NEW ISSUE -BOOK-ENTRY ONLY RATINGS:

INSURED BONDS RATING: S&P: "AA"

UNINSURED BONDS AND UNDERLYING RATING: S&P: "A"

(See"CONCLUDING INFORMATION -RatingsontreBoms' herein)

Int~ opinion of Rutan & Tu:::ker, LLP, Costa Mesa, California, Bon::! Counsel, based up:::m an analysis of existitl'J la\1\6, regulations, ruli tl'JS an:l court decisions, an::l assunitl'J, armtl'J ot~r rrntters, corrpliarr::e\Mth certain covenants, interest on the Bon:ls is exc:I Wed from gross irr::orre for federal incorre tax purp:Jses un:ler Section 103 oft~ Internal RevenLe Cede of 1986 an::l is e>errpt from State of California ~rsonal irr::orre ta>es. Int~ furt~r opinion of Bon::! Counsel, interest on t~ Bon:ls is mt a specific prefererr::e item for purp:Jses of the federal i n:lividual or corp:Jrate alternative ninimum taxes, alth:Jugh Bon::! Counsel observes that such interest is i rr::lu::led in adjusted current earnitl'JS ~n calculatitl'J corp:Jrate alternative ninirrum ta>able i rr::orre. See" TAX MATTERS" ~rein.

CASITAS MUNICIPAL WATER DISTRICT COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI)

$100,0002017SPECIAL TAX BONDS,SERIESA $39,810,0002017 SPECIAL TAX BONDS, SERI ESB

Dated: Date of Delivery Due: September l, as sha,;vn on inside cover page

T~ Casitas Municipal Water District Community Facilities District No. 2013-1 (OJAI) (t~ "District'') 2017 Sp:=<::ial Tax Bon:ls, Series A ("Series A Bon::ls") an::l 2017 Sr:x=cial Tax Bon:ls, Series B ("Series B Bon::ls," and tcget~r with the Series A Bon:ls, t~ "Bon::ls") are ~itl'J isSLed IJ,,I the Casitas Municipal Water District (t~ "Water District'') fort~ District pursuant to the provisions oft~ Mello-Roos Community Facilities Act of 1982, as arren:led (constitutitl'J Section 53311 et seq. oft~ California Governrrent Cede), an::l a Fi seal Agent Agreerrent (t~ "Fiscal Agent Agreerrent"), dated as of May l, 2017, between t~ Water District, on ~half oft~ District, an::l U.S. Bank National Association, as Fiscal Agent. T~ Bon:ls are sr:e::ial obligations oft~ Water District an::l are payable solely from revenues derived from cettain annual Sr:x=cial Taxes(as defirffl ~rein) to~ le;ied oncettai n taxable land within t~ District (lesscettain administrative ex~nses) an::l from cettain ot~r fun::ls pledged un::ler t~ Fi seal AgentAgreerrent, al I as futt~r described herein. T~ Sr:x=cial Taxes are to be le;ied accorditl'J tot~ rate an::l rrethcd of aprx,ttionrrent approved IJ,,I t~ Board of Directors oft~ Water District an::l the qualified electors within the District. See "SECURITY FOR THE BONDS -Sr:x=cial Taxes." T~ Board of Di rectors oft~ Water District is t~ legislative lxdy oft~ District.

T~ proceeds oft~ Bon::lswill ~ used to(l) acquirewaterfacilities setvitl'J pro~rty ON~rs int~ District, (2) complete improverrents to t~water facilities, (3) capitalize interest on t~ Series B Bon::ls throUJh Septem~r l, 2017, ( 4) purchase a municipal OOn::l debt service reserve insurance rx,licy fort~ Bonds, an::l (5) pay costs of issuitl'J t~ Bon::ls. See "SOURCES AND USES OF BOND PROCEEDS" ~rein.

Interest dLe with resr:x=ctto t~ Bon::ls is payable on March l an::l Septem~r l of each year, comrrerr::itl'J Septem~r l, 2017. Initial purchases of beneficial interests int~ Bon::ls will ~ made in l:xxJk--entty form an::l t~ Bon::ls will ~ registered int~ na.rre of Cede & Co., as nomir1=e for T~ Derx,sitoty Trust Corrpa.Jly' (" DTC"). Bon::l demminations are $5,000 an::l aJ1y' integral multi pie in excess t~reof. Purchasers of OOleficial interests int~ Bon::ls wi II mt receive certificates representitl'J t~ir interests int~ Bon::ls an::l will mt~ paid directly IJ,,I t~ Fiscal Agent. See "APPENDIX F -OTC AND THE BOOK ENTRY SYSTEM."

The Series A Bonds are not subject to optional redemption prior to their stated maturity of September l, 2017. The Series B Bonds are subjecttooptional and mandatory redemption prior to their stated maturity,asdescribed herein. See"THE BONDS -RedemptionofSeriesB BondS' herein.

Neit~r t~ faith an::l credit oft~ Water Di strict, mr the faith an::l credit or t~ taxitl'J p:::M1er oft~ County of Ventura, t~ State of Cal iforniaor aJ1y'

rx,litical sulxlivision t~reof is pledged tot~ payrrent oft~ Bon::ls. Except fort~ Sr:x=cial Taxes, m ot~r taxes are pledged tot~ payrrent oft~ Bon::ls. T~ Bonds are sr:x=cial tax obligations oft~ Water District fort~ Di strict payable solely from Special Tax Re;enLes an::l ot~r aJTDunts held un::ler t~ Fiscal Agent Agreerrent as tTDre fully descri l:B:l herein. T~ Water District has m taxitl'J p:::M1er.

CERT Al N EVENTS COULD AFFECT THE ABILITY OF THE WATER DISTRICT TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS WHEN DUE. THE PURCHASE OF THE BONDS INVOLVES SI GNI Fl CANT RISKS, AND THE BONDS ARE NOT SUITABLE INVESTMENTS FOR ALL INVESTORS. SEE THE SECTION OF THIS OFFICIAL STATEMENT ENTITLED "SPECIAL RISK FACTORS" FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED, IN ADDITION TO THE OTHER MATTERS SET FORTH HEREIN, IN EVALUATING THE INVESTMENT QUALITY OF THE BONDS.

This cover page contains cettain information for quick refererr::e only. It is mt acorrplete summaJV oft~ terms of this Bon::l issLe. I tlv'estors must read t~ entire Official Staterrent to obtain information essential tot~ makitl'J of an infonred itlv'estrrent decision with resp:rt tot~ Bon::ls.

MATURITY SCHEDULE (see Inside Cover Page)

T~ scf-eduled payrrent of prirr::ipal of an::l interest on t~ Series B Bon::ls maturing on Septem~r l of t~years 2024 throUJh 2047, irr::lusive, with CUSIP num~rs 14762PAH6 through 14762PAY9 (collectively, t~ "Insured Bon::ls"), when dLewill be guaranteed un::ler a nunicipal OOn::l insuran::::e rx,licy to be issued corrnrrently with tee deivery of tee Insured Bonds ly BUILD AM ERICA MUTUAL ASSURANCE COMPANY. See "MUNICIPAL BOND INSURANCE" am"APPENDIX G -SPECIMEN MUNICIPAL BOND INSURANCE POLICY."

T~ Bon::ls are ~itl'J offered when, as an::l if issled IJ,,I t~ Water District on ~half oft~ District, subject tot~ approval as to their legality IJ,,I Rutan & Tu:::ker, LL P, Costa Mesa, California, Bon::l Counsel, an::l cettain ot~r conditions. Certain legal matterswi II ~ passed urx,n fort~ Water District IJ,,I Armld, LaRoc~lle, Matf-eNs, V arConas & Zirbel LL P, as Ge~ral Counsel an::l lJ,,I Quint & Thimmig LL P, Larkspur, California, as Disclosure Counsel tot~ Water District, an::l fort~ U n::lerwriter IJ,,I Jo~s Hall, A Professional Law Corrx,ration, San Fran::::isco, California, as U n::lerwriter' s Counsel. Del ivety oft~ Bon::ls throUJh t~ facilities of T~ Derx,sitoty Trust Company is exr:x=cted to occur on or ai:xJut May 31, 2017.

T~dateof t~ Official Staterrent is May 10, 2017.

Piperjaffra~

CASITAS MUNICIPAL WATER DISTRICT COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI)

2017SPECIAL TAX BONDS, SERI ES A

$100,000 2.00!6 Serial Bond maturingSepterrlier 1, 2017, Yield 0.95%, Price 100.260CUSIP® t 14762PAA 1

$39,810,000 2017 SPECIAL TAX BONDS, SE RI ESB

MATURITY SCHEDULE

$15,240,000Serial Bonds

(BaseCUSIPt: 14762P)

Maturity Date Principal Interest

(Se~tember 1) Amount Rate Yield Price CUSIP® i 2018 $ 145,000 2.00!6 1.14% 101.063 AB9

2019 190,000 3.00 1.33 103.688 AC7

2020 235,000 4.00 1.48 107.965 ADS

2021 285,000 4.00 1.66 109.561 AE3

2022 340,000 4.00 1.91 110.390 AF0

2023 395,000 4.00 2.07 111.257 AG8

2024* 455,000 4.00 2.22 111.856 AH6

2025* 520,000 4.00 2.40 111.907 AJ2

2026* 585,000 4.00 2.54 111.965 AK9

2027* 655,000 5.00 2.70 120.470 AL7

2028* 735,000 5.00 2.80 119.480c AMS

2029* 820,000 5.00 2.95 118.014c AN3

2030* 910,000 5.00 3.06 116.953c AP8

2031* 1,010,000 3.125 3.33 97.685 AQ6

2032* 1,090,000 3.25 3.41 98.106 AR4

2033* 1,180,000 3.25 3.49 97.039 AS2

2034* 1,270,000 3.375 3.55 97.753 AT0

2035* 1,370,000 3.375 3.62 96.744 AU7

2036* 1,470,000 3.50 3.65 97.934 AVS

2037* 1,580,000 3.625 3.73 98.512 AW3

$10,000,000 5.00!6 Term Bonds maturing September 1, 2042*, Yield 3.51% , Price 112.728' CUSI P® t AX 1

$14,570,000 5.25% Term Bonds maturing September 1, 2047*, Yield 3.44% , Price 115.517' CUSI P® t AY9

* I nsured Bonds.

c Priced to the first optional call date of September 1, 2027 at par.

t CUS IP® is a registered trademark of the American Bankers Association. CUSI P data herein is pr01ided t,,, CUS IP Global Services, operated t,,, S&P Capital IQ on behalf of the American Bankers Association. CUSIP nurrliers have been assigned t,,, an independent company notaffiliatedwith the Water District, the Municipal Advisor or the Underwriter and are included solely for the convenience of the holders of the Bonds. None of the Water District, the Municipal Advisor orthe Underwriter is responsible for the selection or use of these CUSI P nurrliers, and no representation is made as to their correctness on the Bonds or as indicated abOle. The CUSI P nurrlierfor a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other sirrilar enhancement t,,, investors that is applicable to all or a portion of certain maturities of the Bonds.

GENERAL INFORMATIONABOUTTHIS OFFICIAL STATEMENT

No Offering May Be Made Except o, this Official Statement. No dealer, broker, salesperson or other person has been authorized to give any inform1tion or to m1ke any representations with respect to the Bonds other than as contained in this Official Statement, and if given or m1de, such other inform1tion or representation must not be relied upon as having been authorized.

No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offerto buy in any state in which such offer or solicitation is not authorized or in which the person m1king such offer or solicitation is not qualified to do so ortoany person to whom it is unlawful to m1ke such offer or solicitation.

Effective Date. This Official Statement speaks only as of its date and the inform1tion and expressions of opinion contained in this Official Statement are subject to change without notice. Neitherthe 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 Water District or the District since the date of this Official Statement.

Use of this Official Statement. This Official Statement is subrritted in connection with the sale of the Bonds referred to in this Official Statement and m1y 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 inform1tion contained in this Official Statement has been obtained from sources that are believed to be reliable, but this inform1tion is not guaranteed as to accuracy or completeness. All summ1ries of the Bonds, the Fiscal Agent Agreement and other documents are m1de subject to the prCNisions of such documents and do not purport to be complete statements of any or all of such prCNisions. Reference is hereo, m1de to such documents on file with the Water District for further inform1tion. See "INTRODUCTION -Summ1ries Not Definitive."

The Underwriter has prCNided the follo.ving sentence for inclusion in this Official Statement The Underwriter has ra,ie.ved the inform1tion 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 inform1tion.

Stabili2ation of and Changes to Offering Prices. The Underwriter m1y CNerallot or take other steps that stabilize or m1intain the m1rket price of the Bonds at la,els abCNe that which might otherwise prevail in the open m1rket. If commenced, the Underwriter m1y discontinue such m1rket stabi I ization at any ti me. The Underwriter m1y offer and sel I the Bonds to certain dealers, dealer banks and banks acting as agent at prices lo.ver than the public offering prices stated on the inside cCNer page of this Official Statement, and those public offering prices m1y be changed from time to time o, the Underwriter.

Bonds are Exerrpt from Securities Laws Registration. The Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities ExchangeAct of 1934, as amended, in reliance upon exerrptions for the issuance and sale of municipal securities prCNided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(l 2) of the Securities Exchange Act of 1934.

Estim1tes and Projections. Certain statements included or incorporated o, reference in this Official Statement constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation ReformAct of 1995, Section 21 E 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 o, the terrrinology used such as "plan," "expect," "esti m1te," "budget'' or other si rri lar 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 WATER DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.

Website. The Water District m1intains an I nternetwebsite, but the inform1tion on the website is not incorporated in this Official Statement.

Build America Mutual Assurance Company ("BAM") m1kes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, BAM has not independently verified, m1kes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any inform1tion or di sci osure contained herein, or orritted heref rom, other than with respect to the accuracy of the inf orm1ti on regarding BAM , supplied o, BAM and presented under the heading "MUNICIPAL BOND INSURANCE" and "APPENDIX G -SPECIMEN MUNICIPAL BOND INSURANCE POLICY."

CASITAS MUNICIPAL WATER DISTRICT VENTURA COUNTY, CALI FORNI A

Board of Directors

Bills Hicks, Division 1 J imWord, Division 2 Pete Kaiser, Division 3

Mary Bergen, Division 4 Russ Baggerly, Division 5

Water District Staff

Steven E. Wickstrum, General Manager Michael Flood, Assistant General Manager

Neil Cole, Principal Civil Engineer Denise Col Ii n, A ccounti ng Man ager ;r reasurer

Rebekah Vieira, CI erk of the B oard

PROFESSIONAL SERVICES

Bond Counsel and Special Counsel Rutan & Tucker, LLP

Costa Mesa, California

Disclosure Counsel Quint& ThimmigLLP

Larkspur, California

General Counsel Arnold, LaRochelle, Mathe.vs, VanConas& Zirbel LLP

Oxnard, California

Municipal Advisor Harrell & Company Ad.tisors, LLC

Orange, California

Special Tax Consultant David Taussig& Associates, Inc.

Ne.vport Beach, California

Fiscal Agent U.S. Bank National Association

Los Angeles, California

ii

TABLE OF CONTENTS

INTRODUCTION ................................................... l General ............................................................... 1 I ssui ng Authority ............................................... 1 Application of Proceeds ..................................... , The Water District .............................................. 2 The District ........................................................ 2 Security for the Bands ...................................... .3 Municipal Bond Insurance and Reserve

Polia; ........................................................ .4 Limted Liability ............................................... .4 Description of the Bonds ................................... 5 Professionals Involved in the Offering .............. 5 F orward--l ooki ng Staterrents ............................. 6 Summaries Not Definitive ................................. 6

SOURCESANDUSESOFBOND PROCEEDS ............................................... ?

THE BONDS .......................................................... 8 Authority for I ssuance ........................................ 8 Description of the Bonds ................................... 8 No Optional Redemption of Series A Bonds ..... 8 Redemption of Series B Bonds .......................... 9 Selection of Series B Bonds for Redemption ... 10 Notice of Redemption ...................................... 10 Effect of Redemption ....................................... 11 Trans fer or Exchange of B ands ....................... 11 Annual Debt Service of Bands ........................ 12

SECURITY FOR THE BONDS ........................... 13 Li mted Obi igations ......................................... 13 Special Taxes ................................................... 13 Parity B onds ..................................................... 16 Reserve Fund ................................................... 16 No Teeter Plan ................................................. 17 I nvestrrent of Funds ......................................... 17 CO.tenant for Superior Court Foreclosure ........ 17

MUNICIPAL BOND INSURANCE .................... 19 Bond Insurance Pol ia; ..................................... 19 Bui Id Arrerica Mutual Assurance Company ... 19

THE DISTRICT .................................................... 21 General ............................................................. 21 A uthori zati on ................................................... 21 Rate and Method of Apportionrrent ................ 22 Description of Authorized Facilities ................ 22 Developrrent Summary and Special Taxes ..... 23 Historical Levies and Tax Delinquencies ........ 28 Estimated Direct and overlapping Debt.. ........ 28 Estimated Tax Rate .......................................... 29 Property AssessedValues ............................... .31 Top Taxpayers ................................................ .32 Estimated Total Valuation of Developed

Taxable Property Within the District ...... .33 SPECIAL RISK FACTORS ................................ .36

iii

Risks of Real Estate Secured I nvestrrents Generally ................................................. 36

Limted Obligation to Pay Debt Service ......... 37 Levy and Collection of the Special Taxes ....... 37 Payrrent of Special Taxes is Not a Personal

Obligation of the Property owners .......... 38 Assessed Valuations ........................................ 38 Property Values ............................................... 38 California Drought Conditions ........................ 40 Other Possible Claims Upon the Property

Values ...................................................... 40 Enforcerrent of Special Taxes on

G0.ternrrentally owned Properties .......... 41 Proceeds of Foreclosure Sal es ......................... 42 Depletion of Reserve Fund .............................. 43 B ankrupta; Delays .......................................... 44 Disclosure to Future Purchasers ...................... 44 NoAcceleration ............................................... 44 Loss of Tax Exemption ................................... 44 Voter lnitiatives ............................................... 45 Enforceability of Rerredies ............................. 45 Risks Related to Insured Bonds ....................... 46 Secondary Market for Bands ........................... 47

TAX MATTERS .................................................. 47 CONTINUING DISCLOSURE ............................ 48 LEGAL MATTERS ............................................. 49

Absence of Litigation ...................................... 49 Legal Matters I nci dent to the I ssuance of the

Bonds ....................................................... 49 CONCLUDING INFORMATION ....................... 49

Ratings on the Bonds ....................................... 49 U nderwri ti ng ................................................... 50 The Municipal Ad.tisor ................................... 50 M i scel I aneous .................................................. 50

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

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

APPENDIX C -RATE AND METHOD OF APPORTIONMENT FOR CASITAS MUNICIPAL WATER DISTRICT COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI) ....................................................... C-1

APPENDIX D -ECONOMIC PROFILE FOR THE COUNTY OF VENTURA ........................... D-1

APPENDIX E -FORM OF CONTINUING DISCLOSURE AGREEMENT ............................. E-1

APPENDIX F -DTC AND THE BOOK ENTRY SYSTEM ................................................................ F-1

APPENDIX G -SPECIMEN MUNICIPAL BOND INSURANCE POLICY ....................................... G-1

[THIS PAGE INTENTIONALLY LEFT BLANK]

OFFICIAL STATEMENT

CASITAS MUNICIPAL WATER DISTRICT COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI)

$100,0002017SPECIAL TAX BONDS,SERIESA $39,810,000 2017 SPECIAL TAX BONDS, SE RI ESB

INTRODUCTION

This introduction is not a sumnary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in this entire Official Statement, including the ccwer page and appendices hereto, and the documents sumnarized or otherwise described herein. A full review should be made of this entire Official Statement and such documents prior to making an investment in the Bonds. The sale and delivery of the Bonds to potential investors is made only by means of the entire Official Statement.

General

This Official Statement, including the appendices hereto, sets forth certain information concerning the issuance by the Casitas Municipal Water District (the "Water District''), of the $100,CXXl aggregate principal amount of Casitas Municipal Water District Community Facilities District No. 2013-1 (OJAI) 2017 Special Tax Bonds, Series A ("Series A Bonds") and $39,810,CXXl aggregate principal amount of Casitas Municipal Water District Community Facilities District No. 2013-1 (OJAI) 2017 Special Tax Bonds, Series B ("Series B Bonds," and together with the Series A Bonds, the "Bonds") for and on behalf of the Casitas Municipal Water District Community Facilities District No. 2013-1 (OJAI) (the "District''). The Bonds are being issued by the Water District, on behalf of the District, under the prcwisions of the Mello-Roos Community Facilities Act of 1982, as amended (constituting Section 53311 et seq. of the California Gcwernment Code) (the "Act''), and a Fiscal Agent Agreement, dated as of May 1, 2017 (the "Fiscal Agent Agreement''), between the Water District, on behalf of the District, and U.S. Bank National Association, as Fiscal Agent (the "Fiscal Agent''). Capitalized term, used in this Official Statement and not otherwise defined herein have the meanings given such term, in the Fiscal Agent Agreement, some of which are set forth in Appendix A hereto.

I ssuingAuthority

The District was established by the Board of Directors of the Water District (the "Board of Directors"), acting as legislative body of the District, pursuant to proceedings underthe Act on March 13, 2013. See 'THE DISTRICT -Authorization" herein. The Bonds were authorized to be issued by a resolution adopted by the Board of Directors on April 26, 2017 (the "Resolution of Issuance"). The Bonds are being issued pursuant to the Act, the Resolution of Issuance, and the Fiscal Agent Agreement. See "THE BONDS -Authority for Issuance."

Application of Proceeds

The net proceeds of the Bonds will be used to: (1) acquire water facilities serving property o.vners in the District, (2) complete irnprcwements to the water facilities, (3) capitalize interest on the Series B Bands through September 1, 2017, ( 4) purchase a municipal bond debt service reserve fund insurance pol icy for the Bonds, and (5) pay costs of issuing the Bonds. See "SOURCES AND USES OF BOND PROCEEDS" herein.

The Water District

The Water District was forrred in 1952 and pr0.ti des dornesti c and agricultural waterto the western portion of Ventura County. See "APPENDIX D - ECONOMIC PROFILE FOR THE COUNTY OF VENTURA" attached hereto. The Water District's service area includes approximately 137.5 square rri les. The Water District is g0.terned by a five-rnernber Board of Directors who serve 0.terlapping four-year term,.

The District

The District encompasses approximately 2,150 gross acres of land in the City of Ojai and surrounding unincorporated Ventura County. The property in the District is currently developed with 2,854 residential d.vel Ii ng units and approximately 1.1 5 rni 11 ion square feet of retai I /comrrerci al uses and 405,000 square feet of industrial uses. See'THE DISTRICT-General" herein.

There are approximately 185 acres of vacant land in the District that are not currently suqjecttothe Special Tax, but rnay be suqject to the Special Tax in the future, if developed. See "THE DISTRICT -Development Summary and Special Taxes" herein for a description of when property becorres suqject to the Special Tax. The Water District makes no representation as to when, or if, any vacant land in the District will ever become suqject to the Special Tax.

F orrnati on Proceedings. The District has been forrred by the Board of Di rectors pursuant to the A ct. The Act was enacted by the California legislature to pr0.ti de an alternative rrethod offi nanci ng certain public capital facilities and services, especially in developing areas of the State of California (the" State"). Any local agency (as defined in the Act) rnay establish a community facilities district to pr0.tide for and finance the cost of eligible public facilities and services. Generally, the legislative body of the local agency which form, a community facilities district acts on behalf of such district as its legislative body. Suqject to apprcwal by two-thirds of the votes cast at an election and compliance with the other pr0.tisions of the Act, a legislative body of a local agency may issue bonds for a community facilities district and rnay levy and col I ect a special tax within such district to repay such indebtedness. The Board of Di rectors acts as the legislative body of the District.

Pursuant to the Act, in 2013 the Board of Directors adopted the necessary resolutions stating its intent to establish the District, to authorize the levy of special taxes on taxable property within the boundaries of the District, and to incur bonded indebtedness within the District. See 'THE DISTRICT -Authorization." The Bonds are secured by a pledge of and are payable solely from Special Tax Revenues (as defined herein), including foreclosure proceeds obtained from foreclosure and sale of property located in the District with delinquent Special Taxes. Follcwing public hearings conducted pursuant to the pr0.tisions of the Act, the Board of Directors adopted resolutions establishing the District and calling a special election to submit the levy of the Special Taxes and the incurring of bonded indebtedness to the qualified voters residing within the District. On August 27, 2013, at an election held pursuant to the Act, registered voters of the District, by more than a two-thirds vote, authorized the District to incur bonded indebtedness in the aggregate principal amount not to exceed $60,000,000 to be secured by the levy of Special Taxes on taxable property within the District. At that sarre election, the registered voters within the District appr0.ted the rate and rrethod of apportionrrent of the Special Taxes for the District (the" Rate and Method').

Property Value. The value of the land within the District is a critical factor in deterrrining the investrrent quality of the Bonds. If a property cwner is delinquent in the payrrent of the Special Tax levied on its property, the Water District's only remedy is to comrrence foreclosure proceedings in an attempt to obtain funds to pay the Special Tax. See 'THE DISTRICT -Development Summary and Special Taxes," and" -Property Assessed Values" for discussions of the development status of property in the District and

2

the assessed value (and value-to-lien ratios) of property within the District. No appraisal of the property within the District has been undertaken b,I the Water District in connection with the issuance of the Bonds.

The value of the property suqject to the Special Tax for Fiscal Year 2016/17, based on County assessed values as of January 1, 2016, is $1,472,843,196, pr0.tiding an cwerall value to lien ratio based on the initial principal amount of the Bonds, excluding 0.terlapping land-secured and general obligation bond debt, of 36.9: 1. See 'THE DI STRICT -Property Assessed Values." Within the District there is 0.terlapping indebtedness. Total direct and 0.terlapping tax and assessrrent debt on property in the District as of February 1, 2017 is $54,764,847, as aqjustedto include the par amount of the Bonds. See 'THE DISTRICT -Estimated Direct and overlapping Debt'' for a discussion of additional debt secured b,l liens on the real property in the District on a parity with the Bonds. When combined with the Bonds the total value-to-lien ratio within the District is 26.9: 1. See "THE DISTRICT -Developrrent Sumnary and Special Taxes" and "-Estimated Direct and overlapping Debt." The value of individual parcels vary significantly. In addition, County assessed values may not reflect current market values. No recent independent appraisal of the taxable property suqject to the levy of Special Taxes (the" Developed Property") has been conducted in connection with the Bonds, and no assurance can be given that should Special Taxes levied on one or more of the parcels becorre delinquent, and should the delinquent parcels be offered for sale at a judicial foreclosure sale, that any bid would be received for the property or, if a bid is received, that such bid would be sufficient to pay such parcel's delinquent Special Taxes. See "SPECIAL RISK FACTORS -Property Values" and"SPECIAL RISK FACTORS -Levy and Collection of the Special Taxes."

Security for the Bonds

U nderthe Fi seal A gent A greerrent, the Water District has pl edged to repay the Bands from Special Tax Revenues and certain funds pledged thereto pursuant to the Fiscal Agent Agreerrent. "Special Tax Revenues" is defined in the Fiscal AgentAgreerrentto rrean the proceeds of the Special Taxes (as defined belo.v) received b,I the Water District, including any scheduled payrrents and any prepayrrents thereof, interest and penalties thereon and proceeds of the rederrption or sale of property sold as a result of for eel osure of the I i en of the Special Taxes to the amount of said I i en, but does not incl ude i nterest and penalties, if any, collected with the Special Taxes that are in excess of the rate of interest payable on the Bonds. The Special Taxes that may be levied on parcels in the District pursuant to the Rate and Method increase b,I two percent (2%) annually. See "APPENDIX C - RATE AND METHOD OF APPORTIONMENT FOR CASITAS MUNICIPAL WATER DISTRICT COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI)" and "APPENDIX A - SUMMARY OF THE FISCAL AGENT AGREEMENT."

"Special Taxes" is defined in the Fiscal Agent Agreerrent and is used in this Official Staterrentto rrean the special taxes I evi ed b,I the Board of Di rectors on parcels of Devel oped Property within the District (that is, taxable property for which a building permit has been issued) pursuant to the Act, the Ordinance pr0.tiding for the levy of Special Taxes (the "Ordinance") and the Fiscal Agent Agreerrent. See "SECURITY FOR THE BONDS-Special Taxes." Underthe Fiscal AgentAgreerrent, the Water District has agreed to levy the Special Tax, and to repay the Bonds from the Special Tax Revenues (except for the "MinirnumAdministrative Expense Requirerrent'' as defined herein) and from certain amounts on deposit in the Special Tax Fund, the Bond Fund and the Reserve Fund established under the Fiscal Agent Agreerrent. See "APPENDIX A -SUMMARY OF THE FISCAL AGENT AGREEMENT." The 2017 Reserve Policy (as defined belo.v) will be deposited in the Reserve Fund to satisfy the Reserve Requirerrent. The 2017 Reserve Policy will be used for payrrent of the principal of and interest on the Series A Bonds and the Series B Bonds in the eventthat moneys in the Bond Fund are insufficienttherefor. See "SECURITY FOR THE BONDS -Reserve Fund."

3

Foreclosure Proceeds. The Water District, on behalf of the District, has co.tenanted for the benefit of the o.vners of the Bonds that it will comnence and diligently pursue to corrpletion,judicial foreclosure proceedings against (i) properties in the Districtwith three delinquent installments of the payment of Special Taxes no laterthan the sixth month follo.ving the date on such third installment of such Special Taxes were due, suqject to a minimum of $2,500 in delinquent Special Taxes; and (ii) all properties with delinquent Special Taxes b,I the Octolber 1 follo.vingthe close of each fiscal year in which the District receives Special Taxes in an amount which is less than 95% of the total Special Taxes levied, pro.tiding, ho.vever, the Water District shall not be required to order and causejudicial foreclosure proceedings to be commenced against particular deli nquent properties if the Water District deterni nes that the cost of pursui ng such foreclosure is greaterthan the outstanding delinquency. See "SECURITY FOR THE BONDS -Co.tenant for Superior Court Foreclosure'' herein. There is no assurance that, in the event of a fai I ure b,I a property o.vner to pay Special Taxes when due, the delinquent taxable property within the District can be sold for the values described herein or at all. See "SPECIAL RISK FACTORS -Property Values" herein.

Except for the Special Taxes, no other taxes are pledged to the payment of the Bonds. The Bonds are not general or special obligations of the Water District nor general obligations of the District, but are special obligations of the Water District for the District payable solely from Special Tax Revenues and certain amounts held under the Fiscal Agent Agreement as more fully described herein.

Municipal Bond Insurance and Reserve Policy

Concurrently with the issuance of the Bands, B ui Id America M utual Assurance Company (" BAM") will issue its Municipal Bond Insurance Policy (the "2017 Insurance Policy") for the Series B Bonds maturing September 1, 2024through and including 2047 (collectively, the "Insured Bonds"). The 2017 Insurance Policy guarantees the scheduled payment of principal of and interest on the Insured Bands when due as set forth in the form of the 2017 Insurance Policy included as "APPENDIX G - SPECIMEN MUNICIPAL BOND INSURANCE POLICY." The 20171 nsurance Policy does not insure the payment of the Seri es A Bands or the Seri es B Bands maturing on September 1, in the years 2018 through and including 2023 ( the " U ni nsured Bands").

In order to further secure the payment of the principal of and interest on the Series A Bonds and the Series B Bonds, a Reserve Fund has been established b,I the Fiscal Agent Agreement. The Reserve Fund will be funded b,I the purchase of a Municipal Bond Debt Service Reserve Insurance Policy (the "2017 Reserve Policy") issued b,I BAM in an amount equal to the Reserve Requirement as defined in the Fiscal Agent Agreement. The 2017 Reserve Policy secures only the Series A Bonds and the Series B Bonds and would not secure any future Parity Bonds. See "SECURITY FOR THE BONDS -Reserve Fund-Credit Facility."

Limited Liability

Although the unpaid Special Taxes constitute a lien on the taxable real property within the District, they do not constitute a personal indebtedness of any lando.vnerwithin the District, or any future property o.vner in the District. There is no assurance that the current o.vners of property within the District, or any future property o.vners within the District, will be financially able to pay the Special Taxes or thattheywill pay the Special Taxes even though financially able to do so.

The Bands are payable solely from the proceeds of the Special Tax to be I evi eel annual ly on the Developed Property within the District (except for the Minimum Administrative Expense Requirement) and amounts in certain funds established underthe Fiscal Agent Agreement. Neitherthe faith and credit of the Water District, nor the faith and credit or the taxing po.ver of the County, the State of California, or any

4

political subdivision thereof (other than of the District, to the limited extent set forth in the Fiscal Agent Agreement) is pledged to the payment of the principal of, premium, if any, or interest on the Bonds. The Bonds are not secured by a legal or equitable pledge of or charge, lien or encurrbrance upon any of the property or revenues of the Water District, and the payment of the interest on or principal of or redemption prenium, if any, on the Bonds is not a general debt, liability or obligation of the Water District or the District. The Water District has no taxing po.ver.

Description of the Bonds

The Bands are dated their date of delivery and mature in the amounts and in the years, and bear interest atthe rates set forth on the inside ccwer page of this Official Statement. Interest on the Bonds will be payable on each March 1 and September 1 each year, beginning September 1, 2017.

The Bonds will be issued and delivered as fully registered bonds, registered in the name of Cede & Co. as noninee of The Depository Trust Company ("DTC"), and will be available to actual purchasers of the Bonds (the" Beneficial owners'') in denominations of $5,CXXl or any integral multiple in excess thereof, under the oook--entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described herein. Beneficial owners will not be entitled to receive physical delivery of the Bonds. In the event that the oook--entry--only system described herein is no longer used with respect to the Bands, the Bands wi 11 be registered and transferred i n accordance with the Fi seal A gent Agreement. See 'THE BONDS -Description of the Bonds" and "APPENDIX F -DTC AND THE BOOK ENTRY SYSTEM" herein.

Principal of, premium, if any, and interest on the Bonds are payable by the Fiscal Agent to DTC. Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial owners is the responsibility of DTC Participants. In the event that the oook­entry--only system is no I anger used with respect to the B ands, the B enefi ci al owners wi 11 become the registered o.vners of the Bonds and will be paid principal and interest by the Fiscal Agent, all as described herein. See "THE BONDS -Description of the Bonds" and "APPENDIX F -DTC AND THE BOOK ENTRY SYSTEM" herein. So long as the Bonds are in oook--entry--onlyform, all references in the Official Statement to the o.vners or holders of the Bonds shall mean DTC or its noninee and not the Beneficial Owners of the Bonds.

The Series A Bonds are not suqject to redemption prior to their maturity on September 1, 2017. The Series B Bonds are suqjecttooptional redemption and mandatory redemption as described herein. For more complete descriptions of the Bands and the Fi seal A gent Agreement pursuant to which they are being issued and delivered, see "THE BONDS" and "APPENDIX A -SUMMARY OF THE FISCAL AGENT AGREEMENT" herein.

Professionals Involved in the Offering

U.S. Bank National Association, Los Angeles, California, will act as Fiscal Agent underthe Fiscal Agent Agreement. Piper Jaffray & Co. is the Underwriter (the "Underwriter") of the Bonds. The proceedings of the Board of Directors in connection with the issuance, sale and delivery of the Bonds are suqject to the apprcwal of Rutan & Tucker, LLP, Costa Mesa, California, Bond Counsel. Certain legal matters will be passed on for the District by Arnold, LaRochelle, Mathews, VanConas & Zirbel LLP in its capacity as General Counsel to the Water District and by Quint & Thimnig LLP, Larkspur, California, Disclosure Counsel. Jones Hall, A Professional Law Corporation, San Francisco, California, is acting as Underwriter's Counsel. Other professional services related to the Bonds have been performed by Harrell & Company Advisors, LLC, Orange, California, as the Water District's Municipal Advisor and by David Taussig & Associates, Inc., Newport Beach, California, as Special Tax Consultant.

5

F orward-l ooki ng Statements

Certain statements included or incorporated b,I reference in this Official Statement constitute "forward--looki ng statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21 E 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 b,I the terminology used such as" plan," "expect," "estimate," "prqject," "budget" or other similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information underthe caption "THE DISTRICT."

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 WATER DISTRICT AND THE DISTRICT DO NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH INTHIS OFFICIAL STATEMENT.

Summaries Not Definitive

Brief descriptions of the Bonds, the Fiscal Agent Agreement, the Continuing Disclosure Agreement, the security forthe Bonds, the District, the state of development of the property in the District and certain other documents and information are incl uded in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. Any references to documents herein are qualified b,I reference to the complete text thereof. Capitalized terms used in this Official Statement and not otherwise defined herein have the meanings given them in the Fiscal Agent Agreement, some of which are set forth in "APPENDIX A -SUMMARY OF THE FISCAL AGENT AGREEMENT." Copies of documents referenced herein may be obtained upon written request and payment of the cost of mailing and duplication from the office of the Clerk of the Board, 1055 Ventura Avenue, Oak View, California 93022.

6

SOURCES AND USES OF BOND PROCEEDS

Under the pr0.tisions of the Fiscal Agent Agreement, the Fiscal Agent will receive the proceeds from the sale of the Bands and wi 11 apply them as fol I o,vs:

Sources of Funds Principal Amount of Bonds Underwriter's Discount Plus Net Original Issue Premium

Total

Uses of Funds 111

Band Fund 121

Costs of Issuance Fund 131

I rrpr0.tement Fund 141

Total

Series A Bonds $100,CXXl.OO

(537.00)

260.00 $ 99,723.00

$

99,723.00 $ 99,723.00

Series B Bonds $39,81 O,CXXl.00

(213,779.70)

4,227,042.65 $43,823,262.95

$ 466,447.67 798,314.30

42,55~500.98 $43,823,262.95

Total $39,91 O,CXXl.00

(214,316.70)

4,227,302.65 $43,922,985.95

$ 466,447.67 798,314.30

42,658,223.98 $43,922,985.95

111 TheFiscalAgentwill depositthe2017ReservePolicy intheReserveFund. See"SECURITY FOR THE BONDS - Reserve Fund."

121 An annunt equal to interest on the Seri es B B onds to and including S epterrlier 1 , 201 7.

131 To be used to pay costs of issuance of the Bonds, including Bond Counsel fees, Disclosure Counsel fees, initial Fiscal Agent fees, Municipal Advisor's fees, rating fees, bond insurance and reserve policy premiums, Official Statement printing and other costs of issuance.

141 See "THE DISTRICT -Description of Authorized Facilities."

7

THE BONDS

Authority for Issuance

The District was established and bonded indebtedness of the District in an amount not to exceed $60,000,000was authorized pursuant to the prcwisions of the Act. The Bonds will be issued pursuant to the Act, the Resolution of Issuance, and the Fiscal Agent Agreement. The Bonds are secured under the Fiscal Agent Agreement by a pledge of and are payable from Special Tax Revenues (except for the Minimum Administrative Expense Requirement) and from amounts in certain funds and accounts held under the Fiscal Agent Agreement, excluding amounts in the Adninistrative Expense Fund, the Costs of Issuance Fund, the lmprcwement Fund and the Rebate Fund. See "APPENDIX A -SUMMARY OF THE FISCAL AGENT AGREEMENT" herein.

Description of the Bonds

The Bonds are dated their date of delivery (the "Closing Date'') and will mature in the amounts and in the years, and bear interest atthe rates set forth on the inside ccwer page of this Official Statement.

The Bonds will be issued without coupons as one fully registered bond for each maturity, in the name of Cede& Co., as nominee for DTC, as registeredo.vnerof all the Bonds. The Bonds will be available to ultimate purchasers in denoninations of $5,000 or any integral multiple thereof under the book-entry system maintained by DTC. Ultimate purchasers of 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 in this Official Statementto the o.vners shal I mean Cede & Co., and shal I not mean the purchasers or Beneficial owners of the Bonds. See "APPENDIX F -DTC AND THE BOOK ENTRY SYSTEM."

Interest on the Bonds will be payable seniannually on September 1 and March 1 of each year, commencing September 1, 2017 ( each, an "Interest Payment Date'') and wi 11 be computed on the basis of a 360-dayyearcomprised of twelve 30-day months. Each Bondwill bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after the fifteenth day of the month next preceding the month of the applicable Interest Payment Date and on or before the follo.ving Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (b) it is authenticated on or before August 15, 2017, in which event it shall bear interest from the Closing Date; pro.tided, ho.vever, that if, as of the date of authentication of any Bond, interestthereon is in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made avai I able for payment thereon.

Payments of the principal of, premium, if any, and interest on the Bonds will be made directly to DTC, or its noninee, Cede & Co., by the Fiscal Agent, so long as DTC or Cede & Co. is the registered o.vner of the Bonds. Disbursements of such payments to Participants is the responsibility of DTC and disbursements of such payments to the Beneficial owners is the responsibility of Participants and Indirect Participants, as more fully described herein. See "APPENDIX F - DTC AND THE BOOK ENTRY SYSTEM."

No Optional Redemption of Series A Bonds

The Series A Bonds are not suqject to redemption prior to maturity.

8

Redemption of Series B Bonds

Opti anal Rederrpti on. The Seri es B Bands maturing on or after September 1, 2028 are suqj ect to optional redemption prior to their stated maturities on any date on or after September 1, 2027, as a whole or in part, upon payment from any source of funds available for that purpose, at a redemption price equal to the principal amount of the Seri es B Bands to be redeemed, together with accrued interest thereon to the date fixed for redemption.

Mandatory Rederrption from Special Tax Prepayments. The Series B Bonds are suqject to mandatory redemption priorto their stated maturity, prorata with any Parity Bands, on any Interest Payment Date, from the proceeds of Special Tax Prepayments, as a whole or i n part, at a redemption price ( expressed as a percentage of the principal amount of the Series B Bonds to be redeemed), as set forth belo.v, together with accrued interest thereon to the date fixed for rederrption:

Redemption Dates

any Interest Payment Date from March 1, 2018 to and including March 1, 2025

September 1, 2025 and March 1, 2026 September 1, 2026 and March 1, 2027 September 1, 2027 and any Interest Payment Date thereafter

Rederrotion Price

103%

10236 101% 10036

Mandatory Sinking Payment Rederrption Bonds. The Series B Bonds maturing on September 1, 2042 are term Bonds suqject to mandatory sinking payment redemption, in part, on September 1, 2038 and on each September 1 thereafter to maturity, b,I lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, and from si nki ng payments as fol Io.vs:

SERIES B TERM BONDS MATURING SEPTEMBER 1, 2042

Redemption Date (September 1)

2038 2039 2040 2041 2042 (maturity)

9

Sinking Payment $1,695,000 1,840,000 1,990,000 2,150,000 2,325,000

The Series B Bonds maturing on September 1, 2047 are term Bonds suqject to mandatory sinking payment rederrption, in part, on September 1, 2043 and on each September 1 thereafterto maturity, b,I lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, and from sinking payments as folio.vs:

SERIES B TERM BONDS MATURING SEPTEMBER 1, 2047

Redemption Date (September 1)

2043 2044 2045 2046 2047 (maturity)

Sinking Payment $2,505,CXX)

2,700,CXX) 2,910,CXX) 3,130,CXX) 3,325,CXX)

The amounts in the foregoing tables shal I be reduced as a result of any prior partial redemption of the Series B Bonds pursuant to optional rederrption prcwisions or mandatory redemption from Special Tax prepayments described herein, allocated among payments as specified in writing b,I the General Manager to the Fiscal Agent.

Purchase of Bonds. In lieu of payment at maturity or redemption, moneys in the Bond Fund may be used and withdriM'n b,I the Fiscal Agent for purchase of outstanding Series B Bonds, upon the filing with the Fiscal Agent of an Officer's Certificate requesting such purchase, at a public or private sale as and when, and at such prices (incl udi ng brokerage and other charges) as such Officer's Certi fi care may pro.ti de, but in no event will Series B Bonds be purchased at a price in excess of the principal amountthereof, plus interest accrued to the date of purchase. In such event, the Water District shall, as may be appropriate, pro.ti de to the Fi seal A gent a revised maturity schedule or a revised mandatory sinking payment schedule for the Series B Bands, or l:x:Jth.

Selection of Series B Bonds for Redemption

Whenever prcwision is made in the Fiscal Agent Agreement for the redemption of less than all of the Series B Bonds (other than a sinking payment redemption), the Fiscal Agent shall select the Series B Bonds to be redeemed, from all Series B Bonds not previously called for redemption among maturities as directed in writing b,I the General Manager, and within a maturity b,l lot in any manner which the Fiscal Agent in its sole discretion shall deem appropriate and fair. For purposes of such selection, all Series B Bonds shall be deemed to be comprised of separate $5,CXXl portions and such portions shall be treated as separate Bands which may be separately redeemed.

U pan surrender of Seri es B Bands redeemed in part only, the Water District shal I execute and the Fiscal Agent shall authenticate and delivertothe owner, at the expense of the Water District, a ne.v Series B Band or Seri es B Bands, of the same maturity, of authorized denomi nati ans i n aggregate pri nci pal amount equal to the unredeemed portion of the Series B Bond or Series B Bonds.

Notice of Redemption

Redemption Procedure b,I Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be sent b,I fi rst cl ass mai I, postage prepaid, or sent b,I such other means as is acceptable to the reci pi ent thereof, at least 30 days but not more than 60 days prior to the date fixed for redemption, to the Securities Depositories and to the Information Services (or b,I such other means as pernined b,I such services), and

10

to the respective owners of any Series B Bonds designated for rederrption, at their addresses appearing in the Registration Books; but such sending of the notice of redemption shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the rederrption of such Series B Bonds.

Such notice shall state the redemption date and the rederrption price and, if less than all of the then Outstanding Series B Bonds are to be called for redemption, shall designate the CUSI P numbers and Bond numbers of the Series B Bonds to be redeerred b,I giving the individual CUSI P number and Bond number of each Series B Bond to be redeemed or shall state that all Series B Bonds between two stated Bond numbers, l:x:Jth inclusive, are to be redeemed or that all of the Series B Bonds of one or more maturities have been called for redemption, shall state as to any Series B Bond called in part the principal amount thereof to be redeemed, and shall require that such Series B Bonds be then surrendered at the Principal Office of the Fiscal Agent for rederrption at the said redemption price, and shall state that further interest on such Seri es B Bands wi 11 not accrue from and after the redemption date.

Upon the payrrent of the redemption price of Series B Bonds being redeerred, each check or other transfer of funds issued for such purpose shal I , to the extent practicable, bearthe CU SI P number i denti fyi ng, b,I issue and maturity, the Seri es B Bands bei ng redeerred with the proceeds of such check or other transfer.

Right of Rescission. In the case of any redemption of the Series B Bonds under the optional redemption or mandatory redemption from Special Tax Prepayrrent alx:we, the notice of redemption may state that the rederrption is conditioned upon receipt b,I the Fiscal Agent of sufficient moneys to redeem the Series B Bonds on the anticipated rederrption date, andthatthe redemption shall not occur if b,I no later than the scheduled redemption date sufficient moneys to redeem the Seri es B Bands have not been deposited with the Fiscal Agent. In the event that the Fiscal Agent does not receive sufficient funds b,I the scheduled redemption date to so redeem the Series B Bonds to be redeemed, the Fiscal Agent shall send written notice to the o.vners of the Series B Bonds, to the Securities Depositories and to the Information Services to the effect that the redemption did not occur as anticipated, and the Series B Bonds for which notice of redemption was given shal I remai n Outstandi ng.

Effect of Redemption

From and afterthe date fixed for redemption, if funds available forthe payrrent of the principal of, and interest and any prenium on, the Series B Bonds so called for rederrption shall have been deposited in the Bond Fund, such Series B Bonds so called shall cease to be entitled to any benefit under the Fiscal Agent Agreerrent other than the right to receive payrrent of the redemption price, and no interest shall accrue thereon on or after the rederrpti on date specified i n such notice.

Transfer or Exchange of Bonds

So long as the Bonds are registered in the narre of Cede & Co., as noninee of DTC, transfers and exchanges of Bonds shall be made in accordance½ith DTC procedures. See "APPENDIX F -DTC AND THE BOOK ENTRY SYSTEM." If the oook--entry only system for the Bonds is ever discontinued, any Bond may, in accordance with its terms, be transferred or exchanged b,I the person in whose narre it is registered, in person or b,I his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied b,I delivery of a duly written instrurrent of transfer in a form acceptable to the Fiscal Agent. Whenever any Bond or Bands shal I be surrendered for transfer or exchange, the Water Di strict shal I execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds, for a like aggregate principal amount of Bonds of authorized denoninations and of the sarre series and maturity. The Fiscal Agent shall collect from the B ondONner requesting such transfer any tax or other gcwernrrental charge required to be pal d with respect to such transfer or exchange.

11

No transfers or exchanges of Bonds shall be required to be made (i) within 15 days prior to the date established b,I the Fiscal Agent for selection of Bonds for rederrption or (ii) with respect to a Series B Bond after such Series B Bond has been selected for redemption.

Annual Debt Service of Bonds

The table belcw sets forth the scheduled annual debt service payments on the Bonds, assuming no optional rederrpti on of the Bands or redemption of the Bands from Special Tax prepayments, but i ncl udi ng mandatory sinking payment rederrpti ons.

Bond

Year Ending (Septerrlier 1)

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

SeriesA Bonds

P ri nci pal I nterest $100,000.00 $505.56

Total $100,505.56

Series B Bonds

Principal Interest Total $ - $ 466,447.67 $ 466,447.67

145,000.00 1,845,287.50 1,990,287.50

190,000.00 1,842,387.50 2,032,387.50

235,000.00 1,836,687.50 2,071,687.50

285,000.00 1,827,287.50 2,112,287.50

340,000.00 1,815,887.50 2,155,887.50

395,000.00 1,802,287.50 2,197,287.50

455,000.00 1,786,487.50 2,241,487.50

520,000.00 1,768,287.50 2,288,287.50

585,000.00 1,747,487.50 2,332,487.50

655,000.00 1,724,087.50 2,379,087.50

735,000.00 1,691,337.50 2,426,337.50

820,000.00 1,654,587.50 2,474,587.50

910,000.00 1,613,587.50 2,523,587.50

1,010,000.00 1,568,087.50 2,578,087.50

1,090,000.00 1,536,525.00 2,626,525.00

1,180,000.00 1,501,100.00 2,681,100.00

1,270,000.00 1,462,750.00 2,732,750.00

1,370,000.00 1,419,887.50 2,789,887.50

1,470,000.00 1,373,650.00 2,843,650.00

1,580,000.00 1,322,200.00 2,902,200.00

1,695,000.00 1,264,925.00 2,959,925.00

1,840,000.00 1,180,175.00 3,020,175.00

1,990,000.00 1,088,175.00 3,078,175.00

2,150,000.00 988,675.00 3,138,675.00

2,325,000.00 881,175.00 3,206,175.00

2,505,000.00 764,925.00 3,269,925.00

2,700,000.00 633,412.50 3,333,412.50

2,910,000.00 491,662.50 3,401,662.50

3,130,000.00 338,887.50 3,468,887.50

3,325,000.00 174 562.50 3,499,562.50

Total $100,000.00 $505.56 $100,505.56 $39,810,000.00 $41,412,910.17 $81,222,910.17

12

SECURITY FOR THE BONDS

Limited Obligations

The Bonds are special, limited obligations of the Water District for the District secured by a pledge of all of the Special Tax Revenues (except for the MinimumAdministrative Expense Requirement) and all moneys on deposit in the Special Tax Fund, the Bond Fund, and the Reserve Fund, and including the investment earnings on such funds, and from no other sources.

The term "Special Tax Revenues" is defined in the Fiscal Agent Agreementto mean the proceeds of the Special Taxes (as defined belo.v) received by the Water District, including any scheduled payments and any prepayments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien, but does not include interest and penalties, if any, collectedwith the Special Taxes that are in excess of the rate of interest payable on the Bands.

In the event that the Special Tax Revenues are not received when due, the only sources of funds avai I able to pay the debt service on the B ands are certain amounts held by the Fi seal A gent under the Fi seal Agent Agreement, including the 2017 Reserve Policy held in the Reserve Fund.

Neither the faith and credit of the Water District, nor the faith and credit or the taxing po.ver of the County of Ventura, the State of California or any political subdivision thereof is pledged to the payment of the Bonds. Except for the Special Taxes, no other taxes are pledged to the payment of the Bonds. The Bonds are not general obligations of the Water District nor general obligations of the District but are special obligations of the Water District for the District payable solely from Special Tax Revenues and other amounts pledged therefor under the Fiscal Agent Agreement as more fully described herein.

Special Taxes

Authorization and Pledge. In accordance with the prcwisions of the Act, the Board of Directors established the District on March 13, 2013, to finance the acquisition of water facilities serving property within the District ("Authorized Facilities") as well as construction imprcwements to the Authorized Facilities. On August 27, 2013, at an election held pursuantto the Act, the registered voters of the District authorized the District to incur bonded i ndebtedness in the aggregate pri nci pal amount not to exceed $60,000,000to be secured by the levy of Special Taxes on taxable property within the District pursuantto the Rate and Method. A Notice of Special Tax L i en was recorded in the Office of the Recorder of the County of Ventura on December 3, 2013 as Document No. 20131203-00195146-0. See "APPENDIX C -RATE AND METHOD OF APPORTIONMENT FOR CASITAS MUNICIPAL WATER DISTRICT COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI)" attached hereto for the complete text of the Rate and Method.

The Bonds are secured by a pledge of and lien upon all of the Special Tax Revenues (except the Minimum Adrrinistrative Expense Requirement which will be deposited in the Administrative Expense Fund for each fiscal year pursuanttothe Fiscal Agent Agreement) and all moneys on deposit in the Special Tax Fund, the Bond Fund, and the 2017 Reserve Policy held in the Reserve Fund. The Bonds are equally secured by a pledge of and lien upon such Special Tax Revenues and such moneys without priority for number, date of Bond, date of execution or date of delivery; and the payment of the interest on and principal of the Bonds and any premium upon the redemption of any thereof shall be and is secured by a pledge of and lien upon such Special Tax Revenues and such moneys. Such Special Tax Revenues and all moneys deposited into such funds are dedicated in their entirety to the payment of the principal of, and interest and

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any premium on, the Bonds, as pro.tided in the Fiscal Agent Agreement and in the Act, until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purp:ise in accordance with the Fiscal Agent Agreement.

The Bonds are not secured by any amounts on dep:isit in the Administrative Expense Fund, the lrrprcwement Fund, the Rebate Fund or the Costs of Issuance Fund established under the Fiscal Agent Agreement. Any facilities financed with the proceeds of the Bonds are not in any way pledged to pay debt service on the Bands.

In the Fiscal Agent Agreement, the Water District has agreed to effect the levy of the Special Taxes each Fiscal Year in accordance with the Ordinance and the Rate and Method. Specifically, the General Manager shall compute the amount of Special Taxes to be levied each Fiscal Year before the final date on which the County Auditor-Controller (the "Auditor") will accept the transmission of the Special Tax amounts for the parcels within the District for inclusion on the next secured or unsecured, as applicable, real property tax rol I. U pan the completion of the computation of the amounts of the I evy, the General Manager shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the next real property tax roll. The Special Taxes so levied shall be payable and be collected in the same manner andatthesametime and in the same installment as the advaloremtaxes on property levied on the tax roll 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 ad valorem taxes levied on the County secured tax roll.

The Fiscal Agent Agreement pro.tides that Water District shall fix and levy the amount of Special Taxes within the District required forthe payment of the principal of and interest on any outstanding Bands becoming due and payable, incl udi ng any necessary replenishment or expenditure of the Reserve Fund, and the amount estimatedtobesufficienttopaytheAdministrative Expenses. Special Taxes may also be levied to pay directly for acquisition and construction of Authorized Facilities. The Special Taxes so levied shall not exceed the authorized amounts for the District as pro.tided in the Ordinance and Rate and Met hod. Such maximum amount may not be sufficienttofully replenish the Reserve Fund in the event of the delinquency of payment of Special Taxes levied on property in the District. In addition, under the Act, no increase to the Special Taxes on any one parcel ofresidential property may exceed HJ% toccwer delinquencies caused by other parcels. See"APPENDIX C-RATE AND METHOD OF APPORTIONMENT FOR CASITAS MUNICIPAL WATER DISTRICT COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI)."

Minimum Adninistrative Expenses. "Minimum Administrative Expense Requirement'' means $50,000for Fiscal Year 2017/18, escalating by ZYo each Fiscal Year thereafter. Such amounts shall be dep:isited in the Administrative Expense Fund.

Prepayment of Special Taxes. Under the Rate and Method, the Special Tax obligation for any parcel within the District may be prepaid in part, or in full and permanently satisfied at any time. See "APPENDIX C-RATEAND METHOD OF APPORTIONMENT FOR CASITAS MUNICIPAL WATER DISTRICT COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI)." Any prepayment of Special Taxes will result in a mandatory redemption of Series B Bonds. See'THE BONDS- Redemption of Series B Bonds -Mandatory Rederrption from Special Tax Prepayments."

Collection andApplication of Special Taxes. The Fiscal Agent Agreement pro.tides thatthe Special Taxes shall be payable and be collected (except in the event of judicial foreclosure proceedings pursuantto the Fi seal A gent Agreement) i n the same manner and at the same ti me and i n the same i nstal I ments 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

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delinquency as do the general taxes on real property. Notwithstanding the foregoing, the General Manager may elect, as may be permitted b,I the Ordi nance, to col I ect the Special Taxes to be I evi ed for any fi seal year directly from the o.vners of the parcels of taxable property upon which the Special Taxes are levied rather than b,I transnitting the amount of the Special Taxes to the Auditor for collection on the tax roll. Except for certain exceptions (prepayments of Special Taxes, the Minimum Adninistrative Expense Requirement and the payment of delinquent Special Taxes), the Special Taxes will be deposited in the Special Tax Fund established underthe Fiscal Agent Agreement when received b,I the Water District. See "APPENDIX A -SUMMARY OF THE FISCAL AGENT AGREEMENT."

U nder the Fi seal A gent Agreement, the Water District has co.tenanted and agreed not to consent or conduct proceedings with respect to a reduction in the maximum Special Taxes that may be levied in the District on Developed Property belo.v an amount, for any Bond Year, equal to 11036 of the aggregate of the debt service due on the Bonds in such BondY ear, plus a reasonable estimate of Administrative Expenses for each such BondY ear. See "SPECIAL RISK FACTORS -Voter Initiatives" herein.

Although the Special Tax will constitute a lien on the Developed Property within the District which is suqject to taxation, it does not constitute a personal indebtedness of either of the current or any future property o.vners within the District. There is no assurance that the landONners within the District will be financially able to pay the annual Special Tax or that they will pay such tax even if financially able to do so. The risk of property o.vners within the District not paying the annual Special Tax is more f ul ly described under the heading "SPECIAL RISK FACTORS -Levy and Collection of the Special Taxes -Factors that Could Lead to Special Tax Deficiencies."

Under the terms of the Fiscal Agent Agreement, all Special Tax Revenues received b,I the Water District are to be deposited in the Special Tax Fund upon receipt. Notwithstanding the foregoing, (i) the first Special Tax Revenues collected b,I the Water District in any Fiscal Year, in an amount equal to the portion of such Fiscal Year's Special Tax levy for Administrative Expenses (but nottoexceed, in any Fiscal Year, the Minimum Administrative Expense Requirement), shall be deposited b,I the General Manager in the Administrative Expense Fund; (ii) any Special Tax Revenues constituting the collection of delinquencies in payment of Special Taxes shall be separately identified b,I the General Manager of the Water District and shall be renitted b,I the General Manager first, for transfer to the Fiscal Agent for deposit b,I the Fiscal Agent in the Bond Fund to pay any past due debt service on the Bonds and second for transfer to the Fiscal Agent for deposit b,I the Fiscal Agent in the Reserve Fund to the extent needed to increase the amount then on deposit in the Reserve Fund up to the then Reserve Requirement before transferring to the remainder to the Bond Fund, and (iii) any proceeds of Special Tax Prepayments shall be separately identified b,I the General Manager and shall be renitted b,I the General Manager to the Fiscal Agent for deposit b,I the Fiscal Agent as folio.vs (as directed in writing b,I the General Manager): (a) that portion of any Special Tax Prepayment constituting the Future Facilities Costs (as defined in the Rate and Method) shall be deposited b,I the Fiscal Agent to the I mprcwement Fund so long as the I mprcwement Fund has not theretofore been closed, and if the I mprcwement Fund has been closed, then such amount shall be retained b,I the Water District to be used to pay Prqject costs; and (b) any remaining portion of any Special Tax Prepayment shall be deposited b,I the Fiscal Agent in the Special Tax Prepayments Account.

No later than the third Business Day priorto each Interest Payment Date, the Water District shall withdraw from the Special Tax Fund and transfer, in the follo.ving order of priority: (i) to the Fiscal Agent for deposit in the Bond Fund an amount, taking into account any amounts then on deposit in the Bond Fund such that the amount in the Bond Fund equals the principal, premium, if any, and interest due on the Bonds on the next Interest Payment Date and (ii) to the Reserve Fund an amount such that the amount then on deposit therein is equal to the Reserve Requirement pro.tided that no such transfers shall exceed the amount then available to be transferred from the Special Tax Fund.

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In addition to the foregoing, if in any fiscal year there are sufficient funds in the Special Tax Fund to make the foregoing transfers to the Bond Fund and the Reserve Fund in respect of the Interest Payrrent Dates occurring in the Bond Year that comrrences in such fiscal year, the General Manager of the Water District may transferto the Administrative Expense Fund, from tirre to tirre, any amount in the Special Tax Fund in excess of the amount needed to make such transfers to the Bond Fund and the Reserve Fund, if monies are needed to pay Administrative Expenses in excess of the amount then on deposit in the Administrative Expense Fund. See "APPENDIX A -SUMMARY OF THE FISCAL AGENT AGREEMENT."

Parity Bonds

The Fiscal Agent Agreerrent pernits the District to issue "Parity Bonds," which are defined as bonds issued b,I the Water District for the District pursuantto the pr0.ti si ans of the Fi seal A gent A greerrent payable from Special Taxes on a parity with the Series B Bonds, suqject to the conditions set forth in the Fiscal Agent Agreerrent. These pr0.tisions include that the Water District must be in compliance with all c0.tenants set forth in the Fiscal AgentAgreerrent, that interest on Parity Bonds must be payable on March 1 and September 1 and principal must be payable on September 1 in any year in which principal is payable, and thattheWater District must certify that the Maximum Special Taxes to be levied in every year, less the M inimumAdministrative Expense Requirerrent in such year, are at least equal to 11036 of the debt service payable on the Outstanding amount of the Bonds and the Parity Bonds to be issued in every such year. The Water District may also establish a separate reserve fund with respect to a series of Parity Bonds, which may be funded in cash or in the form of a surety bond or other Credit Facility, pr0.tided that such reserve account shall only secure the repayrrent of such parity obligations and shall not secure the Series A Bond or Series B Bonds or any other issue of parity obligations.

Reserve Fund

A Reserve Fund has been established under the Fiscal Agent Agreerrent to be held b,I the Fiscal Agent to further secure the tirrely payrrent of principal of and interest on the Series A Bonds and Series B Bonds. The Water District must maintain a balance in the Reserve Fund equal to the Reserve Requirerrent. The Reserve Requirerrent is, as of any date of calculation, the lesser of 7'JYo of (i) 1036 of the par amount oftheSeriesB Bonds; (ii) MaximumAnnual DebtServiceontheSeriesB Bonds; or(iii) 12'JYo of average Annual Debt Service on the Seri es B Bands.

All amounts on deposit in the Reserve Fund shall be used and withdrawn b,I the Fiscal Agent solely for the purpose of making transfers to the Bond Fund in the event of any deficiency at any tirre in such fund of the amountthen required for payrrent of the principal of and interest and any premium on the Series A Bands or the Series B Bands.

The Reserve Fund established for the Bonds secures only the Series A Bonds and the Series B Bonds, and will not secure any other series of Parity Bonds that may be issued under the Fiscal Agent Agreerrent (see "Parity Bonds" alx:we).

The Fiscal AgentAgreerrent pr0.tides that in lieu of a cash deposit, the Water District may satisfy all or a portion of the Reserve Requirerrent b,I rreans of Credit Facility (see "APPENDIX A -SUMMARY OF THE FISCAL AGENT AGREEMENT" herein).

Credit Facility. Concurrently with the issuance of the Bonds, BAM will issue the 2017 Reserve Policy for the Series A Bonds and the Series B Bonds in the face amount of $2,624,671.88. The 2017 Reserve Policy constitutes a Credit Facility under the Fiscal Agent Agreerrent and is being issued in the amount of the Reserve Requirerrent. BAM is also issuing the 20171 nsurance Policy for the Insured Bonds,

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but is not pr0.tiding municipal bond insurance for the Uninsured Bonds. Information regarding BAM is discussed herein under "MUNICIPAL BOND INSURANCE - Build America Mutual Assurance Company."

WHILE BAM HAS NOT ISSUED A POLICY INSURING OR GUARANTEE I NG THE PRINCIPAL OF AND,OR INTEREST ON THE UNINSURED BONDS. BAM HAS ISSUED THE 2017 RESERVE POLICY FOR THE BENEFIT OF ALL OF THE BONDS.

Rating agencies have do.vngraded or withdrawn the ratings on the claims-paying ability and financial strength of rmst of the nation's bond insurance companies. Deterioration in the financial condition of BAM or a failure to honor a driM' b,I BAM underthe 2017 Reserve Policy could occur. The Water District is not required under the Fiscal Agent Agreement to replace the 2017 Reserve Policy with cash or a replacement instrument in the e..rent the ratings of BAM decline or are withdrawn or BAM fails to honor a draw. If circumstances should ever cause the 2017 Reserve Pol icy to be canceled or discharged, such cancellation or discharge could be determined to create a deficiency in the Reserve Requirement previously satisfied b,I such 2017 Reserve Policy. Underthe Fiscal Agent Agreement, in the e..rentthat the amount on deposit in the Reserve Fund is less than the Reserve Requirement, the District is required to transfertothe Fiscal Agent an amount of available Special Tax Re..renues sufficientto maintain the amount in the Reserve Fund at such Reserve Requirement. Should the amount of Special Tax Re..renues then available to maintain the Reserve Fund at the Reserve Requirement be insufficient for such purpose, such i nsuffi ci ency would not result i n an event of default underthe Fi seal A gent Agreement, but the requi rement of the Water District to transfer available Special Tax Re..renues to the Fiscal Agent would continue.

No Teeter Plan

Collection of the Special Taxes is not suqject to the "Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds," as pr0.tided for in Section 4701 et seq. of the California Re..renue and Taxation Code (kno.vn as the "Teeter Plan"). Accordingly, collections of Special Taxes will reflect actual delinquencies, if any. See 'THE DISTRICT - Historical Levies and Tax Delinquencies" herein.

Investment of Funds

The Fiscal Agent Agreement pr0.tides that moneys in any fund or account created or established b,I the Fiscal Agent Agreement and held b,I the Fiscal Agent shall be invested b,I the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer's Certificate filed with the Fiscal Agent at least two (2) business days in ad.tance of the making of such investments. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest any such moneys in Pernitted Investments as described in the Fiscal Agent Agreement. See "APPENDIX A -SUMMARY OF THE FISCAL AGENT AGREEMENT" for a description of the Permitted Investments.

CO.tenant for Superior Court Foreclosure

Proceeds of Foreclosure Sales. The net proceeds received follo.ving ajudicial foreclosure sale of land within the District resulting from a I ando.vner' s fai I ure to pay the Special Taxes when due are included within the Special Tax Re..renues pledged to the payment of principal of and interest on the Bonds under the Fiscal Agent Agreement.

Pursuant to Section 53356.1 of the Act, in the e..rent of any delinquency in the payment of any Special Tax or receipt b,I the Water District of Special Taxes in an amount which is less than the Special Tax le.tied, the Board of Directors, as the legislative body of the District, may orderthat Special Taxes be

17

collected b,I a superior court action to foreclose the lien within specified time limits. In such an action, the real property suqject to the unpaid amount may be sold at ajudicial foreclosure sale. Under the Act, the commencement of j udi ci al for eel osure fol Io.vi ng the nonpayment of a Special Tax is not mandatory. H o.ve.ter, the Water District has co.tenanted for the benefit of the o.vners of the Bands that it wi 11 commence and di Ii gently pursue to completion, j udi ci al for eel osure proceedi ngs against ( i) properties in the District with three delinquent installments of the payment of Special Taxes no laterthan the sixth month follo.ving the date on such third installment of such Special Taxes were due, suqject to a minimum of $2,500 in delinquent Special Taxes; and (ii) all properties with delinquent Special Taxes b,I the Octolber 1 follo.ving the close of each fiscal year in which the District receives Special Taxes in an amount which is less than 95% of the total Special Taxes le.tied, pro.tiding, ho.ve.ter, the Water District shal I not be required to order and cause j udi ci al foreclosure proceedings to be commenced agai nst particular del i nquent properties if the Water District determines that the cost of pursuing such foreclosure is greater than the outstanding delinquency. See "APPENDIX A - SUMMARY OF THE FISCAL AGENT AGREEMENT - Other Co.tenants of the District -Co.tenant to Foreclose."

If foreclosure is necessary and other funds (including amounts in the Reserve Fund) have been exhausted, debt service payments on the Bonds could be delayed until the foreclosure proceedings have ended with the receipt of any foreclosure sale proceeds. Judicial foreclosure actions are suqject to the normal delays associated with court cases and may be further slo.ved b,I bankruptcy actions, involvement b,I agencies of the federal gcwernment and other factors beyond the control of the Water District and the District. See "SPECIAL RISK FACTORS -Bankruptcy Delays." Morecwer, no assurances can be given that the real property suqject to foreclosure and sale at ajudicial foreclosure sale will be sold or, if sold, that the proceeds of such sale will be sufficient to pay any delinquent installment of Special Taxes. See "SPECIAL RISK FACTORS-AssessedValuations" and"-PropertyValues." AlthoughtheActauthorizes the Water District to cause such an action to be commenced and diligently pursued to completion, the Act does not impose on the District or the Water District any obligation to purchase or acquire any lot or parcel of property sold at a foreclosure sale if there is no other purchaser at such sale. The Act pro.tides that, in the case of a delinquency, the Special Taxes will have the same lien priority as is pro.tided for ad valorem taxes.

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MUNICIPAL BOND INSURANCE

Bond Insurance Policy

Concurrently with the issuance of the Bonds, BAM will issue its Municipal Bond Insurance Policy (the" 20171 nsurance Pol icy") for the Series B Bands maturing on September 1 of the years 2024 through 2047, inclusive, with CUSIP numbers 14762PAH6 through 14762PAY9 (collectively, the "Insured Bonds"). The 20171 nsurance Policy guarantees the scheduled payment of principal of and interest on the Insured Bonds when due as set forth in the form of the 20171 nsurance Policy included as an Appendix to this Official Statement.

The 2017 Insurance Policy is not ccwered b,I any insurance security or guaranty fund established under Ne.vY ork, California, Connecticut or Florida insurance law.

Build America Mutual Assurance Company

BAM is a Ne.vYork doniciled mutual insurance corporation. BAM pro.tides credit enhancement products solely to issuers in the U.S. public finance markets. BAM will only insure obligations of states, political subdivisions, integral parts of states or political subdivisions or entities otherwise eligible for the exclusion of income under section 115 of the U.S. Internal Revenue Code of 1986, as amended. No member of BAM is liable for the obligations of BAM.

The address of the principal executive offices of BAM is: 200 Liberty Street, 27th Floor, Ne.v York, Ne.v York 10281, its telephone number is: 212-235-2500, and its website is located at: www.buildarnerica.com.

BAM is licensed and suqject to regulation as a financial guaranty insurance corporation underthe laws of the State of Ne.vY ork and in particular Articles 41 and 69 of the Ne.vY ork Insurance Law.

BAM's financial strength is rated "AA;Stable'' b,I S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC ("S& P"). An explanation of the significance of the rating and current reports may be obtained from S& P at www.standardandpoors.com. The rating of BAM should be evaluated independently. The rating reflects the S&P's current assessment of the creditworthiness of BAM and its ability to pay claims on its policies of insurance. The abcwe rating is not a recommendation to buy, sell or hold the Bonds, and such rating is suqject to revision or withdrawal at any time b,I S&P, including withdrawal initiated atthe request of BAM in its sole discretion. Any do.vnward revision or withdrawal of the abcwe rating may have an adverse effect on the market price of the Bonds. BAM only guarantees scheduled pri nci pal and scheduled interest payments payable b,I the issuer of the B ands on the date( s) when such amounts were initially scheduled to become due and payable (suqject to and in accordance with the terms of the Policy), and BAM does not guarantee the market price or liquidity of the Bonds, nor does it guarantee that the rating on the Bands wi 11 not be revised or withdrawn.

Capitalization of BAM

BAM's total admitted assets, total liabilities, and total capital and surplus, as of December 31, 2016 and as prepared i n accordance with statutory accounti ng practices prescribed or permitted b,I the N e.v Y ork State Department of Financial Services were $496.7 million, $65.2 nil lion and $431.5 million, respectively.

BAM is party to a first loss reinsurance treaty that pro.tides first loss protection upto a maximum of 15% of the par amount outstanding for each policy issued b,I BAM, suqject to certain limitations and restri cti ans.

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BAM's most recent Statutory Annual Staterrent, which has been filed with the New Yark State Insurance Departrrent and p:isted on BAM's website atwww.buildarrericacom, is incorporated herein b,I reference and may be obtained, without charge, upon request to BAM at its address pro.tided alx:we (Attention: Finance Departrrent). Future financial staterrents will similarly be made available when published.

BAM makes no representation regarding the Bonds or the ad.tisability of investing in the Bonds. In addition, BAM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Staterrent or any information or di sci osure contained herein, or omitted herefrom, otherthan with respect to the accuracy of the i nformati on regarding BAM, suppliedb,I BAM andpresentedunderthe heading"MUNICIPAL BOND INSURANCE".

Additional Information Available from BAM

Credit Insights Videos. For certain BAM-insured issues, BAM produces and p:ists a brief Credit Insights video that pro.tides a discussion of the obligor and some of the key factors BAM's analysts and credit comnittee considered when apprcwi ng the credit for insurance. The Credit Insights videos are easily accessible on BAM's website at buildarrerica.com/creditinsights/. (The preceding website address is pro.tided for convenience of reference only. I nformati on avai I able at such address is not i ncorporated herein b,I reference.)

Credit Profiles. Prior to the pricing of bonds that BAM has been selected to insure, BAM may prepare a pre-sale Credit Profile forthose bonds. These pre-sale Credit Profiles pro.tide information about the sector designation (e.g. general obligation, sales tax); a preliminary summary of financial information and key ratios; and demographic and economic data relevant to the obligor, if available. Subsequent to closing, for any offering that includes bonds insured b,I BAM, any pre-sale Credit Profile will be updated and superseded b,I a final Credit Profile to include information about the gross par insured b,I CUSIP, maturity and coupon. BAM pre-sale and final Credit Profiles are easily accessible on BAM's website at buildarrerica.com/obligor/. BAM will produce a Credit Profile for all bonds insured b,I BAM, whether or not a pre-sale Credit Profile has been prepared for such bonds. (The preceding website address is pro.tided for convenience of reference only. Information available at such address is not incorporated herein b,I reference.)

Disclaimers. The Credit Profiles and the Credit Insights videos and the information contained therein are not recomrrendations to purchase, hold or sell securities or to make any investrrent decisions. CrediHelated and other analyses and staterrents in the Credit Profiles and the Credit Insights videos are staterrents of opinion as of the date expressed, and BAM assurres no responsibility to update the content of such material. The Credit Profiles and Credit I nsightvideos are prepared b,I BAM; they have not been reviewed or apprcwed b,I the issuer of or the underwriter for the Bonds, and the issuer and underwriter assurre no responsi bi I ity for their content.

BAM receives compensation (an insurance prenium) for the insurance that it is pro.tiding with respect to the Bonds. Neither BAM nor any affiliate of BAM has purchased, or committed to purchase, any of the B ands, whether at the i ni ti al offering or otherwise.

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THE DISTRICT

General

The District encompasses approximately 2,150 gross acres of land in the City of Ojai and unincorporated Ventura County. The District currently includes 2,854 residential d.velling units, approximately 1.15 million square feet of retail/commercial uses and 405,000 square feet of industrial uses. There are approximately 185 acres of vacant land in the District that are not currently suqject to the Special Tax.

Special Taxes securing the payment of the Bonds ½ill be levied only in the District, and only on the Developed Property (as described belON) in the District.

The District was formed for the purpose of financing the acquisition of, and subsequent i mprcwements to, the water system cwned and operated by Golden State Water Company ( see "Authorized Facilities" belcw) which serves property within the District (the "Ojai Water System''), and, upon acquisition, to transfer cwnershi p and operation of the Ojai Water System to the Water District.

The Water District's acquisition of the Golden State Water Company's Ojai Water System was pursuant to eminent domain proceedings (Casitas Municipal Water District v. Golden State Water Company, Ventura County Superior Court Case No. 56-2016-00481628-CU-£I--VTA, and referred to herein as the" Eninent Domain Action"). On April 12, 2017, the Water District, the District, Golden State Water Company, and certain private intervenors entered into a Settlement Agreement ("Settlement Agreement'') to resolve all of the parties' respective claims and defenses arising out of the Eninent Domain Action. Pursuanttothe Settlement Agreement, all claims of all parties in the Eminent Domain Action other than the Water District's cause of action for eminent domain were voluntarily dismissed with pr~udice and the Water District's eninent domain claim was resolved by a stipulation for entry of judgment and final judgment that was entered on April 19, 2017. Pursuant to the standard procedures applicable under the California's eminent domain law, the judgment pro.tides for the Water District to pay to Golden State Water Company the stipulated sum of $34,481,628 ( the "J udgment A mount") as j ust compensation for the taking of its Ojai Water System, suqject to certain post-closing aqjustments. TheJ udgment Amount will be paid from a portion of the proceeds of the Bonds on or beforeJ une 15, 2017. As soon as theJ udgment Amount is paid, the j udgment pro.ti des for the court to then enter a " Fi nal Order of Condemnation" i n order to effectuate the transfer of o.vnershi pand control of Golden State's Ojai Water System to the Water District."

With proceeds of the Bonds, the Water District will also finance approximately $8.1 nillion of imprcwements to the water system expected to be required in the first 3 years of operations. The Water District may finance additional irnprcwements in the future if needed (see "SECURITY FOR THE BONDS -Parity Bonds" herein).

The Bonds are not secured by the Ojai Water System assets or net revenues of the Ojai Water System but solely from the Special Taxes and certain funds held under the Fiscal Agent Agreement.

Authorization

Pursuant to the Act, on January 29, 2013, the Board of Directors adopted Resolution No. 13-08, stating its intention to establish the District. On March 13, 2013, follo.ving a duly noticed public hearing, the Board of Directors adopted Resolution No. 13-12 establishing the District and Resolution No. 13-13 deterni ni ng the necessity to incur bonded indebtedness in an amount not to exceed $60,000,000 within the District. Pursuant to Resolution No. 13-12, the Board of Directors called an election pursuant to the Act. On August 27, 2013, more than two-thirds of the voters in the District voting on the matter apprcwed the

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formation of the District, i rrposition of the special tax, and issuance of up to $60,000,000 of bonds for the District.

In 2013, afterthe Water District forrred the District, Golden State Water Company filed a I.M'suit in Ventura County Superior Court challenging the validity of the Water District's actions on various grounds and seeking to enjoin the August 27, 2013, special election called b,I the Water District. The trial court declined to enjoin the election. In early 2014, the trial court ruled on the rrerits in the Water District's favor and against Golden State Water Company on Golden State Water Company's challenge. Golden State Water Company appealed and in 2015 the Second District Court of Appeal affirmed the trial court's judgrrent on all grounds. (Golden State Water Company v. Casitas Municipal Water District (2015) 235 Cal.App.4th 1246.) Golden State Water Company then filed a petition for hearing in the California Suprerre Court, which denied review. The case is no.v final.

Rate and Method of Apportionment

The Water District is legally authorized and has co.tenanted in the Fiscal AgentAgreerrentto levy the Special Taxes in accordance with the Rate and Method. Pursuantto the Rate and Method, Special Taxes are levied only on "Developed Property" (that is, taxable property for which a building permit has been issued as of a certain date) up to the applicable Maximum Special Tax (as defined in the Rate and Method). Pursuant to the Rate and Method, the Special Tax can be levied for a period not to exceed 40 years comrrencing with Fiscal Year 2013/14. See "APPENDIX C - RATE AND METHOD OF APPORTIONMENT FOR CASITAS MUNICIPAL WATER DISTRICT COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI)."

Description of Authorized Facilities

From the proceeds of the Bonds and the Special Taxes, the District is authorized to pay all costs incurred b,I the Water District to acquire the real, personal, and intangible property and property rights o.vned or held b,I the Golden State Water Company, any of its affiliate(s), and any third parties or entities (collectively, "Golden State Water") in, to, and with respect to the water utility o.vned and operated b,I Golden State Water in Golden State Water Ojai Service Area, whether or not said property is physically located within the Golden State Water Ojai Service Area

In addition, the District is authorized to pay costs incurred to plan, design, engineer, finance, supervise, construct and install, inspect, and obtain necessary permits for the purchase, construction, imprcwerrent, or rehabilitation of any real or othertangible property or facilities with an estimated useful life of five years or longer which property or facilities the District deternines are necessary or appropriate to pro.ti de water uti I ity services i n the Golden State Water Ojai Service Area and which property or faci I iti es the District deternines either (i) are of primary benefit to the property o.vners, residents, businesses, and other persons and entities within the Golden State Water Ojai Service Area or (ii) if the Board of Directors deternines that said property or facilities benefit the property o.vners, residents, businesses, and other persons and entities within the Golden State Water Ojai Service Area but are not of primary benefit to such persons or entities, the portion of the District's costs for said property and facilities that the Board of Directors reasonably determines does not exceed such persons' or entities' fair share contribution therefor.

As described abcwe under the caption "General" abcwe, the Water District will use the proceeds of the Bands to acquire the Ojai Water System at a cost of $34,481,628, and to fund approximately $8.1 million of irnprcwerrents to the Ojai Water System expected to be needed imrrediately. These i mprcwerrents include system evaluation, a new pipeline, ni nor water main replacerrents, replacerrent of manual read rreters and service Ii nes, errergency po.ver i nstal I ati ans, wel I refurbi shrrent, and replacerrents or additions to equi prrent at the treatrrent faci Ii ty.

22

De..relopment Summary and Special Taxes

In accordance with the Rate and Method, Special Taxes are only levied on De.tel oped Property.

"Developed Property" is defined as a parcel of taxable property for which a building permit was issued on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Tax is levied.

The Maximum Special Tax rates for Developed Property are shewn in the table belcw. The Rate and Method i ncl uded two tiers of Maxi mum Special Tax rates. One ti er was to be I evi ed prior to the " 2"d Bond Issue," forthe purpose of paying costs associated with obtaining cwnershi p of the Ojai Water System from Golden State. The secondtierwill be levied afterthe" 2"d Bond Issue," for the purpose of paying debt service on the Bonds, imprcwements to the Ojai Water System and adninistrative costs of the Bonds. The Series B Bonds constitute the" 200 Bond Issue" for purposes of determining the Maximum Special Tax rates described in the Rate and Method.

In the first se..reral years follcwing issuance of the Bonds, the Water District intends to levy 9036 of the Maximum Special Tax and use the amounts in excess of the debt service on the Bonds and Administrative Expenses to fund additional i mprcwements to the Ojai Water System.

Maximum Special Tax

Land Parcel 2016/17 2017/18

Use Square Prior to 2"d After 2"d

Class Descri~tion Footage Bond Issue Bond Issue

1 SF Detached Unit 43,560SF or Larger $366.12 $2,265.53

2 SF Detached Unit ~>22,000SF and <43,560SF 215.42 1,336.80

3 SF Detached Unit ~> 10,000SF and <22,000SF 129.46 802.08

4 SF Detached Unit Less than 10,000SF 83.84 519.57

5 Condominium Unit Nf,A, 71.10 440.55

6 MF Attached Unit N /,A, 60.48 377.77

Commercial $0.0531 perSF $0. 3280 per S F 7 Property N /,A, Floor Area Floor Area

Industrial $0.0276 per SF $0.1721 perSF 8 Property N /,A, Floor Area Floor Area

In some instances a parcel of De.tel oped Property may contain more than one Land Use Class. The Maximum Special Tax le.tied on a parcel in such case shall be the sum of the Maximum Special Tax for all Land Use Cl asses I ocated on that parcel.

Further, in accordance with the Rate and Method, the Maximum Special Tax increases annually b,I an amount equal to two percent of the amount in effect for the previous Fiscal Year.

Table No. 1 on the follcwing page summarizes the De.tel oped Property within the District b,I Land Use Class underthe Rate and Method as of May 1, 2016, along with the Fiscal Year 2016/17 Special Tax levy, the 2017 /18 Maximum Special Tax that may be levied underthe Rate and Method on such Developed Property and the prqj ected 201 7 /1 8 Special Tax to be I e..ri ed to meetthe Special Tax R equi rement ( that is, debt service together with the Minimum Administrative Expense Requirement and funding of capital imprcwements). Table No. 2 summarizes the De.tel oped Property within the District b,I Land Use Class underthe Rate and Method, together with the prqjected 2017 /18 Special Tax based on 2016/17 Developed Property and allocation of the Bonds debt based on the prqjected 2017 /18Special Tax levy, and the County Fiscal Year 2016/17 assessed value of the Developed Property.

23

The follo.ving tables exclude 181 parcels of vacant land within the District encompassing approximately 184.9 acres. These parcels are not suqjecttoSpecial Taxes unless and until a building pernit has been issued with respect to such land. The Water District makes no representation as to if, or when, any such properties will be developed and suqject to the Special Tax.

24

TABLE NO. 1 DEVELOPMENT SUMMARY

Number of FY FY FY % of

Parcel Residential 2016/17 2017/18 2017/18 FY

Land Use Square Number Dwelling Bldg. Square Special Maximum Projected 2017/18 Class Descri~tion Footage of Parcels Units 111 Footage Tax S~ecial Tax 121 S ~ecial Tax 131 S~ecial Tax

SF Detached Unit 43,560 SF or Larger 385 391 N /,'\ $143,153 $ 885,822 $ 797,240 30.7%

2 SF Detached Unit ~>22,000SF and <43,560SF 250 259 N /,'\ 55,794 346,231 311,608 12.0

3 SF Detached Unit ~> 10,000SF and <22,000SF 486 510 N /,'\ 66,025 409,061 368,155 14.2

4 SF Detached Unit Less than 10,000 SF 1,028 1,054 N/A 88,284 547,627 492,864 19.0

5 Condominium Unit N/A 84 84 N/A 5,972 37,006 33,306 1.3

6 MF Attached Unit N/A 151 556 N/A 38,586 210040 189,036 7.3

Subtotal Residential Property 2,384 2,854 397,814 2,435,787 2,192,209 84.5

7 Commercial Property N /,'\ 189 N/A 1,151,688 61,481 377,754 339,978 13.1

8 Industrial Property N/A 34 N/A 404486 11 164 69612 62 651 2.4

Subtotal Non-Residential Property 223 1,556,174 72,645 447 366 402,629 15.5

Total 2,607 2,854 1,556,174 $470,459 $2,883,153 $2,594,838 100.0%

11 I Some parcels contain more than one residential welling unit and are subject to the combined tax rate for all residential wel Ii ng units I ocated on such parcel.

121 Based on the applicable Maxi mum S pecial Tax authorized to be levied after the issuance of the Bonds against 2,607 parcels of taxable property currently classified as Da,eloped Property. Assumes no change from Fiscal Year 2016/17 in the number of Da,eloped Property parcels, residential welling units or square footage and no further development occurred within the District on the 181 parcels, comprising 184.9 acres, currently classified as Unda,eloped Property. See "APPENDIX C -RATE AND METHOD OF APPORTIONMENT FOR CASITAS MUNICIPAL WATER DISTRICT COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI)." As of the date hereof, the Water District has received inquiries from property o.vners regarding the prepayment in full or in part of Special Taxes. The Water District m1kes no representation whether or not any prepayments wi 11 occur and if so, in what amount. Further, any prepayment received prior to the Closing Date will be used to pay for Authorized Facilities, and after the Closing Date, would be used to redeem Series B Bonds as described in "THE BONDS - Rederrpti on of Series B B onds - Mandatory Rederrpti on from S pecial Tax Prepayments."

131 Basedon90% oftheMaximumSpecialTax.

Source: David Taussig& Associates, Inc. and Harrell & Company Advisors, LLC.

25

TABLE NO. 2 SHARE OF DISTRICT BONDS

Number of FY FY

Residential Bldg. 2017/18 2016/17 Share of Value

Dwelling Square Projected Assessed District to Lien

Land Use Class Units 111 Footagel11 S ~ecial Tax 111121 Value 131 Bonds 141 Ratio 151

1 391 N /,'\ $ 797,240 $ 371,388,145 $12,261,979 30.3

2 259 N /,'\ 311,608 169,251,536 4,792,698 35.3

3 510 N /,'\ 368,155 215,036,299 5,662,421 38.0

4 1,054 N/A 492,864 324,820,052 7,580,513 42.8

5 84 N /,'\ 33,306 41,091,901 512,264 80.2

6 556 N/A 189,036 74035 641 2,907,475 25.5

Subtotal Residential 2,854 2,192,209 1,195,623,574 33,717,350 35.5

7 N/A 1,151,688 339,978 247,873,385 5,229,045 47.4

8 N/A 404486 62 651 29,346,237 963605 30.5

Subtotal Non-Residential 1,556,174 402,629 277,219,622 6,192,650 44.8

Total 2,854 1,556,174 $2,594,838 $1,472,843,196 $39,910,000 36.9

111 Assumes no change from Fiscal Year 2016/17 in number of Developed Property parcels, residential welling units or square footage. As of the date hereof, the Water District has received inquiries from property o.vners regarding the prepayment in full or in part of Special Taxes. The Water District makes no representation whether or not any prepayments will occur and if so, in what amount. Further, any prepayment received prior to the Closing Date will be used to pay for Authorized Facilities, and afterthe Closing Date, would be used to redeem Series B Bonds as described in "THE BONDS -Rederrption of Series B Bonds -Mandatory Rederrption from Special Tax Prepayments."

121 Basedon90!6 oftheMaximumSpecialTax.

131 Based on the Ventura County Assessor Roll for Fiscal Year 2016/17, with aJanuary 1, 2016valuation date.

141 Bonds allocated based on proportionate share of Fiscal Year 2017 /18 projected Special Tax levy.

151 Calculated o, dividing the respective "2016/17 Assessed Value'' column 0y the respective "Share of District Bonds" column. There are currently no CNerlapping assessment districts and/or other community facilities districts encumbering the District. Does not include CNerlapping general obligation debt (see "THE DISTRICT -Estimated Direct and Overlapping Debt'' belo.v).

Source: David Taussig& Associates, Inc.

The table sho.vn bel ON sets forth the ratio of the Maxi mum Special Taxes, for al I categ:iri es of existing Developed Property, less the Minimum Aclninistrative Expense Requirement, to the total debt service on the Bonds, based on existing Developed Property.

26

TABLE NO. 3 COVERAGE FROM DEVELOPED PROPERTY MAXIMUM SPECIAL TAX

Da,eloped Total C CNerage Property Minimum Net Based on

Bond Year Maximum Administrative Special Da,eloped Property Ending Special Expense Tax Debt Maximum Net

Se~tember 1 Taxes 111121 Reguirement Revenues Service 131 S~ecial Tax Ra,enues 2017 $ 470,459 N /,'\ $ 470,459 $ 100,505 N /,'\ 2018 2,883,153 $(50,000) 2,833,153 1,990,288 142% 2019 2,940,816 (51,000) 2,889,816 2,032,388 142% 2020 2,999,632 (52,020) 2,947,612 2,071,688 142% 2021 3,059,625 (53,060) 3,006,565 2,112,288 142% 2022 3,120,818 (54,120) 3,066,698 2,155,888 142% 2023 3,183,234 (55,200) 3,128,034 2,197,288 142% 2024 3,246,899 (56,300) 3,190,599 2,241,488 142% 2025 3,311,837 (57,430) 3,254,407 2,288,288 142% 2026 3,378,074 (58,580) 3,319,494 2,332,488 142% 2027 3,445,635 (59,750) 3,385,885 2,379,088 142% 2028 3,514,548 (60,950) 3,453,598 2,426,338 142% 2029 3,584,839 (62,170) 3,522,669 2,474,588 142% 2030 3,656,536 (63,410) 3,593,126 2,523,588 142% 2031 3,729,667 (64,680) 3,664,987 2,578,088 142% 2032 3,804,260 (65,970) 3,738,290 2,626,525 142% 2033 3,880,345 (67,290) 3,813,055 2,681,100 142% 2034 3,957,952 (68,640) 3,889,312 2,732,750 142% 2035 4,037,111 (70,010) 3,967,101 2,789,888 142% 2036 4,117,853 (71,410) 4,046,443 2,843,650 142% 2037 4,200,210 (72,840) 4,127,370 2,902,200 142% 2038 4,284,214 (74,300) 4,209,914 2,959,925 142% 2039 4,369,898 (75,790) 4,294,108 3,020,175 142% 2040 4,457,296 (77,310) 4,379,986 3,078,175 142% 2041 4,546,442 (78,860) 4,467,582 3,138,675 142% 2042 4,637,371 (80,440) 4,556,931 3,206,175 142% 2043 4,730,118 (82,050) 4,648,068 3,269,925 142% 2044 4,824,720 (83,690) 4,741,030 3,333,413 142% 2045 4,921,214 (85,360) 4,835,854 3,401,663 142% 2046 5,019,638 (87,070) 4,932,568 3,468,888 142% 2047 5,120,031 (88,810) 5,031,221 3,499,563 144%

11 I Notwithstanding the abCNe, the Rate and Method prCNi des that under no circumstances wi 11 the S pecial Tax I evied in any Fiscal Year against any Assessor's Parcel of Residential Property for which a Certificate of Occupancy has been issued be increased o, more than ten percentabCNetheamountthatwould have been la,ied in that Fiscal Year as a consequence of delinquency or default 0y the o.vner(s) of any other Assessor's Parcel(s) within the District.

121 Assumes no change from Fiscal Year 2016/17 in number of Developed Property parcels, residential dwelling units or square footage. As of the date hereof, the Water District has received inquiries from property o.vners regarding the prepayment in full or in part of Special Taxes. The Water District makes no representation whether or not any prepayments will occur and if so, in what amount. Further, any prepayment received prior to the Closing Date will be used to pay for Authorized Facilities, and afterthe Closing Date, would be used to redeem Series B Bonds as described in "THE BONDS -Rederrption of Series B Bonds -Mandatory Rederrption from Special Tax Prepayments."

131 Represents the debt service on the Bonds on September 1, 2017, less capitalized interest on the Series B Bonds and annual debt service on the Series B Bonds in all subsequent years.

Source: David Taussig& Associates, Inc. and Harrell & Company Advisors, LLC.

27

Historical Levies and Tax Delinquencies

The Water District levied Special Taxes in the District for the first time in Fiscal Year 2015/16. The Special Tax Levy for Fiscal Year 2015/16was $460,343. As ofJ une 30, 2016, the an'Dunt delinquent was $6,691 (1.5% of the total levy). The Special Tax was unpaid on 68 parcels, or 2.6% of parcels levied. As of April 10, 2017, only 11 parcels with Special Taxes of $754 remained delinquent.

The Special Tax Levy for Fiscal Year 2016/17 is $470,161, of which $235,081 was due b,I December 12, 2016. As of that date $8,181 of such =ntwas delinquent on a total 103 parcels (3.5% of the first installment of the levy). As of April 10, 2017, the due date forthe second installment of Special Taxes for the Fiscal Year 2016/17, $20,412 of the total tax levy was delinquent (4.3% of the levy). As of April 10, 2017, the Special Taxes for Fiscal Year 2016/1 ?were unpaid on 199 parcels, or 7.6% of parcels levied.

The Water District spent the Special Taxes levied in 2015/16 and 2016/17 to pursue the Eninent Domain Action.

Estimated Direct and Overlapping Debt

Set forth belo.v is a direct and overlapping debt report (the "Debt Report") prepared b,I California Municipal Statistics, Inc., as of February 1, 2017 for property in the District. The Debt Report is included for general information purposes only and the Water District makes no representation as to its accuracy or corrpl eteness.

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

Presently, the Developed Property is suqject to $54,764,847 of direct and overlapping tax and assessment debt and overlapping lease obligation debt, including the Bonds being issued. To repay the direct and overlapping tax and assessment debt and overlapping lease obligation debt, the o.vners of the I and wi thi n the District must pay the Special Taxes, any fixed assessments as applicable, and the general property tax levy.

I n addition, other publ i c agencies whose boundaries overlap those of the District could, without the consent of the Water District, and in certain cases without the consent of the o.vners of the land within the District, impose additional taxes or assessment liens on the real property within the District in order to finance public improvements or services to be located or furnished inside of or outside of the District. The lien created on the real property within the District through the levy of such additional taxes or assessments may be on a parity with the lien of the Special Taxes. The imposition of additional liens on a parity with the Special Taxes may reduce the ability or willingness of the property o.vners to pay the Special Taxes and increases the possibility that foreclosure proceeds, if any, realized from the sale of property with delinquent Special Taxes will not be adequate to pay delinquent Special Taxes.

28

As of June 30, 2016, liens for Property Assessed Clean Energy ("PACE") financings made through the Horne Energy Ren0.tation Opportunity (HERO) program existed against eight parcels within the District. The cwerlapping debt information in this Official Statement does not include these PACE liens, or any additional PACE liens that may have arisen since such date. The PACE financing program was developed to assist horneo.vners in obtaining funds for solar panels imprcwements, energy efficient windo.vs and doors, high efficiency heating, ventilation and air conditioning systems, cool roofs and artificial turf and si ni lar energy efficiency prqjects authorized thereunder.

TABLE NO.4 DIRECT AND OVERLAPPING DEBT SUMMARY

2016-17 Assessed Valuation of Da,eloped Property: $1,472,843,196

DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT:

Ventura County Comnunity College District General Obligation Bonds

Ojai Unified School District General Obligation Bonds Casitas Municipal Water District Community Facilities District No. 2013-1

TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT

OVERLAPPING GENERAL FUND DEBT:

Ventura County General Fund Obi i gati ons

Ventura County Superintendent of Schools Obi igati ons

TOTAL OVERLAPPING GENERAL FUND DEBT

COMBINED TOTAL DEBT

Ratios to 2016-17 Assessed Valuation: Direct Debt ($39,910,000) ................................................... 2.71% 111

Total Direct and Overlapping Tax and Assessment Debt ...... 3.43%

Combined Total Debt ............................................................ 3. 72%

111 The Bonds.

% Applicable

1.199!6 38.586

100.

1.198!6 1.198

Debt 2/1 /17 $ 3,486,537

7,092,026 39,910,000 (l)

$50,488,563

$ 4,155,965

120 319

$ 4,276,284

$54,764,847 121

121 Excludes tax and ra,enue anticipation notes, revenue, mortgage ra,enue and non-bonded capital I ease obi i gations.

Source: California Municipal Statistics.

Estimated Tax Rate

Set forth on the follo.ving page is Table No. 5 which pr0.tides the estimated effective tax rates for all Special Tax categories under the Rate and Method of Residential Developed Property, assuming all property is located within the Ojai Valley Sanitary District ("Sanitary District") and suqject to the fixed sewer assessments col I ected on the tax rol I b,I the Sanitary District.

29

TABLE NO. 5 ESTIMATED TOTAL EFFECTIVE TAX RATES FOR RESIDENTIAL PROPERTY

Land Use Class

1 2 3 4 5 6 Average Assessed Value 111 $966,300 $685,200 $445,500 $316,200 $489,200 $133,200

Homeo.vner's Exemption 121 (7,<XX>) (7,<XX>) (7,<XX>) (7,<XX>) (7,<XX>) ____1\1_,1,A.

Estim1ted Net Assessed Value 121 $959,300 $678,200 $438,500 $309,200 $482,200 $133,200

AdValoremTax Rate 131 1.0698!6 1.0698)6 1.0698)6 1.0698)6 1.0698)6 1.0698)6

FY 2016/17 AdValoremTax $ 10,263 $ 7,255 $ 4,691 $ 3,308 $ 5,159 $ 1,425

FixedAssessmentsf-,pecial Tax: CFD 2013-1 141 $ 2,039 $ 1,203 $ 722 $ 468 $ 397 $ 340

Sanitary DistrictSe.ver Charge 151 695 695 695 695 695 695 Other 151 125 124 103 100 83 54

E sti m1ted Total Tax $ 13,122 $ 9,277 $ 6,211 $ 4,571 $ 6,334 $ 2,514

Estim1ted Effective Tax Rate 1.37% 1.37% 1.42!6 1.4&6 1.31% 1.89%

111 Average assessed value for an occupied welling unit on a parcel containing only one residential welling unit, excluding multifarri ly attached units for Land Use Class 6, based on assessed value inform1tion prCNided o, the Ventura County Assessor as of January 1, 2016. Average assessed value for a Land Use Class 6 residential wel Ii ng unit represents equivalent value per residential welling unit with a multifamily structure, based on assessed value inform1tion prCNided o, the Ventura County Assessor as of January 1, 2016.

121 AssessedValueand advaloremtaxes for individually o.vned residential units incorporate o.vner-occupiedAssessed Value exemption of $7,<XX>. NetTaxable Average Assessed Value used to deterrrine the Projected Effective Tax Rate.

131 Based on the fiscal year 2016-2017 advalorem rates for all tax rate areas within the District. Rates subject to change in future years.

141 Based on the la,y of the projected fiscal year 2017-2018 Special Tax at 90)6 of the Maximum Special Tax to fund adrrinistrative expenses, debt service on the Bonds, and a direct levy for the costs of authorized public facilities.

151 Based on the fiscal year 2016-2017 charges identified on the Ventura County issued property tax bills for representative parcels within the District. Projected charges for a Land Use Class 6 unit represents equivalent charges per residential welling unit with a multifarrily structure. Charges subject to change in future years.

Source: Harrell & Company Advisors, LLC.

30

The Water District has no control cwerthe amount of additional debt payable from special taxes or assessments levied on all or a portion of the property within the District that may be incurred in the future by other gcwernmental agencies having jurisdiction ewer such property. Furthermore, nothing prevents cwners of property within the District from consenting to the issuance of such debt by other gcwernmental agencies. To the extent that such indebtedness is payable from assessments, special taxes levied pursuant to the Act, or other taxes, such assessments, special taxes, and other taxes may be secured by I iens on the property within the District on a parity with the lien of the Special Taxes.

The i ncurrence of any such additi anal indebtedness could cause the total debt on the property within the District to increase without any corresponding increase in the value of such property, thereby reducing (perhaps dramatically) the estimated value-to-lien ratios that exist at the time the Bonds are issued. The i ncurrence of such addi ti anal indebtedness could reduce the wi 11 i ngness and abi Ii ty of the property cwners within the District to pay Special Taxes when due. See "SPECIAL RISK FACTORS -Other Possible Claims Upon the Property Values."

Property Assessed Values

The most recent assessed value reported by the County Assessor for the Developed Property in the District was as of January 1, 2016, totaling $1,472,843,196. The assessed values of property in the District discussed in this Official Statement are from that County Assessor's secured property tax roll. These assessed values represent the "full cash value" of such property as determined by the County Assessor. Pursuant to rules of the State Board of Equalization that gcwern the County Assessor's valuation of property in the District, "full cash value" of real property means the price at which the unencumbered or unrestricted fee si mpl e i nterest in the real property ( suqj ect to any enforceable gcwernmental restrictions) would transfer for cash or its equivalent under prevailing market conditions. These rules also pro.tide that when valuing property as a result of a change in cwnership for consideration it shall be rebuttably presumed that the consideration valued in money (i.e., the purchase price), whether paid in money or otherwise, is the full cash value of the property. Pursuant to the California Constitution, the full cash value of property may reflect from year to year the inflationary rate notto exceed two percent for any given year or reduction as shewn in the consumer price index or comparable data for the area under taxingjurisdiction, or may be reduced to reflect substantial damage, destruction or other factors causi ng a decl i ne i n value.

No assurance can be given, therefore, that the assessed value of the Devel oped Property in the District will not be reduced by the County Assessor for Fiscal Year 2017 /18 or for any subsequent fiscal year.

See "SPECIAL RISK FACTORS -Property Values."

Assessed values, as deternined by the County Assessor, may not reflect the actual market value of property in the District (e.g., homes in the District might sell for more or less than the County Assessor's assessed value). The Water District does not intend to have an appraisal prepared to estimate the market value of any of the Developed Property in the District.

31

The District was formed in 2013. In 2012/13, the District had 2,604 parcels of Developed Property with an assessed value of $1,198,107,722. The first le.;y of Special Taxes occurred in 2015/16. Table No. 6 shews assessed valuations for all Developed Property in the District for Fiscal Year 2015/l 6and 2016/17.

2015/16 2016/17

TABLE NO. 6 HISTORICAL ASSESSED VALUATION

Number of Taxable Parcels

2,605 2,607

Land Value

$742,612,673 793,196,403

I mprcwement Value

$651,020,616 679,646,793

Source: County of Ventura; compiled o, David Taussig& Associates, Inc.

Top Taxpayers

Total $1,393,633,289 1,472,843,196

Table No. 7 on the follewing page shews the percent of the Fiscal Year 2017 /18 Prqjected Special Tax on Devel oped Property based on property ewnershi p status as of January 1, 2016 as pro.tided by the County of Ventura.

32

TABLE NO. 7 LARGEST TAXPAYERS

Number of Commercial/ FY FY Number Residential Industrial 2017/18 % of2017/18

of Dwelling Property B I dg. Prqjected Prqjected Property Owner Parcels Units Square Footage Special Tax 111 Special Tax --OVIS LLC 7 13 1 ffi,625 $ 38,480 1.48)6

Gables of Ojai LLC 2 59,798 17,652 0.68

Edelson, Sta,e 5 2 40,089 13,759 0.53

Vadnais, Dean-Gloria Tr 5 45,884 12,973 0.50

Community Memorial Health Systems 2 43,293 12,780 0.49

KO Management LLC 76,188 11,801 0.45

Resort Apartments LL C 34 11,560 0.45

Ojai B ungalo.vs LP 9 32 11,332 0.44

Ojai MedGroupetal 35,576 10,502 0.40

Cluff Investments LTD Part 34,500 10,184 0.39

Shamshiri, Rarrin-Langley Tr 2 6 9,726 0.37

Baskin, RobertTr 5 20 9,502 0.37

B j ornestad, Arthur Tr 56,446 8,743 0.34

Rains Farrily Investment Co 2 26,802 7,912 0.30

Ojai Valley School 7 8 7,899 0.30

Calabasas Estates LLC 48,906 7,575 0.29

417 Bryant Circle LLC 25,467 7,518 0.29

Rogers-Cooper Mem Foundation 2 7 7,477 0.29

Wells,Jack-Barbara Tr 3 19 7,323 0.28

Montgomery Oaks Assoc 21 7,140 0.28

M ere.vether, Mi cha el L -:J Tr 21 7,140 0.28

Ojai Valley Athletic Club 23,196 6,847 0.26

Ojai Grand Slam Inv LLC 2 __ 8 12 831 6508 0.25

Subtotal 63 191 638,601 252,334 9.72

A II Other Owners 2,544 2,663 917 573 2,342,504 90.28

Total 2,607 2,854 1,556,174 $2,594,838 100.00!6

(1) Assumed 90)6 of Maximum Special Tax

Source: County of Ventura; compiled o, David Taussig & Associates, Inc.

Estimated Total Valuation of Developed Taxable Property Within the District

Table Nos. 8 through 11 sho.v the pro-rata share of Bands al I ocated by esti mated Fi seal Y ear 2017 /18 Special Tax le.,,y summarized based on value-to-lien ratios ranges. The tables are segregated by resi den ti al , commercial and industrial properties.

33

Assessed Value-to-Lien

Belo.v 3:1

3:1 to4.99:1

5: 1 to 9.99: 1

10: 1 to 19.99: 1

20:1 to29.99:1

30:1 andabo,,e

Total

TABLE NO. 8 VALUE TO LI EN RATIO OF DEVELOPED PROPERTY (DISTRICT DEBT ONLY)

ALL LAND USE CLASSES COMBINED

Residential % of Dwelling Bldg. Special Share of Assessed

Parcels Units Sguare Feet 111 Tax~onds Bonds 121 Value 131

17 34 8,748 1.3% $ 505,727 $ 1,104,170

77 136 29,353 4.2% 1,675,033 7,061,780

214 249 125,184 8.5% 3,389,870 24,663,412

314 388 234,575 15.2% 6,071,390 92,303,035

374 515 287,986 18.9!6 7,552,874 187,750,400

1 611 1,532 870,328 51.9)6 20,715,106 1 , 1 59,960,399

2,607 2,854 1,556,174 100.0!6 $39,910,000 $1,472,843,196

See footnotes follo.ving Table No. 11.

Assessed Value-to-Lien

Belo.v 3:1

3:1 to4.99:1

5: 1 to 9.99: 1

10: 1 to 19.99: 1

20:1 to29.99:1

30: 1 and abo,,e

Total

TABLE NO. 9 VALUE TO LI EN RATIO OF DEVELOPED PROPERTY (DISTRICT DEBT ONLY)

RESIDENT I AL PROPERTY

Residential % of Dwelling Bldg. Special Share of Assessed

Parcels Units Sguare Feet 111 Tax&onds Bonds 121 Value 131

16 34 N /,'\ 1.2% $ 466,014 $ 1,008,964

72 136 N/A 3.9!6 1,561,879 6,589,952

203 249 N/A 7.4% 2,952,294 21,672,055

285 388 N /,'\ 12.7% 5,067,164 78,112,508

342 515 N/A 16.0!6 6,367,127 158,522,936

1,466 1,532 N/A 43.3% 17,302,872 929 717159

2,384 2,854 N /,'\ 84.5% $33,717,350 $1,195,623,574

See footnotes follo.ving Table No. 11.

34

Average Assessed Value

to Lien 141

2.2:1

4.2:1

7.3:1

15.2: 1

24.9:1

56.0:1

36.9:1

Average Assessed Value

to Lien 141

2.2:1

4.2:1

7.3:1

15.4: 1

24.9:1

53.7:1

35.5:1

TABLE NO. 10 VALUE TO LIEN RATIO OF DEVELOPED PROPERTY (DISTRICT DEBT ONLY)

COMMERCIAL PROPERTY

% of Assessed Residential Bldg. Special Share of Assessed

Value-to-Lien Parcels Units Sguare Feet 111 Tax&onds Bonds 121 Value 131

Belo.v 3:1 1 N /,'\ 8,748 0.1% $ 39,713 $ 95,206

3:1 to4.99:1 4 N /,'\ 20,032 0.2% 90,945 376,047

5: 1 to 9.99: 1 9 N /,'\ 64,573 0.7% 293,184 2,013,722

10: 1 to 19.99: 1 25 N /,'\ 206,391 2.4% 937,090 13,120,575

20: 1 to 29. 99: 1 31 N /,'\ 231,540 2.6!6 1,051,275 26,050,599

30:1 andabo,,e 119 N /,'\ 620,404 7.1% 2,816,838 206,217,236

Total 189 N /,'\ 1,151,688 13.1% $5,229,045 $247,873,385

See footnotes follo.ving Table No. 11.

TABLE NO. 11 VALUE TO LIEN RATIO OF DEVELOPED PROPERTY (DISTRICT DEBT ONLY)

INDUSTRIAL PROPERTY

Assessed Value-to-Lien

Belo.v 3:1

3:1 to4.99:1

5: 1 to 9.99: 1

10:1 to 19.99:1

20:1 to29.99:1

30: 1 and abo,,e

Total

Parcels

2

4

26

34

111 Industrial and Comnercial Property.

Residential Bldg. Units Sguare Feet 111

N/A

N/A 9,321

N/A 60,611

N/A 28,184

N/A 56,446

N/A 249,924

N /,'\ 404,486

% of Special Share of Assessed

Tax&onds Bonds 121 Value 131

0.0!6 $ $

0.1% 22,209 95,781

0.4% 144,392 977,635

0.2% 67,136 1,069,952

0.3% 134,472 3,176,865

1.4% 595,396 24,026,004

2.4% $963,605 $29,346,237

121 Bonds allocated based on the proportionate share of the estimated Special Tax la,y forthe District for Fiscal Year 2017 /18.

131 Ventura County Assessor Roll for Fiscal Year 2016/17.

141 Calculated as the "Assessed Value'' divided 0y the "Share of Bonds."

Source: David Taussig& Associates, Inc. and Harrell & Corrpany Advisors, LLC.

35

Average Assessed Value

to Lien 141

2.4:1

4.1 :1

6.9:1

14.0:1

24.8:1

73.2:1

47.4:1

Average Assessed Value

to Lien 141

4.3:1

6.8:1

15.9:1

23.6:1

40.4:1

30.5: 1

As describe alx:we under the caption "Property Assessed Values," a parcel's value is generally deterni ned upon sale ( change in o.vnershi p) or with respect to any ne.v construction on such parcel. The assessed val ue that is determined atthat ti me is i nfl ated annual ly up to 2% in accordance with the California Constitution. There are 16 residential parcels and 1 commercial parcel with an assessed value to lien ratio of less than 3:1. These residential parcels have not changed o.vnership, on average, since 1979. The commercial parcel has not changed o.vnership since 1959. There are also 72 residential parcels, 4 commercial parcels and 1 industrial parcel with an assessed value to lien ratiogreaterthan 3:1 but less than 5:1. These residential parcels have not changed o.vnership, on average, since 1978. These commercial parcels have not changed o.vnership, on average, since 1982. The industrial parcel has not changed o.vnershi p si nee 1962.

N otwi thstandi ng the foregoing and fol Io.vi ng discussions and esti mates of val ue, there is no assurance that, in the event of a foreclosure sale of a parcel for delinquent Special Taxes, any bid would be received for such property or that any bid received would be sufficientto pay the delinquent Special Taxes and any parity special taxes, taxes and assessments. See the section herein entitled "SPECIAL RISK FACTORS."

The Water District has no control cwerthe amount of additional indebtedness that may be issued in the future b,I other public agencies, the payment of which, through the levy of a tax or an assessment, may be on a parity with the Special Taxes and be secured b,I a lien on a parity with the lien securing payment of the Special Taxes. See 'THE DI STRICT -Estimated Direct and overlapping Debt" herein.

SPECIAL RISK FACTORS

Investment in the Bonds involves risks which may not be appropriate for certain investors. The follONing is a discussion of certain risk factors, in no particular order of importance, all of which should be considered, in addition to other matters set forth herein, in evaluating the investment quality of the Bonds. This discussion does not purport to be comprehensive or definitive. The occurrence of one or more of the events discussed herein could ad.tersely affect the ability or willingness of existing or future property o.vners within the District to pay the Special Taxes levied in the District when due. Such failure to pay Special Taxes could result in the inability of the Water District to make full and punctual payments of debt service on the Bonds. In addition, the occurrence of one or more of the events discussed herein could ad.tersely affect the value of the property in the Di strict.

Risks of Real Estate Secured Investments Generally

The owners of the Bonds will be suqject to the risks generally incident to an investment secured b,I real estate, including, without limitation, (i) ad.terse changes in local market conditions, such as changes in the market value of real property in the vicinity of the District, the suppiy of or demand for competitive properties in such area, and the market value of residential property or buildings and/or sites in the event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, gcwernmental rules (including, without linitation, zoning laws and laws relating to endangered species and hazardous materials) and fi seal policies; and ( i ii) natural disasters (incl udi ng, without Ii ni tati on, earthquakes, fi res and floods), which may result in uninsured losses.

No assurance can be given that the individual homeo.vners and other o.vners of Devel oped Property will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See" Levy and Collection of the Special Taxes - Factors that Could Lead to Special Tax Deficiencies" belo.v, for a discussion of certain limitations on the Water District's ability to pursuejudicial proceedings with respect to del i nquent parcels.

36

Limited Obligation to Pay Debt Service

The Water District has no obligation to pay principal of or interest on the Bonds if Special Tax col I ecti ons are deli nquent or i nsuffi ci ent for such purp:ises, other than from amounts, if any, avai I able under the 2017 Reserve Policy held in the Reserve Fund established for the Bonds or funds derived from the foreclosure and sale of parcels for Special Tax del i nquenci es. The Water District is not obi i gated to acwance its o.vn funds to pay debt service on the Bonds orto be the bidder at any foreclosure sale.

Levy and Collection of the Special Taxes

General. The principal source of payment of principal of and interest on the Bonds is the proceeds of the annual levy and collection of the Special Tax against Developed Property within the District.

Limitation on Special Tax Rate. The annual levy of the Special Tax on any parcel is lirrited to the maximum Special Tax rate authorized in the Rate and Method. The levy cannot be made at a higher rate even if the failure to do so means that the estimated proceeds of the levy and collection of the Special Tax, together with other available funds, will not be sufficient to pay debt service on the Bonds. Morecwer, the Special Tax I evy on a resi den ti al parcel may not be increased b,I more than HJ% as a consequence of delinquencies in payment of Special Taxes b,I other property o.vners in the District.

No Relationship Between Property Value and Special Tax Levy. Because the Rate and Method is not based on property value, the levy of the Special Taxwill rarely, if ever, result in a uniform relationship between the value of particular Developed Property and the amount of the levy of the Special Tax against those parcels. Thus, there will rarely, if ever, be a uniform relationship between the value of the parcels of Developed Property and their proportionate share of debt service on the Bonds, and certainly not a direct rel ati onshi p.

Factors that Could Lead to Special Tax Deficiencies. The follo.ving are some of the factors that might cause the levy of the Special Tax on any particular Developed Property to vary from the Special Tax that rright otherwise be expected:

Transfers to Gcwernmental Entities. The number of parcels of Developed Property could be reduced through the acquisition of Developed Property b,I a gcwernmental entity (b,I exercise of its rights as mortgage guarantor, or for other reasons) and fai I ure of the gcwernment to pay the Special Tax based upon aclaimof exemption or, in the case of the federal gcwernment or an agency thereof, immunity from taxation, thereb,I resulting in an increased tax burden on the remaining taxed parcels. See "SPECIAL RISK FACTORS - Enforcement of Special Taxes on Gcwernmentally owned Properties" belo.v.

Property Tax Delinquencies. F ai I ure of the o.vners of Devel oped Property to pay property taxes (and, consequently, the Special Tax), or delays in the collection of or inability to collect the Special Tax b,ltax sale or foreclosure and sale of the delinquent parcels, could result in a deficiency in the collection of Special Taxes. For a summary of Special Tax collections in the District, see 'THE DISTRICT -Historical Levies and Tax Delinquencies."

Delays Follo.vinq Delinquencies and Foreclosure Sales. The Fiscal Agent Agreement pro.tides thatthe Special Tax is to be collected in the same manner as ordinary advaloremproperty taxes are collected and, except as pro.tided in the special co.tenant in the Fiscal Agent Agreement for foreclosure described in "SECURITY FOR THE BONDS - Co.tenant for Superior Court Foreclosure" and in the Act, is suqject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is pro.tided for ordinary advaloremproperty taxes. Underthese

37

procedures, if taxes are unpaid for a period of five years or more, the property is suqject to sale b,I the County. See "SPECIAL RI SK FACTORS -Proceeds of Foreclosure Sales" belo.v.

I f sales or for eel osures of property are necessary to col I ect deli nquent Special Taxes, there could be a delay in payments to the District, pending such sales or the prosecution of foreclosure proceedi ngs and recei pt b,I the Water District of the proceeds of sale al I ocabl e to the Special Tax delinquencies if the amount available under the 2017 Reserve Policy held in the Reserve Fund for the B ands is depleted.

Payment of Special Taxes is Not a Personal Obligation of the Property Owners

Property owners are not personally obligated to pay their respective Special Taxes. Rather, the Special Taxes are obligations only against the respective parcels against which they are levied. If, after a default in the payment of the Special Tax and a foreclosure sale, the resulting proceeds are insufficient, taking into account other obligations also constituting a lien against the parcel, the Water District has no recourse against the parcel o.vner.

Assessed Valuations

The Water District 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 of Developed Property in the District set forth in this Official Statement is based on the County Assessor's values. The assessed value is not an indication of what a willing buyer might pay for a property. The assessed value is not evidence of future value because future facts and circumstances may differ significantly from the present.

No assurance can be given that any of the Developed Property in the District could be sold forthe assessed value if that property should become delinquent in the payment of the Special Taxes and suqject to foreclosure proceedings.

Property Values

The value of the Developed Property within the District is a critical factor in determining the investment quality of the Bonds. If a parcel o.vner defaults in the payment of the Special Taxes, the Water District's only remedy is to foreclose on the delinquent property to collect the delinquent Special Taxes.

The follo.ving is a discussion of risk factors that could affect the value of property in the District.

Prolonged Economic Do.vnturn. Declines in property values in the District could result in property o.vner unwillingness or inability to pay mortgage payments, as well as advalorem property taxes and Special Taxes, when due. Under such circumstances, bankruptcies are likely to increase. Bankruptcy b,I property o.vners with delinquent Special Taxes would delay the commencement and completion of foreclosure proceedings. See "Bankruptcy Delays" belo.v. Property values within the District were ad.tersely affected b,I a decline in market value along with the rest of the State as a result of the 2008--09 econonic crisis.

Risks Related to Mortgage Loans. Although residential prqjects that have their hares built and occupied b,I homeo.vners are typically viewed as pro.tiding bondholders with strong credits, sorre of the horre purchasers, especially those during 2004 to 2007, may face challenges in making their mortgage and tax payments on a timely basis, due to their initial high loan to value ratios, creative mortgage loan structures, and possible current negative equity levels.

38

Events in the United States and world-wide capital markets have affected and can ad.tersely affect the future availability of mortgage loans to homecwners, including potential buyers of horres within the District. Any such unavailability could hinderthe ability of the current homecwners to resell their homes, and ad.tersely affect the market prices available to current homecwners and ad.tersely affect the prospect for developrrent of the vacant parcels in the District.

Natural Disasters. The value of the parcels of Developed Property in the District in the future can be ad.tersely affected b,I a variety of natural occurrences, particularly those that may affect infrastructure and other public imprcwerrents and private imprcwerrents on the parcels in the District and the continued habitability and enjoyrrent of such private imprcwerrents. For example, the areas in and surrounding the District, like those in much of California, may be suqject to earthquakes or other unpredictable seisnic activity.

The District encompasses property in the City of Ojai ("Ojai") and its surrounding environs. According to safety elerrent of the Ojai General Plan, there are several faults and fault zones located near Ojai. In the event of a surface displacerrent along these fault zones, loss of life and property damage in the unincorporated County area and the incorporated areas of Ojai could be significant. Of primary concern are the Santa Ana/Arroyo Parida Fault Zone and the Lion Mountain Fault. Other seisnic hazards include ground shaking and liquefaction.

Other natural disasters could include, without linitation, floods, wildfires, droughts or tornadoes. According to the safety elerrent of Ojai's General Plan, there are no darns within, acjjacent to or upstream from Ojai which are large enough to endanger lives and property in the event of a failure. Ho.vever, flooding is considered a risk and some areas of Ojai, and therefore the District, are within a l(X}-year flood plain. Further, because area surrounding Ojai is ccwered with woodland, brush or grass I and, there is wi I dfi re risk depending on weather conditions. One or more natural disasters could occur and could result in damage to imprcwerrents of varying seriousness. The damage may entail significant repair or replacerrent costs and that repair or replacerrent may never occur either because of the cost, or because repair or repl acerrent will not facilitate habitability or other use, or because other considerations preclude such repair or replacerrent. Under any of these circumstances there could be significant delinquencies in the payrrent of Special Taxes, and the value of the taxable parcels may wel I depreciate.

Hazardous Substances. One of the most serious risks in terms of the potential reduction in the property values is a claim with regard to a hazardous substance. In general, the o.vners and operators of property may be required b,l law to rerredy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environrrental Response, Compensation and Liability Act of 1980, sometirres referred to as "CERCLA" or the "SuperfundAct," is the mostwell­kno.vn and widely applicabie of these laws, but California laws with regard to hazardous substances are also stringent and sinilar. Under many of these laws, the o.vner or operator is obligated to rerredy a hazardous substance condition of property whether or not the o.vner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the parcels of Developed Property in the District be affected b,I a hazardous substance, is to reduce the marketability and value of the parcel b,I the costs of rerredyi ng the condition, because the purchaser, upon beconi ng o.vner, wi 11 become obligated to rerredy the condition just as is the seller.

Although the Water District is not aware that the o.vner or operator of any of the parcels of Developed Property in the District has such a current liability, and no information is available as to the existence of any hazardous substances within the District, it is possible that such liabilities do currently exist. Further, it is possible that liabilities may arise in the future resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but that has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently on

39

the parcel of a substance not presently classified as hazardous but that may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these p:issibilities could significantly affect the property values that would otherwise be realized upon a deli nquency in the payment of Special Taxes.

Other Factors. Other factors that could ad.tersely affect property values in the District include, among others, relocation of employers out of the area, shortages of water, electricity, natural gas or other uti Ii ti es, and destruction of property caused b,I man-made disasters.

California Drought Conditions

From ti me to ti me, the State has experienced severe droughts, which caused a significant reduction in the amount of water avai I able from the California Aqueduct. Reductions were experienced i n years 2CXXl through 2004 at 9036, 3936, 7Cf36, 9036 and 65% of requested deliveries, respectively, and more recently in 2013 through 2016 at 35% , 5% , 2c»6 and 6c»6 , respectively. The recent 5-year drought affected the entire State, although since October 1, 2016, most of the State experienced alx:we average rainfall. While water supplies have recently imprcwed in many areas, the State's five-year drought underscored the need for permanent imprcwements in long-term efficient water use and drought preparedness, as called for in the previous executive order made b,I the Gcwernor. As a result of that order, the State Water Resources Control Board (the "State Water Board') and other State agencies released a draft plan that shifts from statewide mandatory water restrictions to.vard a set of long-term water-use efficiency standards. These actions are intended to help to ensure all communities have sufficient water supplies and are conserving water regardless of the conditions of any one year.

On April 7, 2017, Gcwernor Bro.vn declared California's drought emergency officially ewer in most parts of the State, including the Ojai area. Atthat time, the Gcwernor directed the State Water Board to lift the specific conservation pro.ti si ons of its drought emergency regulations but to keep in pl ace the temporary requirements for monthly water use reporting and prohibitions against wasteful water use practices while the State Water Board works to develop permanent reporting and wasteful use regulations. The temporary requirements will remain in effective until Ncwember 25, 2017when the emergency regulation expires.

The Water District cannot predict what effect any future drought conditions may have on property values, to what extent water reduction requirements may affect the homeo.vners or others in the District or to what extent drought could cause disruptions to econoni c activity within the boundaries of the District.

Other Possible Claims Upon the Property Values

While the Special Taxes are secured b,I a lien on the parcels of Developed Property in the District, the property is suqj ect to various parity Ii ens and other si ni I ar claims. Tables Ii sti ng the outstanding gcwernmental obligations affecting the District are set forth under "THE DISTRICT -Estimated Direct and overlapping Debt." In addition, other gcwernmental obligations may be authorized and undertaken or issued i n the future, the tax, assessment or charge for which may become an obi i gati on of one or more of the parcels within the District, and may be secured b,I a lien on a parity with the lien of the Special Taxes securing the Bands.

Based on the 2016/17 property tax roll, PACE liens exist against eight parcels of Developed Property within the District. The cwerlapping debt information in this Official Statement does not include these PACE liens, or any additional PACE liens that may have arisen since the date of the 2016/17 property tax roll. See 'THE DI STRICT -Estimated Direct and overlapping Debt."

40

I n general , the Special Taxes, and al I other taxes, assessments and charges al so col I ected on the tax roll, are on a parity, that is, are of equal priority. Questions of priority become significant when collection of one or more of the taxes, assessments or charges is sought b,I some other procedure, such as foreclosure and sale. If proceedings are brought to foreclose a delinquency, the Special Taxes will generally be on parity with the other taxes, assessments and charges, and will share the proceeds of such foreclosure proceedi ngs on a pro--rata basis.

Enforcement of Special Taxes on Gcwernmentally Owned Properties

General. The ability of the Water District to foreclose the lien of delinquent unpaid Special Tax installments may be limited with regard to properties in which the Federal Deposit Insurance Corporation (the" FDIC"), the Drug Enforcement Agency, the Internal Revenue Service, or other federal agency has or obtains an interest. Federal courts have held that, based on the supremacy clause of the United States Constitution, in the absence of Congressi anal intent to the contrary, a state or local agency cannot foreclose to col I ect delinquent taxes or assessments if foreclosure would impair the federal gcwernment interest.

The supremacy clause of the United States Constitution reads as folio.vs: 'This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereb,I, any Thing in the Constitution or Laws of any State to the contrary notwithstanding." This means that, unless Congress has otherwise pro.tided, if a federal gcwernmental entity o.vns a parcel that is suqjecttoSpecial Taxes within the District, but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local gcwernments cannot foreclose on the parcel to col I ect the deli nquent taxes and assessments.

Morecwer, unless Congress has otherwise pro.tided, if the federal gcwernment has a mortgage i nterest i n the parcel and the Water District wishes to foreclose on the parcel as a result of del i nquent Special Taxes, the property cannot be sold at a for eel osure sale uni ess it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal gcwernment' s mortgage interest. In Rustv.J ohnson (9th Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, Ninth Circuit held that the Federal National Mortgage Association(" FNMA") is a federal instrumentality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of state po.ver ewer a mortgage interest held b,I FNMA constitutes an exercise of state po.ver ewer property of the United States.

The Water District has not undertaken to determine whether any federal gcwernmental entity currently has, or is Ii kely to acquire, any interest (including a mortgage interest) in any of the parcels suqj ect to the Special Taxes within the District. No assurance can be given as to the likelihood that the risks described abcwe will materialize while the Bonds are outstanding.

FDIC. If any financial institution making any loan secured b,I real property within the District is taken ewer b,I the FDIC, and prior thereto or thereafter the loan (or loans) goes into default, resulting in o.vnershipofthe property b,I the FDIC, then the ability of the Water District to collect interest and penalties specified b,I State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited.

The FDIC's policy statement regarding the payment of state and local real property taxes (the "Policy Statement") pro.tides that property o.vned b,I the FDIC is suqject to state and local real property taxes only if those taxes are assessed according to the property's value, and thatthe FDIC is immune from real property taxes assessed on any basis otherthan property value. Accardi ng to the Policy Statement, the FD I C wi 11 pay its property tax obi i gati ons when they become due and payable and wi 11 pay claims for delinquent property taxes as prorrptly as is consistent with sound business practice and the orderly adninistration of the institution's affairs, unless abandonment of the FDIC's interest in the property is

41

appropriate. The FDIC will pay claim, for interest on delinquent property taxes o.ved atthe rate pro.tided under state law, to the extentthe interest payment obligation is secured by a valid lien. The FDIC will not pay any amounts i n the nature of fi nes or penal ti es and wi 11 not pay nor recognize I i ens for such amounts. If any property taxes (including interest) on FDIC--ONned property are secured by a valid lien (in effect before the property became o.vned by the FDIC), the FDIC will pay those claim,. The Policy Statement further pro.tides that no property of the FDIC is suqject to levy, attachment, garnishment, foreclosure or sale without the FDIC's consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure withoutthe FDIC's consent.

The Policy Statement states thatthe FDIC generally will not pay non-ad valorem taxes, including special taxes and assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time thatthe FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Special taxes imposed underthe Mel lo-­Roos Act and a special tax formula, which determines the special tax due each year, are specifically identified in the Policy Statement as being imposed each year and therefore ccwered by the FDIC's federal immunity. The Ninth Circuit issued a ruling on August 28, 2001, in which it deternined that the FDIC, as a federal agency, is exempt from M el I o--R oos special taxes.

The Water District is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency in the payment of Special Taxes on a parcel within the District in which the FDIC has or obtains an interest, although prohibiting the lien of the Special Taxes to be foreclosed on at ajudicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. Such an outcome could cause a draw on the 2017 Reserve Policy held in the Reserve Fund established for the Bonds and perhaps, ultimately, if enough property were to become o.vned by the FDIC, a default in payment on the Bonds.

Exemptions Under Rate and Method and the Mel lo-Roos Act. Certain properties are exempt from the Special Tax in accordance with the Rate and Method and the Act, which pro.tides that properties or entities of the state, federal or local gcwernment are exempt from the Special Tax; pro.tided, ho.vever, that property within the District acquired by a public entity through a negotiated transaction or by gift or devise, which is not otherwise exempt from the Special Tax, will continue to be suqject to the Special Tax.

In addition, although the Act pro.tides that if property suqject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment, the constitutionality and operation of these prcwisions of the Act have not been tested, meaning that such property could become exempt from the Special Tax. The Act further pro.tides that no other properties or entities are exempt from the Special Tax uni ess the properties or entities are expressly exempted i n a resolution of consideration to I evy a mw special tax or to alter the rate or method of apportionment of an existing special tax.

Proceeds of Foreclosure Sales

Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of any Special Tax, the Board of Directors, as the legislative body of the District, may orderthatthe Special Taxes be collected by a superior court action toforeclosethe lien within specified time limits. The Water District has co.tenanted in the Fiscal Agent Agreement that it will, under certain circum,tances, commence such a foreclosure action. See "SECURITY FOR THE BONDS -Co.tenant for Superior Court Foreclosure."

No assurances can be given that a Developed Property in the District that would be suqject to a judicial foreclosure sale for delinquent Special Taxes will be sold or, if sold, thatthe proceeds of such sale will be sufficient to pay the delinquent Special Tax installment. Although the Act authorizes the Water

42

District to cause such an action to be comnenced and diligently pursued to corrpletion, the Act does not specify any obligation of the Water District with regard to purchasing or otherwise acquiring any lot or parcel of property sold atthe foreclosure sale in any such action if there is no other purchaser at such sale and the Water District has not in any way agreed nor does it expect to be such a bidder.

In a foreclosure proceeding, ajudgrrent debtor (i.e., the property cwner) has 140 days from the date of service of the notice of le.;y in which to redeem the property to be sold and may have other redemption rights afforded b,I law. If ajudgrrent debtor fails to so redeem and the property is sold, his only rerredy is an action to set aside the sale, which must be brought within 90 days of the date of sale if the purchaser atthe sale was thejudgrrent creditor. If a foreclosure sale is thereb,I set aside, thejudgrrent is revived and thejudgrrent creditor is entitled to interest on the revivedjudgrrent as if the sale had not been made.

If foreclosure proceedings were ever instituted, any holder of a mortgage or deed of trust on the affected property could, but would not be required to, advance the amount of the delinquent Special Tax i nstal I rrent to protect its security interest.

In the event such superior court foreclosure or foreclosures are necessary, there could be a delay in principal and interest payrrents to the o.vners of the Bonds pending prosecution of the foreclosure proceedings and receipt b,I the Water District of the proceeds of the foreclosure sale, if any. Judicial foreclosure actions are suqject to the normal delays associated with court cases and may be further slewed b,I bankruptcy actions and other factors beyond the control of the Water District, including delay due to cro.vded local court calendars or legal tactics and, in any event could take several years to corrplete. In particular, bankruptcy proceedings i nvolvi ng the cwner of a Devel oped Property in the District could cause a delay, reduction or elimination in the flo.v of Special Tax Revenues to the Water District. See "Bankruptcy Delays" belo.v.

Depletion of Reserve Fund

A Reserve Fund has been established under the Fiscal Agent Agreerrent and the 2017 Reserve Policy deposited therein, which may be drawn upon to pay principal of and interest on the Seri es A Bands and Series B Bonds if insufficient funds are available from the proceeds of the levy and collection of the Special Taxes againstthe Developed Property within the District. See "SECURITY FOR THE BONDS -Reserve Fund."

If the amount available to be drawn under the 2017 Reserve Policy held in the Reserve Fund is depleted, the 2017 Reserve Policy will be available amount can be replenished from the proceeds of the I evy and col I ecti on of the Special Tax that are in excess of the amount required to pay the M i ni mum Administrative Expense Requirerrent and all amounts to be paid to the Fiscal Agent underthe Fiscal Agent Agreerrent. Ho.vever, no replenishrrent from the proceeds of a Special Tax le.;y can occur so long as the proceeds that are collected from the le.;y of the Special Tax against Developed Property within the District at the maximum Special Tax rates, together with other available funds, remain insufficient to pay all such amounts. Morecwer, the Special Tax le.;y on a residential parcel may not be increased b,I more than 1036 as a consequence of delinquencies in payrrent of Special Taxes b,I other property o.vners in the District. Thus, it is possible thatthe amount available underthe 2017 Reserve Policy held in the Reserve Fund will be depleted and not be replenished b,I the I evy of the Special Tax.

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Bankruptcy Delays

The payrrent of the Special Taxes, and the ability of the Water District to foreclose the lien of a delinquent unpaid Special Tax, may be limited b,I bankruptcy, insolvency or other laws generally affecting creditors' rights or b,I State laws relating to judicial foreclosure.

The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's appr0.ting legal opinion) will be qualified as to the enforceability of the various legal instrurrents b,I bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, b,I the appl i cation of equitable pri nci pl es and b,I the exercise of j udi ci al di sere ti on in appropriate cases.

Although bankruptcy proceedings would not cause the Special Taxes to become extinguished, bankruptcy of a property o.vner or any other person claining an interest in the property could result in a delay in superior court foreclosure proceedings and could result in the possibility of Special Tax i nstal I rrents not being paid in part or i n ful I. Such a delay would increase the Ii kel i hood of a delay or default in payrrent of the principal of and interest on the Bonds.

Disclosure to Future Purchasers

The Water District recorded a Notice of Special Tax Lien with respect to the District in the Office of the County Recorder on December 3, 2013. While title companies normally refertosuch notices in title reports, there can be no guarantee that such reference wi 11 be made or, if made, that a prospective purchaser or lender will considerthe obligations represented b,I the Special Taxes in the purchase of a parcel of land or a home in the District, or the lending of money secured b,I property in the District.

NoAcceleration

The Fiscal AgentAgreerrent does not contain a pr0.tision allo.ving for acceleration of the principal of the Bonds if a payrrent default or other default occurs underthe Fiscal Agent Agreerrent.

Loss of Tax Exemption

As discussed underthe heading"TAX MA TIERS," interest on the Bonds night become includable in gross incorre for purposes of federal income taxation retroactive to the date the Bonds were issued as a result of future acts or omissions of the Water District in violation of its c0.tenants in the Fiscal Agent A greerrent.

The Fi seal A gent A greerrent does not contai n a special redemption feature triggered b,I the occurrence of an event oftaxability. As a result, if interest on the Bonds were to be includable in gross income for purposes of federal i ncome taxation, the Bands would conti nue to remain outstandi ng unti I maturity unless earlier redeerred pursuant to the redemption pr0.tisions of the Fiscal Agent Agreerrent. See "THE BONDS -Redemption."

In addition, Congress has considered in the past, is currently considering and may consider in the future, legislative proposals, including some that carry retroactive effective dates that, if enacted, would alter or eliminate the exclusion from gross incorre for federal income tax purposes of interest on municipal bonds, such as the Bonds. Prospective purchasers of the Bonds should consult their o.vn tax advisors regarding any pending or proposed federal tax legislation.

44

Voter Initiatives

U nderthe California Constitution, the p::wer of initiative is reserved to the voters for the purp:ise of enacting statutes and constitutional amendments. Since 1978, the voters have exercised this p::wer through the adoption of Prop:isition 13 and similar measures, including Prop:isition 218, which was appr0.ted in the general election held on Ncwember 5, 1996, and Prop:isition 26, which was appr0.ted on N0.tember 2, 2010.

Any such initiative may affect the collection of fees, taxes and other types of revenue b,I local agencies such as the Water District. Suqject to 0.terriding federal constitutional principles, such collection may be materially and adversely affected b,I voter--apprcwed initiatives, possibly to the extent of creating cash--flo.v problems in the payment of outstanding obligations such as the Bonds.

Proposition 218-Voter Appr0.tal for Local G0.ternmentTaxes-linitation on Fees, Assessments, and Charges-Initiative Constitutional Amendment, added Articles XIIIC and XIIID to the California Constitution, imp:ising certain vote requirements and other linitations on the imp:isition of new or increased taxes, assessments and property,el ated fees and charges.

On N0.tember 2, 2010, California voters apprcwed Proposition 26, entitled the "SupermajorityVote to Pass New Taxes and Fees Act." Section 1 of Proposition 26 declares that Prop:isition 26 is intended to Ii nit the ability of the State Legislature and local g0.ternment to circurrwent existing restrictions on increasing taxes b,I defining the new or expanded taxes as "fees." Proposition 26 amended Articles XI I IA and XIIIC of the State Constitution. The amendments to Article XIIIA limit the ability of the State Legislature to imp:ise higher taxes (as defined in Prop:isition 26) without a two-thirds vote of the Legislature. Article XIIIC requires that all new local taxes be subnitted to the electorate before they become effective. Taxes for general g0.ternmental purposes require a majority vote and taxes for specific purposes ("special taxes") require a two-thirds vote.

The Special Taxes and the Bonds were each authorized b,I not less than a two-thirds vote of the registered voters residing within the District who constituted the qual i fi ed electors at the ti me of such voted authorization. The Water District believes, therefore, that issuance of the Bonds does not require the conduct of further proceedings underthe Act, Proposition 218 or Proposition 26.

Like their antecedents, Proposition 218 and Proposition 26 are Ii kely to undergo both judicial and legislative scrutiny before the impact on the District can be deternined. Certain pr0.tisions of Proposition 218 and Proposition 26 may be exanined b,I the courts for their constitutionality under both State and federal constitutional law, the outcome of which cannot be predicted.

Enforceability of Remedies

The remedies available to the Fiscal Agent and the o.vners of the Bonds upon a default under the Fiscal Agent Agreement or any other document described in this Official Statement are in many respects dependent upon regulatory and j udi ci al acti ans that are often suqj ect to discretion and delay. U nder existing law and judicial decisions, the remedies pro.tided for under such documents may not be readily available or may be linited. The legal opinions to be delivered concurrently with the issuance of the Bonds will be qualified to the extent that the enforceability of the legal documents with respect to the Bonds is suqject to linitations imp:ised b,I bankruptcy, reorganization, insolvency or other sinilar laws affecting the rights of creditors generally and b,I equitable remedies and proceedings generally.

45

Judicial remedies, such as foreclosure and enforcement of co.tenants, are suqject to exercise of judicial discretion. A California court may not strictly apply certain remedies or enforce certain co.tenants if it concludes that application or enforcement would be unreasonable underthe circumstances and it may delay the application of such remedies and enforcement.

Risks Related to Insured Bonds

The Bond Insurer. If the Water District fails to pro.tide funds to make payment of the principal of and interest with respect to the Insured Bands when the same shal I become due, any o.vner of such Insured Bands shal I have a claim on the 20171 nsurance Pol icy for such payments.

Purchasers of the Insured Bonds should also note that, while the 20171 nsurance Policy will insure payment of the principal amount (but not any premium) paid to any o.vner of the Insured Bonds in connection with the mandatory or optional prepayment of any Insured Bond which is reccwered from such o.vner as a voidable preference under applicable bankruptcy law, such amounts will be repaid b,I BAM to the owner only at the ti mes and in the amounts as would have been due albsent such prepayment uni ess the B ond I nsurer chooses to pay such amount at an earl i er date or dates.

So long as the Insured Bonds are Outstanding and BAM performs its obligations under the 2017 Insurance Policy, BAM shall be deemed to be the sole o.vner of the Bonds insured b,I it forthe purpose of exercising any voting right or privilege or giving any consent of direction or taking any other action that the owners of such B ands are enti tied to take pursuantto the Fi seal A gent Agreement pertai ni ng to defaults and remedies, and the duties and obi i gati ons of the Fi seal A gent.

If BAM is unable to make payments of principal of and interest on the Insured Bonds as such payments become due, the Insured Bands are payable solely from moneys received b,I the Fiscal Agent pursuanttothe Fiscal Agent Agreement. If BAM is required to pay principai of or interest with respect to the Insured Bands, no representation or assurance is given or can be made that such event wi 11 not ad.tersely affect the market price for or marketability of the Insured Bonds.

The long-term rating on the Insured Bonds is dependent, in part, on the claims paying ability or financial strength ratings, as applicable, of BAM' s current claims paying ability or financial strength ratings are predicated upon a number of factors which could change cwertime and could result in do.vngrading of the ratings on the Insured Bonds. Such a dONngrade could ad.tersely affect the market price for, and marketability of, the Insured Bonds. BAM is not contractually bound to maintain its present claims paying ability or financial strength ratings in the future. See "CONCLUDING INFORMATION -Ratings on the Bands" herei n.

Creditworthiness of the Bond Insurer. BAM's obligation under the 2017 Insurance Policy is a general obligation of BAM. Default b,I BAM may result in insufficient funds being available to pay the principal of and interest on the Insured Bonds. In such event, the remedies available to the Fiscal Agent may be limited b,I, among otherthings, certain risks related to bankruptcy proceedings, and may also have been altered priorto a default b,I BAM, which has the right, acting with the Fiscal Agent, without owner consent, and upon the occurrence of a default under the Fiscal Agent Agreement, to waive the applicable pro.ti si ons of the Fi seal A gent Agreement and to di rect the Fi seal A gent to enforce rights and remedies with respect to such Insured Bands.

When making an investment decision on the Insured Bonds a prospective owner should look to the ability of the Water District to pay principal and interest on the Bonds and not solely to BAM's ability to pay claims under the 2017 Insurance Pol icy. No review of the business or affairs of BAM has been conducted b,I the Water District in connection with the offering of the Insured Bonds. No assurance can be

46

given by the Water District as to BAM's ability to pay claim, under the 2017 Insurance Policy. See "MUNICIPAL BOND INSURANCE" herein and "APPENDIX G" hereto for further information concerning BAM and the 2017 Insurance Policy, including resources for obtaining certain financial information concerning BAM.

Secondary Market for Bands

There can be no assurance that there will be a secondary market for the Bonds or, if a secondary market exists, that any Bonds can be sold for any particular price. Prices of bond issues for which a market is bei ng made wi 11 depend upon then-prevai Ii ng ci rcumstances. Such prices could be substantial ly different frornthe original purchase price.

No assurance can be given that the market price for the Bands wi 11 not be affected by the i ntroducti on or enactment of any future I egi sl ati on (incl udi ng without I i rnitati on amendments to the I nternal Revenue Code), or changes in interpretation of the Internal Revenue Code, or any action of the Internal Revenue Service, including but not linited to the publication of proposed or final regulations, the issuance of rulings, the selection of the Bonds for audit exanination, or the course or result of any Internal Revenue Service audit or examination of the Bonds or obligations that present similar tax issues as the Bonds.

TAX MATTERS

In the opinion of Rutan & Tucker, LLP, Costa Mesa, California, Bond Counsel, based on existing statutes, regulations, rulings and court decisions and assuning, arnong other matters, compliance by the Water District with certain co.tenants, interest on the Bonds is not includable in the gross income of the cwners of the Bonds for purposes of federal income taxation. Failure to comply with such co.tenants and requirements may cause such interest to be included income retroactively to the date of issuance.

Interest on the Bonds will not be treated as an itern of tax preference in calculating the alternative rninirnurn taxable income of individuals or corporations; ho.vever, such interest on the Bonds rnay be included as an acjjustment in the calculation of the alternative rninirnurn taxable income of a corporation and rnay therefore affect such corporation's alternative rni ni rnurn tax and environmental tax Ii abi I ities.

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 greaterthan 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 nininis original issue discount and ori gi nal issue preni um is disregarded.

U nderthe Internal Revenue Code of 1986, as amended, (the "Tax Code"), original issue discount is treated as interest excluded from federal gross income and exempt frorn State of California personal i ncome taxes to the extent properly al I ocabl e to each o.vner thereof suqj ect to the Ii ni tati ons descri bed in the first paragraph of this section. The ori gi nal issue discount accrues cwerthe term to maturity of the B ond on the basis of a constant interest rate compounded on each i nterest or principal payment date (with straight-1 i ne interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the acjjusted basis of such Bonds to deternine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such Bond. The Tax Code contains certain prcwisions 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 Bands should consult their cwn tax ad.ti sors with respect to the tax consequences of cwnershi p of Bands

47

with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allo.vance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Bands under federal individual and corporate alternative ni ni mum taxes.

Underthe Tax Code, original issue premium is amortized on an annual basis ewer the term of the Bond (said term being the shorter of the Bonds maturity date or its call date). The amount of original issue preni um amortized each year reduces the aqj usted basis of the o.vner of the Bond for purposes of deternining taxable gain or loss upon disposition. The amount of original issue premium on a Bond is amortized each year ewer 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 compoundi ng dates). Amortized Bond preni um is not deductible for federal i ncorne tax purposes. owners of prenium Bonds, including purchasers who do not purchase in the original offering, should consulttheir o.vn tax ad.ti sors with respect to State of California personal i ncorne tax and federal income tax consequences of o.vni ng such B ands.

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

owners of the B ands should al so be aware that the o.vnershi p or di sposi ti on of, or the accrual or receipt of interest on, the Bands may have federal or State tax consequences other than as described alx:we. Bond Counsel expresses no opinion regarding any federal or State tax consequences arising with respect to the Bands other than as expressly described alx:we.

A cop,1 of the proposed form of opinion of Bond Counsel is attached hereto as Appendix B.

CONTINUING DISCLOSURE

The Water District has agreed in a Continuing Disclosure Agreement to pro.tide certain annual financial i nformati on ( the "Annual Reports") and notices of the occurrence of certai n enumerated events in accordance with Rule 15c2-12 of the Securities Exchange Act of 1934as amended (the" Rule") b,I not later than March 1 in each year commencing March 1, 2018. David Taussig & Associates, Inc. will act as dissenination agent (the "Dissenination Agent") under the Continuing Disclosure Agreement. The specific nature of the information to be contained in the annual report or the notices of listed events and certain other terms of the continuing di sci osure obi i gati on are found in the form of the Continuing DisclosureAgreementin"APPENDIX E-FORM OF CONTINUING DISCLOSURE AGREEMENT."

N ei the rt he Water District northe District have entered into any previous undertakings pursuantto the Rule.

It is expected that the Di ssemi nation A gent wi 11 prepare and fi I e the Annual Report and any notices of listed events as required b,I the Continuing Disclosure Agreement on behalf of the Water District and the District.

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LEGAL MATTERS

Absence of Litigation

At the tirre of delivery of and payrrent for the Bonds, the Water District will deliver a certificate to the effect that there is no kno.vn action, suit, proceeding, inquiry or investigation at law or in equity before or b,I any court or regulatory agency against the Water District or the District affecting the existence of the Water District or the District or the title of their respective officers to office or seeking to restrain or to enjoin the issuance, sale, or delivery of the Bonds, the application of the proceeds thereof in accordance with the Fiscal AgentAgreerrent, or the collection or application of the Special Taxes to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Resolution of Issuance, the Fiscal Agent Agreerrent or any action of the Water District or the District or contemplated b,I any of said docurrents.

Legal Matters Incident to the Issuance of the Bands

Certain legal matters incident to the authorization and issuance of the Bonds are suqject to the appr0.ting opinion of Rutan & Tucker, LLP, acting in its capacity as Bond Counsel. Certain legal matters related to the Bonds and the District will be passed upon b,I Arnold, LaRochelle, Mathe.vs, VanConas & Zirbel LLP, acting in its capacity as General Counsel to the Water District. Certain legal matters related to disclosure will be passed upon for the Water District b,I Quint & Thimnig LLP, acting in its capacity as Disclosure Counsel to the Water District. Jones Hall, A Professional Law Corporation, is acting as counsel for the Underwriter. Payrrent of Bond Counsel's, Disclosure Counsel's, and Underwriter Counsel's fees and expenses is conti ngent upon the sale and issuance of the Bands. The various I egal opi ni ons to be delivered concurrently with the delivery of the Bonds will be qualified as to enforceability of the various legal instrurrents b,l limitations imposed b,I bankruptcy, reorganization, insolvency or other sinilar laws affecting the rights of creditors generally and b,I equitable remedies and proceedings generally.

CONCLUDING INFORMATION

Ratings on the Bands

S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC ("S&P") has assigned a rating of "A" to the Bonds. S&P has also assigned to the Insured Bonds (being the Series B Bonds maturing on September 1 in the years 2024 through and including 2047) its municipal bond rating of "AA" with the understanding that the 2017 Insurance Policy insuring the payrrent when due of the principal of and interest on the Insured Bonds will be issued concurrently b,I BAM with the delivery of the Insured Bonds. Such ratings reflect only the vie.vs ofS& P, and any desired explanation of the significance of such rati ngs may be obtained from S& P GI olbal R ati ngs. General ly, a rati ng agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its o.vn.

There is no assurance such ratings will continue for any given period of tirre or that such ratings will not be revised dONnward or withdrawn entirely b,I the rating agency, if in thejudgrrent of such rating agency, circumstances so warrant. Any such dONnward revision or withdrawal of such ratings may have an ad.terse effect on the market price of the Bonds. Except as otherwise required in the Continuing Di sci osure A greerrent, the Water District undertakes no responsi bi I ity eitherto bring to the attention of the o.vners of any Bonds any dONnward revision or withdrawal of any ratings obtained or to oppose any such revision or withdrawal. A rating is not a recomrrendation to buy, sell or hold securities and may be suqject to revision or withdrawal at any ti rre.

49

Underwriting

The Bonds are being purchased b,I the Underwriter for a price of $43,922,985.95 being equal to the initial principal amount of the Bonds of $39,910,CXXl.OO, plus a net original issue prenium of $4,227,302.65 and less an Underwriter's discount of $214,316.70. The Bonds are being offered for sale to the public at the prices set forth on the inside ccwer page of this Official Statement, which prices may be changed b,I the Underwriter from time to time without notice. The Bonds may be offered and sold to dealers, including the Underwriter and dealers acquiring Bonds for their o.vn account or for an account managed b,I them, at prices lo.ver than the public offering price. The Underwriter will pay certain of its expenses relating to the offeri ng from the U nderwri ter' s discount.

The Underwriter has entered intoadistribution agreement(" Distri butionAgreement'') with Charles Schwab & Co., Inc. (" CS& Co.") for the retai I distribution of certain securities offerings at the original issue prices. Pursuanttothe Distribution Agreement, CS&Co. will purchase Bonds from the Underwriter atthe original issue price less a negotiated portion of the selling concession applicable to any Bonds that CS&Co. sells.

The Municipal Advisor

The material contained in this Official Statement was prepared b,I the Water District with the assistance of Harrell & Company Advisors, LLC, Orange, California (the "Municipal Ad.tisor"), an independent financial consulting firm, which ad.tised the Water District as to the financial structure and certain other financial matters rel ati ng to the Bands. The i nformati on set forth herein has been obtai ned b,I the Water District from sources which are belie.ted to be reliable, but such information is not guaranteed b,I the Municipal Ad.tisor as to accuracy or completeness, nor has it been independently verified b,I the Municipal Advisor. Fees paid to the Municipal Ad.tisor are contingent upon the sale and delivery of the Bonds.

Miscellaneous

Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not expressly stated, are i ntended as such and not as representati ans of fact. No representation is made that any of such statements made wi 11 be realized. N ei the rt his Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract or agreement between any of the Water District, the District or the Underwriter and the purchasers or the o.vners of the Bonds.

The execution and delivery of this Official Statement has been duly authorized b,I the Board of Directors.

CASITAS MUNICIPAL WATER DISTRICT, for and on behalf of CASITAS MUNICIPAL WATER DISTRICT COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI)

By: /s/ Steven E. W ickstrum General Man ager

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Definitions.

APPENDIX A SUMMARY OF THE

FISCAL AGENT AGREEMENT

"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311 et seq. of the California G avernment Code.

"Administrative Expenses'' means any or all of the follcwi ng: the fees and expenses of the Fiscal Agent (including any fees or expenses of its counsel), the expenses of the Di strict in carrying out its duties hereunder (including, rut not linited to, the levying and collection of the Special Taxes, and the foreclosure of the lien in respect of any delinquent Special Taxes) including the fees and expenses of its counsel, an allocable share of the salaries of Di strict staff related thereto and a proportionate amount of Di strict general adni ni strative averhead related thereto, any amounts paid by the Di strict from its general funds pursuant to Section 6.02, any amounts paid or payable to any persons or entities employed by the District in connection with the discharge of any of the District's obligations hereunder (including, but not I imited to, the calculation of the levy of the Special Taxes, foreclosures with respect to delinquenttaxes, and the calculation of amounts subject to rebate to the United States), and al I cther costs and expenses of the District orthe Fiscal Agent incurred in connection with the discharge of their respective duties hereunder or in connection with the Bonds and, in the case of the District, in anyway related to the administration of the Bonds or the CFO (including, but not linited to, administrative costs and expenses of the District. Adninistrative Expenses shall include any such expenses incurred in prior years but not yet paid.

"Administrative Expense Fund" means the fund by that name established by Section 3.06(A) hereof.

"Agreement" means this Fiscal Agent Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement adopted pursuant to the pravisions hereof.

"Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bands in such Bond Year, assuming that the Outstanding Bands are retired as scheduled (including by reason of the pravisions of Section 2.03(A)(ii) praviding for mandatory sinking payments), and (ii) the principal amount of the Outstanding Bonds due in such Bond Year (including any mandatory sinking payment due in such Bond Year pursuant to Section 2.03(A)(ii)).

"Auditor" means the auditor it:ontrd ler of the County, or such other official at the County who is responsible for preparing property tax bi 11 s.

"Authorized Officer" means the President, the General Manager, the Accounting Manager;rreasurer, the Clerk of the Board, or any other officer or employee authorized by the Board of Directors of the District or by an Authorized Officer to undertalke the action referenced in the Agreement as required to be undertalken by an Authorized Officer.

A-1

"BAM" means Build America Mutual Assurance Canpany, or any successor thereto or assignee thereof, as the issuer of the 20171 nsurance Pd icy and the 2017 Reserve Policy.

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

"Bond Fund' means the fund b,' that name established b,' Section 4.02(A) hereof.

"Bond Year" means the one-year period beginning on September 2 in each year and ending on Sep:ember 1st in the fol I cwi ng year, both dates inclusive, excep: that the first Bond Year shal I begin on the Closing Date and end on September 1, 2017.

"Bonds'' means, cdlectively, the 2017 Bonds, and, if the context requires, any Parity Bands, at any ti me Outstanding underthe Agreement or any Supplemental Agreement.

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

"CFO" means the Casitas Municipal Water District Community Facilities District No. 2013-1 (OJAI), formed pursuanttotheAct and the Resolution of Formation.

"Closing Date" means May 31, 2017, being the date upon which there isa physical delivery of the 2017 Bands in exchange for the amount representing the purchase price of the 2017 Bands b,' the Original Purchaser.

"Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the 2017 Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the 2017 Bonds, together with applicable temporary and final regulations promulgated, and app i cable official pull i c guidance published, under the Code.

"Continuing Disclosure Agreement" means the Continuing Disclosure Agreement, executed b,' the District and David Taussig & Associates, Inc. as the initial Disseni nation Agent thereunder, dated as of May 1, 2017, as originally executed and as it may be amended from ti me to ti me in accordance with its terms.

"Costs of Issuance" means items of expense payable or rei rnbursable directly or indirectly b,' the Di strict and related to the authorization, sale and issuance of the 2017 Bonds which items of expense shal I include, but not be Ii mited to, printing costs, costs of reproducing and b ndi ng documents, closing costs, filing and recording fees, initial fees and charges of the Fiscal Agent including its first annual adni ni strati on fee, fees and expenses of Fiscal Agent's counsel, expenses incurred b,' the District in connection with the issuance of the 2017 Bonds (including, but not limited to, adni ni strative costs and expenses of the District and the District Counsel), special tax consultant fees and expenses, I egal fees and charges, including bond counsel and di sci osure counsel, rnuni ci pal advisor fees, rating fees, bond insurance premi urns, reserve policy preni urns,

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charges for execution, transportation and saf ekeep ng of the 201 7 Bands and cther costs, charges and fees in connection with the foregdng.

"Cost of Issuance Fund" means the fund b,' that name established b,' Section 3.07(A) hereof.

"County" means Ventura County, California

"Credit Facility" means (i) the 2017 Reserve Pd icy or (ii) an irrevocable standb,' or direct­pay I etter of credit or surety bond issued b,' a cornmerci al bank or insurance company and deposited with the Fiscal Agent pursuant to Section 4.03, prCNided that all of the follavving requirements are met b,' the District at the time of delivery thereof to the Fiscal Agent: (a) the long-terrn credit rating of such bank or insurance company is "A" (without regard to modifier) or higher; (b) such letter of credit or surety bond has a terrn of at least twelve (12) months; (c) such I etter of credit or surety bond has a stated amount at I east equal to the portion of the Reserve Requirement with respect to which funds are proposed to be rel eased pursuantto Section 4.03; ( cl) the Fi seal A gent i s authori zed pursuantto the terrns of such I etter of credit or surety bond to drctN thereunder an amount equal to any defi ci enci es which rnay exist frorn ti me to ti me in the Bond Fund for the purpose of rnalking payments required pursuant to Section 4.02(B); and (e) prior written notice is given to BAM before the effective date of any such Credit Facility.

"OTC" means The Depository Trust Company, New York, New York, and its successors and assigns.

"Debt Service" means the scheduled amount of interest and arnorti zati on of principal payable on the Bands during the period of cornputati on, excluding amounts scheduled during such period which rel ate to principal which has been retired before the beginning of such period.

"Depository" means (i) initially, OTC, and (ii) any other Securities Depository acting as Depository pursuant to Section 2.13.

"Di strict" means the Casitas Municipal Water District.

"Fair Market Value" means the price at which a willing buyer would purchase the investment frorn a willing seller in a bona fide, arrn' s length transaction (deterni ned as of the date the contract to purchase or sel I the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the terrn "Fair Market Value" means the acquisition price in a bona fide arrn' s length transaction (as referenced abOJe) if (i) the investment is a certificate of depositthat is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negctiated withdrawal or reinvestment prCNisions and a specifically negctiated interest rate (for exarnpl e, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations underthe Code, or (iii) the investment is a United States Treasury Security-State and Local Gavernment Series that is acquired in accordance with applicable regulations of the United States Bureau of Public DelX.

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"Federal Securities'' means any of the fd lavving which are non-cal lalle and which atthe time of investment are legal investments under the laws of the State of California for funds held b,' the Fi seal Agent:

( i) di rect general oll i gati ons of the U ni ted Stat es of America ( i ncl udi ng obi i gati ons issued or held in book entry f orrn on the books of the United States Department of the Treasury) and obligations, the payment of principal of and interest on which are directly or indirectly guaranteed b,' the United States of America, including, without limitation, such of the foregd ng which are cornrnonly referred to as "stripped" obligations and coupons; or

(ii) any of the fdlavving obligations of the follcwing agencies of the United States of America: (a) direct olligations of the Export--l rnport Bank, (b) certificates of beneficial cwnership issued b,' the Farmers Home Administration, (c) participation certificates issued b,' the General ServicesAdrninistration, (cl) mortgage-backed bonds or pass-through obi i gati ons issued and guaranteed b,' the G OJernment Nati anal Mortgage Association, (e) project nctes issued b,' the United States Department of Housing and Urban Development, and (f) public housing notes and bonds guaranteed b,' the United Stat es of A meri ca.

"Fiscal Agent" means the Fiscal Agent appdnted b,' the District and acting as an independent fiscal agent with the duties and pavvers herein pr0.tided, its successors and assigns, and any other corporation or association which rnay at any time be substituted in its place, as pravided in Section 7.01.

"Fiscal Year" means the twelve-month period extending frornJ uly 1 in a calendar year to June 30 of the succeeding year, both dates inclusive.

"General Manager" means the General Manager of the District, or such cther person who performs the duties of the chief financial officer of the District.

"I rnpravement Fund" means the fund b,' that name established b,' Section 3.04(A) hereof.

"Independent Financial Consultant" means any consultant or firrn of such consultants appd nted b,' the Di strict, and who, or each of whorn: ( i) i s judged b,' the General M anager to have experience in matters relating to the issuance and pr administration of bonds underthe Act; (ii) is in fact independent and nct under the domination of the District; (iii) does nct have any substantial interest, direct or indirect, with or in the District, or any avvner of real property in the CFO, or any real property in the CFO; and (iv) is not connected with the District as an officer or employee of the Di strict, but who rnay be regularly retained to rnake reports to the District.

"I nforrnation Services'' means the Electronic Municipal Market Access System (referred to as "EMMA"), a facility of the Municipal Securities Rulernaking Board, (at http:/iernrna.rnsrb.org); and, in accordance with then current guidelines of the Securities and Exchange Cornrnission, such other addresses andpr such services praviding inforrnation with respect to called bonds as the District rnay designate in an Officer's Certificate delivered to the Fiscal Agent.

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"I nterest Payrrent Date" rreans March 1 and September 1 of each year, comrrenci ng September 1, 2017.

"Late Payrrent Rate'' rreans the lesser of (a) the greater of (i) the per annum rate of interest, p.,1blicly announced from tirre to tirre 0\/ JPMorgan Chase Bank, N.A., at its p-incipal office in The City of N evv Y ork, N evv Y ork, as its pri rre or base I endi ng rate (" Pri rre Rate") ( any change in such Pri rre Rate to be effective on the date such change is announced 0\/ JPMorgan Chase Bank, N.A.) plus 3%, and (ii) the then applicable highest rate of interest on the Insured Obligations and (b) the maximum rate permissible under appicable usury or similar laws limiting interest rates. In the eventJ PM organ Chase Bank, N.A., ceases to announce its Prirre Rate, the Pri rre Rate shall be the pri rre or base I ending rate of such cther bank, banking association or trust company as BAM, in its sole and absolute discretion, shall designate. Interest at the Late Payrrent Rate on any amount cwing to BAM shall be comp.,1ted on the basis of the actual number of days elapsed in a year of 360 days.

"Maximum Annual Debt Service" rreans the largest Annual Debt Service for any Bond Year afterthe calculation is made through the final scheduled maturity date for any Outstanding Bonds.

"Minimum Administrative Expense Requirerrent" rreans (a) for Fiscal Year 2017-2018, $50,000; and (b) for each Fiscal Year after Fi seal Year 2017-2018, an amount equal to 102% of the Mini mum Administrative Expense R equi rerrent in effect forthe i mrredi ately preceding Fi seal Year.

"Moody's I nvestorsService" rreans Moody's I nvestorsService, NevvYork, NevvYork, or its successors.

"Officer's Certificate" rreans a written certificate of the District signed 0\/ an Authorized Officer of the Di strict.

"Ordinance" rreans Ordinance No. 13--01, adop:ed 0\/ the Board of Di rectors on N avember 27, 2013, and any other ordinance of the District arnendi ng or supplerrenti ng said Ordinance, or ctherwise praviding for the levy of the Special Taxes.

"Original Purchaser" rreans the first p.,1rchaser of the 2017 Bonds from the District, being Piper Jaffray & Co.

"Outstanding", when used as of any particular ti rre with reference to Bands, rreans (suqj ect to the pravi sions of Section 8.04) all Bonds except: (i) Bonds theretofore canceled 0\/ the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) Bonds paid or deemed to have been paid within the rreaning of Section 9.03; and (iii) Bonds in lieu of or in substitution for which cther Bonds shall have been authorized, executed, issued and delivered 0\/ the District pursuantto the Agreerrent or any Supp errental Agreerrent.

"Owner" or " B ondcwner" rreans any person who i s the regi stered cwner of any Outstanding Bond.

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"Parity Bonds'' means lx:Jnds issued 0\/ the District for the CFO payable and secured on a parity with any then Outstanding Bands, pursuant to Section 2.14 hereof.

"Participating Underwriter" shall have the meaning ascribed thereto in the Continuing Di sci osure Agreement.

"Perrritted Investments'' means the follcwing, but only to the extent that the sarrE are acquired at Fair Market Value and are otherwise legal investments for funds of the District:

(a) Federal Securities.

(b) Registered state warrants or treasury notes or bonds of the State of Califomia(the "State"), including lx:Jnds payable solely out of the revenues fromarevenue­produci ng property cwned, control I ed, or operated 0\/ the State or 0\/ a department, lx:Jard, agency, or authority of the State, whi ch are rated i n one of the two hi ghest short -term or long-term rating categories 0\/ either Moody's Investors Service or S&P Global Ratings, and which have a rmximum term to maturity not to exceed three years.

( c) Ti me certi fi cat es of deposit or negcti able certi fi cat es of deposit i ssued 0\/ a state or nati anally chartered bank or trust company, or a state or federal savings and I oan association which rnay include the Fiscal Agent and its affiliates; pravided, that the certificates of deposit shal I be one or rnore of the follcwing: continuously and fully insured 0\/ the Federal Deposit Insurance Corporation, andpr continuously and fully secured 0\/ securities described in subdivision (a) or (b) of this definition of Permitted Investments which shal I have a market value, as determined on a marked-to-market basis calculated at least weekly, and exclusive of accrued interest, or not less than 102 percent of the principal amount of the certi fi cat es on deposit.

(cl) Commercial paper which atthe time of purchase is of" prime'' quality of the highest ranking or of the highest I etter and numerical rating as prOJi ded 0\/ either Moody' s Investors Service or S&P Global Ratings, which commercial paper is lirrited to issuing corporations that are organized and operating within the United States of America and that have tctal assets in excess of five hundred mill ion dollars ($500,000,000) and that have an "A" or higher rating for the issuer's debentures, other than commercial paper, 0\/ either Moody's Investors Service or S&P Global Ratings, pravided that purchases of eligille commercial paper may not exceed 100 days' maturity nor represent rnore than 1 0 percent of the outstanding commercial paper of an issuing corporation. Purchases of cornmerci al paper may not exceed 20 percent of the total amount invested pursuant to this definition of Permitted Investments.

( e) A repurchase agreement with a state or nati anal I y charted bank or trust company or a nati anal banking association or gavemment lx:Jnd deal er reporting to, trading with, and recognized as a primary dealer 0\/ the Federal Reserve Bank of New York, pravided that al I of the follcwi ng conditions are satisfied: (1) the agreement is secured 0\/ any one or rnore of the securities described in subdivision (a) of this definition of Permitted Investments, (2) the underlying securities are required 0\/ the repurchase agreementto be held 0\/ a bank, trust company, or primary dealer having acombned capital and surplus of

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at least me hundred mill ion dollars ($100,CXXl,CXXl) and which is independent of the issuer of the repurchase agreement, and (3) the underlying securities are rraintained at a market value, as determined on a marked-to-market basis calculated at least weekly, of not less than 103 percent of the amount so invested.

(f) An investment agreement or guaranteed investment cmtract with, or guaranteed b,t, a financial institution the I mg-term unsecured obligations of which are ratedAa2 and"AA" or better, respectively, b,t Moody's I nvestorsService and S& P Global Ratings at the time of initial investment. The investment agreement shall be suqject to a davvngrade pravision with at least the follavving requirements: (1) the agreement shall pravide that within five business days afterthe financial institution's I mg-term unsecured credit rating has been withdrawn, suspended, cther than because of general withdrawal or suspensim b,t Moody's Investors Service or S&P Global Ratings from the practice of rating that debt, or reduced belcw "AA-'-' b,t S&P Global Ratings or belcw "Aa3" b,t Moody's Investors Service (these events are called "rating dcwngrades'') the financial institution shal I give notice to the District and, within the five-day period, and for as I mg as the rating davvngrade is in effect, shall deliver in the name of the District orthe Fi seal Agent to the District or the Fiscal Agent Federal Securities allcwed as investments under subdivision (a) of this definition of Permitted Investments with aggregate current market value equal to at I east 105 percent of the principal amount of the investment agreement invested with the financial institution at that time, and shall deliver additional allcwed federal securities as needed to rIBi ntai n an aggregate current market value equal to at I east 105 percent of the principal amount of the investment agreement within three days after each evaluation date, which shal I be at least weekly, (2) the agreement shal I prCNide that, if the financial institutim's long-term unsecured credit rating is reduced belavv "A3" b,t Moody's Investors Service or belcw "A-'-' b,t S& P Global Ratings, the Fiscal Agent or the District may, upon nct more than five business days' written nctice to the financial institution, withdraw all funds invested underthe investment agreement, with accrued but unpaid interest therem to the date, and terni nate the agreement.

(g) The Local Agency Investment Fund of the State of California

(h) Investments in a money market fund rated in the highest rating category (without regard to pus(+) or ninusH designations) b,t Moody's I nvestorsServiceorS& P Global Ratings, including such funds for which the Fiscal Agent, its affiliates or subsidiaries pravide investment advisory or other management services or for which the Fiscal Agent or an affiliate of the Fiscal Agent serves as investment administrator, sharehdder servicing agent, and/or custodian or subcustodian, nctwithstanding that (i) the Fiscal Agent or an affiliate of the Fiscal Agent receives fees from funds for services rendered, (ii) the Fiscal Agent cdlects fees for services rendered pursuant to the Agreement, which fees are separate from the fees received from such funds, and (iii) services performed for such funds and pursuant to the Agreement may at times duplicate those pravi ded to such funds b,t the Fi seal A gent or an affi Ii ate of the Fi seal Agent.

(i) Any other lawful investment for District funds.

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"Principal Office" means the CIT[X)rate trust office of the Fiscal Agent as identified pursuant to Section 9.CXi hereof; pravided, hcwever, fIT the purpose of maintenance of the R egi strati on B oaks and surrender of Bands for payment, transfer or exchange such term means the office at which the Fiscal Agent conducts its corrxirate trust agency business, IT such cther or additional offices as may ~ designated b,' the F i seal A gent.

"Project" means the facilities eligible to ~ funded b,' the CFO, as specified in the R esol uti on of Formation.

"Rate and Method of Ap[XJrtionment" means the Rate and Method of Ap[XJrtionment of Special Tax for the CFO, apprCNed b,' proceedings conducted pursuant to the Resolution of Formation, and as it may ~altered IT amended from ti me to ti me in accordance with the prCNi si ons of the Act.

"Rating Categay" means one of the two highest rating categories then in effect under the rating systems of Moody's lnvestITs Service or S&P Global Ratings, without regard to plus IT ni nus sign or numerical IT cther qualifying designation.

"Rebate Fund" means the fund b,' that name established pursuant to Section 6.02 hereof.

"Record Date" means the fifteenth day of the month next preceding the month of the applicable Interest Payment Date, whether or not such fifteenth (15th) day is a Business Day.

"Refunding Bonds'' means bonds issued b,' the District for the CFO the net proceeds of which are used to refund all or a portion of the then Outstanding Bonds; prCNided that the delX service on the Refunding Bands in any Bond Year is not in excess of the debt service on the Bands ~ing refunded, and the final maturity of the Refunding Bands is not laterthan the final maturity of the Bands ~i ng refunded.

"Registration Books'' means the records maintained b,' the Fiscal Agent pursuant to Section 2.08 fIT the registration and transfer of cwnership of the Bonds.

"R egul ati ons'' means temporary and permanent regulations promulgated under the Code.

"Reserve Fund" means the fund b,' that name estal:lished pursuant to Section 4.03(A) hereof.

"Reserve Requirement" means, with respect to the 2017 Bonds, as of any date of calculation, the lesser of 75% of (i) lCP/4 of the par amount of the Series B Bonds; (ii) Maximum Annual Debt Service on the Series B Bands; or (iii) 125% of average Annual DelX Service on the Series B Bands, as determined b,' the Water District. "Reserve Requirement" means, with respect to any Parity Bands, the amount deterni ned at the ti me of issuance of the respective Parity Bands.

"Resolution" means Resolution No. 17--0S, adopted b,' the Board of Directors of the District on Apri I 26, 2017, authorizing the issuance of the 2017 Bonds.

"Resolution of Formation" means Resolution 13-12, adop:ed b,' the Board of Di rectors of the District on March 13, 2013.

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"S& P Global Ratings'' meansS& P Global Ratings, a Standard& Poor's Financial Services LLC business, NewY ITk, New York, or its successors.

"Securities Depositories'' means The Depositay Trust Company, 55 Water Street, lSL, New York, New York 10041-0)99Attention: Call Notification Department, Fax(212) 855-3274; and, in accordance with then current guidelines of the Securities and Exchange Cammi ssi on, such cther addresses andpr such other securities depositITies as the District may designate in an Officer's Certificate delivered to the Fi seal Agent.

"Special Tax Fund" means the fund lJy that name estal:l ished lJy Section 3.05(A) hereof.

"Special Tax Prepayments'' means the proceeds of any prepayments of Special Taxes received lJy the District, as calculated pursuantto the Rate and Method of Apportionment, I ess any administrative fees IT penal ti es col I ected as part of any such prepayment.

"Special Tax Prepayments Account" means the account lJy that name within the Bond Fund established lJy Section 4.02(A) hereof.

"Special Tax Revenues'' means the proceeds of the Special Taxes received lJy the District, including any scheduled payments and any prepayments thereof, interest and penal ti es thereon and proceeds of the redem[Xion IT sale of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien, but shall not include interest and penalties, if any, col I ected with the Special Taxes that are in excess of the rate of interest payable on the Bands.

"Special Taxes'' means the special taxes levied on property within the CFO pursuanttothe Act, the Ordinance and the Agreement.

"Supplemental Agreement" means an agreement the execution of which is authITi zed lJy a resolution which has been duly adopted lJy the District under the Act and which agreement is amendatory of or supplemental to the Agreement, but only if and to the extent that such agreement is specifically authorized hereunder.

"2017 Bonds'' means, cdlectively, the 2017 Series A Bonds and the 2017 Series B Bonds.

"2017 Insured Bands'' means the 2017 Seri es B Bands maturing September 1, 2024 through and including Se[Xember 1, 2047.

"2017 Insurance Policy" means the municipal bond insurance policy delivered lJy BAM guaranteeing the principal of and interest on the 20171 nsured Bands when due.

"2017 Reserve Policy" means the municipal bond debt service reserve insurance pdicy issued lJy BAM, as Policy Number 2017B0287 in the stated amount of $2,624,671.88, deposited into the Reserve Fund relating to the 2017 Bonds.

"2017 Series A Bonds'' means the Casitas Municipal Water District Community Facilities District No. 2013-1 (OJAI) 2017 Special Tax Bonds, Series A, at any time Outstanding underthe Agreement.

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"2017 Series B Bonds'' rreans the Casitas Municipal Water Di strict Comnunity Facilities District No. 2013-1 (OJAI) 2017 Special Tax Bonds, Series B at any tirre Outstanding underthe A greerrent.

THE BONDS

I nterest on the 201 7 Bands shal I be payable on each I nterest Payrrent Date to the person whose narre appears in the Registration Books as the Owner thereof as of the Record Date i mrredi ately preceding each such I nterest Payrrent Date, such interest to be paid by check of the Fiscal Agent mailed by first class mail, postage prepaid, on each Interest Payrrent Date to the Owner at the address of such Owner as it appears in the R egi strati on B oaks as of the preceding Record Date. Principal of and premium (if any) on any 2017 Bond shall be paid by check upon presentation and surrender thereof, at maturity or the prior redem[Xion thereof, at the Principal Office of the Fiscal Agent. The principal of and interest and premium (if any) on the 2017 Bonds shall be payal:fo in lawful money of the United States of Arrerica

Each 2017 Bond shal I bear interest from the Interest Payrrent Date next preceding the date of authentication thereof, unless (a) it is authenticated after a Record Date and on or before the follcwing Interest Payrrent Date, in which event it shall bear interest from such Interest Payrrent Date; or (b) it is authenticated on or before August 15, 2017, in which event it shall bear interest from the Closing Date; pravided, havvever, that if, as of the date of authentication of any 2017 Bond, interest thereon is in default, such 2017 Bond shall bear interest from the Interest Payrrent Date to which interest has previously been paid or made avai I able for payrrent thereon.

Nctice to Fiscal Agent. The District shall give the Fiscal Agent written notice of its intention to redeem 2017 Series B Bonds pursuantto subsection (A)(i) or (iii) al:x:Ne nct less than forty-five (45) days prior to the app icable redem[Xion date, or such lesser number of days as the Fiscal Agent shall allOvV in the sole discretion of the Fiscal Agent. No nctice need be given by the District to the Fi seal Agent of a redemption of 2017 Series B Bonds pursuantto subsection (A)(ii) and (iii) al:x:Ne.

Priority of R ederrpti on. Whenever pravi si on is made in the Agreerrent for the redemption of less than all of the 2017Series B Bands (ctherthan a redemption pursuantto Section 2.03(A)(ii) and (iii)), the Fiscal Agent shall select the 2017 Series B Bonds to be redeerred, from all 2017 Seri es B Bands not previously cal I ed for redemption as directed in writing by the General Manager, and within a maturity by lct in any manner which the Fiscal Agent in its sole discretion shall deem appropriate and fair. For purposes of such selection, al I 2017 Series B Bands shal I be deerred to be comprised of separate $5,000 portions and such portions shall be treated as separate Bonds which may be separately redeerred.

Purchase of Bonds in lieu of Redemption. In lieu of redem[Xion under Section 2.03(A) al:x:Ne, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding 2017 Series B Bonds, upon the filing with the Fi seal Agent of an Officer's Certificate requesting such purchase prior to the selection of 2017 Series B Bonds for redemption, at public or private sale as and when, and at such prices (including brokerage and cther charges) as such Officer's Certificate may pravide, but in no event may 2017 Series B Bonds be purchased at a price in excess of the principal amount thereof, pl us interest accrued to the date of purchase.

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Redemp:ion Procedure l:Jy Fiscal Agent. The Fiscal Agent shall cause notice of any redemp:i on to be sent 0\/ first cl ass mai I, postage prepaid, or sent 0\/ such cther means as is accep:alletothe recipient thereof, at least thirty (30) days rut not more than sixty (60) days prior to the date fixed for redemption, to the Securities Depositories and to the I nforrrati on Services ( or 0\/ such other means as perrri tted 0\/ such services), and to the respective Owners of any 201 7 Seri es B Bands designated for redemption, at their addresses appearing in the R egi strati on B oaks; rut such sending of the ncti ce of redemption shal I not be a condition precedent to such redemption and failure to mail orto receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such 201 7 Seri es B Bands.

Such ncti ce shal I state the redempti on date and the redempti on price and, if I ess than al I of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the 2017 Series B Bonds to be redeemed 0\/ giving the individual CUSI P number and Bond number of each 2017 Seri es B Bond to be redeemed or shal I state that al I 2017 Seri es B Bands between two stated Bond numbers, both inclusive, are to be redeemed or that al I of the 2017 Series B Bands of one or more rraturities have been cal led for redemption, shall state as to any 2017 Series B Bond cal led in part the principal annount thereof to be redeemed, and shall require that such 2017 Series B Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption atthe said redemption price, and shall state that further interest on such 2017 Seri es B Bands wi 11 nct accrue from and after the redemption date.

Upon the payment of the redemption price of 2017 Series B Bonds being redeemed, each check or other transfer of funds issued for such purpose shal I, to the extent practicable, bear the CUSI P number identifying, 0\/ issue and rraturity, the 2017 Series B Bonds being redeemed with the proceeds of such check or other transfer.

Upon surrender of 2017 Series B Bonds redeemed in part only, the District shall execute and the Fi seal Agent shal I authenticate and deliver to the Owner, atthe expense of the District, a new 2017 Bond or 2017 Series B Bonds, of the sanne maturity, of authorized denominations in aggregate principal annount equal to the unredeemed portion of the 2017 Bond or 2017 Series B Bonds.

Right of Rescission. In the case of any redemption of the 2017 Series B Bonds under Section 2.03A(i) or 2.03A(iv) aixNe, the notice of redemption may state that the redemp:ion is conditioned upon receip: 0\/ the Fiscal Agent of sufficient moneys to redeem the 2017 Series B Bands on the anticipated redemption date, and thatthe redemption shal I nct occur if 0\/ no I ater than the scheduled redemption date sufficient moneys to redeem the 2017 Series B Bonds have not been deposited with the Fiscal Agent. In the event that the Fiscal Agent does not receive sufficient funds 0\/ the scheduled redemp:i on date to so redeem the 201 7 Seri es B Bands to be redeemed, the Fiscal Agent shal I send written nctice to the cwners of the 2017 Series B Bonds, to the Securities Depositories and to the Information Services to the effect that the redemption did not occur as anticipated, and the 2017 Series B Bonds for which notice of redemption was given shal I remain Outstanding for al I purposes of the Agreement.

Effect of R ederrpti on. From and after the date fixed for redemption, if funds avai I all e for the payment of the principal of, and interest and any premium on, the 2017 Seri es B Bands so cal I ed for redemption shal I have been deposited in the 201 7 Bond Fund, such Bands so cal I ed shal I

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cease to be entitled to any benefit underthe Agreerrent ctherthan the ri ghtto receive payrrent of the redem[Xi on price, and no i nterest shal I accrue thereon on or after the redemption date specified i n such notice.

All Bonds redeerred and purchased b,' the Fiscal Agent pursuant to this Section shall be cancel ed b,' the F i seal A gent. The Fi seal A gent shal I destr0y the canceled B ands and, upon written request of the Di strict, i ssue a certificate of destruction thereof to the Di strict.

Redemp:ion of Parity Bonds. Redem[Xion pravisions, if any, pertaining to any Parity Bonds shall be set forth in the Supplerrental Agreerrent pr0.tiding for such Parity Bonds.

Form of 2017 Bands.

The 201 7 Seri es A B ands, the form of F i seal A gent' s certi fi care of authentication and the form of assignrrent, to appear thereon, and the 2017 Series B Bonds, the form of Fiscal Agent's certificate of authentication and the form of assi gnrrent, to appear thereon, shal I be substantially in the forms, respectively, set forth in the Agreerrent and b,' this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as pernitted or required b,' the Agreerrent, the R esol uti on and the Act.

Execution of Bonds.

The Bands shal I be executed on behalf of the District b,' the facsi ni I e signatures of the President of the District and Clerk of the Board of the District. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bands to the Owner, such signature shal I nevertheless be as effective as if the officer had remained in office unti I the delivery of the Bonds to the Owner. Any Bond may be signed and attested on behalf of the District b,' such persons as at the actual date of the execution of such B ond shal I be the proper officers of the District although atthe nominal date of such Bond any such person shal I not have been such officer of the Di stri ct.

Only such Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in theAgreerrent, respectively, executed manually and dated b,' the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of the Agreerrent, and such certificate of authentication of the Fiscal Agent shall be conclusive evidence that the Bonds registered hereunder have been duly authenticated, registered and delivered hereunder and are enti tied to the benefits of the A greerrent.

Transfer of Bonds.

Any Bond may, in accordance with its terms, be transferred, upon the Registration Books b,' the person in whose name it is registered, in person orb,' his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied b,' delivery of a duly written instrurrent of transfer in a formappraved b,' the Fi seal Agent. The cost for any services rendered or any expenses incurred b,' the Fiscal Agent in connection with any such transfer shall be paid b,' the District from any lawfully available funds of the CFO, including but not linited to amounts in the Administrative Expense Fund. The Fiscal Agent shall collect from the Owner requesting such transfer any tax or other gOJernrrental charge required to be paid with respect to such transfer.

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Whenever any Bond or Bands shal I be surrendered for transfer, the District shal I execute and the Fi seal Agent shal I authenticate and deliver a new Bond or Bands, for Ii ke aggregate p-i nci pal amount.

No transfers of Bonds shall be required to be made (i) fifteen days prior to the date establ i shed b,' the Fi seal A gent for sel ecti on of B ands for redernpti on or ( i i) with respect to a B ond after such Bond has been selected for redemption.

Exchange of Bonds.

Bonds may be exchanged at the Principal Office of the Fiscal Agent for a like aggregate p-incipal amount of Bonds of authorized denoninations of the same series and of the same maturity. The cost for any services rendered or any expenses incurred b,' the Fiscal Agent in connection with any such exchange shall be paid b,' the District from any lawfully available funds of the CFO, including but not Ii nited to amounts in the Adni ni strative Expense Fund. The Fi seal Agent shal I col I ect from the Owner requesting such exchange any tax or cther gavernmental charge required to be paid with respect to such exchange.

No exchanges of Bonds shall be required to be made (i) fifteen days prior to the date establ i shed b,' the Fi seal A gent for sel ecti on of B ands for redernpti on or ( i i) with respect to a B ond after such Bond has been selected for redemption.

Registration Books.

The Fi seal Agent wi 11 keep or cause to be kep:, at its Principal Office sufficient books for the registration and transfer of the Bands which books shal I shew the series number, date, amount, rate of i nterest and I ast kncwn Owner of each B ond and shal I at al I ti mes be open to i nspecti on b,' the Di strict during regular business hours upon reasonable notice; and, upon p-esentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may p-escribe, register or transfer or cause to be registered or transferred, on said books, the cwnershi p of the Bands as herei nbefore pravi ded.

The District and the Fiscal Agent will treat the Owner of any Bond whose name appears in the Registration Books as the absolute Owner of such Bond for any and all purposes, and the District and the Fiscal Agent shall not be affected b,' any nctice to the contrary. The District and the Fi seal Agent may rely on the address of the Bondcwner as it appears in the Registration B oaks for any and al I purposes.

Temporary Bonds.

The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bands may be printed, I ithographed or typewritten, shal I be of such authorized denominations as may be determined b,' the District, and may contain such reference to any of the pravi si ons of the Agreement as may be appropriate. Every temporary Bond shall be executed b,' the District upon the same conditions and in substantially the same manner as the definitive Bonds. If the Di strict issues temporary Bonds it will execute and furnish definitive Bands without delay and thereupon the temporary Bands shal I be surrendered, for cancel I ati on, in exchange for the definitive Bonds at the Principal Office of the Fiscal Agent or at such other

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locatim as the Fiscal Agent shall designate, and the Fiscal Agent shall authenticate and deliver in exchange fIT such temporary Bonds an equal aggregate principal amount of definitive Bmds of authorized denorrinatims. Until so exchanged, the temporary bonds shall be entitled to the same benefits under the Agreement as definitive Bands authenticated and delivered hereunder.

Bmds Mutilated, Lost, Destroyed IT Stolen.

If any Bond shall become mutilated, the District, atthe expense of the Owner of said Bond, shall execute, and the Fiscal Agent shall authenticate and deliver, a mw Bond of like tenor and principal amount in exchange and substitutim forthe Bmd so mutilated, but only upon surrender to the Fi seal A gent of the Bond so muti I ated. Every muti I ated Bond so surrendered to the Fi seal A gent shal I be cancel ed 0\/ it and destroyed 0\/ the Fi seal A gent.

If any Bond shal I be I ost, destroyed IT stolen, evidence of such I oss, destruction or theft may be subrritted to the Fi seal Agent and, if such evidence be satisfactory to it and indemnity for the Di strict and the Fiscal Agent satisfactory to the Fiscal Agent shall be given, the Di strict, atthe expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and deliver, a mw Bmdof like tenor and principal amount in lieu of and in substitutim forthe Bmd so lost, destroyed IT stolen. The District may require payment of a sum not exceeding the actual cost of preparing each new B md delivered under this Section and of the expenses which may be incurred 0\/ the District and the Fiscal Agent for the preparation, execution, authenticatim and delivery. Any B md delivered under the prCNi si ms of this Section in Ii eu of any B md al I eged to be I ost, destroyed IT std en shal I constitute an ori gi nal addi ti anal cmtractual oll i gati on on the part of the Di stri ct whether or not the Bond so alleged to be lost, destroyed IT stolen is at any time enfITceable 0\/ anyme, and shall be equally and proportionately entitled to the benefits of the Agreement with all cther B mds issued pursuant to the Agreement.

Limited Obligation.

All obligations of the District under the Agreement and the Bonds shall be lirrited obligations of the District for the CFO, payalle sdely from the Special Tax Revenues and the funds pledged therefore hereunder. The faith and credit of the District orthe State of California IT any pditical subdivision thereof is nct pledged to the payment of the Bmds.

No Acceleration. The principal of the Bmds shall not be suqject to acceleration hereunder. Nothing in this Section shall in any w~ prohibit the prepayment or redemp:ion of Bmds under Section 2.03 hereof, or the defeasance of the Bonds and discharge of the Agreement under Sectim 9.03 hereof.

Book-Entry Only System.

OTC shall act as the initial Depository for the 2017 Bmds. One 2017 Bond for each maturity of the 2017 Bonds shall be initially executed, authenticated, and delivered as set forth herein with a separate fully registered certificate (in print or typewritten forrrj). Upon initial executim, authenticatim, and delivery, the avvnershipof the 2017 Bonds shall be registered in the Registration Books in the name of Cede& Co., as norrinee of OTC or such norrinee as OTC shall appoi nt i n wri ti ng.

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The representatives of the District and the Fi seal Agent are hereby authorized to take any and all actions as may be necessary and nct inconsistent with the Agreement to qualify the 2017 Bonds for the Depository's oook--entry system, including the execution of the Depository's required representation letter.

With respect to Bonds registered in the Registration Books in the name of Cede & Co., as nominee of OTC, neither the District nor the Fiscal Agent shall have any responsibility or obligation to any broker-dealer, bank, or cther financial institution for which OTC hdds Bonds as Depository from time to time (the "OTC Participants'') or to any person for which a OTC Participant acquires an interest in the Bonds (the "Beneficial Owners''). Without limiting the immediately preceding sentence, neither the District nor the Fiscal Agent shall have any responsiblity or olligation with respect to (i) the accuracy of the records of OTC, Cede & Co., or any OTC Participant with respect to any avvnership interest in the Bonds, (ii) the delivery to any OTC Participant, any Beneficial Owner, or any other person, other than OTC, of any notice with respect to the Bands, including any nctice of redemp:ion, (iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed in the event the District elects to redeem the Bands in part, (iv) the payment to any OTC Participant, any Beneficial Owner, or any other person, cther than OTC, of any amount with respect to the principal of or interest on the Bands, or (v) any consent given or cther action taken by the Depository as Owner of the Bands; excep: that so long as any Bond is registered in the name of Cede & Co., as nominee of OTC, any Beneficial Owner of $1,000,000 or more in aggregate principal amount of any series of Bands who has fi I ed a written request to receive nctices, containing such Beneficial Owner's name and address, with the Fi seal Agent shall be pravided with all notices relating to such Bonds by the Fiscal Agent.

Except as set forth above, the Fiscal Agent may treat as and deem OTC to be the absdute Owner of each Bond for which OTC is acting as Depository for the purpose of payment of the principal of and interest on such Bands, for the purpose of giving notices of redemp:i on and cther matters with respect to such Bands, for the purpose of registering transfers with respect to such Bands, and for al I purposes whatsoever. The Fi seal Agent shal I pay al I principal of and interest on the Bands only to or upon the order of the Owners as shavvn on the R egi strati on B oaks, and al I such payments shal I be valid and effective to fully satisfy and discharge al I obi i gati ons with respect to the principal of and interest on the Bands to the extent of the amounts so paid.

No person cther than an Owner, as shavvn on the R egi strati on B oaks, shal I receive a physical Bond. Upon delivery by OTC to the Fiscal Agent of written notice to the effect that OTC has determined to substitute a new nominee in place of Cede & Co., and subject to the transfer pravisions in Section 2.06 hereof, references to "Cede & Co." in this Section 2.13 shall refer to such new nominee of OTC.

OTC may determine to discontinue praviding its services with respect to the 2017 Bonds at any ti me by givi ng written ncti ce to the F i seal A gent duri ng any ti me that the 201 7 B ands are Outstanding, and discharging its responsibilities with respect thereto under appicalle law. The District may terminate the services of OTC with respect to the 2017 Bonds if it deterrri nes that OTC is unable to discharge its responsibilities with respect to the 2017 Bonds orthat continuation of the system of oook--entry transfers through OTC is not in the best interest of the Beneficial Owners, and the Di stri ct shal I mai I noti ce of such termi nation to the F i seal A gent.

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U rxin the terminatim of the services of OTC as p-avided in the previous paragraph, and if no substitute Derxisitay willing to undertake the functions hereunder can be found which is wi 11 i ng and able to undertake such functions urxin reasonable or custorrary terms, or if the District determines that it is in the best interest of the Beneficial Owners of the 2017 B mds that they be able to obtai n certi fi cated B ands, the 201 7 B ands shal I no I anger be restri cted to bei ng regi stered in the Registratim Books in the nanne of Cede & Co., as nominee of OTC, rut may be registered in whatever nanne or nannes the Owners shall designate at that time, in accordance with Section 2.06.

To the extent that the B enefi ci al Owners are designated as the transferee b,' the Owners, in accordance with Secti m 2.06 the 2017 B mds wi 11 be delivered to such B enefi ci al Owners as som as p-acti cable.

Issuance of Parity Bmds.

The 2017SeriesA Bmdsandthe 2017SeriesB Bonds are issued m parity with each other. The District may issue one or more series of additional Parity Bmds, in addition to the 2017Bonds authorized under Section 2.01 hereof, b,' means of a Suppemental Agreement and without the consent of any B mdcwners, upon compliance with the pravi si ons of this Section 2. 14. Such Parity Bmds shall constitute Bmds hereunder and shall be secured b,' alien on the Special Tax Revenues and funds pledged for the payment of the Bmds hereunder on a parity with all other Bonds Outstanding hereunder. The District may issue the Parity Bonds subject to the fdlavving specific conditions p-ecedent:

Current Compliance. The District shall be in compiance on the date of issuance of the Parity Bmdswith al I cavenants set forth in the Agreement and all Supplemental Agreements, and, exce[X with respect to Parity B mds that are Refunding Bonds, the p-i ncipal annount of the Parity Bmds shall nct cause the District to exceed the maximum authorized indebtedness of the CFO underthe prcwi si ons of the Act.

Payment Dates. The Supplemental Agreement praviding for the issuance of such Parity Bmds shall pravide that interest thereon shall be payable on March 1 and September 1, and p-incipal thereof shall be payable m September 1 in any year in which p-incipal is payable (p-avided thatthere shal I be no requi rementthat any Parity Bands pay interest on a current basis).

Funds and Accounts; Reserve Fund. The Supplemental Agreement praviding for the issuance of such Parity B mds may prcwi de for the establishment of separate funds and accounts, including a separate reserve fund to be funded in an annunt determined b,' the District at the ti me of issuance of the respective Parity Bonds, which reserve fund shall secure the repayment of the Parity B mds.

Maximum Special Taxes. The District shall certify thatthe Maximum Special Taxes to be levied in every year, less the MinimumAdministrative Expense Requirement for such year, are at I east equal to 11 CP/4 of the debt service payable on the Outstanding annount of the Bands and the Parity B mds to be issued in every such year.

Officer's Certificate. The District shall deliverto the Fiscal Agent an Officer's Certificate certi fyi ng that the conditions p-ecedentto the i ssuance of such Parity B ands set forth i n subsections

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(A), (B), (C) and (D) of Sectim 2.14 have ~en satisfied. In delivering such Officer's Certificate, the Authorized Officerthat executes the same may cmclusively rely upon such certificates of the Fiscal Agent and others selected with due care, without the need for independent inquiry or certification.

Ncthing in Sectim 2.14 shall prohibt the District from issuing balds for the CFO or ctherwise incurring delX for the CFO secured b,' a pedge of Special Tax Revenues subordinate to the pedge thereof under Section 4.01 of the Agreement.

ISSUANCE OF 2017BONDS

Issuance and Delivery of 2017 Bonds.

At any time afterthe execution of the Agreement, the District may issue the 2017 Bmds for the CF D in the aggregate principal annount set forth in Secti m 2.01 and deliver the 2017 Bands to the Original Purchaser. The Authorized Officers of the District are hereb,' authorized and directed to deliver any and al I documents and instruments necessary to cause the issuance of the 201 7 B mds in accordance with the pravi si ons of the Act, the R esol uti m and the Agreement, to authorize the payment of Costs of Issuance from the proceeds of the 2017 B mds and to do and cause to~ dme any and al I acts and things necessary or convenient for delivery of the 201 7 Bands to the Original Purchaser.

I mprcwement Fund.

(A) Establishment of I mprcwement Fund. There is hereb,' established as a separate fund to ~ held b,' the Fiscal Agent, the Community Facilities District No. 2013-1 (OJAI) lmpravement Fund. Deposits shall ~ made to the lmprcwement Fund pursuant to Section 3.02 and 3.03. Moneys in the I mpravement Fund shall ~ held b,' the Fiscal Agent for the ~nefit of the District, and shall ~ disb.Jrsed, except as ctherwise pravided in subsection (D) of this Sectim, for the payment or reimbursement of costs of the Project including acquisition legal costs and costs required to~ paid to acquire the Project.

(B) Procedure for Di sb.Jrsements. Di sb.Jrsements from the I mprcwement Fund shal I ~ made b,' the Fiscal Agent upon receipt of an Officer's Certificate which shall:

(i) set forth the annount required to~ disbursed, the purpose for which the disbursement is to ~ made and the person to which the di sb.Jrsement is to ~ paid; and

(ii) certify that the disbursement is for announts avving b,' the District or ctherwise for a purpose eligible to~ funded with the annount to~ so disb.Jrsed, and in any event that no porti m of the amount then ~i ng requested to ~ disbursed was set forth in any Officer's Certificate previously fi I ed requesting di sb.Jrsement.

In making disbursements from the I mprcwement Fund, the Fiscal Agent shall first use any announts deposited therein pursuant to Sections 3.02 and 3.03 and any investment earnings thereon, ~fore using announts deposited to the I mprcwement Fund pursuant to Section 3.0S(A)(iii)(a) and any investment earnings thereon.

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(C) Investment. Mmeys in the lmp-avement Fund shall be invested and derx:isited in accordance with Section 6. 01 . I nterest earnings and profits from the investment of amounts in the I rnpravement Fund shal I be retained in the I mprcwement Fund and be used for the purrxises thereof.

(D) Closing of Fund. U pm the filing of an Officer's Certificate statingthatthe portions of the Project to be financed and any cther expenses to be paid from the I mprcwement Fund have been competed and paid, respectively, the Fiscal Agent shall transfer the amount, if any, remaining in the I mprcwement Fund to the Bond Fund for app i cation to the payment of principal of and interest m the Bmds in accordance with Sectim 4.02, and the I mpravement Fund shall be closed.

Special Tax Fund.

(A) Establishment of Special Tax Fund. There is herel:Jy established as a separate fund to be held lJy the General Manager, the Community Facilities District No. 2013-1 (OJAI) Special Tax Fund, to the credit of which the District shall derx:isit, as soon as p-acticable follcwi ng receipt, all Special Tax Revenues received b,' the District and any amounts required b,' Section 3.06(B) hereof to be deposited therein.

N ctwithstandi ng the foregd ng,

(i) the first Special Tax Revenues collected lJy the District in any Fiscal Year, in an amount equal to the portion of such Fiscal Year's Special Tax levy for Administrative Expenses (but nct to exceed, in any Fiscal Year, the Minimum Administrative Expense Requirement), shall be derx:isited b,' the General Manager in the Adrrinistrative Expense Fund;

(ii) any Special Tax Revenues constituting the cdlection of delinquencies in payment of Special Taxes shal I be separately identified lJy the General Manager and shal I be disrx:ised of lJy the General Manager first, fortransferto the Fiscal Agent for derx:isit lJy the Fi seal Agent in the Bond Fund to pay any past due delX service on the B mds; secmd for transferto the Fi seal Agent for deposit lJy the Fiscal Agent in the Reserve Fund to the extent needed to increase the amount then on deposit in the Reserve Fund up to the then Reserve Requirement; and third, to be held in the Special Tax Fund for use as described in Section 3.04(B) abave; and

(iii) any proceeds of Special Tax Prepayments shall be separately identified lJy the G eneral M anager and shal I be remitted lJy the General M an ager to the F i seal A gent and deposited lJy the Fi seal A gent as fol I avvs ( as di rected i n wri ti ng lJy the General M an ager) : (a) that portim of any Special Tax Prepayment constituting the Future Facilities Costs (as defined in Section Hof the Rate and Method of Apportimment) shall be derx:isited b,' the Fiscal Agent to the lmp-avement Fund so long as the lmprcwement Fund has nct theretofore been closed pursuant to Section 3.04(D), and if the I mpravement Fund has been closed, then such amount shal I be retained b,' the Di strict to be used to pay Project costs; and (b) any remaining portion of any Special Tax Prepayment shall be deposited lJy the Fiscal Agent in the Special Tax Prepayments Account established pursuant to Section 4.02(A).

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Moneys in the S~cial Tax Fund shall be held b,' the General Manager for the benefit of the District and the Owners of the Bonds, shall be disbursed as pravided belavv and, ~nding disbursement, shal I be suqject to a Ii en in favor of the Owners of the Bands.

( B) Di sbursements. F rom ti me to ti me as needed to pay the oll i gati ons of the CF D, but no laterthan the third Business Day before each Interest Payment Date, the General Manager shall withdrctvV from the S~cial Tax Fund and transfer the fdlavving amounts in the follcwing order of priority (i) to the Fiscal Agent for deposit b,' the Fiscal Agent in the Bond Fund an amount, taking into account any amounts then on deposit in the Bond Fund and any ex~cted transfers from the Special Tax Fund and the Reserve Fund to the Bond Fund pursuantto Sections 4.03(C), (E) and (F), such thatthe amount in the Bond Fund equals the principal, prerri um, if any, and interest due on the Bands on the next Interest Payment Date (including the redemption price of any Bands to be redeemed on such Interest Payment Date pursuanttoSection 2.03(A)(i), (ii) or (iii)), and (ii) pro rata to the Reserve Fund an amount, taking into account amounts then on deposit in the Reserve Fund, such that the amount in the Reserve Fund is equal to the Reserve Requirement, and to any reserve fund estall i shed for Parity Bands an amount, taking into account amounts then on deposit in any such reserve fund, such that the amount in such reserve fund is equal to any reserve requirement for such Parity Bonds; pravided that no such transfers shall exceed the amount then available to be transferred from the S~cial Tax Fund.

I n addition to the foregoi ng, i f i n any F i seal Y ear there are sufficient funds i n the S ~ci al Tax Fund to make the foregoing transfers to the Bond Fund and the Reserve Fund in res~ct of the Interest Payment Dates occurring in the Bond Year that commences in such Fi seal Year, the General Manager may transferto the Adrri ni strative Ex~nse Fund, from ti me to ti me, any amount in the S~cial Tax Fund in excess of the amount needed to make such transfers to the Bond Fund and the Reserve Fund, if monies are needed to pay Adrrinistrative Ex~nses in excess of the amountthen on deposit in the Administrative Ex~nse Fund.

(C) Investment. Moneys in the S~cial Tax Fund shall be invested in accordance with Section 6.01. Interest earnings and profits resulting from investment of amounts in the Special Tax Fund shall be retained in the S~cial Tax Fund to be used forthe purposes thereof.

Administrative Expense Fund.

(A) Establishment of Administrative Expense Fund. There is hereb,' established as a separate fund to be held b,' the General Manager, the Community Facilities District No. 2013-1 (OJAI) Administrative Ex~nse Fund, to the credit of which deposits shall be made as required b,' Section 3.0S(A)(i), the second paragraph of Section 3.0S(B) and Section 3.07(B). Moneys in the Administrative Ex~nse Fund shall be held b,' the General Manager for the benefit of the Di strict, and shal I be disbursed as pravi ded bel cw.

(B) Disbursement. Amounts in the Administrative Ex~nse Fund shall be withdrawn b,' the General M an ager and paid to the Di strict or its order upon recei fl: b,' the General M anager of an Officer's Certificate stating the amount to be withdrawn, that such amount is to be used to pay an Administrative Ex~nse, and the nature of such Administrative Ex~nse. Amounts transferred to the Adrrinistrative Ex~nse Fund pursuant to Section 3.07(B) shall be used for purposes of such fund prior to using other avai I able amounts therein.

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Annually, on the last day of each Fiscal Year, the General Manager shall withdraw any announts then remaining in the Administrative Expense Fund in excess of $10,000 that have nct been allocated to pay Administrative Expenses incurred but not yet paid, and which are nct ctherwi se encumbered, and transfer such amounts to the Special Tax Fund.

(C) Investment. Moneys in the Adrrinistrative Expense Fund shall be invested in accordance with Section 6.01. Interest earnings and p-ofits resulting from said investment shall be retained O,' the General Manager in the Adrrinistrative Expense Fund to be used for the purposes of such fund.

Costs of Issuance Fund.

(A) Establishment of Costs of Issuance Fund. There is hereb,' estall i shed as a separate fund to be held O,' the Fiscal Agent, the Community Facilities District No. 2013-1 (OJAI) Costs of Issuance Fund, to the credit of which a deposit shall be made as required b,' Section 3.02(A) and 3.03(A). Moneys in the Costs of Issuance Fund shal I be held O,' the Fiscal Agent and shall be disbursed as p-avided in subsection (B) of this Section.

( B) Disbursement. A mounts in the Costs of I ssuance Fund shal I be disbursed from ti me to ti me to pay Costs of Issuance, as set forth in a requisition containing respective announts to be paid to the designated payees, signed O,' an Authorized Officer and delivered to the Fiscal Agent concurrently with the delivery of the 2017 Bands. The Fi seal Agent shal I pay al I Costs of Issuance upon receipt of an i nvd ce from any such payee which requests payment in an annount which is less than or equal to the annount set forth with respect to such payee in such requisition, or upon receipt of an Officer's Certificate requesting payment of a Cost of Issuance nct I isted on the initial requisition delivered to the Fi seal Agent on the Closing Date. Each such Officer's Certificate shall be sufficient evidence to the Fiscal Agent of the facts stated therein and the Fiscal Agent shall have no duty toconfi rm the accuracy of such facts. The Fi seal Agent shall maintain the Cost of Issuance Fund for a period of 120days from the Closing Date and then shall transfer any moneys remaining therein, including any investment earnings thereon, to the General Manager for deposit O,' the General Manager in theAdrrinistrative Expense Fund. Follcwing such transfer, the Fiscal Agent shal I close the Costs of I ssuance Fund.

( C) I nvestment. Moneys in the Cost of I ssuance Fund shal I be invested in accordance with Section 6.01. Interest earnings and profits resulting from said investment shall be retained b,' the Fiscal Agent in the Cost of Issuance Fund to be used for the purposes of such fund.

Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be dependent upon the performance b,' any person of his oll igation with respect to the Project.

SPECIAL TAX REVENUES; BOND FUND AND RESERVE FUND

Pledge of Special Tax Revenues.

The Bands shal I be secured b,' a first pledge of al I of the Special Tax Revenues (cther than the Special Tax Revenues to be deposited to the Administrative Expense Fund pursuantto clause (i) of the second paragraph of Section 3.04(A)) and all moneys deposited in the Bond Fund, the

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Special Tax Prepayments Account, and, until disb.Jrsed as p-avided herein, in the Special Tax Fund. The 2017 Bonds are further secured b,' a first and exclusive I ien on amounts in the Reserve Fund. Such Special Tax Revenues and all mmeys derx:isited into said funds (except as otherwise p-avi ded herein) are hereb,' dedi cared to the payment of the principal of, and interest and any p-emiumon, the Bonds(andwith respect to the Reserve Fund, the 2017 Bonds) as p-avided herein and in the Act until all of the Bonds have been paid and retired or until mmeys or Federal Securities have been set aside irrevocably for that purpose in accordance with Section 9.03.

A mounts in the Adni ni strative Expense Fund, the Costs of I ssuance Fund, the Rebate Fund and the I rnpravement Fund, and the Special Tax Revenues to be derx:isited to the Administrative Expense Fund pursuanttoSection 3.04(A)(i), are nct pledged to the repayment of the Bonds. The facilities financed b,' the CFO are not in any way pledged to pay the delX service on the Bonds. Any p-oceeds of the sale, condemnation or destructi on of any faci I i ti es fi nanced b,' the CF D are not fl edged to pay the debt service on the Bands and are free and cl ear of any Ii en or obi i gati on imposed hereunder.

Bond Fund.

(A) Establishment of Bond Fund and Special Tax Prepayments Account. There is hereb,' established as a separate fund to be held b,' the Fiscal Agent, the Community Facilities District No. 2013-1 (OJAI) Bond Fund to the credit of which deposits shal I be made as required b,' Section 3.03(A), 3.05 and Section 4.03, and any cther amounts required to be deposited therein b,' the Agreement or the Act. There is also hereb,' created in the Bond Fund a separate account held b,' the Fiscal Agent, consisting of the Special Tax Prepayments Account, to the credit of whi ch deposits shal I be made as requi red b,' clause ( i i i) of the second paragraph of Section 3.0S(A).

Moneys in the Bond Fund and the Special Tax Prepayments Account shall be held b,' the Fi seal Agent forthe benefit of the Owners of the Bands, shal I be disbursed forthe payment of the p-incipal of, and interest and any premium on, the Bonds as pravided belcw, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. Notwithstanding the foregdng, amounts in the Bond Fund may be used for the purposes set forth in Section 2.03(0).

(B) Disbursements. (i) Bond Fund Disb.Jrsements. On each Interest Payment Date, and fdlavving any transfers required pursuant to Sections 3.04(A), 3.04(B), 4.02(B)(ii) and 4.03(C), (E) and (F) in connection with such Interest Payment Date, the Fiscal Agent shall withdraw from the Bond Fund and pay to the Owners of the Bands the principal of, and interest and any premium, then due and payable on the Bands, including any amounts due on the Bands b,' reason of the sinking payments set forth in Section 2.03(A)(ii) and (iii), or a redemption of the Bands required b,' Section 2.03(A)(i) or (iv), such payments to be made in the priority listed in the second succeeding paragraph. Notwithstanding the foregoing, amounts in the Bond Fund as a result of a transfer pursuant to Section 3.0S(A)(ii) shall be immediately disbursed b,' the Fiscal Agent to pay past due amounts avvi ng on the Bands.

In the eventthat amounts in the Bond Fund are insufficient for the purpose set forth in the p-eceding paragraph, the Fiscal Agent shall notify the General Manager of the amount of the insufficiency, and the Fiscal Agent shall withdraw from the Reserve Fund to the extent of any

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funds therein an amount to caver the annunt of such Bond Fund insufficiency. Amounts so withdrctvVn from the Reserve Fund shall~ deposited 0\/ the Fiscal Agent in the Bond Fund.

If, after the foregoing transfers, there are i nsuffi ci ent funds in the Bond Fund to make the payments pravided for in the first sentence of the first paragraph of this Section 4.02(B), the Fi seal Agent shall apply the available funds first to the payment of interest on the Bonds, then to the payment of principal due on the Bands other than 0\/ reason of sinking payments, and then to payment of principal due on the Bands 0\/ reason of sinking payments. Each such payment shal I ~ made ratably to the Owners of the Bands based on the then Outstanding principal annunt of the Bands, if there are i nsuffi ci ent funds to make the corresponding payment for al I of the then Outstanding Bands. Any sinking payment nct made as scheduled shal I ~ added to the sinking payment to ~ made on the next sinking payment date.

(ii) Special Tax Prepayments Account Disb.Jrsements. Moneys in the Special Tax Prepayments Account shall ~ transferred 0\/ the Fiscal Agent to the Bond Fund on the third Business Day prior to the next date for which notice of redem[Xi on of Bands under Section 2.03(A)(iii) can timely~ given 0\/ the Fiscal Agent under Section 2.03(E), and shall ~ used (together with any annunts transferred pursuantto Section 4.03(F)) to redeem Bonds on the redem[Xion date selected in accordance with Section 2.03.

( C) I nvestment. Moneys in the Bond Fund and the Special Tax Prepayments Account shall ~ invested in accordance with Section 6.01. Interest earnings and profits resulting from investment of amounts in the Bond Fund and the Special Tax Prepayments Account shall ~ retained in the Bond Fund and the Special Tax Prepayments Account, respectively, to~ used for the purposes of such fund and account.

(D) State Re[X)rting. If at any time the Fiscal Agent fails to pay principal and interest due on any scheduled payment date for the Bands, ncti ce shal I ~ prCNi ded 0\/ the General Manager as descri~d in Section 5. l 9(B).

Reserve Fund.

(A) Establishment of Reserve Fund. There is hereO)I established as a separate fund to ~ held 0\/ the Fiscal Agent, the Community Facilities District No. 2013-1 (OJAI) Reserve Fund to the credit of which a deposit shall ~ made as required 0\/ Section 3.03, which deposit is equal to the initial Reserve Requirement, and deposits shall ~ made as pravided in Sections 3.0S(A)(ii), and Section 3.0S(B ). Moneys in the Reserve Fund shall ~ held 0\/ the Fiscal Agent forthe ~nefit of the Owners of the 2017 Bands as a reserve for the payment of principal of, and interest and any premium on, the 2017 Bonds and shall ~ subject to a lien in favor of the Owners of the 2017 Bonds.

(B) Use of Reserve Fund. Exce[X as ctherwise prCNided in this Section, all annunts deposited in the Reserve Fund shall ~ used and withdrawn 0\/ the Fiscal Agent solely for the purpose of making transfers to the Bond Fund (as described in the second paragraph of Section 4.02(B )(i)) in the event of any deficiency at any time in the Bond Fund of the annunt then required for payment of the principal of, and interest and any premium on, the 2017 Bands or for the purpose of redeening 2017 Bonds from the Bond Fund. If at any time funds are withdrawn

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b,' the Fiscal Agent from the Reserve Fund fortransferto the Bond Fund due to a deficiency in the amount in the Bond Fund needed to pay debt service due on the 2017 Bonds (as described in the second paragraph of Section 4. 02( B)) , the Fi seal A gent shal I noti fy the G eneral M an ager of the date of withdrawal and the amount sowi thdrawn, and the General Manager shal I r:n:wi de notice as required b,' Section 5.19: B).

(C) Transfer of Excess of Reserve Requirement. Whenever, on the third Business Day before any I nterest Payment Date, or on any other date at the request of an Authorized Officer, the amount in the Reserve Fund exceeds the Reserve Requirement, the Fi seal A gent shal I pravi de written notice to the District of the amount of the excess and shal I transfer an amount equal to the excess from the Reserve Fund to the Bond Fund to be used for the payment of interest on the Bands on the next Interest Payment Date in accordance with Section 4.02.

(D) Transfer for Rebate Pur[X)ses. Amounts in the Reserve Fund shall be withdrawn, at the written request of the General Manager, for purposes of making payment to the federal gavernment to comply with Section 6.02.

(E) Transfer When Balance Exceeds Outstanding Bonds. Wheneverthe balance in the Reserve Fund equals or exceeds the amount required to redeem or pay all of the Outstanding Bands, including interest accrued to the date of payment or redem[Xi on and premium, if any, due upon redem[Xion, the Fi seal Agent shall transferthe amount in the Reserve Fund to the Bond Fund to be used forthe payment and redemption, in accordance with Section 4.02 or 2.03, as app icable, of all of the Outstanding 2017 Bonds. In the event that the amount then on deposit in the Reserve Fund exceeds the amount required to pay and redeem the Outstanding 2017 Bands, the balance in the Reserve Fund in excess of the amount needed for such payment and redemption shall be transferred b,' the Fiscal Agent to the General Manager, to be retained b,' the District, unencumbered b,' this Fiscal Agent Agreement, to be used b,' the District for any lawful purpose under the Act.

Nctwithstanding the foregoing, no amounts shall be transferred from the Reserve Fund pursuant to this Section 4.03(E) until after (i) the calculation, pursuant to Section 6.02, of any amounts due to the federal gcwernment fdlcwing payment of the Bonds and withdrctNal of any such amount under Section 4.03(0) for purposes of making such payment to the federal gavernment, and (ii) payment of any fees and expenses due to the Fi seal Agent.

(F) Transfer U pm Special Tax Prepayment. Whenever Special Taxes are prepaid and 2017 Bands are to be redeemed with the proceeds of such prepayment pursuant to Section 2.03(A)(iv) and 4.02(B)(ii), a proportionate amount in the Reserve Fund (determined in accordance with the applicable pravisions of the Rate and Method of Apportionment and communicated b,' the General Manager to the Fi seal Agent) shall be transferred not later than the Business Day prior to the redem[Xion date b,' the Fi seal Agent to the Bond Fund to be applied to the redem[Xion of the 2017 Bonds pursuantto Section 2.03(A)(iv).

(G) Investment. Moneys in the Reserve Fund shall be invested in accordance with Section 6.01. Interest earnings and profits resulting from said investment shal I be retained b,' the Fiscal Agent in the Reserve Fund to be used for purposes of the Reserve Fund, including as pravided in Section 4.03(0) abave.

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(H) 2017 Reserve Policy. (i) In lieu of a cash depositto the Reserve Fund, the 2017 Reserve Policy shall ~ delivered to the Fiscal Agent on the Closing Date forthe 2017 Bonds, and shall ~ held 0\/ the Fiscal Agent for the credit of the Reserve Fund solely for the ~nefit of the 2017 Bonds. In lieu of a cash derx:isitto a reserve fund, a Credit Facility may~ delivered to the Fiscal Agent in connection with any Parity Bonds, and if deposited, shall ~ held 0\/ the Fiscal Agent solely for the credit of the reserve fund estal:lished for the ~nefit of such series of Parity Bonds. The Fiscal Agent may establish separate subaccounts within the Reserve Fund to hold each Credit Facility and the 2017 Reserve Pd icy.

(ii) If, on the third Business Day p-ior to any Interest Payment Date, the moneys avai lal:le in the Bond Fund, do nct equal the amount of the p-i nci pal and interest on the Bands then corri ng due and payal:le, the Fiscal Agent shall first awly any moneys available in the Reserve Fund to rrake delinquent amounts with respect to the Bands 0\/ transferring the amount necessary for this p.,1rrxise to the Bond Fund, and then shall draw on the 2017 Reserve Policy to the extent an i nsuffi ci ency sti 11 exists and awly amounts received from such draw to rrake delinquent amounts on the 2017 Bonds 0\/ transferring the amount necessary forthis purpose to the Bond Fund. To the extentthere is cash or investments on derx:isit in the Reserve Fund, such cash or investments shall ~ applied first ~fore there is any draw on the 2017 Reserve Pd icy or any other Credit Facility credited to the Reserve Fund in lieu of cash. Payment of any amounts cwing underthe Financial Guaranty Agreement shall ~ made priorto replenishment of any such cash amounts.

Draws on all Credit Facilities (including the 2017 Reserve Policy) on which there is available cOJerage forthe 2017 Bonds(" 2017 Credit Facilities'') shall ~ made on a pro rata basis (calculated 0\/ reference to the caverage then avai I able thereunder) after awlyi ng al I avai I all e cash and investments in the Reserve Fund. Payment of amounts cwed 0\/ the District to BAM as necessary to rei rri:Jurse any drctN on the 2017 Reserve Pd icy and reimbursement of amounts with respect to other 2017 Credit F aci I iti es shal I ~ made on a pro rata basis p-i or to rep eni shment of any cash drawn from the Reserve Fund.

The Fiscal Agent shall ascertain the necessity for a claim upon the 2017 Reserve Pd icy, and prOJi de notice to BAM in accordance with the terms of the 201 7 Reserve Policy at I east three (3) Business Days prior to each date urxin which interest or principal is due on the 2017 Bonds.

The District has no obligation to rep ace the 2017 Reserve Pd icy or to fund the Reserve Fund with cash if, at any time the 2017 Bonds are outstanding, amounts are unavailal:le under the 2017 Reserve Pd icy.

The District agrees to repay any draws under the 2017 Reserve Pd icy and pay all related reasonable expenses incurred 0\/ BAM as p-0.tided in the Agreement.

OTHER COVENANTS OF THE DISTRICT

Punctual Payment.

The District will punctually pay or cause to~ paid the p-incipal of and interest and any p-emiumon, the Bonds when and as due in strict conforrrity with the terms of the Agreement and

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any Supplerrental Agreerrent, and it will faithfully observe and perform all of the conditions, cavenants and requi rerrents of the Agreerrent and al I Supplerrental Agreerrents of the Bands.

Limited Obligation.

The Bonds are limited obligations of the District on behalf of the CFO secured 0\/ and payalle solely from the announts and in the manner described in Sections 3.04(D), 4.02 and 4.03 hereof.

Extension of Time for Payment.

In order to prevent any accumulation of claims for interest after maturity, the District shall not, directly or indirectly, extend or consent to the extension of the tirre for the payrrent of any claim for interest on any of the Bands and shal I not, directly or indirectly, be a party to the appraval of any such arrangerrent 0\/ purchasing or funding said claims for interest or in any other manner. I n case any such claim for interest shal I be extended or funded, whether or not with the consent of the District, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of the Agreerrent, exce[X subject to the prior payrrent in full of the principal of al I of the Bands then Outstanding and of al I claims for interest which shal I not have been so extended or funded.

Against Encumbrances.

The District will not encumber, pledge or place any charge or lien upon any of the Special Tax Revenues or cther amounts pedged to the Bonds superiorto or on a parity with the pedge and Ii en herein created for the benefit of the Bands, except as permitted 0\/ the Agreerrent.

Books and Records.

The District will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the District, in which compete and correct entries shall be made of all transactions relating to the deposits to and expenditure of amounts disbursed from the Administrative Expense Fund and the Special Tax Fund, and to the Special Tax Revenues. Such books of record and accounts shall at all tirres during District business hours and follcwing reasonable prior written notice be subject to the inspection of the Owners of nct less than ten percent ( 10'/4) of the principal annount of the Bands then Outstanding, or their representatives duly authorized in writing.

Prctection of Security and Rights of Owners.

The Districtwill preserve and protect the security of the Bands and the rights of the Owners, and wi 11 warrant and defend their rights against al I claims and demands of al I persons. From and after the del i very of any of the B ands 0\/ the Di strict, the B ands shal I be i ncontestabl e 0\/ the District.

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Canpliancewith Law.

The District will compywith all applicable prCNisions of the Act in administering the CFO; pravided that the District shall have no obligation to advance any of its avvn funds for any purpose whatsoever under the Agreement.

Private Activity Bond Limitation.

The Di strict shal I assure that the proceeds of the 2017 Bands are nct so used as to cause the 2017 Bonds to satisfy the private business tests of section 141 (b) of the Code or the private loan financing test of section 141 ( c) of the Code.

Federal Guarantee Prohibition.

The District shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the 2017 Bonds to be "federally guaranteed" within the meaning of section 149: b) of the Code.

Cdlection of Special Tax Revenues.

The District shal I canply with al I requirements of the A ct so as to assure the timely col I ecti on of Special Tax Revenues, including without linitation, the enforcement of delinquent Special Taxes.

On or alboutJ uly 1 of each year, the Fiscal Agent shall prCNide the General Manager with anctice stating the amounts then on deposit in the Reserve Fund and in the Bond Fund. The recei fl: of such notice by the General Manager shal I in no way affect the obi i gati ons of the General Manager under the fol I avvi ng three paragraphs. A I so on or alboutJ uly 1 of each year, the General Manager shall communicate with the Auditor or other appropriate official of the County to ascertain the relevant parcels on which the Special Taxes are to be I evi ed, taking into account any parcel spits during the preceding and then current year. I n computing the amount of Special Taxes to be levied, the General Manager shall take into account funds in the Bond Fund and the Special Tax Fund, and any amounts then in the Reserve Fund in excess of the Reserve Requirement, available to make the payment of debt service on the Bonds due on the Interest Payment Dates occurring in the next calendar year.

The General Manager shall effect the levy of the Special Taxes from time to time during each Fi seal Year in accordance with the Ordinance and the Rate and Method of Apportionment. Specifically, the General Manager shall canpute the amount of Special Taxes to be so levied each Fiscal Year before the final date on which the Auditor will accep: the transni ssion of the Special Tax amounts for the parcels within the CFO for inclusion on the next secured or unsecured, as applicable, real property tax rol I. Upon the cornpl eti on of the cornputati on of the amounts of the levy, the General Manager shal I prepare or cause to be prepared, and shal I transmittotheAuditor, such data as the Audi tor requires to include the I evy of the Special Taxes on the next real property tax rdl. The Special Taxes so levied shall be payable and be cdlected in the same manner and at the same ti me and in the same i nstal I ment as the ad val orem taxes on property I evi ed on the tax rdl are payable, and have the same priority, become delinquent at the same times and in the same

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p-oporti onate amounts and bear the sarrE proportionate penal ti es and interest after delinquency as do the general ad val orem taxes I evi ed on the County secured tax rd I.

I n the event that the General Manager deterrri nes to I evy al I or a portion of the Special Taxes b,' means of direct b 11 i ng of the p-operty avvners within the CF D, and to the extent permitted b,' the Ordinance, the General Manager shall, not less than forty-five (45) days p-ior to each Interest Payment Date, send b 11 s to the property avvners in the CF D for Special Taxes necessary to meet the financial obligations of the CFO due on the next Interest Payment Date said b lls to specify that the announts so levied shal I be due and payable nct less than thirty (30) days prior to such Interest Payment Date and shal I be delinquent if not paid when due.

In any event, the District shal I fix and levy the amount of Special Taxes within the CFO required for the timely payment of principal of and interest on any outstanding Bands becoming due and payable, including any necessary repenishment or expenditure of the Reserve Fund for the 2017 Bands (including payment of any amounts due to BAM in respect of the 2017 Reserve Policy) and any reserve fund established for any Parity Bonds and an amount estimated to be sufficient to pay the Administrative Expenses, and shall take into account any prepayments of Special Taxes theretofore received b,' the District. The Special Taxes so levied shall nct exceed the maximum announts as pravided in the Rate and Method of Apportionment.

The General Manager is hereb,' authorized to employ consultants to assist in computing the I evy of the Special Taxes hereunder and any reconci Ii ati on of amounts I evi ed to amounts received. The fees and expenses of such consultants and the costs and expenses of the General Manager (including a charge for District staff time) in conducting its duties hereunder shall be an Administrative Expense hereunder.

Further Assurances.

The District will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as rray be reasonably necessary or proper to carry out the intention or to faci Ii tate the performance of the Agreement, and forthe better assuring and confirming unto the Owners of the rights and benefits pravi ded i n the Agreement.

No Arbitrage.

The District shal I nct take, or perrrit or suffer to be taken b,' the Fi seal Agent or ctherwi se, any action with respect to the proceeds of the 2017 Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the 2017 Bands would have caused the 2017 Bands to be "arbitrage bonds'' within the meaning of section 148 of the Code.

Maintenance of Tax-Exemption.

The District shall take all actions necessary to assure the exclusion of interest on the 2017 Bands from the gross income of the avvners of the 201 7 Bands to the sarrE extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the 201 7 B ands.

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Ccwenant to Foreclose.

The Di strict herel:Jy cavenants, with and forthe ~nefit of the Owners of the Bands that it will order, and cause to~ comnenced and diligently pursue to competion, judicial foreclosure proceedings against (i) properties in the District with three delinquent installments of the payment of Special Taxes no later than the sixth month follavving the date on such third installment of such Special Taxes were due, subject to a rri nimum of $2,500 in delinquent Special Taxes; and (ii) all properties in the District with delinquent Special Taxes lJy the Octo~r 1 fd lavving the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than ninety-five percent (95%) of the tctal Special Taxes levied, prcwiding, havvever, the District shall not~ required to order and causejudicial foreclosure proceedings to~ commenced against particular delinquent properties if the District determines that the cost of pursuing such foreclosure is greater than the outstanding delinquency.

The General Manager is herel:Jy authorized to employ counsel to conduct any such foreclosure proceedings. The fees and expenses of any such counsel (including a charge for District staff ti me) in conducting foreclosure proceedings shal I ~ an Administrative Expense hereunder.

NoAdditional Bonds.

Except as expressly permitted lJy Section 2.14 hereof, the District shall not issue any additional bonds secured lJy (A) a pedge of Special Taxes on a parity with or senior to the pledge thereof under Section 4.01 hereof; or (B) any amounts in any funds or accounts established hereunder.

Yield of the 2017Bonds.

In deterrrining the yield of the 2017 Bonds tocompywith Section 5.12 and 6.02 hereof, the District wi 11 take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the District, as of the Closing Date, regarding prepayments of Special Taxes and use of prepayments for redemp:ion of the 2017 Bonds, without regard to whether or not prepayments are received or 2017 Bands redeemed.

Continuing Disclosure.

The District herel:Jy cavenants and agrees that it will comply with and carry out all of the pravi si ons of the Continuing Di sci osure Agreement. N ctwithstandi ng any other prcwi si on of the Agreement, failure of the District to comply with the Continuing Disclosure Agreement shall nct ~ considered a default on the Bands or a breach of any other prcwi si on of the Agreement.

Reduction of Special Taxes.

The District cavenants and agrees to not consent or conduct proceedings with respect to a reduction in the maximum Special Taxes that may~ levied in the CFO on Developed Property (as defined in the Rate and Method of Apportionment) ~lcw an amount, for any Bond Year, equal to 11 CP/4 of the aggregate of the delX service due on the Bands in such Bond Year, pl us a reasonable estimate of Administrative Expenses for each such Bond Year. It is herel:Jy acknavvledged that

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B mdcwners are purchasing the B mds in reliance m the foregoing cavenant, and that said cavenant is necessary to assure the ful I and timely payment of the B mds.

State Reporting Requirements.

The follavving requirements shall apply to the 2017 Bonds, in additim to those requirements under Section 5.1 7:

(A) Annual Reporting. (A) Annual Reporting. Nct later than October 30 of each calendar year, ~ginning with the Octo~r 30, 2017, and in each calendar year thereafter until the October 30 fol I cwi ng the final maturity of the Bands, the General Manager shal I cause the fdlcwing information to~ suppliedtothe CaliforniaDelX and I nvestmentAdvisory Commission ("CDIAC"): (i) the name of the District; (ii) the full name of the CFO; (iii) the name, title, and series of the Bmd issue; (iv) any credit rating for the Bonds and the name of the rating agency; (v) the Closing Date of the Bondi ssue and the original principal amount of the Bond issue; (vi) the amount of the Reserve Requirement; (vii) the principal annunt of Bonds outstanding; (viii) the balance in the Reserve Fund and the balance in any reserve fund for any Parity Bonds; (ix) the balance, if any, in the Bond Fund representing capitalized interest for the Bmds; (x) the num~r of parcels in the CFO that are delinquent with respect to Special Tax payments, the amountthat each parcel is delinquent, the tctal amount of Special Taxes due on the delinquent parcels, the length of time that each has ~n delinquent, when foreclosure was commenced for each delinquent parcel, the total num~r of foreclosure parcels for each date specified, and the tctal amount of tax due m the foreclosure parcels for each date specified; (xi) the balance, if any, in the I rnpravement Fund; (xii) the assessed value of all parcels suqject to the Special Tax to repay the Bmds as shewn on the most recent equalized rdl, the date of assessed value reported, and the source of the information; (xiii) the total amount of Special Taxes due, the total amount of unpaid Special Taxes, and whether or not the Special Taxes are paid under the County's Teeter Plan (Chapter 6.6 (commencing with Section 54773) of the California Gavernment Code); (xiv) the reason and the date, if app i cable, that the Bands were retired; and (xv) cmtact i nformati m for the party prCNi ding the foregoing i nformati m. The annual reporting shal I ~ made using such form or forms as may~ prescri~d b,' CDIAC.

(B) Other Reporting. If at any ti me the Fiscal Agent fails to pay principal and interest due many scheduled payment date for the Bmds, or if funds are withdrawn b,' the Fiscal Agent from the Reserve Fund pursuant to Section 4.03(B) for transfertothe Fiscal Agentto ~ used to pay principal and interest on the Bands, the General Manager shal I notify COi AC and the Original Purchaser of such failure or withdrawal within 10 days of such failure or withdrawal, and the General Manager shall pravide notice under the Cmtinuing Disclosure Agreement of any such event as required thereunder.

( C) S peci al Tax R e[X)rti ng. The General M an ager shal I fi I e a report with the Di strict no laterthanJ anuary 1, 2018, and at least mce a year thereafter, which annual report shall contain: (i) the amount of Special Taxes collected and expended with respect to the CFO, (ii) the annunt of Bond proceeds collected and expended with respect to the CFO, and (iii) the status of the Project. It is acknavvledged that the Special Tax Fund, the Bmd Fund, the Reserve Fund, the Special Tax Prepayments Account and the Administrative Expense Fund are the accounts into which Special Taxes collected in the CFO will ~ deposited for purposes of Section 50075. l(c) of

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the Cali fITni a G avernment Code, and the funds and accounts Ii sted in Section 3. 02(A) and 3. 03(A) are the funds and accounts into which Bond p-oceeds will ~ deposited for p.,1rposes of Section 5341CXc) of the California Gavernment Code, and the annual report descri~d in the p-eceding sentence is intended to satisfy the requirements of Sections 50075. l(d), 50075.3 and 53411 of the CaliforniaGavernment Code.

(D) Amendment. The rerx:irting requirements of this Section 5.19 shall ~ amended frorn time to time, without action 0\/ the District or the Fiscal Agent (i) with respect to subparagraphs (A) and (B) abave, to reflect any amendments to Section 53359.5(b) or Section 53359.5(c) of the Act, and (ii) with respect to subparagraph (C) abave, to reflect any amendments to Section 50075.1, 50075.3, 53410 IT 53411 of the CalifITnia Gavernment Code. Nctwithstanding the fITegoing, any such amendment shall not, in itself, affect the District's obligations underthe Continuing DisclosureAgreement. The Di strict shall notify the Fiscal Agent in writing of any such amendments which affect the reporting oll igations of the Fiscal Agent under the Agreement.

(E) No Liability. None of the Di strict and its officers, agents and errployees (including but not limited to the General Manager), or the Fiscal Agent, shall ~ lialle for any inadvertent errIT in reporting the information required 0\/ this Section 5.19.

The General Manager shal I pravi de copies of any rerx:irts prepared pursuant to this Section 5.19 to any Bondcwner upon the written request of a Bondavvner and payment 0\/ the person requesti ng the i nforrnati on of the cost of the Di strict to produce such i nforrnati on and pay any postage or cther delivery cost to pravi de the same, as deterrni ned 0\/ the General Manager. The terrn "B ondcwner" for p.,1rposes of this Section 5.19 shal I include any ~nefi ci al cwner of the Bonds.

L irnits on Special Tax Waivers and Bond Tenders.

The District cavenants not to exercise its rights under the Act to waive delinquency and redernp:i on penal ti es related to the Special Taxes IT to declare Special Tax penal ti es amnesty program if to do so would rnateri ally and adversely affect the interests of the cwners of the Bands. The District further cavenants nct to permit the tender of Bonds in payment of any Special Taxes excep: upon receip: of a certificate of an Independent Financial Consultant that to accep: such tenderwi II not result in the District having insufficient Special Tax Revenues to pay the principal of and interest on the Bands that wi 11 rernai n Outstanding fol I cwi ng such tender.

District Bid at Foreclosure Sale.

The District will nct bid at a foreclosure sale of property in respect of delinquent Special Taxes unless it expressly agrees to take the p-operty subject to the lien for Special Taxes i rnposed 0\/ the CFO and thatthe Special Taxes levied on the property are payable while the District cwns the p-operty.

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INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS; LIABILITY OF THE DISTRICT

Deposit and I nvestment of Moneys in Funds.

Moneys in any fund IT account created or established by the Agreement and held by the Fiscal Agent shall be invested by the Fi seal Agent in Permitted Investments, as directed pursuant to an Officer's Certificate filed with the Fi seal Agent at least two (2) Business Days in advance of the making of such investments. The Officer's Certificate shall contain a certification to the Fiscal Agent that the investments being directed are Permitted Investments as required hereunder. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest any such moneys in Permitted Investments described in clause (h) of the definition thereof; pravided, havvever, that any such investment shall be made by the Fiscal Agent only if, prior to the date on which such investment is to be made, the Fi seal Agent shall have received an Officer's Certificate specifying a specific money market fund into which the funds shal I be invested and, if no such Officer's Certificate is so received, the Fiscal Agent shall hold such moneys uninvested.

Moneys in any fund IT account created or established by the Agreement and held by the General Manager shall be invested by the General Manager in any lctvVful investments that the District may make or in any Permitted Investment, which in any event by theirterms mature prior to the date on which such moneys are required to be paid out hereunder. Obi i gati ons purchased as an investment of moneys in any fund shal I be deemed to be part of such fund IT account, suqj ect, havvever, to the requirements of the Agreement for transfer of interest earnings and profits resulting from investment of amounts in funds and accounts. Whenever in the Agreement any moneys are required to be transferred by the Di strict to the Fiscal Agent, such transfer may be accornpli shed by transferring a Ii ke amount of Permitted Investments.

The Fiscal Agent orthe General Manager may act as principal IT agent in the acquisition IT disposition of any investment, and all investments may be made through the Fiscal Agent's investment department orthat of its affiliates. The Fiscal Agent or itsaffi Ii ates may act as sponsor, agent manager or depository with regard to any Permitted Investment. Neither the Fi seal Agent nor the General Manager shall incur any liability for losses arising from any investments made pursuant to this Section.

Except as otherwise pravided in the next sentence, the District shall direct or make investments hereunder such that al I investments of amounts deposited in any fund or account created by IT pursuant to the Agreement, IT otherwise containing gross proceeds of the Bands (within the meaning of section 148 of the Code) shal I be acquired, disposed of, and valued (as of the date that valuation is required by the Agreement or the Code) at Fair Market Value. The District shall direct IT make investments hereunder such that investments in funds IT accounts (or portions thereof) that are subject to a yield restriction under appicable prCNisions of the Code and ( uni ess valuation is undertalken at I east annually) investments in the Reserve Fund shal I be valued at their present value (within the meaning of section 148 of the Code). The Fiscal Agent shall have no duty in connection with the deterrrination of the Fair Market Value of any investment other than to follcw: (A) its nITmal practices in the purchase, sale and determining the value of Permitted Investments; and (B) the investment directions of the District.

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I nvestments in any and al I funds and accounts may be canmi ngl ed in a separate fund IT funds for p.,1rposes of making, holding and disposing of investments, nctwithstanding p-avisions herein for transfer to or hdding in or to the credit of particular funds IT accounts of amounts received or held lJy the Fiscal Agent IT the General Manager hereunder, p-avided thatthe Fiscal Agent orthe General Manager, as app i cable, shal I at al I ti mes account f IT such investments strictly in accITdancewith the funds and accounts to which they are credited and ctherwise as pravided in the Agreement.

The Fiscal Agent shall sell, or present for redemption, any investment security whenever it shal I be necessary to pravi de moneys to meet any required payment, transfer, withdrctNal or disbursement from the fund or accounttowhich such investment security is credited and neither the Fi seal Agent nIT the General Manager shall be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accITdance herewith.

The District ackncwledges that regulations of the Canptroller of the Currency grant the District the right to receive brokerage confirmations of security transactions to be effected b,' the Fiscal Agent hereunder as they occur. The District specifically waives the right to receive such notification to the extent perrritted lJy applicable law and agrees that it will instead receive monthly cash transactions statements which shal I include detai I fIT the investment transactions effected lJy the Fiscal Agent hereunder; pravided, hcwever, that the District retains its rights to, upon written request to the Fiscal Agent, receive brokerage confirmation on any investment transaction requested b,' the Di strict.

Rebate of Excess I nvestment Earnings to the United States.

The District shall take any and all actions necessary to assure canpliance with section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal gavernment, to the extent that such section is applicable to the Bands.

The Fi seal Agent shal I establish and maintain a special fund designated the" Rebate Fund." There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein, as specified in a certificate executed lJy an A uthITi zed Officer. A 11 money at any ti me deposited in the Rebate Fund shall be held b,' the Fiscal Agent, to the extent required to satisfy the Rebate Requirement, fIT payment to the United States of America Notwithstanding defeasance of the Bonds p.,1rsuant to Section 9.03 or anything to the contrary contained herein, all amounts required to be deposited into or on deposit in the Rebate Fund shall be gOJerned exclusively b,' the p-avisions under this Section 6.02. The Fiscal Agent shall be deemed conclusively to have comp ied with such prOJisions if it fd lcws the written directions of the District.

The District may withdrctN any funds from the Reserve Fund pursuantto Section 4.03(0) (but may not draw on any Credit Facility held in the Reserve Fund) as necessary to make any required rebate payments, and deposit such amounts to the Rebate Fund to be used to pay such amounts to the federal gavernment as required lJy the Code and the Regulations. In the event of any shortfall in amounts available to make such payments under Section 4.03(0), the General Manager shall make such payment fran any amounts available in the Administrative Expense Fund or from any other lawfully available funds of the CFO orthe District. Any fees IT expenses incurred lJy the District under or pursuantto this Section 6.02 shall be Administrative Expenses.

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In order to pravide forthe administration of this Section 6.02, the General Manager may pravide for the employment of independent attorneys, accountants and consultants compensated on such reasonable basis as the General Manager may deem appropriate and in addition the General Manager may rely conclusively upon and~ fully protected from all liability in relying upon the opinions, deterrri nations, cal cul ati ons and advice of such agents, attorneys and consultants employed hereunder.

Any funds remaining in the Rebate Fund after payment in ful I of al I of the Bands and after payment of any amounts descri~d in the pravisions under this Section 6.02, shall, upon recei[X b,' the Fiscal Agent of a certificate executed b,' an Authorized Officer, ~withdrawn b,' the Fi seal A gent and remitted to the Di stri ct.

The Fiscal Agent may rely conclusively upon the District's determinations, calculations and certifications required b,' this Section. The Fiscal Agent shall have no responsibility to independently make any calculation or determination or to review the District's calculations hereunder.

Liability of District.

The District shall not incur any responsibility in respect of the Bonds or the Agreement cther than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it. The District shall not~ liable in connection with the performance of its duties hereunder, exce[X for its avvn negligence or willful default. The District shall nct ~ bound to ascertain or inquire as to the performance or observance of any of the terms, conditions cavenants or agreements of the Fi seal Agent herein or of any of the documents executed b,' the Fiscal Agent in connection with the Bonds, or as to the existence of a default or event of default thereunder.

In the absence of bad faith, the Di strict, including the General Manager, may conclusively rely, as to the truth of the statements and the correctness of the op ni ons expressed therein, upon certificates or opinions furnished to the District and conforrring to the requirements of the Agreement. The District, including the General Manager, shall not ~ lialle for any error of judgment made in good faith unless it shall ~ praved that it was negligent in ascertaining the perti nent facts.

No pravision of the Agreement shal I require the Di strict to expend or risk its avvn general funds or otherwise incur any financial liability (other than with respect to the Special Tax Revenues) in the performance of any of its obligations hereunder, or in the exercise of any of its rights or pcwers, if it shal I have reasonall e grounds for ~Ii evi ng that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

The District may rely and shall ~ prctected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or document ~lieved b,' itto ~ genuine and to have ~en signed or presented b,' the proper party or proper parties. The District may consult with counsel, who may ~ the District Counsel, with regard to I egal questions, and the opinion of such counsel shal I ~ ful I and compete authorization

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and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.

The District shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is sul:mitted for inspection, if required, and his title thereto satisfactory establ i shed, i f di sputed.

Whenever in the administration of its duties underthe Agreementthe District shall deem it necessary or desirable that a matter be prcwed or established prior to taking or suffering any action hereunder, such matter ( uni ess cther evidence in respect thereof be herein specifically prescribed) may, in the absence of willful rri sconduct on the part of the Di strict, be deemed to be conclusively praved and established by a certificate of the Fiscal Agent or other appropriate agent or consultant, and such certificate shall be full warrant to the District for any action taken or suffered under the pravisions of the Agreement or any Suppemental Agreement upon the faith thereof, but in its discretion the District may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.

Employment of Agents by Di strict.

In order to perform its duties and obligations hereunder, the District andpr the General Manager may employ such persons or entities as it deems necessary or advisable. The District shall nct be liable for any of the acts or omissions of such persons or entities empoyed by it in good faith hereunder, and shal I be entitled to rely, and shal I be fully prctected in doing so, upon the opinions, calculations, deterrri nations and directions of such persons or entities.

THE FISCAL AGENT

Appdntment of Fiscal Agent.

U.S. Bank National Association, at its corporate trust office in San Francisco, California is hereby appointed Fiscal Agent and paying agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in the Agreement, and no implied cavenants or obligations shal I be read into the Agreement against the Fiscal Agent.

Any company or association into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company or association resulting from any merger, conversion or consolidation to which it shall be a party or any company or association to which the Fi seal Agent may sell ortransfer all or substantially all of its corporate trust business, pravided such company or association shal I be el i gi bl e under the fd I avvi ng paragraph of this Section, shal I be the successor to such Fi seal Agent withoutthe execution or fi Ii ng of any paper or any further act, anything herein to the contrary notwithstanding. The Fiscal Agent shall give the General Manager written nctice of any such succession hereunder.

The District may remcwe the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shal I be a bank, association or trust company having a combined capital (exclusive of borravved capital) and surplus of at least Fifty Mill ion Dollars ($50,CXX),CXX)), and subject to supervision or examination by federal or state authority. If such bank, association or trust company publishes a report of

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condition at I east annually, pursuant to I= or to the requirements of any supervising or exarni ni ng authority al::xNe referred to, then for the purposes of this Section 7.01, combined capital and surp us of such bank, association or trust company shall be deemed to be its combined captal and surplus as set forth in its most recent report of condition so published.

The Fiscal Agent may at any time resign 0\/ giving written notice to the District and 0\/ giving to the Owners notice 0\/ mai I of such resignation. Upon receiving ncti ce of such resignation, the District shall promp:ly appoint a successor Fiscal Agent 0\/ an instrument in writing. Any resignation or rerruval of the Fiscal Agent shall become effective only upon accep:ance of appoi ntment 0\/ the successor F i seal A gent. U pon such acceptance, the successor Fi seal A gent shall be vested with all rights and powers of its predecessor hereunder without any further act.

If no appointment of a successor Fiscal Agent shall be made pursuant to the foregdng pravisions of this Section within forty-five (45) days afterthe Fiscal Agent shall have given to the District written nctice or after a vacancy in the office of the Fiscal Agent shall have occurred 0\/ reason of its inability to act, the Fiscal Agent or any Bondcwner may apply to any court of competentjurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fi seal Agent.

If, 0\/ reason of the judgment of any court, or reasonable agency, the Fiscal Agent is rendered unable to perform its duties hereunder, al I such duties and al I of the rights and powers of the Fiscal Agent hereunder shall be assumed 0\/ and vest in the General Manager for the benefit of the Owners. The Di strict cavenants for the direct benefit of the Owners that its General Manager in such case shall be vested with all of the rights and powers of the Fiscal Agent hereunder, and shall assume all of the responsibilities and perform al I of the duties of the Fiscal Agent hereunder, in trust for the benefit of the Owners of the Bonds. In such event, the General Manager may designate a successor Fiscal Agent qualified to act as Fiscal Agent hereunder.

Liability of Fiscal Agent.

The recitals of facts, ccwenants and agreements herein and in the Bands contained shal I be taken as statements, ccwenants and agreements of the District, and the Fiscal Agent assumes no responsibility for the correctness of the same, or makes any representations as to the validity or sufficiency of the Agreement or of the Bonds, or shal I incur any responsibility in respect thereof, cther than in connection with the duties or obi i gati ons herein or in the Bands assigned to or imposed upon it. The Fiscal Agent shall nct be liable in connection with the performance of its duties hereunder, except for its cwn negligence or willful default. The Fi seal Agent assumes no responsibility or I iabi lity for any information, statement or recital in any offering memorandum or cther disclosure material prepared or distributed with respect to the issuance of the Bands.

In the absence of bad faith, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished 0\/ the Di strict to the Fi seal Agent and conforming to the requirements of the Agreement; but in the case of any such certificates or opinions 0\/ which any pravi si on hereof are specifically required to be furnished to the Fiscal Agent, the Fi seal Agent shal I be under a duty to examine the same to determine whether or notthey conform to the requirements of the Agreement on their face. Except as pravi ded al::xNe in this paragraph, the Fi seal Agent shal I be protected and shal I incur no

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liablity in acting or r:nx:eeding, or in nct acting or not proceeding, in good faith, reasmal:ly and in accordance with the terms of the Agreement, upon any resolution, order, notice, request, requisition, Officer's Certificate, consent or waiver, certificate, statement, affidavit, or other paper or document which it shal I in good faith reasonal:ly believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any pravi si on of the Agreement, and the Fi seal Agent shal I nct be under any duty to rnake any investigation or inquiry as to any statements contained or matters referred to in any such instrument.

The Fiscal Agent shall not be liable for any error of judgment made in good faith by a responsible officer unless it shal I be praved that the Fi seal Agent was negligent in ascertaining the perti nent facts.

No pravision of the Agreement shall require the Fiscal Agent to expend or risk its cwn funds or otherwise incur any financial liablity in the performance of any of its duties hereunder, or i n the exerci se of any of its rights or pcwers.

The Fiscal Agent shall be under no obi igation to exercise any of the rights or pavversvested in it by the Agreement at the request or direction of any of the Owners pursuant to the Agreement unless such Owners shall have offered to the Fi seal Agent security or indemnity satisfactory to it against the fees, expenses and liablities (including reasonable attorney's fees) which rnight be incurred by it in cornpliancewith such request or direction.

The Fiscal Agent may become the cwner of the Bonds with the same rights it would have if it were nct the F i seal A gent.

The Fiscal Agent shall have no duty or obligation whatsoever to enforce the cdlection of Special Taxes or other funds to be deposited with it hereunder, or as to the correctness of any announts received, and its liability shall be limited to the proper accounting for such funds as it shal I actually receive.

In orderto perform its duties and obi igations hereunder, the Fiscal Agent may employ such persons or entities as it deems necessary or advisal:le.

The Fiscal Agent shall not be considered in a-each of or in default in its obligations hereunder or progress in respect thereto in the event of delay in the performance of such obligations due to unforeseeal:le causes beyond its control and without its fault or negligence, including, but not Ii rnited to, acts of god or of the public enemy' or terrorists, acts of a gavernment, fires, floods, epiderrics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supp i es in the open market, rnal i ci ous rni schi ef, condernnati on, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any si rni I ar event and pr occurrences beyond the control of the Fi seal Agent.

I nforrnation; Books and Accounts.

The Fiscal Agent shall pravide to the District such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the District shall reasonably

A-36

request, including but nct Ii nited to quarterly statements reporting funds held and transactions 0\/ the Fi seal A gent.

The Fiscal Agent will keep, or cause to be kept, proper books of record and accounts, separate from all cther records and accounts of the Fiscal Agent, in which compete and correct entries shall be made of all transactions made 0\/ the Fiscal Agent relating to the deposit to and expenditure of amounts disbursed from the Bond Fund, the I mpravement Fund, the Special Tax Prepayments Account, the Reserve Fund, the Rebate Fund and the Costs of Issuance Fund. Such books of record and accounts shal I upon reasonable prior notice at al I ti mes during business hours be suqject to the inspection of the District and the Owners of not less than ten percent (lCP/4) of the principal amount of the Bands then Outstanding, or their representatives duly authorized in writing.

Nctice to Fiscal Agent.

The Fi seal Agent may rely and shal I be protected in acting or refraining from acting upon any notice, resolution, request, requisition, Officer's Certificate, consent, order, certificate, report, warrant, Bond or cther paper or document believed 0\/ it to be genuine and to have been signed or presented 0\/ the proper party or proper parties. The Fiscal Agent may consult with counsel, who may be counsel to the District, with regard to legal questions, and the opnion or advice of such counsel shal I be ful I and cornpl ete authorization and protection in respect of any action taken or suffered 0\/ it hereunder in good faith and in accordance therewith.

The Fiscal Agent shall nct be bound to recognize any person as the Owner of a Bond unless and until such Bond is subnitted for inspection, if required, and his title thereto satisfactorily establ i shed, i f di sputed.

Whenever in the administration of its duties under the Agreement the Fiscal Agent shall deem it necessary or desi rabl e that a matter be praved or establ i shed pri or to taki ng or suff eri ng any action hereunder, such matter ( uni ess cther evidence in respect thereof be herein specifically prescribed) may, in the absence of willful ni sconduct on the part of the Fiscal Agent, be deemed to be conclusively praved and established 0\/ a certificate of the Di strict, and such certificate shall be full warrant to the Fiscal Agent for any action taken or suffered under the pravisions of the Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.

Compensation, Indemnification.

The Di strict shall pay to the Fi seal Agent from time to time, promptly upon written request, reasonable compensation for all services rendered as Fiscal Agent undertheAgreement, and also al I reasonable expenses, charges, counsel fees and other disbursements, including those of their attorneys, agents and employees, incurred in and about the performance of their pcwers and duties under the Agreement, but the Fi seal Agent shal I not have a Ii en therefor on any funds at any ti me held 0\/ it undertheAgreement. The District further agrees, to the extent pernitted 0\/ applicable law, to indemnify and save the Fi seal Agent, its officers, employees, directors and agents harmess against any Ii abi Ii ti es, reasonable expenses, including reasonable I egal fees and expenses, which

A-37

it may incur in the exercise and performmce of its pcwersand duties hereunder which are nct due to its negligence or willful misconduct. The obligation of the District under this Section shall survive resignation or remcwal of the Fi seal A gent underthe Agreement and payment of the Bands and di scharge of the Agreement, but any monetary oll i gati on of the Di stri ct ari si ng under thi s Section shal I be Ii nited solely to amounts on deposit in the Adni ni strative Expense Fund.

MODI Fl CATION OR AMENDMENT OF THE AG REEM ENT

Amendments Permitted.

The Agreement and the rights and olligations of the District and of the Owners of the Bonds rrn.y be modified or amended at any time b,' a Suppemental Agreement pursuant to the affirrrn.tive vote at a meeting of Owners, or with the written consent without a meeting, of the Owners of at I east sixty percent ( 6CP/o) in aggregate principal amount of the Bands then Outstanding, exclusive of Bonds disqualified as pravided in Section 8.04. No such modification or amendment shal I ( i) extend the rrn.turi ty of any B ond or reduce the i nterest rate thereon, or otherwise alter or impair the obligation of the District to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation b,' the District of any pledge or lien upon the Special Taxes superiorto or on a parity with the pledge and lien created for the benefit of the Bonds (except as ctherwi se permitted b,' the Act, the laws of the State of California or the Agreement), or reduce the percentage of Bands required for the amendment hereof. Any such amendment rrn.y not modify any of the rights or obligations of the Fiscal Agent without its written consent.

The Agreement and the rights and oll igations of the District and of the Owners rrn.y also be modified or amended at any time b,' a Supplemental Agreement, without the consent of any Owners, only to the extent pernitted b,' law and only for any one or more of the follcwing purposes:

(A) to add to the cavenants and agreements of the District in the Agreement contained, cther ccwenants and agreements thereafter to be observed, or to Ii mit or surrender any right or pcwer herein reserved to or conferred upon the Di strict;

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

(C) to make such pravisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective prcwision contained in the Agreement, or in regard to questions arising under the Agreement, as the District may deem necessary or desirable and nct inconsistent with the Agreement, and which shall not materially adversely affect the rights of the Owners of the Bands;

(D) to make such additions, deletions or modifications as may be necessary ordesiralle to assure the exclusion from gross income, for purposes of federal i ncorne taxation, of interest on the 2017 Bonds; and

(E) in connection with the issuance of Parity Bonds under and pursuanttoSection 2.14.

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The Fiscal Agent may in its discretion, but shall not be obligated to, enter into any such Surril emental Agreement authorized lJy this Section which materially adversely affects the Fi seal Agent's cwn rights, duties or imnunities under this Fiscal Agent Agreement or otherwise with respect to the B ands or any agreements related thereto. The Fi seal A gent may request and shal I be fully prctected in relying upon, an opinion of Bond Counsel that any proposed Surrilemental Agreement complies with the appicalle requirements of this Section 8.01.

Owners' Meetings.

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

Procedure for Amendment with Written Consent of Owners.

The District and the Fiscal Agent may at any time ado[X a Surrilemental Agreement amending the prcwi si ons of the Bands or of the Agreement or any S urril emental Agreement, to the extentthat such amendment is perrritted lJy the first paragraph of Section 8.01, to take effect when and as pravided in this Section. The District orthe Fiscal Agent may obtain an opnion of Bond Counsel that such Suppemental Agreement complies with the pravisions of this Article VI 11, and the District and Fiscal Agent may rely conclusively upon such opnion. A copy of such Surrilemental Agreement, together with a request to Owners for their consent thereto, shall be mailed lJy first class mail, lJy the Fiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of such Suppemental Agreement and request shall not affect the validity of the Surrilemental Agreement when assented to as in this Section pravided.

Such Surrilemental Agreement shall not become effective unless there shal I be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (6CP/o) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as pravided in Section 8.04) and a nctice shall have been mailed as hereinafter in this Section prcwided. Each such consent shal I be effective only if accompanied lJy proof of cwnershi p of the Bands for which such consent is given, which proof shal I be such as is perrri tted lJy Section 9.04. Any such consent shal I be binding upon the Owner of the Bands giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) uni ess such consent is revoked in writing lJy the Owner giving such consent or a subsequent Owner b,' filing such revocation with the Fiscal Agent priortothe date when the notice hereinafter in this Section pravided for has been mailed.

After the Owners of the required percentage of Bands shal I have fi I ed their consents to the Surrilemental Agreement, the District shall mail a notice to the Owners in the manner herei nbefore pravided in this Section for the mailing of the Surrilemental Agreement, stating in substance that the Suppemental Agreement has been consented to lJy the Owners of the required percentage of Bonds and will be effective as pravided in this Section (but failure to mail copes of said nctice shall not affect the validity of the Surrilemental Agreement or consents thereto). Proof of the mai Ii ng of such notice shal I be fi I ed with the Fi seal Agent. A record, consisting of the papers required lJy this Section 8.03 to be filed with the Fi seal Agent, shal I be proof of the matters therein stated until the contrary is praved. The Surrilemental Agreement shall become effective upon the

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fi I i ng with the Fi seal A gent of the proof of mai I i ng of such notice, and the Supplemental Agreement shall ~ deemed conclusively anding (except as otherwise hereinal::xNe specifically pravided in this Article) upon the District and the Owners of all Bonds at the exp ration of sixty (60) days after such filing, except in the event of a final decree of a court of competentjurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty-day period.

Disqualified Bonds.

Bonds cwned or held for the account of the District, excepting any pension or retirement fund, shal I not ~ deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds pravided for in thi sArticle VI 11, and shal I not~ entitled to vote upon, consent to, or take any other action pravi ded for in this Article V 111, uni ess al I of the Outstanding Bonds are so cwned or held. Upon written request, the District shall specify to the Fi seal A gent in a certificate executed b,' an Authorized Officer those Bands disqualified pursuant to this Section 8.04. The Fiscal Agent may conclusively rely upon such certificate of the District.

Effect of Supplemental Agreement.

From and after the time any Supplemental Agreement ~comes effective pursuant to this Article V 111, the Agreement shal I ~ deemed to ~ modified and amended in accordance therewith, the respective rights, duties and obligations underthe Agreement of the Di strict and all Owners of Bands Outstanding shal I thereafter~ determined, exercised and enforced hereunder subject in al I respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shal I ~ deemed to ~ part of the terms and conditions of the Agreement for any and al I purposes.

Endorsement or Replacement of Bonds Issued After Amendments.

The District may deterni ne that Bonds issued and delivered afterthe effective date of any action taken as prCNi ded in this Article V 111 shal I ~ a nctati on, b,' endorsement or ctherwi se, in form apprCNed b,' the District, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for that purpose at the Principal Office of the Fiscal Agent or at such cther office as the District may select and designate for that purpose, a suitable notation shall ~ made on such Bond. The District may determine that new Bonds, so modified as in the opinion of the District is necessary to conform to such Owners' action, shal I ~ prepared, executed and delivered. I n that case, upon demmd of the Owner of any Bands then Outstanding, such new Bands shal I ~ exchanged at the Principal Office of the Fi seal Agent without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds.

Amendatory Endorsement of Bonds. The pravisionsof thisArticle VI 11 shall not prevent any Owner from accepting any amendment as to the particular Bands held b,' him, pravi ded that due notation thereof is rm.de on such Bands.

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MISCELLANEOUS

Benefits of Agreement Limited to Parties.

N cthi ng in the Agreement, expressed or implied, is intended to give to any person cther than the District, the Fiscal Agent and the Owners, any right, remedy, claim under or lJy reason of the Agreement. Any cavenants, sti pul ati ons, promises or agreements in the Agreement contained lJy and on behalf of the Di strict shal I be for the sole and exclusive benefit of the Owners and the Fiscal Agent.

Successor is Deemed Included in All References to Predecessor.

Whenever in the Agreement or any Supplemental Agreement either the District or the Fi seal Agent is named or referred to, such reference shal I be deemed to include the successors or assigns thereof, and al I the cavenants and agreements in the Agreement contained lJy or on behalf of the Di strict or the Fi seal Agent shal I bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

Discharge of Agreement.

The District shal I have the o[Xion to pay and discharge the entire indelXedness on all or any portion of the Bands Outstanding in any one or more of the fol I cwi ng ways:

(A) lJy well and truly paying or causing to be paid the principal of, and interest and any premium on, such Bands Outstanding, as and when the same become due and payable;

(B) lJy depositing with the Fiscal Agent, irrevocably, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts prcwided for in Sections 4.02 and 4.03 is fully sufficientto pay such Bonds Outstanding, including all principal, interest and redem[Xi on premi urns; or

(C) lJy irrevocably depositing with the Fiscal Agent or an escrcw agent, irrevocably, cash and Federal Securities defined in clause (i) of the definition thereof in such amount as determined lJy Bond Counsel or lJy an independent certified public accountant wi 11, together with the interest to accrue thereon and moneys then on deposit in the fund and accounts pravi ded for in Sections 4.02 and 4.03, be fully sufficient to pay and discharge the indelXedness on such Bonds ( i ncl udi ng al I pri nci pal , i nterest and redemption prerri urns) at or before thei r respective maturity dates.

If the District shall have taken any of the actions specified in (A), (B) or (C) abave, and if such Bands are to be redeemed prior to the maturity thereof nctice of such redem[Xion shal I have been given as in the Agreement pravided or pravision satisfactory to the Fiscal Agent shall have been made forthe giving of such nctice, then, atthe election of the District, and notwithstanding that any Bands shall not have been surrendered for payment, the pledge of the Special Taxes and other funds pravided for in the Agreement and all other obligations of the District under the Agreement with respect to such Bonds Outstanding shall cease and terminate. Notice of such election shall be filed with the Fiscal Agent. Notwithstanding the foregoing, the obi igations of the District to pay or cause to be paid to the Owners of the Bands not so surrendered and paid al I sums

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due thereon, to pay all amounts cwing to the Fiscal Agent pursuantto Section 7.05, and ctherwise 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 Bands from gross income for federal income tax purposes, shal I continue in any event.

Upon compliance O,' the District with the foregoing with respect to all Bonds Outstanding, any funds held O,' the Fiscal Agent after payment of all fees and expenses of the Fiscal Agent, which are not required for the purposes of the preceding paragraph, shall be paid avertothe District and any Special Taxes thereafter received O,' the District shall nct be remitted to the Fi seal Agent rut shall be retained O,' the District to be used for any purpose permitted under the Act.

Execution of Documents and Proof of Ownership by Owners.

Any request, declaration or other instrument which the Agreement may require or permit to be executed b,' Owners may be in one or more instruments of si ni I ar tenor, and shal I be executed b,' Owners in person or b,' their attorneys appointed in writing.

Except as otherwise herein expressly prcwided, the fact and date of the execution O,' any Owner or his attorney of such request, declaration or other instrument, or of such writing appoi nti ng such attorney, may be praved b,' the certi fi cate of any notary publ i c or other officer authorized to take ackncwl edgments of deeds to be recorded in the state in which he purports to act, thatthe person signing such request, declaration or cther instrument or writing ackncwledged to him the execution thereof, or O,' an affidavit of a witness of such execution, duly sworn to before such nctary public or other officer.

Except as otherwise herein expressly pravi ded, the cwnershi p of registered Bands and the amount, maturity, number and date of holding the same shall be praved O,' the registry books.

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

Waiver of Personal Liability.

No Boardmember, officer, agent or employee of the District shall be individually or personally Ii able for the payment of the principal of, or interest or any premium on, the Bands; rut nothing herein contained shal I relieve any such B oardmember, officer, agent or ernpl oyee from the performance of any official duty prcwided b,' law.

Partial Invalidity.

If any Section, paragraph, sentence, clause or phrase of the Agreement shal I for any reason be held ii legal or unenforceable, such hddi ng shal I not affectthevalidity of the remaining portions of the Agreement. The District hereO,' declares that it would have adopted the Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bands pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of the Agreement may be held i 11 egal, invalid or unenforceable.

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U ncl aimed M oneys.

Anything contained herein to the contrary notwithstanding, any moneys held 0\/ the Fi seal Agent in trust for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years afterthe date when the payments of such principal, interest and premium have beconne payable, if such moneys were held 0\/ the Fiscal Agent at such date, shall be repaid 0\/ the Fiscal Agent to the Di strict as its absolute property free from any trust, and the F i seal A gent shal I thereupon be rel eased and di scharged with respect thereto and the Bond Owners shal I look only to the Di strict forthe payment of the principal of, and interest and any premium on, such Bonds. Any right of any Ownerto look to the District for such payment shall survive only so long as required under appicable law.

Applicable Law.

The Agreement shall be governed 0\/ and enforced in accordance with the laws of the State of California app icable to contracts rm.de and performed in the State of California

Conflict with Act.

In the event of a conflict between any prcwision of the Agreement with any pravision of the Act as in effect on the Closing Date, the prcwision of the Act shall prevail cwerthe conflicting pravi si on of the Agreement.

Conclusive Evidence of Regularity.

Bands issued pursuant to the Agreement shal I constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance and the levy of the Special Taxes.

Payment on Business Day.

In any case where the date of the rraturity of interest or of principal (and prerri um, if any) of the Bands or the date fixed for redem[Xi on of any Bands or the date any action is to be taken pursuant to the Agreement is cther than a Business Day, the payment of interest or principal (and premium, if any) or the action need not be rm.de on such date but rray be rm.de on the next succeeding day which is a Business Day with the sanne force and effect as if rm.de on the date required and no interest shal I accrue for the period from and after such date.

Counter parts.

The Agreement rray be executed in counterparts, each of which shall be deemed an original.

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BOND INSURANCE PROVISIONS

Nctice and Other I nfcrmation to be given to BAM.

The District will pravide BAM with all notices and other infcrmation it is obligated to pravide (i) under its Continuing Disclosure Agreement and (ii) to the holders of 20171 nsured Bands or the Fi seal Agent under the Agreement.

The notice address of BAM is: Bui Id America Mutual Assurance Company, 200 Liberty Street, 27h Flocr, New York, NY 10281, Attention: Surveillance, Re: Policy No. 201780287, Telephone: (212) 235-2500, Telecopier: (212) 235-1542, Erm.ii: notices@buildamericacom. In each case in which ncti ce or other communication refers to an event of default cr a claim on the 20171 nsurance Pd icy, then a copy of such notice or other communication shal I also be sent to the attention of the General Counsel at the same address and at claims@buildamericacom or at Telecopier: (212) 235-5214 and shall be marked to indicate "URGENT MATERIAL ENCLOSED."

Defeasance.

At least three (3) Business Days priorto any defeasance with respect to the 20171 nsured Bonds, the District shall deliverto BAM draft copies of an escrcw agreement, an opinion of bond counsel regarding the validity and enforceability of the escrcw agreement and the defeasance of the I nsured Bands, a verification repm ( a "Verification Report") prepared b,' a nati anally recognized independent financial analyst or firm of certified pull i c accountants regarding the sufficiency of the escrcw fund. Such opinion and Verification Repm shall be address to BAM and shall be in form and substance satisfactory to BAM. In addition, the escrcw agreement shall pravide that:

(A) Any substitution of securities fdlcwing the execution and delivery of the escrcw agreement shal I require the delivery of a Verification R epm, an opinion of bond counsel that such substitution will nct adversely affect the exclusion (if interest on the 2017 Insured Bonds is excludable) from gross inccrne of the holders of the 2017 Insured Bonds of the interest on the Insured Bonds for federal income tax purposes and the pricr written consent of BAM, which consent wi 11 not be unreasonally withheld.

(B) The Districtwill nct exercise any pricr o[Xional redemption of 20171 nsured Bonds secured b,' the escrcw agreement or any other redem[X6i on other than mandatory sinking fund redem[Xions unless (i) the right to make any such redemption has been expressly reserved in the escrcw agreement and such reservati on has been di sci osed i n detai I i n the official statement for the refunding bonds, and (ii) as a condition to any such redemption there shal I be pravi ded to BAM a V eri fi cation Report as to the suffi ci ency of escrcw recei pts with out rei nvestment to meet the escrcw requirements rerrai ni ng fol I cwi ng any such redemption.

(C) The District shall not amend the escrcw agreement or enter into a forward purchase agreement or other agreement with respect to rights i n the escrcw with out the prior written consent of BAM.

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Fiscal Agent.

(A) BAM shal I receive prior written notice of any narrE change of the Fi seal Agent for the 20171 nsured Bands or the resignation or remoJal of the Fi seal Agent. Any Fi seal Agent must ~ (A) a national banking association that is supervised 0\/ the Office of the Comp:rdler of the Currency and has at least $250 million of assets, (B) a state-chartered commercial bank that is a mem~r of the Federal Reserve System and has at least $1 billion of assets, or (C) ctherwise apprCNed 0\/ BAM in writing.

(B) No removal, resignation ortermination of the Fiscal Agent shall take effect until a successor, acceptal:le to BAM, shall ~ qualified and appointed.

Amendments, Supplements and Consents.

BAM's prior written consent is required for all arrEndments and supplements to the Agreement, with the exceptions noted ~lcw. The District shall send copes of any such arrEndments or supplements to BAM and the rating agencies which have assigned a rating to the 20171 nsured Bands.

(A) Consent of BAM. Any arrEndments or supplements to the Agreement shal I require the prior written consent of BAM with the excep:ion of arrEndments or supplements.

(i) To cure any ambiguity or formal defect or omissions or to correct any inconsistent pravi si ons in the transaction documents or in any supplement thereto, or

(ii) To grant or confer upon the holders of the 2017 Insured Bonds any additional rights, remedies, po.,vers, authority or security that may lctvVfully ~ granted to or conferred upon the holders of the 2017 I nsured Bands, or

(iii) To add to the conditions, limitations and restrictions on the issuance of bonds or cther obligations under the pravisions of the Agreement, cther conditions, I imitations and restrictions thereafter to~ observed, or

(iv) To add to the cavenants and agreements of the District in the Agreement, other cCNenants and agreements thereafter to~ observed 0\/ the District or to surrender any right or pcwer therein reserved to or conferred upon the District,

(v) Toi ssue additional parity debt in accordance with the requirements set forth i n the Agreement.

(B) Consent of BAM in Addition to Bondholder Consent. Any arrEndment, supplement, modification to, or waiver of the Agreement that requires the consent of holders of the 20171 nsured Bonds or adversely affects the rights or interests of BAM shal I ~ suqject to the prior written consent of BAM.

( C) I nsolvency. Any reorganization or Ii qui dati on fl an with respect to the District must ~ accep:abl e to BAM . The Fi seal A gent and each avvner of the 201 71 nsured Bands hereO)I appoint BAM as their agent and attorney-in-fact with respect to the 20171 nsured Bonds and agree that

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BAM may at any tirre during the cmtinuation of any proceeding b,' or against the District or CFO under the United States Bankrup:cy Code or any cther applicable bankruptcy, insolvency, receivership, rehab litation or similar law (an" Insolvency Proceeding") direct all matters relating to such Insolvency Proceeding, including without Ii nitation, (A) all matters relating to any claim or enforcerrent proceeding in cmnection with an Insolvency Proceeding (a "Claim''), (B) the directim of any appeal of any order relating to any Claim, (C) the posting of any surety, supersedeas or performance bond pending any such appeal, and (D) the right to vote to accep: or reject any plan of adjustrrent. In additim, the Fiscal Agent and each cwner of the 20171 nsured Bmds delegate and assign to BAM, to the fullest extent permitted b,' law, the rights of the Fiscal Agent and each cwner of the 2017 Insured Bands with respect to the 2017 Insured Bands in the conduct of any Insolvency Proceeding, including, without Ii nitation, all rights of any party to an adversary proceeding or actim with respect to any court order issued in connection with any such Insolvency Proceeding.

(D) Cmtrol b,t BAM Upon Default. Anything in the Agreerrent to the contrary notwithstanding, upon the occurrence and continuance of a default or an event of default, BAM shal I be enti tied to control and direct the enforcerrent of al I rights and rerredi es granted to the holders of the 20171 nsured Bonds or the Fiscal Agent for the benefit of the holders of the 2017 I nsured Bands underthe Agreerrent. No default or event of default may be waived without BAM' s written consent.

(E) BAM as Owner. Upon the occurrence and continuance of a default or an event of default, BAM shall be deerred to be the sole avvner of the 2017 Insured Bonds for all purposes under the Agreerrent, including, without limitations, for purposes of exercising rerredies and apprcwi ng arnendrrents.

(F) Cmsent of BAM for Acceleration. BAM's prior written consent is required as a condition precedent to and in al I instances of acceleration of the amounts cwi ng on the 201 7 I nsured Bands.

(G) Grace Period for Payrrent Defaults. No grace period shall be permitted for payrrent defaults m the 20171 nsured Bonds. No grace period for acavenant default shall exceed 30 days without the prior written consent of BAM.

(H) Special Pravisions for Insurer Default. If an Insurer Default shall occur and be continuing, then, notwithstanding anything in paragraphs 10.04(A) through (G) alxNe to the contrary, (1) if at any tirre prior to or follavving an Insurer Default, BAM has made payrrent under the 2017 Insurance Pd icy, to the extent of such payrrent BAM shall be treated I ike any other holder of the 20171 nsured Bonds for al I purposes, including giving of consents, and (2) if BAM has not made any payrrent underthe 20171 nsurance Policy, BAM shall have no further cmsent rights unti I the particular Insurer Default is no longer continuing or BAM malkes a payrrent under the 201 7 I nsurance Policy, in which event, the foregd ng clause ( 1) shal I contrd. For purposes of this paragraph, "Insurer Default" rreans: (a) BAM has fai I ed to malke any payrrent underthe 2017 Insurance Pol icy when due and avvi ng in accordance with its terms; or (b) BAM shal I (i) voluntarily comrrence any proceeding or file any petition seeking relief underthe United States Bankruptcy Code or any cther Federal, state or foreign bankruptcy, insolvency or similar law, (ii) consentto the i nsti tuti on of or f ai I to contravert in a ti rrely and appropriate manner, any such proceeding or

A-46

the fi Ii ng of any such petition, (iii) awly fIT IT consent to the ap[X)i ntment of a receiver, trustee, custodian, sequestratIT or similar official for such party or fIT a substantial part of its property, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take action fIT the purrxise of effecting any of the foregoing; IT (c) any state IT federal agency or instrumentality shall ITderthe suspension of payments on the 20171 nsurance Policy IT shall obtain an order or grant apprCNal forthe rehab I itati on, Ii qui dati on, conservation or di ssol uti on of BAM (including without limitation under the Nevv York Insurance Law).

BAM As Third Party Beneficiary

BAM is recognized as and shall be deemed to be a third party beneficiary of the Agreement and may enforce the prCNisions of the Agreement as if it were a party thereto.

Payment Procedure Under the Pd icy

In the event that principal and/IT interest due on the 20171 nsured Bonds shall be paid O,' BAM pursuantto the 20171 nsurance Policy, the 20171 nsured Bonds shal I remain outstanding fIT al I purrxises, not be def eased or otherwise satisfied and not be considered paid O,' the District, the assignment and pl edge of the trust estate and al I cavenants, agreements and cther obi i gati ons of the District to the registered cwners shall continue to exist and shall run to the benefit of BAM, and BAM shall be subrogated to the rights of such registered cwners.

I n the event that on the second ( 2nd) busi ness day prior to any payment date on the 201 7 Insured Bonds, the Fiscal Agent has nct received sufficient moneys to pay all principal of and interest on the 201 7 I nsured Bands due on such payment date, the Fi seal Agent shal I immediately notify BAM IT its desi gnee on the same business day b,' telephone or electronic mai I, of the amount of the deficiency. If any deficiency is made up in whole or in part priIT to or on the payment date, the Fi seal A gent shal I so notify BAM IT its desi gnee.

In addition, if the Fiscal Agent has nctice that any hdder of the 20171 nsured Bonds has been required to di sgITge payments of principal of or interest on the 20171 nsured Bands pursuant to a final, non-appeal able ITder O,' a court of competentjuri sdiction that such payment constitutes an avoidal:le preference to such holderwithi n the meaning of any applicable bankrup:cy law, then the Fiscal Agent shall notify BAM or its designee of such fact b,' telephone or electronic mail, IT b,' avernight or other delivery service as to which a delivery receipt is signed O,' a person authorized to accept delivery on behalf of BAM.

The Fi seal Agent shall irrevocably be designated, appointed, directed and authITized to act as attorney--i n-fact for holders of the 201 7 I nsured Bands as fol I cws:

(A) If there is a deficiency in amounts required to pay interest and pr principal on the 2017 Insured Bonds, the Fiscal Agent shall (i) execute and deliverto BAM, in form satisfactory to BAM, an instrument appointing BAM as agent and attorney-in-fact for such holders of the 2017 Insured Bands in any I egal proceeding rel atedtothe payment and assignment to BAM of the claims fIT interest on the 20171 nsured Bands, (ii) receive as designee of the respective hdders (and nct as Fi seal Agent) in accordance with the tenIT of the 2017 Insurance Pd icy payment from BAM with respect to the claims fIT interest so assigned, (iii) segregate all such payments in a separate

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account (the "BAM Policy Payment Account") to only be used to make scheduled payments of p-i nci pal of and interest on the 20171 nsured Bands, and (iv) di sb.Jrse the same to such respective holders.

(B) If there is a deficiency in armunts required to pay principal of the 201 7 I nsured Bonds, the Fiscal Agent shall (i) execute and deliver to BAM, in form satisfactory to BAM, an instrument appointing BAM as agent and attorney in-fact for such holder of the 2017 Insured Bands in any I egal p-oceedi ng related to the payment of such principal and an assignment to BAM of the 2017 Insured Bands surrendered to BAM, (ii) receive as desi gnee of the respective holders (and not as Fiscal Agent) in accordance with the tenor of the 2017 Insurance Pd icy payment therefor from BAM, (iii) segregate all such payments in the BAM Policy PaymentAccounttoonly be used to make scheduled payments of principal of and interest on the 201 7 I nsured Bands, and (iv) disburse the same to such hdders.

The Fiscal Agent shall designate any portion of payment of principal on 2017 Insured Bonds paid b,' BAM, whether b,' virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of 2017 Insured Bonds registered to the then current holder, whether OTC or its nominee or otherwise, and shall issue a replacement 20171 nsured Bond to BAM, registered in the name directed b,' BAM, in a p-incipal amount equal to the amount of p-incipal so paid (without regard to authorized denominations); p-avided thatthe Fi seal Agent's failure to so designate any payment or issue any replacement 20171 nsured Bond shall have no effect on the amount of p-incipal or interest payable b,' the Di strict on any 20171 nsured Bond or the subrogation or assignment rights of BAM.

Payments with respect to claims for interest on and principal of 2017 Insured Bonds disbursed b,' the Fi seal Agent from proceeds of the 20171 nsurance Pol icy shal I nct be considered to discharge the obligation of the Di strict with respect to such 20171 nsured Bonds, and BAM shall become the cwner of such unpaid 201 7 I nsured Bands and claims for the interest in accordance with the tenor of the assignment made to it under the pravisions of the preceding paragraphs or ctherwise. The Agreement shall not be discharged or terminated unless all armunts due or to become due to BAM have been paid in full or duly pravided for. Irrespective of whether any such assignment is executed and delivered, the District and the Fi seal Agent agrees for the benefit of BAM that:

( C) They recognize that to the extent BAM makes payments directly or indirectly ( e.g., b,' paying through the Fiscal Agent), on account of principal of or interest on the 2017 Insured Bonds, BAM will be subrogated to the rights of such holders to receive the amount of such p-incipal and interest from the District, with interest thereon, as p-avided and solely from the sources stated in the Agreement and the 20171 nsured Bands; and

(D) They will accordingly pay to BAM the armunt of such principal and interest, with interest thereon as pravi ded in the Agreement and the 2017 Insured Bands, but only from the sources and in the manner pravided therein forthe payment of principal of and interest on the 2017 Insured Bands to holders, and will otherwise treat BAM as the cwner of such rights to the armunt of such pri nci pal and i nterest.

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Additional Payments

The District agrees unconditionally that it will pay or reimburse BAM on demand any and all reasonable charges, fees, costs, losses, liabilities and expenses that BAM may pay or incur, including, but not lirrited to, fees and expenses of BAM's agents, attorneys, accountants, consultants, app-ai sers and auditors and reasonable costs of i nvesti gati ons, in connection with the admi ni strati on (including waivers and consents, if any), enforcement, defense, exercise or p-eservation of any rights and remedies in respect of the Agreement ("Adrri ni strative Costs''). For purposes of the foregd ng, costs and expenses shal I include a reasonable al I ocati on of compensation and cwerhead attributable to the ti me of errpl 0yees of BAM spent in connection with the actions described in the p-eceding sentence. The District agrees that failure to pay any Administrative Costs on a timely basis will result in the accrual of interest on the unpaid amount at the Late Payment Rate, corrpounded serri--annually, from the date that payment is first due to BAM until the date BAM is paid in full.

Nctwithstanding anything herein to the contrary, the District agrees to pay to BAM (i) a sum equal to the tctal of all announts paid b,t BAM underthe 20171 nsurance Pd icy ("BAM Policy Payment"); and (ii) interest on such BAM Pd icy Payments from the date paid b,t BAM until payment thereof in full b,t the District, payable to BAM at the Late Payment Rate per annum (collectively, "BAM Reimbursement Amounts'') corrpounded semi-annually. Notwithstanding anything to the contrary, including without limitation the post default awlication of revenue p-avi si ons, BAM Reimbursement A mounts shal I be, and the District hereb,t cavenants and agrees that the BAM Reimbursement A mounts are, payable from and secured b,t a Ii en on and fl edge of the same revenues and cther col I ateral fl edged to the 2017 Insured Bands on a parity with delX service due on the 20171 nsured Bonds.

Debt Service Reserve Fund

The p-iorwritten consent of BAM shal I be a condition precedent to the derx:isit of any credit instrument prcwi ded in Ii eu of cash deposit into the Reserve Fund, if any, other than the 201 7 Reserve Policy. Amounts on derx:isit in the Reserve Fund shall be awlied sdely to the payment of debt service due on the 2017 Bands.

Exercise of Rights by BAM

The rights granted to BAM under the Agreement to request, consent to or direct any action are rights granted to BAM in consideration of its issuance of the 2017 Insurance Pdicy. Any exercise b,t BAM of such rights is merely an exercise of the BAM' s contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the holders of the 2017 Insured Bonds and such action does not evidence any position of BAM, affirmative or negative, as to whether the consent of the holders of the 201 71 nsured Bands or any other person is required in addition to the consent of BAM.

BAM shal I be enti tied to pay pri nci pal or i nterest on the 201 7 I nsured B ands that shal I become Due for Payment but shall be unpaid b,t reason of Nonpayment b,t the District (as such terms are defined in the 20171 nsurance Policy) and any announts due on the 20171 nsured Bands

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as a result of acceleration of the maturity thereof in accordance with the Agreement, whether or not BAM has received a claim upon the 20171 nsurance Policy.

No contract shal I be entered into or any action taken 0\/ which the rights of BAM or security for or source of payment of the 20171 nsured Bonds may be impaired or p-ejudiced in any material respect except upon obtaining the prior written consent of BAM.

If an event of default occurs under any agreement pursuanttowhich any Obligation of the District has been incurred or issued and that permits the hdder of such Obligation or trustee to accelerate the Obi i gati on or ctherwi se exercise rights or remedies that are adverse to the interest of the holders of the 20171 nsured Bonds or BAM, as BAM may determine in its sde discretion, then an event of default shal I be deemed to have occurred under the Agreement for which BAM or the Fi seal A gent, at the di recti on of BAM , shal I be enti ti e to exerci se al I avai I able remedies undertheAgreement, at lctvV and in equity. For purposes of the foregoing "Obligation" shall mean any bonds, I oans, certificates, i nstal I ment or I ease payments or si ni I ar obi i gati ons that are payable and pr secured on a parity or subordinate basis to the 20171 nsured Bands.

2017RESERVE POLICY

2017 Reserve Policy

With respect to the 2017 Reserve Policy, notwithstanding anything to the contrary set forth in the Agreement, the District and the Fi seal Agent agree to campy with the fol I cwi ng pravi si ons:

(A) The District shall repay any draws under the 2017 Reserve Policy and pay all related reasonable expenses incurred 0\/ BAM (the" BAM"). Interest shall accrue and be payable on such draws and expenses from the date of payment 0\/ the BAM atthe Late Payment Rate.

Repayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, the "Policy Costs'') shall commence in the first month follavving each draw, and each such monthly payment shall be in an amount at least equal to 1 /12 of the aggregate of Policy Costs related to such draw.

Amounts in respect of Policy Costs paid to the BAM shal I be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to the BAM on account of principal due, the cOJerage under the 2017 Reserve Policy will be increased 0\/ a like amount, subject to the terms of the 2017 Reserve Policy.

All cash and investments in the Reserve Fund established for the 2017 Bonds shall be transferred to the Bond Fund for payment of the debt service on the 201 7 Bands before any drawing may be made on the 2017 Reserve Policy or any cther Credit Facility in lieu of cash.

Payment of any Policy Cost shall be made p-ior to replenishment of any cash amounts. Draws on all Credit Facilities (including the 2017 Reserve Pdicy) on which there is available caverage shal I be made on a pro-rata basis ( calculated 0\/ reference to the caverage then avai I able thereunder) after appying all available cash and investments in the Reserve Fund. Payment of Policy Costs and reimbursement of amounts with respect to cther Credit Facilities shall be made on a prorata basis p-ior to repenishment of any cash drawn from the Reserve Fund. For the

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avoidance of doubt, "available caverage" means the caverage then available for disbursement pursuant to the terms of the app i cable alternative credit instrument without regard to the legal or financial ability orwilli ngness of the prcwider of such instrument to honor a claim or draw thereon or the failure of such prcwiderto honor any such claim or draw.

(B) Bonds.

DrctvVs under the 2017 Reserve Policy may only be used to make payments on 2017

(C) If the District shall fail to pay any Policy Costs in accordance with the requirements of paragraph (A) abcwe, then BAM shall be entitled to exercise any and all legal and equitable remedies available to it, including those pravided underthe Agreement otherthan (i) acceleration of the maturity of the Bonds, or (ii) remedies which would adversely affect avvners of the Bonds.

(D) The Agreement shall not be discharged until all Policy Costs avving to the BAM shall have been paid in full. The District's olligation to pay such annount shall expressly survive payment in ful I of the Bands.

(E) The Fiscal Agent shall ascertain the necessity for a claim upon the 2017 Reserve Policy in accordance with the Reserve Fund pravi si ons of the Agreement and pravi de notice to the BAM at least three business days prior to each date upon which interest or principal is due on the 2017 Bonds.

(F) The 2017 Reserve Pol icy shal I expire on the earlier of the date the 2017 Bands are no longer outstanding and the final maturity date of the 2017 Bonds.

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APPENDIX B

PROPOSED FORM OF OPINION OF BOND COUNSEL

________ , 2017

Casitas Municipal Water District 1055 Ventura Ave. Oak Vie.v, CA 93022

Ladies and Gentlemen:

$100,000 Casitas Municipal Water District

Community Facilities District No. 2013-1 (OJAI) 2017 Special Tax Bonds, Series A

$39,810,000 Casitas Municipal Water District

Community Facilities District No. 2013-1 (OJAI) 2017Special Tax Bonds, Series B

(Final Opinion)

We have acted as bond counsel to the Casitas Municipal Water District (the "Water District") and the Casitas Municipal Water District Community Facilities District No. 2013-1 (Ojai) (the "Community Facilities District") in connection with the issuance b,I the Water District on behalf of the Community Facilities District of its 2017 Special Tax Bonds, Series A and 2017 Special Tax Bonds, Series B (the "Bonds"), in the aggregate principal amount of $39,910,000 pursuant to the prcwisions of the Mello-Roos Community Facilities Act of 1982 (being Sections 53311 et seq. of the California Gcwernment Code) and a Fi seal A gent Agreement dated as of May 1 , 2017 ( the " Fi seal A gent Agreement"), b,I and between the Water District and U.S. Bank National Association, as Fiscal Agent (the" Fiscal Agent''). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Fiscal Agent Agreement.

I n such connection, we have re.ti e.ved the Fi seal A gent Agreement, the Tax Certificate of the Water District, dated the date hereof (the 'Tax Certificate''), opinions of counsel to the Water District, the Community Facilities District, and the Fiscal Agent, certificates of the Water District, the Community Facilities District, and the Fiscal Agent and others and such other documents, opinions and matters to the extent we deemed necessary to renderthe opinions set forth herein.

Certain agreements, requirements and procedures contai ned or referred to in the Fi seal A gent Agreement, the Tax Certificate and other rele..rant documents may be changed and certain actions (including, without linitation, defeasance of Bonds) may be taken or omitted under the circumstances and suqject to the terms and conditions set forth in such documents. No opinion is expressed herein as to the effect on the exclusion from gross income of interest on any Bond if any such change occurs or action is taken or onined upon the ad.tice or apprcwal of counsel other than ourselves.

B-1

The opinions expressed herein are based on an analysis of existing I.M's, regulations, rulings and court decisions and ccwer certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or onitted or events occurring after the date hereof. We have not undertaken to deterni ne, or to inform any person, whether any such acti ans are taken or omitted or events do occur or any other matters come to our attention after the date hereof. Our engagement with respect to the Bands has concludedwiththeir issuance, and we disclaim any obligation to update this opinion. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Water District and the Community Facilities District. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certi fi eel in the documents referred to i n the second paragraph hereof. Furthermore, we have assumed compliance with al I co.tenants and agreements contained in the Fiscal Agent Agreement and the Tax Certificate, including, without linitation, co.tenants and agreements compliance with which is necessary to assure that future actions, omissions or events will not cause the interest on the Bonds to be included in gross income for federal income tax purposes. In addition, we call attention to the fact that the rights and obligations under the Bonds, the Fiscal Agent Agreement and the Tax Certificate and their enforceability may be suqject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other I.M's relating to or affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases, and to the linitations on legal remedies against gcwernmental entities such as the Water District and the Community Facilities District in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum or waiver prcwisions contained in the f oregoi ng documents, nor do we express any opinion with respect to the pl ans, specifications, maps, reports or other engi neeri ng or fi nanci al detai Is of the proceedings, or upon the Rate and Method of Apportionment orthevalidity of the Special Taxes levied upon any individual parcel.

B ased on and suqj ect to the foregoing, and i n reliance thereon, as of the date hereof, we are of the follo.ving opinions:

1. The Bonds constitute valid and binding special obligations of the Water District for the Community Facilities District, payable solely from Special Tax Revenues and other assets pledged therefor underthe Fiscal Agent Agreement.

2. The Fiscal Agent Agreement has been duly executed and delivered by, and constitutes a valid and binding obligation of, the Water District on behalf of the Community Facilities District.

3. Interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. Such interest is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although we observe that it is included in acjjusted current earnings when calculating corporate alternative ninirnum taxable income. We express no opinion regarding other tax consequences related to the o.vnershi p or di sposi ti on of, or the accrual or receipt of interest on, the Bands.

Very truly yours,

B-2

APPENDIX C

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

C-1

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RATE AND METH OD OF APPORTIONMENT FOR CASITAS MUNICIPAL WATER DISTRICT

COMMUNITY FACILITIES DISTRICT NO. 2013-1 (OJAI)

A Special Tax shall ~ levied mall Assessor's Parcels of Taxalle Property in Casitas Municipal Water District ("CMW D") Community Facilities Di strict No. 2013-1 (Ojai) ("CFO No. 2013-1") and collected each Fiscal Year, commencing in Fiscal Year 2013-14, in an amount deternined through the awlicatim of this Rate and Method of Aprx:irtionment as descri~d ~lcw. All of the real property in CFO No. 2013-1, unless exempted b,' law orb,' the pr0.tisims hereof, shall ~ taxed for the purrxises, to the extent and in the manner herein prOJi ded.

A. DEFINITIONS

The terms hereinafter set forth have the fd I ewi ng meanings:

"Acreage" means the land area of an Assessor's Parcel as shewn on an Assessor's Parcel Map, or if the I and area is not shewn on an Assessor' s Parcel Map, the I and area shewn on the applicable final map, parcel map, condominium plan, or other map or plan recorded with the County orthe land area calculated to the reasmable satisfactim of the CFO Adninistrator using the boundaries set forth on such map or pan. The parcel square footage of an Assessor's Parcel is equal to the Acreage of such parcel multiplied b,' 43,560 (the" Parcel Square Footage").

"Act" means the Mello-Roos Community Facilities Act of 1982, ~ing Chapter 2.5, Part 1, Division 2 of Title 5 of the California GOJernment Code.

"Administrative Expenses'' means the actual or reasonably estimated costs directly related to the adninistration of CFO No. 2013-1, including but not linited to: the costs of computing the Special Taxes and preparing the annual Special Tax collectim schedules (whether b,' CMWD or designee thereof or both); the costs of collecting the Special Taxes (whether b,' CMWD or ctherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it underthe Indenture; the costs to CMWD, CFO No. 2013-1 or any designee thereof of complying with arbitrage rebate requirements; the costs to CMWD, CFO No. 2013-1 or any designee thereof of complying with disclosure requirements of CMWD, CFO No. 2013-1 or obligated persms associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to pullic inquiries regarding the Special Taxes; the costs of CMWD, CFO No. 2013-1 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrew account; and CMWD's annual administration fees and third party expenses. Adninistrative Expenses shall also include amounts estimated b,' CMWD or advanced b,' CMWD or CFO No. 2013-1 for any cther adninistrative purposes of CFO No. 2013-1, including attorney's fees and other costs related to commencing and pursuing to compl eti m any foreclosure of delinquent Special Taxes.

"Assessor's Parcel" means a lct or parcel to which an Assessor's parcel nu~r is assigned as determined from an Assessor Parcel Map or the awl i cable assessment rd I.

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J anuary 29, 2013 Page 1

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

"Authorized Facilities'' rrEans those facilities eligible to be funded by CFO No. 2013-1, as set forth in the Resolution of Intention to estallish CFO No. 2013-1 as adopted by CMWD.

"Bond Issue" means one series of CFO No. 2013-1 Bonds.

"Certificate of Occupancy" rrEans a certificate issued by the City or the County that authorizes the actual occupancy of Developed Property by a resident(s) or a business(es).

"CFO Administrator" rrEans the Person designated by CFO No. 2013-1 to administer the Special Tax according to this RMA.

"CF D No. 2013-1" means CMWD Community Facilities District No. 2013-1 (Ojai).

"CFO No. 2013-1 Bonds'' rrEansany bondsorotherdebt(asdefined in Section 53317(d) of the Act), whether in one or more series, issued or incurred by CMWD for CFO No. 2013-1.

"City" rrEans the City of Ojai.

"Commercial Property" rrEans all Assessor's Parcels of Non-Residential Property excluding Industrial Property.

"Condominium Unit" means (1) a residential condominium as described in Civil Code Section 1351(f) and (2) any residential dwelling that is not a Single Fani ly Detached Unit or a dwelling unit located on Multifamily Attached Property, as determined by the CFO Adrrinistrator.

"County" rrEans the County of Ventura

"Developed Property" rrEans, for each Fiscal Year, all Taxable Property, for which a building permit was issued on or before May 1 of the Fi seal Year preceding the Fi seal Year for which the Special Taxes are being levied.

"Fiscal Year" rrEans the period startingJ uly 1 and ending on the fdlcwingJ une 30.

"Indenture" rrEans the indenture, fiscal agent agreerrEnt, resolution or cther instrurrEnt pursuant to which CFO No. 2013-1 Bonds are issued, as modified, amended andpr suppl errEnted from ti rrE to ti rrE, and any i nstrurrEnt rep acing or supp errEnti ng the same.

"Industrial Property" means all Assessor's Parcels of Developed Property for which a building permit(s) was issued for construction of a non-residential structure(s) which is primarily used for: manufacturing, procession, fabricating, assembly, refining, repairing, packaging, or treatrrEnt of goods, material or produce; research and development; andpr warehousing and wholesale di stri buti on of goods, materi al , or produce.

Casitas Municipal Water District Community Facilities District No. 2013-1 (Ojai)

J anuary 29, 2013 Page2

"Land Use Class'' rreans any of the classes listed in Table 1, belavv.

"Maximum Special Tax'' rreans the rmximum Special Tax, determined in accordance with Section C belcw, that can be levied in any Fiscal Year on any Assessor's Parcel of Taxal:le Property.

"Multifamily Attached Property" rreans an Assessor's Parcel on which is located a structure or structures with multiple residential d,velling units, all of which are offered for rent and are nct available for sale to individual avvners.

"Non-Residential Floor Area" means the total building square footage of the non-residential building(s) located on an Assessor's Parcel, rreasured from outside wall to outside wall, nct including space devoted to stai rwel Is, baserrent storage, required corridors, public restrooms, elevator shafts, Ii ght courts, vehicle parking and areas incident thereto, rrechani cal equi prrent incidental to the operation of such bui I ding, and ccwered public pedestrian ci rcul ati on areas, including atriums, lobbies, pazas, patios, decks, arcades and similar areas, exce[X such public ci rcul ati on areas or portions thereof that are used solely for comrrerci al purposes. The determination of Non-Residential Floor Area shall be made b,' reference to the building permit(s) issued for such Assessor's Parcel and/or to the appropriate records kept b,' the City's Bui I ding Division orthe County's Building and Safety Division, as reasonal:ly deterrri ned b,' the CFO Administrator.

"Non-Residential Property" means all Assessor's Parcels of Developed Property for which a building perrrit permitting the construction thereon of one or more non-residential facilities has been issued b,' the City or the County.

"Outstanding Bonds'' rreans all CFO No. 2013-1 Bonds which are outstanding under an Indenture.

"Property Owner Association Property" rreans, for each Fiscal Year, (i) any property within the boundaries of CF D No. 2013-1 that was cwned b,' a property avvner association, including any master or sub-association, as of January 1 of the prior Fiscal Year, (ii) any property located in a Final Subdivision that was recorded as of the May 1 preceding the Fiscal Year in which the Special Tax is being levied and which, as determined from such Final Subdivision, is or will be open space, a common area recreation facility, or a private street, or (iii) any property which, as of the May 1 preceding the Fiscal Year for which the Special Tax is being levied, has been conveyed, irrevocably dedicated, or irrevocal:ly offered to a property cwner's association, including any master or sub-association, prcwided such conveyance, dedication, or offer is submitted to the CFO Adrri ni strator b,' May 1 preceding the Fiscal Year for which the Special Tax is being levied.

"Proportionately" rreans, for Developed Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor's Parcels of Developed Property.

"Public Property" rreans property within the boundaries of CFO No. 2013-1 that is (i) cwned b,', or irrevocably offered or dedicated to, the federal gavernrrent, the State, the County, the

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City, CMWD, IT any local government IT other p.,1blic agency, pravided that any property leased b,' a p.,1blic agency to a private entity and subject to taxation under Section 53340.1 of the Act shall not be considered Public Property and shall be taxed and classified according to its actual use; or (ii) encumbered b,' a p.,1llic utility easement rnaking impractical its use for any purpose cther than that set forth in the easement.

"Rate and Method of Apportionment" or "RMA" means this Rate and Method of Apportionment of Special Tax.

"Residential Property" means all Assesscr's Parcels of Developed Property for which a building perrrit perrritting the construction thereon of one IT rnore residential clvvelling units has been issued b,' the City IT the County. Residential Property includes Single Family Detached Units, Condorri ni urn Units and units located on M ulti-f arnily Attached Property.

"Single Family Detached Unit" means an individual residential clvvelling unit that does nct share a cornrnon wal I with another residential clvvelli ng unit.

"Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property within CFO No. 2013-1 to fund the Special Tax Requirement.

"Special Tax Requirement" means that amount required in any Fiscal Year, commencing in Fiscal Year 2013-2014, fIT CFO No. 2013-1 to: (i) pay debt service on all Outstanding Bonds due in the calendar year commencing in such Fi seal Year; (ii) pay periodic costs with respect to the CFO No. 2013-1 Bands, including but not Ii rrited to, costs of credit enhancement and federal arbitrage rebate payments due in the calendar year cornmenci ng in such Fi seal Year; (iii) pay Administrative Expenses payable IT expected to be payable in the calendar year commencing in such Fi seal Year; ( iv) pay any amounts required to estall i sh IT replenish any reserve funds for al I Outstanding Bonds; (v) replace revenue that CFO No. 2013-1 reasonably expects nct to receive due to anticipated Special Tax delinquencies, if and to the extent deemed necessary and supported b,' a written explanation and calculation; (vi) pay any litigation expenses and costs CMWD is required to pay to Gd den State Water Company pursuant to California Code of Civil Procedure Section 1268.610 et seq. if CMWD files errinent domain to acquire Gdden State's Ojai water uti I ity and the erni nent dornai n proceeding is abandoned or di srri ssed for any reason; (vii) pay directly fIT the acquisition or construction of Authorized Facilities; less (viii) a credit fIT funds avai lalle to reduce the annual Special Tax levy.

"State" means the State of CalifITnia

"Taxable Property" means all of the Assesscr's Parcels of Developed Property within the boundaries of CFO No. 2013-1 which are not exempt frorn the Special Tax pursuant to applicalle law or Section E belavv.

"Trustee" means the trustee or fi seal agent under the I ndenture.

"Undeveloped Property" means property that is not Developed Property, Property Owner Association Property or Pullie Property.

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J anuary 29, 2013 Page4

B. ASSIGNMENT TO LAND USE CATE GORI ES

Each Fiscal Year, all Taxable Property within CFO No. 2013-1 shall be classified as Devel~d Property, Undeveloped Property, Property Owner Association Property or Public Property, and shall be subject to Special Taxes in accordance with this Rate and Method of A[lX)rtionment determined pursuant to Sections C and D belcw.

C. MAXIMUM SPECIAL TAX RATE

Develo~ Property shall be assigned to Land Use Classes 1 through 8 as listed in Table 1 belavv.

(1). Maximum Special Tax

The Maximum Special Tax for each Assessor's Parcel determined to be Developed Property shall be based on the Land Use Class in Table 1 within which such Assessor's Parcel is classified. As indicated in the table, the Maximum Special Tax may be i ncreased after the CF D sel I s an additional B ond I ssue.

TABLE 1

Maximum Special Tax for Developed Property within Community Facilities District No. 2013-1 (Ojai)

Fi seal Year 2013-2014

Maximum Special Tax

Land Use Parcel Square Class Description Footage

Single Farrily 43,560 Sq. Ft. 1 Detached Unit or greater

Single Farrily 22,000 to less than 2 Detached Unit 43,560 Sq. Ft.

Single Farrily 1 0, 000 to I ess than 3 Detached Unit 22,000 Sq. Ft.

Single Farrily Less than 4 Detached Unit 10,000 Sq. Ft.

Condominium 5 Unit NA

Multifamily Attached

6 Pr~rty NA

Casitas Municipal Water District Comm.mity Facilities District No. 2013-1 (Ojai)

Prior to 2nd Bond Issue

$345 per unit

$203 per unit

$122 per unit

$79 per unit

$67 per unit

$57 per unit

After 2nd Bond Issue

$2,093 per unit

$1,235 per unit

$741 per unit

$480 per unit

$407 per unit

$349 per unit

J anuary 29, 2013 Pages

Maximum Special Tax

Land Use Parcel Square Prier to After Class Description Footag:! 2nd Bond Issue 2nd Bond Issue

$0.050 per $0. 303 per square square foot of foot of Non-

Commercial N on--R esi denti al Residential 7 Property NA Floor Area Floor Area

$0.026 per $0. 1 5 9 per square square foot of foot of Non-

Industrial N on--R esi denti al Residential 8 Property NA Floor Area Floor Area

(2). lncreaseintheMaximumSpecial Tax

The Fiscal Year 2013-14 Maximum Special Tax, identified in Table 1 alxNe, shall increase annually, commencing on July 1, 2014 and on July 1 of each Fiscal Year thereafter, 0\/ an annunt equal to two percent (2%) of the amount in effect for the previous Fi seal Year.

(3). Multi de Land Use Classes

In some instances an Assessor's Parcel of Devel oped Property may contain more than one Land Use Class. The Maximum Special Tax levied on an Assessor's Parcel in such case shall be the sum of the Maximum Special Tax for all Land Use Classes located on that Assesscr' s Parcel. The CFO Administrator's allocation to each type of property shall be final in the absence of manifest error.

D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX

Commencing with Fiscal Year 2013-14 and for each fdlavving Fiscal Year, the CFO Administrator shall deterrrine the Special Tax Requirement and shall pravide for the levy the Special Tax as follavvs:

The Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed Property at up to lOCP/4 of the Maximum Special Tax in order to satisfy the Special Tax Requirement.

Nctwithstanding the alxNe, under no circumstances will the Special Tax levied in any Fiscal Year against any Assessor's Parcel of R esi denti al Property fer which a Certificate of Occupancy has been issued be increased 0\/ more than ten percent alxNe the annunt that would have been levied in that Fiscal Year as a consequence of delinquency er default 0\/ the cwner(s) of any other Assessor's Parcel(s) within CFO No. 2013-1.

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J anuary 29, 2013 Page6

E. EXEMPTIONS

No Special Tax shall be levied m Pullie Property andftx Property Owner Associatim Property in CFO No. 2013-1. Havvever, should an Assessor's Parcel no longer be classified as Pullie Property or Property Owner Association Property, it shal I become suqject to the Special Tax.

F. MANNER OF COLLECTION

The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; prCNided, havvever, that CMWD may directly bill the Special Tax, andpr may cdlect Special Taxes at a differenttime or in a different manner if necessary to meet its financial obligations, and may cavenantto foreclose and may actually foreclose m delinquent Assessor's Parcels.

G. APPEALSANDINTERPRETATIONS

Any landavvner or resident who feels that the amount of the Special Tax levied m hisfr]er Assessor's Parcel is in error may subrrit a written appeal to the CFO Administrator, pravided that the appellant is current in hisfr]er payment of Special Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The CFO Administrator shall review the appeal and if the CFO Adrrinistrator concurs, the amount of the Special Tax levied shall be appropriately modi fi eel through an adjustment to the Special Tax I evy in the fol I cwi ng Fi seal Year. No refunds shal I be given in the current Fi seal Year.

The CFO Administrator may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity andpr making determinatims relative to the annual administratim of the Special Tax and any landavvner or resident appeals. Any decision of the CFO Administrator shal I be fi nal and b ndi ng as to al I persons.

H. PREPAYMENT OF THE SPECIAL TAX

The fdlavving additimal definitims appy to this Section H:

"CFO Public Facilities Costs'' means either $42,250,000 in 2013 dollars, which shall increase b,' the Construction Inflation Index onJ uly 1, 2014, and m eachJ uly 1 thereafter, or such I ewer number as (i) shall be determined b,' the CFO Adrrinistrator as sufficient to prCNide funding for all of the Authorized Facilities, or (ii) shall be determined b,' CMWD concurrently with a cavenantthat it will not issue any more CFO No. 2013-1 Bonds (exce[X refunding bonds) to be supported b,' the Special Tax levy under this Rate and Method of Apportimment as described in Section D herein.

"Construction I nflatim Index" means the annual percentage change in the Engineering News Record Building Cost Index for the City of Los Angeles, measured as of the mmth of December in the calendar year which ends in the previous Fi seal Year. I n the event this index ceases to be published, the Constructim Inflation Index shall be ancther index as deterrrined b,' the CFO

Casitas Municipal Water District Community Facilities District No. 2013-1 (Ojai)

J anuary 29, 2013 Pagel

Administratcr that is reasmally ccrnparalle to the Engineering Ne.vs Record Building Cost Index forthe City of Los Angeles.

"Future Facilities Costs'' means the CFO Public Facilities Costs minus (i) costs of Authorized Facilities previously paid frrrn the lmprCNement Fund, (ii) moneys currently on deposit in the lrnpravement Fund available to pay costs of Authorized Facilities, (iii) moneys currently on deposit in an escrcw fund that are expected to be avai I all e to finance the cost of Authorized Facilities, and (iv) the amount the CFO Administrator reasonally expects to derive from the reinvestment of these funds.

"I mpravement Fund" means a fund or account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct Authcrized Facilities.

"Previously Issued Bonds'' means, for any Fiscal Year, all Outstanding Bonds that are still outstanding under the I ndenture after the principal payment date fol I cwi ng the current Fi seal Year.

1. Prepayment in Full

The obligation of the Assesscr's Parcel to pay the Special Tax may be fully prepaid and permanently satisfied as described herein, prCNided that a prepayment may be made only for Assessor's Parcels of Developed Property, or an Assessor's Parcel of Undeveloped Property frr which a bui I ding perni t has been issued, and only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An cwner of an Assessor's Parcel intending to prepay the Special Tax obligation shall prCNide the CFO Administratcr with written notice of intent to prepay. Within 30 days of receipt of such written nctice, the CFO Administratcr shall nctify such cwner of the prepayment amount frr such Assessor's Parcel. The CFO Administratcr may charge such cwner a reasmable fee frr praviding this service. If there are Outstanding Bands, prepayment must be made not I ess than 30 days prior to the next occurring date that notice of redemption of CFO No. 2013-1 Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the I ndenture.

The Special Tax Prepayment Amount (defined belcw) shall be calculated as summarized belcw (capitalized terms as defined belcw):

Bond Redemp:ion Amount pus Redemption Premium pus Future Facilities Amount fl us Defeasance A mount fl us Prepayment Fees and Expenses less Reserve Fund Credit I ess Capital i zed I nterest Credit Total: equals Special Tax Prepayment Amount

As of the proposed date of prepayment, the Special Tax Prepayment Amount shal I be calculated asfdlcws:

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J anuary 29, 2013 Pages

1. Cmfirm that no Special Tax delinquencies appy to such Assessor's Parcel.

2. For Assessor's Parcels of Developed Property, corrpute the Maximum Special Tax. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Maxi mum Special Tax for that Assessor's Parcel as though it were al ready designated as Developed Property, based upon the building permit which has already been issued for such Assessor's Parcel.

3. Divide the Maximum Special Tax corrputed pursuant to paragraph 2 b,' the total estimated Maximum Special Tax levy for the entire CFO No. 2013-1 based on the Developed Property Special Tax which could be levied in the current Fiscal Year on all Developed Property CFO No. 2013-1, excluding any Assessor's Parcels which have been prepaid.

4. Multi py the quotient computed pursuant to paragraph 3 b,' the Previously Issued B mds to compute the amount of Previously Issued Bonds to be retired and prepaid (the "Bmd Redemption Amount").

5. Multipy the Bmd Redemptim Amount corrputed pursuant to paragraph 4 b,' the applicable redemptim premium (e.g., the redemptim price-100'/o), if any, on the Previously Issued Bonds to be redeemed (the "Redemp:ion Premium').

6. Compute the current Future Faci Ii ties Costs.

7. Multipy the quotient computed pursuant to paragraph 3 b,' the amount determined pursuant to paragraph 6 to corrpute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount").

8. Compute the annunt needed to pay interest on the Bond Redemptim Amount from the bond principal payment date fol I cwi ng the current Fi seal Year unti I the earliest redemp:im date for the Previously Issued Bonds. Nctwithstanding the aixNe, if the Previously Issued Bonds may be redeemed in the current Fiscal Year, but after the date of prepayment, the amount needed to pay the interest under this step shal I equal zero.

9. Deterrrine the Special Tax levied on the Assessor's Parcel in the current Fiscal Year which has nct yet been paid.

10. Corrpute the minimum amount the CFO Administrator reasmably expects to derive from the reinvestment of the Special Tax Prepayment Amount less the Future Facilities Amount and the Prepayment Fees and Expenses (defined belavv) from the date of prepayment until the redemptim date for the Previously Issued Bonds to be redeemed with the prepayment.

11. Add the annunts computed pursuant to paragraphs 8 and 9 and subtract the annunt computed pursuant to paragraph 1 O (the" Defeasance Amount").

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12. The prepayrrEnt fees and expenses of CFO No. 2013-1 are as calculated 0\/ the CFO Administrator and include the costs of computation of the prepayrrEnt, the costs to invest the prepayrrEnt proceeds, the costs of redeeming CFO No. 2013-1 Bonds, and the costs of recording any notices to evidence the prepayrrEnt and the redemption (the "PrepayrrEnt Fees and Expenses'').

13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected reduction in the reserve requirerrEnt (as defined in the Indenture), if any, associated with the redemption of Previously Issued Bonds as a result of the prepayrrEnt, or (b) the amount derived 0\/ subtracting the mw reserve requi rerrEnt (as defined in the Indenture) in effect after the redemption of Previously Issued Bonds as a result of the prepayrrEnt from the balance in the reserve fund on the prepayrrEnt date, but in no event shall such amount be less than zero. No Reserve Fund Credit shall be granted if the amount then on deposit in the reserve fund for the Previously I ssued Bands is bel ON the reserve requi rerrEnt ( as defined in the I ndenture).

14. If any captalized interest for the Previously Issued Bonds is projected to rerrain unexpended as of the date i mrrEdi ately fol I avvi ng the principal payrrEnt fol I avvi ng the current Fiscal Year, a captalized interest credit shall be calculated 0\/ multipying the quctient computed pursuant to paragraph 3 0\/ the expected balance in the capitalized interest fund or account on such date (the "Captal ized Interest Credit").

15. The Special Tax prepayrrEnt is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, I ess the amounts computed pursuant to paragraphs 13 and 14 (the "Special Tax PrepayrrEnt Amount").

From the Special Tax PrepayrrEnt Amount, the amounts computed pursuant to paragraphs 4, 5, 11, 13 and 14 shal I be deposited into the appropriate fund as established under the I ndenture and be used to retire CFO No. 2013-1 Bonds or make debt service payrrEnts. The amount computed pursuant to paragraph 7 shall be deposited into the I mpraverrEnt Fund. The amount computed pursuantto paragraph 12 shall be retained 0\/ CMWO.

Upon confirmation of the payrrEnt of the current Fiscal Year's Special Tax levy as determined under paragraph 9 (abave), the CFO Administrator shall remave the current Fiscal Year's Special Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the CFO Administrator shall cause a suitable nctice to be recorded in compliance with the Act, to indicate the prepayrrEnt of the Special Tax and the rel ease of the S peci al Tax I i en on such Assessor' s Parcel , and the obi i gati on of such Assessor' s Parcel to pay the Special Tax shal I cease.

Nctwithstanding the foregoing, no Special Tax prepayrrEnt shall be allavved unless, at the tirrE of such proposed prepayrrEnt, the amount of Maximum Special Tax that may be levied on Taxable Property within CFO No. 2013-1 (after excluding the property exempted under Section E herein) after the proposed prepayrrEnt is at least equal to the sum of (i) the Adrrinistrative Expenses, as defined in Section A abave, and (ii) 1.10 tirrEs the debt service necessary to support the rerrai ni ng Outstanding Bands in each corresponding Fi seal Year.

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J anuary 29, 2013 Page 10

2. Prepayment in Part

The obligation of the Assessor's Parcel to pay the Special Tax may be partially prepaid as described herein, pravided that a partial prepayment may be made only for Assessor's Parcels of Developed Property, or an Assessor's Parcel of Undeveloped Property for which a b.Jilding permit has been i ssued, and only if there are no del i nquent Special Taxes with respect to such Assessor's Parcel at the time of partial prepayment. The amount of the prepayment shall be calculated as in Section H .1 ; exce[X that a partial prepayment shal I be calculated according to the fdlavving formula:

PP =[(PE - PFE) x D] +PFE

These terms have the fol I cwi ng meaning:

PP = the partial prepayment. PE = the Special Tax Prepayment Amount calculated according to Section H. l. D = the percentage, expressed as a decimal, b,' which the avvner of the Assessor's Parcel is

partially prepaying the Special Tax. PFE = the Prepayment Fees and Expenses calculated according to Section H.1.

The avvner of any Assessor's Parcel who desires such prepayment shall notify the CFO A dmi ni strator of such cwner' s intent to partially prepay the Special Tax and the percentage b,' which the Special Tax shall be prepaid. The CFO Administrator shall pr0.tide the avvnerwith a statement of the amount required for the partial prepayment of the Special Tax for hisfr]er Assessor's Parcel within 30 days of the request and may charge a reasonable fee for pr0.tiding this service. With respect to any Assessor's Parcel that is partially prepaid, the CFO Administrator shall (i) distribute or cause to be distrib.Jted the funds remitted to it according to Section H.1, and (ii) indicate in the records of CFO No. 2013-1 that there has been a partial prepayment of the S peci al Tax and that a portion of the Special Tax with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - D) of the remaining Maximum Special Tax, shall continue to be levied on such Assessor's Parcel pursuant to Section D herein.

I. TERM OF SPECIAL TAX

The Special Tax shall be levied for a period nct to exceed forty years commencing with Fiscal Year 2013-14, pravi ded havvever that the Special Tax wi 11 cease to be I evi ed in an earlier Fi seal Year if the CFO Administrator has determined that all required interest and principal payments on the CFO No. 2013-1 Bonds have been paid.

Casitas Municipal Water District Comm.mity Facilities District No. 2013-1 (Ojai)

J anuary 29, 2013 Page 11

[THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX D

ECONOMIC PROFILE FOR THE COUNTY OF VENTURA

The follc:M,ing informttion relating to the County of Ventura is supplied solely for the purposes of background informttion. The County is not obligated in any mtnner to pay principal of or interest on the Bonds or to cure any delinquency or default on the Bonds. The Bonds are payable solely from the sources described in the Official Statement.

General Information

Ventura County ccwers approximately 2,208 square miles. It is bounded on the northwest by Santa Barbara County, on the north by Kern County, on the east and south by Los Angeles County, and on the southwest by 42 ni I es of Pacific Ocean shore Ii ne.

The southeastern sector of the County has sho.vn strong grONth in population, commercial and industrial activities. The County's historical economic strength in agriculture, food processing and ni neral production has been supplemented i n the past decade by i ncreasi ng proni nence of fi nanci al services, smal I mtnufacturing businesses, electronics industry and the military's presence, as well as other diversified industries.

General Demographic Information

The follo.ving table prcwides a comparison of population grONth for County of Ventura and the State of California between 2012 and 2016.

January 1 Year 2012 2013 2014 2015 2016

% I ncrease B etween 2012 -2016

TABLE NO. D-1 CHANGE IN POPULATION

COUNTY OF VENTURA AND STATE OF CALIFORNIA 2012- 2016

COUNTY OF VENTURA STATE OF CALIFORNIA Percentage Percentage

Population Change Population Change 834,253 37,881,357 840,867 0.8!6 38,239,207 0.9!6 846,705 0.7!6 38,567,459 0.9!6 850,491 0.4% 38,907,642 0.9!6 856,508 0.7!6 39,255,883 0.9!6

2.7!6 3.6!6

Source: State of California, Departrrent of Finance, "E-4 Population Estim1tes for Cities, Counties and the State, 2011-2015, with 2010 Census Benchm1rk," Sacrarrento, California, May 2016.

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Major Employers

E mplOy'er Name

Air National Guard

Arrgen Inc.

Anthem B I ue Cross

Baxter Healthcare

BoskCNich Farms Inc.

Cal Atlantic Homes

City of Sim Valley

Coleman Welding

Community Memorial Health Syst.

Dole Berry Co.

Haas Automation I nc.

HarborFreightToolsUSA Inc.

I Yogi Technical Support

Los Robles Hospital & Med Ctr.

Moorpark College

Nancy Reagan B reast Center

Naval Air Warfare Ctr. Weapons

Naval Construction Battalion

Ojai Valley Inn& Spa

Oxnard College

Sheriff's Department-:Jails

Sim Valley City Manager

Sim Valley Hospital

StJ ohn' s Regional Medical Ctr.

Ventura County Offices of Education

TABLE NO. D-1 COUNTY OF VENTURA

MAJOR EMPLOYERS

Location

Port Hueneme

Thousand Oaks

Westlake Village

Westlake Village

Oxnard

Westlake Village

Sim Valley

Ventura

Ventura

Oxnard

Oxnard

Camarillo

Oak Park

Thousand Oaks

Moorpark

Sim Valley

Point Mugu Nawc

Point Mugu Nawc

Ojai

Oxnard

Ventura

Sim Valley

Sim Valley

Oxnard

Camarillo

Industry

State G CNernment-Nati onal Security

Biological Specimens-Manufacturers

Insurance

Physicians& Surgeons Equip& Supls.-Mfrs.

Fruits& Vegetables-Gro.vers& Shippers

Home Builders

GCNernmentOffices-City, Village& Twp.

Steel-Structural (Mfrs.)

Hospitals

Fruits & Vegetables-G ro.vers & Shippers

Ma chi nery-M anufacturers

Tools-New & Used

Computers-Service & Repair

Hospitals

Schools-Universities & Colleges Academe

Diagnostic Imaging Centers

Federal GCNernment-National Security

GCNernment Offices-Us

Inns

Schools-Universities & Colleges Academe

GCNernmentOffices-County

GCNernmentOffices-City, Village& Twp.

Hospitals

Hospitals

Schools

Source: California State Empl0yment Development Department. This list of major empl0yers was extracted from theAmerica's Labor Market Information System (ALM IS) Empl0yer Database, 2017 1st Edition.

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Per Capita Personal Income

Per capita personal income information for Ventura County, the State of California and the United States is summarized in the follo.ving table.

TABLE NO. 2 PER CAPITA PERSONAL INCOME 111

VENTURA COUNTY, STATE OF CALIFORNIA AND UNITED STATES 2011-2015

Year Ventura Coun!):'. 111 State of California 111 United States 111

2011 $47,679 $45,820 $42,453

2012 49,430 48,312 44,267

2013 49,619 48,471 44,462

2014 51,539 50,988 46,414

2015 54,155 53,741 48,112

111 Per capita personal income was computed using Census Bureau midyear population estim1tes. Estim1tes for 2011-2015 reflect county population estim1tes available as of March 2016.

Note: All dollar estim1tes are in current dollars (not adjusted for inflation).

Last updated: No;ember 17, 2016 -new estim1tes for 2015; ra,ised estim1tes for prior years.

Source: U .S. Department of Commerce, B ureau of Economic Analysis.

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Taxable transactions b,I type of business for the County are summarized belcw for 2011 through 2015 (the most recent year for which full-year statistics are available).

TABLE NO. D-2 COUNTY OF VENTURA

TAXABLE TRANSACTIONS BY TYPE OF BUSI NESS (in thousands)

Retail and Food Services

Motor Vehicle and Parts Dealers

Furniture and Horne Furnishings Stores

Electronics and Appliance Stores

Bldg. Material, Garden Equip. and Supplies

Food and Ba,erage Stores

Health and Personal Care Stores

Gasoline Stations

CI othi ng and Accessories Stores

Sporting Goods, Hobo,, B ooks, Music Stores

General Merchandise Stores

Miscellaneous Store Retailers

Nonstore Retailers

Food Services and Drinking Places

Total Retail and Food Services

2011-2015

2011 2012 2013

$ 1,493,652 $ 1,711,680 $ 1,838,611

174,600 182,384 194,787

289,812 278,023 284,528

599,430 641,660 684,286

530,624 548,619 573,416

227,368 235,123 245,121

1,184,899 1,248,682 1,208,107

813,037 863,178 907,629

281,467 287,960 296,249

1,083,396 1,112,454 1,136,487

275,014 282,115 301,383

87,776 114,840 179,892

1,115,328 1,193,290 1 250 941

8,156,403 8,700,008 9,101,437

2,863,777 3,258,250 3,722,859

2014 2015 (l)

$ 1,985,028

205,148

292,429

718,975

586,114

246,803

1,175,226

917,802

294,158

1,136,469

304,445

207,274

1,331,182

9,401,053 $ 9,615,370

3,965,575 4168976 Al I Other Outlets

Total All Outlets $11,020,180 $11,958,258 $12,824,296 $13,366,629 $13,784,346

111 Beginning in 2015, the State Board of Equalization no longer publishes the I ndustry-la,el data.

Note: Detai I rnay not compute to total due to rounding.

Source: California State Board of Equalization, "TaJ0.ble Sales in California."

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Industry

The County of Ventura is located in the Oxnard-Thousand Oaks-Ventura Metropolitan Statistical Area (MSA). As of January 2017 six major job categories constitute 76.4% of the work force. They are service producing (16.0%), gcwernrrent (14.4%), educational and health services (14.3%), leisure and hospitality (11.6%), professional and business services (10.9%), and manufacturing (9.2%). The di stri buti on of ernpl O{trent in the Oxnard-Thousand Oaks--V entura M SA is presented i n the fol I cwi ng table.

TABLE NO. D-3 OX NARD-THOUSAND OAKS-VENTURA MSA

WAGE AND SALARY WORKERS BY INDUSTRY 111 (in thousands)

Industry 2013 2014 2015 2016 2017

GO/ernment 43.8 43.7 45.1 46.4 46.9

Other Services 9.4 9.7 9.6 9.4 9.7

Leisure and Hospitality 32.4 33.5 34.5 35.2 38.0

Educational and Health Services 39.3 40.6 41.8 43.3 46.8

Professional and Business Services 36.3 36.3 34.9 35.3 35.5

Financial Activities 19.1 19.0 18.0 17.3 17.5

I nf orrnation 5.1 5.4 5.1 4.9 4.8

Transportation, Warehousing and Utilities 5.7 6.0 5.9 6.0 6.1

Service Producing

Retai I Trade 38.4 39.0 39.8 39.9 39.1

Wholesale Trade 12.5 12.9 12.5 12.8 13.2

Manufacturing

Nondurable Goods 11.7 12.0 11.5 11.8 11.9

Durable Goods 18.1 18.2 18.7 18.7 18.4

Goods Producing

Construction 12.2 13.1 13.8 13.9 14.9

Mining and Logging ---11 ____Ll ---11 __ill) _Q§

Total N onfarrn 285.2 290.7 292.4 295.8 303.6

Farrn 24.2 25.1 25.3 22.7 23.0

Total (all industries) 309.4 315.8 317.7 318.5 326.6

(1) Annually, as of January.

Note: The unernpl0yment rate is calculated using unrounded data. Data rnay not add due to rounding.

Source: State of California Ernpl0yment Da,elopment Department, Labor Market I nforrnation Division, "Industry E rrpl0yment& Labor Force -o, month, March 2016 Benchrnark"

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As of February 2017 the civi Ii an I abor force for the County was approximately 430,600 of whom 410,300 were employed. The unadjusted unemployment rate as of February 2017 was 4. 7% for the County. Civilian labor force, employment and unerrployment statistics for the County, the State and the United States, for the years 2012 through 2016 are shewn in the fol I cwi ng table:

Year

2012

Ventura County

California

U nited States

2013

Ventura County

California

U nited States

2014

Ventura County

California

U nited States

2015

Ventura County

California

U nited States

2016

Ventura County

California

U nited States

TABLE NO. D-4 CIVILIAN LABOR FORCE, EMPLOYMENTANDUNEMPLOYMENT

ANNUAL AVE RAG ES

Civilian U nempl0yment Labor Force Em~l!:!J:'.ment U nem~l!:!J:'.ment Rate

434,700 395,200 39,500 9.1%

18,523,800 16,602,700 1,921,100 10.4

154,975,000 142,469,000 12,506,000 8.1

434,000 399,800 34,200 7.9

18,624,300 16,958,700 1,665,600 8.9

155,389,000 143,929,000 11,460,000 7.4

430,900 402,300 28,600 6.6

18,755,000 17,348,600 1,406,400 7.5

155,922,000 146,305,000 9,617,000 6.2

428,400 404,300 24,100 5.6

18,893,200 17,723,300 1,169,900 6.2

1 57, 1 30,000 148,834,000 8,296,000 5.3

427,800 405,600 22,100 5.2

19,102,700 18,065,000 1,037,700 5.4

159,187,000 151,436,000 7,751,000 4.9

Source: California State Ernpl0yrnent Development Departrnentand United States Bureau of Labor Statistics.

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APPENDIX E

FORM OF CONTINUING DISCLOSURE AGREEMENT

THIS CONTINUING DISCLOSURE AGREEMENT (the "Disclosure Agreerrent"), dated as of May 1, 2017, is b,I and between DAVID TAUSSIG & ASSOCIATES, INC. as dissemination agent (the "Dissemination Agent"), and the CASITAS MUNICIPAL WATER DISTRICT (the "Water District'').

RECITALS:

WHEREAS, the Water District has issued, for and on behalf oftheCasitas Municipal Water District Community Facilities District No. 2013-1 (OJAI) (the "District''), its 2017 Special Tax Bonds, Series A and 2017 Special Tax Bonds, Series B (collectively, the" Bonds") in the aggregate initial principal amount of $39,910,000; and

WHEREAS, the Bonds have been issued pursuanttoa Fiscal AgentAgreerrent, dated as of May 1, 2017 (the" Fiscal AgentAgreerrent''), b,I and between U.S. Bank National Association, as fiscal agent (the "Fiscal Agent"), and the Water District, for and on behalf of the District; and

WHEREAS, this DisclosureAgreerrent is being executed and delivered b,I the Water District and the Dissemination Agent for the benefit of the o.vners and beneficial o.vners of the Bonds and in order to assistthe underwriter of the Bonds in complying with S.E.C. Rule 15c2-12(b)(5).

AGREEMENT:

NOW, THEREFORE, for and in consideration of the premises and mutual co.tenants herein contained, and for other consideration the receipt and sufficiency of which is hereb,I a ck no.vi edged, the parties hereto agree as folio.vs:

Section 1. Definitions. In addition to the definitions of capitalized terms set forth in Section 1.03 of the Fiscal Agent Agreerrent, which apply to any capitalized term used in this Disclosure Agreerrent unless otherwise defined in this Section or in the Recitals abo.te, the follo.ving terms shall have the follo.ving meanings when used in this Disclosure Agreerrent:

"Annual Report" rreans any Annual Report pro.tided b,I the Water District pursuantto, and as described in, Sections 3 and 4 of this DisclosureAgreerrent.

"Beneficial OWner" shall mean any personwho(a) has the po.ver, directly or indirectly, to vote or consent with respect to, orto dispose of o.vnershi p of, any Bond ( i ncl udi ng persons holding any Bonds through nominees, depositories or other interrrediaries), or (b) is treated as the o.vner of any Bond for federal i ncorre tax purposes.

"Disclosure Representative'' means the Accounting Manager/freasurer of the Water District, or such person's designee, or such other officer or employee of the Water District as the Water District shall designate as the Disclosure Representative hereunder in writing to the Dissemination Agent from tirre totirre.

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"DisseninationAgent'' rreans David Taussig& Associates, Inc. acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing b,I the Water District and which has filed with the Water District a written acceptance of such designation.

"EMMA'' or "Electronic Municipal Market Access" rreans the centralized on-line repository for docurrents to be filed with the MSRB, such as official staterrents and disclosure information relating to municipal bonds, notes and other securities as issued b,I state and local gcwernrrents.

"Listed Events" rreans any of the events I isted in Section S(a) or S(b) of this Disclosure A greerrent.

"MSRB" rreans the Municipal Securities Rulemaking Board, which has been designated b,I the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information which may be designated b,I the Securities and Exchange Commission as such for purposes of the Rule in the future.

"Official Staterrent'' rreans the Official Staterrent, dated May 10, 2017, relating to the Bonds.

"Participating Underwriter" means the original underwriter of the Bonds required to corrply with the Rule in connection with offering of the Bonds.

"Rule" rreans Rule 15c2-12(b)(5) adopted b,I the Securities and Exchange Commission underthe Securities Exchange Act of 1934, as the sarre may be arrended from tirre totirre.

Section 2. Pur(X)Se of the Disclosure Aqreerrent. This Disclosure Agreerrent is being executed and delivered b,I the Water District and the Dissemination Agent for the benefit of the cwners and Beneficial owners of the Bonds and in orderto assist the Participating Underwriter in complying with the Rule.

Section 3. Prcwision of Annual Reports.

(a) Delivery of Annual Report. The Water District shall, or shall cause the Dissemination Agent to, not laterthan the March 1 occurring afterthe end of each fiscal year of the Water District, comrrencing with the report for the 2016-17 fiscal year, which is due not laterthan March 1, 2018, file with EMMA, in a readable PDF or other electronic format as prescribed b,I the MSRB, an Annual Report that is consistent with the requi rerrents of Section 4 of this Disclosure Agreerrent. The Annual Report may be submitted as a si ngl e docurrent or as separate docurrents comprising a package and may cross,eference other information as pro.tided in Section 4 of this Disclosure Agreerrent; pro.tided that any audited financial staterrents of the Water District may be subnitted separately from the balance of the Annual Report and laterthan the date required abcwe for the filing of the Annual Report if they are not available b,I that date.

(b) Change of Fiscal Year. If the Water District's fiscal year changes, it shall give notice of such change in the sarre manner as for a Listed Event under Section S(c), and subsequent Annual Report filings shal I be made no later than six months after the end of such new fiscal year end.

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( c) Delivery of Annual Reportto Disseni nation Agent. Not I aterthan 5 Business Days prior to the date specified in subsection (a) (or, if applicable, subsection (b) of this Section 3 for pro.tiding the Annual Report to EMMA), the Water District shall pro.tide the Annual Report to the Dissemination Agent (if other than the Water District). If b,I such date, the Dissemination Agent has not received a cop,1 of the Annual Report, the Dissemination Agent shall notify the Water District.

(cl) Report of Non--Corrl)liance. If the Water District is the Dissenination Agent and is unable to file an Annual Report b,I the date required in subsection (a) (or, if applicable, subsection (b)) of this Section 3, the Water District shall in a timely manner send a notice to EMMA substantially in the form attached hereto as Exhibit A. If the Water District is not the DisseminationAgentand is unabletoprcwide an Annual Report to the Dissemination Agent b,I the date required in subsection (c) of this Section 3, the Dissemination Agent shall send a notice to EMMA in substantially the form attached hereto as Exhibit A in a timely manner.

(e) Annual CCJ111)1iance Certification. The Dissemination Agent shall, if the Dissemination Agent is other than the Water District, file a report with the Water District certifying that the Annual Report has been filed with EMMA pursuant to Section 3 of this Disclosure Agreement, stating the date it was so pro.tided and filed.

Section 4. Content of Annual Reports. The Annual Report for each fiscal year shall contain or incorporate b,I reference the fol Io.vi ng:

(a) Financial Statements. Audited financial statements of the Water District forthe most recently completed fiscal year, prepared in accordance with generally accepted accounting pri nci pl es as prornul gated to apply to gcwernmental entities from ti me to ti me by the G cwernmental Accounting Standards Board. If the Water District's audited financial statements are not available b,I the time the Annual Report is required to be filed pursuantto Section 3(a), the audited financial statements shal I be fi I ed in the same manner as the Annual Report when they become avai I able.

(b) Other Annual Information. The Annual Report for each fiscal year shall also include the fol Io.vi ng i nformati on:

(i) The principal amount of Bonds Outstanding as of the September 30 next preceding the date of the Annual Report, and a descri pti on of any special redernpti on from prepaid Special Taxes since the date of the prior Annual Report.

(ii) The amount on deposit in the Reserve Fund, if any, and a statement of the Reserve Requirement, as of a date within 60 days preceding the Annual Report Date and if applicable, the amount of the debt service reserve insurance policy.

(iii) The maximum special tax rate for the current fiscal year for each Land Use Class, in a table similar to the table under the heading "THE DISTRICT -Development Summary and Special Taxes" in the Official Statement.

(vi) The number of parcels for which the Special Tax has been prepaid since the date of the prior Annual Report, the amount of the prepayment, a statement if the prepayment is in ful I or in part, and the Land Use Cl ass of such parcel.

(v) The total assessed value of all parcels within the District on which the Special Taxes are levied, as sho.vn on the assessment roll of the County Assessor last equalized pri orto the September 30 next preceding the date of the Annual Report, and a statement of

E-3

assessed value-to-Bond lien ratios therefor, either by individual parcel or by categ:iries, in a table similar to Table No. 8 in the Official Statement.

(vi) An update to Table No. 6 in the Official Statement using the most recently available County assessed values.

(vii) An update to the narrative underthe heading "THE DI STRICT - Historical Levies and Tax Delinquencies" in the Official Statement forthe most recently completed fiscal year, and an update of prior years' delinquencies as of a date not more than ninety ( 90) days prior to the date of the Annual Report.

(viii) The status of foreclosure proceedings for any parcels within the District on which the Special Taxes are levied and a summary or the results of any foreclosure sales, or other col I ecti on efforts with respect to deli nquent Special Taxes, as of the September 30 next precedi ng the date of the Annual Report.

(ix) The most recent annual information required to be pro.tided to the California Debt and Investment Ad.tisory Comnission pursuant to Section 5.19(A) of the Fiscal A gent Agreement.

(c) Cross References. Any or all of the items listed alx:we may be included by specific reference to other documents, including official statements of debt issues of the Water District or related public entities, which are availabletothe public on EMMA. The Water District shall clearly identify each such other document so included by reference.

I f the document i ncl uded by reference is a final official statement, it must be avai I able from EMMA.

(cl) Further Information. In addition to any of the information expressly required to be pro.tided under paragraph (b) of this Section 4, the Water District shall pro.tide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.

Section 5. Reporting of Listed Events.

(a) Reportable Events. The Water District shall, or shall cause the DisseninationAgent (if not the Water District) to, give notice of the occurrence of any of the follo.ving events with respect to the Bonds:

(1) Principal and interest payment delinquencies.

(2) Unscheduled draws on debt service reserves reflecting financial difficulties.

(3) Unscheduled draws on credit enhancements reflecting financial difficulties.

(4) Substitution of credit or liquidity prcwiders, or their failure to perform.

( 5) Defeasances.

(6) Rating changes.

( 7) Tender offers.

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( 8) Bankruptcy, insolvency, receivership or si mi I ar event of the obi igated person.

(9) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final deterninations of taxability, Notices of Proposed Issue (I RS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security.

Note: Forthe purposes of the event identified in subparagraph (8), the event is considered to occur when any of the fol Io.vi ng occur: the appointment of a receiver, trustee or si mi I ar officer for an obligated person in a proceeding underthe U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or gcwernmental authority has assumed jurisdiction ewer substantially all of the assets or business of the obligated person, or if suchjurisdiction has been assumed by leaving the existing gcwernmental bod,! and officials or officers in possession but suqject to the supervision and orders of a court or gcwernmental authority, orthe entry of an order confirning a plan of reorganization, arrangement or liquidation by a court or gcwernmental authority having supervision or jurisdiction ewer substantially all of the assets or business of the obi i gated person.

(b) Material Reportable Events. The Water District shall give, or cause to be given, notice of the occurrence of any of the follo.ving events with respect to the Bonds, if material:

(1) Non-payment related defaults.

( 2) M odi fi cations to rights of security holders.

(3) Bond calls.

(4) The release, substitution, or sale of property securing repayment of the securities.

(5) The consummation of a merger, consolidation, or acquisition involving an obi i gated person or the sale of al I or substantial ly al I of the assets of the obi i gated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action orthe terni nation of a definitive agreement rel ati ng to any such acti ans, otherthan pursuant to its terms.

( 6) A ppoi ntment of a successor or addi ti anal trustee, or the change of name of a trustee.

(c) Time to Disclose. The Water District shall, or shall cause the Dissemination Agent (if not the Water District) to, file a notice of such occurrence with EMMA, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days afterthe occurrence of any Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(S) and (b)(3) abcwe need not be given underthis subsection any earlierthan the notice (if any) of the underlying event is given to o.vners of affected Bonds under the Fiscal Agent Agreement.

Section 6. Identifying Information for Filings with EMMA. All documents pro.tided to EMMA under this Disclosure Agreement shall be accompanied by identifying information as prescribed by the MSRB.

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Section 7. Termination of Reporting Obligation. The Water District's obligations under this Disclosure Agreement shall terninate upon the defeasance, prior redemption or payment in full of all of the Bonds.

Section 8. Dissemination Agent.

(a) Appointment of Dissenination Agent. The Water District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement and may discharge any such agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be David Taussig& Associates, Inc.

If the Dissenination Agent is not the Water District, the Dissenination Agent shall not be responsible in any manner for the content of any notice or report prepared b,I the Water District pursuant to this Di sci osure Agreement. I t is understood and agreed that any i nformati on thatthe Di ssemi nation A gent may be instructed to file with EMMA shall be prepared and pro.tided to it b,I the Water District. The Di ssemi nation A gent has undertaken no responsi bi I ity with respect to the content of any reports, notices or disclosures prcwidedto it underthis Disclosure Agreement and has no liability to any person, including any Band o.vner, with respect to any such reports, notices or di sci osures. The fact that the Di sseni nation A gent or any affiliate thereof may have any fiduciary or banking relationship with the Water District shall not be construed to mean that the Dissemination Agent has actual kno.vledge of any event or condition, except as may be pro.tided b,I written notice from the Water District.

(b) Compensation of Dissenination Agent. The Dissenination Agent shall be paid compensation b,I the Water District for its services pro.tided hereunder as agreed to between the Disseni nation Agent and the Water District from time to time and all expenses, legal fees and expenses and ad.tances made or incurred b,I the Dissemination Agent in the performance of its duties hereunder, with payment to be made from any lawful funds of the District. The Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the Water District, the o.vners of the Bonds, the Beneficial owners, or any other party. The Dissenination Agent may rely, and shall be protected in acting or refraining from acting, upon any written direction from the Water District or a written opinion of nationally recognized bond counsel. The Dissenination Agent may at any time resign b,I giving written notice of such resignation to the Water District. The Dissemination Agent shall not be liable hereunder except for its negligence or willful ni sconduct.

(c) Responsibilities of Dissenination Agent. In addition of the filing obligations of the Dissemination Agent set forth in Sections 3(e) and 5, the Dissemination Agent shall be obligated, and hereb,I agrees, to pro.tide a request to the Water District to compile the information required for its Annual Report at least 30 days prior to the date such information is to be pro.tided to the Dissemination Agent pursuant to subsection (c) of Section 3. The failure to pro.tide or receive any such request shall not affect the obligations of the Water District under Section 3.

Section 9. Amendment; Waiver. Notwithstanding any other prcwision of this Disclosure Agreement, the Water District may amend this Di sci osure Agreement ( and the Di ssemi nation A gent shal I agree to any amendment so requested b,I the Water District that does not impose any greater duties or risk of liability on the Dissenination Agent), and any prcwision of this Disclosure Agreement may be waived, pro.tided that all of the follo.ving conditions are satisfied:

(a) Change in Circum;tances. If the amendment or waiver relates to the prcwisions of Sections 3(a), 4 or S(a) or (b), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obi i gated person with respect to the Bands, or the type of business conducted.

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(b) Corrpliance as of Issue Date. The undertaking, as amended or taking into account such waiver, would, in the opinion of a nationally recognized bond counsel, have corrplied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances.

( c) Consent of Holders; Non--i rnpai rment Opinion. The amendment or waiver either ( i) is appr0.ted b,I the Bond o.vners in the same manner as pr0.tided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of Bond o.vners, or (ii) does not, in the opi ni on of nati anal ly recognized bond counsel, material ly i mpai r the i nterests of the B ond o.vners or B enefi ci al owners.

If this Disclosure Agreement is amended or any pr0.tision of this Disclosure Agreement is waived, the Water District shall describe such amendment or waiver in the next follo.vingAnnual Report and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type ( or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented b,I the Water District. In addition, if the amendment relates to the accounting pri nci pl es to be fol I o.ved in prepari ng financial statements, ( i) notice of such change shal I be given in the same manner as for a Listed Event under Section S(c), and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative fomi) between the financial statements as prepared on the basis of the ne.v accounting pri nci pl es and those prepared on the basis of the former accounting pri nci pl es.

Section 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Water District from di ssemi nati ng any other i nformati on, using the means of di ssemi nation set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required b,I this Disclosure Agreement. If the Water District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required b,I this Di sci osure Agreement, the Water District shal I have no obi i gati on underthi s Di sci osure Agreement to update such information or include it in any future Annual Report or future notice of occurrence of a Listed Event.

Section 11. Default. In the event of a failure of the Water District to corrply with any pr0.tision of this Disclosure Agreement, any Bond o.vner, any Beneficial owner, the Fiscal Agent or the Participating Underwriter may take such actions as may be necessary and appropriate, including seeking mandate or specific performance b,I court order, to cause the Water District to comply with its obligations under this Di sci osure Agreement. The sole remedy underthi s Di sci osure Agreement i n the event of any fai I ure of the Water District to comply with this Disclosure Agreement shall be an action to compel performance.

Section 12. Beneficiaries. This Di sci osure Agreement shal I inure solely to the benefit of the Water District, the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and the o.vners and the B enefi ci al owners from ti me to ti me of the Bands, and shal I create no rights in any other person or entity.

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Section 13. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement as of the date first alx:we written.

CASITAS MUNICIPAL WATER DISTRICT

By: ---------~---------Steve Wicks tr um, General Manager

DAVID TAUSSIG & ASSOCIATES, I NC., as Dissenination Agent

By:------------------­Its: -------------------

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Name of Obi i gar:

Name of Band Issue:

Date of Issuance:

EXHIBIT A

NOTICE OF FAILURE TO FILE ANNUAL REPORT

Casitas Municipal Water District

Casitas Municipal Water District Community Facilities District No. 2013-1 (OJAI), 2017 Special Tax Bonds, Series A and Series B

May 31, 2017

NOTICE IS HEREBY GIVEN thatthe Obligor has not pr0.tided an Annual Report with respect to the abOJe--named Bonds as required b,I Section 5.17 of the Fiscal Agent Agreement, dated as of May 1, 2017, between the Obligor and U.S. Bank National Association, as fiscal agent. The Obligor anticipates thattheAnnual Report will be filed b,f __________________ .

Date: ----------

By: David Taussig& Associates, Inc., as Dissemination Agent

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APPENDIX F

DTCANDTHE BOOK ENTRY SYSTEM

The follc:M,ing description of the Depository Trust Conµany (" DTC" ), the procedures and record keeping with respect to beneficial OM1ershi pi nterests in the Bonds, payrrent of principal, interest and other payments on the Bonds to DTC P arti ci pants or Beneficial CMners, confi rrration and transfer of beneficial OM1ershi p interest in the Bonds and other related transactions b,I and between DTC, the DTC Participants and the Beneficial CMners is based solely on inforrration pro.tided b,I DTC. Accordingly, no representations can be rrade concerning these rraners and neither the DTC Participants northe Beneficial O'Mlers should rely on the foregoing i nforrrati on with respect to such rraners, but should instead confirm the same with DTC or the DTC Participants, as the case rray be.

Neither the issuer of the Bonds (the "Issuer") nor the trustee, fiscal agent or paying agent appointed with respect to the Bonds (the" Agent'') take any responsibility for the inforrration contained in this Appendix.

No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial CMners (a) payments of interest, principal or preni urn if any, with respect to the Bonds, (b) certificates representing OM1ership interest in or other confirrration or OM1ership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its noninee, as the registered OM1er of the Bonds, or thattheywi 11 so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the rranner described in this Appendix The current" Rules" applicable to DTC are on file with the Securities and Exchange Connission and the current" Procedures" of DTC to be follcwed in dealing with DTC Participants are on file with DTC.

1. The Depository Trust Company(" DTC"), NewY ork, NY, will act as securities depository for the securities (the" Securities"). The Securities wi II be issued as fully-registered securities registered in the name of Cede & Co. ( DTC' s partnership nominee) or such other name as rray be requested b,I an authorized representative of DTC. One ful ly--registered Security certificate wil I be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, ho.vever, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any rerraining principal amount of such issue.

2. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking LiM', a member of the Federal Reserve System a "clearing corporation" within the meaning of the New Y ork U ni form Commercial Code, and a " cl eari ng agency" registered pursuantto the pr0.ti si ans of Section 17A of the Securities Exchange Act of 1934. DTC holds and pr0.tides asset servicing for ewer 3.5 nillion issues of U.S. and non--U.S. equity issues, corporate and municipal debt issues, and money rrarket i nstruments ( from ewer 1 00 countries) that DT C's parti ci pants (" Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transacti ans in deposited securities, through electronic cornputeri zed book-entry transfers and pl edges between Direct Participants' accounts. This eliminates the need for physical m0.tement of securities certificates. Direct Participants include both U.S. and non--U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-o.vned subsidiary of The Depository Trust& Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is o.vned b,I the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non--U.S. securities brokers and dealers, banks, trust

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corrpanies, and clearing corporations that clearthrough or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information contained on such Internet site is not incorporated herein by reference.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The o.vnership interest of each actual purchaser of each Security ("Beneficial owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial owners will not receive written confirmation from DTC of their purchase. B enefi ci al owners are, ho.vever, expected to receive written confi rmati ans pro.ti di ng detai Is of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial owner entered into the transaction. Transfers of o.vnership interests in the Securities are to be accomplished by entries made on the oooks of Direct and Indirect Participants acting on behalf of Beneficial owners. Beneficial owners will not receive certificates representing their o.vnership interests in Securities, except in the eventthat use of the oook--entry system for the Securities is discontinued.

4. To faci I itate subsequenttransfers, al I Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership noninee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC andthei r registration in the name of Cede & Co. or such other DTC noninee do not effect any change in beneficial o.vnership. DTC has no kno.vledge of the actual Beneficial owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial owners. The Direct and Indirect Participants will remain responsible for keeping account of thei r holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial owners wi 11 be gcwerned by arrangements among them, suqject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial owners of Securities may wish to take certain steps to augment the transnission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial owners of Securities may wish to ascertain that the noninee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial owners. In the alternative, Beneficial owners may wish to pro.ti de their names and addresses to the registrar and request that copies of notices be pro.tided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mai Is an Omni bus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, di stri buti ans, and dividend payments on the Securities wi 11 be made to Cede & Co., or such other noninee as may be requested by an authorized representative of DTC. DTC's

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practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings sho.vn on DTC's records. Payrrents b,I Participants to Beneficial owners will be gcwerned b,I standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer forrn or registered in "street narre," and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, suqject to any statutory or regulatory requirerrents as rnay be in effect frorntirre totirre. Payrrent of redemption proceeds, distributions, and dividend payrrents to Cede & Co. (or such other nominee as may be requested b,I an authorized representative of DTC) is the responsibility of Issuer or Agent, disburserrent of such payrrents to Direct Participants will be the responsibility of DTC, and disburserrent of such payrrents to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. DTC may discontinue pr0.tiding its services as depository with respect to the Securities at any tirre b,I giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtai ned, Security certificates are required to be pri nted and del ivered.

10. Issuer rnay decide to discontinue use of the system of oook--entry transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.

11. The information in this section concerning DTC and DTC's book-entry system has been obtained frorn sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.

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APPENDIX G

SPECIMEN MUNICIPAL BOND INSURANCE POLICY

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ISSUER: [NAME OF ISSUER]

MEMBER: [NAME OF MEMBER]

BONDS: $ _____ in aggregate principal amount of [NAME OF TRANSACTION] [ and maturing on]

MUNICIPAL BOND INSURANCE POLICY

Policy No: __

Effective Date: -----

Risk Premium: $ ------Member Surplus Contribution: $

-----

Total Insurance Payment: $ ___ _

BUILD AMERICA MUTUAL ASSURANCE COMPANY ("BAM'), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee'') or paying agent (the "Paying Agent'') for the Bonds named above (as set forth in the documentation providing for the issuance and securing of the Bonds), for the benefit of the Owners or, at the election of BAM, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer.

On the later of the day on which such principal and interest becomes Due for Payment or the first Business Day following the Business Day on which BAM shall have received Notice of Nonpayment, BAM will disburse (but without duplication in the case of duplicate claims for the same Nonpayment) to or for the benefit of each Owner of the Bonds, the face amount of principal of and interest on the Bonds that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by BAM, in a form reasonably satisfactory to it, of (a) evidence of the Owner's right to receive payment of such principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner's rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in BAM. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1 :00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by BAM is incomplete, it shall be deemed not to have been received by BAM for purposes of the preceding sentence, and BAM shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, any of whom may submit an amended Notice of Nonpayment. Upon disbursement llllder this Policy in respect of a Bond and to the extent of such payment, BAM shall become the owner of such Bond, any appurtenant coupon to such Bond and right to receipt of payment of principal of or interest on such Bond and shall be fully subrogated to the rights of the Owner, including the Owner's right to receive payments llllder such Bond Payment by BAM either tr, the Trustee or Paying Agent for the benefit of the Owners, or directly to the Owners, on account of any Nonpayment shall discharge the obligation of BAM llllder this Policy with respect to said Nonpayment.

Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent (as defined herein) are authorized or required by law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking flllld redemption and does not refer to any earlier date on which payment is due by reason of call for redemption ( other than by mandatory sinking flmd redemption), acceleration or other advancement of maturity (urJ.ess BAM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration) and (b) when refeni.ng to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient fllllds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment made to an Owner by or on behalf of the Issuer of principal or interest that is Due for Payment, which payment has been recovered from such Owner pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means delivery to BAM of a notice of claim and certificate, by certified mail, email or telecopy as set forth on the attached Schedule or other acceptable electronic delivery, in a form satisfactory to BAM, from and signed by an Owner, the Trustee or the Paying Agent, which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount, (d) payment instructions and ( e) the date such claimed amount becomes or became Due for Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer, the Member or any other person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds.

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BAM may appoint a fiscal agent (the "Insurer's Fiscal Agent'') for purposes of this Policy by giving written notice to the Trustee, the Paying Agent, the Member and the Issuer specifying the name and notice address of the Insurer's Fiscal Agent. From and after the date ofreceipt of such notice by the Trustee, the Paying Agent, the Member or the Issuer (a) copies of all notices required to be delivered to BAM pursuant to this Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to BAM and shall not be deemed received until received by both and (b) all payments required to be made by BAM under this Policy may be made directly by BAM or by the Insurer's Fiscal Agent on behalf of BAM. The Insurer's Fiscal Agent is the agent of BAM only, and the Insurer's Fiscal Agent shall in no event be liable to the Trustee, Paying Agent or any Owner for any act of the Insurer's Fiscal Agent or any failure of BAM to deposit or cause to be deposited sufficient funds to make payments due under this Policy.

To the fullest extent permitted by applicable law, BAM agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to BAM to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy. This Policy may not be canceled or revoked.

This Policy sets forth in full the undertaking of BAM and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, any premium paid in respect of this Policy is nomefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW. THIS POLICY IS ISSUED WITHOUT CONTINGENT MUTUAL LIABILITY FOR ASSESSMENT.

In witness whereof, BUILD AMERICA MUTUAL ASSURANCE COMPANY has caused this Policy m be executed on its behalf by its Authorized Officer.

BUILD AMERICA MUTUAL ASSURANCE COMPANY

By: Authorized Officer

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Email: clairns((}Jbuildarnerica.corn

Address: 200 Liberty Street, 27th floor New York, New York 10281

Telecopy: 212-962-1524 (attention: Claims)

Notices (Unless Otherwise Specified by BAM)

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CALIFORNIA

ENDORSEMENT TO

MUNICIPAL BOND INSURANCE POLICY

NO.

This Policy is not covered by the California Insurance Guaranty Association established pursuant to Article 15.2 of Chapter 1 of Part 2 of Division 1 of the California Law.

Nothing herein shall be construed to waive, alter, reduce or amend coverage in any other section of the Policy. If found contrary to the Policy language, the terms of this Endorsement supersede the Policy language

IN WITNESS WHEREOF, BUILDAMERICA MUTUAL ASSURANCE COMPANY has caused this policy to be executed on its behalf by its Authorized Officer.

BUILD AMERJCA MUTUAL ASSURANCE COMPANY

By

Authorized Officer

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