Contra Costa USD General Obligation Bond Update Presentation 2014

West Contra Costa USD General Obligation Bond Update Presentation to the Board of Education October 15, 2014

This Evenings Informational Items Present the Resolution to the Board of Education authorizing the issuance and sale of $135 million in general obligation bonds. Resolution incorporates approval of forms of the following documents: Bond Purchase Contract Continuing Disclosure Certificate Preliminary Official Statement The Board of Education will be presented the same documents for approval in an action item at its next scheduled meeting on November 12, 2014. Presentation to the West Contra Costa Unified School District Board of Education | page 1

Bond Financing Professionals Nixon Peabody, Bond Counsel prepares legal documents and issues legal and tax opinions Nixon Peabody, Disclosure Counsel outlines disclosure obligations, prepares preliminary/final official statements, prepares supplemental disclosure and issues disclosure opinion KNN Public Finance, Financial Advisor manages overall planning and execution of the financing for the District, and provides District information for planning and disclosure work by the financing team Piper Jaffray & Co., Stifel Nicolaus & Co Incorporated, Backstrom McCarley Berry & Co LLC, Underwriters manage investor outreach and sale of the bonds to investors, and assist with structuring the financing Presentation to the West Contra Costa Unified School District Board of Education | page 2

Proposed Bond Sale Parameters Bonds will be issued as $50 million Election of 2010, Series C, and $85 million Election of 2012, Series B. Fixed-rate current interest bonds, with up to 40-year final maturity No capital appreciation bonds Maximum underwriter s discount of $5.25/bond. Presentation to the West Contra Costa Unified School District Board of Education | page 3

Proposed Amortization The 2015 Bonds need to be structured to allow remaining debt service capacity for future bond issuances. A longer final amortization of up to 40 years using only current interest bonds will help near-term debt service constraints and provide maximum future flexibility. Election of 2010 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $- 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 Election of 2010 Existing Debt Service Election of 2010 Series C Debt Service Election of 2012 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $- 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 Election of 2012 Existing Debt Service Election of 2012 Series B Debt Service Revenue assuming 4.0% AV Growth, $48 tax rate, Funds on Hand Note: Indicative debt structure, subject to change. Presentation to the West Contra Costa Unified School District Board of Education | page 4

Issuance Schedule The current issuance schedule assumes a tax rate of $48 per $100,000 of assessed value, up to 40-year maturity structure and 4% AV growth Higher assessed value growth could permit earlier issuance and/or fewer transactions. Shorter maturity term would constrain remaining authorization and/or require tax rates increases up to statutory maximum (i.e. 30-year structure would result in tax rate increase up to $56 per $100,000 of AV, absent favorable AV growth). 2010 2012 Year Series Measure D $140,000,000 Measure E $85,000,000 Total Previously Issued $225,000,000 Elec. 2010 Ser. C Elec. 2012 Ser. B Elec. 2010 Ser. D Elec. 2012 Ser. C Elec. 2010 Ser. E Elec. 2012 Ser. D Elec. 2010 Ser. F Elec. 2012 Ser. E Elec. 2010 Ser. G Elec. 2012 Ser. F 2014-15 50,000,000 85,000,000 135,000,000 2016-17 60,000,000 65,000,000 125,000,000 2018-19 65,000,000 60,000,000 125,000,000 2020-21 44,714,718 56,963,559 101,678,277 2045 20,285,282 8,036,441 28,321,723 $380,000,000 $360,000,000 $740,000,000 Issuance amounts are subject to change based on future AV growth, market conditions, interest rates at the time of sale, and structure assumptions. Bonds issued after 2015 may be required to use AB 182 compliant capital appreciation bonds or the District may need to use Bond Anticipation Notes. Presentation to the West Contra Costa Unified School District Board of Education | page 5

Recommended Financing Schedule* Date Activity September 9, 2014 Subcommittee approval of financing schedule and structure September 17, 2014 Board approval of financing team September 18, 2014 Financing Kickoff Meeting September-October Drafting of legal documents and preliminary official statement Informational item: resolution authorizing sale (1st of 2 required consecutive meetings) October 15, 2014 November 12, 2014 Board approval of resolution, legal documents, and preliminary official statement Week of January 12, 2015 Meetings with rating agencies February 11, 2015 Board approval of updated preliminary official statement February 12, 2015 Post Preliminary Official Statement Week of February 16 Investor outreach & discussion February 26 or March 4 Pricing March 11, 2015 Closing *Subject to change Presentation to the West Contra Costa Unified School District Board of Education | page 6

Alternative/Accelerated Financing Schedule* Date Activity September 9, 2014 Subcommittee approval of financing schedule and structure September 17, 2014 Board approval of financing team September 18, 2014 Financing Kickoff Meeting September-October Drafting of legal documents and preliminary official statement Informational item: resolution authorizing sale (1st of 2 required consecutive meetings) October 15, 2014 Week of November 3, 2014 Meetings with rating agencies November 12, 2014 Board approval of resolution, legal documents, and preliminary official statement November 13, 2014 Post Preliminary Official Statement Week of November 17, 2014 Investor outreach & discussion Week of December 1, 2014 Pricing Week of December 15, 2014 Closing *Subject to change Presentation to the West Contra Costa Unified School District Board of Education | page 7

Rationale for Pricing in 2015 While interest rates are currently low, there appears to be very little upward pressure which would drastically change rates into early 2015. Looking for increased investor interest in the District's bonds. Our recommendation is for additional time to be placed between the SEC Subpoenas and the District coming to market. After the first of the year, investors/portfolio managers re-evaluate planned investment options. Issues that were important to them at the end of the year diminish as they all look for new investment opportunities. The investor pool typically shrinks during December as books close and portfolios lock in their gains/losses for the year. This could draw down the total number of available investors. Presentation to the West Contra Costa Unified School District Board of Education | page 8

Rationale for Pricing in 2015 (continued) Our plan for the District has always been a robust investor outreach, looking towards getting an increased number of investors interested in the District's bonds. Finally, the District has always issued bonds with an eye to the cash in the bank and that is why a target closing date in March had been discussed as the best timing because of the amount of funds on- hand. Presentation to the West Contra Costa Unified School District Board of Education | page 9