TERRA LAGO HOA BOARD, BUDGET COMMITTEE & GATE COMMITTEE Indio, California

Glenn Southard Indio City Manager Indio, California Dear Mr. Southard,

December 5, 2008

After a lengthy review of all documents surrounding the formation of the 2004-3 CFD for Terra Lago Phase I it has come to the attention of the budget committee that there remains nearly $3 million in the Special Escrow Fund. Under the Special Escrow Fund entity there is a need for certain criteria to be met for release of these funds into the Construction Fund. Among these complicated formulas there needs to be an appraisal in December of 2008. The release of these funds requires the value to lien ratio to be greater than 3:1. The last appraisal done in the summer did not meet these requirements. It appears that the Developer pays for the appraisal. It is the responsibility of the City of Indio to determine if the appraisal is fair and reasonable. Also if the appraisal fails to show the values are sufficient, then this is the last extension and that the Special Escrow Fund Bonds will defease. It is the opinion of the Terra Lago Budget Committee that this appraisal will fall short due to the devaluation of properties in this community since the last appraisal. Our community would like this money to come back to pay down the CFD Bonds. If there is any question as to the release of these funds by the City of Indio we would like to be notified and request at the minimum a second appraisal. Thank you for your attention to this matter. Sincerely, Brian Davies, John Evanoff, Patrick Runyon Mark Kimberlin, Ray Mad Debby Lewis-Maddik Lorretta Alde Brian Poole,

TERRA LAGO BOA BOARD, BUDGET COMMITTEE & GATE COMMITTEE Indio, California

Glenn Southard Indio City Manager Indio, California Dear Mr. Southard,

December 5, 2008

It has come to the attention of the Terra Lago HOA that properties included in this 2004-3 CFD District were annexed to an existing development agreement between the City and Developer Landmark Golf Company dated December 18, 1996. This original agreement has been modified several times and the last one dated 12-5- 2007(signed by Ben Godfrey for the city and Indio Land Ventures/SunCal). This last amendment to the original agreement annexed the CFD properties to the original development agreement of 1996. It is understandable for the developer to sign these agreements for the betterment of the area and their enrichment. It is also the same for the city in its quest for growth. It is difficult to understand how property owners were not made aware of this agreement which included their properties at the time. That aside the major question here is: Does this agreement create any financial detriment to the homeowners and what was the legal process undertaken to allow this to happen. As times get tough the burden of an initial vaguely presented special tax amounting to $3,600 or more a year from the CFD 2004-3 for 30 years makes home owner pause. The community wants to full be aware of any issues that maybe detrimental to their financial well being. Please reply in writing to this request. Sincerely, Brian Davies, John Evanoff, Patrick Runyo Mark Kimberlin, Ray Maddik, Debby Lewis-Maddik 4 1 Lorretta AldereteMthWAPalb.

TERRA LAGO HOA BOARD, BUDGET COMMITTEE & GATE COMMITTEE Indio, California December 5, 2008 Glenn Southard City Manager Indio, California Dear Mr. Southard, It has come to the attention of the Terra Lago HOA after extensive review of public documents that there is conflicting information of the community streets as to being private or public. This issue is important to the home owners in their quest to gate this community. The factors that support these as being private are numerous and include the HOA being responsible for repair and maintenance of these streets. The original documents passed by the city stated that if there are "no gates on the community", then the tentative track maps should be stamped as such. Direct check on these tentative track maps has no such stamp. The police have the community streets listed as private. In review of the CFD documents including reimbursements paid out of the CFD paint a different picture. It appears from these documents there was a reimbursement to the Developer for over $2,5 million for the roads. The local home builders were responsible for their roads in this community and this has been confirmed verbally from the builders. The roads in question are Landmark Parkway, Vista Lago, and Vista Breeza. The last two are especially important from the gating standpoint. Jim Smith, Public Works, has indicated that these streets are all public, and Peter Johnson of Sun Cal verbally communicated that he felt they were public. If funds were paid out of the CFD and they are private as the documents suggest, then there is a larger issue with the tax exempt status of this CFD. The Bond Council Don Hunt has been notified of our concerns. We need to determine the status so we may proceed forward in a process of gating this community or not. There is over 80% approval consensus from the community to build these gates. In the spirit of the original CFD formations for community safety that arouse out of the tax disadvantage of Proposition 13 in the early 1980's we want to improve our own safety as recently there has been unfortunate criminal activity that has peaked our concerns. 1

The HOA is working hard to improve this area and making it a standout for the city of Indio. We would appreciate in writing the opinion as to the status of these streets. It is important to get this information on an urgent basis. If the results show these to be private it would be much appreciated by this community if there could be assistance in the planning and permitting process. Sincerely, TERRA LAGO HOA Boar Budget Committee and Gate Committee Indio, California Brian Davies, I John Evanoff, Pat Runyon Mark Kimberlin, Ray Maddik, Debby Lewis-Maddi Lorretta Aldere Brian Poole,

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