1. 1 | emwd.org April 25, 2016 16131 Western Riverside Water and Wastewater Financing Authority Credit Presentation Local Agency Revenue Refunding Bonds, 2016 Series A

2. 2 | emwd.org Table of Contents Financing Overview – Financing Team – District Overview and Credit Characteristics The Community Facilities Districts – Credit Worthiness Information Bond Financing Structure – Proposed Financing Structure and Timeline – Conclusion

3. 3 | emwd.org Section 1 Financing Team & Overview

4. 4 | emwd.org Financing Team Organization Eastern Municipal Water District (Issuer) Stradling, Yocca, Carlson & Rauth (Bond & Disclosure Counsel) Fieldman, Rolapp & Associates (Financial Advisor) Stifel, Nicolaus & Company, Inc. (Underwriter) Albert A. Webb Associates (Special Tax Consultant) Contact Charles Turner, Director of Finance Heidi Schrader, Financial Manager III Willia Thomas, Financial Analyst II Jeanie Canup, Financial Analyst I Brad Neal, Esq. Lawrence Chan, Esq. Robert Porr, Senior Vice President Anna Sarabian, Principal Michael Lin, Associate Jose Vera, Managing Director Tom Jacob, Vice President Kory Griffin, Analyst Shane Spicer, Director of Municipal Finance Heidi Schoeppe, Senior Finance Manager Matt Chesney, Associate Financial Manager

5. 5 | emwd.org Financing Objectives and Overview 2016 Bonds will be issued by the Western Riverside Water and Wastewater Financing Authority (“WRWWFA”) to purchase 14 refunding CFD Special Tax Bonds from the Eastern Municipal Water District. Eastern Municipal Water District (“EMWD”) will refund 14 of its outstanding CFDs that are fully built-out to generate annual savings to homeowners. - 10 CFDs that are part of the 2006 Pooled Refunding Bonds are being refunded - 4 CFDs are being added to 2016 refunding WRWWFA will use a Marks-Roos pooled financing structure. The 2016 Revenue Bonds will be secured by the debt service revenues from the purchased CFD Bonds. The 14 CFDs include 764.8 taxable acres located in the County of Riverside. The CFDs, which are primarily single family residential, include 4,476 parcels that are 100% owned by individual property owners. *Preliminary, subject to change. $45,425,000* 2016 Bonds Series A

6. 6 | emwd.org Credit Characteristics (1) Includes the Local Obligations and all outstanding overlapping land secured debt and general obligation bonded indebtedness. ______________________ Source: Albert A. Webb Associates Bond Year Ending September 1 No. of Taxing Jurisdictions Share of Bonds Dwelling Units Fiscal Year 2015-16 Assessed Value Total Overlapping Debt (1) Assessed Value to Lien Ratio 201614100% 4,476 $1,422,447,380 $97,963,82614.52:1 201714100% 4,476 1,422,447,380 97,963,82614.52:1 201814100% 4,476 1,422,447,380 97,963,82614.52:1 201914100% 4,476 1,422,447,380 97,963,82614.52:1 202014100% 4,476 1,422,447,380 97,963,82614.52:1 202114100% 4,476 1,422,447,380 97,963,82614.52:1 202214100% 4,476 1,422,447,380 97,963,82614.52:1 202314100% 4,476 1,422,447,380 97,963,82614.52:1 202414100% 4,476 1,422,447,380 97,963,82614.52:1 202514100% 4,476 1,422,447,380 97,963,82614.52:1 202614100% 4,476 1,422,447,380 97,963,82614.52:1 202714100% 4,476 1,422,447,380 97,963,82614.52:1 202814100% 4,476 1,422,447,380 97,963,82614.52:1 202914100% 4,476 1,422,447,380 97,963,82614.52:1 203014100% 4,476 1,422,447,380 97,963,82614.52:1 203114100% 4,476 1,422,447,380 97,963,82614.52:1 203214100% 4,476 1,422,447,380 97,963,82614.52:1 20331290% 4,136 1,304,025,844 93,227,96713.99:1 2034754% 2,417 757,502,081 67,052,03911.30:1 2035439% 1,273 405,786,460 44,588,9129.10:1 2036439% 1,273 405,786,460 44,588,9129.10:1 2037439% 1,273 405,786,460 44,588,9129.10:1 2038439% 1,273 405,786,460 44,588,9129.10:1 2039439% 1,273 405,786,460 44,588,9129.10:1 2040439% 1,273 405,786,460 44,588,9129.10:1 2041439% 1,273 405,786,460 44,588,9129.10:1 2042439% 1,273 405,786,460 44,588,9129.10:1 2043217% 430 162,835,216 9,408,62317.31:1 2044217% 430 162,835,216 9,408,62317.31:1 The CFDs have strong Value to Lien Ratios throughout the term of the Bonds.

7. 7 | emwd.org Overview of Eastern Municipal Water District The District was organized under the Municipal Water District Act of 1911 (California Water Code Section 71000, et seq.) on October 16, 1950 for the primary purpose of importing Colorado River water to its service area to augment local water supplies. Governed by five district-elected directors Board has authority to set rates, approve budgets, and make policy Provides the following services: Potable Water Wastewater Recycled Water Population: Approximately 795,000 Service Area: 555 square miles Includes 8 cities and a large unincorporated area of Riverside County Not regulated by Public Utilities Commission EMWD Summary

8. 8 | emwd.org Section 2 The Community Facilities Districts

9. 9 | emwd.org Development Status Source: Albert A. Webb Associates. *Preliminary, subject to change Taxing Jurisdictions Estimated 2016 Local Obligations* % TotalTaxable Acres Taxable Parcels Percent Sold to Individual Homeowners CFD No. 2001-01 Improvement Area B$1,595,0004%30.4155100% CFD No. 2001-02 Improvement Area A4,260,0009%73.1492100% CFD No. 2001-02 Improvement Area B685,0002%24.5143100% CFD No. 2002-032,725,0006%40.4185100% CFD No. 2002-04 Improvement Area 12,335,0005%62.5451100% CFD No. 2002-04 Improvement Area 23,665,0008%94.5683100% CFD No. 2002-04 Improvement Area 51,185,0003%48.4295100% CFD No. 2002-06 Improvement Area A6,205,00014%80.1414100% CFD No. 2002-082,915,0006%50.9219100% CFD No. 2002-102,205,0005%34.7166100% CFD No. 2005-392,425,0005%24.7128100% CFD No. 2005-43 Improvement Area A4,830,00011%26.5139100% CFD No. 2005-47 Improvement Area A7,555,00017%122.6715100% CFD No. 2010-602,840,0006%51.6291100% Totals: $45,425,000100%764.834,476100%

10. 10 | emwd.org Historical Assessed Values AV has increased nearly 46% since FY 2011-12

11. 11 | emwd.org Average Assessed Value-to-Lien Ratios Taxing Jurisdictions Estimated Local Obligations * Direct and Overlapping Debt (1) Total Debt FY 2015-16 Assessed Value Assessed Value ‑ to ‑ Lien Ratio (2) CFD No. 2001-01 IA B $1,595,000 $169,470 $1,764,470 $48,258,907 27.35:1 CFD No. 2001-02 IA A 4,260,000 2,036,746 6,296,746 97,508,28315.49:1 CFD No. 2001-02 IA B 685,000 170,289 855,289 44,939,57052.54:1 CFD No. 2002-03 2,725,000 246,389 2,971,389 70,162,62923.61:1 CFD No. 2002-04 IA 1 2,335,000 4,884,491 7,219,491 138,346,07919.16:1 CFD No. 2002-04 IA 2 3,665,000 7,786,010 11,451,010 209,589,69918.30:1 CFD No. 2002-04 IA 5 1,185,000 7,074,169 8,259,169 89,464,20310.83:1 CFD No. 2002-06 IA A 6,205,000 1,836,415 8,041,415 179,775,34222.36:1 CFD No. 2002-08 2,915,000 847,987 3,762,987 85,954,48922.84:1 CFD No. 2002-10 2,205,000 547,948 2,752,948 52,661,71919.13:1 CFD No. 2005-39 2,425,000 3,248,961 5,673,961 39,493,7356.96:1 CFD No. 2005-43 IA A 4,830,000 753,153 5,583,153 44,543,8767.98:1 CFD No. 2005-47 IA A 7,555,000 21,951,328 29,506,328 203,457,5096.90:1 CFD No. 2010-60 2,840,000 985,470 3,825,470 118,291,34030.92:1 Totals:$45,425,000$52,538,826$97,963,826$1,422,447,38014.52:1 *Preliminary, subject to change Strong average assessed value to lien ratios with a minimum of 6.90 to 1 in CFD No. 2005-47 Improvement Area A and a maximum of 52.54 to 1 in CFD No. 2001-02 Improvement Area B. (1) Overlapping debt excludes authorized but unissued bonds and included only other land secured debt and general obligation debt. (2) Calculated by dividing Assessed Value by Total Debt.

12. 12 | emwd.org Average Effective Tax Rates Source: Albert A. Webb Associates. Taxing JurisdictionsAssessed Value Average Effective Tax Rates CFD No. 2001 ‑ 01 IA B $48,258,907 1.65% CFD No. 2001 ‑ 02 IA A 97,508,283 1.68 CFD No. 2001 ‑ 02 IA B 44,939,570 1.33 CFD No. 2002 ‑ 03 70,162,629 1.57 CFD No. 2002 ‑ 04 IA 1 138,346,079 1.67 CFD No. 2002 ‑ 04 IA 2 209,589,699 1.72 CFD No. 2002 ‑ 04 IA 5 89,464,203 2.08 CFD No. 2002 ‑ 06 IA A 179,775,342 1.69 CFD No. 2002 ‑ 08 85,954,489 1.59 CFD No. 2002 ‑ 10 52,661,719 1.69 CFD No. 2005 ‑ 39 39,493,735 2.32 CFD No. 2005 ‑ 43 IA A 44,543,876 2.28 CFD No. 2005 ‑ 47 IA A 203,457,509 2.26 CFD No. 2010 ‑ 60 118,291,340 1.39 Total $1,422,447,380 Average Effective tax rates are below 2% (levied upon AV) in all but 4 taxing jurisdictions.

13. 13 | emwd.org Special Tax Delinquencies History Source: Albert A. Webb Associates. CFD Actual FY 2013-14 Actual FY 2014-15 Average Delinquencies @2/20/16 (1) CFD No. 2001 ‑ 01 IA B 0.00%1.79%0.00% CFD No. 2001 ‑ 02 IA A 0.54%0.32%0.45% CFD No. 2001 ‑ 02 IA B 0.61%1.40%0.98% CFD No. 2002 ‑ 03 0.00%0.54%0.22% CFD No. 2002 ‑ 04 IA 1 0.51%0.42%0.25% CFD No. 2002 ‑ 04 IA 2 0.42%0.74%0.46% CFD No. 2002 ‑ 04 IA 5 0.45%0.48%0.23% CFD No. 2002 ‑ 06 IA A 0.66%1.55%1.10% CFD No. 2002 ‑ 08 1.50%1.82%0.85% CFD No. 2002 ‑ 10 0.26%0.00%0.06% CFD No. 2005 ‑ 39 0.00% 0.59% CFD No. 2005 ‑ 43 IA A N/A1.52%0.76% CFD No. 2005 ‑ 47 IA A 1.28%1.04%0.55% CFD No. 2010 ‑ 60 N/A1.01%0.83% Average 0.52%0.90%0.52% (1) Includes delinquencies from FY 2011-12 to FY 2015-16

14. 14 | emwd.org Assessed Value to Lien Special Tax Burden (1) Value-to-Lien Ratios based upon estimated Refunding Par amount for each Local Obligation and includes other overlapping land secured bonded indebtedness. (2) Lowest estimated Value-to-Lien is 0.71:1. Includes 15 parcels without FY 2015-16 structure assessed valuation but have all been issued building permits. (3) Highest estimated Value-to-Lien is 103.75:1. (4) Includes only the par amount for the local obligations and other land secured debt. ______________________ Source: Albert A. Webb Associates Approximately 78% of the parcels have value to lien ratios above 10:1 Assessed Value to Lien (1) No. of Parcels Total Assessed Value Estimated 2016 Refunding Bonds Other Overlapping Land Secured Debt Total Direct and Overlapping Land Secured Debt (4) Aggregate Value- to-Lien Less than 10.00:1 (2) 976$273,965,780$13,206,262$21,178,277$34,384,5397.97:1 Between 10.00:1 and 19.99:11,058$285,758,930$7,889,167$11,544,386$19,433,55314.70:1 Between 20.00:1 and 29.99:11,596$522,260,732$15,463,606$5,955,007$21,418,61324.38:1 Between 30.00:1 and 39.99:1554$222,931,850$6,752,329$0$6,752,32933.02:1 Between 40.00:1 and 49.99:1103$41,621,025$926,219$0$926,21944.94:1 Greater than 49.99:1 (3) 189$75,909,063$1,187,418$0$1,187,41863.93:1 Total4,476$1,422,447,380$45,425,000$38,677,670$84,102,67016.91:1

15. 15 | emwd.org Property Ownership Concentration Property OwnerParcels Projected Fiscal Year 2016-17 Special Tax Percent of Projected FY 2016-17 Special Tax Fiscal Year 2015- 16 Assessed Value Estimated 2016 Refunding Bonds Other Overlapping Land Secured Debt Value-to- Lien Ratio (1) CAH 2014 1 Borrower3$5,2670.12%$942,307$65,335$014.42:1 Individual Owner3$4,0040.09%$858,938$41,057$020.92:1 Individual Owner2$3,8410.09%$801,396$51,252$015.64:1 Individual Owner2$3,3330.08%$935,241$36,668$025.51:1 Individual Owner1$3,2480.08%$469,305$44,159$010.63:1 Individual Owner1$3,2480.08%$469,303$44,159$010.63:1 Individual Owner1$3,2480.08%$469,000$44,159$010.62:1 Individual Owner1$3,2480.08%$468,000$44,159$010.6:1 Individual Owner1$3,2480.08%$468,000$44,159$010.6:1 Individual Owner1$3,2480.08%$457,000$44,159$010.35:1 Subtotal16$35,9360.84%$6,338,490$459,263$013.8:1 All Others4,460$4,228,70599.16%$1,416,108,890$44,965,737$38,677,67016.93:1 Totals4,476$4,264,641100.00%$1,422,447,380$45,425,000$38,677,67016.91:1 (1) Value-to-Lien Ratios based upon estimated Refunding Par amount for each Local Obligation and includes other overlapping land secured bonded indebtedness. ______________________ Source: Albert A. Webb Associates The top 10 taxpayers in the combined CFDs represent < 1% of the aggregate Special Taxes

16. 16 | emwd.org Foreclosure Provisions EMWD will commence foreclosure proceedings by October 1 immediately following notice of a Special Tax delinquency. EMWD is not required to commence foreclosure proceedings if (i) the aggregate amount of the delinquency does not exceed 5% of the total Special Taxes due and payable that year and (ii) the balance on deposit in the Reserve Account is not less than the Reserve Requirement EMWD will begin foreclosure proceedings with respect to any property owned by a single property owner who is delinquent over $5,000. EMWD has the option to conditionally waive delinquency penalties if in the best interest of the Owners of the Bonds. EMWD is not obligated to advance available funds from its treasury to cure any deficiency in special taxes.

17. 17 | emwd.org Historical Administers EMWD administers 54 Community Facilities Districts and 86 separate financing areas EMWD has never had to finish a foreclose action on any property 1.31% delinquency rate on first installment of the $16.1 million 2015-2016 Special Tax levy EMWD has never drawn on any Debt Service Reserve Fund 17

18. 18 | emwd.org Section 3 Bond Financing Structure

19. 19 | emwd.org Proposed Financing Structure Pooled Refunding: WRWWFA will sell 2016 Bonds to purchase 14 outstanding CFD Bonds from EMWD. The 2016 Bonds will be secured by the debt service revenues from the purchased CFD Bonds. A Debt Service Reserve Fund will be held at the Authority level. - Each CFD will have an allocable share of the DSRF. - Delinquent CFD has obligation to fully restore DSRF.

20. 20 | emwd.org Financing Flow Chart 2016 Bonds EMWD CFD Refunding Bonds WRWWFA CFD 2001-01 IA-B CFD 2001-02 IA-A CFD 2001-02 IA-B CFD 2002-03 CFD 2002-04 IA-1 CFD 2002-04 IA-2 CFD 2002-04 IA-5 CFD 2002-06 IA-A CFD 2002-08 CFD 2002-10 CFD 2005-47 IA A CFD 2010-60 CFD 2005-39 CFD 2005-43 IA A

21. 21 | emwd.org Series A (Senior) Interest Only Series A (Senior) Principal & Interest Special Tax To County Special Tax To County Special Tax To District Special Tax To District December January March April May July September Next Year Taxes Set Next Year Taxes Set Special Tax To County Special Tax To County Special Tax To District Special Tax To District Surplus Tax Receipts / Debt Service Timeline

22. 22 | emwd.org Financing Schedule Date Activity Credit Conference Call with S&P and Insurers Anticipate Receipt of Credit Rating Board Meeting to Approve Legal Documents and POS Final Pricing Close Financing Call Local Agency Bonds Week of May 2 Week of May 16 May 18 June 01 June 15 September 01

23. 23 | emwd.org Questions and Discussion

24. 24 | emwd.org Conclusion Primarily residential, completely developed – 100% single family residences Strong Value-Lien Ratios – Average is ~14.5:1 Minimum concentration of special taxpayers – Top 14 property owners are responsible for < 1% of aggregate special taxes Low Delinquency Rates / Strong Collection History Low effective tax rates – less than 2% in 10 of the CFDs No additional parity bonds except for refunding purposes 24

25. 25 | emwd.org Disclaimer The information contained in this communication is supplemental to the information contained in the offering documents with respect to the referenced municipal securities and does not purport to be comprehensive or definitive. All statements contained herein are qualified in their entirety by reference to the information, including any disclaimers set forth therein, contained in the offering documents including the draft preliminary official statement provided to the recipient of this information, and the “deemed final” official statement and the final official statement to be delivered to potential investors and the recipient of this information in connection with the offering of the municipal securities described herein.