Refinancingthe District’s Outstanding

Special Tax Bonds

October 2, 2014

Slide 2

With the current interest rate environment, the District can achieve savings from a refinance of these bonds through a direct placement.

The District has 2 outstanding Special Tax Bonds

2005 Bonds• Original par amount of

$4,900,000• Balance of approx.

$4,015,000• Final Maturity August 1,

2035• Current interest rate 4.81%

2007 Bonds• Original par amount of

$1,750,000• Balance of approx.

$1,130,000• Final Maturity August 1,

2037• Current interest rate 5.625%

Slide 3

Refinance Summary

Key Refinance Components

• No prepayment penalty on 2005 bonds• 2% prepayment penalty on 2007 bonds

Could refinance both Series 2005 and 2007 bonds for savings through two direct placement financings

• Not a General Fund obligation

Would remain special tax bonds

No leased asset required

Maintain same term as 2005 bonds, shorten term for 2007 bond

Slide 4

Slide 5

Refi of 2005 CFD Bonds

Refi of 2007 CFD Bonds

Combined Refinance

Sizing

Deposit to Escrow Funds $4,079,265 $1,174,141 $5,253,406

Costs of Issuance and Additional Proceeds $120,645 $70,565 $191,211

Debt Service Reserve Fund $120,270 $35,670 $155,940

Less: Prior Debt Service Reserve Funds ($311,180) ($91,376) ($402,556)

Par Amount of Bonds $4,009,000 $1,189,000 $5,198,000

Special Tax Direct Placement Sizing

Description CFD #1 CFD #2 TotalQuint & Thimmig LLP (Bond Counsel) $35,000 $25,000 $60,000

Capitol Public Finance Group (Financial Advisor) $50,000 $25,000 $75,000

Southwest Securities (Placement Agent) $25,000 $12,500 $37,500

Other Expenses

Lozano Smith - General Counsel $3,000 $2,000 $5,000

Fiscal Agent

Acceptance Fee $1,500 $1,500 $3,000

First Annual Fiscal Agent Fee $1,500 $1,500 $3,000

Escrow Agent $1,000 $1,000 $2,000

CDIAC $650 $200 $850

Contingency and Additional Proceeds $2,995 $1,865 $4,861

Total Costs of Issuance $120,645 $70,565 $191,211

Costs of Issuance

Slide 6

Why Refinance?

• Special tax revenue in excess of current Special Tax Bond debt service is used to pay the outstanding COPs– Developer fee revenue is applied to the extent

available, with the remaining amount paid from the General Fund

Slide 7

A refinance of the Special Tax bonds would directly reduce the annual General Fund obligation on the COP debt repayment by approximately $40,000 per year

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

$1,000,000

Fiscal Year Ending

After Funding Debt Service on Outstanding CFD Bonds, Excess Special Tax Revenue Can be Applied to COP Debt Repayment. The Annual Shortfall for COP

Payments Can be Funded from Developer Fee Collections or Other Available Revenues

Fund Balance Used for Debt Service

Excess Special Tax Revenue

Combined COP Debt Service

Future Shortfall Excludes Tax Revenue from

Future Development

Shortfall of Approximately

$320,000 per YearAfter the Refinance

(was Previously $360,000 Per Year)

Current Capital Cash Balance of Approximately

$713,000 Can Be Used to Make

Debt Payments

Slide 8

Refinance Terms

3:1 Value to Lien Ratio• Currently 5:1

Special tax collections of at least 110% of the total annual debt service

Optional Redemption:  On any date on or after August 1, 2019 at 101%

Annual disclosure including: audit, special tax levies and delinquencies, and amount deposited in reserve fund

Slide 9

Slide 10

Documents for Consideration

2 Resolutions for Board Consideration:Approve Documents Related to the

Restructuring of Each CFD Bond

• CFD #1 financing not to exceed $4.2 million• CFD #2 financing not to exceed $1.275 million• Interest rate lock at 3.75%

Bond Purchase and Rate Lock Agreements with City National Bank

Fiscal Agent Agreements with US Bank

Escrow Agreements with Wells Fargo Bank

Slide 11

Next Steps

Oct. 3

Dec. 2

Dec. 3

Slide 12

Execute Bond Purchase and Rate Lock Agreements

Deposit funds in escrow

Complete refinance of 2005 and 2007 CFD Bonds

Questions?