EXHIBIT B RATE AND METHOD OF APPORITONMENT OF SPECIAL TAXES

EXHIBIT B RATE AND METHOD OF APPORITONMENT OF SPECIAL TAXES REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE Community Facilities District No. 90-2 (Tuscany Hills Public Improvements) A special tax shall be levied on each Parcel of land within the Redevelopment Agency of the City of Lake Elsinore Community Facilities District No. 90-2 (Tuscany Hills Public Improvements) (the "District"), and collected according to the special tax liability determined by the Responsible Party of the Redevelopment Agency of the City of Lake Elsinore (the "Agency") through the application of the following procedures. All of the property within the District, unless otherwise exempted by law or the express provisions of the rate and method of apportionment expressed below, shall be taxed to the extent and in the manner provided below. It is intended that all special taxes applicable to Parcels within Category 1, Category III or Category V be collected in the same manner and at the same time as ordinary ad valorem property taxes, and that special taxes so levied will be subject to the same penalties and procedures, sale and lien priority in case of delinquency as is provided for ad valorem taxes, subject to any covenant of the Agency with respect thereto in any Fiscal Agent Agreement for any bonds of the Agency for the District. Special taxes applicable to Categories II and IV will be levied at the times described below, and will be collected directly by the Responsible Party of the Agency as described below. CATEGORY I: CATEGORIES OF SPECIAL TAX Category I includes all Taxable Property in the District not subject to a special tax under Category III or Category V. The Category I special tax will be levied annually. The maximum special tax that may be levied on Parcels within Category I during the Fiscal Year ending June 30, 1991 is $20,000 per acre (said amount to be levied pro rata for any portion of an acre) of a Parcel. Said maximum special tax shall increase each Fiscal Year thereafter by 2%, compounded annually. CATEGORY II: The Category II special tax is a one-time tax, payable at the time of approval of a final map with respect to a Parcel. The Category II special tax is calculated by subtracting the number of Parcels shown on the final map from the number of estimated Parcels in a tract as shown in the following table. The applicable special tax is calculated by multiplying the difference by the tax rate described in the table on the following page. i:\projects\lake elsinore\cfd90-2\0001 cfd 90-2.doc B-1

If the boundaries of the tracts shown in any final map are not the same as the expected boundaries as shown on the map attached hereto and by this reference incorporated herein, the Responsible Party will reapportion the Projected Developable Parcels as shown in the table below to the actual land area of the final map in such a way that there is no loss of Parcels. The special tax rate applicable to such a tract will be the highest rate applicable to any one of its component tracts as shown in the table below. CATEGORY II Special Tax for Each Developable Parcel by Projected Developable Which Final Map is Less Than the Projected Tract No. Parcels Developable Parcels 17413-1 207 $18,210 17413-2 73 $20,746 17413-3 158 $22,091 17413-4 24 $35,297 17413-5 79 $20,725 17413-6 135 $19,057 17413-7 77 $25,890 17413-8 123 $21,574 24383 164 $20,261 25074 128 $16,904 25075 135 $19,324 25076 144 $18,807 25077 163 $19,967 25078 183 $18,306 25079 102 $21,712 25080 105 $22,930 The special tax rates shown in this table are for the Parcels for which a final map is recorded in the Fiscal Year ending June 30, 1991. The special tax rate for Parcels for which a final map is recorded in subsequent years shall increase each Fiscal Year thereafter by 2%, compounded annually. i:\projects\lake elsinore\cfd90-2\0001 cfd 90-2.doc B-2

CATEGORY III: Any Parcel for which a final map has been recorded and for which Category II special taxes have been paid, if applicable, will be classified in Category III, until such time as a building permit has been issued. If Category II special taxes are applicable to the Parcel but have not been paid when due, such Parcels on a final map will continue to be classified in Category 1. The maximum special tax applicable to Parcels in Category III is shown below for the Fiscal Year ending June 30, 1991. The maximum special tax rate for the Parcels classified in Category III shall increase each Fiscal Year thereafter by 2%, compounded annually. If the boundaries of a tract shown in any final map are not the same as the expected boundaries shown for such tract on the map attached hereto, the maximum special tax applicable to Parcels in such tract will be the highest maximum special tax applicable to any one of its component prior tracts based on the attached map and as shown in the table below. CATEGORY III Maximum Tract No. Special Tax 17413-1 $2,106 17413-2 $2,399 17413-3 $2,554 17413-4 $4,081 17413-5 $2,396 17413-6 $2,203 17413-7 $2,993 17413-8 $2,495 24383 $2,343 25074 $1,955 25075 $2,234 25076 $2,175 25077 $2,309 25078 $2,117 25079 $2,510 25080 $2,651 i:\projects\lake elsinore\cfd90-2\0001 cfd 90-2.doc B-3

CATEGORY IV: The Category IV special tax is a one-time tax payable at the time of the issuance of a building permit, based on the calculation of Category IV special tax per the following schedule. The applicable special tax per Parcel is calculated as shown in the following table, based on the average projected square foot per Parcel as shown below. Average Projected Square Feet Tract No. 17413-1 Per Parcel 1,960 17413-2 2,412 17413-3 2,651 17413-4 5,000 17413-5 2,408 17413-6 2,111 17413-7 3,327 17413-8 2,559 24383 2,325 25074 1,728 25075 2,159 25076 2,067 25077 2,273 25078 1,978 25079 2,583 25080 2,800 If the boundaries of the tract shown in any final map are not the same as the expected boundaries shown for such tract on the attached map, the average projected square footage per Parcel will be the highest average projected square footage for any of its component tracts as shown on the attached map. i:\projects\lake elsinore\cfd90-2\0001 cfd 90-2.doc B-4

Tract: Item CALCULATION OF CATEGORY IV TAX 1. 1. Average Projected Square Feet per Parcel 2. 2. Number of Building Permits Already Issued 3. 3. Square Feet of Building Permits Already Issued 4. 4. Number of Building Permits Requested 5. 5. Square Feet of Building Permits Requested 6. 6. Total of Items 2 and 4 7. 7. Total of Items 3 and 5 8. 8. Average Square Feet to-date (Item 7 divided by Item 6) 9. 9. If Item 8 is Equal to or Greater than Item 1, There is no Tax Due 10. 10. Item 1 minus Item 8 11. 11. Item 10 Multiplied by Item 6 12. 12. Applicable Category V Square Foot Special Tax 13. 13. Item 11 Multiplied by Item 12 14. 11.58 14. Present Value Factor 15. 15. Item 13 Multiplied by Item 14 16. 16. Amount Previously Paid in Tract (from prior calculations) 17. 17. Item 15 minus Item 16 18. 18. One-Time Tax per Parcel on Building Permits Being Requested (Item 17 divided by Item 4) i:\projects\lake elsinore\cfd90-2\0001 cfd 90-2.doc B-5

CATEGORY V: Category V includes all Parcels for which a building permit has been issued and for which a Category II and IV special tax has been paid, if applicable. If for any reason a Category II or IV special tax is or was payable, but not paid when due, Parcels for which a building permit has been issued will be taxed at the rates applicable to Taxable Property described in Category I. The maximum special tax for Parcels described in Category V for the Fiscal Year ending June 30, 1991 is the total of the following: $665.00 per Parcel plus $0.52 per Square Foot for each Square Foot shown on the building permit. Each Fiscal Year thereafter, the per Parcel and the per Square Foot rate listed above will increase by 2%, compounded annually. A Parcel will be subject to the Category V special tax for not more than 25 years. ANNUAL TAX CATEGORIES ASSIGNMENT TO CATEGORIES; LEVY On or about July 1 of each year, but in any event in sufficient time to include the levy of the special taxes on the County s secured tax roll, the Responsible Party shall determine, for each Parcel of land within the District, whether such Parcel is described by Category I, Category III or Category V. The Parcels subject to levy shall be determined based upon the records of the Riverside County Assessor as of the March 1 preceding such July 1, and the Tax Category shall be determined based upon the status of the Parcel as of the May 1 preceding such July 1. The Responsible Party shall then determine the estimated aggregate Tax Liability for the Fiscal Year commencing such July 1, and the amount of annual special taxes to be levied on each Parcel in the District during such Fiscal Year. The annual special taxes shall be determined for each Parcel in the District as follows: 1. Levy on each Parcel described in Category V an amount equal to 94% of the Category V maximum special tax. 2. If the aggregate amount to be levied based on 1 above is greater than the aggregate Tax Liability for such Fiscal Year, reduce the special tax for each Parcel described in Category V proportionately, so that the aggregate special tax levy for such Fiscal Year for all Parcels within the District is equal to the aggregate Tax Liability for such Fiscal Year. 3. If the aggregate amount to be levied based on 1 above is less than the aggregate Tax Liability for such Fiscal Year, levy on each parcel described in Category V as provided in 1 above, and levy on each Parcel described in Category III an amount equal to 75% of the Category III maximum special tax. 4. If the aggregate amount to be levied based upon 3 above is greater than the aggregate Tax Liability for such Fiscal Year, reduce the special tax levy for each Parcel described in Category III proportionately, until the aggregate special tax levy for such Fiscal Year for all Parcels within the District is equal to the aggregate Tax Liability for such Fiscal Year. i:\projects\lake elsinore\cfd90-2\0001 cfd 90-2.doc B-6

5. If the aggregate amount to be levied based upon 3 above is less than the aggregate Tax Liability for such Fiscal Year, levy as described in 3 above, and levy on each Parcel described in Category I an amount equal to 50% of the Category I maximum special tax. 6. If the aggregate amount to be levied based upon 5 above is greater than the aggregate Tax Liability for such Fiscal Year, reduce the special tax levy for each Parcel described in Category I proportionately, until the aggregate special tax levy for such Fiscal Year for all Parcels within the District is equal to the aggregate Tax Liability for such Fiscal Year. 7. If the aggregate amount to be levied based upon 5 above is less than the aggregate Tax Liability for such Fiscal Year, levy on each Parcel described in Category V an amount equal to 100% of the Category V maximum special tax, levy on each Parcel described in Category III an amount equal to 75% of the Category III maximum special tax and levy on each Parcel described in Category I an amount equal to 50% of the Category I maximum special tax. 8. If the aggregate amount to be levied based upon 7 above is greater than the aggregate Tax Liability for such Fiscal Year, reduce the special tax levy for each Parcel described in Category V proportionately, until the aggregate special tax liability for such Fiscal Year for all Parcels within the District is equal to the aggregate Tax Liability for such Fiscal Year. 9. If the aggregate amount to be levied based upon 7 above is less than the aggregate Tax Liability for such Fiscal Year, levy on each Parcel described in Category V or Category III an amount equal to 100% of the Category V or Category III, respectively, maximum special tax, and levy on each Parcel described in Category I an amount equal to 50% of the Category I maximum special tax. 10. If the aggregate amount to be levied based upon 9 above is greater than the aggregate Tax Liability for such Fiscal Year, reduce the special tax levy for each Parcel described in Category III proportionately, until the aggregate special tax liability for such Fiscal Year for all Parcels within the District is equal to the aggregate Tax Liability for such Fiscal Year. 11. If the aggregate amount to be levied based upon 9 above is less than the aggregate Tax Liability for such Fiscal Year, levy on each Parcel described in Category I, III or V an amount equal to the maximum special tax described in Category I, III or V, respectively. 12. If the aggregate amount to be levied based upon 11 above is greater than the aggregate Tax Liability for such Fiscal Year, reduce the special tax levy for each Parcel described in Category I proportionately, until the aggregate special tax liability for such Fiscal Year for all Parcels within the District is equal to the aggregate Tax Liability for such Fiscal Year. ONE-TIME TAX CATEGORIES On the date of approval of a final map with respect to any portion of the real property in the District, the Responsible Party shall levy and collect a special tax in the amount described above for Category II. On the date a building permit is issued for any Parcel within the District, the Responsible Party shall levy and collect a special tax in the amount described above for Category IV. i:\projects\lake elsinore\cfd90-2\0001 cfd 90-2.doc B-7

Failure to pay a Category II or Category IV special tax when due shall result in the applicable Parcel remaining subject to a Category I special tax, notwithstanding that the Parcel would otherwise be described in Category III or Category V. PREPAYMENTS Prepayments may be made only for property subject to tax under Category V. Any property owner in the District that desires to prepay the annual special taxes on a particular Parcel, shall notify the Responsible Party in writing of such intention and the estimated amount of prepayment no more than sixty (60) days and no less than forty-five (45) days prior to date of such prepayment, which date (the Prepayment Date) shall be a date which is sixty (60) days prior to an interest payment date for the Bonds. The entire annual special taxes for any Parcel in the District may be prepaid on a Prepayment Date as follows: (a) (b) (c) (d) (e) The Parcel with respect to which prepayment is to be made must not be delinquent in any payment of special taxes previously levied within the District. Prepayment shall not relieve any property owner from paying those special taxes which have already become due and payable, and a Notice of Cessation of Special Tax lien shall not be recorded against any Parcel pursuant to California Government Code Section 53344, until all special taxes with respect to that Parcel have been paid. The aggregate maximum annual special taxes for the Parcel with respect to which prepayment is to be made, as of the Prepayment Date, shall be calculated based upon the maximum annual special taxes described by Category V that could be levied on that Parcel in all future years. The net present value of the future annual special taxes calculated above will be determined based on an interest rate of eight percent (8%), which may be decreased or increased by the Responsible Party to reflect the net interest costs on the Bonds. Any applicable prepayment premium on the Bonds shall be applied to the aggregate amount determined under (c) above. The amount to be prepaid for any Parcel of property shall be the sum of the amounts calculated for that Parcel under paragraphs (c) and (d) above, plus the reasonable costs and expenses of performing the calculations, preparing and recording the Notice of Cessation of Special Tax Lien and any other acts or procedures required to be performed in connection with the prepayment, as determined by the Responsible Party. DEFINITIONS Administrative Fees or Expenses means any or all of the following: the fees and expenses of the Fiscal Agent (including any fees or expenses of its counsel), the expenses of the Agency in carrying out its duties with respect to the District (including, but not limited to, the levy and collection of the special taxes) including the fees and expenses of its counsel, any fees of the County of Riverside related to the District or the collection of special taxes, an allocable share of the salaries of the Agency staff directly related thereto and a proportionate amount of Agency general administrative overhead related thereto, any amounts paid by the Agency from its general funds with respect to the District or the Bonds, and all other costs and expenses of the Agency or the Fiscal Agent incurred in connection with the discharge of their respective duties under the Fiscal Agency Agreement and, in the case of the Agency, in any way related to administration of the District. i:\projects\lake elsinore\cfd90-2\0001 cfd 90-2.doc B-8

Agency means the Redevelopment Agency of the City of Lake Elsinore. Bonds means any bonds of the Agency issued for the District under Mello-Roos Community Facilities Act of 1982, as amended. Debt Service, for each Fiscal Year, is the total annual principal and interest payment on the Bonds during the calendar year which commences in such Fiscal Year, less any capitalized interest and any other amounts remaining in the debt service fund held under the Fiscal Agent Agreement as of the end of the previous Fiscal Year (other than by reason of the payment of Category II and IV special taxes). District means the Redevelopment Agency of the City of Lake Elsinore Community Facilities District No. 90-2 (Tuscany Hills Public Improvements). Fiscal Agent means the Fiscal Agent under the Fiscal Agent Agreement. Fiscal Agent Agreement means the agreement by that name approved by the Resolution of Issuance, and as it may be amended and/or supplemented from time to time. Fiscal Year means the period starting on July I and ending the following June 30. Parcel means any Riverside County Assessor s Parcel or portion thereof that is within the boundaries of the District based on the equalized tax rolls of the County of Riverside. Resolution of Issuance is any Resolution adopted by the Agency authorizing the issuance of Bonds. Responsible Party is any person or persons who the Agency may appoint from time to time to compute the levy of the special taxes within the District. Square Foot or Square Feet is the square footage of a single family dwelling unit measured at the exterior walls, but excluding (i) garages, carports, roof overhangs, passageways and patios which are both unenclosed and uncovered, and (ii) tool sheds, greenhouses and similar detached structures. Tax Categories are those categories set forth in the body hereof. Tax Liability for any Fiscal Year is an amount sufficient to pay Debt Service for such Fiscal Year, Administrative Fees or Expenses for such Fiscal Year, an amount determined by the Responsible Party to offset past delinquencies and projected tax delinquencies to occur in such Fiscal Year, and all payments required to be made in the applicable Fiscal Year under the Fiscal Agent Agreement for the Bonds and any supplements thereto. Taxable Property is all real property within the boundaries of the District which is not exempt from the special tax pursuant to law, except that the following property shall not be taxes; any acres of land owned, conveyed or irrevocably offered for dedication to a public agency (other than the Federal Government or agency deriving its authority from Federal law (such as the Resolution Trust Corporation)), or land which is a public right of way or which is an unmanned utility easement making impractical its utilization for other than the purpose set forth in the easement. i:\projects\lake elsinore\cfd90-2\0001 cfd 90-2.doc B-9

ONE-TIME PARTIAL PREPAYMENTS The special tax may be paid in part in a lump sum prior to the issuance of the Bonds, if the request to make a partial payment is received by the Responsible Party no less than 10 days prior to the issuance of the Bonds. To date, owners of the two (2) tracts have requested a partial prepayment of special taxes. The tracts and the one-time partial prepayment amounts are as follows: One-Time Tract No. Payment Amount 17413-2 $168,036 17413-5 $181,546 The amount of the one-time partial prepayment of special taxes for each of these two (2) tracts shall be made in cash to the Agency prior to the issuance of the Bonds and will result in the following special taxes: 1) The special taxes for tract 17413-2 are as follows: a) The maximum special tax that may be levied on tract 17413-2 described in Category I for the Fiscal Year ending June 30, 1991 is $17,747 per acre (said amount to be levied pro rata for any portion of an acre). Said maximum special tax shall increase each Fiscal Year thereafter by 2%, compounded annually. b) The one-time special tax for tract 17413-2 described in Category II for the Fiscal Year ending June 30, 1991 is $18,399 for each Parcel less than 73 Parcels shown on the final map. The special tax rate for Parcels for which a final map is recorded in subsequent years shall increase each Fiscal year thereafter by 2%, compounded annually. c) The maximum special tax for Parcels in tract 17413-2 described in Category III for the Fiscal Year ending June 30, 1991 is $2,127 per Parcel. The maximum special tax rate shall increase each Fiscal Year thereafter by 2%, compounded annually. d) The maximum applicable Category V Square Foot special tax (Item 12) in the calculation of Category IV one-time tax for a Parcel in tract 17413-2 is $0.43. e) The maximum special tax for Parcels in tract 17413-2 described in Category V for the Fiscal Year ending June 30, 1991 is the total of $665.00 per Parcel plus $0.43 per Square Foot for each Square Foot shown on the building permit. Each Fiscal Year thereafter, the per Parcel and the per Square Foot rate will increase by 2%, compounded annually. 2) The special taxes for tract 17413-5 are as follows: a) The maximum special tax that may be levied on tract 17413-5 described in Category I for the Fiscal Year ending June 30, 1991 is $17,747 per acre, (said amount to be levied pro rata for any portion of an acre). Said maximum special tax shall increase each Fiscal Year thereafter by 2%, compounded annually. i:\projects\lake elsinore\cfd90-2\0001 cfd 90-2.doc B-10

b) The one-time special tax for tract 17413-5 described in Category II for the Fiscal Year ending June 30, 1991 is $18,382 for each Parcel less than 79 Parcels shown on the final map. The special tax rate for Parcels for which a final map is recorded in subsequent years shall increase each Fiscal Year thereafter by 2%, compounded annually. c) The maximum special tax for Parcels in tract 17413-5 described in Category III for the Fiscal Year ending June 30, 1991 is $2,125 per Parcel. The maximum special tax rate shall increase each Fiscal Year thereafter by 2%, compounded annually. d) The maximum applicable Category V Square Foot special tax (item 12) in the calculation of Category IV one-time tax for a Parcel in tract 17413-5 is $0.43. e) The maximum special tax for Parcels in tract 17413-5 described in Category V for the Fiscal Year ending June 30, 1991 is the total of $665.00 per Parcel plus $0.43 per Square Foot for each Square Foot shown on the building permit. Each Fiscal Year thereafter, the per Parcel and the per Square Foot rate will increase by 2%, compounded annually. i:\projects\lake elsinore\cfd90-2\0001 cfd 90-2.doc B-11