West Contra Costa USD

1. General Obligation Bond, Election of 2010, Series A West Contra Costa USD Presentation to the Board of Education November 16, 2011

2. Sale of Series A Bonds • Last week, the District sold $100 million of Series A Bonds to investors through the underwriting team of Piper Jaffray and De La Rosa & Co. • Bond purchase agreement (BPA) signed last Tuesday. • Transaction included traditional tax-exempt bonds and qualified school construction bonds (QSCBs). • All-in cost of 4.30% (with average life of 20.4 years). • Bond proceeds will be wired to the District on Tuesday, November 22nd. Presentation to the West Contra Costa Unified School District Board of Education | page

3. Re-Envisioned Bond Program • The sale represents the first sale of bonds under a long-term bond program that has been significantly re-envisioned over the past three years. • Unprecedented tax base declines and emerging program constraints. • Interim fixes (down-sizing of bond issues, restructurings, subsidized programs). • 2010 Measure D bond election. • Bonding capacity waiver. Presentation to the West Contra Costa Unified School District Board of Education | page

4. New Strategies • The District implemented a number of new (and relatively new) strategies in conducting this sale of bonds. • Negotiated Sale. • Single co-manager. • Management fee component of underwriter spread. • Investor outreach. Presentation to the West Contra Costa Unified School District Board of Education | page

5. Primary Objectives • These new strategies and other efforts of the financing team were intended to accomplish a number of key objectives. • Achieve the lowest possible interest rates for District taxpayers (both on an absolute and spread to MMD basis). • Continue to expand the District’s investor base. • Increase the number of bonds sold without insurance. Presentation to the West Contra Costa Unified School District Board of Education | page

6. Summary of Results • Overall, the financing team can report that the sale met all key objectives. • Absolute yields were very low. • Yields on a spread-to-MMD basis were relatively close to past West Contra Costa USD and recent comparable transactions. • More than $44 million (or 44.2%) of the current transaction were sold without insurance. Presentation to the West Contra Costa Unified School District Board of Education | page

7. Market Conditions • Although interest rates were generally higher than their mid-September lows, the bonds sold into generally improving market conditions. Presentation to the West Contra Costa Unified School District Board of Education | page

8. Municipal Rates versus Mid-August • On the day of the sale, MMD rates were relatively close to where they were when the District issued its Refunding Bonds on August 10th. Presentation to the West Contra Costa Unified School District Board of Education | page

9. Refunding Opportunity • Because of the widening credit spreads, however, the District was not able to refund any additional bonds authorized for refunding this past summer. • Certain bonds were previously authorized for refunding but not refunded in August. • Financing team was prepared to move ahead if objectives were met. • Rates were not low enough at time of sale. • Bonds may be refundable in the future. Presentation to the West Contra Costa Unified School District Board of Education | page

10. Rating Movement • One positive factor going into the sale was that Moody’s Investors Service eliminated the negative outlook on the District’s general obligation bonds. Presentation to the West Contra Costa Unified School District Board of Education | page

11. Investor Outreach • The District reached out to a number of key investors in preparation for this sale. Presentation to the West Contra Costa Unified School District Board of Education | page

12. Investor Participation • The bond issue attracted a broad base of institutional investors. Presentation to the West Contra Costa Unified School District Board of Education | page

13. Comparison to Recent District Bond Sales • On an absolute basis, interest rates were lower than for recent District bond sales. Presentation to the West Contra Costa Unified School District Board of Education | page

14. Comparison to Comparable Bond Sales • The District continues to pay higher interest rates than other comparable credits. • The District has a unique history. • Investors perceive not only an increased credit risk, but also a thinner market for District bonds. • Lodi Unified School District and Porterville School District sold bonds recently that we used as comparable sales. • Spreads to comparable school districts have been narrowing in recent years. Presentation to the West Contra Costa Unified School District Board of Education | page

15. Qualified School Construction Bonds • The District also sold $21 million of qualified school construction bonds. • Authorized in connection with LPS-Richmond project. • Applicable deadlines – issuance and expenditure. • Taxable bonds maturing on 8/1/30. • Net rate of 1.34% (6.25% less than 4.91% subsidy rate). • Required ongoing management. Presentation to the West Contra Costa Unified School District Board of Education | page

16. QSCB Investors • The District’s QSCBs attracted a high level of buy-and-hold and other institutional investors. Presentation to the West Contra Costa Unified School District Board of Education | page

17. Costs of Issuance • The District and District taxpayers will incur certain costs in connection with this financing. Presentation to the West Contra Costa Unified School District Board of Education | page

18. Moving Ahead • The financing team will continue to address challenges to the bond program in the year ahead. • Existing bond programs are based on the assumption of long-term tax base growth. • Current 2010 Measure D financing plan assumes that bonds will be issued in alternate years of approximately equal amounts through 2019. • Projects continue to straddle bond issuances. • The District should continue to communicate positive stories about the bond program. Presentation to the West Contra Costa Unified School District Board of Education | page