1.  Pay-as-you-go (cash) or Pay-as you-use (debt)?  Which approach is feasible given project costs, fund balances, debt burden, tax rates?  How will decision affect ability to meet existing obligations and complete future projects?  How does bond interest expense compare to project cost inflation if decision is to pay-go?  Which approach is fairer to current and future taxpayers, given project’s useful life? Project Funding Options

2.  Project costs and timing  Plus: Other future financing needs?  Available funds and future revenues  Estimated bond interest rates  Also: Investment rates on fund balances  Council / community positions Parameters: Internal

3.  Authorization in State Law  Types of municipal debt  Process for approval and issuance  Federal Regulations  IRS: Tax-Exempt Uses; Arbitrage Rebate  MSRB / SEC: Post-Issuance Compliance  Market Forces  Rating Agencies: Credit Quality  Investors: Rates, Terms and Conditions Parameters: External

4.  Given parameters, what are options?  Which will deliver funding when needed?  Which is affordable: now and in future?  Which is good policy and precedent?  Which is politically viable?  Result = Project Funding Plan Project Funding Plans

5.  Estimated Cost: $7.5 Million  POST Cash: $2.0 million  General Fund Cash: $650,000  G.O. Bond Proceeds: $4.85 million  Two Bond Issues: Tax-Exempt and Taxable  $2.0M POST Cash Uses  River restoration / flood mitigation  Relocation necessary for River project  Park improvements  Other POST-eligible uses TBD Fix the Fork Funding Plan 1

6.  $650,000 General Fund Cash Uses  100% of relocation necessary for Pan & Fork Site (RFCDC-owned parcel) redevelopment  Other private or public uses TBD  $4.85M G.O. Bond Proceed Uses  Tax-Exempt: River restoration and other public costs not paid with POST / GF cash  Taxable: Pan & Fork site and RMI site improvements, all other private development costs not paid with GF cash Fix the Fork Funding Plan 2

7.  G.O. Bond Ballot Question  Authority to issue bonds, pledge full faith and credit and unlimited property tax ability  But Town intends to “cancel” all of authorized debt levy debt with other revenues, not raise property taxes above existing level  Tax-Exempt / Taxable Bond split is TBD  Not part of ballot question, other than estimated cost  Town will err toward taxable to fund “gray area” costs as higher interest cost < cost of IRS audit / penalty Fix the Fork Funding Plan 3

8.  Repayment of Tax-Exempt Bonds  Pay mostly from future POST revenues  General taxes for bond portion funding non- POST costs (i.e. streets / utilities)  Plan: offset / reimburse general taxes with Basalt Sanitation District, future special assessments  Repayment of Taxable Bonds  Pay near-term from existing general taxes  Use future assessments and development charges / agreements to reimburse Town and pay off bonds early (if possible) Fix the Fork Funding Plan 4

9.  Estimated GO Bond amount: $5.0 Million  10 year repayment term (2014 – 2023)  “Worst Case” blended interest rate: 5.00%  Current estimated blended rate is 3.00%  “Worst Case” annual debt service: $650,000  Repayment sources:  1% POST sales tax ($1.2 million annually)  Existing General taxes (property and 2% sales)  External: Basalt Sanitation District, assessments GO Bond Example

10.  Issuer: Town of Basalt  Independent Bond Advisor: Ehlers  Bond Counsel: Kutak Rock  Rating Agency: Standard & Poor’s  Paying Agent: TBD  Bond Underwriter: TBD  Bondholders: TBD Bond Issuance Participants

11.  Key Pre-Election Steps  August 13: Council reviews funding plan and ballot question, authorizes staff to proceed  August 27: Council calls for November 6 election on ballot question  September 20: TABOR pro/con statements submitted to counties for distribution to voters  September – October: Town mailer, website, other outreach as permitted by state law  October 15: Counties mail ballots to voters Bond Issuance Process 1

12.  November 5: Election Day  If Voters Approve Question  November 12: Council authorizes bond sales  November 18: S&P rating call / visit  November 26: Competitive bond sales and Council award to winning bidders  Mid-December: Town receives and invests bond proceeds (in sync with project timeline)  Ongoing: Post-issuance compliance Bond Issuance Process 2

13.  Town Policy: Cash vs. Debt  Fix the Fork Funding Plan  G.O. Bonds: Uses, Debt Service, Participants, Issuance Process  Proposed Ballot Question and Key Steps / Dates Discussion