the written direction of the Services District. Moneys on deposit in the Rebate Fund shall be applied only to payments made to the United States, to the extent such payments are required by the Rebate Certificate. The Fiscal Agent shall, upon written request and direction of the Services District, make such payments to the United States.

The Fiscal Agent's sole responsibilities under this Section are to follow the written instructions of the Services District pertaining hereto. The Services District shall be responsible for any fees and expenses incurred by the Fiscal Agent pursuant to this Section.

The Fiscal Agent shall, upon written request and direction from the Services District, transfer to or upon the order of the Services District any moneys on deposit in the Rebate Fund in excess of the amount, if any, required to be maintained or held therein in accordance with the Rebate Certificate.

THE FISCAL AGENT

Appointment of Fiscal Agent

The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in the Agreement, and no implied covenants or obligations shall be read into the Agreement against the Fiscal Agent.

Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of this Section, shall be the successor to the Fiscal Agent without the execution or filing of any paper or any further act, anything in the Agreement to the contrary notwithstanding.

The Services District may remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company having a combined capital ( exclusive of borrowed capital) and surplus of at least $50,000,000,

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and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section, combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

The Fiscal Agent may at any time resign by giving written notice to the Services District and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the Services District shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent.

If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section within forty-five (45) days after the Fiscal Agent shall have given to the Services District written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent, at the expense of the Services District, or any Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent.

Liability of Fiscal Agent

The recitals of facts, covenants and agreements in the Agreement and in the Bonds contained shall be taken as statements, covenants and agreements of the Services District and the District, and the Fiscal Agent assumes no responsibility for the correctness of the same, nor makes any representations as to the validity or sufficiency of the Agreement or of the Bonds, nor shall the Fiscal Agent incur any responsibility in respect thereof, other than in connection with the duties or obligations in the Agreement or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds.

In the absence of bad faith, the Fiscal Agent 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 Fiscal Agent and conforming to the requirements of the Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of the Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of the Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument.

The Fiscal Agent shall not be liable for any error of judgment made in good faith by the Fiscal Agent unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts.

No provision of the Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers.

The Fiscal Agent shall not be responsible for accounting for, or paying to, any party to the Agreement, including, but not limited to the Services District and the Owners, any returns on or benefit

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from funds held for payment of unredeemed Bonds or outstanding checks and no calculation of the same shall affect, or result in any offset against, fees due to the Fiscal Agent under the Agreement.

The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by the Agreement at the request or direction of any of the Owners pursuant to the Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

The Fiscal Agent may become the owner of the Bonds with the same rights it would have if it were not the Fiscal Agent.

All indemnification and releases from liability granted in the Agreement to the Fiscal Agent shall extend to the directors, officers and employees of the Fiscal Agent.

MODIFICATION OR AMENDMENT OF THE AGREEMENT

Amendments Permitted

(A) The Agreement and the rights and obligations of the District and the Services 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 the Owners, or with the written consent, without a meeting, of the Owners of at least sixty percent ( 60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in the Agreement. No such modification or amendment shall (i) extend the maturity of any Bond or the time for paying interest thereon, or otherwise alter or impair the obligation of the Services District on behalf of the District to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, (ii) permit the creation of any pledge of or lien upon the Special Tax Revenues, or the moneys on deposit in the Special Tax Fund, the Bond Fund or the Reserve Fund, 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 laws of the State of California or the Agreement), (iii) reduce the percentage of Bonds required for the amendment of the Agreement, or (iv) reduce the principal amount of or redemption premium on any Bond or reduce the interest rate thereon. Any such amendment may not modify any of the rights or obligations of the Fiscal Agent without its written consent. The Services District shall deliver to the Fiscal Agent an opinion of counsel that any such Supplemental Agreement entered into by the Services District and the Fiscal Agent complies with the provisions of this Section and the Fiscal Agent may conclusively rely on such opinion.

(B) The Agreement and the rights and obligations of the District and the Services District and 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:

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

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

(3) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provisions of the Agreement, or in regard to questions arising

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under the Agreement, as the Services District and the Fiscal Agent may deem necessary or desirable and not inconsistent with the Agreement, and which shall not adversely affect the rights of the Owners;

( 4) to make such additions, deletions or modifications as may be necessary or desirable to assure compliance with Section 148 of the Code relating to required rebate of moneys to the United States or otherwise as may be necessary to assure exclusion from gross income for federal income tax purposes of interest on the Bonds or to conform with the Regulations; or

( 5) to provide for the issuance of Parity Bonds to pay and discharge the indebtedness of a portion of the Outstanding Bonds (a "Partial Discharge"); provided that following the issuance of such Parity Bonds Maximum Annual Debt Service on the Bonds that will remain Outstanding following such Partial Discharge and such Parity Bonds will not be more in any subsequent Bond Year than Maximum Aunual Debt Service on the Outstanding Bonds before the issuance of such Parity Bonds.

Owners' Meetings

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

Procedure for Amendment with Written Consent of Owners

The Services District and the Fiscal Agent may at any time enter into a Supplemental Agreement amending the provisions of the Bonds or of the Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by the Agreement, to take effect when and as provided in this Section. A copy of the Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, postage prepaid, by the Fiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of the Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided.

Such a Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding ( exclusive of Bonds disqualified as provided in the Agreement) and a notice shall have been mailed as hereinafter in this Section provided. 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 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 hereinafter in this Section provided for has been mailed.

After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the Services District shall mail a notice to the Owners in the manner hereinbefore provided in this Section 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 documents required by this Section 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 hereinabove specifically provided in this Article) upon the Services District, the District and the

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Owners of all Bonds then Outstanding at the expiration of sixty (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 sixty (60)-day period.

Effect of Supplemental Agreement

From and after the time any Supplemental Agreement becomes effective pursuant to this Article, the Agreement shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under the Agreement of the Services District and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder 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 Agreement for any and all purposes.

MISCELLANEOUS

Discharge of Agreement

If the Services District shall pay and discharge the entire indebtedness on all or a portion ( a "Partial Discharge") of the Outstanding Bonds or both in any one or more of the following ways:

(A) by well and truly paying or causing to be paid the principal of and interest and any premium on such Bonds, as and when the same become due and payable;

(B) by depositing with the Fiscal Agent, in trust, at or before maturity, an amount of money which, together with the amounts then on deposit in the Bond Fund, the Special Tax Fund, and the Reserve Fund, or in the event of a Partial Discharge, the appropriate portion of such amounts, as determined by the Services District and confirmed by an Independent Financial Consultant, is fully sufficient to pay all such Bonds, including all principal, interest and redemption premiums, if any; or

(C) by irrevocably depositing with the Fiscal Agent, in trust, cash or non-callable Defeasance Securities in such amount as the Services District shall determine, as confirmed by an Independent Financial Consultant, will, together with the interest to accrue thereon and amounts then on deposit in the Bond Fund, the Special Tax Fund, and the Reserve Fund, or in the event of a Partial Discharge, the appropriate portion of such amounts, as determined by the Services District and confirmed by an Independent Financial Consultant, be fully sufficient to pay and discharge the indebtedness on all such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates;

and if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in the 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 Services District, and notwithstanding that any such Bonds shall not have been surrendered for payment, the pledge of the Special Tax Revenues and other funds provided for in the Agreement and all other obligations of the Services District and the District under the Agreement with respect to such Bonds shall cease and terminate, except the obligation of the Services District to pay or cause to be paid to the Owners of such Bonds not so surrendered and paid all sums due thereon, the obligation of the Services District to pay all amounts owing to the Fiscal Agent pursuant to the Agreement, and the obligations of the Services District pursuant to the covenants to comply with certain sections of the Code to maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds; and thereafter Special Tax Revenues shall not be payable to the Fiscal Agent with respect to such Bonds. Notice of such election shall be filed with the Fiscal Agent.

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The satisfaction and discharge of the Agreement as to all of the Outstanding Bonds shall be without prejudice to the rights of the Fiscal Agent to charge and be reimbursed by the Services District for the expenses which it shall thereafter incur in connection herewith.

Any funds held by the Fiscal Agent to pay and discharge the indebtedness on such Bonds, upon payment of all fees and expenses of the Fiscal Agent, which are not required for such purpose, shall be paid over to the Services District.

Execution of Documents and Proof of Ownership

Any request, declaration or other instrument which this 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 herein expressly provided, the fact and date of the execution by any Owner or his attorney of such a request, declaration or other instrument, or of a writing appointing such an 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 a notary public or other officer.

Except as otherwise herein expressly provided, 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.

Any 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 Services District or the Fiscal Agent in good faith and in accordance therewith.

Unclaimed Moneys

Anything contained herein to the contrary notwithstanding, any moneys held by the Fiscal Agent for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when the payment of such principal, interest and premium have become payable, if such moneys were held by the Fiscal Agent at such date, shall be paid by the Fiscal Agent to the Services District as its absolute property free from any trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Owners of such Bonds shall look only to the Services District for the payment of the principal of, and interest and any premium on, their Bonds.

Payment of Business Day

In any case where the date of the payment of interest on or of principal (and premium, if any) of the Bonds or the date fixed for redemption is other than a Business Day, the payment of interest or principal ( and premium, if any) need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required, and no interest shall accrue for the period from and after such date.

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APPENDIXE

FORM OF DISCLOSURE AGREEMENT

This Disclosure Agreement (the "Disclosure Agreement"), dated as of October 1, 2007, is executed and delivered by Jurupa Community Services District for and on behalf of Community Facilities District No. 30 of the Jurupa Community Services District (the "Issuer") and Digital Assurance Certification, L.L.C., as exclusive Disclosure Dissemination Agent (the "Disclosure Dissemination Agent" or "DAC") for the benefit of the Holders (hereinafter defined) of the Bonds (hereinafter defined) and in order to provide certain continuing disclosure with respect to the Bonds in accordance with Rule 15c2-12 of the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time (the "Rule").

SECTION 1. Definitions.

Capitalized terms not otherwise defined in this Disclosure Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the following meanings:

"Annual Report" means an Annual Report described in and consistent with Section 3 of this Disclosure Agreement.

"Annual Filing Date" means the date, set in Sections 2(a) and 2(f), by which the Annual Report is to be filed with the Repositories.

"Annual Financial Information" means annual financial information as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(a) of this Disclosure Agreement.

"Audited Financial Statements" means the financial statements (if any) of the Issuer for the prior fiscal year, certified by an independent auditor as prepared in accordance with generally accepted accounting principles or otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of this Disclosure Agreement.

"Bonds" means the bonds as listed on the attached Exhibit A, with the 9-digit CUSIP numbers relating thereto.

"Certification" means a written certification of compliance signed by the Disclosure Representative stating that the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice delivered to the Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice required to be submitted to the Repositories under this Disclosure Agreement. A Certification shall accompany each such document submitted to the Disclosure Dissemination Agent by the Issuer and include the full name of the Bonds and the 9-digit CUSIP numbers for all Bonds to which the document applies.

"Disclosure Representative" means the General Manager, the senior member of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Disclosure Dissemination Agent from time to time as the person responsible for providing Information to the Disclosure Dissemination Agent.

"Disclosure Dissemination Agent" means Digital Assurance Certification, L.L.C., acting in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure Dissemination Agent designated in writing by the Issuer pursuant to Section 9 hereof.

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"Fiscal Agent" means the institution identified as such in the document under which the Bonds were issued.

"Holder" means any person (a) having the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds for federal income tax purposes.

"Information" means the Annual Financial Information, the Audited Financial Statements (if any) the Notice Event notices, and the Voluntary Reports.

"Notice Event" means an event listed in Sections 4(a) of this Disclosure Agreement.

"MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(l) of the Securities Exchange Act of 1934.

''National Repository'' means any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. The list of National Repositories maintained by the United States Securities and Exchange Commission shall be conclusive for purposes of determining National Repositories. Currently, the following are National Repositories:

I. DPC Data Inc. One Executive Drive Fort Lee, New Jersey 07024 Tel: (201) 346-0701 Fax: (201) 947-0107 Email: nrmsir@dpcdata.com

2. Interactive Data I 00 Williams Street New York, New York 10038 Attn: Repository Tel: (212) 771-6999 Fax: (212) 771-7391 (primary market information) Fax: (212) 771-7390 (secondary market information) Email: nrmsir@ftid.com

3. Bloomberg Municipal Repositories P.O. Box 840 Princeton, New Jersey 08542-0840 Tel: (609) 279-3225 Fax: (609) 279-5962 Email: munis@bloomberg.com

4. Standard & Poor's J.J. Kenny Repository 55 Water Street, 45 th Floor NewYork,NewYork 10041 Tel: (212) 438-4595 Fax: (212) 438-3975 Email: nrmsir _repository@sandp.com

"Official Statement" means that Official Statement prepared by the Issuer in connection with the Bonds, as listed on Appendix A.

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"Repository" means the MSRB, each National Repository and the State Depository (if any).

"State Depository" means any public or private depository or entity designated by the State from time to time for the purpose of the Rule as a state information depository (if any).

"Voluntary Report" means the information provided to the Disclosure Dissemination Agent by the Issuer pursuant to Section 7.

SECTION 2. Provision of Annual Reports.

(a) The Issuer shall provide, annually, an electronic copy of the Aunual Report and Certification to the Disclosure Dissemination Agent, together with a copy for the Fiscal Agent, not later than 30 days prior to the Annual Filing Date. Promptly upon receipt of an electronic copy of the Annual Report and the Certification, the Disclosure Dissemination Agent shall provide an Annual Report to each National Repository and the State Depository (if any) not later than 330 days after the end of each fiscal year of the Issuer, commencing with the fiscal year ending June 30, 2007. Such date and each anniversary thereof is the Aunual Filing Date. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 3 of this Disclosure Agreement.

(b) If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure Dissemination Agent has not received a copy of the Annual Report and Certification, the Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone and in writing (which may be by e-mail) to remind the Issuer of its undertaking to provide the Annual Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representative shall either (i) provide the Disclosure Dissemination Agent with an electronic copy of the Aunual Report and the Certification) no later than two (2) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in writing that the Issuer will not be able to file the Aunual Report within the time required under this Disclosure Agreement, state the date by which the Aunual Report for such year will be provided and instruct the Disclosure Dissemination Agent that a Notice Event as described in Section 4(a)(12) has occurred and to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B.

( c) If the Disclosure Dissemination Agent has not received an Aunual Report and Certification by 12:00 noon on the first business day following the Annual Filing Date for the Aunual Report, a Notice Event described in Section 4(a)(12) shall have occurred and the Issuer irrevocably directs the Disclosure Dissemination Agent to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B.

(d) If Audited Financial Statements of the Issuer are prepared but not available prior to the Annual Filing Date, the Issuer shall, when the Audited Financial Statements are available, provide in a timely manner an electronic copy to the Disclosure Dissemination Agent, accompanied by a Certificate, together with a copy for the Fiscal Agent, for filing with each National Repository and the State Depository (if any).

(e) The Disclosure Dissemination Agent shall:

(i) determine the name and address of each Repository each year prior to the Aunual Filing Date;

(ii) upon receipt, promptly file each Aunual Report received under Section 2(a) with each National Repository, and the State Depository, (if any);

(iii) upon receipt, promptly file each Audited Financial Statement received under Section 2(d) with each National Repository, and the State Depository (if any);

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(iv) upon receipt, promptly file the text of each disclosure to be made with each National Repository or the MSRB and the State Depository (if any) together with a completed copy of the MSRB Material Event Notice Cover Sheet in the form attached as Exhibit C, describing the event by checking the box indicated below when filing pursuant to the Section of this Disclosure Agreement indicated:

1. "Principal and interest payment delinquencies," pursuant to Sections 4(c) and 4(a)(l);

2. "Non-Payment related defaults," pursuant to Sections 4(c) and 4(a)(2);

3. "Unscheduled draws on debt service reserves reflecting financial difficulties," pursuant to Sections 4( c) and 4( a)(3 );

4. "Unscheduled draws on credit enhancements reflecting financial difficulties," pursuant to Sections 4( c) and 4(a)(4);

5. "Substitution of credit or liquidity providers, or their failure to perform," pursuant to Sections 4( c) and 4(a)(5);

6. "Adverse tax opinions or events affecting the tax-exempt status of the security," pursuant to Sections 4( c) and 4(a)(6);

7. "Modifications to rights of securities holders," pursuant to Sections 4( c) and 4(a)(7);

8. "Bond calls," pursuant to Sections 4( c) and 4(a)(8);

9. "Defeasances," pursuant to Sections 4( c) and 4(a)(9);

10. "Release, substitution, or sale of property securing repayment of the securities," pursuant to Sections 4(c) and 4(a)(l O);

1 I. "Ratings changes," pursuant to Sections 4(c) and 4(a)(l l);

12. "Failure to provide annual financial information as required," pursuant to Section 2(b )(ii) or Section 2(c), together with a completed copy of Exhibit B to this Disclosure Agreement;

13. "Other material event notice (specify)," pursuant to Section 7 of this Agreement, together with the summary description provided by the Disclosure Representative.

(v) provide the Issuer evidence of the filings of each of the above when made, which shall be by means of the DAC system, for so long as DAC is the Disclosure Dissemination Agent under this Disclosure Agreement.

(f) The Issuer may adjust the Annual Filing Date upon change of its fiscal year by providing written notice of such change and the new Annual Filing Date to the Disclosure Dissemination Agent, Fiscal Agent (if any) and the Repositories, provided that the period between the existing Annual Filing Date and new Annual Filing Date shall not exceed one year.

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SECTION 3. Content of Annual Reports.

(a) Each Annual Report shall contain Annual Financial Information with respect to the Issuer, including the following:

(i) the principal amount of Bonds outstanding as of September 30 of each year;

(ii) the balance in each fund under the Fiscal Agent Agreement as of the September 30 preceding the filing of the Annual Report, including the Reserve Fund and a statement of the Reserve Requirement;

(iii) an update of the information set forth in Table 2-Direct and Overlapping Debt of the Official Statement until all lots in the District have been sold to individual homeowners;

(iv) a summary of the Special Taxes levied on Undeveloped Property and Developed Property ( as defined in the Rates and Method) within the District and the assessed value of such land, as shown on the assessment roll of the Riverside County Assessor last equalized prior to the September 30 next preceding the Annual Report Date;

(v) the number of building permits issued for property located in the District, until building permits have been issued for all lots in the District;

(vi) any changes to the Rates and Method of Apportionment of the Special Tax approved or submitted to the electors for approval prior to the filing of the Annual Report;

(vii) the status of any foreclosure actions being pursued by the District with respect to delinquent Special Taxes;

(viii) information regarding the percentage of delinquency, if any, in the collection of Special Taxes levied on property in the District for the Fiscal Year preceding the Annual Filing Date.

(ix) any information not already included under (i) through (viii) above that the Issuer is required to file in its annual report to the California Debt and lnvestruent Advisory Commission pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended.

In addition to any of the information expressly required to be provided under paragraph ( a) of this Section, the District shall provide such further information, if any, as may be necessary to make the specifically required statements set forth in clauses (i) to (viii), in the light of the circumstances under which they were made, not misleading.

(b) Audited Financial Statements prepared in accordance with GAAP or alternate accounting principles as described in the Official Statement will be included in the Annual Report. Unaudited financial statements, prepared in accordance with generally accepted accounting principles ("GAAP") or alternate accounting principles as described in the Official Statement will be included in the Annual Report. Audited Financial Statements (if any) will be provided pursuant to Section 2(d).

Any or all of the items listed above may be included by specific reference from other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been previously filed with each of the National Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The Issuer will clearly identify each such document so incorporated by reference.

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SECTION 4. Reporting of Notice Events.

(a) The occurrence of any of the following events, if material, with respect to the Bonds constitutes a Notice Event:

1. Principal and interest payment delinquencies;

2. Non-payment related defaults;

3. Unscheduled draws on debt service reserves reflecting financial difficulties;

4. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties;

5. Substitution of credit or liquidity providers, or their failure to perform;

6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds;

7. Modifications to rights of Bond holders;

8. Bond calls;

9. Defeasances;

10. Release, substitution, or sale of property securing repayment of the Bonds;

11. Rating changes on the Bonds; and

12. Failure to provide annual financial information as required.

The Issuer shall promptly notify the Disclosure Dissemination Agent in writing upon the occurrence of a Notice Event. Such notice shall instruct the Disclosure Dissemination Agent to report the occurrence pursuant to subsection ( c ). Such notice shall be accompanied with the text of the disclosure that the Issuer desires to make, the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information.

(b) The Disclosure Dissemination Agent is under no obligation to notify the Issuer or the Disclosure Representative of an event that may constitute a Notice Event. In the event the Disclosure Dissemination Agent so notifies the Disclosure Representative, the Disclosure Representative will within five business days of receipt of such notice, instruct the Disclosure Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be made or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to report the occurrence pursuant to subsection (c), together with the text of the disclosure that the Issuer desires to make, the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information.

( c) If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in subsection (a) or (b)(ii) of this Section 4 to report the occurrence of a Notice Event, the Disclosure Dissemination Agent shall promptly file a notice of such occurrence with the State Depository (if any) and (i) each National Repository, or (ii) the MSRB.

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SECTION 5. CUSIP Numbers.

Whenever providing information to the Disclosure Dissemination Agent, including but not limited to Annual Reports, documents incorporated by reference to the Annual Reports, Audited Financial Statements, notices of Notice Events, and Voluntary Reports filed pursuant to Section 7(a), the Issuer shall indicate the full name of the Bonds and the 9-digit CUSIP numbers for the Bonds as to which the provided information relates.

SECTION 6. Additional Disclosure Obligations.

The Issuer acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule I0b-5 promulgated under the Securities Exchange Act of 1934, may apply to the Issuer, and that the failure of the Disclosure Dissemination Agent to so advise the Issuer shall not constitute a breach by the Disclosure Dissemination Agent of any of its duties and responsibilities under this Disclosure Agreement. The Issuer acknowledges and understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks of disseminating information as described in this Disclosure Agreement.

SECTION 7. Voluntary Reports.

(a) The Issuer may instruct the Disclosure Dissemination Agent to file information with the Repositories, from time to time pursuant to a Certification of the Disclosure Representative accompanying such information (a "Voluntary Report").

(b) Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information through the Disclosure Dissemination Agent using the means of dissemination set forth in this Disclosure Agreement or including any other information in any Annual Report, Aunual Financial Statement, Voluntary Report or Notice Event notice, in addition to that required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice.

SECTION 8. Termination of Reporting Obligation.

The obligations of the Issuer and the Disclosure Dissemination Agent under this Disclosure Agreement shall terminate with respect to the Bonds upon the legal defeasance, prior redemption or payment in full of all of the Bonds, when the Issuer is no longer an obligated person with respect to the Bonds, or upon delivery by the Disclosure Representative to the Disclosure Dissemination Agent of an opinion of nationally recognized bond counsel to the effect that continuing disclosure is no longer required.

SECTION 9. Disclosure Dissemination Agent.

The Issuer has appointed Digital Assurance Certification, L.L.C. as exclusive Disclosure Dissemination Agent under this Disclosure Agreement. The Issuer may, upon thirty days written notice to the Disclosure Dissemination Agent and the Fiscal Agent, replace or appoint a successor Disclosure Dissemination Agent. Upon termination of DAC's services as Disclosure Dissemination Agent, whether by notice of the Issuer or DAC, the Issuer agrees to appoint a successor Disclosure Dissemination Agent or, alternately, agrees to assume all responsibilities of Disclosure Dissemination Agent under this Disclosure Agreement for the benefit of the Holders of the Bonds. Notwithstanding any replacement or appointment of a successor, the Issuer shall remain liable until payment in full for any and all sums owed and payable to the Disclosure Dissemination Agent. The Disclosure Dissemination Agent may resign at any time by providing thirty days' prior written notice to the Issuer.

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SECTION 10. Remedies in Event of Default.

In the event of a failure of the Issuer or the Disclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, the Holders' rights to enforce the provisions of this Agreement shall be limited solely to a right, by action in mandamus or for specific performance, to compel performance of the parties' obligation under this Disclosure Agreement. Any failure by a party to perform in accordauce with this Disclosure Agreement shall not constitute a default on the Bonds or under auy other document relating to the Bonds, aud all rights aud remedies shall be limited to those expressly stated herein.

SECTION 11. Duties, Immunities and Liabilities of Disclosure Dissemination Agent.

(a) The Disclosure Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent's obligation to deliver the information at the times aud with the contents described herein shall be limited to the extent the Issuer has provided such information to the Disclosure Dissemination Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify any Information or any other information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in auy fiduciary capacity for the Issuer, the Holders of the Bonds or auy other party. The Disclosure Dissemination Agent shall have no responsibility for the Issuer's failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the Issuer has complied with this Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon certifications of the Issuer at all times.

THE ISSUER AGREES TO INDEMNIFY AND SAVE THE DISCLOSURE DISSEMINATION AGENT AND ITS RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, HARMLESS AGAINST ANY LOSS, EXPENSE AND LIABILITIES WHICH THEY MAY INCUR ARISING OUT OF OR IN THE EXERCISE OR PERFORMANCE OF THEIR POWERS AND DUTIES HEREUNDER, INCLUDING THE COSTS AND EXPENSES (INCLUDING ATTORNEYS FEES) OF DEFENDING AGAINST ANY CLAIM OF LIABILITY, BUT EXCLUDING LIABILITIES DUE TO THE DISCLOSURE DISSEMINATION AGENT'S NEGLIGENCE OR WILLFUL MISCONDUCT.

The obligations of the Issuer under this Section shall survive resignation or removal of the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds.

(b) The Disclosure Dissemination Agent may, from time to time, with prior written notice to the Issuer, consult with legal counsel ( either in-house or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder, aud neither of them shall incur auy liability aud shall be fully protected in acting in good faith upon the advice of such legal counsel. The fees aud expenses of such counsel shall be payable by the Issuer.

SECTION 12. Amendment; Waiver.

Notwithstanding any other provision of this Disclosure Agreement, the Issuer and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws acceptable to both the Issuer aud the Disclosure Dissemination Agent to the effect that such amendment or waiver does not materially impair the interests of Holders of the Bonds and would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule; provided neither the

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Issuer or the Disclosure Dissemination Agent shall be obligated to agree to any amendment modifying their respective duties or obligations without their consent thereto.

Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have the right to adopt amendments to this Disclosure Agreement necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time by giving not less than 20 days written notice of the intent to do so together with a copy of the proposed amendment to the Issuer. No such amendment shall become effective if the Issuer shall, within 10 days following the giving of such notice, send a notice to the Disclosure Dissemination Agent in writing that it objects to such amendment.

SECTION 13. Beneficiaries.

This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Fiscal Agent of the Bonds, the Disclosure Dissemination Agent, the underwriter, and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity.

SECTION 14. Governing Law.

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

SECTION 15. Counterparts.

This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

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The Disclosure Dissemination Agent and the Issuer have caused this Continuing Disclosure Agreement to be executed, on the date first written above, by their respective officers duly authorized.

DIGITAL ASSURANCE CERTIFICATION, L.L.C., as Disclosure Dissemination Agent

By: ________________ _ Name: --------------------Title: ___________________ _

JURUPA COMMUNITY SERVICES DISTRICT ON BEHALF OF COMMUNITY FACILITIES DISTRICT NO. 30 OF THE JURUPA COMMUNITY SERVICES DISTRICT, as Issuer

By: ________________ _ Name: ___________________ _ Title: ___________________ _

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Name of Issuer

Obligated Person(s)

Name of Bond Issue:

Date of Issuance:

Date of Official Statement

CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number:

EXHIBIT A

NAME AND CUSIP NUMBERS OF BONDS

Jurupa Community Services District

Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District

$7,395,000 Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District, Special Tax Bonds, 2007 Series A

October 24, 2007

October 10, 2007

482097PD8 CUSIP Number: 482097PM8 482097PE6 CUSIP Number: 482097PN6 482097PF3 CUSIP Number: 482097PP1 482097PG1 CUSIP Number: 482097PQ9 482097PH9 CUSIP Number: 482097PR7 482097PJ5 CUSIP Number: 482097PS5 482097PK2 CUSIP Number: 482097PT3 482097PL0 CUSIP Number: 482097PU0

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EXHIBIT B

NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT

Issuer

Obligated Person:

Name of Bond Issue:

Date of Issuance:

Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District

Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District

$7,395,000 Community Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District, Special Tax Bonds, 2007 Series A

October 24, 2007

NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by the Disclosure Agreement, dated as of October 1, 2007, between the Issuer and Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent. The Issuer has notified the Disclosure Dissemination Agent that it anticipates that the Annual Report will be filed by

-------

Dated:

cc: Issuer

Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent, on behalf of the Issuer

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EXHIBIT C

MATERIAL EVENT NOTICE COVER SHEET

This cover sheet and material event notice should be sent to the Municipal Securities Rulemaking Board or to all Nationally Recognized Municipal Securities Information Repositories, and the State Information Depository, if applicable, pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D).

Issuer's and/or Other Obligated Person's Name:

Issuer's Six-Digit CUSIP Number:

or Nine-Digit CUSIP Number(s) of the bonds to which this material event notice relates:

Number of pages of attached material event notice: __

Description of Material Events Notice (Check One): I. _Principal and interest payment delinquencies 2. _Non-Payment related defaults 3. _Unscheduled draws on debt service reserves reflecting financial difficulties 4. _Unscheduled draws on credit enhancements reflecting financial difficulties 5. _Substitution of credit or liquidity providers, or their failure to perform 6. _Adverse tax opinions or events affecting the tax-exempt status of the security 7. _Modifications to rights of securities holders 8. Bond calls 9. Defeasances 10. _Release, substitution, or sale of property securing repayment of the securities I I. _Rating changes 12. _Failure to provide annual financial information as required 13. _Other material event notice (specify)

I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly:

Signature:

Name:

Employer: Digital Assurance Certification, L.L.C.

Address:

City, State, Zip Code:

Voice Telephone Number:

Title:

Please print the material event notice attached to this cover sheet in 10-point type or larger, The cover sheet and notice may be faxed to the MSRB at (703) 683-1930 or sent to CDINet, Municipal Securities Rulemaking Board, 1900 Duke Street, Suite 600, Alexandria, VA 22314. Contact the MSRB at (703) 797-6600 with questions regarding this form or the dissemination of this notice.

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APPENDIXF

FORM OF OPINION OF BOND COUNSEL

Board of Directors Jurupa Coruruuuity Services District 11201 Harrel Street Mira Loma, California 917 52

(Delivery Date)

Re: $7,395,000 Coruruunity Facilities District No. 30 (Eastvale Area) of Jurupa Community Services District Special Tax Bonds, 2007 Series A

Ladies and Gentlemen:

We have acted as bond counsel in connection with the issuance by Community Facilities District No. 30 (Eastvale Area) of Jurupa Coruruuuity Services District, Couuty of Riverside, State of California (the "Coruruuuity Facilities District"), of $7,395,000 aggregate principal amouut of the Community Facilities District No. 30 (Eastvale Area) of Jurupa Coruruuuity Services District Special Tax Bonds, 2007 Series A (the "Bonds"). The Bonds are issued pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 ( commencing with Section 53311) of Part I of Division 2 of Title 5 of the Government Code of the State of California (the "Act"), a resolution adopted by the Board of Directors of Jurupa Community Services District on September 24, 2007 (the "Resolution"), and a Fiscal Agent Agreement, dated as of October I, 2007 (the "Fiscal Agent Agreement"), between Jurupa Community Services District (the "District") and U.S. Bank National Association, as Fiscal Agent (the "Fiscal Agent").

We have examined the Act, the Resolution, the Fiscal Agent Agreement and certified copies of the proceedings taken for the issuance and sale of the Bonds. As to questions of fact which are material to our opinions, we have relied upon the representations of the District contained in the Fiscal Agent Agreement and in certificates of its authorized officers which have been delivered to us for the purpose of supplying such facts, without having undertaken to verify the accuracy of any such representations by independent investigation.

Based upon such examination, we are of the opinion, as of the date hereof, that the proceedings referred to above have been taken in accordance with the laws and the Constitution of the State of California, and that the Bonds, having been issued in duly authorized form and executed by the proper officials and delivered to and paid for by the purchaser thereof, and the Fiscal Agent Agreement having been duly authorized and executed by the proper officials, constitute the legally valid and binding obligations of the District and the Community Facilities District enforceable in accordance with their terms subject to the qualifications specified below. Except where funds are otherwise available, as may be permitted by law, the Bonds are payable, as to both principal and interest, solely from certain special taxes to be levied and collected within the Community Facilities District and other fuuds available therefor held under the Agreement.

The Internal Revenue Code of 1986, as amended (the "Code"), sets forth certain investment, rebate and related requirements which must be met subsequent to the issuance and delivery of the Bonds for the interest on the Bonds to be and remain exempt from federal income taxation. Noncompliance with such requirements could cause the interest on the Bonds to be subject to federal income taxation retroactive to the date of issuance of the Bonds. Pursuant to the Fiscal Agent Agreement, the District has covenanted to comply with the requirements of the Code and applicable regulations promulgated thereuuder.

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We are of the opinion that, under existing statutes, regulations, rulings and court decisions, and assuming compliance by the District with the aforementioned covenants, the interest on the Bonds is excluded from gross income for purposes of federal income taxation and is exempt from personal income taxation imposed by the State of California.

We are further of the opinion that interest on the Bonds is not a specific preference item for purposes of the alternative minimum tax provisions of the Code. However, interest on the Bonds received by corporations will be included in corporate adjusted current earnings, a portion of which may increase the alternative minimum taxable income of such corporations.

Although interest on the Bonds is excluded from gross income for purposes of federal income taxation, the accrual or receipt of interest on the Bonds may otherwise affect the federal income tax liability of the recipient. The extent of these tax consequences will depend on the recipient's particular tax status or other items of income or deduction. We express no opinion regarding any such consequences.

The opinions expressed herein may be affected by actions which may be taken ( or not taken) or events which may occur ( or not occur) after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or occur or are not taken or do not occur.

The rights of the owners of the Bonds and the enforceability of the Bonds and the Fiscal Agent Agreement may be subject to bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted, and their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity.

Respectfully submitted,

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COMMUNITY FACILITIES DISTRICT NO. 30 (EASTVALE AREA) OF ,JURUPA COMMUNITY SERVICES DISTRICT • SPECIAL TAX BONDS, 2007 SERIES A

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