City of Glendale Debt Management Plan Finance Department Diane Goke – Chief Financial Officer June 30, 2011 CITY OF GLENDALE, ARIZONA INCORPORATED IN 1910 CITY COUNCIL Elaine M. Scruggs Mayor Steven E. Frate, Vice Mayor Joyce V. Clark, Councilmember (Sahuaro District) (Yucca District) Manuel D. Martinez, Councilmember Yvonne J. Knaack, Councilmember (Cholla District) (Barrel District) Norma S. Alvarez, Councilmember H. Philip Lieberman, Councilmember (Ocotillo District) (Cactus District) CITY ADMINISTRATIVE OFFICERS Edward Beasley, City Manager Horatio Skeete, Assistant City Manager Craig Tindall, City Attorney Pam Hanna, City Clerk Sherry Schurhammer, Executive Director Financial Services Diane Goke, Chief Financial Officer City of Glendale, Arizona Finance Department Debt Management Plan Table of Contents Page I. EXECUTIVE SUMMARY ............................................................................................................ I-1 Introduction ..................................................................................................................... I-1 Purpose of Debt Plan ............................................................................................ I-1 Adherence to Debt Related Policies ...................................................................... I-2 Recent Comments from Bond Rating Agencies ...................................................... I-6 Summary ........................................................................................................................ I-11 II. DEBT CAPACITY ANALYSIS ................................................................................................... II-1 Debt Issuance History...................................................................................................... II-1 Current Debt Situation ..................................................................................................... II-1 General Obligation Bonds ............................................................................................... II-9 Water and Sewer Revenue Bonds .................................................................................. II-12 Street and Highway User Revenue Bonds ...................................................................... II-19 Transportation Excise Tax Revenue Obligations ............................................................. II-23 Excise Tax Debt ............................................................................................................. II-29 Municipal Property Corporation......................................................................... II-29 Western Loop 101 Public Facilities Corporation................................................. II-37 Notes and Leases ........................................................................................................... II-42 Interfund Loans ............................................................................................................. II-48 Debt Limit ..................................................................................................................... II-53 Refunding Analysis ........................................................................................................ II-57 Capital Improvement Plan Summary .............................................................................. II-59 Ratio Analysis ................................................................................................................ II-72 Rating Agency Analysis ................................................................................................. II-73 III. DEBT MANAGEMENT POLICY ............................................................................................. III-1 Financing Alternatives .................................................................................................... III-1 General .............................................................................................................. III-1 Pay-As-You-Go Financing ................................................................................... III-1 Grants ................................................................................................................ III-2 Other Alternatives .............................................................................................. III-2 The Water Infrastructure Finance Authority of Arizona ........................................ III-2 Bank Loans/Private Placements ........................................................................... III-2 Bonds ................................................................................................................. III-2 Bond Variations ............................................................................................................ III-11 Capital Appreciation Bonds .............................................................................. III-11 Variable Rate Debt ........................................................................................... III-11 Taxable Alternatives ......................................................................................... III-12 Debt Issuance Policies .................................................................................................. III-12 Administration of Policy ................................................................................... III-12 Initial Review and Communication of Intent ..................................................... III-12 i Method of Sale ................................................................................................. III-12 Underwriter Selection for Negotiated Sale ........................................................ III-13 Use of Bond Insurance ...................................................................................... III-15 Derivatives ....................................................................................................... III-16 Arbitrage Rebate ............................................................................................... III-16 Continuing Disclosure of City Financial Information ......................................... III-16 Conduit Securities ............................................................................................ III-17 Prior Redemption ............................................................................................. III-17 Investment of Bond Proceeds ............................................................................ III-17 Use of Long-Term Debt .................................................................................... III-18 Use of Short-Term Debt .................................................................................... III-18 Refunding ......................................................................................................... III-18 Bond Closings .................................................................................................. III-19 IV. INDEX .................................................................................................................................. IV-1 APPENDIX A – RATING AGENCY REPORTS General Obligation Municipal Property Corporation Street and Highway User Revenue Water and Sewer Transportation Western Loop 101 Public Facilities Corporation APPENDIX B – DEFINITIONS APPENDIX C – DEBT SERVICE SCHEDULES REMAINDER OF PAGE INTENTIONALLY LEFT BLANK ii TABLES Page OUTSTANDING DEBT OBLIGATIONS....................................................................................... II-2 OUTSTANDING LONG-TERM INDEBTEDNESS AND OTHER OBLIGATIONS ........................... II-4 DEBT SERVICE REQUIREMENTS TO MATURITY ........................................................................ II-7 OUTSTANDING GENERAL OBLIGATION BONDED DEBT........................................................ II-9 DEBT SERVICE REQUIREMENTS – GENERAL OBLIGATION BONDED DEBT .......................... II-10 OUTSTANDING WATER AND SEWER BONDS/OBLIGATIONS ............................................... II-13 GENERAL OBLIGATION BONDS CURRENTLY PAID FROM WATER AND SEWER SYSTEM REVENUES .................................................................................................................... II-13 COMBINED DEBT SERVICE REQUIREMENTS – WATER AND SEWER BONDS / OBLIGATIONS.............................................................................................................. II-14 WATER AND SEWER REVENUE BOND HISTORICAL COVERAGE ........................................... II-17 WATER AND SEWER BONDS/OBLIGATIONS DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE .......................................................................................... II-18 OUTSTANDING STREET AND HIGHWAY USER REVENUE BONDS ....................................... II-20 DEBT SERVICE REQUIREMENTS – STREET AND HIGHWAY USER REVENUE BONDS ............ II-20 STREET AND HIGHWAY USER REVENUE BONDS HISTORICAL COVERAGE ......................... II-22 STREET AND HIGHWAY USER REVENUE BONDS DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE .......................................................................................... II-22 OUTSTANDING TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS .......................... II-24 DEBT SERVICE REQUIREMENTS – TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS.............................................................................................................. II-25 TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS HISTORICAL COVERAGE ............ II-27 TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE ...................................................... II-28 OUTSTANDING MUNICIPAL PROPERTY BONDS ................................................................... II-30 MPC DEBT FINANCING SUMMARY ........................................................................................ II-31 DEBT SERVICE REQUIREMENTS – MUNICIPAL PROPERTY CORPORATION BONDS ............. II-32 MUNICIPAL PROPERTY CORPORATION HISTORICAL COVERAGE........................................ II-34 MUNICIPAL PROPERTY CORPORATION SENIOR DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE .......................................................................................... II-35 MUNICIPAL PROPERTY CORPORATION SENIOR AND SUBORDINATE DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE ...................................................... II-36 OUTSTANDING PUBLIC FACILITIES CORPORATION BONDS................................................ II-37 DEBT SERVICE REQUIREMENTS – PUBLIC FACILITIES CORPORATION BONDS .................... II-38 ALL UNRESTRICTED EXCISE TAX OBLIGATIONS DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE .......................................................................................... II-40 OUTSTANDING NOTES AND LEASES ..................................................................................... II-42 DEBT SERVICE REQUIREMENTS – NOTE AND LEASE OBLIGATIONS ..................................... II-43 DEBT SERVICE TO MATURITY BY LEASE OR NOTE ................................................................. II-45 LEASE/NOTE FINANCING SUMMARY...................................................................................... II-47 OUTSTANDING LONG-TERM INTERFUND LOANS ................................................................ II-48 DEBT SERVICE REQUIREMENTS – LONG-TERM INTERFUND LOANS ..................................... II-49 DEBT SERVICE TO MATURITY BY INTERFUND LOAN ............................................................ II-51 CONSTITUTIONAL DEBT LIMITATION.................................................................................... II-53 CONSTITUTIONAL GENERAL OBLIGATION DEBT CAPACITY – 6% LIMIT ............................ II-54 iii CONSTITUTIONAL GENERAL OBLIGATION DEBT CAPACITY – 20% LIMIT .......................... II-55 VOTER AUTHORIZED GENERAL OBLIGATION AND REVENUE BONDS ............................... II-56 ESTIMATED FUTURE BOND SALES .......................................................................................... II-60 PROPOSED WATER AND SEWER GENERAL OBLIGATION, REVENUE BONDS, AND REVENUE OBLIGATIONS FINANCING SUMMARY ...................................................... II-61 PROPOSED TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS FINANCING SUMMARY.................................................................................................................... II-64 PROPOSED STREET AND HIGHWAY USER REVENUE BONDS FINANCING SUMMARY........ II-67 PROPOSED MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE BONDS FINANCING SUMMARY ............................................................................................... II-69 DIRECT NET DEBT.................................................................................................................... II-72 DESCRIPTION OF BOND RATINGS ......................................................................................... II-73 DEBT RATING HISTORY .......................................................................................................... II-74 REMAINDER OF PAGE INTENTIONALLY LEFT BLANK iv SECTION I EXECUTIVE SUMMARY THIS PAGE INTENTIONALLY LEFT BLANK I. EXECUTIVE SUMMARY Introduction Purpose of Debt Plan The Government Finance Officers Association recommends that local governments "should develop a formal debt policy to establish parameters and to provide general direction in the planning and implementation of a debt program." (An Elected Official's Guide to Debt Issuance, p. 11, by J.B. Jurish and Patricia Tigue, Government Finance Officers Association) The purpose of the City’s debt management plan is to manage the issuance of the City's debt obligations and maintain the City's ability to incur debt and other long-term obligations at favorable interest rates for capital improvements, facilities, and equipment beneficial to the City and necessary for essential services. The decision to issue bonds may commit tax revenues for many years into the future, therefore limiting the government’s flexibility to respond to changing service priorities, revenue streams or cost structures. This document is not intended to review the City's total financial position, which is accomplished in the City’s Comprehensive Annual Financial Report. Analysis of the City's debt position is important, as growth in the City could result in an increased need for capital financing. Resources, as well as needs, should drive the City's debt issuance program. Decisions regarding the use of debt will be based in part on the long-term needs of the City and the amount of equity (cash) dedicated in a given fiscal year to capital outlay. The information contained herein reflects the current debt status of the City and provides a useful framework for the ongoing debt management process the City has implemented. A disciplined, systematic approach to debt management will allow the City to maintain its excellent credit ratings. Unless otherwise noted, the source for the information presented in this document is the City of Glendale Finance Department. The Chief Financial Officer has instituted a conservative plan of finance for the City’s capital projects. The main objectives of that plan have been: ™ Evaluate all possible funding mechanisms to insure that the City will receive the best possible terms/conditions on transactions ™ To use debt structures which match the useful lives of the projects being financed or fall within accepted maturity guidelines ™ To utilize revenue-based bond issues, where feasible, e.g. water and sewer and street and highway user bonds ™ To utilize excise tax secured bond issues when appropriate ™ To finance, on a general obligation basis, the majority of the remaining projects I-1 The following policy consists of a Debt Capacity Analysis followed by a Debt Management Policy. The Debt Capacity Analysis illustrates historical trends for various categories of debt. Explanations of the security for various categories of debt are provided. As of June 30, 2011, $1,123,836,916 of debt is outstanding. The Debt Management Policy provides information about various debt options available to the City. Various debt issuance policies are explained which help provide an orderly issuance process for the City. Debt guidelines have been utilized to maintain the highest possible credit ratings for the City. Adherence to Debt Related Policies Policy Use of Bond Insurance When insurance is purchased directly by the City, the present value of the estimated debt service savings from insurance should be at least equal to or greater than the insurance premium. The bond insurance company will usually be chosen based on an estimate of the greatest net present value insurance benefit (present value of debt service savings less insurance premium). It is the City’s preference to have bond insurance purchased at underwriter’s option, if at least two insurance companies are expected to qualify the issue for insurance. (See p. III-15 for additional information.) City Practice: Policy Followed Arbitrage Rebate It is the City’s policy to calculate its arbitrage rebate liability on an annual basis. In conformance with general accounting principles, it is the City’s policy to segregate current arbitrage for future payment or credit and to enter such an amount as a liability on its books. Whenever feasible, the City will structure its financings in such a way as to reduce or eliminate future arbitrage rebate liability. (See p. III-16 for additional information.) City Practice: Policy Followed Continuing Disclosure of City Financial Information The City will provide annual financial statements and other pertinent information, including the Comprehensive Annual Financial Report (“CAFR”) upon request and at the expense of the persons making the request. The City has in the past complied with, and intends to fully comply with the “continuing disclosure” rules. (See p. III-16 for additional information.) City Practice: Policy Followed I-2 Conduit Securities The City will encourage all conduit securities to be issued with a complete official statement or other disclosure document; the documents shall clearly describe the limited source of repayment and lack of direct financial support from the City. The City shall obtain a clear opinion that it shall not be liable for the payment of principal and interest in the event of a default by the conduit borrower. (See p. III-17 for additional information.) City Practice: Policy Followed Prior Redemption Bonds issued by the City shall be callable no later than ten years from the date of the issuance. With each issuance of bonds, the City, or its financial advisor, should assess market conditions to determine if a more aggressive (shorter) call can be obtained without significant impact on the bond interest rate. (See p. III-17 for additional information.) City Practice: Policy Followed Use of Long-Term Debt Long-Term debt issued by the City will be used for capital improvements that cannot be funded with non-debt funds. Long-term debt will not be used for operations. The term of City debt issues should not extend beyond the useful life of the project or equipment financed. Debt issued by the City should be structured to provide for either level principal or level debt service. Term bonds may be used only if they are subject to mandatory prior redemption. Deferring the repayment of the principal should be avoided except in select instances where it will take a period of time before project revenues are sufficient to pay debt service or where the deferral of principal allows the City to achieve combined level debt service with other outstanding bonds. Ascending debt service should generally be avoided. (See p. III-18 for additional information.) City Practice: Policy Followed Variable Rate Debt Variable rate debt will be considered on a case-by-case basis. When used, a cap on the rate is recommended. No more than 10% of the City’s debt shall be variable rate. (See p. III-11 for additional information.) City Practice: Policy Followed I-3 Refunding The City will generally consider refunding outstanding bonds if one or more of the following conditions exist: ™ Present value savings are at least 3% of the par amount of the refunded bonds. ™ The bonds to be refunded have restrictive or outdated covenants. ™ Restructuring debt is deemed to be desirable. ™ The City may pursue a refunding not meeting the above criteria if: ™ Present value savings exceed the costs of issuing the bonds. ™ Current savings are acceptable when compared to savings that could be achieved by waiting for more favorable interest rates and/or call premiums. (See p. III-18 for additional information.) City Practice: Policy Followed Bond Closings All bond closings shall be held in Maricopa County unless an out-of-state closing is able to be combined with other City business or circumstances dictate otherwise. (See p. III-19 for additional information.) City Practice: Policy Followed Short-Term Borrowing Short-term debt, revenue application notes (“RANS”), bond application notes (“BANS”) and tax anticipation notes (“TANS”) should generally not be used by the City. Short-term debt can be avoided by maintaining appropriate fund balances and timing bond issues to coincide with construction draws. (See p. III-18 for additional information.) City Practice: Policy Followed Short-term borrowing or lease/purchase contracts should be considered for financing major operating capital equipment when the Chief Financial Officer, along with the city's financial advisors, determines that this is in the city's best financial interest. Lease/purchase decisions should have the concurrence of the appropriate operating manager. Short-term debt should not exceed 5% of revenue or 20% of total debt. Source: 2012 Budget, page 104 I-4 General Obligation Debt The City will maintain a secondary property tax rate to support existing and future property tax supported debt. The City should maintain a general obligation debt service fund balance of at least 10% of next year's property tax supported debt service. Source: 2012 Budget, page 104 City Practice: Policy Followed. The June 30, 2011 debt service fund balance was $21,250,000 which is 91% of the following year’s property tax supported debt service. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK I-5 Recent Comments from Bond Rating Agencies General Obligation Ratings Standard & Poor’s – November 1, 2010 “Standard & Poor’s revised its outlook to negative from stable and affirmed its ‘AA’ underlying rating and long-term rating on Glendale, Ariz.’s outstanding general obligation (GO) bonds. The outlook revision reflects our view of the City’s continued drawdown of its reserves in order to balance its budget. The ratings reflect our view of the City’s: ™ Participation in the diverse Phoenix metropolitan statistical area (MSA) economic base, ™ Strong financial management policies, and ™ Strong wealth levels as measured by market value per capita Partially mitigating our view of the above credit strengths is our view of the City’s: ™ Sluggish regional and local economy, which has lead to declining general fund revenues, and ™ Moderate overall net debt burden, including all overlapping and direct taxsupported debt. ...Beginning in fiscal 2009, the City’s general fund revenues have been on a declining trend, decreasing by approximately 12% and 5% in fiscals 2009 and 2010, respectively, to approximately $140 million... The City continues to project using approximately $10 million of available reserves to balance its fiscal 2011 operations deficit and projects ending fiscal 2011 with an unreserved fund balance of approximately $17 million, or a strong 11.3% of expenditures… ...The negative outlook reflects our expectation that the City’s economy will ultimately stabilize and lead to steady tax revenues, allowing for continued strong levels of financial reserves. However, the City has in recent years relied on its reserves to balance operations. If the economy continues to weaken, and financial reserves decrease substantially, the rating could be lowered” REMAINDER OF PAGE INTENTIONALLY LEFT BLANK I-6 Moody’s Investors Service – February 9, 2011 “Moody's Investors Service has downgraded the City of Glendale, Arizona's general obligation… to Aa2 from Aa1… In addition… Moody's has revised the outlook on the City's general obligation and related ratings to stable from negative… …The City's Aa2 general obligation rating reflects its weakened local economy which benefits from its position as a sports and entertainment destination even during the recession, a large tax base, below average socioeconomic indices, and narrowed but still healthy financial reserves which help mitigate the reliance on economically sensitive revenues... …Spurred by both residential and commercial construction, tax base growth has averaged 11.4% annually for the most recent five-year period, which is slightly above the national median for cities. However, the city's 2010 full market value declined slightly, by 1.9%, and then by a substantial 16.0% in 2011 reflecting the lagged impact of lower property values and slowed commercial construction. Consistent with the expectations of other Phoenix area local governments, Moody's anticipates further tax base declines for Glendale in 2012. Despite these declines, the City's tax base remains substantial at $17.3 billion in 2011, which is above average in size with other similarly rated cities in the western states. The City's secondary assessed value (AV) is comprised of primarily residential property (55%), followed by commercial and industrial entities (40%). The city has relatively little agricultural and vacant land (5%) and build out is estimated in about 10 to 15 years. Top ten taxpayers represent a modest 7.1% of AV, and primarily comprised of a hospital, utilities, a large retail center, and warehouses. According to 2006 - 2008 U.S. Census estimates, wealth indices for Glendale are below the median for Aa1 rated cities nationally with per capita and median family incomes at 91.9% and 99.8% of state levels respectively… …Despite recent declines in general fund balances, Glendale's financial position remains in line with its peers nationally. The City has experienced large operating deficits over the last two years. In fiscal 2009, Glendale's general fund balance declined by $13.8 million to $52.6 million (35.5% of general fund revenues) and declined by an additional $13.8 million (estimated) in fiscal 2010 to $38.8 million (27.5% of general fund revenues). Although these balances approximate the national median for cities and are well within the norm for cities in its peer group, they are somewhat below the norm for cities in Arizona. The City's excise tax revenues, which typically account for approximately three-fourths of general fund revenues, are comprised of state and local sales taxes, state income taxes, and state motor vehicle in-lieu taxes. Excise tax revenues declined by 7.2% in fiscal 2009 and 8.7% in fiscal 2010 and contributed to the city's operating deficits. Of continued concern, Moody's notes that the amount of debt service supported by the general fund is substantial, reflective of management's decision to highly leverage the city's primary operating resource. Total maximum annual excise tax debt service will represent a substantial 28.6% of fiscal 2010 general fund revenues…” REMAINDER OF PAGE INTENTIONALLY LEFT BLANK I-7 Water and Sewer Revenue Obligation Ratings Standard & Poor’s – November 1, 2010 “Standard & Poor’s assigned its ‘AA’ rating to Glendale Ariz.’s subordinate-lien water and sewer revenue obligations series 2010A (Build America Bonds). At the same time, Standard & Poor’s affirms its ‘AA’ rating on the City’s outstanding water and sewer revenue bonds. The outlook is stable… The ratings reflect our view of the system’s: ™ Stable service area and economic base, ™ Adequate water sources to meet demand, and ™ Strong liquidity… The City’s water and sewer system’s financial operations have been healthy, in our view, as evidenced by operating revenues exceeding operating expenditures in each of the last four years… Liquidity in fiscal 2009 was also what we consider strong, at 206 days’ unrestricted cash on hand… The stable outlook reflects the system’s continued strong financial performance and strong system liquidity. The outlook also reflects Standard & Poor’s expectation that the system will continue to increase rates, as necessary, to meet the demands of the capital improvement plan and annual ongoing expenses while still maintaining what we consider to be good combined debt service coverage of revenue debt obligations, in line with historical levels. In addition, the outlook for the subordinate-lien bonds reflects our expectation that the subordinate-lien structure will become the system’s working lien and that the amount of senior-lien debt will be limited.” Moody’s Investors Service – November 3, 2010 “Moody’s Investors Service has assigned a Aa3 rating to the City of Glendale, Arizona, Subordinate Lien Water and Sewer Revenue Obligations Series 2010A (Taxable Direct Pay Build America Bonds)… The rating reflect a growing and largely residential customer base, and a history of regular rate increases which have continued to provide satisfactory debt service coverage despite a large capital plan funded primarily with subordinate lien debt... Coverage of combined senior and subordinate utility debt service was somewhat narrow at 1.32 and 1.24 times in 208 and 2009, respectively, with annual debt service coverage by fiscal 2010 net revenues improving slightly to 1.42 times, and aggregate coverage (which includes debt service attributable to utility supported G.O. bonds) at 1.35 times, just short of meeting management’s target of 1.40 to 1.50 times... Moody’s believes the Glendale system’s debt service coverage levels are somewhat low for Aa3 rated water and sewer enterprises and are well below the median total debt service coverage levels of 1.97 for Aa2 rated systems and 1.71 for Aa3 rated systems… With the utility's significant capital plan, future coverage levels rely on fairly substantial increases to rates and impact fees. To support the utility's significant future borrowing plans, Moody's expects the City to implement regular rate increases annually for both water and sewer service in order to keep pace with the issuance of additional debt. The current rating assignment is also based upon the expectation that future revenue adjustments will be sufficient to provide annual coverage levels at or above management's 1.4 to 1.5 times aggregate coverage target” I-8 Transportation Revenue Obligation Ratings Standard & Poor’s – September 24, 2007 “Standard & Poor’s Ratings Services assigned its ‘AA’ rating, and stable outlook, to Glendale Ariz.’s series 2007 transportation excise tax revenue obligations. The rating reflects the City’s: ™ Underlying credit strengths (‘AA’ Go debt rating), including its participation in the diverse Phoenix MSA; ™ Solid maximum annual debt service (MADS) coverage of 2.1x; and ™ Sound legal covenants with an additional bonds test of 2.0x MADS and 1.5x debt service coverage (DSC). These strengths are mitigated, in part, by the City’s: ™ Absence of an up-front debt service reserve fund, though a 1.75x springing reserve is provided; and ™ Plans for additional bonding against pledged reserves and below average debt amortization... ...Glendale’s sound additional bonds test and debt service covenant provide additional credit stability despite the city’s plans for additional debt and the absence of a fully funded reserve fund. Sound legal provisions include a 2.0x additional bonds test and an ability to increase the 0.5% transportation excise tax rate without electorate approval if annual DSC reaches 1.5x... ...The stable outlook reflects the expectation that the City’s large sales tax base and current excise tax growth will continue to provide adequate MADS coverage and that city management will adhere to its sound legal covenants. In addition, we believe management will effectively monitor its plans for additional needed debt under its long-term transportation capital plan.” Moody’s Investors Service – October 5, 2007 “Moody’s Investors Service has assigned an A1 rating to Glendale’s (AZ) $110.0 million Transportation Excise Tax Revenue Obligations, Series 2007. The current offering is secured by a gross, first-lien pledge on the City’s 0.5% transportation tax, which also support local public transportation costs. Proceeds from the current issue will be used for various, voter approved, transportation related capital projects. The A1 rating reflects Moody’s expectation that coverage of debt service on both a gross and net basis will remain sound given anticipated economic and population growth, sizeable, but manageable future transportation borrowing plans, and the credit strength provided by the 2.0 times maximum annual debt service additional bonds test. The A1 rating also reflects the City’s general credit characteristics including solid financial reserves, which help mitigate the reliance upon economically sensitive revenues. These credit strengths further offset somewhat below average wealth indices and high debt levels.” I-9 Municipal Property Corporation Obligations Ratings Standard & Poor’s – April 24, 2008 “Standard & Poor’s Ratings Services assigned its ‘AA+’ rating and stable outlook to Glendale Municipal Property Corp., Ariz.’s excise tax revenue bonds series 2008. In addition, Standard & Poor’s affirmed its ‘AA+’ rating on the City’s senior- and junior-lien excise tax revenue debt outstanding. The rating reflects the City’s: ™ Underlying credit strengths (“AA” GO debt rating), including its participation in the diverse Phoenix MSA; ™ Strong senior maximum annual debt service (MADS) coverage of 5.4x; and ™ Good legal covenants, including a 3x additional bonds test (ABT) for the senior-lien debt. A mitigating factor is the City’s above-average overall net debt burden, including all overlapping and direct tax-supported debt. ...The stable outlook reflects Standard & Poor's expectation that pledged revenues will grow as projected and help Glendale restore debt service coverage to historic levels of over 6.0x. The City's dependence on pledged revenues for general fund operations reduces the likelihood that it will issue additional debt at the expense of lowering debt service coverage…” Moody’s Investors Service – February 9, 2011 “Moody's Investors Service has downgraded the City of Glendale, Arizona's senior lien excise tax rating to Aa3 from Aa2… …The rating and downgrade reflects the City's high debt burden, high leverage of the City's largest general fund revenue, relatively low debt service coverage of all three liens of excise tax revenue bonds and the declining trend of pledged revenues… …The current offering significantly increases the amount of the City's total excise tax debt to approximately $592.6 million, which is a contributing factor in the rating assignment. Debt service coverage of the City's excise tax bonds is well below average when compared to the local peer group. In Arizona, excise tax revenues typically comprise two-thirds of operating revenues and, correspondingly, coverage levels for excise tax bonds are strong, generally in the double-digit range. Fiscal 2010 pledged revenues provide coverage of maximum annual senior lien debt service of 4.8 times... …Moody's notes that the amount of debt service supported by the general fund is substantial, reflective of management's decision to highly leverage the City's primary operating resource. Total maximum annual excise tax debt service will represent a substantial 28.6% of fiscal year 2010 general fund revenues (not including transfers). Although new additions to the City's retail base helped mitigate revenue declines during the recession, the sluggish recovery continues to have a negative effect on the growth of pledged revenues. Over the long term, City officials expect to fully support these long term debt obligations from anticipated revenues associated with the economic development projects around the NHL Arena, Cardinal Stadium, and Cabelas primarily from new sales tax dollars…” I-10 Summary ™ Bonding should be used to finance or refinance only those capital improvements and long-term assets, or other costs directly associated with financing of projects, which have been determined to be beneficial to a significant proportion of the citizens in the City and for which repayment sources have been identified. Bonding should be used only after considering alternative funding sources, such as project revenues, Federal and State grants and special assessments. (See "Financing Alternatives" on page III-1.) ™ The City's Direct Net Tax-Supported Debt should be maintained at a level considered manageable by the rating agencies based upon current economic conditions, including among others, population, per capita income and assessed valuation. (See "Ratio Analysis" on page II-72.) ™ The City will maintain a secondary tax property rate to support existing and future property tax supported debt. The City should maintain a general obligation debt service fund balance of at least 10% of next year’s property tax supported debt service. (See "General Obligation Bonds" on page II-9.) ™ The City should structure all long-term debt with prepayment options except when alternative structures are more advantageous to the City. The City will consider prepaying or defeasing portions of outstanding debt when available resources are identified. (See "Prior Redemption" on page III-17.) ™ The Chief Financial Officer should consider refunding outstanding bonds if one or more of the following conditions exist: (1) present value savings are at least 3%, with certain exceptions, of the par amount of the refunded bonds; (2) the bonds to be refunded have restrictive or outdated covenants; or (3) restructuring debt is deemed to be desirable. (See "Refunding" on page III-18.) ™ All bond issue requests should be coordinated by the Chief Financial Officer during the annual budget and Capital Improvement Program ("CIP") process. Opportunities for refunding outstanding bonds should be communicated to the Chief Financial Officer. (See "Administration of Policy" and "Initial Review and Communication of Intent" on page III-12.) ™ The City should encourage the use of competitive sales for all bond issues unless circumstances dictate otherwise. Negotiated sales will be considered by the Chief Financial Officer only under the conditions set forth herein. (See "Method of Sale" on page III-12.) ™ The City will provide the rating agencies who maintain a rating on City securities with all material that has a pertinent bearing on City finances. (See "Continuing Disclosure of City Financial Information" on page III-16.) ™ Debt service on outstanding Highway User Revenue bonds will not exceed 45% of revenues. (See "Schedule of Highway User Tax Revenues Street and Highway User Revenue Bonds Debt Service Requirements and Debt Service Coverage" on page II-22) ™ The City should pursue Water Infrastructure Finance Authority of Arizona financing to determine if it is a viable option for financing water and sewer improvements. (See "The Water Infrastructure Finance Authority of Arizona" on page III-2.) ™ The Chief Financial Officer should review/update the City's Debt Analysis as needed. I-11 ™ The City currently requires a clear opinion that it shall not be liable for the payment of principal and interest in the event of a default by the conduit borrower, such as industrial development bonds. (See "Conduit Securities" on page III-17.) ™ Debt Service covenants represent a further constraint upon the City’s ability to issue bonds; such covenants may require the City to increase user rates/excise taxes to maintain required coverage. (See pages II-12, II-19, II-23, and II-29.) REMAINDER OF PAGE INTENTIONALLY LEFT BLANK I-12 SECTION II DEBT CAPACITY ANALYSIS THIS PAGE INTENTIONALLY LEFT BLANK II. DEBT CAPACITY ANALYSIS Debt Issuance History Founded in 1892 and incorporated in 1910, the City has used debt financing for many years to finance infrastructure. The following charts illustrate a historical account of the amount of debt, as well as categories of debt, outstanding as of June 30, 2011. Current Debt Situation It is recognized that all debt, regardless of the source of revenue pledged for repayment, represents some sort of cost to taxpayers or ratepayers. Therefore, all types of City debt/obligations are considered herein. If only a portion of the City's debt was considered, it may be hard to draw a conclusion as to trends, since the City can substitute different types of debt for various projects. While lease-secured and certificate of participation obligations may not be debt under strict legal definitions, future appropriations are still required if the underlying transaction is to continue, which can result in a fixed charge. These lease payments and other non-bond obligations are added as de-facto debt by most security analysts when calculating an issuer's debt ratios. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK II-1 OUTSTANDING DEBT OBLIGATIONS City of Glendale, Arizona As of June 30, 2011 Category of Bonds General Obligation (GO) Water/Sewer G.O. (WSGO) Water/Sewer Revenue (WSR) Special Assessment Street/Highway Revenue Municipal Property Corp. Miscellaneous Capital Lease Notes Miscellaneous Total Miscellaneous TOTAL Category of Bonds General Obligation (GO) Water/Sewer G.O. (WSGO) Water/Sewer Revenue (WSR) Special Assessment Street/Highway Revenue Trans. Excise Tax Rev. Municipal Property Corp. Public Facilities Corp Miscellaneous Capital Lease Notes Miscellaneous Long-Term Interfund Loans Total Miscellaneous TOTAL 1 Fiscal Year Ending June 301 2000 2001 2002 $56,515,000 $48,250,000 $83,970,000 8,175,000 6,165,000 6,165,000 71,994,796 63,419,737 69,421,000 19,278,000 17,621,000 16,247,000 28,380,000 24,310,000 24,310,000 12,000,000 11,215,000 11,215,000 1998 $50,740,000 11,835,000 22,395,270 21,857,000 26,585,000 13,040,000 1999 $43,025,000 10,000,000 18,555,270 20,730,000 23,230,000 12,265,000 2003 $118,075,000 15,825,000 54,995,463 12,036,000 15,520,000 169,350,000 2004 $145,975,000 13,135,000 128,800,401 109,000 22,455,000 177,950,000 5,768,277 3,841,102 9,609,379 $156,061,649 4,352,187 1,851,659 6,203,846 $134,009,116 26,150,529 6,693,486 32,844,015 $229,186,811 25,109,000 4,340,000 29,449,000 $240,777,000 27,787,078 17,769,383 45,556,461 $431,357,924 25,708,525 17,088,502 42,797,027 $531,221,428 2006 $163,055,464 12,294,536 197,994,986 39,000 34,065,000 0 173,280,000 0 Fiscal Year Ending June 301 2007 2008 2009 $212,524,014 $197,738,173 $183,945,000 11,135,986 10,126,828 9,160,000 233,689,129 291,937,502 281,966,700 0 0 0 30,895,000 27,480,000 23,910,000 0 105,035,000 102,490,000 298,050,000 294,130,000 287,555,000 0 0 199,750,000 2005 $146,680,000 12,375,000 124,807,737 75,000 20,195,000 0 176,065,000 0 2010 211,125,000 8,300,000 263,490,000 0 20,180,000 99,815,000 281,955,000 199,750,000 2011 $194,270,000 7,410,000 292,633,143 0 16,290,000 97,035,000 275,370,000 199,750,000 16,379,101 18,575,770 0 34,954,871 $515,152,608 15,486,304 15,585,852 0 31,072,156 $611,801,142 14,841,000 6,278,746 0 21,119,746 $807,413,875 8,085,000 6,288,000 0 14,373,000 $1,098,988,000 11,958,918 1,416,156 27,703,699 41,078,773 $1,123,836,916 22,647,732 5,753,786 28,401,518 $199,382,255 12,526,000 9,045,000 0 21,571,000 $948,018,503 10,156,000 7,637,000 0 17,793,000 $1,106,569,700 The fiscal year ending June 30 includes the payment of principal and interest on the following day. The total outstanding balance therefore reflects the long-term portion, due after July 1, in each year. SOURCE: City’s Comprehensive Annual Financial Reports 1998-2010 and Finance Department II-2 OUTSTANDING DEBT OBLIGATIONS City of Glendale, Arizona (000's) $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 GO's Water/Sewer GO's Water/Sewer Revenues Special Assessment Transportation Excise Tax Rev. Street/Highway Revenues MPC PFC Miscellaneous II-3 2010 2011 The following table illustrates outstanding debt and other obligations of the City of Glendale. OUTSTANDING LONG-TERM INDEBTEDNESS AND OTHER OBLIGATIONS City of Glendale, Arizona As of June 30, 20111 Year Issued Original Amount DIRECT GENERAL OBLIGATION BONDED DEBT Various Purpose G.O. Bonds 2003 66,400,000 Various Purpose G.O. Bonds 2004 36,645,000 Various Purpose G.O. Bonds 2005 11,960,000 Various Purpose G.O. Bonds 2006 29,365,000 Refunding Bonds 2006 9,065,000 Various Purpose G.O. Bonds 2007 61,000,000 Various Purpose G.O. Bonds 2009 41,650,000 Refunding Bonds 2010 38,300,000 Outstanding Outstanding Portion Portion Subject to Subject to Total Balance Year 6% Limit 20% Limit Outstanding Matures 0 0 5,285,000 5,895,000 0 0 5,040,000 729,242 18,635,000 21,955,000 0 15,650,000 7,440,000 48,140,000 35,340,000 37,570,758 18,635,000 21,955,000 5,285,000 21,545,000 7,440,000 48,140,000 40,380,000 38,300,000 2018 2019 2015 2021 2015 2022 2030 2022 Total Direct G.O. Bonded Debt 16,949,242 184,730,758 $201,680,000 2 Less G.O. Debt Supported by Pledged Revenues (7,410,000) NET GENERAL OBLIGATION DEBT $194,270,000 WATER AND SEWER REVENUE BONDED DEBT Water and Sewer Note Payable3 2001 Water and Sewer Revenue Obligations 2003 Water and Sewer Revenue Obligations 2006 Water and Sewer Revenue Obligations 2007 Water and Sewer Revenue Obligations 2008 Water and Sewer Note Payable4 2010 Water and Sewer Revenue Obligations 2010 Total Water and Sewer Rev. Bonded Debt 15,400,000 80,000,000 80,000,000 44,500,000 65,500,000 6,340,000 25,685,000 7,502,071 77,405,000 76,545,000 40,850,000 58,555,000 6,091,072 25,685,000 $292,633,143 2022 2028 2026 2027 2028 2029 2030 STREET & HIGHWAY USER REVENUE BONDED DEBT Street & Highway User Revenue Bonds 2004 14,655,000 Street & Highway User Revenue Bonds 2006 15,745,000 Total Street & Highway User Rev. Bonded Debt 7,580,000 2014 8,710,000 2016 $16,290,000 TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS Trans. Excise Tax Revenue Obligations 2007 109,110,000 Total Transportation Excise Tax Revenue Obligations 97,035,000 2028 $97,035,000 - table and footnotes continued on following page - II-4 Year Issued Original Amount Outstanding Outstanding Portion Portion Subject to Subject to Total Balance Year 6% Limit 20% Limit Outstanding Matures GLENDALE MUNICIPAL PROPERTY CORPORATION 5,055,000 Subordinate Lien Bonds 2002 Excise Tax Revenue Bonds 2003 49,940,000 Excise Tax Revenue Bonds (Taxable) 2003 105,260,000 7,250,000 Subordinate Lien Bonds 2003 Excise Tax Revenue Bonds 2004 10,880,000 Excise Tax Revenue Bonds 2006 33,250,000 Excise Tax Revenue Bonds 2008 32,315,000 Excise Tax Revenue Bonds 2008 52,780,000 Excise Tax Revenue Bonds 2008 9,140,000 Total Glendale Municipal Property Corp. Obligations 5,055,000 44,400,000 96,065,000 7,250,000 5,295,000 28,360,000 32,220,000 51,075,000 5,650,000 $275,370,000 WESTERN LOOP 101 PUBLIC FACILITIES CORPORATION Third Lien Excise Tax Bonds 2008 137,495,000 Third Lien Excise Tax Bonds 2008 48,670,000 Third Lien Excise Tax Bonds 2008 13,585,000 Total Public Facilities Corp. Obligations 137,495,000 2038 48,670,000 2038 13,585,000 2017 $199,750,000 2033 2033 2033 2033 2014 2026 2032 2033 2015 LEASE FINANCINGS Equipment Lease Refunding Lease Total Lease Financings 2007 2011 1,368,800 11,503,100 455,818 2016 11,503,100 2018 $11,958,918 NOTE FINANCINGS5 99th & Northern Ave Note Total Note Financings 2009 3,540,390 1,416,156 2013 $1,416,156 LONG-TERM INTERFUND LOANS Sanitation Fund Loan General Fund Loan Debt Service Fund Loan Total Long-Term Interfund Loans 2010 2011 2011 959,000 25,000,000 1,978,000 725,699 2014 25,000,000 2036 1,978,000 2021 $27,703,699 GRAND TOTAL 1 2 3 4 5 $1,123,836,916 Excludes previously refunded bonds, the payment of which has been provided for with funds and investments held in irrevocable trust accounts. Net revenues from the operation of the City's water and sewer system have been and will be servicing the debt requirements of $7,410,000 aggregate principal amount of water and sewer general obligation bonds. In the event that such revenues should prove to be insufficient or the City elects not to pay debt service requirements on the general obligation bonds from these revenues, this debt would become payable from property taxes. Based on the amortization of $12,911,049. Based on the amortization of $6,340,000. To date, the City has drawn $3,232,000. As of June 30, 2011, $2,982,972 is outstanding. Excludes the January 26, 2001 loan agreement (amended August 23, 2002) and Mach 19, 2010 loan agreement with the Wastewater Management Authority of Arizona, which are included in the outstanding water and sewer revenue bonded debt. SOURCE: Finance Department II-5 The following chart illustrates the current allocation of outstanding City of Glendale debt and other obligations. OUTSTANDING LONG-TERM INDEBTEDNESS AND OTHER OBLIGATIONS City of Glendale, Arizona As of June 30, 2011 26% 18% General Obligation - $201,680,000 (18%) Water/Sewer - $292,633,143 (26%) MPC - $275,370,000 (24%) Street/Highway - $16,290,000 (1%) Transportation - $97,035,000 (9%) 24% 18% Other - $41,078,773 (4%) PFC - $199,750,000 (18%) 4% 9% 1% II-6 The following table and graph illustrate the debt service to maturity of all City of Glendale debt and other obligations, excluding leases. DEBT SERVICE REQUIREMENTS TO MATURITY All Categories of Debt and Other Obligations (Excluding Lease Financings) City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 TOTAL 1 2 Interest2 Principal $42,897,444 44,632,366 47,536,623 49,774,375 49,730,969 50,493,043 52,226,651 51,022,849 49,193,487 49,957,278 49,759,948 43,970,954 46,102,306 48,379,015 50,841,092 52,293,549 51,256,398 42,074,651 42,955,000 35,025,000 36,975,000 31,615,000 14,560,000 18,855,000 19,990,000 19,280,000 20,480,000 $1,111,877,998 $56,452,832 54,731,004 52,805,645 50,625,383 48,278,709 45,892,072 43,550,081 41,196,494 38,771,819 36,427,774 34,051,166 31,746,029 29,582,243 27,265,834 24,774,402 22,152,582 19,289,209 16,437,528 14,037,648 11,568,003 9,613,310 7,528,145 5,698,624 4,828,467 3,691,387 2,485,000 1,280,000 $734,761,390 Total Debt Service $99,350,276 99,363,370 100,342,268 100,399,758 98,009,678 96,385,115 95,776,732 92,219,343 87,965,306 86,385,052 83,811,114 75,716,983 75,684,549 75,644,849 75,615,494 74,446,131 70,545,607 58,512,179 56,992,648 46,593,003 46,588,310 39,143,145 20,258,624 23,683,467 23,681,387 21,765,000 21,760,000 $1,846,639,388 The fiscal year ending June 30 includes the payment of principal and interest on the following day, July 1. For example, the fiscal year ending June 30, 2012, includes the January 1, 2012, interest payment and the July 1, 2012, principal and interest payment. Includes all payment made in fiscal year 2012. Excludes the impact of capitalized interest. SOURCE: Finance Department II-7 DEBT SERVICE REQUIREMENTS TO MATURITY All Categories of Debt and Other Obligations (Excluding Lease Financings) City of Glendale, Arizona As of June 30, 2011 (000's) $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Principal II-8 Interest General Obligation Bonds The general obligation bonds are direct and general obligations of the City and are payable as to both principal and interest from property taxes levied against all of the property within the City subject to taxation. Such taxes may be levied on all taxable property within the City without limitation as to rate, but are limited to statutory provisions to an amount which shall not exceed the total aggregate principal and interest requirements becoming due on the general obligation bonds from the date of issuance to the stated maturity of the general obligation bonds. The following table illustrates the outstanding General Obligation Bonded debt. OUTSTANDING GENERAL OBLIGATION BONDED DEBT1 City of Glendale, Arizona As of June 30, 2011 Year Issued Issue Various Purpose General Obligation Bonds Various Purpose General Obligation Bonds Various Purpose General Obligation Bonds Various Purpose General Obligation Bonds Refunding Bonds Various Purpose General Obligation Bonds Various Purpose General Obligation Bonds Refunding Bonds TOTAL 1 2003 2004 2005 2006 2006 2007 2009 2010 Includes $7,410,000 Water and Sewer general obligation bonds. SOURCE: Finance Department II-9 Original Amount 66,400,000 36,645,000 11,960,000 29,365,000 9,065,000 61,000,000 41,650,000 38,300,000 Balance Outstanding $18,635,000 21,955,000 5,285,000 21,545,000 7,440,000 48,140,000 40,380,000 38,300,000 $201,680,000 The following table and chart illustrate the existing debt service for the outstanding general obligation bonded debt, the majority of which is currently paid by property taxes. The remaining portion is currently paid by Developmental Impact Fees. The City will strive to maintain a debt service fund balance of at least 10% of next year’s debt service in the general obligation debt service fund. The City's June 30, 2011 fund balance was $21,250,000, which is 91% of the following year’s net debt service. DEBT SERVICE REQUIREMENTS GENERAL OBLIGATION BONDED DEBT City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 TOTAL 1 2 Principal Interest Total Debt Service $16,185,000 $9,009,153 $25,194,153 16,850,000 8,345,040 25,195,040 16,340,000 7,619,834 23,959,834 20,070,000 6,916,678 26,986,678 18,475,000 6,079,959 24,554,959 19,190,000 5,295,631 24,485,631 19,390,000 4,463,269 23,853,269 16,595,000 3,688,419 20,283,419 13,475,000 2,896,594 16,371,594 13,175,000 2,270,469 15,445,469 11,045,000 1,629,606 12,674,606 2,300,000 1,143,869 3,443,869 2,375,000 1,031,744 3,406,744 2,460,000 910,025 3,370,025 2,550,000 777,800 3,327,800 2,645,000 637,550 3,282,550 2,745,000 488,769 3,233,769 2,850,000 334,363 3,184,363 2,965,000 170,488 3,135,488 $201,680,000 $63,709,260 $265,389,260 Less Water/Sewer GO Debt Less Federal Subsidy Payments2 ($1,250,550) ($668,632) (1,258,550) (658,552) (1,260,050) (647,221) (1,249,050) (633,413) (1,236,050) (618,224) (1,226,050) (593,224) (1,213,800) (566,344) 0 (537,040) 0 (505,146) 0 (472,229) 0 (437,345) 0 (400,354) 0 (361,110) 0 (318,509) 0 (272,230) 0 (223,143) 0 (171,069) 0 (117,027) 0 (59,671) ($8,694,100) ($8,260,483) Net Payment $23,274,971 23,277,938 22,052,563 25,104,215 22,700,685 22,666,357 22,073,125 19,746,379 15,866,448 14,973,240 12,237,261 3,043,515 3,045,634 3,051,516 3,055,570 3,059,407 3,062,700 3,067,336 3,075,817 $248,434,677 The fiscal year ending June 30 includes the payment of principal and interest on the following day, July 1. For example, the fiscal year ending June 30, 2012, includes the January 1, 2012, interest payment and the July 1, 2012, principal and interest payment. Includes all payment made in fiscal year 2012. In February, 2009, the United States Congress passes the American Reinvestment and Recovery Act of 2009. A provision of this Act amended the Tax Code, allowing municipalities to issue fully taxable bonds and receive a subsidy payment directly from the Federal Treasury. Such bonds are hereinafter referred to as “Build-AmericaBonds” or “BABs.” SOURCE: Finance Department II-10 DEBT SERVICE REQUIREMENTS GENERAL OBLIGATION BONDED DEBT City of Glendale, Arizona As of June 30, 2011 (000's) $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Principal II-11 Interest Water and Sewer Revenue Bonds The water and sewer revenue bonds are special obligations of the City. The water and sewer revenue bonds and any additional parity bonds hereinafter issued are payable solely from the net revenues of the City's Water and Sewer System (the "System") and do not constitute a debt of the City within the meaning of any constitutional or statutory provision. Net revenues are calculated as operating revenues, plus non-operating revenues, less operation and maintenance expense (excluding depreciation). The master ordinance for the water and sewer revenue bonds (the "Master Ordinance") requires that there shall be paid from the net revenues of the System the amounts necessary to maintain a Reserve Account (if created) at a balance equal to the highest principal and interest coming due on the water and sewer revenue bonds together with all outstanding parity bonds in any future twelve month period. The Master Ordinance also provides that in lieu of depositing net revenues of the System into the Reserve Account, the City may purchase one or more Reserve Account surety bonds. The City has covenanted in the Master Ordinance to establish and maintain schedules of rates, fees and charges for all services supplied by the System which will be sufficient at all times to: pay current expenses of the System; produce an aggregate amount of net revenues in each fiscal year at least equal to 1.2 times the annual debt service requirement due in such fiscal year on all parity bonds then outstanding; make all required payments into bond reserve account; remedy any deficiencies in required deposits, pay debt service on any subordinate obligations, and to pay any amounts owed to the provider of the Reserve Account surety bond for the outstanding parity bonds in such fiscal year. Under the provisions of the Master Ordinance, the City may issue additional parity bonds secured by the net revenues of the System if either (1) such net revenues of the System for the preceding fiscal year shall have amounted to at least 1.2 times the maximum debt service due in any succeeding fiscal year for all the parity bonds outstanding and any parity bonds to be issued or (2) such net revenues for preceding fiscal year were not less than 1.1 times maximum debt service on all parity bonds and any parity bonds to be issued and net revenues for the first full fiscal year following the date of which the capital improvements to be financed by the proposed parity bonds are expected to be placed in operation are not expected to be less than 1.25 times maximum debt service, as evidenced by a consultant's report. As a result of an amendment to the master ordinance, the City now has the ability to issue variable rate and compound interest bonds. Adjustments in net revenues may be made in certain circumstances; restatement of debt service on variable rate and certain other types of parity debt is permitted; and refunding and compound interest bonds may be issued under different tests. In December 2003, February 2006, June 2007, March 2008, and November 2010, the City entered into a Trust Agreement with U.S. Bank N.A. as trustee whereby subordinate lien water and sewer revenue obligations were issued. The City covenanted for the benefit of the owners of all subordinate obligations, that it shall at all times establish, maintain and collect rates, fees and other charges for all services furnished by the System which will be fully sufficient at all times to produce Net Revenues which (I) will equal at least 120% of the combined debt service on all senior obligations and all subordinate obligations then outstanding (making certain adjustments in debt service or assumed debt service on variable rate or short-term senior obligations or subordinate obligations), (ii) make all required payments into the Reserve Fund established and maintained under the Trust Agreement, (iii) remedy all deficiencies in payments into any of the funds or accounts maintained under the purchase agreement from prior fiscal years and meet all requirements for debt service on any obligations payable from net revenues on a basis junior and subordinate to the subordinate obligations, and (iv) make all required payments to reserve fund guarantors. II-12 The following table illustrates the outstanding Water and Sewer Revenue Obligation debt. OUTSTANDING WATER AND SEWER BONDS/OBLIGATIONS City of Glendale, Arizona As of June 30, 2011 Year Issued Original Amount Balance Outstanding Water and Sewer Note Payable1 Water and Sewer Revenue Obligations Water and Sewer Revenue Obligations Water and Sewer Revenue Obligations Water and Sewer Revenue Obligations 2001 2003 2006 2007 2008 15,400,000 80,000,000 80,000,000 44,500,000 65,500,000 $7,502,071 77,405,000 76,545,000 40,850,000 58,555,000 Water and Sewer Note Payable2 Water and Sewer Revenue Obligations TOTAL 2010 2010 6,340,000 25,685,000 6,091,072 25,685,000 $292,633,143 Issue 1 2 Based on the amortization of $12,911,049. Based on the amortization of $6,340,000. SOURCE: Finance Department The following table illustrates water and sewer general obligation bonds, which are currently being paid from water and sewer net revenues. Net revenues from the operation of the City's water and sewer system have been and will be servicing the debt requirements of $7,410,000 aggregate principal amount of water and sewer general obligation bonds. In the event that such revenues should prove to be insufficient or the city elects not to pay debt service requirements on the general obligation bonds from revenues, this debt would become payable from property taxes. GENERAL OBLIGATION BONDS CURRENTLY PAID FROM WATER AND SEWER SYSTEM REVENUES City of Glendale, Arizona As of June 30, 2011 Issue General Obligation Bonds Year Issued Original Amount Balance Outstanding 2003 13,875,000 $7,410,000 $7,410,000 TOTAL SOURCE: Finance Department II-13 The following table and chart illustrate the debt service for the revenue and general obligation water and sewer bonds/obligations. COMBINED DEBT SERVICE REQUIREMENTS WATER AND SEWER BONDS/OBLIGATIONS City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 TOTAL 1 Water and Sewer Revenue Principal Interest $11,551,954 11,998,417 12,541,207 13,120,375 13,745,969 14,383,043 15,061,651 15,746,849 16,111,487 16,209,278 16,964,948 18,870,954 19,742,306 20,674,015 21,671,092 21,583,549 18,856,398 6,979,651 6,820,000 $292,633,143 $13,895,459 13,460,139 12,932,787 12,371,962 11,765,123 11,139,614 10,484,552 9,812,566 9,105,448 8,353,299 7,602,868 6,835,180 5,967,992 5,034,705 4,046,713 3,010,773 1,886,270 872,740 446,710 $149,024,900 General Obligation Water and Sewer Principal Interest Total Debt Service $925,000 970,000 1,020,000 1,060,000 1,100,000 1,145,000 1,190,000 0 0 0 0 0 0 0 0 0 0 0 0 $7,410,000 $26,697,963 26,717,106 26,734,044 26,741,387 26,747,142 26,748,707 26,760,003 25,559,415 25,216,935 24,562,577 24,567,816 25,706,134 25,710,298 25,708,720 25,717,805 24,594,322 20,742,668 7,852,391 7,266,710 $450,352,143 $325,550 288,550 240,050 189,050 136,050 81,050 23,800 0 0 0 0 0 0 0 0 0 0 0 0 $1,284,100 The fiscal year ending June 30 includes the payment of principal and interest on the following day, July 1. For example, the fiscal year ending June 30, 2012, includes the January 1, 2012, interest payment and the July 1, 2012, principal and interest payment. Includes all payments made in fiscal year 2012. SOURCE: Finance Department II-14 The following chart illustrates the principal and interest associated with the existing water and sewer revenue bonds/obligations. COMBINED DEBT SERVICE REQUIREMENTS WATER AND SEWER REVENUE BONDS/OBLIGATIONS City of Glendale, Arizona As of June 30, 2011 (000's) $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Principal II-15 Interest The following chart illustrates future debt service of both water and sewer revenue and general obligation bonds/obligations. COMBINED DEBT SERVICE REQUIREMENTS REVENUE AND GENERAL OBLIGATION DEBT SERVICE City of Glendale, Arizona As of June 30, 2011 (000's) $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 G.O. Debt Service Revenue Debt Service II-16 WATER AND SEWER REVENUE BOND HISTORICAL COVERAGE City of Glendale, Arizona As of June 30, 2011 (000's) Gross Revenues1 2 Operating and Maintenance Expenses Net Revenues Available for Debt Service Total Debt Service Requirements Coverage Factor 1 2 3 2006-07 Actual 2007-08 Actual 2008-09 Actual 2009-10 Actual 2010-11 Actual $66,646 $69,490 $69,312 $76,987 $81,127 (40,825) $25,821 15,583 (44,247) $25,243 19,169 (39,420) $29,892 23,524 (43,628) $33,359 21,107 (41,550) $39,577 24,756 1.66x 1.32x 1.27x 1.58x 1.60x Operating revenues and non-operating revenues excluding non-cash contributions, gains and losses. Excludes depreciation and non-operating expenses. Principal and interest amounts include debt service on the note payable to the Waste Infrastructure Financing Authority of Arizona for the 2001 and 2011 loans. The City used its 1961 Revenue Bond authorization and 1987 Revenue Bond authorization in obtaining these loans. Therefore, this table includes the loan activity to calculate revenue bond coverage. SOURCE: Finance Department REMAINDER OF PAGE INTENTIONALLY LEFT BLANK II-17 The following table illustrates the City's ability to pay the debt from water and sewer net revenues. WATER AND SEWER BONDS/OBLIGATIONS DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE City of Glendale, Arizona As of June 30, 2011 1 2 3 Fiscal Year Ending June 301 Water and Sewer Net Revenues2 (A) Existing Revenue Debt Service (B) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 $39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 $25,447,413 25,458,555 25,473,994 25,492,337 25,511,093 25,522,657 25,546,203 25,559,415 25,216,935 24,562,577 24,567,816 25,706,134 25,710,298 25,708,720 25,717,806 24,594,322 20,742,668 7,852,391 7,266,710 Revenue Debt Only Annual Coverage (C)=(A/B) 1.56 1.55 1.55 1.55 1.55 1.55 1.55 1.55 1.57 1.61 1.61 1.54 1.54 1.54 1.54 1.61 1.91 5.04 5.45 Existing G.O. Debt Service3 (D) Total Debt Service (Revenue + G.O.) (E)=(B+D) $1,250,550 1,258,550 1,260,050 1,249,050 1,236,050 1,226,050 1,213,800 0 0 0 0 0 0 0 0 0 0 0 0 $26,697,963 26,717,105 26,734,044 26,741,387 26,747,143 26,748,707 26,760,003 25,559,415 25,216,935 24,562,577 24,567,816 25,706,134 25,710,298 25,708,720 25,717,806 24,594,322 20,742,668 7,852,391 7,266,710 Total Debt Service (Revenue + G.O.) Annual Coverage (F)=(A/E) 1.48 1.48 1.48 1.48 1.48 1.48 1.48 1.55 1.57 1.61 1.61 1.54 1.54 1.54 1.54 1.61 1.91 5.04 5.45 Includes all payments made in fiscal year 2012. Net revenues are calculated as operating revenues, plus non-operating revenues, less operation and maintenance expense (excluding depreciation and non-operating expenses) for fiscal year 2011. Net revenues from the operation of the City's water and sewer system have been and will be servicing the debt requirements of $7,410,000 aggregate principal amount of water and sewer general obligation bonds. In the event that such revenues should prove to be insufficient or the City elects not to pay debt service requirements on the general obligation bonds from revenues, this debt would become payable from property taxes. SOURCE: Finance Department II-18 Street and Highway User Revenue Bonds The street and highway user revenue bonds are special obligations of the City. The street and highway user revenue bonds are payable from taxes, fees, charges and other moneys collected by the State and returned to the City for street and highway purposes pursuant to Section 28-1598 of the Arizona Revised Statutes (all such revenue referred to collectively as "Highway User Tax Revenues"). The City reserves the right to issue additional street and highway user revenue bonds which will be paid on a parity basis with the outstanding street and highway user revenue bonds. Parity bonds may be issued if the revenues pledged for payment of the bonds for the preceding twelve-month period exceeds by two times the maximum annual debt service of the existing and proposed bonds. The street and highway user revenue bonds do not constitute a debt of the City within the meaning of any constitutional, charter or statutory provisions and the holders of the street and highway user revenue bonds will have no right to compel the exercise of the taxing power of the City to pay the principal of or interest on the street and highway user revenue bonds. Under the provisions of Section 48-681 of the Arizona Revised Statutes, an incorporated city or town may borrow money and issue bonds for the purpose of improving, constructing, reconstructing, acquiring rights-of-way for or maintaining municipal streets and highways. Principal of and interest on bonds issued for such purposes are secured by a pledge of and lien on all revenues received by the city or town issuing the bonds derived from Highway User Tax Revenues. Highway User Tax Revenues are derived and distributed pursuant to a highway and transportation financing program established by the State Legislature for the benefit of the State, counties within the State and incorporated cities and towns within the State, including the City. The Highway User Tax Revenues are held until distributed in the State highway user revenue fund (the "Arizona Highway Revenue Fund"). Highway User Tax Revenues include a number of sources of revenue. Certain fees and other moneys paid to the motor vehicle division of the Arizona Department of Transportation ("ADOT" or the "Department") constitute Highway User Tax Revenues including, but not limited to, motor vehicle fees, gross weight fees on commercial vehicles, commercial and fleet vehicle registration fees, highway user taxes on commercial vehicles, non-commercial registration fees, license fees, non-resident registration fees, motor vehicle dealer and wrecker fees and charges, motor vehicle and vehicle service transporter fees and taxes and moneys generated from sales, penalties and other charges in connection with abandoned vehicles. The Arizona Legislature has in the past altered and may in the future alter (1) the type and/or rate of taxes, fees and charges to be deposited into the Arizona Highway Revenue Fund and (2) the allocation of such moneys among ADOT, cities, counties and other purposes. II-19 The following table illustrates the outstanding Street and Highway User Revenue debt. OUTSTANDING STREET AND HIGHWAY USER REVENUE BONDS City of Glendale, Arizona As of June 30, 2011 Issue Street and Highway Bonds Street and Highway Bonds Year Issued Original Amount Balance Outstanding 2004 2006 14,655,000 15,745,000 $7,580,000 8,710,000 $16,290,000 TOTAL SOURCE: Finance Department The following table and chart illustrate the existing debt service for the Street and Highway User Revenue Bonds. DEBT SERVICE REQUIREMENTS STREET AND HIGHWAY USER REVENUE BONDS City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 2012 2013 2014 2015 2016 TOTAL 1 Principal Interest $4,040,000 4,195,000 4,355,000 1,805,000 1,895,000 $16,290,000 $656,338 503,869 330,875 148,000 75,800 $1,714,882 Total Debt Service $4,696,338 4,698,869 4,685,875 1,953,000 1,970,800 $18,004,882 The fiscal year ending June 30 includes the payment of principal and interest on the following day, July 1. For example, the fiscal year ending June 30, 2012, includes the January 1, 2012, interest payment and the July 1, 2012, principal and interest payment. Includes all payments made in fiscal year 2012. SOURCE: Finance Department II-20 The following chart illustrates the principal and interest associated with the existing Street and Highway User Revenue Bonds. DEBT SERVICE REQUIREMENTS STREET AND HIGHWAY USER REVENUE BONDS City of Glendale, Arizona As of June 30, 2011 (000's) $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 2012 2013 2014 Principal II-21 2015 Interest 2016 The following table illustrates historical City receipts of Highway User Tax Revenues, actual debt service on the City's street and highway user revenue bonds and coverage. STREET AND HIGHWAY USER REVENUE BONDS HISTORICAL COVERAGE City of Glendale, Arizona As of June 30, 2011 2006-07 Actual Revenues Total Debt Service Requirements 2007-08 Actual 2008-09 Actual 2009-10 Actual 2010-11 Actual $17,324,000 $16,647,000 $14,575,000 $13,776,000 $13,843,000 4,704,000 4,704,644 4,698,656 4,698,656 4,690,188 Coverage Factor 3.68x 3.54x 3.10x 2.93x 2.95x SOURCE: Finance Department The following table illustrates future coverage of the outstanding Street and Highway User Revenue Bonds. It is the City's policy that debt service on street and highway user revenue bonds not exceed 45% of pledged revenues. STREET AND HIGHWAY USER REVENUE BONDS DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE City of Glendale, Arizona As of June 30, 2011 1 Fiscal Year Ending June 301 Highway User Tax Revenues of the City (A) Outstanding Highway Bonds (B) Annual Coverage (C)=(A/B) 2012 2013 2014 2015 2016 $13,843,000 13,843,000 13,843,000 13,843,000 13,843,000 $4,696,338 4,698,869 4,685,875 1,953,000 1,970,800 2.95 2.95 2.95 7.09 7.02 Percent of Revenues Used (D)/(B/A) 33.93% 33.94 33.85 14.11 14.24 The fiscal year ending June 30 includes the payment of principal and interest on the following day, July 1. For example, the fiscal year ending June 30, 2012, includes the January 1, 2012, interest payment and the July 1, 2012, principal and interest payment. Includes all payments made in fiscal year 2012. SOURCE: Finance and Budget Departments II-22 Transportation Excise Tax Revenue Obligations The Transportation Excise Tax Revenue Obligations are special revenue obligations, payable solely from payments to be paid by the City under the Purchase Agreement. The Obligations, the Purchase Agreement, and the obligation to make payments there under do not represent or constitute a general obligation of the City, the State, or any of its political subdivisions. Under the terms of the Trust Agreement, the Obligations are payable by the Trustee from and secured by: (A) payments received by the Trustee from the City under the Purchase Agreement, and (B) amounts from time to time deposited in the funds created under the Trust Agreement and investment earnings on such funds (except for any investment earnings that are required to be rebated to. the United States in order to continue the exclusion of the interest payable on the Obligations from gross income for federal income tax purposes). The Obligations are not secured by any lien on, or in any other way by, the Improvement. The payments required to be made by the City to the Trustee under the Purchase Agreement are secured by a pledge by the City of a 0.50% transportation excise tax (the “Transportation Excise Taxes”) collected and paid to the City and approved by the voters of the City on November 6, 2001. The Transportation Excise Taxes are restricted to public transportation use, and are levied by the City upon persons on account of their business activities within the City. The amount of taxes due are calculated by applying the 0.50% tax rate against the gross proceeds of sales or gross income derived from the business activities. Such taxes are collected by the City on a monthly basis. The Trust Agreement establishes a Reserve Fund to secure payment of the Obligations, but provides that no deposits need to be made into the Reserve Fund for the Obligations if the Transportation Excise Taxes (as set forth in the City’s audited financial statements) collected for the preceding fiscal year are at least 1.75 times the highest combined Debt Service (as defined below) on all Parity Obligations for the current or any future fiscal year. In the event that the Transportation Excise Taxes collected for the preceding fiscal year are less than 1.75 times the highest combined Debt Service on all Parity Obligations for the current or any future fiscal year, the City is required to deposit into the Reserve Fund, on the first day of each month, 1/36 of such highest combined annual Debt Service on the Parity Obligations, except for any Parity Obligations for which a separate reserve fund is established or for which no reserve fund is required, until the amount in the Reserve Fund equals the Reserve Fund Requirement. Once the Reserve Fund is funded, it will remain funded. In the Purchase Agreement, the City covenants and agrees that, so long as any of the Obligations remain outstanding and the principal and interest thereon shall be unpaid or unprovided for, it will not further encumber the Transportation Excise Taxes on a parity basis unless the Transportation Excise Taxes actually collected in 12 consecutive months out of the 18 months immediately preceding the issuance of the Additional Parity Obligations, as certified by the Chief Financial Officer of the City, shall have amounted to at least two times the highest combined Debt Service for any succeeding fiscal year for all Obligations and Additional Parity Obligations, including the Additional Parity Obligations then proposed to be secured by a pledge of the Transportation Excise Taxes. Subject to the foregoing and the other terms and conditions of the Purchase Agreement, the City shall have the right to issue future obligations payable from and secured by the Transportation Excise Taxes on parity with the Obligations. II-23 The following table illustrates the outstanding Transportation Excise Tax Revenue Obligations debt. OUTSTANDING TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS City of Glendale, Arizona As of June 30, 2011 Issue Transportation Excise Tax Revenue Obligations TOTAL Year Issued Original Amount Balance Outstanding 2007 109,110,000 $97,035,000 $97,035,000 SOURCE: Finance Department REMAINDER OF PAGE INTENTIONALLY LEFT BLANK II-24 The following table and graph illustrate the existing debt service for the Transportation Excise Tax Revenue Obligations. DEBT SERVICE REQUIREMENTS TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 TOTAL 1 Principal Interest $2,890,000 3,005,000 3,125,000 3,250,000 3,380,000 3,550,000 3,730,000 3,915,000 4,070,000 4,235,000 4,405,000 4,585,000 4,815,000 5,055,000 5,310,000 5,575,000 5,855,000 6,145,000 6,420,000 6,710,000 7,010,000 $97,035,000 $4,436,881 4,321,281 4,201,081 4,076,081 3,946,081 3,777,081 3,599,581 3,413,081 3,256,481 3,093,681 2,924,281 2,742,575 2,513,325 2,272,525 2,019,825 1,754,325 1,475,575 1,182,825 906,300 617,400 315,450 $56,845,716 Total Debt Service $7,326,881 7,326,281 7,326,081 7,326,081 7,326,081 7,327,081 7,329,581 7,328,081 7,326,481 7,328,681 7,329,281 7,327,575 7,328,325 7,327,525 7,329,825 7,329,325 7,330,575 7,327,825 7,326,300 7,327,400 7,325,450 $153,880,716 The fiscal year ending June 30 includes the payment of principal and interest on the following day, July 1. For example, the fiscal year ending June 30, 2012, includes the January 1, 2012, interest payment and the July 1, 2012, principal and interest payment. Includes all payments made in fiscal year 2012. SOURCE: Finance Department II-25 The following chart illustrates the principal and interest associated with the existing Transportation Excise Tax Revenue Obligations. DEBT SERVICE REQUIREMENTS TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS City of Glendale, Arizona As of June 30, 2011 (000's) $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Principal II-26 Interest The following table illustrates historical City receipts of Transportation Excise Tax Revenues, actual debt service on the City's Transportation revenue obligations and coverage. TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS HISTORICAL COVERAGE City of Glendale, Arizona As of June 30, 2011 2006-07 Actual Revenues Total Debt Service Requirements 2007-08 Actual 2008-09 Actual 2009-10 Actual 2010-11 Actual $25,051,000 $23,672,000 $20,875,000 $19,488,000 $19,486,000 n/a 7,329,803 7,327,331 7,330,081 7,328,081 Coverage Factor 3.23x 2.85x SOURCE: Finance Department REMAINDER OF PAGE INTENTIONALLY LEFT BLANK II-27 2.66x 2.66x The following table illustrates estimated future coverage of the outstanding Transportation Excise Tax Revenue Obligations. TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 1 Transportation Excise Tax Revenues of the City (A) Outstanding Transportation Excise Tax Obligations Debt Service (B) $19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 $7,326,881 7,326,281 7,326,081 7,326,081 7,326,081 7,327,081 7,329,581 7,328,081 7,326,481 7,328,681 7,329,281 7,327,575 7,328,325 7,327,525 7,329,825 7,329,325 7,330,575 7,327,825 7,326,300 7,327,400 7,325,450 Annual Coverage (C)=(A/B) 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 Percent of Revenues Used (D)/(B/A) 37.60% 37.60 37.60 37.60 37.60 37.60 37.61 37.61 37.60 37.61 37.61 37.60 37.61 37.60 37.62 37.61 37.62 37.61 37.60 37.60 37.59 The fiscal year ending June 30 includes the payment of principal and interest on the following day, July 1. For example, the fiscal year ending June 30, 2012, includes the January 1, 2012, interest payment and the July 1, 2012, principal and interest payment. Includes all payments made in fiscal year 2012. SOURCE: Finance and Budget Departments II-28 Excise Tax Debt Municipal Property Corporation The Municipal Property Corporation, or MPC, is a non-profit organization over which the City exercises an oversight authority, including the appointment of its governing board. The City may enter into an agreement with a Municipal Property Corporation, under which the corporation sells bonds and pays for a capital improvement, with the improvement ultimately being purchased from the corporation by the City over a period of years. In order for the MPC to market its bonds, the City typically pledges unrestricted excise taxes. Unrestricted excise taxes are generally all excise, transaction privilege, franchise and income taxes which the City now collects or may collect in the future, and which are allocated or apportioned to the City by the State, except for any excise, transaction privilege, franchise and income taxes which under Arizona law must be spent for other purposes, such as the motor vehicle fuel tax, or taxes which have been approved at an election within the City and restricted to certain uses, such as the City’s existing public safety tax and transportation tax. The senior lien bond holders have priority for payment over the subordinate lien bond holders. The City has covenanted with senior lien bond holders that unrestricted excise tax revenues will remain at least three times greater than the amount of debt service on senior lien bonds in any given year. The City has covenanted with subordinate lien bond holders that unrestricted excise taxes will remain at least two times greater than the amount of debt service on senior lien and subordinate lien debt service in any given year. The City further pledges that, before entering into an agreement with the MPC, actual annual excise tax collections will be at least three times the maximum annual debt service payment for all senior MPC bonds. For subordinate bond issues, this test is two times maximum annual debt service on all MPC excise tax bonded obligations. A limitation is the fact that payments to the MPC or PFC (discussed below) for bond debt service compete for resources with the operating budget. The City is obligated to make payments necessary for MPC and PFC debt service, irrespective of revenues generated by specific projects. MPC and PFC bonds do not constitute a general obligation of the City. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK II-29 The following table illustrates the outstanding Municipal Property Corporation debt. OUTSTANDING MUNICIPAL PROPERTY BONDS City of Glendale, Arizona As of June 30, 2011 Year Issued Original Amount Senior Lien Excise Tax Bonds Senior Lien Bonds Series 2003A Senior Lien Bonds Series 2003B Senior Lien Bonds Series 2004A Senior Lien Bonds Series 2006A Senior Lien Bonds Series 2008A Senior Lien Bonds Series 2008B Senior Lien Bonds Series 2008C Total Senior Lien Bonds 2003 2003 2004 2006 2008 2008 2008 49,940,000 105,260,000 10,880,000 33,250,000 32,315,000 56,780,000 9,140,000 $44,400,000 96,065,000 5,295,000 28,360,000 32,220,000 51,075,000 5,650,000 $263,065,000 Subordinate Lien Excise Tax Bonds Subordinate Lien Bonds Series 2002B Subordinate Lien Bonds Series 2003D Total Subordinate Lien Bonds 2002 2003 5,055,000 7,250,000 $5,055,000 7,250,000 $12,305,000 Issue GRAND TOTAL Balance Outstanding $275,370,000 SOURCE: Finance Department REMAINDER OF PAGE INTENTIONALLY LEFT BLANK II-30 The following table illustrates the projects financed by the existing Municipal Property Corporation debt. MPC DEBT FINANCING SUMMARY City of Glendale, Arizona As of June 30, 2011 Debt Issue Use of Proceeds 2002B Certificates of Participation - Refinanced certain outstanding certificates and financed a portion of the cost to construct and equip the Glendale Arena - Paid for the majority of the cost to construct, equip and furnish the Glendale Arena - Refinanced certain of the 2003B Bonds - Refinanced certain City special improvement district bonds for interest rate savings - To develop, construct, and equip a public safety training facility and construct City infrastructure improvements - To build a hotel convention/media center and parking garage, and related costs - To finance Cabelas development infrastructure and related costs 2003A and 2003B Bonds 2003D Certificates of Participation 2004 Bonds 2006A Bonds 2008A and 2008B Bonds 2008C Bonds Other Excise Tax Pledges Cardinal Stadium Infrastructure - Pledged Excise Taxes to the AzSTA on a subordinate basis in an amount equal to the excise taxes generated by the Stadium and surrounding stadium parking area, other than excise taxes generated by commercial development on such property. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK II-31 The following table and graph illustrate the debt service for the outstanding Municipal Property Corporation Bonds. DEBT SERVICE REQUIREMENTS MUNICIPAL PROPERTY CORPORATION BONDS1 City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 TOTAL 1 2 Principal Interest $6,990,000 7,335,000 7,680,000 6,235,000 6,665,000 9,360,000 9,870,000 10,420,000 11,005,000 11,630,000 12,235,000 12,880,000 14,185,000 14,985,000 15,845,000 14,095,000 14,935,000 15,865,000 16,780,000 17,750,000 18,770,000 19,855,000 $275,370,000 $13,985,921 13,680,974 13,350,943 12,976,458 12,658,959 12,330,614 11,875,466 11,381,737 10,849,715 10,287,252 9,730,938 9,142,547 8,484,128 7,738,342 6,936,509 6,089,276 5,309,206 4,482,327 3,621,899 2,711,130 1,750,966 716,237 $190,091,544 Total Debt Service $20,975,921 21,015,974 21,030,943 19,211,458 19,323,959 21,690,614 21,745,466 21,801,737 21,854,715 21,917,252 21,965,938 22,022,547 22,669,128 22,723,342 22,781,509 20,184,276 20,244,206 20,347,327 20,401,899 20,461,130 20,520,966 20,571,237 $465,461,544 Excludes the pledge of excise taxes to the AzSTA. The fiscal year ending June 30 includes the payment of principal and interest on the following day, July 1. For example, the fiscal year ending June 30, 2012, includes the January 1, 2012, interest payment and the July 1, 2012, principal and interest payment. Includes all payments made in fiscal year 2012. SOURCE: Finance Department II-32 The following chart illustrates the principal and interest associated with the existing Municipal Property Corporation Bonds. DEBT SERVICE REQUIREMENTS MUNICIPAL PROPERTY CORPORATION BONDS City of Glendale, Arizona As of June 30, 2011 (000's) $25,000 $20,000 $15,000 $10,000 $5,000 $0 Principal II-33 Interest The following table illustrates historical City receipts of Unrestricted Excise Tax Revenues and actual debt service on the City's lease payment obligations secured by such Unrestricted Excise Tax collections. MUNICIPAL PROPERTY CORPORATION HISTORICAL COVERAGE City of Glendale, Arizona As of June 30, 2011 2006-07 Actual Sales Tax Revenues Licenses and Permits Intergovernmental Total Pledged Revenues Percent Growth MPC Bond Debt Service Requirements Coverage Factor 2007-08 Actual 2008-09 Actual 2009-10 Actual 2010-11 Actual $67,757,819 $65,565,161 $57,377,810 $53,807,689 $54,884,920 5,290,087 5,461,325 5,311,481 5,129,340 5,231,954 50,554,072 56,346,039 55,587,678 49,078,733 42,028,525 $123,601,978 $127,372,525 $118,276,969 $108,015,762 $102,145,399 ----3.05% -7.14% -8.68% -5.43% 25,530,446 25,016,000 21,344,675 20,400,942 21,186,006 4.84x 5.09x 5.54x SOURCE: Finance Department REMAINDER OF PAGE INTENTIONALLY LEFT BLANK II-34 5.29x 4.82x Based on the City’s Unrestricted Excise Tax collections of $102,145,399 for the fiscal year ending June 30, 2011, the following tables set forth the percentage of the City’s aggregate lease payment obligations secured by such Unrestricted Excise Tax collections. MUNICIPAL PROPERTY CORPORATION SENIOR DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE City of Glendale, Arizona As of June 30, 2011 1 2 Fiscal Year Ending July 1 Excise Tax Revenues1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 $102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 2003 Bonds Debt Service 2004A Bonds Debt Service 2006A Bonds Debt Service 2008A Bonds Debt Service 2008B Bonds Debt Service 2008C Bonds Debt Service Total Senior Debt Service $9,126,716 9,142,289 9,194,016 9,247,856 9,305,396 11,674,406 11,729,126 11,783,272 11,841,024 11,896,312 11,948,728 12,004,408 12,648,535 12,707,170 12,762,212 12,819,452 12,877,274 12,073,946 12,125,306 12,185,353 12,247,087 5,048,584 $1,929,750 1,946,500 1,958,250 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $2,650,950 2,653,788 2,650,563 2,652,313 2,650,313 2,654,563 2,652,313 2,653,813 2,650,813 2,653,313 2,651,188 2,650,450 2,655,325 2,650,475 2,651,125 0 0 0 0 0 0 0 $1,462,256 1,462,256 1,462,256 1,702,256 2,802,656 2,803,656 2,807,456 2,813,856 2,812,656 2,814,056 2,815,788 2,807,475 2,802,975 2,804,225 2,805,725 2,802,225 2,803,725 2,799,725 2,802,175 2,804,675 1,672,000 0 $3,546,071 3,790,475 4,040,174 4,299,081 4,305,832 4,298,226 4,296,809 4,291,034 4,290,460 4,293,808 4,290,472 4,300,452 4,302,531 4,301,710 4,302,685 4,302,836 4,303,445 4,303,894 4,303,568 4,301,852 5,433,129 7,101,903 $2,000,416 1,760,905 1,465,922 1,050,190 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $20,716,159 20,756,213 20,771,181 18,951,696 19,064,197 21,430,851 21,485,704 21,541,975 21,594,953 21,657,489 21,706,176 21,762,785 22,409,366 22,463,580 22,521,747 19,924,513 19,984,444 19,177,565 19,231,049 19,291,880 19,352,216 12,150,487 Represents 2011 Unrestricted Excise Tax Revenues; does not include Public Safety Tax or Transportation Tax. Coverage based upon maximum annual debt service compared to Unrestricted Excise Taxes collected for the 2010-11 fiscal year. Source: City Finance Department II-35 Coverage on Senior Debt2 4.93 4.92 4.92 5.39 5.36 4.77 4.75 4.74 4.73 4.72 4.71 4.69 4.56 4.55 4.54 5.13 5.11 5.33 5.31 5.29 5.28 8.41 MUNICIPAL PROPERTY CORPORATION SENIOR AND SUBORDINATE DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending July 1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Excise Tax Revenues1 $102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 102,145,399 2002 and 2003 Subordinate Debt Service2 $600,513 600,513 600,513 600,513 600,513 600,513 600,513 600,513 600,513 600,513 600,513 600,513 600,513 600,513 600,513 600,513 600,513 1,486,056 1,485,800 1,484,750 1,483,000 8,563,250 Combined Senior and Subordinate Bonds3 $21,316,672 21,356,726 21,371,694 19,552,209 19,664,710 22,031,364 22,086,217 22,142,488 22,195,466 22,258,002 22,306,689 22,363,298 23,009,879 23,064,093 23,122,260 20,525,026 20,584,957 20,663,621 20,716,849 20,776,630 20,835,216 20,713,737 Coverage on Excise Tax Revenues (Including Sales Tax Senior and Subordinate Derived from Certain Stadium Revenues)4 Bonds 4.79 4.78 4.78 5.22 5.19 4.64 4.62 4.61 4.60 4.59 4.58 4.57 4.44 4.43 4.42 4.98 4.96 4.94 4.93 4.92 4.90 4.93 $102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 - footnotes shown on following page - II-36 Subordinate Payments to AzSTA5 $816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 816,388 Combined Senior and Subordinate Debt Service (Including Payments to AzSTA) $22,133,060 22,173,114 22,188,082 20,368,597 20,481,098 22,847,752 22,902,605 22,958,876 23,011,854 23,074,390 23,123,077 23,179,686 23,826,267 23,880,481 23,938,648 21,341,414 21,401,345 21,480,009 21,533,237 21,593,018 21,651,604 21,530,125 Coverage on Senior & Sub. Debt 4.65 4.64 4.64 5.05 5.03 4.51 4.50 4.48 4.47 4.46 4.45 4.44 4.32 4.31 4.30 4.82 4.81 4.79 4.78 4.77 4.76 4.78 1 2 3 4 5 Represents 2011 Unrestricted Excise Tax Revenues; does not include Public Safety Tax or Transportation Tax. Represents annual rental payments by the City which are due on the January 1 and July 1 preceding each Interest Payment Date of the 2002 and 2003 Subordinate Obligations. Includes Senior Debt Service Table on previous page. Calculated by adding estimated payments to AzSTA to Excise Tax Revenues. See footnote 5 below. Estimated annual payments to AzSTA. Payments are limited to the amount of Unrestricted Excise Tax revenue generated at the NFL stadium and certain property surrounding the NFL stadium. Source: City Finance Department Western Loop 101 Public Facilities Corporation The Western Loop 101 Public Facilities Corporation, or PFC, is a non-profit corporation organized under the Laws of the State of Arizona on December 11, 2007 initially for the purpose of assisting the City in the financing of facilities and related infrastructure improvements for a Major League Baseball spring training facility and related infrastructure. So long as any senior excise tax obligations or subordinate excise tax obligations remain outstanding, the City will not permit the PFC to issue bonds other than bonds which are payable from unrestricted excise taxes on a basis junior and subordinate to the pledge in favor of such senior excise tax obligations and subordinate excise tax obligations. The City maintains significant oversight of the PFC, including appointment of members to the board. The ordinances adopted by the City Council which authorized the formation of the PFC limit it to issuing not more than $200,000,000 of bonds. The City is not prohibited from amending the ordinances and expanding the eligible purposes of the PFC or the amount of bonds which may be issued. In 2008, the PFC issued $199,750,000 in third-lien excise tax revenue obligations for construction of a spring training facility for the Chicago White Sox and Los Angeles Dodgers. The facility began hosting spring training for the teams in 2009. Bonds of the PFC are secured by a third lien pledge of unrestricted City sales and excise taxes. Senior and second-lien MPC bondholders have priority of payment over bondholders of the PFC. The following table outlines the outstanding Public Facilities Corporation debt. OUTSTANDING PUBLIC FACILITIES CORPORATION BONDS City of Glendale, Arizona As of June 30, 2011 Year Issued Issue Third Lien Excise Tax Revenue Bonds Third Lien Excise Tax Revenue Bonds Series 2008A Third Lien Excise Tax Revenue Bonds Series 2008B Third Lien Excise Tax Revenue Bonds Series 2008C TOTAL SOURCE: Finance Department II-37 2008 2008 2008 Original Amount $137,495,000 48,670,000 13,585,000 Balance Outstanding $137,495,000 48,670,000 13,585,000 $199,750,000 The following table and chart illustrate the debt service for the outstanding Public Facilities Corporation Bonds. DEBT SERVICE REQUIREMENTS PUBLIC FACILITIES CORPORATION BONDS City of Glendale, Arizona As of June 30, 2011 1 Fiscal Year Ending June 301 Principal Interest Less: Stabilization Fund Balance & Capitalized Interest 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 TOTAL $0 0 2,940,000 4,975,000 5,240,000 3,270,000 3,405,000 3,550,000 3,705,000 3,855,000 4,035,000 4,215,000 3,820,000 3,995,000 4,210,000 7,090,000 7,510,000 8,825,000 8,505,000 9,040,000 9,615,000 10,115,000 12,850,000 17,080,000 18,145,000 19,280,000 20,480,000 $199,750,000 $13,010,663 13,010,663 13,010,663 12,790,163 12,417,038 12,024,038 11,828,788 11,630,050 11,421,675 11,211,050 10,982,275 10,742,800 10,489,900 10,260,700 9,991,500 9,707,800 9,227,688 8,716,688 8,098,938 7,503,588 6,870,788 6,197,738 5,489,688 4,686,563 3,619,063 2,485,000 1,280,000 $248,705,508 ($12,630,663) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ($12,630,663) Total Debt Service $380,000 13,010,663 15,950,663 17,765,163 17,657,038 15,294,038 15,233,788 15,180,050 15,126,675 15,066,050 15,017,275 14,957,800 14,309,900 14,255,700 14,201,500 16,797,800 16,737,688 17,541,688 16,603,938 16,543,588 16,485,788 16,312,738 18,339,688 21,766,563 21,764,063 21,765,000 21,760,000 $435,824,845 The fiscal year ending June 30 includes the payment of principal and interest on the following day, July 1. For example, the fiscal year ending June 30, 2012, includes the January 1, 2012, interest payment and the July 1, 2012, principal and interest payment. Includes all payments made in fiscal year 2012. SOURCE: Finance Department II-38 The following chart illustrates the principal and interest associated with the existing Public Facilities Corporation Bonds. DEBT SERVICE REQUIREMENTS PUBLIC FACILITIES CORPORATION BONDS City of Glendale, Arizona As of June 30, 2011 (000's) $25,000 $20,000 $15,000 $10,000 $5,000 $0 Principal II-39 Interest ALL UNRESTRICTED EXCISE TAX OBLIGATIONS DEBT SERVICE REQUIREMENTS AND DEBT SERVICE COVERAGE City of Glendale, Arizona As of June 30, 2011 Excise Tax Combined Senior Revenues (Including and Subordinate Fiscal Year Sales Tax Derived Debt Service Ending from Certain (Including Payments July 1 Stadium Revenues) to AZSTA) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 TOTAL 1 $102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 $22,133,060 22,173,114 22,188,082 20,368,597 20,481,098 22,847,752 22,902,605 22,958,876 23,011,854 23,074,390 23,123,077 23,179,686 23,826,267 23,880,481 23,938,648 21,341,414 21,401,345 21,480,009 21,533,237 21,593,018 21,651,604 21,530,125 816,388 816,388 816,388 816,388 816,388 Third Lien Western Loop 101 Public Facilities Corporation Debt1 2008A Bonds Debt Service $260,347 8,913,913 8,913,913 8,913,913 8,913,913 11,013,913 11,302,913 11,262,013 11,219,513 11,166,963 11,136,263 11,082,163 10,605,563 10,566,363 10,519,863 12,432,163 12,375,363 12,951,863 12,260,813 12,216,213 12,173,963 12,046,963 13,544,063 16,075,938 16,072,500 16,070,000 16,070,313 $310,081,684 2008B Bonds Debt Service $89,895 3,077,875 3,077,875 3,077,875 3,077,875 3,817,875 3,930,875 3,918,038 3,907,163 3,899,088 3,881,013 3,875,638 3,704,338 3,689,338 3,681,638 4,365,638 4,362,325 4,589,825 4,343,125 4,327,375 4,311,825 4,265,775 4,795,625 5,690,625 5,691,563 5,695,000 5,689,688 $108,834,788 Includes impact of capitalized interest on the 2008 Bonds. SOURCE: Finance Department II-40 2008C Bonds Debt Service $29,758 1,018,875 3,958,875 5,773,375 5,665,250 462,250 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $16,908,383 Combined Senior, Subordinate, & Coverage on Third Lien Debt Senior, Total Third Lien (Including Payments Subordinate, & Bonds Debt Service to AzSTA) Third Lien Debt $380,000 13,010,663 15,950,663 17,765,163 17,657,038 15,294,038 15,233,788 15,180,051 15,126,676 15,066,051 15,017,276 14,957,801 14,309,901 14,255,701 14,201,501 16,797,801 16,737,688 17,541,688 16,603,938 16,543,588 16,485,788 16,312,738 18,339,688 21,766,563 21,764,063 21,765,000 21,760,001 $435,824,855 $22,513,060 35,183,777 38,138,745 38,133,760 38,138,136 38,141,790 38,136,393 38,138,927 38,138,530 38,140,441 38,140,353 38,137,487 38,136,168 38,136,182 38,140,149 38,139,215 38,139,033 39,021,697 38,137,175 38,136,606 38,137,392 37,842,863 19,156,076 22,582,951 22,580,451 22,581,388 22,576,389 4.57 2.93 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.64 2.70 2.70 2.70 2.72 5.37 4.56 4.56 4.56 4.56 The following chart illustrates the principal and interest associated with the existing Municipal Property Corporation Bonds and Public Facilities Corporation Bonds. DEBT SERVICE REQUIREMENTS ALL UNRESTRICTED EXCISE TAX OBLIGATIONS (EXCLUDING AZSTA OBLIGATION) City of Glendale, Arizona As of June 30, 2011 (000's) $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Principal II-41 Interest Notes and Leases The City has contracts under capital leases for assets. The following table and chart provide a list of outstanding note and lease obligations. OUTSTANDING NOTES AND LEASES1 City of Glendale, Arizona As of June 30, 2011 Original Amount Year Issued Year Matures LEASE FINANCINGS Equipment Lease Refunding Lease Total Lease Financings 2007 2011 $1,368,200 11,503,100 $455,818 11,503,100 $11,958,918 2016 2018 NOTE FINANCINGS 99th & Northern Note Total Note Financings 2009 3,540,390 1,416,156 $1,416,156 2013 GRAND TOTAL 1 Total Balance Outstanding $13,375,074 Excludes the January 26, 2001 (amended August 23, 2002) and March 29, 2011 loan agreements with the Wastewater Management Authority of Arizona which are included in the outstanding water and sewer revenue bonded debt. SOURCE: Finance Department REMAINDER OF PAGE INTENTIONALLY LEFT BLANK II-42 OUTSTANDING NOTES AND LEASES City of Glendale, Arizona As of June 30, 2011 $18,000,000 $15,000,000 $12,000,000 $9,000,000 $6,000,000 $3,000,000 $0 2011 Refunding Lease 99th & Northern Ave Note 2007 Equipment Lease The following table and chart illustrate principal and interest payments on outstanding lease and note obligations of the City of Glendale. DEBT SERVICE REQUIREMENTS NOTE AND LEASE OBLIGATIONS City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 30 20121 2013 2014 2015 2016 2017 2018 TOTAL 1 Principal Interest $707,132 653,555 586,685 540,848 451,666 293,995 129,195 $3,363,076 $1,014,916 1,267,004 740,345 1,260,586 2,905,123 3,011,200 3,175,900 $13,375,074 Includes all payments made in fiscal year 2012. SOURCE: Finance Department II-43 Total Debt Service $1,722,048 1,920,559 1,327,030 1,801,434 3,356,789 3,305,195 3,305,095 $16,738,150 DEBT SERVICE REQUIREMENTS NOTE AND LEASE OBLIGATIONS City of Glendale, Arizona As of June 30, 2011 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2012 2013 2014 2015 Principal 2016 2017 2018 Interest The following chart illustrates principal and interest payments associated with notes and leases that are obligations of the General Fund. This includes the Bank of America Refunding Lease. GENERAL FUND LEASE AND NOTE OBLIGATIONS NEXT FIVE YEARS City of Glendale, AZ As of June 30, 2011 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2012 2013 2014 Principal II-44 Interest 2015 2016 DEBT SERVICE TO MATURITY BY LEASE OR NOTE City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 30 2007 Equipment Lease 2012 2013 2014 2015 2016 2017 2018 TOTAL Fiscal Year Ending June 30 2011 Refunding Lease $232,295 77,181 77,181 51,545 51,545 0 0 $489,747 $710,867 1,099,895 1,249,848 1,749,889 3,305,244 3,305,195 3,305,095 $14,726,033 2009 99 and Northern Ave Note th 2012 2013 2014 2015 2016 2017 2018 TOTAL Total Note Payments $778,886 743,482 0 0 0 0 0 $1,522,368 $778,886 743,482 0 0 0 0 0 $1,522,368 SOURCE: Finance Department II-45 Total Lease Payments $943,162 1,177,076 1,327,029 1,801,434 3,356,789 3,305,195 3,305,095 $15,215,780 Combined Lease & Note Payments $1,722,049 1,920,558 1,327,030 1,801,434 3,356,789 3,305,195 3,305,095 $16,738,150 DEBT SERVICE TO MATURITY BY LEASE OR NOTE City of Glendale, Arizona As of June 30, 2011 (000’s) $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 2012 2013 2014 Refunding Lease 2011 2015 Equipment Lease 2007 II-46 2016 2017 99th & Northern Ave Note 2018 LEASE/NOTE FINANCING SUMMARY City of Glendale, Arizona As of June 30, 2011 Lease / Note Items Financed Source of Payment 2007 Equipment Lease Sanitation and Fire Equipment -General Fund -Sanitation Fund 2009 99th & Northern Ave Note Acquisition of Building & Land -Utilities Fund 2011 BofA Refunding Lease Refinanced - Northern Crossing Note - Hickman/Moto Lease - 2007 ADOT Note - Sale of Pads - Sales Tax Revenue from development - General Fund - Sale of Land REMAINDER OF PAGE INTENTIONALLY LEFT BLANK II-47 Interfund Loans From time to time, loans are extended between City funds for various purposes. The following table and chart outline the long-term loans between City funds/departments. OUTSTANDING LONG-TERM INTERFUND LOANS City of Glendale, Arizona As of June 30, 2011 Interfund Loans Sanitation Fund Loan Debt Service Fund Loan General Fund Loan Total Interfund Loans Lending Fund Borrowing Fund Year Issued Original Amount Outstanding Balance Year Matures Utilities General Various Sanitation Debt Service General 2010 2011 2011 959,000 1,978,000 25,000,000 $725,699 1,978,000 25,000,000 $27,703,699 2014 2021 2036 SOURCE: Finance Department OUTSTANDING LONG-TERM INTERFUND LOANS City of Glendale, Arizona As of June 30, 2011 $18,000,000 $15,000,000 $12,000,000 $9,000,000 $6,000,000 $3,000,000 $0 Sanitation Fund Loan Debt Service Fund Loan II-48 General Fund Loan The following table illustrates principal and interest payments on outstanding long-term interfund loans of the City of Glendale. DEBT SERVICE REQUIREMENTS LONG-TERM INTERFUND LOANS City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 30 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 TOTAL Principal Interest $532,412 540,871 555,416 319,000 330,000 740,000 770,000 796,000 827,000 853,000 1,075,000 1,120,000 1,165,000 1,210,000 1,255,000 1,305,000 1,355,000 1,410,000 1,465,000 1,525,000 1,580,000 1,645,000 1,710,000 1,775,000 1,845,000 $27,703,699 $1,046,860 1,032,885 1,018,713 1,005,292 994,999 984,344 957,676 929,891 901,156 871,277 840,448 798,308 754,404 708,736 661,304 612,108 560,952 507,836 452,564 395,136 335,356 273,420 208,936 141,904 72,324 $17,066,829 SOURCE: Finance Department II-49 Total Debt Service $1,579,272 1,573,756 1,574,129 1,324,292 1,324,999 1,724,344 1,727,676 1,725,891 1,728,156 1,724,277 1,915,448 1,918,308 1,919,404 1,918,736 1,916,304 1,917,108 1,915,952 1,917,836 1,917,564 1,920,136 1,915,356 1,918,420 1,918,936 1,916,904 1,917,324 $44,770,528 The following chart illustrates the principal and interest associated with the existing long-term Interfund Loans. DEBT SERVICE REQUIREMENTS LONG-TERM INTERFUND LOANS City of Glendale, Arizona As of June 30, 2011 (000’s) $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Principal II-50 Interest DEBT SERVICE TO MATURITY BY INTERFUND LOAN City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 30 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 TOTAL Sanitation Fund Loan $249,877 249,877 249,877 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $749,631 Debt Service Fund Loan $229,395 228,583 228,660 228,600 229,403 229,040 228,540 228,903 229,100 229,133 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $2,289,357 SOURCE: Finance Department II-51 General Fund Loan $1,100,000 1,095,296 1,095,592 1,095,692 1,095,596 1,495,304 1,499,136 1,496,988 1,499,056 1,495,144 1,915,448 1,918,308 1,919,404 1,918,736 1,916,304 1,917,108 1,915,952 1,917,836 1,917,564 1,920,136 1,915,356 1,918,420 1,918,936 1,916,904 1,917,324 $41,731,540.00 Total Loan Payments $1,579,272 1,573,756 1,574,129 1,324,292 1,324,999 1,724,344 1,727,676 1,725,891 1,728,156 1,724,277 1,915,448 1,918,308 1,919,404 1,918,736 1,916,304 1,917,108 1,915,952 1,917,836 1,917,564 1,920,136 1,915,356 1,918,420 1,918,936 1,916,904 1,917,324 $44,770,528 DEBT SERVICE TO MATURITY BY INTERFUND LOAN City of Glendale, Arizona As of June 30, 2011 (000’s) $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 General Fund Loan Debt Service Fund Loan II-52 Sanitation Fund Loan Debt Limit The Arizona Constitution provides that the general obligation bonded indebtedness for the City for general municipal purposes may not exceed 6% of the secondary assessed valuation of the taxable property in the City. In addition to the 6% limitation for general municipal purpose bonds, cities may issue general obligation bonds up to an additional 20% of the secondary assessed valuation for supplying such cities with water, sewer, artificial light, or public safety, law enforcement, fire and emergency services, streets and transportation facilities, and for the acquisition and development of land for open space preserves (flood control), parks, playgrounds and recreational facilities. The following table presents a record of the City's outstanding general obligation indebtedness with respect to its constitutional general obligation debt limitation. CONSTITUTIONAL DEBT LIMITATION City of Glendale, Arizona As of June 30, 20111 6% Limitation Capacity 6% Limitation2 Less Direct Bonded Debt to be Outstanding3 Unused 6% Borrowing Capacity 1 2 3 20% Limitation Capacity $105,214,165 (16,949,242) $88,264,923 20% Limitation2 Less Direct Bonded Debt to be Outstanding3 Unused 20% Borrowing Capacity $350,713,882 (184,730,758) $165,983,124 Excludes Debt Service Fund balances. Based on secondary assessed value for the 2010-11 fiscal year. For purposes of this table, the debt service payment due on July 1 is considered made in the prior fiscal year. SOURCE: Finance Department REMAINDER OF PAGE INTETIONALLY LEFT BLANK II-53 The following tables illustrate the City's estimated future general obligation capacity. CONSTITUTIONAL GENERAL OBLIGATION DEBT CAPACITY – 6% LIMIT City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 1 2 3 4 5 Estimated Assessed Value Growth Rates2 ---14.37% -7.18% 0.00% 5.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% Assessed Valuation3 (A) $1,313,557,625 1,124,799,394 1,043,982,558 1,043,982,558 1,096,181,686 1,140,028,953 1,185,630,111 1,233,055,316 1,282,377,528 1,333,672,629 1,387,019,535 1,442,500,316 1,500,200,329 1,560,208,342 1,622,616,675 1,687,521,343 1,755,022,196 1,825,223,084 1,898,232,007 1,974,161,288 2,053,127,739 2,135,252,849 2,220,662,963 2,309,489,481 2,401,869,061 Outstanding 6% General Obligation Debt (B) Proposed 6% Debt4 (C) $12,634,242 8,194,242 2,880,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Outstanding Available and Proposed Constitutional Constitutional Debt Limit5 Debt Capacity Debt (D=B+C) (E) (F=E-D) $12,634,242 8,194,242 2,880,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $78,813,458 67,487,964 62,638,953 62,638,953 65,770,901 68,401,737 71,137,807 73,983,319 76,942,652 80,020,358 83,221,172 86,550,019 90,012,020 93,612,501 97,357,001 101,251,281 105,301,332 109,513,385 113,893,920 118,449,677 123,187,664 128,115,171 133,239,778 138,569,369 144,112,144 $66,179,216 59,293,722 59,758,953 62,638,953 65,770,901 68,401,737 71,137,807 73,983,319 76,942,652 80,020,358 83,221,172 86,550,019 90,012,020 93,612,501 97,357,001 101,251,281 105,301,332 109,513,385 113,893,920 118,449,677 123,187,664 128,115,171 133,239,778 138,569,369 144,112,144 The fiscal year ending June 30 includes the payment of principal and interest on the following day. The total outstanding balance therefore reflects the long-term portion, due after July 1 in each year. Provided by the City. 2012 Secondary assessed valuation provided by the City. See table “ESTIMATED FUTURE BOND SALES” on page II-60. Excludes Debt Service Fund balances. SOURCE: Finance Department II-54 CONSTITUTIONAL GENERAL OBLIGATION DEBT CAPACITY – 20% LIMIT City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 1 2 3 4 5 Estimated Assessed Value Growth Rates2 ---14.37% -7.18% 0.00% 5.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% Assessed Valuation3 (A) Outstanding 20% General Obligation Debt (B) Proposed 20% Debt4 (C) $1,313,557,625 $172,860,758 1,124,799,394 160,450,758 1,043,982,558 149,425,000 1,043,982,558 132,235,000 1,096,181,686 113,760,000 1,140,028,953 94,570,000 1,185,630,111 75,180,000 1,233,055,316 58,585,000 1,282,377,528 45,110,000 1,333,672,629 31,935,000 1,387,019,535 20,890,000 1,442,500,316 18,590,000 1,500,200,329 16,215,000 1,560,208,342 13,755,000 1,622,616,675 11,205,000 1,687,521,343 8,560,000 1,755,022,196 5,815,000 1,825,223,084 2,965,000 1,898,232,007 0 1,974,161,288 0 2,053,127,739 0 2,135,252,849 0 2,220,662,963 0 2,309,489,481 0 2,401,869,061 0 Total Outstanding Available and Proposed Constitutional Constitutional Debt Limit5 Debt Capacity Debt (D=B+C) (E) (F=E-D) $0 $172,860,758 $262,711,525 0 160,450,758 224,959,879 0 149,425,000 208,796,512 0 132,235,000 208,796,512 0 113,760,000 219,236,337 0 94,570,000 228,005,791 0 75,180,000 237,126,022 0 58,585,000 246,611,063 0 45,110,000 256,475,506 0 31,935,000 266,734,526 0 20,890,000 277,403,907 0 18,590,000 288,500,063 0 16,215,000 300,040,066 0 13,755,000 312,041,668 0 11,205,000 324,523,335 0 8,560,000 337,504,269 0 5,815,000 351,004,439 0 2,965,000 365,044,617 0 0 379,646,401 0 0 394,832,258 0 0 410,625,548 0 0 427,050,570 0 0 444,132,593 0 0 461,897,896 0 0 480,373,812 $89,850,767 64,509,121 59,371,512 76,561,512 105,476,337 133,435,791 161,946,022 188,026,063 211,365,506 234,799,526 256,513,907 269,910,063 283,825,066 298,286,668 313,318,335 328,944,269 345,189,439 362,079,617 379,646,401 394,832,258 410,625,548 427,050,570 444,132,593 461,897,896 480,373,812 The fiscal year ending June 30 includes the payment of principal and interest on the following day. The total outstanding balance therefore reflects the long-term portion, due after July 1 in each year. Provided by the City. 2012 Secondary assessed valuation provided by the City. See table “ESTIMATED FUTURE BOND SALES” on page II-60. Excludes Debt Service Fund Balances. SOURCE: Finance Department There is no formal debt limit for non-general obligation bonds. However, the City's ability to issue non-general obligation bonds is limited to existing additional bonds tests found in the authorizing ordinances and/or project or other revenues available for debt service. II-55 The City has a total of $362,839,000 of general obligation bonds and $10,000,000 of revenue bonds authorized but unissued at June 30, 2011. A schedule of authorized bonds is as follows: VOTER AUTHORIZED GENERAL OBLIGATION AND REVENUE BONDS City of Glendale, Arizona As of June 30, 2011 Authorized Remaining Authorized but Unissued Issued Through June 30, 2011 GENERAL OBLIGATION BONDS Voter Authorized October 20, 1981 Operations Center $6,750,000 $550,000 $6,200,000 Voter Authorized March 10, 1987 Library 9,698,000 8,000,000 1,698,000 18,215,000 50,500,000 38,860,000 40,910,000 17,000,000 15,398,000 53,700,000 57,188,000 64,801,000 6,935,000 4,494,000 17,873,000 38,860,000 16,910,000 1,460,000 0 3,175,000 57,188,000 50,666,000 185,000 TOTAL 13,721,000 32,627,000 0 24,000,000 15,540,000 15,398,000 50,525,000 0 14,135,000 6,750,000 $172,696,000 20,554,000 16,155,000 102,638,000 79,065,000 10,522,000 1,518,000 12,300,000 11,827,000 TOTAL 10,032,000 14,637,000 90,338,000 67,238,000 $182,245,000 Voter Authorized November 2, 1999 Cultural Facility1 Economic Development Flood Control Government Facilities1 Landfill Development Library Open Space & Trails Parks & Recreation Public Safety Transit1 Voter Authorized May 15, 2007 Flood Control Parks & Recreation Public Safety Streets & Parking Grand Total – General Obligation Bonds REVENUE BONDS Voter Authorized November 2, 1999 Water & Sewer2 1 2 $362,839,000 $10,000,000 0 $10,000,000 Certain General Obligation Bonds and Revenue Bonds can be issued as General Obligation Bonds, Revenue Bonds or a combination thereof. To be used exclusively for septic sewer conversion. SOURCE: Finance Department II-56 Refunding Analysis The following table illustrates outstanding debt obligations of the City and potential savings from a refinancing of the obligations. The results of this analysis are based on market conditions as of June 30, 2011. Market conditions are subject to change. The City will actively monitor refinancing opportunities and consider a refinancing when conditions specified under “Refunding” on page III-18 are met. Amount Outstanding as of June 30, 2011 Present Value savings/(loss) if refunded Savings/(Loss) as % of refunded bonds (3% min) Callable Portion Interest Rates Call Date Maturity Date $9,850,000 14,615,000 n/a 11,905,000 n/a 2.00%-5.00% 4.00%-5.00% 3.63%-4.00% 4.00%-5.00% 5.00% 07/01/2013 07/01/2014 n/a 07/01/2016 n/a 07/01/2018 07/01/2019 07/01/2015 07/01/2021 07/01/2015 ($541,000) (353,000) n/a (752,000) n/a (5.49%) (2.42%) n/a (6.32%) n/a No advance refunding 48,140,000 40,380,000 24,785,000 27,360,000 4.25%-5.00% 2.25%-5.75% 07/01/2017 01/01/2020 07/01/2022 07/01/2030 (1,709,000) (2,385,000) (6.90%) (8.72%) BABs 38,300,000 6,580,000 4.00%-5.00% 01/01/2021 07/01/2022 n/a n/a Water & Sewer Obligations 2001 WIFA $7,502,071 3 77,405,000 2003 W&S $7,502,071 71,850,000 2.28% 4.00%-5.00% 01/01/2012 07/01/2013 07/01/2020 07/01/2028 (473,000) (3,994,000) (6.30%) (5.56%) Reserve fund Bond Issue General Obligation Bonds 2003 GO $18,635,000 2004 GO 21,955,000 2005 GO 5,285,000 2006A GO 21,545,000 1 7,440,000 2006B GO 2007 GO 2009 GO 2 2010 GO 1 Comments W&S projects No advance refunding 3 2006 W&S 76,545,000 61,145,000 4.00%-5.00% 01/01/2016 07/01/2026 (6,421,000) (10.50%) Reserve fund 2007 W&S3 40,850,000 28,970,000 4.25%-5.00% 07/01/2017 07/01/2027 (3,419,000) (11.80%) Reserve fund 2008 W&S3 58,555,000 42,410,000 3.50%-5.00% 01/01/2018 07/01/2028 (4,746,000) (11.19%) Reserve fund 2010 WIFA 6,091,072 25,685,000 6,091,072 25,685,000 1.65% 6.20%-6.55% 01/01/2012 01/01/2021 07/01/2029 07/01/2030 (1,359,000) (2,974,000) (22.31%) (11.58%) Reserve fund; BABs Highway User Revenue Bonds 2004 HURF $7,580,000 2006 HURF 8,710,000 n/a n/a 3.63%-4.00% 4.00%-4.50% n/a n/a 07/01/2014 07/01/2016 n/a n/a n/a n/a 4.00%-5.00% 07/01/2017 07/01/2032 - table continued on following page - (12,216,000) (15.69%) 2010 W&S 2,3 Transportation Revenue Obligations 2007 Trans $97,035,000 $77,835,000 II-57 Amount Outstanding as of June 30, 2011 Interest Rates Call Date Maturity Date $5,055,000 5.00%-5.38% 07/01/2012 07/01/2033 (444,000) (8.78%) 44,400,000 96,065,000 41,635,000 95,195,000 3.13%-5.00% 4.10%-5.58% 07/01/2013 07/01/2013 07/01/2033 07/01/2033 (4,717,000) (12,711,000) (11.33%) (13.35%) Taxable; Revenue Test 2003D MPC4 7,250,000 7,250,000 4.70% 07/01/2013 07/01/2033 (1,200,000) (16.55%) AzMFP 2004A MPC 2006A MPC 2008A MPC 5,295,000 28,360,000 32,220,000 51,075,000 n/a 20,990,000 27,760,000 51,075,000 5.00% 4.25%-5.00% 4.00%-5.00% 5.45%-6.16% n/a 07/01/2016 07/01/2018 01/01/2012 07/01/2014 07/01/2026 07/01/2032 07/01/2033 n/a (2,118,000) (3,772,000) n/a n/a (10.09%) (13.59%) n/a Taxable, Make-Whole 5,650,000 5,650,000 4.60%-5.02% 01/01/2012 07/01/2015 n/a n/a Taxable, Make-Whole Public Facilities Corporation 2008A PFC $137,495,000 $137,495,000 5.75%-7.00% 01/01/2014 07/01/2038 (806,000) (0.59%) Savings generated by bonds in 2025-32 Savings generated by bonds in 2029-32 Taxable, Make-Whole Municipal Property Corporation $5,055,000 2002B MPC4 2003A MPC 2003B MPC 5 2008B MPC6 2008C MPC 3 4 5 6 6 2008B PFC 48,670,000 48,670,000 5.00%-7.00% 01/01/2014 07/01/2038 (826,000) (1.70%) 2008C PFC6 13,585,000 13,585,000 7.50% 01/01/2012 07/01/2017 n/a n/a $1,082,758,143 $870,943,143 TOTAL 2 Savings/(Loss) as % of refunded bonds (3% min) Callable Portion Bond Issue 1 Present Value savings/(loss) if refunded Comments AzMFP Bonds may be refinanced more than 90 days in advance of their respective call date (an “Advance Refunding”) only once under federal tax-exemption rules. The bonds highlighted are not currently eligible for a tax-exempt refinancing. BABs are bonds sold by the City in which the interest is not free from taxation by the federal government. The City instead receives reimbursement from the US Treasury of 35% of the aggregate interest expense. BABs are subject to most tax-exempt bond requirements, including the limitation to one Advance Refunding. For purposes of this evaluation, the reserve fund requirement for the water & sewer obligations is assumed to have been filled with a reserve fund surety bond. Use of a surety bond is subject to availability. Bonds issued to the Arizona Municipal Finance Program. Lease payments from the City to the MPC are used to satisfy debt service requirements of an AZMFP bond. Annual debt service is structured to meet or exceed certain future revenue receipts by the City. Refinancing must not cause the annual debt service requirements to fall below future revenue receipts. Generally, bonds with a make-whole redemption feature cannot be refinanced for interest savings. This is due to the mechanics of the premium price to be paid to bondholders in order to call their bonds. II-58 Capital Improvement Plan Summary The following information has been compiled from the City's Capital Improvement Plan (“CIP”). Glendale’s CIP or Capital Plan (the “Plan”) document is a ten-year roadmap for creating, maintaining and paying for Glendale’s present and future infrastructure needs. The Plan is designed to ensure that capital improvements will be made when and where they are needed, and that the City will have the funds to pay for and maintain them regardless of changes in the external economic environment. Glendale’s elected officials determine the broad parameters for adding new capital improvement projects to the CIP. City staff members from all departments participate in an extensive review of past project accomplishments and the identification of new projects for inclusion in the CIP. The City Council’s commitment to the needs and desires of Glendale’s citizens is an important factor considered during the capital planning process, along with ensuring that projects remain within legal limits and financial resources. Once the projects are selected for inclusion in the Plan, staff must decide which projects need to be implemented in each of the first five years. Determining how and when to schedule projects is a complicated process. It must take into account all of the variables that affect the city’s ability to generate the funds to pay for these projects without jeopardizing its ability to provide routine, ongoing services and one-time or emergency services when needed. The City Council will review all projects, consider citizen requests and evaluate financial, management and planning staff recommendations before making the final decision about which projects should be included in the annual CIP. After the new Plan is adopted by the City Council, the CFO will update the City’s Debt Management Plan to ensure that the debt service costs for capital projects (i.e., bond principal and interest expenses) are adequately addressed in the annual operating budget. Capital improvements are the "bricks and mortar" of the City: streets, water treatment and reclamation plants, parks and park buildings and major, one-time acquisitions of equipment are all considered capital improvements. Projects in the capital improvement plan generally cost more than $50,000 and last at least five years. Arizona law requires a vote of the people for the sale of all general obligation and certain revenue bonds. Glendale voters have been highly supportive of the City's capital program. Nearly all bond ballot issues have been approved by the voters, often by majorities exceeding 60%. Guidelines and Policies Used in Developing the Capital Improvement Plan City Council directives and the City’s financial policies also affect the use and issuance of bonds for CIP projects. Glendale’s CIP must comply with the following requirements and limitations without requiring an increase in the secondary property tax rate. The Capital Plan must: ™ ™ ™ ™ Support City Council goals and objectives; Satisfactorily address all state and City legal and financial limitations; Maintain the City’s favorable bond ratings and financial integrity; Ensure that all geographic areas of the City have comparable quality and types of services defined in the Public Facilities section of the General Plan. II-59 Capital projects should: ™ ™ ™ ™ ™ Prevent the deterioration of the City’s existing infrastructure and respond to and anticipate future growth in the City; Encourage and sustain Glendale’s economic development; Be financed through growth in the tax base or development fees, when possible, if constructed in response to residential or commercial development; Be responsive to the needs of residents and businesses, within the constraints of reasonable taxes and fees; Take maximum advantage of improvements provided by other units of government where appropriate. The following table illustrates proposed bond issues. ESTIMATED FUTURE BOND SALES1, 2 City of Glendale, Arizona As of June 30, 2011 Type of Financing 6% General Obligation Bonds 20% General Obligation Bonds Water / Sewer Revenue Transportation Revenue Highway User Revenue Municipal Property Corp. Bonds TOTAL 1 2 Fiscal Year 2011/12 0 0 0 13,000,000 0 0 $13,000,000 Fiscal Year 2012/13 0 0 9,000,000 0 0 0 $9,000,000 Fiscal Year 2013/14 Fiscal Year 2014/15 Fiscal Year 2015/16 0 0 0 0 0 0 0 10,000,000 36,500,000 0 11,000,000 0 0 0 0 0 0 0 $0 $21,000,000 $36,500,000 The actual amount and timing of future bonds will be determined by construction spending requirements, City growth patterns, bond market conditions and other factors. Amounts are subject to approval by the City Council on a year by year basis as part of City’s annual Capital Improvement Plan update. This table excludes anticipated bond issues for refinancing purposes. For fiscal year 2011-12, the City is evaluating the issuance of up to $70,000,000 in bonds to refinance existing Municipal Property Corporation Bonds. The impact of these refunding bonds on the City’s debt capacity will not be known until the transaction is closed in early 2012. SOURCE: City of Glendale Finance and Budget Departments II-60 The following table and graph illustrates the impact of issuing the proposed water and sewer revenue bonds listed in table "ESTIMATED FUTURE BOND SALES" on page II-60. The proceeds of the proposed water and sewer revenue bonds/obligations will be used to finance projects approved by the City Council in the Capital Improvement Plan. PROPOSED WATER AND SEWER GENERAL OBLIGATION, REVENUE BONDS, AND REVENUE OBLIGATIONS FINANCING SUMMARY City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 Water and Sewer Net Revenues2 (A) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 $39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 Existing General Annual Obligation and Coverage of Revenue Debt Existing Debt Service3 Service (B) (C=A/B) $26,697,963 26,717,105 26,734,044 26,741,387 26,747,143 26,748,707 26,760,003 25,559,415 25,216,935 24,562,577 24,567,816 25,706,134 25,710,298 25,708,720 25,717,806 24,594,322 20,742,668 7,852,391 7,266,710 0 Proposed Revenue Bonds/Obligations4 Annual Debt Principal Interest Service (D) (E) (F=D+E) 1.48 $0 $0 $0 1.48 0 0 0 1.48 280,000 427,500 707,500 1.48 295,000 414,200 709,200 1.48 605,000 900,188 1,505,188 1.48 1,740,000 2,695,700 4,435,700 1.48 1,830,000 2,609,500 4,439,500 1.55 1,920,000 2,518,838 4,438,838 1.57 2,020,000 2,423,725 4,443,725 1.61 2,110,000 2,323,650 4,433,650 1.61 2,220,000 2,219,113 4,439,113 1.54 2,330,000 2,109,125 4,439,125 1.54 2,445,000 1,993,688 4,438,688 1.54 2,565,000 1,872,550 4,437,550 1.54 2,690,000 1,745,463 4,435,463 1.61 2,825,000 1,612,188 4,437,188 1.91 2,970,000 1,472,213 4,442,213 5.04 3,110,000 1,325,050 4,435,050 5.45 3,265,000 1,170,950 4,435,950 - table and footnotes continued on following 0 0 page 0 II-61 Total Debt Service (G=B+F) $26,697,963 26,717,105 27,441,544 27,450,587 28,252,331 31,184,407 31,199,503 29,998,253 29,660,660 28,996,227 29,006,929 30,145,259 30,148,986 30,146,270 30,153,269 29,031,510 25,184,881 12,287,441 11,702,660 0 Annual Coverage5 (H=A/G) 1.48 1.48 1.44 1.44 1.40 1.27 1.27 1.32 1.33 1.36 1.36 1.31 1.31 1.31 1.31 1.36 1.57 3.22 3.38 1 2 3 4 5 Fiscal Year Ending June 301 Water and Sewer Net Revenues2 (A) 2031 2032 2033 2034 2035 2036 TOTAL 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 39,577,000 Existing General Annual Obligation and Coverage of Revenue Debt Existing Debt Service3 Service (B) (C=A/B) 0 0 0 0 0 0 $450,352,144 n/a n/a n/a n/a n/a n/a Proposed Revenue Bonds/Obligations4 Annual Debt Principal Service Interest (E) (D) (F=D+E) 3,430,000 3,600,000 3,780,000 3,260,000 3,420,000 2,790,000 $55,500,000 1,009,163 839,200 660,813 473,500 310,500 139,500 $33,266,317 4,439,163 4,439,200 4,440,813 3,733,500 3,730,500 2,929,500 $88,766,317 Total Debt Service (G=B+F) 4,439,163 4,439,200 4,440,813 3,733,500 3,730,500 2,929,500 $539,118,461 Annual Coverage5 (H=A/G) 8.92 8.92 8.91 10.60 10.61 13.51 The fiscal year ending June 30 includes the payment of principal and interest on the following day. Net revenues are calculated as operating revenues, plus non-operating revenues, less operation and maintenance expense (excluding depreciation and nonoperating expenses). Net revenues from the operation of the City's water and sewer system have been and will be servicing the debt requirements of $7,410,000 aggregate principal amount of water and sewer general obligation bonds. In the event that such revenues should prove to be insufficient or the City elects not to pay debt service requirements on the general obligation bonds from revenues, this debt would become payable from property taxes. Generally, additional bonds may only be issued when coverage of existing and proposed bonds is 1.2 times or greater. The proposed bonds/obligations are not affordable under rate increases adopted to date. SOURCE: Finance Department II-62 The following chart illustrates the City's existing and proposed water and sewer general obligation and revenue debt service. PROPOSED WATER AND SEWER GENERAL OBLIGATION, REVENUE BONDS, AND REVENUE OBLIGATIONS FINANCING SUMMARY City of Glendale, Arizona As of June 30, 2011 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Existing Debt Service II-63 Proposed Debt Service The following table and graph illustrates the impact of issuing the proposed transportation revenue bonds listed in table "ESTIMATED FUTURE BOND SALES" on page II-60. PROPOSED TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS FINANCING SUMMARY City of Glendale, Arizona As of June 30, 2011 Existing Annual Fiscal Transportation Coverage of Year Transportation Obligation Existing Ending Net Revenues2 Debt Service Debt Service June 301 (A) (B) (C=A/B) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 $19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 $7,326,881 7,326,281 7,326,081 7,326,081 7,326,081 7,327,081 7,329,581 7,328,081 7,326,481 7,328,681 7,329,281 7,327,575 7,328,325 7,327,525 7,329,825 7,329,325 7,330,575 7,327,825 7,326,300 7,327,400 7,325,450 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 2.66 Proposed Revenue Obligations3 Annual Debt Principal Interest Service (D) (E) (F=D+E) $0 270,000 285,000 300,000 540,000 565,000 595,000 625,000 660,000 685,000 725,000 765,000 800,000 845,000 885,000 930,000 975,000 1,030,000 1,080,000 1,135,000 1,195,000 $0 650,000 636,500 622,250 1,184,750 1,157,188 1,128,350 1,097,988 1,066,088 1,032,400 997,438 960,425 921,375 880,538 837,400 792,225 744,750 694,975 642,388 587,250 529,300 $0 920,000 921,500 922,250 1,724,750 1,722,188 1,723,350 1,722,988 1,726,088 1,717,400 1,722,438 1,725,425 1,721,375 1,725,538 1,722,400 1,722,225 1,719,750 1,724,975 1,722,388 1,722,250 1,724,300 - table and footnotes continued on following page II-64 Total Debt Service (G=B+F) $7,326,881 8,246,281 8,247,581 8,248,331 9,050,831 9,049,269 9,052,931 9,051,069 9,052,569 9,046,081 9,051,719 9,053,000 9,049,700 9,053,063 9,052,225 9,051,550 9,050,325 9,052,800 9,048,688 9,049,650 9,049,750 Annual Coverage (H=A/G) 2.66 2.36 2.36 2.36 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 Existing Annual Fiscal Transportation Coverage of Transportation Year Obligation Existing Ending Net Revenues2 Debt Service Debt Service June 301 (A) (B) (C=A/B) 2033 2034 2035 2036 2037 2038 2039 2040 TOTAL 1 2 3 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 19,486,000 0 0 0 0 0 0 0 0 $153,880,716 n/a n/a n/a n/a n/a n/a n/a n/a Proposed Revenue Obligations3 Annual Debt Principal Service Interest (E) (D) (F=D+E) 1,255,000 1,320,000 1,385,000 1,455,000 1,530,000 685,000 720,000 760,000 $24,000,000 468,288 404,213 336,813 266,088 191,788 113,663 77,700 39,900 $19,062,031 1,723,288 1,724,213 1,721,813 1,721,088 1,721,788 798,663 797,700 799,900 $43,062,031 The fiscal year ending June 30 includes the payment of principal and interest on the following day. For purposes of this table, no increase in net revenue is projected. Generally, additional bonds may only be issued when coverage of existing and proposed bonds is 2.0 times or greater. SOURCE: Finance Department II-65 Total Debt Service (G=B+F) 1,723,288 1,724,213 1,721,813 1,721,088 1,721,788 798,663 797,700 799,900 $196,942,747 Annual Coverage (H=A/G) 11.31 11.30 11.32 11.32 11.32 24.40 24.43 24.36 The following chart illustrates the City's proposed transportation debt service. PROPOSED TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS FINANCING SUMMARY City of Glendale, Arizona As of June 30, 2011 $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 Existing Debt Service II-66 Proposed Debt Service 2040 2039 2038 2037 2036 2035 2034 2033 2032 2031 2030 2029 2028 2027 2026 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 $0 The following table and graph illustrates the impact of issuing the proposed street and highway revenue bonds listed in table "ESTIMATED FUTURE BOND SALES" on page II-60. PROPOSED STREET AND HIGHWAY USER REVENUE BONDS FINANCING SUMMARY City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 2012 2013 2014 2015 2016 TOTAL 1 2 Annual Highway User Existing HURF Coverage of Tax Revenues Bond Debt Existing of the City Service Debt Service (A) (B) (C=A/B) $13,843,000 13,843,000 13,843,000 13,843,000 13,843,000 $4,696,338 4,698,869 4,685,875 1,953,000 1,970,800 $18,004,882 2.95 2.95 2.95 7.09 7.02 Proposed Future Bonds2 Annual Debt Principal Interest Service (D) (E) (F=D+E) $0 0 0 0 0 $0 $0 0 0 0 0 $0 $0 0 0 0 0 $0 The fiscal year ending June 30 includes the payment of principal and interest on the following day. Generally, additional bonds may only be issued when coverage of existing and proposed bonds is 2.0 times or greater. SOURCE: Finance and Budget Departments II-67 Total Debt Service (G=B+F) $4,696,338 4,698,869 4,685,875 1,953,000 1,970,800 $18,004,882 Annual Coverage (H=A/G) 2.95 2.95 2.95 7.09 7.02 The following chart illustrates the City's existing and proposed debt service payable from highway user revenues. PROPOSED STREET AND HIGHWAY USER REVENUE BONDS FINANCING SUMMARY City of Glendale, Arizona As of June 30, 2011 $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2012 2013 2014 Existing Debt Service II-68 2015 Proposed Debt Service 2016 The following table and graph illustrates the impact of issuing the proposed municipal property corporation bonds listed in table "ESTIMATED FUTURE BOND SALES" on page II-60. PROPOSED MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE BONDS FINANCING SUMMARY City of Glendale, Arizona As of June 30, 2011 Fiscal Year Ending June 301 Excise Tax Revenues2 (A) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 $102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 Existing MPC Debt Service3 (B) $30,842,975 35,183,777 38,138,745 38,133,760 38,138,136 38,141,790 38,136,393 38,138,927 38,138,530 38,140,441 38,140,353 38,137,487 38,136,168 38,136,182 38,140,149 38,139,215 38,139,033 39,021,697 38,137,175 38,136,606 38,137,392 Annual Coverage of Existing Debt Service (C=A/B) 3.34 2.93 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.64 2.70 2.70 2.70 Proposed MPC Bonds4 Annual Debt Principal Interest Service (D) (E) (F=D+E) $0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - table and footnotes continued on following page II-69 $0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Debt Service (G=B+F) $30,842,975 35,183,777 38,138,745 38,133,760 38,138,136 38,141,790 38,136,393 38,138,927 38,138,530 38,140,441 38,140,353 38,137,487 38,136,168 38,136,182 38,140,149 38,139,215 38,139,033 39,021,697 38,137,175 38,136,606 38,137,392 Annual Coverage (H=A/G) 3.34 2.93 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.64 2.70 2.70 2.70 Fiscal Year Ending June 301 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 TOTAL 1 2 3 4 Excise Tax Revenues2 (A) 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 102,961,787 Existing MPC Debt Service3 (B) 37,842,863 19,156,076 22,582,951 22,580,451 22,581,388 22,576,389 816,388 816,388 816,388 816,388 $942,120,601 Annual Coverage of Existing Debt Service (C=A/B) 2.72 5.37 4.56 4.56 4.56 4.56 126.12 126.12 126.12 126.12 Proposed MPC Bonds4 Annual Debt Principal Service Interest (E) (D) (F=D+E) 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 0 0 $0 Total Debt Service (G=B+F) 37,842,863 19,156,076 22,582,951 22,580,451 22,581,388 22,576,389 816,388 816,388 816,388 816,388 $942,120,601 Annual Coverage (H=A/G) 2.72 5.37 4.56 4.56 4.56 4.56 126.12 126.12 126.12 126.12 The fiscal year ending June 30 includes the payment of principal and interest on the following day. For purposes of this table, no increase in net revenue is projected. Excise tax revenues shown include revenues generated around the University of Phoenix Stadium. Includes outstanding senior lien MPC debt, subordinate lien MPC debt, subordinate lien payments to the AzSTA, and third lien payments made by the Public Facilities Corporation. Generally, additional bonds may only be issued when coverage of existing and proposed bonds is 2.0 times or greater. SOURCE: Finance and Budget Departments II-70 The following chart illustrates the City's proposed municipal property corporation debt service. PROPOSED MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE BONDS FINANCING SUMMARY City of Glendale, Arizona As of June 30, 2011 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Existing Debt Service II-71 Proposed Debt Service Ratio Analysis Many analysts use debt ratios to analyze debt levels. Commonly used debt ratios of comparably-sized cities will provide one measure against which the City of Glendale can assess its debt burden. To measure the size or magnitude of the City's debt, rating analysts compare direct net debt to the population. This is the Direct Net Debt Per Capita Ratio shown below. The taxable value of the City is a measure of the City's wealth and also reflects the capacity of the City's ability to service debt. The ratio of Direct Net Debt to Taxable Value, also shown below, is the comparison of direct net debt to the City's taxable value. There are an infinite number of ratios which could be calculated to measure the City's debt burden. This analysis will focus on ratios commonly used by rating analysts instead of creating customized ratios. Since the City has no control over overlapping governments, overlapping debt is excluded from this analysis. The following table illustrates how the City's Direct Net Debt is calculated. DIRECT NET DEBT City of Glendale, Arizona As of June 30, 2011 OUTSTANDING DEBT General Obligation Actual 06/30/07 Actual 06/30/08 Actual 06/30/09 Actual 06/30/10 $212,524,014 $197,738,173 GO’s Supported by Water/Sewer Revenues 11,135,986 10,126,828 9,160,000 8,300,000 7,410,000 Street & Highway User Revenue 30,895,000 27,480,000 23,910,000 20,180,000 16,290,000 Water & Sewer Revenue1 233,689,129 291,937,502 281,966,700 303,739,916 292,633,143 Municipal Property Corporation 298,050,000 294,130,000 287,555,000 281,955,000 275,370,000 0 0 199,750,000 199,750,000 199,750,000 14,840,735 12,526,000 10,156,000 8,085,000 11,958,918 6,278,746 9,045,000 7,637,000 6,288,000 1,416,156 Public Facilities Corporation Capital Leases Notes $183,945,000 Actual 06/30/11 $211,125,000 194,270,000 Special Assessment 0 0 0 0 0 Transportation Excise Tax Revenue 0 105,035,000 102,490,000 99,815,000 97,035,000 Long-Term Interfund Loans Gross Direct Debt 0 0 0 0 27,703,699 $807,413,610 $948,018,503 $1,106,569,700 $1,139,237,916 $1,123,836,916 Less: Bonds Supported by Water & Sewer Revenues General Obligation Revenue Net Direct Debt Population Estimate Full Value of Taxable Property 2 Net Direct Debt Per Capita Ratio of Net Direct Debt to Full Value (%) 1 2 (11,135,986) (10,126,828) (9,160,000) (8,300,000) (7,410,000) (233,689,129) (291,937,502) (281,966,700) (303,739,916) (292,633,143) $562,588,495 $645,954,173 $815,443,000 $827,198,000 $823,793,773 244,772 248,731 249,811 250,222 250,222 $10,350,063,000 $16,733,845,908 $20,635,556,972 $17,333,074,126 $17,333,074,126 2,298.42 2,597.00 3,264.24 3,305.86 3,292.25 5.44 3.86 3.95 4.77 4.75 Includes the City’s loan agreements with the Wastewater Infrastructure Financing Authority. Estimated full cash value of taxable property is the total market value of the taxable property less estimated exempt property within the City. SOURCE: Finance Department II-72 Rating Agency Analysis The most recent rating agency reports from Moody's Investors Service and Standard & Poor's Rating Group have been inserted in Appendix A. Rating agencies provide an independent assessment of the relative creditworthiness of municipal securities. The rating system consists of letter grades that convey each agency's assessment of the ability and willingness of a borrower to repay its debt in full and on time. Many investors rely upon these letter grades as a means of assessing the likelihood of repayment. Credit ratings issued by the bond rating agencies are a major factor in determining the cost of borrowed funds in the municipal bond market. Determination of a credit rating by a rating agency is based on the rating agency's assessment of the credit worthiness of an issuer with respect to a specific obligation. In addition to analyzing the administrative and fiscal management of the City, the rating analysts analyze the debt burden and economic base. Rating analysts review many factors not addressed in this document to determine bond ratings. DESCRIPTION OF BOND RATINGS Moody’s Standard & Poor’s High Grade Aaa AAA Aa1 Aa2 Aa3 AA+ AA AA- Medium Investment Grade A1 A+ A2 A A3 ABaa1 BBB+ Baa2 BBB Baa3 BBBSpeculative Ba1 Ba2 Ba3 B1 B2 B3 BB+ BB BBB+ B B- Description The highest rating assigned to a debt instrument, indicating an extremely strong capacity to pay principal and interest. Bonds in this category are often referred to as “gilt-edge” securities. High-quality bonds by all standards with strong capacity to pay principal and interest and are judged to be of high quality by all standards. These bonds are rated lower primarily because the margins of protection are less strong than those for Aaa and AAA. These bonds possess many favorable investment attributes, but elements that suggest a susceptibility to impairment given adverse economic changes may be present. Bonds are regarded as having adequate capacity to pay principal and interest, but certain protective elements may be lacking in the event of adverse economic conditions that could lead to a weakened capacity for payment. Bonds regarded as having only moderate protection of principal and interest payments during both good and bad times. Bonds that generally lack characteristics of other desirable investments and have greater vulnerability to default. Assurance of interest and principal payments over any long period of time may be small. II-73 The following table illustrates a history of the City's various debt ratings. DEBT RATING HISTORY City of Glendale, Arizona As of June 30, 2011 Rating1 Type of Debt Moody’s General Obligation Water & Sewer Revenues Senior Lien - Transportation Excise Tax Revenue Obligations Municipal Property Corp. Senior Lien - Subordinate Lien Western Loop 101 Public Facilities Corp. Master Lease 1 Standard & Poor’s Date Rating Assigned A A1 Aa3 Aa2 Aa1 Aa2 November 1956 December 1978 July 1994 May 1997 May 2010 February 2011 A+ AAAA April 1984 October 1986 May 1998 A Aa3 Aa2 July 1989 September 1999 May 2010 A A+ AA November 1987 November 1995 June 2000 A2 A1 Aa3 A1 Aa3 Aa2 A1 Aa3 December 2003 February 2008 May 2010 July 1994 May 2000 May 2010 October 1997 May 2010 AAAA December 2003 February 2006 A+ AAAA AA January 1977 June 2004 September 2006 September 2007 Aa3 Aa2 Aa3 A1 Aa3 A1 A2 A1 A2 Aa3 October 1999 May 2010 February 2011 July 2002 May 2010 February 2011 October 2008 May 2010 February 2011 June 2000 AAAA+ October 1999 September 2006 AAAA+ July 2002 September 2006 AA October 2008 Subordinate Lien Street & Highway Revenues Date Rating Assigned This table only reflects the dates on which the City’s bond/lease ratings changed and does not include rating confirmations. II-74 SECTION III DEBT MANAGEMENT POLICY THIS PAGE INTENTIONALLY LEFT BLANK III. DEBT MANAGEMENT POLICY Financing Alternatives General Before considering which method of financing may be the most appropriate, the City should evaluate all potential funding sources. These sources include intergovernmental grants from federal, state or other sources; state revolving funds or loan pools, current revenues and fund balances, private sector contributions through impact fees or public/private partnerships and leasing. Below are several financing methods the City may utilize to achieve its capital financing objectives. Pay-As-You-Go Financing The pay-as-you-go method of funding means simply that capital projects are paid for in cash from the government's current revenue base and that the municipality does not issue bonds and then repay those borrowings over time. The use of pay-as-you-go financing has several advantages. For example, pay-as-you-go financing will result in saving the amount of interest which otherwise would be paid on bonds issued to finance the program. Furthermore, when economic conditions deteriorate due to normal business cycles, or otherwise, the government is not encumbered by as much debt service. Pay-as-you-go contributions provide greater budgetary flexibility than does a debt issue, as contributions can be reduced in a given budget year. At the same time, the jurisdiction's long-term debt capacity is preserved for the future when even larger projects leave the government little alternative but to borrow money. Finally, lower debt ratios may have a positive effect upon the jurisdiction's credit rating. There are several disadvantages to relying on current revenues to finance capital improvements. Exclusive reliance upon pay-as-you-go funds for capital improvements means that existing residents are obliged to pay for improvements that will benefit new residents who relocate to the area after the expenditure is made. Also, the large capital outlay required for some projects may result in an onerous tax burden if the jurisdiction is forced to finance the expenditure within a single budget. The City must be careful to ensure that the use of current revenues for capital projects does not diminish its availability to respond to emergencies. Many improvements and pieces of equipment are included in the operating budget on a pay-asyou-go basis. The City's financial policies include a goal that "ongoing operating costs should be supported by ongoing, stable revenue sources." Thus, recurring equipment replacement needs--such as patrol cars or street sweepers--and recurring maintenance costs--such as street chip sealing and pool replastering--should be funded through the operating budget. In addition to these recurring needs, capital improvements can also be partially or completely paid for on a cash basis in order to avoid the interest costs incurred in other financing mechanisms. A good example of this is water and sewer capital improvements that are partially funded through the development fee revenues in the utility's operating budget. In many cases, pay-as-you-go financing is impractical due to the cost of the capital improvement and the need to build the project at one time instead of in phases over a period of years. III-1 Grants Government grants stem from a variety of sources, but the majority of grant revenues for capital projects come from the national and state governments. Often they require a city matching contribution, as in the case of Federal Transportation Administration capital grants and Federal Aviation Administration grants. Most grants require an application from the City, identifying specific improvements or equipment that will be purchased with the grant money. Others, like the Community Development Block Grant, are based on an "entitlement" amount, but even here the uses of the grant funds must be approved by the U.S. Government. Other Alternatives Other alternatives include interest rate subsidized loan programs (such as the Arizona Wastewater Revolving Fund) and other financing programs which the State may offer. The Water Infrastructure Finance Authority of Arizona In 1987, Congress significantly changed the structure under which local governments finance clean water and wastewater treatment projects. Previously, the federal government made direct grants to localities for specific projects. These grants covered a significant percentage of costs, primarily for plant construction. In 1987, construction grants were phased out. Instead, annual capitalization grants now are provided to each state to establish a fund to make loans to local governmental units for clean water and wastewater facility financing. The State, through its Department of Environmental Quality has created a revolving fund. By utilizing the grants, along with required matching funds, the State is able to offer subsidized loans to local governments. Bank Loans/Private Placements Bank loans have been used by the City for a variety of purposes. In some cases, bank financing is used to provide temporary funding pending long term bond financing or used to provide permanent financing for various projects. The advantage of bank financing generally relates to their inherent flexibility. The specifications on a bank loan can be tailored to the needs of the specific transaction. Such specifications include, whether or not the loan will be fully funded at closing or will be structured as a line of credit with a draw down component, the frequency of debt service payments (monthly, quarterly, semiannually, etc.), the term of the loan and the term of an interest only period before amortizing payments begin. The transaction costs associated with obtaining bank financing are normally relatively small. The City enjoys the flexibility to refinance bank loans or to retire loans prior to maturity, since most loans are fully pre-payable. Bonds The following section illustrates financing structures which have been used by the City in previous financings and which may be used in the future. Because of the high cost of funding certain capital improvements, governments are generally not able to accumulate enough cash from current revenues to pay for necessary improvements. Bonds permit governments to acquire assets as needed rather than wait until a sufficient amount of cash has been built up. III-2 Within each category there are many different types of financing instruments available to the City depending on legal constraints, investor demand, capital market activity and the type of project being financed. The different types of financing instruments are discussed in the next section. Included here are brief summaries of financing alternatives that are currently pertinent to the City of Glendale. General Obligation Bonds – The security for a general obligation ("G.O.") bond is the taxing power of the state or local government. An issuer selling a G.O. bond secured by its full faith and credit attaches to that issue its broadest pledge, making the security of these bonds very high. The full faith and credit backing of a G.O. bond includes the pledge of all general revenues, unless specifically limited, as well as the legal means to raise tax rates to cover debt service. The public entity is authorized to levy property taxes or to draw from other unrestricted revenue streams such as sales or income taxes to pay the bonds' principal and interest. Primarily due to this superior security, interest rates on these bonds are generally lowest of any public securities. Prior to issuance, Arizona G.O. bonds must have a majority vote approval from the residents of the state, City, or municipality issuing the bonds. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK III-3 The following flow chart illustrates the flow of funds associated with general obligation bonds. III-4 Revenue Bonds – Revenue bonds are issued to finance a specific revenue-generating project and are sometimes secured by the revenues of that project. Reserve funds (when appropriate), certain restrictive covenants and additional bonds coverage tests also provide security on revenue bonds. Revenue bond financing provides a method of matching the capital cost of a facility to the ultimate user by amortizing the bond issue in annual installments over a period of years. Revenue bonds enable state and local governments to finance a wide range of projects including: bridges, airports, water and sewer treatment facilities, health care facilities, waste water recovery, public power projects and housing projects. Depending on the type of project financed, the issuing entity pays debt service from either user fees, tolls, concessions, lease-back arrangements or revenues from the acquired or constructed facility. Certain Arizona state or local government revenue bonds must have a majority voter approval prior to their date of issuance. Because revenue bonds are not backed by the full faith and credit of the issuer and the underlying security is only the revenue stream pledged to pay bond principal and interest, revenue bonds do not burden the constitutional or statutory debt limitation placed on municipal entities. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK III-5 The following flow chart illustrates the flow of funds associated with revenue bonds. III-6 Lease-Purchase Obligations – The City may enter into lease purchase obligations with third party lessors to facilitate the financing of equipment or other capital improvements. This financing technique, when subject to annual appropriation and certain other conditions, provides the equivalent of long-term financing through a lease (with a mandatory purchase provision) that does not constitute indebtedness under a state or local government's constitutional debt limit and does not require voter approval. In a lease-purchase transaction the asset being financed can include new capital asset needs, assets under existing lease agreements, or, in some cases, equipment purchased in the past for which the government or municipal unit would prefer to be reimbursed and pay over time. A lease-purchase financing is a contractual arrangement between a unit of government usually a state, City or municipality (the "lessee") for financing the acquisition of assets for the governmental unit. The lessor, in a municipal lease transaction, is responsible for acquiring the assets per instructions given by the lessee and receives lease payments from the lessee over the life of the agreement. The lessee has complete control and responsibility for the assents during the contract term and must provide maintenance, insurance and general safekeeping of the assets. At the end of the term of the contract and upon fulfillment of all contractual obligations, title to the assets is normally transferred to the state, City or municipality. Leases are generally funded as an operating expense from the City's general fund. The obligations are not backed by a property tax pledge. Therefore, property taxes cannot be increased to make the required lease payments. If the City enters into a large volume of lease purchase obligations, it may find it difficult to make necessary lease payments. This is due to the fact that all funds used to support the leases necessarily will be allocated from other City operations. The security for a lease-purchase financing is the lease payments made by the lessee and, where legally permitted, also the asset being financed. The lessor typically assigns all rights and obligations to the trustee, who will act on its behalf. The City has issued lease revenue bonds through the Municipal Property Corporation. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK III-7 The following flow chart illustrates the flow of funds associated with lease-purchase obligation bonds. III-8 Local Improvement Districts – Local Improvement Districts are a legally designated geographic area located within the City which, through the consent of the affected property owners, pay for basic infrastructure and public improvements to the area through a supplemental assessment. This financing approach achieves the objective of tying the repayment of debt to those property owners who most directly benefit from the improvements financed. While local improvement district ("LID") bonds are not subject to specific debt limits, they do face several practical constraints: 1) affected property owners must agree to the district; 2) LID debt appears in the City's financial statements as obligations of the City and can effect bond ratings; 3) LID's often include a "general" City contribution (for the share of improvements that benefits property owners outside the district), which must be financed with other sources. While the establishment of an improvement district and the issuance of debt on its behalf does not legally obligate the City for the repayment of its debt (but does result in a contingent liability for the City as described in the next paragraph), the City has to carefully structure these financings to protect against any use of the City's general obligation capacity. If any lot, piece of parcel of land included within the boundaries of a district is sold for nonpayment of the special assessment levied and assessed by the City thereon and if there is no purchaser for any such lot, piece or parcel of land offered for sale, the City is required to purchase such lot, piece or parcel of land for the remaining balance due on the assessment. In the event of such purchase, the City is required to appropriate from its general fund or the treasury of the City the amount bid for such purpose and place the amount in the special fund. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK III-9 The following flow chart illustrates the flow of funds associated with local improvement district bonds. III-10 Community Facilities District Bonds – The Arizona Community Facilities District Act went into effect on September 30, 1988. This law allows a municipality to establish a Community Facilities District within its boundaries to finance public infrastructure and enhanced municipal services in qualifying areas. The law provides alternative public financing mechanisms for these purposes that can either tax or assess only the benefitted property owners in the district. As a result, districts provide landowners/developers with new alternatives for financing the public infrastructure facilities required to make their land develop able. Districts provide the means of passing on the costs of public infrastructure, which were traditionally borne by landowners/developers up-front, to the ultimate owners of the land. Infrastructure improvements that can be financed through a district are as follows: • Water and wastewater facilities; • Drainage and flood control facilities; • Streets and parking facilities; • Pedestrian, equestrian and bicycling facilities; • Pedestrian malls, parks and open space areas; • Landscaping and water features; • Public buildings; • Lighting and traffic control systems; • School sites and facilities; and • Equipment related to the above items. The City has created one community facilities district (governed by the City Council members, acting ex officio) comprising the NFL stadium site and certain surrounding land. The community facilities district is not authorized to issue general obligation bonds. The district has not issued any bonds, and there are no current plans to issue bonds. Bond Variations The following is a list of financing vehicles currently available to the City. Capital Appreciation Bonds Capital Appreciation Bonds ("CABS") are deeply discounted bonds bearing little or no interest. The yield is determined by the price of the bond. For example, a current interest bond with a 20-year maturity being a 7% coupon would be sold at par ($1,000), however, the same bond without a semi-annual coupon payment being made to the investor would be sold at $252. At maturity, the investor would receive $1,000. The purpose and benefit of the CAB is to delay debt service payments to later years. CAB's are sometimes used to place debt burdens on eventual users of public facilities. Such a financing mechanism might be used in conjunction with more commonly used coupon bearing bonds to levelize the total debt service. (See "Use of Long-Term Debt" on page III-18 for the City's policy regarding the use of CAB's.) Variable Rate Debt Variable rate instruments permit the municipality to capture the lower interest rates available to borrowers for very short debt maturities. While the issuer may receive an interest rate benefit, it assumes the risk of upward movements in the levels of tax-exempt interest rates or shifts in the market acceptability of short term debt. There is a limit on the maximum rate which can be paid by the City on its variable rate obligations. This rate is the maximum rate authorized by the City's bond ordinance. (See "Use of LongTerm Debt" on page III-18 for the City's policy regarding the use of variable rate debt.) III-11 Taxable Alternatives Taxable financing alternatives can be placed in two categories: taxable municipal debt and developer financing encouraged by the municipality. The taxable municipal market has developed as a consequence of the negative impact of the Tax Reform Act of 1986 which eliminated the tax-exempt market as an alternative for many municipal financing needs. The area most dramatically affected is the issuance of industrial development bonds commonly used by municipalities to encourage economic development within their boundaries. These obligations have been used to finance infrastructure for private developers or build municipal facilities which are not deemed to be necessary for an essential public purpose. The City would issue taxable debt which would be used to develop city services designed to benefit a developer's project. The yield on these obligations is closely tied to Treasury obligations with a comparable average life and is more expensive debt than would be attainable in the tax-exempt market. Debt Issuance Policies Administration of Policy With the exception of those responsibilities specifically assigned by state statute to the City Manager, the Chief Financial Officer is ultimately responsible for administration of City financial policies. The City Council is responsible for the approval of any form of City borrowing and the details associated therewith. The Chief Financial Officer coordinates the administration and issuance of debt, as designated by the City Manager. The Chief Financial Officer is also responsible for attestation of disclosure and other bond related documents. References to the "City Manager or his designee" in bond documents are hereinafter assumed to assign the Chief Financial Officer as the "designee" for administration of this policy. Initial Review and Communication of Intent All borrowing requests shall be communicated to and coordinated by the Chief Financial Officer during the annual budget process and/or as a part of a Capital Improvement Program request. Opportunities for refunding shall originate with or be communicated to the Chief Financial Officer. Justification and requested size of the bond issue must be presented as well as the proposed timing of the bond issue. The Chief Financial Officer will evaluate each debt proposal comparing it with other competing interests within the City. All requests will be considered in accordance with the City's overall adopted priorities. The Chief Financial Officer will coordinate the issuance of all debt including: size of issuance, debt structuring, repayment sources and determination of mix (e.g., debt financing versus pay-as-you-go) and method of sale. Method of Sale There are two ways bonds can be sold: competitive (public) or negotiated sale. Competitive and negotiated sales provide for one or more pricings, depending upon market conditions or other factors. Either method can provide for changing issue size, maturity amounts, term bond features, etc. The timing of competitive and negotiated sales is generally related to the requirements of the City's agenda requirement and applicable publication rules. III-12 Competitive Sale With a competitive sale, any interested underwriter(s) is invited to submit a proposal to purchase an issue of bonds. The bonds are awarded to the underwriter(s) presenting the best bid according to stipulated criteria set forth in the notice of sale. The best bid is usually determined based on the lowest overall interest rate. Competitive sales should be used for all issues unless circumstances dictate otherwise. Negotiated Sale A negotiated sale is a securities sale through an exclusive arrangement between the issuer and an underwriter or underwriting syndicate. At the end of successful negotiations, the issue is awarded to the underwriters. Negotiated underwriting may be considered upon recommendation of the Chief Financial Officer based on one or more of the following criteria: ™ Extremely large issue size ™ Complex financing structure (i.e., variable rate financings, new derivatives and certain revenue issues, taxable bonds, etc.) which provides a desirable benefit to the City ™ Comparatively lesser credit rating ™ Other factors which lead the Chief Financial Officer to conclude that a competitive sale would not be effective. Underwriter Selection for Negotiated Sale ™ The Chief Financial Officer may establish a list of pre-qualified underwriters when a negotiated sale is anticipated. The list will be based on firms that have submitted, as a part of the syndicate, bids for City competitive bond issues during the past five years. ™ The request for proposal ("RFP") will be sent by the Chief Financial Officer to every underwriter on the list. The format of the RFP will be determined by the Chief Financial Officer. Spread quotation for: (1) management fee, (2) direct expenses, (3) underwriting fee and (4) takedown (or sales concession) will be obtained from each firm. ™ The proposals will be evaluated on responsiveness, experience and cost. III-13 ™ The book-running senior manager and other members of the underwriting syndicate will be designated by the Chief Financial Officer and ratified by the City Council. It is the City's intent, once a team is established, to provide equal opportunity for the position of book-running senior manager. The Chief Financial Officer will rotate the book-running senior manager on a deal by deal basis (i.e., when more than one issue is being sold for the same project having different dated dates), to provide equal opportunity to all members of the syndicate. ™ The underwriting team should be balanced with firms having institutional, retail and regional sales strengths. Qualified minority and/or woman owned firms will be included in the underwriting team and will be given an equal opportunity to be senior manager. ™ The size of issue will determine the number of members in the underwriting team and whether more than one senior manager is desirable. Underwriting spread Before work commences on a bond issue to be sold at negotiated sale, the underwriter shall provide the Chief Financial Officer a detailed estimate of all components of their compensation. Such estimates should be contained in the RFP or provided immediately after their designation as underwriter. An updated estimate of the expense component of gross spread must be provided to the Chief Financial Officer by the bookrunning senior manager no later than one week prior to the day of pricing. Establishment of a Selling Group When deemed appropriate by the Chief Financial Officer, a selling group will also be established to assist the underwriting team in the marketing of the bond issue. Priority of Orders The priority of orders to be established for negotiated sales is as follows: ™ Glendale and Arizona Investors ™ Group Orders ™ Designated Orders ™ Member Orders For underwriting syndicates with three or more underwriters, a three firm rule for net designated orders will be established as follows. ™ The designation of takedown on net designated orders is to benefit at least three firms of the underwriting team. III-14 ™ No more than 50% of the takedown may be designated to any one firm. No less than 10% of the takedown will be designated to any one firm. Retentions If the use of retentions is desirable, the Chief Financial Officer will approve the percentage (up to 30%) of term bonds to be set aside. The amount of total retention will be allocated to each member of the underwriting team in accordance with their respective underwriting liability, which is approved by the Chief Financial Officer. Allocation of Bonds ™ The book-running senior manager will be responsible for ensuring that the overall allocation of bonds meets the City's goals of obtaining the best price for the issue and a balanced distribution of the bonds. ™ The Chief Financial Officer must approve the final bond allocation process with input from the book-running senior manager. Use of Bond Insurance Bond insurance is an insurance policy purchased by an issuer or an underwriter for either an entire issue or specific maturities, which guarantees the payment of principal and interest. This security provides a higher credit rating and thus a lower borrowing cost for an issuer. Bond insurance can be purchased directly by the City prior to the bond sale (direct purchase) or at the underwriter's option and expense (underwriter's option). The City will attempt to qualify its bond issues for insurance with bond insurance companies rated Aaa by Moody's Investors Service and AAA by Standard & Poor's Corporation. The decision to purchase insurance directly versus underwriter option is based on: ™ volatile markets ™ current investor demand for insured bonds ™ level of insurance premiums ™ ability of the City to purchase bond insurance from bond proceeds When insurance is purchased directly by the City, the present value of the estimated debt service savings from insurance should be at least equal to or greater than the insurance premium. The bond insurance company will usually be chosen based on an estimate of the greatest net present value insurance benefit (present value of debt service savings less insurance premium). It is the City's preference to have insurance purchased at underwriter's option, if at least two insurance companies are expected to qualify the issue for insurance. III-15 Derivatives The term "derivatives" refers to a wide array of financial products that are dependent for their value on (or "derived" from) an underlying financial instrument (e.g., stocks, bonds or foreign currencies), a commodity, or an index representing values of groups of such instruments or assets. Some of the most commonly used derivatives are swaps, options, futures, forwards and a variety of structured securities. Extensive investigation and a clear understanding of the risks should be gained before complex structures are used. The City will consider the use of derivatives in its debt instruments on a case-by-case basis. The decision to use derivatives will be based on the potential benefits as compared to the potential risks. As much as feasibly possible, the City will use competitive bidding to price derivative products. Arbitrage Rebate Arbitrage is the practice of simultaneously buying and selling an item in different markets to profit from a spread in prices or yields resulting from market conditions. With reference to municipal bonds, arbitrage profits are made by selling tax-exempt bonds and investing the proceeds in higher-yielding taxable securities. Municipal issuers are allowed to make arbitrage profits under certain, restricted conditions, but Section 103(c) of the Internal Revenue Code prohibits the sale of tax-exempt bonds primarily for the purpose of making arbitrage profits. Arbitrage rebate refers the amount of arbitrage that must be "rebated" to the federal government. For example, if an issuer sells bonds at 6%, it can keep all interest earnings up to 6%. Interest earnings above 6%, if any, represent "arbitrage" and must be "rebated" to the federal government. It is the City's policy to calculate its arbitrage rebate liability on an annual basis. In conformance with general accounting principles, it is the City's policy to segregate current arbitrage for future payment or credit and to enter such an amount as a liability on its books. Whenever feasible, the City will structure its financings in such a way as to reduce or eliminate future arbitrage rebate liability. Continuing Disclosure of City Financial Information The City will provide annual financial statements and other pertinent credit information, including the Comprehensive Annual Financial Report ("CAFR") upon request and at the expense of the persons making the request. Copies of all periodic reports may also be made available by any other means maintained by the City to provide information to persons wishing to receive it. The City will provide the rating agencies who maintain a rating on City securities with all material that has a pertinent bearing on City finances. The City expects that copies of official statements for future issuances of its bonds will be available through recognized municipal repositories. The City makes no representation as to the frequency with which it may issue bonds in the future. III-16 On November 10, 1994, the Securities and Exchange Commission released final "continuing disclosure" rules (the "Rules") for municipal bond issues. The rules amend existing Rule 15c2-12. The Rules, which in general is effective on July 3, 1995, impacts nearly every issuer of municipal securities. The stated purpose of the Rules is to deter fraud and manipulation in the municipal securities market by prohibiting the underwriting and subsequent recommendation of securities for which adequate information is not available. Essentially, unless an exemption applies, no underwriter can purchase or sell bonds in an offering of more than $1,000,000 after July 3, 1995 unless it has reasonably determined that an issuer promised to provide future detailed financial information. The City has in the past complied with, and intends to fully comply with the "continuing disclosure" Rules. Conduit Securities A conduit security is a bond issued by a state or local government (or in Arizona, by an industrial development authority, such as the Glendale IDA) to finance a project for use by a third party. In many instances, the money is loaned to a private enterprise or nonprofit corporation for its own use. Payment of principal and interest depends upon the financial performance of the ultimate borrower, whether it is a unit of government or a private enterprise. The term "conduit" refers to the fact that the issuing party undertakes no commitment to pay or guarantee the timely payment of debt service. When the credit of a private company or non-profit corporation is offered as the principal source of security for bondholders, the securities often are called "private activity" bonds. An industrial development bond (IDB) is a common example of a conduit financing. Repayment depends upon the corporation's financial performance each year. For this reason, these bonds carry higher rates of interest than conventional G.O. and revenue bonds. However, the federal tax exemption provided to purchasers of the bonds makes this alternative cheaper for the corporation than borrowing under its own name in the corporate market. While the Glendale IDA actually issues conduit bonds, the City must approve such issuance. The City will encourage all conduit securities to be issued with a complete official statement or other disclosure document; the documents shall clearly describe the limited source of repayment and lack of direct financial support from the City. The City shall obtain a clear opinion that it shall not be liable for the payment of principal and interest in the event of a default by the conduit borrower. Prior Redemption Bonds issued by the City should be callable no later than ten years from the date of issuance. With each issuance of bonds, the City, or its financial advisor, should assess market conditions to determine if a more aggressible (shorter) call can be obtained without significant impact on the bond interest rate. In order to reduce its outstanding debt, the City should consider prepaying or defeasing outstanding debt when available resources are identified. Investment of Bond Proceeds The City will invest bond proceeds in accordance with its General Investment Policy and the appropriate bond indenture. III-17 Use of Long-Term Debt Not for Operations – Long-Term debt issued by the City will be used for capital improvements that cannot be funded with non-debt funds. Long-term debt will not be used for operations. Maturity Structures – The term of City debt issues should not extend beyond the useful life of the project or equipment financed. Debt issued by the City should be structured to provide for either level principal or level debt service. Term bonds may be used only if they are subject to mandatory prior redemption. Deferring the repayment of principal should be avoided except in select instances where it will take a period of time before project revenues are sufficient to pay debt service or where the deferral of principal allows the City to achieve combined level debt service with other outstanding bonds. Ascending debt service should generally be avoided. Variable Rate Debt – Variable rate debt will be considered on a case-by-case basis. When used, a cap on the rate is recommended. No more than 10% of the City's debt should be variable rate. Capital Appreciation Bonds – Capital Appreciation Bonds ("CABS") should be considered only to achieve level debt service with other outstanding bonds. CABS may also be considered in order to achieve an economic benefit as compared to a traditional current interest bond structure. Use of Short-Term Debt Short-term debt, such as revenue anticipation notes ("RANS"), bond anticipation notes ("BANS") and tax anticipation notes ("TANS") should generally not be used by the City. Short-term debt can be avoided by maintaining appropriate fund balances and timing bond issues to coincide with construction draws. Refunding A refunding is generally the underwriting of a new bond issue whose proceeds are used to redeem an outstanding issue. Key definitions are described as follows: Advance Refunding – A method of providing for payment of debt service on a bond until the first call date or designated call date from available funds. An advance refunding is done by issuing a new bond or using available funds and investing the proceeds in an escrow account in a portfolio of U.S. government securities structured to provide enough cash flow to pay debt service on the refunded bonds. Current Refunding – The duration of the escrow is 90 days or less. Gross Savings – Difference between debt service on refunding bonds and refunded bonds less any contribution from a reserve or debt service fund. Present Value Savings – Present value of gross savings discounted at the refunding bond yield to the closing date plus accrued interest less any contribution from a reserve or debt service fund. Prior to beginning a refunding bond issue the City will review an estimate of the savings achievable from the refunding. The City may also review a pro forma schedule estimating the savings assuming that the refunding is done at various points in the future. III-18 The City will generally consider refunding outstanding bonds if one or more of the following conditions exist: ™ Present value savings are at least 3% of the par amount of the refunded bonds. ™ The bonds to be refunded have restrictive or outdated covenants. ™ Restructuring debt is deemed to be desirable. The City may pursue a refunding not meeting the above criteria if: ™ Present value savings exceed the costs of issuing the bonds. ™ Current savings are acceptable when compared to savings that could be achieved by waiting for more favorable interest rates and/or call premiums. Bond Closings All bond closings shall be held in Maricopa County unless an out-of-state closing is able to be combined with other City business or circumstances dictate otherwise. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK III-19 THIS PAGE INTENTIONALLY LEFT BLANK SECTION IV INDEX THIS PAGE INTENTIONALLY LEFT BLANK IV. INDEX Page Advance Refunding .............................................................................................................................. III-18 Arbitrage Rebate .................................................................................................................................. III-16 Arizona Water Infrastructure Finance Authority .............................................................................. I-11, III-2 Assessment Districts ............................................................................................................................... III-9 Bond Closings ...................................................................................................................................... III-19 Bond Insurance .................................................................................................................................... III-15 CAFR ................................................................................................................................................... III-16 Capital Appreciation Bonds ........................................................................................................ III-11, III-18 Capital Improvement Plan Summary ..................................................................................................... II-59 Community Facilities District Bonds ..................................................................................................... III-11 Competitive Sale .......................................................................................................................... I-11, III-13 Conduit Securities ................................................................................................................................ III-17 Continuing Disclosure of City Financial Information ............................................................................. III-16 Current Refunding ................................................................................................................................ III-18 Debt Limit............................................................................................................................................. II-53 Debt Management Policy ................................................................................................................. I-2, III-1 Derivatives ................................................................................................................................. III-13, III-16 General Obligations .............. I-1, I-5, I-6, I-11, II-9, II-10, II-11, II-13, II-53, II-54, II-55, II-59, II-63, III-3, III-4 Grants .................................................................................................................................................... III-2 Gross Savings ....................................................................................................................................... III-18 Highway Revenue Bonds ...................................................................................................................... II-19 Investment of Bond Proceeds ............................................................................................................... III-17 Lease-Purchase Obligations .................................................................................................................... III-7 Local Improvement Districts ................................................................................................................... III-9 Maturity Structures ............................................................................................................................... III-18 Method of Sale ..................................................................................................................................... III-12 Municipal Property Corporation ............................................................................................................ II-29 Negotiated Sale ............................................................................................................................ I-11, III-13 Pay-As-You-Go Financing ....................................................................................................................... III-1 Present Value Savings .......................................................................................................................... III-18 Prior Redemption ................................................................................................................................. III-17 Public Facilities Corporation ................................................................................................................. II-37 Ratio Analysis ....................................................................................................................................... II-72 Refunding ............................................................................................................................................ III-18 Retentions ............................................................................................................................................ III-15 Revenue Bonds ...................................................................................................................................... III-5 Short-Term Debt .................................................................................................................................. III-18 Taxable Alternatives ............................................................................................................................. III-12 Underwriter Selection .......................................................................................................................... III-13 Variable Rate Debt ..................................................................................................................... III-11, III-18 Water and Sewer Revenue Bonds .......................................................................................................... II-12 IV-1 THIS PAGE INTENTIONALLY LEFT BLANK APPENDIX A RATING AGENCY REPORTS THIS PAGE INTENTIONALLY LEFT BLANK GENERAL OBLIGATION RATINGS THIS PAGE INTENTIONALLY LEFT BLANK THIS PAGE INTENTIONALLY LEFT BLANK New Issue: MOODY'S DOWNGRADES GLENDALE, ARIZONA'S G.O. AND EXCISE TAX RATINGS; OUTLOOK REVISED TO STABLE FROM NEGATIVE Global Credit Research - 09 Feb 2011 APPROXIMATELY $$815.6 MILLION OF DEBT AFFECTED Glendale (City of) AZ Municipality AZ Moody's Rating ISSUE RATING Excise Tax Revenue Bonds, Second Lien Series 2011A (Tax-Exempt) Sale Amount $107,000,000 Expected Sale Date 02/15/11 Rating Description Sales and Use Tax, Second Lien A1 Excise Tax Revenue Bonds, Taxable Second Lien Series 2011B Sale Amount $9,000,000 Expected Sale Date 02/15/11 Rating Description Sales and Use Tax, Second Lien A1 Moody's Outlook Stable Opinion NEW YORK, Feb 9, 2011 -- Moody's Investors Service has downgraded the City of Glendale, Arizona's general obligation and excise tax ratings as follows: the city's general obligation rating (affecting $223.0 million in outstanding bonds)was revised to Aa2 from Aa1; the senior lien excise tax rating (affecting $269.7 million) was revised to Aa3 from Aa2, the second lien excise tax rating (affecting $123.2 million, including the current offering) was revised to A1 from Aa3; and the third lien excise rating (affecting $199.8 million) was revised to A2 from A1. The current credit review was conducted in conjunction with the city's upcoming offering of Glendale Municipal Property Corporation Excise Tax Revenue Bonds, Second Lien Series 2011A (Tax-Exempt) and Taxable Second Lien Series 2011B in the aggregate amount of approximately $110.9 million. In addition to these rating actions, Moody's has revised the outlook on the city's general obligation and related ratings to stable from negative. The current offering is secured by rental payments to be made by the city to the corporation under a lease agreement; the city's obligation to make lease payments is unconditional and not subject to appropriation. The city has pledged a second lien on its excise tax revenues, which consist of unrestricted local sales and use taxes, state shared revenues, and other fees and charges to make such payments. Additionally, the city has pledged future parking revenues (if any) associated with arena events to the Series 2011 bonds. RATING RATIONALE The rating and downgrade reflects the city's high debt burden, high leverage of the city's largest general fund revenue, relatively low debt service coverage of all three liens of excise tax revenue bonds and the declining trend of pledged revenues. The city's Aa2 general obligation rating reflects its weakened local economy which benefits from its position as a sports and entertainment destination even during the recession, a large tax base, below average socioeconomic indices, and narrowed but still healthy financial reserves which help mitigate the reliance on economically sensitive revenues. PLEDGED EXCISE TAX REVENUES, WHICH HAVE DECLINED IN RECENT YEARS, PROVIDE NARROWED, YET ADEQUATE DEBT SERVICE COVERAGE The current offering significantly increases the amount of the city's total excise tax debt to approximately $592.6 million, which is a contributing factor in the rating assignment. Debt service coverage of the city's excise tax bonds is well below average when compared to the local peer group. In Arizona, excise tax revenues typically comprise two-thirds of operating revenues and, correspondingly, coverage levels for excise tax bonds are strong, generally in the double-digit range. Fiscal 2010 pledged revenues provide coverage of maximum annual senior lien debt service of 4.8 times. With the addition of the current offering, fiscal 2010 pledged revenues provide maximum annual second lien debt service coverage of 3.4 times, and third lien coverage of 2.4 times. Pledged revenues include Glendale's unrestricted local sales and use tax collections derived from a 1.2% tax rate, the city's distribution of state shared sales and income tax monies, as well as various franchise fees, licenses and permit revenues. In fiscal 2010, the local sales tax revenues comprised 49.8% of the pledged excise tax revenues, the state-shared sales tax revenues 16.5%, state-shared income tax revenues 29.0%, and licenses and permits 4.7%. From fiscal 2005 to 2010, Glendale's excise tax collections increased at a somewhat flat average annual rate of 1.9%. This figure includes a 7.2% decline in fiscal 2009 and an 8.7% decline in fiscal 2010. The city currently estimates that total fiscal 2011 excise tax revenues will decline again by 5.6%; the city sales tax will be between $55.5 million (a 3.1% increase over 2010); stateshared sales taxes projected at $17.7 million (a 0.5% decline over 2010); and state-shared income taxes projected at $23.7 million (a 24.4% decline over 2010). Moody's notes that given the two-year lag in the disbursement of income tax revenues to local governments, the fiscal 2011 amount is known. Licenses and permit revenues are budgeted to be flat (a modest 0.8% increase). Moody's notes that the amount of debt service supported by the general fund is substantial, reflective of management's decision to highly leverage the city's primary operating resource. Total maximum annual excise tax debt service will represent a substantial 28.6% of fiscal 2010 general fund revenues (not including transfers). Although new additions to the city's retail base helped mitigate revenue declines during the recession, the sluggish recovery continues to have a negative effect on the growth of pledged revenues. Over the long term, city officials expect to fully support these long term debt obligations from anticipated revenues associated with the economic development projects around the NHL Arena, Cardinal Stadium, and Cabela's primarily from new sales tax dollars, parking revenues, and event ticket surcharges. CURRENT OFFERING FUNDS THE PURCHASE OF PARKING RIGHTS ASSOCIATED WITH NHL FRANCHISE; LEGAL CHALLENGE MAY RESULT IN ADDITIONAL RISK TO BOND HOLDERS The bonds fund the purchase of the rights to parking facilities attributable to the Jobing.com Arena, a 17,500 seat multipurpose facility which is owned by the city and is home to the Phoenix Coyotes, a National Hockey League team. The city will purchase the right to receive parking revenues from the parking facilities (approximately 5,500 surface lot spaces) from the Coyotes new owners. Glendale constructed the Jobing.com Arena in 2003 and the hockey team is the primary tenant. Following the bankruptcy filing of the former owner of the team and an attempt to sell the Coyotes to a potential buyer seeking move it to Canada, the NHL purchased the assets and liabilities of the former team owner and former arena manager. The NHL now plan to sell the Phoenix Coyotes, including the parking rights to Coyotes Newco, LLC. Using the proceeds of the Series 2011 bonds, the city will obtain all of the rights to charge and to receive revenues in connection with the right to use 5,500 parking spaces for events at the arena. In addition, the team, the arena manger and the city will enter into an arena lease and management agreement (ALMA), to be executed and delivered concurrently with the delivery of the current offering, as well as a 30 season use and non-relocation agreement with the team. The current offering is subject to litigation risk. The Goldwater Institute is currently conducting an investigation of this transaction and has threatened litigation if the institute feels that the transaction constitutes a "gift of public funds". In addition to the bond counsel opinion, the city has engaged a special counsel to provide an "enforceability opinion" which states that the agreements between the city and the team are legal, valid and binding obligations. The opinion relies, in part, upon a market valuation report performed by CBRE Consulting which evaluates the value of benefits the city will receive from the purchase of the parking rights and other benefits. ADEQUATE LEGAL PROVISIONS SECURE CURRENT OFFERING OF SECOND LIEN EXCISE TAX BONDS; ABSENCE OF FULLYFUNDED DEBT SERVICE RESERVE IS A CREDIT WEAKNESS The legal provisions under the trust indenture are satisfactory, given that rental payments from the city to the corporation are unconditional and are not subject to annual appropriation. The rental payments are secured by a second lien pledge on the city's excise tax revenues (more fully described below) and a lien on parking revenues attributable to the facilities. Currently, parking at the arena is free, so there are no pledged parking revenues at this time. Legal provisions delineate an additional bonds test and rate covenant for combined senior, and junior lien obligations of 2.0 times and seniors only of 3.0 times. There is no debt service reserve requirement for the second lien obligations, which Moody's believes is a credit weakness. An approximately $8.6 million revenue stabilization account funded with proceeds of the Series 2011B bonds provides a modest amount of additional bondholder security. Amounts in the revenue stabilization fund may be used at the direction of the city to pay debt service on 2011 bonds, upon a determination by the city that the amount of revenues derived by the city from the parking facilities during the preceding fiscal year is less than rental payments related to debt service on the Series 2011 bonds for the current fiscal year. Moody's notes, however, that the city is not obligated to replace any amounts withdrawn from the revenue stabilization fund. COMMERCIAL AND RESIDENTIAL EXPANSION SLOWING AS A RESULT OF THE STAGNANT RECOVERY FROM THE RECESSION Glendale's economy is characterized by growing commercial and residential activity with a significant military presence. Luke Air Force Base is the city's largest employer with over 8,000 employees including reserves and civilians. Other major employers within the city include retail, health care, local government and manufacturing. The American Automobile Association operates a regional corporate office in Glendale with approximately 1,175 employees. The Jobing.com Arena, as well as the University of Phoenix Stadium, home to the Arizona Cardinals, together with a new spring training stadium for Chicago White Sox and Los Angeles Dodgers are expected to increase the city's destination appeal and further boost sales and use tax revenues over the long term. The hockey arena, which is located near Loop 101 and Glendale Avenue, is also used for concerts and other similar events. Spurred by both residential and commercial construction, tax base growth has averaged 11.4% annually for the most recent five-year period, which is slightly above the national median for cities. However, the city's 2010 full market value declined slightly, by 1.9%, and then by a substantial 16.0% in 2011 reflecting the lagged impact of lower property values and slowed commercial construction. Consistent with the expectations of other Phoenix area local governments, Moody's anticipates further taxbase declines for Glendale in 2012. Despite these declines, the city's taxbase remains substantial at $17.3 billion in 2011, which is above average in size with other similarly rated cities in the western states. The city's secondary assessed value (AV) is comprised of primarily residential property (55%), followed by commercial and industrial entities (40%). The city has relatively little agricultural and vacant land (5%) and build out is estimated in about 10 to 15 years. Top ten taxpayers represent a modest 7.1% of AV, and primarily comprised of a hospital, utilities, a large retail center, and warehouses. According to 2006 - 2008 U.S. Census estimates, wealth indices for Glendale are below the median for Aa1 rated cities nationally with per capita and median family incomes at 91.9% and 99.8% of state levels respectively. NARROWED, YET STILL HEALTHY RESERVE LEVELS DESPITE RECENT OPERATING DEFICITS Despite recent declines in general fund balances, Glendale's financial position remains in line with its peers nationally. The city has experienced large operating deficits over the last two years. In fiscal 2009, Glendale's general fund balance declined by $13.8 million to $52.6 million (35.5% of general fund revenues) and declined by an additional $13.8 million (estimated) in fiscal 2010 to $38.8 million (27.5% of general fund revenues). Although these balances approximate the national median for cities and are well within the norm for cities in its peer group, they are somewhat below the norm for cities in Arizona. The city's excise tax revenues, which typically account for approximately three-fourths of general fund revenues, are comprised of state and local sales taxes, state income taxes, and state motor vehicle in-lieu taxes. Excise tax revenues declined by 7.2% in fiscal 2009 and 8.7% in fiscal 2010 and contributed to the city's operating deficits. Of continued concern, Moody's notes that the amount of debt service supported by the general fund is substantial, reflective of management's decision to highly leverage the city's primary operating resource. Total maximum annual excise tax debt service will represent a substantial 28.6% of fiscal 2010 general fund revenues. In response to its budget challenges, the city implemented ongoing and one-time cuts in fiscal 2009 and additionally implemented ongoing cuts at the start of fiscal 2010 and continuing into fiscal 2011. The city's overall authorized staffing peaked in fiscal year 2009 at 2,200 FTE's and is at 1,971 for fiscal year 2011, a reduction of 234 FTE's or 10.5%. Challenges for the city's fiscal 2011 financial operations remain however. Although expenditures are approximately $2.1 million (2.8%) below budget for the first six months of the fiscal year, general fund revenues are $4.3 million below budget ($5.8%). Given the stagnant economy, Moody's believes there is a high likelihood that additional budgetary pressures will remain through fiscal 2012. Moody's considers the city's practice of maintaining healthy general fund reserves an important credit factor given the city's dependence on economically sensitive local and state revenue streams. Over the long term, Moody's expects management to maintain healthy general fund reserves to offset reliance on local and state sales taxes. DEBT LEVELS EXPECTED TO REMAIN HIGH With the current offering, Glendale's direct and overall debt burdens remain high and are well above similarly rated cities across the nation. The city's direct debt burden of 4.8% is nearly five times the national median of 1.0%. Overall debt measures 6.9% of full value, well in excess of national medians for all cities of 2.6%. Approximately 69% of the city's direct debt is attributable to the $592.6 million in excise tax debt which will be outstanding with the current offering. Management has no near-term general fund borrowing plans. What could move the rating - UP - Substantial appreciation in socioeconomic measures - Significant improvement in financial performance resulting in reserve levels that outpace the city's rating peer group What could change the rating - DOWN - Continued deterioration of financial position - Prolonged downturn in the local economy - Continued decline in excise tax revenues - Significant additional leveraging of general fund resources Outlook The stable outlook reflects Moody's expectation that slowly stabilizing economic conditions in the region will enable the city to maintain its current satisfactory financial position despite ongoing budgetary challenges. The outlook also anticipates that future general fund secured borrowing will be minimal until economic conditions rebound and debt affordability improves. KEY STATISTICS Coverage of senior lien MADS by FY 2010 pledged excise tax revenues: 4.8 times Coverage of second lien MADS by FY 2010 pledged excise tax revenues: 3.4 times Coverage of third lien MADS by FY 2010pledged excise tax revenues: 2.4 times Fiscal 2010 pledged revenues: $108.0 million Average annual growth in pledged revenues, 2005 to 2010: 1.9% 2009 estimated population: 249,811 2006 - 2008 estimated per capita income: $23,351 (91.1% of state) 2006 - 2008 estimated median family income: $60,351 (99.8% of state) 2006 - 2008 estimated median housing value: $236,000 (100.6% of state) Full value, 2011: $17.3 billion Average annual growth in full value, 2006 to 2011: 11.4% Full value per capita: $69,332 Direct debt burden: 4.8% Overall debt burden: 6.9% FY10 general fund balance: $38.8 million (27.6% of revenues) FY10 available general fund balance: $29.5 million (21.0% of revenues) PRINCIPAL METHODOLOGY The principal methodology used in this rating was Piercing the G.O. Ceiling published in December, 2008. REGULATORY DISCLOSURES Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Analytics information. Moody's Investors Service considers the quality of information available on the credit satisfactory for the purposes of assigning a credit rating. Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history. The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information. Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery. Analysts Patrick Ford Analyst Public Finance Group Moody's Investors Service Dan Steed Backup Analyst Public Finance Group Moody's Investors Service Matthew A. Jones Senior Credit Officer Public Finance Group Moody's Investors Service Contacts Journalists: (212) 553-0376 Research Clients: (212) 553-1653 Moody's Investors Service 250 Greenwich Street New York, NY 10007 USA © 2011 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC.'S ("MIS") CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. 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THIS PAGE INTENTIONALLY LEFT BLANK WATER AND SEWER REVENUE OBLIGATIONS RATINGS THIS PAGE INTENTIONALLY LEFT BLANK THIS PAGE INTENTIONALLY LEFT BLANK New Issue: MOODY'S ASSIGNS Aa3 RATING TO GLENDALE WATER & SEWER REVENUE BONDS Global Credit Research - 03 Nov 2010 APPROXIMATELY 291.1 MILLION IN SUBORDINATE LIEN DEBT AFFECTED Glendale (City of ) AZ Water & Sewer Ent. Water/Sewer AZ Moody's Rating ISSUE RATING Subordinate Lien Water and Sewer Revenue Obligations, Series 2010A (Taxable Direct Pay Build America Bonds) Sale Amount $15,670,000 Expected Sale Date 11/08/10 Rating Description Water & Sewer Revenue Aa3 Subordinate Lien Water and Sewer Revenue Obligations, Series 2010B (Tax Exampt) Sale Amount $10,000,000 Expected Sale Date 11/08/10 Rating Description Water & Sewer Revenue Aa3 Opinion NEW YORK, Nov 3, 2010 -- Moody's Investors Service has assigned a Aa3 rating to the City of Glendale, Arizona, Subordinate Lien Water and Sewer Revenue Obligations Series 2010A (Taxable Direct Pay Build America Bonds) and Series 2010B (Tax Exempt) in the aggregate amount of $25.7 million. The rating affects approximately $291 million in outstanding subordinate lien water and sewer bonds. The current offering is secured by a subordinate lien pledge on the water and sewer system net revenues. The bulk of the bond proceeds will finance system improvements including expansion of wastewater treatment facilities, replacement and rehabilitation of water lines, upgrades to an existing water treatment plant, the construction of a new water treatment plant and associated transmission lines, and other capital improvements. RATING RATIONALE The rating reflects a growing and largely residential customer base, and a history of regular rate increases which have continued to provide satisfactory debt service coverage despite a large capital plan funded primarily with subordinate lien debt. COMBINED UTILITY SERVES CITY OF GLENDALE The combined water and sewer system primarily serves the City of Glendale (GO rated Aa1 with negative outlook), with a total population of approximately 249,811. The utility's customers are largely residential in nature with 61,110 water and 56,709 sewer accounts. Growth in water and sewer customer accounts has averaged 0.5% and 0.4% annually, respectively, since 2005 with growth conservatively projected to slow slightly going forward. The water system utilizes surface water primarily from the Salt River Project (52%), as well as Central Arizona Project water and supplemented by eight city-owned and operated wells. Water production capacity currently totals 105.1 MGD and is supplied from three water treatment plants (90.5 MGD) and various city wells (14.6 MGD). This treatment capacity compares favorably to an average treatment level of 47.7 MGD and maximum of 71.8 MGD (2009). Storage capacity from tanks and reservoirs totals over 67 MG providing additional flexibility to meet peak demands. At build-out, the city anticipates that a total water treatment capacity of 119 MGD will be required. To address growth, officials plan to construct two new treatment plants by 2015. The city's wastewater treatment system consists of three treatment plants, two of which are city-owned and operated. At the 91st Avenue Wastewater Treatment Plant, the city owns 13.2 MGD of plant capacity. This facility is operated by the City of Phoenix and is jointly owned by the cities of Phoenix, Scottsdale, Mesa, Tempe and Glendale. The city's two other reclamation facilities, with a combined treatment capacity of 16.0 MGD, are both operating below average daily flows. The city also owns the Glendale Aquifer Recharge Facility that has a capacity to recharge up to 7 MGD of treated effluent for which the city receives well water credits from the state. SIGNIFICANT CAPITAL PLAN TO BE SUPPORTED BY SUBORDINATE LIEN DEBT The current offering is the fifth issuance of subordinate lien debt which comprises the bulk of the combined utility's obligations at $291.1 million, compared to $14.6 million in senior debt (comprised of two state loans) and $8.9 million in general obligation utility debt. With a debt ratio of about 43.2% for fiscal 2010 (unaudited), the utility's debt levels slightly exceed median levels for combined utility systems. Payout of principal is also somewhat slower than typical at 43.0% in ten years, but not inconsistent with the useful life of the assets. Moody's notes that future borrowing for the utility is expected to be significant to support the city's capital improvement plan (CIP). The total water and sewer CIP budget for the next ten years beginning in FY11 is approximately $575 million and will be funded with additional bonds on an annual basis. The CIP supports water and sewer treatment projects, replacement of water and sewer lines, and security enhancements for other water and sewer facilities. Officials expect a majority of CIP related debt will be issued as subordinate lien revenue bonds. SIGNIFICANT RATE AND FEE INCREASES EXPECTED TO SUPPORT FUTURE CAPITAL NEEDS; TOTAL DEBT SERVICE COVERAGE HAS BEEN SATISFACTORY Since 2001, Glendale has made regular rate adjustments including substantial double-digit increases for both systems including 11% for each system in 2010 and 12% in 2011. The recent rate increases were especially important in offsetting declines in impact fee revenues, especially over the last three years, and contracting from comprising a peak of 12.9% of 2006 gross revenues compared to 1.2% in 2010. Coverage of annual debt service on the senior lien bonds has been favorable in recent years and was 4.17 times in fiscal 2010. Moody's expects coverage of debt service on the senior lien obligations to remain ample given that future borrowing will largely be comprised of subordinate lien debt and a modest amount of senior lien state loans. Coverage of combined senior and subordinate utility debt service was somewhat narrow at 1.32 and 1.24 times in 2008 and 2009, respectively, with annual debt service coverage by fiscal 2010 net revenues improving slightly to 1.42 times, and aggregate coverage (which includes debt service attributable to utility supported G.O. bonds) at 1.35 times, just short of meeting management's target of 1.40 to 1.50 times. Including the current offering of subordinate lien bonds, 2010 net revenues provided 1.31 times coverage of peak senior and subordinate lien debt service due to increased subordinate lien debt service requirements. Moody's believes the Glendale systems' debt service coverage levels are somewhat low for a Aa3 rated water and sewer enterprise and are well below the median total debt service coverage levels of 1.97 for Aa2 rated systems and 1.71 for Aa3 rated systems.. The city has maintained healthy cash balances in the utility over the last five years. Net working capital as a percent of gross revenues averaged 61.4% from FY 2006 to FY 2010 with an average of 392 days cash on hand over the same period. These figures remained healthy in fiscal 2010 at 66.2% ($51.0 million) and 390 days. With the utility's significant capital plan, future coverage levels rely on fairly substantial increases to rates and impact fees. To support the utility's significant future borrowing plans, Moody's expects the city to implement regular rate increases annually for both water and sewer service in order to keep pace with the issuance of additional debt. The current rating assignment is also based upon the expectation that future revenue adjustments will be sufficient to provide annual coverage levels at or above management's 1.4 to 1.5 times aggregate coverage target. SATISFACTORY LEGAL PROVISIONS The current offering is secured by a subordinate lien pledge on the water and sewer system net revenues. Currently, the only senior lien obligations are state loans in the amount of $14.6 million. The rate covenant and additional bonds test are equal to 1.2 times annual debt service on combined senior and subordinate obligations. Legal provisions are satisfactory with a standard debt service reserve requirement equal to the lesser of 10% of par, MADS, or 125% of average annual debt service. The reserve requirement is expected to be met with a surety from Assured Guaranty. KEY STATISTICS Type of system: Retail Water & Sewer Estimated service area population: 249,811 Number of water customers, 2010: 61,110 Number of sewer customers, 2010: 56,709 Water customer average annual growth, 2005 - 2010: 0.5% Sewer customer average annual growth, 2005 - 2010: 0.4% Fiscal 2009 Ratios Operating ratio: 60.6% Senior lien annual debt service coverage: 3.12x Senior & subordinate lien annual debt service coverage: 1.24x Total annual debt service coverage (includes system supported G.O. bonds): 1.18x Net working capital as a % of gross revenues: 59.6% ($41.3 million) Days cash on hand: 412 Debt ratio: 46.0% Fiscal 2010 Ratios (unaudited) Operating ratio: 57.6% Senior lien annual debt service coverage: 4.17x Senior & subordinate lien annual debt service coverage: 1.42x Total annual debt service coverage (includes system supported G.O. bonds): 1.35x Total maximum annual debt service coverage: 1.25x Net working capital as a % of gross revenues: 66.2% ($51.0 million) Days cash on hand: 390 Debt ratio: 43.2% PRINCIPAL METHODOLOGY The principal methodology used in rating Glendale (City of) AZ was Analytical Framework for Water and Sewer System Ratings rating methodology published in August 1999. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website. REGULATORY DISCLOSURES Information sources used to prepare the credit rating are the following: parties involved in the ratings, public information. Moody's Investors Service considers the quality of information available on the credit satisfactory for the purposes of assigning a credit rating. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history. The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information. Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery. Analysts Patrick Ford Analyst Public Finance Group Moody's Investors Service Dan Steed Backup Analyst Public Finance Group Moody's Investors Service Matthew A. Jones Senior Credit Officer Public Finance Group Moody's Investors Service Contacts Journalists: (212) 553-0376 Research Clients: (212) 553-1653 Moody's Investors Service 250 Greenwich Street New York, NY 10007 USA © 2010 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC.'S ("MIS") CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS DO NOT CONSTITUTE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS ARE NOT RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. CREDIT RATINGS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MIS ISSUES ITS CREDIT RATINGS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. 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The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations — Corporate Governance — Director and Shareholder Affiliation Policy." Any publication into Australia of this document is by MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Moody's Japan K.K. (“MJKK”) are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. In such a case, “MIS” in the foregoing statements shall be deemed to be replaced with “MJKK”. MJKK is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser. HIGHWAY USER REVENUE BONDS RATINGS THIS PAGE INTENTIONALLY LEFT BLANK PUBLIC FINANCE Primary Credit Analysts: Sussan Corson New York (1) 212-438-2014 sussan_corson@ standardandpoors.com Secondary Credit Analysts: Edward R McGlade New York (1) 212-438-2061 edward_mcglade@ standardandpoors.com Glendale, Arizona Credit Profile US$15.745 mil st & hwy user rev bnds ser 2006 due 07/01/2016 Sale date: 11-APR-2006 AA- AFFIRMED Outstanding gast tax bnds AA- Outstanding st & hwy user rev & rfdg AA-(SPUR) OUTLOOK: STABLE Rationale Standard & Poor’s Ratings Services assigned its ‘AA-‘ standard long-term rating, and stable outlook, to Glendale, Ariz.’s series 2006A and 2006B street and highway user revenue bonds. Standard & Poor’s also affirmed its ‘AA-‘ standard long-term rating and Standard & Poor’s underlying rating (SPUR), and stable outlook, on the city’s preexisting street and highway user revenue debt. The ratings reflect: Steady pledged revenue growth and solid 3.4x maximum annual debt service (MADS) coverage from fiscal 2005 revenues, Glendale’s strong diversified economic base (‘AA’ GO debt rating), Rapid maturity of debt and limited plans for additional parity debt, and Sound 2x historical additional bonds test. Mitigating factors include: The absence of a debt service reserve account, and The potential for changes to the statutory allocation of highway user revenues or RatingsDirect Publication Date April 4, 2006 fluctuations in motor vehicle registrations and motor vehicle fuel consumption that could lower coverage. A first-lien pledge on highway user revenues distributed to the city secures the bonds. Glendale, Arizona Glendale, in the northwest portion of the Phoenix MSA in Maricopa County, is Arizona’s fourthlargest city. The city’s population growth has been steady. Population increased by an average of 2.4% annually over the past five years to an estimated 236,030 in 2005. Revenue allocations to Glendale increased by an average of 4% annually since fiscal 2000 to $15.9 million in fiscal 2005. Fiscal 2005 revenues cover pro forma MADS in 2012 by 3.4x. The formula for the state’s revenue distribution is based on proportional population growth for cities within Maricopa County. Management estimates a small decline in Glendale’s distribution of highway user revenue fund money in fiscal 2007 to $15.8 million due to the mid-decade U.S. Census and the rapid population growth rate of other cities within the county, which exceed Glendale’s population growth rate. Including the series 2006 issuance, the city will have roughly $36 million of street- and highwaysupported debt outstanding that is scheduled to retire by 2016. Officials plan to issue an additional $6.5 million of highway user revenue fund debt in fiscal 2010. Legal provisions for the sale of additional debt require a minimum 2x MADS coverage by pledged revenues in the preceding 12-month period. The legal structure, however, does not require a debt service reserve account. Total state highway user tax revenues increased by an average of 4% annually since fiscal 2000 to $1.245 billion in fiscal 2005. The state collects highway user revenues, including motor vehicle fuel taxes, and registration; license; and motor carrier fees, which it then distributes monthly to cities according to a formula based on population and point-of-fuel sales. Cities receive revenues distributed from a 27.5% share of the state fund; and cities with a population in excess of 300,000 receive an additional distribution based on a total 3% share of collections. Glendale officials expect to receive this additional distribution once its population reaches 300,000, which management, based on its current general master plan, forecasts will occur between 2015 and 2020. Outlook The stable outlook reflects the expectation that the city’s allocation of highway user revenues will continue to grow based on statewide trends and that the city’s issuance of minimal additional parity debt within the next few years should allow it to maintain sound debt service coverage levels. Standard & Poor’s | ANALYSIS 2 Glendale, Arizona Published by Standard & Poor's, a Division of The McGraw-Hill Companies, Inc. Executive offices: 1221 Avenue of the Americas, New York, NY 10020. Editorial offices: 55 Water Street, New York, NY 10041. Subscriber services: (1) 212-438-7280. Copyright 2006 by The McGraw-Hill Companies, Inc. Reproduction in whole or in part prohibited except by permission. All rights reserved. Information has been obtained by Standard & Poor's from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Standard & Poor's or others, Standard & Poor's does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or the result obtained from the use of such information. Ratings are statements of opinion, not statements of fact or recommendations to buy, hold, or sell any securities. Standard & Poor's uses billing and contact data collected from subscribers for billing and order fulfillment purposes, and occasionally to inform subscribers about products or services from Standard & Poor's, our parent, The McGraw-Hill Companies, and reputable third parties that may be of interest to them. All subscriber billing and contact data collected is stored in a secure database in the U.S. and access is limited to authorized persons. 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Permissions: To reprint, translate, or quote Standard & Poor's publications, contact: Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-9823; or by e-mail to: research_request@standardandpoors.com. www.standardandpoors.com 3 THIS PAGE INTENTIONALLY LEFT BLANK Global Credit Research New Issue 7 APR 2006 New Issue: Glendale (City of) AZ MOODY'S ASSIGNS Aa3 RATING TO CITY OF GLENDALE, AZ., STREET AND HIGHWAY USER REVENUE BONDS SERIES 2006 APPROXIMATELY $36 MILLION IN PARITY DEBT AFFECTED, INCLUDING CURRENT OFFERING Municipality AZ Moody's Rating ISSUE Street and Highway User evenue Bonds, Series 2006 $15,745,000 Sale Amount RATING Aa3 Expected Sale Date 04/11/06 Rating Description Highway User Revenue Fund Bonds Opinion NEW YORK, Apr 7, 2006 -- Moody's Investors Service has assigned an Aa3 rating to the City of Glendale, Arizona, Street and Highway User Revenue Bonds, Series 2006 in the approximate amount of $15.7 million. Bond proceeds will finance the purchase of right of ways for various highway and street corridor improvements. The current offering is secured by a first lien on the city's highway user tax revenues, including motor fuel taxes and vehicle registration fees, which are collected by the state and distributed to municipalities based upon population and point of sale. At this time, Moody's affirms the Aa3 rating on the city's outstanding parity lien debt totaling $20.2 million. The Aa3 rating reflects sound coverage of peak debt service by pledged revenues, no plans for future parity debt until 2010, and satisfactory legal provisions. The city's general credit characteristics as an Aa2 general obligation rated city were also incorporated into the rating including continued economic development, tax base expansion, and return to solid financial reserves, which help mitigate the reliance upon economically sensitive revenues. These credit strengths further offset somewhat below average wealth indices and high debt levels. For additional information on the city's general credit rating, please refer to the City of Glendale's New Issuer Report, published on April 7, 2006. SOUND COVERAGE OF PEAK DEBT SERVICE BY PLEDGED REVENUES Moody's expects pledged revenues will continue to provide sound coverage of debt service given no plans for additional borrowing in the near term and anticipated modest revenue growth. Pledged revenues in fiscal 2005 totaled $15.9 million providing a sound 3.4 times coverage of peak debt service (in 2013), up from fiscal 2003 levels of 2.6 times. Improvement in coverage is attributable to lower peak debt service as well as growth in pledged revenues, which have averaged nearly 4% increases annually over the last five years. Receipts up to February 2006 are healthy and measure 6% above prior year collections during the same period. Highway user revenue fund (HURF) revenues are comprised primarily of motor fuel taxes (54%), followed by vehicle license fees (26%) and registration fees (12%). These revenues are collected by the state with allocations made to cities based upon a formula that incorporates relative population and point of sale. Pledged revenues not used for debt service are restricted to highway-related capital projects. LIMITED HURF BORROWING PLANS & SATISFACTORY LEGAL PROVISIONS No additional HURF borrowing is planned until 2010, at which time management anticipates issuing $6.5 million in bonds. The city's HURF bond debt structure is typical for its security class with 95% of debt principal amortized within ten years. Satisfactory legal provisions include an additional bonds test equal to two times maximum annual debt service. Typical of other Arizona city HURF bonds, the current offering does not include a debt service reserve. KEY STATISTICS 2005 Estimated population: 236,030 2005 Pledged revenues: $15.9 million Coverage of MADS by FY05 pledged revenues: 3.4 times Payout of principal on HURF debt only (10 years): 95% Average annual growth in pledged revenues, 2000 to 2005: 3.98% Additional Bonds Test: 2 times peak debt service Debt service reserve: none Direct debt burden: 4.1% Overall debt burden: 5.9% Analysts Jolene K. Yee Analyst Public Finance Group Moody's Investors Service Dan Steed Backup Analyst Public Finance Group Moody's Investors Service Matthew Jones Senior Credit Officer Public Finance Group Moody's Investors Service Contacts Journalists: (212) 553-0376 Research Clients: (212) 553-1653 © Copyright 2006, Moody's Investors Service, Inc. and/or its licensors including Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved. 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THIS PAGE INTENTIONALLY LEFT BLANK TRANSPORTATION REVENUE OBLIGATION RATINGS THIS PAGE INTENTIONALLY LEFT BLANK PUBLIC FINANCE Glendale, Arizona Primary Credit Analysts: Scott Sagen New York (212) 438-5126 scott_sagen@ standardandpoors.com Secondary Credit Analysts: Sussan Corson New York (1) 212-438-2014 sussan_corson@ standardandpoors.com Credit Profile US$110. mil transp excise tax oblig ser 2007 due 06/30/2037 Long Term Rating AA/Stable New Rationale Standard & Poor’s Ratings Services assigned its ‘AA’ rating, and stable outlook, to Glendale, Ariz.’s series 2007 transportation excise tax revenue obligations. The rating reflects the city’s: ƒ Underlying credit strengths (‘AA’ GO debt rating), including its participation in the diverse Phoenix MSA; ƒ Solid maximum annual debt service (MADS) coverage of 2.1x; and ƒ Sound legal covenants with an additional bonds test of 2.0x MADS and 1.5x debt service coverage (DSC). These strengths are mitigated, in part, by the city’s: ƒ Absence of an upfront debt service reserve fund, though a 1.75x springing reserve is provided; and ƒ Plans for additional bonding against pledged revenues and below-average debt amortization. An electorate-approved 0.5% transportation excise tax passed in 2001, levied to fund transportation improvements and transit programs, secures the obligations. The sales tax, which became effective Jan. 1, 2002, does not have a termination date; officials will use proceeds to fund ongoing transit operating costs. The 57-square-mile Glendale is in Maricopa County in the northwest Phoenix MSA, nine RatingsDirect Publication Date Sept. 24, 2007 miles from downtown Phoenix, Ariz. Population has increased steadily to an estimated 244,770 in 2007. Full cash value has also increased by an average of 5% annually over the past five years to $10.3 billion in fiscal 2007. Market value of $42,000 per capita, however, Glendale, Arizona reflects below-average wealth levels compared with similar size cities nationwide. Per capita retail sales accounted for 100% of the national level in 2006. The city’s pledged transportation excise tax revenues have increased by an average of 11.5% annually over the past three years to an estimated $25 million for fiscal 2007, providing solid MADS coverage at 2.17x occurring in 2013. Pledged excise tax revenue collections were also 11% higher through the first three quarters of fiscal 2007 compared with fiscal 2006 levels. Retail development, which has primarily caused collections to increase, is the largest excise tax category, accounting for 16% of fiscal 2007 pledged tax revenues. Excise sales associated with large amusement facilities — such as the National Football League’s (NFL) Arizona Cardinals and National Hockey League’s (NHL) Phoenix Coyotes — account for 12% of total excise tax revenues. Construction, which should decline due to a slowing housing market, is the next leading excise tax category, generating just 4.4% of total revenues. Conservative excise tax growth projections estimate 4%-7% growth from fiscals 2009-2012. The largest sales tax generator provides roughly 8% of total sales tax revenues. Glendale’s sound additional bonds test and debt service covenant provide additional credit stability despite the city’s plans for additional debt and the absence of a fully funded reserve fund. Sound legal provisions include a 2.0x additional bonds test and an ability to increase the 0.5% transportation excise tax rate without electorate approval if annual DSC reaches 1.5x. Officials dedicate pledged revenues solely to funding transportation needs, increasing the likelihood of bonding down to the 2x additional bonds test. Management plans to issue $114 million over the next five years to extend transportation improvement projects and has preliminary plans to issue roughly $36 million in 2008. Legal provisions also provide for a springing reserve account, in which the city will begin to support a reserve fund if, in any year, DSC declines below 1.75x. If transportation excise tax revenues produce DSC of less than 1.75x, management will begin supporting the reserve fund at a rate of one-thirty-sixth for 36 months. Amortization of principle should slow with 28% of principal being retired over 10 years and 70% being retired over 20 years. Outlook The stable outlook reflects the expectation that the city’s large sales tax base and current excise tax growth will continue to provide adequate MADS coverage and that city management will adhere to its sound legal covenants. In addition, we believe management will effectively monitor its plans for additional needed debt under its long-term transportation capital plan. A Strong And Diverse Tax Base The local economy is centered on aerospace, communications, health, chemical, and agriculture industries. In addition to the many employment opportunities throughout the MSA, Glendale’s leading employers include: ƒ Luke Air Force Base (8,400 employees), ƒ Arrowhead Towne Center (2,500), and ƒ Banner Thunderbird Health System (2,036). The city’s 3.7% unemployment in 2006 was below the state’s 4.2% rate and the nation’s 4.6% rate. City median household effective buying income was a slightly above-average 104% of national levels in 2006, but per capita effective buying income indicators are below the national average at roughly 89%. Standard & Poor’s | ANALYSIS 2 Glendale, Arizona Secondary assessed value growth has increased by a significant 7.5% annually over the past five years to $1.37 billion in fiscal 2007. A new multipurpose NFL stadium — serving as the new site of the annual college football Fiesta Bowl, as well as hosting the Super Bowl in 2008 — and an NHL arena have opened over the past couple of years. Additional commercial and retail development around the arena and stadium has opened within the past year, including a new AMC theater, restaurants, and a Cabela’s outdoor retail store. City officials expect completion of several hotels and a conference center, as well as further office and condominium development, in the area within the next year, which should contribute to additional assessed value and sales tax growth. Transportation Capital Improvements Increase Transit Use The Glendale Onboard Transportation Plan consists of 50 different projects to improve service for all transportation modes, including transit, street, bicycle, pedestrian, and aviation. Glendale residents indicated that having transportation choices and being connected to regional activities and employment centers were important. A citizen’s transportation oversight committee, created in 2002, ensures the completion of electorate-approved program projects in a timely and cost-effective manner. Management is creating a new transportation management plan to help identify and prioritize capital projects for the next five years. All modes of transit have experienced increases in use; overall transit ridership is up by 76% since 2001. Management has already completed more than 20 projects under the 25-year long-term capital plan. Current projects under construction include the Northern Parkway’s 12.5-mile extension and pedestrian enhancements to the downtown area. Management will use pledged 0.5% transportation excise tax revenues to fund half the transportation plan. Federal, state, and regional programs will fund 43% of the plan while bonds, ridership fares, and city general funds will support the remainder. Ratings Detail (As Of 24-Sep-2007) Glendale transp excise tax oblig ser 2007 due 06/30/2032 Long Term Rating www.standardandpoors.com AA/Stable New Rating 3 Glendale, Arizona Published by Standard & Poor's, a Division of The McGraw-Hill Companies, Inc. Executive offices: 1221 Avenue of the Americas, New York, NY 10020. Editorial offices: 55 Water Street, New York, NY 10041. Subscriber services: (1) 212-438-7280. Copyright 2007 by The McGraw-Hill Companies, Inc. Reproduction in whole or in part prohibited except by permission. All rights reserved. Information has been obtained by Standard & Poor's from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Standard & Poor's or others, Standard & Poor's does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or the result obtained from the use of such information. Ratings are statements of opinion, not statements of fact or recommendations to buy, hold, or sell any securities. Standard & Poor's uses billing and contact data collected from subscribers for billing and order fulfillment purposes, and occasionally to inform subscribers about products or services from Standard & Poor's, our parent, The McGraw-Hill Companies, and reputable third parties that may be of interest to them. All subscriber billing and contact data collected is stored in a secure database in the U.S. and access is limited to authorized persons. 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Standard & Poor’s | ANALYSIS 4 Global Credit Research New Issue 5 OCT 2007 New Issue: Glendale (City of) AZ MOODY'S ASSIGNS A1 RATING TO GLENDALE'S TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS SERIES 2007 $110 MILLION OF DEBT AFFECTED Municipality AZ Moody's Rating ISSUE RATING Transportation Excise Tax Revenue Obligations A1 $110,000,000 Sale Amount 10/16/07 Expected Sale Date Revenue bonds Rating Description Opinion NEW YORK, Oct 5, 2007 -- Moody's Investors Service has assigned an A1 rating to Glendale's (AZ) $110.0 million Transportation Excise Tax Revenue Obligations, Series 2007. At this time Moody's also affirms the city's Aa2 G.O. bond rating and the Aa3 rating on the city's general excise tax obligations. The current offering is secured by a gross, first-lien pledge on the city's 0.5% transportation excise tax, which also support local public transportation costs. Proceeds from the current issue will be used for various, voter approved, transportation related capital projects. The A1 rating reflects Moody's expectation that coverage of debt service on both a gross and net basis will remain sound given anticipated economic and population growth, sizeable, but manageable future transportation borrowing plans, and the credit strength provided by the 2.0 times maximum annual debt service additional bonds test. The A1 rating also reflects the city's general credit characteristics including solid financial reserves, which help mitigate the reliance upon economically sensitive revenues. These credit strengths further offset somewhat below average wealth indices and high debt levels. SOUND LEGAL PROVISIONS Sound legal provisions for the current sale include an additional bonds test of 2.0 times maximum annual debt service (MADS). In addition, a debt service reserve requirement will be triggered should pledged revenues fall below 1.75 times MADS, requiring full funding over a three year period. The reserve requirement is equal to the lesser of MADS, 125% of annual debt service, or 10% of par. Unlike most excise tax obligations, the city has also included a 1.5 times rate covenant from prior year's revenues, although the city's ability and willingness to raise the dedicated, voter-approved tax rate remains to be tested. SATISFACTORY COVERAGE LEVELS EXPECTED TO CONTINUE GIVEN RECENT LOCAL SALES TAX GROWTH AND GROWING ECONOMY DESPITE SIGNIFICANT BORROWING PROGRAM Moody's believes that Glendale's population growth and economic expansion will continue to provide support for future growth in the sales tax, and continue to provide satisfactory debt service coverage. The 0.5% transportation sales tax was approved by voters in 2001, with collections beginning in fiscal 2002, to finance city transportation expenses including a multi-year capital program and operations for public transportation. Security for the current offering is provided by a gross, first-lien pledge from the city's 0.5% transportation excise tax, which receipts are collected by the city on a monthly basis with debt service payments remitted to the trustee twice a year. Transportation sales tax receipts have increased an average of 11.5% annually between FY04 and FY06 to about $23.2 million in fiscal 2006. Unaudited FY07 results indicate a 7.9% increase and the city has budgeted a 10.2% increase in fiscal 2008. Given the limited nature of the dedicated tax revenue stream and the predominately capital-intensive transportation program, coverage of debt service is lower than levels offered by the city's general excise tax bonds (rated Aa3), but still satisfactory. Maximum annual debt service (MADS) coverage in fiscal 2009 was a satisfactory 3.01 times by fiscal 2006 gross pledged revenues and 1.86 times, net of transportation operation and maintenance (O&M) expenses (comprised of primarily dial-a-ride services and fixed bus routes). Unaudited fiscal 2007 pledged revenues indicate improved MADS coverage levels on a gross and net basis at 3.25 times and 2.03 times, respectively. Annual debt service coverage by pledged revenues in fiscal 2006 and unaudited 2007 are similar given essentially level debt service payments through maturity (2032). Over the next five years, officials anticipate issuing an additional $114 million in parity obligations. Projected annual debt service coverage on a gross basis is expected to range between 2.17 times and 4.57 times. Pledged revenue growth assumptions are somewhat aggressive in the early years at roughly 8.5%, but resume more moderate levels of 4.0% thereafter. CONTINUED COMMERCIAL AND RESIDENTIAL EXPANSION Glendale's economy is characterized by growing commercial and residential activity with a significant military presence. Luke Air Force Base is the city's largest employer with approximately 8,400 employees including reserves and civilians. The base was identified for realignment as part of the most recent BRAC decision although city officials do not expect significant job losses or economic impacts. Other major employers within the city include retail, health care, local government and manufacturing. In early 2006, American Automobile Association announced plans to open a regional corporate office in Glendale with plans to eventually hire up to 1,400 employees over a three year period. The city's NHL ice hockey facility, and recently completed Cardinals' National Football League (NFL) stadium, together with potential construction of a spring training stadium for two professional teams are expected to increase the city's destination appeal and further boost sales and use tax revenues. The new football stadium is the home of the Tostitos Fiesta Bowl and has been selected as the host of the 2008 Super Bowl. In addition, the city has recently completed phase one of the 6.5 million square foot Westgate City Center, a 225-acre mixed-use development that is expected to include retail entities, hotels, residential and office properties. Tax base growth has averaged 17.2% annually over the last five years, above the median for national Aa2 cities; the city's 2008 full market value jumped nearly 62% to approximately $16.7 billion in 2008, which is consistent in size with other similarly rated cities in the western states. The city's 2007 secondary assessed value (AV) was comprised of primarily residential property (61%), followed by commercial and industrial entities (35%); the city has relatively little agricultural and vacant land (4%) and build out is estimated in about 10 to 15 years. Top ten taxpayers represent a modest 6.2% of AV (2007), and primarily comprised of utilities, a large retail center, and warehouses. Construction activity remains healthy and, in recent years, has been increasingly supported by commercial development, although residential activity continues at a steady pace as well. According to the 2005 mid-decade American Community Survey, wealth indices for Glendale have changed marginally since the 2000 census and remain below the median for Aa2 rated cities nationally with per capita and median family incomes at 89% and 113% of state levels, respectively; full value per capita is also below the Aa2 median at $68,365. SOLID RESERVE LEVELS MAINTAINED, MITIGATING RELIANCE ON ECONOMICALLY SENSITIVE REVENUE STREAMS Glendale's general fund balance totaled a healthy $72.4 million (48.1% of general fund revenues) in fiscal 2006, well above the national median for similarly rated cities with approximately $58.8 million as an unreserved and undesignated balance (39.0%); this represented the city's fourth year of consecutive increases to general fund reserves. For fiscal 2007, unaudited results indicate the total general fund balance drawn down to between $50 and $55 million to pay down an existing lease obligation as well as one time capital expenditures; fiscal 2008 is budgeted to mirror fiscal 2007. Moody's considers the city's practice of maintaining general fund reserve levels above the Aa2 national city median as an important credit factor given the city's dependence on economically sensitive local and state revenue streams. Fiscal 2006 general fund revenues were supported primarily by city sales tax revenues (39%), followed by state shared revenues, including state income tax revenues (15%) and state shared sales taxes (15%); property tax revenues comprised only a small portion of total general fund revenues (2%). Management conservatively budgeted city sales tax revenue growth to be just over 6% in both FY07 and FY08, below the city's five-year historical average of 9.7% annually. Revenues from state income taxes are budgeted to increase over 20% annually in FY07 and again in FY08. The sizeable increases are expected because of above average state net income tax collections in 2006 (28.5% increase from 2005). Over the near term, Moody's believes the city's financial operations will remain sound supported by continued annual growth in local sales taxes as well as relatively healthy growth in state revenues. Over the long term, Moody's expects management to maintain healthy general fund reserves to offset reliance on local and state sales taxes. Glendale has been successful in obtaining voter approval to exceed the statutorily imposed expenditure limit which was raised in 2000 by voters. As of 2006, the city's expenditures were $83.9 million below the limit, providing the city with adequate financial flexibility. No estimates are available at this time on the size of the city's other post employment benefit liability although management indicates that a study is currently underway. HIGH DEBT LEVELS DUE TO AGGRESSIVE BORROWING Moody's expects Glendale's debt profile to remain high and in excess of national medians for Aa2-rated cities given significant future borrowing plans. Net of self-supporting G.O. debt, the city's direct and overall debt as a percentage of full value are 4.1% and 5.2%, respectively. Payout of the current sale is a slow 28% in ten years. Management expects to issue parity transportation excise tax supported debt annually in amounts ranging between $10 million and $36 million over the next five years. The city also retains approximately $404.5 million in authorized but unissued G.O. bonds and expect to issue general obligation debt annually. In addition, in June 2006, the city drew down the maximum $87 million on a Municipal Property Corporation (MPC) Line of Credit transaction secured by a senior lien on excise tax revenues. Management anticipates refinancing the MPC Line of Credit within the next year although the type and nature of the security are not known at this time. Including the recent MPC Line of Credit, Moody's notes the amount of excise tax debt service supported by the general fund is somewhat high, but currently remains manageable given healthy annual general fund revenue growth and maintenance of a healthy general fund balance. For example, 2007 annual excise tax debt service represented approximately 15% of fiscal 2006 general fund revenues and 30% of the city's FY06 total general fund balance. Further, total maximum annual debt service in 2009 for excise supported borrowing, not including the current borrowing, was nearly 17% of FY06 general fund revenues and about 33% of the city's FY06 total general fund balance. Management notes that additional debt beyond items detailed above, may be issued for various economic development projects as the need arises. Glendale's current credit quality is based upon the assumption that the city will continue to maintain a manageable level of debt through continued tax base growth, payout of debt principal, and controlled debt issuances. Future credit reviews will focus on the city's ability to support excise tax debt service from general fund revenues, and, to the degree that the city issues non-general purpose debt, management's ability to identify revenue streams that will sufficiently cover debt service. KEY STATISTICS: 2007 Full value: $16.7 billion 2007 Estimated population: 246,531 Average annual growth in full value, 2003 to 2008: 17.2% Full value per capita: $68,365 2005 Per capita income: $20,699 (88.6% of state) 2005 Median family income: $58,058 (112.8% of state) Direct debt burden: 4.1% Overall debt burden: 5.2% FY06 General fund balance: $72.4 million (48.1% of revenues) FY06 unreserved and undesignated general fund balance: $58.8 million (39.0% of revenues) Gross coverage of maximum annual debt service by FY06 pledged revenues: 3.01 times Net coverage of maximum annual debt service by FY06 pledged revenues: 1.86 times Analysts Dan Steed Analyst Public Finance Group Moody's Investors Service Jolene K. Yee Backup Analyst Public Finance Group Moody's Investors Service Matthew Jones Senior Credit Officer Public Finance Group Moody's Investors Service Contacts Journalists: (212) 553-0376 Research Clients: (212) 553-1653 © Copyright 2007, Moody's Investors Service, Inc. and/or its licensors including Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. 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MUNICIPAL PROPERTY CORPORATION RATINGS THIS PAGE INTENTIONALLY LEFT BLANK PUBLIC FINANCE Glendale Municipal Property Corp., Arizona Primary Credit Analysts: Edward R McGlade New York (1) 212-438-2061 edward_mcglade@ standardandpoors.com Secondary Credit Analysts: David G Hitchcock New York (1) 212-438-2022 david_hitchcock@ standardandpoors.com Credit Profile US$95. mil exc tax rev bnds (Glendale) ser 2008 due 07/01/2033 Long Term Rating AA+/Stable New AA+/Stable Affirmed Glendale excise tax Long Term Rating Rationale Standard & Poor’s Ratings Services assigned its ‘AA+’ rating and stable outlook to Glendale Municipal Property Corp., Ariz.’s excise tax revenue bonds series 2008. In addition, Standard & Poor’s affirmed its ‘AA+’ rating on the city’s senior- and junior-lien excise tax revenue debt outstanding. The rating reflects the city’s: ƒ Underlying credit strengths (AA general obligation debt rating), including its participation in the diverse Phoenix metropolitan statistical area (MSA); ƒ Strong senior maximum annual debt service (MADS) coverage of 5.4x; and ƒ Good legal covenants, including a 3x additional bonds test (ABT) for the senior-lien debt. A mitigating factor is the city’s above-average overall net debt burden, including all overlapping and direct tax-supported debt. Rental payments made by Glendale under a lease agreement with the city’s municipal corporation, payable from a pledge of the city’s excise, transaction privilege, franchise, and income tax revenues, secure the bonds. Glendale serves an estimated population of 237,516 in the northwest portion of the Phoenix MSA. Per capita retail sales represented 95% of the national level in 2005. The local economy is centered on the aerospace, communications, health, chemical, and agriculture industries. RatingsDirect Publication Date April 24, 2008 The city’s leading employers include Luke Air Force Base (8,400 employees), Arrowhead Towne Center (2,500), and Banner Thunderbird Health System (2,500). The city’s 3.3% Glendale Municipal Property Corp., Arizona unemployment rate in 2007 was below the nation’s 4.6% rate. The median household effective buying income in 2007 was slightly above average at 104% of national levels, although per capita effective buying income indicators are adequate at roughly 88% of the nation’s level. Market value per capita of $70,453 is up from the $42,000 a couple of years ago, reflecting the 60% increase in assessed value in the last three years. The city has seen the opening of a new multipurpose National Football League stadium for the Arizona Cardinals and National Hockey League arena for the Coyotes. The stadium hosted the Super Bowl in 2008, and will serve as the site of the annual Fiesta Bowl college football game. Additional commercial and retail development around the arena and stadium opened within the past year, including a new AMC theater, restaurants, and a Cabela’s outdoor-equipment retail store. The city anticipates the completion of several hotels, a conference center, and additional office and condominium development in the area within the next year. These projects should contribute to additional sales tax growth. All of these retail-related businesses have caused the per capita retail sales to increase to 115% of the U.S. average. Senior-lien MADS coverage by pledged revenues is strong at 5.47x, based on fiscal 2007 unrestricted excise tax revenue collections. Fiscal 2007 pledged revenues provided strong coverage of 5.3x combined junior and senior MADS. Legal provisions for the senior debt include an ABT that requires a minimum coverage level of 3x MADS and a springing debt service reserve fund. The ABT for the junior-lien debt requires a minimum 2x MADS coverage. Pledged revenues consist of four major sources, including a 1.3% transaction privilege and use tax, state-shared sales and income taxes, and licenses and fees. Between fiscals 2001 and 2007, average pledged revenue growth was very strong at about 6.5% annually, reaching roughly $123.6 million in fiscal 2007. The city estimates that the largest sales tax generator represents roughly 8% of total city sales taxes. Primary general fund revenue sources include the sales tax (39%) and state-shared revenues (41%). The city’s sales tax revenue for the first three quarters of fiscal 2007 is up 11% from the prior-year period. Glendale’s financial position has remained strong, with the unreserved general fund balance representing more than 31% of expenditures. Officials reported a $50.8 million unreserved general fund balance, or a strong 31% of expenditures and transfers, at fiscal year-end 2006, including $3 million of designated fund balance. Amortization of parity excise tax revenue debt outstanding, which is structured to match expected projected revenues, is slow, with 36% of principal outstanding retired over 10 years and 75% retired over 20 years. Outlook The stable outlook reflects Standard & Poor’s expectation that pledged revenues will grow as projected and help Glendale restore debt service coverage to historic levels of over 6.0x. The city’s dependence on pledged revenues for general fund operations reduces the likelihood that it will issue additional debt at the expense of lowering debt service coverage. Standard & Poor’s | ANALYSIS 2 Glendale Municipal Property Corp., Arizona Ratings Detail (As Of 24-Apr-2008) Glendale certs of part bnds ser 14 (AMBAC) Unenhanced Rating AA+(SPUR)/Stable Affirmed AA+(SPUR)/Stable Affirmed AA+(SPUR)/Stable Upgraded Glendale excise tax (AMBAC) Unenhanced Rating Glendale transp excise tax (MBIA) Unenhanced Rating Glendale (Arizona Mun Fing Prog of 1992) excise tax (AMBAC) Unenhanced Rating AA+(SPUR)/Stable Affirmed AA+(SPUR)/Stable Affirmed AA+(SPUR)/Stable Affirmed Glendale Mun Prop Corp, Arizona Glendale, Arizona Glendale Mun Prop Corp excise tax (AMBAC) Unenhanced Rating Glendale Mun Prop Corp (Glendale) excise tax (AMBAC) Unenhanced Rating Many issues are enhanced by bond insurance. www.standardandpoors.com 3 Glendale Municipal Property Corp., Arizona Published by Standard & Poor's, a Division of The McGraw-Hill Companies, Inc. Executive offices: 1221 Avenue of the Americas, New York, NY 10020. Editorial offices: 55 Water Street, New York, NY 10041. 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Such compensation is normally paid either by the issuers of such securities or by the underwriters participating in the distribution thereof. The fees generally vary from US$2,000 to over US$1,500,000. While Standard & Poor's reserves the right to disseminate the rating, it receives no payment for doing so, except for subscriptions to its publications. Permissions: To reprint, translate, or quote Standard & Poor's publications, contact: Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280; or by e-mail to: research_request@standardandpoors.com. Standard & Poor’s | ANALYSIS 4 New Issue: MOODY'S DOWNGRADES GLENDALE, ARIZONA'S G.O. AND EXCISE TAX RATINGS; OUTLOOK REVISED TO STABLE FROM NEGATIVE Global Credit Research - 09 Feb 2011 APPROXIMATELY $$815.6 MILLION OF DEBT AFFECTED Glendale (City of) AZ Municipality AZ Moody's Rating ISSUE RATING Excise Tax Revenue Bonds, Second Lien Series 2011A (Tax-Exempt) Sale Amount $107,000,000 Expected Sale Date 02/15/11 Rating Description Sales and Use Tax, Second Lien A1 Excise Tax Revenue Bonds, Taxable Second Lien Series 2011B Sale Amount $9,000,000 Expected Sale Date 02/15/11 Rating Description Sales and Use Tax, Second Lien A1 Moody's Outlook Stable Opinion NEW YORK, Feb 9, 2011 -- Moody's Investors Service has downgraded the City of Glendale, Arizona's general obligation and excise tax ratings as follows: the city's general obligation rating (affecting $223.0 million in outstanding bonds)was revised to Aa2 from Aa1; the senior lien excise tax rating (affecting $269.7 million) was revised to Aa3 from Aa2, the second lien excise tax rating (affecting $123.2 million, including the current offering) was revised to A1 from Aa3; and the third lien excise rating (affecting $199.8 million) was revised to A2 from A1. The current credit review was conducted in conjunction with the city's upcoming offering of Glendale Municipal Property Corporation Excise Tax Revenue Bonds, Second Lien Series 2011A (Tax-Exempt) and Taxable Second Lien Series 2011B in the aggregate amount of approximately $110.9 million. In addition to these rating actions, Moody's has revised the outlook on the city's general obligation and related ratings to stable from negative. The current offering is secured by rental payments to be made by the city to the corporation under a lease agreement; the city's obligation to make lease payments is unconditional and not subject to appropriation. The city has pledged a second lien on its excise tax revenues, which consist of unrestricted local sales and use taxes, state shared revenues, and other fees and charges to make such payments. Additionally, the city has pledged future parking revenues (if any) associated with arena events to the Series 2011 bonds. RATING RATIONALE The rating and downgrade reflects the city's high debt burden, high leverage of the city's largest general fund revenue, relatively low debt service coverage of all three liens of excise tax revenue bonds and the declining trend of pledged revenues. The city's Aa2 general obligation rating reflects its weakened local economy which benefits from its position as a sports and entertainment destination even during the recession, a large tax base, below average socioeconomic indices, and narrowed but still healthy financial reserves which help mitigate the reliance on economically sensitive revenues. PLEDGED EXCISE TAX REVENUES, WHICH HAVE DECLINED IN RECENT YEARS, PROVIDE NARROWED, YET ADEQUATE DEBT SERVICE COVERAGE The current offering significantly increases the amount of the city's total excise tax debt to approximately $592.6 million, which is a contributing factor in the rating assignment. Debt service coverage of the city's excise tax bonds is well below average when compared to the local peer group. In Arizona, excise tax revenues typically comprise two-thirds of operating revenues and, correspondingly, coverage levels for excise tax bonds are strong, generally in the double-digit range. Fiscal 2010 pledged revenues provide coverage of maximum annual senior lien debt service of 4.8 times. With the addition of the current offering, fiscal 2010 pledged revenues provide maximum annual second lien debt service coverage of 3.4 times, and third lien coverage of 2.4 times. Pledged revenues include Glendale's unrestricted local sales and use tax collections derived from a 1.2% tax rate, the city's distribution of state shared sales and income tax monies, as well as various franchise fees, licenses and permit revenues. In fiscal 2010, the local sales tax revenues comprised 49.8% of the pledged excise tax revenues, the state-shared sales tax revenues 16.5%, state-shared income tax revenues 29.0%, and licenses and permits 4.7%. From fiscal 2005 to 2010, Glendale's excise tax collections increased at a somewhat flat average annual rate of 1.9%. This figure includes a 7.2% decline in fiscal 2009 and an 8.7% decline in fiscal 2010. The city currently estimates that total fiscal 2011 excise tax revenues will decline again by 5.6%; the city sales tax will be between $55.5 million (a 3.1% increase over 2010); stateshared sales taxes projected at $17.7 million (a 0.5% decline over 2010); and state-shared income taxes projected at $23.7 million (a 24.4% decline over 2010). Moody's notes that given the two-year lag in the disbursement of income tax revenues to local governments, the fiscal 2011 amount is known. Licenses and permit revenues are budgeted to be flat (a modest 0.8% increase). Moody's notes that the amount of debt service supported by the general fund is substantial, reflective of management's decision to highly leverage the city's primary operating resource. Total maximum annual excise tax debt service will represent a substantial 28.6% of fiscal 2010 general fund revenues (not including transfers). Although new additions to the city's retail base helped mitigate revenue declines during the recession, the sluggish recovery continues to have a negative effect on the growth of pledged revenues. Over the long term, city officials expect to fully support these long term debt obligations from anticipated revenues associated with the economic development projects around the NHL Arena, Cardinal Stadium, and Cabela's primarily from new sales tax dollars, parking revenues, and event ticket surcharges. CURRENT OFFERING FUNDS THE PURCHASE OF PARKING RIGHTS ASSOCIATED WITH NHL FRANCHISE; LEGAL CHALLENGE MAY RESULT IN ADDITIONAL RISK TO BOND HOLDERS The bonds fund the purchase of the rights to parking facilities attributable to the Jobing.com Arena, a 17,500 seat multipurpose facility which is owned by the city and is home to the Phoenix Coyotes, a National Hockey League team. The city will purchase the right to receive parking revenues from the parking facilities (approximately 5,500 surface lot spaces) from the Coyotes new owners. Glendale constructed the Jobing.com Arena in 2003 and the hockey team is the primary tenant. Following the bankruptcy filing of the former owner of the team and an attempt to sell the Coyotes to a potential buyer seeking move it to Canada, the NHL purchased the assets and liabilities of the former team owner and former arena manager. The NHL now plan to sell the Phoenix Coyotes, including the parking rights to Coyotes Newco, LLC. Using the proceeds of the Series 2011 bonds, the city will obtain all of the rights to charge and to receive revenues in connection with the right to use 5,500 parking spaces for events at the arena. In addition, the team, the arena manger and the city will enter into an arena lease and management agreement (ALMA), to be executed and delivered concurrently with the delivery of the current offering, as well as a 30 season use and non-relocation agreement with the team. The current offering is subject to litigation risk. The Goldwater Institute is currently conducting an investigation of this transaction and has threatened litigation if the institute feels that the transaction constitutes a "gift of public funds". In addition to the bond counsel opinion, the city has engaged a special counsel to provide an "enforceability opinion" which states that the agreements between the city and the team are legal, valid and binding obligations. The opinion relies, in part, upon a market valuation report performed by CBRE Consulting which evaluates the value of benefits the city will receive from the purchase of the parking rights and other benefits. ADEQUATE LEGAL PROVISIONS SECURE CURRENT OFFERING OF SECOND LIEN EXCISE TAX BONDS; ABSENCE OF FULLYFUNDED DEBT SERVICE RESERVE IS A CREDIT WEAKNESS The legal provisions under the trust indenture are satisfactory, given that rental payments from the city to the corporation are unconditional and are not subject to annual appropriation. The rental payments are secured by a second lien pledge on the city's excise tax revenues (more fully described below) and a lien on parking revenues attributable to the facilities. Currently, parking at the arena is free, so there are no pledged parking revenues at this time. Legal provisions delineate an additional bonds test and rate covenant for combined senior, and junior lien obligations of 2.0 times and seniors only of 3.0 times. There is no debt service reserve requirement for the second lien obligations, which Moody's believes is a credit weakness. An approximately $8.6 million revenue stabilization account funded with proceeds of the Series 2011B bonds provides a modest amount of additional bondholder security. Amounts in the revenue stabilization fund may be used at the direction of the city to pay debt service on 2011 bonds, upon a determination by the city that the amount of revenues derived by the city from the parking facilities during the preceding fiscal year is less than rental payments related to debt service on the Series 2011 bonds for the current fiscal year. Moody's notes, however, that the city is not obligated to replace any amounts withdrawn from the revenue stabilization fund. COMMERCIAL AND RESIDENTIAL EXPANSION SLOWING AS A RESULT OF THE STAGNANT RECOVERY FROM THE RECESSION Glendale's economy is characterized by growing commercial and residential activity with a significant military presence. Luke Air Force Base is the city's largest employer with over 8,000 employees including reserves and civilians. Other major employers within the city include retail, health care, local government and manufacturing. The American Automobile Association operates a regional corporate office in Glendale with approximately 1,175 employees. The Jobing.com Arena, as well as the University of Phoenix Stadium, home to the Arizona Cardinals, together with a new spring training stadium for Chicago White Sox and Los Angeles Dodgers are expected to increase the city's destination appeal and further boost sales and use tax revenues over the long term. The hockey arena, which is located near Loop 101 and Glendale Avenue, is also used for concerts and other similar events. Spurred by both residential and commercial construction, tax base growth has averaged 11.4% annually for the most recent five-year period, which is slightly above the national median for cities. However, the city's 2010 full market value declined slightly, by 1.9%, and then by a substantial 16.0% in 2011 reflecting the lagged impact of lower property values and slowed commercial construction. Consistent with the expectations of other Phoenix area local governments, Moody's anticipates further taxbase declines for Glendale in 2012. Despite these declines, the city's taxbase remains substantial at $17.3 billion in 2011, which is above average in size with other similarly rated cities in the western states. The city's secondary assessed value (AV) is comprised of primarily residential property (55%), followed by commercial and industrial entities (40%). The city has relatively little agricultural and vacant land (5%) and build out is estimated in about 10 to 15 years. Top ten taxpayers represent a modest 7.1% of AV, and primarily comprised of a hospital, utilities, a large retail center, and warehouses. According to 2006 - 2008 U.S. Census estimates, wealth indices for Glendale are below the median for Aa1 rated cities nationally with per capita and median family incomes at 91.9% and 99.8% of state levels respectively. NARROWED, YET STILL HEALTHY RESERVE LEVELS DESPITE RECENT OPERATING DEFICITS Despite recent declines in general fund balances, Glendale's financial position remains in line with its peers nationally. The city has experienced large operating deficits over the last two years. In fiscal 2009, Glendale's general fund balance declined by $13.8 million to $52.6 million (35.5% of general fund revenues) and declined by an additional $13.8 million (estimated) in fiscal 2010 to $38.8 million (27.5% of general fund revenues). Although these balances approximate the national median for cities and are well within the norm for cities in its peer group, they are somewhat below the norm for cities in Arizona. The city's excise tax revenues, which typically account for approximately three-fourths of general fund revenues, are comprised of state and local sales taxes, state income taxes, and state motor vehicle in-lieu taxes. Excise tax revenues declined by 7.2% in fiscal 2009 and 8.7% in fiscal 2010 and contributed to the city's operating deficits. Of continued concern, Moody's notes that the amount of debt service supported by the general fund is substantial, reflective of management's decision to highly leverage the city's primary operating resource. Total maximum annual excise tax debt service will represent a substantial 28.6% of fiscal 2010 general fund revenues. In response to its budget challenges, the city implemented ongoing and one-time cuts in fiscal 2009 and additionally implemented ongoing cuts at the start of fiscal 2010 and continuing into fiscal 2011. The city's overall authorized staffing peaked in fiscal year 2009 at 2,200 FTE's and is at 1,971 for fiscal year 2011, a reduction of 234 FTE's or 10.5%. Challenges for the city's fiscal 2011 financial operations remain however. Although expenditures are approximately $2.1 million (2.8%) below budget for the first six months of the fiscal year, general fund revenues are $4.3 million below budget ($5.8%). Given the stagnant economy, Moody's believes there is a high likelihood that additional budgetary pressures will remain through fiscal 2012. Moody's considers the city's practice of maintaining healthy general fund reserves an important credit factor given the city's dependence on economically sensitive local and state revenue streams. Over the long term, Moody's expects management to maintain healthy general fund reserves to offset reliance on local and state sales taxes. DEBT LEVELS EXPECTED TO REMAIN HIGH With the current offering, Glendale's direct and overall debt burdens remain high and are well above similarly rated cities across the nation. The city's direct debt burden of 4.8% is nearly five times the national median of 1.0%. Overall debt measures 6.9% of full value, well in excess of national medians for all cities of 2.6%. Approximately 69% of the city's direct debt is attributable to the $592.6 million in excise tax debt which will be outstanding with the current offering. Management has no near-term general fund borrowing plans. What could move the rating - UP - Substantial appreciation in socioeconomic measures - Significant improvement in financial performance resulting in reserve levels that outpace the city's rating peer group What could change the rating - DOWN - Continued deterioration of financial position - Prolonged downturn in the local economy - Continued decline in excise tax revenues - Significant additional leveraging of general fund resources Outlook The stable outlook reflects Moody's expectation that slowly stabilizing economic conditions in the region will enable the city to maintain its current satisfactory financial position despite ongoing budgetary challenges. The outlook also anticipates that future general fund secured borrowing will be minimal until economic conditions rebound and debt affordability improves. KEY STATISTICS Coverage of senior lien MADS by FY 2010 pledged excise tax revenues: 4.8 times Coverage of second lien MADS by FY 2010 pledged excise tax revenues: 3.4 times Coverage of third lien MADS by FY 2010pledged excise tax revenues: 2.4 times Fiscal 2010 pledged revenues: $108.0 million Average annual growth in pledged revenues, 2005 to 2010: 1.9% 2009 estimated population: 249,811 2006 - 2008 estimated per capita income: $23,351 (91.1% of state) 2006 - 2008 estimated median family income: $60,351 (99.8% of state) 2006 - 2008 estimated median housing value: $236,000 (100.6% of state) Full value, 2011: $17.3 billion Average annual growth in full value, 2006 to 2011: 11.4% Full value per capita: $69,332 Direct debt burden: 4.8% Overall debt burden: 6.9% FY10 general fund balance: $38.8 million (27.6% of revenues) FY10 available general fund balance: $29.5 million (21.0% of revenues) PRINCIPAL METHODOLOGY The principal methodology used in this rating was Piercing the G.O. Ceiling published in December, 2008. REGULATORY DISCLOSURES Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Analytics information. Moody's Investors Service considers the quality of information available on the credit satisfactory for the purposes of assigning a credit rating. Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history. The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information. Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery. Analysts Patrick Ford Analyst Public Finance Group Moody's Investors Service Dan Steed Backup Analyst Public Finance Group Moody's Investors Service Matthew A. 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THIS PAGE INTENTIONALLY LEFT BLANK WESTERN LOOP 101 PUBLIC FACILITIES CORPORATION BONDS RATINGS THIS PAGE INTENTIONALLY LEFT BLANK                                                                                                                                                                                                         ι                ι            ι                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              New Issue: MOODY'S DOWNGRADES GLENDALE, ARIZONA'S G.O. AND EXCISE TAX RATINGS; OUTLOOK REVISED TO STABLE FROM NEGATIVE Global Credit Research - 09 Feb 2011 APPROXIMATELY $$815.6 MILLION OF DEBT AFFECTED Glendale (City of) AZ Municipality AZ Moody's Rating ISSUE RATING Excise Tax Revenue Bonds, Second Lien Series 2011A (Tax-Exempt) Sale Amount $107,000,000 Expected Sale Date 02/15/11 Rating Description Sales and Use Tax, Second Lien A1 Excise Tax Revenue Bonds, Taxable Second Lien Series 2011B Sale Amount $9,000,000 Expected Sale Date 02/15/11 Rating Description Sales and Use Tax, Second Lien A1 Moody's Outlook Stable Opinion NEW YORK, Feb 9, 2011 -- Moody's Investors Service has downgraded the City of Glendale, Arizona's general obligation and excise tax ratings as follows: the city's general obligation rating (affecting $223.0 million in outstanding bonds)was revised to Aa2 from Aa1; the senior lien excise tax rating (affecting $269.7 million) was revised to Aa3 from Aa2, the second lien excise tax rating (affecting $123.2 million, including the current offering) was revised to A1 from Aa3; and the third lien excise rating (affecting $199.8 million) was revised to A2 from A1. The current credit review was conducted in conjunction with the city's upcoming offering of Glendale Municipal Property Corporation Excise Tax Revenue Bonds, Second Lien Series 2011A (Tax-Exempt) and Taxable Second Lien Series 2011B in the aggregate amount of approximately $110.9 million. In addition to these rating actions, Moody's has revised the outlook on the city's general obligation and related ratings to stable from negative. The current offering is secured by rental payments to be made by the city to the corporation under a lease agreement; the city's obligation to make lease payments is unconditional and not subject to appropriation. The city has pledged a second lien on its excise tax revenues, which consist of unrestricted local sales and use taxes, state shared revenues, and other fees and charges to make such payments. Additionally, the city has pledged future parking revenues (if any) associated with arena events to the Series 2011 bonds. RATING RATIONALE The rating and downgrade reflects the city's high debt burden, high leverage of the city's largest general fund revenue, relatively low debt service coverage of all three liens of excise tax revenue bonds and the declining trend of pledged revenues. The city's Aa2 general obligation rating reflects its weakened local economy which benefits from its position as a sports and entertainment destination even during the recession, a large tax base, below average socioeconomic indices, and narrowed but still healthy financial reserves which help mitigate the reliance on economically sensitive revenues. PLEDGED EXCISE TAX REVENUES, WHICH HAVE DECLINED IN RECENT YEARS, PROVIDE NARROWED, YET ADEQUATE DEBT SERVICE COVERAGE The current offering significantly increases the amount of the city's total excise tax debt to approximately $592.6 million, which is a contributing factor in the rating assignment. Debt service coverage of the city's excise tax bonds is well below average when compared to the local peer group. In Arizona, excise tax revenues typically comprise two-thirds of operating revenues and, correspondingly, coverage levels for excise tax bonds are strong, generally in the double-digit range. Fiscal 2010 pledged revenues provide coverage of maximum annual senior lien debt service of 4.8 times. With the addition of the current offering, fiscal 2010 pledged revenues provide maximum annual second lien debt service coverage of 3.4 times, and third lien coverage of 2.4 times. Pledged revenues include Glendale's unrestricted local sales and use tax collections derived from a 1.2% tax rate, the city's distribution of state shared sales and income tax monies, as well as various franchise fees, licenses and permit revenues. In fiscal 2010, the local sales tax revenues comprised 49.8% of the pledged excise tax revenues, the state-shared sales tax revenues 16.5%, state-shared income tax revenues 29.0%, and licenses and permits 4.7%. From fiscal 2005 to 2010, Glendale's excise tax collections increased at a somewhat flat average annual rate of 1.9%. This figure includes a 7.2% decline in fiscal 2009 and an 8.7% decline in fiscal 2010. The city currently estimates that total fiscal 2011 excise tax revenues will decline again by 5.6%; the city sales tax will be between $55.5 million (a 3.1% increase over 2010); stateshared sales taxes projected at $17.7 million (a 0.5% decline over 2010); and state-shared income taxes projected at $23.7 million (a 24.4% decline over 2010). Moody's notes that given the two-year lag in the disbursement of income tax revenues to local governments, the fiscal 2011 amount is known. Licenses and permit revenues are budgeted to be flat (a modest 0.8% increase). Moody's notes that the amount of debt service supported by the general fund is substantial, reflective of management's decision to highly leverage the city's primary operating resource. Total maximum annual excise tax debt service will represent a substantial 28.6% of fiscal 2010 general fund revenues (not including transfers). Although new additions to the city's retail base helped mitigate revenue declines during the recession, the sluggish recovery continues to have a negative effect on the growth of pledged revenues. Over the long term, city officials expect to fully support these long term debt obligations from anticipated revenues associated with the economic development projects around the NHL Arena, Cardinal Stadium, and Cabela's primarily from new sales tax dollars, parking revenues, and event ticket surcharges. CURRENT OFFERING FUNDS THE PURCHASE OF PARKING RIGHTS ASSOCIATED WITH NHL FRANCHISE; LEGAL CHALLENGE MAY RESULT IN ADDITIONAL RISK TO BOND HOLDERS The bonds fund the purchase of the rights to parking facilities attributable to the Jobing.com Arena, a 17,500 seat multipurpose facility which is owned by the city and is home to the Phoenix Coyotes, a National Hockey League team. The city will purchase the right to receive parking revenues from the parking facilities (approximately 5,500 surface lot spaces) from the Coyotes new owners. Glendale constructed the Jobing.com Arena in 2003 and the hockey team is the primary tenant. Following the bankruptcy filing of the former owner of the team and an attempt to sell the Coyotes to a potential buyer seeking move it to Canada, the NHL purchased the assets and liabilities of the former team owner and former arena manager. The NHL now plan to sell the Phoenix Coyotes, including the parking rights to Coyotes Newco, LLC. Using the proceeds of the Series 2011 bonds, the city will obtain all of the rights to charge and to receive revenues in connection with the right to use 5,500 parking spaces for events at the arena. In addition, the team, the arena manger and the city will enter into an arena lease and management agreement (ALMA), to be executed and delivered concurrently with the delivery of the current offering, as well as a 30 season use and non-relocation agreement with the team. The current offering is subject to litigation risk. The Goldwater Institute is currently conducting an investigation of this transaction and has threatened litigation if the institute feels that the transaction constitutes a "gift of public funds". In addition to the bond counsel opinion, the city has engaged a special counsel to provide an "enforceability opinion" which states that the agreements between the city and the team are legal, valid and binding obligations. The opinion relies, in part, upon a market valuation report performed by CBRE Consulting which evaluates the value of benefits the city will receive from the purchase of the parking rights and other benefits. ADEQUATE LEGAL PROVISIONS SECURE CURRENT OFFERING OF SECOND LIEN EXCISE TAX BONDS; ABSENCE OF FULLYFUNDED DEBT SERVICE RESERVE IS A CREDIT WEAKNESS The legal provisions under the trust indenture are satisfactory, given that rental payments from the city to the corporation are unconditional and are not subject to annual appropriation. The rental payments are secured by a second lien pledge on the city's excise tax revenues (more fully described below) and a lien on parking revenues attributable to the facilities. Currently, parking at the arena is free, so there are no pledged parking revenues at this time. Legal provisions delineate an additional bonds test and rate covenant for combined senior, and junior lien obligations of 2.0 times and seniors only of 3.0 times. There is no debt service reserve requirement for the second lien obligations, which Moody's believes is a credit weakness. An approximately $8.6 million revenue stabilization account funded with proceeds of the Series 2011B bonds provides a modest amount of additional bondholder security. Amounts in the revenue stabilization fund may be used at the direction of the city to pay debt service on 2011 bonds, upon a determination by the city that the amount of revenues derived by the city from the parking facilities during the preceding fiscal year is less than rental payments related to debt service on the Series 2011 bonds for the current fiscal year. Moody's notes, however, that the city is not obligated to replace any amounts withdrawn from the revenue stabilization fund. COMMERCIAL AND RESIDENTIAL EXPANSION SLOWING AS A RESULT OF THE STAGNANT RECOVERY FROM THE RECESSION Glendale's economy is characterized by growing commercial and residential activity with a significant military presence. Luke Air Force Base is the city's largest employer with over 8,000 employees including reserves and civilians. Other major employers within the city include retail, health care, local government and manufacturing. The American Automobile Association operates a regional corporate office in Glendale with approximately 1,175 employees. The Jobing.com Arena, as well as the University of Phoenix Stadium, home to the Arizona Cardinals, together with a new spring training stadium for Chicago White Sox and Los Angeles Dodgers are expected to increase the city's destination appeal and further boost sales and use tax revenues over the long term. The hockey arena, which is located near Loop 101 and Glendale Avenue, is also used for concerts and other similar events. Spurred by both residential and commercial construction, tax base growth has averaged 11.4% annually for the most recent five-year period, which is slightly above the national median for cities. However, the city's 2010 full market value declined slightly, by 1.9%, and then by a substantial 16.0% in 2011 reflecting the lagged impact of lower property values and slowed commercial construction. Consistent with the expectations of other Phoenix area local governments, Moody's anticipates further taxbase declines for Glendale in 2012. Despite these declines, the city's taxbase remains substantial at $17.3 billion in 2011, which is above average in size with other similarly rated cities in the western states. The city's secondary assessed value (AV) is comprised of primarily residential property (55%), followed by commercial and industrial entities (40%). The city has relatively little agricultural and vacant land (5%) and build out is estimated in about 10 to 15 years. Top ten taxpayers represent a modest 7.1% of AV, and primarily comprised of a hospital, utilities, a large retail center, and warehouses. According to 2006 - 2008 U.S. Census estimates, wealth indices for Glendale are below the median for Aa1 rated cities nationally with per capita and median family incomes at 91.9% and 99.8% of state levels respectively. NARROWED, YET STILL HEALTHY RESERVE LEVELS DESPITE RECENT OPERATING DEFICITS Despite recent declines in general fund balances, Glendale's financial position remains in line with its peers nationally. The city has experienced large operating deficits over the last two years. In fiscal 2009, Glendale's general fund balance declined by $13.8 million to $52.6 million (35.5% of general fund revenues) and declined by an additional $13.8 million (estimated) in fiscal 2010 to $38.8 million (27.5% of general fund revenues). Although these balances approximate the national median for cities and are well within the norm for cities in its peer group, they are somewhat below the norm for cities in Arizona. The city's excise tax revenues, which typically account for approximately three-fourths of general fund revenues, are comprised of state and local sales taxes, state income taxes, and state motor vehicle in-lieu taxes. Excise tax revenues declined by 7.2% in fiscal 2009 and 8.7% in fiscal 2010 and contributed to the city's operating deficits. Of continued concern, Moody's notes that the amount of debt service supported by the general fund is substantial, reflective of management's decision to highly leverage the city's primary operating resource. Total maximum annual excise tax debt service will represent a substantial 28.6% of fiscal 2010 general fund revenues. In response to its budget challenges, the city implemented ongoing and one-time cuts in fiscal 2009 and additionally implemented ongoing cuts at the start of fiscal 2010 and continuing into fiscal 2011. The city's overall authorized staffing peaked in fiscal year 2009 at 2,200 FTE's and is at 1,971 for fiscal year 2011, a reduction of 234 FTE's or 10.5%. Challenges for the city's fiscal 2011 financial operations remain however. Although expenditures are approximately $2.1 million (2.8%) below budget for the first six months of the fiscal year, general fund revenues are $4.3 million below budget ($5.8%). Given the stagnant economy, Moody's believes there is a high likelihood that additional budgetary pressures will remain through fiscal 2012. Moody's considers the city's practice of maintaining healthy general fund reserves an important credit factor given the city's dependence on economically sensitive local and state revenue streams. Over the long term, Moody's expects management to maintain healthy general fund reserves to offset reliance on local and state sales taxes. DEBT LEVELS EXPECTED TO REMAIN HIGH With the current offering, Glendale's direct and overall debt burdens remain high and are well above similarly rated cities across the nation. The city's direct debt burden of 4.8% is nearly five times the national median of 1.0%. Overall debt measures 6.9% of full value, well in excess of national medians for all cities of 2.6%. Approximately 69% of the city's direct debt is attributable to the $592.6 million in excise tax debt which will be outstanding with the current offering. Management has no near-term general fund borrowing plans. What could move the rating - UP - Substantial appreciation in socioeconomic measures - Significant improvement in financial performance resulting in reserve levels that outpace the city's rating peer group What could change the rating - DOWN - Continued deterioration of financial position - Prolonged downturn in the local economy - Continued decline in excise tax revenues - Significant additional leveraging of general fund resources Outlook The stable outlook reflects Moody's expectation that slowly stabilizing economic conditions in the region will enable the city to maintain its current satisfactory financial position despite ongoing budgetary challenges. The outlook also anticipates that future general fund secured borrowing will be minimal until economic conditions rebound and debt affordability improves. KEY STATISTICS Coverage of senior lien MADS by FY 2010 pledged excise tax revenues: 4.8 times Coverage of second lien MADS by FY 2010 pledged excise tax revenues: 3.4 times Coverage of third lien MADS by FY 2010pledged excise tax revenues: 2.4 times Fiscal 2010 pledged revenues: $108.0 million Average annual growth in pledged revenues, 2005 to 2010: 1.9% 2009 estimated population: 249,811 2006 - 2008 estimated per capita income: $23,351 (91.1% of state) 2006 - 2008 estimated median family income: $60,351 (99.8% of state) 2006 - 2008 estimated median housing value: $236,000 (100.6% of state) Full value, 2011: $17.3 billion Average annual growth in full value, 2006 to 2011: 11.4% Full value per capita: $69,332 Direct debt burden: 4.8% Overall debt burden: 6.9% FY10 general fund balance: $38.8 million (27.6% of revenues) FY10 available general fund balance: $29.5 million (21.0% of revenues) PRINCIPAL METHODOLOGY The principal methodology used in this rating was Piercing the G.O. Ceiling published in December, 2008. REGULATORY DISCLOSURES Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Analytics information. Moody's Investors Service considers the quality of information available on the credit satisfactory for the purposes of assigning a credit rating. Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history. The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information. Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery. Analysts Patrick Ford Analyst Public Finance Group Moody's Investors Service Dan Steed Backup Analyst Public Finance Group Moody's Investors Service Matthew A. 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In such a case, “MIS” in the foregoing statements shall be deemed to be replaced with “MJKK”. MJKK is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser. THIS PAGE INTENTIONALLY LEFT BLANK APPENDIX B DEFINITIONS THIS PAGE INTENTIONALLY LEFT BLANK Additional Bonds Test – A requirement that future additional bonds, that will have a claim to revenues already pledged to outstanding revenue bonds, can only be issued if certain financial or other requirements are met. Advance Refunding – A method of providing for the payment of debt service on a bond until the first call date or maturity. An advance refunding is generally pursued to achieve debt service savings for the issuer. An advance refunding is done by issuing a new municipal bond and investing the proceeds in a portfolio of U.S. government securities structured to provide enough cash flow to pay debt service on the refunded bonds. The old issue can then be said to be advance refunded. Amortization – The payment of debt through scheduled payments. Arbitrage – Generally, transactions by which securities are bought and sold in different markets at the same time for the sake of the profit arising from a difference in prices in the two markets. With respect to the issuance of municipal bonds, arbitrage generally refers to the difference between the interest paid on the bonds issued and the interest earned by investing the bond proceeds. Arbitrage profits are permitted on bond proceeds for various temporary periods after issuance of municipal bonds. Internal Revenue Service regulations govern arbitrage of municipal bond proceeds. Balloon Payment – An inordinately large loan principal payment on a single date. Bid – A proposal to purchase bonds, offered for sale either in a competitive offering or on a negotiated basis, specifying the interest rate(s) for each maturity, plus a premium or minus a discount. Bond – Interest-bearing written obligation issued by governments and corporations when they borrow money. The issuer agrees to pay a fixed principal sum on a specified date and at a specified rate of interest. Bidding Syndicate – Groups of underwriters that act together to submit a proposal to underwrite a bond issue. Bond Counsel or Bond Approving Counsel – An attorney (or firm of attorneys) retained by the issuer to give a legal opinion that 1) the issuer is authorized to issue bonds, 2) the issuer has met all legal requirements necessary for issuance and 3) interest on the proposed bonds will be exempt from federal income taxation. Typically, bond counsel will prepare, or review and advise the issuer regarding authorizing resolutions, official statements, validation proceedings and litigation. Bond Insurance – Insurance purchased by an issuer or underwriter which guarantees the payment of principal and interest on the bonds. This additional security usually provides a higher credit rating and thus a lower borrowing cost for an issuer. Bond Proceeds – The funds the issuer receives from its bond sale. Bond Holder – The owner of a bond to whom payments of principal and interest are made. The owner of a bearer bond is the person having possession of it, while the owner of a registered bond is the person whose name is noted on the bond register. Bond Register – a record of the names and addresses of bondholders kept on behalf of an issuer. Generally, the Bond Registrar is the paying agent. B-1 Bond Resolution – The document representing action of the issuer authorizing the issuance and sale of municipal bonds. Issuance of the bonds is usually approved in the authorizing resolution or ordinance, and the sale is usually authorized in a separate document known as the “sale” or “award” resolution. All of such resolutions, read together, constitute the bond resolution, which describes the nature of the obligation and the issuer’s duties to the bondholders. Callable Bond – A bond which permits or requires the issuer to redeem the obligation before the stated maturity date at a specified price, usually at or above par by giving notice of redemption in a manner specified in the bond resolution. Closing – The meeting of concerned parties on the date of delivery to sign bonds and various legal documents and to physically deliver the bonds in exchange for payment of the purchase price. The parties at closing usually include representatives of the issuer, financial advisor, bond counsel and the purchaser (underwriters). Sometimes a pre-closing meeting is held on the day before delivery to review the adequacy of the closing procedures and documents. Competitive Bid or Competitive Bidding – A method of submitting proposals to purchase a new issue of bonds by which the bonds are awarded to the underwriting syndicate presenting the best bid according to stipulated criteria set forth in the notice of sale; usually the lowest interest cost. Underwriting bonds in this manner is also referred to as a competitive or public sale. Covenant or Bond Covenant – The issuer’s enforceable promise to do or refrain from doing some act. With respect to municipal bonds, covenants are generally stated in the bond resolution. Covenants commonly made in connection with a bond issue include covenants to charge fees for use of the financed project sufficient to provide required pledged revenues (rate covenant); to maintain casualty insurance on the project; to complete, maintain and operate the project; not to sell or encumber the project; not to issue parity bonds unless certain earnings tests are met (additional bond covenant); and not to take actions which would cause the bonds to be arbitrage bonds, i.e., violate IRS regulations, concerning levels of permitted investment earnings. Coverage – The ratio of annual pledged revenues available to pay debt service, as compared to the annual debt service requirement. This ratio is one indication of the margin of safety for payment of debt service. Dated Date – The date of a bond issue, printed on each bond, from which interest usually starts to accrue. Due Diligence – The investigation of a bond issue, generally by the financial advisor and bond counsel, or other issuers counsel, to ensure that all material facts relating to the issue have been disclosed to potential buyers in the official statement. Financial Advisor – With respect to a new issue of municipal bonds, a consultant who advises the issuer on matters relating to the bonds, such as structure, timing, marketing, fairness of pricing, terms and bond ratings. Such consultant may be employed in a capacity unrelated to a new issue of municipal securities, such as advising on cash flow and investment matters. The financial advisor is sometimes referred to as a fiscal consultant or fiscal agent. Good Faith Deposit – An amount of money, usually 2% of the par value of an issue of securities, given by bidders to issuers when they bid for competitive issues. The sum, given as a cashier’s, certified check or surety bond, is returned to the bidder if the bid is rejected. B-2 Lease – A conditional sales agreement under which a municipal government leases equipment, using borrowed funds, that it acquires at the end of the lease period. The loans are secured by the equipment itself and debt service payments are subject to annual appropriation. Legal Opinion – The written statement of a lawyer trained in municipal bond law that the bond complies with bond law, especially with regard to its tax-exempt status. Negotiated Sale – A securities sale through an exclusive arrangement between the issuer and an underwriter or underwriting syndicate. This form of issuance provides one or more pricings, where the underwriters solicit potential buyers for the securities. Based on investor interest, the features of the securities may be altered to accommodate market demand. At the end of successful negotiations, the issue is awarded to the underwriters. Notice of Sale – A printed document announcing and soliciting bids for the bonds. It is generally an appendix to the Preliminary Official Statement. It includes pertinent details of bidding requirements, date and time of sale and a brief description of the purpose of the issue. Official Statement – An offering document prepared by the issuer that contains information on the municipality and the security pledged to meet principal and interest; also known as a prospectus. Before the issue is priced it is known as the Preliminary Official Statement (POS); afterwards a final Official Statement is distributed (OS). Parity Bonds – Separate bond issues which have the same lien against pledged revenues as a prior issue. Pledged Revenues – The money promised to the payment of debt service and other deposits required by the resolution. Ratings – Generally, the series of letters used by the bond rating agencies to designate the credit quality of a bond issuer’s securities. Serial Bonds – Bonds whose principal is repaid in installments, generally once a year. Underwriting – The process of purchasing an issue of municipal bonds from the issuer and selling the bonds to investors. Underwriter – The broker or dealer who buys the new issue of securities from the issuer and sells the bonds to investors. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK B-3 THIS PAGE INTENTIONALLY LEFT BLANK APPENDIX C DEBT SERVICE SCHEDULES THIS PAGE INTENTIONALLY LEFT BLANK Issue GENERAL OBLIGATION BONDS Various Purpose Bonds 2003 Various Purpose Bonds 2004 Various Purpose Bonds 2005 Various Purpose Bonds 2006A Refunding Bonds 2006B Various Purpose Bonds 2007 Various Purpose Bonds 2009 Refunding Bonds 2010 TOTAL GENERAL OBLIGATION DEBT Less GO debt supported by pledged revenues NET GENERAL OBLIGATION DEBT City of Glendale, AZ Outstanding General Obligation & Other Debt As of June 30, 2011 Outstanding Outstanding Portion Subject to Portion Subject to Total Principal Issue Date Maturity Date Amount Issued 6% Limit 20% Limit Outstanding Page # Combined Debt Service C-3 03/01/2003 07/01/2018 66,400,000 0 18,635,000 18,635,000 C-4 & C-5 06/01/2004 07/01/2019 36,645,000 0 21,955,000 21,955,000 C-6 06/01/2005 07/01/2015 11,960,000 5,285,000 0 5,285,000 C-7 05/02/2006 07/01/2021 29,365,000 5,895,000 15,650,000 21,545,000 C-8 05/02/2006 07/01/2015 9,065,000 0 7,440,000 7,440,000 C-9 07/12/2007 07/01/2022 61,000,000 0 48,140,000 48,140,000 C-10 12/22/2009 07/01/2030 41,650,000 5,040,000 35,340,000 40,380,000 C-11 11/30/2010 07/01/2022 38,300,000 729,242 37,570,758 38,300,000 C-12 ------------------------ ------------------------ -----------------------$16,949,242 $184,730,758 $201,680,000 (7,410,000) C-13 $194,270,000 WATER AND SEWER REVENUE BONDS/OBLIGATIONS Senior Lien Water & Sewer Debt Water & Sewer Note (WIFA) 01/26/2001 Water & Sewer Note (WIFA) 03/19/2010 Combined Debt Service Combined Debt Service 7,502,071 6,091,072 $13,593,143 C-14 C-15 C-16 C-17 07/01/2022 07/01/2029 15,400,000 6,340,000 Senior Lien Water & Sewer Debt Water & Sewer Revenue Obligations 2003 Water & Sewer Revenue Obligations 2006 Water & Sewer Revenue Obligations 2007 Water & Sewer Revenue Obligations 2008 Water & Sewer Revenue Obligations 2010 07/01/2028 07/01/2026 07/01/2027 07/01/2028 07/01/2030 80,000,000 80,000,000 44,500,000 65,500,000 25,685,000 Combined Debt Service 77,405,000 76,545,000 40,850,000 58,555,000 25,685,000 $279,040,000 -----------------------$292,633,143 C-18 C-19 C-20 C-21 C-22 C-23 06/01/2004 05/02/2006 07/01/2014 07/01/2016 14,655,000 15,745,000 Combined Debt Service 7,580,000 8,710,000 $16,290,000 C-24 C-25 C-26 TRANSPORTATION EXCISE TAX REVENUE OBLIGATIONS Transportation Excise Tax Rev. Obligs. 2007 11/06/2007 07/01/2032 109,110,000 Combined Debt Service 97,035,000 97,035,000 C-27 C-28 LEASES Comerica Equipment Lease Bank of America Refunding Lease 03/29/2007 06/01/2011 03/30/2016 03/01/2018 1,368,800 11,503,100 Combined Debt Service 455,818 11,503,100 $11,958,918 C-29 C-30 C-31 NOTES/OTHER DEBT 99th & Northern Ave Note 04/01/2009 04/01/2013 3,540,390 Combined Debt Service 1,416,156 $1,416,156 C-32 C-33 12/16/2003 02/28/2006 06/27/2007 03/19/2008 11/30/2010 TOTAL WATER & SEWER REVENUE BONDS/OBLIGATIONS STREET AND HIGHWAY USER REVENUE BONDS Street & Highway User Bonds 2004 Street & Highway User Bonds 2006 UNRESTRICTED EXCISE TAX OBLIGATIONS Combined Debt Service C-34 MUNICIPAL PROPERTY CORPORATION DEBT Senior Lien MPC Debt Senior Lien Excise Tax Revenue Bonds 2003A Senior Lien Excise Tax Revenue Bonds 2003B Senior Lien Excise Tax Revenue Bonds 2004A Senior Lien Excise Tax Revenue Bonds 2006A Senior Lien Excise Tax Revenue Bonds 2008A Senior Lien Excise Tax Revenue Bonds 2008B Senior Lien Excise Tax Revenue Bonds 2008C 05/27/2003 05/27/2003 05/01/2004 06/14/2006 06/10/2008 06/10/2008 06/10/2008 07/01/2033 07/01/2033 07/01/2014 07/01/2026 07/01/2032 07/01/2033 07/01/2015 49,940,000 105,260,000 10,880,000 33,250,000 32,315,000 52,780,000 9,140,000 Combined Debt Service Combined Debt Service 44,400,000 96,065,000 5,295,000 28,360,000 32,220,000 51,075,000 5,650,000 263,065,000 C-35 C-36 C-37 C-38 C-39 C-40 C-41 C-42 C-43 Subordinate Lien MPC Debt Subordinate Lien Excise Tax Revenue Bonds 2002B Subordinate Lien Excise Tax Revenue Bonds 2003D 07/01/2002 07/01/2003 08/01/2033 08/01/2033 5,055,000 7,250,000 Combined Debt Service 5,055,000 7,250,000 12,305,000 -----------------------$275,370,000 C-44 C-45 C-46 10/30/2008 10/30/2008 10/30/2008 07/01/2038 07/01/2038 07/01/2017 137,495,000 48,670,000 13,585,000 Combined Debt Service 137,495,000 48,670,000 13,585,000 199,750,000 -----------------------$475,120,000 C-47 C-48 C-49 C-50 06/30/2010 06/30/2011 06/30/2011 06/30/2014 06/30/2021 06/30/2036 959,000 1,978,000 25,000,000 Combined Debt Service 725,699 1,978,000 25,000,000 $27,703,699 C-51 C-52 C-53 C-54 TOTAL MUNICIPAL PROPERTY CORPORATION DEBT PUBLIC FACILITIES CORPORATION DEBT Third Lien Excise Tax Revenue Bonds 2008A Third Lien Excise Tax Revenue Bonds 2008B Third Lien Excise Tax Revenue Bonds 2008C TOTAL UNRESTRICTED EXCISE TAX OBLIGATIONS INTERFUND LOANS Sanitation Fund Loan Debt Service Fund Loan General Fund Loan TOTAL INTERFUND LOANS TOTAL DEBT JNA Consulting Group, LLC $1,123,836,917 C-1 TOTAL ALL DEBT (Excludes Lease Financings) Date 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 JNA Consulting Group, LLC Principal Annual Principal 0.00 42,897,444.25 42,897,444.25 0.00 44,632,365.74 44,632,365.74 0.00 47,536,623.35 47,536,623.35 0.00 49,774,374.73 49,774,374.73 0.00 49,730,969.31 49,730,969.31 0.00 50,493,043.39 50,493,043.39 0.00 52,226,651.13 52,226,651.13 0.00 51,022,848.74 51,022,848.74 0.00 49,193,486.59 49,193,486.59 0.00 49,957,277.72 49,957,277.72 0.00 49,759,948.02 49,759,948.02 0.00 43,970,953.88 43,970,953.88 0.00 46,102,305.88 46,102,305.88 0.00 48,379,014.89 48,379,014.89 0.00 50,841,092.16 50,841,092.16 0.00 52,293,549.27 52,293,549.27 0.00 51,256,398.13 51,256,398.13 0.00 42,074,651.10 42,074,651.10 0.00 42,955,000.00 42,955,000.00 0.00 35,025,000.00 35,025,000.00 0.00 36,975,000.00 36,975,000.00 0.00 31,615,000.00 31,615,000.00 0.00 14,560,000.00 14,560,000.00 0.00 18,855,000.00 18,855,000.00 0.00 19,990,000.00 19,990,000.00 0.00 19,280,000.00 19,280,000.00 0.00 20,480,000.00 20,480,000.00 ------------------------------------------$1,111,877,998.28 $1,111,877,998.28 Interest 27,667,582.20 28,785,250.20 26,831,357.74 27,899,646.24 25,893,466.13 26,912,179.13 24,810,045.72 25,815,337.72 23,641,855.01 24,636,853.51 22,453,863.75 23,438,207.75 21,296,202.60 22,253,878.60 20,133,301.92 21,063,192.42 18,935,331.73 19,836,487.73 17,778,250.37 18,649,526.87 16,605,359.16 17,445,807.16 15,473,860.46 16,272,168.46 14,413,919.44 15,168,323.44 13,278,548.88 13,987,284.88 12,056,548.91 12,717,852.91 10,770,236.77 11,382,344.77 9,364,128.38 9,925,080.38 7,964,846.03 8,472,682.03 6,792,541.93 7,245,105.93 5,586,433.60 5,981,569.60 4,638,976.95 4,974,332.95 3,627,362.40 3,900,782.40 2,744,843.75 2,953,779.75 2,343,281.25 2,485,185.25 1,809,531.25 1,881,855.25 1,242,500.00 1,242,500.00 640,000.00 640,000.00 ---------------------$734,761,391.68 C-2 Annual Interest 56,452,832.39 54,731,003.98 52,805,645.27 50,625,383.44 48,278,708.52 45,892,071.50 43,550,081.20 41,196,494.35 38,771,819.47 36,427,777.24 34,051,166.32 31,746,028.93 29,582,242.89 27,265,833.76 24,774,401.81 22,152,581.55 19,289,208.76 16,437,528.06 14,037,647.85 11,568,003.20 9,613,309.90 7,528,144.80 5,698,623.50 4,828,466.50 3,691,386.50 2,485,000.00 1,280,000.00 ---------------------$734,761,391.68 Total Payment Annual Payment 27,667,582.20 71,682,694.45 99,350,276.64 26,831,357.74 72,532,011.98 99,363,369.72 25,893,466.13 74,448,802.48 100,342,268.62 24,810,045.72 75,589,712.45 100,399,758.17 23,641,855.01 74,367,822.82 98,009,677.83 22,453,863.75 73,931,251.14 96,385,114.89 21,296,202.60 74,480,529.73 95,776,732.33 20,133,301.92 72,086,041.16 92,219,343.09 18,935,331.73 69,029,974.32 87,965,306.06 17,778,250.37 68,606,804.59 86,385,054.96 16,605,359.16 67,205,755.18 83,811,114.34 15,473,860.46 60,243,122.34 75,716,982.81 14,413,919.44 61,270,629.32 75,684,548.77 13,278,548.88 62,366,299.77 75,644,848.65 12,056,548.91 63,558,945.07 75,615,493.97 10,770,236.77 63,675,894.04 74,446,130.82 9,364,128.38 61,181,478.51 70,545,606.89 7,964,846.03 50,547,333.13 58,512,179.16 6,792,541.93 50,200,105.93 56,992,647.85 5,586,433.60 41,006,569.60 46,593,003.20 4,638,976.95 41,949,332.95 46,588,309.90 3,627,362.40 35,515,782.40 39,143,144.80 2,744,843.75 17,513,779.75 20,258,623.50 2,343,281.25 21,340,185.25 23,683,466.50 1,809,531.25 21,871,855.25 23,681,386.50 1,242,500.00 20,522,500.00 21,765,000.00 640,000.00 21,120,000.00 21,760,000.00 ------------------------------------------$1,846,639,389.96 $1,846,639,389.96 Total General Obligation Debt Service Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 JNA Consulting Group, LLC Principal Interest Total Payment 2,965,000 4,504,576.25 4,504,576.25 4,172,520.00 4,172,520.00 3,809,916.88 3,809,916.88 3,458,338.75 3,458,338.75 3,039,979.38 3,039,979.38 2,647,815.63 2,647,815.63 2,231,634.38 2,231,634.38 1,844,209.38 1,844,209.38 1,448,296.88 1,448,296.88 1,135,234.38 1,135,234.38 814,803.13 814,803.13 571,934.38 571,934.38 515,871.88 515,871.88 455,012.50 455,012.50 388,900.00 388,900.00 318,775.00 318,775.00 244,384.38 244,384.38 167,181.25 167,181.25 85,243.75 85,243.75 4,504,576.25 20,689,576.25 4,172,520.00 21,022,520.00 3,809,916.88 20,149,916.88 3,458,338.75 23,528,338.75 3,039,979.38 21,514,979.38 2,647,815.63 21,837,815.63 2,231,634.38 21,621,634.38 1,844,209.38 18,439,209.38 1,448,296.88 14,923,296.88 1,135,234.38 14,310,234.38 814,803.13 11,859,803.13 571,934.38 2,871,934.38 515,871.88 2,890,871.88 455,012.50 2,915,012.50 388,900.00 2,938,900.00 318,775.00 2,963,775.00 244,384.38 2,989,384.38 167,181.25 3,017,181.25 85,243.75 3,050,243.75 ---------------------$201,680,000 ---------------------$63,709,256.25 ---------------------$265,389,256.25 16,185,000 16,850,000 16,340,000 20,070,000 18,475,000 19,190,000 19,390,000 16,595,000 13,475,000 13,175,000 11,045,000 2,300,000 2,375,000 2,460,000 2,550,000 2,645,000 2,745,000 2,850,000 Annual Payment 6% Allocation of GO Debt 20% Total 25,194,152.50 4,315,000 11,870,000 16,185,000 25,195,040.00 4,440,000 12,410,000 16,850,000 23,959,833.75 5,314,242 11,025,758 16,340,000 26,986,677.50 2,880,000 17,190,000 20,070,000 24,554,958.75 0 18,475,000 18,475,000 24,485,631.25 0 19,190,000 19,190,000 23,853,268.75 0 19,390,000 19,390,000 20,283,418.75 0 16,595,000 16,595,000 16,371,593.75 0 13,475,000 13,475,000 15,445,468.75 0 13,175,000 13,175,000 12,674,606.25 0 11,045,000 11,045,000 3,443,868.75 0 2,300,000 2,300,000 3,406,743.75 0 2,375,000 2,375,000 3,370,025.00 0 2,460,000 2,460,000 3,327,800.00 0 2,550,000 2,550,000 3,282,550.00 0 2,645,000 2,645,000 3,233,768.75 0 2,745,000 2,745,000 3,184,362.50 0 2,850,000 2,850,000 3,135,487.50 0 2,965,000 2,965,000 ---------------------$265,389,256.25 ---------------------$16,949,242 ---------------------$184,730,758 ---------------------$201,680,000 C-3 2003 General Obligation Various Purpose Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 Principal Rate 4,285,000 4.000% 4,500,000 5.000% 1,020,000 5.000% 1,060,000 5.000% 1,100,000 5.000% 1,145,000 5.000% 5,525,000 2.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% ---------------------$18,635,000 JNA Consulting Group, LLC Interest Total Payment Annual Payment 361,575.00 361,575.00 275,875.00 275,875.00 163,375.00 163,375.00 137,875.00 137,875.00 111,375.00 111,375.00 83,875.00 83,875.00 55,250.00 55,250.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 361,575.00 4,646,575.00 275,875.00 4,775,875.00 163,375.00 1,183,375.00 137,875.00 1,197,875.00 111,375.00 1,211,375.00 83,875.00 1,228,875.00 55,250.00 5,580,250.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$2,378,400.00 ---------------------$21,013,400.00 C-4 6% Allocation of GO Debt 20% Total 5,008,150.00 0 4,285,000 4,285,000 5,051,750.00 0 4,500,000 4,500,000 1,346,750.00 0 1,020,000 1,020,000 1,335,750.00 0 1,060,000 1,060,000 1,322,750.00 0 1,100,000 1,100,000 1,312,750.00 0 1,145,000 1,145,000 5,635,500.00 0 5,525,000 5,525,000 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 ---------------------$21,013,400.00 ---------------------$0 ---------------------$18,635,000 ---------------------$18,635,000 2003 General Obligation Various Purpose Bonds (Water & Sewer Portion) Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 Principal Rate 925,000 4.000% 970,000 5.000% 1,020,000 5.000% 1,060,000 5.000% 1,100,000 5.000% 1,145,000 5.000% 1,190,000 2.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% ---------------------$7,410,000 JNA Consulting Group, LLC Interest Total Payment Annual Payment 162,775.00 162,775.00 144,275.00 144,275.00 120,025.00 120,025.00 94,525.00 94,525.00 68,025.00 68,025.00 40,525.00 40,525.00 11,900.00 11,900.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 162,775.00 1,087,775.00 144,275.00 1,114,275.00 120,025.00 1,140,025.00 94,525.00 1,154,525.00 68,025.00 1,168,025.00 40,525.00 1,185,525.00 11,900.00 1,201,900.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$1,284,100.00 ---------------------$8,694,100.00 C-5 6% Allocation of GO Debt 20% Total 1,250,550.00 0 925,000 925,000 1,258,550.00 0 970,000 970,000 1,260,050.00 0 1,020,000 1,020,000 1,249,050.00 0 1,060,000 1,060,000 1,236,050.00 0 1,100,000 1,100,000 1,226,050.00 0 1,145,000 1,145,000 1,213,800.00 0 1,190,000 1,190,000 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 ---------------------$8,694,100.00 ---------------------$0 ---------------------$7,410,000 ---------------------$7,410,000 2004 Various Purpose General Obligation Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 Principal Rate 2,350,000 4.000% 2,440,000 4.000% 2,550,000 4.250% 2,665,000 4.125% 2,795,000 4.250% 2,915,000 5.000% 3,050,000 5.000% 3,190,000 4.500% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% ---------------------$21,955,000 JNA Consulting Group, LLC Interest Total Payment Annual Payment 485,246.88 485,246.88 438,246.88 438,246.88 389,446.88 389,446.88 335,259.38 335,259.38 280,293.75 280,293.75 220,900.00 220,900.00 148,025.00 148,025.00 71,775.00 71,775.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 485,246.88 2,835,246.88 438,246.88 2,878,246.88 389,446.88 2,939,446.88 335,259.38 3,000,259.38 280,293.75 3,075,293.75 220,900.00 3,135,900.00 148,025.00 3,198,025.00 71,775.00 3,261,775.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$4,738,387.50 ---------------------$26,693,387.50 C-6 6% Allocation of GO Debt 20% Total 3,320,493.75 0 2,350,000 2,350,000 3,316,493.75 0 2,440,000 2,440,000 3,328,893.75 0 2,550,000 2,550,000 3,335,518.75 0 2,665,000 2,665,000 3,355,587.50 0 2,795,000 2,795,000 3,356,800.00 0 2,915,000 2,915,000 3,346,050.00 0 3,050,000 3,050,000 3,333,550.00 0 3,190,000 3,190,000 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 ---------------------$26,693,387.50 ---------------------$0 ---------------------$21,955,000 ---------------------$21,955,000 2005 Various Purpose General Obligation Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 Principal Rate 1,250,000 3.625% 1,295,000 3.875% 1,345,000 3.875% 1,395,000 4.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% ---------------------$5,285,000 JNA Consulting Group, LLC Interest Total Payment 101,706.25 101,706.25 79,050.00 79,050.00 53,959.38 53,959.38 27,900.00 27,900.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 101,706.25 1,351,706.25 79,050.00 1,374,050.00 53,959.38 1,398,959.38 27,900.00 1,422,900.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$525,231.25 ---------------------$5,810,231.25 C-7 Annual Payment 6% Allocation of GO Debt 20% 1,453,412.50 1,250,000 0 1,250,000 1,453,100.00 1,295,000 0 1,295,000 1,452,918.75 1,345,000 0 1,345,000 1,450,800.00 1,395,000 0 1,395,000 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 ---------------------$5,810,231.25 ---------------------$5,285,000 ---------------------$0 ---------------------$5,285,000 Total 2006A Various Purpose General Obligation Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 Principal Rate 1,785,000 5.000% 1,850,000 4.000% 1,925,000 5.000% 2,000,000 4.000% 2,080,000 5.000% 2,170,000 4.125% 2,260,000 4.375% 2,370,000 4.500% 2,490,000 4.500% 2,615,000 4.625% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% ---------------------$21,545,000 JNA Consulting Group, LLC Interest Total Payment 485,765.63 485,765.63 441,140.63 441,140.63 404,140.63 404,140.63 356,015.63 356,015.63 316,015.63 316,015.63 264,015.63 264,015.63 219,259.38 219,259.38 169,821.88 169,821.88 116,496.88 116,496.88 60,471.88 60,471.88 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 485,765.63 2,270,765.63 441,140.63 2,291,140.63 404,140.63 2,329,140.63 356,015.63 2,356,015.63 316,015.63 2,396,015.63 264,015.63 2,434,015.63 219,259.38 2,479,259.38 169,821.88 2,539,821.88 116,496.88 2,606,496.88 60,471.88 2,675,471.88 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$5,666,287.50 ---------------------$27,211,287.50 C-8 Annual Payment 6% Allocation of GO Debt 20% 2,756,531.25 1,785,000 0 1,785,000 2,732,281.25 1,850,000 0 1,850,000 2,733,281.25 1,925,000 0 1,925,000 2,712,031.25 335,000 1,665,000 2,000,000 2,712,031.25 0 2,080,000 2,080,000 2,698,031.25 0 2,170,000 2,170,000 2,698,518.75 0 2,260,000 2,260,000 2,709,643.75 0 2,370,000 2,370,000 2,722,993.75 0 2,490,000 2,490,000 2,735,943.75 0 2,615,000 2,615,000 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 ---------------------$27,211,287.50 ---------------------$5,895,000 ---------------------$15,650,000 ---------------------$21,545,000 Total 2006B General Obligation Refunding Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 JNA Consulting Group, LLC Principal Rate Interest Total Payment Annual Payment 0 186,000.00 186,000.00 143,125.00 143,125.00 97,875.00 97,875.00 50,250.00 50,250.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 186,000.00 1,901,000.00 143,125.00 1,953,125.00 97,875.00 2,002,875.00 50,250.00 2,060,250.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$7,440,000 ---------------------$954,500.00 ---------------------$8,394,500.00 1,715,000 5.000% 1,810,000 5.000% 1,905,000 5.000% 2,010,000 5.000% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 C-9 6% Allocation of GO Debt 20% Total 2,087,000.00 0 1,715,000 1,715,000 2,096,250.00 0 1,810,000 1,810,000 2,100,750.00 0 1,905,000 1,905,000 2,110,500.00 0 2,010,000 2,010,000 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 ---------------------$8,394,500.00 ---------------------$0 ---------------------$7,440,000 ---------------------$7,440,000 2007 Various Purpose General Obligation Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 Principal Rate 3,520,000 4.250% 3,660,000 4.250% 3,805,000 4.250% 3,960,000 4.250% 4,120,000 4.250% 4,290,000 4.500% 4,485,000 5.000% 4,710,000 5.000% 4,945,000 4.500% 5,195,000 5.000% 5,450,000 4.500% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% 0 0.000% ---------------------$48,140,000 JNA Consulting Group, LLC Interest Total Payment Annual Payment 1,095,293.75 1,095,293.75 1,020,493.75 1,020,493.75 942,718.75 942,718.75 861,862.50 861,862.50 777,712.50 777,712.50 690,162.50 690,162.50 593,637.50 593,637.50 481,512.50 481,512.50 363,762.50 363,762.50 252,500.00 252,500.00 122,625.00 122,625.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,095,293.75 4,615,293.75 1,020,493.75 4,680,493.75 942,718.75 4,747,718.75 861,862.50 4,821,862.50 777,712.50 4,897,712.50 690,162.50 4,980,162.50 593,637.50 5,078,637.50 481,512.50 5,191,512.50 363,762.50 5,308,762.50 252,500.00 5,447,500.00 122,625.00 5,572,625.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$14,404,562.50 ---------------------$62,544,562.50 C-10 6% Allocation of GO Debt 20% Total 5,710,587.50 3,520,000 3,520,000 5,700,987.50 3,660,000 3,660,000 5,690,437.50 3,805,000 3,805,000 5,683,725.00 3,960,000 3,960,000 5,675,425.00 4,120,000 4,120,000 5,670,325.00 4,290,000 4,290,000 5,672,275.00 4,485,000 4,485,000 5,673,025.00 4,710,000 4,710,000 5,672,525.00 4,945,000 4,945,000 5,700,000.00 5,195,000 5,195,000 5,695,250.00 5,450,000 5,450,000 0.00 0 0 0.00 0 0 0.00 0 0 0.00 0 0 0.00 0 0 0.00 0 0 0.00 0 0 0.00 0 0 ---------------------$48,140,000 ---------------------$48,140,000 ---------------------$62,544,562.50 ---------------------$0 2009 Various Purpose General Obligation Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 Principal 1,280,000 2.250% 1,295,000 2.500% 1,315,000 3.000% 1,335,000 3.250% 1,880,000 3.800% 1,920,000 4.000% 1,970,000 4.250% 2,025,000 4.500% 2,090,000 4.500% 2,155,000 4.625% 2,225,000 4.750% 2,300,000 4.875% 2,375,000 5.125% 2,460,000 5.375% 2,550,000 5.500% 2,645,000 5.625% 2,745,000 5.625% 2,850,000 5.750% 2,965,000 5.750% ---------------------$40,380,000 JNA Consulting Group, LLC Rate Interest Total Payment 955,188.75 955,188.75 940,788.75 940,788.75 924,601.25 924,601.25 904,876.25 904,876.25 883,182.50 883,182.50 847,462.50 847,462.50 809,062.50 809,062.50 767,200.00 767,200.00 721,637.50 721,637.50 674,612.50 674,612.50 624,778.13 624,778.13 571,934.38 571,934.38 515,871.88 515,871.88 455,012.50 455,012.50 388,900.00 388,900.00 318,775.00 318,775.00 244,384.38 244,384.38 167,181.25 167,181.25 85,243.75 85,243.75 955,188.75 2,235,188.75 940,788.75 2,235,788.75 924,601.25 2,239,601.25 904,876.25 2,239,876.25 883,182.50 2,763,182.50 847,462.50 2,767,462.50 809,062.50 2,779,062.50 767,200.00 2,792,200.00 721,637.50 2,811,637.50 674,612.50 2,829,612.50 624,778.13 2,849,778.13 571,934.38 2,871,934.38 515,871.88 2,890,871.88 455,012.50 2,915,012.50 388,900.00 2,938,900.00 318,775.00 2,963,775.00 244,384.38 2,989,384.38 167,181.25 3,017,181.25 85,243.75 3,050,243.75 ---------------------$23,601,387.50 ---------------------$63,981,387.50 C-11 Annual Payment 6% Allocation of GO Debt 20% 3,190,377.50 1,280,000 0 1,280,000 3,176,577.50 1,295,000 0 1,295,000 3,164,202.50 1,315,000 0 1,315,000 3,144,752.50 1,150,000 185,000 1,335,000 3,646,365.00 0 1,880,000 1,880,000 3,614,925.00 0 1,920,000 1,920,000 3,588,125.00 0 1,970,000 1,970,000 3,559,400.00 0 2,025,000 2,025,000 3,533,275.00 0 2,090,000 2,090,000 3,504,225.00 0 2,155,000 2,155,000 3,474,556.25 0 2,225,000 2,225,000 3,443,868.75 0 2,300,000 2,300,000 3,406,743.75 0 2,375,000 2,375,000 3,370,025.00 0 2,460,000 2,460,000 3,327,800.00 0 2,550,000 2,550,000 3,282,550.00 0 2,645,000 2,645,000 3,233,768.75 0 2,745,000 2,745,000 3,184,362.50 0 2,850,000 2,850,000 3,135,487.50 0 2,965,000 2,965,000 ---------------------$63,981,387.50 ---------------------$5,040,000 ---------------------$35,340,000 ---------------------$40,380,000 Total 2010 General Obligation Refunding Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 JNA Consulting Group, LLC Principal Rate Interest Total Payment Annual Payment 0 833,800.00 833,800.00 833,800.00 833,800.00 833,800.00 833,800.00 784,300.00 784,300.00 671,400.00 671,400.00 541,400.00 541,400.00 406,400.00 406,400.00 353,900.00 353,900.00 246,400.00 246,400.00 147,650.00 147,650.00 67,400.00 67,400.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 833,800.00 833,800.00 833,800.00 833,800.00 833,800.00 3,308,800.00 784,300.00 6,429,300.00 671,400.00 7,171,400.00 541,400.00 7,291,400.00 406,400.00 2,506,400.00 353,900.00 4,653,900.00 246,400.00 4,196,400.00 147,650.00 3,357,650.00 67,400.00 3,437,400.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$38,300,000 ---------------------$11,440,500.00 ---------------------$49,740,500.00 2,475,000 4.000% 5,645,000 4.000% 6,500,000 4.000% 6,750,000 4.000% 2,100,000 5.000% 4,300,000 5.000% 3,950,000 5.000% 3,210,000 5.000% 3,370,000 4.000% 0 0 0 0 0 0 0 C-12 6% Allocation of GO Debt 20% Total 1,667,600.00 0 0 0 1,667,600.00 0 0 0 4,142,600.00 729,242 1,745,758 2,475,000 7,213,600.00 0 5,645,000 5,645,000 7,842,800.00 0 6,500,000 6,500,000 7,832,800.00 0 6,750,000 6,750,000 2,912,800.00 0 2,100,000 2,100,000 5,007,800.00 0 4,300,000 4,300,000 4,442,800.00 0 3,950,000 3,950,000 3,505,300.00 0 3,210,000 3,210,000 3,504,800.00 0 3,370,000 3,370,000 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 0.00 0 0 0 ---------------------$49,740,500.00 ---------------------$729,242 ---------------------$37,570,758 ---------------------$38,300,000 Combined Water & Sewer Portions of General Obligation Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 JNA Consulting Group, LLC Principal Interest Total Payment 0 162,775.00 162,775.00 144,275.00 144,275.00 120,025.00 120,025.00 94,525.00 94,525.00 68,025.00 68,025.00 40,525.00 40,525.00 11,900.00 11,900.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 162,775.00 1,087,775.00 144,275.00 1,114,275.00 120,025.00 1,140,025.00 94,525.00 1,154,525.00 68,025.00 1,168,025.00 40,525.00 1,185,525.00 11,900.00 1,201,900.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$7,410,000 ---------------------$1,284,100.00 ---------------------$8,694,100.00 925,000 970,000 1,020,000 1,060,000 1,100,000 1,145,000 1,190,000 0 0 0 0 0 0 0 0 0 0 0 C-13 Annual Payment 1,250,550.00 1,258,550.00 1,260,050.00 1,249,050.00 1,236,050.00 1,226,050.00 1,213,800.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$8,694,100.00 Total Water & Sewer Revenue Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 JNA Consulting Group, LLC Principal 11,551,954 11,998,417 12,541,207 13,120,375 13,745,969 14,383,043 15,061,651 15,746,849 16,111,487 16,209,278 16,964,948 18,870,954 19,742,306 20,674,015 21,671,092 21,583,549 18,856,398 6,979,651 6,820,000 ---------------------$292,633,143 Interest Total Payment 6,947,729.60 6,947,729.60 6,730,069.27 6,730,069.27 6,466,393.33 6,466,393.33 6,185,981.19 6,185,981.19 5,882,561.71 5,882,561.71 5,569,806.95 5,569,806.95 5,242,275.90 5,242,275.90 4,906,283.22 4,906,283.22 4,552,724.21 4,552,724.21 4,176,649.52 4,176,649.52 3,801,433.96 3,801,433.96 3,417,590.01 3,417,590.01 2,983,996.17 2,983,996.17 2,517,352.70 2,517,352.70 2,023,356.68 2,023,356.68 1,505,386.32 1,505,386.32 943,134.75 943,134.75 436,370.01 436,370.01 223,355.00 223,355.00 ---------------------$149,024,901.03 6,947,729.60 18,499,683.85 6,730,069.27 18,728,486.01 6,466,393.33 19,007,600.68 6,185,981.19 19,306,355.92 5,882,561.71 19,628,531.02 5,569,806.95 19,952,850.34 5,242,275.90 20,303,927.03 4,906,283.22 20,653,131.96 4,552,724.21 20,664,210.80 4,176,649.52 20,385,927.24 3,801,433.96 20,766,381.98 3,417,590.01 22,288,543.89 2,983,996.17 22,726,302.05 2,517,352.70 23,191,367.59 2,023,356.68 23,694,448.84 1,505,386.32 23,088,935.59 943,134.75 19,799,532.88 436,370.01 7,416,021.11 223,355.00 7,043,355.00 ---------------------$441,658,044.31 C-14 Annual Payment 25,447,413.44 25,458,555.27 25,473,994.02 25,492,337.12 25,511,092.73 25,522,657.29 25,546,202.93 25,559,415.19 25,216,935.01 24,562,576.76 24,567,815.94 25,706,133.91 25,710,298.22 25,708,720.30 25,717,805.52 24,594,321.92 20,742,667.64 7,852,391.11 7,266,710.00 ---------------------$441,658,044.31 Total Senior Lien Water & Sewer Revenue Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 JNA Consulting Group, LLC Principal 1,006,954 1,043,417 1,081,207 1,120,375 1,160,969 1,203,043 1,246,651 1,291,849 971,487 339,278 349,948 360,954 372,306 384,015 396,092 408,549 421,398 434,651 0 ---------------------$13,593,143 Interest 135,772.72 135,772.72 125,093.64 125,093.64 114,023.96 114,023.96 102,549.32 102,549.32 90,654.84 90,654.84 78,325.07 78,325.07 65,544.03 65,544.03 52,295.10 52,295.10 38,561.08 38,561.08 28,517.65 28,517.65 25,727.09 25,727.09 22,848.76 22,848.76 19,879.92 19,879.92 16,817.70 16,817.70 13,659.18 13,659.18 10,401.32 10,401.32 7,041.00 7,041.00 3,575.01 3,575.01 0.00 0.00 ---------------------$1,902,574.78 C-15 Total Payment 135,772.72 1,142,726.97 125,093.64 1,168,510.38 114,023.96 1,195,231.31 102,549.32 1,222,924.05 90,654.84 1,251,624.15 78,325.07 1,281,368.46 65,544.03 1,312,195.16 52,295.10 1,344,143.84 38,561.08 1,010,047.67 28,517.65 367,795.37 25,727.09 375,675.11 22,848.76 383,802.64 19,879.92 392,185.80 16,817.70 400,832.59 13,659.18 409,751.34 10,401.32 418,950.59 7,041.00 428,439.13 3,575.01 438,226.11 0.00 0.00 ---------------------$15,495,718.06 Annual Payment 1,278,499.69 1,293,604.02 1,309,255.27 1,325,473.37 1,342,278.98 1,359,693.54 1,377,739.18 1,396,438.94 1,048,608.76 396,313.01 401,402.19 406,651.41 412,065.72 417,650.30 423,410.52 429,351.92 435,480.14 441,801.11 0.00 ---------------------$15,495,718.06 Water & Sewer Revenue Bonds Series 2001 (WIFA) Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 Principal 750,197.59 2.284% 778,585.07 2.284% 808,046.73 2.284% 838,623.21 2.284% 870,356.72 2.284% 903,291.02 2.284% 937,471.55 2.284% 972,945.47 2.284% 642,553.80 2.284% ---------------------$7,502,071.16 JNA Consulting Group, LLC Rate Interest Total Payment 85,673.65 85,673.65 77,106.40 77,106.40 68,214.95 68,214.95 58,987.06 58,987.06 49,409.98 49,409.98 39,470.51 39,470.51 29,154.93 29,154.93 18,449.00 18,449.00 7,337.96 7,337.96 85,673.65 835,871.24 77,106.40 855,691.47 68,214.95 876,261.68 58,987.06 897,610.27 49,409.98 919,766.70 39,470.51 942,761.53 29,154.93 966,626.48 18,449.00 991,394.47 7,337.96 649,891.76 ---------------------$867,608.90 ---------------------$8,369,680.06 C-16 Annual Payment 921,544.90 932,797.86 944,476.64 956,597.33 969,176.69 982,232.04 995,781.40 1,009,843.47 657,229.73 ---------------------$8,369,680.06 Water & Sewer Revenue Bonds Series 2010 (WIFA) Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 Principal 256,756.66 1.645% 264,831.67 1.645% 273,160.62 1.645% 281,751.52 1.645% 290,612.59 1.645% 299,752.37 1.645% 309,179.58 1.645% 318,903.27 1.645% 328,932.79 1.645% 339,277.72 1.645% 349,948.02 1.645% 360,953.88 1.645% 372,305.88 1.645% 384,014.89 1.645% 396,092.16 1.645% 408,549.27 1.645% 421,398.13 1.645% 434,651.10 1.645% ---------------------$6,091,072.12 JNA Consulting Group, LLC Rate Interest Total Payment 50,099.07 50,099.07 47,987.24 47,987.24 45,809.00 45,809.00 43,562.26 43,562.26 41,244.85 41,244.85 38,854.56 38,854.56 36,389.10 36,389.10 33,846.10 33,846.10 31,223.12 31,223.12 28,517.65 28,517.65 25,727.09 25,727.09 22,848.76 22,848.76 19,879.92 19,879.92 16,817.70 16,817.70 13,659.18 13,659.18 10,401.32 10,401.32 7,041.00 7,041.00 3,575.01 3,575.01 50,099.07 306,855.73 47,987.24 312,818.91 45,809.00 318,969.62 43,562.26 325,313.78 41,244.85 331,857.44 38,854.56 338,606.93 36,389.10 345,568.68 33,846.10 352,749.37 31,223.12 360,155.91 28,517.65 367,795.37 25,727.09 375,675.11 22,848.76 383,802.64 19,879.92 392,185.80 16,817.70 400,832.59 13,659.18 409,751.34 10,401.32 418,950.59 7,041.00 428,439.13 3,575.01 438,226.11 ---------------------$1,034,965.88 ---------------------$7,126,038.00 C-17 Annual Payment 356,954.80 360,806.16 364,778.63 368,876.04 373,102.29 377,461.50 381,957.78 386,595.47 391,379.03 396,313.01 401,402.19 406,651.41 412,065.72 417,650.30 423,410.52 429,351.92 435,480.14 441,801.11 ---------------------$7,126,038.00 Total Subordinate Lien Water & Sewer Revenue Obligations Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 JNA Consulting Group, LLC Principal 10,545,000 10,955,000 11,460,000 12,000,000 12,585,000 13,180,000 13,815,000 14,455,000 15,140,000 15,870,000 16,615,000 18,510,000 19,370,000 20,290,000 21,275,000 21,175,000 18,435,000 6,545,000 6,820,000 ---------------------$279,040,000 Interest Total Payment 6,811,956.88 6,811,956.88 6,604,975.63 6,604,975.63 6,352,369.38 6,352,369.38 6,083,431.88 6,083,431.88 5,791,906.88 5,791,906.88 5,491,481.88 5,491,481.88 5,176,731.88 5,176,731.88 4,853,988.13 4,853,988.13 4,514,163.13 4,514,163.13 4,148,131.88 4,148,131.88 3,775,706.88 3,775,706.88 3,394,741.25 3,394,741.25 2,964,116.25 2,964,116.25 2,500,535.00 2,500,535.00 2,009,697.50 2,009,697.50 1,494,985.00 1,494,985.00 936,093.75 936,093.75 432,795.00 432,795.00 223,355.00 223,355.00 ---------------------$147,122,326.25 6,811,956.88 17,356,956.88 6,604,975.63 17,559,975.63 6,352,369.38 17,812,369.38 6,083,431.88 18,083,431.88 5,791,906.88 18,376,906.88 5,491,481.88 18,671,481.88 5,176,731.88 18,991,731.88 4,853,988.13 19,308,988.13 4,514,163.13 19,654,163.13 4,148,131.88 20,018,131.88 3,775,706.88 20,390,706.88 3,394,741.25 21,904,741.25 2,964,116.25 22,334,116.25 2,500,535.00 22,790,535.00 2,009,697.50 23,284,697.50 1,494,985.00 22,669,985.00 936,093.75 19,371,093.75 432,795.00 6,977,795.00 223,355.00 7,043,355.00 ---------------------$426,162,326.25 C-18 Annual Payment 24,168,913.75 24,164,951.25 24,164,738.75 24,166,863.75 24,168,813.75 24,162,963.75 24,168,463.75 24,162,976.25 24,168,326.25 24,166,263.75 24,166,413.75 25,299,482.50 25,298,232.50 25,291,070.00 25,294,395.00 24,164,970.00 20,307,187.50 7,410,590.00 7,266,710.00 ---------------------$426,162,326.25 Water & Sewer Revenue Obligations Series 2003 Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 Principal 2,725,000 4.000% 2,830,000 5.000% 2,975,000 5.000% 3,120,000 5.000% 3,280,000 5.000% 3,445,000 5.000% 3,615,000 5.000% 3,795,000 5.000% 3,985,000 5.000% 4,185,000 5.000% 4,395,000 5.000% 5,740,000 5.000% 6,030,000 5.000% 6,330,000 5.000% 6,645,000 5.000% 6,980,000 5.000% 7,330,000 5.000% ----------------$77,405,000 JNA Consulting Group, LLC Rate Interest Total Payment 1,921,500.00 1,921,500.00 1,867,000.00 1,867,000.00 1,796,250.00 1,796,250.00 1,721,875.00 1,721,875.00 1,643,875.00 1,643,875.00 1,561,875.00 1,561,875.00 1,475,750.00 1,475,750.00 1,385,375.00 1,385,375.00 1,290,500.00 1,290,500.00 1,190,875.00 1,190,875.00 1,086,250.00 1,086,250.00 976,375.00 976,375.00 832,875.00 832,875.00 682,125.00 682,125.00 523,875.00 523,875.00 357,750.00 357,750.00 183,250.00 183,250.00 1,921,500.00 4,646,500.00 1,867,000.00 4,697,000.00 1,796,250.00 4,771,250.00 1,721,875.00 4,841,875.00 1,643,875.00 4,923,875.00 1,561,875.00 5,006,875.00 1,475,750.00 5,090,750.00 1,385,375.00 5,180,375.00 1,290,500.00 5,275,500.00 1,190,875.00 5,375,875.00 1,086,250.00 5,481,250.00 976,375.00 6,716,375.00 832,875.00 6,862,875.00 682,125.00 7,012,125.00 523,875.00 7,168,875.00 357,750.00 7,337,750.00 183,250.00 7,513,250.00 ----------------$40,994,750.00 ----------------$118,399,750.00 C-19 Annual Payment 6,568,000.00 6,564,000.00 6,567,500.00 6,563,750.00 6,567,750.00 6,568,750.00 6,566,500.00 6,565,750.00 6,566,000.00 6,566,750.00 6,567,500.00 7,692,750.00 7,695,750.00 7,694,250.00 7,692,750.00 7,695,500.00 7,696,500.00 ----------------$118,399,750.00 Water & Sewer Revenue Obligations Series 2006 Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 Principal 3,590,000 4.000% 3,745,000 5.250% 3,925,000 5.250% 4,140,000 5.250% 4,355,000 5.000% 4,570,000 5.000% 4,800,000 5.000% 5,040,000 5.000% 5,295,000 5.000% 5,560,000 4.125% 5,785,000 4.125% 6,030,000 4.250% 6,280,000 4.500% 6,565,000 4.500% 6,865,000 4.500% ----------------$76,545,000 JNA Consulting Group, LLC Rate Interest Total Payment 1,788,915.63 1,788,915.63 1,717,115.63 1,717,115.63 1,618,809.38 1,618,809.38 1,515,778.13 1,515,778.13 1,407,103.13 1,407,103.13 1,298,228.13 1,298,228.13 1,183,978.13 1,183,978.13 1,063,978.13 1,063,978.13 937,978.13 937,978.13 805,603.13 805,603.13 690,928.13 690,928.13 571,612.50 571,612.50 443,475.00 443,475.00 302,175.00 302,175.00 154,462.50 154,462.50 1,788,915.63 5,378,915.63 1,717,115.63 5,462,115.63 1,618,809.38 5,543,809.38 1,515,778.13 5,655,778.13 1,407,103.13 5,762,103.13 1,298,228.13 5,868,228.13 1,183,978.13 5,983,978.13 1,063,978.13 6,103,978.13 937,978.13 6,232,978.13 805,603.13 6,365,603.13 690,928.13 6,475,928.13 571,612.50 6,601,612.50 443,475.00 6,723,475.00 302,175.00 6,867,175.00 154,462.50 7,019,462.50 ----------------$31,000,281.25 ----------------$107,545,281.25 C-20 Annual Payment 7,167,831.25 7,179,231.25 7,162,618.75 7,171,556.25 7,169,206.25 7,166,456.25 7,167,956.25 7,167,956.25 7,170,956.25 7,171,206.25 7,166,856.25 7,173,225.00 7,166,950.00 7,169,350.00 7,173,925.00 ----------------$107,545,281.25 Water & Sewer Revenue Obligations Series 2007 Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 Principal 1,775,000 4.250% 1,840,000 4.250% 1,930,000 4.375% 2,010,000 5.000% 2,110,000 5.000% 2,215,000 5.000% 2,330,000 4.375% 2,430,000 4.375% 2,535,000 5.000% 2,660,000 5.000% 2,795,000 5.000% 2,935,000 5.000% 3,085,000 5.000% 3,235,000 5.000% 3,395,000 5.000% 3,570,000 4.625% ----------------$40,850,000 JNA Consulting Group, LLC Rate Interest Total Payment 980,093.75 980,093.75 942,375.00 942,375.00 903,275.00 903,275.00 861,056.25 861,056.25 810,806.25 810,806.25 758,056.25 758,056.25 702,681.25 702,681.25 651,712.50 651,712.50 598,556.25 598,556.25 535,181.25 535,181.25 468,681.25 468,681.25 398,806.25 398,806.25 325,431.25 325,431.25 248,306.25 248,306.25 167,431.25 167,431.25 82,556.25 82,556.25 980,093.75 2,755,093.75 942,375.00 2,782,375.00 903,275.00 2,833,275.00 861,056.25 2,871,056.25 810,806.25 2,920,806.25 758,056.25 2,973,056.25 702,681.25 3,032,681.25 651,712.50 3,081,712.50 598,556.25 3,133,556.25 535,181.25 3,195,181.25 468,681.25 3,263,681.25 398,806.25 3,333,806.25 325,431.25 3,410,431.25 248,306.25 3,483,306.25 167,431.25 3,562,431.25 82,556.25 3,652,556.25 ----------------$18,870,012.50 ----------------$59,720,012.50 C-21 Annual Payment 3,735,187.50 3,724,750.00 3,736,550.00 3,732,112.50 3,731,612.50 3,731,112.50 3,735,362.50 3,733,425.00 3,732,112.50 3,730,362.50 3,732,362.50 3,732,612.50 3,735,862.50 3,731,612.50 3,729,862.50 3,735,112.50 ----------------$59,720,012.50 Water & Sewer Revenue Obligations Series 2008 Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 Principal 2,455,000 3.500% 2,540,000 3.500% 2,630,000 3.750% 2,730,000 4.000% 2,840,000 4.000% 2,950,000 4.000% 3,070,000 4.000% 3,190,000 4.125% 3,325,000 4.250% 3,465,000 5.000% 3,640,000 4.500% 3,805,000 4.500% 3,975,000 4.750% 4,160,000 5.000% 4,370,000 5.000% 4,590,000 5.000% 4,820,000 5.000% ----------------$58,555,000 JNA Consulting Group, LLC Rate Interest Total Payment 1,302,018.75 1,302,018.75 1,259,056.25 1,259,056.25 1,214,606.25 1,214,606.25 1,165,293.75 1,165,293.75 1,110,693.75 1,110,693.75 1,053,893.75 1,053,893.75 994,893.75 994,893.75 933,493.75 933,493.75 867,700.00 867,700.00 797,043.75 797,043.75 710,418.75 710,418.75 628,518.75 628,518.75 542,906.25 542,906.25 448,500.00 448,500.00 344,500.00 344,500.00 235,250.00 235,250.00 120,500.00 120,500.00 1,302,018.75 3,757,018.75 1,259,056.25 3,799,056.25 1,214,606.25 3,844,606.25 1,165,293.75 3,895,293.75 1,110,693.75 3,950,693.75 1,053,893.75 4,003,893.75 994,893.75 4,064,893.75 933,493.75 4,123,493.75 867,700.00 4,192,700.00 797,043.75 4,262,043.75 710,418.75 4,350,418.75 628,518.75 4,433,518.75 542,906.25 4,517,906.25 448,500.00 4,608,500.00 344,500.00 4,714,500.00 235,250.00 4,825,250.00 120,500.00 4,940,500.00 ----------------$27,458,575.00 ----------------$86,013,575.00 C-22 Annual Payment 5,059,037.50 5,058,112.50 5,059,212.50 5,060,587.50 5,061,387.50 5,057,787.50 5,059,787.50 5,056,987.50 5,060,400.00 5,059,087.50 5,060,837.50 5,062,037.50 5,060,812.50 5,057,000.00 5,059,000.00 5,060,500.00 5,061,000.00 ----------------$86,013,575.00 Water & Sewer Revenue Obligations Series 2010 Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 JNA Consulting Group, LLC Principal Rate 6,035,000 6.200% 6,285,000 6.350% 6,545,000 6.400% 6,820,000 6.550% ----------------$25,685,000 Interest 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 632,343.75 632,343.75 432,795.00 432,795.00 223,355.00 223,355.00 ----------------$28,798,707.50 C-23 Total Payment 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 819,428.75 6,854,428.75 632,343.75 6,917,343.75 432,795.00 6,977,795.00 223,355.00 7,043,355.00 ----------------$54,483,707.50 Annual Payment 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 1,638,857.50 7,673,857.50 7,549,687.50 7,410,590.00 7,266,710.00 ----------------$54,483,707.50 Total Street & Highway User Revenue Bonds Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 JNA Consulting Group, LLC Principal 4,040,000 4,195,000 4,355,000 1,805,000 1,895,000 ---------------------$16,290,000 Interest 328,168.75 328,168.75 251,934.38 251,934.38 165,437.50 165,437.50 74,000.00 74,000.00 37,900.00 37,900.00 ---------------------$1,714,881.25 C-24 Total Payment 328,168.75 4,368,168.75 251,934.38 4,446,934.38 165,437.50 4,520,437.50 74,000.00 1,879,000.00 37,900.00 1,932,900.00 ---------------------$18,004,881.25 Annual Payment 4,696,337.50 4,698,868.75 4,685,875.00 1,953,000.00 1,970,800.00 ---------------------$18,004,881.25 Street & Highway User Revenue and Refunding Bonds Series 2004 Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 Principal 2,435,000 3.625% 2,525,000 3.875% 2,620,000 4.000% ---------------------$7,580,000 JNA Consulting Group, LLC Rate Interest Total Payment 145,456.25 145,456.25 101,321.88 101,321.88 52,400.00 52,400.00 145,456.25 2,580,456.25 101,321.88 2,626,321.88 52,400.00 2,672,400.00 ---------------------$598,356.25 ---------------------$8,178,356.25 C-25 Annual Payment 2,725,912.50 2,727,643.75 2,724,800.00 ---------------------$8,178,356.25 Street & Highway User Revenue Bonds Series 2006 Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 JNA Consulting Group, LLC Principal Rate 1,605,000 4.000% 1,670,000 4.500% 1,735,000 4.500% 1,805,000 4.000% 1,895,000 4.000% ---------------------$8,710,000 Interest 182,712.50 182,712.50 150,612.50 150,612.50 113,037.50 113,037.50 74,000.00 74,000.00 37,900.00 37,900.00 ---------------------$1,116,525.00 C-26 Total Payment 182,712.50 1,787,712.50 150,612.50 1,820,612.50 113,037.50 1,848,037.50 74,000.00 1,879,000.00 37,900.00 1,932,900.00 ---------------------$9,826,525.00 Annual Payment 1,970,425.00 1,971,225.00 1,961,075.00 1,953,000.00 1,970,800.00 ---------------------$9,826,525.00 Total Transportation Excise Tax Revenue Obligations Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 JNA Consulting Group, LLC Principal 2,890,000 3,005,000 3,125,000 3,250,000 3,380,000 3,550,000 3,730,000 3,915,000 4,070,000 4,235,000 4,405,000 4,585,000 4,815,000 5,055,000 5,310,000 5,575,000 5,855,000 6,145,000 6,420,000 6,710,000 7,010,000 ---------------------$97,035,000 Interest 2,218,440.63 2,218,440.63 2,160,640.63 2,160,640.63 2,100,540.63 2,100,540.63 2,038,040.63 2,038,040.63 1,973,040.63 1,973,040.63 1,888,540.63 1,888,540.63 1,799,790.63 1,799,790.63 1,706,540.63 1,706,540.63 1,628,240.63 1,628,240.63 1,546,840.63 1,546,840.63 1,462,140.63 1,462,140.63 1,371,287.50 1,371,287.50 1,256,662.50 1,256,662.50 1,136,287.50 1,136,287.50 1,009,912.50 1,009,912.50 877,162.50 877,162.50 737,787.50 737,787.50 591,412.50 591,412.50 453,150.00 453,150.00 308,700.00 308,700.00 157,725.00 157,725.00 ---------------------$56,845,768.75 C-27 Total Payment 2,218,440.63 5,108,440.63 2,160,640.63 5,165,640.63 2,100,540.63 5,225,540.63 2,038,040.63 5,288,040.63 1,973,040.63 5,353,040.63 1,888,540.63 5,438,540.63 1,799,790.63 5,529,790.63 1,706,540.63 5,621,540.63 1,628,240.63 5,698,240.63 1,546,840.63 5,781,840.63 1,462,140.63 5,867,140.63 1,371,287.50 5,956,287.50 1,256,662.50 6,071,662.50 1,136,287.50 6,191,287.50 1,009,912.50 6,319,912.50 877,162.50 6,452,162.50 737,787.50 6,592,787.50 591,412.50 6,736,412.50 453,150.00 6,873,150.00 308,700.00 7,018,700.00 157,725.00 7,167,725.00 ---------------------$153,880,768.75 Annual Payment 7,326,881.25 7,326,281.25 7,326,081.25 7,326,081.25 7,326,081.25 7,327,081.25 7,329,581.25 7,328,081.25 7,326,481.25 7,328,681.25 7,329,281.25 7,327,575.00 7,328,325.00 7,327,575.00 7,329,825.00 7,329,325.00 7,330,575.00 7,327,825.00 7,326,300.00 7,327,400.00 7,325,450.00 ---------------------$153,880,768.75 Transportation Excise Tax Revenue Obligations Series 2007 Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 JNA Consulting Group, LLC Principal Rate 2,890,000 4.000% 3,005,000 4.000% 3,125,000 4.000% 3,250,000 4.000% 3,380,000 5.000% 3,550,000 5.000% 3,730,000 5.000% 3,915,000 4.000% 4,070,000 4.000% 4,235,000 4.000% 4,405,000 4.125% 4,585,000 5.000% 4,815,000 5.000% 5,055,000 5.000% 5,310,000 5.000% 5,575,000 5.000% 5,855,000 5.000% 6,145,000 4.500% 6,420,000 4.500% 6,710,000 4.500% 7,010,000 4.500% ---------------------$97,035,000 Interest 2,218,440.63 2,218,440.63 2,160,640.63 2,160,640.63 2,100,540.63 2,100,540.63 2,038,040.63 2,038,040.63 1,973,040.63 1,973,040.63 1,888,540.63 1,888,540.63 1,799,790.63 1,799,790.63 1,706,540.63 1,706,540.63 1,628,240.63 1,628,240.63 1,546,840.63 1,546,840.63 1,462,140.63 1,462,140.63 1,371,287.50 1,371,287.50 1,256,662.50 1,256,662.50 1,136,287.50 1,136,287.50 1,009,912.50 1,009,912.50 877,162.50 877,162.50 737,787.50 737,787.50 591,412.50 591,412.50 453,150.00 453,150.00 308,700.00 308,700.00 157,725.00 157,725.00 ---------------------$56,845,768.75 C-28 Total Payment 2,218,440.63 5,108,440.63 2,160,640.63 5,165,640.63 2,100,540.63 5,225,540.63 2,038,040.63 5,288,040.63 1,973,040.63 5,353,040.63 1,888,540.63 5,438,540.63 1,799,790.63 5,529,790.63 1,706,540.63 5,621,540.63 1,628,240.63 5,698,240.63 1,546,840.63 5,781,840.63 1,462,140.63 5,867,140.63 1,371,287.50 5,956,287.50 1,256,662.50 6,071,662.50 1,136,287.50 6,191,287.50 1,009,912.50 6,319,912.50 877,162.50 6,452,162.50 737,787.50 6,592,787.50 591,412.50 6,736,412.50 453,150.00 6,873,150.00 308,700.00 7,018,700.00 157,725.00 7,167,725.00 ---------------------$153,880,768.75 Annual Payment 7,326,881.25 7,326,281.25 7,326,081.25 7,326,081.25 7,326,081.25 7,327,081.25 7,329,581.25 7,328,081.25 7,326,481.25 7,328,681.25 7,329,281.25 7,327,575.00 7,328,325.00 7,327,575.00 7,329,825.00 7,329,325.00 7,330,575.00 7,327,825.00 7,326,300.00 7,327,400.00 7,325,450.00 ---------------------$153,880,768.75 Total Leases Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 JNA Consulting Group, LLC Principal 107,555.45 199,282.94 275,891.60 283,034.23 365,388.97 374,956.09 622,017.47 638,568.32 1,433,327.66 1,471,795.59 1,485,500.00 1,525,700.00 1,566,800.00 1,609,100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$11,958,918.32 Interest Total Payment 319,175.88 426,731.33 317,148.46 516,431.40 312,660.92 588,552.52 305,489.69 588,523.92 298,130.85 663,519.82 288,553.77 663,509.86 278,723.81 900,741.28 262,124.27 900,692.59 245,081.52 1,678,409.18 206,584.02 1,678,379.61 167,051.70 1,652,551.70 126,943.20 1,652,643.20 85,749.30 1,652,549.30 43,445.70 1,652,545.70 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ------------------------------------------$3,256,863.08 $15,215,781.40 C-29 Annual Payment 943,162.72 1,177,076.44 1,327,029.68 1,801,433.87 3,356,788.80 3,305,194.90 3,305,095.00 0.00 0.00 0.00 0.00 ---------------------$15,215,781.40 Comerica Equipment Lease 2007 Date 03/30/2011 09/30/2011 03/30/2012 09/30/2012 03/30/2013 09/30/2013 03/30/2014 09/30/2014 03/30/2015 09/30/2015 03/30/2016 JNA Consulting Group, LLC Principal Rate 3.770% Interest Total Payment 107,555.45 109,582.94 34,091.60 34,734.23 35,388.97 36,056.09 23,917.47 24,368.32 24,827.66 25,295.59 8,592.18 6,564.76 4,499.12 3,856.49 3,201.75 2,534.67 1,855.01 1,404.17 944.82 476.82 116,147.63 116,147.70 38,590.72 38,590.72 38,590.72 38,590.76 25,772.48 25,772.49 25,772.48 25,772.41 ---------------------$455,818 ---------------------$33,929.78 ---------------------$489,748.10 C-30 Annual Payment 232,295.32 77,181.44 77,181.48 51,544.97 51,544.90 ---------------------$489,748.10 Bank of America Refinancing Lease 2011 Date 06/01/2011 09/01/2011 03/01/2012 09/01/2012 03/01/2013 09/01/2013 03/01/2014 09/01/2014 03/01/2015 09/01/2015 03/01/2016 09/01/2016 03/01/2017 09/01/2017 03/01/2018 Principal 89,700.00 241,800.00 248,300.00 330,000.00 338,900.00 598,100.00 614,200.00 1,408,500.00 1,446,500.00 1,485,500.00 1,525,700.00 1,566,800.00 1,609,100.00 ---------------------$11,503,100 JNA Consulting Group, LLC Rate 5.400% Interest 310,583.70 310,583.70 308,161.80 301,633.20 294,929.10 286,019.10 276,868.80 260,720.10 244,136.70 206,107.20 167,051.70 126,943.20 85,749.30 43,445.70 Total Payment 310,583.70 400,283.70 549,961.80 549,933.20 624,929.10 624,919.10 874,968.80 874,920.10 1,652,636.70 1,652,607.20 1,652,551.70 1,652,643.20 1,652,549.30 1,652,545.70 Annual Payment 710,867.40 1,099,895.00 1,249,848.20 1,749,888.90 3,305,243.90 3,305,194.90 3,305,095.00 ---------------------------------------------------------------$3,222,933.30 $14,726,033.30 $14,726,033.30 C-31 Total Notes Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 JNA Consulting Group, LLC Principal 0.00 708,078.00 0.00 708,078.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$1,416,156 Interest 0.00 70,808.00 0.00 35,404.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$106,212.00 C-32 Total Payment 0.00 778,886.00 0.00 743,482.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$1,522,368.00 Annual Payment 778,886.00 743,482.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$1,522,368.00 99th & Northern Ave Note JNA Consulting Group, LLC Annual Payment Principal 04/01/2012 708,078.00 70,808.00 778,886.00 778,886.00 04/01/2013 708,078.00 35,404.00 743,482.00 743,482.00 04/01/2014 0.00 0.00 04/01/2015 0.00 0.00 04/01/2016 0.00 0.00 04/01/2017 0.00 0.00 04/01/2018 0.00 0.00 04/01/2019 0.00 0.00 04/01/2020 0.00 0.00 04/01/2021 0.00 0.00 04/01/2022 0.00 0.00 ---------------------$1,416,156.00 Interest Total Payment Date 04/01/2011 ---------------------$106,212.00 C-33 ---------------------- ---------------------$1,522,368.00 $1,522,368.00 Total Unrestricted Excise Tax Bonds Fiscal Year 2011 JNA Consulting Group, LLC Principal 2012 6,990,000 2013 7,335,000 2014 10,620,000 2015 11,210,000 2016 11,905,000 2017 12,630,000 2018 13,275,000 2019 13,970,000 2020 14,710,000 2021 15,485,000 2022 16,270,000 2023 17,095,000 2024 18,005,000 2025 18,980,000 2026 20,055,000 2027 21,185,000 2028 22,445,000 2029 24,690,000 2030 25,285,000 2031 26,790,000 2032 28,385,000 2033 29,970,000 2034 12,850,000 2035 17,080,000 2036 18,145,000 2037 19,280,000 2038 20,480,000 ---------------------$475,120,000 Interest Total Payment 13,668,666.98 13,668,666.98 13,516,193.48 13,516,193.48 13,351,177.80 13,351,177.80 13,053,685.15 13,053,685.15 12,708,373.30 12,708,373.30 12,347,700.55 12,347,700.55 12,022,501.70 12,022,501.70 11,676,268.70 11,676,268.70 11,306,070.03 11,306,070.03 10,919,525.85 10,919,525.85 10,526,981.45 10,526,981.45 10,113,048.58 10,113,048.58 9,657,388.90 9,657,388.90 9,169,896.18 9,169,896.18 8,634,379.73 8,634,379.73 8,068,912.95 8,068,912.95 7,438,821.75 7,438,821.75 6,769,882.28 6,769,882.28 6,030,793.18 6,030,793.18 5,277,733.60 5,277,733.60 4,481,251.95 4,481,251.95 3,627,362.40 3,627,362.40 2,744,843.75 2,744,843.75 2,343,281.25 2,343,281.25 1,809,531.25 1,809,531.25 1,242,500.00 1,242,500.00 640,000.00 640,000.00 ---------------------$446,293,545.40 13,668,666.98 20,658,666.98 13,516,193.48 20,851,193.48 13,351,177.80 23,971,177.80 13,053,685.15 24,263,685.15 12,708,373.30 24,613,373.30 12,347,700.55 24,977,700.55 12,022,501.70 25,297,501.70 11,676,268.70 25,646,268.70 11,306,070.03 26,016,070.03 10,919,525.85 26,404,525.85 10,526,981.45 26,796,981.45 10,113,048.58 27,208,048.58 9,657,388.90 27,662,388.90 9,169,896.18 28,149,896.18 8,634,379.73 28,689,379.73 8,068,912.95 29,253,912.95 7,438,821.75 29,883,821.75 6,769,882.28 31,459,882.28 6,030,793.18 31,315,793.18 5,277,733.60 32,067,733.60 4,481,251.95 32,866,251.95 3,627,362.40 33,597,362.40 2,744,843.75 15,594,843.75 2,343,281.25 19,423,281.25 1,809,531.25 19,954,531.25 1,242,500.00 20,522,500.00 640,000.00 21,120,000.00 ---------------------$921,413,545.40 C-34 Annual Payment 34,327,333.95 34,367,386.95 37,322,355.60 37,317,370.30 37,321,746.60 37,325,401.10 37,320,003.40 37,322,537.40 37,322,140.05 37,324,051.70 37,323,962.90 37,321,097.15 37,319,777.80 37,319,792.35 37,323,759.45 37,322,825.90 37,322,643.50 38,229,764.55 37,346,586.35 37,345,467.20 37,347,503.90 37,224,724.80 18,339,687.50 21,766,562.50 21,764,062.50 21,765,000.00 21,760,000.00 ---------------------$921,413,545.40 Total MPC Bonds Fiscal Year 2011 JNA Consulting Group, LLC Principal 2012 6,990,000 2013 7,335,000 2014 7,680,000 2015 6,235,000 2016 6,665,000 2017 9,360,000 2018 9,870,000 2019 10,420,000 2020 11,005,000 2021 11,630,000 2022 12,235,000 2023 12,880,000 2024 14,185,000 2025 14,985,000 2026 15,845,000 2027 14,095,000 2028 14,935,000 2029 15,865,000 2030 16,780,000 2031 17,750,000 2032 18,770,000 2033 19,855,000 2034 0 2035 0 2036 0 2037 0 2038 0 ---------------------$275,370,000 Interest Total Payment 7,163,335.73 7,163,335.73 7,010,862.23 7,010,862.23 6,845,846.55 6,845,846.55 6,658,603.90 6,658,603.90 6,499,854.55 6,499,854.55 6,335,681.80 6,335,681.80 6,108,107.95 6,108,107.95 5,861,243.70 5,861,243.70 5,595,232.53 5,595,232.53 5,314,000.85 5,314,000.85 5,035,843.95 5,035,843.95 4,741,648.58 4,741,648.58 4,412,438.90 4,412,438.90 4,039,546.18 4,039,546.18 3,638,629.73 3,638,629.73 3,215,012.95 3,215,012.95 2,824,978.00 2,824,978.00 2,411,538.53 2,411,538.53 1,981,324.43 1,981,324.43 1,525,939.85 1,525,939.85 1,045,858.20 1,045,858.20 528,493.65 528,493.65 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$197,588,045.40 7,163,335.73 14,153,335.73 7,010,862.23 14,345,862.23 6,845,846.55 14,525,846.55 6,658,603.90 12,893,603.90 6,499,854.55 13,164,854.55 6,335,681.80 15,695,681.80 6,108,107.95 15,978,107.95 5,861,243.70 16,281,243.70 5,595,232.53 16,600,232.53 5,314,000.85 16,944,000.85 5,035,843.95 17,270,843.95 4,741,648.58 17,621,648.58 4,412,438.90 18,597,438.90 4,039,546.18 19,024,546.18 3,638,629.73 19,483,629.73 3,215,012.95 17,310,012.95 2,824,978.00 17,759,978.00 2,411,538.53 18,276,538.53 1,981,324.43 18,761,324.43 1,525,939.85 19,275,939.85 1,045,858.20 19,815,858.20 528,493.65 20,383,493.65 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$472,958,045.40 C-35 Annual Payment 21,316,671.45 21,356,724.45 21,371,693.10 19,552,207.80 19,664,709.10 22,031,363.60 22,086,215.90 22,142,487.40 22,195,465.05 22,258,001.70 22,306,687.90 22,363,297.15 23,009,877.80 23,064,092.35 23,122,259.45 20,525,025.90 20,584,956.00 20,688,077.05 20,742,648.85 20,801,879.70 20,861,716.40 20,911,987.30 0.00 0.00 0.00 0.00 0.00 ---------------------$472,958,045.40 Total Senior Lien MPC Bonds Fiscal Year 2011 JNA Consulting Group, LLC Principal 2012 6,990,000 2013 7,335,000 2014 7,680,000 2015 6,235,000 2016 6,665,000 2017 9,360,000 2018 9,870,000 2019 10,420,000 2020 11,005,000 2021 11,630,000 2022 12,235,000 2023 12,880,000 2024 14,185,000 2025 14,985,000 2026 15,845,000 2027 14,095,000 2028 14,935,000 2029 14,955,000 2030 15,820,000 2031 16,740,000 2032 17,710,000 2033 11,490,000 2034 0 2035 0 2036 0 2037 0 2038 0 ---------------------$263,065,000 Interest Total Payment 6,863,079.48 6,863,079.48 6,710,605.98 6,710,605.98 6,545,590.30 6,545,590.30 6,358,347.65 6,358,347.65 6,199,598.30 6,199,598.30 6,035,425.55 6,035,425.55 5,807,851.70 5,807,851.70 5,560,987.45 5,560,987.45 5,294,976.28 5,294,976.28 5,013,744.60 5,013,744.60 4,735,587.70 4,735,587.70 4,441,392.33 4,441,392.33 4,112,182.65 4,112,182.65 3,739,289.93 3,739,289.93 3,338,373.48 3,338,373.48 2,914,756.70 2,914,756.70 2,524,721.75 2,524,721.75 2,111,282.28 2,111,282.28 1,705,524.43 1,705,524.43 1,275,939.85 1,275,939.85 821,108.20 821,108.20 330,243.65 330,243.65 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$184,881,220.40 6,863,079.48 13,853,079.48 6,710,605.98 14,045,605.98 6,545,590.30 14,225,590.30 6,358,347.65 12,593,347.65 6,199,598.30 12,864,598.30 6,035,425.55 15,395,425.55 5,807,851.70 15,677,851.70 5,560,987.45 15,980,987.45 5,294,976.28 16,299,976.28 5,013,744.60 16,643,744.60 4,735,587.70 16,970,587.70 4,441,392.33 17,321,392.33 4,112,182.65 18,297,182.65 3,739,289.93 18,724,289.93 3,338,373.48 19,183,373.48 2,914,756.70 17,009,756.70 2,524,721.75 17,459,721.75 2,111,282.28 17,066,282.28 1,705,524.43 17,525,524.43 1,275,939.85 18,015,939.85 821,108.20 18,531,108.20 330,243.65 11,820,243.65 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$447,946,220.40 C-36 Annual Payment 20,716,158.95 20,756,211.95 20,771,180.60 18,951,695.30 19,064,196.60 21,430,851.10 21,485,703.40 21,541,974.90 21,594,952.55 21,657,489.20 21,706,175.40 21,762,784.65 22,409,365.30 22,463,579.85 22,521,746.95 19,924,513.40 19,984,443.50 19,177,564.55 19,231,048.85 19,291,879.70 19,352,216.40 12,150,487.30 0.00 0.00 0.00 0.00 0.00 ---------------------$447,946,220.40 Senior Lien Excise Tax Revenue Bonds Series 2003A Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 01/01/2033 07/01/2033 01/01/2034 07/01/2034 01/01/2035 07/01/2035 01/01/2036 07/01/2036 01/01/2037 07/01/2037 01/01/2038 07/01/2038 Principal 1,390,000 3.125% 1,375,000 3.125% 1,395,000 4.000% 1,410,000 5.000% 1,475,000 5.000% 2,160,000 5.000% 2,255,000 5.000% 2,340,000 5.000% 2,420,000 5.000% 2,530,000 4.000% 2,625,000 4.000% 1,390,000 4.125% 1,430,000 4.125% 1,455,000 5.000% 1,520,000 5.000% 1,595,000 5.000% 1,660,000 5.000% 2,505,000 5.000% 2,590,000 5.000% 2,715,000 5.000% 2,845,000 5.000% 3,320,000 5.000% ---------------------$44,400,000 JNA Consulting Group, LLC Rate Interest 1,038,990.63 1,038,990.63 1,017,271.88 1,017,271.88 995,787.50 995,787.50 967,887.50 967,887.50 932,637.50 932,637.50 895,762.50 895,762.50 841,762.50 841,762.50 785,387.50 785,387.50 726,887.50 726,887.50 666,387.50 666,387.50 615,787.50 615,787.50 563,287.50 563,287.50 534,618.75 534,618.75 505,125.00 505,125.00 468,750.00 468,750.00 430,750.00 430,750.00 390,875.00 390,875.00 349,375.00 349,375.00 286,750.00 286,750.00 222,000.00 222,000.00 154,125.00 154,125.00 83,000.00 83,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$26,946,412.50 C-37 Total Payment 1,038,990.63 2,428,990.63 1,017,271.88 2,392,271.88 995,787.50 2,390,787.50 967,887.50 2,377,887.50 932,637.50 2,407,637.50 895,762.50 3,055,762.50 841,762.50 3,096,762.50 785,387.50 3,125,387.50 726,887.50 3,146,887.50 666,387.50 3,196,387.50 615,787.50 3,240,787.50 563,287.50 1,953,287.50 534,618.75 1,964,618.75 505,125.00 1,960,125.00 468,750.00 1,988,750.00 430,750.00 2,025,750.00 390,875.00 2,050,875.00 349,375.00 2,854,375.00 286,750.00 2,876,750.00 222,000.00 2,937,000.00 154,125.00 2,999,125.00 83,000.00 3,403,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$71,346,412.50 Annual Payment 3,467,981.25 3,409,543.75 3,386,575.00 3,345,775.00 3,340,275.00 3,951,525.00 3,938,525.00 3,910,775.00 3,873,775.00 3,862,775.00 3,856,575.00 2,516,575.00 2,499,237.50 2,465,250.00 2,457,500.00 2,456,500.00 2,441,750.00 3,203,750.00 3,163,500.00 3,159,000.00 3,153,250.00 3,486,000.00 0.00 0.00 0.00 0.00 0.00 ---------------------$71,346,412.50 Senior Lien Excise Tax Revenue Bonds Series 2003B Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 01/01/2033 07/01/2033 01/01/2034 07/01/2034 01/01/2035 07/01/2035 01/01/2036 07/01/2036 01/01/2037 07/01/2037 01/01/2038 07/01/2038 Principal Rate 390,000 4.100% 480,000 4.230% 575,000 5.280% 700,000 5.280% 800,000 5.280% 2,600,000 5.280% 2,805,000 5.280% 3,035,000 5.280% 3,290,000 5.280% 3,530,000 5.280% 3,775,000 5.280% 5,370,000 5.280% 6,315,000 5.580% 6,760,000 5.580% 7,200,000 5.580% 7,660,000 5.580% 8,160,000 5.580% 7,050,000 5.580% 7,535,000 5.580% 8,020,000 5.580% 8,535,000 5.580% 1,480,000 5.580% ---------------------$96,065,000 Interest 2,634,367.50 2,634,367.50 2,626,372.50 2,626,372.50 2,616,220.50 2,616,220.50 2,601,040.50 2,601,040.50 2,582,560.50 2,582,560.50 2,561,440.50 2,561,440.50 2,492,800.50 2,492,800.50 2,418,748.50 2,418,748.50 2,338,624.50 2,338,624.50 2,251,768.50 2,251,768.50 2,158,576.50 2,158,576.50 2,058,916.50 2,058,916.50 1,917,148.50 1,917,148.50 1,740,960.00 1,740,960.00 1,552,356.00 1,552,356.00 1,351,476.00 1,351,476.00 1,137,762.00 1,137,762.00 910,098.00 910,098.00 713,403.00 713,403.00 503,176.50 503,176.50 279,418.50 279,418.50 41,292.00 41,292.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$78,977,055.00 Total Payment 2,634,367.50 3,024,367.50 2,626,372.50 3,106,372.50 2,616,220.50 3,191,220.50 2,601,040.50 3,301,040.50 2,582,560.50 3,382,560.50 2,561,440.50 5,161,440.50 2,492,800.50 5,297,800.50 2,418,748.50 5,453,748.50 2,338,624.50 5,628,624.50 2,251,768.50 5,781,768.50 2,158,576.50 5,933,576.50 2,058,916.50 7,428,916.50 1,917,148.50 8,232,148.50 1,740,960.00 8,500,960.00 1,552,356.00 8,752,356.00 1,351,476.00 9,011,476.00 1,137,762.00 9,297,762.00 910,098.00 7,960,098.00 713,403.00 8,248,403.00 503,176.50 8,523,176.50 279,418.50 8,814,418.50 41,292.00 1,521,292.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$175,042,055.00 Reflects $7,250,000 refinancing of 2033 maturity on July 1, 2003. JNA Consulting Group, LLC C-38 Annual Payment 5,658,735.00 5,732,745.00 5,807,441.00 5,902,081.00 5,965,121.00 7,722,881.00 7,790,601.00 7,872,497.00 7,967,249.00 8,033,537.00 8,092,153.00 9,487,833.00 10,149,297.00 10,241,920.00 10,304,712.00 10,362,952.00 10,435,524.00 8,870,196.00 8,961,806.00 9,026,353.00 9,093,837.00 1,562,584.00 0.00 0.00 0.00 0.00 0.00 ---------------------$175,042,055.00 Senior Lien Excise Tax Revenue Bonds Series 2004A Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 01/01/2033 07/01/2033 01/01/2034 07/01/2034 01/01/2035 07/01/2035 01/01/2036 07/01/2036 01/01/2037 07/01/2037 01/01/2038 07/01/2038 Principal 1,665,000 5.000% 1,765,000 5.000% 1,865,000 5.000% ---------------------$5,295,000 JNA Consulting Group, LLC Rate Interest 132,375.00 132,375.00 90,750.00 90,750.00 46,625.00 46,625.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$539,500.00 C-39 Total Payment 132,375.00 1,797,375.00 90,750.00 1,855,750.00 46,625.00 1,911,625.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$5,834,500.00 Annual Payment 1,929,750.00 1,946,500.00 1,958,250.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$5,834,500.00 Senior Lien Excise Tax Revenue Bonds Series 2006A Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 01/01/2033 07/01/2033 01/01/2034 07/01/2034 01/01/2035 07/01/2035 01/01/2036 07/01/2036 01/01/2037 07/01/2037 01/01/2038 07/01/2038 Principal 1,345,000 4.250% 1,405,000 4.500% 1,465,000 5.000% 1,540,000 5.000% 1,615,000 5.000% 1,700,000 4.250% 1,770,000 5.000% 1,860,000 5.000% 1,950,000 5.000% 2,050,000 4.250% 2,135,000 4.250% 2,225,000 4.500% 2,330,000 4.500% 2,430,000 4.500% 2,540,000 4.375% ---------------------$28,360,000 JNA Consulting Group, LLC Rate Interest 652,975.00 652,975.00 624,393.75 624,393.75 592,781.25 592,781.25 556,156.25 556,156.25 517,656.25 517,656.25 477,281.25 477,281.25 441,156.25 441,156.25 396,906.25 396,906.25 350,406.25 350,406.25 301,656.25 301,656.25 258,093.75 258,093.75 212,725.00 212,725.00 162,662.50 162,662.50 110,237.50 110,237.50 55,562.50 55,562.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$11,421,300.00 C-40 Total Payment 652,975.00 1,997,975.00 624,393.75 2,029,393.75 592,781.25 2,057,781.25 556,156.25 2,096,156.25 517,656.25 2,132,656.25 477,281.25 2,177,281.25 441,156.25 2,211,156.25 396,906.25 2,256,906.25 350,406.25 2,300,406.25 301,656.25 2,351,656.25 258,093.75 2,393,093.75 212,725.00 2,437,725.00 162,662.50 2,492,662.50 110,237.50 2,540,237.50 55,562.50 2,595,562.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$39,781,300.00 Annual Payment 2,650,950.00 2,653,787.50 2,650,562.50 2,652,312.50 2,650,312.50 2,654,562.50 2,652,312.50 2,653,812.50 2,650,812.50 2,653,312.50 2,651,187.50 2,650,450.00 2,655,325.00 2,650,475.00 2,651,125.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$39,781,300.00 Senior Lien Excise Tax Revenue Bonds Series 2008A Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 01/01/2033 07/01/2033 01/01/2034 07/01/2034 01/01/2035 07/01/2035 01/01/2036 07/01/2036 01/01/2037 07/01/2037 01/01/2038 07/01/2038 Principal 240,000 4.000% 1,350,000 4.000% 1,405,000 4.000% 1,465,000 4.000% 1,530,000 4.000% 1,590,000 4.000% 1,655,000 4.125% 1,725,000 4.250% 1,790,000 5.000% 1,875,000 5.000% 1,970,000 5.000% 2,070,000 5.000% 2,170,000 5.000% 2,280,000 5.000% 2,390,000 4.500% 2,500,000 4.500% 2,615,000 4.500% 1,600,000 4.500% ---------------------$32,220,000 JNA Consulting Group, LLC Rate Interest 731,128.13 731,128.13 731,128.13 731,128.13 731,128.13 731,128.13 731,128.13 731,128.13 726,328.13 726,328.13 699,328.13 699,328.13 671,228.13 671,228.13 641,928.13 641,928.13 611,328.13 611,328.13 579,528.13 579,528.13 545,393.75 545,393.75 508,737.50 508,737.50 463,987.50 463,987.50 417,112.50 417,112.50 367,862.50 367,862.50 316,112.50 316,112.50 261,862.50 261,862.50 204,862.50 204,862.50 151,087.50 151,087.50 94,837.50 94,837.50 36,000.00 36,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$20,444,075.00 C-41 Total Payment 731,128.13 731,128.13 731,128.13 731,128.13 731,128.13 731,128.13 731,128.13 971,128.13 726,328.13 2,076,328.13 699,328.13 2,104,328.13 671,228.13 2,136,228.13 641,928.13 2,171,928.13 611,328.13 2,201,328.13 579,528.13 2,234,528.13 545,393.75 2,270,393.75 508,737.50 2,298,737.50 463,987.50 2,338,987.50 417,112.50 2,387,112.50 367,862.50 2,437,862.50 316,112.50 2,486,112.50 261,862.50 2,541,862.50 204,862.50 2,594,862.50 151,087.50 2,651,087.50 94,837.50 2,709,837.50 36,000.00 1,636,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$52,664,075.00 Annual Payment 1,462,256.25 1,462,256.25 1,462,256.25 1,702,256.25 2,802,656.25 2,803,656.25 2,807,456.25 2,813,856.25 2,812,656.25 2,814,056.25 2,815,787.50 2,807,475.00 2,802,975.00 2,804,225.00 2,805,725.00 2,802,225.00 2,803,725.00 2,799,725.00 2,802,175.00 2,804,675.00 1,672,000.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$52,664,075.00 Senior Lien Excise Tax Revenue Bonds Series 2008B Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 01/01/2033 07/01/2033 01/01/2034 07/01/2034 01/01/2035 07/01/2035 01/01/2036 07/01/2036 01/01/2037 07/01/2037 01/01/2038 07/01/2038 Principal 470,000 5.446% 740,000 5.446% 1,030,000 5.446% 1,345,000 5.446% 1,425,000 5.446% 1,495,000 5.446% 1,575,000 5.446% 1,655,000 6.077% 1,755,000 6.077% 1,865,000 6.077% 1,975,000 6.077% 2,105,000 6.077% 2,235,000 6.077% 2,370,000 6.077% 2,515,000 6.157% 2,670,000 6.157% 2,835,000 6.157% 3,010,000 6.157% 3,195,000 6.157% 3,390,000 6.157% 4,730,000 6.157% 6,690,000 6.157% ---------------------$51,075,000 JNA Consulting Group, LLC Rate Interest 1,538,035.48 1,538,035.48 1,525,237.38 1,525,237.38 1,505,087.18 1,505,087.18 1,477,040.28 1,477,040.28 1,440,415.93 1,440,415.93 1,401,613.18 1,401,613.18 1,360,904.33 1,360,904.33 1,318,017.08 1,318,017.08 1,267,729.90 1,267,729.90 1,214,404.23 1,214,404.23 1,157,736.20 1,157,736.20 1,097,725.83 1,097,725.83 1,033,765.40 1,033,765.40 965,854.93 965,854.93 893,842.48 893,842.48 816,418.20 816,418.20 734,222.25 734,222.25 646,946.78 646,946.78 554,283.93 554,283.93 455,925.85 455,925.85 351,564.70 351,564.70 205,951.65 205,951.65 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$45,925,446.20 C-42 Total Payment 1,538,035.48 2,008,035.48 1,525,237.38 2,265,237.38 1,505,087.18 2,535,087.18 1,477,040.28 2,822,040.28 1,440,415.93 2,865,415.93 1,401,613.18 2,896,613.18 1,360,904.33 2,935,904.33 1,318,017.08 2,973,017.08 1,267,729.90 3,022,729.90 1,214,404.23 3,079,404.23 1,157,736.20 3,132,736.20 1,097,725.83 3,202,725.83 1,033,765.40 3,268,765.40 965,854.93 3,335,854.93 893,842.48 3,408,842.48 816,418.20 3,486,418.20 734,222.25 3,569,222.25 646,946.78 3,656,946.78 554,283.93 3,749,283.93 455,925.85 3,845,925.85 351,564.70 5,081,564.70 205,951.65 6,895,951.65 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$97,000,446.20 Annual Payment 3,546,070.95 3,790,474.75 4,040,174.35 4,299,080.55 4,305,831.85 4,298,226.35 4,296,808.65 4,291,034.15 4,290,459.80 4,293,808.45 4,290,472.40 4,300,451.65 4,302,530.80 4,301,709.85 4,302,684.95 4,302,836.40 4,303,444.50 4,303,893.55 4,303,567.85 4,301,851.70 5,433,129.40 7,101,903.30 0.00 0.00 0.00 0.00 0.00 ---------------------$97,000,446.20 Senior Lien Excise Tax Revenue Bonds Series 2008C Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 01/01/2033 07/01/2033 01/01/2034 07/01/2034 01/01/2035 07/01/2035 01/01/2036 07/01/2036 01/01/2037 07/01/2037 01/01/2038 07/01/2038 Principal 1,730,000 4.596% 1,570,000 4.776% 1,350,000 4.869% 1,000,000 5.019% ---------------------$5,650,000 JNA Consulting Group, LLC Rate Interest 135,207.75 135,207.75 95,452.35 95,452.35 57,960.75 57,960.75 25,095.00 25,095.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$627,431.70 C-43 Total Payment 135,207.75 1,865,207.75 95,452.35 1,665,452.35 57,960.75 1,407,960.75 25,095.00 1,025,095.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$6,277,431.70 Annual Payment 2,000,415.50 1,760,904.70 1,465,921.50 1,050,190.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$6,277,431.70 Total Subordinate Lien MPC Bonds Fiscal Year 2011 JNA Consulting Group, LLC Principal Interest 2012 0 2013 0 2014 0 2015 0 2016 0 2017 0 2018 0 2019 0 2020 0 2021 0 2022 0 2023 0 2024 0 2025 0 2026 0 2027 0 2028 0 2029 910,000 2030 960,000 2031 1,010,000 2032 1,060,000 2033 8,365,000 2034 0 2035 0 2036 0 2037 0 2038 0 ---------------------$12,305,000 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 275,800.00 275,800.00 250,000.00 250,000.00 224,750.00 224,750.00 198,250.00 198,250.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$12,706,825.00 C-44 Total Payment 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 300,256.25 1,210,256.25 275,800.00 1,235,800.00 250,000.00 1,260,000.00 224,750.00 1,284,750.00 198,250.00 8,563,250.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$25,011,825.00 Annual Payment 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 600,512.50 1,510,512.50 1,511,600.00 1,510,000.00 1,509,500.00 8,761,500.00 0.00 0.00 0.00 0.00 0.00 ---------------------$25,011,825.00 Subordinate Lien Excise Tax Revenue Bonds Series 2002B Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 01/01/2033 07/01/2033 01/01/2034 07/01/2034 01/01/2035 07/01/2035 01/01/2036 07/01/2036 01/01/2037 07/01/2037 01/01/2038 07/01/2038 Principal $910,000 5.375% 960,000 5.375% 1,010,000 5.000% 1,060,000 5.000% 1,115,000 5.000% ---------------------$5,055,000 JNA Consulting Group, LLC Rate Interest 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 105,425.00 105,425.00 79,625.00 79,625.00 54,375.00 54,375.00 27,875.00 27,875.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$5,210,325.00 C-45 Total Payment 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 129,881.25 1,039,881.25 105,425.00 1,065,425.00 79,625.00 1,089,625.00 54,375.00 1,114,375.00 27,875.00 1,142,875.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$10,265,325.00 Annual Payment 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 259,762.50 1,169,762.50 1,170,850.00 1,169,250.00 1,168,750.00 1,170,750.00 0.00 0.00 0.00 0.00 0.00 ---------------------$10,265,325.00 Subordinate Lien Refunding Excise Tax Revenue Bonds Series 2003D Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 01/01/2033 07/01/2033 01/01/2034 07/01/2034 01/01/2035 07/01/2035 01/01/2036 07/01/2036 01/01/2037 07/01/2037 01/01/2038 07/01/2038 Principal $7,250,000 4.700% ---------------------$7,250,000 JNA Consulting Group, LLC Rate Interest 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$7,496,500.00 C-46 Total Payment 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 170,375.00 7,420,375.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ---------------------$14,746,500.00 Annual Payment 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 340,750.00 7,590,750.00 0.00 0.00 0.00 0.00 0.00 ---------------------$14,746,500.00 Total PFC Bonds Fiscal Year 2011 JNA Consulting Group, LLC Principal 2012 0 2013 0 2014 2,940,000 2015 4,975,000 2016 5,240,000 2017 3,270,000 2018 3,405,000 2019 3,550,000 2020 3,705,000 2021 3,855,000 2022 4,035,000 2023 4,215,000 2024 3,820,000 2025 3,995,000 2026 4,210,000 2027 7,090,000 2028 7,510,000 2029 8,825,000 2030 8,505,000 2031 9,040,000 2032 9,615,000 2033 10,115,000 2034 12,850,000 2035 17,080,000 2036 18,145,000 2037 19,280,000 2038 20,480,000 ---------------------$199,750,000 Interest Total Payment 6,505,331.25 6,505,331.25 6,505,331.25 6,505,331.25 6,505,331.25 6,505,331.25 6,395,081.25 6,395,081.25 6,208,518.75 6,208,518.75 6,012,018.75 6,012,018.75 5,914,393.75 5,914,393.75 5,815,025.00 5,815,025.00 5,710,837.50 5,710,837.50 5,605,525.00 5,605,525.00 5,491,137.50 5,491,137.50 5,371,400.00 5,371,400.00 5,244,950.00 5,244,950.00 5,130,350.00 5,130,350.00 4,995,750.00 4,995,750.00 4,853,900.00 4,853,900.00 4,613,843.75 4,613,843.75 4,358,343.75 4,358,343.75 4,049,468.75 4,049,468.75 3,751,793.75 3,751,793.75 3,435,393.75 3,435,393.75 3,098,868.75 3,098,868.75 2,744,843.75 2,744,843.75 2,343,281.25 2,343,281.25 1,809,531.25 1,809,531.25 1,242,500.00 1,242,500.00 640,000.00 640,000.00 ---------------------$248,705,500.00 6,505,331.25 6,505,331.25 6,505,331.25 6,505,331.25 6,505,331.25 9,445,331.25 6,395,081.25 11,370,081.25 6,208,518.75 11,448,518.75 6,012,018.75 9,282,018.75 5,914,393.75 9,319,393.75 5,815,025.00 9,365,025.00 5,710,837.50 9,415,837.50 5,605,525.00 9,460,525.00 5,491,137.50 9,526,137.50 5,371,400.00 9,586,400.00 5,244,950.00 9,064,950.00 5,130,350.00 9,125,350.00 4,995,750.00 9,205,750.00 4,853,900.00 11,943,900.00 4,613,843.75 12,123,843.75 4,358,343.75 13,183,343.75 4,049,468.75 12,554,468.75 3,751,793.75 12,791,793.75 3,435,393.75 13,050,393.75 3,098,868.75 13,213,868.75 2,744,843.75 15,594,843.75 2,343,281.25 19,423,281.25 1,809,531.25 19,954,531.25 1,242,500.00 20,522,500.00 640,000.00 21,120,000.00 ---------------------$448,455,500.00 C-47 Annual Payment 13,010,662.50 13,010,662.50 15,950,662.50 17,765,162.50 17,657,037.50 15,294,037.50 15,233,787.50 15,180,050.00 15,126,675.00 15,066,050.00 15,017,275.00 14,957,800.00 14,309,900.00 14,255,700.00 14,201,500.00 16,797,800.00 16,737,687.50 17,541,687.50 16,603,937.50 16,543,587.50 16,485,787.50 16,312,737.50 18,339,687.50 21,766,562.50 21,764,062.50 21,765,000.00 21,760,000.00 ---------------------$448,455,500.00 Third Lien Excise Tax Bonds Series 2008A Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 01/01/2033 07/01/2033 01/01/2034 07/01/2034 01/01/2035 07/01/2035 01/01/2036 07/01/2036 01/01/2037 07/01/2037 01/01/2038 07/01/2038 JNA Consulting Group, LLC Principal Rate 2,100,000 6.000% 2,515,000 6.000% 2,625,000 6.000% 2,740,000 5.750% 2,845,000 6.000% 2,985,000 6.000% 3,110,000 6.000% 2,820,000 6.000% 2,950,000 7.000% 3,110,000 7.000% 5,240,000 7.000% 5,550,000 7.000% 6,515,000 7.000% 6,280,000 7.000% 6,675,000 7.000% 7,100,000 7.000% 7,470,000 7.000% 9,490,000 6.250% 12,615,000 6.250% 13,400,000 6.250% 14,235,000 6.250% 15,125,000 6.250% ---------------------$137,495,000 Interest Total Payment 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,393,956.25 4,393,956.25 4,318,506.25 4,318,506.25 4,239,756.25 4,239,756.25 4,160,981.25 4,160,981.25 4,075,631.25 4,075,631.25 3,986,081.25 3,986,081.25 3,892,781.25 3,892,781.25 3,808,181.25 3,808,181.25 3,704,931.25 3,704,931.25 3,596,081.25 3,596,081.25 3,412,681.25 3,412,681.25 3,218,431.25 3,218,431.25 2,990,406.25 2,990,406.25 2,770,606.25 2,770,606.25 2,536,981.25 2,536,981.25 2,288,481.25 2,288,481.25 2,027,031.25 2,027,031.25 1,730,468.75 1,730,468.75 1,336,250.00 1,336,250.00 917,500.00 917,500.00 472,656.25 472,656.25 ---------------------$181,240,237.50 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 4,456,956.25 6,556,956.25 4,393,956.25 6,908,956.25 4,318,506.25 6,943,506.25 4,239,756.25 6,979,756.25 4,160,981.25 7,005,981.25 4,075,631.25 7,060,631.25 3,986,081.25 7,096,081.25 3,892,781.25 6,712,781.25 3,808,181.25 6,758,181.25 3,704,931.25 6,814,931.25 3,596,081.25 8,836,081.25 3,412,681.25 8,962,681.25 3,218,431.25 9,733,431.25 2,990,406.25 9,270,406.25 2,770,606.25 9,445,606.25 2,536,981.25 9,636,981.25 2,288,481.25 9,758,481.25 2,027,031.25 11,517,031.25 1,730,468.75 14,345,468.75 1,336,250.00 14,736,250.00 917,500.00 15,152,500.00 472,656.25 15,597,656.25 ---------------------$318,735,237.50 C-48 Annual Payment 8,913,912.50 8,913,912.50 8,913,912.50 8,913,912.50 8,913,912.50 11,013,912.50 11,302,912.50 11,262,012.50 11,219,512.50 11,166,962.50 11,136,262.50 11,082,162.50 10,605,562.50 10,566,362.50 10,519,862.50 12,432,162.50 12,375,362.50 12,951,862.50 12,260,812.50 12,216,212.50 12,173,962.50 12,046,962.50 13,544,062.50 16,075,937.50 16,072,500.00 16,070,000.00 16,070,312.50 $318,735,237.50 Third Lien Excise Tax Bonds Series 2008B Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 01/01/2018 07/01/2018 01/01/2019 07/01/2019 01/01/2020 07/01/2020 01/01/2021 07/01/2021 01/01/2022 07/01/2022 01/01/2023 07/01/2023 01/01/2024 07/01/2024 01/01/2025 07/01/2025 01/01/2026 07/01/2026 01/01/2027 07/01/2027 01/01/2028 07/01/2028 01/01/2029 07/01/2029 01/01/2030 07/01/2030 01/01/2031 07/01/2031 01/01/2032 07/01/2032 01/01/2033 07/01/2033 01/01/2034 07/01/2034 01/01/2035 07/01/2035 01/01/2036 07/01/2036 01/01/2037 07/01/2037 01/01/2038 07/01/2038 JNA Consulting Group, LLC Principal Rate 740,000 5.000% 890,000 5.375% 925,000 5.500% 965,000 5.500% 1,010,000 5.750% 1,050,000 5.750% 1,105,000 6.000% 1,000,000 6.000% 1,045,000 6.000% 1,100,000 6.000% 1,850,000 6.125% 1,960,000 6.250% 2,310,000 7.000% 2,225,000 7.000% 2,365,000 7.000% 2,515,000 7.000% 2,645,000 7.000% 3,360,000 6.250% 4,465,000 6.250% 4,745,000 6.250% 5,045,000 6.250% 5,355,000 6.250% ---------------------$48,670,000 Interest 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,520,437.50 1,520,437.50 1,496,518.75 1,496,518.75 1,471,081.25 1,471,081.25 1,444,543.75 1,444,543.75 1,415,506.25 1,415,506.25 1,385,318.75 1,385,318.75 1,352,168.75 1,352,168.75 1,322,168.75 1,322,168.75 1,290,818.75 1,290,818.75 1,257,818.75 1,257,818.75 1,201,162.50 1,201,162.50 1,139,912.50 1,139,912.50 1,059,062.50 1,059,062.50 981,187.50 981,187.50 898,412.50 898,412.50 810,387.50 810,387.50 717,812.50 717,812.50 612,812.50 612,812.50 473,281.25 473,281.25 325,000.00 325,000.00 167,343.75 167,343.75 ---------------------$63,152,762.50 C-49 Total Payment 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 1,538,937.50 2,278,937.50 1,520,437.50 2,410,437.50 1,496,518.75 2,421,518.75 1,471,081.25 2,436,081.25 1,444,543.75 2,454,543.75 1,415,506.25 2,465,506.25 1,385,318.75 2,490,318.75 1,352,168.75 2,352,168.75 1,322,168.75 2,367,168.75 1,290,818.75 2,390,818.75 1,257,818.75 3,107,818.75 1,201,162.50 3,161,162.50 1,139,912.50 3,449,912.50 1,059,062.50 3,284,062.50 981,187.50 3,346,187.50 898,412.50 3,413,412.50 810,387.50 3,455,387.50 717,812.50 4,077,812.50 612,812.50 5,077,812.50 473,281.25 5,218,281.25 325,000.00 5,370,000.00 167,343.75 5,522,343.75 ---------------------$111,822,762.50 Annual Payment 3,077,875.00 3,077,875.00 3,077,875.00 3,077,875.00 3,077,875.00 3,817,875.00 3,930,875.00 3,918,037.50 3,907,162.50 3,899,087.50 3,881,012.50 3,875,637.50 3,704,337.50 3,689,337.50 3,681,637.50 4,365,637.50 4,362,325.00 4,589,825.00 4,343,125.00 4,327,375.00 4,311,825.00 4,265,775.00 4,795,625.00 5,690,625.00 5,691,562.50 5,695,000.00 5,689,687.50 $111,822,762.50 Third Lien Excise Tax Bonds Series 2008C Date 07/01/2011 01/01/2012 07/01/2012 01/01/2013 07/01/2013 01/01/2014 07/01/2014 01/01/2015 07/01/2015 01/01/2016 07/01/2016 01/01/2017 07/01/2017 Principal 2,940,000 7.500% 4,975,000 7.500% 5,240,000 7.500% 430,000 7.500% ---------------------$13,585,000 JNA Consulting Group, LLC Rate Interest Total Payment 509,437.50 509,437.50 509,437.50 509,437.50 509,437.50 509,437.50 399,187.50 399,187.50 212,625.00 212,625.00 16,125.00 16,125.00 509,437.50 509,437.50 509,437.50 509,437.50 509,437.50 3,449,437.50 399,187.50 5,374,187.50 212,625.00 5,452,625.00 16,125.00 446,125.00 ---------------------$4,312,500.00 ---------------------$17,897,500.00 C-50 Annual Payment 1,018,875.00 1,018,875.00 3,958,875.00 5,773,375.00 5,665,250.00 462,250.00 $17,897,500.00 Total Interfund Loans Fiscal Year 2011 Interest 2012 532,412.00 1,046,860.00 2013 540,871.00 1,032,884.50 2014 555,416.00 1,018,713.00 2015 319,000.00 1,005,292.00 2016 330,000.00 994,998.50 2017 740,000.00 984,344.00 2018 770,000.00 957,676.00 2019 796,000.00 929,890.50 2020 827,000.00 901,156.00 2021 853,000.00 871,276.50 2022 1,075,000.00 840,448.00 2023 1,120,000.00 798,308.00 2024 1,165,000.00 754,404.00 2025 1,210,000.00 708,736.00 2026 1,255,000.00 661,304.00 2027 1,305,000.00 612,108.00 2028 1,355,000.00 560,952.00 2029 1,410,000.00 507,836.00 2030 1,465,000.00 452,564.00 2031 1,525,000.00 395,136.00 2032 1,580,000.00 335,356.00 2033 1,645,000.00 273,420.00 2034 1,710,000.00 208,936.00 2035 1,775,000.00 141,904.00 2036 JNA Consulting Group, LLC Principal 1,845,000.00 72,324.00 ------------------------------------------$27,703,699.00 $17,066,827.00 C-51 Total Payment 0.00 1,579,272.00 0.00 1,573,755.50 0.00 1,574,129.00 0.00 1,324,292.00 0.00 1,324,998.50 0.00 1,724,344.00 0.00 1,727,676.00 0.00 1,725,890.50 0.00 1,728,156.00 0.00 1,724,276.50 0.00 1,915,448.00 0.00 1,918,308.00 0.00 1,919,404.00 0.00 1,918,736.00 0.00 1,916,304.00 0.00 1,917,108.00 0.00 1,915,952.00 0.00 1,917,836.00 0.00 1,917,564.00 0.00 1,920,136.00 0.00 1,915,356.00 0.00 1,918,420.00 0.00 1,918,936.00 0.00 1,916,904.00 0.00 1,917,324.00 ---------------------$44,770,526.00 Annual Payment 1,579,272.00 1,573,755.50 1,574,129.00 1,324,292.00 1,324,998.50 1,724,344.00 1,727,676.00 1,725,890.50 1,728,156.00 1,724,276.50 1,915,448.00 1,918,308.00 1,919,404.00 1,918,736.00 1,916,304.00 1,917,108.00 1,915,952.00 1,917,836.00 1,917,564.00 1,920,136.00 1,915,356.00 1,918,420.00 1,918,936.00 1,916,904.00 1,917,324.00 ---------------------$44,770,526.00 Sanitation Fund Loan Interest Annual Payment Principal 2012 237,412.00 12,465.00 249,877.00 249,877.00 2013 241,871.00 8,006.00 249,877.00 249,877.00 2014 246,416.00 3,461.00 249,877.00 249,877.00 2015 0.00 0.00 2016 0.00 0.00 2017 0.00 0.00 2018 0.00 0.00 2019 0.00 0.00 2020 0.00 0.00 2021 0.00 0.00 2022 0.00 0.00 2023 0.00 0.00 2024 0.00 0.00 2025 0.00 0.00 2026 0.00 0.00 2027 0.00 0.00 2028 0.00 0.00 2029 0.00 0.00 2030 0.00 0.00 2031 0.00 0.00 2032 0.00 0.00 2033 0.00 0.00 2034 0.00 0.00 2035 0.00 0.00 0.00 ---------------------$749,631.00 0.00 ---------------------$749,631.00 2036 ---------------------$725,699.00 JNA Consulting Group, LLC Total Payment Date 2011 ---------------------$23,932.00 C-52 Debt Service Fund Loan 2012 175,000.00 2.750% 54,395.00 229,395.00 229,395.00 2013 179,000.00 2.750% 49,582.50 228,582.50 228,582.50 2014 184,000.00 2.750% 44,660.00 228,660.00 228,660.00 2015 189,000.00 2.750% 39,600.00 228,600.00 228,600.00 2016 195,000.00 2.750% 34,402.50 229,402.50 229,402.50 2017 200,000.00 2.750% 29,040.00 229,040.00 229,040.00 2018 205,000.00 2.750% 23,540.00 228,540.00 228,540.00 2019 211,000.00 2.750% 17,902.50 228,902.50 228,902.50 2020 217,000.00 2.750% 12,100.00 229,100.00 229,100.00 2021 223,000.00 2.750% 6,132.50 229,132.50 229,132.50 2022 0.00 0.00 0.00 2023 0.00 0.00 0.00 2024 0.00 0.00 0.00 2025 0.00 0.00 0.00 2026 0.00 0.00 0.00 2027 0.00 0.00 0.00 2028 0.00 0.00 0.00 2029 0.00 0.00 0.00 2030 0.00 0.00 0.00 2031 0.00 0.00 0.00 2032 0.00 0.00 0.00 2033 0.00 0.00 0.00 2034 0.00 0.00 0.00 2035 0.00 0.00 0.00 ---------------------$1,978,000.00 JNA Consulting Group, LLC Interest Annual Payment Principal 2036 Rate Total Payment Date 2011 0.00 ---------------------$311,355.00 C-53 0.00 0.00 ---------------------- ---------------------$2,289,355.00 $2,289,355.00 General Fund Loan Date 2011 JNA Consulting Group, LLC Principal Rate Interest Total Payment Annual Payment 2012 120,000 3.920% 980,000.00 1,100,000.00 1,100,000.00 2013 120,000 3.920% 975,296.00 1,095,296.00 1,095,296.00 2014 125,000 3.920% 970,592.00 1,095,592.00 1,095,592.00 2015 130,000 3.920% 965,692.00 1,095,692.00 1,095,692.00 2016 135,000 3.920% 960,596.00 1,095,596.00 1,095,596.00 2017 540,000 3.920% 955,304.00 1,495,304.00 1,495,304.00 2018 565,000 3.920% 934,136.00 1,499,136.00 1,499,136.00 2019 585,000 3.920% 911,988.00 1,496,988.00 1,496,988.00 2020 610,000 3.920% 889,056.00 1,499,056.00 1,499,056.00 2021 630,000 3.920% 865,144.00 1,495,144.00 1,495,144.00 2022 1,075,000 3.920% 840,448.00 1,915,448.00 1,915,448.00 2023 1,120,000 3.920% 798,308.00 1,918,308.00 1,918,308.00 2024 1,165,000 3.920% 754,404.00 1,919,404.00 1,919,404.00 2025 1,210,000 3.920% 708,736.00 1,918,736.00 1,918,736.00 2026 1,255,000 3.920% 661,304.00 1,916,304.00 1,916,304.00 2027 1,305,000 3.920% 612,108.00 1,917,108.00 1,917,108.00 2028 1,355,000 3.920% 560,952.00 1,915,952.00 1,915,952.00 2029 1,410,000 3.920% 507,836.00 1,917,836.00 1,917,836.00 2030 1,465,000 3.920% 452,564.00 1,917,564.00 1,917,564.00 2031 1,525,000 3.920% 395,136.00 1,920,136.00 1,920,136.00 2032 1,580,000 3.920% 335,356.00 1,915,356.00 1,915,356.00 2033 1,645,000 3.920% 273,420.00 1,918,420.00 1,918,420.00 2034 1,710,000 3.920% 208,936.00 1,918,936.00 1,918,936.00 2035 1,775,000 3.920% 141,904.00 1,916,904.00 1,916,904.00 2036 1,845,000 3.920% ---------------------$25,000,000 72,324.00 1,917,324.00 1,917,324.00 ---------------------------------------------------------------$16,731,540.00 $41,731,540.00 $41,731,540.00 C-54