West Contra Costa USDGeneral Obligation Bond Update

Presentation to the Board of EducationOctober 15, 2014

This Evening’s 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.

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Bond Financing Professionals

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Nixon Peabody, Bond Counselprepares legal documents and issues legal and tax opinions

Nixon Peabody, Disclosure Counseloutlines 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, Underwritersmanage investor outreach and sale of the bonds to investors, and assist with structuring the financing

Proposed Bond Sale Parameters

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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.

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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.

Proposed Amortization

Note: Indicative debt structure, subject to change.

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

Election of 2010 Existing Debt Service Election of 2010 Series C Debt Service

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047

2049

2051

2053

2055

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

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

Election of 2012

Election of 2010

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).

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Year Series2010

Measure D2012

Measure E Total

Previously Issued $140,000,000 $85,000,000 $225,000,000

2014-15 Elec. 2010 Ser. CElec. 2012 Ser. B 50,000,000 85,000,000 135,000,000

2016-17 Elec. 2010 Ser. DElec. 2012 Ser. C 60,000,000 65,000,000 125,000,000

2018-19 Elec. 2010 Ser. EElec. 2012 Ser. D 65,000,000 60,000,000 125,000,000

2020-21 Elec. 2010 Ser. FElec. 2012 Ser. E 44,714,718 56,963,559 101,678,277

2045 Elec. 2010 Ser. GElec. 2012 Ser. F 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.

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

October 15, 2014 Informational item: resolution authorizing sale (1st of 2 required consecutive meetings)

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

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*Subject to change

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

October 15, 2014 Informational item: resolution authorizing sale (1st of 2 required consecutive meetings)

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

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*Subject to change

Rationale for Pricing in 2015

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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.

Rationale for Pricing in 2015 (continued)

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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.