CSCDA Water and Wastewater Revenue Bond Pool

The California Statewide Communities Development Authority (CSCDA) is currently offering California water and wastewater agencies the opportunity to join its statewide, pooled revenue bond program (the "Bonds"). Eligible applicants for the CSCDA Pooled Bond program include cities, counties, and special districts. The Bonds can be used to finance or refinance water, sewer, and wastewater capital improvement projects in amounts ranging from $1,000,000 to $80,000,000. The economies of scale of a pooled bond issue allow for both lower costs of issuance (including bond insurance) and lower interest rates. Smaller borrowings are welcomed and may be accomplished on a cost-effective basis. To date, the Program has issued over $488 million of Water and Wastewater Pooled Revenue Bonds for our pool participants.

The Bonds are fixed for the term of the financing and is set at the "AAA" rated, California tax-exempt bond rate on the day of the Bond sale. The financing can be amortized up to 40 years. Issuance costs are between $35,000 to $95,000, depending on the size of the issue, plus underwriter's discount and bond insurance fees. All fees are contingent on the successful sale of the bonds and paid entirely from bond proceeds. Annual servicing fees are .015% of the outstanding principal balance plus $1,850 for annual trustee fees.

• Lower issuance costs with fixed-rate, AAA-rated pooled financing structure
• Low interest rates with AAA-rated, tax-exempt, insured revenue bonds
• Packaged program with proven financing team
• Authorized with a single resolution of the participant's governing board
• Streamlined documentation reduces staff time requirement
• Easy refinancing of existing water and wastewater debt, including revenue bonds, leases, loans, and certificates of participation (COPs)
• Finance (or refinance) capital projects for up to 30 years
• In most cases, no cash funded reserve requirement
• Frequent market access

Financing Team

Underwriter: Henderson Capital Partners LLC is a municipal securities broker-dealer specializing in the underwriting of tax-exempt bonds. The firm has participated in over 300 municipal bond issues totaling over $32 billion since 1992.

Issuer: California Statewide Communities Development Authority is a joint powers authority sponsored by the League of California Cities and the California State Association of Counties and is one of the largest issuers in the nation.

Issuers Counsel: Orrick Herrington & Sutcliffe has more than 100 years of public finance experience and ranks first in the country for serving as bond counsel and underwriter’s counsel.

Bond Counsel: Hawkins Delafield & Wood is a law firm specializing in public finance. The firm serves nationally as bond counsel, underwriter's counsel and special tax counsel in financings throughout the United States. The firm also provides arbitrage rebate and continuing disclosure services.

Trustee: Union Bank of California has offered Corporate Trust services to governmental agencies, municipalities, corporations and financial institutions in the process of raising capital since 1923. The Bank is now the only California bank offering Corporate Trust services with its principal offices in Los Angeles and San Francisco.

Credit Enhancement: Financial Security Assurance, Inc., is a global financial guaranty insurer offering the highest quality AAA/Aaa/AAA rating available.

Financing Structure

AAA-rated, Pool Financing Structure

CSCDA's insured pooled financing vehicle for local jurisdictions issuing Water Revenue and Wastewater Revenue financings (the "Pool"), is a Marks-Roos Revenue Bond pool that acquires a variety of local government obligations, including general installment sales, and enterprise fund financings. The CSCDA-issued Bonds are used to acquire an equal amount of underlying securities issued directly to the Pool by participating special districts.

The Pool utilizes a credit enhanced, closed indenture structure. All Bonds issued through this program carry "AAA" ratings by virtue of the commercial bond insurance purchased from FSA (Financial Security Assurance, Inc.). Borrowers receive significant savings from both the low AAA-level interest rates and from shared transaction costs. The program particularly benefits the many public water and wastewater entities with smaller financing needs. The pool establishes credit strength through the participation of various credits throughout the state. In addition, the Pool is secured by a debt service reserve fund.

Bonds issued by CSCDA through this program are special obligations, payable solely from the payments made by participating jurisdictions. No other CSCDA funds or funds of CSCDA members are pledged or available for payment on the Bonds. The pledge of each participant is solely a pledge of that participant's Water or Wastewater System's net revenues. Each jurisdiction's pledge secures only its own payments. Individual participants are not obligated to compensate for any deficiency in payment by other participants. The Pool's structure ensures that participants are not liable in any way for the payments or defaults of other participants.

Program participants must maintain System Revenues of at least 120% of their debt service obligation to the CSCDA Pool, and on other debt of parity. Pool participants may enter into additional borrowing arrangements that are equal to their obligation to the CSCDA pool, and secured by their System's revenues, provided that the participant satisfies the existing revenue covenant and certain other conditions. For more information concerning this additional debt test, contact the CSCDA's underwriter or one of the other Financing Team Members.

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