AGENDA OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THEFORMERHEMETREDEVELOPMENTAGENCY

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1 AGENDA OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THEFORMERHEMETREDEVELOPMENTAGENCY Wednesday February 25, :00p.m. City of Hemet - City Hall 2nd Floor- Board Room Conference Room 445 E. Florida Avenue Please silence all cell phones. *Notice: Members of the Public attending shall comply with the City's adopted Rules of Decorum in Resolution No A copy of the Rules of Decorum is available from the City. 1. Call to Order - ROLL CALL: Oversight Board Members: CHAIRPERSON -Vincent Christakos: Representing Riverside County Office of Education (from HUSD) VICE-CHAIRPERSON- Becky Elam: Representing Mt. San Jacinto Community College District Alan Callahan: Representing Riverside County Board of Supervisors 3rd District Public Representative Bobbie Christie: Representing Riverside County Board of Supervisors 3rd District Superviso-r's Representative John Jansons: Representing Affected Redevelopment Agency Employee Phillip Paule: Representing Eastern Municipal Water District or Charles Turner -Alternate Greg Vasquez: Representing Hemet City Council Appointee 2. Notice of Opportunity for Public Comment Anyone who wishes to address the Oversight Board regarding items not on the agenda may do so at this time. As a courtesy, please complete a Request to Speak Form, at the Secretary's Desk. Submit your completed form to the Secretary prior to the beginning of the meeting. Presentations are limited to three minutes in consideration of others who are here for agenda items. Please come forward to the lectern when the Chairperson calls upon you. When you are recognized, you may proceed with your comments. *Notice: Members of the Public attending shall comply with the City's adopted Rules of Decorum in Resolution No A copy of the Rules of Decorum is available from the City. Page 1 of 2

2 The Oversight Board is prohibited from taking action or discussing any item not appearing on the agenda except for brief responses to statements made or questions posed by the public. In addition, they may, on their own initiative or in response to questions posed by the public, ask a question for clarification, provide a reference to staff or other resources for factual information, or request staff to report back to them at a subsequent meeting. Furthermore, a member of the Oversight Board itself may take action to direct staff to place a matter of business on a future agenda. 3. Action Items: A. Consideration of approval of minutes from October 22, By: Chairman Christakos Recommendation: Approve B. Adopt OB Resolution No , Approving the ROPS 15-16A By: Hitta Mosesman, RSG (Representing Successor Agency) C. Review of Governor's proposed changes to RDA dissolution By: Hitta Mosesman, RSG (Representing Successor Agency) D. Update on next steps for Property Disposition By: Hitta Mosesman, RSG (Representing Successor Agency) 4. Future Agenda Items If Members of the Oversight Board or Successor Agency have items for consideration at the next Oversight Board meeting, please state the agenda item to provide direction to the Successor Agency staff. 5. Next Meeting Date- Wednesday, March 25, 2015 at 3:00p.m. 6. Adjournment END St~ff reports and other disclosable public records related to the Oversight / Board meetings are available at the Secretary's Office at 445 E. Florida /r' Avenue during normal business hours. Page 2 of 2

3 Agenda Item 3A MINUTES OVERSIGHT BOARD OF THE DISSOLVED HEMET REDEVELOPMENT AGENCY Wednesday October 22, :00p.m. City of Hemet - City Hall 2nd Floor- Board Room Conference Room 445 E. Florida Avenue 1. Call to Order - ROLL CALL: Oversight Board Members: Chairperson Christakos called the meeting to order at 3:02 p.m. Board Members Callahan, Christie, Jansons and Chairperson Christakos were present. Board Members Paule and Vasquez and Vice Chairperson Elam were absent. 2. Notice of Opportunity for Public Comment There were no public comments presented at this time. 3. Action Items: A. Consideration of approval of minutes from September 24, By: Chairman Christakos Recommendation: Approve Board Member Christie moved and Board Member Jansons seconded a motion to approve this item as presented. Motion carried 4-0. B. Adopt OB Resolution No , Approving the Third Amendment to County of Riverside Settlement Agreement By: Curt M. de Crinis, C.M.de Crinis & Co., Inc. Hitta Mosesman, recommended that the Board adopt the resolution approving the third amendment to the settlement agreement with the County of Riverside Board Member Christie moved and Board Member Jansons seconded a motion to approve this item as presented. Motion carried 4-0. Vice Chairperson Elam arrived at 3:07p.m. C. Adopt OB Resolution No , Confirming the Issuance of Tax Allocation Refunding Bonds By: Curt M. de Crinis, C.M.de Crinis & Co., Inc. Page 1 of 2

4 Hitta Mosesman, recommended that the Board adopt the resolution confirming the issuance of tax allocation refunding bonds pursuant to an indenture of trust, approving preliminary and final official statements. Vice Chairperson Elam moved and Board Member Callahan seconded a motion to approve this item as presented. Motion carried Future Agenda Items There were no future agenda items requested at this time. 5. Next Meeting Date- February 25, 2015 at 3:00 p.m. 6. Adjournment Vice Chairperson Elam moved and Board Member Christie seconded a motion to adjourn the meeting at 3:16p.m. Motion carried 5-0. fev1e._,(>j! -/1/ Page 2 of 2

5 Agenda Item 38 OVERSIGHT BOARD OF THESUCCESSORAGENCYTO THEFORMERHEMETREDEVELOPMENTAGENCY TO: FROM: MEETING DATE: RE: Chairman Christakos and Members of the Oversight Board Successor Agency /'J/ February 25, 2015 Approving the Recognized Obligation Payment Schedule for the Successor Agency to the Former Hemet Redevelopment Agency for the July 1, 2015 through December 31, 2015 Time Period (ROPS 15-16A) Pursuant to Assembly Bill X1 26 RECOMMENDATION: It is respectfully recommended that the Oversight Board of the Successor Agency to the Former Hemet Redevelopment Agency ("Oversight Board") adopt Oversight Board OB Resolution No approving the Recognized Obligation Payment Schedule for the Successor Agency to the Former Hemet Redevelopment Agency ("Successor Agency") for the six-month time period covering July 1, 2015 through December 31, 2015 (''ROPS 15-16A"). BACKGROUND: Assembly Bill ("AB") x1 26 requires that all successor agencies to former redevelopment agencies throughout California prepare a Recognized Obligation Payment Schedule ("ROPS") for every six month period (i.e., two ROPS per year) for submittal to the California State Department of Finance ("DOF"), the State Controller's Office, and the appropriate county's Auditor-Controller. AB x1 26 further requires that the oversight board to a successor agency approve all ROPS prior to submittal to DOF. AB 1484 further clarifies that all oversight board approvals and actions be accomplished by resolution. This is the eighth ROPS prepared by the Successor Agency. DISCUSSION: The ROPS 15-16A contains the same sections as the previous three ROPS, including: 1) A summary page; 2) A detailed description of requested funding for the upcoming period; 3) An account of cash balances for the current and previous period; 4) A report of requested and actual expenditures for the previous period; and 5) An opportunity to add notes to explain parts of the ROPS. Page 1 of 4

6 In total, the Successor Agency is requesting $368,799 for the upcoming period for the following items: 1) Fiscal Agent Administrative Fees; 2) Successor Agency Administrative Costs; 3) Tax Allocation Refunding Bond Payment; 4) Payment for the Hemet Unified School District Pass Through Settlement Agreement; and 5) Payment for the Riverside County Office of Education Pass Through Settlement Agreement. Other items, including Tax Allocation Bond payments, payments related to Stetson Crossing, and repayment of a loan from the City of Hemet were, or will be, retired from the ROPS because the Successor Agency no longer needs to request funding for these items. Fiscal Agent Administrative Fee With the refunding of the 1999-A and the 2002-A Tax Allocation Bonds (as approved by the Oversight Board in OB Resolution No on August 27, 2014 and OB Resolution No on October 22, 2014) the annual Fiscal Agent Administrative Fee increased from $4,200 to $5,951. In addition, the Successor Agency incurred a one-time fee of $18,000 for the refunding. The amount requested by the Successor Agency for this item includes the one-time fee, the annual fee for 2015, and the difference between the new annual fee and the previous annual fee for 2014 to account for the difference in expected versus actual expenditures. Successor Agency Administrative Costs The current law provides for a minimum of $250,000 annually (or $125,000 per sixth month ROPS period) to fund administrative expenses. The Successor Agency has historically split this amount equally between each six-month period. As shown on the prior period adjustments tab, the entire $125,000 requested for the 14-15A period was spent. The Successor is requesting $125,000 for the 15-16A period as well. Tax Allocation Refunding Bond Payment The Refunding Bonds were issued on December 23, The bond issuance document, together with the final debt service schedule, is attached as Exhibit "B". In accordance with the terms of the bond issuance, the Successor Agency is required to prepare payment for the following year of debt service payments. The Successor Agency requested $929,313 in ROPS 14-15B based on a preliminary debt service schedule. The attached debt service schedule differs from the preliminary version, so the Successor Agency requests an additional amount of $159,919 to pay the initial interest and first year's debt service payments. It should be noted that the revised debt service schedule will save $200,773 over the term of the bonds compared to the preliminary debt service schedule. This is in addition to the $3,241,064 initially estimated savings based on the preliminary refunding bonds debt service schedule compared to the debt service schedules of the original bonds. Page 2 of 4

7 Hemet Unified School District Pass Through Settlement The Successor Agency is requesting $29,579 to pay the amount due according to the Hemet Unified School District Pass Through Settlement Agreement ("HUSD Agreement"), approved by the Oversight Board in OB Resolution No on September 24, This will be the second in a series of six equal payments made according to the HUSD Agreement. Riverside Countv Office of Education Pass Through Settlement The Successor Agency is requesting $28,599 to pay the amount due according to the Riverside County Office of Education Pass Through Settlement Agreement ("RCOE Agreement"), approved by the Oversight Board in OB Resolution No on September 24, This will be the first in a series of six equal payments made according to the RCOE Agreement. Prior Period Adjustments and Cash Balances Prior Period Adjustments represent the difference between requested funds and actual expenditures for the prior period, or in this case the 14-15A period. This difference is withheld from the following period's distribution of funds to ensure that successor agencies spend all requested funds. The Successor Agency spent all requested funds in the 14-15A period. Therefore, the Prior Period Adjustment for the 15-16A period will be $0. The Cash Balances page shows the inflow and outflow of funds held by the Successor Agency. Funds are being spent in a timely manner and consistent with the approvals of the Oversight Board and DOF. Submittal to the California Department of Finance AB x1 26 requires that the ROPS 15-16A be approved by the Oversight Board and submitted to DOF, the State Controller's Office, and the Riverside County Auditor-Controller no later than March 3, If this deadline is not met, the City of Hemet (as the City and not as the Successor Agency) will be required to pay a $10,000 per day fine. CONCLUSION Successor Agency staff recommends that the Oversight Board adopt OB Resolution No approving the ROPS 15-16A. Recommended By: John Jansons Community Investment Director (for the Successor Agency) Jessica A. Hurst Deputy City Manager/ Administrative Services Director (for the Successor Agency) Attachments: Page 3 of 4

8 1. OB Resolution No , approving the Recognized Obligation Payment Schedule for the Successor Agency to the Former Hemet Redevelopment Agency for the sixmonth time period covering July 1, 2015 through December 31, 2015 Page 4 of 4

9 OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE FORMER HEMET REDEVELOPMENT AGENCY OB RESOLUTION NO A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE FORMER HEMET REDEVELOPMENT AGENCY APPROVING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE SUCCESSOR AGENCY TO THE FORMER HEMET REDEVELOPMENT AGENCY FOR THE JULY 1, 2015 THROUGH DECEMBER 31, 2015 TIME PERIOD (ROPS 15-16A) PURSUANT TO ASSEMBLY BILL X1 26 WHEREAS, the Former Redevelopment Agency of the City of Hemet ("Former Agency") was established as a redevelopment agency previously organized and existing under the California Community Redevelopment Law, Health and Safety Code ("H&SC") Section 33000, et seq. ("CRL"), and previously authorized to transact business and exercise powers of a redevelopment agency pursuant to action of the City Council of the City of Hemet ("City"); and WHEREAS, Assembly Bill x1 26 chaptered and effective on June 27, 2011 added Parts 1.8 and 1.85 to Division 24 of the California H&SC, which caused the dissolution of all redevelopment agencies and winding down of the affairs of former agencies, including as such laws were amended by Assembly Bill 1484 chaptered and effective on June 27, 2012 (together, the "Dissolution Act"); and WHEREAS, as of February 1, 2012 the Agency was dissolved pursuant to the Dissolution Act, and as a separate legal entity the City serves as the Successor Agency to the Hemet Redevelopment Agency ("Successor Agency"); and WHEREAS, the Successor Agency administers the enforceable obligations of the former Agency and otherwise unwinds the Agency's affairs, all subject to the review and approval by a seven-member oversight board ("Oversight Board"); and WHEREAS, pursuant to H&SC Section 34177(m), the Successor Agency is required to prepare and submit an Oversight Board-approved Recognized Obligation Payment Schedule (''ROPS") for each six-month fiscal period, as prescribed by the California Department of Finance ("DOF"), to DOF, the State Controller's Office, and the Riverside County Auditor-Controller for their consideration; and WHEREAS, the Successor Agency prepared a ROPS for the six month time period covering July 1, 2015 through December 31, 2015 ("ROPS 15-16A"), shown as Exhibit "A", pursuant to the requirements of AB x1 26 and hereby submits the ROPS 15-16A to the Oversight Board; and

10 WHEREAS, the Dissolution Act requires that the Oversight Board approve the ROPS 15-16A prior to submittal to DOF by March 3, 2015 in order for the Successor Agency to receive requested funds in a timely manner. NOW THEREFORE BE IT RESOLVED, DETERMINED, AND ORDERED by the Oversight Board of the Successor Agency to the Former Hemet Redevelopment Agency, in regular session assembled February 25, 2015 as follows: 1. Recitals. The Recitals set forth above are true and correct and incorporated herein by reference. 2. Approval of ROPS 15-16A. Pursuant to the Dissolution Act, the Oversight Board approves the ROPS 15-16A. 3. Transmittal of ROPS 15-16A. The Oversight Board directs City staff to transmit the ROPS 15-16A to the California Department of Finance, the State Controller's Office, and the Riverside County Auditor-Controller no later than March 3, 2015 for review and approval. 4. Posting. An authorized designee of the Successor Agency is directed to post this Resolution on the Successor Agency website pursuant to the Dissolution Act. 5. Certification. The Oversight Board Secretary shall certify to the adoption of this Resolution. PASSED, APPROVED, and ADOPTED by the Oversight Board of the Successor Agency to the Former Hemet Redevelopment Agency at a regular meeting held on this 25 1 h day of February, 2015 by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Vincent Christakos Oversight Board Chairperson ATTEST: Sarah McComas Oversight Board Secretary

11 EXHIBIT "A" ROPS 15-16A

12 EXHIBIT "B" Hemet Successor Agency 2014 Refunding Bonds Issuance Document

13 Recognized Obligation Payment Schedule (ROPS 15-16A) - Report of Cash Balances (Report Amounts in Whole Dollars) Pursuant to Health and Safety Code section (I), Redevelopment Property Tax Trust Fund (RPTIF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation. For tips on how to complete the Report of Cash Balances Form, see A B C 0 I E F I G I H I Fund Sources Bond Proceeds Reserve Balance Other RPTIF Prior ROPS Prior ROPS period balances RPTIF Bonds Issued on and DDR RPTTF distributed as Rent, Non-Ad min or before Bonds Issued on balances reserve for future Grants, and Cash Balance Information by ROPS Period 12/31/10 or after 01/01/11 retained period(s) Interest. Etc_ Admin Comments ROPS 14-15A Actuals (07/01/14-12/31/14) 1 Beginning Available Cash Balance (Actual 07/01/14) Revenue/Income (Actual 12/31/14) RPTIF amounts should tie to the ROPS 14-15A distribution from the County Auditor-Controller during June , Expenditures for ROPS 14-15A Enforceable Obligations (Actual 12/31/14) RPTIF amounts, H3 plus H4 should equal total reported actual expenditures in the Report of PPA, Columns L and Q Retention of Available Cash Balance (Actual12/31/14) RPTIF amount retained should only include the amounts distributed as reserve for future period(s) 5 ROPS 14-15A RPTTF Prior Period Adjustment RPTTF amount should tie to the self-reported ROPS 14-15A PPA in the Report of PPA, Column S No entry required 6 Ending Actual Available Cash Balance C tog= ( ), H = ( ) $ $ $ $ $ $ 59,737 ROPS 14-15B Estimate (01/01/15-06/30/15) 7 Beginning Available Cash Balance (Actual 01/01/15) (C, 0, E, G = 4 + 6, F = H4 + F4 + F6, and H = 5 + 6) $ $ $ $ $ $ 59, Revenue/Income (Estimate 06/30/15) RPTTF amounts should tie to the ROPS distribution from the County Auditor-Controller duringjanuary Expenditures for ROPS 14-15B Enforceable Obligations (Estimate 06/30/15) Retention of Available Cash Balance (Estimate 06/30/15) RPTIF amount retained should only include the amounts distributed as reserve for future period( s) 11 Ending Estimated Available Cash Balance ( ) $ $ $ _ $ _ $ _ $

14 Recognized Obligation Payment Schedule (ROPS 15-16A) - Report of Cash Balances (Report Amounts in Whole Dollars) Pursuant to Health and Safety Code section (I), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation. For tips on how to complete the Report of Cash Balances Form, see httos://rad.dof.ca.e:ov/rad- A B c I D I E I F I G H I Fund Sources Bond Proceeds Reserve Balance Other RPTTF Prior ROPS Prior ROPS period balances RPTTF Bonds Issued on and DDR RPTTF distributed as Rent, Non-Admin or before Bonds Issued on balances reserve for future Grants, and Cash Balance Information by ROPS Period 12/31/10 or after 01/01/11 retained period(s) Interest, Etc. Admin Comments ROPS 14-15A Actuals (07/01/14-12/31/14) 1 Beginning Available Cash Balance (Actual 07/01/14) 2 Revenue/Income (Actual12/31/14) RPTTF amounts should tie to the ROPS 14-15A distribution from the County Auditor-Controller during June Expenditures for ROPS 14-15A Enforceable Obligations (Actual 12/31/14) RPTTF amounts, H3 plus H4 should equal total reported actual expenditures in the Report of PPA, Columns L and Q 4 Retention of Available Cash Balance (Actual 12/31/14) RPTTF amount retained should only include the amounts distributed as reserve for future period{s) 5 ROPS 14-15A RPTTF Prior Period Adjustment RPTTF amount should tie to the self-reported ROPS 14-15A PPA in the Report of PPA, Column S No entry required 6 Ending Actual Available Cash Balance C to G = ( ), H = ( ) s - s - $ - s - $ - $ 59,737 ROPS 14-15B Estimate (01/01/15-06/30/15) 7 Beginning Available Cash Balance (Actual 01/01/15) (C, D, E, G = 4 + 6, F = H4 + F4 + F6, and H = 5 + 6) 328, , ,965 $ - s - s - $ - s - $ 59,737 8 Revenue/Income (Estimate 06/30/15) RPTTF amounts should tie to the ROPS distribution from the County Auditor-Controller duringjanuary ,033,356 9 Expenditures for ROPS 14-15B Enforceable Obligations (Estimate 06/30/15) 1 093, Retention of Available Cash Balance (Estimate 06/30/15) RPTTF amount retained should only include the amounts distributed as reserve for future period{s) 11 Ending Estimated Available Cash Balance ( ) s - $ - $ - s - s - s - -

15 Notwithstanding anything in the Indenture (as hereinafter defined) to the contrary, so long as MUFG Union Bank, N.A., as trustee under the Authority Bonds Indenture (as defined in the Indenture), or any successor trustee thereunder, is the registered owner of all of the Bonds (as hereinafter defined) and the Riverside County Public Financing Authority is the beneficial owner of all of the Bonds, the aggregate principal amount of the Bonds shall be represented by a single form of Bond and payments of principal of and interest on the Bonds shall be made to the Trustee in accordance with Schedule A attached hereto. No. R-1 *""'$11,11 0,000.00*** UNITED STATES OF AMERICA STATE OF CALIFORNIA SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY HEMET REDEVELOPMENT PROJECT TAX ALLOCATION REFUNDING BONDS, SERIES 2014 MATURITY DATE: ORIGINAL ISSUE DATE: September 1, 2031 December 23, 2014 REGISTERED OWNER: MUFG UNION BANK, N.A. PRINCIPAL AMOUNT: ***ELEVEN MILLION ONE HUNDRED TEN THOUSAND DOLLARS* The SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY, a public entity duly existing under the laws of the State of California (the "Agency"), for value received, hereby promises to pay (but only out of the Tax Revenues and other moneys and securities hereinafter referred to) to the Registered Owner identified above or registered assigns (the "Registered Owner"), on the Maturity Date identified above, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Rate of Interest identified above in like lawful money from the date hereof, which date shall be the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond unless this Bond is authenticated on or before an Interest Payment Date and after the fifteenth calendar day of the month preceding such Interest Payment Date (a "Record Date"), in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to February 15, 2015, in which event it shall bear interest from the Original Issue Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or made available for payment), payable semiannually on March 1 and September 1 in each year, commencing March 1, 2015 (the "Interest Payment Dates"), until payment of such Principal Amount in full. SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY (California) Tax Allocation Refunding Bonds Page 1 of 9

16 The Principal Amount hereof is payable upon presentation hereof at the principal corporate trust office of MUFG Union Bank, N.A., as trustee (the "Trustee"), in Los Angeles, California or such other location as the trustee may designate. Interest hereon is payable by check of the Trustee mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of such Registered Owner as it appears on the registration books of the Trustee as of the preceding Record Date; provided that at the written request of the owner of at least $1,000,000 aggregate principal amount of Bonds, which written request is on file with the Trustee prior to any Record Date, interest on such Bonds shall be paid on the succeeding Interest Payment Date by wire transfer to an account of a financial institution within the United States of America as shall be specified in such written request. This Bond is one of a duly authorized issue of bonds of the Successor Agency designated as the "Successor Agency to the Hemet Redevelopment Agency Hemet Redevelopment Project Tax Allocation Refunding Bonds, Series 2014" (the "Bonds") of an aggregate principal amount of Eleven Million One Hundred Ten Thousand Dollars ($11, 11 0,000.00) all of like tenor and date (except for such variation, if any, as may be required to designate varying numbers, maturities, interest rates or redemption provisions) and all issued pursuant to the provisions of the Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State (the "Refunding Law"), the Dissolution Act (as such term is defined in the Indenture), and the Community Redevelopment Law, constituting Part 1 of Division 24 of the California Health and Safety Code (the "Redevelopment Law"), and pursuant to an Indenture of Trust, dated as of December 1, 2014, by and between the Successor Agency and the Trustee (the "Indenture"). The Successor Agency may issue or incur additional obligations on a parity with the Bonds, but only subject to the terms of the Indenture. Reference is hereby made to the Indenture (copies of which are on file at the office of the Successor Agency) and all supplements thereto and to the Refunding Law, the Dissolution Act and the Redevelopment Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Tax Revenues, as that term is defined in the Indenture, and the rights thereunder of the owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Successor Agency thereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees. The Bonds have been issued by the Successor Agency to finance and refinance redevelopment activities of the Successor Agency. This Bond and the interest hereon and all other parity obligations and the interest thereon (to the extent set forth in the Indenture) are payable from, and are secured by a charge and lien on the Tax Revenues derived by the Successor Agency from the Hemet Redevelopment Project Area in the City of Hemet (the "Project Area"), a duly designated redevelopment project under the laws of the State of California, under and in accordance with the Indenture. As and to the extent set forth in the Indenture, all of the Tax Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, the Refunding Law and the Dissolution Act and the Redevelopment Law, to the payment of the principal of and interest and premium (if any) on the Bonds and any such parity obligations. The Bonds and any such parity obligations are secured by a pledge on, security interest in and lien on the Tax Revenues which is subordinate to or on a parity with the pledge, security interest and lien on the Tax Revenues in favor of certain outstanding obligations of the Successor Agency, as provided in the Indenture. Notwithstanding the foregoing, certain amounts out of Tax Revenues may be applied for other purposes as provided in the Indenture. SUCCESSORAGENCYTOTHEHEMETREDEVELOPMENTAGENCY (California) Tax Allocation Refunding Bonds Page 2 of9

17 This Bond is not a debt of the County of Riverside, the State of California, or any of its political subdivisions, other than the Successor Agency, and neither said County, said State, nor any of its political subdivisions, is liable hereon nor in any event shall this Bond be payable out of any funds or properties other than the Tax Revenues. The rights and obligations of the Successor Agency and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall permit a change in the terms of redemption or maturity of the principal of any outstanding Bond or of any installment of interest thereon or a reduction in the principal amount or the redemption price thereof or in the rate of interest thereon without the consent of the owner of such Bond, or shalf reduce the percentages of the Bond owners required to effect any such modification or amendment. The Bonds are subject to redemption as provided in the Indenture. In lieu of redemption of Bonds, amounts on deposit in the Debt Service Fund (as defined in the Indenture) may be withdrawn and used at the direction of the Successor Agency at any time to purchase such Bonds at public or private sale at such prices (including brokerage and other charges and including accrued interest) as the Successor Agency may in its discretion determine. The par amount of any such Bonds so purchased by the Successor Agency in any twelve-month period ending on July 1 will be credited toward, and will reduce the par amount of, Bonds required to be redeemed pursuant to the Indenture on the next succeeding September 1 of such year. If an Event of Default, as defined in the Indenture, shall occur, the principal of all outstanding Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture, but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture. This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at said corporate trust office of the Trustee in Los Angeles, California or such other place as designated by the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon registration of such transfer a new Bond or Bonds, of authorized denomination or denominations. for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. The Successor Agency and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Successor Agency and the Trustee shall not be affected by any notice to the contrary. It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due and regular time, form and manner as required by the Refunding Law, the Dissolution Act and the Redevelopment Law and the laws of the State of California and that the amount of this Bond, together with all other indebtedness of the Successor Agency, does not exceed any limit prescribed by the Refunding Law, the Dissolution SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY (California) Tax Allocation Refunding Bonds Page 3 of 9

18 Act and the Redevelopment Law or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture. This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose until the Trustee's Certificate of Authentication hereon endorsed shall have been manually signed by the Trustee. SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY (California) Tax Allocation Refunding Bonds Page 4 of9

19 IN WITNESS WHEREOF, the SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY has caused this Bond to be executed in its name and on its behalf with the facsimile signature of the City Manager of the City of Hemet and attested to by the facsimile signature of its City Clerk of the City of Hemet, all as of the Original Issue Date specified above. SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY By City :2v. c~rfftl.t ATTEST: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within-mentioned Indenture. Dated: December 23, 2014 MUFG UNION BANK, N.A., as Trustee By: SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY (California) Tax Allocation Refunding Bonds Page 5 of9

20 ASSIGNMENT For value received the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) hereby irrevocably constitute and appoint atlorney, to transfer the same on the books of the Trustee, with full power of substitution in the premises. Dated: _ Signature Guaranteed: NOTICE: Signature guarantee shall be made by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. NOTICE: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY (California) Tax Allocation Refunding Bonds Page 6 of9

21 SCHEDULE A SCHEDULE OF PAYMENTS OF PRINCIPAL AND INTEREST The following payments of principal and interest shall be made not later than the applicable payment dates set forth below to MUFG Union Bank, N.A, as trustee under the Authority Bonds Indenture (as defined in the Indenture). Payment Date 3/1/15 9/1/15 3/1/16 9/1/16 3/1/17 9/1/17 3/1/18 9/1/18 3/1/19 9/1/19 3/1/20 9/1/20 3/1/21 9/1/21 3/1/22 9/1/22 3/1/23 9/1/23 3/1/24 9/1/24 3/1/25 911/25 3/1/26 9/1/26 3/1/27 9/1/27 3/1/28 9/1/28 3/1/29 9/1/29 3/1/30 9/1/30 3/31/31 9/1/31 PrinciR_al Interest $- $82, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,000 95, , ,000 78, , ,000 67, , ,000 55, , ,000 42, , ,000 29, , ,000 15, Debt Service $82, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY (California) Tax Allocation Refunding Bonds Page 7 of9

22 LEGAL OPINION JONES HALL A PROFESSIONAL LAW CORPORATION ATIORNEYS AT LAW 475 SANSOME STREET, SUITE 1700 SAN FRANCISCO, CALIFORNIA December 23, 2014 Riverside County Public Financing Authority Riverside, California Succ~ssor Agency to the Hemet Redevelopment Agency Hemet, California OPINION: $11,110,000 Successor Agency to the Hemet Redevelopment Agency Hemet Redevelopment Project Tax Allocation Refunding Bonds, Series 2014 Members of the Successor Agency: We have acted as bond counsel in connection with the issuance by the Successor Agency to the Hemet Redevelopment Agency (the "Successor Agency") of its $11,110,000 Successor Agency to the Hemet Redevelopment Agency Hemet Redevelopment Project Tax Allocation Refunding Bonds, Series 2014 (the "Bonds"), pursuant to the Community Redevelopment Law, constituting Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code of the State of California, Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State, and Section of the California Health and Safety Code (collectively, the "Law"), resolutions of the Successor Agency adopted on August 26, 2014 and October 14, 2014, a resolution of the Oversight Board for the Successor Agency adopted on August 27, 2014, and an Indenture of Trust dated as of December 1, 2014 (the "Indenture"), by and between the Successor Agency and MUFG Union Bank, N.A., as trustee. We have examined the Law and such certified proceedings and other papers as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations of the Successor Agency and the former Redevelopment Agency of the City of Hemet contained in the Indenture and in certified proceedings and other certifications of public officials furnished to us, without undertaking to verify such facts by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY (California) Tax Allocation Refunding Bonds Page B of9

23 1. The Successor Agency is validly existing as a public entity, with the power to execute and deliver the Indenture, perform the agreements on its part contained therein and to issue the Bonds. 2. The Indenture has been duly executed and delivered by the Successor Agency and constitutes a valid and binding obligation of the Successor Agency enforceable upon the Successor Agency. 3. Pursuant to the Law, the Indenture creates a valid lien on the funds pledged by the Indenture for the security of the Bonds. 4. The Bonds have been duly authorized, executed and delivered by the Successor Agency and are valid and binding special obligations of the Successor Agency payable solely from the sources provided therefor in the Indenture. The rights of the owners of the Bonds and the enforceability of the Bonds and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and may also be subject to the exercise of judicial discretion in appropriate cases. Respectfully submitted, f~j/dl A Professional Law Corporation SUCCESSOR AGENCY TO THE HEMET REDEVELOPMENT AGENCY (California) Tax Allocation Refunding Bonds Page 9 of9