Background

2. Background SSGFC is a governmental lending pool with 16 member governments within the State of Florida SSGFC was created in 1986 when it issued $300 million variable rate bonds to provide secondary loans to members and non-members who meet qualification criteria that took advantage of benefits existing prior to the effective date of the 1986 Tax Reform Act. SSGFC was created to benefit from credit pooling, and particularly to benefit from access to bond insurance that would effectively homogenize credit levels and costs of borrowing. The City of Orlando has one of 5 seats on the board and the Chair of the Board rotates among those five members. Other board members are City of Tallahassee, Palm Beach County, Miami Dade County, and City of Coral Gables. The City of Orlando has two different types of debt through SSGFC, both types of which have been held for a number of years: • Loans under the 1986 program that provides benefits existent before the 1986 Tax Reform Act with blended credit. • Loans under the SSGFC Commercial Paper Program Series H on City of Orlando Credit only. This refunding is associated with loans issued under the 1986 pooled credit loan program Sunshine State Governmental Financing Commission 2

3. Refunding of the SSGFC 1986 Loans Three loans are outstanding under the 1986 Program issued November 18, 1986, May 1, 1988 and September 30, 2002. The total amount of principal outstanding of these loans is $41,271,338. Due to the events of the past several years, it is no longer advantageous for the City of Orlando to participate in a variable rate lending pool with divergent credits • Variable rate bonds tend to market at a higher rate than they did previously because there is no insurance to provide a AAA credit level. • Cost-effective insurance programs to homogenize the debt no longer exist. • Other standby facilities to back the credit and market risk of variable rate debt are extremely expensive for lower rated credits. • Accordingly, it is much more costly for the City to pool with other lower credits than to go it alone because of our high credit rating and our ability to access the market with attractive rates Why is a refunding appropriate? 3

4. Refunding of the SSGFC 1986 Loans The principal of these loans are due in their entirety in 2016, requiring that they be refunded at that time. We are proposing to refund these variable rate notes with fixed rate debt, to take advantage of the historically low interest rates in the 1-18 year term. We are proposing to amortize the principal of these notes over the 18 year term to eliminate the need for a subsequent refunding when interest rates are less favorable. Why is a refunding appropriate? 4

5. Refunding of the SSGFC 1986 Loans Term • Stated final maturity not later than October 1, 2028 Maximum True Interest Cost • 4.25% (Including cost issuance and underwriter’s spread) Maximum Bond Issue Size • $47,000,000 (Including payoff of loans and a debt service reserve of 1 times maximum annual debt service) Minimum Purchase Price • 98% to Par (subject to original issue discount or premium Optional Redemption • 5 year call (pre-payment available no later than 5 years from issuance Debt parameters were discussed and approved at the May 7, 2010 Finance Committee Meeting Parameters of the Refunding 5