cherry creek school district no. 5 certificates of participation, … · 2018. 12. 4. · closing...

Closing Book

Cherry Creek School District No. 5Certificates of Participation, Series 2017

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kCONTACT:

Jim Harrington, Senior Municipal Advisor

4700 Syracuse Stree, Suite 860

Denver, CO 80237

Jim Manire, Director

8055 E. Tufts Avenue, Suite 500

Denver, CO 80237

direct 303.802.2301 direct 303.771.1678

Cherry Creek School District No. 5Series 2017 COPs

Closing BookTable of Contents

A. Summary Memorandum

B. Financing Participants

C. Request for Proposal

D. Rating Presentation

E. Rating Reports

F. Pricing Summary

G. Closing Memorandum

H. Final Numbers

I. Municipal Market Overview

J. Updated District Base Rental Payments

Cherry Creek School District No. 5

Tab A: Summary Memorandum

Series 2017 COPs Closing Book

Sum

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January 4, 2018

David Hart, Chief Financial Officer


4700 S. Yosemite Street

Greenwood Village, CO 80111

RE: Cherry Creek School District No. 5

Certificates of Participation, Series 2017

Dear Mr. Hart:

In summer 2017, the District began the process to identify new facility space for several of the District’s programs. The two

options considered were to lease a new facility, which would result in a significantly higher monthly payment, or purchase

a building and renovate for the District’s needs. After internal deliberations, the District decided to purchase and renovate

a building for an anticipated cost of approximately $15 million.

The District did not have any general obligation bond proceeds to allocate towards this project, so the only options for the

District to fund the project were to use fund balance or execute certificates of participation. Given the cost of the project

and the desire to minimize the impact to the general and capital reserve funds, the District decided to execute certificates of

participation for the project. Additionally, to maintain flexibility for the District, an extraordinary call provision was added

to allow the District to call the COPs on and after December 15, 2020 with proceeds from a general obligation bond issue.

Finally, to limit the amount of general or capital reserve funds needed to pay base rental payments prior to this date, the

District decided to structure the COPs with an interest only period so the first principal payment would occur after the

extraordinary redemption date.

Due to the unique redemption provision and the resulting discount structure, the District’s Municipal Advisors

recommended the District pursue a negotiated transaction. As a result, the Advisors distributed an RFP on the District’s

behalf to local underwriting firms. As detailed in a later section, the District went through a rigorous selection process and

selected RBC.

On November 28, 2017, the District sold $15,465,000 of Certificates of Participation, Series 2017 in a market that was very

volatile due to uncertainty regarding tax reform. The District entered the market with a strong preliminary scale and received

a moderate response by the end of the order period. RBC recommended repricing some of the maturities due to the

movement in the MMD that morning and was able to successfully sell most of the maturities and underwrote the remaining

balance of $5.7 million. As described in more detail in a later section, the pricing of the District’s Series 2017 Certificates

was very aggressive, as the repricing levels were actually tighter to the MMD than the pre-pricing scale the day before. On

December 13, 2017, Cherry Creek School District closed the Series 2017 Certificates.

This Closing Book was prepared by Ehlers and HilltopSecurities, together serving as the District’s Municipal Advisors for

this transaction. The Book provides an overview of the financing and market information to be used as a reference at a

future point in time.

Should the District have any questions on the material presented in this book or require additional information, please

contact Jim Harrington at 303-802-2301 or [email protected]. We greatly appreciate the ability to serve as the

District’s Municipal Advisors on this transaction.

Sincerely,

Jim Harrington

Senior Municipal Advisor


Tab B: Financing Participants


Fin

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Cherry Creek School District

Certificates of Participation

Series 2017 (October 13, 2017)

Distribution List

Issuer


4850 South Yosemite Street


David Hart

(720) 554-4344

(720) 554-4691 (Fax)

[email protected]

Brad Arnold

(720) 554-4606

(720) 554-4637 Fax

[email protected]

Dan Huenneke

(720) 554-4629

[email protected]

Heather Biron

(720) 554-4633

[email protected]

Dave Strohfus

(720) 554-4244

[email protected]

Financial Advisor

Ehlers & Associates, Inc.

4700 S. Syracuse St

Suite 860

Denver, CO 80237

James S. Harrington

(303) 802-2301

(303) 910-4444 (Cell)

[email protected]

Matt Dempsey

(303) 802-2303

(703) 508-6388

[email protected]

Ehlers & Associates, Inc.

3060 Centre Pointe Drive

Roseville, MN 55113-1122

Keith Schmitz/Megan Sandell

Bond Sale Coordinator

(651) 697-8543/(651) 697-8562

[email protected]

Alicia Gage

Financial Analyst

(651) 697-8551

[email protected]

Co-Financial Advisor First Southwest, a Division of Hilltop

Securities, Inc.

6041 South Syracuse Way

Suite 300


Jim Manire

(303) 771-1678

[email protected]

Mattie Prodanovic

(303) 248-2518

[email protected]

Karyl Guthery

(602) 224-7114

karyl.guthery @hilltopsecurities.com

mailto:[email protected]





../AppData/Local/Microsoft/Windows/Temporary%20Internet%20Files/Content.Outlook/2015$50565m.nov%20(go%20ref%20bds)/[email protected]



../AppData/Local/Microsoft/Windows/Temporary%20Internet%20Files/dpeterson/AppData/Local/Microsoft/Windows/Temporary%20Internet%20Files/Content.Outlook/4JN9IAVR/[email protected]

Bond/Disclosure Counsel

Butler Snow LLP

1801 California St

Suite 5100

Denver, CO 80202

Dee Wisor

(720) 330-2357

[email protected]

Maria Harwood

(720) 330-2354

(303) 748-1505 (Cell)

[email protected]

Kim Crawford

(720) 330-2354

[email protected]

PA/Registrar UMB

1670 Broadway

Denver, CO. 80202

Leigh Lutz

(303) 839-2220

(303) 839-2287 Fax

[email protected]

Jonathan Fernandez

(303) 764-3607

[email protected]

Printer Merit Financial Press, Inc.

1630 Welton, Ste 300

Denver, CO 80202

Dan Hebble

Tim Kenworthy

(303) 893-1943

(303) 893-1962 Fax

[email protected]

Investments

TBD

Rating Agencies Standard & Poor’s Ratings Services

One California Street, 31st Floor

San Francisco, CA 94111

TBD

Moody's Investors Service

1 Front Street, Suite 1900

San Francisco, CA 94111

TBD





Tab C: Request for Proposal


Rat

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Pre

sent

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Cherry Creek School District No. 5Closing Book

Certificates of participation are typically sold through a negotiated sale due to the annual appropriation feature of the credit.

This difference in credit, as well as the unique structure of the transaction led the District’s Municipal Advisors to

recommend the use of a negotiated sale for the Series 2017 Certificates. The District did not have an existing relationship

with an underwriting firm so the Advisors released a Request for Proposal on behalf of the District to several local firms,

as well as the two firms that were the lowest bid on the competitive sale for the Districts Series 2017B and 2017C General

Obligation Bonds. The final version of the RFP that was distributed is included in this section. The firms that received the

RFP are shown in the table below.

The District received responses from all of the firms listed above with the exception of Raymond James. After evaluating

the proposals and discussing with the Municipal Advisors, the District selected Piper Jaffray, RBC, and Stifel to interview.

While each of the three firms interviewed would have been more than capable of serving as underwriter on this transaction,

the District selected RBC due to their innovative ideas, commitment to pricing at appropriate spreads, and K-12 modeling

experience.

George K. Baum Piper Jaffray

Hutchinson, Shockey, Erley Raymond James

JP Morgan RBC

Key Banc Stifel

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Cherry Creek School District Request for Proposals for Underwriter

$15,000,000 Certificates of Participation, Series 2017 Proposal Deadline – Wednesday, October 25, 2017

I. Overview

For many years, the Cherry Creek School District has successfully used the competitive sale method to select underwriters for its general obligations debt issues. Though the District has previously executed leases for fleet and technology, the District is now preparing to issue Certificates of Participation, which will be secured by an annually appropriated lease of real property. Recognizing that COPs and GOs are different types of securities with different market acceptance, the District believes it may be advantageous to market the proposed COPS through a negotiated sale. The District is therefore seeking proposals from qualified underwriters for an issue of tax-exempt COPs which will generate an estimated $15 million in net proceeds (the “2017 COPs”). The District’s specific objectives for this transaction are to reduce the overall interest cost and to retain the opportunity to redeem a portion of the COPs prior to maturity, possibly by creating a conditional or extraordinary redemption option as further described below. Each firm’s proposal should provide a fair assessment of how either method of sale could be positioned to achieve the District’s goals for this COP transaction, and what factors the District should consider in making its decision about method of sale, particularly in light of its record of receiving outstanding results in the competitive sale of its general obligation bonds. This assessment of the sale method should be used as a reference point throughout your entire proposal. Each prospective underwriter should also focus its proposal on the points which positively differentiate your firm from the other candidates, and on explaining the benefits and advantages to the District of having your firm serve as the underwriter of the COPs. The District intends to interview one or more of the proposing firms after reviewing the proposals, as is further described below. The firm which is selected to be the underwriter of the 2017 COPs will be provided with an IRMA letter in order to facilitate ongoing interactions with the District for the foreseeable future. . The District reserves the right to reject all proposals, to negotiate with any prospective purchaser, and to seek financing through other means. If the 2017 COPs are not delivered for any reason, the proposing firms will have no recourse against the Trustee, the District, its municipal advisors, special counsel, or any of their affiliates, agents or representatives for any expenses, losses, damages or liability incurred.

II. Anticipated Legal Structure of the 2017 COPs The land and buildings constituting the 2017 Leased Property, which will be owned outright by the District, will be leased by the District to the Trustee in a Site Lease. The District will lease the Leased Property back from the Trustee under the terms of an annually renewable Lease Purchase Agreement. Subject to annual appropriation, the District will make annual Base Rental payments to the Trustee under the terms of the Lease Agreement. Base Rental Payments are payable from any legally available revenues budgeted for that purpose. The Trustee will repay the 2017 COPs from the Base Rentals received from the District. The Site Lease will terminate upon the earlier of the

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full payment of the Lease Agreement, or upon its expiration. The interest on the 2017 COPs is to be exempt from federal and Colorado state income tax. The Trustee will be acting solely in its capacity as trustee under an Indenture of Trust pursuant to which the 2017 COPs will be executed and delivered. The Underwriter will purchase the 2017 COPs from the Trustee, and the Trustee will use the proceeds to prepay all rentals due to the District under the Site Lease. Neither the 2017 COPs nor the Lease Agreement will be a long-term debt or multiple fiscal year obligation of the District. The Lease Agreement is renewable from fiscal year to fiscal year by the act of appropriation of rentals due under the Lease Agreement. The District’s obligation to make payments under the Lease Agreement will not extend beyond any fiscal year for which an appropriation has been made. Legal documents will be drafted by the law firm of Butler Snow LLP, which has been retained by the District as its Special Counsel for this transaction. Butler Snow will render an opinion in customary form with respect to the validity of the Lease Agreement and tax-exempt treatment of the interest portion of the Base Rentals due under the Lease Agreement. Drafts of the Indenture of Trust, the Site Lease, the Lease, and any other required documents will be available for review and comment by the Underwriter prior to the final action by the District. III. The 2017 Project

The 2017 COPs will provide funds for the purchase and renovation of an existing building which will allow the District to relocate and consolidate various programs into a centralized location (the “2017 Project”). The District will acquire the facility with funds on hand prior to the closing of the 2017 COPs, and will reimburse those funds with proceeds of the 2017 COPs. The 2017 Project will also provide new facility space and program flexibility, giving the District new opportunities to evaluate additional educational programming in the future, or to respond to opportunities yet to be identified. The District expects to close on the purchase of the facility in early December. IV. 2017 Leased Property

The District is in the process of identifying an appropriate real property asset which will become the subject of the 2017 lease. Proposing firms should assume the 2017 Leased Property will be acceptable to the market in terms of essentiality to the District’s educational and administrative responsibilities.

V. Series 2017 COP Payment Structure The District anticipates the 2017 COPs will be repaid over a term of 20 years. Interest on the COPs is expected to be payable semiannually on June 15 and December 15, beginning June 15, 2018, but the District is flexible in this respect and will consider alternative payment structures. The District expects a traditional par call option not later than in year 10. In addition to a traditional prepayment option, the District is also evaluating the potential benefits and costs of creating an extraordinary call option for the 2017 COPs. The extraordinary call would be valuable to the District to the extent that the proceeds of a

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future general obligation bond issue could be used to exercise the option and transfer the repayment requirements from the District’s operating funds to its bond fund. For structuring and analytical purposes, underwriting candidates should assume that an extraordinary redemption option will be available on or after December 15, 2020. Prospective underwriters should understand that the District is not actively planning for a TABOR election at this time, and so this discussion of extraordinary redemption options is entirely prospective. VI. The District

The District is a body corporate and a political subdivision of the State of Colorado which was organized in 1950 for the purpose of operating and maintaining an educational program for the school-age children residing within its boundaries. The District’s boundaries changed numerous times due to annexations between 1951 and 1973. The boundaries have been substantially stable since 1973. The District encompasses approximately 108 square miles and is located approximately 10 miles southeast of downtown Denver in western Arapahoe County, one of six counties comprising the Denver metropolitan area. The District includes the cities of Cherry Hills Village and Glendale, the Town of Foxfield, portions of the cities of Aurora, Centennial, Greenwood Village and Englewood and certain unincorporated areas of the County. The District is fully accredited by the Colorado Department of Education and is subject to ongoing monitoring by the District and school accountability committees to ensure continued compliance with accreditation. The District’s 2017 preliminary certified assessed valuation (for collection of taxes in 2018) is $6,044,656,073, net of assessed valuation of the tax increment districts located within the District’s boundaries; the preliminary assessed value is subject to change until mid-December 2017. The District is the fourth largest school district in the State, with a fall 2016 enrollment of 54,178 students (headcount). The District’s 2017-18 budget documents and 2015-16 audited financials can be found on the District’s website at http://www.cherrycreekschools.org/FiscalServices/Financial-Transparency/Pages/default.aspx. The District currently has general obligation credit ratings of Aa1 from Moody’s and AA+ from Standard & Poor’s. On October 4, 2017, the District closed on $75,510,000 of General Obligation Refunding Bonds, Series 2017B and $100,000,000 General Obligation Bonds, Series 2017C. The rating reports for the sale can be found in Exhibit A to this RFP and the link to the official statement can be found here: https://emma.msrb.org/ER1088909-ER852126-ER1252746.pdf. VII. District Debt and Other Obligations The District’s financial obligations are summarized in detail in Note 10 of the 2015-16 Comprehensive Audited Financial Report, as well as on EMMA.

http://www.cherrycreekschools.org/FiscalServices/Financial-Transparency/Pages/default.aspx

http://www.cherrycreekschools.org/FiscalServices/Financial-Transparency/Pages/default.aspx

https://emma.msrb.org/ER1088909-ER852126-ER1252746.pdf

https://emma.msrb.org/ER1088909-ER852126-ER1252746.pdf

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IX. Professionals The law firm of Butler Snow LLP has been retained by the District as Bond Counsel for this transaction. Ehlers and Associates, Inc., and FirstSouthwest, a Division of Hilltop Securities, serve as Municipal Advisors to the District. UMB Bank will act as Trustee for the 2017 COPs.

X. Submission of Proposals The District is seeking an underwriter with specific experience in the sale and marketing of COPs for Colorado school districts and local governments. The District will take into consideration the firm’s specific experience with similar COPs, the relevant experience of the public finance and underwriting professionals, and the ability of the firms to access various sectors of the tax-exempt market. The District expects to select the firm which it believes will best meet its overall expectations for the proposed financing, and will not necessarily select the firm with the lowest proposed underwriting spread. Please limit your Proposal to a maximum of 15 pages, excluding a cover letter and table of contents. Additional information may be provided in appendices, but the District expects that only specifically relevant information will be provided. The District discourages the use of general marketing materials and prefers that the salient information which would distinguish your firm from competitors be presented clearly and economically. Please submit your proposal via e-mail no later than 3 pm (MT) on October 25, 2017, to: David D. Hart, Chief Financial Officer

Cherry Creek School District No. 5 4700 South Yosemite Street Greenwood Village, Colorado 80111 [email protected]

In addition, please e-mail a copy of the RFP response, and address any information requests or questions about the selection process to the District’s Municipal Advisors using the contact information below. Mr. Jim Harrington [email protected] Mr. Jim Manire [email protected] Tentative Schedule of Events

October 12 Distribution of RFP to selected firms October 25 Proposals delivered to the District November 1 Interviews with Finalists November 2 Underwriter Selected November 17 Board Meeting to Approve Parameters Resolution November 29 Projected sale of COPs December 13 Projected closing of COPs

Interviews, if requested, will take place on November 1. Finalists will be notified if they have been selected for an interview by the close of business on October 27. Interviews will occur between 8 am and 3 pm on November 1, so please ensure your schedule can accommodate this timing.




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XI. REQUIRED RESPONSE ITEMS – No more than 15 Pages Total

The District is familiar with your firm and has identified it as having the general qualifications and expertise to serve as an underwriter in a negotiated transaction. Therefore, the District recommends that your responses, which are limited in length, should be directed to the topics described in the Overview section of this RFP, as opposed

to boilerplate statements or restatements of familiar information. Please provide responses to these items in the general sequence presented. Responses may be combined to economize on space or to improve clarity. The District discourages the use of boilerplate language and exhibits, and encourages each proposing firm to prioritize its responses within the stated page limitation according to its sense of relevance and importance of the information. The expected pages needed to answer each response item have been provided to help guide your response. The District is interested in hearing how they benefit from using your firm based on your Colorado experience and the District’s current financial circumstances. In answering these questions, please describe how you intend to add value to the transactional side of the District’s financing program given the District’s historical use of competitive sales and minimal use of certificates of participation or lease financings. The District intends to provide an IRMA letter to the selected firm to facilitate ongoing interactions.

A. In no more than two pages please respond to the following items:

1. Summarize your firm’s tax-exempt underwriting activity in both the national

and Colorado markets, including a review of your firm’s experience in the underwriting of COPs in Colorado.

2. Identify the public finance personnel assigned to this transaction and

provide brief descriptions of their relevant experience with Colorado Lease/COP issues. Identify the underwriting or trading desk personnel who will be responsible for pricing this issue, and provide brief descriptions of their relevant experience.

3. Describe your municipal bond sales force, including the number and

location of salespeople.

B. At this time, the District does not have a formal debt policy in place. In light of this, what guidance would you give to the District about the appropriate uses of COPs by Colorado School Districts, including your perspective on the overall suitability of encumbering a District’s uncertain future operating revenues with fixed payments as well as any other risks the District would assume when issuing COPs. (1 page suggested).

C. The District has recently received general obligation bond ratings from Moody’s and S&P. Please describe your approach and recommendations for securing a bond rating for the 2017 COPs. In particular, discuss the factors for a COP rating which would support or enhance the agencies’ positive view of the District’s credit, as well as any factors may diminish their view of the credit. Discuss how you intend to add value to this process, given the current organization of the District’s financial team and strong credit history. (1 page suggested).

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D. Please describe the pros and cons of creating an extraordinary redemption option, and discuss the most effective approaches to developing the specific redemption terms and execution details. What general effects may an extraordinary call option have on pricing and coupon strategy compared to a COP with more standard prepayment options. Please refer to any specific experience you have with pricing transactions with similar features, if helpful. Briefly comment of the pros and cons of funding a base rentals reserve fund for a COP of this credit quality. (1 page suggested).

E. Provide case studies of up to three transactions underwritten by your firm which

have similar characteristics to the proposed 2017 COPs. Describe the credit considerations related to the financing, the influence of the constructed improvements and, if different, the leased assets or collateral. Provide the bond ratings, if any, and describe any credit enhancement used to support the issue. (2 pages suggested).

F. Provide your firm’s net capital position and discuss your ability and willingness to underwrite all or a portion of the transaction should the District attempt to price in a volatile market. You may expand on your answer by describing your general pre-marketing objectives and the manner in which you establish appropriate pricing levels going into a sale. If available, please provide examples of transactions in which you committed the firm’s capital to underwrite unsold balances instead of recommending higher yields to investors. (1 page suggested).

G. Describe the marketing plan you would expect to use for the sale of the 2017

COPs. Please provide a projected interest rate scale for the 2017 COPs as of close of business Friday, October 20, 2017, which includes coupon structure and spread to MMD. For this exercise, please structure the transaction to produce $15,000,000 for project purposes (including net premium/discount), $150,000 for costs of issuance (excluding underwriter’s spread), assuming level debt service, a Aa2 rating from Moody’s, a AA rating from Standard & Poor’s and an issue date of December 13, 2017. Assume a traditional 10-year call option, as well an extraordinary call option on December 15, 2020. (3 pages suggested).

The first maturity should be December 15, 2018, and the final maturity December 15, 2037 (20 years).

H. Provide a proposed fee for a $15 million issue of COPs with a 20-year repayment term. Please indicate whether you anticipate retaining underwriter’s counsel, and, if so, what related costs the District would be expected to absorb. Please identify any other cost reimbursements you would expect to submit for payment by the District. (1 page suggested).

I. Submit any additional information which you believe would be useful to the District in evaluating your performance on similar transactions as well as your qualifications to serve as underwriter. (1 page suggested).

Thank you for your interest in the District.


Tab D: Rating Presentation


Rat

ing

Rep

orts

November 14, 2017

Dedicated to Excellence


Mr. David Hart – Chief Financial Officer

Municipal Advisors

Ehlers & Associates

Mr. Jim Harrington, Senior Municipal Advisor

Mr. Matthew Dempsey, Municipal Advisor

FirstSouthwest, A Division of Hilltop Securities Inc.

Mr. Jim Manire, Director

Ms. Mattie Prodanovic, Associate

RBC

Mr. Dan O’Connell, Managing Director

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Series 2017A Certificates of Participation

Update

District Overview

General Fund

Timetable

Summary

3

Series 2017A Certificates ofParticipation


The District is planning to issue COPs with net proceeds ofapproximately $15 million

The project is time sensitive

The project financed will generate revenue for the District

As with the District’s existing equipment and technologyleases, the District will continue to be cautious whencommitting general fund revenues

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The COPs will be issued to purchase and renovate propertyidentified as The Fremont Building

◦ Commercial building of approximately 86,240 sq. ft,located at 14603 East Fremont Avenue

◦ The building will be purchased at an estimated cost of $8.3million

◦ Construction to repurpose the building is estimated to costapproximately $10.5 million

◦ Soft costs including furniture, fixtures and equipment areestimated to cost approximately $1.2 million

Fixtures and equipment are estimated to costapproximately $400 thousand

◦ Contingency for the project is $1 million

◦ The District anticipates funding approximately $5 million ofproject costs from the Capital Reserve Fund

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The District is not using The Fremont Building as leasedproperty for the COPs

The District will use the Horizon Middle School building andthe 24.03-acre site upon which it is located as leasedproperty for the COPs

◦ Horizon is a 168,500 square-foot building constructed in1982

◦ The current insured value of the building, exclusive ofcontents, is $23,128,310

◦ The net building value (net of general obligation debtproceeds) is $18,376,332

Horizon Middle School is an essential asset of the District’soperations

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Series 2017A Certificates of Participation

Expected Net Proceeds $15,000,000

Structure* Serial Bonds maturing from 2018 to 2038

Purpose of Issuance Purchase and repurposing of Fremont building

Security

Amounts due under the Lease are payable from allgeneral revenues of the District and no particular

revenues of the District are pledged to the payment ofBase Rentals

Interest Payments June 15 and December 15, beginning June 15, 2018

Redemption ProvisionsExtraordinary optional redemption on 12/15/2020

Traditional par call on 12/15/2027

Tax Status Exempt from Federal and Colorado income tax

Pricing Date November 29, 2017

Settlement Date December 13, 2017

*Subject to potential early prepayment and interest-only options

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Final payment projected on December 15, 2038

District may consider interest-only payments through December 15,2020 to take advantage of a short-term optional redemptionprovision and potentially reduce the impact on the General Fund

If utilized, a short-term optional redemption provision would permitthe COP to be absorbed into a future GO bond

Base Rental Payments are expected to be in equal annual amountswith the exception of the potential interest-only period

Annual Base Rental Payments are estimated in the range of $1.0million to $1.2 million and will depend on market conditions andstructuring decisions

District is mindful of its existing lease obligations and is confidentthat there is ample capacity in the General Fund for COP payments

Update


The ending fund balance for the District’s Fiscal Year 2017financials is approximately $6.2 million higher than originallybudgeted

◦ $1.5 million of this excess will be transferred to the CapitalReserve Fund

◦ Approximately $5.9 million has been placed in an assignedreserve

The District’s unassigned fund balance was 11% of GeneralFund expenditures in FY2017

Due to assumption changes adopted by PERA in 2016 andGASB 68 requirements, the District’s share of the PERA NPLfor FY17 is $2.4 billion, an increase of $1.1 billion from FY16

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Colorado’s economic growth continued to accelerate in thethird quarter of 2017, and the expansion is expected tocontinue at a moderate pace through 2018

Relative to the June projections, the FY 2017-18 GeneralFund revenue forecast is higher by $126.2 million, or 1.2%

◦ General Fund revenue is forecasted at 8.1% higher than inFY 2016-17 and is forecasted to increase an additional4.9% in FY 2018-19

◦ State education funding is forecast to increase by $28.9million in FY 2018-19 to $638.7 million

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Source: Colorado Office of State Planning and Budgeting “September 2017 Colorado outlook,” ColoradoLegislative Council’s “Focus Colorado: Economic and Revenue Forecast,” September 30, 2017, and Governor’sFY2018-19 Budget Request.

FY2018

◦ Pupil count is estimated to rise by 700 for FY2017-18, a1.3% increase

The District was previously projecting an increase of 150students or 0.3%

◦ The District’s November Board Elections were cancelled

The Board had two seats that were up for election; oneincumbent ran unopposed, the other incumbent was termlimited and only one candidate sought that seat

FY2019

◦ The Governors Proposed Budget contemplates an increasein Per Pupil Revenue by 4.5% ($343)

The State’s budget is expected to be adopted in May2018 prior to the conclusion of the legislative session

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In September, the PERA Board endorsed a comprehensivepackage of reforms designed to reduce the plan’s risk profileand improve the funded status

On November 1st, the Governor’s Office released theirproposed budget for FY 2018-19, which included a set ofrecommended adjustments to PERA

◦ The Governor’s Office generally supported themodifications suggested by the PERA Board, with a fewexceptions

◦ This is the first proposal that has been presented by anoffice or individual that will be responsible for enacting anychanges to PERA into law

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Source: Colorado Public Employees’ Retirement Association Endorses package of Reforms and Governor of Colorado’s FY2018-19 Budget Request

Other entities or legislators are likely to release their ownproposed recommendations prior to the start of thelegislative session in January

This issue has received a great amount of attention aroundthe state and will be heavily debated during the 2018legislative session

The State Legislature and the Governor are the only entitiesthat may formally adopt any material changes to the PERAretirement plan

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Board of Education: • Five elected members

Superintendent:• Dr. Harry Bull (appointed in July 2013 after 29

years with the District)

Student Base:• Enrollment for the 2017-18 school year totals

54,878 students, a 1.3% increase over 2016-17

Student Characteristics:

• 6,400 students receiving Special Educationservices

• 5,639 students in ELA program• Free and reduced lunch students represent 29%

of population

Employees:• 7,977 total employees – 5,820 full-time and

2,157 part-time

District Size: • The District covers 108 square miles

Facilities*:• 63 school facilities, 2 stadiums, and 11 other

facilities*Includes one elementary school, one middle school, and the career and innovation center to be constructed using bond proceedsfrom the Series 2017 and 2017C Bonds

The District enjoys very strong community support and haspassed five mill levy override and five debt authorizationelections in the past 20 years

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YearMill LevyOverride

ResultDebt

AuthorizationResult

1998 $10.5 million Pass - -

1999 - - $172 million Pass

2003 $14.0 million Pass $167.5 million Pass

2008 $18.0 million Pass $203.5 million Pass

2012 $25.0 million Pass $125 million Pass

2016 $23.9 million Pass $250 million Pass

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General Fund Revenues and Expenditures – Fiscal Year End June 30Revenues 2013 2014 2015 2016 2017

Taxes $212,900,395 $220,880,740 $217,173,349 $222,255,437 $247,970,196

Intergovernmental 1,504,088 1,459,272 1,457,699 1,465,562 1,463,989

State 217,299,215 228,900,826 251,951,879 265,816,710 271,097,181

Investment earnings 231,049 244,107 43,925 130,124 146,509

Other 4,314,120 3,622,757 4,804,028 5,698,549 4,740,994

Total Revenues $436,248,867 $455,107,702 $475,430,880 $495,366,382 $524,418,330

Expenditures

Instructional services $348,389,880 $364,428,973 $387,422,753 $404,745,927 $418,267,056

Supporting services 72,163,399 74,885,263 75,775,190 79,377,475 78,145,116

Community services 441,019 374,691 346,670 388,119 490,807

Non-departmental 492,792 508,888 495,287 507,951 566,488

Facilities construction 184,684 202,710 209,325 262,082 465,524

Total Expenditures $421,671,774 $440,400,525 $464,249,225 $485,281,554 $497,934,991

Total Other Sources(Uses)

($3,139,800) ($4,506,107) ($6,141,517) ($16,361,769) ($10,643,548)

Net Change in FundBalance

$11,437,293 $10,201,070 $5,040,138 ($6,276,941) $16,839,791

Audited financials for fiscal year 2017 indicate a positive net change in fundbalance of $16.8 million

A year-end Total Fund Balance of $83.9 is projected in the FY2017-18budget, including an Unassigned Fund Balance amount of $64.8 million(approximately 12.1% of General Fund expenditures & transfers in that year)

22

Date Event Responsible Party

11/14/2017 Presentation to Rating Agencies MA/District

11/17/2017Special Board Meeting to ApproveParameters Resolution

MA/UW/BC/District

11/21/2017 Receive ratings MA/UW/District

11/29/2017 Sale of Certificates MA/UW/District

12/13/2017 Close MA/UW/BC/District

The District requests a rating one-notch below its

General Obligation rating

◦ The District is a strong credit

◦ The anticipated base rental schedule is affordable given the

selective use of COPs and the strength of the District’s

General Fund

◦ The District is a prudent manager of fund balance

◦ The District has maintained steady enrollment growth and is

experiencing a growth in per pupil revenue

◦ The District is positioned to take out the COPs with general

obligation indebtedness as part of a future bond election

24


Tab E: Rating Reports


Bid

Tab

ulat

ions

Summary:

Arapahoe County School District No. 5(Cherry Creek), Colorado;Appropriations; General Obligation;School State Program

Primary Credit Analyst:

Cody J Nelson, San Francisco 415-371-5022; [email protected]

Secondary Contact:

Michael Parker, Centennial 303-721-4701; [email protected]

Table Of Contents

Rationale

Outlook

Related Research

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT NOVEMBER 22, 2017 1

Summary:

Arapahoe County School District No. 5 (CherryCreek), Colorado; Appropriations; GeneralObligation; School State Program

Credit Profile

US$15.43 mil certs of part ser 2017 due 12/15/2038

Long Term Rating AA/Stable New

Arapahoe Cnty Sch Dist #5 Cherry Creek GO bnds

Long Term Rating AA+/Stable Affirmed

Underlying Rating for Credit Program AA+/Stable Affirmed

Rationale

S&P Global Ratings assigned its 'AA' long-term rating to Arapahoe County School District No. 5 (Cherry Creek), Colo.'s

series 2017 certificates of participation (COPs). At the same time, S&P Global Ratings affirmed its 'AA+' long-term

rating and underlying rating on the district's existing general obligation (GO) bonds. The outlook is stable.

Security

The GO bonds are secured by revenue from the district's unlimited ad valorem property tax pledge, which obligates

the district to annually levy taxes on taxable property within the district without limitation as to rate or amount such

that legally available funds are sufficient to make principal and interest payments. Some of the district's GO bonds also

have received credit enhancement under the Colorado School District Intercept program, which we consider to have a

credit profile of 'AA-'. For more information, see "State Credit Conditions Credit Enhancement Programs: Current List

And Program Conditions," published July 6, 2017, on RatingsDirect.

The COPs are secured by base rental payments paid from the district to UMB Bank, as lessor, for use and possession

of the leased asset. The lease asset for the 2017 COPs is Horizon Middle School and the 24-acre site upon which the

middle school is located. The transaction documents do not require a debt service reserve, but we believe the

sufficient lag between the start of the district's fiscal year and the lease payment date allows for late budget adoption.

Proceeds from the COPs will be used to purchase and finance the renovation of a new building for future school facility

use. As a result of the risk associated with appropriation-related transactions, we notch the COP rating one notch

below the district's general creditworthiness of 'AA+'.

The 'AA+' GO ratings reflect our opinion of:

• Broad and diverse local economy with very strong income and extremely strong wealth indicators,

• Maintenance of strong available fund balance position with very strong recent performance,

• Good financial management policies and practices,

• Increasing enrollment trend, and


• Revenue flexibility supported by several mill levy overrides.

Partly offsetting the above strengths, in our view of:

• The state funding formula that limits the district's revenue-raising ability;

• The potential for unplanned future capital needs given the district's relatively high enrollment growth rate; and

• The relatively low state pension funded level, which could lead to future pressure on the district's operating

performance.

Economy and district overview

The 108-square-mile Arapahoe County School District No. 5 is located approximately 10 miles southeast of downtown

Denver in Arapahoe County and covers about 54,000 students (it is the fourth-largest district in the state). The district

serves the affluent communities of Cherry Hills Village and Greenwood Village, and participates in the diverse Denver

metropolitan area economy. Its proximity to Denver, coupled with extensive residential and commercial development

activity, has led to good growth in the district. The district's direct access to the Denver economy and the Denver Tech

Center provides significant benefit to the district's base of employment.

As a result of the district's access to the Denver metropolitan statistical areas (MSA), we consider the district's income

levels to be very strong, as evidenced by median household effective buying income (EBI) of 133% of the national level

and per capita EBI at 131% of the national level. For comparison, the Denver median household EBI is approximately

99%, or about 30 percentage points below the district's median household EBI.

Tax base

The district's assessed value (AV) trend remains very positive, as the recently released fiscal 2018 AV of $6.04 billion is

approximately 15% above the previously reported figure and is now about $1.3 billion (or 29%) above the district's

prerecession high of $4.7 billion. The district's AV demonstrated resilience during the recession, as it declined for only

a couple of years, shedding about $430 million (about a 9% loss). Since the recession, the district's AV performance has

been strong, as demonstrated by a recent biannual growth rate of about 20%. The AV strength is largely due to the

district's strong local economy, the stability provided by the local base of employment, and the district's beneficial

location within the Denver MSA. For the next revaluation year, fiscal 2020, we expect continued strong performance

as further home price appreciation, strong regional demand, and local economic trends point to a continuation of the

current trend. In addition, while we do not expect that the district's AV growth rates will continue to exceed 8%-10%

into the next decade, we do believe that they will remain above average within the Denver MSA as a result of the

underlying district economy. Finally, the district's top 10 taxpayers account for about 5.6% of total AV, a level that we

view as very diverse, and we view the district's market value per capita as extremely strong, as evidenced by the

estimated fiscal 2018 level of about $177,000.

Looking ahead, we are anticipating continued AV growth at or near the historical trend. Overall, we are forecasting AV

for the urban regional centers in the Denver regional economy to remain stable or increase as continued home price

appreciation has helped boost local government tax receipts throughout much of the area, including the AV results in

Arapahoe County school districts. As a result, we expect the broader macroeconomic forces to support our view and

expectation of a stable to positive AV result within the near future. For additional information, please see our U.S. State

And Local Government Credit Conditions Forecast, published July 24, 2017.


Summary: Arapahoe County School District No. 5 (Cherry Creek), Colorado; Appropriations; General Obligation;School State Program

Enrollment

Student enrollment drives operating revenue under the state funding system. The pupil count for districts with

declining enrollment is the greatest of a two-year, three-year, four-year, or five-year average of the October counts.

Therefore, while annual pupil count fluctuations have no material effect on finances, continuing declining enrollment

could lead to a material decrease in revenue. Reflective of the population growth within the district's service area,

enrollment has increased by about 4.6% during the past five years to 54,178 for fiscal 2017. Further, the district is

reporting another, 1.3% increase for fiscal 2018 to a new enrollment high of 54,878.

Looking ahead, a demographer examined the forward-looking trend, and the district expects enrollment to continue to

grow for the next 15 to 20 years and peak around 63,000 to 64,000 students. We also expect enrollment to continue

growing into the long term as a result of strength within the district's local economy, the growth associated with the

broader Denver economy, and the district's strong educational brand within the Denver MSA, as the district is known

as a choice district for future students. In addition, we believe that the district's investments in innovative new

programs that include an upcoming career academy will dually retain current students and attract new families to the

district.

Finances

In recent years, the district established a positive trend in operations, with an operating surplus in the majority of

reported years. The trend continued in fiscal 2017 as the recently released audit for the period shows another strong

general fund surplus of $16.8 million. The net result of the surplus was a significant increase in the district's available

fund balances to 12.5% of general fund operating expenditures, which we view as strong. We note that this figure is not

inclusive of the district's Taxpayer's Bill of Rights reserve, as that is treated as a restricted fund balance in the audit.

The very strong fiscal 2017 result comes on the heels of a fiscal 2016 general fund deficit of $6.3 million, which

reduced fund balances to 6.4% of expenditures. The planned deficit was due to a one-time $16.7 million transfer out of

the general fund to advance fund the district's capital projects reserve fund.

Looking ahead, the district is budgeting for another relatively strong operating surplus of $2.6 million for fiscal 2018.

We are expecting this figure to be revised up as the district's commitment to cost control, combined with its

conservative revenue planning (assumes no pupil growth) and the potentially positive state revenue environment, will

boost the district's operating surplus as the fiscal year gains momentum. As a result, given current assumptions, we

anticipate the district to post a general fund surplus of about $5 million to $6 million, which would increase available

reserves to about 13%.

Finally, an important credit factor includes the district's history of operating levy support from voters. Prior to the 2016

election, the district produced a track record of four successful mill levy override elections in support of general fund

operations. Most recently, in November 2016, voters approved an additional levy that will bring in an estimated $24

million of unrestricted general fund revenue. In general, a mill levy override is restricted to 25% of a district's total

program funding. The district's most recent mill levy override, approved by the electorate, will increase annually to

allow the district to levy at the maximum 25%. We note that the district is one of only seven school districts in the

state to levy at the maximum amount. The increase to the maximum adds credit strength to the district's financial

profile, as it reduces district exposure to the state funding formula and allows the district to further tap its strong local



economy. Finally, we note that the override levy does not sunset.

Financial Management Assessment (FMA)

We consider the district's management practices good under our FMA methodology, indicating our view that practices

exist in most areas, although not all may be formalized or regularly monitored by governance officials. Key practices

include management's comprehensive budget assumptions, including demographic projections, provided by an

external consultant. The district reports budget updates to the board on a monthly basis and maintains a long-range

financial planning model that is updated at least annually and is embedded into district decision making. Management

maintains a five-year capital improvement plan that is updated annually or as needs arise. The district invests

according to its own written investment policy and shares investment reports with the board monthly. In addition,

management has a 3% minimum reserve policy to which it adheres, on top of the state reserve requirement. We also

understand the district lacks a debt management policy, which is common in Colorado school districts due to the

relatively restrictive state operating framework.

Debt, pensions, and other postemployment benefits (OPEBs)

We consider the overall net debt burden moderate at about $4,914 per capita but low at 2.9% of market value.

Carrying charges are typically moderate, in our view, with debt service accounting for about 9.6% of governmental

expenditures in audited fiscal 2017. We consider debt amortization average, with officials planning to retire about 51%

of debt within 10 years. The district may issue additional debt within the next three to five years, but we do not expect

that issuance to change our view of the district's existing debt profile. Finally, the district has no financing that we

consider "alternative" on its balance sheet.

The district participates in the Public Employees' Retirement Association of Colorado (PERA) to administer its

pensions. In fiscal 2017, the district made its approximately $64.7 million required contribution to PERA. The district

does not offer OPEBs but, as part of its pension contribution to the state, contributes to the state's health care trust

fund, which employees can join after retirement. Combined pension and retiree health care contributions equaled

10.2% of total governmental expenditures in fiscal 2017, a level that we consider slightly above average. The district's

proportionate share of the net pension liability in fiscal 2017, per the new Governmental Accounting Standards Board

reporting standards, is about $2.37 billion, representing about 350% of total governmental funds expenditures, a level

that we view as high.

Outlook

The stable outlook reflects our expectation that the district's available fund balance levels will remain at a strong level,

or above 8% of general fund operating expenditures. The stable outlook also reflects our expectation that the district's

enrollment will remain at least stable. As a result, we do not expect to change the ratings within our two-year outlook

horizon.

Upside scenario

We could raise the ratings if the district were to raise its available fund balances and maintain them at a level in line

with those of higher-rated peers, all other factors remaining equal.



Downside scenario

We could lower the ratings if the district's available fund balances were to drop to a level in line with those of its

lower-rated peers. We could also lower the ratings if the district's economic indicators were to materially weaken, as

indicated by the district's EBI figure or AV trend.

Related Research

U.S. State And Local Government Credit Conditions Forecast, Nov. 1, 2017

Ratings Detail (As Of November 22, 2017)

Arapahoe Cnty Sch Dist #5 Cherry Creek GO rfdg bnds

Long Term Rating AA+/Stable Affirmed

Underlying Rating for Credit Program AA+/Stable Affirmed

Arapahoe Cnty Sch Dist #5 Cherry Creek GO

Unenhanced Rating AA+(SPUR)/Stable Affirmed

Many issues are enhanced by bond insurance.

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors,

have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria.

Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is

available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found

on the S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the

left column.




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U.S. PUBLIC FINANCE

CREDIT OPINION20 November 2017

New Issue

Contacts

Grayson Nichols [email protected]

Gera M. McGuire +1.214.979.6850VP-Sr Credit Officer/[email protected]

Denise Rappmund +1.214.979.6865VP-Senior [email protected]

CLIENT SERVICES

Americas 1-212-553-1653

Asia Pacific 852-3551-3077

Japan 81-3-5408-4100

EMEA 44-20-7772-5454

Arapahoe County School District 5 (CherryCreek), CONew Issue: Moody's Assigns Initial Aa2 to Arapahoe CSD No.5's, CO Certificates of Participation, Series 2017

Summary Rating RationaleMoody's Investors Service has assigned an initial Aa2 underlying rating to Arapahoe CountySchool District No. 5's (Cherry Creek), Colorado $15.4 million Certificates of Participation,Series 2017. In addition, we have affirmed the district's outstanding general obligationunlimited tax debt at Aa1. The outlook remains stable.

The Aa1 underlying rating reflects the district's diverse economy and favorable locationwithin the Denver MSA, large tax base that is experiencing growth, and its affluent andsupportive district residents. The district continues to maintain healthy reserve levels, andthe district benefits from the support of local residents that have passed mill levy overridesto supplement state funding. The Aa1 rating also incorporates the district's manageable debtprofile and elevated pension burden associated with the state-wide pension plan.

The initial Aa2 rating on the district's certificates of participation (COPs) primarily reflectsthe fundamentally weaker nature of the security of annual appropriations from any legallyavailable funds, offset to some degree by the essential nature of the leased asset and lowannual lease payments relative to general fund revenues.

Exhibit 1

Substantial Tax Base Growth Has Kept Debt Burden Manageable

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

$0

$10

$20

$30

$40

$50

$60

2011 2012 2013 2014 2015 2016 2017 2018*

Full Value ($ billions - left axis) Debt Burden (% of Full Value - right axis)

*preliminary fiscal 2018 full value; includes current bond issuanceSource: Arapahoe CSD 5 (Cherry Creek), CO

Credit Strengths

» Large tax base favorably located in the growing Denver MSA

» Strong socioeconomic indicators and supportive community, trend of growing enrollment

https://www.surveygizmo.com/s3/1133212/Rate-this-research?pubid=PBM_1100610

MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE

» Solid financial management with historically stable reserve and liquidity levels

Credit Challenges

» High fixed costs and significant tread water gap

» High pension burden continues to grow given weak contribution levels

» Reserve and liquidity levels slightly below those of similarly-rated districts nationally

Rating OutlookThe stable ratings outlook reflects Moody's expectation that the district's tax base and local economy will continue to be strong in thenear-term, and that the district's management team will continue its trend of prudent fiscal management and healthy reserve levels.

Factors that Could Lead to an Upgrade

» Significant improvement in debt and pension metrics

» Substantial growth in reserve and liquidity levels

Factors that Could Lead to a Downgrade

» Deterioration in the district's financial position, including reserve levels and liquidity

» Sustained losses in full value or resident wealth

» Continued growth in pension burden and significant underfunding of annual obligations

Key Indicators

Exhibit 2

Arapahoe County S.D. 5 (Cherry Creek), CO 2013 2014 2015 2016 2017

Economy/Tax Base

Total Full Value ($000) $ 34,542,748 $ 35,057,805 $ 35,304,075 $ 42,954,365 $ 43,478,278

Full Value Per Capita $ 123,957 $ 122,245 $ 120,287 $ 142,895 $ 143,671

Median Family Income (% of US Median) 133.6% 136.5% 137.4% 137.4% 137.4%

Finances

Operating Revenue ($000) $ 483,717 $ 505,752 $ 525,574 $ 549,449 $ 576,119

Fund Balance as a % of Revenues 17.8% 18.9% 19.9% 18.0% 19.0%

Cash Balance as a % of Revenues 29.8% 30.6% 29.8% 26.1% 26.8%

Debt/Pensions

Net Direct Debt ($000) $ 563,905 $ 540,071 $ 507,437 $ 470,277 $ 597,119

Net Direct Debt / Operating Revenues (x) 1.2x 1.1x 1.0x 0.9x 1.0x

Net Direct Debt / Full Value (%) 1.6% 1.5% 1.4% 1.1% 1.4%

Moody's - adjusted Net Pension Liability (3-yr average) to Revenues (x) 4.8x 4.7x 4.5x 4.6x 4.7x

Moody's - adjusted Net Pension Liability (3-yr average) to Full Value (%) 6.8% 6.8% 6.7% 5.9% 6.3%

Operating Revenue, Fund Balance, and Cash Balance are the General & Debt Service Funds combinedSource: Arapahoe CSD 5 (Cherry Creek), CO; Moody's Investors Service

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 20 November 2017 Arapahoe County School District 5 (Cherry Creek), CO: New Issue: Moody's Assigns Initial Aa2 to Arapahoe CSD No. 5's, CO Certificates ofParticipation, Series 2017


Detailed Rating ConsiderationsEconomy and Tax Base: Large and Affluent Service Area Southeast of DenverThe district's economy and tax base are expected to remain strong in the near term future. Located within Arapahoe County, thedistrict covers 108 square miles just southeast of Denver (Aaa stable) and serves a population of 302,500. Included within the district’sboundaries are the cities of Cherry Hills Village, Glendale, the town of Foxfield, and portions of the cities of Aurora, Centennial,Greenwood Village, and Englewood, as well as unincorporated portions of the county. Given its location, district benefits from theeconomic strength of the overall metropolitan statistical area, which boasts a highly educated workforce and significant economicdiversity. The Denver area was only minimally affected by the economic downturn compared to other large cities, and is now in aperiod of expansion based on growth in business services and healthcare.

Unlike many parts of the nation and reflective of the strength of the local economy, the district's large tax base experienced a modestcumulative decline of just over 7.5%, hitting a low of $34.4 billion (full valuation) in 2012. After modest gains between 2013 and 2015,full valuation increased dramatically by 21.7% to $43.5 billion in 2016, reflective of a significant amount of reevaluations and somenew construction within the district. Full value for 2017, which was not a reassessment year, shows growth of about 1.2%, reflectiveprimarily of new residential construction. In the upcoming reassessment year, preliminary values for fiscal 2018 exhibit anothersignificant increase of 22.6% to reach a large full valuation of $53.3 billion. Moody’s notes that the assessment figures lag real marketactivity by approximately two years, so increases in full value are expected through 2020 given the ongoing strong housing market inthe Denver MSA area. Additionally, the districts actual valuation is approximately 81% residential and has land area available for futuregrowth along its eastern boundary. Future growth will rely on ongoing appreciation in home values as well as some new construction.The tax base is relatively diverse, with the ten largest taxpayers representing 5.6% of the assessed value, led by large utility and retailcenters.

The districts resident income levels are above average, as measured by median family income at 137.5% of the US. Full value per capita,a proxy measure of wealth, is strong at $176,157. Unemployment for Arapahoe County (Aa1) is extremely low at just 2.2% as of August2017, according to data from the Bureau of Labor Statistics. Over the past five years, the district’s enrollment has grown from 52,681(fiscal 2013) to 54,178 (fiscal 2017), an increase of 4.6%, with headcount growth showing a slight deceleration over the past threeyears. The districts management budgeted for modest enrollment growth of 0.3% 2018 to reach 54,328. The district has two charterschools within the district’s boundaries, with a total combined enrollment of less than 700 students.

Financial Operations and Reserves: Structurally Balanced and Stable Financial OperationsThe district’s financial operations are sound, with management demonstrating a consistent ability to deliver long-term structurallybalanced operations and stable reserve levels. In 2017, the district experienced a sizable general fund surplus of $16.8 million, drivenby the recent approval of additional MLO funding. Audited fiscal 2017 financial figures show ending available reserve in the district’sgeneral fund of $62.3 million, equal to 11.8% of general fund revenues. On an operating funds basis, which includes both the GeneralFund and the Debt Service Fund, available reserves increase to $109.3 million, or 19% of operating funds revenues. Relative torevenues, this lags the reserve levels of similarly-rated districts nationally. However, the district’s reserves represent more than twomonths of district operating funds expenses, a level Moody’s views as healthy, and approximates the districts five-year average (18.7%),indicating good operational stability.

The district’s operating funds revenues are comprised of roughly equal parts state aid (48.1% of revenues in 2017), which is determinedby formula and driven by enrollment, and local property taxes (47.1%). In addition to state funding, the district also benefits fromsupportive local voters, who in the 2016 election approved a mill levy override (MLO) that provides additional property tax support fordistrict activities up to 25% of the state funding formula (Total Program Funding). For 2017, that amount was equal to $23.9 million.Operating expenses are primarily for instruction (60.7%) and other support functions. Management adopted a balanced budget forfiscal 2018, but is likely to experience a small operating surplus given conservative revenue and expenditure estimates.

LIQUIDITYThe district has ample liquidity and access to funds to manage cash flow. At the end of 2017, the district held $154.5 million in cashand investments in its operating funds, equal to 26.8% of operating funds revenues. Liquidity is expected to remain healthy givenconservative budgetary practices.


https://www.moodys.com/credit-ratings/Denver-City-County-of-CO-credit-rating-230730

https://www.moodys.com/credit-ratings/Arapahoe-County-of-CO-credit-rating-600000195


Debt and Pensions: Manageable Debt Burden with Elevated Pension LiabilitiesIncluding the current issue, the district has $669.9 million in general obligation bonds outstanding and $15.43 million in COPs, equalto a manageable 1.6% of full value and 1.3 times 2017 operating funds revenues. When using the preliminary fiscal 2018 full value, thedebt burden drops to 1.3%. The district recently exhausted the GOULT authorization from the 2016 bond election. The district plansto potentially approach voters in the next tax base reevaluation cycle in 2020 to continue to fund the long term capital improvementplan.

The current issuance is the district’s only outstanding certificates of participation debt. Lease payments equate to less than 0.2% ofGeneral Fund revenues. The leased assets securing the outstanding COPs are school buildings essential to the district's operations.Moody's notes the pledged assets remain in use, and given the relatively small lease burden the possibility of non-appropriation isconsidered remote.

DEBT STRUCTUREThe district’s debt consists of fixed-rate obligations that amortize in full by 2037, with 47.9% of principal amortizing in the next tenyears.

DEBT-RELATED DERIVATIVESThe district has no debt-related derivatives.

PENSIONS AND OPEBThe district participates in the School Division Trust Fund of the Public Employees Retirement Association (PERA) pension plan(cost-sharing, defined benefit pension plan administered by the state). Like most public school districts in Colorado, the districtmakes its statutorily required contributions, which trail actuarial requirements and has led to elevated pension burdens. Total fixedcosts including debt service, pension contributions, and OPEB were an elevated 21.9% of fiscal 2016 operating revenues. This fixedcost burden would further increase to a significant 30.1% of revenues if the district were to make its full “tread water” payment,which highlights the significant “tread water” gap of 8.2% of operating revenues. The “tread water” indicator measures the annualgovernment contributions required to prevent reported net pension liabilities from growing, under reported assumptions. Given thenegative results of PERAs fiscal year end 2016 funding snapshot, additional government cost increases in the future are highly likely,because contributions remain far too low to keep pace with liability growth.

Moody’s fiscal 2016 adjusted net pension liability (ANPL) for the district, under our methodology for adjusting reported pension data,is $2.6 billion, or an elevated 4.8 times operating revenues. The districts three-year average ANPL to operating revenues is 4.6 times,while the three year average ANPL to full value is a high 5.9%. Growth in the districts pension burden and tread water gap could leadto downward rating pressure.

The adjustments are not intended to replace the district's reported liability information, but to improve comparability with other ratedentities. For more information on Moody's insights on employee pensions and the related credit impact on companies, government,and other entities across the globe, please visit Moody's on Pensions at www.moodys.com/pensions.

Management and Governance: Conservative Management TeamThe district’s Board consists of five members and supervises and controls all public schools and property within the District. The Boardemploys a Superintendent of Schools, delegates administrative and supervisory functions to the superintendent, reviews and approvesthe district’s budget.

Colorado School Districts have an Institutional Framework score of A, which is moderate compared to the nation. InstitutionalFramework scores measure a sectors legal ability to increase revenues and decrease expenditures. Property taxes, one of the sectorsmajor revenue sources is subject to caps in conjunction with the states equalized funding formula as well as growth limitations underTABOR, which can be overridden at the local level. Voter approved mill levy overrides allow for moderate revenue-raising ability.Unpredictable revenue fluctuations tend to be high, or over 10% annually. Across the sector, fixed and mandated costs are generallygreater than 25% of expenditures. However, Colorado has public sector unions, which can limit the ability to cut expenditures.Unpredictable expenditure fluctuations tend to be minor, under 5% annually.


https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1081137

https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1081137

http://www.moodys.com/pensions


Legal SecurityThe COPs are payable solely from annually appropriated base rentals and other revenues paid by the district under the lease from anylegally available funds of the district. There is no debt service reserve requirement for the COPs. The leased asset is one of the district'sexisting middle schools, which is an essential asset to ongoing operations.

Use of ProceedsThe proceeds of the COPs will be used to purchase and renovate a building.

Obligor ProfileArapahoe County School District No. 5 (Cherry Creek) provides K-12 public education services to roughly 54,000 students within thecites of Cherry Hills Village and Glendale, the town of Foxfield, and portions of the cities of Aurora, Centennial, Greenwood Village,Englewood, as well as unincorporated portions of Arapahoe County.

MethodologyThe principal methodology used in the lease rating was Lease, Appropriation, Moral Obligation and Comparable Debt of US State andLocal Governments published in July 2016. The principal methodology used in the general obligation rating was US Local GovernmentGeneral Obligation Debt published in December 2016. Please see the Rating Methodologies page on www.moodys.com for a copy ofthese methodologies.

Ratings

Exhibit 3

Arapahoe County S.D. 5 (Cherry Creek), COIssue RatingCertificates of Participation, Series 2017 Aa2

Rating Type Underlying LTSale Amount $15,430,000Expected Sale Date 11/29/2017Rating Description Lease: Appropriation

Source: Moody's Investors Service



© 2017 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDITRISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THERELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITYMAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGSDO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’SOPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVEMODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’SPUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOTPROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THESUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATIONAND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FORPURCHASE, HOLDING, OR SALE.

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All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as wellas other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information ituses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However,MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for anyindirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use anysuch information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses ordamages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of aparticular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatorylosses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for theavoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents,representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

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Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (includingcorporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating,agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintainpolicies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO andrated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually atwww.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

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Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’sOverseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a NationallyRecognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by anentity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registeredwith the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferredstock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it feesranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

REPORT NUMBER 1100610


http://www.moodys.com


Contacts

Grayson Nichols [email protected]

Gera M. McGuire +1.214.979.6850VP-Sr Credit Officer/[email protected]

Denise Rappmund +1.214.979.6865VP-Senior [email protected]

CLIENT SERVICES

Americas 1-212-553-1653

Asia Pacific 852-3551-3077

Japan 81-3-5408-4100

EMEA 44-20-7772-5454



Tab F: Pricing Summary


OM

SB

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umm

ary


The District entered the market with a very strong scale on pricing day. The District had a two hour order period and received

favorable response in the middle of the curve. However, there were still a significant amount of maturities outstanding in

the short and long end of the curve at the end of the period. An increase in yields early in the day as well as the volatility in

the market caused many investors to demand higher yields for the Series 2017 Certificates. RBC proposed to increase yields

slightly to attract a larger investor pool and proposed to underwrite at these increased yields with a commitment to take

down approximately $5.7 million of unsold balances to their own account. Even with the higher yields, the District still

priced the Series 2017 Certificates at a tighter spread to MMD due to the overall increase in rates, as seen in the table below.

The District sold the Series 2017 Certificates at a Net Interest Cost of 3.07%.

11/27/2017MMD

Pre-PricingScale

Spreadto MMD

11/28/2017MMD

FinalScale

Spreadto MMD

Difference

2018 1.24 - 1.26 -

2019 1.45 - 1.50 -

2020 1.51 - 1.56 -

2021 1.60 1.80 0.20 1.65 1.83 0.18 -0.02

2022 1.69 1.94 0.25 1.74 1.97 0.23 -0.02

2023 1.77 2.07 0.30 1.82 2.10 0.28 -0.02

2024 1.86 2.21 0.35 1.91 2.21 0.30 -0.05

2025 1.95 2.33 0.38 2.00 2.33 0.33 -0.05

2026 2.03 2.44 0.41 2.08 2.44 0.36 -0.05

2027 2.11 2.57 0.46 2.16 2.57 0.41 -0.05

2028 2.21 2.71 0.50 2.24 2.71 0.47 -0.03

2029 2.29 2.89 0.60 2.32 2.89 0.57 -0.03

2030 2.35 3.05 0.70 2.38 3.05 0.67 -0.03

2031 2.40 3.13 0.73 2.43 3.15 0.72 -0.01

2032 2.45 3.18 0.73 2.48 3.20 0.72 -0.01

2033 2.50 3.23 0.73 2.53 3.25 0.72 -0.01

2034 2.55 3.28 0.73 2.58 3.30 0.72 -0.01

2035 2.60 3.33 0.73 2.63 3.35 0.72 -0.01

2036 2.64 3.37 0.73 2.67 3.39 0.72 -0.01

2037 2.67 3.40 0.73 2.70 3.42 0.72 -0.01

2038 2.69 3.42 0.73 2.72 3.44 0.72 -0.01


Tab G: Closing Memorandum


Clo

sing

Mem

oran

dum

Closing and Post Sale Report


$15,465,000 Certificates of Participation, Series 2017

Dated: December 13, 2017

Closing and Post Sale ReportTO: David Hart, Cherry Creek School District No. 5

Brad Arnold, Cherry Creek School District No. 5Dan Huenneke, Cherry Creek School District No. 5Dee Wisor, Butler Snow LLPMaria Harwood, Butler Snow LLPKim Crawford, Butler Snow LLPLeigh Lutz, UMB Bank NAJonathan Fernandez, UMB Bank NAJim Manire, First Southwest Company, LLCMattie Prodanovic, First Southwest Company, LLCDan O'Connell, RBC Capital MarketsRudy Andras, RBC Capital Markets

FROM: Jim Harrington / Matt Dempsey / Jim Mann / Peter Curtin

DATE: December 8, 2017

SUBJECT: Cherry Creek School District No. 5 $15,465,000 Certificates of Participation, Series 2017 (the "Certificates")

Dated Date/Closing Date: December 13, 2017

Wire Instructions for the Purchaser

In connection with the above closing, proceeds will be wired by the purchaser, RBC Capital Markets, asfollows:

Wire Instructions Amount Wired

1) JP MORGAN CHASE, ACCOUNT HOLDER – CHERRY CREEK SCHOOLDISTRICT No. 5, ACCOUNT # - 170011710, ABA # - 102001017 $15,000,000.00

2) UMB BANK NA BNF NAME: TRUST OPERATIONS ABA: 101 000 695BNF A/C: 9800006823 ATTN: KEN HOFFMAN CHERRY CREEKSCHOOLS 2017 147,945.47

Total Amount of Wires $15,147,945.47

Closing and Post Sale Report for Cherry Creek School District No. 5 $15,456,000 Certificates of Participation, Series 2017 Page 1

Calculation of Available Funds

Par Amount of the Certificates $15,465,000.00

Less: Original Issue Discount (263,009.85)

ISSUE PRICE/GROSS PRODUCTION $15,201,990.15

Less: Underwriter's Discount (54,044.68)

PURCHASE PRICE $15,147,945.47

NET AVAILABLE FUNDS $15,147,945.47

Distribution of Available FundsCertificateProceeds Total

Deposit to Project FundCertificate Proceeds $15,000,000.00Total Deposit to Project Fund $15,000,000.00

Costs of Issuance1

Ehlers (Municipal Advisor) $10,500.00FirstSouthwest (Municipal Advisor) 7,000.00Butler Snow LLP (Bond Counsel) 55,000.00Moody's (Rating Agency) 22,500.00S&P (Rating Agency) 19,000.00Miscellaneous 6,445.47UMB Acceptance Fee 2,000.00UMB Administration Fee 2,500.00Merit Financial 3,000.00Title Commitment and Filing Fees 20,000.00Total Costs of Issuance 147,945.47

TOTAL FUNDS RECEIVED BY THE DISTRICT $15,147,945.47

TOTAL DISTRIBUTION OF AVAILABLE FUNDS $15,147,945.47

1 The Paying Agent will receive invoices from each of the firms listed above. These invoices should be paidfrom Certificate proceeds received for this issue.


Interest Earnings on Project Fund

Monies in the Project Fund may be invested temporarily during construction in investments permitted byColorado Statutes. Any interest earnings or funds remaining in the Project Fund after all project costs havebeen paid must be transferred to the Base Rentals Fund for the Certificates.

Summary of Funds Available for Financing Project Costs

Source of Funds Amount

Certificate Proceeds Deposited to Project Fund $15,000,000.00

Total Funds Available for Financing Project Costs $15,000,000.00

Use of Funds Amount

Facility purchase and improvements $15,000,000.00

Total Uses $15,000,000.00


Debt Service Payments for the $15,465,000 Certificates of Participation

Source of Payment

The Certificates and the interest thereon are payable solely from annually appropriated Base Rentals and otherRevenues paid by the District under the Lease from any legally available funds of the District and fromcertain investment earnings and reserves, except to the extent payable from the “Net Proceeds,” which aredefined to mean the proceeds of any performance or payment bonds or proceeds of insurance, includingself-insurance, required by the Lease or proceeds from any condemnation award, or any proceeds derivedfrom the exercise of any Lease Remedy or otherwise following termination of the Lease by reason of an Eventof Nonappropriation or an Event of Lease Default, allocable to the Leased Property, less (a) all relatedexpenses (including, without limitation, attorney’s fees and costs) incurred in the collection of such proceedsor award; and (b) all other related fees, expenses and payments due to the District and the Trustee.

Schedule of Principal and Interest Payments

The Schedule of Principal and Interest Payments follows this report.

Payment Instructions for Obligations Issued in Book-Entry-Only Form with a Paying Agent

The Leases have been issued in "Book-Entry-Only" form, and the District has named of UMB Bank N.A.Denver, Colorado, to be the Paying Agent for the Leases. Therefore, on a semi-annual basis the District willbe invoiced by the Paying Agent for the interest and on an annual basis for the principal coming due on theLeases. In addition, the District will be invoiced for Paying Agent/Transfer Agent charges on a regularlyscheduled basis.

If you have any questions regarding the closing, the calculation and use of proceeds, or debt service payments, youcan reach us at the following phone numbers or e-mails:

Name Phone E-mail

Jim Harrington (303) 802-2301 [email protected]

Matt Dempsey (303) 802-2303 [email protected]

Jim Mann (262) 796-6162 [email protected]

Peter Curtin (262) 796-6187 [email protected]

Jim Manire (303) 771-1678 [email protected]

Mattie Prodanovic (303) 248-2518 [email protected]

Attachments:A. Sources and UsesB. Detailed Costs of IssuanceC. Principal & Interest Payment Schedule


Cherry Creek School District No. 5, Colorado $15,465,000 Certificates of Participation, Series 2017

Sources & Uses

Dated 12/13/2017 | Delivered 12/13/2017

Sources Of Funds Par Amount of Bonds $15,465,000.00

Original Issue Discount (OID) (263,009.85)

Total Sources $15,201,990.15

Uses Of Funds Total Underwriter's Discount (0.349%) 54,044.68

Costs of Issuance 147,945.47

Deposit to Project Construction Fund 15,000,000.00

Total Uses $15,201,990.15

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Detail Costs Of Issuance

Dated 12/13/2017 | Delivered 12/13/2017

COSTS OF ISSUANCE DETAIL Municipal Advisor (Ehlers) $10,500.00

Municipal Advisor (FirstSouthwest) $7,000.00

Bond Counsel $55,000.00

Rating Agency Fee (Moody's) $22,500.00

Rating Agency Fee (S&P) $19,000.00

Miscellaneous $6,445.47

UMB Acceptance Fee $2,000.00

UMB Administration Fee $2,500.00

Merit Financial $3,000.00

Title Commitment and Filing Fees $20,000.00

TOTAL $147,945.47

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Debt Service Schedule

Date Principal Coupon Interest Total P+I Fiscal Total

12/13/2017 - - - - -06/15/2018 - - 213,896.13 213,896.13 -12/15/2018 - - 211,545.63 211,545.63 425,441.7606/15/2019 - - 211,545.63 211,545.63 -12/15/2019 - - 211,545.63 211,545.63 423,091.2606/15/2020 - - 211,545.63 211,545.63 -12/15/2020 - - 211,545.63 211,545.63 423,091.2606/15/2021 - - 211,545.63 211,545.63 -12/15/2021 690,000.00 1.750% 211,545.63 901,545.63 1,113,091.2606/15/2022 - - 205,508.13 205,508.13 -12/15/2022 705,000.00 1.750% 205,508.13 910,508.13 1,116,016.2606/15/2023 - - 199,339.38 199,339.38 -12/15/2023 715,000.00 2.000% 199,339.38 914,339.38 1,113,678.7606/15/2024 - - 192,189.38 192,189.38 -12/15/2024 735,000.00 2.200% 192,189.38 927,189.38 1,119,378.7606/15/2025 - - 184,104.38 184,104.38 -12/15/2025 750,000.00 2.300% 184,104.38 934,104.38 1,118,208.7606/15/2026 - - 175,479.38 175,479.38 -12/15/2026 765,000.00 2.400% 175,479.38 940,479.38 1,115,958.7606/15/2027 - - 166,299.38 166,299.38 -12/15/2027 785,000.00 2.550% 166,299.38 951,299.38 1,117,598.7606/15/2028 - - 156,290.63 156,290.63 -12/15/2028 805,000.00 2.500% 156,290.63 961,290.63 1,117,581.2606/15/2029 - - 146,228.13 146,228.13 -12/15/2029 830,000.00 2.750% 146,228.13 976,228.13 1,122,456.2606/15/2030 - - 134,815.63 134,815.63 -12/15/2030 850,000.00 3.000% 134,815.63 984,815.63 1,119,631.2606/15/2031 - - 122,065.63 122,065.63 -12/15/2031 880,000.00 3.000% 122,065.63 1,002,065.63 1,124,131.2606/15/2032 - - 108,865.63 108,865.63 -12/15/2032 905,000.00 3.000% 108,865.63 1,013,865.63 1,122,731.2606/15/2033 - - 95,290.63 95,290.63 -12/15/2033 930,000.00 3.000% 95,290.63 1,025,290.63 1,120,581.2606/15/2034 - - 81,340.63 81,340.63 -12/15/2034 960,000.00 3.125% 81,340.63 1,041,340.63 1,122,681.2606/15/2035 - - 66,340.63 66,340.63 -12/15/2035 990,000.00 3.125% 66,340.63 1,056,340.63 1,122,681.2606/15/2036 - - 50,871.88 50,871.88 -12/15/2036 1,025,000.00 3.125% 50,871.88 1,075,871.88 1,126,743.7606/15/2037 - - 34,856.25 34,856.25 -12/15/2037 1,055,000.00 3.250% 34,856.25 1,089,856.25 1,124,712.5006/15/2038 - - 17,712.50 17,712.50 -12/15/2038 1,090,000.00 3.250% 17,712.50 1,107,712.50 1,125,425.00

Total $15,465,000.00 - $5,969,911.94 $21,434,911.94 -

Yield Statistics Bond Year Dollars $204,785.92Average Life 13.242 YearsAverage Coupon 2.9151965% Net Interest Cost (NIC) 3.0700190%True Interest Cost (TIC) 3.0857257%Bond Yield for Arbitrage Purposes 3.0524021%All Inclusive Cost (AIC) 3.1777549% IRS Form 8038 Net Interest Cost 3.1086104%Weighted Average Maturity 13.189 Years

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Tab H: Final Numbers


Fin

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Nov 28, 2017 10:21 am

TABLE OF CONTENTS


(Extraordinary Optional Redemption - No Principal Through Call Date)Ratings = Aa2 / AA | Extraordinary Optional Call Date = 12/15/2020 @ 100

11/28/2017 Final Pricing Numbers

Report Page

Sources and Uses of Funds .............................. 1

Cost of Issuance ................................... 2

Underwriter's Discount ................................ 3

COP Pricing ..................................... 4

COP Debt Service .................................. 5

COP Summary Statistics ............................... 7

Proof of Arbitrage Yield ................................ 8

Form 8038 Statistics ................................. 9

Proof of Arbitrage Yield ................................ 10

Form 8038 Statistics ................................. 11

Nov 28, 2017 10:21 am Page 1

SOURCES AND USES OF FUNDS




Dated Date 12/13/2017Delivery Date 12/13/2017

Sources:

COP Proceeds:Par Amount 15,465,000.00Original Issue Discount -263,009.85

15,201,990.15

Uses:

Project Fund Deposits:Project Fund 15,000,000.00

Delivery Date Expenses:Cost of Issuance 147,945.47Underwriter's Discount 54,044.68

201,990.15

15,201,990.15

Nov 28, 2017 10:21 am Page 2

COST OF ISSUANCE




Cost of Issuance $/1000 Amount

Miscellaneous 0.41678 6,445.47Municipal Advisor (Ehlers) 0.67895 10,500.00Municipal Advisor (FirstSouthwest) 0.45263 7,000.00COP Counsel 3.55642 55,000.00UMB Acceptance Fee 0.12932 2,000.00UMB Administration Fee 0.16166 2,500.00Rating Agency Fee (Moody's) 1.45490 22,500.00Rating Agency Fee (S&P) 1.22858 19,000.00Merit Financial 0.19399 3,000.00Title and Filing Fees 1.29324 20,000.00

9.56647 147,945.47

Nov 28, 2017 10:21 am Page 3

UNDERWRITER'S DISCOUNT




Underwriter's Discount $/1000 Amount

Average Takedown 3.20199 49,518.75CUSIP 0.03763 582.00DTC 0.05173 800.00Ipreo 0.06194 957.90Day Loan 0.02778 429.58DAC 0.03556 550.00Miscellaneous 0.07801 1,206.45

3.49464 54,044.68

Nov 28, 2017 10:21 am Page 4

COP PRICING




Maturity PremiumCOP Component Date Amount Rate Yield Price (-Discount) Takedown

Serial COPs:12/15/2021 690,000.00 1.750% 1.830% 99.692 -2,125.20 2.50012/15/2022 705,000.00 1.750% 1.970% 98.956 -7,360.20 2.50012/15/2023 715,000.00 2.000% 2.100% 99.438 -4,018.30 2.50012/15/2024 735,000.00 2.200% 2.210% 99.935 -477.75 2.50012/15/2025 750,000.00 2.300% 2.330% 99.781 -1,642.50 2.50012/15/2026 765,000.00 2.400% 2.440% 99.678 -2,463.30 2.50012/15/2027 785,000.00 2.550% 2.570% 99.824 -1,381.60 2.50012/15/2028 805,000.00 2.500% 2.710% 98.013 -15,995.35 2.50012/15/2029 830,000.00 2.750% 2.890% 98.588 -11,719.60 2.50012/15/2030 850,000.00 3.000% 3.050% 99.466 -4,539.00 3.75012/15/2031 880,000.00 3.000% 3.150% 98.311 -14,863.20 3.75012/15/2032 905,000.00 3.000% 3.200% 97.631 -21,439.45 3.75012/15/2033 930,000.00 3.000% 3.250% 96.899 -28,839.30 3.75012/15/2034 960,000.00 3.125% 3.300% 97.736 -21,734.40 3.75012/15/2035 990,000.00 3.125% 3.350% 96.976 -29,937.60 3.75012/15/2036 1,025,000.00 3.125% 3.390% 96.309 -37,832.75 3.75012/15/2037 1,055,000.00 3.250% 3.420% 97.551 -25,836.95 3.75012/15/2038 1,090,000.00 3.250% 3.440% 97.174 -30,803.40 3.750

15,465,000.00 -263,009.85

Dated Date 12/13/2017Delivery Date 12/13/2017First Coupon 06/15/2018

Par Amount 15,465,000.00Original Issue Discount -263,009.85

Production 15,201,990.15 98.299322%Underwriter's Discount -54,044.68 -0.349464%

Purchase Price 15,147,945.47 97.949858%Accrued Interest

Net Proceeds 15,147,945.47

Nov 28, 2017 10:21 am Page 5

COP DEBT SERVICE




Period COP TotalEnding Principal Coupon Interest Debt Service Balance COP Value

06/30/2018 213,896.13 213,896.13 15,465,000.00 15,465,000.0006/30/2019 423,091.26 423,091.26 15,465,000.00 15,465,000.0006/30/2020 423,091.26 423,091.26 15,465,000.00 15,465,000.0006/30/2021 423,091.26 423,091.26 15,465,000.00 15,465,000.0006/30/2022 690,000.00 1.750% 417,053.76 1,107,053.76 14,775,000.00 14,775,000.0006/30/2023 705,000.00 1.750% 404,847.51 1,109,847.51 14,070,000.00 14,070,000.0006/30/2024 715,000.00 2.000% 391,528.76 1,106,528.76 13,355,000.00 13,355,000.0006/30/2025 735,000.00 2.200% 376,293.76 1,111,293.76 12,620,000.00 12,620,000.0006/30/2026 750,000.00 2.300% 359,583.76 1,109,583.76 11,870,000.00 11,870,000.0006/30/2027 765,000.00 2.400% 341,778.76 1,106,778.76 11,105,000.00 11,105,000.0006/30/2028 785,000.00 2.550% 322,590.01 1,107,590.01 10,320,000.00 10,320,000.0006/30/2029 805,000.00 2.500% 302,518.76 1,107,518.76 9,515,000.00 9,515,000.0006/30/2030 830,000.00 2.750% 281,043.76 1,111,043.76 8,685,000.00 8,685,000.0006/30/2031 850,000.00 3.000% 256,881.26 1,106,881.26 7,835,000.00 7,835,000.0006/30/2032 880,000.00 3.000% 230,931.26 1,110,931.26 6,955,000.00 6,955,000.0006/30/2033 905,000.00 3.000% 204,156.26 1,109,156.26 6,050,000.00 6,050,000.0006/30/2034 930,000.00 3.000% 176,631.26 1,106,631.26 5,120,000.00 5,120,000.0006/30/2035 960,000.00 3.125% 147,681.26 1,107,681.26 4,160,000.00 4,160,000.0006/30/2036 990,000.00 3.125% 117,212.51 1,107,212.51 3,170,000.00 3,170,000.0006/30/2037 1,025,000.00 3.125% 85,728.13 1,110,728.13 2,145,000.00 2,145,000.0006/30/2038 1,055,000.00 3.250% 52,568.75 1,107,568.75 1,090,000.00 1,090,000.0006/30/2039 1,090,000.00 3.250% 17,712.50 1,107,712.50

15,465,000.00 5,969,911.94 21,434,911.94

Nov 28, 2017 10:21 am Page 6

COP DEBT SERVICE




Period Annual COP TotalEnding Principal Coupon Interest Debt Service Debt Service Balance COP Value

12/13/2017 15,465,000.00 15,465,000.0006/15/2018 213,896.13 213,896.13 15,465,000.00 15,465,000.0006/30/2018 213,896.13 15,465,000.00 15,465,000.0012/15/2018 211,545.63 211,545.63 15,465,000.00 15,465,000.0006/15/2019 211,545.63 211,545.63 15,465,000.00 15,465,000.0006/30/2019 423,091.26 15,465,000.00 15,465,000.0012/15/2019 211,545.63 211,545.63 15,465,000.00 15,465,000.0006/15/2020 211,545.63 211,545.63 15,465,000.00 15,465,000.0006/30/2020 423,091.26 15,465,000.00 15,465,000.0012/15/2020 211,545.63 211,545.63 15,465,000.00 15,465,000.0006/15/2021 211,545.63 211,545.63 15,465,000.00 15,465,000.0006/30/2021 423,091.26 15,465,000.00 15,465,000.0012/15/2021 690,000.00 1.750% 211,545.63 901,545.63 14,775,000.00 14,775,000.0006/15/2022 205,508.13 205,508.13 14,775,000.00 14,775,000.0006/30/2022 1,107,053.76 14,775,000.00 14,775,000.0012/15/2022 705,000.00 1.750% 205,508.13 910,508.13 14,070,000.00 14,070,000.0006/15/2023 199,339.38 199,339.38 14,070,000.00 14,070,000.0006/30/2023 1,109,847.51 14,070,000.00 14,070,000.0012/15/2023 715,000.00 2.000% 199,339.38 914,339.38 13,355,000.00 13,355,000.0006/15/2024 192,189.38 192,189.38 13,355,000.00 13,355,000.0006/30/2024 1,106,528.76 13,355,000.00 13,355,000.0012/15/2024 735,000.00 2.200% 192,189.38 927,189.38 12,620,000.00 12,620,000.0006/15/2025 184,104.38 184,104.38 12,620,000.00 12,620,000.0006/30/2025 1,111,293.76 12,620,000.00 12,620,000.0012/15/2025 750,000.00 2.300% 184,104.38 934,104.38 11,870,000.00 11,870,000.0006/15/2026 175,479.38 175,479.38 11,870,000.00 11,870,000.0006/30/2026 1,109,583.76 11,870,000.00 11,870,000.0012/15/2026 765,000.00 2.400% 175,479.38 940,479.38 11,105,000.00 11,105,000.0006/15/2027 166,299.38 166,299.38 11,105,000.00 11,105,000.0006/30/2027 1,106,778.76 11,105,000.00 11,105,000.0012/15/2027 785,000.00 2.550% 166,299.38 951,299.38 10,320,000.00 10,320,000.0006/15/2028 156,290.63 156,290.63 10,320,000.00 10,320,000.0006/30/2028 1,107,590.01 10,320,000.00 10,320,000.0012/15/2028 805,000.00 2.500% 156,290.63 961,290.63 9,515,000.00 9,515,000.0006/15/2029 146,228.13 146,228.13 9,515,000.00 9,515,000.0006/30/2029 1,107,518.76 9,515,000.00 9,515,000.0012/15/2029 830,000.00 2.750% 146,228.13 976,228.13 8,685,000.00 8,685,000.0006/15/2030 134,815.63 134,815.63 8,685,000.00 8,685,000.0006/30/2030 1,111,043.76 8,685,000.00 8,685,000.0012/15/2030 850,000.00 3.000% 134,815.63 984,815.63 7,835,000.00 7,835,000.0006/15/2031 122,065.63 122,065.63 7,835,000.00 7,835,000.0006/30/2031 1,106,881.26 7,835,000.00 7,835,000.0012/15/2031 880,000.00 3.000% 122,065.63 1,002,065.63 6,955,000.00 6,955,000.0006/15/2032 108,865.63 108,865.63 6,955,000.00 6,955,000.0006/30/2032 1,110,931.26 6,955,000.00 6,955,000.0012/15/2032 905,000.00 3.000% 108,865.63 1,013,865.63 6,050,000.00 6,050,000.0006/15/2033 95,290.63 95,290.63 6,050,000.00 6,050,000.0006/30/2033 1,109,156.26 6,050,000.00 6,050,000.0012/15/2033 930,000.00 3.000% 95,290.63 1,025,290.63 5,120,000.00 5,120,000.0006/15/2034 81,340.63 81,340.63 5,120,000.00 5,120,000.0006/30/2034 1,106,631.26 5,120,000.00 5,120,000.0012/15/2034 960,000.00 3.125% 81,340.63 1,041,340.63 4,160,000.00 4,160,000.0006/15/2035 66,340.63 66,340.63 4,160,000.00 4,160,000.0006/30/2035 1,107,681.26 4,160,000.00 4,160,000.0012/15/2035 990,000.00 3.125% 66,340.63 1,056,340.63 3,170,000.00 3,170,000.0006/15/2036 50,871.88 50,871.88 3,170,000.00 3,170,000.0006/30/2036 1,107,212.51 3,170,000.00 3,170,000.0012/15/2036 1,025,000.00 3.125% 50,871.88 1,075,871.88 2,145,000.00 2,145,000.0006/15/2037 34,856.25 34,856.25 2,145,000.00 2,145,000.0006/30/2037 1,110,728.13 2,145,000.00 2,145,000.0012/15/2037 1,055,000.00 3.250% 34,856.25 1,089,856.25 1,090,000.00 1,090,000.0006/15/2038 17,712.50 17,712.50 1,090,000.00 1,090,000.0006/30/2038 1,107,568.75 1,090,000.00 1,090,000.0012/15/2038 1,090,000.00 3.250% 17,712.50 1,107,712.5006/30/2039 1,107,712.50

15,465,000.00 5,969,911.94 21,434,911.94 21,434,911.94

Nov 28, 2017 10:21 am Page 7

COP SUMMARY STATISTICS




Dated Date 12/13/2017Delivery Date 12/13/2017Last Maturity 12/15/2038

Arbitrage Yield 3.052402%True Interest Cost (TIC) 3.085726%Net Interest Cost (NIC) 3.070019%All-In TIC 3.177755%Average Coupon 2.915197%

Average Life (years) 13.242Weighted Average Maturity (years) 13.189Duration of Issue (years) 10.846

Par Amount 15,465,000.00COP Proceeds 15,201,990.15Total Interest 5,969,911.94Net Interest 6,286,966.47Total Debt Service 21,434,911.94Maximum Annual Debt Service 1,111,293.76Average Annual Debt Service 1,020,440.13

Par Average Average PV of 1 bpCOP Component Value Price Coupon Life change

Serial COPs 15,465,000.00 98.299 2.915% 13.242 15,998.45

15,465,000.00 13.242 15,998.45

All-In ArbitrageTIC TIC Yield

Par Value 15,465,000.00 15,465,000.00 15,465,000.00 + Accrued Interest + Premium (Discount) -263,009.85 -263,009.85 -263,009.85 - Underwriter's Discount -54,044.68 -54,044.68 - Cost of Issuance Expense -147,945.47 - Other Amounts

Target Value 15,147,945.47 15,000,000.00 15,201,990.15

Target Date 12/13/2017 12/13/2017 12/13/2017Yield 3.085726% 3.177755% 3.052402%

Nov 28, 2017 10:21 am Page 8

PROOF OF ARBITRAGE YIELD




Present Valueto 12/13/2017

Date Debt Service @ 3.0524021332%

06/15/2018 213,896.13 210,645.2612/15/2018 211,545.63 205,198.7406/15/2019 211,545.63 202,114.0812/15/2019 211,545.63 199,075.7806/15/2020 211,545.63 196,083.1612/15/2020 211,545.63 193,135.5206/15/2021 211,545.63 190,232.1912/15/2021 901,545.63 798,526.8706/15/2022 205,508.13 179,288.6112/15/2022 910,508.13 782,400.9706/15/2023 199,339.38 168,717.6512/15/2023 914,339.38 762,248.7206/15/2024 192,189.38 157,812.1812/15/2024 927,189.38 749,896.7206/15/2025 184,104.38 146,662.4712/15/2025 934,104.38 732,946.2806/15/2026 175,479.38 135,620.3012/15/2026 940,479.38 715,928.6506/15/2027 166,299.38 124,690.3812/15/2027 951,299.38 702,556.7406/15/2028 156,290.63 113,689.1412/15/2028 961,290.63 688,751.6106/15/2029 146,228.13 103,195.4912/15/2029 976,228.13 678,582.9806/15/2030 134,815.63 92,302.5612/15/2030 984,815.63 664,125.7306/15/2031 122,065.63 81,079.4212/15/2031 1,002,065.63 655,594.4506/15/2032 108,865.63 70,153.8912/15/2032 1,013,865.63 643,521.7506/15/2033 95,290.63 59,573.7412/15/2033 1,025,290.63 631,354.8906/15/2034 81,340.63 49,335.0912/15/2034 1,041,340.63 622,104.1506/15/2035 66,340.63 39,036.5812/15/2035 1,056,340.63 612,234.7806/15/2036 50,871.88 29,041.1412/15/2036 1,075,871.88 604,948.3606/15/2037 34,856.25 19,304.5812/15/2037 1,089,856.25 594,525.7806/15/2038 17,712.50 9,517.0712/15/2038 1,107,712.50 586,235.69

21,434,911.94 15,201,990.15

Proceeds Summary

Delivery date 12/13/2017Par Value 15,465,000.00Premium (Discount) -263,009.85

Target for yield calculation 15,201,990.15

Nov 28, 2017 10:21 am Page 9

FORM 8038 STATISTICS





RedemptionCOP Component Date Principal Coupon Price Issue Price at Maturity

Serial COPs:12/15/2021 690,000.00 1.750% 99.692 687,874.80 690,000.0012/15/2022 705,000.00 1.750% 98.956 697,639.80 705,000.0012/15/2023 715,000.00 2.000% 99.438 710,981.70 715,000.0012/15/2024 735,000.00 2.200% 99.935 734,522.25 735,000.0012/15/2025 750,000.00 2.300% 99.781 748,357.50 750,000.0012/15/2026 765,000.00 2.400% 99.678 762,536.70 765,000.0012/15/2027 785,000.00 2.550% 99.824 783,618.40 785,000.0012/15/2028 805,000.00 2.500% 98.013 789,004.65 805,000.0012/15/2029 830,000.00 2.750% 98.588 818,280.40 830,000.0012/15/2030 850,000.00 3.000% 99.466 845,461.00 850,000.0012/15/2031 880,000.00 3.000% 98.311 865,136.80 880,000.0012/15/2032 905,000.00 3.000% 97.631 883,560.55 905,000.0012/15/2033 930,000.00 3.000% 96.899 901,160.70 930,000.0012/15/2034 960,000.00 3.125% 97.736 938,265.60 960,000.0012/15/2035 990,000.00 3.125% 96.976 960,062.40 990,000.0012/15/2036 1,025,000.00 3.125% 96.309 987,167.25 1,025,000.0012/15/2037 1,055,000.00 3.250% 97.551 1,029,163.05 1,055,000.0012/15/2038 1,090,000.00 3.250% 97.174 1,059,196.60 1,090,000.00

15,465,000.00 15,201,990.15 15,465,000.00

Stated WeightedMaturity Interest Issue Redemption Average

Date Rate Price at Maturity Maturity Yield

Final Maturity 12/15/2038 3.250% 1,059,196.60 1,090,000.00Entire Issue 15,201,990.15 15,465,000.00 13.1894 3.0524%

Proceeds used for accrued interest 0.00Proceeds used for bond issuance costs (including underwriters' discount) 201,990.15Proceeds used for credit enhancement 0.00Proceeds allocated to reasonably required reserve or replacement fund 0.00

Nov 28, 2017 10:21 am Page 10

PROOF OF ARBITRAGE YIELD




Present Valueto 12/13/2017

Date Debt Service @ 3.0524021332%

06/15/2018 213,896.13 210,645.2612/15/2018 211,545.63 205,198.7406/15/2019 211,545.63 202,114.0812/15/2019 211,545.63 199,075.7806/15/2020 211,545.63 196,083.1612/15/2020 211,545.63 193,135.5206/15/2021 211,545.63 190,232.1912/15/2021 901,545.63 798,526.8706/15/2022 205,508.13 179,288.6112/15/2022 910,508.13 782,400.9706/15/2023 199,339.38 168,717.6512/15/2023 914,339.38 762,248.7206/15/2024 192,189.38 157,812.1812/15/2024 927,189.38 749,896.7206/15/2025 184,104.38 146,662.4712/15/2025 934,104.38 732,946.2806/15/2026 175,479.38 135,620.3012/15/2026 940,479.38 715,928.6506/15/2027 166,299.38 124,690.3812/15/2027 951,299.38 702,556.7406/15/2028 156,290.63 113,689.1412/15/2028 961,290.63 688,751.6106/15/2029 146,228.13 103,195.4912/15/2029 976,228.13 678,582.9806/15/2030 134,815.63 92,302.5612/15/2030 984,815.63 664,125.7306/15/2031 122,065.63 81,079.4212/15/2031 1,002,065.63 655,594.4506/15/2032 108,865.63 70,153.8912/15/2032 1,013,865.63 643,521.7506/15/2033 95,290.63 59,573.7412/15/2033 1,025,290.63 631,354.8906/15/2034 81,340.63 49,335.0912/15/2034 1,041,340.63 622,104.1506/15/2035 66,340.63 39,036.5812/15/2035 1,056,340.63 612,234.7806/15/2036 50,871.88 29,041.1412/15/2036 1,075,871.88 604,948.3606/15/2037 34,856.25 19,304.5812/15/2037 1,089,856.25 594,525.7806/15/2038 17,712.50 9,517.0712/15/2038 1,107,712.50 586,235.69

21,434,911.94 15,201,990.15

Proceeds Summary

Delivery date 12/13/2017Par Value 15,465,000.00Premium (Discount) -263,009.85

Target for yield calculation 15,201,990.15

Nov 28, 2017 10:21 am Page 11

FORM 8038 STATISTICS





RedemptionCOP Component Date Principal Coupon Price Issue Price at Maturity

Serial COPs:12/15/2021 690,000.00 1.750% 99.692 687,874.80 690,000.0012/15/2022 705,000.00 1.750% 98.956 697,639.80 705,000.0012/15/2023 715,000.00 2.000% 99.438 710,981.70 715,000.0012/15/2024 735,000.00 2.200% 99.935 734,522.25 735,000.0012/15/2025 750,000.00 2.300% 99.781 748,357.50 750,000.0012/15/2026 765,000.00 2.400% 99.678 762,536.70 765,000.0012/15/2027 785,000.00 2.550% 99.824 783,618.40 785,000.0012/15/2028 805,000.00 2.500% 98.013 789,004.65 805,000.0012/15/2029 830,000.00 2.750% 98.588 818,280.40 830,000.0012/15/2030 850,000.00 3.000% 99.466 845,461.00 850,000.0012/15/2031 880,000.00 3.000% 98.311 865,136.80 880,000.0012/15/2032 905,000.00 3.000% 97.631 883,560.55 905,000.0012/15/2033 930,000.00 3.000% 96.899 901,160.70 930,000.0012/15/2034 960,000.00 3.125% 97.736 938,265.60 960,000.0012/15/2035 990,000.00 3.125% 96.976 960,062.40 990,000.0012/15/2036 1,025,000.00 3.125% 96.309 987,167.25 1,025,000.0012/15/2037 1,055,000.00 3.250% 97.551 1,029,163.05 1,055,000.0012/15/2038 1,090,000.00 3.250% 97.174 1,059,196.60 1,090,000.00

15,465,000.00 15,201,990.15 15,465,000.00

Stated WeightedMaturity Interest Issue Redemption Average

Date Rate Price at Maturity Maturity Yield

Final Maturity 12/15/2038 3.250% 1,059,196.60 1,090,000.00Entire Issue 15,201,990.15 15,465,000.00 13.1894 3.0524%

Proceeds used for accrued interest 0.00Proceeds used for bond issuance costs (including underwriters' discount) 201,990.15Proceeds used for credit enhancement 0.00Proceeds allocated to reasonably required reserve or replacement fund 0.00


Tab I: Municipal Market Overview


Mun

icip

alM

arke

tO

verv

iew


Prior to the sale of the Series 2017 Certificates, the municipal market entered a period of volatility due to the uncertainty

regarding tax reform and implications for the municipal bond market, as well as an increase in supply as a result of this

insecurity. This caused interest rates to rise and investors to become more selective. The initial drafts of the tax reform

included the removal of all advance refundings as well as private activity bonds after December 31, 2017. As a result, many

issuers pushed deals into 2017 that were not previously expected in order to close prior to the end of the year. Due to this

high activity, December 2017 issuance volume of $62.5 billion surpassed the previous record of $54.7 billion in December

1985, which was just before the last comprehensive tax overhaul took effect.

Even with the large surge in the last quarter of 2017, the total issuance volume was down for the year compared to the record

breaking issuance volume in 2016. Total volume for 2017 was down 3.4% at $436.3 billion compared to $451.6 billion in

2016. As can be seen in the chart below, 2016 issuance led in every month with the exception of January, November, and

December.

Although the market towards the end of the year was very volatile, interest rates actually trended down throughout most of

the curve with the exception of the short end. The Fed raised interest rates twice in 2017, with the second 25 basis point

increase occurring in December. This increase was already priced into the market on pricing day.

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

January February March April May June July August September October NovemberDecember

Vo

lum

ein

Mil

lio

ns($

)

Issuance Volume

2016 2017

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

AAA GO 1 yr AAA GO 5 yr AAA GO 10 yr AAA GO 30 yr


As shown in the chart above, the 1 year rate began to gradually increase in October and continued to rise through the end

of the year. However the 5, 10, and 30 year rates moved throughout the year, with a large amount of volatility in the last

month, and ended at lower rates than the beginning of the year. The volatility at the end of November and beginning of

December caused interest rates in some areas of the curve to move by as much as 20 basis points in one week. One particular

trend from 2017 that will continue to have implications in 2018 is the flattening of the yield curve due to the reduction in

interest rates on the long end of the curve and the increase on the short end. The yield curves from the first and last day of

2017 can be seen in the chart below. The 1 and 30 year rates were separated by 207 basis points at the beginning of the year;

the spread was reduced to just 113 basis points by the end of 2017. This trend will be important to monitor as the market

moves into 2018.

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

1/3/2017 12/29/2017


Tab J: Updated District Base Rental Payments


Upd

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Cherry Creek School District No. 5Outstanding Capital Leases and Certificates of ParticipationSummary of Outstanding Issues as of December 13, 2017

Current Ratings

Moody's/S&P

Bus Lease-Purchase Agreement 2015 4,178,500$ 3,213,858$ 2.090% 3/24/2025 3/24/2016 Eligible for Prepayment N/A

Bus Lease-Purchase Agreement 2016 3,368,178$ 2,904,471$ 1.990% 1/25/2026 1/25/2017 Eligible for Prepayment N/A

Bus Lease-Purchase Agreement 2017 3,552,683$ 3,393,648$ 2.296% 3/3/2027 3/3/2018Not Currently Eligible

for PrepaymentN/A

Technology Lease-Purchase Agreement 2017 12,000,000$ 12,000,000$ 1.781% 7/15/2021 6/15/2018Not Currently Eligible

for PrepaymentN/A

Certificates of Participation 2017 15,465,000$ 15,465,000$ 1.750%-3.250% 12/15/2038 12/15/2027*Not Currently Eligible

for RefundingAa2/AA

Total Outstanding Principal: 38,564,361$ 36,976,977$

*The Series 2017 COPs have a standard 10 year call as well as an extraordinary optional redemption provision. This provision allows the District to defease the COPs with general

obligation bond proceeds on or after 12/15/2020.

Issue Title SeriesOriginal

Principal

Outstanding

Principal

Outstanding

Coupon Range

Final

MaturityCall Date Refunding Eligibility

$4,178,500.00 $3,368,178.14 $3,552,682.55 $12,000,000.00 $15,465,000.00

Bus Lease- Bus Lease- Bus Lease- Technology Lease- Certificates of

Period Purchase Agreement Purchase Agreement Purchase Agreement Purchase Agreement Participation Total

Ending 2015 2016 2017 2017 Series 2017 Base Rentals

6/30/2018 232,603.42 186,554.70 199,819.44 124,670.00 213,896.13 957,544

6/30/2019 465,206.84 373,109.40 399,638.88 3,551,779.78 423,091.26 5,212,826

6/30/2020 465,206.84 373,109.40 399,638.88 3,551,779.78 423,091.26 5,212,826

6/30/2021 465,206.84 373,109.40 399,638.88 3,551,779.78 423,091.26 5,212,826

6/30/2022 465,206.84 373,109.40 399,638.88 1,775,889.89 1,107,053.76 4,120,899

6/30/2023 465,206.84 373,109.40 399,638.88 1,109,847.51 2,347,803

6/30/2024 465,206.84 373,109.40 399,638.88 1,106,528.76 2,344,484

6/30/2025 465,206.84 373,109.40 399,638.88 1,111,293.76 2,349,249

6/30/2026 373,109.40 399,638.88 1,109,583.76 1,882,332

6/30/2027 399,638.88 1,106,778.76 1,506,418

6/30/2028 1,107,590.01 1,107,590

6/30/2029 1,107,518.76 1,107,519

6/30/2030 1,111,043.76 1,111,044

6/30/2031 1,106,881.26 1,106,881

6/30/2032 1,110,931.26 1,110,931

6/30/2033 1,109,156.26 1,109,156

6/30/2034 1,106,631.26 1,106,631

6/30/2035 1,107,681.26 1,107,681

6/30/2036 1,107,212.51 1,107,213

6/30/2037 1,110,728.13 1,110,728

6/30/2038 1,107,568.75 1,107,569

6/30/2039 1,107,712.50 1,107,713

3,489,051.30$ 3,171,429.90$ 3,796,569.36$ 12,555,899.23$ 21,434,911.94$ 44,447,861.73$

Cherry Creek School District No. 5All Outstanding Capital Lease Obligations

Fiscal Year Base Rental Payments by Lease

As of December 13, 2017

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

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eCherry Creek School District No. 5

All Outstanding Capital Lease ObligationsFiscal Year Base Rental Payment by Lease

As of December 13, 2017

2015 Bus 2016 Bus 2017 Bus 2017 Technology 2017 COPs

cherry creek school district no. 5 certificates of participation, … · 2018. 12. 4. · closing...

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