West Contra Costa USD General Obligation Bond, Election of 2010, Series A Presentation to the Facilities Subcommittee November 15, 2011

Sale of Series A Bonds Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 1  Last week, the District sold $100 million of Series A Bonds to investors through the underwriting team of Piper Jaffray and De La Rosa & Co.  Bond purchase agreement signed on Tuesday, November 8th.  BPA included $79 million of tax-exempt bonds and $21 million of Qualified School Construction Bonds.  The all-in costs of funds to the District is 4.30% for a financing with an average life of 20.4 years.  At the time of signing, 100% of bonds were placed with investors (though not all were placed with buy-and-hold investors).  Bond proceeds will be wired to the District at closing on Tuesday, November 22nd.

Re-Envisioned Bond Program  The sale represents the first sale of bonds under a long-term bond program that has been significantly re-envisioned over the past three years.  Unprecedented declines in assessed values significantly constrained the 2005 Measure J bond program.  Issues were downsized, prior issues re-structured, and opportunities to take advantage of federally subsidized programs sought out.  Remaining 2005 Measure J authorization was set aside and a new authorization sought and achieved (establishing a new tax rate target).  Bonding capacity waiver sought and achieved (up to 5% of assessed value). Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 2

New Strategies  The District implemented a number of new (and relatively new) strategies in conducting this sale of bonds.  Bonds were sold by negotiated sale (consistent with most recent bond sales).  Bonds were marketed by a senior manager and a single co- manager (co-managers were utilized in connection with 2009 Series C Bonds).  Services provided by Piper Jaffray in the development of the re-envisioned bond program were recognized through a management fee component of the underwriter’s spread.  The District reached out to a number of key investors in preparation for the sale (in addition to holding an internet road show). Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 3

Primary Objectives  These new strategies and other efforts of the financing team were intended to accomplish a number of key objectives.  Achieve the lowest possible interest rates for District taxpayers (both on an absolute and spread to MMD basis).  Continue to expand the District’s investor base.  Increase the number of bonds that were sold both uninsured and at an economic benefit. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 4

Summary of Results  Overall, the financing team can report that the sale met all key objectives.  Absolute yields were very low.  Yields on a spread-to-MMD basis were relatively close to past West Contra Costa USD and recent comparable transactions.  More than $44 million (or 44.2%) of the current transaction were sold without insurance (versus $64 million (or 39.5%) on the 2009 transaction and none of the 2011 refunding bonds). Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 5

Market Conditions  Although interest rates were generally higher than their mid- September lows, the bonds sold into generally improving market conditions. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 6

Municipal Rates versus Mid-August  On the day of the sale, MMD rates were relatively close to where they were when the District issued its Refunding Bonds on August 10th. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 7

Refunding Opportunity  The District was not able to refund any additional bonds authorized for refunding this past summer.  Bonds authorized for refunding in July but not refunded in August remained eligible for refunding.  The financing team was prepared to move ahead with the refunding under specific circumstances (if targeted savings levels could be met with an achievable couponing structure and without moving principal payments forward).  Rates were not sufficiently low at the time of sale to recommend a refunding at the time of pricing and have not decreased since the date of pricing.  These and other bonds may become refundable in the future (even if rates don’t decrease further). Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 8

Rating Movement  One positive going into the sale was that Moody’s Investors Service eliminated the negative outlook on the District’s general obligation bonds. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 9 Rating AgencyCurrent RatingCurrent OutlookRecent History Moody’s Investors Service“Aa3”Stable“Aa2” in June “Aa3” with negative outlook in August Standard & Poor’s“A+”Stable“A-” with positive outlook in June “A” in August Fitch Ratings“A+”Stable“A-” with negative outlook in June “A+” with negative outlook in June 2010.

Investor Outreach  The District reached out to a number of key investors in preparation for this sale. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 10 American Century Fund Americo Life Insurance Columbia Management Charles Schwab Funds Neuberger Berman Asset Management Thornburg Investment Management Vanguard Wells Capital Management Wells Proprietary Funds

Investor Participation  The bond issue attracted a broad base of institutional investors. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 11

Comparison to Recent District Bond Sales (1)  These and other factors allowed the District to sell bonds to investors at rates that were in some years lower than for the recent refunding bonds. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 12

Comparison to Recent District Bond Sales (2)  Yield spreads, however, were somewhat wider throughout most of the loan. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 13

Comparison to Comparable Bond Sales (1)  Yields on District bonds continue to be somewhat higher on a spread basis than on comparable bond sales. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 14

Comparison to Comparable Bond Sales (2)  Yields on District bonds continue to be somewhat higher on a spread basis than on comparable bonds sales. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 15

Qualified School Construction Bonds  The District also sold $21 million of qualified school construction bonds.  QSCBs were authorized in connection with the LPS-Richmond project.  District had until November 30th to issue QSCBs and now will have until November 22nd, 2014, to expend proceeds.  QSCBs were sold as taxable bonds maturing on 8/1/28 at a yield of 6.25% (220% of the comparable treasury bond yield).  Federal subsidy rate of 4.91% will reduce the net cost to the District to 1.34%.  The QSCB portion of this financing will require ongoing management (from both a subsidy and tax rate management perspective). Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 16

QSCB Investors  The District’s QSCBs attracted a high level of buy-and-hold investors. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 17

Moving Ahead  The financing team will continue to address challenges to the bond program in the year ahead.  Existing bond programs are based on the assumption of long- term tax base growth.  Current 2010 Measure D financing plan assumes that bonds will be issued in alternate years of approximately equal amounts through.  Projects continue to straddle bond issuances.  The District should continue to communicate positive status about the bond program. Presentation to the West Contra Costa Unified School District Facilities Sub-Committee | page 18