RBC Capital Markets Presentation to: Financing of Capital Projects - - PowerPoint PPT Presentation

STRICTLY PRIVATE AND CONFIDENTIAL

March 26, 2019

Michael C. Lillys Daniel C. O’Brien Lauren Stadel Managing Director Director Director 130 North 18th Street 130 North 18th Street 2101 Oregon Pike Philadelphia, PA 19103 Philadelphia, PA 19103 Lancaster, PA 17601 Phone: (215) 832-1501 Phone: (215) 832-1526 Phone: (717) 519-5925 Email: michael.lillys@rbccm.com Email: daniel.obrien@rbccm.com Email: lauren.stadel@rbccm.com

RBC Capital Markets Presentation to: Financing of Capital Projects

RBC Capital Markets 1

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50

Interest Rate History

10 Year AAA MMD (Municipal Market Data) Since January 4, 1999

10 Year MMD Current 10 Year MMD

Interest Rate History (1999 – YTD)

• MMD tax-exempt interest rates, which are published daily, are widely used benchmarks in municipal finance for

pricing bond issues

Current 10 year MMD = 1.90%

10 Year MMD Date Max: 5.37 05/18/2000 Min: 1.29 06/27/2016 Average: 3.15

• Current:

1.90 03/25/2019

RBC Capital Markets 2

Gross Debt Service (Prior to State Reimbursement)

1 2 3 4 5 6 7 8 QSCB - QSCB - G.O. Bonds G.O. Note G.O. Bonds G.O. Bonds Total Period Series of Series of Series of Series of Series of Series of Gross Debt Ending 2010 [1] 2011 [2] 2012 2014 2015 2018 Service 06/30/2019 593,833 45,988 167,900 40,729 3,323,775 88,742 4,260,967 06/30/2020 593,833 45,988 166,500 65,708 3,320,250 138,629 4,330,908 06/30/2021 593,833 45,988 165,100 68,156 3,334,700 138,543 4,346,320 06/30/2022 593,833 45,988 1,428,700 715,542 754,550 138,448 3,677,060 06/30/2023 593,833 45,988 1,426,800 724,189 766,550 138,344 3,695,704 06/30/2024 593,833 45,988 1,429,400 450,349 1,050,400 138,233 3,708,203 06/30/2025 593,833 45,988 2,512,447 3,152,268 06/30/2026 466,583 36,423 2,526,844 3,029,850 06/30/2027 75,984 75,984 06/30/2028 TOTALS 4,623,417 358,339 4,784,400 2,064,673 12,550,225 5,896,212 30,277,265

Outstanding Principal*: 2,714,667 214,857 4,355,000 1,874,000 11,365,000 5,000,000 25,523,524 Purpose: New Money New Money AdvRef 2004B AdvRef 2005 CurRef 2005 New Money Call Date: Make Whole Make Whole 02/15/2017 Anytime Non-Callable 10/15/2023 Reimb %: 0.00% 0.00% 0.00% 53.40% 53.40% 0.00% 17/18 MVAR%: 69.41% 69.41% 69.41% 69.41% 69.41% 69.41% Local Share: 100.00% 100.00% 100.00% 62.94% 62.94% 100.00% State Share: 0.00% 0.00% 0.00% 37.06% 37.06% 0.00% [1] - Assumes federal subsidy is 4.479% [2] - Assumes federal subsidy is 4.654% *Outstanding principal as of July 1, 2018.

Gross Debt Service

RBC Capital Markets 3

Net Debt Service (After State Reimbursement)

9 10 11 12 13 14 15 16 QSCB - QSCB - G.O. Bonds G.O. Note G.O. Bonds G.O. Bonds Total Period Series of Series of Series of Series of Series of Series of Net Debt Ending 2010 [1] 2011 [2] 2012 2014 2015 2018 Service 06/30/2019 365,833 28,488 167,900 25,633 2,091,820 88,742 2,768,416 06/30/2020 365,833 28,488 166,500 41,353 2,089,601 138,629 2,830,405 06/30/2021 365,833 28,488 165,100 42,894 2,098,695 138,543 2,839,554 06/30/2022 365,833 28,488 1,428,700 450,327 474,876 138,448 2,886,672 06/30/2023 365,833 28,488 1,426,800 455,769 482,429 138,344 2,897,663 06/30/2024 365,833 28,488 1,429,400 283,428 661,070 138,233 2,906,451 06/30/2025 365,833 28,488 2,512,447 2,906,768 06/30/2026 352,583 27,673 2,526,844 2,907,100 06/30/2027 75,984 75,984 06/30/2028 TOTALS 2,913,417 227,089 4,784,400 1,299,403 7,898,492 5,896,212 23,019,012

Outstanding Principal*: 2,714,667 214,857 4,355,000 1,874,000 11,365,000 5,000,000 25,523,524 Purpose: New Money New Money AdvRef 2004B AdvRef 2005 CurRef 2005 New Money Call Date: Make Whole Make Whole 02/15/2017 Anytime Non-Callable 10/15/2023 Reimb %: 0.00% 0.00% 0.00% 53.40% 53.40% 0.00% 17/18 MVAR%: 69.41% 69.41% 69.41% 69.41% 69.41% 69.41% Local Share: 100.00% 100.00% 100.00% 62.94% 62.94% 100.00% State Share: 0.00% 0.00% 0.00% 37.06% 37.06% 0.00% [1] - Assumes federal subsidy is 4.479% [2] - Assumes federal subsidy is 4.654% *Outstanding principal as of July 1, 2018.

Net Debt Service

RBC Capital Markets 4

Capital Projects to be Financed

• New Middle School, Aronimink and Capital Project Needs:
• Financing Plan Goal:

‒ Phase-in annual Budget/Millage Impact over as many years as possible in approximately equal amounts each year.

2019 Bond Issue Design and Documentation: New Middle School and Aronimink Roof Replacement (Highland Park) Window Replacement (BHMS) $ 6,500,000 2020 Bond Issue 1/3 Cost New Middle School 1/2 Cost Aronimink $5M Capital Projects $ 37,300,109 2021 Bond Issue 1/3 Cost New Middle School 1/2 Cost Aronimink $5M Capital Projects $ 37,300,109 2022 Bond Issue 1/3 Cost New Middle School $5M Capital Projects $ 25,737,525 Total: $ 106,837,743

RBC Capital Markets 5

Millage Requirement Study

1 2 3 4 5 6 7 8 9 10 11 12 13 14 Fiscal Series 2019 Series 2020 Series 2021 Series 2022 Annual Cumulative Year Total Net $6,670,000 $38,020,000 $40,030,000 $27,360,000 Total Net Budget Value of Total New Impact on Impact on Ending Outstanding Bond Issue Bond Issue Bond Issue Bond Issue Debt Impact 1 Mill D/S Mills Mills % Millage

• Avg. Taxpayer Avg. Taxpayer

June 30 D/S (1) Net D/S (2) Net D/S (3) Net D/S (4) Net D/S (5) Service $ (6) Required Needed Increase $75,000 $75,000 2019 2,740,029 $

• $
• $
• $
• $

2,740,029 $

• $

2,815,943 $ 0.973 0.000 0.00%

• $
• $

2020 2,801,837 538,218 3,340,054 600,026 2,815,943 1.186 0.213 0.57% 15.98 15.98 2021 2,810,843 202,861 1,051,174 4,064,878 724,823 2,815,943 1.444 0.257 0.69% 19.28 35.25 2022 2,874,268 202,723 1,400,672 310,443 4,788,106 723,228 2,815,943 1.700 0.257 0.68% 19.28 54.53 2023 2,885,085 202,585 1,400,535 1,018,748 5,000 5,511,952 723,846 2,815,943 1.957 0.257 0.68% 19.28 73.80 2024 2,893,789 202,444 1,400,396 918,611 816,814 6,232,053 720,101 2,815,943 2.213 0.256 0.67% 19.20 93.00 2025 2,906,768 202,301 1,400,256 1,525,472 916,676 6,951,472 719,419 2,815,943 2.469 0.255 0.66% 19.13 112.13 2026 2,907,100 202,155 1,400,112 1,525,332 1,016,538 7,051,235 99,763 2,815,943 2.504 0.036 0.09% 2.70 114.83 2027 75,984 1,642,006 1,574,966 1,995,188 1,551,397 6,839,541 (211,694) 2,815,943 2.429

• 0.075
• 0.19%

(5.63) 109.20 2028 1,713,367 1,579,620 1,991,318 1,555,899 6,840,204 663 2,815,943 2.429 0.000 0.00% 0.00 109.20 2029 1,715,319 1,578,882 1,991,914 1,554,547 6,840,662 458 2,815,943 2.429 0.000 0.00% 0.00 109.20 2030 1,714,282 1,577,876 1,991,814 1,557,470 6,841,441 780 2,815,943 2.430 0.000 0.00% 0.00 109.20 2031 3,296,536 1,990,952 1,554,501 6,841,988 547 2,815,943 2.430 0.000 0.00% 0.00 109.20 2032 3,293,589 1,994,151 1,550,713 6,838,452 (3,537) 2,815,943 2.428 0.000 0.00% 0.00 109.20 2033 3,291,694 1,996,166 1,550,900 6,838,760 308 2,815,943 2.429 0.000 0.00% 0.00 109.20 2034 3,296,174 1,991,957 1,549,809 6,837,939 (821) 2,815,943 2.428 0.000 0.00% 0.00 109.20 2035 3,291,799 1,991,833 1,557,398 6,841,030 3,091 2,815,943 2.429 0.000 0.00% 0.00 109.20 2036 3,294,096 1,990,658 1,553,490 6,838,244 (2,786) 2,815,943 2.428 0.000 0.00% 0.00 109.20 2037 3,292,424 1,993,533 1,553,465 6,839,421 1,178 2,815,943 2.429 0.000 0.00% 0.00 109.20 2038 3,291,702 1,995,198 1,552,269 6,839,168 (253) 2,815,943 2.429 0.000 0.00% 0.00 109.20 2039 3,296,666 1,990,628 1,554,806 6,842,099 2,931 2,815,943 2.430 0.000 0.00% 0.00 109.20 2040 3,291,857 1,994,982 1,555,868 6,842,706 608 2,815,943 2.430 0.000 0.00% 0.00 109.20 2041 3,292,632 1,992,867 1,555,425 6,840,924 (1,783) 2,815,943 2.429 0.000 0.00% 0.00 109.20 2042 3,293,809 1,989,517 1,558,448 6,841,774 851 2,815,943 2.430 0.000 0.00% 0.00 109.20 2043 3,295,137 1,989,990 1,554,806 6,839,933 (1,842) 2,815,943 2.429 0.000 0.00% 0.00 109.20 2044 3,291,653 1,994,078 1,554,754 6,840,485 552 2,815,943 2.429 0.000 0.00% 0.00 109.20 2045 3,293,313 1,991,654 1,553,082 6,838,049 (2,436) 2,815,943 2.428 0.000 0.00% 0.00 109.20 2046 5,287,898 1,549,868 6,837,766 (283) 2,815,943 2.428 0.000 0.00% 0.00 109.20 2047 5,284,518 1,555,098 6,839,616 1,850 2,815,943 2.429 0.000 0.00% 0.00 109.20 2048 5,284,478 1,553,475 6,837,953 (1,663) 2,815,943 2.428 0.000 0.00% 0.00 109.20 2049 5,287,355 1,555,185 6,842,540 4,587 2,815,943 2.430 0.000 0.00% 0.00 109.20 2050 5,287,723 1,550,025 6,837,747 (4,793) 2,815,943 2.428 0.000 0.00% 0.00 109.20 2051 5,285,349 1,553,181 6,838,530 783 2,815,943 2.429 0.000 0.00% 0.00 109.20 2052 6,839,252 6,839,252 723 2,815,943 2.429 0.000 0.00% 0.00 109.20 TOTAL 22,895,703 $ 8,538,259 $ 63,767,566 $ 74,874,314 $ 48,440,154 $ 218,515,996 $ 4,099,223 $ 1.456 3,339 $ (1) Annual debt service net of state reimbursement for Series of 2010 (QSCBs), 2011 (QSCBs), 2012, 2014, 2015 and 2018. (2) Series of 2019: $6,670,000 par amount, $6,500,000 construction fund, based on estimated current market conditions which are subject to change, $0 capitalized interest, local effort 100%. (3) Series of 2020: $38,020,000 par amount, $37,300,109 construction fund, based on estimated current market conditions which are subject to change, $117,000 capitalized interest, local effort 100%. (4) Series of 2021: $40,030,000 par amount, $37,300,109 construction fund, based on estimated current market conditions which are subject to change, $2,075,962 capitalized interest, local effort 100%. (5) Series of 2022: $27,360,000 par amount, $25,737,525 construction fund, based on estimated current market conditions which are subject to change, $1,143,292 capitalized interest, local effort 100%. (6) Assumes FY 2018-19 mill is worth $2,815,943 and no annual growth in the value of a mill. Net Debt Service Millage Analysis

RBC Capital Markets 6

Disclaimer

Disclosure of Role: RBC Capital Markets, LLC (“RBCCM”) is providing the information contained in this document for discussion purposes only in anticipation of serving as underwriter or bank loan agent to the recipient of this presentation (the “Recipient”). The primary role of RBCCM, as an underwriter, is to purchase securities, for resale to investors, in an arm’s-length commercial transaction between the Recipient and RBCCM and that RBCCM has financial and other interests that differ from those of the Recipient. RBCCM is not acting as a municipal advisor, financial advisor or fiduciary to the Recipient or any other person or entity. The information provided is not intended to be and should not be construed as “advice” within the meaning of Section 15B of the Securities Exchange Act of 1934. The Recipient should consult with its own financial and/or municipal, legal, accounting, tax and

• ther advisors, as applicable, to the extent it deems appropriate. If the Recipient would like a municipal advisor in this transaction that has legal

fiduciary duties to the Recipient, then the Recipient is free to engage a municipal advisor to serve in that capacity. Disclaimer: This presentation was prepared exclusively for the benefit of and internal use by the recipient for the purpose of considering the transaction or transactions contemplated herein. This presentation is confidential and proprietary to RBC Capital Markets, LLC (“RBCCM”) and may not be disclosed, reproduced, distributed or used for any other purpose by the recipient without RBCCM’s express written consent. By acceptance of these materials, and notwithstanding any other express or implied agreement, arrangement, or understanding to the contrary, RBCCM, its affiliates and the recipient agree that the recipient (and its employees, representatives, and other agents) may disclose to any and all persons, without limitation of any kind from the commencement of discussions, the tax treatment, structure or strategy of the transaction and any fact that may be relevant to understanding such treatment, structure or strategy, and all materials of any kind (including opinions or other tax analyses) that are provided to the recipient relating to such tax treatment, structure, or strategy. The information and any analyses contained in this presentation are taken from, or based upon, information obtained from the recipient or from publicly available sources, the completeness and accuracy of which has not been independently verified, and cannot be assured by RBCCM. The information and any analyses in these materials reflect prevailing conditions and RBCCM’s views as of this date, all of which are subject to change. To the extent projections and financial analyses are set forth herein, they may be based on estimated financial performance prepared by or in consultation with the recipient and are intended only to suggest reasonable ranges of results. The printed presentation is incomplete without reference to the oral presentation or other written materials that supplement it. IRS Circular 230 Disclosure: RBCCM and its affiliates do not provide tax advice and nothing contained herein should be construed as tax advice. Any discussion of U.S. tax matters contained herein (including any attachments) (i) was not intended or written to be used, and cannot be used, by you for the purpose of avoiding tax penalties; and (ii) was written in connection with the promotion or marketing of the matters addressed herein. Accordingly, you should seek advice based upon your particular circumstances from an independent tax advisor.