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Reso to Defease, Refund and Amend Bond Series 1994A, 2004A, 1998, & 2007 June 03, 2014 Page 3 Following the selection of a private placement strategy, a request for proposal to refund a portion of the 1994A Bonds and all of the 1998 COP's (together, the "Bonds ") was issued by Fieldman, Rolapp, & Associates (financial advisor). A joint proposal from Western Alliance, Compass Bank, Capital One and additional investors if warranted (together the "Private Placement Providers ") provided the best interest rate and terms for the 1994 component of the transaction. In addition, the proposal from Capital One included the best interest rate and terms for the refunding of the 1998 COP's. The Private Placement Providers have issued a commitment to provide the City with the funds to retire the outstanding Bonds and issue a new lease at an interest rate of 3.75% for the refunding of the 1998 COPs and 3.36% for the 1994A Bonds. The 3.75% is guaranteed or locked for 30 days through June 15, 2014, whereas the 3.36% rate reflects current market conditions as of May 21, 2014, and is subject to fluctuation until final Council approval is obtained and the rate is locked. In addition, by selecting Capital One as the provider for the 1998 COPS, Capital One has offered to reduce the interest rate for the current lease structure (City Hall Parking Structure Lease Agreement) from 4.78% to 3.6 %. As a private placement refinancing, the covenants to which the City agreed to upon the original financing are no longer in effect. Since the Private Placement Providers do not require a debt service reserve, the funds encumbered under the original reserve account in effect will be unencumbered and available to pay down the principal. Furthermore, the private placement offering has inherent lower issuance costs, since it does not require that the City obtain a rating or prepare and distribute an offering document. To "right- size" the leased properties with the par amount of the refunding, the City is proposing to secure the 2014 Lease with the City Hall and the Ross Annex buildings. The undefeased portion of the 1994A Bonds will continue to be secured by the Police Jail Facility. The remainder of the originally pledged assets (the Police Administration Building, the parking garage and the tunnel) will be released and no longer considered pledged assets. In addition, following the completion of this transaction, the Corporation Yard will also be released and no longer considered a pledged asset to the 1998 COP's. The substitution of leased properties does not impact the overall transaction, nor does it change in any way the ongoing operations of the City. However, the released or unpledged assets will now be available to use in the future for other lease financings. FISCAL IMPACT Total savings are estimated at over $2 million during the term of all three transactions. Savings will be used to accelerate reaching the established goal of a 20% General Fund reserve. Francisco Gutierrez Executive Director Finance and Management Services Agency Exhibit A — Listing of documents to be executed 4 -3