West Contra Costa USD2014 General Obligation Refinancing Summary2014-15 Tax Rate Resolution

Presentation to the Board of EducationAugust 13, 2014

I. 2014 Refunding Summary

Refunding Objectives Met

Refinanced existing bonds at lower interest rates.

Lowered debt service to achieve savings for taxpayers and satisfy State refunding law.

Applied savings to help the District meet the tax rate targets for 2002 Measure D and 2005 Measure J in 2014-15, 2015-16 and 2016-17 assuming 4% annual AV growth.

West Contra Costa USD 2014 General Obligation Refunding Bonds | 3

2014 Refunding Results

4Presentation to the West Contra Costa Unified School District Board of Education | page

The bonds refinanced: All $24.6 million of 2002

Series C current interest bonds

All $59.0 million of 2005 Series A current interest bonds

$1.65 million of 2002 Series C capital appreciation bonds

The refunding generated $10.3 million in cashflow savings, equal to $9.6 million present value savings or 11.1% of the refunded principal & accreted value of the bonds.

The refunding used only current interest bonds – no capital appreciation bonds.

Sources

Bond Principal $ 77,460,000

Bond Premium $ 11,021,721

Total $ 88,481,721

Uses

Escrow Deposit $ 87,620,976

Costs of Issuance $ 860,745

Total $ 88,481,721

Statistics

All-in TIC 3.68%

Total Bonds Refunded $ 85,315,782

Savings $ 10,305,384

PV Savings $ 9,602,567

PV Savings % 11.10%

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2.05

2.10

2.15

2.20

2.25

2.30

2.35

2.40

MMD AAA GO Index - 10 Year

Excellent Market Timing The lack of supply in the primary markets for municipal bonds

have driven interest rates lower in recent months. Municipal interest rates have increased since the District priced

its bonds on July 24 due to improving economic news.

West Contra Costa USD 2014 General Obligation Refunding Bonds | 5

Board of Education Meeting

Pricing DateJuly 24

2014 Bond Investors The 2014 transaction received significant interest from a large

group of investors, as summarized below.

West Contra Costa USD 2014 General Obligation Refunding Bonds | 6

Fidelity Funds Vanguard FundsGoldman Sachs

Asset ManagementAlliance Bernstein

$12,400,000 $11,235,000 $8,985,000 $8,175,000

American Century Eaton Vance Northern TrustStandish Mellon

Asset Management

$5,400,000 $4,780,000 $4,585,000 $4,430,000

Wells FargoAsset Mangement

Deutsche Asset Management

Columbia Asset Management

American Family Mutual Insurance Company

$3,240,000 $2,575,000 $2,125,000 $1,775,000

Cincinatti Financial Corporation

Chilton Capital Management

JP Morgan Payden & Rygel

$1,625,000 $1,425,000 $1,295,000 $1,000,000

2014 Pricing Compared to Prior Transactions

The District has priced General Obligation bonds in 2011-13, which can be compared to the pricing of the 2014 bonds.

The table below shows spreads to the AAA GO Index to the pricing of the bonds.

The 2014 Bonds priced favorably with lower spreads compared to the prior transactions in every maturity.

West Contra Costa USD 2014 General Obligation Refunding Bonds | 7

Maturity 2011 2012 2013 20141 35 - 12 - 2 60 - 10 - 3 - - 25 12 4 - - 35 14 5 - - - 14 6 - - - 23 7 - - - 29 8 - - 48 36 9 129 106 58 41

10 131 114 68 50 11 132 113 79 55 12 137 120 83 60 13 134 120 88 61 14 143 120 93 66 15 142 120 98 67 16 142 - 90 67 17 - - 90 67 18 - - 90 70 19 - - 90 67 20 - 115 90 67 21 119 - - 68

Spread to MMD AAA GO Index by Financing(in basis points)

Note: Spread is to stated yield. Differences in coupons affect yield comparisons.

2014 Bond Pricing Improvements The large investor demand allowed the pricing of the bonds to be

improved in a series of adjustments from the pre-pricing scale. The largest adjustments benefitted the District by 9 basis points.

West Contra Costa USD 2014 General Obligation Refunding Bonds | 8

Pre-pricing 7/23/2014 Order Period 7/24/2014 Final 7/24/2014Maturity Yield Spread Change Yield Spread Change Yield Spread Tot. Change

8/1/2017 0.70% 0.15% 0.00% 0.70% 0.15% -0.03% 0.67% 0.12% -0.03%8/1/2018 1.06% 0.18% 0.00% 1.06% 0.18% -0.04% 1.02% 0.14% -0.04%8/1/2019 1.42% 0.20% 0.00% 1.42% 0.20% -0.06% 1.36% 0.14% -0.06%8/1/2020 1.73% 0.27% 0.00% 1.73% 0.27% -0.04% 1.69% 0.23% -0.04%8/1/2021 2.03% 0.33% 0.00% 2.03% 0.33% -0.04% 1.99% 0.29% -0.04%8/1/2022 2.29% 0.38% 0.00% 2.29% 0.38% -0.02% 2.27% 0.36% -0.02%8/1/2023 2.52% 0.45% 0.00% 2.52% 0.45% -0.04% 2.48% 0.41% -0.04%8/1/2024 2.69% 0.50% 0.00% 2.69% 0.50% 0.00% 2.69% 0.50% 0.00%8/1/2025 2.90% 0.60% -0.05% 2.85% 0.55% 0.00% 2.85% 0.55% -0.05%8/1/2026 3.05% 0.65% -0.05% 3.00% 0.60% 0.00% 3.00% 0.60% -0.05%8/1/2027 3.20% 0.70% -0.05% 3.15% 0.65% -0.04% 3.11% 0.61% -0.09%8/1/2028 3.33% 0.75% -0.05% 3.28% 0.70% -0.04% 3.24% 0.66% -0.09%8/1/2029 3.41% 0.75% -0.05% 3.36% 0.70% -0.03% 3.33% 0.67% -0.08%8/1/2030 3.48% 0.75% -0.05% 3.43% 0.70% -0.03% 3.40% 0.67% -0.08%8/1/2031 3.55% 0.75% -0.05% 3.50% 0.70% -0.03% 3.47% 0.67% -0.08%8/1/2032 3.62% 0.75% -0.05% 3.57% 0.70% 0.00% 3.57% 0.70% -0.05%8/1/2033 3.66% 0.73% -0.03% 3.63% 0.70% -0.03% 3.60% 0.67% -0.06%8/1/2034 3.68% 0.70% 0.00% 3.68% 0.70% -0.03% 3.65% 0.67% -0.03%8/1/2035 3.73% 0.70% 0.00% 3.73% 0.70% -0.02% 3.71% 0.68% -0.02%

Comparable Transactions Pricing The pricing of the bonds priced better than the Sweetwater

Union HSD, which carried an A1/A+ underlying rating with BAM bond insurance.

West Contra Costa USD 2014 General Obligation Refunding Bonds | 9

Pricing Date: 7/24/14 7/16/14 7/15/14

Par (000s): $77,620 $82,270 $100,325

Issuer: West Contra Costa USD Sweetwater Union High School District Poway Unified School District

Insurance: -- BAM --

Ratings: Aa3/A+/A+ A1/A+ Aa2/AA-

Call Aug 1, 2024 @ par Aug 1, 2024 @ par Aug 1, 2024 @ par

Sale Type: Negotiated (Piper Jaffray) Negotiated (Mitsubishi UFJ) Negotiated (Stifel)

Principal Date: 1-Aug 1-Aug 1-Aug

                                   

          Spread to     Spread to

Mat Par Coupon Yield Spread Par Coupon Yield Spread WCCUSD Par Coupon Yield Spread WCCUSD

                 

2015   1,120 3.00 0.25 0.14 740 3.00 0.16 0.05

2016   1,260 3.00 0.48 0.17 240 3.00 0.36 0.05

2017 2,000 4.00 0.67 0.12 1,400 3.00 0.81 0.21 (0.09) 2,780 4.00 0.58 (0.03) 0.15

2018 3,110 5.00 1.02 0.14 1,550 4.00 1.16 0.23 (0.09) 3,105 5.00 0.91 (0.03) 0.17

2019   3,270 5.00 1.37 0.15   1,730 4.00 1.53 0.25 (0.10)   3,460 5.00 1.27 (0.02) 0.17

2020 3,435 4.00 1.69 0.23 1,910 4.00 1.84 0.30 (0.07) 3,850 5.00 1.54 (0.02) 0.25

2021 2,280 4.00 1.99 0.29 2,115 5.00 2.14 0.34 (0.05) 4,265 5.00 1.87 0.05 0.24

2022 2,360 5.00 2.27 0.36 2,340 5.00 2.39 0.38 (0.02) 4,705 5.00 2.15 0.12 0.24

2023 2,465 5.00 2.48 0.41 2,585 5.00 2.61 0.42 (0.01) 5,170 5.00 2.35 0.14 0.27

2024   2,575 5.00 2.69 0.50   2,840 5.00 2.81 0.50 0.00   5,665 5.00 2.53 0.19 0.31

2025 2,690 5.00 2.85 0.55 3,110 5.00 3.01 0.59 (0.04) 6,195 5.00 2.74 0.29 0.26

2026 4,485 5.00 3.00 0.60 12,080 5.00 3.20 0.67 (0.07) 6,755 5.00 2.89 0.34 0.26

2027 4,705 5.00 3.12 0.62 15,050 5.00 3.32 0.70 (0.08) 7,355 5.00 2.98 0.34 0.28

2028 4,935 5.00 3.24 0.66 16,375 5.00 3.41 0.71 (0.05) 14,290 4.00 3.31 0.59 0.07

2029   5,170 5.00 3.33 0.67   16,805 5.00 3.49 0.71 (0.04)   15,320 4.00 3.39 0.59 0.08

2030 5,425 5.00 3.40 0.67       16,430 4.00 3.46 0.59 0.08

2031 5,690 5.00 3.47 0.67          

2032 5,975 5.00 3.57 0.70          

2033 6,270 5.00 3.60 0.67          

2034   6,570 5.00 3.65 0.67                      

2035   4,210 5.00 3.71 0.68                    

Costs of Issuance Summary

10Presentation to the West Contra Costa Unified School District Board of Education | page

Total costs of issuance and underwriter’s discount was $857,665 for the transaction.

Professional Service Fee

Underwriter's Discount $ 406,665

Bond Counsel $ 140,000

Disclosure Counsel $ 85,000

Financial Advisor $ 100,000

Paying & Escrow Agent $ 3,000

Verification Agent $ 2,000

Printing $ 3,000

S&P Rating $ 35,000

Fitch Ratings $ 38,000

Moody's Rating $ 35,000

Miscellaneous $ 10,000

Total $ 857,665

Note: Does not include $3,080 of rounding.

2014 Refunding Impact on Tax Rate Management

West Contra Costa USD 2014 General Obligation Refunding Bonds | 11

After the refunding, both 2002 Measure D and 2005 Measure J are projected to meet tax rate targets through 2017 under a 4% assessed value growth scenario.

Tax rate targets for fiscal year 2018 and beyond will need to be addressed in the future, depending on growth rates in assessed value.

2015 2016 2017 2018 $-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

Total Net Debt Service for 2002 Measure D

Rev. and Funds on Hand w/ 4% AV Growth

2015 2016 2017 2018 $-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

Total Net Debt Service for 2005 Measure J

Rev. and Funds on Hand w/ 4% AV Growth

II. 2014-15 Tax Rate Resolution

2002 Measure D & 2005 Measure J

13Presentation to the West Contra Costa Unified School District Board of Education | page

The 2014 Bonds refinanced a portion of the outstanding 2002 Measure D and 2005 Measure J Bonds for debt service savings.

Both of the Measures are expected to be at the tax rate target of $60.00 per $100,000 through the 2016-17 fiscal year, assuming a 4.0% AV growth rate.

2005 Measure J has remaining new money capacity, but is constrained by the tax rate target.

The resolution provides for the levy of the $60.00 tax rate for these two measures.

2010 Measure D & 2012 Measure E

14Presentation to the West Contra Costa Unified School District Board of Education | page

2010 Measure D and 2012 Measure E have new money capacity available for the District.

The District currently estimates that $85 million in bonds from each of these series will be issued in March 2015.

Funds will need to be available to pay for debt service on the bonds when issued.

The resolution provides for the levy of the $48.00 tax rate for these two measures.

1998 Measure E & 2000 Measure M

15Presentation to the West Contra Costa Unified School District Board of Education | page

1998 Measure E and 2000 Measure M have no remaining bonding capacity

Remaining debt service on the 1998 Measure E bonds results in a tax rate below the target tax rate of $26.40, even with no AV growth.

2000 Measure M debt service is expected to be at the target tax rate of $55.60 per $100,000 of assessed value until 2018, when debt service declines from $15.1 million on an annual basis to $6.1 million.

The resolution provides for the levy of the $55.60 tax rate for the 2002 Measure M program.

The County will calculate the required levy for 1998 Measure E.

2014-15 Tax Rate Resolution Summary

16Presentation to the West Contra Costa Unified School District Board of Education | page

Measure New Money Tax Rate Notes

1998E No n/a To be set by County. Current estimate of $12.07.

2000M No $55.60

2002D No $60.00 Target of 2014 refunding bonds.

2005J No $60.00 Target of 2014 refunding bonds.

2010D Yes $48.00 Assumes new money issuance in 2015.

2012E Yes $48.00 Assumes new money issuance in 2015.

III. Long-Range Tax Management

Long-Range Tax Outlook

18Presentation to the West Contra Costa Unified School District Board of Education | page

The District’s long-term outlook on tax rates is dependent on the assumed growth of its assessed valuation.

In addition, certain measures have Stabilization Funds on hand that would serve to mitigate lower than expected growth rates.

Following charts show revenues at growth rates between 0% and 6% versus debt service expenditures. Debt service above a revenue line means County will have to set tax rates above the District’s target rate at that particular assessed value growth rate. Debt service below a revenue line means the County can maintain (or be under) the District’s target rate at that particular assessed value growth rate.

1998 Measure E (non-Prop. 39)

Presentation to the West Contra Costa Unified School District Board of Education | page

19

1998 Measure E SummaryAuthorization $40.0 million Issued $40.0 million Currently Outstanding $23.6 millionRemaining Authorization $0Target Tax Rate $26.40 per $100K AV

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

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

Total Net Debt Service for 1998 Measure E Rev. w/ 4% AV Growth

2000 Measure M (non-Prop. 39)

Presentation to the West Contra Costa Unified School District Board of Education | page

20

2000 Measure M SummaryAuthorization $150.0 million Issued $150.0 million Currently Outstanding $100.1 millionRemaining Authorization $0Target Tax Rate $55.60 per $100K AV

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

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

$50,000,000

Total Net Debt Service for 2000 Measure M Rev. and Funds on Hand w/ 4% AV Growth

2002 Measure D

Presentation to the West Contra Costa Unified School District Board of Education | page

21

2002 Measure D SummaryAuthorization $300.0 million Issued $300.0 million Currently Outstanding $246.2 millionRemaining Authorization $0Target Tax Rate $60.00 per $100K AV

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

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

Total Net Debt Service for 2002 Measure D Rev. and Funds on Hand w/ 4% AV Growth

2005 Measure J

Presentation to the West Contra Costa Unified School District Board of Education | page

22

2005 Measure J SummaryAuthorization $400.0 million Issued $322.4 millionCurrently Outstanding $318.8 millionRemaining Authorization $77.6 millionTarget Tax Rate $60.00 per $100K AV

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

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

Total Net Debt Service for 2005 Measure J Rev. and Funds on Hand w/ 4% AV Growth

2010 Measure D

Presentation to the West Contra Costa Unified School District Board of Education | page

23

2010 Measure D SummaryAuthorization $380.0 million Issued $100.0 millionCurrently Outstanding $127.8 millionRemaining Authorization $280.0 millionTarget Tax Rate $48.00 per $100K AV

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

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

Total Net Debt Service for 2010 Measure D Rev. w/ 4% AV Growth

2012 Measure E

Presentation to the West Contra Costa Unified School District Board of Education | page

24

2012 Measure E SummaryAuthorization $360.0 million Issued $85.0 millionCurrently Outstanding $85.0 millionRemaining Authorization $275.0 millionTarget Tax Rate $48.00 per $100K AV

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

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

Total Net Debt Service for 2012 Measure E Rev. w/ 4% AV Growth