1. Peck, Shaffer & Williams LLP 1 Local Government Leasing Georgeann Becker January 30, 2009

2. Peck, Shaffer & Williams LLP 2 Presenter Georgeann Becker, with more than 30 years’ practice in public finance, is a partner at Peck Shaffer with a focus on transaction structure and documents and disclosure

3. Peck, Shaffer & Williams LLP 3 Local Government Leasing ● Leases in General ● Basic Authority to Lease ● Not Debt or Multiple Fiscal-Year Financial Obligation ● The Lessor ● Local Government Lease Features

4. Peck, Shaffer & Williams LLP 4 Various Structures ● Private Investor Lease (Vendor) ● Lease Certificates of Participation ● Lease Revenue Bonds

5. Peck, Shaffer & Williams LLP 5 Leases in General ● Why Lease? ● Types of Leased Property ► Lease of Project to be Provided ► Leased Property other than Project ► “Value” of Leased Property ● Site Leases/Sale and Leaseback ● Length of Lease ● “Weighted Average Useful Life” ● Base Rentals ● Additional Rentals

6. Peck, Shaffer & Williams LLP 6 Basic Authority to Lease ● Organic Authority ► Constitution ► Statutes ► Charters ● Case Law

7. Peck, Shaffer & Williams LLP 7 Not Debt or Multiple Fiscal-Year Financial Obligation ● Initial Term Plus Renewal Terms ● Subject to Annual Appropriation by Lessee ● Renewal Through Budget Process ● Reasonable Rentals ● Avoid “Economic Compulsion to Renew” ► For example “Nonsubstitution Clause” ● Lessee Not Grant Mortgage

8. Peck, Shaffer & Williams LLP 8 The Lessor ● Nonprofit Organizations ► Traditional Building Authorities ► Other Nonprofits ● Commercial Organizations/Leasing Companies ● Trusts

9. Peck, Shaffer & Williams LLP 9 Lease Transaction in Graphics Lessee Lessor Lease TrusteeTrust Agreement Base Rental Payments COP Investors P&I Payments

10. Peck, Shaffer & Williams LLP 10 Lease Features ● Series of One-Year Terms ► Initial Term ► Renewal Terms ► Renewal Through Budget Process ● Lessee’s Right to Not Appropriate ● Triple or Absolute Net ● Acquisition, Construction and Maintenance of Leased Property ● Taxes and Assessments

11. Peck, Shaffer & Williams LLP 11 Lease Features (Continued) ● Environmental Audits and Covenants ● Provisions re: Federal/State Income Tax Exemptions ● State Real Estate Property and Sales Tax Exemptions

12. Peck, Shaffer & Williams LLP 12 Lease Certificates of Participation ● Certain Vendors/Lessors Take Whole Leases into Own Portfolio ► May assign or participate interest in lease(s) ► May “bundle” or “pool” with other leases and/or syndicate ● Lessor Assigns Lease to Trustee ● Trustee Executes and Delivers Lease COPs to Investors ● COPs Represent a Participation Interest in (Right to Receive) Base Rentals ● Tax-Exemption based on Lease with (for federal tax purposes, constituting installment sale to) state or political subdivision as lessee

13. Peck, Shaffer & Williams LLP 13 Lease Revenue Bonds ● Older Method ● “On Behalf Of” Lessors – Tax-Exemption derived from status of Lessor ● Leases Are The Same ● Nonprofit Lessor Issues Lease Revenue Bonds ● Lease Payments are Source of Payment of Lessor’s Debt

14. Peck, Shaffer & Williams LLP 14 Presenter’s Information Georgeann Becker Peck, Shaffer & Williams LLP Suite 1700 1801 Broadway Denver, Colorado 80202 (303) 296-3996 Main (877) 296-0333 WATTS (Toll Free) (303) 296-0344 Facsimile gbecker@peckshaffer.com www.peckshaffer.com