RBC Capital Markets Presentation to: Proposed Series 2018 Bonds - PowerPoint PPT Presentation

RBC Capital Markets Presentation to: Proposed Series 2018 Bonds June 21, 2018 STRICTLY PRIVATE AND CONFIDENTIAL Michael Lillys Daniel C. O’Brien Managing Director Director One Logan Square, 17th Floor One Logan Square, 17th Floor 130 North 18th Street 130 North 18th Street Philadelphia, PA 19103 Philadelphia, PA 19103 Phone: (215) 832-1501 Phone: (215) 832-1526 Email: michael.lillys@rbccm.com Email: daniel.obrien@rbccm.com

Interest Rate History  MMD tax-exempt interest rates, which are published daily, are widely used as benchmarks in municipal finance for pricing bond issues Interest Rate History 10 Year AAA MMD (Municipal Market Data) Since January 1, 1997 2018 YTD 6.00 6.00 10 Year MMD Date 5.00 Max: 5.37 05/18/2000 5.00 Min: 1.29 06/27/2016 Average: 3.30 - Current: 2.46 06/11/2018 4.00 4.00 3.00 3.00 Current 10 year MMD = 2.46% 2.00 2.00 1.00 1.00 0.00 0.00 10 Year MMD Current RBC Capital Markets 1

Debt Profile – Gross Debt Service (Before State Reimbursement) Gross Debt Service 1 2 3 4 5 6 7 QSCB - QSCB - G.O. Bonds G.O. Note G.O. Bonds Total Period Series of Series of Series of Series of Series of Gross Debt Ending 2010 [1] 2011 [2] 2012 2014 2015 Service 06/30/2018 593,833 45,988 92,988 40,750 3,425,175 4,198,734 06/30/2019 593,833 45,988 167,900 40,729 3,323,775 4,172,225 06/30/2020 593,833 45,988 166,500 65,708 3,320,250 4,192,279 06/30/2021 593,833 45,988 165,100 68,156 3,334,700 4,207,778 06/30/2022 593,833 45,988 1,428,700 715,542 754,550 3,538,613 06/30/2023 593,833 45,988 1,426,800 724,189 766,550 3,557,361 06/30/2024 593,833 45,988 1,429,400 450,349 1,050,400 3,569,971 06/30/2025 593,833 45,988 0 0 0 639,821 06/30/2026 466,583 36,423 0 0 0 503,006 06/30/2027 0 0 0 0 0 0 06/30/2028 0 0 0 0 0 0 06/30/2029 0 0 0 0 0 0 06/30/2030 0 0 0 0 0 0 TOTALS 5,217,250 404,327 4,877,388 2,105,423 15,975,400 28,579,787 Outstanding 3,054,000 241,714 4,360,000 1,875,000 14,275,000 23,805,714 Principal*: Purpose: New Money New Money AdvRef 2004B AdvRef 2005 CurRef 2005 Call Date: Make Whole Make Whole 02/15/2017 Anytime Non-Callable Reimb %: 0.000% 0.000% 0.000% 53.400% 53.400% 17/18 MVAR%: 69.410% 69.410% 69.410% 69.410% 69.410% Local Share: 100.000% 100.000% 100.000% 62.935% 62.935% State Share: 0.000% 0.000% 0.000% 37.065% 37.065% [1] - Assumes federal subsidy is 4.479% [2] - Assumes federal subsidy is 4.654% *Outstanding principal as of July 1, 2017. RBC Capital Markets 2

Debt Profile – Net Debt Service (After State Reimbursement) Before Proposed 2018 Issuance Net Debt Service 1 2 3 4 5 6 7 QSCB - QSCB - G.O. Bonds G.O. Note G.O. Bonds Total Period Series of Series of Series of Series of Series of Net Debt Ending 2010 [1] 2011 [2] 2012 2014 2015 Service 06/30/2018 365,833 28,488 92,988 25,646 2,155,636 2,668,591 06/30/2019 365,833 28,488 167,900 25,633 2,091,820 2,679,674 06/30/2020 365,833 28,488 166,500 41,353 2,089,601 2,691,776 06/30/2021 365,833 28,488 165,100 42,894 2,098,695 2,701,011 06/30/2022 365,833 28,488 1,428,700 450,327 474,876 2,748,224 06/30/2023 365,833 28,488 1,426,800 455,769 482,429 2,759,319 06/30/2024 365,833 28,488 1,429,400 283,428 661,070 2,768,219 06/30/2025 365,833 28,488 0 0 0 394,321 06/30/2026 352,583 27,673 0 0 0 380,256 06/30/2027 0 0 0 0 0 0 06/30/2028 0 0 0 0 0 0 06/30/2029 0 0 0 0 0 0 06/30/2030 0 0 0 0 0 0 TOTALS 3,279,250 255,577 4,877,388 1,325,049 10,054,128 19,791,391 Outstanding 3,054,000 241,714 4,360,000 1,875,000 14,275,000 23,805,714 Principal*: Purpose: New Money New Money AdvRef 2004B AdvRef 2005 CurRef 2005 Call Date: Make Whole Make Whole 02/15/2017 Anytime Non-Callable Reimb %: 0.000% 0.000% 0.000% 53.400% 53.400% 17/18 MVAR%: 69.410% 69.410% 69.410% 69.410% 69.410% Local Share: 100.000% 100.000% 100.000% 62.935% 62.935% State Share: 0.000% 0.000% 0.000% 37.065% 37.065% [1] - Assumes federal subsidy is 4.479% [2] - Assumes federal subsidy is 4.654% *Outstanding principal as of July 1, 2017. RBC Capital Markets 3

New Money Review - $5 Million Par Amount with Wrap-Around Structure Bond Details Debt Service Schedule Pricing Date July 2018 Fiscal Year Annual Net Settlement Date 08/20/2018 Ending Debt Service True Interest Cost (TIC) 3.46% 06/30/2019 107,436 1st Interest Payment Date 10/15/2018 06/30/2020 169,584 1st Principal Payment Date 04/15/2020 06/30/2021 169,450 Call Date 10/15/2023 06/30/2022 169,310 06/30/2023 169,166 Sources and Uses of Funds 06/30/2024 169,016 Sources: 06/30/2025 2,543,860 Par Amount $ 5,000,000 06/30/2026 2,556,748 Original Issue Premium/(Discount) - 06/30/2027 129,250 Total Sources $ 5,000,000 06/30/2028 Uses: 06/30/2029 Project Fund Deposit $ 4,860,000 06/30/2030 Estimated Costs of Issuance (including UW fee) 140,000 06/30/2031 Estimated Bond Insurance - 06/30/2032 Additional Proceeds - 06/30/2033 Total Uses $ 5,000,000 Total $ 6,183,819 3,500,000 Existing Net Debt Service Proposed Net Debt Service 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 NOTE: New money review assumes proposed debt service wraps around District’s existing net debt service and includes the effect on debt service across a range of interest rates. Interest rates are based on estimated current market conditions and are subject to change. RBC Capital Markets 4

Debt Profile – Net Debt Service (After State Reimbursement) After Proposed 2018 Issuance Net Debt Service 1 2 3 4 5 6 7 8 9 Proposed 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 Budget Ending 2010 [1] 2011 [2] 2012 2014 2015 2018 Service Impact 06/30/2018 365,833 28,488 92,988 25,646 2,155,636 0 2,668,591 06/30/2019 365,833 28,488 167,900 25,633 2,091,820 107,436 2,787,110 118,519 06/30/2020 365,833 28,488 166,500 41,353 2,089,601 169,584 2,861,359 06/30/2021 365,833 28,488 165,100 42,894 2,098,695 169,450 2,870,461 06/30/2022 365,833 28,488 1,428,700 450,327 474,876 169,310 2,917,534 06/30/2023 365,833 28,488 1,426,800 455,769 482,429 169,166 2,928,484 06/30/2024 365,833 28,488 1,429,400 283,428 661,070 169,016 2,937,235 06/30/2025 365,833 28,488 0 0 0 2,543,860 2,938,181 06/30/2026 352,583 27,673 0 0 0 2,556,748 2,937,004 06/30/2027 0 0 0 0 0 129,250 129,250 06/30/2028 0 0 0 0 0 0 0 06/30/2029 0 0 0 0 0 0 0 06/30/2030 0 0 0 0 0 0 0 TOTALS 3,279,250 255,577 4,877,388 1,325,049 10,054,128 6,183,819 25,975,210 Outstanding 3,054,000 241,714 4,360,000 1,875,000 14,275,000 5,000,000 28,805,714 Principal*: 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 %: 0.000% 0.000% 0.000% 53.400% 53.400% 0.000% 17/18 MVAR%: 69.410% 69.410% 69.410% 69.410% 69.410% 69.410% Local Share: 100.000% 100.000% 100.000% 62.935% 62.935% 100.000% State Share: 0.000% 0.000% 0.000% 37.065% 37.065% 0.000% [1] - Assumes federal subsidy is 4.479% [2] - Assumes federal subsidy is 4.654% *Outstanding principal as of July 1, 2017. RBC Capital Markets 5

Proposed Timeline June 2018 July 2018 August 2018 S M T W T F S S M T W T F S S M T W T F S 1 2 1 2 3 4 5 6 7 1 2 3 4 3 4 5 6 7 8 9 8 9 10 11 12 13 14 5 6 7 8 9 10 11 10 11 12 13 14 15 16 15 16 17 18 19 20 21 12 13 14 15 16 17 18 17 18 19 20 21 22 23 22 23 24 25 26 27 28 19 20 21 22 23 24 25 24 25 26 27 28 29 30 29 30 31 26 27 28 29 30 31 Date Event June 21 Board Meeting - Financing Presentation Week of July 2 Obtain Moody’s Rating Week of July 9 Post Preliminary Official Statement (POS) July 10 Board Meeting - Adoption of Parameters Resolution Week of July 16 Bond Sale - Lock in Rates Week of August 20 Settlement RBC Capital Markets 6

Parameters Resolution  Because of continued volatility in the municipal bond market many issuers are approving their bond financings using a Parameters Resolution. This type of resolution provides the financing team with the flexibility to sell the bonds at any time.  The Parameters Resolution accepts a Bond Purchase Agreement (BPA) from RBC with certain maximum parameters which must be met, such as:  Maximum principal maturity amounts  Maximum issue amount  Maximum interest rate  Maximum fiscal debt service  The parameters are required in order to receive approval by the PA Department of Community and Economic Development (DCED) for the financing.  Once the Parameters Resolution is adopted no further action by the Board is required.  After the sale of bonds is completed a designated District official(s) would be required to execute an Addendum to the BPA to approve the final bond sale results. RBC Capital Markets 7