1. KATIE SCHWAB SVP MICHAEL SCHRADER BOND COUNSEL Facility Funding Regional Workshop Funding Best Practices October 31, 2013

2. Overview 1. Getting Started 2. Funding Options: a. Publicly Offered Bonds and Other Securities b. Commercial Bank Loans c. State and Federal Funding Programs d. Regionalization and Urban Renewal 3. Credit Considerations

3. 1. Getting Started Engage Financial Advisor and Bond Counsel early! Roles and responsibilities of Financial Advisor and Bond Counsel Use of proceeds Review all funding options Options for reducing capital/operating expenses Reimbursement resolution Paying for predevelopment costs Managing financing costs

4. Getting Started – Continued Options for reducing capital/operating expenses Reimbursement resolution Paying for predevelopment costs Managing financing costs

5. 2. Funding Options Publicly Offered Bonds and Other Securities Commercial Bank Loans State and Federal Funding Programs Regionalization and Urban Renewal

6. Publicly Offered Bonds and Other Securities General Obligation Bonds Full Faith and Credit Obligations Revenue Bonds Local Option Levies

7. General Obligation Bonds Requires voter approval – provides separate bond levy Establish Community Advisory Committee and conduct outreach Determine scope of project and project costs Adopt Board Resolution approving Notice of Election, including Ballot Title Upon successful election, Board adopts Bond Resolution approving issuance and Bonds

8. Non-voted Obligations No vote required – payable from all lawfully available funds Determine scope of project and project costs – same as GO Bonds Board adopts Authorizing Resolution approving Financing Agreement and delegating authority

9. Revenue Bonds Does not require voter approval Secured by revenue stream from energy efficiency contract Generally requires additional security Typically a private placement

10. Local Option Levies Not “securities” Requires voter approval – provides separate levy Subject to first compression 10 year maximum maturity

11. Summary of Securities and LOL

12. Structure Matters Example: $10M “AA” rated GO Bond maturing over 20 years

13. Level Levy Rate Level Debt Service Structure Matters – Graphs

14. Taxable vs. Tax Exempt Rates Issuer can use taxable and tax-exempt rates in the same issue, but they need to be split into different series. Issuer must choose between the two!

15. Taxable vs. Tax-Exempt

16. Taxable vs. Tax-Exempt continued

17. Sale Methods Private Placement Public Market  Competitive Sale  Negotiated Sale

18. Commercial Bank Loans Loans are not securities Up front costs are typically lower Interest may be (not always) higher than securities Term is typically shorter than for a publicly offered security

19. Loan Considerations Funds available quickly Flexible payment plans Amortization considerations Market risk with resets

20. Line of Credit Consideration for “bridge” financing Funds available quickly Interest paid only on principal that is drawn down

21. State and Federal Programs

22. Regionalization and Urban Renewal ESDs Shared facilities (e.g., Gresham) Review urban renewal plans

23. 3. Credit Considerations Governance and Management Financial Profile Debt Profile Operating Profile Economy and Local Factors Moody’s:  (i) increase in the weight assigns to debt profile and pensions, to 20% from 10%;  (ii) reduction in the weight attached to economic factors, to 30% from 40%

24. Contacts Katie Schwab, Senior Vice President Wedbush Securities katie.schwab@wedbush.com 503.471.6798; 800.234.0480 (toll-free) Michael Schrader, Attorney Orrick, Herrington & Sutcliffe LLP mschrader@orrick.com 503.943.4840