Document elcerrito_gov_doc_8041512c3d

Date: To: From: Subject: AGENDA BILL Agenda Item No. 7(A) June 11, 2012 El Cerrito City Council Mary Dodge, Administrative Services Director/City Treasurer Lease and Bond Refinancing ACTION REQUESTED Adopt three separate resolutions authorizing the City Manager to enter into the following agreements with JP Morgan Chase Bank for: 1) Refinancing of six Equipment Leases; 2) the Capital Lease for the Construction of the Recycling Center; and 3) the Storm Drain Revenue Bonds. BACKGROUND With the decline in interest rates an opportunity exists to save money on interest payments by refinancing certain debt commitments. All of the city's debt issues were considered and the relatively new debt issues for City Hall and Street Improvement bonds were eliminated as they are within a "no call" period making refinancing not feasible at this time. The Redevelopment Agency issues were not considered eligible due to the dissolution of the Agency and the City's new fiduciary arrangement with the Successor Agency, but the City's six equipment capital leases, the recycling center capital lease and two older bond issues were determined to be viable refinancing candidates. ANALYSIS In April 2012, staff was introduced to Joshua Cooperman, an Independent Financial Advisor, through Bond Counsel at Meyers Nave, the City's legal firm, with whom Cooperman has worked in the past. Initial discussions focused on refinancing the six capital leases ofthe City, respectively, three Fire Engines, two Recycling Trucks and the Recycling Carts. After it was determined savings could be achieved on the leases, the review progressed to other potential savings opportunities. Based on this review, Cooperman presented savings analyses showing significant reductions in debt service from refinancing the balance of the Storm Drain Revenue Bonds, the Recycling Center capital lease and the parcel tax-backed bonds for the swim center. On behalf of the City, Cooperman distributed informal bids to multiple potential investors and responses were ultimately received from four firms, with the most advantageous rates and terms coming from JP Morgan Chase Bank (Chase). ---PAGE BREAK--- Agenda Item No. 7{A} Negotiations progressed, and presented to the City Council tonight are three separate transactions consisting of: 1) Consolidation of six capital lease schedules into one lease with interest savings; 2) A new Recycling Center Capital Lease Revenue Bond with interest savings; and 3) A new Storm Drain Bond that eliminates the reserve requirement, and reduces the interest rate. A fourth transaction will be brought to the Council in July or August 2012 for a new bond for the Swim Center that lowers the interest rate and reduces the reserve fund by half. This transaction has been postponed until mid to late summer because of a prepayment penalty of 1% that expires on September 1, 2012. The proposed issues were presented to the Financial Advisory Board (FAB) on April25, 2012 and at a special meeting on May 2, 2012. The FAB was given the draft proposals from Chase which have not changed materially from those presented tonight, along with the financial analysis reports prepared by Cooperman. The financial analysis reports provided this evening are also substantially the same as those reviewed by the F AB. Each issue was voted on separately and each issue was approved unanimously; for the Storm Drain refinance, Board Member Bartke abstained. Following is an analysis of each issue. Equipment Capital Leases The six capital leases have various maturity dates ranging from August 1, 2015 to November 30, 2019 and interest rates ranging from 3.9% to 4.85%. Chase has proposed a single lease for seven years ending 7/1/2020 at a rate of approximately 1.98%, depending on the closing date. The lease will be allocated between the Integrated Waste Management Fund and the Equipment Replacement Fund proportionately in regards to the amounts and maturities refinanced. Given the difference in interest rates, total savings after considering all costs and debt service for 7 years are approximately $71,667, or around 4.4% of the new issue. In addition to the benefit of interest savings is the procedural simplification of consolidating six leases into one. Storm Drain Revenue Bonds This issue has two payments remaining on August 1, 2012 and August 1, 2013. The current interest rate is 5.50% and the new rate will be approximately 1.70%. While this provides savings, the major benefit is the ability to utilize the reserve requirement from the existing bond issue for new capital projects on storm drain upgrades and improvements during the upcoming fiscal year. This will provide the City with $534,175 for new projects at the closing of this refinancing in late June. Page2 ---PAGE BREAK--- Agenda Item No. 7(A) Recycling Facility Lease The facility was recently completed and the current financing at 3.88% extends until October 1, 2025. The refunded lease would mature at the same time and with the same quarterly payment schedule, but would be at an approximate rate of 2.50%. Even after payment of costs of issuance and a required 3% call premium under the existing lease, savings to the City would be about $180,000 over the term (or almost $145,000 on a present value basis). FINANCIAL CONSIDERATIONS Each of the financings would provide positive savings to the City, attributable to the respective fund from which payments are made, in addition to other benefits, such as access to prior locked-up reserve funds and simplification of lease maintenance. All the transactions would be recorded as obligations for accounting purposes (and would supersede the earlier refunded obligations) and are being issued on a tax-exempt basis to Chase, as investor. They will all be private direct placements to Chase. LEGAL CONSIDERATIONS Legal documents are being drafted by municipal bond attorneys at Meyers Nave, which serves as the City's outside counsel. Documents will also be reviewed by Squire Sanders, a national law firm, on behalf of the Bank. Standard opinions of counsel respecting the validity and tax-exempt nature of the obligations will be provided to the City as part of the closing. RECOMMENDATION Approve this report and adopt the attached resolutions to proceed with the refinancings. Scott Hanin, City Manager Attachments: Equipment Lease: 1. Equipment Lease Refunding Resolution 2. Equipment Lease Refunding Proposal 3. Equipment Lease Refunding Financial Analysis Page 3 ---PAGE BREAK--- Agenda Item No. 7(A) Storm Drain Revenue Bond: 1. Storm Drain Bond Refunding Resolution 2. Storm Drain Bond Refunding Proposal 3. Storm Drain Bond Refunding Financial Analysis Recycling Facility Lease: 1. Recycling Facility Lease Refunding Resolution 2. Recycling Facility Lease Refunding Proposal 3. Recycling Facility Lease Refunding Financial Analysis Page4 ---PAGE BREAK--- Agenda Item No. 7(A) Equipment Lease Attachment 1 1 RESOLUTION 2012-XX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO AUTHORIZING THE REFINANCING OF EXISTING EQUIPMENT LEASES WITH OPTION TO PURCHASE AND AUTHORIZING AND DIRECTING RELATED ACTIONS WHEREAS, the City of El Cerrito (the “City”) has previously entered into the following agreements, in each instance between the City, as Lessee, and First Municipal Leasing Corporation, as Lessor (hereafter, collectively, the “Existing Obligations”): Lease with Option to Purchase Agreement, dated as of August 12, 2005; and Lease with Option to Purchase Agreement, dated as of December 21, 2007; and WHEREAS, the City has received a proposal from JPMorgan Chase Bank, NA, (the “Bank”), dated May 23, 2012 (the “Proposal”), to enter into a tax-exempt lease-purchase agreement (the “Proposed Refunding”) of the equipment which is the subject of the Existing Obligations, namely specified fire trucks, recycling trucks and associated equipment items; and WHEREAS, this City Council of the City (this “City Council”) hereby finds and determines that the Proposed Refunding of the Existing Obligations in accordance with and upon terms and conditions which are substantially the same as those specified in the Proposal provides material benefits to the City, including savings on the interest payable by virtue of a reduced interest rate applicable to the Proposed Refunding, which warrant the implementation of the Proposed Refunding; and WHEREAS, the Proposed Refunding would be implemented through use of a standard form of lease-purchase agreement to be provided by the Bank upon acceptance of the Proposal by the City as evidenced by execution of a copy of the Final Proposal (as said term is defined below), which shall provide for terms and conditions substantially the same as those specified in the Proposal, a copy of which is attached to this resolution as Exhibit A and by this reference incorporated herein; WHEREAS, the City wishes by this resolution to approve the Proposal and to authorize execution on behalf of the City of the Final Proposal and the lease-purchase agreement by which the Final Proposal would be implemented. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of El Cerrito as follows: Section 1. Recitals. This City Council hereby finds and determines that the foregoing recitals are true and correct. Section 2. Acceptance of Proposal; Approval of Documents. The City hereby accepts the Proposal in the aggregate principal amount of not to exceed $1,628,172. Section 3. City Manager Authorized to Execute Final Proposal and Lease-Purchase Agreement. Subject to the approval of the Final Proposal by the City Manager, the City Manager is hereby authorized and directed to execute the Final Proposal on behalf of the City; provided that the ---PAGE BREAK--- Agenda Item No. 7(A) Equipment Lease Attachment 1 2 City Manager shall not be obligated to approve any proposed modifications of the Proposal requested by the Bank which the City Manager, in the City Manager’s sole discretion, deems not to be in the best interest of the City, and in the event that the City Manager and the Bank are unable to agree on modifications of the Proposal to establish the Final Proposal, the City shall have no obligation to proceed with the Proposed Refunding; and provided further that the interest rate specified by the Final Proposal shall not exceed the interest rate in the Proposal by more than 35 basis points. Assuming execution of the Final Proposal by the City Manager, and upon receipt of a lease- purchase agreement from the Bank in the standard form utilized by the Bank for transactions of this nature, the City Manager is authorized and directed to execute the lease-purchase agreement on behalf of the City, subject to confirmation by the City Attorney that the terms and conditions set forth in the lease-purchase agreement are consistent with the terms and conditions set forth in the Final Proposal and that the City may lawfully enter into and perform its obligations as set forth therein. Section 4. Official Actions. The City Manager, the Administrative Services Director, the City Clerk and all other officers of the City are each authorized and directed in the name and on behalf of the City to make any and all assignments, financing statements, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate any of the transactions contemplated by the documents approved pursuant to this resolution. Whenever in this resolution any officer of the City is authorized to, execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. Section 5. Effective Date. This resolution shall take effect immediately upon its passage. I CERITFY that at the regular meeting on June 11, 2012 the El Cerrito City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City of El Cerrito on June XX, 2012. Cheryl Morse, City Clerk APPROVED: William C. Jones, III Mayor ---PAGE BREAK--- Agenda Item No. 7(A) Equipment Lease Attachment 1 3 ---PAGE BREAK--- ©20012 JPMorgan Chase & Co All rights reserved City of El Cerrito 3 final lease june 4.docx JPMorgan Chase Bank, N.A. 1111 Polaris Parkway Columbus, Ohio, 43240 Tel: [PHONE REDACTED] Fax: [PHONE REDACTED] Email: [EMAIL REDACTED] Laura Jones Vice President Sr. Relationship Manager June 4, 2012 Mary Dodge Administrative Services Director/City Treasurer City of El Cerrito 10890 San Pablo Avenue El Cerrito, CA, 94530 Dear MS. Dodge JPMorgan Chase Bank, N.A. (“Lessor”) is pleased to submit the following financing proposal for your review and consideration. This letter is a proposal only and is contingent upon your compliance with the requirements of the Internal Revenue Code of 1986, as amended, and all applicable state laws related to Lessee’s ability to enter into a tax-exempt lease-purchase financing for the intended purposes. This proposal is for discussion purposes only and the terms and provisions of this financing are subject, among other things, to credit and business approval in accordance with Chase’s internal procedures, as well as certain conditions as herein set forth. The pricing and terms included in this proposal letter are based on market conditions on the date hereof and are subject to change. LESSOR: JPMorgan Chase Bank, N.A. LESSEE: City of El Cerrito TRANSACTION: Fixed-rate, fully amortizing, privately placed tax-exempt lease-purchase agreement (“Agreement”). EQUIPMENT: 3 Fire trucks, 3 Recycling trucks and Recycling carts. Lessee shall grant Lessor a first priority security interest in the Equipment. EQUIPMENT COST: Anticipated not to exceed $1,628,172 as per the following: One transaction of $1,628,172 LOCATION OF EQUIPMENT: El Cerrito, CA Agenda Item No. 7(A) Equipment Lease Attachment 2 ---PAGE BREAK--- June 4, 2012 Page 2 ©20012 JPMorgan Chase & Co All rights reserved BANK QUALIFIED: This proposal assumes that the Lessee will not issue more than $10 million in tax-exempt obligations this calendar year and that the Lessee will designate this lease as a “qualified” tax-exempt obligation (“QTEO”) APPROPRIATION: LEASE TERM: This Agreement shall be subject to annual appropriation. 7 Years LEASE RATE: AS OFMAY 21ST , 2012 1.98% per annum. LEASE PAYMENT AMOUNT BASED ON RATE FOR MAY 21ST, 2012: ADJUSTMENTS TO PAYMENT AMOUNT AND LEASE RATE: PREPAYMENT/OPTION TO PURCHASE: Payments may be made semi-annually as follows: $125,117.38 Semi-annually The Payment Amount and Interest Rate will be determined based upon a spread over the Treasury Securities Rate of Interest in effect from time to time (the “Index”). “Treasury Securities Rate” shall mean the weekly average yield on United States Treasury Securities Constant Maturity Series issued by the United States Government for a term of 7 years, 1.18% as most recently published by the Federal Reserve Board in Federal Reserve Statistical Release H.15(519), immediately prior to the date of the note. The interest rate will be fixed for the remaining term and equal the sum of the Index plus 0.80% The Lessee shall have the right to prepay, in whole, on any payment date. If Lessee chooses to prepay, a penalty will be assessed based on the following schedule: Month 0-12 5% of outstanding principal balance Month 13-24 4% of outstanding principal balance Month 25-36 3% of outstanding principal balance Month 37-48 2% of outstanding principal balance Month 49-60 1% of outstanding principal balance ---PAGE BREAK--- June 4, 2012 Page 3 ©20012 JPMorgan Chase & Co All rights reserved DOCUMENTATION: DISBURSEMENT OF PROCEEDS: All documentation shall be prepared by and acceptable to Chase or its counsel. Lessor will fund directly to vendor. PROPOSAL ONLY: This proposal is not a commitment to undertake this financing. A commitment can be issued only after full credit and economic review and subsequent approval by the appropriate officers of Lessor. A commitment shall not be binding on Lessor unless it is in writing and signed by Lessor. If a commitment is issued by Lessor, it may modify the terms of this proposal and may add such additional requirements (including, but not limited to, financial covenants, requirements of guaranties or other credit support, and/or special equipment maintenance and return conditions) as Lessor may deem advisable. Please feel free to contact me at [PHONE REDACTED] if you have any questions, or would like to discuss this proposal in greater detail. Thank you again for considering Chase! Sincerely, JPMorgan Chase Bank, N.A. By: Laura Jones ---PAGE BREAK--- June 4, 2012 Page 4 ©20012 JPMorgan Chase & Co All rights reserved ACCEPTED BY: The City of El Cerrito By: Name: Title: Date: IRS Circular 230 Disclosure: Lessor and its affiliates (collectively, “Chase”) do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with Chase of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. ---PAGE BREAK--- Page 1 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Sources and Uses of Funds (Fed Rates 5-21-12) Percentage Allocation 12.93% 11.78% 27.04% 23.17% 17.65% 7.43% 100.00% August 2005 June 2007 November 2009 Fire Truck December 2007 December 2008 October 2009 Recycling Equip Fire Truck Fire Truck Fire Truck Totals Recycling Trucks Recycling Toters Recycling Truck Totals Totals Sources of Funds Lease Amount 208,204.09 196,155.21 438,216.45 842,575.74 374,470.17 288,833.63 122,292.67 785,596.47 1,628,172.21 Accrued Interest 7,143.68 89.74 12,138.32 19,371.74 11,575.62 5,211.22 1,458.18 18,245.01 37,616.75 Total Sources 215,347.77 196,244.94 450,354.77 861,947.48 386,045.79 294,044.84 123,750.85 803,841.48 1,665,788.96 Uses of Funds Cost to Payoff Prior Lease (Cash) 212,115.85 193,299.72 - 405,415.57 380,252.05 289,631.85 - 669,883.90 1,075,299.46 Cost of Escrow Securities (SLGS) - - 443,595.00 443,595.00 - - 121,893.00 121,893.00 565,488.00 Beginning Escrow Cash - - 0.89 0.89 - - 0.61 0.61 1.50 Costs of Issuance 3,231.92 2,945.23 6,758.88 12,936.02 5,793.74 4,413.00 1,857.24 12,063.98 25,000.00 Total Uses 215,347.77 196,244.94 450,354.77 861,947.48 386,045.79 294,044.84 123,750.85 803,841.48 1,665,788.96 Adjustment - - - - - - - - - Escrow Requirements Calculation Outstanding Lease Amount 204,153.85 193,209.98 423,429.76 820,793.59 368,676.43 284,420.63 116,382.70 769,479.76 1,590,273.35 Interest Due on Call Date 7,962.00 89.74 20,324.63 28,376.37 11,575.62 5,211.22 5,644.56 22,431.40 50,807.76 Total Escrow Requirement 212,115.85 193,299.72 443,754.39 849,169.96 380,252.05 289,631.85 122,027.26 791,911.16 1,641,081.11 Assumptions Prior Issue Accrued Interest from Last Interest Payment Date to the Closing Date of 7/5/2012 Allocated Pro-Rata Based on Cost to Payoff or Call Prior Lease Prior Issue Remaining Principal (All Prior Leases Callable at 100%) Run Date June 1, 2012 Run Time 4:30 PM Attachment 3 Agenda Item No. 7(A) Equipment Lease Attachment 3 ---PAGE BREAK--- Page 2 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Summary Statistics Arbitrage Yield 1.98021 % True Interest Cost (TIC) 1.98021 % "All-In" True Interest Cost (AIC) 2.41882 % Average Coupon 1.98000 % Net Interest Cost (NIC) 1.98000 % Average Life 3.729 Years ---PAGE BREAK--- Page 3 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Lease Amortization Schedule and Savings Calculation (All Leases) Beginning Prior Issue Ending Principal Periodic Fiscal Year Fiscal Year Fiscal Year Principal Date Balance Principal Rate Interest Debt Service Debt Service Debt Service (Savings) / Cost Balance 7/5/2012 1,628,172.21 1,628,172.21 12/1/2012 1,628,172.21 111,811.50 1.980 13,074.22 124,885.72 1,516,360.71 6/1/2013 1,516,360.71 109,873.75 1.980 15,011.97 124,885.72 249,771.44 347,651.12 (97,879.68) 1,406,486.96 12/1/2013 1,406,486.96 110,961.50 1.980 13,924.22 124,885.72 1,295,525.46 6/1/2014 1,295,525.46 112,060.02 1.980 12,825.70 124,885.72 249,771.44 347,651.12 (97,879.68) 1,183,465.44 12/1/2014 1,183,465.44 113,169.41 1.980 11,716.31 124,885.72 1,070,296.03 6/1/2015 1,070,296.03 114,289.79 1.980 10,595.93 124,885.72 249,771.44 347,651.12 (97,879.68) 956,006.24 12/1/2015 956,006.24 115,421.26 1.980 9,464.46 124,885.72 840,584.98 6/1/2016 840,584.98 116,563.93 1.980 8,321.79 124,885.72 249,771.44 347,651.12 (97,879.68) 724,021.05 12/1/2016 724,021.05 117,717.91 1.980 7,167.81 124,885.72 606,303.14 6/1/2017 606,303.14 118,883.32 1.980 6,002.40 124,885.72 249,771.44 178,903.54 70,867.90 487,419.82 12/1/2017 487,419.82 120,060.26 1.980 4,825.46 124,885.72 367,359.56 6/1/2018 367,359.56 121,248.86 1.980 3,636.86 124,885.72 249,771.44 135,283.64 114,487.80 246,110.70 12/1/2018 246,110.70 122,449.22 1.980 2,436.50 124,885.72 123,661.47 6/1/2019 123,661.47 123,661.47 1.980 1,224.25 124,885.72 249,771.44 65,000.00 184,771.44 - 12/1/2019 - - - - - - 6/1/2020 - - - - - - 64,859.44 (64,859.44) - Totals 1,628,172.21 120,227.88 1,748,400.09 1,748,400.09 1,834,651.10 (86,251.01) Present Value (New Lease) 1,628,172.21 Plus: Accrued Interest 37,616.75 Net Present Value (New Lease) 1,665,788.96 Present Value (Prior Lease) 1,737,456.25 Net Present Value (Savings) / Cost (71,667.29) % New Lease 4.40% % Prior Leases 4.51% ---PAGE BREAK--- Page 4 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Lease Amortization Schedule and Savings Calculation (Fire Trucks) Beginning Prior Issue Ending Principal Periodic Fiscal Year Fiscal Year Fiscal Year Principal Date Balance Principal Rate Interest Debt Service Debt Service Debt Service (Savings) / Cost Balance 7/5/2012 842,575.74 842,575.74 12/1/2012 842,575.74 57,862.22 1.980 6,765.88 64,628.10 784,713.52 6/1/2013 784,713.52 56,859.44 1.980 7,768.66 64,628.10 129,256.20 164,729.77 (35,473.57) 727,854.09 12/1/2013 727,854.09 57,422.35 1.980 7,205.76 64,628.10 670,431.74 6/1/2014 670,431.74 57,990.83 1.980 6,637.27 64,628.10 129,256.20 164,729.77 (35,473.57) 612,440.91 12/1/2014 612,440.91 58,564.94 1.980 6,063.17 64,628.10 553,875.98 6/1/2015 553,875.98 59,144.73 1.980 5,483.37 64,628.10 129,256.20 164,729.77 (35,473.57) 494,731.25 12/1/2015 494,731.25 59,730.26 1.980 4,897.84 64,628.10 435,000.98 6/1/2016 435,000.98 60,321.59 1.980 4,306.51 64,628.10 129,256.20 164,729.77 (35,473.57) 374,679.39 12/1/2016 374,679.39 60,918.78 1.980 3,709.33 64,628.10 313,760.62 6/1/2017 313,760.62 61,521.87 1.980 3,106.23 64,628.10 129,256.20 108,619.90 20,636.30 252,238.75 12/1/2017 252,238.75 62,130.94 1.980 2,497.16 64,628.10 190,107.81 6/1/2018 190,107.81 62,746.03 1.980 1,882.07 64,628.10 129,256.20 65,000.00 64,256.20 127,361.77 12/1/2018 127,361.77 63,367.22 1.980 1,260.88 64,628.10 63,994.56 6/1/2019 63,994.56 63,994.56 1.980 633.55 64,628.10 129,256.20 65,000.00 64,256.20 - 12/1/2019 - - - - - - 6/1/2020 - - - - - - 64,859.44 (64,859.44) - Totals 842,575.74 62,217.68 904,793.42 904,793.42 962,398.42 (57,605.00) Present Value (New Lease) 842,575.74 Plus: Accrued Interest 19,371.74 Net Present Value (New Lease) 861,947.48 Present Value (Prior Lease) 905,366.12 Net Present Value (Savings) / Cost (43,418.64) % New Lease 5.15% % Prior Leases 5.29% ---PAGE BREAK--- Page 5 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Lease Amortization Schedule and Savings Calculation (Recycling Trucks) Beginning Prior Issue Ending Principal Periodic Fiscal Year Fiscal Year Fiscal Year Principal Date Balance Principal Rate Interest Debt Service Debt Service Debt Service (Savings) / Cost Balance 7/5/2012 785,596.47 785,596.47 12/1/2012 785,596.47 53,949.28 1.980 6,308.34 60,257.62 731,647.19 6/1/2013 731,647.19 53,014.31 1.980 7,243.31 60,257.62 120,515.24 182,921.35 (62,406.11) 678,632.88 12/1/2013 678,632.88 53,539.15 1.980 6,718.47 60,257.62 625,093.72 6/1/2014 625,093.72 54,069.19 1.980 6,188.43 60,257.62 120,515.24 182,921.35 (62,406.11) 571,024.53 12/1/2014 571,024.53 54,604.48 1.980 5,653.14 60,257.62 516,420.05 6/1/2015 516,420.05 55,145.06 1.980 5,112.56 60,257.62 120,515.24 182,921.35 (62,406.11) 461,274.99 12/1/2015 461,274.99 55,691.00 1.980 4,566.62 60,257.62 405,584.00 6/1/2016 405,584.00 56,242.34 1.980 4,015.28 60,257.62 120,515.24 182,921.35 (62,406.11) 349,341.66 12/1/2016 349,341.66 56,799.14 1.980 3,458.48 60,257.62 292,542.52 6/1/2017 292,542.52 57,361.45 1.980 2,896.17 60,257.62 120,515.24 70,283.64 50,231.60 235,181.07 12/1/2017 235,181.07 57,929.33 1.980 2,328.29 60,257.62 177,251.75 6/1/2018 177,251.75 58,502.83 1.980 1,754.79 60,257.62 120,515.24 70,283.64 50,231.60 118,748.92 12/1/2018 118,748.92 59,082.00 1.980 1,175.61 60,257.62 59,666.92 6/1/2019 59,666.92 59,666.92 1.980 590.70 60,257.62 120,515.24 - 120,515.24 - 12/1/2019 - - - - - - 6/1/2020 - - - - - - - - - Totals 785,596.47 58,010.20 843,606.67 843,606.67 872,252.68 (28,646.01) Present Value (New Lease) 785,596.47 Plus: Accrued Interest 18,245.01 Net Present Value (New Lease) 803,841.48 Present Value (Prior Lease) 832,090.13 Net Present Value (Savings) / Cost (28,248.65) % New Lease 3.60% % Prior Leases 3.67% ---PAGE BREAK--- Page 6 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Lease Amortization Schedule and Savings Calculation (2005 Fire Truck Purchase) Beginning Prior Issue Ending Principal Periodic Fiscal Year Fiscal Year Fiscal Year Principal Date Balance Principal Rate Interest Debt Service Debt Service Debt Service (Savings) / Cost Balance 7/5/2012 208,204.09 208,204.09 12/1/2012 208,204.09 14,298.00 1.980 1,671.88 15,969.88 193,906.08 6/1/2013 193,906.08 14,050.21 1.980 1,919.67 15,969.88 31,939.76 56,109.87 (24,170.11) 179,855.87 12/1/2013 179,855.87 14,189.31 1.980 1,780.57 15,969.88 165,666.56 6/1/2014 165,666.56 14,329.78 1.980 1,640.10 15,969.88 31,939.76 56,109.87 (24,170.11) 151,336.78 12/1/2014 151,336.78 14,471.65 1.980 1,498.23 15,969.88 136,865.13 6/1/2015 136,865.13 14,614.92 1.980 1,354.96 15,969.88 31,939.76 56,109.87 (24,170.11) 122,250.22 12/1/2015 122,250.22 14,759.60 1.980 1,210.28 15,969.88 107,490.61 6/1/2016 107,490.61 14,905.72 1.980 1,064.16 15,969.88 31,939.76 56,109.87 (24,170.11) 92,584.89 12/1/2016 92,584.89 15,053.29 1.980 916.59 15,969.88 77,531.60 6/1/2017 77,531.60 15,202.32 1.980 767.56 15,969.88 31,939.76 - 31,939.76 62,329.28 12/1/2017 62,329.28 15,352.82 1.980 617.06 15,969.88 46,976.46 6/1/2018 46,976.46 15,504.81 1.980 465.07 15,969.88 31,939.76 - 31,939.76 31,471.64 12/1/2018 31,471.64 15,658.31 1.980 311.57 15,969.88 15,813.33 6/1/2019 15,813.33 15,813.33 1.980 156.55 15,969.88 31,939.76 - 31,939.76 - 12/1/2019 - - - - - - 6/1/2020 - - - - - - - - - Totals 208,204.09 15,374.26 223,578.34 223,578.34 224,439.48 (861.14) Present Value (New Lease) 208,204.09 Plus: Accrued Interest 7,143.68 Net Present Value (New Lease) 215,347.77 Net Present Value (Prior Lease) 217,547.71 Net Present Value (Savings) / Cost (2,199.94) % New Lease 1.06% % Prior Lease 1.08% ---PAGE BREAK--- Page 7 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Prior Lease Amortization Schedule and Redemption Provisions (2005 Fire Truck Purchase) Call Premium 0.00% Beginning Ending Principal Fiscal Year Principal Call Defeasance Principal Date Balance Principal Rate Interest Debt Service Called Premium Interest Due Amount Balance 8/12/2011 204,153.85 204,153.85 7/5/2012 204,153.85 204,153.85 8/12/2012 204,153.85 48,147.87 3.900 7,962.00 56,109.87 48,147.87 - 7,962.00 212,115.85 156,005.98 8/12/2013 156,005.98 50,025.64 3.900 6,084.23 56,109.87 50,025.64 - 105,980.34 8/12/2014 105,980.34 51,976.64 3.900 4,133.23 56,109.87 51,976.64 - 54,003.70 8/12/2015 54,003.70 54,003.70 3.900 2,106.17 56,109.87 54,003.70 - - Totals 204,153.85 20,285.63 224,439.48 204,153.85 - 7,962.00 212,115.85 ---PAGE BREAK--- Page 8 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Lease Amortization Schedule and Savings Calculation (2007 Fire Truck Purchase) Beginning Prior Issue Ending Principal Periodic Fiscal Year Fiscal Year Fiscal Year Principal Date Balance Principal Rate Interest Debt Service Debt Service Debt Service (Savings) / Cost Balance 7/5/2012 196,155.21 196,155.21 12/1/2012 196,155.21 13,470.57 1.980 1,575.13 15,045.70 182,684.64 6/1/2013 182,684.64 13,237.12 1.980 1,808.58 15,045.70 30,091.39 43,619.90 (13,528.51) 169,447.52 12/1/2013 169,447.52 13,368.17 1.980 1,677.53 15,045.70 156,079.35 6/1/2014 156,079.35 13,500.51 1.980 1,545.19 15,045.70 30,091.39 43,619.90 (13,528.51) 142,578.84 12/1/2014 142,578.84 13,634.17 1.980 1,411.53 15,045.70 128,944.68 6/1/2015 128,944.68 13,769.14 1.980 1,276.55 15,045.70 30,091.39 43,619.90 (13,528.51) 115,175.53 12/1/2015 115,175.53 13,905.46 1.980 1,140.24 15,045.70 101,270.07 6/1/2016 101,270.07 14,043.12 1.980 1,002.57 15,045.70 30,091.39 43,619.90 (13,528.51) 87,226.95 12/1/2016 87,226.95 14,182.15 1.980 863.55 15,045.70 73,044.80 6/1/2017 73,044.80 14,322.55 1.980 723.14 15,045.70 30,091.39 43,619.90 (13,528.51) 58,722.25 12/1/2017 58,722.25 14,464.35 1.980 581.35 15,045.70 44,257.90 6/1/2018 44,257.90 14,607.54 1.980 438.15 15,045.70 30,091.39 - 30,091.39 29,650.36 12/1/2018 29,650.36 14,752.16 1.980 293.54 15,045.70 14,898.20 6/1/2019 14,898.20 14,898.20 1.980 147.49 15,045.70 30,091.39 - 30,091.39 - 12/1/2019 - - - - - - 6/1/2020 - - - - - - - - - Totals 196,155.21 14,484.54 210,639.74 210,639.74 218,099.50 (7,459.76) Present Value (New Lease) 196,155.21 Plus: Accrued Interest 89.74 Net Present Value (New Lease) 196,244.94 Present Value (Prior Lease) 205,763.61 Net Present Value (Savings) / Cost (9,518.67) % New Lease 4.85% % Prior Lease 4.93% ---PAGE BREAK--- Page 9 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Prior Lease Amortization Schedule and Redemption Provisions (2007 Fire Truck Purchase) Call Premium 0.00% Beginning Ending Principal Fiscal Year Principal Call Accrued Defeasance Principal Date Balance Principal Rate Interest Debt Service Called Premium Interest Amount Balance 7/1/2012 193,209.98 193,209.98 7/5/2012 193,209.98 89.74 193,299.72 193,209.98 7/1/2013 193,209.98 35,543.72 4.180 8,076.18 43,619.90 35,543.72 - 157,666.26 7/1/2014 157,666.26 37,029.45 4.180 6,590.45 43,619.90 37,029.45 - 120,636.81 7/1/2015 120,636.81 38,577.28 4.180 5,042.62 43,619.90 38,577.28 - 82,059.53 7/1/2016 82,059.53 40,189.81 4.180 3,430.09 43,619.90 40,189.81 - 41,869.72 7/1/2017 41,869.72 41,869.72 4.180 1,750.18 43,619.90 41,869.72 - - Totals 193,209.98 24,889.52 218,099.50 193,209.98 - 89.74 193,299.72 ---PAGE BREAK--- Page 10 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Lease Amortization Schedule and Savings Calculation (2009 Fire Truck Purchase) Beginning Prior Issue Ending Principal Periodic Fiscal Year Fiscal Year Fiscal Year Principal Date Balance Principal Rate Interest Debt Service Debt Service Debt Service (Savings) / Cost Balance 7/5/2012 438,216.45 438,216.45 12/1/2012 438,216.45 30,093.65 1.980 3,518.88 33,612.52 408,122.80 6/1/2013 408,122.80 29,572.11 1.980 4,040.42 33,612.52 67,225.05 65,000.00 2,225.05 378,550.70 12/1/2013 378,550.70 29,864.87 1.980 3,747.65 33,612.52 348,685.82 6/1/2014 348,685.82 30,160.53 1.980 3,451.99 33,612.52 67,225.05 65,000.00 2,225.05 318,525.29 12/1/2014 318,525.29 30,459.12 1.980 3,153.40 33,612.52 288,066.17 6/1/2015 288,066.17 30,760.67 1.980 2,851.86 33,612.52 67,225.05 65,000.00 2,225.05 257,305.50 12/1/2015 257,305.50 31,065.20 1.980 2,547.32 33,612.52 226,240.30 6/1/2016 226,240.30 31,372.74 1.980 2,239.78 33,612.52 67,225.05 65,000.00 2,225.05 194,867.55 12/1/2016 194,867.55 31,683.34 1.980 1,929.19 33,612.52 163,184.22 6/1/2017 163,184.22 31,997.00 1.980 1,615.52 33,612.52 67,225.05 65,000.00 2,225.05 131,187.22 12/1/2017 131,187.22 32,313.77 1.980 1,298.75 33,612.52 98,873.45 6/1/2018 98,873.45 32,633.68 1.980 978.85 33,612.52 67,225.05 65,000.00 2,225.05 66,239.77 12/1/2018 66,239.77 32,956.75 1.980 655.77 33,612.52 33,283.02 6/1/2019 33,283.02 33,283.02 1.980 329.50 33,612.52 67,225.05 65,000.00 2,225.05 - 12/1/2019 - - - - - - 6/1/2020 - - - - - - 64,859.44 (64,859.44) - Totals 438,216.45 32,358.88 470,575.33 470,575.33 519,859.44 (49,284.11) Present Value (New Lease) 438,216.45 Plus: Accrued Interest 12,138.32 Net Present Value (New Lease) 450,354.77 Present Value (Prior Lease) 482,054.80 Net Present Value (Savings) / Cost (31,700.03) % New Lease 7.23% % Prior Lease 7.49% ---PAGE BREAK--- Page 11 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Prior Lease Amortization Schedule and Redemption Provisions (2009 Fire Truck Purchase) Call Premium 0.00% Beginning Ending Principal Fiscal Year Principal Call Defeasance Principal Date Balance Principal Rate Interest Debt Service Called Premium Interest Due Amount Balance 11/30/2011 423,429.76 423,429.76 7/5/2012 423,429.76 423,429.76 11/30/2012 423,429.76 44,675.37 4.800 20,324.63 65,000.00 44,675.37 - 20,324.63 443,754.39 378,754.39 11/30/2013 378,754.39 46,819.79 4.800 18,180.21 65,000.00 46,819.79 - 331,934.60 11/30/2014 331,934.60 49,067.14 4.800 15,932.86 65,000.00 49,067.14 - 282,867.46 11/30/2015 282,867.46 51,422.36 4.800 13,577.64 65,000.00 51,422.36 - 231,445.10 11/30/2016 231,445.10 53,890.64 4.800 11,109.36 65,000.00 53,890.64 - 177,554.46 11/30/2017 177,554.46 56,477.39 4.800 8,522.61 65,000.00 56,477.39 - 121,077.07 11/30/2018 121,077.07 59,188.30 4.800 5,811.70 65,000.00 59,188.30 - 61,888.77 11/30/2019 61,888.77 61,888.77 4.800 2,970.67 64,859.44 61,888.77 - - Totals 423,429.76 96,429.68 519,859.44 423,429.76 - 20,324.63 443,754.39 ---PAGE BREAK--- Page 12 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) SLGS Purchase Escrow Cash Flow Schedule (2009 Fire Truck Purchase) Delivery Date 7/5/2012 0.89 Escrow Total Periodic Cash Type Date Requirement Principal Rate Interest Receipt Difference Balance Cert 11/30/2012 443,754.39 443,595.00 0.09 158.60 443,753.60 (0.79) 0.10 Totals 443,754.39 443,595.00 158.60 443,753.60 (0.79) 0.10 ---PAGE BREAK--- Page 13 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Escrow Yield Calculation (2009 Fire Truck Purchase) Purchase Price of Securities 443,595.00 Yield 0.08877 Date Future Value Present Value 7/5/2012 (443,595.00) (443,595.00) 11/30/2012 443,753.60 443,595.00 Totals 158.60 0.00 ---PAGE BREAK--- Page 14 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Lease Amortization Schedule and Savings Calculation (2007 Recycling Trucks Purchase) Beginning Prior Issue Ending Principal Periodic Fiscal Year Fiscal Year Fiscal Year Principal Date Balance Principal Rate Interest Debt Service Debt Service Debt Service (Savings) / Cost Balance 7/5/2012 374,470.17 374,470.17 12/1/2012 374,470.17 25,716.00 1.980 3,007.00 28,722.99 348,754.17 6/1/2013 348,754.17 25,270.33 1.980 3,452.67 28,722.99 57,445.98 70,283.64 (12,837.66) 323,483.85 12/1/2013 323,483.85 25,520.50 1.980 3,202.49 28,722.99 297,963.34 6/1/2014 297,963.34 25,773.15 1.980 2,949.84 28,722.99 57,445.98 70,283.64 (12,837.66) 272,190.19 12/1/2014 272,190.19 26,028.31 1.980 2,694.68 28,722.99 246,161.88 6/1/2015 246,161.88 26,285.99 1.980 2,437.00 28,722.99 57,445.98 70,283.64 (12,837.66) 219,875.89 12/1/2015 219,875.89 26,546.22 1.980 2,176.77 28,722.99 193,329.67 6/1/2016 193,329.67 26,809.03 1.980 1,913.96 28,722.99 57,445.98 70,283.64 (12,837.66) 166,520.64 12/1/2016 166,520.64 27,074.44 1.980 1,648.55 28,722.99 139,446.21 6/1/2017 139,446.21 27,342.47 1.980 1,380.52 28,722.99 57,445.98 70,283.64 (12,837.66) 112,103.73 12/1/2017 112,103.73 27,613.16 1.980 1,109.83 28,722.99 84,490.57 6/1/2018 84,490.57 27,886.54 1.980 836.46 28,722.99 57,445.98 70,283.64 (12,837.66) 56,604.03 12/1/2018 56,604.03 28,162.61 1.980 560.38 28,722.99 28,441.42 6/1/2019 28,441.42 28,441.42 1.980 281.57 28,722.99 57,445.98 - 57,445.98 - 12/1/2019 - - - - - - 6/1/2020 - - - - - - - - - Totals 374,470.17 27,651.71 402,121.88 402,121.88 421,701.84 (19,579.96) Present Value (New Lease) 374,470.17 Plus: Accrued Interest 11,575.62 Net Present Value (New Lease) 386,045.79 Present Value (Prior Lease) 400,093.44 Net Present Value (Savings) / Cost (14,047.66) % New Lease 3.75% % Prior Lease 3.81% ---PAGE BREAK--- Page 15 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Prior Lease Amortization Schedule and Redemption Provisions (2007 Recycling Trucks Purchase) Call Premium 0.00% Beginning Ending Principal Fiscal Year Principal Call Accrued Defeasance Principal Date Balance Principal Rate Interest Debt Service Called Premium Interest Amount Balance 9/21/2011 368,676.43 368,676.43 7/5/2012 368,676.43 11,575.62 380,252.05 368,676.43 9/21/2012 368,676.43 55,610.32 3.980 14,673.32 70,283.64 55,610.32 - 313,066.11 9/21/2013 313,066.11 57,823.61 3.980 12,460.03 70,283.64 57,823.61 - 255,242.50 9/21/2014 255,242.50 60,124.99 3.980 10,158.65 70,283.64 60,124.99 - 195,117.51 9/21/2015 195,117.51 62,517.96 3.980 7,765.68 70,283.64 62,517.96 - 132,599.55 9/21/2016 132,599.55 65,006.18 3.980 5,277.46 70,283.64 65,006.18 - 67,593.37 9/21/2017 67,593.37 67,593.37 3.980 2,690.27 70,283.64 67,593.37 - - Totals 368,676.43 53,025.41 421,701.84 368,676.43 - 11,575.62 380,252.05 ---PAGE BREAK--- Page 16 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Lease Amortization Schedule and Savings Calculation (2008 Recycling Truck Purchase) Beginning Prior Issue Ending Principal Periodic Fiscal Year Fiscal Year Fiscal Year Principal Date Balance Principal Rate Interest Debt Service Debt Service Debt Service (Savings) / Cost Balance 7/5/2012 288,833.63 288,833.63 12/1/2012 288,833.63 19,835.08 1.980 2,319.33 22,154.41 268,998.55 6/1/2013 268,998.55 19,491.32 1.980 2,663.09 22,154.41 44,308.82 79,930.69 (35,621.87) 249,507.23 12/1/2013 249,507.23 19,684.29 1.980 2,470.12 22,154.41 229,822.94 6/1/2014 229,822.94 19,879.16 1.980 2,275.25 22,154.41 44,308.82 79,930.69 (35,621.87) 209,943.77 12/1/2014 209,943.77 20,075.97 1.980 2,078.44 22,154.41 189,867.81 6/1/2015 189,867.81 20,274.72 1.980 1,879.69 22,154.41 44,308.82 79,930.69 (35,621.87) 169,593.09 12/1/2015 169,593.09 20,475.44 1.980 1,678.97 22,154.41 149,117.65 6/1/2016 149,117.65 20,678.15 1.980 1,476.26 22,154.41 44,308.82 79,930.69 (35,621.87) 128,439.50 12/1/2016 128,439.50 20,882.86 1.980 1,271.55 22,154.41 107,556.64 6/1/2017 107,556.64 21,089.60 1.980 1,064.81 22,154.41 44,308.82 - 44,308.82 86,467.04 12/1/2017 86,467.04 21,298.39 1.980 856.02 22,154.41 65,168.66 6/1/2018 65,168.66 21,509.24 1.980 645.17 22,154.41 44,308.82 - 44,308.82 43,659.41 12/1/2018 43,659.41 21,722.18 1.980 432.23 22,154.41 21,937.23 6/1/2019 21,937.23 21,937.23 1.980 217.18 22,154.41 44,308.82 - 44,308.82 - 12/1/2019 - - - - - - 6/1/2020 - - - - - - - - - Totals 288,833.63 21,328.12 310,161.75 310,161.75 319,722.76 (9,561.01) Present Value (New Lease) 288,833.63 Plus: Accrued Interest 5,211.22 Net Present Value (New Lease) 294,044.84 Present Value (Prior Lease) 306,764.63 Net Present Value (Savings) / Cost (12,719.78) % New Lease 4.40% % Prior Lease 4.47% ---PAGE BREAK--- Page 17 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Prior Lease Amortization Schedule and Redemption Provisions (2008 Recycling Toters Purchase) Call Premium 0.00% Beginning Ending Principal Fiscal Year Principal Call Accrued Defeasance Principal Date Balance Principal Rate Interest Debt Service Called Premium Interest Amount Balance 2/19/2012 284,420.63 284,420.63 7/5/2012 284,420.63 5,211.22 289,631.85 284,420.63 2/19/2013 284,420.63 66,136.29 4.850 13,794.40 79,930.69 66,136.29 - 218,284.34 2/19/2014 218,284.34 69,343.90 4.850 10,586.79 79,930.69 69,343.90 - 148,940.44 2/19/2015 148,940.44 72,707.08 4.850 7,223.61 79,930.69 72,707.08 - 76,233.36 2/19/2016 76,233.36 76,233.36 4.850 3,697.33 79,930.69 76,233.36 - - Totals 284,420.63 35,302.13 319,722.76 284,420.63 - 5,211.22 289,631.85 ---PAGE BREAK--- Page 18 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Lease Amortization Schedule and Savings Calculation (2009 Recycling Truck Purchase) Beginning Prior Issue Ending Principal Periodic Fiscal Year Fiscal Year Fiscal Year Principal Date Balance Principal Rate Interest Debt Service Debt Service Debt Service (Savings) / Cost Balance 7/5/2012 122,292.67 122,292.67 12/1/2012 122,292.67 8,398.21 1.980 982.01 9,380.22 113,894.47 6/1/2013 113,894.47 8,252.66 1.980 1,127.56 9,380.22 18,760.43 32,707.02 (13,946.59) 105,641.80 12/1/2013 105,641.80 8,334.36 1.980 1,045.85 9,380.22 97,307.44 6/1/2014 97,307.44 8,416.87 1.980 963.34 9,380.22 18,760.43 32,707.02 (13,946.59) 88,890.57 12/1/2014 88,890.57 8,500.20 1.980 880.02 9,380.22 80,390.37 6/1/2015 80,390.37 8,584.35 1.980 795.86 9,380.22 18,760.43 32,707.02 (13,946.59) 71,806.02 12/1/2015 71,806.02 8,669.34 1.980 710.88 9,380.22 63,136.68 6/1/2016 63,136.68 8,755.16 1.980 625.05 9,380.22 18,760.43 32,707.02 (13,946.59) 54,381.51 12/1/2016 54,381.51 8,841.84 1.980 538.38 9,380.22 45,539.67 6/1/2017 45,539.67 8,929.37 1.980 450.84 9,380.22 18,760.43 - 18,760.43 36,610.30 12/1/2017 36,610.30 9,017.77 1.980 362.44 9,380.22 27,592.52 6/1/2018 27,592.52 9,107.05 1.980 273.17 9,380.22 18,760.43 - 18,760.43 18,485.47 12/1/2018 18,485.47 9,197.21 1.980 183.01 9,380.22 9,288.26 6/1/2019 9,288.26 9,288.26 1.980 91.95 9,380.22 18,760.43 - 18,760.43 - 12/1/2019 - - - - - - 6/1/2020 - - - - - - - - - Totals 122,292.67 9,030.36 131,323.04 131,323.04 130,828.08 494.96 Present Value (New Lease) 122,292.67 Plus: Accrued Interest 1,458.18 Net Present Value (New Lease) 123,750.85 Present Value (Prior Lease) 125,232.06 Net Present Value (Savings) / Cost (1,481.21) % New Lease 1.21% % Prior Lease 1.27% ---PAGE BREAK--- Page 19 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Prior Lease Amortization Schedule and Redemption Provisions (2009 Recycling Truck Purchase) Call Premium 0.00% Beginning Ending Principal Fiscal Year Principal Call Defeasance Principal Date Balance Principal Rate Interest Debt Service Called Premium Interest Due Amount Balance 4/2/2012 116,382.70 116,382.70 7/5/2012 116,382.70 116,382.70 4/2/2013 116,382.70 27,062.46 4.850 5,644.56 32,707.02 27,062.46 - 5,644.56 122,027.26 89,320.24 4/2/2014 89,320.24 28,374.99 4.850 4,332.03 32,707.02 28,374.99 - 60,945.25 4/2/2015 60,945.25 29,751.18 4.850 2,955.84 32,707.02 29,751.18 - 31,194.07 4/2/2016 31,194.07 31,194.07 4.850 1,512.95 32,707.02 31,194.07 - - Totals 116,382.70 14,445.38 130,828.08 116,382.70 - 5,644.56 122,027.26 ---PAGE BREAK--- Page 20 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) SLGS Purchase Escrow Cash Flow Schedule (2009 Recycling Truck Purchase) Delivery Date 7/5/2012 0.61 Escrow Total Periodic Cash Type Date Requirement Principal Rate Interest Receipt Difference Balance Cert 4/2/2013 122,027.26 121,893.00 0.15 133.75 122,026.75 (0.51) 0.10 Totals 122,027.26 121,893.00 133.75 122,026.75 (0.51) 0.10 ---PAGE BREAK--- Page 21 of 21 City of El Cerrito Lease With Option To Purchase (Municipal Lease Refunding Program) Escrow Yield Calculation (2009 Recycling Truck Purchase) Purchase Price of Securities 121,893.00 Yield 0.14792 Date Future Value Present Value 7/5/2012 (121,893.00) (121,893.00) 4/2/2013 122,026.75 121,893.00 Totals 133.75 0.00 ---PAGE BREAK--- Agenda Item No. 7(A) Storm Drain Revenue Bond Attachment 1 RESOLUTION 2012–XX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO AUTHORIZING THE ISSUANCE AND SALE BY PRIVATE PLACEMENT TO JP MORGAN CHASE BANK, NA, NOT TO EXCEED $1,026,800 PRINCIPAL AMOUNT OF 2012 STORM DRAIN REVENUE REFUNDING BONDS AND AUTHORIZING AND DIRECTING RELATED ACTIONS WHEREAS, the City of El Cerrito (the “City”) has previously provided for the issuance, sale and delivery on August 5, 1993, of $6,300,000 principal amount of its 1993 Storm Drain Revenue Bonds (the “Prior Bonds”) pursuant to an Indenture of Trust, date as of July 15, 1993 (the “1993 Indenture”); and WHEREAS, the City has received a proposal from JPMorgan Chase Bank, NA, (the “Bank”), dated May 23, 2012 (the “Proposal”), to purchase by private placement $1,026,800 principal amount of 2012 Storm Drain Revenue Refunding Bonds of the City (the “Refunding Bonds”) for the purpose of providing for the redemption in advance of the scheduled maturity, on August 1, 2012 (the “Redemption Date”) of the remaining outstanding Prior Bonds (the “Proposed Refunding”), as authorized by the 1993 Indenture; and WHEREAS, this City Council of the City (this “City Council”) hereby finds and determines that the Proposed Refunding of the Prior Bonds in accordance with and upon terms and conditions which are substantially the same as those specified in the Proposal provides material benefits to the City, including savings on the interest payable by virtue of a reduced interest rate applicable to the Refunding Bonds, which warrant the implementation of the Proposed Refunding; and WHEREAS, Meyers, Nave, Riback, Silver & Wilson, as bond counsel to the City for the Proposed Refunding, has prepared and submitted to the City Clerk a form of Fiscal Agent Agreement, dated as of June 1, 2012 (the “Fiscal Agent Agreement”), by and between the City and the Administrative Services Director of the City (the “Administrative Services Director”), who is designated in the Fiscal Agent Agreement to perform the prescribed duties of the Fiscal Agent; and WHEREAS, the City wishes by this resolution to authorize the issuance, sale and delivery of the Refunding Bonds pursuant to the Fiscal Agent Agreement by private placement to the Bank on terms and conditions substantially the same as those specified in the Proposal, a copy of which is attached to this resolution as Exhibit A and by this reference incorporated herein. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of El Cerrito as follows: Section 1. Recitals. This City Council hereby finds and determines that the foregoing recitals are true and correct. Section 2. Issuance of Refunding Bonds; Approval of Documents. The City hereby authorizes the issuance of the Refunding Bonds in the aggregate principal amount of not to exceed $1,026,800. The Refunding Bonds shall be issued pursuant to the Fiscal Agent Agreement. ---PAGE BREAK--- Agenda Item No. 7(A) Storm Drain Revenue Bond Attachment 1 Section 3. Fiscal Agent Agreement Approved as to Form; City Manager Authorized to Execute. The Fiscal Agent Agreement is hereby approved in substantially the form on file with the City Clerk. The City Manager (or the designee in writing of the City Manager) is hereby authorized and directed to execute the Fiscal Agent Agreement, subject to such changes therein or additions thereto as the City Manager may approve, such approval to be conclusive established by the execution of the Fiscal Agent Agreement by the City Manager. All references to the City Manager in this Section 3 shall be deemed to include any designee in writing of the City Manager. Without limiting the generality of the foregoing, prior to execution of the Fiscal Agent Agreement, the provisions thereof shall be revised as necessary to provide consistency between the provisions thereof and the Final Proposal (as said term is defined in Section 4 immediately below). Section 4. Terms of Sale and Delivery of Refunding Bonds. The Refunding Bonds shall be sold and delivered to the Bank in accordance with the terms and conditions specified by the Proposal, as modified by the Bank with the approval of the City Manager prior to execution thereof (the “Final Proposal”); provided that any modifications of the Proposal in arriving at the Final Proposal shall not substantially change the terms and conditions of the Proposal, as set forth in Exhibit A hereto; and provided further that the interest rate specified in the Final Proposal shall not exceed the interest rate in the Proposal by more than 35 basis points. Subject to the approval of the Final Proposal by the City Manager, the City Manager is hereby authorized and directed to execute the Final Proposal on behalf of the City; provided that the City Manager shall not be obligated to approve any proposed modifications of the Proposal requested by the Bank which the City Manager, in the City Manager’s sole discretion, deems not to be in the best interest of the City, and in the event that the City Manager and the Bank are unable to agree on modifications of the Proposal to establish the Final Proposal, the City shall have no obligation to issue and deliver the Refunding Bonds. Section 5. Official Actions. The City Manager, the Administrative Services Director, the City Clerk and all other officers of the City are each authorized and directed in the name and on behalf of the City to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate any of the transactions contemplated by the documents approved pursuant to this resolution. Whenever in this resolution any officer of the City is authorized to, execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. Section 6. Effective Date. This resolution shall take effect immediately upon its passage. I CERITFY that at the regular meeting on June 11, 2012 the El Cerrito City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ---PAGE BREAK--- Agenda Item No. 7(A) Storm Drain Revenue Bond Attachment 1 ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City of El Cerrito on June XX, 2012. Cheryl Morse, City Clerk APPROVED: William C. Jones, III Mayor ---PAGE BREAK--- Page 1 of 5 May 23, 2012 Mary Dodge Administrative Services Director/City Treasurer City of El Cerrito 10890 San Pablo Avenue El Cerrito, CA, 94530 RE: Private Placement for $1,026,800 Storm Drain Revenue Refunding Bonds, Series 2012 for The City of El Cerrito (El Cerrito, California) JPMorgan Chase Bank, NA (“Bank”) is pleased to submit this proposal for tax-exempt financing to the City of El Cerrito (the “City” or “Issuer”). This proposal is presented in the form of a non-binding “Term Sheet”, subject to final credit approval, negotiation and acceptance of all terms, conditions and documentation for the transaction. The letter does NOT signify a commitment by Bank to extend credit or purchase the Bonds. TYPE OF FINANCING: Bank Qualified tax-exempt Revenue Refunding Bonds (the “Bonds”) to be issued by the Borrower and privately placed with Bank pursuant to the provisions of federal state and local statutes. Bank will require a single term instrument with mandatory sinking fund maturities, and without DTC registration. Bank intends to hold the Bonds to final maturity. Bank will not require either a Standard & Poor’s rating for the bonds, or the purchase of bond insurance for repayment. FORM OF BONDS: Bank will require a single term bond with sinking fund payments equivalent to the maturity schedule. BANK QUALIFIED: The Bonds will be designated as “bank qualified” tax-exempt obligations under the Code Section 256(b). LEGAL OPINION: Purchase of the Bonds will be subject to the opinion of Meyers, Nave, Riback, Silver & Wilson (Stephen Taber and Sam Sperry), Bond Counsel, to the effect that under existing laws and assuming continuous compliance by the Borrower with certain covenants designed to meet the requirements of the Internal Revenue Code of 1986, as amended (the “Code”), interest on the Bonds will be excluded from gross income of the owners for Federal income tax purposes and is also exempt from California personal income taxes. Purchase of the Bonds will also be subject to a satisfactory opinion of Issuer’s Counsel or Bond Counsel that the Issuer’s Exhibit A Agenda Item No. 7(A) Storm Drain Revenue Bond Attachment 2 ---PAGE BREAK--- Page 2 of 5 obligations under the bond documents are legal, valid, binding and enforceable against the Issuer. USE OF PROCEEDS: Approximately $1,026,800 to provide for a refunding of the City’s outstanding Storm Drain Revenue Bonds, Series 1993, in addition to the cost of issuance of the Bonds. PRINCIPAL AMOUNT: $1,026,800 FINANCING TERM: Thirteen (13) months INTEREST RATE: The interest rate will be fixed immediately prior to closing, based upon an index of the 1-year Treasury Constant Maturity Rate as most recently published by the Federal Reserve Board in the Federal Reserve Statistical Release H.15 (519) (the “Index”) plus 1.503% (the “Margin”) over the Index. However, prior to acceptance, the interest rate may increase if the Bank’s cost of funds increases. Bank’s cost of funds may increase due to a number of factors including, but not limited to, changes in market conditions. Interest will be calculated on a 30/360 basis. To illustrate, if the financing closed on the date of this Term Sheet, the interest rate would be fixed at 1.703 based upon the Index for May 21st , 2012. REPAYMENT TERMS: Two unequal annual payments of principal on August 1st of each year, commencing August 1st, 2012; three semi- annual payments of accrued interest on each February 1st and August 1st (each a “Payment Date”) commencing August 1, 2012, with a final maturity of August 1, 2013. Payments will be handled by acting Fiscal Agent as appointed by the City Council and not be managed by a formal trustee. OPTIONAL REDEMPTION: The Bonds are not subject to redemption, in whole or in part, on any date prior to final maturity. SECURITY: Revenue pledge of the Storm Drain Special Revenue Fund, a Non-Major Governmental Special Revenue Fund, without limitation to such fund by the City, which is a stand alone fund created specifically to receive revenues from the special tax assessment on all taxable property located within the City. The City will assess sufficient charges to satisfy the covenant or make arrangements to obtain funds from other sources. ADDITIONAL PROVISIONS: No other bonds secured by Storm Drain Special Revenue Fund revenues may be issued without written consent of Bank. Bank consent will not be unreasonably withheld, ---PAGE BREAK--- Page 3 of 5 especially where the System is operating profitably, and is in compliance with all of its financial performance covenants. FINANCIAL REPORTING: The City will be required to provide Bank with audited annual financial statements, free of significant deficiencies or material weakness, and prepared by an independent Certified Public Accountant, within 270 days of the close of its fiscal year. Additionally, the City will provide Bank with a copy of its annual budget, as adopted or amended, within 30 days of adoption or amendment. Provide copies of amendments which only affect the repayment source. Other reporting, such as Bank may require from time to time, could include copies of any long-term capital improvement plans. DOCUMENTATION: Documentation shall be prepared by Issuer’s counsel, Meyers, Nave, Riback, Silver & Wilson which firm represents Issuer at Issuer’s expense. This Term Sheet is subject to approval of the documentation by the Bank and its independent Bank counsel, Squire Sanders, in the Bank’s sole discretion, including but not limited to the form of bond resolution and form of bond. BANK COUNSEL FEES: Independent Bank counsel fees and costs not expected to exceed $10,000, to be paid by Issuer regardless of whether a closing occurs. WAIVER OF IMMUNITY: Documentation will provide that Issuer expressly waives and agrees not to claim any such sovereign immunity in any suits or judicial proceedings in connection with the provision of Bank products and services. EXPIRATION: This Term Sheet must be accepted on or before June 7th, 2012 and funded on or before July 5th, 2012. If acceptance or funding has not occurred by the respective dates, the Bank may, at its option and in its sole discretion, terminate the Term Sheet and/or the Interest Rate may be adjusted. MATERIAL CHANGE: Any change (whether material or not) in the amount to be financed or a material change in the financial condition or prospects of the Issuer may constitute a re-pricing event and Bank may, at its option and in its sole discretion, terminate this Term Sheet and/or the Interest Rate may be adjusted. DISPUTE RESOLUTION: As a material inducement for Lender making entering in to this transaction, the Bond documentation shall contain a Dispute Resolution Provision concerning the resolution of any controversies or claims between or among any guarantor, Lender, Borrower or any other parties to the transaction, whether arising in contract, tort or by statute. Except to the ---PAGE BREAK--- Page 4 of 5 extent expressly provided, any Dispute shall, upon the mutual agreement of the parties, acting in their sole and absolute discretion, be resolved by binding arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the "Federal Arbitration Act"). The Federal Arbitration Act will apply even though the Governing Law Section provides that the transaction is governed by the laws of the State. To the extent any Disputes are not arbitrated, the Disputes shall be resolved in court by a judge without a jury, except any Disputes which are brought in California state court shall be determined by judicial reference. Any Dispute which is not arbitrated and which is brought in California state court will be resolved by a general reference to a referee (or a panel of referees) as provided in California Code of Civil Procedure ("CCP") Section 638. The referee (or presiding referee of the panel) shall be a retired Judge or Justice. The referee (or panel of referees) shall be selected by mutual written agreement of the parties. ---PAGE BREAK--- Page 5 of 5 We appreciate your interest in us and look forward to your favorable response. Should you have any questions regarding this Term Sheet, please contact me at (510)420-0757 or via email at [EMAIL REDACTED]. Sincerely, JPMORGAN CHASE BANK, NA Laura Jones Vice President ACCEPTED BY: The City of El Cerrito By: Name: Title: Date: IRS Circular 230 Disclosure: Bank and its affiliates (collectively, “Chase”) do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with Chase of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. ---PAGE BREAK--- El Cerrito, California 2012 Refunding Loan Agreement (1993 Storm Drain Revenue Bonds) Sources and Uses of Funds (Private Placement, BQ, New Money, Fed Rates 5-21-12) Sources of Funds Loan Amount 1,026,800.00 Plus: Accrued Interest - Less: (OID) Plus: OIP - Less: Underwriter's Discount - Net Proceeds at Closing 1,026,800.00 Prior Issue Reserve Fund 534,175.00 Other Source of Funds - Total Prior Issue Funds 534,175.00 Total Sources of Funds 1,560,975.00 Uses of Funds Cost to Payoff Prior Bonds 1,008,174.86 Beginning Escrow Cash Balance - Reserve Fund - Surety Bond Premium - Bond Insurance Premium - Project Fund 534,175.00 Costs of Issuance 18,625.14 Accrued Interest - Total Uses of Funds 1,560,975.00 Adjustment - Assumptions Not Applicable Not Applicable Not Applicable See Attached Schedule Run Date May 21, 2012 Run Time 1:06 PM Page 1 of 6 Attachment 3 Agenda Item No. 7(A) Storm Drain Attachment 3 ---PAGE BREAK--- El Cerrito, California 2012 Refunding Loan Agreement (1993 Storm Drain Revenue Bonds) Costs of Issuance Bond Counsel 3,550.00 Financial Advisor 3,550.00 Investor Counsel 10,000.00 Verification Agent 1,500.00 Rounding Adjustment 25.14 Total 18,625.14 Page 2 of 6 ---PAGE BREAK--- El Cerrito, California 2012 Refunding Loan Agreement (1993 Storm Drain Revenue Bonds) Summary Statistics Arbitrage Yield 1.70379 % TIC 1.70379 % "All-In" TIC 4.99090 % Average Coupon 1.70300 % Net Interest Cost (NIC) 1.70300 % Average Life 0.571 Years Page 3 of 6 ---PAGE BREAK--- El Cerrito, California 2012 Refunding Loan Agreement (1993 Storm Drain Revenue Bonds) Gross Debt Service Schedule and Savings Calculation (NPV Basis) Prior Issue Prior Issue 1.70379 Periodic Fiscal Periodic Fiscal Fiscal Present Date Principal Rate Interest Debt Service Debt Service Debt Service Debt Service (Savings) / Cost Value 7/5/2012 8/1/2012 344,700 1.703 1,262.91 345,962.91 507,087.50 (160,927.29) 2/1/2013 340,100 1.703 5,808.08 345,908.08 691,870.99 13,887.50 520,975.00 170,895.99 328,812.87 8/1/2013 342,000 1.703 2,912.13 344,912.13 518,887.50 (170,839.19) 2/1/2014 344,912.13 518,887.50 (173,975.37) Totals 1,026,800 9,983.12 1,036,783.12 1,036,783.12 1,039,862.50 1,039,862.50 (3,079.38) (2,953.61) Plus: Prior Issue Reserve Fund 534,175.00 534,175.00 Plus: Prior Issue Other Funds - - Less: New Issue Reserve Fund - - Less: New Issue Project Fund (534,175.00) (534,175.00) Net Total (3,079.38) (2,953.61) Savings % New 0.29% Savings % Prior 0.30% Page 4 of 6 ---PAGE BREAK--- El Cerrito, California 2012 Refunding Loan Agreement (1993 Storm Drain Revenue Bonds) Net Debt Service Schedule and Savings Calculation (Cash Flow NPV Basis New Issue Reserve Fund - Prior Issue Reserve Fund 534,175.00 Investment Rate - Investment Rate 0.38300 New Issue Less: New Issue New Issue Prior Issue Less: Prior Issue Prior Issue 1.70379 Periodic RF Earnings Net Periodic Net Fiscal Periodic RF Earnings Net Periodic Net Fiscal Fiscal Present Date Debt Service And Corpus Debt Service Debt Service Debt Service And Corpus Debt Service Debt Service (Savings) / Cost Value 7/5/2012 8/1/2012 345,962.91 - 345,962.91 507,087.50 (5,042.32) 502,045.18 (155,891.14) 2/1/2013 345,908.08 - 345,908.08 691,870.99 13,887.50 (13,275.15) 612.35 502,657.54 189,213.45 341,959.76 8/1/2013 344,912.13 - 344,912.13 518,887.50 (518,887.50) - 338,694.55 2/1/2014 344,912.13 - 344,912.13 Totals 1,036,783.12 - 1,036,783.12 1,036,783.12 1,039,862.50 (537,204.96) 502,657.54 502,657.54 534,125.58 524,763.16 Plus: Prior Issue Other Funds - - Less: New Issue Project Fund (534,175.00) (534,175.00) Net Total (49.42) (9,411.84) Savings % New 0.92% Savings % Prior 0.96% Page 5 of 6 ---PAGE BREAK--- El Cerrito, California 2012 Refunding Loan Agreement (1993 Storm Drain Revenue Bonds) Prior Issue Debt Service Schedule and Redemption Provisions 7/5/2012 0.00% Periodic Fiscal Called Call Periodic Defeasance Date Principal Rate Interest Debt Service Debt Service Bonds Premium Debt Service Debt Service 2/1/2012 7/5/2012 23,174.86 1,008,174.86 8/1/2012 480,000 5.500 27,087.50 507,087.50 480,000 - 2/1/2013 13,887.50 13,887.50 520,975.00 8/1/2013 505,000 5.500 13,887.50 518,887.50 505,000 - 2/1/2014 518,887.50 Totals 985,000 54,862.50 1,039,862.50 1,039,862.50 985,000 - 23,174.86 1,008,174.86 Page 6 of 6 ---PAGE BREAK--- Agenda Item No. 7(A) Recycling Facility Lease Attachment 1 1 RESOLUTION 2012–XX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO APPROVING THE FORMS OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A SITE LEASE AND A LEASE PURCHASE AGREEMENT FOR THE PROPOSED REFUNDING OF IMPROVEMENTS TO THE RECYCLING CENTER AND AUTHORIZING RELATED ACTIONS WHEREAS, on November 1, 2010 the City of El Cerrito (the “City”), entered into that certain site lease and lease purchase agreement with Holman Capital Corporation for the purpose of financing (the “Prior Financing”) a portion of the cost of construction of a recycling facility (the “Project”); and WHEREAS, the City has received a proposal from JPMorgan Chase Bank, NA, (the “Bank”), dated May 23, 2012 (the “Proposal”), to purchase by private placement not to exceed $3,458,600 amount of rental payments (the “Purchase Option Price”) for the purpose of providing for the refinancing of the Prior Financing (the “Proposed Refunding”); and WHEREAS, the Proposed Refunding will be accomplished by the City entering into a site lease (the “Site Lease”) with the City of El Cerrito Public Financing Authority (the “Authority”), whereby the City will lease certain real property owned by the City to the Authority in exchange for an advance rental, and (ii) the Authority’s leasing the property leased under the Site Lease back to the City pursuant to a leaseback agreement (the “Lease Purchase Agreement”), under which the City will be obligated to make Rental Payments to the Authority; and WHEREAS, Meyers, Nave, Riback, Silver & Wilson, as bond counsel to the City (“Bond Counsel”) has prepared and submitted to the City Clerk a form of the Site Lease and the Lease Purchase Agreement, which are incorporated herein by reference, for review and approval; and WHEREAS, the City wishes by this resolution to authorize the Proposed Refunding pursuant to the Site Lease and the Lease Purchase Agreement by private placement to the Bank on terms and conditions substantially the same as those specified in the Proposal, a copy of which is attached to this resolution as Exhibit A and by this reference incorporated herein. NOW THEREFORE, BE IT RESOLVED by City Council of the City of El Cerrito as follows: Section 1. Recitals. This City Council finds and determines that all of the above recitals are true and correct. Section 2. Authorization of Officers to Execute and Deliver Documents. The City Council hereby approves the Site Lease and the Lease Purchase Agreement in substantially the forms on file with the City Clerk and authorizes and directs the and City Manager or his designee (the “Designated Officers”), on behalf of the City, to execute and deliver the Site Lease and the Lease Purchase Agreement in such forms with such changes, insertions, revisions, corrections, or amendments as shall be approved by the officer executing them, in consultation with Bond Counsel; provided that the total principal component of the City’s rental payments shall not ---PAGE BREAK--- Agenda Item No. 7(A) Recycling Facility Lease Attachment 1 2 exceed $3,458,600. The execution of the foregoing by a Designated Officer shall constitute conclusive evidence of such officer’s and the City Council’s approval of any such changes, insertions, revisions, corrections, or amendments to the respective forms of agreements presented to this meeting. Section 3. Terms of Sale. The Proposed Refunding shall be placed with the Bank in accordance with the terms and conditions specified by the Proposal, as modified by the Bank with the approval of the City Manager prior to execution thereof (the “Final Proposal”); provided that any modifications of the Proposal in arriving at the Final Proposal shall not substantially change the terms and conditions of the Proposal, as set forth in Exhibit A hereto. Subject to the approval of the City Manager to the provisions of the Final Proposal, the City Manager is hereby authorized and directed to execute the Final Proposal on behalf of the City; provided that the City Manager shall not be obligated to approve any proposed modifications of the Proposal requested by the Bank, and in the event that the City Manager and the Bank are unable to agree on modifications of the Proposal to establish the Final Proposal, the City shall have no obligation to issue and deliver the Refunding Bonds; and provided further that the interest rate specified in the Final Proposal shall not exceed the interest rate specified in the Proposal by more than 35 basis points. Section 4. General Authorization. The Designated Officers and other officers of the City Council and the City, and each of them individually, are hereby authorized and directed, for and in the name of and on behalf of the City, to execute and deliver any and all documents, to do any and all things and take any and all actions that may be necessary or advisable, in their discretion, in order to consummate the financing and to effect the purposes of this resolution. All actions heretofore taken by officers, employees, and agents of the City that are in conformity with the purposes and intent of this resolution are hereby approved, confirmed, and ratified. Section 5. Effective Date. This resolution shall take effect immediately upon its adoption. I CERTIFY that at the regular meeting on June 11, 2012 the El Cerrito City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City of El Cerrito on June XX, 2012 Cheryl Morse, City Clerk APPROVED: William C. Jones, III Mayor ---PAGE BREAK--- Page 1 of 5 May 23, 2012 Mary Dodge Administrative Services Director/City Treasurer City of El Cerrito 10890 San Pablo Avenue El Cerrito, CA, 94530 RE: Private Placement for $3,458,600 Recycling Facility Revenue Refunding Bonds, Series 2012 for The City of El Cerrito (El Cerrito, California) JPMorgan Chase Bank, NA (“Bank”) is pleased to submit this proposal for tax-exempt financing to the City of El Cerrito (the “City” or “Issuer”). This proposal is presented in the form of a non-binding “Term Sheet”, subject to final credit approval, negotiation and acceptance of all terms, conditions and documentation for the transaction. The letter does NOT signify a commitment by Bank to extend credit or purchase the Bonds. TYPE OF FINANCING: Bank Qualified tax-exempt Revenue Refunding Bonds (the “Bonds”) to be issued by the Borrower and privately placed with Bank pursuant to the provisions of federal state and local statutes. Bank will require a single term instrument with mandatory sinking fund maturities, and without DTC registration. Bank intends to hold the Bonds to final maturity. Bank will not require either a Standard & Poor’s rating for the bonds, or the purchase of bond insurance for repayment. FORM OF BONDS: Bank will require a single term bond with sinking fund payments equivalent to the maturity schedule. BANK QUALIFIED: The Bonds will be designated as “bank qualified” tax-exempt obligations under the Code Section 256(b). LEGAL OPINION: Purchase of the Bonds will be subject to the opinion of Meyers, Nave, Riback, Silver & Wilson (Stephen Taber and Sam Sperry), Bond Counsel, to the effect that under existing laws and assuming continuous compliance by the Borrower with certain covenants designed to meet the requirements of the Internal Revenue Code of 1986, as amended (the “Code”), interest on the Bonds will be excluded from gross income of the owners for Federal income tax purposes and is also exempt from California personal income taxes. Purchase of the Bonds will also be subject to a satisfactory opinion of Issuer’s Counsel or Bond Counsel that the Issuer’s Exhibit A Recycling Facility Lease Attachment 2 ---PAGE BREAK--- Page 2 of 5 obligations under the bond documents are legal, valid, binding and enforceable against the Issuer. USE OF PROCEEDS: Approximately $3,458,600 to provide for a refunding of the City’s outstanding Lease Purchase Agreement and related Site Lease, in addition to the cost of issuance of the Bonds. PRINCIPAL AMOUNT: $3,458,600 FINANCING TERM: Thirteen and a half (13.5) years or 162 months INTEREST RATE: The interest rate will be fixed immediately prior to closing, based upon an index of the 10-year Treasury Constant Maturity Rate as most recently published by the Federal Reserve Board in the Federal Reserve Statistical Release H.15 (519) (the “Index”) plus 0.756% (the “Margin”) over the Index. However, prior to acceptance, the interest rate may increase if the Bank’s cost of funds increases. Bank’s cost of funds may increase due to a number of factors including, but not limited to, changes in market conditions. Interest will be calculated on a 30/360 basis. To illustrate, if the financing closed on the date of this Term Sheet, the interest rate would be fixed at 2.496 based upon the Index for May 21st , 2012. REPAYMENT TERMS: Fifty-four (54) quarterly payments of principal and accrued interest on each April 15th , July 15th , October 15th and Jan 15th (each a “Payment Date”) commencing October 15th , 2012, with a final maturity of October 15th , 2025. OPTIONAL REDEMPTION: The Bonds are not subject to optional redemption, in whole or in part, on any date prior to October 1, 2017. Thereafter, redemption at City’s option may be made on any payment date, at the price of par plus accrued interest, with thirty (30) days written notice to Bank via US mail. SECURITY: Revenue pledge of the Integrated Waste Management System Fund, without limitation to such fund by the City, which is a Major Proprietary Fund of the City that accounts for the City’s recycling collection services. ADDITIONAL PROVISIONS: No other bonds secured by Integrated Waste Management System revenues may be issued without written consent of Bank. Bank consent will not be unreasonably withheld, especially where the System is operating profitably, is in compliance with all of its financial performance covenants, and covers current outstanding debt at least 1.25x. ---PAGE BREAK--- Page 3 of 5 FINANCIAL REPORTING: The City will be required to provide Bank with audited annual financial statements, free of significant deficiencies or material weakness, and prepared by an independent Certified Public Accountant, within 270 days of the close of its fiscal year. Additionally, the City will provide Bank with a copy of its annual budget, as adopted or amended, within 30 days of adoption or amendment. Provide copies of budget amendments which only affect the repayment source. Other reporting, such as Bank may require from time to time, could include copies of any long-term capital improvement plans. DOCUMENTATION: Documentation shall be prepared by Issuer’s counsel, Meyers, Nave, Riback, Silver & Wilson which firm represents Issuer at Issuer’s expense. This Term Sheet is subject to approval of the documentation by the Bank and its independent Bank counsel, Squire Sanders, in the Bank’s sole discretion, including but not limited to the form of bond resolution and form of bond. BANK COUNSEL FEES: Independent Bank counsel fees and costs not expected to exceed $10,000, to be paid by Issuer regardless of whether a closing occurs. WAIVER OF IMMUNITY: Documentation will provide that Issuer expressly waives and agrees not to claim any such sovereign immunity in any suits or judicial proceedings in connection with the provision of Bank products and services. EXPIRATION: This Term Sheet must be accepted on or before June 7th, 2012 and funded on or before July 15th, 2012 or TBD. If acceptance or funding has not occurred by the respective dates, the Bank may, at its option and in its sole discretion, terminate the Term Sheet and/or the Interest Rate may be adjusted. MATERIAL CHANGE: Any change (whether material or not) in the amount to be financed or a material change in the financial condition or prospects of the Issuer may constitute a re-pricing event and Bank may, at its option and in its sole discretion, terminate this Term Sheet and/or the Interest Rate may be adjusted. DISPUTE RESOLUTION: As a material inducement for Lender making entering in to this transaction, the Bond documentation shall contain a Dispute Resolution Provision concerning the resolution of any controversies or claims between or among any guarantor, Lender, Borrower or any other parties to the transaction, whether arising in contract, tort or by statute. Except to the extent expressly provided, any Dispute shall, upon the mutual agreement of the parties, acting in their sole and absolute ---PAGE BREAK--- Page 4 of 5 discretion, be resolved by binding arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the "Federal Arbitration Act"). The Federal Arbitration Act will apply even though the Governing Law Section provides that the transaction is governed by the laws of the State. To the extent any Disputes are not arbitrated, the Disputes shall be resolved in court by a judge without a jury, except any Disputes which are brought in California state court shall be determined by judicial reference. Any Dispute which is not arbitrated and which is brought in California state court will be resolved by a general reference to a referee (or a panel of referees) as provided in California Code of Civil Procedure ("CCP") Section 638. The referee (or presiding referee of the panel) shall be a retired Judge or Justice. The referee (or panel of referees) shall be selected by mutual written agreement of the parties. ---PAGE BREAK--- Page 5 of 5 We appreciate your interest in us and look forward to your favorable response. Should you have any questions regarding this Term Sheet, please contact me at (510)420-0757 or via email at [EMAIL REDACTED]. Sincerely, JPMORGAN CHASE BANK, NA Laura Jones Vice President ACCEPTED BY: The City of El Cerrito By: Name: Title: Date: IRS Circular 230 Disclosure: Bank and its affiliates (collectively, “Chase”) do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with Chase of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. ---PAGE BREAK--- El Cerrito Public Financing Authority, California 2012 Refunding Loan Agreement (Holman Capital Lease Purchase) Sources and Uses of Funds (Private Placement, BQ, Fed Rates 5-21-12) Sources of Funds Loan Amount 3,458,600.00 Plus: Accrued Interest - Less: (OID) Plus: OIP - Less: Underwriter's Discount - Net Proceeds at Closing 3,458,600.00 Prior Issue Reserve Fund - Other Source of Funds - Total Prior Issue Funds - Total Sources of Funds 3,458,600.00 Uses of Funds Cost to Payoff Lease 3,411,556.06 Beginning Escrow Cash Balance - Reserve Fund - Surety Bond Premium - Bond Insurance Premium - Costs of Issuance 47,043.94 Accrued Interest - Total Uses of Funds 3,458,600.00 Adjustment - Assumptions Not Applicable Not Applicable Not Applicable See Attached Schedule Run Date May 21, 2012 Run Time 1:06 PM Page 1 of 5 Attachment 3 Agenda Item No. 7(A) Recycling Facility Attachment 3 ---PAGE BREAK--- El Cerrito Public Financing Authority, California 2012 Refunding Loan Agreement (Holman Capital Lease Purchase) Costs of Issuance Bond Counsel 15,000.00 Financial Advisor 15,000.00 Investor Counsel 10,000.00 Trustee 3,500.00 Title Insurance 3,500.00 Rounding Adjustment 43.94 Total 47,043.94 Page 2 of 5 ---PAGE BREAK--- El Cerrito Public Financing Authority, California 2012 Refunding Loan Agreement (Holman Capital Lease Purchase) Summary Statistics Arbitrage Yield 2.49600 % TIC 2.49600 % "All-In" TIC 2.71235 % Average Coupon 2.49600 % Net Interest Cost (NIC) 2.49600 % Average Life 7.113 Years Page 3 of 5 ---PAGE BREAK--- El Cerrito Public Financing Authority, California 2012 Refunding Loan Agreement (Holman Capital Lease Purchase) Gross Debt Service Schedule and Savings Calculation (NPV Basis) Prior Issue Prior Issue 2.49600 Periodic Fiscal Periodic Fiscal Fiscal Present Date Principal Rate Interest Debt Service Debt Service Debt Service Debt Service (Savings) / Cost Value 7/1/2012 10/1/2012 55,300 2.496 21,581.66 76,881.66 80,224.75 (3,315.50) 1/1/2013 55,600 2.496 21,236.59 76,836.59 80,224.75 (3,332.47) 4/1/2013 55,900 2.496 20,889.65 76,789.65 80,224.75 (3,350.77) 7/1/2013 56,300 2.496 20,540.83 76,840.83 307,348.74 80,224.75 320,899.00 (13,550.26) (3,273.61) 10/1/2013 56,600 2.496 20,189.52 76,789.52 80,224.75 (3,295.82) 1/1/2014 57,000 2.496 19,836.34 76,836.34 80,224.75 (3,224.08) 4/1/2014 57,400 2.496 19,480.66 76,880.66 80,224.75 (3,155.66) 7/1/2014 57,700 2.496 19,122.48 76,822.48 307,328.99 80,224.75 320,899.00 (13,570.01) (3,184.06) 10/1/2014 58,100 2.496 18,762.43 76,862.43 80,224.75 (3,120.71) 1/1/2015 58,400 2.496 18,399.89 76,799.89 80,224.75 (3,152.53) 4/1/2015 58,800 2.496 18,035.47 76,835.47 80,224.75 (3,094.03) 7/1/2015 59,200 2.496 17,668.56 76,868.56 307,366.35 80,224.75 320,899.00 (13,532.65) (3,038.55) 10/1/2015 59,500 2.496 17,299.15 76,799.15 80,224.75 (3,075.80) 1/1/2016 59,900 2.496 16,927.87 76,827.87 80,224.75 (3,024.84) 4/1/2016 60,300 2.496 16,554.10 76,854.10 80,224.75 (2,976.72) 7/1/2016 60,700 2.496 16,177.82 76,877.82 307,358.94 80,224.75 320,899.00 (13,540.06) (2,931.38) 10/1/2016 61,000 2.496 15,799.06 76,799.06 80,224.75 (2,975.61) 1/1/2017 61,400 2.496 15,418.42 76,818.42 80,224.75 (2,934.38) 4/1/2017 61,800 2.496 15,035.28 76,835.28 80,224.75 (2,895.76) 7/1/2017 62,200 2.496 14,649.65 76,849.65 307,302.40 80,224.75 320,899.00 (13,596.60) (2,859.69) 10/1/2017 62,600 2.496 14,261.52 76,861.52 80,224.75 (2,826.12) 1/1/2018 63,000 2.496 13,870.90 76,870.90 80,224.75 (2,794.99) 4/1/2018 63,400 2.496 13,477.78 76,877.78 80,224.75 (2,766.24) 7/1/2018 63,800 2.496 13,082.16 76,882.16 307,492.35 80,224.75 320,899.00 (13,406.65) (2,739.82) 10/1/2018 64,100 2.496 12,684.05 76,784.05 80,224.75 (2,796.97) 1/1/2019 64,600 2.496 12,284.06 76,884.06 80,224.75 (2,693.26) 4/1/2019 65,000 2.496 11,880.96 76,880.96 80,224.75 (2,673.52) 7/1/2019 65,400 2.496 11,475.36 76,875.36 307,424.43 80,224.75 320,899.00 (13,474.57) (2,655.90) 10/1/2019 65,800 2.496 11,067.26 76,867.26 80,224.75 (2,640.35) 1/1/2020 66,200 2.496 10,656.67 76,856.67 80,224.75 (2,626.82) 4/1/2020 66,600 2.496 10,243.58 76,843.58 80,224.75 (2,615.27) 7/1/2020 67,000 2.496 9,828.00 76,828.00 307,395.52 80,224.75 320,899.00 (13,503.48) (2,605.65) 10/1/2020 67,400 2.496 9,409.92 76,809.92 80,224.75 (2,597.90) 1/1/2021 67,800 2.496 8,989.34 76,789.34 80,224.75 (2,591.99) 4/1/2021 68,300 2.496 8,566.27 76,866.27 80,224.75 (2,513.04) 7/1/2021 68,700 2.496 8,140.08 76,840.08 307,305.62 80,224.75 320,899.00 (13,593.38) (2,511.74) 10/1/2021 69,100 2.496 7,711.39 76,811.39 80,224.75 (2,512.13) 1/1/2022 69,600 2.496 7,280.21 76,880.21 80,224.75 (2,441.17) 4/1/2022 70,000 2.496 6,845.90 76,845.90 80,224.75 (2,445.86) 7/1/2022 70,400 2.496 6,409.10 76,809.10 307,346.61 80,224.75 320,899.00 (13,552.39) (2,452.10) 10/1/2022 70,900 2.496 5,969.81 76,869.81 80,224.75 (2,388.64) 1/1/2023 71,300 2.496 5,527.39 76,827.39 80,224.75 (2,398.88) 4/1/2023 71,800 2.496 5,082.48 76,882.48 80,224.75 (2,340.51) 7/1/2023 72,200 2.496 4,634.45 76,834.45 307,414.13 80,224.75 320,899.00 (13,484.87) (2,354.56) 10/1/2023 72,700 2.496 4,183.92 76,883.92 80,224.75 (2,301.06) 1/1/2024 73,100 2.496 3,730.27 76,830.27 80,224.75 (2,318.72) 4/1/2024 73,600 2.496 3,274.13 76,874.13 80,224.75 (2,269.87) 7/1/2024 74,000 2.496 2,814.86 76,814.86 307,403.18 80,224.75 320,899.00 (13,495.82) (2,290.96) 10/1/2024 74,500 2.496 2,353.10 76,853.10 80,224.75 (2,246.58) 1/1/2025 74,900 2.496 1,888.22 76,788.22 80,224.75 (2,270.91) 4/1/2025 75,400 2.496 1,420.85 76,820.85 80,224.75 (2,230.79) 7/1/2025 75,900 2.496 950.35 76,850.35 307,312.53 80,224.75 320,899.00 (13,586.47) (2,193.21) 10/1/2025 76,400 2.496 476.74 76,876.74 80,224.75 (2,158.11) 1/1/2026 4/1/2026 7/1/2026 76,876.74 80,224.75 (3,348.01) Totals 3,458,600 614,076.53 4,072,676.53 4,072,676.53 4,251,911.75 4,251,911.75 (179,235.22) (144,475.60) Plus: Prior Issue Reserve Fund - - Plus: Prior Issue Other Funds - - Less: New Issue Reserve Fund - - Net Total (179,235.22) (144,475.60) Savings % New 4.18% Savings % Prior 4.36% Page 4 of 5 ---PAGE BREAK--- El Cerrito Public Financing Authority, California 2012 Refunding Loan Agreement (Holman Capital Lease Purchase) Prior Issue Debt Service Schedule and Redemption Provisions 7/1/2012 3.00% Periodic Fiscal Called Call Periodic Defeasance Date Principal Rate Interest Debt Service Debt Service Bonds Premium Debt Service Debt Service 7/1/2012 - 3,411,556.06 10/1/2012 48,096.50 3.880 32,128.25 80,224.75 48,096.50 1,442.90 1/1/2013 48,563.04 3.880 31,661.71 80,224.75 48,563.04 1,456.89 4/1/2013 49,034.10 3.880 31,190.65 80,224.75 49,034.10 1,471.02 7/1/2013 49,509.73 3.880 30,715.02 80,224.75 320,899.00 49,509.73 1,485.29 10/1/2013 49,989.98 3.880 30,234.77 80,224.75 49,989.98 1,499.70 1/1/2014 50,474.88 3.880 29,749.87 80,224.75 50,474.88 1,514.25 4/1/2014 50,964.49 3.880 29,260.26 80,224.75 50,964.49 1,528.93 7/1/2014 51,458.84 3.880 28,765.91 80,224.75 320,899.00 51,458.84 1,543.77 10/1/2014 51,957.99 3.880 28,266.76 80,224.75 51,957.99 1,558.74 1/1/2015 52,461.98 3.880 27,762.77 80,224.75 52,461.98 1,573.86 4/1/2015 52,970.87 3.880 27,253.88 80,224.75 52,970.87 1,589.13 7/1/2015 53,484.68 3.880 26,740.07 80,224.75 320,899.00 53,484.68 1,604.54 10/1/2015 54,003.48 3.880 26,221.27 80,224.75 54,003.48 1,620.10 1/1/2016 54,527.32 3.880 25,697.43 80,224.75 54,527.32 1,635.82 4/1/2016 55,056.23 3.880 25,168.52 80,224.75 55,056.23 1,651.69 7/1/2016 55,590.28 3.880 24,634.47 80,224.75 320,899.00 55,590.28 1,667.71 10/1/2016 56,129.50 3.880 24,095.25 80,224.75 56,129.50 1,683.89 1/1/2017 56,673.96 3.880 23,550.79 80,224.75 56,673.96 1,700.22 4/1/2017 57,223.70 3.880 23,001.05 80,224.75 57,223.70 1,716.71 7/1/2017 57,778.77 3.880 22,445.98 80,224.75 320,899.00 57,778.77 1,733.36 10/1/2017 58,339.22 3.880 21,885.53 80,224.75 58,339.22 1,750.18 1/1/2018 58,905.11 3.880 21,319.64 80,224.75 58,905.11 1,767.15 4/1/2018 59,476.49 3.880 20,748.26 80,224.75 59,476.49 1,784.29 7/1/2018 60,053.41 3.880 20,171.34 80,224.75 320,899.00 60,053.41 1,801.60 10/1/2018 60,635.93 3.880 19,588.82 80,224.75 60,635.93 1,819.08 1/1/2019 61,224.10 3.880 19,000.65 80,224.75 61,224.10 1,836.72 4/1/2019 61,817.97 3.880 18,406.78 80,224.75 61,817.97 1,854.54 7/1/2019 62,417.61 3.880 17,807.14 80,224.75 320,899.00 62,417.61 1,872.53 10/1/2019 63,023.06 3.880 17,201.69 80,224.75 63,023.06 1,890.69 1/1/2020 63,634.38 3.880 16,590.37 80,224.75 63,634.38 1,909.03 4/1/2020 64,251.64 3.880 15,973.11 80,224.75 64,251.64 1,927.55 7/1/2020 64,874.88 3.880 15,349.87 80,224.75 320,899.00 64,874.88 1,946.25 10/1/2020 65,504.16 3.880 14,720.59 80,224.75 65,504.16 1,965.12 1/1/2021 66,139.55 3.880 14,085.20 80,224.75 66,139.55 1,984.19 4/1/2021 66,781.11 3.880 13,443.64 80,224.75 66,781.11 2,003.43 7/1/2021 67,428.88 3.880 12,795.87 80,224.75 320,899.00 67,428.88 2,022.87 10/1/2021 68,082.94 3.880 12,141.81 80,224.75 68,082.94 2,042.49 1/1/2022 68,743.35 3.880 11,481.40 80,224.75 68,743.35 2,062.30 4/1/2022 69,410.16 3.880 10,814.59 80,224.75 69,410.16 2,082.30 7/1/2022 70,083.44 3.880 10,141.31 80,224.75 320,899.00 70,083.44 2,102.50 10/1/2022 70,763.25 3.880 9,461.50 80,224.75 70,763.25 2,122.90 1/1/2023 71,449.65 3.880 8,775.10 80,224.75 71,449.65 2,143.49 4/1/2023 72,142.71 3.880 8,082.04 80,224.75 72,142.71 2,164.28 7/1/2023 72,842.50 3.880 7,382.25 80,224.75 320,899.00 72,842.50 2,185.28 10/1/2023 73,549.07 3.880 6,675.68 80,224.75 73,549.07 2,206.47 1/1/2024 74,262.50 3.880 5,962.25 80,224.75 74,262.50 2,227.88 4/1/2024 74,982.84 3.880 5,241.91 80,224.75 74,982.84 2,249.49 7/1/2024 75,710.17 3.880 4,514.58 80,224.75 320,899.00 75,710.17 2,271.31 10/1/2024 76,444.56 3.880 3,780.19 80,224.75 76,444.56 2,293.34 1/1/2025 77,186.08 3.880 3,038.67 80,224.75 77,186.08 2,315.58 4/1/2025 77,934.78 3.880 2,289.97 80,224.75 77,934.78 2,338.04 7/1/2025 78,690.75 3.880 1,534.00 80,224.75 320,899.00 78,690.75 2,360.72 10/1/2025 79,453.78 3.880 770.97 80,224.75 79,453.78 2,383.61 1/1/2026 4/1/2026 7/1/2026 80,224.75 Totals 3,312,190.35 939,721.40 4,251,911.75 4,251,911.75 3,312,190.35 99,365.71 - 3,411,556.06 Page 5 of 5