West Contra Costa USD Presentation to the Facilities Subcommittee June 12, 2012

GOB Refunding  The District has been discussing the possibility of refunding certain outstanding general obligation bonds not included in the 2011 GO Refunding Bonds or added on to the Election of 2010, Series A, Bonds since January.  Bonds under consideration include the (a) Election of 2000, Series C, (b) Election of 2002, Series A, (c) Election of 2002, Series B, and (d) Election of 2002, Series C.  Bonds were excluded from prior transactions because savings did not reach District established 4% threshold given structuring priorities (no acceleration).  Improvement of rates in December and January brought pressure to move ahead with a transaction that was now “in the money”.  The financing team recommended a patient approach. West Contra Costa Unified School District Facilities Subcommittee | page 1

Plan for July Sale  To date, the District has been following the recommendation to issue refunding bonds after the release of assessed value information in July.  The District’s 2000 Measure M, 2002 Measure D, and 2005 Measure J bond programs are significantly constrained.  The County is currently levying tax rates at the targeted maximum on all four post-2000 bond measures.  Additional knowledge about assessed values would provide some benefit in terms of efficiently structuring debt service to meet immediate constraints.  At the same time, the District has been taking action to remain flexible to enter the market quickly if desirable. West Contra Costa Unified School District Facilities Subcommittee | page 2

Recent Market Movements  In recent weeks, rates on U.S. treasury securities have decreased dramatically. West Contra Costa Unified School District Facilities Subcommittee | page 3

Recommendation to Accelerate Sale  Decreases in interest rates are the primary reason that the financing team has recommended to accelerate the sale.  The recent market movement puts the ten-year treasury at its all-time low.  Strong market movements often suggest increase volatility on a good forward basis.  Difficult to turn down an opportunity to issue refunding bonds at the time that interest rates (by some measures) are at an all- time low.  The County Assessor has given us some feedback that assessed values will be flat into West Contra Costa Unified School District Facilities Subcommittee | page 4

Other Considerations  There are certain downsides that remain for such strategy.  Interest rates might continue to decrease into July.  assessed values could differ significantly from current projections.  In the event that assessed values unexpectedly decrease significantly, tax rates could exceed targeted maximums in tax year despite the intent of the District to address such concern through refunding. West Contra Costa Unified School District Facilities Subcommittee | page 5

Widening of Credit Spreads  Market developments in the past week make it clear that the District will not receive the full benefit of the improvement in U.S. treasury rates.  After reaching a historical low in early June, 10-year Treasury rates have increased by 15 basis points.  During the same period, 10-year MMD rates have increased by about 15 basis points, despite the fact that municipals did not participate in the earlier Treasury rally.  Investors have started to push for wider spreads or remain hesitant about entering the market. West Contra Costa Unified School District Facilities Subcommittee | page 6

Savings  Still, we expect the proposed refunding transaction to produce $8.5 million in present value savings. West Contra Costa Unified School District Facilities Subcommittee | page 7 Par Amount$95,000,000 Available Proceeds$105,000,000 Effective Borrowing Rate (TIC)4.20% Present Value Savings$8,500,000 Percent PV Savings8.25% Impact of 10 bp market movement$1.2 million

Bonds to Be Included  The financing team is recommending that the following bonds be included in the refunding. West Contra Costa Unified School District Facilities Subcommittee | page 8 Refunded Par PV Savings Call Date Call Price Election of 2000, Series C$43,115,000$3,705,000Current100% Election of 2002, Series A11,515,000965,000Current100% Election of 2002, Series B40,460,0003,310,000Current100% Election of 2002, Series C7,610,000520,0008/1/ % Total$102,700,000$8,500,000

Rating Confirmations  All three rating agencies have confirmed the ratings on the District’s bonds. West Contra Costa Unified School District Facilities Subcommittee | page 9 RatingOutlook Moody’sAa3Stable S&PA+Stable FitchA+Stable

Rating Rationale  The following strengths and weaknesses were highlighted in published rating reports.  Strengths  Well-sized and stabilizing assessed valuation  Strong reserves  Participation in the Bay Area economy  Challenges  Uncertain funding environment for California school districts  High overall debt burden West Contra Costa Unified School District Facilities Subcommittee | page 10

Investor Outreach  The District has scheduled investor outreach events on Wednesday and Friday of this week.  The District will conduct a net road show tomorrow at noon California time.  The District plans on conducting one-on-one investor meetings on Friday.  The purpose of the investor outreach program is three-fold: to counter unwarranted negative impressions of the investor community, to cultivate investor interest in individual transactions, and to build the District’s reputation as a leader in investor outreach.  The closing of the refunding transaction in July will allow the District greater latitude in implementing a more general program. West Contra Costa Unified School District Facilities Subcommittee | page 11

Schedule  The District plans to price bonds next week and to close two weeks later. West Contra Costa Unified School District Facilities Subcommittee | page 12 DateEvent Wednesday, June 13 th One-on-one investor calls and net road show. Monday, June 18 th *Pre-pricing call. Tuesday, June 19 th *Pricing Call. Thursday, June 26 th Finalize Official Statement. Week of July 2 nd County Assessor releases preliminary assessed valuation figures. Week of July 9 th Meeting with County Treasurer-Tax Collector’s Office. Monday, July 9 th All closing documents signed and returned to bond counsel. Tuesday, July 10 th Closing. * Tentative.

AV by Jurisdiction West Contra Costa Unified School District Facilities Subcommittee | page 13