Board Resolution Assignment of BRAC Warrants For the Mutual Benefit of: Madison County and Huntsville City Boards of Education Jason W. Taylor Chief Financial Officer 4 April 2016

In 2013 PSCA Issued BRAC Warrants for the Benefit of BRAC-Affected Public School Boards in North Alabama Summary of Terms: Series 2013-A and 2013-B were Issued in June 2013 Debt obligations require recipient school board(s) to repay 50% of principal balance – very attractive structure for recipient boards Proceeds required to be used in conjunction with renovation of existing school facilities or construction of new school facilities. Tax Compliance Agreements underlying the BRAC warrants require 100% of bond proceeds to be expended or encumbered (pursuant to binding obligations or commitments of the board) within three years of the date of issuance

In 2013 PSCA Issued BRAC Warrants for the Benefit of BRAC-Affected Public School Boards in North Alabama Current Issue: To date, Madison County Board of Education has not expended or encumbered its BRAC warrant proceeds in accordance with Tax Compliance Agreements Unexpended (or non-compliant) BRAC proceeds may revert back to the State for refunding of otherwise unrelated debt obligations; and away from public school boards operating in BRAC-affected areas throughout North Alabama

In 2013 PSCA Issued BRAC Warrants for the Benefit of BRAC-Affected Public School Boards in North Alabama Current Issue: To date, Madison County Board of Education has not expended or encumbered its BRAC warrant proceeds in accordance with Tax Compliance Agreements Unexpended (or non-compliant) BRAC proceeds may revert back to the State for refunding of otherwise unrelated debt obligations; and away from public school boards operating in BRAC-affected areas throughout North Alabama

Concept of Board Resolution: Mutually Beneficial Assignment Agreement between Madison County and Huntsville City Boards of Education Madison County Board of Education assigns its right in the BRAC Warrants to the Huntsville City Board of Education Huntsville City Board of Education assumes all obligations of the BRAC Warrants Huntsville City Board of Education pays to Madison County Board of Education a discretionary balance of $5 million Huntsville City Board of Education enjoys the benefits of the BRAC warrants proceeds and the attractive debt service structure

Concept of Board Resolution: Mutually Beneficial Assignment Agreement between Madison County and Huntsville City Boards of Education Madison County Board: Revenues: $5 million (11% of Local Revenues) Huntsville City Board: Total Cost Savings, net: $23 million Cost Recovery Period: 3.5 years (i.e. 3.5 years to recapture the $5 million payment to Madison County Board)

(Projections Based on $40 Million Assignment) An Assignment Agreement Could Result in Substantial Cost Savings for the Huntsville City Board of Education (Projections Based on $40 Million Assignment)

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