SUPPLEMENT DATED JULY 9, 2015 TO OFFICIAL STATEMENT DATED JUNE 25, 2015

Transcription

1 SUPPLEMENT DATED JULY 9, 2015 TO OFFICIAL STATEMENT DATED JUNE 25, 2015 $6,395,000 CITY OF LATHROP REASSESSMENT DISTRICT NO (MOSSDALE VILLAGE) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS SERIES 2015 The Official Statement dated June 25, 2015 for the above-referenced bonds (the Official Statement ) is amended and supplemented by this Supplement dated July 9, 2015 to the Official Statement (the Supplement ). The following is added under the caption THE DISTRICT following Land Use Distribution. Property in 100-Year Flood Zone; 200-Year Protection Mandate The property within the Reassessment District meets protection standards of the federal government pertaining to 100-year flooding. This status is confirmed by the Federal Emergency Management Agency ( FEMA ) in the current flood insurance rate maps. Currently, mortgage lenders generally do not require homes within the Reassessment District to obtain flood insurance as a condition of funding a mortgage. However, it is possible that a substantial portion of the Reassessment District could be adversely affected by a future major rainstorm.. See RISK FACTORS-Land Values-Natural Disasters. The Reassessment District is within the 200-year flood plain as determined by criteria set by the California Department of Water Resources. Of the 1,819 parcels in the Reassessment District, 14 are undeveloped residential parcels and 10 are undeveloped commercial parcels. The State in 2007 enacted Senate Bill 5, implementing a flood mitigation and control measure affecting all land in the City and requiring 200-year flood event protection. The program has implementation dates for various components and the City, to date, has met the requirements. However, it is possible that the development of these remaining parcels could be delayed if building permits are not issued by July 1, 2016, the date by which the City needs to make a finding that adequate progress, as defined in Senate Bill 5, is being made toward the construction of a 200-year flood protection system by 2025 meeting the requirements set forth in Senate Bill 5. The City has been working with other local governmental agencies on a plan to address the requirements of SB 5 and is seeking State funding to implement the plan. * * * The execution and delivery of this Supplement to the Official Statement has been duly authorized by the City of Lathrop. Dated: July 9, 2015 CITY OF LATHROP By: /s/ Cari James Finance Director

2 NEW ISSUE FULL BOOK-ENTRY In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however, to certain qualifications described in this Official Statement, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, 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, interest on the Bonds is exempt from State of California personal income tax. See "TAX MATTERS" herein. Dated: Date of Delivery $6,395,000 CITY OF LATHROP REASSESSMENT DISTRICT NO (MOSSDALE VILLAGE) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS SERIES 2015 Due: September 2, as shown below The Limited Obligation Refunding Improvement Bonds, (Mossdale Village) (the "Bonds") are being issued by the City of Lathrop (the "City") pursuant to the provisions of the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division 11.5 (Commencing with Section 9500) of the Streets and Highways Code of California (the Act ) and the Improvement Bond Act of 1915, consisting of Division 10 of the Streets and Highways Code of the State of California (the "Bond Law") to (i) defease and redeem certain outstanding obligations (the 2005 Bonds ) of the City's Assessment District No (Mossdale Village) (the "District") as described herein, (ii) provide money for a reserve fund for the Bonds, and (iii) pay the costs of issuance of the Bonds. All of the proceedings of the City to form the District, and to levy the original assessments described herein, for the purposes described herein have been undertaken pursuant to the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code) (the "1913 Act"). The Bonds will be issued 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 Beneficial Owners ("Beneficial Owners") in the denomination of $5,000 or any integral multiple thereof under the book-entry system maintained by DTC. Interest is payable on March 2, 2016, and semiannually thereafter on March 2 and September 2 each year. Payments of the principal of and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co., by MUFG Union Bank, N.A., as fiscal agent, registrar, transfer agent and paying agent (the "Fiscal Agent") for the Bonds, so long as DTC or Cede & Co. is the registered owner of the Bonds. Disbursements of such payments to DTC's Participants (as defined herein) is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC's Participants and Indirect Participants (as defined herein), as more fully described herein. See "APPENDIX E - Book-Entry System." THE BONDS ARE SUBJECT TO OPTIONAL AND MANDATORY REDEMPTION PRIOR TO MATURITY AS DESCRIBED HEREIN. SEE "THE BONDS - Redemption" HEREIN. The City has undertaken proceedings to establish a reassessment district (the "District") and to levy reassessments described herein (the "Reassessments") for the purpose of refunding the 2005 Bonds, and to levy such Reassessments as security for the Bonds pursuant to Act. Under the provisions of the Bond Law, installments of principal and interest sufficient to meet annual Bond debt service are included on the regular county tax bills sent to owners of property against which there are unpaid Reassessments. These annual Reassessment installments are to be paid into the Redemption Fund, to be held by the Fiscal Agent and used to pay debt service on the Bonds as it becomes due. See "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR." Unpaid Reassessments constitute fixed liens on certain lots and parcels assessed within the District and do not constitute a personal indebtedness of the respective owners of such lots and parcels. Accordingly, in the event of delinquency of a Reassessment installment, proceedings may be conducted only against the real property securing the delinquent Reassessment. Thus, the value of the real property within the District which has been allocated a portion of the Reassessments securing the Bonds is a critical factor in determining the investment quality of the Bonds. See "THE DISTRICT." To provide funds for payment of the Bonds and the interest thereon as a result of any delinquent Reassessment installments, the City will establish a Reserve Fund and deposit therein a portion of Bond proceeds in the amount of the Reserve Requirement (defined herein). The City's only obligation to advance funds to the Redemption Fund in the event of delinquent installments shall be from the Reserve Fund and shall not exceed the balance in the Reserve Fund. See "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR - Reserve Fund." The City has covenanted to initiate judicial foreclosure in certain circumstances in the event of a delinquency by a property owner in the payment of a Reassessment Installment and to commence the procedure as set forth herein. See "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR - Covenant to Commence Superior Court Foreclosure." This cover page contains certain information for general reference only. It is not a summary of this issue. Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision. THE DISTRICT HAS NO TAXING POWER AND THE CITY HAS NOT PLEDGED ITS FAITH AND CREDIT TO PAYMENT OF THE BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE INFORMATION SET FORTH IN THIS OFFICIAL STATEMENT, INCLUDING INFORMATION UNDER THE HEADING "RISK FACTORS", SHOULD BE READ IN ITS ENTIRETY. The Bonds will be offered when, as and if issued and received by the Underwriter, subject to the approval as to their legality by Jones Hall, A Professional Law Corporation, San Francisco, California, as Bond Counsel. Certain legal matters will be passed upon for the City by the City Attorney and for the Underwriter by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California. Jones Hall is also serving as Disclosure Counsel to the City. It is anticipated that the Bonds in definitive form will be available for delivery to DTC in New York, New York on or about July 14, Raymond James The date of this Official Statement is June 25, 2015.

3 $6,395,000 CITY OF LATHROP REASSESSMENT DISTRICT NO (MOSSDALE VILLAGE) LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS SERIES 2015 MATURITY SCHEDULE Maturity September 2 Principal Amount Interest Rate Yield Price CUSIP (518252) 2016 $210, % 1.000% % DX , DY , DZ , EA , EB , EC , ED , EE , EF , EG , EH , EJ , EK , EL , EM , EN , EP , ER8 $675, % Term Bond Due September 2, Yield 4.270%, Price: %; CUSIP : EQ0 Copyright 2015, American Bankers Association. CUSIP data herein are provided for convenience of reference only. Neither the City nor the Underwriter assumes any responsibility for the accuracy of CUSIP data.

4 GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized by the City or the Underwriter to give any information or to make any representations with respect to the Bonds other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized by the City or the Underwriter. No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the City, the District or any other parties described in this Official Statement, or in the condition of property within the District since the date of this Official Statement. Use of this Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the Bonds. Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. Document References and Summaries. All references to and summaries of the Fiscal Agent Agreement or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents. Stabilization of and Changes to Offering Prices. The Underwriter may overallot or take other steps that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the Bonds to certain dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter. Bonds are Exempt from Securities Laws Registration. The issuance and sale of the Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of Estimates and Projections. 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 Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as "plan," "expect," "estimate," "budget" or other similar words. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS 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 CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ANY EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.

5 CITY OF LATHROP SAN JOAQUIN COUNTY, CALIFORNIA CITY COUNCIL OF THE CITY AND MEMBERS OF THE CITY COUNCIL Sonny Dhaliwal, Mayor Steve Dresser, Vice Mayor Paul Akinjo, Council Member Omar Ornelas, Council Member Martha Salcedo, Council Member OFFICERS Stephen Salvatore, City Manager Cari James, Finance Director Glenn Gebhardt, City Engineer Rebecca Willis, Community Development Director Salvador Navarrete, City Attorney FINANCING SERVICES FINANCIAL ADVISOR KNN Public Finance, A Division of Zions First National Bank Oakland, California REASSESSMENT ENGINEER NBS Local Government Solutions Temecula, California BOND AND DISCLOSURE COUNSEL Jones Hall, A Professional Law Corporation San Francisco, California FISCAL AGENT AND ESCROW AGENT MUFG Union Bank, N.A. San Francisco, California VERIFICATION AGENT Causey Demgen & Moore P.C. Denver, Colorado

6 TABLE OF CONTENTS INTRODUCTION... 1 FINANCING PLAN... 4 THE BONDS... 4 Authority for Issuance... 4 Denominations and Payment of the Bonds... 5 Redemption... 6 Transfer or Exchange of Bonds... 8 Discharge of Agreement... 8 SOURCES AND USES OF FUNDS DEBT SERVICE SCHEDULE SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR Limited Obligation Assessments Collection of Assessments Limited Obligation upon Delinquency Reserve Fund Covenants of the City Refunding Bonds Priority of Lien Property Tax Collection Procedures Establishment of Special Funds and Accounts THE DISTRICT District Location and Description Land Use Distribution Assessed Property Values Delinquencies Direct and Overlapping Governmental Obligations Assessed Value-to-Burden Ratio RISK FACTORS General Owners Not Obligated to Pay Bonds or Assessments Absence of Secondary Market for the Bonds30 Bankruptcy and Foreclosure Limited Availability of Funds to Pay Delinquent Assessment Installments Limited Obligation upon Delinquency Collection of Assessments Limitations on Enforceability of Remedies.. 32 Land Values Future Overlapping Indebtedness No Acceleration Provision CONTINUING DISCLOSURE LEGAL OPINION TAX MATTERS NO LITIGATION NO RATING UNDERWRITING MISCELLANEOUS APPENDIX A - APPENDIX B - APPENDIX C - APPENDIX D - APPENDIX E - REASSESSMENT ENGINEER S REPORT THE CITY OF LATHROP AND THE SAN JOAQUIN COUNTY AREA FORM OF BOND COUNSEL OPINION FORM OF CONTINUING DISCLOSURE CERTIFICATE BOOK-ENTRY SYSTEM i

7 REGIONAL LOCATION MAP Lathrop, San Joaquin County, California Lathrop

8 OFFICIAL STATEMENT $6,395,000 CITY OF LATHROP REASSESSMENT DISTRICT NO (MOSSDALE VILLAGE) LIMITED OBLIGATION Refunding Improvement Bonds SERIES 2015 This Official Statement, including the cover page and all Appendices hereto, is provided to furnish certain information in connection with the issuance by the City of Lathrop (the "City") of its Reassessment District No (Mossdale Village) Limited Obligation Refunding Improvement Bonds, Series 2015 (the "Bonds"). Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Definitions of certain terms used herein and not defined herein have the meaning set forth in the Fiscal Agent Agreement. INTRODUCTION This Introduction contains a brief summary of certain information contained in this Official Statement. It is not intended to be complete and is qualified by the more detailed information contained elsewhere in this Official Statement. Authority to Issue. The Bonds are being issued by the City pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division 11.5 (Commencing with Section 9500) of the Streets and Highways Code of California (the "Act") and the Improvement Bond Act of 1915, as amended, Division 10 of the California Streets and Highways Code of California (the Bond Law ), a "Resolution Authorizing the Issuance of Limited Obligation Refunding Improvement Bonds and Approving and Authorizing Related Documents and Actions" (the Resolution of Issuance ) adopted by the City Council of the City for the Reassessment District No (Mossdale Village) (the District ), and a Fiscal Agent Agreement dated as of July 1, 2015 (the Fiscal Agent Agreement ) between the District and MUFG Union Bank, N.A, as fiscal agent (the Fiscal Agent ). -1-

9 The Assessment District; Original Formation and Bonds. The City has previously formed its Assessment District No (the Original Assessment District ) under the Municipal Improvement Act of 1913, Division 12 of the Streets and Highways Code of the State of California, to finance the acquisition and construction of public improvements within and of benefit to the Original Assessment District. The City issued for the Original Assessment District a first series of limited obligation improvement bonds in 2003, and thereafter also issued a second series of limited obligation improvement bonds in 2005 (the "2005 Bonds") in the original principal amount of $8,255,000 (the 2005 Bonds ). The bonds issued in 2003 were refunded in November 2013 by the City's Reassessment District No (Mossdale Village) Limited Obligation Refunding Improvement Bonds in the original principal amount of $11,690,000 (the 2013 Bonds ). Reassessment Proceedings. The City has undertaken proceedings to establish a reassessment district (the "District") and to levy reassessments described herein (the "Reassessments") with respect to the portion of the original assessments related to the 2005 Bonds, for the purpose of refunding the 2005 Bonds, and to levy such Reassessments as security for the Bonds pursuant to Act. Use of Bond Proceeds. The proceeds of the Bonds will primarily be used to defease and redeem the 2005 Bonds. Proceeds of the Bonds will also be used to make a deposit into a debt service reserve fund for the Bonds (as described herein) and to pay the costs of issuing the Bonds. See FINANCING PLAN. Registration of Ownership of Bonds. The Bonds shall be issued only as fully registered bonds in book-entry form, registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), without coupons in the denomination $5,000 or any integral multiple thereof and shall be dated as of and bear interest from the date of delivery at the interest rate shown on the cover hereof. Payments of the principal of, premium, if any, and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co., by the Fiscal Agent, so long as DTC or Cede & Co. is the registered owner of the Bonds. Disbursements of such payments to DTC's Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC's Participants and Indirect Participants, as more fully described herein. See "APPENDIX E Book-Entry System." Sources of Payment. The Bonds are payable from the Reassessments levied and collected by the City on the parcels within the District. The Bonds are further secured by a debt service reserve fund. See "THE DISTRICT." Installments of principal and interest sufficient to meet annual debt service on the Bonds will be billed by the County to the owner of each parcel within the District against which there are unpaid Reassessments. The Bonds are also secured by the monies in a Reserve Fund created pursuant to the Fiscal Agent Agreement. The Bonds are not a general obligation of the City, but are limited obligations of the City, payable solely from Reassessments and other funds pledged under the Fiscal Agent Agreement. See "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR." Additional Bonds. No additional bonds may be issued secured by the Reassessments, except to refund all or part of the Bonds. The 2013 Bonds are secured by a reassessment lien on parity with the lien of the Reassessments securing the Bonds. The District. The parcels in the District are located within the City and San Joaquin County (the County ). The property is located in an area between Interstate 5 to the east and the San Joaquin River to the west, north and south of the Louise Avenue interchange with -2-

10 Interstate 5. Land within the District subject to a Reassessment is comprised of 1,819 parcels, 1,772 of which are developed with single family homes owned by homeowners. These parcels are developed as summarized in the table below. See "THE DISTRICT." Land Use Category No. of Parcels Acreage Assessed Value Total Developed Residential 1, $456,850,707 Developed Commercial ,322,670 Undeveloped Commercial ,552,847 Undeveloped Miscellaneous (1) Undeveloped Residential (2) ,000,044 Total 1, $497,726,268 (1) Undeveloped Miscellaneous comprises three City owned parcels with no assessed valuation. (2) 14 of these parcels are occupied homes not yet reflected as such on the County tax roll Sources: San Joaquin County Auditor's Office, NBS. The Reassessments do not constitute a personal indebtedness of the owners of the property within the District; each respective property is security only for payment of its Reassessment. Risks of Investment. See the section of this Official Statement entitled "RISK FACTORS" for a discussion of special factors that should be considered, in addition to the other matters set forth herein, in considering the investment quality of the Bonds. Limited Obligation of the City. The general fund of the City is not liable and the full faith and credit of the City is not pledged for the payment of the interest on, or principal of or redemption premiums, if any, on the Bonds. The Bonds are not secured by a legal or equitable pledge of or charge, lien or encumbrance upon any property of the City or any of its income or receipts, except the money in the Redemption Fund (described herein) established under the Fiscal Agent Agreement, and neither the payment of the interest on nor principal of or redemption premiums, if any, on the Bonds is a general debt, liability or obligation of the City. The Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restrictions and neither the City Council, the City nor any officer or employee thereof are liable for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds other than from the proceeds of the Reassessments and the money in the Redemption Fund and the Reserve Fund, as provided in the Fiscal Agent Agreement. Summary of Information. Brief descriptions of the Bonds, the sources of payment for the Bonds, the City, the District, the Fiscal Agent Agreement, risk factors and other information are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. The descriptions herein of the Bonds, the Fiscal Agent Agreement, and other documents are qualified in their entirety by reference to each such document and the information with respect thereto included in the Bonds, such Fiscal Agent Agreement and other documents. Capitalized terms used herein and not defined herein shall have the meanings set forth in the Fiscal Agent Agreement. Copies of the Fiscal Agent Agreement and other documents may be obtained from the office of the City Manager at City Hall, 390 Towne Centre Drive, Lathrop, California 95330, Attention: City Manager. Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. -3-

11 FINANCING PLAN Previous Refunding of 2003 Bonds. The 2003 Bonds issued for the Original Assessment District were refunded in November 2013 with proceeds of the 2013 Bonds currently outstanding in the principal amount of $11,380,000 and secured by the 2013 Reassessments levied in the 2013 Reassessment District. The 2013 Reassessments with respect to the outstanding 2013 Bonds will continue to be levied in the 2013 Reassessment District and the lien of the 2013 Reassessments securing the 2013 Bonds is a parity lien to the lien of the Reassessments securing the Bonds. Refunding of 2005 Bonds. The Bonds are being issued primarily to refund the 2005 Bonds, issued in the original principal amount of $8,255,000 and outstanding in the principal amount of $6,735,000. The 2005 Bonds were issued to finance and refinance the construction and acquisition of certain public improvements within the District necessary for new home and other development to occur in the District. Such improvements have been completed. Refunding Escrow. A portion of the proceeds of the Bonds will be transferred to MUFG Union Bank, N.A., acting as escrow agent (the Escrow Agent ) under an Escrow Deposit and Trust Agreement dated as of the date of issuance of the Bonds (the Escrow Agreement ), among the City and the Escrow Agent. The proceeds of the Bonds deposited with the Escrow Agent, together with any remaining amounts held in cash by the Fiscal Agent with respect to the 2005 Bonds, will be sufficient to pay and redeem the 2005 Bonds in full on September 2, The moneys held by the Escrow Agent under the Escrow Agreement are pledged to the payment of the 2005 Bonds and will not be available for the payment of the Bonds. Verification. Upon issuance of the Bonds, Causey Demgen & Moore P.C., as verification agent, will deliver a report on the mathematical accuracy of certain computations based upon certain information and assertions provided to it by the Underwriter relating to the adequacy of the Escrow Fund to pay when due all interest with respect to the 2005 Bonds on and prior to the redemption thereof and to pay the redemption price of the 2005 Bonds when due. Authority for Issuance THE BONDS General. The Bonds are issued under the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division 11.5 (Commencing with Section 9500) of the Streets and Highways Code of California (the Act ) and the Fiscal Agent Agreement to refund the 2005 Bonds which were issued under the Improvement Bond Act of 1915, consisting of Division 10 of the Streets and Highways Code of the State of California (the "Bond Law"). All of the proceedings of the City to form the District, and to levy the reassessments described herein, for the purposes described herein have been undertaken pursuant to the Act. Summary Reassessment Proceedings. The Bonds are issued pursuant to provisions of the Act that permit the authorization, issuance and sale of the Bonds to refund the 2005 Bonds without public hearing if three conditions are satisfied, summarized as follows: -4-

12 (a) Each estimated annual installment of principal and interest on the Reassessment is less than the corresponding annual installment of principal and interest on the portion of the original assessment being superseded and supplanted by the same percentage for all parcels. (b) The number of years to maturity of all the Bonds is not more than the number of years to the last maturity of the 2005 Bonds. (c) The principal amount of the Reassessment on each parcel is less than the unpaid principal amount of the portion of the original assessment being superseded and supplanted by the same percentage for each parcel. The City Council, as part of the refunding proceedings, has made a finding that these three conditions are satisfied. In connection with the issuance of the Bonds and the approval of the Reassessments, a Notice of Reassessment will be recorded in the real property records of San Joaquin County. Denominations and Payment of the Bonds The Bonds will be issued only as one fully registered Bond for each maturity, in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), as registered owner of all Bonds, and will be available to Beneficial Owners in the denomination of $5,000 or any integral multiple thereof, under the book-entry system maintained by DTC in denominations of $5,000 or any integral multiple thereof. Beneficial Owners of the Bonds will not receive physical certificates representing their interest in the Bonds. So long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the owners shall mean Cede & Co., and shall not mean the Beneficial Owners of the Bonds. See "Appendix E - Book-Entry System" below. Interest with respect to the Bonds will be payable to the registered owners of the Bonds on March 2 and September 2 of each year, commencing March 2, 2016 (each, an "Interest Payment Date"). Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless it is authenticated and registered as of an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or it is authenticated prior to the first Interest Payment Date, in which event it shall bear interest from its date of delivery. The Bonds will be dated the date of original delivery. The Bonds will mature and bear interest at the rates shown on the cover page hereof. Interest with respect to the Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated and registered as of an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated prior to the first Interest Payment Date, in which event it shall bear interest from the Bond Date. Interest on the Bonds (including the final interest payment upon maturity or earlier redemption) is payable by check of the Fiscal Agent mailed by first class mail to the registered Owner thereof at such registered Owner's address as it appears on the Bond Register maintained by the Fiscal Agent at the close of business on the fifteenth day immediately preceding the applicable Interest Payment Date (the "Record Date") or by wire transfer made on -5-

13 such Interest Payment Date upon the written instructions of any Owner of $1,000,000 or more in aggregate principal amount of the Bonds delivered to the Agent prior to the applicable Record Date. The principal of the Bonds and any premium on the Bonds are payable in lawful money of the United States of America upon surrender of the Bonds at the Principal Office of the Fiscal Agent. As long as Cede & Co. is the registered owner of the Bonds, payments of the principal of, premium, if any, and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co. Disbursements of such payments to DTC's Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC's Participants and Indirect Participants, as more fully described below in Appendix E captioned "Book-Entry System." Payments of principal and interest will be payable at the principal corporate trust office of the Fiscal Agent. Payments of the principal of, premium, if any, and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co., by the Fiscal Agent, so long as DTC or Cede & Co. is the registered owner of the Bonds. Disbursements of such payments to DTC's Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC's Participants and Indirect Participants, as more fully described herein. See "Appendix E - Book-Entry System." below. Redemption Optional Redemption. Each Outstanding Bond, or any portion of the principal thereof, in the principal amount of $5,000 or any integral multiple thereof, may be redeemed, at the option of the City, from any source of available funds prior to maturity other than from prepayments of the Reassessments, in whole, or in part among maturities as specified by the City and by lot within a maturity, on any Interest Payment Date on or after September 2, 2025, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium. Redemption Following Prepayment of Reassessments. The Bonds are subject to extraordinary redemption from prepayments of the Reassessments, in whole, or in part among maturities as specified by the City and by lot within a maturity, on any Interest Payment Date, at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption: Redemption Dates Redemption Price On or before March 2, % September 2, 2023 and March 2, September 2, 2024 and March 2, September 2, 2025 or thereafter 100 Mandatory Sinking Fund Redemption. The Bonds maturing September 2, 2035 (the "Term Bonds") shall also be subject to mandatory redemption in part by lot, from Sinking Fund Payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amount set forth below; provided, however, if some but not all of the Term Bonds have been redeemed pursuant to optional redemption or extraordinary redemption as described above the total amount of all future Sinking Fund Payments relating to such maturity shall be reduced by the aggregate principal amount of Term Bonds of such maturity so redeemed, to be allocated -6-

14 among such Sinking Fund Payments on a pro rata basis in integral multiples of $5,000 as determined by the Fiscal Agent. The Sinking Fund Payment schedule is as follows: Term Bonds Due September 2, 2035 Payment Date (September 2) Payment Amount 2034 $445, (maturity) 230,000 Selection of Bonds for Redemption. The City will notify the Fiscal Agent of Bonds to be called for redemption upon prepayment of Reassessments in amounts sufficient therefor, or whenever sufficient surplus funds are available therefor in the Redemption Fund. The Fiscal Agent shall select Bonds for retirement in such a way that the ratio of Outstanding Bonds to issued Bonds shall be approximately the same in each annual series insofar as possible. Within each annual series, the Fiscal Agent shall select Bonds for retirement by lot. The provisions of Part 11.1 of the Bond Law are applicable to the advance payment of Reassessments and to the calling of the Bonds. Refunding of Bonds. The Bonds may be refunded by the City pursuant to Divisions 11 or 11.5 of the California Streets and Highways Code upon the conditions as set forth in appropriate proceedings therefor. Notice of Redemption. So long as Cede & Co. is the registered owner of the Bonds, notice of redemption will only be sent to DTC, as nominee of Cede & Co. See "Appendix E - Book-Entry System" below with respect to DTC procedures regarding notice of redemption. The Fiscal Agent shall cause at least 30 days written notice of any redemption to be given by registered or certified mail or by personal service, to the respective Owners of any Bonds designated for redemption, at their addresses appearing on the Bond Register in the Principal Office of the Fiscal Agent. The Fiscal Agent shall also cause notice of redemption to be mailed to the Securities Depositories and to the Municipal Securities Rulemaking Board (the MSRB ) at least one day earlier than the giving of notice to the Owners as aforesaid; provided, however, such mailing to the Securities Depositories and the MSRB shall not be a condition precedent to such redemption and failure to so mail or of any person or entity to receive any such notice, or any defect in any notice of redemption, shall not affect the validity of the proceeding for the redemption of such Bonds. Such notice shall state the redemption date and the redemption price and, if less 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 in part the principal amount thereof to be redeemed, and 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, or the portion thereof to be redeemed, will not accrue from and after the redemption date. Right to Rescind Notice of Optional Redemption. The City has the right to rescind any notice of the optional redemption of Bonds under the Fiscal Agent Agreement by written notice to the Fiscal Agent on or prior to the date fixed for redemption. -7-

15 Any notice of optional redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an event of default. The City and the Fiscal Agent have no liability to the Owners or any other party related to or arising from such rescission of redemption. The Fiscal Agent shall cause notice of such rescission to be mailed, first class mail, postage prepaid, to the respective Owners of any Bonds designated for redemption, at their addresses appearing on the Registration Books, and to the MSRB and the Securities Depositories. Effect of Redemption. From and after the date fixed for redemption, if funds are available for the payment of the principal of, and interest and any premium on, the Bonds so called for redemption shall have been deposited in the Redemption Fund on the date fixed for redemption, such Bonds so called 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 no interest shall accrue thereon on or after the redemption date specified in such notice. Transfer or Exchange of Bonds So long as Cede & Co. is the registered owner of the Bonds, transfer or exchange of Bonds may only be through the facilities of DTC. See " Appendix E - Book-Entry System" below with respect to DTC procedures for transfer and exchange of ownership interests in the Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept by the Fiscal Agent, by the person in whose name it is registered, in person or by such person's duly authorized attorney-in-fact, upon surrender of such Bond for cancellation, accompanied by delivery of a duly written instrument of transfer in a form approved by the Fiscal Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting such transfer any tax or other governmental charge required to be paid with respect to such transfer. Whenever any Bond or Bonds shall be surrendered for transfer, the City shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds, for like aggregate principal amount(s), maturity(ies) and interest rate(s) in the denominations herein authorized. Neither the City nor the Fiscal Agent shall be required to make such transfer of Bonds on or after a Record Date and before an Interest Payment Date. Bonds may be exchanged at the Principal Office of the Fiscal Agent for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such exchange shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting such exchange any tax or other governmental charge required to be paid with respect to such exchange. Neither the City nor the Fiscal Agent shall be required to make such exchange of Bonds after a Record Date and before an Interest Payment Date. Discharge of Agreement Subject to the Fiscal Agent Agreement, if the City shall pay and discharge the entire indebtedness on all Bonds Outstanding in any one or more of the following ways: -8-

16 (A) by well and truly paying or causing to be paid the principal of and interest and any premium on, all Bonds Outstanding, as and when the same become due and payable; (B) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts provided for in the Fiscal Agent Agreement is fully sufficient to pay all Bonds Outstanding, including all principal, interest and any applicable redemption premiums, or; (C) by irrevocably depositing with the Fiscal Agent, in trust, cash and Federal Securities in such amount as the City shall determine, as confirmed by an independent certified public accountant, which will, together with the interest to accrue thereon and moneys then on deposit in the fund and accounts provided for in the Fiscal Agent Agreement, be fully sufficient to pay and discharge the indebtedness on all Bonds, including all principal, interest and any applicable 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 Fiscal Agent Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Reassessments and other funds provided for in the Fiscal Agent Agreement and all other obligations of the City under the Fiscal Agent Agreement with respect to all Bonds Outstanding shall cease and terminate, except only the obligation of the City to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, the obligation of the City to assure that no action is taken or failed to be taken if such action or failure adversely affects the exclusion of interest on the Bonds from gross income for federal income tax purposes, and all amounts owing to the Fiscal Agent pursuant to the Fiscal Agent Agreement; and thereafter Reassessments shall not be payable to the Fiscal Agent. Notice of such election shall be filed with the Fiscal Agent. Any funds thereafter held by the Finance Director upon payments of all fees and expenses of the Fiscal Agent, which are not required for said purpose, shall be paid over to the City to be used by the City as provided in the Act and the Bond Law. -9-

17 SOURCES AND USES OF FUNDS The proceeds from the sale of the Bonds and other available moneys are to be disbursed as set forth below: Sources: Principal Amount of the Bonds $6,395, Plus: Funds relating to 2005 Bonds (1) 1,007, Plus: Net Original Issue Premium 11, Total Sources $7,414, Uses: Deposit to Escrow Fund $6,903, Deposit to Reserve Fund 240, Costs of Issuance (2) 182, Underwriter s Discount 87, Total Uses $7,414, (1) (2) Includes moneys in the 2005 Bonds debt service reserve fund and amounts in the redemption fund representing fiscal year assessments received by the District. Includes printing costs, attorney fees, Fiscal Agent fees, City fees, District administrator fees and other costs incurred in connection with the issuance and delivery of the Bonds. -10-

18 DEBT SERVICE SCHEDULE The annual debt service on the Bonds based on the interest rates and maturity schedule set forth on the cover of this Official Statement is set forth below. CITY OF LATHROP LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS REASSESSMENT DISTRICT NO (MOSSDALE VILLAGE) Year Ending (Sept. 2) Principal Interest Total 2016 $210,000 $266, $476, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,000 93, , ,000 77, , ,000 62, , ,000 45, , ,000 27, , ,000 9, ,

19 SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR Limited Obligation All obligations of the City under the Fiscal Agent Agreement and the Bonds shall not be general obligations of the City or any of its officials, but shall be limited obligations, payable solely from the Reassessments and from the funds pledged therefor under the Fiscal Agent Agreement. Neither the faith and credit of the City, the County, nor of the State of California or any political subdivision thereof is pledged to the payment of the Bonds. The Bonds are "Limited Obligation Refunding Improvement Bonds" under the Act and are payable solely from and secured solely by the Reassessments and the amounts in the Redemption Fund and the Reserve Fund created under the Fiscal Agent Agreement. Notwithstanding any other provision of the Fiscal Agent Agreement, the City is not obligated to advance available surplus funds from the City treasury to cure any deficiency in the Redemption Fund; provided, however, the City is not prevented, in its sole discretion, from so advancing funds. Reassessments The Bonds are issued upon and are secured by the Reassessments together with interest thereon, and such unpaid Reassessments together with interest thereon constitute a trust fund for the redemption and payment of the principal of the Bonds and the interest thereon. All the Bonds are secured by the monies in the Redemption Fund and Reserve Fund created pursuant to the Fiscal Agent Agreement and by the Reassessments levied. Principal of and interest on the Bonds are payable exclusively out of the Redemption Fund. The Bonds are secured by a first pledge of all of the Reassessments and all moneys deposited in the Redemption Fund and the Reserve Fund. The Reassessments and all moneys deposited into such funds (except as otherwise provided in the Fiscal Agent Agreement) are dedicated to the payment of the principal of, and interest and any premium on, the Bonds as provided in the Fiscal Agent Agreement and the Act until all of the Bonds have been paid and retired or until moneys or securities have been set aside irrevocably for that purpose in accordance with the provisions of the Fiscal Agent Agreement relating to discharge of such agreement. Although the unpaid Reassessments constitute fixed liens on the parcels assessed, they do not constitute a personal indebtedness of the respective owners of such parcels. There is no assurance that the owners will be financially able to pay the Reassessment installments or that they will pay such installments even though they may be financially able to do so. See RISK FACTORS - Property Owners Not Obligated to Pay Bond or Reassessments. The Reassessments will be collected and transferred by the County to the City in approximately equal semi-annual installments, together with interest on the declining balances, and are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do general property taxes. The properties upon which the Reassessments were levied are subject to the same provisions for sale and redemption as are properties for nonpayment of general taxes. Neither the faith and credit of the City, nor the taxing power of the County, the State of California or any political subdivision thereof is pledged to the payment of the Bonds. -12-

20 Unpaid Reassessments do not constitute a personal indebtedness of the owners of the parcels within the District and the owners have made no commitment to pay the principal of or interest on the Bonds or to support payment of the Bonds in any manner. In the event of delinquency, proceedings may be conducted only against the real property securing the delinquent Reassessment. Thus, the value of the real property within the District is a critical factor in determining the investment quality of the Bonds. The City has obtained the County assessed valuation of property in the District. See "THE DISTRICT - Assessed Value-to- Burden Ratio. Collection of Reassessments Pursuant to the Act and the Bond Law, installments of principal and interest sufficient to meet annual debt service on the Bonds will be billed by the County to the owner of each parcel within the District against which there are unpaid Reassessments. Upon receipt by the County and transferal to the City, Reassessment installments are to be deposited into the Redemption Fund, which shall be held by the Fiscal Agent and used to pay Bond principal and interest payments as they become due. The Reassessment installments billed against each parcel each year represent pro rata shares of the total principal and interest coming due that year, based on the percentage which the Reassessment against that parcel bears to the total of Reassessments securing the Bonds. Pursuant to the Fiscal Agent Agreement, payment of the principal of and interest on the Bonds is secured by moneys in the Redemption Fund and the Reserve Fund. The City has no obligation to advance funds to the Redemption Fund except to the extent of moneys in the Reserve Fund. Additionally, the City has covenanted in certain circumstances to cause the institution of judicial foreclosure proceedings following a delinquency, and thereafter diligently cause prosecution to completion, court foreclosure proceedings upon the lien of any and all delinquent unpaid Reassessments as set forth herein. See "Covenants of the City - Commence Foreclosure Proceedings" below. The City is not required to bid at the foreclosure sale. Each installment of the Reassessment and any interest and penalties on such Reassessments, constitutes a lien on the parcel of land on which it was imposed until the same is paid. Such lien is co-equal to and independent of the lien for general taxes, the lien of the reassessments securing the 2013 Bonds, and the lien of any community facilities district special taxes, and have priority over all fixed special tax liens created after the date of the original assessments in the District. Limited Obligation upon Delinquency THE BONDS ARE LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS UNDER SECTION 8769 OF THE BOND LAW AND ARE PAYABLE SOLELY FROM AND ARE SECURED SOLELY BY THE REASSESSMENTS AND THE AMOUNTS IN THE REDEMPTION FUND AND THE RESERVE FUND. THE CITY HAS NO OBLIGATION TO ADVANCE MONIES TO PAY BOND DEBT SERVICE IN THE EVENT OF DELINQUENT REASSESSMENT INSTALLMENTS. BONDOWNERS SHOULD NOT RELY UPON THE CITY TO ADVANCE MONIES TO THE REDEMPTION FUND. Notwithstanding the foregoing, the City may, at its sole option and in its sole discretion elect to advance available surplus funds of the City to pay for any delinquent installments pending sale, reinstatement, or redemption of any delinquent property. -13-

21 Reserve Fund Upon receipt of the proceeds from the sale of the Bonds, the Fiscal Agent shall initially establish the Reserve Fund and deposit and maintain therein the Reserve Requirement which is, as of any date of calculation, an amount equal to 50% of the Maximum Annual Debt Service (as defined in the Fiscal Agent Agreement) on the Outstanding Bonds. The monies in the Reserve Fund shall constitute a trust fund for the benefit of the Owners of the Bonds, shall be held by the Fiscal Agent, and shall be administered in accordance with and pursuant to the provisions of Part 16 of the Bond Law; provided, that proceeds from redemption or sale of the properties with respect to which payment of delinquent Reassessment installments and interest thereon was made from the Reserve Fund, shall be credited to the Reserve Fund; and provided further, that for the purposes of complying with federal tax law with respect to the Bonds and providing for reduction of the amount on deposit in the Reserve Fund during the term of the Bonds pursuant to the Bond Law, all proceeds from investment of monies in the Reserve Fund in excess of the Reserve Requirement shall be transferred to the Redemption Fund and used as provided in the Fiscal Agent Agreement. Except as otherwise provided in the Fiscal Agent Agreement, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the amount then required for payment of the principal of (including Sinking Fund Payments), and interest and any premium on, the Bonds or for the purpose of redeeming Bonds from the Redemption Fund. When the amount in the Reserve Fund, together with earnings thereon, exceeds the Reserve Requirement, the excess shall be transferred to the Redemption Fund. See " Establishment of Special Funds and Accounts below. THE CITY HAS NO OBLIGATION TO REPLENISH THE RESERVE FUND EXCEPT FROM INTEREST EARNINGS ON THE RESERVE FUND AVAILABLE FOR SUCH PURPOSE UNDER THE FISCAL AGENT AGREEMENT OR TO THE EXTENT THAT DELINQUENT REASSESSMENTS ARE PAID OR PROCEEDS FROM FORECLOSURE SALES ARE REALIZED. Covenants of the City In the Fiscal Agent Agreement, the City covenants as follows, among other things: Punctual Payment. It 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 Fiscal Agent Agreement and any Supplemental Agreement, and it will faithfully observe and perform all of the conditions, covenants and requirements of the Fiscal Agent Agreement and all Supplemental Agreements and of the Bonds. Against Encumbrance. It will not encumber, pledge or place any charge or lien upon any of the Reassessments or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien created in the Fiscal Agent Agreement for the benefit of the Bonds, except as permitted by the Resolution of Issuance, the Fiscal Agent Agreement, the Act or the Bond Law, except that the City may issue bonds to refund all or a part of the Bonds. Collection of Reassessments. The City will comply with all requirements of the Fiscal Agent Agreement or applicable law to assure the timely collection of the Reassessments, including, without limitation, the enforcement of delinquent Reassessments. Any funds received -14-

22 by the City in and for the District, including, but not limited to, collections of Reassessments upon the secured tax rolls, collections of delinquent Reassessments and penalties on such delinquent Reassessments, through foreclosure proceedings and the prepayment of Reassessments or portions thereof, will be immediately transmitted directly to the Fiscal Agent, without deduction, to be deposited into the funds and accounts specified below. To that end, the following will apply: (i) The Reassessments, as set forth on the List of Unpaid Reassessments on file with the Finance Director, together with the interest on the Reassessments, will be payable in annual series corresponding in number to the number of serial maturities of the Bonds issued. An annual proportion of each Reassessment will be payable in each year preceding the date of maturity of each of the several series of Bonds issued sufficient to pay the Bonds when due and such proportion of each Reassessment coming due in any year, together with the annual interest thereon, will be payable in the same manner and at the same time and in the same installments as the general taxes on real property are payable, and become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interests after delinquency as do the general taxes on real property. All sums received from the collection of the Reassessments and of the interest and penalties on such Reassessments will be placed in the Redemption Fund. In addition, all sums received by the City with respect to the assessments levied in connection with the Prior Bonds, including any penalties and delinquencies, will be placed in the Redemption Fund. Any prepayments of Reassessments will be placed in the Prepayment Account established under and administered in accordance with the Fiscal Agent Agreement. (ii) The Finance Director will, before the final date on which the Auditor will accept the transmission of the Reassessments for the parcels within the District for inclusion on the next tax roll, prepare or cause to be prepared, and will transmit to the Auditor, such data as the Auditor requires to include the installments of the Reassessments on the next secured tax roll of the County. The Finance Director is authorized to employ consultants to assist in computing the installments of the Reassessments under the Fiscal Agent Agreement and in reconciling Reassessments billed to amounts received as provided in paragraph (iii) below. (iii) The Reassessments will be payable and be collected in the same manner and at the same time and in the same installments 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. In addition to any amounts authorized pursuant to the Bond Law to be included with the annual amounts of installments as aforesaid, the City, pursuant to section of the Bond Law, may cause to be entered on the assessment roll on which taxes will next become due, opposite each lot or parcel of land within the District in the manner set forth in said section 8682, each lot s pro rata share of the estimated annual expenses of the City in connection with the administrative duties thereof for the Bonds, including, but not limited to, the costs of registration, authentication, transfer and compliance with the covenants of the Fiscal Agent Agreement, which amounts will be used to defray the costs of the City in complying with the provisions of the Fiscal Agent Agreement. Delinquent Reassessments will be subject to foreclosure as described below. Commence Foreclosure Proceedings. The City covenants with and for the benefit of the Owners of the Bonds that it will order, and cause to be commenced, and thereafter diligently -15-

23 prosecute an action in the superior court to foreclose the lien of any Reassessment or installment thereof which has been billed, but has not been paid; provided however, that the City's obligation to pursue foreclosure will be at the option of the City so long as (i) the County's Teeter Plan is in effect with respect to the District, and (ii) the amount in the Reserve Fund is not less than the Reserve Requirement. In the event that either of these conditions is not met, the City will be obligated to pursue foreclosure as follows. The Finance Director will notify the City Attorney of any such delinquency of which the Finance Director is aware, and the City Attorney will commence, or cause to be commenced, such foreclosure proceedings, including collection actions preparatory to the filing of any complaint. The City Attorney is authorized to employ counsel to conduct any such foreclosure proceedings. On or about January 30 and June 30 of each Fiscal Year, the Finance Director will compare the amount of Reassessments installments theretofore levied in the District to the amount of Reassessments installments theretofore received by the City, and: (i) Individual Delinquencies. If the Finance Director determines that any single parcel is delinquent in the payment of the combined Reassessment installments in the aggregate amount of $3,000 or more, then the Finance Director will send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner within 60 days of such determination, and (if the delinquency remains uncured) foreclosure proceedings will be commenced by the City within 120 days of such determination. (ii) Aggregate Delinquencies. If the Finance Director determines that (i) the total amount of delinquent Reassessments for the prior Fiscal Year for the entire District (including the total of delinquencies under paragraph (i) above), exceeds 5% of the total Reassessment installments due and payable for the prior Fiscal Year, or (ii) there are 10 or fewer owners of real property within the District, determined by reference to the latest available secured property tax roll of the County, the City will notify or cause to be notified property owners who are then delinquent in the payment of Reassessments (and demand immediate payment of the delinquency) within 60 days of such determination, and will commence foreclosure proceedings within 120 days of such determination against each parcel of land in the District with a Reassessment delinquency. Refunding Bonds The City covenants in the Fiscal Agent Agreement that it will not encumber, pledge or place any charge or lien upon any of the Reassessments 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 that the City may issue bonds to refund all or part of the Bonds. Priority of Lien Most of the parcels subject to Reassessments are included within the boundaries of Community Facilities District No (Mossdale Village) (the CFD ) and are required to pay special taxes which are secured by a lien on the parcels. The total authorized amount of bonds for the CFD is $12 million of which approximately $6,970,000 are currently outstanding. The City does not expect to issue the remaining authorized but unissued bonds for the CFD. The CFD also includes one parcel outside of the District. The estimated portion of the CFD obligation applicable to the parcels in the District based on maximum allowable special taxes is $6,002,597 See THE DISTRICT - Direct and Overlapping Governmental Obligations. -16-

24 The 2003 Bonds issued for the Original Assessment District were refunded in November 2013 with proceeds of the 2013 Bonds currently outstanding in the approximate principal amount of $11,380,000 and secured by the 2013 Reassessments levied in the 2013 Reassessment District. The 2013 Reassessments with respect to the outstanding 2013 Bonds will continue to be levied in the 2013 Reassessment District and the lien of the 2013 Reassessments securing the 2013 Bonds is a parity lien to the lien of the Reassessments securing the Bonds. See FINANCING PLAN above. Property Tax Collection Procedures In California, property which is subject to ad valorem taxes is classified as "secured" or "unsecured." The "secured roll" is that part of the reassessment roll containing stateassessed public utilities' property and property the taxes on which are a lien on real property sufficient, in the opinion of the county assessor, to secure payment of the taxes. A tax levied on unsecured property does not become a lien against such unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens arising pursuant to State law on such secured property, regardless of the time of the creation of the other liens. Secured and unsecured property are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property. Property taxes on the secured roll are due in two installments, on November 1 and February 1 of each fiscal year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment. In addition property on the secured roll with respect to which taxes are due is delinquent on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1.5% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector. Historically, property taxes are levied for each fiscal year on taxable real and personal property situated in the taxing jurisdiction as of the preceding January 1. A bill enacted in 1983, SB 813 (Statutes of 1983, Chapter 498), however, provided for the supplemental assessment and taxation of property as of the occurrence of a change of ownership or completion of new construction. Thus, this legislation eliminated delays in the realization of increased property taxes from new assessments. As amended, SB 813 provided increased revenue to taxing jurisdictions to the extent that supplemental assessments of new construction or changes of ownership occur subsequent to the January 1 lien date. Property taxes on the unsecured roll are due on the January 1 lien date and become delinquent, if unpaid on the following August 31. A ten percent (10%) penalty is also attached to delinquent taxes in respect of property on the unsecured roll, and further, an additional penalty of 1.5% per month accrues with respect to such taxes beginning the first day of the third month following the delinquency date. The taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against the taxpayer, (2) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer, (3) filing a certificate of delinquency for record in the county recorder's office, in order to obtain a lien on certain property of the taxpayer, and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee. The -17-

25 exclusive means of enforcing the payment of delinquent taxes in respect of property on the secured roll is the sale of the property securing the taxes to the State for the amount of taxes which are delinquent. Establishment of Special Funds and Accounts Under the Fiscal Agent Agreement, the City will establish three funds, the Redemption Fund, the Costs of Issuance Fund and the Reserve Fund. The Reserve Fund, Redemption Fund and Cost of Issuance Fund will be held by the Fiscal Agent. These funds are established and maintained for the administration of the proceeds of the sale of Bonds and payment of interest and principal on the Bonds. Escrow Fund. Except as otherwise provided in the Fiscal Agent Agreement, proceeds of sale of the Bonds will be deposited in the Escrow Fund to be maintained by the MUFG Union Bank, N.A., as escrow agent (the Escrow Agent ). Moneys in the Escrow Fund shall be used for the redemption of the 2005 Bonds on the Redemption Date. See FINANCING PLAN above. Redemption Fund. The Redemption Fund shall be maintained by the Fiscal Agent. All payments of principal and interest installments on the Reassessments received by the City shall be deposited in the Redemption Fund, which shall be held for the benefit of the City and the Owners of the Bonds. Payment of the Bonds at maturity, or at redemption prior to maturity, and all interest on the Bonds shall be made from the Redemption Fund. Interest earnings and profits resulting from the investment of monies in the Redemption Fund shall be retained in such fund. Within the Redemption Fund, a Prepayment Account will be established for the administration of prepayment of Reassessments as set forth in the Bond Law. Reserve Fund. The Reserve Fund shall be established and maintained by the Fiscal Agent. See Reserve Fund below. Amounts in the Reserve Fund shall be invested by the Fiscal Agent at the direction of the City as provided in the Fiscal Agent Agreement. During the term of the Bonds, the amount in the Reserve Fund shall be available for transfer into the Redemption Fund in the event of any deficiency at any time in the Redemption Fund to pay the Bonds. The amount so advanced shall be reimbursed to the Reserve Fund to the extent proceeds are received from payment of delinquent Reassessments or foreclosure and sale of the parcel for which payment of delinquent Reassessment installments was made from the Reserve Fund. See "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR - Reserve Fund" below. Whenever, after the issuance of the Bonds, a Reassessment is paid in whole or in part, as provided in the Bond Law, the Fiscal Agent, at the written direction of the City, shall transfer from the Reserve Fund to the Redemption Fund an amount equal to the product of the ratio of the original amount of the Reassessment so paid to the original amount of all unpaid Reassessments, times the total initial Reserve Requirement. Amounts on deposit in the Reserve Fund in excess of the Reserve Requirement on any Interest Payment Date shall be transferred to the Redemption Fund to be used to reduce Reassessments or installments thereof or to call a portion of the Bonds. Notwithstanding the above, to the extent that the balance in the Reserve Fund is less than the Reserve Requirement, interest earnings of the Reserve Fund will remain therein until amounts in the Reserve Fund equal the Reserve Requirement unless otherwise required to be rebated to the federal government. -18-

26 When the amount in the Reserve Fund equals or exceeds the amount required to redeem the remaining unmatured Bonds (whether by advance redemption or otherwise), the amount of the Reserve Fund shall be transferred to the Redemption Fund and used to redeem the Bonds, and the remaining installments of principal and interest not yet due from assessed property owners shall be canceled without payment. Costs of Issuance Fund. A portion of the proceeds of the Bonds will be deposited in the Costs of Issuance Fund to pay the issuance costs of the Bonds. This fund will be maintained by the Fiscal Agent and amounts will be disbursed from it at the request of an authorized officer of the City. -19-

27 THE DISTRICT District Location and Description The District is within Mossdale Village, an approximately 1,161-acre master-planned residential community with approximately 2,375 residential units, an associated village center, schools, commercial and service commercial uses and parks and open space located in the western portion of the City. Mossdale Village contains over one-third of the households in the City. See also Appendix B THE CITY OF LATHROP AND THE SAN JOAQUIN COUNTY AREA. The District encompasses the bulk of taxable property within Mossdale Village. Development within Mossdale Village commenced in the mid-2000 s and is substantially complete. See Land Use in the District below. Original Assessment District. The City previously established its Mossdale Village Assessment District No (the Original Assessment District ). The Original Assessment District is located in an area between Interstate 5 to the east and the San Joaquin River to the west and north and south of the Louise Avenue interchange with Interstate 5. The Original Assessment District originally included 14 parcels covering 567 total acres and net developable acres for assessment purposes. The City issued two series of bonds on behalf of the Original Assessment District: $14,050,000 City of Lathrop Limited Obligation Improvement Bonds Mossdale Village Assessment District No (the 2003 Bonds ) and $8,255,000 City of Lathrop Limited Obligation Improvement Bonds Mossdale Village Assessment District No (the 2005 Bonds ). The 2003 Bonds were refunded in November 2013 with proceeds of the Reassessment District No (Mossdale Village) Limited Obligation Refunding Improvement Bonds in the original principal amount of $11,690,000 (the 2013 Bonds ) secured by a reassessment district (the "2013 Reassessment District"). The 2013 Bonds are currently outstanding in the approximate principal amount of $11,380,000 and are secured by reassessments (the 2013 Reassessments ) levied in the 2013 Reassessment District. The 2005 Bonds will be refunded with proceeds of the Bonds as described in FINANCING PLAN herein. The 2015 Reassessment District; Parity Lien. The District is a reassessment district established on June 15, 2015, by the City Council pursuant to the Act. The District was established to supersede and supplant the assessments levied in the Original Assessment District with respect to the 2005 Bonds. The 2013 Reassessments with respect to the outstanding 2013 Bonds will continue to be levied in the 2013 Reassessment District and the lien of the 2013 Reassessments securing the 2013 Bonds is a parity lien to the lien of the Reassesssments securing the Bonds. Excerpts from the Reassessment Report used to establish the District are attached as APPENDIX A. For background and demographic information regarding the City and the County, see APPENDIX B. -20-

28 Land Use Distribution The District currently contains 1,819 parcels. Land in the District subject to a Reassessment is comprised of approximately 1,778 developed parcels and approximately 41 undeveloped parcels. The following table shows the distribution of land uses within the District as of May Assessed Property Values CITY OF LATHROP REASSESSMENT DISTRICT Distribution of Land Uses ( Tax Roll) Land Use Category No. of Parcels Acreage Assessed Value Total Developed Residential 1, $456,850,707 Developed Commercial ,322,670 Undeveloped Commercial ,552,847 Undeveloped Miscellaneous (1) Undeveloped Residential (2) ,000,044 Total 1, $497,726,268 (1) Undeveloped Miscellaneous comprises three City owned parcels with no assessed valuation. (2) 14 of these parcels are occupied homes not yet reflected as such on County tax roll. Sources: San Joaquin County Auditor's Office, NBS. No Appraisal of Property in the District. The City has not commissioned an appraisal of the parcels in the District in connection with the issuance of the Bonds. Therefore, the estimated valuation of the parcels in the District set forth in this Official Statement are based on the County Assessor s values. The current market value of the parcels within the District may be less than the County Assessor s values shown in this Official Statement. Assessed Valuation. The valuation of real property in the County is established by the County Assessor. Assessed valuations are reported at 100% of the full value of the property, as defined in Article XIIIA of the California Constitution. Article XIIIA of the California Constitution defines full cash value as the appraised value as of March 1, 1975, plus adjustments not to exceed 2% per year to reflect inflation, and requires assessment of full cash value upon change of ownership or new construction. Accordingly, the gross assessed valuation presented in this Official Statement may not necessarily be representative of the actual market value of certain property in the District. -21-

29 Top Ten Tax Payers. The table below shows the top ten tax payers in the District. CITY OF LATHROP REASSESSMENT DISTRICT Top Ten Tax Payers Including Overlapping Liens Fiscal Year Percent of Lien Reassmt. Dist Lien CFD Lien Total Lien (2) Assessed Value Owner No. of Parcels Reassmt. Dist Lien WOODSIDE 05N LP (1) 24 $ 195, % $495, $13, $ 704, $3,096, WATT MCKEE LLC (3) 2 397, , , ,252, TARGET CORP 1 213, , , ,574, RAMONA CHACE LLC 6 45, , , , , CHEVRON USA INC 1 23, , , , ,727, DARTANO FARMS INC 1 16, , , , ,600, BANK OF AGRICULTURE & COMMERCE 1 25, , , , LATHROP CHRISTIAN CENTER 1 27, , , ,255, LATHROP CHEVRON LLC 1 9, , , , ,342, LATHROP 113 LP 5 25, , , , , All Others 1,776 5,414, ,697, ,766, ,879, ,311, Total 1,819 $ 6,395, % $10,673, (5) $6,002, (4) $23,070, $497,726, (1) Woodside Homes is a homebuilder currently constructing and marketing homes in the District in its the River Walk at Mossdale Landing subdivision. (2) Reflects liens for Mossdale Village Assessment District and outstanding debt in connection with Community Facilities District No (Mossdale Village). See also Direct and Overlapping Bonded Debt Table. (3) Watt McKee is a commercial developer with commercial parcels located next to the freeway. (4) The lien amount shown does not match the outstanding principal of the CFD bonds due to the fact that not all of the District parcels are within the CFD. (5) The lien amount shown does not match the outstanding principal of the Reassessment District No bonds due to: (i) the fact that not all Reassessment District No parcels are in the District, (ii) prepayments, causing a variance between liens and bonds, and (iii) the fact that the total lien amount is reduced for amounts levied on the current tax rolls, while bonds show as unpaid. Sources: San Joaquin County Auditor's Office, NBS -22-

30 Historical Assessed Values. The table below shows a seven-year history of assessed valuations of the parcels in the District. CITY OF LATHROP REASSESSMENT DISTRICT Assessed Valuation History Fiscal Years through Total Land & Improvements (1) Fiscal Year Land Improvements $144,409,578 $343,569,834 $487,979,412 (2) ,873, ,846, ,719, ,011, ,170, ,181, ,512, ,379, ,892, ,922, ,677, ,600, ,487, ,458, ,946, ,308, ,458, ,766,856 (1) Excludes personal property and is net of exemptions. (2) The Assessed Valuation increase between Fiscal Years and are primarily due to residential development. Source: California Municipal Statistics, Inc. Delinquencies Levy and Collection History. The following table is a summary of the collections and delinquency rates for the parcels, based on the collection of the assessments in the Original Assessment District for the past six years. CITY OF LATHROP REASSESSMENT DISTRICT Assessment Collections and Delinquencies Fiscal Years through Total Parcels Assessed After 2nd Installment of Taxes Due (1) As of May 15, 2015 Number of Percent of Number of Amount Parcels amount Parcels Amount Delinquent Delinquent Delinquent Delinquent Delinquent Percent of amount Delinquent Fiscal Year Total Assessment Amount Collected , ,868 (2) $545,897 10, % 49 10, % , ,868 $542,132 15, , , ,868 $529,632 24, , , ,868 $529,887 25, , ,868 $523,216 27, , ,868 $499,121 55, (1) Information as of May of each fiscal year. (2) Total parcel count reduced from total parcel amount in prior fiscal years due to prepayments occurring in Fiscal Year The current owner of undeveloped residential parcels has been prepaying assessments upon the initial sale of the property. Additional prepayments are possible. Source: San Joaquin County Auditor-Controller s Office; NBS. Teeter Plan. The Board of Supervisors of the County has adopted the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the Teeter Plan ), as provided for in Section 4701 et seq. of the California Revenue and Taxation Code. -23-

31 Under the Teeter Plan, the County remits to the applicable taxing entities the full amounts owing of such taxes and assessments without regard to any delinquencies in such payments. The District is currently covered under the County s Teeter Plan. The Board of Supervisors may choose to discontinue the Teeter Plan in its entirety or to exclude or to exclude or limit the coverage for assessment districts or for the District specifically. The Board of Supervisors has previously removed specific assessment districts from its Teeter Plan coverage. The County has not taken action to discontinue the Teeter Plan entirely or to remove either of the Districts from the Teeter Plan; however, there can be no assurance that the County will not choose to discontinue the Teeter Plan in the future, or choose to remove all or a portion of the District from its Teeter Plan coverage. Foreclosure Proceedings. No foreclosure proceedings have been initiated by the City as a result of Prior Assessment delinquencies in the Original Assessment District. So long as the District is included in the Teeter Plan and the amount in the Reserve Fund is not less than the Reserve Requirement, the City is not obligated to commence foreclosure. See SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREOFR - Covenants of the City - Commence Foreclosure Proceedings. Direct and Overlapping Governmental Obligations Taxes, Charges and Assessments. Property in the District is subject to annual charges and assessments (which are billed to property owners on a semi-annual basis). The following table shows a representative total effective tax rate for a typical parcel in the District based on fiscal year tax rates. -24-

32 CITY OF LATHROP REASSESSMENT DISTRICT Effective Property Tax on Typical Residential Parcel (Fiscal Year ) Assessed Valuation and Property Taxes Percent of Total Assessed Value Assessed Value (1) $257, Homeowner's Exemption 7, Net Assessed Value $250, Ad Valorem Property Taxes General Purpose 1.000% $2, Ad Valorem Tax Overrides (2) Manteca USD Bond 2005R % $91.05 Manteca USD Bond 2004B SJ Delta College Bond 2004A/2006R SJ Delta College Bond 2004B SJ Delta College Bond 2004C Total Ad Valorem Property Taxes % $2, Assessments, Special Taxes and Parcel Charges (3) South Delta Water Agency $2.00 Lathrop Manteca Fire Water Investigation District 3.70 SJC Mosquito Abatement 1.54 SJC Mosquito & Vector Control Benefit District 8.84 CSA No Hazardous Waste 4.00 Reclamation District No Lathrop Mossdale Village LMD Lathrop Mossdale Village Series Lathrop Mossdale Village Series Lathrop CFD (4) Lathrop CFD (4)(5) Total Assessments, Special Taxes and Parcel Charges $2, Total Property Taxes $5, Total Effective Tax Rate (as % of Assessed Value) 2.040% (1) Assessed value based on Fiscal Year average assessed value of single family detached homes within the district. (2) Based on Fiscal Year ad valorem property taxes. (3) Based on Fiscal Year assessments and special taxes, except where noted. (4) Average CFD tax levy for SFR units per Goodwin Consulting Group. (5) Levy for maintenance and services only; no authorized bonds. Sources: San Joaquin County Auditor's Office; NBS, KNN Public Finance -25-

33 Overlapping Public Debt. Contained within the boundaries of the District are certain overlapping local agencies providing public services and assessing property taxes, assessments, special taxes and other charges on the property in the District. Many of these local agencies have outstanding debt. The current and estimated direct and overlapping obligations affecting the property in the District are shown in the following table. The table was prepared by California Municipal Statistics, Inc., and is included for general information purposes only. The City has not reviewed this report for completeness or accuracy and makes no representation in connection therewith. CITY OF LATHROP REASSESSMENT DISTRICT Direct and Overlapping Bonded Debt As of June 1, Local Secured Assessed Valuation: $487,979,412 (Land and Improvements) DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 6/1/15 San Joaquin Delta Community College District General Obligation Bonds 0.749% $ 1,089,884 Manteca Unified School District General Obligation Bonds ,453,941 City of Lathrop Community Facilities District No Special Tax Bonds ,267,855 City of Lathrop Mossdale Reassessment District No Act Bonds ,380,000 City of Lathrop Mossdale Reassmnt Dist Act Bonds ,735,000 (1) Reclamation District No. 17 Assessment District ,508 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $28,706,188 OVERLAPPING GENERAL FUND DEBT: San Joaquin County Certificates of Participation 0.823% $1,246,598 Manteca Unified School District Certificates of Participation ,325,808 City of Lathrop General Fund Obligations ,569,727 TOTAL OVERLAPPING GENERAL FUND DEBT $4,142,133 COMBINED TOTAL DEBT $32,848,321 (2) (1) Series 2005 bonds to be refunded. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital ease obligations. Ratios to Assessed Valuation: Direct Debt ($6,735,000) % Total Direct and Overlapping Tax and Assessment Debt % Combined Total Debt % Source: California Municipal Statistics. -26-

34 Assessed Value-to-Lien Ratio General Information Regarding Assessed Value-to-Burden Ratios. The assessed value-to-lien ratio on parcels upon which Reassessments have been levied will generally vary over the life of the Bonds as a result of changes in the value of the property that is security for the Reassessments and the principal amount of the Bonds and overlapping liens. In comparing the aggregate County assessed value of the real property within the District and the principal amount of the Bonds, it should be noted that only the real property upon which there is a delinquent Reassessment can be foreclosed upon, and the real property within the District cannot be foreclosed upon as a whole to pay delinquent Reassessments of the owners of such parcels within the District unless all of the property is subject to a delinquent Reassessment. In any event, individual parcels may be foreclosed upon to pay delinquent installments of the Reassessments levied against such parcels. The principal amount of the Bonds will not be allocated pro-rata among the parcels within the District; rather, the total Reassessment for the District has been allocated among the parcels within the District according to the Engineer's Report. Economic and other factors beyond the property owners control, such as economic recession, deflation of land values, financial difficulty or bankruptcy by one or more property owners, or the complete or partial destruction of parcels caused by, among other possible events, earthquake, flood, fire or other natural disaster, could cause a reduction in the assessed value within the District. See RISK FACTORS. See Direct and Overlapping Governmental Obligations above for more information on the aggregate value-to-burden ratio of property subject to the lien of the Reassessments. The following table shows the assessed value to Reassessment and overlapping lien ratio by land uses in the District. CITY OF LATHROP REASSESSMENT DISTRICT Assessed Value to Lien By Land Uses ( Tax Roll) Sum of Total Overlapping Lien Value to Lien % Total Overlapping Lien Land Use Category No. of Parcels Acreage Assessed Value Total Developed Residential 1, $456,850,707 $ 20,833, :1 90% Developed Commercial ,322,670 1,156, :1 5% Undeveloped Commercial ,552, , :1 1% Undeveloped Miscellaneous (1) ,270-0% Undeveloped Residential (2) ,000, , :1 3% Total 1, $497,726,268 (3) $ 23,070,766 (4) 21.57:1 100% (1) Undeveloped Miscellaneous" comprises three City owned parcels with no assessed valuation. (2) 14 of these parcels are occupied homes not yet reflected as such on County tax roll. (3) Includes personal property and exemption values. (4) Excludes Reclamation District No. 17 lien and excludes general obligation bonds (see also Direct and Overlapping Bonded Debt table). Sources: San Joaquin County Auditor's Office, NBS. -27-

35 The County assessed valuation of the property in the District subject to a Reassessment is $497,726,268, resulting in a value to Reassessment and overlapping lien ratio of to 1 and the value-to-lien amounts within certain ranges as set forth below. Value-to-Lien Range Assessed Value Total (1) Reassmt Dist Lien Reassmt Dist Lien Overlapping CFD Lien Total Overlapping Lien Parcel Count 20:1 and above $355,112, $3,836, $6,367, $3,863, $14,067, ,147 10:1 to 20:1 137,072, ,157, ,558, ,006, ,723, :1 to 10:1 4,112, , , , , :1 to 3:1 (2) 1,338, , , , Below 1:1 (2) (3) 88, , , , , Grand Total $497,726, (4) $6,395, $10,673, $6,002, $23,070, ,819 (1) Includes personal property and exemption values. (2) 14 of these parcels are occupied homes not yet reflected as such on County tax roll. (3) Includes three City owned parcels with no assessed valuation. (4) Includes personal property and exemption values. Sources: San Joaquin County Auditor's Office, NBS. [Remainder of page intentionally left blank] -28-

36 RISK FACTORS The following information should be considered by prospective investors in evaluating the Bonds. However, the following does not purport to be an exhaustive listing of risks and other considerations which may be relevant to investing in the Bonds. In addition, the order in which the following information is presented is not intended to reflect the relative importance of any such risks. General Under the provisions of the Bond Law, Reassessment installments, from which funds for the payment of annual installments of principal of and interest on the Bonds are derived, will be billed to properties against which there are unpaid Reassessments on the regular property tax bills sent to owners of such properties. Such Reassessment installments are due and payable, and bear the same penalties and interest for non-payment, as do regular property tax installments. Reassessment installments due will be in aggregate amounts equal to debt service on the Bonds. See "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR - Reassessments" herein. Payments of Reassessment installments made by the owners of parcels will be applied on a pro-rata basis to all Bonds and parity obligations, if any, for which the Reassessment installments are due and could result in a lesser amount being applied to the installment due with respect to the Bonds if the amount paid by the property owners is less than the total Reassessment installment, however a property owner typically cannot pay the county tax collector less than the full amount due on the tax bill. It should also be noted that the unwillingness or inability of a property owner to pay regular property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to make regular property tax payments and Reassessment installment payments in the future. In the event of delinquency, foreclosure proceedings may be conducted only against the real property securing a delinquent reassessment installment. Thus, the value of the real property within the District is a critical factor in determining the investment quality of the Bonds. The unpaid Reassessments are not required to be paid upon sale of property within the District. There is no assurance the current or any future owners will be able to pay the Reassessment installments or that they shall pay such installments even though financially able to do so. See "Owners Not Obligated to Pay Bonds or Reassessments" below. In order to pay debt service on the Bonds, it is necessary that unpaid installments of Reassessments on land within the District are paid in a timely manner. Should the installments not be paid on time, the City has established a Reserve Fund from the proceeds of the Bonds to cover delinquencies. The Reassessments are secured by a lien on the parcels within the District and the City has covenanted in certain circumstances to institute foreclosure proceedings to sell parcels with delinquent installments for amounts sufficient to cover such delinquent installments in order to obtain funds to pay debt service on the Bonds. Failure by owners of the parcels to pay installments of Reassessments when due, depletion of the Reserve Fund, delay in foreclosure proceedings, or the inability of the City to sell parcels which have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of Reassessments levied against such parcels may result in the -29-

37 inability of the City to make full or punctual payments of debt service on the Bonds and Owners of the Bonds would therefore be adversely affected. Unpaid Reassessments do not constitute a personal indebtedness of the owners of the parcels within the District. There is no assurance the owners shall be able to pay the Reassessment installments or that they shall pay such installments even though financially able to do so. Property Owners Not Obligated to Pay Bonds or Reassessments Unpaid Reassessments do not constitute a personal indebtedness of the owners of the parcels within the District and the owners have made no commitment to pay the principal of or interest on the Bonds or to support payment of the Bonds in any manner. There is no assurance that the owners have the ability to pay the Reassessment installments or that, even if they have the ability, they will choose to pay such installments. An owner may elect to not pay the Reassessments when due and cannot be legally compelled to do so. If an owner decides it is not economically feasible to develop or to continue owning its property encumbered by the lien of the Reassessment, or decides that for any other reason it does not want to retain title to the property, such owner may chose not to pay Reassessments and to allow the property to be foreclosed. Such a choice may be made due to a decrease in the market value of the property, or for other reasons. A foreclosure of the property will result in such owner's interest in the property being transferred to another party. Neither the City nor any Owner of the Bonds will have the ability at any time to seek payment from the owners of property within the District of any Reassessment or any principal or interest due on the Bonds, or the ability to control who becomes a subsequent owner of any property within the District. Absence of Secondary Market for the Bonds No application has been made for a credit rating for the Bonds. There can be no assurance that there will ever be a secondary market for purchase or sale of the Bonds, or, if a secondary market exists, that the Bonds can be sold for any particular price. From time to time there may be no market for the Bonds, depending upon prevailing market conditions, the financial condition or market position of firms who may make the secondary market, the financial condition and results of operations of future property owners and tenants, and the value of the parcels in the District. The Bonds should therefore be considered long-term investments in which funds are committed to maturity, subject to redemption prior to maturity as described herein. Bankruptcy and Foreclosure The payment of Reassessments and the ability of the City to foreclose the lien of a delinquent unpaid Reassessments, as discussed in "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR - Covenant to Commence Superior Court Foreclosure," may be limited by bankruptcy, insolvency, or other laws generally affecting creditors' rights or by State law relating to judicial foreclosure. In addition, the prosecution of a foreclosure could be delayed due to lengthy local court calendars or procedural delays. 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 bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. -30-

38 Although bankruptcy proceedings would not cause the Reassessments to become extinguished, bankruptcy of a property owner, or anyone else who claims an interest in the property, could result in a delay in prosecuting superior court foreclosure proceedings and could result in delinquent Reassessment installments not being paid in full. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds. Limited Availability of Funds to Pay Delinquent Reassessment Installments The City will establish a Reserve Fund to be held by the Fiscal Agent and deposit and maintain therein a portion of Bond proceeds in the amount of the Reserve Requirement set forth in the Fiscal Agent Agreement. As discussed in "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR- Establishment of Special Funds and Accounts" herein, if a delinquency occurs in the Redemption Fund, the Fiscal Agent will transfer into the Redemption Fund an amount from the Reserve Fund needed to pay debt service on the Bonds. There is no assurance that the balance in the Reserve Fund will always be adequate to pay the debt service on the Bonds in the event of delinquent Reassessment installments. If there are additional delinquencies after depletion of the Reserve Fund, the City has no direct or contingent liability for payment of the Bonds in the event of default in the payment of a Reassessment installment but does have the duty to cause to be undertaken judicial foreclosure as covenanted in the Fiscal Agent Agreement. See "Collection of Reassessments" below. If, during the period of delinquency, there are insufficient funds in the Reserve Fund to pay delinquent installments, a delay may occur in payments to the owners of the Bonds. Limited Obligation upon Delinquency The City's obligation to advance monies to pay Bond debt service in the event of delinquent Reassessment installments shall not exceed the balance in the Reserve Fund. The City has made an election in the Reassessment proceedings not to be obligated to advance funds of the City for delinquent Reassessment installments pursuant to Section 8769(b) of the Bond Law; the only obligation of the City is to transfer amounts available in the Reserve Fund. During the period of delinquency if there are insufficient funds in the Reserve Fund, a delay may occur in payments to Owners of the Bonds. Notwithstanding the foregoing, the City may, at its sole option and at its sole discretion, elect to advance available surplus funds of the City to pay for any delinquent installments pending sale, reinstatement or redemption of any delinquent property. Collection of Reassessments The Reassessment is to be collected in the same manner as ordinary ad valorem real property taxes are collected and, except as provided in the special covenant for foreclosure described herein and in the Act, is to be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem real property taxes. Pursuant to these procedures, if taxes are unpaid for a period of five years or more, the property may sold to recover amounts due. Pursuant to the Bond Law, in the event of any delinquency in the payment of the Reassessment occurs, the City may commence an action in superior court to foreclose the lien therefor within specified time limits. In such an action, the real property subject to the unpaid -31-

39 amount may be sold at judicial foreclosure sale. Such judicial foreclosure action is not mandatory. Amendments to the Bond Law enacted in 1988 and effective January 1, 1989 provide that under certain circumstances property may be sold upon foreclosure at a lesser Minimum Price or without a Minimum Price. "Minimum Price" as used in the Bond Law is the amount equal to the delinquent installments of principal or interest of the Reassessments or, together with all interest penalties, costs, fees, charges and other amounts more fully detailed in the Bond Law. The court may authorize a sale at less than the Minimum Price if the court determines that sale at less than the Minimum Price will not result in an ultimate loss to the Owners of the Bonds, or, under certain circumstances, if holders of 75% or more of the outstanding Bonds consent to such sale. However, there can be no assurance that foreclosure proceedings will occur in a timely manner so as to avoid a delay in payments of debt service on the Bonds. The City has covenanted for the benefit of the owners of the Bonds that under certain circumstances, the City will commence an action in the superior court to foreclose the lien of the delinquent installments of the Reassessment against each parcel of land in the District for which such installment has been billed but has not been paid, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale. In the event that sales or foreclosures of property are necessary, there could be a delay in payments to holders of the Bonds pending such sales or the prosecution of foreclosure proceedings and receipt by the City of the proceeds of sale if the other sources of payment for the Bonds, as set forth in the Fiscal Agent Agreement, are depleted. See "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR - Covenants of The City - Commence Foreclosure Proceedings" and "RISK FACTORS - Bankruptcy and Foreclosure" herein. Limitations on Enforceability of Remedies The payment of Reassessment installments and the ability of the City to foreclose the lien of a delinquent unpaid Reassessment may be limited by bankruptcy, insolvency, or other laws generally affecting creditors' rights or by the laws of the State relating to judicial foreclosure. Factors that Could Lead to Reassessment Deficiencies. The following are some of the factors that might cause the collection of the Reassessments on any particular parcel to vary from the Reassessments that might otherwise be expected: Property Tax Delinquencies. Failure of the parcel owners to pay property taxes (and, consequently, the Reassessments), or delays in the collection of or inability to collect the Reassessments by tax sale or foreclosure and sale of the delinquent parcels, could result in a deficiency in the collection of Reassessments. Limitations Associated with Foreclosure Sales. The Fiscal Agent Agreement provides that the Reassessments are to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described in SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR, is subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ordinary ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is subject to sale by the County. If sales or foreclosures of property are necessary, there could be a delay in payments of the Bonds, pending such sales or the prosecution of foreclosure proceedings and receipt by the City of the proceeds of sale if the Reserve Fund for the -32-

40 Land Values Bonds is depleted. See SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR. The California Streets and Highways Code provides that under certain circumstances property may be sold upon foreclosure at a lesser Minimum Price or without a Minimum Price as described above. The value of land within the District is an important factor in determining the investment quality of the Bonds. If a property owner defaults in the payment of Reassessment installments, the City's only remedy is to commence foreclosure proceedings in an attempt to obtain funds to pay the delinquent Reassessment installments. Prospective purchasers of the Bonds should not assume that the property within the District could be sold for the County assessed valuation amount at a foreclosure sale for delinquent Reassessment installments. The actual value of the property within the District is subject to future events which might render invalid the basic assumptions of the County that the property within the District can be sold for the assessed value. Natural Disasters. The value of the parcels in the District in the future can be adversely affected by a variety of natural occurrences, particularly those that may affect infrastructure and other public improvements and private improvements on the parcels in the District and the continued habitability and enjoyment of such private improvements. For example, the areas in and surrounding the District, like those in much of California, may be subject to earthquakes or other unpredictable seismic activity, however, the District is not located in a seismic special studies zone. Other natural disasters could include, without limitation, landslides, floods, droughts or tornadoes. One or more natural disasters could occur and could result in damage to improvements of varying seriousness. The damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost, or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances there could be significant delinquencies in the payment of Reassessment Installments, and the value of the parcels may well depreciate. Future Overlapping Indebtedness The ability of an owner of land within the District to pay the Reassessments could be affected by the existence of other taxes and assessments imposed upon the property subsequent to the date of issuance of the Bonds. In addition, other public agencies whose boundaries overlap those of the District could, without the consent of the City, and in certain cases without the consent of the owners of the land within the District, impose additional taxes or assessment liens on the property within the District to finance public improvements to be located inside of or outside of the District. The Reassessment and each installment thereof and any interest and penalties thereon constitute a lien against the parcels on which they were imposed until the same are paid. Such lien is subordinate to all fixed special assessment liens previously imposed upon the same property, but has priority over all private liens and over all fixed special assessment liens which -33-

41 may thereafter be created against the property. Such lien is co-equal to and independent of the lien for general taxes and any lien imposed under the Mello-Roos Community Facilities Act of 1982, as amended. No Acceleration Provision The Fiscal Agent Agreement does not contain a provision allowing for the acceleration of the principal of the Bonds in the event of a payment default or other default under the terms of the Bonds or the Fiscal Agent Agreement. CONTINUING DISCLOSURE The City has covenanted for the benefit of owners of the Bonds to provide certain financial information and operating data relating to the District by not later than March 31 of each year commencing with its report for the fiscal year (the "City Annual Report") due March 31, 2016, and to provide notices of the occurrence of certain enumerated events. The City Annual Report will be filed by the City with the MSRB. The notices of the enumerated events will be filed by the City with the Municipal Securities Rulemaking Board. These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5). The specific nature of the information to be contained in the City Annual Report or the notices of the enumerated events by the City is summarized in "APPENDIX D - FORM OF CONTINUING DISCLOSURE CERTIFICATE." The City has entered into previous continuing disclosure obligations. During the past five years the City did not comply, in all material respects, as described below: (i) For the City s Community Facilities District No (Central Lathrop Specific Plan Phase I Infrastructure), (the CFD Bonds ) the City filed certain data required under its prior continuing disclosure undertaking approximately 9 days late for the annual report due in (ii) The City did not file timely material event notices regarding changes to or withdrawal of the ratings of certain of its obligations as a result of the downgrades of bond insurance companies that insured their bonds. (iii) The City did not file timely material event notices regarding principal and interest payment delinquencies for the CFD Bonds. (iv) The City did not file timely material event notices with respect to an appointment of a successor trustee and a nonpayment related default. (v) The City did not include its adopted Water Enterprise budget in its annual reports for Fiscal Years and , as required under the City s Installment Purchase Certificates of Participation 2000 Series A. Supplemental notices of the rating changes and filings to correct all of the known failures by the City and its affiliated entities to comply with their continuing disclosure undertakings have been made. -34-

42 The City has appointed NBS Government Finance Group as dissemination agent in an effort to assure timely and complete filings. LEGAL OPINION The proceedings in connection with the issuance of the Bonds are subject to the approval as to their legality of the Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel for the City. A copy of the legal opinion, certified by the official in whose office the original is filed, will be printed on each Bond. The statements of law and legal conclusions set forth in this Official Statement under the heading "THE BONDS" have been reviewed by Bond Counsel. Bond Counsel's engagement is limited to a review of the legal procedures required for the authorization of the Bonds and the exclusion from gross income of interest on the Bonds for purposes of federal income taxation. See "TAX MATTERS" herein. Certain legal matters will be passed upon for the City by Jones Hall, A Professional Law Corporation, San Francisco, California, as Disclosure Counsel. The fees of Bond Counsel and Disclosure Counsel are contingent upon the issuance and delivery of the Bonds. Certain legal matters will be passed on for the City by the City Attorney and for the Underwriter by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California. TAX MATTERS In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining certain income and earnings. The opinions set forth in the preceding paragraph are subject to the condition that the City complies with all requirements of the Internal Revenue Code of 1986, as amended (the "Tax Code") that must be satisfied subsequent to the issuance of the Bonds. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of such interest in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. If the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes "original issue discount" for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes "original issue premium" for purposes of federal income taxes and State of California personal income taxes. De minimis original issue discount and original issue premium is disregarded. Under the Tax Code, original issue discount is treated as interest excluded from federal gross income, to the extent properly allocable to each owner thereof subject to the limitations -35-

43 described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Bonds who purchase the Bonds after the initial offering of a substantial amount of such maturity. Owners of such Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Bonds under federal individual and corporate alternative minimum taxes. Under the Tax Code, original issue premium is amortized on an annual basis over the term of the Bond (said term being the shorter of the Bond's maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a Bond is amortized each year over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). Amortized Bond premium is not deductible for federal income tax purposes. Owners of premium Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Bonds. In the further opinion of Bond Counsel, interest and original issue discount on the Bonds is exempt from California personal income taxes. Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Bonds other than as expressly described above. NO LITIGATION At the time of delivery of and payment for the Bonds, the City will certify that there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or regulatory agency, against the City affecting its existence or the titles of its officers or seeking to restrain or to enjoin the sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or in any way contesting or affecting the validity or enforceability of the Bonds, the Fiscal Agent Agreement or any action of the City contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement or any amendment or supplement thereto, or contesting the powers of the City or its authority with respect to the Bonds or any action of the City contemplated by any of said documents. -36-

44 NO RATING The City has not made, and does not contemplate making, application to any rating agency for the assignment of a rating to the Bonds. UNDERWRITING Raymond James & Associates, Inc., the Underwriter of the Bonds, has agreed to purchase the Bonds from the City at a purchase price of $6,318, (representing the par amount of the Bonds less an Underwriter's discount of $87, and plus a net original issue premium of $11,275.40). The purchase contract pursuant to which the Underwriter is purchasing the Bonds provides that the Underwriter will purchase all of the Bonds if any are purchased. The obligation of the Underwriter to make such purchase is subject to certain terms and conditions set forth in such contract of purchase. The public offering prices of the Bonds may be changed from time to time by the Underwriter. The Underwriter may offer and sell Bonds to certain dealers and others at a price lower than the offering price stated on the cover page hereof. MISCELLANEOUS All quotations from, and summaries and explanations of the Fiscal Agent Agreement, the Bonds, the Act, the Bond Law or other statutes and documents contained herein do not purport to be complete, and reference is made to said documents and statutes for full and complete statements of their provisions. This Official Statement is submitted only in connection with the sale of the Bonds by the City. All estimates, assumptions, statistical information and other statements contained herein, while taken from sources considered reliable, are not guaranteed by the City or the Underwriter. The information contained herein should not be construed as representing all conditions affecting the City or the Bonds. All information contained in this Official Statement pertaining to the City has been furnished by the City and the execution and delivery of this Official Statement has been duly authorized by the City. CITY OF LATHROP By: /s/ Cari James Finance Director -37-

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46 APPENDIX A REASSESSMENT ENGINEER S REPORT A-1

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48 City of Lathrop (Mossdale Village) Preliminary Reassessment Report June 1, 2015 Main Office Temecula Parkway, Suite 100 Temecula, CA Toll free: Fax: Regional Office 870 Market Street, Suite 1223 San Francisco, CA Toll free: Fax: