1. PROPOSED CITY OF STOCKTON WATERFORD ESTATES EAST PHASE II ASSESSMENT DISTRICT 2003-03 PUBLIC HEARING Stockton City Council January 6, 2004

2. BACKGROUND August 2003, Woodside Homes of California, Inc. requested that the City initiate the formation of the Waterford Estates East Phase II Assessment District November 18, 2003, Council adopted Resolution No. 03-0684. Stating an intention to order improvements in the proposed District; Accepting a petition of property owners; and Approving a proposed boundary map

3. BACKGROUND (cont.) Additionally, Council adopted Resolution No. 03-0685, which: Preliminarily approved an Engineer’s Report; and Scheduled a Public Hearing for protests and Property Owner Assessment Ballot tabulation to be held on January 6, 2004.

4. DISTRICT LOCATION The proposed district is located in the North Stockton Community Area. South of Eight Mile Road and west of Davis Road astride Pixley Slough Total land area of 48± acres. Adjacent to the Waterford Estates East AD 2002-03 formed by Council in November 2002.

5. PROPOSED IMPROVEMENTS In general, the work within the proposed District consists of: Street improvements and related infrastructure located within the street rights-of-way and/or public easements; Storm drainage lines; Sanitary sewer and domestic water lines; and Street lighting systems.

6. ESTIMATED COST It is estimated that the public improvements to be financed with bond proceeds will total approximately $3.36 million including: Design engineering and surveying; Cost and expense of construction of improvements; District formation and financing costs, capitalized interest, legal consultants and administrative support.

7. SOURCES & USES OF FUNDS A schedule showing the projected Sources and Uses of Funds is provided in the staff report. Par amount of the bonds is projected to be $3.36 million; A project fund will be established in the amount of approximately $2.76 million; A reserve fund will be established in the amount of approximately $252,115; The issue includes capitalized interest of approximately $112,685; The cost of issuance is approximately $140,945, with an Underwriter’s Discount est. to be $50,400.

8. PROJECT UNDERWRITING Public Issuers of debt can choose to issue debt in two ways: Negotiated sale with a selected underwriter; or Competitively through the use of a bid process. Historically, the City has issued debt using the negotiated underwriting process. Use of a competitive underwriting process for this issue may yield lower underwriting costs and better interests rates.

9. PROJECT UNDERWRITING (Cont) If Council authorizes the issuance of bonds, the bonds will be offered for sale pursuant to the terms contained in the Official Notice of Sale. The Notice contains all the pertinent information regarding the bond issue, including instructions for submitting a bid. A Notice of Sale will be printed in the Bond Buyer, a financial newspaper, on January 7, 2004. Bids are due on January 22, 2004. The Underwriter that submits a bid yielding the overall most effective interest cost will be awarded the bonds.

10. ASSESSMENTS & PAYMENTS The project area is expected to be subdivided into 210 single-family residential lots. The assessment lien per residential unit is projected to be approximately $16,000.00; The annual payment per residential unit is projected to be approximately $1,140.00; The monthly payment per residential unit is projected to be approximately $95.00.

11. PUBLIC HEARING Government Code §53753(d) requires Council to conduct a public hearing prior to the formation of the proposed District and levying of an assessment. A notice of public hearing and Assessment Ballots were mailed to all property owners within the proposed District. All returned ballots will be tabulated at the end of the public hearing to determine if owners are in favor of the proposed assessment.

12. RECOMMENDATION At the conclusion of the public hearing, adopt two Resolutions, which trigger the following actions : Overrule protests; Approve a Final Engineer’s Report; Levy assessments & order acquisition of improvements; Authorize the issuance of Limited Obligation Improvement Bonds; Approve the execution of a Fiscal Agent Agreement, authorizing the sale of bonds, approving an Official Statement; and Authorize the execution of related documents in respect to the issuance, sale and delivery of said bonds.