San Bernardino County Flood Control District Continuing Disclosure

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1 San Bernardino County Flood Control District

2 Assessed Valuations Tax Levies and Delinquencies Discretionary Revenues and Expenditures (an update of the information contained in Table No. 2 of the forepart of the Official Statement) Budget Information o Schedule of Adopted Budgets o County of San Bernardino Adopted Budget (Filed as a separate document) (The budget of the is published in this budget book beginning on page 487) Statement of Revenues, Expenditures and Changes in Fund Balance (an update of the information contained in Table No. 1 in Appendix A to the Official Statement) Summary of Aggregate Debt Obligations o Aggregate Annual Debt Obligations o Outstanding Indebtedness (an update of the information contained in Appendix A to the Official Statement under the heading titled Outstanding Indebtedness. ) Pooled Investment Fund of the County (an update of the information in Table No. 4 contained in Appendix A to the Official Statement) Continuing Disclosure and CUSIP Information The District s Annual Financial Report as of June 30, 2015 (Filed as separate document)

3 Assessed Valuations SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT CHANGE IN ASSESSED VALUATION (1) Fiscal Years through Percent Change Secured Homeowner's Unsecured in Secured Fiscal Year Valuation Exemption Valuation Valuation ,913,409,157 1,842,311,140 4,928,111, % ,085,953,574 1,806,749,634 5,071,989, % ,365,990,466 1,770,329,417 5,313,111, % ,298,656,489 1,734,190,696 5,346,803, % ,685,191,159 1,704,541,337 5,459,425, % (1) Excludes amounts relating to redevelopment agency tax increment Source: County of San Bernardino, Auditor-Controller/Treasurer/Tax Collector Property Tax Division

4 Tax Levies and Delinquencies SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT SHARE OF COUNTY 1% PROPERTY TAX LEVY Fiscal Year through Percentage of Tax Percentage of Tax Levy Received Levy Received Fiscal Total Taxes Collected in the Fiscal Year to Date (3) Year Tax Levy (1) Through June 30 (2) of the Levy (3) (as of June 30, 2015) ,508,349 35,134, % 98.70% ,659,665 34,906, % 95.11% ,534,988 36,819, % 98.04% ,192,871 39,028, % 99.68% ,855,907 42,060, % 97.43% (1) (2) Source: County of San Bernardino, Auditor-Controller/Treasurer/Tax Collector, Property Tax Division The total tax levy for the District includes, in addition to the portion of the property tax levy secured through the Teeter Plan, the unsecured tax roll, the Unitary roll, homeowners exemptions and the secured and unsecured portions of certain pass-throughs from dissolved redevelopment agencies, none of which are part of the Teeter Plan. Actuals are sometimes higher than levy figures because the original levy does not include supplemental tax roll revenues and actuals include supplemental roll collections. Amounts are not reduced by the administrative fee charged for property tax administration and deducted from property tax revenues. (3) Represents collection rates applicable to the Secured and Unitary tax levies within the County, including the District.

5 Discretionary Revenues and Expenditures For the Fiscal Year Ended June 30, 2015 Fund Balance July 1, 2014 $87,088,267 Revenues Property Taxes $43,554,373 Other Taxes 328,805 Governmental Aid 1,407,112 Licenses, Fees, and Permits 451,244 Rents, Concessions and Royalties 492,437 Interest 122,853 Other Revenues (1) 158,960 Sale of Fixed Assets 1,262,749 Insurance Recoveries 14,048,131 Total Revenues $61,826,664 Operating Expenditures Salaries and Benefits $10,956,774 Services and Supplies 14,859,719 Operating Transfers to Restricted Funds 0 Operating Transfers to County for Joint Projects 145,708 Total Operating Expenditures $25,962,201 Net Operating Income $35,864,463 Debt Service $ 2,336, Refunding Bond Debt Service 2,393, Series A Judgment Obligation Bond Debt Service 4,303, Judgment Obligation Refunding Bond Debt Service 17,237 Federal Loan (2) 3,016,452 Total Debt Service (3) $9,730,921 Debt Service Coverage Ratio 3.69 Adjusted Fund Balance After Debt Service $113,221,809 Capital Outlay and Emergency Maintenance Capital Projects - Cucamonga Basin #6 $96,504 English Channel $665,043 Francis Street Storm Drain $1,428 Sultana Cypress Storm Drain $515 West Fontana Channel $55,552 29th Street Basin Levee $19,933 Cactus Basins $603,123 Lytle Cajon Channel/Warm Creek Channel $178,849 Patton Levee $59,620 Randall Basin $150,000 Rialto Channel $54,316 Elder Creek $136,624 Wildwood Creek Detention Basin $6,088 Wilson II Basins/Oak Creek Basins $88,062 Avenue I Drainage $857 Desert Knolls Wash $46,043 Hesperia Detention Basin $723,297 Mojave River I-15 Levee $45,375 Mountain View Acres $967,977 Oro Grande Wash Detention Basins $637,616 Ranchero Basin $7,505 Seneca Basin $797 Sheep Creek $124,395 Tussing-Juniper Basin $877 Yucca Loma Drainage $681 Rim Forest Drainage $128,880 Donnell Basin $14,503 Various Capital Projects $14,043 Emergency Maintenance due to Extraordinary Flooding - Total Capital Outlay and Emergency Maintenance $4,828,503 Adjusted Fund Balance after Debt Service and Capital Outlay 6/30/2015 $108,393,306 Notes (1) Other revenues include sales of plans, aerial photos and maps to the public, permit and inspection fees, and other miscellaneous revenues. Other revenues also include property tax administration fees paid and GASB 31 adjustments which are displayed in this category to be consistent with the audited financial statements. (2) U.S. Army Corps of Engineers principal payment (3) For the 2007 Refunding Bonds, the 2007 Judgment Obligation Refunding Bonds, and the 2008 Judgment Obligation Bonds, Debt Service amounts include principal and interest amounts paid to bondholders in the fiscal year. These Debt Service amounts do not include principal and interest amounts paid by the District to the Trustee pursuant to the Indenture in the fiscal year ending June 30, 2015, but not due to bondholders until August 1, 2015.

6 Schedule of Adopted Budgets SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT ADOPTED BUDGETS (1) Fiscal Years through Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year (2) Appropriation Staffing Expenses $14,629,886 $15,161,175 $14,307,908 $15,310,224 $15,937,551 Operating Expenses $85,826,497 $89,446,598 $72,777,366 $82,063,809 $89,516,501 Capital Expenditures $1,039,200 $1,245,000 $3,164,700 $3,659,000 $6,575,000 Contingencies $26,681,686 $14,394,143 $63,810,050 $47,432,516 $0 Total Expenditure Authority $128,177,269 $120,246,916 $154,060,024 $148,465,549 $112,029,052 Reimbursements ($14,437,046) ($15,487,175) ($13,195,874) ($13,923,600) ($15,950,951) Total Appropriation $113,740,223 $104,759,741 $140,864,150 $134,541,949 $96,078,101 Operating Transfers Out $16,647,663 $21,614,800 $12,316,679 $19,375,984 $9,406,728 Total Requirements $130,387,886 $126,374,541 $153,180,829 $153,917,933 $105,484,829 Revenue Taxes $36,920,100 $36,364,349 $40,215,500 $40,608,100 $42,045,300 State, Fed or Gov't Aid $12,435,830 $4,628,300 $4,308,811 $4,078,555 $3,111,144 Fee/Rate (3) $232,850 $1,417,834 $474,043 $367,600 $481,030 Other Revenue $2,362,150 $2,981,052 $12,225,491 $2,533,128 $5,006,025 Total Revenue $51,950,930 $45,391,535 $57,223,845 $47,587,383 $50,643,499 Operating Transfers In $23,113,619 $28,689,485 $13,616,679 $20,650,984 $11,514,576 Total Sources $75,064,549 $74,081,020 $70,840,524 $68,238,367 $62,158,075 Fund Balance (4) Use of/(contribution to) Fund Balance $43,326,754 Available Reserves $66,916,038 Total Fund Balance $55,323,337 $52,293,521 $82,340,305 $85,679,566 $110,242,792 Source: County of San Bernardino Adopted Budget for Fiscal Years through (1) Amounts represent original adopted budgets as shown in Adopted Budget books published annually by the County of San Bernardino. (2) There are no material adjustments to the Adopted Budget subsequent to adoption as of the date of this filing. (3) Includes property tax administriation fees paid, which reduces revenue reported in this category. (4) Beginning with fiscal year , governmental funds other than the County's general fund no longer budget amounts in Contigencies. Instead, amounts that are available but not budgeted to be spent are contributed to Reserves.

7 Statement of Revenues, Expenditures and Changes in Fund Balances SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Fiscal Year Ended June 30, 2012 through Fiscal Year Ended June 30, 2015 Fiscal Year Fiscal Year Fiscal Year Fiscal Year REVENUES Property Taxes (1) $36,414,505 $38,785,706 $41,750,750 $43,554,373 Other Taxes $400,475 $359,946 $353,225 $328,805 Interest $104,804 $105,878 $266,980 $141,417 Government aid $4,831,896 $4,907,693 $5,980,969 $4,711,891 Rents, concessions and royalties $925,721 $532,991 $582,280 $492,437 Intergovernmental $5,902,547 $0 $0 $0 Licenses, fees, and permits $0 $0 $0 $617,225 Other revenues $991,825 $2,292,020 $1,248,552 $159,263 Total Revenues $49,571,773 $46,984,234 $50,182,756 $50,005,411 EXPENDITURES Salaries and benefits $11,840,005 $12,132,645 $11,782,085 $11,653,066 Service and supplies $23,363,415 $17,169,171 $11,273,388 $16,873,989 Debt service Principal $3,345,000 $3,505,000 $4,665,000 $6,810,000 Interest $3,620,127 $3,303,339 $3,091,657 $2,904,469 Bond issuance costs $0 $0 $0 $0 Capital outlay $5,873,974 $4,282,431 $17,423,509 $4,860,644 Total Expenditures $48,042,521 $40,392,586 $48,235,639 $43,102,168 Excess (deficiency) of revenues over (under) expenditures $1,529,252 $6,591,648 $1,947,117 $6,903,243 OTHER FINANCING SOURCES (USES) Refunding bonds issued $0 $0 $0 $0 Discount on refunding bond issued $0 $0 $0 $0 Payment to refunded escrow agent $0 $0 $0 $0 Transfers Out $0 $0 $0 $0 Sale of capital assets $187,224 $1,207,513 $790,436 $1,262,749 Insurance Recoveries $0 $0 $0 $14,048,618 Total Other Financing Sources (Uses) $187,224 $1,207,513 $790,436 $15,311,367 EXTRAORDINARY ITEM Redevelopment Agency Allocation $0 $20,771,011 $0 $0 Net change in fund balance $1,716,476 $28,570,172 $2,737,553 $22,214,610 Fund Balance - beginning $59,090,401 $62,202,816 2 $90,772,988 $93,510,541 Fund Balance - ending $60,806,877 $90,772,988 $93,510,541 $115,725,151 Source: Annual Financial Reports (1) Amounts are exclusive of an administrative fee charged for property tax administration deducted from property tax revenues. (2) As restated from prior period.

8 Aggregate Annual Debt Obligations SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT LOANS PAYABLE June 30, 2015 (1) The District repaid the loan in Fiscal Year Army Corps of Year Ending Engineers June 30 San Timoteo (1) Subsequent to Source: Annual Financial Report for the Fiscal Year Ended June 30, 2015 $ - SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT BONDS PAYABLE June 30, 2015 Year Ending Judgment Obligation Refunding June 30 Bonds (1) Bonds Total Amount ,143,965 2,412,163 8,556, ,152,651 2,419,625 8,572, ,144,725 2,421,500 8,566, ,143,079 2,423,500 8,566, ,134,113 2,425,375 8,559, ,594,892 5,424,750 36,019, ,893, ,893, ,458, ,458, ,168, ,168,806 Total Payments $ 134,833,361 $ 17,526,913 $ 152,360,273 Less Amount Representing Interest $ 52,318,361 $ 2,811,913 $ 55,130,273 Total Principal $ 82,515,000 $ 14,715,000 $ 97,230,000 (1) Reflects interest on the $ million principal amount of variable rate bonds at an assumed interest rate of 4.85% per annum. Source: Annual Financial Report for the Fiscal Year Ended June 30, 2015

9 Outstanding Indebtedness Outstanding Indebtedness Bonded Indebtedness Series 2007 Refunding Bonds. In May 2007, the District issued its Refunding Bonds Series 2007 (the Series 2007 Refunding Bonds ) in the aggregate principal amount of $ million to refund the San Sevaine Creek Water Project Loan (defined herein). As of June 30, 2015, $ million in principal amount of the Series 2007 Refunding Bonds remains outstanding. Judgment Obligation Bonds. In May 2007, the District issued its Judgment Obligations Bonds, Series A (Auction Rate Bonds) in the aggregate principal amount of $58.78 million (the Series 2007A Judgment Obligation Bonds (ARB) ) and its Judgment Obligations Bonds, Series B (Auction Rate Bonds) in the amount of $45.0 million (the Series 2007B Judgment Obligation Bonds (ARB) ). The Series 2007A Judgment Obligation Bonds and the Series 2007B Judgment Obligation Bonds (ARB) were issued to pay the obligation of the District under a settlement agreement relating to an inverse condemnation action against the District. The Series 2007A Judgment Obligation Bonds were subsequently refunded with proceeds of the District s $ million Judgment Obligation Bonds, Series A (the Series 2007A Judgment Obligation Bonds ). In April 2008, the District issued Judgment Obligation Refunding Bonds, Series 2008 in the principal amount of $ million (the Series 2008 Bonds ) and used the proceeds thereof, together with available funds of the District, to refinance the Series 2007B Judgment Obligation Bonds (ARB). As of June 30, 2015, there is an outstanding $45.22 million principal amount of Series 2007A Judgment Obligation Bonds and $ million principal amount of Series 2008 Bonds. Loans. The District had outstanding one loan in the principal amount of $3.0 million with the Army Corps of Engineers (ACOE) for the San Timoteo Creek Project (herein defined) which was fully repaid as of June 30, Dissolution of Redevelopment Agencies In December 2011, the California Supreme Court upheld the constitutionality of ABX126 and ordered that the redevelopment agencies be dissolved on February 1, The impact of the dissolution of these agencies with respect to the agreements between the District and certain redevelopment agencies described in this section has been assessed, and the impact has been minimal. With the dissolution of the redevelopment agencies, the City of Rancho Cucamonga, acting in its capacity as the successor Agency to the Rancho Cucamonga Redevelopment Agency (RCRA), paid the District $12,781,577 on May 28, 2013, as final payment of funds due to the District for the Series 2007 Refunding Bonds. Of the amount received, $842,583 was used by the District to pay the City of Rancho Cucamonga for construction costs related to the East Avenue Storm Drain project. The balance of $11,938,994 was placed in reserves for future payments of the related bond debt. As of June 30, 2015, the balance remaining in reserves is $8,467,394. Reimbursement Agreements Payments to the District. Certain amounts owed by the District pursuant to its outstanding loans are subject to reimbursement pursuant to agreements with federal, State or local agencies for specific projects. Under these agreements, the District pays for all of the costs relating to a particular project and is reimbursed by government agencies for all or a portion of the costs relating thereto.

10 Outstanding Indebtedness San Sevaine Creek Water Project and Related Projects. The San Sevaine Creek Water Project was financed in part with a construction loan (as amended, the San Sevaine Creek Water Project Loan ) from the Bureau of Reclamation. The District repaid in full the San Sevaine Creek Water Project Loan with the proceeds of its Series 2007 Refunding Bonds. See Outstanding Indebtedness Bonded Indebtedness Series 2007 Refunding Bonds herein. The San Sevaine Creek Water Project included certain improvements to the San Sevaine Creek Channel System. In 2003, the City of Fontana and the District entered into an agreement (the Fontana Reimbursement Agreement ) pursuant to which the City of Fontana used a portion of its Fontana Flood Control Fees received pursuant to a drainage fee ordinance established by the City of Fontana to help finance various San Sevaine Creek Channel System improvements within the City of Fontana. To date the City of Fontana has contributed approximately $10.0 million for the channel construction from Jurupa Avenue to Philadelphia Street. The City of Fontana approved an amendment to the original agreement regarding the transfer to the District, which provides that, upon completion of the San Sevaine Creek Water Project, Fontana will continue to use a portion of its Flood Control Drainage Fees to help repay the Series 2007 Refunding Bonds. Since the amendment, as of June 30, 2015, the District has received $5,810,182 from the City to go towards the Refunding Bond payments. The San Sevaine Creek Channel System was completed in In 2008, the District and the City of Ontario entered into a reimbursement agreement pursuant to which the City of Ontario agreed to contribute $1.2 million for a share of project costs on the Etiwanda San Sevaine project. The Etiwanda/San Sevaine Project was completed in May The funds will be generated from the City of Ontario s Old Model Colony Development Impact Fees. As of June 30, 2015, the District has received $992,244 in reimbursement from the City of Ontario. The balance will be received when the Old Model Colony Development is completed. In September 2014, the District and the City of Rancho Cucamonga entered into an agreement for the City to reimburse the District for the cost of the District s consultant, HDR Engineering, to conduct a specialized study and analysis of San Sevaine Basins east levee, in the amount of $150,000. The District received $150,000 in October As of June 30, 2015, the project has not been completed, and the District has reimbursed HDR $128,629. San Timoteo Creek Project. The San Timoteo Creek Project is financed in part by a local cooperation agreement (the Cooperation Agreement ) among the District and the ACOE (the San Timoteo Loan ). Pursuant to the Cooperation Agreement, the District will repay the principal of and accrued interest on the San Timoteo Loan upon completion of the San Timoteo Creek Project. Construction work on the project has been completed and the loan was repaid as of June 30, 2015; however, ACOE has not yet finalized their project closeout. Upper Etiwanda Creek Improvement Project. In 2005, the District and the RCRA entered into Agreement No (the Upper Etiwanda Reimbursement Agreement ) pursuant to which the RCRA would use its accumulated tax increment funds to reimburse the District up to $25.0 million for construction of the Upper Etiwanda Creek Improvement Project. The agreement was amended in 2008 for additional funding in the amount of $6,778,500 for a total $31,778,500. Total project costs are approximately $108.0 million. Prior to the dissolution of the RCRA in 2012, the RCRA had reimbursed the District $29.4 million. The City of Rancho Cucamonga provided over $5.0 million from its drainage fees for the construction phase. In addition, the City of Rancho Cucamonga amended the aforementioned funding agreement to provide for the ongoing use of its drainage fees to assist the District in the annual

11 Outstanding Indebtedness payment of the Series 2007 Refunding Bonds described herein. As of June 30, 2015, the City of Rancho Cucamonga has contributed $662,678 in drainage fees to assist the District in the annual payment of the Series 2007 Refunding Bonds. Alabama Street at City Creek. The District currently has three cooperative agreements related to repairs needed to Alabama Street at City Creek which was severely damaged in the storms of January The first is a cooperative agreement for construction of the project among the District, the Inland Valley Development Agency (IVDA), and the Cities of Highland, San Bernardino, and Redlands. The second is a cooperative agreement for design among the District, the Inland Valley Development Agency, and the Cities of Highland, San Bernardino and Redlands. The third is a cooperative agreement with the County in accordance with County s cooperative agreement with the Federal Highway Administration (FHWA) and the State of California Office of Emergency Services (OES) for design and construction. Construction was completed on December 5, 2014, and the total project cost was $3,434,242. FHWA awarded 88.53% and OES awarded 8.6% of allowable project costs. The remaining cost share anticipated to be approximately $688,602 is to be shared equally among the five parties to the second agreement. The District has been reimbursed $1,818,783 by the parties of the second agreement. Upon receiving final reimbursement of allowable costs from FHWA and OES, the District will reimburse any funds received in excess of their final cost share based on the total project cost. As of June 30, 2015, the District has not received final reimbursement from FHWA and OES. Amethyst Basin. In March 2014, the District was awarded a grant in the amount of $5.42 million from the California Department of Water Resources (DWR) under the Stormwater Flood Management Program towards the construction of the Amethyst Basin. The total cost of the project is approximately $12.8 million with the State reimbursement to be approximately 50% of eligible project costs up to a maximum of $5.42 million. Funding for the grant is provided on a reimbursement basis after the District incurs its share of costs. A majority of the reimbursement is anticipated to be received in fiscal year after the District completes construction of the project. The project is currently in the engineering phase with construction anticipated for the fall of As of June 30, 2015, the District has received $85,331 in reimbursement from DWR. Emergency Response. The District entered into a Memorandum of Understanding (MOU) with Ventura County Watershed Protection District, the National Weather Service Oxnard Office, the National Service San Diego Office, Orange County, San Diego County and Santa Barbara County in which the parties agreed to partner on a application to submit to the California State Department of Water Resources Hydrology and Flood Operations Office Flood Emergency Response Grant Program to upgrade the Automated Local Evaluation in Real Time (ALERT) flood warning system in Southern California to ALERT2 capacity project. The Parties project application was successful and awarded in September The Project total was $839,356, with District s share being approximately $71,027. The funds will be used to purchase and install the required backbone equipment, including receiver/decoder and repeater bundles. The County of Ventura is currently doing an inventory of equipment; and therefore, the District has not yet purchased the equipment. Cactus Basins #3 and #4. The Cactus Basins #3 and #4 projects are the construction of a regional flood control basin and dam. In September 2012, the District entered into an agreement to accept grant funding from DWR, Proposition 84, through the Santa Ana Watershed Project, in the amount of $1.0 million, towards the design and construction of the Cactus Basin #3 project. In 2015, the District reached a settlement of litigation with the City of Rialto, Caltrans, and San Bernardino Associated Governments in the amount of $16.0 million towards the construction of Cactus Basins #3 and #4 with funding to be

12 Outstanding Indebtedness received upon completion of performance-based milestones. The combined total cost of these projects is approximately $37.5 million, and the remainder will be funded by the District. The construction of Cactus Basin #3 is anticipated to start in the winter of 2016 with completion in the summer of Cactus Basin #4 is currently in the design phase with construction planned to start in As of June 30, 2015, the District has not received reimbursement for these projects. Reimbursement Agreements Payments by the District. The District has debt obligations pursuant to certain expenditure agreements with local agencies. Under such agreements, the District contributes a specified amount to the local agency for projects for which the local agency is responsible. The reimbursement agreements discussed below are debt obligations of the District payable from any available revenues of the District, but are not secured by a pledge of Revenues as are the District s Series 2008 Bonds, Series 2007A Judgment Obligation Bonds and Series 2007 Refunding Bonds. English Channel Project. In 2004, the District entered into a reimbursement agreement with the City of Chino Hills in the amount of $433,208 in connection with preliminary engineering expenses relating to the English Channel project which the District has paid in its entirety. In 2006, the District entered into a reimbursement agreement with the City of Chino Hills pursuant to which the District agreed to contribute 50%, up to a maximum of $2.185 million of the construction costs relating to additional improvements for the English Channel project. Pursuant to the agreement, the District provided an initial advance of $300,000 to the City of Chino Hills with the balance of $1.885 million to be paid upon project completion and as funds become available to the District. The project was advertised and bids were received on December 1, Construction is completed; however, there are rights-of-way transactions to be completed. As of June 30, 2015, the District has reimbursed the City of Chino Hills $709,475 in construction costs. The remaining contract balance is $1,475,525. The District anticipates final reimbursement to the City of Chino Hills in Cucamonga Drain Project. In 2006, the District entered into an agreement with the City of Rancho Cucamonga pursuant to which the District agreed to reimburse the City of Rancho Cucamonga 50% of the total construction costs, up to a maximum of $2.6 million, relating to the upgrade of the Cucamonga Drain to accommodate 100-year storm flows. The estimated construction costs of this project are $5.17 million. Pursuant to the Cucamonga Reimbursement Agreement, amounts in excess of the District s portion of the total construction costs will be paid by the City of Rancho Cucamonga. The project is complete, and the District anticipates final reimbursement to the City of Rancho Cucamonga in Victorville Regional Flood Control Facility (Line E-01) Segment Project. On May 13, 2006, the District entered into a reimbursement agreement with the City of Victorville wherein the District agreed to reimburse the City of Victorville up to a maximum of $1.0 million towards construction engineering and construction of the Line E-01 culvert extension, which traverses the NW corner of Route-18 and Highway 395. Pursuant to the agreement, the District will reimburse the City for project costs within 30 days of receipt of an itemized invoice. Amounts in excess of the District s $1.0 million will be paid by the City of Victorville. This project is in the design phase, and the District has reimbursed the City of Victorville $103,134 as of June 30, 2015.

13 Outstanding Indebtedness Forest Insect Infestation. The District has an agreement with the California State Department of Forestry and Fire Protection for the control of forest insect infestation damaging or threatening destruction of timber or forest growth. The total cost associated with the agreement is $1,403,470 for the period of July 1, 2013 through June 30, The District agreed to pay up to $405,600 of the total costs. The District will reimburse the Department of Forestry and Fire Protection on a quarterly basis upon receipt of an itemized invoice. As of June 30, 2015, the District has reimbursed the California Department of Forestry and Fire Protection $126,200. Kitchen Dean Wash, Laverne Avenue and Avenue I Project. In May 2013, the District entered into a 6-year agreement with the City of Barstow for cost participation of three drainage improvement projects: Kitchen Dean Wash, Avenue I Drainage, and Laverne Drainage. The District agreed to fund up to $8,586,691 toward construction. The District reimbursed the City of Barstow $3,887,923 in 2015 for the completion of Kitchen Dean Wash. The remaining balance of $4,698,768 for Avenue I Drainage and Laverne Drainage will reimbursed through Other Reimbursement Agreements. The District entered into agreements to reimburse the Cities of Colton and San Bernardino an aggregate amount of $1.576 million for improvements in connection with the Randall Basin project, with $561,456 paid to the City of Colton as of June 30, There is also an agreement with the City of Colton for $205,000 for the design of Comprehensive Storm Drain Plan 3-5/Randall Channel with $92,274 paid to the City of Colton as of June 30, The project is complete and final payment is pending a review with the Cities of Colton and San Bernardino. The District anticipates the final payment will be made in The District has an agreement with the Town of Apple Valley for Yucca Loma storm drain for $3.4 million; an agreement for $300,000 with the City of Yucaipa for cost participation on the local sponsor share of an ACOE study on Yucaipa Streams Ecosystems, which has not been completed; an agreement with the City of Yucaipa to contribute $1.207 million for the construction of Wildwood Creek Basin (District has paid $808,690 through June 30,2015); an agreement with the San Bernardino Valley Municipal Water District to develop a Santa Ana River Habitat Conservation Plan with the District s share of cost at $121,348 (District has paid $40,449 through June 30, 2015); an agreement with the City of Adelanto for $25,000 to participate on a Master Plan of Drainage (MPD); an agreement with the City of Victorville to contribute $100,000 toward the MPD inventory (District has paid $56,828 through June 30, 2015); and an agreement with the Town of Apple Valley to contribute up to $312,500 towards updating the Apple Valley MPD. Contemplated Reimbursement Agreements. Other contemplated agreements include: Cactus Basin # 3 Street Improvements with the City of Rialto; an MOU for the Amethyst Basin project with Mojave Water Agency; an MOU for the Desert Knolls Wash with the Lewis Center; an agreement with the City of Fontana for pass through grant funding for the West Fontana Channel project; an agreement with the City of Ontario for the Francis Street storm drain project; and an agreement with West Valley Water District for water spreading in Cactus Basin No. 2.

14 Pooled Investment Fund of the County COUNTY OF SAN BERNARDINO POOLED INVESTMENT FUND OF THE COUNTY As of June 30, 2015 (1) Security Type Amortized Cost (1) Market Value U.S. Treasury Securities $743,709,070 $745,206,635 U.S. Government Agencies 1,990,464,114 1,992,348,127 Repurchase Agreements 0 0 Reverse Repurchase Agreements 0 0 Supranationals 124,924, ,010,550 Negotiable Certificates of Deposit 800,000, ,587,532 Commercial Paper 809,328, ,742,060 Municipal Bonds 0 0 Money Market Mutual Funds 150,000, ,000,000 Insured Placement Service Accounts 50,000,000 50,000,000 JPA Investment Pools 130,000, ,000,000 Medium Term Notes 126,407, ,058,783 Total Securities (2)(3) $4,924,834,115 $4,927,953,687 Source: County of San Bernardino, Auditor-Controller/Treasurer/Tax Collector Amortized Cost used in this schedule differs from the portfolio performance reports prepared by Public Financial Management (PFM) and published on the San Bernardino County Auditor- Controller/Treasurer/Tax Collector website. The difference is due to different frequencies for calculation. The County's figure is used in the schedule above. (2) Does not include accrued interest of $7,896,903 or cash balances of $183,155,878. (3) Amounts may not total due to rounding.

15 CONTINUING DISCLOSURE AGREEMENT $58,355,000 Judgment Obligation Bonds, Series 2007 A (Fixed Rate Conversion) The SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT (the District ), in connection with $58,355,000 principal amount of District 2007 Judgment Obligation Bonds (Fixed Rate Conversion), encloses the following information pursuant to the Continuing Disclosure Agreement dated May 1, 2007: 1. Assessed Valuations. 2. Tax Levies and delinquencies for real property located in the District. 3. An update of the information contained in Table No. 2 of the forepart of the Official Statement. 4. The District s Adopted Budget for the current fiscal year. 5. Summary of Aggregate Annual Debt Obligations. 6. An update of the information in Table No. 1 contained in Appendix A to the Official Statement. 7. An update of the information in Table No. 4 contained in Appendix A to the Official Statement. 8. An update of the information contained in Appendix A to the Official Statement under the heading titled Outstanding Indebtedness. In regards to significant events, there have been no material occurrences in: A. Principal and interest payment delinquencies. B. Non-payment related defaults. C. Unscheduled draws on debt service reserves reflecting financial difficulties. D. Unscheduled draws on credit enhancements reflecting financial difficulties. E. Substitution of credit or liquidity providers, or their failure to perform. F. Adverse tax opinions or events affecting the tax-exempt status of the security. G. Modifications to rights of security holders. H. Contingent or unscheduled bond calls. I. Defeasances. J. Release, substitution, or sale of property securing repayment of the securities. Dated: February 29, 2016 SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT By /s/ Gary McBride Deputy Executive Officer Acting ex-officio on behalf of the District

16 CUSIPs $58,355,000 Judgment Obligation Bonds, Series 2007 (Fixed Rate Conversion) MATURITY DATE CUSIP MATURITY DATE CUSIP August 1, AL8 August 1, AQ7 August 1, AM6 August 1, AR5 August 1, AN4 August 1, AS3 August 1, AP9 August 1, AT1

17 CONTINUING DISCLOSURE AGREEMENT $23,845,000 Refunding Bonds, Series 2007 The SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT (the District ), in connection with $23,845,000 principal amount of District 2007 Refunding Bonds, encloses the following information pursuant to the Continuing Disclosure Agreement dated May 1, 2007: 1. Assessed Valuations. 2. Tax Levies and delinquencies for real property located in the District. 3. An update of the information contained in Table No. 2 of the forepart of the Official Statement. 4. The District s Adopted Budget for the current fiscal year. 5. Summary of Aggregate Annual Debt Obligations. 6. An update of the information in Table No. 1 contained in Appendix A to the Official Statement. 7. An update of the information in Table No. 4 contained in Appendix A to the Official Statement. 8. An update of the information contained in Appendix A to the Official Statement under the heading titled Outstanding Indebtedness. In regards to significant events, there have been no material occurrences in: A. Principal and interest payment delinquencies. B. Non-payment related defaults. C. Unscheduled draws on debt service reserves reflecting financial difficulties. D. Unscheduled draws on credit enhancements reflecting financial difficulties. E. Substitution of credit or liquidity providers, or their failure to perform. F. Adverse tax opinions or events affecting the tax-exempt status of the security. G. Modifications to rights of security holders. H. Contingent or unscheduled bond calls. I. Defeasances. J. Release, substitution, or sale of property securing repayment of the securities. Dated: February 29, 2016 SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT By /s/ Gary McBride Deputy Executive Officer Acting ex-officio on behalf of the District

18 CUSIPs $23,845,000 Refunding Bonds, Series 2007 MATURITY DATE CUSIP MATURITY DATE CUSIP August 1, P AJ8 August 1, P AM1 August 1, P AK5 August 1, P AN9 August 1, P AL3 August 1, P AP4