Brian Davies

From: Sent: To: Subject: Roxanne M. Diaz <RDiaz@rwglaw.com> Wednesday, December 18, 2013 10:19 AM 'Brian Davies' RE: Terra Lago

H i Mr . D avi es , Iwant ed t of ol l owu pon t he d oc u m ent s . W e wer e abl et o pr i ntt hem . A l s o Ihave t r i ed c al l i ng you ( j u st now)bu tno one pi ck s u p. L etm e k now when i ti s a good t i me t o c al l . Roxanne
Fr om : Brian Davies [mailto:briandaviesmd@gmail.com] Sen t : Tuesday, December 17, 2013 12:11 PM Cc: Roxanne M. Diaz Subj ect : Terra Lago Fil e( s )w er e s en t t o you us in g W in Zip ZipSen d , t h e fas t es t w ay t os en d l ar ge fil es .

D ow n l oad n ow : W in Zip C om pr es s ed A t t ac h m en t s . zipx

Expir es : Tues d ay, D ec em ber3 1, 2013 12:10:54 P M

Subject: Short overview with supportive documents to demonstrate egregious inequities placed on the back of Terra Lago Homeowners. The Proposed Area 2 amendment is a sham. 12.16.2013 Brian Davies Hi Roxanne, I would like to send you a short narrative of the issues related to the formation of the CFD 2004-3 AND THE INJUSTICE BEING DONE. I first had to fight to show that Area 2 could not just ignore the Mello Roos 2004-3. Second I had to correct THE interpretation of the word shalland mustas it relates to the construction fund paying for the RMA. Now for the record I am saying that a new landowner by foreclosure is bound by the Mello Roos Tax lien. That any sham sale of agricultural land to itself out of undisclosed contract does not create a bonafide purchase. That requesting to be removed from the Mello Roos 2004-3 burden by a sham agreement does not create legitimacy. Think of it like this: Why would any new developer want to pay for a Mello Roos when the infra-structure is in and paid for by others. Does it make sense that this could happen? Otherwise it would occur all the time. Sometimes the Government Code requires common sense interpretation. Please send me one case where this has been done, without calculating the backbone structures by an independent forensic accountant. Please prove me wrong. I am disappointed that you are keeping this all in house. That Wildan is not to review the backbone structures. I say Why what is there to hide? Quite frankly you and Dan should be ashamed. I have asked for outside accounting and new entities to forensically review your books. You had not agreed, but yet worse you work out a sham deal with a quasideveloper without transparency. This does not pass the smell test. How does the City justify this behavior. It
1

begs for a legal audit. The City is at risk. How is it possible for the City to ignore $2.5 million prepayments for Area 2 water fees. It is black and white. I ask you to reconsider this travesty. It is not right. It is not fair. Further Improvement Area 1 homes will be further devalued as now newer Area 2 homes are sold without a Mello Roos Tax. This amounts to a loss of $70,000 per home. The damage is $37 million in lost property values for Area 1 homeowners, and 20 years of continued payments. You say well it was in writing. You agreed. Yes, but it was based on legitimate documents. No sham transactions. No gerrymandering to get TOT taxes instead of the time share paying Mello Roos Taxes. It worked to pay kickbacks to the builder, the finder, and yes the legal fees and penalties for the delay in construction. Here again is my review. I suggest you have someone outside, independently review the information. Reconsider you present course of action. Petitioned February 2005. Funded September 2005. Both were formed with Terra Lago Homeowners being the first for the City to institute. In fact notes from City Council in later 2004, demonstrates clearly the process was new. Don Hunt of Fulbright and Jaworski hired. Before Southard. The Timeshare had a severe [preexisting and not eligible for Mello Roos Funds] water problems. Mike Wilson can fill you in on the details, and subsequent litigation related to construction delays. See Indio Water Notes February 2005. Also in February 2005 there was a public hearing on ORD 1408. Annexation of Improvement Area 2 ( Area 2 ) to the Hills DA, and piggyback the environmental studies. I have reviewed these and they were significant. o The record shows significant delays by environmental studies. Despite this the City approved the 1st reading. But the effort failed. So Area 2 was not annexed, and not eligible for the 2004-3. o In 2007 in an effort to paper the trail, the City annexed Area 2, to Area 1, and not to the Hills DA. o Link for convenience to the full Hills DA with amendments, [failed one mentioned in 2007 2nd amendment]. o See: http://www.scribd.com/doc/167643079/DA-1998-Hills-trendwest-wyndham-resorts-LBIndio-Terra-Lago-East-RB-Indio Improvement Area 1 ( Area 1 ), was approve and Tract Map 31601-1 is attached to demonstrate all streets were PRIVATE, and not public. Therefore it would appear as private street, ineligible for the Mello Roos. See Tract Map 31601-1 dedications and map. This includes the engineering, sidewalks, and everything associated with the Private Streets. As stated in the Securities and Exchange ( SEC ) proffered offering document it was spelled out how much of Area 1 was complete. See full CDF 2004-3 Offering: http://www.scribd.com/doc/152429034/CFD-2004-3-OPT-full-versionof-Mello-Roos-offering-city-of-Indio Public Facilities See CFD 2004-3 Offering.
2

A description of the public facilities proposed to be financed for Improvement Area No. 1 is contained in the Funding and Acquisition Agreement by and between the City and the Master Developer (the "Funding and Acquisition Agreement"). These public facilities consist of in-tract public facilities that are within and required to develop Improvement Area No. 1 and backbone public facilities, both within and outside the District, required to serve the entire District or both Improvement Areas. The costs of many of the backbone public facilities are eligible to be financed by either of the Improvement Areas. In addition, pursuant to the Agreement of Formation of MelloRoos Community Facilities District No. 2004-3 (the "Development Agreement"), the costs of many of the backbone public facilities are eligible to be financed with the proceeds of bonds including, without limitation, the Bonds.

The Master Developer has identified two development phases within Terra Lago. Phase 1 currently includes Improvement Area No. 1 and Phase 2 includes Improvement Area No. 2. The Master Developer completed mass grading of Improvement Area No. 1 prior to the sale of the tracts contained therein to the Developers. With respect to the major backbone public infrastructure improvements required to serve Improvement Area No. 1, as of August 1, 2005, approximately 98% of such infrastructure improvement for Improvement Area No. 1, including sewer, water, storm drain, dry utilities and landscaping improvements, had been completed. The backbone public infrastructure improvements required to serve Improvement Area No. 2 are expected to be completed by December, 2006. As of July, 2005, the Master Developer had expended approximately $25 million for the mass grading and major backbone public infrastructure improvements for Improvement Area No. 1. Initial funding for the work completed by Master Developer has been provided by internal sources. To the extent available, costs of the public facilities with respect to Improvement Area No. 1 will be funded from proceeds of the Bonds. The City will not be obligated to pay for the public facilities except from amounts on deposit in the applicable Acquisition and Construction Fund once established with respect to each of the Improvement Areas. The City makes no warranty, express or implied, that the proceeds of the bonds deposited and held in the applicable Acquisition and Construction Fund, and any investment earnings thereon, will be sufficient to pay for the Improvements.

There are rules on reimbursements from finished facilities. My review suggest maximum 20% maybe be reimbursed and it must be within a short period of time. However, as we will see what was public. Area 1 development: Water plan attached. It should be clear that no pump station or 24 inch water lines were necessary. Area 1 should not be forced to pay. See slides. The funding occurred in September 2005.

The First Check was written to the City of Indio City of Indio City of Indio City of Indio Storm Fees` Fire Station Mitigation Fee Sheriff/Police Fee
3

57,595.00 1,000,000.00 54,060.00

City of India Park Fee City of Indio Bridge/Major Street Impact Fee City of Indio TIJIY117 City of Indio Water Capital Improvement Fee HOMES FROM AREA 2!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! City of Indio Park Capital Impact Fee Total

254,400.00 445,200.00 504,984.00 4,489,471.00 THIS INCLUDES THE 1,264;365.00 $8,100,078.00

The check for $8.1 million. Where did the money go? Well it appears that Indio Water Authority, a new spinoff from the City of Indio at the time picked up the check. See Indio Water Authority Notes September 2005. See who received the money. I have drawn a map of the district and color coded it. Private Street are marked, notations are made of the CFD 2004-3 District. See CFD 2004-3 District Map Color marked.

Reminder is made that Timeshare paid over $3 million in impact fees, and signed an agreement with LB Indio for all other infrastructure costs. The agreement states that they will not be responsible for any additional monies. See: http://www.scribd.com/doc/167643065/Cost-Sharing-Agreement-With-LB-HILLS-andTrendwest-Resorts-Oct-27-2003-0. 1. If one looks at the color map and understands the documents to this point it is hard to see how Area 1 could be forced to pay anything. Like Area 2 states we can do it without a bond. The real question is how a bond could be forced on innocent future residents. 2. Now for convenience I have simplified the payments made from CFD 2004-3. See attached CFD 2004-3 Billings.

3. My children keep better financial records. However, needless to say the burden on the Area 1 homeowners appears more egregious. 4. The fire station benefits area 2 and the District. 5. Water impact fees for Area 2, benefit Area 2 or the City depends on your point of view. 6. Billing on Req. No. 4 done a year after Area 1 was finish is suspect. First it was a year. Second does the City hold title to these public facilities. Third are they on public or private areas.

7. Billing on Req. No. 5 done a year after Area 1 includes Dry Utilities. It is clear to me this is not Area 1. Dry goods were being put into Area 2 at that time. 8. Billing on Req. No 7. Simply states Area 2. Done 10/04/2007. **Note is made of inappropriate sign off. No sign off by Rex Sharp Valley Sanitary District. [Rex Sharp personally communicated the issues to me.]

9. Billing on Req. No 8. July 16, 2008. A mere 3 years after Area 1 completed. **Note is made NOT VERIFIABLE BY FINANCE. Phase 2 Final Street Improvements. Lists Area 2 Tract Maps 32341.

I believe I understand the facts. I am willing to work for resolution. However I strongly feel that the City contact an outside special forensic accounting group and reimburse the homeowners from Area 1 based in equity.

Brian Davies 949-903-2986

Click here to report this email as spam.

NOTICE: This communication may contain privileged or other confidential information. If you are not the intended recipient of this communication, or an employee or agent responsible for delivering this communication to the intended recipient, please advise the sender by reply email and immediately delete the message and any attachments without copying or disclosing the contents. Thank you.