Overview of Diablo Grande Community Facilities Special Tax Bonds: 2001-2005

Pursuant to an Official Statement dated July 26, 2001, The Western Hills Water District (the “Water District”) issued $ 21,000,000 Diablo Grande Community Facilities District No. 1, Special Tax Bonds Series 2001, (the “2001 Bonds”). The Bonds were issued primarily to construct and acquire certain public facilities of benefit to Diablo Grande Community Facilities District No. 1 (the ”District”).

Pursuant to an Official Statement dated December 13, 2002, The Western Hills Water District issued $6,650,000 Diablo Grande Community Facilities District No. 1 Special Tax Bonds, Series 2002 (the “2002 Bonds”). The Bonds were issued primarily to construct and acquire certain public infrastructure improvements of benefit to the District. The 2002 Bonds are secured by and payable from a first pledge of “Special Tax Revenues” on parity with the 2001 Bonds.

Pursuant to an Official Statement dated April 27, 2004, The Western Hills Water District issued $20,000,000 Diablo Grande Community Facilities District No. 1 Special Tax Bonds, Series 2004 (the “2004 Bonds”). The Bonds were issued primarily to construct and acquire certain public infrastructure improvements of benefit to the District. The 2004 Bonds are secured by and payable from a first pledge of “Special Tax Revenues” on parity with the 2001 and 2002 Bonds.

Pursuant to an Official Statement dated January 13, 2005, The Western Hills Water District issued $9,350,000 Diablo Grande Community Facilities District No. 1 Special Tax Bonds, Series 2005 (the “2005 Bonds”). The Bonds were issued primarily to construct and acquire certain public infrastructure improvements of benefit to the District. The 2005 Bonds are secured by and payable from a first pledge of “Special Tax Revenues” on parity with the 2001 Bonds, 2002 Bonds, and 2004 Bonds (the 2001 Bonds, 2002 Bonds, 2004 Bonds and 2005 Bonds shall collectively be referred to as the “Bonds”)

The Bonds are secured by and payable from a pledge of Special Taxes to be levied by the Water District on taxable real property within the boundaries of the District. Neither the faith and credit nor the taxing power of the Water District, The County of Stanislaus, the State of California or any political subdivisions thereof is pledged to the payment of the Bonds.