##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K

|    |  |                                                                                      
|--- |  | -------------------------------------------------------------------------------------
|[X] |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.

For the year ended December 31, 2002

OR

|     |  |                                                                                          
|---- |  | -----------------------------------------------------------------------------------------
|[  ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.

For the transition period from        to

Commission file number: 0-16645

RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP




(Exact name of registrant as specified in its charter)


|                                  |  |                    
|--------------------------------- |  | -------------------
|California                        |  | 33-0157561         
|                                  |  |                    
|(State or other jurisdiction      |  | (I.R.S. Employer   
|of incorporation or organization) |  | Identification No.)

|                                         |  |           
|---------------------------------------- |  | ----------
|400 South El Camino Real, Suite 1100     |  | 94402-1708
|San Mateo, California                    |  |           
|                                         |  | (Zip Code)
|(Address of principal executive offices) |  |           

Partnerships telephone number, including area code (650) 343-9300
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

Units of Limited Partnership Interest




(Title of class)


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  [X]
     No  [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [  ]  No [X]

No market for the Limited Partnership Units exists and therefore a market value
for such Units cannot be determined.

DOCUMENTS INCORPORATED BY REFERENCE: None.

1



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TABLE OF CONTENTS



|           |                                                                                               |  |  |  |  |  |  | 
|---------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|Part I    
|           | Item 1. Business                                                                             
|           | Item 2. Properties                                                                           
|           | Item 3. Legal Proceedings                                                                    
|           | Item 4. Submission of Matters to a Vote of Security Holders                                  
|Part II   
|           | Item 5. Market for Partnerships Common Equity and Related Stockholder Matters               
|           | Item 6. Selected Financial Data                                                              
|           | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|           | Item 7A. Qualitative and Quantitative Information About Market Risk                          
|           | Item 8. Financial Statements and Supplementary Data                                          
|           | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|Part III  
|           | Item 10. Directors and Executive Officers of the Partnership                                 
|           | Item 11. Executive Compensation                                                              
|           | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|           | Item 13. Certain Relationships and Related Transactions                                      
|           | Item 14. Controls and procedures                                                             
|Part IV   
|           | Item 15 Exhibits, Financial Statements, Schedule and Reports on Form 8-K                     
|SIGNATURES



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##### Table of Contents






Part I




Item 1. Business

Rancon Income Fund I, a California Limited Partnership, (the Partnership) was
organized in accordance with the provisions of the California Revised Limited
Partnership Act for the purpose of acquiring, operating and disposing of
existing income producing commercial, industrial and residential real estate
properties. The General Partner of the Partnership is Rancon Income Partners I
(General Partner). The Partnership was organized in 1986 and completed its
public offering of partnership units (Units) in April 1989. As of December
31, 2002 and 2001, there were 13,279 and 13,560 Units outstanding,
respectively. The Partnership has no employees.

At December 31, 2002, the Partnership owned two properties, which are more
fully described in Item 2.

Competition Within the Market

Management believes that characteristics influencing the competitiveness of a
real estate project are the geographic location of the property, the
professionalism of the property manager and the maintenance and appearance of
the property, in addition to external factors such as general economic
circumstances, trends, and the existence of new, competing properties in the
vicinity. Additional competitive factors with respect to commercial and
industrial properties are the ease of access to the property, the adequacy of
related facilities, such as parking, and the ability to provide rent
concessions and additional tenant improvements commensurate with local market
conditions. Such competition may lead to rent concessions that could adversely
affect the Partnerships cash flow. Although management believes the
Partnerships properties are competitive with comparable properties as to those
factors within the Partnerships control, over-building and other external
factors could adversely affect the ability of the Partnership to attract and
retain tenants. The marketability of the properties may also be affected
(either positively or negatively) by these factors as well as by changes in
general or local economic conditions, including prevailing interest rates.
Depending on market and economic conditions, the Partnership may be required to
retain ownership of its properties for periods longer than anticipated at
acquisition, or may need to sell earlier than anticipated, at a time or under
terms and conditions that are less advantageous than would be the case if
unfavorable economic or market conditions did not exist.

Working Capital

The Partnerships practice is to maintain cash reserves for normal repairs,
replacements, working capital and other contingencies. The Partnership knows
of no statistical information which allows comparison of its cash reserves to
those of its competitors.




Item 2. Properties

The Partnership currently owns the properties listed below:

|                            |  |                       |  |                  |  |                |  |                  
|--------------------------- |  | --------------------- |  | ---------------- |  | -------------- |  | -----------------
|                            |  |                       |  |                  |  |                |  | Encumbrances at  
|Name                        |  | Location              |  | Type             |  | Size           |  | December 31, 2002
|                            |  |                       |  |                  |  |                |  |                  
|Wakefield Industrial
Center |  | Temecula, California  |  | Light
Industrial |  | 44,200 sq. ft. |  | None             
|Bristol Medical Center      |  | Santa Ana, California |  | Office           |  | 52,311 sq. ft. |  | None             

Wakefield Industrial Center

In April 1987, the Partnership acquired the Wakefield facility, at a cost of
approximately $1,899,000 plus acquisition fees of $87,000. Wakefield consists
of two buildings on approximately 3.99 acres of land. The property is located
in Temecula, California, on the west side of Jefferson Avenue, approximately
500 feet west of the Interstate 15 highway in an area that is zoned for medium
manufacturing.

Both buildings are composed of concrete tilt-up construction and have central
heating and air conditioning systems in the office areas. One building
contains approximately 25,000 square feet of leasable space, of which
approximately 5,900 square feet is office space, with the balance used for
manufacturing and related purposes. The other building contains approximately
19,200 square feet of leasable space of which approximately 4,800 square feet
is office space, with the balance used for warehousing and related purposes.
The Wakefield facility provides uncovered parking for approximately 54 cars and
includes partially improved land which is used for car parking and truck
access.

According to research conducted by the Partnerships leasing director, the
market has approximately 10 million square feet of existing industrial space,
with an overall vacancy rate of 7.5%. The area offers a wide range of high
quality, attractive industrial projects ranging from multi-tenant incubator
space to large, single-user distribution facilities located in master-planned
business parks. There is approximately 600,000 square feet of multi-tenant and
free standing industrial space that competes directly with Wakefield Industrial
Center. Wakefield is one of the original industrial buildings in the area. The
asking rent for industrial space

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in this area ranges between $4.32 and $4.80 per square foot triple net (tenant
pays all operating expenses, including taxes, insurance, and capital) with
newer properties at the high end.

The neighborhood surrounding Wakefield has grown over the years and now has
added many retail uses which benefit from the high traffic count on Jefferson
Avenue which is right in front of Wakefield. A new retail shopping center is
now located directly adjacent to Wakefield. This high-visibility location
creates an opportunity for Wakefield for the conversion in the future to a
retail/showroom use.

The occupancy level for each of the five years ended December 31, 2002,
expressed as a percentage of the total net rentable square feet, and the
average annual effective rent per square foot, were as follows:

|     |  |                 |     |                          |  |   |      | 
|---- |  | --------------- | --- | ------------------------ |  | - | ---- | 
|     |  | Occupancy Level |     | Average Annual Effective
|     |  | Percentage      |     | Rent Per Square Foot    
|     |  |                 |     |                         
|2002 |  |                 | 100 | %                        |  | $ | 4.77 | 
|2001 |  |                 | 100 | %                        |  | $ | 4.61 | 
|2000 |  |                 | 100 | %                        |  | $ | 4.49 | 
|1999 |  |                 | 100 | %                        |  | $ | 4.40 | 
|1998 |  |                 | 100 | %                        |  | $ | 4.31 | 

Annual effective rent is calculated by dividing the aggregate of annualized
current monthly rental income for each tenant by the total square feet occupied
at the property.

One tenant occupies 100% of the net rentable square footage of the two
buildings. The principal terms of the lease and the nature of the tenants
business are as follows:

|                       |  |                            
|---------------------- |  | ---------------------------
|                       |  | Wakefield Engineering, Inc.
|                       |  |                            
|Nature of Business:    |  | Manufacturer               
|Lease Term:            |  | 10 years                   
|Expiration Date:       |  | November 30, 2004          
|Square Feet:           |  | 44,200                     
|(% of rentable total): |  | 100%                       
|Annual Rent:           |  | $211,000                   
|Rent Increase:         |  | Annual - CPI               
|Renewal Options:       |  | Two 5-year options         

Bristol Medical Center

In October 1987, the Partnership entered into an agreement with Rancon
Financial Corporation (RFC) to acquire Bristol Medical Center for a purchase
price of $5,105,000, plus all costs incurred by RFC in ownership and management
of the property from December 1986. The purchase price was paid in
installments through May 1988, for a total cost of $5,370,000. Bristol Medical
Center is located in Santa Ana, California, on the west side of Bristol Street,
approximately 1.5 miles from a major east-west freeway and approximately 2
miles from a major north-south freeway. The John Wayne Orange County airport is
located 2.5 miles northwest of the property.

Bristol Medical Center consists of two 2-story medical office buildings and
related parking spaces on approximately 3.42 acres. The two office buildings
contain an aggregate of approximately 52,311 net rentable square feet of office
space. Each of the buildings has one elevator and three stairways, and each
suite is served by its own roof-mounted heating and air conditioning unit. The
property contains uncovered parking for approximately 299 cars.

According to research conducted by the Partnerships leasing director, the
direct market area consists of five medical buildings totaling approximately
190,000 rentable square feet, all of which are older Class B Buildings. The
sub-market, consisting of smaller dental/medical offices and retail sites, is
being condemned or purchased section by section by the City of Santa Ana to
widen North Bristol Street. The renovation project has enhanced the area
considerably. Currently, total vacancy in this market is approximately 12%.
The annual rental rates for the class B medical buildings range from $15.00
per square foot to $17.40 per square foot on a modified gross basis (tenant
pays interior janitorial costs).

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The occupancy level for each of the five years ended December 31, 2002,
expressed as a percentage of the total net rentable square feet, and the
average annual effective rent per square foot, were as follows:

|     |  |                 |    |                          |  |   |       | 
|---- |  | --------------- | -- | ------------------------ |  | - | ----- | 
|     |  | Occupancy Level |    | Average Annual Effective
|     |  | Percentage      |    | Rent Per Square Foot    
|     |  |                 |    |                         
|2002 |  |                 | 86 | %                        |  | $ | 19.17 | 
|2001 |  |                 | 81 | %                        |  | $ | 18.84 | 
|2000 |  |                 | 69 | %                        |  | $ | 18.46 | 
|1999 |  |                 | 65 | %                        |  | $ | 18.00 | 
|1998 |  |                 | 60 | %                        |  | $ | 18.40 | 

Annual effective rent is calculated by dividing the aggregate of annualized
current monthly rental income for each tenant by the total square feet occupied
at the property.

The current annual rental rates for this property range from $18 to $29 per
square foot.

The current annual rental rates at Bristol Medical Center are higher than the
market average as the leases in effect are older and were signed at a time when
market rates were higher. Consequently, as tenants leases expire, rental rates
may decline. Bristol Medical Center benefits from its high-visibility location
on heavily traveled Bristol Street, a main thoroughfare which runs from
downtown Santa Ana to South Coast Plaza in Costa Mesa. There is excellent
public transportation with a bus stop directly in front of the property and
ample parking for medical tenants. The occupancy at Bristol Medical Center
increased 5% from 81% at December 31, 2001 to 86% at December 31, 2002
primarily due to expansion of an existing tenant and one new tenant.

There are two tenants that occupy more than ten percent of the net rentable
square footage of the Bristol Medical Center. The principal terms of the
leases and the nature of the tenants businesses are as follows:

|                       |  |                
|---------------------- |  | ---------------
|                       |  | St. Jude       
|                       |  | Heritage Health
|                       |  |                
|Nature of Business:    |  | Medical clinic 
|Lease Term:            |  | 5 years        
|Expiration Date:       |  | August 31, 2003
|Square Feet:           |  | 11,283         
|(% of rentable total): |  | 22%            
|Annual Rent:           |  | $221,000       
|Rent Increase:         |  | Annual - CPI   
|Renewal Options:       |  | None           

|                       |  |                       
|---------------------- |  | ----------------------
|                       |  | Bristol Medical Clinic
|                       |  |                       
|Nature of Business:    |  | Medical clinic        
|Lease Term:            |  | 7 years               
|Expiration Date:       |  | December 31, 2007     
|Square Feet:           |  | 13,674                
|(% of rentable total): |  | 27%                   
|Annual Rent:           |  | $257,000              
|Rent Increase:         |  | 3% annually           
|Renewal Options:       |  | None                  

St. Jude Heritage Health vacated the premises in September 2002, and is
continuing to pay their rent monthly. Management, along with independent
leasing brokers, will aggressively market the space prior to their lease
expiration.




Item 3. Legal Proceedings



| |  | None.
| |  | -----




Item 4. Submission of Matters to a Vote of Security Holders



| |  | None.
| |  | -----

4



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Part II




Item 5. Market for Partnerships Common Equity and Related Stockholder Matters

Market Information

There is no established trading market for the Units.

Holders

As of December 31, 2002, a total of 1,106 persons (Limited Partners) held
Units.

Distributions

Distributions are paid from either Cash From Operations or Cash From Sales or
Financing.

Cash From Operations is defined in the Partnership Agreement as all cash
receipts from operations in the ordinary course of business (except for the
sale, refinancing, exchange or other disposition of real property in the
ordinary course of business) after deducting payments for operating expenses.
Distributions of Cash From Operations are generally allocated as follows: (i)
first to the Limited Partners until they receive a noncumulative 6% return per
annum on their unreturned capital contributions and (ii) the remainder, if any
in a given year, shall be divided in the ratio of 90% to the Limited Partners
and 10% to the General Partner.

Distributions equal to the amounts otherwise allocable to the General Partner
but reallocated to the Limited Partners pursuant to (i) above shall be paid to
the General Partner on the next occasion on which Cash From Operations is
available for distribution to Limited Partners in an amount in excess of the
amount required to provide the Limited Partners with a 6% per annum return on
their unreturned capital contributions, in which case the excess shall be paid
to the General Partner in an amount up to the aggregate amount previously
re-allocated pursuant to (i) above and not subsequently repaid in accordance
with the provisions of this paragraph.

Cash From Sales or Financing is defined in the Partnership Agreement as the net
cash realized by the Partnership from the sale, disposition or refinancing of
any property after retirement of applicable mortgage debt and all expenses
related to the transaction, together with interest on any notes taken back by
the Partnership upon the sale of a property. All distributions of Cash From
Sales or Financing are allocated generally as follows: (i) first, 2% to the
General Partner and 98% to the Limited Partners until the Limited Partners have
received an amount equal to their capital contributions; (ii) second, 2% to the
General Partner and 98% to the Limited Partners until the Limited Partners have
received a 6% return on their unreturned capital contributions (less prior
distributions of Cash From Operations); (iii) third, to the General Partner the
amount of subordinated real estate commissions payable per the Partnership
Agreement; (iv) fourth, 2% to the General Partner and 98% to the Limited
Partners until the Limited Partners have received an additional 4% return on
their unreturned capital contributions (less prior distributions of Cash From
Operations); (v) fifth, 2% to the General Partner and 98% to the Limited
Partners until the Limited Partners who purchased their Units prior to June 1,
1988, receive an additional return (depending on the date on which they
purchased the Units) on their unreturned capital of either 8%, 5% or 2%
(calculated through the first anniversary date of the purchase of the Units);
(vi) sixth, 98% to the General Partner and 2% to the Limited Partners until the
General Partner has received an amount equal to 15% of all prior distributions
made to the Limited Partners and the General Partner pursuant to subparagraphs
(iv) and (v) (less prior distributions to the General Partner under
subparagraphs (iv) and (v)); and (vii) seventh, 85% to the Limited Partners and
15% to the General Partner. A more detailed statement of the distribution
policies is set forth in the Partnership Agreement.

The following distributions of Cash From Operations were made by the
Partnership during the three most recent fiscal years:

|             |  |                     |         |             |  |                 |       |        |  |  |    | 
|------------ |  | ------------------- | ------- | ----------- |  | --------------- | ----- | ------ |  |  | -- | 
|             |  |                     |         |             |  | Amount          |       | Amount
|Date of      |  | Amount Distributed  |         | Distributed |  | Distributed to 
|Distribution |  | to Limited Partners |         | Per Unit    |  | General Partner
|             |  |                     |         |             |  |                
|08/29/02     |  | $                   | 135,600 |             |  | $               | 10.10 |        |  |  |   | 
|02/26/02     |  | $                   | 135,600 |             |  | $               | 10.00 |        |  |  |  | 
|08/29/01     |  | $                   | 138,330 |             |  | $               | 10.00 |        |  |  |   | 
|02/26/01     |  | $                   | 138,330 |             |  | $               | 10.00 |        |  |  |  | 
|08/29/00     |  | $                   | 145,550 |             |  | $               | 10.00 |        |  |  |   | 
|02/25/00     |  | $                   | 145,550 |             |  | $               | 10.00 |        |  |  |   | 

Of the total distributions noted above, $4.76, $7.18, and $8.06 per unit
represented a return of capital for the fiscal years ended December 31, 2002,
2001 and 2000, respectively.

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Item 6. Selected Financial Data

The following is selected financial data for each of the five years in the
period ended December 31, 2002 (in thousands, except per Unit data):

|                                                       |  |      |       |      |  |      |       |      |  |      |       |  |  |   |       |  |  |   |        |  
|------------------------------------------------------ |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  | - | ----- |  |  | - | ------ | -
|                                                       |  | 2002 |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                                                       |  |      |       |      |  |      |       |      |  |     
|Rental income                                          |  | $    | 1,136 |      |  | $    | 968   |      |  | $    | 859   |  |  | $ | 868   |  |  | $ | 1,022  |  
|Provision for
impairment of
investments in real
estate |  | $    |     |      |  | $    |     |      |  | $    |     |  |  | $ |     |  |  | $ | 451    |  
|Net income (loss)                                      |  | $    | 208   |      |  | $    | 178   |      |  | $    | 173   |  |  | $ | 391   |  |  | $ | (279   | )
|Net income (loss)
allocable to
limited partners        |  | $    | 206   |      |  | $    | 176   |      |  | $    | 171   |  |  | $ | 387   |  |  | $ | (276   | )
|Net income (loss)
per limited
partnership unit         |  | $    | 15.34 |      |  | $    | 12.82 |      |  | $    | 11.94 |  |  | $ | 26.59 |  |  | $ | (18.96 | )
|Total assets                                           |  | $    | 4,871 |      |  | $    | 4,998 |      |  | $    | 5,149 |  |  | $ | 5,488 |  |  | $ | 6,012  |  
|Cash distributions
per limited
partnership unit        |  | $    | 20.10 |      |  | $    | 20.00 |      |  | $    | 20.00 |  |  | $ | 61.90 |  |  | $ | 3.80   |  




Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Partnerships
financial statements and notes thereto in Item 15 of Part IV:

NEW ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board (FASB) has approved for issuance a
number of new accounting standards. Management does not expect these new
accounting standards to have a material impact on the Partnerships financial
position or results of operations, although they may in future periods. These
new accounting standards are as follows:

In June 2001, the FASB approved for issuance SFAS 143, Accounting for Asset
Retirement Obligations. SFAS 143 requires that the fair value of a liability
for an asset retirement obligation be recognized in the period in which it is
incurred and that the associated asset retirement costs be capitalized as part
of the carrying value of the related long-lived asset. SFAS 143 will be
effective January 1, 2003 for the Partnership. Management does not expect this
standard to have a material impact on the Partnerships consolidated financial
position or results of operations.

In May 2002, the FASB approved for issuance SFAS 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. SFAS 145 requires gains and losses from extinguishment of debt
to be classified as an extraordinary item only if the criteria in APB No. 30
has been met. Further, lease modifications with economic effects similar to
sale-leaseback transactions must be accounted for in the same manner as
sale-leaseback transactions. While the technical corrections to existing
pronouncements are not substantive in nature, in some instances they may change
accounting practice. SFAS 145 will be effective January 1, 2003 for the
Partnership. Management does not expect this standard to have a material
impact on the Partnerships consolidated financial position and results of
operations.

In June 2002, the FASB approved for issuance SFAS 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS 146 addresses accounting
and reporting for costs associated with exit and disposal activities and
supercedes Emerging Issues Task Force Issue No. 94-3 (EITF 94-3), Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit
an Activity (including Certain Costs Incurred in a Restructuring). SFAS 146
requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred, as defined by the
Statement. Under EITF 94-3, an exit cost was recognized at the date an entity
committed to an exit plan. Additionally, SFAS 146 provides that exit and
disposal costs should be measured at fair value and that the associated
liability will be adjusted for changes in estimated cash flows. The provisions
of SFAS 146 are effective for exit and disposal activities that are initiated
after December 31, 2002. Management does not expect this standard to have a
material impact on the Partnerships consolidated financial position and
results of operations.

In November 2002, the FASB approved for issuance FASB Interpretation 45 (FIN
45), Guarantors Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others. FIN 45 elaborates on
the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
It also clarifies that a guarantor is required to recognize, at the inception
of a guarantee, a liability for the fair value of the

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obligation undertaken in issuing the guarantee. The initial recognition and
initial measurement provisions of FIN 45 are applicable on a prospective basis
to guarantees issued or modified after December 31, 2002. The disclosure
requirements are effective for financial statements of interim and annual
periods ending after December 15, 2002. The Partnership does not provide for
any guarantees, therefore, the pronouncement is not expected to have any impact
on the Partnerships financial position or results of operations.

In January 2003, the FASB approved for issuance FASB Interpretation No. 46 (FIN
46), Consolidation of Variable Interest Entities. FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, Consolidated Financial
Statements to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 applies immediately
to variable interest entities created after January 31, 2003, and to variable
interest entities in which an enterprise obtains an interest after that date.
It applies in the first fiscal year or interim period beginning after June 15,
2003, to variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. FIN 46 may be applied
prospectively with a cumulative-effect adjustment as of the date on which it is
first applied or by restating previously issued financial statements for one or
more years with a cumulative-effect adjustment as of the beginning of the first
year restated. The disclosure requirements of FIN 46 are effective for all
financial statements initially issued after January 31, 2003. The disclosures
provided reflect managements understanding and analysis of FIN 46 based upon
information currently available. The evaluation of the Partnerships various
arrangements is ongoing and is subject to change in the event additional
interpretive guidance is provided by the Financial Accounting Standards Board
or others.

LIQUIDITY AND CAPITAL RESOURCES

On April 21, 1989, the Partnership was funded from the sale of 14,559 limited
partnership units (Units) in the amount of $14,559,000. Four Units were
retired in 1990. In 2002, 2001 and 2000, a total of 281, 273 and 722 Units
were repurchased. As of December 31, 2002, 13,279 Units remain outstanding.

As of December 31, 2002, the Partnership had cash of $712,000. The remainder
of the Partnerships assets consists primarily of its real estate investments,
which totaled approximately $4,072,000 at December 31, 2002.

The Partnership is contingently liable for a subordinated real estate
commission payable to the General Partner in the amount of $30,000 at December
31, 2002 for the May 1999 sale of Aztec Village Shopping Center. Upon the sale
of a Partnership property, the Partnership Agreement entitles the General
Partner to a subordinated real estate commission, provided that, in no event
shall the subordinated real estate commission payable to the General Partner
exceed 3% of the gross sales price of the property which is sold. The
subordinated real estate commission is payable only after the limited partners
have received distributions equal to their original invested capital plus a
cumulative non-compounded return of 6% per annum on their adjusted invested
capital. Since the circumstances under which this commission would be payable
are limited, the liability has not been recognized in the Partnerships
financial statements; however, the amount will be recorded if and when it
becomes payable.

Operationally, the Partnerships primary source of funds consists of cash
generated from operating the rental properties. Cash flows from operating
activities have been sufficient to provide funds to reinvest in the properties
by way of improvements, as well as to fund distributions to the limited
partners. Another source of funds has been the interest earned on invested cash
balances.

Management believes that the Partnerships cash balance as of December 31,
2002, together with the cash from operations and sales of properties, will be
sufficient to finance the Partnerships and the properties continued operations
on both a short-term and long-term basis. There can be no assurance that the
Partnerships results of operations will not fluctuate in the future and at
times affect its ability to meet its operating requirements.

Operating Activities

During the year ended December 31, 2002, the Partnerships cash provided by
operating activities totaled $450,000.

The $5,000 decrease in deferred costs at December 31, 2002, compared to
December 31, 2001, was due to $24,000 lease commissions paid for new and
renewal leases, offset by $29,000 of amortization expense.

The $19,000 increase in prepaid expenses and other assets at December 31, 2002,
compared to December 31, 2001, was primarily due to an increase in tenant rents
receivable related to the recovery of property tax expense.

The $10,000 increase in accounts payable and other liabilities at December 31,
2002, compared to December 31, 2001, was primarily due to accruals for audit
and tax preparation fees and building operating expenses.

7



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##### Table of Contents



Investing Activities

During the year ended December 31, 2002, the Partnerships cash used for
investing activities totaled $141,000 for improvement of the rental properties.

Financing Activities

During the year ended December 31, 2002, the Partnerships cash used for
financing activities totaled $345,000 which consisted of $271,000 of
distributions to the Limited Partners, and $74,000 paid to redeem 281 limited
partnership units (Units).

RESULTS OF OPERATIONS

2002 versus 2001

Rental income increased $168,000, or 17%, for the year ended December 31, 2002,
compared to the year ended December 31, 2001, primarily due to an approximately
20% increase in occupancy at Bristol Medical Center in May 2001.

Occupancy rates at the Partnerships rental properties were as follows:

|                                 |  |              |     |      |  |  |     |  
|-------------------------------- |  | ------------ | --- | ---- |  |  | --- | -
|                                 |  | December 31,
|                                 |  |             
|                                 |  | 2002         |     | 2001
|                                 |  |              |     |     
|Bristol Medical Center           |  |              | 86  | %    |  |  | 81  | %
|Wakefield Building               |  |              | 100 | %    |  |  | 100 | %
|                                 |  |              |     |      |  |  |     |  
|Total weighted average occupancy |  |              | 93  | %    |  |  | 88  | %
|                                 |  |              |     |      |  |  |     |  

The 5% increase in occupancy from December 31, 2001 to December 31, 2002 at
Bristol Medical Center was primarily due to the leasing of 1,000 square feet of
previously vacant space to a new tenant, as well as a 3,300 square foot
expansion for an existing tenant, slightly offset by a decrease of 1,700 square
feet due to an existing tenant moving out upon the expiration of their lease.

Interest and other income decreased $15,000 for the year ended December 31,
2002, compared to the year ended December 31, 2001, primarily due to lower
interest rates.

Operating expenses increased $85,000, or 22%, for the year ended December 31,
2002, compared to the year ended December 31, 2001, primarily due to an
increase in occupancy at Bristol Medical Center and increase in utility cost.

Depreciation and amortization expense increased $53,000, or 24%, for the year
ended December 31, 2002, compared to December 31, 2001, primarily due to
additions to rental properties.

General and administrative expenses decreased $15,000, or 7%, during the year
ended December 31, 2002, compared to the year ended December 31, 2001,
primarily due to a decrease in legal costs.

2001 versus 2000

Rental income increased $109,000 for the year ended December 31, 2001, compared
to the year ended December 31, 2000, primarily due to an increase in occupancy
at Bristol Medical Center.

Interest and other income decreased $20,000 for the year ended December 31,
2001, compared to the year ended December 31, 2000, primarily due to a lower
average invested balance resulting from investing in additions to real estate
and lower interest rates.

Operating expenses increased $56,000, or 17%, for the year ended December 31,
2001, compared to the year ended December 31, 2000, primarily due to an
increase in occupancy at Bristol Medical Center.

Depreciation and amortization expense increased $15,000, or 7%, for the year
ended December 31, 2001, compared to December 31, 2000, primarily due to the
additions to rental properties.

General and administrative expenses increased $13,000, or 7%, during the year
ended December 31, 2001, compared to the year ended December 31, 2000,
primarily due to an increase in investor service expenses and audit and tax
preparation fees.

8



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##### Table of Contents



CRITICAL ACCOUNTING POLICIES

Revenue recognized on a
straight-line basis
The Partnership recognizes rental revenue on a straight-line basis at amounts
that it believes it will collect on a tenant by tenant basis. The estimation
process may result in higher or lower levels from period to period as the
Partnerships collection experience and the credit quality of the Partnerships
tenants changes. Actual amounts collected could be lower or higher than the
amounts recognized on a straight-line basis if specific tenants are unable to
pay rent that the Partnership has previously recognized as revenue.

Carrying value of rental
properties
The Partnerships rental properties, including the related land, are stated at
cost unless events or circumstances indicate that cost cannot be recovered, in
which case, the carrying value of the property is reduced to its estimated fair
value. Estimated fair value is based upon (i) the Partnerships plans for the
continued operations of each property, and (ii) is computed using estimated
sales price, as determined by prevailing market values for comparable
properties and/or the use of capitalization rates multiplied by annualized
rental income based upon the age, construction and use of the building. The
fulfillment of the Partnerships plans related to each of its properties is
dependent upon, among other things, the presence of economic conditions which
will enable the Partnership to continue to hold and operate the properties
prior to their eventual sale. Due to uncertainties inherent in the valuation
process and in the economy, it is reasonably possible that the actual results
of operating and disposing of the Partnerships properties could be materially
different than current expectations.




Item 7A. Qualitative and Quantitative Information About Market Risk

As of December 31, 2002, the Partnership had cash equivalents of $550,000
invested in interest-bearing certificates of deposit. These investments are
subject to interest rate risk due to changes in interest rates upon maturity.
The Partnership does not own any derivative instruments. Declines in interest
rates over time would reduce Partnership interest income.




Item 8. Financial Statements and Supplementary Data

For information with respect to Item 8, see Financial Statements and
Schedule as listed in Item 15.




Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

On July 18, 2002, the General Partner of Rancon Income Fund I, a
California Limited Partnership (the Partnership), engaged KPMG LLP
(KPMG) to serve as the Partnerships independent public
accountants for the fiscal year ending December 31, 2002, to replace
Arthur Andersen LLP (Arthur Andersen), the Partnerships former
independent public accountants.

Arthur Andersens reports on the Partnerships financial statements
for each of the fiscal years ended December 31, 2001 and 2000 did
not contain an adverse opinion or disclaimer of opinion, nor were
they qualified or modified as to uncertainty, audit scope or
accounting principles. Arthur Andersens report on the Partnerships
financial statements for the fiscal year ended December 31, 2001 was
issued on an unqualified basis in conjunction with the publication
of the Partnerships Annual Report on Form 10-K.

During the fiscal years ended December 31, 2001 and 2000 and through
July 18, 2002, there were no disagreements with Arthur Andersen on
any matter of accounting principle or practice, financial statement
disclosure, or auditing scope or procedure which, if not resolved to
Arthur Andersens satisfaction, would have caused them to make
reference to the subject matter in connection with their report on
the Partnerships financial statements for such fiscal years; and
there were no reportable events as defined in Item 304(a) (1) (v) of
Regulation S-K.

Pursuant to Item 304 (a) (3) of Regulation S-K, the Partnership is
required to provide Arthur Andersen with a copy of the foregoing
disclosures and to file as an exhibit a letter from Arthur Andersen
stating whether it agrees with the statements made in this Item. the
Partnership provided Arthur Andersen with a copy of the foregoing
disclosures. Arthur Andersen advised the Partnership that it has
ceased furnishing such letters. Item 304T (b) (2) of Regulation S-K
provides that if an issuer cannot obtain such a letter after
reasonable efforts, compliance with Item 304 (a) (3) is not
required. After reasonable efforts, the Partnership was not able to
obtain such a letter; accordingly, no such letter has been filed
herewith.

During the fiscal years ended December 31, 2001 and 2000 and through
July 18, 2002, the Partnership did not consult KPMG with respect to
the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that
might be rendered on the Partnerships financial statements, or any
other matter that was the subject of a disagreement or a reportable
event as set forth in Items 304(a) (2) (i) and (ii) of Regulation
S-K.

9



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##### Table of Contents






Part III




Item 10. Directors and Executive Officers of the Partnership

Rancon Income Partners I, L.P. is the General Partner of the
Partnership. Daniel Lee Stephenson and Rancon Financial Corporation
(RFC) are the General Partners of Rancon Income Partners I, L.P.
The executive officer and director of RFC is Daniel L. Stephenson
who is Director, President, Chief Executive Officer and Chief
Financial Officer.

Mr. Stephenson, age 59, founded RFC in 1971 for the purpose of
establishing a commercial, industrial and residential property
syndication, development and brokerage concern. Mr. Stephenson has,
from inception, held the position of Director. In addition, Mr.
Stephenson was President and Chief Executive Officer of RFC from
1971 to 1986, from August 1991 to September 1992, and from March 31,
1995 to present. Mr. Stephenson is Chairman of the Board of PacWest
Group, Inc., a real estate firm which has acquired a portfolio of
assets from the Resolution Trust Corporation.




Item 11. Executive Compensation

The Partnership has no executive officers. For information relating
to fees, compensation, reimbursements and distributions paid to
related parties, reference is made to Item 13 below.




Item 12. Security Ownership of Certain Beneficial Owners and
Management

Security Ownership of Certain Beneficial Owners

No person is known by the Partnership to be the beneficial owner of
more than 5% of the Units.

Security Ownership of Management

|               |  |                          |  |                      |  |                     
|-------------- |  | ------------------------ |  | -------------------- |  | --------------------
|               |  |                          |  |                      |  | Amount and Nature of
|Title of Class |  | Name of Beneficial Owner |  | Beneficial Ownership |  | Percent of Class    
|               |  |                          |  |                      |  |                     
|Units          |  | Daniel L. Stephenson     |  | 3 Units (trust)      |  | Less than 1 percent 

Changes in Control

The Limited Partners have no right, power or authority to act for or
bind the Partnership. However, the Limited Partners have the power
to vote upon the following matters affecting the basic structure of
the Partnership, each of which shall require the approval of Limited
Partners holding a majority of the outstanding Units: (i) amendment
of the Partnership Agreement; (ii) termination and dissolution of
the Partnership; (iii) sale, exchange or pledge of all or
substantially all of the assets of the Partnership; (iv) removal of
the General Partner or any successor General Partner; (v) election
of a new General Partner; (vi) the approval or disapproval of the
terms of purchase of the General Partners interest; and (vii) the
modification of the terms of any agreement between the Partnership
and the General Partner or an affiliate.




Item 13. Certain Relationships and Related Transactions

For the year ended December 31, 2002, the Partnership did not incur
any costs reimbursable to RFC or any affiliate of the Partnership.




Item 14. Controls and procedures

(a)  Evaluation of disclosure controls and procedures. The General
Partners chief executive officer and chief financial officer, after
evaluating the effectiveness of the Partnerships disclosure
controls and procedures (as defined in the Securities Exchange Act
of 1934 Rules 13a-14(c) and 15-d-14(c)) as of a date (the Evaluation
Date) within 90 days before the filing date of this annual report,
has concluded that as of the Evaluation Date, the Partnerships
disclosure controls and procedures were effective and designed to
ensure that material information relating to the Partnership and its
consolidated subsidiaries would be made known to him by others within
those entities.

(b)  Changes in internal controls. There were no significant changes
in the Partnerships internal controls or in other factors that could
significantly affect those controls subsequent to the Evaluation
Date.

10



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##### Table of Contents






Part IV




Item 15 Exhibits, Financial Statements, Schedule and Reports on Form
8-K

(a)   The following documents are filed as part of this report



| | (1) |  | Financial Statements:                                                                            
| | --- |  | -------------------------------------------------------------------------------------------------
|
| |     |  | Independent Auditors Report                                                                     
|
| |     |  | Report of Former Independent Public Accountants                                                  
|
| |     |  | Balance Sheets as of December 31, 2002 and 2001                                                  
|
| |     |  | Statements of Operations for the Years Ended December 31, 2002,
2001 and 2000                    
|
| |     |  | Statements of Partners Equity for the Years Ended December
31, 2002, 2001 and 2000              
|
| |     |  | Statements of Cash Flows for the Years Ended December 31, 2002,
2001 and 2000                    
|
| |     |  | Notes to Financial Statements                                                                    
|
| | (2) |  | Financial Statement Schedule:                                                                    
|
| |     |  | Schedule III  Real Estate and Accumulated Depreciation as
of December 31, 2002 and Notes thereto

All other schedules are omitted because they are not applicable
or the required information is shown in the financial statements or
notes thereto.



| | (3) |  | Exhibits:
| | --- |  | ---------
|
| |     |  | None     

(b)   Reports on Form 8-K



| |  |  | None.
| |  |  | -----

11



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, the Partnership has duly caused
this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

|      |                |  |     |                                                                      |                          |                                                                                                                                                                                  
|----- | -------------- |  | --- | -------------------------------------------------------------------- | ------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                |  |     | RANCON INCOME FUND I,
a California Limited Partnership
(Partnership)
|      |                |  |     |                                                                      |                          |                                                                                                                                                                                  
|      |                |  |     | By:                                                                  |                          | RANCON INCOME PARTNERS I, L.P.
General Partner                                                                                                                                   
|      |                |  |     |                                                                      |                          |                                                                                                                                                                                  
|Date: | March 28, 2003 |  | By: |                                                                      | /s/ Daniel L. Stephenson
|      |                |  |     |                                                                      |                          |                                                                                                                                                                                  
|      |                |  |     |                                                                      |                          | Daniel L. Stephenson,
Director, President, Chief Executive Officer and
Chief Financial Officer of
Rancon Financial Corporation,
General Partner of
Rancon Income Partners I, L.P.

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of
the Partnership and in the capacities and on the dates indicated.

|      |                |  |     |     |                          |                                                                                                                                                                                  
|----- | -------------- |  | --- | --- | ------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                |  |     | By: |                          | RANCON INCOME PARTNERS I, L.P.
General Partner                                                                                                                                   
|      |                |  |     |     |                          |                                                                                                                                                                                  
|Date: | March 28, 2003 |  | By: |     | /s/ Daniel L. Stephenson
|      |                |  |     |     |                          |                                                                                                                                                                                  
|      |                |  |     |     |                          | Daniel L. Stephenson,
Director, President, Chief Executive Officer and
Chief Financial Officer of
Rancon Financial Corporation,
General Partner of
Rancon Income Partners I, L.P.

12



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##### Table of Contents



RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

INDEX TO FINANCIAL STATEMENTS
AND SCHEDULE

|                                                                                                  |  |      |       | 
|------------------------------------------------------------------------------------------------- |  | ---- | ----- | 
|                                                                                                  |  | Page
|                                                                                                  |  |     
|Independent Auditors Report                                                                      |  |      | 14    | 
|Report of Former Independent Public Accountants                                                   |  |      | 15    | 
|Balance Sheets as of December 31, 2002 and 2001                                                   |  |      | 16    | 
|Statements of Operations for the years ended December 31, 2002,
2001 and 2000                     |  |      | 17    | 
|Statements of Partners Equity for the years ended December 31, 2002,
2001 and 2000               |  |      | 18    | 
|Statements of Cash Flows for the years ended December 31, 2002,
2001 and 2000                     |  |      | 19    | 
|Notes to Financial Statements                                                                     |  |      | 20-26 | 
|Schedule III - Real Estate and Accumulated Depreciation
as of December 31, 2002 and Notes thereto |  |      | 27-28 | 

All other schedules are omitted because they are not applicable or
the required information is shown in the financial statements or
notes thereto.

13



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##### Table of Contents



Independent Auditors Report

The General Partner
RANCON INCOME FUND I, A California Limited Partnership:

We have audited the accompanying balance sheet of RANCON INCOME FUND
I, A California Limited Partnership, as of December 31, 2002, and the
related statements of operations, partners equity, and cash flows
for the year then ended. In connection with our audit of the 2002
financial statements, we have also audited the related 2002 financial
statement schedule listed in the accompanying index to the financial
statements and schedule. These financial statements and financial
statement schedule are the responsibility of the Partnerships
management. Our responsibility is to express an opinion on these
2002 financial statements and financial statement schedule based on
our audit. The 2001 and 2000 financial statements and financial
statement schedule of RANCON INCOME FUND I, A California Limited
Partnership, as listed in the accompanying index were audited by
other auditors who have ceased operations. Those auditors expressed
an unqualified opinion on those financial statements and financial
statement schedule in their report dated February 1, 2002.

We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the 2002 financial statements referred to above
present fairly, in all material respects, the financial position of
RANCON INCOME FUND I, A California Limited Partnership, as of
December 31, 2002, and the results of its operations and its cash
flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America. Also,
in our opinion, the related 2002 financial statement schedule when
considered in relation to the financial statements taken as a whole,
presents fairly, in all material respects, the information set forth
therein.

| |                      
| | ---------------------
| | /s/ KPMG LLP
KPMG LLP

San Francisco, California
February 7, 2003

14



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##### Table of Contents



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
RANCON INCOME FUND I:

We have audited the accompanying balance sheets of RANCON INCOME FUND I, A
CALIFORNIA LIMITED PARTNERSHIP, as of December 31, 2001 and 2000, and the
related statements of operations, partners equity and cash flows for the
years ended December 31, 2001, 2000 and 1999. These financial statements
and the schedule referred to below are the responsibility of the
Partnerships management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of RANCON INCOME FUND I as
of December 31, 2001 and 2000, and the results of its operations and its
cash flows for the years ended December 31, 2001, 2000 and 1999, in
conformity with accounting principles generally accepted in the United
States.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to
financial statements and schedule is presented for purposes of complying
with the Securities and Exchange Commissions rules and is not a required
part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in our audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

|                                              |  |                                            
|--------------------------------------------- |  | -------------------------------------------
|San Francisco, California    February 1,
2002 |  | /s/ Arthur Andersen LLP
Arthur Andersen LLP

This is a copy of the audit report previously issued by Arthur Andersen LLP in
connection with RANCON INCOME FUND Is filing on Form 10-K for the year ended
December 31, 2001. This audit report has not been reissued by Arthur Andersen
LLP in connection with this filing on Form 10-K.

15



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##### Table of Contents



RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

Balance Sheets
December 31, 2002 and 2001
(in thousands, except units outstanding)

|                                                                                                           |                                                                                                                        |                                        |     |              |       |              |     |        |       | 
|---------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | --- | ------------ | ----- | ------------ | --- | ------ | ----- | 
|                                                                                                           |                                                                                                                        |                                        |     | December 31, |       | December 31,
|                                                                                                           |                                                                                                                        |                                        |     | 2002         |       | 2001        
|                                                                                                           |                                                                                                                        |                                        |     |              |       |             
|Assets                                                                                                     |                                                                                                                        |                                        |     |              |       |              |     |       
|Real estate investments:                                                                                   |                                                                                                                        |                                        |     |              |       |              |     |       
|                                                                                                           | Rental properties, gross                                                                                               |                                        | $   | 6,522        |       |              | $   | 6,381  |      
|                                                                                                           | Accumulated depreciation                                                                                               |                                        |     | (2,450       | )     |              |     | (2,204 | )    
|                                                                                                           |                                                                                                                        |                                        |     |              |       |              |     |       
|                                                                                                           | Rental properties, net                                                                                                 |                                        |     | 4,072        |       |              |     | 4,177  |      
|Cash and cash equivalents                                                                                  |                                                                                                                        |                                        | 712 |              |       |              | 748 |       
|Deferred costs, net of accumulated amortization
of $99 and $70 at December 31, 2002 and 2001,
respectively |                                                                                                                        |                                        | 54  |              |       |              | 59  |       
|Prepaid expenses and other assets                                                                          |                                                                                                                        |                                        | 33  |              |       |              | 14  |       
|                                                                                                           |                                                                                                                        |                                        |     |              |       |              |     |       
|                                                                                                           |                                                                                                                        | Total assets                           |     | $            | 4,871 |              |     | $      | 4,998 | 
|                                                                                                           |                                                                                                                        |                                        |     |              |       |              |     |        |      
|Liabilities and Partners Equity                                                                           |                                                                                                                        |                                        |     |              |       |              |     |       
|Liabilities:                                                                                               |                                                                                                                        |                                        |     |              |       |              |     |       
|                                                                                                           | Accounts payable and accrued expenses                                                                                  |                                        | $   | 48           |       |              | $   | 43     |      
|                                                                                                           | Security deposits                                                                                                      |                                        |     | 83           |       |              |     | 78     |      
|                                                                                                           |                                                                                                                        |                                        |     |              |       |              |     |       
|                                                                                                           |                                                                                                                        | Total liabilities                      |     |              | 131   |              |     |        | 121   | 
|                                                                                                           |                                                                                                                        |                                        |     |              |       |              |     |       
|Commitments and contingent liabilities (Note 5)                                                            |                                                                                                                        |                                        |     |              |       |              |     |       
|Partners Equity:                                                                                          |                                                                                                                        |                                        |     |              |       |              |     |       
|                                                                                                           | General partner                                                                                                        |                                        |     | (187         | )     |              |     | (189   | )    
|                                                                                                           | Limited partners, 13,279 and 13,560 limited
partnership units outstanding at December 31,
2002, and 2001, respectively |                                        |     | 4,927        |       |              |     | 5,066  |      
|                                                                                                           |                                                                                                                        |                                        |     |              |       |              |     |       
|                                                                                                           |                                                                                                                        | Total partners equity                 |     |              | 4,740 |              |     |        | 4,877 | 
|                                                                                                           |                                                                                                                        |                                        |     |              |       |              |     |       
|                                                                                                           |                                                                                                                        | Total liabilities and partners equity |     | $            | 4,871 |              |     | $      | 4,998 | 
|                                                                                                           |                                                                                                                        |                                        |     |              |       |              |     |        |      

The accompanying notes are an integral part of these financial statements.

16



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##### Table of Contents



RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

Statements of Operations
For the years ended December 31, 2002, 2001 and 2000
(in thousands, except per unit and unit amounts)

|                                                                                    |                                |                                                  |        |       |       |      |        |       |       |   |        |       |       | 
|----------------------------------------------------------------------------------- | ------------------------------ | ------------------------------------------------ | ------ | ----- | ----- | ---- | ------ | ----- | ----- | - | ------ | ----- | ----- | 
|                                                                                    |                                |                                                  |        | 2002  |       | 2001 |        | 2000 
|                                                                                    |                                |                                                  |        |       |       |      |        |      
|Revenue                                                                             |                                |                                                  |        |       |       |      |        |       |       |   |        |      
|                                                                                    | Rental income                  |                                                  | $      | 1,136 |       |      | $      | 968   |       |   | $      | 859   |      
|                                                                                    | Interest and other income      |                                                  |        | 11    |       |      |        | 26    |       |   |        | 46    |      
|                                                                                    |                                |                                                  |        |       |       |      |        |       |       |   |        |      
|                                                                                    |                                | Total revenue                                    |        |       | 1,147 |      |        |       | 994   |   |        |       | 905   | 
|                                                                                    |                                |                                                  |        |       |       |      |        |       |       |   |        |      
|Expenses                                                                            |                                |                                                  |        |       |       |      |        |       |       |   |        |      
|                                                                                    | Operating                      |                                                  |        | 471   |       |      |        | 386   |       |   |        | 330   |      
|                                                                                    | Depreciation and amortization  |                                                  |        | 275   |       |      |        | 222   |       |   |        | 207   |      
|                                                                                    | General and administrative     |                                                  |        | 193   |       |      |        | 208   |       |   |        | 195   |      
|                                                                                    |                                |                                                  |        |       |       |      |        |       |       |   |        |      
|                                                                                    |                                | Total expenses                                   |        |       | 939   |      |        |       | 816   |   |        |       | 732   | 
|                                                                                    |                                |                                                  |        |       |       |      |        |       |       |   |        |      
|                                                                                    |                                | Net income                                       |        | $     | 208   |      |        | $     | 178   |   |        | $     | 173   | 
|                                                                                    |                                |                                                  |        |       |       |      |        |       |       |   |        |       |      
|Basis and diluted net income per limited partnership unit                           |                                | $                                                | 15.34  |       |       | $    | 12.82  |       |       | $ | 11.94  |      
|                                                                                    |                                |                                                  |        |       |       |      |        |       |       |   |        |       |      
|Distributions per limited partnership unit:                                         |                                |                                                  |        |       |       |      |        |       |       |   |        |      
|                                                                                    | From net income                |                                                  | $      | 15.34 |       |      | $      | 12.82 |       |   | $      | 11.94 |      
|                                                                                    | Representing return of capital |                                                  |        | 4.76  |       |      |        | 7.18  |       |   |        | 8.06  |      
|                                                                                    |                                |                                                  |        |       |       |      |        |       |       |   |        |      
|                                                                                    |                                | Total distributions per limited partnership unit |        | $     | 20.10 |      |        | $     | 20.00 |   |        | $     | 20.00 | 
|                                                                                    |                                |                                                  |        |       |       |      |        |       |       |   |        |       |      
|Weighted average number of limited
partnership units outstanding during each period |                                |                                                  | 13,429 |       |       |      | 13,732 |       |       |   | 14,316 |      
|                                                                                    |                                |                                                  |        |       |       |      |        |       |       |   |        |      

The accompanying notes are an integral part of these financial statements.

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RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

Statements of Partners Equity
For the years ended December 31, 2002, 2001 and 2000
(in thousands)

|                                        |  |         |      |          |  |       |       |   |  |   |       |  
|--------------------------------------- |  | ------- | ---- | -------- |  | ----- | ----- | - |  | - | ----- | -
|                                        |  | General |      | Limited  |  |      
|                                        |  | Partner |      | Partners |  | Total
|                                        |  |         |      |          |  |      
|Balance at December 31, 1999            |  | $       | (193 | )        |  | $     | 5,573 |   |  | $ | 5,380 |  
|Retirement of limited partnership units |  |         |    |          |  |       | (216  | ) |  |   | (216  | )
|Distributions                           |  |         |    |          |  |       | (291  | ) |  |   | (291  | )
|Net income                              |  |         | 2    |          |  |       | 171   |   |  |   | 173   |  
|                                        |  |         |      |          |  |       |       |   |  |   |       |  
|Balance at December 31, 2000            |  |         | (191 | )        |  |       | 5,237 |   |  |   | 5,046 |  
|Retirement of limited partnership units |  |         |    |          |  |       | (70   | ) |  |   | (70   | )
|Distributions                           |  |         |    |          |  |       | (277  | ) |  |   | (277  | )
|Net income                              |  |         | 2    |          |  |       | 176   |   |  |   | 178   |  
|                                        |  |         |      |          |  |       |       |   |  |   |       |  
|Balance at December 31, 2001            |  |         | (189 | )        |  |       | 5,066 |   |  |   | 4,877 |  
|Retirement of limited partnership units |  |         |    |          |  |       | (74   | ) |  |   | (74   | )
|Distributions                           |  |         |    |          |  |       | (271  | ) |  |   | (271  | )
|Net income                              |  |         | 2    |          |  |       | 206   |   |  |   | 208   |  
|                                        |  |         |      |          |  |       |       |   |  |   |       |  
|Balance at December 31, 2002            |  | $       | (187 | )        |  | $     | 4,927 |   |  | $ | 4,740 |  
|                                        |  |         |      |          |  |       |       |   |  |   |       |  

The accompanying notes are an integral part of these financial statements

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RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

Statements of Cash Flows
For the years ended December 31, 2002, 2001 and 2000
(in thousands)

|                                                                                |                                         |                                                                                   |                                           |      |      |      |      |      |      |      |       |      |     |      |  
|------------------------------------------------------------------------------- | --------------------------------------- | --------------------------------------------------------------------------------- | ----------------------------------------- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ----- | ---- | --- | ---- | -
|                                                                                |                                         |                                                                                   |                                           |      | 2002 |      | 2001 |      | 2000
|                                                                                |                                         |                                                                                   |                                           |      |      |      |      |      |     
|Cash flows from operating activities:                                           |                                         |                                                                                   |                                           |      |      |      |      |      |      |      |       |     
|                                                                                | Net income                              |                                                                                   | $                                         | 208  |      |      | $    | 178  |      |      | $     | 173  |    
|                                                                                |                                         | Adjustments to reconcile net income to net
cash provided by operating activities: |                                           |      |      |      |      |      |      |      |       |      |     |     
|                                                                                |                                         | Depreciation and amortization                                                     |                                           |      | 275  |      |      |      | 222  |      |       |      | 207 |     
|                                                                                |                                         | Changes in certain assets and liabilities:                                        |                                           |      |      |      |      |      |      |      |       |      |     |     
|                                                                                |                                         |                                                                                   | Deferred costs                            |      |      | (24  | )    |      |      | (39  | )     |      |     | (5   | )
|                                                                                |                                         |                                                                                   | Prepaid expenses and other assets         |      |      | (19  | )    |      |      | 4    |       |      |     | (3   | )
|                                                                                |                                         |                                                                                   | Accounts payable and other liabilities    |      |      | 10   |      |      |      | 18   |       |      |     | (5   | )
|                                                                                |                                         |                                                                                   |                                           |      |      |      |      |      |      |      |       |     
|                                                                                |                                         |                                                                                   | Net cash provided by operating activities |      |      | 450  |      |      |      | 383  |       |      |     | 367  |  
|                                                                                |                                         |                                                                                   |                                           |      |      |      |      |      |      |      |       |     
|Cash flows used for investing activities -
additions to real estate investments |                                         |                                                                                   | (141                                      | )    |      |      | (219 | )    |      |      | (137  | )   
|                                                                                |                                         |                                                                                   |                                           |      |      |      |      |      |      |      |       |     
|Cash flows from financing activities:                                           |                                         |                                                                                   |                                           |      |      |      |      |      |      |      |       |     
|                                                                                | Distributions to Limited Partners       |                                                                                   |                                           | (271 | )    |      |      | (277 | )    |      |       | (291 | )  
|                                                                                | Retirement of limited partnership units |                                                                                   |                                           | (74  | )    |      |      | (70  | )    |      |       | (216 | )  
|                                                                                |                                         |                                                                                   |                                           |      |      |      |      |      |      |      |       |     
|                                                                                |                                         |                                                                                   | Net cash used for financing activities    |      |      | (345 | )    |      |      | (347 | )     |      |     | (507 | )
|                                                                                |                                         |                                                                                   |                                           |      |      |      |      |      |      |      |       |     
|Net decrease in cash and cash equivalents                                       |                                         |                                                                                   | (36                                       | )    |      |      | (183 | )    |      |      | (277  | )   
|Cash and cash equivalents at beginning of year                                  |                                         |                                                                                   | 748                                       |      |      |      | 931  |      |      |      | 1,208 |     
|                                                                                |                                         |                                                                                   |                                           |      |      |      |      |      |      |      |       |     
|Cash and cash equivalents at end of year                                        |                                         | $                                                                                 | 712                                       |      |      | $    | 748  |      |      | $    | 931   |     
|                                                                                |                                         |                                                                                   |                                           |      |      |      |      |      |      |      |       |      |    

The accompanying notes are an integral part of these financial statements.

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RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

Notes to Financial Statements
December 31, 2002 and 2001

Note 1. ORGANIZATION

Rancon Income Fund I, a California Limited Partnership, (the Partnership) was
organized in accordance with the provisions of the California Revised Limited
Partnership Act for the purpose of acquiring, operating and disposing of
existing income producing commercial, industrial and residential real estate
properties. The Partnership reached final funding in April 1989. The
Partnership was formed with initial capital contributions from Rancon Income
Partners I, L.P. (the General Partner) and Daniel Lee Stephenson, the initial
limited partner, who indirectly owns and controls the General Partner. The
General Partner and its affiliates are hereinafter referred to as the Sponsor.
At December 31, 2002 and 2001, 13,279 and 13,560 units were issued and
outstanding, respectively.

Allocation of Net Income and Net Loss - Allocations of the profits and losses
from operations are made pursuant to the terms of the Partnership Agreement.

Generally, net income from operations is allocated to the General Partner and
the limited partners in proportion to the amounts of cash from operations
distributed to the partners for each fiscal year. In no event shall the General
Partner be allocated less than 1% of the net income from any period. If there
are no distributions of cash from operations during such fiscal year, net
income shall be allocated 90% to the limited partners and 10% to the General
Partner. Net losses from operations are allocated 90% to the limited partners
and 10% to the General Partner until such time as a partners account is
reduced to zero. Additional losses will be allocated entirely to those partners
with positive account balances until such balances are reduced to zero. In no
event will the General Partner be allocated less than 1% of net loss for any
period.

Net income other than net income from operations shall be allocated as follows:
(i) first, 1% to the General Partner; (ii) second, to the partners who have a
deficit balance in their capital account in proportion to and to the extent of
such deficit balances, provided, that in no event shall the General Partner be
allocated more than 10% of the net income other than net income from operations
until the earlier of sale or disposition of substantially all of the assets or
the distribution of cash (other than cash from operations) equal to the
original invested capital of the General Partner and the limited partner; (iii)
the balance, if any, shall be allocated (a) first, to the General Partner in an
amount equal to the lesser of (1) the amount of cash from sale or financing
anticipated to be distributed to the General Partner or (2) an amount
sufficient to increase the General Partners account balance to an amount equal
to such distribution from sale or financing; (b) the balance, to the limited
partners. In no event shall the General Partner be allocated less than 1% of
the net income other than net income from operations for any period.

Distributions - Distributions of cash from operations are generally allocated
as follows: (i) first, to the limited partners until they receive a
non-cumulative 6% return per annum on their unreturned capital contributions
and (ii) the remainder, if any in a given year, shall be divided in the ratio
of 90% to the limited partners and 10% to the General Partner.

Distributions of cash from sales or financing are generally allocated as
follows: (i) first, 2% to the General Partner and 98% to the limited partners
until the limited partners have received an amount equal to their capital
contributions; (ii) second, 2% to the General Partner and 98% to the limited
partners until the limited partners have received a cumulative non-compounded
return of 6% per annum on their unreturned capital contributions (less prior
distributions of cash from operations); (iii) third, to the General Partner for
the amount of subordinated real estate commissions payable per the Partnership
Agreement; (iv) fourth, 2% to the General Partner and 98% to the limited
partners until the limited partners have received an additional 4% return on
their unreturned capital contributions (less prior distributions of cash from
operations); (v) fifth, 2% to the General Partner and 98% to the limited
partners until the limited partners who purchased their partnership units
(Units) prior to June 1, 1988, receive an additional return (depending on the
date on which they purchased the Units) on their unreturned capital of either
8%, 5% or 2% (calculated through the first anniversary date of the purchase of
the Units); (vi) sixth, 98% to the General Partner and 2% to the limited
partners until the General Partner has received an amount equal to 15% of all
prior distributions made to the limited partners and the General Partners
pursuant to subparagraphs (iv) and (v), reduced by the aggregate of all prior
distributions to the General Partner under subparagraphs (iv) and (v); and
(vii) seventh, the balance, 85% to the limited partners and 15% to the General
Partner.

The terms of the Partnership agreement call for the General Partner to restore
any deficits that may exist in its capital account after allocation of gains
and losses from the sale of the final property owned by the Partnership, but
prior to any liquidating distributions being made to the partners.

Management Agreement - Effective January 1, 1995, Glenborough Corporation
(GC) entered into an agreement with the Partnership and other related
Partnerships (collectively, the Rancon Partnerships) to perform or contract
on the Partnerships behalf for financial, accounting, data processing,
marketing, legal, investor relations, asset and development management and
consulting services for a period of ten years
or until the liquidation of the Partnership, whichever comes first. Effective
January 1, 1998, the agreement was amended to eliminate GCs responsibility for
providing investor relation services and Preferred Partnership

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RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

Notes to Financial Statements
December 31, 2002 and 2001

Services, Inc., a California corporation unaffiliated with the Partnership,
contracted to assume the investor relations services. In October 2000, GC
merged into Glenborough Realty Trust Incorporated (Glenborough).

Effective July 1, 1999, the agreement was further amended to: (i) reduce the
asset administration fee to $100,000 plus CPI annually ($103,000 as of December
31, 2002) (ii) increase the sales fee for improved properties from 2% to 3% and
(iii) reduce the management fee applicable to Wakefield Industrial Center from
5% to 3% of the gross rental receipts. The Partnership will also pay
Glenborough: (i) a sales fees of 4% for land; (ii) a refinancing fee of 1% and
(iii) a management fee of 5% of gross rental receipts from Bristol Medical
Center. As part of this agreement, Glenborough will perform certain duties for
the General Partner of the Rancon Partnerships. RFC agreed to cooperate with
Glenborough should Glenborough attempt to obtain a majority vote of the limited
partners to substitute itself as the Sponsor for the Rancon Partnerships.
Glenborough is not an affiliate of the Partnership or RFC.

Risks and Uncertainties

The Partnerships ability to achieve positive cash flow from operations,
provide distributions from operations and continue as a going concern may be
impacted by changes in property values, local and regional economic conditions,
or the entry of other competitors into the market. The accompanying financial
statements do not provide for adjustments with regard to these uncertainties.

Note 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting - The accompanying financial statements have been prepared
on the accrual basis of accounting in accordance with accounting principles
generally accepted in the United States.

Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities
at the date of the financial statements, and the reported results of operations
during the reporting period. Actual results could differ from those estimates.

New Accounting Pronouncements

In August 2001, the FASB approved for issuance SFAS 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. SFAS 144 broadens the
presentation of discontinued operations to include more transactions and
eliminates the need to accrue for future operating losses. Additionally, SFAS
144 prohibits the retroactive classification of assets as held for sale and
requires revisions to the depreciable lives of long-lived assets to be
abandoned. In accordance with SFAS 144, effective for financial statements
issued for fiscal years beginning after December 15, 2001, the net income and
gains and losses on sales of real estate for properties sold or classified as
held for sale subsequent to December 31, 2001 are reflected in the consolidated
statements of operations as discontinued operations for all periods
presented.

The Partnership records real estate investments that are considered held for
sale at the lower of carrying amount or fair value less costs to sell and such
properties are no longer depreciated. The Partnership adopted SFAS 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, on January 1,
2002. SFAS 144 supersedes SFAS 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The primary
objectives of SFAS 144 are to develop one accounting model based on the
framework established in SFAS 121 for long-lived assets to be disposed of by
sale and to address significant implementation issues regarding impairment of
long-lived assets held for use. In accordance with SFAS 144, we classify real
estate assets as held for sale in the period in which all of the following
criteria are met:



| | - |  | Management, having the authority to approve the action, commits to a plan to sell the asset;                                                            
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | - |  | The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for
sales of such assets;         
|
| | - |  | An active program to locate a buyer and other actions required to
complete the plan to sell the asset have been initiated;                              
|
| | - |  | The sale of the asset is probable and the transfer of the asset is
expected to qualify for recognition as a completed sale within one year;             
|
| | - |  | The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and                                  
|
| | - |  | Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or
that the plan will be withdrawn.

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RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

Notes to Financial Statements
December 31, 2002 and 2001



| | - |  | Properties sold prior to January 1, 2002 are required to be presented as
a component of continuing operations
| | - |  | -------------------------------------------------------------------------------------------------------------

The Partnerships adoption of SFAS 144 did not have an impact on the
Partnership, but may in future periods.

Rental Properties - Rental properties, including the related land, are stated
at cost unless events or circumstances indicate that cost cannot be recovered,
in which case the carrying value is reduced to the estimated fair value.
Estimated fair value: (i) is based upon the Partnerships plans for the
continued operation of each property; and (ii) is computed using estimated
sales price, as determined by prevailing market values for comparable
properties and/or the use of capitalization rates multiplied by annualized
rental income based upon the age, construction and use of the building. The
fulfillment of the Partnerships plans related to each of its properties is
dependent upon, among other things, the presence of economic conditions which
will enable the Partnership to continue to hold and operate the properties
prior to their eventual sale. Due to uncertainties inherent in the valuation
process and in the economy, it is reasonably possible that the actual results
of operating and disposing of the Partnerships properties could be materially
different than current expectations.

Depreciation is provided using the straight-line method over useful lives
ranging from five to forty years for the respective assets.

Cash and Cash Equivalents - The Partnership considers certificates of deposit
and money market funds with original maturities of less than ninety days when
purchased to be cash equivalents.

Fair Value of Financial Instruments - For certain financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable and
accrued expenses and security deposits, recorded amounts approximate fair value
due to the relatively short maturity period.

Deferred Costs - Deferred lease commissions are amortized over the initial
fixed term of the related lease agreements on a straight-line basis.

Revenue

The Partnership recognizes rental revenue on a straight-line basis at amounts
that it believes it will collect on a tenant by tenant basis. The estimation
process may result in higher or lower levels from period to period as the
Partnerships collection experience and the credit quality of the Partnerships
tenants changes. Actual amounts collected could be lower or higher than the
amounts recognized on a straight-line basis if specific tenants are unable to
pay rent that the Partnership has previously recognized as revenue, or if other
tenants pay rent whom the Partnership previously estimated would not.

The Partnerships portfolio of leases turns over continuously, with the number
and value of expiring leases varying from year to year. The Partnerships
ability to re-lease the space to existing or new tenants at rates equal to or
greater than those realized historically is impacted by, among other things,
the economic conditions of the market in which a property is located, the
availability of competing space, and the level of improvements which may be
required at the property. No assurance can be given that the rental rates that
the Partnership will obtain in the future will be equal to or greater than
those obtained under existing contractual commitments.

Reimbursements from tenants for real estate taxes and other recoverable
operating expenses are recognized as revenue in the period the applicable
expenses are incurred. Differences between estimated and actual amounts are
recognized in the subsequent year.

Sales of Real Estate - The Partnership recognizes sales of real estate when
there is a signed contract, a closing has taken place, the buyers initial and
continuing investment is adequate to demonstrate a commitment to pay for the
property and the Partnership does not have a substantial continuing involvement
in the property. Each property is considered a separately identifiable
component of the Partnership and is to be reported in discontinued operations
when the operations and cash flows of the Property have been (or will be)
eliminated as a result of the disposal transaction.

Net Income (Loss) Per Limited
Partnership Unit - Net income (loss) per limited
partnership unit is calculated using the weighted average number of limited
partnership units outstanding during the period and the limited partners
allocable share of the net income (loss).

Income Taxes - No provision for income taxes is included in the accompanying
financial statements as the Partnerships results of operations are passed
through to the partners for inclusion in their respective income tax returns.
Net income (loss) and partners equity for financial reporting purposes will
differ from the Partnership income tax return because of different accounting
methods used for certain items, principally depreciation expense and the
provision for impairment of investments in real estate.

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RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

Notes to Financial Statements
December 31, 2002 and 2001

Concentration Risk - Three tenants represented 65% and 62% of rental income for
the years ended December 31, 2002 and 2001, respectively. Two tenants
represented 46 % of rental income for the year ended December 31, 2000.

Note 3. RENTAL PROPERTY, NET

Rental properties consist of the following at December 31, 2002 and 2001:

|                               |       |   |            |           |      |   |            |           | 
|------------------------------ | ----- | - | ---------- | --------- | ---- | - | ---------- | --------- | 
|                               |       |   | 2002       |           | 2001
|                               |       |   |            |           |     
|Land                           |       | $ | 1,928,000  |           |      | $ | 1,928,000  |          
|Buildings and improvements     |       |   | 3,662,000  |           |      |   | 3,594,000  |          
|Tenant improvements            |       |   | 932,000    |           |      |   | 859,000    |          
|                               |       |   |            |           |      |   |            |          
|                               |       |   | 6,522,000  |           |      |   | 6,381,000  |          
|Less: accumulated depreciation |       |   | (2,450,000 | )         |      |   | (2,204,000 | )        
|                               |       |   |            |           |      |   |            |          
|                               | Total |   | $          | 4,072,000 |      |   | $          | 4,177,000 | 
|                               |       |   |            |           |      |   |            |          

None of the Partnerships properties are encumbered by debt as of December 31,
2002 and 2001.

Note 4. LEASES

The Partnerships rental properties are leased under non-cancelable operating
leases that expire on various dates through 2007 and thereafter. Minimum
future rents under non-cancelable operating leases as of December 31, 2002 are
as follows:

|           |       |   |         |           | 
|---------- | ----- | - | ------- | --------- | 
|2003       |       | $ | 977,000 |          
|2004       |       |   | 664,000 |          
|2005       |       |   | 481,000 |          
|2006       |       |   | 459,000 |          
|2007       |       |   | 438,000 |          
|Thereafter |       |   | 259,000 |          
|           |       |   |         |          
|           | Total |   | $       | 3,278,000 | 
|           |       |   |         |          

In addition to minimum rental payments, certain tenants pay reimbursements for
their pro rata share of specified operating expenses, which amounted to
$74,000, $43,000, and $29,000 for the years ended December 31, 2002, 2001, and
2000, respectively. These amounts are included in the accompanying statements
of operations.

Note 5. COMMITMENTS AND CONTINGENT LIABILITIES

General Uninsured Losses - The Partnership carries comprehensive liability,
fire, flood, extended coverage and rental loss insurance with policy
specifications, limits and deductibles customarily carried for similar
properties. There are, however, certain types of extraordinary losses, which
may be either uninsurable or not economically insurable. Further, all of the
properties are located in areas that are subject to earthquake activity.
Should a property sustain damage as a result of an earthquake, the Partnership
may incur losses due to insurance deductibles, co-payments on insured losses or
uninsured losses. Should an uninsured loss occur, the Partnership could lose
its investment in, and anticipated profits and cash flows from, a property.

Other Matters - The Partnership is contingently liable for a subordinated real
estate commission payable to the General Partner in the amount of $30,000 at
December 31, 2002 for the May 1999 sale of Aztec Village. Upon the sale of a
Partnership property, the Partnership Agreement entitles the General Partner a
subordinated real estate commission, provided that, in no event shall the
subordinated real estate commission payable to the General Partner exceed 3% of
the gross sales price of the property which is sold. The subordinated real
estate commission is payable only after the limited partners have received
distributions equal to their original invested capital plus a cumulative
non-compounded return of 6% per annum on their adjusted invested capital. Since
the circumstances under which this commission would be payable are limited, the
liability has not been recognized in the accompanying financial statements;
however, the amount will be recorded if and when it becomes payable.

Note 6. TAXABLE INCOME

The Partnerships tax returns, the qualification of the Partnership as a
partnership for federal income tax purposes, and the amount of income or loss
are subject to examination by federal and state taxing authorities. If such
examinations result in changes to the Partnerships taxable income or loss, the
tax liability of the partners could change accordingly.

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RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

Notes to Financial Statements
December 31, 2002 and 2001

The following is a reconciliation of the net income for financial reporting
purposes to the estimated taxable income, for the years ended December 31,
2002, 2001 and 2000, determined in accordance with accounting practices used in
preparation of federal income tax returns (in thousands):

|                                                                                                          |  |      |     |      |  |      |     |   |  |   |     | 
|--------------------------------------------------------------------------------------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  | - | --- | 
|                                                                                                          |  | 2002 |     | 2001 |  | 2000
|                                                                                                          |  |      |     |      |  |     
|Net income as reported in the accompanying financial statements                                           |  | $    | 208 |      |  | $    | 178 |   |  | $ | 173 | 
|Financial reporting depreciation in excess
of tax depreciation*                                           |  |      | 96  |      |  |      | 60  |   |  |   | 50  | 
|Operating revenues and expenses reported in a
different period for tax than for financial
reporting, net* |  |      | 16  |      |  |      | (25 | ) |  |   | 16  | 
|                                                                                                          |  |      |     |      |  |      |     |   |  |   |     | 
|Net income for federal income tax purposes*                                                               |  | $    | 320 |      |  | $    | 213 |   |  | $ | 239 | 
|                                                                                                          |  |      |     |      |  |      |     |   |  |   |     | 

The following is a reconciliation as of December 31, 2002 and 2001 of partners
equity for financial reporting purposes to estimated partners equity for
federal income tax purposes (in thousands):

|                                                                                                         |  |      |       |      |  |   |       | 
|-------------------------------------------------------------------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|                                                                                                         |  | 2002 |       | 2001
|                                                                                                         |  |      |       |     
|Partners equity as reported in the accompanying financial statements                                    |  | $    | 4,740 |      |  | $ | 4,877 | 
|Cumulative provision for impairment of
investments in real estate*                                       |  |      | 2,096 |      |  |   | 2,096 | 
|Financial reporting depreciation in excess
of tax reporting depreciation*                                |  |      | 506   |      |  |   | 410   | 
|Operating expenses recognized in a
different period for financial reporting than for
tax reporting, net* |  |      | 72    |      |  |   | 53    | 
|                                                                                                         |  |      |       |      |  |   |       | 
|Partners equity for federal income tax purposes*                                                        |  | $    | 7,414 |      |  | $ | 7,436 | 
|                                                                                                         |  |      |       |      |  |   |       | 



|* |  | Unaudited
|- |  | ---------

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RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

Notes to Financial Statements
December 31, 2002 and 2001

Note 7.UNAUDITED QUARTERLY RESULTS OF OPERATIONS

The following represents an unaudited summary of quarterly results of
operations for the years ended December 31, 2002 and 2001 (in thousands, per
unit amounts and units outstanding):

|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |    |     | 
|----------------------------------------------------------------------------------- | ------------------------------ | ------------------------------------------------ | -------------- | ---- | ------------------------- | --- | -------- | --- | -------- | --- | ------- | ---- | ----- | --- | ------ | --- | -- | --- | 
|                                                                                    |                                |                                                  |                |      | Quarter Ended (unaudited)
|                                                                                    |                                |                                                  |                |      |                          
|                                                                                    |                                |                                                  |                |      | March 31,                 |     | June 30, |     | Sept 30, |     | Dec 31,
|                                                                                    |                                |                                                  |                |      | 2002                      |     | 2002     |     | 2002     |     | 2002   
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |        
|Revenues                                                                            |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |    
|                                                                                    | Rental income                  |                                                  | $              | 278  |                           |     | $        | 302 |          |     | $       | 268  |       |     | $      | 288 |   
|                                                                                    | Interest and other income      |                                                  |                | 3    |                           |     |          | 2   |          |     |         | 3    |       |     |        | 3   |   
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|                                                                                    |                                |                                                  | Total revenues |      |                           | 281 |          |     |          | 304 |         |      |       | 271 |        |     |    | 291 | 
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|Expenses                                                                            |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |    
|                                                                                    | Operating                      |                                                  |                | 110  |                           |     |          | 99  |          |     |         | 137  |       |     |        | 125 |   
|                                                                                    | Depreciation and amortization  |                                                  |                | 63   |                           |     |          | 69  |          |     |         | 71   |       |     |        | 72  |   
|                                                                                    | General and administrative     |                                                  |                | 47   |                           |     |          | 46  |          |     |         | 47   |       |     |        | 52  |   
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|                                                                                    |                                |                                                  | Total expenses |      |                           | 220 |          |     |          | 214 |         |      |       | 255 |        |     |    | 249 | 
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|Net income                                                                          |                                | $                                                | 61             |      |                           | $   | 90       |     |          | $   | 16      |      |       | $   | 41     |    
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|Basis and diluted net income per limited
partnership unit                           |                                | $                                                | 4.43           |      |                           | $   | 6.61     |     |          | $   | 1.21    |      |       | $   | 3.09   |    
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|Distributions per limited partnership unit:                                         |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |    
|                                                                                    | From net income                |                                                  | $              | 4.43 |                           |     | $        |   |          |     | $       | 2.24 |       |     | $      |   |   
|                                                                                    | Representing return of capital |                                                  |                | 5.57 |                           |     |          |   |          |     |         | 7.86 |       |     |        |   |   
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|                                                                                    |                                | Total distributions per limited
partnership unit |                | $    | 10.00                     |     |          | $   |        |     |         | $    | 10.10 |     |        | $   |  |    
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|Weighted average number of limited partnership
units outstanding during each period |                                |                                                  | 13,546         |      |                           |     | 13,435   |     |          |     | 13,412  |      |       |     | 13,323 |    
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   

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RANCON INCOME FUND I,
A CALIFORNIA LIMITED PARTNERSHIP

Notes to Financial Statements
December 31, 2002 and 2001

|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |    |     | 
|----------------------------------------------------------------------------------- | ------------------------------ | ------------------------------------------------ | -------------- | ---- | ------------------------- | --- | -------- | --- | -------- | --- | ------- | ---- | ----- | --- | ------ | --- | -- | --- | 
|                                                                                    |                                |                                                  |                |      | Quarter Ended (unaudited)
|                                                                                    |                                |                                                  |                |      |                          
|                                                                                    |                                |                                                  |                |      | March 31,                 |     | June 30, |     | Sept 30, |     | Dec 31,
|                                                                                    |                                |                                                  |                |      | 2001                      |     | 2001     |     | 2001     |     | 2001   
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |        
|Revenues                                                                            |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |    
|                                                                                    | Rental income                  |                                                  | $              | 239  |                           |     | $        | 240 |          |     | $       | 243  |       |     | $      | 246 |   
|                                                                                    | Interest and other income      |                                                  |                | 8    |                           |     |          | 7   |          |     |         | 6    |       |     |        | 5   |   
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|                                                                                    |                                |                                                  | Total revenues |      |                           | 247 |          |     |          | 247 |         |      |       | 249 |        |     |    | 251 | 
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|Expenses                                                                            |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |    
|                                                                                    | Operating                      |                                                  |                | 83   |                           |     |          | 90  |          |     |         | 118  |       |     |        | 95  |   
|                                                                                    | Depreciation and amortization  |                                                  |                | 55   |                           |     |          | 53  |          |     |         | 53   |       |     |        | 61  |   
|                                                                                    | General and administrative     |                                                  |                | 49   |                           |     |          | 56  |          |     |         | 50   |       |     |        | 53  |   
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|                                                                                    |                                |                                                  | Total expenses |      |                           | 187 |          |     |          | 199 |         |      |       | 221 |        |     |    | 209 | 
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|Net income                                                                          |                                | $                                                | 60             |      |                           | $   | 48       |     |          | $   | 28      |      |       | $   | 42     |    
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|Basis and diluted net income per limited
partnership unit                           |                                | $                                                | 4.27           |      |                           | $   | 3.47     |     |          | $   | 2.05    |      |       | $   | 3.03   |    
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|Distributions per limited partnership unit:                                         |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |    
|                                                                                    | From net income                |                                                  | $              | 4.27 |                           |     | $        |   |          |     | $       | 2.05 |       |     | $      |   |   
|                                                                                    | Representing return of capital |                                                  |                | 5.73 |                           |     |          |   |          |     |         | 7.95 |       |     |        |   |   
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|                                                                                    |                                | Total distributions per limited
partnership unit |                | $    | 10.00                     |     |          | $   |        |     |         | $    | 10.00 |     |        | $   |  |    
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   
|Weighted average number of limited partnership
units outstanding during each period |                                |                                                  | 13,833         |      |                           |     | 13,833   |     |          |     | 13,684  |      |       |     | 13,577 |    
|                                                                                    |                                |                                                  |                |      |                           |     |          |     |          |     |         |      |       |     |        |     |   

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RANCON INCOME FUND I,
A California Limited Partnership

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2002
(In Thousands)




|                   |                                                |              |   |          |   |              |   |                 |       |               |   |           |       |  |   |                  |      |          |   |   |   | 
|------------------ | ---------------------------------------------- | ------------ | - | -------- | - | ------------ | - | --------------- | ----- | ------------- | - | --------- | ----- |  | - | ---------------- | ---- | -------- | - | - | - | 
|COLUMN A           |                                                | COLUMN B     |   | COLUMN C |   | COLUMN D    
|                   |                                                |              |   |          |   |             
|                   |                                                |              |   |          |   |              |   |                 |       |               |   |           |       |  |   | Cost Capitalized
|                   |                                                |              |   |          |   |              |   | Initial Cost to |       | Subsequent to
|                   |                                                |              |   |          |   |              |   | Partnership     |       | Acquisition  
|                   |                                                |              |   |          |   |              |   |                 |       |              
|                   |                                                |              |   |          |   |              |   |                 |       |               |   | Buildings |       |  |   |                  |      |          |   |  
|                   |                                                |              |   |          |   |              |   |                 |       |               |   | and       |       |  |   |                  |      | Carrying
|Description        |                                                | Encumbrances |   | Land     |   | Improvements |   | Improvements    |       | Cost         
|                   |                                                |              |   |          |   |              |   |                 |       |              
|Rental Properties: |                                                |              |   |          |   |              |   |                 |       |               |   |           |       |  |   |                  |      |          |   |  
|                   | Wakefield Facility                             |              | $ |         |   |              | $ | 666             |       |               | $ | 1,118     |       |  | $ | 133              |      |          | $ |  |  
|                   | Less: Provisions for impairment
in real estate |              |   |         |   |              |   |               |       |               |   |         |       |  |   | (175             | )    |          |   |  |  
|                   | Bristol Medical Center                         |              |   |         |   |              |   | 1,937           |       |               |   | 3,327     |       |  |   | 1,437            |      |          |   |  |  
|                   | Less: Provision for impairment
in real estate  |              |   |         |   |              |   |               |       |               |   |         |       |  |   | (1,921           | )    |          |   |  |  
|                   |                                                |              |   |          |   |              |   |                 |       |               |   |           |       |  |   |                  |      |          |   |  
|                   |                                                | Total        |   | $        |  |              |   | $               | 2,603 |               |   | $         | 4,445 |  |   | $                | (526 | )        |   | $ |  | 
|                   |                                                |              |   |          |   |              |   |                 |       |               |   |           |       |  |   |                  |      |          |   |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                   |                                                |          |     |                      |       |          |       |              |       |          |       |             |       |              |     |       |       |             |     |     |  |  |         |         |  |              |              |  |  | 
|------------------ | ---------------------------------------------- | -------- | --- | -------------------- | ----- | -------- | ----- | ------------ | ----- | -------- | ----- | ----------- | ----- | ------------ | --- | ----- | ----- | ----------- | --- | --- |  |  | ------- | ------- |  | ------------ | ------------ |  |  | 
|COLUMN A           |                                                | COLUMN E |     | COLUMN F             |       | COLUMN G |       | COLUMN H     |       | COLUMN I
|                   |                                                |          |     |                      |       |          |       |              |       |         
|                   |                                                |          |     | Gross Amount Carried |       |          |       |              |       |          |       |             |       |              |     |       |       |             |     |    
|                   |                                                |          |     | at December 31, 2002 |       |          |       |              |       |          |       |             |       |              |     |       |       |             |     |    
|                   |                                                |          |     |                      |       |          |       |              |       |          |       |             |       |              |     |       |       |             |     |    
|                   |                                                |          |     |                      |       |          |       | Building     |       |          |       |             |       |              |     |       |       | Date        |     |     |  |  |         | Life   
|                   |                                                |          |     |                      |       |          |       | and          |       | (1)      |       | Accumulated |       | Construction |     | Date  |       | Depreciated
|Description        |                                                | Land     |     | Improvements         |       | Total    |       | Depreciation |       | Began    |       | Acquired    |       | Over        
|                   |                                                |          |     |                      |       |          |       |              |       |          |       |             |       |             
|Rental Properties: |                                                |          |     |                      |       |          |       |              |       |          |       |             |       |              |     |       |       |             |     |     |  |  |         |         |  |              |              | 
|Wakefield Facility |                                                | $        | 666 |                      |       | $        | 1,251 |              |       | $        | 1,917 |             |       | $            | 479 |       |       |             | N/A |     |  |  | 4/20/87 |         |  | 5 - 40 years
|                   | Less: Provisions for impairment
in real estate |          |     | (61                  | )     |          |       | (114         | )     |          |       | (175        | )     |              |     |      |       |             |     |     |  |  |         |         |  |              |              |  | 
|                   | Bristol Medical Center                         |          |     | 1,937                |       |          |       | 4,764        |       |          |       | 6,701       |       |              |     | 1,971 |       |             |     | N/A |  |  |         | 5/04/88 |  |              | 5 - 40 years
|                   | Less: Provision for impairment
in real estate  |          |     | (614                 | )     |          |       | (1,307       | )     |          |       | (1,921      | )     |              |     |      |       |             |     |     |  |  |         |         |  |              |              |  | 
|                   |                                                |          |     |                      |       |          |       |              |       |          |       |             |       |              |     |       |       |             |     |     |  |  |         |         |  |              |              | 
|                   |                                                | Total    |     | $                    | 1,928 |          |       | $            | 4,594 |          |       | $           | 6,522 |              |     | $     | 2,450 |             |     |     |  |  |         |         |  |              |              |  |  | 
|                   |                                                |          |     |                      |       |          |       |              |       |          |       |             |       |              |     |       |       |             |     |     |  |  |         |         |  |              |              | 



|(1) |  | The aggregate cost of land and buildings for Federal income tax purposes
is $8,647 (unaudited). | (continued)
|--- |  | ----------------------------------------------------------------------------------------------- | -----------

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NOTE TO SCHEDULE III  -  REAL ESTATE AND ACCUMULATED DEPRECIATION

Reconciliation of the gross amount at which real estate was carried for the
years ended December 31, 2002, 2001 and 2000 (in thousands):

|                          |                              |                               |                    |       |      |     |      |       |      |     |   |       |     |     | 
|------------------------- | ---------------------------- | ----------------------------- | ------------------ | ----- | ---- | --- | ---- | ----- | ---- | --- | - | ----- | --- | --- | 
|                          |                              |                               |                    |       | 2002 |     | 2001 |       | 2000
|                          |                              |                               |                    |       |      |     |      |       |     
|INVESTMENT IN REAL ESTATE |                              |                               |                    |       |      |     |      |       |      |     |   |      
|                          | Balance at beginning of year |                               | $                  | 6,381 |      |     | $    | 6,162 |      |     | $ | 6,025 |    
|                          |                              | Additions during year:        |                    |       |      |     |      |       |      |     |   |       |     |    
|                          |                              |                               | Improvements, etc. |       |      | 141 |      |       |      | 219 |   |       |     | 137 | 
|                          |                              |                               |                    |       |      |     |      |       |      |     |   |       |    
|                          | Balance at end of year       |                               | $                  | 6,522 |      |     | $    | 6,381 |      |     | $ | 6,162 |    
|                          |                              |                               |                    |       |      |     |      |       |      |     |   |       |    
|ACCUMULATED DEPRECIATION  |                              |                               |                    |       |      |     |      |       |      |     |   |      
|                          | Balance at beginning of year |                               | $                  | 2,204 |      |     | $    | 1,998 |      |     | $ | 1,805 |    
|                          |                              | Additions charged to expenses |                    |       | 246  |     |      |       | 206  |     |   |       | 193 |    
|                          |                              |                               |                    |       |      |     |      |       |      |     |   |       |    
|                          | Balance at end of year       |                               | $                  | 2,450 |      |     | $    | 2,204 |      |     | $ | 1,998 |    
|                          |                              |                               |                    |       |      |     |      |       |      |     |   |       |    

See accompanying Independent Auditors Report.

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I, DANIEL L. STEPHENSON, certify that:



|1. |  | I have reviewed this annual report on Form 10-K of RANCON INCOME FUND I;                                                                                                                                                                                                                                                
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual
report;                   
|  
|4. |  | I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and I have:                                                                                                                                                



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this annual report is
being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this annual report my conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation as of the Evaluation Date;                                                                                                                          



|5. |  | I have disclosed, based on my most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors (or
persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | I have indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most
recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: March 28, 2003

/s/ DANIEL L.
STEPHENSON
Daniel L. Stephenson
Director, President, Chief Executive Officer
and Chief Financial Officer of
Rancon Financial Corporation,
General Partner of Rancon Income Partners I, L.P.

29