1 1 Tax and Revenue Anticipation Note “LOC TRAN”

2 The League of Oregon Cities sponsors a pooled short-term borrowing program for its members known as the “LOC TRAN.” Each participating city pledges its full faith and credit to its portion of the LOC TRAN, which is paid from tax receipts and other lawfully available revenues.

3 LOC TRAN may be issued in one or more series. Maturities are flexible, ranging from 6 to 13 months. Schedule – July 2 nd Closing Timing May 1, 2009Submit cash flow and supporting data. By May 15, 2009City Council adopts Resolution. May 25, 2009Wedbush Morgan Securities circulates the Preliminary Official Statement and markets the TRAN. June 9, 2009TRAN Sale. June 17, 2009K&L Gates circulates closing documents to City. June 24, 2009City returns all executed closing documents to K&L Gates. July 2, 2009Closing: funds are wired to the City.

4  Submit completed Cash Flow and accompanying materials  Cash Flow reviewed  Legal documents drafted  Authorizing Resolution adopted by governing body  Preliminary Official Statement distributed  Pricing  Execution of legal documents  Final Official Statement distributed  Closing (funds wired to Participants)  Participants set up post-closing “tickler” system TRAN Process Overview

5 Parameters Size is limited to: 1. 80% of lawfully available revenues budgeted to be received in the same fiscal year. 2. The largest expected cash flow deficit during the 13 months following the TRAN issue date, plus the reasonable amount of a working capital reserve (amounts on-hand and anticipated to be received; “reasonable” is generally up to 5% of the actual working capital expenditures in the prior fiscal year). Pledge the City’s full faith and credit. General LOC TRAN Requirements

6 Arbitrage/Rebate “Temporary period” exception to the arbitrage yield limitations:  City reasonably expects to spend TRAN proceeds on working capital within 13 months of the TRAN closing. Exceptions from rebate requirements:  Small issuer qualification for cities with general taxing powers: $5M or less in total tax-exempt debt in the same calendar year.  Expends proceeds within 6 months. Bank Qualification $30M or less in total tax-exempt debt in same calendar year. General Tax-Exempt Requirements

7 7 Overview on Filling in the City’s Cash Flow Spreadsheet IMPORTANT: Download the Cash Flow from the League of Oregon Cities’ web site and save it to your computer before filling in the data.

8 To begin, you may need to “Enable Macros” to open the file. Select

9 If your system does not prompt you to accept “Enable Macros”, you may need to manually change your system security settings as follows:

10 Fill in your City’s name and choose your “2009 Issuer Status” using the drop down menu.

11 Prepare your monthly cash flows based on your City’s audited financials and budget. These cash flows should contain all funds that are not restricted cash. Certain types of funds that cannot be considered restricted cash are described under the “Restricted Cash” tab of the Excel Spreadsheet. Confirm the accuracy of the information and make any corrections or adjustments to cash flows. Using “A” or “E,” indicate whether the data represented are “Actual” or “Estimated.”

12 The cash flow will be automatically prepared based on the Actual/Estimated cash flows, entered above, if you supply figures for your Estimated General Fund Receipts and Disbursements. At this point, modify the projections to reflect your reasonable expectations.

13 If you issued a TRAN in 2008, you must complete the following tax “due diligence” section regarding your deficit projections. You will be prompted to answer additional questions only if you missed your deficit.

14 Enter your TRAN size authorized per your resolution. If you wish to issue a smaller TRAN than you qualify for, please indicate your preference. Recommended TRAN Amount

15 After completing the information on the “Cash Flow Worksheet” tab, select the “Restricted Cash” tab of the Excel spreadsheet. You will be taken to the “Restricted Cash Questionnaire” and the “Alternative Cash Questionnaire.”

16 General Fund Restricted Cash Questionnaire List cash resources of the City not included in General Fund Cash Flow. Select the appropriate responses from the drop-down menus.

17 Alternative Cash Questionnaire Explain why the cash is restricted. Select the appropriate responses from the drop-down menu.

18 Upon completion of the Cash Flow spreadsheet, save your work, then send a copy to If you have any questions regarding the spreadsheet, please contact any of the following Katie Schwab, or David Ulbricht, or Tim Iltz, or Legal questions should be directed to Ann Sherman, or